Property Market Sentiments

[chialc]

TDSR to stay.

TDSR has to stay - no doubt about it.

The questions is whether are we too relax with 60% TDSR threshold?

If TDSR threshold is to be moved, will it be
+ higher (more relax so that SGP can take on more debt)
+ lower (tighter and hence more difficult in future to own a condo)

Not a call to buy or sell, but just be mindful if TDSR is revised to 50% or 40%, what could be the impact to you?

Quote from MAS website:
MAS expects any property loan extended by the FI to not exceed a TDSR threshold of 60% and will regard any property loan in excess of a 60% TDSR to be imprudent.
The threshold is set at 60% for a start to allow both the FIs and borrowers to familiarise themselves with the TDSR framework and its computation methodology.
MAS will monitor and review the 60% threshold over time, with a view to further encouraging financial prudence.

Love Compassion

[gutman]

I read this article on BT front page this morning as well, I must say it was phrase it in bold "Foreginer's share of home purchase creeping up". If you didnt finish the entire article, I suspect people might have the misconecption that property prices are bottoming out..

The fact that new SKM plated cars are on the street and new properties are transacted represents a wealthy lot of cash rich people (foreigners especially) are in SG.

Some of my friends who came from HK 20 years ago are telling me Singapore is like 1998 of hong kong.. Everything just surge. properties, cars, medical.. etc. Whether we evolve into Hong kong today remains a ?. But hey HK is back by powerhouse China! just because some developers are beginning to reprice their stockpile, it begin to look attractive.

I am afraid afterall, its just a falling knife.

Maybe we are also "backed" by the Chinese. This is just one rich Chinese tycoon. Probably more will come and their money will flow to our real estates or real estate investment trusts....


From The Edge

Chinese billionaire Tong Jin Quan, the chairman of Shanghai- based Summit Property Development, saw his stakes in Singapore real estate investment trusts (REITs) grow in the month of February. Tong has been named the 35th richest man in China by Forbes, with a net worth of US$2.7 billion. Since Feb 18, shares in Suntec REIT, Soilbuild Business Space REIT and Cambridge Industrial Trust had been acquired on Tong’s behalf by Wealthy Fountain Holdings Inc. According to filings with the Singapore Exchange, Wealthy Fountain Holdings is wholly owned by Tong, through Shanghai Summit Pte Ltd. Tong’s other shareholdings include newly listed Viva Industrial Trust, Lippo Malls Indonesia Retail Trust, and OUE Commercial REIT.

On Feb 18, 5.1 million units of Suntec REIT were acquired by Wealthy Fountain, bringing Tong’s indirect stake to 114.4 million units, or 5.04% of the REIT. With that transaction, he is now the second-largest shareholder of Suntec REIT, after Suntec City Development.

Suntec REIT recently broke ground at its North Sydney asset on 177 Pacific Highway, where construction had begun on a 31-storey commercial tower. The Grade A commercial space is expected to be North Sydney’s first new commercial tower in six years. With an estimated A$413.2 million ($472 million) price tag to build, the tower is expected to be completed in early 2016. 177 Pacific Highway, which will offer a net lettable area of 423,915 sq ft, has been fully pre-committed, with Australian property development group Leighton Group taking the head lease of 76% of the total net lettable area.

For its FY2013 results released on Jan 23, Suntec REIT reported a 9% decrease in net property income to $148.7 million, and a 0.9% decrease in distributable income to $211.2 million. The decrease was due the partial closure of Suntec City mall, which is undergoing asset enhancement, mitigated by the positive rental reversions from Suntec City Office and Park Mall Office during the year. Distribution per unit was 9.3 cents, 1.7% lower than that for FY2012.

On Feb 19, 502,000 units of Soilbuild Bizspace REIT were acquired by Wealthy Fountain. Tong’s indirect stake in the REIT, which specialises in industrial business parks, now stands at 48.7 million units, or 6.04% of the REIT, making him the thirdlargest unitholder.

Soilbuild Bizspace REIT was listed on the Mainboard of the SGX last Aug 16, with a 3.2 million sq ft portfolio of business parks, multi-user factories and single-user factories valued at $935 million. It has the right of first refusal to four assets from Soilbuild Construction Group, the first of which is expected to be acquired in 2015.

For 4QFY2013, Soilbuild Bizspace REIT announced a 1.51-cent DPU, 3.4% higher than forecast figures in its IPO prospectus. Its net property income of $13.7 million and distributable income of $12.2 million were, respectively, 2.1% and 2.5% above IPO forecasts. The group’s overall portfolio occupancy rate rose 0.1 percentage point to 99.9%, owing to the expansion of an existing tenant at its Eightrium business park. Seventeen per cent of the group’s net lettable area is due for renewal in 2014 and about 47% of that has been pre-committed, with the rest under negotiations. Soilbuild’s management told reporters on Jan 23 that rental reversions for the year are expected to be positive as current spot rentals were signed in 2010 and are below the current market rate.

Tong’s latest transaction was on Feb 21, where 8.2 million units of Cambridge Industrial Trust were acquired on his behalf by Wealthy Fountain. Now, Tong has an indirect stake of 103.8 million units, or 8.32% of Cambridge Industrial Trust, and is the single-largest unitholder.

CIT owns a portfolio of 47 properties with a total gross floor area of approximately 7.6 million sq ft, valued at $1.2 million. The properties range from logistics and warehousing to light industrial, and are located close to major transportation hubs and in key industrial zones throughout Singapore.

For FY2013, CIT announced a DPU of 4.976 cents, compared with the 4.784 cents announced in FY2012. Net property income rose 5.5% to $80.4 million, while distributable income rose 6.4% y-o-y to $61.3 million. The trust completed four acquisitions worth $92.7 million and started two asset enhancement initiatives valued at $58.2 million that will complete in 4Q2014. Its $32 million proposed acquisition of 11 Chang Charn Road, a 97,546 sq ft six-storey, purpose-built warehouse and light industrial building located in Bukit Merah, is expected to be completed by 1Q2014.

[DP28]

I read this article on BT front page this morning as well, I must say it was phrase it in bold "Foreginer's share of home purchase creeping up". If you didnt finish the entire article, I suspect people might have the misconecption that property prices are bottoming out..

The fact that new SKM plated cars are on the street and new properties are transacted represents a wealthy lot of cash rich people (foreigners especially) are in SG.

Some of my friends who came from HK 20 years ago are telling me Singapore is like 1998 of hong kong.. Everything just surge. properties, cars, medical.. etc. Whether we evolve into Hong kong today remains a ?. But hey HK is back by powerhouse China! just because some developers are beginning to reprice their stockpile, it begin to look attractive.

I am afraid afterall, its just a falling knife.

Maybe we are also "backed" by the Chinese. This is just one rich Chinese tycoon. Probably more will come and their money will flow to our real estates or real estate investment trusts....


From The Edge

Chinese billionaire Tong Jin Quan, the chairman of Shanghai- based Summit Property Development, saw his stakes in Singapore real estate investment trusts (REITs) grow in the month of February. Tong has been named the 35th richest man in China by Forbes, with a net worth of US$2.7 billion. Since Feb 18, shares in Suntec REIT, Soilbuild Business Space REIT and Cambridge Industrial Trust had been acquired on Tong’s behalf by Wealthy Fountain Holdings Inc. According to filings with the Singapore Exchange, Wealthy Fountain Holdings is wholly owned by Tong, through Shanghai Summit Pte Ltd. Tong’s other shareholdings include newly listed Viva Industrial Trust, Lippo Malls Indonesia Retail Trust, and OUE Commercial REIT.

On Feb 18, 5.1 million units of Suntec REIT were acquired by Wealthy Fountain, bringing Tong’s indirect stake to 114.4 million units, or 5.04% of the REIT. With that transaction, he is now the second-largest shareholder of Suntec REIT, after Suntec City Development.

Suntec REIT recently broke ground at its North Sydney asset on 177 Pacific Highway, where construction had begun on a 31-storey commercial tower. The Grade A commercial space is expected to be North Sydney’s first new commercial tower in six years. With an estimated A$413.2 million ($472 million) price tag to build, the tower is expected to be completed in early 2016. 177 Pacific Highway, which will offer a net lettable area of 423,915 sq ft, has been fully pre-committed, with Australian property development group Leighton Group taking the head lease of 76% of the total net lettable area.

For its FY2013 results released on Jan 23, Suntec REIT reported a 9% decrease in net property income to $148.7 million, and a 0.9% decrease in distributable income to $211.2 million. The decrease was due the partial closure of Suntec City mall, which is undergoing asset enhancement, mitigated by the positive rental reversions from Suntec City Office and Park Mall Office during the year. Distribution per unit was 9.3 cents, 1.7% lower than that for FY2012.

On Feb 19, 502,000 units of Soilbuild Bizspace REIT were acquired by Wealthy Fountain. Tong’s indirect stake in the REIT, which specialises in industrial business parks, now stands at 48.7 million units, or 6.04% of the REIT, making him the thirdlargest unitholder.

Soilbuild Bizspace REIT was listed on the Mainboard of the SGX last Aug 16, with a 3.2 million sq ft portfolio of business parks, multi-user factories and single-user factories valued at $935 million. It has the right of first refusal to four assets from Soilbuild Construction Group, the first of which is expected to be acquired in 2015.

For 4QFY2013, Soilbuild Bizspace REIT announced a 1.51-cent DPU, 3.4% higher than forecast figures in its IPO prospectus. Its net property income of $13.7 million and distributable income of $12.2 million were, respectively, 2.1% and 2.5% above IPO forecasts. The group’s overall portfolio occupancy rate rose 0.1 percentage point to 99.9%, owing to the expansion of an existing tenant at its Eightrium business park. Seventeen per cent of the group’s net lettable area is due for renewal in 2014 and about 47% of that has been pre-committed, with the rest under negotiations. Soilbuild’s management told reporters on Jan 23 that rental reversions for the year are expected to be positive as current spot rentals were signed in 2010 and are below the current market rate.

Tong’s latest transaction was on Feb 21, where 8.2 million units of Cambridge Industrial Trust were acquired on his behalf by Wealthy Fountain. Now, Tong has an indirect stake of 103.8 million units, or 8.32% of Cambridge Industrial Trust, and is the single-largest unitholder.

CIT owns a portfolio of 47 properties with a total gross floor area of approximately 7.6 million sq ft, valued at $1.2 million. The properties range from logistics and warehousing to light industrial, and are located close to major transportation hubs and in key industrial zones throughout Singapore.

For FY2013, CIT announced a DPU of 4.976 cents, compared with the 4.784 cents announced in FY2012. Net property income rose 5.5% to $80.4 million, while distributable income rose 6.4% y-o-y to $61.3 million. The trust completed four acquisitions worth $92.7 million and started two asset enhancement initiatives valued at $58.2 million that will complete in 4Q2014. Its $32 million proposed acquisition of 11 Chang Charn Road, a 97,546 sq ft six-storey, purpose-built warehouse and light industrial building located in Bukit Merah, is expected to be completed by 1Q2014.

I agree we do have alot of wealthy chinese in sg already, As to whethere more will come, I really dont think so.

If you do a screening, you will be able to find many local companies bought in lately by wealthy chinese, just to name a few- Pavillion holding former thai village bought in by Zheng fengwen (#327 forbes), best world international etc. The reason for their acquisition is simple. Sg small/mid cap P/E valuation is much attractive than china market. It is cheaper to buyout a company here and park their assets into the company and push it to China's P/E peer's valuation.. (An RTO sort of) But think again..

Why would they list their crown asset in Singapore and share it with locals? A lemon theory..
Will they pledge loyalty to Singapore in the event of macro meltdown? probably not? ..

Just my thought.. I still believe in LKY, we need to be independent in this globalised world, we cannot rely on anyone to save us.

[greengiraffe]

Price, rental data for JTC industrial sites at hand

Landlord posts data online to boost transparency as cost of space rises
Published on Apr 25, 2014 1:18 AM


JTC Aviation One @ Seletar Aerospace Park, a multi-tenanted facility that hosts firms dealing with the business aviation sector. Overall industrial rents went up 4.9 per cent in the first quarter over the same period a year earlier. -- PHOTO: JTC

By Chia Yan Min

INDUSTRIAL firms looking to rent or buy affordable space will have more market information at their fingertips under changes unveiled by landlord JTC.

The addition of the new data to JTC's website is a bid to boost transparency and help firms make more informed choices, JTC said.

The move follows debate over rising costs of industrial space - though the latest data shows both prices and rental rises moderated in the first three months of the year as more supply came in.

Tweaking its website, JTC has now posted data on median rentals and prices for various industrial sites - down to street level.

The data goes back three years.

JTC has also started breaking down quarterly statistics on price and rental trends by region, to allow for cost comparisons across different parts of the island.

Previously, only changes in the overall industrial price and rental indices were published.

''We wanted to provide more granular data... so industrialists can make comparisons and look for cheaper alternatives,'' said Mr Leong Hong Yew, the director of JTC's market planning division.

The new data shows some industrial space is more affordable.

The median rent for B1 multiple- user factory space - intended for light industrial use - in the western region was $25.88 per sq m in the first quarter, down 3.5 per cent over the same period last year, data out yesterday showed.

But median rent for this type of space in the east was $15.79 per sq m, up 10.3 per cent over last year.

Mr Nicholas Mak, head of research at SLP International Property Consultants, said the more detailed data is likely to be a boon to smaller industrial investors who find it hard to get market data. However, ''users of the data should also exercise caution'', as median prices often do not capture the variety of industrial properties and tenures on the market.

Yesterday's statistics also showed that the cost of industrial space continued to rise at a slower pace in the first quarter.

Overall industrial rents went up 4.9 per cent in the quarter over the same period a year earlier, and rose just 0.4 per cent over the preceding quarter.

Rentals of multiple-user factory space - the type most commonly used by small and mediumsized enterprises - were up 4.5 per cent in the quarter over last year, and rose 1.3 per cent over the preceding quarter.

Industrial rents rose 5 per cent last year, easing from jumps of 10.1 per cent in 2012 and 15.5 per cent in 2011.

The moderation in the cost of industrial space is expected to continue as more supply becomes available over the next three years, said Mr Leong. An average of 2.1 million sq m of industrial space is expected to become available every year for the next three years. This is about 4 per cent to 5 per cent of the existing stock of industrial space, and ''significantly higher'' than the average annual demand in the last three years.

Savills Singapore research head Alan Cheong said sales activity in the industrial property market has dipped owing to restructuring challenges faced by factories here.

The rental market is expected to become more active, as industrialists seek production space to capitalise on the improving global economic conditions.

However, burgeoning supply and rising costs are expected to keep a cap on rents, said Mr Cheong. ''Despite this, factories with large useable space for operations would command a premium, as these units have become less common in the market today.''

chiaym@sph.com.sg

[greengiraffe]

Demand for shop space drops in first quarter

Manpower costs and labour crunch may be to blame, say analysts
Published on Apr 26, 2014 1:09 AM


Softer demand for shop sites (above) drove up vacancy rate and depressed rentals in the first quarter. But if space for food and beverage, entertainment, and health and fitness purposes is included, the overall picture improves slightly. -- ST FILE PHOTO

Softer demand for shop sites (above) drove up vacancy rate and depressed rentals in the first quarter. But if space for food and beverage, entertainment, and health and fitness purposes is included, the overall picture improves slightly. -- ST FILE PHOTO

Softer demand for shop sites (above) drove up vacancy rate and depressed rentals in the first quarter. But if space for food and beverage, entertainment, and health and fitness purposes is included, the overall picture improves slightly. -- ST FILE PHOTO
Softer demand for shop sites drove up vacancy rate and depressed rentals in the first quarter. But if space for food and beverage (above), entertainment, and health and fitness purposes is included, the overall picture improves slightly. -- ST FILE PHOTO


By Melissa Tan

THERE was more demand from tenants for space to set up restaurants and gyms than shops in the first quarter - a possible sign that high labour costs are squeezing retailers.

New indicators from the Urban Redevelopment Authority yesterday showed that space used for food, entertainment and fitness had a lower vacancy rate than shop sites in the three months to March 31.

It suggests that some retailers could be shelving expansion plans due to high manpower costs and a labour crunch, say analysts.

Softer demand for shop space drove up vacancy rates and depressed rentals in the segment in the first quarter.

The shop space vacancy rate climbed to 6.3 per cent, up from 4.5 per cent in the previous quarter.

Shop rents also dipped 0.3 per cent in the first quarter, reversing a 0.1 per cent increase in the fourth quarter last year.

"With rising manpower costs being a continuing bugbear, retailers are exercising a measured approach in their expansionary plans and are stringent in selecting their next retail spaces," said Knight Frank research head Alice Tan.

She added that although pure shop rents have fallen overall, those at prime spots were still holding up.

These include ground floors of malls or basements of malls that are linked to an MRT or bus station, Ms Tan said.

The new URA figures on retail vacancies and rent do not include retail space used for food and beverage, entertainment or health and fitness purposes.

If these segments are included, the overall picture improves slightly.

The vacancy rate for overall retail space was 5.8 per cent in the first quarter, up on the 4.5 per cent level in the final three months of last year.

CBRE research head Desmond Sim noted that the vacancy rate went up in the first quarter because the stock of retail space expanded by 19,000 sq m, while the amount of occupied retail space shrank by 59,000 sq m.

This could be because some projects with retail components obtained their temporary occupation permits near the end of the quarter and therefore got added to the stock available.

However, the tenants may not have moved in yet, he said.

"The opening of shopping centres is increasingly being pushed back," he noted.

Some major tenants also closed their stores in the first quarter this year.

Even with the addition of other types of retail spaces, overall rents for the sector still slipped 0.3 per cent in the quarter from the preceding three months, an about-turn from a 0.2 per cent increase in the fourth quarter of last year.

Retail space prices remained unchanged in the first quarter this year, after rising 0.3 per cent in the fourth quarter last year.

The URA said yesterday that it decided to include food and beverage, entertainment and health and fitness spaces in its retail market statistics due to industry feedback.

It noted that these spaces have "grown significantly in recent years".

melissat@sph.com.sg

[greengiraffe]

City-fringe location keeps Bishan in strong demand
Published on Apr 26, 2014 1:10 AM


Last week's relaunch of CapitaLand's Sky Habitat in Bishan moved 80 units on the first day of sales at about $1,279 to $1,590 psf. -- ST PHOTO: ONG WEE JIN

By Cheryl Ong

A FLURRY of new launches in Bishan in the second half of last year generated healthy sales, but the cautious outlook pervading the property market is likely to cause prices in the area to moderate slightly, analysts said.

However, Bishan's city-fringe location is its strongest selling point, and the traditional high values of resale Housing Board flats in the area will likely ensure that buying demand from upgraders remains strong, noted Ms Chia Siew Chuin, director of research and advisory at Colliers International.

Popular projects in the area that went on the market last year included Thomson Three, Three 11 and Sky Vue.

Woh Hup's Three 11 is fully sold, according to data from the Urban Redevelopment Authority; the last unit at the 65-unit condo went for $1,368 per sq ft (psf) in December.

The 445-unit Thomson Three in Bright Hill Drive, developed by UOL, is 87 per cent sold. The median price was about $1,308 psf.

CapitaLand's project Sky Vue in Bishan Street 15 was launched last September at about $1,500 psf. It has sold about 71 per cent of its units at a median price of about $1,465 psf, said Ms Chia.

The latest project to launch new units was CapitaLand's other Bishan development Sky Habitat, which is next to Sky Vue. The 509-unit condo, first launched in April 2012, saw slow sales after its record high prices of $1,700 per sq ft (psf) grabbed headlines then.

Last week's relaunch moved 80 units on the first day of sales at about $1,279 to $1,590 psf - translating into a discount of about 10 to 15 per cent from its price two years ago.

"Any new project in Bishan in the near future will have to price itself relative to that of Sky Habitat and Sky Vue, as it seems this is the pricing which buyers find affordable and attractive," said Mr Ong Kah Seng, director of R'ST Research.

But this is not expected to have a drastic impact on neighbouring launches or resale condos, noted Ms Chia.

"The overall market dynamics and price trends will be considered when setting selling prices," she said.

In fact, prices of resale units in Bishan were "fairly resilient", said analysts.

Ms Chia noted that they rose 13.7 per cent from $950 psf in the fourth quarter of 2011 to $1,080 psf in the fourth quarter last year.

At Bishan Loft in Bishan Street 11, for instance, the median price of units rose from $1,000 to $1,216 psf in the same period, added Mr Ong.

Despite this, resale activity in Bishan has cooled off.

There were at least 20 transactions per quarter before 2013, but resale activity fell below 10 per quarter after that.

Mr Ong pointed out that the dip was in line with moderated buying interest across the island, and that prices in Bishan are "fairly high", which could cause buyers to be resistant.

"Investors should consider getting a unit here as it is an established central locality. More importantly, prices of new launches have been cut to better match affordability, and lowered prices means it's easier to achieve expected investment returns," he said.

ocheryl@sph.com.sg

[greengiraffe]

Private housing rental market seen being squeezed by 3 factors
They are record home completions, tighter inflow of expats, stricter property tax regime

BYKALPANA RASHIWALA
kalpana@sph.com.sg @KalpanaBT

THE private rental housing market is set to come under pressure on the back of record private home completions, a tighter inflow of expat tenants into Singapore and a stricter property tax regime - PHOTO: ST
application/pdf iconA few bright spots
Singapore
THE private rental housing market is set to come under pressure on the back of record private home completions, a tighter inflow of expat tenants into Singapore and a stricter property tax regime.
Latest official statistics show that private residential rents slipped for the second consecutive quarter - easing 0.7 per cent quarter on quarter in Q1 2014. This was a slightly bigger drop than the 0.5 per cent dip in Q4 last year.
"What we have seen so far are relatively modest drops, until we feel the full effects of the new supply completions," said JLL national director Ong Teck Hui.
The vacancy rate for completed private homes (excluding executive condominiums or ECs) increased to 6.6 per cent at end-Q1 2014, from 6.2 per cent at end-Q4 last year.
Based on estimates provided by developers to the Urban Redevelopment Authority (URA), private housing completions are projected to hit 17,138 units this year, including the 4,114 units completed in Q1. This will be higher than the 13,150 units completed last year and 10,329 units in 2012. The pace of completions is projected to accelerate further - to 21,738 units in 2015 and 26,252 units in 2016.
"Due to the step-up in Government Land Sales in the past few years in response to the heated residential segment, the number of units under construction has snowballed to 67,507 in Q1, double that of four years ago.
"The growth in new completions will not be matched by demand from tenants as hiring of foreign executives has been curbed with hardly any growth in employment pass figures," said Mr Ong. He estimates a 4-7 per cent decline in private residential rents this year.
Lee Lay Keng, regional head (SEA) research at DTZ, predicts an up to 5 per cent rental decline this year, with a bigger fall next year.
"The rental drop may be higher in the suburbs, where the bulk of supply completions will be. Moreover, rental units there will also face competition from rental HDB flats. However, high-end properties will not be spared either as higher property tax rates affect this segment more," she said. "From Jan 1, 2014, landlords can no longer claim vacancy refunds on property tax. So if you do not want to pay property taxes on an empty unit, and with heightened competition for tenants, you may be more flexible on rental levels if you're an investor."
Alan Cheong, research head at Savills Singapore, expects rents to ease 2-5 per cent in 2014, but reasons that investors who have bought private homes in the past two years have been subject to lower loan-to-value limits. Hence their mortgage payments may still be manageable despite softening rents. "So these buyers have stronger holding power, reducing the risk that they will be forced to sell their properties."
Another reason he does not expect a major price correction is the "elevated cost of production for developers" - in terms of construction costs and the high land prices they have paid. "In a normal functioning market, that is, short of a crisis, it is unrealistic to expect prices to 'collapse' or decline significantly."
Mr Cheong expects URA's overall private residential property price index to remain flat on a full-year basis. Despite the 1.3 per cent quarter-on-quarter drop in the first quarter, the index may rebound in subsequent quarters, depending on the type of projects that are launched, he added.
Most other property consultants predict a 5-10 per cent full-year price decline. Colliers International director Chia Siew Chuin said high-end homes will take a bigger price hit, to the tune of 10-15 per cent, given the odds stacked up against them - including weaker foreign buying, an anaemic leasing market and supply-side pressure from developers feeling the heat to meet regulatory deadlines to complete developing their projects and selling all the units.
The latest 1.3 per cent Q1 drop in URA's private home price index was steeper than the 0.9 per cent decline in the previous quarter.
Giving a breakdown of non-landed private home prices by region, URA said the sub-index for Core Central Region (CCR) slipped 1.1 per cent in Q1 - half the 2.1 per cent drop in the previous quarter.
Prices in Rest of Central Region (RCR) - which includes places such as Bukit Merah, Bishan and Geylang - eased 3.3 per cent in Q1, against a 0.4 per cent gain previously. In Outside Central Region (OCR) - home of mass-market condos - prices dipped 0.1 per cent in Q1 following a one per cent decline.
For both RCR and CCR, first-quarter prices of uncompleted units fell at a faster clip compared with completed properties. However, uncompleted homes in OCR rose 1.4 per cent, while completed unit prices fell 3.5 per cent.
URA's office price index rose 0.5 per cent in Q1, matching the increase in the previous quarter. Its office rental index appreciated at a stronger pace of 2.4 per cent, compared with the 0.5 per cent rise previously. Net new demand for office space decreased to 64,583 sq ft in Q1 from 322,917 sq ft in Q4, which sent the vacancy rate inching up to 10 per cent from 9.9 per cent.

[greengiraffe]

Wilshire condo in District 10 heading for sale en bloc
Published on Apr 28, 2014 1:04 AM



By Cheryl Ong

THE Wilshire condo in upscale District 10 has been put on the market in its maiden attempt at a collective sale.

The Straits Times understands that owners of the 20-unit development in Farrer Road were notified on Saturday that the sales committee had obtained the requisite 80 per cent consensus needed to put the condo up for sale en bloc.

Marketing agent Savills Singapore said 17 of 20 owners, representing 85 per cent of the condo's total share value and strata area, have given the go-ahead.

This comes as another District 10 condo - Spring Grove - obtained approval to go for a collective sale earlier this month. The 325-unit estate may hit the market at a reserve price of $1.14 billion, up from an earlier proposed reserve price of $1.045 billion, according to earlier reports.

The Wilshire has an indicative guide price of about $96 million to $98 million, or about $1,493 to $1,524 per sq ft (psf) per plot ratio (ppr), based on an allowable gross floor area of 64,310 sq ft, said Savills. The 30-year-old condo comprises three- and four-bedroom units, measuring 2,196 to 5,662 sq ft.

"With a price tag of less than $100 million, it will appeal to boutique developers seeking to design an iconic development of smaller-sized one and two-bedroom apartments with an affordable quantum," said Ms Suzie Mok, director of investment sales at Savills.

If a development charge of about $3.6 million is factored in to build an extra 10 per cent of balcony space, then the indicative land price of the site would be about $1,408 to $1,436 psf ppr. About 85 units measuring 753 sq ft each can be developed on the site, with breakeven costs estimated at between $2,000 and $2,100 psf, noted Savills.

Other developments that surround the Wilshire condo include CapitaLand's D'Leedon and GuocoLand's Leedon Residence, which are under construction. Singapore Land's upcoming 106-unit condo Pollen & Bleu is also expected to launch in the next two months. The condo is near popular haunts like Holland Village and Dempsey Hill.

Knight Frank research head Alice Tan said the high-end residential market has been sluggish, causing the en bloc market to be quiet in the past year.

Sales at many condos in the city centre have been slow because of their higher prices, and developers have been more cautious in their land bids as a result, noted OrangeTee research head Christine Li. But she added that the low overall price of the site could attract smaller developers that have been muscled out of the Government Land Sales programme.

ocheryl@sph.com.sg

[greengiraffe]

PUBLISHED APRIL 29, 2014
Land prices expected to ease this year, say analysts

Developers turning more cautious as home prices and sales volumes fall
BYLYNETTE KHOO
lynkhoo@sph.com.sg @LynetteKhooBT

Cooling: New home prices may fall 5% and deals by 20% this year, DBS Research predicts. - FILE PHOTO

[SINGAPORE] With home prices slipping, sales volumes waning and more supply coming onstream, land bidding is starting to reflect developers' cautious mood.
Singapore land prices are expected to soften this year, as developers restock their land bank in a conservative fashion with an eye on net margins - which analysts are expecting to hover around 10 per cent this year based on residential launch prices.
"This could present a turning point in the once-red hot land market," BNP Paribas analyst Chong Kang Ho said. "Our view is that the land market could soften further in the second half of 2014 with developers turning more cautious, especially if home prices fall further and new launches continue to stagnate."
DBS Research analyst Lock Mun Yee said that she expects land bidding prices to "reflect where selling prices will trend towards".
New home prices could fall by 5 per cent this year while sale transactions may shrink by 20 per cent compared to last year, Ms Lock predicts.
It is not only the new launches that are facing downward pressures. Last month, prices of completed condos fell 1.1 per cent month on month, going by the Singapore Residential Price Index released by the NUS yesterday, which is based on a basket that tracks the month-on-month price movements of private homes.
Developers that have already purchased land from the Government Land Sales programme could see their net margins staying at 9-10 per cent, down from 24 per cent in 2012, Mr Chong said.
Margin compression is holding developers back from aggressive land bidding now.
An analysis of winning bids by BNP Paribas shows that the margin buffers - the difference between the prevailing price of launches in the vicinity and the development costs of the land - has widened, suggesting that the developer wants more cushion from the risk of lower selling prices.
A case in point is the recent winning bid for the 99-year leasehold site at Prince Charles Crescent (Parcel B), which has a margin buffer of about 16.7 per cent above the historical mean of 11.9 per cent, BNP Paribas estimates.
Foreign developers have often been blamed for bidding up land prices.
BNP Paribas' analysis shows that foreign developers are indeed more aggressive in their bids. They have a smaller margin buffer of 10.6 per cent than the overall market sample of 11.9 per cent on average, while their winning bid premium over the median bid also tends to be higher at 20.2 per cent compared to the total sample mean of 17.8 per cent.
Chinese developer Kingsford, for instance, secured two sites in Upper Serangoon last December at a bid premium of 23-27 per cent over the median bids.
According to SLP International, foreign players' participation rate has increased to 26 per cent last year from 8 per cent in 2009, mainly bolstered by the entry of Chinese developers that tend to favour executive condominium (EC) sites.
The average land costs of EC sites have risen to $330 psf last year from $270 psf in 2011, BNP Paribas' Mr Chong said.
During this period, EC launch prices also increased to $800 psf, up from $700-750 psf.
With the "potential bottoming-out process in the land market", well-capitalised developers such as CapitaLand, Keppel Land and City Developments have the opportunity to restock their depleting land bank at lower prices, Mr Chong said.
Non-traditional developers that include niche boutique Singapore developers, construction firms and foreign developers saw their share of winning land bids rise from 18.3 per cent in 2009 to 71.5 per cent last year.
This has fallen to 63 per cent year-to-date, reflecting easing competition for land, he said.

[yawnyawn]

Growing land supply likely to cool home market in Hong Kong
HK home-seekers likely to postpone buying as construction starts on new flats hit record

Yvonne Liu yvonne.liu@scmp.com
PUBLISHED : Saturday, 26 April, 2014, 1:22am
UPDATED : Saturday, 26 April, 2014, 1:22am

Government measures to cool the property market by increasing land supply are starting to bite, with construction starts on new flats reaching the highest level since 2004 even as fewer people are taking out mortgages for new flats.

Statistics from the Transport and Housing Bureau showed construction work on 8,000 flats started in the first quarter, the highest level since research began in 2004. It was also more than double the 3,500 flats recorded in the fourth quarter of last year.

"This will dampen buying interest in the short run. Home-seekers would postpone buying plans as they will expect property prices to drop when the new housing supply increases significantly," said Chau Kwong-wing, a professor at the department of real estate and construction at the University of Hong Kong.

Including the unsold units in completed projects, units under construction and units cleared by the Buildings Department, an estimated 72,000 flats will be available for sale in the next three to four years. "Unsold units in completed projects have risen to 6,000. That won't affect the prices of second-hand flats for now. But once the number crosses 10,000, it will affect land prices in the New Territories," said Wong Leung-sing, an associate director of research at Centaline Property Agency. In the long term, Chau said any price movement would depend on whether the government was able to replenish developers' land bank and flats under construction would stay at the current level.

[Image: 4vpfdo4.jpg]

There has been a surge in flats under construction because the government has boosted land supply in recent years. "That's not because the government has more sites for sale. It's because it has sped up land sales. It is now having difficulty rezoning sites for residential use. If it is unable to replenish the land bank, it will be difficult to maintain the current high levels of housing and land supply, and property prices won't drop," Chau said.

Meanwhile, the Hong Kong Monetary Authority announced yesterday mortgage loans approved in March grew 23.7 per cent from February to HK$19.3 billion. But mortgage financing of new flats fell 2.3 per cent to HK$5.7 billion. The number of home loans currently in negative equity rose from 26 in the fourth quarter to 81 in the first quarter.

http://www.scmp.com/property/hong-kong-c...-hong-kong