New high-end housing project for Jomtien Beach
The Nation:20 September 2006
By: Somluck Srimalee
Property developer AEH Co Ltd launched a Bt1.4-billion detached-housing project yesterday called Baan Talay Pattaya, hoping to take advantage of the eastern property boom driven by the opening of Suvarnabhumi Airport.
AEH vice president Aroon Eamsureya said his company would use an 8.4-hectare block of land at Jomtien Beach it bought two years ago for Bt200 million. It will invest a further Bt700 million to develop the project this year and next.
Half of the cost will be borrowed from a bank, and the rest will come from the company's cash flow.
"We planned to develop a residential project two years ago but delayed our decision to wait for the new international airport and maybe to change the project's concept to meet demand," he said.
In the two or three years before completion of the airport, demand for detached housing in Pattaya grew strongly. Land prices there have doubled, and Aroon said they were expected to increase again this year.
The company decided to develop detached housing rather than a condominium and will offer units priced from Bt14 million to Bt120 million. Market demand in the area suggests a greater need for detached housing than for condominiums.
Aroon said CB Richard Ellis had been assigned as the sales agent and manager of Baan Talay Pattaya.
Ten of the project's 68 units have already been sold, and the company expects 70 per cent of its customers will be locals and 30 per cent foreigners.
He said AEH's first project, Baan Nuen Num, also in Chon Buri province, generated sales of Bt500 million to the end of 2004.
This experience has led the company to believe its new project will sell successfully by the end of next year.
It expects sales of Bt400 million from Baan Talay Pattaya this year and of Bt1 billion next year.
AEH was established with registered capital of Bt150 million six years ago.
Its owners, the Eamsureya family, also operate the Shanghai Xiao Long Pao Chinese Restaurant.
Saturday, September 30, 2006
Tuesday, August 29, 2006
High-End Homes Shine in Sub-Sale Market
The sub-sale market in the high-end residential segment was abuzz in the second quarter, both in terms of price gains and activity, as those who bought units earlier took the opportunity to sell them for a tidy profit.
DTZ Debenham Tie Leung’s latest analysis of caveats shows the median price of private apartments and condos that changed hands in the sub-sale market in Q2 jumped 37% from Q1. The median price rose from $598 per square foot in Q1 to $822 psf in Q2.
This was the highest level since $830 psf a decade ago in Q2 1996 at the peak of the property market, according to the firm’s analysis of caveats captured by the URA Realis database.
Subsales essentially refer to cases in which buyers who bought from developers sell in the secondary market prior to the project receiving Certificate of Statutory Completion. The certificate is typically issued about a year after a project receives Temporary Occupation Permit.
Sub-sales - often seen as a proxy of the level of speculative activity in the property market - were transacted largely for apartments/condos in the higher price brands in the April-June quarter this year, DTZ says.
The two highest price bands DTZ used in its five-tier analysis - units costing $1 million to less than $1.4 million, and units priced at $1.4 million and above - accounted for 44 per cent of total sub-sale transactions in Q2.
These two price bands posted respective quarter-on-quarter increases of 73% and 23% in the number of sub-sale deals. There was also a 60% quarter-on-quarter rise in number of sub-sales of units costing $800,000 to less than $1 million.
DTZ attributes this partly to strong interest in exclusive projects that were either completed recently or are nearing completion - such as The Pier at Robertson along the Singapore River, and The Berth By The Cove at Sentosa Cove.
‘People who want to buy homes for owner occupation or for investment with immediate rental income flow tend to prefer a unit that is nearing or has received Temporary Occupation Permit,’ says DTZ executive director Ong Choon Fah.
She also points to sub-sale interest in popular projects such as Icon in Tanjong Pagar, The Berth by The Cove and The Sail @ Marina Bay (first tower) that were launched by developers a few years ago at prices lower than those of similar projects released recently.
For instance, Ho Bee launched The Berth by The Cove in late 2004 at an average of $785 psf. Condo units there today would be worth more than $1,000 psf, property agents say.
DTZ says: ‘With the price recovery in high-end residential projects, those who bought units earlier in such developments have been able to benchmark the value of their properties against the newer projects.
‘This has created an opportunity for them to sell their units in the sub-sale market to the increasing number of buyers who are keen on such high-profile exclusive projects.’
DTZ’s analysis shows that while there was a pick-up in sub-sale deals in the higher price bands in Q2, activity in the two lowest price tiers declined from the preceding three months. As a result, the total number of apartments and condos sold in the sub-sale market for Q2 - at 115 - was hardly changed from the Q1 figure of 113.
Buyers with HDB addresses continued to account for a lower share of the number of sub-sale deals for private apartments and condos, down to to 23% in Q2 from 38% in Q1.
The firm also notes that the number of sub-sales continued to remain relatively low in Q2 - at 2.8% of the total 4,096 apartment and condo transactions in the quarter.
‘Going forward, while sub-sales will still be significantly lower than the levels between 1996 and 1999, the momentum for the sub-sales market is expected to strengthen on the back of the recovery of the high-end residential market and several high-profile projects that are expected to be launched,’ DTZ says.
‘These will boost median prices of apartments/condos transacted in the sub-sale market. In addition, a strong take-up for these forthcoming high-profile launches may also lead buyers who are unable to secure a choice unit to remain interested in the sub-sale market for several top-quality projects which have been previously released at lower prices.’
Source: The Business Times, 29 August 2006
DTZ Debenham Tie Leung’s latest analysis of caveats shows the median price of private apartments and condos that changed hands in the sub-sale market in Q2 jumped 37% from Q1. The median price rose from $598 per square foot in Q1 to $822 psf in Q2.
This was the highest level since $830 psf a decade ago in Q2 1996 at the peak of the property market, according to the firm’s analysis of caveats captured by the URA Realis database.
Subsales essentially refer to cases in which buyers who bought from developers sell in the secondary market prior to the project receiving Certificate of Statutory Completion. The certificate is typically issued about a year after a project receives Temporary Occupation Permit.
Sub-sales - often seen as a proxy of the level of speculative activity in the property market - were transacted largely for apartments/condos in the higher price brands in the April-June quarter this year, DTZ says.
The two highest price bands DTZ used in its five-tier analysis - units costing $1 million to less than $1.4 million, and units priced at $1.4 million and above - accounted for 44 per cent of total sub-sale transactions in Q2.
These two price bands posted respective quarter-on-quarter increases of 73% and 23% in the number of sub-sale deals. There was also a 60% quarter-on-quarter rise in number of sub-sales of units costing $800,000 to less than $1 million.
DTZ attributes this partly to strong interest in exclusive projects that were either completed recently or are nearing completion - such as The Pier at Robertson along the Singapore River, and The Berth By The Cove at Sentosa Cove.
‘People who want to buy homes for owner occupation or for investment with immediate rental income flow tend to prefer a unit that is nearing or has received Temporary Occupation Permit,’ says DTZ executive director Ong Choon Fah.
She also points to sub-sale interest in popular projects such as Icon in Tanjong Pagar, The Berth by The Cove and The Sail @ Marina Bay (first tower) that were launched by developers a few years ago at prices lower than those of similar projects released recently.
For instance, Ho Bee launched The Berth by The Cove in late 2004 at an average of $785 psf. Condo units there today would be worth more than $1,000 psf, property agents say.
DTZ says: ‘With the price recovery in high-end residential projects, those who bought units earlier in such developments have been able to benchmark the value of their properties against the newer projects.
‘This has created an opportunity for them to sell their units in the sub-sale market to the increasing number of buyers who are keen on such high-profile exclusive projects.’
DTZ’s analysis shows that while there was a pick-up in sub-sale deals in the higher price bands in Q2, activity in the two lowest price tiers declined from the preceding three months. As a result, the total number of apartments and condos sold in the sub-sale market for Q2 - at 115 - was hardly changed from the Q1 figure of 113.
Buyers with HDB addresses continued to account for a lower share of the number of sub-sale deals for private apartments and condos, down to to 23% in Q2 from 38% in Q1.
The firm also notes that the number of sub-sales continued to remain relatively low in Q2 - at 2.8% of the total 4,096 apartment and condo transactions in the quarter.
‘Going forward, while sub-sales will still be significantly lower than the levels between 1996 and 1999, the momentum for the sub-sales market is expected to strengthen on the back of the recovery of the high-end residential market and several high-profile projects that are expected to be launched,’ DTZ says.
‘These will boost median prices of apartments/condos transacted in the sub-sale market. In addition, a strong take-up for these forthcoming high-profile launches may also lead buyers who are unable to secure a choice unit to remain interested in the sub-sale market for several top-quality projects which have been previously released at lower prices.’
Source: The Business Times, 29 August 2006
Saturday, August 26, 2006
Making a Quick Profit from Good Class Bungalows
Some rich people are getting richer by selling their new Good Class Bungalows (GCBs) for a quick profit.
An analysis of caveats by Savills Singapore revealed that eight such properties were bought and resold at an average profit of about 20% in the past 12 months.
And considering that GCBs now easily cost upwards of $10 million, the investment returns are attractive.
A caveat is a legal document lodged with the Singapore Land Authority by a purchaser to protect his/her interests after an option to purchase is exercised or a Sales & Purchase Agreement is signed.
According to the caveats lodged, one GCB in Peirce Road was bought eight months ago for $4.3 million and resold three months later for $9 million. Another in Queen Astrid Park was bought for $12.5 million and resold a month later for $16 million.
Steven Ming, director of Savills’ GCB arm Prestige Homes, said the number of ‘quick sales’ has increased since the property market started to pick up but added: ‘A point to note is that it does not make up a lot of transactions.’
GCBs are located in designated areas, mostly in District 10, and have to be on a plot of at least 15,000 sq ft. There are about 2,500 such homes here.
Savills’ analysis did not include detached houses on plots of less than 15,000 sq ft. As such, it does not include the many new houses coming up at Sentosa Cove or ordinary detached houses that may sit on land as small as 4,300 sq ft up to 15,000 sq ft.
Mr Ming estimated that about 10% of recently transacted GCBs have been bought and resold within a year, with an increasing number bought by permanent residents. So far this year, there have been 68 transactions.
The ‘quick sales’ - Mr Ming believes ’speculation’ is too strong a word - can mostly be attributed to opportunistic selling.
‘Some buyers went into the market one or two years ago without anticipating that prices would increase,’ he said.
But with his 12-month projection of a further 10-15% increase in prices for GCBs - similar to that for high-end condominiums - more may see GCBs as a lucrative investment.
Giving an insight into GCB buyers, Douglas Wong, associate director of Knight Frank’s GCB arm Regal Homes, said the pool of buyers is very small.
‘There are probably between 800-1,000 such buyers and many of them own more than one GCB. Some own three to four,’ he said.
Mr Wong also believes that ’speculator’ is not the right term for these investors. ‘They are not really speculators because it’s not easy to speculate in this segment,’ he said, referring to the big price tags.
Mr Wong, who has been in this market for close to 10 years, believes that these buyers are long-term investors.
Still, he too has seen some ‘quick sales’ recently, saying that one GCB in the Nassim area was recently sold for $15 million by a buyer who paid $9.8 million for it a year ago.
Perhaps the surest sign that the GCB market is hot must be that the first collective sale could take place soon.
Credo Real Estate is marketing a 26,254 sq ft GCB site in Bin Tong Park, and Credo managing director Karamjit Singh said the owners of the neighbouring GCB are keen to cash out too, so much so that they are prepared to either sell part of their own land or even the whole plot as a ‘collective sale’.
The two GCBs combined could yield enough land for a total of three GCBs, so even if the present owners choose to stay, they could sell one house for $11-13 million.
Mr Singh estimated that the potential return on such a development could be 20-3%, ‘which is not bad’, he said.
Source: The Business Times, 28 August 2006
An analysis of caveats by Savills Singapore revealed that eight such properties were bought and resold at an average profit of about 20% in the past 12 months.
And considering that GCBs now easily cost upwards of $10 million, the investment returns are attractive.
A caveat is a legal document lodged with the Singapore Land Authority by a purchaser to protect his/her interests after an option to purchase is exercised or a Sales & Purchase Agreement is signed.
According to the caveats lodged, one GCB in Peirce Road was bought eight months ago for $4.3 million and resold three months later for $9 million. Another in Queen Astrid Park was bought for $12.5 million and resold a month later for $16 million.
Steven Ming, director of Savills’ GCB arm Prestige Homes, said the number of ‘quick sales’ has increased since the property market started to pick up but added: ‘A point to note is that it does not make up a lot of transactions.’
GCBs are located in designated areas, mostly in District 10, and have to be on a plot of at least 15,000 sq ft. There are about 2,500 such homes here.
Savills’ analysis did not include detached houses on plots of less than 15,000 sq ft. As such, it does not include the many new houses coming up at Sentosa Cove or ordinary detached houses that may sit on land as small as 4,300 sq ft up to 15,000 sq ft.
Mr Ming estimated that about 10% of recently transacted GCBs have been bought and resold within a year, with an increasing number bought by permanent residents. So far this year, there have been 68 transactions.
The ‘quick sales’ - Mr Ming believes ’speculation’ is too strong a word - can mostly be attributed to opportunistic selling.
‘Some buyers went into the market one or two years ago without anticipating that prices would increase,’ he said.
But with his 12-month projection of a further 10-15% increase in prices for GCBs - similar to that for high-end condominiums - more may see GCBs as a lucrative investment.
Giving an insight into GCB buyers, Douglas Wong, associate director of Knight Frank’s GCB arm Regal Homes, said the pool of buyers is very small.
‘There are probably between 800-1,000 such buyers and many of them own more than one GCB. Some own three to four,’ he said.
Mr Wong also believes that ’speculator’ is not the right term for these investors. ‘They are not really speculators because it’s not easy to speculate in this segment,’ he said, referring to the big price tags.
Mr Wong, who has been in this market for close to 10 years, believes that these buyers are long-term investors.
Still, he too has seen some ‘quick sales’ recently, saying that one GCB in the Nassim area was recently sold for $15 million by a buyer who paid $9.8 million for it a year ago.
Perhaps the surest sign that the GCB market is hot must be that the first collective sale could take place soon.
Credo Real Estate is marketing a 26,254 sq ft GCB site in Bin Tong Park, and Credo managing director Karamjit Singh said the owners of the neighbouring GCB are keen to cash out too, so much so that they are prepared to either sell part of their own land or even the whole plot as a ‘collective sale’.
The two GCBs combined could yield enough land for a total of three GCBs, so even if the present owners choose to stay, they could sell one house for $11-13 million.
Mr Singh estimated that the potential return on such a development could be 20-3%, ‘which is not bad’, he said.
Source: The Business Times, 28 August 2006
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