Residential Market News Extract - 2 August 2012

Home prices 'likely to remain stable'

Home prices are likely to flatline over the next six months, with falling interest from foreign home buyers eliminating the need for more cooling measures, according to CapitaLand bosses yesterday.

President and chief executive Liew Mun Leong said the additional buyer's stamp duty of up to 10 per cent introduced in December last year has met its aim of dampening foreign demand.

Foreign buyers and companies accounted for only 7 per cent of the private home market in the first half of the year, down from 20 per cent for all of last year.

Mr Wong Heang Fine, chief executive of CapitaLand Residential, told the meeting that "strong fundamentals" will keep home prices stable for this half of the year.

Developers sold almost 12,000 new homes in the first half of the year, 48 per cent more than in the same period last year.

But CapitaLand sold just 259 homes here in the first half, with a total value of $467 million, in projects such as Sky Habitat, The Interlace and d'Leedon. Mr Wong said new units will continue to be released at its launched projects, which should lead to more sales in the second half.

Broadly, it will be looking to build up its residential land bank, particularly in Singapore, but also in China, in the value-homes segment. It will also look at developing or acquiring more malls.

Source: The Straits Times – 2 August 2012

 

56% stake in Southbank on sale for $63m

Real estate investor Chan Heng Fai of SingXpress Land is selling 32 Soho units and a retail outlet at Southbank for $63 million.

The properties constitute 56 per cent of Southbank Soho Block - a mixed development project built by UOL Group, comprising a 40-storey residential tower, 20-storey Soho (small-office home office) block with 16 shops on the first floor.

Of the 32 Soho units, 29 are duplex loft units. The duplex loft consists of units from 883 sq ft to 1,593 sq ft. Three are single level units ranging from 463 sq ft to 603 sq ft. The shop is 129 sq ft.

The development currently enjoys views over the Kallang River and Kallang Basin. The Urban Redevelopment Authority plans to rejuvenate the Kallang area to make it a lifestyle hub with offices and waterfront residences.

The asking price works out to $1,812 per sq ft and should mean a sizeable gain for Mr Chan and his investment holding firm Hong Kong-listed Xpress Group, the parent company of Catalist-listed SingXpress Land, as the properties were accumulated between 2006 and 2010.

The sale may attract those investors who want to avoid paying the Additional Buyer's Stamp Duty or Seller's Stamp Duty.

As the Soho block is zoned commercial, these stamp duties will not apply.

Source: The Straits Times – 2 August 2012

 

Tender triggered for Victoria St hotel site

The buoyant tourism sector has spurred interest in a hotel site near Lavender MRT station. A tender for the 0.84ha site was triggered after a developer committed a minimum bid of $148.7 million.

This works out to $446 per sq ft (psf) per plot ratio (ppr) for the reserve list site at the junction of Jalan Sultan and Victoria Street.

Sites on the reserve list are put up for tender only if developers make an acceptable initial offer.

Experts say the tourism boom has led to a number of reserve list sites being triggered for sale in the past year, as investors hunt for well-located hotel sites.

For instance, a hotel site in Rangoon Road was triggered in February. It sold for $151 million in April to RB Capital group.

Analyst expects the top bid to come in at between $650 psf ppr and $700 psf ppr, or from $217 million to $233 million.

This estimate is based on the assumption that a three-star hotel with about 500 rooms is built.

However, the hefty overall quantum might limit the number of bidders to about six.

Developers will have a few options at hand as to their plans for the site, as it has been zoned for either hotel or commercial and residential use. However, both have a minimum hotel component.

If hotel use is chosen, at least 60 per cent of total gross floor area (GFA) must be for hotel rooms and hotel-related uses. The remainder can be used for commercial and/or residential purposes.

But opting for commercial and residential use still requires a minimum of 30 per cent of the GFA to be kept for hotel use. A minimum of 60 per cent must be for homes, while commercial use can take up a maximum of 10 per cent.

Source: The Straits Times – 2 August 2012