ST : Waterfront, city homes still a hit in resale market

Jun 1, 2010

Waterfront, city homes still a hit in resale market

By Joyce Teo

WATERFRONT and prime city homes continue to be popular choices in the resale market, which could mean more conversions of office space into homes, property consultancy CB Richard Ellis (CBRE) says.

Its latest report says the total value of resale deals for these homes in Districts 1, 2 and 4 - where the Marina Bay, Shenton Way and Sentosa Cove areas are located - hit $470.2 million from January to May.

The 246 units sold in these upmarket districts in the first five months of this year make up 51 per cent of the total for all of last year. Although the value of these deals pales in comparison to the full-year 2007 peak of $2.08 billion for these districts, it compares relatively well with full-year sales of $750.8 million last year and average annual resale values of $737.8 million from 2005 to 2008.

CBRE's executive director for residential properties Joseph Tan said an ongoing, sustained demand for residential units in these areas could prompt developers to convert or redevelop older office blocks into high-end residential use.

One example is the conversion of the Ong Building site at 76 Shenton Way into a 202-unit residential project. This project sold out in March.

CBRE estimates 1.3 million sq ft of offices will be converted to mainly residential use from now to 2013, he said.

Office buildings that have received planning approvals for conversion to residential use include VTB Building, into 148 units; UIC Building, into 593 units; and Marina House, into 155 units.

On new launches, the euro zone crisis has made investors more cautious while the Government's large release of sites for sale could have dampened sentiment among owner-occupiers, says an industry source. He expects transactions and prices to cool to a more sustainable level.

The largest new release over the holiday weekend was the 1,145-unit condominium in Hougang - The Minton.

About 300 units were released, of which some 180 were sold at an average price of $850 per sq ft.

Property experts had reportedly said sales could have been more brisk if the condo had been launched earlier.

Developer Kheng Leong said 5 per cent of the buyers were foreigners, with the rest being locals or permanent residents.

The most popular were the two-bedroom units, it said. They accounted for some 35 per cent of the units purchased at the 99-year leasehold condo.

The one- and three-bedroom units each made up 25 per cent of the sales.

'The one-bedroom units didn't move as fast as the two-bedroom units. It shows that a lot of people are buying units to live in, rather than for investment,' said Knight Frank's managing director for residential services Peter Ow.

One-bedders have been popular with investors as they are deemed affordable.