Eng Cheong Towers 13 Jan 2005

The New Paper - 13 Jan 2005 99-YEAR TOP-UP BONUS FOR FIVE PROPERTIES They will gain more 'staying power' By Desmond Ng desmondn@sph.com.sg HERE'S some New Year cheer for all leasehold home owners out there. The Singapore Land Authority (SLA) - in response to questions from The New Paper - said it has approved five applications to top up 99-year leases for residential projects from year 2000. For home owners, the move is significant because it could mean that the prices of such properties may stabilise or even go up, said housing analysts. Although the SLA did not name the projects, one of them is likely to be Far East Organization's Orchard Scotts. (See other report.) Only two months ago, Eng Cheong Towers made the headlines for being the first 99-year leasehold private property to be put up for sale en bloc, with an in-principle approval from SLA for the buyer to top up the lease, said marketing agent Jones Lang LaSalle (JLL). United Overseas Land and Low Keng Huat have bought the site for $47.5 million. There are now 65 years remaining on this site along North Bridge Road, and it could cost an estimated $8.5 million to top it back to 99 years, JLL said in earlier reports. Analysts said the topping up of the five properties may mean the value of 99-year properties could have more 'staying power', and not diminish over the years, as it has been doing now. Under the current 60-year rule, CPF members can't use their savings to buy 99-year leasehold private properties if the lease has less than 60 years left to run. Banks also take the lead from the CPF when it comes to home loans. This has affected the prices of such condos and landed property by squeezing out buyers who rely on their CPF savings to pay for their homes. In Singapore, a number of residential estates are built on sites that originally had 99-year leases but, in some cases, only about 70-plus years of the original lease remain. These include estates such as Pine Grove, Tampines Court and Farrer Court. JLL's regional director, Mr Lui Seng Fatt, said: 'I think this will certainly give some hope to leasehold home owners. 'This is a good thing. It'll set some precedent for future leasehold owners who might want to apply for lease top-ups.' Knight Frank executive director Tay Kah Poh added: 'It's a good indication that there's hope for home owners of such properties who are having difficulty finding buyers. 'But one shouldn't presume one precedent means all leasehold home owners can get the lease extension.' REVIEW IN PROGRESS SLA said that, generally, applications by property owners to top up the leases to 99 years to facilitate redevelopment are considered on their own merits. Said an SLA spokesman: 'In considering such applications, we would have to take into account the Government's long-term land use plans for the area. 'As for the Government's lease extension policy, we have in our recent replies to the media explained that the review of the policy, including the shorter lease period, is still in progress.' Other industry watchers feel a lease top-up is akin to renewing the building or project, like HDB's Selective En-Bloc Redevelopment Scheme (Sers) - the upgrading and re-development of current HDB towns. Under this scheme, old HDB blocks with redevelopment potential are identified and demolished, and residents are given a chance to upgrade to new and better flats nearby. ERA Singapore's assistant vice-president, Mr Eugene Lim, said these lease extensions can help renew the urban landscape, especially in Singapore where there are a lot of leasehold properties. He explained: 'In all practical terms, the useful life of a building is between 40 and 60 years and its usefulness would decrease as the years go by. 'Hence, there's a need to redevelop the building and it makes sense to top up the lease. Otherwise there would be too many old, dilapidated buildings on the island.' Home owner K H Teo, 57, feels lease top-ups could help his children. He owns a 99-year leasehold condo in Bukit Batok, which is about 10 years old. He said: 'In this case, I'm sure the property value will go up in the future. 'This is good because it'll affect the younger generation like my children who could benefit from a lease top-up to the estate.' Copyright © 2004 Singapore Press Holdings Ltd. All rights reserved.