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Archive for January 2010

Classic furniture I would love to own

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I tend to be unadventurous when it comes to new things. I read reviews, surf for positive opinions on just about anything before giving it a go. If there’s a new movie out, I rotten it. A new place to eat at Vivo? I will be googling ieatishootipost or ladyironchef.

Furniture for a new home? I m going straight for classics where a million bums have sat on and raved about. It’s unimaginative but when space is limited, I rather err on the side of quality.  So here are some of the furniture pieces I would kill to have.

Eames Lounge Chair and Ottoman
Designed by Charles and Ray Eames

Eames Lounge Chair and Ottoman

There isn’t one I sat on that I have not been blown away at how comfortable it is. XTRA had a few limited edition all black pieces, and I have seen some messed with in plaid or even refurbished in green floral that actually looked quite nice. You can’t go wrong with this one regardless of taste.

Barcelona Chair
Designed by Ludwig Mies van der Rohe

Barcelona Chair

Literally designed for kings, this chair was designed in 1929 for the King and Queen of Spain at Barcelona’s World’s fair. I love it in black but the rusty brown is fabulous too. Now I wish I had bought the used pieces from Massimo Dutti where they were renovating their Liat Towers store.

Tulip Chair
Designed by Eero Saarinen

Tulip Chairs

I think these would make great bar counter chairs if you have an open concept kitchen with a low bar counter. The backing helps for those who haven’t had their coffee yet after getting up from bed.

Swan Chair
Designed by Arne Jacobsen

Swan Chair

The swan chair was created in 1958 by Arnes Jacobsen, who is also famous for another animal inspired chair – the ant chair. Would be great in the living room complementing without outshining the other furniture.

The question now is how to fit them all in.

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Written by L

January 27, 2010 at 11:29 pm

Posted in Architecture

Ideas to style a studio with black

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Black is not one of the colours you are going to find in Ikea. Black and white is not warm enough and too cliche. Too much black in a small apartment and you get a confinement cell. But this studio in Copenhagen gets all ticks for its inspiring black and white design and still keeping it real.

Black and white bar-kitchen

The grey sofa and parquay tiles brings out the warmth

White shower accented with saturated blacks

Thanks Apartment Therapy.

Written by L

January 27, 2010 at 2:12 pm

An expanding table for a shrinking space

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From Furniture Fashion, This Janus Expanding Dining Table is a solution for managing space in a small place. You will see its cousins (the square to circle tables) in Chinese restaurants this lunar new year. So here’s a pre-LNY idea for your summer cleaning and renovation.

From Mahjong Table

To Candlelit Dining

Go here to see the vid on how it transforms. “Ree Rawt Row Ra Reet!”

The Transformers Transforming Sound Effect

Written by L

January 27, 2010 at 1:41 pm

Tan Quee Lan Suites Scavenged

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Post-Christmas (by the way the best time to buy Christmas gifts), I plonked myself down in Page One while J went on a rampage in Vivo. I came across a book on WOHA, the award-winning design firm who designed many of  the gorgeous buildings in Singapore.

The Church of St Mary of the Angels, in Bukit Batok is one of the them, and is a beautifully crafted modern Catholic church.

Credit to LifeInMacro on Flickr

On the residential end, WOHA has also designed Newton Suites, which encapsulates the idea URA was really going for when free planters were introduced.

Credit to amorphity on Flickr

WOHA is also not without it misses, and the Iluma, opposite Bugis Junction is right up there in the butt-ugly column, IMHO.

Credit to amorphity again

Most recently, the firm is the news for one half of the massively oversubscribed BTO in Dawson – The SkyVille@Dawson, which unfortunately does not resemble the awesome submitted design.

For WOHA's sake I will only show the original design

Tan Quee Lan Suites

But what I saw in the book that was really interesting is the little known project of Tan Quee Lan Suites. It is actually a mixed development of office and residential units. It was a winning URA Heritage Award in 2006 which describes it best as

Comprising six pre-World War II Transitional shophouses, the development incorporates a new rear block to double the usable space. Currently, shops and restaurants reside at the ground level while offices were on the second. Apartment suites occupied the rest of the floors.

The full view of Tan Quee Lan Suites

As you can see, a modern rear block was added to the back of the shop-houses to increase the available space. This creates that juxtaposition of heritage and modern imagery which we all try to capture with our first camera. At least I did.

The residential units at the top of the rear block is another example of unique living spaces. Tan Quee Lan Suites houses only 26 residential units from 3rd to 5th floor, with what seems like terraced houses on the top floor. They even come with a private sanctuary.

I managed to scavenged a few pictures of the suites, unfortunately all artist impressions. Credit goes to Habitat.com.sg.

Model of Tan Quee Lan Suites

The suites seem to have views on both sides, and along with the garden creates such an airy, open space. In Chinese we say 通风 to describe the air flow.

The Living Area

The bedrooms and study are well located on the 2nd floor, creating a nice separation of living and bedroom areas. This is kinda like the Miro lofts, but I’m not sure if  Tan Quee Lan Suites has a loft area.

The Study

I love unique living spaces. Lofts, conservation houses, shop-houses, etc, they have a boutique feel to them. Tan Quee Lan Suites is no exception, in fact it takes the cake by mixing the old and new in city living and even plonking terrace homes on top of 6 shop-houses. If you own one of these units, think of it as owning a piece of history and the future.

Awesome Singapore Conservation House

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Saw this on Furniture Store Blog, featuring a conservation house right here in Singapore. If you are one of the lucky few who managed to secure this uniquely Singapore home, I suppose you would have the means to renovate it like this.

The very conservative conservation house exterior

And wait for it …

Legendary new world inside

Who says you can't have a pool in a shophouse

Fake books but awesome shelving

Who can forget the stone bath?

For more pictures check out the full post at the Furniture Store Blog.

Written by L

January 19, 2010 at 5:54 pm

Understanding En-blocs And What Gets Paid

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The Interlace - The Leasehold Giant Children's Playground

The Shore Residences left me thinking, who exactly gets paid for an en-bloc? The happily displaced owners of the en bloc for sure. The government or one of its statutory boards definitely, but for what? And what’s the difference betwen land that is freehold and leasehold when it comes to en-bloc? This post will try to explain some of the factors that make an en-bloc worth considering to developer using The Interlace (Formerly Gillman Heights) as a case study.

When would a developer purchase a property for en-bloc?
For a leasehold or freehold property to be worth purchasing, the land must have potential to be redeveloped profitably. Factors that affect the en-bloc potential of a property are:

  • Location affects the capital appreciation of the redeveloped property and determines its positioning. It is easier for a developer to market a luxury condominium in Orchard Rd than in Pasir Ris.
  • Plot Ratio is determined by land size, max floor height and the built-up area of the property. Properties with large land area and small built-up are ideal for redevelopment to maximize their plot ratio.
  • Asking Price is the value that the developer pays the collective owners for the site. Developers have to weigh the project’s age, condition, bank loans and possible legal battles in the price negotiation.
  • Development Charge is the levy that paid by the developer to the state for redevelopment to a more valuable i.e. higher plot ratio. This is imposed regardless whether the land is freehold or leasehold.
  • Lease Top-up (For Leasehold) depends on the age of the project and the land valuation. This also depends on the land owner whether the lease top-up is approved and the length of the new lease.

What is the difference between freehold and leasehold en-blocs?
Leasehold sites here refer to 99-year properties where the land is state owned. The difference is the type of levy (development charge or differential premium) imposed to enhance the value of the land:

  • For Freehold – Development charge
  • For Leasehold – Differential Premium + Lease top-up

For converted freeholds like The Shore Residences, any redevelopment would still incur a development charge, but lease top-up and differential premium if any, will be probably depend on the strata title owner i.e. Far East Organisation.

What is Development Charge (DC)?
According to Ministry of National Development, the principle of DC is to allow the land value of a site to be enhanced due to rezoning the site to a higher value use i.e. industrial to residential or increasing the plot ratio. The DC system, where a part of the enhancement in land value is taxed, allows the State to have a share of the gains from the value enhancement arising from its grant of planning approval. The DC rates is pegged to a percentage (%) of the land enhancement value.

DC calculated is based on the published Table of Development Charge (DC) rates which states the DC rate (per square metre) of GFA for each location group in Singapore. The Table of DC is reviewed every six months, in March and September of each year. The most significant change to the DC rates has been revision of the pegged rate with effect from 18 July 2007 from 50% of enhancement value to 70%. This is a huge 40% increase in land enhancement levy for the developer and a blow to en-bloc sales.

What is Differential Premium (DP)?
The DP system is a modification of the DC system to better account for leasehold redevelopment. It is still based on the Table of DC rates and therefore also affected by the July 2007 revision of the pegged rate. For DP, the DC rates will be adjusted to reflect the age of the leasehold land, using a table of leasehold values as a percentage (%) of freehold value. This is similar to PARF and COE value of your car when you want to scrap it. If you scrap your car early you can still get a most of it back, but this value decreases significantly after a certain age.

Leasehold Table – Depreciating much like your car

The Leasehold Table is also used to calculate the Lease Top-up back to 99-years based on the valuation of the land.  You can see this more clearly in the case study.

Case Study: The Interlace (Formerly Gillman Heights)

Feb 2007, Capitaland announced that is acquired Gillman Heights Condominium though an en-bloc. Capitaland paid S$548 million inclusive of a differential premium of S$90 million to top up the lease to 99 years and to increase the plot ratio to 2.1. In its place, The Interlace. A giant’s playground of Lego blocks spread over the 8 hectare site. I think the architecture is gorgeous and courtesy of the firm who was also responsible for this monstrosity in China.

CCTV Headquarters - We are watching you or ... was it you are watching us?

I will tabulate the fact sheet for easy reference,

Gillman Heights The Interlace
Completed 1985 2015
No of Units 607 1040
No of Blocks 10 31 (Literally)
Highest Floor 20 24
Plot Ratio 1.8 2.1
Est. Psf Sold (Owner) $500 psf $1,000 psf

Most of the information above along with the total land area of 836,432 sq ft  (77,707 m²) can be found in this Capitaland press release. We can now use that and what we learnt to estimate the Differential Premium and Top-up Value.

Firstly, Capitaland made the press release in Feb 2007. We are going to assume that the latest Table of Development Charge before the date was used – Sept 2006. Note that Capitaland seemed to have just missed the July 2007 deadline for the revision of DC rates. Phew!

From the map and the DC table, the Gillman Heights site is at Sector 83 and is classified B2 for non-landed residential use. Also from the Leasehold Table, Gillman Heights at 22 years old is valued at 90% of a freehold property. Below is the calculations I followed from SLA documents.

Base Value
User Group: B2
DC Rate: $1,500
Base GFA:  139,873 m² (77,707 m² x 1.8)
Base Amount:
$188,828,550 (137,873 m² x $1,500 x 90%)

Proposed Value
User Group: B2
DC Rate: $1,500
Proposed GFA:  163,185 m² (77,707 m² x 2.1)
Proposed Amou
nt:  $220,299,750 (163,185 m² x $1,500 x 90%)

Differential Premium = $31,471,200 (Proposed Amount – Base Amount)
Lease Top-up Amount = $58,528,800 ($90 million – Differential Premium)

Basically, the developers got out lucky on this one in terms of value, they paid only $363 psf per plot ratio which is very low by present standards. They also missed being hit by the change in DC rates, which would have cost them another $12.6 million. And because the project will only be 24 floors high, construction costs aren’t likely to be exorbitant.

If you take construction costs to be conservatively $300 psf and say 80% of the total GFA can be sold to future residents, profits for the sale of The Interlace could be in the low hundreds of millions. That’s pretty impressive for a leasehold site.

Written by L

January 19, 2010 at 1:16 pm

The Shore Residences and Converted Freeholds (Part 2)

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Continuing from Part 1, I will discuss about the 2nd point on whether the price gap between freehold and leasehold properties which may disappear during good times, but will appear as property ages is indeed true.

The statement makes sense. Buyers would naturally value a freehold property over a leasehold one, specifically a 99-year leasehold (999-year leasehold properties are as good as freehold in my book), since you get to keep it forever. However empirical evidence is needed to show how price gaps change over time. Due to insufficient data and time (Singapore is only 45), we can only really test the 1st part.

Firstly, The Shore Residences is not the first freehold conversion. Is there another freehold project that was converted to a 99-year leasehold? What other freehold-leasehold pairs are there with enough data to compare with? And lastly the sales data must go through 2006 – 2007 which is the period of Singapore’s recent property bubble or the good times.

1. District 10 – Jervois Jade (Converted freehold to 99-year leasehold vs Valley Park (999-year leasehold)
2. District 21 – Pine Grove (99-year leasehold) vs Pandan Valley (Freehold)

Round 1: Jervois Jade vs Valley Park

Jervois Jade and Valley Park are located in River Valley at the point where Jervois Rd, Delta Rd and River Valley Rd meet. Jervois Jade is on a freehold site but the property was converted to a 99-year leasehold. It is the apartment awkwardly shaped like a thin slice of cheese. I’m not 100% certain about the freehold conversion so do leave your comments. Valley Park on the other hand can be prominently seen from the main road by looking for the only Starbucks in the area.

Valley Park was constructed in 1997 while Jervois Jade was only completed in 2000, so our comparison goes back just 9 years. Clearly we are not comparing like for like here. Jervois Jade is a smallish 45 unit apartment while Valley Park is a 728 unit condo with full facilities and even a shopping centre, but the sales data over the years shows a remarkable similarity.

Jervois Jade vs Valley Park

The sales data have been smoothened for clarity and the price gap is the $ psf difference between Valley Park and Jervois Jade. As you can see from the stability of the price gap, there is a baseline level at $200 psf where I drew in a trendline so it can be seen better.

According to the article, The price gap between freehold and leasehold properties which may disappear during good times.

As such, one would expect the price gap to dip below the trend line and approach $0. The results show this is to be untrue! In fact the gap had widened during the property boom from $200 to as much as $500 psf during the property boom. As that bubble burst, the price gap then reverted back to the baseline level before widening again with the new rising trend. It seems that property buyers still prefer freehold over leasehold properties during the good times.

Round 2: Pine Grove vs Pandan Valley

Pine Grove and Pandan Valley are located along Ulu Pandan Rd. Pine Grove, once a HUDC now a privatised condominium and waiting for en-bloc. Pandan Valley, built in 1979 and older than me, is a full facilities freehold condominium. Both have over 600 units and over 25 years of history, so we have a nice set of data to work with.

Pine Grove vs Pandan Valley

Firstly, we can draw in a trend line at $140 psf where prices had found support. What is different from the Jervois Jade chart is that there were 2 significant dips in ’06 and ’08 where the price gap broke the trend line and came as low as $40 psf. The dips also corresponded first with the property boom and then with price decline in ’08. Unlike Jervois Jade, the price gap did return back to the trend line level.

This is significant as even in declining property prices, the price gap had also decreased. Being leasehold we expect Pine Grove to fall in line with Pandan Valley, perhaps falling even more as its demand is less inelastic. Another factor is at work here to keep prices supported at $600 psf – En-bloc speculation. Pine Grove much like Gillman Heights is sitting on a huge and lucrative morsel of land, which can be profitably redeveloped.

En-blocs are directly correlated to economy strength, i.e. the good times. The link is that en-blocs require a lot of capital, in the hundreds of millions. For a project like Pine Grove  if say every owner gets paid $2 million, the developer would have to pay out $1.32 billion. Such credit can be loaned from the banks more easily at low rates during economic expansion than in crisis. As we recently seen in ’09, tightening of bank lending meant there was only 2 en-blocs the whole year.

So en-bloc speculation might explain the difference between the 2 charts, but there are similarities as well. You can see that after the dip in ’06, the price gap again spiked to $400 psf and then declined, much like Jervois Jade above it still follows the economic cycle. So buyers still seem to prefer freehold over leasehold properties during good times, unless there is en-bloc potential.

Conclusion

As the results show, during the good times of property boom, the price gap actually widened significantly instead of disappearing. For the gap to decrease, as the price of the freehold property increases, the price of the leasehold must increase even more. The charts showed that both leasehold properties increased less than their freehold counterparts, apart from dips which might be explained by the en-bloc potential of the leasehold property.

I feel that owners of Pine Grove should note when these dips occur where Pine Grove and Pandan Valley prices are almost par. Sell your property then and buy a freehold unit. Returning to The Shore Residences, there is uncertain en-bloc potential for the site, so that is a loss of capital appreciation potential by purchasing a converted freehold, on top of the high valuation Far East has attached to the project.

Do your own research. If you own a leasehold property with similar freehold properties in the area, you might find that they have sales data with the same characteristics as the properties above. That might give you an edge in timing the sale of your property and getting a freehold unit that lets you fully participate in a property market boom.

Written by L

January 11, 2010 at 6:17 pm