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Average for first two months is 37% up on that fetched by developers in 2009
By KALPANA RASHIWALA
(SINGAPORE) As developers released more upmarket projects, the average transaction value of private homes sold in the primary market in the first two months of this year rose to $1.78 million per unit, a study by CB Richard Ellis shows.
This is 37 per cent higher than the $1.3 million average price of homes sold by developers for the whole of last year.
But the figure for January and February 2010 is still shy of the $1.97 million average price in the bull year of 2007, according to CBRE’s analysis of URA Realis caveats data on March 5.
Reflecting the pattern of developers migrating to releasing higher-end projects towards the end of last year – after kicking off the year with mass-market launches – the priciest home in absolute dollar terms sold in the primary market since January 2007 was transacted in November last year – a $33.41 million junior penthouse at Far East Organization’s Boulevard Vue project. The price of the 8,051 sq ft unit works out to $4,150 psf. The unit, which occupies the 30th and 31st levels of the 33-storey block, is believed to have been bought by Nippecraft non-executive chairwoman Linda Wijaya Limantara and her family. Nippecraft is part of the Asia Pulp & Paper group.
The unit’s absolute price surpassed that of the most expensive unit transacted in the primary market in 2007, when a 19th floor unit at The Marq on Paterson Hill sold for $31.4 million in July that year. That price equated to $5,100 psf.
As for last year, another high-priced primary market deal was a bungalow at Kasara The Lake, located at Ocean Drive in Sentosa Cove, which fetched almost $14.43 million.
In January this year, the most expensive unit transacted in the primary market was a fourth-floor condo unit at Marina Collection on Sentosa Cove, at $10.3 million (or about $2,200 psf). February’s priciest sale was a 16th floor unit at Urban Suites in the Cairnhill area – $10.43 million or $2,213 psf.
CBRE executive director Li Hiaw Ho reckons it is likely that the average dollar value of primary market transactions for the whole of this year will generally be above last year’s figure as more high-end projects are slated for launch this year.
Agreeing, Knight Frank chairman Tan Tiong Cheng reckons bigger units may gain appeal again as developers roll out high-end projects this year, a trend seen during the 2007 bull market.
‘However, a lot will depend on how rentals fare for large units,’ he said.
High-end projects primed for release this year include Seascape and The Residences at W, both at Sentosa Cove, phase 2 of Marina Bay Suites and a project at 76 Shenton Way in the downtown area, says CBRE. In the Orchard Road area, Ardmore III and projects on the sites of the former Anderson 18, Parisian, Grangeford and Beverly Mai are among expected launches.
Mr Tan also points to ‘the other end of the spectrum – shoebox units could be launched, which could drag down slightly the average absolute price per unit’ this year. However, their impact will not be significant as the number of such units, compared with total units launched by developers, is likely to be relatively small, he believes.
The lowest absolute price for a unit sold by a developer in the first two months of this year was $437,880 for a fourth-floor apartment at Suites @ Kovan in Upper Serangoon Road. The price for the 366 sq ft unit works out to $1,196 psf.
For the whole of last year, the smallest primary market deal was $305,860, involving a 441 sq ft unit on the second storey of Ventura View at Rambutan Road, off Still Road. It was sold in August last year.
Mr Li offers another reason that the average value of homes sold by developers this year is likely to surpass last year’s figure – more 99-year leasehold projects on recently sold Government Land Sale sites will be launched at higher prices because of their higher land costs and location attributes such as proximity to MRT stations.
CBRE’s study also shows that on a monthly basis, the highest average price in dollar terms achieved by developers since January 2007 was in March 2008, at $3.87 million. The lowest monthly figure was $761,082, in February last year. That was around the time that developers began testing the market with mass-market launches at attractive prices, after emerging from the darkest days of the global financial crisis.
By December last year, the average transaction price had risen to $2.16 million. It eased to $1.65 million in January this year before rising again to $2.08 million last month. However, the latest numbers may change as more caveats are lodged, analysts say.
Source : Business Times- 10 March 2010
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By EILEEN TAY
LIAN Beng Group has bagged a $144 million building contract for a condominium development at Dakota Crescent.
The design-and-build contract was awarded by UOL Development (Dakota) Pte Ltd. The development comprises 616 apartment units in three 19-storey blocks and four 20-storey blocks, and a six-storey carpark building with a roof garden, a swimming pool and other ancillary facilities.
The project is due to commence next month and expected to be completed in March 2013.
Commenting on the contract win, Lian Beng managing director Ong Pang Aik said: ‘This is an encouraging sign of sustained demand for construction services from the private residential sector. Backed by the group’s strong track record and capabilities, we are looking forward to secure more projects.’
The contract is not expected to have a material financial impact on the net tangible assets per share and earnings per share of the group for the financial year ending May 31, 2010. This new contract raised Lian Beng’s order book to about $740 million.
Established in 1973, Lian Beng Group is mainly engaged in building construction, integrated civil engineering works and construction support services.
Lian Beng’s portfolio of residential projects includes Waterfront Key, The Gale, Kovan Residences, and The Ritz-Carlton Residences, Cairnhill Singapore. The group is also in the midst of constructing public projects such as camp facilities at Kranji.
In January, the group reported a 29 per cent growth in after-tax profit to $11.3 million for the first half of its 2010 financial year, compared with $8.8 million a year ago. Revenue rose 4 per cent to $157.6 million
Lian Beng’s share price dropped 3.5 per cent to 28 cents yesterday.
Source : Business Times- 10 March 2010
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By EMILYN YAP
THE Housing & Development Board (HDB) yesterday released a residential site at Hougang Avenue 7 for application by interested developers.
The 99-year leasehold parcel is on the reserve list and can yield up to 395 condominium units, HDB said.
The site spans 168,251 square feet, has a maximum gross plot ratio of 2.8, and a maximum gross floor area of 471,102 sq ft.
It is near the Hougang and Kovan MRT stations, as well as Hougang Mall, Hougang Plaza and Heartland Mall.
Caveats lodged show that units at the nearby Kovan Residences changed hands at between $798 and $1,009 per sq ft (psf) last month.
Just about two weeks ago, the government also made a residential site on the reserve list at Hougang Ave 2 available to developers. Another four plots will be coming up from now to May.
An additional four sites from the confirmed list will also be making their way to the market.
The authorities have ramped up the release of sites under the H1 2010 land sales programme as home prices spiked last year, and developers put in fierce bids during state land tenders.
On Monday, National Development Minister Mah Bow Tan further announced that the H2 2010 land sales programme will carry a larger number and greater variety of sites on the reserve list.
Still, there is likely to be ‘good demand’ for sites in the current land sales programme, said DTZ South-east Asia research head Chua Chor Hoon.
‘With the H2 2010 land sales programme still a few months away, developers will not wait for it to be announced as some need to replenish their land bank and there are attractive sites in the H1 2010 programme.’
Meanwhile, developers continue to see fairly healthy demand for newly launched projects. Sing Holdings will hold a preview of its 229-unit development at Cairnhill Road, The Laurels, in both Singapore and Jakarta this weekend.
It plans to release about 100 units at an average selling price of around $2,850 psf. As at yesterday, it had sold more than 80 units from earlier private previews.
Source : Business Times- 10 March 2010
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Five parties said to have tendered for job of marketing Jurong East building
By KALPANA RASHIWALA
JTC Corporation is seeking to lease out about 95,000 square feet of offices at its headquarters building near Jurong East MRT Station. It recently conducted a tender exercise to appoint a sole marketing agent to help it find tenants for the building.
The space to be leased represents about 21 per cent of the building’s total 447,778 sq ft net lettable area.
BT understands that JTC itself occupies about 10 floors in the 32-storey building; the rest of the building’s occupied space is leased to other tenants.
The 95,000 sq ft of offices is believed to be from expiry of tenancies and JTC intensifying its space usage by reducing space per head and regrouping its staff according to industry clusters. The statutory board has been at JTC Summit for a decade.
‘As part of JTC’s process for leasing space, JTC called a tender on Jan 29, 2010 for the appointment of a sole marketing agent to undertake the leasing of JTC Summit’s office space, for a period of one year,’ a JTC spokeswoman told BT.
The tender closed on Feb 12. JTC is evaluating the proposals, and the results should be available by next month, she added.
Five parties are said to have tendered for the job – CB Richard Ellis, DTZ Debenham Tie Leung (SEA), Savills (Singapore), United Premas and Advanz International.
BT understands that some of the space to be leased at JTC Summit covers entire floors – such as the 27th and 28th levels.
According to its website, JTC is seeking a flat rent of $44 per square metre a month (or $4.09 per square foot a month) for space on Levels 1 to 30.
Industry observers point to limited supply of office space in the western part of Singapore, although there is business park space.
BT understands that landlords of newer office blocks in Tampines are seeking monthly rentals of $4-5 psf.
According to JTC’s tender documents for appointing a JTC Summit marketing agent, the commission rate will be one month’s gross rental for areas up to 5,000 square metres or 1.25 months gross rentals for areas above 5,000 square metres.
Tenderers’ marketing proposals will be evaluated on their marketing strategies and concept, as well as track records on similar projects and manpower commitment.
Source : Business Times- 09 March 2010
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(NEW YORK) Bryan Roddy says it seemed like a smart investment in April 2007 when he and his partners bought a US$1.2 million home in Greenwich, Connecticut, added two bedrooms and baths and priced it at US$2.9 million to lure Manhattan buyers. They listed the Havemeyer Place property in October 2008, a month after Lehman Brothers Holdings went bankrupt and sent markets tumbling. The house is still for sale.
The so-called move-up market in Greenwich, known as the hedge-fund capital of the US, has dried up as the lingering effects of the financial crisis strand potential buyers in their current homes. ‘There was no one in that price range looking,’ said Mr Roddy, 48, a principal of Roddy Construction, a residential building and renovation firm in Norwalk, Connecticut.
Greenwich home sales from US$2 million to US$2.99 million fell 45 per cent last year, more than any other price category and the most since broker Russell Pruner began tracking the data in 1976. Fifty-two such properties in town changed hands, compared with 94 in 2008.
‘That’s in many cases a trade-up, or entry level,’ said Mr Pruner, also the owner of Shore & Country Properties in Riverside, Connecticut. Move-up sales are largely driven by locals looking for bigger homes and New York apartment owners seeking their first place in the suburbs, he said.
Buyers who can afford to pay US$2 million to US$3 million still rely on mortgage financing, said Alan Rosenbaum, principal of GuardHill Financial Corp, a New York-based mortgage brokerage with Greenwich clients. Lenders have curbed financing at that level to between 50 per cent and 70 per cent of the purchase price, he said.
At the same time, declining real estate prices mean people who need to sell their existing homes before buying another may have less cash for the purchase. ‘In the past, when you sold one home to buy another, you normally reaped a nice profit and you used that profit as a downpayment for your new home,’ Mr Rosenbaum said. ‘Many people who are trading up from the smaller home don’t have enough equity.’
Manhattan apartment prices fell 21 per cent from their market peak in 2008, according to data from New York appraiser Miller Samuel Inc and broker Prudential Douglas Elliman Real Estate. The median price of cooperatives and condominiums slid 10 per cent to US$810,000 in the fourth quarter from a year earlier, the companies said in a Jan 5 report. The median price hit US$1.03 million at the top of the Manhattan market in the second quarter of 2008.
Wall Street firms paid about US$20 billion in bonuses in 2009, down about a third from 2007, New York State Comptroller Thomas DiNapoli said on Feb 23. The average industry bonus was US$123,000, excluding stock options or other deferred pay. The financial industry cut 26,300 jobs in New York last year, contributing to the decline in the Connecticut real estate market. The median price of a single-family home in Greenwich, which lies about 30 miles north-east of midtown Manhattan, dropped a record 18 per cent to US$1.6 million, according to Mr Pruner. Sales fell 20 per cent to 370, with declines in all price ranges of more than US$1 million.
Of 514 homes for sale in town at the beginning of February, 20 per cent were priced between US$2 million and US$3 million, according to Shore & Country. Of 98 new listings between Jan 10 and Feb 10, more than half had previously failed to attract a buyer, according to data compiled by Jeanne Howell, a broker for Greenwich Fine Properties.
Gary Disher, a co-investor with Mr Roddy on the Havemeyer Place home, was unable to sell it last year after reducing the price to US$2.5 million, so he took it off the market in December. He relisted the residence in January for US$3 million in a bid to grab attention from buyers in a different price bracket, he said. ‘We wanted to make sure that we weren’t missing people that would be potential buyers in the US$3 million to US$4 million category,’ he said. On Feb 18, he dropped the price to US$2.49 million. — AP
Source : Business Times- 09 March 2010
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It will allow owners to sell for less than they owe and give them cash as well
(WASHINGTON) In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
The new programme, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.
More than five million households are behind on their mortgages and risk foreclosure. The government’s US$75 billion mortgage modification plan has helped only a small slice of them. Consumer advocates, economists and even some banking industry representatives say much more needs to be done.
For the administration, there is also the concern that millions of foreclosures could delay or even reverse the economy’s tentative recovery – the last thing it wants in an election year.
Taking effect on April 5, the programme could encourage hundreds of thousands of delinquent borrowers who have not been rescued by the loan modification programme to shed their houses through a process known as a short sale, in which property is sold for less than the balance of the mortgage.
Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed.
‘We want to streamline and standardise the short sale process to make it much easier on the borrower and much easier on the lender,’ said Seth Wheeler, a Treasury senior adviser.
The problem is highlighted by a routine case in Phoenix. Chris Paul, a real estate agent, has a house he is trying to sell on behalf of its owner, who owes US$150,000. Mr Paul has an offer for US$48,000, but the bank holding the mortgage says that it wants at least US$90,000. The frustrated owner is contemplating foreclosure.
To bring the various parties to the table – the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property – the government intends to spread its cash around.
Under the new programme, the servicing bank, as with all modifications, will get US$1,000. Another US$1,000 can go towards a second loan, if there is one. And for the first time, the government would give money to the distressed homeowners themselves. They will get US$1,500 in ‘relocation assistance’.
Should the incentives prove successful, the short sales programme could have multiple benefits. For the investment pools that own many home loans, there is the prospect of getting more money with a sale than with a foreclosure.
For the borrowers, there is the likelihood of suffering less damage to credit ratings. And as part of the transaction, they will get the lender’s assurance that they will not later be sued for an unpaid mortgage balance.
For communities, the plan will mean fewer empty foreclosed houses waiting to be sold by banks. By some estimates, as many as half of all foreclosed properties are ransacked by either the former owners or vandals, which depresses the value of the property further and pulls down the value of neighbouring homes. — NYT
Source : Business Times- 09 March 2010
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(LONDON) China Real Estate Opportunities (CREO), one of the biggest companies on London’s AIM (Alternative Investment Market), may abandon its UK listing to be quoted in Singapore, in a quest to deepen its investor base and tap stronger capital flows in Asia.
The company – owner of about £840 million (S$1.78 billion) worth of Chinese office, retail and residential property – is to consult investors on the move that it said may help narrow the gap between net asset value and share price.
‘The company has made a non-binding submission to . . . secure approval for admission to Singapore’s internationally recognised main board so as to position the company closer to its asset base and potentially re-rate the shares in line with CREO’s peer group listed in Asia,’ the company said yesterday. If shareholders approve the move, the company could delist from AIM by June.
CREO is the latest in a series of companies to consider leaving AIM to improve liquidity and entice new shareholders, raising questions about the future of the incubator market.
Last week, Macau Property Opportunities Fund said it intended to apply for admission to London’s main market to diversify its investor base. — Reuters
Source : Business Times- 09 March 2010
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