Tuesday, April 25, 2006

Two sites near Orchard Rd up for collective sale Hitting the jackpot?

Furama Tower going for $82m, Lucky Tower up for whopping $400m
By Joyce Teo
Property Correspondent
 
TWO prime residential sites near Orchard Road have been put up for collective sale, but the record price being asked for one of them left some property experts shaking their heads.
 
The sites are the 33-unit Furama Tower in Leonie Hill Road, on sale for a relatively modest $82 million, and Lucky Tower, a potential $400 million Grange Road goldmine.
The latter comprises 91 units over 169,188 sq ft, including a shop, but market-watchers are sceptical about its whopping asking price, despite the prime location.
They cite signs that developers are baulking at acquiring increasingly expensive properties being sold en bloc.
 
'Developers have a limited budget and appetite,' said an industry source.
'Developers can't soak up all the plots out there at higher and higher prices,' said another industry source.
 
'Tender bids are not as aggressive as six months ago. Almost every developer has bought something in the past one to two years so they would be more cautious now.'
Lucky Tower could find itself in the super league of properties sold for over $1,000 per sq foot. Its asking price is at $1,126 on a per sq ft per plot ratio (psf ppr) basis, inclusive of a $20 million development charge.
 
That puts it above the $1,064 psf ppr price, or $266 million, SC Global paid for Paterson Tower last month.
 
Since February, three sites have been sold for over $1,000 psf with Eng Lok Mansion in Napier Road reaching $1,218 psf last month. This all-time high was likely achieved because the site is conducive for medical suites.
 
Lucky Tower is being marketed by its managing agent, Newman & Goh Property Consultants, in what is the firm's first collective sale launch. The tender closes May 24.
 
Its breakeven is estimated at around $1,500-$1,700 psf. But nearby projects, such as The Grange, are selling for only around $1,500-$1,600 psf, said a source.
'There are a lot of comparables in the Orchard Road area. Where Lucky Tower is, if you're not careful, you'll be walking into River Valley!'
 
But Newman's head of investment sales, Mr Jeffrey Goh, is optimistic as foreign and local developers are keen.
 
Newman said Lucky Tower has an estimated value of $600 million and could accommodate 165 luxurious apartments costing around $2,000 psf each.
Mr Goh, who plans to advertise the site in Hong Kong, said a listed Hong Kong developer and a Dubai-based one have told him they are keen.
 
Meanwhile, Colliers International is putting Furama Tower up for sale at $82 million, or $936 psf ppr, including a $6.6 million development charge. Its tender closes on May 23.
 
While some experts talk of a more cautious market, the deals so far this year have been eye-catching.
 
Last week, Hilltops Apartments at Cairnhill Circle was sold for $294 million, or $951 psf ppr, putting sales this year at 20 deals worth $1.9 billion.
 
Compare this with last year when 49 deals worth $2.2 billion were done, according to Credo Real Estate, which specialises in collective sales.
 
Executive director Karamjit Singh said: 'Developers and investors still have a lot of confidence in the high-end market, particularly in foreigner-led demand.'
 
But the pace at which deals are being done suggests a slowdown is on the horizon: 'The market will likely take a breather in the third quarter.'
 
Until then, collective sale fever seems to remain unabated as sellers race to get the best offer.
 
'Everybody is trying to test the market,' said Jones Lang LaSalle regional director Lui Seng Fatt.
 
'It has recovered but there is a fair bit of stock around. The sites that are priced more realistically will go first.'
 
 
Hitting the jackpot?
 
LUCKY Tower could find itself in the super league of properties sold for over $1,000 per sq foot.
 
Its asking price is at $1,126 on a per sq ft per plot ratio basis, inclusive of a $20 million development charge.
 
But observers say there are signs that developers are baulking at acquiring increasingly expensive properties being sold en bloc.

 

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// posted by Shajahan @ 10:16 AM


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