TWO freehold industrial sites - at 18 Howard Road and 27 New Industrial Road, in the north-eastern part of Singapore - are for sale by tender at indicative prices of $30 million ($272 per sq ft per plot ratio) and $14 million ($278 psf ppr) respectively.

Charles Hoon, director of investment properties at marketing agent CB Richard Ellis, said the sites are zoned Business 1 under Master Plan 2003. This means 40 per cent of gross floor area can be used for purposes such as offices, showrooms or workers’ dormitories.

‘While industrial capital values and rents have recovered, industrial space still presents an attractive option, compared with office space, for businesses to relocate their backroom operations.’

The two sites are conveniently located and of regular shape, he said. And their freehold tenure is an ‘added advantage’.

The 18 Howard Road site is a 44,000 sq ft vacant plot in Macpherson Industrial Estate. The 20,000 sq ft 27 New Industrial Road is in the New Industrial Road cluster.

Separately, DTZ Debenham Tie Leung is marketing a 999-leasehold Good Class Bungalow (GCB) site in Yarwood Avenue. The 69,540 sq ft site, close to Binjai Park, has been put up for sale through an expression-of-interest exercise at an indicative price of $750-$800 psf.

According to DTZ, it has redevelopment potential to accommodate four GCBs. It now houses a single storey detached house with an outhouse, swimming pool and tennis court.

Shaun Poh, DTZ’s senior director for investment advisory services and auction, said: ‘This is a rarely available large plot of land in a prime location, offering a myriad of possibilities.’

Recent transactions of GCB land in the area include sites on Kilburn Estate for around $860 psf and Binjai Park for around $850 psf, he said.

Source : Business Times - 6 May 2008

LANDED-HOUSING sites at Sembawang were sold yesterday at prices 22 per cent lower on average than nearby plots a few months ago. Yesterday’s auction by the Urban Redevelopment Authority was for 11 plots with 99-year leasehold tenure. All were sold - for a total of $45.29 million, or $223 per sq ft (psf) on average.

The plots come under phase two of Sembawang Greenvale estate. URA sold the 12 plots in nearby phase one in October last year for about $285 psf on average. Smaller developers and individuals turned up yesterday to bid for the phase two plots, which can be developed into 90 dwellings - one bungalow, 16 semi-detached houses and 73 terraced houses.

Fragrance Homes reaped the biggest harvest, winning four plots that can house eight semi-detached houses and 40 terraced houses. The largest plot, in Penaga Place, designated for 18 terraced houses across 35,624 sq ft, cost Fragrance $8.7 million or $244 psf. This was the highest psf price for any of the 11 plots.

Odeon Properties’ $1.66 million bid for a plot in Kerong Lane represented the lowest psf price of $151. The 10,989 sq ft site can accommodate one bungalow and two semi-detached houses. Reflecting the better market last year, prices on a psf basis in phase one ranged from a higher $210 to $327 psf.

The only individual to submit a wining bid yesterday, Christina Sui Fong Fong, bought the third-largest land parcel for $6.65 million or $221 psf.

Asked about plans to release more landed-housing parcels, URA’s director of land administration Choy Chan Pong said: ‘We will be releasing according to market demand.’

Source : Business Times - 23 Apr 2008

A LARGE commercial unit at The Riverwalk, Upper Circular Road, is up for sale at an indicative price of $23 million.

The unit, which has a strata area of 20,161 sq ft that represents a 12.11 per cent ownership stake, is owned by private investors. The indicative price works out to about $1,140 per square foot.

CB Richard Ellis (CBRE), which is marketing the 99-year leasehold property, says rent of $5 to $6 per sq ft is being asked for comparable office space in the area. Assuming rent of $5.50 psf, the $1,140 psf guide price reflects a net yield of about 5.5 per cent.

The current lease expires in mid-July this year.

In March, a unit at High Street Centre was sold for about $1,500 psf.

CBRE associate director of investment properties Liau Wee Boon said of the Riverwalk unit: ‘In addition, there is collective sale potential as the development is undergoing an en bloc exercise. The potential payout is more than 50 per cent above the guide price.’

The Riverwalk comprises 181 commercial units ranging from 54 sq ft to 20,161 sq ft, plus 118 apartments ranging from 818 sq ft to 3,821 sq ft, plus 290 parking lots. It was put up for collective sale late last year at an indicative price of about $700 million or $1,735 psf per plot ratio (psf ppr) and zoned for residential and commercial use.

Meanwhile, in the Victoria Park area off Holland Road, a good class bungalow (GCB) has been put up for sale by DTZ Debenham Tie Leung (DTZ).

The 999-year leasehold GCB sits on a site of 32,687 sq ft. DTZ said that a recent valuation put the value of the site at $26.5 million.

The land is now occupied by an old two-storey detached house with a garage and swimming pool.

DTZ said recent transactions of GCB land in the area include sites in Leedon Park for $914 psf and Victoria Park Road for $920 psf.

DTZ director (Investment Advisory Services) Quek Soh Hoon said: ‘Given the positive attributes and distinctive location, the subject property would be an attractive and choice acquisition for high-net-worth individuals looking for land to build their dream house or investment property.’

Source : Business Times - 22 Apr 2008

Land scarcity in Singapore should ensure sustainable capital growth in landed housing in the medium to long term, write STEVEN MING and AVIN SEOW

LANDED homes saw their strongest price rise last year since 1994 but they have yet to catch up with their non-landed counterparts, leaving room for more capital as well as rental growth in 2008. Prices of landed homes rose 23.4 per cent last year, going by the Urban Redevelopment Authority’s (URA) index of landed private residential property island-wide. This growth rate reaffirmed the upward trend, especially compared with the negligible growth in previous years - 0.6 per cent in 2004 and 2.4 per cent in 2005.

For landed homes in the suburban areas, average prices rose to $636 per sq ft, an increase of 45.1 per cent year-on-year. Landed homes in the prime districts of 9, 10 and 11 enjoyed healthy capital growth of 24.3 per cent to reach $961 per sq ft in 4Q 2007.

Good Class Bungalows (GCBs) were the star performers in 2007. According to URA numbers, average prices of GCBs surged 58.7 per cent year-on-year to $763 psf from $539 psf in 2006. The average cost of a GCB stood at $13.8 million in 2007, compared to $10.3 million in the preceding year. The trend of some GCBs being sold and resold within 12 to 18 months continued into 2007.

An example of this trend is a GCB at First Avenue that was sold for $10 million in September 2007, only to be resold at $12.5 million in October 2007, and then resold again at $16 million in December 2007. This is a whopping increase of 60 per cent in just four months.

Boasting a unique waterfront lifestyle, new 99-year leasehold homes on Sentosa Cove have redefined luxury landed living since their emergence in 2004. Expatriates and overseas investors have since lent much support to the capital growth in this segment. Average prices climbed 20.8 per cent to $1,463 psf by end-2007.

Another trend which we have observed is the increasing popularity of cluster housing. Since it resurfaced in 2000, this lifestyle concept has become ever more popular, especially among younger home owners and permanent residents. Cluster houses, offering shared facilities, blend the elements of landed property with condominium style living. Known as strata landed housing, these developments may be bungalows, terraced or semi-detached homes. Some developers have added more exclusivity to their projects by including a private swimming pool in each house. Notable launches last year were Dunsfold 18 and 8 @ Stratton in Stratton Green, both of which received good sales response.

There are several reasons for optimism across all landed housing segments this year. We believe that more capital gains can be expected this year since the price index of landed homes remains some 25 per cent below the peak of 2Q 1996. Landed homes have yet to see the sharp price rises of their non-landed counterparts. Emerging from a relatively low base, landed properties may be more appealing to investors this year.

Secondly, landed housing will always be considered a luxury in land scarce Singapore. This inherent scarcity should continue to lend support to the landed housing market. As such, GCBs look poised for yet another good year of capital value growth. It would not be surprising to see average GCB land prices cross $900 psf in 2008, due to the scarcity of such bungalows (there are an estimated 2,500 of them) coupled with the rising transacted prices on Sentosa Cove.

Similarly, landed homes on Sentosa Cove should continue to trend higher. Unlike those on the mainland, these houses have a broader market. There are no restrictions on foreign ownership of landed homes on Sentosa Cove. The continued influx of expatriates, together with the growing appetite of the rich for something unique and exclusive, is likely to fuel prices of these luxurious homes.

Rental yields are an attractive component of property investments, providing landlords with regular and stable income. Landed properties have become increasingly popular with tenants, with rents rising at their fastest pace in seven years. As at 4Q 2007, average rents of terrace houses and semi-detached houses climbed to $1.87 and $2.22 psf per month respectively, up 52 per cent year on year, while rents for detached houses rose by 23 per cent to $3.09 psf per month.

Rental growth is clearly outpacing capital growth for landed homes, and with the expectation that landed home prices will catch up this year, landed properties could offer an investor both healthy rental and capital gains in 2008 and beyond.

Given the above factors, the landed housing market should be able to attain capital gains of 10 to 20 per cent this year, notwithstanding the continued US credit turmoil. Singapore’s property market remains fundamentally sound, backed by a robust job market and an expanding economy. Perhaps the most fundamental fact is the scarcity of land in Singapore which should ensure sustainable capital growth in landed housing in the medium to long term.

Steven Ming is director at Savills Prestige Homes and Avin Seow, analyst, Savills Research & Consultancy.

Source : Business Times - 27 Mar 2008

IN A keenly watched move, the Government has decided not to award a landed housing site in Jurong West after only two bids came in - both way below expectations.

The top bid for the site, from Boon Keng Development, came in at $11.8 million, or $78 per sq ft (psf) of land area - less than half of what one consultant had expected.

The only other bid for the site, in Westwood Avenue, came from Sunway Concrete Products, which offered even less at $10.33 million, or just $68.10 psf.

The tender for the 14,098.9 sq m, 99-year leasehold site closed a week ago.

Property market watchers had been waiting with interest to see how the Government would respond to such low bids, given the recent slump in market sentiment.

After the boom times seen last year, sale volumes have fallen significantly as buyers and sellers remain on the sidelines.

Cushman & Wakefield managing director Donald Han, who had tipped that the site could have fetched $200 psf, said the Government had been wise not to award the site.

‘If you award the site, there will be a downward adjustment of the valuation in the area,’ he said.

The price would also be used as a benchmark for future tenders of such sites in the area, consultants said.

Said Knight Frank director (research and consultancy) Nicholas Mak: ‘In a market with thin volume, tenders on the confirmed list could invite opportunistic bids.’

Sites on the Government’s confirmed list are put up for tender on a specific date.

The Government also sells reserve-list sites, which are put up for sale only when a developer commits to bid a minimum price.

‘There are buyers capitalising on the weak property market but there’re no fire sales yet,’ said Mr Han.

Earlier this year, the Government also chose not to award the tender for a transitional office site in Aljunied because the only bid it received was too low.

Mezzo Development had offered to pay $7.8 million - or a unit land price of $38.35 psf per plot ratio.

Source : Straits Times - 19 Mar 2008

THE government yesterday said that it’s not awarding a landed housing parcel in Jurong West - because the bids were too low.

When the tender for the 151,759 square foot site closed this month, there were just two bids. And the higher of the two was a low $11.8 million - or just $77.80 per square foot - in what was taken as a sign of an uncertain property market. That bid, from Boon Keng Development, was significantly below the $200-$250 psf of land area that analysts reckoned the site could fetch.

The other bid came from Sunway Concrete Products, a unit of Malaysia-listed Sunway Holdings. It offered $10.3 million, or $68.10 psf of land area.

Property analysts said then that there was a chance the government would not award the site, as has happened before when the highest bid was too low.

In January, for example, the government decided not to sell a short-term office site at Aljunied because the sole bid was too low. The move followed a string of lower-than-expected offers for state land.

‘The decision is expected on the Jurong site, as the top bid was well below the market rate,’ Cushman & Wakefield managing director Donald Han said yesterday. ‘It would not have been justifiable to award the site, as it would have been a shockwave in terms of market value in that area.’

It is estimated that 50 to 60 landed homes can be built on the 99-year leasehold site in Westwood Avenue.

Source : Business Times - 19 Mar 2008

Only one other offer made; poor show seen as sign of uncertain market.

IN what is seen as a sign of an uncertain property market, a landed housing parcel in Jurong West drew only two bids, and a low top bid of $11.8 million - or just $77.80 per square foot (psf) - at the close of a government land tender yesterday.

The higher bid, put in by Boon Keng Development, was significantly below what analysts had said the site could fetch. Cushman & Wakefield managing director Donald Han, for example, reckoned that the plot would fetch $200-$250 psf of land area.

‘The price is really below expectation,’ said Mr Han yesterday. ‘But with the market sentiment being so weak, you can expect wild swings in prices. Developers will be sitting on the sidelines or might not want to bid their best prices.’

The other bid was put in by Sunway Concrete Products, a unit of Malaysian- listed Sunway Holdings. It offered $10.3 million, or $68.1 psf of land area.

Li Hiaw Ho, executive director for research at CB Richard Ellis, said that both bids were ‘relatively conservative’ and reflected the current cautious sentiment in the market.

The 99-year leasehold site on Westwood Avenue has a land area of 151,759 sq ft. Property analysts estimate that some 50-60 landed homes can be built on the site.

‘Nevertheless, based on the highest bid of $78 psf, terrace houses on this site could still be sold for $900,000 to $1 million each,’ Mr Li said. This is slightly higher than recent transactions of intermediate terrace houses in nearby Westwood Park and Westville, which were between $820,000 and $990,000 each.

Potential buyers, Mr Li added, could comprise locals working in the manufacturing firms in Jurong and Tuas, as well as academics at nearby Nanyang Technological University.

Market watchers, however, said that it is possible that the government might not award the site because of the low price.

The price looks especially low when considering other recent government sales of landed housing plots, Mr Han pointed out.

In October, the Urban Redevelopment Authority (URA) auctioned off 12 sub-divided landed housing plots near Sembawang Beach which can be developed into a total of 57 landed homes. The auction fetched a total of $37.09 million, which worked out to about $285 psf of land area on average.

And in January, the government decided not to sell a short-term office site in Aljunied because the sole bid offered too low a price. The decision followed a recent string of lower-than-expected offers for state land.

Source : Business Times - 12 March 2008

A LANDED plot in Jurong West that was tipped by one consultant to fetch bids of over $30 million failed to even get to half of that.

Just two offers were placed for the 99-year leasehold Westwood Avenue plot, a stark reflection of the fast-deteriorating sentiment in the property market.

The top bid of just $11.8 million, or $78 per sq ft (psf), of land area came from Boon Keng Development, with Sunway Concrete Products offering $10.33 million, or just $68.1 psf.

Cushman & Wakefield managing director Donald Han, who had tipped that the site could fetch more than $30 million, or $200 to $250 psf, said the offers were ‘defensive bids’ that would allow the developer to withstand a fallout from the global credit crunch.

CBRE Research executive director Li Hiaw Ho said the ‘relatively conservative bids’ for the Jurong site, which is in an established residential area, reflects the market’s cautious sentiment.

Assuming the tender is awarded, terrace houses on the 14,098.9 sq m site, within a 10-minute drive of the Boon Lay MRT station, could sell for $900,000 to $1.1 million each, property consultants said.

These levels are just slightly above current prices being transacted in Westwood Park and Westville, said Mr Li. Recent deals of intermediate terrace houses in Westwood Park and Westville ranged between $820,000 and $990,000, he said.

Source : Straits Times - 12 Mar 2008

Developer Boon Keng Development has put in the top bid of S$11.8 million for a landed housing site at Westwood Avenue.

The price for the 150,700 sq ft site, which is being sold on a 99-year lease, works out to be S$78 per sq ft.

Only two bids were received by the Housing and Development Board (HDB) for the plot. Sunway Concrete Products put in the lower offer of S$10.3 million.

Property consultants CB Richard Ellis said the bid amounts were conservative, reflecting the current cautious sentiment in the property market.

But it said the terrace houses to be built on the site can still fetch between S$900,000 and S$1 million each.

These prices are slightly higher than the current prices being transacted for nearby developments like Westwood Park and Westville.

Source : Channel NewsAsia - 11 Mar 2008