singapore property weekly issue 68

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CONTENTS

p2 Sayonara Shoeboxes?

p7 Singapore Property News This Week

p11 Resale Property Transactions

(August 22 – August 28)

Welcome to the 68th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

FROM THE

EDITOR

mailto:[email protected]

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SINGAPORE PROPERTY WEEKLY Issue 68

Page | 2 Back to Contents

Sayonara Shoeboxes?

By Mr. Propwise

On September 4th, 2012 the URA announced

new guidelines that will effectively curb the

future development of shoebox units, typically

units smaller than 500 square feet, in

suburban areas. Effective November 4th,

2012, the total number of homes that can be

built for non-landed private residential

developments outside the Central Area will be

capped. We have previously covered the

problems with shoebox homes, looked at their

historical profitability, and even examined the

issue of shoebox industrial units.

http://www.ura.gov.sg/pr/text/2012/pr12-98.html







http://www.propwise.sg/the-trouble-with-shoebox-homes/







http://www.propwise.sg/are-shoebox-residential-units-profitable-investments/





http://www.propwise.sg/should-shoe-box-factories-be-allowed/







The proliferation of shoebox units became

a cause for concern

One of the key factors for the government’s

concern about shoeboxes is the four-fold

increase of the stock of shoebox units from

2,400 units at the end of 2011 to around

11,000 units by 2015. The key question is

how strong the real end user demand is,

whether from tenants or owner-occupiers,

especially in the suburban areas.

The sharp growth in shoebox units did not

come from end user demand, but instead

came from a rush by developers to flood the

market with these units due to strong demand

by mass market investors looking to dip their

feet into a property investment that required

only a moderate capital outlay with the

promise of potentially high rental yields. This

was a no-brainer for developers as it let them

sell their developments at much higher per

square foot prices and thus boost their

margins.

While there is probably end user demand for

these units from singles, childless couples

and retirees, the URA became alarmed when

shoebox units made up 50% to 80% of some

housing developments. The increasing

density of these developments would also put

a strain on the ability of the local

infrastructure such as roads to support a

higher population than was originally planned

for.

The new formula that will cap shoebox

units

Thus from November 4th all new non-landed

private residential developments outside of

the Central Area will be subject to a cap on



the number of homes based on the following

formula:

Maximum number of homes allowed will be

less than or equal to the Maximum

Permissible Gross Floor Area (GFA) divided

by 70 square meters

So for example, if the maximum GFA is 7,000

square meters (excluding bonus GFA), then a

maximum of 100 units (= 7000 / 70) will be

allowed to be built.

This formula doesn’t mean that shoebox units

will no longer be built. It just means that

developments can no longer be

predominantly comprised of shoebox units.

Following our example above, the developer

can still choose to build 50 shoebox units of

30 square meters each (approximately 323

square feet), but it means that the remaining

50 units must be an average of 110 square

meters each (or approximately 1184 square

feet).

Specific areas, such as Kovan and Joo

Chiat/Jalan Eunos, will have a more stringent

cap on the total number of homes per

development as they are already in a situation

where the local transport infrastructure is

strained. For these places, the maximum

number of homes will be less than or equal to

the maximum permissible GFA divided by 100

square meters, similar to the cap currently in

place for the Telok Kurau area.

The impact of these shoebox guidelines

on the property market

Minister Khaw in his blog has called the

guidelines “measured and moderate”, and I

agree. The guidelines are not draconian but

are meant to encourage developers to build a

range of different unit sizes and not just build

“shoebox slums”, which are not considered to

be family-friendly.

http://www.ura.gov.sg/circulars/text/dc12-14.htm





















http://mndsingapore.wordpress.com/







For current shoebox owners, this new

regulation is not necessarily a bad thing, as

the lower supply of new shoebox homes will

reduce the competition for tenants for their

units. The net effect will also be to slow the

rate of growth of the number of shoebox

homes, and limit this category as a proportion

of the total housing stock. This will also

potentially moderate overall home price

increases as the mix of homes shifts away

from shoebox homes with their higher per

square foot pricing.

http://propertymarketinsights.com/



http://www.buybyeproperty.com/


Singapore Property This Week


Residential

New measures to curb growth of shoebox

units

URA has introduced new measures to control

the growth of shoebox units. Large number of

shoebox units is a concern as they may result

in more cars in the neighbourhood than the

local road infrastructure can support and

there may not be sustained demand for such

units. The maximum number of units in non-

landed private housing projects outside the

Central Area (Raffles Place, Tanjong Pagar,

Singapore River, Marina Bay, Orchard

Newton, Beach Road, Ophir Road, Jalan

Sultan, Syed Alwi Road, Tekka Lane and

Outram Road) and residential component of

mixed-use developments will be capped

based on an average area of 70 sq m from

Nov 4. Likewise, the maximum number of

homes based on an average size of 100 sq m

which was introduced last year in Telok Kurau

Estate, will be extended to Kovan and Joo

Chiat/Jalan Eunos estates from Nov 4.

However, developers can still include small

units in their projects provided that there is a

mixture of large and small units so that the

guidelines can be met. These new guidelines

are generally welcome though there are

concerns that small en bloc sites will see

depreciation in land values and collective sale

premiums since such sites tend to attract

smaller developers building a higher

proportion of shoebox units in their projects.

(Source: Business Times)



Punggol EC site draws $189.87 m top bid

The 99-year leasehold EC site at Punggol

Way/Punggol Walk attracted a meagre three

bids, with the top bid of $189.87 million, or

$313.63 psf of GFA from Qingjian Realty. The

expected breakeven cost and the average

selling price of the site are $580-650 psf and

$700-750 psf respectively. Developments on

the site are likely to attract young buyers.


New guidelines may not create pressure

on prices

There are some who think that new guidelines

on shoebox units which will come into effect

on Nov 4 will result in lower prices, since

shoebox units were responsible for the higher

average psf price of residential projects. To

meet the cap on the number of units,

developers will have to build larger units with

higher lump sum price which may discourage

some buyers. Hence they may keep psf prices

affordable in order to attract buyers. However,

since most developers can maintain their

current unit-size mix without violating the new

guidelines, prices may not actually fall.

Furthermore, developers may build more two-

or three-bedroom units which could have

relatively high psf prices rather than building

large four-bedroom units. In fact, prices for

shoebox units may even rise due to the falling

supply.


URA launches 60-year leasehold

residential site and hotel site in Jurong

The 1.02-ha residential site in Jalan Jurong

Kechil offers a 30, 45 or 60-year-lease period,

the first for residential sites released under the

GLS. It has a 153,267.17 sq ft maximum GFA



and can be developed into a condominium,

flats or retirement housing with a maximum of

203 units and a part-five-storey-part-eight-

storey height restriction. The site is expected to

be fairly popular since there are amenities and

easy access to public transportation in the area

and could potentially attract five to 10 bids for

the 60-year land tenure with a top bid of $200-

250 psf ppr, an estimated breakeven cost of

$450-500 psf, and an estimated sale price of

$550-600 psf.

Also to be launched along with the residential

site is a 60-year leasehold 0.9-ha hotel site

located at Jurong Town Hall Road. This first

hotel site in the Jurong Lake district has a

204,051.25 sq ft maximum GFA. It could

potentially attract five to 10 bidders, with a top

bid of $650-700 psf ppr and an estimated

breakeven price of $1,050-1,100 psf assuming

the successful bidder intends to build a four-

star 700-room business hotel on the site.


Thomson View finally sold for $590m in

collective sale

After two failed attempts in the en bloc market,

Thomson View condominium, located along

Upper Thomson Road, has finally been sold to

a consortium led by Wee Hur Development Pte

Ltd and Lucrum Capital Pte Ltd for $590

million. If a $107 million premium to enhance

the property's use and a $90 million premium

to top up the lease from the remaining 62

years to 99 years is included, the price would

be $712 psf ppr. The 540,314-sq-ft residential

site with a 2.1 plot ratio and 24-storey

maximum height can potentially be

redeveloped into a 950-unit condominium

project with each unit averaging 1,200 sq ft.




99-year leasehold mixed-use site near

Potong Pasir MRT Station drew $245 m top

bid

The top bid of $245 million or $793.02 psf ppr

came from a tie-up between City

Developments Ltd (CDL) and Hong Leong

Holdings, beating out seven other bids. The

developer plan to have 28 commercial units

with an average size of 71.43 sq m (nearly 769

sq ft) based on the maximum commercial

quantum of 2,000 sq m (21,528 sq ft) GFA on

the ground floor of a development up to 19

storeys, and possibly release some for sale.

The number of residential units is also capped

at 267 units with an average unit size of 100 sq

m. The expected breakeven cost and selling

price of the residential units are $1,250-$1,300

psf and $1,450- $1,500 psf respectively while

the retail units have an expected strata selling

price of $4,000-4,500 psf. The high top bid

reflects the popularity for residential sites near

MRT stations, especially those with a

commercial component.


Commercial

Freehold Geylang properties to be

redeveloped by TEE, KSH, Heeton joint

venture

TEE International, KSH Holdings and Heeton

Holdings will jointly redevelop the 13,282 sq ft

worth of land area at 48A, 50A, 52A, 54A, 56A,

58A and 60A in Lorong 32, Geylang Road.

With a 2.8 plot ratio, the site can be developed

up to a gross saleable area of 40,910 sq feet,

including balcony. The development is located

near Aljunied MRT Station, the Eunos and Ubi

industrial parks and the CBD.




Non-Landed Residential Resale Property Transactions for the Week of Aug 22 – Aug 28

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

2 ICON 581 1,150,000 1,978 99

2 THE BEACON 1,163 1,500,000 1,290 99

2 SPOTTISWOODE PARK 850 820,000 964 99

3 TWIN REGENCY 980 1,500,000 1,531 FH

3 CENTRAL GREEN CONDOMINIUM 775 1,150,000 1,484 99

3 THE METROPOLITAN CONDOMINIUM 840 1,188,000 1,415 99

3 QUEENS 1,184 1,520,000 1,284 99

3 THE ANCHORAGE 1,507 1,850,000 1,228 FH

3 QUEENSWAY TOWER 1,679 1,468,800 875 FH

4 CARIBBEAN AT KEPPEL BAY 1,722 3,150,000 1,829 99

4 THE AZURE 1,765 3,177,000 1,800 99

4 MOUNT FABER LODGE 2,594 2,900,000 1,118 FH

5 PARC IMPERIAL 398 688,000 1,727 FH

5 THE PARC CONDOMINIUM 1,302 1,588,440 1,220 FH

5 THE PARC CONDOMINIUM 980 1,170,000 1,194 FH

5 HERITAGE VIEW 1,195 1,300,000 1,088 99

5 PARK WEST 1,894 1,500,000 792 99

7 SUNSHINE PLAZA 1,313 1,650,000 1,256 99

9 ORCHARD SCOTTS 969 2,350,000 2,426 99

9 THE SUITES AT CENTRAL 1,442 3,100,000 2,149 FH

9 THE LIGHT @ CAIRNHILL 2,443 5,200,000 2,128 FH

9 THE SUITES AT CENTRAL 1,572 3,280,000 2,087 FH

9 THE PATERSON 1,421 2,900,000 2,041 FH

9 ROBERTSON BLUE 1,432 2,778,080 1,941 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

9 TRIBECA 1,765 3,388,800 1,920 FH

9 ELIZABETH HEIGHT 2,573 4,600,000 1,788 FH

9 MAKEWAY VIEW 1,442 2,500,000 1,733 FH

9 PARC EMILY 1,238 2,120,000 1,713 FH

9 UE SQUARE 1,055 1,600,000 1,517 929

9 THE REGALIA 1,249 1,870,000 1,498 FH

10 ARDMORE II 2,024 5,600,000 2,767 FH

10 ST REGIS RESIDENCES SINGAPORE 2,153 5,750,000 2,671 999

10 THE CORNWALL 1,044 1,780,000 1,705 FH

10 STUDIO 3 883 1,400,000 1,586 FH

10 FAIRLODGE 1,658 1,950,000 1,176 FH

11 PARK INFINIA AT WEE NAM 1,464 2,880,000 1,967 FH

11 SKY@ELEVEN 2,271 3,747,150 1,650 FH

11 TREVOSE PARK 1,249 1,873,500 1,500 FH

11 SUFFOLK PREMIER 1,076 1,450,000 1,347 FH

12 DE PARADISO 1,238 1,490,000 1,204 FH

14 ASTON MANSIONS 1,302 1,050,000 806 99

14 EUNOSVILLE 1,679 1,300,000 774 102

15 THE SOVEREIGN 2,637 4,300,000 1,631 FH

15 THE ESTA 1,001 1,460,000 1,458 FH

15 THE SEA VIEW 1,410 2,050,000 1,454 FH

15 SANCTUARY GREEN 786 1,000,000 1,273 99

15 THE ARIEL 872 1,080,000 1,239 FH

15 WATER PLACE 1,389 1,650,000 1,188 99



NOTE: This data only covers non-landed residential resale property

transactions with caveats lodged with the Singapore Land

Authority. Typically, caveats are lodged at least 2-3 weeks after a

purchaser signs an OTP, hence the lagged nature of the data.

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 SANTA FE MANSIONS 1,076 1,268,000 1,178 FH

15 WATER PLACE 1,130 1,326,000 1,173 99

15 COSTA RHU 1,776 2,080,000 1,171 99

15 THE MAKENA 1,636 1,865,000 1,140 FH

15 EMERY POINT 1,324 1,420,000 1,073 FH

15 CRESCENDO BUILDING 1,302 1,100,000 845 FH

16 EASTWOOD REGENCY 506 715,000 1,413 FH

16 COSTA DEL SOL 1,227 1,650,000 1,345 99

16 SUNHAVEN 1,066 1,060,000 995 FH

16 SUNHAVEN 1,259 1,238,000 983 FH

16 CHANGI GREEN 1,055 968,000 918 FH

16 EASTWOOD GREEN 1,012 860,000 850 99

17 ESTELLA GARDENS 657 666,000 1,014 FH

17 THE EDGEWATER 1,238 1,150,000 929 FH

17 BALLOTA PARK CONDOMINIUM 990 785,000 793 FH

17 AZALEA PARK CONDOMINIUM 1,313 1,005,000 765 999

18 THE TROPICA 1,238 1,180,000 953 99

18 SAVANNAH CONDOPARK 1,227 1,130,000 921 99

18 RIS GRANDEUR 1,539 1,380,000 897 FH

18 MELVILLE PARK 936 771,000 823 99

18 ELIAS GREEN 1,528 890,000 582 99

19 LEITH GROVE 829 905,000 1,092 FH

19 THE QUARTZ 1,130 1,200,000 1,062 99

19 THE SPRINGBLOOM 1,539 1,460,000 949 99

19 JANSEN 28 1,604 1,470,000 917 999

20 BISHAN 8 1,163 1,320,000 1,135 99

20 SEASONS VIEW 1,141 1,058,000 927 99

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

20 THOMSON VIEW CONDOMINIUM 1,313 1,180,000 899 99

20 LAKEVIEW ESTATE 1,615 1,333,000 826 99

21 THE STERLING 1,485 2,190,000 1,474 FH

21 CLEMENTI PARK 1,873 2,180,000 1,164 FH

21 SOUTHAVEN II 1,485 1,658,788 1,117 999

21 HUME PARK II 958 925,000 966 FH

21 PARC PALAIS 1,238 1,150,000 929 FH

21 HUME PARK I 1,356 1,200,000 885 FH

21 REGIS MANSIONS 1,023 845,000 826 FH

21 PINE GROVE 1,701 1,330,000 782 99

22 THE CENTRIS 1,302 1,430,000 1,098 99

22 PARC OASIS 1,378 1,240,000 900 99

22 LAKEHOLMZ 1,249 1,050,000 841 99

23 PARK NATURA 1,378 1,515,000 1,100 FH

23 CHANTILLY RISE 1,539 1,515,000 984 FH

23 MERAWOODS 1,345 1,300,000 966 999

23 GUILIN VIEW 1,572 1,234,000 785 99

23 MAYSPRINGS 1,292 940,000 728 99

28 SELETAR SPRINGS CONDOMINIUM 947 790,000 834 99

singapore property weekly issue 68

Documents

expected breakeven

end user demand

average size

000 price

residential

business times

shoebox units

potentially