En bloc hopefuls extend tender closing dates

The Busines Times - July 25

With no successful collective sale deals since the latest cooling measures took effect on July 6, some projects that have already launched their tenders are extending their deadlines.

The tender for Horizon Towers, launched on July 5 at a reserve price of S$1.1 billion, will now close on Sept 12 instead of the previously announced Aug 7. Lakeside Apartments, with a S$240 million reserve price, has also extended its tender closing date to Aug 21, from July 24 previously.

Dalvey Court, with a reserve price of S$160 million, has also extended its tender closing from Aug 2 to Aug 30, to "allow potential purchasers sufficient time to conduct their due diligence in light of the latest property measures," said Christina Sim, director of capital markets at Cushman & Wakefield.

Meanwhile, Laguna Park is at 76 per cent signatures, while Braddell View, marketed by Colliers International, has achieved over 75 per cent signatures.

Tang Wei Leng, Managing Director:

Developers continue to enquire about collective sale sites and we still sense interest among them. Even before the cooling measures were announced, many developers were already looking for a discount on asking prices. We expect this trend to continue, particularly after the cooling measures kicked in. 

On the part of owners, the cooling measures have brought about a reality check. Some of them who thought the collective sale fever would rage on for a long time and insisted on high prices are now more willing to negotiate. 

Overall, the market is eagerly anticipating the first acquisition post-cooling measures in order to get a sense of the new price levels. It will probably take a few more transactions before the collective sale market finds its new equilibrium. We believe transactions will moderate to a healthy and sustainable level, and this will restore the balance in the collective sales market

Tricia Song, Head of Research:

We could see more collective sale tenders being extended going forward so as to allow developers more time to observe the market, re-assess the risks and recalibrate their cost and pricing strategies.  

It will become more challenging to market mega sites valued over SGD1 billion after the new cooling measures kicked in on July 06. Understandably, developers will need more time to assess the new market conditions, supply and demand dynamics, and price trend before building their land banks further. We do not think it is necessarily ‘game over’ for billion-dollar sites – much will depend on the locational attributes and the supply pipeline within their immediate surroundings. Large sites in mature estates which have not seen any new launches in the past years could still appeal to developers.

Daintree Residence to launch for sale on July 28

The Business Times - July 21

All eyes will be on Daintree Residence when it launches for sale on July 28 - the first condominium to do so since the latest round of cooling measures came into effect.

But the pricing has left analysts divided: the Toh Tuck Road condo will likely go in the region of an average of S$1,800 per square foot (psf), Neo Keng Hoe, general manager for the developer SP Setia, told The Business Times.

Previews began last weekend, with 3,000 people coming through the showflat. These include upgraders and young families, Mr Neo said.

There is a lack of new launches in the area in the last few years, he said. The last was the retirement resort project The Hillford in 2014. Proximity to the Beauty World MRT and schools in the Bukit Timah area will also likely boost homebuyer demand, he added.

Tricia Song, Head of Research:

Developers’ strategies are likely to differ depending on their products and competitive outlook. For Daintree, the developer is very confident of the demand and hence is going ahead to push out the launch right after the cooling measures and without re-setting the price. The positive turnout at the showflat reflected strong pent-up demand in a locality that has no new private launches since 2013 (The Creek @ Bukit). It is also in a popular fringe location just off the prime Bukit Timah enclave that have witnessed several high land bids.  

The pricing on a per square foot of SGD1,800psf appears to be a significant premium to its nearby older comparable projects: 99-year leasehold High Oak Condominium (completed 1999) was trading at SGD900-1,000psf, freehold Signature Park (1998) and 999-year Terrene at Bukit Timah (2013) were trading at SGD1,200-1,300psf while the freehold Creek at Bukit (2017) sold mostly smaller format units at SGD1,630psf. Based on the median quantum price for the comps of about SGD1.2-1.4 million, buyers could favour the 2-bedroom configurations at Daintree Residences which are 603-775 sqft.

Singapore hotels the clear winners in Trump-Kim Summit

The Business Times - July 24

The June meeting between US President Donald Trump and North Korean leader Kim Jong Un has proven an unequivocal success - for Singapore's hoteliers that is.

Hotel occupancy in the South-east Asian city-state reached 81 per cent in the April-to-June period, higher than the average 70 per cent in Asia-Pacific and Singapore's best second-quarter rate since 2013, according to research firm STR. The strong performance comes even after growth in Singapore's hotel room supply, the consultancy said.

In terms of revenue per available room, June was Singapore's strongest month in the quarter, rising 6.9 per cent from a year ago. In fact, hotels in the country's Orchard Road tourist belt reported three consecutive days with double-digit growth in revenue per available room between June 10 and June 12.

Govinda Singh, Executive Director, Valuation & Advisory Services:
As expected, the days leading up to and during the summit witnessed a bump in hotel demand levels as the world’s eyes turned to Singapore. This, once again, has surely put Singapore on the must-see map and would no doubt go well towards boosting visitor arrivals. Given the spectre of downside risks on the horizon however, the timing of this publicity could well be a boon for Singapore and its hoteliers.