Lian Beng's FY09 profit rises 43% to $17m

Jump due to higher revenue from its construction division

By JAMIE LEE

LIAN Beng Group posted a 43 per cent jump in full-year net profit thanks to higher revenue from its construction division.

Net profit attributable to shareholders for the 12 months ended May 31 surged to $17 million from $11.9 million the previous year following a leap in earnings in the second half of the year.

Net earnings more than doubled in the second half of the year to $8.2 million from $3.8 million a year ago.

Earnings per share for the full-year was 3.21 cents compared with 2.39 cents in fiscal 2008.

Lian Beng also proposed a dividend of 0.6 cents per share, consisting of a first and final dividend of 0.4 cents and a special dividend of 0.2 cents.

Revenue surged 58.3 per cent to $308.4 million from $195 million a year ago, with sales from construction division making up nearly all of the sales.

Revenue in the second half of the year surged 77.8 per cent to $158 million from $88.5 million, outpacing the rate of growth seen in the first six months.

Sales rose 42 per cent to $151 million from $106 million a year ago in the first six fiscal months.

'The overall growth in revenue was mainly driven by an increase in construction activities during the year, as well as higher revenue recognition from the progressive completion of various construction projects undertaken by the group,' the company said in its financial statement.

Other than a sliver of sales coming from the Maldives, most of Lian Beng's revenue came from Singapore projects.

Administrative expenses - the company's largest expense item after cost of sales - increased 23.8 per cent to $10.3 million from $8.34 million a year ago. This was due to an increase in staff cost.

Operating cash flow stood at $58.6 million, reversing from a negative operating cash flow of $90.6 million. Total cash in its coffers stands at $24.9 million, also reversing from a negative cash flow of $15.6 million a year ago.

Lian Beng - which has an order book worth $516 million for projects up till fiscal 2011 - said it expects greater demand ahead from both public and private sector projects.

'While the bulk of demand is expected to be contributed by the public sector, the group is also seeing an increase in the number of private residential construction projects available for tender,' Lian Beng said.

'This comes in the wake of renewed interest in the private residential property market, as evidenced by relatively high take-up rates at various property launches,' it added.

Lian Beng sued Manhattan Resources last year for allegedly defaulting on a sales and purchase agreement and is seeking damages of up to $9.4 million. It said yesterday that Manhattan has applied for an extension to submit certain documents requested by the court. The application is fixed for hearing on Aug 3.

The firm added that no provision has been made for the $9.4 million claim of doubtful debt because of 'a favourable prospect of success in its claim against Manhattan and in defending Manhattan's counter-claim'. In a separate announcement yesterday, Lian Beng said that its auditor has indicated 'on a preliminary basis that it is considering the inclusion of an emphasis of matter in its report on the financial statements of the company'. This is 'in respect of a claim filed against Manhattan', it said.

Shares of Lian Beng lost a cent to close at 30 cents yesterday.

Source: The Business Times - 30 Jul 2009

No easy game predicting office cycles

By MORAY ARMSTRONG

THERE is a tendency in the office market to look to the extremes as representative of the market norm. Nowhere is this more apparent than in Singapore, which seems to 'enjoy' particularly volatile market cycles.

Landlords naturally focus on purported record-busting rents in the upswings while tenants conveniently latch on to rumours of extraordinary discounted deals when the tide shifts. It therefore becomes challenging for all involved in the sector to formulate a measured and objective opinion.

The statistics often don't really help. As recently as November 2007, CBRE's semi-annual Global Market Rents Report recorded that Singapore was the fastest rising rental market year-on-year (+82.6 per cent). Last month, we reported that the Republic led the world with the largest year- on-year drop in office occupancy cost (-34.4 per cent). Neither ranking is particularly desirable.

The Singapore office market is undergoing a sharp correction brought on by the financial crisis and severe weakening of the local economy. With an economy expected to contract by 6-9 per cent this year, it's no surprise that demand for offices has wilted.

The most recent growth period of 2004-2007 (GDP 8.2 per cent average) saw office take-up at an average two million sq ft per annum. Impressive for sure, but still well below the mid-1990s' (GDP 9 per cent average) office take-up rates of just under 2.5 million sq ft per annum.

In contrast, during the 2001-2003 downturn (GDP 1.8 per cent average) we saw take-up of 0.18 million sq ft to minus 0.32 million sq ft per annum. This year looks pretty grim and negative take-up of 1.2-1.5 million sq ft is possible.

Core CBD vacancy has almost doubled since the start of the year to 8.5 per cent. The short-term outlook is worrying for landlords and we foresee that vacancy will grow through 2010 to exceed levels in past market downcycles.

Rents have already fallen 46 per cent from the market peak in mid- 2008 with average Grade A and prime rents now standing at $10.15 psf per month and $8.60 psf per month respectively as at Q2 2009. Further downward pressure on rents is a given, even as the pace of decrease shows clear signs of easing.

As if this was not challenging enough, we have a fairly sizeable pipeline of new supply over the next four years - 8.6 million sq ft in total or an average 2.15 million sq ft per annum. This is almost double the 10-year average of new supply and represents a 15 per cent increase in the existing private sector stock.

A feature of the new supply is that a high proportion (65 per cent) are Grade A offices. When the five new developments that fall into this basket are completed, the total size of the existing Grade A office stock will have grown by 81 per cent.

New supply will exceed demand through the next few years even before we take into account further availability arising from sub-leased space (currently about 400,000 sq ft).

So are we looking at an office market landscape that will take years and years to recover? We think this is far from a given. No one should underestimate the robustness of Singapore's office market, which has a habit of outperforming predictions (both in correction and recovery cycles). It is useful to look at previous stress points to illustrate the point.

In July 1992, The Business Times ran an article headlined Office properties face biggest glut ever. The report noted: 'A combination of a huge supply and falling demand has created the office market's biggest glut ever and led developers into a fierce price war to draw new tenants.'

Singapore's office market was enduring an uncomfortably high islandwide vacancy of 11.2 per cent. Of even greater concern was the prospect of a staggering 16 million sq ft of new office construction coming on stream over the following five to six years. This level of new office construction represented an increase of 53 per cent on the then total private office stock. Many market watchers were bearish. Some said there would not be a true recovery for four to five years. There was grave concern about prospects for the mega-office projects in the emerging Marina Centre area.

How did things pan out? The eight new office towers in the Marina Centre area achieved an average 60 per cent pre-let level upon completion. By 1996, vacancy had fallen to 8.5 per cent and prime rents had risen 32 per cent from the 1992 level.

At the depth of the Asian crisis in 1998, vacancy had risen to 14.6 per cent with around 5.1 million sq ft in the development pipeline (an increase of 10 per cent of the then total private office stock).

The conventional wisdom was again a prolonged period of over-supply and depressed rents. Yet, two years later vacancy had actually fallen to 11.3 per cent and prime rents had increased by 23 per cent from the 1998 level.

More recently in 2003 with the perfect storm (global finance and IT downturn, consolidation of local banks, local recession, declining foreign investment, Sars, etc) Singapore's office vacancy stood at 17.9 per cent (representing 12.6 million sq ft of vacant space) and prime rents were at a record low of $4 psf per month. Some market observers said it would take five to seven years before the excess space was absorbed, notwithstanding the limited supply of future confirmed new developments (estimated at only 2.8 million sq ft or a mere 5 per cent increase on total private office stock).

Not quite. Three years later in 2007, islandwide vacancy had shrunk by half from the 2003 level and Singapore was facing a critical shortage of office space. Prime rents had by then risen a staggering 275 per cent from the 2003 market low.

Today, one cannot see on the horizon 1) a new Asia-Pacific boom or 2) a dotcom boom or 3) a tremendous economic growth surge in Singapore. These were the three events that unfolded immediately following previous market crashes and which confounded the predictions of long-term office market malaise. The sheer scale of the economic and financial challenges today could point to a longer road to office market recovery.

Nonetheless, do not underestimate the swiftness with which supply could be absorbed when business growth returns. Landlords and developers look set to have to tough it out for at least the next couple of years.

But it could well be that the best leasing transactions from a tenant's standpoint will need to be concluded within the next six to 12 months before the market recovery is at hand.

The writer is executive director, office services, CB Richard Ellis

Source: The Business Times - 09 Jul 2009

Another condo site to go on sale

URA gets offer for 99-year leasehold site on reserve list at Dakota Crescent

By KALPANA RASHIWALA

(SINGAPORE) For the second time this week, a 99-year leasehold condo site on the government reserve list has been triggered for launch.

Urban Redevelopment Authority said yesterday it has received a successful application for the 1.7 hectare site, which is located at Dakota Crescent and is next to the Dakota Residences condo being developed by Ho Bee.

The developer that successfully applied for the latest plot to be released has undertaken to bid for the site at a minimum $130 million, which works out to about $200 per square foot of potential gross floor area.

This is 62 per cent lower than the $524 psf per plot ratio (psf ppr) that Ho Bee paid for its site in June 2007. Ho Bee launched Dakota Residences at an average price of about $970 psf last year.

It relaunched the project a few months ago at an average price of about $900 psf. URA's monthly developer sales figures for June show a total 27 units were sold in the project during the month at a median price of $870 psf.

Knight Frank chairman Tan Tiong Cheng reckons the top bid for the site could be about $350 psf ppr, which would work out to a breakeven cost of of slightly below $700 psf. 'Bidding should be hot.

'The site is next to Dakota MRT station and fronts the Geylang River. And it's in a proven location,' he added.

Based on URA statistics, Ho Bee had sold about 60 per cent of the 348-unit Dakota Residences as at the end of last month.

Earlier this week, the Housing & Development Board (HDB) said it will launch the tender for a 99-year leasehold site for a condominium development at Chestnut Avenue on the reserve list after receiving a successful application.

Following up on that announcement, HDB said yesterday that the tender for the site will close at noon on Aug 19. That plot was also from the government's reserve list, and its launch follows a successful application by an unnamed party undertaking to bid at least $62 million at the tender, which works out to $120.83 psf ppr.

Mr Tan expects developers to trigger launches of more residential sites from the government reserve list, as it offers a good source of land for developing entry-level condos catering to HDB upgraders.

'Right now, a lot of developers are focusing on the mass market; they've seen a recovery in the low end and it seems a safer bet. They may already have enough stock of high-end sites,' he added.

Locations of residential sites in the second-half 2009 reserve list include Tampines, Jalan Jurong Kechil, Upper Thomson Road, Bishan St 14 and Serangoon Avenue 3.

Source: The Business Times - 23 Jul 2009

Preview of two condo projects planned for next week

One is next to Ang Mo Kio Hub and the other beside Tanah Merah MRT Station

TWO 99-year-leasehold condominium projects next to MRT stations are slated to be previewed next week - Far East Organization's Centro Residences next to Ang Mo Kio Hub and TID's Optima@Tanah Merah.

Prices at the 34-storey Centro Residences are tipped to start from $1,150 per square foot (psf). Far East bought the site at a state tender in September 2007 for $601 psf per plot ratio. That was a record price for suburban condo land.

Analysts reckon Far East's breakeven cost for the project could be close to $1,000 psf.

They suggest that Far East is releasing the project, which is along Ang Mo Kio Avenue 8, to ride on the current home buying momentum but it may release only about 100 or so units initially and sell the rest as construction proceeds to extract higher prices progressively. The condo has a total of 329 units.

Far East is starting its preview on Wednesday evening and will release two and three-bedroom units.

A typical two-bedder of about 800 square feet could cost about $900,000, while a typical three-bedroom apartment of 950 sq ft may be priced on average at about $1.15 million.

As for Optima, beside the Tanah Merah MRT Station, market watchers suggest it could be priced at about $750-$800 psf on average.

They based this estimate on current average pricing for Waterfront Key in Bedok ($735 psf) and Dakota Residences ($900 psf) and adjusted for locational differences.

The 297-unit Optima will be a 14-storey project comprising one-bedroom studio apartments as well as two, three and four-bedroom apartments plus 18 penthouses.

Developer TID is a joint venture between Mitsui Fudosan of Japan and Hong Leong Group Singapore.

Another Hong Leong unit, Tripartite Developers, previewed The Gale along Upper Changi Road two weeks ago. The 329-unit freehold project, priced at $650 to $725 psf, is over 80 per cent sold.

With the release of Centro and Optima, the pipeline of suburban condos on 99-year-leasehold sites bought at state tenders will shrink further.

This will increase impetus on developers to trigger the release of sites on the government's reserve list, analysts say.

Already, the government has announced the release of two sites from this list this week - at Chestnut Avenue and Dakota Crescent.

Source: The Business Times – 24 Jul 2009

Govt to put up Chestnut Ave site for tender

Consultants forecast top bid of $136 to $200 psf ppr for the residential site

By KALPANA RASHIWALA

(SINGAPORE) Strong homes sales in the mass-market segment have led to a 99-year leasehold site at Chestnut Avenue in the state's reserve list being triggered for launch.

This will be the first time in a year that the government will be launching a residential site for tender.

The successful applicant has undertaken to bid at least $62 million at the tender, which works out to $120.83 per square foot of potential gross floor area. Under the reserve list system, the state will launch a site for tender only if there is an application by a developer undertaking to bid at a minimum price acceptable to the government.

Property consultants indicated a wide price range for the successful bid for the site at the tender, which will be launched soon - $136 to $200 psf per plot ratio (psf ppr).

Assuming the site fetches $200 psf ppr, the breakeven cost for a new condo could be about $480 psf and the developer could be looking to sell at an average price of $600-620 psf, says Knight Frank chairman Tan Tiong Cheng.

CB Richard Ellis executive director Li Hiaw Ho, who reckons the successful bid could come in at $150-160 psf ppr, said that the developer would be planning to sell the new project at above $600 psf. 'The site is located at the edge of the Bukit Panjang HDB estate and Chestnut Avenue landed estate.

'Based on the current strong take-up of new projects, coupled with a lack of mass-market projects in this location, it is likely that developers will be interested to bid for this site.'

However, DTZ's head of South-east Asia research Chua Chor Hoon, predicts the site will fetch only $120-136 psf ppr. 'The site is not very accessible by public transport. So I don't think it will attract many bidders,' she added.

Knight Frank's Mr Tan said that a new condo on the project will offer views of the surrounding park and Upper Peirce Reservoir. 'However, it will also be fairly noisy, as it will be located next to the BKE.'

The 244,345 sq ft plot can be developed into a condo with about 450 units, CBRE estimates. The site has a plot ratio (ratio of maximum potential gross floor area to land area) of 2.1.

After the strong wave of launches over the past five months, the pipeline of 99-year leasehold suburban condos catering to upgrader demand has shrunk.

Projects that have yet to be launched include those that will be developed by TID in Tanah Merah, Far East Organization on a plum Ang Mo Kio site, NTUC Choice Homes on its plot near Braddell MRT Station and MCL's project in Yishun. Others include a project on the former Minton Rise site in Hougang and condos in Bedok Reservoir and Pasir Ris.

'Developers catering to the upgrader market are hungry for land, and the best supplier of land in this segment will be the government,' notes Mr Tan.

Separately, City Developments yesterday said that it has sold 55 units at its freehold Volari condo in the Balmoral area at an average price of 'over $2,000 psf'.

About 20 per cent of buyers took up the interest absorption scheme. Foreigners comprise 45 per cent of buyers. Prices have been adjusted upwards by 2 per cent.

Source: The Business Times - 21 July 2009

Amberville sold en bloc for $183m

AMBERVILLE was snapped up yesterday for the bumper price of $183 million and in the process became the first former HUDC estate to be sold collectively.

Its 168 owners have plenty to celebrate. The price exceeded their reserve of $171 million and each will get an average $1.089 million for their unit, at least 85 per cent above market value, said sale manager Knight Frank.

‘For a 99-year site, it’s a record price,’ said Ms Tang Wei Leng, director of property consultancy DTZ Debenham Tie Leung.

Far East Organization outbid rivals City Developments, Wing Tai and MCL Land for the Katong site in a tender process that closed on Tuesday.

Its price translates into $396 per square foot per plot ratio (psf ppr), after accounting for a development charge of about $35.2 million and a differential premium of $23.8 million to top up the lease from 71 years to 99 years.

Knight Frank said the price indicates ‘developers’ confidence in the property market’. The price also surpassed recent prices of nearby sites. Centrepoint paid $280 psf ppr in 2001 for a nearby 99-year leasehold site, which is now home to the 612-unit Cote d’Azur next to Parkway Parade.

Recent freehold collective sales in the Katong area were also made at lower levels: Maryland Point site went for $351 psf ppr and the Sea View condominium site for about $370 psf ppr.

Knight Frank said the Amberville site is a ‘rare and substantial’ one where Far East can capitalise on the unblocked views of the sea and East Coast Park.

Amberville is likely to break even above $600 psf to $650 psf. Knight Frank said it can accommodate a condominium of up to 36 storeys, with 474 units of 1,200 sq ft on average each.

The firm also brokered the sale of Eng Cheong Tower, the first 99-year leasehold property to be sold en bloc, and the deal that sparked interest in collective sales of such leasehold properties.

Other ex-HUDC estates, such as Pine Grove and Farrer Court, also hope to land a collective sale.

Next week, the tender closes for the 342-unit Minton Rise - the first ex-HUDC estate to get in-principle approval for a lease top-up to 99 years.

Source : Straits Times - 19 Jan 2006

Claymore Road site expected to sell for $2,815 psf ppr

It can be redeveloped into a luxury boutique apartment project with about 20 units.

A NEW record price for residential land is being sought, of $2,815 psf of potential gross floor area. This is the price wanted for 11 Claymore Road, a 17,974 sq ft freehold site with an old bungalow on it but which can be redeveloped into a luxury boutique apartment project with about 20 units averaging 2,400 sq ft.

The site has a 2.8 plot ratio (ratio of maximum potential gross floor area to land area).

'We expect to receive offers in the region of $115 million, reflecting a land rate in the region of $2,815 psf per plot ratio (psf ppr), inclusive of an estimated development charge of about $26.67 million,' reckons Credo Real Estate managing director Karamjit Singh, whose firm is marketing the property.

The $2,815 psf ppr unit land price expected for 11 Claymore Road is 20 per cent higher than the $2,338 psf ppr fetched a few weeks ago for The Ardmore, which is just behind the site.

'We wouldn't be surprised if a tycoon or a group of high net worth individuals came along to purchase the land to build something totally unique and exclusive for their own occupation. On this basis, they may even choose to build only 10 'sky-villas' of close to 5,000 sq ft each,' Mr Singh reckons. The site is owned by a local investment company controlled by a family named Kok.

Based on the $2,815 psf ppr unit land price expected, the break-even cost for a new apartment development on the site would be around $3,700 psf. The first batch of units at The Marq On Paterson Hill was recently sold for an average price of $4,100 psf.

Source: The Business Times – 10^th Jul 2007

Investment firm wants to sell Orchard bungalow site for $115m

By Joyce Teo

A BUNGALOW site owned by a family-owned investment firm near Orchard Road has gone on sale for an astonishing $115 million. At that price for the property of nearly 18,000 sq ft, the buyer's break-even cost would be about $3,700 per sq ft (psf) with the selling price possibly at around $4,500 psf. Those levels are currently only attained by a handful of luxury projects in Singapore. The bungalow site behind Orchard Towers now houses the Pat's Schoolhouse childcare centre, and sits along Claymore Road between two similar bungalow sites. These sites are the last remaining ones with the potential for redevelopment along that stretch. The bungalow site up for sale is close to Hong Leong Holdings' Tate Residences condominium, which is currently being built. The plot is small, compared with more conventional condominium sites. Still, it can accommodate 20 luxury flats of about 2,400 sq ft each, according to sales agent Credo Real Estate. In its favour, however, are the psf prices that have been achieved for nearby sites. The bungalow site is near The Ardmore, which developer SC Global bought en bloc for a record price of $2,338 psf of potential gross floor area in mid-June. The Ardmore sits on 42,565 sq ft of land, allowing SC Global to develop another luxury project. A record price was also set last month when a unit at The Marq on Paterson Hill sold for $5,100 psf. Such prices have led Credo to expect offers of around $115 million for the Claymore Road site. This reflects a land rate of about $2,815 psf of potential gross floor area and includes an estimated $26.7 million in development charge, Credo managing director Karamjit Singh said. He added that wealthy individuals may team up to buy the land for their own use. 'They may even choose to build only 10 sky-villas of close to 5,000 sq ft each. 'A redevelopment offering at Claymore Road is very rare,' he said. The tender closes on Aug 2. In a separate real estate move, Colliers International is selling the 18-storey Keck Seng Tower for $250 million. This works out to $2,144 psf, based on an existing net lettable area of 116,586 sq ft. The Cecil Street building - built in 1984 - has a 99-year lease on a site that allows a 30-storey block. A buyer could redevelop it to the maximum gross floor area allowed of 198,000 sq ft. Its existing gross floor area is 173,535 sq ft, and it has a 98 per cent occupancy rate. Collier International managing director Dennis Yeo said the last transacted rent in Keck Seng Tower was around $6 psf, with the asking rent now at $6.50 psf. The tender closes on Aug 8.

    Source: The Straits Times – 10^th July 2007

 

Historical Trend of Transactions taken place in CCR

 

Source: URA – Realis, Property Focus Point

This year's first en bloc sale hits the market

Owners of 72-unit freehold property on Spottiswoode Park Road are hoping for $120m

By UMA SHANKARI

(SINGAPORE) Dragon Mansion on Spottiswoode Park Road has been put up for collective sale - the first development to be launched for en bloc sale this year.

The owners are hoping for $120 million - or $1,020 per square foot per plot ratio (psf ppr) - for the freehold project, including a development charge of about $400,000.

The en bloc market here has shown little sign of life since the onslaught of the global economic crisis. A total of 116 collective sales were completed at the height of the property boom in 2007, but the figure fell sharply to just eight last year. And no sites have been bought en bloc since the start of the year.

Analysts said that the owners of the 72-unit Dragon Mansion could have chosen to market their property now to ride on the current upswing in sentiment in the residential market.

'As the outlook for the residential property market improves, land values will rise and sellers might find it viable to sell collectively to get a premium for their properties,' said Karamjit Singh, managing director of Credo Real Estate.

If the sale of Dragon Mansion goes through, it will be the first property to be sold en bloc in 2009. However, market watchers said that the asking price is steep.

For comparison, said one market watcher, one can look at the June 2007 collective sale of nearby Oakswood Heights on Spottiswoode Park Road at the peak of the property boom. Then, UOL paid $132 million for the 63,700-sq-ft freehold site, which worked out to $740 per psf ppr.

Dragon Mansion has a land area of 41,874 sq ft and is designated for residential use with a plot ratio of 2.8. The new development could potentially yield a maximum gross floor area of 117,000 sq ft, which translates to an estimated 120 units of 1,000 sq ft each, said CKS Property Consultants, which is marketing the property.

Consent has been obtained from more than 80 per cent of the owners to proceed with the sale. The asking price is based on the 'limited availability of such freehold residential land near the central business district'.

More projects could be launched for collective sale in the rest of the year, analysts said.

Credo's Mr Singh said that owners of some projects are now checking to see if it is the right time to launch a collective sale: 'They don't want to start too early. They are hoping to time it right.'

En bloc transactions may return in a significant fashion when the unsold supply pipeline falls, said Credit Suisse in a June 19 note. This comes about as developers deplete their existing land banks and need to replenish them.

'On a current run rate of 1,200 developer units sold per month, land bank replenishment may happen in the next three months,' said Credit Suisse property analyst Tricia Song.

In 2006 and 2007, demolitions created an artificial vacuum in supply due to 'en bloc fever', resulting in a steep hike in rents and prices amid a population boom. In addition, owners of older properties with higher redevelopment density ratios get more on a per unit space basis, creating a wealth effect in the property market.

However, the caveat emptor this time could be oversupply of prime housing from previous years. Nevertheless, the trend bodes well for land prices and real estate owners, Ms Song added.

Source: Business Times - 15 Jul 2009

Another Enggor St plot up for tender

ANOTHER residential skyscraper of up to 60 storeys high could be built in Tanjong Pagar after a site was put up for sale yesterday, which is set to fetch more than $200 million.

The 99-year leasehold, 0.28ha site on Enggor Street went on sale just two weeks after an adjoining plot also hit the market.

The plot has a maximum gross floor area of 23,420 sq m, which property consultants estimate could hold 235 to 250 apartments. Commercial space can be located on the first storey.

The site is one of 10 plots transferred from the reserve list to the confirmed list for the July to December period.

That means the site was put up for tender on a specific date, whereas on the reserve list a tender is triggered only when an acceptable expression of interest is lodged.

The Urban Redevelopment Authority, which launched the tender yesterday, said the site caters to demand for inner-city living. Upcoming projects nearby include Icon by Far East Organization and the Housing Board’s 50-storeyPinnacle@Duxton.

The tender for the latest site closes at noon on Nov 15.

Mr Li Hiaw Ho, an executive director of CB Richard Ellis Research, expects the site to attract bids above $800 per sq ft per plot ratio (psf ppr), or $200 million.

The regional director and head of investments at Jones Lang LaSalle, Mr Lui Seng Fatt, was more bullish, estimating at least $1,200 psf ppr, or above $300 million.

The site, said Mr Lui, could house ‘branded’ residences managed by reputable global managers. Existing branded homes in Singapore include upcoming St Regis Residences and Four Seasons Park.

Earlier this month, an adjoining 0.3ha residential site in Enggor Street was put up for tender.

 Source: The Straits Times – 19^th Sept 07

Enggor St tender attracts only two bids

It is the first public tender to close since the deferred payment scheme was scrapped

A WEAK response to the tender for a residential site in Enggor Street suggests market sentiment might have turned cautious, analysts say.

The 99-year leasehold site at Tanjong Pagar had attracted only two bids by the time it closed yesterday, said the Urban Redevelopment Authority.

The top bid for the site was put in by Far East Organization’s Bishan Properties at $233.8 million, or $852 per sq ft per plot ratio (psf ppr).

The only other bid was almost half that – $151 million, or $550 psf ppr – and was tendered by First Capital Holdings.

This is the first public tender to close since the Government announced last week that it was scrapping the deferred payment scheme with immediate effect.

The scheme allowed buyers to fork out a down payment of only 10 or 20 per cent when purchasing a new home; the rest came due upon completion, which could sometimes be as long as three years later.

Analysts that The Straits Times spoke to said the Enggor Street bids reflected a more cautious attitude among developers.

Singapore’s spectacular property bull-run has, in recent times, seen up to 10 or more bids for public tenders.

‘The mood has turned cautious and the bids reflect this,’ said Chesterton International’s head of research and consultancy, Mr Colin Tan.

CB Richard Ellis (CBRE) Research executive director Li Hiaw Ho said this change could be due to the DPS announcement.

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, agreed.

He pointed to uncertainty in the market, and added that developers are monitoring the behaviour of homebuyers before committing to buying more government land.

However, another reason for the weak response could be the location.

The site, with a gross floor area of 274,522 sq ft, is behind Far East’s Icon condo, and is sandwiched between a commercial site and another residential site whose tender closes on Nov 15.

But as it is only a five-minute walk from the Tanjong Pagar MRT station – at the heart of the Central Business District – the site remains attractive, say analysts.

Estimates for the project, launched for sale on Sept 4, indicate that it could provide 330 to 360 small units and a handful of large four-bedroom units, said Mr Mak.

CBRE’s Mr Li said the top bid was ‘reasonable’ and should translate into a break-even price of $1,300 psf for the future project.

Its units are likely to be priced at $1,500 to $2,100 psf when launched for sale – similar to the prices fetched at Icon recently.

Source: The Straits Times – 2^nd Nov 07

Sing Holdings inks deal to buy Hillcourt Apartments for $361m

 

Sing Holdings has signed a conditional agreement to buy the freehold Hillcourt Apartments on Cairnhill Road for $361 million or about $1,542 per square foot (psf) of potential gross floor area (GFA).

 

The price is about 75 per cent higher than the $880 psf per plot ratio (ppr) that SC Global paid in H1 2006 for Hilltops Apartments at Cairnhill Circle and 16 adjoining terrace houses, reflecting the surge in prime land values in Singapore over the past year.

 

The unit land price for Hillcourt Apartments also beats the $1,107 psf ppr that CapitaLand paid for the next-door Silver Tower in September last year. Both the Silver Tower and Hillcourt en bloc sales were handled by Savills Singapore.

 

Sing Holdings will not have to pay a development charge (DC) for the Hillcourt site up to the existing development’s GFA of 234,095 square feet, which works out to 3.0778 times the land area of 76,059 sq ft. However, if Sing Holdings decides to tap an additional 10 per cent GFA allowed for balcony space, it will have to pay a DC.

 

Nonetheless, this will lower Sing Holdings’ unit land price to $1,444 psf ppr, according to Sing Holdings managing director Lee Sze Hao.

 

Mr Lee also said the group will once again team up with US-based fund Forum for its acquisition of Hillcourt Apartments, although the respective stakes of the two parties have yet to be finalised.

 

The companies worked together for the earlier purchase of Finland Gardens in the East Coast and Bellerive at Keng Chin Road.

 

Sing Holdings’ break even cost for a new condo project on the Hillcourt site could be about $2,000 psf, factoring in rising construction costs, BT understands.

 

Mr Lee said the company is looking to develop a new 20-storey condo with about 180 units ranging from 1,500 to 1,800 sq ft. The project could be launched around the final quarter of next year.

 

The tender for Hillcourt Apartments closed on Wednesday, attracting several bids, Savills said yesterday. The highest was from Sing Holdings.

 

Owners of Hillcourt’s existing 100 apartments and two penthouses will receive $3.46 million per apartment and $7.26 million per penthouse.

 

These sums are about 60 per cent higher than if the units had been sold individually.

 

Sing Holdings said in its release to the Singapore Exchange that its purchase of Hillcourt Apartments is subject to a permissible GFA of 234,095 sq ft, and approval from the Strata Titles Board.

 

Source: The Business Times - 23 March 2007

Recession over, strong V-shaped recovery seen

By LI DAN WEI

THERE are tentative signs that Singapore's worst ever recession is over and a strong V-shaped recovery is to follow over the rest of this year, according to HSBC's Asian Economics report for the third quarter.

'Unemployment is expected to peak at the end of this year at 4.2 per cent and then come down to 3.4 per cent at the end of 2010,' said Robert Prior-Wandesforde, HSBC senior Asian economist, at a media briefing for Asian Outlook 2009.

'For Singapore, we're looking at negative 6 per cent GDP growth this year, towards the better end of the government's forecast range. For 2010, we're looking at positive 5.3 per cent growth.'

For Asia ex-Japan, GDP growth is expected to 4.2 per cent this year, and 6.9 per cent in 2010.

'We are optimistic about the recovery and we see increased evidence that recovery has begun,' Mr Prior-Wandesforde said.

In the Asian Economics report for Q3, three overlapping stages of the recovery process which underpin HSBC's belief in a sustained pick-up in growth are discussed - initial post-crisis relief bounce, effects of various policy stimulus packages across Asia, and the self-sustaining phase of growth.

'Since the collapse of Lehman Brothers, there was a feeling that we were heading into a second great depression, the end of the financial world as we know it,' said Mr Prior-Wandesforde.

'But thanks to the very aggressive policy action that is being taken by governments and central banks around the world, particularly the US, it seems to us that scenario is pretty much gone.'

Asia ex-Japan will see quarter-on-quarter annualised GDP growth of more than 8 per cent in the second quarter, the report says. 'Omens are looking even better for the third quarter, with double-digit quarter-on-quarter annualised GDP growth.'

The HSBC coincident indicator includes Chinese and South Korean composite lead indicators, the Commodity Research Bureau index, German IFO business expectations and the S&P 500 equity market index.

This means that 'we can rule out an L-shaped kind of recovery, and also an U-shaped one', explained Mr Prior-Wandesforde.

The second phase relates to various policy stimulus packages put in place across Asia - the biggest and most synchronised easing of fiscal policy and monetary policy ever.

It is estimated that these will add 'at least one per cent of GDP growth in the region this year and another 2 per cent in 2010'.

'This reflects the length of time it often takes in Asia to get these infrastructural projects in place, and also the fact that monetary policy works with a significant lag in Asia - with 12 to 24 months' lag being typical,' noted Mr Prior-Wandesforde.

With all these policy effects stimulating domestic demands within Asia, it is expected to 'at least create a regional trade recovery before world recovery'.

Tracking the level of Asia ex-Japan private consumption and investment as a proportion of the equivalent series for the US, the latter was actually 20 per cent higher than its American counterpart last year.

Asian private consumption came to just 40 per cent of the US level in 2008 but it has grown more in absolute terms in each of the last two years.

'Our Asia ex-Japan and China export lead indicator points to a pick-up in year-on-year real export growth Q309,' Mr Prior-Wandesforde said.

'It's typically the most open economies, like Singapore and Malaysia that crashed the most, which we think will see the greatest trade recovery kicking in.'

Top-end home sales gently pick up pace

More transactions streaming in at higher price bands as bottom-up recovery starts to take root

By KALPANA RASHIWALA

(SINGAPORE) High-end residential transactions continue to stream in steadily, in both the primary and secondary markets. Two units were sold recently at Nassim Park Residences by its developer at above $3,000 per square foot (psf), one of them at $3,813 psf.

In the sub-sale market, a caveat has surfaced for a 37th floor unit at The Orchard Residences at about $3,550 psf last month.

Caveats have also been lodged for transactions of three units at The Ardmore Park at $2,375-$2,513 psf, and for a sub-sale deal at Marina Bay Residences at $2,200 psf in June.

Also in the sub-sale market, a three-bedroom unit on the 13th floor of Tate Residences at Claymore Road has been sold for $2,400 psf or about $5.25 million.

The seller and buyer were both Indonesians, says Jerry Tan, managing director of JTResi, which brokered the sale. The option was exercised about 10 days back. Two months ago, JTResi had also handled the sale of a 17th-floor unit in the development, facing the same way, at a lower price of $2,150 psf.

The 36-storey freehold project is slated for completion in a few months. 'Prices at Tate Residences have trended up from the lows of $1,850-1,950 psf seen in March-April. Those were some of the scariest months in the property market,' Mr Tan adds.

In the primary market, at the freehold Nassim Park Residences near Botanic Gardens, an option was exercised last week for a second-storey unit at $3,813 psf or $13.25 million. The unit is in the premium block, on an elevated part of the project, with a pool view and with the back facing Nassim Hill.

The 3,477 sq ft unit has four bedrooms and a study. The buyer is Indonesian, said CB Richard Ellis (CBRE) executive director Joseph Tan, whose firm is the joint-marketing agent for Nassim Park Residences.

The project's developer is also said to have issued last weekend an option for the sale of a fourth-level unit at $3,081 psf. The five-storey condo is being developed by UOL Group, Kheng Leong and Orix Corporation.

'Of late, we have been seeing an increase in transactions in the market above $2,000 psf. However, what this covers may be the top 5 per cent of buyers, who remain selective and are project specific. We're seeing an equal mix of foreigners and Singaporeans buying. Current prices - which are about 20-25 per cent off the 2007 peak levels - are pretty attractive,' CBRE's Mr Tan added.

CBRE also brokered the sale of a fifth floor unit at Ho Bee development The Orange Grove last week for $2,200 psf, or $4.7 million, to a Singaporean buyer. According to government data, five units in the project were sold by Ho Bee in May at between $2,255 psf and $2,380 psf. These levels are roughly 20 per cent lower than the $2,800 psf average price for the project early last year.

Orchard Turn Developments has sold 10 units at The Orchard Residences since May at $2,700 psf to $3,300 psf. The buyers comprise a mix of Singaporeans, permanent residents (PRs) and foreigners.

Despite a return of transactions in the higher-price segments, DTZ executive director Margaret Thean notes that 'buyers are more cautious with their offers'.

JTResi's Mr Tan observes that the pick-up in transactions of higher-priced units has led some developers, who had earlier planned to launch or relaunch projects, to hold back. 'They basically don't want to under-price their projects,' he added.

Ho Bee executive director Ong Chong Hua said: 'Sales are beginning to filter to the higher end, but not in a big way yet - because the overall quantums involved are usually quite large. Banks are also more cautious about granting home loans for this segment, whereas for the mass and mid-market projects, banks have relaxed on lending and valuations are no longer an issue.'

Hong Leong Holdings said yesterday that 215 units have been sold at The Gale, a freehold condo in the Upper Changi area, since last Friday. The average price is said to be about $650-660 psf.

At Alexandra Road, Wing Tai sold over 70 units at the 99-year leasehold Ascentia Sky during last weekend's preview. The average price is $1,250 psf.

Over the weekend, MCL Land sold 55 units at The Peak @ Balmeg, a freehold condo at Pasir Panjang, bringing total sales to 100 units. The average price is $1,000 psf.

Interest absorption schemes are available for all three projects at price premiums.

Remarks Mr Ong: 'What we're seeing is a bottom-up recovery, which is more sustainable - unlike the last recovery from 2005 to 2007, which was top down.'

Source: The Business Times – 14^th Jul 2009

Condo units snapped up

Units in mass- and higher-market projects snapped up

By Jessica Cheam

STRONG sales in the property market continued over the weekend as mass- and upper-mid- market launches drew crowds of buyers.

 

Within three days of its preview launch last Friday, the 68-unit Residences@Killiney project sold 39 of 60 released units - with sales ongoing, a spokesman for developer Hoi Hup Realty said yesterday.

 

Preview prices at the Killiney Road condominium ranged from $1,700 per sq ft (psf) to $2,000 psf.

 

Opposite the condo at Devonshire Road, Allgreen Properties' One Devonshire has sold more than 95 per cent of its 36-storey, 152-unit freehold condo since its launch about two weeks ago.

 

In the Thomson Road area, Far East Organization sold 84 per cent - or 74 homes - of an initial batch of 88 units at a private preview of its Vista Residences over the weekend.

 

The 280-unit freehold project offers a range of accommodation from one bedroom to penthouse units starting from $960 psf.

 

Far East will release another 45 units tomorrow - its official launch date - said Mr Chia Boon Kuah, chief operating officer of the firm's property arm.

 

HSR Property Group executive director Eric Cheng noted that the buying activity - which started in mass-market new condo launches - seems to have moved into the higher market segments.

 

'This is undoubtedly due to the stock market rally, more positive sentiment, and is enabled by the interest absorption scheme,' he said.

 

The scheme allows buyers to pay a deposit and postpone monthly home loan payments until the project is completed.

 

Source: The Straits Times – 30^th June 2009

Far East buys Bukit Timah en bloc sale site for $55m

by Kalpana Rashiwala

 

 

FAR East Organization is expanding its presence in the Bukit Timah-Keng Chin roads area. The property giant has paid $55 million for a freehold site owned by wine merchant Hock Tong Bee, descendants of pioneer local architect Seah Eck Jim and other parties.

 

The deal was brokered by DTZ Debenham Tie Leung late last month.

 

The $55 million price works out to about $820 psf of potential gross floor area including an estimated $22 million development charge (DC).

 

In September last year Far East paid $145.5 million for the site next door comprising three adjoining properties - Century Ville, Le Marque and Villa Margaux. This reflected $665 psf per plot ratio inclusive of DC.

 

This means Far East's average unit land price for the two sets of acquisitions is $708 psf ppr.

 

In a separate deal brokered by Credo Real Estate and announced yesterday, Far East has just been awarded 25 & 27 Amber Road for $28.1 million. This works out to $478 psf ppr for the 21,242 sq ft freehold site. However, if Far East buys a 1,453 sq ft of adjoining state land, its unit land price will be lowered to $459 psf ppr.

 

The Amber Rd plot, which can be developed into a boutique apartment project of about 40 units averaging 1,500 sq ft, is next to the leasehold Amberville site that Far East bought last year.

 

The property giant's acquisition late last month at Bukit Timah/Keng Chin roads involves six land parcels with a total area of 44,976 sq ft. The six comprise Nos 347 and 351 Bukit Timah Rd belonging to Hock Tong Bee, No 349 Bukit Timah Rd owned by Kwok Weng Fai (Mr Seah's grandson), No 353 Bukit Timah Rd (owned by his sister Dawn Kwok and her husband Wee Kok Wah of Stamford Tyres fame), a road reserve (belonging to the estate of Lim Buck Sim (Mr Seah's widow) and No 2 Keng Chin Rd (owned by a neighbour).

 

The acquisition, with Far East's earlier purchase of Century Ville, Le Marque and Villa Margaux next door, will give the group a combined freehold site of 161,837 sq ft that can be developed into a condo with about 220 units averaging 1,500 sq ft. The site is zoned for residential use with a 2.1 plot ratio - the ratio of potential maximum gross floor area to land area - and 24-storey maximum height, under Master Plan 2003.

 

Far East's Bukit Timah/Keng Chin Rd acquisition in December cements its position as 2006's No 1 buyer of collective sale sites here, with a total of $893 million of such deals.

 

Source: The Business Times - 10 January 07