Jun 19, 2010
Yishun condo site tender gets only two bids
Likely reasons include site's location, cautious sentiments, say experts
By Joyce Teo
A TENDER for a Yishun condominium site has attracted just two bidders, a far lower number than recent tenders, as market sentiment grows more cautious.
Far East Organization's Nam Hee Contractor and Frasers Centrepoint's FCL Topaz linked up to put in the top bid of $229.4 million, or $321 per sq ft per plot ratio (psf ppr).
Their bid is 17 per cent above the No.2 bid of $196 million, or $274 psf ppr, by GuocoLand's Perfect Eagle, and 66 per cent above an expected minimum bid price of $193 psf ppr.
The weak level of interest reflects more cautious sentiment among developers, though other factors such as the site's location also played a part.
DTZ South-east Asia research head Chua Chor Hoon said the more cautious market mood follows an easing of take-up in May and June.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said if new home sales moderate to a sustainable level from here on, developers will be less bullish when tendering for sites.
Ms Chua added that developers are also less desperate to build up their landbanks now that many managed to secure sites recently. They will be more selective as there will be many more government sites to choose from in the second half of the year.
Also, property experts said the Yishun site is not very attractive as it is not near an MRT station. The site is at the junction of Yishun Avenue 2, Yishun Avenue 7 and Canberra Drive. Frasers Centrepoint said it plans to build 660 units of about 1,000 sq ft on average.
Mr Mak added that the large potential supply of new residential properties in Yishun and Sembawang could have deterred some developers from bidding.
'Competition from the large supply of new homes in the Yishun and Sembawang would mean that new projects in these areas will take a longer time to sell,' he said.
While the tender response was relatively muted, the top bid is reasonably priced, reflecting a break-even cost of about $600 psf, said CBRE Research director Leonard Tay.
Units in this project will possibly sell above $650 psf, said Mr Tay.
Ms Chua estimates the break-even price at $610 to $630 psf and said the selling price could be at $680 to $720 psf.
For comparison, Mr Tay said that in March-April, units in The Estuary were transacted at $660 to $800 psf, and resale units in the adjacent Yishun Emerald and Yishun Sapphire went for $540 to $630 psf in February-May.
joyceteo@sph.com.sg
Saturday, June 19, 2010
BT : Clementi Park owners won't sell at any price
Business Times - 19 Jun 2010
Clementi Park owners won't sell at any price
Survey shows general consensus against en bloc sale; sale committee has disbanded, marketing agent withdrawn
By CHAN YUPING
CLEMENTI Park Condominium residents do not want to sell their apartments - even for $1.25 billion or more.
A collective sale committee (CSC) has been disbanded and the marketing agent for the sale, Knight Frank, has withdrawn.
Knight Frank said that it did not think it was possible to get 80 per cent backing for a collective sale even if the reserve price was set higher at $1.4 billion, given the ownership profile and current market conditions.
The firm reached this conclusion based on 382 responses obtained from a total of 489 owners surveyed in April and May this year, which showed a general consensus against the sale.
In addition, 'because of the diversity of share value and strata area, it is difficult to get owners to agree to one method of apportionment', said Knight Frank.
Following the firm's withdrawal, the Clementi Park CSC, which was formed in November 2007, has disbanded after its final meeting on June 8.
Most CSC members reckoned it would be 'futile' to appoint a new marketing agent because the outcome would most likely be similar, and felt that 'the collective sale exercise should be aborted', said CSC secretary Winston Wong.
The 28-year-old condo, which sits on freehold land, is well known for its hilly landscape and green environment. It is next to Brookvale Condominium - another City Developments project - which has failed to go en bloc several times.
Clementi Park residents formed a website called saveclementipark.com to rally support against an en bloc sale.
'Owners here know that what we have is irreplaceable,' said resident Patrick Lim.
'We do not want to live in condos where the rooms are shoe boxes and the blocks look into one another. There is so much space and greenery here. We even have our own natural hill in the heart of Clementi Park.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
STANDING FIRM
The 28-year-old Clementi Park condo, which sits on freehold land, is well known for its hilly landscape and green environment
Clementi Park owners won't sell at any price
Survey shows general consensus against en bloc sale; sale committee has disbanded, marketing agent withdrawn
By CHAN YUPING
CLEMENTI Park Condominium residents do not want to sell their apartments - even for $1.25 billion or more.
A collective sale committee (CSC) has been disbanded and the marketing agent for the sale, Knight Frank, has withdrawn.
Knight Frank said that it did not think it was possible to get 80 per cent backing for a collective sale even if the reserve price was set higher at $1.4 billion, given the ownership profile and current market conditions.
The firm reached this conclusion based on 382 responses obtained from a total of 489 owners surveyed in April and May this year, which showed a general consensus against the sale.
In addition, 'because of the diversity of share value and strata area, it is difficult to get owners to agree to one method of apportionment', said Knight Frank.
Following the firm's withdrawal, the Clementi Park CSC, which was formed in November 2007, has disbanded after its final meeting on June 8.
Most CSC members reckoned it would be 'futile' to appoint a new marketing agent because the outcome would most likely be similar, and felt that 'the collective sale exercise should be aborted', said CSC secretary Winston Wong.
The 28-year-old condo, which sits on freehold land, is well known for its hilly landscape and green environment. It is next to Brookvale Condominium - another City Developments project - which has failed to go en bloc several times.
Clementi Park residents formed a website called saveclementipark.com to rally support against an en bloc sale.
'Owners here know that what we have is irreplaceable,' said resident Patrick Lim.
'We do not want to live in condos where the rooms are shoe boxes and the blocks look into one another. There is so much space and greenery here. We even have our own natural hill in the heart of Clementi Park.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
STANDING FIRM
The 28-year-old Clementi Park condo, which sits on freehold land, is well known for its hilly landscape and green environment
BT : Mega sales flop of HK luxurious apartments under probe
Business Times - 19 Jun 2010
Mega sales flop of HK luxurious apartments under probe
(Hong Kong) THE Hong Kong government said it is looking into the cancelled sales of Henderson Land apartments, which have pushed down the developer's shares this week.
Earlier this week, Henderson announced that it would record a loss of HK$734 million (S$130 million) from the cancellation of sales of 20 luxury flats in Hong Kong, which would be reflected in its first-half results. The cancellations included a duplex unit that had fetched a global record price of HK$71,280 per square foot last October.
'Any fraud or deception in property sales is totally unacceptable,' the government said in a statement issued late on Thursday.
The government said it was concerned after only four out of 24 previously announced sales were completed, and it would not tolerate any 'forged non-bona fide transactions'.
Regulatory and law enforcement agencies were looking into and following up on the case, the government said, without elaborating.
Henderson Land said it would cooperate with the probe. 'We welcome the action and will provide all necessary information because we believe this will help us clarify to the public,' said Henderson Land spokeswoman Bonnie Ngan.
On Thursday, Henderson Land vice- chairman Peter KK Lee, son of billionaire Lee Shau Kee, told Reuters that he expected no more sale cancellations here in the near term.
The cancellations led some research houses, such as DBS, Goldman Sachs and JPMorgan, to either downgrade the stock or lower their price targets. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mega sales flop of HK luxurious apartments under probe
(Hong Kong) THE Hong Kong government said it is looking into the cancelled sales of Henderson Land apartments, which have pushed down the developer's shares this week.
Earlier this week, Henderson announced that it would record a loss of HK$734 million (S$130 million) from the cancellation of sales of 20 luxury flats in Hong Kong, which would be reflected in its first-half results. The cancellations included a duplex unit that had fetched a global record price of HK$71,280 per square foot last October.
'Any fraud or deception in property sales is totally unacceptable,' the government said in a statement issued late on Thursday.
The government said it was concerned after only four out of 24 previously announced sales were completed, and it would not tolerate any 'forged non-bona fide transactions'.
Regulatory and law enforcement agencies were looking into and following up on the case, the government said, without elaborating.
Henderson Land said it would cooperate with the probe. 'We welcome the action and will provide all necessary information because we believe this will help us clarify to the public,' said Henderson Land spokeswoman Bonnie Ngan.
On Thursday, Henderson Land vice- chairman Peter KK Lee, son of billionaire Lee Shau Kee, told Reuters that he expected no more sale cancellations here in the near term.
The cancellations led some research houses, such as DBS, Goldman Sachs and JPMorgan, to either downgrade the stock or lower their price targets. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Far East, Frasers Centrepoint put in top bid for Yishun site
Business Times - 19 Jun 2010
Far East, Frasers Centrepoint put in top bid for Yishun site
Duo's joint bid is 17% above the only other offer from GuocoLand for the condo plot
By UMA SHANKARI
FAR East Organization and Frasers Centrepoint jointly submitted the higher of two bids for a condo site at Yishun at the close of a state tender yesterday.
The two developers bid $229.4 million, or $321 per sq ft (psf) of gross floor area, for the 99-year leasehold plot at the junction of Yishun Ave 2, Yishun Ave 7 and Canberra Drive.
Their bid was 17 per cent higher than the only other offer, which was from GuocoLand. GuocoLand offered $196 million or $274 psf of gross floor area.
Far East Organization and Frasers Centrepoint plan to build a 660-unit project on the site. The average size of the units will be about 1,000 sq ft, said a Frasers spokeswoman.
Analysts said the low level of interest in the site - just two bids - was one of the weakest responses to a state land tender in recent times. 'The site received a muted response probably because of its larger size,' said Leonard Tay, director of CBRE Research.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said developers may have been deterred by the large potential supply of new residential units due to come up in in Yishun and Sembawang.
Competition from this large supply means new projects will take longer to sell, Mr Mak said.
Upcoming supply in the area includes HDB flats - executive condominium units and flats under the design, build and sell scheme - and private condos that will go up on three sites sold by the government so far this year.
The latest site is not near Yishun station or many amenities, Mr Mak said: 'Therefore, the new project on this site may not be as popular with home-buyers, compared with other developments.'
Developers could also be conserving resources for state sites to be released in the second half of this year, analysts said.
The new Yishun project could break even around $600 psf and units could sell for $650 psf or higher, they said.
Data from CBRE Research shows that units in The Estuary were transacted at between $660 and $800 psf in March and April.
And in the resale market, units in adjacent Yishun Emerald and Yishun Sapphire went for $540-$630 psf from February to May.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Far East, Frasers Centrepoint put in top bid for Yishun site
Duo's joint bid is 17% above the only other offer from GuocoLand for the condo plot
By UMA SHANKARI
FAR East Organization and Frasers Centrepoint jointly submitted the higher of two bids for a condo site at Yishun at the close of a state tender yesterday.
The two developers bid $229.4 million, or $321 per sq ft (psf) of gross floor area, for the 99-year leasehold plot at the junction of Yishun Ave 2, Yishun Ave 7 and Canberra Drive.
Their bid was 17 per cent higher than the only other offer, which was from GuocoLand. GuocoLand offered $196 million or $274 psf of gross floor area.
Far East Organization and Frasers Centrepoint plan to build a 660-unit project on the site. The average size of the units will be about 1,000 sq ft, said a Frasers spokeswoman.
Analysts said the low level of interest in the site - just two bids - was one of the weakest responses to a state land tender in recent times. 'The site received a muted response probably because of its larger size,' said Leonard Tay, director of CBRE Research.
Ngee Ann Polytechnic real estate lecturer Nicholas Mak said developers may have been deterred by the large potential supply of new residential units due to come up in in Yishun and Sembawang.
Competition from this large supply means new projects will take longer to sell, Mr Mak said.
Upcoming supply in the area includes HDB flats - executive condominium units and flats under the design, build and sell scheme - and private condos that will go up on three sites sold by the government so far this year.
The latest site is not near Yishun station or many amenities, Mr Mak said: 'Therefore, the new project on this site may not be as popular with home-buyers, compared with other developments.'
Developers could also be conserving resources for state sites to be released in the second half of this year, analysts said.
The new Yishun project could break even around $600 psf and units could sell for $650 psf or higher, they said.
Data from CBRE Research shows that units in The Estuary were transacted at between $660 and $800 psf in March and April.
And in the resale market, units in adjacent Yishun Emerald and Yishun Sapphire went for $540-$630 psf from February to May.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : Room for new type of hotels
Jun 18, 2010
Room for new type of hotels
Kwek Leng Beng opens the door to new budget concept at launch of Studio M chain
By Harsha Jethnani
A NEW kind of budget hotel is on the drawing board at Millennium & Copthorne Hotels, even as it officially opens its new studio-inspired chain here.
Chairman Kwek Leng Beng said at the launch of the firm's first Studio M outlet yesterday: 'I'm a developer, I always like to create something that is exciting, that nobody has had before.'
He said he intends to introduce a 'real budget, budget hotel' that 'nobody has seen', although there are no firm details yet.
The price of land will be one factor that will influence the firm's plans, but Mr Kwek believes the concept is sound.
'Budget property is lacking in Singapore,' he said, but 'the Government is helping by offering sites'. He added that ideal locations would be outside of the central area, unless the Government could give shorter leases with lower premiums for centrally located land sites.
The firm's main event yesterday was the launch of the Studio M Hotel in Robertson Quay. It is aimed at young travellers who want designer-type, quality accommodation at affordable prices.
There are 360 rooms, each about 22 sq m in size, with free wireless connectivity.
'This is not a five-star hotel,' Mr Kwek said, but it fills 'the gap between a good four-star and a budget hotel' and could be viewed as 'limited service, with a twist'.
The hotel has been operating since March 26 and has achieved over 80 per cent occupancy, said a statement from M&C Hotels yesterday. The $120 million development is charging opening rates of $160 for weekends and $180 for weekdays. Normal rates will begin at a minimum $200.
Mr Kwek has said in the past that he intends to take the Studio M Hotel set-up overseas, and plans are under way for an outlet in India, industry sources told The Straits Times.
Enquiries have already come in from the Middle East and China, said Mr Kwek, who is also keen to introduce the brand to New Zealand.
M&C Hotels runs about 30 hotels in New Zealand, saying 'this is a concept they've never seen', in reference to the studio apartment and hotel hybrid model.
Mr Kwek's outlook for the hospitality sector is positive but, while 'projection is a good guideline, it is not necessarily the gospel truth'.
A lot also depends on the way governments in Asia choose to address concerns surrounding overheating markets, he added. Doing too much 'could kill the recovery' and sometimes, when 'you press the button too hard, the engine might stall'.
He also said room rates should improve this year 'because we are still 18 per cent below the peak of 2008', adding that average room rates in Singapore are among 'the cheapest around', compared with those in Western countries and even in other parts of Asia.
Mr Kwek added that it was important to increase the length of time that guests stay. The average length of stay here is four days, and he hopes to increase this to 41/2 to five days at his hotels, a change that could bring significant economic benefits.
harshamj@sph.com.sg
Room for new type of hotels
Kwek Leng Beng opens the door to new budget concept at launch of Studio M chain
By Harsha Jethnani
A NEW kind of budget hotel is on the drawing board at Millennium & Copthorne Hotels, even as it officially opens its new studio-inspired chain here.
Chairman Kwek Leng Beng said at the launch of the firm's first Studio M outlet yesterday: 'I'm a developer, I always like to create something that is exciting, that nobody has had before.'
He said he intends to introduce a 'real budget, budget hotel' that 'nobody has seen', although there are no firm details yet.
The price of land will be one factor that will influence the firm's plans, but Mr Kwek believes the concept is sound.
'Budget property is lacking in Singapore,' he said, but 'the Government is helping by offering sites'. He added that ideal locations would be outside of the central area, unless the Government could give shorter leases with lower premiums for centrally located land sites.
The firm's main event yesterday was the launch of the Studio M Hotel in Robertson Quay. It is aimed at young travellers who want designer-type, quality accommodation at affordable prices.
There are 360 rooms, each about 22 sq m in size, with free wireless connectivity.
'This is not a five-star hotel,' Mr Kwek said, but it fills 'the gap between a good four-star and a budget hotel' and could be viewed as 'limited service, with a twist'.
The hotel has been operating since March 26 and has achieved over 80 per cent occupancy, said a statement from M&C Hotels yesterday. The $120 million development is charging opening rates of $160 for weekends and $180 for weekdays. Normal rates will begin at a minimum $200.
Mr Kwek has said in the past that he intends to take the Studio M Hotel set-up overseas, and plans are under way for an outlet in India, industry sources told The Straits Times.
Enquiries have already come in from the Middle East and China, said Mr Kwek, who is also keen to introduce the brand to New Zealand.
M&C Hotels runs about 30 hotels in New Zealand, saying 'this is a concept they've never seen', in reference to the studio apartment and hotel hybrid model.
Mr Kwek's outlook for the hospitality sector is positive but, while 'projection is a good guideline, it is not necessarily the gospel truth'.
A lot also depends on the way governments in Asia choose to address concerns surrounding overheating markets, he added. Doing too much 'could kill the recovery' and sometimes, when 'you press the button too hard, the engine might stall'.
He also said room rates should improve this year 'because we are still 18 per cent below the peak of 2008', adding that average room rates in Singapore are among 'the cheapest around', compared with those in Western countries and even in other parts of Asia.
Mr Kwek added that it was important to increase the length of time that guests stay. The average length of stay here is four days, and he hopes to increase this to 41/2 to five days at his hotels, a change that could bring significant economic benefits.
harshamj@sph.com.sg
ST : Seletar Hills market to become trendy 'village'
Jun 18, 2010
Seletar Hills market to become trendy 'village'
Far East plans mall on market site modelled after Holland Village
By Francis Chan
A NEW retail project unveiled yesterday promises to add some buzz to the quiet Seletar Hills estate, where its old Housing Board wet market used to be.
Far East Organization plans to build a 45,000 sq ft two-storey mall with all modern conveniences on the site of the former market at the corner of Seletar and Yio Chu Kang roads.
Called Greenwich V, it will have a Cold Storage supermarket, pharmacy, 24-hour convenience store and foodcourt, and a slew of other lifestyle and essential services. It will also have alfresco dining and play areas, and open space for community events and weekend markets.
What was once just four blocks of HDB flats, a wet market and a hawker centre will be transformed into a modern and trendy 'village' that could open by the end of next year.
When the old market was demolished more than five years ago for redevelopment, residents of the estate lost the only amenities they had in the vicinity.
Mr Chng Kiong Huat, Far East executive director for development and planning, told The Straits Times that Greenwich V will be big on food and beverage offerings.
'We look at this as a very heavy F&B location. We have even designed one of the buildings to become like a jewel box of sorts, a focal point where we have a major dining area right in the centre of the mall,' he said.
Other features include wide outdoor walkways between shops, thick tree canopies and a spacious central square.
The mall will house 35 retail units ranging from 185 sq ft to 10,000 sq ft. Rental prices will range between $13 and $20 per sq ft, said Far East.
The Greenwich, an adjacent five-storey 319-unit residential project also being developed by the company, will offer units from 602 sq ft to 1,227 sq ft.
Although prices are yet to be determined, sales of the residential units are expected to start within the next two months, said a Far East spokesman.
Far East lodged a bid of $119 million for the site last September. At the time, it took the industry by surprise as it was 35 per cent higher than the second bid.
Mr Chng said Far East made the move because it saw value in the land, which had been released by the Government amid much uncertainty due to the downturn. He added that his job was to create a product that could 'connect with the people around the estate'.
'If you will, Holland Village is our reference in Singapore of what it will become; if you like Holland Village, you will like this,' said Mr Chng.
Greenwich V can potentially serve more than 500,000 residents in Seletar and nearby Yio Chu Kang, Sengkang, Serangoon and Hougang.
Seletar residents, who were shown visuals of the mall yesterday, welcomed the new development.
'It's been a while since we had our own 'village' of sorts in Seletar. It will be nice to not have to travel so far out to shop and eat,' said Mrs Wendy Tham, a resident of 22 years.
But there were concerns about increased traffic when the mall opens.
'Yes, it is good to have a mall here, but I hope it will not be too popular, or else the traffic will be heavy and I will have trouble getting home,' said a resident from nearby Gerald Crescent.
franchan@sph.com.sg
Greenwich V, which will be built on the site of the demolished Seletar Hills market, will have all the modern conveniences as well as alfresco dining, play areas and open space for public events and weekend markets. -- PHOTO: FAR EAST ORGANIZATION
Seletar Hills market to become trendy 'village'
Far East plans mall on market site modelled after Holland Village
By Francis Chan
A NEW retail project unveiled yesterday promises to add some buzz to the quiet Seletar Hills estate, where its old Housing Board wet market used to be.
Far East Organization plans to build a 45,000 sq ft two-storey mall with all modern conveniences on the site of the former market at the corner of Seletar and Yio Chu Kang roads.
Called Greenwich V, it will have a Cold Storage supermarket, pharmacy, 24-hour convenience store and foodcourt, and a slew of other lifestyle and essential services. It will also have alfresco dining and play areas, and open space for community events and weekend markets.
What was once just four blocks of HDB flats, a wet market and a hawker centre will be transformed into a modern and trendy 'village' that could open by the end of next year.
When the old market was demolished more than five years ago for redevelopment, residents of the estate lost the only amenities they had in the vicinity.
Mr Chng Kiong Huat, Far East executive director for development and planning, told The Straits Times that Greenwich V will be big on food and beverage offerings.
'We look at this as a very heavy F&B location. We have even designed one of the buildings to become like a jewel box of sorts, a focal point where we have a major dining area right in the centre of the mall,' he said.
Other features include wide outdoor walkways between shops, thick tree canopies and a spacious central square.
The mall will house 35 retail units ranging from 185 sq ft to 10,000 sq ft. Rental prices will range between $13 and $20 per sq ft, said Far East.
The Greenwich, an adjacent five-storey 319-unit residential project also being developed by the company, will offer units from 602 sq ft to 1,227 sq ft.
Although prices are yet to be determined, sales of the residential units are expected to start within the next two months, said a Far East spokesman.
Far East lodged a bid of $119 million for the site last September. At the time, it took the industry by surprise as it was 35 per cent higher than the second bid.
Mr Chng said Far East made the move because it saw value in the land, which had been released by the Government amid much uncertainty due to the downturn. He added that his job was to create a product that could 'connect with the people around the estate'.
'If you will, Holland Village is our reference in Singapore of what it will become; if you like Holland Village, you will like this,' said Mr Chng.
Greenwich V can potentially serve more than 500,000 residents in Seletar and nearby Yio Chu Kang, Sengkang, Serangoon and Hougang.
Seletar residents, who were shown visuals of the mall yesterday, welcomed the new development.
'It's been a while since we had our own 'village' of sorts in Seletar. It will be nice to not have to travel so far out to shop and eat,' said Mrs Wendy Tham, a resident of 22 years.
But there were concerns about increased traffic when the mall opens.
'Yes, it is good to have a mall here, but I hope it will not be too popular, or else the traffic will be heavy and I will have trouble getting home,' said a resident from nearby Gerald Crescent.
franchan@sph.com.sg
Greenwich V, which will be built on the site of the demolished Seletar Hills market, will have all the modern conveniences as well as alfresco dining, play areas and open space for public events and weekend markets. -- PHOTO: FAR EAST ORGANIZATION
BT : Plans for mall, condo on Seletar site
Business Times - 18 Jun 2010
Plans for mall, condo on Seletar site
Far East secures Cold Storage, Kopitiam as tenants
By KALPANA RASHIWALA
FAR East Oganization is building what it hopes will be a chic, two-storey mall on a Seletar site it bought in a state tender last year. Behind the mall will be a 319-unit, low-rise condo, The Greenwich, which could be launched for sale within two months.
The developer will hold the mall, named Greenwich V, as an investment property for rental income. It hopes to open the mall, which will have 35 retail units, by the end of next year. Tenants secured so far include Cold Storage, which will operate a supermarket of about 10,000 sq ft, 7-Eleven, Guardian and food court operator Kopitiam, which will occupy 6,354 sq ft.
Monthly asking rents for the remaining units are generally between $13 psf and $20 psf, according to Far East.
About half of the mall's 45,000 sq ft net lettable area will be leased to food and beverage outlets such as cafes and restaurants. Other tenants are likely to include hair salons, wine shops and providers of educational and medical services.
Located at the corner of Yio Chu Kang and Seletar roads, Greenwich V aims to serve not only residents in the established Seletar Hills Estate and surrounding area but the working population at the industrial estates in Yio Chu Kang and Ang Mo Kio, as well as the upcoming Seletar Aerospace Park. 'The immediate area around Greenwich V has a sizeable population who we believe are a little under- served at the moment, in terms of shopping and entertainment options,' said Far East's chief operating officer, retail business group, Kelvin Ling.
Greenwich V will blend in with the verdant surroundings. It will feature a piazza or central square, with alfresco dining and play areas.
The entire development - mall and condo - has been designed by ADDP Architects. The five-storey condo will have one, two and three-bedroom apartments ranging from 602 to 1,227 sq ft.'
Far East is developing the project on a site it clinched in an Urban Redevelopment Authority tender that closed in September last year.
Its winning bid of $119.08 million reflected a unit land cost of $376 per sq ft of potential gross floor area.
The property giant's top bid was 35 per cent above the second highest offer, from a unit of Centurion Properties. The tender drew 12 bidders in all.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Chic project: The 5-storey Greenwich condo - behind the mall named Greenwich V - will have 319 units with floor areas of 602-1,227 sq ft. About half of the mall 's 45,000 sq ft will be leased to food & beverage outlets
Plans for mall, condo on Seletar site
Far East secures Cold Storage, Kopitiam as tenants
By KALPANA RASHIWALA
FAR East Oganization is building what it hopes will be a chic, two-storey mall on a Seletar site it bought in a state tender last year. Behind the mall will be a 319-unit, low-rise condo, The Greenwich, which could be launched for sale within two months.
The developer will hold the mall, named Greenwich V, as an investment property for rental income. It hopes to open the mall, which will have 35 retail units, by the end of next year. Tenants secured so far include Cold Storage, which will operate a supermarket of about 10,000 sq ft, 7-Eleven, Guardian and food court operator Kopitiam, which will occupy 6,354 sq ft.
Monthly asking rents for the remaining units are generally between $13 psf and $20 psf, according to Far East.
About half of the mall's 45,000 sq ft net lettable area will be leased to food and beverage outlets such as cafes and restaurants. Other tenants are likely to include hair salons, wine shops and providers of educational and medical services.
Located at the corner of Yio Chu Kang and Seletar roads, Greenwich V aims to serve not only residents in the established Seletar Hills Estate and surrounding area but the working population at the industrial estates in Yio Chu Kang and Ang Mo Kio, as well as the upcoming Seletar Aerospace Park. 'The immediate area around Greenwich V has a sizeable population who we believe are a little under- served at the moment, in terms of shopping and entertainment options,' said Far East's chief operating officer, retail business group, Kelvin Ling.
Greenwich V will blend in with the verdant surroundings. It will feature a piazza or central square, with alfresco dining and play areas.
The entire development - mall and condo - has been designed by ADDP Architects. The five-storey condo will have one, two and three-bedroom apartments ranging from 602 to 1,227 sq ft.'
Far East is developing the project on a site it clinched in an Urban Redevelopment Authority tender that closed in September last year.
Its winning bid of $119.08 million reflected a unit land cost of $376 per sq ft of potential gross floor area.
The property giant's top bid was 35 per cent above the second highest offer, from a unit of Centurion Properties. The tender drew 12 bidders in all.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Chic project: The 5-storey Greenwich condo - behind the mall named Greenwich V - will have 319 units with floor areas of 602-1,227 sq ft. About half of the mall 's 45,000 sq ft will be leased to food & beverage outlets
BT : Hong Leong targets budget hotels as part of growth plans
Business Times - 18 Jun 2010
Hong Leong targets budget hotels as part of growth plans
New Studio M hotel aims to plug gap between four-star and budget hotels
By UMA SHANKARI
HONG Leong Group is hoping to grow its budget hotel segment in Singapore and the region, said executive chairman Kwek Leng Beng.
The group yesterday unveiled the latest addition to its Singapore hotel portfolio - the $110 million Studio M. The price tag for the hotel at Nanson Road in the Robertson Quay area includes the $45.8 million Hong Leong paid for the land in late 2006.
The price works out to $518 per square foot of potential gross floor area.
The 360-room Studio M - held under Hong Leong's London-listed unit Millennium & Copthorne Hotels - boasts unique loft-style rooms, which the conglomerate says is a first in Singapore. The property, which was designed by Italian architect Piero Lissoni, has achieved over 80 per cent occupancy since it opened its doors in late March.
The Studio M brand will plug the gap between four-star and budget hotels in Singapore, said Mr Kwek, who was speaking to reporters at the hotel's official opening yesterday.
'Young and savvy travellers looking for designer- type, quality accommodation will find Studio M's new concept and brand appealing,' said Mr Kwek. 'Not only will Studio M set a new benchmark in the local hospitality scene, we believe that it has potential to grow its presence overseas as well.'
But while he is looking for opportunities to grow the Studio M brand in both Singapore and the region, Mr Kwek also revealed that he is working on another concept for a 'strictly budget' chain of hotels.
Hong Leong is best known in Singapore for its luxury hotels such as the Grand Copthorne Waterfront Hotel and Orchard Hotel.
For the budget hotel business, Mr Kwek said he is looking at Singapore as well as Chinese cities. But the conglomerate will avoid saturated markets as well as places with volatile and unstable economies, he added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Studio M: The 360-room hotel in the Robertson Quay area has achieved over 80 per cent occupancy since it opened its doors in late March
Hong Leong targets budget hotels as part of growth plans
New Studio M hotel aims to plug gap between four-star and budget hotels
By UMA SHANKARI
HONG Leong Group is hoping to grow its budget hotel segment in Singapore and the region, said executive chairman Kwek Leng Beng.
The group yesterday unveiled the latest addition to its Singapore hotel portfolio - the $110 million Studio M. The price tag for the hotel at Nanson Road in the Robertson Quay area includes the $45.8 million Hong Leong paid for the land in late 2006.
The price works out to $518 per square foot of potential gross floor area.
The 360-room Studio M - held under Hong Leong's London-listed unit Millennium & Copthorne Hotels - boasts unique loft-style rooms, which the conglomerate says is a first in Singapore. The property, which was designed by Italian architect Piero Lissoni, has achieved over 80 per cent occupancy since it opened its doors in late March.
The Studio M brand will plug the gap between four-star and budget hotels in Singapore, said Mr Kwek, who was speaking to reporters at the hotel's official opening yesterday.
'Young and savvy travellers looking for designer- type, quality accommodation will find Studio M's new concept and brand appealing,' said Mr Kwek. 'Not only will Studio M set a new benchmark in the local hospitality scene, we believe that it has potential to grow its presence overseas as well.'
But while he is looking for opportunities to grow the Studio M brand in both Singapore and the region, Mr Kwek also revealed that he is working on another concept for a 'strictly budget' chain of hotels.
Hong Leong is best known in Singapore for its luxury hotels such as the Grand Copthorne Waterfront Hotel and Orchard Hotel.
For the budget hotel business, Mr Kwek said he is looking at Singapore as well as Chinese cities. But the conglomerate will avoid saturated markets as well as places with volatile and unstable economies, he added.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Studio M: The 360-room hotel in the Robertson Quay area has achieved over 80 per cent occupancy since it opened its doors in late March
BT : Pinnacle@Duxton wins Chicago award
Business Times - 18 Jun 2010
Pinnacle@Duxton wins Chicago award
Judging panel names it the best tall building in Asia and Australasia
By TEH SHI NING
THE Pinnacle@Duxton has been named Asia and Australasia's 'Best Tall Building' by the Chicago-based Council on Tall Buildings & Urban Habitat.
HDB's 50-storey residential project in Tanjong Pagar was named alongside Dubai's Burj Khalifa, the world's tallest building and winner for Middle East and Africa at the annual 'Best Tall Building' awards.
Europe's winner was the steel-clad Broadcasting Place in Leeds, United Kingdom, while New York's 55-storey Bank of America Tower took the Americas award this year.
The buildings were chosen less for their height - the Broadcasting Place in Leeds is just 70m, less than a tenth of the Burj Khalifa - and more for their 'design and technical innovations, sustainable attributes, and the enhancement they provide to both the cities and the lives of their inhabitants,' the council said.
It noted that The Pinnacle@Duxton 're-defines urban high density living by weaving continuous Sky Gardens on the 26th and 50th stories through all seven of the tower blocks'.
The overall winner of these four regional best tall buildings will be unveiled this October, at an awards ceremony in Chicago. The ceremony will also honour two individuals - William Pederson of Kohn Pederson Fox Associates and Ysrael A Seinuk of Ysrael A Seinuk PC - with lifetime achievement awards. Both were chosen for their contributions to tall buildings; their portfolios include many iconic skyscrapers.
This year's awards drew an unprecedented number of entries, said the awards committee, headed by Gordon Gill of Adrian Smith + Gordon Gill Architecture. Also on the jury were Ahmad Abdelrazaq of Korea's Samsung, Bruce Kuwabara of Canada's KPMB Architects, Peter Murray of UK's Wordsearch, Matthias Schuler of Germany's Transolar, Mun Summ Wong of Singapore's WOHA, and Antony Wood from CTBUH.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Standing tall: The Pinnacle@Duxton 're-defines urban high density living by weaving continuous Sky Gardens... through all seven of the tower blocks'
Pinnacle@Duxton wins Chicago award
Judging panel names it the best tall building in Asia and Australasia
By TEH SHI NING
THE Pinnacle@Duxton has been named Asia and Australasia's 'Best Tall Building' by the Chicago-based Council on Tall Buildings & Urban Habitat.
HDB's 50-storey residential project in Tanjong Pagar was named alongside Dubai's Burj Khalifa, the world's tallest building and winner for Middle East and Africa at the annual 'Best Tall Building' awards.
Europe's winner was the steel-clad Broadcasting Place in Leeds, United Kingdom, while New York's 55-storey Bank of America Tower took the Americas award this year.
The buildings were chosen less for their height - the Broadcasting Place in Leeds is just 70m, less than a tenth of the Burj Khalifa - and more for their 'design and technical innovations, sustainable attributes, and the enhancement they provide to both the cities and the lives of their inhabitants,' the council said.
It noted that The Pinnacle@Duxton 're-defines urban high density living by weaving continuous Sky Gardens on the 26th and 50th stories through all seven of the tower blocks'.
The overall winner of these four regional best tall buildings will be unveiled this October, at an awards ceremony in Chicago. The ceremony will also honour two individuals - William Pederson of Kohn Pederson Fox Associates and Ysrael A Seinuk of Ysrael A Seinuk PC - with lifetime achievement awards. Both were chosen for their contributions to tall buildings; their portfolios include many iconic skyscrapers.
This year's awards drew an unprecedented number of entries, said the awards committee, headed by Gordon Gill of Adrian Smith + Gordon Gill Architecture. Also on the jury were Ahmad Abdelrazaq of Korea's Samsung, Bruce Kuwabara of Canada's KPMB Architects, Peter Murray of UK's Wordsearch, Matthias Schuler of Germany's Transolar, Mun Summ Wong of Singapore's WOHA, and Antony Wood from CTBUH.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Standing tall: The Pinnacle@Duxton 're-defines urban high density living by weaving continuous Sky Gardens... through all seven of the tower blocks'
BT : Distressed property to be sold
Business Times - 17 Jun 2010
Distressed property to be sold
Lenders loosening hold on these assets; multi-family property in demand
(NEW YORK) Financial institutions that have lent money to property investors are starting to loosen their hold on these properties, potentially putting more property into play, property insiders said this week.
Multi-family property is an area where this is happening, with relatively strong demand and banks more willing to move properties off their books, one top executive said at the Reuters Global Real Estate and Infrastructure Summit in New York.
'They seem like they're much more aggressive now. They're starting to really take things into hand, calling up and saying, 'What's the real number? How can we get this sold?' They want to step in. They want to get it done,' said Pam Liebman, chief executive of the Corcoran Group.
Many commercial property players have said that billions of dollars are waiting to be invested in distressed property.
However, little desirable property is on the market because banks are concerned about the strength of their balance sheets and are unwilling to write down property values, they noted.
Richard LeFrak, chief executive of the LeFrak Organization, a commercial property developer, said that overall, banks are still largely sitting on the assets when they can. 'They're waiting for their capital to get more robust before they have to write these things down. And if you could pay any kind of interest, they can play with you,' Mr LeFrak said.
This could happen, for instance, with European financial institutions invested in syndicated loans to largely failed condominium developments, he said.
'I think that some of the European banks are under a little more pressure now to raise cash, and that they may be forcing things where they are participating in some loans,' Mr LeFrak said.
Banks have not moved more quickly because they are still under water on some assets, these specialists said. 'I think they are culling through the inventory just like anybody else would and saying, 'If I wait with this one, I will do better',' Mr LeFrak said.
Among areas where banks have been willing to move in quickly to sell are hotel properties, where the taint of foreclosure can hurt business and eat into values quickly, according to Evercore Partners senior managing director Martin Cicco. 'There is a negative perception so they tend to move more quickly on that type of asset,' Mr Cicco said, noting that a hotel is an ongoing business rather than just a property\. \-- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mr LeFrak: 'They're waiting for their capital to get more robust before they have to write these things down.'
Distressed property to be sold
Lenders loosening hold on these assets; multi-family property in demand
(NEW YORK) Financial institutions that have lent money to property investors are starting to loosen their hold on these properties, potentially putting more property into play, property insiders said this week.
Multi-family property is an area where this is happening, with relatively strong demand and banks more willing to move properties off their books, one top executive said at the Reuters Global Real Estate and Infrastructure Summit in New York.
'They seem like they're much more aggressive now. They're starting to really take things into hand, calling up and saying, 'What's the real number? How can we get this sold?' They want to step in. They want to get it done,' said Pam Liebman, chief executive of the Corcoran Group.
Many commercial property players have said that billions of dollars are waiting to be invested in distressed property.
However, little desirable property is on the market because banks are concerned about the strength of their balance sheets and are unwilling to write down property values, they noted.
Richard LeFrak, chief executive of the LeFrak Organization, a commercial property developer, said that overall, banks are still largely sitting on the assets when they can. 'They're waiting for their capital to get more robust before they have to write these things down. And if you could pay any kind of interest, they can play with you,' Mr LeFrak said.
This could happen, for instance, with European financial institutions invested in syndicated loans to largely failed condominium developments, he said.
'I think that some of the European banks are under a little more pressure now to raise cash, and that they may be forcing things where they are participating in some loans,' Mr LeFrak said.
Banks have not moved more quickly because they are still under water on some assets, these specialists said. 'I think they are culling through the inventory just like anybody else would and saying, 'If I wait with this one, I will do better',' Mr LeFrak said.
Among areas where banks have been willing to move in quickly to sell are hotel properties, where the taint of foreclosure can hurt business and eat into values quickly, according to Evercore Partners senior managing director Martin Cicco. 'There is a negative perception so they tend to move more quickly on that type of asset,' Mr Cicco said, noting that a hotel is an ongoing business rather than just a property\. \-- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mr LeFrak: 'They're waiting for their capital to get more robust before they have to write these things down.'
BT : US housing starts drop to five-month low in May
Business Times - 17 Jun 2010
LATEST US DATA
US housing starts drop to five-month low in May
(WASHINGTON) US housing starts fell more than expected last month to their lowest level in five months, a government report showed yesterday, as a popular homebuyer tax credit that had buoyed construction activity over the past two months expired.
The Commerce Department said that housing starts dropped 10 per cent to a seasonally adjusted annual rate of 593,000 units, the lowest level since December. The percentage decline was the biggest in 14 months. April's housing starts were revised down to show a 3.9 per cent increase, which was previously reported as a 5.8 per cent rise.
Analysts polled by Reuters had expected housing starts to fall to 650,000 units. Compared to May last year, starts were up 7.8 per cent.
New building permits, which give a sense of future home construction, dropped 5.9 per cent to a 574,000-unit pace last month, the lowest in a year. That followed a 10.9 per cent drop in April and compared to analysts' forecasts for a rise to 630,000 units.
Housing starts rose in March and April as new home construction was pushed forward to take advantage of a government tax credit for home buyers. Buyers had to sign contracts by April 30 to qualify for the tax credit.
In the wake of the end of the tax credit, home builder sentiment fell sharply this month. Analysts, however, believe the pullback in housing will be temporary, citing the gradual improvement in the economy. Demand for loans to buy homes rebounded from 13-year lows last week.
Groundbreaking for single-family homes tumbled 17.2 per cent to an annual rate of 468,000 units last month after a 5.6 per cent increase in April. The percentage decline last month was the largest since January 1991 and snapped four months of gains.
However, starts for the volatile multi-family segment surged 33 per cent to a 125,000-unit annual pace. Home completions fell 7.4 per cent to a 687,000-unit pace.
The inventory of total houses under construction fell 2.3 per cent to a record low 475,000 units last month, while the total number of units authorised, but not yet started dropped 4 per cent to 91,200 units, the lowest since November.
Meanwhile, wholesale prices in the US fell last month for the third time in the past four months, pulled down by lower costs for energy and food as European default concerns threatened to slow the global expansion.
The 0.3 per cent decline in prices paid to factories, farmers and other producers was smaller than projected by the median forecast of economists surveyed by Bloomberg News and followed a 0.1 per cent drop in April, figures from the Labor Department showed yesterday in Washington.
Excluding food and fuel, so-called core prices climbed 0.2 per cent for a second month.
Prices excluding food and fuel were projected to rise 0.1 per cent. About 40 per cent of the increase in core prices last month was due to a 0.8 per cent jump in the cost of light trucks, the Labor Department said. Cigarette and civilian aircraft prices also climbed. - Reuters, Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
LATEST US DATA
US housing starts drop to five-month low in May
(WASHINGTON) US housing starts fell more than expected last month to their lowest level in five months, a government report showed yesterday, as a popular homebuyer tax credit that had buoyed construction activity over the past two months expired.
The Commerce Department said that housing starts dropped 10 per cent to a seasonally adjusted annual rate of 593,000 units, the lowest level since December. The percentage decline was the biggest in 14 months. April's housing starts were revised down to show a 3.9 per cent increase, which was previously reported as a 5.8 per cent rise.
Analysts polled by Reuters had expected housing starts to fall to 650,000 units. Compared to May last year, starts were up 7.8 per cent.
New building permits, which give a sense of future home construction, dropped 5.9 per cent to a 574,000-unit pace last month, the lowest in a year. That followed a 10.9 per cent drop in April and compared to analysts' forecasts for a rise to 630,000 units.
Housing starts rose in March and April as new home construction was pushed forward to take advantage of a government tax credit for home buyers. Buyers had to sign contracts by April 30 to qualify for the tax credit.
In the wake of the end of the tax credit, home builder sentiment fell sharply this month. Analysts, however, believe the pullback in housing will be temporary, citing the gradual improvement in the economy. Demand for loans to buy homes rebounded from 13-year lows last week.
Groundbreaking for single-family homes tumbled 17.2 per cent to an annual rate of 468,000 units last month after a 5.6 per cent increase in April. The percentage decline last month was the largest since January 1991 and snapped four months of gains.
However, starts for the volatile multi-family segment surged 33 per cent to a 125,000-unit annual pace. Home completions fell 7.4 per cent to a 687,000-unit pace.
The inventory of total houses under construction fell 2.3 per cent to a record low 475,000 units last month, while the total number of units authorised, but not yet started dropped 4 per cent to 91,200 units, the lowest since November.
Meanwhile, wholesale prices in the US fell last month for the third time in the past four months, pulled down by lower costs for energy and food as European default concerns threatened to slow the global expansion.
The 0.3 per cent decline in prices paid to factories, farmers and other producers was smaller than projected by the median forecast of economists surveyed by Bloomberg News and followed a 0.1 per cent drop in April, figures from the Labor Department showed yesterday in Washington.
Excluding food and fuel, so-called core prices climbed 0.2 per cent for a second month.
Prices excluding food and fuel were projected to rise 0.1 per cent. About 40 per cent of the increase in core prices last month was due to a 0.8 per cent jump in the cost of light trucks, the Labor Department said. Cigarette and civilian aircraft prices also climbed. - Reuters, Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Buyers get cold feet over HK$2.6b luxury condo units
Business Times - 17 Jun 2010
Buyers get cold feet over HK$2.6b luxury condo units
(HONG KONG) Billionaire Lee Shau-kee's Henderson Land Development Co said that the sale of 20 luxury apartments had collapsed, ending HK$2.67 billion (S$478.2 million) in deals that sparked a government inquiry and fuelled efforts to rein in home prices.
Most buyers pulled out of the 39 Conduit Road project in the Mid-Levels district, Henderson said in a filing with the stock exchange on Tuesday, responding to government demands for more information on the sales of 24 units. It said that it had sold four of the units and would record a charge of HK$734 million in its half-year results.
The failure of the sales, including a unit that would have set a world record price of HK$88,000 per square foot, marks a setback for Hong Kong's second-richest man as regulators try to cool a surging property market. Mr Lee had said in March that buyers could have more time to complete the deals.
The cancellations are 'quite a negative surprise', said Raymond Ngai, an analyst at JPMorgan Chase & Co. 'Those record prices they reported earlier, I doubt they'll be able to sell them at those prices again . . . To sell them for around HK$30,000 per square foot is still quite possible. But selling an apartment at HK$70,000 a square foot is just too out of line with the market.'
'We won't be cutting prices,' Mr Lee told reporters on Tuesday. 'Maybe we'll make more money when we sell these apartments again.'
The company added that it was confident in selling the apartments because of the 'prestigious' location, and will be 'sparing' with sales.
Henderson announced the sale cancellations after the stock market closed on Tuesday. The market was closed yesterday for a public holiday.
Responding to an outcry over rising property prices last year, Hong Kong raised downpayments on luxury homes to 40 per cent from 30 per cent and clamped down on marketing techniques.
The HK$439 million apartment that Henderson had said was sold for a record - based on usable space excluding common areas - was listed on the 68th floor when it was actually on the 45th. Floor numbers are often skipped in Hong Kong to avoid those considered unlucky.
In a March 30 release, Henderson included sales of the 24 apartments plus one that was sold in a completed transaction as part of its revenue of HK$15.2 billion for the 18 months ended December 2009.
The total price of the 20 apartments whose sales collapsed came to HK$2.67 billion, Henderson spokeswoman Bonnie Ngan said yesterday.
The government responded to Henderson's filing, saying that 'clear market information' is important to the city. 'The government is determined to create a fairer and a more transparent environment for flat purchasers.'
Home prices have risen 5.7 per cent this year, adding to 2009's 29 per cent advance and raising concerns that the market is overheating. Builders often sell apartments before they are completed, drawing in customers by showing models of the homes.
The government this month tightened rules on new home sales, including the implementation of unfurnished show apartments and asking developers to disclose properties sold to their own executives.
Financial Secretary John Tsang in February announced higher stamp duty on luxury properties and pledged to raise the supply of land as he wants to reduce the risk of 'a property bubble' and keep housing affordable\. \-- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mr Lee: Maybe we'll make more money when we sell these apartments again.
Buyers get cold feet over HK$2.6b luxury condo units
(HONG KONG) Billionaire Lee Shau-kee's Henderson Land Development Co said that the sale of 20 luxury apartments had collapsed, ending HK$2.67 billion (S$478.2 million) in deals that sparked a government inquiry and fuelled efforts to rein in home prices.
Most buyers pulled out of the 39 Conduit Road project in the Mid-Levels district, Henderson said in a filing with the stock exchange on Tuesday, responding to government demands for more information on the sales of 24 units. It said that it had sold four of the units and would record a charge of HK$734 million in its half-year results.
The failure of the sales, including a unit that would have set a world record price of HK$88,000 per square foot, marks a setback for Hong Kong's second-richest man as regulators try to cool a surging property market. Mr Lee had said in March that buyers could have more time to complete the deals.
The cancellations are 'quite a negative surprise', said Raymond Ngai, an analyst at JPMorgan Chase & Co. 'Those record prices they reported earlier, I doubt they'll be able to sell them at those prices again . . . To sell them for around HK$30,000 per square foot is still quite possible. But selling an apartment at HK$70,000 a square foot is just too out of line with the market.'
'We won't be cutting prices,' Mr Lee told reporters on Tuesday. 'Maybe we'll make more money when we sell these apartments again.'
The company added that it was confident in selling the apartments because of the 'prestigious' location, and will be 'sparing' with sales.
Henderson announced the sale cancellations after the stock market closed on Tuesday. The market was closed yesterday for a public holiday.
Responding to an outcry over rising property prices last year, Hong Kong raised downpayments on luxury homes to 40 per cent from 30 per cent and clamped down on marketing techniques.
The HK$439 million apartment that Henderson had said was sold for a record - based on usable space excluding common areas - was listed on the 68th floor when it was actually on the 45th. Floor numbers are often skipped in Hong Kong to avoid those considered unlucky.
In a March 30 release, Henderson included sales of the 24 apartments plus one that was sold in a completed transaction as part of its revenue of HK$15.2 billion for the 18 months ended December 2009.
The total price of the 20 apartments whose sales collapsed came to HK$2.67 billion, Henderson spokeswoman Bonnie Ngan said yesterday.
The government responded to Henderson's filing, saying that 'clear market information' is important to the city. 'The government is determined to create a fairer and a more transparent environment for flat purchasers.'
Home prices have risen 5.7 per cent this year, adding to 2009's 29 per cent advance and raising concerns that the market is overheating. Builders often sell apartments before they are completed, drawing in customers by showing models of the homes.
The government this month tightened rules on new home sales, including the implementation of unfurnished show apartments and asking developers to disclose properties sold to their own executives.
Financial Secretary John Tsang in February announced higher stamp duty on luxury properties and pledged to raise the supply of land as he wants to reduce the risk of 'a property bubble' and keep housing affordable\. \-- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mr Lee: Maybe we'll make more money when we sell these apartments again.
BT : Freak flood silences Orchard Road tills
Business Times - 17 Jun 2010
Freak flood silences Orchard Road tills
Businesses count the costs and insurers gear up for claims as massive downpour wreaks damage
By UMA SHANKARI AND FELDA CHAY
(SINGAPORE) Businesses in Singapore's foremost shopping district found themselves under water yesterday as a massive downpour flooded the area for the first time in more than 25 years.
Water cascaded into buildings and stores at the junction of Orchard and Scotts roads, causing hundreds of thousands of dollars of damage and lost sales. Retailers and F&B outlets saw takings evaporate as shoppers and the lunchtime crowd stayed away.
'This is the heaviest and most severe flood I can recall in the area,' said Orchard Road Business Association spokesman Stephen Goh.
Almost 100mm of rain - more than 60 per cent of the monthly average for June - fell between about 9am and 11am. National water agency PUB said that flood water was up to 30cm deep at the intersection of Orchard and Scotts roads. The last major flooding at this spot was in 1984. PUB will investigate once the water level in drains subsides.
Other parts of central Singapore such as Coronation Road West, Fourth Avenue, Kings Road, Kheam Hock Road and Veerasamy Road also suffered flooding, though the water had subsided by noon.
In last November's flood in the Bukit Timah area, 92 mm of rain fell in about half an hour during lunch time. The total amount of rainfall logged in the area was 110mm - accounting for 43 per cent of the average monthly rainfall for November.
In yesterday's flooding, older Orchard Road properties such as Lucky Plaza, Liat Towers and Tong Building were hit hardest as water poured into buildings and swamped shops, carparks and some underpasses.
At Liat Towers, retailers Hermes and Massimo Dutti and F&B players Wendy's and Starbucks had to shut up shop as water started rushing into their below-ground space around 10am.
At Starbucks, flooding started just after 10am - and civil defence workers were still pumping out water at 3pm. At its height, the flood was as high as the shop's tables. 'We will assess the condition of the store after the water subsides to determine when we can re-open for business,' a spokesman said.
Wendy's is also checking damage to equipment, goods and infrastructure before deciding when to re-open. The fast-food outlet only started business at Liat Towers on Monday after $500,000 was spent on renovations. A spokesman said that Wendy's hopes to be able to resume operations in two weeks.
At Lucky Plaza, basement shops inundated, and most of the shops were still mopping up in the afternoon. Shoe shop Relantino Leathers put its damage at $7,000-$8,000, and said it may be closed for two or three days. Some hotels in the area were affected, as goods could not be delivered because loading and unloading bays were flooded.
Flooding was also reported in the Tong Building's underground carpark and the underpass between Lucky Plaza and Ngee Ann City, said the Orchard Road Business Association.
Its spokesman Mr Goh said that older buildings took the biggest hit because, unlike newer properties, their design does not prevent rainwater from overflowing into basements.
Newer properties were drenched too, though not as badly. Water seeped into the common area in Wisma Atria's first level, but this was 'promptly addressed', said Jaclyn Ng, general manager of YTL Starhill Global Property Management, which runs the retail trust that owns stakes in Wisma Atria and neighbouring mall Ngee Ann City.
Businesses will now make insurance claims to recoup the losses they suffered in the deluge.
'The Massimo Dutti store (at Liat Towers) is adequately insured,' said a spokeswoman for RSH, which handles the label in Singapore. 'There were no customers inside the store during the flash flood. All staff on duty are safe and no one was injured.'
Insurers will pay - as long as the claims are valid. The General Insurance Association of Singapore said that businesses should check their fire insurance policies - which usually cover flooding - and make sure they know what is covered or not covered before making a claim.
It is too early to assess the overall damage and level of claims, said NTUC Income's senior vice-president and general manager for general insurance Pui Phusangmook. 'In the meantime, customers can count on us to honour all policy terms relating to flood damage, and to handle their claims fairly and promptly.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Water, water, everywhere: Businesses did not suffer alone. Many motorists and passengers were stranded inside cars and buses
Freak flood silences Orchard Road tills
Businesses count the costs and insurers gear up for claims as massive downpour wreaks damage
By UMA SHANKARI AND FELDA CHAY
(SINGAPORE) Businesses in Singapore's foremost shopping district found themselves under water yesterday as a massive downpour flooded the area for the first time in more than 25 years.
Water cascaded into buildings and stores at the junction of Orchard and Scotts roads, causing hundreds of thousands of dollars of damage and lost sales. Retailers and F&B outlets saw takings evaporate as shoppers and the lunchtime crowd stayed away.
'This is the heaviest and most severe flood I can recall in the area,' said Orchard Road Business Association spokesman Stephen Goh.
Almost 100mm of rain - more than 60 per cent of the monthly average for June - fell between about 9am and 11am. National water agency PUB said that flood water was up to 30cm deep at the intersection of Orchard and Scotts roads. The last major flooding at this spot was in 1984. PUB will investigate once the water level in drains subsides.
Other parts of central Singapore such as Coronation Road West, Fourth Avenue, Kings Road, Kheam Hock Road and Veerasamy Road also suffered flooding, though the water had subsided by noon.
In last November's flood in the Bukit Timah area, 92 mm of rain fell in about half an hour during lunch time. The total amount of rainfall logged in the area was 110mm - accounting for 43 per cent of the average monthly rainfall for November.
In yesterday's flooding, older Orchard Road properties such as Lucky Plaza, Liat Towers and Tong Building were hit hardest as water poured into buildings and swamped shops, carparks and some underpasses.
At Liat Towers, retailers Hermes and Massimo Dutti and F&B players Wendy's and Starbucks had to shut up shop as water started rushing into their below-ground space around 10am.
At Starbucks, flooding started just after 10am - and civil defence workers were still pumping out water at 3pm. At its height, the flood was as high as the shop's tables. 'We will assess the condition of the store after the water subsides to determine when we can re-open for business,' a spokesman said.
Wendy's is also checking damage to equipment, goods and infrastructure before deciding when to re-open. The fast-food outlet only started business at Liat Towers on Monday after $500,000 was spent on renovations. A spokesman said that Wendy's hopes to be able to resume operations in two weeks.
At Lucky Plaza, basement shops inundated, and most of the shops were still mopping up in the afternoon. Shoe shop Relantino Leathers put its damage at $7,000-$8,000, and said it may be closed for two or three days. Some hotels in the area were affected, as goods could not be delivered because loading and unloading bays were flooded.
Flooding was also reported in the Tong Building's underground carpark and the underpass between Lucky Plaza and Ngee Ann City, said the Orchard Road Business Association.
Its spokesman Mr Goh said that older buildings took the biggest hit because, unlike newer properties, their design does not prevent rainwater from overflowing into basements.
Newer properties were drenched too, though not as badly. Water seeped into the common area in Wisma Atria's first level, but this was 'promptly addressed', said Jaclyn Ng, general manager of YTL Starhill Global Property Management, which runs the retail trust that owns stakes in Wisma Atria and neighbouring mall Ngee Ann City.
Businesses will now make insurance claims to recoup the losses they suffered in the deluge.
'The Massimo Dutti store (at Liat Towers) is adequately insured,' said a spokeswoman for RSH, which handles the label in Singapore. 'There were no customers inside the store during the flash flood. All staff on duty are safe and no one was injured.'
Insurers will pay - as long as the claims are valid. The General Insurance Association of Singapore said that businesses should check their fire insurance policies - which usually cover flooding - and make sure they know what is covered or not covered before making a claim.
It is too early to assess the overall damage and level of claims, said NTUC Income's senior vice-president and general manager for general insurance Pui Phusangmook. 'In the meantime, customers can count on us to honour all policy terms relating to flood damage, and to handle their claims fairly and promptly.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Water, water, everywhere: Businesses did not suffer alone. Many motorists and passengers were stranded inside cars and buses
China 'bubble' will burst soon: Nomura
Business Times - 17 Jun 2010
VIEWS ON CHINA PROPERTY
China 'bubble' will burst soon: Nomura
(SINGAPORE) The 'bubble' in China's property market is going to burst very quickly, with prices set to fall as much as 20 per cent in the next 12-18 months, according to Nomura Holdings Inc.
National real estate prices may drop 10-20 per cent on average, compared with an increase of about 22 per cent last year, Sun Mingchun, a Hong Kong-based economist at Nomura, said in a Bloomberg Television interview.
'If you look at (the ratio of) housing prices to disposable income in Beijing and Shanghai, they are 13, 14 times,' said Mr Sun, whose team was ranked third in Institutional Investor's 2010 Asian poll for China research. 'There's no way you can say there's no bubble.'
Real estate prices jumped 12.4 per cent across 70 cities in May, adding to the 12.8 per cent surge in April that was the most since the data series began in 2005. The gains suggest that measures ranging from a ban on loans for third-home purchases to higher mortgage rates and downpayment requirements for second-home purchases have yet to cool the real estate market.
Stephen Roach, chairman of Morgan Stanley Asia Ltd, said the government's measures are working 'by all accounts'. China's property boom isn't a bubble because it's supported by 'solid' demand for residential housing, he said.
While portions of the real estate market such as high-end apartments are overheating, demand for homes will remain robust as rural Chinese migrate to bigger cities, he said in a radio interview from Hong Kong with Tom Keene on Bloomberg Surveillance.
'This is just a sliver of the property boom,' Mr Roach said, citing that each year since 2000, 15-20 million people migrate to Beijing, Shanghai, and second- and third-tier cities in mainland China. That's 2-1/2 New York Cities created annually, he said. 'This underpins a huge demand for residential property. This property has not overheated and the demand for this property is very, very solid.'
The China Banking Regulatory Commission warned of growing credit risks in the nation's real estate industry and increasing pressures of non-performing loans. Risks associated with home mortgages are growing and a 'chain effect' may reappear in real estate development loans, according to its annual report published on its website on Tuesday. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
VIEWS ON CHINA PROPERTY
China 'bubble' will burst soon: Nomura
(SINGAPORE) The 'bubble' in China's property market is going to burst very quickly, with prices set to fall as much as 20 per cent in the next 12-18 months, according to Nomura Holdings Inc.
National real estate prices may drop 10-20 per cent on average, compared with an increase of about 22 per cent last year, Sun Mingchun, a Hong Kong-based economist at Nomura, said in a Bloomberg Television interview.
'If you look at (the ratio of) housing prices to disposable income in Beijing and Shanghai, they are 13, 14 times,' said Mr Sun, whose team was ranked third in Institutional Investor's 2010 Asian poll for China research. 'There's no way you can say there's no bubble.'
Real estate prices jumped 12.4 per cent across 70 cities in May, adding to the 12.8 per cent surge in April that was the most since the data series began in 2005. The gains suggest that measures ranging from a ban on loans for third-home purchases to higher mortgage rates and downpayment requirements for second-home purchases have yet to cool the real estate market.
Stephen Roach, chairman of Morgan Stanley Asia Ltd, said the government's measures are working 'by all accounts'. China's property boom isn't a bubble because it's supported by 'solid' demand for residential housing, he said.
While portions of the real estate market such as high-end apartments are overheating, demand for homes will remain robust as rural Chinese migrate to bigger cities, he said in a radio interview from Hong Kong with Tom Keene on Bloomberg Surveillance.
'This is just a sliver of the property boom,' Mr Roach said, citing that each year since 2000, 15-20 million people migrate to Beijing, Shanghai, and second- and third-tier cities in mainland China. That's 2-1/2 New York Cities created annually, he said. 'This underpins a huge demand for residential property. This property has not overheated and the demand for this property is very, very solid.'
The China Banking Regulatory Commission warned of growing credit risks in the nation's real estate industry and increasing pressures of non-performing loans. Risks associated with home mortgages are growing and a 'chain effect' may reappear in real estate development loans, according to its annual report published on its website on Tuesday. -- Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Industrial site in Ubi up for sale
Business Times - 17 Jun 2010
Industrial site in Ubi up for sale
By UMA SHANKARI
A 3.5-hectare industrial site at Ubi Road 1 is up for sale by public tender, the Urban Redevelopment Authority (URA) said on Tuesday. The plot is one of two industrial sites launched for sale from the confirmed list of the first-half 2010 government industrial land sales programme. The first site, at Tampines Industrial Avenue 4, was sold earlier this month.
The latest site, with a 60-year lease, is 375,150 sq ft and has a 2.5 plot ratio - giving a maximum gross floor area of 937,875 sq ft. Analysts reckon it could fetch $61-75 million, or $65-80 per sq ft per plot ratio (psf ppr).
'The site is quite attractive,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. 'But quite a few industrial sites have been sold since the start of the year, so rationally the bids shouldn't be too high.'
Savills Singapore's industrial director Dominic Peters also said interest could be muted as there is already a large supply of strata-titled units in the area. The site is also 'fairly big', he said.
The plot is zoned 'Business 1', which means it can be developed for various uses such as clean and light industry - which includes computer software development, printing and publishing, assembly and repair of computer hardware and electronic equipment.
The Tampines site was sold to Soon Hock Tuas Development, which submitted the highest bid of $33.1 million for the 30-year leasehold plot. That worked out to $62 psf ppr.
The tender for the Ubi Road 1 site closes at noon on Aug 11.
Demand for industrial sites has been strong this year as the economy picks up. And analysts expect demand to grow further as manufacturers expand and institutional funds return to scout for investments.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Industrial site in Ubi up for sale
By UMA SHANKARI
A 3.5-hectare industrial site at Ubi Road 1 is up for sale by public tender, the Urban Redevelopment Authority (URA) said on Tuesday. The plot is one of two industrial sites launched for sale from the confirmed list of the first-half 2010 government industrial land sales programme. The first site, at Tampines Industrial Avenue 4, was sold earlier this month.
The latest site, with a 60-year lease, is 375,150 sq ft and has a 2.5 plot ratio - giving a maximum gross floor area of 937,875 sq ft. Analysts reckon it could fetch $61-75 million, or $65-80 per sq ft per plot ratio (psf ppr).
'The site is quite attractive,' said Ngee Ann Polytechnic real estate lecturer Nicholas Mak. 'But quite a few industrial sites have been sold since the start of the year, so rationally the bids shouldn't be too high.'
Savills Singapore's industrial director Dominic Peters also said interest could be muted as there is already a large supply of strata-titled units in the area. The site is also 'fairly big', he said.
The plot is zoned 'Business 1', which means it can be developed for various uses such as clean and light industry - which includes computer software development, printing and publishing, assembly and repair of computer hardware and electronic equipment.
The Tampines site was sold to Soon Hock Tuas Development, which submitted the highest bid of $33.1 million for the 30-year leasehold plot. That worked out to $62 psf ppr.
The tender for the Ubi Road 1 site closes at noon on Aug 11.
Demand for industrial sites has been strong this year as the economy picks up. And analysts expect demand to grow further as manufacturers expand and institutional funds return to scout for investments.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : En bloc: Tanglin Shopping Centre up for sale again
Business Times - 17 Jun 2010
En bloc: Tanglin Shopping Centre up for sale again
Reserve price of $1.25b works out to a high $4,167 psf ppr
THE freehold Tanglin Shopping Centre is on the en bloc trail again, and the reserve price listed in the collective sales agreement (CSA), for which signing has started, is understood to be $1.25 billion.
Based on this, the unit land price works out to a whopping sum of about $4,167 per square foot of potential gross floor area.
The assumption is that no development charge is payable and that the new owner will be able to build up to the property's existing gross floor area (GFA) of about 300,000 sq ft, even though this slightly exceeds the maximum 287,700 sq ft under Master Plan 2008.
The unit land price would be a record level and property consultants polled by BT yesterday evening consider it steep.
A seasoned property consultant shared some broad-brush estimates with BT last night: 'Assuming the site is redeveloped into a combination of medical suites, mall and apartments, the breakeven cost for the retail component would be about $7,000-$7,500 psf; for medical suites around $6,000 psf and more than $5,000 psf for residential. These are all above current pricing levels.'
For instance, ION Orchard mall was valued at the end of last year at $3,950 psf.
Although built on a 99-year leasehold site, it boasts a superior location above Orchard MRT Station compared with Tanglin Shopping Centre.
BT understands that based on the $1.25 billion reserve price for Tanglin Shopping Centre, the potential payout to some owners of second-floor shop units works out to $7,000-7,500 psf of existing strata area.
'If I were an owner, I would definitely want to sell at that kind of price!' quipped the head of investment sales at a major property consulting group.
News of collective sales efforts for Tanglin Shopping Centre came to light yesterday when Millennium & Copthorne Hotels, the London-listed hotel arm of City Developments Ltd (CDL), said in a statutory filing that it had signed a CSA for the sale of its strata-titled interest in the complex.
BT understands that ERA has been appointed to handle the collective sale but the firm's senior marketing director Jean Goh declined to disclose the asking price, saying it was too early. 'We have just started the signing,' she added.
M&C's CEO, Richard Hartman, said in yesterday's filing: 'Whilst discussions regarding the potential disposal of our interest in Tanglin Shopping Centre are at a very preliminary stage, we felt it appropriate to disclose we had entered into the CSA.
'The board would highlight the highly conditional nature of the proposed disposal and that the sensitive nature of the discussions precludes disclosure of further commercial information or terms at this time. We will provide a further update on progress as and when appropriate.'
M&C holds its stake in the shopping and office complex through its wholly owned subsidiary, King's Tanglin Shopping Pte Ltd.
The company owns 85 freehold strata units comprising retail/office units and 325 carpark lots that have been held as a long-term investment since 1981. Based on earlier media reports, this works out to a stake of about 35 per cent in the complex.
Some analysts say that assuming ERA garners the minimum 80 per cent consent level from owners, CDL and/or its parent Hong Leong Group would be keen on the asset, given the group's sizeable presence in the location - including St Regis Hotel and the Orchard Hotel and shopping arcade.
However, whether Hong Leong would want to pay the over $4,000 psf per plot ratio for Tanglin Shopping Centre remains to be seen.
'They have an advantage over other bidders since their unit M&C already owns 35 per cent of the complex; so their effective outlay will be smaller,' an agent said.
Tanglin Shopping Centre is on a freehold site of about 68,500 sq ft and has a strata area of about 230,000 sq ft.
It comprises a retail podium (part of which houses medical suites), a 12-storey office tower, and carparking facilities.
Under Master Plan 2008, the site is zoned for commercial use with a 4.2 plot ratio (ratio of maximum potential GFA to land area) and a maximum height of 20 storeys.
The complex was developed in two stages, in the early 1970s and early 1980s.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
En bloc: Tanglin Shopping Centre up for sale again
Reserve price of $1.25b works out to a high $4,167 psf ppr
THE freehold Tanglin Shopping Centre is on the en bloc trail again, and the reserve price listed in the collective sales agreement (CSA), for which signing has started, is understood to be $1.25 billion.
Based on this, the unit land price works out to a whopping sum of about $4,167 per square foot of potential gross floor area.
The assumption is that no development charge is payable and that the new owner will be able to build up to the property's existing gross floor area (GFA) of about 300,000 sq ft, even though this slightly exceeds the maximum 287,700 sq ft under Master Plan 2008.
The unit land price would be a record level and property consultants polled by BT yesterday evening consider it steep.
A seasoned property consultant shared some broad-brush estimates with BT last night: 'Assuming the site is redeveloped into a combination of medical suites, mall and apartments, the breakeven cost for the retail component would be about $7,000-$7,500 psf; for medical suites around $6,000 psf and more than $5,000 psf for residential. These are all above current pricing levels.'
For instance, ION Orchard mall was valued at the end of last year at $3,950 psf.
Although built on a 99-year leasehold site, it boasts a superior location above Orchard MRT Station compared with Tanglin Shopping Centre.
BT understands that based on the $1.25 billion reserve price for Tanglin Shopping Centre, the potential payout to some owners of second-floor shop units works out to $7,000-7,500 psf of existing strata area.
'If I were an owner, I would definitely want to sell at that kind of price!' quipped the head of investment sales at a major property consulting group.
News of collective sales efforts for Tanglin Shopping Centre came to light yesterday when Millennium & Copthorne Hotels, the London-listed hotel arm of City Developments Ltd (CDL), said in a statutory filing that it had signed a CSA for the sale of its strata-titled interest in the complex.
BT understands that ERA has been appointed to handle the collective sale but the firm's senior marketing director Jean Goh declined to disclose the asking price, saying it was too early. 'We have just started the signing,' she added.
M&C's CEO, Richard Hartman, said in yesterday's filing: 'Whilst discussions regarding the potential disposal of our interest in Tanglin Shopping Centre are at a very preliminary stage, we felt it appropriate to disclose we had entered into the CSA.
'The board would highlight the highly conditional nature of the proposed disposal and that the sensitive nature of the discussions precludes disclosure of further commercial information or terms at this time. We will provide a further update on progress as and when appropriate.'
M&C holds its stake in the shopping and office complex through its wholly owned subsidiary, King's Tanglin Shopping Pte Ltd.
The company owns 85 freehold strata units comprising retail/office units and 325 carpark lots that have been held as a long-term investment since 1981. Based on earlier media reports, this works out to a stake of about 35 per cent in the complex.
Some analysts say that assuming ERA garners the minimum 80 per cent consent level from owners, CDL and/or its parent Hong Leong Group would be keen on the asset, given the group's sizeable presence in the location - including St Regis Hotel and the Orchard Hotel and shopping arcade.
However, whether Hong Leong would want to pay the over $4,000 psf per plot ratio for Tanglin Shopping Centre remains to be seen.
'They have an advantage over other bidders since their unit M&C already owns 35 per cent of the complex; so their effective outlay will be smaller,' an agent said.
Tanglin Shopping Centre is on a freehold site of about 68,500 sq ft and has a strata area of about 230,000 sq ft.
It comprises a retail podium (part of which houses medical suites), a 12-storey office tower, and carparking facilities.
Under Master Plan 2008, the site is zoned for commercial use with a 4.2 plot ratio (ratio of maximum potential GFA to land area) and a maximum height of 20 storeys.
The complex was developed in two stages, in the early 1970s and early 1980s.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Boom, yes; bubble, no, says Roach
Business Times - 17 Jun 2010
VIEWS ON CHINA PROPERTY
Boom, yes; bubble, no, says Roach
Price gains backed by strong demand for housing due to migration to cities
(NEW YORK) The property boom in China isn't a bubble because it's supported by 'solid' demand for residential housing, according to Stephen Roach, chairman of Morgan Stanley Asia Ltd.
While portions of the real estate market such as high-end apartments are overheating, demand for residential homes will remain robust as rural Chinese migrate to bigger cities, Dr Roach said in a radio interview from Hong Kong with Tom Keene on Bloomberg Surveillance.
'This is just a sliver of the property boom,' said Dr Roach, noting that each year since 2000, between 15 million and 20 million people migrate to Beijing, Shanghai, and second and third-tier cities in mainland China. That's two and a half New York Cities created annually, he said.
'This underpins a huge demand for residential property. This property has not overheated and the demand for this property is very, very solid.'
The nation's property prices rose 12.4 per cent in May from a year ago, the second-fastest pace on record. China's banking regulator said on Tuesday that it sees growing credit risks in the real estate industry and warned of increasing pressure from non-performing loans.
China has raised downpayment requirements and mortgage rates and restricted loans for multiple-home buyers as it seeks to dampen record property price gains.
The government's 'decisive' actions in April are working to cool the sections of the housing market that were overheating, according to Dr Roach. 'By all accounts, it looks like the measures are working for now.'
China, the world's fastest-growing major economy, expanded 11.9 per cent in the first quarter from a year ago. The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, has dropped 22 per cent this year. Markets in China are closed from June 14 to June 16 for a holiday.
China has kept the yuan linked to the dollar as a crisis-fighting policy, swelling its Treasury holdings and fuelling complaints from US lawmakers that it has an unfair advantage in global commerce. American lawmakers said that they'll go ahead with legislation targeting the yuan as US and Chinese leaders prepare to meet at a Group of 20 summit this month in Canada.
Floating the yuan won't rebalance the trade deficit, Dr Roach said.
'It's just bad economics to pretend we can fix the lives of middle class American workers by getting the Chinese to revalue its currency vis-a-vis the dollar - it's a horrible misconception. If we don't boost our national savings rate, with trillion dollar deficits as far as the eye can see, the Chinese piece of our multilateral trade deficit just goes somewhere else. It goes to a higher-cost producer and that taxes the American people.'
Treasury Secretary Timothy F Geithner said last week that a more flexible yuan would allow China to pursue 'a more effective, independent monetary policy, which is particularly important now, with China's economy facing a risk of inflation in goods and in asset prices'
China shouldn't cave to the pressure and should revalue the yuan when its financial system is more developed, Dr Roach said.
'They've still got a long way to go in opening up their capital account, opening up their financial system and making certain that their financial institutions can be reasonably well protected from the ups and downs of financial markets and currency gyrations.
'It's a process. Over the next 10 years, you will see China take enormous steps toward making their currency fully convertible but it will take that long or possibly even longer to do that.' - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Going up: Property prices rose 12.4% in May from a year ago, the second-fastest pace on record. The banking regulator sees growing credit risks in the real estate industry and warns of increasing pressure from non-performing loans
VIEWS ON CHINA PROPERTY
Boom, yes; bubble, no, says Roach
Price gains backed by strong demand for housing due to migration to cities
(NEW YORK) The property boom in China isn't a bubble because it's supported by 'solid' demand for residential housing, according to Stephen Roach, chairman of Morgan Stanley Asia Ltd.
While portions of the real estate market such as high-end apartments are overheating, demand for residential homes will remain robust as rural Chinese migrate to bigger cities, Dr Roach said in a radio interview from Hong Kong with Tom Keene on Bloomberg Surveillance.
'This is just a sliver of the property boom,' said Dr Roach, noting that each year since 2000, between 15 million and 20 million people migrate to Beijing, Shanghai, and second and third-tier cities in mainland China. That's two and a half New York Cities created annually, he said.
'This underpins a huge demand for residential property. This property has not overheated and the demand for this property is very, very solid.'
The nation's property prices rose 12.4 per cent in May from a year ago, the second-fastest pace on record. China's banking regulator said on Tuesday that it sees growing credit risks in the real estate industry and warned of increasing pressure from non-performing loans.
China has raised downpayment requirements and mortgage rates and restricted loans for multiple-home buyers as it seeks to dampen record property price gains.
The government's 'decisive' actions in April are working to cool the sections of the housing market that were overheating, according to Dr Roach. 'By all accounts, it looks like the measures are working for now.'
China, the world's fastest-growing major economy, expanded 11.9 per cent in the first quarter from a year ago. The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, has dropped 22 per cent this year. Markets in China are closed from June 14 to June 16 for a holiday.
China has kept the yuan linked to the dollar as a crisis-fighting policy, swelling its Treasury holdings and fuelling complaints from US lawmakers that it has an unfair advantage in global commerce. American lawmakers said that they'll go ahead with legislation targeting the yuan as US and Chinese leaders prepare to meet at a Group of 20 summit this month in Canada.
Floating the yuan won't rebalance the trade deficit, Dr Roach said.
'It's just bad economics to pretend we can fix the lives of middle class American workers by getting the Chinese to revalue its currency vis-a-vis the dollar - it's a horrible misconception. If we don't boost our national savings rate, with trillion dollar deficits as far as the eye can see, the Chinese piece of our multilateral trade deficit just goes somewhere else. It goes to a higher-cost producer and that taxes the American people.'
Treasury Secretary Timothy F Geithner said last week that a more flexible yuan would allow China to pursue 'a more effective, independent monetary policy, which is particularly important now, with China's economy facing a risk of inflation in goods and in asset prices'
China shouldn't cave to the pressure and should revalue the yuan when its financial system is more developed, Dr Roach said.
'They've still got a long way to go in opening up their capital account, opening up their financial system and making certain that their financial institutions can be reasonably well protected from the ups and downs of financial markets and currency gyrations.
'It's a process. Over the next 10 years, you will see China take enormous steps toward making their currency fully convertible but it will take that long or possibly even longer to do that.' - Bloomberg
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Going up: Property prices rose 12.4% in May from a year ago, the second-fastest pace on record. The banking regulator sees growing credit risks in the real estate industry and warns of increasing pressure from non-performing loans
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