Singapore Property News Upfront

More than 50% of Trillium buyers are Foreigners!
March 26th, 2007

Lippo has sold 85 per cent of its 231-unit condo The Trillium, opposite Great World City, during a private preview, achieving an average price in excess of $1,700 psf and has decided to stop sales for now until an official launch this coming Saturday.

Lippo Land executive director Thio Gim Hock told BT yesterday that ‘if we wanted to, we could have finished selling all the units during the private preview which was by invitation. But we’re deliberately keeping some units so the public can come into our showflat on Saturday, see our products and decide to buy if they wish’.

‘I’ve specially chosen a cross section of units across the development - high, mid and low floors - and reserved them for the public launch. These are not remnant units after the private preview,’ Mr Thio stressed.

However, Lippo, which has so far not offered the freehold condo’s six penthouses for sale, will not release them at the public launch either.

About half of the 196 units sold in the development since Lippo started issuing options last Thursday have been picked up by Indonesians.

The rest were bought by Singaporeans and a sprinkling of other nationalities, including Taiwanese, Austrians, Britons, Malaysians, Hongkongers and Koreans, Mr Thio said.

The range of prices achieved for the units sold, which are up to the 27th floor (the top two levels of the 29-level project is for penthouses), is about $1,600 to $2,000 psf.

Recently, Orchard Residences at Orchard Turn sold one of the penthouse for more than $4000psf!
http://www.propertybingo.com/News.aspx?id=29

‘Although our development has 29 levels, in actual fact it will rise to about 33 levels, because we have a high lobby and a mid-floor sky garden,’ Mr Thio said.

Lippo has an 80 per cent stake in The Trillium, which is being developed on a site that the group bought from OCBC early last year for about $739 psf of potential gross floor area.

Assuming the project’s breakeven cost is about $1,100 psf, the total pretax profit from the development could be about $250 million, BT understands.

The Trillium is one of three condos Lippo has slated for launch this year. The other two are a project with about 180 units at Sentosa Cove next to the One Degree 15 Marina, and a 100-110 unit condo on the Kim Seng Plaza site next to The Trillium.

Source: The Business Times
Posted by Real Estator

Small developers are challenging the Big Boys
March 26th, 2007

So who says only the ‘big boys’ have fun?

Last Friday, it was widely reported that Sesdaq-listed Sing Holdings had bought a prime Cairnhill Road property.
Sing Holdings, with a market worth of some $97 million, bought its Orchard area property for $361 million, or $1,542 psf per plot ratio.

But Sing Holdings is not the only secondliner in the profitable-plots game.

Heeton Land and builder Koh Brothers are among a growing list of smaller players which are also sitting pretty on prime real estate, putting them in the same arena as the big boys like SC Global Developments, City Developments and Wing Tai Holdings.

Sesdaq-listed Heeton, which started out in 1976 running fresh food markets, partnered mainboard-listed Koh Brothers last April - when the residential property market was still in deep slumber - to buy Hilton Towers in Leonie Hill for $79.2 million, including a development charge of $3.9 million.

Each party has a 50 per cent stake in the 33,700 sq ft freehold district 9 estate. Property market insiders estimate that the property has a breakeven level of about $1,300 psf, assuming construction cost of around $350 psf.

Given the recent pricing in the vicinity, an up-market condominium to be built there could fetch upwards of $2,000 psf.
Even this may be conservative, given the recent prices of other properties in the Orchard vicinity. Sing Holdings, which has a breakeven cost for its Cairnhill plot in the region of $2,000 to $2,100 psf, expects a minimum sale price of $2,300.

Nevertheless, even at a conservative $2,000 psf, and given the gross saleable area of some 120,000 sq ft (assuming over 50 units), Heeton and Koh Bros would rake in total gains in excess of $80 million.

This would be a remarkable achievement for two companies whose earnings are around $5 million each: Heeton recently reported FY06 earnings of $4.5 million, while Koh Bros posted $5.3 million.

Heeton, which has a market value of $100 million and whose other investments include Sun Plaza (which it jointly developed with Koh Bros) and some 200 wet market stalls islandwide, recently proposed a placement of up to 21 million new shares at an issue price at 33 cents per share to raise a net $6.67 million.

Koh Brothers’ previous projects include The Montana off River Valley Road and The Sierra in Mount Sinai, and it also bought Alocassia Apartments on Bukit Timah Road last year.

Other smaller players that have been getting into the property game over the past year include BBR Holdings, Sim Lian Land and Chip Eng Seng.

Source: The Business Times
Posted by Real Estator

Property Law Revolutionary endorsement from Hu Jintao
March 26th, 2007

Chinese President Hu Jintao has hailed a new law protecting private property as a boon to the legal system, state media said yesterday, in the highest-level endorsement yet of the controversial legislation.

‘It is an important step forward for the formation of a socialist legal system with Chinese characteristics,’ Mr Hu was quoted as telling members of the Communist Party elite, according to the People’s Daily.

‘It is a significant move towards implementing the basic strategy of governing the country according to law,’ the president and Communist Party leader said.

Mr Hu told officials to take the lead in studying the law and to ensure its implementation would help create ‘a more fair and open market order’.

The article was the main front-page item in the Communist Party mouthpiece, signalling the priority that the leadership attaches to promoting the law and, possibly, silencing its critics.

The property law, which guarantees protection for the state-owned, the collective and the private sectors, triggered unprecedented debate before being passed by the legislature earlier this month.

It went through a record 13 years of debate, passed seven readings and had been the subject of criticism and proposals from 47 government departments and 11,500 members of the public.

Source: The Business Times
Posted by Real Estator

Let's do Middle-east!
March 26th, 2007

Sembawang Engineers & Constructors (Sembawang), formerly a subsidiary of SembCorp Industries and now a member of India’s Punj Lloyd Group, has entered into a $100 million deal to build 325 villas in Bahrain.

The company said that its Middle East subsidiary has entered into an agreement with Bahrain’s Riffa Golf and Residential Development Company to build the villas of a residential community, Riffa Views, adjacent to the existing Riffa Golf Club.

The announcement was made in conjunction with today’s launch here of the Middle East Business Group (MEBG) by the Singapore Business Federation. The Crown Prince of Bahrain, Sheikh Salman Bin Hamad Al-Khalifa, has been invited by Senior Minister Goh Chok Tong for the launch.

Riffa Views is the result of the vision of Arcapita, a Bahrain-based bank operating in Bahrain, Atlanta and London. The entire project involves the development of three distinct signature estates - The Lagoons, The Oasis, and The Park. In total, the development consists of 970 villas with access to a world-class golf course, hotel, country club, health club, shopping centre and an international school.

Sembawang, in joint venture with local contractor GP Zachariades, will build the 325 villas under the Lagoons package for a construction cost close to 45 million Bharaini dinars. ‘This is the largest single package in the development and will reinforce Sembawang’s success in similar logistically-challenging projects in the Middle East region, after having successfully completed the Jumeirah Islands development for Nakheel in Dubai,’ Sembawang said.

With more than 1,200 employees worldwide, Sembawang is South-east Asia’s largest engineering company and currently has order books of over $1 billion in South-east Asia, India and the Middle East, including a US$200 million polyethylene plant in Thailand.

Source: The Business Times
Posted by Real Estator

Guocoland makes another move to up her land bank on East Coast
March 26th, 2007

Malaysian tycoon Quek Leng Chan’s GuocoLand has acquired Palm Beach Garden condominium, a freehold site in the East Coast area, for $75 million through a collective purchase.

The acquisition price works out to about $500 psf per plot ratio, after taking into account the development charge of $10 million and state land premium to be paid for two adjoining pieces of state land.

Palm Beach Garden is located along Elliot Road. The purchase - made through GuocoLand’s wholly-owned subsidiary Hedover Holdings Pte Ltd - marks the group’s first major land acquisition in the suburban area in recent months.

‘Its location reflects our confidence that the property market’s recovery, currently confined to the core downtown area, will spread to the suburban areas of Singapore,’ said GuocoLand Singapore managing director Trina Loh. ‘Our target buyers will be mainly owner-occupiers from existing East Coast residents and new entrants to this district.’

The 34-unit Palm Beach Garden is sitting on a site of 108,800 sq ft. It has a plot ratio of 1:4. Including the two adjacent pieces of state land, the total enlarged area will amount to 127,900 sq ft.

GuocoLand plans to develop a five-storey condominium with 118 units. ‘The proposed architectural design will be modern, with a tropical resort setting that will blend in with the idyllic ambience of lifestyle living in the East Coast,’ it said.

Palm Beach Garden is GuocoLand’s third en bloc acquisition in the past 12 months. It bought the Casa Rosita site in the Orchard/Scotts area for $280 million in April last year, followed by the $230 million Sophia Court near Dhoby Ghaut MRT station in December.

The three sites will add one million sq ft in gross floor area to GuocoLand’s landbank.

Source: The Business Times
Posted by Real Estator

Gone are the days when Penthouses cost much lesser per sq ft!
March 26th, 2007

For the very rich, with a lazy few million dollars lying around unspent, luxury penthouses are emerging as a potentially smart investment.

In property, as in other markets, scarcity spells potentially high value, and truly special penthouses are becoming an increasingly rare commodity.

Developers are making a point of singling out these penthouses, with the Hollywood aura they exude in terms of lifestyle, as the very best of condominium living. Market watchers say developers are increasingly differentiating penthouses from other units by adding super-posh features. Typically, penthouses are large units with a great view, roof terrace or pool. Now, developers are also adding rooftop jacuzzis and gardens, said Mr Ku Swee Yong, Savills Singapore’s business development and marketing director.

As a result, penthouses are now priced high on a per sq ft (psf) basis, even by the standards for posh condos: Some sell for more than $15 million.

Take The Orchard Residences. Developed by CapitaLand and Sun Hung Kai Properties, it recently set a new record for Singapore at over $4,000 psf. A local buyer reportedly paid over $4,080 psf or $17 million for a 53rd-floor penthouse there. The previous record was $3,450 psf, set by a Marina Bay Residences penthouse last December.

Now, CapitaLand wants to sell the penthouses at its yet-to-be-launched The Seafront @ Meyer at $2,100 psf to $2,200 psf, above the price range of $1,400 psf to $1,800 psf for most units.

Scarcity and the often unblocked views that penthouses offer are key factors for their higher value. Standards have clearly shot up though.

The yet-to-be-launched Reflections at Keppel Bay, for example, has a super-penthouse with a built-in area of about 11,000 sq ft. It will span 13,300 sq ft over three floors from the 39th storey to the 41st. Developer Keppel Group said the owner could create a private spa, gymnasium or art gallery in the unit. The development also has 34 other penthouses ranging from 3,600 sq ft to 8,200 sq ft.

Previously, developers did not differentiate their penthouses from lower-floor units, Mr Ku said. If penthouses were simply bigger units, they would still sell for more overall, but not necessarily at a higher psf rate, he said. Indeed, just two to three years ago, bigger units such as penthouses were priced lower psf.

Still, some of these older high-end penthouses have kept their values well. In two Ardmore area condos, average penthouse prices outperformed those for non-penthouse units from 2000 to 2006, according to property consultancy Knight Frank. At Ardmore Park, prices of penthouses rose by 43 per cent on average, from $1,384 psf in 2002 to $1,979 psf last year; the increase for non-penthouse units was only 20.6 per cent, it said.

Yet, the same might not be true for penthouses in mid-end projects. At Twin Regency in Tiong Bahru, for instance, average prices of non-penthouse units reached $769 psf last year, up about 13 per cent since 2004, Knight Frank said, but those of penthouses rose only 11.6 per cent, to $712 psf.

When it comes to falling values, penthouses might not drop as much in value as a typical unit, said the consultancy. At Pebble Bay in the Tanjong Rhu area, prices of non-penthouse units fell 18.3 per cent from 2001 to 2006, while those of penthouses declined by just about 6 per cent, it said.

Looking ahead, it seems the market for posh penthouses is getting more exciting. Just last May, SC Global sold its 7,000 sq ft BLVD penthouse for the then-obscene sum of $16 million. New records have been set since then and more higher-priced penthouses are on the way.

For example, Hong Leong Holdings, which last year sold out its 85-unit Tate Residences in Claymore Road, apart from two penthouses, has released the latter for sale at higher prices. Two months ago, the 6,000 sq ft and 6,500 sq ft penthouses were priced at $21 million or at least $3,300 psf each, but the developer has since revised up the price to $23 million.

SC Global has also raised the price of the remaining furnished penthouse at BLVD, from an estimated $18 million to $20 million last June to $25 million now.

These prices could be supported by the new pool of buyers, particularly foreign ones, who are more cosmopolitan in their outlook, market watchers said. ‘They aspire to lead a certain lifestyle and appreciate sitting on a roof terrace under the stars,’ said one.

Source: The Sunday Times
Posted by Real Estator

Can't pay your Loan? Bank will sell your home.
March 26th, 2007

Q I AM 53, unemployed and servicing a bank loan for my private apartment. I’m afraid I might not be able to service the loan soon and the bank might start bankruptcy proceedings against me.

Can the bank do this and can it wait till I am 55 to take the Central Provident Fund (CPF) amount that I have contributed to the house?

A If you do find yourself unable to repay your monthly housing loan, the bank would be entitled to repossess the property and dispose of it to recover the loan amount and outstanding interest.

The bank is not obliged to sell the property immediately; it can hold on to the property if it thinks prices will rise. Given the property climate, this might be better for you.

When the property is sold, the bank might not be entitled to the entire sale proceeds. This depends on when you bought the property.

Typically, a property is encumbered by a bank mortgage and a CPF charge. Before Sept 1, 2002, the CPF charge always took greater priority, so any proceeds went first to your CPF account; the balance then went to the bank mortgagee.

Now, the bank usually takes priority. If you bought your property after Sept 1, 2002, the proceeds would first be used to pay off the mortgage; any surplus would then go to your CPF account.

You fear that if the bank sues you now and repossesses and sells the property, the amount it recovers would be still be insufficient to satisfy the outstanding loan and interest.

The bank can start bankruptcy proceedings only if the shortfall exceeds $10,000.

Next, assume you are made a bankrupt before you turn 55. The law says you can apply to withdraw your CPF savings at 55, but you have to first set aside the following three amounts before withdrawing the excess in one lump sum:
An amount to meet your living expenses between ages 55 and 62.
An amount to meet your retirement needs from age 62 (that is, the Minimum Sum).
An amount to meet your hospitalisation expenses (that is, the Medisave Required Amount or the Medisave Minimum Sum, whichever is higher). Check the CPF website for further details.

Under the CPF Act, the bank cannot lay claim to the money in your CPF account; neither can any other creditor.
Vijai ParwaniLawyerParwani & Co

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source: The Sunday Times
Posted by Real Estator

Single-storey Bungalows are heading for extinction!
March 25th, 2007

The 12 per cent rise in bungalow prices over the last three years has been overtaken by the annihilating rate at which they are being sold — a rate that could put them in danger of extinction, experts say.

Anecdotal evidence shows that single-storey bungalows are fast vanishing from Singapore’s upwardly mobile landscape.

According to international property consultancy Knight Frank, the number of single-storey houses sold jumped from 97 in 2001 to 165 in 2006. This is based on caveats lodged. From 1996 to 2006 there were 1,237 caveats lodged for such homes.

“Transactions are really growing for single-storey homes,” said Mr Nicholas Mak, head of research & consultancy at Knight Frank.

The well-paced rows of patrician bungalows that lined the leafy environs of Belmont Park, Belmont Road and Maryland Estate have been falling to the developers’ hammer as evidenced by the fact that few single-storey charmers remain in the area.

One of the few left is 65 Belmont Road, which sits on a freehold land area of 15,700 sq ft. This, too, is on the block for an asking price of $13 million.

A solid piece of history is vanishing, said Ms Mary Sai, Knight Frank’s auction director.

“With most of them redeveloped to taller houses, people in the 50s and 60s now have fewer charming old bungalows to look back on the good old days,” she said.

Compounding the loss is the fact that most of these bungalows are located in Good Class Bungalow (GCB) zones, which allows them to be developed into taller buildings.

“Every time a GCB is put up for sale people look at it as a potential redevelopment site because the land area is under-utilised,” said Ms Sai.

But preserving the “old home” may not be an option for many owners, who usually sell for reasons like old age, money, empty nests and — in some cases — infirmity as in a recent sale near Holland Road.

The 14,000 sq ft bungalow and land area, a parent’s gift 30 years ago, is now being turned by another far-sighted parent into a trust fund for the younger generation.

For owners of the more humble single-storey houses in the North-East, it is often because of an inability to maintain the premises and the desire to “realise the full value of the house”, as Mr Mak puts it.

“In the last 30 years they have been turned into semi-Ds because families find them harder to maintain,” said Mr Mak.

“They are usually found in the landed estates in Upper Serangoon, Flower Road and Serangoon Gardens. The latter’s old name was Ang Sa Li, meaning Red Tin Roof — the red must have been referring to the rust!”

For such homes, the higher plot ratios allowed by the authorities has been a boon. “This helps renewal,” said Mr Mak.

Source: Weekend Today
Posted by Real Estator

Prime Office rentals hitting the roof!
March 25th, 2007

An acute supply crunch has sent office rentals in four central Singapore areas to record highs - surpassing even 1996’s lofty peaks, a survey from Colliers International has found.

At Raffles Place, the average monthly gross rent of top quality, or Grade A, space continued to grow, rising 23.5 per cent in the first quarter of the year to reach $10.63 per sq ft (psf). This tops the 1996 high of $9.77 psf in the area, which holds the Singapore record for high office rents.

Already, prime buildings such as Republic Plaza, Singapore Land Tower and 6 Battery Road are apparently asking for $14 psf to as much as $15 psf for advance bookings, market sources said.

The asking rent at Republic Plaza was just about $13 psf earlier this year, after a deal there was sealed at about $12.50 psf last December.

While the average monthly gross rent in Grade B buildings at Raffles Place has also risen, they are still below the 1996 peak.

In the Shenton Way/Tanjong Pagar area, however, rents of both Grade A and Grade B buildings have risen above 1996 levels, said Colliers.

A similar surge has been posted by the rents of Grade A buildings such as Millenia Tower in the Marina/City Hall area and Ngee Ann City in the Orchard area.

Rents in other areas such as Beach Road, Tampines regional centre and HarbourFront have also risen but remain well below the 1996 peak.

Occupancy levels of Grade A and B office space islandwide in the first quarter are now averaging a near capacity 96.4 per cent, said Colliers’ director for research and consultancy, Ms Tay Huey Ying.

‘This has given rise to the sweltering pace at which office rents are being revised, as landlords are seen to be raising their asking rents almost on a weekly basis.’

With office supply expected to remain extremely tight in the next two years, tenants’ choices will be limited, she said.

‘A solution, which some companies have already adopted, is streamlining operations and moving back-room operations to out-of-town locations.’

Companies can also consider leasing shophouses or using old government premises offered by the Singapore Land Authority, Ms Tay said.

Already, demand is spilling over into the industrial market, where buildings that are sometimes used as offices - though they are not designed for that purpose - are seeing strong demand, market watchers said.

Last week, Cushman & Wakefield said Singapore’s gross rents for prime industrial space rose about 20 per cent last year to around $1.25 psf per month on average.

Industrial buildings that are used as offices are fetching higher rents, some around $2 psf, market watchers said.
Looking ahead, office rents of Grade A office space in Raffles Place are expected to rise by at least another 30 per cent over the next three quarters, said Ms Tay.

However, she cautioned that a continued rent hike could erode Singapore’s competitiveness.

‘While not widespread, an increasing number of firms are already known to be considering relocating their non-core operations out of Singapore.’

Source: The Straits Times
Posted by Real Estator

Reits new rules to protect investors - MAS
March 25th, 2007

Singapore investors may soon get better information and clearer guidelines on real estate investment trusts (Reits) - which have become wildly popular here in recent years.

The Singapore central bank yesterday proposed changes to these property funds’ guidelines to better protect the interests of Reit unitholders.

These include forcing Reit managers to disclose any financial arrangements they use to boost the short-term yields of Reits and abolishing discounts to institutional investors which buy units in Reit public offerings.

Reits own a portfolio of properties such as malls or factories and get income from the rents. Unitholders receive regular payouts like dividends.

The Monetary Authority of Singapore (MAS) yesterday issued a public consultation paper to get feedback on how to make property fund guidelines clearer and to set up a licensing framework for Reit managers.

Since 2002 when the first Reit was listed, Singapore’s Reit market has burgeoned to 15 listed trusts with a market capitalisation totalling more than $25 billion. This growth was encouraged by government incentives such as tax- free dividends for individual investors of property trusts.

‘There is also a healthy pipeline of proposals seeking to securitise real estate located in the Asia-Pacific,’ noted the MAS.

Analysts and market watchers lauded the proposed changes as timely in improving the transparency of Reits. This comes amid longstanding concerns that some Reit managers may be using complex ‘financial engineering’ arrangements to lift short-term gains.

Such arrangements include deferred payment of units to vendors of assets that boost distribution yields in the initial years, as well as interest rate swaps to boost dividend yields but which may result in lower distribution yields down the road.

The MAS said it ‘is concerned that the costs of such short-term yield-enhancing arrangements and their negative impact on long-term returns may not be adequately disclosed or understood by investors’.

Such payment structures came under scrutiny here in 2005 when Temasek chief executive Ho Ching warned investors about the use of deferred units. It was widely known that Suntec Reit had been doing so.

Analysts say that Singapore’s Reits have relatively simple structures compared with those in Hong Kong where the use of financial engineering schemes is widespread.

In its proposed changes, the MAS also intends to ensure retail investors are treated equally at the time of a Reit’s initial offer in terms of pricing, by forbidding Reit managers from offering discounts to institutions.
‘Such differential pricing would disadvantage retail investors,’ it said.

Another proposal is to prevent Reit managers from maintaining control of Reits by using long-term contracts and high termination fees.

Also, property trusts may be required to invest 75 per cent of their assets in income-generating real estate, up from 35 per cent now. This would bring rules here on a par with those in the US, Britain and Hong Kong.

In addition, MAS may remove a rule that not more than 5 per cent of a Reit’s assets can be invested in securities issued by a single party.

The public has until April 23 to submit views on the proposal.

Amid a recovering property market, Reits in Singapore have surged by an average of about 45 per cent in the past six months compared to 27 per cent for the Straits Times Index.

Yesterday, investors’ response to the proposed MAS changes, which were released on its website at about about 4pm yesterday, was muted.

Among the top Reit gainers was CapitaRetail China, which rose six cents to $3.04. Suntec Reit remained unchanged at $1.93, while CapitaCommercial Trust lost five cents to $2.87.

Source: The Straits Times
Posted by Real Estator