Property

Loyang Valley, a resort-style condominium located in Changi, will be relaunched for collective sale on 8 July, this time with a reduced reserve price of S$880 million. The figure marks a S$100 million reduction from its previous asking price in 2022, which marketing agent Huttons Asia describes as “a realistic and achievable figure given current market conditions”. The 362-unit development, completed in 1985 and spanning 840,648 sq ft, sits on a 99-year leasehold site with 56 years remaining. The estate’s substantial land area and proximity to the upcoming Loyang MRT station on the Cross Island Line enhance its redevelopment potential, said Terence Lian, Head of Investment Sales at Huttons Asia. The project’s last tender closed without bids in December 2022 after the reserve price had been increased from an initially proposed S$880 million to S$980 million in response to demands for higher returns. This time, however, Lian and his team have secured the requisite 80% consensus among homeowners to proceed with the sale. Lian noted a significant shift in owner expectations, with many recognising the opportunity to unlock asset value in the face of lease decay, mounting maintenance costs, and considerations around legacy planning. He also cited the confirmed MRT connectivity as a catalyst for renewed interest. The revised reserve translates to potential payouts of approximately S$1.67 million for owners of the smallest two-bedroom units (1,001 sq ft), and up to S$3.9 million for the largest four-bedroom configurations. One long-term resident, who purchased a 1,500 sq ft unit for under S$300,000 in 1985, estimates he could receive over S$2 million. He plans to downsize, travel, and preserve the remainder of the proceeds. The potential easing of height restrictions around Changi Airport, while not yet officially confirmed, could further bolster developer interest. Details are expected to be clarified when the Urban Redevelopment Authority unveils the Draft Master Plan 2025 on 25 June, which will update zoning and gross plot ratio guidance. Under the current 2019 Master Plan, the site is zoned for residential use with a gross plot ratio of 1.6, allowing for approximately 1.35 million sq ft of gross floor area and an estimated 1,249 units, subject to planning approvals. Alan Cheong, Executive Director of Research and Consultancy at Savills Singapore, described the S$880 million reserve as reasonable, given the land size. However, he cautioned that developers would need to weigh the risks of launching a large-scale development of over 1,200 units. He suggested two supportive factors: first, a likely scarcity of new launches in the Loyang area until at least 2027, which could result in pent-up demand; second, the strategic location adjacent to the future MRT station, a feature developers could leverage to drive sales at higher prices. According to Lian, developer interest in sizeable leasehold sites in the east has been measured but is gradually increasing, aided by improvements in market conditions. He attributed the lack of traction in the 2022 tender to factors including rising interest rates, surging construction costs, and policy-related risks such as additional buyer’s stamp duties. These headwinds have since moderated. Easing interest rates, along with infrastructure upgrades like the upcoming Changi Airport Terminal 5, are expected to bolster confidence among developers and investors. Loyang Valley’s first collective sale attempt in 2018, priced at S$750 million, failed to secure sufficient backing. Its 2022 exercise saw greater support, driven by improved connectivity and heightened redevelopment awareness, but the high reserve remained a sticking point. With momentum now shifting and a more calibrated price expectation, homeowners remain cautiously optimistic that the third attempt may finally succeed. -The Strait Times

China is drawing on a substantial government-run savings scheme totalling 10.9 trillion yuan (US$1.5 trillion or RM6.43 trillion) in an effort to stabilise its struggling housing sector, providing citizens with a financing alternative amid a tightening banking landscape. The Housing Provident Fund — a policy originally modelled after Singapore’s system more than three decades ago — has grown in significance as commercial banks grapple with squeezed margins, slowing profits and increasing non-performing loans. The fund, which requires monthly contributions from both employees and employers, offers mortgage loans often at lower rates than commercial institutions. In 2023, outstanding mortgages through the fund reached 8.1 trillion yuan, outpacing lending by banks. “It’s a frontrunner among policies used to support the housing market,” said Chen Wenjing, Research Director at China Index Holdings Ltd. “The housing market has seen lingering pressure, and many local governments have leveraged this policy to reduce the mortgage burden.” President Xi Jinping has reaffirmed his administration’s commitment to revive the property sector and mitigate the impact of external economic shocks, a topic that gained renewed attention after recent US-China tensions over trade commitments resurfaced. As confidence in the housing market remains weak, easing access to affordable mortgage financing has become critical. According to Bloomberg Intelligence analyst Kristy Hung, the top 100 Chinese developers are projected to experience a further 10% drop in contracted sales this year, totalling just 3.4 trillion yuan — less than a third of the 2020 peak. Residential sales continued their downward trajectory in May, with a 28% month-on-month decline in sales reported by the embattled Country Garden Holdings Co, highlighting persistent buyer caution across the sector. Previously underutilised due to strict conditions, the Housing Provident Fund has seen growing uptake following a wave of regulatory relaxations. Traditionally, borrowers would combine a larger, higher-interest bank loan with a smaller, cheaper loan from the fund. However, the scope of access to provident fund loans was constrained by variables such as deposit levels and marital status, and downpayment usage was often restricted. Since 2023, at least 50 cities and municipalities have relaxed these limitations, including raising withdrawal limits and expanding eligible usage. Shenzhen, one of China’s most expensive housing markets, recently permitted residents to tap into their provident fund accounts for downpayments. This follows major reforms in March which nearly doubled the city’s mortgage loan quotas compared to 2023. In Beijing, the fund financed 33% of residential mortgages in 2023, up from 29.4% in 2020, indicating a steady shift in borrower preference. The People’s Bank of China has also reduced interest rates for provident fund mortgages, making them 0.9 percentage points cheaper than those offered by banks. While the resulting 3% decrease in borrowing costs may offer limited short-term impact on overall sales volumes, it underscores continued government intervention. “It signals the government’s efforts,” said Liu Jieqi, a property analyst at UOB Kay Hian in Hong Kong. “But in the end, a broad property recovery hinges on effective implementation and an improved economic outlook.” Data show that outstanding home loans through the fund grew by 3.4% in 2024, even as commercial bank lending declined by 1.3%. With 180 million contributing employers and employees nationwide, the fund is well-capitalised to expand its role further. Its 10.9 trillion yuan balance significantly exceeds its outstanding mortgage loan commitments. For buyers such as Eli Zhang, a 30-year-old computer science researcher in Beijing, the programme offers much-needed relief. Zhang purchased a 700-square-foot suburban property in 2023 and now uses the fund to help manage her 4 million yuan (US$550,000 or RM2.33 million) mortgage. “The housing provident loans are getting cheaper and cheaper,” she noted, paying a competitive 2.85% interest rate. “With its help, my mortgage is quite affordable.” -Bloomberg

City Developments Ltd (CDL) has agreed to offload its majority interest in one of Singapore’s most recognizable office developments, as part of efforts to cut debt and restore investor confidence in the aftermath of a high-profile family dispute.   According to a person familiar with the matter, CDL will divest its 50.1% stake in the South Beach development to its current minority partner, IOI Properties Group Bhd. The Malaysian property developer will become the sole owner of the prime commercial asset once the deal is finalized. “The deal values the complex at about S$2.75 billion (US$2.1 billion),” the source said, requesting anonymity due to the private nature of the information. A representative from IOI declined to comment on the transaction, and CDL did not immediately respond to an emailed inquiry. CDL’s shares rose approximately 1.6% prior to a trading halt early Wednesday, pending an official announcement. The planned divestment comes amid mounting pressure on CDL to pare down its asset portfolio following internal turbulence that split the Kwek family—Singapore’s wealthiest clan. Though ties have since been mended between CDL Chairman Kwek Leng Beng and his son, CEO Sherman Kwek, the episode shook investor sentiment. In April, Sherman Kwek acknowledged the damage to shareholder confidence and emphasized that “reducing the growing debt load is a priority.” The sale will contribute significantly to CDL’s goal of exceeding last year’s asset disposal total of around S$600 million, which fell short of its original S$1 billion divestment target. South Beach, located in Singapore’s central business district, is a mixed-use development comprising a 34-story office tower, a 45-story JW Marriott Hotel, and accompanying retail space. Designed by the acclaimed Norman Foster-led architecture firm, the site has seen several changes in ownership over the years. CDL originally acquired the land parcel in 2007 for nearly S$1.69 billion, alongside two international partners—Dubai World Corp and El-Ad Group Ltd. The global financial crisis delayed construction, prompting the partners to exit, with IOI later acquiring a minority stake in 2011. A 2023 biography noted that the elder Kwek had resisted granting IOI an equal stake at the time, determined to retain control over the project. IOI’s acquisition of South Beach will further entrench its presence in Singapore’s property market. The Malaysia-listed firm, controlled by the Lee family—whose fortune stems from the palm oil industry—also owns residential developments and the newly launched IOI Central Boulevard Towers, a prominent office complex in the city center. Despite its prestige, South Beach has faced some leasing headwinds. Major tenant Meta Platforms Inc vacated seven floors in the office tower last year. As of March, occupancy stood at 92.4%, down from 94.4% at the end of 2024. -Bloomberg