At least another $100m of GCB deals could be finalised by year-end
THE value of Good Class Bungalow (GCB) transactions so far this year has reached nearly $1.85 billion, a new record and up 7.3 per cent from the $1.72 billion worth of deals done for the whole of 2009, based on CB Richard Ellis's analysis of URA Realis caveats information as at Dec 8.
However, based on information gathered by BT, there could be at least another $100 million of GCB deals where options have yet to be exercised and which could be finalised by year's end.
Among the deals already closed but for which caveats have yet to be lodged is said to be the Japanese government's sale of 18 Astrid Hill for about $28.4 million or about $1,500 per square foot on the land area of 18,939 sq ft.
BT understands the buyer is Hersing Corporation chairman Harry Chua, who is expected to tear down and redevelop the freehold property. The current two-storey bungalow on the site was the former home of the Japanese ambassador in Singapore. The property was sold through a tender conducted by Knight Frank on behalf of the Japanese government.
Interestingly, a neighbouring property in Astrid Hill was sold in November for $25 million or $1,169 psf based on the land area of 21,377 sq ft. Its seller reaped a handsome profit of $6.4 million or about 34 per cent from a holding period of under a year; the property was previously transacted in February this year for $18.6 million.
Another recent profitable GCB transaction was a property at Cluny Hill, which sold last month for $30 million or $1,533 psf, a 63 per cent return measured against the seller's purchase price of $18.38 million in April last year.
A profitable exit was also achieved on a bungalow at Belmont Road that traded in October at $35.76 million or $1,220 psf on land area of 29,310 sq ft; it previously changed hands in October last year for $27.35 million. The latest buyer is said to be Jardine Cycle & Carriage.
The $1.85 billion of GCB deals YTD 2010 involved 101 transactions - slightly shy of the 109 deals in 2009 and 119 deals in 2006. The average price of GCBs sold has doubled from $501 psf on land area in 2006 to $1,056 psf for YTD 2010. The latest figure is also 27.1 per cent higher than the $831 psf average price for last year.
As well, the average GCB transaction size has also grown from $10.3 million in 2006 to $18.3 million so far this year. The latest figure is up 15.8 per cent from last year.
CB Richard Ellis's director, luxury homes, Douglas Wong credits the increase in GCB prices to Singapore's economic growth, its ability to attract ultra high net worth permanent residents and citizens in recent years, the opening of the integrated resorts, and the limited stock of GCBs, numbering about 2,400.
'GCBs have also appealed to ultra high networths seeking a hedge against inflation, especially given Singapore's political stability,' he added.
CBRE forecasts about 100 GCB deals next year at about $2 billion with average price appreciation of about 8-10 per cent.
'The GCB market is set to remain firm based on the interplay of demand and supply factors. Like an evergreen product, GCBs will continue to attract well-heeled local businessmen, bankers, doctors and lawyers as well as permanent residents,' he added.
RealStar Premier Property managing director William Wong too is optimistic about the GCB market next year. 'We'll be seeing more PRs turning to Singapore citizens next year and this will allow them to buy bigger-plot GCBs or more than one GCB. I believe there will be shortage of big-plot GCBs to meet the demand of some of these ultra-rich new citizens. Prices of GCBs in prime locations such as Tanglin will likely hit above $2,000 psf next year from about $1,800 psf currently,' he said.
Typically, one has to be a Singapore citizen before one can own a GCB. However, PRs who have made sufficient economic contribution are known to have been given permission by the Land Dealings (Approval) Unit on a case-by-case basis to buy a small GCB with land area up to 15,000 sq ft for owner occupation.
Some foreign companies, depending on their economic footprint here, have also been given LDAU's nod to buy a GCB, typically for use as their chief executive's residence.
Typically the minimum land area of a GCB is 15,069 sq ft. However, when GCB Areas were gazetted in 1980, there were some existing sites smaller than that in these locations. They are still considered GCBs and bound by the other planning rules.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
18 Astrid Hill: Said to have been sold by the Japanese govt for $28.4 million or about $1,500 per square foot. A larger neighbouring plot was transacted last month for $25 million or $1,169 psf
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