District 8 property jumps on bandwagon of developments trying for collective sale
Kentish Green, a 122-unit condominium in District 8, has been launched for en bloc sale with a reserve price of $230 million announced its marketing agent ERA Realty. The owners of the property at Oxford Road off Rangoon Road have set a reserve price of $230 million for the 59,143 sq ft site. Based on the reserve price, the owners will get $1.736 million to $2.086 million each. The tender for Kentish Green will close on 21 August.
The District 8, 99-year-leasehold property located at 20 Oxford Road, was completed in 1998. It has 5-storeys, comprising of 122 units. ERA said that the redevelopment site can accommodate 219 to 259 apartments, as well as house a small commercial component. Successful bidders would have to pay a premium to top up the existing balance lease to 99 years by paying a premium, estimated at $20 million.
Kentish Green is located within walking distance to Farrer Park train station. It takes about 10 minutes to drive to the business hub and the Orchard Road shopping district, via Central Expressway or Scotts Road. Prestigious schools like Farrer Park Primary School and St Joseph’s Institution Junior are within the vicinity of the District 8 site. Numerous restaurants and eating establishments are located a stone’s throw away from the site.
For daily necessities, the Tekka Centre is nearby. Food Centres or shopping centres such as Serangoon Plaza and City Square Mall are also located within walking distance. In addition, the Tan Tock Seng Hospital is located close by. Facilities at the private residential property include a swimming pool, covered car park, 24 hours security, BBQ pits, landscaped gardens, pavilions, and a playground.
ERA said that the upcoming Russian Cultural Centre in neighbouring Rangoon Road could be another draw for would be bidders of the District 8 property, as it could help drive demand for retail activity and accommodation within the area, Works on the cultural centre is expected to start later in the year to commemorate 50 years of diplomatic relations between Singapore and Russia.
The owners of the District 8 property had previously submitted an outline application to the Urban Redevelopment Authority (URA) to increase the site’s gross plot ratio to 3.0 from its current 2.8.
There is a possibility for the property to be redeveloped into a 28 storeys building if a formal development application is made to URA to raise the height of the development to 104 metres above mean sea level. The URA advice is valid for six months starting from May.
URA’s flash estimate of the price index for private residential property for 2nd Quarter 2018 suggested that property price momentum here remains buoyant. Overall, the private residential property index increased 4.9 points from 144.1 points in 1st Quarter 2018 to 149.0 points in 2nd Quarter 2018. This represents an increase of 3.4%, compared to the 3.9% increase in the previous quarter.
Prices of non-landed private residential properties increased by 1.4% in Core Central Region (CCR), compared to the 5.5% increase in the previous quarter. Prices in the Rest of Central Region (RCR) increased by 5.7%, after registering an increase of 1.2% in the previous quarter. Property prices in Outside Central Region (OCR) increased by 2.9%, after registering a 5.6% increase in the previous quarter.
The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment and data on units sold by developers up till mid-June. The statistics will be updated on 27 July 2018 when URA releases its full set of real estate statistics for 2nd Quarter 2018.
Past data have shown that the difference between the quarterly price changes indicated by the flash estimate and the actual price changes could be significant when the change is small. URA advised the public to interpret the flash estimates with caution.
The en bloc sale launch of District 8 property, however, comes at a time when the collective sales market is expected to be dampened by the new property cooling measures.
Property market observers suggest that developers may become wary of end-demand and will be hurt by the 5 per cent non-remittable Additional Buyers’ Stamp Duty on land purchases, which will impact their offer on prices.
Leading developers have challenged the Government’s latest round of property cooling measures saying there was “no rationale” for the new property curbs. The Real Estate Developers’ Association of Singapore (Redas) said last week that market started to pick up only last year and the volume of transactions is within expectations and said that the market should be allowed time to find its own course.
Some observers said that rising prices in Singapore were not driven because of strong demand-and-supply, but because of strong property market sentiments. They said the Government introduced the new property curbs fearing the record land bids and redevelopment deals threatened to undo previous restrictions, which prevented a property market bubble from forming here.
The Government justified the new property curbs as being necessary to check sharp increase in prices, which could run ahead of economic fundamentals and raise the risk of a destabilising correction later, especially with rising interest rates and the strong pipeline of housing supply.
For foreign purchases of residential property, the additional buyer’s stamp duty has been raised to 20 percent from 15 percent, while for Singaporeans the extra charges apply only from their second home purchase, the Monetary Authority of Singapore, Ministry of National Development and Ministry of Finance said in a joint statement last week.
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