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
Posted by Property Wizkid

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
Posted by Property Wizkid

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