Issue 77

Copyright 2011-2012 www.Propwise.sg. All Rights Reserved.

CONTENTS
p2 p8 p12
The Difference Between How the Rich and Amateurs Invest Singapore Property News This Week Resale Property Transactions (October 24 October 30)

FROM THE

EDITOR

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SINGAPORE PROPERTY WEEKLY Issue 77

The Difference Between How the Rich and Amateurs Invest

By guest contributor Gerald Tay Years ago before the passing of my late multimillionaire grandfather, I had the fortune of frequent conversations and debate on investment and wealth with him. Although I missed him after his passing, his simple teachings had taught me many vital lessons on wealth. Is it important to know your Net Worth? Me: Do you know your Net Worth and how much are you worth today? Grandfather: I dont know and I dont care. Me: I dont understand. Why dont you care and want to know your Net Worth? Isnt that what defines you and makes you so rich today?
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SINGAPORE PROPERTY WEEKLY Issue 77 Grandfather: Young man, how do you grow a healthy apple tree that can produce many juicy apples for you? How to grow an apple tree I know my grandfather will always give an anecdote to his teachings. Me: You need to first plant the seed and watch it grow. Grandfather: For it to grow, what elements must come first? Me: A constant supply of water and fertiliser. Grandfather: Correct. For that apple tree to grow up and produce juicy apples, it needs enough water, sunlight, and food, not to mention patience and love. Me: I still dont understand. tree to produce apples for you without ensuring it has enough water, sunlight, food, patience and love, do you think the tree is able to produce that many juicy apples?

Me: No, definitely not.

Grandfather: Exactly. And its the same with wealth creation. If you constantly feed your assets with enough cash flow and patience, your wealth with naturally grow. Me: Now I understand. The importance of cash flow Grandfather: Besides patience and love, the other vital elements to grow your assets healthily so it can produce enough passive income for you, is to ensure a constant supply of enough cash flow. Cash flow is the food, sunlight and water. Net worth is the number of apples you can get from it.

Grandfather: If you only focus on growing the

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SINGAPORE PROPERTY WEEKLY Issue 77 Me: So, if I focus on ensuring enough food, sunlight and water reaches the tree, the juicy apples will come naturally. If I focus on bringing enough cash flow for my assets, my wealth and net worth will grow eventually. Grandfather: The reason why I focus on cash flow and never net worth is because your net worth doesnt tell you anything, just like the number of apples may not necessarily tell you how healthy your tree is. Its the cash flow that will determine your financial wealth and health, and as long as youve enough of that coming in every month, youre financially wealth and healthy. invest on cash flow, the amateurs on net worth. Me: Gamblers invest on capital gains. The rich invest on cash flow. Grandfather: Most of these amateurs think theyre smart to buy and sell on capital gains. Its called stupidity not investment smarts. They ignore good cash flow, and invest on capital gains because they believe their assets will always go up in value. They want to be like the rich and hope to join the rich club. And they would just simply own any investment like a property so it can increase or add to their net worth, and they can feel richer. Me: So its not net worth that determines your wealth. Its cash flow. Thats why I remember you said before you never care about how much your home is worth and how much it can sell, because even though its
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Me: You mean you may have a high net worth, but you may not be financially wealthy or healthy?
The rich invest on cash flow, the amateurs on net worth Grandfather: Yes. Thats why the rich always
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SINGAPORE PROPERTY WEEKLY Issue 77 sitting on a valuable 22,000 square feet of land, it doesnt produce any cash flow for you. Grandfather: Exactly! And its not just cash flow. Your cash flow, like food and water, must be more than sufficient for the tree to grow healthily. If you give it the bare minimum, your tree may not survive. And if you cut the water and food completely, the tree will soon wither and die. Me: Your net worth will always fluctuate according to the surroundings (Economy). But with enough cash flow, your wealth (Tree) will continue to grow healthily and your assets (Apples) will also increase or least be safe no matter what happens. Focus on cash flow, never net worth. Grandfather: Thats the reason why I never care and dont want to know what my net worth is. Its the quality of cash flow I am getting in every month from my businesses, properties and other assets that define my wealth today, not the quantity of those assets I own. Invest on Quality, Not Quantity. Invest on Cash Flow, Not Net Worth It is the quality of your income producing assets that will define your wealth, never the quantity. As an ordinary investor, if you want to be truly wealthy through property or any other investments, it is absolutely vital to focus on buying immediate cash flow, rather than capital gains (net worth). It sounds too tempting to buy on capital gains, knowing your neighbour or your friend just happened to make a $200,000 profit by selling his or her property.

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SINGAPORE PROPERTY WEEKLY Issue 77 I know many property investors who boast about how many properties they own and how many fancy new launches they have bought recently. The big question here is, Whats the quality of those investments? Taking a Smart Risk versus a Stupid Risk Lady luck may be smiling on you, for the first or even second time you buy on capital gains, but let us be honest. How many times can lady luck be smiling on you for the next few decades of your life investing on capital gains? All investments carry some risk, but you do have a choice between choosing a smart or a stupid risk. You do not ride a bicycle on the road without protective gear, and neither would you drive your car without an insurance, or race your Ferrari at 180 kilometers per hour and beat the red light on Bugis Street in the middle of the night,
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thinking there will be no cars. Maybe the first few times, you can get lucky, but unfortunately the guy who did just that chose a stupid risk, and this time round, it cost him his life. By guest contributor Gerald Tay, CEO and Chief Trainer at CREi Academy Group, and creator of The 18 Irrefutable Laws of Property Investments.

SINGAPORE PROPERTY WEEKLY Issue 77

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SINGAPORE PROPERTY WEEKLY Issue 77

Singapore Property This Week

Residential
99-year Sengkang EC sites draws $135m top bid
The 151,779.6-sq-ft site located at the junction of Sengkang West Way and Fernvale Link attracted a total of 6 bids, with the top bid of $135 million or $296.50 psf ppr from CITY Developments' (CDL) unit Verspring Properties. The site has a 455,338-sq-ft GFA that can yield 420 units though CDL plans to build a 380-unit high-rise EC development. The site is well located, being a five-minute walk away from the Layar LRT Station, and within walking distance from primary and secondary schools, the Sengkang Riverside Park, Punggol Reservoir and Sengkang Sports Complex. It is expected to have a break-even price and average selling price of
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$560-$610 psf and $670-750 psf respectively.

(Source: Business Times)

Resale prices of non-landed private homes rise in first 10 months of 2012 The resale prices of non-landed private homes registered a 7.3% increase to $1,133 psf from January to October 2012, compared to $1,056 psf in the same period last year, despite the 10.2% fall in transaction volume. This could be due to fewer launches in Q3, which led to increased demand for resale homes. The largest increase came from the outside central region (OCR), which saw an 8.7% increase to $902 psf, followed by the 7.7% increase to $1,152 psf in the rest of central region (RCR) and the 3.2% increase to $1,718 psf in the core central region (CCR).

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SINGAPORE PROPERTY WEEKLY Issue 77 The narrower price difference between properties in the CCR and the OCR is attributed to the faster rate of increase of average price of private homes in the OCR over the CCR and the greater impact of ABSD on properties in the CCR. Meanwhile, the 10.2% fall in resale transaction volumes is attributed to the 10,559 properties sold in the primary market in the first 10 months of 2012 as well as the SSD. This trend is expected to continue with large number of units released in new launches. In October, non-landed private residential units registered a 4.1% increase in resale prices to $1,209 psf from $1,159 psf in Q3 while the average unit rental registered a mere 0.5% increase from $3.87 psf in Q3 to $3.89. The largest rental increase of 2% in Q3 was from the OCR, followed by a 0.9% increase in the CCR; RCR registered a 2.2%
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fall. This led to a fall in overall gross rental yield from 4% in Q3 to 3.87% in October. (Source: Business Times)

Commercial
Freehold mixed-use redevelopment site at Balestier up for sale The 21,219 sq ft site at 520 Balestier Road is asking for $68-75 million or $1,088-$1,198 psf ppr including an estimated development charge based on its 3.0 GPR and 63,657 sq ft GFA. Zoned for commercial and residential use, a maximum of 40% of the GFA can be for commercial use. It could potentially be amalgamated with a 750 sq ft adjoining state land, which would increase the site area and potential GFA to around 22,000 sq ft and 66,000 sq ft, subject to approval from relevant authorities. If approval is granted, it would bring the land rate to a lower $1,030-1,130 psf ppr.
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SINGAPORE PROPERTY WEEKLY Issue 77 Buyers could potentially strata-subdivide the commercial component of the new development and sell the units or retain them for investment. The tender closes on Dec 13 at 3pm. Also up for sale by tender is a freehold residential redevelopment site at 241 Pasir Panjang Road. The asking price is $928 to $1,005 psf based on its 1.4 GPR on the 12,933 sq ft land area. The site can potentially be redeveloped into a bungalow, strata landed or strata residential units. It is expected to be fairly popular given its proximity to National University of Singapore, Mapletree Business City, Science Parks 1 and 2, Insead, Singapore Institute of Management and Singapore Polytechnic, as well as the business parks at Jurong, which is a short drive away. The tender closes on Dec 5 at 3 pm. (Source: Business Times)
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19 freehold Crown Centre retail units up for sale The units located on the ground floor of Crown Centre in Bukit Timah are asking for $32 million, or $4,131 psf of the 7,746 sq ft total strata area which constitutes 39.7% of the share value of the building. While the current average rent being achieved for the fully tenanted units is only a 1.8% net yield, there is a potential for increasing the yield to 4% if the buyer spruced it up, allowing it to attain monthly rents of about $15-19 psf like ground-floor units nearby Coronation Shopping Plaza. The three-storey mixed use Crown Centre has frontage along Queen's, Bukit Timah and King's roads, and includes 21 retail units on its second level and six apartments on the third level in addition to the 19 units being put up for sale. It also offers 22 carpark lots at the basement.

SINGAPORE PROPERTY WEEKLY Issue 77 Crown Centre sits on a 18,081 sq ft site zoned for commercial and residential use, with a 3.0 plot ratio. It is well located, being in District 10 and near schools such as Hwa Chong Institution, Nanyang Girls' High, National Junior College and St Margaret's Secondary and the Botanic Gardens and the upcoming Tan Kah Kee (Downtown Line) MRT stations, and there is strong demand for space for cafes, banks and supermarkets in the area. The expression of interest exercise closes on Nov 28. (Source: Business Times) development in Fusionopolis in one-north. The development with a total of 67,490 sq m GFA will consist of a 17-storey building with 59,300 sq m of business space, a five-storey office block with 2,690 sq m of " work office home office (Woho) concept" units, and 5,500 sq m of retail space. Each Woho units range between 32 and 96 sq m in size, and provide a live-in component for two to six employees comfortably. In addition, tenants can customise and configure these spaces. Energy-efficiency and environmentally friendly features include water-efficient sanitary ware and fittings, efficient light fittings, an efficient chiller plant, wide open green spaces and an observation deck among several others. (Source: Business Times)

Ascendas Fusion 5 breaks ground for Fusionopolis Phase 5

The 75:25 venture between Ascendas Land Pte Ltd and Mitsui & Co Ltd broke ground for its $370 million Fusionopolis Phase 5 project,

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SINGAPORE PROPERTY WEEKLY Issue 77

Non-Landed Residential Resale Property Transactions for the Week of Oct 24 Oct 30
Postal District 1 1 1 2 3 3 3 4 4 5 5 5 5 5 5 5 7 8 8 8 8 8 9 9 9 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,130 2,688,000 2,378 99 592 1,325,000 2,238 99 678 1,388,000 2,047 99 560 980,000 1,751 99 872 1,360,000 1,560 99 1,098 1,408,888 1,283 FH 1,098 1,390,000 1,266 FH 2,099 5,982,150 2,850 99 1,227 1,900,000 1,548 99 829 1,100,000 1,327 956 1,302 1,673,070 1,285 FH 1,507 1,680,000 1,115 99 958 1,050,000 1,096 99 1,249 1,290,000 1,033 99 2,153 2,150,000 999 99 1,561 1,280,000 820 99 1,119 1,618,000 1,445 999 840 1,410,000 1,679 FH 538 740,000 1,375 FH 883 1,068,000 1,210 FH 958 1,010,000 1,054 FH 1,302 1,250,000 960 99 1,938 4,457,400 2,301 FH 1,173 2,610,000 2,225 FH 1,572 2,900,000 1,845 FH Postal District 9 9 9 9 9 10 10 10 10 10 10 10 10 10 10 10 10 11 11 11 11 11 11 12 12 Area Transacted Price Tenure (sqft) Price ($) ($ psf) 1,313 2,160,000 1,645 FH 1,098 1,778,760 1,620 FH 1,066 1,680,000 1,577 FH 1,324 2,070,000 1,563 999 2,799 4,300,000 1,536 FH 2,885 9,100,000 3,155 FH 3,821 10,650,000 2,787 FH 1,442 3,120,000 2,163 FH 3,649 7,228,000 1,981 FH 1,335 2,630,000 1,970 FH 2,411 3,850,000 1,597 FH 1,442 2,300,000 1,595 FH 689 1,080,000 1,568 FH 1,109 1,646,888 1,485 FH 1,658 2,320,000 1,400 999 1,410 1,940,000 1,376 99 1,033 1,360,000 1,316 947 1,808 3,430,000 1,897 FH 1,216 2,249,600 1,849 FH 1,442 2,620,000 1,816 FH 1,442 2,600,000 1,803 FH 1,345 1,730,000 1,286 FH 1,453 1,760,000 1,211 FH 710 935,000 1,316 FH 1,453 1,800,000 1,239 999

Project Name MARINA BAY RESIDENCES THE SAIL @ MARINA BAY THE SAIL @ MARINA BAY LUMIERE TANGLIN VIEW ALESSANDREA ALESSANDREA MARINA COLLECTION CARIBBEAN AT KEPPEL BAY BOTANNIA THE PARC CONDOMINIUM HERITAGE VIEW BLUE HORIZON DOVER PARKVIEW VARSITY PARK CONDOMINIUM FABER CREST BOON SING BUILDING CITY SQUARE RESIDENCES R66 APARTMENTS VOGX SOHO @ FARRER KENTISH GREEN RIVERGATE CAIRNHILL RESIDENCES CASA CAIRNHILL

Project Name RESIDENCES AT 338A PARC EMILY EURO-ASIA COURT ASPEN HEIGHTS THE MORNINGSIDE ARDMORE PARK FOUR SEASONS PARK CUSCADEN RESIDENCES REGENCY PARK TANGLIN PARK BELMOND GREEN THE LEGEND THE CAPRI LEEDON 2 VALLEY PARK TANGLIN REGENCY THE SIERRA NEWTON ONE NEWTON ONE PARK INFINIA AT WEE NAM PARK INFINIA AT WEE NAM THE SPINNAKER MANDALE HEIGHTS CASA FORTUNA MAR THOMA MANSIONS

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SINGAPORE PROPERTY WEEKLY Issue 77

Postal District 12 12 14 14 14 15 15 15 15 15 16 17 17 17 17 18 18 18 19 19 19 19 19 20 20 20 20 21 Project Name TRELLIS TOWERS THE ABERDEEN CASSIA VIEW STARVILLE WING FONG COURT ONE FORT THE ESTA AXIS @ SIGLAP MANDARIN GARDEN CONDOMINIUM VILLA MARINA BAYSHORE PARK DAHLIA PARK CONDOMINIUM DAHLIA PARK CONDOMINIUM CARISSA PARK CONDOMINIUM AZALEA PARK CONDOMINIUM RIS GRANDEUR THE TROPICA MELVILLE PARK THE CHUAN KOVAN RESIDENCES ROSYTH VILLE KOVAN MELODY THE SPRINGBLOOM CLOVER BY THE PARK BRADDELL VIEW FAR HORIZON GARDENS FAR HORIZON GARDENS THE CASCADIA Area (sqft) 1,141 1,302 1,206 1,238 1,163 1,227 1,410 915 1,001 1,916 936 1,249 1,098 1,647 1,335 1,292 1,227 936 936 1,798 1,087 1,227 1,539 1,281 1,615 1,292 1,152 990 Transacted Price ($) 1,410,000 1,095,700 1,320,000 1,100,000 875,000 1,680,000 1,903,500 1,170,000 1,198,000 1,800,000 1,060,000 1,120,000 924,888 1,380,000 1,055,000 1,280,000 1,120,000 788,000 1,390,000 2,210,000 1,188,000 1,270,000 1,508,220 1,800,000 1,500,000 1,120,000 880,000 1,608,000 Price Tenure ($ psf) 1,236 FH 841 FH 1,095 FH 889 FH 753 FH 1,369 FH 1,350 FH 1,279 FH 1,197 99 939 99 1,132 99 897 FH 842 FH 838 FH 790 999 991 FH 913 99 841 99 1,484 999 1,229 99 1,093 999 1,035 99 980 99 1,405 99 929 99 867 99 764 99 1,624 FH
Postal District 21 21 21 21 21 21 22 23 23 23 23 23 26 26 27 Project Name MAPLEWOODS THE NEXUS THE BLOSSOMVALE CAVENDISH PARK ASTOR GREEN CHARISMA VIEW PARC OASIS PARK NATURA DAIRY FARM ESTATE HILLBROOKS THE WARREN MONTROSA BULLION PARK SEASONS PARK ORCHID PARK CONDOMINIUM Area (sqft) 850 1,496 1,399 1,227 1,087 1,066 1,227 1,744 2,131 1,173 1,076 861 1,259 1,249 1,152 Transacted Price ($) 1,250,000 2,100,000 1,850,000 1,480,000 1,250,000 1,188,000 1,000,000 2,050,000 2,300,000 1,180,000 965,000 765,000 1,250,000 1,140,000 868,000 Price Tenure ($ psf) 1,470 FH 1,404 FH 1,322 999 1,206 99 1,150 99 1,115 FH 815 99 1,176 FH 1,079 FH 1,006 FH 897 99 888 999 993 FH 913 99 754 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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