Saturday, April 7, 2007

Building costs rise for developers due to higher demand, better designs: analysts

Construction costs for developers have been going up.According to some estimates, the jump was as much as 20% last year.

Industry watchers say that is mainly because of the increased demand for building services from major new projects like the integrated resorts.

Ku Swee Yong, Director of Savills Singapore, said: “There are several mega projects that Singapore is under-taking, in particular the two $5 billion investments in the casino integrated resorts, and several government infrastructure projects. All these would be fighting for the same pool of resources such as manpower, scaffolding, cranes.”

Major developer City Developments noted in a recent report that its construction costs increased in the past year, due to higher demand because of the more active property market.

Building costs aside, architect and design fees have also been on the uptrend.

This, as developers rope in famous international designers - such as Dutch architect Rem Koolhaas - to come up with unique designs to attract increasing-savvy home buyers.

These architects can command fees which are at least 50% higher than those of their local counterparts.

Wallace Chu, DBS Vickers’ Assistant Vice President, said: “They want their projects to stand out, with the buyers becoming more internationalized - they’ve been travelling and they know more about design, and they get used to the international lifestyle. That will push them to go for high quality, and they may not accept those normal types of designs.”

But analysts say property developers can well afford the higher costs, thanks to the buoyant property market.

Wallace Chu said: “The current situation is that (home) prices continue to go up. So for developers who have bought land a little bit earlier, that increase in overall costing will be buffered by that (home) price increase. So the bottom-line should still be strong for developers.”

Private home prices rose 10.2% last year and are seen climbing by some 15% this year.

Source: Channel NewsAsia, 05 April 2007

Two CityDev projects get Green Mark Platinum awards

City Developments Ltd (CDL) has been conferred two BCA Green Mark Platinum awards by the Building and Construction Authority (BCA) for 2007.

CDL won the awards for its City Square Mall commercial development and its Oceanfront @ Sentosa Cove residential project. It is the first private developer to get a Green Mark Platinum award. Previously they have gone to public sector developments.

The 700,000 sq ft City Square Mall is a prototype eco-friendly, community-friendly mall projected to use almost 40 per cent less energy than a standard design.

A project must achieve 30 per cent energy and water savings and incorporate environmentally-sustainable building practices and innovative green features to be in the running for a Green Mark Platinum award. CDL has gained more green mark awards than any other private developer - 14 so far.‘

Minimising the impact of our business on the environment has always been an integral part of CDL’s corporate mission,’ said managing director Kwek Leng Joo. ‘We have been adopting the green building approach since 2001 and we are glad that our efforts are in line with the government’s vision to be a socially responsible, environmentally conscious global city.’

Source: The Business Times, 06 April 2007

Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out

Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out - the first time such a move has been needed for private homes in more than 10 years.

The dramatic rush, which even caught the marketing agents by surprise, was triggered when the 95 units in Thomson V were released at 3pm on Tuesday. Within four hours, more than 300 cheques had poured in, despite minimal advertising.

Marketing agent Huttons Real Estate Group opted to ‘draw lots for the units that had more than one interested buyer’, said its project director, Ms Peggy Ngiam, told The Straits Times.

‘The buyers had already identified the units they wanted, and we had to draw lots for most of the apartments.’

The ballot was a further indication, like the recent overnight queues and blank cheques, of the intense demand for new homes, said property experts.

‘It is yet another piece of the puzzle to show that the market has got a demand not filled by the current home supply,’ said Mr Ku Swee Yong, the director of marketing and business development at consultancy Savills

Balloting for apartment units has not been been seen here for over a decade but the practice is unlikely to become more widespread, said Mr Peter Ow, the executive director of residential marketing at Knight Frank.

‘It is a very orderly and very fair sales method, but it is unlikely that more developers will start using it because the prices have to be fixed beforehand,’ he added. In a rising market, many developers choose to release units in phases and raise prices progressively for each successive phase.

Mr Ow said the first project to be balloted here was the Merasaga, near Holland Village, which was snapped up within a day in 1993. Buyers had to draw lots for queue numbers.

The object of the latest frenzy, Thomson V in Sin Ming Road, comprises two four-storey residential towers, one freehold, the other 99-year leasehold. It is part of a mixed project that also has 60 shops still up for sale.

It is being developed by boutique firm Macly Group, which also developed Soho 188 in Race Course Road.

The keen interest for Thomson V was ‘a bit surprising’ because of its relatively high per sq ft (psf) prices and limited pre-marketing activities, said Ms Ngiam.

The development’s 71 freehold units went for an average of $880 psf, while the leasehold units fetched $760 psf on average. The highest price achieved was $989 psf.

There are no comparable new projects in the vicinity, but a market watcher said he would expect to pay slightly more than $700 psf for a new freehold development in the area.

However, Thomson V’s units are unusually small, which means they would still be affordable.

The apartments, mostly one-bedroom units, range in size from 355 sq ft to 1,098 sq ft. A typical unit would cost about $377,000.

But there was also little buzz about the property. Huttons had placed a few four-line advertisements in the classified ads, but project brochures were distributed to property agents only last Friday.

And Thomson V’s showflat and price lists were only made available on Tuesday afternoon itself.

Mr Ku of Savills said the strong demand was in part because there are few projects on the market with small units catering to singles or retirees.

There have also not been many new launches in this area or within this price bracket, he added.

Source: The Straits Times, 06 April 2007

Sand cost: How much will filter down to home owners?

With prices of sand, granite and concrete now costing more than twice what they used to be, home buyers and home owners should expect to pay more for renovation and building work.

But exactly how much more will depend on the deal that they signed with their contractor and their relationship with him.

The price hike was triggered by Indonesia’s ban on the export of land sand on Feb 5, which led to Singapore turning to countries further afield for its supplies.

A few weeks after that, Indonesia detained barges carrying granite to Singapore, disrupting the supply of another basic construction material.

The price of sand used to be roughly $20 per tonne. Now, the Building and Construction Authority (BCA) is releasing sand from its stockpile at a price of $60 per tonne, and granite at $70 per tonne to stabilise supply.

The price of concrete - which is made with sand, cement and granite - has risen from about $70 per cubic metre to about $200 now.

As a result, the cost of renovating a five-room flat has risen by about $1,000, estimates renovation contractor Lim Ah Bah, who is also an adviser to the Singapore Renovation Contractors and Material Suppliers Association.

To build a $2.5 million bungalow from scratch will require more raw materials - with the increase in cost weighing in at about $100,000.

But whether a home owner bears the cost will depend on factors like timing. Property owners who signed fixed-price deals with their contractors before the disruptions started are legally not obliged to pay more.

Still, some like engineer Siow Phek Chuan, 28, chose to do so out of goodwill.

Mr Siow hired a renovation firm in early February to do up the executive flat in Sengkang he had just bought.

A few weeks later, his contractor, Mr Lim , approached him for help, as the price of sand needed for the $35,000 project had risen by about $750.

Mr Siow offered to pay an extra $300 anyway. He told The Straits Times: ‘My renovation would be done up better if I have a very good relationship with my contractor. A few hundred dollars is not a big issue.’

However, the cost increase is not dealt with so amicably in every instance.

According to a Straits Times check with more than 10 renovation contractors and building contractors, it is more common for home owners and developers who had sealed fixed-price deals before the hikes to refuse to pay a single cent more.

With Singapore’s current building boom unlikely to slow, the big question now is who will ultimately pay the bill.

BCA estimates that the increase in prices of sand and granite will raise total construction cost of building projects by 7 per cent on average.

This works out to a 2 per cent increase in development cost - of which construction cost is one component. And this will eventually filter down to home buyers and home owners.

Renovation contractors and construction firms polled say they are now more likely to push for a clause in their contracts that takes into account the fluctuation of raw material prices. If that is not possible, they will tender for jobs at higher prices to prepare for similar hikes in the future.

Private developers mostly stayed silent when asked whether the future cost increases would be passed on to home buyers, but analysts reckon that the answer is almost certainly a yes.

According to property firm Knight Frank’s director of research and consultancy, Mr Nicholas Mak, most of the increase in cost can be easily passed on to consumers in a booming private property market.

And this sector has been anything but sluggish over the previous year, with private home prices growing 4.6 per cent between January and March, and 10.2 per cent for the whole of last year.

Before the ban, Singapore imported about six to eight million tonnes of sand from Indonesia annually.

Singapore also imports about 10 million tonnes of granite aggregate from Indonesia a year.

Now, contractors are tapping supplies in countries like Malaysia, China and Vietnam.

Contractors also say they are getting frequent offers from brokers or ‘middlemen’ hoping to make a quick buck by trying to hook them up with suppliers from new sources such as Myanmar, Cambodia and even Australia.

Source: The Straits Times, 07 April 2007

Friday, April 6, 2007

Economic Spillovers From IDR, Singapore A Boon To Local Developers

Economic Spillovers From IDR, Singapore A Boon To Local Developers

JOHOR BAHARU, April 5 (Bernama) -- Local property developers stand to gain tremendously from the economic development in the Iskandar Development Region (IDR), as well as the spillover benefits from Singapore, Gamuda Land chief operating officer, Steven Chu, said today.

He said the IDR, being the engine of growth under the South Johor Development Corridor and Nusajaya, the single largest contiguous development as the nucleus of IDR, was poised to be a regional and international economic hub, which would create more than 80,000 new jobs over the next 20 years.

"In addition, we can enjoy the spillover benefits from Singapore's integrated resort and casino, which is expected to create another 100,000 of jobs and opportunities," he said.

Chu was one of the speakers at a two-day IDR conference on Planning and Investment Opportunities in IDR organised by the Institution of Surveyors Malaysia (Johor) and the Johor State Economic Planning Unit.

He said the liberalisation of Foreign Investment Committee policies, especially on foreign ownership, coupled with the abolition in the Real Property Gains Tax and the current steady bank interest rates, would certainly spur foreign direct investment and create a new demand for properties and boost property values in Johor.

Gamuda became part of the IDR through its strategic partnership with the master developer of Nusajaya, UEM Land Sdn Bhd to jointly develop Horizon Hills, a residential and commercial development.

Chu said the partnership, coupled with the strong support from the government, had enable Gamuda and UEM to leverage on each other's strengths, experties and experiences to deliver a premier lifestyle residential development within the IDR.

"UEM has a challenging vision for Nusajaya, a key component and the catalyst for development of the IDR in south Johor. It is certainly going to be a challenge to realise this vision, which is a crucial part of the Ninth Malaysia Plan.

"We at Gamuda Land together with our partner UEM Land are highly committed to ensure the success of Horizon Hills and eventually the IDR," he said.


Ritz Carlton to open new resort on Bintan

Ritz Carlton to open new resort on Bintan

The Jakarta Post, Fadli, Batam

Ritz Carlton is to open a new resort in the Bintan Resort Tourism Zone on Bintan island in Riau Islands province by the end of 2008 at a total cost of US$65 million.

The 77,000-square meter resort, which will boast 60 villas, is expected to attract more tourists to the area, Bintan Resort Development Corp.'s public relations manager Nia Firtica said Tuesday in Batam.

The resort, the construction of which will start in July, will also have a conference center that can accommodate 600 people.

It is expected to be fully operational by the end of next year and will create 200 new jobs.

Nia said that Ritz Carlton would manage the resort, which would be built by PT Pacific Palace Jakarta.

Ritz Carlton currently manages 63 hotels throughout the world, one of which is located in Jakarta and one in Bali. It is developing 35 more hotels in a number of different countries.

Besides the Ritz Carlton resort, Malaysian property company Landmark Holdings is also planning to build a large resort on the island. "The construction of the resort, which will be called Waterfront City, will begin next year," Nia said.

According to Nia, the Ritz Carlton and other tourist projects had been encouraged by the development of the Singapore Integrated Resort, which was due to open on the island in 2010.

"The investors' main reason for developing projects here is the steady increase of the number of tourists visiting the island," Nia explained.

At least 333,000 tourists from Singapore, Malaysia, Thailand, Korea, India and the Middle East visit the island annually. The Bintan Resort Tourism Zone was inaugurated in 1996.

With a total area of 23,000 hectares, the special resort zone, which is less than an hour by ferry from Singapore, so far houses five hotels and resorts built at a total cost of $4.8 billion, and employs 4,500 workers.(04)

Tax changes planned for Aussie REITs

Tax changes planned for Aussie REITs

(LONDON) The Australian government plans changes to the tax treatment of Australian listed property trusts (LPTs) that will boost their competitiveness abroad, an Australian trade magazine said yesterday.

According to a report in Financial Standard, the Minister for Revenue and Assistant Treasurer Peter Dutton said plans were afoot to provide LPTs - the Australian version of real estate investment trusts (REITs) - a means for rolling over some of their capital gains tax (CGT) liabilities.

'This may have implications for Australian REITs' expansion plans into Europe, as they will be better able to justify potential transactions to their investors on more attractive after-tax ROEs,' a note from investment bank JP Morgan said.

As well as providing a capital gains tax rollover for investors where there was a unit trust in place between a stapled group and its stapled entities, the planned changes would also ensure there were no tax triggers that might lead to the entire income of the interposed unit trust being treated as if it were a company.

'These proposals seek to improve the international competitiveness of stapled entities, such as Australian property trusts, and to facilitate their expansion into offshore markets,' Mr Dutton was quoted by the report as saying.

Cash-rich Australian property funds invested around US$6 billion in Europe last year, more than half of it in Germany, data from property services firm Jones Lang LaSalle showed last month.

Another US$3 billion each was invested in Asian and US property, fuelled by annual inflows into Australian property funds of about US$4 billion annually, Jones Lang said. - Reuters

Britain can avert property crash despite growing risks

Britain can avert property crash despite growing risks

Focus turns to business property market in UK amid US subprime crisis

(LONDON) A UK commercial property crash this decade is a growing possibility as borrowing costs rise and as a cold wind begins to blow through the white-hot market, but the risks are still small, despite growing nervousness.

The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year.

'There has to be a significant slowdown in returns but the scope for any sort of crash in the true sense of the word is limited,' Nick Tyrrell, head of research and strategy for European real estate at JPMorgan Asset Management, said.

As the US subprime mortgage crisis has unfolded, reminding investors of the risks attached to bricks and mortar, so the attention in Europe has turned to Britain's commercial property market, which is expected by property valuers and analysts to decelerate sharply after a protracted boom.

The broad consensus is for UK commercial property returns - which combine rental income and capital growth - to halve this year and to halve again next year, after three exceptional years in which the market averaged 18-19 per cent a year.

Rental income is expected to account for a greater share of future property returns, as prices stabilise or even ease and as interest rate rises make debt-funded purchases of UK property increasingly unprofitable.

The dangers are reflected in the UK property derivatives market, where spreads have fallen sharply this year and where zero capital growth was priced in for next year, traders said.

According to investment bank Eurohypo AG, capital returns on UK commercial property have averaged less than zero in only five years since 1971 - and four of those were during the country's last property crash in the early 1990s.

Capital preservation has also become more of an issue for some funds, in anticipation of a tougher investment climate. The Henderson UK Property Fund, for example, has switched its focus to higher-quality buildings in prime locations with prime tenants from slightly higher-yielding secondary property assets.

On the surface, the market appears increasingly vulnerable since average UK property yields have fallen below 5 per cent from more than 7 per cent in 2001 as property prices have boomed, while the Bank of England has raised rates to 5.25 per cent.

Yields on a property measure rental income relative to capital values.

In a note last month, Kelvin Davidson of independent forecaster Capital Economics said the threshold for UK property prices to begin falling was closer than commonly thought. Worse still, he said little was needed to trigger a crash, which he defined as a cumulative 10-15 per cent fall in property prices over three years.

One possible catalyst was for the gap between UK property yields and yields on 10-year UK government bonds to revert to 2005 levels by 2010, by moving to a positive 120 basis points (bps) from about minus 20 bps, Mr Davidson calculated.

Another was for the property/gilt yield gap to widen by half as much and for yields on 10-year government bonds to rise to 5.25 per cent from 4.95 per cent and stay there, he said.

Neither scenario was wildly unrealistic and depended on the inflation outlook changing a little and economists factoring in more than just one more UK rate hike.

'The risk of a hard landing is non-negligible and, given that even small shifts in sentiment and/or interest rates could have such large effects, monetary policy holds an important key to the property market's future,' Mr Davidson said.

Nonetheless, Capital Economics's central forecast is for no meaningful falls in commercial property prices over the next four to five years, in line with the vast majority of other forecasters.

'We still think a significant correction is very unlikely,' said David Wiley, head of UK economics and forecasting at property services firm CB Richard Ellis (CBRE). 'A soft landing is our central view and beyond that it looks fairly steady.'

Mr Wiley said that CBRE was looking for total returns above 10 per cent this year and 6-7 per cent in 2008 and 2009, placing it above the consensus, according to Investment Property Forum. He also said he was not minded to change these forecasts in the absence of an external trigger, such as a marked deterioration in the US property market and economy.

Underpinning his confidence and that of others was the strength of the UK economy, which was fuelling tenant demand for office space and was also set to keep demand for retail and industrial space ticking along, even as new buildings went up.

London's office market, especially, was benefiting from the city's expansion as a global financial services hub.

'If the timing works out nicely you could actually accommodate a reasonable drifting out of (property) yields and still have robust property returns because rents are growing, and there is a fairly good chance that that will actually happen,' JPMorgan's Mr Tyrrell said. 'So you wouldn't get a decline in values, all you'd have is rising yields but rising rents at the same time.'

The alternative, he said, was for yields to remain flat or to continue falling as rents improved, risking 'a substantial decline in capital values several years out from now'. - Reuters

Spottiswoode Apt sets new benchmark

Spottiswoode Apt sets new benchmark

UOL's $79.5 million acquisition of Spottiswoode Apartment, announced late on Tuesday, works out to a unit land price of $732 per square foot per plot ratio including an estimated $167,000 development charge.

This is a new benchmark for the Neil Road/Cantonment Road area, says United Premas, which brokered the freehold collective sale and released unit land price details yesterday.

Based on a land cost of $732 per sq ft per plot ratio, UOL's breakeven cost for a new condo project will be about $1,050 psf, market watchers reckon.

The 38,878 sq ft freehold site is zoned for residential use with a 2.8 plot ratio - the ratio of potential maximum gross floor area to land area - and a 36-storey maximum height under Master Plan 2003.

The site can be redeveloped into a new condo of about 100 units averaging 1,200 sq ft.
Singaporeans queue for days before condo launch; private property prices soaring
The Associated PressPublished: April 6, 2007

SINGAPORE: Retired businessman Tan Phong is not only willing to fork out more than 1,000 Singapore dollars (US$660; euro500) per square foot for a condominium apartment, he will even queue overnight on the street just to get his dream unit.

Singapore's private property market is booming, and the rising prices have not dissuaded Singaporeans and foreigners alike from snapping up prime real estate. Some condominiums have sold out within the first few hours of opening.

Tan was first in line to purchase a unit in a yet-to-be-built condominium to be called Seafront @ Meyer, in the Marina Bay area, near where the city's first casino-resort will open in 2009.

He hoped for a unit on the 18th floor or higher in the 24-story building.

"The location is good and I want something that faces the sea," said Tan, 66. "I love the sea breeze and that's exactly why I want a unit here."

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Sales for the 300-unit Seafront started Friday, but Tan and at least 80 others have camped out on the street since Monday morning, equipped with folding chairs, sleeping bags, umbrellas, playing cards and bottles of water. Many of them were hired by housing agents to retain a spot at the front of the line.

"I only stayed on the first night," said Tan, who recruited four friends to take turns standing in line for him. "It's very uncomfortable."

The condominium's developer, CapitaLand Limited — Southeast Asia's largest property developer — said the units will cost between S$1,400 (US$925; euro689) to S$1,800 (US$1,190; euro887) per square foot.

Singapore's Business Times reported last week the development's sea-facing penthouses may cost up to S$2,200 (US$1,455; euro1,083) per square foot, with one to be priced at S$9 million (US$5.95 million; euro4.5 million).

With Singapore's economy growing at a 7.9 percent pace, demand for such luxury apartments is driven by a variety of reasons, from people seeking comfort and status to a savvy investment.

Singapore real estate has also the interest of foreign buyers, according to real estate firm CB Richard Ellis Research.

Even though prices have risen here, they are still far lower than in cities like New York, Tokyo and London. Ultra high-end property prices in London can be as high as US$5,900 per square foot, according to research published last year by CB Richard Ellis Group Inc.

Several new projects away from Singapore's city center are being priced 50 percent more than what they would have fetched a year ago, led by strong interest in high-end homes, according to Li Hiaw Ho, an executive director with the firm.

Condo prices in the nonprime areas of central Singapore rose 2.9 percent in the first quarter following a 2.2 percent rise in the fourth quarter of 2006, according to the government's flash estimate released Monday.

On the broader market, private property prices in Singapore rose 4.6 percent from the fourth quarter after rising 3.8 percent quarter-on-quarter in the last three months of 2006.

Singapore's property market stagnated in the wake of the Asian financial crisis, lagging other Asian cities like Hong Kong, but signs of a recovery began emerging in 2005, helped by the government relaxing rules such as borrowing limits.

The market got a major lift from luxury developments like One Shenton, where hundreds of units were sold for about S$2,000 (US$1,322; euro985) per square foot at a soft launch in January this year.

An Orchard Turn development broke a record for residential properties in March, when penthouse units sold for more than S$4,000 (US$2,645; euro1,970) per square foot.

"Barring any unforeseen circumstances, it is likely that residential prices will rise by a total of 10 to 15 percent for the whole year, led by high-end projects," Li said in a statement.

About 85 percent of Singaporeans live in public housing built by the government's Housing and Development Board. Private developers compete to provide housing for the remaining 15 percent of Singapore nationals, along with the sizable foreign population.

Golden outlook for year

Golden outlook for year

Raymond Wang

Friday, April 06, 2007

Market watchers expect fiscal 2007 to be another bumper year for property giant Cheung Kong (Holdings) (0001) on the back of relatively lower land costs.
"Coupled with 60 percent of fiscal 2007 completions pre-sold, Cheung Kong continues to have the lowest earnings risk among developers," investment bank JPMorgan said in a research report.

The Hong Kong's largest developer by sales sold about 4,000 homes in fiscal 2006.

Hong Kong developers do not book revenues from presales of flats until projects are completed.

Cheung Kong said contribution from property sales for the financial year ended December 31, 2007, will be mostly derived from the sale of residential units of The Apex, Sausalito, Le Point and Central Park Towers Phase 1 in Hong Kong and other property projects in the mainland.

Due to acquisition of some low-cost land bank properties, Cheung Kong probably is the only developer which could see improvement in development margins in the coming two years, Merrill Lynch said.

"Profit is protected as some of the costs are low, " Cheung Kong deputy chairman Victor Li Tzar-kuoi said.

"We are optimistic about fiscal 2007-08 results, very relaxed and confident," he said after the company recently reported a 29 percent jump year on year in net profit to HK$18.1 billion for the year ended December 31, 2006.

Cheung Kong' s land bank in Hong Kong is about 45.8 million square feet, sufficient for the next few years, Li said.

He said the prospects for the property market in Hong Kong are good, underpinned by robust economic growth and strong purchasing power from homeowners.

"Most of the buyers are end users and investors. There does not seem to be too many problems with speculators," he said, adding that both the primary and secondary markets have been very strong.

Cheung Kong chairman Li Ka-shing expects gross domestic product in Hong Kong to be about 5-6 percent this year. "The fast pace of growth in the mainland would also propel our growth," he added.

Cheung Kong's earnings from property sales climbed 69 percent to HK$5.6 billion in 2006 from HK$3.3 billion the previous year, mainly driven by improved margin.

Core Pacific-Yamaichi analyst Andy So estimated that The Legend, the developer's upscale project at Jardine's Lookout, had a pretax margin of about 60 percent, while the Metro Town residential project atop Tiu Keng Leng MTR station had about 50 percent.

Apart from its Hong Kong land bank of 6.2 million sqft, which will provide 8,600 homes for sale after fiscal 2009, Cheung Kong is also beefing up its foothold in Singapore, Britain and China.

"While it still takes time to prove the success of a regional expansion strategy, this could be a potential medium-term driver," JPMorgan said.

The group's global land bank has reached 255 million sqft gross floor area, Cheung Kong said.

That cache, held jointly by Cheung Kong and associate Hutchison Whampoa (0013), includes projects under construction, investment properties, agricultural land and properties owned by the group's two real estate investment trusts - Hong Kong-listed Prosperity REIT (0808), and Singapore-listed Fortune REIT.

Victor Li said the group has made several environmentally conscious initiatives in design and construction of its properties.

"We use less wood, incorporate balconies in our design and encourage recycling," he said. "We also initiated the Fung Lok Wai wetland project in the New Territories," Li said.

The much-awaited Fung Lok Wai development, incorporating several eco-friendly principles proposed by Cheung Kong, is expected to be an example for other developers to follow if it wins approval, market watchers said.

Cheung Kong has been seeking environmental approval since it teamed up with the World Wide Fund for Nature Hong Kong in December 2005 to develop the project, which will include a residential development of 1.6 million sq ft.

The property component represents 5 percent, or four hectares, of the 80-hectare site at the existing fishponds at Fung Lok Wai.

Meanwhile, Li said there should not be a lack of home supply in Hong Kong.

"In 2009-2010, not counting supply from other developers, just the ones from Cheung Kong and our partnerships with MTRC and KCRC, there is already considerable supply, though not too much," he said.

Li said he supports the government's existing land application system of land sales.

"The system has worked well for a long time. There is no need for changes," he said, adding that it supports the economy and is market-driven.

In the past three years, Cheung Kong has acquired a considerable amount of land, from the land application list and from railway property tenders.

"The land application system provides a framework for predictable and transparent land sales," he said.

"Hong Kong needs a stable economy and the property market is related closely to it. When you lack of land, go through the land-application process and bid."

Under the application list system, a developer must submit a price that is at least 80 percent of the government estimate to trigger a site for auction.

He also said real estate is still of vital importance to Hong Kong as property owners influence the consumer market and overall confidence in the economy.

I've found paradise, says Chao

I've found paradise, says Chao

Danny Chung

Friday, April 06, 2007

For Cecil Chao Sze-tsung, tycoon and youngest son of the late Hong Kong shipping magnate Chao Tsong-yea, it is the end of a long struggle to get what he wanted, namely a plot of land on the outlying islands which he hopes to turn into "a paradise."
Last week, as he inched his way slowly to the exit at the cultural center through a blockade of reporters desperate for a soundbite, his peers, outside observers and investors may have been wondering why his company Cheuk Nang (Holdings) (0131) paid nearly HK$100 million for the site on Cheung Chau.

The answer came the next day at a press conference when Chao explained himself.

For a developer of Cheuk Nang's size, to get a site of 110,000 square feet with sea views is extremely difficult.

"Even if you find agricultural land with no sea view and can develop it as low-density residential, the change of use premium plus the cost of the land itself, I think [the total amount] would not be less than HK$100 million," Chao said.

Looking at it from that perspective, then perhaps the company got off lightly with final price of HK$96.5 million for the site at Shui Hang on Cheung Chau even though the price came in at 147 percent above the opening bid of HK$39 million.

Chao indicated he was prepared to go higher to win control of the site, which had been the subject of four unsuccessful attempts to trigger an auction by him since last April.

"The Cheung Chau site price was lower than the price which we set, but the [final] price wasn't exactly cheap," Chao said.

The site has an area of 111,752 sq ft, offering 44,692 sq ft of residential space at a plot ratio of 0.4. This translates into an accommodation value of HK$2,159 per square foot or four times the HK$491 psf set in August 1999, the last time a Cheung Chau site was sold at auction.

Chao brushed aside concerns that he may have trouble selling his units when nearby flats are selling at HK$2,200 psf on the secondary market.

This is because Cheuk Nang is not going to build a run-of-the-mill residential project at the site. Cheung Chau is likely to be seeing some dramatic changes in future.

The islands of Tsing Yi and Lantau, Chao said, are already linked with roads.

"I think, sooner or later, there will be road links [to Cheung Chau] but as to when, it is government policy," he said.

Until then, the site - which will be called "New Villa Cecil" - will be served by helicopters and luxury yachts.

"We will not only turn the site into a paradise in Cheung Chau, we will also change the surroundings," Chao said.

Such improvements include an artificial beach, a lagoon for swimmers, a pier to the site, improvements to roads and the possibility of using golf carts for transport by the residents at New Villa Cecil.

"Cheung Chau's development will not be done in one day. We are looking at development in the next 10 to 20 years. So we are bullish on Cheung Chau," Chao said.

The company has estimated a construction cost of about HK$1,200 psf with total investment, including the land cost, coming in at HK$200 million.

However, details on the number of units, their size and whether the company will sell or lease them are yet to be decided.

Chao sought to allay fears that the company will have trouble getting a return on the project.

"On a land price of about HK$100 million, I guarantee it will definitely make money. As to how much money is made, it could exceed everybody's forecast," he said.

The company's previous experience with Villa Cecil at Pok Fu Lam, which pre-dates Bel-Air at Cyberport by at least a decade. underscores his optimism for the Cheung Chau purchase.

"When we got the [Pok Fu Lam] site, compared with the Cheung Chau site, it was even quieter. There weren't even street lights," Chao said.

Phase I of Villa Cecil at 200 Victoria Road was sold out a few years ago while phase II at 192 Victoria Road is 90 percent leased.

Phase III at 216 Victoria Road is under construction.

The company bought the site at phase II for HK$32 million in May 1990 while the site for phase III goes further back to January 1986 when the company bought it for HK$6.3 million.

To further silence doubters, Chao also pointed to the company's Cotai Strip No 1 project in Macau where it is building more than 1,000 flats.

When details of the project were announced last November, it was looking to sell at HK$3,000 to HK$4,000 psf but now Chao said it is looking at prices of HK$5,000 to HK$6,000 psf.

"The projects I invest in, 90 percent of them make money," said Chao, presumably with an eye to reassuring his investors that include US-based banking group Citigroup, which has a 12.7 percent stake, and Value Partners, which holds 6.3 percent.

So certain is Chao that he has a winner on his hands that he is offering the ultimate buy-back offer. "I guarantee you one thing, if it does not make money, I'll privately buy it all," he said.

Thursday, April 5, 2007

Major changes are in store at Century Square

Major changes are in store at Century Square mall with old favourite Metro departing while Seiyu moves in - but under a new name and a new look.

Department store Metro will go when its lease expires in August, ending more than a decade-long stay at the Tampines mall.

Shoppers will only have to wait a few months before Seiyu, under its new brand name BHG, opens for business.

The revolving door changes point to a fast-shifting retail scene here with the old order facing a tougher playing field.

Metro’s move underlines the dwindling presence for what was once the dominant department store chain here.

Its first store opened in 1957 in High Street and at its height had 10 locations in town, including Lucky Plaza and Scotts Shopping Centre.

But there will soon be just three left - at Paragon, Causeway Point in Woodlands and Compass Point in Sengkang. The Metro store at Far East Plaza - one of the chain’s best-known branches - closed in mid-2002, after 19 years.

Metro has been an anchor tenant at Century Square since 1996 and occupies four floors with a sub-tenant, Best Denki, part of the mix.

A Metro Holdings spokesman told The Straits Times that it plans to move some staff to other stores and will try to minimise the disruption from the move.

‘We will continue to look for new locations,’ she said.

Mainboard-listed Metro Holdings has operations and investments overseas, including shopping malls in Shanghai and Beijing.

Its departure from Tampines will leave a gap of 82,000 sq ft but about 50,000 sq ft of that has been snapped up by the new anchor tenant - BHG or Seiyu to most people.

The name change stemmed from an ownership shuffle in late 2005. Parent firm Seiyu Japan sold Seiyu Singapore to CapitaLand, which in turn sold it to the Beijing Hualian Group (BHG) in China.

Seiyu Japan had at the time told The Straits Times that the Seiyu brand name would be retained in Singapore only for a certain period.

That name change is now official with the three existing Seiyu stores - in Bugis Junction, Junction 8 and Lot 1 - being rebranded as BHG at a ceremony tonight.

The new name - which reflects its marketing tagline Be Here For Good Things - has been accompanied by extensive revamps of some departments, including beauty halls and fashion quarters.

Said BHG Singapore’s managing director, Mr Katsuharu Inamoto: ‘We want the new store brand to be able to take us into the new retail era and adapt to the changing consumer profiles.

‘Our new investors are more forward-looking. As a result, we are not only opening a new store in Singapore but also looking at the feasibility of starting stores in neighbouring countries.’

Metro’s departure is also the signal for a mini revamp at the 210,000 sq ft Century Square thanks to the extra space created by the move.

Mall manager AsiaMalls Management will be able to carve out 23 specialty shops selling fashion and accessories on levels one and two.

Best Denki, which has 21,000 sq ft on level four, may take the entire floor.

These changes will tie in with the $7 million in enhancement works that AsiaMalls is planning in July.

Century Square is owned by Asian Retail Mall Fund, which also owns Tampines 1, the nearby 260,000 sq ft mall due to open late next year.

Source: The Strsits Times, 05 April 2007

Standard Chartered Bank, which will lease close to half a million square feet

The developers of Marina Bay Financial Centre (MBFC) are said to have secured the project’s first office tenant. Industry sources say it is likely to be Standard Chartered Bank, which will lease close to half a million square feet in what will be one of the biggest office leasing deals in Singapore.

Stanchart’s lease is likely to be for more than 10 years, market watchers reckon. It remains to be seen what the bank plans to do with the 130,000 sq ft or so it now leases at 6 Battery Road, owned by CapitaCommercial Trust (CCT).

The MBFC developers are also said to be at various stages of talks with a string of other big-name banking and financial groups - including UBS, Merrill Lynch, HSBC, Credit Suisse, ING, JPMorgan, BNP and DBS. ‘It’s probably logical to assume these are the sort of names that would be targeted as a tenant list for the project,’ a property market watcher said.

It is not known what sort of rent Stanchart will pay at MBFC, but market watchers believe it could be in the ballpark of $8-$9 per square foot (psf) a month, judging by current rents in the area. The last unit at the nearby One Raffles Quay, believed to be about 4,000 sq ft, was leased at gross monthly rent of about $12 psf - almost three times the effective rent when leasing there began in 2004.

The first phase of MBFC includes two office towers with about 1.65 million sq ft of net lettable area, slated for completion in early 2010. The second phase, expected to be ready by late-2011, will have another office tower with more than one million sq ft of lettable area.

Stanchart’s space at 6 Battery Road is under a long-term lease that expires in January 2020 and is subject to a rent review to open market value every three years, according to information made public by landlord CCT in March 2004, around the time of its introduction to the Singapore Exchange, and in an equity-raising exercise last year.

Will Stanchart continue to lease all of this space after MBFC is ready?

‘They could still want to reserve some space at 6 Battery Road for potential expansion, especially given the scramble among big banks for office space in Singapore,’ said an office market watcher. ‘A possible scenario may be for Stanchart to continue leasing the space at 6 Battery Road from CCT but then sub-let any space it does not need in the near term to other tenants.’

This is what Stanchart is understood to have done in the past at the building, although it has since taken back the space from sub-tenants amid the current wave of expansion by banks and the shortage of offices in Singapore.

MBFC is being developed by a consortium that comprises Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land.

The joint venture clinched the 99-year leasehold site in an Urban Redevelopment Authority tender in July 2005. The consortium bought the site, which can be developed into a maximum gross floor area of about 4.7 million sq ft, in two phases.

It paid $381 psf per plot ratio for the first phase in 2005, and an effective land price of $435 psf ppr for the second phase earlier this year under a formula that factored in an increase in office land values in the vicinity since the initial bid in the 2005 tender.

Source: The Business Times, 05 April 2007

All in line for a full house: Property price index could grow 15% to 18% this year (Analyst)

He may not have the money to buy an apartment yet, but 21-year-old Jasper Ong is already a beneficiary of Singapore’s booming property market.Mr Ong, who is fresh out of National Service, and three of his friends are being paid $100 each every 24 hours to stay in the queue of people waiting to buy - or representing those who want to buy - The Seafront @ Meyer units at Meyer Road in District 15.The 24-storey freehold condominium project by CapitaLand, which has yet to be built, will only be launched to the public on Friday.

Mr Ong and his friends were hired by an ERA property agent and have been holding onto their “30-something” positions since 10pm on Monday.

They have spent their time sprawled on a mat, playing cards and reading newspapers.

Armed with four sets of clothing, loaves of bread and soft drinks, each of the group has taken turns to make three trips a day to a nearby workers’ quarters to bathe because of the heat.

“It’s very boring here, but since there’s money, why not?” Mr Ong reasoned.

As of last night, there were about 80 people in the queue. The line - reminiscent of the good old days when investing in property was deemed a surefire way to make mega profits - is yet another indication that
Singapore’s property market is heading north.

Several other property launches in recent days have also attracted high buyer interest.

One of these is CapitaLand’s Orchard Residences, where all 98 units in Phase 1 of the luxury condominium have been snapped up.

According to the developer, the units sold for an average $3,213 per square foot (psf).

City Developments Limited’s The Solitaire, a boutique 59-unit development nestled in Balmoral Park in District 10, is now 100-per-cent sold, just one week after its soft launch.

The units sold at an average price of more than $2,000 psf, CDL reported in a press release yesterday. This works out to about $2.3 million for a two-bedroom unit to more than $7.4 million for a penthouse.

“The prices achieved represent a new benchmark for the Balmoral Park vicinity,” CDL said.

Buyers’ love affair with condos with a waterfront view helped Keppel Land get such a good response on the first day of the soft launch of its Reflections at Keppel development at Keppel Bay Drive, which the developer decided to increase the number of units on offer from 80 to 150. A total of 1,129 units, including 35 penthouses, will be on offer for between $1,900 and $1,950 psf. The highest-priced unit at yesterday’s launch, which was reserved for Keppel staff, directors and associates, was $2,400 psf for a villa unit.

Keppel Land’s Singapore residential director Augustine Tan said that with these prices, the company believes “we have set a benchmark” for the Keppel Bay/Sentosa area.

These encouraging responses to the launches is in line with analysts’ predictions that the property market will continue to do well this year, thanks to factors such as a healthy economy and strong foreign investor interest.

According to flash estimates from the Urban Redevelopment Authority released on Monday, the property price index rose from 130.2 points in the previous quarter to 136.2 points in the first three months of this year - the highest increase in seven years.

“The overall residential property price index could chalk up growth between 15 per cent and 18 per cent for the entire year of 2007,” said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

Source: Today, 04 April 2007

Home sellers hope for bigger profits via auctions

Auctions are gradually shredding the stigma of being associated with morgtgagee sales, says property agency CKS. It is arranging an auction next week for eight homes in high-end projects such as Icon.

A small group of home owners are putting their luxury apartments up for auction, but not because they cannot afford them.

These sellers are hoping a bidding war will yield higher profits for their homes than if they go down the normal sales routes.

Eight homes go under the hammer next Thursday. All are in popular projects - The Sail @ Marina Bay, The Oceanfront and The Coast at Sentosa Cove, Caribbean at Keppel Bay and Icon at Tanjong Pagar - where several units have already changed hands.

All the condos are 99-year leasehold and are not yet ready for occupation.

These home sellers are the clients of property agency CKS Property Consultants, which hit on the idea of using an auction as a sales channel.

CKS said yesterday that this would be one of the first auctions in Singapore comprising only owners’ properties.

Usually, property auctions here are conducted regularly by bigger property firms and include both owners’ properties as well as repossessed assets.

But CKS believes that auctions are gradually shedding the stigma of being associated with mortgagee sales.

‘More Singaporeans are eager to utilise the mode of auction to fetch lucrative prices for their properties,’ it said in a statement.

Its clients see this auction as the best way to take advantage of the booming demand for high-end property, the agency added.

‘Though many of them have already attracted offers via open listings, they want to generate wider exposure for their properties so as to capture the highest, most competitive price possible,’ CKS told The Straits Times.

The agency will absorb the administrative fees of the auction, which amounts to $1,000 for each property.

The auction, which will be called ‘hot spots’, will be held next Thursday at 2.30pm on Level 6 of Raffles City Tower.

CKS is not the first to jump on the auction bandwagon.

Property auctioneers have been seeing an increasing number of owners’ sales, as more sellers turn to auctions as an alternative sales method for luxury homes.

Last weekend, developer Tuan Sing Holdings held the first auction of uncompleted condo units in Singapore.

It put 12 units at its high-end Botanika in Holland Road on offer and sold them all at prices within its expectations.

While the units fetched benchmark prices of up to $2,400 per sq ft, reports said the bidding was slow-going, partly because of the high value of the properties.

But while the Botanika auction was open only to invited bidders, the ‘hot spots’ auction is welcoming all interested buyers and investors.

Source: The Straits Times, 05 April 2007

Another site available for hospital-cum-hotel project

The Urban Redevelopment Authority (URA) says a reserve site on Race Course Road can now be developed with a hospital component.

The 1.36ha site, which has a maximum allowable gross floor area (GFA) of 57,225 square metres, was put on the reserve list of the Government Land Sales (GLS) programme last year.

Zoned a white site, residential and commercial use, as well as a stipulated minimum 40 per cent GFA of hotel use, was expected.

In a statement yesterday, URA said: ‘In line with increased interest in hospital development, URA has been working with the Ministry of Health and EDB (Economic Development Board) to review new sites for hospital development.’

A URA spokesman said later: ‘We have received some market feedback that the site could be suitable for a hospital development.

‘Allowing hospital use for this site also supports the government’s plan to release more land for medical facilities to cope with the increased needs of local patients and the 20 per cent annual growth in foreign patients.’

On whether growing medical tourism was a factor, the URA spokesman said: ‘An investor could choose to build a proposed hospital-cum-hotel development that could be suitable for tourists who visit Singapore for leisure purposes or to seek medical treatments, and in doing so, would contribute to the SingaporeMedicine’s initiative to attract one million foreign patients by 2012 with an expected spending of $3 billion.’

SingaporeMedicine is a multi-agency government-industry partnership set up to develop and promote Singapore as a medical hub.

Its latest figures - for 2005 - show that 374,000 international patients came to Singapore specifically for health care.

In January, another GLS hotel site aimed partly at medical tourism was sold to Far East Organization for $131.1 million or $501 per square foot per plot ratio.

Located strategically at Sinaran Drive, the site is close to Tan Tock Seng Hospital and Far East’s Novena Medical Suites.

There does appear to be demand for hospital sites.

It emerged in June last year that Parkway Holdings initially planned to convert a residential site it bought at Napier Road for $138 million into a medical centre. But URA turned down the application for a change of use.

Source: The Business Times, 05 April 2007

Soft interbank rates bode well for economy

A period of softer interbank rates is expected to be generally positive for the economy and lending; although for individual banks, the impact could be mixed.

Interbank rates - the rate at which banks lend to one another and to which most loans are pegged - have been volatile of late, with sharp falls seen in recent weeks to levels not seen since 2005.

The benchmark three-month Singapore Interbank Offered Rate (Sibor) fell to a low of 2.93 per cent in mid-March, and is currently hovering at just above 3 per cent.

With loans growth and domestic consumption still lagging the strong rate of economic expansion, analysts say, softer interbank rates may help to narrow the gap.

After no meaningful increase for a decade, loans growth is starting to pick up, and some now expect double-digit expansion this year on the back of the strong domestic economy and the revival in the property market.

Credit Suisse said in a recent research report that the fall in interbank rates is likely to benefit banks by boosting asset prices and increasing demand for loans.

Recent figures released by the Monetary Authority of Singapore (MAS) show that total loans amounted to $198.4 billion in February, up 7.9 per cent from a year ago. Manufacturing loans grew 4.7 per cent to $10.7 billion, while construction loans increased 18 per cent $27.6 billion. Housing loans grew 2.7 per cent to $63.8 billion.

Brandon Ng, bank analyst at Phillip Securities, said: ‘This decline seems beneficial to local banks in the near-term as time deposits will adjust accordingly and will ease some funding pressures, whereas floating loans usually take longer to re-price.’

For home loan borrowers, it also signals the end of a cycle of upward re-pricing, although rates are not expected to drop. While the interbank rate cycle had peaked at the end of last year, some home loan borrowers were still asked to pay higher interest rates because of the lag effect.

‘Further mortgage rate hikes now look less likely, but they will also be sticky downwards,’ said Citigroup bank analyst Robert Kong.

However, while lower interest rates are broadly welcomed, the net impact of a lower Sibor on each of the three Singapore banks is dependent on the size of their deposits relative to their loan books and the composition of their loan and investment portfolios.

In an analysis of the impact of a falling Sibor on the banks, Mr Kong said that DBS Bank is likely to be a loser, with OCBC Bank a relative winner.

‘The speed and severity of the fall could mean margin concerns for DBS in 2Q/3Q,’ he said.

DBS has the most rate-sensitive earnings of its peers because of factors such as a low Singapore loan-deposit ratio, a high level of interbank loans and a large amount of low-cost funds, as well as a high exposure to corporate loans which are Sibor sensitive, according to Mr Kong.

As three-month Sibor surged between Q3 2005 and Q1 2006, DBS enjoyed the largest boost (at a time when volume growth was weak), followed by United Overseas Bank (UOB), while OCBC suffered.

OCBC, however, has a high dependence on Sibor time deposits, which re-price more quickly than asset yields. Hence, it tends to benefit from a lower Sibor, while UOB lies somewhere in between.

One implication for bank customers is that deposit rates, which peaked in the later part of last year, will now soften.

Interbank rates are not expected to reverse their current trend in the near term, but could stabilise at around current levels.

‘As long as moderate appreciation of Singapore dollar according to MAS remains on track and no major movements in the interest rates within the $NEER (Sing-dollar nominal effective exchange rate), we should not see much adjustment in local interest rates,’ said Mr Ng.

Source: The Business Times, 05 April 2007

Little India site open to hospitals

The Urban Redevelopment Authority (URA) has decided to open up a vacant plot in Little India to hospital development, after no takers came forward to develop it for its original purpose.

The 1.36ha site above Farrer Park MRT station at the junction of Rangoon Road and Race Course Road was first offered as a ‘white’ site in August last year. This means developers could build homes, shops, offices or hotels there.

But no developer expressed an interest.

Yesterday, the URA said it would extend the site’s permitted uses to hospitals, ‘in line with increased interest in hospital development’, though 40 per cent of the site’s total floor area must still be given over to a hotel.

The agency said the plot is suitable for a hospital as ‘it is compatible with the surrounding land uses’.

Further down Race Course Road is Kwong Wai Shiu Hospital and Nursing Home.

The land parcel on offer can be built up to a total floor area of about 616,000 sq ft.

It is on the URA’s reserve list, which means that interested developers have to submit a bid that meets the authority’s reserve price before the plot can be launched for public tender.

Source: The Straits Times, 05 April 2007

Far East buys Ocean Apartments for $39m

Far East Organization has bought Ocean Apartments in East Coast Road for $39 million or $481 psf of potential gross floor area including an estimated $150,000 development charge (DC).

The collective sale, brokered by Colliers International, is understood to have taken place about a fortnight ago.

Just before that, Far East is said to have bought Sheridan Court next door for $13.5 million or $483 psf per plot ratio including an estimated $50,000 DC.

Assuming Far East combines the plots, it will have a freehold land area of 78,195 sq ft. The combined plots could be redeveloped into a project with about 80 units averaging 1,500 sq ft.

Both plots are zoned for residential use with 1.4 plot ratio - the ratio of maximum potential gross floor area to land area - and a five-storey height limit.

Ocean Apartments now comprises a couple of four-storey walk-up blocks totalling 48 units. Owners will receive more than $800,000 a unit from the collective sale - about 35 per cent more than if they had sold individually.

As for Sheridan Court, which comprises 14 apartments, industry sources say another investor had signed a deal to buy all the units through a collective sale, but before the deal could be completed in July this year, he ‘flipped’ the properties to Far East.

Market watchers note that because the Ocean Apartments/Sheridan Court combined site is slightly L-shaped, Far East could consider buying some adjoining properties to give the site a more squarish shape. ‘But this is just speculation at this stage,’ said a source.

Last week, Far East teamed up with Frasers Centrepoint in an equal joint venture to buy Tampines Court for $405 million or $260 psf per plot ratio inclusive of DC and a premium to top up the site’s lease to 99 years. The 702,162 sq ft site is zoned for residential use with a 2.8 plot ratio and can be redeveloped into 1,600 condo units.

‘It will likely be a master-planned development, given the very large site and an opportunity for both developers to join forces to produce some innovative housing in Tampines,’ Far East CEO Philip Ng said in a statement last week.

Frasers Centrepoint chief executive Lim Eee Seng said that the duo would create ‘a landmark residential project’.

Source: The Business Times, 05 April 2007

Warehouse rents up nearly 5% in first quarter

Warehouse rents rose almost 5 per cent in the first quarter of this year - the first increase since Q2 2003.

According to a report by CB Richard Ellis (CBRE), average monthly rent for warehouses improved by 4 to 4.8 per cent in Q1. It edged up to $1.30 per sq ft for ground-floor units and $1.10 psf for upper floor units.

Previously, these rents had been stagnant at $1.25 psf and $1.05 psf.

CBRE director of industrial and logistics services Bernard Goh said yesterday: ‘More logistics companies are setting up distribution centres in Singapore, given its proximity to the growing economies of China and India and its good air and sea connections with Asia and the rest of the world.’

Dubai-based shipping and logistics company CargoGulf set up its global headquarters here recently, Mr Goh noted. And Computer firm Dell had said that it would move its global supply chain management manufacturing operations to Singapore.

Average rent for high-tech space also rose in Q1 this year - by 5 per cent to $2.10 psf from $2 in the previous quarter. Year on year, high-tech rent increased 13.5 per cent.

Mr Goh attributes this to demand from companies looking to high-tech space as an alternative to traditional office space, which is in short supply.

Some companies are also opting for high-tech and business/science park space for back-up recovery offices.

The average monthly rent for factory space rose five cents psf in Q1 this year to $1.30 psf for ground floors and and $1.05 psf for upper floors.

Ascendas Reit was the most active Reit in Q1. It bought $81.7 million of properties including 27 International Business Park for $18.6 million. Cambridge Industrial Trust bought 55 Ubi Avenue 3 for $18.8 million. Mapletree Logistics Trust did not buy any properties in Singapore.

Source: The Business Times, 05 April 2007

Reflections at Keppel Bay hits average sale price of S$1,900 psf

Keppel Land’s latest waterfront home project - Reflections at Keppel Bay - is set to transform Singapore’s west side into a premium waterfront living enclave.

The property developer is seeing strong demand for the project, which is setting a new benchmark at an average price of S$1,900 per square foot.

Tuesday was Day One of the soft launch, and already, transacted prices for units at Reflections at Keppel Bay surpassed those at Marina Bay Residences - the most recent waterfront property launched.

Reflections is Keppel Land’s latest waterfront residential development - and the second of five planned residential projects in the area.

The developer said it expected at least three-quarters of the units up for sale during Tuesday’s soft launch to be taken up.

Augustine Tan, Director, Singapore Residential, Keppel Land, added, “And we’ve done very well. Initially, we wanted to just launch 80 units. But because of the demand…to satisfy our customers, we’ve actually increased to about 150 units.

“We’ve yet to tally our prices. But I think it’ll be in the range of S$1,900 per square foot to S$1,950 per square foot.”

Keppel Land plans to sell the units in phases of about 200 to 300 units each.

Mr Tan said, “We’re very mindful that we do not disappoint our customers. So we will review the plans when we come to it. If we can sell over 500 units in a very short period, then we have to review our plans again on whether we want to immediately sell the rest or to wait for a while.”

With direct access to a marina, analysts have said Reflections is the catalyst needed for the West Coast to turn into the new East Coast.

This was despite properties on the East Coast, especially near the Tanjung Rhu and Meyer Road area, being the conventional choice for waterfront living.

Donald Han, Managing Director, Cushman & Wakefield, said, “For the West Coast, you’re targeting on a pent-up demand, something that has never been there. So we expect a fairly good launch. We expect good take-up. We expect the developers to control the supply, not to release everything at one go.

“The West Coast is now playing catch up with the East Coast. And depending on the sell out, whether this project is going to be a sell-out, or the reception from the investors, overall, prices are being re-evaluated quite comparative to the East Coast market for premier, desired, quality lifestyle residential projects.”

Although the recreational community and food and beverage outlets in the area are not as established as the ones in the East Coast, analysts have said there are a few other things going for the area.

There is the Sentosa Integrated Resort, as well as business enclaves like the HarbourFront Centre, the Alexandra Technopark and conglomerates like the PSA and NOL to offer a steady stream of corporate tenants.

Keppel Land plans to open Reflections at Keppel Bay for sale to the public this Friday.

Source: Channel NewsAsia, 04 April 2007

Site above Farrer Park MRT can be developed into hospital

A new private hospital could be coming up in the Little India area.

The Urban Redevelopment Authority (URA) has given the go-ahead for a reserve site above the Farrer Park MRT station to be developed into a hospital.

The land parcel, spanning about 1.4 hectares, is located at the corner of Race Course and Rangoon Roads.

Part of the site can house a 20-storey building.

A minimum of 40 percent of the maximum gross floor area has to be allocated for hotel use.

The remaining area can be used for a hospital.

The 99-year leasehold parcel is zoned as a so-called “white site”.

This means it can be developed for commercial, residential, hotel, civic or any mix of uses at any time.

URA said the decision to allow the site for hospital use is in line with increased interest in hospital development.

Other sites that have also been made available for hospital use are sites in Novena and One-north.

The site has been made available on the reserve list since August under the Government Land Sales Programme for the second half of 2006.

Under the Reserve List system, a site will only be put up for tender if there is a minimum bid price that is acceptable to the government.

Source: Channel NewsAsia

Business is brisk at residential projects

Residential properties continue to sell and prices are expected to keep going up.

CapitaLand and Sun Hung Kai Properties have sold more than half of the 175 units at The Orchard Residences at an average price at $3,213 per sq ft - a new high-end benchmark.

This will help lift the official property price index for the first quarter. Already, flash estimates reveal it rose 4.6 per cent.

The index, which rose 3.8 per cent in Q4 2006, is widely expected to climb as much as 5 per cent for Q1 2007.

The Orchard Residences units were sold on an invitation-only basis. A spokesman for CapitaLand said that half of the buyers are foreigners, mostly from Indonesia, Japan, India and Hong Kong.

Some of the remaining 77 units will be sold by invitation only, but a public launch is expected in May.

Keppel Land has also done brisk business at its 1,129-unit Reflections at Keppel Bay. About 130 units were sold yesterday - and this was only to Keppel directors, staff and business associates at a private preview.

A Keppel Land spokesman said the average price so far is $1,900-$1,950 psf.

Private previews are expected through the week, with a public launch set for as early as end of the week. Only 500 units will be launched in the first phase.

The Solitaire, a 59-unit project at Balmoral Park by City Developments Ltd (CDL), is fully sold - after it was soft-launched just a week week ago. CDL says the average price achieved is $2,000 psf, with one penthouse going for $7.4 million.

Foreigners made up about 40 per cent of buyers.

CDL will launch a condo on the former Kim Lin Mansion site next and has roped in designer architect Carlos Ott to give it global appeal. For starters, the development will have 360 degree views because, ‘a good view is important, anywhere in the world’.

Two of the three blocks will also have units that occupy an entire floor, with lifts opening out into each unit exclusively. ‘You may never meet your neighbours,’ said the CDL spokesman.

Hearteningly, suburban launches have also been selling well.

Sim Lian Group’s 338-unit Carabelle off West Coast Road, launched last week, is almost 50 per cent sold. Sim Lian executive director Diana Kuik said the average price so far is $638 psf.

She reckons at least 25 per cent of buyers so far are public housing upgraders and the rest are mostly local buyers with private residential address.

Although Ms Kuik could not say who these buyers are, Knight Frank director of research and consultancy Nicholas Mak reckons some could be buying for ‘capital gains’ and to ‘lock in’ prices. ‘It’s not so much panic buying as it is kiasu buying,’ he said.

Mr Mak also believes that those seeking replacement units for homes sold through collective sales make up a significant number of buyers.

He estimates that they accounted for 14 per cent of all buyers in 2006.

Interest in new launches has been strong, with queues outside showflats at Reflections and CapitaLand’s Seafront on Meyer. This surprises Mr Mak. ‘There is no need to queue. Nowadays, there are buyers with more influence and clout who will beat you to it anyway,’ he said.

Source: The Business Times

Wednesday, April 4, 2007

Builders worry about steel

Builders worry about steel


PETALING JAYA: Major builders' associations are urging the Government to curb what they say are “runaway steel prices.”

The associations are calling for the removal of price controls on steel bars and cement and allow the free market to determine their prices.

They also call for the removal of import controls that will allow more competitive pricing of construction materials, price fluctuation clauses for government projects and close monitoring of prices by the Domestic Trade and Consumer Affairs Ministry.

Recurring shortages and price fluctuations could interrupt construction schedules of projects under the Ninth Malaysia Plan, especially for low- and medium-cost housing, they said in a joint statement yesterday.

The associations said their members had reported that steel bar millers were now charging RM450 to RM550 above the controlled price per tonne. “Local builders are being forced to pay more than RM2,000 per tonne to keep up with construction schedules,” they said.

Patrick Wong (left) and Ng Seing Liong at the press conference.
This was higher than the cost of steel bars in neighbouring countries of Thailand, Singapore and Indonesia where market prices ranged from RM1,800 to RM1,900 per tonne, said Rehda president Ng Seing Liong.

The associations, together with The Associated Chinese Chambers of Commerce & Industry of Malaysia, had last week sent a memorandum to the Prime Minister's Department.

The four associations are Master Builders Association Malaysia (MBAM), Persatuan Kontraktor Melayu Malaysia (PKMM), Real Estate and Housing Developers’ Association (Rehda) and Persatuan Kontraktor India Malaysia.

On how a controlled-price item could be sold at higher prices, Ng said: “These charges are 'grey market prices' often in the form of handling costs or special-size requirements.”

In the memorandum, they had detailed their concerns and recommendations, MBAM president Patrick Wong told reporters.

On why the industry only made a formal complaint now, Wong said while grey market prices for construction materials had existed for some time, a sudden jump in such prices in recent months was too much for many builders to bear.

“Two months ago, members quoted that millers were charging RM200 to RM250 above the control price. Now, this has increased to RM450 to RM550 more per tonne, which is a 15% to 20% increase,” he said.

At present, 30% to 40% of construction jobs in the country were being delayed, as Class F contractors could not meet their profit margins, PKMM secretary-general Datuk Osman Abu Bakar said.

“If the issue is not resolved quickly, prices of new houses could also go up by 15% to 20%,” Ng said. Rehda had resolved to request for an increase in the price of low-cost houses to RM60,000 from RM42,000 and would submit a proposal to the Government this month, he said.

TA rises on REIT plan

TA rises on REIT plan

KUALA LUMPUR: The prospect of TA Enterprise Bhd (TA) raising more than RM1bil through the sale of its properties to a real estate investment trust (REIT) sent shares of the stockbroker and property developer to their highest level in six weeks yesterday.

TA Enterprise shares closed up 17 sen to RM1.94 while its warrant-B jumped 7 sen to 88 sen as the group announced it might package property assets in Australia, Canada, Malaysia and potentially South Africa into a REIT.

“REITs are a great way for property companies to unlock value,'' said the head of research at a local stockbroking house.

Shares of TA have been among the better performing stocks this year as it benefits from the stockmarket's two key themes, property and stockbroking.

“There is a need for the company to increase its landbank and grow the financial services side of the business, and that's where the money will come in useful,'' said an analyst.

In the Tuesday report, TA chairman Datin Alicia Tan said the company planned to sell RM1.8bil worth of apartments and offices in the next five years.

She said two of the three projects were located near the KLCC and the company expects income from real estate to contribute 60% of its profit by 2009 from 30% in 2005.

The prospect of having a REIT is also seen as beneficial to TA as ongoing and future property projects could be injected into the REIT to improve returns. As for the stockbroking side of the business, the share price of stockbrokers such as TA Enterprise have also been lifted as the global bull market has led to higher valuations for stockbrokers worldwide.

But for TA, the nature of its financial and stockbroking business is set to evolve after being stable for much of the past few years.

Armed with an investment banking licence, the company is set to capitalise on its assets, which include a big remisier team, a strong retail focus in its clientele, as well as growing contribution from its institutional business. “There is potential for the company to come up with structured products and TA is also eyeing expansion into similar stockbroking services in the region,'' said an analyst.

The Singapore office and retail property markets continue to be firm

The Singapore office and retail property markets continue to be firm, judging by separate releases from CB Richard Ellis and Knight Frank yesterday.

Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.

‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said.

‘As a result, rentals in those areas were stable,’ the report added.The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.

In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase.

‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.

CBRE, in its office sector report, said that with supply remaining extremely tight, the vacancy rate for Grade A office space continued to fall, from 0.8 per cent in Q4 2006 to 0.4 per cent in the first quarter of this year.

Source: The Business Times, 04 April 2007

Out of the Cage: Iskandar not a sell-out to foreigners

Out of the Cage: Iskandar not a sell-out to foreigners
By : khairy Jamaluddin

Dr M blasts Abdullah over IDR rules

Dr M blasts Abdullah over IDR rules

AFTER five months of relative quiet, former Malaysian prime minister Mahathir Mohamad returned to the offensive, this time attacking Prime Minister Abdullah Ahmad Badawi's plan to relax laws governing investment in the Iskandar Development Region (IDR) in southern Johor state.

In a speech before 300-odd supporters in Kulai, a rural hamlet in Johor, the 81-year-old Dr Mahathir lambasted Mr Abdullah in familiar fashion, accusing the premier of weakness, economic mismanagement and outright corruption. All that was old hat but the IDR was new ground.

Last week, Mr Abdullah decreed that investors in the IDR would be exempted from Foreign Investment Committee (FIC) rules which include the requirement that ethnic Malays must be accorded 30 per cent in all spheres of economic activity in Malaysia from employment to equity participation.

Instead, Mr Abdullah said that investors - both local and foreign - would enjoy FIC exemptions within five zones within the IDR that could engage in selected activities from health care to tourism. The IDR is Malaysia's most ambitious project yet with an estimated US$105 billion set to transform a region almost three times the size of Singapore into a super-economic zone over 15 years.

The Malays form the majority of Malaysia's population and have enjoyed special privileges over three decades to uplift them economically. Mr Abdullah's shift in tack thus represented economic sacrilege and the former premier seized the opportunity.

Dr Mahathir, who rose in politics as an out and out Malay nationalist, said that such a policy would not make Malaysia 'our country at all', implying, as his wont, that it was a sell-out to foreigners. 'The Malays will lose out,' Dr Mahathir said. 'They are not ready to compete with those (businessmen) who will come into the IDR. . . We will be enslaved again.'

It is not clear if Dr Mahathir's clarion call will resonate among ordinary Malays given the fact that Mr Abdullah's announcement had been cleared by the country's Cabinet, which is chaired by the Premier himself. Nor is there any reason to believe that Mr Abdullah would reverse tack given his former boss's outburst. But there is no doubt that there is genuine disquiet among some segments of the Malay community which fear being marginalised in out and out competition.

Former deputy premier Musa Hitam, for example, was slammed over the Internet after he suggested on March 22 that the IDR be exempted from affirmative action policies. Mr Musa made the remarks in his capacity as an adviser to the IDR but got branded as a 'traitor' by Malay commentators on the Internet. Without explicitly naming him, Dr Mahathir also referred critically to the comments made by Mr Musa, who resigned as his deputy in 1985. Mr Musa declined to comment when contacted by BT.

Ironically, it was Dr Mahathir who first started relaxing affirmative action policies. In 1986, he repealed portions of the policy and allowed foreigners to own 100 per cent of businesses provided it was meant for export. It led to a decade-long boom of the Malaysian economy. The exemption still holds today.

In the early 1990s, Dr Mahathir almost completely waived affirmative action policies throughout his Multimedia Super-Corridor, an area of land much larger than the five zones selected by Mr Abdullah in the IDR, and meant to be the Malaysian equivalent of California's Silicon Valley.

The rules still exist today and the project is a qualified success. For all that, however, the former premier seems to bitterly rue his choice of Mr Abdullah as his successor and seems hell bent on toppling him. But age seemed to be slowing him down.

Late last year, Dr Mahathir suffered a heart attack and doctors advised him to cut back on his schedule. He did - for nearly five months.

Mahathir could do more for Johor project

Mahathir could do more for Johor project

The Iskandar Development Region, touted as Malaysia's new growth driver, should be encouraged to work

AHEAD of steam is building up over the Iskandar Development Region (IDR). And it's being generated by former prime minister Mahathir Mohamad who seems intent on spending his retirement years trying to undermine his successor Abdullah Ahmad Badawi.

The IDR is Mr Abdullah's grand vision, a special economic zone in southernmost Johor state twice the size of Hong Kong that is being touted as Malaysia's new growth driver.

To attract foreign investors, Mr Abdullah did the expected: he relaxed New Economic Policy-type laws governing investment in selected, if yet unnamed, areas of the region.

In short, where those areas are concerned, investors can hire whoever they like, source capital wherever they want and do not have to sell 30 per cent of their equity at par to bumiputra (mainly Malay) investors.

Given that the world is already flat, that investors are spoilt for choice and every other region is trying its best to woo foreign investment, Mr Abdullah's moves are neither wildly original nor earth shattering. But it would seem so given Dr Mahathir's vitriol. In a speech before 300-odd people in the agrarian hamlet of Kulai in Johor last Thursday, the former premier made his feelings about the IDR plain.

He fretted that the government was 'selling' the country; that the Malays would 'lose out', and finally, that the Malays would 'become enslaved'. That's puzzling coming from Dr Mahathir.

He should know better than anyone else about the efficacy of relaxing NEP-style rules because he was the first premier to do so. Faced with a crippling recession in the mid-1980s, Dr Mahathir declared the NEP to be 'in abeyance' and allowed foreign investors to wholly own their companies if they exported the bulk of their output.

His timing was perfect. It coincided with a steep appreciation of the yen against the greenback - courtesy of the Plaza Accord - and Japanese manufacturers, suddenly uncompetitive at home, 'discovered' Malaysia. The influx of FDI in enormous numbers after that set the stage for a decade-long economic boom. Only a malcontent would accuse Dr Mahathir of 'selling' the country then because it was patently the right thing to do.

Now, the NEP-free zones within the Iskandar Development Region account for 2-3 per cent of its total area. What of Dr Mahathir's 1994 Multimedia Super-Corridor (MSC), an area that stretches from the Kuala Lumpur City Centre in the heart of the capital to Cyberjaya in the south?

Like the IDR after it, the MSC was created by an enabling Act of Parliament. To make it work, Dr Mahathir suspended NEP-style requirements within the area, bequeathing it with similar liberalisations which Mr Abdullah, you might say, merely copied for his IDR.

Dr Mahathir went further, tirelessly criss-crossing the world selling his concept, scouring the globe for investors to make his idea a reality. The MSC was, and still is, a terrific idea ahead of its time but it remains a qualified success, a work in progress that's evolving. One reason is that everyone else has jumped onto the bandwagon. Every other country is lavishing incentives on the global investor, the better to create its own Silicon Valley, its own Shenzhen.

The world has changed and Dr Mahathir should think about actually helping Mr Abdullah and using his considerable global connections to sell the IDR - and the MSC - internationally.

The IDR is a reasonably good concept and, like the MSC, should be encouraged to work. If Dr Mahathir does not want to help, he should not hinder. As a physician, he might do well to reflect on the abiding tenet of Hippocrates: 'Above all, do no harm.''

M'sian groups eye RM15b oil project

M'sian groups eye RM15b oil project

Pipeline scheme may cut carriage of oil through the Straits of Malacca

AT least three business groups are jostling for a RM15 billion (S$6.6 billion) oil pipeline project across northern Peninsular Malaysia in a development that could potentially cut the carriage of oil through the Straits of Malacca.

Businessmen familiar with the idea - approved late last year as a 'high-intensity' investment by a committee headed by Malaysian Deputy Premier Najib Razak - say it could also hasten the development of the northern states of Kedah, Perak and Kelantan in line with Prime Minister Abdullah Badawi's vision of a so-called 'northern corridor economic region'.

The three business groups are SKS Development, a private company controlled by tycoon Syed Mokhtar Al-Bukhary; UEM World, a listed company controlled by state investment agency Khazanah Nasional; and Trans-Peninsula Petroleum, a little-known private company controlled by former executives of state oil company Petronas.

The project partly mirrors a long-held dream to use the geography of the northern part of the Malay Peninsula to shorten shipping routes between the Middle East and North-east Asia. As far back as the 17th century there has been talk of cutting a Suez-style canal through the Isthmus of Kra as an alternative to the Malacca Straits. Thailand and London agreed in 1897 not to proceed with a canal to shield the dominance of the-then harbour of Singapore.

More than a century later, the canal idea still hasn't gotten anywhere. It would be hideously expensive at an estimated US$20-25 billion. There could be security issues given sporadic unrest in Southern Thailand.

The condensed Malaysian version of the scheme calls Middle Eastern tankers to moor off Kedah state, from which their oil would be pumped 300-plus km via pipeline to Kelantan, then loaded on to tankers from China, Japan and perhaps Korea on their way home.

The reasons for the plan may have less to do with cost savings than the need for an alternative route to transport oil. Analysts point out that the Straits of Malacca is one of the world's most congested and pirate-prone waterways.

The pipeline bids from the Malaysian groups differ. Mr Syed Mokhtar's proposal is probably the most ambitious, involving building a refinery - already licensed by the Malaysian Industrial Development Authority - on Pulau Bunting, off Kedah, from which oil products would be pumped to Bachok in Kelantan. The UEM World project is said to involve just a pipeline to a new port at Tumpat in Kelantan. Little is known about the Trans-Peninsula bid except that it, too, would involve a pipeline.

Even so, the undertaking would be an expensive and difficult affair, involving land acquisition in three states. But funding may not be a problem. Chinese interests are said to be 'very keen' to participate to promote their country's energy security.

Johor woos Tokyo Disney operator for theme park

Johor woos Tokyo Disney operator for theme park

Khazanah said to be pushing for 800-ha development


MALAYSIA hopes to rope in the operator of Japan's Tokyo Disney Resort to help build an international theme park in the Iskandar Development Region (IDR) of South Johor.

According to sources, Malaysian officials and businessmen plan to sign a memorandum of understanding with Oriental Land Company for a feasibility study and design work on a park.

A Malaysian delegation of 15, including Johor Chief Minister Ghani Othman, was scheduled to leave for Japan last week to sign the MOU, but the trip was postponed at the last moment for reasons that are not clear.

Malaysia's state investment agency Khazanah Nasional is said to be spearheading the push for a theme park on 800 hectares near the township of Nusajaya. The cost is estimated at US$4 billion.

Although Oriental Land owns and operates Tokyo Disney Resort as a licensee of Walt Disney Co, Malaysia's park is unlikely to be Disney-branded.

On the contrary, Malaysian officials have stressed that the site - next to the Ramsar wetlands, which are rich in mangroves and inter-tidal mud-lands - makes it ideal as an eco-based park that would complement the Universal theme park to be built in Singapore.

Mr Ghani has previously said Johor will get a theme park, 'branded or otherwise'. He says Dubai has a very successful unbranded park where water is the underlying theme.

Oriental Land has previously said it has studied 'a possible leisure business' in Johor, not related to Disney.

Besides an MOU for a theme park, sources say Oriental intends to sign a separate MOU for a standalone six-star hotel on the Danga Bay waterfront. Getting to the theme park site from the hotel site would be easy, taking less than 30 minutes by boat.

Oriental Land would operate the hotel. In Japan it owns several hotels including Disney Ambassador Hotel, Tokyo DisneySea Hotel MiraCosta and Tokyo Disneyland Hotel.

When any MOUs with Malaysia could be signed is unclear, but sources say they are still on.

'It will take Oriental Land about six months to do the study and if all goes well the parties can proceed with the concession agreement,' a businessman said.

Numerous parties would be involved in the delegation to Tokyo. Besides state officials and Khazanah, UEM group is a player because it owns most of the land at Nusajaya and is undertaking a number of catalyst development projects there. Privately-held Danga Bay Sdn Bhd's involvement would be the Danga Bay waterfront development.

The proposed theme park and integrated waterfront development is part of Malaysia's massive US$105 billion plan to transform the IDR into a regional metropolis over the next 20 years.

Tuesday, April 3, 2007

Kota Damansara may lose all its greenery

Kota Damansara may lose all its greenery


PETALING JAYA: Residents protesting against the opening of a cemetery in Kota Damansara here have found out that there are other plans in the growing township that could spoil the greenery there.

Section 9 resident Kong Seng Ong claimed that a development plan for the area, obtained from a meeting with Kota Damansara state assemblyman Datuk Mokhtar Ahmad Dahlan, revealed projects beyond just a cemetery.

Kong said the plans, that included a sports complex, housing development and a Petaling Jaya City Council quarters, would cut through the town's green lung.

He added that any change from the structural plan in the use of land would require public notification and inquiry, in which case “we were not informed”.

One aim: Residents and nature lovers in Kota Damansara gathering on Monday for a quiet protest against the plan to build a cemetery in Section 9.
On March 27, Mokhtar told a gathering of about 300 people here that work on the first Muslim cemetery in the township would continue despite objections by some residents.

Work on the first 0.22ha, which would contain 1,200 burial plots, started on March 17. The first burial is expected to take place by the end of this month.

Yesterday, two groups of residents – one opposing the cemetery and one supporting the idea –came face to face but a tense situation was averted when the opponents of the cemetery withdrew.

A Section 9 resident, Datin Noor Lelawati Khalid, agreed that all religious groups in Kota Damansara needed their own cemeteries but, she added, the authorities should choose a location that does not involve cutting down the forest.

She said the preservation of the oldest lowland forest in the Klang Valley was a national responsibility.

All property’s in boomtown

All property’s in boomtown
Sky-High prices at luxury launches such as Sky @ Eleven, One Shenton and One North Residences over the past three months have lifted the private property market to a quarterly gain of 4.6 per cent, according to flash estimates from the Urban Redevelopment Authority (URA).The property price index rose from 130.2 points in the previous quarter to 136.2 points in the first quarter of this year, the highest increase in seven years.

The latest record gain has led some property analysts to revise their growth projections for the year from 8 per cent, to between 10 and 18 per cent. Last year, private-property prices rose 10.2 per cent.

Chief executive Mohd Ismail of real estate firm Propnex said: “With the development of the integrated resorts and strong foreign investor interest, I believe the momentum in the property market will continue at least for the next two to three years.”

While the gains were led by condominiums in the core central region - such as St Thomas Suites, One Shenton and Orchard Turn - which had an average quarterly price increase of 5.6 per cent, mass-market property prices in the rest of Singapore grew at a healthy pace.

Prices of condos in non-prime areas of central Singapore rose 2.9 per cent in the first quarter, following a prior 2.2 per cent rise. Non-landed private residential property prices rose 2.6 per cent, compared with 1.5 per cent the previous quarter.

Ms Tay Huey Ying, Colliers International director for research and consultancy, expects next quarter’s price gains in areas outside the core central region to breach 3 per cent, while the core central region - comprising the Downtown core, Sentosa and districts 9, 10 and 11 - could stabilise in the region of 6 per cent.

Other areas that have seen a significant rise in prices include the Meyer and Amber roads region, and Buona Vista, where new projects are now priced at 50 per cent more than what they would have fetched a year ago, said CB Richard Ellis executive director Li Hiaw Ho.

Colliers’ Ms Tay said: “Final numbers of the price growth will be higher than these flash estimates, as transactions that took place in the later part of the quarter would not have been taken into account yet.”

These include transactions for Orchard Turn Residences, Botanika, One North Residences and The Trillium.

Meanwhile, prices of Housing and Development Board flats picked up, too, rising 1.2 per cent over the last quarter. This follows a mere 0.8 per cent rise in the final quarter of last year, that was preceded by three straight quarters of falling prices.

Knight Frank director of research and consultancy Nicholas Mak said: “The public housing market will also see a price increase but at a more moderate pace. The question is, will HDB upgraders be priced out of the private-property market with the rising prices?”

Source: Today, 03 April 2007

UK mortgage equity withdrawal highest in 3 years

UK mortgage equity withdrawal highest in 3 years

(LONDON) Britons borrowed the most against the value of their homes in almost three years during the fourth quarter, a sign that surging property prices are fuelling consumer spending in Europe's second-largest economy.

Mortgage equity withdrawal - borrowing secured against property to finance purchases such as vacations and cars - increased to 14.6 billion (S$43.3 billion) from a revised 12.2 billion in the third quarter, the Bank of England said yesterday. That's the highest since the first quarter of 2004.

The UK's central bank has raised its main benchmark rate three times since August as household spending fuels economic growth and threatens to keep inflation above the Bank of England's 2 per cent target. House prices rose 6.7 per cent in March from a year earlier, the most in almost four years, property research company Hometrack Ltd said on March 26.

Yesterday's report 'may raise some upside risk in the Monetary Policy Committee's mind for the consumption profile', said Karen Ward, an economist at HSBC Holdings plc who used to work for the Bank of England.

Bank of England policy makers, who begin a two-day meeting on April 5, may delay a further increase in borrowing costs until May as they watch for signs of accelerating inflation, a survey of economists showed. The UK benchmark rate currently stands at 5.25 per cent.

Mortgage equity withdrawals may have helped spur growth in the final three months of 2006, according to Howard Archer, an economist at Global Insight in London.

Consumer spending rose one per cent in the period from the third quarter, the second-fastest pace since 2004.

Withdrawals are also used by households for purposes other than spending, said Mr Archer, citing debt reduction, boosting pensions and other financial investments. - Bloomberg