Thursday, May 31, 2012

Two big suburban projects go on sale

Straits Times: Thu, May 31
TWO large suburban launches are expected over the next two weeks - Sea Esta in Pasir Ris and River Isles in Punggol.

Market experts say the launches will test the strength of demand for new homes, given that sales have been defying gravity since the start of the year.

The string of new suburban project launches this year has seen healthy demand by HDB upgraders, with a staggering 9,200 new private homes sold in the first four months of the year.

Agents say Qingjian Realty's 610-unit River Isles at the junction of Punggol Central and Edgedale Plains will be previewed this weekend at average prices of about $850 per sq ft (psf).

Indicative prices of typical three-bedroom apartments, which make up about half of all the units available, start from $810,000, or $850 psf. Their sizes range from 893 to 1,183 sq ft, according to marketing material.

Two-bedders will start from $670,000, or $900 to $920 psf, while one-bedroom units will be priced from $440,000, or $940 to $1,000 psf.

Hoi Hup Realty's 376-unit Sea Esta in Pasir Ris Link will also be sold at similar prices of about $850 to $890 psf on average, agents say.

Its preview is expected to take place next weekend.

Three-bedroom units will cost $770,000 and upwards, while a buyer will have to stump up at least $590,000 for a two-bedder.

Experts say that in areas such as Punggol and Pasir Ris where many residential projects have already been launched, developers will have to watch their projects' pricings closely to remain attractive to home buyers amid stiff competition.

If their locations are not great - far from an MRT station, for example - buyers will then be more price sensitive, SLP International research head Nicholas Mak said.

'The rate of sales will be proportional to the price... Many suburban projects in these areas are priced at the $800 to $900 psf range, so it just depends on whether you are in the upper or lower end of that scale,' he added.

Mr Colin Tan, research head at Chesterton Suntec International, agreed that while the two estates have seen their fair share of launches, there is still a flush of liquidity in the market and investors are looking for a place to park their cash as an alternative to low bank interest rates.

'Investors might still be keen on small units in some of these projects due to the affordability of these homes,' he added.

Recent launches in the area include Ripple Bay and Seastrand in Pasir Ris and Riversound Residences and Flo Residence in Punggol...
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Team Marshe
Martin Koh/ Sherry Tang
9383-3992/ 9844-4400

Penang raises bar for foreigners buying property

Business Times: Thu, May 31
FOREIGNERS buying property in Penang will have to cough up substantially more when new guidelines kick in, come July.

In a move to ease its runaway property prices, the bustling northern Malaysian state has decided to bump up the floor price of real estate that foreigners are eligible.

Currently, foreigners can purchase property that is priced above RM500,000 (S$205,000). Penang plans to raise this floor.

"Penang has boldly taken the lead by imposing a limit on all property purchases by foreigners in Penang to above RM1 million and landed properties in Penang Island to above RM2 million beginning on July 1, 2012," Penang chief minister Lim Guan Eng said in a media statement on Tuesday.

He had previously hinted of the move after news emerged the federal government was looking to double the current minimum purchase for foreigners to RM1 million in an attempt to control prices from spiralling too rapidly.

In Malaysia, land matters fall under state jurisdiction and Penang's speedy decision is likely in response to the limited space - especially on the island side - coupled with very robust demand in recent years. The Federal Territory (Kuala Lumpur) is another area with land constraints and Selangor because of its larger size, only has pockets of expensive real estate, property players said.

But Penang has stood out for a number of reasons.

"The island is becoming a valuable real estate play. There are many Penangites working all over the region who intend to retire (there). They are adding to higher values as well. As an island, land is finite in supply so values are rising from both local and foreign interest," Malaysia Property Inc chief executive Kumar Tharmalingam said.

Indeed, the large Penang diaspora (including in Singapore) as well as international community from Singapore, Indonesia, Hong Kong, Japan, and United Kingdom constitute significant components of the market, Henry Butcher Malaysia noted in a report earlier this year. The property firm said that a double-storey terrace house built in the 1970s cost RM450,000 in 2006 and RM850,000 five years later.

Participants of Malaysia's My Second Home Programme and retirees have identified the state as "a preferred destination of choice" for a number of reasons, it said, including its high standard of living but low living costs, international health care standards, economic and political stability, and lack of natural or man-made disasters. As a result, a number of Klang Valley developers had also moved north.

A federal opposition coalition Pakatan Rakyat leader, Mr Lim contends the rise in property prices is also because of "rising public confidence" in his administration. Pakatan took control of the state after the 2008 general election. His media statement came on the heels of claims by the state opposition that rising land premiums had led to property price increases. Denying the claims, he pointed out land conversion rates had been maintained from the previous administration.

In Penang, foreigners comprise nearly 8 per cent of total residential property buyers, four times the national average. Because most Malaysians bemoan the ringgit's feeble purchasing power, stronger foreign currencies and their superior purchasing power can rankle...
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Martin Koh/ Sherry Tang
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Peace Centre, Mansion take new tack

Straits Times: Thu, May 31
PEACE Centre and Peace Mansion are back on the market after three failed collective sale attempts.

This time, one of the owners is taking a different tack, by seeking expressions of interest to co-own and manage part of the property.

About 46 per cent of the total share value of the development, on a 76,617 sq ft site, is up for sale, marketing agent Colliers International said.

This consists of 90 retail and office strata-titled units, including a ground-floor food court, 11 residential units and 162 carpark spaces. They have a total strata area of 283,908 sq ft.

The development comprises Peace Centre - a commercial podium block that is partly seven storeys and partly 10 storeys - and Peace Mansion, a 32-storey residential tower with 84 apartments and two penthouses.

Colliers said the owner, Hong Kong-based Kian An, is seeking a joint venture partner to take over the asset management services so as to enhance the value of the property.

This can be done through active lease management, tenant-mix repositioning and asset enhancement works.

Kian An will sell a partial stake in its investment holding company to form the joint venture.

Colliers noted that the 90 office and retail units have an occupancy rate of more than 90 per cent, while the 11 residential units are 84 per cent leased.

The self-operated carpark enjoys a high occupancy rate, with the total monthly rental income for these properties at more than $600,000, said Ms Tang Wei Leng, executive director of investment services of Colliers International.

'Due to the limited supply of strata-titled office space available in the market, investors are always on the lookout to buy strata office space,' she added.

For example, in February, a 5,600 sq ft, two-storey corner unit in Peace Centre was sold for $11 million - or $1,970 per sq ft.

Moreover, there is redevelopment potential for the Peace Centre and Peace Mansion site, Ms Tang noted.

In fact, the last collective sale exercise for the site was launched last year at an indicative price of $675 million but was unsuccessful...
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Team Marshe
Martin Koh/ Sherry Tang
9383-3992/ 9844-4400