Singapore Property News Upfront 13

Heavyweights of the industry fights for the "Largest Agency Title"
HSR says it has used the tagline for its ads but PropNex claims it should be the biggest agency here. So, which is the biggest of them all? Property agencies, that is. The honour of being able to claim the title of Singapore’s No. 1 agency has sparked a bizarre battle between two heavyweights.

In one corner is HSR International Realtors, which was named the largest real estate agency in Singapore by the Singapore Book of Records (SBOR) last month. The 27-year-old firm and its 5,136 agents, says chief executive (CEO) Patrick Liew, have since used ‘the largest real estate agency’ as a tagline for advertisements.

On Wednesday, however, a challenger emerged from the opposite corner. PropNex, now in its seventh year of business, sent out a statement claiming that its 5,686 agents make it ‘truly Singapore’s largest real estate company’ - a slogan it said has always been used on its website and has even been quoted in the media. ‘We have been advertised, quoted and accepted as the largest real estate agency in Singapore since 2003,’ CEO Mohamed Ismail told The Straits Times yesterday. ‘It is not official, but nobody disputed it until last month.’

He said that ‘he knew from the beginning that HSR’s claim had no merits’ because its office and staff sizes were lower than those of PropNex. HSR hit back by saying its claim was based on PropNex’s published figure of 3,800 agents. But PropNex said the figure referred to only ‘active agents’ - those who have closed a deal within the last year - while it has many more registered agents.

At the heart of this tussle is an issue more weighty than simply the flexing of mathematical muscle. Mr Mohamed said the conflicting claims have affected credibility and caused confusion among clients. ‘We were giving a pitch for a project in Malaysia when the developer asked us if it was true that PropNex had the largest agency, because they had seen HSR’s ad.’ He has since taken up the issue with Mr Ong Eng Huat, the SBOR’s president, and expects a response by next week.

Mr Ong said that ‘while at the time we were quite satisfied that HSR has the largest number of agents, the figure is always changing’. The SBOR is ‘reviewing the method of measuring’, and it is not prepared to do further audits until it comes up with ‘a better form of measurement’. Meanwhile, it is understood that HSR has been told not to attribute the claim of being the largest agency to the SBOR in its ads.

HSR’s Mr Liew told ST yesterday that size does not matter: ‘If we really wanted to play the numbers game, it’s not difficult. I can also produce 10,000 names, but where does it end?’
For him, ‘the important thing is not to be the largest, but to be the best’. ‘I lay claim to having the highest-paid agents. This month, my top agent is making at least $1.7 million. I throw my last dollar down that my top 30 agents will outdo their top 30. They cannot beat me.’

Another big gun, ERA, has refrained from jumping into the fray, even though it boasts more than 5,000 agents. ‘We are not interested in being the biggest,’ said assistant vice-president Eugene Lim. ‘(Being a) big agency doesn’t mean big market share. It’s about productivity; it’s the number of transactions you do.’

Source: The Straits Times, 02 June 2007
Posted by Property Wizkid

Fancy having part of $10m commissions? Be an Agent.
The smartest way to take advantage of the property upturn could be to become an estate agent. PropNex CEO Mohamed Ismail says that in April alone its agents earned more than $10 million commissions - twice as much as in April 2006. The number of transactions also increased - from 1,648 to 2,445 - over the period. And in the first three weeks of May, PropNex again recorded more than $10 million of commissions, which bodes well for the full year.

In 2006, commissions totalled $75 million, Mr Mohamed said. According to PropNex data, the increase in commissions has resulted from transactions in the private secondary market and residential rental market. Commissions from the private secondary market increased 200 per cent year on year in April. Slightly over 50 per cent of total commissions in April came from the private market, with the remainder from rental, commercial and Housing & Development Board transactions.

Interestingly, 21 per cent of total commissions resulted from transactions in prime districts 9, 10 and 11, the downtown core and Sentosa. PropNex has also wasted no time setting up a new luxury homes division headed by Douglas Wong, formerly associate director of Knight Frank’s Good Class Bungalow (GCB) arm Regal Homes.

On the performance so far, Mr Mohamed said: ‘The PropNex Grandeur Homes team is starting to show results, with five transactions closed in the core areas including Sentosa and downtown. Grandeur Homes is already serving more than 30 GCB clients and many high net-worth buyers looking to invest in Singapore.’ Mr Mohamed expects Grandeur to capture 20 per cent of all GCB sales within a year.

With the property market so active, PropNex has also seen record hires. In March, it took on a record 207 new agents. Based on the 5,686 licences renewed, as reported to the Inland Revenue Authority of Singapore at end-2006, Mr Mohamed said PropNex is Singapore’s biggest real estate company. ‘More people are attracted to the lucrative prospect of being their own boss and the unlimited possibilities sales can bring,’ he said.

Source: The Business Times, 02 June 2007
Posted by Property Wizkid

Tan Chin Tuan Mansion restored and extended
Tan Chin Tuan Mansion has been restored and redeveloped to include a luxury 20-storey condominium. But most of the units will only be for lease. Four of the 16 units will be kept by the family of the late Tan Chin Tuan. Based on the current benchmark price of about $2,500 psf for Suites @ Cairnhill, the remaining 12 have a market value of about $120 million.

The property has been redeveloped by a business entity called Cairnhill Rock and Chew Gek Khim, granddaughter of Tan Chin Tuan. ‘It has always been the intention of the private company to keep the entire building for sentimental and historical reasons,’ she said. The units are large at almost 4,000 sq ft each. Rents have not been fixed. Ms Chew said they will be benchmarked to market rates. ‘But we will be very selective in our choice of tenants, given the small number of units for lease and the fact that they will be living in close proximity to my family members.’

The development is being marketed by Knight Frank and temporary occupation permit (TOP) is expected by mid-2007. Leasing is not without its upside. For Q1 2007, the official rental index (non-landed) increased 8 per cent quarter on quarter and 23 per cent year on year.

A good indicator of possible rents is the recently launched Orchard Scotts Residences by Far East Organization (FEO) nearby. A spokesman for FEO said monthly rents range from about $8,300 for a 538 sq ft unit to $30,000 for a 3,810 sq ft unit, including a range of services.

Orchard Scotts comprises three blocks. And one of these - or 206 of the 387 units in the whole development - is reserved as serviced residences. Keppel Land is another developer that has held on to units to rent instead of sell. A Keppel Land spokesman said the 168 corporate residence units within the 969-unit Caribbean at Keppel Bay have been close to full occupancy since operations started in 2005.

Explaining its rationale, Keppel Land said: ‘The residences were set aside to cater to the growing number of international travellers here, especially foreigners who are drawn to the world-class waterfront lifestyle we are offering.’ Keppel Land may consider renting units at its new Reflections at Keppel Bay too. Keppel Land said: ‘We have successfully launched our first phase of Reflections at Keppel Bay and are planning for our second phase. As the completion of Reflections at Keppel Bay will take a few years, our options are open at this point in time.’

Source: The Business Times, 01 June 2007
Posted by Property Wizkid

China developer raises US$150m worth of bonds
Shanghai Zendai Property Ltd, which develops real estate in China, raised US$150 million from its first dollar-denominated bond sale, according to an e-mail statement sent to investors. The Hong Kong-listed developer priced the five-year fixed-rate notes to yield 10 per cent, or 5.19 percentage points above US Treasuries, the term sheet shows. Merrill Lynch & Co manages the sale.

The bonds are rated five levels below investment grade at B2 by Moody’s Investors Service, and one level higher at B+ by Standard & Poor’s. Shanghai Zendai’s profit rose 14 per cent to HK$230.5 million (S$45 million) in 2006 as it sold more properties in China. At the end of 2006, it had HK$814 million of bank loans, with HK$351 million due in one year, according to its earnings report.

Property prices in 70 large and medium-size Chinese cities rose 5.3 per cent in February from a year earlier, according to a government survey. New home prices increased 9.9 per cent in the southern city of Shenzhen and 9.7 per cent in Beijing. Lai Fung Holdings Ltd, a Hong Kong-based developer of property in China, in March sold US$200 million of seven-year bonds priced to yield 9.125 per cent.

The securities, rated B+ by S&P, now trade at 4.47 percentage points more than US Treasuries, according to Merrill Lynch.

Source: The Business Times, 31 May 2007
Posted by Property Wizkid