A former employee of a real estate company has been sentenced to four-and-a-half years’ jail for withdrawing more than half a million dollars from the bank accounts of a condominium management committee.
Chew Swee Siong, 31, from Kenwood Property Consultants used to be based at West Bay Condominium at West Coast Crescent when he committed the offences between 18 November 2006 and 10 July 2007.
He pleaded guilty to 28 charges in May this year while another 158 were taken into consideration.
Chew told the authorities that he had made off with more than S$1.5 million in all, over a space of 18 months.
To feed his gambling habit, he had forged the signatures of two people to get the cash.
Chew could have been jailed up to seven years and fined.
Source: Channel News Asia, 30 Jun 2010
Wednesday, June 30, 2010
Property auction market up 20% in H1
The Singapore property auction market rose 20 per cent on-year in the first half of this year to S$87 million, according to property consultants Colliers International.
A total of 440 properties were put up for auction, of which 378 properties were from property owners while only 62 were mortgagee sales.
Colliers said the sharp fall in the number of properties put up for mortgage sale is a reflection of the vastly-improved financial position of mortgagors.
April saw the highest value from auctions when 12 properties changed hands at a total value of more than S$24.4 million.
The lull period was in May, when only two properties were sold for S$6.89 million. This could be due to concerns over European debts, as well as the tension between North and South Korea which sent jitters through the stock market, said Colliers.
It added that buying interest at auctions will also remain keen as liquidity in the market is high and more investors are looking to real estate to hedge against inflation.
The sale of seven landed properties contributed 23.1 per cent or S$20.08 million to auction transactions during the six-month period.
Four out of the seven landed properties are located in the Bukit Timah vicinity.
Other types of properties sold in auctions are retail properties, which contributed S$20.07 million or 23.1 per cent to total sales; as well as high-end apartments which contributed S$13.38 million or 15.4 per cent.
Source: Channel News Asia, 30 Jun 2010
A total of 440 properties were put up for auction, of which 378 properties were from property owners while only 62 were mortgagee sales.
Colliers said the sharp fall in the number of properties put up for mortgage sale is a reflection of the vastly-improved financial position of mortgagors.
April saw the highest value from auctions when 12 properties changed hands at a total value of more than S$24.4 million.
The lull period was in May, when only two properties were sold for S$6.89 million. This could be due to concerns over European debts, as well as the tension between North and South Korea which sent jitters through the stock market, said Colliers.
It added that buying interest at auctions will also remain keen as liquidity in the market is high and more investors are looking to real estate to hedge against inflation.
The sale of seven landed properties contributed 23.1 per cent or S$20.08 million to auction transactions during the six-month period.
Four out of the seven landed properties are located in the Bukit Timah vicinity.
Other types of properties sold in auctions are retail properties, which contributed S$20.07 million or 23.1 per cent to total sales; as well as high-end apartments which contributed S$13.38 million or 15.4 per cent.
Source: Channel News Asia, 30 Jun 2010
S'pore slips a notch in expat living cost ranking
In Asia-Pac, it's now fourth, after Tokyo, Osaka, HK: survey
SINGAPORE is the 11th most expensive city in the world for expatriates, one place lower than its 10th position last year, says HR consultancy firm Mercer.
But the city moved up a notch to fourth place among cities in Asia-Pacific - which for the first time has three cities in the top 10 list of the dearest places for expats.
Tokyo remains the most expensive city in Asia-Pacific, with sister city Osaka second, and Hong Kong third. Singapore and Seoul round out the top five.
Cathy Loose, Asia-Pacific global mobility leader at Mercer's information product solutions business, said: 'Cities in Asia, such as Tokyo and Osaka, continue to be the most expensive cities given the relatively strong yen against other major currencies such as the US dollar.
'Other high-ranking cities such as Hong Kong, Singapore and Beijing remain relatively the same in terms of overall cost-of-living ranking.'
Part of the reason Asian cities feature more prominently in the worldwide top 10 list is the rise in residential property prices in the region, said Mercer senior researcher Nathalie Constantin-Metral.
'At the end of 2009 and the beginning of 2010, residential property prices in many Asian countries rose as the economic environment began to stabilise and demand for good expat housing increased,' said Ms Constantin-Metral.
Among the 214 cities surveyed by Mercer, Tokyo was ranked second worldwide, giving up its place as the world's most costly city for expats to Angola's capital Luanda.
Ndjamena, in the central African nation of Chad, was placed third, followed by Moscow, then Geneva.
Mercer said the high living costs in some African cities reflects the continent's increasing economic importance across all business sectors.
'We've seen an increase in demand for information on African cities from across the business spectrum - mining, financial services, airlines, manufacturing, utilities and energy companies,' said Ms Constantin-Metral. 'Many people assume that cities in the developing world are cheap, but this isn't necessarily true for expatriates working there.'
In particular, the cost of good, secure accommodation can be 'extraordinarily high', she said.
Mercer's Cost of Living survey covers 214 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
New York is used as the base city for the index, and all cities are compared against the Big Apple. Currency movements are measured against the US dollar.
The cost of housing - often the biggest expense for expats - plays an important part in determining where cities are ranked.
Source: Business Times, 30 Jun 2010
SINGAPORE is the 11th most expensive city in the world for expatriates, one place lower than its 10th position last year, says HR consultancy firm Mercer.
But the city moved up a notch to fourth place among cities in Asia-Pacific - which for the first time has three cities in the top 10 list of the dearest places for expats.
Tokyo remains the most expensive city in Asia-Pacific, with sister city Osaka second, and Hong Kong third. Singapore and Seoul round out the top five.
Cathy Loose, Asia-Pacific global mobility leader at Mercer's information product solutions business, said: 'Cities in Asia, such as Tokyo and Osaka, continue to be the most expensive cities given the relatively strong yen against other major currencies such as the US dollar.
'Other high-ranking cities such as Hong Kong, Singapore and Beijing remain relatively the same in terms of overall cost-of-living ranking.'
Part of the reason Asian cities feature more prominently in the worldwide top 10 list is the rise in residential property prices in the region, said Mercer senior researcher Nathalie Constantin-Metral.
'At the end of 2009 and the beginning of 2010, residential property prices in many Asian countries rose as the economic environment began to stabilise and demand for good expat housing increased,' said Ms Constantin-Metral.
Among the 214 cities surveyed by Mercer, Tokyo was ranked second worldwide, giving up its place as the world's most costly city for expats to Angola's capital Luanda.
Ndjamena, in the central African nation of Chad, was placed third, followed by Moscow, then Geneva.
Mercer said the high living costs in some African cities reflects the continent's increasing economic importance across all business sectors.
'We've seen an increase in demand for information on African cities from across the business spectrum - mining, financial services, airlines, manufacturing, utilities and energy companies,' said Ms Constantin-Metral. 'Many people assume that cities in the developing world are cheap, but this isn't necessarily true for expatriates working there.'
In particular, the cost of good, secure accommodation can be 'extraordinarily high', she said.
Mercer's Cost of Living survey covers 214 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
New York is used as the base city for the index, and all cities are compared against the Big Apple. Currency movements are measured against the US dollar.
The cost of housing - often the biggest expense for expats - plays an important part in determining where cities are ranked.
Source: Business Times, 30 Jun 2010
S'pore third most liveable city: study
SINGAPORE is the third most liveable city in the world, going by preliminary findings from a broad-based study commissioned by a think-tank here.
The Centre for Liveable Cities (CLC) released initial results from its Global Liveable Cities Index (GLCI) at the World Cities Summit (WCS) yesterday. Of the 64 cities assessed, Geneva emerged tops and Zurich second. Copenhagen and Helsinki tied at fourth.
Asia-Pacific cities which made it to the top 20 include Hong Kong (eighth), Melbourne (10th), Osaka (16th) and Tokyo (18th).
CLC got the study going in 2008 to assess cities' liveability in five areas: economic vibrancy and competitiveness; environmental friendliness and sustainability; domestic security and stability; quality of life and diversity; and governance and leadership.
GLCI is still a piece of work in progress, but CLC and some of the study's co-authors will present it at a WCS session today to gather feedback on its criteria and methodology.
'In terms of looking at liveability from a more holistic and balanced framework, I think there are probably very few, if any, such set of indicators that are around,' CLC director and National Environment Agency CEO Andrew Tan told the press yesterday.
Across the five areas which the GLCI looked at, Singapore fared best in domestic security, coming in first. It scored fairly well in terms of governance, quality of life and economic vibrancy. But its showing in eco-friendliness was weakest, at 14th place.
According to Tan Khee Giap, a co-author of the GLCI and associate professor at the Lee Kuan Yew School of Public Policy, Singapore's green efforts could be underrated. He cited an example: the country did well in water management, but this was not reflected because comparable data was lacking in other cities.
Source: Business Times, 30 Jun 2010
The Centre for Liveable Cities (CLC) released initial results from its Global Liveable Cities Index (GLCI) at the World Cities Summit (WCS) yesterday. Of the 64 cities assessed, Geneva emerged tops and Zurich second. Copenhagen and Helsinki tied at fourth.
Asia-Pacific cities which made it to the top 20 include Hong Kong (eighth), Melbourne (10th), Osaka (16th) and Tokyo (18th).
CLC got the study going in 2008 to assess cities' liveability in five areas: economic vibrancy and competitiveness; environmental friendliness and sustainability; domestic security and stability; quality of life and diversity; and governance and leadership.
GLCI is still a piece of work in progress, but CLC and some of the study's co-authors will present it at a WCS session today to gather feedback on its criteria and methodology.
'In terms of looking at liveability from a more holistic and balanced framework, I think there are probably very few, if any, such set of indicators that are around,' CLC director and National Environment Agency CEO Andrew Tan told the press yesterday.
Across the five areas which the GLCI looked at, Singapore fared best in domestic security, coming in first. It scored fairly well in terms of governance, quality of life and economic vibrancy. But its showing in eco-friendliness was weakest, at 14th place.
According to Tan Khee Giap, a co-author of the GLCI and associate professor at the Lee Kuan Yew School of Public Policy, Singapore's green efforts could be underrated. He cited an example: the country did well in water management, but this was not reflected because comparable data was lacking in other cities.
Source: Business Times, 30 Jun 2010
Mah Bow Tan moots urban planning network
A NEW platform for policymakers and urban planners to exchange ideas on sustainable development is in the works.
National Development Minister Mah Bow Tan mooted the idea of a Learning Network for Cities at the World Cities Summit (WCS) yesterday.
As the WCS happens once every two years, the network will allow government officials and industry professionals to share best practices on green technology, infrastructure financing and other sustainable development issues in between, he said.
The learning network will be discussed at the WCS Mayors' Forum today and more details will be shared later.
Mr Mah gave this update in his speech at the WCS opening plenary session. The event gathered high-ranking individuals from the private and public sectors to share what they thought were challenges and solutions in sustainable urbanisation.
Good urban planning was not something policymakers can ignore. According to Mr Mah, about 200,000 more people move into cities and towns every day. By 2050, 70 per cent of the global population will be living in cities, exceeding the 50 per cent today.
Strong governance, citizen engagement, a balance between development and the environment, and international collaborations are some of the key ingredients for sustainable development, he said.
Asia-Pacific will have major challenges to overcome in the urbanisation process, warned United Nations under-secretary-general and executive secretary of the Economic and Social Commission for Asia and the Pacific, Noeleen Heyzer.
The large movement of people to cities, environmentally unfriendly development, poverty and climate change are threatening the urban landscape, she said. Various cities are aware of the problems and are working to resolve them. One of these is the fast growing region of Chongqing in China. Chongqing mayor Huang Qifan said that the city is planning to plant 14 square kilometres of trees, and build 40 million sq m of public rental housing to cope with rapid urbanisation.
In the Netherlands, the government launched a Delta Programme and set up a Delta fund to protect the country against flooding. Some 59 per cent of the country is flood-prone, said the programme's government commissioner Wim Kuijken.
Commenting on the WCS after the opening plenary session, Mr Mah said that there is much for Singapore to learn. 'There are many challenges we may face in the future', he said.
Climate change is one of these, he continued. When it comes to managing water levels for instance, Singapore can learn from the Netherlands.
Source: Business Times, 30 Jun 2010
National Development Minister Mah Bow Tan mooted the idea of a Learning Network for Cities at the World Cities Summit (WCS) yesterday.
As the WCS happens once every two years, the network will allow government officials and industry professionals to share best practices on green technology, infrastructure financing and other sustainable development issues in between, he said.
The learning network will be discussed at the WCS Mayors' Forum today and more details will be shared later.
Mr Mah gave this update in his speech at the WCS opening plenary session. The event gathered high-ranking individuals from the private and public sectors to share what they thought were challenges and solutions in sustainable urbanisation.
Good urban planning was not something policymakers can ignore. According to Mr Mah, about 200,000 more people move into cities and towns every day. By 2050, 70 per cent of the global population will be living in cities, exceeding the 50 per cent today.
Strong governance, citizen engagement, a balance between development and the environment, and international collaborations are some of the key ingredients for sustainable development, he said.
Asia-Pacific will have major challenges to overcome in the urbanisation process, warned United Nations under-secretary-general and executive secretary of the Economic and Social Commission for Asia and the Pacific, Noeleen Heyzer.
The large movement of people to cities, environmentally unfriendly development, poverty and climate change are threatening the urban landscape, she said. Various cities are aware of the problems and are working to resolve them. One of these is the fast growing region of Chongqing in China. Chongqing mayor Huang Qifan said that the city is planning to plant 14 square kilometres of trees, and build 40 million sq m of public rental housing to cope with rapid urbanisation.
In the Netherlands, the government launched a Delta Programme and set up a Delta fund to protect the country against flooding. Some 59 per cent of the country is flood-prone, said the programme's government commissioner Wim Kuijken.
Commenting on the WCS after the opening plenary session, Mr Mah said that there is much for Singapore to learn. 'There are many challenges we may face in the future', he said.
Climate change is one of these, he continued. When it comes to managing water levels for instance, Singapore can learn from the Netherlands.
Source: Business Times, 30 Jun 2010
MTI offers 10 industrial sites for sale
The plots, with total area of 19.92 ha, will be sold on 30, 45 or 60-year leases
THE Ministry of Trade and Industry (MTI) is offering 10 industrial plots for sale under the second-half 2010 industrial government land sales programme.
The plots, with a total land area of 19.92 ha, comprise three sites on the confirmed list and seven on the reserve list.
Five of the 10 sites are new - a 4.65 ha plot at Yishun Street 23/Yishun Avenue 9 on the confirmed list and plots at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62 on the reserve list. The rest are being rolled over from the H1 2010 reserve list.
The government will sell all the plots on leases of 30, 45 or 60 years.
Colliers International director (industrial) Tan Boon Leong noted that all three plots on the confirmed list are zoned Business 2 use. 'This will cater to strong demand for such sites as seen in the high number of bids for B2 land parcels last year.'
Sites zoned Business 2 can be put to a wider range of industrial use whereas Business 1 land is for clean and light use only.
Mr Tan highlighted the new reserve list plot at Tuas View Square as being relatively small for an industrial plot at just 0.44 ha and the Ang Mo Kio Street 62 site as the first plot the government has offered in Ang Mo Kio through its industrial land sales programme.
He also reckons that industrial land bids are likely to moderate in the second half of this year given the spread of sites that the government is offering.
Sites on the confirmed list are launched for tender according to a schedule. Reserve list sites are released only upon application by bidders.
In the first half of this year, the government also offered 10 industrial sites - two on the confirmed list and eight on the reserve list. Three of the reserve list sites were sold; they are located at Woodlands Avenue 12 and Yishun Avenue 6 (parcels 1 and 8).
The remaining five reserve sites have been rolled over to the H2 slate - two in the confirmed list and three in the reserve list.
Source: Business Times, 30 Jun 2010
THE Ministry of Trade and Industry (MTI) is offering 10 industrial plots for sale under the second-half 2010 industrial government land sales programme.
The plots, with a total land area of 19.92 ha, comprise three sites on the confirmed list and seven on the reserve list.
Five of the 10 sites are new - a 4.65 ha plot at Yishun Street 23/Yishun Avenue 9 on the confirmed list and plots at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62 on the reserve list. The rest are being rolled over from the H1 2010 reserve list.
The government will sell all the plots on leases of 30, 45 or 60 years.
Colliers International director (industrial) Tan Boon Leong noted that all three plots on the confirmed list are zoned Business 2 use. 'This will cater to strong demand for such sites as seen in the high number of bids for B2 land parcels last year.'
Sites zoned Business 2 can be put to a wider range of industrial use whereas Business 1 land is for clean and light use only.
Mr Tan highlighted the new reserve list plot at Tuas View Square as being relatively small for an industrial plot at just 0.44 ha and the Ang Mo Kio Street 62 site as the first plot the government has offered in Ang Mo Kio through its industrial land sales programme.
He also reckons that industrial land bids are likely to moderate in the second half of this year given the spread of sites that the government is offering.
Sites on the confirmed list are launched for tender according to a schedule. Reserve list sites are released only upon application by bidders.
In the first half of this year, the government also offered 10 industrial sites - two on the confirmed list and eight on the reserve list. Three of the reserve list sites were sold; they are located at Woodlands Avenue 12 and Yishun Avenue 6 (parcels 1 and 8).
The remaining five reserve sites have been rolled over to the H2 slate - two in the confirmed list and three in the reserve list.
Source: Business Times, 30 Jun 2010
Price index for non-landed private homes up 2.6%
NUS's May reading comes ahead of today's URA Q2 flash estimate
(SINGAPORE) Latest flash estimates from the National University of Singapore show that its overall price index for non-landed private homes rose 2.6 per cent in May over the preceding month. Since the end of last year, the index has appreciated 8.6 per cent.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
The sub-index for the central region, which covers a basket of properties in postal districts 1-4 and 9-11, grew 2.5 per cent in May over the preceding month, and 7.9 per cent year to date.
The sub-index for non-Central region rose at a slightly faster clip, of 2.6 per cent month-on-month in May and 9.1 per cent year to date.
Developers' sales have slowed since May as Europe's economic crisis affected financial markets, causing home buyers to withdraw to the sidelines, even ahead of the June school holidays and World Cup season. The market is expected to enter a consolidation phase, marked by slower sales as developers try their best to maintain prices and potential buyers hold back their purchases, hoping for price cuts.
Tomorrow, the Urban Redevelopment Authority will release its second quarter flash estimate for the official private home price index. In Q1, the index climbed 5.6 per cent over the preceding quarter. CB Richard Ellis yesterday predicted a 2-3 per cent quarter-on-quarter rise in this index for Q2. URA's index covers both completed and uncompleted properties, including the new launches market.
'The price points of new mass-market projects launched in the second quarter were at similar levels to those launched in the previous quarter, but those in the mid-tier segment (city-fringe locations and landed homes) have inched up slightly,' the property consultancy said.
Joseph Tan, executive director (residential) at the firm, forecasts that home prices are likely to remain firm despite his prediction that developers' new private homes sales will slow to about 2,000 units in Q3 from an estimated 4,000 units in Q2 and 4,380 units in Q1. 'Home prices are likely to stay stable given the positive outlook on the economy and strong boom in manufacturing and exports,' he added.
CBRE estimates that developers sold about 600-700 private homes in June, compared with 1,078 homes in May and 2,207 units in April.
The developers are estimated to have sold 8,300 units in the first half of this year. They sold 14,688 new homes for the whole of last year.
Commenting on second- quarter sales in the developer sales or primary market, the property consulting group said: 'The projects that sold well were mostly in the low to mid-tier price range. Sales of new upmarket homes moved at a slower pace in the second quarter as foreign investors held back their purchases due to the weakening of some foreign currencies against the Singapore dollar.'
Based on caveats lodged, HDB upgraders' share of new private home purchases slipped from 37.9 per cent in Q1 to 33.7 per cent in Q2. 'The reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter compared to the first quarter,' it added.
In the resale market, CBRE estimates that some 3,400-3,600 private homes changed hands in Q2, about 15-20 per cent lower than the 4,261 units in Q1. 'Subsales numbered around 500 in Q2, down from 806 in the preceding quarter, as the market became less bullish and sellers were mindful of the stamp duty payable if they sold their property within a year of purchase,' it said. Subsales and resales refer to secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales involve projects with CSC.
NUS's overall SRPI is now 36.1 per cent above the post-financial crisis low in March last year. Over the same period, the growth for the central region has been 41.7 per cent and that for the non-central region, 33.2 per cent.
Despite the stronger increase in the central region, the flash estimate index for May for the location was still 3.7 per cent shy of the pre-financial crisis peak in November 2007. In contrast, for the non-central region, the latest index has already exceeded its respective January 2008 pre-crisis peak by 11.1 per cent. As a result, the overall SRPI flash estimate index for May is 5.5 per cent above its November 2007 high.
Source: Business Times, 30 Jun 2010
(SINGAPORE) Latest flash estimates from the National University of Singapore show that its overall price index for non-landed private homes rose 2.6 per cent in May over the preceding month. Since the end of last year, the index has appreciated 8.6 per cent.
The Singapore Residential Price Index (SRPI), compiled by the NUS Institute of Real Estate Studies, covers only completed properties.
The sub-index for the central region, which covers a basket of properties in postal districts 1-4 and 9-11, grew 2.5 per cent in May over the preceding month, and 7.9 per cent year to date.
The sub-index for non-Central region rose at a slightly faster clip, of 2.6 per cent month-on-month in May and 9.1 per cent year to date.
Developers' sales have slowed since May as Europe's economic crisis affected financial markets, causing home buyers to withdraw to the sidelines, even ahead of the June school holidays and World Cup season. The market is expected to enter a consolidation phase, marked by slower sales as developers try their best to maintain prices and potential buyers hold back their purchases, hoping for price cuts.
Tomorrow, the Urban Redevelopment Authority will release its second quarter flash estimate for the official private home price index. In Q1, the index climbed 5.6 per cent over the preceding quarter. CB Richard Ellis yesterday predicted a 2-3 per cent quarter-on-quarter rise in this index for Q2. URA's index covers both completed and uncompleted properties, including the new launches market.
'The price points of new mass-market projects launched in the second quarter were at similar levels to those launched in the previous quarter, but those in the mid-tier segment (city-fringe locations and landed homes) have inched up slightly,' the property consultancy said.
Joseph Tan, executive director (residential) at the firm, forecasts that home prices are likely to remain firm despite his prediction that developers' new private homes sales will slow to about 2,000 units in Q3 from an estimated 4,000 units in Q2 and 4,380 units in Q1. 'Home prices are likely to stay stable given the positive outlook on the economy and strong boom in manufacturing and exports,' he added.
CBRE estimates that developers sold about 600-700 private homes in June, compared with 1,078 homes in May and 2,207 units in April.
The developers are estimated to have sold 8,300 units in the first half of this year. They sold 14,688 new homes for the whole of last year.
Commenting on second- quarter sales in the developer sales or primary market, the property consulting group said: 'The projects that sold well were mostly in the low to mid-tier price range. Sales of new upmarket homes moved at a slower pace in the second quarter as foreign investors held back their purchases due to the weakening of some foreign currencies against the Singapore dollar.'
Based on caveats lodged, HDB upgraders' share of new private home purchases slipped from 37.9 per cent in Q1 to 33.7 per cent in Q2. 'The reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter compared to the first quarter,' it added.
In the resale market, CBRE estimates that some 3,400-3,600 private homes changed hands in Q2, about 15-20 per cent lower than the 4,261 units in Q1. 'Subsales numbered around 500 in Q2, down from 806 in the preceding quarter, as the market became less bullish and sellers were mindful of the stamp duty payable if they sold their property within a year of purchase,' it said. Subsales and resales refer to secondary market transactions; subsales involve projects that have yet to receive Certificate of Statutory Completion (CSC), while resales involve projects with CSC.
NUS's overall SRPI is now 36.1 per cent above the post-financial crisis low in March last year. Over the same period, the growth for the central region has been 41.7 per cent and that for the non-central region, 33.2 per cent.
Despite the stronger increase in the central region, the flash estimate index for May for the location was still 3.7 per cent shy of the pre-financial crisis peak in November 2007. In contrast, for the non-central region, the latest index has already exceeded its respective January 2008 pre-crisis peak by 11.1 per cent. As a result, the overall SRPI flash estimate index for May is 5.5 per cent above its November 2007 high.
Source: Business Times, 30 Jun 2010
How to make the most of a small apartment
Q: I HAVE four kids aged 13, 11, seven and five, and we live in an apartment with only two bedrooms and no storeroom.
We have many things, including books, CDs, photos, shoes, stationery and toys, which we had gathered over the years and my husband and I are still buying new items for our children on a regular basis.
We kept all the old toys as it is such a waste to throw them away – they are good-quality toys and still in good condition. It is the same case with books. My daughter loves buying books and we do not want to kill her interest in reading by asking her to stop spending on books.
hen there’s also the textbooks, assessment books, lesson notes, examination papers, all of which we are keeping to hand down to our younger kids.
We are running out of cupboard space for all these items, so much so that I have to keep some of the toys in the children’s wardrobe, along with their clothes; under their study table; and even on the steps on their double-decker bed.
Shoes are another headache.
My children have at least three pairs each, not counting the ones that the older ones cannot wear anymore (which we are keeping for the younger ones). Then there are the shoes belonging to my husband and me.
I hope the professionals can suggest ways we can organise all our things and, if possible, tuck them away neatly.
A: Your two-room apartment is indeed small for a family of six but, with some planning, you would be able to maximise the space and find your things easily as well.
Cluttered living spaces are difficult to maintain, so let’s aim to keep the apartment as spacious as possible but, at the same time, have all the most frequently needed items within easy reach.
You should first consider what you really want to keep. If you are unlikely to ever use something again, it should be disposed of, to free up space.
Next, designate storage zones and prioritise them according to accessibility within your apartment.
For each storage zone, you need suitable storage equipment, for example, hangers, plastic bins and shelves.
You will also have to consider whether to store items on a higher level to maximise the space up there. Naturally, higher storage areas are not as accessible as those that are within reach, so they are best used for items that are seldom used.
When it comes to storage equipment, it is most practical to use something that is strong and durable. But you should also consider getting something that would improve the aesthetics of your home. Therefore, you may want to invest in good-looking furniture for the more visible areas.
The next step is to decide what you want to keep but do not use regularly. These items should go into the storage areas that are less accessible – they could be outside your home.
Things that you need to use more regularly should be stored in the apartment within the designated storage zones.
Organising your things can take quite a bit of time, but it will save you time searching for them later had they not been stored in an organised manner. Do label your boxes clearly so that it will be easier for you to find your things later.
For items that have sentimental value which you cannot bear to junk and yet do not want to keep in the apartment (as they take up too much premium space), you may want to consider self-storage service.
Self-storage can help by allowing you to keep these items in a purpose-built location.
You should select a storage facility in a location that is most convenient for you – either near your workplace or near your home – so that should you need to retrieve your things, you don’t have to travel too far to get them.
Source: my paper, 30 Jun 2010
We have many things, including books, CDs, photos, shoes, stationery and toys, which we had gathered over the years and my husband and I are still buying new items for our children on a regular basis.
We kept all the old toys as it is such a waste to throw them away – they are good-quality toys and still in good condition. It is the same case with books. My daughter loves buying books and we do not want to kill her interest in reading by asking her to stop spending on books.
hen there’s also the textbooks, assessment books, lesson notes, examination papers, all of which we are keeping to hand down to our younger kids.
We are running out of cupboard space for all these items, so much so that I have to keep some of the toys in the children’s wardrobe, along with their clothes; under their study table; and even on the steps on their double-decker bed.
Shoes are another headache.
My children have at least three pairs each, not counting the ones that the older ones cannot wear anymore (which we are keeping for the younger ones). Then there are the shoes belonging to my husband and me.
I hope the professionals can suggest ways we can organise all our things and, if possible, tuck them away neatly.
A: Your two-room apartment is indeed small for a family of six but, with some planning, you would be able to maximise the space and find your things easily as well.
Cluttered living spaces are difficult to maintain, so let’s aim to keep the apartment as spacious as possible but, at the same time, have all the most frequently needed items within easy reach.
You should first consider what you really want to keep. If you are unlikely to ever use something again, it should be disposed of, to free up space.
Next, designate storage zones and prioritise them according to accessibility within your apartment.
For each storage zone, you need suitable storage equipment, for example, hangers, plastic bins and shelves.
You will also have to consider whether to store items on a higher level to maximise the space up there. Naturally, higher storage areas are not as accessible as those that are within reach, so they are best used for items that are seldom used.
When it comes to storage equipment, it is most practical to use something that is strong and durable. But you should also consider getting something that would improve the aesthetics of your home. Therefore, you may want to invest in good-looking furniture for the more visible areas.
The next step is to decide what you want to keep but do not use regularly. These items should go into the storage areas that are less accessible – they could be outside your home.
Things that you need to use more regularly should be stored in the apartment within the designated storage zones.
Organising your things can take quite a bit of time, but it will save you time searching for them later had they not been stored in an organised manner. Do label your boxes clearly so that it will be easier for you to find your things later.
For items that have sentimental value which you cannot bear to junk and yet do not want to keep in the apartment (as they take up too much premium space), you may want to consider self-storage service.
Self-storage can help by allowing you to keep these items in a purpose-built location.
You should select a storage facility in a location that is most convenient for you – either near your workplace or near your home – so that should you need to retrieve your things, you don’t have to travel too far to get them.
Source: my paper, 30 Jun 2010
MTI launches industrial land sales for H2
Total site area of 19.92 ha up for grabs
The Ministry of Trade and Industry (MTI) has launched its Industrial Government Land Sales programme for the second half of 2010.
There will be three sites in the Confirmed List and seven sites in the Reserve List, with a total site area of 19.92 hectares.
The three sites on the Confirmed List are at Kaki Bukit Avenue 4, the plot at the junction of Yishun Street 23 and Yishun Avenue 9, and the land parcel at the junction of Old Toh Tuck Road and Toh Tuck Avenue.
MTI will also introduce four new sites on the Reserve List at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62.
In addition, three sites from the first half of the 2010 Reserve List will be carried forward to the second half of the year.
Source: Today, 30 Jun 2010
The Ministry of Trade and Industry (MTI) has launched its Industrial Government Land Sales programme for the second half of 2010.
There will be three sites in the Confirmed List and seven sites in the Reserve List, with a total site area of 19.92 hectares.
The three sites on the Confirmed List are at Kaki Bukit Avenue 4, the plot at the junction of Yishun Street 23 and Yishun Avenue 9, and the land parcel at the junction of Old Toh Tuck Road and Toh Tuck Avenue.
MTI will also introduce four new sites on the Reserve List at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62.
In addition, three sites from the first half of the 2010 Reserve List will be carried forward to the second half of the year.
Source: Today, 30 Jun 2010
CBRE forecasts fewer private homes sales in Q2
The private property market saw some slowing down during the second quarter of the year.
Property consultant CB Richard Ellis (CBRE) forecast that about 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380 units.
Also, in the resale market, CBRE estimated that 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 per cent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered about 500, down from 806 in the previous quarter as the market became less bullish, the report said.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase. In addition, the number of HDB upgraders buying private homes fell.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses, lower than the 37.9 per cent figure of the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market projects being launched in the second quarter. Nevertheless, CBRE said that about 8,300 new homes were sold in the first half of this year. This is more than half or 56.5 per cent of the 14,688 new homes sold for all of last year.
CBRE predicted that overall home prices in the second quarter could reflect a rise of between 2 per cent and 3 per cent on-quarter.
Source: Today, 30 Jun 2010
Property consultant CB Richard Ellis (CBRE) forecast that about 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380 units.
Also, in the resale market, CBRE estimated that 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 per cent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered about 500, down from 806 in the previous quarter as the market became less bullish, the report said.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase. In addition, the number of HDB upgraders buying private homes fell.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses, lower than the 37.9 per cent figure of the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market projects being launched in the second quarter. Nevertheless, CBRE said that about 8,300 new homes were sold in the first half of this year. This is more than half or 56.5 per cent of the 14,688 new homes sold for all of last year.
CBRE predicted that overall home prices in the second quarter could reflect a rise of between 2 per cent and 3 per cent on-quarter.
Source: Today, 30 Jun 2010
Just $15.8m for Sentosa house with grim past
THE three-storey Sentosa Cove bungalow where Chinese national Li Hong Yan's naked body was found floating in a pool has been put up for sale or rental.
An agent from real estate company HSR has placed a small A4-sized sign advertising its availability on one of front windows of the house.
The Straits Times understands that the asking monthly rental for the property of approximately 8,000 sq ft is $28,000, while the asking sale price is $15.8 million - some way below its estimated valuation of $17 million.
Such a price values the property at less than $2,000 per sq ft (psf), thought to be something of a steal considering that a record resale market price for a Sentosa Cove property in Paradise Island was set last month at $36 million - or $2,403 psf.
The bungalow, said to be slightly more than a year old, is believed to be priced for quick sale - below its valuation - because its owner is currently based in Tokyo.
An open house for the prime-sited house was held last weekend and attended by about 20 people, with a number requesting further viewing.
It is believed that an offer of $15 million has already been made on the property, but has been rejected by its owner, Mr Adrian Chua Boon Chye, 39, chief executive and founder of real estate investment management company Roundhill Capital.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that a property should stand on its own merit, and the negative association may not deter buyers.
'Some people might walk away regardless, but some may buy the house hoping that the incident might be forgotten in a couple of years and sell it at a profit to buyer number three,' he said.
Mystery continues to surround the death of 24-year-old Ms Li, whose body, which had no apparent physical injury, was found in March.
She is believed to have spent the night at the house with Mr Chua after they met at a party.
Source: Straits Times, 30 Jun 2010
An agent from real estate company HSR has placed a small A4-sized sign advertising its availability on one of front windows of the house.
The Straits Times understands that the asking monthly rental for the property of approximately 8,000 sq ft is $28,000, while the asking sale price is $15.8 million - some way below its estimated valuation of $17 million.
Such a price values the property at less than $2,000 per sq ft (psf), thought to be something of a steal considering that a record resale market price for a Sentosa Cove property in Paradise Island was set last month at $36 million - or $2,403 psf.
The bungalow, said to be slightly more than a year old, is believed to be priced for quick sale - below its valuation - because its owner is currently based in Tokyo.
An open house for the prime-sited house was held last weekend and attended by about 20 people, with a number requesting further viewing.
It is believed that an offer of $15 million has already been made on the property, but has been rejected by its owner, Mr Adrian Chua Boon Chye, 39, chief executive and founder of real estate investment management company Roundhill Capital.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said that a property should stand on its own merit, and the negative association may not deter buyers.
'Some people might walk away regardless, but some may buy the house hoping that the incident might be forgotten in a couple of years and sell it at a profit to buyer number three,' he said.
Mystery continues to surround the death of 24-year-old Ms Li, whose body, which had no apparent physical injury, was found in March.
She is believed to have spent the night at the house with Mr Chua after they met at a party.
Source: Straits Times, 30 Jun 2010
Tuesday, June 29, 2010
It's boom time for Biopolis
Phase 5 will be completed by 2013 and will bring the total R&D space there to more than 3.3 million sq ft
SINGAPORE'S biomedical sciences sector is booming. And to cater to the growing number of companies that need more space, the nation's premier biomedical research hub, Biopolis, will be expanded again.
Industrial developer and landlord JTC said in May that it will spend another $140 million to provide 495,000 square feet of new space for companies engaged in cutting-edge work in creating new drugs and medical equipment.
This new phase - which will be the fifth for Biopolis and will be completed by 2013 - will bring the total research and development (R&D) space at Biopolis to more than 3.3 million square feet.
Phase five follows hot on the heels of the fourth phase, which was announced just in January this year.
Biopolis has been purpose-built for public and private biomedical research institutes and organisations and the expansion comes at a time when multi-national biomedical companies are expanding in Singapore.
'The biomedical sector has been putting up a strong showing so far this year,' says CIMB economist Song Seng Wun. 'We have seen a lot of reports on capacity expansion and reports on new investments and it looks like the sector is now attracting quite a lot of interest.'
In May, Japan-based Fujitsu officially opened its first biomedical research facility in South-east Asia here in Singapore. The company plans to work with the Agency for Science, Technology and Research (A*Star) to provide cutting-edge methodology to drive research for the diagnosis of cancer and other diseases.
'Fujitsu's collaboration with A*Star represents our commitment to being part of an ecosystem that will enable Singapore to harness innovations in technology, with the aim of developing a world-class R&D hub,' said Francis Goh, president of Fujitsu Asia, at the plant's opening.
US-based Abbott also officially opened its Asia-Pacific Nutrition Research & Development Centre at the Biopolis in Singapore recently. The centre is Abbott's largest nutrition R&D facility outside of the US and will create science-based nutritional products for infants, children and adults.
The biomedical sector has been a boost to the overall economy over the first five months of this year. For example, Singapore's economy grew by close to 50 per cent year-on-year in April 2010 and 60 per cent year-on-year in May. Mr Song points out that the growth was largely led by the biomedical sector, which accounted for more than half of the growth in both months.
And for the whole of 2009, Singapore's biomedical sciences manufacturing output rose 2.5 per cent year-on-year to $20.7 billion, while total employment climbed 7.2 per cent to 13,174. Singapore aims for the sector to hit a manufacturing output of $25 billion by 2015.
Looking ahead, the sector is expected to continue expanding, and JTC will provide the real estate to support this growth, said Heah Soon Poh, director of JTC's biomedical and chemicals cluster.
Spearheading sustainable design
Biopolis's fifth phase will feature an energy efficient and sustainable design which will allow for more pre-clinical trials to be carried out.
In fact, the entire development aims to spearhead innovation in environment performance and sustainability and serve as a test-bed for promising environmental technologies.
Examples of Biopolis' sustainable features include: a building-integrated photovoltaic or solar-powered system; 'intelligent' building automation systems to optimise energy usage; a district cooling system to provide centralised chilled water supply to optimise the use of space and minimise energy costs for air-conditioning; and solar-powered LED lights with ultra capacitor as energy storage device, which are now being used as a landscape feature.
But with the upcoming expansion of Biopolis, sustainability will be taken a step further as JTC focuses on energy-efficient lab designs. Design strategies JTC will be looking into include more accurate sizing of laboratory equipment to reduce energy wastage; tapping on higher efficiencies for mechanical and electrical equipment and solar control and glazing for laboratory spaces to reduce heat gain.
It is also looking at the optimal selection of lighting to reduce maintenance and running costs as well as designing for naturally ventilated spaces wherever possible to reduce the cooling needed for the building.
'JTC recognises that energy efficiency is the leading driver for sustainable lab design as it represents the greatest possible operational savings,' the agency says. 'Sustainable energy efficient labs underscores JTC's ongoing effort to provide innovative and sustainable real estate solutions.'
Working to build a biomedical hub
Besides Biopolis, JTC is preparing land for manufacturing activities in the biomedical sciences sector.
The agency said earlier this year that it will launch a medical technology (med-tech) cluster in Jurong.
The med-tech sub-sector is expected to drive growth within the larger biomedical sciences sector. The cluster involves the manufacture of equipment used in the industry, such as syringes and medical test-kits.
Singapore's manufacturing output of med-tech products is expected to increase from $2.9 billion in 2008 to $5 billion by 2015, said JTC's Mr Heah.
Med-tech employs about two-thirds of all workers in the biomedical science sector, as it is more labour intensive than pharmaceutical production.
The new med-tech cluster, at Jalan Tukang in Jurong, aims to bring major industry players together in a new facility that will cost $60 million to $80 million to build initially.
Firms can collaborate and cut costs through cooperation as they will be located 'in the same space, creating synergies and reducing costs', said Mr Heah.
JTC and other government agencies are also pushing Tuas Biomedical Park, which has already attracted a host of global biomedical players such as Merck, Novartis, Pfizer, Wyeth, Genentech and GlaxoSmithKline.
The 183ha Tuas Biomedical Park I and 188ha Tuas Biomedical Park II are located at Tuas View at the western tip of Singapore and are five minutes from the Tuas Checkpoint to Malaysia and 20 minutes away from Jurong Port.
The park has all essential infrastructure, such as roads, power lines, telecommunication lines, sewer pipes and water and gas supplies. Third parties provide utilities such as steam, natural gas, chilled water and waste treatment services.
With the estate's 'plug-and-play' design, pharmaceutical, biologics, medical device and other biomedical companies can set up manufacturing operations with minimal lead time. They can either move into fully serviced facilities or custom-build their own.
By staying within a cluster, these firms can enjoy economies of scale from sharing major infrastructure. It is also easier for JTC to look after their niche requirements, the agency says.
All these developments show the government's ambitions for the biomedical sciences sector.
Several government agencies - including the Economic Development Board, A*Star and JTC - all share the job of turning Singapore's aim of being a biomedical hub into reality. JTC, which is charged with supporting the unique real estate requirements of the biomedical sciences industry, will continue to come up with innovative solutions, it said.
Source: Business Times, 29 Jun 2010
SINGAPORE'S biomedical sciences sector is booming. And to cater to the growing number of companies that need more space, the nation's premier biomedical research hub, Biopolis, will be expanded again.
Industrial developer and landlord JTC said in May that it will spend another $140 million to provide 495,000 square feet of new space for companies engaged in cutting-edge work in creating new drugs and medical equipment.
This new phase - which will be the fifth for Biopolis and will be completed by 2013 - will bring the total research and development (R&D) space at Biopolis to more than 3.3 million square feet.
Phase five follows hot on the heels of the fourth phase, which was announced just in January this year.
Biopolis has been purpose-built for public and private biomedical research institutes and organisations and the expansion comes at a time when multi-national biomedical companies are expanding in Singapore.
'The biomedical sector has been putting up a strong showing so far this year,' says CIMB economist Song Seng Wun. 'We have seen a lot of reports on capacity expansion and reports on new investments and it looks like the sector is now attracting quite a lot of interest.'
In May, Japan-based Fujitsu officially opened its first biomedical research facility in South-east Asia here in Singapore. The company plans to work with the Agency for Science, Technology and Research (A*Star) to provide cutting-edge methodology to drive research for the diagnosis of cancer and other diseases.
'Fujitsu's collaboration with A*Star represents our commitment to being part of an ecosystem that will enable Singapore to harness innovations in technology, with the aim of developing a world-class R&D hub,' said Francis Goh, president of Fujitsu Asia, at the plant's opening.
US-based Abbott also officially opened its Asia-Pacific Nutrition Research & Development Centre at the Biopolis in Singapore recently. The centre is Abbott's largest nutrition R&D facility outside of the US and will create science-based nutritional products for infants, children and adults.
The biomedical sector has been a boost to the overall economy over the first five months of this year. For example, Singapore's economy grew by close to 50 per cent year-on-year in April 2010 and 60 per cent year-on-year in May. Mr Song points out that the growth was largely led by the biomedical sector, which accounted for more than half of the growth in both months.
And for the whole of 2009, Singapore's biomedical sciences manufacturing output rose 2.5 per cent year-on-year to $20.7 billion, while total employment climbed 7.2 per cent to 13,174. Singapore aims for the sector to hit a manufacturing output of $25 billion by 2015.
Looking ahead, the sector is expected to continue expanding, and JTC will provide the real estate to support this growth, said Heah Soon Poh, director of JTC's biomedical and chemicals cluster.
Spearheading sustainable design
Biopolis's fifth phase will feature an energy efficient and sustainable design which will allow for more pre-clinical trials to be carried out.
In fact, the entire development aims to spearhead innovation in environment performance and sustainability and serve as a test-bed for promising environmental technologies.
Examples of Biopolis' sustainable features include: a building-integrated photovoltaic or solar-powered system; 'intelligent' building automation systems to optimise energy usage; a district cooling system to provide centralised chilled water supply to optimise the use of space and minimise energy costs for air-conditioning; and solar-powered LED lights with ultra capacitor as energy storage device, which are now being used as a landscape feature.
But with the upcoming expansion of Biopolis, sustainability will be taken a step further as JTC focuses on energy-efficient lab designs. Design strategies JTC will be looking into include more accurate sizing of laboratory equipment to reduce energy wastage; tapping on higher efficiencies for mechanical and electrical equipment and solar control and glazing for laboratory spaces to reduce heat gain.
It is also looking at the optimal selection of lighting to reduce maintenance and running costs as well as designing for naturally ventilated spaces wherever possible to reduce the cooling needed for the building.
'JTC recognises that energy efficiency is the leading driver for sustainable lab design as it represents the greatest possible operational savings,' the agency says. 'Sustainable energy efficient labs underscores JTC's ongoing effort to provide innovative and sustainable real estate solutions.'
Working to build a biomedical hub
Besides Biopolis, JTC is preparing land for manufacturing activities in the biomedical sciences sector.
The agency said earlier this year that it will launch a medical technology (med-tech) cluster in Jurong.
The med-tech sub-sector is expected to drive growth within the larger biomedical sciences sector. The cluster involves the manufacture of equipment used in the industry, such as syringes and medical test-kits.
Singapore's manufacturing output of med-tech products is expected to increase from $2.9 billion in 2008 to $5 billion by 2015, said JTC's Mr Heah.
Med-tech employs about two-thirds of all workers in the biomedical science sector, as it is more labour intensive than pharmaceutical production.
The new med-tech cluster, at Jalan Tukang in Jurong, aims to bring major industry players together in a new facility that will cost $60 million to $80 million to build initially.
Firms can collaborate and cut costs through cooperation as they will be located 'in the same space, creating synergies and reducing costs', said Mr Heah.
JTC and other government agencies are also pushing Tuas Biomedical Park, which has already attracted a host of global biomedical players such as Merck, Novartis, Pfizer, Wyeth, Genentech and GlaxoSmithKline.
The 183ha Tuas Biomedical Park I and 188ha Tuas Biomedical Park II are located at Tuas View at the western tip of Singapore and are five minutes from the Tuas Checkpoint to Malaysia and 20 minutes away from Jurong Port.
The park has all essential infrastructure, such as roads, power lines, telecommunication lines, sewer pipes and water and gas supplies. Third parties provide utilities such as steam, natural gas, chilled water and waste treatment services.
With the estate's 'plug-and-play' design, pharmaceutical, biologics, medical device and other biomedical companies can set up manufacturing operations with minimal lead time. They can either move into fully serviced facilities or custom-build their own.
By staying within a cluster, these firms can enjoy economies of scale from sharing major infrastructure. It is also easier for JTC to look after their niche requirements, the agency says.
All these developments show the government's ambitions for the biomedical sciences sector.
Several government agencies - including the Economic Development Board, A*Star and JTC - all share the job of turning Singapore's aim of being a biomedical hub into reality. JTC, which is charged with supporting the unique real estate requirements of the biomedical sciences industry, will continue to come up with innovative solutions, it said.
Source: Business Times, 29 Jun 2010
Sales holding up but outlook cautious: UK housebuilder
(LONDON) British housebuilder Taylor Wimpey plc said sales had held up in the first half of the year, but could offer little reassurance for the full year as consumer confidence remains depressed.
Taylor Wimpey, the first volume housebuilder to update investors since the UK general election and subsequent emergency budget, said sales had been dented in the second quarter as consumers delayed making big ticket purchases around the poll.
But the UK's third-largest housebuilder by market value said sales had recovered in recent weeks, echoing comments from luxury apartment developer Berkeley Group on Friday.
This will give some comfort to the sector, which has been struggling to regain a sure footing after the downturn knocked building activity, caused many builders to turn to shareholders for cash and wiped a fifth off property values.
But low mortgage availability - especially for first time buyers - and broader macro-economic uncertainty is denting short-term confidence in the sector.
'With ongoing political and economic uncertainty, we continue to run the business on a cautious basis, with selective land investment and an ongoing focus on costs and cash,' said Taylor Wimpey in a statement.
The company's comments come after a survey by mortgage lender Nationwide showed UK consumer confidence was at its lowest level in almost a year in May, reflecting concerns about the UK economy and unemployment which is set to rise sharply in the wake of government spending cuts.
House prices fell 0.4 per cent in May according to mortgage lender Halifax, while Nationwide reported a 0.5 per cent rise for the month, half the rate of the previous two months. The Land Registry said prices had fallen 0.2 per cent on the month.
Further pain may be on the cards as the government looks to reform the planning system. Taylor Wimpey said any change needs to be implemented with a clear transition period and with regard to cultural change.
The reform of the planning system - aimed at giving greater power to the local areas - is causing a headache for the building sector as some local authorities have already put planning decisions on hold until there is greater certainty from the coalition government.
Taylor Wimpey said it expects to complete 4,650 homes in the first half at an average selling price of £167,000 (S$350,000). This compares with 4,702 homes at an average selling price of £153,000 in the same period last year.
Taylor Wimpey, the most highly geared UK housebuilder with net debt of £650 million, said trading in the US market was volatile in the year-to-date, but it sees 'a steadier, clearer picture' towards the end of the year. -- Reuters
Source: Business Times, 29 Jun 2010
Taylor Wimpey, the first volume housebuilder to update investors since the UK general election and subsequent emergency budget, said sales had been dented in the second quarter as consumers delayed making big ticket purchases around the poll.
But the UK's third-largest housebuilder by market value said sales had recovered in recent weeks, echoing comments from luxury apartment developer Berkeley Group on Friday.
This will give some comfort to the sector, which has been struggling to regain a sure footing after the downturn knocked building activity, caused many builders to turn to shareholders for cash and wiped a fifth off property values.
But low mortgage availability - especially for first time buyers - and broader macro-economic uncertainty is denting short-term confidence in the sector.
'With ongoing political and economic uncertainty, we continue to run the business on a cautious basis, with selective land investment and an ongoing focus on costs and cash,' said Taylor Wimpey in a statement.
The company's comments come after a survey by mortgage lender Nationwide showed UK consumer confidence was at its lowest level in almost a year in May, reflecting concerns about the UK economy and unemployment which is set to rise sharply in the wake of government spending cuts.
House prices fell 0.4 per cent in May according to mortgage lender Halifax, while Nationwide reported a 0.5 per cent rise for the month, half the rate of the previous two months. The Land Registry said prices had fallen 0.2 per cent on the month.
Further pain may be on the cards as the government looks to reform the planning system. Taylor Wimpey said any change needs to be implemented with a clear transition period and with regard to cultural change.
The reform of the planning system - aimed at giving greater power to the local areas - is causing a headache for the building sector as some local authorities have already put planning decisions on hold until there is greater certainty from the coalition government.
Taylor Wimpey said it expects to complete 4,650 homes in the first half at an average selling price of £167,000 (S$350,000). This compares with 4,702 homes at an average selling price of £153,000 in the same period last year.
Taylor Wimpey, the most highly geared UK housebuilder with net debt of £650 million, said trading in the US market was volatile in the year-to-date, but it sees 'a steadier, clearer picture' towards the end of the year. -- Reuters
Source: Business Times, 29 Jun 2010
Banks face mounting losses in commercial property
Risk of further losses from exposure to real estate sector: BIS
(BASEL) The body grouping central banks around the world warned yesterday that banks are still worryingly exposed to risks such as falling commercial property prices which are likely to dent their earnings.
'Despite the improvement in banks' balance sheets, several factors raise doubts about the sustainability of bank profits,' said the Bank for International Settlements (BIS) in its annual report.
The so-called central bank for central bankers noted in particular that 'there is growing evidence that further losses can be expected from exposure to the commercial real estate sector'. Commercial property values in the United States have plunged by a third from their peak and rates of overdue loan payments have risen to more than 8 per cent, said the Basel-based bank.
In European countries like Ireland and Britain, commercial property prices have also plummeted by up to 46 per cent from their peak.
'Losses on European bank balance sheets are expected to mount over the next few years,' it said, noting that some banks have in fact been rolling over loans rather than inducing foreclosures, a move that is delaying recognition of losses.
Beyond losses in commercial properties, some banks are also highly exposed to sovereign debt risks, said BIS.
At the same time, with governments also having significant borrowing needs, BIS said banks may find it tougher to obtain refinancing.
Many international banks including Citigroup, UBS and Royal Bank of Scotland suffered from massive writedowns and losses during the financial crisis as their bets on the sub-prime private home loan market soured.
By April 2010, losses or writedowns reported by banks reached US$1.306 trillion, BIS said.
But new capital injected - mostly by governments through special rescue funds - almost matched these losses, reaching US$1.236 trillion.
The BIS groups more than 54 central banks. -- AFP
Source: Business Times, 29 Jun 2010
(BASEL) The body grouping central banks around the world warned yesterday that banks are still worryingly exposed to risks such as falling commercial property prices which are likely to dent their earnings.
'Despite the improvement in banks' balance sheets, several factors raise doubts about the sustainability of bank profits,' said the Bank for International Settlements (BIS) in its annual report.
The so-called central bank for central bankers noted in particular that 'there is growing evidence that further losses can be expected from exposure to the commercial real estate sector'. Commercial property values in the United States have plunged by a third from their peak and rates of overdue loan payments have risen to more than 8 per cent, said the Basel-based bank.
In European countries like Ireland and Britain, commercial property prices have also plummeted by up to 46 per cent from their peak.
'Losses on European bank balance sheets are expected to mount over the next few years,' it said, noting that some banks have in fact been rolling over loans rather than inducing foreclosures, a move that is delaying recognition of losses.
Beyond losses in commercial properties, some banks are also highly exposed to sovereign debt risks, said BIS.
At the same time, with governments also having significant borrowing needs, BIS said banks may find it tougher to obtain refinancing.
Many international banks including Citigroup, UBS and Royal Bank of Scotland suffered from massive writedowns and losses during the financial crisis as their bets on the sub-prime private home loan market soured.
By April 2010, losses or writedowns reported by banks reached US$1.306 trillion, BIS said.
But new capital injected - mostly by governments through special rescue funds - almost matched these losses, reaching US$1.236 trillion.
The BIS groups more than 54 central banks. -- AFP
Source: Business Times, 29 Jun 2010
HK's mortgage loan approval up 34% in May
(HONG KONG) New mortgage loans approved in Hong Kong in May rose by 34.3 per cent from a year earlier and increased 0.1 per cent in value terms from April, figures from the Hong Kong Monetary Authority (HKMA) showed.
New loans approved in May totalled HK$37.8 billion (S$6.74 billion), the HKMA said yesterday. Month-on-month figures are not seasonally adjusted.
Loan approvals for new property rose 0.7 per cent month-on-month in May, while loan demand for mortgages on existing property fell 4.5 per cent. Approvals for refinancing loans increased by 10.5 per cent against April.
Following is a summary of data from the authority for May compared with April: The number of new mortgage applications fell 11.1 per cent to 20,283 from the previous month's 22,818.
The value of new mortgage loans drawn down increased by 12.7 per cent to HK$28.9 billion.
The outstanding value of mortgage loans increased 1.5 per cent to HK$675.6 billion.
The mortgage delinquency ratio and re-scheduled loan ratio were steady at 0.03 per cent and 0.06 per cent, respectively. -- Reuters
Source: Business Times, 29 Jun 2010
New loans approved in May totalled HK$37.8 billion (S$6.74 billion), the HKMA said yesterday. Month-on-month figures are not seasonally adjusted.
Loan approvals for new property rose 0.7 per cent month-on-month in May, while loan demand for mortgages on existing property fell 4.5 per cent. Approvals for refinancing loans increased by 10.5 per cent against April.
Following is a summary of data from the authority for May compared with April: The number of new mortgage applications fell 11.1 per cent to 20,283 from the previous month's 22,818.
The value of new mortgage loans drawn down increased by 12.7 per cent to HK$28.9 billion.
The outstanding value of mortgage loans increased 1.5 per cent to HK$675.6 billion.
The mortgage delinquency ratio and re-scheduled loan ratio were steady at 0.03 per cent and 0.06 per cent, respectively. -- Reuters
Source: Business Times, 29 Jun 2010
Savills puts 6 HDB shops up for sale
(SINGAPORE) Real estate consultancy Savills yesterday launched six HDB commercial shops for sale through expressions of interest.
The shops are in the mature estates of Ang Mo Kio, Bedok, Bukit Batok, Yishun and Tampines.
They are rented and operate as substantial eating establishments, with seven to 13 food stalls each plus an anchor drinks stall. They have elastic seating capacity of 200-370 people spread over internal and outdoor areas.
All the shops are close to wet markets and transport nodes, and have good visibility and plenty of public car parking.
Collectively, the six shops have a guide price of about $65 million, reflecting a net yield before property tax of 5.7 per cent. They can be sold as a portfolio or individually, with each shop priced at between $4.8 million and $16 million.
The existing tenancies have four to nine years to run. The net yield before property tax is expected to grow to above 6 per cent in the near term as committed rents are stepped up over the tenancy period.
Expressions of interest close at 3pm on July 21.
Source: Business Times, 29 Jun 2010
The shops are in the mature estates of Ang Mo Kio, Bedok, Bukit Batok, Yishun and Tampines.
They are rented and operate as substantial eating establishments, with seven to 13 food stalls each plus an anchor drinks stall. They have elastic seating capacity of 200-370 people spread over internal and outdoor areas.
All the shops are close to wet markets and transport nodes, and have good visibility and plenty of public car parking.
Collectively, the six shops have a guide price of about $65 million, reflecting a net yield before property tax of 5.7 per cent. They can be sold as a portfolio or individually, with each shop priced at between $4.8 million and $16 million.
The existing tenancies have four to nine years to run. The net yield before property tax is expected to grow to above 6 per cent in the near term as committed rents are stepped up over the tenancy period.
Expressions of interest close at 3pm on July 21.
Source: Business Times, 29 Jun 2010
Dubai house prices unlikely to recover before 2011
Residential and commercial property market hit by oversupply: report
(DUBAI) Dubai house prices are not seen recovering before 2011 at the earliest while oversupply in commercial property will boost vacancy rates to more than 50 per cent next year Jones Lang LaSalle said on Sunday. A total of 26,000 homes are expected to be completed in 2010 and 25,000 in 2011, bringing total residential stock to 320,000 homes by the end of 2011, up from 287,000 at the end of the second quarter, the property consultancy said in a report.
'Despite the recent stabilisation in pricing levels, Dubai's residential market will experience a situation of oversupply and prices are not expected to recover before 2011 at the earliest,' the report said.
'Finance is a key factor in market recovery. The residential market has shown signs of improved lending in 2010 as more banks are injecting liquidity into the mortgage market.' Dubai's once booming property sector collapsed in the wake of the global financial crisis, leaving developers and customers with huge debts and several major projects unfinished.
Average apartment rents fell 10 per cent in the second quarter from the same period a year ago, and were down 4 per cent from the first quarter this year. Average villa rents fell 23 per cent in the second quarter from the second quarter of 2009 and were down 11 per cent from the first quarter this year. Greatest declines were in the luxury and high-end for both categories, the report said.
Apartment prices remained stable while villa prices rose marginally over the quarter.
While Dubai's office market is expected to experience a supply overhang, there is still a shortage of good quality supply, the report said.
2010 represents the peak in new supply with 20 million square feet of supply expected, but only 25 per cent of that is currently complete and further delays are expected. -- Reuters
Source: Business Times, 29 Jun 2010
(DUBAI) Dubai house prices are not seen recovering before 2011 at the earliest while oversupply in commercial property will boost vacancy rates to more than 50 per cent next year Jones Lang LaSalle said on Sunday. A total of 26,000 homes are expected to be completed in 2010 and 25,000 in 2011, bringing total residential stock to 320,000 homes by the end of 2011, up from 287,000 at the end of the second quarter, the property consultancy said in a report.
'Despite the recent stabilisation in pricing levels, Dubai's residential market will experience a situation of oversupply and prices are not expected to recover before 2011 at the earliest,' the report said.
'Finance is a key factor in market recovery. The residential market has shown signs of improved lending in 2010 as more banks are injecting liquidity into the mortgage market.' Dubai's once booming property sector collapsed in the wake of the global financial crisis, leaving developers and customers with huge debts and several major projects unfinished.
Average apartment rents fell 10 per cent in the second quarter from the same period a year ago, and were down 4 per cent from the first quarter this year. Average villa rents fell 23 per cent in the second quarter from the second quarter of 2009 and were down 11 per cent from the first quarter this year. Greatest declines were in the luxury and high-end for both categories, the report said.
Apartment prices remained stable while villa prices rose marginally over the quarter.
While Dubai's office market is expected to experience a supply overhang, there is still a shortage of good quality supply, the report said.
2010 represents the peak in new supply with 20 million square feet of supply expected, but only 25 per cent of that is currently complete and further delays are expected. -- Reuters
Source: Business Times, 29 Jun 2010
UK house price growth slows further in June
(LONDON) UK house prices rose the least in five months in June as the prospect of a budget squeeze curbed demand and the supply of homes for sale increased, Hometrack Ltd said.
The average price in England and Wales gained 0.1 per cent from May, the slowest pace since January, to £158,900 (S$332,309), the London-based property researcher said in an e- mail report yesterday.
The number of new buyers registering with real-estate agents grew 0.1 per cent, and fell in six out of 10 regions, led by a 0.9 per cent drop in London.
Chancellor of the Exchequer George Osborne last week announced the deepest spending cuts in a generation and higher taxes to cut the UK's budget deficit. Consumer confidence slumped the most since July 2008 last month, Nationwide Building Society said. Home-price inflation has also been restrained by an increase in the number of properties for sale.
'Over the last four months the supply of housing for sale has grown three times faster than demand,' Richard Donnell, director of research at Hometrack, said in the report. 'We expect demand for housing to slow further as seasonal factors come into play and households consider the implications of the budget on their finances and on the economy.'
From a year earlier, prices increased 2.1 per cent in June, Hometrack said. The number of properties being listed for sale grew 2.9 per cent from May and is up 15 per cent in the past four months.
'We expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls,' Mr Donnell said.
Hometrack said higher interest rates pose 'the greatest potential threat' to the housing market and could lead to a 'material change' in market conditions. Bank of England policy maker Andrew Sentance voted for an interest-rate increase at the central bank's June 10 meeting, the minutes of the decision showed. It marked the first push for a rise within the policy committee in almost two years. The seven other members voted to leave the benchmark rate on hold at a record low 0.5 per cent.
Hometrack surveyed 1,507 agents and surveyors at 5,712 companies for its June report. -- Bloomberg
Source: Business Times, 29 Jun 2010
The average price in England and Wales gained 0.1 per cent from May, the slowest pace since January, to £158,900 (S$332,309), the London-based property researcher said in an e- mail report yesterday.
The number of new buyers registering with real-estate agents grew 0.1 per cent, and fell in six out of 10 regions, led by a 0.9 per cent drop in London.
Chancellor of the Exchequer George Osborne last week announced the deepest spending cuts in a generation and higher taxes to cut the UK's budget deficit. Consumer confidence slumped the most since July 2008 last month, Nationwide Building Society said. Home-price inflation has also been restrained by an increase in the number of properties for sale.
'Over the last four months the supply of housing for sale has grown three times faster than demand,' Richard Donnell, director of research at Hometrack, said in the report. 'We expect demand for housing to slow further as seasonal factors come into play and households consider the implications of the budget on their finances and on the economy.'
From a year earlier, prices increased 2.1 per cent in June, Hometrack said. The number of properties being listed for sale grew 2.9 per cent from May and is up 15 per cent in the past four months.
'We expect market conditions to remain subdued with prices likely to track sideways at best, but with the distinct possibility of small month-on-month falls,' Mr Donnell said.
Hometrack said higher interest rates pose 'the greatest potential threat' to the housing market and could lead to a 'material change' in market conditions. Bank of England policy maker Andrew Sentance voted for an interest-rate increase at the central bank's June 10 meeting, the minutes of the decision showed. It marked the first push for a rise within the policy committee in almost two years. The seven other members voted to leave the benchmark rate on hold at a record low 0.5 per cent.
Hometrack surveyed 1,507 agents and surveyors at 5,712 companies for its June report. -- Bloomberg
Source: Business Times, 29 Jun 2010
Gains in London home prices slow as owners decide to sell
More luxury houses and apartments on market as market recovers: Savills
(LONDON) Luxury-home prices in central London increased by the smallest amount in five quarters after a year-long recovery in values persuaded more owners to put apartments and houses on the market, Savills plc said.
The average value of a home costing more than £1 million (S$2.09 million) rose 0.6 per cent in the second quarter from the first three months of the year, according to the London-based property broker. Prices were 12 per cent higher than a year earlier, down from an annual gain of almost 17 per cent in the first quarter.
'It now seems clear we're at a tipping point' as more stock has come onto the market just as election uncertainty and planned government budget cuts hurt demand, Yolande Barnes, head of residential research at Savills, said in the statement.
Prices will fall about 4 per cent in the second half as the fragile economic recovery and higher taxes dampen appetites for homes in neighbourhoods like Mayfair, Kensington and Notting Hill, Barnes predicted. She expects values to decline one per cent in the full year, following an 8.8 per cent gain in 2009.
Luxury property values have gained every month since March last year as buyers competed for a limited number of homes for sale. Prices increased 3 per cent in first quarter and 4.3 per cent in the last three months of 2009. The second quarter increase was the smallest since an 18-month slide in prices bottomed out in March 2009.
Chancellor of the Exchequer George Osborne announced last week that from June 23 the tax rate on profits from the sale of rental properties or second homes will rise to 28 per cent from 18 per cent for UK taxpayers with total annual income exceeding £37,400.
Brokers reported a pickup in properties put on the market after a plan announced by the governing Conservative and Liberal Democrat parties implied that the capital gains tax rate would increase to as much as 50 per cent.
From April, individuals earning more than £150,000 a year are subject to a 50 per cent income tax levy. Mr Osborne also left in place the previous administration's plan to raise property transfer tax, known as stamp duty, for homes costing more than £1 million to 5 per cent in April 2011 from 4 per cent now.
The tax changes are unlikely to reduce demand for London real estate from overseas buyers, who account for half the purchases and 63 per cent of deals involving properties worth more £15 million, Savills said.
While values are 10 per cent below the peak reached in the third quarter of 2007, the pound's slide means that in dollar terms prices are down by 33 per cent, Savills said.
Properties selling for more than £5 million appreciated by 1.3 per cent from the end of March, the broker said, while homes costing in excess of £15 million gained 1.5 per cent in the quarter. -- Bloomberg
Source: Business Times, 29 Jun 2010
(LONDON) Luxury-home prices in central London increased by the smallest amount in five quarters after a year-long recovery in values persuaded more owners to put apartments and houses on the market, Savills plc said.
The average value of a home costing more than £1 million (S$2.09 million) rose 0.6 per cent in the second quarter from the first three months of the year, according to the London-based property broker. Prices were 12 per cent higher than a year earlier, down from an annual gain of almost 17 per cent in the first quarter.
'It now seems clear we're at a tipping point' as more stock has come onto the market just as election uncertainty and planned government budget cuts hurt demand, Yolande Barnes, head of residential research at Savills, said in the statement.
Prices will fall about 4 per cent in the second half as the fragile economic recovery and higher taxes dampen appetites for homes in neighbourhoods like Mayfair, Kensington and Notting Hill, Barnes predicted. She expects values to decline one per cent in the full year, following an 8.8 per cent gain in 2009.
Luxury property values have gained every month since March last year as buyers competed for a limited number of homes for sale. Prices increased 3 per cent in first quarter and 4.3 per cent in the last three months of 2009. The second quarter increase was the smallest since an 18-month slide in prices bottomed out in March 2009.
Chancellor of the Exchequer George Osborne announced last week that from June 23 the tax rate on profits from the sale of rental properties or second homes will rise to 28 per cent from 18 per cent for UK taxpayers with total annual income exceeding £37,400.
Brokers reported a pickup in properties put on the market after a plan announced by the governing Conservative and Liberal Democrat parties implied that the capital gains tax rate would increase to as much as 50 per cent.
From April, individuals earning more than £150,000 a year are subject to a 50 per cent income tax levy. Mr Osborne also left in place the previous administration's plan to raise property transfer tax, known as stamp duty, for homes costing more than £1 million to 5 per cent in April 2011 from 4 per cent now.
The tax changes are unlikely to reduce demand for London real estate from overseas buyers, who account for half the purchases and 63 per cent of deals involving properties worth more £15 million, Savills said.
While values are 10 per cent below the peak reached in the third quarter of 2007, the pound's slide means that in dollar terms prices are down by 33 per cent, Savills said.
Properties selling for more than £5 million appreciated by 1.3 per cent from the end of March, the broker said, while homes costing in excess of £15 million gained 1.5 per cent in the quarter. -- Bloomberg
Source: Business Times, 29 Jun 2010
Industrial rents creep up in first rise since Q3 '08
RENTS for factories and warehouses turned around in the second quarter, rising for the first time since Q3 2008, DTZ said yesterday.
The property consultancy said the average monthly gross rent for first-storey private conventional industrial space was $2 per sq ft in Q2, up 2.6 per cent from Q1. The rent for upper-storey space was $1.60 psf, up 3.2 per cent.
According to DTZ, the average monthly gross rents for first and upper-storey private industrial space are down 14.9 and 22 per cent respectively from their peaks in Q3 2008.
Colliers International's director (industrial) Tan Boon Leong also said rents for factories and warehouses edged up in Q2. 'This is in line with the increase in factory orders, which in turn led to higher demand for industrial space,' he said.
In May, Singapore's manufacturing output surged 58.6 per cent year on year, driven largely by higher biomedical output.
Greater demand for industrial space has come mainly from higher-end manufacturers such as those in electronics and precision engineering, Mr Tan said.
He believes factory and warehouse rents will continue to rise in small steps this year, as manufacturers still need to utilise excess capacity carried over from the downturn.
DTZ has a similar view. 'Industrial rents are likely to continue to increase but at a slow pace given the stream of about 15 million sq ft of private industrial space in the pipeline over the next one and a half years,' said its South-east Asia research head Chua Chor Hoon.
The outlook for hi-tech industrial space is less bright. In Q2, the average monthly gross rent for business, science park and other space in this sector was unchanged at $3.15 psf.
DTZ does not expect hi-tech rents to move much this year, with a significant amount of business park space expected to come on stream in the second half.
There will also be competition for tenants from commercial space in secondary locations, said DTZ's executive director (business space) Cheng Siow Ying. 'The narrow rental gap between decentralised offices and hi-tech industrial space provides little impetus for upward movement of hi-tech industrial rents.'
Source: Business Times, 29 Jun 2010
The property consultancy said the average monthly gross rent for first-storey private conventional industrial space was $2 per sq ft in Q2, up 2.6 per cent from Q1. The rent for upper-storey space was $1.60 psf, up 3.2 per cent.
According to DTZ, the average monthly gross rents for first and upper-storey private industrial space are down 14.9 and 22 per cent respectively from their peaks in Q3 2008.
Colliers International's director (industrial) Tan Boon Leong also said rents for factories and warehouses edged up in Q2. 'This is in line with the increase in factory orders, which in turn led to higher demand for industrial space,' he said.
In May, Singapore's manufacturing output surged 58.6 per cent year on year, driven largely by higher biomedical output.
Greater demand for industrial space has come mainly from higher-end manufacturers such as those in electronics and precision engineering, Mr Tan said.
He believes factory and warehouse rents will continue to rise in small steps this year, as manufacturers still need to utilise excess capacity carried over from the downturn.
DTZ has a similar view. 'Industrial rents are likely to continue to increase but at a slow pace given the stream of about 15 million sq ft of private industrial space in the pipeline over the next one and a half years,' said its South-east Asia research head Chua Chor Hoon.
The outlook for hi-tech industrial space is less bright. In Q2, the average monthly gross rent for business, science park and other space in this sector was unchanged at $3.15 psf.
DTZ does not expect hi-tech rents to move much this year, with a significant amount of business park space expected to come on stream in the second half.
There will also be competition for tenants from commercial space in secondary locations, said DTZ's executive director (business space) Cheng Siow Ying. 'The narrow rental gap between decentralised offices and hi-tech industrial space provides little impetus for upward movement of hi-tech industrial rents.'
Source: Business Times, 29 Jun 2010
StayWell brings Australia hotel brands to Singapore
Park Regis hotel opening in Sept; Leisure Inn plans on drawing board
AUSTRALIA-BASED StayWell Hospitality Group is looking to stamp its Park Regis and Leisure Inn brands on more properties in Singapore and the rest of Asia.
The first Park Regis hotel here is set to open in September, and the group also has the country's first Leisure Inn hotel on the drawing board.
StayWell may be rather new to Singapore, but it is not venturing unassisted. The group's chairman is Asok Kumar Hiranandani, who built up property firm Royal Brothers with his brother, Raj Kumar.
Park Regis Investments - in which Mr Asok Kumar Hiranandani is a shareholder - won the bid for a piece of state land at Merchant Road in 2007. It has invested around $175 million in total to build the 203-room four-star Park Regis Singapore, as well as a seven-storey office block, on the site.
The hotel is targeting business travellers and room rates could start in the range of $200. StayWell is expecting an occupancy rate of 70-80 per cent. Talks to lease the office space out are underway.
The hotel will be a 'stunning investment' in the next few years, Mr Hiranandani told The Business Times. His confidence stems from the hotel's location near Clarke Quay and from the opening of the two integrated resorts.
To stand out from the competition, Park Regis Singapore will incorporate 'bits of Singaporean and Australian flavours', said StayWell CEO and managing director Simon Wan. For a start, it has picked an Australian, Jason Dowd, as the hotel's general manager.
'We will make sure that from the composition of the food, the composition of the wine, the television channels in the room to the staff uniforms, there will be some Australian flavour complemented by local themes,' Mr Wan said.
There are generally few good hotels up for sale in Singapore, so those on the market tend to generate interest among investors and observers. According to Mr Hiranandani, Park Regis Singapore has already attracted investors' interest.
'If someone gives us a management contract back for at least 15 years, we'll be more than happy to sell the hotel . . . The intention of bringing the brand to Singapore was to take it out of Australia and expand it to Asia,' he said.
'But I'd rather open the hotel first and get the income going. If it's an attractive price, we'll take the offer and buy another site.'
StayWell hopes to follow up with another hotel here under the three-star Leisure Inn brand. The Park Regis and Leisure Inn lines will complement each other, Mr Wan said, adding that there is strong demand for well-located and well-managed hotels in the three-star market.
He cited the success of Ibis Singapore as an example. The hotel, managed by another hospitality group Accor, opened in February last year and has achieved an above 90 per cent occupancy rate in the last three months.
But StayWell will not be rushing into any deal just so it can set up the Leisure Inn hotel. 'Because of high land costs, we have to be very careful in approaching this,' Mr Hiranandani said.
StayWell has 24 hotels in its portfolio and owns 14 of them. The group is looking to expand in Asia, and is in negotiations to buy 38 hotels in China.
Mr Hiranandani also said that he has bigger plans for StayWell but declined to elaborate. All he shared was: 'We are the only unlisted hotel operator out there.'
So is StayWell eyeing a public listing? Mr Hiranandani's son Bobby, who has been involved in the day-to-day running of his father's hospitality business, said: 'There are many options we are looking at. A listing is somewhat possible down the road.'
Source: Business Times, 29 Jun 2010
AUSTRALIA-BASED StayWell Hospitality Group is looking to stamp its Park Regis and Leisure Inn brands on more properties in Singapore and the rest of Asia.
The first Park Regis hotel here is set to open in September, and the group also has the country's first Leisure Inn hotel on the drawing board.
StayWell may be rather new to Singapore, but it is not venturing unassisted. The group's chairman is Asok Kumar Hiranandani, who built up property firm Royal Brothers with his brother, Raj Kumar.
Park Regis Investments - in which Mr Asok Kumar Hiranandani is a shareholder - won the bid for a piece of state land at Merchant Road in 2007. It has invested around $175 million in total to build the 203-room four-star Park Regis Singapore, as well as a seven-storey office block, on the site.
The hotel is targeting business travellers and room rates could start in the range of $200. StayWell is expecting an occupancy rate of 70-80 per cent. Talks to lease the office space out are underway.
The hotel will be a 'stunning investment' in the next few years, Mr Hiranandani told The Business Times. His confidence stems from the hotel's location near Clarke Quay and from the opening of the two integrated resorts.
To stand out from the competition, Park Regis Singapore will incorporate 'bits of Singaporean and Australian flavours', said StayWell CEO and managing director Simon Wan. For a start, it has picked an Australian, Jason Dowd, as the hotel's general manager.
'We will make sure that from the composition of the food, the composition of the wine, the television channels in the room to the staff uniforms, there will be some Australian flavour complemented by local themes,' Mr Wan said.
There are generally few good hotels up for sale in Singapore, so those on the market tend to generate interest among investors and observers. According to Mr Hiranandani, Park Regis Singapore has already attracted investors' interest.
'If someone gives us a management contract back for at least 15 years, we'll be more than happy to sell the hotel . . . The intention of bringing the brand to Singapore was to take it out of Australia and expand it to Asia,' he said.
'But I'd rather open the hotel first and get the income going. If it's an attractive price, we'll take the offer and buy another site.'
StayWell hopes to follow up with another hotel here under the three-star Leisure Inn brand. The Park Regis and Leisure Inn lines will complement each other, Mr Wan said, adding that there is strong demand for well-located and well-managed hotels in the three-star market.
He cited the success of Ibis Singapore as an example. The hotel, managed by another hospitality group Accor, opened in February last year and has achieved an above 90 per cent occupancy rate in the last three months.
But StayWell will not be rushing into any deal just so it can set up the Leisure Inn hotel. 'Because of high land costs, we have to be very careful in approaching this,' Mr Hiranandani said.
StayWell has 24 hotels in its portfolio and owns 14 of them. The group is looking to expand in Asia, and is in negotiations to buy 38 hotels in China.
Mr Hiranandani also said that he has bigger plans for StayWell but declined to elaborate. All he shared was: 'We are the only unlisted hotel operator out there.'
So is StayWell eyeing a public listing? Mr Hiranandani's son Bobby, who has been involved in the day-to-day running of his father's hospitality business, said: 'There are many options we are looking at. A listing is somewhat possible down the road.'
Source: Business Times, 29 Jun 2010
More signs of slowdown in Singapore property market
There’s been more signs of a slowdown in the private property market here in the second quarter.
Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380.
In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase.
In addition, the number of HDB upgraders buying private homes slipped.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That’s lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter.
Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year.
The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang.
CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter.
Source : Channel News Asia, 29 Jun 2010
Property consultant CB Richard Ellis (CBRE) forecasts some 4,000 new homes were sold in the second quarter, lower than the previous quarter’s figure of 4,380.
In the resale market, CBRE estimates some 3,400 to 3,600 resale homes were sold in the second quarter.
If confirmed, that would be 15 to 20 percent lower than the 4,261 resale homes sold in the previous quarter.
Sub-sales numbered around 500, down from 806 in the previous quarter as the market became less bullish.
Sellers were also mindful of the stamp duty payable if they sold their property within a year of purchase.
In addition, the number of HDB upgraders buying private homes slipped.
About 33.7 per cent of new home buyers in the second quarter this year had HDB addresses. That’s lower than the 37.9 per cent of HDB upgraders making up the buyers of new homes in the previous quarter.
CBRE said the reduction could be attributed to a smaller supply of mass-market type of projects being launched in the second quarter.
Nevertheless, CBRE forecasts about 8,300 new homes were sold in the first half of this year. This is about 56.5 per cent of the 14,688 new homes sold for all of last year.
The projects that sold well in the second quarter were mostly in the low- to mid- tier price range projects like the Tree House condominium in Chestnut Avenue and The Minton in Hougang.
CBRE predicts that overall home prices in the second quarter could reflect a rise of between 2 and 3 per cent on-quarter.
Source : Channel News Asia, 29 Jun 2010
S’pore emerges as most liveable Asian city in new Global Liveable Cities Index
Singapore has emerged as the most liveable Asian city in a new index. It was ranked third worldwide coming in behind Geneva and Zurich in the Global Liveable Cities Index.
Published by Singapore’s Centre for Liveable Cities, the index looked at 64 cities including 36 from Asia.
When it comes to liveability, Singapore has been ranked up there with some of Europe’s best cities.
In individual rankings, it came in first for domestic security and stability and third for good governance and leadership.
And it ranked 5th for economic vibrancy and quality of life.
But Singapore paled in the area of eco-friendliness and sustainability which looked at things like pollution and environmental initiatives.
Dr Tan Khee Giap, lead researcher, Global Liveable Cities Index, said: “We did very well on water management but this data is not available to most cities. Data which is available in Singapore but not available in most of the 64 cities we studied, will not be used.”
Dr Tan said cities can work with the centre if they want to improve their ranking.
He said: “We do simulations by looking at cities and identify 20 weakest indicators among the more than 100 indicators we have. And hypothetically, if you improve your weakest 20%, how would your ranking be raised? So in that sense, it is more constructive than just doing a ranking which can be a beauty contest.”
These preliminary findings of the index were unveiled at the World Cities Summit on Tuesday.
The Centre for Liveable Cities said the index is still a work in progress.
While the index is comprehensive and covers 135 indicators, it is by no means complete.
Dr Tan said that they may be looking to include more factors such as gender bias.
Other cities, such as Penang and Tatarstan, have also indicated interest in being included in the index.
The index’s framework will be put up for further discussion during a workshop at the summit on Wednesday.
The Centre for Liveable Cities said its index stands out from other current rankings as it takes a more balanced approach.
But the way it’s computed will be discussed and refined further.
Andrew Tan, director, Centre for Liveable Cities, said: “In terms of looking at liveability from a more holistic and balanced framework, I think there are probably very few, if any, such set of indicators around.”
Separately, National Development Minister Mah Bow Tan also proposed a “Learning Network for Cities,” to share the best practices in building a liveable city.
He said: “Cities differ from one another in size and character. They are shaped by their own demographics, cultures and traditions, their history and geography.
“But there are some recurring themes in the sustainable development practices of successful cities. These themes include strong governance, citizen engagement, balancing development and the environment, and international collaborations.”
The push for sustainable urban living comes at a time when cities are growing at an unprecedented rate.
Every day, about 200,000 people move in cities and towns and by 2050, seven in 10 people will live in cities.
This presents challenges for governments to provide access to clean water, affordable housing and good sanitation.
Source: Channel News Asia, 29 Jun 2010
Published by Singapore’s Centre for Liveable Cities, the index looked at 64 cities including 36 from Asia.
When it comes to liveability, Singapore has been ranked up there with some of Europe’s best cities.
In individual rankings, it came in first for domestic security and stability and third for good governance and leadership.
And it ranked 5th for economic vibrancy and quality of life.
But Singapore paled in the area of eco-friendliness and sustainability which looked at things like pollution and environmental initiatives.
Dr Tan Khee Giap, lead researcher, Global Liveable Cities Index, said: “We did very well on water management but this data is not available to most cities. Data which is available in Singapore but not available in most of the 64 cities we studied, will not be used.”
Dr Tan said cities can work with the centre if they want to improve their ranking.
He said: “We do simulations by looking at cities and identify 20 weakest indicators among the more than 100 indicators we have. And hypothetically, if you improve your weakest 20%, how would your ranking be raised? So in that sense, it is more constructive than just doing a ranking which can be a beauty contest.”
These preliminary findings of the index were unveiled at the World Cities Summit on Tuesday.
The Centre for Liveable Cities said the index is still a work in progress.
While the index is comprehensive and covers 135 indicators, it is by no means complete.
Dr Tan said that they may be looking to include more factors such as gender bias.
Other cities, such as Penang and Tatarstan, have also indicated interest in being included in the index.
The index’s framework will be put up for further discussion during a workshop at the summit on Wednesday.
The Centre for Liveable Cities said its index stands out from other current rankings as it takes a more balanced approach.
But the way it’s computed will be discussed and refined further.
Andrew Tan, director, Centre for Liveable Cities, said: “In terms of looking at liveability from a more holistic and balanced framework, I think there are probably very few, if any, such set of indicators around.”
Separately, National Development Minister Mah Bow Tan also proposed a “Learning Network for Cities,” to share the best practices in building a liveable city.
He said: “Cities differ from one another in size and character. They are shaped by their own demographics, cultures and traditions, their history and geography.
“But there are some recurring themes in the sustainable development practices of successful cities. These themes include strong governance, citizen engagement, balancing development and the environment, and international collaborations.”
The push for sustainable urban living comes at a time when cities are growing at an unprecedented rate.
Every day, about 200,000 people move in cities and towns and by 2050, seven in 10 people will live in cities.
This presents challenges for governments to provide access to clean water, affordable housing and good sanitation.
Source: Channel News Asia, 29 Jun 2010
Private home price hikes expected to soften in Q2
Increases in private home prices are expected to slow down in the second quarter after climbing 5.6 percent in the first quarter.
Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.
Prices of suburban homes have already surpassed the peak by about 10 percent.
Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.
High-end homes are now just 8 percent off the record prices set in 2008.
And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.
Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.
Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.
With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.
Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.
“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.
“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”
Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.
For the second half of 2010, market watchers expect 1,000 new units to change hands each month.
Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.
Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.
With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.
Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”
The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.
Source: Channel News Asia, 29 Jun 2010
Colliers International said suburban homes could cost 2 to 3 percent more on average for the next two quarters.
Prices of suburban homes have already surpassed the peak by about 10 percent.
Meanwhile prices in the luxury segment have been projected to grow by up to 20 percent for the whole of 2010.
High-end homes are now just 8 percent off the record prices set in 2008.
And with the softening in price increases, analysts do not expect the government to roll out more measures to cool the property market.
Still, they believe high-end home prices could continue to push upwards, supported by foreign demand.
Properties in Sentosa Cove are among the priciest on the market. But many foreign buyers are still snapping them up, with a unit there being sold to a Chinese national for S$36 million.
With cooling measures implemented in several Asian cities, observers said more foreigners will dip into the Singapore property market.
Colliers International’s director (Research & Advisory), Tay Huey Ying, said: “Foreign buyers are certainly on the comeback. For the first five months alone, based on the caveats lodged, the number of foreign purchasers has already exceeded 55% of what we saw for the whole of last year.
“With the recovery of the economy gaining traction, we expect to see more of them coming into Singapore, especially given the cooling measures that the governments of Asian cities have put in place for their respective markets.
“We see some of those interest flowing into Singapore, and of course the appreciation of the renminbi will also contribute to the growing foreign buying population in the second half of the year.”
Property consultancy CB Richard Ellis estimates that some 4,000 new homes have been sold in the second quarter. That brings the first-half sales figure to 8,300 units, about 57 percent of new homes sold last year.
For the second half of 2010, market watchers expect 1,000 new units to change hands each month.
Despite the drop in sales volume, they said the strong numbers from the first five months of the year will ensure total sales for 2010 keep up with the transactions recorded in 2009.
Colliers International added that there will be fewer property launches as developers are running low on launch ready projects, especially in the mass market segment.
With signs of a slowdown in the property market, some analysts said that the government is unlikely to introduce more anti-speculative measures, unless prices rise sharply.
Chesterton Suntec International’s director and head for research and consultancy, Colin Tan, said: “It all depends on what’s the official price increase in the 2nd quarter. If it’s more than 5%, it’s likely that we may see more cooling measures….(one) of these measures could be lowering the
loan-to-value ratio from 80% to 75% or 70%.”
The Urban Redevelopment Authority (URA) is expected to release the data for Q2 on Thursday.
Source: Channel News Asia, 29 Jun 2010
Govt launches industrial land sales programme for 2H10
The Ministry of Trade and Industry (MTI) has launched its Industrial Government Land Sales programme for the second half of 2010.
There will be three sites in the Confirmed List and seven sites in the Reserve List, with a total site area of 19.92 hectares.
The three sites on the Confirmed List are at Kaki Bukit Avenue 4, the site at the junction of Yishun Street 23 and Yishun Avenue 9, and the land parcel at the junction of Old Toh Tuck Road and Toh Tuck Avenue.
MTI will also introduce four new sites on the Reserve List, at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62.
In addition, three sites from the first half of the 2010 Reserve List will be carried forward to the second half of the year.
Source: Channel News Asia, 29 Jun 2010
There will be three sites in the Confirmed List and seven sites in the Reserve List, with a total site area of 19.92 hectares.
The three sites on the Confirmed List are at Kaki Bukit Avenue 4, the site at the junction of Yishun Street 23 and Yishun Avenue 9, and the land parcel at the junction of Old Toh Tuck Road and Toh Tuck Avenue.
MTI will also introduce four new sites on the Reserve List, at Woodlands Avenue 12, Tuas View Square, Kaki Bukit Road 4 and Ang Mo Kio Street 62.
In addition, three sites from the first half of the 2010 Reserve List will be carried forward to the second half of the year.
Source: Channel News Asia, 29 Jun 2010
CapitaMalls Malaysia Trust launches IPO
CapitaMalls Asia could raise RM864m from spin-off's retail offering
CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.
The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.
It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here.
About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08.
The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).
The retail offering opened at 10am yesterday and will close at 5pm next Monday.
The institutional offering opened last Friday and will close next Wednesday.
CapitaMalls Malaysia Trust is expected to list on July 16.
CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.
CMRM is the manager of CapitaMalls Malaysia Trust.
CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'
CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.
The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total.
They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.
Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.
AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.
The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.
At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT.
CMMT's market capitalisation is expected to be about RM1.4 billion, it added.
The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.
CapitaMalls Asia lost two cents to $2.14 yesterday.
Source: Straits Times, 29 Jun 2010
CAPITAMALLS Malaysia Trust (CMMT) launched its retail offering yesterday as part of its listing on Malaysia's main share market.
The real estate investment trust (Reit) has been spun off from CapitaMalls Asia and will contain the parent company's three Malaysian malls.
It is offering 786.5 million units to institutional investors in Malaysia and overseas as well as Malaysian retail investors. The units will not be available to retail investors here.
About 719 million of the units will be offered to institutions, and the indicative price is RM1.10 (47 Singapore cents). There are 67.5 million units earmarked for Malaysian retail investors at a maximum price of RM1.08.
The price levels suggest CapitaMalls Asia could raise as much as RM863.8 million from the initial public offering (IPO).
The retail offering opened at 10am yesterday and will close at 5pm next Monday.
The institutional offering opened last Friday and will close next Wednesday.
CapitaMalls Malaysia Trust is expected to list on July 16.
CapitaMalls Malaysia Reit Management (CMRM) chairman Kee Teck Koon said in a statement that the listing of CapitaMalls Malaysia Trust will provide access to capital markets and accelerate the growth of its shopping mall business in Malaysia.
CMRM is the manager of CapitaMalls Malaysia Trust.
CMRM chief executive Sharon Lim said: 'Going forward, the fragmented ownership of shopping malls in Malaysia presents opportunities for growth through acquisition.'
CapitaMalls Asia will retain a stake of 41.74 per cent in CMMT, but if an over-allotment option of up to 117.98 million units is exercised, its stake could go down to 33 per cent.
The Employees Provident Fund Board of Malaysia and Great Eastern Life Assurance (Malaysia) have signed up as cornerstone investors in the IPO. They will subscribe to an aggregate of 90 million units, or 11.4 per cent of the 786.5 million units being offered in total.
They have agreed to pay RM1.10 per unit or the institutional price, whichever is lower.
Bloomberg said the CMMT offering is set to become Malaysia's second-biggest IPO this year while the Trust says it will become the largest 'pure-play' shopping mall Reit in Malaysia.
AmTrustee, which is the CMMT trustee, values the shopping mall portfolio at RM2.13 billion.
The assets are Gurney Plaza in Penang, The Mines in Selangor, as well as an interest in Sungei Wang Plaza in Kuala Lumpur. The portfolio has a total net lettable area of approximately 1.88 million sq ft.
At the indicative price of RM1.08, the retail offer will provide a forecast distribution yield of 6.9 per cent for 2011, said CMMT.
CMMT's market capitalisation is expected to be about RM1.4 billion, it added.
The CMMT statement said that CapitaMalls Asia plans to have a Malaysia retail property fund to acquire and develop property, especially malls in the country.
CapitaMalls Asia lost two cents to $2.14 yesterday.
Source: Straits Times, 29 Jun 2010
Fear and caution as investors take stock
Bourse's second-half outlook tinged with anxiety, although property market offers solace
INVESTORS hoping that the second half will turn out a bit better than England's on Sunday might find themselves out of luck, with more volatility warming up on the touchline.
Sure, market experts do not expect the disappointing performance to continue, but they fear the problems that have cropped up over the past six months may still flare up from time to time.
These could possibly come in the form of more panic over Europe's debts, a crash in China's over- heated economy, or the troubled United States economy slipping again into recession.
If there is a bright spot for investors here, it is the red-hot property market, where the huge gains made by HDB upgraders from selling their flats, combined with low mortgage rates, have helped to underpin the private residential market.
If the market's report card was written now, it would show that the bulls and bears appear to have fought each other to a standstill, with the benchmark Straits Times Index (STI) registering an almost negligible 1 per cent loss since January.
But that does not do justice to the days of high drama and near panic that have occurred, starting with the STI gaining 4.2 per cent to hit a two-year high of 3,019.74 in April on the back of dazzling economic data from outperforming Asian economies such as China and Singapore.
The bourse then suffered a hangover, falling by up to 12.2 per cent at one point last month from its April high as investors succumbed to fears over Europe's debt crisis.
Many investors fear that new problems will flare up in the second half while existing ones remain unresolved.
New complications on the horizon include the increasingly protectionist US Congress, which faces elections in November, and a faltering economy that has left millions of Americans jobless.
These new factors come on top of problems in the first half that refuse to go away - like questions over the ability of heavily indebted European countries such as Spain to service their debts.
Even China's move last week towards a more flexible yuan exchange rate offered little more than temporary solace.
Investors fast turned cagey after the US Federal Reserve noted that financial conditions had become 'less supportive of economic growth'.
Citigroup economists Kit Wei Zheng and Johanna Chua noted last week that investors' confidence stayed spooked, even though the sovereign debt crisis in Europe seemed to have subsided.
'Euro zone retail sales unexpectedly fell in April and in the United States, private employment and housing data disappointed in May,' they said.
Even in Asia, which has provided a steady stream of positive economic data to cheer investors, the magnitude of positive surprises has been declining, they noted.
South Korea, Taiwan, China, Thailand and Singapore have all reported May trade data and most have surprised on the upside, with accelerating momentum.
But apart from Singapore and India, industrial production has eased for most Asian economies.
Not surprisingly, Asian fund managers have adopted a wait-and-see attitude, shifting more assets into cash, even as stock prices advance on thin volumes during the World Cup.
Citigroup's fund-flow report yesterday said that net selling by Asian funds has continued since April.
'Unlike two months ago, when sales were concentrated in Singapore and Malaysia, the selling in May took place mainly in markets that have been overweight by Asian funds like Hong Kong,' it added.
But while fund managers stay on the sidelines, analysts expect HDB resale prices to stay firm, given the mismatch between demand and supply.
Citigroup said in its property report: 'With capital gains from existing HDB flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market.'
While investors can fund property purchases with cheap loans, as mortgage rates sink to less than 2 per cent, they can get rental yields of around 4.25 per cent.
------------------------------------------
GOOD YIELDS
'With capital gains from existing HDB flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market.'
Citigroup's property report
Source: Straits Times, 29 Jun 2010
INVESTORS hoping that the second half will turn out a bit better than England's on Sunday might find themselves out of luck, with more volatility warming up on the touchline.
Sure, market experts do not expect the disappointing performance to continue, but they fear the problems that have cropped up over the past six months may still flare up from time to time.
These could possibly come in the form of more panic over Europe's debts, a crash in China's over- heated economy, or the troubled United States economy slipping again into recession.
If there is a bright spot for investors here, it is the red-hot property market, where the huge gains made by HDB upgraders from selling their flats, combined with low mortgage rates, have helped to underpin the private residential market.
If the market's report card was written now, it would show that the bulls and bears appear to have fought each other to a standstill, with the benchmark Straits Times Index (STI) registering an almost negligible 1 per cent loss since January.
But that does not do justice to the days of high drama and near panic that have occurred, starting with the STI gaining 4.2 per cent to hit a two-year high of 3,019.74 in April on the back of dazzling economic data from outperforming Asian economies such as China and Singapore.
The bourse then suffered a hangover, falling by up to 12.2 per cent at one point last month from its April high as investors succumbed to fears over Europe's debt crisis.
Many investors fear that new problems will flare up in the second half while existing ones remain unresolved.
New complications on the horizon include the increasingly protectionist US Congress, which faces elections in November, and a faltering economy that has left millions of Americans jobless.
These new factors come on top of problems in the first half that refuse to go away - like questions over the ability of heavily indebted European countries such as Spain to service their debts.
Even China's move last week towards a more flexible yuan exchange rate offered little more than temporary solace.
Investors fast turned cagey after the US Federal Reserve noted that financial conditions had become 'less supportive of economic growth'.
Citigroup economists Kit Wei Zheng and Johanna Chua noted last week that investors' confidence stayed spooked, even though the sovereign debt crisis in Europe seemed to have subsided.
'Euro zone retail sales unexpectedly fell in April and in the United States, private employment and housing data disappointed in May,' they said.
Even in Asia, which has provided a steady stream of positive economic data to cheer investors, the magnitude of positive surprises has been declining, they noted.
South Korea, Taiwan, China, Thailand and Singapore have all reported May trade data and most have surprised on the upside, with accelerating momentum.
But apart from Singapore and India, industrial production has eased for most Asian economies.
Not surprisingly, Asian fund managers have adopted a wait-and-see attitude, shifting more assets into cash, even as stock prices advance on thin volumes during the World Cup.
Citigroup's fund-flow report yesterday said that net selling by Asian funds has continued since April.
'Unlike two months ago, when sales were concentrated in Singapore and Malaysia, the selling in May took place mainly in markets that have been overweight by Asian funds like Hong Kong,' it added.
But while fund managers stay on the sidelines, analysts expect HDB resale prices to stay firm, given the mismatch between demand and supply.
Citigroup said in its property report: 'With capital gains from existing HDB flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market.'
While investors can fund property purchases with cheap loans, as mortgage rates sink to less than 2 per cent, they can get rental yields of around 4.25 per cent.
------------------------------------------
GOOD YIELDS
'With capital gains from existing HDB flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market.'
Citigroup's property report
Source: Straits Times, 29 Jun 2010
Home prices 'set for healthy gains'
But high-end market likely to do less well amid fears of oversupply: Report
PRICES of mass market homes, especially Housing Board flats, are set for healthy gains this year, according to a Citigroup report.
But it is far more pessimistic about the high-end market. Citi is bucking an upbeat trend among property consultants by expressing fears of an oversupply of upscale homes.
It said, for example, that one-third of prime District 9 units due for completion in the next 12 to 15 months remain unsold.
However, HDB resale prices, which provide a strong base for the mass private market, are likely to stay firm due largely to the generally low supply since 2003, it said. Citi expects both HDB resale prices and rents, as well as mass market private home prices, to rise 5 per cent to 10 per cent by the end of the year.
'With capital gains from existing Housing Board flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market,' it said.
Mass market private home prices should be capped at $900 to $1,000 per sq ft (psf), though there is a chance they may overshoot, it said.
Considering the high bids and breakeven costs for recent government sites, developers are likely to keep selling private homes at a minimum range of $850 to $1,100 psf and HDB executive condos at closer to $750 psf.
Citi noted that overall resale volume is a hefty 50 per cent off levels in the boom times of mid-2007. Prime apartments are in worse shape than other home types. Prices of high-end homes are still some 10 per cent to 16 per cent off their 2007 peaks, while mass market prices are now almost 10 per cent above that most recent pinnacle.
Citi believes high-end home prices will stay flat this year, unlike some property consultants who expect rises of 10 per cent to as much as 20 per cent this year, given that price levels are below the 2007 peak.
'This is the sector that attracts more foreign buyers who have fewer buying constraints,' said DTZ's head of South-east Asia research Chua Chor Hoon.
Colliers International director for research and advisory Tay Huey Ying said foreign buyers, including permanent residents, comprised over half of total buyers in the first five months of this year.
'Moving on, as the world economy recovers, there could be some diversion of investments from countries which have imposed cooling measures in their respective property markets,' she said.
But Citi said a much-awaited jump in high-end sales has yet to materialise despite the completion of both integrated resorts. The recent rise in rentals, driven by relatively low completion rates in the past two quarters, is not sustainable, it says.
High-end rentals are up an average of 10 per cent from their recent lows but are still some 20 per cent off their peaks. Mass market rentals, on the other hand, are up more than 13 per cent and are just 8 per cent off their last peaks in 2008.
Citi highlighted a jump in home completions, with about 10,000 units to be ready this year - more than anticipated.
In the next two years, more than 11,000 units will be completed a year. And the bulk - or about 80 per cent - of those to be completed over the next 12 to 15 months will be in the central region.
In District 9 alone, about 30 per cent of the new completions are unsold and in Sentosa, 75 per cent of the new units to be completed this year await buyers.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said in the short term, the high-end segment may not boom until the supply imbalance is gradually resolved.
Citi said: 'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
---------------------------------------
THINKING AHEAD
'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
Citigroup on the oversupply in the high-end property sector
Source: Straits Times, 29 Jun 2010
PRICES of mass market homes, especially Housing Board flats, are set for healthy gains this year, according to a Citigroup report.
But it is far more pessimistic about the high-end market. Citi is bucking an upbeat trend among property consultants by expressing fears of an oversupply of upscale homes.
It said, for example, that one-third of prime District 9 units due for completion in the next 12 to 15 months remain unsold.
However, HDB resale prices, which provide a strong base for the mass private market, are likely to stay firm due largely to the generally low supply since 2003, it said. Citi expects both HDB resale prices and rents, as well as mass market private home prices, to rise 5 per cent to 10 per cent by the end of the year.
'With capital gains from existing Housing Board flats at a seven-year high, coupled with low mortgage rates, we believe new sales are likely to remain strong in the mass market,' it said.
Mass market private home prices should be capped at $900 to $1,000 per sq ft (psf), though there is a chance they may overshoot, it said.
Considering the high bids and breakeven costs for recent government sites, developers are likely to keep selling private homes at a minimum range of $850 to $1,100 psf and HDB executive condos at closer to $750 psf.
Citi noted that overall resale volume is a hefty 50 per cent off levels in the boom times of mid-2007. Prime apartments are in worse shape than other home types. Prices of high-end homes are still some 10 per cent to 16 per cent off their 2007 peaks, while mass market prices are now almost 10 per cent above that most recent pinnacle.
Citi believes high-end home prices will stay flat this year, unlike some property consultants who expect rises of 10 per cent to as much as 20 per cent this year, given that price levels are below the 2007 peak.
'This is the sector that attracts more foreign buyers who have fewer buying constraints,' said DTZ's head of South-east Asia research Chua Chor Hoon.
Colliers International director for research and advisory Tay Huey Ying said foreign buyers, including permanent residents, comprised over half of total buyers in the first five months of this year.
'Moving on, as the world economy recovers, there could be some diversion of investments from countries which have imposed cooling measures in their respective property markets,' she said.
But Citi said a much-awaited jump in high-end sales has yet to materialise despite the completion of both integrated resorts. The recent rise in rentals, driven by relatively low completion rates in the past two quarters, is not sustainable, it says.
High-end rentals are up an average of 10 per cent from their recent lows but are still some 20 per cent off their peaks. Mass market rentals, on the other hand, are up more than 13 per cent and are just 8 per cent off their last peaks in 2008.
Citi highlighted a jump in home completions, with about 10,000 units to be ready this year - more than anticipated.
In the next two years, more than 11,000 units will be completed a year. And the bulk - or about 80 per cent - of those to be completed over the next 12 to 15 months will be in the central region.
In District 9 alone, about 30 per cent of the new completions are unsold and in Sentosa, 75 per cent of the new units to be completed this year await buyers.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said in the short term, the high-end segment may not boom until the supply imbalance is gradually resolved.
Citi said: 'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
---------------------------------------
THINKING AHEAD
'While we believe most of the listed developers under our coverage are unlikely to cut prices to move their inventory, other developers may be more willing to do so.'
Citigroup on the oversupply in the high-end property sector
Source: Straits Times, 29 Jun 2010
Fancy a heartland coffee shop or 6?
At $65m, the 6 - spread across 5 estates - can be sold as bloc or singly
SIX heartland coffee shops in HDB blocks in Ang Mo Kio, Bedok, Tampines, Yishun and Bukit Batok are up for sale at around $65 million in total.
Each shop has seven to 13 food stalls in operation and seating capacity of between 200 and 370.
The $65 million guide price reflects a yield of about 5.7 per cent before tax, according to Savills Singapore, which is conducting an expressions of interest exercise for the sale.
The shops can be sold as a single portfolio or individually. Prices start from $4.8 million for a 297 sq m shop in Bedok North to $16 million for the largest, a 420 sq m shop in Bukit Batok.
Savills said net yields are expected to grow above 6 per cent, thanks to higher rents over the tenancy periods, which will run for another four to nine years.
They can provide very strong positive cash flows, said Mr Steven Ming, director of investment sales at Savills Singapore.
'Heartland eating establishments are extremely resilient trades. Even in a bad market, business is still as brisk as anyone could use a coffee fix for less than $1 anytime,' he added.
Expressions of interest sales are unusual for commercial HDB properties, but Mr Ming hopes to attract more than the usual niche investors for such properties and broaden the scope of the market.
Coffee shops are good investment properties, giving good rentals if they are well located, said Mr Tan Hong Boon, deputy managing director of Credo Real Estate Singapore.
PropNex chief executive Mohamed Ismail added that the availability of six localities will appeal to buyers who want to establish a chain or increase an existing portfolio.
But he said buyers might not want all six shops. It will depend on other factors, especially the traffic flow.
Mr Ming said the seller is a local businessman and investor who has owned the properties for periods ranging from three to 10 years.
The expressions of interest exercise will close at 3pm on July 21.
Source: Straits Times, 29 Jul 2010
SIX heartland coffee shops in HDB blocks in Ang Mo Kio, Bedok, Tampines, Yishun and Bukit Batok are up for sale at around $65 million in total.
Each shop has seven to 13 food stalls in operation and seating capacity of between 200 and 370.
The $65 million guide price reflects a yield of about 5.7 per cent before tax, according to Savills Singapore, which is conducting an expressions of interest exercise for the sale.
The shops can be sold as a single portfolio or individually. Prices start from $4.8 million for a 297 sq m shop in Bedok North to $16 million for the largest, a 420 sq m shop in Bukit Batok.
Savills said net yields are expected to grow above 6 per cent, thanks to higher rents over the tenancy periods, which will run for another four to nine years.
They can provide very strong positive cash flows, said Mr Steven Ming, director of investment sales at Savills Singapore.
'Heartland eating establishments are extremely resilient trades. Even in a bad market, business is still as brisk as anyone could use a coffee fix for less than $1 anytime,' he added.
Expressions of interest sales are unusual for commercial HDB properties, but Mr Ming hopes to attract more than the usual niche investors for such properties and broaden the scope of the market.
Coffee shops are good investment properties, giving good rentals if they are well located, said Mr Tan Hong Boon, deputy managing director of Credo Real Estate Singapore.
PropNex chief executive Mohamed Ismail added that the availability of six localities will appeal to buyers who want to establish a chain or increase an existing portfolio.
But he said buyers might not want all six shops. It will depend on other factors, especially the traffic flow.
Mr Ming said the seller is a local businessman and investor who has owned the properties for periods ranging from three to 10 years.
The expressions of interest exercise will close at 3pm on July 21.
Source: Straits Times, 29 Jul 2010
Monday, June 28, 2010
68 units sold at Waterfront Gold
Two of 5 blocks, or 150 units, of Bedok Reservoir condo released last Friday
FRASERS Centrepoint and Far East Organization have sold 68 of the 150 units for sale at the Waterfront Gold condo fronting Bedok Reservoir as of yesterday.
These were units released by the developers last Friday.
The 99-year leasehold condo, which has a total 361 units, is priced at $950 psf on average.
Over 70 per cent of units sold were smallish apartments - one bedders, one bedroom with study units and two bedders.
Buyers were predominantly Singaporeans and there was a roughly equal split between those with HDB and private addresses. In absolute price terms, the cheapest unit sold was about $555,000, for a 581 square foot, one-bedder on the second level. Both penthouses released (about 2,000 sq ft each) were sold at an average price of about $1,025 psf or $2.1 million each.
While Waterfront Gold's sales seem tepid compared with launches earlier this year, Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong said the outcome was 'within our expectation and quite remarkable given today's market sentiment'.
'We are testing the upper end of prices in the upgraders' market and because of the location and facilities, we are positioning Waterfront Gold as an upper-mid market condo rather than a mass-market product.
'For instance, we have a sky park with a dedicated express bubble lift and toilets in the development will have marble floors,' he added.
Mr Cheang also said the developers are offering two of the project's five blocks, or 150 units, as part of 'a deliberate attempt not to sell out the project'.
'We wish to sell progressively and keep the remaining three blocks until the location of the Bedok Reservoir Station on Downtown Line 3 is announced.'
Market watchers recall that during March/April, when home buying sentiment was stronger, developers used to achieve sales of about 300 units in the first weekend of a project's release.
Knight Frank managing director (residential services) Peter Ow attributed Waterfront Gold's sales result to a 'combination of challenging pricing and a slower market'.
Waterfront Gold is the third in a series of four condos that Frasers Centrepoint and Far East are developing on the former Waterfront View site.
Waterfront Waves was first released in January 2008 at an average price of about $750 psf, followed by the launch of Waterfront Key in July last year at $735 psf on average.
The developers have been raising prices in these two projects.
Waterfront Waves is now fully sold and the remaining 100-odd apartments at Waterfront Key are now selling at average prices of $850 psf for poolview units and $950 psf for reservoir-facing units.
Source: Business Times, 28 Jun 2010
FRASERS Centrepoint and Far East Organization have sold 68 of the 150 units for sale at the Waterfront Gold condo fronting Bedok Reservoir as of yesterday.
These were units released by the developers last Friday.
The 99-year leasehold condo, which has a total 361 units, is priced at $950 psf on average.
Over 70 per cent of units sold were smallish apartments - one bedders, one bedroom with study units and two bedders.
Buyers were predominantly Singaporeans and there was a roughly equal split between those with HDB and private addresses. In absolute price terms, the cheapest unit sold was about $555,000, for a 581 square foot, one-bedder on the second level. Both penthouses released (about 2,000 sq ft each) were sold at an average price of about $1,025 psf or $2.1 million each.
While Waterfront Gold's sales seem tepid compared with launches earlier this year, Frasers Centrepoint Homes chief operating officer Cheang Kok Kheong said the outcome was 'within our expectation and quite remarkable given today's market sentiment'.
'We are testing the upper end of prices in the upgraders' market and because of the location and facilities, we are positioning Waterfront Gold as an upper-mid market condo rather than a mass-market product.
'For instance, we have a sky park with a dedicated express bubble lift and toilets in the development will have marble floors,' he added.
Mr Cheang also said the developers are offering two of the project's five blocks, or 150 units, as part of 'a deliberate attempt not to sell out the project'.
'We wish to sell progressively and keep the remaining three blocks until the location of the Bedok Reservoir Station on Downtown Line 3 is announced.'
Market watchers recall that during March/April, when home buying sentiment was stronger, developers used to achieve sales of about 300 units in the first weekend of a project's release.
Knight Frank managing director (residential services) Peter Ow attributed Waterfront Gold's sales result to a 'combination of challenging pricing and a slower market'.
Waterfront Gold is the third in a series of four condos that Frasers Centrepoint and Far East are developing on the former Waterfront View site.
Waterfront Waves was first released in January 2008 at an average price of about $750 psf, followed by the launch of Waterfront Key in July last year at $735 psf on average.
The developers have been raising prices in these two projects.
Waterfront Waves is now fully sold and the remaining 100-odd apartments at Waterfront Key are now selling at average prices of $850 psf for poolview units and $950 psf for reservoir-facing units.
Source: Business Times, 28 Jun 2010
HK police get in the act over cancelled flat sales
(HONG KONG) Police are probing the controversial sale of luxury flats that fell through months after its developer said that one of them had set a world-record price, a report said yesterday.
The Sunday Morning Post, citing a Transport and Housing Bureau document, said that police had joined the probe into the sale after the government launched an investigation into the deal earlier this month.
A police spokesman could not be immediately reached for comment.
Property giant Henderson Land Development reported this month that the sale of as many as 20 out of 24 units at its exclusive 39 Conduit Road towers in the city's Mid-Levels residential area had been cancelled. The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October had sold for US$56.6 million.
Critics demanded a probe and asked why the cancellations came to light only eight months after the sales announcement, which helped hike prices for luxury residential flats in Hong Kong and stoked concerns about a property bubble.
Henderson has also been condemned for selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers. The supposed 68th-floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports. It was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
A Henderson official could not be immediately reached yesterday, but a spokeswoman told the Post that the company would cooperate with any police probe. -- AFP
Source: Business Times, 28 Jun 2010
The Sunday Morning Post, citing a Transport and Housing Bureau document, said that police had joined the probe into the sale after the government launched an investigation into the deal earlier this month.
A police spokesman could not be immediately reached for comment.
Property giant Henderson Land Development reported this month that the sale of as many as 20 out of 24 units at its exclusive 39 Conduit Road towers in the city's Mid-Levels residential area had been cancelled. The scrapped deals included what was supposed to be the world's most expensive apartment, a 6,158-square-foot duplex that Henderson said in October had sold for US$56.6 million.
Critics demanded a probe and asked why the cancellations came to light only eight months after the sales announcement, which helped hike prices for luxury residential flats in Hong Kong and stoked concerns about a property bubble.
Henderson has also been condemned for selectively numbering the floors on the 46-storey building as a ploy to attract Chinese buyers. The supposed 68th-floor duplex that snatched world-record price was actually on the 43rd and 44th floors, according to reports. It was so numbered because '68' sounds like 'continuing fortune' in Chinese and is considered lucky.
A Henderson official could not be immediately reached yesterday, but a spokeswoman told the Post that the company would cooperate with any police probe. -- AFP
Source: Business Times, 28 Jun 2010
Sharp drop in private home prices unlikely in H2
Do not expect the private residential property market to cool abruptly in the second half of this year. While property sales and home prices in some segments may soften in coming months, industry experts say the market is not likely to see a steep correction.
Observers believe buyers still have excess funds to chase more units here, with many considering property investing to be a safe haven compared to the volatile stock market. Market watchers expect 600 to 1,000 units to be sold each month, for the rest of the year.
While this is slower than the more than 1,000 units sold monthly from January to May, property analysts nonetheless say this level of demand suggests the market remains buoyant.
For the whole year, analysts expect total sales to hit between 12,000 and 15,000 units, thanks to the strong sales in the first half of the year. Sales of 7,666 private homes were recorded from January to May, more than the 7,073 sold in the same period last year.
Analysts believe the European debt crisis will lead to slower sales in the months ahead, compounded by the mismatch between buyers’ and sellers’ expectations, and the Government’s cooling measures taking effect.
“Buyers may factor in the risks in the global market but sellers are not prepared to give that kind of discount, thinking the market will eventually improve,” said Mr Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic.
Private property prices may rise by between 10 and 15 per cent for the whole year.
Mr Mak said: “Developers are not likely to cut prices because they have the financial resources (from earlier strong sales) to hold on to. They also face low holding costs due to the low interest rates.”
As for high-end homes specifically, prices in this segment still “have upside potential since they are still 15- to 20-per-cent lower than the peak levels in 2008,” said Mr Donald Han, managing director of property consultancy Cushman and Wakefield.
Meanwhile, the large supply of land to be made available by the Government in the next six months – 27 residential sites and four mixed-use sites potentially yielding 13,905 residential units – should temper the aggressive bidding among developers, and this could have an effect on the en bloc market.
“Developers will be spoilt for choice in the Government Land Sales programme, which has a faster process. There is also no complexity arising from litigations as seen in en bloc sales,” said Mr Mak.
Source: Today, 28 Jun 2010
Observers believe buyers still have excess funds to chase more units here, with many considering property investing to be a safe haven compared to the volatile stock market. Market watchers expect 600 to 1,000 units to be sold each month, for the rest of the year.
While this is slower than the more than 1,000 units sold monthly from January to May, property analysts nonetheless say this level of demand suggests the market remains buoyant.
For the whole year, analysts expect total sales to hit between 12,000 and 15,000 units, thanks to the strong sales in the first half of the year. Sales of 7,666 private homes were recorded from January to May, more than the 7,073 sold in the same period last year.
Analysts believe the European debt crisis will lead to slower sales in the months ahead, compounded by the mismatch between buyers’ and sellers’ expectations, and the Government’s cooling measures taking effect.
“Buyers may factor in the risks in the global market but sellers are not prepared to give that kind of discount, thinking the market will eventually improve,” said Mr Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic.
Private property prices may rise by between 10 and 15 per cent for the whole year.
Mr Mak said: “Developers are not likely to cut prices because they have the financial resources (from earlier strong sales) to hold on to. They also face low holding costs due to the low interest rates.”
As for high-end homes specifically, prices in this segment still “have upside potential since they are still 15- to 20-per-cent lower than the peak levels in 2008,” said Mr Donald Han, managing director of property consultancy Cushman and Wakefield.
Meanwhile, the large supply of land to be made available by the Government in the next six months – 27 residential sites and four mixed-use sites potentially yielding 13,905 residential units – should temper the aggressive bidding among developers, and this could have an effect on the en bloc market.
“Developers will be spoilt for choice in the Government Land Sales programme, which has a faster process. There is also no complexity arising from litigations as seen in en bloc sales,” said Mr Mak.
Source: Today, 28 Jun 2010
Industrial rents rise for first time since falling from peak in Q3 2008
Rents for industrial space rose for the first time after falling from its peak in the third quarter of 2008.
According to DTZ Research, average monthly rents of first-storey private industrial space rose 2.6 per cent quarter-on-quarter to S$2 per square foot, while upper-storey space rose 3.2 per cent quarter-on-quarter to S$1.60 per square foot per month.
Rents for hi-tech industrial properties, however, were unchanged at S$3.15 per square foot per month in the second quarter of this year.
According to Chua Chor Hoon, head of DTZ’s Southeast Asia Research, industrial rents are likely to continue to rise but at a slow pace given the stream of private industrial space coming onboard within the next 18 months.
However, hi-tech rents are expected to be largely unchanged due to a large amount of business park developments expected to be completed in the second half of the year.
Source: Channel News Asia, 28 Jun 2010
According to DTZ Research, average monthly rents of first-storey private industrial space rose 2.6 per cent quarter-on-quarter to S$2 per square foot, while upper-storey space rose 3.2 per cent quarter-on-quarter to S$1.60 per square foot per month.
Rents for hi-tech industrial properties, however, were unchanged at S$3.15 per square foot per month in the second quarter of this year.
According to Chua Chor Hoon, head of DTZ’s Southeast Asia Research, industrial rents are likely to continue to rise but at a slow pace given the stream of private industrial space coming onboard within the next 18 months.
However, hi-tech rents are expected to be largely unchanged due to a large amount of business park developments expected to be completed in the second half of the year.
Source: Channel News Asia, 28 Jun 2010
In love with Sentosa Cove
A house in his neighbourhood was sold for $36 million and sales in the quiet and exclusive Sentosa Cove continue unabated, but shipping magnate Mahesh Iyer has no intentions of selling the bungalow he bought for just $6.8 million three years ago.
“Even if I sold it, where will I find another place like this?” he said.
Indeed, how many homes in Singapore have a yacht docked along a watercourse running in their backyard?
Coral Island, an enclave of 21 homes inside Sentosa Cove, looks like any other upper-middle class Sydney or Melbourne suburb. The absence of front gates – together with the low perimeter walls that separate the closely-built houses – lend the neighbourhood a cosy and relaxed air.
The Maheshes, who hail from Mumbai but have lived in Singapore for 11 years, will become Singapore citizens today.
When Today interviewed Mr Mahesh and his wife, Mala, three years ago, they were just about to move into their 10,000 sq ft bungalow with their two teenage children and one of the few families to move into Sentosa Cove.
“When we first moved in, we tried to order McDonald’s and Pizza Hut, but they told us they don’t deliver to our area. But now they do,” said Mr Mahesh’s daughter, Mithila, 18.
In spite of the property fever that is abuzz, most of their neighbours – including Singaporeans and those who are in banking, shipping and retail – are still living in their homes, Mr Mahesh told MediaCorp.
“We have no intention of selling. This is our home,” said the 42-year-old managing director of Orient Express Lines.
The red-hot prices of Sentosa Cove’s property prices do not surprise him as “supply is so little”. All things considered, Singapore is still “positively cheaper” than other locations like New York and Tokyo, he added.
“We enjoy open spaces and like to walk, so Singapore offers lots of greenery and clean, unpolluted air. Also, it’s safer here,” said Mrs Mahesh, 42.
Waterfront living presents the family with many recreational perks – the Maheshes unwind by taking their yacht out to the Southern Islands.
With more young people in the neighbourhood, Mr Mahesh’s 15-year-old son Murli and his friends relish biking over the island, and heading to Wave House, a surf and party hangout, to chill.
Since the integrated resort opened on the island, more people have moved into Sentosa Cove.
“It is a lot busier, but not in a bad way,” said Murli.
Source: Today, 28 Jun 2010
“Even if I sold it, where will I find another place like this?” he said.
Indeed, how many homes in Singapore have a yacht docked along a watercourse running in their backyard?
Coral Island, an enclave of 21 homes inside Sentosa Cove, looks like any other upper-middle class Sydney or Melbourne suburb. The absence of front gates – together with the low perimeter walls that separate the closely-built houses – lend the neighbourhood a cosy and relaxed air.
The Maheshes, who hail from Mumbai but have lived in Singapore for 11 years, will become Singapore citizens today.
When Today interviewed Mr Mahesh and his wife, Mala, three years ago, they were just about to move into their 10,000 sq ft bungalow with their two teenage children and one of the few families to move into Sentosa Cove.
“When we first moved in, we tried to order McDonald’s and Pizza Hut, but they told us they don’t deliver to our area. But now they do,” said Mr Mahesh’s daughter, Mithila, 18.
In spite of the property fever that is abuzz, most of their neighbours – including Singaporeans and those who are in banking, shipping and retail – are still living in their homes, Mr Mahesh told MediaCorp.
“We have no intention of selling. This is our home,” said the 42-year-old managing director of Orient Express Lines.
The red-hot prices of Sentosa Cove’s property prices do not surprise him as “supply is so little”. All things considered, Singapore is still “positively cheaper” than other locations like New York and Tokyo, he added.
“We enjoy open spaces and like to walk, so Singapore offers lots of greenery and clean, unpolluted air. Also, it’s safer here,” said Mrs Mahesh, 42.
Waterfront living presents the family with many recreational perks – the Maheshes unwind by taking their yacht out to the Southern Islands.
With more young people in the neighbourhood, Mr Mahesh’s 15-year-old son Murli and his friends relish biking over the island, and heading to Wave House, a surf and party hangout, to chill.
Since the integrated resort opened on the island, more people have moved into Sentosa Cove.
“It is a lot busier, but not in a bad way,” said Murli.
Source: Today, 28 Jun 2010
Sunday, June 27, 2010
Condos woo buyers with glitzy extras
While special features may not make or break a deal, they do enhance appeal
Developers of a condominium featuring a skypark hope the feature will prove to be a hit with increasingly demanding buyers.
The skypark is on the top 16th floor of the 361-unit Waterfront Gold in Bedok Reservoir, which is being released this weekend.
Frasers Centrepoint, which is developing the condo jointly with Far East Organization, says it is the first skypark in a private residential project.
The skypark is an 8,000 sq ft observation-cum-exercise deck offering unparalleled views of Bedok Reservoir, the developers said. Units at the condo are selling for $950 psf on average.
As consumers here mature and become more demanding, developers are coming up with more special features to entice them.
While these glitzy extras may not make or break a deal, they do help to enhance a project's appeal.
And in a quieter market, they are all the more important when it comes to attracting buyers, experts said.
'The mass market and mid-tier market have surpassed peak prices. We are going through a consolidation phase, which could last for three, four, five months,' said Cushman & Wakefield managing director Donald Han.
'Buyers shouldn't be expecting too much of a discount though as developers are still in a very strong position and can hold.'
But buyers can expect to see more of these special condo features, experts said.
A recent major suburban launch, The Minton in Lorong Ah Soo, also highlighted its many facilities, including an air-conditioned, indoor badminton hall and a 20m heated pool.
The developer of the 1,145-unit condo recently raised the price slightly to $865 psf from $850 psf last month.
And at Twin Peaks in Grange Road, which could be launched in the early part of next month, all the units will come fully furnished - a first in Singapore.
'We wanted to give something that nobody else has given in Singapore,' said Mr Thio Gim Hock, chief executive of Overseas Union Enterprise. This feature would appeal to investors, who can rent the unit out immediately, he said.
The condo should cost around $2,850 psf on average, sources said.
'Differentiating features are important factors in selling a condo,' said Knight Frank managing director for residential services Peter Ow.
'In today's context, every developer is trying out new ideas and features to distinguish themselves from the competition. Hopefully, such special features will also help them to achieve a premium.'
He added: 'Moving forward, we definitely expect developers to be more innovative in their designs and concepts.'
Colliers International's director for research and advisory, Ms Tay Huey Ying, said Singapore home-buyers have become more demanding in their expectations as standards of public and private housing here rise.
They are also now 'more well-travelled and/or are exposed to diverse living and home concepts through the Internet and media', she said.
This means developers would need to constantly look for ways to improve their offerings to stay ahead of competition, whether it is a bull or a bear market.
'In the former, the developers need differentiators to edge out competition while in the latter, the developers use differentiators, which could also include marketing gimmicks, to stimulate demand,' Ms Tay said.
House-hunter Patricia Han said: 'These extras would already have been factored into the selling price. But if I were to rent out my unit, any extras can be an incentive when I market the condo.'
Ms Tay said Waterfront Gold's skypark is 'but a minor differentiator in the eye of the buyer'.
Location remains key. However, in a competitive market where buyers are flooded with many choices, being the first private condo to boast a skypark may give that development a slight edge, she said.
Source: Sunday Times, 27 Jun 2010
Developers of a condominium featuring a skypark hope the feature will prove to be a hit with increasingly demanding buyers.
The skypark is on the top 16th floor of the 361-unit Waterfront Gold in Bedok Reservoir, which is being released this weekend.
Frasers Centrepoint, which is developing the condo jointly with Far East Organization, says it is the first skypark in a private residential project.
The skypark is an 8,000 sq ft observation-cum-exercise deck offering unparalleled views of Bedok Reservoir, the developers said. Units at the condo are selling for $950 psf on average.
As consumers here mature and become more demanding, developers are coming up with more special features to entice them.
While these glitzy extras may not make or break a deal, they do help to enhance a project's appeal.
And in a quieter market, they are all the more important when it comes to attracting buyers, experts said.
'The mass market and mid-tier market have surpassed peak prices. We are going through a consolidation phase, which could last for three, four, five months,' said Cushman & Wakefield managing director Donald Han.
'Buyers shouldn't be expecting too much of a discount though as developers are still in a very strong position and can hold.'
But buyers can expect to see more of these special condo features, experts said.
A recent major suburban launch, The Minton in Lorong Ah Soo, also highlighted its many facilities, including an air-conditioned, indoor badminton hall and a 20m heated pool.
The developer of the 1,145-unit condo recently raised the price slightly to $865 psf from $850 psf last month.
And at Twin Peaks in Grange Road, which could be launched in the early part of next month, all the units will come fully furnished - a first in Singapore.
'We wanted to give something that nobody else has given in Singapore,' said Mr Thio Gim Hock, chief executive of Overseas Union Enterprise. This feature would appeal to investors, who can rent the unit out immediately, he said.
The condo should cost around $2,850 psf on average, sources said.
'Differentiating features are important factors in selling a condo,' said Knight Frank managing director for residential services Peter Ow.
'In today's context, every developer is trying out new ideas and features to distinguish themselves from the competition. Hopefully, such special features will also help them to achieve a premium.'
He added: 'Moving forward, we definitely expect developers to be more innovative in their designs and concepts.'
Colliers International's director for research and advisory, Ms Tay Huey Ying, said Singapore home-buyers have become more demanding in their expectations as standards of public and private housing here rise.
They are also now 'more well-travelled and/or are exposed to diverse living and home concepts through the Internet and media', she said.
This means developers would need to constantly look for ways to improve their offerings to stay ahead of competition, whether it is a bull or a bear market.
'In the former, the developers need differentiators to edge out competition while in the latter, the developers use differentiators, which could also include marketing gimmicks, to stimulate demand,' Ms Tay said.
House-hunter Patricia Han said: 'These extras would already have been factored into the selling price. But if I were to rent out my unit, any extras can be an incentive when I market the condo.'
Ms Tay said Waterfront Gold's skypark is 'but a minor differentiator in the eye of the buyer'.
Location remains key. However, in a competitive market where buyers are flooded with many choices, being the first private condo to boast a skypark may give that development a slight edge, she said.
Source: Sunday Times, 27 Jun 2010
Condos woo buyers with glitzy extras
While special features may not make or break a deal, they do enhance appeal
Developers of a condominium featuring a skypark hope the feature will prove to be a hit with increasingly demanding buyers.
The skypark is on the top 16th floor of the 361-unit Waterfront Gold in Bedok Reservoir, which is being released this weekend.
Frasers Centrepoint, which is developing the condo jointly with Far East Organization, says it is the first skypark in a private residential project.
The skypark is an 8,000 sq ft observation-cum-exercise deck offering unparalleled views of Bedok Reservoir, the developers said. Units at the condo are selling for $950 psf on average.
As consumers here mature and become more demanding, developers are coming up with more special features to entice them.
While these glitzy extras may not make or break a deal, they do help to enhance a project's appeal.
And in a quieter market, they are all the more important when it comes to attracting buyers, experts said.
'The mass market and mid-tier market have surpassed peak prices. We are going through a consolidation phase, which could last for three, four, five months,' said Cushman & Wakefield managing director Donald Han.
'Buyers shouldn't be expecting too much of a discount though as developers are still in a very strong position and can hold.'
But buyers can expect to see more of these special condo features, experts said.
A recent major suburban launch, The Minton in Lorong Ah Soo, also highlighted its many facilities, including an air-conditioned, indoor badminton hall and a 20m heated pool.
The developer of the 1,145-unit condo recently raised the price slightly to $865 psf from $850 psf last month.
And at Twin Peaks in Grange Road, which could be launched in the early part of next month, all the units will come fully furnished - a first in Singapore.
'We wanted to give something that nobody else has given in Singapore,' said Mr Thio Gim Hock, chief executive of Overseas Union Enterprise. This feature would appeal to investors, who can rent the unit out immediately, he said.
The condo should cost around $2,850 psf on average, sources said.
'Differentiating features are important factors in selling a condo,' said Knight Frank managing director for residential services Peter Ow.
'In today's context, every developer is trying out new ideas and features to distinguish themselves from the competition. Hopefully, such special features will also help them to achieve a premium.'
He added: 'Moving forward, we definitely expect developers to be more innovative in their designs and concepts.'
Colliers International's director for research and advisory, Ms Tay Huey Ying, said Singapore home-buyers have become more demanding in their expectations as standards of public and private housing here rise.
They are also now 'more well-travelled and/or are exposed to diverse living and home concepts through the Internet and media', she said.
This means developers would need to constantly look for ways to improve their offerings to stay ahead of competition, whether it is a bull or a bear market.
'In the former, the developers need differentiators to edge out competition while in the latter, the developers use differentiators, which could also include marketing gimmicks, to stimulate demand,' Ms Tay said.
House-hunter Patricia Han said: 'These extras would already have been factored into the selling price. But if I were to rent out my unit, any extras can be an incentive when I market the condo.'
Ms Tay said Waterfront Gold's skypark is 'but a minor differentiator in the eye of the buyer'.
Location remains key. However, in a competitive market where buyers are flooded with many choices, being the first private condo to boast a skypark may give that development a slight edge, she said.
Source: Sunday Times, 27 Jun 2010
Developers of a condominium featuring a skypark hope the feature will prove to be a hit with increasingly demanding buyers.
The skypark is on the top 16th floor of the 361-unit Waterfront Gold in Bedok Reservoir, which is being released this weekend.
Frasers Centrepoint, which is developing the condo jointly with Far East Organization, says it is the first skypark in a private residential project.
The skypark is an 8,000 sq ft observation-cum-exercise deck offering unparalleled views of Bedok Reservoir, the developers said. Units at the condo are selling for $950 psf on average.
As consumers here mature and become more demanding, developers are coming up with more special features to entice them.
While these glitzy extras may not make or break a deal, they do help to enhance a project's appeal.
And in a quieter market, they are all the more important when it comes to attracting buyers, experts said.
'The mass market and mid-tier market have surpassed peak prices. We are going through a consolidation phase, which could last for three, four, five months,' said Cushman & Wakefield managing director Donald Han.
'Buyers shouldn't be expecting too much of a discount though as developers are still in a very strong position and can hold.'
But buyers can expect to see more of these special condo features, experts said.
A recent major suburban launch, The Minton in Lorong Ah Soo, also highlighted its many facilities, including an air-conditioned, indoor badminton hall and a 20m heated pool.
The developer of the 1,145-unit condo recently raised the price slightly to $865 psf from $850 psf last month.
And at Twin Peaks in Grange Road, which could be launched in the early part of next month, all the units will come fully furnished - a first in Singapore.
'We wanted to give something that nobody else has given in Singapore,' said Mr Thio Gim Hock, chief executive of Overseas Union Enterprise. This feature would appeal to investors, who can rent the unit out immediately, he said.
The condo should cost around $2,850 psf on average, sources said.
'Differentiating features are important factors in selling a condo,' said Knight Frank managing director for residential services Peter Ow.
'In today's context, every developer is trying out new ideas and features to distinguish themselves from the competition. Hopefully, such special features will also help them to achieve a premium.'
He added: 'Moving forward, we definitely expect developers to be more innovative in their designs and concepts.'
Colliers International's director for research and advisory, Ms Tay Huey Ying, said Singapore home-buyers have become more demanding in their expectations as standards of public and private housing here rise.
They are also now 'more well-travelled and/or are exposed to diverse living and home concepts through the Internet and media', she said.
This means developers would need to constantly look for ways to improve their offerings to stay ahead of competition, whether it is a bull or a bear market.
'In the former, the developers need differentiators to edge out competition while in the latter, the developers use differentiators, which could also include marketing gimmicks, to stimulate demand,' Ms Tay said.
House-hunter Patricia Han said: 'These extras would already have been factored into the selling price. But if I were to rent out my unit, any extras can be an incentive when I market the condo.'
Ms Tay said Waterfront Gold's skypark is 'but a minor differentiator in the eye of the buyer'.
Location remains key. However, in a competitive market where buyers are flooded with many choices, being the first private condo to boast a skypark may give that development a slight edge, she said.
Source: Sunday Times, 27 Jun 2010
Don't lose the plot over foreign land
Buying land parcels overseas is risky, so investors must do proper due diligence
It sounds like a sure-fire winner - buy cheap land overseas and cash in big time once developers come calling - but big losses can also come with the territory, as many Singaporeans can attest.
The uncertainty and high risks of such investments seem obvious, yet many investors here come a cropper when their investments in overseas land turn sour.
Singapore's consumer watchdog has received 11 complaints this year about firms selling such land and 14 last year. There were only four each in 2008 and 2007.
Landbanking, as the process is called, involves firms buying large plots and subdividing them into smaller parcels, making it easier to sell to investors as they can be priced at affordable levels.
Some plots in Britain can be picked up for as little as $10,000 each.
Landbanking firms tell investors they can buy undeveloped plots, usually rural land overseas, and sell later for a profit. Investors are often told the land is on the outskirts of a city where urban development is likely.
When development plans are drawn up, investors can then sell their plots to developers who are willing to pay higher prices to secure the land.
To make the deal attractive, some landbanking firms promise regular payouts over a fixed period or a buy-back guarantee. Some offer the flexibility of allowing investors to switch their plots to ones that have already received development approval so they can enjoy faster gains.
It looks a winner, yet the pitfalls are plenty.
Recently, the case of 200 investors made headlines when their investments in plots in Britain headed south.
They had bought plots at various times near places like Swindon and Gatwick since 2006. Each plot cost $15,000.
In all, these purchases, which were done through local firm Land International (Far East), amounted to an estimated $6 million.
Initially, the investors received quarterly payouts of 8 per cent a year from 2007. But these dried up when the parent firm of Land International (Far East), Land International, was closed by the British government in 2008 following an insolvency probe.
Investors later learnt that the plots had been zoned as 'green belt' or protected land, on which no development is allowed.
In Singapore earlier this month, 40 disgruntled investors turned up at Speakers' Corner in Hong Lim Park to share their woes on their investments which included landbanking.
Many had invested in Singapore-based investment firm Profitable Group and have yet to see any returns. An unhappy Mr H. Yeo, 35, had invested £13,000 (S$27,000) in 2008 in land in the Philippines through Profitable Group. He claimed he was due to get his returns last year but they have not materialised.
Since late last year, the firm has been on the Monetary Authority of Singapore (MAS) Investor Alert list. The list includes entities that may be conducting activities regulated by MAS without authorisation.
The executive director of the Consumers' Association of Singapore (Case), Mr Seah Seng Choon, warned that buying overseas land is a 'very high risk' activity and consumers should be extremely careful. Simply, if you cannot stomach such high risks, do not get involved.
'No one can be sure of getting back their money in such a venture. It is a very high risk, particularly when the business offering such investment is unknown and has no track records,' he said.
Case has been fielding complaints about landbanking for the past four years but it does not have the authority to deal with them.
Despite the bad publicity, some people have profited from their landbanking investments, usually after a long wait.
For instance, Indonesian investor Ludwina Ismail, 52, made total gains of 14 per cent after buying a half acre (0.2ha) of Canadian land in Calgary from Canadian-based landbanking firm Walton International, in early 2005.
She managed to exit after a two-year wait, but that was because the land she bought for C$33,000 (S$44,000) was a resale deal from an earlier investor who had bought it five years ago.
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As with all investments, landbanking investors must do proper due diligence. Here are some considerations.
1 Risks
These are high as the land may not appreciate in value for a long time. There are no guarantees on how soon developers will buy over the land. For instance, investor Molly Tan, 40, was given an estimate of five years by the landbanking firm but she ended up waiting 10 years before making her exit with some gains. So be prepared to stay invested for a number of years.
The long gestation period means the money invested may be stuck for several years while generating no returns, which makes the investment very illiquid. Investors are also subject to exchange rate movements as the plots are on foreign land and bought with foreign currency.
Bear in mind there is a tax impact as well, as profits are subject to withholding tax of about 25 per cent on a tiered basis. Of course, there is always a risk that the land is never developed. And reselling the land, if possible, may result in losses.
In the event of company closures, consumers may be left with nothing. This was what happened in 2006 when Britain landbanking firm Land Heritage (UK) closed after an investigation. Its 700 investors were not refunded.
A key risk is that the firms soliciting landbanking investments are not regulated here so they do not have to adhere to strict investment rules such as those laid down by the MAS, said Case's Mr Seah.
Besides the lack of regulation on such investments, the absence of a track record is another big hurdle, said Mr Chris Firth, chief executive of wealth management firm dollarDex.
'Retail investors may find it hard to get independent inform-ation, and even if they do, they may not have the expertise to properly assess the opportunity and particularly the risks. If things go wrong, they may not be able to call on regulators,' added Mr Firth.
2 Background checks on the land
Before embarking on such a venture, Case urges consumers to get as much information on the land on offer as possible, such as its condition, leasehold, restriction of use and so on.
'Ask the embassy about the conditions and requirements of foreigners owning the land in their country. Also, check up the relevant laws that apply to ownership of land and find out the taxes or levies that apply to land ownership,' suggested Case's Mr Seah.
Another tip is to find out if the offer for that plot of land is a credible one.
You should also assess the likelihood of the land value rising.
dollarDex's Mr Firth advised investors to find out the mark-up on the offered plots.
For example, a piece of British land without planning permission could fetch as little as £15,000. The same plot with planning permission could be worth £150,000, or sometimes even more.
Small investors may end up paying a price somewhere between these two, yet have a small - or unknown - chance of seeing planning permission granted, he said.
'Potentially, that means a big loss if permission is not granted. Moreover, very small plots of land could be very hard to sell in isolation if collective sales efforts peter out.'
Sometimes, land that has good potential for planning permission may already have a vendor's lien on it.
When a landbanking firm buys the plot, it could come with a condition that the firm must pay some money to the seller if the land is on-sold within a specific number of years.
'Such a lien could wipe out any potential profit for the small investor, depending on the mark-up,' added Mr Firth.
3 Background checks on the firm
Do not let a professional-looking website or a formal-sounding name sway you from authenticating the firm.
If it is foreign or has a foreign parent, ensure it is valid by checking with the embassy to ensure the scheme is not a scam.
Find out the paid-up capital and date of existence of the landbanking firm. There should be a proper contractual agreement that spells out its obligations. One important consideration is the title deeds.
You should also determine if the firm is regulated in the country that it is operating in.
Imagine the worst-case scenario and find out what recourse options are available if you want to exit later. If that happens, what are the applicable laws in the event of disputes?
4 Resolution process
If a dispute arises, the process can be costly.
It may be necessary to engage foreign lawyers to deal with the matter and in some countries, it may take years before a case is resolved.
You should research the credibility of the country's legal processes and the integrity of people involved in the legal process.
Furthermore, as these are overseas land plots, consumers must factor in travelling and accommodation costs to deal with any dispute.
Source: Sunday Times, 27 Jun 2010
It sounds like a sure-fire winner - buy cheap land overseas and cash in big time once developers come calling - but big losses can also come with the territory, as many Singaporeans can attest.
The uncertainty and high risks of such investments seem obvious, yet many investors here come a cropper when their investments in overseas land turn sour.
Singapore's consumer watchdog has received 11 complaints this year about firms selling such land and 14 last year. There were only four each in 2008 and 2007.
Landbanking, as the process is called, involves firms buying large plots and subdividing them into smaller parcels, making it easier to sell to investors as they can be priced at affordable levels.
Some plots in Britain can be picked up for as little as $10,000 each.
Landbanking firms tell investors they can buy undeveloped plots, usually rural land overseas, and sell later for a profit. Investors are often told the land is on the outskirts of a city where urban development is likely.
When development plans are drawn up, investors can then sell their plots to developers who are willing to pay higher prices to secure the land.
To make the deal attractive, some landbanking firms promise regular payouts over a fixed period or a buy-back guarantee. Some offer the flexibility of allowing investors to switch their plots to ones that have already received development approval so they can enjoy faster gains.
It looks a winner, yet the pitfalls are plenty.
Recently, the case of 200 investors made headlines when their investments in plots in Britain headed south.
They had bought plots at various times near places like Swindon and Gatwick since 2006. Each plot cost $15,000.
In all, these purchases, which were done through local firm Land International (Far East), amounted to an estimated $6 million.
Initially, the investors received quarterly payouts of 8 per cent a year from 2007. But these dried up when the parent firm of Land International (Far East), Land International, was closed by the British government in 2008 following an insolvency probe.
Investors later learnt that the plots had been zoned as 'green belt' or protected land, on which no development is allowed.
In Singapore earlier this month, 40 disgruntled investors turned up at Speakers' Corner in Hong Lim Park to share their woes on their investments which included landbanking.
Many had invested in Singapore-based investment firm Profitable Group and have yet to see any returns. An unhappy Mr H. Yeo, 35, had invested £13,000 (S$27,000) in 2008 in land in the Philippines through Profitable Group. He claimed he was due to get his returns last year but they have not materialised.
Since late last year, the firm has been on the Monetary Authority of Singapore (MAS) Investor Alert list. The list includes entities that may be conducting activities regulated by MAS without authorisation.
The executive director of the Consumers' Association of Singapore (Case), Mr Seah Seng Choon, warned that buying overseas land is a 'very high risk' activity and consumers should be extremely careful. Simply, if you cannot stomach such high risks, do not get involved.
'No one can be sure of getting back their money in such a venture. It is a very high risk, particularly when the business offering such investment is unknown and has no track records,' he said.
Case has been fielding complaints about landbanking for the past four years but it does not have the authority to deal with them.
Despite the bad publicity, some people have profited from their landbanking investments, usually after a long wait.
For instance, Indonesian investor Ludwina Ismail, 52, made total gains of 14 per cent after buying a half acre (0.2ha) of Canadian land in Calgary from Canadian-based landbanking firm Walton International, in early 2005.
She managed to exit after a two-year wait, but that was because the land she bought for C$33,000 (S$44,000) was a resale deal from an earlier investor who had bought it five years ago.
----------------------------------------------
As with all investments, landbanking investors must do proper due diligence. Here are some considerations.
1 Risks
These are high as the land may not appreciate in value for a long time. There are no guarantees on how soon developers will buy over the land. For instance, investor Molly Tan, 40, was given an estimate of five years by the landbanking firm but she ended up waiting 10 years before making her exit with some gains. So be prepared to stay invested for a number of years.
The long gestation period means the money invested may be stuck for several years while generating no returns, which makes the investment very illiquid. Investors are also subject to exchange rate movements as the plots are on foreign land and bought with foreign currency.
Bear in mind there is a tax impact as well, as profits are subject to withholding tax of about 25 per cent on a tiered basis. Of course, there is always a risk that the land is never developed. And reselling the land, if possible, may result in losses.
In the event of company closures, consumers may be left with nothing. This was what happened in 2006 when Britain landbanking firm Land Heritage (UK) closed after an investigation. Its 700 investors were not refunded.
A key risk is that the firms soliciting landbanking investments are not regulated here so they do not have to adhere to strict investment rules such as those laid down by the MAS, said Case's Mr Seah.
Besides the lack of regulation on such investments, the absence of a track record is another big hurdle, said Mr Chris Firth, chief executive of wealth management firm dollarDex.
'Retail investors may find it hard to get independent inform-ation, and even if they do, they may not have the expertise to properly assess the opportunity and particularly the risks. If things go wrong, they may not be able to call on regulators,' added Mr Firth.
2 Background checks on the land
Before embarking on such a venture, Case urges consumers to get as much information on the land on offer as possible, such as its condition, leasehold, restriction of use and so on.
'Ask the embassy about the conditions and requirements of foreigners owning the land in their country. Also, check up the relevant laws that apply to ownership of land and find out the taxes or levies that apply to land ownership,' suggested Case's Mr Seah.
Another tip is to find out if the offer for that plot of land is a credible one.
You should also assess the likelihood of the land value rising.
dollarDex's Mr Firth advised investors to find out the mark-up on the offered plots.
For example, a piece of British land without planning permission could fetch as little as £15,000. The same plot with planning permission could be worth £150,000, or sometimes even more.
Small investors may end up paying a price somewhere between these two, yet have a small - or unknown - chance of seeing planning permission granted, he said.
'Potentially, that means a big loss if permission is not granted. Moreover, very small plots of land could be very hard to sell in isolation if collective sales efforts peter out.'
Sometimes, land that has good potential for planning permission may already have a vendor's lien on it.
When a landbanking firm buys the plot, it could come with a condition that the firm must pay some money to the seller if the land is on-sold within a specific number of years.
'Such a lien could wipe out any potential profit for the small investor, depending on the mark-up,' added Mr Firth.
3 Background checks on the firm
Do not let a professional-looking website or a formal-sounding name sway you from authenticating the firm.
If it is foreign or has a foreign parent, ensure it is valid by checking with the embassy to ensure the scheme is not a scam.
Find out the paid-up capital and date of existence of the landbanking firm. There should be a proper contractual agreement that spells out its obligations. One important consideration is the title deeds.
You should also determine if the firm is regulated in the country that it is operating in.
Imagine the worst-case scenario and find out what recourse options are available if you want to exit later. If that happens, what are the applicable laws in the event of disputes?
4 Resolution process
If a dispute arises, the process can be costly.
It may be necessary to engage foreign lawyers to deal with the matter and in some countries, it may take years before a case is resolved.
You should research the credibility of the country's legal processes and the integrity of people involved in the legal process.
Furthermore, as these are overseas land plots, consumers must factor in travelling and accommodation costs to deal with any dispute.
Source: Sunday Times, 27 Jun 2010
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