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Issue 232

Copyright 2011-2014 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2

Secrets to My Investment Success

p7

Singapore Property News This Week

p11

Resale Property Transactions

FROM THE

EDITOR

Welcome to the 232th edition of the


Singapore Property Weekly.

Hope you like it!


Mr. Propwise

(October 14 October 20 )

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SINGAPORE PROPERTY WEEKLY Issue 232

Secrets to My Investment Success


By Gerald Tay (guest contributor)
Im probably not being modest in this post.
Pardon me if I sound overly boastful on the
success I had with my real estate investments
over the last 14 years. It is to help you
understand the key differences between
being a mediocre and a truly successful
investor.
All of my real estate investments over the
years have made more than a 20% a year
compounded return per property. Some even
higher. The returns comes from sales and net
rental income of the properties.

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SINGAPORE PROPERTY WEEKLY Issue 232


Since late 2012 Ive sent many warnings to
buyers be extremely cautious or avoid
buying local and overseas investment
properties. My predictions were proven right
for the local property market. Today, property
prices and rents are slowly falling and the
worse is yet to come. I believe if a buyer
were to have bought into the peak of 2013,
they would very likely not see reasonable
returns for many decades.
Guts and conviction to be different from
the crowd
In 2010, my US partners and I started looking
into US Real Estate (RE) for great buying
opportunities. We were eagerly seeking coinvestors to snap up under-valued US RE
direct from seller and resale only.
One
especially
undervalued
property
segment is US Commercial RE. The market
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is hugely untapped and shunned by many


ordinary US investors. The complexities
involved with buying into such large-scale
properties are very different from buying a
residential property. Price is another factor as
many could not afford the hefty price tag that
comes with Commercial RE. Priceseasily
ranged from US$2 million and upwards.
Comparatively, the price of a quality US
Single-Family Home costs $150,000 on
average.
Furthermore, banks do not easily grant loans
to buyers with zero experience in Commercial
RE. Sellers will also reject an inexperienced
buyers LOI (Letter of Intent) as they are
afraid the deal will not go through because of
the complexities involved in handling such
properties, and market negativity from a failed
deal will affect their selling price afterwards.

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SINGAPORE PROPERTY WEEKLY Issue 232


Therefore, many inexperienced buyers dived
into the safe US residential market instead,
driving up home prices. The US Commercial
RE market remains today an excellent
investment
prospect
for
savvy
and
knowledgeable investors. These properties
are
tenanted
by
large
US
Companies (Citibank, Burger King, Dollar
Tree, Home Depot, etc) listed on US stock
exchanges. They are largely undervalued in
price and rental income.
In 2011, I urged investors to look into this
overseas market segment as I was confident
we would get good and stable returns over
the next five years and beyond.

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Many property buyers dont know better


First example: Everyone I knew investing
into 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 to
snap up quality US RE at a low price with the
low exchange. Instead, investors were
worried about the weakening of the US Dollar
to the Singapore Dollar. Some were saying
the US Dollar might even weaken further from
US$1 to S$1.

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SINGAPORE PROPERTY WEEKLY Issue 232


In 2012, if you simply exchanged Singapore
dollars for US dollars, you would have
profited with a 5% per year compounded
return just on currency appreciation.
Third example: The Net Rental Yield (Cap
Rate) in 2012 for US Commercial RE went as
high as 8% per year for properties with stable,
high quality tenants. This simply means the
purchase price was exceptionally low with a
high rental income. A buyer would get a
stable long-term tenancy with fixed leases,
some as long as 20 years, and a yearly rental
increment as stated in a contract.
However, amateurish investors tell me such
returns were too low for them. They were
promised guaranteed total returns as high as
20% for some overseas properties.

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Our USA commercial properties are doing


extremely well considering recent market
upheavals. My co-investors and I have seen
good price, rental and currency appreciation
since we purchased in 2013. Valuation for
one of our properties surged from US$2.2
million in 2013 to US$2.6million in 2015. All of
our US commercial properties are fully
occupied with a 3% yearly rental increment
and new 5 to 10 year fixed leases.
Missing the woods for the trees

Successful investors are no different from


successful entrepreneurs. Successful people
reject popular thinking. They avoid going with
the herd. To reject popular thinking you must
be OK with feeling uncomfortable. To be
successful, you need to see the woods and
ignore the trees.

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SINGAPORE PROPERTY WEEKLY Issue 232


Ive been successful with my investments
because I:

Bought local Singapore properties during


the down period of 2003 to 2006 when
others were avoiding this
Saw old resale properties as great
investments while others rushed for new
property launches

Loved adding value to my properties to


enhance them

Invested in depressed USA assets

Bought when prices were low and


avoided buying when it was going up

Sought reliable foreign partners for my


overseas investments

youre going to be very fortunate just to work


on that one opportunity that may change your
life.
I dont believe in luck. Luck is leaving things
to chance and the outside world. I believe in
taking action and creating my own path in life.
Your life is yours to create.
By guest contributor Gerald Tay, who is the
founder and coach at CREI Academy Group
Pte Ltd, an organization dedicated to
empowering retail property investors with
smarter investing philosophy and strategies.
He is a full-time investor with over 13 years of
solid experience in building his wealth
through Property Investment and is financially
wealthy today.

Every once in a while, a great opportunity


comes along and changes everything. And
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SINGAPORE PROPERTY WEEKLY Issue 232

Singapore Property This Week


Residential
Prices of completed condos up by 0.1% in
Sep from Aug

According to flash estimates by NUS, the


prices of completed condos have increased
by 0.1% in September from August.
Nonetheless, prices of completed units in the
central 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 from
RST Research said that the price increase of
small units of up to 506 sq ft in September
was due to overall instability in the market
given the surge in completion of small units
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since last year. HDB flat owners have kept


their shoebox units vacant since their
completions and may be more willing to let go
of those units at a lower price now. Eugene
Lim from ERA Realty said that the increase in
prices could have been due to a lack of major
project launches.
(Source: Business Times)
More than one in five resale flat buyers
applied for the Proximity Housing Grant
According to the Business Times, more than
one in five flat buyers over the past two
months has applied for the Proximity Housing
Grant (PHG). As income ceilings have been
raised to $12,000, about one in 10
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SINGAPORE PROPERTY WEEKLY Issue 232


first-timer families and singles are now
eligible for the CPF Housing Grant. Minister
for National Development Lawrence Wong
said that the PHG scheme has been
extended to all Singaporean families because
the ministry recognised the desire to live
closer to parents and children is shared by a
spectrum of Singaporeans, not just first-timer
couples. According the MND, there were
3,506 resale transactions over a two-month
period since 24 August this year. Ong Kah
Seng from RST Research said that since the
executive condominium owners are not able
to rent out their flats in the first 5 years, the
increase in buyers may not be substantial
despite higher income ceilings. This is
because these buyers may not be drawn
away from the private condo market.

GCB transactions totals $177 million in Q3


In Q3, 9 good class bungalows (GCB)
changed hands. This translated to about $177
million in total, down from the $282 million
that was amassed from the sale of 11 GCBs
in Q2. In the first 9 months of this year, the
GCB sale tally stands at 24 deals totalling
$554 million. This was higher than the $511
million transacted in the same time period a
year ago. Among the GCBs sold in Q3 this
year, a freehold bungalow at Tanglin Hill
changed hands for $25 million or $1,539 psf.
Samuel Eyo from Christies International Real
Estate believes that this price was reasonable
considering the location of the house and also
the cost needed to rebuild it.
(Source: Business Times)

(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 232


Commercial
No bids accepted for Ubi industrial site

HDB has declined bids for an industrial


development site at Ubi because the prices
offered were too low. The site, which was
launched for tender in June this year, is 0.6
ha large and has been zoned for Business 1
use. It has a lease term of 30 years and a
maximum gross plot ratio of 2.5. A total of 5
bids were placed for the site, and the highest
bid was placed at $19.9 million or $120.91 psf
ppr. Tan Boon Leong from Colliers said that
the pricing was reasonable due to the
oversupply of industrial spaces.
(Source: Business Times)

Warehouse buildings at Tampines up for


sale
Two
adjacent
multi-storey
warehouse
buildings 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 22
years. Shaun Poh from Cushman & Wakefield
said that the buildings would be ideal for endusers such as e-commerce and logistics
companies that want to operate from their
own buildings. The buildings are not
subjected to rules imposed by JTC since they
sit on private land. Their combined indicative
pricing is about $70 million and the
expression of interest exercise will close on 4
December.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 232

Non-Landed Residential Resale Property Transactions for the Week of Oct 14 Oct 20
Postal
District
2
4
5
5
5
5
8
8
9
10
10
10
10
10
10
10
10
14
14
15
15
15
15
15
15
16

Project Name
SPOTTISWOODE PARK
TERESA VILLE
THE PEAK@BALMEG
DOVER PARKVIEW
THE SPECTRUM
DOVER PARKVIEW
MERA SPRINGS
PRISTINE HEIGHTS
CENTENNIA SUITES
ARDMORE PARK
ARDMORE PARK
NATHAN SUITES
ASTRID MEADOWS
MONTVIEW
CHARMING GARDEN
DORMER PARK
DUCHESS CREST
ESTA RUBY
LE CRESCENDO
THE BELVEDERE
COSTA RHU
AMBER RESIDENCES
KINGS APARTMENTS
JOO CHIAT MANSIONS
VILLA MARINA
CASA MERAH

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Area
(sqft)
1,270
1,927
1,948
1,249
1,292
969
1,292
850
2,271
2,885
2,885
1,776
1,356
1,507
1,808
1,270
1,841
1,130
1,539
1,259
2,239
1,798
1,173
1,238
2,314
1,345

Transacted
Price ($)
800,000
2,150,000
2,500,000
1,350,000
1,310,000
980,000
1,708,000
1,075,000
5,100,000
8,500,000
8,300,000
3,150,000
2,200,000
2,130,000
2,550,000
1,680,000
2,200,000
1,450,000
1,750,000
2,050,000
2,900,000
2,320,000
1,200,000
1,130,000
1,755,000
1,525,000

Price
Tenure
($ psf)
630
99
1,116
FH
1,283
FH
1,081
99
1,014
FH
1,012
99
1,322
FH
1,264
FH
2,246
FH
2,947
FH
2,877
FH
1,774
FH
1,622
FH
1,413
FH
1,410 999
1,323
FH
1,195
99
1,283
FH
1,137
FH
1,628
FH
1,295
99
1,291
FH
1,023
FH
913
FH
758
99
1,133
99

Postal
District
16
16
16
16
16
17
17
18
19
19
19
19
20
20
21
21
21
22
22
26
27

Project Name
COUNTRY PARK CONDOMINIUM
CASA MERAH
BAYSHORE PARK
APOLLO GARDENS
KEW GREEN
FERRARIA PARK CONDOMINIUM
WATERCREST
WATERVIEW
A TREASURE TROVE
A TREASURE TROVE
KOVAN MELODY
CHILTERN PARK
THE GARDENS AT BISHAN
BRADDELL VIEW
THE CASCADIA
GARDENVISTA
THE RAINTREE
PARC VISTA
IVORY HEIGHTS
SEASONS PARK
ORCHID PARK CONDOMINIUM

Area
(sqft)
1,087
1,227
936
2,120
3,025
1,087
1,324
4,402
1,044
1,044
1,292
1,518
883
1,701
1,238
1,130
1,313
1,281
1,668
1,292
1,152

Transacted
Price ($)
1,180,000
1,330,000
800,000
1,659,600
2,050,000
1,020,000
1,090,000
2,550,000
1,200,000
1,150,000
1,400,000
1,385,000
908,888
1,330,000
1,830,000
1,428,000
1,330,000
1,025,000
1,150,000
1,130,000
880,000

Price
Tenure
($ psf)
1,085
FH
1,084
99
854
99
783
FH
678
99
938
FH
823
999
579
99
1,149
99
1,101
99
1,084
99
913
99
1,030
99
782
99
1,478
FH
1,263
99
1,013
99
800
99
689
100
875
99
764
99

NOTE: This data only covers non-landed residential resale property


transactions with caveats lodged with the Singapore Land Authority.
Typically, caveats are lodged at least 2-3 weeks after a purchaser
signs an OTP, hence the lagged nature of the data.

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