Finally the long waited for Ei8ht Raja by Popular land is launched. It is likely that Popular Land would not like to hold back longer after the cooling measures by Government in end Aug.

Situated off the Jalan Rajah, and adjacent to many CDL newly launched projects & Far East Vista Residences, Right Raja may be preferred by many as it is tucked away from the main road, therefore the noise and dust pollution is not much of concern. Popular Land is launching the development of only 26 units at $1350 psf, which I thought a reasonable pricing given its finishes and exclusivity. The wardrobes and kitchen cabinets are by Mu Dian, bathroom fixtures by Azzurra of Italy and Steinberg of Germany, while the kitchen appliances are by Gaggenau. These are relatively much higher ranking and positioning in relation to the recently released Thomson 368 and Cube 8 by CDL.

The development is made up of spacious 2 and 3 bedroom apartments plus study, 1560 and 2023 sqft respectively. This unit areas are pretty rare in today’s market with the high pricing per sq foot.

I enclose some of the interior shots for your perusal. Should you be interested in the development, do give me a ring so we could make arrange to the sales gallery at 18 Shelfod Road.

With the series of cooling measures introduced lately by Government, we expect to see more caution from developers in their land bidding. However freehold prime sites with sizeable areas are difficult to come by nowadays, therefore the recent enbloc at Pastoral View is going stir interest in some mature and sophiscated buyers if the selling prices of the residential units are priced right.

Pastoral view site is a prime site with its freehold title, with its proximity to Novena shopping malls and MRT station. In addition the 2 freehold sites have a combined land area of 51,395 sq ft which offers greater variety and economies of scale in the development. Therefore the unit land price of $847 psf ppr is relatively attractive. If the developers are able to work out less than $500 psf for the construction cost inclusive of professional fees and miscellaneous, Far East & OPH can easily fetch the project at expected $1800 psf with a fat attractive 33.3 % profit margin.

Far East, Orchard Parade buy Bassein Road residential plots

FAR East Organization and its listed unit Orchard Parade Holdings have clinched their second residential development site this week. The duo will buy Pastoral View (through a collective sale) and the next door plot being sold by OCBC for a total of $122 million.

This works out to a unit land price of about $847 per square foot per plot ratio (psf ppr) inclusive of a marginal development charge (DC) payable for OCBC’s plot at 11 Bassein Road. No DC is payable for Pastoral View, at 7 Bassein Road. The two freehold sites have a combined land area of 51,395 sq ft and can be redeveloped into a new condo with about 140 units averaging 1,000 sq ft. The District 11 properties near Novena MRT Station are zoned for residential use with a 2.8 plot ratio and 36-storey allowable height under Master Plan 2008.

Market watchers estimate the breakeven cost for a new condo on the site could be around $1,300 psf. In July, City Developments released its 368 Thomson freehold condo at an average price of about $1,350 psf.

‘The raft of cooling measures introduced by the government has resulted in some developers turning cautious but many are still keen on prime freehold land parcels with good attributes that are difficult to come by,’ said Tan Hong Boon, deputy managing director of Credo Real Estate. The company handled the sale of the two properties through a tender which closed last month, attracting a handful of submissions.

Credo did not give a split of the $122 million between Pastoral View and the plot sold by OCBC. However, Mr Tan said Pastoral View’s reserve price has been met. Pastoral View’s sale is subject to approval of the Strata Titles Board as owners’ unanimous consent has not been secured. Owners of Pastoral View’s 50 units stand to receive gross sale proceeds ranging from slightly over $1 million for studio apartments to $4.37 million for the penthouse. These sums are 80-90 per cent more than what the units would have sold for individually, according to Mr Tan.

Earlier this week, Far East and OPH clinched a 99-year leasehold plot at Jalan Eunos at a state tender on which they plan to develop a five-storey condo project that will incorporate some townhouses. Their winning bid of $414.57 psf ppr was 26.5 per cent above the next highest offer.

OPH said yesterday it will be taking stakes of 20 per cent in the Jalan Eunos site and 30 per cent in the Bassein Road properties.

Source : Business Times – 10 Sep 2010

Melrose Court sold for S$44m in en bloc sale

Melrose Court in Balestier has been sold for S$44 million in a collective sale.

The 32-unit residential development at No.10, Lorong Limau was sold to local boutique developer Melrose Land.

The property’s broker, Colliers International, says that Melrose Court is not linked to Melrose Land and notes that the sale is subject to the approval of the Strata Titles Board.

The freehold residential site has an area of 23,789 square feet.

Under the 2008 Master Plan, it has a gross plot ratio of 2.8.

Including the development charge of about S$277,235, the sale price translates to a land price of about S$665 per sq ft per plot ratio.

Colliers International says that upon approval, each owner is expected to receive gross proceeds of some S$1.129 million to S$2.261 million from the sale, depending on the size of their unit.

It also says that the site could accommodate a residential development of up to 36 storeys, comprising some 88 units of 830 sq ft each.

Source : Channel NewsAsia – 1 Sep 2010

Therefore CDL must be very pleased that they have fully launched all developments at the Balestier and Thomson area before 31^st Aug 2010, the date that the measures are made effective. However it is not so to Popular Holding Ltd owning 2 plots of lands at the same area. Popular Holding targeted to launch its project, 8 Raja, later this year, consisting of 2 parcels of land at No. 8 Jalan Raja Udang, and 15 Jalan Datoh. In year 2007, Popular purchased all the strata units at View Point at Jalan Datoh  for $16.5mil and at Shiba Apartments at Jalan Raja Udang for $15.5 mil. For a company with household name that best known for its bookstores and schoolbooks, the venture into Singapore property has been viewed as rather testing and risky. We will see if the launch schedule will be as planned, or like several project launches, which have been delayed till hthe dusts have settled down.

In today’s sellers’ market, many of house owners are considering selling the houses at good price, trying to match the successful launches nearby. However I do sense signs of resistance in resale market from buyers, especially in older developments asking close to nearby new launched projects prices.

I understand all buyers would like to sell a price a notch higher than the market value, especially with the current market moving upwards. There is an expectation that I will try to manage in guiding the right selling price that all sellers should have. In order to sell your house at a good price within a reasonable time frame, you should be looking a fair market value that an informed buyer will pay.

Other than giving a Comparative Market Analysis (CMA) of your house, I would give you some realistic figure based on the latest market performance in terms of current interest rates, the rental market, and other updates that will affect your selling.

All sellers want to fetch the best pricing in selling their houses, yet minimizing the frustration and stress along the way and facilitating the process smoothly and shortly are equally critical.

Other than the pricing being important, the other key is to give yourself as much time as possible in selling. It would open up to more offers. The realistic average time one should aim at is 90 days, very much depending on your asking price, house location and condition.

CLOSING THE DEAL

When it comes to negotiating a deal, I will make sure my clients are thinking clearly when accepting an offer or objecting an offer thinking the other party will counter offer. Let’s state one scenario:

In the first weekend of the openhouse, we have a first buyer making an offer just $10k below the asking price. It makes you so positive about your house worth and the uprising real estate market that you counter with $10k above the listing price. The buyer is annoyed that you do not adhere to the listing price and walk away.

Thinking that the 1^st buyer already making offer close to your listing price, you decide to stick on to $10k above asking and waited. Of course that is always a chance that you get a full priced offer on the next day, however there also stand a possibility that you end up the only one offer you receive in the next 2 months.

I make sure that all specific scenarios and offers are being put into perspective for all sellers, that may most of time save the frustration and annoyance in salvaging a deal that you should able to close smoothly.

Do drop me a note if you have query in selling your house. I will try to reply within 3 days. If not, you are welcome to call me anytime at my hp 9681 7684.

The part continues to cover the project Thomson 368.

 UNIT PLANS

The architect has managed to submit Thomson 368 in time and enjoyed the GFA exemption of bay window and planter box.

1+Study:

The 1+Study unit of 689 sf comes with an open kitchen concept. For a size of this type, the occupiers are expected to be single or newly wedded couple with no kids. Therefore open kitchen with basic appliances may work well for you. However I do not like the idea of walking through the longish corridor along kitchen before reaching the rather small living space. The placement of the dining table is also not so appropriate, blocking the corridor access to bedroom.

Masterbed room is pretty spacious, and many would like the option of the study room able to accommodate a single bed.

I was pleasantly surprised to find a yard provided for this unit type. However I would have thought this is more necessary for bigger units like 2 bedders, where the yard provision is lacking. There is no clear hierarchy in terms of spatial provision in the project.

In a one bedder and studio unit type, many would prefer toilet to be made accessible without getting through the bedroom unit. It is especially inconvenient when you have guests at home.

2 & 3 bedroom Apartment

There are 2 bedroom unit types of 2 bedders of 872 and 883 sf respectively. As mentioned earlier, yard is missing from this unit type.

This 3 bedroom unit type comes with an utility room, 2 baths and one WC.

Living and dining spaces are not spacious but functional, with a spacious balcony area cum planter.

The units will be the stack facing the full blast of west sun, especially for stack 2. Therefore it is not easy to miss the extensive RC ledge across the façade, which could be a sun shading devices to cut down the heat.

The usual master bath tub is missing from all unit types except the 4 bedroom apartments.

4  bedroom Apartment

The 4 bedders boast to have 270 deg view towards the city. This unit of 1722 sf comes with private lift. This unit comes with a balcony with extensive planter area. Surprisingly for many showflat viewers do not find the living and dining room spacious with a unit comes with 1722 sf.  It is due to the layout of living and dining being sandwiched by wall and balcony.

This unit comes with a dry & wet kitchen, and a yard that many home makers will be very happy of. And this is the only unit comes with a bath tub for the master bath room.

PRICING

CDL has again hit it right with the pricing strategy they set.  With each of projects starting from the Arte, Cube 8 and this time round 368 Thomson, they are progressively setting off a new price hike to the Balestier and Thomson property transactions. As to date, 368 Thomson has been fully sold at an average price of $1400 psf, which is the highest among all three projects.

THOMSON 368 SELLERS

Have to do a bit of advertisment: If you are the lucky ones managed to purchase a unit from the Thomson 368/ Cube 8, and intend to sell prior to the TOP, welcome to contact me as I haver ready buyers in hand ready to purchase them.

The main Balestier Road has retained some of its charm with the presence of the Tua Peck Kong temple, Balestier Market and Food Centre, shophouses selling lighting fixtures and other home fittings, as well as popular eateries such as the famous tau sar piah shop, the Founder Bak Kut Teh Restaurant, the bak chor mee stall and Boon Tong Kee chicken rice restaurant. The greatest transformation, however, is happening on the side roads off Balestier Road, for instance on Bhamo, Mimbu and Mandalay Roads. Many of the old apartment blocks have made way for new condominium towers, with some newly completed and others at various stages of construction.

The biggest agent of change in the Thomson Road-Balestier Road neighbourhood has been giant developer City Developments Ltd (CDL), which snapped up a cluster of eight collective-sale sites in 2006/07, and has since launched and fully sold three new larger projects on those sites, starting with the 336-unit The Arte early last year, and most recently, 368 Thomson, which was fully sold as at end-July.

Each project has been launched at successively higher prices. For instance, The Arte is a redevelopment of the former Lok Cho Apartments, Comfort Mansion and a walk-up apartment block along Jalan Raja Udang, just off Balestier Road. When it was launched in early February last year, sentiment in the property market was still rather cautious and CDL initially priced the project at an average of S$880 (RM2,053) psf. Units at The Arte have been changing hands at S$1,000 to S$1,250 psf in sub-sales in the last two months, according to caveats lodged with URA.

Meanwhile, the 177-unit Cube 8 (to be located on the site of the former Albany and Thomson Mansions) was launched and fully sold early this year, at an average price of S$1,250 psf. The latest launch in the vicinity was the neighbouring 157-unit 368 Thomson, a redevelopment of the former Concorde Residences, Balestier Court and Bright Building. Since VIP previews began on July 9, the project has been fully sold at an average price of S$1,400 psf, with most of the units snapped up during the first few days.

The success of CDL’s projects at the Thomson end have certainly contributed to the hype and boosted prices of projects in the Balestier neighbourhood. Since the start of the year, a handful of collective sale sites have been put on the market, with three transacted successfully. The first collective sale transaction of the year was 6 Jalan Ampas, an industrial building jointly sold by the owners for S$27.5 million in February. The other collective sales were Diamond Tower at Jalan Rajah, which was sold to boutique developer EL Development for S$49.6 million in April; and Goodwill Mansion, along Balestier Road, for S$20 million.

What’s adding to the buzz in the Balestier neighbourhood is a circular sent out by URA in July 2008, which said it had completed the review of 15 industrial buildings in the Jalan Ampas and Lorong Ampas neighbourhood and deemed that this cluster of buildings could be rezoned for residential use at a gross plot ratio of 2.8 upon redevelopment. “Following the announcement, the global financial crisis came, so the owners couldn’t do anything about it because nobody wants to sell at the bottom of the market,” notes Tan Hong Boon, deputy managing director of Credo Real Estate.

But, things are looking up now. “Such sites have attracted new entrants, mainly the small- to medium-sized developers, and the contractors-turned-developers,” says Ho Eng Joo, executive director of investment sales at Colliers International.

Global Orion’s maiden residential project will be a redevelopment of the old industrial building at 6 Jalan Ampas purchased for S$27.5 million in February

One such player is Indonesian Satia Narjadin, managing director of Global Orion Properties, who purchased the site at 6 Jalan Ampas in his maiden foray into residential development in Singapore. The sale was brokered by Credo Real Estate. The 38-year-old Narjadin, who runs the family-owned business, had decided to focus on Singapore since 2006, developing three strata-titled industrial projects, two of which have been launched with units sold to investors or business occupiers. The company’s maiden project was i-Lofts@Changi, a three-storey building with terraced units; and the second was the 654-unit Northstar@AMK, located at the corner of Yio Chu Kang Road and Ang Mo Kio Avenue 5. Next month, the latest industrial project will be launched in Pasir Panjang. Called Meissa, it is near Mapletree Business City and across the street from the upcoming Pasir Panjang MRT station.

“We want to ensure that, just like all our industrial developments, our residential project will also have a distinctive address,” says Narjadin. His idea is that the project will be modern and sleek, with full-height glass — an orientation that will allow every unit to enjoy an unobstructed view of the city.

The newly completed 336-unit The Arte at Thomson has seen units changing hands in sub-sales at S$1,000 to S$1,250 psf in the last two months

Global Orion paid S$27.5 million for the 27,838 sq ft freehold site and will be paying an estimated S$18.7 million in development charges to have the site rezoned for residential use. Inclusive of the development charge for the conversion of use from industrial to residential, as well as construction costs, Narjadin estimates that the total cost of the project could amount to S$80 million. The site can be redeveloped into a residential tower of about 100 units and up to 36 storeys.

He says: “The whole area [Balestier] is undergoing a transformation and, owing to its proximity to the Novena and the city area, it’s benefiting from a spillover effect. That’s why we decided to focus our attention on this site.”

Given that the project is just a short driving distance to both Orchard Road and the CBD via the Pan Island Expressway and the Central Expressway, Narjadin foresees the project will appeal to singles and young couples because of its central location. Thus, he intends to build largely one- and two-bedroom units. “While our units are not large, we still want to give buyers the luxury of space,” says Narjadin. The one-bedroom apartments will be around 500 sq ft, and the two-bedroom apartments will measure 800 sq ft, he adds.

Narjadin has appointed renowned Singapore-based architectural firm Ong & Ong Architects to design the project and execute his vision. Founded by the late former President Ong Teng Cheong and his wife, Ong & Ong is now helmed by their son, Tze Boon, who is now chairman. The firm has designed some significant condominium projects in Singapore in recent years, including CDL’s 910-unit City Square Residences, adjacent to the City Square shopping mall with 700,000 sq ft of retail space; the 315-unit Raintree by developer Frasers Centrepoint, located at the foot of Bukit Timah Hill Nature Reserve; and the 646-unit Icon in Tanjong Pagar by Far East Organization.

Narjadin is familiar with the Balestier neighbourhood, having been educated in Singapore and attended Bartley Secondary School. “Yes, I grew up here,” he says. “When I was in secondary school, I had a lot of friends who lived in the old apartments on Moulmein Road, some of which have probably been torn down and redeveloped.” Narjadin is looking at buying the penthouse in his development when it is launched early next year.

Left: The first phase of the 65-unit D’Mira was launched in May, with 21 of 32 units released sold at an average of S$1,100 psf. Right: Artist’s impression of BS Capital’s upcoming residential project, a redevelopment of the Colourscan Building at Lorong Ampas-Kim Keat Road

Another new entrant in the Balestier neighbourhood is BS Capital, which also picked up an industrial building, Colourscan Building, at the corner of Lorong Ampas and Kim Keat Road, for S$36 million. URA has already approved the rezoning of the site from business to residential use with a plot ratio of 2.8, which means a 20-storey residential project can be built there. The price tag works out to S$670 psf per plot ratio (ppr) for the 32,544 sq ft freehold site, assuming an estimated development charge of S$25 million. Colliers’ Ho brokered the sale.

BS Capital appointed renowned architectural firm Palmer & Turner Architects (the same architect for its recently completed Lumiere on Mistri Road) to

Left: Soilbuild Group’s recently completed 151-unit Montebleu was launched in March 2007 at an average of S$980 psf. Most recently, sub-sales in June and July have ranged from S$1,290 to S$1,380 psf.

design its project at Kim Keat Road, a 160-unit development that will also be made up largely of studios and one- and two-bedroom apartments. “While the design will be a blend of contemporary and traditional, given the location, the units will be user-friendly,” says BS Capital CEO Chin Teck Chuan.

To him, a user-friendly size for a studio apartment is about 400 sq ft, while one-bedroom apartments should be a comfortable 500 sq ft and two-bedroom apartments 700 sq ft. “We want to pitch our project as a mid-tier city fringe development, something that people can aspire to upgrade to, or downsize to,” he adds. “People are increasingly recognising that they don’t have the luxury of space anymore in Singapore, and even HDB flats have shrunk over the years.”

EL Development, the property development arm of construction group Evan Lim & Co, which purchased Diamond Tower, is also a new kid on the block in the Balestier area. It has developed projects in the prime districts, including the 32-unit Stevens Suites, which was launched in June, as well as Illuminaire on Devonshire, which was sold out within three days of its preview last year. The developer paid S$49.6 million for the site and intends to build a 108-unit project of 30 storeys there. Based on today’s construction prices, the quantum price paid translates into a breakeven price of S$1,200 psf.

“We want to create a product that’s different from the surrounding developments,” says Lim Yew Soon, managing director of EL Development. He is entering the neighbourhood because land prices in the area are still affordable compared with that in the prime districts, which “are now very high”, he says, “and will put a strain on affordability unless you build very small units.” He intends to build regular-sized one-, two- and three-bedroom apartments in his new project, targeted at both HDB upgraders as well as private property dwellers. He expects to launch it in 1Q2011. It terms of pricing, it could be around S$1,400 psf, which is “the new price benchmark set by 368 Thomson”, he adds.

New completions, pricing differential

Some of the old conservation shophouses and Balestier Plaza along Balestier Road

Since last year, a handful of new developments has been completed in the Balestier area. Along Irrawady Road, there is the 53-unit The Centrio by Soilbuild Group, which was completed last September and is fully sold. The project was launched at an average price of S$1,025 psf. The most recent resale was in June, when a unit changed hands for S$1,056 psf and another went for S$1,264 psf. The most sub-sales were seen just after completion in January, when units changed hands at S$1,080 to S$1,209 psf.

Another Soilbuild project that was recently completed is the 151-unit, 34-storey Montebleu on Mimbu Road, which is also fully sold. The project was launched in March 2007 at an average price of S$980 psf and, most recently, sub-sales in June and July have ranged from S$1,290 to S$1,380 psf. A major player in the Balestier neighbourhood, Soilbuild also launched the 127-unit The Mezzo (the former Ruby Plaza) in March last year, and to date, all the units in the 28-storey tower have been sold.

Nearby on Mandalay Road is The Axis by Novelty Group, a 52-unit project that was recently completed and is fully sold. Prices may have started in the S$800 psf range in 2007, when units were first released, but the most recent resale of units for April and May have been at S$1,034 to S$1,141 psf.

Another project that was completed last year is the 180-unit twin tower Pavilion 11 by UOL Group. In the resale market, the high-floor units are commanding S$1,300 to S$1,350 psf, while low- to mid-level units have changed hands at S$1,151 to S$1,292 psf. Pavilion 11 is closer to the Novena area near the medical cluster, and is considered to be in prime District 11.

Boutique developer Roxy-Pacific Holdings is another major player in the Balestier area. Construction is underway at two of its projects, Nova 48 and Nova 88, which are one street apart from each other. The former is on Prome Road and the latter, launched early last year and fully sold, is on Bhamo Road, next to the Balestier Market. The company’s project in the Balestier neighbourhood that was recently completed is Marque@Irrawady, where all units except the penthouse have been sold.

Launched in mid-2007, units were sold at an average of S$1,000 psf. The most recent transaction was the sub-sale of a 16th floor, 1,690 sq ft unit that was sold for S$1.6 million, or S$947 psf.

Keith Yip, a specialist real estate agent in the Balestier neighbourhood, says demand for resale apartments in the area in recent months has come mainly from beneficiaries of the old projects in the en bloc sales. “While there’s interest, transaction volume has been thin as even sellers of the older projects are asking for prices of S$1,000 psf, and buyers are holding back,” Yip observes. Most of these people have lived in the Balestier area for many years and want to continue to live in the same neighbourhood. “So, they tend to look for older projects where units are larger than the new developments,” he adds.

‘Spillover demand’ from Thomson Road and Novena area
There is spillover demand from the Thomson Road area, where the most recent transaction at the recently completed Sky@Eleven hit a high of S$1,530 psf, notes Yip. At the other end of Balestier in the Novena enclave near the MRT, units at Frasers Centrepoint’s 417-unit Soleil@Sinaran recently sold at a median price of S$1,750 psf. “In comparison, most of the new projects in the Balestier area are S$1,000 to S$1,200 psf,” he says.

In the Newton area, directly across from Novena Square and the MRT station, is Newton Suites by UOL Group, which was completed in 2007. The owners are already asking for S$2,000 psf for their units, with most recent transactions in May at S$1,842 to S$1,850 psf. At the 175-unit Lincoln Suites, located just next door to Newton Suites, which was launched last year, the most recent transactions ranged from S$1,833 to a high of S$2,627 psf, according to caveats lodged in June.

Recently, there has also been a rise in rental inquiries in the Balestier area, notes Yip. Most are from tenants in the Newton-Novena area who are looking at new units in the relatively cheaper Balestier area. For instance, a two-bedroom apartment in Balestier can command monthly rental rates of S$3,000, compared with S$4,000 to S$5,000 in the Novena area, he says.

Yip is also seeing an increase in new enquiries about rental apartments from those in the medical field as the medical hub in the Novena area develops. The only drawback of the Balestier Road area is that the MRT stations at Novena and Toa Payoh are not within walking distance of any project, unless it is at the Novena end. For those who drive, however, it offers easy access to both the Central and Pan Island Expressways, he says.

The close of the tender for the collective sale of Melrose Court on Aug 12 has also drawn keen interest. Located on Lorong Limau, the four-storey, 32-unit apartment block was put up for sale at S$48 million, or S$688 psf ppr. Colliers’ Ho who is marketing the project, says interest has mainly been from small- to medium-sized developers and contractors-turned-developers.

Based on recent deals, the owners of collective or even industrial sites put up for sale today are looking at prices of S$600 to S$700 psf ppr, notes Tan Hong Boon, deputy managing director of Credo Real Estate. “Pricing of projects in Balestier has already surpassed the previous peaks,” he says. The 50-unit Pastoral View and an adjoining land parcel at Bassein Road owned by OCBC in the Novena area were recently offered for sale by tender. The indicative price for the site is S$130 million to S$150 million, or S$904 to S$1,043 psf ppr, says Tan, the marketing agent for the site.

“The site is located just 400m away from the Novena MRT station,” says Tan. “It is also next to the cluster of developments in the Novena area such as Novena Square, Velocity@Novena, the Novena Medical Centre, the upcoming Parkway Health Hospital and Tan Tock Seng Hospital, as well as the shopping and commercial area across the street like United Square, Goldhill Plaza and Goldhill Centre.” The tender for the site closes on Aug 23.

Given the location of the sites and their combined land area of 51,395 sq ft, it is said to have attracted the interest of the medium-sized to large listed developers as well. The combined site can be redeveloped into a high-rise tower of 140 apartments, assuming an average size of 1,000 sq ft each.

In May, MCL Land launched D’Mira, a 65-unit, 17-storey boutique development along Boon Teck Road, off Balestier Road. In the first phase of 32 units released, 21 were sold at an average price of S$1,100 psf, says the developer. MCL Land plans to release the second phase after the Hungry Ghost Month, which ends in early September.

With the new residential towers springing up as the Balestier neighbourhood is renewed, perhaps District 12 in Balestier will one day become as desirable a residential neighbourhood as the prime District 11 neighbourhoods that flank either end of the area — Thomson Road on one side, and the Novena-Newton area on the other.

Cecilia Chow is City and Country editor at The Edge Singapore

In the land scarce Singapore, people are getting more receptive to leasehold properties, being it commercial or residential. Therefore if your property is sitting on leasehold and expiring soon, you might be considering applying for lease topping up. And the approval rate is very much dependent on the government’s long term planning intention. Previously the government has been rather liberal in the approving on topping up leases. However with the Concept Plan 2011 to accommodate a projected 6.5 million population, we are seeing the decline in the approval for lease top up bid.

An article on the Lease top up for your leisure reading.

60% of lease top-up bids approved since 2007

Wed, Jun 23, 2010
The Business Times

By KALPANA RASHIWALA

(SINGAPORE) As the stock of buildings developed on 99-year leasehold sites sold by the government since the late 1960s gets older, more building owners are expected to apply to the authorities for lease top-ups.
Two such cases are currently under evaluation. But since 2007, the Singapore Land Authority (SLA) has processed 56 applications for lease extensions of which only about 60 per cent were approved. The other 40 per cent were rejected.

SLA’s spokesperson said in a written response to queries from The Business Times that in land-scarce Singapore, leases are generally allowed to expire without extension. Such a policy makes it possible for the government to recover land upon lease expiry, and reallocate it to meet fast changing socio-economic needs.

‘Nevertheless, lease extensions can be considered on a case-by-case basis,’ she said.

In evaluating requests for lease extensions, the government takes into account several factors including the long-term planning intention for the site and surrounding land, and whether the proposed use would optimise land.

SLA said that lease extensions granted since 2007 involved various uses such as commercial, residential, industrial and conservation properties. The period of the lease top-up depended on specific circumstances, but any top-ups together with the unexpired term of existing leases will not exceed 99 years.

‘This is in line with our current policy that all new state leases (for sites which are capable of independent development) should not exceed 99 years,’ said SLA.

Knight Frank chairman Tan Tiong Cheng sees a lot of soundness in the government’s approach.

‘To extend or not to extend? The answer lies in whether it fits into the long-term planning for the area. The government does not have to reveal its plans, so it has adopted a case by case approach,’ he says.

He cites the example of the government selling land for recreational use in Marina South on short-term leases of 20 years. ‘The government did not extend the leases when they expired and took the sites back because it had bigger plans for the area,’ Mr Tan said.

‘It’s a similar situation with the government’s plan for a new Central Business District on reclaimed land in the Marina area which can accommodate modern, big floor-plate office developments. What happens to ageing, pencil buildings on small plots in the old CBD? Should the government agree to reset their leases so that they can be redeveloped into new tiny office blocks for which there may not be much demand? The State may prefer to take back the sites when their leases expire and amalgamate them for a bigger development.’

In the meantime, leaving these buildings as they are may introduce urban blight. But if these owners propose to redevelop their buildings into apartments, thus furthering the government’s plan to increase inner-city housing, they may get their lease extensions. The first such case was Natwest Centre, which is currently being developed into The Clift.

Market watchers say building owners who apply for lease top-ups often do have redevelopment proposals, or plans to sell the property on the assumption of redevelopment.

DTZ executive director (consulting) Ong Choon Fah says many leasehold buildings are becoming physically obsolete. Some are also drawing undesirable occupier profiles. ‘If government is willing to top up leases, that will give these property owners an incentive to redevelop,’ she said.

The properties for which lease top-ups have been granted since 2007 are said to include the former Ong Building site, which is being redeveloped into the 76 Shenton project comprising 202 apartments, and the former Overseas Union House site, which is making way for a new 18-storey office project, 50 Collyer Quay.

But not all successful applications have their leases topped up to 99 years.

Lease upgrades approved in connection with CBD office redevelopments have sometimes been for less than 99 years to try and synchronise future lease expiries of all the sites on the same street block. The idea is to have all sites on that stretch revert to the state around the same time to accommodate more comprehensive planning and redevelopment for the area.

Analysts recall the case of 71 Robinson Road, whose lease was topped up in April 2007 not to the usual 99 years but 85 years and 10 months to match the remaining lease term for SIA Building next door. The latter’s lease was reset to 99 years in 1994. Leases for both sites will now expire in 2093.

SLA’s spokesperson said that for commercial uses, lease extensions may be granted if they help to achieve a certain planning intention – such as substantial intensification in land use – significantly earlier.

Analysts say that may explain why a few office building owners in the CBD reportedly had lease top-up applications turned down when they planned only retrofitting works, which are deemed as additions and alterations. On the other hand, those who supported their applications with planning approval from the Urban Redevelopment Authority to redevelop the site into a bigger office block have succeeded at lease top-ups.

I read with the article published on Saturday, July 10 2010, “Some missing out on property boom” by Esther Teo with gratification. With the current properties surging sky high, and many articles ‘talking up’ the market, this article helps to remind to us the inherent risks in property market. The prices will not be going up forever. What goes up will come down.

For projects launched amid a property boom when speculative mood is high, you tend to get burnt easily especially if you are not financially strong. Just take a look one of the laggards is 99 year leasehold Bishan 8 by Far East Organization: it was launched at an average of $1000 psf in June 1997, however the pricing of the development has not been catching up with the property hike now. The recent transactions have been hovering over average pricing of $800 psf, except with the most recent transaction at $912 psf transacted last month.

Other properties appearing on the list are Avalon at Anderson Road, Chelsea Gardens at Walshe Road, Duchess Crest at Duchess Avenue, Gardenville at Walshe Road, Seasons View at Pemimpin Drive, and Villea Marina at Jalan Sempadan.

From the chart, we are able to see that the sluggish pricing has been more prominent with properties with 99 year leasehold status. Though the pricing gap between freehold & leasehold has been narrowing in today’s market, the leasehold pricing will start to feel its greatest depreciation impact when it hits above its 50 years. The value of the property will be depreciating with an accelerating rate as the number of tenure reduces.

What if Jackie & Emil are your neighbours?

It is important that what type of neighbors you have. Many of time it would affect the property value you own.

Remember that superstar Jackie Chan & Emil Chau bought few apartments at the Centennia Suites at the former Kim Seng Plaza site? The 97-unit freehold condominium project, opposite Great World City and facing the Singapore River, is expected to be completed in 2013. It soon become an advertisement for the developer in promoting their sales. Having a celebrity in many way helps to boost your development, as many people think that it is glamorous or exclusive to be a neighbor of them.

In the other scenario, what if you have a next door neighbor littering at the shared lift lobby, keeps many pets, and behaving rough and uncultured? You will find difficulty in disposing the property and even have to lower the asking price in some situation. I ever encountered the situation in one of the development units that I marketed. I sympathized the seller since he was in a ‘helpless’ situation as many prospective buyers were turned off by the cluttered and dirty door front of the neighbor, even though his unit was perfectly okay.

Another eyesore that I face frequently is that you have neighbors love hanging out the wash in balcony, even though the development comes with each individual yard. You have bedsheets, clothes and underwears being dried in the balcony, creating quite a scene in the building façade. And we have this sight of hanging out the wash even in million worth condominium units.

And it seems that the problem does not only exist in Singapore. Check out the article out from HBA Malaysia.

Hanging out the wash

10/06/2005 The Sun Sujartha Kumarasamy

http://www.hba.org.my/news/2005/605/hanging.htm
Prestige and value

IMAGINE this. You have purchased a unit in what you hope to be a pretty impressive condominium development. The facilities are worthy of a club, the lawns are manicured, and even the security guard is alert and reassuringly suspicious of non-residents.

You spend a bomb renovating and then furnishing your home-in-the-sky until it looks like it’s ready for a magazine photo shoot. All is near perfect, except that some of your neighbours think it’s all right to have their balcony, and sometimes the common corridor, resemble a dhobi wallah on washing day.

Billowing in the breeze for all to see are bedsheets, comforters, underwear, pants, shirts and dresses. If they have children, you might even spot a forlorn teddy bear hung out to dry. An image that does not exactly lend itself to the “classy” vision the developer painted when you bought the place.

Everyone does it

“This laundry thing is a nightmare!” says real estate agent James Quah. He has been in the business for about 15 years, and says there have been several occasions where deals slipped through his fingers after prospective clients saw the facade of the units.

“Even if they were pleased with the layout of the place and location, the viewing exercise ended abruptly when they saw how some residents hung out their clothes. Although some brushed it off as part of ‘Malaysian culture’, others were doubtful about the condo management, and even of the profile of the residents there.”

He says this is a common problem in properties costing between RM200,000 and RM300,000. “You rarely see this [laundry aired in full view] in higher-end condos. For apartments that are priced lower than RM150,000, the problem is even worse. But nobody complains about this since everybody does it and it’s already a culture!”

Quah thinks that hanging clothes in a way that it can be seen externally affects the view of a building’s facade, and thus lowers its value. “The management should be stricter about this, and exercise more responsibility to make sure that residents do not go overboard in using visible areas to dry laundry like comforters, floor rugs… even underpants and panties!”

So, does such a practice affect the values of the entire condominium development? CS Yong of YCS Realty thinks it affects the impression one gets of the condo, but certainly does not deter anyone from buying a unit. “The prestige of the property will defi nitely be affected by the ‘multi-coloured fl ags’ hung over the balcony for drying. Surprisingly, most local buyers do not seem to be bothered by those unsightly views. Maybe they intend to do the same!” However, he contends that it will adversely affect the property value.
Tidak apa attitude

Yong thinks residents should not engage in such practices, but he isn’t too quick to assign blame. After all, he says, if the area meant for drying clothes suffers from poor ventilation and is always in the shadow, how can residents dry their clothes properly? On the other hand, the attitude of residents plays a part. “They still think and behave as if they are residing in a landed property.”

On what developers can do, Yong has this to offer. “I know of one project where the developers will bundle in a dryer where they do not offer a well-ventilated drying area for the owner. There is, however, a good chance that these dryers will never be used, even if given to residents. Think about the electricity consumption bill — some 1,000W to 2,000W can add up to quite a lot of additional expense per month!”

Real estate agent Felicia Hew, who specialises in high-end condos, says the laundry problem does not crop up in such properties. “Of course, a few residents will use the balcony to dry their clothes, but they will install special iron railings and do it within their balcony space. It’s not like they extend bamboo sticks out from the condos.”

Hew understands that sometimes, property managers are powerless against residents who blatantly hang out their laundry to dry. “Some managers do receive complaints from other residents who are disturbed by what they see. They can only send a letter to the offending party to advise them, but nothing else. It really makes the place so ugly, but I think it’s a Malaysian thing.”

Real estate agency principal Firdaus Musa of Firdaus & Associates Property Professionals Sdn Bhd agrees. “It may be unsightly but being Malaysian, we tend to take a tidak apa attitude.” Firdaus says he has never encountered any clients who are perturbed by the laundry practices of their would-be neighbours, but then again “…the better condos have laundry facilities and most residents there don’t do their own laundry but will send out their laundry. The only problem is basically in the low- to medium-cost apartments, but then, the problem does not affect property values”.

He adds that it is common to see laundry in the form of large comforters, bedsheets and blankets, even underwear flapping over the balcony railings. “Buyers of high-end units might have a word or two to say about this but most usually just shrug off the issue. Their main concerns are the facilities, location, security and, for some, they want developments that are peaceful and quiet.”

Eddie Low, manager of Jurukor Hartanah, which oversees the Desa View condos in Taman Melawati, tells theSun that it’s a big problem there. “I think it’s because this has already become a habit,” he says. “Yes, some say installing dryers will help solve this but you have to ask, what kind of dryers? In Europe, it’s cheap to operate their huge dryers. Here, most people feel that since they are drying clothes in their own units, what’s the problem?”

Free sunshine

It’s not fair to fault the developers or property managers, says assistant general manager Raymond Ng. Ng works for Saujana Triangle Sdn Bhd, a member of MK Land group of companies that develops and maintains the condos in Damansara Perdana. “It’s the residents themselves who must shoulder the blame.”

He goes on to explain that when building plans are submitted to the local authorities, the developer must indicate a space dedicated to a laundry room. “This is not a new thing, it’s been around for years!” The laundry room can either be run by a business operator, or the residents can use it on a pay-per-use basis. The problem is that the majority of residents do not want to use such services. “Their perception is, since the sun is free, why should I pay for laundry services?” explains Ng.

He also thinks it’s inappropriate for real estate agents and property managers to put the blame on developers. “They don’t know what they are talking about.” he exclaims. “How do you explain some owners extending their kitchen area all the way to the yard for extra space?”

Ng says that the condos in Damansara Perdana have a dry yard for residents to hang their laundry. He agrees that hanging clothes out to dry does affect the property value, especially when hung out like flags. So, why doesn’t MK Land counter the problem by outfitting their condos with dryers? Ng has his own theory why this would not work. “First, the sun is free. Why would anyone add to his or her electricity bills? I think it’s a culture issue too. The aroma of ‘sun-dried’ laundry is different…” Ng feels that for expensive branded clothes that risk fading under the sun’s rays, residents would hand wash and let it drip dry rather than use a dryer.

Eyesore

Does the practice of drying clothes on the balcony affect values of the property? Most definitely, YTL Land & Development Bhd project manager Kon Chee Onn says. “The facade of the building is the first area potential purchasers will see before deciding whether to purchase a unit in the development. The first impression is enough to gauge what kind of residents make up the neighbourhood – whether they are house-proud or not. Just take a look around the many high-rise residential blocks. Some places have clothes hung everywhere, and this can turn out to be an eyesore.

According to Kon, the reality is that condo living is a rather new concept to most Malaysians. “We are still not mature yet to live under one roof.” Kon says people need to be educated about the values of community living, which include plenty of endurance, tolerance and consideration.

Kon cites an example from across the border. “Singaporeans also started their apartment living [in Housing Development Board fl ats] by hanging clothes out with bamboo poles. Today, they have stopped the practice and invented gadgets to hang wet clothes, which do not affect the building facade.”

What else can be done? Kon offers: “Personally, I would like developers to strike a deal with their in-house laundrette operator to lower the charges and in return, compensate the operator with a lower rental. I am sure more people can afford to use the launderette service if a fair deal is struck and thus help solve the problem of hanging clothes indiscriminately.”

Design issues

Condominium projects by YTL Land & Development Bhd include a drying yard or utility area, its project manager Kon Chee Onn explains. “The yard area has always been designed at corners which will not affect the facade of the building, that is, tucked in from the main external wall but able to receive indirect sunlight or wind for drying clothes.”

But, he adds, it is difficult to convince condo purchasers that the yard is meant to be a drying area. “It’s because of our Asian lifestyle and upbringing, I suppose.” How? “Firstly, we are used to having a wet kitchen in landed properties where most cooking is done, especially heavy Asian-style cooking. In the past, we didn’t have to rely on cooker hoods to ventilate the smoke and smell as there was natural ventilation. When people move into condos, most convert the ‘drying area’ into a wet kitchen.”

Kon says this is done mainly for practical reasons. Since the yard is separated from the inner sections of the condo, and it tends to be windy on higher floors, it’s practical for residents to cook in the yard to keep the smell from permeating into the apartment.

“Secondly, Asians always want our clothes to dry in direct sunlight, so that they will have a fresh smell. As the drying yard does not normally face the sun directly, condo residents tend to dry their clothes on windows or the balcony, which enjoy direct sunlight.” Plus, he says, the yard is usually too small to be used as a drying area, being about only 60 sq ft in size.

For medium- and low-to-medium cost apartments, a lot of clothes can be seen hung out to dry, says Mohd Wazir Haji Abul Ghani, press officer for Perbadanan Kemajuan Negeri Selangor. “In our earlier developments around Pantai and Kerinchi areas, the residents would install wire structures in front of the corridor and use that to dry their clothes. In our newer projects, we have designed the layout of each apartment to feature a small yard that residents can use for the same purpose, so the place looks better.”

Real estate agency principal Firdaus Musa of Firdaus & Associates Property Professionals Sdn Bhd agrees. He says most developers have now designated a semi-open or yard area for drying laundry. “A good design of a yard can be seen as being tucked in a corner so as not to be too obvious from the outside. This means the view may not be unsightly.”

Eddie Low, manager of Jurukor Hartanah, which overseas the Desa View condos in Taman Melawati, says in the past, apartments and condos were built without yards, so it was common to do your drying in the balcony. Now, it exists in most developments and even local authorities try to ensure that the structures are aesthetically pleasing.

Another property manager, who declined to be identified, had this analogy to offer: “The space to do laundry is like a parking lot. If there’s a legal parking lot, people will use it. Otherwise, they’ll simply park anywhere. Same when it comes to finding space to dry clothes. If there is no suitable area, the residents will find the best way to solve their problem. That’s why, it’s important for developers and architects to plan a proper place for residents to dry their clothes. Without this, the condo facade will look bad.”

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Many Singaporeans like visiting showflats. In many instances, the real genuine savvy buyers whom I do know purchase new properties without visiting the showflats. In actual fact, they told me that they do not want the showflat to sway their property judgement. Rather they rely on the type of developer, location and collaterals to get the feel of the project. More importantly, they study the layout plan in detail to make a judgement if the space is efficient and user friendly.

Of course, most of us would still visit showflat to check out the development’s offer in terms of exact location and spatial arrangement. There are some things that you must take note in patronising a showflat:

• No doors installed in the showflat: You will realise that almost all showflats will come without doors, as to facilitate the flow when the buyers visiting the space. Therefore the seamless and smooth feel you get from the showflat is much amplified  in comparison to a typical unit. In a way, it also makes the space appear bigger and less cluttered.
• No sliding doors between living and balcony: If the unit comes with a balcony, you will find a marker indicating the threshold between the 2 spaces of living and balcony . In reality, you should be seeing 3 or more panels of sliding glazing doors with bulky sliding tracks. In addition most showflats do not express floor drop between the spaces to prevent people tripping. As a result, the illusion of living and balcony as one big space gives you the bigger than normal feel. I have even seen one showflat with a sofa with its rugs at living being extended to balcony, making it appear as a single space. It is simply misleading and misrepresenting. Just imagine: how a sofa is able to extend over to balcony with sliding door frame and floor drop in the way. However you are just able to do it in showflat with many details being masked.
• Yard area: A showflat is always beautiful and neat. However the reality and practicality is still critical in a home buying. One of the check list you must have is to go for a naturally ventilated yard. With most of units becoming smaller in view of market affordability, you might want to take note that yard is still a necessity for clothes drying. Though there are many powerful dryers in the market, people tend to prefer sun dried clothes than tumbled dry method. You do not want to end up drying your clothes at the balcony, right?

There are many worth-noting pointers are highlighted in the article below. Do read them before you pay a visit to your showflat trip this weekendJ

Showflats & their telling displays

Fri, Jun 18, 2010
The Straits Times

Visiting showflats on weekends is very much a Singaporean pastime. Many who throng the showflats are not buyers, but browsers with noisy families in tow.

But for those who are thinking of putting down some hard-earned cash for a brand new home, this seemingly leisurely activity is actually the homework they should do carefully before they commit themselves to a purchase.

They should scrutinise every nook and corner in the showflat and be clear that they may not get all that they see.

Showflats, after all, are done up by interior designers engaged by the developers to make them look as attractive or as spacious as possible.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak advises potential buyers to take note of ‘optical illusions’ employed to make the units look bigger.

For instance, glass partitions are often used instead of walls to separate the bedrooms from the living area. This gives the illusion of more space than there actually is.

Glass partitions are also thinner than actual walls, and thus take up less space.

A buyer can always do the same for his own unit, but may then have to compromise on privacy.

It is common for developers to remove the non-structural wall of the bedroom nearer the living area to make the unit look bigger and allow more space for visitors, said EL Development managing director Lim Yew Soon.

‘In such instances, buyers should ask whether the wall can actually be removed,’ he said.

‘Another question they should ask is whether all the appliances – for instance, the non-standard ones like dishwashers and washing machines – are provided or are there for interior design purposes.’

Wall mirrors are also often employed to give the living area the illusion of spaciousness, experts say.

‘The buyer can also use a wall mirror in his own home, but the key is where is the best place to put it. And that depends on the individual unit,’ said Mr William Ong, executive chairman of Axis ID.

‘Showflats do give you an indication of what you can put into the unit.

‘When you do up your own unit, you have to first think about how much furniture you need and how much storage you need.’

Where furniture is concerned, the key is in having it in the right scale, said Mr Ong.

Another expert, who declined to be named, warns that some small projects may use very small customised furniture. For instance, a supposed double bed in a bedroom may be much smaller than an actual double bed.

When checking out the bedrooms, Mr Mak says, potential buyers should ignore the furnishings and try to imagine if they can comfortably fit in a normal- size single or queen-size bed, a desk and a wardrobe.

Also, experts say buyers have to consider how efficient the layout is. A square or rectangular- shaped room is always easier to manage.

For odd-shaped apartments, it may be a good idea to engage an interior designer who can help to maximise space.

‘The smaller the apartment, the more you need expert help to help you maximise space,’ said Mr Ong.

Some home hunters have complained about having to pay for bay windows and planter boxes when they have no use for them.

For instance, the actual living space in a 1,200 sq ft unit that includes bay windows and planter boxes is much smaller than 1,200 sq ft.

But, under a new government ruling from January last year, developers – although they can still build bay windows and planter boxes – no longer have the incentive to do so because they will have to pay for the space for these features. Previously, they did not have to.

One good thing about showflats is that they are chockful of design ideas.

And as Mr Ong said: ‘Whatever developers show in the showflat is usually achievable. The ideas are there to make the space look bigger but they are doable ideas.’

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