Friday, August 31, 2012

Property prices to ride high on Thomson Line

Business Times: Fri, Aug 31

[SINGAPORE] Residents in the northern region of Singapore can expect the announcement of the upcoming Thomson MRT Line to boost property prices almost immediately, say consultants, although they differ on the extent of the rise.

Savills research head, Alan Cheong expects residents living in the Springleaf, Seletar, and Lentor area to see the most benefit from the Thomson Line given that they are currently underserved by the public transport system.

"Homes in the Springleaf/Springside area will see prices rise by 10 per cent at least. Prices will move, starting now; we do not have to wait until the line is completed before prices go up. They will usually move for a few months and then stabilise," said Mr Cheong.

Broadly speaking, consultants BT spoke with expect home prices to spike closer to the completion of the line.

According to HSR's senior manager for investment sales, Gabriel Goh, properties near the planned MRT stations might see a gradual increase of 3-5 per cent in the short term, and later enjoy a 20-30 per cent premium over properties that are not as close to the stations.

Senior manager for training, research and consultancy at DWG, Lee Sze Teck expects a near term price increase of 5-10 per cent, with a price appreciation in the range of 20-30 per cent when the MRT line is completed.

That being said, prices of properties close to major construction work sites may take a momentary dip to the tune of 5-15 per cent, said DTZ's head of Asia Pacific research Chua Chor Hoon.

"Otherwise, we do not expect any adverse impact on prices on other properties along the route. Even if there is road diversion... owners will (likely) hold out for better prices later," she said.

Ms Chua said she expects the area spanning Woodlands to Upper Thomson to see the largest increase in price given that they benefit most from the reduction in travelling time to town.

The Thomson MRT Line will be launched progressively in three stages from the north to the south, with three stations from Woodlands North to Woodlands South ready by 2019, six stations from Springleaf to Caldecott ready in 2020, and 13 stations from Mount Pleasant to the Gardens by the Bay fully operational by 2021.

Ong Teck Hui, executive director of Credo Real Estate, which will be part of Jones Lang LaSalle (JLL) on Sept 1, noted that while properties impacted by the construction may suffer in the short term, owners of properties in the vicinity not affected on the other hand, may leverage on future proximity to the MRT as a selling point, and ask for a premium for their properties.

Indeed, properties and projects near train stations tend to do fairly well in terms of rental opportunities, pointed out JLL's head of South-east Asia research, Chua Yang Liang.

"By and large, the difference in value between homes located near train stations, and those located further away tend to differ by between 5-10 per cent, although a lot also depends on the property itself - the kind of property we are talking about for instance, and the amenities in the area," said Dr Chua.

However, there may eventually be less disparity in prices in different parts of Singapore as the transport network improves connectivity and reduces travelling time, said DTZ's Ms Chua.

"The uplift on prices will progressively be less pronounced compared with in the past when there were much fewer properties that enjoy proximity to MRT stations," she said.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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Upward trajectory

Business Times: Fri, Aug 31

FAST cars, sleek yachts and luxury apartments are fairly typical wish-list items for anyone in search of the good life, and owning one or more of these big-ticket status symbols is likely to be a source of some satisfaction. For Ong Chih Ching, however, it's a little different: for her, it's just another day at the office.

As the CEO of high-end real estate development and lifestyle group KOP - which she co-founded in 2006 with business partner Leny Suparman, who heads KOP's property arm - Ong, 43, has played a significant role in helping to redefine the type of luxury home that people of means might want to live in, whether it's a highrise apartment building with drive-in "sky garages" (Hamilton Scotts), a family-style getaway (Montigo Resorts in Batam), recently introduced as an option in the affordable luxury category, or posh digs in District 9 attached to a recognisable brand name (Ritz-Carlton Residences).

KOP is also transforming 10 Trinity Square, a historical building opposite London's Tower Bridge, into an ultra-deluxe mixed-use development with residences, a hotel, boutiques, restaurants and a members' club. The company's portfolio includes yacht-charter business Aqua Voyages while in their personal capacities Ong and Suparman are also founders of Bezel, the Watch Collector's Guild - providing more than a hint of where Ms Ong's personal interests lie.

"I like the finer things in life," says Ms Ong, who lives on the 33rd floor of the Ritz-Carlton Residences and who admits to having a penchant for sports cars since she was very young (she currently owns an Aston Martin). Still, it's clear that the trappings of wealth are not what drive her - she started with a bold vision and simply had the conviction in her beliefs to see it through.

Ms Ong, the second in a family of four children, wanted to be an architect but ended up as a lawyer instead, starting her own firm Koh Ong & Partners in 1996 with a staff of three in a 753-square-foot space in Cecil Street. The company grew to include 20 lawyers and Ms Ong developed into a specialist at corporate and property law - the expertise gained then comes in pretty handy these days.

"The law can be dry and boring but the meeting of people and providing solutions to their problems - that's something I really love," she says. "One of the greatest joys is to put a smile on people's faces. They always come in frowning, and they always think I'm too young." But, as the saying goes, you're not too young if you can do the job and more often than not, that's what has happened.

"A lot of clients became friends," says Ms Ong. "I will always miss practising law but it's very stressful. When you're trying to please someone else you assume their problems and issues."

She adds, "As a lawyer you are responsible for providing the best solution but not for taking the decision - now, I make the decisions that affect people, so it's different."

The qualities that make her a good entrepreneur are also double-edged, says Ms Ong. "I think I'm very brave and I can read the market well, but the problem then is that you're in uncharted waters so there's no precedent." Forecasting the property market is a risky business, she adds. "When you read a market well, you're always reading a few years ahead, and even if you're right - there might be unforeseen circumstances that could impact the outcome."

Ong readily admits to making expensive mistakes in the past - unsold apartments and stagnant prices were part of the grand plan."Having learnt my lesson, when reading the market we also play safe and put in more risk factors," she says. "I think I'm more mature now, although most of the time I will go with my gut feel - I'm an intuitive person." She is also willing to cut losses and emerge stronger the next time around, she adds.

As a young child growing up, Ms Ong, whose family home was in Seletar Hills, recalls Saturdays spent visiting her grandparents in Emerald Hill. There, she would pass the time by sketching buildings in the area, and also buildings that sprouted from her imagination. "My parents thought I would become an architect and so did I," she says. "I've always liked beautiful structures and that's what motivated me to travel."

An early architecture pilgrimage brought her to Egypt to see the pyramids. In 1998, her interest in unique buildings led to Dubai and the Burj Al Arab, the sail-shaped luxury hotel seemingly rising out of the water's edge. It was still under construction then but she has stayed there on several occasions since, having done legal work for the Dubai government and private individuals.

Money was an issue when she was younger but nowadays, Ong is able to travel to remote corners of the world to indulge her passion. For instance, a recent visit was to the Tree Hotel close to Sweden's Arctic Circle - a series of individual rooms built at tree height in a pristine forest.

Her favourite designers are Frank Gehry and Andree Putman, marquee names that have been known to help sell a building or two. "When successful, architects build art forms, not buildings anymore," says Ms Ong. "What remains important is that the building must look nice." She adds, "When someone loves buildings, the natural thing is to become an architect, but being a developer is a better position because you get to pick and choose the building that you want."

Ong also had a healthy interest in watches and boats, which she turned into businesses. There can be a downside, however. "When you have a passion for something and you actually convert it into a business, you tend to lose the passion," she says. For instance, watch-collecting developed from a hobby into Bezel. "Your favourite watch then becomes the one that makes the most money for you."

She also has a love of fast boats. "Basically, I love speed. I love going out to sea with good friends but it takes time - which is a luxury." She adds, "When we started chartering yachts the business was viable but it requires a lot of maintenance and you just have to discount the bills that come your way."

Ms Ong says the part of the core real estate development business she enjoys the most is coming up with the vision for a project. The brief for transforming 10 Trinity Square - built in 1922 in the Beaux Arts style as the headquarters for the Port of London Authority - was to retain tradition but to add an English quirkiness to it, similar to British fashion designer Paul Smith's signature style for his men's suits. "When you're faced with a significant building there's a heavy burden to do it better - at least, don't ruin it," she says.

Ms Ong says that as a young consumer she was just as brand-conscious as the next person, but she has always had unconventional tastes. "I'm more niche, and constantly trying to discover new things," she says.

"I'm at this phase where it's not about the name, it's about the work. Nowadays there's too much emphasis on marketing and I'm not sure if you're buying the substance - I'm very sure you're buying the marketing." She adds, "I'd rather go for what I perceive as value - I don't need to know the name."

KOP's short-term objective is to expand the Montigo Resorts brand further in Indonesia and also in China. Since the Batam project was launched in 2008, prices have gone up by 60 per cent, says Ms Ong. "We're very excited about Montigo, I think it will make a difference in the hospitality world," she says, adding that catering to the family-friendly market puts KOP well ahead of the curve. Deciding to build in Batam was also a bold step because most people had a different perception of the location. "The cost of living is much lower there - you can have a good time in Batam for very little money."

The company plans to continue leading the way in upmarket residential developments and lifestyle concepts, but at a more measured pace, says Ms Ong. "Expansion has its own issues, and the way to propel forward is to consolidate, and then move up again."

The drive to succeed has been ingrained in her from a very young age. "I was the least favourite child, so my dad was very hard on me," says Ms Ong, whose father was in the roller-shutter business. He died in 1998. "I had the best scores but because I wasn't his favourite, I needed to prove myself. If he was alive it would be very different - he was safe and conservative, I'm like the complete opposite."

As for whether he would approve of her success and the way she's achieved it, Ms Ong smiles and says, "If he looked at it all now, he'd probably concede defeat."

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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Top bid for Yishun industrial site beats expectations

Business Times: Fri, Aug 31

A STATE tender for a 30-year leasehold industrial site at Yishun Avenue 9 has attracted a higher-than-expected top bid of $51.388 million, or $95.13 per square foot per plot ratio, (psf ppr) from Soon Hock Tuas Development.

This was 12.7 per cent above the second highest offer of $84.41 psf ppr by a partnership between Capital Development and ZACD Investments. In third position was Soilbuild Group Holdings, which priced the site at $71.06 psf ppr.

In all, the Urban Redevelopment Authority tender yesterday drew eight bids. The 2-hectare plot (parcel 5) is across the road from a 1.2-hectare site (parcel 6) - also on 30-year tenure - that was recently triggered for launch from the government's reserve list, with an undertaking from the successful applicant to bid at least $14.2 million (or $45.03 psf ppr).

Both sites are zoned for Business 1 use, with a 2.5 plot ratio (ratio of maximum gross floor area to land area) and can be strata subdivided. Permitted uses for Business 1 zoning include light industry, clean industry, utilities and telecoms.

Soon Hock group - the top bidder at yesterday's tender (for parcel 5) - is fully owned by Tan Yeow Khoon. He and his brother Tan Yeow Lam are major shareholders of mainboard-listed Cogent Holdings Limited, the parent of SH Cogent Logistics.

Savills Singapore director of industrial and business space Dominic Peters told BT yesterday evening that he had expected parcel 5 to fetch a top bid in the $70-80 psf ppr range.

Colliers International director (industrial) Tan Boon Leong's forecast was about $70 psf ppr. He estimates Soon Hock's break-even cost for a new strata industrial project at about $220-240 psf. "On average, they should be able to sell units at above $300 psf, with ground-floor units commanding at least $400 psf and upper-floor space, around $280-310 psf," Mr Tan added.

Soon Hock chairman Tan Yeow Khoon told BT he plans to develop the Yishun Avenue 9 plot into a ramp-up development with strata industrial and warehouse units. This could be a multi-storey project of about eight to 10 storeys but plans have yet to be firmed up, he said.

This will be Soon Hock's fifth strata industrial project in Singapore for sale. It has completed Tuas Cove Industrial Centre and T5 @ Tampines which are both fully sold. It is also building Bartley Biz Centre at Kaki Bukit Road 4, which is around 75 per cent sold.

Earlier this year, the group clinched an industrial site at Serangoon North Avenue 4 on which it is planning to launch a ramp-up /flatted factory facility in Q1 next year.

On Tuesday, Soon Hock group lost out to property giant Far East Organization at a URA tender for a 99-year leasehold private housing plot at Farrer Road, next to Lutheran Towers.

Soon Hock bid $44.3 million or $1,072.73 psf ppr, or about 3 per cent below Far East Soho's top bid of $1,107.80 psf ppr.

The plot can be developed into a maximum of 54 apartments.

The lowest bid at yesterday's tender for Yishun Avenue 9 (parcel 5) was from Wee Hur Development - at $25.3 million or $46.83 psf ppr. Others participating at the tender include Oxley Sparkle ($70.56 psf ppr), OKH Holdings, Vantage Properties and KNG One.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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