Source : The Business Times
Aug 11, 2007
HOTEL Properties managing director Ong Beng Seng and his family members have bought an entire block of 180 apartments at Costa del Sol on Bayshore Road, for about $200.77 million or $820 per square foot, BT understands.
The units were sold by the 99-year leasehold project's developer, Japura Development Pte Ltd, a unit of Hong Kong tycoon Li Ka-shing's Cheung Kong Holdings. The 906-unit condo is now fully sold, concluding a 10-year episode for Japura. It bought the site for the condo in early 1997.
The shareholders in the entities that bought Costa del Sol's final block are said to include Mr Ong, his wife Christina, her brother David Fu and his wife. Mr Ong's brother, Beng Huat, also has a small stake.
The deal is said to have been driven by Mr Fu. All the 180 units in Block 70 boast unobstructed views of East Coast Park and the sea. They were sold for between $700 psf and $950 psf. The 180 apartments have a combined floor area of nearly 245,000 sq ft.
'The apartments are leased, which means the Ongs and Fus can enjoy immediate rental return on their investment; plus they can look forward to reaping capital appreciation in the not-too-distant future as this segment of the market has not gone up much,' said a seasoned market watcher.
Going by two recent deals in two other blocks in the development - $844 psf for a low-floor apartment and $1,108 psf for a higher-floor unit - the Ong/Fu consortium seems to be already in the money on its investment. The sale of the 180 apartments means that Japura has now fully sold the 906-unit condo, seven long years after it began marketing the project in May 2000. Japura's initial average price was $765 psf but by February 2005, it had trimmed this to $650 psf for a relaunch of about 600 available units then. The project, comprising seven 30-storey blocks, received Temporary Occupation Permit between 2003 and 2004.
Japura paid $683 million or $456 psf of potential gross floor area for the 427,300 sq ft site in January 1997, before the Asian financial crisis hit. Its bid was considered aggressive then, at least 30 per cent above market expectations. The second highest bid in that tender was $351 psf per plot ratio, made by a joint venture between Pidemco Land (now part of CapitaLand) and Malayan Credit (now known as MCL Land).
Monday, August 13, 2007
Sunday, August 12, 2007
Sizzling real estate sector
Source : The Business Times
Aug 9, 2007
AFTER years of being in the doldrums, the Singapore property market has been staging a spectacular recovery in the past couple of years. The rally is being fuelled by a surge in confidence from foreign investors as well as local buyers. The real estate sector is firing on all cylinders, including investment sales, residential and office.
A whopping $24.81 billion worth of investment sale deals were sealed in the first six months of this year, according to CB Richard Ellis (CBRE). Investment sale deals - a gauge of major property players' confidence level in the mid-to-long-term prospects for the real estate sector - include collective sales, other land deals, transactions of entire office and other buildings, as well as strata-titled units above $5 million. The first half of 2007's sparkling investment sale numbers include some 75 collective sales worth $9.3 billion, higher than $8.2 billion for the whole of last year.
CBRE expects the full-year investment sale figure to surpass the record $30.51 billion set in 2006, hitting as high as $35 billion.
Major deals in H1 this year include the $1.04 billion sale of Temasek Tower, the collective sale of Leedon Heights ($835 million) and Novotel Clarke Quay Hotel ($201 million).
In the residential sector, the Urban Redevelopment Authority's (URA) Q2 price index for private homes was up 8.3 per cent from the preceding quarter and 21 per cent higher year on year. And latest Q2 official figures show that the residential price recovery that began some two years ago in the high-end segment fuelled by foreign buyers has started filtering down to other segments of the market, based on URA's sub-indices.
Prices of non-landed private homes in the Core Central Region (CCR) - which includes prime districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - were up 7.9 per cent in Q2 over Q1, while prices of non-landed homes in Rest of Central Region (RCR) - which includes areas like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong - rose 8.1 per cent over the same period. The Outside Central Region (OCR), covering suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, posted a 7.2 per cent quarter-on-quarter rise in Q2.
The rental market has also been sizzling, with residential rental indices of non-landed private homes rising 12 per cent in Q2 over Q1 for the CCR, and by 10 per cent and 9.4 per cent respectively for RCR and OCR in the same period. The Q2 rental indices were up around 35 per cent from a year ago for each of the CCR and RCR, and by 28.3 per cent for OCR.
In the public housing segment, the Housing & Development Board's (HDB) resale flat price index rose 3 per cent quarter-on-quarter in Q2, compared with a 1.3 per cent gain in Q1.
The outlook for the residential sector is bright. Most property consultants predict that URA's overall private home price index may surge a further 8 to 15 per cent in the second half, chalking a full-year increase of 23 to 30 per cent. Analysts generally expect HDB resale flat prices to post an 8 to 10 per cent full-year increase.
Interestingly, collective sales have caused a ripple effect. For instance, those who sell their homes through en bloc sales are looking for replacement homes, in many cases outside the prime districts where they sold their en bloc properties because of rapidly rising prices in the prime locations.
This has helped to spur a recovery in the other market segments, even HDB resale flats, where a few units have been purchased at record prices by those who sold their private homes through en bloc sales.
At the same time, as developers pull down en bloc sale sites to redevelop them, the resulting shortage of prime district apartments has helped fuel rental hikes for such homes. In the industrial property market, average rents for all categories of space increased in Q2 this year. High-tech space posted the biggest quarter-on-quarter gain of 11.9 per cent to $2.35 psf per month, as the office space shortage and rising office rentals led many qualifying occupiers to move to high-tech properties, according to CBRE. The average monthly prime retail rent along Orchard Road posted a 1.8 per cent quarter-on quarter gain in Q2 to $34.40 psf - close to the $35.10 psf achieved in 1996.
As for the office sector, a shortage of space in the near term, coupled with strong demand from occupiers including big-wig international financial institutions have been the key factors driving a whopping 80 per cent year-on-year rise in CBRE's average prime rental in Q2 to $10.80 psf a month. This surpassed the 1996 peak of $9.90 psf a month, and is fast closing in on the 1990 historic peak of $11.50 psf a month. The Q2 office rental figure is also more than double the $4 psf during the current cycle trough in Q1 2004.
Market watchers expect office rents to head further north in the next few years because of the supply crunch. However, the government has been releasing more office sites, including the maiden 'transitional office' plot which can be built into a low-rise office building in about a year.
In addition, it has made available more 99-year condo sites, mostly in suburban locations. Besides tackling the supply side, the authorities have also begun releasing more property market data so that participants can make more informed decisions. So far, the indication from government is that it is not inclined to intervene to cool demand.
Fundamentals for the Singapore real estate sector remain strong for the next couple of years, at least - barring unforeseen circumstances.
Of course, a sustained rout in the local stock market because of the selldown on Wall Street is likely dent sentiment in the Singapore property market. But there could also be a more direct hit if the US sub-prime mortgage default fiasco dries up some of the liquidity that has been powering the local real estate sector's sparkling recovery.
Aug 9, 2007
AFTER years of being in the doldrums, the Singapore property market has been staging a spectacular recovery in the past couple of years. The rally is being fuelled by a surge in confidence from foreign investors as well as local buyers. The real estate sector is firing on all cylinders, including investment sales, residential and office.
A whopping $24.81 billion worth of investment sale deals were sealed in the first six months of this year, according to CB Richard Ellis (CBRE). Investment sale deals - a gauge of major property players' confidence level in the mid-to-long-term prospects for the real estate sector - include collective sales, other land deals, transactions of entire office and other buildings, as well as strata-titled units above $5 million. The first half of 2007's sparkling investment sale numbers include some 75 collective sales worth $9.3 billion, higher than $8.2 billion for the whole of last year.
CBRE expects the full-year investment sale figure to surpass the record $30.51 billion set in 2006, hitting as high as $35 billion.
Major deals in H1 this year include the $1.04 billion sale of Temasek Tower, the collective sale of Leedon Heights ($835 million) and Novotel Clarke Quay Hotel ($201 million).
In the residential sector, the Urban Redevelopment Authority's (URA) Q2 price index for private homes was up 8.3 per cent from the preceding quarter and 21 per cent higher year on year. And latest Q2 official figures show that the residential price recovery that began some two years ago in the high-end segment fuelled by foreign buyers has started filtering down to other segments of the market, based on URA's sub-indices.
Prices of non-landed private homes in the Core Central Region (CCR) - which includes prime districts 9, 10, 11, Downtown Core (including Marina Bay) and Sentosa - were up 7.9 per cent in Q2 over Q1, while prices of non-landed homes in Rest of Central Region (RCR) - which includes areas like Bukit Merah, Queenstown, Geylang, Toa Payoh and Katong - rose 8.1 per cent over the same period. The Outside Central Region (OCR), covering suburban mass-market locations like Woodlands, Clementi, Jurong, Hougang, Tampines and Bedok, posted a 7.2 per cent quarter-on-quarter rise in Q2.
The rental market has also been sizzling, with residential rental indices of non-landed private homes rising 12 per cent in Q2 over Q1 for the CCR, and by 10 per cent and 9.4 per cent respectively for RCR and OCR in the same period. The Q2 rental indices were up around 35 per cent from a year ago for each of the CCR and RCR, and by 28.3 per cent for OCR.
In the public housing segment, the Housing & Development Board's (HDB) resale flat price index rose 3 per cent quarter-on-quarter in Q2, compared with a 1.3 per cent gain in Q1.
The outlook for the residential sector is bright. Most property consultants predict that URA's overall private home price index may surge a further 8 to 15 per cent in the second half, chalking a full-year increase of 23 to 30 per cent. Analysts generally expect HDB resale flat prices to post an 8 to 10 per cent full-year increase.
Interestingly, collective sales have caused a ripple effect. For instance, those who sell their homes through en bloc sales are looking for replacement homes, in many cases outside the prime districts where they sold their en bloc properties because of rapidly rising prices in the prime locations.
This has helped to spur a recovery in the other market segments, even HDB resale flats, where a few units have been purchased at record prices by those who sold their private homes through en bloc sales.
At the same time, as developers pull down en bloc sale sites to redevelop them, the resulting shortage of prime district apartments has helped fuel rental hikes for such homes. In the industrial property market, average rents for all categories of space increased in Q2 this year. High-tech space posted the biggest quarter-on-quarter gain of 11.9 per cent to $2.35 psf per month, as the office space shortage and rising office rentals led many qualifying occupiers to move to high-tech properties, according to CBRE. The average monthly prime retail rent along Orchard Road posted a 1.8 per cent quarter-on quarter gain in Q2 to $34.40 psf - close to the $35.10 psf achieved in 1996.
As for the office sector, a shortage of space in the near term, coupled with strong demand from occupiers including big-wig international financial institutions have been the key factors driving a whopping 80 per cent year-on-year rise in CBRE's average prime rental in Q2 to $10.80 psf a month. This surpassed the 1996 peak of $9.90 psf a month, and is fast closing in on the 1990 historic peak of $11.50 psf a month. The Q2 office rental figure is also more than double the $4 psf during the current cycle trough in Q1 2004.
Market watchers expect office rents to head further north in the next few years because of the supply crunch. However, the government has been releasing more office sites, including the maiden 'transitional office' plot which can be built into a low-rise office building in about a year.
In addition, it has made available more 99-year condo sites, mostly in suburban locations. Besides tackling the supply side, the authorities have also begun releasing more property market data so that participants can make more informed decisions. So far, the indication from government is that it is not inclined to intervene to cool demand.
Fundamentals for the Singapore real estate sector remain strong for the next couple of years, at least - barring unforeseen circumstances.
Of course, a sustained rout in the local stock market because of the selldown on Wall Street is likely dent sentiment in the Singapore property market. But there could also be a more direct hit if the US sub-prime mortgage default fiasco dries up some of the liquidity that has been powering the local real estate sector's sparkling recovery.
UOB tightens up on home loans in face of dizzy market
Source : The Business Times
Aug 9, 2007
(SINGAPORE) Wee Cho Yaw has done it again, though only time will tell if he was ahead of the curve.
At a time when property prices have started to touch giddy heights, the chairman of United Overseas Bank (UOB) has reportedly asked his institution to tighten lending criteria.
Since late last month, UOB has been lending only 80 per cent of a home's valuation, even though most banks are willing to stump up 90 per cent of the selling price.
UOB has also decided to put its own cap on valuations, which appear more conservative than the current market prices.
Mr Wee, arguably Singapore's sharpest banker, stepped down as chief executive of UOB in April this year and was succeeded by his oldest son, Ee Cheong.
UOB's stricter lending criteria mean that some potential borrowers have been turned away. A UOB mobile sales banker complained that she has been losing sales but has told prospective customers that she can try to appeal on their behalf. UOB is believed to be the first bank to make its lending norms more stringent.
At UOB's second-quarter results on Tuesday, Eddie Khoo, executive vice-president, personal financial services, said that less than 10 per cent of the bank's new home loans this year provided more than 80 per cent financing.
'We require a higher cash portion,' said Mr Khoo.
He said that more than 80 per cent of UOB's home loans were for owner occupation and that
foreigners accounted for 20 per cent of home loan customers.
For certain hot projects in the prime districts such as Orchard Residences, Scotts Square or St Regis Residences, UOB has put a valuation cap of $3,600 per square foot (psf), even though sales and sub-sales have been reported at much higher prices.
Scotts Square, launched last week, saw 169 units sold at an average price of $3,983 psf. The highest price paid was $4,430 psf for a one-bedroom apartment on the 41st floor, of the 338-unit project, said Wheelock Properties, the developer.
The median price for St Regis Residences on Cuscaden Road, developed by City Developments, is $3,713 psf, according to Urban Redevelopment Authority data. In June, it was reported that a unit went for $4,635 psf at the 173-unit St Regis Residences which has only 15 units unsold.
At selected projects in the upmarket districts 9, 10, 11 and in Marina Bay, UOB is said to have set the valuation cap at not more than $2,600 psf.
Sub-sales of The Sail @ Marina Bay are being advertised at prices ranging from $1,900 psf to over $3,500 psf. Caveats lodged show that units were sold from prices as low as $1,249 psf for The Sail which was first launched in 2004.
Even for the recently launched Fontaine Parry near Serangoon, UOB is said to have a valuation cap of $834 psf. According to sole agent Knight Frank, the first phase of Fontaine Parry, which was sold out, saw prices starting at $850 psf and some sub-sales are now going for $900 psf.
For the first half of 2007, UOB grew its total home loans book 18 per cent, outpacing the industry average, to $20.7 billion. DBS's group home loans rose 8.75 per cent to $26.1 billion. UOB said Singapore mortgages were up 15 per cent while DBS reported an almost similar growth of 14 per cent.
In August 1995, Mr Wee said famously: 'I don't think the property market will collapse but prices have reached a high and the upside is limited.'
Although still sympathetic to first-time property buyers or HDB upgraders, he said the bank had more stringent criteria for speculative buyers and those investing in second properties.
The strategy meant that UOB lost some market share in property loans.
UOB that year reduced financing to only 65-70 per cent of the purchase price of a property, compared to about 90 per cent in 1992, just before the height of the property frenzy which peaked in 1996 before crashing.
Singapore's property market subsequently went into a long depression, which lasted for the most part of the decade until 2003 and sent many borrowers into negative equity - where the size of their loan was larger than the value of their property.
The bank is opting for caution again.
Said a spokesman: 'UOB has always taken a prudent approach in its credit assessment process. A loan application is assessed on the creditworthiness of the borrower as well as the merits of the property. We would consider the loan application favourably if the borrower meets our criteria. From time to time, the bank reviews its home mortgage policies, and if necessary, adjustments may be made to align with market conditions.'
Aug 9, 2007
(SINGAPORE) Wee Cho Yaw has done it again, though only time will tell if he was ahead of the curve.
At a time when property prices have started to touch giddy heights, the chairman of United Overseas Bank (UOB) has reportedly asked his institution to tighten lending criteria.
Since late last month, UOB has been lending only 80 per cent of a home's valuation, even though most banks are willing to stump up 90 per cent of the selling price.
UOB has also decided to put its own cap on valuations, which appear more conservative than the current market prices.
Mr Wee, arguably Singapore's sharpest banker, stepped down as chief executive of UOB in April this year and was succeeded by his oldest son, Ee Cheong.
UOB's stricter lending criteria mean that some potential borrowers have been turned away. A UOB mobile sales banker complained that she has been losing sales but has told prospective customers that she can try to appeal on their behalf. UOB is believed to be the first bank to make its lending norms more stringent.
At UOB's second-quarter results on Tuesday, Eddie Khoo, executive vice-president, personal financial services, said that less than 10 per cent of the bank's new home loans this year provided more than 80 per cent financing.
'We require a higher cash portion,' said Mr Khoo.
He said that more than 80 per cent of UOB's home loans were for owner occupation and that
foreigners accounted for 20 per cent of home loan customers.
For certain hot projects in the prime districts such as Orchard Residences, Scotts Square or St Regis Residences, UOB has put a valuation cap of $3,600 per square foot (psf), even though sales and sub-sales have been reported at much higher prices.
Scotts Square, launched last week, saw 169 units sold at an average price of $3,983 psf. The highest price paid was $4,430 psf for a one-bedroom apartment on the 41st floor, of the 338-unit project, said Wheelock Properties, the developer.
The median price for St Regis Residences on Cuscaden Road, developed by City Developments, is $3,713 psf, according to Urban Redevelopment Authority data. In June, it was reported that a unit went for $4,635 psf at the 173-unit St Regis Residences which has only 15 units unsold.
At selected projects in the upmarket districts 9, 10, 11 and in Marina Bay, UOB is said to have set the valuation cap at not more than $2,600 psf.
Sub-sales of The Sail @ Marina Bay are being advertised at prices ranging from $1,900 psf to over $3,500 psf. Caveats lodged show that units were sold from prices as low as $1,249 psf for The Sail which was first launched in 2004.
Even for the recently launched Fontaine Parry near Serangoon, UOB is said to have a valuation cap of $834 psf. According to sole agent Knight Frank, the first phase of Fontaine Parry, which was sold out, saw prices starting at $850 psf and some sub-sales are now going for $900 psf.
For the first half of 2007, UOB grew its total home loans book 18 per cent, outpacing the industry average, to $20.7 billion. DBS's group home loans rose 8.75 per cent to $26.1 billion. UOB said Singapore mortgages were up 15 per cent while DBS reported an almost similar growth of 14 per cent.
In August 1995, Mr Wee said famously: 'I don't think the property market will collapse but prices have reached a high and the upside is limited.'
Although still sympathetic to first-time property buyers or HDB upgraders, he said the bank had more stringent criteria for speculative buyers and those investing in second properties.
The strategy meant that UOB lost some market share in property loans.
UOB that year reduced financing to only 65-70 per cent of the purchase price of a property, compared to about 90 per cent in 1992, just before the height of the property frenzy which peaked in 1996 before crashing.
Singapore's property market subsequently went into a long depression, which lasted for the most part of the decade until 2003 and sent many borrowers into negative equity - where the size of their loan was larger than the value of their property.
The bank is opting for caution again.
Said a spokesman: 'UOB has always taken a prudent approach in its credit assessment process. A loan application is assessed on the creditworthiness of the borrower as well as the merits of the property. We would consider the loan application favourably if the borrower meets our criteria. From time to time, the bank reviews its home mortgage policies, and if necessary, adjustments may be made to align with market conditions.'
Subscribe to:
Posts (Atom)