Singapore Property News Upfront 7

Crazy or plain greed? Subject: Eliz Hgts. Asking: $2100ppr!
Asking prices for land in the prime districts continued their dizzying climb, as Elizabeth Heights, a freehold development in the Cairnhill area, was released for sale yesterday - with a price tag of as high as $2,100 per square foot per plot ratio (psf ppr).

The price topped that set by the 99-year leasehold Grangeford Apartments earlier this week. Grangeford comes with a whopping $660 million ‘guide price’ - more than double the $280 million bandied about in October last year. This works out to $2,016 psf ppr, including an estimated $97.8 million any developer will have to pay the state to restore the site’s remaining 66-year lease to 99 years.

Grangeford’s asking price of $2,016 psf ppr was the highest until Elizabeth Heights came along.
‘We expect to receive offers in the region of $570 million to $600 million, reflecting a land rate of about $2,000 to $2,100 psf ppr,’ said Karamjit Singh, managing director of Credo Real Estate, which is seeking expressions of interest for the site.

For any developer to earn a decent 20%, which I think it'll be silly at this point, they would need to market it at $2,800 - $2,900psf! Many developers are aiming as high as 30% - 50% margin! If that's expected, the market needs to be as bouyant in 2008/9 as now or somebody's gonna get hurt." - www.PropertyBingo.com

Elizabeth Heights has a land area of 88,600 sq ft and comes with a 2.8 plot ratio, but any buyer may redevelop the site up to its existing gross floor area of 285,000 sq ft, said Credo. No development charges should be payable, the property firm added.

An estimated 136 units with an average size of 2,000 sq ft each can be built on the site. Credo executive director Yong Choon Fah said that the asking price was not too high, and that it was comparable with that asked by Grangeford, which is used as a benchmark. In addition, Elizabeth Heights is unique in that it falls within a small stretch of properties along Cairnhill Road on which a 36-storey development may be allowed, Mr Singh said. He added that most of the other sites in Cairnhill and Scotts Road have a height control of up to 20 storeys.

‘Home buyers are willing to pay a significant premium for luxury homes on high floors with good views,’ said Mr Singh. ‘As the new development on this site may overlook its surroundings with its 36-storey potential, we believe this advantage would help support a land rate of at least $2,000 psf ppr.’

At present, Elizabeth Heights comprises 84 maisonettes and six penthouses. Some 71.2 per cent of the owners by share value have consented to the collective sale. A minimum of 80 per cent is needed before any sale can go through. If the price of $600 million is achieved, maisonette owners will each receive $6.2-6.4 million, while penthouse owners will get at least $11.1 million each.

These prices are about 40-50 per cent above market values, said Credo. The expressions of interest exercise will close on May 25 at 2.30 pm.

Let's watch this deal. Fear or Greed? Either way, somebody will sway.

Source: The Business Times, 26 April 2007
Posted by Property Wizkid

Hotel site, anyone? URA beckons.
The Urban Redevelopment Authority has put another hotel development site on the Government Land Sales reserve list. The move comes on the back of a strong performance by the hotel sector, based on the latest Singapore Tourism Board figures.

STB revealed that hotels here generated $162.1 million of room revenue in March - 28 per cent more than a year earlier and the highest monthly figure since 1995. The average room rate increased 24.5 per cent in March from a year earlier to a record $194, surpassing the previous high in September last year. The average occupancy rate was 91 per cent in March, up 2.9 per cent from March 2006.

As such, demand for new hotel sites is expected to be high. The latest site on the reserve list is at the junction of Victoria Street and Jalan Sultan. The 73,424.9 square foot site has a plot ratio of 4.5 and a maximum gross floor area of 330,408.7 sq ft. Savills Singapore director of investments Steven Ming reckons that the land could be worth $500-550 per sq ft per plot ratio (psf ppr). In November 2006, the Hong Leong Group paid $520 psf ppr for a site in Mohamed Sultan Road.

There are now six hotel sites on the reserve list. There is also one site in Tanjong Pagar that is already open for tender. Apart from these, there are sites on the confirmed list with a hotel component, and more sites on the reserve list coming up later this year. Mr Ming believes that there should be demand for the sites. ‘We do not think that there are too many hotel sites given the current high average occupancy rate and expected strong growth in the number of tourist arrivals to Singapore,’ he said.

Savills estimates that a 400-450 room hotel is feasible on the latest site, with the cost of each room coming in around $350,000-400,000. ‘This is on the assumption that the winning developer builds a 4-star hotel on the site,’ Mr Ming said. Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean also thinks a 450-room hotel is likely.

On the supply of hotel rooms, Ms Chee said: ‘Sites released now will take three years before the hotel will be completed and this is in line to meet the expected increase in tourist arrivals.’
Going by STB’s figures, visitor numbers are growing. In March, Singapore welcomed 835,000 visitors, a 1.9 per cent increase from a year earlier and a record for the month.

Source: The Business Times, 26 April 2007
Posted by Property Wizkid

Another Hotel site by URA, what else?
The Urban Redevelopment Authority (URA) is calling for bids for a reserve site along Rochor Canal earmarked for hotel development. Located at the junction of Victoria Street and Jalan Sultan, the 99-year leasehold land parcel has a maximum permissible gross floor area of about 30,696 square metres, the URA said yesterday.

The site, near Lavender MRT station, measures 0.68 hectares and has a gross plot ratio of 4.5.
“Its dual frontage along the major thoroughfares creates an opportunity for a distinctive hotel development,” said the Government agency. The maximum building height permitted for the new hotel would be a part four-storey and part 25-storey building that does not exceed 153 metres.
Under the reserve list system, a site would be put up for tender only if a developer’s indicated minimum bid price is acceptable to the Government.

The Victoria Street land parcel is one of three new hotel sites listed in the Government Land Sales Programme for the first half of this year. Last week saw a New Bridge Road site put up for application, while another hotel site at the junction of Victoria Street and Jellicoe Road will be made available next month.

Source: Today, 26 April 2007
Posted by Property Wizkid

Time to trumpet huge profits!
Keppel Land, Singapore’s third-largest property developer by market value, on Wednesday reported a 72 per cent surge in first-quarter profit on stronger luxury home sales and higher office rents.

The firm, partly owned by government-linked conglomerate Keppel Corp, said it earned $62.5 million (US$41.4 million) net profit in the January-March quarter this year, up from $36.3 million in the same period last year. Keppel Land has a 40 per cent stake in K-Reit Asia, a property trust which has a portfolio of four office buildings in Singapore.

Source: The Business Times, 25 April 2007
Posted by Property Wizkid

Singland sings her earnings too!
Singapore Land, an office landlord that also owns a majority stake in the Marina Square development, yesterday reported a 25 per cent year-on-year jump in first-quarter group net earnings to $28.13 million.

This helped give a 30 per cent fillip to its parent United Industrial Corp’s net profit for the same period to $22.1 million. SingLand said its total revenue for the three months ended March 31, 2007 declined 12 per cent to $44.99 million due to the absence of $13.8 million sales recorded in the year-ago period for The Paterson and Stevens Loft residential projects, which were fully sold in 2006.

However, gross rental income increased 22 per cent to $43.7 million. SingLand owns a portfolio of office blocks including Singapore Land Tower, The Gateway and Clifford Centre and part of SGX Centre. SingLand said yesterday its 53 per cent-owned subsidiary Marina Centre Holdings (MCH) achieved a higher Q1 net profit.

The subsidiary fully owns the Marina Square mall and - under a deal announced late last month - the Pan Pacific Singapore hotel. It also has a 50 per cent interest in the two other hotels in the complex, Marina Mandarin Singapore and The Oriental Singapore.

SingLand’s Q1 earnings per share rose to 6.8 cents from 5.5 cents a year earlier. Net asset value per share at March 31, 2007 was $7.56, up six cents from the figure a year ago. UIC’s Q1 revenue rose 9 per cent to $81.1 million, chiefly due to a 19 per cent increase in rental income. Earnings per share rose from 1.2 cents to 1.6 cents. Net asset value per share rose from $1.77 at Dec 31, 2006 to $1.79 at March 31, 2007.

Source: The Business Times, 25 April 2007
Posted by Property Wizkid

1.7m sq ft of office space will be gone by end 2007!
With the current trend of old office buildings being sold for redevelopment, an estimated 1.73 million square feet of space might be taken out of the Central Business District (CBD) supply by the end of this year.

This will likely drive up office rentals and the capital values of those buildings, analysts said. At the 33-year-old Ocean Building owned by Keppel Land, about half of the tenants have already moved out to make way for a new office block.

That alone will take more than 400,000 square feet worth of space out of the market in the CBD.
This is in addition to old offices such as Asia Insurance Building, Straits Trading Building and Natwest Centre, all of which were sold for redevelopment last year.

“All in all, if you look at the total amount of office space that used to be in the market, close to about 900,000 square feet of space has been taken out of the supply, just over the last 12 or 24 months,” said Cushman & Wakefield’s managing director Donald Han. “And as the collective sale market gains momentum, some of these strata title office buildings might be taken out of the supply equation as well.”

To date, an estimated 500,000 sqft has been quashed over the last 12 months. With an encouraging economy, companies can afford a little more prestige and a reasonable price increase. However, likely mergers of Barclays & ABN Amro may relieve about 50,000 sqft into the market. No doubt it's only 10% but didn't I say it's a relief. http://www.propertybingo.com/News.aspx?id=40

United Industrial Corporation, which owns 78.8 per cent of UIC Building, has announced plans to acquire the 400,000-square-foot property. Analysts are also predicting that other buildings in the vicinity, such as Dapenso Building, Shenton House and Afro Asia Building, will be put up for collective sale. “It only means that there will be higher rentals. I think the balance of power will continue to be controlled by the owners and landlords. At the same time, we expect capital values to grow in tandem with the increase in rentals,” said Mr Han.

Prime CBD office rentals are forecast to rise by some 56 per cent to $18.50 per square foot by the end of next year, up from the current $11.80, Citigroup estimated. Like Diana Ross sings "Rush Rush".

Source: Channel NewsAsia, 26 April 2007
Posted by Property Wizkid

SMD(Small & Medium size Developers) takes action
Developer Hoi Hup Realty has bought a freehold residential site at Killiney Road for $115 million in a collective sale, the property firm marketing the project said yesterday. Colliers International said that the price paid by Hoi Hup for Killiney Apartments works out to $1,022 per square foot per plot ratio (psf ppr), including an estimated development charge of $500,000.

The site was sold through an expression of interest exercise. The 40,300 square feet site has a 2.8 plot ratio, which gives the site a gross floor area of 113,000 sq ft. The maximum building height is 10 storeys.

Hoi Hup could develop a 10-storey high condominium with 75 units with an average area of 1,500 sq ft each, said Colliers. Killiney Apartments is at present a 16-storey development with 44 apartments. Each of the 44 owners will receive between $2.5 million and $2.8 million from the sale, Colliers said.

The site was put on the market for the second time in March this year with a $115 million price tag.
The site was first offered for $94-$96 million, which works out to about $835-$852 psf ppr, in June 2006. Then, the site was put on the market through a public tender, but offers were not satisfactory, said Ho Eng Joo, director of investment sales for Colliers. ‘I think the market growth was not very strong yet (last June),’ said Mr Ho. ‘Since then, the market sentiment has changed.’

For the sale, following an expression of interest from Hoi Hup, Colliers negotiated with the developer to raise the price to $115 million, Mr Ho said.

Source: The Business Times, 25 April 200
Posted by Property Wizkid

Now, MAS makes a remark about rising home prices
Does it mean anything?
The Monetary Authority of Singapore (MAS) yesterday said home prices are expected to continue to grow this year - after climbing 4.6 per cent in the first quarter, the highest growth seen in seven years.

The gain, which has so far been greatest for the luxury market, could also filter down to other mid to high-end segments which could benefit from the steady stream of buyers who have sold their houses in en bloc sales, Singapore’s central bank said in its latest Macroeconomic Review.

MAS expects the property upturn to spill over to the construction and financial services sectors.
‘Contracts awarded have trended up steadily from 2003 to reach $16.1 billion last year, a level not seen since 2000. This is expected to translate into higher certified payments and value added for the sector in the near term,’ says MAS. ‘Indeed, the recovery of the construction sector continued in early 2007, underpinned by ongoing work in the residential segment.’

A number of ongoing major projects including the Marina Bay Financial and Business Centre, the integrated resorts and the downtown MRT extension, are also expected to further fuel the recovery in the construction sector.

The recent spike in raw material costs caused by disruptions to the supply of sand has not resulted in delays in building projects, MAS says. But the bank warns that in the future, new developments could be slowed or delayed if sand and concrete become more difficult to obtain. The large number of upcoming new commercial developments should also see more credit being extended to the building and construction industry, MAS says. This is expected to benefit the financial services sector.

And on the consumer loans front, while mortgage loan growth has remained tepid in recent quarters, some upside could be seen in the months ahead as the residential property uptick at the luxury end begins to spread to the broader market. MAS also says that the recent upswing in property prices will have only a small impact on inflation this year. This is mainly because substantial price increases in the near term should be largely confined to the upper and middle segments of the private residential market, MAS predicts.

‘On balance, the impact of rising property prices on consumer price index (CPI) inflation is likely to be modest, with the direct impact contributing only 0.1 percentage point in 2007, compared with the average of negative 0.2 percentage points over the past three years,’ says MAS.

So, what's the verdict? The government will not slow down growth in any way. So, prices, up, up and away!

Source: The Business Times, 25 April 2007
Posted by Property Wizkid

What happens when 2 gigantic office occupiers merge?
Mergers between banks usually involve ironing out kinks from consolidation and rationalisation.
But when Barclays and ABN Amro merge their Singapore operations, things should be a tad smoother for at least one reason - they already occupy contiguous areas in One Raffles Quay’s South Tower.

Office players are watching whether the two banks will give up any premises as they consolidate operations. Any space they return would help ease the office supply crunch. At One Raffles Quay’s 29-storey South Tower, ABN Amro occupies about 190,000 square feet from levels 21 to 26, and Barclays has 90,000 sq ft on levels 27 to 29. ‘It’s quite a quirk. A neater fate to consolidate, if they intend to do that,’ quipped an office market watcher. ‘They have a reasonably nice, ready-made solution, whether by fault or design.’

Agreeing, another observer said Barclays stands to enjoy rental savings at One Raffles Quay from merging with ABN Amro, since the latter was the first tenant to sign up there back in 2004 and has locked in lower rent - probably below $4 per square foot (psf) a month. Barclays signed a lease the following year and could be paying ‘$6-plus psf’.

On Monday, Barclays agreed to buy Dutch rival ABN Amro for about 67 billion euros (S$137.7 billion) in shares. The two banks said the merger will result in about 23,600 job losses, or just over 10 per cent of their combined workforce. The job losses comprise a net staff cut of about 12,800 plus about 10,800 positions to be off-shored to low-cost locations.

In Singapore, Barclays now has about 1,500 staff. ABN Amro has about 1,250, with plans to grow this figure to 1,500 by year-end, according to a BT article last month. Besides the 190,000 sq ft it occupies at One Raffles Quay, ABN leases 47,678 sq ft of backroom office space at Haw Par Technocentre in Commonwealth Drive.

Barclays’ other leased office premises besides One Raffles Quay are at Capital Square (more than 40,000 sq ft), The Atrium @ Orchard near Dhoby Ghaut MRT Station (about 80,000 sq ft) and Samsung Hub in Church Street (where Barclays recently signed a deal to lease more than 50,000 sq ft). ‘Most likely, the merged entity will keep at least two or three locations in Singapore for business continuity reasons,’ said the office-leasing head of a property consultancy.

If the duo do decide to give up some space at One Raffles Quay or elsewhere, this is expected to be snapped up quickly given the shortage of office space. Such arrangements could involve Barclays or ABN Amro sub-letting excess space with approval from the landlords or returning the space to the landlords.

For some of the locations, including One Raffles Quay, the rental profit from sub-letting would go straight into the landlord’s pocket, market watchers reckon. ‘Generally, that would be the current market practice,’ an office-leasing consultant said.

Source: The Business Times, 25 April 2007
Posted by Property Wizkid

Singapore Property News Upfront 6

Marina Area sets the pace for price surge!
Average monthly rent for offices in the Suntec, Marina Centre and City Hall area surged 37 per cent quarter on quarter in Q1 to $10.90 per sq ft, outstripping a 28 per cent gain in the Raffles Place area, says Knight Frank. The Suntec, Marina Centre and City Hall micro-market - which includes the office towers of Suntec City, Millenia Singapore and Raffles City - was ‘relatively under-priced compared with the Raffles Place area during the run-up in office rents last year’, according to Knight Frank director (business space - office) Agnes Tay. ‘So it’s a case of catching up now.’

Q1 2007 average rent in Raffles Place was $10.90 psf, with Republic Plaza achieving $13 psf, says Knight Frank. ‘The rental performance of Grade A office buildings in other micro-markets was similarly upbeat,’ it says. ‘Average monthly rent in the Shenton Way and Robinson Road area rose 19 per cent quarter on quarter to $7.90 psf, while that in the Orchard Road area increased 9 per cent quarter on quarter to $8 psf. Average Grade A office rents maintained a chronically strong upward trend, charging ahead another 21 per cent quarter on quarter to $9.80 psf.’ As supply of vacant Grade A space dried up, demand filtered down to Grade B blocks in the CBD. As a result, average rent for Grade B space jumped 24 per cent quarter on quarter to $8.30 psf in Q1. In the suburbs, the picture was mixed.

Office rents in the west, including Alexandra Rd area, remained largely unchanged after showing the biggest rise among suburban locations in Q4 last year. But the north such as Novena and Toa Payoh, and the east such as Tampines, posted quarter on quarter gains of 16 and 25 per cent to $6.10 psf and $5.30 psf respectively. Knight Frank predicts a full-year 2007 increase of 50-60 per cent in average prime Grade A office rents to $14 psf.

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The Q1 increase was 20 per cent. Island-wide, the average office rent increase will come in around 20-30 per cent, Knight Frank reckons.

Source: The Business Times, 20 April 2007
Posted by Property Bingoer

Elmira Heights at Newton goes for $279m
Ho Bee Investment’s latest $279 million or $990 psf per plot ratio acquisition of Elmira Heights at Newton Road has boosted the developer’s residential land bank to about 730,000 sq ft. This land bank can be developed into about 1.4 million sq ft gross floor area, or nearly 700 high-end homes, on five sites.

The price for the five sites adds up to $960 million, although Ho Bee owns only 50 per cent of two of these sites - the Seaview Collection condo plot on Sentosa Cove and Holland Hill Mansions - and 90 per cent of The Waterfront Collection plot at Sentosa Cove. Elmira Heights is ‘probably at the highest point in the Newton area’, reckoned Ho Bee chairman Chua Thian Poh.

Market watchers note that Ho Bee’s $990 psf ppr unit land price, which is inclusive of an estimated $22 million development charge (DC), is 50 per cent higher than the last benchmark in the area - $666 psf ppr including DC that Wing Tai paid about a year ago for Newton Meadows. Elmira Heights’ collective sale was brokered by DTZ Debenham Tie Leung. Its director Tang Wei Leng said owners of Elmira Heights’ existing 126 units will receive either $2 million or $2.4 million per unit, depending on the size of their unit. Industry observers reckoned Ho Bee’s break even cost for a new condo on the site could be around $1,400 to $1,500 psf.

DTZ executive director Margaret Thean said: ‘With its prime freehold location in District 11 and riding on Ho Bee’s signature of top-quality developments, the new development is likely to command an average of $1,800 psf under the current market conditions.’ Ho Bee said it plans to redevelop the 108,550 sq ft freehold site into a 30 storey twin tower condo with a total of about 170 apartments of about 1,800 sq ft and larger. The project will come with full-condo facilities.

‘The plan is to develop three and four-bedroom apartments and penthouses to cater to the growing demand for large units,’ the group said in a release yesterday. The project is slated for release next year. Separately, Ho Bee announced it had sold 28 of the total 29 villas on Paradise Island, Sentosa Cove, since last month. Over 50 per cent of buyers were foreigners. Prices ranged from $7 million to $18 million for each villa. On average, the price works out to about $1,100 psf of land area, nearly 40 per cent higher than the $790 psf average the group achieved earlier for its villas on the nearby Coral Island in late 2005/early 2006. Ho Bee has sold 20 of the 21 villas at Coral Island.

Ho Bee’s latest 99-year villas at Paradise Island have land areas of about 7,000 sq ft to 15,000 sq ft.

Source: The Business Times, 20 April 2007
Posted by Property Bingoer

A new Hotel site at New Bridge Rd
A prominent site for hotel development at the junction of New Bridge and Cantonment roads has been put on the reserve list of the Government Land Sales programme. It is the first of three new hotel sites to be released by the Urban Redevelopment Authority for the first half of 2007.

The site is 0.45 ha, has a plot ratio of 3.5, and maximum gross floor area of 15,687 square metres. CBRE Research executive director Li Hiaw Ho reckons a 315-room hotel can be built on it. Highlighting the proximity to Outram MRT station, and niche hotels like New Majestic Hotel and Hotel 1929, Mr Li believes potential hoteliers will likely develop a mid-tier outlet catering to business travellers who want a reasonably-priced hotel on the fringe of the CBD and tourists who want to be close to Chinatown.

In view of this, and the recent upswing in the hospitality sector, Mr Li believes the site could fetch between $450 and $480 per square feet per plot ratio or between $21.7 million and $23.2 million. Noting the increasing interest from foreign hoteliers, he pointed out that LaSalle Investment Management and the Park Hotel group have been actively acquiring sites here.

So far this year, LaSalle has bought the Swissotel Merchant Court and a 50 per cent stake in LC Development’s Changi Airport hotel project at Terminal 3.

Source: The Business Times, 20 April 2007
Posted by Property Bingoer

Houseboat - a new waterfront lifestyle?
The desire to be part of the coveted waterfront lifestyle on Sentosa Cove is the inspiration behind entrepreneur Masood Mohajer setting up a custom houseboat provider called Bespoke Marine. ‘I don’t want to pay through the nose for one of those waterfront units,’ says Mr Mohajer. So one solution for him was to build a boat to live on at the marina on Sentosa Cove which would enable him to be part of the lifestyle at a fraction of the cost.

His made-to-measure 64-foot boat will have three decks of living quarters with 2,250 sq ft of living space. Mr Mohajer’s beautiful new wooden home-to-be (which he will move into when it arrives next January) will cost him $850,000, inclusive of luxury interior furnishings and fittings. The idea to do this came from something which he knew well from his days working in Hong Kong. ‘My passion has always been boats, and crafting them was my hobby when I lived in Hong Kong,’ he says. Among the clients he built boats for then was the chairman of a top bank there.

It naturally followed that in the process of building a boat for himself, he saw a market for these so-called liveaboards. ‘By just talking to people and telling them what I’m doing with my houseboat plans, it seems like there are actually people thinking like there might be an alternative way of living and I thought if I could make a business out of it, why not do it?’

Mr Mohajer cites the example of the mid-1990s housing situation in Hong Kong when rentals started to go up and many expats were putting their housing allowances into liveaboards. He sees the same situation emerging in Singapore and thus has confidence that more people may be convinced to move into houseboats.

Bespoke Marine, which has a stand at Boat Asia, expects the main market to be Singapore and region-based expatriates initially but notes there has been more interest from younger Singaporeans seeking an alternative lifestyle. The boats are built at Hong Kong’s only remaining builder of customised houseboats, Sun Hing Shing, which has been building them since the 1960s and has built over 400 boats so far. The boats are so highly customised that they can do just two wooden boats a year at their yard in Hong Kong while a sister yard in China can make about 10 of the easier-to-make fibreglass boats annually.

Prices are expected to average around $1 million and will include a full range of furniture and fixtures as well as household amenities like a fridge and washing machine.

Source: The Business Times, 20 April 2007
Posted by Property Bingoer

The avalanche begins for some resale projects
New property launches are raising the asking prices of existing developments around them by as much as 10 to 50 per cent within weeks. The most recent example is neighbouring developments Reflections at Keppel Bay and Caribbean at Keppel Bay. Units at Caribbean - which received its Temporary Occupation Permit in 2004 and is now fully sold - were selling for around $1,000 per sq ft in the secondary market in the first quarter of this year.

But since Reflections was launched this month at an average price of about $1,900 psf, asking prices for Caribbean have surged to $1,200-$1,500 psf. Property agent Andrew Tan of DTZ Debenham Tie Leung says most of the buyers he has seen are investors who expect prices to keep rising for the next few years. ‘They plan to sell it in two years and even if the price goes up by $100 psf they will make money.’

Another agent, Kenny Tan of ERA, who is also marketing units at Caribbean, says prices have been edging up for a few months. ‘The prices for Reflections have supported the increase,’ he said. Savills Singapore director of marketing and business development Ku Swee Yong says the same spillover effect is happening elsewhere. In traditional prime areas, transacted prices for new developments like Orchard Residences, Suites @ Cairnhill and Trillium have hoisted prices of surrounding developments. And in some areas outside the prime districts, new launches appear to have an even bigger impact.

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Mr Ku says that on the East Coast, the launches of The View @ Meyer and more recently Seafront on Meyer - at prices averaging $1,500-$1,600 psf - have boosted prices of existing developments like the 10-year-old The Makena.

According to Savills’ analysis of available data, the average price for The Makena over three months from December 2006 to February 2007 was about $834 psf. Mr Ku says prices have since passed $1,000 psf. Indeed, a check of advertisements in The Straits Times Classifieds recently revealed that some owners are now asking for $1,300 psf.

Asking prices are not the same as transacted prices, but Mr Ku says valuations that factor in prices of recent transactions in the same area - for old or new property - appear to support higher asking prices. ‘The valuation of an older development is dragged up by association,’ he said. Jones Lang LaSalle national director (head of valuation advisory services, capital markets) Tan Keng Chiam said: ‘Empirical evidence has proved that sale prices of new units will influence the value of the neighbouring old developments, be it up or down.’

There are several methods of calculating valuations, such as direct comparison and income. Mr Tan says that with direct comparison, a valuer has to understand the dynamics of the market and judge the appropriate discount for an older development against a newer one. Factors include age, condition, location, amenities and even design. The income is based on rental return under current market conditions. ‘For older developments, with the current rental being known, one can work out the net yield based on the transacted prices,’ Mr Tan said.

‘Such yield, when applied to the new development, will present a level of rental which one has to decide is realistic and achievable when the development is completed.’ Saying that valuations sometimes require a ‘reality check’, Mr Tan said the income approach can be seen as the ‘rational approach’. Ideally, of course, the market finds its own level and it is supported by fundamentals. Colliers International associate director (residential) Vincent Chong believes the spike in some prices is not a matter of under or over-valuation, but more of demand and supply.

‘Asking prices for residential developments are based on how the market is performing at the time of the launch,’ he said. ‘If there is no demand, a project will not sell even if the asking price is very low. Conversely, when demand is high, chances are, benchmark price records are then set - for example, Sentosa Cove and Reflections. ‘When such new launches do well, more often than not the demand will then spill over to the neighbouring properties, and as such, prices for older developments will be re-adjusted upward to reflect the market demand.’

Source: The Business Times, 20 April 2007
Posted by Property Bingoer

What happens when residents refuse to move in an Enbloc Sale?
A family whose four members are refusing to move out of their home after it was sold en bloc more than a year ago will face crunch time on Monday. That is when the property developer that bought their estate, Lincolnsvale in Surrey Road, will start legal action against Madam Ching Siew Yin and her husband, who is known only as Mr Gan.

Media reports this week said Madam Ching and her family had not been officially consulted or notified of the collective sale and that she had not known the transaction had gone through. The family - one of six households that did not agree to the proposal to sell en bloc - were quoted as saying they found out about the sale only when their neighbours started moving out last month.

Sim Lian Land, which bought the condominium in November 2005 and is ready to start demolishing the estate, said attempts to contact Madam Ching, a housewife in her 40s, and her husband were not successful yesterday. Said Sim Lian executive director Diana Kuik: ‘We’ll try again (today) and on Saturday. But if they still refuse to discuss this with us, we’ll start legal proceedings on Monday.’ The Straits Times understands that this could include an eviction order. Sim Lian paid $50.3 million for the 23-year-old estate, which works out to between $1.24 million and $1.87 million for each owner of the condo’s 39 units.

The deadline for Lincolnsvale residents to vacate was last Tuesday, but Madam Ching, her husband and their two sons are staying put. The Straits Times understands that Madam Ching believes her family are still the rightful owners of the apartment as they have not signed any transfer document. The law firm that handled the Lincolnsvale sale, Phang & Co, said a special visit was made to the couple’s unit to persuade them to sign title transfer documents.

They did not sign but the Strata Titles Board authorised representatives to sign on their behalf, which it has the power to do. Madam Ching told The Straits Times last night that she had known there was a collective sale taking place, but not until early last year, when the sale had already gone through.

The family has owned the unit for 10 years but only moved in last March. The couple said that they are prepared to talk to Sim Lian. ‘If they want to talk to us, let’s sit down and talk,’ said Madam Ching’s husband, Mr Gan. ‘If they want to talk to us on amicable terms, we’ll have some kind of dialogue and we can try to reach a solution.’ As to what kind of solution would be satisfactory, Mr Gan said it was too early to tell. But for now, the family is staying put.

Source: The Straits Times, 20 April 2007
Posted by Property Bingoer

Ho Bee still in bullish buying spirit
Ho Bee Investment made two big splashes yesterday - it paid $279 million for a freehold site near Newton Road and announced that one of its Sentosa Cove projects has almost sold out.

Its purchase, via a private treaty, was the 126-unit Elmira Heights, where owners will each get $2 million or $2.4 million, depending on the size of their units. Ho Bee paid about $990 per sq ft (psf) of gross floor area, a new high for the Newton area, according to DTZ Debenham Tie Leung which brokered the sale.

The last collective sale deal in the area was in May last year when Wing Tai Holdings bought Newton Meadows for $660 psf per plot ratio. The Newton area’s prices have since shot up as new developments such as Newton One set new benchmarks. Ho Bee plans to build two 30-storey towers with 170 apartments of about 1,800 sq ft each, on the Elmira Heights site. It could sell them for $1,800 psf on average, said DTZ Debenham Tie Leung.

In another announcement, the developer, known for its Sentosa Cove projects, said it has sold 28 of the 29 villas on Paradise Island in the gated enclave. Buyers - more than half of whom were foreigners - forked out an average of about $1,100 psf during a three-week preview that started last month. The price is about 40 per cent higher than that of its first Sentosa development, Coral Island, early last year. The villas ranged from $7 million to $18 million each.

Source: The Straits Times, 20 April 2007
Posted by Property Bingoer

Ascendas dive into India's business parks
Ascendas, one of Asia’s largest suppliers of business space, yesterday said it will develop two IT business parks in India that will cost some US$375 million in all. Ascendas will develop the IT parks - one in Nagpur and the other in Pune - over the next 5-7 years through joint ventures (JVs) with two government agencies. The IT park in Nagpur, which is estimated to cost about US$235 million, will be developed together with with the Maharashtra Airport Development Company (MADC).

Ascendas will take a 89 per cent stake in the project and MADC the remainder. The IT park in Pune, on the other hand, is pegged at about US$140 million. Ascendas will take a 76 per cent stake in the park, while its JV partner Maharashtra Industrial Development Corporation (MIDC) will take the rest. The two parks will bring Ascendas’ India asset size to over US$850 million.

The company already had assets of about US$500 million in the country before the latest two deals, said a spokeswoman. And the amount could grow as Ascendas eyes more cities in India for expansion. Ascendas chief executive Chong Siak Ching said that the company will continue to explore more destinations, including Chandigarh, Delhi, Jaipur and Kolkata.

The two projects will be developed in phases depending on market needs, Ascendas said. The parks are expected to create a total of 7 million sq ft of top-end IT space with employment opportunities for over 70,000 people when fully completed. Both parks are located within government-promoted and approved special economic zone (SEZ) areas, Ascendas said. In Pune, the 2.5 million sq ft park will be developed in five phases. Construction of the first phase - comprising 500,000 sq ft - will start in the second quarter of 2007 and is expected to be completed by mid-2008.

This phase is expected to employ about 5,000 IT professionals. In Nagpur, the 4.5 million sq ft IT park will be built in six phases. Construction of the first phase of 500,000 sq ft is also expected to start in the second quarter of 2007, and be completed in 18 months. Phase 1 can accommodate some 5,000 professionals. ‘Ascendas will have an even larger footprint across India to offer customers more options for business operations and expansion,’ said Ms Chong.

Source: The Business Times, 19 April 2007
Posted by Property Bingoer

Leonie Hill begins its ascend
Property developers Koh Brothers and Heeton Holdings yesterday announced their new high-end project in the Leonie Hill area, saying that they will continue to look for more land sites in the prime districts, both individually and as a team. The 53-unit The Lumos could be launched at between $2,500 and $3,000 per square foot (psf), in line with prices that apartments in other projects in the area are fetching, the two companies said.

The tentative launch date is set for around the end of next month. Twelve out of 44 units in Soilbuild’s Leonie Parc View have been sold before the project’s launch, through private placements to buyers from Hong Kong and Indonesia, sources told BT. The units fetched an average price of $2,700 psf.

Apartment sizes range from 2,013 sq ft to about 6,600 sq ft for the largest penthouse. Leonie Parc View will now be marketed in Indonesia and Hong Kong through roadshows over the next two weekends, BT understands. For The Lumos, Koh Brothers and Heeton, who each hold a 50 per cent stake, bought the site in April last year for $79.2 million, or about $880 psf per plot ratio including a development charge of about $3.9 million.

‘I think now is a good time and we are ready, so we want to launch it,’ said Koh Brothers chief executive Francis Koh. ‘The property market is quite buoyant and the demand is there,’ he added. However, with the large number of upmarket projects launched lately, there is a need to distinguish The Lumos, Mr Koh said.

He aims to do this through the project’s ‘unique’ design and facilities such as a sky garden for each unit. The 36-storey project will feature iconic architecture evolved from the idea of a chandelier. Units will be equipped with state-of-the art interior fittings to cater to the project’s target market. The designer fittings, as well as the increased price of sand, has pushed the project’s breakeven cost to $1,200-$1,300 psf, said Mr Koh. Units in the project will range from from one-bedders of 635 sq ft to two penthouses of 6,000 sq ft each.

The majority of units will be three and four-bedders of 1,700 sq ft and 3,300 sq ft. The Lumos is the second time that Koh Brothers has joined hands with Heeton. The two companies jointly developed the Sun Plaza shopping mall next to Sembawang MRT station. And more projects could follow as they could bid for further sites together, said Danny Low, executive director of Heeton Holdings.

Both developers still intend to focus on the prime districts of 9, 10 and 11 for land acquisitions, although they are also interested in mass market sites in suburban areas because of recent signs that the mass market is picking up. For Koh Brothers, Mr Koh said that with land cost in the Orchard Road area increasingly expensive, the company will look to build up its land bank through sites in the Bukit Timah and Holland Road areas, where there is still a potential upside for prices. Koh Brothers’ stock closed unchanged at 43 cents yesterday, while Heeton’s shares fell one cent to close at 71 cents.

Source: The Business Times, 19 April 2007
Posted by Property Bingoer

Singapore Property News Upfront 5

Enbloc shows the ugly side of greed

As more and more Singaporeans are discovering first-hand, this is the world of en-bloc sales — where neighbours become millionaires or bitter enemies overnight, and a pot of gold awaits, literally, at the cost of your home. What began as a contagion two years back, as property analysts reckon it, has reached fever pitch. As of mid-March, 17 en- bloc sales have been sealed this year, a record $2.43 billion in transactions, according to Jones Lang LaSalle’s preliminary data.

That’s nearly twice the $1.3 billion generated in the first three months of last year, and more than the $2.41 billion for the whole of 1999, the last boom period for en-bloc sales. With a typical deal today netting home-owners a million dollars more than if they had sold their unit on the open market, it’s no wonder Singaporeans are rushing impulsively to cash in. After eight years of watching the property market chug along sluggishly, who can blame them?

“Quite frankly, no one — consultants, property agents or the Government — expected this boom,” said Dr S K Phang, a lawyer experienced in handling collective sales. Yet not everyone succeeds in cashing in. Last year, 25 to 35 per cent of more than 100 en-bloc attempts reportedly fell through, or are still on the market after failing to hit reserve prices.

The neighbourly squabbles begin when residents refuse to give up their home for any price, or will not settle for less than what they think it’s worth. At Farrer Court, a point-block unit bought for $500,000 in 1993 could now fetch a cool $2 million in a proposed collective sale. But Ms Lucy Chong, a retiree in her 50s, is doing everything she can to stop it. “Even if I get the money, can you find me a place as good as this, in an area as good as this?” she asked.
Her neighbour, an 84-year-old Eurasian living on her own, is “frightened” by the hassle of looking for a new place should the majority back the sale.

But a 72-year-old resident at Clementi Park — a 26-year-old estate where an en- bloc attempt is also underway -— sees it differently. “We should grab this chance. If you don’t sell now, you will find that as the estate deteriorates, you won’t get such good prices.” Help is on the way. It’s an issue that naturally polarises emotions and people, but some feel the insufficient guidelines and procedures for en-bloc sales aggravate the problems.

This has not gone unnoticed by the Government, which is planning to amend the law on en-bloc sales. It began a public consultation process this month on four proposed changes aimed at bringing greater equity and fairness to the process. Currently, a sale can proceed if there is approval from owners controlling at least 80 per cent of share values in estates 10 years or older, or 90 per cent in younger estates. With the change, majority consent will be defined in terms of the number of units owned as well.

The Strata Titles Board will be given the powers to step in and increase sale proceeds for minority owners with valid objections. It will be empowered to issue guidelines on the evaluation of claims for financial loss. In addition, sales committees — which are currently formed freely among residents — can only be elected at extraordinary general meetings (EOGM) convened by management corporations.

Are these changes enough? Dr Phang felt a distinction should be made between investors who own the units and actual owner-occupiers. While the owners might make a tidy profit in absolute terms, the huge sums that developers pay them would drive property prices up as a whole — and these displaced owners have to fork out big money for their new homes too. Said Dr Phang: “A bona fide home owner should be offered an exchange… if you want me to get out of my home, I want a unit back with the same comparable size (after redevelopment).”

Clementi Park resident Dr Patricia Wong argued that it would be “difficult” to garner the 25 per cent support for the EOGM to take place. But many owners embroiled in en bloc “wars” certainly want to see more legislation in place of the Government’s largely “hands-off” approach. The Management Corporation’s (MC) role in an en bloc attempt is one bone of contention. At Clementi Park, the MC has been a stumbling block to the pro-tem sales committee, said committee member Mr K C Lim. The appointed property agent has been stopped from going door-to-door, and is hindered in reaching out to residents, he added.

But at Farrer Court, the MC’s endorsement of the en bloc process has proved a thorny issue with residents like Ms Chong. “The involvement of the MC in any collective sales proposal and the pro tem sales committee’s obligations to the residents must be clearly spelt out. There must be more transparency,” she said. Some residents also feel that sales committee should include those not keen on the sale, to ensure this group is not cut off from the process. But others, like Dr Phang, said it would only lead to deadlock for the committee, which has to work within a set timeframe.

He added: “At the end of the day, the Strata Titles Board can reject a sale if it the process was improper.” Overall, Chesterton International’s research director Colin Tan thought the amendments would address a fundamental flaw in the current approach. “What the Strata Titles Board is doing now, is to come in at the start and address the concerns of the minority owner – rather than wait till the end and after much unhappiness.”

For example, there are the owners who have recently spent huge amounts on renovating their homes. Currently, the majority owners determine the distribution of sale proceeds and renovation expenditures are not taken into account as a financial loss incurred. To add insult to injury, minority owners say, they are forced to bear the lawyer and agent fees for the collective sale.

Boom today, gone… when? While the booming property market — buoyed by a rush of foreign funds — shows no sign of abating, the en bloc rush could ironically be head for a slowdown, as more residents hold out for higher payouts. Said ERA property consultant Stanley Koo: “They track similar developments and look at other areas, but they don’t take into account their own location. The property boom will go on for at least one or two more years, and if owners are more realistic, the en bloc frenzy can still gain momentum.”

Dr Phang agreed that the boom would last a while yet, with the economy doing well. “For example, the civil service just got a pay rise. All this money will flow into the market. But when times get bad, things will spiral downward very quickly.” Yet it is precisely the notion that “the good times will not last” that feeds the en bloc frenzy. As Clementi Park’s Mr Lim puts it: “If we miss out on this property boom, we don’t know when the next one will come around.”

Source: WeekendToday, 14 April 2007
Posted by Property Wizkid

12% discount on Casa Merah encourages sales

NTUC Choice Homes and Wing Tai began selling their Casa Merah condo near Tanah Merah MRT Station yesterday at a net average price of $588 per square foot, after a 12 per cent discount. Yesterday’s preview was open to union members, business associates of the developers and members of the public who registered interest in the 99-year leasehold project. CB Richard Ellis is marketing the property.

The property is being developed through a joint venture that is 70:30 owned by NTUC Choice Homes and listed Wing Tai. It comprises two-bedders, three-bedders, three bedroom-with study and four-bedroom apartments. The cheapest two-bedder on the ground floor costs $533,000, while prices of three-bedroom apartments start from $720,000. Both prices are after discount.

Source: The Business Times, 14 April 2007
Posted by Property Wizkid

IMF says property prices in Asia-Pacific intact

The rapid run-up in housing prices across the Asia-Pacific of late may continue for some time yet, but by and large, prices have not gone grossly out of line with economic fundamentals, according to an International Monetary Fund (IMF) study.Housing price data in 12 regional economies does point to pockets of ‘potential concerns’, but elsewhere the price rises are broadly in line with income gains, says a chapter on housing prices in the IMF regional economic outlook for Asia and the Pacific.

‘While housing prices have been rising more rapidly than inflation, most countries in Asia are not experiencing unusually rapid housing price hikes,’ the report says. ‘For the 12 economies for which data are available, real housing price increases averaged 4.5 per cent during 2002-06, but the median was substantially lower, at just over 3 per cent.’ Three countries - China, India and New Zealand - saw real annual price rises of more than 8 per cent over the period, it notes. And in some cases - Hong Kong, Taiwan and Thailand - recent housing price increases follow extended periods of declines. ‘In such cases, it is plausible that any rise in housing prices may be a welcome signal for increased investment in the sector.’

The study also found that housing prices have outstripped income gains in about half the cases, but have done so to a significant degree only in Australia and New Zealand. And housing prices have been relatively tame compared with other asset prices, the report says, adding that apart from Australia and New Zealand, annual housing price hikes have been dwarfed by domestic stock market gains during 1999-2006. ‘Of course, this alone does not prove that housing price gains are not problematic, since many equity markets have been quite buoyant.’

Across the region, Australia and New Zealand are the clearest cases where housing price hikes appear large, not just in real terms but also relative to rents or household incomes, it says. In several economies - notably China, Hong Kong, India and Korea - localised indicators point to significant price increases. Asia’s housing markets will likely remain on policy-makers’ radar screens for some time, the IMF says.

‘Housing prices have been rising more rapidly than inflation, and this may continue for some time as regional incomes grow and financial markets deepen. ‘Moreover, as global liquidity remains abundant, the potential for large run-ups in credit and asset prices to affect overall inflation or financial or macroeconomic stability cannot be ignored.’
But at the same time, it is important to distinguish between potentially problematic housing price rises and those that are more localised or can be explained by real supply and demand factors, the report adds.

Source: The Business Times, 14 April 2007
Posted by Property Wizkid

Hong Leong wrap up One Meyer Rd

Hong Leong Group is said to have wrapped up a deal to buy only one of the adjacent Meyer Road properties owned by Della Suantio Lee of Lee Foundation, instead of both properties as indicated under an earlier conditional deal. Hong Leong is said to be paying about $200 million for the freehold property, which has a land area of about 115,300 sq ft. The price works out to about $760 psf of potential gross floor area, including development charges (DC), according to industry observers.

This is a new record for land in the Meyer Road location - surpassing the previous record set in early 2000 when Viewpoint Condo was sold to Keppel Land for $598 psf per plot ratio (psf ppr) including DC. A couple of months before that, in November 1999, DBS Land bought First Mansion and Meyer Tower nearby for about $580 psf ppr.
The site that Hong Leong has bought is zoned for residential use with a 2.8 plot ratio - the ratio of potential maximum gross floor area to land - and a maximum height of 36 storeys.

Hong Leong could redevelop the site into a plush condo boasting sea views, with about 220 units assuming an average unit size of around 1,500 sq ft. Assuming a land price of about $760 psf ppr, Hong Leong’s breakeven cost could be about $1,200 to $1,300 psf. Industry observers say a new condo in the choicest stretch of Meyer Road should be able to sell for about $1,800 psf on a project-average basis.

Savills Singapore is believed to have brokered the sale of the site by Dr Lee, who is the wife of Lee Seng Gee, the eldest son of the late China-born philanthropist Lee Kong Chian. Her move to sell only one of their two Meyer Road sites means the couple are keeping the bungalow they have lived in for many years. The next-door site being sold to Hong Leong has another house now standing on it, but the new owner will tear this down for redevelopment. The two sites have a combined land area of about 212,300 sq ft.

Hong Leong Group is experienced in the Meyer Road area. It developed The Atria at Meyer and The Makena during the 1990s property bull run. In September 2005 it bought Eastern Mansion farther up Meyer Road, closer to Amber Road, and an adjoining site at a combined unit land price of about $410 psf ppr.

Source: The Business Times, 14 April 2007
Posted by Property Wizkid

Finally, UIC buys up UIC Bldg

United Industrial Corporation (UIC) yesterday announced it had inked a deal to buy UIC Building at Shenton Way under a collective sale that prices the property at $600 million, or $870 per square foot of potential gross floor area inclusive of development charge and differential premium to top up the site’s lease to 99 years.

The mainboard-listed company said subsidiary proprietors of the building who own at least 80 per cent of share values have accepted UIC’s offer to purchase the property yesterday. The subsidiary proprietors include UIC and its fully owned unit, UIC Development (Pte) Ltd, which together hold 78.8 per cent of share values in the property.

Analysts note the net real acquisition cost to UIC for purchasing the 21.2 per cent of the property that it does not already own works out to about $127 million. CB Richard Ellis brokered the deal. The collective sale is subject to approval from the Strata Titles Board and the obtaining of a Qualifying Certificate from the Controller of Residential Property, if applicable.

UIC is said to be planning a twin-tower residential development on the site. ‘But looking at the way office values are shooting up, I wouldn’t be surprised if they changed their minds and redeveloped the site into a new office development instead,’ said a market watcher. According to a BT report earlier this week which said UIC was poised to buy the rest of the building that it does not already own, the building had attracted three bids - from UIC, City Developments and Wing Tai in an expression of interest exercise which closed on Feb 8.

Analysts reckon that UIC would be in a better position to pay a higher price to the other owners as, unlike rival developers, its outlay will be lower since it already owns 78.8 per cent of the building. Under Master Plan 2003, the 72,960 sq ft site is zoned for commercial use with an 11.2+ plot ratio and qualifies for a 10 per cent bonus plot ratio. The plot has a 35-storey height limit.

The maximum potential gross floor area of the site works out to 898,867 sq ft inclusive of the bonus plot ratio.
A full-residential redevelopment scheme could result in about 600 units averaging 1,500 sq ft being built on the site, or 750 apartments assuming a smaller average unit size of 1,200 sq ft. Of course, any redevelopment scheme will have to be approved by the authorities.

Source: The Business Times, 14 April 2007
Posted by Property Wizkid

Bishops Walk worth $130m

The tender for the collective sale of Bishops Walk, a freehold development of 25 townhouses in the Bishopswalk/Bishopsgate area, is said to have drawn a top bid from a Kajima Overseas Asia unit.
The bid is believed to be more than $130 million or $1,500 per sq ft of potential gross floor area including an estimated $15.6 million development charge.

The 69,189 sq ft site is zoned for residential use with a 1.4 plot ratio and a height limit of five storeys.
As Kajima is in the construction business, it should achieve a more economical breakeven cost for the new project it will develop, market watchers reckon. Their breakeven estimates for a five-storey condo range from about $1,900 to $2,000 psf.

The District 10 site - in the prestigious Bishopsgate and Chatsworth Good Class Bungalow area - is close to the Indonesian and Egyptian embassies. It is not known if Kajima will tie up with a partner for the project.
The tender for Bishops Walk, conducted by CB Richard Ellis, is said to have drawn seven or eight bids. Industry sources say that besides Kajima, contenders included Napier Properties, which bought Eng Lok Mansions last year, and BS Capital.

Source: The Business Times, 13 April 2007
Posted by Property Wizkid

Malaysia boost property sector

Prime Minister Abdullah Ahmad Badawi on Friday unveiled measures aimed at reducing bureaucracy for housing construction in a bid to boost investment in Malaysia’s sluggish property sector. Key among the measures was a move to speed up approvals by local councils for development applications from the present three to five years, to just six months. ‘Shortening the timeframe will have a positive impact on the construction industry, investors and business people, who have long waited for less bureaucracy and the lowering of hidden costs in Malaysia,’ said Mr Abdullah. ‘Today’s initiatives will also contribute to improving the performance of the property and construction sectors,’ he added.

The approval time will be further reduced to four months for certain projects such as those involving foreign investment, and government projects, he said. Mr Abdullah said the initiatives would see an improvement in the performance of civil servants, often accused of being inefficient and slow. ‘If the services that are provided can be sped at the local council level, more than 70 per cent of the complaints and grouses from investors, businessmen, consumers and the public concerning the public sector will be answered,’ he said.

Other measures are aimed at encouraging developers to adopt a ‘build and sell’ strategy, where properties are only sold once completed, in order to protect investors from developers who run out of funds before construction is finished. Malaysia in recent months has announced measures to boost investment in the property sector, which collapsed during the 1998 Asian financial crisis and has seen a lacklustre recovery.

On April 1, the government removed capital gains tax on property, while in December, it relaxed property ownership rules to allow foreign nationals to buy high-end residential properties without government approval.

Source: The Business Times, 13 April 2007
Posted by Property Wizkid

Singapore Property News Upfront 4

Eco-friendly - the way to go. And CDL takes pride in winning 2 awards.

City Developments Ltd (CDL) has been conferred two BCA Green Mark Platinum awards by the Building and Construction Authority (BCA) for 2007. CDL won the awards for its City Square Mall commercial development and its Oceanfront @ Sentosa Cove residential project. It is the first private developer to get a Green Mark Platinum award. Previously they have gone to public sector developments.

The 700,000 sq ft City Square Mall is a prototype eco-friendly, community-friendly mall projected to use almost 40 per cent less energy than a standard design. A project must achieve 30 per cent energy and water savings and incorporate environmentally-sustainable building practices and innovative green features to be in the running for a Green Mark Platinum award. CDL has gained more green mark awards than any other private developer - 14 so far.‘
Minimising the impact of our business on the environment has always been an integral part of CDL’s corporate mission,’ said managing director Kwek Leng Joo. ‘We have been adopting the green building approach since 2001 and we are glad that our efforts are in line with the government’s vision to be a socially responsible, environmentally conscious global city.’

Source: The Business Times, 06 April 2007
Posted by Property Wizkid

Mad rush; is the 90 Property Rush coming back?

Demand for a condominium off Upper Thomson Road has been so overwhelming that the units have been balloted out - the first time such a move has been needed for private homes in more than 10 years. The dramatic rush, which even caught the marketing agents by surprise, was triggered when the 95 units in Thomson V were released at 3pm on Tuesday. Within four hours, more than 300 cheques had poured in, despite minimal advertising.

Marketing agent Huttons Real Estate Group opted to ‘draw lots for the units that had more than one interested buyer’, said its project director, Ms Peggy Ngiam, told The Straits Times. ‘The buyers had already identified the units they wanted, and we had to draw lots for most of the apartments.’ The ballot was a further indication, like the recent overnight queues and blank cheques, of the intense demand for new homes, said property experts.

‘It is yet another piece of the puzzle to show that the market has got a demand not filled by the current home supply,’ said Mr Ku Swee Yong, the director of marketing and business development at consultancy SavillsSingapore. Balloting for apartment units has not been been seen here for over a decade but the practice is unlikely to become more widespread, said Mr Peter Ow, the executive director of residential marketing at Knight Frank. ‘It is a very orderly and very fair sales method, but it is unlikely that more developers will start using it because the prices have to be fixed beforehand,’ he added. In a rising market, many developers choose to release units in phases and raise prices progressively for each successive phase.

Mr Ow said the first project to be balloted here was the Merasaga, near Holland Village, which was snapped up within a day in 1993. Buyers had to draw lots for queue numbers. The object of the latest frenzy, Thomson V in Sin Ming Road, comprises two four-storey residential towers, one freehold, the other 99-year leasehold. It is part of a mixed project that also has 60 shops still up for sale. It is being developed by boutique firm Macly Group, which also developed Soho 188 in Race Course Road.

The keen interest for Thomson V was ‘a bit surprising’ because of its relatively high per sq ft (psf) prices and limited pre-marketing activities, said Ms Ngiam. The development’s 71 freehold units went for an average of $880 psf, while the leasehold units fetched $760 psf on average. The highest price achieved was $989 psf. There are no comparable new projects in the vicinity, but a market watcher said he would expect to pay slightly more than $700 psf for a new freehold development in the area.

However, Thomson V’s units are unusually small, which means they would still be affordable. The apartments, mostly one-bedroom units, range in size from 355 sq ft to 1,098 sq ft. A typical unit would cost about $377,000. But there was also little buzz about the property. Huttons had placed a few four-line advertisements in the classified ads, but project brochures were distributed to property agents only last Friday.

And Thomson V’s showflat and price lists were only made available on Tuesday afternoon itself. Mr Ku of Savills said the strong demand was in part because there are few projects on the market with small units catering to singles or retirees. There have also not been many new launches in this area or within this price bracket, he added.

See www.propertybingo.com for more news in brief, if you wish.

Source: The Straits Times, 06 April 2007
Posted by Property Wizkid

Sandy, can't you see? What you're doing to me?

With prices of sand, granite and concrete now costing more than twice what they used to be, home buyers and home owners should expect to pay more for renovation and building work. But exactly how much more will depend on the deal that they signed with their contractor and their relationship with him. The price hike was triggered by Indonesia’s ban on the export of land sand on Feb 5, which led to Singapore turning to countries further afield for its supplies.
A few weeks after that, Indonesia detained barges carrying granite to Singapore, disrupting the supply of another basic construction material.

The price of sand used to be roughly $20 per tonne. Now, the Building and Construction Authority (BCA) is releasing sand from its stockpile at a price of $60 per tonne, and granite at $70 per tonne to stabilise supply. The price of concrete - which is made with sand, cement and granite - has risen from about $70 per cubic metre to about $200 now. As a result, the cost of renovating a five-room flat has risen by about $1,000, estimates renovation contractor Lim Ah Bah, who is also an adviser to the Singapore Renovation Contractors and Material Suppliers Association. To build a $2.5 million bungalow from scratch will require more raw materials - with the increase in cost weighing in at about $100,000.

But whether a home owner bears the cost will depend on factors like timing. Property owners who signed fixed-price deals with their contractors before the disruptions started are legally not obliged to pay more. Still, some like engineer Siow Phek Chuan, 28, chose to do so out of goodwill. Mr Siow hired a renovation firm in early February to do up the executive flat in Sengkang he had just bought.

A few weeks later, his contractor, Mr Lim , approached him for help, as the price of sand needed for the $35,000 project had risen by about $750. Mr Siow offered to pay an extra $300 anyway. He told The Straits Times: ‘My renovation would be done up better if I have a very good relationship with my contractor. A few hundred dollars is not a big issue.’ However, the cost increase is not dealt with so amicably in every instance.

According to a Straits Times check with more than 10 renovation contractors and building contractors, it is more common for home owners and developers who had sealed fixed-price deals before the hikes to refuse to pay a single cent more. With Singapore’s current building boom unlikely to slow, the big question now is who will ultimately pay the bill. BCA estimates that the increase in prices of sand and granite will raise total construction cost of building projects by 7 per cent on average.

This works out to a 2 per cent increase in development cost - of which construction cost is one component. And this will eventually filter down to home buyers and home owners. Renovation contractors and construction firms polled say they are now more likely to push for a clause in their contracts that takes into account the fluctuation of raw material prices. If that is not possible, they will tender for jobs at higher prices to prepare for similar hikes in the future.

Private developers mostly stayed silent when asked whether the future cost increases would be passed on to home buyers, but analysts reckon that the answer is almost certainly a yes. According to property firm Knight Frank’s director of research and consultancy, Mr Nicholas Mak, most of the increase in cost can be easily passed on to consumers in a booming private property market. And this sector has been anything but sluggish over the previous year, with private home prices growing 4.6 per cent between January and March, and 10.2 per cent for the whole of last year.

Before the ban, Singapore imported about six to eight million tonnes of sand from Indonesia annually. Singapore also imports about 10 million tonnes of granite aggregate from Indonesia a year. Now, contractors are tapping supplies in countries like Malaysia, China and Vietnam. Contractors also say they are getting frequent offers from brokers or ‘middlemen’ hoping to make a quick buck by trying to hook them up with suppliers from new sources such as Myanmar, Cambodia and even Australia.

Source: The Straits Times, 07 April 2007
Posted by Property Wizkid

In booming times like this, SLA has a rare soft touch

Twenty-seven sub-tenants in Dempsey Road are uncertain about the future of their businesses after the Singapore Land Authority (SLA) terminated its tenancy contract with their master tenant due to rent arrears. Last month, they were served with an SLA notice saying the authority’s agreement with their master tenant, Tanglin Warehouse, has ‘ceased to continue with immediate effect’ and as sub-tenants, they were now trespassing on State land. They will not be evicted though. The Straits Times understands that the sub-tenants have been invited to attend a meeting with the SLA next Friday.

Those interested in staying will get an extension until the end of March next year, or until a new master tenant is found. ‘But if we don’t turn up at the meeting, we will be considered not interested and must move out by April 23,’ said one business owner, who declined to be named. From this month, those who stay will pay rent directly to the SLA, instead of Tanglin Warehouse. The affected sub-tenants operate businesses like wine bars, restaurants, antique furniture and carpets. Some ‘pioneers’ have been there for around 13 years. Depending on their floor space, they pay rent of between a few thousand dollars and $20,000 to $30,000 a month. In the past three to four years, rent has increased by 5 to 10 per cent every year, said one sub-tenant.

The Straits Times understands that there is no formal lease agreement between them and Tanglin Warehouse. The Dempsey Road area, on the site of the former Central Manpower Base, has been rapidly developed over the past couple of years and renamed Tanglin Village. In November last year, SLA called for ideas to liven up the area, which has seen a number of upmarket restaurants and bars opening in recent months.

SLA said it terminated the tenancy with Tanglin Warehouse recently when ‘the arrears situation grew increasingly worse and after all efforts to facilitate rental settlement failed’. ‘As the proceedings are ongoing, it is not appropriate for us to go into details of our claim and arrears amount,’ said an SLA spokesman, though she added that the authority is still prepared to resolve the situation with the company. ‘In view of the years that the sub-tenants have been operating at Tanglin Village…SLA is facilitating their continued stay for up to one year, on terms and conditions to be agreed, after possession is recovered from Tanglin Warehouse,’ she added. SLA said it would help the sub-tenants and discuss tenancy agreements and rentals separately. A managing agent has also been appointed to assist them.

‘SLA and its managing agent will keep communication lines open and liaise directly with the sub-tenants to address any issues and concerns, including meeting up in April,’ it said. A check with the Accounting and Corporate Regulatory Authority of Singapore found that Tanglin Warehouse was registered as a general warehousing company in April 1995. When contacted, a Tanglin Warehouse staff member said: ‘This matter is between us and SLA. We will not give any comment.’ Mr Thomas Teo, managing director of Wine Network, which opened along Dempsey Road about 41/2 years ago, said he is worried about how to continue his business. He has suggested sub-tenants could form a consortium and tender for a block. ‘I pay rent promptly so in this situation, I am not particularly comfortable. But I am confident SLA will be compassionate and find us a solution.’

Source: The Straits Times, 06 April 2007
Posted by Property Wizkid

CapitaLand continues to expand its China residential business

The property giant said yesterday that it is acquiring a 95 per cent stake in a company whose sole asset is a 1.53 million square foot site in Shanghai’s Qingpu district. CapitaLand plans to develop about 200 low-density homes amidst lush gardens on the site. ‘We are confident that they will be popular with both the international community working and living in Shanghai as well as local residents,’ CapitaLand China chief executive Lim Ming Yan said in a statement.

‘We plan to launch the homes by the third quarter of 2008. The entire project will be fully completed by 2010.’
With the latest acquisition, CapitaLand will have a pipeline of more than 4,000 homes in the Yangtze River Delta Region, in Shanghai, Hangzhou and Ningbo. Under the deal announced yesterday, CapitaLand’s indirect wholly owned subsidiary, BR Properties, has completed the acquisition of a 95 per cent stake in Shanghai Guang Nan Real Estate Development Co, whose sole asset is the Qingpu site, at Xu Nan Road in Xu Jing Town.

BR Properties has paid a total of 33.25 million yuan (S$6.65 million) for the 95 per cent stake in Shanghai Guang Nan. The remaining 5 per cent is held by a party unrelated to CapitaLand.
The residential site has a 70-year leasehold tenure and a plot ratio of 0.44, which translates into a potential gross floor area of 676,909 sq ft.

Source: The Business Times, 06 April 2007
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Construction & Design costs for developers have been going up.

According to some estimates, the jump was as much as 20% last year. So, who foots the bill? The buyers, of course! Industry watchers say that is mainly because of the increased demand for building services from major new projects like the integrated resorts. Ku Swee Yong, Director of Savills Singapore, said: “There are several mega projects that Singapore is under-taking, in particular the two $5 billion investments in the casino integrated resorts, and several government infrastructure projects. All these would be fighting for the same pool of resources such as manpower, scaffolding, cranes.”

Major developer City Developments noted in a recent report that its construction costs increased in the past year, due to higher demand because of the more active property market. Building costs aside, architect and design fees have also been on the uptrend. This, as developers rope in famous international designers - such as Dutch architect Rem Koolhaas - to come up with unique designs to attract increasing-savvy home buyers.

These architects can command fees which are at least 50% higher than those of their local counterparts.
Wallace Chu, DBS Vickers’ Assistant Vice President, said: “They want their projects to stand out, with the buyers becoming more internationalized - they’ve been travelling and they know more about design, and they get used to the international lifestyle. That will push them to go for high quality, and they may not accept those normal types of designs.”

But analysts say property developers can well afford the higher costs, thanks to the buoyant property market.
Wallace Chu said: “The current situation is that (home) prices continue to go up. So for developers who have bought land a little bit earlier, that increase in overall costing will be buffered by that (home) price increase. So the bottom-line should still be strong for developers.” Private home prices rose 10.2% last year and are seen climbing by some 15% this year.

Source: Channel NewsAsia, 05 April 2007
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Metro out, Seiyu in - to Century Sq, that is.

Major changes are in store at Century Square mall with old favourite Metro departing while Seiyu moves in - but under a new name and a new look. Department store Metro will go when its lease expires in August, ending more than a decade-long stay at the Tampines mall. Shoppers will only have to wait a few months before Seiyu, under its new brand name BHG, opens for business.

The revolving door changes point to a fast-shifting retail scene here with the old order facing a tougher playing field.
Metro’s move underlines the dwindling presence for what was once the dominant department store chain here.
Its first store opened in 1957 in High Street and at its height had 10 locations in town, including Lucky Plaza and Scotts Shopping Centre. But there will soon be just three left - at Paragon, Causeway Point in Woodlands and Compass Point in Sengkang. The Metro store at Far East Plaza - one of the chain’s best-known branches - closed in mid-2002, after 19 years.

Metro has been an anchor tenant at Century Square since 1996 and occupies four floors with a sub-tenant, Best Denki, part of the mix. A Metro Holdings spokesman told The Straits Times that it plans to move some staff to other stores and will try to minimise the disruption from the move. ‘We will continue to look for new locations,’ she said.
Mainboard-listed Metro Holdings has operations and investments overseas, including shopping malls in Shanghai and Beijing. Its departure from Tampines will leave a gap of 82,000 sq ft but about 50,000 sq ft of that has been snapped up by the new anchor tenant - BHG or Seiyu to most people.

The name change stemmed from an ownership shuffle in late 2005. Parent firm Seiyu Japan sold Seiyu Singapore to CapitaLand, which in turn sold it to the Beijing Hualian Group (BHG) in China. Seiyu Japan had at the time told The Straits Times that the Seiyu brand name would be retained in Singapore only for a certain period. That name change is now official with the three existing Seiyu stores - in Bugis Junction, Junction 8 and Lot 1 - being rebranded as BHG at a ceremony tonight.

The new name - which reflects its marketing tagline Be Here For Good Things - has been accompanied by extensive revamps of some departments, including beauty halls and fashion quarters. Said BHG Singapore’s managing director, Mr Katsuharu Inamoto: ‘We want the new store brand to be able to take us into the new retail era and adapt to the changing consumer profiles. ‘Our new investors are more forward-looking. As a result, we are not only opening a new store in Singapore but also looking at the feasibility of starting stores in neighbouring countries.’

Metro’s departure is also the signal for a mini revamp at the 210,000 sq ft Century Square thanks to the extra space created by the move. Mall manager AsiaMalls Management will be able to carve out 23 specialty shops selling fashion and accessories on levels one and two. Best Denki, which has 21,000 sq ft on level four, may take the entire floor. These changes will tie in with the $7 million in enhancement works that AsiaMalls is planning in July.
Century Square is owned by Asian Retail Mall Fund, which also owns Tampines 1, the nearby 260,000 sq ft mall due to open late next year.

Source: The Straits Times, 05 April 2007
Posted by Property Wizkid

The first sign of Exodus begins.
http://www.propertybingo.com/News.aspx?id=36

The developers of Marina Bay Financial Centre (MBFC) are said to have secured the project’s first office tenant. Industry sources say it is likely to be Standard Chartered Bank, which will lease close to half a million square feet in what will be one of the biggest office leasing deals in Singapore. Stanchart’s lease is likely to be for more than 10 years, market watchers reckon. It remains to be seen what the bank plans to do with the 130,000 sq ft or so it now leases at 6 Battery Road, owned by CapitaCommercial Trust (CCT).

The MBFC developers are also said to be at various stages of talks with a string of other big-name banking and financial groups - including UBS, Merrill Lynch, HSBC, Credit Suisse, ING, JPMorgan, BNP and DBS. ‘It’s probably logical to assume these are the sort of names that would be targeted as a tenant list for the project,’ a property market watcher said. It is not known what sort of rent Stanchart will pay at MBFC, but market watchers believe it could be in the ballpark of $8-$9 per square foot (psf) a month, judging by current rents in the area. The last unit at the nearby One Raffles Quay, believed to be about 4,000 sq ft, was leased at gross monthly rent of about $12 psf - almost three times the effective rent when leasing there began in 2004.

The first phase of MBFC includes two office towers with about 1.65 million sq ft of net lettable area, slated for completion in early 2010. The second phase, expected to be ready by late-2011, will have another office tower with more than one million sq ft of lettable area. Stanchart’s space at 6 Battery Road is under a long-term lease that expires in January 2020 and is subject to a rent review to open market value every three years, according to information made public by landlord CCT in March 2004, around the time of its introduction to the Singapore Exchange, and in an equity-raising exercise last year.

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

This is what Stanchart is understood to have done in the past at the building, although it has since taken back the space from sub-tenants amid the current wave of expansion by banks and the shortage of offices in Singapore.
MBFC is being developed by a consortium that comprises Keppel Land, Cheung Kong Holdings/Hutchison Whampoa and Hongkong Land. The joint venture clinched the 99-year leasehold site in an Urban Redevelopment Authority tender in July 2005.

The consortium bought the site, which can be developed into a maximum gross floor area of about 4.7 million sq ft, in two phases.It paid $381 psf per plot ratio for the first phase in 2005, and an effective land price of $435 psf ppr for the second phase earlier this year under a formula that factored in an increase in office land values in the vicinity since the initial bid in the 2005 tender.

Source: The Business Times, 05 April 2007
Posted by Property Wizkid

So the "Q" starts... reminiscent of the 90s

Mr Ong and his friends were hired by an ERA property agent and have been holding onto their “30-something” positions since 10pm on Monday, being paid $100 each every 24 hours to stay in the queue of people waiting to buy - or representing those who want to buy - The Seafront @ Meyer units at Meyer Road in District 15. The 24-storey freehold condominium project by CapitaLand, which has yet to be built, will only be launched to the public on Friday.

Armed with four sets of clothing, loaves of bread and soft drinks, each of the group has taken turns to make three trips a day to a nearby workers’ quarters to bathe because of the heat. “It’s very boring here, but since there’s money, why not?” Mr Ong reasoned.

As of last night, there were about 80 people in the queue. The line - reminiscent of the good old days when investing in property was deemed a surefire way to make mega profits - is yet another indication thatSingapore’s property market is heading north. Several other property launches in recent days have also attracted high buyer interest.
One of these is CapitaLand’s Orchard Residences, where all 98 units in Phase 1 of the luxury condominium have been snapped up. According to the developer, the units sold for an average $3,213 per square foot (psf).
City Developments Limited’s The Solitaire, a boutique 59-unit development nestled in Balmoral Park in District 10, is now 100-per-cent sold, just one week after its soft launch.

The units sold at an average price of more than $2,000 psf, CDL reported in a press release yesterday. This works out to about $2.3 million for a two-bedroom unit to more than $7.4 million for a penthouse. “The prices achieved represent a new benchmark for the Balmoral Park vicinity,” CDL said. Buyers’ love affair with condos with a waterfront view helped Keppel Land get such a good response on the first day of the soft launch of its Reflections at Keppel development at Keppel Bay Drive, which the developer decided to increase the number of units on offer from 80 to 150. A total of 1,129 units, including 35 penthouses, will be on offer for between $1,900 and $1,950 psf. The highest-priced unit at yesterday’s launch, which was reserved for Keppel staff, directors and associates, was $2,400 psf for a villa unit.

Keppel Land’s Singapore residential director Augustine Tan said that with these prices, the company believes “we have set a benchmark” for the Keppel Bay/Sentosa area. These encouraging responses to the launches is in line with analysts’ predictions that the property market will continue to do well this year, thanks to factors such as a healthy economy and strong foreign investor interest.

According to flash estimates from the Urban Redevelopment Authority released on Monday, the property price index rose from 130.2 points in the previous quarter to 136.2 points in the first three months of this year - the highest increase in seven years. “The overall residential property price index could chalk up growth between 15 per cent and 18 per cent for the entire year of 2007,” said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

Source: Today, 04 April 2007
Posted by Property Wizkid

Retail space to stay calm?

The Singapore office and retail property markets continue to be firm, judging by separate releases from CB Richard Ellis and Knight Frank yesterday.Knight Frank, in an update on the retail sector, said that rentals of prime shopping space in the Orchard Road belt as well as the Marina Centre, City Hall and Bugis locations were stable in the first quarter of the year compared with levels at the end of last year.

‘These areas were not affected by the recent surge in new retail space. Renewals of leases were also not at significantly higher rental rates,’ the property firm said. ‘As a result, rentals in those areas were stable,’ the report added.The average gross monthly rental of prime retail space in the city fringe edged up 0.4 per cent quarter on quarter to $22 psf a month in Q1 2007, with the opening of a couple of malls such as Square 2 and The Central towards the end of 2006 and early 2007.

In the suburbs, the gross average monthly prime retail rent rose one per cent quarter on quarter to $27.20 psf. Knight Frank said the completion of Ang Mo Kio Hub contributed to the increase. ‘Developers of some of the new malls in the Orchard Road area have begun to lease their shop units. There is room for further rental appreciation in Q2 2007. For the whole of this year, prime retail rentals are projected to increase by 8 to 10 per cent, while islandwide, rentals are expected to increase 3 to 5 per cent,’ Knight Frank said.

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

Source: The Business Times, 04 April 2007
Posted by Property Wizkid