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Big plans for Little India

Posted by Singapore Property Launch on 26th September 2016 in Blog
Sri Srinivasa Perumal Hindu Temple and Skyscraper, Singapore

In Little India, Hindu temples sit right next to modern condominiums.

Gazetted as a conservation area in 1989, Little India retains much of its old-world charm, with many shophouses and religious monuments still standing today. However, there are plans to make the area more vibrant and liveable, with new residential and commercial developments taking shape.

By Romesh Navaratnarajah

31-year-old Jagwinder Singh has seen first-hand the evolution of his home and workplace of Little India.

He has spent the last 15 years living in the area and helps to run Jaggi’s, a family-owned restaurant temporarily located at Chander Road, which is known for its North Indian cuisine.

Singh told PropertyGuru that he likes the vibrancy of the neighbourhood, which was designated as a conservation area in 1989.

Today, it is home to religious monuments, saree shops, popular eateries and backpacker hostels.

He describes the experience as “living in the heartlands, but also within the city at the same time. You can see shophouses, commercial buildings, restaurants and HDB flats within the vicinity,” he said.

Ong Teck Hui, National Director of JLL Research, believes the key advantage of Little India as a submarket is its proximity to the city centre.

“It is just one or two MRT stops away to Dhoby Ghaut interchange from either the Little India or Farrer Park stations.

“That makes it easy to get to Orchard Road or the Raffles Place / Marina Bay financial district,” he said.

Ong noted that its rich history and cultural importance as an enclave of Singapore’s Indian community has also helped Little India to grow into a busy commercial hub and tourist attraction.

Having a riot

Still, the area has its fair share of social problems. “On weekends, you see a very different scene,” said Singh, referring to the thousands of South Asian workers who gather in Little India to socialise and relax.

While their presence is generally accepted by residents, there are reports of some foreign workers getting into drunken brawls and engaging in other anti-social behaviour, such as littering, spitting and public urination.

Some years ago, Little India received international attention, but for all the wrong reasons, after Singapore’s first riot in 40 years was sparked following a fatal accident involving a foreign worker.

A total of 27 suspects were later arrested while 18 people were injured.

Such incidents have unfortunately tarnished Little India’s reputation to some degree, but Singh pointed out that the situation has improved greatly, with increased police patrols and hefty fines imposed.

For instance, there is a $300 composition fine for first-time offenders caught spitting in public.

Condo boom

Nonetheless, the area’s city fringe location and proximity to amenities such as MRT stations, shops and eateries is spurring the construction of new residential developments, including the 305-unit Sturdee Residences.

The condominium located at Sturdee Road was launched in end-April by developer Sustained Land.

To date, 185 units (60 percent) have been sold, beating market expectations. The 99-year leasehold project comprises one- to five-bedroom units across two 30-storey towers, with sizes ranging from 420 sq ft to 1,830 sq ft.

According to JLL’s Ong, the project has an average price of $1,604 psf, with the average unit size of 620 sq ft within the popular size range for many investors.

Sturdee Residences is expected to be completed in 2020, and the project’s location is without a doubt its main selling point.

Responding to media queries, a spokesperson for Sturdee Residences said that the surrounding area is rapidly transforming, and will be a natural extension of the Ophir-Rochor growth area.

To be developed over the next 10 to 15 years, the Ophir-Rochor area will comprise new integrated mixed-use developments featuring offices, hotels and residences, set within a garden-like environment, revealed the Urban Redevelopment Authority’s (URA) Master Plan.

“While the highly-anticipated Ophir-Rochor corridor is underway, a Soho-like movement is also taking flight in some parts of the neighbourhood, particularly in Rangoon Road and the Jalan Besar area,” said the spokesperson.

“With the arrival of the Downtown Line’s Bendemeer MRT station and the completion of the Ophir-Rochor corridor, among other exciting developments, we expect this area to be an even more coveted address than ever.”

 

Sturdee Residences

Sturdee Residences is a 99-year leasehold project located at Sturdee Road.

 

Hotly contested site

Separately, the URA plans to launch the public tender for a residential site at Perumal Road in Farrer Park in November, under the second half 2016 Government Land Sales (GLS) Programme.

Property agency OrangeTee expects the Perumal Road site to do well due to its relatively small size of 0.39ha, central location, and proximity to Farrer Park MRT station. It could yield around 200 units.

“The total number of bids are expected to come in at around 10 to 20 bids, with the winning bid ranging from $830 to $890 psf per plot ratio,” said OrangeTee.

Expats moving in

Little India’s rental market is seeing brisk transactions as well.

For example, City Square Residences in Kitchener Link has proven to be popular among tenants, with the two-bedroom or smaller units forming a significant proportion of units leased, said Ong.

He noted that in the second quarter of 2016, the average rent for one-bedroom units was between $2,700 and $2,800 per month, while two-bedroom units averaged around $3,400 to $3,500 per month. Three-bedroom units commanded an average of $4,200 to $4,300 per month.

Said Ong: “This shows that while Little India is close to the city and provides abundant amenities, rents there are reasonably affordable, especially to budget conscious tenants.

“Hence, Little India has become popular among tenants and investors.”

New shops, healthcare facilities

Meanwhile, the upcoming supply of residential units is also pushing demand for new commercial spaces.

For many years, the 24-hour shopping mall Mustafa Centre thrived without much competition, before City Square Mall, Singapore’s first eco-mall, opened in 2009.

In March this year, Farrer Park Hospital officially opened its doors to serve patients.

The 220-bed facility hospital is part of a fully-integrated healthcare-hospitality complex named Connexion, built directly above Farrer Park MRT station for more than $800 million.

A check of listings on CommercialGuru shows that rents for the medical suites at Connexion range between $7 psf and $8 psf per month.

“New developments such as Connexion at Farrer Park, an integrated hospital, medical centre and hotel complex, make the district even more vibrant,” said Ong.

credits: propertyguru

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8 things to look out for when applying for a business property loan

Posted by Singapore Property Launch on 24th September 2016 in Blog
8 things to look out for when applying for a business property loan

Getting a business property loan will not be so hard if you follow these tips that can raise your chances you of securing one.

When you have taken out a home loan, it is easy to assume that all loans involving property assets are the same. However, while loans, in general, have a basic set of requirements customers must satisfy—others come with set of specific eligibility standards that are unique to that particular loan.

While you might have a good understanding about home loans, it does not always equate to knowing about business property loans. Whether you are purchasing a property for your own business use or intend to lease it out, the criteria that you have to fulfill in order to obtain a business loan are distinctly different from those of a home loan.

But while the terms of business property loans can vary dramatically depending on the specifics of your transaction, getting a business property loan should not be complicated especially if you avoid common mistakes that keep consumers form successfully securing a loan.

Here are eight tips for a smooth and successful business loan application.

  1. Ensure your business has good cash flow

Just as banks need to ensure an individual has an adequate income before lending them money, you will need to ensure your business has a healthy cash flow in order to obtain a business property loan.

Unlike loans catered to early stage start-ups trying to get off the ground, business property loans are usually granted to businesses that can demonstrate that they are turning a healthy profit. The lending institution is interested in the future of your business as that will impact your ability to repay your loan.

Thus, if your business is at a very early stage in its life cycle or is not doing well, that will affect chances of being approved for a business property loan.

  1. Demonstrate how you plan to use or generate returns from the property

 When you take out a home loan, you intend to either live in your new property, or rent it out. Hence, lending institutions usually do not require you to demonstrate how you plan to use such a property.

In terms of business property loans, how you plan to use an acquired property will have a great impact on the way a business loan is structured, and how the lawyers will proceed with the transaction.

Thus, it is important to have a clear idea of how the property fits in with your overall business strategy, and to be able to demonstrate this to the lending institution.

For instance, if you are a manufacturer purchasing factory space, your transaction is going to be very different from that of a retail business wishing to purchase a unit in which to house one of their own retail outlets.

Even if you are buying a property only to rent it out to tenants, it is likely that you will be asked to furnish the lending institution with documents reflecting the rents you can receive when renting out the property and/or indicating the status of existing tenants.

  1. Anticipate market conditions

Lending institutions constantly monitor the business climate, and in a weak market or recession, you might find it harder to obtain approval for a business property loan. On the other hand, in a strong market, property prices are higher, which could affect the profitability of your purchase. It is thus essential to time your property purchase accordingly, especially if you are in danger of not qualifying for a loan and yet want to purchase property at an affordable price.

  1. Demonstrate your ability to repay the loan

Even if your business is enjoying a healthy cash flow, the lending institution will still want to know that you are making a sound purchase decision and that you have a high enough debt-repayment ability.

Just as the Total Debt Servicing Ratio framework prevents individuals from over-stretching themselves when they take out a home loan, businesses cannot take more loan than the lender thinks they can pay back.

Lending institutions will calculate your Debt Repayment Ratio by dividing your net operating income by your total annual debt burden. You are required to demonstrate a debt-repayment ratio that satisfies the lending institution’s criteria in order to be granted a loan.

  1. Give yourself enough time to prepare your supporting documents

Business property loan applications typically require more supporting documents than home loan applications, many of which may take some time to prepare and process.

Depending on the size of the loan you are requesting and what you wish to do with the property, it might take at least two weeks following the submission of all supporting documents before you receive the lending institution’s Letter of Offer. It is, therefore, important to take this into account when planning your timelines.

Some of the supporting documents relevant to commercial loans include your business’s financial statements, income and expense statements illustrating how the property will generate income, a formal valuation of the property and plans indicating how you intend to use the property.

  1. Budget for your down payment and additional costs

By and large, lending institutions do not finance more than 90 percent of your prospective property’s appraised value.

You will, therefore, need to ensure your business can afford the cost of the down payment, as well as any additional expenses incurred in the transaction such as legal and administrative fees. If you intend to renovate the property or hire an agent, you will need to also factor in the additional costs incurred.

  1. Undertake a proper risk analysis

A business property purchase should not be made on a whim without first doing a proper risk analysis to ensure it will benefit your business. You will have to consider your risk appetite and your long-term goals for your business in order to determine whether or not a property purchase is the right step forward.

You will need to analyse whether the property purchase will benefit your business, not just in a best case scenario but also in a poor business climate or recession.

If you are sure you are making a sound financial decision for your business, you will be better able to demonstrate to the lending institution that they, too, are making the right decision in lending you the money.

  1. Apply for the right kind of loan package

The range of loan packages and lending institutions on offer is vast and varied, and it is advisable to analyse in depth the various choices to determine which loans can best serve not only your particular transaction but also your company and its trajectory.

For instance, there are loan packages tailored to entities purchasing commercial properties as an investment. Whether your business is undertaking a purchase of factory space, an office unit, a shopping mall unit or a warehouse, it is crucial to apply for an appropriate loan package.

Applying for the kind of business loan best suited to your purchase and enterprise will heighten your business’s chances of enjoying a profitable transaction.

Conclusion

As with anything that involves a significant amount of money or a long-term commitment, the importance of undertaking thorough research when choosing and applying for a business property loan cannot be underestimated.

When applying for a business property loan, doing all the necessary preparation ahead of time and knowing which mistakes to avoid can make your application for financing a much faster and easier process.

This article was sponsored by UOB.

credits: propertyguru

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MCC Land launching The Alps Residences, starting prices in the $400k range

Posted by Singapore Property Launch on 23rd September 2016 in Blog
The Alps Residences (002)-crop

Artist’s impression of The Alps Residences, which features an Alpine design theme. Source: MCC Land

The Alps Residences, a 626-unit condominium at Tampines Street 86, will open for preview this Saturday (24 September), said Chinese developer MCC Land. Property agencies ERA and Huttons are marketing the project.

MCC Land paid $227.78 million ($482.59 psf per plot ratio) for the hotly contested site in 2015, which attracted a total of 12 bids.

The 168,567 sq ft site will contain nine residential towers, designed with a Swiss Alps theme.

“We specially engaged a Switzerland-based architectural firm to create a tropical home with Alpine inflections,” said Tan Zhiyong, Managing Director of MCC Land.

These include a clubhouse with a gabled roof similar to those seen in Swiss chalets, and balconies with snowcap design motifs.

There are one- to four-bedroom apartments and penthouses available, with sizes ranging between 441 sq ft and 2,486 sq ft. Around 66 percent of the units are two- and three-bedrooms measuring from 689 sq ft to 1,087 sq ft.

PropertyGuru understands that prices haven’t been finalised yet, and will depend on the response seen at the preview. However, prices are expected to start in the $400,000 range for a one-bedder, which translates to just over $900 psf.

There will also be two shops of approximately 680 sq ft each, which will cater to the needs of residents and those living nearby. In addition, 104 bicycle parking lots will be installed for residents to encourage and facilitate cycling.

The Alps Residences is close to Tampines MRT station, which will become an interchange for the existing East-West Line and the upcoming Downtown Line Stage 3 in 2017. Other nearby amenities include shopping malls, schools and a hospital.

The 99-year leasehold project is expected to obtain its TOP in 2020.

credits: propertyguru

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Resale transactions up 30% in Aug, best result since 2013

Posted by Singapore Property Launch on 22nd September 2016 in Blog
The Interlace - by CapitaLand Singapore-crop

Many of the resale transactions came from recently completed projects, such as The Interlace. (Photo: CapitaLand)

Despite slower developer sales, resale transactions rose 30 percent year-on-year in August, its best showing since 2013, reported Singapore Business Review, citing a DBS Research report.

Of the 1,621 property transactions registered in recent months, 787 were resale deals.

“This mainly came from selected major re-launches in the Central region – namely The Interlace(34 units), d’Leedon (41 units) and OUE Twin Peaks (31 units),” said DBS Research.

This comes as primary sales recorded disappointing numbers, falling 17 percent year-on-year to 805 units in August.

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Surge in supply may drag down home prices

Posted by Singapore Property Launch on 21st September 2016 in Blog
Singapore apartments nearby the river

Close to 25,000 private units are expected to enter the market in the next year, said a report. 

Private home prices here are expected to be dragged down by the large upcoming supply of 10,262 units in the second half of this year and 14,578 units in 2017, according to Singapore Business Review, citing a report from CIMB Research.

“We expect private home prices to continue declining and keep our projection for a mid-single digit dip in 2016,” said the bank.

In addition, around 45 percent of the incoming supply is located in the suburbs, and this could exert downward pressure on property prices.

“This will continue to drag on price outlook in these areas,” noted CIMB Research, adding that the situation could be exacerbated by rising vacancies and the declining pool of potential tenants.

To recap, sales of new private homes, excluding executive condominiums (ECs), plunged 56 percent to 473 units in August from 1,091 units in the previous month, revealed data from the Urban Redevelopment Authority (URA).

On a yearly basis, sales slid around seven percent from the 513 units recorded in August 2015.

Experts blamed the sales slump last month to the lack of new major launches due to the Hungry Ghost Festival, which is regarded as an inauspicious time to buy property.

credits: propertyguru

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New programme to help fund costs of modernising HDB lifts

Posted by Singapore Property Launch on 20th September 2016 in Blog
Lift Upgrading Programme-crop

The new Lift Enhancement Programme will support costs of modernisation of HDB lifts. (Photo: mailer_diablo, Wikimedia Commons)

The Housing and Development Board (HDB) has launched a new Lift Enhancement Programme (LEP) to help town councils (TCs) modernise their existing lifts.

The move comes after the Building and Construction Authority (BCA) recommended lift owners to update their older lifts with several features found in newer lift models.

To be rolled out over a 10-year period, the LEP will see the HDB funding around 90 percent of the TCs’ costs to install the recommended enhancement features.

“This is a major programme, which will involve significant government expenditure, estimated at around $450 million,” said National Development Minister Lawrence Wong in a blog post.

“But given the importance of lifts in our daily lives and in our high-rise HDB living environment, the government is prepared to commit to this additional spending and maintain high safety standards.”

The LEP will apply to lifts that are not yet equipped with some or all of the enhancement features, and have been in operation for 18 years or less.

“For the older lifts, it will make more sense for the TCs to replace them with new lifts which will come with these enhanced features,” said Wong.

The HDB noted that around 20,000 lifts requiring varying extents of modernisation are expected to benefit from the new LEP.

However, TCs are responsible for the eventual replacement of all the lifts under their care, which requires significant long-term expenditure, said Wong.

As such, he advises TCs to “plan ahead and build up their Sinking Fund regularly over time to pay for these major expenses”.

To date, the total Sinking Fund balance across all TCs stands at around $1 billion. While this may sound like a healthy amount, it is not sufficient to cover the cost of future lift replacements which is estimated at almost $3 billion from now to 2035 (for some 11,500 lifts across all HDB estates), revealed Wong.

“Besides lifts, there will be other cyclical maintenance and replacement works such as façade repair of HDB blocks, cyclical repainting, and replacement of water pipes/tanks. These expenses will also go up as estate infrastructure ages,” he said.

“This is why every quarter, TCs are required to set aside between 30 to 35 percent of their S&CC (Service and Conservancy Charges) collections and government grants into their Sinking Funds.”

In fact, his ministry will also be asking all TCs to prepare and submit their financial projections for their Sinking Funds over the next 10 to 30 years.

“These projections will enable us to assess the appropriate levels of contribution to the TC Sinking Funds and Lift Replacement Funds,” said Wong.

“All TCs must take a long-term view and start planning now for asset and lift replacements in their estates. This is the basis of Singapore’s success. We do not leave things to chance. But we look over the horizon, plan, and prepare for the future. This is the way to ensure a good and safe HDB living environment for all Singaporeans,” he added.

More details on the implementation of the LEP will be provided to TCs in the coming months, said the HDB.

credits: propertyguru

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