City&Country: Offshore-- JLL upbeat about S’pore high-end condo market

While economic growth in 2011 is expected to moderate to 5.1% from the blistering 15% this year, corporate hiring is expected to remain healthy, income levels to rise and the influx of foreigners taking up residence in Singapore to swell.

“Singapore continues to establish itself as an extremely desirable place to own real estate,” says Chris Fossick, managing director of Singapore and Southeast Asia at Jones Lang LaSalle (JLL).

Fossick predicts that luxury condominium prices, which remained relatively flat this year, are likely to trend upwards in 2011. “I’m optimistic that this segment of the market will see price rises next year,” he says. “I think it will be relatively easy for [luxury condo] prices to come back to 2007 levels in a relatively quick time once market sentiment strengthens.”

According to David Neubronner, JLL’s head of Singapore residential project sales, homebuyers and investors are star ting to see value in existing prime properties and to appreciate large units again.

“Space is a premium as Singapore gets more crowded over time, and developers build smaller and smaller units,” he says. “Large units will be a rarity and values will appreciate. Such units will appeal to both local and overseas investors, particularly those buying for owner-occupation.” As such, he sees values in the secondary market catching up with those in the primary market. “Large apartments, including those in the older developments, will be popular.”

Neubronner points to Regency Park, in prime District 10, as an example. Located along Nathan Road, the 292-unit development sits on sprawling freehold grounds of over 500,000 sq ft. It features large three- and four-bedroom apartments, with sizes ranging from 2,228 to 3,650 sq ft, and penthouses from 6,049 to 6,415 sq ft. Prices at the 20-year-old development have yet to hit the peak levels of the latter part of 2007, when two units were sold at above S$2,000 psf. The most recent transaction was in October, when a 10th-floor, 3,175 sq ft three-bedroom apartment was sold for S$5.65 million (S$1,779 psf).

However, prices at Regency Park are almost on par with the new developments next door, for instance, Nathan Suites, which was launched by TID Pte Ltd (a joint venture between Hong Leong and Mitsui Fudosan) in March. The 65-unit luxury project has a mix of two- to four-bedroom apartments sized 915 to 4,800 sq ft. The initial average launch price was S$2,100 psf. The most recent caveat lodged was in June, which was for the sale of a 1,776 sq ft unit on the ninth floor that went for over S$3.24 million (S$1,822 psf).

Also in prime district 10, along Grange Road, prices at the freehold 86-unit Beverly Hill, completed 27 years ago, have yet to revisit 2007’s peak levels, when the highest price achieved was S$2,282 psf for a 3,778 sq ft unit on the 11th floor that changed hands for S$8.62 million. Typical units in the project are four-bedroom apartments sized 3,778 sq ft and penthouses, at 7,556 sq ft.

The most recent transaction, in July, was for a 13th-floor typical unit that was sold for S$8.05 million (S$2,131 psf). “Prices have reached the S$2,000 psf level and are higher than some of the smaller units in nearby developments,” says Neubronner.

Across the road from Beverly Hill is the brand-new 110-unit Cliveden at Grange, which is likely to be completed next year. The most recent transaction recorded was in April 2008, when a 2,842 sq ft unit was sold for over S$11.1 million (S$3,914 psf).

With the anticipation of a brighter residential market in 2011, JLL is expanding its residential project marketing team, which was formed in October last year and ­headed by Neubronner. Though it has only been running a short time, Fossick says proudly, “We’ve made a profit this year.”

Projects on which JLL had been appointed joint marketing agents include the 97-unit Centennia Suites on Kim Seng Road by developer Lippo Group and the 172-unit The Terrene, on Toh Tuck Road, by UOL Group and LaSalle Investment Management. Centennia Suites was fully sold at an average price of S$2,100 psf, while The Terrene was also sold out at prices averaging S$1,250 psf — both setting new benchmarks in their neighbourhoods.

Next year, new launches in which JLL will be involved, marketing wise, include OUE’s 462-unit Twin Peaks luxury condo along ­Leonie Hill Road and Tuan Sing Group’s 32-unit strata cluster housing project called Mont Timah, located at the foot of Bukit Timah Nature Reserve.

Having re-established JLL’s presence in the residential sales market in the past year, ­after more than a decade-long hiatus, Fossick is looking at further expanding its services. Over the past year, JLL has worked successfully with Black Diamond, another property services firm, on some new project launches. “We’re now looking at the next step — the merits of a team of associates who can support us in the project sales team,” he says.

Currently, residential services at JLL comprise 11 full-time staff in the Singapore residential project sales team and 20 residential specialists in marketing international luxury projects as well as leasing, headed by Jacqueline Wong. The plan is to expand the core residential team by another five staff next year.

Fossick’s goal is also to establish a JLL-brand network of associates. “As a company, we are naturally going to err on the side of conservatism,” he says. “We could have gone out in January this year and formed an associates’ network with 500 associates by now. But, we wanted to do it properly, and build a track record.” Fossick says the goal is to have about 300 associates by end-2011.  —The Edge Singapore

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 837, Dec 20-26, 2010

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