Singapore Property Weekly Issue 43

8/2/2019 Singapore Property Weekly Issue 43

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SINGAPORE PROPERTY WEEKLY Issue 43

Singapore Property This Week

Page | 2Back to Contents

Residential Decline in property investment sales

There has been a decline in property

investment sales in Q1 2012 to $3.4 billion as

of March 12, though the final figure could

potentially reach $3.8 billion. The figure thusfar is a 57% fall from Q4 2011’s $7.7 billion

and a 60% fall from Q1 2011's $8.4 billion.

This decline might be explained by the

uncertain global economic situation and the

new government policies such as the ABSD

and new conditions on the industrialGovernment Land Sales. While the market is

not expected to pick up in the next quarter

with mainly GLS transactions, H2 2012 may

pick up and see more private transactions ifthe global economy stabilises. The overall

property investment sales may reach $20 - 23

billion of investment sales.

The current figure is made up by $2.3 billion

from the residential sector. In the residential

sector, private investment transactionsdecreased by 71% from the last quarter to

$429 million, while those from the public

sector fell by 0.4% to $1.84 billion. Despite

the initial knee-jerk reaction to the ABSD, the

picking-up in the mass market meant the GLS

are still seeing decent activity. For the luxurymarket and collective land sales, however,

there was a sharp decline as a result of the

ABSD.





In the collective sales market especially, the

total transactions amounted to a mere $145

million, compared to $745 million for Q1 2011

and $789 million in Q4 2011. The total sales

may reach $1.5 - $2 billion compared to $3.2

billion last year though smaller sites or sites

that have a mixed-use component may

continue to see buyers.

For the commercial sector, the total

investment sales came to a total of $822million so far in Q1, 68% below the last

quarter, probably a result of lower rental rates

although the situation is expected to improve

in H2 as capital values and the number of

transactions increase. The industrial sector

similarly reflects dismal figures, with a total of$260 million worth of investment sales, 70%

down from Q4 2011, though this may be

attributed to the lack of GLS industrial sites in

this period.

Four residential plots released, top plot in

Tampines

Four residential plots that can yield up to

2,415 units have been released under theGLS, out of which three are in the confirmed

list. Of these, there are two EC sites that can

generate a total of 1,300 units. One is located

at Tampines Central 7 next to Tampines

Trilliant and the future Downtown line

Tampines MRT station, while another islocated at Woodlands Ave 5/Drive 16, next to

the LaCasa EC development. The third on the

confirmed list is a private condo plot located at

Tampines Avenue 10/1, next to the Arc at

Tampines development and opposite the

Waterview condo project. The reserve list plotis also a private condo plot, which is located

next to the confirmed list private condo plot.

Consultants voted the EC plot in Tampines to

be the most popular,





with expectations for the top bid to be $280-

420 psf ppr from 10-13 bids. Meanwhile, the

Woodlands EC site is expected to draw three

to five bids, with a top bid of $250-330 psf ppr

and the Tampines confirmed list site is

expected to draw a top bid of $350-465 psf

ppr.

Commercial

JTC’s net allocation of ready-built facilities

fell in Q4 2011

JTC Corp’s net allocation of ready-built

facilities (RBF) fell to minus 11,400 in Q4

2011, bringing the total in 2011 to minus

20,000 sq m, compared to 5,500 sq m in

2011. This is a result of a 37% decrease ingross allocation to 59,600 sq m from 94,100

sq m in 2010 and a 9% decrease in RBF

supply to 3,175,100 sq m. Termination has

also decreased by 10% from 79,600 sq m

from 88,600 sq m while occupancy levels also

registered a fall from 97.4% in 2010 to 96.5%

in 2011.

In the case of prepared industrial land (PIL),however, the net allocation in 2011 was a

record 202.7 ha compared, four times the

47.2 ha in 2010.

20% increase in hotel room supply by

2016

By 2013, there will be an increase of 4,028

hotel rooms with the opening of 19 new hotels

and another 5,200 rooms by 2016, bringing

the total increase between now and 2016 to

9,228 rooms. In 2011, the room supply has

increased by 1,944 or 4.9% with the numberof gazetted hotels increasing by 10 to 149.

According to the Singapore Tourism Board,

the total number of rooms here reached

49,719 in 2011.





As demand for hotel rooms increases, hotels

will be able to increase the room rates, with

the average room rates (ARR) and occupancy

levels increasing by 5-10% and to 83-86%

respectively in 2012. The revenue per

available room is also expected to increase 5-

8% in 2012 from $212 in 2011.

Leasehold Shenton House up for collective

sale

Shenton House located along Shenton Way,

is asking for $530 million or $1,720 psf ppr

inclusive of developmental charges of $73

million for the use of the 11.76 plot ratio and

$132 million to extend the lease from 56 to 99

years. The plot ratio meant that the 36,350 sq

ft land area can be redeveloped up to a

maximum GFA of about 427,476 sq ft. Zoned

for commercial use, it can be redeveloped into

a building with a maximum of 35 storeys. This

site could potentially be redeveloped into a

mixed use development. Given its location

and its regular layout, which allows for

building efficiency, and its redevelopment

potential, the site is likely to be popular among

developers. The tender will close on April 19.

Also on sale in the collective sale market is

the 66 strata-titled office units at Burlington

Square. These units located from the fifth to

the 12th floor of the building are asking forabout $101 million, or $1,500 psf, and have

about 83 years of lease remaining. The total

size of the units comes up to 67,738 sq ft, with

unit sizes ranging from 549 to 5,221 sq ft.

Since the average gross rental yield is an

attractive 4-6%, and such units are ratherlimited, the units are expected to be popular,

and all the more so due to the low interest

rates. Tender closes on April 18.





New Home Sales Surge in February – More Government Measures Ahead?

By Mr. Propwise

Sales of residential property by developers

surged in February to exceed even those

during the 2007 and 2009 booms. The

interesting (and perhaps worrying) aspect is

that the sales were largely driven by sales of

Executive Condominiums (ECs) and mass

market condos. In my opinion, this increases

the risk of further Government action to clamp

down on the still buoyant investment demand.

Developers sold a total of 3,138 homes

(including ECs) in February, an increase of

51% on a month-on-month basis and 156%on a year-on-year basis. Total private

residential sales (excluding ECs) was 2,413

units, an increase of 29% month-on-month

SINGAPORE PROPERTY WEEKLY I 43





and 471% on a year-on-year basis! In fact,

three of the top ten selling projects were ECs:

The Rainforest, Trilliant and Twin Waterfalls.

Some might argue that this high growth is due

to the Chinese New Year (CNY) effect, as

CNY fell in February in 2011 versus January

this year. But even if we combine the first two

months of the year in 2012 and compare that

with 2011, new home sales (excluding ECs)

were still up 85%. Furthermore, most of thesales (81%) came from the Outside Central

Region (OCR), which suggest that mass

market sales are driving the market.

Increased Risk of Further Government

Measures

Despite the implementation of the Additional

Buyer Stamp Duty (ABSD) in December 2011,

which I thought was harsh, new home sales

have powered ahead. The worrying aspect is

that the demand has been mainly driven by

the mass market segment, while the luxury

segment has remained subdued as

international buyers have stayed away dueboth to the ABSD and concerns about the

global economic environment.

The strength and bullishness of mass market

demand could increase concern by the

Government that middle-income investors(and especially first and/or second time

Singaporean home buyers) are still rushing

like lemmings into the property market,

despite the uncertainty in the markets and the

Government’s own efforts to clamp down on

excessive investment demand. This will thenincrease the risk that additional measures will

be implemented to further cool the property

market.

SINGAPORE PROPERTY WEEKLY I 43





On a more philosophical note, I believe that

the root cause of this buoyant investment

demand is the low interest rate environment.

When real interest rates (nominal interestrates minus inflation) are negative, savers are

being penalized whereas borrowers get the

benefit of cheap funds (or are even paid to

borrow!).

To put this in more concrete terms, banks are

paying close to 0% on deposits and so thereal purchasing power of your savings is

being constantly eroded by inflation. In this

situation, anything that has positive yield

looks attractive as an investment. Property

looks doubly attractive because it is a real

asset and is believed to be a good hedge

against inflation.

But before you rush out to buy a property

keep in mind that the low interest rate

environment will not last forever and what

seems like a good idea in the short term

might turn out to be a bad idea in the longerterm. For example, if we go back to the first

half of 2008, inflation (as measured by the

Consumer Price Index) was running at 7-8%,

and we could have made very similar

arguments as the above on why property

looked like a good investment. But anyonewho had bought then would have been

caught by the Global Financial Crisis when

property prices dropped by 25% (as

measured by the Property Price Index).

In times of crisis, cash is king, so make sure

you have an emergency fund to help you get

through the tough times before you jump into

a property!






Non-Landed Residential Resale Property Transactions for the Week of Feb 29 – Mar 6

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 PEARLS CENTRE 753 700,000 929 99

3 QUEENS 1,195 1,390,000 1,163 99

4 CARIBBEAN AT KEPPEL BAY 1,130 1 ,620,000 1,433 99

5 THE PARC CONDOMINIUM 980 1,080,000 1,103 FH

5 MONTEREY PARK CONDOMINIUM 1,421 1,449,420 1,020 999

5 VILLA DE WEST 1,378 1,245,000 904 FH

5 PALM MANSIONS 1,130 990,000 876 FH

5 THE INFINITI 1,302 1,093,680 840 FH

5 WEST BAY CONDOMINIUM 1,216 890,000 732 99

5 DOVER PARKVIEW 1,324 968,000 731 998 CITYLIGHTS 560 958,000 1,712 99

9 PATERSON RESIDENCE 3,972 8,800,000 2,216 FH

9 LUCKY PLAZA 872 1,730,000 1,984 FH

9 CAVENAGH HOUSE 1,636 2,565,000 1,568 FH

9 EMILY RESIDENCE 657 950,000 1,447 FH

9 WILKIE 87 1,227 1,440,000 1,174 FH

10 FIFTH AVENUE CONDOMINIUM 1,496 2,700,000 1,805 FH

10 MONTVIEW 1,227 1,900,000 1,548 FH

10 SPRING GROVE 1,012 1,550,000 1,532 9910 CHELSEA GARDENS 2,508 3,800,000 1,515 FH

10 THE HORIZON 1,722 2,400,000 1,394 FH

10 STUDIO 3 1,044 1,450,000 1,389 FH

10 CLIFTEN 1,066 1,470,000 1,379 FH

11 RESIDENCES @ EVELYN 1,528 2,690,000 1,760 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

11 SHELFORD SUITES 1,367 2,050,500 1,500 FH

11 MONTEBLEU 570 840,000 1,472 FH

11 NOVENA HILL 657 860,000 1,310 FH

11 NOVENA HILL 710 810,000 1,140 FH

11 N.A. 1,238 1,408,000 1,137 FH

11 THE TREVOSE 2,314 2,000,000 864 99

12 PINNACLE 16 581 820,000 1,411 FH

12 PARC HAVEN 1,249 1,350,000 1,081 FH

12 KEMAMAN POINT 850 900,000 1,058 FH

12 ST FRANCIS COURT 818 730,000 892 9914 THE WATERINA 635 810,000 1,275 FH

14 D' CASITA 990 1,050,000 1,060 FH

14 PALM LODGE 1,238 970,000 784 FH

14 THE ALCOVE 2,368 1,320,000 557 99

15 THE BELVEDERE 1,367 2,280,000 1,668 FH

15 ONE AMBER 1,335 1,730,000 1,296 FH

15 COTE D'AZUR 1,109 1,430,000 1,290 99

15 MANDARIN GARDEN CONDOMINIUM 829 998,000 1,204 99

15 COSTA RHU 1,012 1,200,000 1,186 9915 WATER PLACE 1,227 1,438,000 1,172 99

15 HAIG COURT 1,464 1,610,000 1,100 FH

15 SANCTUARY GREEN 1,572 1,729,200 1,100 99

15 EASTERN LAGOON 753 828,000 1,099 FH

15 JI XIANG COURT 850 848,000 997 FH






NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore LandAuthority. Typically, caveats are lodged at least 2-3 weeks after apurchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 BLU CORAL 872 829,888 952 FH

15 MANDARIN GARDEN CONDOMINIUM 1,572 1,480,000 942 99

15 THE GERANIUM 1,453 1,240,000 853 FH

15 NEPTUNE COURT 1,636 1,350,000 825 9915 MALVERN SPRINGS 1,765 1,398,800 792 FH

16 CASA MERAH 1,249 1,410,000 1,129 99

16 THE BAYSHORE 958 950,000 992 99

16 AQUARIUS BY THE PARK 1,324 1,210,000 914 99

16 THE TAIPAN 1,561 1,390,000 891 FH

16 THE CLEARWATER 1,335 1,170,000 877 99

16 THE TANAMERA 958 780,000 814 99

16 BAYSHORE PARK 1,076 870,000 808 99

16 THE TAIPAN 1,873 1,338,800 715 FH16 BEDOK COURT 2,411 1,600,000 664 99

17 BLUWATERS 2 958 830,000 866 946

18 LIVIA 915 900,000 984 99

18 SAVANNAH CONDOPARK 1,453 1,250,000 860 99

18 EASTPOINT GREEN 1,173 970,000 827 99

18 EASTPOINT GREEN 1,119 855,000 764 99

18 ELIAS GREEN 1,550 985,000 635 99

18 ELIAS GREEN 1,528 905,000 592 99

19 AMARANDA GARDENS 1,259 1,500,000 1,191 FH19 KOVAN MELODY 1,227 1,230,000 1,002 99

19 COMPASS HEIGHTS 1,249 1,080,000 865 99

19 RIO VISTA 1,249 1,030,000 825 99

19 CASA ROSA 1,098 875,000 797 99

19 N.A. 2,939 1 ,270,000 432 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

20 GOLDENHILL PARK CONDOMINIUM 936 1,175,000 1,255 FH

20 GOLDENHILL PARK CONDOMINIUM 1,335 1,660,000 1,244 FH

20 THE GARDENS AT BISHAN 883 879,000 996 99

20 THE GARDENS AT BISHAN 1,227 1,130,000 921 9921 MAPLEWOODS 1,335 1,760,000 1,319 FH

21 HIGH OAK CONDOMINIUM 1,389 1,230,000 886 99

21 HUME PARK I 1,496 1,320,000 882 FH

21 HUME PARK II 1,485 1,270,000 855 FH

21 SYMPHONY HEIGHTS 1,152 978,000 849 FH

22 THE MAYFAIR 1,163 920,000 791 99

23 PARK NATURA 1,378 1,498,000 1,087 FH

23 HILLVIEW REGENCY 904 833,000 921 99

23 HILLVIEW REGENCY 1,119 920,000 822 9923 THE WARREN 1,292 961,000 744 99

23 THE MADEIRA 1,324 981,000 741 99

23 MAYSPRINGS 1,292 910,000 705 99

23 GUILIN VIEW 1,528 998,000 653 99

26 HONG HENG MANSIONS 1,302 870,000 668 FH

27 EUPHONY GARDENS 1,044 770,000 737 99

27 SELETARIS 1,615 1 ,000,000 619 FH

Documents

Singapore Property Weekly Issue 43