singapore property weekly issue 129.pdf

8/14/2019 Singapore Property Weekly Issue 129.pdf

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Issue 129Copyright 2011-2013 www.Propwise.sg. All Rights Reserved.
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CONTENTS

p2 Top 5 New Property Launch Gimmicks

p9 Singapore Property News This Week

p14 Resale Property Transactions

(October 23 October 29)

Welcome to the 129th edition of the

Singapore Property Weekly.

Hope you like it!

Mr. Propwise

FROM THE

EDITOR
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SINGAPORE PROPERTY WEEKLY Issue 129

Page | 2Back to Contents

By Property Soul (guest contributor)

There are many tactics employed by property

developers and their marketing agents during

the launch of off-plan properties. In this article

well go through the five most common

marketing gimmicks, namely:

1. Gather a crowd

2. Create urgency

3. Make some noise

4. Dangle the carrot

5. Promise a good return.

Top 5 New Property Launch Gimmicks


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Gimmick 1: Gather a crowd

When it comes to buying big ticket items like

properties, no one wants to be a guinea pig.

The traffic in the sales gallery is athermometer to measure the popularity of a

project. Seeing people turning up in droves

can reassure potential buyers that they are

most probably making the right choice.

It is therefore the job of the marketing agent

to ensure the following at the sales gallery, atleast during the first weekend of a new

launch:

1. Fill up the temporary carpark to make it

look full

2. Draw a crowd of enthusiastic propertyagents waiting outside

3. Have a few groups of eager buyers

occupying the discussion tables

When a local developer launched a property

in the east in mid-2011, instead of using the

usual industry practice of balloting for the

sequence to pick a flat, their marketing agent

asked interested buyers to line up in front of

the sales gallery.

On the day before the actual launch, close to

three hundred people joined the queue.

There were students, retirees and property

agents napping, snacking and playing cardsin the queue to kill time. Such a scene made

passers-by wonder whether the crowd really

consisted of genuine buyers, or just part-

timers being paid to fake how hot the new

project was.

By coincidence, it was the beginning of the

school holidays in June. So was it the

popularity of the project, or simply the

attractiveness of the incentives?


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Gimmick 2: Create urgency

It is the marketing agent's job to constantly

remind interested parties that units are selling

fast, and that all units are going to be sold outsoon.

There is usually a huge banner hanging at a

prominent place in front of the sales gallery

that says '80 percent sold'. The headline in a

local paper reads '70 percent sold on the first

day'.

However, some key information may be

conveniently missing, including:

1. The planned number of phases for the

project launch

2. How many units are actually released in

each phase

The full statement should probably be:

1. '80 percent of 50 units sold in phase one

out of five phases'; and

2. '70 percent sold on first day after 60

percent of units already taken up by VIPsbefore launch'

When customers ask about the next batch of

units for launch, sales representatives may

hint that subsequent phases will offer units

with poorer view or lower quality finishings,

despite the fact that they are sold at higherprices.

Here is the truth: Developers tend to push the

less desirable blocks or units to the market

first. These units may present an average

view, face the west sun or have an awkward

layout.

There is a philosophy behind this: If they can

sell units which are most difficult to move,


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the rest of the better units can definitely be

sold, and at higher prices. The tactic is known

as 'save the best for last'.

Biggest discounts go to the last few

buyers

You may be surprised to hear this. But the

biggest discount is often not the one offered

to the first batch of buyers, but the one given

to the last few takers. The reasons are many:

1. The market situation may have changed

2. The developer may feel that they have

made enough profit for the units sold

3. The marketing agent may find it too much

work to continue running the sales gallery

4. The last few units left may be the less

desirable ones

Sometimes there is really not much

advantage for the early birds who buy earlier

than others. Besides gathering a crowd there

and creating the urgency to buy, there are

other marketing gimmicks you may find

familiar at a new launch.

Gimmick 3: Make some noise

To draw the attention of potential buyers,

media coverage is a better alternative than

advertising. It sounds more convincing and

also helps to save money.

The public relations department of property

developers knows when to feed the right

stories to the journalists, for example a media

report or a rumor that a celebrity, an investor

or a government official just bought one unit

at the sales gallery.

People all want to be seen having the same

foresight as the experts in property


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investment or the big names in their own

fields. Thus the release of these stories works

to motivate other buyers to follow suit.

In order to wow the readers, the media has a

tendency to pick up only unusual cases. An

amateur investor may have just bought a

place at a ridiculously high price. Or one

particular buyer has decided to buy a flat with

a unique design, facing or location regardless

of the asking price.An inevitable conclusion is that prices in the

property market have just set new highs. The

obvious connotation for potential buyers is to

take action now before prices jump again.

Gimmick 4: Dangle the carrot

Goodies given away at the sales gallery are a

catalyst to close deals. Be it fee absorption,

furniture vouchers, furnishing packages, or

branded appliances, they are attractive

concessions in the eyes of potential buyers.

Never mind the fact that such offers are just

peanuts compared with the price of the

property.

Tempted buyers are often unaware that the

value of these goodies can easily be offset by

a slight drop in the propertysmarket value. It

is therefore more practical to get an

immediate discount off the list price. Ask the

sales representative the estimated cost ofthat branded appliance or furnishing package,

then request for a direct deduction from the

unitsasking price in lieu of the developers

goodie.

Some properties are sold with 'guaranteed

rental return'. It is a scheme that promisesowners a fixed percentage of the propertys

price as rental income, regardless of the

actual rental income, or whether the property

is rented out in the first few years.

SINGAPORE PROPERTY WEEKLY I 129


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This tactic is usually deployed to move units

in high-end condominiums. The rental income

can be seen as a form of discount off the list

price.

'Guaranteed rental return' is different from

earning rental income from actual tenants

over the years. Since the amount given has

actually been factored into the price, one can

also argue that buyers are actually paying for

their guaranteed rental amount in advance.

Strictly speaking, the party who benefits most

from giving away the carrot is probably the

developer itself. It is because these goodies

are usually offered when the market starts to

cool down so that developers are able to

move properties off the shelves without

lowering the price.

Gimmick 5: Promise a good return

Once the sales representatives know that you

are buying the property for investment, they

may claim that their units can be rented out ata certain market rate.

There are two ways to check the validity:

1. Do your own research.

Go to the Urban Redevelopment Authority

website to check the latest published figureson Rentalsof Private Residential Properties.

Find a similar unit in a nearby project that is

relatively new. Check the range of monthly

rent to see whether the numbers given are

too optimistic.

SINGAPORE PROPERTY WEEKLY I 129


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2. Do some mystery shopping.

Respond to the rental listings of new projects

in the same district to check the popularity of

properties for rent there.The sales representative may claim that their

units offer an attractive rental return of a

certain percentage. It is not difficult to

calculate the net monthly ROI (Return on

Investment) on your own.

ROI = (monthly rental - loan repayment

maintenance fee - property tax) x 12 initial

investment

Once I stepped into a sales gallery where the

salesperson spoke confidently that their units

offered a minimum of five percent rental

return. But after I did my sums, the cash-on-

cash return was actually less than one

percent.

Next time before you walk into a sales gallery,

remember to do your homework first. When it

comes to property investment, ignorance can

be very expensive.

By Property Soul, a successful property

investor and enthusiast who shares her

experiences and knowledge onher blog.

http://propertysoul.com/http://propertysoul.com/http://propertysoul.com/http://propertysoul.com/


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Singapore Property This Week


Residential

Sen tosa Cove condo p r ices ar e now

attract ive

The prices of the upscale waterfront housing

district in the Sentosa Cove condo market are

now attractive to both the high-end and mass

markets on the mainland. This has been

revealed in Colliers Internationals latest

White Paper. The median price of 99-year

Sentosa Cove condo units has been reported

to decrease 44.2 percent over two

consecutive quarters, from $2,950 psf in Q1,

2013 to $1,646 psf in Q3, which is 1.5 percent

lower than their 99-year-leasehold

counterparts in Districts 9, 10 and 11 as well

as the financial district on the mainland. This

figure of $1,646 psf is also just 25.6 per cent

more than the $1,311 psf median price of 99-

year mass-market condos in Outside Central

Region, the narrowest gap observed since

condos were first launched in Sentosa.

Previously in Q1, 2008, prices of condos in

Sentosa Cove climbed as high as 133.1

percent above their mainland counterparts.

Attractive deals on Sentosa Cove in the first

nine months of this year include seven condo

units with floor areas of between 1,012

square feet and 1,216 square feet transacted

at $1.71 million to $1.90 million.

(Source: Business Times)



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Chin a Vank e Co. to buil d con do s for ric h

Chin ese bu yers in Sing apore

China Vanke Co., China's biggest mainland-

listed property developer, has teamed up with

Keppel Land to develop 726 flats in east

Singapore for rich foreign Chinese buyers

who emerged as the top overseas buyers of

Singapore residential property. Another factor

in Vanke Co.s decision is reported to be

curbs on luxury residences and fundraisingback in China. Vanke has sold S$140 million

of four-year notes with a 3.275 percent

coupon on Oct 31, according to Bloomberg

data. More developments are also planned by

Vanke in San Francisco and Hong Kong.


Commercial

Featu re Deve lopment buys the who le

Serango on Plaza

Feature Development an associate companyof Tong Eng Group of Companies, already

owned more than 90 per cent of Serangoon

Plaza and has now bought the whole of the

five-storey Little India complex for $400

million through a collective sale process. The

final sale price is 9 to 11 percent more than

the indicative price of $360 million to $368

million or $1,751 to $1,790 psf, standing at

$1,946 psf. The building was up for sale in

September, and the tender closed on Oct 31.




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Hotel si te in Katong up for sale

A 99-year leasehold tenure hotel site on East

Coast Road near I12 Katong has been

triggered for sale. The hotel is in a heritage

area with the leeway for up to 40 percent of

the total GFA turned over to serviced

apartments and/or commercial use. It is

88,678.4 sqft in size and has a maximum

GFA of about 266,040.6 sq ft. A developer is

reported to put up a bid of at least $160

million, or $601.41psfppr. The winning bidder

will have to restore the former JooChi at

Police Station sitting on the plot, which could

raise more construction costs.


A str ing of developm ent propos als to get

URA perm iss ion for Q3

A string of development proposals are

reported to be granted provisional permission

by the Urban Redevelopment Authority in Q3,

2013. These include a 560-room hotel in

Jurong Town Hall Road by Resorts World

Singapore, an office and retail development in

Jurong East by SimLian, a reviseddevelopment proposal by Keppel Land for its

Keppel Towers and GE Tower site in Hoe

Chiang Road. Previously in the July-Sept

2013 period, less than a handful of private

residential projects received URA nod. One of

those projects is the Keppel Land unitHarvestland Development's proposal for a

500-unit condo in Kim Tian Road, near

TiongBahru MRT Station and TiongBahru

Plaza.

(Source: Business Times)Tanglin Shop ping Centre up on en bloc

market again

Tanglin Shopping Centre is now back on the



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en bloc market after several failed attempts.

Millennium & Copthorne Hotels plc (M&C)

has signed a collective sale agreement on its

34 percent interest in Tanglin Shopping

Centre's share through a wholly owned

subsidiary. An independent sales committee

including representatives of the unit owners

has been authorised to obtain the necessary

approvals from other owners to market the

property and prepare for a sale given that at

least 80 percent of owners must agree to a

collective sale.


Rabobank signs lease for South Beach

Tower

Rabobank is said to have signed a lease for

about 26,000 sqft at South Beach Tower to

move out of 77 Robinson Road, under the

advice of DTZ. In addition, Booking.com has

also signed a lease for 45,000 sqft at Marina

Bay Financial Centre Tower 3 to relocate from

its existing location at Suntec City, under the

broker of CBRE. Gunvor, a Europe-based

commodity trading group providing integrated

trading products and logistics services for the

global oil and energy markets, will be taking

22,000 sqft of the building. This steady

stream of office leasing deals shows that

there is still demand in the market in the CBD.


Shops at The Interlace co nd o up for sale

The eight strata-titled shops at 99-year

leasehold The Interlace condominiumbetween Alexandra Road and Depot Road

have been put up for sale by Knight Frank

with a guide price of more than $2,500 psf.



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The shops are between 388 sqft and 1,119

sqft in size, and have a combined strata area

of about 5,340 sq ft. The sales will be done by

an expression of interest, and can be for the

whole group of shops or for individualunits.The Interlace, which has 1,040

residential units, is developed by CapitaLand

Singapore and Hotel Properties Limited.


http://www.moneymatters.sg/


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Non-Landed Residential Resale Property Transactions for the Week of Oct 23 Oct 29

Postal

DistrictProject Name

Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

1 THE SAIL @ MARINA BAY 624 1,275,000 2,042 99

4 REFLECTIONS AT KEPPEL BAY 2,347 6 ,116,000 2,606 99

4 SEASCAPE 2,680 6,800,000 2,537 99

4 CARIBBEAN AT KEPPEL BAY 1,636 2,730,000 1,669 99

4 TERESA VILLE 1,981 2,260,000 1,141 FH

5 WESTCOVE CONDOMINIUM 1,539 1,400,000 910 99

9 PARC EMILY 1,238 2,150,000 1,737 FH

9 THE INSPIRA 936 1,525,680 1,629 FH

9 CAVENAGH GARDENS 1,163 1,450,000 1,247 FH

10 ARDMORE PARK 2,885 10,500,000 3,640 FH

10 ST REGIS RESIDENCES SINGAPORE 2,142 5,200,000 2,428 999

10 THE MONTANA 1,141 2,267,750 1,988 FH

10 BALMORAL 8 1,841 3,600,000 1,956 FH

10 VALLEY PARK 1,808 2,880,000 1,593 999

10 THE HORIZON 1,561 2,475,000 1,586 FH

10 WATERFALL GARDENS 2,583 4,000,000 1,548 FH

10 SOMMERVILLE PARK 1,884 2,860,000 1,518 FH

11 NEWTON ONE 1,216 2,380,000 1,957 FH

11 THE LINCOLN RESIDENCES 2,088 3,788,000 1 ,814 FH

12 CASA FORTUNA 506 850,000 1,680 FH

12 OLEANDER TOWERS 1,152 1,255,000 1,090 99

12 THE MORNINGTON 1,259 1,220,000 969 FH

14 CENTRA STUDIOS 463 650,000 1,404 FH

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

15 AMBER RESIDENCES 1,249 1,800,000 1,442 FH

15 SANCTUARY GREEN 775 1,050,000 1,355 99

15 BUTTERWORTH 8 1,023 1,350,000 1,320 FH

15 HAIG COURT 1,076 1,410,000 1,310 FH

15 COTE D'AZUR 1,679 2,100,000 1,251 99

15 SUNSHINE RESIDENCE 775 928,000 1,197 FH

15 ESPIRA SPRING 1,206 1,410,000 1,170 FH

15 RESIDENCE 66 1,119 1,288,000 1,151 FH

15 THE NCLAVE 1,356 1,480,000 1,091 FH

15 MANDARIN GARDEN CONDOMINIUM 1,572 1,540,000 980 99

16 L ANDBAY CONDOMINIUM 1,238 1,318,000 1,065 FH

16 THE BAYSHORE 1,238 1,298,000 1,049 99

18 DOUBLE BAY RESIDENCES 1,367 1,650,000 1,207 99

18 EASTPOINT GREEN 969 920,000 950 99

18 MELVILLE PARK 958 830,000 866 99

18 LIVIA 2,486 2,000,000 804 99

19 HILLSIDE MANSIONS 1,141 1,080,000 947 FH

19 COMPASS HEIGHTS 1,862 1,500,000 806 99

20 THE GARDENS AT BISHAN 883 1,020,000 1,156 99

21 GARDENVISTA 1,163 1,500,000 1,290 99

21 SYMPHONY HEIGHTS 1,668 2,050,000 1,229 FH

21 THE BEVERLY 2,992 2,250,000 752 FH

22 THE LAKESHORE 1,184 1,480,000 1,250 99



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S G O O ssue 9


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

Postal


Area

(sqft)

Transacted

Price ($)

Price

($ psf)Tenure

22 L AKEPOINT CONDOMINIUM 1,884 1,200,000 637 99

23 HILLINGTON GREEN 1,356 1,518,000 1,119 999

23 MERAWOODS 1,001 1,045,000 1,044 999

23 MERAWOODS 1,076 1,050,000 975 999

23 PALM GARDENS 1,216 968,000 796 99

25 CASABLANCA 1,109 1,040,000 938 99

26 SEASONS PARK 1,109 1,000,000 902 99

27 THE ESTUARY 1,119 1,138,000 1,017 99

27 SUN PLAZA 1,313 956,888 729 99

28 GRANDE VISTA 2,702 1,900,000 703 999
http://propertymarketinsights.com/

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