ST : Bubbles can be 'good for property market'

Mar 24, 2010

Bubbles can be 'good for property market'

They fuel sales volumes and price rises, says executive director of HK property firm

By Joyce Teo

CONTRARY to what some believe, bubbles can be good for the property market, said the executive director of Hong Kong's Cheung Kong (Holdings).

Mr Justin Chiu told reporters yesterday at the showflat of his company's latest project here that he likes property bubbles because they fuel sales volumes and price rises.

Mr Chiu - who was moved to dress up as James Bond at launch parties in 2004 to stimulate interest - believes that what he calls optimum sentiment can buoy prices by up to 30 to 40 per cent. Without it, prices can fall by 50 per cent.

'I like bubbles. It's my religion. In a property market or any market, if there is some bubble, people will be more enticed to go into the market.'

'If it's a flat market like in 2003 (when Sars hit), even though I give you a discount and I dress up like James Bond...I sell fewer than 10 units.'

Mr Chiu, who stressed that property investment was a long-term game subject to short-term fluctuations, said people would not invest in property unless there was confidence. 'If no one is buying, prices will fall...That's why I said I like bubbles. Bubbles mean everyone is coming in.'

At Cheung Kong's latest project, The Vision, sales are reported to be brisk despite relatively high prices. Buyers have bought 210 units of the 99-year leasehold condo in West Coast Crescent, attracted by early-bird incentives discounting quoted prices by 2 per cent to 3 per cent.

The official launch is to be held on Friday, but per square foot (psf) prices for the apartments have already set a net high benchmark for the West Coast area.

The 281 apartments were mostly priced around $1,000 psf to $1,200 psf. All except one of the 14 strata terrace houses - costing $3 million to $3.2 million apiece - have been snapped up.

Mr Chiu, who is nearly 60, says the prices are reasonable given the project's location and quality finishings. 'If the price is not reasonable, we would not be selling over 200 units in two weeks.'

Cheung Kong's next project will be a site in Upper Thomson Road, which it won the tender for last November with a price of about $533 psf per plot ratio. Mr Chiu said it is likely to attract mainly locals and Chinese nationals.

He said Cheung Kong was looking at a few pieces of residential land. And together with Hongkong Land and Keppel Land - its partners for the Marina Bay Financial Centre (MBFC) project - Cheung Kong is also looking at buying offices.

More details will be revealed at the topping-out ceremony of Tower Two of MBFC next month.

Mr Chiu noted that the Singapore property market is now enjoying boom conditions, and government measures will not alter that, though there may be other risk factors such as wars. He said the key lies in the message given out with the measures, instead of the effectiveness of the measures.

'To me, government measures are not important at all unless they are very drastic...Government is only a small factor of the free market forces. Unless it takes very strong measures...I don't think it can alter the trend, (but) it can slow down (the market). I don't think any Asian government is prepared to wreck the market.'

joyceteo@sph.com.sg



Mr Chiu at The Vision showflat in West Coast Crescent. He says the property market here is enjoying a boom and government measures will not alter that. -- ST PHOTO: DESMOND FOO

ST : Three residential sites up for sale by tender

Mar 24, 2010

Three residential sites up for sale by tender

Fourth plot available if developers are interested

By Joyce Teo

THE flow of residential land onto the market continues with three government sites up for grabs by tender, and a fourth ready for release if developers show interest.

The three sites confirmed for tender are 99-year leasehold plots. Two are near MRT stations.

A plot at Boon Lay Way near Lakeside MRT station can yield 525 units, while a site across the road from Simei MRT station can yield about 250 flats.

The third site - at Tampines Road - is on the reserve list but was triggered for sale when a developer lodged an acceptable offer of $6.5 million. It is suitable for landed homes or apartments and will be launched for tender in about two weeks.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak told The Straits Times: 'We already know these development sites will be pushed out for sale, but it is very rare that the Government would release three sites for tender and put one more available for application on the same day.'

'It appears it wants to strongly put the point across that there is enough supply of land and residential properties for sale, to both the public and developers.'

Savills Singapore's director of investment sales and prestige homes, Mr Steven Ming, added: 'Developers are selling out their projects and they need to have their landbanks replenished.

'If they are unable to do so, they will simply choose to raise the prices of their existing inventory and sell slower instead.'

Mr Mak estimates that the top bids for the Boon Lay site will range from $360 psf per plot ratio to $420. Mr Ming expects a lower price of $260 to $300 psf ppr.

DTZ's head of South-east Asia research, Ms Chua Chor Hoon, tips bids of $330 to $390 psf ppr, considering Caspian nearby is selling for $647 to $732 psf.

The likely selling price of units on the Boon Lay Way site could be $720 to $780 psf, she said.

Experts tip the Simei site to attract bids of $320 to $410 psf ppr, translating to likely prices for flats of $750 to $850 psf.

Mr Mak reckons the Tampines site could attract bids of $335 to $390 psf ppr.

A fourth site that might hit the market is at Stirling Road. It could yield 405 units but is for sale under the reserve list system, so developers who are keen must indicate their interest by committing to a minimum bid that the Government deems acceptable.

'If it is released for sale, the top bids could range between $500 and $550 psf ppr or $240 million to $264 million,' said Mr Mak.

'It will be popular with developers and home buyers because it is near the Queenstown MRT station and Anchorpoint shopping centre.'

Mr Ming is looking at possible bids of $510 to $600 psf ppr, with a final selling price of $1,100 to $1,300 psf.

The Government has sold four residential sites under the confirmed list since the start of the year. These sites were scheduled for tender without developers having to first indicate interest.

A further two private residential sites - at Sembawang Road and Upper Serangoon Road - will be up for sale via the confirmed list next month, said the Urban Redevelopment Authority (URA).

A site on the reserve list at Sengkang West Avenue was sold last month while another two sites - at Upper Changi Road North and Tampines Road - have been triggered for sale after acceptable bids were offered.

The tenders for the Boon Lay Way and Simei sites will close on May 4 and 11 respectively.

joyceteo@sph.com.sg

BT : Govt releases 4 home sites in one go

Business Times - 24 Mar 2010

Govt releases 4 home sites in one go

Reiterates supply of land, homes enough to meet demand

By UMA SHANKARI

(SINGAPORE) Four more residential sites - on which more than 1,200 private homes can be built in total - were released for sale by the government yesterday.

The Urban Redevelopment Authority (URA) yesterday also reiterated that the potential supply of land from the government's land sales programme and the supply from projects in the pipeline will be 'more than sufficient to meet the demand for private housing'.

'The government will continue to monitor the property market closely,' URA said. 'If necessary, more supply can be injected via the second half 2010 government land sales programme to ensure that property prices are in line with economic fundamentals.'

Private home prices rose 7.4 per cent in Q4 2009 after climbing 15.8 per cent in Q3. For the whole of 2009, prices of private residential properties rose by 1.8 per cent.

Analysts have said that that the URA price index is likely to show an increase in Q1 2010 as more higher-value projects have been sold in the current quarter. The index will be released in April.

Yesterday, URA said it is releasing three residential land parcels - one each at Boon Lay Way, Simei Street 3 and Stirling Road - for sale. The agency last released three sites for sale at one go in January 2000.

And in addition to that supply, the Housing & Development Board (HDB) also plans to launch a residential site at Tampines Road for tender in about two weeks' time. HDB is releasing the site as it has been triggered by a bid from an unnamed developer.

Analysts said that the government's 'very rare' move of releasing four sites on the same day was designed to emphasise its often-repeated point that the supply of land and homes is more than enough to meet demand.

The upcoming supply from the four sites could also moderate the climb in private home prices.

Colin Tan, Chesterton Suntec International's research and consultancy director, said that it was 'positive' that URA & HDB are co-ordinating their efforts and pushing out development sites quickly.

'This should stem the overly aggressive bids we have seen in recent weeks and also stem future price escalations from the supply side. Because if developers pay too much for their sites, their initial selling prices may be higher to recover the land cost,' Mr Tan said.

URA's three sites can potentially yield about 1,180 private homes. The sites are 'well-distributed across the island, namely in the west, east and central regions, to provide developers and home-buyers with more choice', the agency said.

Two of the three land parcels released by URA yesterday - the sites at Boon Lay and Simei - are being offered under the confirmed list. The third site at Stirling Road was placed on the reserve list - which means that it has to be triggered for sale before the government will launch it.

Chua Chor Hoon, head of DTZ's South-east Asia research team said that both sites on the confirmed list were attractive. She estimates that the site on Boon Lay Way could go for $330-$390 per square foot (psf) of potential gross floor area, with homes there eventually selling for $720-$780 psf.

A comparable property in the vicinity will be Frasers Centrepoint's Caspian, where units are currently selling for $647-$732 psf.

Ms Chua also predicted that the site at Simei could go for a slightly pricier $360-$410 psf of potential gross floor area.

Homes on the site could eventually sell for $750-$800 psf. Nearby, units at Double Bay Residences are going for $680-$746 psf, she said.

Interest is also expected to be strong for HDB's Tampines site. The site, which has been on the reserve list for the past few years, will be put up for tender after a developer committed to bid at least $6.5 million for it.

It could prove to be popular as smaller developers - who could not compete in recent government land tenders as the prices were too high - could be attracted to it, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

He added that although the land parcel could be developed into apartments or landed homes, it is more likely that the developer will build an apartment block of 35 to 45 units on this site.

In an update, URA said that the government has sold four residential sites since January 2010. The four land parcels can potentially yield a total of 1,710 housing units.

Another two private residential sites, one at Sembawang Road and another at Upper Serangoon Road, will be released for sale via the confirmed list next month.

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

BT : Property still top draw for wealthy

Business Times - 24 Mar 2010

Property still top draw for wealthy

Survey shows 70% believe this is a good year to invest in property against 68% who favour equities, reports GENEVIEVE CUA

PROPERTY investments still take pride of place in high-net-worth (HNW) individuals' portfolios, accounting for a third of investments, a survey by Knight Frank and Citi Private Bank has found.

But only 13 per cent of wealthy respondents said they were planning to buy a new primary residence this year. While 37 per cent said they would consider a second home, almost half the respondents said they would not use debt to fund the purchase.

While survey respondents - who are Citi clients - are cautious, about 70 per cent believe this year will be a good year to invest in property, followed by 68 per cent in favour of equities. The least favoured asset class was bonds. The survey was conducted in January.

No details are available, however, on how many respondents took part.

Says Aamir Rahim, Citi Private Bank Asia Pacific chief executive: 'Although equity and property markets have bounced back sharply, the survey responses suggest wealthy investors remain concerned about the state of the global economy . . .

'When making property investment decisions, capital growth prospects are the main driver, followed by asset stability and then yields.'

He adds: 'Although relatively few respondents were planning to purchase a new primary residence this year, a significant proportion do see buying opportunities in the current market . . . It's clear that the wealthy still see property as a vital part of their investment portfolios and feel comfortable with it.'

Capital appreciation

Property has a weighting of roughly 33 per cent among the survey respondents, followed by equities' share of 24 per cent. Some 35 per cent of respondents expect equities to be the best-performing asset class in 2010, followed by hedge funds and property.

Among the types of property exposures, residential property is expected to fare the best, followed by commercial property and agricultural property.

The big question is the capital appreciation potential of some of the real estate markets which rose significantly last year.

Based on Knight Frank's Prime International Residential Index, Shanghai real estate registered the steepest upward trajectory with a 52 per cent rise last year. This was followed by Beijing's 47 per cent and Hong Kong's 40.5 per cent. Singapore ranked fifth in terms of the pace of price change, with a rise of 17 per cent, on par with Johannesburg.

Among other markets, the biggest plunge was in Dubai where prices fell 45 per cent. This was followed by Western Algarve in Portugal with 30 per cent.

Liam Bailey, Knight Frank's head of residential research, said prime residential properties saw a polarisation last year. Asian cities - especially in China - recovered strongly, but most other locations continued to fall.

'I do believe that we will see this gap narrow again in 2010. It seems unlikely that property prices in cities such as Shanghai can continue to grow at these kinds of rates. In many (other) locations, there was positive growth in the latter half of 2009.' New York real estate, for example, rose 2 per cent in the second half, but fell 12 per cent in the whole year.

Mr Bailey said fiscal intervention by administrations in Beijing and Washington means those cities are increasingly viewed as financial as well as administrative hubs - that is, having an impact on the cities' prime property markets as banks gravitate towards them.

'Although there are still questions over the state of the global economy,' he said, 'property remains a core part of the wealthy's investment portfolios . . . Current price falls will be viewed by many as a buying opportunity, but as the data from our Prime International Residential Index shows, these windows of opportunity do not always remain open for long.'

Boost from IRs

On Singapore property, in particular, Knight Frank's residential division head Peter Ow expects prime prices to climb another 10-20 per cent this year and outperform the overall market. Buying interest is expected from China, India and Indonesia.

'The opening of the IRs (integrated resorts) will present more leasing opportunities for high-end residential properties and will help create new residential enclaves, strengthening the overall living experience of these new clusters,' he said in the report.

Mr Bailey points out that low interest costs have protected potentially distressed owners and reduced the supply of property for sale. At the same time, low savings rates have spurred the wealthy to move out of cash and into property in search of yields. This has driven demand for property higher and against the backdrop of tight supply, has pushed values upwards in some locations.

'Ironically, the unintended consequence of government economic stimulus packages has been to support demand and pricing in top-end residential markets - probably not something governments would readily admit to.'

The obvious question is whether current pricing is sustainable. 'Our view is that most prime markets are suffering from an undersupply of stock and this will help maintain prices in the short term. Looking further ahead, however, it is those locations that offer a genuine lifestyle attraction to the world's wealthy, rather than just an investment opportunity, that will prove most sustainable,' he wrote.

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

BT : Cheung Kong on lookout for land sites

Business Times - 24 Mar 2010

Cheung Kong on lookout for land sites

HK developer wants to buy residential, commercial sites

By UMA SHANKARI

HONG KONG developer Cheung Kong Holdings is on the lookout for more residential and commercial sites to buy in Singapore, says executive director Justin Chiu.

'We are looking at a few pieces of land,' said Mr Chiu. 'The whole market (in Singapore) is moving. I am optimistic about the future.'

Although land prices are high, Cheung Kong will 'keep looking for new land' as it is an 'investment in (Singapore's) future', he said. He expects private home prices here to continue climbing over the next few years.

The group, which is controlled by Hong Kong tycoon Li Ka-shing, launched its 99-year-leasehold The Vision condo in the West Coast area earlier this month. It has since sold 210 of the 295 homes at the project at benchmark prices for the area.

Cheung Kong now has one yet to be launched residential project, at Upper Thomson Road, in its portfolio.

It also has a one-third stake in the upmarket Marina Bay Suites, which is part of the Marina Bay Financial Centre complex. During phase one, 90 units released for sale at the 221-unit condominium were snapped up at $2,200 to $2,500 per square feet (psf). Phase two is slated to be launched this year.

The official public launch of The Vision takes place this Friday, after most of the units were through private previews. Discounts of 2-3 per cent were given during these previews, said Mr Chiu. From Friday, the discount will no longer be available.

Two- to four-bedroom units, which make up the bulk of the project, are selling for $1,000-1,200 psf, while most of the 14 strata terrace units have been sold for $3-3.2 million apiece.

Up next is the 99-year leasehold condo plot in Upper Thomson Road. Cheung Kong won the plum site in November 2009 with a top bid of about $251 million, which works out to $533 psf of potential gross floor area - above most expectations. Mr Chiu said then that the breakeven cost for the project would be about $850 to $900 psf.

Yesterday, he said that Cheung Kong will make the best use of the site's location opposite Singapore Island Country Club's Island Golf Course. Planning permission is yet to be received, but Mr Chiu said that the units will definitely be large.

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



Mr Chiu: 'We are looking at a few pieces of land... The whole market (in Singapore) is moving. I am optimistic about the future.'

BT : Wee Hur awarded CMT project worth $103.6m

Business Times - 24 Mar 2010

Wee Hur awarded CMT project worth $103.6m

Entertainment and shopping complex to be ready next year

By GLENN CHEE

WEE Hur Holdings has won a $103.6 million project from Singapore real estate investment giant CapitaMall Trust to rebuild Jurong Entertainment Centre.

The project involves constructing a five-storey entertainment and shopping complex with a three-level basement.

The crown jewel of the complex will be an Olympic-size ice-skating rink in the centre of the building. It will be Singapore's first Olympic-size rink, replacing a smaller one located at the previous Jurong Entertainment Centre.

That rink, operated by Fuji Ice Palace, was one of only two in Singapore. It was the venue for ice-hockey tournaments and the Singapore National Figure Skating Championships.

The previous Jurong Entertainment Centre was closed for redevelopment in February 2008.

Besides the Olympic ice rink, the new complex will house a supermarket, restaurants, retail shops and a multi-screen cinema.

The gross floor area of the building will be 29,433 sq m.

This is Wee Hur's first project for CapitaMall Trust.

It was secured through subsidiary Wee Hur Construction from HSBC Institutional Trust Services (Singapore), as trustee of CapitaMall Trust.

Wee Hur executive chairman Goh Yeow Lian said: 'Our ability to be selected by leading property developers demonstrates our established reputation in the industry.'

Construction work starts on March 31 and is expected to be completed by November next year.

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



Special attraction: The crown jewel of the rebuilt Jurong Entertainment Centre will be an Olympic-size ice-skating rink. It will also house a multi-screen cinema

CNA : HDB to launch tender for residential land parcel at Tampines Road

HDB to launch tender for residential land parcel at Tampines Road
Posted: 23 March 2010 1552 hrs

SINGAPORE : The Housing and Development Board (HDB) said on Tuesday it has accepted an application for a residential land parcel at Tampines Road under the Reserve List System.

The site, with an area of 2,662 square metres, is proposed for the development of landed or apartment housing on a 99-year lease.

It has an allowable gross floor area of 3,727 square metres and the minimum offer price for the land parcel is S$6.5 million.

HDB will launch the tender in about two weeks' time.

Under the Reserve List System, the government will put up a listed site for public tender if it receives an application from a developer who commits to the minimum bid price by signing an agreement and paying a deposit of 3 per cent of the bid price.

- CNA/al

CNA : Singapore, Hong Kong jump to top 5 on luxury home price-rise list

Singapore, Hong Kong jump to top 5 on luxury home price-rise list
By Ryan Huang | Posted: 23 March 2010 2332 hrs

SINGAPORE: Hong Kong and Singapore jumped from the bottom five to the top five of an annual list measuring the rise in luxury home prices.

This was according to the latest figures from property consultants Knight Frank International for 2009.

The firm said that this reflects the attraction of prime residential property, where demand tends to improve as prices dip.

Overall, luxury home prices in the Asia Pacific region rose about 17 per cent on average last year.

In contrast, luxury home prices globally fell 5.5 per cent.

For 2009, the global list was led by Shanghai, where luxury home prices rose 52 per cent.

This was followed by Beijing at 47 per cent and Hong Kong at 40.5 per cent.

Singapore was tied for fourth place with Johannesburg, where luxury prices increased 17 per cent.

Non-Asian cities that made it to the top ten were Rio De Janerio (10 per cent), London (6.1 per cent) and Washington (5.7 per cent).

At the bottom of the global list - at number 56 - was Dubai, which saw luxury home prices plummet by 45 per cent.

- CNA/yb