HONG Kong’s property market is tipped to see growth of up to 30 per cent over the next 12 months amid a flow of hot money into the city and a favourable interest rate environment.
This week saw HSBC cut its prime lending rate by a further 25 basis points to 7 per cent, following a rate cut only last week on the heels of one in the US. Other banks are expected to follow suit, fuelling a mortgage war among banks in the city.
As well as cheaper financing options for home buyers, the property sector is benefiting from a flow of cash into Hong Kong, in part due to an expectation that China will soon relax restrictions on capital inflows into the city.
This is expected to bring significant gains to Hong Kong’s stock market, which has already risen 55 per cent over the past two months in anticipation of fresh fund flows by mainland investors.
This week, Standard & Poor’s Equity Research outlined its bullish outlook on the residential property sector, reflecting what it sees as a return of confidence to the sector.
It cited recent record prices for luxury apartments, increased volume in residential transactions and the higher than expected bids for government land at auctions as indicators of confidence among developers and buyers.
The research arm of S&P said it expects a rise of 20 per cent to 25 per cent in the prices of residential properties over the next 12 months, as prices in large and small residential units remain well below 1997 prices.
But Colliers International director Ricky Poon believes property prices could increase by as much as 30 per cent. ‘The market is very different from 1997,’ he said. ‘There’s not too many people speculating.
‘Also, some people have been playing the stock market and have come out - and are investing in the property market.’
He said he had recently revised upwards projections of a 15-20 per cent rise over the next 12 months.
This would narrow the gap between the luxury sector, which has been powering ahead over the past few years, and the mass residential sector, which had been lagging.
‘The luxury sector has been going up a lot over the past two years,’ Mr Poon said. ‘It has even gone up by 10 per cent just in the past few weeks.
‘Now I think the market is moving to the mass residential sector - so the gap will be narrowing.’
Adding to the ‘feel good’ factor in the property sector were figures this week from the Hong Kong Monetary Authority on the number of residential mortgage loans in negative equity - where the property is worth less than the sum owing.
The number of these mortgages fell by about 1,200 cases to 3,500 cases in the three months to the end of September. They had an aggregate value of HK$6 billion (S$1.1 billion).
It represents a 97 per cent drop from the peak of the negative equity phenomenon which was in June 2003, just as Hong Kong was recovering from the Sars outbreak and an endemic slump in property values since 1997.
Source : Business Times - 10 Nov 2007
Monday, November 12, 2007
Suburban malls across Singapore are getting multimillion-dollar facelifts in a bid to improve their bottom lines.
Suburban malls across Singapore are getting multimillion-dollar facelifts in a bid to improve their bottom lines. They hope to attract more visitors in a competitive retail environment and collect higher rents from their tenants.
Data compiled by BT shows that at least 14 suburban malls have either undergone renovation and repositioning exercises over the past year, are doing so now or plan to do so in the future.
Work on these malls is estimated to cost their various owners close to $500 million in all.
Market watchers said that with Singapore’s main shopping belt Orchard Road all set to get three new malls in a few years’ time, suburban malls have to try to differentiate themselves and become attractive alternatives to heading into town.
Experts also said that upgrading works are necessary before increasing rents at these malls, as they are away from Singapore’s key shopping belts.
‘Suburban malls will continue to play a key role in the local retail scene as they will continue to remain distinct from the downtown malls in the Orchard Road and Marina Bay areas,’ said Stephanie Ho, assistant general manager of AsiaMalls Management, which manages five malls in Singapore.
For example, AsiaMalls’ Pasir Ris mall, White Sands shopping centre, recently underwent a $25 million rebranding and expansion exercise, and is now positioning itself as an ‘active lifestyle’ mall.
AsiaMalls hopes that White Sands will cater to holiday-makers staying at chalets and families frequenting entertainment attractions in Pasir Ris and the East Coast areas - in addition to Pasir Ris residents.
Elsewhere, AsiaMalls’ Hougang Mall is also now touted as ‘a mall for the whole family’ after a $13.5 million revamp.
The company is also in the process of improving Tiong Bahru Plaza and Century Square.
Other mall operators with suburban malls in their portfolio are going down the same route. Frasers Centrepoint Trust (FCT) will reopen Anchorpoint as a ‘village mall’ once its $12 million repositioning exercise is completed by end-November.
‘It (Anchorpoint) was a little bit dated and its positioning was wrong,’ Christopher Tang, chief executive of FCT’s manager, said recently. ‘We decided to reposition it in May.’
In addition to enhanced food & beverage offerings, Anchorpoint will also offer factory outlets, he said.
Next up is Northpoint, which will undergo a $30 million asset enhancement exercise starting from the first quarter of 2008.
FCT also has similar plans for Causeway Point in Woodlands further down the road, said Mr Tang.
FCT’s parent company, Frasers Centrepoint, also hopes to start work on one of the malls in its portfolio - Valley Point - by the end of 2008. Rival trust CapitaMall Trust is not to be outdone; the trust will spend some $338 million in all for asset enhancement works at five of its malls - Lot 1 Shoppers’ Mall, IMM Building, Tampines Mall, Sembawang Shopping Centre and Jurong Entertainment Centre.
Elsewhere, Jurong Point is adding a new extension which will be ready in about a year’s time.Managers of malls where revamp works have been completed report increased foot traffic and better rents.
At White Sands, average monthly footfall increased by 33 per cent post-revamp to 800,000, while at Hougang Mall, monthly shopper traffic has increased from an average of 870,000 in 2005 to 1.2 million in 2007, AsiaMalls.
And with Anchorpoint’s repositioning exercise, rental rates have gone up about 40 per cent, said FCT’s Mr Tang.
Source : Business Times - 10 Nov 2007
Data compiled by BT shows that at least 14 suburban malls have either undergone renovation and repositioning exercises over the past year, are doing so now or plan to do so in the future.
Work on these malls is estimated to cost their various owners close to $500 million in all.
Market watchers said that with Singapore’s main shopping belt Orchard Road all set to get three new malls in a few years’ time, suburban malls have to try to differentiate themselves and become attractive alternatives to heading into town.
Experts also said that upgrading works are necessary before increasing rents at these malls, as they are away from Singapore’s key shopping belts.
‘Suburban malls will continue to play a key role in the local retail scene as they will continue to remain distinct from the downtown malls in the Orchard Road and Marina Bay areas,’ said Stephanie Ho, assistant general manager of AsiaMalls Management, which manages five malls in Singapore.
For example, AsiaMalls’ Pasir Ris mall, White Sands shopping centre, recently underwent a $25 million rebranding and expansion exercise, and is now positioning itself as an ‘active lifestyle’ mall.
AsiaMalls hopes that White Sands will cater to holiday-makers staying at chalets and families frequenting entertainment attractions in Pasir Ris and the East Coast areas - in addition to Pasir Ris residents.
Elsewhere, AsiaMalls’ Hougang Mall is also now touted as ‘a mall for the whole family’ after a $13.5 million revamp.
The company is also in the process of improving Tiong Bahru Plaza and Century Square.
Other mall operators with suburban malls in their portfolio are going down the same route. Frasers Centrepoint Trust (FCT) will reopen Anchorpoint as a ‘village mall’ once its $12 million repositioning exercise is completed by end-November.
‘It (Anchorpoint) was a little bit dated and its positioning was wrong,’ Christopher Tang, chief executive of FCT’s manager, said recently. ‘We decided to reposition it in May.’
In addition to enhanced food & beverage offerings, Anchorpoint will also offer factory outlets, he said.
Next up is Northpoint, which will undergo a $30 million asset enhancement exercise starting from the first quarter of 2008.
FCT also has similar plans for Causeway Point in Woodlands further down the road, said Mr Tang.
FCT’s parent company, Frasers Centrepoint, also hopes to start work on one of the malls in its portfolio - Valley Point - by the end of 2008. Rival trust CapitaMall Trust is not to be outdone; the trust will spend some $338 million in all for asset enhancement works at five of its malls - Lot 1 Shoppers’ Mall, IMM Building, Tampines Mall, Sembawang Shopping Centre and Jurong Entertainment Centre.
Elsewhere, Jurong Point is adding a new extension which will be ready in about a year’s time.Managers of malls where revamp works have been completed report increased foot traffic and better rents.
At White Sands, average monthly footfall increased by 33 per cent post-revamp to 800,000, while at Hougang Mall, monthly shopper traffic has increased from an average of 870,000 in 2005 to 1.2 million in 2007, AsiaMalls.
And with Anchorpoint’s repositioning exercise, rental rates have gone up about 40 per cent, said FCT’s Mr Tang.
Source : Business Times - 10 Nov 2007
Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats
DEVELOPERS continue to trigger the release of sites from the Government Land Sales programme’s reserve list.
The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.
The developer who made the application - who was not identified - has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.
The site will be launched for tender in about two weeks.
The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.
‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.
‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’
A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.
Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.
He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.
‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.
‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.
CBRE’s Mr Tan predicts at least five or six bids.
‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.
Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.
So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.
Separately, URA yesterday awarded a residential site at Enggor Street behind Icon to Far East Organization unit Bishan Properties.
The company was the higher of two bidders the 99-year leasehold plot attracted at a tender that closed on Nov 1.
Its bid of $233.8 million or $851.66 psf ppr was 55 per cent higher than the only other offer of $150.98 million or about $550 psf per plot ratio by Guoco-Land.
A tender for the residential site next door closes on Nov 15.
Source : Business Times - 10 Nov 2007
The Urban Redevelopment Authority (URA) yesterday announced a successful application for a 99-year leasehold condo site on Alexandra Road near Redhill MRT Station and next to CapitaLand’s Metropolitan project.
The developer who made the application - who was not identified - has agreed to bid not less than $220.7 million, or $489 per square foot (psf) of potential gross floor area.
The site will be launched for tender in about two weeks.
The 92,127-sq-ft plot can be developed into a new condo with about 400 units averaging 1,200 sq ft.
‘My take is that the site could fetch a premium of within 10 per cent of the reserve price,’ said CB Richard Ellis executive director Joseph Tan.
‘Even at the reserve price, the breakeven cost for a new condo would be close to the $850 psf average price at which units of The Metropolitan condo have been selling in recent months.’
A 10 per cent premium to the site’s $489 psf per plot ratio (ppr) reserve price works out to $540 psf ppr.
Savills Singapore’s director of marketing and business development Ku Swee Yong estimates the site will fetch $550-$600 psf ppr, reflecting a breakeven cost of $850-$900 psf.
He reckons a condo on it could command about $1,000 psf on average if launched in 12-15 months.
‘This is one of the better sites on the reserve list, near an MRT Station and on the fringe of the CBD,’ he said.
‘It should attract five to eight bids. We’re not going to see the one to two bids that some Government Land Sale sites have been attracting lately,’ he added.
CBRE’s Mr Tan predicts at least five or six bids.
‘This is in a sector of the market that lacks supply and developers will be keen to bid for it,’ he said.
Market watchers believe a new condo near Redhill MRT Station should be able to tap demand from HDB upgraders given the high value of HDB resale flats in the area.
So far this year, 10 reserve-list sites on the Ministry of National Development’s slate of private residential, commercial and hotel sites have been triggered for launch.
Separately, URA yesterday awarded a residential site at Enggor Street behind Icon to Far East Organization unit Bishan Properties.
The company was the higher of two bidders the 99-year leasehold plot attracted at a tender that closed on Nov 1.
Its bid of $233.8 million or $851.66 psf ppr was 55 per cent higher than the only other offer of $150.98 million or about $550 psf per plot ratio by Guoco-Land.
A tender for the residential site next door closes on Nov 15.
Source : Business Times - 10 Nov 2007
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