New Reporter
21-07-23, 11:26
Hotel deals, new condo launches, and tax takings
Tue, Jul 11, 2023
Updated Thu, Jul 20, 2023
COMMERCIAL markets in major cities in the US and elsewhere are not in good shape. Demand for office space shrank as remote working took hold, and malls suffered from consumers’ migration to online retail. Yet, in Singapore, landlords have largely been spared. In The Level Ground, Leslie Yee writes that there are factors specific to Singapore that help drive long-term demand for office and retail space here, which ensures that quality assets stay relevant and in demand.
German asset manager Union Investment put its Singapore property on the market last week. VisionCrest Commercial along Penang Road is up for sale at a guide price of over S$470 million. The freehold building is part of a mixed-use strata subdivided complex developed by Wing Tai on the former Cockpit Hotel site. Union Investment Real Estate plans to distribute returns to its investors and recycle capital within the Asia-Pacific region.
UOL Group sold its Parkroyal on Kitchener Road hotel for S$525 million, in a deal that came as a surprise. The sale to an entity of Worldwide Hotels, the owner of Hotel 81 in Singapore, marked the biggest single-asset hotel transaction in Singapore and the second-biggest in Asia-Pacific in 2023. At 24 per cent above the property’s latest valuation of S$423 million, the sale will yield a massive divestment gain for UOL. Are more disposals to come in the name of the group’s “reconstitution of its overall property portfolio”?
In a different sector of the hospitality market, the owners of Link Hotel staved off a forced sale of the Tiong Bahru boutique property. Hang Huo Investment bagged financing to repay a S$51 million loan owed to DBS, and the hotel, put up for sale by receivers, has been taken off the market.
Outside of Singapore, hospitality assets continue to draw attention. City Developments Ltd bought a hotel in Myeongdong, Seoul, for 140 billion won (S$143.9 million) from a Korean Reit. The acquisition comes after CDL sold its Millennium Hilton Seoul in 2022, along with an adjoining land site, for 1.1 trillion won.
In the housing market, buyers are biding their time. Price resistance seems to be building up in the HDB resale sector. Transaction volume fell 18 per cent in June as overall prices inched up by 0.6 per cent. Aside from the school holiday seasonal lull, resale volume was 13 per cent lower than in the same month last year. A flood of new supply in upcoming BTO launches is expected to erode resale demand further.
Two 99-year-leasehold condominium projects opened for sale last week. Lentor Hills Residences, the second new project in the Lentor area to be launched so far, sold 298 or half of its 598 units over its launch weekend. The average price of units sold was S$2,080 per square foot (psf). Over the same weekend, City Developments Ltd sold 110 units of The Myst in Upper Bukit Timah, some 27 per cent of the project’s 408 units, at an average price of S$2,057 psf.
Two more new projects will be booking sales this weekend: SingHaiyi’s Grand Dunman and UOL’s Pinetree Hill. Grand Dunman is the third - and largest - condo to be marketed in the East Coast area within four months. Agencies expect average pricing for Grand Dunman to come in under S$2,500 psf. That compares to The Continuum’s S$2,732 psf average at the launch of the freehold project in May, and Tembusu Grand’s April launch average of S$2,465 psf.
Pinetree Hill, meanwhile, would be the first condo launch in the Pandan Valley area in nearly 15 years. Pricing starts at S$2,236 psf. Nearby, owners at the 660-unit Pine Grove are attempting to band together for another go at an en bloc sale. Their last attempt in 2019 pitched the 890,000 sq ft site at a reserve price of S$1.86 billion.
A plot of state land next to Pinetree Hill will come up for tender in August, under the government land sales programme. The 2.5 hectare site can accommodate 565 units. No doubt developers will be keeping an eye on the launch of Pinetree Hill to gauge prospects for the second Pine Grove parcel.
Slower sales across property segments in Singapore weighed on government revenue in its latest fiscal year. Collection of stamp duty, a transaction tax levied on all sales and rental transactions, fell 12 per cent to S$5.95 billion for the year to March 2023. The biggest fall in the volume of transactions during the period was in private property, where sales fell 33 per cent from 30,800 units transacted to 20,688 units.
Despite the decline in sales volume after successive rounds of cooling measures, property prices stayed relatively firm and rents remain high, propping up annual values. Accordingly, the government’s property tax takings ended the fiscal year 3 per cent higher. Property tax rates also went up from January 2023, and a further hike in tax rates is due in January 2024.
With markets expected to moderate all round this year, number crunchers reckon stamp duty and property tax takings could decline further.
https://www.businesstimes.com.sg/property/hotel-deals-new-condo-launches-and-tax-takings
Tue, Jul 11, 2023
Updated Thu, Jul 20, 2023
COMMERCIAL markets in major cities in the US and elsewhere are not in good shape. Demand for office space shrank as remote working took hold, and malls suffered from consumers’ migration to online retail. Yet, in Singapore, landlords have largely been spared. In The Level Ground, Leslie Yee writes that there are factors specific to Singapore that help drive long-term demand for office and retail space here, which ensures that quality assets stay relevant and in demand.
German asset manager Union Investment put its Singapore property on the market last week. VisionCrest Commercial along Penang Road is up for sale at a guide price of over S$470 million. The freehold building is part of a mixed-use strata subdivided complex developed by Wing Tai on the former Cockpit Hotel site. Union Investment Real Estate plans to distribute returns to its investors and recycle capital within the Asia-Pacific region.
UOL Group sold its Parkroyal on Kitchener Road hotel for S$525 million, in a deal that came as a surprise. The sale to an entity of Worldwide Hotels, the owner of Hotel 81 in Singapore, marked the biggest single-asset hotel transaction in Singapore and the second-biggest in Asia-Pacific in 2023. At 24 per cent above the property’s latest valuation of S$423 million, the sale will yield a massive divestment gain for UOL. Are more disposals to come in the name of the group’s “reconstitution of its overall property portfolio”?
In a different sector of the hospitality market, the owners of Link Hotel staved off a forced sale of the Tiong Bahru boutique property. Hang Huo Investment bagged financing to repay a S$51 million loan owed to DBS, and the hotel, put up for sale by receivers, has been taken off the market.
Outside of Singapore, hospitality assets continue to draw attention. City Developments Ltd bought a hotel in Myeongdong, Seoul, for 140 billion won (S$143.9 million) from a Korean Reit. The acquisition comes after CDL sold its Millennium Hilton Seoul in 2022, along with an adjoining land site, for 1.1 trillion won.
In the housing market, buyers are biding their time. Price resistance seems to be building up in the HDB resale sector. Transaction volume fell 18 per cent in June as overall prices inched up by 0.6 per cent. Aside from the school holiday seasonal lull, resale volume was 13 per cent lower than in the same month last year. A flood of new supply in upcoming BTO launches is expected to erode resale demand further.
Two 99-year-leasehold condominium projects opened for sale last week. Lentor Hills Residences, the second new project in the Lentor area to be launched so far, sold 298 or half of its 598 units over its launch weekend. The average price of units sold was S$2,080 per square foot (psf). Over the same weekend, City Developments Ltd sold 110 units of The Myst in Upper Bukit Timah, some 27 per cent of the project’s 408 units, at an average price of S$2,057 psf.
Two more new projects will be booking sales this weekend: SingHaiyi’s Grand Dunman and UOL’s Pinetree Hill. Grand Dunman is the third - and largest - condo to be marketed in the East Coast area within four months. Agencies expect average pricing for Grand Dunman to come in under S$2,500 psf. That compares to The Continuum’s S$2,732 psf average at the launch of the freehold project in May, and Tembusu Grand’s April launch average of S$2,465 psf.
Pinetree Hill, meanwhile, would be the first condo launch in the Pandan Valley area in nearly 15 years. Pricing starts at S$2,236 psf. Nearby, owners at the 660-unit Pine Grove are attempting to band together for another go at an en bloc sale. Their last attempt in 2019 pitched the 890,000 sq ft site at a reserve price of S$1.86 billion.
A plot of state land next to Pinetree Hill will come up for tender in August, under the government land sales programme. The 2.5 hectare site can accommodate 565 units. No doubt developers will be keeping an eye on the launch of Pinetree Hill to gauge prospects for the second Pine Grove parcel.
Slower sales across property segments in Singapore weighed on government revenue in its latest fiscal year. Collection of stamp duty, a transaction tax levied on all sales and rental transactions, fell 12 per cent to S$5.95 billion for the year to March 2023. The biggest fall in the volume of transactions during the period was in private property, where sales fell 33 per cent from 30,800 units transacted to 20,688 units.
Despite the decline in sales volume after successive rounds of cooling measures, property prices stayed relatively firm and rents remain high, propping up annual values. Accordingly, the government’s property tax takings ended the fiscal year 3 per cent higher. Property tax rates also went up from January 2023, and a further hike in tax rates is due in January 2024.
With markets expected to moderate all round this year, number crunchers reckon stamp duty and property tax takings could decline further.
https://www.businesstimes.com.sg/property/hotel-deals-new-condo-launches-and-tax-takings