Biz Times: Prices of good class bungalows still going up, but volume falls

Prices of good class bungalows still going up, but volume falls

25 deals done in H1 worth $440.65m, against 87 deals for 2007 worth $1.15b

 

THE volume of transactions of good class bungalows (GCBs) may have fallen along with other property sectors but values have not.

 

A GCB is one that sits on designated land no smaller than 15,000 sq ft. And according to an analysis by CB Richard Ellis (CBRE), there were 25 GCB transaction in the first half of 2008.

 

While this may be a fraction of the 87 transactions in 2007, the total value for H1 2008 is already $440.65 million, almost 40 per cent of the total value for the whole of 2007 which saw $1.15 billion worth of deals.

 

There are several explanations for this, including the possibility that bigger GCBs were sold this year, but it also seems clear that prices have risen.

 

Upon closer analysis, CBRE found that some of the GCBs sold in 2008 had already changed hands once before in 2007. For instance, a house at Fifth Avenue was sold for $17.4 million in June 2007 and then sold again for $19.7 million in March this year – representing a gain of about 13 per cent.

 

Another house in Cluny Hill was sold in January 2007 for $15 million, re-sold six months later for $20.2 million and then sold again in May this year for $21.5 million.

 

CBRE director (luxury homes) Douglas Wong says: ‘There is still buying interest in the GCB market as it is always regarded as an attractive investment in the long term and/or for owner-occupation.’

 

This certainly seems to be supported by the fact that CBRE and Mr Wong handled possibly the biggest GCB deal ever done here – a house in Leedon Park which sold for $43.2 million in May, bought by a Singaporean.

 

That locals make up the bulk of GCB buyers is interesting as foreigners have been very much credited with bolstering the luxury non-landed sector. Mr Wong also believes that of the estimated 2,400 GCBs in Singapore, these are owned by a small pool of about 1,000 wealthy individuals, suggesting that many own more than one GCB.

 

In tracking GCB transactions, CBRE found that there were two recent ‘peaks’ in the sector. (CBRE defines ‘peak’ in terms of volume rather than price).

 

The first peak occurred in 1999, when 77 transactions were recorded after the property market bottomed out during the Asian financial crisis.

 

The second peak occurred in 2006 with 119 deals done following a protracted period of market stagnation from 2000 to 2004.

 

In 2006, the 119 GCBs were sold with transacted value totalling $1.225 billion, double the value in 1999.

 

On average, each GCB cost $9 million to $10 million. In comparison, at the bottom of the market in 2002, the average price of a GCB was $6 million to $7 million.

 

Of the 25 GCBs sold in H1 2008, about half were sold for over $15 million. Of these, six were sold for more than $20 million.

 

And as CBRE notes, luxury properties are often seen as a barometer of the health of the overall market. When there are signs of the market turning, GCBs and luxury apartments will reflect this first and post bigger gains ahead of the broader residential market.

 

So it is good news then that for the rest of the year, CBRE expects GCB prices to remain firm or even see a marginal upside.

 

Source: Business Times

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Rentals making gentle waves at Sentosa Cove

Rentals making gentle waves at Sentosa Cove

They could hold firm despite gloom elsewhere and offer decent yields

 

(SINGAPORE) Close to 300 homes at Sentosa Cove, including 200 condominium units, have received Temporary Occupation Permit (TOP) and the exclusive enclave is starting to bustle.

 

DTZ Debenham Tie Leung, which is the property manager of the 200-unit The Berth by the Cove says that the development is now about 70 per cent tenanted.

 

It added that the remaining units of the fully-sold development are owner-occupied, some of which are weekend homes or holiday homes for foreigners.

 

Other developments that have received TOP include The Berthside, Ocean 8, The Villas @ Sentosa Cove, Coral Island and North Cove.

 

Expected to come onto the leasing market next is the 116-unit The Azure, which is also fully sold.

 

And the popularity of The Berth by the Cove with the leasing market bodes well for the remaining 2,200 homes that are still being constructed.

 

DTZ senior director (research) Chua Chor Hoon said that the supply of new homes in Sentosa Cove is still ‘limited’ compared to the rest of Singapore and the units have ‘the unique feature of close proximity to the sea’.

 

Saying that the limited supply of units in Sentosa Cove will limit any downward pressure on rentals, Ms Chua added: ‘Rental prospects are likely to be better.’

 

This upbeat outlook for Sentosa Cove is particularly pertinent at a time when new housing supply is expected to flood the rental market by next year.

 

In a recent report, DTZ noted that in general, rentals would come under pressure between 2009 and 2011, not just from new supply but from the sub-sale market as well as it is unlikely that speculators will want to hold units for low rental income.

 

DTZ said that based on its basket of non-landed properties in the prime district (excluding luxury properties) average monthly rents are currently still holding steady at $4.90 psf per month.

 

While DTZ did not reveal rentals at The Berth by the Cove, a check with SISV-Realink shows that the rental for a unit there contracted for $19,500 per month in May.

 

Colliers International also said it believes median rentals could be around $6 psf per month.

 

Colliers director (research and advisory) Tay Huey Ying added that based on the average launch price of The Berth by the Cove of about $860 psf in 2004/2005, investors who bought units at this price could now be enjoying a net rental yield of about 5.5 per cent.

 

Those that bought units from the secondary market later when the price rose to about $1,500 psf will be looking at a net rental yield of 3.5 per cent.

 

‘Nevertheless, these investors would still be enjoying a higher net rental return compared to those who invested in a freehold luxury apartment on the main island of Singapore in recent times since the latter are generating average net rental returns estimated to be in the region of 2.3 per cent,’ added Ms Tay.

 

In time over 1,700 condominiums will be completed. Savills Singapore director (marketing and business development) Ku Swee Yong believes that buyers for most of these units will be investors, suggesting that a majority will be put up for lease.

 

Still, he said that there is a niche market for this type of waterfront home. ‘We had an expat client who was looking to rent and after showing him a few options, he chose The Berth because he already has a yacht,’ reveals Mr Ku.

 

Interestingly, Mr Ku says the advent of the integrated resort on Sentosa may not necessarily guarantee a pool of tenants. ‘Not everyone will want to live so close to work,’ he added.

 

What he does believe is crucial to the success of Sentosa Cove as an exclusive enclave is the provision of high end amenities. He added: ‘Once these are completed, we believe Sentosa Cove rents could demand a premium over Orchard Road.’

 

Source: Business Times

Sentosa rents soar

Sentosa rents soar

 

Construction not putting tenants off

 

SENTOSA Cove is slowly, but surely, attracting high-end tenants with the completion of an estimated 300 homes, including the 200-unit The Berth by the Cove condominium.

 

Despite ugly construction sites dotting many parts of Sentosa, the first luxury condo units and landed properties have drawn rents comparable to, if not higher than those in prime districts on the mainland, including Nassim Park and Grange Residences.

 

Colliers International has just completed its first rental survey of Sentosa Cove and says two-bedroom condos are fetching an average $5,350 a month, or $4.61 per square foot (psf).

 

Larger, four-bedroom units have rented for an average $10,625, which also equates to $4.61psf. However, one rented for $12,250.

 

As for landed homes, terrace houses ranging in size from 2,600 to 3,600 square feet have let for an average $15,333, or $5.19psf, while the first luxury bungalows ranging in size from 2,530 to 4,983 sq ft have been let for an average $24,000. The highest rental to date is $30,000.

 

“This is encouraging, given that so much construction is going on,” said Tay Huey Ying, Colliers director of research and advisory. “When fully-developed, it should be even more appealing to potential tenants.”

 

The idea of developing the 117-hectare cove into a waterfront enclave was first mooted in the ’80s. However, the first land parcel was only sold to the private sector in end-2003. Five years on, temporary occupation permits have been granted to just the first five small developments completed, with Ho Bee Group’ 200-unit The Berth being by far the largest.

 

More is to come, with land already sold capable of accommodating over 2,000 condo units and 400 bungalows or terrace homes.

 

Colliers said investors who bought units in The Berth at the end of 2004 or early 2005 and have held onto them are today enjoying attractive net rental yields of 5.5 per cent. Purchase prices have since surged. As such, Colliers said those who entered the market later in 2007 now have to contend with lower yields averaging at 3.5 per cent.

 

Prices of non-landed homes have shot up from an initial launch price of $785 per sq ft in November 2004 for The Berth to current $2,800psf for Lippo Group’s The Marina Collection.

 

Source: Today Newspaper

Leasing market in Sentosa Cove starting to pick up

Leasing market in Sentosa Cove starting to pick up

 

SINGAPORE : The leasing market in Sentosa Cove is starting to pick up, as more units are ready for occupation, according to property consultants Colliers International.

 

With some 300 units at Sentosa Cove having temporary occupation permits, Colliers said the leasing market could be starting to take shape.

 

Numbers from the Urban Redevelopment Authority showed that some 51 leasing contracts were recorded for homes there between January last year and April 2008. Forty-six of those went to The Berth by the Cove.

 

Some 99.6 per cent of land parcels for sale in Sentosa Cove has been taken up by private developers and individuals – in all yielding more than 2,000 condominium units, and 400 bungalows and terrace houses.

 

Contracted monthly gross rents are believed to range from S$4,700 for a two-bedroom unit to as high as S$12,250 for a four-bedroom unit in a condominium development.

 

Landed homes are believed to command between S$12,000 and S$30,000 per unit. – CNA/ms

 

Source: Channel NewsAsia

1989: Sole heir; 1996: Cut out of millions

1989: Sole heir; 1996: Cut out of millions 

Two sisters’ legal battle over mum’s contrasting wills splits siblings

 

A FIGHT in court between two sisters over the contrasting wills made by their late mother has split the family.

Ophthalmologist Caroline Chee Ka Lin, 47, the youngest of six siblings, says a 1996 will, which cuts her out of the inheritance, is invalid.

 

She wants the High Court to uphold the 1989 one which practically made her the sole heir of her mother’s estate.

 

But her sister Muriel Chee Mu Lin, 53, wants the court to declare the 1996 will as the true and last will of their mother, Madam Goh Hun Keong.

 

After Madam Goh’s death in 2004, Caroline started the legal process to settle the estate under the 1989 will, but was stopped from doing so by the legally-trained Muriel.

 

Last year, the court ordered Muriel to file the current suit to determine the validity of the 1996 will. The hearing opened yesterday.

 

Madam Goh, born in 1921, was an English teacher. But she quit teaching to invest in real estate shortly after marrying Dr Chee Siew Oon in 1945. The couple had seven children, among whom six are still alive.

 

At the time of her death, the matriarch owned several properties, the main one being a Holland Road house now worth about $13 million.

 

In 1995, she transferred a half-share in the house to Caroline and her husband at a ‘discounted’ price.

 

She made the 1989 will about a month after Dr Chee was incapacitated by a stroke. Apart from providing for his needs and the grandchildren’s education and giving $150,000 to one son, she left the rest of her estate to Caroline.

 

Seven years later, she made another will, this time giving Caroline an option to buy her half-share of the house. This will ordered that the sales proceeds, with the rest of her estate, be shared equally among Caroline’s five siblings.

 

The 1996 will cut Caroline out of the inheritance; Muriel, from getting nothing under the 1989 will, was now to get a one-fifth share of her mother’s assets.

 

Caroline is calling four doctors to testify that her mother was not mentally capable in 1996 of making the will, which she will claim was made apparently under Muriel’s influence.

 

Muriel is disputing the allegations.

 

The line has been drawn among the siblings: One brother will bat for Muriel, two brothers and a sister for Caroline.

 

Caroline’s lawyer Giam Chin Toon noted in his opening statement that the trio, who get nothing from the 1989 will, will testify against their interests.

 

Muriel’s lawyer Molly Lim argued that even with the later will, Caroline will get a larger share of the assets than her siblings, who each stand to inherit less than $2.5 million.

 

She noted that half the house was transferred to Caroline for $2.5 million. With the current value of the half-share at $6.5 million, she stands to gain $4 million from its sale.

 

Source: Straits Times

Is this S’pore’s most expensive house?

Is this S’pore’s most expensive house? 

 

Worth at least $120 million

 

The size of 92 five-room HDB flats

 

Owned by a prince

 

The mansion mired in a legal battle between the Brunei Sultan’s brother and the country’s national investment agency could well be Singapore’s most expensive residence.

Owned by Prince Jefri Bolkiah, the younger brother of Sultan Hassanal Bolkiah, Arwaa Mansion at 46B and 48 Nassim Road is said to be worth at least a jaw-dropping $120 million.

 

That figure for a home, even in land-scarce Singapore, is not something you hear about every day. Even property pundits that The Sunday Times spoke to were hard-pressed to think of a residential address that could fetch that kind of value.

 

There are only between 2,500 and 3,000 good-class bungalows with at least 15,070 sq ft of land area here.

 

Based on the Urban Redevelopment Authority’s numbers, the average cost of a good-class bungalow was $13.8 million last year.

 

What could possibly make the Brunei royal’s Nassim address worth that princely sum? Size, location, possibly even its pedigree ownership.

 

Industry observers believe that the palatial property, which stands on top of a hill, has such a staggering value because of its sheer size.

 

The mansion sits on a land area of about 110,000 sq ft. The area was the result of merging two pieces of property with different addresses. Imagine 92 five-room HDB flats combined.

 

‘It is part of Singapore’s most desirable and prestigious residential area,’ said Savills Singapore’s director of prestige homes Steven Ming.

 

‘But each property value is unique,’ he said.

 

And this none-too-humble villa is special because, well, it belongs to a prince.

 

‘You would assume that only good-quality stuff went in there, so there is a premium attached to it,’ said one industry pundit.

 

The mansion made news last Friday after it was reported that the Brunei Investment Agency, which manages the Brunei government’s General Reserve Fund and external assets, wants Singapore’s courts to get the 53-year-old prince to hand over the property.

 

Homes in the $100 million club are few and far between.

 

Said Credo Real Estate managing director Karamjit Singh: ‘Over the years, governments and corporations that have owned large properties have been selling them and they get re-developed and sub-divided. So such big properties are very rare.’

 

Property pundits say that large parcels still exist, owned mostly by the old rich or foreign governments to house their embassies.

 

‘Some are sitting on land that has been passed down for generations and it goes into the $100 million category because you can build 20 storeys on it,’ said Mr Ku Swee Yong, the director of business development and marketing for Savills.

 

He singled one out: Mitre Hotel in Killiney Road, which some have estimated could fetch $200 million for its nearly 40,000 sq ft of land. Its prime location and plot ratio mean it has good redevelopment potential.

 

Size isn’t the only thing that matters when it comes to how many zeroes go into a property’s value. In areas like Katong, property can fetch a premium since plot ratios there are higher than those in town, like in Nassim. That means more units can be built.

 

Dr Della Suantio Lee, the wife of Mr Lee Seng Gee, the eldest son of late philanthropist Lee Kong Chian, was said to have sold a 115,300 sq ft piece of property in Meyer Road to the Hong Leong Group for about $200 million last year.

 

Even fengshui plays a part, albeit a much smaller one.

 

‘Some wealthy Chinese businessmen will consider how wide the gate at a bungalow is, whether it’s sloping up or down or whether it faces a good house,’ said Mr Ku.

 

The palatial residence of Arwaa Mansion is certainly fit for a prince and comes with a suitably intimidating value. It was built by merging two pieces of property with different addresses. This photo shows the part of the mansion at 46B Nassim Road.

 

Source: Straits Times

For sale: 8 infill sites for housing use

For sale: 8 infill sites for housing use

 

THE Singapore Land Authority (SLA) said yesterday that it would sell eight infill sites for residential use. The sites will be offered at a public auction on Aug 21 at M Hotel in Anson Road. They will be sold with fresh 99-year leases.

 

The auction comes after one in November 2007 at which six infill sites were sold for more than $30 million.

 

‘We were very encouraged by the strong response at the last auction,’ said Simon Ong, assistant chief executive of SLA’s land operations group. ‘It attracted niche or boutique developers with expertise in building unique houses and dream homes.’

 

The latest sites include some in prime areas such as Holland Road, Carmichael Road and Upper East Coast Road.

 

As at the previous auction, a Good Class Bungalow site is being offered. Proposed developments for other sites include a two-storey bungalow and a pair of three-storey semi-detached houses.

 

‘The appeal of such sites is that they can be customised to suit the buyer’s needs,’ said Mr Ong. ‘This is aligned with SLA’s mission to optimise the use of vacant state land.’

 

The developer’s packet for the sites can be bought from the SLA at $52.50 or found online at http://www.sla.gov.sg. Interested parties can register for the auction outside the Shenton Room of M Hotel, from 2pm on Aug 21. The auction starts at 3pm.

 

Source: Business Times