UOL places top bid of S$329m for residential site at Dakota Crescent

http://www.channelnewsasia.com/stori...003652/1/.html

UOL places top bid of S$329m for residential site at Dakota Crescent

By Yasmine Yahya, 938LIVE | Posted: 08 September 2009 1915 hrs


SINGAPORE: UOL Development has put in the top bid of S$329 million for a residential site at Dakota Crescent.

UOL's bid translates to about S$495 per square foot for the site, which spans about 183,000 square feet.

Property consultancy CBRE said the bid price is over 150 per cent higher than the reserve price of S$130 million.

At this price, CBRE said the upcoming residential project could be sold for between S$1,000 and S$1,100 per square foot.

The site was launched for public tender in August on a 99-year lease.

The second highest bid for the site, at S$312 million, came from First Changi Development, while Frasers Centrepoint placed a bid of about S$300 million.

Lippo Estates submitted the lowest bid of S$169 million.

The Urban Redevelopment Authority received 13 bids in all. - 938LIVE/vm

Bull run!!!!!

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Originally Posted by mr funny

http://www.channelnewsasia.com/stori...003652/1/.html

UOL places top bid of S$329m for residential site at Dakota Crescent

By Yasmine Yahya, 938LIVE | Posted: 08 September 2009 1915 hrs


SINGAPORE: UOL Development has put in the top bid of S$329 million for a residential site at Dakota Crescent.

UOL's bid translates to about S$495 per square foot for the site, which spans about 183,000 square feet.

Property consultancy CBRE said the bid price is over 150 per cent higher than the reserve price of S$130 million.

At this price, CBRE said the upcoming residential project could be sold for between S$1,000 and S$1,100 per square foot.

The site was launched for public tender in August on a 99-year lease.

The second highest bid for the site, at S$312 million, came from First Changi Development, while Frasers Centrepoint placed a bid of about S$300 million.

Lippo Estates submitted the lowest bid of S$169 million.

The Urban Redevelopment Authority received 13 bids in all. - 938LIVE/vm

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Is the government serious about stablizing the property market? Very soon, we will be seeing the launch of condo at $1xxx psf in Geylang area:rolleyes:

They talk about high property price but if URA continue to sell land at such prices and at such rate, who will benefit in the end? No wonder they are also saying it is time to release more land.

Ah gong will never sell land in bad times. MBT is making use of an excuse to start land sales again. Developers got no choice but to buy high and sell higher. Who suffer?

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Originally Posted by Property_Owner

Ah gong will never sell land in bad times. MBT is making use of an excuse to start land sales again. Developers got no choice but to buy high and sell higher. Who suffer?

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If they release more land at high time that will be in time for the next round of performance bonus eveluation :spliff2:

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Originally Posted by Lucas

Is the government serious about stablizing the property market? Very soon, we will be seeing the launch of condo at $1xxx psf in Geylang area:rolleyes:

They talk about high property price but if URA continue to sell land at such prices and at such rate, who will benefit in the end? No wonder they are also saying it is time to release more land.

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Why do some people want the property market to "stabilise"?

Early this year, the property market was very very bad. It did not just "stabilised", in fact it "crashed".

Wasn't "crashed" better than "stabilised"?

Wasn't "crashed" an even better time to buy properties than "stabilised"?

If they had bought a property early this year when the market was in free fall, then they would want the property market to go up, instead of down.

However, if they did not buy even when the market "crashed", then what is the rationale of wanting the property market to "stabilise"?

What do they intend to do when the market "stabilises"?

http://www.businesstimes.com.sg/sub/...49389,00.html?

Published September 9, 2009

Bids for Dakota Crescent plot soar above expectations

UOL Group bid tops 12 others as developers vie for choice piece of land

By KALPANA RASHIWALA


(SINGAPORE) The result of yesterday's tender for a plum condo plot at Dakota Crescent shows just why the government recently raised the 'definite possibility' that it will restart confirmed list land sales from next year.

A total of 13 bids were received, reflecting developers' voracious appetite for mass-market and mid-tier private housing land.

The top bid from UOL Group was above market expectations of about $420-450 per square foot per plot ratio (psf ppr) just a few days ago. UOL's price yesterday was slightly more than $329 million or about $508 psf ppr - just 3 per cent shy of the $524 psf ppr that Ho Bee and NUTC Choice Homes paid during the peak in June 2007 for the plot next door on which they are developing Dakota Residences, which has achieved an average selling price of about $970-980 psf.

However, after taking into account changes in planning regulations since then, whereby planter boxes and bay windows are not exempted from gross floor area calculations, UOL's bid yesterday is probably higher than the equivalent 2007 bid for the next-door plot, some market watchers say.

BT understands that UOL is gunning for a high proportion of smaller units in its proposed scheme, and thus push for a higher average selling price of about $1,000-1,050 psf. 'They should be able to achieve this kind of psf price - so long as they keep the absolute price quantum within an affordable range,' an industry observer said.

BT understands UOL's breakeven cost will be about $920 psf.

When contacted, UOL chief operating officer Liam Wee Sin said the group plans to build about 550-600 units, with at least half likely to be two-bedroom apartments. The 18-storey project will be launch-ready around mid-2010, he added.

Analysts felt that most bidders would not build a basement in their scheme for the site to minimise construction costs given the marine soil on the site, which fronts Geylang River.

Said Mr Liam: 'Our bid assumptions were based on current pricing. And this is one of the more choice plots on the current Government Land Sales Programme.'

'UOL's Singapore residential development business has grown to be a very important growth engine for the group. And having successfully launched two projects this year - Meadows @ Peirce and Double Bay Residences - we need to acquire more land to sustain this growth-engine,' Mr Liam added.

The group will continue to be on the lookout for more residential sites in Singapore, he added.

Analysts note that the supply pipeline for mass-market homes, particularly those on 99-year sites bought at state tenders, has dwindled rapidly in the past six months, aided by the suspension of the confirmed list state land sales since October last year and strong home buying in this segment since February.

Credo Real Estate managing director Karamjit Singh said: 'The rally in the mass and mid-tier markets probably has another one-and-a-half or two years to run - assuming there's no intervention by government to cool demand or any negative external factors coming into play. That's something that developers are beginning to appreciate, which is why the participation rate at today's tender is very high,' he added.

'The bottomline is that $508 psf ppr is still a very viable proposition for the developer as the site has qualities that appeal to this segment of the market - proximity to an MRT station and amenities,' Mr Singh added.

UOL's $508 psf ppr bid was 5.4 per cent higher than the next highest offer by GuocoLand of almost $482 psf ppr. Frasers Centrepoint bid about $462 psf ppr. Four other bids were above $400 psf ppr.

A unit of Lippo group posted the lowest bid of $247 psf ppr. The highest bid was 2.53 times the minimum price of $200.74 psf ppr for the plot, which is from the government's reserve list. Such sites are launched for tender only if there is a successful application by a developer with an undertaking of a minimum offer acceptable to the state.

Confirmed list sites on the other hand are launched for tender according to scheduled dates, which could translate to more residential property launches.

By some estimates, developers have raised prices of mass-market projects by about 10-15 per cent from the January-February lows.

http://www.businesstimes.com.sg/mnt/...ender9_pg1.jpg

http://www.straitstimes.com/Money/St...ry_427255.html

Sep 9, 2009 Wednesday

Dakota Crescent site in high demand

Plot attracts 13 offers; top bid of $329m far exceeds trigger price

By Joyce Teo


IN A further sign of relentless demand for residential properties, a land parcel at Dakota Crescent has drawn 13 bids and a higher-than-expected top bid of $329 million.

The highest bid for the 99-year leasehold site next to the planned Dakota MRT station came from UOL, which offered $508 per sq ft of gross floor area. This was way above the trigger price of $130 million, or $201 psf of gross floor area for the reserve list site.

And it exceeds analysts' expectations of between $350 and $370 psf of gross floor area for the site that fronts the Geylang River.

It approaches levels set around the peak of the market boom in June 2007 when Ho Bee Investment paid $524 psf per plot ratio for its Dakota Residences site. It launched its condo last year at an average price of about $970 psf.

Other developers keen to acquire the Dakota Crescent plot included Guoco-Land, Ho Bee which tied with NTUC Choice Homes, Sim Lian Land, Keppel Land, Allgreen Properties and Teambuild Properties. The lowest bid came from Lippo Estates. It was $160 million, or $247 psf of gross floor area.

Reserve list sites are put up for tender only if developers indicate an interest by committing to a minimum acceptable bid.

'The message is quite clear. The results show that developers are still hungry for land,' said Colliers International executive director (investment sales) Ho Eng Joo.

Restarting the confirmed list sales - with sites tendered out on a fixed schedule, without preconditions such as developer expressions of interest - now looks more likely, he said. Confirmed list sales were halted by the Government last October when the property market was in the doldrums.

Developers largely stopped buying land until recently. The first state plot to be launched for sale in a year - in Bukit Panjang - attracted 13 bids last month, a number that an analyst described as impressive.

DTZ's head of SEA Research Chua Chor Hoon said: 'The high number of bids and closeness of the top bid to the price of the other Dakota site sold in June 2007 reflect a strong demand among developers for sites.

'The Government is likely to put on some confirmed list sites, and also expand on the reserve list.'

UOL's bid will likely translate into a break-even price of about $850 psf to $900 psf for the condominium project to be built on the site, said CBRE Research executive director Li Hiaw Ho.

Based on this estimate, the final selling price could range from $1,000 psf to $1,100 psf, he added.

Recent caveats of the next-door Dakota Residences show that deals were concluded at prices ranging from $830 psf to $930 psf. Resale transactions of five-room and executive HDB flats in Dakota Crescent and Pine Close have come in at between $550,000 and $620,000.

'The optimistic bid reflects developers' confidence in mid-tier residential projects in the fringe areas with immediate MRT access,' Mr Li said.

The site, he added, is within walking distance of the Dakota MRT station and overlooks the landed housing estate in Katong along Goodman and Wilkinson roads.

[email protected]

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Originally Posted by jlrx

Why do some people want the property market to "stabilise"?

Early this year, the property market was very very bad. It did not just "stabilised", in fact it "crashed".

Wasn't "crashed" better than "stabilised"?

Wasn't "crashed" an even better time to buy properties than "stabilised"?

If they had bought a property early this year when the market was in free fall, then they would want the property market to go up, instead of down.

However, if they did not buy even when the market "crashed", then what is the rationale of wanting the property market to "stabilise"?

What do they intend to do when the market "stabilises"?

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I think the words "stabilise" are for those who missed the boat. Not that I caught mine... Well if you keep waiting you will never catch any boat?

The next trough is usually not going to be as low at the previous trough.

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Originally Posted by echotrain

I think the words "stabilise" are for those who missed the boat. Not that I caught mine... Well if you keep waiting you will never catch any boat?

The next trough is usually not going to be as low at the previous trough.

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I disagree, everyday the news is changing. Now the minister is cautioning against a double dip recession. The number of developments TOP-ing don't add up to number of potential residents. Trough may change when tenants can't be found to service loans or if interest rates shoot up.

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Originally Posted by zimmer

The number of developments TOP-ing don't add up to number of potential residents.

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Then all the more reason why prices will shoot to the sky.

The number of developments TOP-ing is just in the tens of thousands; but the number of potential residents is in the billions.

China: 1,330,044,544.

India: 1,147,995,904.

They come, move into HDB flats, then Singaporeans sell them the HDB flats, take the profits, and upgrade to condos.

Some of the richer immigrants even bypass HDB flats and move directly into condos and bungalows.

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Originally Posted by zimmer

I disagree, everyday the news is changing. Now the minister is cautioning against a double dip recession. The number of developments TOP-ing don't add up to number of potential residents. Trough may change when tenants can't be found to service loans or if interest rates shoot up.

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I agreed with you, come Dec 09 when all the projects TOP, it is going to have big problem for them as:

Can't find tenant

Can't find buyer

Can't service the loan

Interest rate go up

Only way is to lelong to attract buyer, better sell now before the rest TOP.

If there is really the 'W' recovery then will be just to bad for those that bought recently.....really can die.....:banghead: :banghead: :banghead:

That was what people said in early 2009. So they waited...

But I guess nobody knows. Tharman said possible dip. On the same day Fed says US coming out of the woods. If predictions are so accurate we wouldn't be where we are now.

Also I notice something else. When times were bad early 2009, prices were lower BUT there were very few units on sale and very few launches. Hence even of you are ready to buy, there might not be ideal units available.

Just buy what you can afford. If you can hold for 1-2 years I think it is pretty safe.

I will normally chart the historical prices of a development and those around it. There are undervalued ones now still. Hint is that they are not at the mass market developments. Look closer to town..

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Originally Posted by Honesty

I agreed with you, come Dec 09 when all the projects TOP, it is going to have big problem for them as:

Can't find tenant

Can't find buyer

Can't service the loan

Interest rate go up

Only way is to lelong to attract buyer, better sell now before the rest TOP.

If there is really the 'W' recovery then will be just to bad for those that bought recently.....really can die.....:banghead: :banghead: :banghead:

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Originally Posted by Honesty

Can't find tenant

Can't find buyer

Can't service the loan

Interest rate go up

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Let me address each of the "Can'ts" above.

1. For newly TOP residential properties, it's impossible to "Can't find tenant". It is just a matter of price. Even in bad times, by lowering the asking price to an attractive level, you will be able to pull tenants who are currently staying at older properties and perhaps paying the same or higher rental.

For commercial properties, it's possible to "Can't find tenant" if the location is bad and at some obscure corner of the building. However, for residential properties, there will always be tenants although some may not be desirable, such as the oldest profession in the world.

2. "Can't find buyer" is possible if the market turns bad, unless you are prepared to accept a loss.

3. "Can't service the loan" is quite unlikely given the current interest rates. My SIBOR loans are all around one-point something percent. The rentals are more than enough to pay the installments (principal + interest)! Which means every month my tenant is helping me pay off my properties. :scared-4: Even if the rental drops further, there is still room.

4. Which brings us to the most important question "Interest rate go up" ... If the government squeezes this trigger, there will be blood, lots of blood ... not just the blood of property investors, but many innocent victims and bystanders.

Will the government squeeze the "interest rate" trigger before the economy recovers? I don't think so. I believe those people who queued up for condos also don't think so.

By the time the economy recovers and the government wants "Interest rate go up" ... property prices will be over the moon already.

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Originally Posted by jlrx

Let me address each of the "Can'ts" above.

1. For newly TOP residential properties, it's impossible to "Can't find tenant". It is just a matter of price. Even in bad times, by lowering the asking price to an attractive level, you will be able to pull tenants who are currently staying at older properties and perhaps paying the same or higher rental.

For commercial properties, it's possible to "Can't find tenant" if the location is bad and at some obscure corner of the building. However, for residential properties, there will always be tenants although some may not be desirable, such as the oldest profession in the world.

2. "Can't find buyer" is possible if the market turns bad, unless you are prepared to accept a loss.

3. "Can't service the loan" is quite unlikely given the current interest rates. My SIBOR loans are all around one-point something percent. The rentals are more than enough to pay the installments (principal + interest)! Which means every month my tenant is helping me pay off my properties. :scared-4: Even if the rental drops further, there is still room.

4. Which brings us to the most important question "Interest rate go up" ... If the government squeezes this trigger, there will be blood, lots of blood ... not just the blood of property investors, but many innocent victims and bystanders.

Will the government squeeze the "interest rate" trigger before the economy recovers? I don't think so. I believe those people who queued up for condos also don't think so.

By the time the economy recovers and the government wants "Interest rate go up" ... property prices will be over the moon already.

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i am not so sure about all the Can'ts ...


take the new TOPs like Rivergate and Devonshire or whatever suite at kiliney area ...

at 1200-1700 psf do you realise how much is the mortgage with 80 pct loan ?

the rental is barely enuff ..and they have not added the maintenance, property tax, rental income tax ..

if a tenant signs 3 yrs lease and even if psf goes up .. who would want to pay at 1700-2000 psf if the rent is 4.5k for a 1 bedroom and 6.0-6.5k for a 3 bedroom ? the rental does not justify the price ..

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Originally Posted by proud owner

i am not so sure about all the Can'ts ...


take the new TOPs like Rivergate and Devonshire or whatever suite at kiliney area ...

at 1200-1700 psf do you realise how much is the mortgage with 80 pct loan ?

the rental is barely enuff ..and they have not added the maintenance, property tax, rental income tax ..

if a tenant signs 3 yrs lease and even if psf goes up .. who would want to pay at 1700-2000 psf if the rent is 4.5k for a 1 bedroom and 6.0-6.5k for a 3 bedroom ? the rental does not justify the price ..

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Rivergate and Illuminaire on Devonshire are still around $1700 psf. The mid-tier and prime markets haven't moved up as much as suburban.

So for a 1,000 sf 2-bedroom apartment, that's around $1.7 million and 80% loan will be $1.36 million.

Interest rate is now around 1.5% if pegged to SIBOR so that's $20,400 per year (excluding principal which by right you should be paying yourself), or $1,700 per month, which is the rental rate of some HDB flats.

A prime 2-bedroom should be able to fetch around $5k per month. So quite profitable and there is still room for manoeuvre even if rental falls further.

The only danger is if the government squeezes the "interest rate" trigger and raises interest rate. That will really spill blood all over the place. :scared-2:

I am quite confident Tharman won't dare to do that. To raise interest rates to kill property investors is like sending a bull into a china shop to chase after a rat. :scared-2:

That's why he is now trying to emulate the Australian way of cooling down the market, i.e. talk.

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Originally Posted by jlrx

Rivergate and Illuminaire on Devonshire are still around $1700 psf. The mid-tier and prime markets haven't moved up as much as suburban.

So for a 1,000 sf 2-bedroom apartment, that's around $1.7 million and 80% loan will be $1.36 million.

Interest rate is now around 1.5% if pegged to SIBOR so that's $20,400 per year (excluding principal which by right you should be paying yourself), or $1,700 per month, which is the rental rate of some HDB flats.

A prime 2-bedroom should be able to fetch around $5k per month. So quite profitable and there is still room for manoeuvre even if rental falls further.

The only danger is if the government squeezes the "interest rate" trigger and raises interest rate. That will really spill blood all over the place. :scared-2:

I am quite confident Tharman won't dare to do that. To raise interest rates to kill property investors is like sending a bull into a china shop to chase after a rat. :scared-2:

That's why he is now trying to emulate the Australian way of cooling down the market, i.e. talk.

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your calculation is highly misleading

you must add in the principle repayment + interest .. to reflect the real cost each month ...

then you tell me is the rental income is worth the risk

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Originally Posted by proud owner

your calculation is highly misleading

you must add in the principle repayment + interest .. to reflect the real cost each month ...

then you tell me is the rental income is worth the risk

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I agreed with you proud owner, it should be calculated together with the principle sum to find out rental yield.

Quote:

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Originally Posted by proud owner

your calculation is highly misleading

you must add in the principle repayment + interest .. to reflect the real cost each month ...

then you tell me is the rental income is worth the risk

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Quote:

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Originally Posted by Honesty

I agreed with you proud owner, it should be calculated together with the principle sum to find out rental yield.

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Cannot include principal. :tsk-tsk:

The principal repayment is not a "cost" because at the end of the day, the property belongs to the landlord.

Only the interest is a "cost".

In company financial reports, for example, "interest expense" only includes the interest component but not the principal otherwise there'll be no profitable company on the stock exchange for the next few decades.

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Originally Posted by jlrx

Cannot include principal. :tsk-tsk:

The principal repayment is not a "cost" because at the end of the day, the property belongs to the landlord.

Only the interest is a "cost".

In company financial reports, for example, "interest expense" only includes the interest component but not the principal otherwise there'll be no profitable company on the stock exchange for the next few decades.

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so if i buy ardmore at 5 mio ...use a lot of cash and loan only 1 mio ...

and interest only cost me 3k a mth .. and i rent out at 3.1k

is that considered GOOD DEAL ??

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Originally Posted by proud owner

so if i buy ardmore at 5 mio ...use a lot of cash and loan only 1 mio ...

and interest only cost me 3k a mth .. and i rent out at 3.1k

is that considered GOOD DEAL ??

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My calculations were based on 80% loan.

If the cash component is too large, then the lost interest income from the cash has to be taken into account.

Fixed deposit interest is now around 1%, slightly lower than the SIBOR housing loan rate.

Let's say we use a blanket rate of 1.5% for the entire 7 mio (the price for an average 4+1 bedroom Ardmore Park unit of 2,885 sf is now around this), that's $105,000 per annum or $8,750 per month.

What is the average rental of Ardmore Park? That's more difficult to check but a glance through the online classifieds show asking prices ranging from $15,000 to $20,000 per month.

There is still sufficient room for manoeuvre, provided Tharman doesn't pull the trigger. :scared-2:

There is something known as opportunity cost for the principal sunk in.:doh: