Rush For URA Approvals Before Window Closed

Source : The Business Times, January 29, 2009

Developers sought provisional nod in Q4 2008 just prior to new rule on GFA

All's quiet on the property front but developers secured a raft of approvals (provisional permission) for private residential projects from the Urban Redevelopment Authority in the last quarter of 2008.

The key reason for this is that developers rushed to make their submissions for provisional permission (PP) before a new ruling that scraps the exemption of bay windows and planter boxes from gross floor area (GFA) took effect on Jan 1, noted Credo Real Estate MD Karamjit Singh.

He said: 'With effect from Jan 1, 2009, for any submission for PP, URA will consider bay windows and planter boxes as part of GFA, and that brings down the total saleable area in a project by about 5-12 per cent. So developers were making submissions to secure PP before the change in ruling kicked in - even if they didn't intend to develop or launch their projects in the near future, given the current downturn.'

Agreeing, DTZ executive director Ong Choon Fah said: 'Bay windows and planter boxes are an important contributor to developers' profit margins. In the past when they bought land, they would have assumed these would be exempt from GFA.'

Hong Realty (part of the Hong Leong Group) received PP in Q4 2008 for a 1,517-unit condo project at Pasir Ris Drive 8, while Far East Organization unit Arts Associate Co secured URA's approval for a 234-unit condo at Jalan Datoh/Jalan Dusun in the Balestier area. And Bukit Sembawang bagged PP for a 200-unit condo at St Thomas Walk.

Horizon Partners Pte Ltd - whose shareholders are Hotel Properties, Morgan Stanley Real Estate and Qatar Investment Authority - picked up URA's consent to develop a 253-unit condo and eight detached houses on the Horizon Towers site at Leonie Hill Road.

URA also granted PP between October and December to NTUC Choice Homes unit Choice Homes Gamma for a 571-unit condo at Lor 2/3 Toa Payoh; to TID Pte Ltd for a 282-unit condo at New Upper Changi Road/ Tanah Merah Kechil Ave; and to an MCL Land unit for a 520-unit condo at Yishun Ave 1/2 fronting Lower Seletar Reservoir. The three proposed developments are on 99-year leasehold sites sold through the Government Land Sales Programme last year.

Casuarina Properties, controlled by the Lee Foundation and members of the Lee family, received URA's permission for a cluster housing development at Mount Rosie comprising 191 terrace homes and two semi-detached units.

The proposed Pasir Ris condo project by Hong Realty is on a massive 2.1 million square feet plot that Hong Leong Group owns in Pasir Ris - which the 1,822-unit Livia condo launched last year is part of. City Developments has a 51 per cent stake in the site. Sources say the site was bought for just $10 million decades ago, was originally treated as land for rural or agricultural use and had restrictions on its title.

In the commercial property segment, Hotel 81-linked Citywide Land secured PP to develop a 902-room hotel at Kallang Road in Q4. The project will also have about 4,090 sq ft gross floor area of shop space.

At Jalan Besar/Laven- der Street, Prominent Plaza Investments/Prominent Site Pte Ltd secured URA's consent to develop about 133,800 sq ft of offices and 13,500 sq ft of shop space. Over at Changi Business Park Ave 1, United Engineers Developments picked up URA's consent for a project comprising a 301-room hotel and 59,740 sq ft of shop space.

URA also approved several industrial property projects in Q4. Keppel Shipyard received PP for additions and alterations to its existing factory at Pioneer Sector 1, as did Yamazaki Mazak Singapore for its existing plant at Joo Koon Circle.

URA also granted PP for factory developments to General Magnetics (at Lorong 4 Toa Payoh), Index-Cool Furniture Design & Construction's (Eunos Avenue 3) and Oxley Opportunity #9 Pte Ltd (Pioneer Crescent).