April 27, 2008
Goodbye, en bloc sales
By Teo Cheng Wee
Pender Court. Finland Gardens. Tulip Garden. Makeway View. These were all attempts to sell an estate en bloc which fell through, all within this month.
But even as the en bloc fever cools, not all the affected residents are getting hot under the collar. Many told The Sunday Times that they were disappointed to miss out on a good price, but were happy to stay put.
It was reported last Friday that the sale of Pender Court, off West Coast Highway, had fallen through. Others reported include Finland Gardens in Siglap on Tuesday; Tulip Garden in Holland Road on April 9; and Makeway View in the Newton area on April 1.
Italian expatriate Lucia Omodei, 43, who has lived at Tulip Garden for six years, said: 'We looked elsewhere in case we had to move out, but we didn't find anything this ideal. Besides, we would miss our neighbours.'
A fellow resident, music teacher Y.C. Lee, 75, saw the bright side in the 'consolation hongbao' he received, a $120,000 payout which was his share of the $25 million deposit that the buyer forfeited.
The unhappy ones are most likely those who had bought another house and now face financing issues.
The Sunday Times spoke to residents in some of the failed en bloc estates to find out how their lives have been affected.
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Couple's dream turns to nightmare
From en bloc dreams to endless nightmares - that was how Madam S.L. Chia and her husband described their experience these past two years.
It became a nightmare because the promised $1.1 million from the sale of the couple's Finland Gardens flat never came, as the deal became snagged in a dispute.
They were still servicing the loan on their flat, in Siglap, when the couple went ahead and took a loan on a second property.
Thus, closure of sorts came for them when, last week, the collective sale was called off. It had been sold in November 2006.
Madam Chia, 47, her husband, 55, and their son, 15, will be staying put in Finland Gardens, which has been their home for the last 14 years.
She felt that the collective sale had rushed her into buying a second flat.
A friend had advised them to buy another place quickly because he expected that property prices would go up further.
'He was right. Within six months of our new home purchase, prices went crazy,' said Madam Chia, who works in the media industry.
The new flat, further away in Upper East Coast, cost $800,000. Madam Chia took a 10-year loan that resulted in her having to pay $4,000 - effectively, her monthly salary - every month.
What the couple did not expect was that minority owners would successfully object to the sale.
The couple had ended up so strapped they could not afford to renovate their new house - something they can finally do now.
'And enough of the term 'en bloc' please,' Madam Chia said.
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Deal's off but she still lucked out
For housewife Jane (not her real name), the no-go on the en bloc deal at Tulip Garden, where she has a flat, proved a blessing.
Worried about spiralling home prices when talk of a collective sale started last year, she liquidated all her stocks in August to help pay for a $3 million apartment near Holland Road.
'Prices in the area were going up by $200,000 every month. I got scared,' Jane, 58, told The Sunday Times.
But selling her stocks was the right move - she cashed out before the stock market took a hit late last year.
If there had been no en bloc push, she probably would have held on to the stocks, she admitted.
Her family got a $120,000 share of the deposit the buyer had forfeited for Tulip Garden.
She noted that she was lucky. Her finances allowed her to buy another home without depending on money from the collective sale.
'Those who do - and I know a few residents in this situation - may have some problems,' she said.
Jane thinks Tulip Garden is still a good property because Farrer MRT station will be up in a few years. That could drive prices even further up, she said.
She will keep her unit and rent it out and move to her new home. She has an added reason to do so.
'This en bloc issue has soured relationships between myself and some of the neighbours here because I didn't want to sign for it initially. So I don't want to stay here any more,' she said.
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He's glad that 2-year saga is finally over
Mr Micky Sim was overseas when he first heard that his estate, Finland Gardens, was going to be sold en bloc two years ago.
The first thing he did was to call his contractor who was renovating the unit he had recently bought there.
'I cut back by at least 30 per cent. Forget about partitions. And we made things movable, rather than fixed,' said Mr Sim, 38.
He bought the apartment before the deal was announced.
Two years on, he can finally go ahead and finish the renovations.
As one of the minority owners who contested the sale of Finland Gardens, he is delighted that the estate will no longer be sold.
But he feels that most of the majority owners will not be unhappy either, as the deal was made before the upswing in the property market last year.
Mr Sim, who works as a director in a shipping company, thinks that even if the owners sell the apartments themselves, they can do better than the $504 per square foot price offered by the en bloc buyer - even though the market has since been cooling.
Still, he is happy to stay put at his home and will sell only if the price is right.
The two-year saga has hurt the spirit of the community somewhat, he conceded.
But he feels that most neighbours are still on good terms.
'It's time for everyone to move on. Let bygones be bygones,' he added.
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Doc, 53, has to finance 2nd home
Dr Chia Kiat Swan is decidedly philosophical about the recent purchase of his second home.
The medical doctor had bought a landed property - he declined to say where - thinking that it could be paid for with the $2.5 million he expected to get from the collective sale of his Tulip Garden apartment.
Instead, the money will now have to come from out of his pocket after the deal fell through earlier this month.
'Life is uncertain. We just have to make adjustments,' said Dr Chia, 53, who is married with two children and has lived in Tulip Garden for 22 years.
On the bright side, the new house which he bought in the middle of last year is now being rented out and getting returns 'good enough to pay back the loan plus interest'.
He added that he was not alone, as he knew of other people who had also bought units in anticipation of the collective sale going through.
'But as far as I'm aware, no one is in financial crisis because of their decision,' noted Dr Chia, who is also the chairman of Tulip Garden's management council.
Having already fully paid for his Tulip Garden home, it pains him to think about having to spend another 15 years to finance his new house.
That is when he gets philosophical again.
He said: 'If I can make a profit, I'll sell the house. Anyway, I'm not planning to retire so early. I can't be playing golf every day.'
Copyright © 2007 Singapore Press Holdings. All rights reserved. Privacy Statement & Condition of Access
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EastLiving - Singapore Property and Real Estate DB
Sunday, April 27, 2008
UOB-Kay Hian to build site for own use
Business Times - 26 Apr 2008
UOB-Kay Hian to build site for own use
By VEN SREENIVASAN
INVESTMENT house UOB- Kay Hian will develop the Scotts Road/Anthony Road site which it clinched this week for its own use, a senior company official told BT yesterday.
'It will be our new office when fully developed,' said Esmond Choo, the company's executive director. 'It will give us some 140,000 square feet of office space, which should be sufficient to house our 2,500 staff. The location is a nice, upmarket area, near the MRT station and next to the prime shopping and hotel areas.'
UOB-Kay Hian beat out seven other bidders with its record $34 million tender for the 15-year-lease site this week. This works out to $242.5 per sq ft for the 93,461 sq ft plot - double original estimates by property market insiders.
UOB-Kay Hian's bid was also some 11 per cent more than what had been paid for the first transition office site in Newton in August 2007.
Asked why UOB-Kay Hian paid record prices for a 15-year-lease property, Mr Choo said: 'We see the office rental market continuing to tighten up and rentals trending up in the foreseeable future. So we decided to take ourselves out of the equation. This way, we will not face major disruptions and it will give us more predictability in terms of our operating costs.'
Rentals in the prime Raffles Place area, where UOB-Kay Hian has its 100,000 sq ft office, averaged over $15-18 psf amid continuing tightening in the office space supply market through the first quarter. This is much higher than the $6-8 psf monthly gross rent commanded in the Scotts Road area.
UOB-Kay Hian itself is said to be paying around $10 psf despite operating out of its parent UOB's premises. But Mr Choo added that UOB-Kay Hian would keep its outlay on the new property within reasonable limits, bearing in mind that it would be a transitional office with a relatively short lease.
'We expect to spend about $200 psf to develop it into a nice low-rise office headquarters housing our entire operations,' he said. 'It will be a nice, comfortable, efficient and attractive glass-and-concrete building.'
Mr Choo did not say what the company would do after the 15-year lease is up.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
UOB-Kay Hian to build site for own use
By VEN SREENIVASAN
INVESTMENT house UOB- Kay Hian will develop the Scotts Road/Anthony Road site which it clinched this week for its own use, a senior company official told BT yesterday.
'It will be our new office when fully developed,' said Esmond Choo, the company's executive director. 'It will give us some 140,000 square feet of office space, which should be sufficient to house our 2,500 staff. The location is a nice, upmarket area, near the MRT station and next to the prime shopping and hotel areas.'
UOB-Kay Hian beat out seven other bidders with its record $34 million tender for the 15-year-lease site this week. This works out to $242.5 per sq ft for the 93,461 sq ft plot - double original estimates by property market insiders.
UOB-Kay Hian's bid was also some 11 per cent more than what had been paid for the first transition office site in Newton in August 2007.
Asked why UOB-Kay Hian paid record prices for a 15-year-lease property, Mr Choo said: 'We see the office rental market continuing to tighten up and rentals trending up in the foreseeable future. So we decided to take ourselves out of the equation. This way, we will not face major disruptions and it will give us more predictability in terms of our operating costs.'
Rentals in the prime Raffles Place area, where UOB-Kay Hian has its 100,000 sq ft office, averaged over $15-18 psf amid continuing tightening in the office space supply market through the first quarter. This is much higher than the $6-8 psf monthly gross rent commanded in the Scotts Road area.
UOB-Kay Hian itself is said to be paying around $10 psf despite operating out of its parent UOB's premises. But Mr Choo added that UOB-Kay Hian would keep its outlay on the new property within reasonable limits, bearing in mind that it would be a transitional office with a relatively short lease.
'We expect to spend about $200 psf to develop it into a nice low-rise office headquarters housing our entire operations,' he said. 'It will be a nice, comfortable, efficient and attractive glass-and-concrete building.'
Mr Choo did not say what the company would do after the 15-year lease is up.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
HDB resale transactions decline 6% in Q1
Business Times - 26 Apr 2008
HDB resale transactions decline 6% in Q1
Median COV was $21,000, compared to $22,000 in Q407
By EMILYN YAP
TRANSACTIONS of resale HDB flats fell 6 per cent from the fourth quarter of 2007 to 6,360 in Q1 this year, against the backdrop of rising asking prices and high cash-over-valuation (COV) demands.
'With escalating resale prices and more and more COV transactions, we saw the resale market hit resistance in Q4 last year as HDB flat buyers do not have or are not willing to part with so much cash,' said property agency ERA's assistant vice-president Eugene Lim. 'This resistance carried through to the first quarter this year.'
In Q4 2007, a total of 6,750 resale flats changed hands, which was itself a 13 per cent drop from Q3 2007.
HDB's resale price index rose 3.7 per cent in Q1 this year compared with Q4 2007.
But this increase was lower than the 5.7 per cent quarter-on-quarter rise in Q4 2007.
The median COV of all resale flats in Q1 this year was $21,000, slightly down from $22,000 in Q4 2007.
In some estates, the drop was much larger.
The median COV of executive flats in Bishan, for instance, plunged $25,000-$45,000 in Q1 2008, and that of five-room flats in Marine Parade fell $15,000-$50,000.
On the resale price trend, PropNex CEO Mohamed Ismail believes an increase is sustainable in the long term and that double-digit growth this year is attainable, given the robust economy.
Mr Ismail reckons the falling COV reflects a smaller number of private property and en bloc downgraders in the market.
He expects the COV to stabilise at $20,000 islandwide for the year, as demand for resale flats increases and the number of surplus flats falls.
ERA's Mr Lim also expects the resale market to remain healthy for the rest of the year, though price growth may be more measured.
'For the whole year, we do not expect resale prices to increase more than 10 per cent,' he said.
He noted that some demand for resale flats may be diverted to the increasing number of new flats coming on stream.
'First-timers and those that can wait a couple of years are likely to go for new flats, as buying direct from HDB involves little or no cash outlay,' he said.
HDB said yesterday it plans to offer 5,000 new flats under the Build-To-Order (BTO) system during the next six months.
Together with 1,100 launched in Q1, the planned BTO supply of 6,100 new flats for January to September will exceed the numbers of BTO flats launched in 2007 or 2006, which were 6,000 and 2,400 respectively.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
HDB resale transactions decline 6% in Q1
Median COV was $21,000, compared to $22,000 in Q407
By EMILYN YAP
TRANSACTIONS of resale HDB flats fell 6 per cent from the fourth quarter of 2007 to 6,360 in Q1 this year, against the backdrop of rising asking prices and high cash-over-valuation (COV) demands.
'With escalating resale prices and more and more COV transactions, we saw the resale market hit resistance in Q4 last year as HDB flat buyers do not have or are not willing to part with so much cash,' said property agency ERA's assistant vice-president Eugene Lim. 'This resistance carried through to the first quarter this year.'
In Q4 2007, a total of 6,750 resale flats changed hands, which was itself a 13 per cent drop from Q3 2007.
HDB's resale price index rose 3.7 per cent in Q1 this year compared with Q4 2007.
But this increase was lower than the 5.7 per cent quarter-on-quarter rise in Q4 2007.
The median COV of all resale flats in Q1 this year was $21,000, slightly down from $22,000 in Q4 2007.
In some estates, the drop was much larger.
The median COV of executive flats in Bishan, for instance, plunged $25,000-$45,000 in Q1 2008, and that of five-room flats in Marine Parade fell $15,000-$50,000.
On the resale price trend, PropNex CEO Mohamed Ismail believes an increase is sustainable in the long term and that double-digit growth this year is attainable, given the robust economy.
Mr Ismail reckons the falling COV reflects a smaller number of private property and en bloc downgraders in the market.
He expects the COV to stabilise at $20,000 islandwide for the year, as demand for resale flats increases and the number of surplus flats falls.
ERA's Mr Lim also expects the resale market to remain healthy for the rest of the year, though price growth may be more measured.
'For the whole year, we do not expect resale prices to increase more than 10 per cent,' he said.
He noted that some demand for resale flats may be diverted to the increasing number of new flats coming on stream.
'First-timers and those that can wait a couple of years are likely to go for new flats, as buying direct from HDB involves little or no cash outlay,' he said.
HDB said yesterday it plans to offer 5,000 new flats under the Build-To-Order (BTO) system during the next six months.
Together with 1,100 launched in Q1, the planned BTO supply of 6,100 new flats for January to September will exceed the numbers of BTO flats launched in 2007 or 2006, which were 6,000 and 2,400 respectively.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Higher rents boost UIC, SingLand Q1 earnings
Business Times - 26 Apr 2008
Higher rents boost UIC, SingLand Q1 earnings
HIGHER hotel and rental takings boosted the earnings of Singapore Land and parent United Industrial Corp (UIC) in the first quarter of this year.
SingLand's net profit rose 20 per cent to $33.7 million as revenue rose 85 per cent to $83 million in the three months to March 31, due mainly to the contribution from the Pan Pacific Singapore hotel and higher rental income. Earnings per share increased to 8.2 cents from 6.8 cents.
Following Marina Centre Holdings' acquisition in April 2007 of the remaining 50 per cent interest in Hotel Marina City (HMC), which owns Pan Pacific Singapore, HMC became a wholly owned subsidiary of SingLand.
Gross rental income at $52.2 million was up 20 per cent, attributable mainly to higher rents, SingLand said.
'The Singapore office and retail rental market is expected to remain positive with moderate economic growth and tight supply of office space,' it said. 'With the ongoing global financial and economic uncertainties, the cautious sentiment in the private home market is expected to prevail.'
SingLand is a key office landlord here, with assets including Singapore Land Tower and SGX Centre in the heart of the business district.
At parent UIC, Q1 net profit increased 45 per cent to $32.1 million while revenue grew 85 per cent to $150.4 million. The jump in revenue was attributed to the consolidation of revenue from Pan Pacific hotel, higher sales of properties held for sale and recognised on percentage of completion basis, and higher rental income. UIC's earnings per share rose to 2.3 cents from 1.6 cents.
SingLand shares closed down three cents at $7.27 yesterday, while UIC shares fell two cents to $2.77.
Higher rents boost UIC, SingLand Q1 earnings
HIGHER hotel and rental takings boosted the earnings of Singapore Land and parent United Industrial Corp (UIC) in the first quarter of this year.
SingLand's net profit rose 20 per cent to $33.7 million as revenue rose 85 per cent to $83 million in the three months to March 31, due mainly to the contribution from the Pan Pacific Singapore hotel and higher rental income. Earnings per share increased to 8.2 cents from 6.8 cents.
Following Marina Centre Holdings' acquisition in April 2007 of the remaining 50 per cent interest in Hotel Marina City (HMC), which owns Pan Pacific Singapore, HMC became a wholly owned subsidiary of SingLand.
Gross rental income at $52.2 million was up 20 per cent, attributable mainly to higher rents, SingLand said.
'The Singapore office and retail rental market is expected to remain positive with moderate economic growth and tight supply of office space,' it said. 'With the ongoing global financial and economic uncertainties, the cautious sentiment in the private home market is expected to prevail.'
SingLand is a key office landlord here, with assets including Singapore Land Tower and SGX Centre in the heart of the business district.
At parent UIC, Q1 net profit increased 45 per cent to $32.1 million while revenue grew 85 per cent to $150.4 million. The jump in revenue was attributed to the consolidation of revenue from Pan Pacific hotel, higher sales of properties held for sale and recognised on percentage of completion basis, and higher rental income. UIC's earnings per share rose to 2.3 cents from 1.6 cents.
SingLand shares closed down three cents at $7.27 yesterday, while UIC shares fell two cents to $2.77.
Office property prices edge up by just 1.1% in Q1
Business Times - 26 Apr 2008
Office property prices edge up by just 1.1% in Q1
Growth slows as foreign investors leave the market, demand lower prices
By ARTHUR SIM
OFFICE property prices took a hit in the first quarter of 2008, with foreign investors either withdrawing from the market or demanding lower prices.
According to data from the Urban Redevelopment Authority (URA), office property prices grew a marginal 1.1 per cent in Q1, compared with an 8 per cent increase in the previous quarter.
DTZ Debenham Tie Leung executive director (research and consultancy) Ong Choon Fah believes the office sector has been bolstered by foreign funds that have since been hurt by the global credit crunch, and that there are worries over impending new supply post-2010.
'Funding is now an issue,' she said. 'Investors are adopting a cautious approach.'
URA said that at end-Q1, a total of about 1.49 million square metres of gross floor area of office space was in the pipeline. This includes the new space from the redevelopment of former UIC Building (79,900 sq m) and the former SPI Building (32,000 sq m), both of which were granted planning approval for development in the quarter.
Cushman & Wakefield managing director Donald Han notes that price retreats from Q4 2007 to Q1 2008 could be due to lower prices achieved for 1 Phillip Street and potentially 1 George Street, which saw transactions at $2,500 psf and $2,600 psf respectively. Previous highs include Chevron House and Hitachi Tower at $2,700 psf and $2,900 psf respectively.
On the upside, overall office rents remained relatively stable in Q1, growing 7.3 per cent in Q1 compared with 10.9 per cent in the previous quarter.
'Yields will rise from 3.5-4 per cent per annum last year to 4.5-5 per cent per annum this year to compensate investors from the global financial market uncertainty,' Mr Han said.
'As such, we will see capital values stabilising this year, with moderated rental growth to provide the necessary yield uptick. We will see the emergence of Reits and owner occupiers as primary base investors.'
Knight Frank director (research and consultancy) Nicholas Mak believes one reason for the slower price and rental increases is that office tenants have become resistant to higher asking prices. He also noted some demand has been diverted to office space located outside the CBD.
URA also said a total of 435,000 sq m of business park space is in the pipeline from projects expected to be completed between the current Q2 and 2011.
The overall office vacancy rate rose marginally to 7.7 per cent in Q1, from 7.3 per cent in the preceding quarter. DTZ's Mrs Ong attributes this to office buildings being vacated for retrofitting or renovation.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Office property prices edge up by just 1.1% in Q1
Growth slows as foreign investors leave the market, demand lower prices
By ARTHUR SIM
OFFICE property prices took a hit in the first quarter of 2008, with foreign investors either withdrawing from the market or demanding lower prices.
According to data from the Urban Redevelopment Authority (URA), office property prices grew a marginal 1.1 per cent in Q1, compared with an 8 per cent increase in the previous quarter.
DTZ Debenham Tie Leung executive director (research and consultancy) Ong Choon Fah believes the office sector has been bolstered by foreign funds that have since been hurt by the global credit crunch, and that there are worries over impending new supply post-2010.
'Funding is now an issue,' she said. 'Investors are adopting a cautious approach.'
URA said that at end-Q1, a total of about 1.49 million square metres of gross floor area of office space was in the pipeline. This includes the new space from the redevelopment of former UIC Building (79,900 sq m) and the former SPI Building (32,000 sq m), both of which were granted planning approval for development in the quarter.
Cushman & Wakefield managing director Donald Han notes that price retreats from Q4 2007 to Q1 2008 could be due to lower prices achieved for 1 Phillip Street and potentially 1 George Street, which saw transactions at $2,500 psf and $2,600 psf respectively. Previous highs include Chevron House and Hitachi Tower at $2,700 psf and $2,900 psf respectively.
On the upside, overall office rents remained relatively stable in Q1, growing 7.3 per cent in Q1 compared with 10.9 per cent in the previous quarter.
'Yields will rise from 3.5-4 per cent per annum last year to 4.5-5 per cent per annum this year to compensate investors from the global financial market uncertainty,' Mr Han said.
'As such, we will see capital values stabilising this year, with moderated rental growth to provide the necessary yield uptick. We will see the emergence of Reits and owner occupiers as primary base investors.'
Knight Frank director (research and consultancy) Nicholas Mak believes one reason for the slower price and rental increases is that office tenants have become resistant to higher asking prices. He also noted some demand has been diverted to office space located outside the CBD.
URA also said a total of 435,000 sq m of business park space is in the pipeline from projects expected to be completed between the current Q2 and 2011.
The overall office vacancy rate rose marginally to 7.7 per cent in Q1, from 7.3 per cent in the preceding quarter. DTZ's Mrs Ong attributes this to office buildings being vacated for retrofitting or renovation.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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