Upper Serangoon / Kovan GLS site

Statistics from the Urban Redevelopment Authority (URA) show that the total transaction value of residential en-bloc properties for the first half of this year has.

OXLEY Holdings, fresh from its purchase of McDonald’s Place, has snapped up Hougang Plaza for $119.1 million from CapitaMall Trust (CMT).

In a statement issued to the Singapore Exchange yesterday, CMT said that it has sold the three-storey shopping mall (Hougang Plaza) located in Hougang Central to Oxley Bloom, a fully-owned subsidiary of Oxley Holdings. Oxley Bloom will pay for the acquisition in cash, which it said will come through a combination of internal resources and external borrowings.

Oxley Holdings said it intends to enter into a formal agreement with Lian Beng Land which will see the latter become a joint venture partner in redeveloping Hougang Plaza. Lian Beng will do so by taking up a 50 per cent stake in Oxley Bloom.

The acquisition price of Hougang Plaza is more than three times the market valuation of the property, which was put at $34 million as at Dec 31, 2011, by Knight Frank. The book value of the property is also $34 million.

When contacted, Oxley Holdings said that it plans to turn the current shopping mall (Hougang Plaza) – which currently has a net lettable area of 75,353 square feet, and a land area of approximately 57,047 square feet – into a mixed residential cum commercial development. This is subject to approval from the Urban Redevelopment Authority.

Hougang Plaza has a leasehold tenure of 99 years, with effect from March 1, 1991.

In April, Oxley Holdings bought the iconic McDonald’s Place at King Albert Park for $150 million. The freehold, 5,534.8 square metre site that the two-storey commercial building sits on is zoned for commercial and residential use.

Ashish Manchharam, head of investments in South East Asia at Jones Lang LaSalle, which acted as property consultant to CMT for the Hougang Plaza deal, said: “Hougang Plaza received strong interest from the market. A new development on the site is expected to be well received given the location, which is walking distance to the Hougang MRT station and within proximity to amenities.”

CMT expects to realise a net gain of about $83.3 million from the sale of Hougang Plaza, after taking into account the divestment fee and divestment-related expenses.

“The net sale proceeds of approximately $117.8 million will provide CMT with greater financial flexibility to pursue possible acquisition opportunities and/or to repay debt,” it said in a statement.

CMT added that the sale of Hougang Plaza is not expected to have any material effect on the net asset value and distribution per unit for FY2011.

Oxley Holdings said its purchase of Hougang Plaza is not expected to have a material impact on the earnings per share or net tangible assets per share of the company for the current financial year ending June 2012.

A bullish top bid of almost $500million was lodged for a mixed-use site next to Novena MRT station in a 9-cornered contest yesterday. The Novena white site attracts top bid of $493 million.

The bid of $492.5million or $1632psf per plot ratio – is the highest ever submitted for a white site, which can accomodate a variety of uses. It easily beat the old record of $1409psf ppr lodged for a white site at Marina View by MGPA in September 2007.

Experts say the generally high bids could have been driven by the good sale prices for some strata-titled retail and office spaces and the buoyant tourism industry. The top offer came from a consortium comprising Hoi Hup Realty, Sunway Development and Hoi Hup JV Development, whose shareholders include Straits Construction and Hoi Hup Realty.

CapitaLand units Swift One, Swift Two and Taipan Trustee came in second with a $444.9 million bid. Other bidders included Far East Orchard, Sim Lian Group, Guthrie and UEM Land, which placed the lowest bid of $340.5million or $1128psf ppr. The 6677 sqm plot on the corner of Thomson road and Irrawaddy road has a maximum gross floor area of 28,043sqm, at least 30 per cent of which must be allocated for a hotel.

The rest can be for residential, office, or retail and complementary commercial uses, the Urban Redevelopment Authority (URA) said.

Hoi Hup added that apart from the mandated 30% hotel use, the remaining space will be for medical suites and shops, the latter to be in the basement and first storey.

Mr Lee Sze Teck, senior manager of training, research and consultancy at Dennis Wee Group, noted that the Novena area has not seen a new supply of office space for some time.

Demand for strata-titled office space in the fringe central business district area, like Novena, has typically been strong, which has likely attracted developers, he said.

Novena is a growing medical hub. Tan Tock Seng Hospital, Novena Medical Centre, National Skin Centre, National Neuroscience Institute and Mount Elizabeth Novena Hospital are all in the vicinity.

“As a hotel-cum residential site, a top bid of around $1300 to $1400 psf ppr would have been expected,” Mr Ong, Jones Lang LaSalle Real Estate’s national director of research and consultancy said.

Conveniently situated next to Novena MRT Station, the site enjoys excellent connectivity. The white-site is also highly accessible to the Central Business District (CBD) and Orchard Road.

The reserve list site at Novena (at junction of Thomson Road and Irrawaddy Road) was put up for sale in October after a developer committed to bid not less than $211.3 million for the mixed-use land parcel.

Statistics from the Urban Redevelopment Authority (URA) show that the total transaction value of residential en-bloc properties for the first half of this year has plunged by 80 per cent compared to the same period last year.

And there were fewer en-bloc property transactions.

Real estate analysts believe that this is due to the global economic slowdown, and the government cooling measures introduced late 2011.

In the first half of last year, 28 en-bloc residential properties were successfully transacted. But this fell to just eight in the same period this year.

Among them was Nam Peng Centre in Upper Serangoon Road. Nam Peng Centre is accessible via Boundary Road, Upper Serangoon Road, Kovan Road and Yio Chu Kang Road.

Between January and June this year, the total transaction value of residential en-bloc properties fell to about S$250 million, from almost S$1.6 billion in the same period last year.

Analysts said the additional buyer’s stamp duty introduced by the government in December last year has curbed speculative demand for properties.

In addition, developers who buy en-bloc projects are now required to build and sell all units on the residential site within five years of acquiring the land.

Otherwise, they have to pay an additional 10 per cent in stamp duty. So developers have been extra cautious before they enter the market.

Director of Ascendant Assets Pte Ltd, Getty Goh, said: “In the past, developers can buy certain pieces of land and sit on it almost indefinitely. These days with all these additional constraints, it would definitely make a developer think twice before proceeding with an en-bloc transaction.”

And with more land sites released through the Government Land Sales programme (GLS), this gives developers more choice, which in turn, pushed down the transaction price of en-bloc projects.

Goh said: “About 14 land parcels have been awarded via the GLS programme. However, the highest that has been transacted at was about S$400 million. Naturally, this puts a price pressure on the en-bloc market.”

The value of en-bloc deals for the first half of this year is merely 9 per cent of the total transaction value for the whole of last year.

Analysts feel that while the market may pick up in the second half of this year, it is unlikely to top last year’s numbers. But, if the price for en-bloc projects in mature estates is not too high, developers would still be keen on them.

(Source: Channelnewsasia)