Bargain buys at auctions

February 23, 2015 12:56 PM SGT

Join our Telegram channel and follow our Facebook for the latest update.

SINGAPORE: Property auctions in January revived after a quiet December.

Some properties even saw active bidding.

DTZ kicked off the year with its Jan 20 auction, where two properties were sold.

One was a 1,755 sq ft, threeplus- one-bedroom unit on the 18th floor of Pearl Bank Apartment, a 38- storey horseshoe-shaped tower that is one of Singapore’s oldest high-rise residential blocks.

The development contains 272 apartments and has a 99-year lease, with effect from 1970.

It is situated on a hill slope overlooking Pearl’s Hill City Park, and within walking distance of the Outram MRT station.

The apartment at Pearl Bank was a mortgagee sale that first appeared at JLL’s auction in November, where it opened at $1.42 million.

It surfaced at Colliers International’s auction in December with its opening price slashed to $1.38 million, but still drew no bids.

At DTZ’s January auction, it opened at $1.36 million, received an opening bid of $1.3 million and was sold for $1.35 million ($769 psf).

“There were two parties interested in the property,” says Joy Tan, DTZ’s head of auction.

The other residential property sold at the DTZ auction was a 517 sq ft one-bedroom unit on the third floor of Estilo, a 58-unit freehold six- storey condominium block on Wilkie Road, on the edge of Orchard Road in prime district 9.

Also a mortgagee sale, it had an opening price of $895,000, but was subsequently sold for $800,000 ($1,547 psf).

This was the second unit at Estilo that had been put up for mortgagee sale.

The first was a 495 sq ft, one-bedroom unit on the fifth floor.

It had been put up for auction by Colliers on Aug 27, but was sold the following month in a private treaty sale for $820,000 ($1,657 psf).

“Such shoebox apartments are in demand, given their prime location, freehold tenure and quality finishing,” says Grace Ng, deputy managing director of Colliers International.

At Colliers’ Jan 22 auction, three properties were sold for a total of $20.35 million.

One of them was a row of five adjoining double-storey shophouses on Teck Chye Terrace, off Upper Serangoon Road.

The freehold shophouses were put up for auction sale by its owners for the first time, and opened with a bid of $11 million.

They saw active bidding with 40 bids received, and were sold for $14.63 million.

“It’s the first major sale of a commercial property at an auction for quite some time,” says Ng.

The two other properties sold at Colliers’ auction were terraced houses at Eng Kong Drive in the Toh Tuck landed housing estate.

Both were mortgagee sales.

One was a threestorey intermediate terraced house with five bedrooms and study, sitting on a freehold land area of 1,907 sq ft.

It fetched $2.42 million.

The other, a 2½-storey corner terraced house with a land area of 3,936 sq ft, fetched $3.3 million.

It was the second time both the properties had been put up for auction by Colliers.

At JLL’s auction on Jan 29, a 1,388 sq ft unit at Ville Royale along River Valley Road was sold for $1.83 million ($1,318 psf).

This was the third time the property had been put up for auction, says Mok Sze Sze, JLL’s head of auction.

When it first debuted as a mortgagee sale last year, the opening price was $2.2 million, she says.

Ville Royale is a freehold property with just 43 units and was completed in 1993.

“Potential buyers have been watching the auction market and because prices have corrected since last year to a level they deem attractive, they are willing to jump in to buy,” Ng adds.

Echoing last year’s trend, Ng says 2015 is likely to see more mortgagee sales of condos in the prime districts rather than those in the mass market segment.

“Mass-market condos tend to find buyers more easily, given the smaller quantum and larger pool of buyers,” she observes.

“But for condos in the prime districts, especially the large units, buyers have problems securing a loan owing to the TDSR [total debt servicing ratio] restrictions.

Those who are cash-rich want a very good bargain.” An example is a 1,560 sq ft, three-bedroom unit on the second level of one of the blocks at the 1,129-unit waterfront development, Reflections at Keppel Bay.

A mortgagee sale, it first appeared at Colliers’ auction last September with an opening price of $3.2 million.

At Colliers’ Jan 22 auction, it opened at $2.8 million ($1,795 psf), but there were still no bids.

The 99-year leasehold property, develop ed by Keppel Land, was completed in 2011.

It was designed by world- renowned architect Daniel Libeskind.

Sharon Lee, head of auction at Knight Frank, says there are some compelling offers among properties put up for auction by owners as well, such as two units at Altez, a 62- storey residential tower on Enggor Street in Tanjong Pagar.

The 280-unit, 99-year leasehold project developed by Far East Organization was completed last year.

At Knight Frank’s auction on Jan 21, a one-bedroom, 603 sq ft unit on the 19th floor opened at $1.3 million ($2,156 psf).

A one-bedroom loft of 753 sq ft on the 30th floor debuted at $1.6 million ($2,125 psf).

Both properties were withdrawn without a bid.

“But there was no lack of interest,” says Lee.

Both units are tenanted at rental rates of $4,300 to $4,400 a month, which translate into gross yields of some 3.3% to 4%.

The most recent transaction at Altez was for a 549 sq ft, one-bedroom unit on the 10th floor that changed hands in a sub-sale for $1.14 million ($2,082 psf) in November.

This article appeared in the City & Country of Issue 662 (Feb 2) of The Edge Singapore.

Follow our channels to receive property news updates 24/7 round the clock.

Subscribe to our newsletter