Developers Turn Landlords As Property Market Stays Quiet

Source : The Straits Times, June 4, 2008

With projects held back, firms lease out units bought in collective sales

PROPERTY developers such as Koh Brothers and GuocoLand, which bought collective sale sites during boom times, are now becoming landlords as they wait out the market slowdown.

STAYING ON: The consortium that bought Lincoln Lodge has allowed occupants to keep renting homes for six months from the sale completion date of July 8. -- PHOTO: NEWMAN & GOH

They are leasing out apartments they bought to existing occupants as a way to generate some income instead of simply leaving them vacant.

If the property upswing had continued, these developers might well have moved quickly to tear down the older homes to put up new developments.

But the sharp slowdown in home sales has put paid to such thoughts for now.

Market observers say renting is a nimble move given present market conditions.

For sellers of units in collective deals who have yet to buy a new home, it is a win- win situation as they would have collected their sale proceeds.

Take, for example, the consortium that bought freehold Lincoln Lodge for $243 million in June last year.

It has decided to allow occupants to keep renting homes for six months from the sale completion date of July 8, and thereafter on a monthly extension basis.

'Upon requests by some of the sellers to stay on, and while waiting for approvals, we have decided to grant them this request by extending a lease,' said Mr Francis Koh, Koh Brothers' managing director and chief executive.

Rents at Lincoln Lodge range from $2,700 to about $4,500 for larger units.

In the middle of last year, at the height of the collective sale frenzy, Koh Brothers bought the Newton site with Heeton Holdings, KSH Holdings and Lian Beng Group for a record $1,449.30 per sq ft (psf) per plot ratio.

A Lincoln Lodge seller, who wished to be known only as Mr Tan, welcomed the rental move as sellers had collected sale proceeds in January, and those who had not bought a home could take their time.

'It's an option...I know someone who negotiated the rent down to $2,500,' he said.

GuocoLand seems to be the early rental front runner.

It offered residents short-term leases at Sophia Court in Adis Road last year, followed by Leedon Heights off Holland Road earlier this year. The leases started in March at Sophia Court and yesterday at Leedon Heights. Both last till Jan 31 next year.

A three-bedroom unit at Leedon Heights costs $2,850 a month, while rents at Sophia Court range from $800 to more than $4,000 a month.

GuocoLand bought Leedon Heights in April last year for $835 million and Sophia Court in late 2006 for $230 million.

Renting out units is a way to 'wait out the current quiet in the market', said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

'If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.'

Frasers Centrepoint said it may offer short-term leases to the former owners of the 185-unit Flamingo Valley, a freehold site in Siglap Road that it bought for $194 million in February last year.

'We had 50 owners who wrote to ask us to extend their lease...They haven't found anything suitable,' said the firm's general manager of development and property, Mr Cheang Kok Kheong.

He said the firm was likely to extend a lease of six months to a year. This would 'give us more time to think about our plans'.

City Developments (CDL) has said it is still exploring the renting option.

Renting out apartments bought in collective sales is not new. CDL did so a few years back, when it rented out all 124 apartments in Kim Lin Mansion in Grange Road.

It had bought it in late 1999 for $251 million, or $996 psf of potential built-up area, but pushed it out for sale only at the height of the property boom last year. It fetched prices of $3,600 psf.


Win-win deal

# Developers lease out units to generate income instead of leaving them empty as they sit out the market slowdown.

# Sellers of collective sale projects who have yet to buy new homes can stay on in their existing units as tenants.


TOUGH TARGET

'If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.'

MR MAK of Knight Frank, on companies holding out for better prices

The Incredible Shrinking Condo

Source : The Straits Times, June 4, 2008

Compact city studios under 500 sq ft an emerging trend

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.

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,' 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.


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

Sim Lian Land Puts In Top Bid Of S$52m For Simei Road Site

Source : Channel NewsAsia, 03 June 2008

Only two bids were received in the tender for a residential site at Simei Road, which is being launched under HDB's Design, Build and Sell Scheme.

Property developer Sim Lian Land put in the top bid of S$52 million. The price works out to S$1,472 per square metre of gross floor area.

AMK Development put in the lower bid of S$37.2 million or S$1,055 per square metre of gross floor area.

The parcel spans 16,825 square metres and is slated for public housing. It has a lease of 103 years and a maximum allowable gross floor area of 35,333 square metres.

HDB will announce the winning bid within the next two weeks. - CNA /ls

Sim Lian Land Is Top Bidder For DBSS Site At Simei

Source : The Business Times, June 4, 2008

SIM Lian Land Pte Ltd yesterday emerged as the top bidder in a Housing & Development Board (HDB) tender for a Design, Build and Sell Scheme (DBSS) site at Simei Road.

The $52 million bid, or $137 per square foot per plot ratio (psf ppr), was at the lower range of earlier market expectations. Industry observers projected in April that the site could fetch between $49 million and $76 million, or $130 to $200 psf ppr.

The fifth DBSS site, with a lease term of 103 years and a maximum allowable gross floor area of 380,300 sq ft, attracted another bid from AMK Development Pte Ltd. Its bid of $37.3 million, or $98 psf ppr, was 28 per cent lower than Sim Lian Land's.

Managing director of Sim Lian Land Kuik Sing Beng told BT that the site is expected to yield about 340 units. Five-room flats would make up 60 to 70 per cent of the units, and the rest would be a mix of four- and three-room flats. Sim Lian Land plans to launch the units for sale next May.

Mr Kuik also said that the breakeven cost would be about $350 psf of sellable area. He noted that the selling price for resale flats in the Simei area is about $380 psf of sellable area.

Cushman & Wakefield managing director Donald Han believes that HDB is likely to award the site. He observed that in spite of the gap between the two bids, Sim Lian Land's bid is in line with current market expectations.

According to Mr Han, the small number of bids reflects the cautious attitude that developers have adopted. Rising construction costs are also posing a challenge for developers, Mr Han pointed out. Echoing this, Mr Kuik said that construction costs have increased substantially in the past one year.

HDB is expected to make a decision in the next two weeks.

Reality Check For 99-Year Lease Top-Up Assumption

Source : The Business Times, June 4, 2008

Recent decisions show such extensions not a given as govt retains planning flexibility

The market used to assume that the government would top up leases for sites to 99 years as they came up for redevelopment. A series of recent decisions - in which the authorities either declined lease top-ups or allowed them, but for shorter tenures - have put a big question mark over that assumption.

Property players say these decisions could have an impact on investment sales of 99-year leasehold properties or at least the way such deals are structured.

In January, when the proposal for Market Street Car Park's redevelopment into an office tower was made public, owner CapitaCommercial Trust revealed that the authorities declined to top up the lease for the site, which has another 65 years to run.

More recently, the market learnt that the former Crosby House site at 71 Robinson Road - which is being built into a new office block - had its lease topped up in April last year, not to the usual 99 years but 85 years and 10 months instead. This was apparently to match the remaining lease term of SIA Building next door.

BT understands that no lease top-up was granted for Marina House last year, which is proposed to be redeveloped, although HMC Building nearby (being developed into Lumiere condo) got a lease top-up to 99 years earlier. Sources say another building at Cecil Street has also had its lease top-up application rejected. Again, the Urban Redevelopment Authority (URA) may have plans for the streetblock where it is located.

In recent years, the government has topped up leases of nearby sites to the original 99-year term, including 1 Shenton Way (being redeveloped into One Shenton), NatWest Centre (being redeveloped into The Clift) and HMC Building.

The recent decisions appear to run contrary to the perception that the government would generally agree to top up leases of such sites to the original 99 years, so long as the planned redevelopment scheme is in sync with URA's long-term vision for the area.

Instead, Singapore Land Authority (SLA) said: 'The government will generally allow leases to expire, without extension.' It noted that 'the state generally sells land on leasehold to allow it the flexibility to reallocate land to meet socio-economic needs.'

'However, the government has considered and allowed lease extensions based on whether the proposed redevelopment is in line with the government's planning intention and long-term development plans, and factors such as whether there would be significant intensification, or greater optimisation in land use. That remains the government's policy,' SLA said.

SLA evaluates each application on its merits and in consultation with the relevant agencies. The specific circumstances of each development dictate whether it should be given a lease extension - and for how long.

Market Street Car Park's lease was not topped up 'as there is a need to retain planning flexibility over the future development of the site', SLA said.

URA said it evaluates requests for topping up leases based on 'a range of planning considerations in relation to the specific location and context of the area'. This approach gives 'the state flexibility to review the longer-term plan for the area, as and when the existing leases expire or come in for extension in future, and to reconfigure the parcels, if required, to provide for better land utilisation', it added.

In the Central Business District, for instance, the considerations may vary from streetblock to streetblock, URA said, when queried about the unusual lease top-up to 85 years and 10 months for 71 Robinson Road. 'This lease period is sufficient to allow for the owner to redevelop the site to a new modern office building,' URA added.

DTZ executive director Ong Choon Fah said: 'In the past, the government may have been pretty liberal in topping up leases. Now, they've to think of Concept Plan 2011 and how to accommodate a long-term population of 6.5 million people.

'So they have to be more creative and safeguard land for the future, by having a common lease expiry period.'

The head of a property consulting group said: 'URA's probably doing a housekeeping exercise of trying to coordinate lease expiries of buildings in the same streetblock, to give themselves some flexibility. So they may ask: 'What's the longest remaining lease in this block? Let's now try, going forward, to have leases in this streetblock expire at the same time, so that in future, if we want to do anything, we'll be able to do that.'

DTZ's Mrs Ong observes: 'There are many pencil buildings on tiny plots in the CBD. It would be more efficient if the government has common lease expiry periods for adjacent plots so that they may amalgamate them into bigger land parcels and resell them in future.

'It's more efficient to intensify land use for bigger land parcels. Globally too there's a trend of mixed developments, with a live, work, play environment. It's more environmentally friendly and reduces commuting time. For that too you need bigger sites.'

四美私人组屋地段 仅两发展商出手 投标价趋软

《联合早报》Jun 4 , 2008

（吴汉钧报道）第五块供私人发展商竞标设计、兴建和销售组屋（DBSS）的四美地段昨天开标，森联集团的投标价最高，不过却是至今五个私人组屋项目中最低的投标价。

建屋发展局在4月8日为第五块私人组屋地段招标，招标工作昨天中午截止。当局只收到两份竞标书，森联集团以5200万元居首，AMK Development以3728万元次之。

同过去四块私人组屋地段相比，这块位于四美路的地段获得的最高投标价是最低的。不过，若以容积率每平方英尺137元的价格来看，这个投标价仍高于第一块私人组屋地段。

位于淡滨尼的第一块私人组屋地段也是由森联集团两年前以8222万元标得，容积率每平方英尺114元。第二个地段位于文庆路，成功标价是1亿7020万元，容积率每平方英尺234元。第三块地段位于宏茂桥52街，成功标价是1亿3418万元，容积率每平方英尺212元。第四块位于碧山，成功标价是1亿3589万元，容积率每平方英尺237元。

莱坊（Knight Frank）研究部主管麦俊荣受访时说，这个投标价已降低至比较现实的价位，因为上一个地段的投标价有点过高了。

他说：“这个价位和4年前的99年地契公寓地价不相上下，当年99年地契公寓的地价差不多是容积率每平方英尺100多元。”

他估计，按照这个价位，四美地段私人组屋的建造成本介于每平方英尺440元至480元。

房地产经纪公司ERA助理副总裁林东荣和卓登（Chesterton）国际研究部主管陈瑞谨对只有两家发展商竞标感到惊讶。

陈瑞谨说，发展商如今不仅面对建筑成本上涨的问题，也面对建筑工人不足及难以安顿工人的问题。

他说：“前一阵子媒体报道，外来建筑工人非法住在政府租赁组屋，这是困扰我们很久的问题。引进客工是一个问题，为他们安排居住是另一个问题。这种种问题，加上建筑成本，只会加重发展商负担。”

“私人房地产市场出现不确定因素，市场原以为发展商会转往公共住屋市场，毕竟建造组屋是有确实需求的。可是现在眼看DBSS也只吸引到两家发展商竞标，可见建筑市场面对的难题并不轻松。”

林东荣相信，最近文庆路的City View@Boon Keng销售过程面对挑战，也令发展商却步。

建屋局将在两个星期后决定是否把这个计划颁给森联集团。如果森联集团中标，相信售价与当地的转售组屋相去不远。四美路一带的五房式组屋售价约40万元，四房式售价约31万元。

广州4月楼价重返万元大关

《联合早报》Jun 4, 2008

广州楼市出现复苏迹象，市国土房管局公布的广州4月份十区房地产交易登记情况显示，广州一手住宅均价重返万元大关，达每平方米（人民币，下同）1万零997元（2173新元），比3月份增加了18％。

此外，楼市成交量也开始放大，成交量为39万9900平方米，是前四个月成交量的最高点。

值得一提的是，这是广州楼价连续三个月跌破万元大关后，首次跃上万元关口。4月的一手住宅均价更是广州历史上单月楼价的第二高位，仅次于去年10月份的每平方米1万1574元。

虽然广州4月份楼市出现了量价齐升的现象，但市国土房管局相关人士表示，四五月楼市仍处于观望阶段，市场只是初步回暖。

加快复苏回暖

他解释说，尽管从今年3月份起，广州一手住宅的成交情况开始从谷底回升，成交量回升到40万平方米左右，但相比历史成交情况，只相当于过去的60%左右，市场氛围仍相对较冷、处于观望阶段。

不过，他也指出，从“五一”成交情况相比2007年有较大幅度增长的走势来判断，市场已加快复苏回暖，将有可能在六七月份回复到正常水平。

戴德梁行市场研究部经理黎庆文则认为，广州一手住宅价格在今年里仍会呈现平缓振荡下滑的走势，得到明年上半年，广州住宅价格才有可能逆转而上。

黎庆文解释说，开发商目前遭遇的资金困难、大部分潜在的购房者心理预期房价将继续走低、购房者购屋成本很高而因此选择继续观望、租赁市场供应量充足等因素都将促使广州楼价在2008年继续保持下滑走势，而楼价呈现动态振荡，主要是价值规律发生作用的结果。

不过，他也认为，虽然楼价今年料会继续走低，但不会骤跌，毕竟广州刚性需求强劲、市场未来供应量不如预期、政府也会极力避免银行遭受巨损，这些因素都会扶持广州楼市。

利好因素带动楼价

谈及对明年上半年的信心，黎庆文说，一些利好因素将带动广州楼价逆转而上，这就包括人民币升值和流动性过剩对资产价值的拉动、钢材价格和人工成本的快速上升、资金从股市撤出从而进入房地产市场、海外投资资金以各种方式进入房地产市场等等。

万通地产董事长冯仑上个月底在广州发言时也发表了同样的看法，他说，虽然房价依然会升，但得到明年上半年才会非常明显。

冯仑说，中国整体楼市的常态是上涨的，不过，一些发达城市在现阶段有短暂泡沫化的可能性，这些发达城市就包括深圳、上海、广州、北京等。

他说：“中国有哪些城市（目前）比较危险？第一个就是深圳。北京、上海、广州有一点危险。深圳目前二手房交易超过一手房交易，这不是个好现象。不过，以发达国家的发展历史来看，住宅市场在整个城市人均生产总值达到1万美元之前，每年有5%至10%的增长是非常正常的。”

另一方面，第一太平戴维斯在最新发布的广州房地产报告中表示，广州服务式公寓平均租金较上季上升2.6%、豪华别墅平均租金与上季度基本持平、甲级办公楼平均租金则保持稳步上扬。

为避免过剩 受访房地产界人士吁政府 下半年以“备售名单”售地

《联合早报》Jun 4, 2008

对于即将出炉的2008年下半年政府售地(GLS)名单，房地产界人士认为，为了避免过剩，政府不应通过“正选名单(Confirmed List）”，把更多土地硬塞到市场上来。

由于市场情绪已经转弱、买卖活动显著减少，最好还是通过备售名单(Reserve List)，让市场决定自己的“消化能力”。“正选名单”只适合用来发售少数几幅“具战略意义”的地段。

世邦魏理仕(CB Richard Ellis)执行董事李晓和回答本报的询问时说：“暂时来讲，政府最好不要再发售任何正选地段。”

他指出，过去18个月来，各个政府机构已经发售了不少土地。从2007年至今，估计已卖出将近50幅地段。

“政府应该让这些已售出的地段有时间完工与销售，不停地推出更多正选地段，可能会导致市场出现过剩的情况，特别是现在市场已有足够的供应量。再说，发展商也从集体出售活动中买下了不少私人土地。”

上半年11幅正选地段至今只卖五幅

去年，新加坡楼市暴涨了31％，导致一些领域出现短缺现象。为了满足需求，国家发展部在去年12月发布2008年上半年售地计划时，一共将11幅地段放入正选名单中。这些土地能够为市场增添大约3000个私宅单位、15万平方公尺的商业楼面，以及1670间酒店客房。

到目前为止，只有五幅正选地段成功卖了出去。其余六幅地段，有两幅还没有正式招标，两幅正在招标，一幅地段完全无人问津，一幅地段因出价太低没有颁售。

这相信是因为本地楼市自去年10月以来，便因为美国次贷风暴而迅速冷却下来。目前，新私宅单位的成交量不但减少了八成，一些官地也开始出现“消化不良”的现象，虽然一些地段仍然吸引到十组八组人马进场争夺，一些地段却完全无人问津。

第一太平戴维斯(Savills)行销与业务开发主管邱瑞荣认为，硬硬供应更多的土地，不但会向外国基金发出不良的讯号，也会对紧绷的建筑业带来更大的压力。

“现在的楼市已经跟十年前不一样，有许多外国资金在支撑。如果政府对市场经济不够敏感，继续供应更多的土地，让外资失去信心，可能会导致它们将资金撤出。”

他和戴德梁行(DTZ)研究部高级董事蔡楚芬都认为，比较好的做法是把土地都拨入备售名单中，让市场自由决定需求量。

“正选名单应该只是用来应付一些城市规划上的需要，例如发售一两幅位于裕廊湖新区的地段，以便启动该地区的发展。”

除了裕廊湖新区，加冷河畔、巴耶利峇，以及梧槽路(Rochor Road)／奥菲亚路(Ophir Road)都是政府可能因为规划上的需要，而推出正选地段的地区。

高力(Colliers)国际研究部主管郑惠匀也认为，政府应该继续利用备售名单来应付私人企业对土地的需求，而利用正选名单来达到长期的发展需求。

她猜测，在现有较为软弱的市场环境下，政府可能将下半年的正选地段减少到四至六幅。“政府也可能在下半年的备售名单中增添一些新的地段，特别是2008年总蓝图中的成长地区。”

不过，蔡楚芬与李晓和却认为，由于上半年的备售名单已经相当多样化，而且根本没有被“勾”出来，所以没有必要在下半年的备售名单注入“新血”。

新加坡的售地系统分“正选名单”和“备售名单”。正选名单中的地段会直接在既定日期推出市场招标。后者则需要由发展商申请，价格被当局接受后才会推出招标。