Property News & Market Trends

News week in a nutshell

Crazy or plain greed?
Subject: Eliz Hgts. Asking: $2100ppr!
When 66-year leasehold Grangeford Apartments ask for $660 million(including an estimated $97.8 million top up lease to 99yrs) and at $2,016 psf ppr, Grangeford’s asking price was the incredible until Elizabeth Heights shares their higher expectation at $2,100psf ppr!

For any developer to earn a decent 20%, which I think it'll be silly at this point, they would need to market it at $2,800 - $2,900psf! Many developers are aiming as high as 30% - 50% margin! If that's expected, the market needs to be as bouyant in 2008/9 as now or somebody's gonna get hurt."

Elizabeth Heights has a land area of 88,600 sq ft, with a 2.8 plot ratio, with about 180 units with an average size of 1,500 sq ft each. If the sale goes through, 90 residents will bank in as much as $6m - $10m! The last resident bought a unit at $1200psf. If the enbloc is successful, this very shrewd buyer will pocket as much as $2m! Not bad for less than 5 months' of investment - possibly a 650% ROI! Beats tons of overpaid fund conglomerates!

Let's watch this deal after 25th May. Fear or Greed? Either way, somebody will sway.

Time to trumpet huge profits!
Keppel Land reported a 72% increase in Q1 profit, earning $62.5 million. As Singapore's 3rd largest developer, it's predictable going by the other 2 developers' results.

Singland sings her earnings too! Singapore Land, who owns a majority stake in the Marina Square development, reported a 25% increase for her Q1 group net earnings to $28.13 million. SingLand also owns the Singapore Land Tower, The Gateway and Clifford Centre and part of SGX Centre.

1.7m sq ft of office space will be gone by end 2007!
Adding to the squeeze for prime office space. This will again give opportunist landlords the inevitable decision to drive up rental prices. Tenants are beginning to move out of Ocean Building and seeking new office spaces in CBD - that's an estimated 300,000 sqft of space required.

To date, an estimated 500,000 sqft has been quashed over the last 12 months. With an encouraging economy, companies can afford a little more prestige and a reasonable price increase. However, likely mergers of Barclays & ABN Amro may relieve about 50,000 sqft into the market. No doubt it's only 10% but didn't I say it's a relief?

“That's what landlords are riding on, the tsunami wave of space squeeze." lamented one tenant. With the upcoming demise of UIC Building, another 400,000 sqft will be wiped out of the market. Citigroup estimated that prime CBD office rentals will rise to $18.50 psf by the end of next year. If the experts are right, we better heed Diana Ross' advise - "Rush Rush".

SMD(Small & Medium size Developers) takes action
Hoi Hup Realty paid $115 million for the freehold residential site at Killiney Road in a collective sale. With 40,000 sqft and a 2.8 plot ratio plus a $500k DC, it works out to $1,022 psf ppr. , including an estimated development charge of $500,000. The site was sold through an expression of interest exercise. The 40,300 square feet site has a 2.8 plot ratio, which gives the site a gross floor area of 113,000 sq ft.

Patience do pay off handsomely. After waiting for 10 months, each resident will get at extra $500,000 for the wait. I bet not many of the residents earn that much in a year.

MAS makes a healthy remark about rising home prices What are they hin?
The 4.6% Q1 gain, could see the high end market filtering down to other mid to high-end segments, Singapore’s central bank said in its latest Macroeconomic Review.

MAS expects the property upturn to spill over to the construction and financial services sectors. But the bank warns that in the future, new developments could be slowed or delayed if sand and concrete become more difficult to obtain. On the consumer loans front, while mortgage loan growth has remained tepid in recent quarters, some upside could be seen in the months ahead as the residential property uptick at the luxury end begins to spread to the broader market.

MAS also says that the recent upswing in property prices will have only a small impact on inflation this year. This is mainly because substantial price increases in the near term should be largely confined to the upper and middle segments of the private residential market, MAS predicts. ‘On balance, the impact of rising property prices on consumer price index (CPI) inflation is likely to be modest, with the direct impact contributing only 0.1 percentage point in 2007, compared with the average of negative 0.2 percentage points over the past three years,’ says MAS.

So, what's the verdict? The government will not introduce any policy to slow down growth in any way. So, prices, are you ready? Up, up and away! - Danny 'Bingo'

More ...

	Co-broking? What for? That's what I heard from 70% of the agents I come into contact with! That's incredible. These agents will advertise either as "Already Co-broke" for the courteous ones or "No Agents pls" for the blunt brush off. Will co-broking help you make more money? Think again. Fiduciary duty can cost you more! ... 12 Jun 2007 - Read Details
	Singapore property news in a nutshell. $160m for Trendale Tower enbloc?Trendale Tower; a freehold development with a plot of 21,709sft at Cairnhill Road.  With a current plot ratio of 2.8, no DC(Development Charge) will be levied should the suitor build within 60,000sft. Bidders are expected to cough out at least $160 ... 19 May 2007 - Read Details
	Singapore property prices still low compared to others? Just a couple of days back, I was hanging out with a group of property investors. As we chatted, I casually mentioned that Singapore property prices are still relatively low compared to prices in HongKong, London, New York or Tokyo. "That's absurd!" retorted a property investor, who ... 16 May 2007 - Read Details
	The F1 saga & how it will affect property prices One thing's for sure, it is a boost to the tourism industry. So, how can it affect the property prices if the circuit doesn't run through your estate? That's seems to be a ridiculous suggestion, isn't it? Think again. The F1 is watched by more than 150million audiences worldwide, particularly in Eu ... 14 May 2007 - Read Details
	Where are the property prices heading? I supposed that's on every potential buyer's & seller's mind. If you look at what the experts said, the rise will continue probably for the next 3 years, all the way to 2010. Supplies will catch up by then. However, if demand did not maintain at this current level, I'm certain a correction is i ... 7 May 2007 - Read Details
	What happens when someone refuses to leave in an Enbloc Sale? That's exactly what happened in Lincolnsvale. One sole family refused to leave after 1 year when the enbloc sale process was concluded. What happened? Where were they when the vote was polled?  That's on everybody's mind when they read the news. The first thing that came to my mind was the bl ... 22 Apr 2007 - Read Details
	News in a nutshell Can Malaysia catch the booming property market?Recent moves by the Malaysian PM cuts red tape by a whopping 80% in time processing. But will it work? Is it too late to cut the queue? "Shortening the timeframe will have a positive impact on the construction industry, investors and business people, w ... 16 Apr 2007 - Read Details
	The Exodus begins! The first sign of Exodus begins. Standard Chartered Bank is said to have taken a lease of 500,000 sqft at the Marina Bay Financial Centre (MBFC). So, what will happen to the 130,000 sqft at 6 Battery Road? Standard Chartered still has a lease up to 2020 at Battery Road. So, how does this work ... 10 Apr 2007 - Read Details
	The 3 Signs of an emerging Bubble. Mad rush; is the Property Rush coming back?Sign #1 - Balloting - used by HDB when demand outstripped supplies by a huge margin! Subject: Thomson V: 300 confirmed buyers vs 95 units for sale. One conclusion: Balloting rules the day! Experts says it's unlikely to be repeated. And why should it be? D ... 10 Apr 2007 - Read Details
	1st Qtr up 4.6%. Is that a good sign? What does it mean when URA says that the 1st Qtr flash estimate is a 4.6% compared with previous Qtr? It's a modest estimate. In reality, the prime properties in Orchard & Marina/Shenton area has skyrocketed past 12% in just 3 months! This astromonical price spike is heaving its effect now. The ... 3 Apr 2007 - Read Details