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The Real Deals (17-05-2012)

The Real Deals (17-05-2012)

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Published by: SG PropTalk on May 21, 2012
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SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
T
HE
 
R
EAL
 
D
EALS
 –
 
Ins
 
&
 
Outs
 
of 
 
Singapore
 
Real
 
Estate
 
Singapore
 
Co. Reg No: 198700034EMICA (P) : 099/03/2012
 
17 May 2012
Renewed interest in Farrer Road
The Urban Redevelopment Authority (URA) has accepted an application last Friday from a developer for aresidential site at Farrer Drive to be put up for sale by public tender. The land parcel, which was madeavailable through the Reserve List system on 16 Apr 2012, will be launched for sale by next week. Thetriggering bid came in at SGD88.9m, or SGD823 psf ppr. The 99-year leasehold site has a maximum GFA of 107,963 sq ft and is estimated to yield 100 dwelling units. Separately, a second site located at Farrer Roadwas placed under the Reserve List system in January this year. This plot of land is situated right next toLutheran Towers and Dukes Residence and can yield around 40 residential units.Farrer Road is known for the collective sales done in the area, largely due to its concentration of older freehold estates and attractive central location. The last successful en bloc deal was the sale of Farrer Courtin 2007; the site is now being developed into D’Leedon, which is expected to obtain its TemporaryOccupation Permit (TOP) in 2014. At the time, the sale of the 618-unit condominium made history when itwas bought for a record SGD1.34b with another SGD500m of differential premium. The buyers were aconsortium led by CapitaLand and comprising Hotel Properties Limited (HPL), a Morgan Stanley real estatefund and Wachovia Development Corp. Based on the site’s maximum GFA of 2.35m sq ft, the price workedout to around SGD783 psf ppr. The estimated breakeven and average selling price were SGD1,300 psf andSGD1,750 psf, respectively.However, not all en bloc sales have a happy ending. Tulip Garden, a 162-unit project, was on the brink of sale to a consortium led by Bravo Building Construction in 2007 when the buyers backed out after failing toraise adequate funds for the acquisition. The last asking price for Tulip Garden was lowered from SGD650min Jan 2011 to SGD600m in Jun 2011, translating to SGD1,118 psf ppr. This meant an estimated breakevenprice of SGD1,450 psf. The price difference between an en bloc sale and one under the Government LandSales (GLS) programme clearly indicates that private sellers are asking for unreachable prices, and this maypush developers to turn to the GLS to replenish their landbank.
Location of Farrer Drive site earmarked for sale by public tender
Source: onemap.sg 
D’LeedonGallop GablesSommerville GrandeurGallop GreenSpanish VillageThe LevelzThe WilshireFarrer Drive site
 
 
17 May 2012 Page 2 of 7
 
T
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EAL
 
D
EALS
Ins
 
&
 
Outs
 
of 
 
Singapore
 
Real
 
Estate
 
Supply of private residential units along Farrer Road/Farrer DriveProject Tenure Developer TOPNo.ofUnitsTransactionprice(SGD psf)Latestcontractdate
 
D’Leedon 99 Year CapitaLand (lead) 2015 1,715 1,780 10-Apr-2012Gallop Gables Freehold Stratis Dev/Atbara Holdings 1997 102 1,704 3-Apr-2012Sommerville Grandeur Freehold Sommerville Properties 1996 96 1,657 8-Aug-2011Sommerville Park Freehold Sommerville Properties 1985 456 1,591 11-Apr-2012Spanish Village Freehold Glory Realty 1987 226 1,571 4-Apr-2012Sutton Place Freehold Peak Properties 1989 44 1,549 14-Jun-2010The Levelz Freehold CapitaLand 2004 162 1,486 2-Apr-2012The Wilshire Freehold Sungtze Int’l 1984 20 769 13-Apr-2011Tulip Garden Freehold City Developments 1985 162 1,264 15-Mar-2012Waterfall Gardens Freehold MCL Land 2010 132 1,504 20-Apr-2012Total Units
3,115
Source: URA
Resale prices of projects in the Farrer Road/Farrer Drive vicinity have risen close to those of new sales in amove to block bidders trying to win a ticket to the en bloc arena. We would monitor the smaller projects withhigher plot ratios, such as Sommerville Grandeur, Sutton Place and The Wilshire, for more favourable enbloc opportunities.
Transaction prices of private residential units along Farrer Road/Farrer Drive
Source: URA
En bloc sale attempts along Farrer RoadDate ProjectAsking price(SGD m) BuyerGFA(sqft)Selling price(SGD psf ppr) Successful?
 
Jun-11 Tulip Garden 600 NA 557,400 1,118
 Jan-11 650 1,153 XJul-07 516 Bravo BuildingConstruction 1,018 XJul-08 Gallop Gables Gallop Green (partial)162 NA108,170 964-996 XOct-07 Spanish Village 878 NA 331,457 1,700 XFeb-06 Waterfall Gardens &2 adjoining sites132 MCL Land160,932 550
  Apr-07 Farrer Court 1.43 CapitaLand 838,488 850
 Feb-07 Leedon Heights 835 GuocoLand 835,716 1,062
 
Source: propertyguru.com.sg 
6008001,0001,2001,4001,6001,800Jul-09 Oct-09 Jan-10 May-10 Aug-10 Nov-10 Feb-11 Jun-11 Sep-11 Dec-11 Apr-12
WaterfallGardensTulip GardensThe WilshireThe LevelzSutton PlaceSpanish VillageSommerville ParkSommervilleGrandeur Gallop Gables
Farrer Road/Farrer Drive
 
 
 
17 May 2012 Page 3 of 7
 
T
HE
 
R
EAL
 
D
EALS
Ins
 
&
 
Outs
 
of 
 
Singapore
 
Real
 
Estate
M
ARKET
S
NAPSHOT
 
17 May 2012
 Analyst: Alison FOK 65-6433 5745 alisonfok@kimeng.com
 
Recent resale transactions
ProjectSize(sq ft)Price($psf)Contractmonth
WATERFALLGARDENS 2,196 1,650 Apr-12SOMMERVILLE PARK 1,948 1,591 Apr-12SPANISH VILLAGE 1,604 1,571 Apr-12GALLOP GABLES 3,111 1,704 Apr-12THE LEVELZ 807 1,486 Apr-12SOMMERVILLE PARK 1,948 1,540 Mar-12SOMMERVILLE PARK 1,302 1,605 Mar-12SOMMERVILLE PARK 1,948 1,488 Mar-12TULIP GARDEN 1,701 1,264 Mar-12SOMMERVILLE PARK 624 1,663 Mar-12THE LEVELZ 1,001 1,498 Feb-12THE LEVELZ 786 1,553 Feb-12THE LEVELZ 786 1,502 Dec-11SOMMERVILLE PARK 1,948 1,636 Dec-11THE LEVELZ 743 1,586 Nov-11THE LEVELZ 786 1,565 Nov-11SOMMERVILLE PARK 1,302 1,420 Oct-11SOMMERVILLE PARK 624 1,490 Sep-11THE LEVELZ 797 1,538 Aug-11SOMMERVILLEGRANDEUR 1,841 1,657 Aug-11SOMMERVILLE PARK 1,302 1,559 Aug-11WATERFALLGARDENS 2,583 1,529 Jul-11GALLOP GABLES 2,669 1,600 Jul-11WATERFALLGARDENS 1,830 1,639 Jul-11GALLOP GABLES 1,163 1,581 Jun-11THE LEVELZ 797 1,550 Jun-11SOMMERVILLEGRANDEUR 1,830 1,667 Jun-11SOMMERVILLE PARK 1,302 1,574 Jun-11THE LEVELZ 807 1,486 Jun-11WATERFALLGARDENS 2,196 1,750 Jun-11WATERFALLGARDENS 1,830 1,620 Jun-11
Source: URA
Property Stocks
Company Price RNAVDisctoRNAVNAV/shareDisc/Prem toNAV
CapitaLand 2.6 5.03 -48% 3.51 -26%City Dev 10.19 12.62 -19% 7.66 33%Guocoland 1.615 NA NA 2.15 -25%Ho Bee 1.17 3.18 -63% 2.34 -50%Keppel land 2.89 5.77 -50% 3.81 -24%OUE 2.04 NA NA 3.53 -42%SC Global 0.965 3.49 -72% 1.56 -38%Singapore Land 5.61 9.71 -42% 11.78 -52%UIC 2.5 NA NA 3.16 -21%UOL 4.34 NA NA 6.49 -33%Wheelock 1.67 NA NA 2.35 -29%Wing Tai 1.3 2.81 -54% 2.51 -48%
N.A. = No Coverage *As at latest reported 
Property Price Indices
 
Index Level Change
SRPI Overall (Mar 12) 165.4 +0.8%URA PPI (1Q12) 206.0 -0.1%HDB Resale (1Q12) 191.0 +0.6%
Government Land Sales (GLS)
Recently Awarded Sites
SiteSitearea(k sqm) Units Awarded toLandprice(S$m)$psfppr
Kovan Road / SimonRoad35.7 360Hoi Hupconsortium195 507Jervois Road 12.5 140 Singapore Land 119 881Bedok South Avenue 360.2 595Far East/Frasers/Sekisui House346 534Hillview Avenue 35.4 370KingsfordDevelopment243 638Up Serangoon View/Up Serangoon Rd
(EC)
 43.4 435Ho Lee GroupPte & Evia RealEstate142 303Punggol Central/Edgefield
(EC)
13.2 395Qingjian Realty(South Pacific)137 320Fernvale Lane
(EC)
22.0 770 Peak Living Pte 245 296Elias Rd/ Pasir RisDr 332.7 295ElitistDevelopment166 461Woodlands Ave 5/Woodlands Dr 16
(EC)
25.8 720Hao YuanInvestment247 318Tampines Central 7/Tampines Ave 7/Tampines Av 9
(EC)
 20.8 580Singxpress,Creative Inv,Kay Lim234 374
Confirmed List
Site
Site area(k sqm) UnitsTenderclosing
Tampines Avenue 10 (Parcel A) 56.2 600 17-MayBoon Lay Way (Jurong Gateway) 48.7 590 29-MaySengkang Square/ CompassvaleDrive60.7 710 31-MayPasir Ris Dr 3 22.3 670 5-JuneBuangkok Drive/ Sengkang Central 18.3 620 12-June
Reserve List (Recently Open for Tender)
Site area (k sqm)
Units
 
Farrer Drive** 10.0 100Jalan Jurong Kechil 14.2 240Stirling Road 88.6 1045Tampines Av 10 (Parcel B) 47.9 515Farrer Rd 2.7 40 Alexandra View 41.2 455Punggol Way/ Punggol Walk (EC) 18.7 560Bishan Street 14 11.2 590
Source: HDB, URA
 
**Accepted application on 11 May, site to be launched in two weeks’ time.

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