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Shunfu Ville sale dispute could drag on, prove costly for owners

The sale of Shunfu Ville, the largest en bloc deal since 2007, has hit a brick wall. Earlier in October, several newspapers reported that five households at the 358-unit residential development in the Bishan-Thomson area are opposing the sale for a number of reasons, including the expectation of a bigger payout from the buyer Qingjian Realty.

The Chinese developer paid $638 million for the massive 408,927 sq ft site back in May, which works out to a land cost of $747 psf per plot ratio. However, Lianhe Zaobao reported that the minority owners filed an objection with the Strata Titles Board in July, a case is now going to the High Court after mediation talks failed.

Making the situation more complicated, plans to build a new project of up to 36 storeys-high were thwarted, after the Urban Redevelopment Authority (URA) instructed Qingjian to limit the maximum height to 23 storeys to preserve the view from the nearby MacRitchie Reservoir Park.

When contacted, Li Jun, Qingjian’s Managing Director, said: “We will await the final outcome of the collective purchase, and will definitely want to maximise the plot ratio (of 2.8) within the scope of the URA guidelines when it is time to embark on the design.”

But this could take a while due to the ongoing dispute. “This could drag the entire deal for another six months or more, and add to the costs of the sales,” said an analyst who declined to be named. Media reports stated that the owners may have to fork out as much as $400,000 in legal fees.

It’s definitely a setback for the over 80 percent of owners who consented to the sale. Each household stood to gain an average payout of about $1.78 million from a successful sale.

Despite this, the analyst isn’t surprised that the deal stalled. “Unfortunately, going to the High Court is almost a norm for a collective sale, and I am sure the majority owners and the buyer have factored all these contingencies into their agreement.”

Gilstead Court in Newton and the Thomson View Condominium along Upper Thomson Road are just two examples of previous en bloc deals which turned sour due to ongoing disputes involving some of the owners, with no resolution in sight.

Despite the uncertainties and risks, the analyst believes Qingjian will proceed with the Shunfu Ville sale “because it appears they have bagged a fantastic plot for a reasonable price”.

Developed in the late 1980s by the former Housing & Urban Development Company (HUDC), Shunfu Ville has about 70 years left on its lease. Qingjian had revealed plans to build more than 1,000 homes on the site.

Meanwhile, property consultancy firm JLL, which brokered the Shunfu Ville sale, declined to comment when contacted by PropertyGuru.

In a statement earlier this month, Karamjit Singh, International Director and Head of Residential at JLL, expressed optimism that the market was slowly turning a corner with three en bloc sales so far this year, up from just one last year and none in 2014. “This brings the total value of successful en bloc sales to $1 billion,” he said.

JLL also brokered the most recent collective sale involving Raintree Gardens in Potong Pasir. The 175-unit development was sold to a joint venture company of UOL and UIC for $334.2 million, or $797 psf per plot ratio.


270 units sold on launch day at The Alps Residences

The 626-unit The Alps Residences at Tampines Street 86 sold 270 units (43 percent) on 2 October, its first launch day after a week-long preview, said its developer MCC Land.

Prices range from $491,000 for a one-bedroom unit measuring 441 sq ft to $1.44 million for a 1,410 sq ft four-bedder.

According to a spokesperson for the condominium, the one- and two-bedroom units made up 88 percent of the units sold.

“We attribute the strong response to the highly efficient unit designs as well as competitive prices. There seems to be pent-up demand in Tampines, which has seen no new condominium launched since The Santorini, also an MCC Land project, in April 2014,” the spokesperson said.

The 99-year leasehold project is expected to obtain its TOP in 2020.


Lendlease unveils

Lendlease unveils plans for Paya Lebar Quarter

Australia-listed property group Lendlease on 17 October unveiled plans for its S$3.2-billion mixed use development, Paya Lebar Quarter which will be completed in phases beginning the second half of 2018.

The 3.9ha development will comprise of seven buildings―three private residential buildings, three Grade A office buildings and a retail mall―all within what the group calls a “pedestrian-friendly new city precinct” with 100,000 sq ft set aside as public space which will include lush greenery with cycling paths and event spaces.

The urban regeneration development will first see the retail and commercial components completed in 2018, followed by the 429-unit condominium development, Park Place Residences, in 2019.

The seven-storey retail mall will house over 200 retailers―about 30 percent being for food and beverage tenants.

According to Lendlease, grocery retailer NTUC FairPrice Finest and foodcourt operator Kopitiam will headline the Paya Lebar Quarter mall (pictured), taking up over 22,000 sq ft and 15,000 sq ft of the 340,000 sq ft total area of retail space, respectively.

Meanwhile, the development will also offer one million sq ft of Grade A office spaces spread three 13- to 14-storey blocks. The office buildings are expected to house some 10,000 workers.

Lendlease said it is already in talks with various multi-national corporations for the leasing of the office space.

As for the condominium development, Paya Lebar Quarter Managing Director Richard Paine said Park Place Residences, which contains one- to three-bedroom units, will be launched in the first half of 2017.

It is noted that the joint venture between Lendlease and sovereign wealth fund Abu Dhabi Investment Authority (ADIA) won the tender for the 99-year leasehold Paya Lebar Central site in April last year for a bid price of S$1.67 billion.

Home price drop likely due to new reporting rule for developers

The Urban Redevelopment Authority’s (URA) flash estimates of a 1.5 percent drop in private home prices came as a surprise to analysts and erased hopes that the market may be bottoming out following several quarters of mild price declines, reported The Business Times.

Some analysts attributed the price declines, particularly of high-end homes within the city centre, to the recent move by the URA to include net prices of housing units sold from delicensed projects.

Delicensed housing projects have received their Certificate of Statutory Completion, with individual strata titles already issued to buyers. Previously, the URA did not require these projects to submit price transaction information. As such, the URA computed their prices based on other sources like stamp duty submissions. Some property consultants, however, believe that these may be slightly inflated.

Under the new rule, developers are required to strip out any rebate, discount, allowance, reimbursement, voucher, benefits and payments before submitting the net prices of the units sold. This is the first time URA data has included the net prices of housing units in delicensed projects.

Nicholas Mak, Executive Director at SLP International, believes the new rule contributed to the large drop in home prices in the Core Central Region (CCR) and Rest of Central Region (RCR).

Home prices in the CCR fell 1.8 percent, after increasing by 0.3 percent during the previous quarter, while RCR prices dropped 1.3 percent after posting an increase of 0.2 percent in Q2.

“As most delicensed projects which offer incentives and discounts are located in the CCR and some in the RCR, this has contributed to the relatively sharper fall in prices of non-landed properties in these regions . . . In the current market, such a change could result in a one-off larger than normal decline in the price index,” said Mak.

However, Savills Singapore Research Head Alan Cheong noted that the new price reporting rule does not explain the equally severe price decline registered in the Outside Central Region (1.2 percent) and the landed housing segment (2.2 percent), considering that there were few and no delicensed projects within these respective segments.

“What has been surprising is not the direction that the index adopted, but the re-acceleration of the rate of price decline. For the quarter in review, all three regions registered price falls of well over one percent, which on a quarter-on-quarter basis, is a significant change.

“There will be a lot of variation and noise in this recovery, because the price trend line is so gentle that there will be more noise (than usual) and the market will see-saw,” said Cheong.

This is the 12th consecutive quarter of overall price declines seen in the property market, the magnitude of which is also the greatest over this period. Private home prices have fallen 10.8 percent since Q3 2013.


Vacancy rate for private rented homes up in Q2

With supply outpacing demand, the vacancy rate for private rented homes increased 1.4 percentage points to 8.9 percent in the second quarter of 2016, reported Singapore Business Review citing a Savills report.

The stock of private residential units across the island stands at 338,728, after 8,425 rented units were added in Q2 this year. Net new supply nearly doubled from the first quarter and has reached a new record since 6,889 units were recorded in Q2 2015.

Despite the increase invacancy rate, Savills noted that prime residential developments attracted a steady stream of tenants. In Q2 2016, Reflections at Keppel Bay and The Sail @ Marina Bay saw rental contracts stay above the 100-level mark, with 155 and 174 deals registered respectively. Spottiswoode Residences also recorded 101 deals in Q2 2016, up 159 percent from the previous quarter.


GLS bids rise amid strong demand

The number of bids for Government Land Sales (GLS) launches has been on the rise this year amid fierce competition among developers to acquire land sites, reported Singapore Business Review citing a Maybank Kim Eng report.

Average bids for executive condominium (EC) sites climbed from seven to 10 this year, while bids for private residential sites remained at 10.

Maybank Kim Eng also highlighted an increase in land prices as property developers locked horns.

“Fierce competition has led to escalating land prices this year, arising from limited land-banking options as the government scales back GLS launches this year,” it said.

In fact, the highest bid for a Sengkang site, which stands at $287 million, was 17 percent above the price of another nearby site sold in August 2014. A similar trend was also seen in the EC market, where prices have soared 16 to 25 percent from last year.

“We expect continued keen interest in the remaining three residential land parcels for launch in the next few months,” the report added.

Raffles Hotel

Raffles Hotel to undergo restoration work in 2017

Raffles Hotel Singapore will undergo its first major refurbishment in over 25 years as it embarks on a restoration programme beginning next year, the hotel announced earlier this month.

The last restoration was conducted from 1989 to 1991 where the hotel closed for two and a half years.

The 16-month restoration, which will be carried out in three phases, will start in January 2017. The first phase of refurbishments will see the Raffles Hotel Arcade—which houses 40 regional and specialty shops, indoor and outdoor function areas—undergo restoration works while other areas of the property will remain operational.

Phase two will begin in mid-2017 for the restoration of main hotel building and lobby, as well as a portion of the hotel suites. The hotel will then fully close for the final phase of the renovations towards the end of next year before it reopens again in the second quarter of 2018.

“This restoration is designed to ensure that we retain what is so special about Raffles Hotel Singapore – the ambience, the service, the charm and the heritage of the hotel,” said Raffles Hotel Singapore general manager Simon Hirst.

“By introducing new experiences for our guests while respecting the history and heritage of the hotel, we want to ensure that this hotel continues to remain at the epicentre of Singapore’s social and cultural scene,” Hirst added.

The iconic landmark hotel opened its doors in 1887 and was declared a national monument by the Singapore government in 1987.


The PropertyGuru News & Views This article was first published in the print version PropertyGuru News & ViewsDownload PDFs of full print issues or read more stories now!