Tuesday, May 09, 2006
En bloc sales in Singapore surge to $2.9b in just four months
The first four months of this year have seen nearly 50 per cent more en bloc property sales than the whole of last year.
Transactions are also getting more lucrative for home-owners selling up.
In just four months, developers have bought up some $2.9 billion worth of older, under-utilised residential properties across Singapore.
That compares to $2 billion worth of en bloc properties changing hands for the whole of 2005, according to figures from Cushman and Wakefield.
And sellers have been reaping good profit.
Donald Han, Managing Director, Cushman & Wakefield, said: "The previous peak in 1995, 1996 the margins tend to be anything between 100 per cent to 200-300 per cent. So in that sense, it was a very profitable market. Then the in 2005, we had margins that owners were reaping between 30-50 per cent. That profit margin has begun to creep up this year. Some of the projects we saw owners reap profit margin of as high as 50-100 per cent."
Consultants say transactions have been brisk because of the strength in the high-end residential market.
And the premiums being paid are seen as a reflection of the confident outlook.
Mr Han said: "The party will continue to become strong, it will continue to be a sellers market. Developers have begun their land-banking exercise 6 months ago. I think there is another six to nine months of cycle before it turns around to be a buyers market. At this time land-banking process will not stop."
The acid test is the next three to six months.
So far, the bulk of the sales have been freehold properties but 99-year leasehold properties should not be discounted.
Consultants say the pick-up in the en bloc sales of 99-year leasehold properties will depend on the quality of residential sites in the Government Land Sales for the second half of this year.
Nonetheless, 99-year sites that are well located should still interest developers. - CNA/ch
Transactions are also getting more lucrative for home-owners selling up.
In just four months, developers have bought up some $2.9 billion worth of older, under-utilised residential properties across Singapore.
That compares to $2 billion worth of en bloc properties changing hands for the whole of 2005, according to figures from Cushman and Wakefield.
And sellers have been reaping good profit.
Donald Han, Managing Director, Cushman & Wakefield, said: "The previous peak in 1995, 1996 the margins tend to be anything between 100 per cent to 200-300 per cent. So in that sense, it was a very profitable market. Then the in 2005, we had margins that owners were reaping between 30-50 per cent. That profit margin has begun to creep up this year. Some of the projects we saw owners reap profit margin of as high as 50-100 per cent."
Consultants say transactions have been brisk because of the strength in the high-end residential market.
And the premiums being paid are seen as a reflection of the confident outlook.
Mr Han said: "The party will continue to become strong, it will continue to be a sellers market. Developers have begun their land-banking exercise 6 months ago. I think there is another six to nine months of cycle before it turns around to be a buyers market. At this time land-banking process will not stop."
The acid test is the next three to six months.
So far, the bulk of the sales have been freehold properties but 99-year leasehold properties should not be discounted.
Consultants say the pick-up in the en bloc sales of 99-year leasehold properties will depend on the quality of residential sites in the Government Land Sales for the second half of this year.
Nonetheless, 99-year sites that are well located should still interest developers. - CNA/ch
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// posted by Shajahan @ 10:02 AM 