tool befit: Singapore Property News This Week #85

Residential

EC market may see review

The Forestville EC project was stopped from selling its units after its launch, a sign that the authorities are reviewing or revising measures that will result in the developer having to make changes to the proposed development plan. It was launched for balloting without URA?s approval to sell. The developer, Hao Yuan Investment, claimed that there were no sales bookings but instead Express of Interests for potential buyers and that no cheques were collected. URA was said to be concerned over the proposed size of the penthouses in the development and has yet to give approval to proposed changes in the development plans before Forestville?s launch. The Forestville plan includes 29 penthouses ranging from 1,550 sq ft to 2,756 sq ft. Large ECs (2,000 to 2,500 sq ft) are often sold at lower psf prices which is problematic since large units are not suitable for ECs (given that the buyers usually have higher incomes) especially since it is a form of subsidised housing. Furthermore, a larger proportion of such large units could potentially push up the prices of normal units. Possible measures that the authorities may introduce include a cap on number of EC units exceeding 2,000 sq ft in size and an extended family income ceiling for ECs.

(Source: Business Times)

Private home prices rose 1.8% in Q4 2012

The 1.8% increase in URA?s overall private-home price index in Q4 is the highest since the 2% increase in Q2 2011, bringing the full-year increase to 2.8%. This was largely due to the increased prices of mass-market homes, which was in turn a result of the high resale prices of HDB flats. The OCR saw a 3.4% increase which could be due to the high prices for projects near MRT stations or the increase in prices of older completed projects. The RCR saw a 0.9% increase while the CCR saw a 0.8% increase. While the ABSD and the cap on loan tenures have helped to control the increase in prices, the low interest rates and liquidity have led to much investment demand. This, coupled with the increased land prices, will also result in an increase of private home prices. Nevertheless, the lacklustre economy and the increase in supply would help to control price increases, resulting in an overall increase of 2-3% at most. Sales volume is also expected to be no more than 20,000 units in 2013. An estimated total of 21,600 units were sold in the primary market last year, with another 12,566 units sold in the secondary market. There were also an estimated 2,269 sub-sale transactions in 2012. These figures (all excluding ECs) are expected to increase once all the caveats in Q4 are tallied.

(Source: Business Times)

HDB resale flat prices hit historical high in 2012

HDB?s latest flash estimates Resale Price Index (RPI) reflected a 2.5% increase to 202.9 in Q4 2012 from Q3 2012, a 6.6% increase from 2011?s figure. This is despite the record number of 27,084 BTO flats and 7,153 Sales of Balance flats launched in the 2012. This is attributed to the bias of the new flat programme towards first-timers, leading to demand for resale flats from non-first-timers and first timers in urgent need of housing (since it takes three years for completion). Meanwhile, HDB has announced its intention to launch at least 23,000 BTO flats, up from the earlier announcement of at least 20,000. 3,346 such units will be launched in January in Choa Chu Kang, Yishun, Hougang, Tampines, Kallang Whampoa and Ang Mo Kio. The high prices was attributed to the limited supply of resale flats caused by the extension of the Minimum Occupancy Period, the increase in the number of BTO flats and ECs allocated to second-timers and the requirement that private home owners sell their private residences if they purchase HDB flats. The high demand for resale flats as a result of buyers fearing further increases in COVs (median: $34,000 in Q4 2012) bringing forward their purchases is also another factor.

Looking ahead, resale prices are expected to increase by 4-8% in 2013 despite the increased supply of BTO flats since the effect will only be felt in H2 2013. Even then, prices are unlikely to fall unless there is a recession.

(Source: Business Times)

Hao Yuan Investment optimistic about reopening Forestville EC showroom

Hao Yuan Investment, the developer of the Forestville EC, claimed that the closure of its showroom until further notice was not due to URA?s instruction to not sell any units but was for ?general maintenance work?. However, it also stated that even when the showroom reopens, the units will only be available for viewing but not for purchase. URA had stopped Hao Yuan from selling the units as it was found to have launched the project without having gotten URA?s go-ahead on proposed changes in the development plans, in particular, the size of the penthouses, which ranges from 1,550 sq ft to 2,756 sq ft. While Hao Yuan had launched the project, sales were not booked but rather, non-binding Expression of Interests were signed instead. The developer also stated that agents were told not to collect cheques and to return any cheque collected.

(Source: Business Times)

Kismis Lodge back on the collective sale market

Kismis Lodge, a 64- unit walk-up-apartment development which sits on a 70,283 sq ft site located off Toh Tuck Road is back on the market with an indicative pricing of at least $90 million, compared to the earlier asking price of $90-95 million. Zoned for ?three-storey mixed landed housing?, the site can potentially yield 43 strata terraces which can fetch $3.5-4 million per unit, or other combinations of landed housing subject to approval. The site is expected to be fairly popular given the limited supply of landed residential site under the GLS. No development charge is payable for the site which tender closes on Jan 24 at 2.30pm.

(Source: Business Times)

Commercial

Industrial property prices to grow at a more moderate pace

Despite the governmental measures such as halving the maximum industrial land tenure to 30 years, and introducing restrictions on subdivision in selected sites and requiring strata units to be at least 150 sq m, prices of industrial properties continued to rise rapidly, with the industrial property prices increasing by 26.7% from Q1 ?Q3, and rents increasing by 6% in the same period. The average capital values of ground and upper floor prime freehold conventional factory space increased by 15.7% and 19.5% to $699 psf and $636 psf respectively from Q1 to Q3 while the average capital values of prime freehold conventional warehouse space, ground and upper floor space grew by 8.4% and 10.1% respectively in Q1 to Q3.

While the shorter tenure of GLS sites is intended to make land more affordable for industrialist to build their custom facilities, the objective would not be achieved if the developer succeeded in bidding for the site and strata-subdivide the development to attract investors instead of building facilities more suited to industrial needs. This may eventually lead to a lack of supply of suitable premises which will cause rents to increase while the unsuitable premises are rented out for unauthorised uses or left vacant.

Sales volume rose 10% from 2,871 units last year to 3,160 units in 2012, as a result of increase in investment purchases from both foreign and local investors, as well as an increase in purchases by companies (10.5% increase in 2012).

Looking ahead, the increase in industrial property prices is expected to slow, as a result of factories relocating overseas, the 16 million sq ft supply of industrial space to be completed in 2013, though the market liquidity will continue to ensure demand. Industrial properties with attractive aspects such as good locations, facilities and longer tenures may see a price increase of 10-15% in 2013. Rents are also expect to increase by 3-5%.

(Source: Business Times)

Two-thirds of the 61 available National Stadium hospitality suites sold

The 55,000-seater $1.33 billion Singapore Sports Hub?s National Stadium which will open in April 2014 has sold two-thirds of the 61 released luxury hospitality suites. There are a total of 62 such suites, one of which has been set aside for VVIPs. The suites range from 25 to 89 sq m and can accommodate eight to 30 people each. There is a minimum commitment of three years for the suites, which annual fees are in the range of $72,000 to $272,000. Facilities and amenities include in-suite catering, a members-only carpark and priority event booking. New owners of these suites include ANZ Singapore and DBS Bank. Companies from the financial services, construction and insurance industries make up 40%, 15% and 10% of the owners of the sold suites so far.

(Source: Business Times)

Freehold Paya Lebar industrial white site on the collective sale market

20-unit Guang Ming Industrial Building which sits on the 19,789 sq ft freehold white site in Tai Seng Industrial Estate in Payar Lebar is asking for at least $58 million, or $837 psf ppr. It has a 3.5 maximum GPR and a 70,000 sq ft GFA, including 20,000 sq ft of retail and commercial space. It is likely to be popular since it is located near Tai Seng MRT station and the Ang Mo Kio, Toa Payoh and the East Coast residential areas. The tender closes on Feb 5.

(Source: Business Times)

Tuas industrial plots saw much interest in recent bidding

The 30-year leasehold 2.74-ha plot zoned for Business 2 development at Buroh Street attracted seven bids, with the top bid of $82.1 million or $111.35 psf ppr from Capital Development and ZACD Investments. This is within the expected five to nine bids of between $40 to $105 psf ppr. The two plots at Tuas South Street 6 are both 22.5 year leasehold 0.86-ha plots. Plot 30 attracted 14 bids with the highest of $6.6 million or $70.99 psf ppr from Koh Brothers Building & Civil Engineering Contractor while plot 32 attracted 18 bids with the top bid of $6.7 million or $70.75 psf ppr from SH Design & Build.

(Source: Business Times)