Original article from Straits Times.
Entities controlled by Singapore property tycoon Kwek Leng Beng and his Malaysian billionaire cousin Quek Leng Chan have joined forces for the $980 million purchase of a freehold site in Singapore’s upscale River Valley precinct.
Their acquisition of Pacific Mansion in District 9 marks the biggest collective sale in more than a decade and the second-highest on record, according to CBRE, which brokered the deal.
Singapore-listed GuocoLand, controlled by Mr Quek, announced yesterday that it has successfully tendered for the site with Intrepid Investments and Hong Realty.
Both Intrepid Investments and Hong Realty are majority-owned by Hong Leong Investment Holdings (HLIH), which is effectively controlled by Mr Kwek, though other family members also own stakes in these companies.
GuocoLand and Intrepid Investments each hold a 40 per cent stake in the project, while Hong Realty owns a 20 per cent interest.
The latest deal marks the largest transaction in the current collective sale cycle, exceeding Tampines Court’s $970 million and Amber Park’s $907 million, and is surpassed only by the sale of Farrer Court for $1.34 billion in 2007.
CBRE director of capital markets Galven Tan said that the tender for Pacific Mansion drew interest from a handful of local and foreign developers.
Consultants estimate that the land cost for the Pacific Mansion site may translate to a break-even price of $2,530 to $2,800 per sq ft (psf), and a potential selling price of $3,000 to $3,200 psf for the upcoming project.
In just the first three months of this year, 14 collective sales have clocked total proceeds of $5.6 billion, which is already 64 per cent of the total proceeds of $8.7 billion from 30 collective sale sites for the whole of last year.
As HLIH is deemed a substantial shareholder of GuocoLand, Intrepid Investments and Hong Realty are deemed interested persons of GuocoLand under Singapore Exchange’s listing rules.
Pacific Mansion comprises 288 apartments and two commercial units. Owners representing more than 80 per cent of the strata area and share value of the development have consented to the collective sale. Each residential unit owner will stand to receive a gross payout of $3.26 million to $3.48 million. The shop units will receive between $2.2 million and $4.5 million.
Retiree Peter Chia, 60, who has been living in Pacific Mansion for the past 10 years, welcomed the news of the collective sale.
“It is a good price,” he said, adding that he has not decided where he will live in the future.
He said a new development could help breathe new life into the area, noting that the ageing property was not well-maintained.
But not everyone is glad. A resident, who wanted to be known only as Mr Lim, said he bought a three-bedroom apartment in Pacific Mansion in 2016 and would incur a 12 per cent seller’s stamp duty (SSD).
He said he has failed to get an SSD waiver from the authorities even though he did not sign on the collective sales agreement. The SSD, estimated to be $384,000, would have to be paid even before he receives the sale proceeds. “This defeats the purpose of the SSD because I am not a speculator,” said Mr Lim, adding that he spent $40,000 to $50,000 on renovations.
Original Article from straitstimes.com published on 2nd Mar 2018.
SINGAPORE – FEC Properties, an indirect wholly-owned subsidiary of Hong Kong-listed Far East Consortium International, has secured a collective sale site in Singapore’s Holland Road in District 10 for S$183.38 million.
The sale price for Hollandia translates to a land rate of SS$1,703 per square foot per plot ratio (psf ppr), according to the marketing agent Savills Singapore.
In a regulatory filing with the Hong Kong stock exchange, Far East Consortium said it plans to redevelop the site into a high-end residential development with total gross floor area (GFA) of about 10,000 sqm.”The acquisition is consistent with the company’s regionalisation strategy and is a great addition to the development pipeline in Singapore following Artra which was successfully launched last year,” it said. Artra, a 400-unit development near Redhill MRT station is jointly developed by FEC Properties and New World Development.
Occupying a corner plot at the junction of Holland Road and Queensway, the freehold site of 4,970.8 sqm lies within a popular residential enclave of landed homes and high-end condominiums. It is served by public transport plying Holland Road and is near Holland Village MRT. Sitting on the site now is Hollandia, a six-storey block of 48 apartments built in the mid-1980s.
Under the 2014 Master Plan, the site is zoned for residential use with a gross plot ratio of 1.6. Subject to planning approvals from the relevant authorities, the land may be developed up to 12-storeys with an allowable GFA of 10,004.56 sq m.
Owing to its high development baseline with an equivalent gross plot ratio of 2.01, no development charge is payable including the additional 10 per cent gross floor area for balconies.”Undoubtedly, this freehold plot will benefit from the successful tender of the highly attractive mixed-use government land sale (GLS) site located at the heart of Holland Village,” said Suzie Mok, senior director of investment sales at Savills Singapore, who brokered the deal.
The last major transacted collective sale site in the Holland vicinity was in December 2011 for Henry Park Apartments at Holland Grove.
At the agreed sale price, owners of Hollandia could expect to receive gross sale proceeds ranging from S$3.3 million to S$4.2 million, which works out to over S$2,000 psf on strata area.
Original Article from Todayonline by Angela Teng.
Buyers of residential properties valued at more than S$1 million acquired on or after Feb 20 will have to pay higher stamp duties.
The Buyer’s Stamp Duty (BSD) rate is computed on the purchase price or the property’s market value, whichever is higher. A new 4 per cent BSD will be imposed on the price or value of homes in excess of S$1 million, Finance Minister Heng Swee Keat announced on Monday (Feb 19) during his Budget statement.
For residential properties where the option to purchase has been granted and will be exercised within 3 weeks of the announcement, a “transitional provision” will be granted and current rates will apply.
The existing BSD rates for residential properties are 1 per cent for the first S$180,000, and 2 per cent for the next S$180,000. For properties valued at more than S$360,000, the next S$640,000 will be subjected to 3 per cent BSD. Following Monday’s announcement, a higher rate will apply to the remaining amount in excess of S$1 million.
Property analysts interviewed felt that the revised BSD rates were unlikely to have a significant impact on the recovering property market.
In light of the current market upswing, developers are unlikely to lower their prices as a result to try and attract buyers, they added.
“Given the upsurge in land prices in 2017 and positive market sentiments, private property prices are expected to grow by 5 to 7 per cent in 2018, and a 1 percentage point increase in BSD is unlikely to deter buying demand,” said Ms Christine Li, head of research at Cushman & Wakefield Singapore.
She added: “Given the heightened interest in the residential market, the government has timed the increase of the BSD well, as prices and transaction volumes could return in vengeance after Chinese New Year with more new launches in the pipeline.”
Moreover, as BSD rates are progressive, the effective increase would be less than 1 per cent for most properties above S$1 million but below S$1.5 million, Ms Li noted.
Taking a S$1.5 million property as an example, the current BSD payable is S$39,600. With the change, the new amount payable will be S$44,600 — or just S$5,000 more, said Mr Ong Teck Hui, national director of research and consultancy at JLL.
“As the bulk of residential transactions are below S$1.5 million, the effect of the BSD change on market demand is expected to be mild,” he said.
Nevertheless, buyers of more expensive residential properties are likely to feel the pinch, Mr Ong added. Agreeing, Ms Li felt that the increase in BSD rates would shift demand from buyers towards smaller units or properties in the suburban areas.
Mr Desmond Sim, head of CBRE Research for Singapore and South East Asia, said the higher rates may affect foreign investors more, and deter them from buying luxury properties here in prime locations. Still, he noted that overall, foreign investors pay less in property taxes and duties in Singapore, compared to place such as Hong Kong and Australia.
ZACD Group executive director Nicholas Mak said: “Over time, buyers and sellers will get used to the new BSD (rates) and it would just become a part of the property transaction costs.”
14,707 units sold last year beat 2016 total by 23 per cent; market recovery and steady pipeline of launches seen supporting 2018 buying.
REFLECTING the upbeat sentiment in the property market, developers’ sales of private homes and executive condominiums (ECs) were the highest in four years in 2017. This momentum is expected to gain traction this year, given a healthy pipeline of new property launches.
Based on preliminary estimates, developers sold 14,707 units, 23 per cent higher than the 11,971 units sold in 2016. The 14,707 figure included 10,682 private residential units, 34 per cent more than the 7,972 units sold in 2016; the sales of ECs held steady at around 4,000 last year.
These figures are based on the developers’ sales survey conducted by the Urban Redevelopment Authority (URA) and final sales data from the first three quarters of last year.
Tricia Song, head of Singapore research at Colliers International, said: “The encouraging sales volume and the pick-up in home prices in the second half of 2017 signalled that the private residential market had turned a corner, and should continue to recover this year in view of a steady pipeline of upcoming projects and positive market sentiment.
About 25 major private non-landed projects (excluding ECs) with the potential to yield 15,000 to 16,000 units could be put on the market this year; she said this takes into account sites sold to developers as well as projects yet to be launched.
Another sign of the strong momentum can be seen in how developers’ sales outpaced their launches last year – 6,066 private residential units were released for sale, 23 per cent lower than the year before, the consultants noted.
Cushman & Wakefield research director Christine Li reckoned that the 2017 sales tally could have been higher, if not for several developers holding back launches in anticipation of an expected upturn in prices this year. Developers have thus pared back unsold inventory in older existing projects, with the majority of the top 20 sellers in December already more than 80 per cent sold.
Ms Li added: “As such, we could see high sales volumes in 2018, as the launch pipeline expands due to expected launches from the en bloc market, government land sale sites and re-launches from existing projects. We expect around 13,000 to 14,000 units sold by developers in 2018.”
JLL national director of research and consultancy Ong Teck Hui estimated that 9,000 to 10,000 private residential units could be launched this year, and, together with about 2,000 units unsold in launched projects, should provide a healthy level of supply.
But he added that developers’ sales performance this year will not only hinge on their launch supply, but also on pricing, a major determinant in sales take-up in new project launches.
The diverse risk appetite that developers have demonstrated in their land bids have, however, drawn varied projections from consultants on the potential price increase this year – from 3 per cent to as high as 15 per cent, following a one per cent uptick last year.
Mr Ong said: “If launches are slowed deliberately and pricing becomes over-optimistic, sales could be less brisk than anticipated.”
The risk of rising interest rates could keep buying demand in check as well. “If interest rates are raised gradually, that will not hurt the market, but it will dampen over-exuberance among buyers who are overly optimistic,” he added.
Ms Song observed that based on caveats lodged, the bulk of new homes sold last year were in the price range of S$1,000 to S$1,499 per sq ft (psf). This indicates that amid the euphoria in the market, home buyers are still price-sensitive and that quantum is still a key determinant in property purchase, she said.
Developers that sold the most units last year were Qingjian Realty, Frasers Centrepoint and City Developments (CDL); each clocked sales of more than 1,000 units last year, based on the tabulation of boutique consultancy SRI Research.
URA’s data indicates that developers sold 531 private residential units and ECs in December, a month typically marked by a lull. The figure is 43 per cent lower than that for November, and eight per cent below that for December 2016.
Of the 531, 431 were private residential units – a 45-per-cent drop from November, but a 17-per-cent increase from the year before.
LIIV Residences, a 23-unit development by LCT Land, was launched in December. Three units were sold at a median price of S$1,761 psf.
The first project to come onstream this year is CDL’s New Futura, a 124-unit freehold development in Leonie Hill in District 9. It will begin sales this Thursday through appointment-only viewing. Prices start at S$3.8 million for a two-bedroom unit of 1,098 sq ft, said agents.
Also in the pipeline is the only new EC project this year, Rivercove Residences. Jointly developed by Hoi Hup Realty and Sunway Developments, this is likely to be launched in March.
Twin View at West Coast Vale, by China Construction (South Pacific) Developments, is expected to be launched in March or April.