(E) Foreign interest in commercial buildings in Singapore
(E.1) One Phillip Street - Foreign interest in Singapore’s commercial buildings
Lippo unit Auric Pacific has sold One Phillip Street in the Raffles Place area to UK-based New Star International Property Fund for $99.02 million or $2,736 per square foot of the 999-year leasehold building's net lettable area (NLA).
Auric's selling price is about 2.6 times the $37.6 million it paid for the 16-storey building about two years ago when it bought the property from Kewalram Group, which in 1996 bought the same building from Lippon for $76.8 million.
New Star’s first major acquisition in Singapore was Parakou Building - a freehold office block at the corner of Robinson Road and McCallum Street last May for $128 million or $2,013 psf of NLA.
(F) News on Government Land Sale (GLS) Programme
The record take-up rate of ready-built industrial properties has prompted developers to bid keenly for industrial sites at the recent GLS tender exercises. Likewise, tenders for state-owned properties for residential uses were also exciting in February 2008.
(F.1) $14m bid triggers tender of Ubi industrial site
A 60-year leasehold industrial site at the corner of Ubi Avenue 4 and Ubi Road 2 will be released for public tender by the Urban Redevelopment Authority (URA).
The site was originally in the reserved list, which means it will not be released for sale until someone commits to purchasing it for at least the reserved price. However, URA has received a bid of $14 million, or $51.98 psf ppr from a developer whose name was not disclosed. With the minimum bid, the site has been unlocked for public tender.
The 134.663 sq ft plot is zoned for Business 1 use which can be developed for a range of clean and light industries.
(F.2) Industrial sites receive higher bids
Reflecting a growing interest in industrial property and defying the lull in residential property segment, a 60-year leasehold 92,870 sq ft reserve industrial site at Playfair Road off Paya Lebar Road attracted 12 bids at the close of a URA tender exercise.
Sim Lian Development unit Trio Link Development emerged with the top bid of $33 million or $142 per square foot per plot ratio (psf ppr). The winning bid has set the new record price for such a site in the Ubi/Paya Lebar/Eunos area.
The plot is zoned Business 1, which include a range of clean and light industries. It is within a few minutes' walk from Upper Paya Lebar MRT Station.
(F.3) More black-and-white conservation bungalows for rental
Singapore Land Authority (SLA) is offering more state-owned black-and-white conservation properties including four bungalows and two semi-detached houses in Seletar, Sembawang and Lornie Road for rent via bidding at the end of this month. The rents start at $1,800 a month for a semi-detached house and between $3,400 and $6,600 for the bungalows.
The response to the previous round of bidding in January was very encouraging as 75 bids were received for five residential properties comprising two black-and-white bungalows and three apartments.
SLA currently manages about 2,360 residential state properties and will progressively place those with available tenancies for at least two years on the opening bidding system. Eight more similar properties will be up for rent in March and about 36 apartment units in total by the first half of this year.
(F.4) Quick take-up rate for state-owned apartments
The quick take-up rate for state-owned apartments put for tender suggests that the rental market is not about to relent, regardless of the current global economic uncertainties. Certainly, the parties in Singapore are far from over.
Last month, the SLA rented out three apartments in Clemenceau Avenue North at between $1,856 and $2,500; and two more bungalows in Alexandra Road and Dover were let for $20,258 and $15,100. The successful rents of between $1,856 and $2,500 to secure the Clemenceau Avenue lease were actually double the SLA’s guide rents of $960 to $1,110.
The SLA will release more such apartments in popular areas such as Sembawang, Alexandra Park, Adams Park, Telok Blangah, Bukit Timah and Woodleigh Park.
(F.5) China firm puts in top bid for Bishan HDB site
China-based builder Qingdao Construction Group Corporation pips two rival construction firms with the winning bid of $135,888,777 or $237 per square per plot ratio (psf ppr) for the third Housing and Development Board (HDB) Design, Build and Sell Scheme (DBSS) site in Bishan.
The second DBSS site, City View @ Boon Keng received overwhelming response when it was launched in May 2007. The units were sold at an average of $520 psf. In view of a better location, the eventual launch price of the Bishan development could be around $550 psf.
(G) News on HDB Resale Market
(G.1) Close to ten thousand applications swamped 278 new flats
The Housing and Development Board (HDB) has received 9,900 applications for 278 flats offered in its February bi-monthly sale. Most of the units offered are four-room flats, plus 64 five-room units and 20 executive flats in 13 estates. There are 119 units in Toa Payoh and 39 in Tampines.
In bid to allay the fear that prices for resale flats may become out of reach, HDB said that last month 25% of resale transactions were completed at prices no more than $10,000 above valuation. (19 Feb)
(G.2) Summary of HDB resale transactions for February 2008
Overall transactions of resale HDB flats dipped a little in February 2008 due to the long Chinese New Year holidays. The Woodlands estate continued to dominate the resale volume with 213 resale flats transacted in February 2008. It also topped the resale chart in January 2008 with 200 transactions and in December 2007 with 197 resale transactions.
Resale volume of 5-room and the large Executive flats was lower by 102 units or 1.66% and 46 units or 1.18% respectively, probably due to higher cash-over-valuation (COV) demanded by sellers. Besides with private condo sale dropping significantly and with the prospect of more new ready-built (units with Temporary Occupation Permit issued by the Building Control Authority) to be available soon, there has been no real urgency for prospective buyers to rush into the resale market. In other words, the market is calmer now though the economic fundamentals [i.e. full employment, wage increases etc] remain strong.
The demand for HDB resale flats will manifest itself when the asking prices are more realistic when a clearer picture of the global situation avails itself. More buyers would opt for larger flats to so as to shield themselves from the ongoing inflation. [See February 2008 HDB resale transactions in Annex D]
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