Residential Market News Extract - 21 June 2012

Tanah Merah, Bright Hill sites launched to yield 820 homes

Two residential sites, expected to yield up to 820 housing units, were launched for sale by public tender by the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB) yesterday.

The first site, a 99-year leasehold plot located on Tanah Merah Kechil Road, has a site area of about 150,678.5 square feet and a maximum gross floor area (GFA) of 421,901.8 sq ft. It can house around 415 homes.

ERA Realty's key executive officer, Eugene Lim, expects the site to fetch an estimated bid price of $500-$600 psf ppr, assuming a selling price of $1,000-$1,300 psf, based on current subsales in the locality.

Given its proximity to Tanah Merah MRT station, he expects six to eight bidders for the site.

Tender for the site will close at 12 noon, on July 31.

The second site, a 99-year leasehold plot located at Bright Hill Drive, has a site area of about 144,635.6 sq ft and a maximum GFA of 404,979.7 sq ft. It is expected to yield about 405 homes.

The site could attract three to five bidders, with the winning bid between $580 and $620 psf ppr, which translates to an average selling price of $1,250-$1,300 psf.

With the right orientation, the future condominium development can enjoy the unblocked view of the MacRitchie Reservoir and the neighbouring landed housing estates, such as Adelphi Park Estate, Windsor Estate and Soo Chow Garden.

Said ERA's Mr Lim: "We expect a moderate number of bidders (four to six) for this site, due to the fact that the site is irregular and may pose challenges in terms of design. Bid price may be $550-$600 psf ppr, assuming an eventual selling price of between $1,100 and $1,250 psf."

There could be pent-up demand in the area as there have not been new project launches for many years. Thomson Grand, which is nearer to Bishan, is 100 per cent sold as of April 2012 at a median price of $1,300 psf.

The tender for the site will close at 12 noon on Aug 7.

Source: Business Times – 21 June 2012

 

Big-ticket property deals are bouncing back, and the trend is likely to continue

Investment sales of property - which cover big-ticket transactions - have rebounded to about $6.4 billion in the second quarter as at June 19. Such deals had taken a hit in the first quarter, when the figure dived to $4.8 billion (from $7.9 billion in Q4 2011).

Q2's surge has been fuelled by the residential and office markets, including sales of Tower 15 on Hoe Chiang Road, KeyPoint on Beach Road and strata office units at Burlington Square, Tung Centre and The Adelphi.

Taking into account outstanding state tenders - such as for the private housing sites at Farrer Drive and at Pheng Geck Avenue scheduled to close on June 21 and June 28 respectively - as well as other caveats for various sectors of the property market, the final Q2 investment sales tally could reach about $7 billion. This would take the figure for first-half 2012 to almost $12 billion.

Investment sales are expected to continue apace in the second half, possibly resulting in a full-year total of $21-25 billion. This assumes macro economic conditions improve and that financing continues to be available. Availability of debt is one of the main lifelines to the real estate investment market. Absence of debt will lead to falling investment volumes.

Last year, total investment sales hit $29.6 billion, down slightly from 2010's $31.4 billion.

Investment sales reflect the confidence of major property players in the sector's mid to long-term prospects.

Investment sales in the residential sector so far this quarter have reached $3.6 billion - about $1.1 billion or 46 per cent higher than Q1 2012. A big chunk of this came from GLS sites, amounting to $2.5 billion, up 38 per cent from Q1.

The commercial segment too posted a $914 million or 91 per cent quarter-on-quarter jump to $1.9 billion. However, investment sales of industrial properties fell 32 per cent quarter on quarter to about $766 million.

In the collective sales market, five deals totalling $328.8 million have been inked this quarter as at June 20, down from the six deals at $456.6 million in Q1.

Source: Business Times – 21 June 2012