Ravi Chandran
CBRE announced on 13 June that it has set a record per square foot per plot ratio price of S$2,910 in the successful collective sale of Park House located at 21 Orchard Boulevard in Singapore’s prime District 10, Orchard Road area. The public tender was awarded on 1 June 2018 to Shun Tak Cuscaden Residential Pte Ltd, a wholly owned subsidiary of Shun Tak Holdings Limited which is a listed company in Hong Kong.
The sale price of S$375.5 million translates to S$2,910 psf per plot ratio on the maximum allowable Gross Floor Area of approximately 129,035 sq ft, (excluding the 10% bonus for balconies).
The successful collective sale price is a new benchmark in Singapore and exceeds the previous peak price of S$2526 psf per plot ratio which Hong Kong’s Swire Properties paid for the Hampton Court collective sale site at Draycott Park in January 2013. The Hampton Court sale was also handled by CBRE.
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According to the Urban Redevelopment Authority’s baseline record, no development charge is payable, including the 10% bonus GFA for balconies. Zoned residential under the 2014 Master Plan, the site area is approximately 46,084 sq ft and has a plot ratio of 2.8. Shun Tak Holdings Limited intends to redevelop the site into a luxury residential development with expected completion by 2023.
Park House is a rare freehold 60-unit development in Orchard Road, comprising 56 apartments and 4 shop units. Each apartment unit owner and shop unit owner will stand to receive a gross payout of approximately S$6.1 million and S$8.1 million respectively.
Commenting on the successful collective sale, Jeremy Lake, Managing Director of CBRE Capital Markets said: “The response from local and foreign developers was overwhelming; we conducted more than 20 site inspections with developers from Hong Kong, Malaysia, Singapore, China and Indonesia. All of them immediately recognized the positive attributes of Park House including its very prominent yet exclusive location on Orchard Boulevard, the accessibility to the Orchard Road shopping belt and the short walking distance to Orchard Boulevard MRT when it is completed in 2021“.
The successful collective sale of Park House is the sixth en bloc sale brokered by CBRE in 2018, following the successful sale of Villa d’Este (S$93 million), The Estoril (S$224 million), Pacific Mansion (S$980 million), Cairnhill Mansions (S$362 million) and Rivera Point (S$72 million). Pacific Mansion holds the record for the largest collective sale transacted in the current enbloc cycle.
Edward Ong, the Chairman of Park House Collective Sale Committee said, “This wonderful outcome has certainly exceeded the expectations of all owners at Park House. On behalf of the collective sale committee, I extend our deepest appreciation to CBRE and Rajah & Tann for their diligent and efficient work”.
The successful collective sale of the prime property at District 10 comes at a time when sentiment in the private residential market continues to be buoyant.
Overall private property prices rose across most market segments, with the largest price surge seen in the Core Central Region (5.5%) and Outside of Central Region (5.6%).
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As developers’ existing stock continues to diminish and supply of completed homes remain low, many projects especially those in the CCR have raised prices of their unsold units, some by even double-digits this year. Private residential market continued to gain traction with individual re-sellers have also seized the opportunity of increasing their asking prices in light of the more positive market sentiment fueled by the recent collective sales frenzy.
With positive sentiments of the private residential market, sales is predicted to pick up significantly in the months ahead as more projects are slated to be launched and the prevailing market valuations are supported by banks at higher benchmark prices.
Mr Paul Ho, chief mortgage consultant at icompareloan.com noted that the successful collective sale of the District 10 development reflects the increasing demand and reducing supply. Statistics suggest that Core Central Region (CCR) comprising of Districts 1, 2, 10 and 11 besides District 9, has risen less compared to Rest of Central Region (RCR) for many years now – and that the price differential is narrowing – he observed.
“Either RCR is overpriced or CCR is under-priced. For investors who are looking at superlatives, definitely the best of the best will do. Savvy investors (those who already have more than 1 property) will stay away from the market as the prices are crazy and the fundamentals are weak and there is huge supply in the pipeline.
Current investors, such as those that bought the New Futura comprise mainly of foreigners. I doubt how they will recover their investment given the low rental yields, rising interest costs. I got a sense that it is more a portfolio diversification play given that they feel bullish about the Singapore Property market – given that the malaise of over supply has been digested for many years. The situation is nowhere as dire. So, this is more about the confidence and the sentiments. The fundamentals of the Singapore property market remains weak.” – Paul Ho
Mr Ho believes that value buys in the property market right now are are landed inter-terrace houses which’s per square feet price on the built-up area is usually less than $1000.
If you are a home hunting for a property at District 10, our Panel of Property agents and the mortgage consultants at icompareloan.com can help you now.
Our affordability assessment and best home loans will put your heat at ease and the services of our mortgage loan experts are free. Our analysis will give best home loan seekers better ease of mind on interest rate volatility and repayments.
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