News Roundup (May 2017)

Our top Singapore property stories.

Rare sea-facing landed homes to launch in Sembawang

A new freehold strata landed housing development located next to Sembawang Park at the end of Sembawang Road is expected to go on sale soon.

Called Watercove, the 80-unit project is being developed by Bukit Sembawang Estates. It will comprise 54 intermediate terrace units from 3,200 sq ft to 3,400 sq ft, 22 corner terrace units (3,300 to 4,400 sq ft) and four semi-detached units (3,250 to 3,700 sq ft).

The design of the homes is inspired by Sembawang’s colonial black-and-white bungalows. PropertyGuru also understands that more than 40 percent of the units will face the sea.

Three MRT stations, namely the Sembawang, Yishun and future Canberra stations are a short drive away, while several shopping malls and schools are situated within the vicinity. Work has commenced on the project, which is expected to be completed by the end of 2020.

Property agencies CBRE and Edmund Tie & Co. are jointly marketing Watercove. Responding to queries, Joseph Tan, Executive Director (Residential) at CBRE, said prices are expected to start from $2.28 million.

“Since 2014, prices of strata landed houses have softened by about 11 percent because of the property cooling measures. They are more affordably priced now and have been able to attract more buyers in Q1 2017,” he noted. In addition, their supply is becoming rarer, with developers building fewer strata landed units due to more stringent rules introduced in August 2014 to limit their numbers.

Meanwhile, Tan believes the government’s plan to develop the North Coast Innovation Corridor, as well as improved transport infrastructure such as the upcoming North-South Corridor and Thomson-East Coast Line, could lead to future property price appreciation in the area.

Foreign developers jointly bid over $1b for Queenstown site

The tender for a 2.11ha residential site at Stirling Road in Queenstown that could yield 1,110 units attracted substantial interest from developers, with a total of 13 bids submitted at the close of the tender exercise on 18 May, said the Urban Redevelopment Authority (URA).

Hong Kong-listed Logan Property and Nanshan Group from China jointly submitted the highest bid of just over $1 billion for the large site. The second-highest bid of $925.7 million came from MCL Land, followed by a $901 million offer from OUE.

Dr Lee Nai Jia, Head (SEA) Research at Edmund Tie & Co., said the winning bid works out to about $1,050 psf per plot ratio, which means the breakeven price will likely be around $1,600 psf to $1,700 psf.

One of the main attributes of the Stirling Road site is its central location and proximity to the Queenstown MRT station, noted Lee. “It is also close to the Buona Vista area, which consists of high growth industries such as pharmaceuticals and R&D. The rental catchment is substantial, as it appeals to people working in the CBD or Jurong East.”

Offered on a 99-year lease, the land parcel was originally on the reserve list of the Government Land Sales (GLS) programme. It was triggered for sale last month after an unnamed developer committed to a minimum bid of $685,250,000.

Added Lee: “The recent land bids and successful launches have further reinforced developers’ sentiments, and we expect stronger bids in upcoming launches. It will not be surprising to see another record bid for the tender of the mixed-use site located near the Bidadari housing estate.”

Shunfu Ville sale finally goes through

The collective sale of Shunfu Ville has finally received the green light, after the Court of Appeal dismissed the appeal lodged by objectors, reported the Straits Times.

The $638 million sale of the privatised HUDC estate made headlines last May when more than 82 percent of the owners consented to sell the 358-unit estate to Qingjian Realty.

Last July, the deal faced a major hurdle when some of the owners objected to the sale. They later filed an appeal to the High Court, with one objection asking whether the transaction was made in good faith, considering the sale price.

The sale committee at Shunfu Ville had launched two public tenders from 2015. With a reserve price of $688 million, both tenders failed to attract bids. Nonetheless, the committee had been in discussion with Qingjian, which offered $638 million. With this, the committee secured the requisite 80 percent consent for the $638 million sale of the estate. Due to the urgency of the timeline, it did not call for another tender at the said price. In ruling in favour of the sale, the Court of Appeal said while the “committee was in somewhat of a rush, there was nothing to suggest an absence of good faith or impropriety in the transaction”.

It noted that the committee entered into a private treaty with the property developer as “failing to commit to Qingjian not only did not assure that a better offer would come along” but could have also resulted in “the loss of Qingjian’s offer”.

The conclusion of the sale will see each flat owner at Shunfu Ville receiving $1.782 million on average. It is understood that the sale is set to be completed in July, with the owners to move out six months from then.

Acting for Qingjian, Lee Liat Yeang, Senior Partner at Dentons Rodyk & Davidson said the decision was not only significant in clarifying the law in this area, but also gives greater confidence to property developers looking to acquire land via en bloc sales.

Higher sales seen at upscale condos

Sales of luxury condos and private apartments costing at least $10 million increased to 36 units last year, reported the Business Times, citing URA Realis caveats data compiled by Savills.

This is up from 21 units in 2015 and 24 units in the preceding year. Sales momentum also continued this year, with 16 transactions for the first four months of 2017.

Savills Singapore’s Head of Research, Alan Cheong, attributes last year’s higher sales to attractive pricing due to price drops, while developers intensified their marketing efforts to dispose all their remaining units within two years of obtaining the project’s Temporary Occupation Permit (TOP), or to sell as many units as they can to reduce the penalty amount.

Under the Residential Property Act’s Qualifying Certificate (QC) rules, all developers with non-Singaporean shareholders or directors need to sell their units before the deadline. If not, they need to pay an additional eight percent, 16 percent and 24 percent of the land price to extend the deadline for the first, second and subsequent years, respectively. The fine is pro-rated based on the percentage of remaining units. Another reason for the better sales in 2016 is the good selection of new, spacious units in completed developments like Tomlinson Heights, Leedon Residence and TwentyOne Angullia Park.

Meanwhile, the most expensive deal for the first four months of 2017 was the sale of a mid-level apartment in the Signature Tower of The Marq on Paterson Hill for $21.8 million ($3,498 psf). However, the seller, Singapore permanent resident and Chinese national Chan Ki, originally bought the unit from the developer for $26.4 million in 2007.

Furthermore, some agents believe that sales of high-end condos and apartments are unlikely to rise sharply, unless the Additional Buyer’s Stamp Duty is eased.

			This article was first published in the print version PropertyGuru News & Views. Download PDFs of full print issues or read more stories now!