Issue 102

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

CONTENTS
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Building a High Return UK Property Portfolio Property Renting Tip #6: Who are your Tenants?

FROM THE

EDITOR

Welcome to the 102th edition of the Singapore Property Weekly.

Hope you like it!

Mr. Propwise

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Singapore Property News This Week

Resale Property Transactions (April 17 April 23)

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SINGAPORE PROPERTY WEEKLY Issue 102

Building a High Return UK Property Portfolio

With the high property prices in Singapore, many investors are looking overseas to find attractive investment opportunities. In this article we interview Matthew Snedden, one of the United Kingdoms most recognized real estate experts and a speaker at the National Achievers Congress 2013, on both his failures and successes in building his property portfolio, and how investors can build a high return UK property portfolio with little capital.

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SINGAPORE PROPERTY WEEKLY Issue 102 Could you share your stories of how you began your property investing journey and achieved the success that you have today? My journey began when I became desperately unhappy with the job that I was doing. I had spent 12 years as a property manager and felt that although the wages were not bad I was no longer enjoying it. I attended all the Tigrent courses and met and became good friends with a lot of the speakers and mentors that the company had. This was the major breaking point for me these people helped me gain the tools required and the education to help me overcome the fears I had built up. Once I had purchased my first property, I saw this as a massive sign that I was going to do this as big as I could. Over the years as Ive
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changed my strategy to suit my style, I gained the confidence to do larger scale developments and refurbishments. I now love what I do this is a huge driver for me! What does your property portfolio look like today? What steps did you take to build up that portfolio? The property portfolio I have built over time is far greater than I ever expected having. I have bought and sold well over 100 properties in the past 10 years. Throughout this process, I bought a number of buy to let properties which range from two bedroom houses to six bedroom houses, and one to three bedroom flats as well. The majority of my property portfolio held to today are from the developments that I have taken on in recent years (converting large buildings into one, two or three bedroom flats/apartments).
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SINGAPORE PROPERTY WEEKLY Issue 102 I have found this method better for my ROI (Return On Investment) and also for the ease of property management. People looking to generate wealth from the markets are faced with a wide range of options that include trading and investing in property, stocks, options, futures and foreign exchange. Which of them do you think would be more suitable for a beginner looking to build his or her wealth? The beauty of property for me is that you can add value to it and it can be seen. I can drive past it and know that I have turned something that was completely run down and neglected, into a place that somebody would love to live in. This gives me massive satisfaction and will continue to drive me. For this reason, a beginner, with the right leadership, can make a good return on their investment much more
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simply in property in my opinion. What property types (e.g. residential, commercial etc) do you recommend investing in and why? For a beginner, residential property is where most investors will start and perhaps even finish. There are a few factors I would take into consideration with this. Firstly, most people understand residential property because they grew up in one. We understand what people want to live in. Secondly, price is a consideration. While not always the case, commercial property is typically seen as a more expensive and more for the experienced investors. Thirdly, lenders look at investors in the commercial world as more experienced. The lending criteria are defined differently to residential and this may persuade the investor to stick with residential rather than commercial.
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SINGAPORE PROPERTY WEEKLY Issue 102 I believe purchasing residential property is a much easier and simpler strategy than commercial. However, commercial property has scope for higher returns. Which global property markets do you think have the greatest profit potential for an investor and why? Which markets do you think investors should avoid? I personally have purchased property in both the UK and Australia. I have gone back and forth to both countries because I believe in both markets. Australia still has strong capital growth, whilst UK has very strong rental demand and high rents, thus strong cash flow. I believe in the UK market for people who are looking to build a sizeable portfolio which can generate a large cash flow base. I look into other countries that have good cash flow and feel that the advantage the UK has over the others is that its population size is large relative to its geographic size. This allows for the market to be strong even when the economic outlook seems bleak. What pitfalls should a global property investor be wary of? As an investor, no matter what market, country or entity they are looking to invest in, they need to understand the pitfalls! An investor needs to be aware of the areas they purchase in, types of finance available to them for their strategy, and understanding the demand level for either sale or rent. Understanding the employment status of an area will determine types of tenants or buyers as well as the potential sale prices that can be achieved. Looking at the average income in the area will determine peoples ability to get mortgages.
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SINGAPORE PROPERTY WEEKLY Issue 102 How much capital do you need to have to build a property portfolio and what sort of rental yield and capital gains can you get? Could you share with us some of your best and worst property investments? This is a really difficult question to answer however London typically achieves a yield of say 4% to 8%, whereas the North of the country typically achieves 10% plus. Understanding the strategy is the key. My main aim is to purchase property, then add value to it and either sell or refinance at a higher level to pull out a large part of the capital I originally put in. To build a sizable portfolio very fast, cash is required however this can be borrowed for the short term. There are many lenders out there who offer this and so the main point here is to find a property that fits well with the lenders. Once this has been identified, lenders are more than happy
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to lend to you. My worst property investments were the ones I did based on what everybody else does, when I ignored the rules and skills I learnt and bought property based on a sales pitch delivered by a new build company. I put my money in the deal, the market dropped, and the rents did not achieve what was sold to me. The best ones are the rest... buy below market value, change the use and add value to achieve high ROI and yields. What are the most important lessons youve learnt about living a happy, successful and meaningful life? For me, living a happy, successful, and meaningful life means understanding who you are, what gifts you have and how that fits in with rest of the world.
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SINGAPORE PROPERTY WEEKLY Issue 102 Success is to me is measured by my overall happiness. This can be measured through wealth, ability to spend time with love ones, and how much you are living life on your own terms. I often think how I would do things differently if given a second chance. This allows me to make better decisions the first time round. Matthew Snedden will be going in depth on the strategies he has used to build his UK property portfolio with little capital and add value to achieve high returns at the National Achievers Congress 2013.

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SINGAPORE PROPERTY WEEKLY Issue 102

Property Renting Tip #6: Who are your Tenants?

(Reference:www.ica.gov.sg, www.mom.gov.sg) The Immigration Act declares that it is an offence for any person to harbor illegal immigrants. Do your due diligence to ascertain that your Tenants hold a valid permit or passto let them stay in Singapore. The Act sets out the threefold test of due diligence: The defendant has required the person to produce the original employment pass or work permit or passport or travel document for inspection; The defendant has checked that the particulars of the permit or pass correspond with the particulars of the passport or travel document; and Where the employer is identified, the defendant has verified that the particulars of the person employed correspond with the employers record. By Eileen Tan and Ui Wei Teck, property investors and authors of Enjoying Mid-Life Without Crisis. This tip and dozens more are from their book.

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SINGAPORE PROPERTY WEEKLY Issue 102

Singapore Property This Week

Residential
March sees 0.9% increase in non-landed private home prices According to NUSs overall Singapore Residential Price Index (SRPI), the prices of completed non-landed private homes excluding ECs saw a 0.9% rise in March, compared to a 1.2% fall in February. This was largely due to the Central Region sub-index (excluding small units), which saw a 2.2% increase in March, after a 3.7% fall in February. Nevertheless, there is still a large supply of unsold units in the Central Region (both completed and under-construction). The Non-Central Region sub-index (excluding
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small units) remained stable with a slight 0.1% decline in March, after a 0.1% gain in February. Meanwhile, the sub-index for prices of completed shoebox units (up to 506 sq ft) islandwide saw a 0.7% gain in March, after a 0.9% fall in February.
(Source: Business Times) Non-landed private home owners made $107 million profit from resales

According to OrangeTee, non-landed private home owners made a total of $107 million in gross profit from quick resales in the period of Q1 2012 to Q1 2013. This is attributed to the high property prices.

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SINGAPORE PROPERTY WEEKLY Issue 102 In addition, it was also noted that only newly completed homes that were resold after receiving the TOP yielded good profits. There were 348 transactions which were sold within one quarter from which the TOP was obtained, of which only one was unprofitable. Each unit offered a 33% average gain in profit, with the most profitable being units in the OCR, which offered a 41% gain, compared to 31% and 25% gains for the RCR and CCR, respectively. Generally, shoebox units (no more than 50 sq m) were less profitable than non-shoebox units in all regions, with an average profitability per unit of $132,000 or 25%. The highest average gross profitability of 43% per unit in the period studied was in Q3 2012; this has fallen since given the cooling measures. (Source: Business Times) 30% of 99-year Eden Residences Capitol sold 12 of the 39 residential units at Eden Residences Capitol, the residential component of the mixed development at the junction of Stamford and North Bridge roads, have been sold at an average of $3,000 psf. Unit sizes in the residential component range from 2,100 sq ft to over 6,500 sq ft. The project also features an 800-seat Capitol Theatre which will offer both movies and performing arts, Capitol Building and Stamford House, a four-level retail component and 157-room The Patina, Capitol Singapore hotel. Rooms in the hotel will range from 45 to 65 sq m. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 102 30 units of 103-year leasehold Ferra launched for sale 30 units of the 104-unit 22-storey Ferra, a luxury condominium development at 1 Leonie Hill have been launched for sale, at prices from $2.3 million for a 732 sq ft unit, or $3,160 psf. Units in the development ranges from 732 to 893 sq ft, in addition to two 2,013 sq ft penthouses which have yet to be launched. Buyers can customise their unit layout or choose from a selection of predesigned layouts. It is expected to draw some interest given the smaller and therefore more affordable units, its design and the small number of units released. (Source: Business Times) Commercial Three 22-year industrial sites at Tuas South St 6launched for sale

The three sites include a 0.45 ha corner plot (Plot 1) and two other 0.30 ha plots. All three sires have a maximum GPR of 1.0 and are zoned for Business 2 development. They will likely attract industrialists, given the zoning, the short lease term and the size of the plots. The first plot is expected to attract seven to 11 bidders with bids of $75-$90 psf ppr while the other two plots are likely to attract five to nine bidders with bids of $70-$80 psf ppr. The tender for the sites will close on June 11 at 11.00am.
(Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 102 Plans for Tanjong Pagar Centre revealed Plans for Tanjong Pagar Centre, an integrated mixed-use development located above the Tanjong Pagar MRT station, have been released by its developer, GuocoLand. It will consist of Guoco Tower, a 38-storey Grade A office block, six levels of retail and F&B space, a luxury business hotel, a sheltered event space in Tanjong Pagar City Park and residential units in a 1.7 million sq ft floor space. The offices block will offer large floor plate and column-free spaces of 25,00029,000 sq ft while the 100,000 sq ft retail mall will offer largely F&B outlets. There will also be 200 one- to four-bedroom units and penthouses in TP180, the residential component. (Source: Business Times)

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SINGAPORE PROPERTY WEEKLY Issue 102

Non-Landed Residential Resale Property Transactions for the Week of Apr 17 Apr 23

Postal District 1 3 3 3 3 4 5 5 7 7 9 9 9 9 9 9 9 9 10 10 10 10 10 11

Project Name THE CLIFT DOMAIN 21 RIVER PLACE PEARL BANK APARTMENT PEARL BANK APARTMENT THE COAST AT SENTOSA COVE HERITAGE VIEW BUONA VISTA GARDENS THE BENCOOLEN THE PLAZA PATERSON SUITES GRANGE INFINITE GRANGE INFINITE THE OXLEY THE COSMOPOLITAN MAKEWAY VIEW THE IMPERIAL WILKIE STUDIO ARDMORE PARK MILL POINT MILL POINT THE LEVELZ DUCHESS CREST STRATA

Area (sqft) 807 560 1,033 1,755 1,324 2,024 1,195 1,572 958 807 2,196 2,573 2,702 549 1,324 1,453 2,024 1,227 2,885 527 538 786 4,295 840

Transacted Price ($) 2,119,000 910,000 1,480,000 1,535,000 1,100,000 3,620,000 1,450,000 1,505,000 1,456,160 1,080,000 5,700,000 6,200,000 6,388,000 1,190,000 2,750,000 2,860,000 3,870,000 1,570,000 8,398,000 1,010,000 1,010,000 1,336,200 4,750,000 1,400,000

Price Tenure ($ psf) 2,625 99 1,626 99 1,432 99 875 99 831 99 1,789 99 1,214 99 958 FH 1,520 99 1,338 99 2,596 FH 2,410 FH 2,364 FH 2,168 FH 2,077 FH 1,968 FH 1,912 FH 1,279 FH 2,911 FH 1,915 999 1,877 999 1,700 FH 1,106 99 1,667 FH

Postal District 11 12 12 14 14 14 14 15 15 15 15 15 15 15 16 16 16 16 16 17 17 19 19 19

Project Name THE LINC GALLERY FIFTEEN OLEANDER TOWERS THE WATERINA ESCADA VIEW CASA SARINA SIMS RESIDENCES THE SEA VIEW AMBER RESIDENCES ESTIQUE THE MAKENA THE WATERSIDE HAIG COURT THE MEDLEY THE BAYSHORE BAYSHORE PARK EAST MEADOWS THE CLEARWATER TANAMERA CREST DAHLIA PARK CONDOMINIUM AZALEA PARK CONDOMINIUM SUNGLADE CHILTERN PARK HILLSIDE MANSIONS

Area (sqft) 1,281 1,442 1,464 1,302 775 1,109 1,356 1,518 1,249 603 1,518 2,142 1,550 1,302 1,259 3,477 1,195 1,378 1,647 1,281 1,679 1,141 915 1,141

Transacted Price ($) 2,050,000 1,620,000 1,488,000 1,750,000 800,000 1,100,000 1,100,000 2,428,800 1,908,888 888,000 2,200,000 3,100,000 2,030,000 1,470,000 1,249,000 3,408,000 1,168,000 1,310,000 1,400,000 1,180,000 1,500,000 1,370,000 1,050,000 1,150,000

Price Tenure ($ psf) 1,600 FH 1,123 FH 1,016 99 1,344 FH 1,032 FH 992 FH 811 99 1,600 FH 1,529 FH 1,473 FH 1,450 FH 1,447 FH 1,310 FH 1,129 FH 992 99 980 99 978 99 951 99 850 99 921 FH 893 999 1,201 99 1,148 99 1,008 FH

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SINGAPORE PROPERTY WEEKLY Issue 102

Postal District 19 19 20 20 21 21 21 21 21 21 21 21 21 22 23 23 23 25 26 27 28 28 Project Name CENTRAL VIEW CHARLTON CORNER THE GARDENS AT BISHAN LAKEVIEW ESTATE JARDIN GARDENVISTA GARDENVISTA SUMMERHILL SIGNATURE PARK SOUTHAVEN II BUKIT REGENCY HIGH OAK CONDOMINIUM SHERWOOD TOWER IVORY HEIGHTS MERAWOODS REGENT GROVE THE WARREN CASABLANCA CASTLE GREEN YISHUN EMERALD GRANDE VISTA GRANDE VISTA Area (sqft) 1,216 1,044 1,582 1,615 1,701 872 872 1,604 1,399 818 1,055 1,658 1,421 1,668 1,345 1,163 1,195 1,119 1,173 1,023 1,238 1,238 Transacted Price ($) 1,095,000 910,000 1,700,000 1,396,000 3,040,000 1,100,000 1,030,000 1,882,000 1,520,000 870,000 1,050,000 1,590,000 1,198,000 1,200,000 1,330,000 935,000 948,000 980,000 980,000 835,000 1,218,000 1,180,000 Price Tenure ($ psf) 900 99 872 FH 1,074 99 865 99 1,787 FH 1,262 99 1,181 99 1,173 FH 1,086 FH 1,063 999 995 FH 959 99 843 99 719 100 988 999 804 99 793 99 875 99 835 99 817 99 984 999 953 999

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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