Realty

Is Singapore becoming price uncompetitive for foreign business? Rocketing office and housing rental prices over the last 12 months

2008-01-22T04:32:00.000-08:00

Is Singapore becoming price uncompetitive for foreign business? Rocketing office and housing rental prices over the last 12 months are raising this question.
With property costs now among the highest in East Asia after Tokyo and Hong Kong, there is more and more talk as to what impact they must now make on decisions by a foreign company to maintain or establish in the island city state. Various surveys of the foreign corporate sector and expatriate professionals by consulting companies underline the extent of Singapores rising property and living costs. International human resource consultant, Mercer, found in its annual cost-of-living survey for expatriates earlier this year that Singapore had risen to become the 14th most expensive city of 50 cities around the world, from 17th place the year before, and the most expensive in Asia after Seoul, Tokyo and Hong Kong.

New York, Sydney, Beijing and Shanghai were all below Singapore. And since the Mercer survey, announced in March, living costs have continued to rise in Singapore. Yet these cost-of-living headlines can still skew a true assessment of Singapore´s international economic competitiveness.

Income taxes are very low - 20 per cent in the top bracket - and there was a further cut in this year´s February budget in the corporate rate to 18 per cent. Singapore continues to be advantaged by efficient and low-cost infrastructure services, a well-educated workforce, English as the common language in business and government, and legal and regulatory certainty and transparency for commerce.

Setting up a foreign-invested company, including a fully-foreign-owned company, even if the sponsors are only small-scale businesses, is a very straightforward and rapid process, unlike almost anywhere else in Asia. These factors will continue to offset cost-ofliving rises for top-end foreign business - that is, those in the international banking, legal and business services, and high value R&D heavy manufacturing, such as biotechnology and pharmaceuticals, precision engineering and the sophisticated end of electronics and information technology.

And there is no question that Singapore is succeeding here, with growth of 7.9 per cent in 2006 and an anticipated 7.0 per cent in 2007, driven significantly by these industries, as well as (more recently) construction in response to property demand. Activity in construction is the highest for a decade, according to the Ministry of Trade and Industry. One effect of the higher living costs, though, may be to limit expatriate staff to the top executive level with more reliance on local professional and technical staff for mid-level positions as they will not want the higher salaries their equivalent foreign number would need to live on a temporary basis in Singapore.

The property market is the major driver of these rising living costs. While this is due to an obvious imbalance in supply and demand, the boom is also a result of the Singapore Government´s efforts to develop high-end economic sectors and industries, and the impact, then, on rental and office markets of new foreign companies establishing and expanding. To cool the market, the Government is now releasing more land and putting in place other measures, such as slowing the rate at which developers can pull down older midlevel- priced apartments to build high-end ones.

High property prices are also being felt by local Singaporeans and not simply in terms of owners and developers gaining from the boom Price increases in the private-condominium segment filter down to the public housing segment where the vast majority of Singaporeans live some 80 per cent and this impacts adversely on those lower- and middle-income households that rent, or are in the market to purchase an apartment. Combined with the overall economic restructuring taking place, this leaves significant numbers of Singaporeans vulnerable and hurting, especially the old and those lacking skills and education.

The problem of a widening income gap is something that the ruling Peoples Action Party does not deny, and how the Government intends to combat it through education and training measures, income support and housing estate renewal was a focus of Prime Minister Lee Hsien Loong´s National Day speech in August. But the question of social inequalities will continue to be a major issue for the Government in the years ahead, especially in the context of what seems a strategy of making the island city a base in the region for the worlds wealthy.

Inevitably there is the risk of social jealousies and resentment. Nowhere is this clearer than in the finance and banking sector. Singapore´s drive to become a larger international financial centre has led to increasing emphasis on private banking. And, with this has come upward pressure on the property market through an associated interest by wealthy foreign individuals and families with investments managed by Singaporebased private banks to purchase real estate and spend time living on the island state. One example is Charoen Sirivadhanabhakdi, one of Thailand´s richest men, who listed his whisky and beer firm Thai Beverage on the Singpopore exchange in 2006.

According to the local Business Times newspaper, in April this year be bought 47 of 48 flats in a new development for US$140 million, and four entire floors in another project for US$90 million.

Singapore aspires to be a Switzerland of Asia. There are now nearly 40 private banks with regional operations in Singapore. Both US Citigroup and UKs Standard Chartered maintain their headquarters for all private banking outside of their home countries in Singapore. Target clients range from the European and American wealthy to those in East Asia and India, the new millionaires of China, and the oil rich of the Middle East, who are turning more to East Asia as a place to invest since 9/11 and the Iraq war.

Singapore´s own rich should also not be forgotten, with the small State having more millionaire households as a percentage of total households than any other Asian economy, according to the Boston Consulting Group. Singapore, as has long been the case, argues its ability to act as a platform to manage investment throughout the region and beyond. More particularly, to encourage private banking, the Government has strengthened bank secrecy laws and tax incentives. For example, there is no taxation on an individual´s foreign income, including capital gains and interest income in Singapore.

Income tax is levied only on income earned from Singapore, and this tax is very low. Another factor helping growth of private banking is attractive trust laws. Other finance industry segments that are being encouraged along with the more traditional banking and stock market services are hedge funds, private equity firms and insurers. Overall, the finance sector is one of the strongest areas of the economy, growing by 17 per cent in the second quarter of 2007 on top of 14 per cent in the first quarter. And, as the Ministry of Trade and Industry notes in the release of these results, the wealth advisory cluster remained buoyant, riding on growing affluence in the region and continued demand domestically for professional fund management services.

Encouragement of private banking meshes with the Government´s new urban and tourist development thrusts, as well as promotion of Singapore as a world-class education centre. Thus, Singapore is not just a place in which to invest, live and play Singapore also can offer the best of education for their children. Evidence of this can be seen at the end of Sentosa Island, on Singapore´s inner west coast, not far from the CBD. Sentosa, better known to tourists as a theme park and once a British military base, is now being transformed into an exclusive residential estate.

Sites at what is called Sentosa Cove are reported to be selling from as much as US$9.9 million.

Sentosa Cove has a 400-berth marina with 10 spots for very large yachts, and two golf courses.

About 60 per cent of buyers at Sentosa Cove are foreigners. Sentosa will also feature one of Singapore´s two new casinos called integrated resorts being developed by the Government after a four decade ban and despite considerable community concern over their possible adverse social effects. Sentosas will be built and operated by Malaysia´s Genting group, while the other will be build by Las Vegas Sands of the US at the emerging Marina Bay office, hotel, exhibition and convention centre on reclaimed land opposite the core CBD. As one property agent told Reuters: “Its Monaco in the tropics.”
Source : Asia Today International - 18 Jan 2008

Citigroup has come out to clarify that Singapore will not be significantly affected by the group’s global layoffs

2008-01-22T04:31:00.001-08:00

Citigroup has come out to clarify that Singapore will not be significantly affected by the group’s global layoffs.

At a news briefing on Friday, it said that as far as Singapore is concerned, it expects the attrition rate to stay normal.

No bonus cuts are expected and staff will still be paid salary increments.

Citigroup said that overall, Asia including Singapore is positioned for good growth.

Like most big financial names in the US, Citigroup has been hit by the sub-prime mortgage crisis - taking billions of dollars in write-downs.

Citigroup said earlier this week that it was going to cut 4,200 jobs. That sparked speculation that it would reduce headcount in Singapore, but the group stressed that those fears are unfounded.

Piyush Gupta, Country Officer of Citi Singapore, said: “The truth is the large part of this reduction is likely to be in the Western world because growth in Asia has been spectacular and growth in Singapore particularly has been very strong.”

Citi employs close to 375,000 staff worldwide - which means the cuts will affect only about one per cent of its global headcount.

It saw a 33 per cent jump in revenue from the Asia-Pacific in 2007, with profits climbing 46 per cent to US$4.6 billion.

For Singapore alone, revenue rose 35 per cent, while headcount increased by five per cent to 9,000 people. Citi said it is expecting to see growth rates of 20 per cent in Singapore in 2008. - CNA/vm

Source : Channel NewsAsia - 18 Jan 2008

Asian economies face a challenging year in 2008 but as a group they are still expected to show growth of 10 to 12 percent.

2008-01-22T04:29:00.001-08:00

Asian economies face a challenging year in 2008 but as a group they are still expected to show growth of 10 to 12 percent.

This is the forecast from HSBC in its latest report on the region.

However, a recession in the US could knock off a few percentage points off Singapore’s economic growth.

With a US recession on the horizon and the US sub-prime mortgage crisis still taking its toll, HSBC is predicting a difficult year for Asia in 2008.

Economies such as Japan and Taiwan are expected to be most cyclically sensitive to the US slowdown. But emerging ones - led by China and India - are forecast to continue booming along.

Garry Evans, Pan-Asian Equity Strategist, HSBC, said: “Well, it’s going to be a difficult year, there is no doubt about that. We’ve got the US slowing - credit crunch out there, everyone is focused on the bad news.

“I don’t think it’s going to be quite as bad as that though because governments are going to react to this bad news. The Fed is going to cut rates in the US - we’ve going to have a fiscal stimulus package there and I think Asian countries are going to grow reasonably stronger this year.

“You’re not going to see that much of a slowdown, particularly in China and India - and if you do see a slowdown, governments here have also got room to cut rates and increase spending.

“So I actually see the Asian markets going up this year - ultimately 10 to 12 percent or something like that. I don’t’ see a bear market but I think it’s going to be a year of ups and downs - your probably going to have to be a little patient to get a return.”

Mr Evans added that inflationary pressure will settle.

He said: “Well, ultimately if we’re seeing global growth slowing, then I think you’re going to see inflation becoming less of a worry during the year. In general, in most places, inflation is still a food phenomenon, and it’s not really showing much signs of coming though to any other areas in the economy.

“We’re all a bit worried about inflation at the minute. Certainly the most worrying scenario is when you have high inflation and slowing growth - in a so called stagflation - and if we have that then we could be in for a very tough ride. But I think generally as growth slows, inflation will come off the radar scene as being a problem.”

Here in Singapore, HSBC says the financial and property sectors will remain positive, but exports will remain susceptible to a US slowdown.

Peter Morgan, Chief Economist, Global Research Asia Pacific, HSBC, said: “Well we are fairly optimistic on Singapore - we think that the strength in loan growth and the strength in the property sector is having a positive impact.

“Growth in Singapore is likely to slow, and Singapore is still a fairly export sensitive country and if the US looses a couple percentage points of growth than that could knock off maybe 3 percentage points on Singapore’s growth.”

HSBC is forecasting the Singapore economy will grow 7.3 percent in 2008. - CNA/ch

Source : Channel NewsAsia - 18 Jan 2008

FUND managers across the world have turned “super-bearish”

2008-01-22T04:28:00.000-08:00

FUND managers across the world have turned “super-bearish” over the last month, abandoning hope that Europe and Asia can escape contagion from the United States housing crisis.

A Merrill Lynch survey found that a fifth of big investors now expect an outright global recession, an occurrence not seen since the 1930s. Some think the world is already in recession.

“The period of denial may be over,” said Mr David Bowers, who put together the closely-watched report.

“This month’s survey is the first in which investors have really started to recognise that the ‘credit crunch’ could lead to a major recession.

The vast majority expect profit margins to shrink in 2008.”

The report said global cash balances had jumped to 32 per cent of the average portfolio from 20 per cent as recently as November, with both bonds and equities falling out of favour. The survey covers 195 funds managing US$671 billion ($964 billion) across the three main regions.

The asset managers no longer want firms to take on more debt or pay out bigger dividends — the twin abuses at the height of the credit bubble.

They increasingly want them to batten down the hatches for a long storm by using cash flow to repair balance sheets.

What is striking is the broad perception that the US is no longer the sole epicentre of the crisis.

Indeed, most now think the US dollar is poised to rally as the trouble shifts increasingly to Europe.

A net 55 per cent view the euro as “overvalued”, and a net 61 per cent think the sterling is too high.

Asia is turning pessimistic as well. A net 29 per cent think China’s economy will slow and most are now underweight Chinese equities — preferring the Hong Kong stocks, which offers arbitrage opportunities against over-inflated Shanghai.

None of the regional managers thinks China’s growth rate will rise this year.

The Asian investors expect the region (excluding Japan) to face an unhealthy drift into stagflation, with growth slowing and price pressures rising at the same time. They are massively underweight on autos and media, but like staples and oil.

A net 50 per cent expect emerging markets around the world to deteriorate. A fifth seem to expect the bubble to burst altogether.

Bank and financial firms are the new pariahs.

Merrill Lynch’s credit strategist Barnaby Martin said the banks now faced much the same plight as telecom companies in 2002. “Their efforts to de-leverage will be bad for shareholders, but good for bondholders,” he said.

One glimmer of light is the rising — if small — number who think a fresh cycle of global growth is already beginning, despite the near-panic mood among their peers.— THE DAILY TELEGRAPH

Ambrose Evans-Pritchard has covered world politics and economics for a quarter of a century

Source : Today - 19 Jan 2008

$1,000 a night and higher have not deterred Formula 1 fans from snapping up trackside hotel rooms for the inaugural Singapore Grand Prix.

2008-01-22T04:23:00.000-08:00

RATES of $1,000 a night and higher have not deterred Formula 1 fans from snapping up trackside hotel rooms for the inaugural Singapore Grand Prix.

Hotels ranging from the glitzy Ritz-Carlton Millennia Singapore to the Peninsula-Excelsior Hotel are already fully booked for the Sept 26 to 28 race. This is despite significantly higher than normal room rates of over $1,000 per night for the Ritz (about a 100 per cent increase) and $300 for the Peninsula (about a 50 per cent increase).

Two other hotels - Swissotel The Stamford and Pan Pacific Singapore - anticipate a 100 per cent occupancy rate.

One reason for the higher rates is that the Government will be imposing a special hotel tax on total room revenue from Sept 24 to 28 - the week of the race.

The tax will range from 30 per cent - for the 11 trackside hotels - to 20 per cent for all other hotels.

Trackside hotels such as Marina Mandarin ($1,500 per night) and Fairmont Singapore ($1,830) are still entertaining bookings.

The Fullerton has yet to confirm rates, but will place those interested on a wait-list.

The high take-up rate is not confined to trackside hotels.

The Four Seasons, along Orchard Boulevard, also managed to sell out all of its rooms from Sept 20 to 28.

The race will be held on Sept 28. Qualifying sessions begin on Sept 27.

Tourists are expected to form a significant portion of the 100,000 fans expected for the grand prix, and they are expected to spend around $100 million on hotels, and at food and beverage outlets, nightspots and the like.

Corporate hospitality packages ranging from $3,500 to $7,500 per head have also been selling well. These were put on the market by race organisers Singapore GP in November.

A Singapore GP spokesman declined comment, but it is believed that suites in areas such as the pit area and exclusive Paddock Club are close to being sold out.

Source : Straits Times -21 Jan 2008

Singapore property market has turned somewhat jittery in the face of growing fears about a recession in the United States.

2008-01-22T04:22:00.000-08:00

Buyers might want to delay their property purchases till a clearer picture emerges, say experts

THE Singapore property market has turned somewhat jittery in the face of growing fears about a recession in the United States.

Analysts suggest that unless buyers need a home to live in, they might want to delay any purchases until a clearer picture emerges.

The days when speculators could make quick, easy profits are almost certainly over, they say.

Thus, consultants do not expect much sales activity in the lead-up to Chinese New Year, especially since few launches have been scheduled.

Indeed, market players might hold off till the Budget is released later next month, so they can gauge the Government’s stance, said one consultant, who added: ‘If I were a buyer, I’d wait before committing myself to a property investment.’

Apart from worries that a US recession might hurt growth in Singapore, some also believe last year’s price spurt in high-end homes was overdone.

‘If your goal is to flip the property before completion, you should stay out of the market,’ said Savills Residential director Ku Swee Yong. Such buyers could end up having to finance their purchases long term, he warned.

He noted that Singapore’s property market is stable but said there is a risk that prices could fall. If US sub- prime woes force mortgage insurers to write off bad insurance, this could trigger construction industry layoffs, as well as defaults on consumer credit-card rollover debt and car loans, said Mr Ku.

Some sellers appear to have lowered their expectations, particularly for high-end homes. But their asking levels are likely to remain above the purchase prices, analysts note.

In a recent classified advertisement in The Straits Times, high-floor units at Sky@eleven, a condominium off Thomson Road, were going for $1,250 per sq ft (psf). That falls short of earlier asking prices of $1,300 psf to $1,400 psf, but tops prices achieved at the launch early last year. Then, the highest price garnered was $1,200 psf, with the average at $975 psf.

‘The opportunities are there, but it is all a matter of timing,’ said a consultant. ‘In the short term, people who don’t have a lot of money to play with should think twice.’

‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels,’ said Mr Nicholas Mak, Knight Frank’s director of research and consultancy. ‘Developers are unlikely to cut prices, which should provide support for the market.’

Buyers who plan to live in their new homes, especially if they’re using collective sale gains, have less to worry about, though choices in the primary market might be limited. ‘Developers are waiting for the tempest in the stock market to pass before launching their properties,’ said Mr Mak.

There are favourable deals in the sub-sale and resale market, and the mass and landed markets remain laggards, consultants say. Recent caveats lodged show there are favourable landed buys in suburban spots.

One seasoned property investor said he would continue to scout for bargains but would be more selective.

‘The market is nervous but it’s not doomsday. There are still good buying opportunities,’ he said, adding that he scooped up a few cheap buys just after Sars. ‘Do your homework and narrow your search to, for example, areas with a growth story.’

Where new launches are concerned, two condos have started their staff previews. Martin Place Residences in Kim Yam Road is priced at $1,800 psf to $2,300 psf. Over in Bedok Reservoir, Waterfront Waves is priced at $750 psf to $800 psf.

Wait for the right price

‘Buyers should take a longer-term view and buy when they come across properties priced at acceptable levels. Developers are unlikely to cut prices, which should provide support for the market.’ MR MAK, on how homebuyers can cut down their risks when considering property investments in the current uncertain climate

Source : Sunday Times - 20 Jan 2008

Developers find pricing of GLS sites more in tune with market realities

2008-01-22T04:19:00.002-08:00

Developers find pricing of GLS sites more in tune with market realities

Developers seem to be turning increasingly to state tenders instead of en bloc sales to restock their residential landbanks. This is because land pricing at state tenders is more responsive to the current bearish market conditions.

Also, the Government Land Sales (GLS) programme, with its staple of mass-market, suburban residential sites, is currently just what developers want, as this market segment is expected to shine after the steep run-up in high-end home prices last year.

Figures compiled by Credo Real Estate show that while collective sales languished in the last two quarters of 2007, sales of GLS residential sites spiked in Q4. Developers picked up slightly more than $1 billion worth of 99-year leasehold residential sites sold through the GLS programme in Q4 of last year alone, surpassing the $865 million of such sites they had bought in the first nine months of the year.

In contrast, only $1.28 billion of residential collective sale sites changed hands in Q4 last year, down drastically from $11.2 billion in the first nine months.

Credo Real Estate managing director Karamjit Singh says: ‘En bloc sales have rigidity in their pricing mechanism; once the reserve price has been set in the collective sales agreement (CSA), it is difficult to lower it, as you’ll have to go through all the majority owners who agreed to the sale to sign a supplemental CSA.’

‘In contrast, the pricing for a state site offered through the GLS programme can be more reactive to the mood of the day, presenting an opportunity that developers are seizing today,’ he added.

Knight Frank executive director Nicholas Wong says: ‘Collective sales have a higher chance of success when the market is trending up as the reserve price in the CSA is always pegged to the last done transaction of a similar property. But when the market is flat or on a downturn, en bloc sales become more difficult to transact - unless the site boasts some unique propositions such as a landmark location, proximity to MRT stations, etc. Owners will have to price their sites reasonably to find buyers.’

Putting things in perspective, a seasoned market observer said: ‘Because the market has slowed, the spread between what developers are willing to pay and en bloc owners’ expectations has widened. En bloc sales involve many owners and it takes time for them to realise they have to lower their expectations.

‘Whereas for state land tenders, the minimum pricing is decided by the Chief Valuer, who is on top of the market and is more nimble to changes in market moods and values.’

The usual government policy is to sell a site if at least 85 per cent of the Chief Valuer’s price has been met.

For sites sold through the confirmed list, Chief Valuer’s assessment is made on the tender closing date. For sites sold through the reserve list (which are triggered for release only upon successful application by a developer), the Chief Valuer’s assessment is made before the government opens any application by a developer seeking the release of the site.

DTZ executive director Ong Choon Fah also says developers find it ‘more straightforward’ to pick up a site at a state tender, unlike the hassle of going through the Strata Titles Board and potential court hearings in the case of collective sales. ‘Developers are also balancing their portfolios. After the run-up in high-end home prices, the mass-market is expected to shine this year,’ Mrs Ong added. Residential sites in the GLS programme are largely in suburban locations, suitable for development into mass-market condos catering to upgrader demand.

Mrs Ong expects developers to continue preferring GLS sites to restock their landbanks in the months ahead - especially if the government offers more 99-year private condo sites in mature Housing & Development Board estates near MRT stations.

Credo’s Mr Singh expects the volume of residential collective sales deals to ease from last year’s record $12.5 billion to about $4-6 billion this year. With weaker market sentiment, owners will have to be more realistic about their pricing, especially in the suburban market where the GLS is a formidable source of alternative land supply for developers, albeit on 99-year leasehold tenure.

‘But there will still be en bloc sales because they are the only credible source of prime sites right now. Previously, Sentosa Cove used to be an alternative source of supply of high-end residential sites. But land sales there have come to an end. En bloc deals involving prime sites will take place - if prices are realistic,’ he added.

Source : Business Times - 22 Jan 2008

Asia is now less dependent on the US economy

2008-01-22T04:19:00.001-08:00

Asia is now less dependent on the US economy

(BANGKOK) Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the US economy than in the past.

While a severe downturn in the US would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fuelling orders for cars, electronics and housing - much of which will be supplied from Asia itself.

Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings - especially in the booming economies of China and India - will also help sustain the region through any US slowdown.

‘The US economy is not that important anymore,’ Hans Timmer, a World Bank economist, said in Singapore earlier this month.

Excluding Japan, 43 per cent of Asia’s exports go to other nations in the region, Lehman Brothers calculates - up from 37 per cent in 1995.

‘China and India represent a bigger presence on the world stage than just a half dozen years ago,’ said David Cohen, director of Asian forecasting at Action Economics in Singapore.

A drop of one percentage point in US economic growth would shave 1.3 percentage points from China’s growth rate due to lower exports, Citigroup estimates.

Since China is growing so fast, that isn’t likely to make much of a dent. China’s economy will still expand 11 per cent this year, slightly slower than in 2007, Citigroup projects.

Lehman Brothers forecasts 2008 growth will drop to 9.8 per cent, still remarkably strong.

Most regional projections show some drop-off from 2007, but still reflect healthy expectations.

The UN Economic and Social Commission for Asia and the Pacific said 38 developing economies in the region - including China and India - will expand an overall 7.8 per cent this year, slightly lower than growth of 8.3 per cent in 2007.

Global growth, meanwhile, will moderate to 3.3 per cent in 2008 from 3.6 per cent last year, with any slowdown in the US largely offset by growth in developing countries, the World Bank projects.

But Rajeev Malik, an economist with JPMorgan Chase in Singapore, cautioned that growth in China and India could not make up all the slack of a US downturn.

‘Demand in industrial countries is still pretty important for the rest of Asia,’ Mr Malik said. ‘While China, and to some extent India, offer some offsetting demand, there will still be some downshifting in activity if the US goes into recession.’

If the US economy does contract, India’s growth will likely slow to 7 per cent from the current rate of about 9 per cent, he predicted.

Asian stock markets have tumbled in recent weeks amid worries that a slowdown in the US will hurt exporters’ profits.

Still, some analysts say some stocks appear oversold and the drop may present a buying opportunity given the region’s growth potential.

Japan, the world’s second-largest economy, may suffer the most from a US contraction.

Ryutaro Kono, chief economist at BNP Paribas in Tokyo, predicts the nation’s economic growth will drop this year to about half of the 2 per cent it has marked in recent years.

Lower demand for exports could even have a silver lining for China by restraining inflation, which has soared to the highest level in more than a decade.

‘If China’s exports slow down significantly, you definitely will see lower prices rather than inflation,’ said Minggao Shen, an economist with Citigroup in Beijing.

But he did warn that weaker export demand could leave Chinese manufacturers with overcapacity problems. — AP

ALMOST LIKE HOME

2008-01-22T04:18:00.001-08:00

Industry association proposes rule on stay of 7 nights or more be lifted

FOR 20 years, there has been a little-known rule governing service apartments: Guests have to stay seven nights or more.

ALMOST LIKE HOME: Facilities offered in service apartments, such as this Fraser Suites two-bedroom apartment outfitted with a kitchen to prepare meals, would ‘help bridge the gaps for medical and family tourism’. — BT FILE PHOTO

Now, with an eye on the current hotel room crunch, the Serviced Apartments Association proposes that this condition be lifted.

There are at least 3,500 service apartment units here, compared to more than 37,000 hotel rooms.

If the association gets the go-ahead, this will have an impact on the short-stay accommodation market. Association president Alfred Ong told The Straits Times it is high time the rule was lifted - a rule he said is unique to Singapore.

He added: ‘If Singapore wants to be a first-class city, then it should give customers the choice, whether it be service apartments, hotel rooms or budget accommodation.’

Although the association said it began preliminary discussions with the Singapore Tourism Board (STB) and the Urban Redevelopment Authority (URA) in 2006 and stepped them up last year, the two agencies said they have yet to receive a formal proposal to lift the rule.

Travel industry players said such a move will help ease the room crunch in Singapore where hotels have registered high average occupancy of more than 80 per cent.

This has led to higher room rates, which in turn have led to concerns over Singapore’s competitive edge in the mass tourism sweepstakes.

The latest American Express market forecast on hotels in the Asia-Pacific, released last week, predicts that corporate rates in Singapore will go up by some 29 per cent this year.

This is higher than its projections on Hong Kong at 17 per cent, Beijing at 21 per cent and Kuala Lumpur at 20 per cent.

This is despite the 8,850 rooms added last year and this year.

Mr Prashant Aggarwal, head of American Express Consulting for Japan, the Asia-Pacific and Australia, cited increased demand with higher visitor arrivals as part of the reasons driving its projection.

However, Plaza Royal on Scotts hotel general manager Patrick Fiat said the industry should not be too concerned about the rates hike.

He told The Straits Times: ‘For the past 10 years, hotel rates have been low. So, the current spike is just hotel rates catching up with rates elsewhere.’ He expects levelling out by next year.

However, he is opposed to allowing service apartments to accept shorter stays.

But the service apartment industry sees the proposed move as complementary rather than competitive.

Ms Tonya Khong, general manager of Fraser Suites and Fraser Place, said: ‘There may not be much impact on the industry’s occupancy if the minimum duration of stay requirement is lifted.

‘We foresee that this move can help bridge the gaps for medical and family tourism, as cooking and children-friendly facilities as well as spacious living space will mean a great deal to these visitors.’

Mr Ong said in other Asian cities, most service apartment guests are middle- to long-term guests. Only about 30 per cent are short-stay guests.

But he added that allowing shorter stays will mean more efficient use of service apartments, which always have some spare days between long-term guests.

Source : Straits Times - 21 Jan 2008

Chuanghui Real Estate

2008-01-22T04:17:00.002-08:00

After booming in recent years, China’s real estate market is finally starting to feel the pinch from sagging demand and tighter controls.

One of China’s biggest real estate agencies, Chuanghui Real Estate, has shuttered dozens of outlets in Shanghai and other cities, leaving angry customers and employees, after an ill-timed expansion just as the market was peaking. Many other agencies around the country have also closed down.

So far, the retrenchment appears to be mainly limited to property brokers. But the moves could herald the beginning of a broader slowdown in one of Asia’s hottest real estate markets.

The government has been wrestling to get control of the property sector, worried that rising prices for housing are pushing poorer Chinese out of the market at a time when overall inflation is surging.

Regulators stepped up curbs on the property market last year, alarmed that ‘bubbles’ in property prices could collapse and trigger a financial crisis. Those efforts are starting to take effect. While urban housing prices last month rose 10.5 per cent from a year earlier, a sharp slowdown in sales transactions in recent weeks suggests a new trend.

In the first week of 2008, home sales in Beijing fell 20 per cent compared with the previous week, the state-run newspaper China Securities News reported. Sales were off 38 per cent in Shenzhen and 52 per cent in east China’s Nanjing, it said.

Realtors say the slump started late last year but due to various reasons, like land supply and property hoarding by developers, the impact hasn’t been seen yet in prices.

So far, there are no signs of a mortgage meltdown in China similar to that seen in the US, and experts don’t foresee property prices to fall substantially. Strong economic growth and surging demand from upwardly mobile families are supporting demand.

But business is slowing, especially for the so-called ’second-hand’ apartments, or existing, rather than newly built homes, that are the lifeblood of local realtors in this recently commercialised market.

‘In 2008, we think property developers will face some liquidity problems and financing issues,’ Matthew Kong of ratings agency Fitch Asia Corporates said recently. — AP

Source : Business Times - 22 Jan 2008

CapitaMall Trust Management Ltd will pay S$62.3 million

2008-01-22T04:17:00.001-08:00

CapitaMall Trust Management Ltd will pay S$62.3 million in distributable income, for the October-to-December period, or 2.34 Singapore cents per unit.

This compares with the distributable income of S$52.3 million it paid a year ago.

CapitaMall, which is 27-percent owned by Southeast Asia’s largest developer CapitaLand, said its fourth-quarter distribution was 30 percent higher than forecast due to acquisitions and higher lease rates for existing properties.

Net property income of S$44.7 million was 15 percent higher than the forecast of S$38.8 million. - CNA/ch

Source : Channel NewsAsia - 22 Jan 2008

714-unit City View@Boon Keng by Hoi Hup Sunway Development

2008-01-22T04:16:00.001-08:00

PRICEY condo-style flats will remain a small proportion of the total public housing supply with the Government pledging yesterday to continue providing affordable homes.

HIGH-END FLATS: The 714-unit City View@Boon Keng by Hoi Hup Sunway Development, drew about 3,500 applications for three- to five-room flats. Prices ranged from $349,000 to $727,000. — ST PHOTOS: DESMOND LIM

Its assurance came as high-end flats in Boon Keng offered by private developers were launched recently for up to $727,000 for a five-room flat.

The flats come with interior layouts and fittings more commonly seen in private condominiums, such as bay windows in bathrooms, large balconies and built-in wardrobes.

Buyers are also concerned that prices of resale Housing Board flats shot up 17.4 per cent last year - the highest in a decade - and that sellers in coveted districts are demanding as much as $100,000 in cash over the valuation of their flats.

CONDO-STYLE FIXTURES: Some flats in City View will have wall-to-wall balconies in living rooms.
National Development Minister Mah Bow Tan told Parliament that high-end flats - built under the Design, Build and Sell Scheme (DBSS) - ’serve to fulfil the needs of a niche segment of the HDB market - those with higher aspirations and who can afford a higher price’.

Under the programme, developers are free to design and price the flats as long as they work within the rules of public housing. This means they have to sell flats to families earning no more than $8,000 a month - the limit for households buying public housing.

The first such project, the 616-unit Premiere@ Tampines by Sim Lian Land, drew almost 6,000 applications for its two-, four- and five-room flats with prices from $138,000 to $450,000.

The second, the 714-unit City View@Boon Keng by Hoi Hup Sunway Development, drew about 3,500 applications for three- to five-room flats. Prices ranged from $349,000 to $727,000.

The City View prices had prompted some to wonder if they were affordable to those earning $8,000 a month. Nominated MP Eunice Olsen asked if the income ceiling could be raised for such flats.

Mr Mah said no, because it could result in developers pricing their flats even higher.

The minister added that private companies taking part in the DBSS scheme develop the projects knowing there is an income cap on buyers.

He told Dr Ong Seh Hong (Marine Parade GRC), who asked why the HDB had ’shifted’ from its original mission of providing affordable housing, that the board was, in fact, staying the course.

In recent years it had re-introduced new two- and three-room flats, while additional housing grants are also being offered to low- income earners, he said.

Besides, recent buyers of new HDB flats actually spend just 20 per cent of their monthly household income on housing. This is about half of the debt servicing limit typically used by financial institutions.

Mr Mah added that the HDB was monitoring resale prices, but urged buyers who cannot afford the cash-over-valuation sums demanded by sellers to postpone their purchases or apply for new - and cheaper - HDB flats instead.

Demand for such homes has been rising as well. Last month, 316 surplus flats in the outlying towns of Hougang, Sengkang and Punggol drew 5,147 applications.

The Government will not abandon mission of providing public housing for Singaporeans, assures National Development Minister Mah Bow Tan.

In response to questions from MPs, Mr Mah told Parliament that even with the rising popularity of more expensive condo-style flats - built and sold by private developers under the Design, Built and Sell Scheme (DBSS) - HDB’s top priority is still providing traditional no-frills flats.

Source : Straits Times - 22 Jan 2008

Singapore Sports Hub Consortium to build a hotel in the Sports Hub.

2008-01-22T04:14:00.002-08:00

Shatec signs pact to be master caterer of hub for 25 years

Genting International plc (GIL) yesterday confirmed a BT report that it is currently in preliminary talks with Singapore Sports Hub Consortium to build a hotel in the Sports Hub.

In an announcement on the Singapore Exchange, GIL said ‘preliminary planning suggests the future hotel could have over 500 rooms which would significantly add to the managed room stock of the company’s integrated resort on Sentosa when it is operational.’

This is not expected to have any material impact on the consolidated net tangible assets and earnings per share of the company for the financial year ending Dec 31, 2008, it added.

Representatives of its subsidiary Resorts World at Sentosa Pte Ltd were present at a celebration yesterday for the SSH consortium for being chosen as the preferred bidder for the Sports Hub - to be called Premier Park - from among three short-listed consortiums.

Krist Boo, deputy director of communications at Resorts World at Sentosa told BT that the proposed arrangement is for GIL to build and operate the hotel over the 25-year tenure but details on the hotel itself are still being worked out.

Resorts World at Sentosa, the integrated resorts project by Genting International, is building six hotels with a total of 1,830 rooms by 2010.

A BT report had quoted managing director of Dragages Singapore Ludwig Reichhold as saying that the consortium is in discussion with GIL to invest in a hotel in the Sports Hub, with a potential construction cost of $200 million.

The report added that the SSH consortium is in talks to team up with Frasers Centrepoint on the Sports Hub’s retail space.

Talks with GIL and Frasers Centrepoint were already underway during the tendering process. An SSH booklet on the overview of its proposal contained logos of its team members including GIL and Frasers Centrepoint. A spokesperson for Dragages confirmed that discussions dated back to 2006.

Dragages Singapore is the lead partner in the SSH consortium and is a subsidiary of France-based Bouygues Construction, which has been involved in more than 30 public-private-partnership (PPP) projects world wide and developed infrastructures such as the Stade de France stadium in Paris and the Asia World Expo in Hong Kong.

Under the Public-Private-Partnership arrangement, the government will pay the consortium a total net present value of $1.87 billion to design, finance, build and operate the Sports Hub over the 25-year tenure. The construction cost of the Sport Hub is estimated to be some $1.2 billion.

The Sports Hub, which occupies a 35-hectare site in Kallang, is the first and largest sports facilities infrastructure PPP project in the world.

Another organisation set to ride the buzz surrounding the Sports Hub is the Singapore International Hotel and Tourism College (Shatec), which has signed an agreement with the SSH consortium to be the master caterer over the 25-year tenure.

Shatec will provide a complete set of lifestyle food and beverage catering solutions for all special events and activities at the Sports Hub.

‘As the master caterer, Shatec will be part of all decisions on catering within the hub and will also be the primary operator of the central and satellite kitchens, corporate boxes and hospitality suites,’ Shatec chief executive Steven Chua said. ‘This in turn shall provide our students the best exposure to the spectrum of hospitality and tourism opportunities.’

The consortium’s comprehensive sporting calendar guarantees at least 90 event days at the National Stadium and 46 days at the Singapore Indoor Stadium. Given the number of events to be held here, the demand for F&B catering at the Sports Hub is expected to be robust, he added.

To ensure timely and responsive on-site management operations, Shatec’s F&B services will be delivered under a new corporate subsidiary, which will have overall purview over the entire hub except for the retail and commercial areas.

Source : Business Times - 22 Jan 2008

CHIP Eng Seng Corporation has been awarded a contract worth $188 million by the Housing & Development Board

2008-01-22T04:14:00.001-08:00

CHIP Eng Seng Corporation has been awarded a contract worth $188 million by the Housing & Development Board for the construction of 1,394 dwelling units in Queenstown.

The contract, won through wholly-owned subsidiary Chip Eng Seng Contractors (1988) Pte Ltd, also includes the construction of a multi-storey carpark, link bridges, a roof garden, an education centre and other facilities.

Building works are expected to begin next month and to be completed by 2011. This is Chip Eng Seng’s first construction contract won this year.

With construction demand on the rise, Chip Eng Seng said it expects its construction division to be busy with tenders and construction work this year.

‘After many lacklustre years, an upturn in the construction industry is in view. We are very positive about our prospects for 2008,’ said Lim Tiam Seng, executive chairman of the group.

As at June 2007, Chip Eng Seng had a construction order book of about $590 million that will take the group through to 2011. The company is undertaking two other HDB housing projects. One is in Sembawang and the other is the Pinnacle @ Duxton, which features seven 50-storey residential blocks with skybridges, and communal and commercial facilities.

When completed, Pinnacle @ Duxton will be the tallest public housing in Singapore.

Chip Eng Seng, which is into property as well as construction, has undertaken a broad spectrum of construction projects in both the private and public sectors. It has also been actively acquiring and developing properties in Singapore, spanning residential, commercial and industrial properties.

Source : Business Times - 22 Jan 2008

Hotel sales in Singapore topped US$376 million

2008-01-22T04:13:00.002-08:00

Hotel sales in Singapore topped US$376 million last year, putting it in sixth position in transaction activity in Asia.

This is a 3.5 per cent growth from 2006.

According to Jones Lang LaSalle Hotels, Japan saw the highest activity last year with US$6.8 billion of deals done, a 63 per cent jump from the previous year.

Jones Lang attributed the lure of Japan to the low cost of debt.

It added that while economic growth rates may not be as strong as some parts of the world, Japanese hotels still offer a positive yield spread.

Hong Kong trailed a far second with US$850 million of sales transacted, followed by China with US$727 million. - CNA/ac

Source : Channel NewsAsia - 21 Jan 2008

Hotel sales in Singapore topped US$376 million

2008-01-22T04:13:00.001-08:00

GIC Real Estate is partnering with Russia’s PIK Group

2008-01-22T04:11:00.000-08:00

GIC Real Estate is partnering with Russia’s PIK Group to develop a large urban township in the city of Mytischi in Russia.

The 114-hectare site is located in the Moscow region to the northeast of the capital.

GIC Real Estate will acquire a 25 per cent stake in the project for US$233 million (S$336 million).

A CB Richard Ellis appraisal carried out 12 months ago valued the site at over US$1.3 billion.

The township will contain 50 high-rise apartment buildings and 13 low-rise commercial buildings.

There will also be five schools, seven kindergartens, two polyclinics and over 17,000 parking lots.

When completed in 2013, the development can house about 50,000 residents.

The PIK Group is one of the largest real estate developers in Russia. - CNA/ac

Source : Channel NewsAsia - 21 Jan 2008

The “Cool Dome” design

2008-01-19T04:30:00.000-08:00

The “Cool Dome” design, submitted by the Singapore Sports Hub consortium, will be Singapore’s next iconic structure.

Singapore Sports Hub Group’s proposal

The Singapore government on Saturday revealed the consortium as its preferred bidder for the Singapore Sports Hub project.

The consortium beats two other bids.

The winning team’s strong programming line-up gave it the upper hand over their rivals.

These were the “Horse shoe shaped design” submitted by the Singapore Gold consortium and the “wrapped-Stadium design” submitted by the Alpine Mayreder.

The new sports hub will be completed by end 2011 and will cost some S$1.2 billion. - CNA/ir

Source : Channel NewsAsia - 19 Jan 2008

The majority owners of Regent Garden, a 31-unit development in West Coast Road, are trying to back out of a deal with Allgreen Properties

2008-01-19T04:27:00.000-08:00

Majority owners go to court claiming collective sale price undervalues site

ANOTHER collective sale dispute is brewing, but this time, those locking horns with the developer are the majority owners. Usually, the minority owners are the ones who take the lead in contesting such sales.

The majority owners of Regent Garden, a 31-unit development in West Coast Road, are trying to back out of a deal with Allgreen Properties .

Quite often, collective sale disputes have been triggered by unhappiness on the part of minority owners, as with the ongoing Horizon Towers case.

The Regent Garden owners inked a sales agreement in April last year to sell their property to mainboard-listed Allgreen for $34 million.

However, in a statement from Allgreen to the Singapore Exchange yesterday, the company disclosed that the majority owners are asking the High Court to release them from the agreement.

Alternatively, the owners want to get damages of between $5.7 million and $6.685 million from Allgreen.

Allgreen said in the same announcement that it intends to ‘vigorously contest this action, and the claims and allegations made by the majority vendors’. The firm maintains that the deal remains valid and binding at the original sale price of $34 million.

Allgreen has also gone to the High Court, to ask it to order the majority owners to complete the transaction by Feb 28.

According to documents seen by The Straits Times, the majority owners, who own 25 of the 31 units, signed the deal last April. By November, the minority owners had agreed to the deal and withdrawn the objections they had filed with the Strata Titles Board.

However, the majority owners, through their lawyers, wrote to Allgreen last month, claiming the sale price of $34 million was a ‘mutual fundamental mistake’.

It arose because the sale proceeds assumed a development charge payable of $7.2 million when the owners had expected a charge of only $950,000. So the sale price was at ‘a gross undervalue’.

The minority owners also appear to have been paid extra. But the majority owners say Allgreen has refused to give them these details.

To this, Allgreen points out that its bid of $34 million was the highest among all the bids. It was also $4 million higher than the reserve sale price.

It disagrees that a mistake was made. It says the sales committee had made a conscious decision not to obtain the actual baseline plot ratio - which affects the development charge - from the Urban Redevelopment Authority before the deal was struck.

According to Allgreen, it had even offered a floating sale price, which would be subject to the development charge, but the sales committee wanted to fix the price - in order to be guaranteed certainty of sale.

Only later did the majority owners ask a property consultancy to put together a valuation report using the actual baseline plot ratio. This resulted in a higher valuation of Regent Garden.

Allgreen says such assertions are ‘nothing more than belated attempts to rewrite the bargain in the hope of extracting a higher price for Regent Garden’.

Source : Straits Times - 19 Jan 2008

STB power to hear all objections

2008-01-19T04:25:00.000-08:00

SINGAPORE has seen several ugly en bloc tussles but this is a first. The majority owners, having agreed to sell their condominium, are now suing the buyers.

A group of 25 at the 31-unit Regent Garden is alleging that developer Allgreen Properties has breached the sale and purchase agreement by grossly undervaluing the condominium.

The owners filed a claim last Monday with the High Court to declare that they are no longer bound by the agreement, which saw the condominium sold for $34 million last April.

On Friday, Allgreen struck back. It announced that it will “vigorously contest this action and the claims and allegations made by the majority vendors”, and has applied for a court order to force the majority owners to complete the transaction.

According to court documents obtained by Today, the dispute centres on two issues. The majority owners, represented by Senior Counsel Molly Lim, allege that Allgreen had overstated the development charge by more than $6 million, thereby depressing the sale price by that sum.

They also claim the developer gave “disproportionately high” proceeds to the six erstwhile minority owners to secure full consent. The latter have since agreed to the sale and have applied to withdraw their objections, set to be heard Jan 30 by the Strata Titles Board (STB).

Now it is the majority owners who want to be heard by the STB, which an experienced en bloc lawyer, who declined to be named, said puts the STB in an “interesting” position.

The law now gives STB power to hear all objections, but the Regent agreement was signed before the legislative change.

According to Knight Frank managing director Tan Tiong Cheng, he has “never come across a case where the majority owners sought to rely on the fluctuation in the development baseline gross floor area to renege on their agreement with the developer”.

“It is also my experience that it is not uncommon for the developer to contribute to the payment of a premium to minority owners in order to procure their consent to the collective sale,” he said in a court document.

Bernard and Rada Law Corporation associate director M Kumaran, who oversees his firm’s en bloc cases, said the majority owners would have a case if the buyers had misrepresented the development charges.

“This sort of matter has been taken up to court but not in the context of en bloc sales,” he said.

Source : Weekend Today - 19 Jan 2008

IT HAS remained silent — and passive — in the protracted saga over the proposed sale of Gillman Heights (picture) to developer CapitaLand for $528 mil

2007-12-23T02:51:00.000-08:00

IT HAS remained silent — and passive — in the protracted saga over the proposed sale of Gillman Heights (picture) to developer CapitaLand for $528 million.

But now, the National University of Singapore (NUS) finds fingers pointing at it after the Strata Titles Board (STB) approved the deal on Friday.

The biggest faction opposed to the deal, comprising 53 of the 76 minority owners, told Today they would appeal against the STB’s decision, and chief among their grouses is the NUS’ role in the en bloc process.

The university owns almost half of the estate’s 608 units, which it rents out to its academic staff.

Said one minority owner: “We are very unhappy and very disappointed with the result. NUS was pressurised by the majority owners to agree to the en bloc sale.”

In its grounds of decision, the STB said that it was “very mindful” that the NUS was the single majority owner.

Throughout the sale, the NUS stuck to its original position that it would not take part in the proceedings other than agreeing to abide by the majority decision of the remaining owners, the STB noted. It also ruled that the majority owners had “acted properly” in dealing with the NUS.

However, even after the ruling, some of the minority owners insisted that the NUS should not have followed the decision to sell, based on a simple majority. Instead, it should only do so when at least 80 per cent of the remaining owners agreed to the sale, they argued.

Today understands that the NUS signed the Collective Sale Agreement in June last year, after some 70 per cent of the remaining owners did so.

The university could not be reached for comment at press time.

But Lee & Lee senior partner Quek Mong Hua, who represented the majority owners, said: “There’s no reason why NUS should not support the en bloc sale when a big majority of the other owners want the deal.”

The STB also had strong words for one of the valuation reports — prepared by a former chief valuer for Overseas Union Bank, Mr Yick Keng Hang — put up by the minority owners. The report revised the value of Gillman Heights from $580 million to $660 million within seven months.

The board, which rejected Mr Yick’s evidence, said in its ruling: “Yick had shown himself to be given to hyperbole. A review of his evidence would show that he was shifty and self-serving whenever it suited him.”

Launched in February last year, the en bloc sale process — which eventually garnered 86.7-per-cent consent — has been dogged by several controversies, including a dispute over the level of consent needed for the sale to go through.

Barring any appeal, the sale committee has three months to complete the deal.

Sale committee chairman Robert Wiener was “relieved” at the decision.

But he added: “Obviously, we would be happier if we could get our money earlier, what with property prices going through the roof.”

Source : Today Weekend - 22 Dec 2007

Retail rents are expected to rise

2007-12-23T02:50:00.002-08:00

As far as retail space is concerned, the weakening market sentiment now grabbing the headlines might well belong to another planet. Retail rents are expected to rise next year - especially in prime areas such as Orchard Road - fuelled by strong demand and limited prime space.

Jones Lang LaSalle (JLL) expects rents to rise between 4.5 and 4.8 per cent in the Orchard area, while CB Richard Ellis (CBRE) is forecasting an increase of 4-8 per cent. And rents at suburban malls could go up 2-5 per cent in 2008, says CBRE.

In Q3 2007, the Orchard area achieved about $40 to $41 per square foot (psf) per month, according to JLL. And for the same quarter, retail rents increased 3.3-3.5 per cent year on year.

With occupancy rates around 95-98 per cent in Orchard Road malls, demand is clearly alive and well.

But Pua Seck Guan, CEO of CapitaLand Retail, CapitaMall Trust Management and CapitaLand Financial, is quick to point out that any increase in rent has to be relative to increases in retailers’ takings, so as to ensure sustainable growth.

‘Sales this year, over last year, are 5-7 per cent higher due to the economy and sales productivity,’ he says. ‘Customer traffic has seen a 27 per cent increase over the past four to five years. This outweighs the rent increases.’

According to him, rent renewal rates this year are 12 per cent higher than the expired rent, which he deems reasonable owing to GDP growth and rising inflation. ‘Moving forward, we expect to see an 8-12 per cent increase over the next two to three years,’ he told BT. The leases are generally three years for specialty stores.

While the injection of new retail space next year will help pace retail rents, take-up is expected to increase with the new supply. CBRE puts new supply for 2008 at 2.57 million sq ft, thanks to upcoming shopping malls such as ION Orchard, Orchard Central and West Coast Plaza.

Consumer spending has been on the rise. According to Citibank economist, Zheng Kit Wei, private consumption rose 4.5 per cent in the first three quarters of this year, which is substantially higher than the 2.5 per cent increase last year. Retail sales are expected to remain robust in the high single digits.

‘The unemployment rate has fallen to a 10-year low of 1.7 per cent,’ says Mr Zheng. ‘Wages have risen almost 7 per cent in the first three quarters of the year, nearly double the 3.2 per cent increase last year. This has put more cash into consumers’ pockets and given them greater confidence to spend more.’

Mavis Seow, executive director of retail services for CBRE, says retail sales to date this year total $23.8 billion on the back of the hot property market, optimistic economic outlook and steady stream of tourist arrivals.

And with the launch of the Singapore Flyer and the inaugural Formula One night race next year, as well as the upcoming integrated resorts, sales are expected to keep going strong, if not improve, says Chua Yang Liang, head of research (South East Asia) for JLL.

Retailers, too, are expecting cash registers to ring into the New Year, thanks to the festive season and fat bonuses. Tan Yew Kiat, general manager of homegrown fashion label bYSI, is forecasting a sales increase about 25-30 per cent this Christmas.

bYSI, for one, plans to capitalise on the additional supply of space by launching a flagship store when Orchard Turn opens in October next year.

As for shoppers, they can look forward to new concept stores, flagship stores and new entrants to the market. This year has seen a lot of demand from retailers in terms of new brands compared with last year, says CapitaLand’s Mr Pua, who cites examples such as Cortefiel as well as new stand-alone stores like Kate Spade and Agnes B.

‘Fashion is on its way up, although I think there’s still strong growth for jewellery and watches and even healthcare and beauty products,’ he reckons. ‘This year has been particularly encouraging across the board.’

Source : Business Times - 22 Dec 2007

United States economy is unlikely to slip into recession

2007-12-23T02:50:00.001-08:00

The United States economy is unlikely to slip into recession, Abby Joseph Cohen, chief investment strategist at Goldman Sachs, said in remarks published yesterday.

‘That does not mean that the probability of a recession is zero. We just think that a slowing in growth is more likely than a recession,’ Ms Cohen told Germany’s Sueddeutsche Zeitung newspaper.

‘The Federal Reserve has shown in recent weeks that it is paying attention and that it wants to boost people’s confidence,’ she added.

While there was weakness in US housing construction and some areas of private consumption, this would be offset by export growth and corporate investment, she said. Goldman expected US economic growth of 1.8 per cent next year, weaker than other institutions are predicting, she said, adding that the bank nonetheless viewed shares as undervalued.

Some finance companies would report terrible earnings figures for the fourth quarter but Goldman still expected single digit profit growth for next year overall.

The ‘fair value’ for the Standard & Poors 500 Index of top US companies for the end of 2008 was 1,675 points, up from around 1,460 now, Ms Cohen said.

The Dow Jones industrial average would be around 14,750 at the end of next year, compared with just over 13,000 now, she estimated.

Ms Cohen told the paper that the trend in US inflation would remain moderate. Central banks did not have to worry about wage increases and could concentrate on the current problems on financial markets.

‘It’s true that over the past week there was some confusion among investors over the Fed’s communication but you have to look to the longer term,’ she said.

‘The decisive factor is that central banks have acted in close cooperation and that is an enormously important signal to the markets as to the availability of liquidity. I am increasingly optimistic: when we are into 2008 everyone will see that the central banks did the right thing.’ - Reuters

Source : Business Times - 22 Dec 2007

SOARING office rents

2007-12-23T02:49:00.001-08:00

SOARING office rents have forced the Shenton Medical Group clinic out of its Republic Plaza location to a cheaper space at an older building nearby - The Arcade.

The company had been paying $5 plus per sq ft (psf) since 2002-2003 but was stunned with a demand for about $18 psf in the middle of the year, when lease renewal talks started.

Dr Lee Hong Huei, deputy president, Singapore operations division of ParkwayHealth, said the massive rise was a major factor in the firm’s decision to move.

‘We felt that it was a bit difficult to pass on the costs to our clients,’ he said.

It is becoming a familiar story around town with companies caught between a space crunch and relentless rent rises.

Parkway’s new clinic will open in January and take up a similar amount of space on part of The Arcade’s 18th floor and all of the 19th floor.

While The Arcade is in the prime Raffles Place area, it is not a new or top-grade building. Republic Plaza, on the other hand, is among the most coveted addresses in the area.

Asking rents at the City Developments-owned building have climbed to a whopping $19.80 psf amid the supply squeeze.

Monthly asking rents for prime office spaces in the Central Business District now average $16.30 psf, according to property consultancy Cushman & Wakefield.

This is up 4.5 per cent from last month and an eye-watering 285 per cent increase from the market bottom about three years ago.

Even in the shopping belt of Orchard and Scotts Roads, prime office rents have risen to $13.61 psf, up 8 per cent from last month and nearly 102 per cent from a year ago, said Cushman & Wakefield.

‘Almost all our facilities have experienced rents rising at 30 to 40 per cent on average, except for the 300 per cent jump at Republic Plaza,’ said Shenton’s Dr Lee.

‘Medicine costs have also gone up, so our margins are very thin.’

The increase in prime office rents this year has been rapid.

Last month, net rents for the top 25 grade A office buildings were at a record $16.02 psf a month on average from $15.54 in October.

To manage the supply squeeze, the Government has released transitional office sites for short-term lease and more office sites for sale.

But a new building on a sale site may not come in time to meet current demand.

The buildings on sites sold recently in Tanjong Pagar and Marina View are expected to come on stream only around late 2010 to 2011, said Cushman & Wakefield managing director Donald Han.

There are also concerns of an oversupply from 2010, when a large amount of space in the Marina Bay Financial Centre becomes available.

Nevertheless, space remains tight for now.

Next year, just about 1.35 million sq ft of space will come on stream, with less than half a million sq ft in prime areas such as VisionCrest in the Oxley area near Orchard Road, said Mr Han, but historical office demand is at two million sq ft a year.

‘The upswing in rents will continue next year, but the pace of acceleration will slow as we are already moving to a high base,’ he said.

There is also increasing resistance, as companies move to cheaper space in alternative or suburban locations.

Mr Han forecasts a rise of 20 per cent to 25 per cent in office rents for next year.

Source : Straits Times - 22 Dec 2007

Gillman Heights

2007-12-23T02:48:00.000-08:00

CAPITALAND and Hotel Properties Ltd (HPL) separately said yesterday that the Strata Titles Board (STB) had given the green light for the en bloc sale of Gillman Heights Condominium. Both cited notification by the vendors’ solicitors that approval was given yesterday.

Gillman Heights was sold in February for $548 million, or $19 million above the property’s reserve price, to a joint venture formed by CapitaLand, HPL subsidiary HPL Orchard Place Pte Ltd, and two private funds.

Gillman Heights, on Alexandra Road, covers an area of 836,432 square feet and is a 99-year leasehold site. It has a 2.1 plot ratio.

CapitaLand plans to turn the site into a distinctive residential landmark, with about 1,200 homes.

Earlier this month, the much publicised Horizon Towers’ en bloc sale was finally approved by STB, after several stops and starts along the way. The delay stemmed from various owners being dissatisfied with the $500 million sale price as the property market began to flourish and property prices started to appreciate steeply, shortly after the sale.

The buyers for the property are HPL and partners Morgan Stanley Real Estate and Qatar Investment Authority.

Another major en bloc sale that was approved this month was that of Farrer Court. In June, a consortium - comprising CapitaLand, HPL and US-based Wachovia Development Corporation - purchased Farrer Court for the massive sum of around $1.34 billion, the biggest amount ever garnered for a collective sale.

The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 square feet and 1,453 square feet. A 36-storey condominium with about 1,500 apartments will be built and it is expected to be launched in the first half of 2009.

Source : Business Times - 22 Dec 2007

CAPITALAND shares have endured a turbulent journey

2007-12-23T02:47:00.000-08:00

CAPITALAND shares have endured a turbulent journey of late, and this week was no different.

The property stock plunged from $7.05 on Tuesday last week to as low as $5.85 during intra-day trade this week amid heavy volume.

Unlike in the previous week, when the daily volume never exceeded 17 million units, the daily volume remained above 21 million this week.

The stock closed five cents up at $6.15 yesterday - down 45 cents for the week.

Real estate investment trusts, or Reits, associated with CapitaLand also went south this week.

CapitaMall Trust fell to as low as $3.10 on Tuesday before it rebounded to end flat for the week at $3.30, while CapitaCommercial Trust dropped seven cents to $2.36.

Shares of CapitaLand were worst-hit on Monday, when they fell 50 cents to $6.10 - their lowest close so far this year.

Strong selling pressure triggered by an 11 per cent fall in Australia’s property trust index caused that day’s plunge.

That came amid news that Centro Properties, an Australian property trust that owns 700 United States shopping malls, had problems refinancing its debts.

Centro shares plunged 76 per cent on Monday after the firm said it was struggling to refinance $1A.3 billion ($1S.9 billion) worth of maturing debts because of the collapse in the US sub-prime housing market.

There are, however, signs that the worst might be over for CapitaLand.

An AmFraser Securities report on Tuesday said: ‘These two days could well mark the selling climax for CapitaLand, which lost 17 per cent in the past week, falling from $7.05 to a new 2007 low of $5.85 today.’

That seems true, with the shares staying above $6 since Tuesday.

In a show of confidence, UBS maintained its ‘buy’ call, while keeping its target price of $10.60 that same day.

A UBS report says CapitaLand still enjoys strong access to capital. It also doubts whether the property firm will face the same debt problems as Centro since ‘it has not overextended itself’.

But OCBC Investment Research kept its ‘hold’ rating, while slashing its price forecast from $7.83 to $6.94.

It noted: ‘As for its recent results, though headline numbers were strong, this was due mainly to one-off items.

‘Excluding these one-off items, we estimate that its profit after tax and minority interests would have been more modest at about $34 million.’

Source : Straits Times - 22 Dec 2007

Don’t just leave it to your lawyers and agents. Let’s go through six legal aspects of buying property.

2007-12-23T02:46:00.000-08:00

Don’t just leave it to your lawyers and agents. Let’s go through six legal aspects of buying property. Tan Hui Yee

Figuring out your options

THE option to purchase is the right to buy a property at a specified price within a specified period of time.

To secure this, the buyer must pay an option or booking fee to the property’s developer. This usually amounts to 5 to 10 per cent of the purchase price for private homes.If a buyer is granted an option to purchase, the developer has to deliver to the buyer or his lawyer the sale and purchase agreement and title deed within 14 days. The option is valid for three weeks from the date of delivery of these documents.

To exercise the option, the buyer must sign the sale and purchase agreement, and pay the balance of the down payment.

The usual down payment for private homes - comprising the option fee and option exercise fee - is 20 per cent of the purchase price.

If the buyer does not exercise his option, he loses 25 per cent of his option fee.

The developer can sell the property to another party after he refunds to the first buyer 75 per cent of the option fee.

Those buying resale Housing Board flats will use a standard option to purchase form issued by the HDB.

The buyer in this case gets 14 days to consider his purchase after paying the seller a non-refundable option fee of up to $1,000.

This fee is forfeited if the buyer decides not to go ahead with the purchase.

If he does decide to go ahead with the purchase, he signs the same form and pays another fee to the seller to exercise the option. This option exercise fee, together with the option fee, cannot exceed $5,000.

If the buyer abandons the purchase after exercising his option, the owner of the flat can claim damages against him.

Lawyers’ role

LAWYERS play a key role in the homebuying process, and they come into the picture once the buyer decides on a property.

A conveyancing lawyer is responsible for doing all the relevant searches on the title deed to a property, to ensure that the seller does not owe any debt to the Government.

Such debts could range from unpaid property tax to money that is owed to the Government over road improvement works nearby, said the head of conveyancing at Lawhub, Ms Winnie Tan.

The lawyer also needs to check to see if there is a road reserve on the property, which would allow part of the property to be acquired by the Government in the future for roads to be built.

This is important as it may affect the value of the property, which may in turn reduce the loan amount you can get to finance it.

If a buyer is taking out a bank loan, the lawyer has to ensure that the relevant documents are ready.

Usually, said Ms Tan, a lawyer is hired after the buyer puts down an option fee or booking fee for the property.

She suggests that buyers could look for a lawyer even before that stage, if they want to avoid forfeiting the option fee should the property turn out to have problems and they have to let the option lapse.

The lawyer’s role ends when the title deed is handed over to the buyer.

For uncompleted properties, this could take up to three years. Resale transactions, however, are usually completed within three or four months.

Ms Tan estimates that the legal fees for a typical home costing not more than $1 million, and paid for with Central Provident Fund savings and bank loans, will range from $2,500 to $3,000.

This does not include the $800 to $1,000 usually charged for searches on the property and other associated costs.

Fees and taxes

THERE are various charges you need to take note of when buying property: property tax, stamp duty and agents’ commissions.

Commission structures are not fixed under the law, though there are market norms for the different segments such as private homes and resale Housing Board flats.

Buyers of private homes typically do not pay anything to agents, as the agents collect a 2 per cent commission from the sellers.

Buyers of resale HDB flats, however, are charged a 1 per cent commission if they hire the agent. Most sellers’ agents also charge buyers a 1 per cent fee if they are not represented by a broker.

This practice has been called into question by the Consumers Association of Singapore because of a possible conflict of interests.

Many agents for sellers, however, refuse to show a flat to independent buyers unless a fee is promised. They argue that an independent buyer would have a higher chance of tripping up in a transaction if he did not have the help of a broker.

Buyers also need to take note of the stamp duty. This is a tax on commercial and legal documents that record and give effect to certain transactions. The duty is payable even if the transaction is aborted.

The stamp duty for the purchase of property is calculated at 1 per cent of the first $180,000 of the purchase price or market value of the unit, whichever is higher.

The rate goes up to 2 per cent for the next $180,000, and 3 per cent for the remainder if the value exceeds $360,000.

Finally, the buyer has to remember the property tax payable for his new home. This is calculated based on the annual value of his home, which is the estimated annual rent it can fetch if it is let out.

This amount, which excludes the rent for furniture and fittings, is determined by analysing rents for comparable buildings and other data, so it changes with market trends.

The property tax on owner-occupied homes is charged at 4 per cent of the annual value. This concession is applicable to only one property at any one time.

If the property is not owner-occupied, the tax rate is 10 per cent of the property’s annual value.

This year’s Budget included a one-off property tax rebate of up to$100 per year for 2008 as well as 2009. The rebates apply to owner-occupied residential properties.

If you are not Singaporean…

FOREIGNERS can buy condominiums and private apartments in buildings that have six or more storeys, but face restrictions in buying landed homes.

To buy landed property, they need to submit an application to the Government.

They will get the go-ahead only if they are deemed to have made a significant economic contribution to Singapore.

Those buying plots of land in Sentosa Cove, however, were recently allowed to submit a shorter application form and granted fast-track approval.

For public housing, only foreigners who are permanent residents (PRs) may apply for a new flat directly from the Housing Board (HDB) but they have to do this with their Singaporean spouse, child or parent.

PRs are free to buy resale HDB flats on the open market.

Those who choose to buy an HDB flat need to be aware of the Board’s ethnic integration policy. This limits the proportion of each ethnic group represented within a block and precinct, to encourage various groups to interact with each other on a daily basis.

If the limit has been reached for a particular area, the owner can sell his flat only to someone of the same ethnic group as him.

Meanwhile, executive condominiums are available to foreigners after 10 years.

These developments usually have the same facilities as condominiums, such as swimming pools and gymnasiums. PRs may buy a new executive condominium with their Singaporean spouse, child or parent.

Insuring your home adequately

BUYING a home is a major purchase for many people.

To make sure that things don’t go wrong after your major purchase, you may want to insure your home.

Apart from the standard fire policy that covers losses caused by fire, lightning and explosion, you can also take a home insurance policy that covers destruction to a building, home contents and any renovations carried out.

If your property is mortgaged, the mortgagee will require you to have a fire insurance policy on the outstanding loan amount.

When taking out home insurance, make sure that the sum insured is adequate.

The sum should reflect the total cost of rebuilding or reinstating your insured property to its original state, plus professional fees and the cost for removal of debris, says the General Insurance Association of Singapore.

Market value is normally not used as the sum insured.

To estimate replacement cost, you need to know your property’s gross floor area.

As a rough guide, the replacement cost of a medium-quality condominium could fall between $137 per sq ft (psf) and $182 psf, while that for landed cluster housing could range between $152 psf and $182 psf.

You should note that the total claim amount is limited to the total cost of the property or reinstatement.

Valuation matters

A PROPERTY’S valuation determines how much a buyer can borrow to pay for it.

Banks can grant a loan of up to 90 per cent of a home’s purchase price, or valuation, whichever is lower.

This means that if the price of a property exceeds its valuation, the buyer has to come up with cash to cover the shortfall.

A buyer can get an indicative valuation for a property before committing to the purchase. This does not involve a detailed inspection.

The bank’s offer is subject to the formal valuation confirming the indicative valuation. This figure is usually derived from the bank’s own panel of private valuers.

When valuing a property, these professionals consider the current value of comparable projects in the area. Other factors taken into account include the property’s location, size, layout, age and condition, as well as its orientation.

Valuers usually take about two to three weeks to complete the assessment.

Mr Eugene Tham, a director of property consultancy Chesterton International, estimates it would cost about $400 to $500 to value a home worth about $1 million.

For resale Housing Board flats, buyers need only to submit a request for a valuation report, which would cost about $200 for three-room or larger flats. The HDB will then randomly assign a private valuer to assess the property.

About two years ago, it was common for buyers and sellers to inflate the price of the flat so the buyer could get a bigger housing loan than he would otherwise be allowed. Such illegal “cashback” arrangements were supported by inflated valuations from the colluding valuers.

The Government, however, clamped down on this practice in 2005, by requiring flat purchases involving withdrawal of Central Provident Fund savings to be supported by valuations carried out through the HDB system.

Such cashback arrangements largely fizzled out after the curbs. Those caught can be fined $5,000 and jailed for six months for giving false information to the HDB.

Source : Sunday Times - 18 Nov 2007

Goldman Sachs is said to be discreetly looking around for a buyer for DBS Building along Shenton Way.

2007-12-12T16:48:00.002-08:00

US bank could be tweaking portfolio, sources say; DBS may move to new location.

Goldman Sachs is said to be discreetly looking around for a buyer for DBS Building along Shenton Way. The US bank, which bought the two office towers two years ago, could reap a tidy gain of almost $1 billion should a deal go through.

Market watchers say that it makes sense for Goldman Sachs to reshuffle its office portfolio to more prime locations in Singapore.

Goldman is believed to be seeking a price of at least $2,000 per square foot of net lettable area (NLA), which would work out to about $1.75 billion, compared with the $789 psf or $690 million that it paid for the property in late 2005.

Meanwhile, DBS which sold the property to Goldman and leased back the space it occupied, is expected to relocate to Marina Bay Financial Centre (Phase 2), as reported by BT.

DBS occupied the entire 49-storey Tower 1 - which is more than 30 years old - when it sold the property to Goldman in 2005. It also occupied almost 40 per cent of the 34-storey Tower 2, which is just 13 years old. It leased the premises for eight years, with an option for renewal.

The Singapore bank is now said to be eyeing a move to its prestigious new location, expected to be completed in late 2011. This suggests a period of overlap with its existing lease on DBS Building, that runs till late 2013.

Goldman, on the other hand, has been snapping up new office assets of late.

In August this year, it inked a deal to buy Chevron House at Raffles Place from CapitaLand and other parties for $730 million or $2,780 psf of NLA.

The building stands on a site with a remaining lease of about 81 years. Goldman Sachs is also expected to purchase the 37-storey Hitachi Tower next door, in which CapitaLand also has a stake. The price is understood to be around $3,000 psf, or about $840 million in total. Hitachi House has a 999-year leasehold tenure and faces Collyer Quay.

‘It’s good business sense for Goldman to move its Singapore office holdings from the old Shenton Way area to Raffles Place/Collyer Quay, where rental and capital values are likely to appreciate faster.

‘The new financial district at Marina Bay will be connected to the Raffles Place/Collyer Quay vicinity, which will also be rejuvenated with the Ocean Financial Centre development,’ a seasoned industry market watcher said.

Some office market watchers estimate that in the current market, Goldman Sachs may fetch around $1,750 psf to $1,800 psf of NLA for DBS Building - instead of the $2,000 psf minimum price it is seeking - given the property’s age and short balance land tenure.

‘A lot will also depend on what sort of rentals the building can fetch after DBS moves out,’ a property consultant said.

And while the Singapore office market has sizzled this year because of an acute shortage of offices, investors have become a little cautious lately on fears that the US sub-prime contagion could clip the space requirements of big financial institutions here.

‘Perhaps Goldman Sachs stands a higher chance of achieving its target price range it if waits a little longer and hopefully by then, the current sub-prime woes may ease,’ an observer suggests.

Investment in Singapore’s office sector, including land for development into offices, has seen a staggering $14.9 billion worth of deals sealed so far this year. This is about three times the figure for the whole of last year.

The supply crunch has also seen prime office capital values rise from about $2,000 psf at the start of this year to nearly $3,000 psf, as seen in the price that Goldman Sachs is believed to have negotiated for Hitachi Tower.

Source : Business Times - 12 Dec 2007

HONG KONG movie superstar Jackie Chan’s love affair with Singapore property continues with his latest purchase - the former Jinriksha Station

2007-12-12T16:48:00.001-08:00

HONG KONG movie superstar Jackie Chan’s love affair with Singapore property continues with his latest purchase - the former Jinriksha Station at 1 Neil Road.

He fell in love with the historic building - once the central depot for rickshaw drivers in Singapore - and bought it for $11 million.

The three-storey corner building in Tanjong Pagar now houses a music lounge called EZ50 on the ground floor. Its sale price works out to $818 per sq ft (psf).

‘It’s a good price because the individual shophouses there are about $1,000 over psf on average,’ said Mr Simon Kwan, who helped broker the deal about a fortnight back. ‘As long as he purchases it at or below the market price, he will be comfortable,’ he said, of Chan.

Mr Kwan, who is the star’s property agent, also runs EZ50 and The 50s pubs, as well as the recently opened Jackie Chan’s Cafe Coffee and Tea at 1 Nassim Road.

The star purchased 1 Neil Road from a firm owned by Mr S. L. Cheong, which also owns the 1 Nassim Road property leased to Chan.

Mr Cheong, the uncle of SC Global chief Simon Cheong, also sold Chan The 50s entertainment complex on Tanjong Pagar Road for $8.8 million in 1996.

Both the Tanjong Pagar buildings are in the Neil Road conservation area.

‘You can’t find buildings like this anywhere else,’ said Mr Kwan. ‘These are the two most outstanding buildings in Tanjong Pagar.’

The former Jinriksha station was built in 1903.

It is a commercial building with space for rent. The One Family KTV karaoke lounge used to occupy the second and third floors, but it had since closed down, according to Mr Kwan, who is managing the building on behalf of Chan.

Mr Kwan has plans for a piano bar, a foot reflexology business or offices for the 8,500 sq ft of space on the second and third floors.

‘The highest possibility is to have offices,’ he said, explaining that this plan would leave him time to concentrate on running Chan’s new restaurant business in Singapore.

Also, office rents are currently strong, supported by tight supply.

Rents at the nearby Red Dot Traffic Building are at $6 psf a month, while those at International Plaza next to the Tanjong Pagar MRT station are going for $7.50 to $8 psf.

Mr Kwan said they could have seven to eight office units.

A decision will be made after a trip to Hong Kong to meet up with Chan and firm up plans, he said.

Apart from commercial buildings, the movie star also owns a few condominium units in the Orchard Road area, including a three-bedroom unit in The Grangeford condo on Leonie Hill Road.

The 99-year leasehold Grangeford is by now known for the property that sold en bloc for more than half of Horizon Towers’ price on a psf basis.

Chan bought his Grangeford apartment, which is being rented out, for only $1.3 million back in 1996.

He will stand to reap about $3.4 million from the collective sale, which he was originally not keen on joining.

Another Hong Kong superstar, Andy Lau, also used to own an apartment at Grangeford, as well as a unit at the UE Square condo.

Mr Kwan said he had since sold these off for Andy Lau. He also used to manage the Singapore properties of the late Teresa Teng and Anita Mui.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said there would be more celebrities entering Singapore’s property market.

‘For one, the Formula One event will bring in a lot of celebrities.’

Source : Straits Times - 12 Dec 2007

DUBAI World’s real estate arm, Limitless LLC, officially started operations at it new regional office here at UOB Plaza

2007-12-12T16:46:00.000-08:00

DUBAI World’s real estate arm, Limitless LLC, officially started operations at it new regional office here at UOB Plaza yesterday. It will use Singapore as a base to look for new investment opportunities here and in the region.

On route to Hanoi for the ground-breaking ceremony of its US$220 million Halong Star mixed development project in Vietnam, Limitless CEO Saeed Ahmed Saeed said yesterday: ‘Without doubt, South-east Asia is one of the most exciting and dynamic regions for Limitless. Its fast-growing economy presents us with endless opportunities to demonstrate our core skills of master planning large-scale, balanced projects and waterfront development.’

To date, Limitless, which was established in July 2005, has a portfolio of five real estate projects worth about US$100 billion. Three are in the Middle East, with the others in India and Vietnam.

Limitless has considered development sites in Singapore, including the first parcel at Marina View, although it decided not to put in a bid eventually.

‘We took strategic position on Marina View and decided it was not the right time to tender for it,’ said Philip Atkinson, regional director (South-east Asia) at Limitless.

Mr Atkinson added: ‘The Singapore market now is buoyant and fast paced, and we would take a cautionary view.’

Dubai World, through its subsidiary Istithmar, has however, recently acquired a one-third stake in the government land sales development site now known as South Beach, which is estimated to cost a total of $2.5 billion.

Mr Saeed would not say what its expected target rate of returns would be for its projects but added: ‘Different countries have different hurdle rates.’

Like its parent company, Limitless will mostly fund its investment with equity but Mr Saeed said that it could also raise debt from the capital markets.

Limitless is also likely to be looking at emerging markets around the world as this is where large-scale projects that can leverage on its town-planning skills will be.

Particularly bullish on the two huge markets, Mr Saeed said: ‘India and China will probably need new homes for the next 100 years.’

Source : Business Times - 11 Dec 2007

The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad.

2007-12-12T16:45:00.001-08:00

The Ascott Group said yesterday that it has signed a joint venture agreement with the Rattha Group to acquire its fifth serviced residence in India.

The 218-unit property, to be named Citadines Hyderabad Hitec City, is Ascott’s first serviced residence in Hyderabad. the group will pay about S$15 million for a 49 per cent stake in the property. Indian partner Rattha will hold the remaining majority stake.

Ascott said that the deal is part of a master development agreement it signed with Rattha in August 2006. The aim of the agreement is to acquire and develop seven serviced residences with a total of at least 1,000 units in India by 2010.

Ascott president and chief executive Jennie Chua said: ‘The addition of Citadines Hyderabad Hitec City puts the group ahead of the target set out under the agreement with Rattha. Ascott now has five properties with more than 1,100 units under development in Bangalore, Chennai and Hyderabad.‘

The group will continue to seek business opportunities in other cities including New Delhi and Mumbai, she said.

The proposed Citadines Hyderabad Hitec City is in the heart of Hitec City, a major high-tech township where the Hyderabad International Convention Centre is located.

When completed, the serviced residence will cater to the business traveller market, particularly people from the IT and biotechnology industries. The opening is scheduled for the first half of 2010.

With this latest addition, Ascott now has 1,178 serviced residence units in five properties under development in India. The other four properties are in Bangalore and Chennai, and are slated to open between 2008 and 2009.

Source : Business Times - 11 Dec 2007

78 Shenton Way for $650 million

2007-12-12T16:42:00.000-08:00

FOREIGN institutional investors continue to be drawn to the Singapore office market.

The latest investor to come in is Germany’s Commerz Grundbesitz Investmentgesellschaft (CGI) group, which has bought 78 Shenton Way for $650 million, BT understands. The price works out to $1,857 per square foot based on a total net lettable area of about 350,000 sq ft. This comprises about 275,000 sq ft in the existing 34-storey office tower and a further 75,000 sq ft that is being built in an extension that will be spread across six levels of offices above the carpark podium.

The extension is expected to be completed in the second half of 2009.

78 Shenton Way is on a site with a remaining lease of about 75 years. The property was sold by a joint-venture between Credit Suisse and CLSA funds which bought the 34-storey tower this January for $348.5 million.

Sources say that the vendors are expected to pump in about $80 million to build the extension and spruce up the existing property.

Jones Lang LaSalle is said to have advised 78 Shenton Way’s sellers, while buyer CGI - which is making its maiden entry into the Singapore real estate market - is understood to have been advised by CB Richard Ellis. CGI is the capital investment company for the open-ended fund Haus-Invest.

The $1,857 psf of net lettable area achieved for the deal is in line with current office values in the area, industry observers say. In April this year, TSO Investment, a unit of a CLSA Capital Partners-managed property fund, sold SIA Building at Robinson Road to European pension fund manager SEB for about $1,780 psf of net lettable area.

In September, SEB also bought 12 floors at Springleaf Tower in the Anson Road area at $2,088 psf of net lettable area.

In October, Allco Commercial Real Estate Investment Trust picked up KeyPoint in the Jalan Sultan/Beach Road area for $370 million or $1,186 psf of net lettable area. The deal includes income support of up to $10.5 million for two years to be provided by the seller.

In August, a Goldman Sachs-linked fund bought Chevron House (formerly Caltex House) along Raffles Place for $2,780 psf, a record for an office block here. Chevron House stands on a site with a remaining lease of about 81 years.

The Goldman Sachs group is also expected to stitch a deal early next year to buy the nextdoor Hitachi Tower, which faces Collyer Quay, for about $3,000 psf, industry observers say. A higher price can be justified for Hitachi Tower due partly to its superior tenure (999-year leasehold) and orientation. As well, Hitachi Tower is not weighed down by rental caps for a major tenant, as in the case of Chevron’s lease at Chevron House, which limits the near-term rental upside of the property, according to an earlier media report.

Source : Business Times - 11 Dec 2007

Investment sales of property have hit an all-time record of $50.8 billion so far this year - up 66 per cent from the whole of last year.

2007-12-12T16:41:00.000-08:00

Goldman Sachs, Europe’s SEB and Dubai World also make big purchases.

Investment sales of property have hit an all-time record of $50.8 billion so far this year - up 66 per cent from the whole of last year.

And for the first time, a foreign player has emerged as the biggest buyer - Macquarie Global Property Advisors (MGPA) with $4.3 billion of purchases.

In fact, foreign institutional investors/property funds have been a dominant buying force this year, especially in the office sector, notes CB Richard Ellis executive director Jeremy Lake.

Besides MGPA, other big foreign investors in Singapore’s property market in 2007 include US heavyweight Goldman Sachs (with an investment of over $800 million), European pension fund manager SEB, which bought SIA Building and 12 floors at Springleaf Tower for a total $751 million, and Dubai World Group, with a total investment of over $500 million.

US-based Wachovia Development Corporation also entered the Singapore property market this year, with more than $700 million invested so far in the Farrer Court and Char Yong Gardens collective sale sites, and apartments at a new condo, Cliveden at Grange.

‘The Singapore property market has become much more appealing to global buyers over the last two to three years. In a reversal of the perfect storm, a series of factors have combined to create a sweet spot for Singapore: including the Integrated Resorts and F1 attractions, Singapore emerging as a wealth management hub and financial centre, the whole remaking of Singapore story, and an oversold property market, which made Singapore relatively attractive to global players,’ Mr Lake explains.

CBRE’s investment sales figures include land deals, collective sales, and transactions of entire office blocks and other buildings, as well as strata-titled units of at least $5 million.

The strong level of investment sales reflects major property players’ continued confidence in the mid to long-term prospects for the Singapore real estate sector.

With $50.8 billion done so far this year and another three more weeks to go, CBRE reckons the full-year figure may be about $52 billion.

The firm attributes the big jump over last year’s $30.6 billion to ‘the meteoric performance of the collective sales market in the first-half and the very strong office market’.

The residential and office sectors combined to account for about 90 per cent of the total value of investment sales so far this year.

Office investment sales more than doubled, from $4.4 billion in first-half 2007 to around $10.5 billion in the second half.

However, residential deals halved from $20.3 billion in H1 to $10.3 billion in H2, on the back of a drastic slowdown in collective sales.

With the current en bloc sales slowdown expected to continue, next year’s overall investment sales of property is likely to be lower, probably reverting to the 2006 level of around $30 billion, Mr Lake reckons.

‘However, the office market is likely to remain strong. We’ve not seen the pool of buyers diminish in the past few months,’ he added.

Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt too reckons 2008 will be a more stable year for investment sales.

He also projects that the public sector, comprising primarily Government Land Sales, will account for a bigger slice of total investment sales in 2008, at about 40 per cent - up from a share of about 22 per cent so far this year.

‘For the private sector, the strong en bloc sale performance seen in the first seven months of this year is unlikely to be repeated, but we still expect to see healthy land prices being maintained,’ Mr Lui suggests.

CBRE’s data shows that the biggest property deal in the public sector so far this year has been the $2.02 billion sale of Marina View Parcel A to MGPA, followed by the $1.69 billion sale of the former NCO Club and Beach Road camp grounds to a consortium comprising City Developments, Dubai World and Elad Group.

In the private sector, the top deal has been Farrer Court, which was sold for $1.34 billion to a consortium including CapitaLand, Hotel Properties, Wachovia and a foreign fund. The next biggest transaction was MGPA’s $1.04 billion purchase of Temasek Tower.

Mr Lake also observed that the $50.8 billion overall investment sales figure this year was close to the $54.9 billion in the eight years from 1996 to 2003.

Source : Business Times - 11 Dec 2007

109 deals done at $13.3 billion

2007-12-12T16:40:00.000-08:00

Sales in H2 account for only $2.8b as price gap between owners, developers surfaces

It was the best of times, it was the worst of times.

With 82 en bloc deals worth $10.49 billion transacted in the first-half, and just 27 sites worth $2.81 billion transacted in the second-half so far, ‘2007 has been a ‘tale of two halves’ for the collective sales market,’ says CB Richard Ellis executive director Jeremy Lake.

Nonetheless, the year- to-date tally for 2007 - 109 deals done at $13.3 billion - is a whopping jump from the 79 deals amounting to $8.2 billion transacted for the whole of last year.

‘A price gap (between what owners were asking and what developers were prepared to pay) that was not there between January to June this year began to surface in July, so owners’ price expectations had overshot, and this was compounded by the sub-prime crisis. By September/Octo-ber, developers took a back seat when it came to bidding for land,’ Mr Lake said.

As for next year, CBRE’s view is that the total value of en bloc sales for 2008 may not be as high as this year’s all-time record.

A major highlight on the collective sale calendar this year was the introduction of new legislation in October which put in place more processes and safeguards to ensure the entire en bloc process is more transparent for all owners.

This led to a rush to sign collective sale agreements before the onset of the legislation - everything otherwise would be unwound and the process have to be restarted under the new law. As a result there was a flurry of en bloc sale tenders launched between September and November.

However, in the longer term, the new rules and procedures - which include how sales committees are formed and how they conduct their business - mean it could take a longer time to launch collective sale sites for sale.

As for next year, CBRE reckons ‘developers will still remain interested in acquiring development sites, although they are likely to be much more selective and focus on acquiring reasonably-priced sites in good locations’.

Industry observers also predict the pace at which developers acquire more collective sale sites will be a function of how well their residential projects sell.

The top buyers of collective sale sites so far this year have been companies linked to banker Wee Cho Yaw (UOL Group, Kheng Leong, United Industrial Corp and Singapore Land), which collectively bought six collective sale sites for a total of $1.6 billion.

This was followed by Malaysian tycoon Quek Leng Chan’s GuocoLand, which bought three sites (Leedon Heights, Palm Beach Garden in the East Coast area and Toho Garden at Yio Chu Kang Road) for a combined $972.5 million.

Property giant CapitaLand was in third position, with stakes in three sites (Char Yong Gardens, Gillman Heights and Farrer Court) purchased for a combined $953 million.

Up-and-coming property player, Bravo Building Construction, snapped up $824.5 million worth of en bloc sales deals.

The Kwek family’s listed City Developments and privately-held Hong Leong Holdings have picked up a total of $672 million of collective sale sites.

Other sizeable buyers this year include Hotel Properties (about $640 million) and Lippo Group and its listed unit Overseas Union Enterprise ($681 million).

Property magnate Ng Teng Fong’s Far East Organization has invested in about $400 million of collective sale sites so far this year, after buying close to $1 billion worth of such properties last year.

CBRE’s analysis also shows that a total of 142 collective sale launches have been advertised so far this year, of which about half or 69 sites have been sold. The other 40 deals struck this year involved either sites launched prior to 2007 or sites whose launches were not advertised.

Source : Business Times - 10 Dec 2007

Ion Orchard intends to launch an advertising campaign to promote the mall

2007-12-12T16:39:00.000-08:00

Ion Orchard intends to launch an advertising campaign to promote the mall in the first quarter of next year - almost a whole year before the Orchard Road mall opens its doors to shoppers in end-2008.

For starters, the mall will run a print ad campaign in selected international publications such as the Wall Street Journal Asia and the Financial Times.

Designed to convey a mood of luxury and sophistication, the campaign will feature international models dressed in specially produced couture outfits and accessories whose design inspiration comes from the mall itself - or rather, the mall’s facade which aims to light up the building once it is up. Closer to the day of the mall’s opening, ads will also run in the local newspapers.

The mall is owned by a joint venture (JV) between Singapore-listed CapitaLand and Hong Kong’s Sun Hung Kai Properties.

‘Our new marketing campaign reflects our vision to be a world-class retail destination that will bring a truly unique retail experience to shoppers,’ said Soon Su Lin, chief executive of the JV company. ‘Even though Ion Orchard is still under construction, we are happy to be adding to the vibrancy of Orchard Road, and look forward to delighting shoppers in the near future.’

The mall also unveiled four-metre high hoardings last week at the site.

The campaign account was won by marketing communications agency DDB after its contest against six agencies.

‘I think Ion Orchard will light up Orchard Road in a bold and fashionable way,’ said David Tang, chief executive of DDB Group Singapore. ‘The campaign will have to be just as bold and fashionable.’

Ion Orchard is part of a retail-cum-residential development located at the heart of Orchard Road. When opened in end-2008, the mall will offer some 400 retail, F&B and entertainment stores. Marketing for the retail space has already begun, BT understands.

Source : Business Times - 10 Dec 2007

From CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.

2007-12-12T16:38:00.000-08:00

REAL estate investment trusts (Reits) are becoming increasingly ubiquitous in Singapore, thanks to their popularity. But more could be done to improve their environmental impact, given their growing significance in the property scene.

Dr Joseph Chun of law firm Shook Lin & Bok has noted - in a recent study he undertook while he was then employed by the NUS’s Department of Real Estate - that the legal framework in which Reits operate has the likely effect of undermining the Singapore government’s efforts to encourage green property development and management.

And he has suggested that there may be a need to consider measures to counteract these presumably unintended adverse environmental effects.

‘Real estate is one of the most significant asset classes in Singapore … However, the land is more than an investment asset to be managed for maximum income; it is also our abode in which we live, work, and play. Investment decisions that enhance or degrade this abode have serious impacts on our lives that go beyond financial returns,’ Dr Chun said, in his article Are Reits Built to be Green?.

He suggests that more needs to be done to encourage environmentally friendly practices within the property sector in general, and the Reits sector in particular.

The popularity of Reits as an investment tool in Singapore has encouraged the growth and creation of such trusts. The number has grown from just one - CapitaMall Trust, listed in July 2002 - to 20 Reits now listed on the Singapore Exchange.

There have been estimates that Reits could eventually constitute up to 70 per cent of the listed real estate in Singapore - in line with international trends.

‘As Reits increase their dominance of the urban environment, the need to avoid or at least mitigate those aspects of Reit law that encourage unsustainable behaviour will correspondingly become more urgent,’ Dr Chun proposed in his article.

He believes the nature of Reits as an investment tool and the legal framework governing them significantly restrict the scope of any green agenda.

He observed that Reits are designed to appeal to investors looking for short-term, steady cash returns - with little to motivate the Reit manager to invest in measures that benefit the public or the occupants of the Reit’s properties, ie. green measures, if these do not increase the Reit’s income.

‘As long as tenants who pay the utility charges are not willing to pay a premium for energy efficiency or healthier indoor environment, investing in green refurbishments that do not provide significant quantifiable financial returns is simply not an attractive use of limited funds,’ he noted.

The short-term orientation is further encouraged via the reporting requirements placed on Reits - with managers having to report the trust’s financial performance every quarter, value each property of the trust at least once a year and report the annual value in the annual report. These act as a barrier towards a life cycle approach to investing in environmental performance.

There are also funding constraints to pursuing a green agenda, with Reits having to distribute most of their taxable income to unit holders in order to maintain their tax transparent status.

‘The legal limit on the amount of its funds a Reit can invest in property development coupled with the relatively risky nature of property development also doesn’t help the green cause as it means that a Reit is more likely to seek out existing buildings to acquire rather than opportunities to develop new properties,’ Dr Chun said.

Typically, it is easier and less costly for developers to incorporate environmentally friendly features into new buildings than it is to improve the energy efficiency of existing buildings.

A cue could be taken from the US, where several states offer tax credits for buildings that meet certain green standards.

Dr Chun believes the law can be amended to encourage the development of more environmentally friendly buildings. He suggests relaxing the legal requirements on the minimum distribution of dividends and limits on borrowings in respect of retained earnings or borrowings invested in refurbishment, retrofitting and renovation activities that lead to a property achieving a green rating.

He also believes that measures could be put in place to mandate annual assessments of the environmental performance of the properties owned by Reits, alongside the current annual valuations needed of the properties owned by Reits. ‘(This will) help ethical investors make informed decisions about the green value of a Reit, thereby giving the Reit looking to attract the ethical investors’ dollar a motivation to upgrade its environmental performance,’ he said.

Dr Chun concludes, in his piece: ‘Sustainable development requires us to integrate the environmental considerations into all our development decisions, including our investment decisions, so it is unsatisfactory when the law encourages investment in real estate that has the potential to cause environmental harm without simultaneously providing for compensating measures to avoid or mitigate the harm.’

Source : Business Times - 10 Dec 2007

2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.

2007-12-12T16:36:00.000-08:00

Now, you too can live like the colonial sahibs of old, as long as you are prepared to make the highest offer for monthly rental in an open bid.

But be warned, rents of homes under the Singapore Land Authority’s (SLA) first bidding exercise held recently, increased by between 40 to 230 per cent over previous rents.

Before the open bidding system, the allocation of homes was done through a balloting exercise or on a first-come-first-serve basis.

But in October and November, SLA piloted the new open bidding system of allocating homes to make the process fairer and more transparent with five homes awarded so far. One of these, a bungalow on a 2,687 sq m site at King Albert Park, also set a new benchmark rent of $23,222 a month for a state-owned residential property.

On the new system, SLA deputy director of land lease private Teo Cher Hian said: ‘This way, market forces decide the rental that can be fetched for the state properties.’

The new system appears to be popular with 84 bids received for the first five properties. Of these bidders, 64.3 per cent were locals, with companies and foreigners making up 22.6 per cent and 13.1 per cent of the bids respectively.

Mr Teo also said that many of the bids were higher than the guide rents set by SLA.

Although the widely held perception is that these state-owned properties are cheap to rent, SLA says that guide rents are determined by an independent valuer based on the size, condition, location and proposed tenure of each property.

The properties are also let in their existing condition, usually unfurnished with rents starting as low as $400 per month for a small flat. Enhancement of these properties is also not a primary objective as some of these units sit on sites that could eventually be redeveloped.

SLA has a total stock of 2,360 homes comprising landed and non-landed properties, representing about 19 per cent of the total estimated gross floor area of state properties it manages.

SLA’s rental homes have an occupancy rate of about 91 per cent. But existing tenants are usually allowed to directly renew their leases although the rents may be increased.

In its last financial year (April 1, 2006 - March 31, 2007) SLA says that its residential rental revenue was $78 million, up 2.6 per cent or $2 million from the previous year. SLA added that rents increased by an average of 5 per cent in this period with the highest increase of 23 per cent recorded for just one property.

Previously, rents for apartments ranged between $400-$3,800. Terrace, semi-detached and bungalow rents ranged between $600-$3,333, $800- $11,500, and $1,100- $23,222 respectively.

But the impact of the new bidding system to SLA’s rental revenue is, however, not likely to show any immediate significant increase, as so few of these properties actually come up for rent. For the first half 2008, SLA expects only about 36 homes to be made available for rent - upon being vacated - with six homes expected in January followed by seven in February and six in March.

Those interested in bidding for these can submit their bids to SLA at a stipulated time and date. The bidding period will be six days. More details will be available on SLA’s website www.spio.sla.gov.sg from Dec 14.

But do take note that for a bid to qualify, the bidder’s average monthly income has to generally be at least three times the monthly rental bid so only those earning over $60,000 a month need bother looking at those grand old black and white bungalows.

Source : Business Times - 10 Dec 2007

The Strata Titles Board (STB) has given the go-ahead for the sale of Farrer Court to a CapitaLand-led consortium.

2007-12-12T16:35:00.000-08:00

The Strata Titles Board (STB) has given the go-ahead for the sale of Farrer Court to a CapitaLand-led consortium.

At a price tag of $1.34 billion, it is the largest amount ever fetched for a collective sale. The approval was granted last Saturday.

The consortium - comprising CapitaLand, Hotel Properties and US-based Wachovia Development Corporation - said in June that they would pay a record-setting $1.34 billion for the 618-unit development.

This beat the reserve price of $1.2 billion but is still lower than the owners’ asking price of $1.5 billion.

Farrer Court owners had upped their reserve price from $700 million to $840 million at the start of the year, and then increased it to $1.2 billion in March.

The unit land cost to the developers for the leasehold District 10 site works out to $762 to $783 psf of potential gross floor area.

BT understands that owners of two units objected to the sale, on grounds that the price was not high enough.

The privatised HUDC estate has 618 existing apartments of two sizes - 1,615 sq ft and 1,453 sq ft - and their owners will get $2.238 million and $2.122 million per unit, respectively. Based on the apartments’ existing strata areas, the proceeds to owners work out to $1,386 psf and $1,460 psf, respectively.

Credo Real Estate brokered the sale, and law firm Rodyk & Davidson represented the majority owners.

CapitaLand wants to turn the site into a new 36-storey condominium with about 1,500 apartments, likely to be ready for launch in the first half of 2009.

Source : Business Times - 10 Dec 2007

SLA has 2,360 units available for rent and the occupancy rate is 91 per cent.

2007-12-12T16:33:00.000-08:00

RENTERS who have long hankered after that state-owned black-and-white colonial bungalow but are put off by the long waiting list can now bid for their dream home.

State landlord Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.

Currently, tenants check SLA’s portal www.spio.sla.gov.sg for information on available properties and then register their interest with SLA-appointed agents.

There is usually a long waiting list for these properties as demand is high. State properties can be 5 to 50 per cent cheaper than properties in the private market.

Renters have said that getting one is like winning the lottery - a tenant is selected either on a first-come, first-served basis or through a balloting exercise when a property is released.

Under the new scheme, anyone interested in these properties will be invited to view them during open houses. They then have up to one week to submit a private bid to the SLA. Bidding will close the following Friday and results will be announced the same day.

The new system will allow these buildings to be secured within a week or so of their being made available.

All in, SLA has 2,360 units available for rent and the occupancy rate is 91 per cent. However, not all of them will come under the bidding scheme.

An SLA spokesman said the new method ‘encourages a fairer allocation process’. The bidding system also allows market forces to decide the value of the properties, ensuring a ‘more accurate market value’.

At least 36 houses in popular locations - ranging from terraced and semi-detached houses to bungalows - will be open for bidding in the first half of next year.

Mr Kevin Barrios, 29, a postgraduate student from the United States due to start work in Singapore, expressed concern that the new procedure will drive up rents. He pays $700 for a one-bedroom apartment in the Portsdown Road area.

But Mr Eric Cheng, executive director of property agency HSR Property Group, said the bidding system is fairer.

He said many of his clients faced months, or even years, of waiting for such properties to become available.

‘If someone really needs a house and is willing to pay for it, it’s fair that he should get it,’ said Mr Cheng.

SLA held a pilot bidding exercise for five of its properties last month and Belgian pilot Bernard Latierre was one of the successful bidders.

The price he paid - $6,550 a month for a semi-detached house in Seletar with a land area of 738 sq m - is reasonable, he said.

He had waited more than eight months for it. ‘It’s near my children’s school, has lush greenery and lovely architecture. We wouldn’t have got to live here if not for this new bidding system,’ he said.

SLA said properties that have a two-year tenure and are in popular locations will be selected for bidding. Wherever possible, SLA will also allow existing tenants to renew their tenancies directly, provided the rental is adjusted to the market rate.

List of estates and price range The SLA manages more than 2,300 residential state properties and has a 91 per cent occupancy rate.

Range of properties:

Flat/Apartment - 1,090 units; rental from $400-$3,800

Terrace - 340 units; rental from $600-$3,333

Semi-detached - 390 units; rental from $800-$11,500

Bungalow - 540 units; rental from $1,100-$23,222

Some of their locations:

Alexandra Park

Seletar Airbase

Telok Blangah

Scotts Road

Malcolm Park

Medway Park

Goodwood Hill

Bukit Timah

Woodleigh Park

Most of the black-and-white bungalows are in Sembawang, Alexandra Park and Adams Park.

The next list of properties available for rental will be on the SLA portal, www.spio.sla.gov.sg, from Dec 14.

They include a bungalow in Hyderabad Road, three two-room apartments in Clemenceau Avenue North and a two-storey bungalow in Maidstone Road.

Source : Sunday Times - 9 Dec 2007

FORGET the Central Business District.

2007-12-09T13:29:00.000-08:00

FORGET the Central Business District. Property investors priced out of prime zones but still hunting for a good buy should look to downtown’s upcoming hot spot - the Beach Road, Ophir-Rochor district.

This hotchpotch of an area - with old shophouses dotting its landscape, juxtaposed with towering modern office blocks - is set for a snazzy makeover, as announced by the Government this week.

Already, property experts have identified strong potential upside for properties in the district.

Minister of State for National Development Grace Fu said it would be ‘an extension of Bugis’, complementing the Marina Bay financial district.

Although most major buildings, including The Gateway, Shaw Towers and the Bugis Junction office tower, are owned by single developers, there is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.

The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units.

One shop owner, Mr Thomas Tan, who purchased a 1,300 sq ft unit on the ground floor of The 101 for $1.4 million - or $1,077 per sq ft (psf) - in April, told The Sunday Times he was glad he had taken the bold move to buy earlier this year.

The same unit now costs more than $2 million - or $1,539 psf - on the market, said the 61-year-old retiree.

Over at The Plaza, residential units are currently priced at around $933 to $1,222 psf.

While Singapore’s property bull run seems to be taking a breather, prices in the Beach Road, Ophir-Rochor area are likely to stay strong and move upwards in the long run with new developments, said Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong.

Beach Road already has its own crown jewel in South Beach - an eco-friendly, $2.5 billion mixed project developed by a City Developments consortium. By 2012, South Beach will boast two towers of up to 45 storeys, two luxury hotels, service apartments and conserved military buildings of the old Beach Road camp.

On Thursday, the Government said it would release one more 2.74ha plot - between Rochor and Ophir Roads, surrounding Parkview Square - as a multi-use ‘white site’ next year, yielding 495 hotel rooms and 139,740 sq m of commercial space.

CBRE Research executive director Li Hiaw Ho said the new projects would complement each other and add much vibrancy to the area.

‘A mini-Raffles City on the white site is likely to do very well,’ added Mr Ku.

Shophouses are now particularly attractive, especially those facing the new plot, he said.

Currently, trendy eateries and drinking spots occupy shop houses along Haji Lane and Tan Quee Lan Street.

The area, with its proximity to Bugis Junction, has, in recent years, developed into a fashionable hang-out famed for good food and cheap beer.

Shophouses in the area have been going for $800 to $1,000 psf, and other surrounding commercial units have been sold for about $1,600 psf, said Mr Ku.

Considering that just across the street, Suntec is commanding up to $2,500 psf, there is much potential for capital values of properties in the area to appreciate.

Still, before that can happen, certain parts of the district have to be ’spruced up’ and polished, added Mr Ku.

Some small commercial buildings, shophouses and independent hotels there are old and shoddy and will need facelifts to match the area’s new trendy image.

Although the area does not command Grade A rents or tenants, it still gets a good mix of quality tenants with occupancy rates at a high 95 per cent, Savills director of commercial services June Chua said.

Office rents are now in the range of $9 to $11 psf a month, up from $4 to $5 psf more than a year ago. This translates into good rental yields for owners.

Mr James Smith, managing director of a media company based at the Evershine & Century Complex, is one tenant who has had his rent doubled in the last six months, and he may consider investing.

While the latest news will likely translate into higher rents in the future, Mr Smith says the upside is that more quality offices will sprout in the area, and this will have a good ‘trickle-down effect’.

‘This district will remain attractive, especially to us, as it’s a creative hub with lots of knowledge-driven businesses and schools in the vicinity,’ he said. ‘It’s got a good vibe.’

Mr Tan recalled that the old Beach Road, in the 1950s to 1960s, was ‘the’ entertainment hub, with good food from the old Satay Club, and two cinema houses lining the road.

‘Perhaps in the next decade, the hustle and bustle of the old Beach Road will be revived and it will regain its old glory,’ he said.

Source : Sunday Times - 9 Dec 2007

Singapore Land Authority (SLA) said it is opening up its properties for bidding to make their allocation more transparent.

2007-12-09T13:28:00.000-08:00

Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf

2007-12-09T13:27:00.002-08:00

LIPPO Group is said to have priced its Marina Collection condo, a 99-year leasehold project on Sentosa Cove, at about $2,750-2,900 psf on average.

Over the past few days, the group, controlled by Indonesia’s Riady family, is said to have sold about half of the 60 or so units it has released so far in the 124-unit, four-storey development next to the One Degree 15 Marina Club. The development comprises three blocks.

Lippo is developing the condo jointly with the Marina Club, OCBC and Austria’s Raiffeisen Zentralbank (RZB).

Buyers will be given a free membership at One Degree 15 Marina Club for each unit of Marina Collection they purchase. The memberships are currently said to be going for above $40,000 each.

Lippo’s price appears to be slightly higher than the $2,600 psf net average achieved for the previous condo launch at Sentosa Cove - Ho Bee’s Turquoise.

The project was released in September and to date, Ho Bee is said to have sold 45 out of the 60 units it has released so far out of 91 units in the six-storey condo.

Marina Collection comprises three-, four-, and five-bedroom apartments as well as penthouses. Three-bedder units cost about $5.4 million while penthouses are priced at $10 million and above.

The 30 or so units Lippo has sold so far include five penthouses.

There are about 30 penthouses altogether.

The Lippo-led consortium is developing Marina Collection on a plot that it bagged at a tender that closed in September last year for $234.7 million or $818 psf per plot ratio (ppr).

Lippo’s pricing for its Marina Collection will no doubt be used by property developers to peg their bids at next week’s tender for the Pinnacle Collection - the last condo plot at Sentosa Cove.

The plot, which has a choice location at the entrance to the precinct’s marina basin, has a reserve price of $963.8 million or $1,600 psf ppr.

Source : Business Times - 8 Dec 2007

The STB’s much-awaited decision on Horizon Towers

2007-12-09T13:27:00.001-08:00

Almost a year of wrangling and millions of dollars in legal fees later, the controversial en bloc sale of Horizon Towers was eventually approved yesterday by the Strata Titles Board (STB).

Still, the board’s verdict by no means spells the end of the long-running saga - minority owners who oppose the sale could still appeal. That would put the sale on hold, and could mean another round of protracted legal disputes.

The STB’s much-awaited decision on Horizon Towers was delivered before a packed room in the board’s Maxwell Road headquarters. Tribunal chairman Philip Chan read out the prepared statement solemnly, before four teams of lawyers and some 70 owners, curious onlookers and the media.

Acknowledging that this collective sale ‘lasted longer than most other en bloc (sales)’ that have come before the STB, Mr Chan said that his tribunal eventually decided to grant the application for the collective sale of Horizon Towers, after considering the various merits of the case.

He said that the board had been ‘particularly guided’ by the recent decision reached in the Phoenix Court en bloc sale and the parliamentary debates on recent amendments to the legislation governing en bloc sales.

In the Phoenix Court case, Justice Andrew Ang threw out the sole minority owner’s objection to the collective sale of the freehold apartment block at St Thomas Walk. Justice Ang determined that it was important to look at the purposive nature of the law governing collective sales, which requires that 80 per cent of owners have to agree to the sale before it can go through. As the requisite majority was obtained in the Phoenix Court case, Justice Ang ruled that the transaction was not prejudicial to the minority - as the law had intended.

A similar stance was adopted by Senior Minister of State for Law, Associate Professor Ho Peng Kee, and Deputy Prime Minister and Law Minister S Jayakumar in the recent parliamentary debates on amendments to the Land Titles (Strata) Bill.

Prof Ho had said requiring 100 per cent consent among owners for an en bloc sale was untenable, as it would cause delays in any sale, acrimony and incur costs. He said that amendments to the law would provide adequate safeguards to protect minority interests and that the existing 80 per cent or 90 per cent majority required - depending on the age of the development - was satisfactory. DPM Jayakumar agreed that amendments to the Bill would provide more safeguards and transparency for all owners.

Tribunal chairman Mr Chan also said yesterday that the minority owners who opposed the sale had failed to prove their case that the transaction had been carried out in bad faith. The minorities had alleged, among other things, that the sales committee and its sales agent had not worked hard enough to get the best price possible for the development.

The tribunal will issue detailed grounds for its decision at a later date. It ruled yesterday that no order would be made for costs, meaning that the minority would not have to bear any portion of the costs of the proceedings.

The gallery’s reaction to the tribunal’s decision was muted - surprising for a case that has caused much emotional upheaval for its owners. Owners received the verdict quietly and shuffled out of the room.

The minority owners, who feel they will lose their homes with this sale, were accepting of the verdict. ‘The decision was not unexpected. We have done and will do what is principally correct,’ said Jasmine Tan, who declined to comment at this point on whether she would appeal against the STB’s decision.

And, expectedly, the majority owners - the over-80 per cent who agreed to the collective sale - were relieved with the STB’s decision. They face the threat of being sued for up to $1 billion by the buyers, Hotel Properties (HPL) and its partners, if the deal falls through.

Said a group of some 80 majority owners: ‘We are happy with the decision and very pleased that the en bloc is going through. We look forward to the buyers confirming that they will proceed with the deal and withdrawing the legal suits they have started against some owners.’

HPL and its partners, for their part, have expressed their happiness with STB’s decision - but have held back on any decision on the lawsuit, pending the actual completion of the sale.

‘We are pleased that the STB has allowed the collective sale and rejected the objectors’ case, including their allegations of bad faith,’ said HPL executive director Christopher Lim.

The buyers’ lawyer, Senior Counsel K Shanmugam of Allen & Gledhill, added: ‘Our client entered into the transaction in good faith and paid what was then a record price for the property. The application should therefore have proceeded smoothly, but the market changed. As a result, the case went through a number of critical junctures. We are, however, happy that the end result is that the tribunal has ruled that the sale should now go ahead.’

Source : Business Times - 8 Dec 2007

The 101 building faces the prospect of forking out about $6,000 to $35,000, depending on their properties

2007-12-09T13:25:00.002-08:00

PAST building management financial woes have come back to haunt the owners of homes, shops and offices at a Beach Road building.

Each owner at The 101 building faces the prospect of forking out about $6,000 to $35,000, depending on their properties, to cover an outstanding debt of $300,000.

The debt, accumulated in recent years, is a hotchpotch of unpaid cleaning and security bills, as well as legal costs run up in a failed bid to recover unpaid carparking fees, among other things.

One of the home owners, Madam Tan Lee Sung, 77, told The Straits Times: ‘The money was not used by me. Why should I pay?’

The current management council is looking to see if its predecessors are liable for the debt. Things, however, could escalate if the debts remain unpaid, and creditors seek court orders.

The six-storey, roughly 20-year-old mixed development has 20 apartments and seven shops and office units.

A seafood restaurant and a steamboat outlet occupy the ground floor, while most of the apartments above are leased out by their owners.

Like all strata-titled buildings, it is run by a management council whose members are picked from the owners.

According to The 101’s council chairman, Mr Thomas Tan, 60, who took office about a month ago, the $300,000 debt arose partly because the former councils sued some owners for alleged non-payment of carparking fees and unauthorised alteration and use of common areas, among other things.

The council lost the lawsuits and found itself saddled with legal fees.

In October 2005, the management had $168,500 in its kitty, but this was whittled down to $12,150 by April this year. Its creditors have taken out court orders to freeze its bank account.

A former council chairman, businessman Tan Fung Chuan, 50, offered a different explanation for the debts. He pointed the finger at low maintenance contributions that the owners voted to pay in 2005.

At a meeting then, an owner had tabled a resolution to cut the total management fee collected every month from $7,000 to $3,000. Mr Tan said that was barely enough to pay for the building’s operating costs.

He said: ‘A reasonable operating fee should be $8,000 to $12,000.’

He added that the lawsuits against individual owners were taken out on legitimate grounds, as the owners had violated Singapore’s building regulations.

‘We wanted to comply with the authorities’ guidelines.’

At a heated meeting at The 101 on Thursday, unit owners voted to give their current council the power to take various steps to scrutinise its books for possible financial irregularities.

They have also voted to let the council claim money back from former council members and anyone else, if any wrongdoing is proven.

The owners refused, however, to raise their monthly contributions.

The council intends to try again to get the owners to agree to higher fees at another meeting soon.

Meanwhile, Mr Thomas Tan said his team would just focus on setting things right if it turned out to be a simple case of bad judgment on the part of the previous councils.

‘If it is proven that this current state of finances is due to ignorance or a bad judgement call, personally, I may try to convince owners to let it go and move on.’

Source : Straits Times - 8 Dec 2007

ALLGREEN Properties of Singapore is set to move into China

2007-12-09T13:25:00.001-08:00

ALLGREEN Properties of Singapore is set to move into China in a big way with seven commercial and residential developments together with Hong Kong publicly listed companies Kerry Holdings and Kerry Properties. All the companies are controlled by Malaysian tycoon Robert Kuok.

The projects, which have a total investment amount of 29.3 billion yuan (S$5.73 billion), will be in the cities of Hangzhou, Chengdu, Qinhuangdao and Shenyang.

In a statement released yesterday, Allgreen said that this was in line with the group’s strategy to expand regionally, especially in China, which it views as a ‘long-term growth market’ providing ‘growth and recurrent income’.

Allgreen said: ‘In addition, the group will also be able to better allocate assets to ride out any downturn in the Singapore economy.’

The projects will mostly be residential but hotel, offices and commercial properties can also be expected. These projects also represents the group’s fourth investment in China.

Allgreen appointed Savills while Kerry Properties appointed DTZ Debenham Tie Leung to carry out valuations of the sites and the agreed property value was about 8.64 billion yuan.

Based on the agreed property value, the outstanding land cost and the non-property net asset value of the joint venture companies, the aggregate consideration payable by Allgreen for its acquisition of the equity interests in the joint venture is estimated to be about 967 million yuan.

Allgreen said that the group will fund the project by internal funds and/or external borrowings.

The statement also noted that the group’s aggregate maximum total investment amount in the joint venture is 6.98 billion yuan, representing about 96.2 per cent of its latest net tangible assets as at Dec 31, 2006.

No development time frame was given for the projects.

There is a mixed-use development planned, comprising hotel, offices, retail podiums and apartments on a 67,374 sq m site near West Lake in Hangzhou with a total investment amount of 5.34 billion yuan and Allgreen will hold a 10 per cent stake.

Also in Hangzhou will be a residential development on a 104,521 sq m site at Xiacheng District with a total investment amount of 1.83 billion yuan, of which Allgreen will hold a 35 per cent stake.

Another residential development is slated for Chengdu’s Hi-Tech Industrial Development Zone. To be built on a 46,130 sq m site, it will have a total investment amount of 1.38 billion yuan, of which Allgreen will have a 25 per cent stake.

Allgreen will also hold a 25 per cent stake in a second residential development on a 38,617 sq m site in Chengdu’s Hi-Tech Industrial Development Zone with a total investment amount of 1.16 billion yuan.

In Qinhuangdao, Allgreen will hold a 10 per cent stake in a mainly residential development on a 113,393 sq m site in the West Section of Hebei Street, Haigang District with an investment amount of 2.2 billion yuan.

Also in Qinhuangdao is another residential development on a 92,250 sq m site at the West Section of Hebei Street, Haigang District with an investment amount of 1.35 billion yuan, of which Allgreen will have a 10 per cent stake.

A mixed-use development has been planned for the 172,694 sq m site on the East Side of Qingnian Street, Shenhe District in Shenyang with a total investment amount of 16 billion yuan. Allgreen will take a 30 per cent stake in this project.

Source : Business Times - 7 Dec 2007

Property players are likely to zoom straight in on the handful of land parcels that are more centrally located

2007-12-09T13:23:00.002-08:00

DEVELOPERS, and eventually homebuyers, can take their pick from 21 plots that the Government will release for private housing between now and June.

Property players, however, are likely to zoom straight in on the handful of land parcels that are more centrally located, industry experts say.

At the top of the list is the multi-use ‘white site’ bounded by Ophir Road, Beach Road and Rochor Road. The property sits next to Parkview Square and is a stone’s throw from Raffles Hospital and the Bugis MRT Station.

The sale of this 2.74ha plot will ‘kick-start the development of the… Rochor Road/

Ophir Road corridor’, linking Marina Centre to the Bugis area, the Ministry of National Development (MND) said yesterday.

The site, which will be launched for sale in June, must have some area set aside for offices and hotels, but the rest of the space can be put to other uses such as residential.

Bids will likely come in at $750 to $850 per sq ft per plot ratio (psf ppr) for this site, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

Apart from this plum plot, there are a few other attractive residential sites, consultants say.

One is a new site at the corner of Woodleigh Close and Upper Serangoon Road, next to the Blossoms@Woodleigh condominium. It is near the yet-to-be-opened Woodleigh MRT Station on the North-East Line.

About 270 homes can be built on the 1.07ha plot, to be launched for sale in April.

Another choice site is at the junction of Lorong 2 Toa Payoh and Lorong 3 Toa Payoh, within walking distance of the Braddell MRT Station.

This 1.4ha site can host 535 homes and will be put up for sale in February. It was previously on the reserve list for developers to indicate interest, but it saw no takers. It has now been moved to the confirmed list to be launched at a fixed date.

Mr Li Hiaw Ho, the executive director of CB Richard Ellis research, picked out two more sites as being among the ‘best of the crop’.

The first, at Bishan Street 14, has an area of 1.2ha and can host a 535-unit project.

The other is a 1.19ha site at New Upper Changi Road.

These four residential sites may fetch prices in the range of $400 to $600 psf of potential gross floor area, Mr Li estimated.

Mr Mak has noted, however, that apart from the Woodleigh Close site, which is new, the other plots have been available for some time on the Government’s reserve list.

Reserve list plots will not be launched for sale unless a developer comes forward to bid for them. Usually, choice plots on the reserve list will move quickly.

Those that remain to be ‘recycled’ for the next round of land sales are generally less attractive.

This time, however, the ‘recycled’ plots are quite plum, said Mr Mak.

If even these sites cannot find takers, ‘maybe developers already have enough on their plates’, he said.

In that case, perhaps the Government is offering more sites than the market is ready to absorb, he suggested.

For private housing alone, the MND has added 12 new sites to its land sales programme, including the Woodleigh Close plot.

Others include sites at Choa Chu Kang Drive, Tampines Avenue 1, Upper Changi Road North, Chestnut Avenue, Upper Thomson Road, Sengkang West Avenue and Sembawang Road.

There are also three executive condo sites, as well as a plot for landed homes at Sembawang Greenvale Phase 2. This landed parcel will be put up for auction in February to cater to smaller investors.

Outside land sales, the Government will also offer about 110 private housing units, including 90 service apartments at one-north. It will also provide 120,000 sq m of commercial space.

Source : Straits Times - 7 Dec 2007

THE Law Ministry unveiled proposed new changes

2007-12-09T13:23:00.001-08:00

THE Law Ministry unveiled proposed new changes yesterday meant to speed up disciplinary hearings for errant lawyers - a process that often drags on for 15 months.

The move is among a raft of measures aimed to bolster public confidence in the legal profession, the Law Ministry said in a press release yesterday.

‘Such confidence requires a sound disciplinary system for errant lawyers,’ it said in the wake of a report from the Committee to Develop the Singapore Legal System, which recommended the changes.

The changes would see a single person - who would either be a retired judge, ex-judicial commissioner or Senior Counsel - probe cases brought against lawyers accused of violating professional codes of conduct. The system would replace a four-member committee which, because of scheduling problems, bogged down the disciplinary process, according to the committee chaired by Justice V.K. Rajah.

The average time to complete hearings has doubled from 7.5 months in 2002 to 15.4 months last year.

But the Law Society, which represents Singapore’s lawyers, expressed concern over the change.

‘In most jurisdictions, a lawyer is judged by a panel made up by three of his peers,’ it said in a media release. ‘The society is of the view that… it should continue to have three legally qualified persons.’

The proposed new rules come as more lawyers find themselves on the wrong side of the law.

Complaints against lawyers resulted in 28 probes completed last year, more than twice the number from a year earlier. One of the probes involved two lawyers.

Six lawyers were acquitted, nine were reprimanded or fined by their peers and 14 referred to a Court of Three Judges - the highest level of disciplinary action.

Complaints against lawyers covered a range of issues - from offering a commission for a real-estate case to making a false declaration.

Chief Justice Chan Sek Keong said in January there was a pressing need to revise the disciplinary system.

As it stands, errant lawyers are probed by a disciplinary committee comprising two lawyers, a representative from the Attorney-General’s Office and one lay person, who are appointed by the Chief Justice.

The committee can either refer the accused lawyer to the Court of Three Judges - if the matter is serious - or recommend a fine or reprimand by the Law Society.

But the four-member composition often made it difficult to schedule early hearings.

The report released yesterday acknowledged reservations to the streamlined process. But it should help many innocent lawyers who often have to wait months to see their cases decided, it said.

‘A not inconsiderable number of lawyers are acquitted of any misconduct at the disciplinary committee stage.

‘For them, justice is denied when hearings are unreasonably delayed,’ said the report.

Under the new rules, the penalties against errant lawyers will also be increased.

The Law Society may impose fines of up to $20,000 in less serious cases. The Court of Three Judges will also be empowered to fine lawyers up to $100,000, in addition to suspending their licences or striking them off.

‘The Government views these recommendations as positive moves,’ said the Law Ministry.

Source : Straits Times - 7 Dec 2007

THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment

2007-12-09T13:20:00.000-08:00

THE Law Society is moving to tackle the hot-button issues of touting in property deals and entrapment, even as lawyers say fees paid to agents have been going up.

The lawyers note that lawyers who pay such referral fees get a lucrative payoff. Their comments come in the wake of the suspension of three lawyers on Tuesday.

They had been caught offering referral fees to a private investigator pretending to be a property agent. The private eye was hired by unknown lawyers.

But even as the Society said it is moving to tackle these issues - touting and entrapment - many lawyers say its task is fraught with difficulties.

Under the law, lawyers are guilty of misconduct if they engage in touting practices and pay an agent to refer a client to them in return for a fee.

But lawyers told The Straits Times it is prevalent.

The going rate for such fees now is about $500 - from about $150 five years ago - for each conveyancing file which brings in about $2,000 per transaction to the lawyer.

A lawyer with 10 years’ experience said: ‘Each property file is worth about $2,000 and if an agent can bring in 20 files a month, that’s easily $30,000 - enough to cover rental and staff costs.

‘The agents will tell you: ‘I have a conveyancing case, how much will you pay me?’’

There is thus significant money to be made, especially if the agent can bring in the cases in bulk.

The Law Society said moves are already afoot to tackle touting. A spokesman said the practice is difficult to detect, especially when there is ‘an absence of evidence from the parties concerned’.

But an ad-hoc committee had been appointed to see if ‘current detection and enforcement procedures could be streamlined and enhanced’.

The committee will also look into the issue of lawyers ‘privately engaging investigators to detect suspected unethical conduct’, the spokesman said.

A decision to set up the panel came in the wake of a failed attempt in late 2006 by lawyer Rayney Wong to stop a disciplinary committee which had investigated him for touting.

In throwing out his request at that time, Justice V.K. Rajah also called on the Law Society to deal with the problem of lawyers hiring private investigators to entrap competitors they suspect of using touts to drum up business.

Yesterday, the Law Society’s spokesman said that once the recommendations of the committee are out, it will tackle the question of whether it should take on a greater investigative role.

Many lawyers see this as a solution to touting. But they are split over the issue of an absolute ban on referral fees.

The sole proprietor of a law firm and a litigator of 10 years said: ‘I accept that it is an offence, but to me it’s business. If an agent brings in business for you, wouldn’t you give him a commission? A car salesman would be paid a cut for every car he sells. But in our case, it is against the law.’

Mr Mark Goh, of Mark Goh & Co, disagreed. ‘The legal profession cannot be equated with a commercial company…We owe a duty to our clients and society,’ he said.

Allowing such fees can open another can of worms, said sole-proprietor Patrick Tan of Patrick Tan & Associates. ‘There’s nothing to stop another lawyer from handing out a higher fee to an agent to get the file. If one gives $200, another might give $500.

‘Where does it stop?’

Source : Straits Times - 7 Dec 2007

Errant lawyers may soon find themselves under a quicker and sharper disciplinary process.

2007-12-09T13:19:00.000-08:00

Errant lawyers may soon find themselves under a quicker and sharper disciplinary process.

A high-level committee headed by Justice V K Rajah has proposed changes to streamline and accelerate various stages of the process, sieving out baseless and vexatious complaints.

The committee recently completed a review of the legal sector.

The Ministry of Law said yesterday that it views the committee’s recommendations as positive moves to fine-tune and improve the disciplinary process.

There is room for improvement as the average time taken by the Disciplinary Committees (DC) to complete cases has doubled from 7.5 months in 2002 to 15.4 months last year.

Part of the reason is that the DC, an independent tribunal appointed by the Chief Justice, comprises two lawyers, one officer from the legal service and a lay person. This composition makes it difficult to schedule early hearings.

So one proposal is to replace the four-man DC with a Disciplinary Tribunal (DT) comprising just one person who could be a senior counsel, retired Judge or Judicial Commissioner.

The Law Society yesterday expressed concern about this proposal and said that the tribunal should continue to have three legally qualified persons.

‘In most jurisdictions, a lawyer is judged by a panel made up of three of his peers,’ the society said in a statement.

To sieve out baseless complaints, the committee has recommended that every complaint be made in writing and supported by a statutory declaration affirming or swearing the truth of the particulars, unless it is made by a public officer. The maximum deposit that complainants have to place will be increased from the current $500 to $1,000.

The DT will also be empowered to order a complainant to pay the costs of proceedings before it if the complaint is found to be frivolous or vexatious.

To prevent the disciplinary process from stalling, judicial review of the DT’s decision should also only be allowed after the tribunal has completed its hearings, the committee said.

Source : Business Times - 7 Dec 2007

Bank lending to the property sector continued to accelerate

2007-12-01T01:12:00.000-08:00

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.

2007-12-01T01:11:00.002-08:00

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

2007-12-01T01:11:00.001-08:00

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.

2007-12-01T01:10:00.001-08:00

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

2007-12-01T01:09:00.001-08:00

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.

En-blocked

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.

2007-12-01T01:05:00.000-08:00

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

2007-12-01T01:04:00.001-08:00

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)

2007-12-01T01:03:00.001-08:00

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

2007-12-01T01:02:00.000-08:00

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.

2007-12-01T01:01:00.001-08:00

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 projectsÂ 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)

2007-12-01T01:00:00.000-08:00

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.

2007-12-01T00:59:00.000-08:00

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

2007-12-01T00:54:00.000-08:00

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.

2007-12-01T00:53:00.000-08:00

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)

2007-12-01T00:51:00.002-08:00

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.

2007-12-01T00:51:00.001-08:00

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.

2007-12-01T00:49:00.002-08:00

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

2007-12-01T00:49:00.001-08:00

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?

2007-12-01T00:47:00.000-08:00

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

2007-12-01T00:46:00.000-08:00

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

2007-12-01T00:45:00.001-08:00

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

2007-12-01T00:44:00.000-08:00

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

2007-12-01T00:40:00.000-08:00

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

Rising inflation may be starting to worry policymakers

2007-11-26T18:07:00.002-08:00

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?

2007-11-26T18:07:00.001-08:00

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

2007-11-26T18:06:00.001-08:00

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.

2007-11-26T18:05:00.001-08:00

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.

2007-11-26T18:04:00.000-08:00

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

2007-11-26T18:03:00.000-08:00

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 WILL PAY?

‘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.

2007-11-26T18:02:00.000-08:00

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’.

2007-11-26T18:01:00.000-08:00

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

CapitaLand has opened its own business school at a heritage building in Sentosa.

2007-11-26T18:00:00.002-08:00

PROPERTY giant CapitaLand has opened its own business school at a heritage building in Sentosa.

Yesterday, chief executive Liew Mun Leong also used the venue to launch a book that is a compilation of nine years of e-mail messages to his staff, written mostly on Sundays.

The developer spent $10 million to renovate the building, which used to house a museum of rare stones. It leased the building earlier this year for a period of 10 years for Climb, short for CapitaLand Institute of Management & Business.

Climb has started offering learning and development programmes for the group’s staff - about 8,900 globally, of whom 1,400 are in Singapore.

Started last year, Climb has six full-time staff and previously conducted its courses at various locations, including hotels.

Mr Liew, who is involved with some of Climb’s programmes, yesterday launched his book, Building People: Sunday Emails From A CEO, with President SR Nathan, who also officially opened Climb.

The book contains some of the e-mail that Mr Liew has written to his staff in past years - an activity which he described in his book as enjoyable and relaxing.

An e-mail sent in 1998 carried the message: ‘Don’t take everything from the table. Leave something for your partners, too.’

Another, sent in 2001 and titled ‘There are no fat CapitaLand executives’, addressed the group’s ‘keep fighting fit’ culture.

Mr Liew ended it with: ‘So get out, you lazy bones and get going. It is all about discipline and then habit…Have fun doing it!’

Source : Straits Times - 23 Nov 2007

Koh Brothers Group yesterday paid $19.6 million to snap up two freehold petrol station sites

2007-11-26T18:00:00.001-08:00

CONSTRUCTION and property development firm Koh Brothers Group yesterday paid $19.6 million to snap up two freehold petrol station sites, which are both next to properties it already owns.

The first - a 13,498 sq ft site in Bukit Timah Road costing $13.3 million - is adjacent to the group’s freehold Alocassia Apartment site.

Koh Brothers bought Alocassia in May last year for $30 million. The site, first developed in 1996, had 45 service apartments and seven commercial units.

Once the two sites are combined, the listed firm will have a land area of 44,863 sq ft and a gross floor area of 62,808 sq ft. Koh Brothers said in a statement that it may develop a residential project on the combined land.

The second site it bought yesterday is a 26,433 sq ft commercial plot on Changi Road, which used to be a petrol station.

The group paid $6.3 million for the plot, which is next to its 61-room Changi Hotel that opened in 1994. It said that it may build an office building with shops on the ground floor.

On a per square foot basis, the Bukit Timah plot cost around $985 while the Changi Road site cost nearly $788.

Koh Brothers’ last buy was in June, when it joined hands with three other developers to buy the freehold Lincoln Lodge site off Newton Road for $243 million.

Source : Straits Times - 23 Nov 2007

Four strata floors of commercial space in The Arcade (picture) were put up for sale yesterday by private owners amid an ongoing office supply crunch.

2007-11-26T17:59:00.001-08:00

Four strata floors of commercial space in The Arcade (picture) were put up for sale yesterday by private owners amid an ongoing office supply crunch.

CB Richard Ellis (CBRE) and Jones Lang LaSalle (JLL), joint managers of the sale, are advising owners on the sale — by expression of interest — of approximately 32,120 sq m in strata area of the building.

According to CBRE and JLL, steady rentals can be expected in the short to medium term. The lease profile shows that 60 per cent of current leases will expire next year, suggesting rents could be renewed at substantially higher levels under the current tight market.

In the long term, property owners may also explore redevelopment options to maximise a potential plot ratio of 13.86, with current plot ratio at about 8.

The units in the 20-storey building in Raffles Place are a mixture of 999-year and 99-year leases. The mixed commercial and retail building consists of an office tower and three-storey retail podium with a total net lettable area of about 118,317 square feet.

Mr Colin Tan, head of consultancy and research at Chesterton International, said office prices had softened somewhat as evidenced in the recent land sales in the Marina View site.

Last week, Macquarie Global Property Advisors put in the winning bid of $779 psf per plot ratio for Land Parcel B in Marina View — about 45 per cent lower than the $1,409 psf bid it put in in September for an adjacent plot, also meant largely for office use.

“The Government has also been pushing out former government property for conversion into transitional office use. So, in the short term, the office market may be still tight, but in the medium term, it’ll definitely ease,” said Mr Tan.

The expression of interest exercise will close at 4pm on Dec 7.

Source : Today - 23 Nov 2007

PRIME office rents have grown faster in Singapore than anywhere else in the world over the past year, a new report has found.

2007-11-26T17:57:00.000-08:00

PRIME office rents have grown faster in Singapore than anywhere else in the world over the past year, a new report has found.

The rate of increase beat even that in Mumbai, now the world’s second most expensive office market, after London’s West End, according to CB Richard Ellis (CBRE).

But overall, Singapore ranks 11th on the list of worldwide office rentals, which are generally rising quickly.

Rental levels plus other associated costs for Singapore prime office space shot up 82.6 per cent in the 12 months ended Sept 30 to $12.60 per sq ft (psf) a month, said the CBRE’s Global Market Rents report. Apart from lease rates, occupancy costs include expenses for management and basic building maintenance.

In terms of occupancy costs, Moscow posted the second-fastest growth, of 65.4 per cent. Third in line was Mumbai, where occupancy costs grew 55 per cent.

The booming economics of the Asia-Pacific region continue to support strong demand for office space and to drive occupancy costs at a faster rate than in any other region, said CBRE in the report.

In comparing the costs, it looked at the typical achievable rent for a 10,000 sq ft unit in a top-quality building in a prime location.

Of the 171 markets it monitored, 85 per cent recorded growth in occupancy costs.

London’s West End - which registered 41.9 per cent growth - still has the most expensive office space, at $328US.91 ($476S.76) psf a year.

Mumbai came in a distant second, at $189US.51 psf a year. But it is already 5 per cent more expensive than London City, where occupancy costs came to $180US.80 psf a year.

Moscow is ranked fourth most expensive, at $180US.78 psf a year.

To facilitate comparisons across markets, the report based the most expensive rents on US dollars while rental growth was measured in local currency terms.

Singapore is ranked 11th on the world’s most expensive list, at $102US.37 ($148S.39) psf a year.

It came just after Hong Kong, where costs were at $106US.31 psf a year.

At $100.79 psf a year, rents for prime office space in New York’s Midtown have come down. Costs in Tokyo ranged from $154US.56 to $178US.61 psf a year.

As was the case with other key Asian financial centres such as Tokyo and Hong Kong, office vacancy rates remained low in Singapore at 5 per cent or less, said CBRE.

It noted that the uncertainty in global financial markets has had no discernible impact on demand for office space in Singapore.

The companies in Singapore that require larger spaces are largely from the fast-growing financial and insurance sectors. And before year-end, several sizeable bookings by companies in these two sectors are expected, CBRE said.

The report also echoed comments by property consultants about rising tenant resistance to rental hikes as rents are at record-high levels.

Companies are now more prepared to move to cheaper space further out of town to avoid paying high rents.

Source : Straits Times - 22 Nov 2007

Savills reveals that in the CBDs of Hong Kong and Singapore, Grade A rents are now the equivalent of $9.80 and $9.70 psf respectively.

2007-11-26T17:56:00.000-08:00

AVERAGE island-wide Grade A rents are currently just a shade under those of Hong Kong, but the highest rents achieved by Hong Kong Grade ‘AAA’ office buildings are still about 1.8 times higher than the top rents achieved in comparable buildings here.

A report by Savills reveals that in the CBDs of Hong Kong and Singapore, Grade A rents are now the equivalent of $9.80 and $9.70 psf respectively.

However, top rents in Hong Kong’s Grade ‘AAA’ buildings like the International Financial Centre, Chater House and AIG Tower are closer to $32 psf while those in Singapore’s Republic Plaza, One Raffles Quay and 6 Battery Road are at about $17.50 psf.

Rising business costs have come under scrutiny recently and Savills Hong Kong senior director (research and consultancy) Simon Smith does say that there is the perception that Hong Kong and Singapore are in direct competition to attract businesses for this segment of the property market. However, he added: ‘I have not come across any financial institutions that have chosen to relocate from Singapore to Hong Kong yet.’

Indeed, Mr Smith believes that the financial institutions that are so important to the economies of both cities are more likely to set up offices in both cities to service different markets.

In terms of new supply of office space, Mr Smith does point out that Hong Kong will see some ‘AAA’ space become available next year in areas like West Kowloon where the 2.5 million sq ft International Commerce Centre (ICC) is set to open. The ICC is said to have attracted some major financial institutions already.

In contrast, Savills notes that the recently awarded commercial development sites including those at Marina View and Beach Road are expected to generate a combined 3 million sq ft of office space, scheduled for completion between 2010 and 2012.

But competition actually could come from more unlikely quarters.

Savills’ survey of regional office rents includes the emerging Vietnamese cities of Hanoi and Ho Chi Minh City and already average Grade A office rents in both cities have outpaced those in Shanghai and Beijing (but are still less than Tokyo, Hong Kong and Singapore).

Mr Smith believes that rising rents and 100 per cent occupancies in Hanoi and Ho Chi Minh City are largely due to the shortage of quality buildings in these cities, and hence adds: ‘There is a huge potential there for developers.’

Giving an insight into the pace of development there, he said: ‘Vietnam is much like China was in the 1990s, where companies were running their businesses out of hotel rooms. But when the market matures, rents will settle down.’

Savills believes the outlook for Singapore office sector remains positive, with rents continuing to rise, although at a slower pace for Grade A space due to ‘resistance from tenants’.

‘Demand from multinational companies for offices in suburban areas and high-tech space is expected to increase, especially by those who are more conscious of their bottom-line,’ it said.

Source : Business Times - 22 Nov 2007

The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy

2007-11-26T17:46:00.001-08:00

SINGAPORE developer GuocoLand Group yesterday broke ground on its maiden development in Vietnam - The Canary - and says it is already on the lookout for further development sites.

The US$58 million (S$84 million) investment in The Canary reflects a high level of investor confidence in Vietnam’s booming economy, said a Singapore agency official at the ground-breaking ceremony yesterday.

The 17.5ha development will boast residential, commercial, hotel and educational facilities. It is the first integrated project to be built by a foreign investor in Vietnam, outside the commercial centre Ho Chi Minh City and the capital Hanoi.

It is being built in affluent Binh Duong province, 17km north of Ho Chi Minh City, near the Vietnam- Singapore Industrial Park (VSIP).

The flagship industrial zone was started in 1996 by a consortium of five Singapore firms led by SembCorp Parks, in a venture with Vietnamese state-owned Becamex IDC.

With a gross floor area of 290,000 sq m, The Canary is expected to yield 1,200 homes, in addition to a shopping mall with 85,000 sq m of retail space, a hotel, an international school and a sports complex. Homes will also face the popular 27-hole Song Be golf course.

Centre director Chiong Woan Shin of IE Singapore’s Ho Chi Minh City office told The Straits Times that the project reflects the level of confidence of Singapore companies.

Construction of the residential area’s first phase is under way and due for completion in 2009.

The two- to four-bedroom apartments, ranging from 85 sq m to 160 sq m, will be targeted at locals and expatriates alike, said Mr Lawrence Peh, general manager of Guoco- Land Vietnam.

GuocoLand’s international investment general manager Ho Sing added that the group is looking for more locations in Vietnam for further projects.

CBRE Vietnam’s managing director, Mr Marc Townsend, said he expected the project to be well-received. ‘With so many people working at the VSIP, it will be time- and cost-efficient to live there,’ he said.

The project will be launched for sale next year. He estimates that the homes will be priced at a premium above US$800 per sq m, or S$108 per sq ft - a price fetched by a residential project nearby.

IE Singapore’s Ms Chiong added that more Singapore companies were venturing into Vietnam.

But fast-rising home prices are also proving to be the bane of ordinary Vietnamese and even some expatriates. This is exacerbated by speculators flipping properties for a quick profit.

Property prices have jumped 50 per cent in Vietnam since the start of this year, and in Hanoi and Ho Chi Minh City, they have tripled.

The result is that owning homes in the cities is far beyond the means of most ordinary Vietnamese. The issue is a hot topic in the country’s legislature.

Source : Straits Times - 21 Nov 2007

CapitaCommercial Trust (CCT), one of Singapore’s biggest office landlords

2007-11-26T17:45:00.000-08:00

CapitaCommercial Trust (CCT), one of Singapore’s biggest office landlords, announced yesterday the establishment of a $1 billion multi-currency medium-term note (MTN) programme.

The programme was established by CCT MTN Pte Ltd - a wholly owned unit of CCT trustee HSBC Institutional Trust Services Singapore.

The MTN programme will allow CCT MTN to issue notes in series or tranches in any currency as may be agreed between the company and DBS Bank, the arranger and the dealer of the MTN programme.

CCT MTN may issue each series or tranche of notes in various amounts and tenors, which may bear fixed, floating or variable rates of interest.

It can also issue hybrid or zero coupon notes.

All sums payable in respect of the notes will be unconditionally and irrevocably guaranteed by the CCT trustee.

The programme has been given a ‘Baa1′ rating by Moody’s Investors Service.

The net proceeds from each notes issue will be onlent by CCT MTN to HSBC. The CCT trustee can use the funds to: refinance existing borrowings; finance or refinance its investments; lend to any trust, fund or entity in which it has an interest; finance or refinance any asset enhancement works initiated by itself or such trust, fund or entity in which it has an interest; and for its general working capital.

CCT said yesterday that it has applied to the Singapore Exchange for permission to deal in, and quotation for, any notes which are agreed at the time of issue to be listed.

CCT last month posted distributable income of $29.6 million for the third quarter ended Sept 30, 2007 - 13.5 per cent higher than its forecast based on a circular dated August last year, and a 52.4 per cent improvement from the same period last year.

CCT’s Singapore properties include 6 Battery Road, Capital Tower, Robinson Point, HSBC Building, StarHub Centre and the Golden Shoe and Market Street car parks, and a 60 per cent stake in the Raffles City complex.

CapitaMall Trust is the joint owner of Raffles City complex.

Source : Business Times - 21 Nov 2007

The Housing and Development Board imposes the levy on those who sell their first flat to buy another from the board.

2007-11-26T17:44:00.000-08:00

NEW executive condominiums (ECs) will be even more attractive now that the resale levy is no longer payable.

The Housing and Development Board imposes the levy on those who sell their first flat to buy another from the board. It is a fixed sum that ranges from $15,000 to $50,000 according to flat type, and $55,000 for ECs.

In a statement yesterday, HDB said: ‘To align the purchase of new ECs with the Design, Build and Sell Scheme (DBSS), second-timers buying a new EC unit from the developer will no longer have to pay the resale levy.’

HDB also said that previously, first-timers who bought new ECs were barred from buying another new EC, HDB or DBSS flat. This bar has now been lifted.

PropNex CEO Mohamed Ismail believes the change will give ‘greater incentive’ to HDB dwellers who aspire to a condominium lifestyle by way of an EC.

Mr Ismail reckons the dropping of the resale levy, coupled with rising HDB resale flat prices, could leave some second-time buyers with up to $100,000 to add to their housing budget, depending on the size of the flat they sell.

He also believes developers could be encouraged to bid for EC sites, as demand will grow.

The government has said it intends to release more EC sites.

The first to be released, after a gap of more than three years since the last EC site was sold in 2004, will be at Punggol Road/Punggol Field.

The 2.27ha site with a plot ratio of 3.0 was put on the reserve list of the Government Land Sales Programme yesterday. And with the dropping of the resale levy, consultants expect interest in the site to increase.

Cushman & Wakefield managing director Donald Han says the last EC site at Woodlands, where La Casa now stands, was sold for $150 per sq ft per plot ratio (psf ppr). Since then, two DBSS sites - launched at Tampines in October 2005 and Boon Keng Road in March 2007 - sold for $114 psf ppr and $234 psf ppr respectively.

Mr Han says EC sites typically fetch more than DBSS sites. And based on the last DBSS site price at Boon Keng Road, but factoring in Punggol’s location and EC site status, he expects the Punggol EC site to fetch $190-$220 psf ppr.

‘We expect strong interest from developers and contractors for this site due to revival of HDB market activity and recent price increases - supported mainly by HDB upgraders and new home buyers,’ he said.

‘In addition, the government has committed its resources to turning Punggol into a major waterfront township and Punggol itself has been a news focal point lately.’

Source : Business Times - 21 Nov 2007

99-year leasehold residential site in Woodlands was found to have drawn a surprising eight bidders

2007-11-26T17:43:00.000-08:00

A 99-year leasehold residential site in Woodlands was found to have drawn a surprising eight bidders when the government tender closed yesterday, with the top bid coming to some $56 million - or $232 per square foot per plot ratio (psf ppr).

Recent government land tenders have drawn only a few bidders each, which market watchers said was a sign of the property market cooling off.

For the 172,200 sq ft site at Woodlands Avenue 2/Rosewood Drive, the top bid was put in by Evan Lim & Co Pte Ltd.

The company just pipped second highest bidder Frasers Centrepoint, which offered $55.5 million - or $230 psf ppr.

Other bidders include Wing Tai and Sim Lian Land. The site has a 1.4 plot ratio - giving it a maximum gross floor area of 241,100 sq ft.

Nicholas Mak, director of research and consultancy at Knight Frank, said that the price was ‘realistic’, although it came in below prior market expectations of $250-$280 psf ppr.

The number of bids was impressive, considering the recent market turbulence, experts said. ‘The bids show that developers are confident of healthy suburban buyer demand,’ said Mr Mak.

Ku Swee Yong, Savills Singapore’s director of marketing and business development, said: ‘Developers still see that there is good demand from the mass market, arising from job growth and rising wages.’

With construction costs for mass market condos estimated at about $300 psf, the break-even price for the site could be around $530 psf, experts said.

This means that apartments in the project could eventually be launched at about $700 psf - higher than what private homes in Woodlands are fetching at the moment.

Separately, the Urban Redevelopment Authority (URA) on Monday awarded a transitional office site at Tampines to City Developments’ unit Glades Properties.

The developer had put in the only bid for the site, offering $10 million, or $81 psf ppr - lower than the $100 psf ppr that most property consultants had expected the 15-year leasehold site to fetch. This led to market talk that the site might not be awarded.

Yesterday, URA also said that an unnamed developer has entered a bid of $187 million for a 3.2ha, 99-year leasehold residential site at Simei Street 4, triggering a public tender which will be launched in two weeks’ time.

The price offered by the developer works out to $235 psf ppr. The site has a 2.3 plot ratio - giving it a maximum gross floor area of 797,400 sq ft.

Market watchers, however, reckon that the plot could fetch more.

‘I think the winning bid could come to $350 psf ppr,’ said Ho Eng Joo, Colliers International’s executive director for investment sales. Apartments coming up on the site could be launched at about $800 psf, he said.

URA yesterday also awarded the tender for the 99-year leasehold condo site at Enggor Street (Land Parcel B) to Allgreen Properties, which had submitted the highest bid of $717 psf ppr in a public tender.

Source : Business Times - 21 Nov 2007

ORCHARD Road prime rents have hit $325US psf

2007-11-26T17:41:00.000-08:00

ORCHARD Road prime rents have hit $325US psf per year, making it the world’s 14th most expensive area for shopkeepers. By contrast, annual prime rents for sites on New York’s Fifth Avenue are $1US,500 psf, or $922US for sites on the Avenue des Champs Elysees, in Paris.

Orchard Road is also the fourth most expensive shopping location in this region - after those in Hong Kong (Causeway Bay - $1US,213 psf/year), Tokyo (Ginza - $683US psf/year) and Seoul (Gangnam Station - $431US psf/year).

A report by Cushman & Wakefield (C&W) shows that Singapore’s busiest shopping street did slip one place from its previous 13th position last year but attributed this to the strength of the euro over the Singapore dollar.

C&W’s report tracks retail rents in the world’s top 231 shopping locations across 44 countries. Its data show that annual prime rents increased by 11.3 per cent for Orchard Road while in the top three most expensive locations in New York’s Fifth Avenue, Hong Kong’s Causeway Bay and Paris’s Avenue des Champs Elysees, rents increased by 11.1, 6.97 and 14.5 per cent respectively.

At the fourth and fifth most expensive locations - London’s New Bond Street ($814US psf/year) and Tokyo’s Ginza - annual rents increased by 20.95 and 4.8 per cent respectively.

Although C&W expects retail rents in Singapore to continue their upward trend, it noted that rents in other cities have increased faster, notably in India. It believes that this will help make Singapore more competitive and maintain its attractiveness as a retail destination in the region.

Rental growth across Asia as a whole increased by 23.8 per cent. C&W head of retail services (Asia Pacific) Sebastian Skiff said: ‘Of particular note is the robust performance in Tokyo driven largely by lack of supply. India saw particularly strong growth, with rents nationally up 53.5 per cent.’

He also noted that Australia, Korea, SingaporeÂ and Hong Kong saw solid growth from already relatively high bases.

On the demand for prime retail space, C&W’s global head of retail, John Strachan, said: ‘We are seeing the emergence of a line-up of global shopping destinations, whether Fifth Avenue in New York, Causeway Bay in Hong Kong or Avenue des Champs Elysees in Paris, where retailers are using flagship stores in prestige locations to leverage the value of their brands.’

Globally, Chicago’s Oak Street was the location with the biggest rental increases in local currency. Rents for prime properties doubled in one year.

This was followed by rents in New Delhi’s Ansal Plaza and Connaught Place which saw annual increases of 87.5 per cent while rents in St Petersburg’s Nevsky Prospekt increase by 81.8 per cent.

Source : Business Times - 20 Nov 2007

Singapore’s office rents leapt 83 per cent in the past 12 months

2007-11-22T17:58:00.000-08:00

Singapore’s office rents leapt 83 per cent in the past 12 months - the fastest rate in the world - as it shrugged off turmoil in global financial markets, commercial property consultancy CB Richard Ellis Research said.

The survey of office occupation costs in 171 cities worldwide showed that Singapore was followed by Russian capital Moscow, India’s financial capital Mumbai, the Philippines’ capital Manila and Norway’s capital Oslo.

‘The recent uncertainty in global financial markets has had no discernible impact on Singapore demand for office space,’ CB Richard Ellis Research (CBRE) said in its semi-annual Global Market Rents survey.

Office rents in Singapore rose to US$102.37 per square foot, making it the 11th most expensive business centre in the world, up from the 24th position in the August survey, CBRE said.

The survey showed London’s West End, Mumbai, the City of London and Moscow as the top four most expensive office markets in the world.

‘With (Singapore) rents at record levels, there is increasing tenant resistance to rental hikes, and occupiers are more prepared to explore lower cost locations and consider relocating to business parks or high-tech space,’ the survey said. — REUTERS

Source : Business Times - 22 Nov 2007

London and Mumbai tenants paid the most for high-quality offices this year

2007-11-22T17:56:00.000-08:00

London and Mumbai tenants paid the most for high-quality offices this year, while Singapore rents grew the fastest as economic growth lured international banks to Asia, said CB Richard Ellis Group Inc, the world’s largest commercial real estate broker.

London’s West End led with average annual rents of US$328.91 per square foot (psf) this month, compared with US$180.80 for the UK capital’s main financial district.

Mumbai had the second-most expensive leases at US$189.51, CB Richard Ellis said in its semi-annual Global Market Rents survey.

Asia’s booming economies drove up demand for financial and computing services in the region, catapulting Mumbai to second spot and fuelling Singapore’s 83 per cent growth in rents.

The US currency’s decline also drove up costs in dollar terms, while a dearth of new space bolstered London rents, CB Richard Ellis said.

‘Markets that moved up that quickly had the highest growth rates based on the economy’ as well as a scarcity of space, said Ray Wong, director of research operations for the Americas for Los Angeles-based CB Richard Ellis.

‘In the most expensive markets, if they’re close to their peak, the expectation for increase is marginal, but other markets, especially resource sectors, are enjoying an increase in demand so they’re going to move up a lot quicker.’

Mumbai’s rents rose 55 per cent, driven by computer related tenants, according to CB Richard Ellis.

Midtown Manhattan was the most expensive North American market, with rents averaging US$100.79 psf, 12th- highest worldwide. Downtown New York ranked 46th globally at US$53.47.

Moscow rents jumped 65 per cent after crude oil prices tripled in the past five years, bolstering the economy of the world’s second-biggest exporter of the fuel.

Rents in the oil hub of Edmonton, Canada, rose 43 per cent, the ninth- fastest worldwide, as energy companies leased more space to house expanding workforces, the survey showed. Edmonton did not rank in the top 50 markets by rental prices.

Eighty-five per cent of the 171 cities included in the survey saw rental increases in the year ended Sept 30, according to CB Richard Ellis. This bodes well for investment returns, Mr Wong said.

The survey measures the most expensive rents based on US dollars. Rental growth rates were measured in local currency terms. — Bloomberg

Source : Business Times - 22 Nov 2007

Somerset Ampang is our second Somerset-branded serviced residence in KL

2007-11-22T17:55:00.000-08:00

THE Ascott Group is adding another serviced residence in Kuala Lumpur - its sixth property in Malaysia.

The group said yesterday it has signed a conditional agreement to buy a 208-unit serviced residence from HSC Properties (HSCP) for RM112.5 million (S$48.3 million).

The property will be named Somerset Ampang when it opens in the first half of 2010.

Somerset Ampang is in Kuala Lumpur’s ‘Golden Triangle’ - the business, shopping and entertainment district marked by Jalan Ampang, Jalan Sultan Ismail and Jalan Bukit Bintang.

When completed, the serviced residence will be part of an integrated development that will house one of Malaysia’s leading medical, heart and diagnostic centres, HSC Medical Centre. The high-end medical centre will be separately owned and managed by HSCP. It will occupy five levels of the 23- storey development, with amenities such as a medical spa, restaurant and cafe.

Ascott’s deputy CEO for finance and investment Chong Kee Hiong said: ‘Demand for international-class serviced residences, especially in the capital of Kuala Lumpur, is expected to remain strong. Given its excellent location in Kuala Lumpur’s business and lifestyle district, Somerset Ampang will enable Ascott to capture a larger share of the serviced residence market.

‘Somerset Ampang will cater not only to business travellers but also to visitors to the medical centre who require post-treatment accommodation, as well as their families and friends.’

Somerset Ampang’s facilities will include a swimming pool, gymnasium and children’s playground, Ascott said.

Its portfolio in Malaysia will increase to more than 760 units when Somerset Ampang opens. Ascott’s other properties in the country are Ascott Kuala Lumpur, Somerset Seri Bukit Ceylon in Kuala Lumpur, Somerset Gateway in Kuching and two corporate leasing properties in Kuala Lumpur.

‘Somerset Ampang is our second Somerset-branded serviced residence in KL,’ said Ascott’s deputy CEO for operations Gerald Lee. ‘Having more serviced residences in the city enables us to leverage on economy of scale and brand awareness for better operational efficiency and cross-selling. Adding more properties in Malaysia also means that our customers can choose from a wider portfolio.’

The group operates three brands - Ascott, Somerset and Citadines. Its portfolio spans 53 cities in 23 countries, 11 of which are cities where Ascott’s serviced residences are being newly developed.

Source : Business Times - 22 Nov 2007

19 residential sites owned by single owners and worth some $1.05 billion in all were sold to developers

2007-11-22T17:54:00.000-08:00

With the property market running hot, it is not just collective sales that have ballooned. Over the past two years, more residential land sites owned by single owners were sold as well.

So far this year, 19 residential sites owned by single owners and worth some $1.05 billion in all were sold to developers, data provided by property firm CB Richard Ellis (CBRE) shows.

And in 2006, there were 15 single-owner land sales worth a total of $865 million. By comparison, just four single-owner land sales worth $303 million were done in 2005.

Market watchers say a property market that is strong and active will bring out more sellers - both of the en-bloc variety as well as single owners.

‘Collective sales have hogged the limelight of late, but the single-owner sales have also been very active,’ says CBRE executive director Jeremy Lake. ‘If you look at overall residential sales, you will see that they have gone up too. So single owners are just mirroring the overall market.’

Ku Swee Yong, director of marketing and business development at Savills Singapore, says that in the case of those sites owned by associations or clubs, members who were looking to sell might have been able to convince those who were previously not in favour of selling to change their minds, considering the prices that the properties can now fetch.

‘When the price is better, they (those looking to sell) manage to clear the hurdle,’ Mr Ku says.

The 19 sites sold by single owners this year include a few owned by associations, including one sold by Chui Hui Lim Club. The club sold a Keng Lee Road site to Sim Lian Group for some $115.8 million.

CBRE’s data also shows that this year, while there were a few large single-owner sites that were sold, the bulk of the 19 properties were small - with 10 of them going for less than $30 million each.

Market watchers attributed the increased interest in smaller sites to new players in the property market. These smaller developers generally do not have the resources to bid for en-bloc sites that go for hundreds of millions dollars - the province of the likes of CapitaLand, City Developments and foreign property funds.

‘When the market is good, it will attract new entrants,’ says CBRE’s Mr Lake. ‘And you will find some people who will want to get into the market, but might not be able to afford the big sites.’

Sesdaq-listed Tee International is an example of one new entrant which has been snapping up smaller sites. The company, which has a market capitalisation of $41.5 million, has been in the electrical and mechanical engineering business since 1980. But since the start of the year, Tee has been buying a string of freehold terrace houses and apartments with plans to develop them into luxury ’boutique’ homes.

Among its purchases are three single-owner sites, CBRE’s data shows. Tee acquired two single-owner plots in Cairnhill Circle in July - one for $7.7 million and the other for $5.5 million. It also bought a single-owner property in Thomson Road for $6.9 million in January this year.

Similarly, Eastern Holdings, which publishes magazines, also picked up two small single-owner sites in Grove Drive this year - one for $12.5 million and the other for $10.3 million. The company is also relatively small, having a market capitalisation of about $70 million.

Savills’s Mr Ku says that there are also some high net worth individuals who are buying smaller sites, redeveloping them and then selling them - all within a short span of time - to capitalise on the property market.

These wealthy individuals were also adding to the demand for smaller sites, he says.

Source : Business Times - 22 Nov 2007

THE rising property market has brought executive condominiums (ECs) back from the brink of extinction.

2007-11-22T17:52:00.000-08:00

THE rising property market has brought executive condominiums (ECs) back from the brink of extinction.

These homes - which are halfway between public housing and private condominiums - suddenly looked much more appealing after rules for buyers were relaxed on Tuesday.

Property consultants now expect that more plots for ECs, such as the 2.27ha site placed on the market on Tuesday, will soon be offered.

The main reason: the widening gap between prices of resale Housing Board flats and those of private condos. ECs, which come with condo facilities but with sale restrictions similar to those for public housing, were introduced in 1995 to bridge this gap.

They became relatively unpopular, however, after the property market plunged a few years later, making private condos more affordable.

In fact, when the first few ECs hit the resale market in 2004 after the minimum five-year occupation period, many were sold at a loss or at breakeven prices. This was because they were booked when prices were at their peak in 1996.

Many people expected Far East Organization’s La Casa in Woodlands to be the last EC project on the market when it was launched for sale in 2005.

‘Mass market condo prices were in the doldrums, making ECs redundant. Today, that’s a different story,’ said Colliers International’s director of research and consultancy, Ms Tay Huey Ying.

Private home prices surged 22.9 per cent in the first nine months of the year - more than twice the rate achieved by resale HDB flats.

Lower-priced ECs are more attractive now because prices of condos in the suburbs - where ECs tend to be sited - have started to move up significantly. In the July-September period, prices of non-landed homes outside the central region rose 7.9 per cent. Consultants expect this growth to continue.

The easing of EC rules is also expected to increase demand from people looking to move from HDB flats. The HDB removed a hurdle for upgraders by scrapping a resale levy payable by EC buyers who had previously bought government-subsidised flats.

Buyers of new EC units are also no longer barred from buying second new EC units or new flats. In addition, the HDB now requires developers to reserve 90 per cent of units for first-time buyers in the first month of sale.

Although ECs still cannot be sold within the first five years and remain out of bounds to foreigners within the first 10 years, the easing of rules has helped ECs shake off their tag as second-rate condos, said Mr Eric Cheng, the executive director of the HSR property group.

Potential buyers include property agent Lester Tan, 27, who has been living with his parents for the past five years since he got married.

He and his wife started looking for a condo about two years ago, but regretted waiting so long to buy one, as prices have shot up.

He said: ‘We heard that the Punggol EC may be launched, and we are quite excited about it.’

Potential upgraders like Ms Elsie Cheng, 31, are also eyeing the future EC in Punggol. The teacher - who lives with her husband, seven-month-old son and maid in a two-bedroom EC unit in Tampines - is looking to move into a bigger EC.

‘Why pay so much for a private condo?’ she asked.

Knight Frank’s head of research and consultancy, Mr Nicholas Mak, said the changes were likely to raise the proportion of upgraders among EC buyers, from an estimated 5 per cent to 10 per cent, to 20 per cent to 25 per cent.

Developers such as Frasers Centrepoint Homes, which built the Lilydale and Quintet ECs, are optimistic. Its chief operating officer, Mr Cheang Kok Kheong, told The Straits Times: ‘The EC will do well in today’s market as a hybrid property - apartments with condo facilities but without private condo price tags.’

He added: ‘As a reflection of the strong confidence and growth potential of the EC market, we expect to see increased competition in this market segment and more developers taking part in upcoming EC land tenders.’

Buyers hoping to make a quick buck from ECs, however, should take heed. ‘The (full) value of the EC will not be realised immediately but in 10 years, subject to the property market being buoyant at that time,’ said PropNex chief executive Mohamed Ismail.

For now, all eyes are on the EC site in Punggol Field. Estimated to be able to fit about 620 homes, it will be put up for tender once a developer commits to a minimum bid that meets the Government’s reserve price.

The EC units, however, will meet only a small portion of the current demand for new homes. In a recent HDB sales exercise, almost 8,000 families applied for just 400 flats in Telok Blangah, while more than 1,600 applied for 516 homes in Punggol.

Source : Straits Times - 22 Nov 2007

FIVE in one fell swoop - taking collective sales to the next level is Credo Real Estate

2007-11-22T17:51:00.000-08:00

FIVE in one fell swoop - taking collective sales to the next level is Credo Real Estate, which has just managed to sell a package of five neighbouring residential developments to a single developer for $120 million.

The five developments, which are at Mergui Road, off Rangoon Road, are Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui.

With a total site area of 74,355 square feet and a plot ratio of 2.8, the $120 million price reflects a unit price of $580 per square foot per plot ratio (psf ppr).

It has been sold to KSH Holdings. The publicly listed construction, property development and property management company said in a statement released yesterday that the site has a potential to be developed into a 142-unit development with units averaging 1,250 sq ft.

KSH also said that the acquisition will be financed through internal funds and bank borrowings, and that it is currently negotiating with other investors to form a joint venture to develop the site.

On the challenge of bringing together the owners of five developments, Credo executive director Yong Choon Fah said that it had been looking at the possibility of a combined collective sale for several years.

She also explained that each development had different attributes and that only by combining them could a ‘win-win’ be achieved for all.

The five developments have land areas ranging from 10,061 sq ft to 18,524 sq ft and Ms Yong said that all the home owners have accepted the same unit price.

There are a total of 88 homes and the owners will receive between $906,856 and $1,908,491 each.

The site, which is considered to be in the ‘city fringe’, is estimated to have a breakeven price of about $1,000 psf.

In the immediate vicinity, Pristine Heights is currently selling for between $1,000 and $1,150 psf.

In 2006, Credo marketed Lock Cho Apartments, Comfort Mansion and a four-storey walk-up block for a combined collective sale. They were eventually sold to City Developments Ltd. The latest deal, however, is thought to be the only one to involve five developments.

Source : Business Times - 22 Nov 2007

FIVE small adjoining freehold apartment blocks near Thomson Road have been sold en bloc to Kim Seng Heng Realty

2007-11-22T17:50:00.000-08:00

FIVE small adjoining freehold apartment blocks near Thomson Road have been sold en bloc to Kim Seng Heng Realty, a subsidiary of listed KSH Holdings, for $120 million.

The construction and property development group said yesterday that the combined site could be redeveloped into a high-rise residential block with about 142 luxury apartments of 1,250 sq ft on average.

It added that it is currently negotiating with other investors to form a joint venture to develop the site.

Credo Real Estate, which brokered the deal, said it is possibly the first time in Singapore that as many as five estates have been successfully combined and sold en bloc to one buyer.

The properties - Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui - are located near Rangoon Road and Moulmein Road.

They are single apartment blocks sitting on relatively small plots ranging from 10,061 sq ft to 18,524 sq ft.

When combined, they form a land area of 74,355 sq ft, which would permit a gross floor area of 208,196 sq ft.

If small pieces of state land in between are thrown in, the developer will have a site of 87,092 sq ft, said Credo’s executive director, Ms Yong Choon Fah.

In any case, three of the developments could not have otherwise been redeveloped on their own. ‘They need each other because there’s a 30m buffer requirement from the expressway,’ said Ms Yong.

This Urban Redevelopment Authority rule would mean that it is impossible for Norfolk Court, Mergui Lodge and The Mergui to be redeveloped individually. But if combined with the other two sites, a bigger development that does not fall within the 30m buffer zone can be built.

The five estates have 88 units in total. Each unit owner will get between $906,856 and $1.91 million.

The $120 million price reflects a price of $580 per sq ft (psf) of potential gross floor area.

After factoring in the cost of the state land in between, the rate could come down to about $540 psf, said Ms Yong.

KSH Holdings’ recent projects include a construction contract for a luxury boutique hotel at Clifford Pier.

Source : Straits Times - 22 Nov 2007

Waterfront View estate in Bedok Reservoir Road

2007-11-21T17:48:00.000-08:00

FOUR condominiums will be built where the former Waterfront View estate in Bedok Reservoir Road used to be.

The first will be launched in the first quarter of next year, said developers Frasers Centrepoint and Far East Organization yesterday.

It will be called Waterfront Waves and have 405 units, of which more than half will be three- and four-bedroom apartments. More than 60 per cent of the units will also have reservoir views, the developers added.

The Straits Times understands that the other three condos will also have ‘Waterfront’ in their names and are likely to be of similar sizes.

Together known as the Waterfront collection, the four-condo development is the largest in the area to have a direct water frontage, the developers said. In all, it could have 1,600 units.

The developers are also in talks with the Public Utilities Board about ‘enhancing the neighbourhood’s communal parks and water bodies’.

Although property consultants will not disclose prices for Waterfront Waves, they believe prices may start from $700 per sq ft (psf).

Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, said units on lower floors with no water views could fetch that price.

On higher floors, prices could go up to $850 psf, he added.

Frasers Centrepoint and Far East jointly bought the former HUDC site last year for about $240 psf of gross floor area.

Source : Straits Times - 21 Nov 2007

Around 5,700 homes were sold through collective sales in the first half of this year and the home owners who will have to look for replacement homes

2007-11-21T17:47:00.000-08:00

Around 5,700 homes were sold through collective sales in the first half of this year and the home owners who will have to look for replacement homes are expected to drive the property market.

A report by Savills Singapore estimates that if just two-thirds of those displaced by collective sales - about 3,900 of them - choose to buy replacement homes, their collective kitty could total $6 billion, representing the total payout to these en bloc millionaires.

Savills director (marketing and business development) Ku Swee Yong does not expect all $6 billion to be spent though. ‘About $4 billion could be channelled into new property acquisitions,’ he reckons.

And developments in the fringe and suburban areas such as Bukit Timah, Upper Bukit Timah, Clementi, Novena/Thomson, and Upper East Coast will be their targets.

Savills projects that only two-thirds of the en bloc millionaires will be in the market for a new home because it believes many already own second homes, if not more.

Savills’ analysis reveals that of the 2,795 home owners affected by the collective sales in Q2 2007, up to 2,159 owned homes in the prime districts of District 9, 10 and 11.

And Mr Ku reckons that half of these home owners already own at least one other home.

Interestingly, Mr Ku believes that only 20 per cent of the displaced home owners from homes outside the prime districts have second homes. But the number of en bloc millionaires could taper off if collective sales continue to fall. In Q3 2007, only 13 en bloc deals worth about $1.1 billion were done, down from $6.4 billion for 45 sites in the previous quarter.

Yet, en bloc millionaires are also expected to support the already buoyant residential market.

Savills says that assuming that 30 per cent of owners (or their tenants) affected by collective sales require rental accommodation, 974 units would have been needed to meet the demand over the last nine months. Savills added that the situation is expected to worsen in 2008, with some 800 units needed per quarter to accommodate displaced owners (or their tenants).

Savills does expect most demand for rental units to come from an increase in the number of foreigners working here.

Its report highlighted that foreigners working here grew by 14.9 per cent, from 875,500 last year to just over one million thus far, representing the highest year-on-year growth in the last 10 years. ‘With a low unemployment rate and high job creation rate, the number of foreigners working in Singapore is expected to grow sharply,’ it added.

Its analysis of data reveals that average rents of all non-landed residential properties in the prime districts rose by 13 per cent to $3.70 per square foot (psf) a month between Q2 and Q3 in 2007, while high-end residential rents climbed even higher to $6 psf a month.

Savills also noted that rents in Districts 8 and 12, on the fringe of the city, have risen by 35 and 23 per cent respectively to about $1.90 psf a month.

Source : Business Times - 21 Nov 2007

The Canary is located near the Vietnam-Singapore Industrial Park, near Ho Chi Minh City.

2007-11-21T17:46:00.000-08:00

GUOCOLAND yesterday broke ground on a US$58 million development in Vietnam - its first project in the country.

The 17.5 ha site will be home to The Canary - an integrated development which will house some 1,200 residential apartments, a hotel, a trendy retail mall and an international school.

GuocoLand said that the first phase of the residential apartments will be launched soon. This will be followed by the development of the first phase of the retail mall.

The entire development is scheduled to be completed in five to six years’ time, the developer said. ‘However, the actual progress will depend on market conditions in Vietnam,’ said Lawrence Peh, GuocoLand’s general manager for Vietnam.

The Canary is located near the Vietnam-Singapore Industrial Park, near Ho Chi Minh City. The project will be the first fully integrated development in Vietnam’s Binh Duong Province, GuocoLand said.

‘When The Canary is completed, it will add vibrancy to Binh Duong Province, which is a leading recipient of foreign direct investment among Vietnam’s provinces,’ said GuocoLand in a statement.

Besides GuocoLand, many other Singaporean developers - including Keppel Land, CapitaLand, Frasers Centrepoint and Allgreen Properties - have of late made forays into Vietnam’s booming property market.

GuocoLand’s shares closed five cents down at $5.20 yesterday. The company’s stock has climbed 128.5 per cent since the start of the year.

Source : Business Times - 21 Nov 2007