Singapore News
Property investment sales down 8.5% in Q1 on-quarter to S$2.64b
By Mok Fei Fei | Posted: 06 April 2010 1438 hrs
SINGAPORE : Investment sales in the property market finally slowed in the first quarter this year.
Property consultant DTZ Research said the value of investment transactions in the first three months this year fell 8.5 per cent on-quarter to S$2.64 billion.
It was the first drop after three straight quarters of increases.
The industrial sector leapfrogged the residential sector to account for the bulk of the investment transactions.
Sales in the industrial sector made up S$1.02 billion or 38.5 per cent of the total transacted value.
DTZ said the sector saw good sales due to the sale and leaseback deals that were made by soon-to-be-listed Cache Logistics Trust, racking up deals worth S$713.2 million.
Residential investments came in second at S$879.2 million or 33 per cent of the total investment value.
The majority of the residential investments was from the sale of sites in the Government Land Sales (GLS) programme.
DTZ noted that with just 6.3 per cent share of total residential transactions, private investment sales were noticeably crowded out.
It predicted that this trend is likely to continue with the GLS programme expected to be the main source of land supply for residential development.
This is due to the variety of GLS sites available and the speed at which they could be tendered for and put on the drawing block for sale in less than a year.
DTZ also forecast that there could be more foreign purchasers in the coming quarters.
This, it said, is evident from the major acquisitions of two office buildings, Robinson Point and One Finlayson Green, both of which were bought by foreign investors.
DTZ said an ongoing economic recovery is expected to lead to increased investment activity this year.
The figures compiled by DTZ Research comprise transactions that are more than S$5 million each.
They exclude S$1.75 billion of transactions in single residential units, or lots that cannot be redeveloped/subdivided into more than one plot, as well as deals that are deemed to be interested person/party transactions.
- CNA/il
Wednesday, April 7, 2010
ST : UE buys Ang Mo Kio property to site new HQ
Apr 6, 2010
UE buys Ang Mo Kio property to site new HQ
UNITED Engineers (UE) has acquired an industrial property that it will use as its headquarters in Ang Mo Kio Street 64 for $25.18 million.
It will be centralising most of its business operations - including its headquarters currently located in UE Square in the River Valley area - at the new property by the end of the year.
The group will then rent out its prime headquarters space at UE Square, which takes up about 8,891 sq ft of lettable space on the 18th floor.
This move will enhance its operational efficiency, foster a closer working relationship and promote staff interaction, the group said in a statement yesterday.
The property, to be renamed UE BizHub Central, comprises a seven-storey building and a four-storey building that are linked by a sky-bridge.
The property has a total gross floor area of 378,426 sq ft.
The acquisition forms part of the group's strategy to develop and own a portfolio of build-to-suit properties in the strategic nodes of Singapore.
This refers to building space tailored to the needs of individual tenants.
Leveraging on its build-to-suit capabilities, it plans to further modernise and expand UE BizHub Central to 500,000 sq ft in the next phase.
However, the plans are subject to planning approval, the group said.
'We are looking out for other potential sites in Singapore that we could develop into build-to-suit, integrated space solutions under the brand name of 'UE BizHub' that will span the island state,' said Mr David Liew, divisional managing director of the group's property division.
UE buys Ang Mo Kio property to site new HQ
UNITED Engineers (UE) has acquired an industrial property that it will use as its headquarters in Ang Mo Kio Street 64 for $25.18 million.
It will be centralising most of its business operations - including its headquarters currently located in UE Square in the River Valley area - at the new property by the end of the year.
The group will then rent out its prime headquarters space at UE Square, which takes up about 8,891 sq ft of lettable space on the 18th floor.
This move will enhance its operational efficiency, foster a closer working relationship and promote staff interaction, the group said in a statement yesterday.
The property, to be renamed UE BizHub Central, comprises a seven-storey building and a four-storey building that are linked by a sky-bridge.
The property has a total gross floor area of 378,426 sq ft.
The acquisition forms part of the group's strategy to develop and own a portfolio of build-to-suit properties in the strategic nodes of Singapore.
This refers to building space tailored to the needs of individual tenants.
Leveraging on its build-to-suit capabilities, it plans to further modernise and expand UE BizHub Central to 500,000 sq ft in the next phase.
However, the plans are subject to planning approval, the group said.
'We are looking out for other potential sites in Singapore that we could develop into build-to-suit, integrated space solutions under the brand name of 'UE BizHub' that will span the island state,' said Mr David Liew, divisional managing director of the group's property division.
ST : Developers 'not rushing' into en bloc market yet
Apr 6, 2010
Developers 'not rushing' into en bloc market yet
By Joyce Teo
MORE projects are expected to be put up for collective sale this year as the property market continues to hot up.
This should bode well for developers keen to beef up their land banks, but they are not rushing into the en bloc market just yet, experts say.
'The problem in the en bloc market is the gap between what sellers want and what developers are prepared to pay,' said Ms Chua Chor Hoon, DTZ's head of South-east Asia research.
Colliers International executive director of investment sales Ho Eng Joo said: 'Developers are hungry, but they would not take too high a risk to acquire land. The prices en bloc sellers are asking now may not yet be justified by what the new projects nearby are fetching.
'Given a choice, they would rather bid for a government land sales site than a private plot.'
Government land sales sites are usually located in established residential areas with ready comparable projects, making it easier for developers to work out their sums, he said. The sale process is also neater and faster, experts said.
The collective sale process, they said, can drag on if there are strong dissenters.
Unhappy minority owners have, in the past, taken their estate's collective sale case to the High Court and the Court of Appeal. This means that timing can be a big problem with collective sales.
In such a sale, both sides want to protect their interests. The developers would not want to bid too high in case the market does not turn out to be as strong as expected, said Ms Chua.
But sellers want to secure a higher price to safeguard their position when the deal is sealed, in case prices continue to rise and they are unable to afford a similar replacement property, she added.
But until prices of new private home launches improve further, the en bloc market may not take off in a significant way yet, said Mr Ho.
In the meantime, developers will still be very keen on government land sales sites. They are particularly interested in mass market sites, considering that most of the launches so far are in the mass and mid-market segments, experts say.
Ms Chua said the slide in developers' residential stock halted late last year.
Developers' stock of unsold inventory has improved from the third quarter of last year, when they had 36,481 units on hand, to a total of 40,224 units at the end of last year, she noted.
But they will still need to replenish and buy at a fairly aggressive pace if they continue to sell a lot, she said.
DTZ's research shows that half of 16 major developers here had fewer than 1,000 residential units left in their land bank as of the end of February.
Sales of new private homes have been brisk in the first quarter, with total sales estimated at close to 4,000 units.
Nevertheless, if such sales come down to a more sustainable level of fewer than 3,000 units a quarter, the tight supply situation should ease gradually now that the Government is pushing out more sites for sale, said Ms Chua.
Developers 'not rushing' into en bloc market yet
By Joyce Teo
MORE projects are expected to be put up for collective sale this year as the property market continues to hot up.
This should bode well for developers keen to beef up their land banks, but they are not rushing into the en bloc market just yet, experts say.
'The problem in the en bloc market is the gap between what sellers want and what developers are prepared to pay,' said Ms Chua Chor Hoon, DTZ's head of South-east Asia research.
Colliers International executive director of investment sales Ho Eng Joo said: 'Developers are hungry, but they would not take too high a risk to acquire land. The prices en bloc sellers are asking now may not yet be justified by what the new projects nearby are fetching.
'Given a choice, they would rather bid for a government land sales site than a private plot.'
Government land sales sites are usually located in established residential areas with ready comparable projects, making it easier for developers to work out their sums, he said. The sale process is also neater and faster, experts said.
The collective sale process, they said, can drag on if there are strong dissenters.
Unhappy minority owners have, in the past, taken their estate's collective sale case to the High Court and the Court of Appeal. This means that timing can be a big problem with collective sales.
In such a sale, both sides want to protect their interests. The developers would not want to bid too high in case the market does not turn out to be as strong as expected, said Ms Chua.
But sellers want to secure a higher price to safeguard their position when the deal is sealed, in case prices continue to rise and they are unable to afford a similar replacement property, she added.
But until prices of new private home launches improve further, the en bloc market may not take off in a significant way yet, said Mr Ho.
In the meantime, developers will still be very keen on government land sales sites. They are particularly interested in mass market sites, considering that most of the launches so far are in the mass and mid-market segments, experts say.
Ms Chua said the slide in developers' residential stock halted late last year.
Developers' stock of unsold inventory has improved from the third quarter of last year, when they had 36,481 units on hand, to a total of 40,224 units at the end of last year, she noted.
But they will still need to replenish and buy at a fairly aggressive pace if they continue to sell a lot, she said.
DTZ's research shows that half of 16 major developers here had fewer than 1,000 residential units left in their land bank as of the end of February.
Sales of new private homes have been brisk in the first quarter, with total sales estimated at close to 4,000 units.
Nevertheless, if such sales come down to a more sustainable level of fewer than 3,000 units a quarter, the tight supply situation should ease gradually now that the Government is pushing out more sites for sale, said Ms Chua.
BT : S'pore up two notches in office costs ranking
Business Times - 06 Apr 2010
S'pore up two notches in office costs ranking
But it continues to improve on competitiveness
By UMA SHANKARI
SINGAPORE has risen two notches on the latest bi-annual list of the world's most expensive office locations.
But Singapore's competitiveness - in terms of office occupancy costs - continued to improve, as the gap between rents here and in other major financial centres widened, the report by Colliers International found.
Colliers' second-half 2009 global office real estate review tracked space in 154 cities worldwide from June to December last year. Singapore was ranked 24th most expensive - up two notches from 26th in the H1 2009 survey.
Hong Kong was again the most expensive office location, followed by London's West End and then Tokyo.
Although Singapore's ranking rose, the gap between office rents here and those in rival centres grew bigger. This is because Singapore is a laggard - worldwide and regionally - in the office market recovery, Colliers said. Many cities posted gains or recorded milder declines in office rents in H2 2009.
'This phenomenon is to Singapore's advantage,' said Tay Huey Ying, director of research and advisory at Colliers. 'The resultant growth in the gap in office occupancy costs against other key financial centres improves our competitiveness and makes Singapore the choice location for business set-ups.'
She also said the gap between Singapore and rival Hong Kong has widened, from 45 per cent at end-December 2008 to 60 per cent in H1 2009 and 67 per cent in H2 2009.
While office rents here have continued to dip, the rate of decline has slowed significantly - to 6.5 per cent in H2 2009, from 42.3 per cent in H1 2009 - in local currency terms.
Colliers expects the local market to ride the economic recovery in 2010 and build on the momentum seen in Q4 2009, when demand for office space expanded by 301,000 sq ft.
Rents for Grade A office space in the central business district bottomed out in Q1 2010, rising 0.5 per cent quarter on quarter to end the quarter at $6.38 per sq ft per month, Colliers said.
'The flight to quality, as well as expansion by businesses, can be expected to continue in 2010,' Ms Tay said. 'Barring any unforeseen external shocks, the Singapore office market is expected to see a modest recovery with up to a 5 per cent increase in rents in 2010.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
S'pore up two notches in office costs ranking
But it continues to improve on competitiveness
By UMA SHANKARI
SINGAPORE has risen two notches on the latest bi-annual list of the world's most expensive office locations.
But Singapore's competitiveness - in terms of office occupancy costs - continued to improve, as the gap between rents here and in other major financial centres widened, the report by Colliers International found.
Colliers' second-half 2009 global office real estate review tracked space in 154 cities worldwide from June to December last year. Singapore was ranked 24th most expensive - up two notches from 26th in the H1 2009 survey.
Hong Kong was again the most expensive office location, followed by London's West End and then Tokyo.
Although Singapore's ranking rose, the gap between office rents here and those in rival centres grew bigger. This is because Singapore is a laggard - worldwide and regionally - in the office market recovery, Colliers said. Many cities posted gains or recorded milder declines in office rents in H2 2009.
'This phenomenon is to Singapore's advantage,' said Tay Huey Ying, director of research and advisory at Colliers. 'The resultant growth in the gap in office occupancy costs against other key financial centres improves our competitiveness and makes Singapore the choice location for business set-ups.'
She also said the gap between Singapore and rival Hong Kong has widened, from 45 per cent at end-December 2008 to 60 per cent in H1 2009 and 67 per cent in H2 2009.
While office rents here have continued to dip, the rate of decline has slowed significantly - to 6.5 per cent in H2 2009, from 42.3 per cent in H1 2009 - in local currency terms.
Colliers expects the local market to ride the economic recovery in 2010 and build on the momentum seen in Q4 2009, when demand for office space expanded by 301,000 sq ft.
Rents for Grade A office space in the central business district bottomed out in Q1 2010, rising 0.5 per cent quarter on quarter to end the quarter at $6.38 per sq ft per month, Colliers said.
'The flight to quality, as well as expansion by businesses, can be expected to continue in 2010,' Ms Tay said. 'Barring any unforeseen external shocks, the Singapore office market is expected to see a modest recovery with up to a 5 per cent increase in rents in 2010.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Brighter retail outlook in 2010
Business Times - 06 Apr 2010
Brighter retail outlook in 2010
Even so, players have their work cut out as more than a million sq ft of space comes onstream, say PETER SEE-TOH and PNG POH SOON
THE retail market not only faced the onslaught of the global financial crisis but also had to brave additional headwinds arising from a huge amount of new retail supply coming onstream in 2009. Lettable retail space increased by 1.7 million square feet, a whopping 51/2 times more than the 10-year average. New retail space in Orchard Road alone accounted for more than half the new stock, following the opening of Orchard Central, ION Orchard, Mandarin Gallery and 313@Somerset.
As retail sales plunged at the beginning of 2009, rentals were predicted to fall by as much as 20 per cent with vacancy rates hitting 15 per cent. Interestingly, the situation did not turn out as bleak as expected. Despite the significant spike in retail supply, demand was relatively strong and occupancy rate in Q409 reached a 15-year high of 95.7 per cent. (see Exhibit 1)
Rental slide
Despite the high occupancy rate, rentals fell with the new supply. The islandwide shop space rental index for Q408 and Q409 was 126.8 and 116.4 respectively, indicating a drop of 8.2 per cent. Rentals suffered most in Orchard Road (central)/Scotts Road, falling by some 14 per cent. Average monthly gross prime rental as at end-2009 was $40.43 per square foot per month (psf pm), down from $47.14 psf pm at the start of the year.
It was the first time in five years that prime rentals in Orchard Road registered a fall. Prime rents in Orchard Road (fringe), Marina Centre, City Hall and Bugis dipped by varying magnitudes, with the exception of suburban malls where rentals bucked the trend and rose from $29.10 psf pm to $29.32 psf pm.
What accounted for the less dismal than expected performance in the retail market?
One major reason was government action to support the economy through a $20.5 billion Resilience Package in January 2009, which helped Singaporeans stay employed. The measures shored up confidence as the unemployment rate last year was a relatively low 3 per cent.
Landlords also played their part as most of them helped ease tenants' burden by passing on the benefits of a 40 per cent property tax rebate implemented with the package. This helped reduce tenants' operating costs.
Further, landlords and mall managers took measures such as stepping up advertising and promotion (A&P) efforts for their malls and helping struggling tenants explore ways to improve sales.
Another reason was the retailers' confidence in Singapore in the longer term. According to the Department of Statistics, the population stood at 4.99 million last year. While the government is slowing down the hiring of foreign workers, the population is likely to continue growing, albeit at a slower pace. In the long run, Singapore is geared to a population of 6.5 million.
In line with population growth, private consumption expenditure has also increased by 12.7 per cent from 2005 to 2009. Average monthly nominal earnings grew from $3,063 in 2000 to $3,872 in 2009, at an average of 3.3 per cent per annum. While average earnings in 2009 fell for the first time in the past five years, it is expected to pick up as the economy recovers this year (see Exhibit 2).
Finally, retailers are cautiously optimistic as they look forward to the opening of the two integrated resorts. Some expect more tourist dollars to start flowing into the city as the global economy recovers.
Indeed, the tourism statistics show some 'green shoots' as Singapore saw more visitors arriving from the second half of last year. Visitor arrivals in January this year grew 17.6 per cent year-on-year to reach 908,000. For 2010, the Singapore Tourism Board has forecast 11.5-12.5 million visitor arrivals. This would be an improvement of more than 20 per cent over 2009.
Monthly retail sales in January saw a positive uptick with sales up 2.3 per cent year on year. The luxury goods segment showed signs of recovery with watches and jewellery sales rising 10.3 per cent y-o-y. Although retailers, and F&B operators in particular, saw strong sales during the year-end festive season, it remains to be seen if such numbers are sustainable.
Potential bugbear
What are the key challenges for landlords and retailers in the near future? Is upcoming supply a bugbear?
From a retailer's perspective, operating costs are always a major concern with rentals and labour costs forming the bulk of it. With the recent government measure to phase in higher foreign workers levies, operating cost is expected to rise in the future. While retailers have a strong incentive to reduce their dependence on foreign workers, they may also face difficulty in attracting locals to take up jobs in the service sector.
Furthermore, as the economy improves, more Singaporeans are travelling overseas for holidays, shopping and dining.
The recent National Association of Travel Agents Singapore (Natas) fair saw sales scale a new high of $63 million. Shopping centres in Singapore are no longer just competing with one another but also with overseas malls.
More worrying signs come in the form of new retail space of 1.92 million sq ft this year. About 65 per cent of the upcoming retail space has been pre-committed. While landlords welcome the strong take-up numbers, competition is expected to be keen. It remains to be seen if the pie is big enough for all players.
Developers and managers of ageing shopping malls are also expected to embark on asset enhancements to compete with the new kids on the block. The challenge for mall owners is to re-invent themselves by bringing in new retailers and concepts to address the common complaint that one mall looks much like another.
Competition will intensify in 2010 and beyond when more than a million sq ft of new retail space will be added to the Marina Bay precinct. Marina Bay will become a strong alternative to Orchard Road, being a new retail focal point offering shoppers a fresh experience (see Exhibit 3).
As we move into 2010, we are hopeful that the retail sector is poised to benefit from the broad economic recovery. The Ministry of Trade and Industry expects the economy to grow by 4.5 to 6.5 per cent. In the absence of any unforeseen circumstances, we can expect overall prime rentals to increase by up to 5 per cent.
However, in the near term, we also expect to see consolidation by retailers who are likely to trim non-performing units. In light of this, non-prime retail space could see a mild correction.
Nonetheless, we expect suburban rents to remain firm. It seems that as the economy recovers and the competition hots up, players in the retail market have their work cut out for them.
The writers are managing director of retail services and senior manager of investment respectively at Knight Frank Singapore
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Shopping time: New retail space in Orchard Road alone accounted for more than half the new stock in 2009, following the opening of Orchard Central, ION Orchard, Mandarin Gallery (above) and 313@Somerset
Brighter retail outlook in 2010
Even so, players have their work cut out as more than a million sq ft of space comes onstream, say PETER SEE-TOH and PNG POH SOON
THE retail market not only faced the onslaught of the global financial crisis but also had to brave additional headwinds arising from a huge amount of new retail supply coming onstream in 2009. Lettable retail space increased by 1.7 million square feet, a whopping 51/2 times more than the 10-year average. New retail space in Orchard Road alone accounted for more than half the new stock, following the opening of Orchard Central, ION Orchard, Mandarin Gallery and 313@Somerset.
As retail sales plunged at the beginning of 2009, rentals were predicted to fall by as much as 20 per cent with vacancy rates hitting 15 per cent. Interestingly, the situation did not turn out as bleak as expected. Despite the significant spike in retail supply, demand was relatively strong and occupancy rate in Q409 reached a 15-year high of 95.7 per cent. (see Exhibit 1)
Rental slide
Despite the high occupancy rate, rentals fell with the new supply. The islandwide shop space rental index for Q408 and Q409 was 126.8 and 116.4 respectively, indicating a drop of 8.2 per cent. Rentals suffered most in Orchard Road (central)/Scotts Road, falling by some 14 per cent. Average monthly gross prime rental as at end-2009 was $40.43 per square foot per month (psf pm), down from $47.14 psf pm at the start of the year.
It was the first time in five years that prime rentals in Orchard Road registered a fall. Prime rents in Orchard Road (fringe), Marina Centre, City Hall and Bugis dipped by varying magnitudes, with the exception of suburban malls where rentals bucked the trend and rose from $29.10 psf pm to $29.32 psf pm.
What accounted for the less dismal than expected performance in the retail market?
One major reason was government action to support the economy through a $20.5 billion Resilience Package in January 2009, which helped Singaporeans stay employed. The measures shored up confidence as the unemployment rate last year was a relatively low 3 per cent.
Landlords also played their part as most of them helped ease tenants' burden by passing on the benefits of a 40 per cent property tax rebate implemented with the package. This helped reduce tenants' operating costs.
Further, landlords and mall managers took measures such as stepping up advertising and promotion (A&P) efforts for their malls and helping struggling tenants explore ways to improve sales.
Another reason was the retailers' confidence in Singapore in the longer term. According to the Department of Statistics, the population stood at 4.99 million last year. While the government is slowing down the hiring of foreign workers, the population is likely to continue growing, albeit at a slower pace. In the long run, Singapore is geared to a population of 6.5 million.
In line with population growth, private consumption expenditure has also increased by 12.7 per cent from 2005 to 2009. Average monthly nominal earnings grew from $3,063 in 2000 to $3,872 in 2009, at an average of 3.3 per cent per annum. While average earnings in 2009 fell for the first time in the past five years, it is expected to pick up as the economy recovers this year (see Exhibit 2).
Finally, retailers are cautiously optimistic as they look forward to the opening of the two integrated resorts. Some expect more tourist dollars to start flowing into the city as the global economy recovers.
Indeed, the tourism statistics show some 'green shoots' as Singapore saw more visitors arriving from the second half of last year. Visitor arrivals in January this year grew 17.6 per cent year-on-year to reach 908,000. For 2010, the Singapore Tourism Board has forecast 11.5-12.5 million visitor arrivals. This would be an improvement of more than 20 per cent over 2009.
Monthly retail sales in January saw a positive uptick with sales up 2.3 per cent year on year. The luxury goods segment showed signs of recovery with watches and jewellery sales rising 10.3 per cent y-o-y. Although retailers, and F&B operators in particular, saw strong sales during the year-end festive season, it remains to be seen if such numbers are sustainable.
Potential bugbear
What are the key challenges for landlords and retailers in the near future? Is upcoming supply a bugbear?
From a retailer's perspective, operating costs are always a major concern with rentals and labour costs forming the bulk of it. With the recent government measure to phase in higher foreign workers levies, operating cost is expected to rise in the future. While retailers have a strong incentive to reduce their dependence on foreign workers, they may also face difficulty in attracting locals to take up jobs in the service sector.
Furthermore, as the economy improves, more Singaporeans are travelling overseas for holidays, shopping and dining.
The recent National Association of Travel Agents Singapore (Natas) fair saw sales scale a new high of $63 million. Shopping centres in Singapore are no longer just competing with one another but also with overseas malls.
More worrying signs come in the form of new retail space of 1.92 million sq ft this year. About 65 per cent of the upcoming retail space has been pre-committed. While landlords welcome the strong take-up numbers, competition is expected to be keen. It remains to be seen if the pie is big enough for all players.
Developers and managers of ageing shopping malls are also expected to embark on asset enhancements to compete with the new kids on the block. The challenge for mall owners is to re-invent themselves by bringing in new retailers and concepts to address the common complaint that one mall looks much like another.
Competition will intensify in 2010 and beyond when more than a million sq ft of new retail space will be added to the Marina Bay precinct. Marina Bay will become a strong alternative to Orchard Road, being a new retail focal point offering shoppers a fresh experience (see Exhibit 3).
As we move into 2010, we are hopeful that the retail sector is poised to benefit from the broad economic recovery. The Ministry of Trade and Industry expects the economy to grow by 4.5 to 6.5 per cent. In the absence of any unforeseen circumstances, we can expect overall prime rentals to increase by up to 5 per cent.
However, in the near term, we also expect to see consolidation by retailers who are likely to trim non-performing units. In light of this, non-prime retail space could see a mild correction.
Nonetheless, we expect suburban rents to remain firm. It seems that as the economy recovers and the competition hots up, players in the retail market have their work cut out for them.
The writers are managing director of retail services and senior manager of investment respectively at Knight Frank Singapore
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Shopping time: New retail space in Orchard Road alone accounted for more than half the new stock in 2009, following the opening of Orchard Central, ION Orchard, Mandarin Gallery (above) and 313@Somerset
BT : Lian Beng, Yongnam clinch contracts
Business Times - 06 Apr 2010
Lian Beng, Yongnam clinch contracts
By UMA SHANKARI
TWO construction companies announced large deals yesterday. Lian Beng Group said it has clinched its third contract within a month. The latest contract, worth $95 million, is to design and build The Laurels, a luxury condominium project at Cairnhill Road - jointly developed by Sing Holdings and Forum Partners.
Separately, Yongnam Holdings also said it has won a sub-contract in India together with a local partner. The contract, worth around $75.5 million, is for the construction of a roof structure and columns for a new terminal building for the Mumbai International Airport.
Lian Beng's latest contract follows other recent awards to build Centro Residences and Waterbank at Dakota. It will bring the value of all contracts secured since the second week of March to $317 million.
The contract for The Laurels will include the construction of 229 apartment units within two 19-storey residential blocks, along with a swimming pool, a basement car park and other ancillary facilities. Work is scheduled to begin in April and is expected to complete by the first quarter of 2013.
With the addition of this latest contract, Lian Beng's order book now stands at a record $915 million.
Yongnam also announced yesterday that it was awarded a sub-contract together with Geodesic Techniques, an engineering design and build company in India.
Yongnam is in discussions with Geodesic to form an equal joint venture (JV) company to undertake the project. The JV will supply, fabricate and erect approximately 20,000 tonnes of structural steel for the roof structure as well as composite steel columns of the new passenger terminal building and piers. As the lead partner in the JV, Yongnam will deploy personnel in the key areas of fabrication, erection, quality control and safety. The contract, which is expected to be completed by February 2011, is forecast to have a favourable impact on Yongnam's FY2010 financial performance.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
__._,_.___
Lian Beng, Yongnam clinch contracts
By UMA SHANKARI
TWO construction companies announced large deals yesterday. Lian Beng Group said it has clinched its third contract within a month. The latest contract, worth $95 million, is to design and build The Laurels, a luxury condominium project at Cairnhill Road - jointly developed by Sing Holdings and Forum Partners.
Separately, Yongnam Holdings also said it has won a sub-contract in India together with a local partner. The contract, worth around $75.5 million, is for the construction of a roof structure and columns for a new terminal building for the Mumbai International Airport.
Lian Beng's latest contract follows other recent awards to build Centro Residences and Waterbank at Dakota. It will bring the value of all contracts secured since the second week of March to $317 million.
The contract for The Laurels will include the construction of 229 apartment units within two 19-storey residential blocks, along with a swimming pool, a basement car park and other ancillary facilities. Work is scheduled to begin in April and is expected to complete by the first quarter of 2013.
With the addition of this latest contract, Lian Beng's order book now stands at a record $915 million.
Yongnam also announced yesterday that it was awarded a sub-contract together with Geodesic Techniques, an engineering design and build company in India.
Yongnam is in discussions with Geodesic to form an equal joint venture (JV) company to undertake the project. The JV will supply, fabricate and erect approximately 20,000 tonnes of structural steel for the roof structure as well as composite steel columns of the new passenger terminal building and piers. As the lead partner in the JV, Yongnam will deploy personnel in the key areas of fabrication, erection, quality control and safety. The contract, which is expected to be completed by February 2011, is forecast to have a favourable impact on Yongnam's FY2010 financial performance.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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BT : Roxy-Pacific takes stake in group buying Marina House
Business Times - 06 Apr 2010
Roxy-Pacific takes stake in group buying Marina House
Consortium seeks to increase saleable area of proposed residential project
By KALPANA RASHIWALA
ROXY-PACIFIC Holdings has taken a 20 per cent stake in the consortium started by Melvin Poh of Fission Group which recently signed a deal to buy Marina House at Shenton Way for $148 million.
BT reported the sale of Marina House late last month.
Besides Roxy-Pacific and Fission Holdings, the other three shareholders in the consortium are Macly Capital, Pinnacle Assets and Chee Hsian Sing.
Mr Chee, an architect by training, has been involved in several joint developments with Fission Group. Macly Group was set up by its managing director, Herman Chang, a civil engineer by training. Macly's property developments include Thomson V and Newton Edge. Pinnacle Assets, set up in 2007, is headed by Victor Soh, a partner in Fortune Development.
All five shareholders in the consortium buying Marina House hold an equal stake of 20 per cent each.
Marina House is being sold by Hong Leong Group, which in February this year, obtained provisional permission to redevelop the property into a 42-storey block comprising about 150 apartments and ground-floor commercial space.
The site has a balance lease term of about 60 years. However, the state has yet to agree to top up the site's lease to a fresh 99-year term.
The $148 million purchase price works out to about $970 per square foot of potential gross floor area inclusive of an estimated $30 million payment to the state if it agrees to upgrade the site's lease.
The $970 per square foot per plot ratio unit land price takes into account 10 per cent additional gross floor area (GFA) allowed for balcony space. A differential premium is not payable for the residential conversion based on Sept 1, 2009 development charge rates as the provisional permission was secured before the revision in DC rates that took effect from March 1, 2010.
The proposed GFA inclusive of the 10 per cent balcony allowance would be lower than the building's existing GFA.
Once the purchase is completed, the consortium will review the scheme for the proposed project. 'We will seek to increase the saleable area and possibly increase the number of units. We'll also have to do the detailed designing,' said Roxy-Pacific executive chairman and CEO Teo Hong Lim.
'On a worst-case scenario, assuming the authorities don't approve a lease upgrade on the site (and we hence don't redevelop the site to residential use), the purchase price of the existing commercial space is below current replacement cost. The $148 million works out to about $740 psf based on existing GFA of nearly 200,000 sq ft. There is scope to increase the lettable area,' said Mr Teo.
Based on Marina House's existing net lettable area of about 130,000 sq ft, the $148 million price works out to about $1,130 psf.
DTZ brokered the sale of Marina House.
Mr Poh clinched the option to buy Marina House just days before the preview of 76 Shenton nearby. The 202 apartments were sold out in two days at prices ranging from about $1,600 psf to $2,600 psf. Hong Leong Group is developing the apartments on the former Ong Building after securing a lease upgrade on the site.
Last year, Fission teamed up with Yi Kai to buy the freehold VTB Building along Robinson Road for $71 million. They are also partners in the purchase of Aviva Building in Cecil Street and the next-door Cecil House for a total of $101 million.
Mr Poh told BT yesterday that a 37-storey residential project (with shops on the ground floor) on the VTB Building site is slated for launch by the third quarter of this year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Roxy-Pacific takes stake in group buying Marina House
Consortium seeks to increase saleable area of proposed residential project
By KALPANA RASHIWALA
ROXY-PACIFIC Holdings has taken a 20 per cent stake in the consortium started by Melvin Poh of Fission Group which recently signed a deal to buy Marina House at Shenton Way for $148 million.
BT reported the sale of Marina House late last month.
Besides Roxy-Pacific and Fission Holdings, the other three shareholders in the consortium are Macly Capital, Pinnacle Assets and Chee Hsian Sing.
Mr Chee, an architect by training, has been involved in several joint developments with Fission Group. Macly Group was set up by its managing director, Herman Chang, a civil engineer by training. Macly's property developments include Thomson V and Newton Edge. Pinnacle Assets, set up in 2007, is headed by Victor Soh, a partner in Fortune Development.
All five shareholders in the consortium buying Marina House hold an equal stake of 20 per cent each.
Marina House is being sold by Hong Leong Group, which in February this year, obtained provisional permission to redevelop the property into a 42-storey block comprising about 150 apartments and ground-floor commercial space.
The site has a balance lease term of about 60 years. However, the state has yet to agree to top up the site's lease to a fresh 99-year term.
The $148 million purchase price works out to about $970 per square foot of potential gross floor area inclusive of an estimated $30 million payment to the state if it agrees to upgrade the site's lease.
The $970 per square foot per plot ratio unit land price takes into account 10 per cent additional gross floor area (GFA) allowed for balcony space. A differential premium is not payable for the residential conversion based on Sept 1, 2009 development charge rates as the provisional permission was secured before the revision in DC rates that took effect from March 1, 2010.
The proposed GFA inclusive of the 10 per cent balcony allowance would be lower than the building's existing GFA.
Once the purchase is completed, the consortium will review the scheme for the proposed project. 'We will seek to increase the saleable area and possibly increase the number of units. We'll also have to do the detailed designing,' said Roxy-Pacific executive chairman and CEO Teo Hong Lim.
'On a worst-case scenario, assuming the authorities don't approve a lease upgrade on the site (and we hence don't redevelop the site to residential use), the purchase price of the existing commercial space is below current replacement cost. The $148 million works out to about $740 psf based on existing GFA of nearly 200,000 sq ft. There is scope to increase the lettable area,' said Mr Teo.
Based on Marina House's existing net lettable area of about 130,000 sq ft, the $148 million price works out to about $1,130 psf.
DTZ brokered the sale of Marina House.
Mr Poh clinched the option to buy Marina House just days before the preview of 76 Shenton nearby. The 202 apartments were sold out in two days at prices ranging from about $1,600 psf to $2,600 psf. Hong Leong Group is developing the apartments on the former Ong Building after securing a lease upgrade on the site.
Last year, Fission teamed up with Yi Kai to buy the freehold VTB Building along Robinson Road for $71 million. They are also partners in the purchase of Aviva Building in Cecil Street and the next-door Cecil House for a total of $101 million.
Mr Poh told BT yesterday that a 37-storey residential project (with shops on the ground floor) on the VTB Building site is slated for launch by the third quarter of this year.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : UOL to preview Waterbank at Dakota
Business Times - 06 Apr 2010
UOL to preview Waterbank at Dakota
CapitaLand, meanwhile, sells 110 Interlace units over the weekend
By KALPANA RASHIWALA
THE property launch scene continues to buzz. UOL Group is expected to preview its 99-year leasehold Waterbank at Dakota condo this week at prices ranging from above $1,000 per square foot to around $1,300 psf.
Over the Good Friday weekend, CapitaLand sold a total 110 units at The InterLace in the Alexandra Road area at $850-1,300 psf. The property giant has sold more than 390 of the 490 units it has released to date in the 1,040-unit, 99-year leasehold condo.
A CapitaLand spokeswoman said yesterday that units in the latest phase are priced about 3-5 per cent higher than the phase one units released in September last year (at $850-1,150 psf) as there are more units in the recent batch on higher floors or with better facing.
TID Pte Ltd - a joint venture between Hong Leong Group Singapore and Japan's Mitsui Fudosan - also found buyers for 23 of the 40 units it released last week at its 65-unit Nathan Suites. The units fetched prices ranging from slightly below $2,000 psf to $2,300 psf; the average price achieved is $2,100 psf.
The 24-storey freehold project at Nathan Road, opposite the Malaysian High Commission, comprises two, three and four-bedroom apartments as well as penthouses ranging from about 915 sq ft to 4,800 sq ft.
Meanwhile, at Sentosa Cove, Ho Bee and IOI sold six units at The Seascape last week, taking total sales in the project to 31, while City Developments Ltd (CDL) sold another five units of The Residences at W Singapore Sentosa Cove, taking sales to 19 units. CDL is selling its development at $2,500-3,000 psf while units at Seascape cost $2,619-2,880 psf, based on earlier reports.
Next week, Tiong Aik group is expected to preview Starlight Suites at River Valley Close. The freehold 35-storey condo could be priced at about $2,000 psf on average. Starlight Suites has a total of 105 units, comprising one bedders to a four-bedroom penthouse. Unit sizes range from 560 sq ft to 3,401 sq ft.
This week, though, the spotlight will fall along Geylang River, where UOL will preview its Waterbank at Dakota, which is next to the Dakota MRT Station that is slated to open later this month.
Market watchers say that this would be probably the first residential project to come on the market without bay windows and planter boxes, leaving more net liveable area for residents.
A ruling that took effect on Jan 1, 2009, scrapped the exemption of these features from gross floor area for submissions for provisional permission.
UOL is expected to release about 200 of the project's total of 616 units initially. Unit sizes range from 484 sq ft for a one bedder to 2,820 sq ft for a penthouse. Next door, NTUC Choice Homes and Ho Bee are left with about 50 units at Dakota Residences comprising mostly four bedders facing the river. The developers began selling the project, which has a total of 348 units, in June 2008 at about $970 psf on average but trimmed prices by 5-8 per cent during last year's relaunch.
Joseph Tan, CB Richard Ellis executive director (residential), notes that developers have revved up overseas marketing campaigns in places such as Hong Kong, Jakarta, Shanghai and Beijing of late to ride on a pick-up in foreign buying interest.
DTZ executive director (consulting) Ong Choon Fah says that developers' launch strategies in the coming months will differ depending on the market segment they cater to.
For instance, demand from foreign buyers is more significant at the high end than in the other segments. Developers of such projects are more likely to calibrate launches, ensuring that supply keeps pace with a much smaller pool of buyers.
For mass and mid-market projects, on the other hand, developers would be more inclined to push out projects as buying interest remains strong in these segments.
Developers also face greater competition in the mass market category as the government releases new sites, whereas in the luxury sector, new land supply will be introduced at a slower clip, given the huge price gap between buyers' and sellers' expectations for en bloc sales.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Waterbank at Dakota: This is probably the first residential project to come on the market without bay windows and planter boxes, leaving more net liveable area for residents
UOL to preview Waterbank at Dakota
CapitaLand, meanwhile, sells 110 Interlace units over the weekend
By KALPANA RASHIWALA
THE property launch scene continues to buzz. UOL Group is expected to preview its 99-year leasehold Waterbank at Dakota condo this week at prices ranging from above $1,000 per square foot to around $1,300 psf.
Over the Good Friday weekend, CapitaLand sold a total 110 units at The InterLace in the Alexandra Road area at $850-1,300 psf. The property giant has sold more than 390 of the 490 units it has released to date in the 1,040-unit, 99-year leasehold condo.
A CapitaLand spokeswoman said yesterday that units in the latest phase are priced about 3-5 per cent higher than the phase one units released in September last year (at $850-1,150 psf) as there are more units in the recent batch on higher floors or with better facing.
TID Pte Ltd - a joint venture between Hong Leong Group Singapore and Japan's Mitsui Fudosan - also found buyers for 23 of the 40 units it released last week at its 65-unit Nathan Suites. The units fetched prices ranging from slightly below $2,000 psf to $2,300 psf; the average price achieved is $2,100 psf.
The 24-storey freehold project at Nathan Road, opposite the Malaysian High Commission, comprises two, three and four-bedroom apartments as well as penthouses ranging from about 915 sq ft to 4,800 sq ft.
Meanwhile, at Sentosa Cove, Ho Bee and IOI sold six units at The Seascape last week, taking total sales in the project to 31, while City Developments Ltd (CDL) sold another five units of The Residences at W Singapore Sentosa Cove, taking sales to 19 units. CDL is selling its development at $2,500-3,000 psf while units at Seascape cost $2,619-2,880 psf, based on earlier reports.
Next week, Tiong Aik group is expected to preview Starlight Suites at River Valley Close. The freehold 35-storey condo could be priced at about $2,000 psf on average. Starlight Suites has a total of 105 units, comprising one bedders to a four-bedroom penthouse. Unit sizes range from 560 sq ft to 3,401 sq ft.
This week, though, the spotlight will fall along Geylang River, where UOL will preview its Waterbank at Dakota, which is next to the Dakota MRT Station that is slated to open later this month.
Market watchers say that this would be probably the first residential project to come on the market without bay windows and planter boxes, leaving more net liveable area for residents.
A ruling that took effect on Jan 1, 2009, scrapped the exemption of these features from gross floor area for submissions for provisional permission.
UOL is expected to release about 200 of the project's total of 616 units initially. Unit sizes range from 484 sq ft for a one bedder to 2,820 sq ft for a penthouse. Next door, NTUC Choice Homes and Ho Bee are left with about 50 units at Dakota Residences comprising mostly four bedders facing the river. The developers began selling the project, which has a total of 348 units, in June 2008 at about $970 psf on average but trimmed prices by 5-8 per cent during last year's relaunch.
Joseph Tan, CB Richard Ellis executive director (residential), notes that developers have revved up overseas marketing campaigns in places such as Hong Kong, Jakarta, Shanghai and Beijing of late to ride on a pick-up in foreign buying interest.
DTZ executive director (consulting) Ong Choon Fah says that developers' launch strategies in the coming months will differ depending on the market segment they cater to.
For instance, demand from foreign buyers is more significant at the high end than in the other segments. Developers of such projects are more likely to calibrate launches, ensuring that supply keeps pace with a much smaller pool of buyers.
For mass and mid-market projects, on the other hand, developers would be more inclined to push out projects as buying interest remains strong in these segments.
Developers also face greater competition in the mass market category as the government releases new sites, whereas in the luxury sector, new land supply will be introduced at a slower clip, given the huge price gap between buyers' and sellers' expectations for en bloc sales.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Waterbank at Dakota: This is probably the first residential project to come on the market without bay windows and planter boxes, leaving more net liveable area for residents
BT : United Engineers buys $25m property
Business Times - 06 Apr 2010
United Engineers buys $25m property
By EMILYN YAP
UNITED Engineers (UE) has bought two industrial buildings at Ang Mo Kio for about $25 million, as part of plans to grow its portfolio in build-to-suit properties.
Motorola owned the two buildings - Motorola Innovation Centre and Motorola Excellence Centre. They will collectively be known as UE BizHub Central after the ownership change.
The two complexes have a total gross floor area (GFA) of 378,426 sq ft. UE will centralise most of its business operations there by the end of the year. This means its headquarters at UE Square will move.
The company also aims to build a new wing at UE BizHub Central. This will raise GFA up to 500,000 sq ft, subject to planning approval.
UE is expanding its build-to-suit footprint, said the divisional managing director of its property division, David Liew. 'We are looking out for other potential sites in Singapore which we could develop into build-to-suit, integrated space solutions under the brand name UE BizHub.'
UE owns another property under that brand, called UE BizHub East. This property is scheduled for completion in 2013 and will comprise 611,500 sq ft of office space, 26,400 sq ft of convention space and 250 hotel rooms or service apartments.
UE does not expect the acquisition of UE BizHub Central to have a material impact on its net earnings or net tangible assets per share this financial year. The counter gained 14 cents yesterday to close at $2.51.
Separately, private developer KNG Development has 80 factory and warehouse units in Kaki Bukit Industrial Estate for sale.
The units will be at the upcoming four-storey ramp-up industrial building, First East Centre. Selling prices start at $356,000. Given that each unit measures 1,800 sq ft or more, the price starts about $198 per sq ft.
Colliers International is marketing First East Centre. According to its director (industrial) Tan Boon Leong, monthly rents in the area are around $1.50 psf.
The units make an attractive investment because rental returns can reach 9 per cent, he said. Also, First East Centre is zoned Business 2 and will appeal to a wide tenant base, such as companies in vehicle repair and servicing.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Centralised: UE will move most of its business operations to UE BizHub by the end of the year
United Engineers buys $25m property
By EMILYN YAP
UNITED Engineers (UE) has bought two industrial buildings at Ang Mo Kio for about $25 million, as part of plans to grow its portfolio in build-to-suit properties.
Motorola owned the two buildings - Motorola Innovation Centre and Motorola Excellence Centre. They will collectively be known as UE BizHub Central after the ownership change.
The two complexes have a total gross floor area (GFA) of 378,426 sq ft. UE will centralise most of its business operations there by the end of the year. This means its headquarters at UE Square will move.
The company also aims to build a new wing at UE BizHub Central. This will raise GFA up to 500,000 sq ft, subject to planning approval.
UE is expanding its build-to-suit footprint, said the divisional managing director of its property division, David Liew. 'We are looking out for other potential sites in Singapore which we could develop into build-to-suit, integrated space solutions under the brand name UE BizHub.'
UE owns another property under that brand, called UE BizHub East. This property is scheduled for completion in 2013 and will comprise 611,500 sq ft of office space, 26,400 sq ft of convention space and 250 hotel rooms or service apartments.
UE does not expect the acquisition of UE BizHub Central to have a material impact on its net earnings or net tangible assets per share this financial year. The counter gained 14 cents yesterday to close at $2.51.
Separately, private developer KNG Development has 80 factory and warehouse units in Kaki Bukit Industrial Estate for sale.
The units will be at the upcoming four-storey ramp-up industrial building, First East Centre. Selling prices start at $356,000. Given that each unit measures 1,800 sq ft or more, the price starts about $198 per sq ft.
Colliers International is marketing First East Centre. According to its director (industrial) Tan Boon Leong, monthly rents in the area are around $1.50 psf.
The units make an attractive investment because rental returns can reach 9 per cent, he said. Also, First East Centre is zoned Business 2 and will appeal to a wide tenant base, such as companies in vehicle repair and servicing.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Centralised: UE will move most of its business operations to UE BizHub by the end of the year
BT : Developers' landbanks running low
Business Times - 05 Apr 2010
Developers' landbanks running low
Many caught by surprise by strong home sales; trend likely to continue this year
By UMA SHANKARI
(SINGAPORE) Major developers, caught by surprise by strong home sales in the past year, are now faced with fast depleting landbanks.
Research compiled by property firm DTZ shows that out of 16 major developers in Singapore, half had less than 1,000 residential units left in their landbank as of end-February this year. Another five developers had between 1,000 and 2,000 units.
The numbers do not take into account strong home sales in March - which means that many developers' landbanks would have shrunk further by the end of last month.
Sales in March include all 202 units in Hong Leong's 76 @ Shenton. At Sentosa Cove, Ho Bee Investment recently launched Seascape, and City Developments, The Residences at W Singapore Sentosa Cove.
Analysts said that developers put off buying sites during the downturn, when the outlook for the property market was bleak.
'During 2008 and 2009, many developers did not add sites to their landbanks,' said Chua Chor Hoon, head of DTZ's South-east Asia research team. 'Hence some were suddenly low on inventory when demand rose and they brought forward their launches.'
In late February, Real Estate Developers' Association of Singapore (Redas) president Simon Cheong warned that many developers are now facing depleting land banks following brisk home sales in recent months. Developers, he said, were surprised at the speed of the recovery in the property market.
The hunt for fresh residential sites has led to a spike in both the price and the number of bids for state land tenders.
In December last year, for example, a landed housing site at Jurong West put up for sale by the government drew a whopping 32 bids. The winning bid of $38.5 million, or $254 per sq ft of land area, came from Chappelis, a unit of Wee Cho Yaw's privately held Kheng Leong. At other tenders, the top bids were sharply higher than analysts' estimates.
In response to the intense competition for sites, the government has in recent months stepped up land sales. More residential sites are also likely to be added to the second half 2010 government land sales programme.
'Tender bids last year were aggressive,' noted Ms Chua. 'We expect competition to be less aggressive this year as can be seen from the less aggressive, though not low, bids in the first quarter.'
But the hunt for new residential sites is likely to continue unabated in the short term.
Boutique property group EL Development, which launched and sold-out a few high-profile projects last year, has just one more development (with 32 units) left in its portfolio.
'We have been looking to acquire new sites for a while now but we have not been successful so far,' said managing director Lim Yew Soon. 'It (business sustainability) is really a pressing issue for us. We have been looking very aggressively for new sites over the last few months.'
UOL Group's chief operating officer Liam Wee Sin also said that his group is looking to replenish its landbank. But he said that his group gets its income from a variety of sources such as residential sales, rental income from its commercial properties and its hospitality business. So the company's need is not as compelling.
'We will look at the merits of each and every site put up for sale and then consider if we need to replenish,' Mr Liam said. UOL has 1,074 units left in its landbank, according to DTZ.
Other developers are worse-off. DTZ's research shows that Singapore Land had just 206 units left in its landbank as of end-February while Wheelock Properties had 209 units.
The 16 developers' landbanks amount to 21,886 units in all, which means that they hold over half of all the unsold residential supply in the pipeline.
Official figures from the Urban Redevelopment Authority show that there were 34,234 unsold, uncompleted units of private housing in the pipeline as of end-2009. But this number does not include projects without planning approvals.
For the year ahead, developers expect home sales to remain strong. Some 1,480 new homes were sold in January this year, followed by another 1,196 units in February - pushing the estimated number of new home sales in Q1 to about 4,000 units.
Demand for new homes is expected to be around 3,000 units for the second quarter, analysts said.
The buying activity has however moved slightly to the high-end and luxury segments, where developers have a higher proportion of unsold units, says Tay Huey Ying, Colliers' director for research and advisory.
That will work in some developers' favour. 'Low landbanks are really an issue for the mass market but for the high-end segment, developers still have ample supply because of all the collective sale sites they bought during the last boom,' Ms Tay said. 'But high-end landbanks will also run out if sites are hard to come by.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Developers' landbanks running low
Many caught by surprise by strong home sales; trend likely to continue this year
By UMA SHANKARI
(SINGAPORE) Major developers, caught by surprise by strong home sales in the past year, are now faced with fast depleting landbanks.
Research compiled by property firm DTZ shows that out of 16 major developers in Singapore, half had less than 1,000 residential units left in their landbank as of end-February this year. Another five developers had between 1,000 and 2,000 units.
The numbers do not take into account strong home sales in March - which means that many developers' landbanks would have shrunk further by the end of last month.
Sales in March include all 202 units in Hong Leong's 76 @ Shenton. At Sentosa Cove, Ho Bee Investment recently launched Seascape, and City Developments, The Residences at W Singapore Sentosa Cove.
Analysts said that developers put off buying sites during the downturn, when the outlook for the property market was bleak.
'During 2008 and 2009, many developers did not add sites to their landbanks,' said Chua Chor Hoon, head of DTZ's South-east Asia research team. 'Hence some were suddenly low on inventory when demand rose and they brought forward their launches.'
In late February, Real Estate Developers' Association of Singapore (Redas) president Simon Cheong warned that many developers are now facing depleting land banks following brisk home sales in recent months. Developers, he said, were surprised at the speed of the recovery in the property market.
The hunt for fresh residential sites has led to a spike in both the price and the number of bids for state land tenders.
In December last year, for example, a landed housing site at Jurong West put up for sale by the government drew a whopping 32 bids. The winning bid of $38.5 million, or $254 per sq ft of land area, came from Chappelis, a unit of Wee Cho Yaw's privately held Kheng Leong. At other tenders, the top bids were sharply higher than analysts' estimates.
In response to the intense competition for sites, the government has in recent months stepped up land sales. More residential sites are also likely to be added to the second half 2010 government land sales programme.
'Tender bids last year were aggressive,' noted Ms Chua. 'We expect competition to be less aggressive this year as can be seen from the less aggressive, though not low, bids in the first quarter.'
But the hunt for new residential sites is likely to continue unabated in the short term.
Boutique property group EL Development, which launched and sold-out a few high-profile projects last year, has just one more development (with 32 units) left in its portfolio.
'We have been looking to acquire new sites for a while now but we have not been successful so far,' said managing director Lim Yew Soon. 'It (business sustainability) is really a pressing issue for us. We have been looking very aggressively for new sites over the last few months.'
UOL Group's chief operating officer Liam Wee Sin also said that his group is looking to replenish its landbank. But he said that his group gets its income from a variety of sources such as residential sales, rental income from its commercial properties and its hospitality business. So the company's need is not as compelling.
'We will look at the merits of each and every site put up for sale and then consider if we need to replenish,' Mr Liam said. UOL has 1,074 units left in its landbank, according to DTZ.
Other developers are worse-off. DTZ's research shows that Singapore Land had just 206 units left in its landbank as of end-February while Wheelock Properties had 209 units.
The 16 developers' landbanks amount to 21,886 units in all, which means that they hold over half of all the unsold residential supply in the pipeline.
Official figures from the Urban Redevelopment Authority show that there were 34,234 unsold, uncompleted units of private housing in the pipeline as of end-2009. But this number does not include projects without planning approvals.
For the year ahead, developers expect home sales to remain strong. Some 1,480 new homes were sold in January this year, followed by another 1,196 units in February - pushing the estimated number of new home sales in Q1 to about 4,000 units.
Demand for new homes is expected to be around 3,000 units for the second quarter, analysts said.
The buying activity has however moved slightly to the high-end and luxury segments, where developers have a higher proportion of unsold units, says Tay Huey Ying, Colliers' director for research and advisory.
That will work in some developers' favour. 'Low landbanks are really an issue for the mass market but for the high-end segment, developers still have ample supply because of all the collective sale sites they bought during the last boom,' Ms Tay said. 'But high-end landbanks will also run out if sites are hard to come by.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : The right balance
Business Times - 05 Apr 2010
THIS WEEK'S TOPIC
The right balance
Should the government intervene in the property market or leave it to free market forces? Why?
Tan Tiong Cheng
Chairman
Knight Frank Pte Ltd
INTERVENING in the property market is a little like kite flying.
For the kite to be flightworthy, all the key components that go into its making have to be in the right balance. Miss one critical element and the kite will not take off. Then when launching the kite, the string should be let loose just enough for its ascent. Release too fast and the kite will go out of control and may crash. If it dips, pull the string a bit to give it some lift. But tug too hard and the string breaks. All this while, watch out for unpredictable wind currents.
Managing the property market is an unenviable task. The majority of Singaporeans are homeowners. What happens to the property market also affects the economy, so government intervention is a given. But perhaps what will help the market is more accurate data on price, as well as demand and supply trends. The kite flyer can then pay attention to the right things.
Lim Choo Leng
Managing Director
HSL Constructor Pte Ltd
I AGREE there must be some control, but current controls such as the imposition of stamp duty if the land is sold within a year appears to benefit the government more than those bidding for land plots.
A system where land is always allocated to the highest bidder is not one that is fair to would-be purchasers. A better way would be to ask for a development plan as well as offer price, and then award the land to the one with the fairest offer.
In general, the property market can only be controlled if the government does not have its own bottom line to consider.
Sim Giok Lak
Chairman
Zicom Group Ltd
LAND is a scarce commodity in Singapore. The government has the responsibility to ensure that the best prices or benefits are obtained from state land as these add to our country's reserves.
At the same time, the government has to moderate the effect of such prices so as to ensure that the citizens can afford the housing built on it and property rentals are competitive for businesses to operate and both local and foreign talent can afford them and continue to stay.
Developers, as businesses, are focused on maximising profits. If they get land at cheap prices, they are not obliged to sell the properties cheap.
During the last nine months, the rate of increase in property prices has run ahead of the increase in construction and land costs. This is not because developers have come out with cutting edge designs or innovations that change the whole living style that justify the rapid increases, nor are there really any housing shortages. It was primarily driven by a strong global economic recovery coupled with high liquidity and low interest rates.
In effect, developers who have sat on their property launches which they withheld when times were bad, benefited from the bonanza without any real effort.
In the three years preceding the global economic crisis, developers also reaped huge profits from an economic boom and as a result, most of them have been armed with very strong balance sheets. This has enabled them to withhold and time their property launches to maximise their gain.
I do not believe that, had any developers got the two properties mentioned by Mr Simon Cheong at below the government's reserve prices, they would reduce their margins and mark down their prices below comparable properties bought for higher prices if the demand is strong.
Although it was said that private properties represent about 16 per cent of the housing market, the rise and fall of this market is linked closely to the mass market and to some extent the commercial and industrial real estate sector as well.
During the global economic crisis the government very boldly and promptly launched a slew of stimulus measures amounting to $21 billion that helped industries across all sectors. The per capita amount of these measures far exceeds many other bigger countries' measures. As a result, we succeeded in minimising local business failures and managed to control retrenchments.
As a local company, we are thankful for these measures. I believe the profits from land sales judiciously managed have helped to strengthen our reserves so that we could afford these stimulus measures in such bold strokes.
Singapore has limited land resources compared with countries such as Australia which has a huge land mass and a relatively small population base. In these countries, governments have not found it necessary to manage land prices as it is not a scarce commodity.
As a private business, I would like less government involvement in businesses that the private sector is engaged in. Thailand has land control policies but government's involvement in business is minimal. Notwithstanding political turmoil in recent years, the economy continues to grow all these years as private enterprises form the main engine of growth. However, in the case of the property market, I believe government's continuing involvement in managing land prices is necessary, in view of our constraints.
As a matter of better transparency, the government should disclose the reserve price for land being tendered, although it would generally not bind itself to accept any prices tendered. Prompt statistical analysis of housing data, property sales and price information, published by the government and made readily available to help the genuine public buyers to make informed decisions would be useful tools.
Liu Chunlin
CEO
K&C Protective Technologies Pte Ltd
PRIOR to 2008, there would have been greater unreserved advocacy of a free market mechanism. But as the financial crisis of 2008 and the subsequent government bailout plans in the US and other countries have shown, untrammelled free market has its pitfalls.
In Singapore, we need to capitalise on the robust market mechanism by allowing each of the stakeholders relative play. The key players are the government as the largest land bank holder, the developers and banks and the consumers which include overseas buyers who are allowed to buy certain categories of properties.
What is important is creating a fair playing field for all for the benefit of a stable market. There should be a win-win-win outcome.
Hence in this context, I am in favour of the current 'managed' free market where the government gets a fair value for state land sold, the developers make a reasonable profit without manipulating the market and where citizens and consumers can afford to buy and own properties in tandem with economic prosperity.
Anything else holds the danger of grievous damage to the market, which we can least afford in a small open economy like Singapore.
Krishna Ramachandra
Managing Director
Arfat Selvam Alliance LLC
THE simple answer is the government should intervene when it feels it is appropriate to do so. There are no two ways about that. The reality is the relevant ministries have all the relevant housing and financing data and economic indicators at their disposal which should allow them to take appropriate and properly weighted interventionist measures.
However, I say this is the simple answer purely because there is more to managing a property bubble than introducing interventionist policies or initiatives. I believe the recent comments by the Redas president perhaps reflects the fears and frustrations of property developers trying to develop a market amid a regulated and a not readily clear bidding system.
Whatever the reason, the government should take heed of the comments and better implement policies and initiatives as they will have an immediate impact on property developers.
Ultimately the property developers are the life-blood of the property market and the manner in which their businesses are allowed to grow has to be considered as the bubble is pierced.
David Leong
Managing Director
PeopleWorldwide Consulting Pte Ltd
The macro-economic effect of bubbles can be widespread and detrimental if not managed and intervened appropriately. There is no such thing as a good bubble. It is simply a temporary euphoria that can cause an uplift of market sentiments; but if prolonged, the bubble can lead to irrational exuberance that will certainly lead to a painful collapse of prices.
Even with cooling measures put in place by MND, the prices of properties are persistently testing new highs. The pervasive low interest rate regime has a great effect on buyers' sentiment.
Property as an asset class becomes desirable as it is a good hedge and has good capital gain potential. Hot money from around Asia, the Middle East and Europe looking for a safe investment can bet on the property market. The government's intervention approach should be to curb excessive speculation where the velocity of price increase is slowed down - but does not limit buyers' investment direction.
Since human nature is both imitative and inventive, it can be detrimental to the whole property market when prices crash. This will affect genuine buyers for owner-occupied properties, and the government's intervention is needed to ensure that genuine buyers are not sidelined to a point where prices are artificially high and out of reach to them. This will be a fundamental error in policy and property investments are not perpetual money machines - where prices move upwards in a straight line.
Now everyone seems to suffer from what I call pro forma disease - that is, taking the sharp rise in prices and projecting them endlessly into the future.
When your hairdressers and men in coffee shops start talking about investing in property, it is the start of the pro forma disease and can lead to irrational euphoria.
A certain degree of intervention is needed by the government to manage the velocity of price shifts through interest rates and taxes so that bubbles do not blow up to cause asset deflations.
Tan Kok Leong
Principal
TKL Consulting
IT is the duty and responsibility of government to rule and conduct policy for the common good. This includes measures to moderate soaring property prices.
Each property cycle averages 10 years. It has different life duration, traits, dimension, and operates under different fiscal, monetary and credit environment. Most of the property cycles in the past unfortunately needed intervention for fear of property bubbles resulting from an increase in land supply, interest adjustments, tax measures, and loan amount manipulation.
An active property market with a stable, moderate and sustainable growth in price is good for the economy.
R Dhinakaran
Managing Director
Jay Gee Enterprises Pte Ltd
WHILE the free market economy appears to be fairer, market play in practice may not always lead to the right solution because of information asymmetry in the market.
Governments or regulators have a significant role to play in making sure the market play remains fair and transparent. The regulator is entrusted with this responsibility to make sure that the information asymmetry does not lead to bubble formation.
The government has also stayed clear of trying to play a controlling role in the already spiralling property prices.
The recent measures, if anything, are only trying to make it less interesting for speculators. The additional costs on stamp duty and stricter lending norms are not in any way affecting genuine buyers of private property - admittedly a relatively small and niche segment.
However, unbridled market play is certainly a recipe for trouble as we have just witnessed across the world when the ‘free market' in the financial sector was taken for granted and caution was thrown to the wind.
Lim Soon Hock
Managing Director
PLAN-B ICAG Pte Ltd
I CONSIDER housing to be a basic need of our citizens that our government needs to be engaged in constantly, as in other essential services, especially public housing. In this regard, properties should be affordable, relative to the state of the economy.
It is also the only way for Singaporeans to own an appreciable asset, a point that is often highlighted by our government.
I think when our government intervenes in the property market, it has a larger objective in mind: moderate property prices and ensure that the market does not get overheated, out of synchronisation with the health of the economy, to the extent of creating a bubble.
Should there be one and it bursts, the consequences on our economy, being open, will be disastrous, as we have witnessed in the recent sub-prime crisis.
I do not think the government has any intention now or in the past to depress property prices. It is not a prudent step to take.
Relative to the market forces, the government's hand hitherto, remains weak.
This is borne, yet again, by the overall price increases of 2-5 per cent and the doubling of sales of new private homes to nearly 4,000 in the first quarter, according to the recent report by CB Richard Ellis.
Sam Yap S G
Group Executive Chairman & Co-Founder
Cherie Hearts Group International Pte Ltd
MY personal view is that the government should continue to play an active role in the property market. It should be recognised that the housing market is a laggard, with immense information asymmetry.
In Singapore's context, where the supply of housing is very limited due to our land constraints and there are few market players in terms of developers, the industry, if left to market forces, would certainly tilt in favour of the developers at the expense of ‘ignorant' consumers.
In addition, it is naïve to suggest that private housing prices should be left to market forces since the segment serves only 16.5 per cent of the overall population - clearly, this is not the case as public and private housing prices are closely intertwined.
I feel that government intervention in the property market, while not necessarily perfect in terms of matching demand to supply, is the better choice between the devil and the deep blue sea. This is not least because the availability of affordable, quality housing is of utmost importance to the social stability of our nation.
Teng Yeow Heng Michael
Managing Director
Corporate Turnaround Centre Pte Ltd
I CAN understand the concerns of the government to prevent a property bubble from escalating further with its dire consequences should it burst.
However, the governmental measures taken so far have been rather reactive in addressing the symptoms rather than the root problem. Property prices continue to rise notwithstanding the measures taken so far, and could scare away foreign investors because of the uncertainties about what the government may do next.
I am glad that the government recently announced that it will not intervene in the private property sector. The rise of property prices is due to external factors such as low interest rates, confidence in economic recovery as well as internal factors such as pent-up demand from en bloc sales, increase of foreign immigrants, Singaporean desires to own property and shortage of HDB apartments.
The government can help to address the last factor which is a major problem. It is crucial to build more HDB flats quicker and cheaper. Many Singaporeans are unable to buy HDB flats in the primary market because they have exceeded the income limit. Many are still on the waiting list.
In addition, there are many private property owners who are retirees or unemployed but unable to downgrade to HDB because they have to buy HDB apartments from the secondary market.
Prices for HDB flats in the secondary market have also risen a lot. The increase in prices of property is a good thing in tandem with the economic recovery but what needs to be done is to ensure that Singaporeans do not get into financial trouble because they buy properties that they cannot afford. Supplying more affordable HDB flats in the primary market will help these Singaporeans from over-committing themselves financially.
Roland Mathys
CEO
Jurong Cement Ltd
WHILE in theory absolutely free markets are desirable, in reality this is in many cases not in the interest of society or a country.
The recent financial crisis is obviously the best example, where largely unregulated risk-taking resulted in huge losses with unprecedented consequences for individuals, societies and countries. Many countries will possibly never be able to pay back their debts, unless they increase taxes to levels which will stifle economic growth with the corresponding consequences for their citizens.
There is no doubt in my mind that the Singapore property market has already entered a highly speculative stage. And as soon as a market is in this phase, greed is the predominant driving force. But the government is very well aware that record-low interest rates, which sooner or later will rise, unsustainable low rental-yields and high leverage pose a significant risk for many of these investments.
What the government is trying to do now is to protect the individual and also the entire country from a bubble that may have wide-ranging consequences in case it bursts. In that sense, I think it is a wise move and a necessity for the government to step in and prevent an even greater bubble to form.
Dora Hoan
Group CEO
Best World International
IN A free market economy, theoretically, the highs and lows in the market should be affected only by supply and demand. Following this line of argument, any institution with enough clout to sway the movement of the market - like the government - should stay out of the way and let the market run free.
However, we witnessed how unbridled free market capitalism without responsible government regulation provides no guarantee that it is able to remain free on its own.
Over the past year, there has been much discussion about how the financial crisis exposed weaknesses in the free-market theory itself. While I believe that free enterprise remains the most efficient system ever created, we have learned the hard way that not everything can be solved by deregulation, free competition and the market.
Let me emphasise though that it was not the free-market model that failed - rather, it was inherent greed, speculation and mismanagement among the market participants themselves.
Throughout the world, we have seen renewed recognition of the essential role played by government intervention. The sub-prime mortgage fallout is an excellent example of what a government can do to try to keep the economy from plunging into a nosedive. Likewise, we have seen various modes of government intervention in modern countries with a long tradition of democracy.
In the case of Singapore's property market, I believe that we need to trust our national leadership's intentions to regulate and avert any manipulations in the market system and avoid excessive hikes in prices. I am of the opinion that this kind of control is essential both as a corrective and a preventive measure for as long as it is applied to specific situations, temporarily, sparingly and with great circumspection. It is not so much about 'more or less government' in markets, as it is about smart, enlightened and decisive governance.
Joshua Yim
CEO
ACHIEVE Group
THE financial tsunamis that began in the US stemmed from the collapse of the housing market, which was driven by greed that resulted from the lack of a proper regulatory framework. So-called free market forces enabled the US property market to boom since 2004 and this lack of regulation is why the financial crisis arose in the first place. Thus, we should learn these lessons from the US and not repeat the same mistakes.
That is why I believe we need to have a regulatory system to monitor the property market closely in order to prevent such a housing bubble from forming and then bursting and shattering the foundations of our economy.
As a business person, I certainly acknowledge the need to allow free market forces of demand and supply to determine the value of assets. Yet with fiscal intervention by the government, since the aim is to cool down speculation in the market, I feel that is definitely the right thing to do.
Ultimately, the key is to strike the happy balance of implementing control measures in tandem with free market forces driven by individual needs and demands.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
THIS WEEK'S TOPIC
The right balance
Should the government intervene in the property market or leave it to free market forces? Why?
Tan Tiong Cheng
Chairman
Knight Frank Pte Ltd
INTERVENING in the property market is a little like kite flying.
For the kite to be flightworthy, all the key components that go into its making have to be in the right balance. Miss one critical element and the kite will not take off. Then when launching the kite, the string should be let loose just enough for its ascent. Release too fast and the kite will go out of control and may crash. If it dips, pull the string a bit to give it some lift. But tug too hard and the string breaks. All this while, watch out for unpredictable wind currents.
Managing the property market is an unenviable task. The majority of Singaporeans are homeowners. What happens to the property market also affects the economy, so government intervention is a given. But perhaps what will help the market is more accurate data on price, as well as demand and supply trends. The kite flyer can then pay attention to the right things.
Lim Choo Leng
Managing Director
HSL Constructor Pte Ltd
I AGREE there must be some control, but current controls such as the imposition of stamp duty if the land is sold within a year appears to benefit the government more than those bidding for land plots.
A system where land is always allocated to the highest bidder is not one that is fair to would-be purchasers. A better way would be to ask for a development plan as well as offer price, and then award the land to the one with the fairest offer.
In general, the property market can only be controlled if the government does not have its own bottom line to consider.
Sim Giok Lak
Chairman
Zicom Group Ltd
LAND is a scarce commodity in Singapore. The government has the responsibility to ensure that the best prices or benefits are obtained from state land as these add to our country's reserves.
At the same time, the government has to moderate the effect of such prices so as to ensure that the citizens can afford the housing built on it and property rentals are competitive for businesses to operate and both local and foreign talent can afford them and continue to stay.
Developers, as businesses, are focused on maximising profits. If they get land at cheap prices, they are not obliged to sell the properties cheap.
During the last nine months, the rate of increase in property prices has run ahead of the increase in construction and land costs. This is not because developers have come out with cutting edge designs or innovations that change the whole living style that justify the rapid increases, nor are there really any housing shortages. It was primarily driven by a strong global economic recovery coupled with high liquidity and low interest rates.
In effect, developers who have sat on their property launches which they withheld when times were bad, benefited from the bonanza without any real effort.
In the three years preceding the global economic crisis, developers also reaped huge profits from an economic boom and as a result, most of them have been armed with very strong balance sheets. This has enabled them to withhold and time their property launches to maximise their gain.
I do not believe that, had any developers got the two properties mentioned by Mr Simon Cheong at below the government's reserve prices, they would reduce their margins and mark down their prices below comparable properties bought for higher prices if the demand is strong.
Although it was said that private properties represent about 16 per cent of the housing market, the rise and fall of this market is linked closely to the mass market and to some extent the commercial and industrial real estate sector as well.
During the global economic crisis the government very boldly and promptly launched a slew of stimulus measures amounting to $21 billion that helped industries across all sectors. The per capita amount of these measures far exceeds many other bigger countries' measures. As a result, we succeeded in minimising local business failures and managed to control retrenchments.
As a local company, we are thankful for these measures. I believe the profits from land sales judiciously managed have helped to strengthen our reserves so that we could afford these stimulus measures in such bold strokes.
Singapore has limited land resources compared with countries such as Australia which has a huge land mass and a relatively small population base. In these countries, governments have not found it necessary to manage land prices as it is not a scarce commodity.
As a private business, I would like less government involvement in businesses that the private sector is engaged in. Thailand has land control policies but government's involvement in business is minimal. Notwithstanding political turmoil in recent years, the economy continues to grow all these years as private enterprises form the main engine of growth. However, in the case of the property market, I believe government's continuing involvement in managing land prices is necessary, in view of our constraints.
As a matter of better transparency, the government should disclose the reserve price for land being tendered, although it would generally not bind itself to accept any prices tendered. Prompt statistical analysis of housing data, property sales and price information, published by the government and made readily available to help the genuine public buyers to make informed decisions would be useful tools.
Liu Chunlin
CEO
K&C Protective Technologies Pte Ltd
PRIOR to 2008, there would have been greater unreserved advocacy of a free market mechanism. But as the financial crisis of 2008 and the subsequent government bailout plans in the US and other countries have shown, untrammelled free market has its pitfalls.
In Singapore, we need to capitalise on the robust market mechanism by allowing each of the stakeholders relative play. The key players are the government as the largest land bank holder, the developers and banks and the consumers which include overseas buyers who are allowed to buy certain categories of properties.
What is important is creating a fair playing field for all for the benefit of a stable market. There should be a win-win-win outcome.
Hence in this context, I am in favour of the current 'managed' free market where the government gets a fair value for state land sold, the developers make a reasonable profit without manipulating the market and where citizens and consumers can afford to buy and own properties in tandem with economic prosperity.
Anything else holds the danger of grievous damage to the market, which we can least afford in a small open economy like Singapore.
Krishna Ramachandra
Managing Director
Arfat Selvam Alliance LLC
THE simple answer is the government should intervene when it feels it is appropriate to do so. There are no two ways about that. The reality is the relevant ministries have all the relevant housing and financing data and economic indicators at their disposal which should allow them to take appropriate and properly weighted interventionist measures.
However, I say this is the simple answer purely because there is more to managing a property bubble than introducing interventionist policies or initiatives. I believe the recent comments by the Redas president perhaps reflects the fears and frustrations of property developers trying to develop a market amid a regulated and a not readily clear bidding system.
Whatever the reason, the government should take heed of the comments and better implement policies and initiatives as they will have an immediate impact on property developers.
Ultimately the property developers are the life-blood of the property market and the manner in which their businesses are allowed to grow has to be considered as the bubble is pierced.
David Leong
Managing Director
PeopleWorldwide Consulting Pte Ltd
The macro-economic effect of bubbles can be widespread and detrimental if not managed and intervened appropriately. There is no such thing as a good bubble. It is simply a temporary euphoria that can cause an uplift of market sentiments; but if prolonged, the bubble can lead to irrational exuberance that will certainly lead to a painful collapse of prices.
Even with cooling measures put in place by MND, the prices of properties are persistently testing new highs. The pervasive low interest rate regime has a great effect on buyers' sentiment.
Property as an asset class becomes desirable as it is a good hedge and has good capital gain potential. Hot money from around Asia, the Middle East and Europe looking for a safe investment can bet on the property market. The government's intervention approach should be to curb excessive speculation where the velocity of price increase is slowed down - but does not limit buyers' investment direction.
Since human nature is both imitative and inventive, it can be detrimental to the whole property market when prices crash. This will affect genuine buyers for owner-occupied properties, and the government's intervention is needed to ensure that genuine buyers are not sidelined to a point where prices are artificially high and out of reach to them. This will be a fundamental error in policy and property investments are not perpetual money machines - where prices move upwards in a straight line.
Now everyone seems to suffer from what I call pro forma disease - that is, taking the sharp rise in prices and projecting them endlessly into the future.
When your hairdressers and men in coffee shops start talking about investing in property, it is the start of the pro forma disease and can lead to irrational euphoria.
A certain degree of intervention is needed by the government to manage the velocity of price shifts through interest rates and taxes so that bubbles do not blow up to cause asset deflations.
Tan Kok Leong
Principal
TKL Consulting
IT is the duty and responsibility of government to rule and conduct policy for the common good. This includes measures to moderate soaring property prices.
Each property cycle averages 10 years. It has different life duration, traits, dimension, and operates under different fiscal, monetary and credit environment. Most of the property cycles in the past unfortunately needed intervention for fear of property bubbles resulting from an increase in land supply, interest adjustments, tax measures, and loan amount manipulation.
An active property market with a stable, moderate and sustainable growth in price is good for the economy.
R Dhinakaran
Managing Director
Jay Gee Enterprises Pte Ltd
WHILE the free market economy appears to be fairer, market play in practice may not always lead to the right solution because of information asymmetry in the market.
Governments or regulators have a significant role to play in making sure the market play remains fair and transparent. The regulator is entrusted with this responsibility to make sure that the information asymmetry does not lead to bubble formation.
The government has also stayed clear of trying to play a controlling role in the already spiralling property prices.
The recent measures, if anything, are only trying to make it less interesting for speculators. The additional costs on stamp duty and stricter lending norms are not in any way affecting genuine buyers of private property - admittedly a relatively small and niche segment.
However, unbridled market play is certainly a recipe for trouble as we have just witnessed across the world when the ‘free market' in the financial sector was taken for granted and caution was thrown to the wind.
Lim Soon Hock
Managing Director
PLAN-B ICAG Pte Ltd
I CONSIDER housing to be a basic need of our citizens that our government needs to be engaged in constantly, as in other essential services, especially public housing. In this regard, properties should be affordable, relative to the state of the economy.
It is also the only way for Singaporeans to own an appreciable asset, a point that is often highlighted by our government.
I think when our government intervenes in the property market, it has a larger objective in mind: moderate property prices and ensure that the market does not get overheated, out of synchronisation with the health of the economy, to the extent of creating a bubble.
Should there be one and it bursts, the consequences on our economy, being open, will be disastrous, as we have witnessed in the recent sub-prime crisis.
I do not think the government has any intention now or in the past to depress property prices. It is not a prudent step to take.
Relative to the market forces, the government's hand hitherto, remains weak.
This is borne, yet again, by the overall price increases of 2-5 per cent and the doubling of sales of new private homes to nearly 4,000 in the first quarter, according to the recent report by CB Richard Ellis.
Sam Yap S G
Group Executive Chairman & Co-Founder
Cherie Hearts Group International Pte Ltd
MY personal view is that the government should continue to play an active role in the property market. It should be recognised that the housing market is a laggard, with immense information asymmetry.
In Singapore's context, where the supply of housing is very limited due to our land constraints and there are few market players in terms of developers, the industry, if left to market forces, would certainly tilt in favour of the developers at the expense of ‘ignorant' consumers.
In addition, it is naïve to suggest that private housing prices should be left to market forces since the segment serves only 16.5 per cent of the overall population - clearly, this is not the case as public and private housing prices are closely intertwined.
I feel that government intervention in the property market, while not necessarily perfect in terms of matching demand to supply, is the better choice between the devil and the deep blue sea. This is not least because the availability of affordable, quality housing is of utmost importance to the social stability of our nation.
Teng Yeow Heng Michael
Managing Director
Corporate Turnaround Centre Pte Ltd
I CAN understand the concerns of the government to prevent a property bubble from escalating further with its dire consequences should it burst.
However, the governmental measures taken so far have been rather reactive in addressing the symptoms rather than the root problem. Property prices continue to rise notwithstanding the measures taken so far, and could scare away foreign investors because of the uncertainties about what the government may do next.
I am glad that the government recently announced that it will not intervene in the private property sector. The rise of property prices is due to external factors such as low interest rates, confidence in economic recovery as well as internal factors such as pent-up demand from en bloc sales, increase of foreign immigrants, Singaporean desires to own property and shortage of HDB apartments.
The government can help to address the last factor which is a major problem. It is crucial to build more HDB flats quicker and cheaper. Many Singaporeans are unable to buy HDB flats in the primary market because they have exceeded the income limit. Many are still on the waiting list.
In addition, there are many private property owners who are retirees or unemployed but unable to downgrade to HDB because they have to buy HDB apartments from the secondary market.
Prices for HDB flats in the secondary market have also risen a lot. The increase in prices of property is a good thing in tandem with the economic recovery but what needs to be done is to ensure that Singaporeans do not get into financial trouble because they buy properties that they cannot afford. Supplying more affordable HDB flats in the primary market will help these Singaporeans from over-committing themselves financially.
Roland Mathys
CEO
Jurong Cement Ltd
WHILE in theory absolutely free markets are desirable, in reality this is in many cases not in the interest of society or a country.
The recent financial crisis is obviously the best example, where largely unregulated risk-taking resulted in huge losses with unprecedented consequences for individuals, societies and countries. Many countries will possibly never be able to pay back their debts, unless they increase taxes to levels which will stifle economic growth with the corresponding consequences for their citizens.
There is no doubt in my mind that the Singapore property market has already entered a highly speculative stage. And as soon as a market is in this phase, greed is the predominant driving force. But the government is very well aware that record-low interest rates, which sooner or later will rise, unsustainable low rental-yields and high leverage pose a significant risk for many of these investments.
What the government is trying to do now is to protect the individual and also the entire country from a bubble that may have wide-ranging consequences in case it bursts. In that sense, I think it is a wise move and a necessity for the government to step in and prevent an even greater bubble to form.
Dora Hoan
Group CEO
Best World International
IN A free market economy, theoretically, the highs and lows in the market should be affected only by supply and demand. Following this line of argument, any institution with enough clout to sway the movement of the market - like the government - should stay out of the way and let the market run free.
However, we witnessed how unbridled free market capitalism without responsible government regulation provides no guarantee that it is able to remain free on its own.
Over the past year, there has been much discussion about how the financial crisis exposed weaknesses in the free-market theory itself. While I believe that free enterprise remains the most efficient system ever created, we have learned the hard way that not everything can be solved by deregulation, free competition and the market.
Let me emphasise though that it was not the free-market model that failed - rather, it was inherent greed, speculation and mismanagement among the market participants themselves.
Throughout the world, we have seen renewed recognition of the essential role played by government intervention. The sub-prime mortgage fallout is an excellent example of what a government can do to try to keep the economy from plunging into a nosedive. Likewise, we have seen various modes of government intervention in modern countries with a long tradition of democracy.
In the case of Singapore's property market, I believe that we need to trust our national leadership's intentions to regulate and avert any manipulations in the market system and avoid excessive hikes in prices. I am of the opinion that this kind of control is essential both as a corrective and a preventive measure for as long as it is applied to specific situations, temporarily, sparingly and with great circumspection. It is not so much about 'more or less government' in markets, as it is about smart, enlightened and decisive governance.
Joshua Yim
CEO
ACHIEVE Group
THE financial tsunamis that began in the US stemmed from the collapse of the housing market, which was driven by greed that resulted from the lack of a proper regulatory framework. So-called free market forces enabled the US property market to boom since 2004 and this lack of regulation is why the financial crisis arose in the first place. Thus, we should learn these lessons from the US and not repeat the same mistakes.
That is why I believe we need to have a regulatory system to monitor the property market closely in order to prevent such a housing bubble from forming and then bursting and shattering the foundations of our economy.
As a business person, I certainly acknowledge the need to allow free market forces of demand and supply to determine the value of assets. Yet with fiscal intervention by the government, since the aim is to cool down speculation in the market, I feel that is definitely the right thing to do.
Ultimately, the key is to strike the happy balance of implementing control measures in tandem with free market forces driven by individual needs and demands.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Curbs against speculation hit HDB resale sentiment
Business Times - 05 Apr 2010
Curbs against speculation hit HDB resale sentiment
Agents report drop in number of purchase enquiries and applications
By EMILYN YAP
(SINGAPORE) Recent government measures to curb speculation in HDB flats appear to have affected sentiment in the resale market, at least for now.
Property agents BT spoke to recount cases of buyers walking out of deals shortly after the new rules were announced. A few also observed a drop in the number of purchase enquiries or applications.
The evidence is anecdotal and some agents believe that this is just a kneejerk reaction which will dissipate after buyers have had time to digest the news.
'Every time there is a change of rules, people will wait and see where the market is heading - whether prices are coming down or going up - before they enter the market again,' said C&H Realty managing director Albert Lu.
'Normally there would be a holding back period, maybe two to three months. After that things will be back to normal.'
The government introduced a slew of changes to HDB rules early last month. Key among these was the extension of the minimum occupation period for non-subsidised HDB resale flats to three years. Previously, buyers with HDB loans had to stay 2.5 years in their flats before selling them, or just a year if they used bank loans or had no loans.
HDB had found a growing proportion of flat owners selling their homes within three years of purchase. Many genuine home seekers were worried about speculation driving resale flat prices up.
HSR executive director (agency) Jeffrey Hong said that resale transaction volumes for his firm remain healthy despite the rule change. But right after the news broke, 'a handful' of buyers who had signed the option to purchase form backed out of the deals, forfeiting at most $1,000 in option fees.
Some might have expected resale flat prices to fall and decided to delay their purchases, he reckoned. But prices did not soften and his agents managed to sell the same flats to other people 'very quickly', he added.
An agent who declined to be named made a similar observation - some home seekers were in 'active negotiations' with owners or had even agreed to buy the flats, but changed their minds on the day the government announced the new measure.
Another agency head said that since the rule change, calls from potential buyers to his agents have fallen by as much as 50 per cent in some cases. The number of flat viewings has also dropped.
HDB flash estimates for the first quarter show the number of resale transactions dropping to 8,500 from 8,926 in Q4 2009. But it is not clear when the decrease set in, and if the policy change had a role to play.
Asked if last month's measures have affected the resale market, HDB told BT: 'It too early to say as these measures were announced just about a month ago.'
There are other real estate agencies which say that the rule changes have had no impact so far. ERA Asia-Pacific associate director Eugene Lim noted that it is 'business as usual', while PropNex CEO Mohamed Ismail said that his firm has not seen any kneejerk reaction.
Dennis Wee Properties director Chris Koh made similar observations. 'Genuine buyers don't really care if it is one year or three years,' he said, referring to the extended minimum occupation period.
He added: 'Private property prices are too high today. Once the gap between private property and HDB flats widens...people have got no other option but to go to the HDB market.'
According to government estimates, HDB resale flat prices were 2.7 per cent higher in Q1 than in Q4. But for private residential property, prices rose 5.1 per cent over the same period.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Wait and see: Some agents believe the lull is just a kneejerk reaction which will dissipate after buyers have had time to digest the news. They expect the holding back period to last two to three months, after which things would return to normal
Curbs against speculation hit HDB resale sentiment
Agents report drop in number of purchase enquiries and applications
By EMILYN YAP
(SINGAPORE) Recent government measures to curb speculation in HDB flats appear to have affected sentiment in the resale market, at least for now.
Property agents BT spoke to recount cases of buyers walking out of deals shortly after the new rules were announced. A few also observed a drop in the number of purchase enquiries or applications.
The evidence is anecdotal and some agents believe that this is just a kneejerk reaction which will dissipate after buyers have had time to digest the news.
'Every time there is a change of rules, people will wait and see where the market is heading - whether prices are coming down or going up - before they enter the market again,' said C&H Realty managing director Albert Lu.
'Normally there would be a holding back period, maybe two to three months. After that things will be back to normal.'
The government introduced a slew of changes to HDB rules early last month. Key among these was the extension of the minimum occupation period for non-subsidised HDB resale flats to three years. Previously, buyers with HDB loans had to stay 2.5 years in their flats before selling them, or just a year if they used bank loans or had no loans.
HDB had found a growing proportion of flat owners selling their homes within three years of purchase. Many genuine home seekers were worried about speculation driving resale flat prices up.
HSR executive director (agency) Jeffrey Hong said that resale transaction volumes for his firm remain healthy despite the rule change. But right after the news broke, 'a handful' of buyers who had signed the option to purchase form backed out of the deals, forfeiting at most $1,000 in option fees.
Some might have expected resale flat prices to fall and decided to delay their purchases, he reckoned. But prices did not soften and his agents managed to sell the same flats to other people 'very quickly', he added.
An agent who declined to be named made a similar observation - some home seekers were in 'active negotiations' with owners or had even agreed to buy the flats, but changed their minds on the day the government announced the new measure.
Another agency head said that since the rule change, calls from potential buyers to his agents have fallen by as much as 50 per cent in some cases. The number of flat viewings has also dropped.
HDB flash estimates for the first quarter show the number of resale transactions dropping to 8,500 from 8,926 in Q4 2009. But it is not clear when the decrease set in, and if the policy change had a role to play.
Asked if last month's measures have affected the resale market, HDB told BT: 'It too early to say as these measures were announced just about a month ago.'
There are other real estate agencies which say that the rule changes have had no impact so far. ERA Asia-Pacific associate director Eugene Lim noted that it is 'business as usual', while PropNex CEO Mohamed Ismail said that his firm has not seen any kneejerk reaction.
Dennis Wee Properties director Chris Koh made similar observations. 'Genuine buyers don't really care if it is one year or three years,' he said, referring to the extended minimum occupation period.
He added: 'Private property prices are too high today. Once the gap between private property and HDB flats widens...people have got no other option but to go to the HDB market.'
According to government estimates, HDB resale flat prices were 2.7 per cent higher in Q1 than in Q4. But for private residential property, prices rose 5.1 per cent over the same period.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Wait and see: Some agents believe the lull is just a kneejerk reaction which will dissipate after buyers have had time to digest the news. They expect the holding back period to last two to three months, after which things would return to normal
ST : Bishan maisonette fetches record $900,000
Apr 5, 2010
Bishan maisonette fetches record $900,000
A RARE penthouse maisonette in Bishan Street 24 has become the most expensive HDB flat ever to be sold in Singapore.
Its owner has accepted an offer for $900,000 for the 1,860 sq ft flat - $170,000 above its valuation.
The buyers are an Indian Singaporean couple, according to a report in Lianhe Wanbao yesterday evening.
It said the flat, which is on the 24th floor, was bought by the current owner 10 years ago for $750,000 and has been renovated since then.
The valuation for the 18-year-old executive maisonette, which comes with a roof terrace, was about $730,000. But the owner, a Singaporean, had put it up for sale with an asking price of $950,000.
This transaction just pips the last highest price on record for an HDB flat. In 2008, a 1,614 sq ft executive flat in Queenstown's Mei Ling Street changed hands for $890,000.
Since 2008, HDB resale prices as a whole have risen about 23 per cent to hit one new high after another. Last week, the HDB said resale flat prices rose 2.7 per cent in the first quarter of the year.
The latest record deal in Bishan comes barely a week after a Taiwanese couple paid a record price per sq ft (psf) for a four-room HDB flat in Bain Street at Bras Basah. The 883 sq ft flat, on the 25th floor, cost them $650,000, or $736 psf.
This was $70,000 above valuation for the 30-year-old flat.
Another flat in Strathmore Avenue in Queenstown was nearly sold for $950,000 recently. But the buyer could not get a bank loan to buy the unit - a 24th-storey penthouse like the one in Bishan - which is valued at $875,000.
Even though HDB flat prices appear to be inching towards $1 million, property players said they are unlikely to cross that mark.
Mr Eric Cheng, chief executive of real estate agency ECG Property, said that in order for an HDB flat to hit $1 million, buyers would have to pay $300,000 in cash given the current valuations.
'I doubt we will see people willing to pay that price over the next two years,' he said.
He added that the sale of the Bishan maisonette is not representative of HDB transactions as such large units are very rare. According to HDB data, only 149 flats across the whole of Singapore are bigger than 1,851 sq ft.
'It's not a normal transaction because the buyer could afford a private home with that price but chose to buy this flat for some personal reason instead,' said Mr Cheng.
The Bishan maisonette sale is not representative of HDB transactions as such large units are very rare, says one expert. -- ST PHOTO: MALCOLM MCLEOD
Bishan maisonette fetches record $900,000
A RARE penthouse maisonette in Bishan Street 24 has become the most expensive HDB flat ever to be sold in Singapore.
Its owner has accepted an offer for $900,000 for the 1,860 sq ft flat - $170,000 above its valuation.
The buyers are an Indian Singaporean couple, according to a report in Lianhe Wanbao yesterday evening.
It said the flat, which is on the 24th floor, was bought by the current owner 10 years ago for $750,000 and has been renovated since then.
The valuation for the 18-year-old executive maisonette, which comes with a roof terrace, was about $730,000. But the owner, a Singaporean, had put it up for sale with an asking price of $950,000.
This transaction just pips the last highest price on record for an HDB flat. In 2008, a 1,614 sq ft executive flat in Queenstown's Mei Ling Street changed hands for $890,000.
Since 2008, HDB resale prices as a whole have risen about 23 per cent to hit one new high after another. Last week, the HDB said resale flat prices rose 2.7 per cent in the first quarter of the year.
The latest record deal in Bishan comes barely a week after a Taiwanese couple paid a record price per sq ft (psf) for a four-room HDB flat in Bain Street at Bras Basah. The 883 sq ft flat, on the 25th floor, cost them $650,000, or $736 psf.
This was $70,000 above valuation for the 30-year-old flat.
Another flat in Strathmore Avenue in Queenstown was nearly sold for $950,000 recently. But the buyer could not get a bank loan to buy the unit - a 24th-storey penthouse like the one in Bishan - which is valued at $875,000.
Even though HDB flat prices appear to be inching towards $1 million, property players said they are unlikely to cross that mark.
Mr Eric Cheng, chief executive of real estate agency ECG Property, said that in order for an HDB flat to hit $1 million, buyers would have to pay $300,000 in cash given the current valuations.
'I doubt we will see people willing to pay that price over the next two years,' he said.
He added that the sale of the Bishan maisonette is not representative of HDB transactions as such large units are very rare. According to HDB data, only 149 flats across the whole of Singapore are bigger than 1,851 sq ft.
'It's not a normal transaction because the buyer could afford a private home with that price but chose to buy this flat for some personal reason instead,' said Mr Cheng.
The Bishan maisonette sale is not representative of HDB transactions as such large units are very rare, says one expert. -- ST PHOTO: MALCOLM MCLEOD
ST : Lawyers ordered to return commission
Apr 5, 2010
Lawyers ordered to return commission
Four sued for failing in professional duties over sale of a house in 2002
By Khushwant Singh
A COURT has found that an agreement between Electronic Realty Associates (ERA) and a property owner could result in 'unjust enrichment' for the property agency.
District Judge Francis Tseng has thus ordered four lawyers to return to Mr Simon Suppiah Sunmugam the money they had paid out as commission to the agency.
The lawyers had earlier released $28,000 as commission to ERA from the sale of Mr Suppiah's house.
The 62-year-old private investigator had sued Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low, of the now-defunct law firm Peter Low Tang & Belinda Ang, for failing in their professional duties in connection with a property sale in 2002.
A fifth lawyer, Mr Andrew John Hanam, was found not to be at fault as he was not involved in the agreement. He had been engaged only to act for Mr Suppiah's divorce from Madam Nee Shyan Huey in May 1996.
In his judgment last Wednesday, Judge Tseng said the four lawyers' interpretation of the provisions of the agreement, titled Exclusive Authorisation to Sell, renders the property seller 'at the complete mercy' of ERA and could result in a 'most unfair situation'.
Signed in June 2001 by Madam Nee, 44, an insurance agent, the agreement granted ERA a commission of 2 per cent on the first $1 million of the purchase price and 1 per cent for any amount in excess paid for the matrimonial home in Punggol.
This was payable if the company introduced a buyer or if the property was sold within three months.
After the 90-day period, the agreement would continue from week to week unless terminated by either party.
The proposed selling price was $2.4million, but ERA found a potential buyer who offered only $1.6 million in February the following year.
Mr Suppiah rejected it as too low, and a month later, he found a buyer who was willing to pay $1.75 million.
When the sale was completed, Mr Suppiah expected his share of the sales proceeds to be $240,000, with the rest of the money going to Madam Nee and to a trust fund for the couple's two daughters.
When he received only $212,000 in July 2002, as $28,000 had been taken out for the agency's commission, he instructed Mr Hanam to write to the other lawyers to withhold payment, as he had found the buyer himself.
But by then it was too late, as they had already released the money to ERA.
It was argued that since the agreement was not terminated, ERA was entitled to the commission even if the agency did nothing after the three-month period.
However, Judge Tseng said that this would amount to 'unjust enrichment' for the agency.
The court also dismissed the defendants' claims that they were acting only for Madam Nee and did not owe her ex-husband any professional obligation.
The judge noted that their law firm clearly stated it was acting for both parties in its correspondence with the Central Provident Fund Board and the Comptroller of Property Tax.
Mr Suppiah's lawyer Alain A. Johns also convinced the court that there was 'a total lack of consideration on the part of ERA' in the agreement, which he said should be regarded as 'void and unenforceable'.
The four lawyers, who were also ordered to pay costs, are considering an appeal against the verdict.
khush@sph.com.sg
Lawyers ordered to return commission
Four sued for failing in professional duties over sale of a house in 2002
By Khushwant Singh
A COURT has found that an agreement between Electronic Realty Associates (ERA) and a property owner could result in 'unjust enrichment' for the property agency.
District Judge Francis Tseng has thus ordered four lawyers to return to Mr Simon Suppiah Sunmugam the money they had paid out as commission to the agency.
The lawyers had earlier released $28,000 as commission to ERA from the sale of Mr Suppiah's house.
The 62-year-old private investigator had sued Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low, of the now-defunct law firm Peter Low Tang & Belinda Ang, for failing in their professional duties in connection with a property sale in 2002.
A fifth lawyer, Mr Andrew John Hanam, was found not to be at fault as he was not involved in the agreement. He had been engaged only to act for Mr Suppiah's divorce from Madam Nee Shyan Huey in May 1996.
In his judgment last Wednesday, Judge Tseng said the four lawyers' interpretation of the provisions of the agreement, titled Exclusive Authorisation to Sell, renders the property seller 'at the complete mercy' of ERA and could result in a 'most unfair situation'.
Signed in June 2001 by Madam Nee, 44, an insurance agent, the agreement granted ERA a commission of 2 per cent on the first $1 million of the purchase price and 1 per cent for any amount in excess paid for the matrimonial home in Punggol.
This was payable if the company introduced a buyer or if the property was sold within three months.
After the 90-day period, the agreement would continue from week to week unless terminated by either party.
The proposed selling price was $2.4million, but ERA found a potential buyer who offered only $1.6 million in February the following year.
Mr Suppiah rejected it as too low, and a month later, he found a buyer who was willing to pay $1.75 million.
When the sale was completed, Mr Suppiah expected his share of the sales proceeds to be $240,000, with the rest of the money going to Madam Nee and to a trust fund for the couple's two daughters.
When he received only $212,000 in July 2002, as $28,000 had been taken out for the agency's commission, he instructed Mr Hanam to write to the other lawyers to withhold payment, as he had found the buyer himself.
But by then it was too late, as they had already released the money to ERA.
It was argued that since the agreement was not terminated, ERA was entitled to the commission even if the agency did nothing after the three-month period.
However, Judge Tseng said that this would amount to 'unjust enrichment' for the agency.
The court also dismissed the defendants' claims that they were acting only for Madam Nee and did not owe her ex-husband any professional obligation.
The judge noted that their law firm clearly stated it was acting for both parties in its correspondence with the Central Provident Fund Board and the Comptroller of Property Tax.
Mr Suppiah's lawyer Alain A. Johns also convinced the court that there was 'a total lack of consideration on the part of ERA' in the agreement, which he said should be regarded as 'void and unenforceable'.
The four lawyers, who were also ordered to pay costs, are considering an appeal against the verdict.
khush@sph.com.sg
ST : Studio units a big hit with the elderly
Apr 4, 2010
Studio units a big hit with the elderly
Singapore may not have retirement villages, but studio apartments built by the Housing Board (HDB) specifically for the elderly have proved to be a hit.
More than 3,000 such flats have been launched since the scheme was initiated in 1998, of which about 1,200 have been completed so far.
More than half of the rest will be ready over the next two to three years.
Take-up rates have been 'close to 100 per cent', an HDB spokesman told The Sunday Times.
These flats are purpose- built for the elderly and come with grab bars, kitchen cabinets complete with gas stoves and cooker hoods, non-slip tiles, lever taps and an alarm system.
They are usually located near markets, food centres and transport nodes to enable the elderly to be independent for as long as possible.
Community facilities such as senior citizens' activity centres can also be found near most studio apartments.
These units have shorter 30-year leases to make them affordable.
In December last year, 105 studio units were offered for sale at an upcoming, unique project in Dawson estate, which allows parents and their married children to buy studio units paired with four- or five-room flats.
'These flats are designed as two separate units and have connecting doors,' the HDB spokesman said.
'They allow families to stay close yet maintain their privacy.'
Studio units a big hit with the elderly
Singapore may not have retirement villages, but studio apartments built by the Housing Board (HDB) specifically for the elderly have proved to be a hit.
More than 3,000 such flats have been launched since the scheme was initiated in 1998, of which about 1,200 have been completed so far.
More than half of the rest will be ready over the next two to three years.
Take-up rates have been 'close to 100 per cent', an HDB spokesman told The Sunday Times.
These flats are purpose- built for the elderly and come with grab bars, kitchen cabinets complete with gas stoves and cooker hoods, non-slip tiles, lever taps and an alarm system.
They are usually located near markets, food centres and transport nodes to enable the elderly to be independent for as long as possible.
Community facilities such as senior citizens' activity centres can also be found near most studio apartments.
These units have shorter 30-year leases to make them affordable.
In December last year, 105 studio units were offered for sale at an upcoming, unique project in Dawson estate, which allows parents and their married children to buy studio units paired with four- or five-room flats.
'These flats are designed as two separate units and have connecting doors,' the HDB spokesman said.
'They allow families to stay close yet maintain their privacy.'
ST LETTER : Siting govt offices out of city centre a good move
Apr 4, 2010
YOUR LETTER
Siting govt offices out of city centre a good move
I refer to the article, 'Relocation of govt agencies: Good move or not?' (March14).
I believe moving government offices out of their city centre locations is a very good move, both for the government officials and the public.
Being out of the Central Business District means being away from heavy traffic and expensive Electronic Road Pricing charges, as well as being closer to homes.
It helps improve the image that the Government is 'close to the ground'.
Also, the reason for having centralised government offices does not apply to Singapore as our city-state is too small.
The next move for the Government could be to combine its services, and offer them at various locations - like what banks are doing with their branches. As a bank customer, you can carry out almost every transaction at any branch without going to the headquarters.
Calvin Yong
YOUR LETTER
Siting govt offices out of city centre a good move
I refer to the article, 'Relocation of govt agencies: Good move or not?' (March14).
I believe moving government offices out of their city centre locations is a very good move, both for the government officials and the public.
Being out of the Central Business District means being away from heavy traffic and expensive Electronic Road Pricing charges, as well as being closer to homes.
It helps improve the image that the Government is 'close to the ground'.
Also, the reason for having centralised government offices does not apply to Singapore as our city-state is too small.
The next move for the Government could be to combine its services, and offer them at various locations - like what banks are doing with their branches. As a bank customer, you can carry out almost every transaction at any branch without going to the headquarters.
Calvin Yong
ST : Queenstown HDB flat nearly sold for $950,000
Apr 4, 2010
Queenstown HDB flat nearly sold for $950,000
By Irene Tham
A family in Singapore nearly sold their home in Strathmore Avenue for $950,000 - possibly the highest amount fetched for an HDB flat.
But the deal did not go through.
The buyer could not get a bank loan for the rare penthouse valued at $875,000.
The Queenstown flat joins another HDB flat which recently made the news for its equally lofty price.
The property - a rooftop maisonette in Bishan Street 24 - reportedly drew an offer of $900,000 from a buyer.
The Strathmore Avenue penthouse on the 24th floor boasts an unobstructed view of the estate. It is a five-minute walk from Queenstown MRT station.
'Buyers like the Queenstown area because of the large sizes of its flats and its proximity to town,' said Mr Lim Yong Hock, senior vice-president at property agency PropNex.
It takes less than 10 minutes to drive from Queenstown to Orchard Road.
The owners, an Indian family, declined to be interviewed. The flat was bought from the HDB for about $200,000 eight years ago.
The buyer - an Indian Singaporean - could not be reached at press time.
At $950,000, the deal works out to about $460 per sq ft (psf) for the 2,066 sq ft maisonette.
Although not the highest psf price paid for an HDB property, the total amount is in sync with Queenstown's reputation for recording the highest transacted prices. Prices of HDB flats reached a record high in 2008 when a 1,614 sq ft executive unit in Queenstown was sold for $890,000.
In 2007, another executive unit in Mei Ling Street, near Queenstown Stadium, was sold for the same price.
'In 2007, when the en bloc market was red hot, many home owners became cash-rich overnight,' Mr Lim said.
The buyer of the flat in Mei Ling Street in 2007 benefited from an
en bloc sale. He paid cash for the flat, said Mr Lim, whose company brokered the deal.
Property agents said such sky-high prices are a one-off, and do not reflect the overall tenor of HDB resale prices.
The scarcity of highest-floor flats also means there are some people who are willing to pay a premium for them.
'There are not many such units on sale in the market,' said Mr Raymond Quah, president of Dennis Wee Properties.
There are only four rooftop penthouses in Strathmore Avenue.
In Bishan, there are only 50 rooftop penthouses with open terraces.
When contacted, ERA assistant vice-president Eugene Lim declined to reveal whether the owners of the Bishan maisonette have accepted the $900,000 offer.
According to a Lianhe Zaobao report on March 30, a 45-year-old Singaporean businessman was willing to pay cash-over-valuation of $170,000 for the 18-year-old flat, valued at $730,000.
The highest psf price paid for an HDB property was recorded in February this year for a four-room flat in Bain Street.
The $736 psf price for the 30-year-old flat on the 25th floor of a block in Bras Basah trumped the previous record set in November last year.
Then, a four-room flat in Strathmore Avenue was sold for $653,000 or $674 psf.
The view from inside the HDB penthouse located at Strathmore Avenue, which overlooks the estate. The 2,066 sq ft unit on the 24th floor would have sold for $950,000, but its buyer could not get a bank loan.
Queenstown HDB flat nearly sold for $950,000
By Irene Tham
A family in Singapore nearly sold their home in Strathmore Avenue for $950,000 - possibly the highest amount fetched for an HDB flat.
But the deal did not go through.
The buyer could not get a bank loan for the rare penthouse valued at $875,000.
The Queenstown flat joins another HDB flat which recently made the news for its equally lofty price.
The property - a rooftop maisonette in Bishan Street 24 - reportedly drew an offer of $900,000 from a buyer.
The Strathmore Avenue penthouse on the 24th floor boasts an unobstructed view of the estate. It is a five-minute walk from Queenstown MRT station.
'Buyers like the Queenstown area because of the large sizes of its flats and its proximity to town,' said Mr Lim Yong Hock, senior vice-president at property agency PropNex.
It takes less than 10 minutes to drive from Queenstown to Orchard Road.
The owners, an Indian family, declined to be interviewed. The flat was bought from the HDB for about $200,000 eight years ago.
The buyer - an Indian Singaporean - could not be reached at press time.
At $950,000, the deal works out to about $460 per sq ft (psf) for the 2,066 sq ft maisonette.
Although not the highest psf price paid for an HDB property, the total amount is in sync with Queenstown's reputation for recording the highest transacted prices. Prices of HDB flats reached a record high in 2008 when a 1,614 sq ft executive unit in Queenstown was sold for $890,000.
In 2007, another executive unit in Mei Ling Street, near Queenstown Stadium, was sold for the same price.
'In 2007, when the en bloc market was red hot, many home owners became cash-rich overnight,' Mr Lim said.
The buyer of the flat in Mei Ling Street in 2007 benefited from an
en bloc sale. He paid cash for the flat, said Mr Lim, whose company brokered the deal.
Property agents said such sky-high prices are a one-off, and do not reflect the overall tenor of HDB resale prices.
The scarcity of highest-floor flats also means there are some people who are willing to pay a premium for them.
'There are not many such units on sale in the market,' said Mr Raymond Quah, president of Dennis Wee Properties.
There are only four rooftop penthouses in Strathmore Avenue.
In Bishan, there are only 50 rooftop penthouses with open terraces.
When contacted, ERA assistant vice-president Eugene Lim declined to reveal whether the owners of the Bishan maisonette have accepted the $900,000 offer.
According to a Lianhe Zaobao report on March 30, a 45-year-old Singaporean businessman was willing to pay cash-over-valuation of $170,000 for the 18-year-old flat, valued at $730,000.
The highest psf price paid for an HDB property was recorded in February this year for a four-room flat in Bain Street.
The $736 psf price for the 30-year-old flat on the 25th floor of a block in Bras Basah trumped the previous record set in November last year.
Then, a four-room flat in Strathmore Avenue was sold for $653,000 or $674 psf.
The view from inside the HDB penthouse located at Strathmore Avenue, which overlooks the estate. The 2,066 sq ft unit on the 24th floor would have sold for $950,000, but its buyer could not get a bank loan.
ST : Mustafa tackles overcrowding
Apr 4, 2010
Mustafa tackles overcrowding
Retailer plans to shift high-volume products to new premises located nearby in July
By Ng Hui Ying
Cosmetics and toiletries are crowd-pullers at Mustafa Centre.
That is why, to tackle overcrowding, the popular Little India retailer is planning to shift the sale of these high-volume products to new premises in July.
This was revealed to The Sunday Times yesterday by Mr Shamim Ahmad, Mustafa's building maintenance and safety manager.
The retailer occupies premises at 145 and 151, Syed Alwi Road.
Extn-4, a building located just down the road, is due to open in end-July.
Mustafa was fined $17,000 by the Singapore Civil Defence Force (SCDF) in January for two fire safety violations, one of which was overcrowding on the first floor at No. 145.
Then, Mustafa introduced new methods of crowd control, such as shifting mobile phone retailers to No. 151. Mobile phones are another crowd-puller.
But such measures have not been sufficient, it seems.
The first floor at 145, Syed Alwi Road is now the subject of scrutiny by the SCDF in its court order against the mall for breaching the 431-patron limit.
A pre-trial conference for the application for the court order will be held on Wednesday. Drawn up last Tuesday, the application was made with the aim of suspending business operations on the first floor.
When The Sunday Times visited Mustafa yesterday, electronic display boards outside the entrances showed 406 patrons on the first floor at 3.50pm.
Mr Shamim Ahmad said there are also plans to relocate jewellery retailers, currently at the basement of No. 151, to the first floor of No. 145.
Jewellery, a luxury item, is unlikely to be a crowd magnet.
Some experts give the thumbs-up to such an approach.
'People are being drawn by the goods sold on the first floor. Replanning the areas can help to balance out the crowd,' said Ms Belinda Huang, architect and partner of ARC Studio.
Mr Colin Tan has other ideas.
The 50-year-old research head at property consultancy Chesterton International believes the only solution would be for the management to 'look at its margins and what will bring better returns', and reduce the variety of goods it offers.
'In the long term, it should find somewhere affordable to carry its goods. In the short term, it must select which goods to carry, and which to phase out.'
But he acknowledged that this would be 'tampering with the formula' of the retailer. It is famed for selling everything from household necessities to cameras and TV sets.
Regulars of Mustafa agree.
Painting supervisor Kathiravan Kathir, who frequents the place every two weeks, said: 'I like that all the items are here. If they cut down on the goods, I'd go to places near my house like West Mall and Jurong Point.'
The 35-year-old Singaporean has bought all manner of things, from groceries to laptops, from Mustafa.
nhuiying@sph.com.sg
--------------------------------------------------------------------------------
Making the right call
'In the long term, it should find somewhere affordable to carry its goods. In the short term, it must select which goods to carry, and which to phase out.'
MR COLIN TAN, research head at property consultancy Chesterton International, on what Mustafa's management should do
Shoppers at Mustafa Centre on a Saturday night. The retailer is plagued by overcrowding woes and SCDF has applied for a court order against it. --ST PHOTO: CAROLINE CHIA
Mustafa tackles overcrowding
Retailer plans to shift high-volume products to new premises located nearby in July
By Ng Hui Ying
Cosmetics and toiletries are crowd-pullers at Mustafa Centre.
That is why, to tackle overcrowding, the popular Little India retailer is planning to shift the sale of these high-volume products to new premises in July.
This was revealed to The Sunday Times yesterday by Mr Shamim Ahmad, Mustafa's building maintenance and safety manager.
The retailer occupies premises at 145 and 151, Syed Alwi Road.
Extn-4, a building located just down the road, is due to open in end-July.
Mustafa was fined $17,000 by the Singapore Civil Defence Force (SCDF) in January for two fire safety violations, one of which was overcrowding on the first floor at No. 145.
Then, Mustafa introduced new methods of crowd control, such as shifting mobile phone retailers to No. 151. Mobile phones are another crowd-puller.
But such measures have not been sufficient, it seems.
The first floor at 145, Syed Alwi Road is now the subject of scrutiny by the SCDF in its court order against the mall for breaching the 431-patron limit.
A pre-trial conference for the application for the court order will be held on Wednesday. Drawn up last Tuesday, the application was made with the aim of suspending business operations on the first floor.
When The Sunday Times visited Mustafa yesterday, electronic display boards outside the entrances showed 406 patrons on the first floor at 3.50pm.
Mr Shamim Ahmad said there are also plans to relocate jewellery retailers, currently at the basement of No. 151, to the first floor of No. 145.
Jewellery, a luxury item, is unlikely to be a crowd magnet.
Some experts give the thumbs-up to such an approach.
'People are being drawn by the goods sold on the first floor. Replanning the areas can help to balance out the crowd,' said Ms Belinda Huang, architect and partner of ARC Studio.
Mr Colin Tan has other ideas.
The 50-year-old research head at property consultancy Chesterton International believes the only solution would be for the management to 'look at its margins and what will bring better returns', and reduce the variety of goods it offers.
'In the long term, it should find somewhere affordable to carry its goods. In the short term, it must select which goods to carry, and which to phase out.'
But he acknowledged that this would be 'tampering with the formula' of the retailer. It is famed for selling everything from household necessities to cameras and TV sets.
Regulars of Mustafa agree.
Painting supervisor Kathiravan Kathir, who frequents the place every two weeks, said: 'I like that all the items are here. If they cut down on the goods, I'd go to places near my house like West Mall and Jurong Point.'
The 35-year-old Singaporean has bought all manner of things, from groceries to laptops, from Mustafa.
nhuiying@sph.com.sg
--------------------------------------------------------------------------------
Making the right call
'In the long term, it should find somewhere affordable to carry its goods. In the short term, it must select which goods to carry, and which to phase out.'
MR COLIN TAN, research head at property consultancy Chesterton International, on what Mustafa's management should do
Shoppers at Mustafa Centre on a Saturday night. The retailer is plagued by overcrowding woes and SCDF has applied for a court order against it. --ST PHOTO: CAROLINE CHIA
ST : Baby boomers want retirement homes
Apr 4, 2010
Baby boomers want retirement homes
Some among the baby boomer generation would prefer that to burdening loved ones
By Radha Basu
Some have known first-hand the emotionally exhausting task of looking after elderly parents who lose their strength and senses, bit by agonising bit.
Others have heard about the hard realities of ageing from friends and colleagues who have gone on arduous caregiving journeys themselves.
Born between 1947 and 1964, Singapore's one million baby boomers are better educated, independent and more affluent than their parents.
As they hurtle towards old age, some among them are arriving at a common resolve: They don't want to live out their last days by burdening loved ones, mired in dependence, decrepitude - possibly even depression. They want to live and die in self-contained retirement communities, cared for by paid professionals, surrounded by friends - and visited often by family.
Singapore has one of the fastest- ageing populations in the world with the number of those aged 65 and above set to triple to 900,000 in the next two decades.
But as of now, there are no residential communities for retired folk here despite a sharp increase in the number of elderly people living alone or by themselves.
There were 22,000 elderly people living alone in 2005, up from 15,000 five years earlier. Another 25,000 elderly couples live on their own.
As of last year, Singapore had 166,500 people aged 40 and above who were single, up from only 112,700 in 2000.
A two-day conference, the Ageing Asia Investment Forum, which starts here tomorrow, will focus on the opportunities and challenges of setting up retirement villages and aged-care services in Singapore and the region.
Retirement-home advocates like Ms Ricca Liu, 64, and Ms Anne Holloway, 61, are among a relatively small but significant group of older folk swimming against the tide of experts who extol the virtues of ageing in place and inter-generational bonding.
Ms Liu, who is divorced and has no children, returned home to Singapore after 35 years in Europe to be with friends and family and care for her aged mother, Madam Joyce Liu, 88. Mother and daughter live alone in a private apartment in the Orchard Road area.
'Having had no children, I do not expect and cannot rely on anyone to look after me in my old age,' said Ms Liu. Rather than live alone in a condominium with paid help, she hopes to live in a 'comfortable and well-administered' retirement community with round-the-clock nursing facilities, home-help services and optional leisure activities.
Her cousin, former advertising executive Ms Holloway, who lives with her 81-year-old Singaporean husband, has similar dreams. 'We are prepared to pay for such services. But someone should offer them to us.'
She added that while she respects the Government's moves to get people to 'age in place' - by building age-friendly infrastructure, such as wheelchair ramps, in the community - such a 'one size fits all' approach may not suit everybody.
'A part of living in a developed, increasingly affluent society is about having choices as consumers,' she said. 'And right now, we hardly have any as far as retirement living goes.'
While Ms Holloway also has no children, there are plenty of mums and dads who also harbour hopes of living in self-contained communities of older folk, with their own care services, grocery store and even hair salons. And many of them are looking not at upper-tier homes that cater solely to the rich, but to ordinary Singaporeans.
Nurse manager V.T. Devi, 55, a mother of three grown-up children who lives in a four-room HDB flat, said she too would prefer to spend her old age in a retirement home. She spent eight years nursing her mother-in-law who had Alzheimer's disease. The older woman died in February.
Singapore needs retirement villages which combine nursing and elder-care facilities with the comforts, conveniences and freedom of home, said Ms Devi, who works in an old-age home.
'This is particularly true for my generation who do not want to live with our children and be full-time child minders for our grandchildren.'
That's a sentiment that is sure to strike a chord with others. A survey of baby boomers commissioned by the Ministry of Community Development, Youth and Sports and released last year showed that one in four said he would not mind living in a retirement village.
Of them, half were below 50, a third had tertiary education and 70 per cent had no children or just one or two children, said sociologist Angelique Chan from the National University of Singapore who conducted the survey.
Nursing homes that offer a 'home-like environment', meanwhile, have already proved to be a hit, said Salvation Army Peacehaven Nursing Home executive director Low Mui Lang.
Her facility has a 'residential living area' for relatively independent dementia patients where residents have their own rooms and even cook breakfast in their own pantry. The facility, which opened with 32 beds in 2006 and now has close to 60, is almost full. Private patients at the facility are charged between $1,540 and $1,780 a month, depending on the level of care.
While Housing Board estates are gradually becoming elder-friendly, with food centres, shops and salons in close proximity, getting older folk to access inexpensive home health-care or domestic-care services may not be easy if they are scattered in blocks that accommodate younger people as well, said Ms Low.
'Given the shortage of services such as home nursing and physiotherapy, it may be more efficient and productive to house the elderly in a couple of blocks in each estate and get professional elder-care staff to visit them regularly.'
In late 2006, the Government made a Jalan Jurong Kechil site available for sale to developers interested in building retirement homes. But that has had no takers yet.
Property developer Daniel Teo, who is interested in building retirement homes, said that one problem is that the land comes with a 30-year-lease, 'which is simply too short' for any developer to build an economically viable project.
'Imagine leasing a place to a 55-year-old and telling him you may need to move out when you are 85,' said Mr Teo, a former head of the Real Estate Developers Association of Singapore. 'That will simply not do.'
The Government, on its part, said recently that it would study a suggestion by Nominated MP Laurence Wee that those interested in developing such villages be given the option of 60-year land leases - or 30-year leases that can be extended for a further 30-year period.
Mr Teo hopes a decision can be taken soon, given that there is a growing demand for retirement homes. 'When the silver tsunami hits, we do not want to be caught unprepared.'
radhab@sph.com.sg
What are your views on retirement villages? Would they work in Singapore? E-mail suntimes@sph.com.sg
Ms Ricca Liu (left), 64, who has no children, returned to Singapore after 35 years in Europe to care for her aged mother, Madam Joyce Liu, 88. Rather than live alone, she and her cousin Anne Holloway, 61, who also has no children, are among those who hope to live in a comfortable retirement community here. -- ST PHOTO: KEVIN LIM
Baby boomers want retirement homes
Some among the baby boomer generation would prefer that to burdening loved ones
By Radha Basu
Some have known first-hand the emotionally exhausting task of looking after elderly parents who lose their strength and senses, bit by agonising bit.
Others have heard about the hard realities of ageing from friends and colleagues who have gone on arduous caregiving journeys themselves.
Born between 1947 and 1964, Singapore's one million baby boomers are better educated, independent and more affluent than their parents.
As they hurtle towards old age, some among them are arriving at a common resolve: They don't want to live out their last days by burdening loved ones, mired in dependence, decrepitude - possibly even depression. They want to live and die in self-contained retirement communities, cared for by paid professionals, surrounded by friends - and visited often by family.
Singapore has one of the fastest- ageing populations in the world with the number of those aged 65 and above set to triple to 900,000 in the next two decades.
But as of now, there are no residential communities for retired folk here despite a sharp increase in the number of elderly people living alone or by themselves.
There were 22,000 elderly people living alone in 2005, up from 15,000 five years earlier. Another 25,000 elderly couples live on their own.
As of last year, Singapore had 166,500 people aged 40 and above who were single, up from only 112,700 in 2000.
A two-day conference, the Ageing Asia Investment Forum, which starts here tomorrow, will focus on the opportunities and challenges of setting up retirement villages and aged-care services in Singapore and the region.
Retirement-home advocates like Ms Ricca Liu, 64, and Ms Anne Holloway, 61, are among a relatively small but significant group of older folk swimming against the tide of experts who extol the virtues of ageing in place and inter-generational bonding.
Ms Liu, who is divorced and has no children, returned home to Singapore after 35 years in Europe to be with friends and family and care for her aged mother, Madam Joyce Liu, 88. Mother and daughter live alone in a private apartment in the Orchard Road area.
'Having had no children, I do not expect and cannot rely on anyone to look after me in my old age,' said Ms Liu. Rather than live alone in a condominium with paid help, she hopes to live in a 'comfortable and well-administered' retirement community with round-the-clock nursing facilities, home-help services and optional leisure activities.
Her cousin, former advertising executive Ms Holloway, who lives with her 81-year-old Singaporean husband, has similar dreams. 'We are prepared to pay for such services. But someone should offer them to us.'
She added that while she respects the Government's moves to get people to 'age in place' - by building age-friendly infrastructure, such as wheelchair ramps, in the community - such a 'one size fits all' approach may not suit everybody.
'A part of living in a developed, increasingly affluent society is about having choices as consumers,' she said. 'And right now, we hardly have any as far as retirement living goes.'
While Ms Holloway also has no children, there are plenty of mums and dads who also harbour hopes of living in self-contained communities of older folk, with their own care services, grocery store and even hair salons. And many of them are looking not at upper-tier homes that cater solely to the rich, but to ordinary Singaporeans.
Nurse manager V.T. Devi, 55, a mother of three grown-up children who lives in a four-room HDB flat, said she too would prefer to spend her old age in a retirement home. She spent eight years nursing her mother-in-law who had Alzheimer's disease. The older woman died in February.
Singapore needs retirement villages which combine nursing and elder-care facilities with the comforts, conveniences and freedom of home, said Ms Devi, who works in an old-age home.
'This is particularly true for my generation who do not want to live with our children and be full-time child minders for our grandchildren.'
That's a sentiment that is sure to strike a chord with others. A survey of baby boomers commissioned by the Ministry of Community Development, Youth and Sports and released last year showed that one in four said he would not mind living in a retirement village.
Of them, half were below 50, a third had tertiary education and 70 per cent had no children or just one or two children, said sociologist Angelique Chan from the National University of Singapore who conducted the survey.
Nursing homes that offer a 'home-like environment', meanwhile, have already proved to be a hit, said Salvation Army Peacehaven Nursing Home executive director Low Mui Lang.
Her facility has a 'residential living area' for relatively independent dementia patients where residents have their own rooms and even cook breakfast in their own pantry. The facility, which opened with 32 beds in 2006 and now has close to 60, is almost full. Private patients at the facility are charged between $1,540 and $1,780 a month, depending on the level of care.
While Housing Board estates are gradually becoming elder-friendly, with food centres, shops and salons in close proximity, getting older folk to access inexpensive home health-care or domestic-care services may not be easy if they are scattered in blocks that accommodate younger people as well, said Ms Low.
'Given the shortage of services such as home nursing and physiotherapy, it may be more efficient and productive to house the elderly in a couple of blocks in each estate and get professional elder-care staff to visit them regularly.'
In late 2006, the Government made a Jalan Jurong Kechil site available for sale to developers interested in building retirement homes. But that has had no takers yet.
Property developer Daniel Teo, who is interested in building retirement homes, said that one problem is that the land comes with a 30-year-lease, 'which is simply too short' for any developer to build an economically viable project.
'Imagine leasing a place to a 55-year-old and telling him you may need to move out when you are 85,' said Mr Teo, a former head of the Real Estate Developers Association of Singapore. 'That will simply not do.'
The Government, on its part, said recently that it would study a suggestion by Nominated MP Laurence Wee that those interested in developing such villages be given the option of 60-year land leases - or 30-year leases that can be extended for a further 30-year period.
Mr Teo hopes a decision can be taken soon, given that there is a growing demand for retirement homes. 'When the silver tsunami hits, we do not want to be caught unprepared.'
radhab@sph.com.sg
What are your views on retirement villages? Would they work in Singapore? E-mail suntimes@sph.com.sg
Ms Ricca Liu (left), 64, who has no children, returned to Singapore after 35 years in Europe to care for her aged mother, Madam Joyce Liu, 88. Rather than live alone, she and her cousin Anne Holloway, 61, who also has no children, are among those who hope to live in a comfortable retirement community here. -- ST PHOTO: KEVIN LIM
ST : Watch out for rising interest rates
Apr 4, 2010
property
Watch out for rising interest rates
Some homes seem affordable because of low interest rates now but this won't always be the case
By Joyce Teo
Mass market home prices have surpassed the previous 2008 peak.
But because home loan interest rates remain at an all-time low, these homes are still seen as affordable, property consultancy DTZ said.
Its head of South-east Asia research, Ms Chua Chor Hoon, said its mass market affordability index shows that such homes at the end of the first quarter of this year were more affordable, compared with the period between the first quarter of 2006 and the third quarter of 2008.
But this does not mean that home buyers in this segment - which includes public flat owners upgrading to private property - will continue to find such homes affordable for long, if prices or interest rates move up.
It is only a matter of time before the low interest rates head north, said DTZ.
The questions are when that will happen and how much the rise will be, said Mr Alvin Liew, an economist with Standard Chartered Bank.
He said that the three-month Singapore Interbank Offered Rate - now at 0.65 per cent - is expected to be 'very benign in 2010'.
Many home loans are pegged to Sibor, which is the rate at which banks lend to one another.
'We see rates picking up slightly by 5 to 10 basis points from the first half of 2011, in anticipation of the United States Federal Reserve hiking its rates,' he said.
'By the tail-end of 2011, it could rise to 0.8 per cent. The year 2012 is when we expect to see a rapid hike.'
The three-month Sibor rate will likely rise to 3 per cent that year, Mr Liew said.
Ms Chua said mass market housing could become generally less affordable if the interest rate rises by one percentage point with no change in prices.
This will be the case too if prices rise by 5 per cent with a 0.5 percentage point increase in interest rates, or if prices rise by more than 10 per cent this year, she said.
For the first quarter of this year, the Urban Redevelopment Authority's flash estimate showed that private home prices have continued their climb, moving up 5.1 per cent, compared with 7.4 per cent in the previous quarter.
Ms Chua advised potential buyers to look beyond the current interest rates to assess their ability to repay the monthly mortgage payments over the next 20 to 30 years, as interest rates will go up.
'Buyers also have to be cautious as there's still a lot of economic uncertainty now, unlike in 2005 and 2006, when the outlook was very clear.
'If the recovery is not as strong as expected, any anticipated capital appreciation may not materialise,' she added.
Mr Justin Chiu, executive director of Hong Kong's Cheung Kong (Holdings), told The Sunday Times that interest rates are one key risk factor here.
'If the rates rise, they may rise very quickly,' he said.
He was in town for the launch of his company's well-received West Coast project, The Vision.
Buyers should make sure they can still afford to pay their loans even if interest rates go up to 3 per cent to 4 per cent, he said. If not, they could be overstretched.
joyceteo@sph.com.sg
property
Watch out for rising interest rates
Some homes seem affordable because of low interest rates now but this won't always be the case
By Joyce Teo
Mass market home prices have surpassed the previous 2008 peak.
But because home loan interest rates remain at an all-time low, these homes are still seen as affordable, property consultancy DTZ said.
Its head of South-east Asia research, Ms Chua Chor Hoon, said its mass market affordability index shows that such homes at the end of the first quarter of this year were more affordable, compared with the period between the first quarter of 2006 and the third quarter of 2008.
But this does not mean that home buyers in this segment - which includes public flat owners upgrading to private property - will continue to find such homes affordable for long, if prices or interest rates move up.
It is only a matter of time before the low interest rates head north, said DTZ.
The questions are when that will happen and how much the rise will be, said Mr Alvin Liew, an economist with Standard Chartered Bank.
He said that the three-month Singapore Interbank Offered Rate - now at 0.65 per cent - is expected to be 'very benign in 2010'.
Many home loans are pegged to Sibor, which is the rate at which banks lend to one another.
'We see rates picking up slightly by 5 to 10 basis points from the first half of 2011, in anticipation of the United States Federal Reserve hiking its rates,' he said.
'By the tail-end of 2011, it could rise to 0.8 per cent. The year 2012 is when we expect to see a rapid hike.'
The three-month Sibor rate will likely rise to 3 per cent that year, Mr Liew said.
Ms Chua said mass market housing could become generally less affordable if the interest rate rises by one percentage point with no change in prices.
This will be the case too if prices rise by 5 per cent with a 0.5 percentage point increase in interest rates, or if prices rise by more than 10 per cent this year, she said.
For the first quarter of this year, the Urban Redevelopment Authority's flash estimate showed that private home prices have continued their climb, moving up 5.1 per cent, compared with 7.4 per cent in the previous quarter.
Ms Chua advised potential buyers to look beyond the current interest rates to assess their ability to repay the monthly mortgage payments over the next 20 to 30 years, as interest rates will go up.
'Buyers also have to be cautious as there's still a lot of economic uncertainty now, unlike in 2005 and 2006, when the outlook was very clear.
'If the recovery is not as strong as expected, any anticipated capital appreciation may not materialise,' she added.
Mr Justin Chiu, executive director of Hong Kong's Cheung Kong (Holdings), told The Sunday Times that interest rates are one key risk factor here.
'If the rates rise, they may rise very quickly,' he said.
He was in town for the launch of his company's well-received West Coast project, The Vision.
Buyers should make sure they can still afford to pay their loans even if interest rates go up to 3 per cent to 4 per cent, he said. If not, they could be overstretched.
joyceteo@sph.com.sg
ST : URA: From slums to soaring skyline
Apr 3, 2010
URA: From slums to soaring skyline
By Lee Siew Hua
THE Urban Redevelopment Authority (URA) once presided over dreary carparks and was chastised by some for tearing down buildings at a clip in Singapore's rush to urbanise. Now, it sells urban concepts around the world.
· EARLY DEVELOPMENTAL CHALLENGE: Physically transform Singapore to support the nation's rapid economic rise and social changes, and optimise scarce land.
· THEN: The city had slums and squatters when the URA was set up in 1974 to rejuvenate the central area. In the booming 1970s, development also looked rather haphazard.
The URA waded in, juggling multiple roles as master planner, resettlement agency, developer and landlord.
'Towards A Better City' was its mantra, so it swiftly improved infrastructure, sometimes bulldozing heritage buildings like the oldest school, Raffles Institution, built in 1837. Raffles City now stands on that site.
The URA also started to remake the Central Business District to support Singapore's early ambition to rise as a global financial centre.
· NOW: URA's outlook is far more global and it is a major player in Singapore's constant reinvention of itself to compete with global cities for talent and investments.
It markets Marina Bay to a global audience - at real estate trade shows and conferences in Cannes and Dubai, for example - and has attracted investors for its new financial hub. It also flags development possibilities in Jurong Lake District and Kallang Riverside to investors.
Now that it is an international brand name, countries as far afield as Russia and Nigeria have come calling in the last three years. The agency also leads master planning of the Tianjin eco-city, a major green initiative in China.
Last year, the URA International Group was launched to provide planning consultancy and training to cities around the world.
The renewed mission of the URA is to make Singapore a great city to live, work and play in.
· CURRENT TO-DO LIST: It now seeks to make the country an 'endearing home' for Singaporeans and global talent.
To achieve this, it hopes to create more diverse lifestyle offerings in arts and culture, retail, sports, the culinary scene and events - while maintaining an 'authentic' style. The island will become lusher with more parks and skyrise greenery.
It is putting the finishing touches to the Marina Bay Promenade this year and the Gardens by the Bay after that.
It will work on what it calls the 'heartware' of the city, starting with Marina Bay where it partners stakeholders, like the Esplanade - Theatres on the Bay, to draw crowds. It wants festivals, sporting events and buzz, as much for economic reasons as to ensure that people bond with the place.
Next in line will be the Singapore River, Orchard Road and the Bras Basah/Bugis/Civic District area.
One challenge is to keep supporting Singapore's growth in a way that is socially and environmentally friendly.
· URA CHIEF EXECUTIVE CHEONG KOON HEAN SAYS: 'Singapore has grown from a small trading port to a distinctive global city with a high quality of living.
'URA has contributed to this transformation by being responsive to dynamic global changes, international competition and the increasing expectations and aspirations of Singaporeans.'
siewhua@sph.com.sg
In a span of 40 years, Clarke Quay has been transformed from a place where bumboats jostled for space (second picture) into a vibrant nightspot (above) complete with trendy cafes, restaurants and bars. -- PHOTOS: URBAN REDEVELOPMENT AUTHORITY
URA: From slums to soaring skyline
By Lee Siew Hua
THE Urban Redevelopment Authority (URA) once presided over dreary carparks and was chastised by some for tearing down buildings at a clip in Singapore's rush to urbanise. Now, it sells urban concepts around the world.
· EARLY DEVELOPMENTAL CHALLENGE: Physically transform Singapore to support the nation's rapid economic rise and social changes, and optimise scarce land.
· THEN: The city had slums and squatters when the URA was set up in 1974 to rejuvenate the central area. In the booming 1970s, development also looked rather haphazard.
The URA waded in, juggling multiple roles as master planner, resettlement agency, developer and landlord.
'Towards A Better City' was its mantra, so it swiftly improved infrastructure, sometimes bulldozing heritage buildings like the oldest school, Raffles Institution, built in 1837. Raffles City now stands on that site.
The URA also started to remake the Central Business District to support Singapore's early ambition to rise as a global financial centre.
· NOW: URA's outlook is far more global and it is a major player in Singapore's constant reinvention of itself to compete with global cities for talent and investments.
It markets Marina Bay to a global audience - at real estate trade shows and conferences in Cannes and Dubai, for example - and has attracted investors for its new financial hub. It also flags development possibilities in Jurong Lake District and Kallang Riverside to investors.
Now that it is an international brand name, countries as far afield as Russia and Nigeria have come calling in the last three years. The agency also leads master planning of the Tianjin eco-city, a major green initiative in China.
Last year, the URA International Group was launched to provide planning consultancy and training to cities around the world.
The renewed mission of the URA is to make Singapore a great city to live, work and play in.
· CURRENT TO-DO LIST: It now seeks to make the country an 'endearing home' for Singaporeans and global talent.
To achieve this, it hopes to create more diverse lifestyle offerings in arts and culture, retail, sports, the culinary scene and events - while maintaining an 'authentic' style. The island will become lusher with more parks and skyrise greenery.
It is putting the finishing touches to the Marina Bay Promenade this year and the Gardens by the Bay after that.
It will work on what it calls the 'heartware' of the city, starting with Marina Bay where it partners stakeholders, like the Esplanade - Theatres on the Bay, to draw crowds. It wants festivals, sporting events and buzz, as much for economic reasons as to ensure that people bond with the place.
Next in line will be the Singapore River, Orchard Road and the Bras Basah/Bugis/Civic District area.
One challenge is to keep supporting Singapore's growth in a way that is socially and environmentally friendly.
· URA CHIEF EXECUTIVE CHEONG KOON HEAN SAYS: 'Singapore has grown from a small trading port to a distinctive global city with a high quality of living.
'URA has contributed to this transformation by being responsive to dynamic global changes, international competition and the increasing expectations and aspirations of Singaporeans.'
siewhua@sph.com.sg
In a span of 40 years, Clarke Quay has been transformed from a place where bumboats jostled for space (second picture) into a vibrant nightspot (above) complete with trendy cafes, restaurants and bars. -- PHOTOS: URBAN REDEVELOPMENT AUTHORITY
BT : Public + private = property prices
Business Times - 03 Apr 2010
COMMENTARY
Public + private = property prices
Call for laissez faire approach by govt to property market is disingenuous
By ARTHUR SIM
WITH both public and private property prices continuing to rise in tandem, developer Simon Cheong's call last week for private property prices to remain unfettered by government intervention seems not only contradictory but perhaps also misguided.
Property developers have long had a constructive relationship with the government.
Indeed, the reserve list system of the government land sales (GLS) programme was largely created in consultation with property developers and the Real Estate Developers' Association of Singapore, of which Mr Cheong is currently president.
In 2003, the government even suspended the confirmed list of the GLS - which allowed developers to unload their inventory of unsold housing units without additional competition from new sites.
In H1 2004, with the suspension of the confirmed list still in effect, only 2,755 housing units were potentially available through the reserve list. By H2 2004, this number fell to 2,600 units.
The subsequent limited supply of new developments played a part in the run-up to the property price peak in 2007, and certainly helped developers boost sales and profits.
So to say now that the government should be taking a laissez faire approach to the property market is disingenuous. One cannot welcome government intervention to support property prices in bad times, but call for a hands-off approach when property prices are rocketing.
It is true that the government is intervening to control private property prices in the current boom.
For H1 2010, for instance, it has made available land for up to 10,550 housing units through the GLS with sites on both the confirmed list and the reserve list.
Mr Cheong, in an impassioned speech, suggested that not all Singaporeans are entitled to aspire to private housing. After all, he argued, private property only serves about 16.5 per cent of the population, so why does it need to be 'affordable'?
But the line between the two segments is not so neatly drawn.
For many Singaporeans, including some who live in private property, wealth creation comes from the sale of their public housing flats. So every upgrader who has ever sold a public housing flat for a profit to buy a condominium has had a hand in supporting prices in the private home market. That is why resale public home prices are often seen as the price base for private housing units. And developers have benefited from the aspiration of many Singaporeans to upgrade to private property.
Property consultants DTZ found that in 2009, buyers with public housing addresses accounted for 41 per cent of total buyers, almost double the 22 per cent in 2007 (when higher-end projects were leading the rise in the market).
With private home prices rising, DTZ found that private housing had become less affordable with its housing affordability index rising 13 per cent. This could push up demand and prices for relatively cheaper resale public flats which, in turn, could price other buyers out of that market, with knock-on consequences on demand for new public flats.
The private and public housing sectors are closely interlinked, which is why the government looks at the property market as a whole. Mr Cheong was right only when he said that property prices are a 'sensitive topic'. But for him to suggest that the private property market is 'exclusive' (in all senses of the word) is just off the mark.
simska@sph.com.sg
COMMENTARY
Public + private = property prices
Call for laissez faire approach by govt to property market is disingenuous
By ARTHUR SIM
WITH both public and private property prices continuing to rise in tandem, developer Simon Cheong's call last week for private property prices to remain unfettered by government intervention seems not only contradictory but perhaps also misguided.
Property developers have long had a constructive relationship with the government.
Indeed, the reserve list system of the government land sales (GLS) programme was largely created in consultation with property developers and the Real Estate Developers' Association of Singapore, of which Mr Cheong is currently president.
In 2003, the government even suspended the confirmed list of the GLS - which allowed developers to unload their inventory of unsold housing units without additional competition from new sites.
In H1 2004, with the suspension of the confirmed list still in effect, only 2,755 housing units were potentially available through the reserve list. By H2 2004, this number fell to 2,600 units.
The subsequent limited supply of new developments played a part in the run-up to the property price peak in 2007, and certainly helped developers boost sales and profits.
So to say now that the government should be taking a laissez faire approach to the property market is disingenuous. One cannot welcome government intervention to support property prices in bad times, but call for a hands-off approach when property prices are rocketing.
It is true that the government is intervening to control private property prices in the current boom.
For H1 2010, for instance, it has made available land for up to 10,550 housing units through the GLS with sites on both the confirmed list and the reserve list.
Mr Cheong, in an impassioned speech, suggested that not all Singaporeans are entitled to aspire to private housing. After all, he argued, private property only serves about 16.5 per cent of the population, so why does it need to be 'affordable'?
But the line between the two segments is not so neatly drawn.
For many Singaporeans, including some who live in private property, wealth creation comes from the sale of their public housing flats. So every upgrader who has ever sold a public housing flat for a profit to buy a condominium has had a hand in supporting prices in the private home market. That is why resale public home prices are often seen as the price base for private housing units. And developers have benefited from the aspiration of many Singaporeans to upgrade to private property.
Property consultants DTZ found that in 2009, buyers with public housing addresses accounted for 41 per cent of total buyers, almost double the 22 per cent in 2007 (when higher-end projects were leading the rise in the market).
With private home prices rising, DTZ found that private housing had become less affordable with its housing affordability index rising 13 per cent. This could push up demand and prices for relatively cheaper resale public flats which, in turn, could price other buyers out of that market, with knock-on consequences on demand for new public flats.
The private and public housing sectors are closely interlinked, which is why the government looks at the property market as a whole. Mr Cheong was right only when he said that property prices are a 'sensitive topic'. But for him to suggest that the private property market is 'exclusive' (in all senses of the word) is just off the mark.
simska@sph.com.sg
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