PROPERTY INSIGHTS

Chuan Park scores and thoughts on state land sales

Leslie Yee

Published Tue, Nov 12, 2024 · 12:30 PM

BT senior correspondent Leslie Yee asks: While homebuyers here should be mindful of the economic impact of a new Trump presidency, are many Trump voters who are hoping for lower inflation wrong? BT SCREENSHOT

This week in Property

Strong take-up at Chuan Park’s launch
Why the government should be more flexible in assessing land bids
Trump’s impact on inflation and interest rates
CICT’s sale of 21 Collyer Quay

Chuan Park shines

Around 35 homes or about 10 per cent of the 367 available homes at mixed-use 99-year leasehold development One Sophia were sold at an average price of S$2,750 per square foot (psf) following a five-day preview of its showflat.

Meanwhile, around 20 per cent of Union Square Residences at Havelock Road by City Developments Limited (CDL) were sold on the first day of the project’s launch on Nov 9. CDL said the average selling price of the 99-year leasehold project was about S$3,200 psf, with around 83 per cent of the buyers comprising Singaporeans.

In the flurry of recent private home launches, Chuan Park, located at Lorong Chuan was the star performer. A total of 696 units or 76 per cent of the 916 units at 99-year leasehold Chuan Park were sold on their launch weekend at an average price of S$2,579 psf.

Chuan Park is a redevelopment of the former condo of the same name, which Kingsford Group bought en bloc for S$890 million in May 2023. A lack of new projects in the area and a large pool of potential buyers looking to upgrade were among the reasons cited for the strong performance of the project which has three 22-storey and two 19-storey tower blocks, as well as two commercial units.

Perhaps, the divergence in sales take-up at new condo launches simply mirrors the disparity in interest shown at various state land tenders this year.

There have been three instances where top bids for confirmed list sites of the Government Land Sales (GLS) programme were rejected because prices were too low while a confirmed list site, predominantly meant for housing with a long-stay serviced apartment component, at Upper Thomson Road whose tender closed in June drew no bids.

In The Level Ground, I argue why the government should look to exercise great flexibility in accepting bids for confirmed list GLS sites. While a valuer may have rational reasons for ascribing land values, due respect should be given to the market’s collective verdict on what a land parcel is worth. Selling confirmed list GLS sites in a timely manner helps ensure adequate supply across different property segments, especially as the government plays a vital role in land supply.

Donald Trump’s return

Certainly, last week’s big news was Donald Trump’s resounding win in the US elections which returns him to the White House in January 2025. Will Trump’s policies of swingeing import tariffs, lavish tax cuts and mass deportation of illegal immigrants fuel inflationary pressures and complicate the Federal Reserve’s path of cutting interest rates?

The prospect of a less benign interest rate outlook spooked investors in real estate investment trusts (Reits), sending prices in many Reits tumbling. Indeed, physical property prices here could take a hit if the second Trump administration’s policies hurt global economic growth and lead the Federal Reserve to be more hawkish on interest rates.

Buoyed by growing demand and limited supply, a strong performer in the property space here is executive condos (ECs). The average price of newly launched ECs was S$1,460 psf for the first nine months of this year – up 24.1 per cent from 2021’s S$1,176 psf, according to a report by Singapore Realtors Inc.

In recent times, another property segment that has performed well is Housing and Development Board (HDB) resale flats. Flash data from SRX and 99.co showed HDB resale flat prices rose 0.3 per cent month on month and 9.8 per cent year on year in October. Executive flats saw the highest monthly price increase. However, transaction volume of resale flats in October declined 2.7 per cent from September.

While homebuyers here should be mindful of the economic impact of a new Trump presidency, are many Trump voters who are hoping for lower inflation wrong?

I posit that there can be a case for optimism for Singapore’s economy in the years of the incoming Trump administration. Maybe, many businesses will cheer a climate of lower taxes and lighter regulations. Could Trump help end major military conflicts and unleash a peace dividend?

Regardless of the economic outlook, one is unlikely to go wrong buying an HDB Build-To-Order (BTO) provided one can do so. BTO flats are sold at subsidised prices and many BTO buyers receive housing grants.

The HDB posted a higher net deficit of S$6.8 billion for the financial year 2023. HDB’s Home Ownership segment incurred a net deficit of S$6.2 billion. This covers the development and sale of flats to eligible buyers under public housing home ownership schemes as well as the disbursement of housing grants for new and resale flats to eligible households.

Deals continue

Outside of the residential property market, chunky deals continue to be executed in Singapore. On Nov 12, CapitaLand Integrated Commercial Trust announced the sale of 999-year leasehold 21 Collyer Quay in Raffles Place for S$688 million, representing an exit yield of below 3.5 per cent.

A wholly-owned subsidiary of tycoon Ong Beng Seng’s Hotel Properties Limited (HPL) bought all of Concorde Hotel and Shopping Mall in the Orchard Road area for S$821 million through an en bloc sale. HPL was a major owner of strata units in this development prior to the en bloc sale.

A new development on the site, which has an initial land lease of 99 years, can include hotel, residential and commercial uses that account for 40 per cent, 40 per cent and 20 per cent of gross floor area respectively.

Meanwhile, my colleagues Kalpana Rashiwala and Derryn Wong reported that Mercedes-Benz Singapore is selling the balance lease of its property at 301 Jalan Ahmad Ibrahim to JTC Corporation. JTC is paying S$46.2 million for the balance lease term of over 16 years for the 403,401 square foot (sq ft) site and the two-storey logistics building on it.

Extremely deep-pocketed local homebuyers might like to consider the good class bungalow in Queen Astrid Park that the wife of convicted Hin Leong Trading founder Lim Oon Kuin has put up for sale for S$100 million. The asking price for the 999-year leasehold home works out to around S$3,366 psf on a land area of 29,709 sq ft.

Finally, fans of British colonial era homes will welcome the government’s decision to conserve 19 bungalows along Adam Road that were built in 1929 to house the families of officers in the British administration.

Is Trump’s election positive for Singapore’s property market? Let me know your thoughts at lyee@sph.com.sg