Saturday, December 1, 2007

Bank lending to the property sector continued to accelerate

Bank lending to the property sector continued to accelerate in October, growing at the fastest annual pace in eight years, according to new data from the Singapore central bank yesterday.

Overall loans growth in the banking sector also picked up in October, the latest estimates from the Monetary Authority of Singapore (MAS) show.

Loans to the broad property sector, comprising consumer home loans and business loans to the building and construction industry, reached $105.7 billion at end-October - up 18.1 per cent from a year ago.

The year-on-year expansion was the fastest since October 1999, when property-related lending grew by 19.5 per cent.

Over the month, property-related loans grew 3.2 per cent from $102.4 billion at end-September, the fastest monthly pace since Nov 1998.

Consumer home loans, which include mortgages as well as short-term ‘bridging loans’ offered by banks to buyers of new homes who are waiting to receive the cash from selling another property, grew 14.3 per cent from a year ago to $71.8 billion, the fastest since October 2004. Over the month, the growth was 1.9 per cent, slightly slower than the 2 per cent growth in September.

Much of the period covered by latest data precedes the government’s withdrawal on Oct 26 of the deferred payment scheme for private property purchases, which was aimed at discouraging speculative buying.

David Conner, chief executive of OCBC Bank, said at the release of the group’s third-quarter results on Nov 6 that he expects to see an increase in demand for mortgages over the next two years, partly due to the withdrawal of the scheme, as buyers of new private homes will now have to pay a larger portion of the cost of a property while it is being built instead of deferring payments until the building is completed.

Meanwhile, loans to businesses in the building and construction sector rose 27.1 per cent over the year - the fastest since December 1996 - and 6 per cent over the month to $33.9 billion at end-October.

Total customer deposits grew 20.8 per cent over the year to $311.9 billion at end-October, while total loans grew just 15.5 per cent to $224.1 billion.

On a monthly basis, however, loans growth has outpaced growth in deposits since June. Over the month of October, loans grew 2.4 per cent compared to 1 per cent for deposits.

With the rapid expansion in loans, the ratio of loans to deposits in the banking system has recovered slightly to 71.8 per cent at the end of October, after falling as low as 67.1 per cent at end-May - the lowest in the published MAS data series, which started in Jan 1991.

Overall, loans to businesses grew at a faster pace than consumer loans, both on a monthly basis and when compared to a year ago.

Loans to businesses grew 18.5 per cent over the year and 2.6 per cent over the month to $120.1 billion. Other than the building and construction industry, the rapid growth in business loans was mainly due to expansion in loans to financial institutions and to the transport, storage and communications sector.

Meanwhile, consumer loans expanded 12.2 per cent over the year and 2.2 per cent over the month to $103.9 billion, driven mainly by the surge in home loans. Share financing and credit card lending also continued to grow, although these account for less than 8 per cent of total consumer loans.

The number of credit cards in circulation grew 15.3 per cent over the year and 2.4 per cent over the month to 4.45 million at end-October, excluding supplementary cards. But the total credit card rollover balance - that portion of the credit card debt that is subject to interest charges - dipped slightly over the month to $2.85 billion.

Source : Business Times - 1 Dec 2007

Urban Redevelopment Authority (URA) said it will set aside 60 hectares - the Marina South Residential District (MSRD) - for 11,000 homes.

A LOW-RISE eco-village, canal streets, a coastal shopping promenade and terraced communal green roofs - coupled with dramatic views and contrasting skylines. This is the living environment suggested by the winning entrants in a competition to get ideas on how Marina Bay should look.

In September, the Urban Redevelopment Authority (URA) said it will set aside 60 hectares - the Marina South Residential District (MSRD) - for 11,000 homes.

A design competition to inspire innovative ideas to distinguish the area was announced at the same time.

When the competition closed on Nov 12, 30 entries had been received from local and overseas architects. Foreign submissions came from Hong Kong, Australia, Indonesia, India and the US.

Four schemes have been selected and another two received special mention. The winners are Hong Kong’s Compass Studio and Singapore’s Khoo Teik Rong, SKPS-Project and Surbana. Special mention was given to Australia’s Chor and Singapore’s ZONG Architects.

The four winners will get $10,000 and the two special mention schemes $5,000.

‘We are impressed with the numerous interesting and novel ideas from the competition,’ said URA’s director for urban planning and design Fun Siew Leng.

‘They will serve as a starting point to stimulate reflection and inspiration to develop Marina South into a distinctive waterfront garden district for generations to come.’

MSRD will also have 1.6 million sq ft set aside for hotel use and 678,000 sq ft of commercial space. The entire project will be developed over 15 to 20 years, once supporting infrastructure has been put in place.

Source : Business Times - 1 Dec 2007

Marina South Residential District

IT’S been a hazy vision up to now but the first stunning proposals for the Marina South Residential District, unveiled yesterday, indicate that a design revolution is brewing on Singapore’s waterfront.

The four proposals - picked from a design competition that attracted 30 entries from India to Australia - promise an intoxicating cocktail of architectural flamboyance and ecological innovation in what has been touted as Singapore’s future No. 1 residential hot spot.

It is the first time a design competition has been held as part of the planning process for a residential district here.

And the ideas thrown up have not been seen here before: They include elevated condominiums, terraced buildings resembling cascading gardens, and ‘floating’ housing blocks with Amsterdam-style canals.

The winners, who each get $10,000, include local architecture firm Surbana, Hong Kong’s Compass Studio and national serviceman Khoo Teik Rong, an architecture graduate from Melbourne’s RMIT University.

The designs remain just suggestions at this stage and may not be part of the final plan, but they serve as a striking starting point for the ambitious project.

The Urban Redevelopment Authority (URA) will now compile a final plan for the 60ha site, which will be developed over 15 to 20 years and will have up to 11,000 homes.

The competition, organised by the Singapore Institute of Architects (SIA) and the URA, asked entrants to unscramble what amounted to a Rubik’s cube of design challenges.

At the basic level, 11,000 housing units had to be incorporated with commercial, hotel and community facilities on a prime site near the upcoming Gardens at Marina South and Marina Bay Sands integrated resort.

But proposals had to show how high-density living could be achieved while retaining the ambience of a waterfront garden.

The judges also looked for environmental sustainability and a sense of community, while calling for designs that would allow Marina South to showcase the City in a Garden vision.

Mr Khoo, 23, drew on inspiration from a visit to Amsterdam and opted for canals to run through the site to make the area more intimate.

‘I didn’t want a site that would have only large-scale buildings,’ he said.

The Surbana team had a ‘green and blue’ strategy. Green in the form of plants on the roofs of low-rise buildings, which would be terraced to give the appearance of gardens sloping to the marina.

Blue covered their housing idea - 30- to 50-storey-high blocks placed on shallow pools, making them appear to float on water.

Compass Studio, meanwhile, used hills as its inspiration - it wanted high-rise buildings to resemble hills that meet the lower plains. It also proposed a low-rise eco-village.

The fourth winner was SKPS-Project, a group of five architects, mostly from Singapore. They proposed lifting residential blocks 30m above the ground and planting trees underneath.

Reacting to the designs, Mr Mink Tan of Mink Architects said they were visually evocative, with ‘a mix of everything’. ‘If done successfully, this can be a…shining example of Asian urban living.’

Ex-SIA president John Ting of AIM & Associates was encouraged by the designs, but said more refinement was needed. He suggested the land can be split into smaller parcels and various architects let loose: ‘Then we can learn how to work the land better.’

Property developers and consultants were more hardheaded, telling The Straits Times that it was too early to judge if the designs were commercially viable.

The 30 entries are on display at City Hall until Dec 8.

Source : Straits Times - 1 Dec 2007

WATERFRONT-GARDEN living that’s just minutes away from the city.

WATERFRONT-GARDEN living that’s just minutes away from the city. That is what residents at the future Marina South Residential District can expect.

No date has been set for when people can move in.

The Urban Redevelopment Authority (URA) has set aside 60ha of land between Gardens at Marina South and the Straits of Singapore, which will host some 11,000 homes, with a mix of commercial, hotel and community facilities for all to enjoy.

To get ideas for this project, the URA and the Singapore Institute of Architects (SIA) held a competition in September.

Open to students and professionals in planning, architecture and landscape, both locally and internationally, it drew 30 entries.

Participants had to illustrate how high-density living can co-exist with a waterfront garden concept, and set a new landmark in residential development.

A five-member panel, including Mr Tai Lee Siang, SIA president, and Ms Fun Siew Leng, director of urban planning and design at URA, chose four winners who each won $10,000.

The winning ideas will serve as an inspiration and catalyst for the masterplan.

Tay Suan Chiang

The four winning and other entries are on display at City Hall, Level 3 Chambers, till Dec 8, from 10am to 10pm. Admission is free.

Design by Surbana, Singapore

THIS proposal adopts two broad housing strategies.

The first is the Blue strategy, where 30- to 50-storey-high residential towers sit directly on a vast expanse of water in a radial manner. This allows residential owners to have breathtaking views.

Carparks and vehicle movements will be limited to the basement levels, freeing up the ground level for water-themed playgrounds.

In the second Green strategy, most of the rooftop spaces will be semi-public gardens. Public gardens and spaces are also carved out between apartment blocks, creating a closeness to nature.

An internal canal system will allow residents to take boat rides around the area.

Design by Compass Studio Limited, Hong Kong

The overall design of this proposal resembles rolling hills - depicted by high- rise residential blocks of various heights - that overlook a low-rise village.

The towers are arranged such that they have views of the Gardens at Marina South and the seafront.

Connecting the buildings are several high-level terraces called ‘Sky Cloud Gardens’, and they will be used for leisure activities.

Nearer the waterfront will be a low-rise eco village. Traffic here is restricted to green means of transportation, preferably electric cars.

Design by SKPS Projects, Singapore

The focus here is on creating more open areas and creating a waterfront space for communal and commercial use. Garden decks will link this area to the Gardens at Marina South.

The residential buildings will be lifted 10 storeys above ground, so the space below can be used by the public. There are also plans to plant rainforest

Design by Khoo Teik Rong, Singapore

Khoo Teik Rong was inspired by the many canals he saw in Amsterdam and wanted to recreate the same atmosphere. His canals will be artificially created and connect the Gardens at Marina South to the sea.

There are also plans for the canals to be lined with street-level shops.

His residential blocks will consist of high-rise ones as well as townhouses and waterfront homes.

Source : Straits Times - 1 Dec 2007

THE Strata Titles Board (STB) threw out the collective sale application of Finland Gardens in Siglap

THE Strata Titles Board (STB) threw out the collective sale application of Finland Gardens in Siglap after it failed to meet statutory requirements.

The rare decision to axe a bid for a sale en bloc followed five days of hearings that took place in July and early September.

The STB delivered its decision on Wednesday in an oral announcement but has yet to disclose the grounds for rejection. It may do so at a later date.

Mr Denis Tan, the lawyer for the owners objecting to the sale, heard the oral announcement. He said: ‘The board dismissed the application on the grounds that it found there was no 80 per cent majority and that the sale price was not obtained in good faith.’

The Finland Gardens sale required approval from at least 80 per cent of the owners.

Mainboard-listed company Sing Holdings bought the freehold 48-unit site in November last year for $49.5 million. The owners of each unit would stand to reap about $1 million to $1.27 million, depending on the size of the unit.

The owners of eight units objected to the sale; their grounds included not getting the best possible price for the estate.

In addition, they argued that a higher offer had come in after Sing Holdings’ offer, but the sale committee, instead of asking Sing Holdings to come up with a better price, had simply asked the company to match the later offer.

Clinic manager Valerie Chia, 46, said she and owners of the other seven units had objected to the sale from the start, more than a year ago.

The managing director of Sing Holdings, Mr Lee Sze Hao, said he would be asking the majority owners to file an appeal against the STB decision.

An industry observer said the ruling is significant because there is a general perception that collective sales are usually approved.

‘If you look at collective sale rules, their purpose is to facilitate such sales,’ he said.

Finland Gardens, located in the Siglap area at East Coast Avenue and East Coast Terrace, has a land area of 98,309 sq ft.

It comprises 48 units of walk-up apartments housed in two three-storey blocks.

Sing Holdings partnered Forum Asian Realty Income II to buy the estate. The United States-based fund holds a 30 per cent share of the joint venture.

In late October this year, the STB threw out the collective sale application for Airview Towers at St Thomas Walk.

Developer Bukit Sembawang, which had agreed to pay $202.17 million to buy the site in April, said recently that the application had been dismissed on a technicality. The sellers are planning to file an appeal, it added.


The STB vetoed the collective sale bid in an oral decision after five days of hearings in July and early September. It has yet to disclose the grounds for rejection but may do so at a later date.

An industry observer said the ruling is significant because there is a general perception that collective sales are usually approved.

Mainboard-listed Sing Holdings bought the site last November for $49.5 million. The owners of each unit would stand to reap up to $1.27 million.

The managing director of Sing Holdings, Mr Lee Sze Hao, said he would be asking the majority owners to file an appeal against the STB decision.

Source : Straits Times - 1 Dec 2007

The dismissal puts a damper on Sing Holdings and Eastern Summer, which had formed a joint venture company a year ago to make the acquisition.

ANOTHER en bloc sale has been thrown out by the Strata Titles Board (STB), after minority objectors claimed — among other things — that the sale had been rushed and was not conducted in “good faith”.

The board on Thursday dismissed an en bloc application by the majority owners of Finland Gardens, without issuing any written grounds of judgment.

The dismissal puts a damper on Sing Holdings and Eastern Summer, which had formed a joint venture company a year ago to make the acquisition.

Eight out of 48 owners at the 98,309-sq-ft development at East Coast Terrace and opposed the sale and started legal proceedings.

In their final submissions, the objectors’ solicitors argued that there was no 80-per-cent majority as three owners in the majority did not agree to sell at $49 million, which was the agreed sale price of the majority owners.

The three had only agreed to sell at $52.7 million. However, the solicitors pointed out, the three owners were later asked to sign documents that lacked reference to any reserve price, but instead “set the individual price that each of the three was to receive”.

This, it was pointed out, had allowed the sale committee and sale agent Credo Real Estate to “sell at a price that did not concern the three owners, so long as they are paid their agreed price”.

The objectors also alleged that the prices were not arrived at competitively and that the sale committee had rushed the sale of Finland Gardens when there was no reason to — since real estate prices were escalating.

They pointed out that when a competing bidder, RV Capital, upped its offer from $46 million to $49.5 million, Credo executive director Karamjit Singh had asked Sing Holdings — which had offered $49 million — to match this price, and then closed the deal “without giving any opportunity” to RV Capital to better its offer.

Indeed, another bidder had later tried to offer $50.5 million, the solicitors said, describing the sale committee as being “in dereliction of its duties to the owners who had given it the mandate to secure the best possible price in the market”.

When contacted, the lawyers for the majority owners could not comment as they are awaiting the grounds of the STB’s decision.

In a filing with the Singapore Exchange, listed company Sing Holdings said the application was dismissed on the grounds that statutory requirements had not been fully complied with.

It said it and its partner in the acquisition, Eastern Summer, were deliberating on the STB’s decision and reserved the right to direct the Finland Gardens owners to appeal against the decision.

Despite the prospect of an appeal, minority property owner Valerie Chia is optimistic.

Describing her mood as “ecstatic”, Mrs Chia said she had opposed the sale as she had bought her four-bedroom apartment during the peak of property prices in 1996 for $1.22 million. She would have received just $1.268 million in the sale, she said, and after forking out legal and stamp duties, would have lost out.

The case follows a string of en bloc tussles, including the Horizon Towers deal, initially thrown out because of irregularities and now awaiting a High Court decision.

Source : Weekend - 1 Dec 2007

Missing lawyers

THE tally continues to rise. About $6 million may have gone missing together with lawyer Zulkifli Amin, who disappeared last week.

Police are now looking into how much of the missing money belonged to clients, among other things.

Mr Zulkifli, a lawyer of about seven years’ standing, skipped town last week.

His two other partners in the firm, Sadique Marican & ZM Amin, alerted the Law Society and the police.

Several clients also showed up at the firm’s office in Raffles City last week complaining of bounced cheques and stalled property deals.

While police investigations are ongoing, the Law Society has also moved in to examine the firm’s clients’ account.

The firm’s lawyers are also helping affected clients work out alternative arrangements.

The case has become a talking point in legal circles as it is the first since new rules came into force this year to protect clients’ money.

Among the new rules: two signatures are needed to withdraw sums higher than $30,000.

The rules kicked in after ex-lawyer David Rasif fled with more than $12 million of clients’ money last year.

But unlike Rasif, who had a one-man firm, Mr Zulkifli worked in a partnership, which means the remaining two partners may have to make good the loss.

There was a similar case about a decade ago when one lawyer faced a similar dilemma after his partner, Lim Yee Kai, made off with around $417,000 in clients’ money.

Lim is still on the run.

His partner ended up paying about $400,000 of a debt that soared to some $600,000 when legal and insurance costs were factored.

He could not keep up with the payments and was made a bankrupt in 2003.

But partners can be exempted from liability in some instances, said lawyer Manoj Nandwani. This can happen if they can show they were not aware of the fraud committed by a colleague or did not turn a blind eye to what was happening, he said.

Asked if the new rules needed more teeth in light of the latest incident, lawyer Montague Choy said: ‘You may change the rules… but then someone might show up to work around whatever’s new in place to the point where there are so many rules that it becomes not commercially viable to operate.

‘I do not think the problem is with the rules.’

Lawyer Amolat Singh said the case could trigger a move for clients’ deposits to be held by a separate stakeholder, rather than by lawyers.

‘We are the only profession required to hold such money, unlike doctors or accountants, who do not have to be part-time bankers.’

Source : Straits Times - 1 Dec 2007

UNITED Engineers (UE)

UNITED Engineers (UE) has won a new project at Changi Business Park with an estimated development cost of $280 million.

The company said yesterday that its wholly owned subsidiary, United Engineers Developments Pte Ltd (UED), has been awarded the Built-to-Suit project by the Jurong Town Corporation (JTC).

The project involves UED undertaking a development to be named the Global Centre for Information and Communication (Centric Singapore).

This will comprise four main components: a business centre to house 200 IT companies; an IT training hub comprising exhibition and convention halls, an auditorium and seminar rooms; a business hotel with 200-300 rooms; and office and retail space.

The development is part of JTC’s master plan to build the Changi Business Park into an active urban development with two separate activity hubs linked by an attractive green garden environment with kiosks, sculptures and performing venues, UE said.

Centric Singapore will be sited on a land area of 29,000 square metres with an expected built-up gross floor area of 72,500 sq m.

Centric Management AG, Switzerland, an ICT hub specialist, will be the anchor tenant for the business park space.

‘With an unbeatable location at the Changi Business Park at the interchange of the existing Expo MRT station and the new MRT station to be built under the future Eastern Region Line, the project is sited at an extremely attractive catchment area, and is ideally positioned to become an Information and Communication Technology (ICT) hub,’ UE said.

Construction is slated to commence in 2008, and targeted for completion in 2011.

Source : Business Times - 1 Dec 2007

Sino Group, one of Hong Kong’s largest developers

THERE is little danger that Singapore’s high-end property prices will affect its cost competitiveness, said a panel promoting the country’s real estate prospects.

Mr Daryl Ng, the executive director of Sino Group, one of Hong Kong’s largest developers, said it was healthy that prices of top-end homes in Singapore have finally caught up with those in other global cities such as New York and London.

‘There is good value in Singapore…where prices were a laggard compared with those in other international cities,’ he said yesterday at Mipim Asia, a major property conference and exhibition being held in Hong Kong this year.

Mr Ng is the son of Sino Group chairman Robert Ng and the grandson of group founder Ng Teng Fong.

The panel was addressing a question from an audience member on whether Singapore’s costly homes would price the city out, especially as some Orchard Road flats now cost twice as much as apartments near New York’s Times Square.

The head of property firm Savills Singapore, Mr Michael Ng, noted that while Singapore homes might be getting pricey, they are still nowhere near the world’s costliest residences.

There is still some way to go before they hit prices such as $15,000 per sq ft (psf), fetched recently in London, he said.

Mr Richard Johnson, who heads the Istithmar Real Estate fund, added that high prices are simply part of a market cycle. ‘We’re at the top of the cycle in Singapore. It’s just tough luck.’

An official from Singapore’s Urban Redevelopment Authority (URA) noted that while high-end homes have exceeded $5,000 psf, there are still ‘good quality, suburban homes available for $500 to $600 psf’.

‘What we are seeing now is market segmentation,’ said Mr Marc Boey, a deputy director at the Singapore agency.

‘Compared with the 1990s, we are now seeing demand not just from Indonesians and Malaysians but also from people in Monaco, London and the Middle East.’

Mr Boey also told The Straits Times that the URA and the Singapore Tourism Board were in Hong Kong to woo hotel developers that have little or no presence in Singapore, ahead of a revised Government Land Sales programme due out in two weeks.

The programme opens sites to developers for bidding.

Many companies have expressed keen interest in building hotels, ranging from smallish ones of about 300 rooms to those with about 500 rooms, said Mr Boey.

Source : Straits Times - 30 Nov 2007

HO BEE Group and Banyan Tree Holdings have won two of the seven categories in the inaugural Mipim Asia Awards held in Hong Kong.

HO BEE Group and Banyan Tree Holdings have won two of the seven categories in the inaugural Mipim Asia Awards held in Hong Kong.

Mipim, the Marche international des professionnels de l’immobilier, is a real estate and city development fair that also honours innovative and outstanding buildings.

Over 100 projects from 15 different countries across the Asia-Pacific region were submitted to the Mipim Asia Awards.

‘The quality of the final projects is a testimony to the high standards in Asian real estate today,’ commented Robert Lie, president of the jury and chairman of ING Real Estate Investment Management Asia (Hong Kong).

Ho Bee on Wednesday won in the Residential Developments category with its Sentosa development, The Berth by the Cove, by architects Axis Architects Planners.

This is the first award for The Berth, and Ho Bee general manager of marketing and business development Chong Hock Chang added that it is also ‘the first true waterfront housing in Singapore’.

He said: ‘The development is designed such that you either face the vast South China Sea or the enchanting waterways within the Cove. Further, it is also the first of its kind to have its own berthing facilities.’

On the efforts of Axis Architects, Mr Chong said: ‘They may be a local architect but the team has proven themselves to be able to compete against the best in the region by helping us bag this prestigious award.’

Banyan Tree Holdings won in the Hotels and Tourism Resorts category with its Banyan Tree Lijiang in China by Architrave Design & Planning.

Banyan Tree managing director (Design Services) Ho Kwoncjan explained that each Banyan Tree Resort is designed to blend into its natural surroundings, using indigenous materials as far as possible and reflecting the landscape and architecture of the destination.

‘Whether redesigning rustic Tibetan farmhouses as lodges, or visualising a resort within an intimate village setting, we promote the uniqueness of indigenous cultures,’ he said.

Source : Business Times - 30 Nov 2007

MACARTHURCOOK Industrial Reit (MI-Reit)

MACARTHURCOOK Industrial Reit (MI-Reit) has signed an agreement to acquire an office and warehouse facility in the Tai Seng industrial precinct for $25 million.

Under the agreement, Powermatic Data Systems, which is listed on the Singapore Exchange, will lease back the property at 135 Joo Seng Road for five years with the option to extend for another five years. The lease will commence upon the completion of the acquisition, which is scheduled for February 2008.

The property was transacted at the initial yield of 7.3 per cent, and will be accretive to MI-Reit’s distribution per unit following completion, said MacarthurCook Investment Managers (Asia) Ltd (MCKIM), the manager of the Reit.

Chris Calvert, CEO of MCKIM, said: ‘We are pleased with the acquisition of 135 Joo Seng Road. The inclusion of SGX-listed Powermatic as one of our tenants further enhances our portfolio, of which approximately 70 per cent is comprised of SGX-ST listed companies or their subsidiaries.

‘This acquisition provides unitholders with the twin benefits of medium to long-term income stability and also the opportunity for capital and rental value growth, which will form the steadily increasing demand for quality office accommodation in the Tai Seng industrial precinct.’

The inclusion of the property in MI-Reit’s portfolio will further contribute to income stability through enhanced tenancy and property diversification, and reduced exposure to its largest tenant, UE Tech Park Pte Ltd, from 31.6 per cent to 29.4 per cent of portfolio income, MCKIM said.

With the latest acquisition, MI-Reit will have total investments of approximately $642.6 million in 22 properties.

It intends to finance the acquisition wholly with debt but may consider alternative means of funding as appropriate. Assuming 100 per cent debt financing, the acquisition will increase MI-Reit’s committed gearing level from 36.7 per cent to 39.5 per cent.

Source : Business Times - 30 Nov 2007

JTC Corporation said yesterday it has awarded two industrial sites - one at Commonwealth and the other in Jalan Tepong.

JTC Corporation said yesterday it has awarded two industrial sites - one at Commonwealth and the other in Jalan Tepong.

The 120,300 sq ft site at L1 Commonwealth Drive/Lane went to WHB Pte Ltd, which submitted the highest of 14 bids received. WHB paid $51.2 million, or $170 per square foot per plot ratio (psf ppr). The 30-year leasehold site has a 2.5 plot ratio, giving it a maximum floor area of 300,700 sq ft.

The Jalan Tepong site was awarded to EL Development, which is fully owned by Evan Lim & Co Pte Ltd. The company submitted the highest of six bids received. It paid $9.5 million, or $30 psf ppr, for the site. The 23-year leasehold site has a land area of 224,600 sq ft and 1.4 plot ratio, giving it a maximum floor area of 314,500 sq ft.

The tender for the L1 Commonwealth Drive/Lane parcel was launched on Sept 21 and closed on Nov 2. The tender for the Jalan Tepong parcel was launched on Sept 28 and closed on Nov 9.

JTC is Singapore’s biggest industrial landlord.

Source : Business Times - 30 Nov 2007

Singapore Land Authority (SLA) yesterday auctioned off six 99-year leasehold residential land parcels for some $30.6 million

THE Singapore Land Authority (SLA) yesterday auctioned off six 99-year leasehold residential land parcels for some $30.6 million in all - but some of the sites went for bargain prices.

A 16,690 sq ft good class bungalow (GCB) site at Eng Neo Avenue was picked up by a buyer for at the starting auction price of $6 million - which works out to $360 per square foot (psf). The buyer, Foo Chee King John, said that he was lucky to have won the site at such a good price.

‘Leasehold land on Sentosa can go for over $1,000 psf,’ he pointed out. The land, he said, is for his own private use.

And another GCB plot, also on Eng Neo Avenue, was sold to individual buyer Hu Nan Lee for $12.1 million - significantly above the starting price of $9.5 million. But the 29,200 sq ft site was still considered a good buy as it went for $414 psf.

The auction was SLA’s first for infill sites, the government agency said. Over 120 individuals and companies turned up for the auction, including professionals, businessmen, construction companies and niche developers.

Other than the GCB sites, SLA also auctioned off one other site in one of Singapore’s prime districts - a 6,290 sq ft semi-detached housing plot Moonbeam Walk, which is in District 10. The site fetched $3.9 million (as compared to the starting bid of $3.3 million), which works out at $626 psf.

The three other sites, at Somme Road, Jalan Insaf and Bedok Close went for $3.8 million, $3.5 million and $1.3 million respectively. The price works out to $353 psf for the Somme Road site, $508 psf for the Jalan Insaf site and $307 psf for the land parcel on Bedok Close.

The Somme Road plot proved to be the most popular of the six land parcels on offer and there were altogether 64 bids before it was awarded to Sarda Pte Ltd.

‘We are very encouraged by the strong bids shown at this auction,’ said SLA chief executive Lam Joon Khoi. ‘We will consider releasing more infill sites to help meet the current market demand for high quality residential properties.’

Source : Business Times - 30 Nov 2007

Singapore Land Authority’s (SLA) first auction of residential ‘infill’ sites.

MORE than 120 eager buyers yesterday crowded into a room at M Hotel hoping for a bargain deal at a first-of-its kind auction of six small plots of land.

The buyers were mostly hoping to buy a plot on which to build their own dream home.

And after some brisk bidding, six of them each left with a 99-year leasehold plot - some with what they saw as bargains.

The plots sold at prices from $1.3 million to $12.1 million, for a total of $30.64 million.

It was the Singapore Land Authority’s (SLA) first auction of residential ‘infill’ sites.

‘Infill’ sites are pockets of state land, located in the midst of an established housing estate, that have been left untouched by nearby developments or were once used for public purposes.

The six sites were mostly hotly contested, reflecting strong interest in the attractively-priced sites.

The bidders included professionals, businessmen, construction firms and niche developers, said SLA in a statement.

Included in an SLA sale for the first time were two good- class bungalow (GCB) parcels, which were sold to individual buyers for up to $12.1 million.

Still, one of the two top-end plots - a 16,689 sq ft site - attracted just one bidder. Fund manager John Foo met with zero competition when he bought the smaller of the two plots at Eng Neo Avenue for $6 million or $359.50 per sq ft (psf).

He reckoned he got a good deal for the site, which is for his own use. ‘Sentosa leasehold plots can be over $1,000 psf while District 10 GCB plots are going for $800 to $1,000 psf.’

The other GCB plot, at 29,201 sq ft in size, attracted more bidders. Bids came in hefty $50,000 increments but bidders did not hesitate long as they fired in a total of 52 bids, driving the price up from $9.5 million to $12.1 million.

The interest is not surprising, given that GCB sites, particularly one as big as 29,201 sq ft, are quite rare, said Ms Mok Sze Sze, Jones Lang LaSalle’s director and head of auction and sales.

The successful buyer, Ms Hu Nan Lee, is a Singaporean who is overseas. Her representative said it is meant for her own use.

Of the six plots, the most popular was one at Somme Road. It attracted a whopping 64 bids before local firm Sarda clinched it at $3.76 million.

Sarda’s price was 52 per cent above the $2.48 million opening bid for the 3,547 sq ft residential site, which comes with commercial use on the first floor.

A 6,971 sq ft site in Jalan Insaf, suitable for a pair of two-storey semi-detached houses or a bungalow, was sold to Lye Holdings for $3.54 million, up from the starting bid of $2.9 million.

Avadh, another firm, paid $1.3 million for a 4,228 sq ft site in Bedok Close, suitable for a two-storey bungalow. The opening bid was $880,000.

Both Sarda and Avadh have a shareholder in common: Mr Shriniwas Rai, the veteran lawyer and former Nominated Member of Parliament.

Another firm, Liverland Investments, bought a 6,293 sq ft Moonbeam Walk site for $3.94 million. Bids for the site, which can be used to build a pair of two-storey semi-detached houses, opened at $3.32 million.

Ms Mok said the strong response shows people are open to buying leasehold plots to build their dream homes.

SLA’s chief executive, Mr Lam Joon Khoi, said: ‘We will consider releasing more infill sites to help meet the current market demand for high quality residential properties.’

Source : Straits Times - 30 Nov 2007

Asia Real Estate Prime Development Fund and aims to make $400US million ($578S.2 million)

SINGAPORE-BASED investment firm Pacific Star has shrugged off concerns about global share markets to launch a fund that banks on Asia’s property prospects.

The company has set up the Asia Real Estate Prime Development Fund and aims to make $400US million ($578S.2 million) worth of real estate investments.

The fund will invest in prime residential apartments, serviced residences and mixed development projects in Singapore, China, Hong Kong, Malaysia, Thailand, South Korea and Japan.

Its first deal is under way - the purchase of a 49 per cent stake in two Bangkok freehold residential projects. The developer is Asian Property Development, one of Thailand’s largest listed residential property developers.

Both projects will target local buyers in the upper-middle-income group.

Pacific Star, although one of the newer property fund houses in Asia, is growing fast. It has launched three other funds, including the $580US million Eureka Office Fund, which owns commercial properties such as Temasek Tower, One George Street and The Adelphi.

It was also behind the Macquarie Meag Prime Real Estate Investment Trust, which is listed in Singapore and owns stakes in shopping malls Wisma Atria and Ngee Ann City.

Source : Straits Times - 30 Nov 2007

Marina Bay may be the next big thing.

TIRED of Orchard Road? Jaded by Clarke Quay? Finding Robertson Walk just a trifle same-old, same-old? For the Singapore consumer - probably among the most avid in the world - Marina Bay may be the next big thing.

The new downtown will be home to a casino, a financial centre and several sparkling condominiums, so not surprisingly, shops and restaurants are eager for a presence there.

‘The Marina Bay area presents many exciting opportunities for both the business and leisure market,’ said Sulian Tan-Wijaya, general manager of The Fullerton Heritage, which is developing a string of commercial properties along the waterfront.

‘Our development is at the heart of the Central Business District, the Marina Bay Sands casino, the Esplanade theatres, new high-end residences like The Sail and The Clift, and the nearby Civic District,’ she said.

Edgar Huang, manager of marketing services for Esplanade - Theatres on the Bay, said the arts-performance centre expects to see ‘even more buzz in the area, with more people coming to work and live and play here’. The theatres, open since 2002 and famous for their domes that have been likened to durians, are also adjacent to a shopping mall.

David Martin, general manager of Marina Bay Financial Centre (MBFC), which will consist of high-rise office towers as well as retail space, estimates there will be 50,000 people living and working in the ‘immediate vicinity’ of the financial hub from 2011.

Along with the visitors who are sure to flock to the adjacent Sands, ‘we believe this creates a compelling offer to potential retail tenants, and this is also the feedback we are getting from the market’, he said.

Events being held in and around the public areas of Marina Bay will also help draw in the crowds, said the Esplanade’s MrHuang.

‘Marina Bay is also currently host to many celebrations like National Day, the Fireworks Festival and the New Year’s Day celebrations,’ he said.

Upcoming events like the Chingay street parade and the Grand Prix Formula One race, which Singapore will host in September next year, will also attract visitors, he added.

To entice what promises to be a diverse range of consumers, each developer is adopting a slightly different marketing tack.

The Fullerton development, for example, is aiming to be high-end and historical.

‘In addition to the Fullerton Hotel and a new waterfront 100-room luxury hotel, the Fullerton Heritage Precinct will offer a range of chic, trendy and elegant retail and dining experiences,’ said Ms Tan-Wijaya.

‘These include conservation buildings such as The Fullerton Waterboat House, Clifford Pier and Customs House, as well as One Fullerton,’ she said.

One Fullerton will revamp its second floor and offer even more food and beverage outlets, which should attract tourists who visit the nearby Merlion Park, she said.

The Esplanade is pitching itself as a kind of natural retail extension for the arts lover. ‘It’s a lifestyle experience pegged to the arts,’ said Mr Huang.

‘Besides coming here for a show, you can start or end your evening with drinks and food,’ he added. ‘There are many shops closely related to the arts for art lovers, and those unfamiliar with the arts won’t feel out of place either.’

Mr Huang said that business at the Esplanade has been bustling since its inception.

‘It’s been positive here at Esplanade Mall,’ he said. ‘The Esplanade also presents over 70 per cent of our artistic programmes free, which means visitors will always have something to look forward to after a meal or a visit to the shops.’

He said that some of the main attractions of the mall are the food centre Makansutra Gluttons Bay, award-winning restaurant My Humble House and library@esplanade, Singapore’s first performing-arts library.

Not forgetting the small but unusual Tatami Shop - ‘the world’s first tatami furnishings retailer outside Japan’, said Mr Huang.

Suntec City Mall, which welcomed its first customers in 1997, says its retail concept is ‘a little something for everyone’. The shopping centre’s larger tenants include hypermarket Carrefour and fashion retailers Mango, La Senza and Lacoste. It also boasts the gigantic Fountain of Wealth, which attracts visitors from all over the world.

‘Also, Suntec City Mall houses the embarkation point for the many tourists going for the Duck Tours and Hippo tours,’ said Marilyn Tan, investor relations manager at ARA Trust Management (Suntec).

As for the MBFC, Mr Martin said the financial hub aims to be ‘a vibrant and prestigious, yet convenient, shopping and dining precinct for the internationally-minded’.

Retail in the MBFC would address a ‘market gap’ in the central business district for serving the needs of higher-income earners and residents, he said. ‘This group of customers wants much more than what a conventional mixed-use centre offers. MBFC is designed as a place where residents, the office population and visitors can satisfy their everyday needs without leaving the business and financial district.’

Of the development’s 160,000 sq ft of underground retail space, about half will be for shops and the other half for food and beverage, he said. In addition, there will be a restaurant on the 33rd floor of the Tower One office block.

‘MBFC is in talks with a number of leading retail interests to be located within the centre,’ he said. The development will offer dining and entertainment options for ‘a spectrum of tastes’.

Then, of course, there is Marina Bay Sands, which will open in 2009. Its developers, Las Vegas Sands, declined to comment at this stage on the specifics of upcoming shops and restaurants.

Besides the casino, the entire integrated resort, as it is called, will feature three 50-storey hotel towers, linked by a two-acre Sky Garden. Not to mention an Arts and Sciences Museum shaped like a welcoming gesture, and one-million square feet of ‘integrated waterside promenade and shopping arcade’, according to its website.

Clearly, there will be loads of shopping and dining opportunities there. So hang on to your hats, Singapore consumer - if not your purses.

Source : Business Times - 29 Nov 2007

Segar Meadows in Bukit Panjang town and Compassvale Beacon in Sengkang town comprise a total of 1,162 flats.

Board may offer another 6,000 units through build to order scheme.

The Housing and Development Board will continue to monitor demand and could offer another 6,000 units through its build-to-order (BTO) system. However, prices are also likely to go up.

Saying that he did not want to ‘fudge the issue’, National Development Minister Mah Bow Tan said: ‘Prices will go up as a result of resale prices going up.’ Mr Mah was speaking at the launch of two new housing projects under the BTO system.

The projects, Segar Meadows in Bukit Panjang town and Compassvale Beacon in Sengkang town comprise a total of 1,162 flats.

Three- and four-room flats (68 sq m-93 sq m) at Segar Meadows will cost between $116,000 and $231,000, while two- to four-room (48 sq m to 97 sq m) flats at Compassvale Beacon will cost between $69,000 and $233,000.

Although the precise formula for fixing prices was not revealed, Mr Mah explained that it would be based on average resale prices rather than the ’spectacular prices’ reported for some flats recently.

Mr Mah also let on that he had received a few letters and e-mails from constituents saying that they had not been successful in getting flats through the BTO system.

But he reiterated that the government was committed to providing a variety of affordable public housing to meet the ‘aspirations’ of first-time buyers and young couples.

To this end, he revealed that 4,800 units have been launched through BTO this year, twice the number compared to 2006.

On affordability, Mr Mah said that the majority of households spent a manageable 20-25 per cent of their monthly household income servicing loans for their flats. He also added that since the implementation of the Additional Housing Grant scheme in March 2006, 4,100 eligible households have benefited from grants amounting to about $50 million.

And demand from first time buyers has been strong. According to HDB, about 92 per cent of those who applied for the 4-room flats for the two BTO launches in August and September and were successfully short-listed within the first 100 per cent flat supply were first timers.

Mr Mah also had this advice for those looking to buy a flat now: ‘If you cannot afford a big flat, then buy a smaller flat. If you can’t get a new flat, then get a resale flat. In life, we make trade-offs all the time.’

To meet the needs of the ’sandwiched class’, Mr Mah revealed that HDB will be making more sites for executive condominiums (ECs) and the Design, Build and Sell scheme (DBSS) available in the first half of 2008.

Up to three EC sites with a total of 1,300 units, and four DBSS sites with a total of 1,900 units are set to go on the reserve list of Government Land Sales Programme for H1 2008.

Knight Frank director (research and consultancy) Nicholas Mak said that the supply of more public housing flats could cool resale flat prices but the impact will be felt next year. ‘It could be a signal that the government will release more sites to control runaway prices in the resale market,’ he added.

Managing new supply and demand will be a tricky job for HDB because it does not want to be stuck with a surplus of flats.

A tight hold on supply could, however, push up prices.

But demand seems stable. Mr Mak points out that so far, demand as measured by the number of applications received for new flats between 2000 and 2007 has ranged from 7,900 to 13,800. This pales in comparison to the 60,000 to 70,000 applications received in the mid-1990’s, he said.

Mr Mak also added that he expects the impact on the private property market to be minimal.

Source : Business Times - 29 Nov 2007

THE Lippo Group should be familiar to Singaporeans by now

CHOW PENN NEE speaks to Lippo Group’s Stephen Riady whose business acumen has led the firm make several strategic property investments.

THE Lippo Group should be familiar to Singaporeans by now, with its brand name plastered on more than a dozen property developments across the island, and less obviously, behind the ownership of retailers Robinsons and River Island.

At the helm of Indonesian conglomerate Lippo’s business empire in Singapore is Stephen Riady, whose entrepreneurial spirit is well known.

Mr Riady, executive director of Auric Pacific Group, clinched the Strategic Investment Entrepreneur of the Year award in Ernst & Young’s Entrepreneur of the Year Awards for Singapore this year. Among the criteria for the award are traits like strong financial performance, personal integrity and entrepreneurial spirit.

His group’s move into property has been strategic, given current, sky-high property prices, and the fact that he went into the market much earlier on.

‘We started off with the purchase of Lippo Centre on Shenton Way at the end of 2004,’ Mr Riady told BT in an earlier interview. ‘You think people come to us asking us to buy? No. We went out, and at that time, there were no bidders,’ he recounted.’Wise investors are those who have a vision, they are the ones who see something that other people have not seen … Then they start taking action, instead of just waiting there.’- Stephen Riady, Auric Pacific Group executive director

The building has since been sold for $350 million - or more than double the $151 million purchase price - earlier this year. ‘There were signs that the Singapore economy was in good shape in 2005 and 2006, so we continued buying,’ he said.

Citing the hallmarks of a good entrepreneur, he said one must have the ability to understand timing and be willing to invest and take risks. ‘We should be willing to go outside our comfort zone.’

Recounting how he started investing in Singapore, he said: ‘When the Singapore government talked about plans to remake this place, lots of people heard about it. But we believed in it and took action early.’ And that, he says differentiates the wise investors from the foolish ones.

‘Wise investors are those who have a vision, they are the ones who see something that other people have not seen,’ he says. ‘Then they start taking action, instead of just waiting.’

Foolish investors, on the other hand, wait for opportunities to come but they still don’t take it, he said. ‘The opportunity leaves and then they say they regret not having taken it.’ The Lippo group has so far amassed nine residential developments, five commercial properties and two retail brands, with a total value of $4 billion in Singapore.

The Lippo group has so far amassed nine residential developments, five commercial properties and two retail brands in Singapore, with a total value of $4 billion.

Mr Riady hopes to go further, increasing the value of the group’s portfolio from $7US billion in assets at present to $20US billion within five years.

The group’s retail arm is also expanding aggressively. The business includes Auric Pacific - a distributor of fast-moving consumer food and non-food products, Robinsons, and various clothing stores.

‘The plan for our retailing business is to grow turnover from the present $2US billion to $5US billion in five years’ time,’ said Mr Riady.

His entrepreneurial instincts showed up early. Every school holiday, Mr Riady would return to the family business - set up by his father Mochtar Riady - to learn the ropes. The elder Riady started the Lippo business with a bank and has since built up a vast conglomerate spanning property, banking, and retail.

‘My dad didn’t say that I had to join the business, but since we already had it, somehow in university you just naturally major in business. You don’t think about it.’

He considers working in a family business advantageous as there is a ‘consultative environment in which both timeliness and calculated risk-taking strategies can be explored, discussed and implemented’.

‘To any entrepreneur, these two elements are key to the success of a business,’ he said.

At 46, the businessman is at the top of his game, and continually trying to improve. ‘A lot of people have mid-life crises because they get stuck and they are not inclined to grow or learn anymore,’ he said.

‘I really believe in growing because without growth, we will have crises and problems. We must train ourselves to learn.’

Source : Business Times - 29 Nov 2007

POPULAR Holdings a winner?

POPULAR Holdings is best known for its bookstores and schoolbooks, but there is now more to it than meets the eye. For the household name has been making big bets on real estate in Singapore, and its fortunes going forward are likely to be driven more by property than by publishing.

It’s a shift that started just last year but has since picked up dramatically enough to alter the complexion of the group.

Last week alone, the group announced two new property investments. It purchased all the strata units at View Point at Jalan Datoh for $16.5 million and at Shiba Apartments at Jalan Raja Udang for $15.5 million.

Earlier in May this year, Popular bought 10 residential units at 18 Shelford Road for $27.2 million for redevelopment.

Its first major property foray was back in May last year, when the group bought eight residential units with a total land area of 15,070 sq ft at Robin Road, at a cost of $12.5 million. The company plans to sell the units once development is completed.

So in just over a year, the group has invested almost $72 million in the property business.

In sharp contrast, Popular’s investments in publishing-related businesses have been less eye-catching. It has made only two recent publishing-related announcements. This month, the group, through its subsidiaries in Hong Kong, raised the paid-up capital of eNet Digital Pacific Ltd from $2HK.00 to $10HK,000. In September, Popular acquired two ordinary shares of RM1 each in the capital of Seashore Publishing (M) Sdn Bhd, which is in the business of publishing and distributing books, articles and other printed materials.

Property, clearly, has become an area of major focus for Popular. In its announcements, the group had tended to characterise its property forays as opportunistic. ‘While retail, distribution and publishing will remain the group’s main business focus, property development will be a potential area of growth that the group is looking into, to capitalise on the potential and promising returns of the current property market,’ it said while making one of its property investments.

But it is clearly more than that. In its latest annual report, chairman Chou Cheng Ngok told shareholders that Popular is entering into a new business segment, property, through a new unit, Popular Land Pte Ltd. And its ambitions span beyond residential property. ‘We are also looking into commercial property business opportunities as well as for potential future self-use,’ Mr Chou said. ‘We will give the same passion for property development as we have shown for our book and publishing businesses. This ‘diversification’ will enhance our shareholders’ value in the long term.’

The question, of course, is whether this will really be the case. While one-off projects could well give a short-term fillip to earnings, going into property on the basis that Popular is thinking of entails more risks. The lessons from the past show clearly that it is very difficult for non-property players to play the real estate game well. Many will recall how many non-property companies all rushed into property during the property bull run in the mid-1990s, and got their fingers burnt when the bubble was pricked in 1996/97. While the current state of the property market is still bullish, several factors, such as overstretched valuations in some segments, the threat of more government intervention to cool prices, and concerns about the impact of a potential US recession on local sentiment, will make it challenging for property players.

So it is by no means certain, despite the company’s optimism, that Popular’s property ventures would achieve the results it is hoping for. It is also debatable if going the property route is the best way for Popular to increase shareholders’ value - it could have invested its surplus cash in its core business, or return it to shareholders if there are no suitable investments. What has clearly changed is that Popular is no longer just the stable, if rather staid, publisher and retailer of education staples. If the potential returns from property development are high, so will be the risks.

Source : Business Times - 29 Nov 2007

Singapore economy’s robust GDP figures do reflect the buoyant conditions

OCCASIONALLY, it’s apparent that the economic indicators don’t quite square with the reality on the ground. The Singapore economy’s robust GDP figures do reflect the buoyant conditions at hand, but it’s also one instance when the numbers don’t quite tell the whole story.

With GDP growth expected at between 7.5 and 8 per cent for 2007 - well surpassing early official estimates of 4-6 per cent at the start of the year - it should, by all accounts, go down as another banner year, one more notch in Singapore’s growth record. And indeed, the strong economic performance will translate into a fatter bonus for civil servants at year-end, and presumably for many private sector employees as well, if their companies had a great ride of the economic boom. It’s the fourth year in a row, after all, that the economy has grown above its trend potential.

In any case, sub-8 per cent growth is smashing good growth for an economy that’s no fledgling. But inevitably perhaps, the remarkably charmed co-existence of high growth and low inflation that Singapore has enjoyed in recent years is finally fizzling out. While almost a pedestrian rate by world standards, Singapore’s 3.6 per cent October inflation rate, a 16-year high, amounts to something like a return of inflation with a vengeance, driven by a mix of domestic and imported factors.

The recent spike in inflation has led to calls for measures to - almost ironically, one would think - curtail demand and growth in an over-stretched economy. Much as the government has maintained that the economy is not overheating, it has moved quickly enough to snuff out bubbling price pressures - it scrapped a key deferred payments scheme for property purchases, it postponed several major construction projects, it allowed the Singapore dollar to appreciate by a bit more than usual in a bid to contain imported inflation, and it is now further relaxing the foreign worker quotas.

The question is: Will a further strengthening of the Singapore dollar next April (as is widely expected) suffice to deal with the mounting inflationary pressures, or are additional cooling measures needed? Notably, for all the buzz in the economy, business sentiment has weakened of late, with companies less upbeat about the next six months, and even emerging signs of a slowdown in activity, a BT-UniSIM survey found. Similar official surveys also found cautious optimism among manufacturers, and some dampened spirits in the service sectors.

Among workers, amid a tight labour market and big pay jumps, the problem of a skills mismatch and structural unemployment among older, low-educated Singaporeans hasn’t entirely disappeared overnight. So, are cooling measures in order? A US recession, or even a sharp slowdown, if it happens, will probably take care of any runaway growth in Singapore.

Then again, minus other measures, how far can exporters and the economy stomach a strengthening Singapore dollar, which could erode the economy’s competitive edge? There are quite some policy posers in these seeming rollicking good times.

Source : Business Times - 29 Nov 2007

ALLCO Commercial Real Estate Investment Trust (Reit), which owns commercial buildings in Singapore, Australia and Japan

ALLCO Commercial Real Estate Investment Trust (Reit), which owns commercial buildings in Singapore, Australia and Japan, has cancelled a plan to raise up to $150 million, citing market conditions.

The trust said it was not proceeding with its plan to raise capital by offering up to 175.2 million new units to existing unit holders.

‘There is no pressing need for Allco Reit to be raising capital at this time,’ said Mr Nicholas McGrath, the chief executive of Allco Reit’s manager.

The Reit had meant to use capital raised from the offering to pay off some of the debt taken on when it bought properties in Singapore and Japan.

‘However, given current market conditions, the manager has concluded that it is not prudent to raise equity at this time,’ the Reit said in a statement.

Earlier this month, Saizen Reit - which owns properties in Japan - saw the price of its units plunge 13 per cent on its debut.

As well, APL Japan Trust - which has a portfolio of residential buildings in 12 Japanese cities - postponed its initial public offering.

It said that it was concerned about post-listing weakness amid poor market sentiment.

Source : Straits Times - 29 Nov 2007

OFFICE space in severe short supply now

OFFICE space may be in severe short supply now, but Citigroup predicts the tables will be turned by 2010 with even a glut possible.

‘The market is underestimating the potential supply of new office space in 2010 and beyond, in our view,’ said the banking group in a report on Monday.

While rents and prices of offices are skyrocketing due to the supply crunch, Citigroup said the situation is set to change in a few years, because of the slew of commercial sites sold by the Government in recent months.

It noted that since May, six new sites have been awarded that could yield three million sq ft of offices in 2010 and 2011. This is in addition to projects already under way.

It means that in those years, potential new supply could be 3.2 million to 3.5 million sq ft a year, according to Citigroup’s estimates.

Demand over the last few years has averaged only 1.5 million sq ft per year, the report added.

All eyes are now on the Government Land Sales programme for next year, which is due to be announced next month. If more office sites are released, even more supply can be expected.

Recent bids for office sites have already come in below market expectations, reflecting a more cautious long-term outlook among developers.

A Marina View site earlier this month attracted bids 35 per cent lower than those drawn by an adjacent plot just two months before. The site has yet to be awarded to a bidder even though the tender closed two weeks ago.

The Citigroup report also predicted that landlords of the new offices - most will be in the Central Business District - will face keen competition for tenants. Occupancy rates will peak next year or in 2009 and decline after that, it said.

This has led Citigroup to downgrade the shares of two major office owners: Keppel Land to ’sell’ and City Developments to ‘hold’.

But other analysts are sceptical of Citigroup’s forecasts of an oversupply. They say that for now and next year at least, demand for office space will still far outstrip supply.

When the new offices are opened from 2010 onwards, enough pent-up demand will have been built to soak up all the space, said Mr Wilson Liew, an investment analyst at Kim Eng Research.

‘Judging from the current demand, if this trend continues, there shouldn’t be much of an oversupply,’ he said. ‘These two, three years or so, the supply that is coming on stream is way below the average rate, so there will be a lot of pent-up demand.’

Mr Soong Tuck Yin of Macquarie Securities said the average supply of offices between next year and 2012 comes to only 1.7 million sq ft a year.

This drops to 1.4 million sq ft if space that has already been pre-committed - leased by companies even before being built - is excluded.

Another analyst added that in three to five years’ time, Singapore’s two casinos will have been built. And with the Government promoting Singapore as a financial hub, banks will still expand and be in need of prime space.

There may also be a delay in some of the new office space coming on stream, given the current shortage of contractors, he added.’It’s a bit soon to be making these sorts of predictions,’ the analyst said of the Citigroup report.

In the end, it boils down to whether the economy keeps growing, said Mr Winston Liew, senior investment analyst at OCBC Investment Research. ‘The office market is mainly driven by GDP growth. If our GDP continues to grow, demand should not be an issue.’

Source : Straits Times - 28 Nov 2007

Westwood Apartments

THE record collective sale price achieved by Westwood Apartments yesterday has put to rest industry concerns that the red-hot property market has cooled off.

Malaysian conglomerate YTL Corporation paid $435 million for the 30-year-old condominium in Orchard Boulevard, with an additional $4.6 million development charge.

This prices it at a startling $2,525 per sq ft per plot ratio (psf ppr), a level that trumps the freehold The Ardmore, a 24-unit property off Orchard Road that was sold to SC Global Developments in June for $262 million, or $2,338 psf ppr.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting about $17 million each.

The sale comes after recent government land sales received lukewarm responses, prompting experts to voice concerns of a souring in sentiment.

A condo plot in Enggor Street in Tanjong Pagar, for example, fetched a top bid of $180.8 million, or $717 psf ppr when it closed recently. This was well below the $852 psf ppr achieved by an adjacent plot.

Analysts told The Straits Times they were caught off guard by YTL’s bullish price but added that the prime Westwood location justified the high price tag.

The 62,179 sq ft condo, which has a plot ratio of 2.8 and a 20-storey restriction, could accommodate 43 luxury apartments of 4,000 sq ft each, said Savills Singapore, which brokered the deal.

Knight Frank director for research and consultancy Nicholas Mak said the sale was refreshing as the volatility in global stock markets, coupled with recent government measures to cool the market, have slowed sales.

Other analysts believe the sale is a one-off with demand for collective sales likely to be confined to prime areas such as District 9, 10 and 11.

Chesterton International Property Consultants’ head of research and consultancy, Mr Colin Tan, said negative sentiment is unlikely to affect prime sites.

‘Even if a developer overpaid, it has secured the site. In the long run, it is likely to be in their advantage,’ he said.

Malaysian tycoon Francis Yeoh, who helms YTL, told The Straits Times yesterday that he was in it for the long- haul. Buying Westwood cements YTL’s entry into Singapore’s top-tier luxury property market.

YTL already owns Sandy Island and the Lakefront Collection at Sentosa Cove.

Dr Yeoh shrugs off the apparent recent real estate cool-down in Singapore, saying wealthy buyers will always demand quality homes, regardless of market sentiment.

‘The question of whether the price paid for the land is reasonable depends on what you do with it,’ he said. ‘There are many people who are still bullish about Singapore’s market.’

Westwood resident Richard Eu, who is also chief executive of the traditional Chinese medicine company Eu Yan Sang, said owners were ‘happy that we managed to get a good price given the recent slowdown’.

The deal took just seven months to complete and is the largest collective sale since new rules kicked in on Oct 4.

Westwood’s owners will each reap about $8 million, with the two penthouse owners getting $17 million each.

Source : Straits Times - 28 Nov 2007

Monday, November 26, 2007

Rising inflation may be starting to worry policymakers

Mounting inflation makes it tempting to borrow, but things may change in the long run.

Rising inflation may be starting to worry policymakers and the man on the street, but it has had an interesting side effect. It has pushed down the real interest rate dramatically and is expected to drive the property market as buyers and borrowers take on more mortgages, which are costing them very little in real terms.

In fact, real interest rates - which a borrower pays after inflation has been factored in - have fallen sharply as prices climb and could turn negative early next year when inflation is projected to hit a high of 5 per cent, economists said.

Some of the biggest companies - which borrow at wholesale rates - are already enjoying negative interest rates, as inflation since September has risen above the key three-month interbank rate.

Inflation in September was 2.7 per cent but the three-month Sibor or Singapore interbank offer rate was around 2.5 per cent, so real interest rates are in negative territory, according to United Overseas Bank economist Suan Teck Kin.

‘It’s bad for the depositor,’ said Mr Suan.

As OCBC’s Selena Ling put it: ‘There is no free lunch - our savings are also likely fetching a very low if not negative real return currently (calculated by subtracting the inflation rate from the nominal interest rates). The savings rate is about 0.25 per cent, while the 12-month fixed deposit rate is about 0.83 per cent.

But for borrowers, the effect is positive.

‘High inflation is beneficial to the borrower,’ said Standard Chartered Bank economist Alvin Liew. If you borrow $1 now, it will be worth less when you return it in two years.

Inflation jumped to 3.6 per cent in October, the highest since 1991, the Department of Statistics said last week. It is likely that the Monetary Authority of Singapore (MAS) will let the currency appreciate faster to dampen consumer price gains. This, in turn, will lead to more funds flowing to Singapore from investors betting on currency gains, which will keep the pressure on our already low interest rates.

While the three-month interbank rate is expected to remain around 2.5 per cent until the end of this year, some economists expected it to fall to as low as 2.1 per cent early next year before recovering to 2.5 per cent later. Home loan rates typically range from 3 to 4 per cent.

Generally, low interest rates fuel stock market activity. But with people feeling jittery about equities, economists said that many could turn to property to earn higher returns, because putting it on deposit is a ‘losing’ proposition.

Mr Liew pointed out that Singaporeans will have quite a lot of excess cash next year. Recent reports have said that en bloc sales will result in $6 billion swishing around in sellers’ accounts then.

‘One of the key things about high inflation and low interest rates - from an economist’s point of view - is that it will keep the property market robust for the next 12 months,’ he said.

With low interest rates, mortgage credit is cheap and will support the property market, said Citi economist Chua Hak Bin.

Real mortgage rates are probably only slightly positive now, about 0.5-1.0 per cent, compared with about 2-3 per cent three years ago, Dr Chua said. ‘Low real mortgage rates encourage leverage and may drive property prices higher.’

And if the US cuts interest rates aggressively, it may fuel asset inflation, he added.

Citi’s US economics team expects another 100 basis points cut, taking the US federal funds rate down to about 3.5 per cent by the end of Q3 2008, he said.

But all three economists cautioned against over-leveraging given the clouded economic outlook, and they expected inflation to moderate in 2009.

‘Debt servicing/repayment ability as well as degree of leverage of the borrower should be considered together when determining how much one should borrow,’ said Mr Suan. ‘Real interest rate may not be the sole criterion.’

The government is also watching the property market closely, he noted.

DBS Bank spokeswoman Karen Ngui said: ‘Consumers should be mindful that home loans are a long-term commitment and should not just consider the immediate interest rate outlook.’

Source : Business Times - 26 Nov 2007

WHAT is the value of loyalty?

WHAT is the value of loyalty? For executive director of Tiong Aik Group of Companies, Neo Tiam Boon, 45, he has seen how this virtue has been a key factor in enabling his family business to ride out a few rough patches in the last decade.

‘Businesses should stay loyal to their banks, and not move with their relationship managers (RMs) when they join another bank. After all, staff come and go. What is more important is that the loyalty and continuous rapport with your banks should be maintained at all times,’ Mr Neo said.

He was speaking from experience. The company’s long-time relationship with its principal banker, OCBC Bank, put it in good stead as it weathered the bad times. During the construction slump prior to the current boom, many construction companies were hit badly and did not survive the onslaught.

‘Before the turnaround one-and-a-half years ago, the construction industry saw very difficult times. We (Tiong Aik Construction) were not spared either,’ Mr Neo said emphatically, ‘our suppliers and creditors were tightening their credit to reduce their risk.

‘It was the banks who came in to give us liquidity support to allow us to continue running the projects without any problem.’

OCBC was one of the banks that did not pull back the credit lines extended to the Group. Instead, it provided them with the liquidity that they needed to run ahead with the few major projects that were on hand. On average, the group has about six major construction projects a year, of which OCBC provides 60 per cent of the funding.

Tiong Aik’s relationship with OCBC spanned almost three decades, taking into account its relationship with the now defunct Tat Lee Bank that took root in 1978. After Tat Lee Bank was acquired by Keppel Bank, which was subsequently merged with OCBC Bank in 2001, Tiong Aik, better known as a construction and property development group in Singapore, had remained steadfast in maintaining and growing the relationship with the bank all these years.

The group’s management understood that a relationship took time to grow, and with time, came trust and understanding that gave the bank a sense of security about them.

‘The plus-point in having built a long-term relationship with your bank is the understanding that comes with it. This will help companies in their dealings with their banks.’

Trust, along with a good understanding of the company’s profile and credit history, allowed the bank to grant better access to credit and faster loan approvals to Tiong Aik.

The Group always picks OCBC, its principal banker, when it comes to the financing of its biggest projects simply because the bank understands its businesses better, added Mr Neo.

‘There are instances when we are quite demanding in asking for a verbal approval for credit lines within a week, and I suppose not many banks are able to grant us the speedy approval,’ he said.

‘It is also important to know the bank’s management so that we can share with them how we work, and our commitment to the business. That will give them the confidence in our business.’

The group enjoys a very good relationship with OCBC, and other than the relationship manager who takes care of their accounts, they are also familiar with the bank’s management - CEO David Conner, former head and now senior adviser of Group Business Banking Tan Ngiap Joo, and head of Enterprise Banking Sng Seow Wah, whom Mr Neo said are very open and approachable.

For Mr Neo and his brothers who run the group’s various businesses which include an investment arm, travel business, training schools for construction workers, King Koil mattress retailing, engagement with the bank is not restricted to purely business dealings. They play the occasional game of golf together, have lunches and invitations to weddings are not unknown either.

Founded in 1972, the Tiong Aik Group of Companies had ventured into property development in 1997 and boasts several luxurious property developments in prime locations like the 120-unit The Inspira at Arnasalam Chetty Road, The Areca, Kovan 81, Casa Rosa, Leonie Hill and Trussville. The group, which saw an annual turnover of more than $280 million last year, is registered with the Building and Construction Authority as an A1 general building contractor.

Having a close relationship with a bank also helps when it comes to seizing a business deal, especially when the window of opportunity is narrow. A quick approval from a bank can make the difference between winning and breaking a deal.

In Tiong Aik’s case, its construction projects usually require the bank to issue the banker’s guarantee in double-quick time.

‘When it comes to vying with our competitors for a piece of land, we will need our OCBC bankers to say ‘Yes, you can go ahead!’ before we can move to secure the deal. This is very crucial to us especially when it is a neck-to-neck fight with certain competitors, which means we need to move very fast.’

One example is the Group’s Sea Breeze apartments project on Joo Chiat Road. The price of the plot was very low then, making it a highly prized property, and unsurprisingly, competition was intensely fierce. Tiong Aik managed to clinch the deal, backed by OCBC’s quick approval.

Like in all relationships, be it between husband and wife or a business owner and banker, trust and open communication are very important. Businesses tend to shy away from telling their bankers the bad news for fear that it would upset the latter.

Tiong Aik, however, understands the importance of the need to communicate with its banks regularly. The group’s Kembangan Villas, a 14 semi-detached and terrace houses project, hit a snag in 2001 and they were facing liquidity problems. What made it worse was that all their credit lines were fully utilised. Instead of hiding the bad news, they told their banker their problem.

‘Our RM looked at the problem and tried his best to restructure the credit lines. Instead of asking me if I have other security for the bank (He didn’t ask me that question at all!), he went out of his way to find a solution for us and thought of alternatives that we didn’t even think of. What he did was to help us find a solution by reducing some of the lines for other projects that we didn’t need. I was very, very impressed.’

Loyalty, trust and communication are key to a strong and lasting relationship, be it with your spouse, or with your bank.

‘Open communication and being honest with each other are helpful and healthy for a better working relationship. In business, there are bound to be problems. Even if we keep mum about the problem, other people will learn about it.

‘What is important is finding the solution.’ And the right bank.

This article is contributed by OCBC Bank

Source : Business Times - 26 Nov 2007

Malacca Centre in Raffles Place has been put up for sale

A RETAIL podium at Malacca Centre in Raffles Place has been put up for sale.

The 999-year leasehold property comprises of ground and basement floors and has direct frontages to the main road. The sellers are an investment holding company, said property firm Cushman & Wakefield, which is marketing the property.

The property has a strata titled area of about 5,000 sq ft, said Cushman & Wakefield managing director Donald Han. Market watchers estimate that it could fetch about $24 million, which works out to some $4,800 per square foot (psf).

‘There are a dearth of good retail space and a lack of retail premises for sale in Raffles Place and none offers as prime a retail road frontage or location as this,’ said Mr Han.

Malacca Centre retail podium presents the investor with an attractive cash-on-cash yield potentially in excess of 5 per cent per annum, he said.

The property is sold subject to existing tenancies.

A recent study done by Cushman & Wakefield showed that prime ground and basement retail retail rents and capital values are on the rise in Raffles Place due to the lack of supply.

For strata titled retail units, capital values have risen by 23 per cent since 12 months ago, Mr Han said.

At the nearby The Arcade - which is also strata titled - retail space recently transacted for between $4,900-$5,300 psf, Mr Han said.

Ground floor rents in Raffles Place have risen by 20 per cent in the past 12 months. Average gross rents for Raffles Place ground floor retail is now between $20 to $30 psf, while basement space is fetching between $15-25 psf.

Source : Business Times - 26 Nov 2007

YTL Group, one of Malaysia’s largest listed companies, is intent on an aggressive expansion in Asia - starting in Singapore.

MALAYSIAN tycoon Francis Yeoh, who helms YTL Group, one of Malaysia’s largest listed companies, is intent on an aggressive expansion in Asia - starting in Singapore.

The Republic is the target of the first part of his grand plan to build a series of world-class marinas and residential clusters in coastal areas around Asia.

He wants Asia to be known as the ‘Mediterranean and Caribbean of the East’.

‘Real estate has not seen its full glory yet in Asia,’ Tan Sri Dr Yeoh said in an interview with The Straits Times recently.

‘Wealthy Asians are still paying a lot for not very good homes in the West, when they should be able to find beautiful homes in the East.’

To address this, YTL is now focused on gaining entry into the top tier of Asia’s property markets, starting with Singapore, he said.

YTL, with a combined market worth of about RM28.5 billion ($12S.2 billion), is a conglomerate that spans the construction, property, hotel and utilities industries. It recently teamed up with Malaysian developer LP Worlds to form a joint venture, Genesis-Alliance, which owns two projects at Sentosa Cove.

Genesis-Alliance, in which YTL holds a majority stake, was awarded the 145,442 sq ft, man-made Sandy Island in March for $89.7 million, after it bagged the Lakefront in the northern part of Sentosa Cove for the bargain price of $50.2 million in September last year.

Sentosa will be an important ‘mid-point’ for yachts cruising in Asia in the future, said Dr Yeoh. Hence, the need for a presence in the Republic.

‘Singapore is the centre of the region, like London is the centre of Europe. Its strong infrastructure, private banking sector and cosmopolitan culture makes it an attractive destination.’

YTL’s strategy is to rope in renowned architects and iconic brands to design quality homes, which will then be sold by invitation only to high net-worth individuals around the world.

It already has high-end properties, shopping malls, hotels and resorts in Malaysia, Dubai, Indonesia, Thailand and Europe, including a six-star hotel in St Tropez, France.

Sandy Island’s super-luxurious villas, slated for launch next March, are designed by renowned Armani store designer Claudio Silverstrin.

Each villa, ranging from 6,000 sq ft to 12,000 sq ft and costing more than $12 million apiece, will boast a lush tropical setting, quality interior finishes, a private berth and pool among other exclusive features.

All this is meant to redefine indulgent living in Singapore and Asia. More homes in this style are on the way, he said.

The company is also eyeing Singapore’s prime residential districts to build more of its high-end homes and to gain entry into the top-end of the island’s property market.

‘It’s not too late yet,’ said Dr Yeoh, adding that a slice of the pie is big enough.

‘But as a new kid on the block, to survive, we must differentiate ourselves. And this is where YTL comes in - at the very top of the pyramid.’

The homes YTL builds will be eco-friendly and minimise the impact on the environment, Dr Yeoh added. ‘Asia is a beautiful location. In terms of real estate, I’m looking forward to a very exciting decade ahead.’

Source : Straits Times - 26 Nov 2007

PROPERTY investors who want to diversify their portfolios should check out some hotel villas, especially those in places they like visiting.

PROPERTY investors who want to diversify their portfolios should check out some hotel villas, especially those in places they like visiting.

More resort or hotel operators are putting up some of their properties for sale and leaseback to raise cash.

This means buyers can invest in a hotel room or a standalone villa for a possibly guaranteed return when they lease it back to the hotel owner.

They also have free use of the villa or room for a predetermined number of days a year.

‘It is an investment that gives you the added benefit of the resort lifestyle,’ said Mr Ku Swee Yong of Savills Singapore. ‘It’s still a relatively new concept and some investors will be waiting to see if it will take off in a big way before coming in.’

Home-grown resort operator Banyan Tree recently launched its Banyan Tree Residences scheme, which offers properties in Phuket, Bintan, Bangkok, Seychelles and Lijiang in China for sale. Prices start from $440US,000 ($638S,480) for a villa in Bintan and from $1US.5 million for one in Phuket or Seychelles.

Investors can choose to receive a fixed gross return of 6 per cent of the price for six years or one-third of the net room revenue for six years. They also have an option to renew it.

Local interest seems high. Banyan Tree said about 600 people visited its Banyan Tree Residences exhibition last weekend and 40 units - mostly villas in Bintan and Phuket - had been reserved for sale.

Potential buyers are given time to check out the actual properties before committing to a purchase.

Mr Richard Skene, assistant vice-president (property) of Banyan Tree Residences, said the number of units reserved in Singapore exceeded the combined reservations gathered from previous exhibitions in Hong Kong, Shanghai, London and Moscow.

Banyan Tree Residences has six Singaporean owners who have a total of 10 residences in Phuket, Lijiang and Seychelles.

A 46-year-old Singaporean lawyer said he bought his Phuket villa for the lifestyle benefits. It is more ‘worthwhile’ to invest in a villa with regular returns than to pay for a hotel room and not get any money back, he said.

Mr Skene said: ‘It’s a growing trend that started in the United States with condotels. It’s the same principle, and we are the pioneers in Asia.’ Condotels are residential apartments leased out on a short-term basis,

Banyan Tree started selling its resort properties about 10 years ago, but it launched the Banyan Tree branded properties only this year.

More of such resort or hotel properties with units for sale are now on the market, including St Regis Resort & Residences in Bali, and Karma Resorts, which has outlets in places such as Margaret River in Western Australia, Kandara in Bali and Koh Samui in Thailand.

On Friday, Puravarna Group launched another phase of its villas at Puravarna Phuket, which will open next November.

It started selling the villas last year, and more than 30 buyers from Singapore have paid at least $1.9 million each for a property. They will get an average return of 8 per cent for 12 years and free use of the property for 30 days a year.

‘Most buyers are bankers or property investors,’ said Puravarna’s regional director, Ms Christina Liang, adding that the firm offers financing of up to 90 per cent.

At Banyan Tree, owners are entitled to use their residence for up to 60 days a year, and there is no management charge during the rental programme.

But forget about personalising your villa and it may not be that easy to sell unless values soar. Also, financing is not a given.

In addition, there may be black-out periods. If you opt for the 6 per cent guaranteed returns at Banyan Tree, for example, you cannot stay at your villa during the Christmas and New Year periods.

Source : Straits Times - 25 Nov 2007

Want to go private? Pay up $190,000 first

Want to go private? Pay up $190,000 first

WANT to privatise?

Sure, pay us $144 million first, said the Ministry of Finance (MOF).

That’s how much it has valued the piece of land at Neptune Court, which it owns.

This means each household there will have to fork out about $191,000 to privatise their 99-year-leasehold estate before they can even think about selling it en bloc.

There are about 752 households in Neptune Court at Marine Parade and they have been leasing the land from the MOF for the past 32 years.

It looks like their proposed $1 billion enbloc dream will be scuttled for now.

As a rough comparison, residents in HUDC estate Eunosville will have to pay about $30,000 for the privatisation of their estate.

There are 330 apartments in Eunosville, located opposite Eunos MRT station.

At Neptune Court yesterday, there was an air of disbelief as groups of residents gathered to discuss the high price they have to pay.

A letter from the Neptune Court Owners’ Association was pasted on the notice boards by each lift landing, saying that the estimated cost of privatisation was about $144m.

This is probably one of the highest privatisation fees here.

The letter was put up on Wednesday.

Retiree Alex Lee shook his head while trying to calculate how much he has to fork out.

He paid about $500,000 for his 1,700 sq ft unit about 10 years ago.

Another resident, who has lived there for over 30 years, was also shocked at the amount.

This resident, who declined to be named, paid about $50,000 for his 1,600 sq ft unit.

He said: ‘I nearly fell out of my chair when I saw the amount. I don’t understand how they (MOF) arrived at this amount.


‘Who’s going to cough up this money? It’s very high. And even if the privatisation is successful, will the en bloc process be successful too?

‘I don’t think many residents here in their right mind will pay this amount. But I’m sure those en bloc die-hards will find a solution.’

The land area there is about 780,000 sq ft - about the size of 15 football fields.

All the residents we spoke to baulked at the amount MOF is asking for.

The Neptune Court Owners’ Association didn’t want to comment.

The MOF said that $144m for the common properties is a preliminary estimate provided to the residents so that they may decide whether or not to pursue privatisation.

This estimate was derived by comparing the capitalised value of the annual net rents at Neptune Court with those of a comparable private condo.

Said a MOF spokesman: ‘Should the residents decide to privatise the estate, the valuation will be updated based on the prevailing market conditions.’

In privatisation, the residents essentially pay HDB (or the MOF in this case) to take over the ownership of common property, such as carparks and landscaped areas.

Owners pay about $25,000 to $30,000 each for privatisation, which covers the cost of common property that has been transferred to owners, legal costs, survey and other processing fees.

Credo Real Estate’s managing director Karamjit Singh was surprised by the huge sum.

He said: ‘Normally, privatisation fees per household ranges from $12,000 to $30,000. This is a huge amount. It will be difficult to get residents to fork out $190,000.

‘Selling en bloc is slim but not impossible. It will be possible if the Government is willing to do a tripartite deal where it gets paid out of the sales proceeds paid by the developer.’

The estate started its en bloc efforts in May last year.

The committee hired law firm Phang & Co and property consultant Chesterton International to kickstart the privatisation and en bloc sale, according to a report in The Straits Times in May.

It offered owners a sale agreement that promised a reserve price of $1.37m or $1.67m, depending on the unit size.

Source : New Paper - 24 Nov 2007

Raffles City law firm of missing lawyer Zulkifli Amin to report missing monies and stalled deals.

MORE clients have shown up at the Raffles City law firm of missing lawyer Zulkifli Amin to report missing monies and stalled deals.

Mail company manager John Sasayiah, one of at least four who had lodged complaints to police, told The Straits Times yesterday that some $26,000 was due to him from the sale of his Casablanca condominium in Woodlands.

The cheque bounced when he tried to cash it on Wednesday, and yesterday he learnt that Mr Zulkifli - from the law firm Sadique Marican & ZM Amin - had gone missing.

On Thursday, a couple reported that a cheque for $40,000 due to them, also proceeds from a property sale, had bounced.

Yesterday, more than a dozen other clients showed up at the law firm to make inquiries over their property deals that had stalled.

One client told The Straits Times she was frustrated as she understood the firm’s clients’ account had been frozen as investigations continued.

This could result in the property deal being affected if the required funds are not transferred in time.

Mr Zulkifli is understood to have skipped town on Wednesday. Money from the firm’s account is missing and the authorities are trying to establish the extent of the losses.

A Law Society spokesman said yesterday that the firm reported it ‘had discovered shortfalls and discrepancies in the client account of the firm’ following which the police were called in.

He added that the society was also conducting an inspection of the firm’s clients’ account and, jointly with the firm, advises those who have suffered losses to lodge police reports.

This appears to be the first case of a lawyer snitching funds from the clients’ account since rules were tightened earlier this year requiring two signatures for the withdrawal of sums exceeding $30,000.

Lawyers contacted said the latest incident has cast doubts on the effectiveness of the enhanced rules.

Legal officer Thomas Loh said the problem was not with the enhanced rules but with the conveyancing deals.

Ninety per cent of the incidents so far involved property deals.

What was needed was to stop the practice of placing the option fees, amounting to up to 10 per cent of the property deal, in the law firm’s clients’ account.

Instead, he suggested that it should be a cashier’s order held by the bank providing the housing loan, to be released when the sale was completed.

‘The money, when kept in the clients’ account for about three months, is open to plunder,’ he added.

Former Law Society president Peter Low said ‘the rules should be reviewed if need be’.

Lawyers who knew Mr Zulkifli, or ‘Zul’ as they called him, were shocked at the news of his disappearance.

One of them, a former classmate, said he was a ‘friendly and approachable’ person who always had a ready smile for every one.

Another lawyer said he was very interested in football and used to play regularly with his classmates and friends until his work took up most of his time.

Source : Straits Times - 24 Nov 2007

‘Shareholders invest money in us, not emotions’.

So why did CapitaLand decide to sell the Raffles Hotel business despite its sentimental value? The answer, which chief executive Liew Mun Leong shared with his entire staff, was straightforward.

‘As a business, particularly as a public-listed company, we cannot make business investment or divestment decisions based on sentimental values or emotions,’ he said in an e-mail message in July 2005 titled ‘Shareholders invest money in us, not emotions’.

‘This transaction would make a profit of $605S million. We would indeed be irresponsible towards our shareholders if we had chosen to forgo this huge gain.’

For almost a decade, he has candidly been sharing his thoughts on various issues with his employees through a series of e-mail messages that he writes mostly on Sundays. These have now been compiled into a book, Building People: Sunday Emails from a CEO, which was launched by CapitaLand yesterday.

‘I did not set out to write a book,’ he said to laughter at the launch. ‘I have to vigorously dispel the wrong signal that the CEO of CapitaLand has a lot of time on his hands.’

The e-mail messages, he said, were written because they were the fastest and cheapest way to communicate with CapitaLand’s 9,000 employees scattered across 104 cities in more than 20 countries in the Asia-Pacific, Europe and the Middle East.

Through e-mail, Mr Liew shared his insights and management philosophy, as well as observations from his business travels.

Some of the messages have caused a stir. ‘Who Stole Our Cheese?’, for example, was written after developer CapitaLand lost the Marina Bay integrated resort bid. In the brutally honest piece, Mr Liew says CapitaLand made the ‘killer mistake’ of not identifying the meetings, incentives, conventions and exhibitions business as one the government was keen to grow.

In other messages, he is more philosophical. In one, he relates the story of a blind 75-year-old English man who still plays golf, urging his employees to not ‘give up easily on life, even when the most difficult times hit’.

Mr Liew also shares his experience as a young man on his first day on the job, when an envelope containing a large amount of money appeared mysteriously on his desk. He asked people around the office, offering to return the money to its rightful owner. Only later did he discover that the envelope had been planted by his boss to test his integrity!

Using this to illustrate CapitaLand’s approach in the property development industry where opportunities abound for kickbacks, he says: ‘If we have to bribe, we won’t do this business.’

The e-mail messages appear to be a tool to explain, reflect and impart the company’s values to the staff.

ln line with Mr Liew’s aim of people development, CapitaLand yesterday officially opened its own learning and development campus on Sentosa, called the CapitaLand Institute of Management & Business (Climb).

The institute, which was started in June 2006, has conducted more than 60 programmes for more than 1,450 participants. With the official opening, the institute is expected to train about 5,000 existing and future CapitaLand employees by 2010.

CapitaLand has spent at least $10 million to convert its Sentosa building, which used to house the former Rare Stone Museum.

‘Setting up Climb is the best investment for us,’ said Mr Liew. ‘It is investing in our people, our future.’

It was in this same spirit that he agreed to have his e-mail messages compiled into a book, he said. The book will be used as teaching tool at Climb and will be available to all staff.

Source : Business Times - 23 Nov 2007