Real Estate and Property Market Update – Week 13

Choa Chu Kang Plot for Sale - 28th March 2008
Singapore’s Urban Redevelopment Authority (URA) launched a 1.9 hectare residential site auction yesterday near Choa Chu Kang MRT station.

The plot can yield a maximum gross floor area of 572,600 square foot and could accommodate up to 550 homes. It is expected to achieve between $130 million and $150 million, equivalent to $230-$270 per square foot. This would equate to a break even price of about $560 to $580 per square foot and potential unit prices of between $620 to $650 per square foot.

Rents Forecast to Continue Rising - 27th March 2008
2007 saw the non-landed rentals increase by 43%, the highest since 1990. Key drivers for this were en-bloc collective sales (where sellers decided to rent in the interim), as well as population growth of 15% in the year. Rental growth is expected to continue, albeit at a reduced 5-10% pace.

Average rents for luxury residences fetched up to $6.10 per square foot. This compares with prime residential areas getting $4.50 and state-wide average of $2.65 per month. In 2008, spillover from the high price increases and developments in the core central area are expected to lead to rent increases in more suburban areas.

Dhoby Ghaut’s Latest Attraction - 27th March 2008
Singapore’s Urban Redevelopment Authority (URA) announced yesterday a plan to spend $4million to transform the vacant area above the Dhoby Ghaut MRT station. This will include a café pavilion and outdoor amphitheatre which could play host to buskers, flea markets, artist performances or football matches.

The 1.3 hectare space will be overhauled by Chan Soo Khain, winner of the President's Design Award for Architecture and Urban Design. Mr Chan’s vision is for the amphitheatre to take centrepiece which divides the land into 3 sections - an open field to the East, a paved area to the West and the amphitheatre.

2 New Plots for Tender from HDB - 27th March 2008
Singapore’s Housing Development Board (HDB) plans to auction off two new 99-year old lease sites at Chestnut Avenue and Jurong West. The former will be for private flats and the latter executive condo homes.

The site at Chestnut Avenue could hold up to 450 units and potential fetch bids up to $270 per square foot prices. The Jurong site could yield up to 460 units with bids up to $160 per square foot expected. The pricing difference reflects the attractiveness of the Chestnut Avenue location as well as nearby park area.

Yishun Site Fetches $214million - 26th March 2008
Property Developer, MCL Land, offered $213.5m almost 70% more than the second bidder for the Yishun site opposite the Lower Seletar Reservoir near Orchid Country Club and Gold Course.

The four other bidders were Peak Properties (run by the Wee Family) with $127 million, Frasers Centrepoint with $110 million, Sim Lian Land with $93 million and Billion Rise (part of Cheung Kong Holdings) with an optimistic bid of $58 million. The spread of bids reflects the current market with some players seeking to pick-up bargains whilst others are looking to add to their landbank and therefore prepared to pay market rates.

MCL plans to build a 15 to 16 storey high, 480 to 500 unit condo with most units having an uninterrupted reservoir view. The break even point for the development will be circa $680 per square foot with selling prices of between $750-$800 per square foot.

En-Bloc for Landmark Tower - Again! - 26th March 2008
After the aborted attempt to sell in July 2007 for $300 million, Landmark Tower is up for collective sale again - this time with a $270 million asking price. If the asking price is reached on 15th April, then the owners are in line for a 70% premium

The 99-year leasehold 61,000 square floor site on Chin Swee Road is currently a 38-storey development of 139 apartments. After development, it could provide 220 units each of 1,000 square foot in size.

Airview Tower En-Bloc Rejected by High Court - 26th March 2008
The High Court rejected the $202 million en-bloc sale of Airview Towers proposed sale in October 2007 as it deemed the minimum 80% of sellers had not consented to the sale.

The argument hinged on the fact that two new owners who bought their units (from existing owners who had signed the agreement) during the collective sale did not sign the collective sale agreement in time. As such, these two units could not be counted and the owners lost out on about $2 million per unit.

The case was brought by Ken Lee, a single owner who represented himself in court against top Singapore Law Firm, Harry Elias Partnership.

The developer, Bukit Sembawang, who won the tender in April 2007 was planning a 26-storey condo

New Rules for HDB Resale - 25th March
The purchase of Housing Development Board (HDB) resale units will become stricter in May 2008. Under new rules to be implemented by the HDB, it will be mandatory for buyers and sellers to sit down and review a checklist of 'do’s and don'ts' with the housing agent.

The objective of the new process is to ensure the buyers and sellers fully understand the implications and obligations of HDB unit purchase, rules around under-declaring prices and to overcome delayed or cancelled transactions. Last year approximately 750 cases or 2.5% of applications failed.