Feb 24, 2010
Impose stamp duty on third flat
I READ with interest Monday's report, "HDB review: Findings out next month".
I greatly commend the Government's timely and wise measures to curb speculation in HDB flats. There are clear signs of market exuberance and that could result in a real estate bubble at some unpredictable time.
People now have to pay a new stamp duty of about 3 per cent if they sell their properties within a year of buying them. Plus, financial institutions like banks can now grant housing loans of up to only 80 per cent of a property's value, compared to 90 per cent previously.
I suggest that flat owners who have sold their homes twice also pay the 3 per cent stamp duty when they make their third sales transaction, even if they had lived in their last flat for more than three years.
Simultaneously, when these flat owners buy another flat from the resale market, they should also pay the 3 per cent stamp duty.
The authorities must also be aware of and take action against unprofessional market practices common among property agents, sellers and buyers. This includes intentional under-declaring of the value of flats for sale. Such actions could further spur market speculation in HDB resale flats.
Teo Kueh Liang
Thursday, February 25, 2010
ST : UIC Building may become residential block
Feb 24, 2010
UIC Building may become residential block
UIC board still assessing options, says chief of UOL, whose full-year profits surge to $424m
By Harsha Jethnani
UNITED Industrial Corporation (UIC) has won in-principle approval from the Urban Redevelopment Authority to convert its UIC Building in Shenton Way into a mainly residential development.
But no firm decision has been made on the building's fate.
The UIC board is assessing all alternatives to ensure the best use for the property, according to UOL group chief executive Gwee Lian Kheng.
He disclosed this yesterday as the property group announced a near tripling in full-year profits to $424.2 million in the 12 months ended Dec 31.
The sharp jump was predominantly attributable to UIC having become a 32 per cent associated company of UOL.
Net profits included a negative goodwill sum of $281.1 million from the acquisition of shares in UIC.
Earnings from associated company Nassim Park Residences also contributed to the surge in profits.
UOL posted a record-breaking year in revenues, which rose 12 per cent from $899 million to just over the $1 billion mark.
'Our strategy of tapping the demand of mass- and mid-market housing segments was well timed,' said Mr Gwee.
'This has helped us reach a major milestone of becoming a billion-dollar company by turnover.'
Strong sales from the group's Double Bay Residences and Meadows@Peirce contributed to the revenue rise.
The group's property development arm represented 53 per cent of revenue.
Higher average rental rates brought about a 12 per cent rise in revenue from investment properties to $141.7 million.
Revenue from hotel operations declined 13 per cent to $294.5 million as revenue per available room fell amid a slowdown in tourism, the group's statement said.
Pan Pacific Hotels Group, the group's listed hotel subsidiary, saw revenue fall by 9 per cent due to weaker performance in the group's hotels.
Mr Gwee said the 'difficult period for the hotel industry may be over' and that efforts would be made to 'secure more hotel management contracts, thus increasing fee-based income'.
The developer remains focused on Singapore's resilient mass and mid-tier to high-end residential market.
A total of 1,138 residential units are in the pipeline this year. Developments at its Dakota Crescent and Toh Tuck Road sites are expected to be launched by the second quarter of this year. A total of 616 and 172 units respectively are estimated to be made available at these sites.
In the second half of the year, the group will launch a development in the Spottiswoode area, where it had purchased Spottiswoode Apartment and Oakswood Heights in 2007, releasing about 350 units.
Overseas, another 1,014 units are in the pipeline - 520 in a mixed development in Tianjin, China, and another 494 units in a development located in Kuala Lumpur.
Full-year earnings per share were 53.7 cents, up from 18.5 cents the year before.
Net asset value per share as of Dec 31 stood at $5.29, up from $4.26 previously. A final dividend of 10 cents per share has been proposed.
UOL shares closed 11 cents higher at $4 yesterday before the results were announced.
harshamj@sph.com.sg
UIC Building may become residential block
UIC board still assessing options, says chief of UOL, whose full-year profits surge to $424m
By Harsha Jethnani
UNITED Industrial Corporation (UIC) has won in-principle approval from the Urban Redevelopment Authority to convert its UIC Building in Shenton Way into a mainly residential development.
But no firm decision has been made on the building's fate.
The UIC board is assessing all alternatives to ensure the best use for the property, according to UOL group chief executive Gwee Lian Kheng.
He disclosed this yesterday as the property group announced a near tripling in full-year profits to $424.2 million in the 12 months ended Dec 31.
The sharp jump was predominantly attributable to UIC having become a 32 per cent associated company of UOL.
Net profits included a negative goodwill sum of $281.1 million from the acquisition of shares in UIC.
Earnings from associated company Nassim Park Residences also contributed to the surge in profits.
UOL posted a record-breaking year in revenues, which rose 12 per cent from $899 million to just over the $1 billion mark.
'Our strategy of tapping the demand of mass- and mid-market housing segments was well timed,' said Mr Gwee.
'This has helped us reach a major milestone of becoming a billion-dollar company by turnover.'
Strong sales from the group's Double Bay Residences and Meadows@Peirce contributed to the revenue rise.
The group's property development arm represented 53 per cent of revenue.
Higher average rental rates brought about a 12 per cent rise in revenue from investment properties to $141.7 million.
Revenue from hotel operations declined 13 per cent to $294.5 million as revenue per available room fell amid a slowdown in tourism, the group's statement said.
Pan Pacific Hotels Group, the group's listed hotel subsidiary, saw revenue fall by 9 per cent due to weaker performance in the group's hotels.
Mr Gwee said the 'difficult period for the hotel industry may be over' and that efforts would be made to 'secure more hotel management contracts, thus increasing fee-based income'.
The developer remains focused on Singapore's resilient mass and mid-tier to high-end residential market.
A total of 1,138 residential units are in the pipeline this year. Developments at its Dakota Crescent and Toh Tuck Road sites are expected to be launched by the second quarter of this year. A total of 616 and 172 units respectively are estimated to be made available at these sites.
In the second half of the year, the group will launch a development in the Spottiswoode area, where it had purchased Spottiswoode Apartment and Oakswood Heights in 2007, releasing about 350 units.
Overseas, another 1,014 units are in the pipeline - 520 in a mixed development in Tianjin, China, and another 494 units in a development located in Kuala Lumpur.
Full-year earnings per share were 53.7 cents, up from 18.5 cents the year before.
Net asset value per share as of Dec 31 stood at $5.29, up from $4.26 previously. A final dividend of 10 cents per share has been proposed.
UOL shares closed 11 cents higher at $4 yesterday before the results were announced.
harshamj@sph.com.sg
ST : TEN MILE JUNCTION SITE
Feb 24, 2010
TEN MILE JUNCTION SITE
Bid 2 years ago: $61 million
Top bid now: $164 million
Suburban plot draws eight bids with Far East unit submitting top offer
By Joyce Teo
IN A striking sign of how the property sector has rebounded, a site that failed to sell two years ago when it attracted an offer of just $61 million has now received a bid of $164 million in a new tender.
Eight developers placed bids for the suburban plot that can accommodate residential and commercial development.
The top offers for the site at the junction of Choa Chu Kang and Woodlands roads were all in a fairly tight range, with Far East Organization's Dollar Land Singapore on top with a bid that beat market expectations.
It offered nearly $164 million, or $436.65 per sq ft (psf) of gross floor area, about 10 per cent more than the $148.28 million or $394.80 psf offered by second-placed Chip Eng Seng's CEL Development.
Sim Lian Land was next with $138.89 million or $369.79 psf.
Other bidders included a joint venture between Frasers Centrepoint and NTUC FairPrice Cooperative, and Soilbuild Group Holdings, which came in last with a bid of just $71.23 million.
CBRE Research had expected bids to range from $135 million to $150 million.
The $164 million bid could reflect a price of $50 million to $70 million for the commercial podium, with the developer possibly selling the apartments for around $700 psf to $800 psf, consultants said.
In April 2008, the site attracted just two bids of $61 million and $45.68 million when its sale tender closed. The bids were rejected as being too low.
The site, to be co-located with the Ten Mile Junction LRT station on the third storey of the podium block, will be near the future Bukit Panjang MRT station, part of the future Downtown Line 2 and due for completion by 2015.
Property consultants said the results showed that demand for land was still fairly strong, particularly coming after the Government's recent measures to pre-empt a property bubble.
The Government has imposed a duty on sellers who offload property within a year of purchase, and lowered the maximum loan-to-value amount buyers can borrow from 90 per cent to 80 per cent.
Knight Frank chairman Tan Tiong Cheng said: 'The top three bidders are the more experienced players familiar with the suburban market.
'Their bids suggest they would think the recent measures would not affect prices in the longer term.'
With fewer sources of private land, developers are chasing government sites as they need to replenish land banks, said Colliers International executive director (investment sales) Ho Eng Joo.
He said the cooling measures will affect the sales market more than developers' demand for land.
In the short term, some potential buyers will want to wait and see if prices will fall, experts said.
But those who are already planning to buy will likely go ahead.
Ms Christina Sim, Cushman and Wakefield's director of investment and capital markets, said the one-year timeline for the seller's duty is relatively short and unlikely to affect the market much.
Still, an analyst who declined to be named said: 'The latest announcement begs the question - what conditions would qualify as a stable market? If transactions are above 1,000 units a month, that's probably a warning sign.'
joyceteo@sph.com.sg
TEN MILE JUNCTION SITE
Bid 2 years ago: $61 million
Top bid now: $164 million
Suburban plot draws eight bids with Far East unit submitting top offer
By Joyce Teo
IN A striking sign of how the property sector has rebounded, a site that failed to sell two years ago when it attracted an offer of just $61 million has now received a bid of $164 million in a new tender.
Eight developers placed bids for the suburban plot that can accommodate residential and commercial development.
The top offers for the site at the junction of Choa Chu Kang and Woodlands roads were all in a fairly tight range, with Far East Organization's Dollar Land Singapore on top with a bid that beat market expectations.
It offered nearly $164 million, or $436.65 per sq ft (psf) of gross floor area, about 10 per cent more than the $148.28 million or $394.80 psf offered by second-placed Chip Eng Seng's CEL Development.
Sim Lian Land was next with $138.89 million or $369.79 psf.
Other bidders included a joint venture between Frasers Centrepoint and NTUC FairPrice Cooperative, and Soilbuild Group Holdings, which came in last with a bid of just $71.23 million.
CBRE Research had expected bids to range from $135 million to $150 million.
The $164 million bid could reflect a price of $50 million to $70 million for the commercial podium, with the developer possibly selling the apartments for around $700 psf to $800 psf, consultants said.
In April 2008, the site attracted just two bids of $61 million and $45.68 million when its sale tender closed. The bids were rejected as being too low.
The site, to be co-located with the Ten Mile Junction LRT station on the third storey of the podium block, will be near the future Bukit Panjang MRT station, part of the future Downtown Line 2 and due for completion by 2015.
Property consultants said the results showed that demand for land was still fairly strong, particularly coming after the Government's recent measures to pre-empt a property bubble.
The Government has imposed a duty on sellers who offload property within a year of purchase, and lowered the maximum loan-to-value amount buyers can borrow from 90 per cent to 80 per cent.
Knight Frank chairman Tan Tiong Cheng said: 'The top three bidders are the more experienced players familiar with the suburban market.
'Their bids suggest they would think the recent measures would not affect prices in the longer term.'
With fewer sources of private land, developers are chasing government sites as they need to replenish land banks, said Colliers International executive director (investment sales) Ho Eng Joo.
He said the cooling measures will affect the sales market more than developers' demand for land.
In the short term, some potential buyers will want to wait and see if prices will fall, experts said.
But those who are already planning to buy will likely go ahead.
Ms Christina Sim, Cushman and Wakefield's director of investment and capital markets, said the one-year timeline for the seller's duty is relatively short and unlikely to affect the market much.
Still, an analyst who declined to be named said: 'The latest announcement begs the question - what conditions would qualify as a stable market? If transactions are above 1,000 units a month, that's probably a warning sign.'
joyceteo@sph.com.sg
TODAY Online : If your condo developer doesn't deliver ...
If your condo developer doesn't deliver ...
05:55 AM Feb 24, 2010
When developers do not meet standards promised in their brochures and agreements, will the Building and Construction Authority (BCA) help buyers?
While it "cannot intervene in private contractual disagreements between buyers and developers", BCA will try to facilitate meetings ... to resolve such disputes, "as part of its standard operating procedure for good service", said National Development Minister Mah Bow Tan in a written reply to a query from Member of Parliament Fatimah Lateef.
Mr Mah cited a list of safeguards in place to protect buyers of uncompleted private residential properties. For instance, developers must ensure no misleading information appears in their ads, and must used prescribed Option to Purchase and Sale and Purchase forms with an avenue for buyers to seek recourse. If defects surface within a year, the buyer can require the developer to rectify these at no charge.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Feb 24, 2010
When developers do not meet standards promised in their brochures and agreements, will the Building and Construction Authority (BCA) help buyers?
While it "cannot intervene in private contractual disagreements between buyers and developers", BCA will try to facilitate meetings ... to resolve such disputes, "as part of its standard operating procedure for good service", said National Development Minister Mah Bow Tan in a written reply to a query from Member of Parliament Fatimah Lateef.
Mr Mah cited a list of safeguards in place to protect buyers of uncompleted private residential properties. For instance, developers must ensure no misleading information appears in their ads, and must used prescribed Option to Purchase and Sale and Purchase forms with an avenue for buyers to seek recourse. If defects surface within a year, the buyer can require the developer to rectify these at no charge.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
BT : Tender soon for Yishun industrial site
Business Times - 24 Feb 2010
Tender soon for Yishun industrial site
By CHEW XIANG
THE Urban Redevelopment Authority (URA) will put a 60-year leasehold industrial site in Yishun up for tender after a developer triggered the sale with a minimum bid of $11.5 million.
The 1.42 hectare plot is located at the corner of Yishun Avenue 6 and Yishun Street 23. It is zoned for Business 1 use, or clean and light industrial and warehouse use and has a maximum gross plot ratio of 2.5.
The industrial site was made available for sale through the Reserve List system in May 2007 and a public tender will be launched in about two weeks, URA said.
The minimum bid price works out to just over $30 per square foot per plot ratio (psf ppr).
Dominic Peters, director, industrial at Savills Singapore, said that the price was within the fair market value of the plot, which he estimates at between $30 and $40 psf ppr, but he expects 'lukewarm response' to the tender due to the location of the site.
Recent industrial land sales have seen strong demand, with a 30-year site at Pioneer Road North drawing eight bids in December. The top bid from Kng Realty was $48 psf ppr.
And a plot in Kaki Bukit Road 2 attracted a record 18 bids when the tender closed in August, while one at Woodlands drew eight bids when its tender closed in July.
The highest bid for the 115,342 square foot Kaki Bukit site was just under $105 psf ppr, from Kng Development.
Wee Hur Development placed the highest bid for the Woodlands site, at $34 psf ppr for the 2.5 hectare plot.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Tender soon for Yishun industrial site
By CHEW XIANG
THE Urban Redevelopment Authority (URA) will put a 60-year leasehold industrial site in Yishun up for tender after a developer triggered the sale with a minimum bid of $11.5 million.
The 1.42 hectare plot is located at the corner of Yishun Avenue 6 and Yishun Street 23. It is zoned for Business 1 use, or clean and light industrial and warehouse use and has a maximum gross plot ratio of 2.5.
The industrial site was made available for sale through the Reserve List system in May 2007 and a public tender will be launched in about two weeks, URA said.
The minimum bid price works out to just over $30 per square foot per plot ratio (psf ppr).
Dominic Peters, director, industrial at Savills Singapore, said that the price was within the fair market value of the plot, which he estimates at between $30 and $40 psf ppr, but he expects 'lukewarm response' to the tender due to the location of the site.
Recent industrial land sales have seen strong demand, with a 30-year site at Pioneer Road North drawing eight bids in December. The top bid from Kng Realty was $48 psf ppr.
And a plot in Kaki Bukit Road 2 attracted a record 18 bids when the tender closed in August, while one at Woodlands drew eight bids when its tender closed in July.
The highest bid for the 115,342 square foot Kaki Bukit site was just under $105 psf ppr, from Kng Development.
Wee Hur Development placed the highest bid for the Woodlands site, at $34 psf ppr for the 2.5 hectare plot.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Ten Mile Junction site draws robust bids
Business Times - 24 Feb 2010
Ten Mile Junction site draws robust bids
By EMILYN YAP
(SINGAPORE) The first government land sale tender to close after measures were announced last Friday to cool the property market managed to draw some solid bids.
A 99-year leasehold residential site at the junction of Choa Chu Kang and Woodlands roads - which houses Ten Mile Junction - drew a top bid of $164 million or $437 per sq ft per plot ratio (psf ppr).
Far East Organization unit Dollar Land Singapore topped seven rivals with this bid.
Chip Eng Seng's CEL Development put in the second-highest bid of $148.3 million or $395 psf ppr.
The top two bids are not too far from market predictions in early January, even though the government has just introduced anti-speculation measures - a seller's stamp duty on residential property bought after Feb 19 and sold within a year, as well as a lower loan-to-value limit of 80 per cent for all private housing loans.
The response to the latest government land tender 'suggests that some developers think the measures will not have a significant impact in the longer term', said Knight Frank chairman Tan Tiong Cheng.
Going by the tender results, Colliers International research and advisory director Tay Huey Ying said some developers are 'realistically bullish' and there is still confidence in the mass-market sector.
Still, consultants point out that competition for land seems to have eased from a few months back. Ms Tay noted that bids for sites in the second half of last year were usually much higher than expected.
Jones Lang LaSalle South-east Asia research head Chua Yang Liang noted that there was just a 10 per cent gap between the top and second bids this time around. The gap can be as large as 20-30 per cent when the market is hot, he said.
Other participants in the tender that closed yesterday included Sim Lian Group and a tie-up between Frasers Centrepoint and NTUC FairPrice Co-operative. The lowest bid came from Soilbuild Group, at $71.2 million or $190 psf ppr.
The 1.56-hectare site is occupied by the three-storey Ten Mile Junction. The first two levels comprise commercial space with a gross floor area (GFA) of 121,191 sq ft, while the third houses an LRT station.
The winning developer will gain control of the commercial component. It can also build a residential development with a GFA of 254,394 sq ft on top of Ten Mile Junction. The residential project could yield some 200 apartments.
Going by consultants' estimates, the average selling price of the residential units could range from $700-$850 psf.
At the 99-year leasehold Mi Casa nearby, launched last year, three caveats were lodged for transactions at $658-$731 psf in January and February.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Ten Mile Junction site draws robust bids
By EMILYN YAP
(SINGAPORE) The first government land sale tender to close after measures were announced last Friday to cool the property market managed to draw some solid bids.
A 99-year leasehold residential site at the junction of Choa Chu Kang and Woodlands roads - which houses Ten Mile Junction - drew a top bid of $164 million or $437 per sq ft per plot ratio (psf ppr).
Far East Organization unit Dollar Land Singapore topped seven rivals with this bid.
Chip Eng Seng's CEL Development put in the second-highest bid of $148.3 million or $395 psf ppr.
The top two bids are not too far from market predictions in early January, even though the government has just introduced anti-speculation measures - a seller's stamp duty on residential property bought after Feb 19 and sold within a year, as well as a lower loan-to-value limit of 80 per cent for all private housing loans.
The response to the latest government land tender 'suggests that some developers think the measures will not have a significant impact in the longer term', said Knight Frank chairman Tan Tiong Cheng.
Going by the tender results, Colliers International research and advisory director Tay Huey Ying said some developers are 'realistically bullish' and there is still confidence in the mass-market sector.
Still, consultants point out that competition for land seems to have eased from a few months back. Ms Tay noted that bids for sites in the second half of last year were usually much higher than expected.
Jones Lang LaSalle South-east Asia research head Chua Yang Liang noted that there was just a 10 per cent gap between the top and second bids this time around. The gap can be as large as 20-30 per cent when the market is hot, he said.
Other participants in the tender that closed yesterday included Sim Lian Group and a tie-up between Frasers Centrepoint and NTUC FairPrice Co-operative. The lowest bid came from Soilbuild Group, at $71.2 million or $190 psf ppr.
The 1.56-hectare site is occupied by the three-storey Ten Mile Junction. The first two levels comprise commercial space with a gross floor area (GFA) of 121,191 sq ft, while the third houses an LRT station.
The winning developer will gain control of the commercial component. It can also build a residential development with a GFA of 254,394 sq ft on top of Ten Mile Junction. The residential project could yield some 200 apartments.
Going by consultants' estimates, the average selling price of the residential units could range from $700-$850 psf.
At the 99-year leasehold Mi Casa nearby, launched last year, three caveats were lodged for transactions at $658-$731 psf in January and February.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : DC rates may rise and affect en bloc sales
Business Times - 24 Feb 2010
DC rates may rise and affect en bloc sales
Consultants expect rates for residential use to climb 5-10%
By KALPANA RASHIWALA
(SINGAPORE) Development charges, which are paid to enhance or intensify the use of some sites, are headed north for residential use at the upcoming DC rate revision effective March 1, say property consultants.
They cite the increase in private home values since last year as well as aggressive land bids for residential sites at state tenders in the past six months.
On average, DC rates for landed and non-landed residential use could rise about 5 to 10 per cent. However, consultants are predicting that rates for commercial, industrial and hotel use could remain flat.
The upcoming DC rate revision will also be monitored by those trying to embark on collective sales, especially for sites whose redevelopment would involve sizeable DC payment. DC is part of total land cost to a developer. If the DC rate increases significantly and the value of the site remains constant, the developer will offer owners less for the site, explains CB Richard Ellis executive director Jeremy Lake.
'The problem today is that there's already a price gap between owners' and developers' expectations. This will be compounded if there's a significant hike in DC rates, in the case of sites with a significant DC component. The current environment (of rising private residential price expectations) is not conducive to owners reducing asking prices,' he adds.
'Hence for en bloc sites with significant DC component, the exposure to DC volatility can be very unhelpful in a rising market, whereas sites with zero or low DC component are fairly immune to DC volatility and those are good sites to work on.' Mr Lake reckons that the next DC rate revision on Sept 1 may be more keenly watched - than the March 1 update - as a higher number of en bloc sale efforts are likely to be at a more advanced stage then.
DC rates - which are revised on March 1 and Sept 1 each year - are specified by use groups (such as landed and non-landed residential, commercial and hotels) across 118 geographical sectors throughout Singapore. The review is conducted by the Ministry of National Development in consultation with Chief Valuer, who takes into account current market values.
Colliers International is projecting 8 to 10 per cent rise in average DC rates for non-landed residential use from March 1. The biggest hikes of up to 20 per cent are likely to be in places like Serangoon Avenue 3, Upper Thomson Road and Sengkang West Avenue where winning land bids at state tenders have been at substantial premiums of 48-86 per cent to land values imputed from the Sept 1, 2009 DC rates for these geographical sectors, says the firm's director Tay Huey Ying.
Suburban locations could see a bigger rise in DC rates than upmarket locations as last year's rebound in home sales and prices was led by the mass market segment, she argues.
Private-sector land deals too point to higher DC rates. For instance, the Parisian site at Angullia Park was sold in October at $2,058 psf per plot ratio - about 70 per cent above the DC-rate implied land value for the area.
DTZ's SE Asia research head Chua Chor Hoon reckons that non-landed DC rates will go up 15 to 25 per cent from March 1. Jones Lang LaSalle's associate director (research and consultancy) Desmond Sim predicts 10-15 per cent hikes in non-landed residential DC rates in mass-market suburban locations, outpacing a 5-8 per cent rise in prime districts.
As for landed residential DC rates, he forecasts a 10-15 per cent increase across all geographical sectors, with a bigger increase likely for Sentosa Cove and Good Class Bungalow Areas.
CB Richard Ellis executive director Li Hiaw Ho notes that the official price indices for detached, semi-detached and terrace houses rose 20-odd per cent from July to December 2009. In addition, 2009 saw the highest total value of GCB sales at $1.64 billion. He forecasts an average 5-10 per cent rise this round for landed rates.
Mr Li forecasts DC rates for commercial and industrial use will remain unchanged or even fall very marginally.
Colliers's Ms Tay, who is projecting an up to 5 per cent climb in average DC rate for industrial use, says: 'The government is unlikely to make significant upward adjustments to DC rates for industrial use group in general in the upcoming review given the nascent recovery of the manufacturing sector and the industrial property market. Also, JTC Corp industrial land rents have not been adjusted since they were revised downward in January 2009, says Ms Tay.
She reckons commercial DC rates will remain largely unchanged as office rents have remained weak.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
DC rates may rise and affect en bloc sales
Consultants expect rates for residential use to climb 5-10%
By KALPANA RASHIWALA
(SINGAPORE) Development charges, which are paid to enhance or intensify the use of some sites, are headed north for residential use at the upcoming DC rate revision effective March 1, say property consultants.
They cite the increase in private home values since last year as well as aggressive land bids for residential sites at state tenders in the past six months.
On average, DC rates for landed and non-landed residential use could rise about 5 to 10 per cent. However, consultants are predicting that rates for commercial, industrial and hotel use could remain flat.
The upcoming DC rate revision will also be monitored by those trying to embark on collective sales, especially for sites whose redevelopment would involve sizeable DC payment. DC is part of total land cost to a developer. If the DC rate increases significantly and the value of the site remains constant, the developer will offer owners less for the site, explains CB Richard Ellis executive director Jeremy Lake.
'The problem today is that there's already a price gap between owners' and developers' expectations. This will be compounded if there's a significant hike in DC rates, in the case of sites with a significant DC component. The current environment (of rising private residential price expectations) is not conducive to owners reducing asking prices,' he adds.
'Hence for en bloc sites with significant DC component, the exposure to DC volatility can be very unhelpful in a rising market, whereas sites with zero or low DC component are fairly immune to DC volatility and those are good sites to work on.' Mr Lake reckons that the next DC rate revision on Sept 1 may be more keenly watched - than the March 1 update - as a higher number of en bloc sale efforts are likely to be at a more advanced stage then.
DC rates - which are revised on March 1 and Sept 1 each year - are specified by use groups (such as landed and non-landed residential, commercial and hotels) across 118 geographical sectors throughout Singapore. The review is conducted by the Ministry of National Development in consultation with Chief Valuer, who takes into account current market values.
Colliers International is projecting 8 to 10 per cent rise in average DC rates for non-landed residential use from March 1. The biggest hikes of up to 20 per cent are likely to be in places like Serangoon Avenue 3, Upper Thomson Road and Sengkang West Avenue where winning land bids at state tenders have been at substantial premiums of 48-86 per cent to land values imputed from the Sept 1, 2009 DC rates for these geographical sectors, says the firm's director Tay Huey Ying.
Suburban locations could see a bigger rise in DC rates than upmarket locations as last year's rebound in home sales and prices was led by the mass market segment, she argues.
Private-sector land deals too point to higher DC rates. For instance, the Parisian site at Angullia Park was sold in October at $2,058 psf per plot ratio - about 70 per cent above the DC-rate implied land value for the area.
DTZ's SE Asia research head Chua Chor Hoon reckons that non-landed DC rates will go up 15 to 25 per cent from March 1. Jones Lang LaSalle's associate director (research and consultancy) Desmond Sim predicts 10-15 per cent hikes in non-landed residential DC rates in mass-market suburban locations, outpacing a 5-8 per cent rise in prime districts.
As for landed residential DC rates, he forecasts a 10-15 per cent increase across all geographical sectors, with a bigger increase likely for Sentosa Cove and Good Class Bungalow Areas.
CB Richard Ellis executive director Li Hiaw Ho notes that the official price indices for detached, semi-detached and terrace houses rose 20-odd per cent from July to December 2009. In addition, 2009 saw the highest total value of GCB sales at $1.64 billion. He forecasts an average 5-10 per cent rise this round for landed rates.
Mr Li forecasts DC rates for commercial and industrial use will remain unchanged or even fall very marginally.
Colliers's Ms Tay, who is projecting an up to 5 per cent climb in average DC rate for industrial use, says: 'The government is unlikely to make significant upward adjustments to DC rates for industrial use group in general in the upcoming review given the nascent recovery of the manufacturing sector and the industrial property market. Also, JTC Corp industrial land rents have not been adjusted since they were revised downward in January 2009, says Ms Tay.
She reckons commercial DC rates will remain largely unchanged as office rents have remained weak.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
CNA : Tender for Ten Mile Junction site attracts eight bids
Tender for Ten Mile Junction site attracts eight bids
By Wong Siew Ying, Channel NewsAsia | Posted: 23 February 2010 1914 hrs
SINGAPORE : The tender for a commercial-residential site at Ten Mile Junction in Choa Chu Kang has attracted eight bids.
The 1.56-hectare site is the first to be launched for tender this year under the Confirmed List of the government land sales programme.
The top bid of nearly S$164 million came from Dollar Land Singapore, a subsidiary of Lucky Realty Company.
This translates to a tendered sale price of some S$4,700 per square metre of gross floor area. And it is higher than market expectation of between S$135 million and S$150 million.
CEL Development, a subsidiary of Chip Eng Seng Corporation, put in the second highest bid at about S$148 million, followed by Sim Lian Land at about S$139 million.
The remaining bids for the site at the junction of Choa Chu Kang Road and Woodlands Road ranged from S$71 million to S$126 million.
The award of the tender will be announced at a later date pending evaluation of the bids.
In 2008, the government rejected the top bid of S$61 million for the same site as it was too low. - CNA/ms
By Wong Siew Ying, Channel NewsAsia | Posted: 23 February 2010 1914 hrs
SINGAPORE : The tender for a commercial-residential site at Ten Mile Junction in Choa Chu Kang has attracted eight bids.
The 1.56-hectare site is the first to be launched for tender this year under the Confirmed List of the government land sales programme.
The top bid of nearly S$164 million came from Dollar Land Singapore, a subsidiary of Lucky Realty Company.
This translates to a tendered sale price of some S$4,700 per square metre of gross floor area. And it is higher than market expectation of between S$135 million and S$150 million.
CEL Development, a subsidiary of Chip Eng Seng Corporation, put in the second highest bid at about S$148 million, followed by Sim Lian Land at about S$139 million.
The remaining bids for the site at the junction of Choa Chu Kang Road and Woodlands Road ranged from S$71 million to S$126 million.
The award of the tender will be announced at a later date pending evaluation of the bids.
In 2008, the government rejected the top bid of S$61 million for the same site as it was too low. - CNA/ms
CNA : URA releases Yishun industrial site for sale by public tender
URA releases Yishun industrial site for sale by public tender
By Mok Fei Fei, Channel NewsAsia | Posted: 23 February 2010 1431 hrs
SINGAPORE: More land for industrial use is being made available to the market.
The Urban Redevelopment Authority (URA) said on Tuesday that it has accepted an application from a developer to put up the industrial site at Yishun Avenue 6 for public tender.
The land parcel was made available for sale through the Reserve List system in May 2007. Under the system, a site would be released for sale only if a bid with an acceptable minimum price is received.
URA said it has received an application from a developer who has committed to bid at a price of not less than S$11.5 million for the land parcel.
As such, URA is making public the minimum price committed for the site. It will launch the public tender for the site in about two weeks.
The site, which has a maximum permissible gross plot ratio of 2.5, has a 60-year lease period and an area of 14,192.8 square metres.
- CNA/sc
By Mok Fei Fei, Channel NewsAsia | Posted: 23 February 2010 1431 hrs
SINGAPORE: More land for industrial use is being made available to the market.
The Urban Redevelopment Authority (URA) said on Tuesday that it has accepted an application from a developer to put up the industrial site at Yishun Avenue 6 for public tender.
The land parcel was made available for sale through the Reserve List system in May 2007. Under the system, a site would be released for sale only if a bid with an acceptable minimum price is received.
URA said it has received an application from a developer who has committed to bid at a price of not less than S$11.5 million for the land parcel.
As such, URA is making public the minimum price committed for the site. It will launch the public tender for the site in about two weeks.
The site, which has a maximum permissible gross plot ratio of 2.5, has a 60-year lease period and an area of 14,192.8 square metres.
- CNA/sc
ST : New progressive property tax system
Feb 23, 2010
BUDGET 2010
New progressive property tax system
By Jessica Cheam
SINGAPORE is shifting to a progressive property tax system that will mean lower- and middle-income property owners living in their homes will pay less tax.
All Housing Board (HDB) flat owners and a large majority of private property owners will enjoy tax savings of $240 a year as a result of the new system.
Finance Minister Tharman Shanmugaratnam said yesterday in his Budget statement that the Government intends to keep the property tax 'as a means of redistribution in our society, together with our income tax regime'.
Although the current system already taxes the wealthy more than others, there is 'scope for us to introduce further progressivity in property taxes', he said.
The new property tax regime is a three-tiered one at 0 per cent, 4 per cent and 6 per cent, and replaces the current flat 4 per cent concessionary rate for owner-occupied residential homes.
The first $6,000 of a home's annual value (AV) will be exempted from property tax - saving owners $240.
The next $59,000 will be taxed at 4 per cent and any AV above $65,000 will be taxed at 6 per cent.
The AV is the estimated annual rent of an owner-occupied property if it were rented out, excluding rent for furniture, fittings and any service charge.
The new system will apply for property tax payable from January next year.
Currently, owner-occupied homes with AVs below $10,000 also enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.
This will cease and be replaced by the new system. All other non owner-occupied properties are taxed at 10 per cent and are unaffected by the new tax regime.
Mr Tharman explained yesterday that when the Government abolished estate duty entirely in 2008, property tax was the remaining form of tax on assets.
He said the Government intended to retain property tax as it did not affect the middle and upper-middle groups more than the wealthier ones.
This was the reason that estate duty, which had been impacting middle and upper-middle income earners to a disproportionate extent, had been scrapped.
Mr Tharman added that a moderately progressive property tax system, together with an income tax system that collects more tax from the wealthy and a flat goods and services tax rate that everyone pays, will, together form a fair system of taxes in Singapore.
'Everyone pays something, but the rich pay more. Taken together, the overall burden of taxes will and must remain low by international standards,' he said.
He also noted, however, that as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time.
KPMG executive director (tax services) Leonard Ong said yesterday that the new system is a 'fairer way of collecting property taxes, as only a small, wealthier majority end up paying more'.
Indeed, owners of high-end properties will see a small increase in tax payable.
They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore, said Mr Tharman.
Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year.
A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year.
However, the new tax rates, even for the high-end, will remain lower than in most international cities, he added.
'That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike.'
Real estate consultancy Colliers International managing director of China, Singapore and Taiwan, Mr Dennis Yeo, said the switch to a more moderate progressive tax schedule is a more long-term approach than the periodic tax rebates extended by the Government previously.
'It is expected to have little bearing on the property market in terms of market sentiment and activities,' he said.
This new progressive system of property taxes will cost the Government about $230 million a year initially, said Mr Tharman.
--------------------------------------------------------------------------------
What's changing
CURRENTLY: Owner-occupied residential properties are taxed at a concessionary 4 per cent rate.
In addition, owner-occupied residential properties with an annual value (AV) of below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.
The AV is the estimated annual rent of your property if it were to be rented out, excluding the rent for furniture, fittings and any service charge.
All other properties are taxed at 10 per cent.
BUDGET 2010:
For property tax payable from January next year, the 1994 property tax rebates will be replaced by a progressive property tax schedule for owner-occupied residential properties:
· 0 per cent for the first $6,000 of AV;
· 4 per cent for the next $59,000 of AV;
· 6 per cent for the balance of AV in excess of $65,000.
Non-owner-occupied residential properties and other properties will continue to be subject to 10 per cent property tax.
BUDGET 2010
New progressive property tax system
By Jessica Cheam
SINGAPORE is shifting to a progressive property tax system that will mean lower- and middle-income property owners living in their homes will pay less tax.
All Housing Board (HDB) flat owners and a large majority of private property owners will enjoy tax savings of $240 a year as a result of the new system.
Finance Minister Tharman Shanmugaratnam said yesterday in his Budget statement that the Government intends to keep the property tax 'as a means of redistribution in our society, together with our income tax regime'.
Although the current system already taxes the wealthy more than others, there is 'scope for us to introduce further progressivity in property taxes', he said.
The new property tax regime is a three-tiered one at 0 per cent, 4 per cent and 6 per cent, and replaces the current flat 4 per cent concessionary rate for owner-occupied residential homes.
The first $6,000 of a home's annual value (AV) will be exempted from property tax - saving owners $240.
The next $59,000 will be taxed at 4 per cent and any AV above $65,000 will be taxed at 6 per cent.
The AV is the estimated annual rent of an owner-occupied property if it were rented out, excluding rent for furniture, fittings and any service charge.
The new system will apply for property tax payable from January next year.
Currently, owner-occupied homes with AVs below $10,000 also enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.
This will cease and be replaced by the new system. All other non owner-occupied properties are taxed at 10 per cent and are unaffected by the new tax regime.
Mr Tharman explained yesterday that when the Government abolished estate duty entirely in 2008, property tax was the remaining form of tax on assets.
He said the Government intended to retain property tax as it did not affect the middle and upper-middle groups more than the wealthier ones.
This was the reason that estate duty, which had been impacting middle and upper-middle income earners to a disproportionate extent, had been scrapped.
Mr Tharman added that a moderately progressive property tax system, together with an income tax system that collects more tax from the wealthy and a flat goods and services tax rate that everyone pays, will, together form a fair system of taxes in Singapore.
'Everyone pays something, but the rich pay more. Taken together, the overall burden of taxes will and must remain low by international standards,' he said.
He also noted, however, that as HDB homes gradually appreciate in value over the long term, flat owners will see an increasing property tax bill over time.
KPMG executive director (tax services) Leonard Ong said yesterday that the new system is a 'fairer way of collecting property taxes, as only a small, wealthier majority end up paying more'.
Indeed, owners of high-end properties will see a small increase in tax payable.
They comprise the top 3 per cent of private owner-occupied residential properties, or the top 0.4 per cent of all owner-occupied homes in Singapore, said Mr Tharman.
Homes with AVs of about $80,000 will face only a small increase in tax, of slightly less than $100 per year.
A property with an AV of $150,000, which typically is a large property in the central districts and is within the top 0.5 per cent level of private owner-occupied homes, will face an increase in property tax of about $1,500 per year.
However, the new tax rates, even for the high-end, will remain lower than in most international cities, he added.
'That is as it should be, so that we remain a vibrant and attractive place for businesses and individuals alike.'
Real estate consultancy Colliers International managing director of China, Singapore and Taiwan, Mr Dennis Yeo, said the switch to a more moderate progressive tax schedule is a more long-term approach than the periodic tax rebates extended by the Government previously.
'It is expected to have little bearing on the property market in terms of market sentiment and activities,' he said.
This new progressive system of property taxes will cost the Government about $230 million a year initially, said Mr Tharman.
--------------------------------------------------------------------------------
What's changing
CURRENTLY: Owner-occupied residential properties are taxed at a concessionary 4 per cent rate.
In addition, owner-occupied residential properties with an annual value (AV) of below $10,000 can enjoy the ongoing 1994 property tax rebates ranging from $25 to $150, depending on the AV of their properties.
The AV is the estimated annual rent of your property if it were to be rented out, excluding the rent for furniture, fittings and any service charge.
All other properties are taxed at 10 per cent.
BUDGET 2010:
For property tax payable from January next year, the 1994 property tax rebates will be replaced by a progressive property tax schedule for owner-occupied residential properties:
· 0 per cent for the first $6,000 of AV;
· 4 per cent for the next $59,000 of AV;
· 6 per cent for the balance of AV in excess of $65,000.
Non-owner-occupied residential properties and other properties will continue to be subject to 10 per cent property tax.
ST Forum : New measures won't help market bloom
Feb 23, 2010
PROPERTY
New measures won't help market bloom
LAST Saturday's report, 'New rules to curb property speculation', puzzles me. Each time the media reports on a heightened interest in the property market, such as queues for condominiums or higher prices of newly launched condos, a new rule is introduced.
A situation in which all players in the market must guess constantly about government policy is unhealthy for a stable property market.
The market is currently trying to pick itself up after a state of depression since the most recent boom in 1997.
There are still many mass market condos today where owners have been unable to break even (after factoring in interest costs) on units they bought more than a decade ago.
For every new condo launched at a record-breaking price, there are several in the secondary market in good areas transacted at less than $600 per sq ft.
However, as this secondary market is of less news interest, the general impression given is that all condos are hitting record prices and the market is out of hand.
As for loans, banks are now extra prudent following the economic downturn and Singaporeans in general are not highly leveraged.
Speculation has not reached unduly high levels and trying to attack it too early may damage the entire market, not just curb speculation.
The fundamental problem now is not a property bubble but the unrealistic expectations of buyers who want good locations and good views at affordable prices but are not willing to accept the fact that, in a healthy and growing economy, it is normal and even desirable for prices to rise steadily.
Bobby Jayaraman
PROPERTY
New measures won't help market bloom
LAST Saturday's report, 'New rules to curb property speculation', puzzles me. Each time the media reports on a heightened interest in the property market, such as queues for condominiums or higher prices of newly launched condos, a new rule is introduced.
A situation in which all players in the market must guess constantly about government policy is unhealthy for a stable property market.
The market is currently trying to pick itself up after a state of depression since the most recent boom in 1997.
There are still many mass market condos today where owners have been unable to break even (after factoring in interest costs) on units they bought more than a decade ago.
For every new condo launched at a record-breaking price, there are several in the secondary market in good areas transacted at less than $600 per sq ft.
However, as this secondary market is of less news interest, the general impression given is that all condos are hitting record prices and the market is out of hand.
As for loans, banks are now extra prudent following the economic downturn and Singaporeans in general are not highly leveraged.
Speculation has not reached unduly high levels and trying to attack it too early may damage the entire market, not just curb speculation.
The fundamental problem now is not a property bubble but the unrealistic expectations of buyers who want good locations and good views at affordable prices but are not willing to accept the fact that, in a healthy and growing economy, it is normal and even desirable for prices to rise steadily.
Bobby Jayaraman
ST Forum : They don't go far enough in curbing excess
Feb 23, 2010
They don't go far enough in curbing excess
WHILE I welcome the government measures announced in last Saturday's report, 'New rules to curb property speculation', I doubt if they are effective enough to cool the market.
The rise in private and public property prices in the past four years has far outpaced the average Singaporean's pay hike.
I can think of half a dozen reasons for the sharp increase in private property prices:
· Low interest rates;
· The sharp rise in the non-resident population between 2006 and last year;
· A loss of faith in investing with banks, investment banks and fund managers following the collapse of Lehman Brothers;
· The low deposit and creative payment schemes crafted by developers;
· The storage of collective property sales which were not promptly developed but kept in developers' land banks, resulting in short supply; and
· The herd mentality leading to the property chase.
To discourage speculation, the Government should raise the interbank interest rate to at least 2.5 per cent to help beat its projected inflation rate of 2 to 3 per cent this year.
Review capital gains tax on property bought and sold within three years - a measure used in the middle of the last decade.
Ban collective sales of condominiums or landed property which are less than 30 years old, unless there is a good reason to do so.
To avoid a land squeeze, developers must redevelop an en bloc property within three years of acquisition.
David Goh
They don't go far enough in curbing excess
WHILE I welcome the government measures announced in last Saturday's report, 'New rules to curb property speculation', I doubt if they are effective enough to cool the market.
The rise in private and public property prices in the past four years has far outpaced the average Singaporean's pay hike.
I can think of half a dozen reasons for the sharp increase in private property prices:
· Low interest rates;
· The sharp rise in the non-resident population between 2006 and last year;
· A loss of faith in investing with banks, investment banks and fund managers following the collapse of Lehman Brothers;
· The low deposit and creative payment schemes crafted by developers;
· The storage of collective property sales which were not promptly developed but kept in developers' land banks, resulting in short supply; and
· The herd mentality leading to the property chase.
To discourage speculation, the Government should raise the interbank interest rate to at least 2.5 per cent to help beat its projected inflation rate of 2 to 3 per cent this year.
Review capital gains tax on property bought and sold within three years - a measure used in the middle of the last decade.
Ban collective sales of condominiums or landed property which are less than 30 years old, unless there is a good reason to do so.
To avoid a land squeeze, developers must redevelop an en bloc property within three years of acquisition.
David Goh
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To know more how this is really work for you and your clients....
Please contact me Terence Tay @ (+65) 9387-5896 or email : terencetay.kh@gmail.com
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