(SINGAPORE) Buyers of luxury apartments launched of late are not rushing to stake legal claim on the properties by lodging caveats on them, official data shows.
Figures from the Urban Redevelopment Authority’s (URA) Realis website shows that in some instances, fewer than a quarter of the units sold have seen caveats lodged on them even a few months after the launch.
Industry players attribute this to a variety of reasons, including speculators looking to sell their properties quickly, the newly introduced deferred payment scheme, and good buyer-developer relationships.
At Marina Bay Residences, for example, just 75 caveats for new sales had been filed as of Jan 31, although the 428-unit development was fully sold by mid-December last year. The project is by a consortium comprising Keppel Land, Cheung Kong Holdings and Hongkong Land.
Similarly, only 66 new sale caveats have been lodged for the 111 apartments sold in Wheelock Properties’ Ardmore II. The project has 118 units.
Other recently launched developments where the number of new sale caveats lodged falls short of the number of units sold include City Developments’ St Regis Residences (87 new sale caveats lodged for around 128 units sold) and Tribeca By The Waterfront (29 caveats for more than 112 units sold) and Ho Bee’s The Coast at Sentosa Cove (98 caveats for more than 240 units), among others.
Lawyers BT spoke to said that while lodging a caveat when acquiring a new property is not mandated by law, new owners are usually advised to do so to stake their claims on their properties.
One reason for this new trend could be due to buyers looking to resell their apartments soon after buying them.
‘Nowadays, there are a number of people who don’t lodge caveats when they buy,’ said DTZ Debenham Tie Leung executive director Ong Choon Fah. ‘We suspect the caveats are popping up in the subsale market instead.’
URA classifies caveats for new projects as either those for new sales or those for subsales.
Mrs Ong said she first started noticing the trend about 1-2 years ago. While historically, for every development, there have always been some buyers who choose not to lodge caveats, the proportion has increased over the past couple of years, she says.
Another reason is the deferred payment schemes offered by developers, which means there is no immediate need to get financing.
Deferred payment schemes have been a popular option for property buyers, accounting for more than 90 per cent of transactions in recent new Marina Bay and downtown projects, according to Citigroup.
Such arrangements also favour buyers looking to resell their properties on the subsale market.
‘The deferred scheme may be encouraging the entry of speculators and fuelling stronger price increases in the primary residential market,’ said Citigroup economist Chua Hak Bin. ‘Sub-sale transactions have quadrupled from two years ago. Median prices of uncompleted projects have risen by about 20 per cent from their recent lows, double that of the 10 per cent for completed projects.’
The scheme allows buyers to fork out only a 10 per cent or 20 per cent downpayment on a property, with the rest due upon completion - sometimes as much as three years later. Buyers need not worry about further payments during the construction phase and the ample period of three years also allows the buyer time to resell the property for a profit.
Buyers could also simply be letting the task of lodging caveats slide, since they are secure in the knowledge that big-name developers are not likely to sell the same unit twice, said Norman Ho, senior real estate partner with law firm Rodyk & Davidson. This is especially likely, he said, considering the volume and speed of recent high-end property launches.
‘They (buyers of new properties) are buying directly from the developers, so they are very, very safe - the developer is not going to sell the same property twice,’ said Mr Ho.
Despite this, lawyers will always advise clients to file caveats just to cover all bases.
More caveats for newly launched upmarket developments are likely to be filed in the coming weeks. Mr Ho explained that in every transaction, there is a time lag of about five weeks between the time the option-to-purchase is granted by the developer and the time the sale-and-purchase agreement is signed by both parties. The sale-and-purchase agreement is needed before a caveat can be filed.
However, with the high levels of resale and subsale activity on the market now - aided in part by the deferred payment scheme - the proportion of new sale caveats lodged is unlikely to climb by too much, market watchers said.
Thursday, March 8, 2007
Saturday, March 3, 2007
LaSalle Investment goes big on Singapore hotels
Lasalle Investment Management (LIM) has entered the Singapore hotels sector in a big way. The investment manager has quietly acquired the Swissotel Merchant Court from Colony Capital in January and another un-named hotel more recently, it has emerged.
In December 2006, LIM acquired a hotel development site on Bencoolen Street for $73 million - making three hotel acquisitions here in less than six months.
David Edwards, regional investment strategist at LIM, said that it has ‘technically’ acquired its third hotel here but declined to give details until the deal is finalised. He also declined to say what it paid for the Swissotel Merchant Court at Clarke Quay.
Mr Edwards did say that LIM ‘likes the hotel segment in Singapore’, and in general, the ‘limited service hotel segment in Asia’.
‘This is a segment we are looking to develop in partnership. We are very keen on developing this partnership arrangement,’ he added.
Mr Edwards did not specify who this partner is. However for the Bencoolen Street site, LIM will be partnering the Accor Group, which owns the Sofitel, Novotel, Ibis and Mercure hotel brands.
Mr Edwards said: ‘We have been a long term investor in hotels so we are very familiar with the sector and it fits in nicely with the Singapore growth story.’
The Swissotel Merchant Court was part of the 41 properties in the Raffles Hotels and Resorts chain acquired by Colony Capital in 2005 for $1.45 billion from CapitaLand’s Raffles Holdings.
It is not known if Colony Capital is selling any more of its hotels here, but an industry source who did not want to be named said: ‘I am surprised they have started selling so soon.’ The same source priced the Swissotel Merchant court at between $300 million and $400 million.
Mr Edwards was speaking at a press briefing for LIM’s Investment Strategy Annual, where he also said: ‘Investors can continue to earn relatively attractive returns in real estate by adapting to an expanded universe.’
About 60 per cent of LIM’s investments in the Asia Pacific are in Japan, with another 3 per cent based in China.
Source: The Business Times, 03 March 2007
In December 2006, LIM acquired a hotel development site on Bencoolen Street for $73 million - making three hotel acquisitions here in less than six months.
David Edwards, regional investment strategist at LIM, said that it has ‘technically’ acquired its third hotel here but declined to give details until the deal is finalised. He also declined to say what it paid for the Swissotel Merchant Court at Clarke Quay.
Mr Edwards did say that LIM ‘likes the hotel segment in Singapore’, and in general, the ‘limited service hotel segment in Asia’.
‘This is a segment we are looking to develop in partnership. We are very keen on developing this partnership arrangement,’ he added.
Mr Edwards did not specify who this partner is. However for the Bencoolen Street site, LIM will be partnering the Accor Group, which owns the Sofitel, Novotel, Ibis and Mercure hotel brands.
Mr Edwards said: ‘We have been a long term investor in hotels so we are very familiar with the sector and it fits in nicely with the Singapore growth story.’
The Swissotel Merchant Court was part of the 41 properties in the Raffles Hotels and Resorts chain acquired by Colony Capital in 2005 for $1.45 billion from CapitaLand’s Raffles Holdings.
It is not known if Colony Capital is selling any more of its hotels here, but an industry source who did not want to be named said: ‘I am surprised they have started selling so soon.’ The same source priced the Swissotel Merchant court at between $300 million and $400 million.
Mr Edwards was speaking at a press briefing for LIM’s Investment Strategy Annual, where he also said: ‘Investors can continue to earn relatively attractive returns in real estate by adapting to an expanded universe.’
About 60 per cent of LIM’s investments in the Asia Pacific are in Japan, with another 3 per cent based in China.
Source: The Business Times, 03 March 2007
Thursday, March 1, 2007
Whitehouse Holdings wins hotel tender
The Singapore Land Authority (SLA) has awarded the tender for a site at 175A Chin Swee Road for use as a boutique business hotel to Vita Holdings unit Whitehouse Holdings. The rental price is $82,178 a month.
Vita will invest $6 million to refurbish the 12 storey building - previously Pearl’s Hill Primary School - into a 130-room hotel and is slated to open by the end of this year. The state property has an estimated land area of 10,500 sq m and gross floor area of 5,800 sq m and is the first one tenanted out by SLA for niche use as a mid-tier hotel.
The site is just three minutes from the centre of the central business district and will be well-situated as a business hotel. The lease is for an initial term of three years and is renewable on terms up till 2016.
Vita will finance the investment through a combination of internal funds and bank borrowings. The investment is not expected to have any significant impact on the group’s financials in the current financial year.
SLA said the winning bid was selected based on several factors including tender price, concepts, proposed uses, track record and the financial health of the company submitting the bid. Whitehouse Holdings’ tender price was the highest, beating five other tenderers, including East Lodge Management - whose bid it easily topped by at least $10,000 - Bescorp Investments, Club Panoly Holdings, Ideal Accommodation and Jian Yu Construction.
This will be Vita’s first hotel property. Executive chairman Christine Sim was upbeat on the prospects for the business. ‘Our move in this business direction is timely, given the increasing overseas traveller arrivals and the changing needs of frequent business travellers,’ she said.
The new property will increase Vita’s current portfolio to 13 properties.
Source: The Business Times, 01 March 2007
Vita will invest $6 million to refurbish the 12 storey building - previously Pearl’s Hill Primary School - into a 130-room hotel and is slated to open by the end of this year. The state property has an estimated land area of 10,500 sq m and gross floor area of 5,800 sq m and is the first one tenanted out by SLA for niche use as a mid-tier hotel.
The site is just three minutes from the centre of the central business district and will be well-situated as a business hotel. The lease is for an initial term of three years and is renewable on terms up till 2016.
Vita will finance the investment through a combination of internal funds and bank borrowings. The investment is not expected to have any significant impact on the group’s financials in the current financial year.
SLA said the winning bid was selected based on several factors including tender price, concepts, proposed uses, track record and the financial health of the company submitting the bid. Whitehouse Holdings’ tender price was the highest, beating five other tenderers, including East Lodge Management - whose bid it easily topped by at least $10,000 - Bescorp Investments, Club Panoly Holdings, Ideal Accommodation and Jian Yu Construction.
This will be Vita’s first hotel property. Executive chairman Christine Sim was upbeat on the prospects for the business. ‘Our move in this business direction is timely, given the increasing overseas traveller arrivals and the changing needs of frequent business travellers,’ she said.
The new property will increase Vita’s current portfolio to 13 properties.
Source: The Business Times, 01 March 2007
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