Issue 47

Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2 p10 p14
Singapore Property News This Week Predicting the 1Q2012 Dip

FROM THE

EDITOR

Welcome to the 47th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

in the URA Private Property Price Index

Resale Property Transactions (March 28 April 3)

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SINGAPORE PROPERTY WEEKLY Issue 47

Singapore Property This Week

Residential
Freehold Cavenagh Gardens collective sale market on the also bring the price to $1,598 psf ppr (excluding balcony allowance) or $1,394 to $1,453 psf ppr (with balcony allowance) or lower with the Green Mark GFA incentive. The expected breakeven cost and sale price of units of a new development is $1,784 1,848 psf and $2,308 - 2,400 psf respectively with amalgamation and $1,962 - 2,040 psf and $2,308 - 2,400 psf respectively without. The site is expected to be popular since it can potentially be developed into high-end residences, serviced-apartments or SOHO apartments. This is especially since the site located next to the Istana and near Orchard road and has a redevelopment potential of 350 1000-sq ft units.

The site located along Cavenagh Road is asking for $460 - 480 million or $1,708 $1,782 psf ppr based on a 2.1 gross plot ratio (excluding balcony allowance) or $1,553 to $1,620 psf ppr (including balcony allowance). The 128,256-sq ft site is zoned residential and has a 269,338 sq ft potential GFA, which can be further expanded to 308,920 sq ft if it can be amalgamated with adjoining state land which would bring the total land area to around 150,000 sq ft, and the development is granted the Green Mark GFA incentive or bonus balcony gross floor area. This would
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SINGAPORE PROPERTY WEEKLY Issue 47 The tender will close on May 3. Far East sells 109 Hillsta units 109 units at 99-year leasehold 416-unit Hillsta project located at Choa Chu Kang Road/Phoenix Road has been sold, with 90% of the buyers mainly Singaporeans mostly already living in the vicinity. The project comprises condominium apartments, Sohostyle apartments with a 3.6 metres higherthan-usual floor-to-ceiling height and 20 strata townhouses. A one-bedroom condo unit costs an average of $1,042 psf, a twobedroom unit $984 psf and a three-bedroom unit $918 psf while Soho-style one-bedroom, two-bedroom and three-bedroom units costs an average of $1,198 psf, $1,106 psf and $1,093 psf respectively. Townhouses have an average cost of $907 psf. Top bid for Pasir Ris condo site 19.3% higher than next highest bid At $472 psf ppr, the top bid paid by Elitist Development for the 251,036 sq ft site located at Elias Road/Pasir Ris Drive 3 is a good 19.3% higher than the next bid. This might be due to the sites location, neighbouring a landed housing estate and near amenities like Elias Mall and Pasir Ris Park, as well as the positive outlook in the Outside Central Region market. The nine bids the site attracted is an indication of developers interest in the residential market. Given the bid price, the expected sale price is between $900 to $950 psf. Nevertheless, the site is expected to face much competition from upcoming projects yet to be launched as well as upcoming projects from government land sale (GLS) sites.

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SINGAPORE PROPERTY WEEKLY Issue 47 Two adjacent sites at Serangoon Rd up for collective sale The first site, Serangoon Mansion is asking for $23 million or $1,039 psf ppr if there is no development charge. Nine walk-up apartments with unit sizes of 1,141 sq ft to 1,195 sq ft sit on the 6,327 sq ft plot. The second site, which is adjacent to the first, is a two-storey shophouse at 23 Race Course Lane. It sits on 1,314 sq ft plot and is asking for $4.78 million or $1,039 psf ppr if there is no development charge. Both sites are zoned residential with commercial at first storey" and have a 3.5 gross plot ratio. The sites could be redeveloped into a mixed development with shops on the first level and 30 700-sq ft residential units on higher levels. The expected break-even price is around $1,500 psf. Buyers can either tender for one
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or both sites by May 10. Two freehold GCBs sold for a total of $91.6m The first Good Class Bungalow (GCB), a twostorey bungalow at Ridout Road over 20 years old with five bedrooms, a tennis court and swimming pool is sold for $60.6 million or $1,490 psf based on its 40,679 sq ft land area. The plot could potentially be subdivided for redevelopment into two GCBs. The second, a bungalow sitting on a 20,001 sq ft land at Binjai Park was sold for $31 million, or $1,550 psf. The two-storey-plus basement bungalow which won the Greenmark Platinum Award has six bedrooms, a gym, home theatre, steam room, lift, and dehumidifiers in all rooms. The GFA is about 14,300 sq ft.
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SINGAPORE PROPERTY WEEKLY Issue 47 Commercial Making industrial space affordable Some measures in place to ensure the affordability of industrial space include JTCs innovative infrastructure projects which help SMEs to reduce business costs and the upfront provision of capital-intensive facilities. The upcoming supply of industrial land was also increased to 24 ha in H1 2012, some with lower lease periods. The project completion period for the sites sold under the industrial GLS is also reduced from eight years to between five to seven years. These will help to increase the supply of industrial space and keep rents low. The government may also sell the remaining JTC factory spaces which are mostly smaller flatted factories to owners and occupiers instead of Real Estate Investment Trusts (REITs).
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Hong Kongs Chiu family sells 51 Parkway Centre office units for $53.37m The 51 strata-titled units located on the second to ninth floors, and the thirteenth floor of Parkway Centre, which has 68 years of lease remaining, are sold to a company led by Mr Kishore Buxani. The price of $53.375 million is equivalent to $1,043 psf on the total area of 51,191 sq ft. The 51 units sold are all leased out at $4 to $4.80 psf with a net yield of 4.2%. These units make up 44% of the 116,950 sq ft total strata area in the 13-storey building and 43% of the buildings total share value. While the company may initiate an en bloc sale of the entire building if other owners are keen to do so, they intend to first concentrate on increasing the value of the entire building either directly or through the Management Corporation Strata Title.

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SINGAPORE PROPERTY WEEKLY Issue 47 The building has a total of three retail units on the first storey and 107 units on the remaining storeys, with some on the higher levels boasting seaviews, and has a large multistorey car park and the Parkway Parade mall as its neighbour. Oxley purchases McDonalds Place for $150 million Freehold McDonald's Place at King Albert Park located at Bukit Timah Road/ Clementi Road near the future King Albert Park MRT station has all its seven strata commercial units sold for $150 million to Oxley Holdings. The two-storey building on the 5,534.8 sq m site zoned for commercial and residential use has a plot ratio of 3. The price of $150 million is equivalent to $2,918 psf of net lettable area based on the current lettable area of 4,776 sq m, or $1,207 psf ppr based on its 16,604 sq m potential GFA and a $65.8 million development charge.

60-year leasehold Aljunied industrial site attracts 14 bids with $43.4 m top bid
The top bid of $43.4 million or $255.44 psf ppr for the 0.63 ha industrial site located at Sims Drive/ Aljunied Road came from Fragrance Biz Space, beating out 13 other bidders. This is despite the new conditions on strata subdivision for industrial developments. However, this is not unexpected given the plots location in a mature estate and its relatively small size. The site zoned Business 1 has a maximum permissible gross plot ratio of 2.5. Its expected breakeven price is around $400 psf to $430 psf with an expected rental rate of $2.80 - 3.50 psf.

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SINGAPORE PROPERTY WEEKLY Issue 47 Things to look out for at Changi City As Singapores largest integrated business park development sitting on a 4.7 ha land, Changi City includes three-storey retail mall Changi City Point, a 313-room hotel and a business space tower, ONE@Changi City. Changi City Point has a total net lettable area of 207,000 sq ft with a 450-seater rooftop arena for performances and other activities, out of which 96% has been leased out. ONE@Changi City has a total net lettable floor area of 650,000 sq ft on nine levels, 315,000 sq ft of which has been leased by Credit Suisse. The average rent is around $4-5 psf. UOL group to develop One KM The upcoming three-storey-plus-basement One KM currently being developed by UOL group positioning itself as an edutainment
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mall with enrichment schools and other education-related trades since there are 20 local and international schools with a total student population of 37,000 located in the vicinity. There will be 170 to 200 shop units of sizes 400 sq ft to 600 sq ft in the mall with a 210,000 sq ft net lettable area, out of which 20,000 sq ft has been leased to Cold Storage. UOL will likely hold the retail units for investment purposes and rent them out at rates up to over $30 psf. The mall located next to the upcoming Paya Lebar Central Commercial Hub and near Paya Lebar MRT station will have 530 car park lots. 244-unit freehold Katong Regency, located above the mall, is expected to offer 126 one-bedroom or one-bedroom-plus-study units, 58 twobedroom or two-bedroom-plus-study units, 36 three-bedroom or three-bedroom-plusstudy units, 18 sky suites and 6 penthouses
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SINGAPORE PROPERTY WEEKLY Issue 47 at $1,500 - 1,600 psf at its launch. Office rentals to fall by no higher than 15% in 2012 (according to analysts) occupancy rates is considered fairly stable with major lease renewals and the decent take-up in newly or soon-to-completed projects. Demand for office spaces has been on the decline as a result of the Eurozone debt crisis and slower growth in the Chinese and Japanese economies, which has led to corporate restructuring and a hold on expansion. The impact has not been severe so far, but rents are expected to fall given the cautionary stance many will take in light of the uncertain economy and the upcoming supply.

The fall in office rents is expected to fall by a maximum of 15% in 2012, much lower than the 20-50% fall in 2009 financial crisis. The average gross monthly rental value for Grade A office space in the Raffles Place/New Downtown area fell by 5.3% to $9.76 psf in Q1 2012 from Q4 2011. The biggest fall is from Grade B offices in the Beach Road micro-market, which fell by 8.8% to $5.21 psf in Q1 2012. The biggest fall in average occupancy rates for Grade A offices is in the Orchard Road area, from 91.8% in Q4 2011 to 84.4% in Q1 2012. The average occupancy rate in Raffles Place/New Downtown fell from 88% in Q4 2011 to 87.2% in Q1 2012. Nevertheless, the overall islandwide
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Industrial properties the best performing property sector in the Q1 2012

The average capital values for prime freehold factories on the ground floor and upper floor space increased by 4.8% to $633 psf and 5.3% to $560 psf from Q4 2011 to Q1 2012.
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SINGAPORE PROPERTY WEEKLY Issue 47 Prime factory prices also increased slightly higher than the 1.2% and 2.1% growth for their respective ground and upper floor space in the same period. One reason for this could be the new conditions on subdividing GLS sites. Growths in rents, however, have been slowing; with a mere 0.5-0.8% increase from Q4 2011 to Q1 2012 compared to the 2% increase in Q4 2011. The average monthly gross rents for prime factory space are $2.39 psf for ground floor space and $2.08 psf for upper floor space, while the average monthly gross rents for warehouses were $2.47 psf and $2.04 psf for ground and upper floor spaces respectively. The rents for business parks fell by 1.5% to $3.90 psf in Q1 2012; rents for high-specs space also fell, both a result of a fall in demand and an upcoming increase in supply. Nevertheless, demand for industrial space is likely not to fall a lot, which should result in industrial rent declines not exceeding 3% for the year. Capital values are also expected to remain fairly stable.

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SINGAPORE PROPERTY WEEKLY Issue 47

Predicting the 1Q2012 Dip in the URA Private Property Price Index

By Getty Goh
URA released the 1Q2012 flash estimate for the Private Property Price Index (PPPI) on 2 April 2012, which showed a moderate decline for the index. Even though the drop was marginal, it was significant as it represented the first decline since the property market rebounded strongly from the 2008 Global Financial Crisis. To the casual observer, the dip may come as a surprise. After all, there were many media reports on how strong new property sales were in the first three months of 2012.

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SINGAPORE PROPERTY WEEKLY Issue 47 One of the local property portals even reported that private homes transaction in January 2012 was a whopping 2,077 units compared to just 670 in December 2011. Looking at such media reports, it would not have been too unreasonable for many people to go away with the impression that property prices were still on the rise. Trends in the Singapore property market Those of you who have read my articles (see blog by Mr. Propwise in Dec 2011) or attended my weekly free preview would have heard me share my bearish views since late 2011. Hence, this decline did not come as a surprise. So how was I able to tell that the market was at a tipping point? To me, the answer lies in the statistical trends. While my company relies on several indicators to assess the Singapore property market, I often use the Ascendant Assets Indicator (AAI) to tell me how the overall market is performing. The basic premises of the AAI index are (1) a lead-lag relationship exists between the stock and property market and (2) we are able to tell how the economy is performing by analysing the correlation between the stock and property market. To illustrate, let us look at Figure 1. The correlation between stocks and properties is observed to be high, i.e. when the AAI (the blue line) is more than 50% (represented by the dotted line). These phases of strong correlation occur when both stock and property prices are moving in tandem upwards (during bullish economic conditions)

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SINGAPORE PROPERTY WEEKLY Issue 47 or downwards (during bearish economic conditions). Phases of weak correlation (blue line below the dotted line) occur when stock prices diverge from property prices. This happens

Figure 1: Ascendant Assets Index (correct as at 2011Q4)

because stocks, which are more liquid, react

faster to changing market conditions. As a result, yellow phases indicate that the economy is turning point.

Deciphering the market trends

If you were to look at Figure 2, you will notice that past yellow volatile zones (highlighted in red) coincided with the decline of the URA PPPI (pink line). Based on this recurring trend, I was able to tell that economic conditions were gradually becoming more Source: URA and Ascendant Assets Pte Ltd uncertain and that a decline in the URA PPPI

was just around the corner.

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SINGAPORE PROPERTY WEEKLY Issue 47 Figure 2: Volatile market conditions and the drop in URA PPPI does not happen by chance. Now that you are aware that such market trends exist, hopefully you would be able to use it and make a more informed investment decision the next time round. By Getty Goh, Director of Ascendant Assets, a real estate research and investment consultancy firm.

Source: URA and Ascendant Assets Pte Ltd As the saying goes, knowledge is power. The ability to find good deals and knowing when is the most optimal time to buy or sell a property

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SINGAPORE PROPERTY WEEKLY Issue 47

Non-Landed Residential Resale Property Transactions for the Week of Mar 28 Apr 3
Postal District 2 3 3 4 4 5 5 5 5 5 8 8 9 9 9 9 9 9 9 9 9 10 10 10 10 Project Name ICON MERAPRIME QUEENS CARIBBEAN AT KEPPEL BAY CARIBBEAN AT KEPPEL BAY ONE-NORTH RESIDENCES HERITAGE VIEW BOTANNIA DOVER PARKVIEW THE INFINITI CITY SQUARE RESIDENCES CITYLIGHTS HELIOS RESIDENCES ORCHARD VIEW VIDA THE TRILLIUM THE COSMOPOLITAN PARC EMILY WATERFORD RESIDENCE LANGSTON VILLE OLEANAS RESIDENCE GALLOP GREEN GALLOP GABLES AVALON REGENCY PARK Area Transacted Price Tenure (sqft) Price ($) ($ psf) 657 1,238,888 1,887 99 1,098 1,450,000 1,321 99 1,195 1,320,000 1,105 99 883 1,450,000 1,643 99 1,216 1,800,000 1,480 99 592 900,000 1,520 99 1,313 1,488,000 1,133 99 1,227 1,325,000 1,080 956 936 975,000 1,041 99 1,249 1,180,000 945 FH 570 932,000 1,634 FH 1,356 1,850,000 1,364 99 1,668 6,001,900 3,597 FH 2,530 6,360,000 2,514 FH 527 1,190,000 2,256 FH 2,217 4,790,000 2,160 FH 1,141 2,300,000 2,016 FH 1,227 1,963,200 1,600 FH 1,195 1,619,888 1,356 999 936 1,260,000 1,345 999 1,668 2,180,000 1,307 FH 2,992 5,684,800 1,900 FH 3,111 5,300,000 1,704 FH 1,582 2,628,000 1,661 FH 3,175 5,250,000 1,653 FH Postal District 10 10 10 10 10 10 10 11 11 11 11 11 11 12 13 14 14 14 14 15 15 15 15 15 15 Project Name SPRING GROVE SOMMERVILLE PARK PROXIMO THE ASTON MUTIARA VIEW THE TESSARINA THE SERENADE @ HOLLAND PARK INFINIA AT WEE NAM NEWTON SUITES MONTEBLEU MONTEBLEU NINETEEN SHELFORD ROAD THE ANSLEY TRELLIS TOWERS BLOSSOMS @ WOODLEIGH THE SUNNY SPRING SIMSVILLE STARVILLE WING FONG MANSIONS THE SOVEREIGN THE SEAFRONT ON MEYER THE COTZ PEBBLE BAY COTE D'AZUR THE WATERSIDE Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,012 1,600,000 1,581 99 1,948 3,000,000 1,540 FH 1,119 1,700,000 1,519 FH 678 1,010,000 1,489 FH 1,173 1,500,000 1,278 FH 1,679 2,100,000 1,251 FH 3,746 3,830,000 1,022 99 560 1,118,000 1,997 FH 1,238 2,330,000 1,882 FH 807 1,300,000 1,610 FH 807 1,285,000 1,592 FH 947 1,340,000 1,415 FH 1,302 1,650,000 1,267 FH 1,485 1,660,000 1,118 FH 1,410 1,638,000 1,162 FH 1,109 930,000 839 FH 1,528 1,220,000 798 99 2,260 1,600,000 708 FH 1,163 815,000 701 FH 3,305 7,000,000 2,118 FH 1,066 1,620,000 1,520 FH 398 590,000 1,481 FH 2,174 2,960,000 1,361 99 1,109 1,488,000 1,342 99 2,142 2,850,000 1,331 FH

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SINGAPORE PROPERTY WEEKLY Issue 47

Postal District 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 15 16 16 16 16 16 16 17 17 17 17 17 18 Project Name THE BELVEDERE CASA MEYFORT COTE D'AZUR PARKSHORE PALAZZETTO COSTA RHU THE AMBROSIA THE AMBRA EAST GROVE GOLD LEAF MANSIONS THE GRANDIFLORA UNITED MANSION PINEHURST CONDOMINIUM EAST GROVE TELOK MANSION PALM LOFT COSTA DEL SOL COSTA DEL SOL RIVIERA RESIDENCES BAYSHORE PARK BAYSHORE PARK EAST MEADOWS FERRARIA PARK CONDOMINIUM AVILA GARDENS BALLOTA PARK CONDOMINIUM BALLOTA PARK CONDOMINIUM BALLOTA PARK CONDOMINIUM EASTPOINT GREEN Area (sqft) 1,302 1,765 840 990 818 1,345 1,313 1,130 883 915 1,087 1,356 1,302 1,055 1,550 1,679 947 1,313 786 936 936 1,195 883 1,604 1,066 1,313 1,432 958 Transacted Price ($) 1,728,000 2,320,000 1,060,000 1,200,000 920,000 1,500,000 1,420,000 1,190,000 895,000 902,000 1,010,000 1,250,000 1,200,000 960,000 1,200,888 1,300,000 1,350,000 1,650,000 930,000 880,000 855,000 1,085,000 830,000 1,320,000 830,000 906,800 988,000 770,000 Price Tenure ($ psf) 1,327 FH 1,314 FH 1,263 99 1,212 FH 1,125 FH 1,115 99 1,081 FH 1,053 FH 1,014 FH 986 FH 929 FH 922 FH 921 FH 910 FH 775 FH 774 FH 1,425 99 1,256 99 1,184 FH 940 99 913 99 908 99 940 FH 823 FH 779 FH 691 FH 690 FH 804 99

Postal District 18 19 19 19 19 20 20 20 20 20 20 21 21 21 21 21 21 21 21 21 21 21 21 22 22 22 22 22

Project Name MELVILLE PARK GOLDEN HEIGHTS SUNGLADE EVERGREEN PARK HOUGANG GREEN BISHAN 8 GRANDEUR 8 THE GARDENS AT BISHAN BRADDELL VIEW THE GARDENS AT BISHAN SIN MING PLAZA GARDENVISTA PANDAN VALLEY THE RAINTREE SIGNATURE PARK PANDAN VALLEY BUKIT REGENCY SIGNATURE PARK BUKIT REGENCY HIGH OAK CONDOMINIUM HILLVIEW GREEN SHERWOOD TOWER SHERWOOD TOWER LAKEHOLMZ THE CENTRIS LAKEHOLMZ PARC VISTA LAKESIDE TOWER

Area (sqft) 1,206 764 1,152 1,238 1,141 1,163 1,259 1,152 1,453 1,367 2,142 1,130 1,313 947 1,055 2,239 1,421 1,421 1,249 1,216 1,442 1,518 1,421 1,507 1,894 1,496 1,270 1,970

Transacted Price ($) 860,000 960,000 1,280,000 860,000 790,000 1,400,000 1,220,000 1,060,000 1,150,000 1,080,000 1,480,000 1,330,000 1,330,000 950,000 1,058,000 2,200,000 1,350,000 1,290,000 1,130,000 1,100,000 1,235,000 1,150,000 988,000 1,255,000 1,558,888 1,208,000 1,010,000 905,888

Price Tenure ($ psf) 713 99 1,256 FH 1,111 99 695 99 692 99 1,204 99 969 99 920 99 791 99 790 99 691 FH 1,177 99 1,013 FH 1,003 99 1,003 FH 983 FH 950 FH 908 FH 905 FH 904 99 856 999 758 99 695 99 833 99 823 99 807 99 795 99 460 99

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SINGAPORE PROPERTY WEEKLY Issue 47

Postal District 23 23 23 23 23 23 23 23 23 23 26 26 27 27 27 Area (sqft) 1,658 947 1,227 1,432 1,195 1,087 1,259 1,087 1,163 1,216 1,216 1,066 872 1,249 1,249 Transacted Price Tenure Price ($) ($ psf) 1,558,800 940 999 860,000 908 FH 1,100,000 896 999 1,230,000 859 999 970,000 812 99 820,000 754 99 935,000 742 99 800,000 736 99 850,000 731 99 865,000 711 99 950,000 781 99 820,000 769 99 720,000 826 99 838,000 671 99 800,000 641 99

Project Name CASHEW HEIGHTS CONDOMINIUM CHANTILLY RISE CASHEW HEIGHTS CONDOMINIUM HILLVIEW RESIDENCE HILLVIEW REGENCY NORTHVALE GUILIN VIEW NORTHVALE REGENT HEIGHTS PALM GARDENS CASTLE GREEN SEASONS PARK ORCHID PARK CONDOMINIUM ORCHID PARK CONDOMINIUM ORCHID PARK CONDOMINIUM

NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data.

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