Singapore Property News Upfront 12

Top Enbloc spot goes to Wee Cho Yaw!
UOL, Kheng Leong, UIC, SingLand have spent $1.84b since 2005: study
Companies controlled by Wee Cho Yaw have been the biggest buyers of collective sale sites since 2005. The companies - UOL Group, Kheng Leong, United Industrial Corporation and Singapore Land - have bought a combined 2.3 million sq ft of land through collective sales for a total $1.84 billion between Jan 1, 2005 and May 15, 2007, according to a study by Jones Lang LaSalle.

And that did not even include UIC’s $600 million acquisition of UIC Building on Shenton Way under a collective sale last month as JLL’s study focused on collective sales of developments that involved a residential component. In any case, market watchers note that UIC already owned 78.8 per cent of the building even before the en bloc sale was sealed.

Other big land buyers in the latest wave of en bloc sales include property magnate Ng Teng Fong’s Far East Organization, which picked up around 1.7 million sq ft of land through en bloc sales for $1.25 billion, and Frasers Centrepoint, which clinched 1.2 million sq ft costing $845 million.

Hong Leong Group, including listed City Developments, snapped up around 1.13 million sq ft for $1.7 billion. GuocoLand was not far behind with 1.06 million sq ft land bought for $1.42 billion.
Jones Lang LaSalle’s regional director and head of investments, Lui Seng Fatt, points out that these top five buyers - Wee Cho Yaw-controlled entities, Hong Leong Group, Far East, Frasers Centrepoint and GuocoLand - together bought 7.4 million sq ft or slightly over 50 per cent of the nearly 14 million sq ft of land that changed hands through collective sales during the period of study.

‘This reflects the big players continue to be confident in the Singapore property market,’ Mr Lui said. Within Mr Wee’s stable of companies, UOL was the biggest buyer, with 944,011 sq ft of land costing $819 million, followed by Kheng Leong, with 623,428 sq ft costing $368 million. UIC spent $238 million buying 445,363 sq ft of land through en bloc sales while the figures for SingLand were 281,756 sq ft and $419 million.

An industry observer noted that UOL was a significant residential property developer in the Singapore market back in the 1970s and 1980s although it missed out on the 1990s property bull run. ‘This time round, it looks like they want to make sure they don’t miss out,’ he added.
What some analysts also noted is that with the exception of Nassim Park, the collective sale sites that the Wee-controlled companies are buying are mostly not in the super-luxury prime locations.

‘UOL, for instance is buying mostly mid-upper type sites in central locations like Novena and Bukit Merah/Kim Tian that they are familiar with,’ said a market watcher. ‘That’s probably where stable growth will be well supported from demand from en bloc sellers looking for replacement homes - rather than the high-end where the market has gone a little crazy,’ he added.

City Developments has taken a liking for the Balestier/Thomson area in recent months, having acquired a large tract of land there through collective sales like Lock Cho Apartments, Concorde Residences, The Albany and Thomson Mansions. ‘This helps provide some balance to their landbank, which also includes some high-end acquisitions earlier like Lucky Tower at Grange Road and Futura at Leonie Hill Road,’ an analyst notes.

And as high-end residential prices have shot up sharply, it makes sense for developers to reduce their risk profile by increasing their exposure to the upper-mid market which may be less risky, some industry players reckon. The $1.7 billion that Hong Leong Group has invested in collective sale sites in the Jan 1, 2005 to May 15, 2007 period places it in second spot going by dollar investment, after the $1.8 billion chalked up by entities controlled by Mr Wee.

Other big buyers included CapitaLand, with 600,588 sq ft costing $563 million, Ho Bee, which picked up 452,699 sq ft for $654 million, and SC Global, which has invested $648 million in two locations - Paterson Hill and Cairnhill Circle. JLL’s analysis also shows that nearly 30 per cent of the $16.2 billion total in collective sale deals transacted during the study period involved acquisitions by joint ventures. Going by land area, too, the 4.3 million sq ft bought by joint ventures reflected roughly 31 per cent of the nearly 14 million sq ft of en bloc sale sites that changed hands during the period. For acquisitions made by joint ventures, JLL has split the partners’ proportionate shares of site area and investment to arrive at the numbers in the study.

Source: The Business Times, 28 May 2007
Posted by Property Wizkid

Heard of Expats downgrading?
Rents of private homes are rising so fast that some expatriates are being forced out of prime areas, sometimes into HDB flats, while others are choosing to buy instead. Expats have been complaining about soaring rents since late last year, with some facing rises of 50 to 100 per cent or more when their leases come up for renewal. ‘I entered this (business) at the end of 1993 and I have never seen such huge rental increases,’ said leasing agent Raymond Han.

Savills Singapore’s director of corporate real estate, Mr Simon Hill, said most of his firm’s recent deals in districts 9, 10 and 11 were at significantly higher rental levels. ‘Certainly, there were no deals done at below a 50 per cent rise in rent,’ said Mr Hill. An Australian who faced a 66 per cent rent hike for his 1,250 sq ft apartment in Newton recently moved into a HDB flat, preferring that to a condo unit in poor condition.

He now pays $1,500 for a five-room flat in Ang Mo Kio, well under the $1,800 he was paying on his old lease. ‘There is a perception that expats come here on huge salary packages,’ said the expat, who is a teacher. ‘Many are lower-rank professionals like me. So this rental issue just doesn’t come down to a need to revise salary packages.’ He said his colleagues are also reporting exorbitant rent increases. ‘But our rental assistance has increased by only $100 or $200 a month,’ he added.

Official data shows that rents of non-landed homes rose by 8.1 per cent in the first quarter this year, up from a 5.3 per cent rise in the last three months of 2006. Overall, residential rents remain about 29 per cent below the 1996 peak. But market watchers say the data reflects the situation in the whole market, not just recent renewals or deals in coveted condos and prime areas. Asking rents at Ardmore Park in the Orchard Road area, for instance, have shot up to between $17,000 and $18,000, from $14,000 to $15,000 a year or two ago.

But some tenants with ongoing leases at the posh estate could still be paying as little as $12,000 a month. ‘I would say the huge increases started only in January,’ said Mr Han. He is helping an Australian banker find another home, after the expat’s landlord demanded $6,500 a month more for his four-bedroom bungalow in Bukit Timah. That would have meant a monthly rent of $18,000. The hefty rises have also prompted some frustrated expats to buy instead of rent, said property agents.

Housewife Cara Killham and her husband, a teacher, chose to buy after rental demands for their Clementi condo became too extreme. ‘The rise in rentals got us looking for a place. That was the tipping point,’ said Ms Killham, a British citizen who came here eight years ago. The couple recently decided on a unit of about 1,600 sq ft in Dairy Farm Estate on Dairy Farm Road.
‘Our mortgage and condo fees would still be less than the monthly rent,’ she said.

Mr Hill of Savills Singapore told The Straits Times: ‘What we are seeing is a massive resistance building against the rental increase. ‘Either companies won’t bring in so many expats, or expats will move out of districts 9, 10 and 11.’ Yet, there are still expats, mostly those new to Singapore, willing to take up the new rental offers, agents said. Apart from strong demand, rents have also risen as a result of tight supply caused by the many collective sales.

It means a double whammy for companies, as rents for quality office space have risen sharply as well. ‘Finding a new place is very difficult,’ said an expat in the technology sector. ‘We have made a number of offers and had cheques cashed, only to be told that the landlords had changed their minds.’ ‘It has been very stressful, and has forced us to reconsider our future in Singapore.’

Source: The Straits Times, 28 May 2007
Posted by Property Wizkid

Outskirts do the catching up in HK
Imagine prices of homes in Singapore’s Jurong catching up with those in Orchard Road.
Well, it has happened - in Hong Kong, that is, where demand for top-end homes on the outskirts has soared due to limited supply in the city centre. And some of these locations could be an hour’s drive away from downtown.

Prices of homes in the suburbs have seen a surge of as much as 10 per cent in the past year. The upward trend, especially for the high-end sector, is expected to continue through the year, industry players say. Highlighting this trend, Ms Karen Choi, who heads research at property consultancy Vigers in Hong Kong, said that as of April, sales for homes worth HK$10 million (S$2 million) grew nearly 200 per cent over a 12-month period.

In contrast, the sale for homes in general grew about 40 per cent over the same 12-month period. More interestingly, Ms Choi told The Straits Times, values of some upcoming top-end homes in countryside areas such as Sai Kung, Tai Po and Sheung Shui - typically bungalows or semi-detached houses with full sea views and designer fittings - are set to surge to as high as HK$20,000 per sq ft. This was the cost of a new home in Hong Kong’s traditional luxury areas, such as the Peak and Repulse Bay, in 2005 when the city’s property market started recovering from the economically crippling Sars epidemic of 2003.

Homes in these luxury areas have now soared higher to exceed HK$25,000 per sq ft in average value. ‘But given that, going forward, there is limited supply coming into these traditional luxury areas, it is really not surprising that top-end homes in the outskirts have attracted big interest,’ said Ms Choi. ‘The demand for luxury properties is still quite prominent despite soaring capital values. ‘This sector is a lot more resilient than the mass market. For example, while prices of homes on average plunged by 60 per cent after Sars struck, those for top-end properties fell by a much lower 20 per cent.’

A lot of high-end buyers at Tai Po and Sheung Shui, near mainland China, are Hong Kong or mainland industrialists who own factories or investments in neighbouring Shenzhen city across the border, Ms Choi noted. ‘Increasingly, however, I do see more top- level executives who work downtown coming out to either rent or buy in these areas.’

Boosted by a sustained economic recovery and healthy stock market, the luxury property sector has boomed over the past year. March saw the sale of the most expensive home ever - a house in the Peak district which cost HK$38,500 per sq ft - and the most expensive apartment unit, at HK$32,000 per sq ft. It is not expected to stop there, with one of Hong Kong’s leading developers, Sun Hung Kai Properties, having forked out last December HK$1.8 billion - a record HK$42,196 per sq ft - for a plot of land at the Peak.

This means that prices of new homes there will have to be set above current records, possibly as high as HK$60,000 per sq ft, analysts say. Sun Hung Kai is also co-developer of the luxury Orchard Turn condominium in Singapore, which holds the city state’s record home price of S$4,000 per sq ft. The phenomenon of expensive homes in the suburbs underlines the depth of Hong Kong’s property market, experts noted, compared to places like Singapore.

While the price of the costliest home in Tai Po will still be enough to buy a home in the heart of town, they said, the costliest one in Jurong - at about S$500 to S$600 per sq ft - is no match for even the cheapest Orchard Road flat. ‘Even in top Singapore suburbs like Tanah Merah, the top price ranges at just over S$600 psf,’ Mr Michael Ng, managing director of Savills Singapore, told The Straits Times. ‘This is nothing compared to at least S$1,000 psf for homes in Orchard Road and the prime districts, if these are available now in the resale market. 'It will still take a while for the Singapore property market to catch up with the Hong Kong one, if at all.’

Source: The Straits Times, 28 May 2007
Posted by Property Wizkid

Second Home Loan anyone?
Before you jump on the red-hot property-investing bandwagon, know what criteria banks look at when granting a second mortgage. When Mr Andrew Ang, a manager in his 40s, went around the banks last month scouting for a second home loan, for an investment property, he was surprised to discover that ‘everyone and his mother-in-law’ seemed to be doing the same. ‘I bumped into so many people - my army buddies, colleagues, even my own mother-in-law - who were all asking if they qualified for another home loan,’ he said, and laughed.

The reason is simple. The dazzling property market rebound has enticed growing numbers of buyers into snapping up a second or even third home for investment. These investors had initially focused on the higher-end districts 9,10 and 11, but interest has spread to other areas, including East Coast, Newton, Meyer Road and Thomson in recent months, said Mr Tan Chia Seng, Citibank’s business director.

These buyers are seeking properties with a good rental yield as well as the potential for a collective sale - or one-off sale - at a tidy profit if the property boom is sustained. Figures from Credit Bureau Singapore reflect this trend: The number of home owners with at least two home loans more than doubled to 41,078 as at March from 19,901 two years earlier. Banks such as United Overseas Bank, DBS Bank and Standard Chartered Bank (Stanchart) have noticed more customers seeking second mortgages lately. Citibank has seen one in 10 mortgage customers apply for a second home loan, for a second property.

Most of these borrowers tend to be higher-income customers with comfortable six-figure annual salaries, say banks. So they can easily meet the requirements for a second or third home loan.
But those in the middle-income brackets, such as Mr Ang, have also been swept up in the investment property buzz, and are knocking on banks’ doors for a second home loan as well.
Financial advisers urge caution when making such a major financial commitment.

‘Overstretching your financial limits can be disastrous. A property correction can potentially lead to bankruptcy,’ warned Ms Tang Yin Fon of independent financial advisory firm Providend.
A borrower should ensure that his total loans do not exceed 50 per cent of his total assets, which include salary, savings and equities.

Ms Elaine Heng, Stanchart’s general manager for mortgage and car loans, advised customers to consider four factors before committing to a home loan. They are: employment stability, current cash flow, long-term wealth management goals and view on the long-term interest rate environment. Borrowers may also wish to ‘maintain a surplus or savings buffer in your Central Provident Fund account to service one to two years of monthly instalments’ in case of an unforeseen temporary financial crunch, said Mr Koh Kar Siong, DBS’ head of home loans.

And of course, having ensured that they have the financial muscle to handle a second or third home loan, borrowers need to cross another hurdle - getting approval from the banks.

What banks look for:
Repayment ability
The key factor that banks look at is the customer’s debt servicing ratio, said Stanchart’s Ms Heng. This refers to the customer’s ability to service all his loans, which include existing home loans, car and personal loans, as well as credit cards. The ratio that banks accept normally ranges from 40 to 60 per cent, said DBS’ Mr Koh. This represents the proportion of a borrower’s monthly income taken up by total monthly loan payments. Income may include rental from investment property.

Loan amount
Banks also assess the loan amount that they can grant to customers by considering the valuation of the investment property. They use a measure called a loan to valuation ratio: the home loan value divided by the property valuation. Banks say they typically do not grant loans of more than 80 per cent of an investment property’s value.

Steps you can take
There are some steps that you, the borrower, can take to endear yourself to the bank to get your investment home loan approved without too much hassle. Here are some tips to boost your chances: Keep debt servicing ratio at or below 50 per cent. If you have enough cash, you can choose to pay off your car loan, and wipe your slate clean in terms of personal loans and credit cards, said Mr Dennis Ng. This may boost your chances of getting approval for a higher loan value even if your income is relatively low.

Maintain a good credit history
Stanchart’s Ms Heng noted that banks assess customers’ credit reports over the previous 12 months or longer, to find out if customers pay their credit card bills and monthly mortgage instalments on time. A good credit history over the previous 12 months is a plus factor when the bank is considering whether to grant a second loan, said Citibank’s Mr Tan.

Show a commitment to repay
One way to show your commitment to repaying your mortgage is to opt for a shorter loan tenure than you are entitled to, said Mr Koh. This may signal that you are prepared to pay up the principal sum as well as the interest on your property, that you are not just servicing the interest until the market is hot enough to allow you to sell off your unit.

Also, if you feel comfortable doing so, tell the bank how much you have squirrelled away in your CPF accounts, unit trusts and bank savings accounts. This may reassure the bank that you have enough funds to pay your instalments if rental income from your investment property dries up in a market downturn.

Cultivate a stronger and longer relationship with your bank
If you have several products such as savings accounts, home loans and unit trusts with the bank, this may boost the debt servicing ratio it grants to you - lifting your chances of getting a higher loan value. And it also pays to be a loyal customer. The longer your relationship with the bank, the more leeway you may get.

‘Two years and above is already quite telling for the quality of the relationship,’ said Mr Tan.
‘You don’t necessarily need to have had a loan relationship with the bank previously. Investments with the bank can also help it to gauge your repayment ability and creditworthiness better.’ Make sure your rental income more than covers your interest instalments.

One common misconception among investors is that banks take into account the entire rental income from the property when granting a second or third home loan. Banks actually look at a portion - possibly 50 to 70 per cent - of monthly rental as they also consider the fluctuations and sustainability of this cash flow in covering monthly loan payments, said Mr Ng.

Try not to opt for interest-servicing loans
Such loans allow customers to service only the interest but not pay up the principal amount borrowed. By paying interest only, you are ultimately paying more interest over the long run.
DBS said it offers this option only ‘to assist customers during a transition period in order to manage cash flow’. Thus, such loans will usually be offered only on a short-term basis.
Financial advisers also note that banks are unlikely to grant approval for such loans to customers unless they are high net-worth individuals who are savvy property investors.

What may crop up:
Extra charges
You may need to set aside extra funds to pay for maintenance, income tax and stamp duty for your second property, said Mr Ng. Investment properties, especially older condos, may also require refurbishment expenditure.

Unfavourable property cycles
Mr Tan cautioned: ‘If there is an economic downturn, the rental rates may fall faster than your mortgage interest rate, especially for fixed rates. ‘Be prepared with enough cash to top up the difference for the monthly instalment.’

Higher interest rates
Customers should also take note that investment property generally has a higher mortgage rate compared with residential property, said Prudential financial adviser Lim Szer Khee. He explained: ‘Investment property generally has a shorter loan life span as there is a greater tendency to sell the property, so the banks may make less money from lending to finance investment properties.’ He sets aside 3 years’ worth of mortgage payments.

MR S. Cai, 50, sleeps soundly every night even though he has taken on two mortgages totalling more than $1.3 million after snapping up two investment properties recently. The businessman, who is ‘very bullish’ on the property market, has sold most of his share portfolio and is ploughing a considerable sum, including savings, into property. But he breezily declares he ‘wouldn’t lose a wink of sleep even if the market crashed’. This is because he swears by what he calls the ‘first rule of property investing’ - ensure you do not overstretch yourself.

‘Generally, people should keep aside enough cash to cover one year’s worth of mortgage payments. But I set aside three years’ worth just to play it safe,’ says Mr Cai, who runs a construction firm and two bakeries. Banks were still willing to grant him approval for his second home loan not just because he earns a six-digit annual salary, but also because he has more than enough cash stowed away for a rainy day.

Mr Cai, who lives in an HDB executive flat, took out a $350,000 loan to buy an apartment at Pearl Bank near Chinatown in September last year. Two weeks ago, he zoomed in on an old apartment in Goodwill Mansions in Balestier requiring an extra home loan. He has applied for a loan that covers 80 per cent of the valuation of the unit, but declined to name the total amount.
These two investments may not have the speculative appeal of high-end units in Marina Bay, but they caught Mr Cai’s eye because of their ‘attractive rental yield and potential for collective sales’. ‘The rental yields are easily 4.5 per cent, even in bad times, so they will cover interest payments. For the Pearl Bank unit, which has a higher potential of going en bloc, I applied for a loan that has a one-year penalty, so that I would not have to pay as much interest.’

Only 35 and holding 2 home loans worth $1.2m, Mr Peter Seow, 35, is convinced he is young enough to risk it all on the current property market boom - even if it means chalking up a debt of $1.2 million. Last month, he took out a second loan of $600,000 to buy a freehold four-room condominium in East Coast, hoping to ‘make big bucks in a few years’.

His first loan is for a three-room condo in the Thomson area. The engineer, who works in a multinational firm, acknowledges he has a relatively modest annual income ‘in the high five digits’. ‘I was initially worried I would not get my second loan approved because I heard from my banker friends that banks usually grant loans only to those with six-figure incomes,’ he said. But he also had trump cards that convinced the bank to grant him the much-needed mortgage - his youth, clean bill of credit health and a handy stash of cash.

‘Since I am 35, I am able to stretch the loan over 30 years so that I can pay a smaller loan instalment each month,’ he said. He had to fork out several thousand dollars to refurbish his condo unit, but hopes to use the monthly rental income of under $2,500 a month to cover his interest payments in future. He also paid up his car and personal loans, as well as all his credit card bills, before applying for the loan. This means his income is set aside to cover only living expenses and the home loans.

Mr Seow also has combined CPF and bank savings with his wife of $100,000. Part of this came from his 14-month bonus and unit trust investments. ‘I was pleasantly surprised I didn’t have any difficulty getting the loan. The economy is doing well so perhaps the banks are also more willing to lend even to middle-income people like me.’

Source: The Sunday Times, 27 May 2007
Posted by Property Wizkid

Enbloc Buayas(crocodiles)
They call themselves ‘investors’, but property agents prefer to label them ’speculators’. Residents, rather less politely, describe them as ‘aligators’. The en bloc fever has spawned a small but growing number of entrepreneurs who sniff out old property developments and then gun for a collective sale.

They wheedle their way onto estate sale committees and fight to push a sale through, in the hope of pocketing some good money in these good times. One man who was on two sale committees was upfront about his intentions, which grated on some of his neighbours. He got booted out of one. ‘They were saying people like us have no emotion. We just want to make money and run,’’ he said. And so it is. ‘I just want to make money.’

Such traders usually jump into an estate late, buying units from sellers who do not want to wait for a collective sale to come through and are looking for a price ’somewhere between individual value and collective sale value’, said Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis. Depending on when they bought the units, they can make between 20 and 80 per cent profit over what they paid for, said Mr Ho Eng Joo, director of investment sales at property firm Colliers International.

Collective sale trading has made Mr Mark Chow quite a tidy sum in the last three years. In 2004, the 44-year-old oil and gas engineer bought two units at Phoenix Mansion in Cairnhill, which was sold en bloc less than a year later. It netted him close to $1 million in what he called ‘purely a gamble’, given that the 40-year-old apartment block had poor rental returns.

He is now sitting on two sale committees - at Pearl Bank Apartments near Chinatown, and Tulip Garden in Farrer Road where a collective sale now could earn him $1.8 million, almost double what he paid for it. Mr Chow admitted that some residents view him with suspicion - not surprising given that some of these amateur traders are aggressive in forcing a sale through.

He sees himself differently; he is merely sharing his experience. ‘The most important thing is that you must be responsible and have ethics. Get the best value out of it for everyone,’ he said.
Businessman Lee Peng Shu, 57, said such traders do have something to offer. He had a trader on the sale committee he was heading at Jervois Court, which was sold four years ago.

‘He was very aggressive, very clear about the en bloc situation and all the rules,’ he said. ‘But that was good too because his experience helped, since many of us were first-timers.’ Disagreeing, a senior property consultant said their rush to cash in can create problems for residents who cannot find comparable replacement homes in time. ‘They don’t consider the social needs of residents. They are troublemakers,’ he said.

Property agents who advertise sales of homes said they receive more calls when they include the words ‘en bloc potential’ in their ads. ‘There’s always interest in anything that’s old,’ said one property agent who has been advertising a unit in a River Valley condominium that is more than 30 years old. He is getting as many as 30 calls a day and is quite close to sealing a deal.
Insiders say even some property agents are getting in on the act, sometimes using their family members’ names to purchase apartments with collective sale potential.

The frenzy is getting too much for retired librarian Dev Nair, 66, who gets mail and phone calls every day from property agents asking if she wants to sell her 32-year-old Neptune Court apartment. The 752-unit estate in Marine Parade got the ball rolling for a collective sale last year. ‘I ask them why they are so keen to buy. They pretend they don’t know about the collective sale,’ she said.

One agent even offered her $1 million, which tops the latest sale transaction - at $975,000 - in that estate this month. ‘These must be speculators but we don’t have proof,’ she said.
Striking a balance - ‘You want to make money but, morally, you should do the right thing too.’ - INVESTOR MARK CHOW, who roped in 200 agents from Knight Frank to help residents at Pearl Bank Apartments with their needs to find a new home. He is on the sale committee of this property and that of Tulip Garden

Brisk business in collective sales
Last year, 13,086 private homes changed hands in the secondary market, the highest since 2001 when only 4,105 private homes were sold, a report by real estate services firm Cushman & Wakefield Asia showed. According to Colliers International’s report for the first quarter of this year, collective sales took up nearly 80 per cent share of the total private residential investment sales at $4.1 billion. The number of transactions also almost doubled, from 16 in the last quarter to 30 in the first quarter of this year.

Source: The Sunday Times, 27 May 2007
Posted by Property Wizkid

Holland Area getting hotter by the day
Greenleaf - Quiet stretch with much promise. Towards the far end of Holland Road, after it diverts from the main thoroughfare, is a quiet residential area not many people have heard of.
A large patch of undeveloped land separates this area from the busy stretch of Holland Road. This provides a clue to its name - Greenleaf - and conjures up development possibilities for the future.

Greenery indeed seems to be the theme of the area, giving shade to pedestrians and lending a secluded air to the boutique condominiums and semi-detached houses there.
‘The area is not very well known and most of the houses are old, so prices haven’t risen very much,’ said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore. But he added that rising demand and prices of bungalows in the nearby Queen Astrid area are starting to spill over.

As bungalow rentals and capital values go up, some home buyers and tenants looking for cheaper alternatives are turning to Greenleaf, said Mr Ku. In this area, landed homes are selling for an average of $468 psf, Savills said. This means an average price of $3.7 million for a 8,000 sq ft semi-detached four bedroom house. Asking rentals keep pace with the price, at between $14,000 and $16,000 a month.

Mount Sinai / Ghim Moh - High price for right schooling
The strong presence of schools such as Henry Park Primary and Dunman High help boost home prices in this area, which extends from Ghim Moh near Holland Village to Mount Sinai and Moonbeam towards Ulu Pandan. The choices range from HDB flats in Ghim Moh to a sprinkling of condominiums near Ridgewood and Ulu Pandan.

The middle portion is dominated by landed housing, mostly semi-detached ones. Prices for HDB flats in Ghim Moh hover around $200,000 for a three-roomer and $300,000 for a four-roomer.
Condo prices vary more. At Pandan Valley, buyers can expect to pay $588 psf, or nearly $1 million, for a 1,700 sq ft unit, said Savills. This amount will cover only a 1,033 sq ft unit at Allsworth Park, where units average $956 psf, it added.

At Moonbeam, semi-detached houses cost about $689 psf, or $2.4 million and up. The houses sold recently range from 3,400 sq ft to about 4,000 sq ft.

Queen Astrid / Leedon - Where space comes at a premium
It is easy to form a defining impression of the bungalow area encompassing Queen Astrid, Oei Tiong Ham and Leedon Parks. One house has a Bentley and a Mercedes-Benz sitting pretty in a driveway that leads to a massive bungalow with a swimming pool in the backyard.

Indeed, the tranquillity of the well-known bungalow area - complete with sweeping driveways, large cars and even larger houses - is conducive for dreaming big. Houses in the area range from 12,000 sq ft to 16,000 sq ft, according to Savills Singapore. As can be expected, prices are equally mammoth. A 15,500 sq ft Leedon Road bungalow was sold for $11.5 million in July last year, or about $740 psf, an unusually high psf price for a bungalow.

Average prices in the area are about $568 psf, said Savills, and average asking rents can be anywhere from $15,000 to $25,000 a month. Even speculators have cashed in on the rising demand for bungalows. Last year, a 27,372 sq ft house in Queen Astrid Park changed hands three times, for a handsome profit each time. It fetched $12.5 million in April, and was then re-sold in May for $16 million. The new owner went on to sell it again for $18 million in December.

A Oei Tiong Ham Park bungalow was sold last December for $11 million. At almost 21,000 sq ft, this works out to $526 psf, said Savills. ‘It is still considered a very high-quality, low-density housing area, and the scarcity value of all these good-class bungalows has pushed up the value of land prices a lot,’ said Mr Ku Swee Yong, Savills Singapore’s director of marketing and business development.

Holland Village - It’s hip and happening
The heart and soul of Holland Road is Holland Village, which boasts arguably the most hip HDB estate in town, with chic shops and eateries interspersed with a church and a swimming complex. Even the never-ending Circle Line construction has not dimmed the area’s energy - nor the steady rise in home prices. Home prices have jumped over the last year, by up to 60 per cent in condos such as The Merasaga. Two units were recently sold for $1,100 per sq ft (psf), up from about $710 psf last year.

The Ford @ Holland, which grabbed headlines when it sold out within an hour last November, has seen average prices moving up from $1,200 psf then to $1,300 now. In general, average prices of condos in the area are $1,092 psf, said Savills Singapore. It added that average asking rentals for a two- or three-bedroom apartment range from $3,500 to $4,000 a month.

As for HDB flats, Holland Village includes some of the priciest flats in Singapore. Buyers can expect to pay close to $500,000 for a five-room flat - almost as much as a small condo would cost. Three-room flats are more affordable, ranging from about $170,000 to about $210,000.
Home prices here are moving up mainly because buyers anticipate a rise in values when the new Circle Line MRT stations come up nearby, said Mr Ku Swee Yong, Savills Singapore’s director of marketing and business development. He added the recent buzz around Buona Vista, including one-north and Rochester Park, has spilled over to the area.

Farrer Road - Homing in on the junction
Surrounding the busy Farrer Road/Holland Road junction is a well-established residential area that is home to several notable condominiums. Among them are Leedon Heights, the estate that recorded Singapore’s most expensive collective sale, and Farrer Court, which looks set to topple that record soon.

Interest in the area is growing, thanks to a few recent condo launches in the area, as well as the stirrings of collective sale activity. Home prices seem to depend on whether the development is along the Farrer side of Holland Road or on Queensway, at the opposite end.

At Farrer, average prices are up to 50 per cent higher than at Queensway. Newly launched Waterfall Gardens, for instance, commands $1,439 psf, while Viz @ Holland averages $854 psf.
Generally, you can expect to pay about $800 psf along Queensway and well upwards of $950 psf for most Farrer homes.

Dempsey Road - Good-class homes aplenty
Thanks to up-and-coming Tanglin Village, most people now associate Dempsey Road with trendy eateries and chic watering holes. But the area is better known - to property watchers at least - for its clusters of good-class bungalows, the most prestigious homes available in Singapore.

Tucked away along the winding roads of Ridout, Swettenham and Peirce are these spacious, limited-edition houses - there are only about 2,500 of them in the whole island. Their scarcity means that few deals have occurred this year. But last year, some bungalows in Peirce changed hands for an average of about $600 per sq ft, or $9.7 million for 16,100 sq ft of space, said property firm Savills Singapore. Rents average $20,000 to $30,000.

As demand for high-end homes soars, experts predict that prices and rentals for good-class bungalows will follow. Dempsey Road, with its proximity to town and the spillover from Tanglin Village, is set to be one of the biggest beneficiaries of this trend.

Source: The Sunday Times, 27 May 2007
Posted by Property Wizkid

Expats, expats, where art thou going... to stay?
Renting a home is becoming near impossible for many expatriates. Spikes in property rentals - especially for government housing - have mostly affected those who do not receive housing allowance and generally make less than $5,000 a month.

It does not seem to matter if units are in far-flung locations, nowhere near amenities, and far from MRT stations. The situation has got to such a point that it is driving some, such as Indian national Yogesh Powale, to give up altogether and send his family back to India.
But not for want of trying.

Mr Powale spent three months searching for a rental flat when he arrived in November last year. He found a three-room Housing and Development Board (HDB) flat in Bishan, which he rented for $1,500 in January. But after four months of living there, the 37-year-old IT consultant has found costs too high.

‘I’m earning $4,000 and paying $1,500 for rent alone. It’s not feasible,’ he explained. Now, without his wife and one young daughter, he has moved to another Bishan three-room HDB flat, which he shares with two other friends, and pays $450 of the $1,350 monthly rent.

Like Mr Powale, others too are having problems finding rentals within their means. Property agents say they are mostly from China, India and the Philippines, and are usually here with their families. The problem is supply.

Since HDB eased rules to enable more residents to rent out their flats in March, as many as 1,780 home owners were given approval - 570 more than would have been allowed to do so under the old policy.

However, newly arriving expatriates have increased demand for such flats. Last year alone, the expat population here grew by 9.7 per cent from 798,000 to 875,500. Not all can afford to rent private properties, which are in abundance, because rental options can cost more than their wages.

A 760 sq ft apartment in the East Coast - puny for families - can start at about $2,500, while a two-bedroom Jurong apartment can easily cost $3,000 a month. As many as 20 property agents reported that demand for HDB is now so high, they some- times have trouble coping with calls, which can number as many as 30 in an hour.

Units are snapped up within two days of being advertised in The Straits Times, and interested parties start calling as early as sunrise. Property agent S.C. Ong said: ‘Even when the flat is in Jurong, my phone can start ringing from as early as 7.30am.’

Singaporeans themselves are competing for HDB rental units, many sold their private property to make a quick buck from the boom and are looking for a place to live, said Ms May Tan, a rental specialist. ‘They are waiting for prices to dip before buying a new house. While waiting, they rent HDB flats,’ she explained. Exacerbating the problem are picky landlords, who reject potential tenants based on where they are from.

Mr Willy Chua, a property agent who has been distributing fliers door-to-door to encourage people to let their homes, said: ‘Some landlords claim they don’t recognise their houses after letting them to people of certain nationalities.’ Until more flats come up for rental, finding a place to stay will remain tough.

Indian national Raj Ragavan, a project manager, spent two months searching before landing himself a three-room flat in Bedok. Said the 42-year-old: ‘Whenever I viewed flats, there would be at least 10 other expats viewing the same unit at the same time.’

Source: The Sunday Times, 27 May 2007
Posted by Property Wizkid

Sentosa land sales to be transparent & fair
Sentosa Development Corporation (SDC) should further review its land sales rules and procedures, not only to ensure transparency and fair competition but so they will be seen to be transparent and fair, a Parliamentary committee has recommended, following findings of lapses by the Auditor-General.

In its latest report, presented to Parliament on Thursday, the Public Accounts Committee (PAC) says SDC has taken measures to redress deficiencies but PAC takes the view that the inherent weakness of SDC’s land sales by private treaty - one of the two modes of sale - was not fully addressed. ‘Direct negotiation with a prospective buyer may not result in the best price as compared with an auction, especially in a rising market,’ says the eight-member committee chaired by Cedric Foo. It is also open to abuse as information on reserve price, for example, could be leaked, PAC adds.

The additional controls of not providing board directors with privileged information will not prevent public perception of conflict of interest, says PAC, because directors and ex-directors taking part in SDC land sales will still have access to more background information than others.
PAC recommends that SDC further review its land sale guidelines and procedures so sales ‘not only comply with the principles of fair competition, maximising total returns to the government and transparency, but are also seen as such by the public’.

The committee further suggests that the Auditor-General undertake ‘a more regular audit’ of the Economic Development Board, following the Auditor-General’s findings of lapses in governance structure and financial operations in its first audit of EDB. Apparently, EDB’s budget of $105 million for the year under review (2005/2006) was not submitted to its board for approval, and the board had also delegated power to staff to grant loans and to borrow without reporting back - practices against the law. EDB says it has taken prompt action to address the mistakes.

Other lapses unearthed in the Auditor-General’s audits of ministries and statutory boards in financial year 2005/2006 include procurement irregularities in the Ministry of Defence, inaccurate records of state land and buildings, unfair payment practices and false accounting information in the Ministry of Information, Communications and the Arts, circumvention of internal controls in a Foreign Affairs overseas mission, and weak access controls in several government agencies.

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

3 Hospitals will be "Reited" up, latest move by Parkway
Parkway Holdings, the largest operator of private hospitals in Singapore, yesterday said that it will put all three of its hospitals here into a new real estate investment trust (Reit) worth at least $765 million. Parkway Life Reit will initially consist of Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital as well as adjoining medical and associated shops.
The Reit will buy the properties, which are valued between $765 million and $775 million.
Once the Reit is set up, Parkway will hold a stake of 30-45% in it.

Parkway, which is South-east Asia’s biggest healthcare group by market value, intends to use the proceeds to acquire hospitals and healthcare assets in the region, said managing director Lim Cheok Peng. Some of the money will also be distributed as special dividends to shareholders and used to refinance debt, he said. ‘The proceeds can be used to grow our business in Singapore, China and India,’ Dr Lim said. ‘Medical tourism will be a very strong impetus of growth for us.’

In Singapore, Parkway is interested in bidding for new hospital sites that the government could release. Health Minister Khaw Boon Wan told Parliament earlier this year that Singapore is moving to expand its medical capacity to capitalise on the market for medical tourism, which involves selling more land to private hospital operators. It is widely expected that one or two sites will be put up for sale to private hospital operators such as Parkway soon.

Parkway sees ageing populations and increasing affluence across Asia as growth opportunities.
The company intends to look for acquisition opportunities together with the new Reit. ‘While the Reit will initially consist of portfolio assets here, the intention is to diversify out of Singapore,’ said Choo Oi Yee, Parkway’s senior vice-president for strategic planning and business development.

At the moment, Parkway has 10 hospitals in Malaysia, as well as a hospital each in Brunei, China and India. Each of these is a joint venture and cannot be immediately injected into the Reit.
The three initial properties will be sold to the Reit on a leasehold basis. Gleneagles and East Shore each come with a 75-year reversionary lease, while Mount Elizabeth has a 67-year lease.
Parkway intends to lease the properties back from Parkway Life Reit for an initial term of 15 years, with the option to extend the lease for another 15 years.

For the first year, the rent paid will be at least $45 million, said Parkway. Shares of Parkway closed eight cents down at $4.50 yesterday. The stock has climbed 43.3 per cent since the start of the year.

Source: The Straits Times, 26 May 2007
Posted by Property Wizkid