Complete Property Market Updates of Singapore

July 2, 2008

The incredible shrinking condo

Filed under: Developer News, General — Propertymarketupdates @ 4:34 am

A TINY studio under construction near Farrer Park may well be the smallest private apartment to be built in Singapore.

It squeezes a bay window, a teeny kitchenette, a bathroom and space for a bed into just 312 sq ft - about half the size of a squash court.

The unit - part of the new Kent Residences in Kent Road - is the most extreme example of an emerging trend in private housing: compact, capsule condos within the city.

Targeted at young singles and property investors, some new studios have shrunk in size to as little as 300 to 400 sq ft, as developers try to make their homes more affordable amid rising costs.

At least 20 new projects launched within the past year have had units smaller than 500 sq ft, which was almost unheard of before last year.

Half of these projects went even further, cutting their smallest units to under 400 sq ft, making them on a par with those in famously space-squeezed cities such as New York and Hong Kong.

Shoebox-sized studios are not entirely new here. A few older condos like Mountbatten Lodge have units less than 400 sq ft in size.

What’s new is the recent proliferation of such projects, especially in Farrer Park, Balestier and Dhoby Ghaut. Most are built by boutique developers and have under 100 units.

Thanks to the property boom last year, home prices in these areas start at just below $1,000 per sq ft (psf) and go up to $1,600 psf. For a 400 sq ft condo, this translates to well below $700,000.

‘Construction costs are going up and space is becoming very expensive, so developers have to offer something that is affordable for the majority of home-buyers,’ said Ms Peggy Ngiam, project director of Huttons Real Estate Group.

Her firm has marketed several projects with unusually small units, including Thomson V Two in Upper Thomson Road, where half the 74 units were under 500 sq ft, with the smallest just 355 sq ft.

With a typical unit priced at a mere $377,000, the project sold out within a day.

In fact, most of these boutique projects are fully sold, and the most recent launches have seen good take-up rates.

Ms Ngiam said buyers are a mix of locals and foreigners. Some are single professionals while others are investors looking for good rental yields.

At Citigate in Rangoon Road, which was launched on Monday, 22 of its 32 units were sold within a day. The smallest unit, a 441 sq ft studio, is expected to fetch rentals of $3,000 to $3,500 a month, she said.

Small units also reflect growing demand from singles who want to live in the city on a tight budget, said DTZ Debenham Tie Leung senior research director Chua Chor Hoon. She said developers focused on building large apartments last year and may now see a shortage of small ones.

But other experts warned that buyers may not realise how small these units really are.

‘In the last market run-up in 1996, when prices got higher and higher, the units got smaller and smaller,’ said Mr Colin Tan, head of research and consultancy at Colliers International. Even then, those units were rarely under 500 sq ft, and came without today’s bay windows and air-con ledges, which eat into liveable space, he added.

While most projects offer showflats, the smallest units are often sold on the basis of their floor plans. At Kent Residences, which has just 13 units, buyers were shown only a model of the project and its floor plans.

‘In most cases, when people see the finished flat they have bought off the plan, they say it’s smaller than they expected. Can you imagine what that would be like for a 300 sq ft unit?’ said Mr Tan.

AFFORDABLE SPACE

‘Construction costs are going up and space is becoming very expensive, so developers have to offer something that is affordable for the majority of home-buyers.’ - MS PEGGY NGIAM, project director of Huttons Real Estate Group 

______________________________________________________________________________________

A 300 sq ft apartment is roughly the size of…
·  Two of the Old Chang Kee kiosks in front of Ngee Ann City
·  Seven ping-pong tables
·  Ten standard-size office workstations
·  Half an average three-room flat, and about a quarter of an average five-room flat
·  Half the size of a squash court

Source : Straits Times - 4 Jun 2008

June 27, 2008

Evergro to raise $170m through rights issue

Filed under: Developer News, General — Propertymarketupdates @ 3:28 am

EVERGRO Properties, a subsidiary of Keppel Land, plans to raise about $170 million through a renounceable rights issue.

Evergro also intends to carry out a capital reduction exercise to write off accumulated losses of $36.5 million.

The fund-raising involves the offer of 761.8 million new shares on the basis of three rights shares for every two existing shares held.

Evergro, formerly known as Dragon Land, will announce finalised details of the rights issue ‘in due course’, and determine the issue price closer to the launch date.

It expects the issue price ‘to be at a discount of up to 15 per cent to the then-prevailing market price’. Shares of Evergro closed unchanged yesterday at 23.5 cents.

The China-focused property developer expects to receive net proceeds of about $169 million, of which 71 per cent will go towards land acquisition.

Evergro has a landbank of about four million square metres, and is looking to purchase around 10 per cent more land. In particular, the company will focus on land acquisition in Jiangsu for more residential and mixed-use projects.

Further residential developments around a golf course in Tianjin will take up another 11.8 per cent of net proceeds.

The remaining 17.2 per cent will be set aside for working capital needs. According to Evergro’s CEO Goh Toh Sim, the availability of land acquisition opportunities will determine how long proceeds from the rights issue will last.

Jittery stock market conditions have not deterred Evergro from conducting a rights issue. Mr Goh noted that there is strong genuine demand for mid-to-high end homes in China. Also, the stable property market presented a good buying opportunity.

‘For land acquisitions, you will not want to do it when the market overheats,’ he said.

Keppel Land, which holds a 71.37 per cent interest in Evergro, has made an irrevocable undertaking to subscribe for its full entitlement and make excess applications. Hence, all rights shares will be fully taken up.

Evergro also announced plans to reduce its issued share capital by $36.5 million, to write off accumulated losses of the same amount in their entirety.

‘This is to better reflect the financial position and share capital of the company as well as cancel or reduce any issued share capital which has been lost or is unrepresented by available assets,’ said the press release. The exercise will not involve share cancellation.

Source : Business Times - 31 May 2008

Stamford Land profit up 29% on tax credit

Filed under: Developer News, General, Tax Matters — Propertymarketupdates @ 3:22 am

THANKS to a deferred tax credit of $14.82 million, Stamford Land Corporation saw a 28.7 per cent rise in net profit to $42.94 million for the financial year ended March 31.

Stamford said the deferred tax credit arose from recognition of unrecorded tax losses carried forward as ‘the anticipated future taxable profit will allow the deferred tax assets to be recovered’.

Revenue for the year dipped 7.3 per cent to $276.1 million and pre-tax profit fell 14.6 per cent to $28.5 million as the group had a lower inventory of completed residential properties for sale compared with last year.

Earnings per share rose to 4.97 cents from 3.86 cents.

Its hotel segment achieved a 17 per cent increase in revenue to $232.2 million due to better occupancy and room rates and translation of revenue denominated in Australian dollars and New Zealand dollars into Singapore dollars at higher exchange rates.

The trading segment posted a 22.6 per cent growth in revenue to $14.82 million due to higher contribution from the group’s travel and interior decoration companies.

But growth in these segments was offset by a 66.8 per cent slump in revenue in the property development and investment segment to $28.96 million as fewer units of Stamford Marque remained for sale.

Stamford Land is optimistic about the outlook for the hotel industry in Australia in view of limited new hotel rooms coming on stream, likely further improvements in revenue per available room, and continued strength in the Australian dollar.

‘The group expects positive results from its hotel owning & management segment in the next reporting period and the next 12 months,’ it said.

On the residential front, Stamford Land said its Stamford Residences Auckland is expected to be completed in October this year and it will recognise income from the sale of this project accordingly.

It has pre-sold over 70 per cent of the Stamford Residences and Reynell Terraces, Sydney, which is scheduled for completion in August 2011.

‘The trading segment is expected to further improve on its performance on the back of the strong Singapore economy,’ it added.

Stamford Land has proposed a final dividend of 1.5 cents per share and a special dividend of one cent per share. It paid out an interim dividend of 1.5 cents per share on March 12.

Shares in Stamford Land closed trading yesterday at 67 cents, down one cent.

Source : Business Times - 30 May 2008

Directors’ Trades: Ho Bee

Filed under: Developer News, Financing, General — Propertymarketupdates @ 3:08 am

HO BEE DIRECTOR RAISES DIRECT STAKE

MR DESMOND Woon Choon Leng, executive director at Ho Bee Investment, has been snapping up shares in the property developer this week.

On Tuesday, he bought 150,000 shares on the open market at 95.8 cents apiece.

Then on Wednesday, he bought another 250,000 shares on the open market at 93.7 cents apiece.

Ho Bee’s share price fell nine cents, or more than 9 per cent, during five straight days of losses that ended on Wednesday. The counter rose one cent to close at 93 cents yesterday.

These two transactions raised Mr Woon’s direct stake to 1.55 million shares, or 0.21 per cent, of the firm’s issued share capital.

In March, Ho Bee chairman and chief executive Chua Thian Poh bought 300,000 shares at 89.5 cents apiece through Ho Bee Holdings, further raising his deemed stake to 476.4 million shares, or 64.61 per cent, of issued share capital.

Ho Bee’s first-quarter results, announced earlier this month, were hurt by a drop in home sales. It reported a 62 per cent plunge in its net earnings to $26.1 million for the quarter ended March 31.

Revenue also fell 62 per cent to $94.2 million, mainly due to the lower recognition of revenue from its property development project, The Coast at Sentosa Cove.

While it warned that the property market is expected to remain soft in the near term, it expects earnings to be supported by recognition of income from the sale of its residential projects, which include Vertis at Amber Gardens and Quinterra in Holland Road, in the next few years.

Source : Straits Times - 30 May 2008

Stamford Land FY08 net profit up 28.7%

Filed under: Developer News, Financing, General — Propertymarketupdates @ 2:58 am

Stamford Land Corporation on Thursday unveiled a 28.7 per cent rise in its net profit for the year ended March 31, 2008.

Revenue, however, fell 7.3 per cent to $276.11 million (US$202.52 million) as it has a low inventory of completed residential properties for sale compared with last year.

The hotel segment saw higher revenue due to improved occupancy and room rates. The company also benefited from currency gains.

Its property development & investment segment recorded decrease in revenue in line with fewer units of Stamford Marque remaining for sale (22 units) in the current reporting year.

The company is proposing a final dividend of 1.5 cents a share and a special dividend of 1 cent a share. These are in addition to the interim dividend of 1.5 cents a share paid on March 12, 2008.

A year ago, it paid a first and final dividend of two cents a share and a special dividend of one cent a share.

Source : Business Times - 29 May 2008

June 24, 2008

Nassim condo turns in surprisingly good sales

Filed under: Developer News, General, Property Deal, Property Investment — Propertymarketupdates @ 3:29 am

A LUXURY condominium in the posh Nassim area has turned in surprisingly good preview sales, even as property analysts are predicting a sharp slowdown in the high-end home segment.

Buyers have taken up 38 units at Nassim Park Residences, forking out a whopping $10 million or more for each apartment, sources said.

The 100-unit development, which United Overseas Land (UOL) is building on the former Nassim Park site in Nassim Road, is understood to be priced upwards of $3,000 per sq ft (psf).

The project consists of only four-bedroom and penthouse apartments. Each of the four-bedders is believed to be at least 3,000 sq ft in size, while the penthouses are between 6,000 sq ft and 7,000 sq ft.

UOL declined to comment on the figures yesterday, but sources said the developer might not release some of the units and instead keep them for its own use.

Nassim Park Residences is the first major luxury development to be released for sale this year. Most other launches, especially large, high-end ones, have been held back as developers wait out the market gloom.

Elsewhere, some smaller projects have also seen brisk sales after discounts were offered. Over the Vesak Day weekend, Macly Group sold 60 per cent of the 102-unit Vutton in Novena at a 10 per cent discount off list prices, or about $1,100 psf to $1,400 psf.

Source : Straits Times - 28 May 2008

CapitaLand issues hold firm despite souring property views

Filed under: Developer News, Financing, General — Propertymarketupdates @ 3:05 am

BEARISH reports put out recently by analysts on the Singapore property market have failed to dampen traders’ appetite for covered warrants issued on property counters by foreign banks.

Yesterday, a call warrant issued by Deutsche Bank (DB) on CapitaLand rose two cents to 21 cents on a hefty volume of 10.7 million shares. In contrast, the mother share stayed flat at $6.30, with 5.25 million shares traded.

Traders were attracted by the warrant’s relatively long shelf life of five months and a strike price of $6.9289 which works out to a small premium over current market prices. ‘Well, I guess it boils down to how traders view the property market going forward,’ said a dealer.

Investors could be betting on the residential property market making a comeback in the second half, he said.

However, not all analysts are quite so confident. Barclays Capital and Credit Suisse recently forecasted that rents and prices might drop by up to 40 per cent in the next two years.

But UOB Kay Hian sniffed fresh investment opportunities in property stocks, arguing that they had already corrected 45 per cent from their mid-2007 peaks. Property counters, as a group, had also underperformed the Straits Times Index by 20 per cent in the past year, it added. As such, it has argued that the market had already ‘over-discounted’ the negative prospects of the property sector and advised investors to load up on them instead.

But there are others who are urging caution. Tracking the trading patterns of top property giant executives will shed insight on how these insiders view the market.

They noted that on May 16, CapitaLand chief executive Liew Mun Leong sold 500,000 shares at $6.87 apiece and another 300,000 shares at $6.88 each.

Even though Mr Liew has made a regular practice of cashing in on his stock options and selling the resulting shares, it still stirred a debate among traders. ‘If there is upside, surely, even Mr Liew will want to wait to get a better price,’ one dealer said.

Source : Straits Times - 28 May 2008

Developer joins bid for Shaw Brothers

Filed under: Developer News, General, Property Deal — Propertymarketupdates @ 2:42 am

Yeung Kwok-keung has HK$3b loan from chairman of Henderson Land

A GUESSING game over who will bid for Run Run Shaw’s flagship Shaw Brothers intensified over the weekend as a property developer emerged as a prime contender.

Businessman Yeung Kwok-keung has received HK$3 billion (S$523.2 million) in financing from Henderson Land Development chairman Lee Shau-kee to make a bid for Shaw Brothers, according to local press reports.

Mr Yeung is chairman of mainland property company Country Garden (Holdings), and his apparent interest in the media firm has perplexed some observers, fuelling speculation that he may be a front man for another interested party.

Earlier this month, media tycoon Mr Shaw announced that he is looking to sell his stake in entertainment flagship Shaw Brothers, the largest shareholder of Hong Kong’s No 1 broadcaster.

According to an announcement by Shaw Brothers, the 100-year-old media veteran is in talks with ‘representatives of interested parties’ regarding a possible sale.

Mr Shaw holds 75 per cent of Shaw Brothers, a holding company with a 26 per cent stake in Television Broadcasts (TVB), Hong Kong’s leading broadcaster.

Shaw Brothers said that no agreement has been reached on a sale, but press reports have tipped a number of private equity firms to be interested in the stake, including the Tianjin-based Bohai Fund and the Blackstone Group, run by former financial secretary Antony Leung.

The apparent interest of Country Garden’s Mr Yeung is one of the less obvious ones, although there are suggestions that he may be interested in the property assets of the company. Shaw Brothers has a large property jointly held in Clearwater Bay in the New Territories.

It is understood that the company has for some time been trying to get planning permission to develop the large plot into a residential area.

‘He (Mr Yeung) is a property developer, so it’s natural for him to be interested,’ said Allan Ng, executive director of investment bank BOC International. ‘But that piece of land has taken the company years to get government approval for redevelopment.’

One of the main stumbling blocks has been to improve road access to the site, which is situated along a busy stretch of road in the New Territories.

Henderson’s Mr Lee told reporters that his loan to Mr Yeung did not reflect any interest to become involved in the operations of Shaw Brothers or TVB.

A sale to a Hong Kong or Chinese bidder, however, would ease any concerns which Beijing might have that the stake remains in local hands.

In 2006, a bid by PCCW boss Richard Li to sell to foreign investors was thwarted after politics seemed to come into play.

It has long been expected that Mr Shaw would seek to offload his stake in the media company, given recent bouts of ill health. In 2006, the tycoon was believed to have discussed a possible sale with a consortium of local tycoons.

Analysts had suggested that Rupert Murdoch’s Newscorp and Malaysian broadcaster Astro could be potential buyers, but were given slim chances because of their foreign status.

TVB in March announced that its net profit last year rose 6 per cent to HK$1.26 billion as advertising revenue increased against the backdrop of a robust economy.

The company also recorded a one-off gain of HK$140 million during the year from a sale of a 20 per cent stake in unit TVB Pay Vision Holdings Ltd. Turnover during 2007 was HK$4.33 billion, up 3 per cent from 2006.

Revenue from terrestrial television broadcasting rose to HK$2.37 billion from HK$2.2 billion the previous year.

Source : Business Times - 27 May 2008

June 21, 2008

Bids for residential site fall short of expectations

Filed under: Auction, Developer News, General, Regulators — Propertymarketupdates @ 8:01 pm

URA closes tender after top bid of just $203 psf ppr for the 99-yr leasehold site

A RESIDENTIAL site in Choa Chu Kang Drive has attracted a top bid of just $203 per square foot per plot ratio (psf ppr), reflecting weak sentiment in the property market.

The Urban Redevelopment Authority (URA) yesterday closed the tender for the 99-year leasehold site, which has a maximum gross floor area of 572,600 square feet.


 
The tender drew five bids - Tian Hock Properties came out tops with an offer of $116.01 million, or $203 psf ppr.

This was 7.4 per cent higher than the next highest bid - from Sim Lian Land, at $108 million or $189 psf ppr. The lowest offer came from HHA Properties - at $80.2 million or $140 psf ppr.

Analysts had expected bids ranging from $230 to $270 psf ppr, or $131.7 million to $154.6 million in all.

‘The lower quantum of the bid prices is a reflection of the current subdued mood in the residential market, taking into account the current cautious environment and the relatively lacklustre take-up of new projects in the first four months of the year,’ said CB Richard Ellis Research’s executive director Li Hiaw Ho. But five bids reflect ‘fairly good interest in the site’, he added.

The director of research and advisory at Colliers International, Tay Huey Ying, noted the absence of larger developers such as Far East Organisation, saying this could be a sign of weak market sentiment.

While the bids for this site were ‘healthier compared with recent ones received for the Ten Mile Junction site’, Ms Tay also feels the bids were in ‘the lower range of expectations’.

A site at Choa Chu Kang Road and Woodlands Road, where the state-owned Ten Mile Junction currently sits, recently drew a top bid of only $61 million or $162 psf ppr.

Market observers believe that URA may nevertheless award the site. According to Ms Tay, the ‘bid price is fair under current market conditions’, and the project may result in a breakeven cost of about $550 psf and a selling price of $610-$620 psf.

Mr Li also reckons the top bid for Ten Mile Junction was ‘reasonably fair’. Based on the bid, he estimates a breakeven cost of $580-$600 psf, which would translate to a selling price of about $650 psf.

URA launched the tender for the Choa Chu Kang Drive site in March and will decide on a possible award after evaluating the bids.

Source : Business Times - 27 May 2008

Five bids for Choa Chu Kang tender

Filed under: Auction, Developer News, General, Land Sale — Propertymarketupdates @ 7:36 pm

A UNIT of property giant Far East Organization has put in the top bid for a condominium site at Choa Chu Kang Drive, about five minutes’ walk from Choa Chu Kang MRT Station.

Tian Hock Properties offered $116 million for the 204,514 sq ft plot, which works out to about $203 per sq ft per plot ratio (psf ppr).

The site drew a respectable five bids when its tender closed yesterday, possibly due to the perceived strength of the mass-market condo segment, experts said. Far East’s offer topped those of Sim Lian Land, Hong Leong Holdings, GuocoLand and Hiap Hoe.

But property consultants said the bid amounts remained low, reflecting a continuing caution and lacklustre demand in the overall property market.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, estimated the site’s breakeven cost at about $600 psf, based on the top bid. The units could be sold for $650 psf in about a year, he added.

Homes at nearby condos such as Yew Tee Residences, Northvale and The Warren have fetched $450 to $650 psf recently, Mr Li said.

Far East’s bid yesterday came in higher than the top bid submitted last month for a similar site at the junction of Choa Chu Kang Road and Woodlands Road.

That site, home to the Ten Mile Junction mall, drew a top bid of $61 million, or $162 psf ppr.

Source : Straits Times - 27 May 2008

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