Published November 7, 2006

CapitaLand plans to launch three freehold condos next year


CAPITALAND is planning to launch three freehold condos next year with a total of about 700 units even as it catches its breath after selling 188 units over the weekend at the 99-year leasehold The Metropolitan Condominium next to Redhill MRT Station.

The Metropolitan: Over the weekend, CapitaLand/Lippo sold 188 units of the condo, next to Redhill MRT Station, at an average price of $780 psf

'My view is that next year will be good. We're marketing Singapore as a global gateway city. Home prices will continue to do well next year,' CapitaLand Residential Singapore CEO Patricia Chia said.

She expects overall private home prices to rise by about 10-15 per cent next year.

The official Urban Redevelopment Authority's private home price index has risen 6.1 per cent in the first nine months of this year since end-2005, and Ms Chia estimates the year will close nearly 10 per cent higher.

Despite the steep increase in luxury home prices (21 per cent in the first nine months of the year according to some property consultants), Ms Chia believes there's still room for further price growth for well-located projects with good design in this market segment.

The $780 psf average price (after discounts) achieved for the 45-storey Metropolitan is higher than the average of around $750 psf for Tanglin View and around $700 psf for Tanglin Regency fetched between April and August this year, according to The Metropolitan's marketing agent ERA Realty Network president Jack Chua.

The two completed 99-year developments are opposite The Metropolitan but are lower, at just 20 storeys.

Generally, apartments on higher floors fetch higher prices which means that taller condos tend to command a higher average per square foot price on a project basis.

However, The Metropolitan's average price of $780 psf is shy of the over-$800 psf that Tanglin View recorded when it was launched in 1997.

ERA's Mr Chua predicts net rental yields in excess of 4 per cent for units at The Metropolitan Condominium.

Analysts reckon CapitaLand could book a pre-tax profit of about $60 million or even more from its half-share in The Metropolitan Condo.

The other half in the project is held by Lippo Group. The two teamed up to bid for the site at a state tender which closed last November.

Their winning bid reflected a unit land cost of about $350 psf per plot ratio.

CapitaLand said buyers started to queue at The Metropolitan's showflat from 3 am Saturday morning. The showflat opened for sales at 9 am.

The condo, which is expected to be completed in 2010, comprises a total of 382 units, of which 250 have been launched so far.

Of these, 188 had been sold by Sunday evening. Absolute prices range from about $511,000 for a two-bedroom unit on the fifth level to $1.45 million for a four-bedroom unit on the 42nd storey. The development has 11 penthouses, which have yet to be released. Their prices start from $2.5 million.

The Metropolitan is being developed on the last of CapitaLand's 99-year leasehold site.

Another of the group's earlier 99-year projects, CityLights near the Lavender MRT Station, is over 70 per cent sold, Ms Chia revealed.

The average price CapitaLand is selling units in the condo has appreciated around 16 per cent, from an initial $600 psf in November 2004, to about $700 psf currently.

The three condos which CapitaLand is likely to launch next year will be developed on the Silver Tower site in Cairnhill which it bought this year, at Meyer Road and at Jalan Mutiara.

The group will release its financial results for the third quarter ended Sept 30, 2006, on Thursday this week.