Issue 24

Copyright 2011 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2
p5
Singapore Property News This Week
Are Shoebox Residential Units Profitable Investments?

FROM THE

EDITOR

Welcome to the 24th edition of the Singapore Property Weekly. Hope you like it! Mr. Propwise

p10 Resale Property Transactions (October 15 21 ) p12 Singapore Property Classifieds #14

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SINGAPORE PROPERTY WEEKLY Issue 24

Singapore Property This Week

Residential
Laguna Park and Henry Park up for sale
The reserve price of 677,493 sq ft Leasehold Laguna Park located along Marine Parade Road is $1.25 billion, about $954 psf ppr including a differential premium of about $560 million. Zoned for residential use at a plot ratio of 2.8, it has a 1.9 million sq ft potential gross floor area and is located near renowned schools like Tao Nan School and the upcoming Eastern Region Line expected to be completed by 2020. Breakeven cost is estimated at $1,400 psf. 64-unit Henry Park Apartments located directly opposite Henry Park Primary School sits on a 999-year-leasehold site with a land area of 99,800 sq ft. It is zoned residential with commercial at first storey, with a gross plot ratio (GPR) of 1.4, and a maximum building height of four storeys, allowing for almost 140,000 sq ft of gross floor area if redeveloped. A 1,395 sq ft state land lot could potentially be amalgamated, subject to approval and survey. The asking price is between $170 million to $180 million, about $1,200 to $1,275 psf ppr with the state land and $1,216 to $1,287 psf ppr without. Freehold Green Lodge at Toh Tuck Road, 71 and 73 Oxley Rise up for sale 151,075 sq ft freehold Green Lodge located near Toh Tuck Garden and Eng Kong Park and Pei Hwa Presbyterian Primary School is asking for $195 million, or about $866 psf ppr.

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SINGAPORE PROPERTY WEEKLY Issue 24 It has a redevelopment potential of a fivestorey condominium project with a 1.4 gross plot ratio. No development charge is payable with its approved density of equivalent plot ratio 1.4896. There could be potentially 210 residential units, assuming a 1,000 sq ft average apartment size and 90% building efficiency. of 654,103.9 sq ft comes from Chinese firm Qingjian Realty (South Pacific) Group, at $215.87 million or $330 psf ppr, narrowly topping the $203.888 million bid from Soilbuild Group Holdings. The company planned to launch the project within six to eight months with around 650 units of two to four bedrooms. The breakeven cost is estimated to be $700 psf. Commercial NTUC Income and Overseas Motors sold Freehold Henderson Industrial Building for $99.3 million

Meanwhile, an Expression of Interest exercise is conducted for the site at 71 and 72 Oxley Rise. The 25,630 sq ft site located in District 9 has a gross plot ratio of 4.2 and could potentially be redeveloped into a 107,646 sq ft mixed 20-80 commercial-residential project, subject to approval from the authorities.
Top bid for 99-year-leasehold residential site at Punggol at $215.87 million The highest bid for the 218,034.6 sq ft site with a maximum permissible gross floor area
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NTUC Income and Overseas Motors sold the four-storey sold Henderson Industrial Building located at the Henderson Road-Jalan Bukit Merah junction to an entity that includes Fission Group's Melvin Poh, Yi Kai Group and other parties for about $99.3 million.
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SINGAPORE PROPERTY WEEKLY Issue 24 It is currently 75% occupied and is sold with existing leases that will expire by 2013. Zoned for Business 1 use with a 2.5 plot ratio, URA had given the go for redevelopment into a 20-storey light industrial project, with a maximum gross floor area of 208,635 sq ft. This new project could yield a net saleable area of about 177,340 sq ft, with strata units of around 1,200-1,500 sq ft for sale. The breakeven cost is estimated to be around $880 psf. New mixed-used released site at Marina Bay uses such as residential, retail or hotel. The site is expected to be sold only next year given the cautious outlook on the office rental market. Mountbatten Road transitional office site draws 11 bids, with a $15.01 million top bid There were 11 bidders for 1.17 hectares 15year lease transitional site at Mountbatten Road, with the highest from an individual, Chen Chew Yen, who offered $15.01 million or $119 per psf ppr. The site which has a maximum permissible gross floor area of about 126,000 sq ft might be popular with office users with lower budgets. These users may currently be illegally operating in industrial buildings. Affordable office space would attract such users wants operate without fearing enforcement checks.
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The site located at the corner of Marina View is offered under the reserve list and has a maximum permissible gross floor area (GFA) of 1.09 million sqf, 70% of which has to be set aside for office use with the remaining to be developed for additional office use or other

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SINGAPORE PROPERTY WEEKLY Issue 24

Are Shoebox Residential Units Profitable Investments?

By Mr. Propwise
Shoebox apartments (aka mickey mouse apartments) have become increasingly popular in recent years, with caveats lodged rising from fewer than 30 in 2004 to more than 1,900 units in 2010. They are becoming a more prominent feature in our private housing landscape they made up just 6% of new private home sales in 2008, but that figure has doubled to 12% in 2010.

While there is no industry accepted standard definition of what constitutes a shoebox unit, Minister Khaw Boon Wan has categorized them on his blog as apartments that were smaller than 500 square feet.

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SINGAPORE PROPERTY WEEKLY Issue 24

The natural choice for budding investors? Due to their lower total costs (usually less

has indeed crossed my mind (and that of other investors I know as well). But Ive always held back because of the high per square foot prices, which instinctively tell me that Im not getting a great deal. Can shoebox units be good investments? So it was with great interest that I read a new

than $1m per unit), they have become the

vehicle of choice for budding investors who only have a moderate amount of cash to put to work, while promising decent potential rental yields of 3% to 5%. For example, a

$500,000 unit (400 square feet at $1,250 per

square foot) would only require $100,000 (if taking an 80% loan) to $200,000 (if taking a 60% loan) of cash plus CPF to buy. And if you assume that you can rent it out at $1,500 per

report released by local property consultancy

firm Ascendant Assets. The report, which was recently covered by The Straits Times and believed to be the first in-depth study of this phenomenon, does a detailed analysis of 3,780 shoebox unit caveats lodged with the URA from 1998 to 2010 of to reveal the trends in the market and the profitability of shoebox unit transactions.

month, then youre looking at a gross rental

yield of 3.6%. Based on the calculations above, it sounds like shoebox units are potentially decent investors, and the thought of picking up a unit

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SINGAPORE PROPERTY WEEKLY Issue 24

One finding was that based on the transactions of these units so far, sub-sales (before the CSC was received) and re-sales have generally been profitable, with an average profit of $106,426 and only 4.4% of owners selling at a loss. The maximum gain recorded was $332,000. However, there were a significantly higher percentage of profitable sub-sale deals compared to resale deals. Could this be because it is easier to sell these units off the plan as opposed to live as the buyers will then see how small these units actually are in reality? I believe that this trend of the majority of subsale and re-sale transactions of shoebox units might not continue going forward given:

1. Property prices may not keep going up as they have in the past two years

2. The total number of completed units will increase from 1,100 to 3,800 by 2014, creating more supply in the market (and competition for buyers).
3. The harsh Sellers Stamp Duty imposed by the government at the beginning of 2011 makes it unprofitable to flip the unit as a subsale transaction, increasing the risks of being stuck with a unit that might be difficult to rent or sell upon completion.

Perhaps the real winners from the growing trend of shoebox units are the developers, who are able to bump up their per square foot prices (and margins) by shrinking the size of the units.

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SINGAPORE PROPERTY WEEKLY Issue 24

Indeed the Ascendant Assets report found that only shoebox units sold by developers

were able to get top absolute and per square

foot prices. So be careful if youre considering investing in such a unit!

The report covers several more interesting

findings with lots of graphs and figures, including the psychological price ceiling for sub-sale/re-sale shoebox units, profitable locations of investing in shoebox units etc.,

and is recommended for anyone interested in

investing in this segment. Ascendant Assets has kindly made it available for sale for a modest price on this site. Click here to buy it.

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SINGAPORE PROPERTY WEEKLY Issue 24

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SINGAPORE PROPERTY WEEKLY Issue 24

Non-Landed Residential Resale Property Transactions for the Week of Oct 15 - 21

Postal District 1 3 3 4 5 5 5 5 5 5 7 7 8 8 8 8 9 9 9 9 10 10 10 10 10 Project Name THE SAIL @ MARINA BAY TANGLIN VIEW QUEENS CARIBBEAN AT KEPPEL BAY HERITAGE VIEW CLEMENTIWOODS CONDOMINIUM BLUE HORIZON WESTCOVE CONDOMINIUM FABER CREST WEST BAY CONDOMINIUM MIN YUAN SUNSHINE PLAZA CITY SQUARE RESIDENCES CITYLIGHTS CITY SQUARE RESIDENCES KERRISDALE PATERSON RESIDENCE THE COSMOPOLITAN ASPEN HEIGHTS LA CRYSTAL GRANGE RESIDENCES GRANGE RESIDENCES ARDMORE II THE LADYHILL THE EQUATORIAL Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,076 1,888,888 1,755 99 1,755 2,200,000 1,254 99 2,336 2,000,000 856 99 893 1,480,000 1,657 99 1,195 1,335,000 1,117 99 1,819 1,988,000 1,093 99 1,163 1,100,000 946 99 1,130 910,000 805 99 1,389 1,100,000 792 99 1,292 955,000 739 99 1,453 2,050,000 1,411 999 1,130 1,400,000 1,239 99 570 980,000 1,718 FH 872 1,430,000 1,640 99 1,216 1,788,000 1,470 FH 1,270 1,320,000 1,039 99 1,313 3,050,000 2,323 FH 1,141 2,282,000 2,000 FH 1,324 1,980,000 1,495 999 1,249 1,848,520 1,480 FH 2,852 8,100,000 2,840 FH 2,583 7,000,000 2,710 FH 2,024 5,350,000 2,644 FH 3,810 8,600,000 2,257 FH 1,722 2,955,000 1,716 FH Postal District 10 10 10 10 10 11 11 11 12 12 12 12 12 14 14 14 15 15 15 15 15 15 15 15 15 Project Name JAYA TOWERS GLENTREES CHATELET DUCHESS CREST LUTHERAN TOWERS TEN @ SUFFOLK NINETEEN SHELFORD ROAD HILLCREST ARCADIA ECOVILLE THE ARTE THE CALLISTA OLEANDER TOWERS MOONSTONE VIEW DAKOTA RESIDENCES EVER LODGE FERN LODGE ARTHUR 118 OCEAN PARK VERTIS ONE FORT COTE D'AZUR SUNSHINE REGENCY PALM OASIS TANJONG RIA CONDOMINIUM TG MANSION Area Transacted Price Tenure (sqft) Price ($) ($ psf) 2,142 2,880,000 1,345 FH 1,345 1,800,000 1,338 999 1,507 1,980,000 1,314 FH 1,345 1,660,000 1,234 99 1,916 1,458,000 761 103 1,184 1,600,000 1,351 FH 936 1,255,500 1,341 FH 926 860,000 929 99 1,184 1,370,000 1,157 FH 1,625 1,800,000 1,107 FH 592 630,000 1,064 999 1,152 978,000 849 99 1,184 900,000 760 FH 1,894 2,550,000 1,346 99 1,378 1,000,000 726 FH 1,023 712,000 696 FH 1,001 1,330,000 1,329 FH 1,302 1,632,500 1,253 FH 1,206 1,500,000 1,244 FH 1,206 1,485,000 1,232 FH 1,109 1,340,000 1,209 99 603 713,000 1,183 FH 753 868,000 1,152 FH 1,378 1,575,000 1,143 99 1,270 1,000,000 787 FH

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SINGAPORE PROPERTY WEEKLY Issue 24

Postal District 15 15 16 16 16 16 16 16 16 16 17 17 17 17 17 18 18 18 18 19 19 19 19 19 19 19 19 19 20 Project Name CANDEVILLE THE GLACIER COSTA DEL SOL COUNTRY PARK CONDOMINIUM CASA MERAH CASAFINA EAST MEADOWS CHANGI COURT THE BAYSHORE EASTWOOD GREEN FERRARIA PARK CONDOMINIUM EDELWEISS PARK CONDOMINIUM LOYANG VALLEY LOYANG VALLEY LOYANG VALLEY EASTPOINT GREEN MELVILLE PARK TAMPINES COURT TAMPINES COURT KOVAN MELODY THE SPRINGBLOOM CHILTERN PARK KENSINGTON PARK CONDOMINIUM CHILTERN PARK SUN ROSIER COMPASS HEIGHTS RIO VISTA CHUAN PARK GOLDENHILL PARK CONDOMINIUM Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,851 1,350,000 729 FH 2,164 1,450,000 670 FH 1,561 2,080,000 1,333 99 1,098 1,210,000 1,102 FH 926 945,000 1,021 99 1,281 1,190,000 929 99 1,216 1,126,000 926 99 1,163 1,060,000 912 FH 926 825,000 891 99 1,012 780,000 771 99 1,087 1,165,000 1,072 FH 1,281 990,000 773 FH 1,033 742,000 718 99 1,873 1,190,000 635 99 1,862 1,058,000 568 99 969 785,000 810 99 1,044 830,000 795 99 1,690 960,000 568 101 1,658 935,000 564 101 904 1,010,000 1,117 99 1,432 1,380,000 964 99 936 900,000 961 99 1,582 1,450,000 916 999 1,518 1,330,000 876 99 1,593 1,330,000 835 FH 1,550 1,220,000 787 99 1,249 970,000 777 99 1,410 1,080,000 766 99 1,561 1,888,000 1,210 FH
Postal District 20 20 20 20 20 20 21 21 21 22 23 23 23 23 23 23 23 23 23 25 26 27 27 28 Project Name GOLDENHILL PARK CONDOMINIUM RAFFLESIA CONDOMINIUM CLOVER BY THE PARK GRANDEUR 8 THE GARDENS AT BISHAN THE WINDSOR GARDENVISTA SIGNATURE PARK PARC PALAIS LAKEPOINT CONDOMINIUM CASHEW HEIGHTS CONDOMINIUM MAYSPRINGS PARKVIEW APARTMENTS REGENT HEIGHTS CASHEW PARK CONDOMINIUM CASHEW PARK CONDOMINIUM PALM GARDENS PARKVIEW APARTMENTS NORTHVALE THE WOODGROVE BULLION PARK YISHUN SAPPHIRE YISHUN EMERALD SERENITY PARK Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,313 1,580,000 1,203 FH 1,324 1,528,000 1,154 99 1,604 1,775,000 1,107 99 1,259 1,280,000 1,016 99 883 850,000 963 99 2,164 1,760,000 813 FH 1,130 1,388,000 1,228 99 1,055 1,110,000 1,052 FH 1,582 1,495,000 945 FH 1,001 750,000 749 99 1,851 2,000,000 1,080 999 915 755,000 825 99 936 758,000 809 99 1,023 825,888 808 99 517 405,000 784 999 506 395,000 781 999 1,216 900,000 740 99 1,119 800,000 715 99 1,087 760,000 699 99 872 671,000 770 99 1,873 1,620,000 865 FH 1,152 805,000 699 99 1,206 828,000 687 99 1,098 900,000 820 FH

NOTE: This data only covers non-landed residential resale property transactions with caveats lodged with the Singapore Land Authority. Typically, caveats are lodged at least 2-3 weeks after a purchaser signs an OTP, hence the lagged nature of the data. Page | 11

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SINGAPORE PROPERTY WEEKLY Issue 24

Singapore Property Classifieds #14

For Sale 5I HDB, Blk 671 woodlands, 111sqm, high floor, move in cond. valuation $435k, view to offer, mrt/amenities. Ibrahim Dawood 93360375

HDB BLK 112 SIMEI (5I), 122sqm, 7 min to MRT, #02 Nicely Renovated Corner. Val $520k. Main Door Face North East. Call Nelson Lim 83680693

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