Tag Archives: MCL Land

Who has been shopping for government land sales sites?

Posted on 11 Jun 2011 | Comments Off on Who has been shopping for government land sales sites?

In 1H2011, the Ministry of National Development (MND) has announced a strong supply of private housing for sale to meet demand. 17 sites were placed on the confirmed list which can yield about some 8,100 residential units. The reserved list had 13 sites which can yield some 6,200 residential units. The supply of land includes private properties, executive condominiums and DBSS properties.

Moving forward, MND is slated to announce the 2H2011 Government Land Sales (GLS) programme. We expect a significant supply of private housing (including sites for Executive Condominiums & DBSS) to address the strong demand.

In addition, a review of the HDB income ceiling is expected to be completed within six months which may impact the demand for private homes, especially in the mass-market segment.

This paper examines the profile of buyers of GLS sites (by tender) since 2010 to 1H2011 in terms of the amount of housing stock that each is holding and the amount of exposure to each housing type.

Amount of GLS housing stock under each developer

To ascertain the housing stock under each developer, a review of all the winning tenderers for GLS sites launched from 2010 to 1H2011 was made. Notably, some of these GLS sites had been launched by the developers for sale.

Henceforth, three factors were considered to arrive at the numbers. Firstly, the number of units in each project as announced by the developer. Secondly, the number of units unsold by the developers based on URA data release[1]. Thirdly, for sites where project details are not announced or finalised, the estimated number of units by the authorities in the land sales package are used.

For sites where joint ventures are undertaken, an even apportionment method is used. For example, if there are 2 parties in a winning tender, it is assumed that the available unsold supply in that project will be evenly split between the two. The same applies for three to four parties in a joint tender. Whilst the apportionment may be different in the actual situation, it is difficult to ascertain the actual interest in the project due to confidentiality issues in some instances.

Chart 1 depicts the top 10 developers based on the estimated housing stock from the GLS sites acquired[2] where the bulk of its stock are ECs (situated at Segar Road (estimated 570 units) and Choa Chu Kang Drive (estimated 490 units)).. Sim Lian Group Limited tops the chart with the highest available housing supply. The Group also has the highest exposure to mass market private homes. City Development is second in term of overall residential supply

Chart 1: Top 10 Developers’ GLS Housing Stock by Property Type

Amount of GLS Land Capital Exposure under each developer
In addition to the estimated housing stock, a rudimentary review is also undertaken for developers based on the potential capital exposure for the land. In this instance, the capital exposure is based on the quantum of the awarded land tender price[3].

A simplistic approach is adopted for this analysis where the land capital exposure is proportionately reduced when the project is launched and sold progressively. The study had not taken into consideration the circumstance where developers break even after achieving a certain sales target which effectively reduces or remove their risk exposure from the capital expended.

The level of debt taken is not considered as the internal leverage policies differ from developers to developers. Henceforth, the total capital exposure is based on the total tender price from the land awarded.

Similar to the earlier section, sites where joint ventures are undertaken, an even apportionment method is used. The amount of capital exposure will be shared among partners where joint ventures are concerned. The amount may differ from actual situation depending on the terms of agreement.

Chart 2 exhibits the top 10 developers with the greatest GLS residential exposure. Not surprising, Sim Lian Group tops the ranking attributed by the high capital exposure from the recent purchase of three condominium sites which collectively accounted for $825 million in land value. City Development fell to the fifth position as their EC sites had a smaller quantum as compared to some other condominium sites. CapitaLand leapfrogged from the ninth position to the third arising from the purchase of the GLS site at Bishan St 14 at $550.1 million.

Chart 2: Top 10 Developers’ GLS Housing Capital Exposure by Property Type

Outlook for mass market residential homes

Regulatory risks to tame the mass market residential market have increased following the post election government statements. If more cooling measures are implemented coupled with any changes to the current HDB income ceiling, demand for private homes, in particular the mass-market segment will be affected.

We expect a significant new supply of private housing for the 2H2011 GLS programme to meet demand. We may expect more new ECs sites to be released arising from the strong take-up for recent EC projects such as Esparina Residences, Prive and The Canopy.

Developers with sizeable mass market homes in their land bank are likely to be more selective. Some may choose to off load their existing land bank before acquiring new sites creating a window of opportunity for others.

In the absence of any new cooling measures, residential sales are expected to remain strong as developers are expected to launch new projects in the coming few months. In April, developers sold 1,788 residential units, the highest monthly volume since November 2010.

[1] Table 1 in appendix 1 depicts the list of GLS sites sold to developers, its subsequent project name, the number of units sold and the remaining stock.
[2] Actual Numbers and Further details in Appendix 2
[3] Actual Numbers and Further details in Appendix 3

Source: Knight Frank Research – 1 Jun 2011

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Keen interest in Cairnhill and Scotts Road projects

Posted on 30 May 2011 | Comments Off on Keen interest in Cairnhill and Scotts Road projects

Homes around Cairnhill and Scotts Roads are getting a buzz from new launches and the completion of condominiums in the neighbourhood. CapitaLand recently launched its boutique development, the 64-unit Urban Resort Condominium, and of 34 units launched, 21 had been sold as at end-April, with the latest median price achieved at $3,076 psf, according to the latest data by URA.

At the neighbouring The Laurels, Sing Holdings sold a unit at the 229-unit project for $2,947 psf last month.

Up on Cairnhill Rise, SC Global’s 240-unit upscale condo Hilltops and the neighbouring 140-unit Helios Residences by Wing Tai have obtained their temporary occupation permits (TOP) earlier this year. Along Cairnhill Road, KOP Properties is expected to complete its 56-unit boutique branded residences, Ritz-Carlton Residences by 2H2011. The most recent transaction here was in February, when the 6,501 sq ft triplex penthouse on the 36th level was sold for a whopping $28 million, or $4,307 psf.

Meanwhile, Cairnhill Mansions along Cairnhill Road was put up for en bloc sale last month at a reserve price of $361.5 million, or $2,308 psf ppr. Based on the price tag, the breakeven cost for the developer would be in the range of $3,000 to $3,100 psf, and that means the new development could sell at prices averaging $3,500 psf. The tender for the site, which closes at end-May, is handled by CB Richard Ellis.

Work is also underway at the show flat of Scotts Tower, a bespoke development by Far East Organization. The project, designed by award-winning Dutch architect Ben van Berkel of UNStudio, is located on Cairnhill Road, just off Scotts Road. The development could potentially be launched later this year.

With the spotlight in the Cairnhill-Scotts Road neighbourhood, it’s not surprising that some homebuyers are also turning to the existing condos there. One that has been receiving quite a lot of attention, resulting in a spike in the number of transactions last month, is the 136-unit Scotts 28 located along Scotts Road. The project was jointly developed by Hotel Properties Ltd and MCL Land, and completed in 1999. It was considered one of the most upscale developments in the area when launched, and coveted by the who’s who in Singapore. Scotts 28 has a mix of sizeable units, starting from two-bedroom to four-bedroom apartments, with sizes ranging from 1,098 to 3,606 sq ft. Penthouses are from 4,650 to 6,846 sq ft.

At the peak of the market in 2007, a 1,636 sq ft unit was sold for $3.93 million, or $2,400 psf. Prices this year are approaching that level, and hit a high of $2,250 psf last month when a 1,733 sq ft unit on the 13th floor was sold for $3.9 million. These days, owners of units at Scotts 28 are asking for prices of as high as $2,500 psf on the resale market, notes Arthur Tan, an agent with PropNex. “The sellers are basing their price tags on the recent transacted prices of condos in the area,” he says.

There were three transactions at Scotts 28 from April 26 to 29, with prices ranging from $1,991 to $2,222 psf. A 1,733 sq ft unit on the 15th floor was sold for $3.85 million ($2,222 psf) on April 27. This represents an 81% gain for the previous owner who purchased it at $2.125 million ($1,226 psf) in 2004. Before this, the unit changed hands at $2.2 million ($1,280 psf) in 1999 and $2.4 million ($1,393 psf) in 1995.

Another 1,733 sq ft unit on the 23rd floor was sold for $3.45 million ($1,991 psf). Before this, the unit changed hands at $2.78 million ($1,600 psf) in 1999 and $2.49 million ($1,437 psf) in 1995.On the 18th floor, a 1,636 sq ft unit was sold for $3.5 million ($2,139 psf), or a more than 51% premium over the last transacted price of $2.3 million ($1,408 psf) during the launch in 1995.

Source : The Edge

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