Business Times - 12 Jul 2008
S'pore 'very concerned' as visitor arrival growth slows: STB
SINGAPORE is 'very concerned' that the growth in visitor arrivals is slowing and is keeping a close watch on how it may affect the government's target for travellers to the island-state this year, Singapore Tourism Board (STB) deputy chairman and chief executive Lim Neo Chian said.
Growth in visitor arrivals eased to 0.8 per cent in April and May, the slowest expansion in a year, according to data from the STB. Visitors from Indonesia, Singapore's biggest visitor-generating nation, fell 12 per cent in May, the steepest decline among the city's largest markets.
'The growth rate has eased a little bit,' Mr Lim said in an interview in Singapore yesterday. 'The overall general environment is obviously very challenging in many of our key markets. We're very concerned and monitoring very carefully.'
Singapore may have fewer visitors than expected as inflation and a weaker global economic outlook curb travel plans. This may put at risk the city-state's target for tourist arrivals to increase 5 per cent to 10.8 million this year. The city also expects the number of visitors to rise to 17 million by 2015 with new attractions including two integrated resorts.
'It's a little bit too rushed and too quick to change our target,' Mr Lim said. 'It depends how big a drop' the Singapore tourism industry will face.
Asian policy-makers are predicting expansion this year will be at the lower end of their targets or are cutting growth forecasts as they increase estimates for inflation. Singapore's economy expanded at the slowest pace in five years in the second quarter as a 26-year-high inflation constrained spending.
Indonesia, South-east Asia's largest economy, may have expanded 6.1 per cent in the second quarter, the slowest pace in more than a year, Finance Minister Sri Mulyani Indrawati said on July 9. -- Bloomberg
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Saturday, July 12, 2008
Tampines Court collective sale in peril
July 12, 2008
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in the foot after a ruling by the Strata Titles Board (STB) yesterday almost certainly killed off its estate's $405 million collective sale.
It delayed seeking mandatory STB approval for the deal and is now caught in a deadline trap of its own making.
The key date is July 25, that is when the estate's sales committee must complete the deal. However, that looks impossible now after yesterday's STB decision.
The board ruled that it would not bring forward an Aug 7 hearing set to allow testimony from witnesses that have yet to be called.
The STB had pencilled in the date after listening to sale objectors on June 16 to 18 and 'taking into account the availability of all parties and the board', it said.
Until that Aug 7 hearing is conducted, the sale cannot be signed and sealed.
The Straits Times understands that the sales committee wanted a date change as the buyers - Frasers Centrepoint and Far East Organization - will not extend the completion deadline.
With no extension, the sale agreement will likely lapse on July 25. This means the developers can walk away from a deal that looks far less compelling now than last July, given souring homebuyer sentiment and escalating construction costs.
However, this might be a blessing in disguise for some owners at the estate. The deal was inked just before the property boom at prices around $430 per sq ft (psf), but private homes in Tampines now go from $550 to $700 psf.
The deadline crunch seems to be of the sales committee's own making.
The conditions of the sales agreement were met on July 25 last year but the committee delayed applying for the standard STB approval until Jan 7.
The committee told the STB that it wanted to await the outcome of legal challenges over the contentious Gillman Heights sale.
The committee argued that if the Gillman Heights sale was halted over issues of majority consent, it would have made a Tampines Court application futile.
In the Gillman Heights case, minority owners appealed all the way to the High Court, claiming that collective sale rules did not apply to former Housing and Urban Development Company (HUDC) estates.
Tampines Court is also a former HUDC estate so any ruling could have killed its own collective sale.
But Justice Choo Han Teck ruled last month that a privatised HUDC estate can be sold collectively if the requisite conditions are met.
While that also cleared the way for the Tampines Court sale, it left the sales committee with little time to tie up loose ends, including objections by minority owners.
The STB registrar had some sympathy yesterday for the committee's argument about why it delayed applying for sale approval.
But he pointed out that a sale agreement has a deadline and, by waiting for the High Court ruling, the committtee took the risk that it would not have enough time to get a ruling from the board before the expiry date.
'This is a calculated risk, whose consequences they will have to bear,' he said.
'The board should not be pressured to accommodate a deadline set by the applicants and the buyer.'
A lawyer acting for the minority owners told The Straits Times that he did not want to comment on the outcome.
The one lifeline for the majority owners would be if the buyers extend the deadline but that also looks a lost cause.
Far East Organization and Frasers Centrepoint told The Straits Times last night that they are ready to complete the deal, but 'the onus was upon the vendors to secure the STB order within the agreed timeframe, which is about 16 months from the date of the agreement'.
Savills director of marketing and business development Ku Swee Yong said since the deal was inked last July, construction costs have escalated a lot faster than mass market property prices.
'The project, unsurprisingly, has become less attractive,' he said.
Tampines Court is a sizeable 702,162 sq ft site with 560 units. It could be redeveloped into a new condominium with around 1,580 units averaging 1,300 sq ft.
jcheam@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in the foot after a ruling by the Strata Titles Board (STB) yesterday almost certainly killed off its estate's $405 million collective sale.
It delayed seeking mandatory STB approval for the deal and is now caught in a deadline trap of its own making.
The key date is July 25, that is when the estate's sales committee must complete the deal. However, that looks impossible now after yesterday's STB decision.
The board ruled that it would not bring forward an Aug 7 hearing set to allow testimony from witnesses that have yet to be called.
The STB had pencilled in the date after listening to sale objectors on June 16 to 18 and 'taking into account the availability of all parties and the board', it said.
Until that Aug 7 hearing is conducted, the sale cannot be signed and sealed.
The Straits Times understands that the sales committee wanted a date change as the buyers - Frasers Centrepoint and Far East Organization - will not extend the completion deadline.
With no extension, the sale agreement will likely lapse on July 25. This means the developers can walk away from a deal that looks far less compelling now than last July, given souring homebuyer sentiment and escalating construction costs.
However, this might be a blessing in disguise for some owners at the estate. The deal was inked just before the property boom at prices around $430 per sq ft (psf), but private homes in Tampines now go from $550 to $700 psf.
The deadline crunch seems to be of the sales committee's own making.
The conditions of the sales agreement were met on July 25 last year but the committee delayed applying for the standard STB approval until Jan 7.
The committee told the STB that it wanted to await the outcome of legal challenges over the contentious Gillman Heights sale.
The committee argued that if the Gillman Heights sale was halted over issues of majority consent, it would have made a Tampines Court application futile.
In the Gillman Heights case, minority owners appealed all the way to the High Court, claiming that collective sale rules did not apply to former Housing and Urban Development Company (HUDC) estates.
Tampines Court is also a former HUDC estate so any ruling could have killed its own collective sale.
But Justice Choo Han Teck ruled last month that a privatised HUDC estate can be sold collectively if the requisite conditions are met.
While that also cleared the way for the Tampines Court sale, it left the sales committee with little time to tie up loose ends, including objections by minority owners.
The STB registrar had some sympathy yesterday for the committee's argument about why it delayed applying for sale approval.
But he pointed out that a sale agreement has a deadline and, by waiting for the High Court ruling, the committtee took the risk that it would not have enough time to get a ruling from the board before the expiry date.
'This is a calculated risk, whose consequences they will have to bear,' he said.
'The board should not be pressured to accommodate a deadline set by the applicants and the buyer.'
A lawyer acting for the minority owners told The Straits Times that he did not want to comment on the outcome.
The one lifeline for the majority owners would be if the buyers extend the deadline but that also looks a lost cause.
Far East Organization and Frasers Centrepoint told The Straits Times last night that they are ready to complete the deal, but 'the onus was upon the vendors to secure the STB order within the agreed timeframe, which is about 16 months from the date of the agreement'.
Savills director of marketing and business development Ku Swee Yong said since the deal was inked last July, construction costs have escalated a lot faster than mass market property prices.
'The project, unsurprisingly, has become less attractive,' he said.
Tampines Court is a sizeable 702,162 sq ft site with 560 units. It could be redeveloped into a new condominium with around 1,580 units averaging 1,300 sq ft.
jcheam@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
MM Lee: Next 5 to 10 years the most promising for S'pore
July 12, 2008
MM Lee: Next 5 to 10 years the most promising for S'pore
By Bryan Lee
THE Singapore economy may be facing both immediate and long-term challenges but Minister Mentor Lee Kuan Yew thinks the next five to 10 years will be the most promising in the country's history.
In fact, the economy could still grow by as much as 8 per cent a year - a rapid clip for a developed nation - as efforts to transform Singapore into an international and cosmopolitan city pay off.
'We are moving to a new plateau, a new platform. You can see it visibly before your eyes,' said Mr Lee last night at the annual dinner of the Economic Society of Singapore.
'If there are no big recessions worldwide, growth can easily be 4 to 6 per cent, maybe 7 to 8 per cent.'
Mr Lee's optimism for the local economy comes even as gross domestic product growth in the second quarter slumped to its worst in five years.
A slowing US economy and accelerating inflation are taking their toll, while structural issues such as an ageing population and a widening income divide loom in the horizon. 'The point is that we have got enormous options,' he said.
He described to a packed Ritz Carlton Hotel ballroom his recent drive around the Marina Bay area, which is being developed as a new business district as well as the site for one of Singapore's two integrated resorts. 'It will be a beautiful city... in 10 years, it will be wonderful.'
Still, there is no room for complacency, given Singapore's lack of natural resources, he warned.
In fact, he said that retaining human talent is a big challenge: 'The biggest problem Singapore faces is that we have educated the Singaporean in English to the best of world standards. We have made him viable, employable anywhere in the world.'
This outflow is more than offset by an influx of 'even larger numbers of bright people from the region'. But a majority of 'born and bred Singaporeans' is still needed to ensure the new immigrants are rooted here.
'You need 65 per cent of the population to be born and bred Singaporeans, steeped with the culture, steeped with instincts of what a Singaporean is. They will slowly influence the migrants who join us to become like us.'
After Mr Lee's comments, prizes for an annual essay writing competition organised by the society and the Monetary Authority of Singapore (MAS) were given out.
National University of Singapore undergraduate Ishita Dhamani won first prize in the university category while former Anglo-Chinese Junior College student John Ying, who is in national service, came up tops in the pre-university category.
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
MM Lee: Next 5 to 10 years the most promising for S'pore
By Bryan Lee
THE Singapore economy may be facing both immediate and long-term challenges but Minister Mentor Lee Kuan Yew thinks the next five to 10 years will be the most promising in the country's history.
In fact, the economy could still grow by as much as 8 per cent a year - a rapid clip for a developed nation - as efforts to transform Singapore into an international and cosmopolitan city pay off.
'We are moving to a new plateau, a new platform. You can see it visibly before your eyes,' said Mr Lee last night at the annual dinner of the Economic Society of Singapore.
'If there are no big recessions worldwide, growth can easily be 4 to 6 per cent, maybe 7 to 8 per cent.'
Mr Lee's optimism for the local economy comes even as gross domestic product growth in the second quarter slumped to its worst in five years.
A slowing US economy and accelerating inflation are taking their toll, while structural issues such as an ageing population and a widening income divide loom in the horizon. 'The point is that we have got enormous options,' he said.
He described to a packed Ritz Carlton Hotel ballroom his recent drive around the Marina Bay area, which is being developed as a new business district as well as the site for one of Singapore's two integrated resorts. 'It will be a beautiful city... in 10 years, it will be wonderful.'
Still, there is no room for complacency, given Singapore's lack of natural resources, he warned.
In fact, he said that retaining human talent is a big challenge: 'The biggest problem Singapore faces is that we have educated the Singaporean in English to the best of world standards. We have made him viable, employable anywhere in the world.'
This outflow is more than offset by an influx of 'even larger numbers of bright people from the region'. But a majority of 'born and bred Singaporeans' is still needed to ensure the new immigrants are rooted here.
'You need 65 per cent of the population to be born and bred Singaporeans, steeped with the culture, steeped with instincts of what a Singaporean is. They will slowly influence the migrants who join us to become like us.'
After Mr Lee's comments, prizes for an annual essay writing competition organised by the society and the Monetary Authority of Singapore (MAS) were given out.
National University of Singapore undergraduate Ishita Dhamani won first prize in the university category while former Anglo-Chinese Junior College student John Ying, who is in national service, came up tops in the pre-university category.
bryanlee@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Traffic changes in Serangoon Road
July 12, 2008
Traffic changes in Serangoon Road
STARTING today, a stretch of Serangoon Road will be re-aligned to
accommodate the construction of the Woodsville Interchange, a massive
road project consisting of three tunnels and a flyover.
This is part of a series of road diversions and is expected to last
about three years, said the Land Transport Authority (LTA).
The stretch of Serangoon Road from its junction with Whampoa North
will be split into two sections under the road alignment.
Motorists travelling towards the PIE in the direction of Tuas should
keep to the left lanes of the road.
Those heading to Upper Serangoon Road and MacPherson Road should keep
to the right.
An existing U-turn from Serangoon Road to Bendemeer Road will also be
removed to facilitate construction of the interchange.
Traffic changes in Serangoon Road
STARTING today, a stretch of Serangoon Road will be re-aligned to
accommodate the construction of the Woodsville Interchange, a massive
road project consisting of three tunnels and a flyover.
This is part of a series of road diversions and is expected to last
about three years, said the Land Transport Authority (LTA).
The stretch of Serangoon Road from its junction with Whampoa North
will be split into two sections under the road alignment.
Motorists travelling towards the PIE in the direction of Tuas should
keep to the left lanes of the road.
Those heading to Upper Serangoon Road and MacPherson Road should keep
to the right.
An existing U-turn from Serangoon Road to Bendemeer Road will also be
removed to facilitate construction of the interchange.
Tampines Court collective sale in peril
July 12, 2008
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place
before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in
the foot after a ruling by the Strata Titles Board (STB) yesterday
almost certainly killed off its estate's $405 million collective
sale.
It delayed seeking mandatory STB approval for the deal and is now
caught in a deadline trap of its own making.
The key date is July 25, that is when the estate's sales committee
must complete the deal. However, that looks impossible now after
yesterday's STB decision.
The board ruled that it would not bring forward an Aug 7 hearing set
to allow testimony from witnesses that have yet to be called.
The STB had pencilled in the date after listening to sale objectors
on June 16 to 18 and 'taking into account the availability of all
parties and the board', it said.
Until that Aug 7 hearing is conducted, the sale cannot be signed and
sealed.
The Straits Times understands that the sales committee wanted a date
change as the buyers - Frasers Centrepoint and Far East Organization -
will not extend the completion deadline.
With no extension, the sale agreement will likely lapse on July 25.
This means the developers can walk away from a deal that looks far
less compelling now than last July, given souring homebuyer sentiment
and escalating construction costs.
However, this might be a blessing in disguise for some owners at the
estate. The deal was inked just before the property boom at prices
around $430 per sq ft (psf), but private homes in Tampines now go
from $550 to $700 psf.
The deadline crunch seems to be of the sales committee's own making.
The conditions of the sales agreement were met on July 25 last year
but the committee delayed applying for the standard STB approval
until Jan 7.
The committee told the STB that it wanted to await the outcome of
legal challenges over the contentious Gillman Heights sale.
The committee argued that if the Gillman Heights sale was halted over
issues of majority consent, it would have made a Tampines Court
application futile.
In the Gillman Heights case, minority owners appealed all the way to
the High Court, claiming that collective sale rules did not apply to
former Housing and Urban Development Company (HUDC) estates.
Tampines Court is also a former HUDC estate so any ruling could have
killed its own collective sale.
But Justice Choo Han Teck ruled last month that a privatised HUDC
estate can be sold collectively if the requisite conditions are met.
While that also cleared the way for the Tampines Court sale, it left
the sales committee with little time to tie up loose ends, including
objections by minority owners.
The STB registrar had some sympathy yesterday for the committee's
argument about why it delayed applying for sale approval.
But he pointed out that a sale agreement has a deadline and, by
waiting for the High Court ruling, the committtee took the risk that
it would not have enough time to get a ruling from the board before
the expiry date.
'This is a calculated risk, whose consequences they will have to
bear,' he said.
'The board should not be pressured to accommodate a deadline set by
the applicants and the buyer.'
A lawyer acting for the minority owners told The Straits Times that
he did not want to comment on the outcome.
The one lifeline for the majority owners would be if the buyers
extend the deadline but that also looks a lost cause.
Far East Organization and Frasers Centrepoint told The Straits Times
last night that they are ready to complete the deal, but 'the onus
was upon the vendors to secure the STB order within the agreed
timeframe, which is about 16 months from the date of the agreement'.
Savills director of marketing and business development Ku Swee Yong
said since the deal was inked last July, construction costs have
escalated a lot faster than mass market property prices.
'The project, unsurprisingly, has become less attractive,' he said.
Tampines Court is a sizeable 702,162 sq ft site with 560 units. It
could be redeveloped into a new condominium with around 1,580 units
averaging 1,300 sq ft.
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place
before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in
the foot after a ruling by the Strata Titles Board (STB) yesterday
almost certainly killed off its estate's $405 million collective
sale.
It delayed seeking mandatory STB approval for the deal and is now
caught in a deadline trap of its own making.
The key date is July 25, that is when the estate's sales committee
must complete the deal. However, that looks impossible now after
yesterday's STB decision.
The board ruled that it would not bring forward an Aug 7 hearing set
to allow testimony from witnesses that have yet to be called.
The STB had pencilled in the date after listening to sale objectors
on June 16 to 18 and 'taking into account the availability of all
parties and the board', it said.
Until that Aug 7 hearing is conducted, the sale cannot be signed and
sealed.
The Straits Times understands that the sales committee wanted a date
change as the buyers - Frasers Centrepoint and Far East Organization -
will not extend the completion deadline.
With no extension, the sale agreement will likely lapse on July 25.
This means the developers can walk away from a deal that looks far
less compelling now than last July, given souring homebuyer sentiment
and escalating construction costs.
However, this might be a blessing in disguise for some owners at the
estate. The deal was inked just before the property boom at prices
around $430 per sq ft (psf), but private homes in Tampines now go
from $550 to $700 psf.
The deadline crunch seems to be of the sales committee's own making.
The conditions of the sales agreement were met on July 25 last year
but the committee delayed applying for the standard STB approval
until Jan 7.
The committee told the STB that it wanted to await the outcome of
legal challenges over the contentious Gillman Heights sale.
The committee argued that if the Gillman Heights sale was halted over
issues of majority consent, it would have made a Tampines Court
application futile.
In the Gillman Heights case, minority owners appealed all the way to
the High Court, claiming that collective sale rules did not apply to
former Housing and Urban Development Company (HUDC) estates.
Tampines Court is also a former HUDC estate so any ruling could have
killed its own collective sale.
But Justice Choo Han Teck ruled last month that a privatised HUDC
estate can be sold collectively if the requisite conditions are met.
While that also cleared the way for the Tampines Court sale, it left
the sales committee with little time to tie up loose ends, including
objections by minority owners.
The STB registrar had some sympathy yesterday for the committee's
argument about why it delayed applying for sale approval.
But he pointed out that a sale agreement has a deadline and, by
waiting for the High Court ruling, the committtee took the risk that
it would not have enough time to get a ruling from the board before
the expiry date.
'This is a calculated risk, whose consequences they will have to
bear,' he said.
'The board should not be pressured to accommodate a deadline set by
the applicants and the buyer.'
A lawyer acting for the minority owners told The Straits Times that
he did not want to comment on the outcome.
The one lifeline for the majority owners would be if the buyers
extend the deadline but that also looks a lost cause.
Far East Organization and Frasers Centrepoint told The Straits Times
last night that they are ready to complete the deal, but 'the onus
was upon the vendors to secure the STB order within the agreed
timeframe, which is about 16 months from the date of the agreement'.
Savills director of marketing and business development Ku Swee Yong
said since the deal was inked last July, construction costs have
escalated a lot faster than mass market property prices.
'The project, unsurprisingly, has become less attractive,' he said.
Tampines Court is a sizeable 702,162 sq ft site with 560 units. It
could be redeveloped into a new condominium with around 1,580 units
averaging 1,300 sq ft.
US home foreclosures up 53%; record surge in bank seizures
July 12, 2008
US home foreclosures up 53%; record surge in bank seizures
NEW YORK - UNITED States foreclosures last month jumped 53 per cent
from a year earlier, and bank seizures rose the most on record as
falling property values and higher interest rates forced more
Americans to give up their homes.
More than 252,000 properties, or one in 500 US households, entered a
stage of the foreclosure process, RealtyTrac, a seller of default
data, said on Thursday.
Bank seizures rose 171 per cent, the most since January 2005 when the
company began tracking such statistics.
Foreclosure activity is at the highest since the Great Depression of
the 1930s, said Mr Rick Sharga, RealtyTrac's vice-president of
marketing.
Home prices, which fell the most on record in April, have created a
cycle where shrinking equity drives home owners into foreclosure,
which in turn pushes home prices down further, he added.
Mr Mark Zandi, the chief economist at Moody's Economy.com, said: 'The
foreclosure problem is getting worse and will stay with us well into
the next decade. The job market is eroding and home owners have less
equity.'
Mr Sharga said: 'We will have one million bank-owned properties by
the end of the year. That will represent between one-fourth and one-
third of all home sales.'
Credit Suisse analysts said in an April 23 report that about 53 per
cent of borrowers with sub-prime loans - those with poor or
incomplete credit histories - will have negative equity in their
homes at the end of the year, and the number will rise to 63 per cent
next year.
They added that tighter underwriting standards mean those borrowers
whose adjustable-rate mortgages were reset to higher payments cannot
refinance their loans.
About 2.7 million sub-prime borrowers will enter the foreclosure
process by the end of 2012, with a peak of new foreclosures in the
third quarter of this year, the analysts said.
Mr Zandi said that about US$3.5 trillion (S$4.8 trillion) in home
owner equity has been wiped out since the spring of 2006, when
housing prices were at their peak.
Rising mortgage defaults and auctions of foreclosed properties are
adding to a glut of unsold homes and prolonging the housing slump.
Efforts by the US Congress to insure as much as US$300 billion in
refinanced mortgages and save up to two million borrowers from
foreclosure can work only by 'slowing down or reversing home price
declines and equity deterioration', Credit Suisse said.
US home foreclosures up 53%; record surge in bank seizures
NEW YORK - UNITED States foreclosures last month jumped 53 per cent
from a year earlier, and bank seizures rose the most on record as
falling property values and higher interest rates forced more
Americans to give up their homes.
More than 252,000 properties, or one in 500 US households, entered a
stage of the foreclosure process, RealtyTrac, a seller of default
data, said on Thursday.
Bank seizures rose 171 per cent, the most since January 2005 when the
company began tracking such statistics.
Foreclosure activity is at the highest since the Great Depression of
the 1930s, said Mr Rick Sharga, RealtyTrac's vice-president of
marketing.
Home prices, which fell the most on record in April, have created a
cycle where shrinking equity drives home owners into foreclosure,
which in turn pushes home prices down further, he added.
Mr Mark Zandi, the chief economist at Moody's Economy.com, said: 'The
foreclosure problem is getting worse and will stay with us well into
the next decade. The job market is eroding and home owners have less
equity.'
Mr Sharga said: 'We will have one million bank-owned properties by
the end of the year. That will represent between one-fourth and one-
third of all home sales.'
Credit Suisse analysts said in an April 23 report that about 53 per
cent of borrowers with sub-prime loans - those with poor or
incomplete credit histories - will have negative equity in their
homes at the end of the year, and the number will rise to 63 per cent
next year.
They added that tighter underwriting standards mean those borrowers
whose adjustable-rate mortgages were reset to higher payments cannot
refinance their loans.
About 2.7 million sub-prime borrowers will enter the foreclosure
process by the end of 2012, with a peak of new foreclosures in the
third quarter of this year, the analysts said.
Mr Zandi said that about US$3.5 trillion (S$4.8 trillion) in home
owner equity has been wiped out since the spring of 2006, when
housing prices were at their peak.
Rising mortgage defaults and auctions of foreclosed properties are
adding to a glut of unsold homes and prolonging the housing slump.
Efforts by the US Congress to insure as much as US$300 billion in
refinanced mortgages and save up to two million borrowers from
foreclosure can work only by 'slowing down or reversing home price
declines and equity deterioration', Credit Suisse said.
US mulling over rescue of mortgage giants as fears grow
July 12, 2008
US mulling over rescue of mortgage giants as fears grow
Takeover planned as stocks of Fannie Mae and Freddie Mac sink over
funding concerns
TOKYO - THE United States government is considering taking over
mortgage finance giants Fannie Mae and Freddie Mac if their funding
problems worsen, The New York Times reported yesterday, citing people
briefed on the matter.
Shares of Fannie Mae and Freddie Mac, which are government-sponsored
but privately owned, plummeted this week, as investors questioned the
companies' ability to raise enough capital to stay afloat.
The fate of the companies, often described as the 'twin pillars' of
the American housing market, also has ramifications outside the US,
as foreign central banks hold a record US$978.98 billion (S$1.33
trillion) of US debt, including Fannie Mae and Freddie Mac mortgage
bonds.
News that the US government was considering direct action to save the
two firms boosted Asian stock markets.
Under a plan to place Fannie Mae and Freddie Mac under
conservatorship, the losses on the home loans they own or guarantee -
which amount to half of all US mortgages - will be paid by American
taxpayers, the Times said.
The companies' shareholders will get very little or nothing.
A conservator will have sweeping powers to overhaul Fannie Mae and
Freddie Mac, but will not have the authority to close them.
The Bush administration has also considered calling for legislation
giving an explicit government guarantee on the US$5 trillion of
mortgage debts owned or guaranteed by the firms. That is seen as a
less attractive option because it will effectively double the size of
the country's national debt.
The officials involved in discussions stressed that no action by the
administration was imminent, and that Fannie Mae and Freddie Mac were
not considered to be in a crisis.
A government rescue of both companies would mark the second time that
the US government has had to step in to support the financial system
since mounting defaults in the US sub-prime mortgage industry grew
into a global credit crisis in August last year.
The first time was four months ago, when the US Federal Reserve
backed a plan for JPMorgan Chase to buy investment bank Bear Stearns.
Enough concern has built among US government officials over the
health of Fannie Mae and Freddie Mac for them to hold a series of
meetings and conference calls to discuss contingency plans.
So far this week, Freddie Mac shares have plunged 45 per cent, while
Fannie Mae stock has lost 30 per cent. Their stock prices have been
pummelled this year after soaring delinquencies on home loans saw
them lose a combined US$11 billion.
Now, as housing prices decline further and foreclosures grow, the
markets are worried that Fannie Mae and Freddie Mac themselves may
default on their debts. There was also talk that they may need to
raise as much as US$75 billion of new capital to survive.
'If the situation is that serious, the US stock market is likely to
fall further on risk aversion and on concerns of a massive new share
issue to capitalise the mortgage firms,' said Shinko Securities chief
economist Hideki Hayashi in Tokyo.
US mulling over rescue of mortgage giants as fears grow
Takeover planned as stocks of Fannie Mae and Freddie Mac sink over
funding concerns
TOKYO - THE United States government is considering taking over
mortgage finance giants Fannie Mae and Freddie Mac if their funding
problems worsen, The New York Times reported yesterday, citing people
briefed on the matter.
Shares of Fannie Mae and Freddie Mac, which are government-sponsored
but privately owned, plummeted this week, as investors questioned the
companies' ability to raise enough capital to stay afloat.
The fate of the companies, often described as the 'twin pillars' of
the American housing market, also has ramifications outside the US,
as foreign central banks hold a record US$978.98 billion (S$1.33
trillion) of US debt, including Fannie Mae and Freddie Mac mortgage
bonds.
News that the US government was considering direct action to save the
two firms boosted Asian stock markets.
Under a plan to place Fannie Mae and Freddie Mac under
conservatorship, the losses on the home loans they own or guarantee -
which amount to half of all US mortgages - will be paid by American
taxpayers, the Times said.
The companies' shareholders will get very little or nothing.
A conservator will have sweeping powers to overhaul Fannie Mae and
Freddie Mac, but will not have the authority to close them.
The Bush administration has also considered calling for legislation
giving an explicit government guarantee on the US$5 trillion of
mortgage debts owned or guaranteed by the firms. That is seen as a
less attractive option because it will effectively double the size of
the country's national debt.
The officials involved in discussions stressed that no action by the
administration was imminent, and that Fannie Mae and Freddie Mac were
not considered to be in a crisis.
A government rescue of both companies would mark the second time that
the US government has had to step in to support the financial system
since mounting defaults in the US sub-prime mortgage industry grew
into a global credit crisis in August last year.
The first time was four months ago, when the US Federal Reserve
backed a plan for JPMorgan Chase to buy investment bank Bear Stearns.
Enough concern has built among US government officials over the
health of Fannie Mae and Freddie Mac for them to hold a series of
meetings and conference calls to discuss contingency plans.
So far this week, Freddie Mac shares have plunged 45 per cent, while
Fannie Mae stock has lost 30 per cent. Their stock prices have been
pummelled this year after soaring delinquencies on home loans saw
them lose a combined US$11 billion.
Now, as housing prices decline further and foreclosures grow, the
markets are worried that Fannie Mae and Freddie Mac themselves may
default on their debts. There was also talk that they may need to
raise as much as US$75 billion of new capital to survive.
'If the situation is that serious, the US stock market is likely to
fall further on risk aversion and on concerns of a massive new share
issue to capitalise the mortgage firms,' said Shinko Securities chief
economist Hideki Hayashi in Tokyo.
URA wins award for Bras Basah-Bugis master-planning efforts
11 July 2008
URA wins award for Bras Basah-Bugis master-planning efforts
By Wong Siew Ying, Channel NewsAsia
SINGAPORE: The Urban and Redevelopment Authority has won an
international award for its master-planning efforts for the Bras
Basah-Bugis district.
Dubbed as an enclave for arts, culture, learning and entertainment,
the 95-hectare district was conferred the Award for Excellence 2008
in Asia Pacific by the Urban Land Institute (ULI) - an international,
non-profit education and research institute.
The award is widely acknowledged in the land use industry as the most
prestigious in the world.
Work to revamp the Bras Basah-Bugis district started in 1989, to
inject vibrancy while preserving its rich architectural heritage.
Also nestled within the area are institutions offering diverse
learning opportunities.
They include the Singapore Management University (SMU), LASALLE
College of Arts, Nanyang Academy of Fine Arts and the upcoming School
of the Arts (SOTA).
It is the second time the URA has received accolades from ULI - the
first being an award given in 2006 for its conservation programme.
URA wins award for Bras Basah-Bugis master-planning efforts
By Wong Siew Ying, Channel NewsAsia
SINGAPORE: The Urban and Redevelopment Authority has won an
international award for its master-planning efforts for the Bras
Basah-Bugis district.
Dubbed as an enclave for arts, culture, learning and entertainment,
the 95-hectare district was conferred the Award for Excellence 2008
in Asia Pacific by the Urban Land Institute (ULI) - an international,
non-profit education and research institute.
The award is widely acknowledged in the land use industry as the most
prestigious in the world.
Work to revamp the Bras Basah-Bugis district started in 1989, to
inject vibrancy while preserving its rich architectural heritage.
Also nestled within the area are institutions offering diverse
learning opportunities.
They include the Singapore Management University (SMU), LASALLE
College of Arts, Nanyang Academy of Fine Arts and the upcoming School
of the Arts (SOTA).
It is the second time the URA has received accolades from ULI - the
first being an award given in 2006 for its conservation programme.
Friday, July 11, 2008
Price watch: Builders hit as Singapore sucks up materials
Price watch: Builders hit as Singapore sucks up materials
Contractors in Johor want the government to impose a higher export duty on some construction materials. -NST
Thu, Jul 10, 2008
The New Straits Times
By Sim Bak Heng
JOHOR BARU, MALAYSIA: Contractors in Johor want the government to impose a higher export duty on some construction materials as manufacturers prefer to sell their products to Singapore rather than meet the local demand.
They said this would be a preventive measure to curb the selfish act of those who are lured by the strong foreign exchange across the Causeway.
Johor Master Builders Association adviser Tan Wee Hiong said the shortage for red bricks was critical, which also saw a drastic price hike.
He said the problem was not new but the robust development taking place in the construction sector had compounded the worsening situation.
"The Singapore currency is growing stronger by the day and the exchange rate is hitting RM2.40 for every S$1 any time now.
"As all transactions are in Singapore dollars or US dollars, manufacturers will give special preference to sell their products to Singaporeans rather than locals.
"Although manufacturers are free to sell their products to whoever they wish, they shoulder the social responsibility to take care of the interests in the country first before others," he said in an interview.
Among the other construction materials which are also sold to Singapore are cement and steel, although there are cases of sand being sold to the republic as well.
Checks showed there are five brick makers, three cement makers and one steel maker in Johor.
Almost all of them have a market in Singapore.
Meanwhile, Tan said the price of construction materials had gone up steeply over the months and this had jeopardised the cost structure for contractors.
He said this was because manufacturer of construction materials would hike the prices of their products as and when they liked, when a construction project was half way in progress.
"They are no longer bound by contract to maintain the prices during the course of a construction project.
"The price increase is not small, too. For instance, red bricks, which are priced at 22 sen each last February, now cost 33 sen each, an increase of about 50 per cent."
On the outlook for the construction industry, Tan said the sale of houses costing RM200,000 and below would be severely affected while the market for luxury units would only be affected slightly.
Contractors in Johor want the government to impose a higher export duty on some construction materials. -NST
Thu, Jul 10, 2008
The New Straits Times
By Sim Bak Heng
JOHOR BARU, MALAYSIA: Contractors in Johor want the government to impose a higher export duty on some construction materials as manufacturers prefer to sell their products to Singapore rather than meet the local demand.
They said this would be a preventive measure to curb the selfish act of those who are lured by the strong foreign exchange across the Causeway.
Johor Master Builders Association adviser Tan Wee Hiong said the shortage for red bricks was critical, which also saw a drastic price hike.
He said the problem was not new but the robust development taking place in the construction sector had compounded the worsening situation.
"The Singapore currency is growing stronger by the day and the exchange rate is hitting RM2.40 for every S$1 any time now.
"As all transactions are in Singapore dollars or US dollars, manufacturers will give special preference to sell their products to Singaporeans rather than locals.
"Although manufacturers are free to sell their products to whoever they wish, they shoulder the social responsibility to take care of the interests in the country first before others," he said in an interview.
Among the other construction materials which are also sold to Singapore are cement and steel, although there are cases of sand being sold to the republic as well.
Checks showed there are five brick makers, three cement makers and one steel maker in Johor.
Almost all of them have a market in Singapore.
Meanwhile, Tan said the price of construction materials had gone up steeply over the months and this had jeopardised the cost structure for contractors.
He said this was because manufacturer of construction materials would hike the prices of their products as and when they liked, when a construction project was half way in progress.
"They are no longer bound by contract to maintain the prices during the course of a construction project.
"The price increase is not small, too. For instance, red bricks, which are priced at 22 sen each last February, now cost 33 sen each, an increase of about 50 per cent."
On the outlook for the construction industry, Tan said the sale of houses costing RM200,000 and below would be severely affected while the market for luxury units would only be affected slightly.
Price surge last year sees more owing over $1m
Business Times - 11 Jul 2008
Price surge last year sees more owing over $1m
Number of such borrowers nearly doubles to 8,280 in April from a yr ago
By SIOW LI SEN
BANKS have been tightening the screws on first-time home buyers but more big loans have been made. More speculators and investors have also taken additional mortgages.
The number of people owing more than $1 million on their home loan has almost doubled to 8,280 in April this year, from 4,695 in May last year, reflecting the record surge in property prices last year.
These rich borrowers make up 2.87 per cent of the total 288,399 real estate loans, according to data from Credit Bureau (Singapore).
Citibank Singapore business director Tan Chia Seng said that the bank has noticed a growing number of home borrowers with larger loan balances over the past year or so.
'This is mostly a function of the higher home prices in general. In addition, some developers have also taken to building large-sized luxury units - in prime areas as well as the outskirts - and this translates into bigger ticket mortgage sizes as well,' said Mr Tan.
The bulk of property buyers owe much less though. Over 72 per have less than $200,000 remaining on their home loans.
Banks have gotten more cautious on home loans applications since August last year, when news of the US sub-prime crisis exploded on the global financial markets.
Credit approval for home loans has dropped to 3,949 in April this year from a peak of 5,319 in August 2007, down 26 per cent.
The 30-month average is 3,935 applications approval each month.
'This could be due to more loan (application) rejections,' said Mark Rowley, Credit Bureau general manager.
With banks holding back, the number of first-time home borrowers has fallen steadily to 3,199 in April this year from 4,504 in May 2007.
But the number of people who are taking additional mortgages has risen, to 2,719 in April from 2,446 in December 2007. The number is still lower than the peak of 3,698 in August last year.
Said Koh Ching Ching, head of group corporate communications, OCBC Bank: 'Each application is assessed on the basis of a customer's credit worthiness and takes into consideration factors such as income level, credit history and repayment ability among others.
'Typically, the same factors will also be considered when a customer applies for a second loan although one of the key considerations would be the ability of the customer to service the total debt,' said Ms Koh.
The number of mortgage applications jumped 57 per cent in April 15,840 from the monthly average of 10,085 which could be due to a rash of deferred projects properties being completed.
A United Overseas Bank spokeswoman said that the bank has always taken a prudent approach in its credit assessment process.
'We would take into consideration the existing obligations a customer has and would consider the credit application if the customer meets our credit criteria, regardless of the type of payment schemes selected,' she said.
The good news from Credit Bureau is that the number of home buyers getting into problems continues to fall. In April 2008, 4,102 borrowers were delinquent or 1.42 per cent, down from 2.10 per cent in May last year.
On the big jump in those owing over $1 million, Mr Rowley said that the worry would be if interest rates move up and even more critically a change in the employment situation.
'If interest rates spike - they don't look like they're doing so - there could be some problems.
'The key is employment. In any market where you have full employment, that's fine,' said Mr Rowley. On that score, Singapore is in good shape.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Price surge last year sees more owing over $1m
Number of such borrowers nearly doubles to 8,280 in April from a yr ago
By SIOW LI SEN
BANKS have been tightening the screws on first-time home buyers but more big loans have been made. More speculators and investors have also taken additional mortgages.
The number of people owing more than $1 million on their home loan has almost doubled to 8,280 in April this year, from 4,695 in May last year, reflecting the record surge in property prices last year.
These rich borrowers make up 2.87 per cent of the total 288,399 real estate loans, according to data from Credit Bureau (Singapore).
Citibank Singapore business director Tan Chia Seng said that the bank has noticed a growing number of home borrowers with larger loan balances over the past year or so.
'This is mostly a function of the higher home prices in general. In addition, some developers have also taken to building large-sized luxury units - in prime areas as well as the outskirts - and this translates into bigger ticket mortgage sizes as well,' said Mr Tan.
The bulk of property buyers owe much less though. Over 72 per have less than $200,000 remaining on their home loans.
Banks have gotten more cautious on home loans applications since August last year, when news of the US sub-prime crisis exploded on the global financial markets.
Credit approval for home loans has dropped to 3,949 in April this year from a peak of 5,319 in August 2007, down 26 per cent.
The 30-month average is 3,935 applications approval each month.
'This could be due to more loan (application) rejections,' said Mark Rowley, Credit Bureau general manager.
With banks holding back, the number of first-time home borrowers has fallen steadily to 3,199 in April this year from 4,504 in May 2007.
But the number of people who are taking additional mortgages has risen, to 2,719 in April from 2,446 in December 2007. The number is still lower than the peak of 3,698 in August last year.
Said Koh Ching Ching, head of group corporate communications, OCBC Bank: 'Each application is assessed on the basis of a customer's credit worthiness and takes into consideration factors such as income level, credit history and repayment ability among others.
'Typically, the same factors will also be considered when a customer applies for a second loan although one of the key considerations would be the ability of the customer to service the total debt,' said Ms Koh.
The number of mortgage applications jumped 57 per cent in April 15,840 from the monthly average of 10,085 which could be due to a rash of deferred projects properties being completed.
A United Overseas Bank spokeswoman said that the bank has always taken a prudent approach in its credit assessment process.
'We would take into consideration the existing obligations a customer has and would consider the credit application if the customer meets our credit criteria, regardless of the type of payment schemes selected,' she said.
The good news from Credit Bureau is that the number of home buyers getting into problems continues to fall. In April 2008, 4,102 borrowers were delinquent or 1.42 per cent, down from 2.10 per cent in May last year.
On the big jump in those owing over $1 million, Mr Rowley said that the worry would be if interest rates move up and even more critically a change in the employment situation.
'If interest rates spike - they don't look like they're doing so - there could be some problems.
'The key is employment. In any market where you have full employment, that's fine,' said Mr Rowley. On that score, Singapore is in good shape.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Defaulters face more exposure as brokers look to credit bureau
Business Times - 11 Jul 2008
Defaulters face more exposure as brokers look to credit bureau
Brokerages may join the bureau and share information on errant clients
By CHOW PENN NEE
(SINGAPORE) Regular credit card defaulters, or those with a poor credit history, already have trouble tapping banks for loans - as information about them is available with Credit Bureau Singapore (CBS). Soon brokerages may not want them as customers either - if their bid to join the Credit Bureau comes to fruition.
What's more, those who consistently default paying up on share trades might find it hard to raise credit elsewhere too. That is because by joining CBS, the brokerages will not just get a fuller picture of their clients' credit-worthiness, but they will share their own information about their customers with the bureau.
BT understands that 13 local and foreign brokerages represented by the Securities Association of Singapore (SAS) are keen on sharing data with the CBS. The CBS - which counts banks, credit card companies and other financial institutions as its members - houses data on credit-related information such as repayment histories, risks of default and demographics of the clients.
Sharing such information helps credit providers make better lending decisions quickly and more objectively. With a complete risk profile of a customer, credit providers are better able to determine the likelihood of the customer repaying, thus enhancing their risk assessment capabilities.
Lim Eng Hai, chief executive of SAS, confirmed the intention of brokerages to join CBS, telling BT: 'We're talking to the credit bureau. This (sharing of information) is something brokers are interested in.'
He added though, that it is not a done deal yet. 'We're still sorting out details, and have not made a decision.' He said there are still some issues to iron out, and that the SAS needs to find out what other requirements it needs to fulfil before joining CBS.
Getting a better insight into their clients' repayment history would be beneficial to brokers, he said. 'Stockbroking is the management of credit risk, and this will help us to access useful info to better assess credit risk,' Mr Lim pointed out. Currently, brokers do not have a platform where they share information on clients' credit-worthiness among themselves.
William Lim, executive director of CBS, told BT that negotiations have already reached a stage where the data to be shared by stock brokers has been laid down.
'The information that the brokerages can give us will include whether clients' accounts run into delinquencies, whether they are timely in their repayment of trades, the amount of trades, the aggregate number of trading accounts, and the aggregate contra loss amount.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Defaulters face more exposure as brokers look to credit bureau
Brokerages may join the bureau and share information on errant clients
By CHOW PENN NEE
(SINGAPORE) Regular credit card defaulters, or those with a poor credit history, already have trouble tapping banks for loans - as information about them is available with Credit Bureau Singapore (CBS). Soon brokerages may not want them as customers either - if their bid to join the Credit Bureau comes to fruition.
What's more, those who consistently default paying up on share trades might find it hard to raise credit elsewhere too. That is because by joining CBS, the brokerages will not just get a fuller picture of their clients' credit-worthiness, but they will share their own information about their customers with the bureau.
BT understands that 13 local and foreign brokerages represented by the Securities Association of Singapore (SAS) are keen on sharing data with the CBS. The CBS - which counts banks, credit card companies and other financial institutions as its members - houses data on credit-related information such as repayment histories, risks of default and demographics of the clients.
Sharing such information helps credit providers make better lending decisions quickly and more objectively. With a complete risk profile of a customer, credit providers are better able to determine the likelihood of the customer repaying, thus enhancing their risk assessment capabilities.
Lim Eng Hai, chief executive of SAS, confirmed the intention of brokerages to join CBS, telling BT: 'We're talking to the credit bureau. This (sharing of information) is something brokers are interested in.'
He added though, that it is not a done deal yet. 'We're still sorting out details, and have not made a decision.' He said there are still some issues to iron out, and that the SAS needs to find out what other requirements it needs to fulfil before joining CBS.
Getting a better insight into their clients' repayment history would be beneficial to brokers, he said. 'Stockbroking is the management of credit risk, and this will help us to access useful info to better assess credit risk,' Mr Lim pointed out. Currently, brokers do not have a platform where they share information on clients' credit-worthiness among themselves.
William Lim, executive director of CBS, told BT that negotiations have already reached a stage where the data to be shared by stock brokers has been laid down.
'The information that the brokerages can give us will include whether clients' accounts run into delinquencies, whether they are timely in their repayment of trades, the amount of trades, the aggregate number of trading accounts, and the aggregate contra loss amount.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Bugis makeover wins global award
July 11, 2008
Bugis makeover wins global award
Past winners include Tokyo's Roppongi Hills and Shanghai's Xintiandi
By Hong Xinyi
BOASTING a mix of lovingly preserved old buildings and swanky new developments, the Bras Basah-Bugis area is home to funky arts schools, museums and theatres.
The transformation of the neighbourhood, once infamous for its population of transvestites, has been more than 20 years in the making.
Now, the makeover has won the Urban Redevelopment Authority (URA) plaudits from an international non-profit institute that specialises in land use and urban development.
The Urban Land Institute (ULI) handed the URA an excellence award for its work in the Bras Basah-Bugis area yesterday in Tokyo.
The annual honours are regarded by those in the land-planning industry as the most prestigious in the world.
As one of five award recipients this year, Bras Basah-Bugis joins past winners like Tokyo's Roppongi Hills and Shanghai's Xintiandi - both hip hot spots famous for their shopping and nightlife - in the winners' circle.
Calling the award a 'great honour', URA chief executive Cheong Koon Hean said: ' I'm very glad that our hard work over the past two decades has paid off and our planning efforts have been recognised at an international platform.'
This is the second time that the URA has won an ULI award. It was also recognised in 2006 for its conservation efforts.
Minister for National Development Mah Bow Tan credits the Bras Basah-Bugis success to a programme of development that built on the area's rich history and architectural heritage.
The 95ha area, the equivalent to about 190 football fields, includes 12 places of worship.
'What the URA did was to identify those features of the district that many Singaporeans hold dear, preserve its authenticity, enhance the distinctive character and introduce new uses that are complementary to existing ones,' Mr Mah told The Straits Times in an e-mail.
Once known for its rambunctious night bazaars, the area's modern-day rejuvenation began in 1989 with sale of a site for shopping mall Bugis Junction.
The URA also wooed schools like Singapore Management University and Lasalle College of the Arts to set up campuses here. Today, the 12,000 students from these institutions are a key part of the area's buzz.
Later this year, arts centre The Arts House will launch a school offering performing arts courses for children at Paradiz Centre.
Said Ms Adelina Ong, the centre's assistant manager of artistic development: 'It is an ideal location because it allows us to connect with these institutions and independent collectives, creating opportunities for our students to pursue further development in the arts through them.'
The arty vibe has been good for business as well. There has been an increase of over 30 per cent in median rent for the area's office space from 2000 to last year.
hxinyi@sph.com.sg
RICH HISTORY: The area is home to many well-preserved old buildings. -- PHOTO: URA
--------------------------------------------------------------------------------
Springing up soon in Bugis and Bras Basah
· South Beach
Scheduled for completion in 2012, this 3.5ha site in Beach Road includes three blocks in the former Beach Road Camp and non-commissioned officers' club building, as well as new offices, luxury hotels, apartments and shops.
· Bras Basah MRT station
Designed by local architecture firm Woha, this station will feature a reflecting pool that stretches between the National Museum and the Singapore Art Museum. It is part of the Circle Line, which is scheduled to be operational in 2010.
· Stamford Green
Expected to be ready later this year, this landscaped path will connect the Singapore Management University to Fort Canning Park.
· Iluma
This mall, located on a 8,921 sq m site opposite Bugis Junction, is expected to be ready by the end of this year. Sixty per cent of its space will be devoted to arts and entertainment outlets such as cineplexes and theatres.
· Former Nanyang Academy of Fine Arts campus in Middle Road
The National Arts Council has expressed an interest in turning the building into a centre for artists. Mr Andrew Fassam, the Urban Redevelopment Authority's deputy director of urban planning and design, said details had not been finalised.
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Bugis makeover wins global award
Past winners include Tokyo's Roppongi Hills and Shanghai's Xintiandi
By Hong Xinyi
BOASTING a mix of lovingly preserved old buildings and swanky new developments, the Bras Basah-Bugis area is home to funky arts schools, museums and theatres.
The transformation of the neighbourhood, once infamous for its population of transvestites, has been more than 20 years in the making.
Now, the makeover has won the Urban Redevelopment Authority (URA) plaudits from an international non-profit institute that specialises in land use and urban development.
The Urban Land Institute (ULI) handed the URA an excellence award for its work in the Bras Basah-Bugis area yesterday in Tokyo.
The annual honours are regarded by those in the land-planning industry as the most prestigious in the world.
As one of five award recipients this year, Bras Basah-Bugis joins past winners like Tokyo's Roppongi Hills and Shanghai's Xintiandi - both hip hot spots famous for their shopping and nightlife - in the winners' circle.
Calling the award a 'great honour', URA chief executive Cheong Koon Hean said: ' I'm very glad that our hard work over the past two decades has paid off and our planning efforts have been recognised at an international platform.'
This is the second time that the URA has won an ULI award. It was also recognised in 2006 for its conservation efforts.
Minister for National Development Mah Bow Tan credits the Bras Basah-Bugis success to a programme of development that built on the area's rich history and architectural heritage.
The 95ha area, the equivalent to about 190 football fields, includes 12 places of worship.
'What the URA did was to identify those features of the district that many Singaporeans hold dear, preserve its authenticity, enhance the distinctive character and introduce new uses that are complementary to existing ones,' Mr Mah told The Straits Times in an e-mail.
Once known for its rambunctious night bazaars, the area's modern-day rejuvenation began in 1989 with sale of a site for shopping mall Bugis Junction.
The URA also wooed schools like Singapore Management University and Lasalle College of the Arts to set up campuses here. Today, the 12,000 students from these institutions are a key part of the area's buzz.
Later this year, arts centre The Arts House will launch a school offering performing arts courses for children at Paradiz Centre.
Said Ms Adelina Ong, the centre's assistant manager of artistic development: 'It is an ideal location because it allows us to connect with these institutions and independent collectives, creating opportunities for our students to pursue further development in the arts through them.'
The arty vibe has been good for business as well. There has been an increase of over 30 per cent in median rent for the area's office space from 2000 to last year.
hxinyi@sph.com.sg
RICH HISTORY: The area is home to many well-preserved old buildings. -- PHOTO: URA
--------------------------------------------------------------------------------
Springing up soon in Bugis and Bras Basah
· South Beach
Scheduled for completion in 2012, this 3.5ha site in Beach Road includes three blocks in the former Beach Road Camp and non-commissioned officers' club building, as well as new offices, luxury hotels, apartments and shops.
· Bras Basah MRT station
Designed by local architecture firm Woha, this station will feature a reflecting pool that stretches between the National Museum and the Singapore Art Museum. It is part of the Circle Line, which is scheduled to be operational in 2010.
· Stamford Green
Expected to be ready later this year, this landscaped path will connect the Singapore Management University to Fort Canning Park.
· Iluma
This mall, located on a 8,921 sq m site opposite Bugis Junction, is expected to be ready by the end of this year. Sixty per cent of its space will be devoted to arts and entertainment outlets such as cineplexes and theatres.
· Former Nanyang Academy of Fine Arts campus in Middle Road
The National Arts Council has expressed an interest in turning the building into a centre for artists. Mr Andrew Fassam, the Urban Redevelopment Authority's deputy director of urban planning and design, said details had not been finalised.
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Second-quarter growth falls sharply to 1.9%
July 11, 2008
Second-quarter growth falls sharply to 1.9%
Economists cut full-year forecasts after dismal flash estimate
By Alvin Foo
ECONOMISTS have pared their forecasts for the year after growth in the second quarter suffered its biggest contraction in five years.
Estimates have been reined in from the 5.5 per cent or more tipped early this year to as low as 3.5 per cent as analysts come to grips with yesterday's shock numbers.
The economy grew at just 1.9 per cent year-on-year in the second quarter, well down on first-quarter growth of 6.9 per cent, according to flash estimates from the Trade and Industry Ministry (MTI).
'The slowdown chiefly reflected a sharp contraction in biomedical manufacturing output,' said the MTI. Its estimates are culled largely from data in the first two months of the April-June quarter and serve as an early indicator of growth.
The downbeat estimates stunned many economists, who responded by lowering their forecasts for this year and even 2009.
United Overseas Bank has trimmed its full-year forecast to 4.7 per cent and 5 per cent in 2009. It cited 'weaker-than-expected second- quarter figures, the vulnerability of Singapore's open economy to an external slowdown (and) the impact of a strong Singdollar on exports'.
CIMB-GK economist Song Seng Wun has cut his 2008 growth forecast from 5.7 per cent to 4.6 per cent.
Hong Kong-based Sun Mingchun of Lehman Brothers said: 'We expect GDP growth to slow sharply to 4.3 per cent in 2008 from 7.7 per cent in 2007.'
Standard Chartered's Alvin Liew, who had earlier predicted growth of 4.5 per cent, has slashed his forecast to just 3.5 per cent.
There may not be much help coming from the region either, with economists expecting other Asian countries to report plunging second-quarter figures soon.
Mr Sun said: 'As the smallest and most open economy in the region - and also the first to report second- quarter GDP - Singapore is likely the one being hit first by the global economic slowdown.'
But not all economists are paring their forecasts.
HSBC's Robert Prior-Wandesforde still tips growth at 5.8 per cent - at the upper end of the Government's 4-6 per cent forecast range.
And Mr Leong Wai Ho of Barclays Capital has retained his 5.2 per cent prediction.
Mr Leong believes the manufacturing sector will spur fourth-quarter growth when production of high-value drug ingredients resumes.
Not surprisingly, manufacturing was the chief culprit for the second-quarter slump, with the volatile pharmaceutical sector largely to blame.
Manufacturing output fell 5.6 per cent year-on-year after surging 12.7 per cent in the first quarter.
Economists say fluctuations in the pharmaceutical cluster, which accounts for about a fifth of total factory output, is unsurprising due to changing production cycles when firms shut factories to re-configure machinery.
Even the robust construction and service sectors saw slower growth.
Construction grew 15.2 per cent, down from 16.9 per cent in the first quarter, while services rose 6.9 per cent compared with 7.6 per cent in the previous quarter.
Economists say growth this year is likely to be driven mainly by the construction, offshore and marine and tourism sectors.
UOB said the likelihood of a technical recession - two consecutive quarters of negative growth - remains 'very low'. It expects a third-quarter rebound, driven by Formula One in September, strong construction growth and a possible manufacturing rebound.
alfoo@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Second-quarter growth falls sharply to 1.9%
Economists cut full-year forecasts after dismal flash estimate
By Alvin Foo
ECONOMISTS have pared their forecasts for the year after growth in the second quarter suffered its biggest contraction in five years.
Estimates have been reined in from the 5.5 per cent or more tipped early this year to as low as 3.5 per cent as analysts come to grips with yesterday's shock numbers.
The economy grew at just 1.9 per cent year-on-year in the second quarter, well down on first-quarter growth of 6.9 per cent, according to flash estimates from the Trade and Industry Ministry (MTI).
'The slowdown chiefly reflected a sharp contraction in biomedical manufacturing output,' said the MTI. Its estimates are culled largely from data in the first two months of the April-June quarter and serve as an early indicator of growth.
The downbeat estimates stunned many economists, who responded by lowering their forecasts for this year and even 2009.
United Overseas Bank has trimmed its full-year forecast to 4.7 per cent and 5 per cent in 2009. It cited 'weaker-than-expected second- quarter figures, the vulnerability of Singapore's open economy to an external slowdown (and) the impact of a strong Singdollar on exports'.
CIMB-GK economist Song Seng Wun has cut his 2008 growth forecast from 5.7 per cent to 4.6 per cent.
Hong Kong-based Sun Mingchun of Lehman Brothers said: 'We expect GDP growth to slow sharply to 4.3 per cent in 2008 from 7.7 per cent in 2007.'
Standard Chartered's Alvin Liew, who had earlier predicted growth of 4.5 per cent, has slashed his forecast to just 3.5 per cent.
There may not be much help coming from the region either, with economists expecting other Asian countries to report plunging second-quarter figures soon.
Mr Sun said: 'As the smallest and most open economy in the region - and also the first to report second- quarter GDP - Singapore is likely the one being hit first by the global economic slowdown.'
But not all economists are paring their forecasts.
HSBC's Robert Prior-Wandesforde still tips growth at 5.8 per cent - at the upper end of the Government's 4-6 per cent forecast range.
And Mr Leong Wai Ho of Barclays Capital has retained his 5.2 per cent prediction.
Mr Leong believes the manufacturing sector will spur fourth-quarter growth when production of high-value drug ingredients resumes.
Not surprisingly, manufacturing was the chief culprit for the second-quarter slump, with the volatile pharmaceutical sector largely to blame.
Manufacturing output fell 5.6 per cent year-on-year after surging 12.7 per cent in the first quarter.
Economists say fluctuations in the pharmaceutical cluster, which accounts for about a fifth of total factory output, is unsurprising due to changing production cycles when firms shut factories to re-configure machinery.
Even the robust construction and service sectors saw slower growth.
Construction grew 15.2 per cent, down from 16.9 per cent in the first quarter, while services rose 6.9 per cent compared with 7.6 per cent in the previous quarter.
Economists say growth this year is likely to be driven mainly by the construction, offshore and marine and tourism sectors.
UOB said the likelihood of a technical recession - two consecutive quarters of negative growth - remains 'very low'. It expects a third-quarter rebound, driven by Formula One in September, strong construction growth and a possible manufacturing rebound.
alfoo@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
Thursday, July 10, 2008
Prime rents poised to ease further
July 10, 2008
Prime rents poised to ease further
JLL sees more falls over next half year but rest of market should stay stable
By Joyce Teo
THE surging rents in prime areas that have had expatriates screaming for the best part of a year look to be easing, with some condos already registering falls of up to 12 per cent.
The declines are expected to intensify over the next three to six months, reversing a trend that saw some rents double or treble during the property peak last year.
Consultant Jones Lang LaSalle (JLL) said increased supply from newly built condominiums and a weakening economy are behind the projected prime rent slide, although rents in other parts of Singapore should stay largely stable.
Expats have also been voting with their feet and abandoning pricey prime areas and moving to fringe locations - and nudging rents there up a little in the process, said Dr Chua Yang Liang, the firm's head of research (South-East Asia).
Rents in the East Coast area, for example, rose 1.4 per cent in the first quarter but are now tipped to grow at a slower pace or even stay unchanged.
This is in contrast to prime areas, where landlords are feeling the chill of the new economic headwinds.
For instance, at Cuscaden Residences in the Tanglin area, rentals have fallen 12 per cent, from $6.20 per sq ft (psf) a month in the fourth quarter of last year to $5.46 psf in the first quarter of this year, said JLL.
A 1,485 sq ft unit will now fetch about $8,100, down from $9,200 at the end of last year.
Over at Tanglin Park, rentals have fallen 3.1 per cent from $5.21 psf to $5.05 psf.
Islandwide, supply started creeping up from the third quarter of last year, said Dr Chua.
But not all owners are yet willing to lower their expectations, said market watchers.
'The rental market is a lot slower than last year,' said Ms Kavita Borglin, an agent with Premiere Realty, who said rents in prime areas will be hit by new supply, particularly smaller units.
'The availability of one- to three-bedroom apartments has increased so rents have softened,' she said.
At Robertson 100 in Robertson Quay, at least 10 two-bedroom flats are on the market but the owners were all reluctant to lower their asking rents of $5,000 to $6,000, she said.
Ms Borglin's client, an expat with a rental budget of $4,500, eventually settled for a Newton area apartment.
She added that owners with large apartments of four bedrooms or more could still keep the same rents, as such large flats are still hard to come by.
JLL said Singapore's rating as the 13th most expensive Asian city for expats, coupled with a slower hiring pace in the coming months, may lead to fewer leasing deals over the remainder of the year.
A lacklustre collective sale market and weakening housing prices will continue to hit sentiment in the non-landed rental home market, said Dr Chua.
Meanwhile, JLL said in a statement yesterday that it has put Goldhill Centre near Novena MRT station up for sale. The indicative price for the freehold commercial site is $315 million.
DECLINE: The drop in prime rentals in projects such as Tanglin Park is due to new units on the market and a slowing economy. -- BT FILE PHOTO
joyceteo@sph.com.sg
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition o
Prime rents poised to ease further
JLL sees more falls over next half year but rest of market should stay stable
By Joyce Teo
THE surging rents in prime areas that have had expatriates screaming for the best part of a year look to be easing, with some condos already registering falls of up to 12 per cent.
The declines are expected to intensify over the next three to six months, reversing a trend that saw some rents double or treble during the property peak last year.
Consultant Jones Lang LaSalle (JLL) said increased supply from newly built condominiums and a weakening economy are behind the projected prime rent slide, although rents in other parts of Singapore should stay largely stable.
Expats have also been voting with their feet and abandoning pricey prime areas and moving to fringe locations - and nudging rents there up a little in the process, said Dr Chua Yang Liang, the firm's head of research (South-East Asia).
Rents in the East Coast area, for example, rose 1.4 per cent in the first quarter but are now tipped to grow at a slower pace or even stay unchanged.
This is in contrast to prime areas, where landlords are feeling the chill of the new economic headwinds.
For instance, at Cuscaden Residences in the Tanglin area, rentals have fallen 12 per cent, from $6.20 per sq ft (psf) a month in the fourth quarter of last year to $5.46 psf in the first quarter of this year, said JLL.
A 1,485 sq ft unit will now fetch about $8,100, down from $9,200 at the end of last year.
Over at Tanglin Park, rentals have fallen 3.1 per cent from $5.21 psf to $5.05 psf.
Islandwide, supply started creeping up from the third quarter of last year, said Dr Chua.
But not all owners are yet willing to lower their expectations, said market watchers.
'The rental market is a lot slower than last year,' said Ms Kavita Borglin, an agent with Premiere Realty, who said rents in prime areas will be hit by new supply, particularly smaller units.
'The availability of one- to three-bedroom apartments has increased so rents have softened,' she said.
At Robertson 100 in Robertson Quay, at least 10 two-bedroom flats are on the market but the owners were all reluctant to lower their asking rents of $5,000 to $6,000, she said.
Ms Borglin's client, an expat with a rental budget of $4,500, eventually settled for a Newton area apartment.
She added that owners with large apartments of four bedrooms or more could still keep the same rents, as such large flats are still hard to come by.
JLL said Singapore's rating as the 13th most expensive Asian city for expats, coupled with a slower hiring pace in the coming months, may lead to fewer leasing deals over the remainder of the year.
A lacklustre collective sale market and weakening housing prices will continue to hit sentiment in the non-landed rental home market, said Dr Chua.
Meanwhile, JLL said in a statement yesterday that it has put Goldhill Centre near Novena MRT station up for sale. The indicative price for the freehold commercial site is $315 million.
DECLINE: The drop in prime rentals in projects such as Tanglin Park is due to new units on the market and a slowing economy. -- BT FILE PHOTO
joyceteo@sph.com.sg
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Simon says: Home prices have hit floor
Simon says: Home prices have hit floor
Head of property developer SC Global still bullish on the local real estate market
Thursday • July 10, 2008
CONRAD RAJ
editor-at-large conrad@mediacorp.com.sg
JUDGING from recent transactions, property prices appear to have hit or are near the floor, according to Mr Simon Cheong ,the president of the Real Estate Developers’ Association of Singapore (Redas).
As evidence, Mr Cheong, the head of high-end property developer SC Global, points to recent transactions of luxury apartments at Nassim Park and Goodwood Residences, which went for nearly $3,000 psf and $2,800 psf respectively.
“The high-end is the leading indicator. Why? Now you see the sophisticated investor coming in — people who spend $10 million, $20 million, $30 million (on a property) — these guys are no fools you know,” he says noting that during the 1997 financial crisis luxury flats like those at Ardmore Park were selling for just $1,000 psf.
Even mid-class units at developments like those at Dakota, Clover by the Park and Livia are enjoying brisk sales.
“Nett nett, property is still a great performer in the mid to long term. For example, the stock market index in 1998 was 800 and today it is 2900. Property appreciation is actually comparable, if not better, if one factors in rentals received,” Mr Cheong says.
The property market is driven very much by sentiment, and not just by the laws of supply and demand — the “feel good” factor, he says.
According to Mr Cheong developers’ prices have fallen by 30 per cent in all sectors of the market since their peak last year, but are still double those before the sub-prime problem kicked in last August.
“The current situation is timely, as since 2005 the property market has been climbing relentlessly for eight straight quarters according to URA (Urban Redevelopment Authority) figures. So, it’s time it took a breather.
“We developers were getting concerned that it was climbing so fast. So the sub-prime crisis, in a way hit at the right time and took some of the steam off the market. In a way it came as a relief to developers who were afraid that the steep climb in prices could tempt the authorities to take measures to curb speculation,” Mr Cheong told Today.
He also pointed out that it was not in the interest of developers to see prices going up too fast: “There is no reason why developers would like to see an exuberant market and see the bubble burst.”
But he claims that his positive outlook for the property market is also driven by fundamentals as interest rates are at present so low and the inflation rate so high it does not make sense to keep your money in the bank.
“What do I do if I have a lot of money in my bank account earning 0.6-per-cent interest while inflation is 6 per cent or more, and my money gets smaller and smaller by the day?” he asked.
One answer is to put your money in property as in the long run it is a better hedge against inflation than equities.
Furthermore, property rentals currently provide yields of 2 to 4 per cent, again better than putting your money in the bank.
And there is plenty of money around for when Standard Chartered Bank, earlier this month offered a promotional deposit rate of 2.28 per cent, it was so swamped that it had to withdraw the offer in just two days.
Mr Cheong expects interest rates to remain low over the next two years or so.
The supply of properties is also not as high as many people think. He pointed to a recent Citibank report which said that the bank sees no oversupply of homes over the next two years.
The report estimated that only 60 per cent of the 30,000 units forecast by the URA, will be completed during this period as by end March there were 6,000 en bloc flats that had yet to be demolished.
For en blocs to return, prices will have to be double what they are now, especially with no plot ratio increase in the recent announcement of the Singapore Master Plan by URA, Mr Cheong said.
High construction costs have also resulted in many projects being delayed. With the many building projects going on — both by the private (including the integrated resort projects) and public sectors — and high material costs caused by worldwide demand, constructions costs will remain for some years, Mr Cheong said.
He pointed out at the same time that construction costs here are currently higher than those of Dubai or Hong Kong.
“It takes three months to tear a building down but three years to put them up. Once you have taken it down, supply is taken off immediately but to put that supply back it will take three years,” he said.
Construction costs are now double what they were a year ago, with high end building costs between $600 and 800 psf and at the low end from $300 to $350 psf.
Sometimes Singaporeans also do not realise that market here being relatively small, it would take less than 1 per cent of the available global funds to see the market run up. So, it is not unreasonable to expect a strong turnaround when the sentiment improves, Mr Cheong said.:
He added that Singapore has also become a global city and price comparisons of property were now benchmarked against cities like London, Hong Kong, Shanghai and New York rather than against historical prices here.
“And contrary to market perception, funding is not an issue, There is no shortage of funding for end purchasers as evidenced by various bank packages (for mortgage loans),” he noted.
“My advice to potential buyers is that if you do not have high exposure to the property market, it is an opportune time to consider property”, he said.
Copyright MediaCorp Press Ltd. All rights reserved.
Head of property developer SC Global still bullish on the local real estate market
Thursday • July 10, 2008
CONRAD RAJ
editor-at-large conrad@mediacorp.com.sg
JUDGING from recent transactions, property prices appear to have hit or are near the floor, according to Mr Simon Cheong ,the president of the Real Estate Developers’ Association of Singapore (Redas).
As evidence, Mr Cheong, the head of high-end property developer SC Global, points to recent transactions of luxury apartments at Nassim Park and Goodwood Residences, which went for nearly $3,000 psf and $2,800 psf respectively.
“The high-end is the leading indicator. Why? Now you see the sophisticated investor coming in — people who spend $10 million, $20 million, $30 million (on a property) — these guys are no fools you know,” he says noting that during the 1997 financial crisis luxury flats like those at Ardmore Park were selling for just $1,000 psf.
Even mid-class units at developments like those at Dakota, Clover by the Park and Livia are enjoying brisk sales.
“Nett nett, property is still a great performer in the mid to long term. For example, the stock market index in 1998 was 800 and today it is 2900. Property appreciation is actually comparable, if not better, if one factors in rentals received,” Mr Cheong says.
The property market is driven very much by sentiment, and not just by the laws of supply and demand — the “feel good” factor, he says.
According to Mr Cheong developers’ prices have fallen by 30 per cent in all sectors of the market since their peak last year, but are still double those before the sub-prime problem kicked in last August.
“The current situation is timely, as since 2005 the property market has been climbing relentlessly for eight straight quarters according to URA (Urban Redevelopment Authority) figures. So, it’s time it took a breather.
“We developers were getting concerned that it was climbing so fast. So the sub-prime crisis, in a way hit at the right time and took some of the steam off the market. In a way it came as a relief to developers who were afraid that the steep climb in prices could tempt the authorities to take measures to curb speculation,” Mr Cheong told Today.
He also pointed out that it was not in the interest of developers to see prices going up too fast: “There is no reason why developers would like to see an exuberant market and see the bubble burst.”
But he claims that his positive outlook for the property market is also driven by fundamentals as interest rates are at present so low and the inflation rate so high it does not make sense to keep your money in the bank.
“What do I do if I have a lot of money in my bank account earning 0.6-per-cent interest while inflation is 6 per cent or more, and my money gets smaller and smaller by the day?” he asked.
One answer is to put your money in property as in the long run it is a better hedge against inflation than equities.
Furthermore, property rentals currently provide yields of 2 to 4 per cent, again better than putting your money in the bank.
And there is plenty of money around for when Standard Chartered Bank, earlier this month offered a promotional deposit rate of 2.28 per cent, it was so swamped that it had to withdraw the offer in just two days.
Mr Cheong expects interest rates to remain low over the next two years or so.
The supply of properties is also not as high as many people think. He pointed to a recent Citibank report which said that the bank sees no oversupply of homes over the next two years.
The report estimated that only 60 per cent of the 30,000 units forecast by the URA, will be completed during this period as by end March there were 6,000 en bloc flats that had yet to be demolished.
For en blocs to return, prices will have to be double what they are now, especially with no plot ratio increase in the recent announcement of the Singapore Master Plan by URA, Mr Cheong said.
High construction costs have also resulted in many projects being delayed. With the many building projects going on — both by the private (including the integrated resort projects) and public sectors — and high material costs caused by worldwide demand, constructions costs will remain for some years, Mr Cheong said.
He pointed out at the same time that construction costs here are currently higher than those of Dubai or Hong Kong.
“It takes three months to tear a building down but three years to put them up. Once you have taken it down, supply is taken off immediately but to put that supply back it will take three years,” he said.
Construction costs are now double what they were a year ago, with high end building costs between $600 and 800 psf and at the low end from $300 to $350 psf.
Sometimes Singaporeans also do not realise that market here being relatively small, it would take less than 1 per cent of the available global funds to see the market run up. So, it is not unreasonable to expect a strong turnaround when the sentiment improves, Mr Cheong said.:
He added that Singapore has also become a global city and price comparisons of property were now benchmarked against cities like London, Hong Kong, Shanghai and New York rather than against historical prices here.
“And contrary to market perception, funding is not an issue, There is no shortage of funding for end purchasers as evidenced by various bank packages (for mortgage loans),” he noted.
“My advice to potential buyers is that if you do not have high exposure to the property market, it is an opportune time to consider property”, he said.
Copyright MediaCorp Press Ltd. All rights reserved.
HOME PRICE REBOUND COULD TAKE TIME
HOME PRICE REBOUND COULD TAKE TIME
Continued weakness comes amid caution caused by inflation and bleak outlook
Thursday • July 10, 2008
CARMEN LEE
RECENT developments in the local property market have sent conflicting signals to investors. Several developers have indicated willingness to delay launches as residential property prices show signs of weakness, while others are pointing to still-strong demand. Meanwhile, market data from the Urban Redevelopment Authority (URA) has indicated that the pace of increase is slowing down. In fact, the second quarter increase is the slowest rate of increase since the third quarter of 2004.
Market analysts have also downgraded their ratings on property stocks in view of the slowing demand, with certain segments more susceptible to further downward price revisions. While the delay in property launches looks negative at first glance, it is actually a good move to regulate the supply of units coming onto the market and should not be viewed wholly as a negative move.
Residential property prices stayed resilient in the first quarter of 2008, with the property price index up 3.8 per cent from a quarter ago, but this eased to a growth of a mere 0.4 per cent quarter-on-quarter in the second quarter, based on the latest URA flash estimate, pointing to likely weakness.
Transaction volumes have been declining since the second quarter of 2007, plunging to a low of 762 transactions in the first quarter of this year. Such a trend points towards an inevitable correction in prices as historically, a price correction would follow about one to five quarters after transaction volume has peaked in a rising property market.
A sharp recovery in transaction volume over the near-term may avert a price correction, but is unlikely to occur in view of present global woes resulting from record high oil prices and high inflationary fears.
First, foreign interest in local properties is waning, as foreign buyers turn cautious over subprime issues and the credit crunch. Secondly, the recent en bloc fever, which fuelled part of the demand for housing by the displacement of en bloc sellers, has slowed in recent months. Lastly, the withdrawal of the deferred payment scheme has taken out the speculative transactions in the property market, as seen from the declining number of subsale transactions.
I would also caution against using property as a hedge against inflation, as there is no conclusive evidence of the correlation between inflation and property prices. Properties are cyclical in nature and are subject to market sentiment. As such, inflationary pressure is unlikely to have any positive impact on property prices, as buyers are likely to exercise greater caution in light of the weakening sentiment in the property market.
The recent release of the sites under the Government Land Sales programme for the second half of this year further confirmed the weakening sentiment in the residential property sector. The number of residential sites under the confirmed list for the second half of this year has been halved, from eight sites released in the first half of this year to four sites planned in the second. Recent bids for government sites had also came in below market expectations, another sign of cautiousness among developers.
Going forward, we expect to seefurther weakness in residential property prices. Sentiment is likely to remain cautious against the backdrop of a weaker economic outlook, tighter credit market and rising inflation. This should deter buyers from spending on big ticket items. With the prevailing cautious market sentiment, and if prices trend lower, smaller developers with comparatively lower holding power are likely to offload their units onto the market to reduce gearings and holding costs.
The high-end segment of the property market is also likely to be at risk to price correction, as this segment has been the driving factor for the run-up in property prices since the beginning of 2006. With foreign investors turning wary, this could result in lower demand. For the mass market, a surge in launches in the first quarter of this year may have caused buyers to be more cautious, but we expect the take-up rate for mass market properties to move up once concern of over-supply eases. In addition, prices for the mass market segment have not moved up as rapidly as those for the high-end segment.
The writer is head of research atOCBC Investment Research.
Copyright MediaCorp Press Ltd. All rights reserved.
Continued weakness comes amid caution caused by inflation and bleak outlook
Thursday • July 10, 2008
CARMEN LEE
RECENT developments in the local property market have sent conflicting signals to investors. Several developers have indicated willingness to delay launches as residential property prices show signs of weakness, while others are pointing to still-strong demand. Meanwhile, market data from the Urban Redevelopment Authority (URA) has indicated that the pace of increase is slowing down. In fact, the second quarter increase is the slowest rate of increase since the third quarter of 2004.
Market analysts have also downgraded their ratings on property stocks in view of the slowing demand, with certain segments more susceptible to further downward price revisions. While the delay in property launches looks negative at first glance, it is actually a good move to regulate the supply of units coming onto the market and should not be viewed wholly as a negative move.
Residential property prices stayed resilient in the first quarter of 2008, with the property price index up 3.8 per cent from a quarter ago, but this eased to a growth of a mere 0.4 per cent quarter-on-quarter in the second quarter, based on the latest URA flash estimate, pointing to likely weakness.
Transaction volumes have been declining since the second quarter of 2007, plunging to a low of 762 transactions in the first quarter of this year. Such a trend points towards an inevitable correction in prices as historically, a price correction would follow about one to five quarters after transaction volume has peaked in a rising property market.
A sharp recovery in transaction volume over the near-term may avert a price correction, but is unlikely to occur in view of present global woes resulting from record high oil prices and high inflationary fears.
First, foreign interest in local properties is waning, as foreign buyers turn cautious over subprime issues and the credit crunch. Secondly, the recent en bloc fever, which fuelled part of the demand for housing by the displacement of en bloc sellers, has slowed in recent months. Lastly, the withdrawal of the deferred payment scheme has taken out the speculative transactions in the property market, as seen from the declining number of subsale transactions.
I would also caution against using property as a hedge against inflation, as there is no conclusive evidence of the correlation between inflation and property prices. Properties are cyclical in nature and are subject to market sentiment. As such, inflationary pressure is unlikely to have any positive impact on property prices, as buyers are likely to exercise greater caution in light of the weakening sentiment in the property market.
The recent release of the sites under the Government Land Sales programme for the second half of this year further confirmed the weakening sentiment in the residential property sector. The number of residential sites under the confirmed list for the second half of this year has been halved, from eight sites released in the first half of this year to four sites planned in the second. Recent bids for government sites had also came in below market expectations, another sign of cautiousness among developers.
Going forward, we expect to seefurther weakness in residential property prices. Sentiment is likely to remain cautious against the backdrop of a weaker economic outlook, tighter credit market and rising inflation. This should deter buyers from spending on big ticket items. With the prevailing cautious market sentiment, and if prices trend lower, smaller developers with comparatively lower holding power are likely to offload their units onto the market to reduce gearings and holding costs.
The high-end segment of the property market is also likely to be at risk to price correction, as this segment has been the driving factor for the run-up in property prices since the beginning of 2006. With foreign investors turning wary, this could result in lower demand. For the mass market, a surge in launches in the first quarter of this year may have caused buyers to be more cautious, but we expect the take-up rate for mass market properties to move up once concern of over-supply eases. In addition, prices for the mass market segment have not moved up as rapidly as those for the high-end segment.
The writer is head of research atOCBC Investment Research.
Copyright MediaCorp Press Ltd. All rights reserved.
Bay window loophole slammed shut by URA
Business Times - 10 Jul 2008
Bay window loophole slammed shut by URA
Developers will now have to include planter boxes, bay windows in GFA
By KALPANA RASHIWALA
(SINGAPORE) Here's some bad news for developers: a loophole that helped them sell in excess of the gross floor area (GFA) has been plugged.
Till now, bay windows and planter boxes, which often make up around 5 per cent of a condo's saleable area, had been exempted from GFA calculations. But in providing them to buyers, developers had been charging buyers for them.
This exemption will no longer apply from Oct 7, according to a circular issued by the Urban Redevelopment Authority (URA) on Monday.
The exemption has led to 'unintended and undesirable consequences' and 'unwittingly shifted market behaviours and negated the objective of the GFA exemptions for these building features', URA said in explaining why bay windows and planter boxes will no longer be exempted from GFA.
Explaining the impact of the new rules on residential developers, a property industry player said: 'Developers' profit margins will be reduced because they will no longer enjoy this benefit of not counting bay windows and planter boxes as part of their GFA and yet selling this space to home buyers. If the developers want to have these features, they will have to pay the full price since these will be included as GFA.'
The new rules apply to all residential developments - landed and non- landed - and are expected to lead to a rush of new development applications, especially from developers who have bought land recently.
URA said bay windows have been 'found to have contributed significantly to the building bulk, affect the design of buildings and generally do not encourage energy efficiency'. 'Often the provision of bay windows is intended mainly to increase the saleable strata area,' it noted.
Planter boxes were introduced to provide 'vertical greenery' in condos and create 'visual relief to our high-density living environment'. However, feedback and URA's investigations have revealed extensive unauthorised conversions of planter boxes within residential units for use as a balcony space or an extension of the living room instead. The planning authority said it has also received feedback that condo owners are unhappy that they are not allowed to convert planter boxes - which are part of their strata space and which they paid for when they bought their unit - to other uses.
'URA will leave it to the developers and building owners to decide if they wish to continue to provide bay windows and planter boxes for their residential developments so long as these building features are counted as GFA. The industry will have a free hand to design and provide these building features based on their commercial considerations as there will no longer be restrictions on the size of bay windows and planter boxes,' URA said.
Planter boxes within non-residential developments (like hotels and business parks), as well as those located within the common areas of residential developments like sky terraces, will continue to be exempted from GFA as these areas are typically well-planted and maintained by the management corporation for the benefit of all occupants in a development.
Only formal development applications (which exclude outline applications) with a valid provisional permission issued before Oct 7 will continue to be evaluated under the old GFA guidelines. For approved developments, bay windows and planters will remain GFA-exempted until the buildings are redeveloped, URA added.
Knight Frank managing director Tan Tiong Cheng had an alternative suggestion for URA. 'Instead of just removing GFA exemption for bay windows and planters, URA could have let the exemption continue but require developers to specify and identify these features in their sales brochures so that buyers know exactly how much of their strata area is taken up by bay windows and planter boxes. Buyers can then decide whether these features are as attractive to them.'
DTZ executive director Ong Choon Fah observed that bay windows can be a useable area - for sitting, keeping books or displaying photo frames, for instance. 'Planter boxes, on the other hand, often end up not being used for the purpose they were meant for,' she added.
Summing up the change, a seasoned industry observer said: 'This closes one loophole for developers. They've had a good run on it.'
The view changes: Till now, developers had been charging buyers for bay windows and planter boxes, even though these features were exempted from GFA calculations
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Bay window loophole slammed shut by URA
Developers will now have to include planter boxes, bay windows in GFA
By KALPANA RASHIWALA
(SINGAPORE) Here's some bad news for developers: a loophole that helped them sell in excess of the gross floor area (GFA) has been plugged.
Till now, bay windows and planter boxes, which often make up around 5 per cent of a condo's saleable area, had been exempted from GFA calculations. But in providing them to buyers, developers had been charging buyers for them.
This exemption will no longer apply from Oct 7, according to a circular issued by the Urban Redevelopment Authority (URA) on Monday.
The exemption has led to 'unintended and undesirable consequences' and 'unwittingly shifted market behaviours and negated the objective of the GFA exemptions for these building features', URA said in explaining why bay windows and planter boxes will no longer be exempted from GFA.
Explaining the impact of the new rules on residential developers, a property industry player said: 'Developers' profit margins will be reduced because they will no longer enjoy this benefit of not counting bay windows and planter boxes as part of their GFA and yet selling this space to home buyers. If the developers want to have these features, they will have to pay the full price since these will be included as GFA.'
The new rules apply to all residential developments - landed and non- landed - and are expected to lead to a rush of new development applications, especially from developers who have bought land recently.
URA said bay windows have been 'found to have contributed significantly to the building bulk, affect the design of buildings and generally do not encourage energy efficiency'. 'Often the provision of bay windows is intended mainly to increase the saleable strata area,' it noted.
Planter boxes were introduced to provide 'vertical greenery' in condos and create 'visual relief to our high-density living environment'. However, feedback and URA's investigations have revealed extensive unauthorised conversions of planter boxes within residential units for use as a balcony space or an extension of the living room instead. The planning authority said it has also received feedback that condo owners are unhappy that they are not allowed to convert planter boxes - which are part of their strata space and which they paid for when they bought their unit - to other uses.
'URA will leave it to the developers and building owners to decide if they wish to continue to provide bay windows and planter boxes for their residential developments so long as these building features are counted as GFA. The industry will have a free hand to design and provide these building features based on their commercial considerations as there will no longer be restrictions on the size of bay windows and planter boxes,' URA said.
Planter boxes within non-residential developments (like hotels and business parks), as well as those located within the common areas of residential developments like sky terraces, will continue to be exempted from GFA as these areas are typically well-planted and maintained by the management corporation for the benefit of all occupants in a development.
Only formal development applications (which exclude outline applications) with a valid provisional permission issued before Oct 7 will continue to be evaluated under the old GFA guidelines. For approved developments, bay windows and planters will remain GFA-exempted until the buildings are redeveloped, URA added.
Knight Frank managing director Tan Tiong Cheng had an alternative suggestion for URA. 'Instead of just removing GFA exemption for bay windows and planters, URA could have let the exemption continue but require developers to specify and identify these features in their sales brochures so that buyers know exactly how much of their strata area is taken up by bay windows and planter boxes. Buyers can then decide whether these features are as attractive to them.'
DTZ executive director Ong Choon Fah observed that bay windows can be a useable area - for sitting, keeping books or displaying photo frames, for instance. 'Planter boxes, on the other hand, often end up not being used for the purpose they were meant for,' she added.
Summing up the change, a seasoned industry observer said: 'This closes one loophole for developers. They've had a good run on it.'
The view changes: Till now, developers had been charging buyers for bay windows and planter boxes, even though these features were exempted from GFA calculations
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
SingPost HQ up for sale with $850m tag
Business Times - 10 Jul 2008
SingPost HQ up for sale with $850m tag
Terms of any leaseback deal could determine price it fetches: observers
By KALPANA RASHIWALA
THE buzz created by recently unveiled plans to develop the Paya Lebar area into a commercial hub may get a boost from Singapore Post's planned sale of its landmark headquarters building next to Paya Lebar MRT Station.
BT understands the listed group has launched an expression of interest for the 14-storey building and the price tag is said to be around $850 million based on the existing use of Singapore Post Centre.
SingPost is expected to lease back the space it currently occupies - which is roughly half the building's one million sq ft net lettable area - for both its corporate office and operations, including the mail processing centre.
The rest of the property is leased to a mix of retail and office tenants, including NTUC FairPrice, Kopitiam, Barang Barang, This Fashion, HSBC Insurance, Northwest Airlines and Symantec Corporation.
CB Richard Ellis is understood to be handling the sale of SingPost Centre.
The current approved use for the site is around 60 per cent industrial and 40 per cent commercial, based on an earlier report.
However, potential investors may seek the authorities' approval to convert the use to full commercial, to optimise the site's commercial zoning under both the 2003 and 2008 (draft) Master Plans.
A differential premium would have to be paid to the state in exchange for realising the enhancement in use.
SingPost Centre's existing gross floor area of 1.48 million sq ft has already tapped the 4.2 maximum plot ratio allowed under the two Master Plans.
The property is on a 352,389 sq ft site with a remaining lease of about 73 years. The 14-storey building, which also has three basement levels (mostly for retail), has 587 carpark lots.
Industry observers say the terms of SingPost's leaseback arrangement with the potential buyer will be a critical factor in determining the price the building fetches.
Banks have also tightened lending for property acquisitions but core funds and core-plus funds, which rely less on debt and more on their own equity when making property purchases, are still interested in making acquisitions.
BT also reported recently that some of the big overseas funds which have been buying office properties in Singapore in the past few years are now also looking at industrial, logistics and business park assets, which offer higher yields.
Against this backdrop, SingPost Centre's potential buyer may well continue with the existing industrial/commercial use of the property.
SingPost has also been selling some of its smaller properties, for instance, at Clementi Central, Boon Lay, Marine Parade and Hougang South. The group is still left with a dozen properties, including two in the prime districts - Tanglin and Killiney Road post offices.
Paya Lebar landmark: Potential investors could seek to convert it to full commercial use
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
SingPost HQ up for sale with $850m tag
Terms of any leaseback deal could determine price it fetches: observers
By KALPANA RASHIWALA
THE buzz created by recently unveiled plans to develop the Paya Lebar area into a commercial hub may get a boost from Singapore Post's planned sale of its landmark headquarters building next to Paya Lebar MRT Station.
BT understands the listed group has launched an expression of interest for the 14-storey building and the price tag is said to be around $850 million based on the existing use of Singapore Post Centre.
SingPost is expected to lease back the space it currently occupies - which is roughly half the building's one million sq ft net lettable area - for both its corporate office and operations, including the mail processing centre.
The rest of the property is leased to a mix of retail and office tenants, including NTUC FairPrice, Kopitiam, Barang Barang, This Fashion, HSBC Insurance, Northwest Airlines and Symantec Corporation.
CB Richard Ellis is understood to be handling the sale of SingPost Centre.
The current approved use for the site is around 60 per cent industrial and 40 per cent commercial, based on an earlier report.
However, potential investors may seek the authorities' approval to convert the use to full commercial, to optimise the site's commercial zoning under both the 2003 and 2008 (draft) Master Plans.
A differential premium would have to be paid to the state in exchange for realising the enhancement in use.
SingPost Centre's existing gross floor area of 1.48 million sq ft has already tapped the 4.2 maximum plot ratio allowed under the two Master Plans.
The property is on a 352,389 sq ft site with a remaining lease of about 73 years. The 14-storey building, which also has three basement levels (mostly for retail), has 587 carpark lots.
Industry observers say the terms of SingPost's leaseback arrangement with the potential buyer will be a critical factor in determining the price the building fetches.
Banks have also tightened lending for property acquisitions but core funds and core-plus funds, which rely less on debt and more on their own equity when making property purchases, are still interested in making acquisitions.
BT also reported recently that some of the big overseas funds which have been buying office properties in Singapore in the past few years are now also looking at industrial, logistics and business park assets, which offer higher yields.
Against this backdrop, SingPost Centre's potential buyer may well continue with the existing industrial/commercial use of the property.
SingPost has also been selling some of its smaller properties, for instance, at Clementi Central, Boon Lay, Marine Parade and Hougang South. The group is still left with a dozen properties, including two in the prime districts - Tanglin and Killiney Road post offices.
Paya Lebar landmark: Potential investors could seek to convert it to full commercial use
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Goldhill Centre up for tender
Business Times - 10 Jul 2008
Goldhill Centre up for tender
AFTER 13 years in the making, the collective sale of Goldhill Centre - a three- storey walk-up building of shop and office units next to Goldhill Plaza and United Square in the Novena area - has finally been put up for tender.
The asking price is $315 million, which works out to $1,496 per square foot of potential gross floor area.
Jones Lang LaSalle (JLL), which is marketing the collective sale, says no development charge is payable because of the high historical development baseline for the 70,177 sq ft freehold site.
The plot is zoned for commercial use with a 3.0 plot ratio (ratio of maximum gross floor area to land area) under both the 2003 and 2008 (Draft) Master Plans.
This means the site can be redeveloped into a new project with a maximum gross floor area (GFA) of 210,531 sq ft, which would surpass the property's existing GFA, estimated at 112,283 sq ft.
'With provision for a basement connection to the Novena MRT station and nestled in an established residential estate, the site offers excellent opportunity for retail development,' JLL said. The tender for Goldhill Centre closes on Aug 19.
JLL's associate director (investments), David Batchelor, said some owners of strata units in Goldhill Centre have been trying to do a collective sale since 1995, but issues relating to titles of some of the units had held up the sale.
This was ironed out under an amendment to the Land Titles (Strata) Act passed last year.
Most of the units in Goldhill Centre have 999-year leases but the original developer (Goldhill Properties) retained the title certificates.
So, owners of such units could do an en bloc sale only with the unanimous consent and approval of the original developer, which owned the reversionary interest in the property, under the old rules.
But with the new amendment that took effect last year, such owners can now proceed with an en bloc sale by majority consent.
The original developer's consent will not be required, because if the Strata Titles Board approves an en bloc sale, it will lose all rights to the land.
Another factor that has held back Goldhill Centre's en bloc sale is that owners had been trying to seek a higher plot ratio for the site in line with those for surrounding commercial sites, Mr Batchelor explained. But these efforts were unsuccessful.
Owners controlling 80 per cent of share values as well as strata area in Goldhill Centre have consented to a collective sale, thus achieving the mandatory minimum consensus under the revised legislation.
Goldhill Centre comprises three blocks of walk-up buildings with a total of 87 units.
These comprise 29 shops ranging from 1,066 sq ft to 1,109 sq ft and 58 office units between 1,206 sq ft and 1,668 sq ft. Based on the $315 million asking price, owners will receive about $3.4 million to $3.9 million per unit.
Goldhill Centre is part of a bigger complex originally developed by companies in the Goldhill group.
Goldhill Centre was developed in 1969, Goldhill Plaza in 1973 and Goldhill Square (now known as United Square and owned by UOL Group), in 1982.
Seah Kim Bee, chairman of the sales committee of Goldhill Centre's en bloc sale, recounted: 'We were very close to getting the 80 per cent approval level under the old en bloc rules when the amended Act took effect on Oct 4 last year. So we had to start all over again. We held an extraordinary general meeting in November 2007 where the sales committee was set up and the members elected, as required under the new rules.'
The 79-year-old, a chartered town planner, has also been chairman of Goldhill Centre's management council for nearly 10 years.
On the block: The site can be redeveloped into a new project with a maximum gross floor area of 210,531 sq ft
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Goldhill Centre up for tender
AFTER 13 years in the making, the collective sale of Goldhill Centre - a three- storey walk-up building of shop and office units next to Goldhill Plaza and United Square in the Novena area - has finally been put up for tender.
The asking price is $315 million, which works out to $1,496 per square foot of potential gross floor area.
Jones Lang LaSalle (JLL), which is marketing the collective sale, says no development charge is payable because of the high historical development baseline for the 70,177 sq ft freehold site.
The plot is zoned for commercial use with a 3.0 plot ratio (ratio of maximum gross floor area to land area) under both the 2003 and 2008 (Draft) Master Plans.
This means the site can be redeveloped into a new project with a maximum gross floor area (GFA) of 210,531 sq ft, which would surpass the property's existing GFA, estimated at 112,283 sq ft.
'With provision for a basement connection to the Novena MRT station and nestled in an established residential estate, the site offers excellent opportunity for retail development,' JLL said. The tender for Goldhill Centre closes on Aug 19.
JLL's associate director (investments), David Batchelor, said some owners of strata units in Goldhill Centre have been trying to do a collective sale since 1995, but issues relating to titles of some of the units had held up the sale.
This was ironed out under an amendment to the Land Titles (Strata) Act passed last year.
Most of the units in Goldhill Centre have 999-year leases but the original developer (Goldhill Properties) retained the title certificates.
So, owners of such units could do an en bloc sale only with the unanimous consent and approval of the original developer, which owned the reversionary interest in the property, under the old rules.
But with the new amendment that took effect last year, such owners can now proceed with an en bloc sale by majority consent.
The original developer's consent will not be required, because if the Strata Titles Board approves an en bloc sale, it will lose all rights to the land.
Another factor that has held back Goldhill Centre's en bloc sale is that owners had been trying to seek a higher plot ratio for the site in line with those for surrounding commercial sites, Mr Batchelor explained. But these efforts were unsuccessful.
Owners controlling 80 per cent of share values as well as strata area in Goldhill Centre have consented to a collective sale, thus achieving the mandatory minimum consensus under the revised legislation.
Goldhill Centre comprises three blocks of walk-up buildings with a total of 87 units.
These comprise 29 shops ranging from 1,066 sq ft to 1,109 sq ft and 58 office units between 1,206 sq ft and 1,668 sq ft. Based on the $315 million asking price, owners will receive about $3.4 million to $3.9 million per unit.
Goldhill Centre is part of a bigger complex originally developed by companies in the Goldhill group.
Goldhill Centre was developed in 1969, Goldhill Plaza in 1973 and Goldhill Square (now known as United Square and owned by UOL Group), in 1982.
Seah Kim Bee, chairman of the sales committee of Goldhill Centre's en bloc sale, recounted: 'We were very close to getting the 80 per cent approval level under the old en bloc rules when the amended Act took effect on Oct 4 last year. So we had to start all over again. We held an extraordinary general meeting in November 2007 where the sales committee was set up and the members elected, as required under the new rules.'
The 79-year-old, a chartered town planner, has also been chairman of Goldhill Centre's management council for nearly 10 years.
On the block: The site can be redeveloped into a new project with a maximum gross floor area of 210,531 sq ft
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Investment sales fall in Q2 but foreign funds still looking
Business Times - 10 Jul 2008
Investment sales fall in Q2 but foreign funds still looking
Residential sector continued to soften, contributing 13% to the total
By ARTHUR SIM
PROPERTY investment sales in Q2 2008 saw a significant decline due to increasing cautiousness from investors and tightening of credit.
In a report, DTZ Research also noted that in the quarter, total transactions fell 37 per cent quarter-on-quarter (QOQ) to about $5.2 billion.
Total sales for H108 amounted to $13.5 billion, 33 per cent of 2007's total sales and 54 per cent of 2006's total sales.
However, DTZ said that since 2007 was an exceptionally active year for property investment, '$13.5 billion is not a low figure compared with sales in 2006 which was the second most active year in the last decade'.
The residential sector continued to soften, contributing only 13 per cent to total investment sales, mostly from government sale of sites.
Transactions in the industrial and commercial sector amounted to $2.4 billion, 45 per cent of total investment in the quarter.
Of note were the transactions by foreign investors, including Commerz Real AG which acquired 71 Robinson Road and Morley Fund Management which acquired Commerce Point.
Boustead Hub at Ubi Avenue 1 was also sold to a unit of SEB Asset Management.
Shaun Poh, DTZ's senior director (investment advisory services and auction), said: 'Although pressure on Reits has made them less active purchasers, investor interest especially from private equity funds remains strong as the property market is supported by economic growth and occupier market fundamentals.'
DTZ's Investor Intention Survey also revealed that overall, investors expect to increase funds allocated to property investments by an average 4 per cent, with a comparable figure for Asia- Pacific investors of 10 per cent.
DTZ added that US investors are intending to shift asset allocation significantly away to Asia-Pacific while European pension funds are also waking up to the investment possibilities of the region.
Although European pension funds' exposure in the Asia-Pacific is minimal at the moment, DTZ estimated that as pension funds begin to target the region, they could allocate as much as 20-30 per cent of their real estate portfolios to the region.
DTZ said, however, that the survey does suggest that within Asia-Pacific, China remains the primary area of interest, while there appears to be some shift in focus away from Japan, Australia and Singapore in favour of emerging markets such as Vietnam and Indonesia.
CB Richard Ellis (CBRE) believes that Singapore's long-term prospects as a financial hub and popular business destination for MNCs will see Singapore continue to attract both local and foreign investors' interest.
In a recent report, CBRE said: 'The more active investors in the short to medium term would be the core and core-plus investors who have a lower risk appetite and are able to fund their acquisitions largely with equity.'
Future new office supply has threatened to undermine occupier fundamentals.
However, CBRE added: 'At face value, potential confirmed supply seems abundant, but it should be viewed in context with a strong take-up. Some 22 per cent of known supply from 3Q08-2012 is pre-committed, with around 9 per cent under offer.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Investment sales fall in Q2 but foreign funds still looking
Residential sector continued to soften, contributing 13% to the total
By ARTHUR SIM
PROPERTY investment sales in Q2 2008 saw a significant decline due to increasing cautiousness from investors and tightening of credit.
In a report, DTZ Research also noted that in the quarter, total transactions fell 37 per cent quarter-on-quarter (QOQ) to about $5.2 billion.
Total sales for H108 amounted to $13.5 billion, 33 per cent of 2007's total sales and 54 per cent of 2006's total sales.
However, DTZ said that since 2007 was an exceptionally active year for property investment, '$13.5 billion is not a low figure compared with sales in 2006 which was the second most active year in the last decade'.
The residential sector continued to soften, contributing only 13 per cent to total investment sales, mostly from government sale of sites.
Transactions in the industrial and commercial sector amounted to $2.4 billion, 45 per cent of total investment in the quarter.
Of note were the transactions by foreign investors, including Commerz Real AG which acquired 71 Robinson Road and Morley Fund Management which acquired Commerce Point.
Boustead Hub at Ubi Avenue 1 was also sold to a unit of SEB Asset Management.
Shaun Poh, DTZ's senior director (investment advisory services and auction), said: 'Although pressure on Reits has made them less active purchasers, investor interest especially from private equity funds remains strong as the property market is supported by economic growth and occupier market fundamentals.'
DTZ's Investor Intention Survey also revealed that overall, investors expect to increase funds allocated to property investments by an average 4 per cent, with a comparable figure for Asia- Pacific investors of 10 per cent.
DTZ added that US investors are intending to shift asset allocation significantly away to Asia-Pacific while European pension funds are also waking up to the investment possibilities of the region.
Although European pension funds' exposure in the Asia-Pacific is minimal at the moment, DTZ estimated that as pension funds begin to target the region, they could allocate as much as 20-30 per cent of their real estate portfolios to the region.
DTZ said, however, that the survey does suggest that within Asia-Pacific, China remains the primary area of interest, while there appears to be some shift in focus away from Japan, Australia and Singapore in favour of emerging markets such as Vietnam and Indonesia.
CB Richard Ellis (CBRE) believes that Singapore's long-term prospects as a financial hub and popular business destination for MNCs will see Singapore continue to attract both local and foreign investors' interest.
In a recent report, CBRE said: 'The more active investors in the short to medium term would be the core and core-plus investors who have a lower risk appetite and are able to fund their acquisitions largely with equity.'
Future new office supply has threatened to undermine occupier fundamentals.
However, CBRE added: 'At face value, potential confirmed supply seems abundant, but it should be viewed in context with a strong take-up. Some 22 per cent of known supply from 3Q08-2012 is pre-committed, with around 9 per cent under offer.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Wednesday, July 9, 2008
Developers offer agents fatter cuts to push projects
July 9, 2008
Developers offer agents fatter cuts to push projects
In some segments, commissions have doubled compared to a year ago
By KALPANA RASHIWALA
(SINGAPORE) Developers are paying property agents bigger commissions -
in some cases almost double of what was offered a year ago - to push
their new residential project launches.
This is because the environment for selling homes is far more
challenging now and agents have to work much harder to persuade
potential buyers to part with their money.
A modest-sized developer told BT he does not mind rewarding agents
with commissions of 2 per cent or more as, to him, speed of sales is
paramount. He needs to achieve enough cash flow to begin construction
and move on to his next project. But even the big boys are having to
pay a higher commission rate to agents these days - if they want
their help to move units.
An established developer launching a big project these days could pay
its appointed marketing agent 0.8 per cent of sale price - compared
with possibly 0.5 per cent 12 months ago. To further incentivise
agents, the commission rate may go up to, say, one per cent nowadays,
once a certain number of units have been sold.
Developers of smaller projects, for instance in the Telok Kurau area,
are understood to be paying even higher commissions - often up to 2
per cent - compared with around one per cent or less a year ago, BT
has learnt from property agents and developers. On top of that, some
developers are offering a bonus payout in the form of an additional
0.5 per cent commission if the project sells out within a certain
time frame and at a price exceeding the developer's target.
BT understands that high-end projects have also not been spared.
Their developers are having to reward agents with 0.7 to 1.5 per cent
commissions - up from 0.4 to 0.5 per cent a year ago.
Teo Hong Lim, executive chairman of property group Roxy-Pacific
Holdings, says: 'Speed of sales is most important to us. We don't
want to target sales of just 30-40 per cent of total units in a
project. We need to sell 80-90 per cent or even 100 per cent. We can
then begin construction, and move on to our next project.
'At the end of the day, agents are also very much incentivised by
commissions. It's a sort of a no-lose situation for us when we
achieve speed of sales and the final net sales value of a development
is higher than our initial target, even after we less the additional
bonus commissions we pay the agents.'
While some market watchers may think that paying agents higher
commissions will eat into the developers' profit margins, Mr Teo
argues: 'Commissions are only part of our total project cost. It's
definitely much, much lower than land and construction costs.'
A property agent says: 'Developers are more concerned with cash flow
and sales take-up. The higher commission is a small amount to pay for
boosting their cash flow. If they don't have the cash flow, higher
interest expense will be a much bigger cost item than the
commissions.'
Agreeing, Knight Frank executive director Peter Ow explains why
agents need higher motivation today. 'The main reason for increasing
our fees is that we're operating in a tougher market and, frankly,
agents are highly motivated by fees. If you get two projects side by
side, most agents will naturally push for the one where the reward is
higher.'
Industry players acknowledge that agents have to work a lot harder to
convince buyers, given the more cautious economic outlook, thinner
foreign buying and the fact that fewer speculators are left in the
market after the deferred payment scheme was scrapped last October.
BT understands that the extra work being put in by agents these days
to realise sales at showflats includes studying the project's
costing. 'We tell buyers the price we're offering is below current
replacement cost, either because the developer bought the land cheap
or locked in construction costs early.
'Sometimes we also use pressure tactics. We tell potential buyers
that the developer will raise prices once it achieves a certain
percentage of sales. And it works,' an old hand in the game told BT.
Developers offer agents fatter cuts to push projects
In some segments, commissions have doubled compared to a year ago
By KALPANA RASHIWALA
(SINGAPORE) Developers are paying property agents bigger commissions -
in some cases almost double of what was offered a year ago - to push
their new residential project launches.
This is because the environment for selling homes is far more
challenging now and agents have to work much harder to persuade
potential buyers to part with their money.
A modest-sized developer told BT he does not mind rewarding agents
with commissions of 2 per cent or more as, to him, speed of sales is
paramount. He needs to achieve enough cash flow to begin construction
and move on to his next project. But even the big boys are having to
pay a higher commission rate to agents these days - if they want
their help to move units.
An established developer launching a big project these days could pay
its appointed marketing agent 0.8 per cent of sale price - compared
with possibly 0.5 per cent 12 months ago. To further incentivise
agents, the commission rate may go up to, say, one per cent nowadays,
once a certain number of units have been sold.
Developers of smaller projects, for instance in the Telok Kurau area,
are understood to be paying even higher commissions - often up to 2
per cent - compared with around one per cent or less a year ago, BT
has learnt from property agents and developers. On top of that, some
developers are offering a bonus payout in the form of an additional
0.5 per cent commission if the project sells out within a certain
time frame and at a price exceeding the developer's target.
BT understands that high-end projects have also not been spared.
Their developers are having to reward agents with 0.7 to 1.5 per cent
commissions - up from 0.4 to 0.5 per cent a year ago.
Teo Hong Lim, executive chairman of property group Roxy-Pacific
Holdings, says: 'Speed of sales is most important to us. We don't
want to target sales of just 30-40 per cent of total units in a
project. We need to sell 80-90 per cent or even 100 per cent. We can
then begin construction, and move on to our next project.
'At the end of the day, agents are also very much incentivised by
commissions. It's a sort of a no-lose situation for us when we
achieve speed of sales and the final net sales value of a development
is higher than our initial target, even after we less the additional
bonus commissions we pay the agents.'
While some market watchers may think that paying agents higher
commissions will eat into the developers' profit margins, Mr Teo
argues: 'Commissions are only part of our total project cost. It's
definitely much, much lower than land and construction costs.'
A property agent says: 'Developers are more concerned with cash flow
and sales take-up. The higher commission is a small amount to pay for
boosting their cash flow. If they don't have the cash flow, higher
interest expense will be a much bigger cost item than the
commissions.'
Agreeing, Knight Frank executive director Peter Ow explains why
agents need higher motivation today. 'The main reason for increasing
our fees is that we're operating in a tougher market and, frankly,
agents are highly motivated by fees. If you get two projects side by
side, most agents will naturally push for the one where the reward is
higher.'
Industry players acknowledge that agents have to work a lot harder to
convince buyers, given the more cautious economic outlook, thinner
foreign buying and the fact that fewer speculators are left in the
market after the deferred payment scheme was scrapped last October.
BT understands that the extra work being put in by agents these days
to realise sales at showflats includes studying the project's
costing. 'We tell buyers the price we're offering is below current
replacement cost, either because the developer bought the land cheap
or locked in construction costs early.
'Sometimes we also use pressure tactics. We tell potential buyers
that the developer will raise prices once it achieves a certain
percentage of sales. And it works,' an old hand in the game told BT.
HSBC's new home loan package inverts model
July 9, 2008
HSBC's new home loan package inverts model
Customers may pay lower rates in successive years in Sibor-pegged deal
By SIOW LI SEN
(SINGAPORE) HSBC is launching a radical home loan package - featuring
a decreasing interest rate spread - which is making some rivals
scratch their heads.
HSBC's new Sibor- pegged home loan package with loyalty discount
gives a reduction in the interest rate margin charged in the first
three years - a first in the market.
Current loans pegged to Sibor (Singapore interbank offer rate) have
either flat or increasing interest rate spreads.
This new Sibor-pegged loyalty package is unique because the interest
rate spread reduces by 10 basis points at the end of every
anniversary year, up to the third year of the loan, HSBC said
yesterday.
Under the new loyalty package, the customer pays the 3-month Sibor
rate plus 0.75 per cent in the first year; in the second year, he
pays 3-month Sibor plus 0.65 per cent; and from the third year
onwards, the rate is 3-month Sibor plus 0.55 per cent. The 3-month
Sibor on July 1 was 1.25 per cent.
For a customer who pledges to stick with the bank for three years,
DBS's interbank-pegged home loan charges a flat spread of 0.8 per
cent for each of the three years and then it's 1.25 per cent
thereafter.
United Overseas Bank (UOB) charges a flat spread of 0.8 per cent to
two of its interbank-pegged home loan packages.
Standard Chartered Bank's Sibor-pegged mortgage also charges a flat
spread of one per cent.
Observers that BT spoke to wonder what the catch is for HSBC to slice
its margins, given the increasing costs of doing business and also
the uncertain economic climate.
'They're mad,' said one rival banker, listing the various costs banks
incur in selling a home loan including commissions to brokers and its
own sales people, and legal subsidies offered to borrowers.
Said Kevin Lam, head of loans, United Overseas Bank: 'It's an
interesting idea. UOB introduced a similar package in the past. We
called it a step-down package.'
At the end of the day, a homebuyer has to consider the long-term and
short- term gains versus costs, said Mr Lam.
HSBC said it is rewarding customers for staying with the bank. Asked
how it will manage its reduced margins, it said it was a 'trade
secret'.
Said Wendy Lim, head of consumer banking, HSBC: 'Our Sibor-pegged
loyalty pricing is premised on feedback from a study we conducted
among home loan customers. The majority of customers in the study
said that they liked the concept of inverse pricing in their home
loan rates as it translates to more savings for them in the long run.'
'Customers are telling us that they want to be rewarded for their
loyalty. So we are addressing the need with this innovative offer,'
added Ms Lim.
Koh Kar Siong, DBS managing director and head of consumer deposits
and secured lending, said his bank listens to customer feedback too.
'DBS was the first bank to introduce transparent interest rates
pegged to Sibor or to the CPF Ordinary Account rate. This happened at
a time when there was public outcry over the lack of transparency of
banks' mortgage rates,' said Mr Koh.
UOB KayHian analyst Jonathan Koh said banks in Singapore are
benefiting 'from a steepened yield curve as they can utilise short-
term funding, such as fixed deposits and savings deposits, for
lending to businesses and consumers on a longer-term basis'.
He thinks HSBC's new package will not lead to an aggressive home loan
war, given the 'overall economic climate and the fact that 'on
corporate and small and medium enterprise loans, margins are more
attractive'.
Still, rival bankers are unlikely to give up their turf without a
fight.
One said his bank is prepared to reduce the spread to 0.7 per cent on
a case- by-case basis in order 'to protect our customers'.
Gregory Chan, OCBC head of secured lending, said his bank regularly
makes adjustments for its home loan packages.
'As such, we will continue to offer loan packages with promotional
rates that are competitive compared to the other market players,' he
said.
HSBC's new home loan package inverts model
Customers may pay lower rates in successive years in Sibor-pegged deal
By SIOW LI SEN
(SINGAPORE) HSBC is launching a radical home loan package - featuring
a decreasing interest rate spread - which is making some rivals
scratch their heads.
HSBC's new Sibor- pegged home loan package with loyalty discount
gives a reduction in the interest rate margin charged in the first
three years - a first in the market.
Current loans pegged to Sibor (Singapore interbank offer rate) have
either flat or increasing interest rate spreads.
This new Sibor-pegged loyalty package is unique because the interest
rate spread reduces by 10 basis points at the end of every
anniversary year, up to the third year of the loan, HSBC said
yesterday.
Under the new loyalty package, the customer pays the 3-month Sibor
rate plus 0.75 per cent in the first year; in the second year, he
pays 3-month Sibor plus 0.65 per cent; and from the third year
onwards, the rate is 3-month Sibor plus 0.55 per cent. The 3-month
Sibor on July 1 was 1.25 per cent.
For a customer who pledges to stick with the bank for three years,
DBS's interbank-pegged home loan charges a flat spread of 0.8 per
cent for each of the three years and then it's 1.25 per cent
thereafter.
United Overseas Bank (UOB) charges a flat spread of 0.8 per cent to
two of its interbank-pegged home loan packages.
Standard Chartered Bank's Sibor-pegged mortgage also charges a flat
spread of one per cent.
Observers that BT spoke to wonder what the catch is for HSBC to slice
its margins, given the increasing costs of doing business and also
the uncertain economic climate.
'They're mad,' said one rival banker, listing the various costs banks
incur in selling a home loan including commissions to brokers and its
own sales people, and legal subsidies offered to borrowers.
Said Kevin Lam, head of loans, United Overseas Bank: 'It's an
interesting idea. UOB introduced a similar package in the past. We
called it a step-down package.'
At the end of the day, a homebuyer has to consider the long-term and
short- term gains versus costs, said Mr Lam.
HSBC said it is rewarding customers for staying with the bank. Asked
how it will manage its reduced margins, it said it was a 'trade
secret'.
Said Wendy Lim, head of consumer banking, HSBC: 'Our Sibor-pegged
loyalty pricing is premised on feedback from a study we conducted
among home loan customers. The majority of customers in the study
said that they liked the concept of inverse pricing in their home
loan rates as it translates to more savings for them in the long run.'
'Customers are telling us that they want to be rewarded for their
loyalty. So we are addressing the need with this innovative offer,'
added Ms Lim.
Koh Kar Siong, DBS managing director and head of consumer deposits
and secured lending, said his bank listens to customer feedback too.
'DBS was the first bank to introduce transparent interest rates
pegged to Sibor or to the CPF Ordinary Account rate. This happened at
a time when there was public outcry over the lack of transparency of
banks' mortgage rates,' said Mr Koh.
UOB KayHian analyst Jonathan Koh said banks in Singapore are
benefiting 'from a steepened yield curve as they can utilise short-
term funding, such as fixed deposits and savings deposits, for
lending to businesses and consumers on a longer-term basis'.
He thinks HSBC's new package will not lead to an aggressive home loan
war, given the 'overall economic climate and the fact that 'on
corporate and small and medium enterprise loans, margins are more
attractive'.
Still, rival bankers are unlikely to give up their turf without a
fight.
One said his bank is prepared to reduce the spread to 0.7 per cent on
a case- by-case basis in order 'to protect our customers'.
Gregory Chan, OCBC head of secured lending, said his bank regularly
makes adjustments for its home loan packages.
'As such, we will continue to offer loan packages with promotional
rates that are competitive compared to the other market players,' he
said.
Frasers Centrepoint in $180m Allco deal
July 9, 2008
Frasers Centrepoint in $180m Allco deal
Allco Commercial Reit to be renamed Frasers Commercial Trust
By EMILYN YAP
IN what appears to be a sign of consolidation in the Singapore real
estate investment trust (Reit) market, Frasers Centrepoint (FC) is
buying 17.7 per cent of Allco Commercial Reit and 100 per cent of the
Reit's manager, Allco Singapore, for a total consideration of $180
million.
FC, a subsidiary of Fraser and Neave (F&N), had planned to list a
commercial Reit called Frasers Commercial Trust (FCT) and recently
received in-principle listing approval from Singapore Exchange. With
the deal, FC will scrap the listing plan and rename Allco Reit as FCT.
Allco Finance Group, the Australian holding company of Allco
Singapore, is said to be selling its stake to repay debt. For $104.3
million, Allco Finance and two of its subsidiaries will sell 125.65
million Allco Reit units to FC for 83 cents each. The unit price is a
42.4 per cent discount to the Reit's net asset value per unit and a
16.9 per cent premium to its last-traded price of 71 cents on Monday.
FC will also gain control of Allco Singapore by taking on all of its
issued ordinary and preference shares for $75.7 million. The entire
deal could be completed by Aug 6.
According to market watchers, Allco Finance ran a limited auction
that aroused significant interest. As one observer put it: 'This
would represent an immediate platform for a fund manager or property
developer wanting to have a ready-made Reit.'
An FC spokesman told BT: 'Such an opportunity to acquire good quality
commercial properties at an attractive valuation level is rare.'
Allco Reit's property portfolio spans Singapore, Australia and Japan,
and the deal will help FC gain $2 billion of commercial assets under
management.
'Current Allco Reit unit holders will benefit from tapping into the
professional management expertise, regional footprint and resources
of one of Singapore's largest property companies,' FC chief executive
Lim Ee Seng said in a statement yesterday.
Allco Reit will be able to leverage on a ready pipeline of commercial
assets owned by FC. These comprise Alexandra Point, Alexandra
Technopark and the office and ancillary retail components of Valley
Point - properties initially set aside for the planned listing of FCT.
'Depending on prevailing market conditions and subject to the
approval of shareholders, FC intends to inject its commercial assets
within six to 18 months of completion of the acquisition,' an FC
spokesman told BT.
Mr Lim noted: 'We have clear plans to bolster and strengthen the
financial position of Allco Reit.' FC 'will be able to assist Allco
Reit in negotiating the refinancing of its existing loans, which will
bring clear benefits to Allco Reit's unit holders'. Details will be
announced at the appropriate time, the FC spokesman said.
FC expects to use internal cash resources and existing credit
facilities to fund the $180 million deal. The acquisition is not
expected to have a material impact on the net asset value or pre-tax
net profit of F&N or its subsidiaries for the year ending Sept 30,
2008.
Credit Suisse Singapore was FC's financial adviser on the acquisition.
News of the deal drove Allco Reit's units up 0.7 per cent or 0.5
cents to end at 71.5 cents yesterday. F&N shares, on the other hand,
closed 0.9 per cent or four cents down at $4.39.
Frasers Centrepoint in $180m Allco deal
Allco Commercial Reit to be renamed Frasers Commercial Trust
By EMILYN YAP
IN what appears to be a sign of consolidation in the Singapore real
estate investment trust (Reit) market, Frasers Centrepoint (FC) is
buying 17.7 per cent of Allco Commercial Reit and 100 per cent of the
Reit's manager, Allco Singapore, for a total consideration of $180
million.
FC, a subsidiary of Fraser and Neave (F&N), had planned to list a
commercial Reit called Frasers Commercial Trust (FCT) and recently
received in-principle listing approval from Singapore Exchange. With
the deal, FC will scrap the listing plan and rename Allco Reit as FCT.
Allco Finance Group, the Australian holding company of Allco
Singapore, is said to be selling its stake to repay debt. For $104.3
million, Allco Finance and two of its subsidiaries will sell 125.65
million Allco Reit units to FC for 83 cents each. The unit price is a
42.4 per cent discount to the Reit's net asset value per unit and a
16.9 per cent premium to its last-traded price of 71 cents on Monday.
FC will also gain control of Allco Singapore by taking on all of its
issued ordinary and preference shares for $75.7 million. The entire
deal could be completed by Aug 6.
According to market watchers, Allco Finance ran a limited auction
that aroused significant interest. As one observer put it: 'This
would represent an immediate platform for a fund manager or property
developer wanting to have a ready-made Reit.'
An FC spokesman told BT: 'Such an opportunity to acquire good quality
commercial properties at an attractive valuation level is rare.'
Allco Reit's property portfolio spans Singapore, Australia and Japan,
and the deal will help FC gain $2 billion of commercial assets under
management.
'Current Allco Reit unit holders will benefit from tapping into the
professional management expertise, regional footprint and resources
of one of Singapore's largest property companies,' FC chief executive
Lim Ee Seng said in a statement yesterday.
Allco Reit will be able to leverage on a ready pipeline of commercial
assets owned by FC. These comprise Alexandra Point, Alexandra
Technopark and the office and ancillary retail components of Valley
Point - properties initially set aside for the planned listing of FCT.
'Depending on prevailing market conditions and subject to the
approval of shareholders, FC intends to inject its commercial assets
within six to 18 months of completion of the acquisition,' an FC
spokesman told BT.
Mr Lim noted: 'We have clear plans to bolster and strengthen the
financial position of Allco Reit.' FC 'will be able to assist Allco
Reit in negotiating the refinancing of its existing loans, which will
bring clear benefits to Allco Reit's unit holders'. Details will be
announced at the appropriate time, the FC spokesman said.
FC expects to use internal cash resources and existing credit
facilities to fund the $180 million deal. The acquisition is not
expected to have a material impact on the net asset value or pre-tax
net profit of F&N or its subsidiaries for the year ending Sept 30,
2008.
Credit Suisse Singapore was FC's financial adviser on the acquisition.
News of the deal drove Allco Reit's units up 0.7 per cent or 0.5
cents to end at 71.5 cents yesterday. F&N shares, on the other hand,
closed 0.9 per cent or four cents down at $4.39.
Super-prime Orchard mall rents hit record $54.40 psf
July 9, 2008
Super-prime Orchard mall rents hit record $54.40 psf
5.3% increase qoq is highest of all retail micro markets tracked by
CBRE
By ARTHUR SIM
CHANEL, Gucci, Louis Vuitton are big brands that scream 'high
fashion' on Orchard Road.
But lately, the screams are more likely to be the painful result of
rising rents.
CB Richard Ellis (CBRE) said that super prime retail space - defined
as space facing Orchard Road or in atriums - hit a record $54.40 per
square foot (psf) per month in the second quarter of this year.
This was an increase of 5.3 per cent quarter on quarter (qoq) - the
highest of all retail micro markets tracked by CBRE.
For the whole Orchard Road area, rents rose 1.1 per cent qoq in the
second quarter to average $36.80 psf per month - also a record.
The 'uncertain global business climate and imminent supply coming on
stream' now has retailers making more prudent decisions on space,
said CBRE. But 'there remains an appetite for expansion and retailers
are still keen to bring new brands into the market'.
An estimated 6.9 million sq ft of retail space will be completed
between the third quarter this year and 2012, with 48 per cent of
this coming on stream in 2009.
But still, said CBRE: 'We continued to see new entrants and openings
in Q2.'
It noted that Wisma Atria houses Jayson Brunsdon, Trois + Inch and
Levis Lady.
Thai fashion label Greyhound and Playhound is now available at Tangs
Orchard.
And Toshin will introduce eight new stores totalling 15,000 sq ft at
Takashimaya.
Of course, as new shops open, others close.
Wing Tai Retail will close two Topshop and Topman outlets in the
Orchard/Scotts Road area because the leases have expired.
The 12,000 sq ft Wisma Atria outlet will close this month and the
2,500 sq ft outlet at Isetan Scotts will close at the end of August.
Wing Tai will open a new store of more than 4,000 sq ft at an
undisclosed Orchard Road location later this year and expects to open
a 12,000 sq ft flagship store at ION Orchard when the mall is ready.
WingTai Retail executive director Helen Khoo said: 'We have been
looking for a suitable location for our new Topshop and Topman
flagship store in the Orchard Road area, and are preparing for
opportunities arising from a new retail landscape.'
Rents were not cited as a reason for the relocation. But rents at ION
Orchard have been reported to range between $20 and $60 psf per month.
Singapore Retailers Association (SRA) executive director Lau Chuen
Wei believed that high rents are 'putting a dent in retailers' bottom
lines'.
'Retailers have to work out their sums very carefully and make
location decisions depending on affordability as well as what market
segments they want to attract,' she said.
'Several new developments are coming on stream, but there is no
lowering of rents in sight,' she added.
Ms Lau said that properties offering the new space have 'clear ideas'
of their positioning and what kinds of retailers they want within
their properties.
Likewise, there are retailers who are very clear about where they
want to be. 'It's a matter of negotiation - and who wants who more,'
she said.
Knight Frank also suggested that retail rents may not suffer from
future over-supply.
In a research brief, it said that Singapore had 7.4 sq ft of
available retail space per person (capita) at end-2007, compared with
Hong Kong's 16.2 sq ft per capita.
Based on current population growth, Knight Frank reckoned that the
Singapore retail sector may have the capacity to grow by four million
sq ft in the next three years to get close to the 2004 level of 7.97
sq ft per capita.
It reckoned that a rise in retail sales over the next three years,
from $650.60 psf in 2007, will outpace the increase in retail space
to sustain growth in space productivity at close to $700 psf in 2010.
Super-prime Orchard mall rents hit record $54.40 psf
5.3% increase qoq is highest of all retail micro markets tracked by
CBRE
By ARTHUR SIM
CHANEL, Gucci, Louis Vuitton are big brands that scream 'high
fashion' on Orchard Road.
But lately, the screams are more likely to be the painful result of
rising rents.
CB Richard Ellis (CBRE) said that super prime retail space - defined
as space facing Orchard Road or in atriums - hit a record $54.40 per
square foot (psf) per month in the second quarter of this year.
This was an increase of 5.3 per cent quarter on quarter (qoq) - the
highest of all retail micro markets tracked by CBRE.
For the whole Orchard Road area, rents rose 1.1 per cent qoq in the
second quarter to average $36.80 psf per month - also a record.
The 'uncertain global business climate and imminent supply coming on
stream' now has retailers making more prudent decisions on space,
said CBRE. But 'there remains an appetite for expansion and retailers
are still keen to bring new brands into the market'.
An estimated 6.9 million sq ft of retail space will be completed
between the third quarter this year and 2012, with 48 per cent of
this coming on stream in 2009.
But still, said CBRE: 'We continued to see new entrants and openings
in Q2.'
It noted that Wisma Atria houses Jayson Brunsdon, Trois + Inch and
Levis Lady.
Thai fashion label Greyhound and Playhound is now available at Tangs
Orchard.
And Toshin will introduce eight new stores totalling 15,000 sq ft at
Takashimaya.
Of course, as new shops open, others close.
Wing Tai Retail will close two Topshop and Topman outlets in the
Orchard/Scotts Road area because the leases have expired.
The 12,000 sq ft Wisma Atria outlet will close this month and the
2,500 sq ft outlet at Isetan Scotts will close at the end of August.
Wing Tai will open a new store of more than 4,000 sq ft at an
undisclosed Orchard Road location later this year and expects to open
a 12,000 sq ft flagship store at ION Orchard when the mall is ready.
WingTai Retail executive director Helen Khoo said: 'We have been
looking for a suitable location for our new Topshop and Topman
flagship store in the Orchard Road area, and are preparing for
opportunities arising from a new retail landscape.'
Rents were not cited as a reason for the relocation. But rents at ION
Orchard have been reported to range between $20 and $60 psf per month.
Singapore Retailers Association (SRA) executive director Lau Chuen
Wei believed that high rents are 'putting a dent in retailers' bottom
lines'.
'Retailers have to work out their sums very carefully and make
location decisions depending on affordability as well as what market
segments they want to attract,' she said.
'Several new developments are coming on stream, but there is no
lowering of rents in sight,' she added.
Ms Lau said that properties offering the new space have 'clear ideas'
of their positioning and what kinds of retailers they want within
their properties.
Likewise, there are retailers who are very clear about where they
want to be. 'It's a matter of negotiation - and who wants who more,'
she said.
Knight Frank also suggested that retail rents may not suffer from
future over-supply.
In a research brief, it said that Singapore had 7.4 sq ft of
available retail space per person (capita) at end-2007, compared with
Hong Kong's 16.2 sq ft per capita.
Based on current population growth, Knight Frank reckoned that the
Singapore retail sector may have the capacity to grow by four million
sq ft in the next three years to get close to the 2004 level of 7.97
sq ft per capita.
It reckoned that a rise in retail sales over the next three years,
from $650.60 psf in 2007, will outpace the increase in retail space
to sustain growth in space productivity at close to $700 psf in 2010.
Morley aims for US$10b Asia-Pac property portfolio
July 9, 2008
Morley aims for US$10b Asia-Pac property portfolio
By EMILYN YAP
MORE property deals in Singapore and the region could be in the
making for Morley Fund Management, as it aims to build a US$10
billion real estate portfolio across the Asia-Pacific in the next
four to five years.
The Aviva-owned asset manager now has about US$1.3 billion committed
to real estate in the region. It made its debut in the Asia ex-Japan
property market recently with the acquisition of Commerce Point from
City Developments Ltd for about $180 million or $2,200 per square
foot (psf) of net lettable area.
The deal, first reported by BT last month, was finalised last
Thursday.
Morley has also set its sights on retail property in Asia-Pacific
but 'it is a tightly-held market, including in Singapore', says
Morley's head of Asia real estate Nick Ridgewell.
Retail property as an investment class offers less cyclical and
volatile returns than, say, office property, he reckons.
There is also a link between retail property returns and economic
performance. And affluence in the Asia-Pacific region is rising, he
says. Although the market for office properties in Singapore is
tight, Mr Ridgewell still expects some rental growth up to 2009.
Rents signed for recent deals in Commerce Point were $13 psf, he says.
New supply of office space may moderate rents subsequently but Mr
Ridgewell reckons that 'once we get through the pool of developments
due to hit the market from 2010 to 2013, there may not be a lot
coming after the next couple of years'.
In fact, Morley's investment in Commerce Point is for the long term,
he says. 'We are a core investor. We are not expecting this to
provide us with an opportunistic type of return. We are predominantly
known to be looking for long-term solid returns, a lot of it through
income and some capital growth.'
The asset manager plans to enhance Commerce Point's net lettable
area. The building's vacancy rate is below 10 per cent, a level
Morley is comfortable with. Morley will undergo a rebranding exercise
in September and will be known as Aviva Investors. The asset manager
has been expanding its Singapore office as business in the region
grows.
Morley aims for US$10b Asia-Pac property portfolio
By EMILYN YAP
MORE property deals in Singapore and the region could be in the
making for Morley Fund Management, as it aims to build a US$10
billion real estate portfolio across the Asia-Pacific in the next
four to five years.
The Aviva-owned asset manager now has about US$1.3 billion committed
to real estate in the region. It made its debut in the Asia ex-Japan
property market recently with the acquisition of Commerce Point from
City Developments Ltd for about $180 million or $2,200 per square
foot (psf) of net lettable area.
The deal, first reported by BT last month, was finalised last
Thursday.
Morley has also set its sights on retail property in Asia-Pacific
but 'it is a tightly-held market, including in Singapore', says
Morley's head of Asia real estate Nick Ridgewell.
Retail property as an investment class offers less cyclical and
volatile returns than, say, office property, he reckons.
There is also a link between retail property returns and economic
performance. And affluence in the Asia-Pacific region is rising, he
says. Although the market for office properties in Singapore is
tight, Mr Ridgewell still expects some rental growth up to 2009.
Rents signed for recent deals in Commerce Point were $13 psf, he says.
New supply of office space may moderate rents subsequently but Mr
Ridgewell reckons that 'once we get through the pool of developments
due to hit the market from 2010 to 2013, there may not be a lot
coming after the next couple of years'.
In fact, Morley's investment in Commerce Point is for the long term,
he says. 'We are a core investor. We are not expecting this to
provide us with an opportunistic type of return. We are predominantly
known to be looking for long-term solid returns, a lot of it through
income and some capital growth.'
The asset manager plans to enhance Commerce Point's net lettable
area. The building's vacancy rate is below 10 per cent, a level
Morley is comfortable with. Morley will undergo a rebranding exercise
in September and will be known as Aviva Investors. The asset manager
has been expanding its Singapore office as business in the region
grows.
China home prices seen dropping more
July 9, 2008
China home prices seen dropping more
Citic Ka Wah Bank cites weak demand, govt unlikely to ease up loan
restrictions
(SHANGHAI) Property prices in China will fall further because demand
is weak and the government probably won't relax restrictions on home
loans, according to Citic Ka Wah Bank chief economist Liao Qun.
'Policy targets with respect to the property market are still some
way from being reached,' Mr Liao said at a press briefing here
yesterday. 'The adjustment of the market is set to continue into
2009.'
China's government is seeking to rein in soaring property prices to
help slow inflation from an 11-year high. It raised interest rates on
mortgages for second homes and increased the minimum downpayment to
40 per cent of the sale price last September.
The central bank also told commercial banks to further tighten
mortgage lending last December. Under new rules, loan applications
for the purchase of a second apartment are counted by household
instead of by individual.
Housing sales in China fell 0.4 per cent to 136.6 million square
metres in the first four months of 2008 from a year earlier,
according to the National Development and Reform Commission (NDRC).
Home prices in 70 major cities rose 9.2 per cent in May, the smallest
gain in eight months.
First-tier cities including Shenzhen, Beijing, Guangzhou and Shanghai
will face more downward pressure on prices than smaller cities
because of oversupply, according to Mr Liao.
The economist said he expects home prices to fall a further 10-15 per
cent in Shenzhen, where average prices had already dropped 36.5 per
cent between last October and May this year. Prices in Beijing and
Shanghai are likely to fall 10 per cent over 12 months.
China Vanke Co, the country's largest publicly traded real estate
developer, said on Monday that apartment sales fell 22.8 per cent in
June from a year earlier.
Falling home prices in Shenzhen and Beijing have raised concerns that
an asset bubble burst may leave China's banks with more non-
performing loans. The banking regulator warned lenders in May against
a potential rebound in bad loans amid tighter credit controls and
rising inflation.
Property-related lending gained 30 per cent annually in the past two
years in China - twice as much as overall loan growth, according to
Moody's Investors Service. Some builders evaded lending controls by
indirectly accessing bank financing, it said.
The central People's Bank of China and government ministries held
talks on stabilising real estate prices, and may make financing
easier, the Beijing-based Economic Observer reported on July 5,
citing a person it didn't identify. A decline in property prices will
erode demand and disrupt economic growth, the newspaper said, citing
an NDRC report.
Mr Liao said yesterday that he doesn't expect the government to relax
rules on real estate financing soon. 'With excess liquidity still
prevailing, the government would be concerned that an early
relaxation of tightening measures would result in an undesired quick
rebound in the market, negating the previous tightening efforts,' he
said.
China home prices seen dropping more
Citic Ka Wah Bank cites weak demand, govt unlikely to ease up loan
restrictions
(SHANGHAI) Property prices in China will fall further because demand
is weak and the government probably won't relax restrictions on home
loans, according to Citic Ka Wah Bank chief economist Liao Qun.
'Policy targets with respect to the property market are still some
way from being reached,' Mr Liao said at a press briefing here
yesterday. 'The adjustment of the market is set to continue into
2009.'
China's government is seeking to rein in soaring property prices to
help slow inflation from an 11-year high. It raised interest rates on
mortgages for second homes and increased the minimum downpayment to
40 per cent of the sale price last September.
The central bank also told commercial banks to further tighten
mortgage lending last December. Under new rules, loan applications
for the purchase of a second apartment are counted by household
instead of by individual.
Housing sales in China fell 0.4 per cent to 136.6 million square
metres in the first four months of 2008 from a year earlier,
according to the National Development and Reform Commission (NDRC).
Home prices in 70 major cities rose 9.2 per cent in May, the smallest
gain in eight months.
First-tier cities including Shenzhen, Beijing, Guangzhou and Shanghai
will face more downward pressure on prices than smaller cities
because of oversupply, according to Mr Liao.
The economist said he expects home prices to fall a further 10-15 per
cent in Shenzhen, where average prices had already dropped 36.5 per
cent between last October and May this year. Prices in Beijing and
Shanghai are likely to fall 10 per cent over 12 months.
China Vanke Co, the country's largest publicly traded real estate
developer, said on Monday that apartment sales fell 22.8 per cent in
June from a year earlier.
Falling home prices in Shenzhen and Beijing have raised concerns that
an asset bubble burst may leave China's banks with more non-
performing loans. The banking regulator warned lenders in May against
a potential rebound in bad loans amid tighter credit controls and
rising inflation.
Property-related lending gained 30 per cent annually in the past two
years in China - twice as much as overall loan growth, according to
Moody's Investors Service. Some builders evaded lending controls by
indirectly accessing bank financing, it said.
The central People's Bank of China and government ministries held
talks on stabilising real estate prices, and may make financing
easier, the Beijing-based Economic Observer reported on July 5,
citing a person it didn't identify. A decline in property prices will
erode demand and disrupt economic growth, the newspaper said, citing
an NDRC report.
Mr Liao said yesterday that he doesn't expect the government to relax
rules on real estate financing soon. 'With excess liquidity still
prevailing, the government would be concerned that an early
relaxation of tightening measures would result in an undesired quick
rebound in the market, negating the previous tightening efforts,' he
said.
HSBC unveils mortgage plan that promises interest savings
July 9, 2008
HSBC unveils mortgage plan that promises interest savings
In its new scheme, interest rate charged on top of benchmark rate
drops each year
By Grace Ng
HOME loan customers typically expect to fork out a higher interest
rate on the anniversary of their mortgages.
But in a novel move, HSBC has become the first bank in Singapore to
turn this conventional practice on its head. It is launching a
mortgage in which the interest rate charged on top of a transparent
benchmark rate gets smaller each year.
This may mean some interest savings for customers, which
HSBC hopes will convince them to stay loyal to its package, rather
than refinancing their loan to get a better rate in a few years'
time.
Ms Wendy Lim, HSBC's head of consumer banking, said the bank
introduced this package after conducting a study among home loan
customers.
It showed that most of them 'liked the concept of inverse pricing in
their home loan rates, as it translates to more savings for them in
the long run', she said.
HSBC's so-called 'loyalty package', which will be launched tomorrow,
offers the three-month Singapore Interbank Offered Rate (Sibor) rate
plus 0.75 per cent.
Currently, the Sibor is at 1.156 per cent - the lowest level in
almost four years. So HSBC's first-year rate will be about 1.906 per
cent.
The spread on the mortgage rate drops further to the Sibor plus 0.65
per cent in the second year, and the Sibor plus 0.55 per cent from
the third year onwards. The package has no lock-in period.
HSBC's rivals currently offer Sibor-linked packages with spreads that
either stay constant or rise over time.
DBS Bank's Managed Mortgage offers a three-month Sibor plus 1.25 per
cent annually for a package without a lock-in period, according to
its website.
But DBS also offers a loyalty package at the Sibor plus 0.8 per cent
for customers who stick to the mortgage for three years, said Mr Koh
Kar Siong, DBS' head of consumer deposits and secured lending. After
three years, the rate goes back up to the Sibor plus 1.25 per cent.
Industry players say practically all banks offer promotional rates of
the Sibor plus 0.7 per cent or even less for three years to their
best customers. So this trumps
HSBC's first-year rate of the Sibor plus 0.75 per cent.
Still, compared to a customer who pays the Sibor plus 0.7 per cent, a
HSBC loyalty package customer may enjoy $3,859 of interest savings
over five years on a 20-year, $1 million mortgage. This is based on
the assumption that the Sibor does not change.
HSBC, which has one of the smallest home loan books among the seven
or so major lenders in Singapore, may be looking to grab some market
share by dangling cheaper rates.
But bankers say a price war is unlikely to break out as the market
for new mortgage customers remains muted amid a relatively quiet
property scene.
For customers contemplating a switch from another bank's product to
HSBC's new loan, the legal costs of switching may still cancel out
any savings, said one banker.
OCBC Bank's head of secured lending, Mr Gregory Chan, noted: 'We will
continue to offer loan packages with promotional rates that are
competitive compared to the other market players.
HSBC unveils mortgage plan that promises interest savings
In its new scheme, interest rate charged on top of benchmark rate
drops each year
By Grace Ng
HOME loan customers typically expect to fork out a higher interest
rate on the anniversary of their mortgages.
But in a novel move, HSBC has become the first bank in Singapore to
turn this conventional practice on its head. It is launching a
mortgage in which the interest rate charged on top of a transparent
benchmark rate gets smaller each year.
This may mean some interest savings for customers, which
HSBC hopes will convince them to stay loyal to its package, rather
than refinancing their loan to get a better rate in a few years'
time.
Ms Wendy Lim, HSBC's head of consumer banking, said the bank
introduced this package after conducting a study among home loan
customers.
It showed that most of them 'liked the concept of inverse pricing in
their home loan rates, as it translates to more savings for them in
the long run', she said.
HSBC's so-called 'loyalty package', which will be launched tomorrow,
offers the three-month Singapore Interbank Offered Rate (Sibor) rate
plus 0.75 per cent.
Currently, the Sibor is at 1.156 per cent - the lowest level in
almost four years. So HSBC's first-year rate will be about 1.906 per
cent.
The spread on the mortgage rate drops further to the Sibor plus 0.65
per cent in the second year, and the Sibor plus 0.55 per cent from
the third year onwards. The package has no lock-in period.
HSBC's rivals currently offer Sibor-linked packages with spreads that
either stay constant or rise over time.
DBS Bank's Managed Mortgage offers a three-month Sibor plus 1.25 per
cent annually for a package without a lock-in period, according to
its website.
But DBS also offers a loyalty package at the Sibor plus 0.8 per cent
for customers who stick to the mortgage for three years, said Mr Koh
Kar Siong, DBS' head of consumer deposits and secured lending. After
three years, the rate goes back up to the Sibor plus 1.25 per cent.
Industry players say practically all banks offer promotional rates of
the Sibor plus 0.7 per cent or even less for three years to their
best customers. So this trumps
HSBC's first-year rate of the Sibor plus 0.75 per cent.
Still, compared to a customer who pays the Sibor plus 0.7 per cent, a
HSBC loyalty package customer may enjoy $3,859 of interest savings
over five years on a 20-year, $1 million mortgage. This is based on
the assumption that the Sibor does not change.
HSBC, which has one of the smallest home loan books among the seven
or so major lenders in Singapore, may be looking to grab some market
share by dangling cheaper rates.
But bankers say a price war is unlikely to break out as the market
for new mortgage customers remains muted amid a relatively quiet
property scene.
For customers contemplating a switch from another bank's product to
HSBC's new loan, the legal costs of switching may still cancel out
any savings, said one banker.
OCBC Bank's head of secured lending, Mr Gregory Chan, noted: 'We will
continue to offer loan packages with promotional rates that are
competitive compared to the other market players.
Posh condo on sale amid weak market
July 9, 2008
Posh condo on sale amid weak market
By Joyce Teo, Property Correspondent
A LUXURY condominium that lets residents park their cars right in
front of their high-rise units has been released for sale at a price
analysts consider rather steep, given the quiet market.
The Hamilton Scotts project - it has special lifts to bring the cars
to the desired floor - will likely be listed at an average of $3,800
per sq ft (psf), said developer Hayden Properties yesterday.
That will price the 52 regular units of about 2,700 sq ft at between
$8 million and $12 million each. The 30-storey freehold condo in
Scotts Road also has two junior penthouses of about 3,200 sq ft and
two penthouses of around 7,100 sq ft.
Market insiders say the condo could be priced between just under
$3,000 psf to over $4,000 psf, while one market watcher says it could
have fetched between $3,500 and $4,500 psf last year.
However, the $3,800 psf average price is still relatively high given
the cooling market for luxury homes.
There are several posh projects in the pipeline, but developers have
been holding back launches amid the uncertain climate.
The luxury segment has taken a big hit after the dizzying highs hit
last year. Prices are down about 10 per cent with falls of a further
5 to 10 per cent expected by the end of the year, said Savills
Singapore.
The only other major luxury development released for sale this year
was the 100-unit Nassim Park Residences. More than half the units
have been sold since May, with prices averaging $3,000 psf.
'Hayden is probably keen to take advantage of this quiet period to
launch, after the release of Nassim Park Residences and before the
Hungry Ghost Festival,' said Savills director of marketing and
business development Ku Swee Yong.
Knight Frank's director of research and consultancy, Mr Nicholas Mak,
believes The Hamilton Scotts has enough appeal to defy the trend
somewhat: 'There will still be takers as it is a unique product. But
this is the time for mass market projects.'
The recent pickup in launches was almost all in the mass market or
mid-tier segment.
Hayden managing director Ong Chih Ching said it should be able to get
offers if the project is priced correctly. However, it would not sell
if the price is not right.
'We are previewing it and not launching it because this is not the
right climate to launch,' said Ms Ong, who added that Hayden has
temporarily halted sales at its ultra- posh Ritz-Carlton Residences
until the mood improves.
Posh condo on sale amid weak market
By Joyce Teo, Property Correspondent
A LUXURY condominium that lets residents park their cars right in
front of their high-rise units has been released for sale at a price
analysts consider rather steep, given the quiet market.
The Hamilton Scotts project - it has special lifts to bring the cars
to the desired floor - will likely be listed at an average of $3,800
per sq ft (psf), said developer Hayden Properties yesterday.
That will price the 52 regular units of about 2,700 sq ft at between
$8 million and $12 million each. The 30-storey freehold condo in
Scotts Road also has two junior penthouses of about 3,200 sq ft and
two penthouses of around 7,100 sq ft.
Market insiders say the condo could be priced between just under
$3,000 psf to over $4,000 psf, while one market watcher says it could
have fetched between $3,500 and $4,500 psf last year.
However, the $3,800 psf average price is still relatively high given
the cooling market for luxury homes.
There are several posh projects in the pipeline, but developers have
been holding back launches amid the uncertain climate.
The luxury segment has taken a big hit after the dizzying highs hit
last year. Prices are down about 10 per cent with falls of a further
5 to 10 per cent expected by the end of the year, said Savills
Singapore.
The only other major luxury development released for sale this year
was the 100-unit Nassim Park Residences. More than half the units
have been sold since May, with prices averaging $3,000 psf.
'Hayden is probably keen to take advantage of this quiet period to
launch, after the release of Nassim Park Residences and before the
Hungry Ghost Festival,' said Savills director of marketing and
business development Ku Swee Yong.
Knight Frank's director of research and consultancy, Mr Nicholas Mak,
believes The Hamilton Scotts has enough appeal to defy the trend
somewhat: 'There will still be takers as it is a unique product. But
this is the time for mass market projects.'
The recent pickup in launches was almost all in the mass market or
mid-tier segment.
Hayden managing director Ong Chih Ching said it should be able to get
offers if the project is priced correctly. However, it would not sell
if the price is not right.
'We are previewing it and not launching it because this is not the
right climate to launch,' said Ms Ong, who added that Hayden has
temporarily halted sales at its ultra- posh Ritz-Carlton Residences
until the mood improves.
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