Grange Heights and Cairnhill Astoria near Orchard Road to take another stab at en bloc sale

The Business Times - September 17
Two prime freehold residential sites in District 9 near Orchard Road will be offered again for collective sale on Sept 18, according to real estate service provider Colliers International.

They are Grange Heights in St Thomas Walk, which will be up for public tender for S$820 million, and Cairnhill Astoria in Cairnhill Rise, which relaunches with a S$196 million asking price.

This is the second attempt at collective sale by owners at Grange Heights. Depending on the size of their property, each owner can potentially receive between S$5.235 million and S$10.762 million from the successful sale of the development.

Tang Wei Leng, Managing Director:
The well-sized Grange Heights site presents the successful tenderer with an exciting opportunity to develop an upmarket, luxury residential development in the heart of a popular high-end residential district. Subject to relevant approvals, the redevelopment site can potentially yield 388 new units at average size of 1,033 sq ft each. 

Being mere minutes from the bustling Orchard Road, the Cairnhill Astoria site in the prestigious Cairnhill enclave provides both convenience and exclusivity. It offers the successful tenderer an opportunity to create a new landmark offering in the area. The fresh cooling measures may have calmed market sentiment in the near-term but we believe the longer term outlook for high-end homes in Singapore – particularly those in District 09 and 10 - remains positive.

The convenience of being near Singapore’s main shopping district and the allure of living in an upscale residential area – with a good public transport network - will remain appealing to many prospective home buyers. Recent new launches in nearby areas have seen relatively healthy sales, reflecting genuine demand for homes in the Core Central Region. Click here for the news release.


Evia, Gamuda jointly make top bid for Anchorvale site by hair's breadth

The Business Times - September 15
Evia Real Estate and Gamuda, working as a team, emerged the top bidder for the Anchorvale Crescent EC site - pipping the next highest bidder by a mere S$899.
Their bid of S$318,888,899 just narrowly outpaced the one by Qingjian Realty's CNQC Realty (Treasure) Investment by 0.0003 per cent - what some observers say is the narrowest margin for a Government Land Sales (GLS) site.

Their bid of S$318,888,899 just narrowly outpaced the one by Qingjian Realty's CNQC Realty (Treasure) Investment by 0.0003 per cent - what some observers say is the narrowest margin for a Government Land Sales (GLS) site.

The bid price, which works out to S$576.24 per square foot per plot ratio (psf ppr), is also the second highest land rate paid for an EC site, going by data from JLL going back to 2010.
 

Tricia Song, Head of Research: 
The site received seven bids, with a top bid of SGD318.9 million or SGD576.2 psf ppr, in line with expectations. The top bidder was a JV between Evia Real Estate and Gamuda who last partnered in GEM Residences. Evia Real Estate is also no stranger to EC development, having developed Heron Bay EC in 2012 and Lake Life in 2013.
  
Interestingly, the top bid barely edged out the second highest bidder by just SGD899 or 0.0003%, and the tight margin of just 15% between the top and last bidder showed the consensus of pricing among developers. 

Together with the Canberra Link EC site tender which closed on Sep 4 and saw nine bids and a top bid of SGD558.2 psf ppr, we believe there continues to be relatively stronger demand for EC land. This compared with the subdued three and five bids for the Jalan Jurong Kechil and Dairy Farm private housing sites which both closed on Sep 4, post measures. Developers appear to think that in light of the latest government curbs, EC units would still enjoy strong demand. Based on the top bid of SGD576.2 psf ppr, we estimate a breakeven price of SGD900-950 psf ppr and an average selling price of SGD1,100psf. Click here for our analysis.


2018 new home sales forecast to wilt by a quarter

The Business Times - September 18
This year's new home sales could be as much as 25 per cent lower than last year's levels, market watchers said, after government data revealed subdued home-buying activity in August as a result of the cooling measures and also the Hungry Ghost Festival.

Developers in Singapore sold 616 private homes, excluding executive condominiums (ECs) last month, a 64.3 per cent fall from the 1,724 units moved in July. The figure was also a 50.6 per cent drop from the 1,246 units booked in August last year, said the Urban Redevelopment Authority (URA) on Monday.

New home sales for the first eight months of the year stood at 6,287 units, 25.1 per cent lower than the 8,397 units sold for the corresponding period last year. The lower sales volume in August came from lower launch activity as well: During the month, developers launched just 534 units, 23.8 per cent of the 2,239 units in July.

Tricia Song, Head of Research: 
Developers’ sales plunged 64.3% to 616 units (excluding Executive Condos) in August, from a 16-month high of 1,724 units in in July. This reflects the true effect of the measures as July’s figure was boosted by last-minute transactions on July 05, as prospective home buyers rushed to lock in their home purchase before the new cooling measures kicked in the following day.

However, this figure is not too bad, compared to the 482 units sold in July 2013, a fall of 73.3% MOM a month after the eighth round of cooling measures which introduced the Total Debt Servicing Ratio (TDSR), in June 2013.  

We believe the sales in August may not yet reflect the underlying demand for homes, given the subdued launches and buying mood post the measures. We expect home sales to continue to be slow, and to average around 600-700 units per month for the rest of the year, as prospective buyers and even developers adopt a wait-and-see approach following the introduction of the fresh cooling measures. Click here for our analysis.