ERA Realty eyes 40% increase in revenue amid boom in property transactions
The Business Times, 16 Apr 2021, Fri
By Siow Li Sen
ERA Realty Network is on a roll, as it rides the momentum of the nation's gangbuster residential market.
The company, Singapore's second largest real estate agency is gunning for 40 per cent increase in revenue to S$550 million by early next year, in line with its 40th anniversary, senior executives said in an exclusive interview with The Business Times.
ERA Realty Network is the wholly owned subsidiary of mainboard-listed APAC Realty: CLN 0% which posted revenue of S$395.1 million for 2020, up 6.9 per cent.
The goal for this year is to have revenue of S$450 million, said Marcus Chu, ERA Singapore's chief operating officer.
To incentivise its army of almost 8,000 agents, ERA is offering a lucky draw prize, a Tesla Model 3 electric car worth about S$150,000 if it reaches the S$450 million figure, he said.
If revenue gets to S$550 million, which will be almost 40 per cent up over 2020's S$395.1 million, the grand prize is a penthouse unit in a condominium worth S$2 million, he said.
ERA's ambition is predicated on homes sales remaining strong, without the government cooling measures, and recruitment of more agents.
The biggest real estate agency here is PropNex with over 9,200 agents.
"We have to sell well, barring any cooling measures coming out," said Jack Chua, APAC Realty executive chairman and chief executive.
The Q1 2021 flash estimate for the private home price index released on April 1 has intensified talk of more cooling measures, as private home prices in the first quarter rose for a fourth straight quarter.
Singapore private home prices rose 2.9 per cent in Q1 from the previous quarter, according to latest flash estimates from the Urban Redevelopment Authority (URA). The price rise comes after a 2.1 per cent increase in the fourth quarter last year.
It was also the sharpest quarterly increase since the second quarter of 2018 when private residential prices rose by 3.4 per cent before property curbs hit in July that year.
Rather than dwell on what the government might do, Mr Jack Chua said that amid last year's challenging market, the agency was able to capture more market share.
It was appointed marketing agent to 24 projects with more than 7,200 new home units launched during 2020.
ERA's market share for all transactions - new sales, resales and rentals - in 2020 was 28 per cent, up from 26.6 per cent in 2019.
But ERA's estimated market share of the new homes segment fell to 28.9 per cent last year, from 29.6 per cent in 2019. Singapore's developers sold 10,940 private residential units (including executive condominiums) in 2020, an increase of 5 per cent from 10,417 units in 2019.
Mr Chua explained that the lower market share was due to the company telling its agents not to do deals which involved the re-issue of options to purchase (OTP). Seen mainly in the mega mass market projects, the re-issue of OTP was banned in September.
"The re-issue was a bit illegal, we encouraged our agents not to do it," he said.
Last September, the URA said developers could no longer re-issue options to purchase to the same buyer of the same unit within 12 months after the expiry of the earlier OTP, a practice which could inflate sales figures.
Following that directive, ERA's market share improved, Mr Chua said.
Of the 319 units sold at Ki Residences at Brookvale, ERA did 160 units (50.16 per cent); at Clavon, out of the 492 units sold, ERA's share was 220 units (44.72 per cent). Both Ki Residences at Brookvale and Clavon were launched in December.
Of the 522 units moved at Parc Central which had a January launch, ERA accounted for 239 units (45.79 per cent).
Based on market data, ERA ended 2020 with a 42.9 per cent share of the private residential and HDB resale market, up from 40.7 per cent in 2019.
This year, ERA has been appointed marketing agent for 24 residential projects with more than 8,800 units, he said.
To be clear, the top three agencies - PropNex, ERA and Huttons - are usually appointed to market most developments. While Singapore is ERA's biggest market, the group has been steadily expanding in the region, Mr Chua said.
There are many large potential markets outside Singapore, he said. ERA has a 100 per cent stake in ERA Indonesia, a 49 per cent stake in ERA Malaysia, it owns 80 per cent of ERA Thailand and 38 per cent of ERA Vietnam.
The group has 18,000 agents in its Asia Pacific network and the target is to reach 20,000 later this year.
URA, HDB launch Lentor Central, Tampines Street 62 GLS sites for tender
The Business Times, 16 Apr 2021, Fri
By Vivienne Tay
THE Urban Redevelopment Authority (URA) and the Housing & Development Board (HDB) on Thursday launched two sites at Lentor Central and Tampines Street 62 (Parcel A) for tender.
Both sites, which have a lease period of 99 years, fall under the confirmed list in the first half 2021 government land sales (GLS) programme. Together, they can yield about 1,195 residential units, URA and HDB said in a joint press statement.
Property analysts from Huttons, PropNex, JLL and ERA Realty expect eight to 13 bidders for the Lentor Central site and a top bid of around S$880 to S$1,050 price per square foot per plot ratio (psf ppr).
The URA parcel at Lentor Central, which is expected to yield about 605 units, has a site area of 17,279.9 square metres (sq m) and a maximum gross floor area (GFA) of 60,480 sq m. The plot is zoned for residential with commercial at the first storey use. The maximum building height is 35 metres Singapore height datum (SHD) in the low-rise zone, and 107 metres SHD in the high-rise zone.
Huttons Asia director of research Lee Sze Teck holds the view that the Lentor Central plot is "probably the best site" under the first half of 2021 GLS programme. He noted there will be pent-up demand as the last launch in the area was The Calrose in 2005.
"The commercial component will provide much-needed amenities to the area and future developments," he said.
JLL senior director of research and consultancy Ong Teck Hui expects bidding for the site to be "highly competitive", given the current market upswing, the attractiveness of the site, and the absence of new supply in the area.
As for the Tampines Street 62 site, property analysts estimate between six and 10 bidders, with a projected top bid of about S$550 to S$620 psf ppr.
The executive condominium (EC) site, projected to yield 590 units, has a site area of 23,799.2 sq m and a maximum GFA of 59,498 sq m. It is zoned for residential use and has a maximum building height of 63 to 64 metres SHD.
PropNex head of research and content Wong Siew Ying expects the site to garner keen interest from developers, given the popularity of ECs among Singaporean home buyers, particularly those looking to trade up from public housing.
Nicholas Mak, ERA Realty head of research and consultancy, said as sales momentum continue, some developers may run out of new residential properties for sale.
“Therefore, if the government does not increase the supply of residential land in the next GLS programme, land price will increase which will fuel further price growth in the property market,” he noted.
Both sites were carried over from the reserve list of the second half of 2020 GLS programme. Confirmed list sites are launched according to schedule regardless of demand. In contrast, a reserve list site is put up for tender when a developer makes an offer acceptable to the government.
The tender for the Lentor Central and Tampines Street 62 (Parcel A) plots will close at 12pm on July 22 at URA and HDB respectively.
New private home sales double in March as buyers snap up luxe condos
The Business Times, 16 Apr 2021, Fri
By Siow Li Sen
DEVELOPERS in Singapore sold 1,296 new private homes in March, double that of February's 645, with buyers snapping up luxury condos after a break during Chinese New Year.
Wealthy buyers are expected to continue to be in the focus as half of the new projects slated to launch this year are in the expensive core central region (CCR).
Singapore is the hot favourite among well-heeled investors and wealthy overseas buyers looking for trophy properties, said Christine Sun, OrangeTee & Tie, senior vice-president, research and analytics.
"Backed by the prospects of further price growth and a better leasing environment, foreign demand is expected to return gradually. We may see more luxury homes being sold in the coming months as more luxury properties are slated to be launched," added Ms Sun.
March's strong volume brings first-quarter 2021 sales to 3,574 units, the highest quarterly figure since the second quarter of 2013 where 4,538 units were sold, noted Lee Sze Teck, Huttons Asia director of research. With Q1 data out, some consultants have revised upwards full-year 2021 sales to between 9,000 to 10,000 units from 8,000 to 9,000.
This year's Q1 sales of 3,574 units "is even higher than the third quarter of 2020 when Singapore exited a 'circuit breaker' and saw pent-up demand driving sales to 3,517 units. Buyers flush with cash and seeking stability are investing in stable assets like properties," said Mr Lee.
In March, the number of transactions in the most expensive region, CCR, was 546 units or 42.1 per cent of new sales, an eight-year high. Sales in rest of central region (RCR) and outside central region (OCR) made up 388 (29.9 per cent) and 362 (27.9 per cent) respectively. CCR, RCR and OCR sales in February 2021 were 58, 325 and 262 respectively.
The high CCR sales which accounted for 42.1 per cent or 546 units for March were helped by transactions in Midtown Modern, RV Altitude and The M. The previous high in the CCR was in November 2013, where 668 units were sold. The 558-unit Midtown Modern saw 368 homes or 66 per cent move at a median price of S$2,726 per square foot (psf). RV Altitude sold 77 units.
The figures - released by the Urban Redevelopment Authority (URA) on Thursday - exclude executive condominium (EC) units, which are a public-private housing hybrid. Including the 77 ECs sold, developers shifted 1,373 new homes in March, up 82 per cent from February and a 52 per cent increase from a year ago.
While March buyers mainly snapped up condos in the CCR, they went for the smaller, lower-priced units. Median home prices transacted in the CCR averaged S$1.66 million last month, said Goh Jia Ling, CBRE, South-east Asia manager, research.
Mr Lee said 44 per cent of the transactions in March were priced below S$1.5 million, 32.9 per cent were between S$1.5 million and S$2 million and 23.1 per cent were above S$2 million. Some 82.2 per cent of purchases were by Singaporeans, with permanent residents and foreigners making up 13.4 per cent and 4.3 per cent, respectively. There were 10 purchases by Singaporeans for properties priced S$5 million and above. In contrast, there were only two such purchases by foreigners.
Following Q1 2021's performance, coupled with increasing confidence from recovering economies, some consultants think full-year sales could top 10,000 units.
Advance estimates this week showed a slightly positive gross domestic product growth of 0.2 per cent year-on-year in Q1 2021, with full-year growth likely to exceed the upper end of the official 4-6 per cent forecast range.
Said Ismail Gafoor, CEO of PropNex: "In view of the brisk sales in Q1 2021 - at a total of 3,574 units (up by about 58 per cent year-on-year) - we now project private new home sales to likely cross 9,000 units for the whole of 2021, barring any new cooling measures being rolled out."
Despite last year being Singapore's worst-ever recession, a Knight Frank Wealth Report 2021 showed that the number of ultra-high net worth individuals (UHNWI) in Singapore rose 10.2 per cent or by 345 to 3,732 in 2020, said Leonard Tay, Knight Frank Singapore head of research. The report, released last month, defines UHNWIs as those with net worth of at least US$30 million, including their primary residence.
In tandem with Singapore's attractiveness among family offices, it was observed that both foreign and local homebuyers were looking to penthouses or units with more than 3,000 square feet, according to Mr Tay.
"With the limited availability of newly launched penthouses in previous months, penthouses in the resale market were sought-after by these UHNWIs who place greater priority on quality and living spaces," he added.
Now with more upcoming launches in the CCR, UHNWIs will have more choice when hunting for new units with large sizes.
He also noted that "notwithstanding the fall in median monthly household income from work in 2020, there has nevertheless been growth in this household income over the past 10 years (from 2010 to 2020) by almost 45 per cent, outpacing the 12.8 per cent increase in private residential prices over the same period."
Assuming that no new measures are announced or there is an unexpected resurgence of community infections of Covid-19 that could unhinge demand, there is every chance that the primary market would chalk up around 10,000 new sales in 2021, said Mr Tay.
Singapore property investment market to return to pre-Covid-19 levels in quarters ahead: Colliers
The Straits Times, 16 Apr 2021, Fri
By Michelle Ng
Property investment sales in Singapore are expected to return to pre-Covid-19 levels over the next three quarters of the year as investor sentiments continue to improve amid economic growth and stability, said real estate consultancy Colliers in a report on Thursday (April 15).
Real estate investment sales rose 25.8 per cent in the first quarter of this year, posting a year-on-year increase of 47.9 per cent to $3.8 billion. The figure excludes mergers and government land sales.
Read more at: https://www.straitstimes.com/business/property/singapore-property-investment-market-expected-to-return-to-pre-covid-19-levels
HK's Shun Tak to launch debut Singapore residential project
The Business Times, 16 Apr 2021, Fri
By Nisha Ramchandani
SHUN Tak Holdings' maiden residential development in Singapore, Park Nova, could gain traction with well-heeled buyers - especially from North Asia - as the project readies for launch amid improving sentiment.
Located in prime District 10, the super luxury freehold development at 18 Tomlinson Road has 54 units in the 21-storey residential tower. The units range in size from 1,432 square feet (sq ft) for a two-bedroom plus study to 5,899 sq ft for a penthouse.
The showflat will be open for preview on May 1, and is by appointment only, the developer said.
The Hong Kong-listed conglomerate acquired the site (formerly Park House) via collective sale with an aggressive bid of S$375.5 million, it was reported in mid-2018. This worked out to S$2,910 psf ppr.
Nicholas Mak, head of research and consultancy at ERA Realty, said: "With their maiden residential project, Shun Tak appears to be branding themselves in the super high-end segment, given the location and the size of the units." ERA is one of the marketing agents for the project.
Mr Mak added: "The project could see a higher than usual proportion of foreign buyers (including PRs) where over 30 per cent of the buyers could be foreigners."
Analysts said that Shun Tak's network -- as well as its track record in China, Hong Kong and Macau - should help attract buyers from North Asia.
Savills' executive director (research & consultancy) Alan Cheong reckons the timing to launch the project is opportune since momentum has been building for the super high-end segment of the property market.
Edmund Tie & Company's senior director of research and consulting, Lam Chern Woon, said Singapore's successful efforts at containing the pandemic could entice affluent foreign buyers to invest in the private residential market here.
Noting the improved sentiment, Mr Lam said it is a fairly good time for the developer to push ahead with the launch, should a second wave of Covid-19 cases or property cooling measures crop up later.
Dominic Lee, head of PropNex's luxury team, expects Park Nova to appeal to buyers, especially ultra-high- net-worth individuals. PropNex is also a marketing agent for Park Nova.
Mr Lee said: "In our view, there is currently a dearth of supply of such units in the market and Park Nova will certainly fill that gap. Despite the border control measures, we are quite confident there would be sales at Park Nova. There are enough buyers, including Chinese buyers in Singapore, to create demand."
One market watcher suggested that Park Nova units could be offered for sale upwards of S$4,200 psf, while Mr Cheong put the figure at likely over S$4,500 psf. PropNex projects that prices could "hover around the S$5,000 psf" range, citing the project's luxe finishings and other transactions in the area.
Other projects for sale in the vicinity include the 154-unit Boulevard 88; 77-unit 3 Orchard By-The-Park; and 96-unit 3 Cuscaden.
Based on data from ERA which drew from URA caveats, the median unit price for transactions at 3 Cuscaden between July 2020 and March 2021 was S$4,053 psf. The median unit price for transactions during the same time frame at Boulevard 88 and 3 Orchard By-The-Park were S$3,696 psf and S$3,449 psf respectively.
According to Shun Tak's FY19 annual report, Park Nova was initially scheduled for launch in 2020 before the pandemic struck.
Market watchers suggested that the pandemic and the impact on construction activity, coupled with the property cooling measures back in July 2018, could have pushed the launch into 2021.
Shun Tak first annnounced it was acquiring the site back in June 2018, weeks before the Singapore government rolled out cooling measures which resulted in a softening in the property market. Then, its founder, casino tycoon Stanley Ho, died in May 2020.
Savills' Mr Cheong reckons that Shun Tak could have also been taking time to fine-tune the architectural plans.
Pansy Ho, managing director of Shun Tak, said: "We have been exploring investment opportunities beyond our home base of Greater China, with the acquisition of two residential projects and one commercial development. Our confidence in the Singapore market is at an all-time high and we are paving the way for future developments in the region."
Park Nova, slated for completion in 2023, is within walking distance of Orchard Boulevard MRT station on the Thomson-East Coast line, and close to Orchard Road and the Botanic Gardens. Facilities include a clubhouse, swimming pools, a gym and a sky terrace.
Not far from Park Nova, Shun Tak is developing the 14-unit luxury Les Maisons Nassim in the posh Nassim Road area as well as developing No 9 Cuscaden Road into a five-star hotel with at least 142 rooms.
According to Shun Tak's FY20 interim report, Les Maisons Nassim is expected to be launched in 2021 and completed in 2022.
Due to the pandemic, construction of the hotel "is expected to be delayed by approximately six months, with completion expected in early-2022 and planned opening in mid-2022," Shun Tak said in the interim report, adding that the hotel will be managed by the Artyzen Hospitality Group.
It also owns 111 Somerset in Somerset Road.