CPF : Singapore Budget 2010 - CPF Changes‏

New CPF Changes in 2010

Minister for Manpower Gan Kim Yong announced the following measures in his speech at the Committee of Supply debate on 11 March 2010 as part of the government’s continuing efforts to improve the CPF system.

- CPF LIFE
- CPF Investment Scheme-Special Account Scheme
- Minimum Sum Scheme
- CPF Nomination
- Special Needs Savings Scheme
- Workfare Income Supplement Scheme (WIS)
- Other CPF-Related Changes


Facilitating Automatic Inclusion in CPF LIFE
From 2013, CPF members born in 1958 or later with at least $40,000 in their Retirement Account (RA) at age 55 will be automatically included in CPF LIFE. Those with less than $40,000 will not be automatically included at 551. Such members may subsequently have significant RA inflows between 55 and DDA2. To help these members participate in CPF LIFE and enjoy an income for as long as they live, such members will be automatically included at DDA if they have $60,0003 in their RA then.

1 However, they could opt to join the scheme if they wish to.
2 Age at which members are allowed to withdraw their CPF savings in the form of monthly payouts. The DDA for members who turned 55 from 1999 to 2004 is 62. This has been gradually increased to 65 for those who turned 55 in 2009.
3 This is equivalent in value to $40,000 at age 55, compounded at 4% over 10 years.


Raising the Threshold for CPF Investment Scheme-Special Account Investment
From 1 July 2010, the first $40,000 of members’ Special Account balances will no longer be allowed to be used for investments. Given the higher risk-free interest rate on the Special Account, it is better to be more conservative than to subject these savings to the uncertainty of CPFIS returns.

There is no change to the requirement for members to set aside $20,000 in the Ordinary Account before they can invest their Ordinary Account monies.


Allowing Payout Adjustments for Minimum Sum Scheme
Members can now apply for an upward adjustment in their CPF monthly income provided that their adjusted payouts can last at least 20 years from their Draw Down Age, or at least another 5 years from the time of application, whichever ends later (See Example). This will be implemented by July 2010.

This option is not limited to only MS top-up recipients, but also for older members with large balances in their Retirement Accounts.





Refining CPF Nomination Rules
In response to public feedback from members that they would like to use their CPF monies to better provide for the retirement and healthcare adequacies of their nominees, members will be allowed to transfer their CPF monies to their nominees’ CPF accounts upon their demise.

The change to the CPF nomination system will be effective from January 2011. More details will be released at a later date.


Special Needs Savings Scheme
Ministry of Community Development, Youth & Sports (MCYS) is working with Ministry of Manpower and CPF Board on a new CPF scheme called the Special Needs Savings Scheme.

Parents would be able to nominate their disabled children to receive monthly disbursements from the parents’ CPF savings after the parents have passed on. Parents can nominate any number of eligible children and determine the level of monthly payouts to be paid, subject to the floor payout of $250, to each child upon the parents’ demise. The disabled who require assistance in at least one activity of daily living4 and children in Special Education schools would be eligible. The details of the scheme will be announced later when implementation details have been finalised.

4 There are 6 ADLs: i) washing; ii) dressing; iii) feeding; iv) toileting; v) mobility; and vi) transferring.

MCYS Media Release
Special Needs Savings Scheme (Centre for Enabled Living)



Enhancements to Workfare Income Supplement Scheme (WIS)
The WIS Scheme aims to supplement the wages and CPF savings of Singapore workers aged 35 and above. It will be enhanced and will apply to work done from 1 January 2010.

The key enhancements are that the WIS qualifying average monthly income will be increased to $1,700, up from $1,500 previously; and the maximum WIS payment will be increased from $2,400 to $2,800 a year.

Also, the first six-month work period will now be assessed independently of the end-of-year annual assessment. Once a recipient is assessed to be eligible for a mid-year WIS payment, that payment received will be the final amount.

WIS Factsheet


Other CPF-Related Changes

Refinement to the Public Assistance Scheme
Presently, needy Singaporeans who are unable to work owing to old age, illness or disability and have no means of subsistence and have little or no family support can seek help under the Public Assistance (PA) scheme.

From 1 July 2010, CPF members who meet all other PA criteria, but who are receiving a small stream of monthly CPF payouts (i.e. lower than the PA allowance for a 1-person household i.e. $360 per month), under the Minimum Sum Scheme or CPF LIFE, can be considered for the PA scheme.

The Community Development Councils (CDCs) will assess each applicant’s eligibility based on the PA criteria. If eligible, they will be given a cash grant that takes into account the CPF payouts they are already receiving. Needy Singaporeans may approach their CDCs if they wish to apply for the PA scheme.

Public Assistance Scheme

ST : Indemnity insurance for real estate agencies

Mar 17, 2010

Indemnity insurance for real estate agencies

FIRMS registered with the Singapore Accredited Estate Agencies (SAEA) will need to have professional indemnity insurance before they can renew their accreditation.

A minimum limit of indemnity of $500,000 is recommended under the new rule that comes into effect on April 1.

The move by the SAEA is to make consumers more confident when they engage estate agents.

All commission agreements and exclusive appointments are now signed between the consumer and the estate agency through the agent.

Professional indemnity insurance, which is regarded as a form of risk management in professional business practice, offers protection in case of negligence.

The SAEA has worked with AVA Insurance Brokers and Royal & Sun Alliance Insurance to devise options tailored for small and medium-sized estate agencies, which make up 70 per cent of the 400 agencies under SAEA. There are about 1,700 estate agencies in Singapore. Most of them are boutique-size firms.

SAEA chief executive Tan Tee Khoon said: 'The mega estate agencies accredited by the SAEA already have existing cover at competitive rates. However, the boutique-size firms may not have the financial muscle to do the same and yet they too need it. The SAEA has negotiated what I believe to be the best available deal for these accredited real estate agencies.'

More information will be sent to the accredited agencies and a seminar will be held on March 25 to address the issue.

Accreditation by the SAEA is on a voluntary basis.

MARISSA LEE

TODAY ONLINE : Compulsory indemnity cover for estate agents to boost confidence

Compulsory indemnity cover for estate agents to boost confidence

05:55 AM Mar 17, 2010

SINGAPORE - If your real estate agent lies, gives you poor advice or fails to do due diligence, you will soon have a greater degree of assurance of recovering at least part of your losses.

From next month, agents accredited with the Singapore Accredited Estate Agencies (SAEA) must have valid professional indemnity (PI) insurance in order to renew their accreditation status. A minimum indemnity limit of $500,000 is recommended.

The move, besides helping companies to manage their risks, is also to boost public confidence.

"Consumers who approach PI-covered agencies feel safer, that this agency is not a fly-by-night company. And in the event I need legal recourse that would lead to financial compensation, I would be able to get it," said SAEA chief executive Tan Tee Khoon.

He noted how, in some cases, the plaintiff may find himself holding just a paper judgment when the other party cannot cough up the money.

Why the change now? Compulsory PI could be one aspect of a proposed regulatory framework for the industry that authorities are now looking at, said Dr Tan, and SAEA's new requirement for its members is in anticipation of just such a development.

One example of when PI comes in useful for the client: Some years ago, a buyer of a property was keen on converting it for a different business purpose.

His agent failed to find out that the property could not be used for other things, and ended up using his PI coverage to pay the penalty for forfeiting the purchase.

This instance was cited by Mr Michael Chew, chief executive of AVA Insurance Brokers, which was one insurer - the other being Royal & Sun Alliance Insurance - that SAEA worked with to offer PI options tailored especially for smaller real estate agencies.

Big estate agencies here already have indemnity cover, but hundreds of "boutique sized" firms lack such coverage due to their limited means, noted Dr Tan.

The proposed PI premiums AVA has worked out with SAEA, Mr Chew estimates, are about half the cost of coverage smaller estate agents are currently paying. More information will be given to SAEA's 400 accredited estate agencies.

In Singapore overall, Dr Tan reckons there are some 1,700 estate agencies, about 70 per cent of which have less than 50 staff - and of this group, four in 10 do not have PI coverage.

He believes making smaller agencies take up PI won't jack up costs for consumers, "as the industry is competitive". - REPORTING BY NEO CHAI CHIN

Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved

ST : Tampines site gets top bid of $302m

Mar 17, 2010

Tampines site gets top bid of $302m

Plot which attracted just one bid 18 months ago saw 8 bidders this time

By Joyce Teo

A RESIDENTIAL site facing Bedok Reservoir that failed to be sold 18 months ago after attracting only one bid of $84.6 million is now sought after by eight developers, with one offering $302 million.

The Tampines site was a victim of the financial meltdown when it closed for tender in August 2008, but the property market rebound has brought it back into favour.

Sim Lian Land lodged the highest bid for the 99-year leasehold plot, which would be suitable for mass market housing - the property industry's hottest sector these days.

Sim Lian's offer - $302 million or $420.90 per sq ft per plot ratio - topped seven others for the land at the junction of Tampines Avenue 1 and Avenue 10.

The huge rebound in price follows a similar tender last month when a site at the junction of Choa Chu Kang and Woodlands roads above Ten Mile Junction attracted a top bid of $164 million, yet in 2008 it drew a top bid of $61 million and was therefore not sold.

The Sim Lian offer was above the $300 to $400 pricing tipped by some experts but within the $410 to $470 psf ppr range forecast by Ngee Ann Polytechnic lecturer Nicholas Mak.

The second-highest bid from a venture between Far East Organization and Frasers Centrepoint came in just 4.3 per cent lower at $402.80 psf ppr.

Other bidders included MCL Land, Allgreen Properties and GuocoLand, according to the Urban Redevelopment Authority yesterday.

A unit of CapitaLand Residential was in seventh place with a bid of $179.4 million or $250 psf ppr, while Boon Keng Development was last with a bid of $234.20 psf ppr.

The tender is 'another demonstration of developers' interest in the mass market segment', said Mr Joseph Tan, CBRE's executive director, residential. Of the eight bids submitted, the first six were very close to one another, he noted.

DTZ's South-east Asia research head, Ms Chua Chor Hoon, concurred, saying the results showed that developers were still very eager to replenish their land banks and optimistic about the market outlook.

Sim Lian Group executive director Diana Kuik told The Straits Times: 'Our bid is competitive but not very aggressive. Land prices in general have gone up.'

Also, the site is in a mature estate and it offers a nice living environment, she said.

'We are looking to build 600 to 650 units with a range of sizes, from small two-bedroom units to four-bedroom units as well as penthouses,' she added.

CBRE estimates a break-even level of around $700 psf, based on the top bid.

It pointed out that caveats lodged for sales in new projects in the Bedok Reservoir area, such as Waterfront Key and Waterfront Waves, have ranged from $700 psf to $850 psf in the past four to five months.

'When the new project is ready for launch in six to eight months' time, we would expect it to be launched within the same price range or higher, subject to market conditions,' said Mr Tan.

Sim Lian as a contractor would be able to manage its development costs and so may be able to sell units for around $800 psf, based on its bid, said Ms Chua.

The Tampines site, which has a maximum gross floor area of 66,655 sq m, is the fourth residential site launched for sale on the confirmed list this year.

Confirmed list sites are tendered out on scheduled dates, without the need for developers to indicate interest.

The Tampines plot is next to The Tropica condominium and about five to 10 minutes' drive from Tampines Central and Tampines MRT station.

Only one firm, Boon Keng Development, bothered to bid for the site when it was first offered for sale in August 2008.

joyceteo@sph.com.sg



Sim Lian Group's executive director Diana Kuik says the site is in a mature estate and offers a nice living environment. -- ST PHOTO: DESMOND WEE

ST : PR quota reached in some HDB areas

Mar 17, 2010

PR quota reached in some HDB areas

Flat buyers have to widen search or be willing to pay more

By Esther Teo

PERMANENT residents looking to buy an HDB flat may have to widen their search beyond popular areas as some parts of the island have already reached the limits set out in the new quota system.

PRs will not be able to buy flats in certain areas in Jurong West, Choa Chu Kang, Sembawang, Sengkang or Bukit Batok unless they are prepared to pay a premium over the asking price in the hope of enticing other PRs to sell.

The areas have long been popular with PRs but some neighbourhoods and blocks are at the limit outlined by the Singapore Permanent Resident (SPR) quota introduced earlier this month.

It sets a cap for PR households of 8 per cent in each block and 5 per cent within each neighbourhood to prevent enclaves of foreigners forming in the heartlands.

The HDB's website showed that certain addresses in these areas have reached their PR quota. The addresses include Admiralty Drive and Canberra Road in Sembawang, Anchorvale Link in Sengkang, Choa Chu Kang Avenue 5, Bukit Batok East Avenue 3, Woodlands Avenue 6 and Jurong West Central 1.

A non-Malaysian PR, for example, is eligible to buy a flat from any seller in Clementi Avenue 6. But he can buy only from a fellow non-Malaysian PR at Bukit Batok East Avenue 3 because the quota for the proportion of non-Malaysian PRs in that area has already been reached.

In some blocks, the market is even tighter after throwing the ethnic quota into the mix. For example, if an Indian non-Malaysian PR wants to buy a unit at 313C Anchorvale Road, he would have to buy a unit from an Indian non-Malaysian PR seller to maintain the balance.

PRs comprise about 14 per cent of the population in HDB flats, according to 2009 figures.

Property experts say the quota system might cause greater disparities in prices, not just among neighbourhoods, but within a block as well.

The Ethnic Integration Policy - which sets ratios for ethnic groups to ensure a balanced mix in housing estates - has also had a similar effect.

PropNex chief executive Mohamed Ismail said that PRs selling HDB flats in neighbourhoods or blocks that have reached their quota will be able to quote a higher price when selling to other PRs.

'Assuming PRs can afford it, they might be willing to pay for a flat that might be nearer to good schools or the MRT, or to get a good view. But if the quota is reached they won't be able to buy unless they offer a higher price.'

However, this effect is not expected to be big enough to affect general market trends, said Chesterton Suntec International's research and consultancy director, Mr Colin Tan. 'Some people will be willing to pay more to live with those from their country, but how much more is very subjective,' he said.

Property agents say being near others of the same nationality is not a major pull factor for PRs. Cost and distance from their workplace weigh more heavily.

PRs from Myanmar like Jurong West because they work in nearby shipyards, offices and factories while Filipinos choose Jurong West, Simei and Bukit Panjang for the relatively cheaper prices.

PRs from Malaysia and China are scattered islandwide. Their key considerations are mainly cost and proximity to work, transport options like an MRT station or bus interchange and facilities such as schools and supermarkets.

Mr Jeffrey Hong, HSR International Realtors' executive director of agency, said some PRs might consider moving elsewhere if the asking price over valuation is too high.

The Jurong estate, for example, has seen a 15 per cent rise in HDB prices over the past nine months, he said.

Chinese PRs might move from Jurong to areas like Yishun and Woodlands while Indian PRs might move from Serangoon to nearby Hougang and Lorong Ah Soo if quotas were soon to be reached.

'These places are less pricey and also not that far from their ideal location,' Mr Hong said.

esthert@sph.com.sg



PR quota reached in some HDB areas

Flat buyers have to widen search or be willing to pay more

By Esther Teo



Block 693 in Jurong West Central 1 has already reached the PR household quota. Other areas popular with PRs include neighbourhoods in Choa Chu Kang, Sembawang, Sengkang and Bukit Batok. -- ST PHOTO: SAMUEL HE

ST : 828 new flats for Sengkang, Sembawang

Mar 17, 2010

828 new flats for Sengkang, Sembawang

Build-to-order projects launched with 126 two-room units for poor

By Esther Teo

THE Housing Board has launched two build-to-order (BTO) projects that will deliver 828 new flats to the market.

The developments - Fernvale Ridge in Sengkang and Sembawang RiverLodge in Sembawang - comprise 266 three-room, 436 four-room and 126 five-room units.

Another 126 two-room flats in Sembawang RiverLodge will not be offered for sale. They will be set aside for lower-income families at a later date, said the HDB yesterday.

This is the first time the HDB has set aside flats. It said that two-room flats generally received fewer applications in BTO launches but they were central in helping families in financial difficulties get suitable housing.

The low-income group was placed in the spotlight recently during this month's Budget debate with several MPs asking whether this group had inadvertently been left out in the pursuit of growth and if substantial government support had been provided for them.

Yesterday's launch is part of a broader HDB plan to offer at least 12,000 new flats this year. So far 3,653 flats have been offered this quarter with a further 1,200 BTO units to be launched in Punggol next month. Future launches have been earmarked for estates such as Yishun and Woodlands. Construction on BTO projects is triggered once a certain level of sales has been achieved.

Sembawang RiverLodge comprises 86 three-roomers and 220 four-roomers and will be built along Sembawang Drive. Fernvale Ridge, bounded by Sengkang West Way and Fernvale Link, will offer 180 three-room units, 216 four-roomers and 126 five-room units.

Three-roomers of 65 sq m at Sembawang RiverLodge are priced between $128,000 and $166,000 while those at Fernvale Ridge will go for between $128,000 and $171,000.

Four-room flats of 90 sq m in Sembawang RiverLodge are going for between $212,000 and $268,000 while those at Fernvale Ridge will cost $216,000 to $271,000.

Five-roomers of between 110 sq m and 113 sq m in Fernvale Ridge in Sengkang will sell for $281,000 to $352,000.

PropNex chief executive Mohamed Ismail said the developments will be huge hits as the number of units offered this time around is only about half the 1,534 units offered during last month's BTO, even as buyer demand remains strong.

He expects both projects to be oversubscribed by at least eight times given their 'very attractive pricing' and close proximity to schools, a key selling point for young couples with children on the horizon.

'Recent BTOs have offered studio apartments which do not make much sense to a young couple who are looking to start a family, as they will be locked into the BTO flat for a further five years after collecting their keys,' he added.

The HDB said that this year's BTO supply will be supplemented by flats under the Design, Build and Sell Scheme (DBSS) as well as executive condominiums (ECs) to cater for higher-income buyers.

Besides the two EC sites offered for sale in January, the HDB will tender out another land parcel in Yishun Avenue 11 under the DBSS for a potential yield of 700 flats by next month. Applications for the new BTO flats can be made online at www.hdb.gov.sg until March 29.

esthert@sph.com.sg



An artist's impression of Fernvale Ridge in Sengkang. The development will consist of three-, four- and five-room flats. -- PHOTO: HOUSING AND DEVELOPMENT BOARD

BT : Lian Beng wins $78m Far East condo contract

Business Times - 17 Mar 2010

Lian Beng wins $78m Far East condo contract

CONSTRUCTION player Lian Beng Group has won a $78 million contract from Far East Group to build Centro Residences, with completion expected by January 2013.

The deal - the second in two weeks for Lian Beng - is for a 34-storey residential tower, multi-storey carpark, clubhouse, swimming pool, playground and ancillary facilities at Far East's condominium development opposite Ang Mo Kio MRT Station. Work is expected to start this month.

Just last week, Lian Beng said it would be building a condominium at Dakota Crescent for $144 million. Taken together, the two contracts will add $222 million to the group's order book, lifting it to $820 million.

'As a group, we have been fairly successful in leveraging our internal resources to provide more value-added activities for our customers,' said managing director Ong Pang Aik. 'We are delighted to be able to work with Far East Group on another of its distinctive projects.'

Lian Beng enjoys good control over some key cost components - through ownership of its equipment fleet and ready-mix concrete facilities, in-house civil engineering expertise and an accredited training centre in Bangladesh.

As Singapore's construction sector continues to see the return of previously deferred public and private projects, Lian Beng believes its experience of handling major projects should place it in a good position.

The group holds A1 accreditation from the Building and Construction Authority (BCA), which allows it to tender for general building contracts of unlimited value.

Lian Beng shares closed unchanged at 29.5 cents yesterday.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Low-interest carrots to tempt home buyers

Business Times - 17 Mar 2010

Low-interest carrots to tempt home buyers

Latest home-loan skirmish also sees banks speeding up their approvals

By GENEVIEVE CUA

(SINGAPORE) A skirmish of sorts has broken out on the home loans front with banks pushing down their interest rates a notch or two over the past week or so. The first volley was fired by DBS Bank and the others have responded.

This is welcome news for home owners and investors who are looking to re-price or refinance their home loans. The rates also provide a positive backdrop to the upturn in the property market. But advisers are telling clients to be prudent and watch their debt servicing ratios.

To date, it appears that Maybank is offering the most attractive loan rates in terms of variable rate loans - and not just for the first 'honeymoon' year. Maybank's package, which is based on an internal board rate, starts from 1.18 per cent for the first year and edges up to 2.28 per cent in the third year.

For those who prefer a more transparent benchmark rate - typically Sibor (Singapore interbank offered rate) or SOR (Singapore swap offer rate) - the spread over the benchmarks has plunged to 0.5 per cent. DBS uses Sibor and OCBC uses SOR.

As always, there is no free lunch. Lower rates usually come with shorter lock-in periods. Borrowers who want certainty in the rate they pay over a longer period should be prepared to pay more and be locked in for two to three years.

The big question is the direction of interest rates. The widespread expectation among home owners is that rates will head up at some point in the next year or two. Rates are currently close to their all-time lows over 10 years. Between March 2000 and 2009, the lowest points for Sibor and SOR were 0.56 and 0.54 per cent, respectively, in 2003. Today Sibor and SOR are not much higher at 0.66 and 0.42 per cent, respectively.

Alvin Liew, economist at Standard Chartered Bank, says the 3 month Sibor rate could stay below one per cent over the next two years, in line with the bank's expectations for USD Libor.

'Moderate loan demand and ample SGD liquidity will also help to keep rates low. While we believe there is a possibility that the Fed would increase further the discount rate spread over the Federal Funds Target Rate (FFTR), this should be viewed as a continuation of financial market normalisation, and not signalling any change in the FFTR until late 2011.'

OCBC's head of treasury research and strategy Selena Ling says any upward rate movement is likely to be 'quite gradual'. 'The liquidity story is still intact, and none of the central banks are really talking about aggressive tightening.'

Sibor reflects the interest rate that a bank charges another for the excess SGD it does not need. It is influenced by US interest rates and domestic loan demand, says Mr Liew.

SOR, on the other hand, includes bank funding costs. It is typically slightly higher than Sibor; but the last few months have seen SOR fall below Sibor. While most banks peg their benchmark rates to 3 or 12 month rates, Citi is even giving customers a choice of one month Sibor.

Mortgage adviser Patrick Tan of Morgan Mortgage International is advising home owners not to leap too quickly into a long fixed rate contract as the differential in servicing costs between a floating and fixed package can be substantial. 'Even if the variable Sibor or SOR rate does move up, it will not move up too much or too quickly unless we see an inflationary scenario in our economy.'

Fixed rate packages start at about 1.25 per cent for Stanchart, but only for one year. The second year moves to a Sibor-plus rate. OCBC and Citi's two-year fixed rate are currently at 1.88 per cent per annum, with a two-year lock-in.

DBS says its fixed rate packages remain 'very popular' with about 60 per cent of customers opting for them. Says a spokesman: 'The response is not surprising as they were designed specifically to give home owners both the certainty in repayments over three years, and the flexibility to make partial repayments. The flexibility is usually not found in fixed rate packages.'

Dennis Khoo, Stanchart's general manager (retail banking products) says: 'We continue to see a balanced demand for both fixed and floating rate (packages).'

Citi said it continues to offer an interest offset feature where deposits in the offset account earn an interest which can be offset by up to 70 per cent against the loan rate. Says Vibha Coburn, Citi business director for secured finance: 'Our packages are tailored to our customers' needs... and we advise customers to take a long term perspective when planning their home loans, rather than go for the lowest price points.

Meanwhile, banks have also speeded up loan approvals. DBS says more than 50 per cent of loan clients get their loans approved with an offer letter within the same day.

Stanchart says it offers 'approval in principle' within 15 minutes at showflats, which it says is a first. A spokesman says: 'This way customers know how much they can afford to borrow without over-leveraging.' In-principle approval is based on basic information such as monthly ncome and other financial commitments. Final approval is subject to necessary documentation.

Providend's head of financial planning Eddy Cheong is advising clients to follow the prudent path. 'For a start, do your budgeting and know your limits. Don't assume interest rates will stay this low. Make sure you can still afford the loan if interest rates go up to 3 to 4 per cent.' The annual debt repayment over annual salary ratio should ideally be less than 35 per cent. Anything above 45 per cent is seen as excessive, he says.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : S'pore falls sharply in global ranking of industrial rents

Business Times - 17 Mar 2010

S'pore falls sharply in global ranking of industrial rents

By EMILYN YAP

(SINGAPORE) It became much cheaper for industries to rent a space in Singapore last year than in cities such as Tokyo, Hong Kong or Sydney.

In Cushman & Wakefield's global ranking of industrial space occupancy cost, Singapore fell sharply to 18th from fifth place in the previous year. Industrial rents on the island had slipped more than in several other cities as demand for space from the trade and manufacturing sectors weakened from the downturn.

According to the property consultancy, the annual industrial occupancy cost here was 88.48 euros per square metre (S$169 psm) last year. Rents were down about 16 per cent year-on-year.

The drop 'places Singapore in a more favourable position to attract new demands with its greater cost competitiveness and availability of quality space,' said Cushman & Wakefield Singapore's managing director Donald Han. Many other regions in the world also suffered drops in industrial rents. Cushman & Wakefield noted that globally, rents fell by an average of 5.5 per cent in 2009.

Nonetheless, industrial rents in London's Heathrow stayed relatively constant and the area kept its position on top of the list with the most expensive industrial space. The occupancy cost there was 200.28 euro psm per year.

In second place was Tokyo, with an annual cost of 151.73 euro psm. Hong Kong rose six spots to third on the table, with an annual cost of 145.89 euro psm.

Apart from Tokyo and Hong Kong, the only other Asia-Pacific city to make it to the top ten was Sydney, where the annual occupancy cost was 92.83 euro psm.

As global economic conditions stabilise, Cushman & Wakefield expects to see industrial rents increase towards the end of this year, 'the extent of which will be driven by the speed in recovery of global export activity'.

But Singapore may not see rents rise until the second half at the earliest, the consultancy said.

Colliers International industrial director Tan Boon Leong shared similar views - he believes industrial rents here may increase sometime in the second half.

He has seen rental activity pick up in the last few months, but that mainly involved companies moving to other premises, he said. The emergence of new demand for space would give an indication of rents firming up, he added.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : HDB offers 828 new BTO flats

Business Times - 17 Mar 2010

HDB offers 828 new BTO flats

Projects in Sengkang and Sembawang may see big demand

By EMILYN YAP

THE Housing and Development Board (HDB) is offering 828 flats in Sengkang and Sembawang through two new build-to-order (BTO) projects.

These are the first BTO projects to be launched after the government adjusted some public housing policies early this month.

HDB is gauging interest in the 522-unit Fernvale Ridge in Sengkang, and the 306-unit Sembawang RiverLodge. Fernvale Ridge, bounded by Sengkang West Way and Fernvale Link, will be near the Fernvale, Layar and Thanggam LRT stations. There will be 180 three-room flats, 216 four-room flats and 126 five-room flats.

The selling price for a five-roomer will range from $281,000 to $352,000. According to HDB, the price of a comparable five-room resale flat in the vicinity is $415,000 to $461,000.

The other BTO project, Sembawang RiverLodge, is at Sembawang Drive. The nearest MRT station is at Sembawang, where Sun Plaza is also located.

Of the 306 units available, 86 will be three-roomers and 220 will be four-roomers.

HDB added that the project is designed to house another 126 two-room flats, but it will set these aside 'to meet the housing needs of lower income families at a later date'.

A four-room flat at Sembawang RiverLodge will cost $212,000 to $268,000. The price of a comparable resale four-roomer nearby is $275,000 to $350,000.

PropNex CEO Mohamed Ismail expects both BTO projects to be popular and they could each be oversubscribed by at least eight times. One reason is because the sites will have three, four, or five-room flats - not studio apartments - which are suitable for young couples starting a family, he said.

Sembawang RiverLodge could stand out, he said. This is because residents will get 'a taste of waterfront living' with Sungei Sembawang nearby and the estate will have amenities such as a supermarket.

Applications for the new flats will close on March 29. With these two projects, HDB would have offered 3,653 new BTO flats in the first three months of the year. It plans to release 1,200 BTO flats in Punggol next month.

First-timer households comprising a Singapore citizen and permanent resident applying for flats will have to pay a $10,000 premium on top of HDB's selling price. The $10,000 will go back to them if the PR family member becomes a citizen, or if the couple has a child who is a citizen.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Sim Lian's $302m bid is tops for Tampines site

Business Times - 17 Mar 2010

Sim Lian's $302m bid is tops for Tampines site

99-year plot may yield 600 units; consultants describe bids as sensible

By UMA SHANKARI

SIM Lian Land has emerged as the top bidder for a closely contested land parcel in Tampines.

The developer led the field that included familiar names such as CapitaLand, Far East Organization, Frasers Centrepoint and MCL Land in a state land tender as demand for residential land continues to hold strong.

Sim Lian bid $302 million for the 99-year leasehold site at the junction of Tampines Avenue 1 and Avenue 10, which works out to $421 per square foot per plot ratio (psf ppr).

Analysts had previously said that the site could go for anything between $300 and $460 psf ppr.

The next highest bid of $289 million - just 4.3 per cent under Sim Lian's - was put in jointly by Far East Organization and Frasers Centrepoint. Their bid works out to $403 psf ppr.

The site has a maximum gross floor area of 717,500 sq ft and can yield about 600 housing units. It is the biggest of the eight residential sites up for sale in the first half of this year.

'The tender for the condominium site at Tampines Avenue 1 is another demonstration of developers' interest in the mass-market segment,' said CB Richard Ellis executive director for residential Joseph Tan. 'Of the eight bids submitted, the first six bids were very close to each other.'

One developer BT spoke to expressed relief that all the bids were 'sensible', and the 'let's get it at all costs' attitude from developers is beginning to wear off after the government said that it would release more land sites in the second half of the year.

Based on the top bid of $421 psf ppr, the new project will break even at around $700 psf, said CBRE's Mr Tan.

Caveats lodged for transactions in new projects in the Bedok Reservoir area (such as Waterfront Key and Waterfront Waves) ranged from $700 psf to $850 psf in the last 4-5 months. When the new project is ready for launch in 6-8 months, it could be priced within the same range or even higher, he added.

Donald Han, managing director of Cushman & Wakefield, said that homes on the site could go for about $800 psf. He factored in construction cost of $300-$320 psf.

'Sim Lian is also a contractor so that means they have a better control over the construction cost,' said Mr Han.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Healthway to open $40m specialist centre

Business Times - 17 Mar 2010

Healthway to open $40m specialist centre

TripleOne Somerset facility's first phase to be ready in March

By KAREN NG

HEALTHWAY Medical will open a specialist centre at TripleOne Somerset.

The project, which is estimated to cost $40 million, will be completed in several stages over three years. The first phase, costing $2 million, will be ready later this month.

The entire Healthway Medical Centre (HMC) will occupy seven floors, or about 150,000 sq ft, of TripleOne Somerset.

Plastic surgeons, dentists and dermatologists will be housed in the first phase of the centre, located on level two of TripleOne.

The focus on aesthetics and plastic surgical procedures is aimed at anchoring Healthway's position as a leading provider of medical aesthetics.

In later stages, other specialist services will be introduced at HMC. To provide the best services, Healthway will join forces with local and overseas institutions to bring in other practices and therapies. The number of doctors in the centre is expected to exceed 200.

HMC managing director Wong Weng Hong said: 'Many patients in Singapore and around the region are looking for good medical care extended by a reputable and reliable group. We believe this project will address this growing demand.'

The management believes patients and physicians can be linked for consultation and treatment via tele-medical connections with Healthway's centres in China and other countries in the region.

Dr Wong said: 'Our centres in Singapore and China will be linked to HMC through leading-edge tele-medicine technology that will enable doctors and patients to connect effectively across vast distances.'

As most of the costs will cover renovation and equipment, funding if any will be predominantly from asset-based lending from banks - such as hire-purchase and term loans, a source said.

The establishment of HMC is not expected to have any material effect on the net tangible assets and earnings per share of Healthway for the financial year ending Dec 31, 2010.

Yesterday, Healthway shares closed one cent lower at 17 cents.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

CNA : Former Alkaff Mansion on tender for F&B, art or spa facilities

Former Alkaff Mansion on tender for F&B, art or spa facilities
By Ryan Huang | Posted: 16 March 2010 1038 hrs

SINGAPORE : The Singapore Land Authority has put up the former Alkaff Mansion for tender.

The site near Mount Faber can be used as a restaurant, art gallery, spa or museum.

The successful tenderer can lease the site for an initial three years, with an option to extend for another two terms of three years.

But analysts said that developing the site into a success will be challenging.

The former Alkaff Mansion appears in a state of disrepair now, after several of years of disuse.

In its heydays, it was a fine-dining restaurant and choice location for weddings.

Now, authorities are looking to spruce up the conservation site at Telok Blangah Green.

The tender seeks to get developers to transform the site into a restaurant, or set up an art gallery, spa or museum.

Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic, said: "In terms of location, it has both advantages and disadvantages. It is located on a hill, offers a great view of the surrounding, but at the same time, because of the location, it is also a bit secluded, and a bit far from the main road, which makes it less noticeable to the shoppers or the diners around there.

"This means that the business which is operating there will need a lot of time and effort and resources to market the business."

Market watchers believe it will cost at least half a million dollars to make the site suitable for a business. And that hefty price tag might well dampen potential interest.

The government is guiding for rentals of around S$28,000 a month for the 97,000-square-foot site, with a gross floor area of some 13,000 square feet.

Market watchers expect the bids to be close to the guidance, but said that more innovative rental models could boost interest in the site.

Mr Mak said: "Typically, (in a) land tender process, they look at the price alone, but because of the uniqueness of this site, the authorities will have to look at the concept or the ideas or the product that the operator would bring to this site. And not just look at the rent itself.

"The government should perhaps also take a stake in the development of this place, because it is going to take a substantial amount of investment to repair it. Perhaps the authorities could share the risk with the operator by offering a lower rent in the first few years of the operation until the business has established itself and has gathered a loyal group of customers. And then the authorities can share the rewards after that by perhaps pegging the rents as a percentage of the operating income."

Chua Yang Liang, head of research, Southeast Asia, Jones Lang LaSalle, said: "The retail market has over the last few years gone into a two-tier pricing mechanism, where you have a base rent plus gross turnover; that is to assist the tenant so to speak, for the landlord to be engaged in the business model, while I understand that for most of the state properties, such a model is not quite common yet, this is one possible option to look into."

The former Alkaff Mansion is the first conservation site to be released this year.

Analysts expect about five more in coming months.

Mr Mak said: "Presently, it is a very suitable time for the government to release more sites, but at a gradual pace to capitalise on the expected increase in tourist arrivals."

Mr Chua said: "It won't surprise me that there will be more of such sites available, especially with economic conditions improving, and the regional economy picking up, where tourism is expected to improve." - CNA/sc/ms

CNA : Sim Lian puts in top bid of S$302m for leasehold site at Tampines

Sim Lian puts in top bid of S$302m for leasehold site at Tampines
By Wong Siew Ying | Posted: 16 March 2010 2037 hrs

SINGAPORE: Developer Sim Lian Land placed the top bid of S$302 million for the residential site at Tampines Avenue 1 & Avenue 10.

The tender for the 3.2 hectare site with a lease of 99 years attracted a total of eight bids.

The second highest bid of nearly S$288.99 million came from a joint venture of Far East Organisation and Frasers Centrepoint.

That's followed by MCL Land's bid of about S$278.3 million.

According to the Urban Redevelopment Authority, the remaining bids range between S$168 million and S$252 million.

Real Estate consultancy CB Richard Ellis said the tender for the condominium site further demonstrates developers' interest in the mass market segment.

It added that the top bid of S$302 million translates to S$421 per square foot per plot ratio.

Based on that, CBRE said the new project will break-even at around S$700 psf.

It expects the homes to be priced around S$700 to S$850 psf or higher, comparable to projects in the Bedok Reservoir area.

The tender will be awarded after the bids have been evaluated. - CNA/vm

CNA : Estate agencies need Professional Indemnity insurance to renew accreditation

Estate agencies need Professional Indemnity insurance to renew accreditation
By Sharon See | Posted: 16 March 2010 2302 hrs

SINGAPORE: From April 1, estate agencies must have a valid Professional Indemnity (PI) insurance to renew their accreditation status with the Singapore Accredited Estate Agencies (SAEA).

The SAEA recommends a minimum limit of indemnity of S$500,000.

SAEA said the move is designed to strengthen consumer confidence in estate agents who are believed to handle eight out of 10 real estate transactions.

Having a Professional Indemnity insurance is akin to good risk management for estate agencies, said SAEA, adding that the insurance also offers consumer some protection in case of dispute.

More details are expected at a seminar co-organised by SAEA and two other insurance companies on March 25. - CNA/vm

CNA : HDB launches 2 BTO projects in Sengkang and Sembawang

HDB launches 2 BTO projects in Sengkang and Sembawang
By Mustafa Shafawi | Posted: 16 March 2010 1516 hrs

SINGAPORE: The Housing and Development Board (HDB) has launched two new Build-To-Order (BTO) projects - Fernvale Ridge in Sengkang and Sembawang RiverLodge in Sembawang.

Close to 830 flats will be offered in total, most of which are four-room units. HDB said 95 per cent of the flats will be set aside for first-timers.

Flats in Fernvale Ridge range in price from S$128,000 for a three-room unit to S$352,000 for a five-room flat.

At Sembawang RiverLodge, three-room units start from S$128,000. Four-room units cost between S$212,000 and S$268,000 each. Sembawang RiverLodge will also have 126 two-room flats.

HDB said they will not be offered for sale at this time, but will be set aside to meet the housing needs of lower-income families at a later date.

Next month, HDB will launch another 1,200 BTO flats in Punggol. These launches are part of its plan to offer at least 12,000 new BTO flats this year, or more if there is demand.

- CNA/sc