IT HAS remained silent — and passive — in the protracted saga over the proposed sale of Gillman Heights (picture) to developer CapitaLand for $528 million.
But now, the National University of Singapore (NUS) finds fingers pointing at it after the Strata Titles Board (STB) approved the deal on Friday.
The biggest faction opposed to the deal, comprising 53 of the 76 minority owners, told Today they would appeal against the STB’s decision, and chief among their grouses is the NUS’ role in the en bloc process.
The university owns almost half of the estate’s 608 units, which it rents out to its academic staff.
Said one minority owner: “We are very unhappy and very disappointed with the result. NUS was pressurised by the majority owners to agree to the en bloc sale.”
In its grounds of decision, the STB said that it was “very mindful” that the NUS was the single majority owner.
Throughout the sale, the NUS stuck to its original position that it would not take part in the proceedings other than agreeing to abide by the majority decision of the remaining owners, the STB noted. It also ruled that the majority owners had “acted properly” in dealing with the NUS.
However, even after the ruling, some of the minority owners insisted that the NUS should not have followed the decision to sell, based on a simple majority. Instead, it should only do so when at least 80 per cent of the remaining owners agreed to the sale, they argued.
Today understands that the NUS signed the Collective Sale Agreement in June last year, after some 70 per cent of the remaining owners did so.
The university could not be reached for comment at press time.
But Lee & Lee senior partner Quek Mong Hua, who represented the majority owners, said: “There’s no reason why NUS should not support the en bloc sale when a big majority of the other owners want the deal.”
The STB also had strong words for one of the valuation reports — prepared by a former chief valuer for Overseas Union Bank, Mr Yick Keng Hang — put up by the minority owners. The report revised the value of Gillman Heights from $580 million to $660 million within seven months.
The board, which rejected Mr Yick’s evidence, said in its ruling: “Yick had shown himself to be given to hyperbole. A review of his evidence would show that he was shifty and self-serving whenever it suited him.”
Launched in February last year, the en bloc sale process — which eventually garnered 86.7-per-cent consent — has been dogged by several controversies, including a dispute over the level of consent needed for the sale to go through.
Barring any appeal, the sale committee has three months to complete the deal.
Sale committee chairman Robert Wiener was “relieved” at the decision.
But he added: “Obviously, we would be happier if we could get our money earlier, what with property prices going through the roof.”
Source : Today Weekend - 22 Dec 2007
Sunday, December 23, 2007
Retail rents are expected to rise
As far as retail space is concerned, the weakening market sentiment now grabbing the headlines might well belong to another planet. Retail rents are expected to rise next year - especially in prime areas such as Orchard Road - fuelled by strong demand and limited prime space.
Jones Lang LaSalle (JLL) expects rents to rise between 4.5 and 4.8 per cent in the Orchard area, while CB Richard Ellis (CBRE) is forecasting an increase of 4-8 per cent. And rents at suburban malls could go up 2-5 per cent in 2008, says CBRE.
In Q3 2007, the Orchard area achieved about $40 to $41 per square foot (psf) per month, according to JLL. And for the same quarter, retail rents increased 3.3-3.5 per cent year on year.
With occupancy rates around 95-98 per cent in Orchard Road malls, demand is clearly alive and well.
But Pua Seck Guan, CEO of CapitaLand Retail, CapitaMall Trust Management and CapitaLand Financial, is quick to point out that any increase in rent has to be relative to increases in retailers’ takings, so as to ensure sustainable growth.
‘Sales this year, over last year, are 5-7 per cent higher due to the economy and sales productivity,’ he says. ‘Customer traffic has seen a 27 per cent increase over the past four to five years. This outweighs the rent increases.’
According to him, rent renewal rates this year are 12 per cent higher than the expired rent, which he deems reasonable owing to GDP growth and rising inflation. ‘Moving forward, we expect to see an 8-12 per cent increase over the next two to three years,’ he told BT. The leases are generally three years for specialty stores.
While the injection of new retail space next year will help pace retail rents, take-up is expected to increase with the new supply. CBRE puts new supply for 2008 at 2.57 million sq ft, thanks to upcoming shopping malls such as ION Orchard, Orchard Central and West Coast Plaza.
Consumer spending has been on the rise. According to Citibank economist, Zheng Kit Wei, private consumption rose 4.5 per cent in the first three quarters of this year, which is substantially higher than the 2.5 per cent increase last year. Retail sales are expected to remain robust in the high single digits.
‘The unemployment rate has fallen to a 10-year low of 1.7 per cent,’ says Mr Zheng. ‘Wages have risen almost 7 per cent in the first three quarters of the year, nearly double the 3.2 per cent increase last year. This has put more cash into consumers’ pockets and given them greater confidence to spend more.’
Mavis Seow, executive director of retail services for CBRE, says retail sales to date this year total $23.8 billion on the back of the hot property market, optimistic economic outlook and steady stream of tourist arrivals.
And with the launch of the Singapore Flyer and the inaugural Formula One night race next year, as well as the upcoming integrated resorts, sales are expected to keep going strong, if not improve, says Chua Yang Liang, head of research (South East Asia) for JLL.
Retailers, too, are expecting cash registers to ring into the New Year, thanks to the festive season and fat bonuses. Tan Yew Kiat, general manager of homegrown fashion label bYSI, is forecasting a sales increase about 25-30 per cent this Christmas.
bYSI, for one, plans to capitalise on the additional supply of space by launching a flagship store when Orchard Turn opens in October next year.
As for shoppers, they can look forward to new concept stores, flagship stores and new entrants to the market. This year has seen a lot of demand from retailers in terms of new brands compared with last year, says CapitaLand’s Mr Pua, who cites examples such as Cortefiel as well as new stand-alone stores like Kate Spade and Agnes B.
‘Fashion is on its way up, although I think there’s still strong growth for jewellery and watches and even healthcare and beauty products,’ he reckons. ‘This year has been particularly encouraging across the board.’
Source : Business Times - 22 Dec 2007
Jones Lang LaSalle (JLL) expects rents to rise between 4.5 and 4.8 per cent in the Orchard area, while CB Richard Ellis (CBRE) is forecasting an increase of 4-8 per cent. And rents at suburban malls could go up 2-5 per cent in 2008, says CBRE.
In Q3 2007, the Orchard area achieved about $40 to $41 per square foot (psf) per month, according to JLL. And for the same quarter, retail rents increased 3.3-3.5 per cent year on year.
With occupancy rates around 95-98 per cent in Orchard Road malls, demand is clearly alive and well.
But Pua Seck Guan, CEO of CapitaLand Retail, CapitaMall Trust Management and CapitaLand Financial, is quick to point out that any increase in rent has to be relative to increases in retailers’ takings, so as to ensure sustainable growth.
‘Sales this year, over last year, are 5-7 per cent higher due to the economy and sales productivity,’ he says. ‘Customer traffic has seen a 27 per cent increase over the past four to five years. This outweighs the rent increases.’
According to him, rent renewal rates this year are 12 per cent higher than the expired rent, which he deems reasonable owing to GDP growth and rising inflation. ‘Moving forward, we expect to see an 8-12 per cent increase over the next two to three years,’ he told BT. The leases are generally three years for specialty stores.
While the injection of new retail space next year will help pace retail rents, take-up is expected to increase with the new supply. CBRE puts new supply for 2008 at 2.57 million sq ft, thanks to upcoming shopping malls such as ION Orchard, Orchard Central and West Coast Plaza.
Consumer spending has been on the rise. According to Citibank economist, Zheng Kit Wei, private consumption rose 4.5 per cent in the first three quarters of this year, which is substantially higher than the 2.5 per cent increase last year. Retail sales are expected to remain robust in the high single digits.
‘The unemployment rate has fallen to a 10-year low of 1.7 per cent,’ says Mr Zheng. ‘Wages have risen almost 7 per cent in the first three quarters of the year, nearly double the 3.2 per cent increase last year. This has put more cash into consumers’ pockets and given them greater confidence to spend more.’
Mavis Seow, executive director of retail services for CBRE, says retail sales to date this year total $23.8 billion on the back of the hot property market, optimistic economic outlook and steady stream of tourist arrivals.
And with the launch of the Singapore Flyer and the inaugural Formula One night race next year, as well as the upcoming integrated resorts, sales are expected to keep going strong, if not improve, says Chua Yang Liang, head of research (South East Asia) for JLL.
Retailers, too, are expecting cash registers to ring into the New Year, thanks to the festive season and fat bonuses. Tan Yew Kiat, general manager of homegrown fashion label bYSI, is forecasting a sales increase about 25-30 per cent this Christmas.
bYSI, for one, plans to capitalise on the additional supply of space by launching a flagship store when Orchard Turn opens in October next year.
As for shoppers, they can look forward to new concept stores, flagship stores and new entrants to the market. This year has seen a lot of demand from retailers in terms of new brands compared with last year, says CapitaLand’s Mr Pua, who cites examples such as Cortefiel as well as new stand-alone stores like Kate Spade and Agnes B.
‘Fashion is on its way up, although I think there’s still strong growth for jewellery and watches and even healthcare and beauty products,’ he reckons. ‘This year has been particularly encouraging across the board.’
Source : Business Times - 22 Dec 2007
United States economy is unlikely to slip into recession
The United States economy is unlikely to slip into recession, Abby Joseph Cohen, chief investment strategist at Goldman Sachs, said in remarks published yesterday.
‘That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession,’ Ms Cohen told Germany’s Sueddeutsche Zeitung newspaper.
‘The Federal Reserve has shown in recent weeks that it is paying attention and that it wants to boost people’s confidence,’ she added.
While there was weakness in US housing construction and some areas of private consumption, this would be offset by export growth and corporate investment, she said. Goldman expected US economic growth of 1.8 per cent next year, weaker than other institutions are predicting, she said, adding that the bank nonetheless viewed shares as undervalued.
Some finance companies would report terrible earnings figures for the fourth quarter but Goldman still expected single digit profit growth for next year overall.
The ‘fair value’ for the Standard & Poors 500 Index of top US companies for the end of 2008 was 1,675 points, up from around 1,460 now, Ms Cohen said.
The Dow Jones industrial average would be around 14,750 at the end of next year, compared with just over 13,000 now, she estimated.
Ms Cohen told the paper that the trend in US inflation would remain moderate. Central banks did not have to worry about wage increases and could concentrate on the current problems on financial markets.
‘It’s true that over the past week there was some confusion among investors over the Fed’s communication but you have to look to the longer term,’ she said.
‘The decisive factor is that central banks have acted in close cooperation and that is an enormously important signal to the markets as to the availability of liquidity. I am increasingly optimistic: when we are into 2008 everyone will see that the central banks did the right thing.’ - Reuters
Source : Business Times - 22 Dec 2007
‘That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession,’ Ms Cohen told Germany’s Sueddeutsche Zeitung newspaper.
‘The Federal Reserve has shown in recent weeks that it is paying attention and that it wants to boost people’s confidence,’ she added.
While there was weakness in US housing construction and some areas of private consumption, this would be offset by export growth and corporate investment, she said. Goldman expected US economic growth of 1.8 per cent next year, weaker than other institutions are predicting, she said, adding that the bank nonetheless viewed shares as undervalued.
Some finance companies would report terrible earnings figures for the fourth quarter but Goldman still expected single digit profit growth for next year overall.
The ‘fair value’ for the Standard & Poors 500 Index of top US companies for the end of 2008 was 1,675 points, up from around 1,460 now, Ms Cohen said.
The Dow Jones industrial average would be around 14,750 at the end of next year, compared with just over 13,000 now, she estimated.
Ms Cohen told the paper that the trend in US inflation would remain moderate. Central banks did not have to worry about wage increases and could concentrate on the current problems on financial markets.
‘It’s true that over the past week there was some confusion among investors over the Fed’s communication but you have to look to the longer term,’ she said.
‘The decisive factor is that central banks have acted in close cooperation and that is an enormously important signal to the markets as to the availability of liquidity. I am increasingly optimistic: when we are into 2008 everyone will see that the central banks did the right thing.’ - Reuters
Source : Business Times - 22 Dec 2007
SOARING office rents
SOARING office rents have forced the Shenton Medical Group clinic out of its Republic Plaza location to a cheaper space at an older building nearby - The Arcade.
The company had been paying $5 plus per sq ft (psf) since 2002-2003 but was stunned with a demand for about $18 psf in the middle of the year, when lease renewal talks started.
Dr Lee Hong Huei, deputy president, Singapore operations division of ParkwayHealth, said the massive rise was a major factor in the firm’s decision to move.
‘We felt that it was a bit difficult to pass on the costs to our clients,’ he said.
It is becoming a familiar story around town with companies caught between a space crunch and relentless rent rises.
Parkway’s new clinic will open in January and take up a similar amount of space on part of The Arcade’s 18th floor and all of the 19th floor.
While The Arcade is in the prime Raffles Place area, it is not a new or top-grade building. Republic Plaza, on the other hand, is among the most coveted addresses in the area.
Asking rents at the City Developments-owned building have climbed to a whopping $19.80 psf amid the supply squeeze.
Monthly asking rents for prime office spaces in the Central Business District now average $16.30 psf, according to property consultancy Cushman & Wakefield.
This is up 4.5 per cent from last month and an eye-watering 285 per cent increase from the market bottom about three years ago.
Even in the shopping belt of Orchard and Scotts Roads, prime office rents have risen to $13.61 psf, up 8 per cent from last month and nearly 102 per cent from a year ago, said Cushman & Wakefield.
‘Almost all our facilities have experienced rents rising at 30 to 40 per cent on average, except for the 300 per cent jump at Republic Plaza,’ said Shenton’s Dr Lee.
‘Medicine costs have also gone up, so our margins are very thin.’
The increase in prime office rents this year has been rapid.
Last month, net rents for the top 25 grade A office buildings were at a record $16.02 psf a month on average from $15.54 in October.
To manage the supply squeeze, the Government has released transitional office sites for short-term lease and more office sites for sale.
But a new building on a sale site may not come in time to meet current demand.
The buildings on sites sold recently in Tanjong Pagar and Marina View are expected to come on stream only around late 2010 to 2011, said Cushman & Wakefield managing director Donald Han.
There are also concerns of an oversupply from 2010, when a large amount of space in the Marina Bay Financial Centre becomes available.
Nevertheless, space remains tight for now.
Next year, just about 1.35 million sq ft of space will come on stream, with less than half a million sq ft in prime areas such as VisionCrest in the Oxley area near Orchard Road, said Mr Han, but historical office demand is at two million sq ft a year.
‘The upswing in rents will continue next year, but the pace of acceleration will slow as we are already moving to a high base,’ he said.
There is also increasing resistance, as companies move to cheaper space in alternative or suburban locations.
Mr Han forecasts a rise of 20 per cent to 25 per cent in office rents for next year.
Source : Straits Times - 22 Dec 2007
The company had been paying $5 plus per sq ft (psf) since 2002-2003 but was stunned with a demand for about $18 psf in the middle of the year, when lease renewal talks started.
Dr Lee Hong Huei, deputy president, Singapore operations division of ParkwayHealth, said the massive rise was a major factor in the firm’s decision to move.
‘We felt that it was a bit difficult to pass on the costs to our clients,’ he said.
It is becoming a familiar story around town with companies caught between a space crunch and relentless rent rises.
Parkway’s new clinic will open in January and take up a similar amount of space on part of The Arcade’s 18th floor and all of the 19th floor.
While The Arcade is in the prime Raffles Place area, it is not a new or top-grade building. Republic Plaza, on the other hand, is among the most coveted addresses in the area.
Asking rents at the City Developments-owned building have climbed to a whopping $19.80 psf amid the supply squeeze.
Monthly asking rents for prime office spaces in the Central Business District now average $16.30 psf, according to property consultancy Cushman & Wakefield.
This is up 4.5 per cent from last month and an eye-watering 285 per cent increase from the market bottom about three years ago.
Even in the shopping belt of Orchard and Scotts Roads, prime office rents have risen to $13.61 psf, up 8 per cent from last month and nearly 102 per cent from a year ago, said Cushman & Wakefield.
‘Almost all our facilities have experienced rents rising at 30 to 40 per cent on average, except for the 300 per cent jump at Republic Plaza,’ said Shenton’s Dr Lee.
‘Medicine costs have also gone up, so our margins are very thin.’
The increase in prime office rents this year has been rapid.
Last month, net rents for the top 25 grade A office buildings were at a record $16.02 psf a month on average from $15.54 in October.
To manage the supply squeeze, the Government has released transitional office sites for short-term lease and more office sites for sale.
But a new building on a sale site may not come in time to meet current demand.
The buildings on sites sold recently in Tanjong Pagar and Marina View are expected to come on stream only around late 2010 to 2011, said Cushman & Wakefield managing director Donald Han.
There are also concerns of an oversupply from 2010, when a large amount of space in the Marina Bay Financial Centre becomes available.
Nevertheless, space remains tight for now.
Next year, just about 1.35 million sq ft of space will come on stream, with less than half a million sq ft in prime areas such as VisionCrest in the Oxley area near Orchard Road, said Mr Han, but historical office demand is at two million sq ft a year.
‘The upswing in rents will continue next year, but the pace of acceleration will slow as we are already moving to a high base,’ he said.
There is also increasing resistance, as companies move to cheaper space in alternative or suburban locations.
Mr Han forecasts a rise of 20 per cent to 25 per cent in office rents for next year.
Source : Straits Times - 22 Dec 2007
Gillman Heights
CAPITALAND and Hotel Properties Ltd (HPL) separately said yesterday that the Strata Titles Board (STB) had given the green light for the en bloc sale of Gillman Heights Condominium. Both cited notification by the vendors’ solicitors that approval was given yesterday.
Gillman Heights was sold in February for $548 million, or $19 million above the property’s reserve price, to a joint venture formed by CapitaLand, HPL subsidiary HPL Orchard Place Pte Ltd, and two private funds.
Gillman Heights, on Alexandra Road, covers an area of 836,432 square feet and is a 99-year leasehold site. It has a 2.1 plot ratio.
CapitaLand plans to turn the site into a distinctive residential landmark, with about 1,200 homes.
Earlier this month, the much publicised Horizon Towers’ en bloc sale was finally approved by STB, after several stops and starts along the way. The delay stemmed from various owners being dissatisfied with the $500 million sale price as the property market began to flourish and property prices started to appreciate steeply, shortly after the sale.
The buyers for the property are HPL and partners Morgan Stanley Real Estate and Qatar Investment Authority.
Another major en bloc sale that was approved this month was that of Farrer Court. In June, a consortium - comprising CapitaLand, HPL and US-based Wachovia Development Corporation - purchased Farrer Court for the massive sum of around $1.34 billion, the biggest amount ever garnered for a collective sale.
The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 square feet and 1,453 square feet. A 36-storey condominium with about 1,500 apartments will be built and it is expected to be launched in the first half of 2009.
Source : Business Times - 22 Dec 2007
Gillman Heights was sold in February for $548 million, or $19 million above the property’s reserve price, to a joint venture formed by CapitaLand, HPL subsidiary HPL Orchard Place Pte Ltd, and two private funds.
Gillman Heights, on Alexandra Road, covers an area of 836,432 square feet and is a 99-year leasehold site. It has a 2.1 plot ratio.
CapitaLand plans to turn the site into a distinctive residential landmark, with about 1,200 homes.
Earlier this month, the much publicised Horizon Towers’ en bloc sale was finally approved by STB, after several stops and starts along the way. The delay stemmed from various owners being dissatisfied with the $500 million sale price as the property market began to flourish and property prices started to appreciate steeply, shortly after the sale.
The buyers for the property are HPL and partners Morgan Stanley Real Estate and Qatar Investment Authority.
Another major en bloc sale that was approved this month was that of Farrer Court. In June, a consortium - comprising CapitaLand, HPL and US-based Wachovia Development Corporation - purchased Farrer Court for the massive sum of around $1.34 billion, the biggest amount ever garnered for a collective sale.
The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 square feet and 1,453 square feet. A 36-storey condominium with about 1,500 apartments will be built and it is expected to be launched in the first half of 2009.
Source : Business Times - 22 Dec 2007
CAPITALAND shares have endured a turbulent journey
CAPITALAND shares have endured a turbulent journey of late, and this week was no different.
The property stock plunged from $7.05 on Tuesday last week to as low as $5.85 during intra-day trade this week amid heavy volume.
Unlike in the previous week, when the daily volume never exceeded 17 million units, the daily volume remained above 21 million this week.
The stock closed five cents up at $6.15 yesterday - down 45 cents for the week.
Real estate investment trusts, or Reits, associated with CapitaLand also went south this week.
CapitaMall Trust fell to as low as $3.10 on Tuesday before it rebounded to end flat for the week at $3.30, while CapitaCommercial Trust dropped seven cents to $2.36.
Shares of CapitaLand were worst-hit on Monday, when they fell 50 cents to $6.10 - their lowest close so far this year.
Strong selling pressure triggered by an 11 per cent fall in Australia’s property trust index caused that day’s plunge.
That came amid news that Centro Properties, an Australian property trust that owns 700 United States shopping malls, had problems refinancing its debts.
Centro shares plunged 76 per cent on Monday after the firm said it was struggling to refinance $1A.3 billion ($1S.9 billion) worth of maturing debts because of the collapse in the US sub-prime housing market.
There are, however, signs that the worst might be over for CapitaLand.
An AmFraser Securities report on Tuesday said: ‘These two days could well mark the selling climax for CapitaLand, which lost 17 per cent in the past week, falling from $7.05 to a new 2007 low of $5.85 today.’
That seems true, with the shares staying above $6 since Tuesday.
In a show of confidence, UBS maintained its ‘buy’ call, while keeping its target price of $10.60 that same day.
A UBS report says CapitaLand still enjoys strong access to capital. It also doubts whether the property firm will face the same debt problems as Centro since ‘it has not overextended itself’.
But OCBC Investment Research kept its ‘hold’ rating, while slashing its price forecast from $7.83 to $6.94.
It noted: ‘As for its recent results, though headline numbers were strong, this was due mainly to one-off items.
‘Excluding these one-off items, we estimate that its profit after tax and minority interests would have been more modest at about $34 million.’
Source : Straits Times - 22 Dec 2007
The property stock plunged from $7.05 on Tuesday last week to as low as $5.85 during intra-day trade this week amid heavy volume.
Unlike in the previous week, when the daily volume never exceeded 17 million units, the daily volume remained above 21 million this week.
The stock closed five cents up at $6.15 yesterday - down 45 cents for the week.
Real estate investment trusts, or Reits, associated with CapitaLand also went south this week.
CapitaMall Trust fell to as low as $3.10 on Tuesday before it rebounded to end flat for the week at $3.30, while CapitaCommercial Trust dropped seven cents to $2.36.
Shares of CapitaLand were worst-hit on Monday, when they fell 50 cents to $6.10 - their lowest close so far this year.
Strong selling pressure triggered by an 11 per cent fall in Australia’s property trust index caused that day’s plunge.
That came amid news that Centro Properties, an Australian property trust that owns 700 United States shopping malls, had problems refinancing its debts.
Centro shares plunged 76 per cent on Monday after the firm said it was struggling to refinance $1A.3 billion ($1S.9 billion) worth of maturing debts because of the collapse in the US sub-prime housing market.
There are, however, signs that the worst might be over for CapitaLand.
An AmFraser Securities report on Tuesday said: ‘These two days could well mark the selling climax for CapitaLand, which lost 17 per cent in the past week, falling from $7.05 to a new 2007 low of $5.85 today.’
That seems true, with the shares staying above $6 since Tuesday.
In a show of confidence, UBS maintained its ‘buy’ call, while keeping its target price of $10.60 that same day.
A UBS report says CapitaLand still enjoys strong access to capital. It also doubts whether the property firm will face the same debt problems as Centro since ‘it has not overextended itself’.
But OCBC Investment Research kept its ‘hold’ rating, while slashing its price forecast from $7.83 to $6.94.
It noted: ‘As for its recent results, though headline numbers were strong, this was due mainly to one-off items.
‘Excluding these one-off items, we estimate that its profit after tax and minority interests would have been more modest at about $34 million.’
Source : Straits Times - 22 Dec 2007
Don’t just leave it to your lawyers and agents. Let’s go through six legal aspects of buying property.
Don’t just leave it to your lawyers and agents. Let’s go through six legal aspects of buying property. Tan Hui Yee
Figuring out your options
THE option to purchase is the right to buy a property at a specified price within a specified period of time.
To secure this, the buyer must pay an option or booking fee to the property’s developer. This usually amounts to 5 to 10 per cent of the purchase price for private homes.If a buyer is granted an option to purchase, the developer has to deliver to the buyer or his lawyer the sale and purchase agreement and title deed within 14 days. The option is valid for three weeks from the date of delivery of these documents.
To exercise the option, the buyer must sign the sale and purchase agreement, and pay the balance of the down payment.
The usual down payment for private homes - comprising the option fee and option exercise fee - is 20 per cent of the purchase price.
If the buyer does not exercise his option, he loses 25 per cent of his option fee.
The developer can sell the property to another party after he refunds to the first buyer 75 per cent of the option fee.
Those buying resale Housing Board flats will use a standard option to purchase form issued by the HDB.
The buyer in this case gets 14 days to consider his purchase after paying the seller a non-refundable option fee of up to $1,000.
This fee is forfeited if the buyer decides not to go ahead with the purchase.
If he does decide to go ahead with the purchase, he signs the same form and pays another fee to the seller to exercise the option. This option exercise fee, together with the option fee, cannot exceed $5,000.
If the buyer abandons the purchase after exercising his option, the owner of the flat can claim damages against him.
Lawyers’ role
LAWYERS play a key role in the homebuying process, and they come into the picture once the buyer decides on a property.
A conveyancing lawyer is responsible for doing all the relevant searches on the title deed to a property, to ensure that the seller does not owe any debt to the Government.
Such debts could range from unpaid property tax to money that is owed to the Government over road improvement works nearby, said the head of conveyancing at Lawhub, Ms Winnie Tan.
The lawyer also needs to check to see if there is a road reserve on the property, which would allow part of the property to be acquired by the Government in the future for roads to be built.
This is important as it may affect the value of the property, which may in turn reduce the loan amount you can get to finance it.
If a buyer is taking out a bank loan, the lawyer has to ensure that the relevant documents are ready.
Usually, said Ms Tan, a lawyer is hired after the buyer puts down an option fee or booking fee for the property.
She suggests that buyers could look for a lawyer even before that stage, if they want to avoid forfeiting the option fee should the property turn out to have problems and they have to let the option lapse.
The lawyer’s role ends when the title deed is handed over to the buyer.
For uncompleted properties, this could take up to three years. Resale transactions, however, are usually completed within three or four months.
Ms Tan estimates that the legal fees for a typical home costing not more than $1 million, and paid for with Central Provident Fund savings and bank loans, will range from $2,500 to $3,000.
This does not include the $800 to $1,000 usually charged for searches on the property and other associated costs.
Fees and taxes
THERE are various charges you need to take note of when buying property: property tax, stamp duty and agents’ commissions.
Commission structures are not fixed under the law, though there are market norms for the different segments such as private homes and resale Housing Board flats.
Buyers of private homes typically do not pay anything to agents, as the agents collect a 2 per cent commission from the sellers.
Buyers of resale HDB flats, however, are charged a 1 per cent commission if they hire the agent. Most sellers’ agents also charge buyers a 1 per cent fee if they are not represented by a broker.
This practice has been called into question by the Consumers Association of Singapore because of a possible conflict of interests.
Many agents for sellers, however, refuse to show a flat to independent buyers unless a fee is promised. They argue that an independent buyer would have a higher chance of tripping up in a transaction if he did not have the help of a broker.
Buyers also need to take note of the stamp duty. This is a tax on commercial and legal documents that record and give effect to certain transactions. The duty is payable even if the transaction is aborted.
The stamp duty for the purchase of property is calculated at 1 per cent of the first $180,000 of the purchase price or market value of the unit, whichever is higher.
The rate goes up to 2 per cent for the next $180,000, and 3 per cent for the remainder if the value exceeds $360,000.
Finally, the buyer has to remember the property tax payable for his new home. This is calculated based on the annual value of his home, which is the estimated annual rent it can fetch if it is let out.
This amount, which excludes the rent for furniture and fittings, is determined by analysing rents for comparable buildings and other data, so it changes with market trends.
The property tax on owner-occupied homes is charged at 4 per cent of the annual value. This concession is applicable to only one property at any one time.
If the property is not owner-occupied, the tax rate is 10 per cent of the property’s annual value.
This year’s Budget included a one-off property tax rebate of up to$100 per year for 2008 as well as 2009. The rebates apply to owner-occupied residential properties.
If you are not Singaporean…
FOREIGNERS can buy condominiums and private apartments in buildings that have six or more storeys, but face restrictions in buying landed homes.
To buy landed property, they need to submit an application to the Government.
They will get the go-ahead only if they are deemed to have made a significant economic contribution to Singapore.
Those buying plots of land in Sentosa Cove, however, were recently allowed to submit a shorter application form and granted fast-track approval.
For public housing, only foreigners who are permanent residents (PRs) may apply for a new flat directly from the Housing Board (HDB) but they have to do this with their Singaporean spouse, child or parent.
PRs are free to buy resale HDB flats on the open market.
Those who choose to buy an HDB flat need to be aware of the Board’s ethnic integration policy. This limits the proportion of each ethnic group represented within a block and precinct, to encourage various groups to interact with each other on a daily basis.
If the limit has been reached for a particular area, the owner can sell his flat only to someone of the same ethnic group as him.
Meanwhile, executive condominiums are available to foreigners after 10 years.
These developments usually have the same facilities as condominiums, such as swimming pools and gymnasiums. PRs may buy a new executive condominium with their Singaporean spouse, child or parent.
Insuring your home adequately
BUYING a home is a major purchase for many people.
To make sure that things don’t go wrong after your major purchase, you may want to insure your home.
Apart from the standard fire policy that covers losses caused by fire, lightning and explosion, you can also take a home insurance policy that covers destruction to a building, home contents and any renovations carried out.
If your property is mortgaged, the mortgagee will require you to have a fire insurance policy on the outstanding loan amount.
When taking out home insurance, make sure that the sum insured is adequate.
The sum should reflect the total cost of rebuilding or reinstating your insured property to its original state, plus professional fees and the cost for removal of debris, says the General Insurance Association of Singapore.
Market value is normally not used as the sum insured.
To estimate replacement cost, you need to know your property’s gross floor area.
As a rough guide, the replacement cost of a medium-quality condominium could fall between $137 per sq ft (psf) and $182 psf, while that for landed cluster housing could range between $152 psf and $182 psf.
You should note that the total claim amount is limited to the total cost of the property or reinstatement.
Valuation matters
A PROPERTY’S valuation determines how much a buyer can borrow to pay for it.
Banks can grant a loan of up to 90 per cent of a home’s purchase price, or valuation, whichever is lower.
This means that if the price of a property exceeds its valuation, the buyer has to come up with cash to cover the shortfall.
A buyer can get an indicative valuation for a property before committing to the purchase. This does not involve a detailed inspection.
The bank’s offer is subject to the formal valuation confirming the indicative valuation. This figure is usually derived from the bank’s own panel of private valuers.
When valuing a property, these professionals consider the current value of comparable projects in the area. Other factors taken into account include the property’s location, size, layout, age and condition, as well as its orientation.
Valuers usually take about two to three weeks to complete the assessment.
Mr Eugene Tham, a director of property consultancy Chesterton International, estimates it would cost about $400 to $500 to value a home worth about $1 million.
For resale Housing Board flats, buyers need only to submit a request for a valuation report, which would cost about $200 for three-room or larger flats. The HDB will then randomly assign a private valuer to assess the property.
About two years ago, it was common for buyers and sellers to inflate the price of the flat so the buyer could get a bigger housing loan than he would otherwise be allowed. Such illegal “cashback” arrangements were supported by inflated valuations from the colluding valuers.
The Government, however, clamped down on this practice in 2005, by requiring flat purchases involving withdrawal of Central Provident Fund savings to be supported by valuations carried out through the HDB system.
Such cashback arrangements largely fizzled out after the curbs. Those caught can be fined $5,000 and jailed for six months for giving false information to the HDB.
Source : Sunday Times - 18 Nov 2007
Figuring out your options
THE option to purchase is the right to buy a property at a specified price within a specified period of time.
To secure this, the buyer must pay an option or booking fee to the property’s developer. This usually amounts to 5 to 10 per cent of the purchase price for private homes.If a buyer is granted an option to purchase, the developer has to deliver to the buyer or his lawyer the sale and purchase agreement and title deed within 14 days. The option is valid for three weeks from the date of delivery of these documents.
To exercise the option, the buyer must sign the sale and purchase agreement, and pay the balance of the down payment.
The usual down payment for private homes - comprising the option fee and option exercise fee - is 20 per cent of the purchase price.
If the buyer does not exercise his option, he loses 25 per cent of his option fee.
The developer can sell the property to another party after he refunds to the first buyer 75 per cent of the option fee.
Those buying resale Housing Board flats will use a standard option to purchase form issued by the HDB.
The buyer in this case gets 14 days to consider his purchase after paying the seller a non-refundable option fee of up to $1,000.
This fee is forfeited if the buyer decides not to go ahead with the purchase.
If he does decide to go ahead with the purchase, he signs the same form and pays another fee to the seller to exercise the option. This option exercise fee, together with the option fee, cannot exceed $5,000.
If the buyer abandons the purchase after exercising his option, the owner of the flat can claim damages against him.
Lawyers’ role
LAWYERS play a key role in the homebuying process, and they come into the picture once the buyer decides on a property.
A conveyancing lawyer is responsible for doing all the relevant searches on the title deed to a property, to ensure that the seller does not owe any debt to the Government.
Such debts could range from unpaid property tax to money that is owed to the Government over road improvement works nearby, said the head of conveyancing at Lawhub, Ms Winnie Tan.
The lawyer also needs to check to see if there is a road reserve on the property, which would allow part of the property to be acquired by the Government in the future for roads to be built.
This is important as it may affect the value of the property, which may in turn reduce the loan amount you can get to finance it.
If a buyer is taking out a bank loan, the lawyer has to ensure that the relevant documents are ready.
Usually, said Ms Tan, a lawyer is hired after the buyer puts down an option fee or booking fee for the property.
She suggests that buyers could look for a lawyer even before that stage, if they want to avoid forfeiting the option fee should the property turn out to have problems and they have to let the option lapse.
The lawyer’s role ends when the title deed is handed over to the buyer.
For uncompleted properties, this could take up to three years. Resale transactions, however, are usually completed within three or four months.
Ms Tan estimates that the legal fees for a typical home costing not more than $1 million, and paid for with Central Provident Fund savings and bank loans, will range from $2,500 to $3,000.
This does not include the $800 to $1,000 usually charged for searches on the property and other associated costs.
Fees and taxes
THERE are various charges you need to take note of when buying property: property tax, stamp duty and agents’ commissions.
Commission structures are not fixed under the law, though there are market norms for the different segments such as private homes and resale Housing Board flats.
Buyers of private homes typically do not pay anything to agents, as the agents collect a 2 per cent commission from the sellers.
Buyers of resale HDB flats, however, are charged a 1 per cent commission if they hire the agent. Most sellers’ agents also charge buyers a 1 per cent fee if they are not represented by a broker.
This practice has been called into question by the Consumers Association of Singapore because of a possible conflict of interests.
Many agents for sellers, however, refuse to show a flat to independent buyers unless a fee is promised. They argue that an independent buyer would have a higher chance of tripping up in a transaction if he did not have the help of a broker.
Buyers also need to take note of the stamp duty. This is a tax on commercial and legal documents that record and give effect to certain transactions. The duty is payable even if the transaction is aborted.
The stamp duty for the purchase of property is calculated at 1 per cent of the first $180,000 of the purchase price or market value of the unit, whichever is higher.
The rate goes up to 2 per cent for the next $180,000, and 3 per cent for the remainder if the value exceeds $360,000.
Finally, the buyer has to remember the property tax payable for his new home. This is calculated based on the annual value of his home, which is the estimated annual rent it can fetch if it is let out.
This amount, which excludes the rent for furniture and fittings, is determined by analysing rents for comparable buildings and other data, so it changes with market trends.
The property tax on owner-occupied homes is charged at 4 per cent of the annual value. This concession is applicable to only one property at any one time.
If the property is not owner-occupied, the tax rate is 10 per cent of the property’s annual value.
This year’s Budget included a one-off property tax rebate of up to$100 per year for 2008 as well as 2009. The rebates apply to owner-occupied residential properties.
If you are not Singaporean…
FOREIGNERS can buy condominiums and private apartments in buildings that have six or more storeys, but face restrictions in buying landed homes.
To buy landed property, they need to submit an application to the Government.
They will get the go-ahead only if they are deemed to have made a significant economic contribution to Singapore.
Those buying plots of land in Sentosa Cove, however, were recently allowed to submit a shorter application form and granted fast-track approval.
For public housing, only foreigners who are permanent residents (PRs) may apply for a new flat directly from the Housing Board (HDB) but they have to do this with their Singaporean spouse, child or parent.
PRs are free to buy resale HDB flats on the open market.
Those who choose to buy an HDB flat need to be aware of the Board’s ethnic integration policy. This limits the proportion of each ethnic group represented within a block and precinct, to encourage various groups to interact with each other on a daily basis.
If the limit has been reached for a particular area, the owner can sell his flat only to someone of the same ethnic group as him.
Meanwhile, executive condominiums are available to foreigners after 10 years.
These developments usually have the same facilities as condominiums, such as swimming pools and gymnasiums. PRs may buy a new executive condominium with their Singaporean spouse, child or parent.
Insuring your home adequately
BUYING a home is a major purchase for many people.
To make sure that things don’t go wrong after your major purchase, you may want to insure your home.
Apart from the standard fire policy that covers losses caused by fire, lightning and explosion, you can also take a home insurance policy that covers destruction to a building, home contents and any renovations carried out.
If your property is mortgaged, the mortgagee will require you to have a fire insurance policy on the outstanding loan amount.
When taking out home insurance, make sure that the sum insured is adequate.
The sum should reflect the total cost of rebuilding or reinstating your insured property to its original state, plus professional fees and the cost for removal of debris, says the General Insurance Association of Singapore.
Market value is normally not used as the sum insured.
To estimate replacement cost, you need to know your property’s gross floor area.
As a rough guide, the replacement cost of a medium-quality condominium could fall between $137 per sq ft (psf) and $182 psf, while that for landed cluster housing could range between $152 psf and $182 psf.
You should note that the total claim amount is limited to the total cost of the property or reinstatement.
Valuation matters
A PROPERTY’S valuation determines how much a buyer can borrow to pay for it.
Banks can grant a loan of up to 90 per cent of a home’s purchase price, or valuation, whichever is lower.
This means that if the price of a property exceeds its valuation, the buyer has to come up with cash to cover the shortfall.
A buyer can get an indicative valuation for a property before committing to the purchase. This does not involve a detailed inspection.
The bank’s offer is subject to the formal valuation confirming the indicative valuation. This figure is usually derived from the bank’s own panel of private valuers.
When valuing a property, these professionals consider the current value of comparable projects in the area. Other factors taken into account include the property’s location, size, layout, age and condition, as well as its orientation.
Valuers usually take about two to three weeks to complete the assessment.
Mr Eugene Tham, a director of property consultancy Chesterton International, estimates it would cost about $400 to $500 to value a home worth about $1 million.
For resale Housing Board flats, buyers need only to submit a request for a valuation report, which would cost about $200 for three-room or larger flats. The HDB will then randomly assign a private valuer to assess the property.
About two years ago, it was common for buyers and sellers to inflate the price of the flat so the buyer could get a bigger housing loan than he would otherwise be allowed. Such illegal “cashback” arrangements were supported by inflated valuations from the colluding valuers.
The Government, however, clamped down on this practice in 2005, by requiring flat purchases involving withdrawal of Central Provident Fund savings to be supported by valuations carried out through the HDB system.
Such cashback arrangements largely fizzled out after the curbs. Those caught can be fined $5,000 and jailed for six months for giving false information to the HDB.
Source : Sunday Times - 18 Nov 2007
Wednesday, December 12, 2007
Goldman Sachs is said to be discreetly looking around for a buyer for DBS Building along Shenton Way.
US bank could be tweaking portfolio, sources say; DBS may move to new location.
Goldman Sachs is said to be discreetly looking around for a buyer for DBS Building along Shenton Way. The US bank, which bought the two office towers two years ago, could reap a tidy gain of almost $1 billion should a deal go through.
Market watchers say that it makes sense for Goldman Sachs to reshuffle its office portfolio to more prime locations in Singapore.
Goldman is believed to be seeking a price of at least $2,000 per square foot of net lettable area (NLA), which would work out to about $1.75 billion, compared with the $789 psf or $690 million that it paid for the property in late 2005.
Meanwhile, DBS which sold the property to Goldman and leased back the space it occupied, is expected to relocate to Marina Bay Financial Centre (Phase 2), as reported by BT.
DBS occupied the entire 49-storey Tower 1 - which is more than 30 years old - when it sold the property to Goldman in 2005. It also occupied almost 40 per cent of the 34-storey Tower 2, which is just 13 years old. It leased the premises for eight years, with an option for renewal.
The Singapore bank is now said to be eyeing a move to its prestigious new location, expected to be completed in late 2011. This suggests a period of overlap with its existing lease on DBS Building, that runs till late 2013.
Goldman, on the other hand, has been snapping up new office assets of late.
In August this year, it inked a deal to buy Chevron House at Raffles Place from CapitaLand and other parties for $730 million or $2,780 psf of NLA.
The building stands on a site with a remaining lease of about 81 years. Goldman Sachs is also expected to purchase the 37-storey Hitachi Tower next door, in which CapitaLand also has a stake. The price is understood to be around $3,000 psf, or about $840 million in total. Hitachi House has a 999-year leasehold tenure and faces Collyer Quay.
‘It’s good business sense for Goldman to move its Singapore office holdings from the old Shenton Way area to Raffles Place/Collyer Quay, where rental and capital values are likely to appreciate faster.
‘The new financial district at Marina Bay will be connected to the Raffles Place/Collyer Quay vicinity, which will also be rejuvenated with the Ocean Financial Centre development,’ a seasoned industry market watcher said.
Some office market watchers estimate that in the current market, Goldman Sachs may fetch around $1,750 psf to $1,800 psf of NLA for DBS Building - instead of the $2,000 psf minimum price it is seeking - given the property’s age and short balance land tenure.
‘A lot will also depend on what sort of rentals the building can fetch after DBS moves out,’ a property consultant said.
And while the Singapore office market has sizzled this year because of an acute shortage of offices, investors have become a little cautious lately on fears that the US sub-prime contagion could clip the space requirements of big financial institutions here.
‘Perhaps Goldman Sachs stands a higher chance of achieving its target price range it if waits a little longer and hopefully by then, the current sub-prime woes may ease,’ an observer suggests.
Investment in Singapore’s office sector, including land for development into offices, has seen a staggering $14.9 billion worth of deals sealed so far this year. This is about three times the figure for the whole of last year.
The supply crunch has also seen prime office capital values rise from about $2,000 psf at the start of this year to nearly $3,000 psf, as seen in the price that Goldman Sachs is believed to have negotiated for Hitachi Tower.
Source : Business Times - 12 Dec 2007
Goldman Sachs is said to be discreetly looking around for a buyer for DBS Building along Shenton Way. The US bank, which bought the two office towers two years ago, could reap a tidy gain of almost $1 billion should a deal go through.
Market watchers say that it makes sense for Goldman Sachs to reshuffle its office portfolio to more prime locations in Singapore.
Goldman is believed to be seeking a price of at least $2,000 per square foot of net lettable area (NLA), which would work out to about $1.75 billion, compared with the $789 psf or $690 million that it paid for the property in late 2005.
Meanwhile, DBS which sold the property to Goldman and leased back the space it occupied, is expected to relocate to Marina Bay Financial Centre (Phase 2), as reported by BT.
DBS occupied the entire 49-storey Tower 1 - which is more than 30 years old - when it sold the property to Goldman in 2005. It also occupied almost 40 per cent of the 34-storey Tower 2, which is just 13 years old. It leased the premises for eight years, with an option for renewal.
The Singapore bank is now said to be eyeing a move to its prestigious new location, expected to be completed in late 2011. This suggests a period of overlap with its existing lease on DBS Building, that runs till late 2013.
Goldman, on the other hand, has been snapping up new office assets of late.
In August this year, it inked a deal to buy Chevron House at Raffles Place from CapitaLand and other parties for $730 million or $2,780 psf of NLA.
The building stands on a site with a remaining lease of about 81 years. Goldman Sachs is also expected to purchase the 37-storey Hitachi Tower next door, in which CapitaLand also has a stake. The price is understood to be around $3,000 psf, or about $840 million in total. Hitachi House has a 999-year leasehold tenure and faces Collyer Quay.
‘It’s good business sense for Goldman to move its Singapore office holdings from the old Shenton Way area to Raffles Place/Collyer Quay, where rental and capital values are likely to appreciate faster.
‘The new financial district at Marina Bay will be connected to the Raffles Place/Collyer Quay vicinity, which will also be rejuvenated with the Ocean Financial Centre development,’ a seasoned industry market watcher said.
Some office market watchers estimate that in the current market, Goldman Sachs may fetch around $1,750 psf to $1,800 psf of NLA for DBS Building - instead of the $2,000 psf minimum price it is seeking - given the property’s age and short balance land tenure.
‘A lot will also depend on what sort of rentals the building can fetch after DBS moves out,’ a property consultant said.
And while the Singapore office market has sizzled this year because of an acute shortage of offices, investors have become a little cautious lately on fears that the US sub-prime contagion could clip the space requirements of big financial institutions here.
‘Perhaps Goldman Sachs stands a higher chance of achieving its target price range it if waits a little longer and hopefully by then, the current sub-prime woes may ease,’ an observer suggests.
Investment in Singapore’s office sector, including land for development into offices, has seen a staggering $14.9 billion worth of deals sealed so far this year. This is about three times the figure for the whole of last year.
The supply crunch has also seen prime office capital values rise from about $2,000 psf at the start of this year to nearly $3,000 psf, as seen in the price that Goldman Sachs is believed to have negotiated for Hitachi Tower.
Source : Business Times - 12 Dec 2007
HONG KONG movie superstar Jackie Chan’s love affair with Singapore property continues with his latest purchase - the former Jinriksha Station
HONG KONG movie superstar Jackie Chan’s love affair with Singapore property continues with his latest purchase - the former Jinriksha Station at 1 Neil Road.
He fell in love with the historic building - once the central depot for rickshaw drivers in Singapore - and bought it for $11 million.
The three-storey corner building in Tanjong Pagar now houses a music lounge called EZ50 on the ground floor. Its sale price works out to $818 per sq ft (psf).
‘It’s a good price because the individual shophouses there are about $1,000 over psf on average,’ said Mr Simon Kwan, who helped broker the deal about a fortnight back. ‘As long as he purchases it at or below the market price, he will be comfortable,’ he said, of Chan.
Mr Kwan, who is the star’s property agent, also runs EZ50 and The 50s pubs, as well as the recently opened Jackie Chan’s Cafe Coffee and Tea at 1 Nassim Road.
The star purchased 1 Neil Road from a firm owned by Mr S. L. Cheong, which also owns the 1 Nassim Road property leased to Chan.
Mr Cheong, the uncle of SC Global chief Simon Cheong, also sold Chan The 50s entertainment complex on Tanjong Pagar Road for $8.8 million in 1996.
Both the Tanjong Pagar buildings are in the Neil Road conservation area.
‘You can’t find buildings like this anywhere else,’ said Mr Kwan. ‘These are the two most outstanding buildings in Tanjong Pagar.’
The former Jinriksha station was built in 1903.
It is a commercial building with space for rent. The One Family KTV karaoke lounge used to occupy the second and third floors, but it had since closed down, according to Mr Kwan, who is managing the building on behalf of Chan.
Mr Kwan has plans for a piano bar, a foot reflexology business or offices for the 8,500 sq ft of space on the second and third floors.
‘The highest possibility is to have offices,’ he said, explaining that this plan would leave him time to concentrate on running Chan’s new restaurant business in Singapore.
Also, office rents are currently strong, supported by tight supply.
Rents at the nearby Red Dot Traffic Building are at $6 psf a month, while those at International Plaza next to the Tanjong Pagar MRT station are going for $7.50 to $8 psf.
Mr Kwan said they could have seven to eight office units.
A decision will be made after a trip to Hong Kong to meet up with Chan and firm up plans, he said.
Apart from commercial buildings, the movie star also owns a few condominium units in the Orchard Road area, including a three-bedroom unit in The Grangeford condo on Leonie Hill Road.
The 99-year leasehold Grangeford is by now known for the property that sold en bloc for more than half of Horizon Towers’ price on a psf basis.
Chan bought his Grangeford apartment, which is being rented out, for only $1.3 million back in 1996.
He will stand to reap about $3.4 million from the collective sale, which he was originally not keen on joining.
Another Hong Kong superstar, Andy Lau, also used to own an apartment at Grangeford, as well as a unit at the UE Square condo.
Mr Kwan said he had since sold these off for Andy Lau. He also used to manage the Singapore properties of the late Teresa Teng and Anita Mui.
Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said there would be more celebrities entering Singapore’s property market.
‘For one, the Formula One event will bring in a lot of celebrities.’
Source : Straits Times - 12 Dec 2007
He fell in love with the historic building - once the central depot for rickshaw drivers in Singapore - and bought it for $11 million.
The three-storey corner building in Tanjong Pagar now houses a music lounge called EZ50 on the ground floor. Its sale price works out to $818 per sq ft (psf).
‘It’s a good price because the individual shophouses there are about $1,000 over psf on average,’ said Mr Simon Kwan, who helped broker the deal about a fortnight back. ‘As long as he purchases it at or below the market price, he will be comfortable,’ he said, of Chan.
Mr Kwan, who is the star’s property agent, also runs EZ50 and The 50s pubs, as well as the recently opened Jackie Chan’s Cafe Coffee and Tea at 1 Nassim Road.
The star purchased 1 Neil Road from a firm owned by Mr S. L. Cheong, which also owns the 1 Nassim Road property leased to Chan.
Mr Cheong, the uncle of SC Global chief Simon Cheong, also sold Chan The 50s entertainment complex on Tanjong Pagar Road for $8.8 million in 1996.
Both the Tanjong Pagar buildings are in the Neil Road conservation area.
‘You can’t find buildings like this anywhere else,’ said Mr Kwan. ‘These are the two most outstanding buildings in Tanjong Pagar.’
The former Jinriksha station was built in 1903.
It is a commercial building with space for rent. The One Family KTV karaoke lounge used to occupy the second and third floors, but it had since closed down, according to Mr Kwan, who is managing the building on behalf of Chan.
Mr Kwan has plans for a piano bar, a foot reflexology business or offices for the 8,500 sq ft of space on the second and third floors.
‘The highest possibility is to have offices,’ he said, explaining that this plan would leave him time to concentrate on running Chan’s new restaurant business in Singapore.
Also, office rents are currently strong, supported by tight supply.
Rents at the nearby Red Dot Traffic Building are at $6 psf a month, while those at International Plaza next to the Tanjong Pagar MRT station are going for $7.50 to $8 psf.
Mr Kwan said they could have seven to eight office units.
A decision will be made after a trip to Hong Kong to meet up with Chan and firm up plans, he said.
Apart from commercial buildings, the movie star also owns a few condominium units in the Orchard Road area, including a three-bedroom unit in The Grangeford condo on Leonie Hill Road.
The 99-year leasehold Grangeford is by now known for the property that sold en bloc for more than half of Horizon Towers’ price on a psf basis.
Chan bought his Grangeford apartment, which is being rented out, for only $1.3 million back in 1996.
He will stand to reap about $3.4 million from the collective sale, which he was originally not keen on joining.
Another Hong Kong superstar, Andy Lau, also used to own an apartment at Grangeford, as well as a unit at the UE Square condo.
Mr Kwan said he had since sold these off for Andy Lau. He also used to manage the Singapore properties of the late Teresa Teng and Anita Mui.
Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said there would be more celebrities entering Singapore’s property market.
‘For one, the Formula One event will bring in a lot of celebrities.’
Source : Straits Times - 12 Dec 2007
DUBAI World’s real estate arm, Limitless LLC, officially started operations at it new regional office here at UOB Plaza
DUBAI World’s real estate arm, Limitless LLC, officially started operations at it new regional office here at UOB Plaza yesterday. It will use Singapore as a base to look for new investment opportunities here and in the region.
On route to Hanoi for the ground-breaking ceremony of its US$220 million Halong Star mixed development project in Vietnam, Limitless CEO Saeed Ahmed Saeed said yesterday: ‘Without doubt, South-east Asia is one of the most exciting and dynamic regions for Limitless. Its fast-growing economy presents us with endless opportunities to demonstrate our core skills of master planning large-scale, balanced projects and waterfront development.’
To date, Limitless, which was established in July 2005, has a portfolio of five real estate projects worth about US$100 billion. Three are in the Middle East, with the others in India and Vietnam.
Limitless has considered development sites in Singapore, including the first parcel at Marina View, although it decided not to put in a bid eventually.
‘We took strategic position on Marina View and decided it was not the right time to tender for it,’ said Philip Atkinson, regional director (South-east Asia) at Limitless.
Mr Atkinson added: ‘The Singapore market now is buoyant and fast paced, and we would take a cautionary view.’
Dubai World, through its subsidiary Istithmar, has however, recently acquired a one-third stake in the government land sales development site now known as South Beach, which is estimated to cost a total of $2.5 billion.
Mr Saeed would not say what its expected target rate of returns would be for its projects but added: ‘Different countries have different hurdle rates.’
Like its parent company, Limitless will mostly fund its investment with equity but Mr Saeed said that it could also raise debt from the capital markets.
Limitless is also likely to be looking at emerging markets around the world as this is where large-scale projects that can leverage on its town-planning skills will be.
Particularly bullish on the two huge markets, Mr Saeed said: ‘India and China will probably need new homes for the next 100 years.’
Source : Business Times - 11 Dec 2007
On route to Hanoi for the ground-breaking ceremony of its US$220 million Halong Star mixed development project in Vietnam, Limitless CEO Saeed Ahmed Saeed said yesterday: ‘Without doubt, South-east Asia is one of the most exciting and dynamic regions for Limitless. Its fast-growing economy presents us with endless opportunities to demonstrate our core skills of master planning large-scale, balanced projects and waterfront development.’
To date, Limitless, which was established in July 2005, has a portfolio of five real estate projects worth about US$100 billion. Three are in the Middle East, with the others in India and Vietnam.
Limitless has considered development sites in Singapore, including the first parcel at Marina View, although it decided not to put in a bid eventually.
‘We took strategic position on Marina View and decided it was not the right time to tender for it,’ said Philip Atkinson, regional director (South-east Asia) at Limitless.
Mr Atkinson added: ‘The Singapore market now is buoyant and fast paced, and we would take a cautionary view.’
Dubai World, through its subsidiary Istithmar, has however, recently acquired a one-third stake in the government land sales development site now known as South Beach, which is estimated to cost a total of $2.5 billion.
Mr Saeed would not say what its expected target rate of returns would be for its projects but added: ‘Different countries have different hurdle rates.’
Like its parent company, Limitless will mostly fund its investment with equity but Mr Saeed said that it could also raise debt from the capital markets.
Limitless is also likely to be looking at emerging markets around the world as this is where large-scale projects that can leverage on its town-planning skills will be.
Particularly bullish on the two huge markets, Mr Saeed said: ‘India and China will probably need new homes for the next 100 years.’
Source : Business Times - 11 Dec 2007
The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad.
The Ascott Group said yesterday that it has signed a joint venture agreement with the Rattha Group to acquire its fifth serviced residence in India.
The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad. the group will pay about S$15 million for a 49 per cent stake in the property. Indian partner Rattha will hold the remaining majority stake.
Ascott said that the deal is part of a master development agreement it signed with Rattha in August 2006. The aim of the agreement is to acquire and develop seven serviced residences with a total of at least 1,000 units in India by 2010.
Ascott president and chief executive Jennie Chua said: ‘The addition of Citadines Hyderabad Hitec City puts the group ahead of the target set out under the agreement with Rattha. Ascott now has five properties with more than 1,100 units under development in Bangalore, Chennai and Hyderabad.‘
The group will continue to seek business opportunities in other cities including New Delhi and Mumbai, she said.
The proposed Citadines Hyderabad Hitec City is in the heart of Hitec City, a major high-tech township where the Hyderabad International Convention Centre is located.
When completed, the serviced residence will cater to the business traveller market, particularly people from the IT and biotechnology industries. The opening is scheduled for the first half of 2010.
With this latest addition, Ascott now has 1,178 serviced residence units in five properties under development in India. The other four properties are in Bangalore and Chennai, and are slated to open between 2008 and 2009.
Source : Business Times - 11 Dec 2007
The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad. the group will pay about S$15 million for a 49 per cent stake in the property. Indian partner Rattha will hold the remaining majority stake.
Ascott said that the deal is part of a master development agreement it signed with Rattha in August 2006. The aim of the agreement is to acquire and develop seven serviced residences with a total of at least 1,000 units in India by 2010.
Ascott president and chief executive Jennie Chua said: ‘The addition of Citadines Hyderabad Hitec City puts the group ahead of the target set out under the agreement with Rattha. Ascott now has five properties with more than 1,100 units under development in Bangalore, Chennai and Hyderabad.‘
The group will continue to seek business opportunities in other cities including New Delhi and Mumbai, she said.
The proposed Citadines Hyderabad Hitec City is in the heart of Hitec City, a major high-tech township where the Hyderabad International Convention Centre is located.
When completed, the serviced residence will cater to the business traveller market, particularly people from the IT and biotechnology industries. The opening is scheduled for the first half of 2010.
With this latest addition, Ascott now has 1,178 serviced residence units in five properties under development in India. The other four properties are in Bangalore and Chennai, and are slated to open between 2008 and 2009.
Source : Business Times - 11 Dec 2007
78 Shenton Way for $650 million
FOREIGN institutional investors continue to be drawn to the Singapore office market.
The latest investor to come in is Germany’s Commerz Grundbesitz Investmentgesellschaft (CGI) group, which has bought 78 Shenton Way for $650 million, BT understands. The price works out to $1,857 per square foot based on a total net lettable area of about 350,000 sq ft. This comprises about 275,000 sq ft in the existing 34-storey office tower and a further 75,000 sq ft that is being built in an extension that will be spread across six levels of offices above the carpark podium.
The extension is expected to be completed in the second half of 2009.
78 Shenton Way is on a site with a remaining lease of about 75 years. The property was sold by a joint-venture between Credit Suisse and CLSA funds which bought the 34-storey tower this January for $348.5 million.
Sources say that the vendors are expected to pump in about $80 million to build the extension and spruce up the existing property.
Jones Lang LaSalle is said to have advised 78 Shenton Way’s sellers, while buyer CGI - which is making its maiden entry into the Singapore real estate market - is understood to have been advised by CB Richard Ellis. CGI is the capital investment company for the open-ended fund Haus-Invest.
The $1,857 psf of net lettable area achieved for the deal is in line with current office values in the area, industry observers say. In April this year, TSO Investment, a unit of a CLSA Capital Partners-managed property fund, sold SIA Building at Robinson Road to European pension fund manager SEB for about $1,780 psf of net lettable area.
In September, SEB also bought 12 floors at Springleaf Tower in the Anson Road area at $2,088 psf of net lettable area.
In October, Allco Commercial Real Estate Investment Trust picked up KeyPoint in the Jalan Sultan/Beach Road area for $370 million or $1,186 psf of net lettable area. The deal includes income support of up to $10.5 million for two years to be provided by the seller.
In August, a Goldman Sachs-linked fund bought Chevron House (formerly Caltex House) along Raffles Place for $2,780 psf, a record for an office block here. Chevron House stands on a site with a remaining lease of about 81 years.
The Goldman Sachs group is also expected to stitch a deal early next year to buy the nextdoor Hitachi Tower, which faces Collyer Quay, for about $3,000 psf, industry observers say. A higher price can be justified for Hitachi Tower due partly to its superior tenure (999-year leasehold) and orientation. As well, Hitachi Tower is not weighed down by rental caps for a major tenant, as in the case of Chevron’s lease at Chevron House, which limits the near-term rental upside of the property, according to an earlier media report.
Source : Business Times - 11 Dec 2007
The latest investor to come in is Germany’s Commerz Grundbesitz Investmentgesellschaft (CGI) group, which has bought 78 Shenton Way for $650 million, BT understands. The price works out to $1,857 per square foot based on a total net lettable area of about 350,000 sq ft. This comprises about 275,000 sq ft in the existing 34-storey office tower and a further 75,000 sq ft that is being built in an extension that will be spread across six levels of offices above the carpark podium.
The extension is expected to be completed in the second half of 2009.
78 Shenton Way is on a site with a remaining lease of about 75 years. The property was sold by a joint-venture between Credit Suisse and CLSA funds which bought the 34-storey tower this January for $348.5 million.
Sources say that the vendors are expected to pump in about $80 million to build the extension and spruce up the existing property.
Jones Lang LaSalle is said to have advised 78 Shenton Way’s sellers, while buyer CGI - which is making its maiden entry into the Singapore real estate market - is understood to have been advised by CB Richard Ellis. CGI is the capital investment company for the open-ended fund Haus-Invest.
The $1,857 psf of net lettable area achieved for the deal is in line with current office values in the area, industry observers say. In April this year, TSO Investment, a unit of a CLSA Capital Partners-managed property fund, sold SIA Building at Robinson Road to European pension fund manager SEB for about $1,780 psf of net lettable area.
In September, SEB also bought 12 floors at Springleaf Tower in the Anson Road area at $2,088 psf of net lettable area.
In October, Allco Commercial Real Estate Investment Trust picked up KeyPoint in the Jalan Sultan/Beach Road area for $370 million or $1,186 psf of net lettable area. The deal includes income support of up to $10.5 million for two years to be provided by the seller.
In August, a Goldman Sachs-linked fund bought Chevron House (formerly Caltex House) along Raffles Place for $2,780 psf, a record for an office block here. Chevron House stands on a site with a remaining lease of about 81 years.
The Goldman Sachs group is also expected to stitch a deal early next year to buy the nextdoor Hitachi Tower, which faces Collyer Quay, for about $3,000 psf, industry observers say. A higher price can be justified for Hitachi Tower due partly to its superior tenure (999-year leasehold) and orientation. As well, Hitachi Tower is not weighed down by rental caps for a major tenant, as in the case of Chevron’s lease at Chevron House, which limits the near-term rental upside of the property, according to an earlier media report.
Source : Business Times - 11 Dec 2007
Investment sales of property have hit an all-time record of $50.8 billion so far this year - up 66 per cent from the whole of last year.
Goldman Sachs, Europe’s SEB and Dubai World also make big purchases.
Investment sales of property have hit an all-time record of $50.8 billion so far this year - up 66 per cent from the whole of last year.
And for the first time, a foreign player has emerged as the biggest buyer - Macquarie Global Property Advisors (MGPA) with $4.3 billion of purchases.
In fact, foreign institutional investors/property funds have been a dominant buying force this year, especially in the office sector, notes CB Richard Ellis executive director Jeremy Lake.
Besides MGPA, other big foreign investors in Singapore’s property market in 2007 include US heavyweight Goldman Sachs (with an investment of over $800 million), European pension fund manager SEB, which bought SIA Building and 12 floors at Springleaf Tower for a total $751 million, and Dubai World Group, with a total investment of over $500 million.
US-based Wachovia Development Corporation also entered the Singapore property market this year, with more than $700 million invested so far in the Farrer Court and Char Yong Gardens collective sale sites, and apartments at a new condo, Cliveden at Grange.
‘The Singapore property market has become much more appealing to global buyers over the last two to three years. In a reversal of the perfect storm, a series of factors have combined to create a sweet spot for Singapore: including the Integrated Resorts and F1 attractions, Singapore emerging as a wealth management hub and financial centre, the whole remaking of Singapore story, and an oversold property market, which made Singapore relatively attractive to global players,’ Mr Lake explains.
CBRE’s investment sales figures include land deals, collective sales, and transactions of entire office blocks and other buildings, as well as strata-titled units of at least $5 million.
The strong level of investment sales reflects major property players’ continued confidence in the mid to long-term prospects for the Singapore real estate sector.
With $50.8 billion done so far this year and another three more weeks to go, CBRE reckons the full-year figure may be about $52 billion.
The firm attributes the big jump over last year’s $30.6 billion to ‘the meteoric performance of the collective sales market in the first-half and the very strong office market’.
The residential and office sectors combined to account for about 90 per cent of the total value of investment sales so far this year.
Office investment sales more than doubled, from $4.4 billion in first-half 2007 to around $10.5 billion in the second half.
However, residential deals halved from $20.3 billion in H1 to $10.3 billion in H2, on the back of a drastic slowdown in collective sales.
With the current en bloc sales slowdown expected to continue, next year’s overall investment sales of property is likely to be lower, probably reverting to the 2006 level of around $30 billion, Mr Lake reckons.
‘However, the office market is likely to remain strong. We’ve not seen the pool of buyers diminish in the past few months,’ he added.
Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt too reckons 2008 will be a more stable year for investment sales.
He also projects that the public sector, comprising primarily Government Land Sales, will account for a bigger slice of total investment sales in 2008, at about 40 per cent - up from a share of about 22 per cent so far this year.
‘For the private sector, the strong en bloc sale performance seen in the first seven months of this year is unlikely to be repeated, but we still expect to see healthy land prices being maintained,’ Mr Lui suggests.
CBRE’s data shows that the biggest property deal in the public sector so far this year has been the $2.02 billion sale of Marina View Parcel A to MGPA, followed by the $1.69 billion sale of the former NCO Club and Beach Road camp grounds to a consortium comprising City Developments, Dubai World and Elad Group.
In the private sector, the top deal has been Farrer Court, which was sold for $1.34 billion to a consortium including CapitaLand, Hotel Properties, Wachovia and a foreign fund. The next biggest transaction was MGPA’s $1.04 billion purchase of Temasek Tower.
Mr Lake also observed that the $50.8 billion overall investment sales figure this year was close to the $54.9 billion in the eight years from 1996 to 2003.
Source : Business Times - 11 Dec 2007
Investment sales of property have hit an all-time record of $50.8 billion so far this year - up 66 per cent from the whole of last year.
And for the first time, a foreign player has emerged as the biggest buyer - Macquarie Global Property Advisors (MGPA) with $4.3 billion of purchases.
In fact, foreign institutional investors/property funds have been a dominant buying force this year, especially in the office sector, notes CB Richard Ellis executive director Jeremy Lake.
Besides MGPA, other big foreign investors in Singapore’s property market in 2007 include US heavyweight Goldman Sachs (with an investment of over $800 million), European pension fund manager SEB, which bought SIA Building and 12 floors at Springleaf Tower for a total $751 million, and Dubai World Group, with a total investment of over $500 million.
US-based Wachovia Development Corporation also entered the Singapore property market this year, with more than $700 million invested so far in the Farrer Court and Char Yong Gardens collective sale sites, and apartments at a new condo, Cliveden at Grange.
‘The Singapore property market has become much more appealing to global buyers over the last two to three years. In a reversal of the perfect storm, a series of factors have combined to create a sweet spot for Singapore: including the Integrated Resorts and F1 attractions, Singapore emerging as a wealth management hub and financial centre, the whole remaking of Singapore story, and an oversold property market, which made Singapore relatively attractive to global players,’ Mr Lake explains.
CBRE’s investment sales figures include land deals, collective sales, and transactions of entire office blocks and other buildings, as well as strata-titled units of at least $5 million.
The strong level of investment sales reflects major property players’ continued confidence in the mid to long-term prospects for the Singapore real estate sector.
With $50.8 billion done so far this year and another three more weeks to go, CBRE reckons the full-year figure may be about $52 billion.
The firm attributes the big jump over last year’s $30.6 billion to ‘the meteoric performance of the collective sales market in the first-half and the very strong office market’.
The residential and office sectors combined to account for about 90 per cent of the total value of investment sales so far this year.
Office investment sales more than doubled, from $4.4 billion in first-half 2007 to around $10.5 billion in the second half.
However, residential deals halved from $20.3 billion in H1 to $10.3 billion in H2, on the back of a drastic slowdown in collective sales.
With the current en bloc sales slowdown expected to continue, next year’s overall investment sales of property is likely to be lower, probably reverting to the 2006 level of around $30 billion, Mr Lake reckons.
‘However, the office market is likely to remain strong. We’ve not seen the pool of buyers diminish in the past few months,’ he added.
Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt too reckons 2008 will be a more stable year for investment sales.
He also projects that the public sector, comprising primarily Government Land Sales, will account for a bigger slice of total investment sales in 2008, at about 40 per cent - up from a share of about 22 per cent so far this year.
‘For the private sector, the strong en bloc sale performance seen in the first seven months of this year is unlikely to be repeated, but we still expect to see healthy land prices being maintained,’ Mr Lui suggests.
CBRE’s data shows that the biggest property deal in the public sector so far this year has been the $2.02 billion sale of Marina View Parcel A to MGPA, followed by the $1.69 billion sale of the former NCO Club and Beach Road camp grounds to a consortium comprising City Developments, Dubai World and Elad Group.
In the private sector, the top deal has been Farrer Court, which was sold for $1.34 billion to a consortium including CapitaLand, Hotel Properties, Wachovia and a foreign fund. The next biggest transaction was MGPA’s $1.04 billion purchase of Temasek Tower.
Mr Lake also observed that the $50.8 billion overall investment sales figure this year was close to the $54.9 billion in the eight years from 1996 to 2003.
Source : Business Times - 11 Dec 2007
109 deals done at $13.3 billion
Sales in H2 account for only $2.8b as price gap between owners, developers surfaces
It was the best of times, it was the worst of times.
With 82 en bloc deals worth $10.49 billion transacted in the first-half, and just 27 sites worth $2.81 billion transacted in the second-half so far, ‘2007 has been a ‘tale of two halves’ for the collective sales market,’ says CB Richard Ellis executive director Jeremy Lake.
Nonetheless, the year- to-date tally for 2007 - 109 deals done at $13.3 billion - is a whopping jump from the 79 deals amounting to $8.2 billion transacted for the whole of last year.
‘A price gap (between what owners were asking and what developers were prepared to pay) that was not there between January to June this year began to surface in July, so owners’ price expectations had overshot, and this was compounded by the sub-prime crisis. By September/Octo-ber, developers took a back seat when it came to bidding for land,’ Mr Lake said.
As for next year, CBRE’s view is that the total value of en bloc sales for 2008 may not be as high as this year’s all-time record.
A major highlight on the collective sale calendar this year was the introduction of new legislation in October which put in place more processes and safeguards to ensure the entire en bloc process is more transparent for all owners.
This led to a rush to sign collective sale agreements before the onset of the legislation - everything otherwise would be unwound and the process have to be restarted under the new law. As a result there was a flurry of en bloc sale tenders launched between September and November.
However, in the longer term, the new rules and procedures - which include how sales committees are formed and how they conduct their business - mean it could take a longer time to launch collective sale sites for sale.
As for next year, CBRE reckons ‘developers will still remain interested in acquiring development sites, although they are likely to be much more selective and focus on acquiring reasonably-priced sites in good locations’.
Industry observers also predict the pace at which developers acquire more collective sale sites will be a function of how well their residential projects sell.
The top buyers of collective sale sites so far this year have been companies linked to banker Wee Cho Yaw (UOL Group, Kheng Leong, United Industrial Corp and Singapore Land), which collectively bought six collective sale sites for a total of $1.6 billion.
This was followed by Malaysian tycoon Quek Leng Chan’s GuocoLand, which bought three sites (Leedon Heights, Palm Beach Garden in the East Coast area and Toho Garden at Yio Chu Kang Road) for a combined $972.5 million.
Property giant CapitaLand was in third position, with stakes in three sites (Char Yong Gardens, Gillman Heights and Farrer Court) purchased for a combined $953 million.
Up-and-coming property player, Bravo Building Construction, snapped up $824.5 million worth of en bloc sales deals.
The Kwek family’s listed City Developments and privately-held Hong Leong Holdings have picked up a total of $672 million of collective sale sites.
Other sizeable buyers this year include Hotel Properties (about $640 million) and Lippo Group and its listed unit Overseas Union Enterprise ($681 million).
Property magnate Ng Teng Fong’s Far East Organization has invested in about $400 million of collective sale sites so far this year, after buying close to $1 billion worth of such properties last year.
CBRE’s analysis also shows that a total of 142 collective sale launches have been advertised so far this year, of which about half or 69 sites have been sold. The other 40 deals struck this year involved either sites launched prior to 2007 or sites whose launches were not advertised.
Source : Business Times - 10 Dec 2007
It was the best of times, it was the worst of times.
With 82 en bloc deals worth $10.49 billion transacted in the first-half, and just 27 sites worth $2.81 billion transacted in the second-half so far, ‘2007 has been a ‘tale of two halves’ for the collective sales market,’ says CB Richard Ellis executive director Jeremy Lake.
Nonetheless, the year- to-date tally for 2007 - 109 deals done at $13.3 billion - is a whopping jump from the 79 deals amounting to $8.2 billion transacted for the whole of last year.
‘A price gap (between what owners were asking and what developers were prepared to pay) that was not there between January to June this year began to surface in July, so owners’ price expectations had overshot, and this was compounded by the sub-prime crisis. By September/Octo-ber, developers took a back seat when it came to bidding for land,’ Mr Lake said.
As for next year, CBRE’s view is that the total value of en bloc sales for 2008 may not be as high as this year’s all-time record.
A major highlight on the collective sale calendar this year was the introduction of new legislation in October which put in place more processes and safeguards to ensure the entire en bloc process is more transparent for all owners.
This led to a rush to sign collective sale agreements before the onset of the legislation - everything otherwise would be unwound and the process have to be restarted under the new law. As a result there was a flurry of en bloc sale tenders launched between September and November.
However, in the longer term, the new rules and procedures - which include how sales committees are formed and how they conduct their business - mean it could take a longer time to launch collective sale sites for sale.
As for next year, CBRE reckons ‘developers will still remain interested in acquiring development sites, although they are likely to be much more selective and focus on acquiring reasonably-priced sites in good locations’.
Industry observers also predict the pace at which developers acquire more collective sale sites will be a function of how well their residential projects sell.
The top buyers of collective sale sites so far this year have been companies linked to banker Wee Cho Yaw (UOL Group, Kheng Leong, United Industrial Corp and Singapore Land), which collectively bought six collective sale sites for a total of $1.6 billion.
This was followed by Malaysian tycoon Quek Leng Chan’s GuocoLand, which bought three sites (Leedon Heights, Palm Beach Garden in the East Coast area and Toho Garden at Yio Chu Kang Road) for a combined $972.5 million.
Property giant CapitaLand was in third position, with stakes in three sites (Char Yong Gardens, Gillman Heights and Farrer Court) purchased for a combined $953 million.
Up-and-coming property player, Bravo Building Construction, snapped up $824.5 million worth of en bloc sales deals.
The Kwek family’s listed City Developments and privately-held Hong Leong Holdings have picked up a total of $672 million of collective sale sites.
Other sizeable buyers this year include Hotel Properties (about $640 million) and Lippo Group and its listed unit Overseas Union Enterprise ($681 million).
Property magnate Ng Teng Fong’s Far East Organization has invested in about $400 million of collective sale sites so far this year, after buying close to $1 billion worth of such properties last year.
CBRE’s analysis also shows that a total of 142 collective sale launches have been advertised so far this year, of which about half or 69 sites have been sold. The other 40 deals struck this year involved either sites launched prior to 2007 or sites whose launches were not advertised.
Source : Business Times - 10 Dec 2007
Ion Orchard intends to launch an advertising campaign to promote the mall
Ion Orchard intends to launch an advertising campaign to promote the mall in the first quarter of next year - almost a whole year before the Orchard Road mall opens its doors to shoppers in end-2008.
For starters, the mall will run a print ad campaign in selected international publications such as the Wall Street Journal Asia and the Financial Times.
Designed to convey a mood of luxury and sophistication, the campaign will feature international models dressed in specially produced couture outfits and accessories whose design inspiration comes from the mall itself - or rather, the mall’s facade which aims to light up the building once it is up. Closer to the day of the mall’s opening, ads will also run in the local newspapers.
The mall is owned by a joint venture (JV) between Singapore-listed CapitaLand and Hong Kong’s Sun Hung Kai Properties.
‘Our new marketing campaign reflects our vision to be a world-class retail destination that will bring a truly unique retail experience to shoppers,’ said Soon Su Lin, chief executive of the JV company. ‘Even though Ion Orchard is still under construction, we are happy to be adding to the vibrancy of Orchard Road, and look forward to delighting shoppers in the near future.’
The mall also unveiled four-metre high hoardings last week at the site.
The campaign account was won by marketing communications agency DDB after its contest against six agencies.
‘I think Ion Orchard will light up Orchard Road in a bold and fashionable way,’ said David Tang, chief executive of DDB Group Singapore. ‘The campaign will have to be just as bold and fashionable.’
Ion Orchard is part of a retail-cum-residential development located at the heart of Orchard Road. When opened in end-2008, the mall will offer some 400 retail, F&B and entertainment stores. Marketing for the retail space has already begun, BT understands.
Source : Business Times - 10 Dec 2007
For starters, the mall will run a print ad campaign in selected international publications such as the Wall Street Journal Asia and the Financial Times.
Designed to convey a mood of luxury and sophistication, the campaign will feature international models dressed in specially produced couture outfits and accessories whose design inspiration comes from the mall itself - or rather, the mall’s facade which aims to light up the building once it is up. Closer to the day of the mall’s opening, ads will also run in the local newspapers.
The mall is owned by a joint venture (JV) between Singapore-listed CapitaLand and Hong Kong’s Sun Hung Kai Properties.
‘Our new marketing campaign reflects our vision to be a world-class retail destination that will bring a truly unique retail experience to shoppers,’ said Soon Su Lin, chief executive of the JV company. ‘Even though Ion Orchard is still under construction, we are happy to be adding to the vibrancy of Orchard Road, and look forward to delighting shoppers in the near future.’
The mall also unveiled four-metre high hoardings last week at the site.
The campaign account was won by marketing communications agency DDB after its contest against six agencies.
‘I think Ion Orchard will light up Orchard Road in a bold and fashionable way,’ said David Tang, chief executive of DDB Group Singapore. ‘The campaign will have to be just as bold and fashionable.’
Ion Orchard is part of a retail-cum-residential development located at the heart of Orchard Road. When opened in end-2008, the mall will offer some 400 retail, F&B and entertainment stores. Marketing for the retail space has already begun, BT understands.
Source : Business Times - 10 Dec 2007
From CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.
REAL estate investment trusts (Reits) are becoming increasingly ubiquitous in Singapore, thanks to their popularity. But more could be done to improve their environmental impact, given their growing significance in the property scene.
Dr Joseph Chun of law firm Shook Lin & Bok has noted - in a recent study he undertook while he was then employed by the NUS’s Department of Real Estate - that the legal framework in which Reits operate has the likely effect of undermining the Singapore government’s efforts to encourage green property development and management.
And he has suggested that there may be a need to consider measures to counteract these presumably unintended adverse environmental effects.
‘Real estate is one of the most significant asset classes in Singapore … However, the land is more than an investment asset to be managed for maximum income; it is also our abode in which we live, work, and play. Investment decisions that enhance or degrade this abode have serious impacts on our lives that go beyond financial returns,’ Dr Chun said, in his article Are Reits Built to be Green?.
He suggests that more needs to be done to encourage environmentally friendly practices within the property sector in general, and the Reits sector in particular.
The popularity of Reits as an investment tool in Singapore has encouraged the growth and creation of such trusts. The number has grown from just one - CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.
There have been estimates that Reits could eventually constitute up to 70 per cent of the listed real estate in Singapore - in line with international trends.
‘As Reits increase their dominance of the urban environment, the need to avoid or at least mitigate those aspects of Reit law that encourage unsustainable behaviour will correspondingly become more urgent,’ Dr Chun proposed in his article.
He believes the nature of Reits as an investment tool and the legal framework governing them significantly restrict the scope of any green agenda.
He observed that Reits are designed to appeal to investors looking for short-term, steady cash returns - with little to motivate the Reit manager to invest in measures that benefit the public or the occupants of the Reit’s properties, ie. green measures, if these do not increase the Reit’s income.
‘As long as tenants who pay the utility charges are not willing to pay a premium for energy efficiency or healthier indoor environment, investing in green refurbishments that do not provide significant quantifiable financial returns is simply not an attractive use of limited funds,’ he noted.
The short-term orientation is further encouraged via the reporting requirements placed on Reits - with managers having to report the trust’s financial performance every quarter, value each property of the trust at least once a year and report the annual value in the annual report. These act as a barrier towards a life cycle approach to investing in environmental performance.
There are also funding constraints to pursuing a green agenda, with Reits having to distribute most of their taxable income to unit holders in order to maintain their tax transparent status.
‘The legal limit on the amount of its funds a Reit can invest in property development coupled with the relatively risky nature of property development also doesn’t help the green cause as it means that a Reit is more likely to seek out existing buildings to acquire rather than opportunities to develop new properties,’ Dr Chun said.
Typically, it is easier and less costly for developers to incorporate environmentally friendly features into new buildings than it is to improve the energy efficiency of existing buildings.
A cue could be taken from the US, where several states offer tax credits for buildings that meet certain green standards.
Dr Chun believes the law can be amended to encourage the development of more environmentally friendly buildings. He suggests relaxing the legal requirements on the minimum distribution of dividends and limits on borrowings in respect of retained earnings or borrowings invested in refurbishment, retrofitting and renovation activities that lead to a property achieving a green rating.
He also believes that measures could be put in place to mandate annual assessments of the environmental performance of the properties owned by Reits, alongside the current annual valuations needed of the properties owned by Reits. ‘(This will) help ethical investors make informed decisions about the green value of a Reit, thereby giving the Reit looking to attract the ethical investors’ dollar a motivation to upgrade its environmental performance,’ he said.
Dr Chun concludes, in his piece: ‘Sustainable development requires us to integrate the environmental considerations into all our development decisions, including our investment decisions, so it is unsatisfactory when the law encourages investment in real estate that has the potential to cause environmental harm without simultaneously providing for compensating measures to avoid or mitigate the harm.’
Source : Business Times - 10 Dec 2007
Dr Joseph Chun of law firm Shook Lin & Bok has noted - in a recent study he undertook while he was then employed by the NUS’s Department of Real Estate - that the legal framework in which Reits operate has the likely effect of undermining the Singapore government’s efforts to encourage green property development and management.
And he has suggested that there may be a need to consider measures to counteract these presumably unintended adverse environmental effects.
‘Real estate is one of the most significant asset classes in Singapore … However, the land is more than an investment asset to be managed for maximum income; it is also our abode in which we live, work, and play. Investment decisions that enhance or degrade this abode have serious impacts on our lives that go beyond financial returns,’ Dr Chun said, in his article Are Reits Built to be Green?.
He suggests that more needs to be done to encourage environmentally friendly practices within the property sector in general, and the Reits sector in particular.
The popularity of Reits as an investment tool in Singapore has encouraged the growth and creation of such trusts. The number has grown from just one - CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.
There have been estimates that Reits could eventually constitute up to 70 per cent of the listed real estate in Singapore - in line with international trends.
‘As Reits increase their dominance of the urban environment, the need to avoid or at least mitigate those aspects of Reit law that encourage unsustainable behaviour will correspondingly become more urgent,’ Dr Chun proposed in his article.
He believes the nature of Reits as an investment tool and the legal framework governing them significantly restrict the scope of any green agenda.
He observed that Reits are designed to appeal to investors looking for short-term, steady cash returns - with little to motivate the Reit manager to invest in measures that benefit the public or the occupants of the Reit’s properties, ie. green measures, if these do not increase the Reit’s income.
‘As long as tenants who pay the utility charges are not willing to pay a premium for energy efficiency or healthier indoor environment, investing in green refurbishments that do not provide significant quantifiable financial returns is simply not an attractive use of limited funds,’ he noted.
The short-term orientation is further encouraged via the reporting requirements placed on Reits - with managers having to report the trust’s financial performance every quarter, value each property of the trust at least once a year and report the annual value in the annual report. These act as a barrier towards a life cycle approach to investing in environmental performance.
There are also funding constraints to pursuing a green agenda, with Reits having to distribute most of their taxable income to unit holders in order to maintain their tax transparent status.
‘The legal limit on the amount of its funds a Reit can invest in property development coupled with the relatively risky nature of property development also doesn’t help the green cause as it means that a Reit is more likely to seek out existing buildings to acquire rather than opportunities to develop new properties,’ Dr Chun said.
Typically, it is easier and less costly for developers to incorporate environmentally friendly features into new buildings than it is to improve the energy efficiency of existing buildings.
A cue could be taken from the US, where several states offer tax credits for buildings that meet certain green standards.
Dr Chun believes the law can be amended to encourage the development of more environmentally friendly buildings. He suggests relaxing the legal requirements on the minimum distribution of dividends and limits on borrowings in respect of retained earnings or borrowings invested in refurbishment, retrofitting and renovation activities that lead to a property achieving a green rating.
He also believes that measures could be put in place to mandate annual assessments of the environmental performance of the properties owned by Reits, alongside the current annual valuations needed of the properties owned by Reits. ‘(This will) help ethical investors make informed decisions about the green value of a Reit, thereby giving the Reit looking to attract the ethical investors’ dollar a motivation to upgrade its environmental performance,’ he said.
Dr Chun concludes, in his piece: ‘Sustainable development requires us to integrate the environmental considerations into all our development decisions, including our investment decisions, so it is unsatisfactory when the law encourages investment in real estate that has the potential to cause environmental harm without simultaneously providing for compensating measures to avoid or mitigate the harm.’
Source : Business Times - 10 Dec 2007
2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.
Now, you too can live like the colonial sahibs of old, as long as you are prepared to make the highest offer for monthly rental in an open bid.
But be warned, rents of homes under the Singapore Land Authority’s (SLA) first bidding exercise held recently, increased by between 40 to 230 per cent over previous rents.
Before the open bidding system, the allocation of homes was done through a balloting exercise or on a first-come-first-serve basis.
But in October and November, SLA piloted the new open bidding system of allocating homes to make the process fairer and more transparent with five homes awarded so far. One of these, a bungalow on a 2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.
On the new system, SLA deputy director of land lease private Teo Cher Hian said: ‘This way, market forces decide the rental that can be fetched for the state properties.’
The new system appears to be popular with 84 bids received for the first five properties. Of these bidders, 64.3 per cent were locals, with companies and foreigners making up 22.6 per cent and 13.1 per cent of the bids respectively.
Mr Teo also said that many of the bids were higher than the guide rents set by SLA.
Although the widely held perception is that these state-owned properties are cheap to rent, SLA says that guide rents are determined by an independent valuer based on the size, condition, location and proposed tenure of each property.
The properties are also let in their existing condition, usually unfurnished with rents starting as low as $400 per month for a small flat. Enhancement of these properties is also not a primary objective as some of these units sit on sites that could eventually be redeveloped.
SLA has a total stock of 2,360 homes comprising landed and non-landed properties, representing about 19 per cent of the total estimated gross floor area of state properties it manages.
SLA’s rental homes have an occupancy rate of about 91 per cent. But existing tenants are usually allowed to directly renew their leases although the rents may be increased.
In its last financial year (April 1, 2006 - March 31, 2007) SLA says that its residential rental revenue was $78 million, up 2.6 per cent or $2 million from the previous year. SLA added that rents increased by an average of 5 per cent in this period with the highest increase of 23 per cent recorded for just one property.
Previously, rents for apartments ranged between $400-$3,800. Terrace, semi-detached and bungalow rents ranged between $600-$3,333, $800- $11,500, and $1,100- $23,222 respectively.
But the impact of the new bidding system to SLA’s rental revenue is, however, not likely to show any immediate significant increase, as so few of these properties actually come up for rent. For the first half 2008, SLA expects only about 36 homes to be made available for rent - upon being vacated - with six homes expected in January followed by seven in February and six in March.
Those interested in bidding for these can submit their bids to SLA at a stipulated time and date. The bidding period will be six days. More details will be available on SLA’s website www.spio.sla.gov.sg from Dec 14.
But do take note that for a bid to qualify, the bidder’s average monthly income has to generally be at least three times the monthly rental bid so only those earning over $60,000 a month need bother looking at those grand old black and white bungalows.
Source : Business Times - 10 Dec 2007
But be warned, rents of homes under the Singapore Land Authority’s (SLA) first bidding exercise held recently, increased by between 40 to 230 per cent over previous rents.
Before the open bidding system, the allocation of homes was done through a balloting exercise or on a first-come-first-serve basis.
But in October and November, SLA piloted the new open bidding system of allocating homes to make the process fairer and more transparent with five homes awarded so far. One of these, a bungalow on a 2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.
On the new system, SLA deputy director of land lease private Teo Cher Hian said: ‘This way, market forces decide the rental that can be fetched for the state properties.’
The new system appears to be popular with 84 bids received for the first five properties. Of these bidders, 64.3 per cent were locals, with companies and foreigners making up 22.6 per cent and 13.1 per cent of the bids respectively.
Mr Teo also said that many of the bids were higher than the guide rents set by SLA.
Although the widely held perception is that these state-owned properties are cheap to rent, SLA says that guide rents are determined by an independent valuer based on the size, condition, location and proposed tenure of each property.
The properties are also let in their existing condition, usually unfurnished with rents starting as low as $400 per month for a small flat. Enhancement of these properties is also not a primary objective as some of these units sit on sites that could eventually be redeveloped.
SLA has a total stock of 2,360 homes comprising landed and non-landed properties, representing about 19 per cent of the total estimated gross floor area of state properties it manages.
SLA’s rental homes have an occupancy rate of about 91 per cent. But existing tenants are usually allowed to directly renew their leases although the rents may be increased.
In its last financial year (April 1, 2006 - March 31, 2007) SLA says that its residential rental revenue was $78 million, up 2.6 per cent or $2 million from the previous year. SLA added that rents increased by an average of 5 per cent in this period with the highest increase of 23 per cent recorded for just one property.
Previously, rents for apartments ranged between $400-$3,800. Terrace, semi-detached and bungalow rents ranged between $600-$3,333, $800- $11,500, and $1,100- $23,222 respectively.
But the impact of the new bidding system to SLA’s rental revenue is, however, not likely to show any immediate significant increase, as so few of these properties actually come up for rent. For the first half 2008, SLA expects only about 36 homes to be made available for rent - upon being vacated - with six homes expected in January followed by seven in February and six in March.
Those interested in bidding for these can submit their bids to SLA at a stipulated time and date. The bidding period will be six days. More details will be available on SLA’s website www.spio.sla.gov.sg from Dec 14.
But do take note that for a bid to qualify, the bidder’s average monthly income has to generally be at least three times the monthly rental bid so only those earning over $60,000 a month need bother looking at those grand old black and white bungalows.
Source : Business Times - 10 Dec 2007
The Strata Titles Board (STB) has given the go-ahead for the sale of Farrer Court to a CapitaLand-led consortium.
The Strata Titles Board (STB) has given the go-ahead for the sale of Farrer Court to a CapitaLand-led consortium.
At a price tag of $1.34 billion, it is the largest amount ever fetched for a collective sale. The approval was granted last Saturday.
The consortium - comprising CapitaLand, Hotel Properties and US-based Wachovia Development Corporation - said in June that they would pay a record-setting $1.34 billion for the 618-unit development.
This beat the reserve price of $1.2 billion but is still lower than the owners’ asking price of $1.5 billion.
Farrer Court owners had upped their reserve price from $700 million to $840 million at the start of the year, and then increased it to $1.2 billion in March.
The unit land cost to the developers for the leasehold District 10 site works out to $762 to $783 psf of potential gross floor area.
BT understands that owners of two units objected to the sale, on grounds that the price was not high enough.
The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 sq ft and 1,453 sq ft - and their owners will get $2.238 million and $2.122 million per unit, respectively. Based on the apartments’ existing strata areas, the proceeds to owners work out to $1,386 psf and $1,460 psf, respectively.
Credo Real Estate brokered the sale, and law firm Rodyk & Davidson represented the majority owners.
CapitaLand wants to turn the site into a new 36-storey condominium with about 1,500 apartments, likely to be ready for launch in the first half of 2009.
Source : Business Times - 10 Dec 2007
At a price tag of $1.34 billion, it is the largest amount ever fetched for a collective sale. The approval was granted last Saturday.
The consortium - comprising CapitaLand, Hotel Properties and US-based Wachovia Development Corporation - said in June that they would pay a record-setting $1.34 billion for the 618-unit development.
This beat the reserve price of $1.2 billion but is still lower than the owners’ asking price of $1.5 billion.
Farrer Court owners had upped their reserve price from $700 million to $840 million at the start of the year, and then increased it to $1.2 billion in March.
The unit land cost to the developers for the leasehold District 10 site works out to $762 to $783 psf of potential gross floor area.
BT understands that owners of two units objected to the sale, on grounds that the price was not high enough.
The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 sq ft and 1,453 sq ft - and their owners will get $2.238 million and $2.122 million per unit, respectively. Based on the apartments’ existing strata areas, the proceeds to owners work out to $1,386 psf and $1,460 psf, respectively.
Credo Real Estate brokered the sale, and law firm Rodyk & Davidson represented the majority owners.
CapitaLand wants to turn the site into a new 36-storey condominium with about 1,500 apartments, likely to be ready for launch in the first half of 2009.
Source : Business Times - 10 Dec 2007
SLA has 2,360 units available for rent and the occupancy rate is 91 per cent.
RENTERS who have long hankered after that state-owned black-and-white colonial bungalow but are put off by the long waiting list can now bid for their dream home.
State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.
Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.
There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.
Renters have said that getting one is like winning the lottery - a tenant is selected either on a first-come, first-served basis or through a balloting exercise when a property is released.
Under the new scheme, anyone interested in these properties will be invited to view them during open houses. They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.
The new system will allow these buildings to be secured within a week or so of their being made available.
All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.
An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.
At least 36 houses in popular locations - ranging from terraced and semi-detached houses to bungalows - will be open for bidding in the first half of next year.
Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.
But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.
He said many of his clients faced months, or even years, of waiting for such properties to become available.
‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.
SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.
The price he paid - $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m - is reasonable, he said.
He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.
SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding. Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.
List of estates and price range The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.
Range of properties:
Flat/Apartment - 1,090 units; rental from $400-$3,800
Terrace - 340 units; rental from $600-$3,333
Semi-detached - 390 units; rental from $800-$11,500
Bungalow - 540 units; rental from $1,100-$23,222
Some of their locations:
Alexandra Park
Seletar Airbase
Telok Blangah
Scotts Road
Malcolm Park
Medway Park
Goodwood Hill
Bukit Timah
Woodleigh Park
Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.
The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.
They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.
Source : Sunday Times - 9 Dec 2007
State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.
Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.
There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.
Renters have said that getting one is like winning the lottery - a tenant is selected either on a first-come, first-served basis or through a balloting exercise when a property is released.
Under the new scheme, anyone interested in these properties will be invited to view them during open houses. They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.
The new system will allow these buildings to be secured within a week or so of their being made available.
All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.
An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.
At least 36 houses in popular locations - ranging from terraced and semi-detached houses to bungalows - will be open for bidding in the first half of next year.
Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.
But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.
He said many of his clients faced months, or even years, of waiting for such properties to become available.
‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.
SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.
The price he paid - $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m - is reasonable, he said.
He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.
SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding. Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.
List of estates and price range The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.
Range of properties:
Flat/Apartment - 1,090 units; rental from $400-$3,800
Terrace - 340 units; rental from $600-$3,333
Semi-detached - 390 units; rental from $800-$11,500
Bungalow - 540 units; rental from $1,100-$23,222
Some of their locations:
Alexandra Park
Seletar Airbase
Telok Blangah
Scotts Road
Malcolm Park
Medway Park
Goodwood Hill
Bukit Timah
Woodleigh Park
Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.
The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.
They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.
Source : Sunday Times - 9 Dec 2007
Sunday, December 9, 2007
FORGET the Central Business District.
FORGET the Central Business District. Property investors priced out of prime zones but still hunting for a good buy should look to downtown’s upcoming hot spot - the Beach Road, Ophir-Rochor district.
This hotchpotch of an area - with old shophouses dotting its landscape, juxtaposed with towering modern office blocks - is set for a snazzy makeover, as announced by the Government this week.
Already, property experts have identified strong potential upside for properties in the district.
Minister of State for National Development Grace Fu said it would be ‘an extension of Bugis’, complementing the Marina Bay financial district.
Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.
The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.
One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million - or $1,077 per sq ft (psf) - in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.
The same unit now costs more than $2 million - or $1,539 psf - on the market, said the 61-year-old retiree.
Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.
While Singapore’s property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.
Beach Road already has its own crown jewel in South Beach - an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.
On Thursday, the Government said it would release one more 2.74ha plot - between Rochor and Ophir Roads, surrounding Parkview Square - as a multi-use ‘white site’ next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.
CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.
‘A mini-Raffles City on the white site is likely to do very well,’ added Mr Ku.
Shophouses are now particularly attractive, especially those facing the new plot, he said.
Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.
The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.
Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.
Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.
Still, before that can happen, certain parts of the district have to be ’spruced up’ and polished, added Mr Ku.
Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area’s new trendy image.
Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.
Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.
Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.
While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good ‘trickle-down effect’.
‘This district will remain attractive, especially to us, as it’s a creative hub with lots of knowledge-driven businesses and schools in the vicinity,’ he said. ‘It’s got a good vibe.’
Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was ‘the’ entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.
‘Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,’ he said.
Source : Sunday Times - 9 Dec 2007
This hotchpotch of an area - with old shophouses dotting its landscape, juxtaposed with towering modern office blocks - is set for a snazzy makeover, as announced by the Government this week.
Already, property experts have identified strong potential upside for properties in the district.
Minister of State for National Development Grace Fu said it would be ‘an extension of Bugis’, complementing the Marina Bay financial district.
Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.
The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.
One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million - or $1,077 per sq ft (psf) - in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.
The same unit now costs more than $2 million - or $1,539 psf - on the market, said the 61-year-old retiree.
Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.
While Singapore’s property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.
Beach Road already has its own crown jewel in South Beach - an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.
On Thursday, the Government said it would release one more 2.74ha plot - between Rochor and Ophir Roads, surrounding Parkview Square - as a multi-use ‘white site’ next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.
CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.
‘A mini-Raffles City on the white site is likely to do very well,’ added Mr Ku.
Shophouses are now particularly attractive, especially those facing the new plot, he said.
Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.
The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.
Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.
Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.
Still, before that can happen, certain parts of the district have to be ’spruced up’ and polished, added Mr Ku.
Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area’s new trendy image.
Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.
Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.
Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.
While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good ‘trickle-down effect’.
‘This district will remain attractive, especially to us, as it’s a creative hub with lots of knowledge-driven businesses and schools in the vicinity,’ he said. ‘It’s got a good vibe.’
Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was ‘the’ entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.
‘Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,’ he said.
Source : Sunday Times - 9 Dec 2007
Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.
RENTERS who have long hankered after that state-owned black-and-white colonial bungalow but are put off by the long waiting list can now bid for their dream home.
State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.
Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.
There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.
Renters have said that getting one is like winning the lottery - a tenant is selected either on a first-come, first-served basis or through a balloting exercise when a property is released.
Under the new scheme, anyone interested in these properties will be invited to view them during open houses. They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.
The new system will allow these buildings to be secured within a week or so of their being made available.
All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.
An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.
At least 36 houses in popular locations - ranging from terraced and semi-detached houses to bungalows - will be open for bidding in the first half of next year.
Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.
But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.
He said many of his clients faced months, or even years, of waiting for such properties to become available.
‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.
SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.
The price he paid - $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m - is reasonable, he said.
He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.
SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding. Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.
List of estates and price range The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.
Range of properties:
Flat/Apartment - 1,090 units; rental from $400-$3,800
Terrace - 340 units; rental from $600-$3,333
Semi-detached - 390 units; rental from $800-$11,500
Bungalow - 540 units; rental from $1,100-$23,222
Some of their locations:
Alexandra Park
Seletar Airbase
Telok Blangah
Scotts Road
Malcolm Park
Medway Park
Goodwood Hill
Bukit Timah
Woodleigh Park
Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.
The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.
They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.
Source : Sunday Times - 9 Dec 2007
State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.
Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.
There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.
Renters have said that getting one is like winning the lottery - a tenant is selected either on a first-come, first-served basis or through a balloting exercise when a property is released.
Under the new scheme, anyone interested in these properties will be invited to view them during open houses. They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.
The new system will allow these buildings to be secured within a week or so of their being made available.
All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.
An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.
At least 36 houses in popular locations - ranging from terraced and semi-detached houses to bungalows - will be open for bidding in the first half of next year.
Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.
But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.
He said many of his clients faced months, or even years, of waiting for such properties to become available.
‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.
SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.
The price he paid - $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m - is reasonable, he said.
He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.
SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding. Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.
List of estates and price range The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.
Range of properties:
Flat/Apartment - 1,090 units; rental from $400-$3,800
Terrace - 340 units; rental from $600-$3,333
Semi-detached - 390 units; rental from $800-$11,500
Bungalow - 540 units; rental from $1,100-$23,222
Some of their locations:
Alexandra Park
Seletar Airbase
Telok Blangah
Scotts Road
Malcolm Park
Medway Park
Goodwood Hill
Bukit Timah
Woodleigh Park
Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.
The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.
They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.
Source : Sunday Times - 9 Dec 2007
Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf
LIPPO Group is said to have priced its Marina Collection condo, a 99-year leasehold project on Sentosa Cove, at about $2,750-2,900 psf on average.
Over the past few days, the group, controlled by Indonesia’s Riady family, is said to have sold about half of the 60 or so units it has released so far in the 124-unit, four-storey development next to the One Degree 15 Marina Club. The development comprises three blocks.
Lippo is developing the condo jointly with the Marina Club, OCBC and Austria’s Raiffeisen Zentralbank (RZB).
Buyers will be given a free membership at One Degree 15 Marina Club for each unit of Marina Collection they purchase. The memberships are currently said to be going for above $40,000 each.
Lippo’s price appears to be slightly higher than the $2,600 psf net average achieved for the previous condo launch at Sentosa Cove - Ho Bee’s Turquoise.
The project was released in September and to date, Ho Bee is said to have sold 45 out of the 60 units it has released so far out of 91 units in the six-storey condo.
Marina Collection comprises three-, four-, and five-bedroom apartments as well as penthouses. Three-bedder units cost about $5.4 million while penthouses are priced at $10 million and above.
The 30 or so units Lippo has sold so far include five penthouses.
There are about 30 penthouses altogether.
The Lippo-led consortium is developing Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf per plot ratio (ppr).
Lippo’s pricing for its Marina Collection will no doubt be used by property developers to peg their bids at next week’s tender for the Pinnacle Collection - the last condo plot at Sentosa Cove.
The plot, which has a choice location at the entrance to the precinct’s marina basin, has a reserve price of $963.8 million or $1,600 psf ppr.
Source : Business Times - 8 Dec 2007
Over the past few days, the group, controlled by Indonesia’s Riady family, is said to have sold about half of the 60 or so units it has released so far in the 124-unit, four-storey development next to the One Degree 15 Marina Club. The development comprises three blocks.
Lippo is developing the condo jointly with the Marina Club, OCBC and Austria’s Raiffeisen Zentralbank (RZB).
Buyers will be given a free membership at One Degree 15 Marina Club for each unit of Marina Collection they purchase. The memberships are currently said to be going for above $40,000 each.
Lippo’s price appears to be slightly higher than the $2,600 psf net average achieved for the previous condo launch at Sentosa Cove - Ho Bee’s Turquoise.
The project was released in September and to date, Ho Bee is said to have sold 45 out of the 60 units it has released so far out of 91 units in the six-storey condo.
Marina Collection comprises three-, four-, and five-bedroom apartments as well as penthouses. Three-bedder units cost about $5.4 million while penthouses are priced at $10 million and above.
The 30 or so units Lippo has sold so far include five penthouses.
There are about 30 penthouses altogether.
The Lippo-led consortium is developing Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf per plot ratio (ppr).
Lippo’s pricing for its Marina Collection will no doubt be used by property developers to peg their bids at next week’s tender for the Pinnacle Collection - the last condo plot at Sentosa Cove.
The plot, which has a choice location at the entrance to the precinct’s marina basin, has a reserve price of $963.8 million or $1,600 psf ppr.
Source : Business Times - 8 Dec 2007
The STB’s much-awaited decision on Horizon Towers
Almost a year of wrangling and millions of dollars in legal fees later, the controversial en bloc sale of Horizon Towers was eventually approved yesterday by the Strata Titles Board (STB).
Still, the board’s verdict by no means spells the end of the long-running saga - minority owners who oppose the sale could still appeal. That would put the sale on hold, and could mean another round of protracted legal disputes.
The STB’s much-awaited decision on Horizon Towers was delivered before a packed room in the board’s Maxwell Road headquarters. Tribunal chairman Philip Chan read out the prepared statement solemnly, before four teams of lawyers and some 70 owners, curious onlookers and the media.
Acknowledging that this collective sale ‘lasted longer than most other en bloc (sales)’ that have come before the STB, Mr Chan said that his tribunal eventually decided to grant the application for the collective sale of Horizon Towers, after considering the various merits of the case.
He said that the board had been ‘particularly guided’ by the recent decision reached in the Phoenix Court en bloc sale and the parliamentary debates on recent amendments to the legislation governing en bloc sales.
In the Phoenix Court case, Justice Andrew Ang threw out the sole minority owner’s objection to the collective sale of the freehold apartment block at St Thomas Walk. Justice Ang determined that it was important to look at the purposive nature of the law governing collective sales, which requires that 80 per cent of owners have to agree to the sale before it can go through. As the requisite majority was obtained in the Phoenix Court case, Justice Ang ruled that the transaction was not prejudicial to the minority - as the law had intended.
A similar stance was adopted by Senior Minister of State for Law, Associate Professor Ho Peng Kee, and Deputy Prime Minister and Law Minister S Jayakumar in the recent parliamentary debates on amendments to the Land Titles (Strata) Bill.
Prof Ho had said requiring 100 per cent consent among owners for an en bloc sale was untenable, as it would cause delays in any sale, acrimony and incur costs. He said that amendments to the law would provide adequate safeguards to protect minority interests and that the existing 80 per cent or 90 per cent majority required - depending on the age of the development - was satisfactory. DPM Jayakumar agreed that amendments to the Bill would provide more safeguards and transparency for all owners.
Tribunal chairman Mr Chan also said yesterday that the minority owners who opposed the sale had failed to prove their case that the transaction had been carried out in bad faith. The minorities had alleged, among other things, that the sales committee and its sales agent had not worked hard enough to get the best price possible for the development.
The tribunal will issue detailed grounds for its decision at a later date. It ruled yesterday that no order would be made for costs, meaning that the minority would not have to bear any portion of the costs of the proceedings.
The gallery’s reaction to the tribunal’s decision was muted - surprising for a case that has caused much emotional upheaval for its owners. Owners received the verdict quietly and shuffled out of the room.
The minority owners, who feel they will lose their homes with this sale, were accepting of the verdict. ‘The decision was not unexpected. We have done and will do what is principally correct,’ said Jasmine Tan, who declined to comment at this point on whether she would appeal against the STB’s decision.
And, expectedly, the majority owners - the over-80 per cent who agreed to the collective sale - were relieved with the STB’s decision. They face the threat of being sued for up to $1 billion by the buyers, Hotel Properties (HPL) and its partners, if the deal falls through.
Said a group of some 80 majority owners: ‘We are happy with the decision and very pleased that the en bloc is going through. We look forward to the buyers confirming that they will proceed with the deal and withdrawing the legal suits they have started against some owners.’
HPL and its partners, for their part, have expressed their happiness with STB’s decision - but have held back on any decision on the lawsuit, pending the actual completion of the sale.
‘We are pleased that the STB has allowed the collective sale and rejected the objectors’ case, including their allegations of bad faith,’ said HPL executive director Christopher Lim.
The buyers’ lawyer, Senior Counsel K Shanmugam of Allen & Gledhill, added: ‘Our client entered into the transaction in good faith and paid what was then a record price for the property. The application should therefore have proceeded smoothly, but the market changed. As a result, the case went through a number of critical junctures. We are, however, happy that the end result is that the tribunal has ruled that the sale should now go ahead.’
Source : Business Times - 8 Dec 2007
Still, the board’s verdict by no means spells the end of the long-running saga - minority owners who oppose the sale could still appeal. That would put the sale on hold, and could mean another round of protracted legal disputes.
The STB’s much-awaited decision on Horizon Towers was delivered before a packed room in the board’s Maxwell Road headquarters. Tribunal chairman Philip Chan read out the prepared statement solemnly, before four teams of lawyers and some 70 owners, curious onlookers and the media.
Acknowledging that this collective sale ‘lasted longer than most other en bloc (sales)’ that have come before the STB, Mr Chan said that his tribunal eventually decided to grant the application for the collective sale of Horizon Towers, after considering the various merits of the case.
He said that the board had been ‘particularly guided’ by the recent decision reached in the Phoenix Court en bloc sale and the parliamentary debates on recent amendments to the legislation governing en bloc sales.
In the Phoenix Court case, Justice Andrew Ang threw out the sole minority owner’s objection to the collective sale of the freehold apartment block at St Thomas Walk. Justice Ang determined that it was important to look at the purposive nature of the law governing collective sales, which requires that 80 per cent of owners have to agree to the sale before it can go through. As the requisite majority was obtained in the Phoenix Court case, Justice Ang ruled that the transaction was not prejudicial to the minority - as the law had intended.
A similar stance was adopted by Senior Minister of State for Law, Associate Professor Ho Peng Kee, and Deputy Prime Minister and Law Minister S Jayakumar in the recent parliamentary debates on amendments to the Land Titles (Strata) Bill.
Prof Ho had said requiring 100 per cent consent among owners for an en bloc sale was untenable, as it would cause delays in any sale, acrimony and incur costs. He said that amendments to the law would provide adequate safeguards to protect minority interests and that the existing 80 per cent or 90 per cent majority required - depending on the age of the development - was satisfactory. DPM Jayakumar agreed that amendments to the Bill would provide more safeguards and transparency for all owners.
Tribunal chairman Mr Chan also said yesterday that the minority owners who opposed the sale had failed to prove their case that the transaction had been carried out in bad faith. The minorities had alleged, among other things, that the sales committee and its sales agent had not worked hard enough to get the best price possible for the development.
The tribunal will issue detailed grounds for its decision at a later date. It ruled yesterday that no order would be made for costs, meaning that the minority would not have to bear any portion of the costs of the proceedings.
The gallery’s reaction to the tribunal’s decision was muted - surprising for a case that has caused much emotional upheaval for its owners. Owners received the verdict quietly and shuffled out of the room.
The minority owners, who feel they will lose their homes with this sale, were accepting of the verdict. ‘The decision was not unexpected. We have done and will do what is principally correct,’ said Jasmine Tan, who declined to comment at this point on whether she would appeal against the STB’s decision.
And, expectedly, the majority owners - the over-80 per cent who agreed to the collective sale - were relieved with the STB’s decision. They face the threat of being sued for up to $1 billion by the buyers, Hotel Properties (HPL) and its partners, if the deal falls through.
Said a group of some 80 majority owners: ‘We are happy with the decision and very pleased that the en bloc is going through. We look forward to the buyers confirming that they will proceed with the deal and withdrawing the legal suits they have started against some owners.’
HPL and its partners, for their part, have expressed their happiness with STB’s decision - but have held back on any decision on the lawsuit, pending the actual completion of the sale.
‘We are pleased that the STB has allowed the collective sale and rejected the objectors’ case, including their allegations of bad faith,’ said HPL executive director Christopher Lim.
The buyers’ lawyer, Senior Counsel K Shanmugam of Allen & Gledhill, added: ‘Our client entered into the transaction in good faith and paid what was then a record price for the property. The application should therefore have proceeded smoothly, but the market changed. As a result, the case went through a number of critical junctures. We are, however, happy that the end result is that the tribunal has ruled that the sale should now go ahead.’
Source : Business Times - 8 Dec 2007
The 101 building faces the prospect of forking out about $6,000 to $35,000, depending on their properties
PAST building management financial woes have come back to haunt the owners of homes, shops and offices at a Beach Road building.
Each owner at The 101 building faces the prospect of forking out about $6,000 to $35,000, depending on their properties, to cover an outstanding debt of $300,000.
The debt, accumulated in recent years, is a hotchpotch of unpaid cleaning and security bills, as well as legal costs run up in a failed bid to recover unpaid carparking fees, among other things.
One of the home owners, Madam Tan Lee Sung, 77, told The Straits Times: ‘The money was not used by me. Why should I pay?’
The current management council is looking to see if its predecessors are liable for the debt. Things, however, could escalate if the debts remain unpaid, and creditors seek court orders.
The six-storey, roughly 20-year-old mixed development has 20 apartments and seven shops and office units.
A seafood restaurant and a steamboat outlet occupy the ground floor, while most of the apartments above are leased out by their owners.
Like all strata-titled buildings, it is run by a management council whose members are picked from the owners.
According to The 101’s council chairman, Mr Thomas Tan, 60, who took office about a month ago, the $300,000 debt arose partly because the former councils sued some owners for alleged non-payment of carparking fees and unauthorised alteration and use of common areas, among other things.
The council lost the lawsuits and found itself saddled with legal fees.
In October 2005, the management had $168,500 in its kitty, but this was whittled down to $12,150 by April this year. Its creditors have taken out court orders to freeze its bank account.
A former council chairman, businessman Tan Fung Chuan, 50, offered a different explanation for the debts. He pointed the finger at low maintenance contributions that the owners voted to pay in 2005.
At a meeting then, an owner had tabled a resolution to cut the total management fee collected every month from $7,000 to $3,000. Mr Tan said that was barely enough to pay for the building’s operating costs.
He said: ‘A reasonable operating fee should be $8,000 to $12,000.’
He added that the lawsuits against individual owners were taken out on legitimate grounds, as the owners had violated Singapore’s building regulations.
‘We wanted to comply with the authorities’ guidelines.’
At a heated meeting at The 101 on Thursday, unit owners voted to give their current council the power to take various steps to scrutinise its books for possible financial irregularities.
They have also voted to let the council claim money back from former council members and anyone else, if any wrongdoing is proven.
The owners refused, however, to raise their monthly contributions.
The council intends to try again to get the owners to agree to higher fees at another meeting soon.
Meanwhile, Mr Thomas Tan said his team would just focus on setting things right if it turned out to be a simple case of bad judgment on the part of the previous councils.
‘If it is proven that this current state of finances is due to ignorance or a bad judgement call, personally, I may try to convince owners to let it go and move on.’
Source : Straits Times - 8 Dec 2007
Each owner at The 101 building faces the prospect of forking out about $6,000 to $35,000, depending on their properties, to cover an outstanding debt of $300,000.
The debt, accumulated in recent years, is a hotchpotch of unpaid cleaning and security bills, as well as legal costs run up in a failed bid to recover unpaid carparking fees, among other things.
One of the home owners, Madam Tan Lee Sung, 77, told The Straits Times: ‘The money was not used by me. Why should I pay?’
The current management council is looking to see if its predecessors are liable for the debt. Things, however, could escalate if the debts remain unpaid, and creditors seek court orders.
The six-storey, roughly 20-year-old mixed development has 20 apartments and seven shops and office units.
A seafood restaurant and a steamboat outlet occupy the ground floor, while most of the apartments above are leased out by their owners.
Like all strata-titled buildings, it is run by a management council whose members are picked from the owners.
According to The 101’s council chairman, Mr Thomas Tan, 60, who took office about a month ago, the $300,000 debt arose partly because the former councils sued some owners for alleged non-payment of carparking fees and unauthorised alteration and use of common areas, among other things.
The council lost the lawsuits and found itself saddled with legal fees.
In October 2005, the management had $168,500 in its kitty, but this was whittled down to $12,150 by April this year. Its creditors have taken out court orders to freeze its bank account.
A former council chairman, businessman Tan Fung Chuan, 50, offered a different explanation for the debts. He pointed the finger at low maintenance contributions that the owners voted to pay in 2005.
At a meeting then, an owner had tabled a resolution to cut the total management fee collected every month from $7,000 to $3,000. Mr Tan said that was barely enough to pay for the building’s operating costs.
He said: ‘A reasonable operating fee should be $8,000 to $12,000.’
He added that the lawsuits against individual owners were taken out on legitimate grounds, as the owners had violated Singapore’s building regulations.
‘We wanted to comply with the authorities’ guidelines.’
At a heated meeting at The 101 on Thursday, unit owners voted to give their current council the power to take various steps to scrutinise its books for possible financial irregularities.
They have also voted to let the council claim money back from former council members and anyone else, if any wrongdoing is proven.
The owners refused, however, to raise their monthly contributions.
The council intends to try again to get the owners to agree to higher fees at another meeting soon.
Meanwhile, Mr Thomas Tan said his team would just focus on setting things right if it turned out to be a simple case of bad judgment on the part of the previous councils.
‘If it is proven that this current state of finances is due to ignorance or a bad judgement call, personally, I may try to convince owners to let it go and move on.’
Source : Straits Times - 8 Dec 2007
ALLGREEN Properties of Singapore is set to move into China
ALLGREEN Properties of Singapore is set to move into China in a big way with seven commercial and residential developments together with Hong Kong publicly listed companies Kerry Holdings and Kerry Properties. All the companies are controlled by Malaysian tycoon Robert Kuok.
The projects, which have a total investment amount of 29.3 billion yuan (S$5.73 billion), will be in the cities of Hangzhou, Chengdu, Qinhuangdao and Shenyang.
In a statement released yesterday, Allgreen said that this was in line with the group’s strategy to expand regionally, especially in China, which it views as a ‘long-term growth market’ providing ‘growth and recurrent income’.
Allgreen said: ‘In addition, the group will also be able to better allocate assets to ride out any downturn in the Singapore economy.’
The projects will mostly be residential but hotel, offices and commercial properties can also be expected. These projects also represents the group’s fourth investment in China.
Allgreen appointed Savills while Kerry Properties appointed DTZ Debenham Tie Leung to carry out valuations of the sites and the agreed property value was about 8.64 billion yuan.
Based on the agreed property value, the outstanding land cost and the non-property net asset value of the joint venture companies, the aggregate consideration payable by Allgreen for its acquisition of the equity interests in the joint venture is estimated to be about 967 million yuan.
Allgreen said that the group will fund the project by internal funds and/or external borrowings.
The statement also noted that the group’s aggregate maximum total investment amount in the joint venture is 6.98 billion yuan, representing about 96.2 per cent of its latest net tangible assets as at Dec 31, 2006.
No development time frame was given for the projects.
There is a mixed-use development planned, comprising hotel, offices, retail podiums and apartments on a 67,374 sq m site near West Lake in Hangzhou with a total investment amount of 5.34 billion yuan and Allgreen will hold a 10 per cent stake.
Also in Hangzhou will be a residential development on a 104,521 sq m site at Xiacheng District with a total investment amount of 1.83 billion yuan, of which Allgreen will hold a 35 per cent stake.
Another residential development is slated for Chengdu’s Hi-Tech Industrial Development Zone. To be built on a 46,130 sq m site, it will have a total investment amount of 1.38 billion yuan, of which Allgreen will have a 25 per cent stake.
Allgreen will also hold a 25 per cent stake in a second residential development on a 38,617 sq m site in Chengdu’s Hi-Tech Industrial Development Zone with a total investment amount of 1.16 billion yuan.
In Qinhuangdao, Allgreen will hold a 10 per cent stake in a mainly residential development on a 113,393 sq m site in the West Section of Hebei Street, Haigang District with an investment amount of 2.2 billion yuan.
Also in Qinhuangdao is another residential development on a 92,250 sq m site at the West Section of Hebei Street, Haigang District with an investment amount of 1.35 billion yuan, of which Allgreen will have a 10 per cent stake.
A mixed-use development has been planned for the 172,694 sq m site on the East Side of Qingnian Street, Shenhe District in Shenyang with a total investment amount of 16 billion yuan. Allgreen will take a 30 per cent stake in this project.
Source : Business Times - 7 Dec 2007
The projects, which have a total investment amount of 29.3 billion yuan (S$5.73 billion), will be in the cities of Hangzhou, Chengdu, Qinhuangdao and Shenyang.
In a statement released yesterday, Allgreen said that this was in line with the group’s strategy to expand regionally, especially in China, which it views as a ‘long-term growth market’ providing ‘growth and recurrent income’.
Allgreen said: ‘In addition, the group will also be able to better allocate assets to ride out any downturn in the Singapore economy.’
The projects will mostly be residential but hotel, offices and commercial properties can also be expected. These projects also represents the group’s fourth investment in China.
Allgreen appointed Savills while Kerry Properties appointed DTZ Debenham Tie Leung to carry out valuations of the sites and the agreed property value was about 8.64 billion yuan.
Based on the agreed property value, the outstanding land cost and the non-property net asset value of the joint venture companies, the aggregate consideration payable by Allgreen for its acquisition of the equity interests in the joint venture is estimated to be about 967 million yuan.
Allgreen said that the group will fund the project by internal funds and/or external borrowings.
The statement also noted that the group’s aggregate maximum total investment amount in the joint venture is 6.98 billion yuan, representing about 96.2 per cent of its latest net tangible assets as at Dec 31, 2006.
No development time frame was given for the projects.
There is a mixed-use development planned, comprising hotel, offices, retail podiums and apartments on a 67,374 sq m site near West Lake in Hangzhou with a total investment amount of 5.34 billion yuan and Allgreen will hold a 10 per cent stake.
Also in Hangzhou will be a residential development on a 104,521 sq m site at Xiacheng District with a total investment amount of 1.83 billion yuan, of which Allgreen will hold a 35 per cent stake.
Another residential development is slated for Chengdu’s Hi-Tech Industrial Development Zone. To be built on a 46,130 sq m site, it will have a total investment amount of 1.38 billion yuan, of which Allgreen will have a 25 per cent stake.
Allgreen will also hold a 25 per cent stake in a second residential development on a 38,617 sq m site in Chengdu’s Hi-Tech Industrial Development Zone with a total investment amount of 1.16 billion yuan.
In Qinhuangdao, Allgreen will hold a 10 per cent stake in a mainly residential development on a 113,393 sq m site in the West Section of Hebei Street, Haigang District with an investment amount of 2.2 billion yuan.
Also in Qinhuangdao is another residential development on a 92,250 sq m site at the West Section of Hebei Street, Haigang District with an investment amount of 1.35 billion yuan, of which Allgreen will have a 10 per cent stake.
A mixed-use development has been planned for the 172,694 sq m site on the East Side of Qingnian Street, Shenhe District in Shenyang with a total investment amount of 16 billion yuan. Allgreen will take a 30 per cent stake in this project.
Source : Business Times - 7 Dec 2007
Property players are likely to zoom straight in on the handful of land parcels that are more centrally located
DEVELOPERS, and eventually homebuyers, can take their pick from 21 plots that the Government will release for private housing between now and June.
Property players, however, are likely to zoom straight in on the handful of land parcels that are more centrally located, industry experts say.
At the top of the list is the multi-use ‘white site’ bounded by Ophir Road, Beach Road and Rochor Road. The property sits next to Parkview Square and is a stone’s throw from Raffles Hospital and the Bugis MRT Station.
The sale of this 2.74ha plot will ‘kick-start the development of the… Rochor Road/
Ophir Road corridor’, linking Marina Centre to the Bugis area, the Ministry of National Development (MND) said yesterday.
The site, which will be launched for sale in June, must have some area set aside for offices and hotels, but the rest of the space can be put to other uses such as residential.
Bids will likely come in at $750 to $850 per sq ft per plot ratio (psf ppr) for this site, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.
Apart from this plum plot, there are a few other attractive residential sites, consultants say.
One is a new site at the corner of Woodleigh Close and Upper Serangoon Road, next to the Blossoms@Woodleigh condominium. It is near the yet-to-be-opened Woodleigh MRT Station on the North-East Line.
About 270 homes can be built on the 1.07ha plot, to be launched for sale in April.
Another choice site is at the junction of Lorong 2 Toa Payoh and Lorong 3 Toa Payoh, within walking distance of the Braddell MRT Station.
This 1.4ha site can host 535 homes and will be put up for sale in February. It was previously on the reserve list for developers to indicate interest, but it saw no takers. It has now been moved to the confirmed list to be launched at a fixed date.
Mr Li Hiaw Ho, the executive director of CB Richard Ellis research, picked out two more sites as being among the ‘best of the crop’.
The first, at Bishan Street 14, has an area of 1.2ha and can host a 535-unit project.
The other is a 1.19ha site at New Upper Changi Road.
These four residential sites may fetch prices in the range of $400 to $600 psf of potential gross floor area, Mr Li estimated.
Mr Mak has noted, however, that apart from the Woodleigh Close site, which is new, the other plots have been available for some time on the Government’s reserve list.
Reserve list plots will not be launched for sale unless a developer comes forward to bid for them. Usually, choice plots on the reserve list will move quickly.
Those that remain to be ‘recycled’ for the next round of land sales are generally less attractive.
This time, however, the ‘recycled’ plots are quite plum, said Mr Mak.
If even these sites cannot find takers, ‘maybe developers already have enough on their plates’, he said.
In that case, perhaps the Government is offering more sites than the market is ready to absorb, he suggested.
For private housing alone, the MND has added 12 new sites to its land sales programme, including the Woodleigh Close plot.
Others include sites at Choa Chu Kang Drive, Tampines Avenue 1, Upper Changi Road North, Chestnut Avenue, Upper Thomson Road, Sengkang West Avenue and Sembawang Road.
There are also three executive condo sites, as well as a plot for landed homes at Sembawang Greenvale Phase 2. This landed parcel will be put up for auction in February to cater to smaller investors.
Outside land sales, the Government will also offer about 110 private housing units, including 90 service apartments at one-north. It will also provide 120,000 sq m of commercial space.
Source : Straits Times - 7 Dec 2007
Property players, however, are likely to zoom straight in on the handful of land parcels that are more centrally located, industry experts say.
At the top of the list is the multi-use ‘white site’ bounded by Ophir Road, Beach Road and Rochor Road. The property sits next to Parkview Square and is a stone’s throw from Raffles Hospital and the Bugis MRT Station.
The sale of this 2.74ha plot will ‘kick-start the development of the… Rochor Road/
Ophir Road corridor’, linking Marina Centre to the Bugis area, the Ministry of National Development (MND) said yesterday.
The site, which will be launched for sale in June, must have some area set aside for offices and hotels, but the rest of the space can be put to other uses such as residential.
Bids will likely come in at $750 to $850 per sq ft per plot ratio (psf ppr) for this site, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.
Apart from this plum plot, there are a few other attractive residential sites, consultants say.
One is a new site at the corner of Woodleigh Close and Upper Serangoon Road, next to the Blossoms@Woodleigh condominium. It is near the yet-to-be-opened Woodleigh MRT Station on the North-East Line.
About 270 homes can be built on the 1.07ha plot, to be launched for sale in April.
Another choice site is at the junction of Lorong 2 Toa Payoh and Lorong 3 Toa Payoh, within walking distance of the Braddell MRT Station.
This 1.4ha site can host 535 homes and will be put up for sale in February. It was previously on the reserve list for developers to indicate interest, but it saw no takers. It has now been moved to the confirmed list to be launched at a fixed date.
Mr Li Hiaw Ho, the executive director of CB Richard Ellis research, picked out two more sites as being among the ‘best of the crop’.
The first, at Bishan Street 14, has an area of 1.2ha and can host a 535-unit project.
The other is a 1.19ha site at New Upper Changi Road.
These four residential sites may fetch prices in the range of $400 to $600 psf of potential gross floor area, Mr Li estimated.
Mr Mak has noted, however, that apart from the Woodleigh Close site, which is new, the other plots have been available for some time on the Government’s reserve list.
Reserve list plots will not be launched for sale unless a developer comes forward to bid for them. Usually, choice plots on the reserve list will move quickly.
Those that remain to be ‘recycled’ for the next round of land sales are generally less attractive.
This time, however, the ‘recycled’ plots are quite plum, said Mr Mak.
If even these sites cannot find takers, ‘maybe developers already have enough on their plates’, he said.
In that case, perhaps the Government is offering more sites than the market is ready to absorb, he suggested.
For private housing alone, the MND has added 12 new sites to its land sales programme, including the Woodleigh Close plot.
Others include sites at Choa Chu Kang Drive, Tampines Avenue 1, Upper Changi Road North, Chestnut Avenue, Upper Thomson Road, Sengkang West Avenue and Sembawang Road.
There are also three executive condo sites, as well as a plot for landed homes at Sembawang Greenvale Phase 2. This landed parcel will be put up for auction in February to cater to smaller investors.
Outside land sales, the Government will also offer about 110 private housing units, including 90 service apartments at one-north. It will also provide 120,000 sq m of commercial space.
Source : Straits Times - 7 Dec 2007
THE Law Ministry unveiled proposed new changes
THE Law Ministry unveiled proposed new changes yesterday meant to speed up disciplinary hearings for errant lawyers - a process that often drags on for 15 months.
The move is among a raft of measures aimed to bolster public confidence in the legal profession, the Law Ministry said in a press release yesterday.
‘Such confidence requires a sound disciplinary system for errant lawyers,’ it said in the wake of a report from the Committee to Develop the Singapore Legal System, which recommended the changes.
The changes would see a single person - who would either be a retired judge, ex-judicial commissioner or Senior Counsel - probe cases brought against lawyers accused of violating professional codes of conduct. The system would replace a four-member committee which, because of scheduling problems, bogged down the disciplinary process, according to the committee chaired by Justice V.K. Rajah.
The average time to complete hearings has doubled from 7.5 months in 2002 to 15.4 months last year.
But the Law Society, which represents Singapore’s lawyers, expressed concern over the change.
‘In most jurisdictions, a lawyer is judged by a panel made up by three of his peers,’ it said in a media release. ‘The society is of the view that… it should continue to have three legally qualified persons.’
The proposed new rules come as more lawyers find themselves on the wrong side of the law.
Complaints against lawyers resulted in 28 probes completed last year, more than twice the number from a year earlier. One of the probes involved two lawyers.
Six lawyers were acquitted, nine were reprimanded or fined by their peers and 14 referred to a Court of Three Judges - the highest level of disciplinary action.
Complaints against lawyers covered a range of issues - from offering a commission for a real-estate case to making a false declaration.
Chief Justice Chan Sek Keong said in January there was a pressing need to revise the disciplinary system.
As it stands, errant lawyers are probed by a disciplinary committee comprising two lawyers, a representative from the Attorney-General’s Office and one lay person, who are appointed by the Chief Justice.
The committee can either refer the accused lawyer to the Court of Three Judges - if the matter is serious - or recommend a fine or reprimand by the Law Society.
But the four-member composition often made it difficult to schedule early hearings.
The report released yesterday acknowledged reservations to the streamlined process. But it should help many innocent lawyers who often have to wait months to see their cases decided, it said.
‘A not inconsiderable number of lawyers are acquitted of any misconduct at the disciplinary committee stage.
‘For them, justice is denied when hearings are unreasonably delayed,’ said the report.
Under the new rules, the penalties against errant lawyers will also be increased.
The Law Society may impose fines of up to $20,000 in less serious cases. The Court of Three Judges will also be empowered to fine lawyers up to $100,000, in addition to suspending their licences or striking them off.
‘The Government views these recommendations as positive moves,’ said the Law Ministry.
Source : Straits Times - 7 Dec 2007
The move is among a raft of measures aimed to bolster public confidence in the legal profession, the Law Ministry said in a press release yesterday.
‘Such confidence requires a sound disciplinary system for errant lawyers,’ it said in the wake of a report from the Committee to Develop the Singapore Legal System, which recommended the changes.
The changes would see a single person - who would either be a retired judge, ex-judicial commissioner or Senior Counsel - probe cases brought against lawyers accused of violating professional codes of conduct. The system would replace a four-member committee which, because of scheduling problems, bogged down the disciplinary process, according to the committee chaired by Justice V.K. Rajah.
The average time to complete hearings has doubled from 7.5 months in 2002 to 15.4 months last year.
But the Law Society, which represents Singapore’s lawyers, expressed concern over the change.
‘In most jurisdictions, a lawyer is judged by a panel made up by three of his peers,’ it said in a media release. ‘The society is of the view that… it should continue to have three legally qualified persons.’
The proposed new rules come as more lawyers find themselves on the wrong side of the law.
Complaints against lawyers resulted in 28 probes completed last year, more than twice the number from a year earlier. One of the probes involved two lawyers.
Six lawyers were acquitted, nine were reprimanded or fined by their peers and 14 referred to a Court of Three Judges - the highest level of disciplinary action.
Complaints against lawyers covered a range of issues - from offering a commission for a real-estate case to making a false declaration.
Chief Justice Chan Sek Keong said in January there was a pressing need to revise the disciplinary system.
As it stands, errant lawyers are probed by a disciplinary committee comprising two lawyers, a representative from the Attorney-General’s Office and one lay person, who are appointed by the Chief Justice.
The committee can either refer the accused lawyer to the Court of Three Judges - if the matter is serious - or recommend a fine or reprimand by the Law Society.
But the four-member composition often made it difficult to schedule early hearings.
The report released yesterday acknowledged reservations to the streamlined process. But it should help many innocent lawyers who often have to wait months to see their cases decided, it said.
‘A not inconsiderable number of lawyers are acquitted of any misconduct at the disciplinary committee stage.
‘For them, justice is denied when hearings are unreasonably delayed,’ said the report.
Under the new rules, the penalties against errant lawyers will also be increased.
The Law Society may impose fines of up to $20,000 in less serious cases. The Court of Three Judges will also be empowered to fine lawyers up to $100,000, in addition to suspending their licences or striking them off.
‘The Government views these recommendations as positive moves,’ said the Law Ministry.
Source : Straits Times - 7 Dec 2007
THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment
THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment, even as lawyers say fees paid to agents have been going up.
The lawyers note that lawyers who pay such referral fees get a lucrative payoff. Their comments come in the wake of the suspension of three lawyers on Tuesday.
They had been caught offering referral fees to a private investigator pretending to be a property agent. The private eye was hired by unknown lawyers.
But even as the Society said it is moving to tackle these issues - touting and entrapment - many lawyers say its task is fraught with difficulties.
Under the law, lawyers are guilty of misconduct if they engage in touting practices and pay an agent to refer a client to them in return for a fee.
But lawyers told The Straits Times it is prevalent.
The going rate for such fees now is about $500 - from about $150 five years ago - for each conveyancing file which brings in about $2,000 per transaction to the lawyer.
A lawyer with 10 years’ experience said: ‘Each property file is worth about $2,000 and if an agent can bring in 20 files a month, that’s easily $30,000 - enough to cover rental and staff costs.
‘The agents will tell you: ‘I have a conveyancing case, how much will you pay me?’’
There is thus significant money to be made, especially if the agent can bring in the cases in bulk.
The Law Society said moves are already afoot to tackle touting. A spokesman said the practice is difficult to detect, especially when there is ‘an absence of evidence from the parties concerned’.
But an ad-hoc committee had been appointed to see if ‘current detection and enforcement procedures could be streamlined and enhanced’.
The committee will also look into the issue of lawyers ‘privately engaging investigators to detect suspected unethical conduct’, the spokesman said.
A decision to set up the panel came in the wake of a failed attempt in late 2006 by lawyer Rayney Wong to stop a disciplinary committee which had investigated him for touting.
In throwing out his request at that time, Justice V.K. Rajah also called on the Law Society to deal with the problem of lawyers hiring private investigators to entrap competitors they suspect of using touts to drum up business.
Yesterday, the Law Society’s spokesman said that once the recommendations of the committee are out, it will tackle the question of whether it should take on a greater investigative role.
Many lawyers see this as a solution to touting. But they are split over the issue of an absolute ban on referral fees.
The sole proprietor of a law firm and a litigator of 10 years said: ‘I accept that it is an offence, but to me it’s business. If an agent brings in business for you, wouldn’t you give him a commission? A car salesman would be paid a cut for every car he sells. But in our case, it is against the law.’
Mr Mark Goh, of Mark Goh & Co, disagreed. ‘The legal profession cannot be equated with a commercial company…We owe a duty to our clients and society,’ he said.
Allowing such fees can open another can of worms, said sole-proprietor Patrick Tan of Patrick Tan & Associates. ‘There’s nothing to stop another lawyer from handing out a higher fee to an agent to get the file. If one gives $200, another might give $500.
‘Where does it stop?’
Source : Straits Times - 7 Dec 2007
The lawyers note that lawyers who pay such referral fees get a lucrative payoff. Their comments come in the wake of the suspension of three lawyers on Tuesday.
They had been caught offering referral fees to a private investigator pretending to be a property agent. The private eye was hired by unknown lawyers.
But even as the Society said it is moving to tackle these issues - touting and entrapment - many lawyers say its task is fraught with difficulties.
Under the law, lawyers are guilty of misconduct if they engage in touting practices and pay an agent to refer a client to them in return for a fee.
But lawyers told The Straits Times it is prevalent.
The going rate for such fees now is about $500 - from about $150 five years ago - for each conveyancing file which brings in about $2,000 per transaction to the lawyer.
A lawyer with 10 years’ experience said: ‘Each property file is worth about $2,000 and if an agent can bring in 20 files a month, that’s easily $30,000 - enough to cover rental and staff costs.
‘The agents will tell you: ‘I have a conveyancing case, how much will you pay me?’’
There is thus significant money to be made, especially if the agent can bring in the cases in bulk.
The Law Society said moves are already afoot to tackle touting. A spokesman said the practice is difficult to detect, especially when there is ‘an absence of evidence from the parties concerned’.
But an ad-hoc committee had been appointed to see if ‘current detection and enforcement procedures could be streamlined and enhanced’.
The committee will also look into the issue of lawyers ‘privately engaging investigators to detect suspected unethical conduct’, the spokesman said.
A decision to set up the panel came in the wake of a failed attempt in late 2006 by lawyer Rayney Wong to stop a disciplinary committee which had investigated him for touting.
In throwing out his request at that time, Justice V.K. Rajah also called on the Law Society to deal with the problem of lawyers hiring private investigators to entrap competitors they suspect of using touts to drum up business.
Yesterday, the Law Society’s spokesman said that once the recommendations of the committee are out, it will tackle the question of whether it should take on a greater investigative role.
Many lawyers see this as a solution to touting. But they are split over the issue of an absolute ban on referral fees.
The sole proprietor of a law firm and a litigator of 10 years said: ‘I accept that it is an offence, but to me it’s business. If an agent brings in business for you, wouldn’t you give him a commission? A car salesman would be paid a cut for every car he sells. But in our case, it is against the law.’
Mr Mark Goh, of Mark Goh & Co, disagreed. ‘The legal profession cannot be equated with a commercial company…We owe a duty to our clients and society,’ he said.
Allowing such fees can open another can of worms, said sole-proprietor Patrick Tan of Patrick Tan & Associates. ‘There’s nothing to stop another lawyer from handing out a higher fee to an agent to get the file. If one gives $200, another might give $500.
‘Where does it stop?’
Source : Straits Times - 7 Dec 2007
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