Fretful Chempaka residents and deals galore

LOOKING to buy a landed home with over 3,500 square feet (sq ft) of land for under a million Singapore dollars? It’s possible, but be prepared to live with a remaining land lease of 10 years.

There are 144 terraced and semi-detached houses in Jalan Chempaka Puteh, Jalan Chempaka Kuning and Bedok Road in District 16 in the East with land leases expiring in August 2034. Some homeowners are fretting over what will happen when the land lease runs out and hoping for a lease extension.

I argue in The Level Ground that it will be tricky for private leasehold homeowners to extend their rapidly dwindling land leases. For one, can multiple owners in any landed estate or condo development agree on the length of land lease extension and the amount payable?

As life expectancy rises, it may be prudent for any buyer seeking a private home to live in for the remainder of his life to pay more for a home with a sufficiently long remaining land lease.

Talking of transacting homes, buyers and sellers of Housing and Development Board (HDB) resale flats may benefit from using the resale flat listing service on the HDB Flat Portal that was officially launched last week. This service allows prospective HDB flat buyers and their appointed property agents to browse listings and carry out transactions directly with flat sellers or seller agents.

Might using the above service generate cost savings? Perhaps, crucially, the service may help improve transparency in the HDB resale market.

Large Singapore deals

Despite persistently high interest rates, big-ticket physical property deals continue to be struck in the Singapore market.

A luxury apartment on the 57th floor of new project Skywaters Residences in Shenton Way was sold in May for S$47.34 million, or S$6,100 per square foot (psf), marking a record high-price for a 99-year leasehold home in psf terms. Expected to be completed in 2028, the condominium is part of a larger 63-storey mixed-use development, which will also house retail space, offices and a hotel.

Via an en bloc sale, City Developments Limited (CDL) is buying up all of freehold Delfi Orchard, a 40-year-old strata-titled building of which it already owns the majority share, for S$439 million. Delfi Orchard sits on a 20,264 sq ft site along Orchard Road zoned for commercial use. CDL is a major property owner in the Orchard Road belt and has strong development capabilities. Possibly, CDL will add to the rejuvenation of the Orchard Road belt by redeveloping Delfi Orchard.

My colleague Kalpana Rashiwala reported that the industrial property market here has been buzzing with big-ticket sales over the past few months. These include a S$74 million deal for a freehold food factory development site in Mandai. A building in Senoko Loop fetched S$53.2 million while a property in Pandan Road is being sold for S$36 million.

Mapletree Pan Asia Commercial Trust (MPACT) is divesting Mapletree Anson, a 19-storey office building in Tanjong Pagar, for S$775 million or 1.3 per cent above the property’s end-March valuation. The trust’s manager intends to use net proceeds from the sale towards debt reduction. MPACT’s aggregate leverage ratio is expected to reduce from 40.5 per cent as at end-March to 37.6 per cent on a pro forma basis.

Meanwhile, MPACT’s sponsor, Temasek’s Mapletree Investments posted a net loss of S$577.2 million for the financial year ended March 31 due to industry headwinds, compared with a S$1.2 billion net profit in the previous financial year. Amid a prolonged work-from-home trend, Mapletree saw a substantial decline in assets’ valuation within the office portfolios in the US, Europe and Australia markets, especially.

More deals?

More large deals may be brewing in Singapore. Freehold Katong Plaza, a 41-year-old property in the east, which currently houses retail units and homes, was put on the market via a collective sale, with an asking price of S$188 million. The site has received outline permission from the Urban Redevelopment Authority (URA) for conversion to hotel use.

Paragon Reit is reportedly in advanced negotiations to sell The Rail Mall in Upper Bukit Timah for slightly above S$80 million. Located near Hillview MRT station, the property has 43 retail units and 89 car parking spaces.

Still, a poll of real estate executives by the Institute of Real Estate and Urban Studies of the National University of Singapore revealed that while sentiment in Singapore’s property sector continued to improve in the first quarter, industry players have turned markedly more pessimistic on the prime residential sector, as well as the office and the business park/hi-tech space sectors.

Separately, analysts expect cautious bids among developers for two 99-year leasehold private housing sites - one in Margaret Drive and the other in Media Circle - recently put up for sale by the URA.

Abroad

Outside Singapore, Keppel Land officially opened its first senior-living facility in Asia. Located in Nanjing, China, and spanning 19,846 square metres, the purpose-built senior-living facility, Sindora Living Nanjing Qixia, features an assisted-living community with care capabilities and around 400 beds.

As many parts of Asia are rapidly ageing, could senior living provide rich pickings for property players? Still, private sector players need to carefully navigate the intricacies of different jurisdictions. Ultimately, success may largely depend on getting funding, concept and operating model right. 

UK house prices rose in May after falling in the previous two months according to mortgage lender Nationwide.

Data by property consultant CoreLogic showed Australian home prices climbed at a brisk pace in May as a sustained squeeze on the supply of affordable homes in most major capital cities continued to push prices up nationwide.

Hong Kong’s private home prices climbed for the second month in a row in April, up 0.3 per cent from March, after the financial hub lifted curbs to boost its ailing property market.

However, contract signings for US home purchases fell by the most in three years in April and the overall level of activity was the lowest since the onset of the Covid-19 pandemic in the spring of 2020, as high interest rates kept a lid on the housing market, according to the National Association of Realtors.

In China, the value of new-home sales from the 100 biggest real estate companies dropped about 33.6 per cent from a year earlier to US$44.52 billion, compared with a 45 per cent decline in April, according to preliminary data from China Real Estate Information Corp.