ERA Realty promotes COO Marcus Chu to CEO
The Business Times, 28 Jun 2021, Mon
By Lisa Kriwangko
ERA Realty, a wholly-owned subsidiary of mainboard-listed APAC Realty, will be promoting its current chief operating officer (COO) Marcus Chu to chief executive officer (CEO) with effect from July 1.
Mr Chu will be succeeding current CEO Jack Chua, who will continue to seek out expansion opportunities as APAC Realty's executive chairman, said the company in a press statement.
The separation of the chairman and CEO roles is intended to enhance the company's corporate governance, APAC Realty said in an exchange filing on Monday.
Mr Chua, who will be providing guidance to Mr Chu, said: "Marcus has played a critical role in the group's growth and achievements and we are confident that he has the right attributes to lead and advance our strategic growth plans for Singapore and the region."
As CEO, Mr Chu will be taking over the helm of the Singapore headquarters and overseeing the business operations as well as day-to-day management of ERA Singapore.
ERA Singapore said during his 25 years in the company, Mr Chu has spearheaded ERA's digitisation initiatives, such as its new customer relationship management tech tool, mobile application and search portals.
Marina Bay views: URA puts mixed-use site near CBD, set to yield 905 homes, on sale for at least S$1.508b
Today Online, 28 Jun 2021, Mon
By Justin Ong
A land parcel at Marina View, with a minimum price of S$1.508 billion, is expected to draw strong interest from property developers looking to add to the area’s limited supply of new homes. This is because more property buyers are attracted to the prospect of living in the Central Business District (CBD), property consultants said.
The mixed-use site, near the upcoming Shenton Way MRT Station, is set to yield 905 homes and 540 hotel rooms, with some office and other commercial use also permitted. It was put on the market by the Urban Redevelopment Authority (URA) on Monday (June 28).
URA said that the envisioned high-rise development would give some residents views of Marina Bay.
Property consultants who spoke to TODAY said that with more people living in the city centre, the area will be more vibrant on weekends and after working hours, which is in line with the Government’s plans to rejuvenate the CBD area.
The site area is about 7,800 sqm, which is about the size of a football field. The maximum floor area is 101,629 sqm, of which at least 51,000 sqm must be used for homes while 26,000 sqm must be for hotel rooms or hotel-related use, URA said.
A maximum of 2,000 sqm may be used for commercial use and up to 2,000sqm may be used as office space, URA added.
As well as being beside Shenton Way MRT Station on the Thomson-East Coast Line, which is still under construction, the site is also near Marina Bay, Downtown and Tanjong Pagar MRT stations.
Hawker centre Lau Pa Sat and several office buildings in the area, including Capital Tower and Marina Bay Financial Centre, are within 1km of the site.
URA announced that the site had been put to tender, closing Sept 21, after an unnamed developer had committed a bid price of no less than S$1.508 billion.
The site was on the authority's reserve list for the first half of this year. Such sites are put to tender only after a developer commits to a price acceptable to URA.
Property analysts told TODAY that developers would be interested in this site because more people have been warming up to the idea of buying a home in the CBD area, where there is a relatively limited supply of residential units.
Mr Steven Tan, chief executive officer of real estate agency OrangeTee & Tie, said that other residential projects situated in the Downtown Core, such as Midtown Modern and The M, have seen healthy take-up rates.
“It seems like more Singaporeans are more receptive to living in the city,” he said. “They can live near their workplace and they can enjoy the convenience and lifestyle in the city area.”
The hefty sum for the minimum bid should not come as a surprise either, given the large amount of floor space available and the site’s location right in the city centre. Other developments in this prime district have also fetched large sums.
Ms Wong Siew Ying, head of research and content at Propnex Realty, said that a site at the Marina Bay area worth S$2.57 billion was awarded in 2016 to the IOI Properties Group, for an office-retail development.
Compared to the Central Boulevard site, Ms Wong said that developers may be more interested in the Marina View plot because “it gives them the opportunity to capitalise on the relatively limited supply of residential units in this prime location”.
She expects about five to eight bids for the site, with the winning bid to be as high as S$1.9 billion.
Ms Wong added that the initiative to create more residential and living spaces in town is in line with the Government's CBD incentive scheme.
The scheme was rolled out in 2019 and applies to areas around Anson Road, Cecil Street, Robinson Road, Tanjong Pagar and Shenton Way, where the new site is located, so that the CBD is “not only a place to work, but also a vibrant place to live and play”, then-National Development Minister Lawrence Wong said.
Agreeing, Mr Nicholas Mak, head of the research and consultancy department at real estate firm ERA Realty, said that the need to get more people living within the CBD was made more apparent during the Covid-19 pandemic, when the office crowd was sapped from the area and working from home became the default for many companies since the semi-lockdown last year.
He said that while there will still be use for offices as collaborative spaces, many companies will be retaining hybrid or work-from-home practices in the wake of the pandemic, which may hurt businesses in the area.
“Work-from-home will be here to stay… The Government wants to have more people living in the downtown area, where there is more life on the weekends and public holidays.”
Asked why the floor area for commercial use has been limited at only 2,000 sqm — about one-third the size of a football field — he said that the demand for commercial spaces in this area will not be high unless more people live in the area, which is what this site will achieve.
“It is a symbiotic relationship between malls and residential areas — if a mall is surrounded by many residents, that mall will do well,” he said.
“But you take a mall out of a residential area and plonk it in the middle of the CBD... the moment there is a lockdown, that mall will suffer.”
Read more at https://www.todayonline.com/views-marina-bay-ura-puts-mixed-use-site-near-cbd-set-yield-905-homes-sale-least-s1508?cid=tdy%20tg_tg-am_social-msging-free_09102018_today
Marina View site launched for sale, bids below $1.508 billion will not be accepted
The Straits Times, 28 Jun 2021, Mon
By Grace Leong
The Urban Redevelopment Authority (URA) launched the sale of a plum site in Marina View on Monday morning (June 28), after an unnamed developer undertook to bid at least $1.508 billion for it.
The white site, which is intended for a mixed-use development with residential, hotel, commercial and/or serviced apartments, comes under the reserve list of the first-half 2021 Government Land Sales programme.
The public tender for the land parcel will close at 12pm on Sept 21.
Any tender below the minimum bid price of $1.508 billion - which works out to $1,379 per square foot per plot ratio (psf ppr) - will not be accepted.
Read more at: https://www.straitstimes.com/business/property/marina-view-site-launched-for-sale-bids-below-1508-billion-will-not-be-accepted
Thin home supply in Downtown area may stir more interest for Marina View site, triggered at S$1.51b
The Business Times, 28 Jun 2021, Mon
By Jamie Lee
THE white site at Marina View that was said to be triggered by IOI Properties at S$1.508 billion may be well-received by developers given the limited supply of new homes in the Core Central Region (CCR), analysts said. Given the large financial commitment required for the site, developers are expected to set up joint ventures to parcel out the risk.
The tender was launched for sale by public tender on Monday, and will close at noon on Sep 21, 2021, the Urban Redevelopment Authority (URA) on Monday said.
URA released the white site in Marina View for sale by public tender following a successful application from a developer - not named by URA - that committed to bid at least S$1.508 billion or S$1,379 per square foot per plot ratio (psf ppr) at tender.
The 0.78-hectare (about 84,000 sq ft) site, with 99-year leasehold tenure, can be developed up to 1.09 million square feet (sq ft) of gross floor area (GFA).
The plot can generate some 905 private homes, 540 hotel rooms and 21,528 sq ft GFA of commercial space.
Lee Sze Teck, director of research at Huttons Asia, similarly said the tender will attract "no more than five bidders" made up of consortiums, because of the large quantum and higher risks involved.
With developers mindful of the increasing labor cost, the expected bidding price could be about S$1,550 psf - S$1,700 per square feet per plot ratio (psf ppr), with an expected selling price of between S$2,500 and S$2,800 psf, said Christine Sun, senior vice president of research and analytics, OrangeTee & Tie.
"The site may be well received as currently some of the new projects like Marina One Residences, The M and Midtown Modern received good sales response in recent months," she added.
According to data from OrangeTee & Tie, the median transacted price of Midtown Modern stood at about S$2,700 psf, that for The M is about S$2,675 psf, while that for Marina One Residences is S$2,450 psf.
"Currently, mixed development sites with residential and commercial components are also popular among buyers especially those with retail shops," said Ms Sun. The comparable site could be the white site in Central Boulevard next to Asia Square Tower 1, which was sold for about S$2.57 billion or land rate of S$1,689 psf ppr, she added.
Supply is also tight in the CCR. Data from PropNex showed that as at end of Q1 2021, there were a total of 1,650 units from four residential projects situated in the Downtown Core area.
Ismail Gafoor, CEO of PropNex, said the Marina View site can become a "trophy project" for a developer in the heart of downtown Singapore.
PropNex noted that the site’s location is attractive, being in the Downtown Core, and next to the upcoming Shenton Way MRT station. It is also a stone’s throw from the Marina Bay MRT interchange station, which will be linked up to the future Thomson-East Coast Line.
He said: "We believe the site will help to boost the resident population and inject more vibrancy in the Marina Bay area – in line with the government’s plans to enliven the city centre and to make sure the central business district does not become a ghost town after work-hours."
Developers can take advantage of the flexibility of the commercial-white use to propose innovative uses too, such as co-working office spaces, or entertainment venues - uses that will not only benefit the residents of the development but also the wider Marina Bay precinct, he added.
The land was available for sale on the Reserve List of the first half 2021 Government Land Sales Programme.
A "white" site is a land parcel where a range of uses are allowed, although the government is likely to stipulate a minimum component, or even a maximum component, of a specific use or specific uses to meet its planning intentions.
In this case, the site is intended for a mixed use development with residential, hotel, commercial and/or serviced apartment.
Who will win the Marina View white site?
The Business Times, 28 Jun 2021, Mon
By Kalpana Rashiwala
ON Monday, the Urban Redevelopment Authority launched the tender for a white site in Marina View that can generate about 905 private homes and 540 hotel rooms, as well as up to 2,000 square metres (21,528 sq ft) of office space and 2,000 sq m of space for other commercial uses (including retail and F&B).
This follows the government's announcement on June 10 that the 99-year leasehold site had been triggered from the reserve list of the first-half 2021 Government Land Sales Programme following a successful application from an unnamed developer that has committed to bid at least S$1.508 billion or S$1,379 per square foot per plot ratio (psf ppr) at tender.
BT reported on June 18 that an entity linked to Bursa Malaysia-listed IOI Properties Group has been tipped as the party that triggered the site.
IOI Properties has so far not commented on this. What could be the possible motivations for IOI Properties to trigger the release of the site?
Observers says one possibility is that the group is looking to move some money out of Malaysia.
Perhaps it also hopes to enlarge its presence in Singapore's Marina Bay locale.
The Marina View plot is near the site on which the group is developing the IOI Central Boulevard Towers, a predominantly office project. The development will have about 1.26 million sq ft of Grade A office space in two towers. It clinched the site at a state tender that closed in November 2016 and the project had been targeted for completion by 2022.
However, work has been delayed and industry observers say this is due to technical complexities in the project's construction and the Covid-19 outbreak, among other issues.
The S$1,379 psf ppr minimum bid price that IOI Properties has committed to bid for the Marina View plot is seen to be on the low side.
For instance, it is below the S$1,463 psf ppr fetched for a "residential with commercial at first storey" plot at the far end of the CBD, in Bernam Street in 2019; the plot is now being developed into the One Bernam project.
Of course, competition at the tender for the Marina View plot, which will close on Sept 21, can be expected to drive up the winning bid.
How far will IOI Properties go to clinch this site?
To boost its chances and better manage risks, the group will probably take a partner, or perhaps more than one partner - so long as it holds the majority.
IOI Properties' partners for its past projects in Singapore include Ho Bee (for two condo projects in Sentosa Cove) and City Developments (for the South Beach mixed-development project).
IOI had intended to take Hongkong Land as a 33 per cent partner for its Central Boulevard project after it secured the site, but the plan did not come to fruition.
The chances of Hongkong Land getting together with IOI again for the Marina View site would not be high, especially given that the site is slated for predominantly private housing and hotel development. Hongkong Land specialises in prime office and luxury retail property.
However, Hongkong Land's fully-owned subsidiary MCL Land is an established residential developer in Singapore. That said, MCL Land may be more inclined to partner City Developments Ltd (CDL). After all, the duo joined forces to bag two 99-year sites in a row at state tender closings in April and May this year.
CDL co-developed the maiden residential project in Marina Bay, The Sail@Marina Bay condo, on a plot that it clinched at a URA tender that closed in May 2002. It later roped in AIG as 50 per cent partner. So CDL may be keen on another condo project in the area. Moreover the group is experienced with developing hotels. Although the hotel business has been hit by the pandemic, CDL may still find it feasible to develop a hotel in the Marina Bay area on a longer-term investment horizon. When things improve, it could potentially offload the hotel to its sponsored hospitality trust.
CDL, if it decides to participate in the Marina View tender, may find no compelling reason to partner IOI Properties. The feeling may well be mutual.
As for Ho Bee, embarking on a big residential and hotel project in Singapore - may not fit into its current business strategy.
IOI Properties may have to find a new partner for its Marina View tender bid. This could be a Chinese developer already operating in Singapore.
Of course, there is no guarantee that IOI Properties (and its partner, whoever that may be) will emerge as the highest bidder at tender.
After all, some industry watchers point to the "triggerer's curse" for reserve list sites; it is said that the party that is successful in applying for a site's release seldom gets hold of the plot at the actual tender.
A case in point would be the Central Boulevard plot that IOI won in late 2016. BT had reported then that Nanshan was the party that had triggered the plot from the reserve list.
For the Marina View plot, the other bidders who could give IOI Properties a run for its money at the tender include the Ng family's Far East Organization and Sino Group (the latter owns two hotels nearby: The Fullerton and The Fullerton Bay).
Residential developer UOL Group, which also has a hotel subsidiary, Pan Pacific Hotels Group, may also be keen on the Marina View site. Other potential contenders include GuocoLand, Allgreen Properties and Pontiac Land Group.
And not to mention the Chinese developers operating here - including Qingjian Realty, MCC Land, Nanshan, Logan and CSC Land Group (a unit of China Construction (South Pacific) Development Co.
Word in the market is that there are new-to-Singapore property groups from China that are keen to embark on projects here.
Will IOI Properties suffer from the triggerer's curse for the Marina View site? Or will it prove to be an exception? One theory is that perhaps the group has no intention of clinching the Marina View site in the first place.
This is how one market watcher interprets IOI Properties' strategy: "Triggering the Marina View plot, and the resulting tender launch and close, all help to create some excitement about the locale. And this could help spark leasing deals at IOI Central Boulevard Towers."
Covid-19 relief measures for property sector extended for 6 months
The Business Times, 29 Jun 2021, Tue
By Leila Lai
THE Singapore government has extended temporary relief measures for property developers in view of the continued disruptions to construction timelines from the Covid-19 pandemic.
Developers will get six-month extensions to the construction timeline-related requirements for the Project Completion Period (PCP), Additional Buyer's Stamp Duty (ABSD) regime and Qualifying Certificate (QC) regime.
In a joint statement on Monday, the Ministries of National Development, Finance, Law and Trade and Industry said that although construction work has gradually resumed from August 2020, construction projects continue to face challenges.
"The sector may experience manpower shortages and further disruptions to construction timelines due to the tightening of border measures from April and May 2021 that limit the inflow of migrant workers," they said.
The latest extensions are in addition to temporary relief measures announced on May 6, 2020 and October 8, 2020. They do not alter the existing residential property market cooling measures, the ministries noted.
The PCP will be extended by six months for qualifying residential, commercial and industrial development projects.
Commencement and completion timelines for residential development projects will be extended by six months in relation to the remission of ABSD for qualifying household developers.
The extensions of these two measures will be granted to qualifying developers automatically, and no application is necessary.
The PCP will also be extended by six months for residential development projects under the QC regime for qualifying foreign housing developers.
Qualifying developers will need to write to the Singapore Land Authority's Land Dealings Approval Unit (LDAU) by Dec 1, 2021 to apply for this extension. Developers who already applied for and obtained an extension to their existing completion deadlines under the temporary relief measures announced on May 6, 2020 and October 8, 2020 will be automatically granted the additional six-month waiver of extension charges. LDAU will notify them of their new deadlines.
Temporary relief measures for property developers extended again due to Covid-19 disruptions
The Straits Times, 29 Jun 2021, Tue
By Kok Yufeng
Property developers here will be given an additional six months to complete residential, commercial and industrial projects in the light of disruptions to their manpower supply due to tightened border measures in April and May.
This comes after two six-month extensions that were announced in May and October last year.
Read more at: https://www.straitstimes.com/singapore/temporary-relief-measures-for-property-developers-extended-again-due-to-covid-19
Is there still a premium behind freehold property?
The Business Times, 28 Jun 2021, Mon
By Leslie Yee
DOES a property's land tenure matter? Judging by the material premiums paid by buyers for freehold units here, it apparently does.
A study of private non-landed residential transactions by researchers from the National University of Singapore's Institute of Real Estate and Urban Studies showed that freehold property in Singapore was sold at 10.4 per cent higher on the average per unit price than comparable leasehold properties.
This premium is calculated after controlling for property age, unit size, distance to MRT stations and expressways, and other unobserved planning region variations, the study published in The Business Times earlier this year showed. Such a premium exceeds the premium of 4 per cent for having a perpetual right of use relative to a use with a term of 99 years that the Singapore Land Authority (SLA) uses in computing land lease upgrading premiums.
But what drives buyers to pay a premium for freehold property and will such premiums be sustained going forward?
For context, new private home sales in Singapore have been strong. The charge is led by large scale developments sitting on initial land leases of 99-year land such as Treasure at Tampines, The Florence Residences and Normanton Park.
In Singapore, many sites for new developments are awarded through government land tenders.
Private residential and commercial development sites put up for tender by the Urban Redevelopment Authority and Housing Development Board typically have land leases of 99 years, while industrial land sold by JTC Corporation may have land leases of 20 years or 30 years.
For historical reasons, there are also land parcels that are being used for various purposes, which have freehold tenure or long leasehold tenures starting from 929 or 999 years that are akin to being freehold in nature.
A space user probably does not care too much about the land's tenure. A tenant takes up space and commits to a certain rental level based on factors such as location, unit specifications, building quality, and standards of maintenance and property management, while being indifferent to the land lease tenure
Singapore properties held by real estate investment trusts (Reits) listed here are also typically leasehold.
A Reit may prefer buying a commercial property with 70 years of land lease outstanding than a freehold one, which may cost more because of its freehold status.
If both properties generate the same net property income, the yield hungry Reit enjoys a better yield by buying the former.
As for new private homes, buyers appear fine with purchasing units on original land leases of 99 years, which may have a land lease outstanding of around 94 years by the time a purchaser takes possession of a unit. Having a land lease outstanding of 80 years should cover the entire life of an owner occupier who is in his twenties.
As private homes are costly, any savings on purchase price from buying leasehold units would be welcomed by owner occupiers and investors. For an investor, paying less for a leasehold unit, can mean that cash flow from rental income more easily covers the mortgage payments.
If home prices rise, owners of both leasehold and freehold units enjoy capital gains.
So why do buyers pay material premiums for freehold units?
Perhaps buyers worry over land lease decay. If outstanding land lease of a private home falls to 40 or 50 years, demand may drop as potential buyers could find it tricky securing financing from banks.
Yet, a counterpoint is that there are various examples of older leasehold residential projects that have been sold for redevelopment under a collective sale, with the buyer being able to top up the land lease to 99 years.
Such projects include large choice sites that used to house Housing and Urban Development Company homes such as Farrer Court (now D'Leedon), Tampines Court (now Treasures at Tampines) and Normanton Park (the new development keeps the name).
Outside of the residential space, subsidiaries of SingHaiyi, Chip Eng Seng and Hong Kong-listed Chuan Holdings jointly won the collective sale tender for Maxwell House at a price of S$276.8 million in May. Built in 1971, Maxwell House has a 99-year leasehold tenure starting from 1969.
The successful joint tenderers will obtain regulatory approval to redevelop the property into a mixed-use development with gross floor area of at least 21,746 square metres (sq m) and get a fresh 99 year lease.
For strata owners of older buildings, who are keen to exit via a collective sale, the running down of the land lease of a project could help pressure owners to sign up for a collective sale at a price where chances of success are high.
Freehold isn't forever
Still, there is no guarantee that authorities will extend a land lease.
In general, the government's policy is to allow leases to expire without extension. In land-scarce Singapore, the government needs to recover land upon lease expiry to re-allocate it to meet fast changing socio-economic needs.
Extensions of land leases from the state are considered on a case-by-case basis where they are in line with planning intention and help to further specific economic and social objectives.
Possibly, in a world full of volatility, owning something of freehold tenure gives a sense of security.
However, the government has a right to compulsorily acquire private land whether freehold or leasehold, without the willing consent of its owner, for public purposes.
In April, the SLA gazetted the acquisition of the 776 sq m plot of freehold land at 68 to 74 Thomson Road. The 57-year-old mixed-use building sitting on the plot will be demolished to allow excavation works for an upcoming North-South Corridor tunnel just metres away to begin safely.
Nonetheless, having freehold tenure may be a selling point with some foreign buyers. When I worked in Shanghai a few years ago, some well-heeled Chinese persons were envious that my employer was selling freehold homes in Singapore. Freehold tenure of residential units is unheard of in China where typically residential projects are sold on original land lease tenures of 70 years.
Freehold properties in Singapore would likely command premium pricing arising from scarcity, as the bulk of new supply comes from leasehold developments.
Rich families, who aspire to hand down wealth through the generations, may value handing ownership of freehold property from generation to generation.
Far East Organization (FEO), privately owned by the Ng family, has sold apartment units at a few projects such as The Scotts Tower in Orchard and The Shore Residences in Katong on 103-year land leases.
FEO keeps the freehold title of the land, which means that a future generation of the Ng family could potentially get another bite of the cherry to undertake a new development when the existing land lease expires.
Listed groups such as City Developments and GuocoLand, which have tycoons as major shareholders, have also sold long leases in non-residential properties with original 999-year or freehold titles.
So perhaps the allure of freehold properties lies in their being like family heirlooms that can be passed down through the generations as part of a family's legacy.