Residential Market News Extract - 13 September 2012

GuocoLand sells 40 Leedon Residence units

Malaysian tycoon Quek Leng Chan's Singapore-listed property arm GuocoLand has sold about 40 units or 10 per cent of the total 381 units in its freehold Leedon Residence condo in the Holland Road area, BT understands.

It began a private preview of the project in mid-August at an average price of $2,000 per square foot. The developer is not offering any discount or stamp duty absorption.

For the preview, GuocoLand has released 70 units - mostly three and four bedders.

The 12-storey development will comprise 11 blocks.

Leedon Residence's architectural design, landscaping and interior design are handled by SCDA. Units will be fitted with Smeg kitchen appliances.

Leedon Residence will not have any one-bedders. It will have around 60 two-bedroom apartments, generously sized at around 1,050 sq ft each and priced at $2.4 million and upwards.

The vast majority of units in the development will be three and four-bedders.

Typical unit sizes are around 2,100 sq ft for a three-bedroom apartment and 2,700 sq ft for a four-bedder. On the ground floor, though, four-bedders are much larger (4,600-5,900 sq ft), each with a private pool and garden. Pricewise, three bedders start from $3.7 million and four bedders, from $4.7 million.

Leedon Residence will have four penthouses - all triplex units of about 7,000 sq ft, spanning the 11th and 12th levels as well as the roof terrace. Each penthouse will have five bedrooms. These units have yet to be released and are expected to be priced on application.

The project, which is expected to be completed in 2014, will have a 200-metre long "forest walk" of mostly rain trees. GuocoLand will also conserve over a dozen yellow flames on the perimeter of the development.

Of the 40 units sold, around 70 per cent are said to have been picked up by Singaporeans. Singapore permanent residents of various nationalities are thought to have bought 15 per cent of the sold units, with the remaining 15 per cent purchased by Indonesians (who are not PRs here).

GuocoLand is developing Leedon Residence on the former Leedon Heights site which it clinched through a collective sale in 2007 for $835 million, or $1,062 per square foot per plot ratio inclusive of development charges. A back-of-the-envelope calculation suggests the breakeven cost for Leedon Residence is around $1,500-1,600 psf. Assuming a $2,000 psf selling price on a project-average basis, the pretax profit from the development would be around $420-520 million.

Next door, at the 99-year leasehold d'Leedon project being developed by a CapitaLand-led consortium, 10 units were sold in July at a median price of $1,527 psf, according to developers' sales stats filed with Urban Redevelopment Authority (URA).

Along Bukit Timah Road, GuocoLand is at an advanced stage of construction for Goodwood Residence, with 134 of the project's 210 units sold as at end-July based on URA stats. GuocoLand has achieved an average price of around $2,500 psf for Goodwood Residence. The first phase of the development is slated to receive Temporary Occupation Permit towards the end of this year, followed by the second phase next year.

Source: Business Times – 13 September 2012

 

Million-dollar HDB deal set in motion

It's almost confirmed: A million-dollar record price for a public housing flat looks ready to be set after the buyer and seller of an executive apartment along Queenstown's Mei Ling Street went through the first appointment with HDB yesterday, with that agreed-upon price.

The 150 square metre (1,614.6 square foot) home with three bedrooms and a study comes up to about $619 per sq ft (psf), also a new record for HDB flats. Both buyer and seller are Singaporeans.

BT reported last week that the $1 million deal was in the works, and that the buyer had agreed to pay a cash premium of $195,0000 for the flat, which is located near the Queenstown MRT station.

What is also noteworthy is the level of interest that the flat drew.

Earlier, market specialists had expressed little surprise at the new record, saying that flats in the area were popular, and have seen a slew of buyers willing to fork out top dollar for the location.

But they also highlighted that such transactions are the minority of deals in the HDB resale market, and are not representative of the market.

Source: Business Times – 13 September 2012

 

Exec condo comes with luxury features

A 394-unit executive condominium (EC) project located along Upper Serangoon View is banking on a love of luxury to draw buyers.

Heron Bay's developers said that the project will feature living rooms with ensuite private pool cum jacuzzi, complimentary fibre broadband service from M1 during the first year of occupancy, a hydroactivated water swimming pool with "healthful cell-hydration properties" and a seasports recreation centre with kayaks for free rental, among other amenities.

Said Vincent Ong, managing partner of Evia Real Estate Management, one of the five partners behind the project: "We are introducing a premium class EC with a number of luxury condominium features, as well as other pampering and thoughtful design touches."

The plan is to "differentiate Heron Bay from the competition, as well as provide home buyers with more value for their home investment", he added.

The EC will also feature a basement carpark, full condominium facilities, and a card-access security system.

A mix of two to five-bedroom units is available. Penthouses have between three and five bedrooms.

The two-bedroom units are sized at between 775 sq ft and 915 sq ft, while the three-bedders are in the range of 1,023-1,582 sq ft. The four-bedroom units have sizes ranging from 1,281 sq ft to 1,819 sq ft, and the five-bedroom homes at 1,496 sq ft to 1,938 sq ft.

Sizes start at 1,991 sq ft for a penthouse.

Market observers said that the indicative average selling price for the project is $715 to $720 psf.

E-applications for the project open this Sunday, while bookings commence on Oct 26.

Heron Bay is developed by a consortium made up of civil engineering construction firms Hwa Seng Builder and Chye Joo Construction, Evia Real Estate Management, Ho Lee Group and See Hup Seng Ltd.

Source: Business Times – 13 September 2012

 

Not all banks will finance homes on short leases

Some banks here say they are willing to finance new homes with shorter leases, but buyers might have to pay off these loans more quickly, or borrow less.

They were responding to the Urban Redevelopment Authority's (URA) announcement last week that it will offer its first residential site with a variable lease option of 30, 45 or 60 years for sale.

The 1.02ha land parcel in Jalan Jurong Kechil can also be developed for retirement housing.

It is on the reserve list.

Banks The Straits Times spoke to said a range of criteria such as the loan-to-value ratio, the property's value, the applicant's income and credit worthiness, and the acceptability of the collateral are assessed when a loan application is considered.

However, at least one bank said it would not offer loans to buyers of homes with a 30-year lease.

Ms Chia Siew Cheng, United Overseas Bank's (UOB) head of secured loans (personal financial services), said the maximum loan term depends on the borrower's age. If the property is leasehold, the remaining lease period must be at least 35 years at the end of the loan term.

"In this instance, UOB's criteria would apply only to the 45-year and 60-year leasehold properties, and the maximum loan tenor the bank could potentially offer for these would be 10 years and 25 years respectively," she added.

Other banks, however, say the decision would be made on a case-by-case basis.

DBS Bank is one of them. Ms Lui Su Kian, its managing director and head of deposits and secured lending, said that "the introduction of shorter-lease residential properties is relatively new to the market, and we are reviewing the demand for such leases".

She added: "Currently, we offer mortgages for properties with leases of more than 60 years. However, we do offer financing for residential properties with shorter leases on a case-by-case basis."

Ms Phang Lah Hwa, OCBC Bank's head of consumer secured lending, said the maximum loan term for home loans is 40 years, or the period from when the loan is taken to when the borrower turns 75, whichever is shorter.

"Banks generally reduce the loan tenor or the quantum of financing if the remaining lease falls below 40 years on loan maturity. The bank will review home loan applications for projects with short-term leases on a case-by-case basis," she added.

Mr Peng Chun Hsien, head of secured finance solutions at Citibank Singapore, said: "The remaining lease on a property is a consideration when determining the tenure of a home loan. Therefore, a shorter home loan tenor may be granted for properties with shorter leases."

The URA said that it will monitor the outcome of the tender before deciding on whether to offer more residential sites with variable lease terms, which have been introduced to provide more development options for tenderers.

It also noted that retirement housing is still a new and untested concept in Singapore.

As the Jalan Jurong Kechil site is a pilot site, the type of retirement housing development, and how this would differ from the more conventional flats or condominiums, will depend on the developer's business model and development concept, a URA spokesman said.

For instance, the developer has the flexibility to propose various unit sizes in the development, including studio apartments.

It will also not be subject to the guidelines that cap the number of homes that can be built in each non-landed development outside the central area.

"This is to allow the developer to test out his business model, which could include studio apartments to cater to senior citizens.

"We will take into consideration the development outcome for this site in formulating the guidelines for future retirement housing developments," the spokesman said.

Source: The StraitsTimes – 13 September 2012