Low Keng Huat (Singapore)

[yawnyawn]

http://infopub.sgx.com/FileOpen/20140708...eID=304571

Total price paid $141.27m is more than double expected S$60.3m back in 2007. PPR land costs worked out to be S$1571 psf for a mixed commercial / residential development.

Is it fair?

Vested
GG



Old article - http://www.stproperty.sg/articles-proper...le/a/50804

INVESTORS looking for hotel development sites have just been given a choice of three properties in the Balestier/Lavender area.

The Urban Redevelopment Authority (URA) yesterday made available for application a 99-year leasehold reserve list site at Jellicoe Road opposite Lavender MRT Station.

And the freehold Ruby Plaza and adjoining Balestier Towers are being offered for collective sale.

Realtorhub Real Estate, which is marketing the two adjoining properties through separate sale exercises, said the joint owners expect bids above $670 per square foot of potential gross floor area.

Based on this unit land price, the price for Ruby Plaza would be at least $79 million and that for Balestier Towers at least $60.3 million.

Ruby Plaza is on a 39,493 sq ft site and Balestier Towers on 29,986 sq ft. Both sites are zoned for commercial and residential use with a 3.0 plot ratio - the ratio of maximum potential gross floor area to land area - under Master Plan 2003.

Ruby Plaza has received outline planning permission for hotel use and Realtorhub believes the same permission will probably be given for Balestier Towers.

Realtorhub director Daniel Ng believes developers could also seek URA permission to redevelop the sites into a medical centre, to capitalise on strong demand for such space.

As for the 45,408 sq ft hotel site at Jellicoe Road being offered by URA, CB Richard Ellis executive director Li Hiaw Ho reckons it can be developed into a hotel with about 400 rooms.

He estimates the site could fetch slightly more than $420 psf per plot ratio achieved for the tender of URA hotel site at Belilios Road this week.

This is because the Jellicoe Road plot has a better location and easy access to the MRT.

Two Redevelopment Sites at Balestier and Pasir Panjang Sold for $92,300,000 and $13,230,000
21 December 2012

Knight Frank Singapore is pleased to announce the sale of Leong On Building, a mixed use Commercial and Residential redevelopment site located at 520 Balestier Road, to Techkon Development (Sembawang) Pte Ltd at $92,300,000, as well as the sale of a residential redevelopment site at 241 Pasir Panjang Road at $13,230,000 to Ley Choon Development Pte Ltd, a subsidiary of Ley Choon Group Holdings Limited.

520 Balestier Road
The subject property is a family-held asset which was put up for sale by public tender which closed on 13 Dec 2012. Knight Frank was appointed as the sole marketing agent by the family to advise on the divestment and to market the property for sale.

“Techkon Development emerged the winner in a keenly contested tender. The tender received overwhelming response and closed with several parties offering above $75 million. The property generated very strong interest due its prominent location next to the upcoming integrated hotel-park development at Zhongshan Park as well as the flexibility offered to prospective purchasers in terms of the commercial and residential mix in the new development,” says Mr Ian Loh, Director & Head of Investment, Knight Frank.

The sale follows closely the successful sale of another mixed-use Commercial and Residential redevelopment site at 71 & 73 Oxley Rise which was sold to Oxley Rise Pte Ltd for $130 million just a few weeks ago, also brokered by Knight Frank Pte Ltd.

Leong On Building has a land area of 1,971.3 sq m (approx. 21,219 sq ft). Under the 2008 Master Plan, the site is designated as “Commercial and Residential” with a Gross Plot Ratio (GPR) of 3.0. At GPR of 3.0, the potential Gross Floor Area (GFA) is approximately 5,913.9 sq. m (approx. 63,657 sq ft). In-principle approval from Singapore Land Authority has been obtained to amalgamate the subject property with an adjoining State land lot of approximately 830 sq ft.

The subject property is located within the Balestier area, an estate rich in heritage value and which is undergoing rejuvenation and transformation to become an exciting area for business, leisure and entertainment. The location is also in close proximity to the commercial, retail and medical hubs at Novena and Orchard Road. The subject site is situated approximately 650 metres to Toa Payoh and Novena MRT stations. In addition, it is well served by major roads such as Pan Island Expressway (PIE) and Central Expressway (CTE), providing excellent connectivity to the rest of the island. The Central Business District at Raffles Place and Marina Bay is a short 15 minutes’ drive away.

On site is an existing 6-storey industrial building built in the 1970s. The property is a family-held asset and as such no Strata Titles Board approval is required.

“The successful sale price of $92,300,000 translates to an equivalent land rate of approximately $1,470 to $1,498 psf per plot ratio (psf/pr) depending on the mix of Commercial and Residential quantum proposed, after factoring in an estimated development charge at prevailing rates. If an additional 10% balcony area for the residential component is included, and after factoring in the potential alienation of an adjoining State land, it translates to about $1,376 to $1,385 psf ppr,” says Mr Loh.

“There has been a total of 4 mixed-use Commercial and Residential redevelopment sites sold this year. They include Leong On Building at $92.3 million, 71 & 73 Oxley Rise at $130 million in November and McDonald’s Place at $150 million in April, which were all brokered by Knight Frank. Such mixed-use sites are popular as strata retail shops have been selling very well in recent months. For instance, commercial units at the nearby One Dusun Residences have been transacted at approximately $4,300 to $8,000 psf, retail shops at Bugis Cube have fetched prices of approximately $2,900 to $6,900 psf, and retail units at Oxley Tower have fetched prices of up to $8,600 psf,” he adds.

http://www.knightfrank.com.sg/news/two-r...01370.aspx


Year 2014 LKH - $1571 psf
Year 2012 Leong On Building(now VIIO@Balestier) - $1470-$1498 psf, before adding in balcony space.

Price difference psf is +/- 7% and although it is not dirt cheap, but it is a reasonable price given that there is now a "Health City Novena" being planned by the government here. I see that this plot of land is eastwards of the proposed National Skin Centre's expansion and National Healthcare Group's HQ. Strata-titled retail space is likely to be red-hot here given the increased amount of people working here from 2020 onwards.

A rough estimate of the profitability of this project can be derived from the response of VIIO@Balestier which should be launching very soon.

Vested

[Image: GszTeUu.jpg]

[greengiraffe]

Thanks for the detailed analysis.

GG

[greengiraffe]

New hotel surge to hurt returns in Perth
Larry Schlesinger
419 words
25 Jul 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
A surge in new hotel projects will dampen returns for Perth hotel owners and operators over the next two years, according to Deloitte.

In its latest Tourism and Hotel Outlook report, Deloitte forecasts a fall of 5 percentage points in Perth occupancy rates from 84.8 to 79.8 per cent between now and 2016 as more than 2000 rooms are added to the market.

Perth room rate rises will be modest – forecast at 2.5 per cent per annum – meaning hotel room revenue (revPAR) will fall over this time. "The heat has come out of the Perth market. ­Supply is forecast to be greater than demand," said Lachlan Smirl, head of tourism and hotels at Deloitte.

The period of weakness could extend beyond 2016 with more projects on the horizon. Hong Kong-based Langham Hotels is eyeing a new five-star hotel in Perth and Singapore's ­SilverNeedle Hospitality is set to announce a second Sage Hotel to be built in west Perth.

Conditions are forecast to be softer in Brisbane, also the location of many new hotel projects, as resources investment activity tapers. Deloitte has identified 70 medium-term hotel projects, which will add 9900 rooms. More than a fifth of these will be in Perth.

Apart from the weaker mining cities including Darwin, the overall outlook for the hotel sector is strong after record growth in overseas visitor numbers, which surged 8.2 per cent over the year to May, the fastest rate of growth in nearly a decade.

Deloitte is forecasting occupancy rates to rise 2 percentage points to 70 per cent over the next two years and room rates to rise 3.5 per cent per annum. This translates into revPAR growth of 4.5 per cent per annum, ­outperforming the hotel market's ­10-year average.

Sydney and Melbourne CBD hotels are the primary beneficiaries of rising overseas holidaymaker numbers and are the cities of choice for Asian visitors, especially from China.

"The outlook shows hotel occupancies in Sydney and Melbourne closed in on 90 per cent with the cities' hotels at or near capacity several nights a week, and room rates and revPAR growing at twice their decade average," said Mr Smirl.

"Despite some high-profile projects across the two markets, supply growth will continue to trail demand over the next three years, pushing occupancies further into unchartered territory and propelling RevPAR at rates considerably above their trend averages," he said.


Fairfax Media Management Pty Limited

Document AFNR000020140724ea7p00002

[Greenrookie]

I am not sure if any buddies has done this, but I tried to worked out the recurring income LKH could generated from westgate tower, PL retail and the hotel management

It turn out that the income generated equals to be about 3 cents per shares, enough to pay dividends and excluding development and construction income.

Westgate:

40% share of 305,000 sq ft.
assume $6 psf/mth, 85% occupancy
7.5 mio per year

PL retail:

55% of 88200 sg ft NLA
assume $20 psf and 85% occupancy
=9.8 mio

Vietnam hotel operations: 6 mio per year

NOt sure what LKH want to do with Balestiar Towers, so not in calculation

[NTL]

I am not sure if any buddies has done this, but I tried to worked out the recurring income LKH could generated from westgate tower, PL retail and the hotel management

It turn out that the income generated equals to be about 3 cents per shares, enough to pay dividends and excluding development and construction income.

Westgate:

40% share of 305,000 sq ft.
assume $6 psf/mth, 85% occupancy
7.5 mio per year

PL retail:

55% of 88200 sg ft NLA
assume $20 psf and 85% occupancy
=9.8 mio

Vietnam hotel operations: 6 mio per year

NOt sure what LKH want to do with Balestiar Towers, so not in calculation

How about management and maintenance cost? It's already net-net in the calculation?

Thanks.

[Greenrookie]

Hi NTL,

It's not net net, hotels I used the lowest av of NP over the past decade.
As for rental income, I think I am conservative enough..

It's a rough estimate

[greengiraffe]

LKH appears to have made good call buying over WestGate from you know who... given that local office market appears to be the only bright spot left. Once WestGate TOP - don't be surprised that some units will be sold given that there are 2 subsidiaries being incorporated to hold WestGate.

PL Sq retail is their attempts to recycle their development gains from sale of offices into recurrent income stream - helps towards meeting 3 cents ordinary dividends.

The main development left is the strata title at Kismis Lodge and Balestier Towers. Both landbank bought at fair value hence can be quite a challenge.

However, Kismis Lodge apparently is only restricted by height while Balestier Towers is sitting next to the emerging Novena health hub.

LKH's JB landbank meanwhile will have to depend on local demand given the recent toll hike at the causeway and the ever greying local property rules - doubt foreigners will be buying like a few years ago...

LKH should be ok but further earnings growth will be dependent on macro outlook.

Vested
Reduced Exposure
GG

[greengiraffe]

Will LKH's Kismis redevelopment be adversely affected?

http://www.businesstimes.com.sg/premium/...s-20140823

PUBLISHED AUGUST 23, 2014
Cluster home projects to have fewer units

Property consultants say this tweak to URA's guidelines will lower the appeal of strata-landed sites for developers
BYLYNETTE KHOO
lynkhoo@sph.com.sg @LynetteKhooBT

The Urban Redevelopment Authority (URA) has fine-tuned its guidelines for cluster housing to address growing concerns of overcrowding in some landed estates - PHOTO: SPH
THE Urban Redevelopment Authority (URA) has fine-tuned its guidelines for cluster housing to address growing concerns of overcrowding in some landed estates.
A new set of formulae to determine the maximum number of units for the various types of cluster housing, known as strata-landed homes, will significantly lower the number of units in new projects.
Another change is that developers will be required to set aside more land for communal facilities and greenery in such developments - at least 45 per cent of the land area, up from the current 30 per cent; at least a quarter of the land area has to be set aside for on-the-ground greenery.
The revised guidelines take effect today, said the URA yesterday.
Strata-landed housing is a form of landed housing that comes with strata titles and combines the experience of living on a landed property with communal facilities and greenery like those available in private condominiums.
There has been growing clamour about overcrowding from residents in estates like Toh Estate and Telok Kurau Estate.
There, developers have injected a large number of small units into the project, and traffic and parking problems have surfaced.
Nicholas Mak, the executive director at SLP International, said the new guidelines will greatly reduce the number of detached, semi-detached and terrance houses in strata-landed housing developments; the impact will be smaller on the number of good-class bungalows.
DTZ regional head of research Lee Lay Keng said the new guidelines will adversely affect developers who have bought a site for which they have yet to receive planning permission.
"For potential collective sale sites, the land value will be revised downwards because the development potential will now be lower," she added.
"Accordingly, developers exploring strata landed housing projects will adjust their offer prices downwards," she said.
One land parcel now up for collective sale is that of Kheam Hock Gardens off Dunearn Road, which has a reserve price of S$59 million or S$1,430 per sq ft.
Under the new guidelines, the maximum number of terrace units a developer can build there has come down from 25 to 15, said Galven Tan, the director for investment properties at CBRE, the site's sole and exclusive marketing agent.
If the developer chooses to build good-class bungalows, the maximum allowable units is down to seven, from nine previously.
But he said he believed that the net impact of the new guidelines was likely to be neutral; though developers can build fewer units on the plot, the enhanced living quality that comes with lower density may engender better sales at the new project, he said.
He disclosed that a few serious parties were looking at the site, including listed and non-listed developers, along with a couple of high net-worth individuals looking to build a single home on the site.
Christine Li, the head of research and consultancy at OrangeTee, observed that there have been instances in the past when developers could inject more strata-landed homes on a plot than they would have been able to with condominium units, because of the guidelines on condo development.
"Going forward, strata-landed sites may become less attractive than conventional landed sites," she said.
"Now, there is not much incentive to build strata-landed homes as the profit margin will be greatly reduced, unless land price comes down substantially," she added.

[greengiraffe]

LKH owns 40% of Westgate Office

http://www.businesstimes.com.sg/real-est...gate-tower

CPG inks 83,000 sq ft lease at Westgate Tower
By
Kalpana Rashiwalakalpana@sph.com.sg@KalpanaBT
BT_20141020_KROFFICE20_1327134.jpg Westgate Tower received Temporary Occupation Permit earlier this month. Including the CPG lease, about 60 per cent of Westgate Tower is leased
20 Oct5:50 AM
Singapore

IN THE biggest office leasing deal for a new suburban project so far this year, CPG Corporation has taken a lease of 83,000 sq ft at Westgate Tower next to Jurong East MRT Station. The group will move out from Novena Square, where it occupies its present office of about 80,000

[BlueKelah]

LKH owns 40% of Westgate Office

http://www.businesstimes.com.sg/real-est...gate-tower

CPG inks 83,000 sq ft lease at Westgate Tower
By
Kalpana Rashiwalakalpana@sph.com.sg@KalpanaBT
BT_20141020_KROFFICE20_1327134.jpg Westgate Tower received Temporary Occupation Permit earlier this month. Including the CPG lease, about 60 per cent of Westgate Tower is leased
20 Oct5:50 AM
Singapore

IN THE biggest office leasing deal for a new suburban project so far this year, CPG Corporation has taken a lease of 83,000 sq ft at Westgate Tower next to Jurong East MRT Station. The group will move out from Novena Square, where it occupies its present office of about 80,000

Low Keng Huat slowly locking in recurring income, at 60% rented out, its a recurring income of ~0.77 cents/year from Westgate for LKH.