singapore property weekly issue 232

8/20/2019 Singapore Property Weekly Issue 232

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Issue 232Copyright © 2011-2014 www.Propwise.sg . All Rights Reserved.

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CONTENTS

p2 Secrets to My Investment Success

p7 Singapore Property News This Week

p11 Resale Property Transactions

(October 14 – October 20 )

Welcome to the 232 th edition of theSingapore Property Weekly .

Hope you like it!

Mr. Propwise

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 232

Page | 2Back to Contents

By Gerald Tay (guest contributor)

I’m probably not being modest in this post.Pardon me if I sound overly boastful on thesuccess I had with my real estate investments

over the last 14 years. It is to help youunderstand the key differences betweenbeing a mediocre and a truly successfulinvestor.

All of my real estate investments over theyears have made more than a 20% a year

compounded return per property. Some evenhigher. The returns comes from sales and netrental income of the properties.

Secrets to My Investment Success


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Since late 2012 I’ve sent many warnings tobuyers – be extremely cautious or avoidbuying local and overseas investmentproperties. My predictions were proven rightfor the local property market. Today, propertyprices and rents are slowly falling and theworse is yet to come. I believe if a buyer were to have bought into the peak of 2013,they would very likely not see reasonablereturns for many decades.

Guts and conviction to be different fromthe crowd

In 2010, my US partners and I started lookinginto US Real Estate (RE) for great buyingopportunities. We were eagerly seeking co-

investors to snap up under-valued US RE –direct from seller and resale only.

One especially undervalued propertysegment is US Commercial RE. The market

is hugely untapped and shunned by manyordinary US investors. The complexitiesinvolved with buying into such large-scaleproperties are very different from buying aresidential property. Price is another factor asmany could not afford the hefty price tag thatcomes with Commercial RE. Priceseasilyranged from US$2 million and upwards.Comparatively, the price of a quality USSingle-Family Home costs $150,000 onaverage.

Furthermore, banks do not easily grant loansto buyers with zero experience in CommercialRE. Sellers will also reject an inexperiencedbuyer’s LOI (Letter of Intent) as they are

afraid the deal will not go through because of the complexities involved in handling suchproperties, and market negativity from a faileddeal will affect their selling price afterwards.


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Therefore, many inexperienced buyers divedinto the “safe” US residential market instead,driving up home prices. The US CommercialRE market remains today an excellent

investment prospect for savvy andknowledgeable investors. These propertiesare tenanted by large USCompanies (Citibank, Burger King, Dollar Tree, Home Depot, etc) listed on US stockexchanges. They are largely undervalued inprice and rental income.

In 2011, I urged investors to look into thisoverseas market segment as I was confidentwe would get good and stable returns over the next five years and beyond.

Many property buyers don’t know better

First example: Everyone I knew investinginto the US real estate market was either

jumping into expensive cities like New York or were buying into bankrupt cities like Detroit.They thought buying a property priced at only$30,000 was a steal. Overseas buyers of cheap properties often ended up with losses.

Second example: At one point the US dollar

went as low as S$1.20. It was the best time tosnap up quality US RE at a low price with thelow exchange. Instead, investors wereworried about the weakening of the US Dollar to the Singapore Dollar. Some were sayingthe US Dollar might even weaken further from

US$1 to S$1.


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In 2012, if you simply exchanged Singaporedollars for US dollars, you would haveprofited with a 5% per year compoundedreturn just on currency appreciation.

Third example: The Net Rental Yield (CapRate) in 2012 for US Commercial RE went ashigh as 8% per year for properties with stable,high quality tenants. This simply means thepurchase price was exceptionally low with a

high rental income. A buyer would get astable long-term tenancy with fixed leases,some as long as 20 years, and a yearly rentalincrement as stated in a contract.

However, amateurish investors tell me suchreturns were too low for them. They were

promised guaranteed total returns as high as20% for some overseas properties.

Our USA commercial properties are doingextremely well considering recent marketupheavals. My co-investors and I have seengood price, rental and currency appreciation

since we purchased in 2013. Valuation for one of our properties surged from US$2.2million in 2013 to US$2.6million in 2015. All of our US commercial properties are fullyoccupied with a 3% yearly rental incrementand new 5 to 10 year fixed leases.

Missing the woods for the trees

Successful investors are no different fromsuccessful entrepreneurs. Successful peoplereject popular thinking. They avoid going withthe herd. To reject popular thinking you must

be OK with feeling uncomfortable. To besuccessful, you need to see the woods andignore the trees.


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I’ve been successful with my investmentsbecause I:

Bought local Singapore properties duringthe down period of 2003 to 2006 whenothers were avoiding this

Saw old resale properties as greatinvestments while others rushed for newproperty launches

Loved adding value to my properties toenhance them

Invested in depressed USA assets

Bought when prices were low andavoided buying when it was going up

Sought reliable foreign partners for myoverseas investments

Every once in a while, a great opportunitycomes along and changes everything. And

you’re going to be very fortunate just to workon that one opportunity that may change your life.

I don’t believe in luck. Luck is leaving thingsto chance and the outside world. I believe intaking action and creating my own path in life.Your life is yours to create.

By guest contributor Gerald Tay, who is thefounder and coach at CREI Academy Group

Pte Ltd , an organization dedicated toempowering retail property investors withsmarter investing philosophy and strategies.He is a full-time investor with over 13 years of solid experience in building his wealththrough Property Investment and is financially

wealthy today.

http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/http://www.crei-academy.com/


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Singapore Property This Week


ResidentialPr ices of comple ted condos up by 0 .1% in

Sep f rom Au g

According to flash estimates by NUS, theprices of completed condos have increased

by 0.1% in September from August.Nonetheless, prices of completed units in thecentral region saw a 0.4% drop in September from the previous month. Month-on-month,the Singapore Residential Price Index (SRPI)has recorded a fall in prices for five months

since April this year. Ong Kah Seng fromR’ST Research said that the price increase of small units of up to 506 sq ft in September was due to overall instability in the marketgiven the surge in completion of small units

since last year. HDB flat owners have kepttheir shoebox units vacant since their completions and may be more willing to let goof those units at a lower price now. EugeneLim from ERA Realty said that the increase inprices could have been due to a lack of major

project launches.(Source: Business Times)

M o re t h an o n e i n f iv e r es al e f l at b u y er s

appl ied for the Proximi ty Hous ing Grant

According to the Business Times, more thanone in five flat buyers over the past twomonths has applied for the Proximity HousingGrant (PHG). As income ceilings have beenraised to $12,000, about one in 10

S GA O O 232


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first-timer families and singles are noweligible for the CPF Housing Grant. Minister for National Development Lawrence Wongsaid that the PHG scheme has been

extended to all Singaporean families becausethe ministry recognised the desire to livecloser to parents and children is shared by aspectrum of Singaporeans, not just first-timer couples. According the MND, there were3,506 resale transactions over a two-month

period since 24 August this year. Ong KahSeng from R’ST Research said that since theexecutive condominium owners are not ableto rent out their flats in the first 5 years, theincrease in buyers may not be substantialdespite higher income ceilings. This isbecause these buyers may not be drawnaway from the private condo market.

(Source: Business Times)

GCB transact ions totals $177 mil l ion in Q3

In Q3, 9 good class bungalows (GCB)changed hands. This translated to about $177million in total, down from the $282 millionthat was amassed from the sale of 11 GCBsin Q2. In the first 9 months of this year, theGCB sale tally stands at 24 deals totalling$554 million. This was higher than the $511million transacted in the same time period a

year ago. Among the GCBs sold in Q3 thisyear, a freehold bungalow at Tanglin Hillchanged hands for $25 million or $1,539 psf.Samuel Eyo from Christie’s International RealEstate believes that this price was reasonableconsidering the location of the house and also

the cost needed to rebuild it.(Source: Business Times)

SINGAPORE PROPERTY WEEKLY I 232


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Commercial

No bids accepted for Ubi indus t r ial s i te

HDB has declined bids for an industrial

development site at Ubi because the pricesoffered were too low. The site, which waslaunched for tender in June this year, is 0.6ha large and has been zoned for Business 1use. It has a lease term of 30 years and amaximum gross plot ratio of 2.5. A total of 5

bids were placed for the site, and the highestbid was placed at $19.9 million or $120.91 psf ppr. Tan Boon Leong from Colliers said thatthe pricing was reasonable due to theoversupply of industrial spaces.


Warehouse bu i ld ings a t Tampines up fo r

sale

Two adjacent multi-storey warehousebuildings at Tampines have been put up for sale. The properties may be bought jointly or separately, and both have been zoned for Business 2 use. The sites have a plot ratio of 1.4 and have balance lease tenures of 22years. Shaun Poh from Cushman & Wakefieldsaid that the buildings would be ideal for end-users such as e-commerce and logisticscompanies that want to operate from their own buildings. The buildings are notsubjected to rules imposed by JTC since theysit on private land. Their combined indicative

pricing is about $70 million and theexpression of interest exercise will close on 4December.


SINGAPORE PROPERTY WEEKLY I 232


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Non-Landed Residential Resale Property Transactions for the Week of Oct 14 – Oct 20

PostalDistrict

Project NameArea(sqft)

TransactedPrice ($)

Price($ psf)

Tenure

2 SPOTTISWOODE PARK 1,270 800,000 630 99

4 TERESA VILLE 1,927 2,150,000 1,116 FH5 THE PEAK@BALMEG 1,948 2,500,000 1,283 FH

5 DOVER PARKVIEW 1,249 1,350,000 1,081 99

5 THE SPECTRUM 1,292 1,310,000 1,014 FH

5 DOVER PARKVIEW 969 980,000 1,012 99

8 MERA SPRINGS 1,292 1,708,000 1,322 FH

8 PRISTINE HEIGHTS 850 1,075,000 1,264 FH

9 CENTENNIA SUITES 2,271 5,100,000 2,246 FH

10 ARDMORE PARK 2,885 8,500,000 2,947 FH

10 ARDMORE PARK 2,885 8,300,000 2,877 FH10 NATHAN SUITES 1,776 3,150,000 1,774 FH

10 ASTRID MEADOWS 1,356 2,200,000 1,622 FH

10 MONTVIEW 1,507 2,130,000 1,413 FH

10 CHARMING GARDEN 1,808 2,550,000 1,410 999

10 DORMER PARK 1,270 1,680,000 1,323 FH

10 DUCHESS CREST 1,841 2,200,000 1,195 99

14 ESTA RUBY 1,130 1,450,000 1,283 FH

14 LE CRESCENDO 1,539 1,750,000 1,137 FH

15 THE BELVEDERE 1,259 2,050,000 1,628 FH15 COSTA RHU 2,239 2,900,000 1,295 99

15 AMBER RESIDENCES 1,798 2,320,000 1,291 FH

15 KINGS APARTMENTS 1,173 1,200,000 1,023 FH

15 JOO CHIAT MANSIONS 1,238 1,130,000 913 FH

15 VILLA MARINA 2,314 1,755,000 758 9 9

16 CASA MERAH 1,345 1,525,000 1,133 99

PostalDistrict

Project NameArea(sqft)

TransactedPrice ($)

Price($ psf)

Tenure

16 COUNTRY PARK CONDOMINIUM 1,087 1,180,000 1,085 FH

16 CASA MERAH 1,227 1,330,000 1,084 9916 BAYSHORE PARK 936 800,000 854 99

16 APOLLO GARDENS 2,120 1,659,600 783 FH

16 KEW GREEN 3,025 2,050,000 678 99

17 FERRARIA PARK CONDOMINIUM 1 ,087 1 ,020 ,000 938 FH

17 WATERCREST 1,324 1,090,000 823 999

18 WATERVIEW 4,402 2,550,000 579 99

19 A TREASURE TROVE 1,044 1,200,000 1,149 99

19 A TREASURE TROVE 1,044 1,150,000 1,101 99

19 KOVAN MELODY 1,292 1,400,000 1,084 9919 CHILTERN PARK 1,518 1,385,000 913 99

20 THE GARDENS AT BISHAN 883 908,888 1,030 99

20 BRADDELL VIEW 1,701 1,330,000 782 99

21 THE CASCADIA 1,238 1,830,000 1,478 FH

21 GARDENVISTA 1,130 1,428,000 1,263 99

21 THE RAINTREE 1,313 1,330,000 1,013 99

22 PARC VISTA 1,281 1,025,000 800 99

22 IVORY HEIGHTS 1,668 1,150,000 689 100

26 SEASONS PARK 1,292 1,130,000 875 99

27 ORCHID PARK CONDO MINIUM 1,152 880,000 764 99

NOTE: This data only covers non-landed residential resale propertytransactions with caveats lodged with the Singapore Land Authority.Typically, caveats are lodged at least 2-3 weeks after a purchasersigns an OTP, hence the lagged nature of the data.



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