Issue 129

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CONTENTS
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Top 5 New Property Launch Gimmicks
Singapore Property News This Week Resale Property Transactions (October 23 – October 29)

FROM THE

EDITOR

Welcome to the 129th edition of the Singapore Property Weekly. Hope you like it!

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SINGAPORE PROPERTY WEEKLY Issue 129

Top 5 New Property Launch Gimmicks
By Property Soul (guest contributor) There are many tactics employed by property developers and their marketing agents during the launch of off-plan properties. In this article we’ll go through the five most common marketing gimmicks, namely: 1. Gather a crowd 2. Create urgency

3. Make some noise
4. Dangle the carrot 5. Promise a good return.

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SINGAPORE PROPERTY WEEKLY Issue 129 Gimmick 1: Gather a crowd When it comes to buying big ticket items like properties, no one wants to be a guinea pig. The traffic in the sales gallery is a thermometer to measure the popularity of a project. Seeing people turning up in droves can reassure potential buyers that they are most probably making the right choice. It is therefore the job of the marketing agent to ensure the following at the sales gallery, at least during the first weekend of a new launch: 1. Fill up the temporary carpark to make it look full 2. Draw a crowd of enthusiastic property agents waiting outside 3. Have a few groups of eager buyers occupying the discussion tables
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When a local developer launched a property in the east in mid-2011, instead of using the usual industry practice of balloting for the sequence to pick a flat, their marketing agent asked interested buyers to line up in front of the sales gallery. On the day before the actual launch, close to three hundred people joined the queue. There were students, retirees and property agents napping, snacking and playing cards in the queue to kill time. Such a scene made passers-by wonder whether the crowd really consisted of genuine buyers, or just parttimers being paid to fake how hot the new project was. By coincidence, it was the beginning of the school holidays in June. So was it the popularity of the project, or simply the attractiveness of the incentives?
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SINGAPORE PROPERTY WEEKLY Issue 129 Gimmick 2: Create urgency It is the marketing agent's job to constantly remind interested parties that units are selling fast, and that all units are going to be sold out soon. There is usually a huge banner hanging at a prominent place in front of the sales gallery that says '80 percent sold'. The headline in a local paper reads '70 percent sold on the first day'. However, some key information may be conveniently missing, including: 1. The planned number of phases for the project launch 2. How many units are actually released in each phase The full statement should probably be: 1. '80 percent of 50 units sold in phase one out of five phases'; and 2. '70 percent sold on first day after 60 percent of units already taken up by VIPs before launch' When customers ask about the next batch of units for launch, sales representatives may hint that subsequent phases will offer units with poorer view or lower quality finishings, despite the fact that they are sold at higher prices. Here is the truth: Developers tend to push the less desirable blocks or units to the market first. These units may present an average view, face the west sun or have an awkward layout. There is a philosophy behind this: If they can sell units which are most difficult to move,

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SINGAPORE PROPERTY WEEKLY Issue 129 the rest of the better units can definitely be sold, and at higher prices. The tactic is known as 'save the best for last'. Biggest discounts go to… the last few buyers You may be surprised to hear this. But the biggest discount is often not the one offered to the first batch of buyers, but the one given to the last few takers. The reasons are many: 1. The market situation may have changed 2. The developer may feel that they have made enough profit for the units sold advantage for the early birds who buy earlier than others. Besides gathering a crowd there and creating the urgency to buy, there are other marketing gimmicks you may find familiar at a new launch. Gimmick 3: Make some noise To draw the attention of potential buyers, media coverage is a better alternative than advertising. It sounds more convincing and also helps to save money. The public relations department of property developers knows when to feed the right stories to the journalists, for example a media report or a rumor that a celebrity, an investor or a government official just bought one unit at the sales gallery. People all want to be seen having the same foresight as the experts in property

3. The marketing agent may find it too much work to continue running the sales gallery
4. The last few units left may be the less desirable ones Sometimes
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there

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SINGAPORE PROPERTY WEEKLY Issue 129 investment or the big names in their own fields. Thus the release of these stories works to motivate other buyers to follow suit. In order to wow the readers, the media has a tendency to pick up only unusual cases. An amateur investor may have just bought a place at a ridiculously high price. Or one particular buyer has decided to buy a flat with a unique design, facing or location regardless of the asking price. An inevitable conclusion is that prices in the property market have just set new highs. The obvious connotation for potential buyers is to take action now before prices jump again. Gimmick 4: Dangle the carrot Goodies given away at the sales gallery are a catalyst to close deals. Be it fee absorption, furniture vouchers, furnishing packages, or branded appliances, they are attractive
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concessions in the eyes of potential buyers. Never mind the fact that such offers are just peanuts compared with the price of the property. Tempted buyers are often unaware that the value of these goodies can easily be offset by a slight drop in the property’s market value. It is therefore more practical to get an immediate discount off the list price. Ask the sales representative the estimated cost of that branded appliance or furnishing package, then request for a direct deduction from the unit’s asking price in lieu of the developer’s goodie. Some properties are sold with 'guaranteed rental return'. It is a scheme that promises owners a fixed percentage of the property’s price as rental income, regardless of the actual rental income, or whether the property is rented out in the first few years.
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SINGAPORE PROPERTY WEEKLY Issue 129 This tactic is usually deployed to move units in high-end condominiums. The rental income can be seen as a form of discount off the list price. 'Guaranteed rental return' is different from earning rental income from actual tenants over the years. Since the amount given has actually been factored into the price, one can also argue that buyers are actually paying for their guaranteed rental amount in advance. Strictly speaking, the party who benefits most from giving away the carrot is probably the developer itself. It is because these goodies are usually offered when the market starts to cool down so that developers are able to move properties off the shelves without lowering the price. Gimmick 5: Promise a good return Once the sales representatives know that you are buying the property for investment, they may claim that their units can be rented out at a certain market rate. There are two ways to check the validity: 1. Do your own research. Go to the Urban Redevelopment Authority website to check the latest published figures on ‘Rentals of Private Residential Properties’. Find a similar unit in a nearby project that is relatively new. Check the range of monthly rent to see whether the numbers given are too optimistic.

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SINGAPORE PROPERTY WEEKLY Issue 129 2. Do some mystery shopping. Respond to the rental listings of new projects in the same district to check the popularity of properties for rent there. The sales representative may claim that their units offer an attractive rental return of a certain percentage. It is not difficult to calculate the net monthly ROI (Return on Investment) on your own. ROI = (monthly rental - loan repayment – maintenance fee - property tax) x 12 ÷ initial investment Once I stepped into a sales gallery where the salesperson spoke confidently that their units offered a minimum of five percent rental return. But after I did my sums, the cash-oncash return was actually less than one percent. Next time before you walk into a sales gallery, remember to do your homework first. When it comes to property investment, ignorance can be very expensive. By Property Soul, a successful property investor and enthusiast who shares her experiences and knowledge on her blog.

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SINGAPORE PROPERTY WEEKLY Issue 129

Singapore Property This Week
Residential
Sentosa Cove condo prices are now attractive The prices of the upscale waterfront housing district in the Sentosa Cove condo market are now attractive to both the high-end and mass markets on the mainland. This has been revealed in Colliers International’s latest White Paper. The median price of 99-year Sentosa Cove condo units has been reported to decrease 44.2 percent over two consecutive quarters, from $2,950 psf in Q1, 2013 to $1,646 psf in Q3, which is 1.5 percent lower than their 99-year-leasehold counterparts in Districts 9, 10 and 11 as well
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as the financial district on the mainland. This figure of $1,646 psf is also just 25.6 per cent more than the $1,311 psf median price of 99year mass-market condos in Outside Central Region, the narrowest gap observed since condos were first launched in Sentosa. Previously in Q1, 2008, prices of condos in Sentosa Cove climbed as high as 133.1 percent above their mainland counterparts. Attractive deals on Sentosa Cove in the first nine months of this year include seven condo units with floor areas of between 1,012 square feet and 1,216 square feet transacted at $1.71 million to $1.90 million. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 129 China Vanke Co. to build condos for rich Chinese buyers in Singapore China Vanke Co., China's biggest mainlandlisted property developer, has teamed up with Keppel Land to develop 726 flats in east Singapore for rich foreign Chinese buyers who emerged as the top overseas buyers of Singapore residential property. Another factor in Vanke Co.’s decision is reported to be curbs on luxury residences and fundraising back in China. Vanke has sold S$140 million of four-year notes with a 3.275 percent coupon on Oct 31, according to Bloomberg data. More developments are also planned by Vanke in San Francisco and Hong Kong. (Source: Business Times) Commercial Feature Development buys the whole Serangoon Plaza

Feature Development an associate company of Tong Eng Group of Companies, already owned more than 90 per cent of Serangoon Plaza and has now bought the whole of the five-storey Little India complex for $400 million through a collective sale process. The final sale price is 9 to 11 percent more than the indicative price of $360 million to $368 million or $1,751 to $1,790 psf, standing at $1,946 psf. The building was up for sale in September, and the tender closed on Oct 31.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 129 Hotel site in Katong up for sale A 99-year leasehold tenure hotel site on East Coast Road near I12 Katong has been triggered for sale. The hotel is in a heritage area with the leeway for up to 40 percent of the total GFA turned over to serviced apartments and/or commercial use. It is 88,678.4 sqft in size and has a maximum GFA of about 266,040.6 sq ft. A developer is reported to put up a bid of at least $160 million, or $601.41psfppr. The winning bidder will have to restore the former JooChi at Police Station sitting on the plot, which could raise more construction costs. (Source: Business Times) A string of development proposals to get URA permission for Q3 A string of development proposals are reported to be granted provisional permission
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by the Urban Redevelopment Authority in Q3, 2013. These include a 560-room hotel in Jurong Town Hall Road by Resorts World Singapore, an office and retail development in Jurong East by SimLian, a revised development proposal by Keppel Land for its Keppel Towers and GE Tower site in Hoe Chiang Road. Previously in the July-Sept 2013 period, less than a handful of private residential projects received URA nod. One of those projects is the Keppel Land unit Harvestland Development's proposal for a 500-unit condo in Kim Tian Road, near TiongBahru MRT Station and TiongBahru Plaza. (Source: Business Times) Tanglin Shopping Centre up on en bloc market again Tanglin Shopping Centre is now back on the
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SINGAPORE PROPERTY WEEKLY Issue 129 en bloc market after several failed attempts. Millennium & Copthorne Hotels plc (M&C) has signed a collective sale agreement on its 34 percent interest in Tanglin Shopping Centre's share through a wholly owned subsidiary. An independent sales committee including representatives of the unit owners has been authorised to obtain the necessary approvals from other owners to market the property and prepare for a sale given that at least 80 percent of owners must agree to a collective sale. (Source: Business Times) Rabobank signs lease for South Beach Tower Rabobank is said to have signed a lease for about 26,000 sqft at South Beach Tower to move out of 77 Robinson Road, under the advice of DTZ. In addition, Booking.com has also signed a lease for 45,000 sqft at Marina Bay Financial Centre Tower 3 to relocate from its existing location at Suntec City, under the broker of CBRE. Gunvor, a Europe-based commodity trading group providing integrated trading products and logistics services for the global oil and energy markets, will be taking 22,000 sqft of the building. This steady stream of office leasing deals shows that there is still demand in the market in the CBD. (Source: Business Times) Shops at The Interlace condo up for sale

The eight strata-titled shops at 99-year leasehold The Interlace condominium between Alexandra Road and Depot Road have been put up for sale by Knight Frank with a guide price of more than $2,500 psf.

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SINGAPORE PROPERTY WEEKLY Issue 129 The shops are between 388 sqft and 1,119 sqft in size, and have a combined strata area of about 5,340 sq ft. The sales will be done by an expression of interest, and can be for the whole group of shops or for individual units.The Interlace, which has 1,040 residential units, is developed by CapitaLand Singapore and Hotel Properties Limited. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 129

Non-Landed Residential Resale Property Transactions for the Week of Oct 23 – Oct 29

Postal District 1 4 4 4 4 5 9 9 9 10 10 10 10 10 10 10 10 11 11 12 12 12 14

Project Name THE SAIL @ MARINA BAY REFLECTIONS AT KEPPEL BAY SEASCAPE CARIBBEAN AT KEPPEL BAY TERESA VILLE WESTCOVE CONDOMINIUM PARC EMILY THE INSPIRA CAVENAGH GARDENS ARDMORE PARK ST REGIS RESIDENCES SINGAPORE THE MONTANA BALMORAL 8 VALLEY PARK THE HORIZON WATERFALL GARDENS SOMMERVILLE PARK NEWTON ONE THE LINCOLN RESIDENCES CASA FORTUNA OLEANDER TOWERS THE MORNINGTON CENTRA STUDIOS

Area (sqft) 624 2,347 2,680 1,636 1,981 1,539 1,238 936 1,163 2,885 2,142 1,141 1,841 1,808 1,561 2,583 1,884 1,216 2,088 506 1,152 1,259 463

Transacted Price ($) 1,275,000 6,116,000 6,800,000 2,730,000 2,260,000 1,400,000 2,150,000 1,525,680 1,450,000 10,500,000 5,200,000 2,267,750 3,600,000 2,880,000 2,475,000 4,000,000 2,860,000 2,380,000 3,788,000 850,000 1,255,000 1,220,000 650,000

Price Tenure ($ psf) 2,042 99 2,606 99 2,537 99 1,669 99 1,141 FH 910 99 1,737 FH 1,629 FH 1,247 FH 3,640 FH 2,428 999 1,988 FH 1,956 FH 1,593 999 1,586 FH 1,548 FH 1,518 FH 1,957 FH 1,814 FH 1,680 FH 1,090 99 969 FH 1,404 FH

Postal District 15 15 15 15 15 15 15 15 15 15 16 16 18 18 18 18 19 19 20 21 21 21 22

Project Name AMBER RESIDENCES SANCTUARY GREEN BUTTERWORTH 8 HAIG COURT COTE D'AZUR SUNSHINE RESIDENCE ESPIRA SPRING RESIDENCE 66 THE NCLAVE MANDARIN GARDEN CONDOMINIUM LANDBAY CONDOMINIUM THE BAYSHORE DOUBLE BAY RESIDENCES EASTPOINT GREEN MELVILLE PARK LIVIA HILLSIDE MANSIONS COMPASS HEIGHTS THE GARDENS AT BISHAN GARDENVISTA SYMPHONY HEIGHTS THE BEVERLY THE LAKESHORE

Area (sqft) 1,249 775 1,023 1,076 1,679 775 1,206 1,119 1,356 1,572 1,238 1,238 1,367 969 958 2,486 1,141 1,862 883 1,163 1,668 2,992 1,184

Transacted Price ($) 1,800,000 1,050,000 1,350,000 1,410,000 2,100,000 928,000 1,410,000 1,288,000 1,480,000 1,540,000 1,318,000 1,298,000 1,650,000 920,000 830,000 2,000,000 1,080,000 1,500,000 1,020,000 1,500,000 2,050,000 2,250,000 1,480,000

Price Tenure ($ psf) 1,442 FH 1,355 99 1,320 FH 1,310 FH 1,251 99 1,197 FH 1,170 FH 1,151 FH 1,091 FH 980 99 1,065 FH 1,049 99 1,207 99 950 99 866 99 804 99 947 FH 806 99 1,156 99 1,290 99 1,229 FH 752 FH 1,250 99

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SINGAPORE PROPERTY WEEKLY Issue 129

Postal District 22 23 23 23 23 25 26 27 27 28

Project Name LAKEPOINT CONDOMINIUM HILLINGTON GREEN MERAWOODS MERAWOODS PALM GARDENS CASABLANCA SEASONS PARK THE ESTUARY SUN PLAZA GRANDE VISTA

Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,884 1,200,000 637 99 1,356 1,518,000 1,119 999 1,001 1,045,000 1,044 999 1,076 1,050,000 975 999 1,216 968,000 796 99 1,109 1,040,000 938 99 1,109 1,000,000 902 99 1,119 1,138,000 1,017 99 1,313 956,888 729 99 2,702 1,900,000 703 999

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.

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