Sibor or SOR? Now you can have them both
ANZ Bank offers unique floating rate mortgage
05:55 AM Aug 20, 2010
by Julie Quek
SINGAPORE - ANZ Bank has launched a new floating rate home loan, believed to be the first of its kind here.
The bank claims it could reduce the anxiety of homeowners because the loan is pegged to at least two reference rates, unlike the banking norm in Singapore where home loans are usually pegged to only one.
Floating rate home loans are usually pegged to either the Singapore Interbank Offered Rate (Sibor) or the Swap Offer Rate (SOR).
Sibor is the rate at which banks in Singapore lend to one another, whereas SOR refers to the average cost of funds used by banks here for commercial lending.
As most housing loan interest rates track movements in the Sibor or SOR, this means that when the respective rates shift upwards or downwards, the interest rates of the home package will move in the same direction.
Analysts say that for homeowners buying properties over long-term periods, it is advisable to choose a loan with fixed rates or Sibor-pegged home package, as Sibor rates are known to be relatively more stable than SOR rates.
However, for home buyers with more aggressive risk appetite and who are investing over a shorter time horizon, they may consider the SOR-pegged packages at a time when the SOR rates are lower and more attractively-priced than Sibor rates.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Friday, August 20, 2010
TODAY ONLINE : Office take-up rate higher
Office take-up rate higher
05:55 AM Aug 20, 2010
SINGAPORE - The improving economic climate and stronger business confidence have boosted office space take-up rates in Singapore and across the Asia-Pacific, and analysts believe that it will get better.
According to Jones Lang LaSalle, the second quarter of this year saw take-up of office space across the Asia-Pacific's Tier I cities spike by 13 per cent on quarter to 1.3 million square metres.
To tap on the growth of the commercial property sector, the founders of property website PropertyGuru, have created a new portal.
CommercialGuru.com.sg is believed to be Singapore's first dedicated portal for commercial properties.
Reports said Singapore has about 44 million square feet - or the size of about 32 UOB buildings - of vacant commercial space today.
CommercialGuru currently lists over 7,000 available vacant properties in Singapore and the region, a figure that is expected to double over the next year. Its chief executive and co-founder Mr Steve Melhuish, said: "For users, there's an increasing focus on commercial property as a result of not just the macro-economic demand but also in terms of investors shifting from residential."
Mr Melhuish also said his website had a number of Malaysian developers who are promoting their properties on the site's overseas section. May Wong
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Aug 20, 2010
SINGAPORE - The improving economic climate and stronger business confidence have boosted office space take-up rates in Singapore and across the Asia-Pacific, and analysts believe that it will get better.
According to Jones Lang LaSalle, the second quarter of this year saw take-up of office space across the Asia-Pacific's Tier I cities spike by 13 per cent on quarter to 1.3 million square metres.
To tap on the growth of the commercial property sector, the founders of property website PropertyGuru, have created a new portal.
CommercialGuru.com.sg is believed to be Singapore's first dedicated portal for commercial properties.
Reports said Singapore has about 44 million square feet - or the size of about 32 UOB buildings - of vacant commercial space today.
CommercialGuru currently lists over 7,000 available vacant properties in Singapore and the region, a figure that is expected to double over the next year. Its chief executive and co-founder Mr Steve Melhuish, said: "For users, there's an increasing focus on commercial property as a result of not just the macro-economic demand but also in terms of investors shifting from residential."
Mr Melhuish also said his website had a number of Malaysian developers who are promoting their properties on the site's overseas section. May Wong
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY ONLINE : Watch what they do, not what they say
Watch what they do, not what they say
Jurong West EC site and Bedok mixed-use tenders presage bumpier ride ahead
05:55 AM Aug 20, 2010
by Chesterton
The Real Estate Developers' Association of Singapore (Redas) elicited much controversy when it launched its Real Estate Sentiment Index (Resi) for Q2 2010.
Sceptics questioned the credibility of developers as they would have a natural vested bias towards generating positive sentiment, which would help them sell their properties.
There is a lot of noise generated in the market these days and, if you are inexperienced, you would not be able to separate the truth from the noise. It pays to approach every news item with a good dose of cynicism until convinced otherwise.
Even "impartial" property analysts are known to scramble to put their views across to the media at every opportunity to shape opinion. Reporters have it so much easier today. In the past, they had to trouble experts for their views. Today, they have more unsolicited opinion than they can use.
As a result, we often get too much micro-analysis of the data but very little of the big picture that matters. This can be confusing for readers because the views are not always consistent.
The reader needs to be a lot more discerning today. It is important to know where the comments are coming from. A marketing person will give you marketing talk, while a public relations person will give you PR talk.
Personally, I welcome the launch of Resi as it shows that Redas is adapting to today's fast-changing market. In the current globalised environment, property cycles can peak and trough in a matter of a few years. Every channel that relays feedback quickly is welcomed.
Over time, the market will learn to embrace Resi and its findings. The discerning reader will evaluate its reliability according to its source.
People often complain to me about developers and their media comments. But to me, they are the true experts of the property market. After all, they are putting their money where their mouths are.
The trick is not to put too much weight on what they say but to focus on what they do or do not do.
Last Wednesday, developers said a lot when they did not submit even a single bid for the tender of the Executive Condominium (EC) site at Jurong West.
Experts say the site is remote and not next to an MRT station. As far as I can recall, there has never been any EC site next to a station. These sites are usually reserved for private housing as they generate more revenue.
It is not much more remote than other EC sites. Even if it was perceived to be remote, are we not in the midst of a strong property bull run?
One developer was quoted as saying that because ECs catered to a closed market, its location was especially important. I would think location is important for all properties, not just ECs.
Even if the site is not that good, developers can always submit lower bids. After all, they are supposed to be still hungry for sites.
Contrast this result with the high bids and good participation in an industrial land tender, which closed only the day before.
For sure, closing the tender within the Hungry Ghost Month was just tempting fate a little too far. As a group, developers are a lot more superstitious than buyers.
It did not help that the stock market was having a bad run. The benchmark Straits Times Index had been declining each trading day since a week before. The market was stumbling right up to the date and time of close of tender.
The turmoil was probably enough to spook developers, which leads me to question whether the housing market is on edge and not as robust as we thought. Previous tenders have rode out such similar crises.
I was hoping that a tender closing on Tuesday for a mixed-use site with some residential component next to the Bedok bus interchange and MRT station might help clarify some doubts but the tender closing was delayed. I understand it was to give developers more time to assess the site.
Probably, but is there more to it? I leave it to the reader to decide. Whatever the actual reason, the ride for the housing market is going to be a little bit more bumpy from now on.
The writer is Head of Research and Consultancy at Chesterton Suntec International.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Jurong West EC site and Bedok mixed-use tenders presage bumpier ride ahead
05:55 AM Aug 20, 2010
by Chesterton
The Real Estate Developers' Association of Singapore (Redas) elicited much controversy when it launched its Real Estate Sentiment Index (Resi) for Q2 2010.
Sceptics questioned the credibility of developers as they would have a natural vested bias towards generating positive sentiment, which would help them sell their properties.
There is a lot of noise generated in the market these days and, if you are inexperienced, you would not be able to separate the truth from the noise. It pays to approach every news item with a good dose of cynicism until convinced otherwise.
Even "impartial" property analysts are known to scramble to put their views across to the media at every opportunity to shape opinion. Reporters have it so much easier today. In the past, they had to trouble experts for their views. Today, they have more unsolicited opinion than they can use.
As a result, we often get too much micro-analysis of the data but very little of the big picture that matters. This can be confusing for readers because the views are not always consistent.
The reader needs to be a lot more discerning today. It is important to know where the comments are coming from. A marketing person will give you marketing talk, while a public relations person will give you PR talk.
Personally, I welcome the launch of Resi as it shows that Redas is adapting to today's fast-changing market. In the current globalised environment, property cycles can peak and trough in a matter of a few years. Every channel that relays feedback quickly is welcomed.
Over time, the market will learn to embrace Resi and its findings. The discerning reader will evaluate its reliability according to its source.
People often complain to me about developers and their media comments. But to me, they are the true experts of the property market. After all, they are putting their money where their mouths are.
The trick is not to put too much weight on what they say but to focus on what they do or do not do.
Last Wednesday, developers said a lot when they did not submit even a single bid for the tender of the Executive Condominium (EC) site at Jurong West.
Experts say the site is remote and not next to an MRT station. As far as I can recall, there has never been any EC site next to a station. These sites are usually reserved for private housing as they generate more revenue.
It is not much more remote than other EC sites. Even if it was perceived to be remote, are we not in the midst of a strong property bull run?
One developer was quoted as saying that because ECs catered to a closed market, its location was especially important. I would think location is important for all properties, not just ECs.
Even if the site is not that good, developers can always submit lower bids. After all, they are supposed to be still hungry for sites.
Contrast this result with the high bids and good participation in an industrial land tender, which closed only the day before.
For sure, closing the tender within the Hungry Ghost Month was just tempting fate a little too far. As a group, developers are a lot more superstitious than buyers.
It did not help that the stock market was having a bad run. The benchmark Straits Times Index had been declining each trading day since a week before. The market was stumbling right up to the date and time of close of tender.
The turmoil was probably enough to spook developers, which leads me to question whether the housing market is on edge and not as robust as we thought. Previous tenders have rode out such similar crises.
I was hoping that a tender closing on Tuesday for a mixed-use site with some residential component next to the Bedok bus interchange and MRT station might help clarify some doubts but the tender closing was delayed. I understand it was to give developers more time to assess the site.
Probably, but is there more to it? I leave it to the reader to decide. Whatever the actual reason, the ride for the housing market is going to be a little bit more bumpy from now on.
The writer is Head of Research and Consultancy at Chesterton Suntec International.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY ONLINE : Pushing price boundaries in private residential market
Pushing price boundaries in private residential market
05:55 AM Aug 20, 2010
by Tan Kok Keong
In business strategy classes, we often learn that the most successful businesses are the ones that are early leaders in identifying a need or are able to create a market by convincing consumers to pay for something which they never knew they wanted.
In the last property boom, the race was to build the biggest and priciest apartment.
To achieve this, projects were co-branded by contracting renowned architects to produce distinctive products and stuffing the apartment with the best appliances.
CapitaLand and Sun Hung Kai engaged the services of renowned Benoy when developing The Orchard Residences. "Branded" apartments were introduced.
City Developments brought the St Regis brand to Singapore. Specialist luxury home developer SC Global took this to a new level by introducing 6,000-square-feet apartments at The Marq, which comes with your own 15m lap pool. These distinctive projects helped to inject life and interest into the luxury housing market and pushed the price boundaries in their respective segments.
Coming out of the economic recession last year, a turning point of sorts for the private residential market was the successful launch of The Alexis at Alexandra Road, jointly developed by Fission Group and Yi Kai Development.
Before its launch and rumoured sell out, my initial thoughts were that the site attributes were not fantastic. I could not imagine staying in a 400-sq-ft apartment and thought that occupants might get dizzy from facing the giant rotating Mercedes billboard across the road.
But as it turned out, the developer had astutely identified the need for affordable houses at the expense of size. The project was sold out at launch and at a price more than 20 per cent above that of "proper" apartments in the vicinity. The developer created a market for small apartments, which have since become a "must-have" in projects in order to maximise returns.
Then, early this year, Cheung Kong created another market via introducing "luxury housing in the suburbs".
Before its launch, sceptics lamented about the noise and congestion caused by the long container trucks plying the West Coast Highway, the bad air in West Coast and even the sea view.
But the aptly named The Vision, a 99-year leasehold project, managed to shatter the price ceiling, selling at more than 20 to 30 per cent above existing condominium prices. More significantly, its successful launch helped lift prices of existing homes in the area, which had lagged the market.
Adding $100 to $200 per square feet to a price may not be so much of a stretch during periods of economic boom and positive sentiment.
Still, taking a unit of 1,000 sq ft, each $100 psf rise in price implies that the buyer needs to fork out $20,000 more in downpayment and an additional $316 per month in mortgage payments (at 2.5 per cent interest per annum and 30-year loan term).
With overall private property prices at an all-time peak now and a wider variety of choices, it becomes even more important to differentiate the product offering.
Which projects can inject that new element that could compel home buyers to part with their cheques and pay premium "future" prices for their dream homes? Could we see 99-year leasehold projects command $2,000 psf in the Holland area or $1,500 psf in Thomson or $1,300 psf in Jurong Lakeside? Could new launches at Yishun, Woodlands or Tampines burst the $1,000 psf mark?
Existing home owners should keep watch as they could benefit from gains in value, even on paper, if and when developers manage to push pricing boundaries.
For those thinking of buying but are not too inclined to pay "future prices", they could consider taking up positions in localities where they feel developers have the gumption to push pricing boundaries.
The writer is Head of the Research and Consultancy Department at Orange Tee.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Aug 20, 2010
by Tan Kok Keong
In business strategy classes, we often learn that the most successful businesses are the ones that are early leaders in identifying a need or are able to create a market by convincing consumers to pay for something which they never knew they wanted.
In the last property boom, the race was to build the biggest and priciest apartment.
To achieve this, projects were co-branded by contracting renowned architects to produce distinctive products and stuffing the apartment with the best appliances.
CapitaLand and Sun Hung Kai engaged the services of renowned Benoy when developing The Orchard Residences. "Branded" apartments were introduced.
City Developments brought the St Regis brand to Singapore. Specialist luxury home developer SC Global took this to a new level by introducing 6,000-square-feet apartments at The Marq, which comes with your own 15m lap pool. These distinctive projects helped to inject life and interest into the luxury housing market and pushed the price boundaries in their respective segments.
Coming out of the economic recession last year, a turning point of sorts for the private residential market was the successful launch of The Alexis at Alexandra Road, jointly developed by Fission Group and Yi Kai Development.
Before its launch and rumoured sell out, my initial thoughts were that the site attributes were not fantastic. I could not imagine staying in a 400-sq-ft apartment and thought that occupants might get dizzy from facing the giant rotating Mercedes billboard across the road.
But as it turned out, the developer had astutely identified the need for affordable houses at the expense of size. The project was sold out at launch and at a price more than 20 per cent above that of "proper" apartments in the vicinity. The developer created a market for small apartments, which have since become a "must-have" in projects in order to maximise returns.
Then, early this year, Cheung Kong created another market via introducing "luxury housing in the suburbs".
Before its launch, sceptics lamented about the noise and congestion caused by the long container trucks plying the West Coast Highway, the bad air in West Coast and even the sea view.
But the aptly named The Vision, a 99-year leasehold project, managed to shatter the price ceiling, selling at more than 20 to 30 per cent above existing condominium prices. More significantly, its successful launch helped lift prices of existing homes in the area, which had lagged the market.
Adding $100 to $200 per square feet to a price may not be so much of a stretch during periods of economic boom and positive sentiment.
Still, taking a unit of 1,000 sq ft, each $100 psf rise in price implies that the buyer needs to fork out $20,000 more in downpayment and an additional $316 per month in mortgage payments (at 2.5 per cent interest per annum and 30-year loan term).
With overall private property prices at an all-time peak now and a wider variety of choices, it becomes even more important to differentiate the product offering.
Which projects can inject that new element that could compel home buyers to part with their cheques and pay premium "future" prices for their dream homes? Could we see 99-year leasehold projects command $2,000 psf in the Holland area or $1,500 psf in Thomson or $1,300 psf in Jurong Lakeside? Could new launches at Yishun, Woodlands or Tampines burst the $1,000 psf mark?
Existing home owners should keep watch as they could benefit from gains in value, even on paper, if and when developers manage to push pricing boundaries.
For those thinking of buying but are not too inclined to pay "future prices", they could consider taking up positions in localities where they feel developers have the gumption to push pricing boundaries.
The writer is Head of the Research and Consultancy Department at Orange Tee.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY ONLINE : New kid on the block is good news
New kid on the block is good news
Launch prices of new condos often raise resale values of nearby developments
05:55 AM Aug 20, 2010
by Png Poh Soon property@mediacorp.com.sg
When the show flat of a new residential project is ready, the new kid on the block often creates a buzz among the residents living nearby. People are generally curious about what the project looks like, its launch and completion date, and most importantly, the launch price.
Homes in these new projects are often priced higher than the average transacted value of resale units in the neighbourhood because of several factors, such as newer designs and longer tenures.
Many homeowners have asked how these new launches affect the value of their homes. Does the pricing of these new properties affect the prices of nearby resale units and, if so, to what extent?
Knight Frank has carried out a study to examine the pricing effects of new projects on resale properties in their vicinity. Our study is adjusted against the benchmark Urban Redevelopment Authority (URA) price index in the respective regions to take into account the effects of broad general market movements.
The price effect is based on the change in transacted prices per square foot over time of selected new and resale properties over the period from 2004 to last year in the Core Central Region (CCR), the Rest of Central Region (RCR) and the Outside Central Region (OCR), according to the URA's geographical classification.
The average transacted prices of similar-sized units in developments adjacent to the new project were studied and compared over a three-month period before and after the new launch. Sizes were controlled to reduce price distortion where smaller units command higher prices on a psf basis and vice-versa.
Anecdotal comparisons showed that new projects were generally priced 20 to 40 per cent higher than the average transacted prices of nearby developments of similar sizes. This was especially so in the CCR and the RCR region and during property market upturns.
The new developments were found to have a positive effect on the transacted values of resale units after adjusting for broad market movements.
Resale prices moved up in tandem following the launch of higher-priced developments. The average resale unit price appreciation was 12.98 per cent in the CCR, 19.14 per cent in the RCR and 4.23 per cent in the OCR over and above the benchmark price index.
Prima facie, new launches do seem to have a positive effect on resale prices.
For example, when Marina Bay Residences was launched in December 2006 at a premium of 38 per cent to the average price of similar-sized units in the neighbouring development, transacted prices of the already-launched The Sail went up by some 21 per cent after adjusting for broad market movement. Likewise, the transacted prices of The Metropolitan went up by 12.2 per cent after The Ascentia Sky was launched at a premium of 36.3 per cent in July last year.
Arguably, the positive effect arises because resale units take reference from the transacted prices in the vicinity, including the higher priced new projects.
Higher priced launches raise the selling price expectations of the owners of resale units, particularly if they are located near the new project.
From the buyers' perspective, resale units may also appear to offer value for money if they cost lower than their new neighbours. Inadvertently, this results in price appreciation for these resale units.
The real estate adage of "location, location, location" also applies in this instance, where the price effects of new launches have greater impact in the CCR and the RCR rather than the OCR.
Apparently, older properties in better locations benefited more where buyers have deeper pockets vis-a-vis buyers in the suburban regions.
But before you decide to jump on the property bandwagon, we would like to add a caveat. We noticed in our study instances where new launches did not result in a positive effect on the prices of nearby resale units.
Broadly, these instances occur during periods where home buyers' sentiment was weak, such as when the broad market was awash with negative news or in the doldrums. There were also periods when buyers' sentiment turned cautious after the announcement of public policies aimed at cooling the property market.
For example, in September last year, the Government announced the withdrawal of the interest absorption scheme and interest-only loan as an attempt to pre-empt a speculative bubble from forming.
The property market turned quiet for a while as buyers adopted a cautious stance. Resale units near new launches during this period did not exhibit much price movement compared to the market before the announcement.
To sum up, while new projects are still popular with potential home buyers, resale properties may be worth a second look, whether it is for owner-occupation or for investment.
Gems can be uncovered, especially for properties near sites with potential for new developments.
Perhaps it may help to look at yet-to-be launched sites that had been tendered between last year and this year.
If your sums, market conditions and timing are right, a pot of gold may be waiting at the end of the rainbow.
The writer is senior manager at Knight Frank's consultancy and research department.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
Launch prices of new condos often raise resale values of nearby developments
05:55 AM Aug 20, 2010
by Png Poh Soon property@mediacorp.com.sg
When the show flat of a new residential project is ready, the new kid on the block often creates a buzz among the residents living nearby. People are generally curious about what the project looks like, its launch and completion date, and most importantly, the launch price.
Homes in these new projects are often priced higher than the average transacted value of resale units in the neighbourhood because of several factors, such as newer designs and longer tenures.
Many homeowners have asked how these new launches affect the value of their homes. Does the pricing of these new properties affect the prices of nearby resale units and, if so, to what extent?
Knight Frank has carried out a study to examine the pricing effects of new projects on resale properties in their vicinity. Our study is adjusted against the benchmark Urban Redevelopment Authority (URA) price index in the respective regions to take into account the effects of broad general market movements.
The price effect is based on the change in transacted prices per square foot over time of selected new and resale properties over the period from 2004 to last year in the Core Central Region (CCR), the Rest of Central Region (RCR) and the Outside Central Region (OCR), according to the URA's geographical classification.
The average transacted prices of similar-sized units in developments adjacent to the new project were studied and compared over a three-month period before and after the new launch. Sizes were controlled to reduce price distortion where smaller units command higher prices on a psf basis and vice-versa.
Anecdotal comparisons showed that new projects were generally priced 20 to 40 per cent higher than the average transacted prices of nearby developments of similar sizes. This was especially so in the CCR and the RCR region and during property market upturns.
The new developments were found to have a positive effect on the transacted values of resale units after adjusting for broad market movements.
Resale prices moved up in tandem following the launch of higher-priced developments. The average resale unit price appreciation was 12.98 per cent in the CCR, 19.14 per cent in the RCR and 4.23 per cent in the OCR over and above the benchmark price index.
Prima facie, new launches do seem to have a positive effect on resale prices.
For example, when Marina Bay Residences was launched in December 2006 at a premium of 38 per cent to the average price of similar-sized units in the neighbouring development, transacted prices of the already-launched The Sail went up by some 21 per cent after adjusting for broad market movement. Likewise, the transacted prices of The Metropolitan went up by 12.2 per cent after The Ascentia Sky was launched at a premium of 36.3 per cent in July last year.
Arguably, the positive effect arises because resale units take reference from the transacted prices in the vicinity, including the higher priced new projects.
Higher priced launches raise the selling price expectations of the owners of resale units, particularly if they are located near the new project.
From the buyers' perspective, resale units may also appear to offer value for money if they cost lower than their new neighbours. Inadvertently, this results in price appreciation for these resale units.
The real estate adage of "location, location, location" also applies in this instance, where the price effects of new launches have greater impact in the CCR and the RCR rather than the OCR.
Apparently, older properties in better locations benefited more where buyers have deeper pockets vis-a-vis buyers in the suburban regions.
But before you decide to jump on the property bandwagon, we would like to add a caveat. We noticed in our study instances where new launches did not result in a positive effect on the prices of nearby resale units.
Broadly, these instances occur during periods where home buyers' sentiment was weak, such as when the broad market was awash with negative news or in the doldrums. There were also periods when buyers' sentiment turned cautious after the announcement of public policies aimed at cooling the property market.
For example, in September last year, the Government announced the withdrawal of the interest absorption scheme and interest-only loan as an attempt to pre-empt a speculative bubble from forming.
The property market turned quiet for a while as buyers adopted a cautious stance. Resale units near new launches during this period did not exhibit much price movement compared to the market before the announcement.
To sum up, while new projects are still popular with potential home buyers, resale properties may be worth a second look, whether it is for owner-occupation or for investment.
Gems can be uncovered, especially for properties near sites with potential for new developments.
Perhaps it may help to look at yet-to-be launched sites that had been tendered between last year and this year.
If your sums, market conditions and timing are right, a pot of gold may be waiting at the end of the rainbow.
The writer is senior manager at Knight Frank's consultancy and research department.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
TODAY ONLINE : Twin Peaks of luxury
Twin Peaks of luxury
05:55 AM Aug 20, 2010
SINGAPORE - Overseas Union Enterprise's latest residential offering, Twin Peaks, is poised to test the high-end luxury condominium market amid expectations of slower economic growth in the second half of the year.
This project is located in the District 9 Leonie Hill and River Valley area, and is expected to be launched next month.
Nearby, in Orchard Boulevard, two projects - The Orchard Residences and Boulevard Vue - have both recorded prices of up to $4,000 psf based on caveats lodged as at the end of last month.
One unique selling point of the Twin Peaks is that it has fully-furnished units retrofitted with iconic designer furnishings with the likes of Tom Dixon.
Made up of two 36-storey towers, Twin Peaks has 462 units ranging from one-bedroom to three-bedroom apartments.
Buyers will have the flexibility of combining a one-bedroom unit with two or three-bedroom units to make the space bigger.
This may appeal to extended multi-generation family living, as it retains privacy with separate entrances yet provides convenience for cross movement between the two apartments.
Other than a full-service concierge desk, residents at Twin Peaks will also be able to enjoy hotel services provided by the nearby Mandarin Orchard Singapore, such as laundry and housekeeping services.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Aug 20, 2010
SINGAPORE - Overseas Union Enterprise's latest residential offering, Twin Peaks, is poised to test the high-end luxury condominium market amid expectations of slower economic growth in the second half of the year.
This project is located in the District 9 Leonie Hill and River Valley area, and is expected to be launched next month.
Nearby, in Orchard Boulevard, two projects - The Orchard Residences and Boulevard Vue - have both recorded prices of up to $4,000 psf based on caveats lodged as at the end of last month.
One unique selling point of the Twin Peaks is that it has fully-furnished units retrofitted with iconic designer furnishings with the likes of Tom Dixon.
Made up of two 36-storey towers, Twin Peaks has 462 units ranging from one-bedroom to three-bedroom apartments.
Buyers will have the flexibility of combining a one-bedroom unit with two or three-bedroom units to make the space bigger.
This may appeal to extended multi-generation family living, as it retains privacy with separate entrances yet provides convenience for cross movement between the two apartments.
Other than a full-service concierge desk, residents at Twin Peaks will also be able to enjoy hotel services provided by the nearby Mandarin Orchard Singapore, such as laundry and housekeeping services.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
BT : Call for land tenders that go beyond price
Business Times - 20 Aug 2010
Call for land tenders that go beyond price
Extending dual-envelope tenders will encourage innovative design and architecture: focus group
By KALPANA RASHIWALA
(SINGAPORE) Singapore may have a greener tinge and a vastly more interesting skyline, if the suggestions contained in the final reports by two focus groups for Concept Plan 2011 see the light of day.
There is, for example, a call to review the land tender system to create an 'inspiring global and Asian city'.
'By setting land price as the main or only criteria in evaluating tender submissions, we are not putting sufficient value on good architecture, which can contribute significantly to building a distinctive, innovative and interesting city skyline,' said the report of the focus group on Quality of Life.
It proposes extending the government's dual-envelope tender system, currently used for selected major development sites like Capitol Theatre, to more state land tender projects to 'signal the government's support for more innovative design concepts and architecture'. Under this system, concept proposals are first evaluated against a specified set of criteria and only those meeting these conditions will be considered. The site will then be awarded to the party with the highest bid price among those with acceptable concept proposals.
Some market watchers reckon that most state sites will still be awarded on price, except for plots with unique value or other important considerations. Having a design-based competition adds costs to tenderers especially when there will be only one winning bid. 'The better solution for such unique sites is the government should establish what it considers the land price that it is prepared to sell the land for, and all bidders will then focus on design, concept or whatever other criteria are set - rather than have to second guess the land price,' says Knight Frank chairman Tan Tiong Cheng.
The focus group also suggests that to deepen the sense of community, the government should consider the social merits of proposals when evaluating tender submissions for selected state land and properties. 'These evaluation criteria could include whether the proposal takes into account community, elderly or youth-related amenities and needs or whether they are from VWOs and NGOs. Such a move would send a positive signal to the private sector on the priorities of our society and help inculcate a greater consciousness of the issues,' the report said.
Other suggestions made by the focus groups include tax rebates for owners of buildings achieving Green Mark Platinum or GoldPlus standards and setting up a 'neutral zone' around places of worship in heritage areas and historic districts where pubs and lounges are not allowed. There is also a suggestion for more affordable rental apartments for young adults.
The focus group also says towns should be designed to evolve with residents' changing needs and respond to lifecycles of HDB estates. 'Instead of redeveloping estates entirely, we should continue to retain some empty plots...for future development so that estates can evolve and be rejuvenated over time,' the report said. For now, these plots could be kept as open spaces for people to simply 'stretch out', and the community could be given more say on their best use.
DTZ executive director Ong Choon Fah says this approach will ensure such land is not left idle. 'Land can be used not just for commercial purpose, but there's also value when you use it for social purpose; it adds value to the quality of life if people have more places to go to to relax, to bond. Perhaps you'll have less crime and stress and so ultimately there'll be economic benefits - although you may not be able to measure the commercial benefits of such an approach,' she said.
Another proposal from the focus groups is a need to facilitate ageing in familiar surroundings. HDB flats could be built in a modular fashion so walls can be easily knocked down for two or three units to be joined to cater to changes to household sizes at different stages of a family lifecycle. For elders who prefer independent living options, retirement housing communities near existing residential estates are recommended.
The focus group on Sustainability and Identity recommends that the Green Mark Scheme be expanded to cover the entire lifecycle of a building - from design and planning, to construction, operation and maintenance. Developers and owners are required to document the materials and resources used throughout a building's lifespan.
At construction stage, the extraction, processing and transport of raw materials should be assessed carefully so that these are carried out in an environmentally sustainable manner that inflicts minimal damage to the physical and natural environments. 'We should use locally-obtained, recyled and renewable resources where possible to reduce the need for transportation of materials, thereby also reducing Singapore's carbon footprint,' says the report.
A City Developments spokeswoman said: 'Perhaps the government can consider introducing incentives to encourage the industry to reuse and recycle natural resources, which can also help minimise construction and demolition waste going into our landfills.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Call for land tenders that go beyond price
Extending dual-envelope tenders will encourage innovative design and architecture: focus group
By KALPANA RASHIWALA
(SINGAPORE) Singapore may have a greener tinge and a vastly more interesting skyline, if the suggestions contained in the final reports by two focus groups for Concept Plan 2011 see the light of day.
There is, for example, a call to review the land tender system to create an 'inspiring global and Asian city'.
'By setting land price as the main or only criteria in evaluating tender submissions, we are not putting sufficient value on good architecture, which can contribute significantly to building a distinctive, innovative and interesting city skyline,' said the report of the focus group on Quality of Life.
It proposes extending the government's dual-envelope tender system, currently used for selected major development sites like Capitol Theatre, to more state land tender projects to 'signal the government's support for more innovative design concepts and architecture'. Under this system, concept proposals are first evaluated against a specified set of criteria and only those meeting these conditions will be considered. The site will then be awarded to the party with the highest bid price among those with acceptable concept proposals.
Some market watchers reckon that most state sites will still be awarded on price, except for plots with unique value or other important considerations. Having a design-based competition adds costs to tenderers especially when there will be only one winning bid. 'The better solution for such unique sites is the government should establish what it considers the land price that it is prepared to sell the land for, and all bidders will then focus on design, concept or whatever other criteria are set - rather than have to second guess the land price,' says Knight Frank chairman Tan Tiong Cheng.
The focus group also suggests that to deepen the sense of community, the government should consider the social merits of proposals when evaluating tender submissions for selected state land and properties. 'These evaluation criteria could include whether the proposal takes into account community, elderly or youth-related amenities and needs or whether they are from VWOs and NGOs. Such a move would send a positive signal to the private sector on the priorities of our society and help inculcate a greater consciousness of the issues,' the report said.
Other suggestions made by the focus groups include tax rebates for owners of buildings achieving Green Mark Platinum or GoldPlus standards and setting up a 'neutral zone' around places of worship in heritage areas and historic districts where pubs and lounges are not allowed. There is also a suggestion for more affordable rental apartments for young adults.
The focus group also says towns should be designed to evolve with residents' changing needs and respond to lifecycles of HDB estates. 'Instead of redeveloping estates entirely, we should continue to retain some empty plots...for future development so that estates can evolve and be rejuvenated over time,' the report said. For now, these plots could be kept as open spaces for people to simply 'stretch out', and the community could be given more say on their best use.
DTZ executive director Ong Choon Fah says this approach will ensure such land is not left idle. 'Land can be used not just for commercial purpose, but there's also value when you use it for social purpose; it adds value to the quality of life if people have more places to go to to relax, to bond. Perhaps you'll have less crime and stress and so ultimately there'll be economic benefits - although you may not be able to measure the commercial benefits of such an approach,' she said.
Another proposal from the focus groups is a need to facilitate ageing in familiar surroundings. HDB flats could be built in a modular fashion so walls can be easily knocked down for two or three units to be joined to cater to changes to household sizes at different stages of a family lifecycle. For elders who prefer independent living options, retirement housing communities near existing residential estates are recommended.
The focus group on Sustainability and Identity recommends that the Green Mark Scheme be expanded to cover the entire lifecycle of a building - from design and planning, to construction, operation and maintenance. Developers and owners are required to document the materials and resources used throughout a building's lifespan.
At construction stage, the extraction, processing and transport of raw materials should be assessed carefully so that these are carried out in an environmentally sustainable manner that inflicts minimal damage to the physical and natural environments. 'We should use locally-obtained, recyled and renewable resources where possible to reduce the need for transportation of materials, thereby also reducing Singapore's carbon footprint,' says the report.
A City Developments spokeswoman said: 'Perhaps the government can consider introducing incentives to encourage the industry to reuse and recycle natural resources, which can also help minimise construction and demolition waste going into our landfills.'
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : Asia-Pacific office markets 'offer value'
Aug 20, 2010
Asia-Pacific office markets 'offer value'
Index sees commercial real estate in region promising better returns than that in Europe
By Esther Teo
A NEWLY launched global property index covering commercial real estate sees Asia-Pacific markets as more attractive than those in Europe but less so than that in the United States.
The Fair Value Index, as it is called, is compiled by property consultancy DTZ and offers investors an insight into the relative attractiveness of global markets over a five-year investment period.
The Asia-Pacific region scored 67 on the index in the second quarter, outstripping the global score of 62 and beating Europe's 49, but lagging behind the US' score of 89. A score above 50 indicates a hot market as expected returns exceed risk-adjusted required returns. Anything below 50 means a market is cold.
Mr David Green-Morgan, DTZ's head of Asia-Pacific research, said that Hong Kong, Singapore and Tokyo offer some of the most attractive opportunities across office, retail and industrial properties.
'Hong Kong and Singapore, two traditionally volatile markets, are set to record strong rental growth, particularly in the office sector, over the next five years as they rebound from sharp falls in rents in 2009,' he said. 'This will result in strong capital growth, boosting returns for investors and placing both markets in the hot category across the board.'
While the office sector in the Asia-Pacific region is leading the way with a score of 70, all three sectors - office, retail and industrial - offer opportunities to investors with scores above 50. The Asia-Pacific's retail sector is performing in line with the regional average at 67, while industrial stands at 61, DTZ said.
It added that the second quarter is in complete contrast to the same period a year ago when the Asia-Pacific all-property score was half of what it is now.
The economic recovery since then has improved liquidity and demand.
'Despite a pause in investment activity in China and Japan recently, the attractive pricing in many markets is seeing an increased number of buyers who are encouraged by occupational resilience and the resumption of rental and capital value growth,' DTZ said.
Mainland China continues to offer good value, led by office markets in Shanghai, Beijing and Chengdu. But office space in Guangzhou and Shenzhen and retail space in Shanghai are overpriced, according to the index.
Shanghai saw a number of retail construction projects in the lead-up to this year's World Expo. While they will sustain the sector this year, the outlook for investor returns over the medium term is expected to be subdued, DTZ said.
Meanwhile, a CBRE report yesterday said that more than half of the office rental markets in the Asia-Pacific region have either stabilised or started growing during the second quarter. Dr Raymond Torto, CBRE's global chief economist, said the region was the driving force behind the sector's global recovery, with over half of the markets either at the bottom of the rental cycle or in growth mode.
'Hong Kong, Shanghai and Beijing led the region's markets due to a push for office space from the financial sector in central business locations... Singapore, Bangalore and Mumbai followed closely as employment levels improved and prime rents and incentives remained stable.'
esthert@sph.com.sg
Asia-Pacific office markets 'offer value'
Index sees commercial real estate in region promising better returns than that in Europe
By Esther Teo
A NEWLY launched global property index covering commercial real estate sees Asia-Pacific markets as more attractive than those in Europe but less so than that in the United States.
The Fair Value Index, as it is called, is compiled by property consultancy DTZ and offers investors an insight into the relative attractiveness of global markets over a five-year investment period.
The Asia-Pacific region scored 67 on the index in the second quarter, outstripping the global score of 62 and beating Europe's 49, but lagging behind the US' score of 89. A score above 50 indicates a hot market as expected returns exceed risk-adjusted required returns. Anything below 50 means a market is cold.
Mr David Green-Morgan, DTZ's head of Asia-Pacific research, said that Hong Kong, Singapore and Tokyo offer some of the most attractive opportunities across office, retail and industrial properties.
'Hong Kong and Singapore, two traditionally volatile markets, are set to record strong rental growth, particularly in the office sector, over the next five years as they rebound from sharp falls in rents in 2009,' he said. 'This will result in strong capital growth, boosting returns for investors and placing both markets in the hot category across the board.'
While the office sector in the Asia-Pacific region is leading the way with a score of 70, all three sectors - office, retail and industrial - offer opportunities to investors with scores above 50. The Asia-Pacific's retail sector is performing in line with the regional average at 67, while industrial stands at 61, DTZ said.
It added that the second quarter is in complete contrast to the same period a year ago when the Asia-Pacific all-property score was half of what it is now.
The economic recovery since then has improved liquidity and demand.
'Despite a pause in investment activity in China and Japan recently, the attractive pricing in many markets is seeing an increased number of buyers who are encouraged by occupational resilience and the resumption of rental and capital value growth,' DTZ said.
Mainland China continues to offer good value, led by office markets in Shanghai, Beijing and Chengdu. But office space in Guangzhou and Shenzhen and retail space in Shanghai are overpriced, according to the index.
Shanghai saw a number of retail construction projects in the lead-up to this year's World Expo. While they will sustain the sector this year, the outlook for investor returns over the medium term is expected to be subdued, DTZ said.
Meanwhile, a CBRE report yesterday said that more than half of the office rental markets in the Asia-Pacific region have either stabilised or started growing during the second quarter. Dr Raymond Torto, CBRE's global chief economist, said the region was the driving force behind the sector's global recovery, with over half of the markets either at the bottom of the rental cycle or in growth mode.
'Hong Kong, Shanghai and Beijing led the region's markets due to a push for office space from the financial sector in central business locations... Singapore, Bangalore and Mumbai followed closely as employment levels improved and prime rents and incentives remained stable.'
esthert@sph.com.sg
BT : Is there a property bubble in China?
Business Times - 20 Aug 2010
Is there a property bubble in China?
There may be a visible slowdown in housing starts and construction towards the end of this year, KELVIN TAY believes
THRUST centre stage as a result of the decline in the G-7 economies in a post-2008 credit crisis world, the Chinese economy has gained a new level of significance and scrutiny that often generates unwanted, alarmist racket.
Is there a property bubble in China? The answer bears more significance now than ever before. China's construction and real estate sectors are likely to contribute to an estimated 11 per cent of its GDP in 2010. The construction industry employs 14.3 per cent of all workers in urban areas and consumes 40 per cent of all steel and lumber produced in China.
The private residential sector currently accounts for almost 40 per cent of the buildings completed by the construction industry. Never before has the health of the Chinese construction and real estate sectors been more closely followed.
Analysing a large, diverse economy like China's is complex, to say the least. Her sheer size and diversity in terms of economic development makes nationwide average figures rather meaningless. For example, from April 2009 to April 2010, residential property prices in China rose by 15 per cent and when juxtaposed with the price declines in 2008, would hardly set alarm bells ringing.
However, a closer examination of tier 1 cities revealed that in the 12-month period to April 2010, property prices rose by 64 per cent in Beijing, 39 per cent in Shanghai and actually doubled in Shenzhen.
The tier 1 cities accounted for almost 22 per cent of urban residential property sales, rather disproportionate to their share of 8 per cent of total floor space. Prices in Beijing reached a stratospheric 28,000 yuan per square metre in the same period.
Although long documented trends of urbanisation, rural to urban migration and a shortfall in the supply of public housing have resulted in property prices in China rising steadily over the last five years, what actually fuelled the extraordinary climb in prices over the last 12 months has largely been attributed to the increasing participation of state-owned enterprises (SOEs) in the property market.
Higher price
A study conducted by researchers from the National University of Singapore and Tsinghai University found that the transaction price of land tends to be 27.4 per cent higher when it is successfully bid by an SOE.
In certain cities like Beijing, the local and central SOEs' share of developers' land purchases have reached an estimated 71 per cent in early 2010, up from about 37 per cent in 2003.
Leverage, another indication of whether an asset bubble is building, has also seen a steady increase. If we assume that only urban households have access to mortgage lending, then mortgage debt as a proportion of urban household income is near 50 per cent, which makes it a tad uncomfortable.
We also need to take into consideration that in the case of China, where a large share of household wealth exists in the form of bank deposits, it is vulnerable to various forms of asset bubbles as and when households decide to shift a certain proportion to other asset classes, including property.
Although property purchases require a larger amount of capital (initial down payment), it is clearly not a major obstacle, especially in a period when property prices are escalating and return expectations get artificially inflated.
In that sense, we view the property tightening measures announced by the Chinese government in May with measured relief.
The policies are largely aimed at stabilising the market by curbing speculative demand and at the same time, increasing the supply of housing, in particular public housing.
At this stage of its economic cycle, a slowdown in China's property market is very much welcome news. If the Chinese real estate sector continues to grow at breakneck speed with little breathing space, it would certainly magnify the risk of overheating followed by a systemic collapse. This would have serious ramifications for Asia, including Singapore.
A collapse in China's property market resulting in financial contagion might affect the Singapore property market both directly and indirectly. As of July this year, Chinese nationals are currently the second largest source of foreign buyers of property in Singapore. Any crash in China's property market and subsequent economic slowdown would probably change that equation.
Furthermore, over the past two decades, systemic crises have always negatively impacted Singapore's property market. The Asian financial crisis in July 1997, Nasdaq crash in March 2000 and the credit crisis in 2008 all resulted in double-digit declines in the local property market.
However, it is the indirect impact that is actually more worrying. Since 2007, almost all home loans in Singapore are based on floating rates. Mortgage rates are usually pegged to the three-month Singapore Interbank Offered Rate (Sibor) or three-month Singapore Offered Rate (SOR), plus a premium that ranges between 1.25 per cent and 1.75 per cent.
Spike
Therefore, if Sibor or SOR spikes up suddenly and remains at stubbornly elevated levels for a period of time, property owners tied to such loans might suddenly find their monthly mortgages taking up a disproportionate amount of their monthly income.
Have there been instances when Sibor suddenly behaved erratically? The Asian financial crisis was one such example. Sibor spiked up to a high of 7.75 per cent before finally sliding to 1.9 per cent in December 1998. The average rate of Sibor during that 18-month period hovered at 4.9 per cent. As Asia was fortunately not at the epicentre of the credit crisis in 2008, Sibor did not behave erratically but averaged around 1.3 per cent, more than twice the current rate of 0.56 per cent.
So what is the likelihood of the above scenario panning out? Fortunately, we believe the chances are slim. The sharp appreciation in property prices in China have been largely restricted to the tier 1 cities, leaving the fundamentals of the broader market intact.
Although we do not expect China's property sector or economic growth to collapse, we believe that there may be a rather visible slowdown in housing starts and construction towards the end of this year, with any possibility of a reversal of the property tightening measures and/or loosening in monetary policy likely to be in early 2011. We believe this could potentially be the catalyst for the Shanghai A-Share Composite index, which is currently the worst performing stock market in Asia ex-Japan, to outperform.
The writer is chief investment strategist Singapore, at UBS Wealth Management.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Complex market: A pedestrian looking up at a billboard advertising luxury apartments under construction in central Beijing. The sharp appreciation in property prices in China have been largely restricted to the tier 1 cities, leaving the fundamentals of the broader market intact
Is there a property bubble in China?
There may be a visible slowdown in housing starts and construction towards the end of this year, KELVIN TAY believes
THRUST centre stage as a result of the decline in the G-7 economies in a post-2008 credit crisis world, the Chinese economy has gained a new level of significance and scrutiny that often generates unwanted, alarmist racket.
Is there a property bubble in China? The answer bears more significance now than ever before. China's construction and real estate sectors are likely to contribute to an estimated 11 per cent of its GDP in 2010. The construction industry employs 14.3 per cent of all workers in urban areas and consumes 40 per cent of all steel and lumber produced in China.
The private residential sector currently accounts for almost 40 per cent of the buildings completed by the construction industry. Never before has the health of the Chinese construction and real estate sectors been more closely followed.
Analysing a large, diverse economy like China's is complex, to say the least. Her sheer size and diversity in terms of economic development makes nationwide average figures rather meaningless. For example, from April 2009 to April 2010, residential property prices in China rose by 15 per cent and when juxtaposed with the price declines in 2008, would hardly set alarm bells ringing.
However, a closer examination of tier 1 cities revealed that in the 12-month period to April 2010, property prices rose by 64 per cent in Beijing, 39 per cent in Shanghai and actually doubled in Shenzhen.
The tier 1 cities accounted for almost 22 per cent of urban residential property sales, rather disproportionate to their share of 8 per cent of total floor space. Prices in Beijing reached a stratospheric 28,000 yuan per square metre in the same period.
Although long documented trends of urbanisation, rural to urban migration and a shortfall in the supply of public housing have resulted in property prices in China rising steadily over the last five years, what actually fuelled the extraordinary climb in prices over the last 12 months has largely been attributed to the increasing participation of state-owned enterprises (SOEs) in the property market.
Higher price
A study conducted by researchers from the National University of Singapore and Tsinghai University found that the transaction price of land tends to be 27.4 per cent higher when it is successfully bid by an SOE.
In certain cities like Beijing, the local and central SOEs' share of developers' land purchases have reached an estimated 71 per cent in early 2010, up from about 37 per cent in 2003.
Leverage, another indication of whether an asset bubble is building, has also seen a steady increase. If we assume that only urban households have access to mortgage lending, then mortgage debt as a proportion of urban household income is near 50 per cent, which makes it a tad uncomfortable.
We also need to take into consideration that in the case of China, where a large share of household wealth exists in the form of bank deposits, it is vulnerable to various forms of asset bubbles as and when households decide to shift a certain proportion to other asset classes, including property.
Although property purchases require a larger amount of capital (initial down payment), it is clearly not a major obstacle, especially in a period when property prices are escalating and return expectations get artificially inflated.
In that sense, we view the property tightening measures announced by the Chinese government in May with measured relief.
The policies are largely aimed at stabilising the market by curbing speculative demand and at the same time, increasing the supply of housing, in particular public housing.
At this stage of its economic cycle, a slowdown in China's property market is very much welcome news. If the Chinese real estate sector continues to grow at breakneck speed with little breathing space, it would certainly magnify the risk of overheating followed by a systemic collapse. This would have serious ramifications for Asia, including Singapore.
A collapse in China's property market resulting in financial contagion might affect the Singapore property market both directly and indirectly. As of July this year, Chinese nationals are currently the second largest source of foreign buyers of property in Singapore. Any crash in China's property market and subsequent economic slowdown would probably change that equation.
Furthermore, over the past two decades, systemic crises have always negatively impacted Singapore's property market. The Asian financial crisis in July 1997, Nasdaq crash in March 2000 and the credit crisis in 2008 all resulted in double-digit declines in the local property market.
However, it is the indirect impact that is actually more worrying. Since 2007, almost all home loans in Singapore are based on floating rates. Mortgage rates are usually pegged to the three-month Singapore Interbank Offered Rate (Sibor) or three-month Singapore Offered Rate (SOR), plus a premium that ranges between 1.25 per cent and 1.75 per cent.
Spike
Therefore, if Sibor or SOR spikes up suddenly and remains at stubbornly elevated levels for a period of time, property owners tied to such loans might suddenly find their monthly mortgages taking up a disproportionate amount of their monthly income.
Have there been instances when Sibor suddenly behaved erratically? The Asian financial crisis was one such example. Sibor spiked up to a high of 7.75 per cent before finally sliding to 1.9 per cent in December 1998. The average rate of Sibor during that 18-month period hovered at 4.9 per cent. As Asia was fortunately not at the epicentre of the credit crisis in 2008, Sibor did not behave erratically but averaged around 1.3 per cent, more than twice the current rate of 0.56 per cent.
So what is the likelihood of the above scenario panning out? Fortunately, we believe the chances are slim. The sharp appreciation in property prices in China have been largely restricted to the tier 1 cities, leaving the fundamentals of the broader market intact.
Although we do not expect China's property sector or economic growth to collapse, we believe that there may be a rather visible slowdown in housing starts and construction towards the end of this year, with any possibility of a reversal of the property tightening measures and/or loosening in monetary policy likely to be in early 2011. We believe this could potentially be the catalyst for the Shanghai A-Share Composite index, which is currently the worst performing stock market in Asia ex-Japan, to outperform.
The writer is chief investment strategist Singapore, at UBS Wealth Management.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Complex market: A pedestrian looking up at a billboard advertising luxury apartments under construction in central Beijing. The sharp appreciation in property prices in China have been largely restricted to the tier 1 cities, leaving the fundamentals of the broader market intact
BT : S'pore commercial property sizzling: DTZ
Business Times - 20 Aug 2010
S'pore commercial property sizzling: DTZ
By EMILYN YAP
SINGAPORE'S prime industrial, retail and office properties offer some of the most attractive returns in the world, according to a new study by DTZ.
The property consultancy launched a set of fair value indices yesterday, derived by forecasting the returns commercial property investors can get above government bond yields, over five years across 180 markets.
Markets where expected returns exceed required returns would be labelled 'hot'. The larger the number of hot markets in a region, the higher its index score would be.
Results showed that Singapore was a hot market in the second quarter. The island's industrial property sector came in as the most attractive to invest in, ahead of Antwerp and Hong Kong in second and third places respectively. DTZ estimates that industrial assets here were underpriced by some 11 per cent.
Industrial rents are 'expected to return to growth this year in Hong Kong and Singapore after an extended period of weakness' that started in H2 2008, DTZ said in a release.
Singapore's retail property sector took third spot in terms of investment attractiveness, behind first-placed Los Angeles and second-placed Chicago. DTZ found that malls here were underpriced by 9 per cent.
Offices in Singapore were also underpriced by around 9 per cent, but the presence of even better returns in other cities meant that the country fell out of the top three spots. The office market in San Francisco offered the best value, followed by that in Hong Kong and Tokyo.
DTZ believes that office rents in Singapore will register strong growth in the next five years - they could rise 5-10 per cent in H2 this year - and this will lead to capital growth. Its global head of forecasting Tony McGough added that Singapore's office market is likely to stay hot in the next few quarters.
The reading for the global fair value index was 62 in Q2, surging from 24 a year ago, reflecting the increased number of investment opportunities brought about by the economic recovery.
The Asia-Pacific index had a score of 67, meaning that the region's commercial property market offered relatively better returns.
But pickings were richest in the US - its index clocked a reading of 89. According to DTZ's Asia-Pacific business development and client services head David Watt, many investment funds are focusing their attention on buying opportunities in the US now. The thinking is, 'we know Asia is a great story, but we'll get back to it', he said.
The index for Europe had a score of 49, the lowest among the three regions.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
S'pore commercial property sizzling: DTZ
By EMILYN YAP
SINGAPORE'S prime industrial, retail and office properties offer some of the most attractive returns in the world, according to a new study by DTZ.
The property consultancy launched a set of fair value indices yesterday, derived by forecasting the returns commercial property investors can get above government bond yields, over five years across 180 markets.
Markets where expected returns exceed required returns would be labelled 'hot'. The larger the number of hot markets in a region, the higher its index score would be.
Results showed that Singapore was a hot market in the second quarter. The island's industrial property sector came in as the most attractive to invest in, ahead of Antwerp and Hong Kong in second and third places respectively. DTZ estimates that industrial assets here were underpriced by some 11 per cent.
Industrial rents are 'expected to return to growth this year in Hong Kong and Singapore after an extended period of weakness' that started in H2 2008, DTZ said in a release.
Singapore's retail property sector took third spot in terms of investment attractiveness, behind first-placed Los Angeles and second-placed Chicago. DTZ found that malls here were underpriced by 9 per cent.
Offices in Singapore were also underpriced by around 9 per cent, but the presence of even better returns in other cities meant that the country fell out of the top three spots. The office market in San Francisco offered the best value, followed by that in Hong Kong and Tokyo.
DTZ believes that office rents in Singapore will register strong growth in the next five years - they could rise 5-10 per cent in H2 this year - and this will lead to capital growth. Its global head of forecasting Tony McGough added that Singapore's office market is likely to stay hot in the next few quarters.
The reading for the global fair value index was 62 in Q2, surging from 24 a year ago, reflecting the increased number of investment opportunities brought about by the economic recovery.
The Asia-Pacific index had a score of 67, meaning that the region's commercial property market offered relatively better returns.
But pickings were richest in the US - its index clocked a reading of 89. According to DTZ's Asia-Pacific business development and client services head David Watt, many investment funds are focusing their attention on buying opportunities in the US now. The thinking is, 'we know Asia is a great story, but we'll get back to it', he said.
The index for Europe had a score of 49, the lowest among the three regions.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
MND : INTRODUCES ESTATE AGENTS BILL
Press Releases
MND INTRODUCES ESTATE AGENTS BILL
IN PARLIAMENT ON 16 AUGUST 2010
1 The Ministry of National Development (MND) introduced the Estate Agents Bill for a First Reading at the Parliamentary Session on 16 August 2010. The proposed Estate Agents Bill seeks to establish the Council for Estate Agencies (CEA) as a new statutory board under MND to regulate the real estate agency industry.
Key Features of the Estate Agents Bill
Coverage of Framework and Establishment of CEA
2 The proposed Estate Agents Bill will apply to all estate agency work for Singapore and foreign properties marketed, sold or leased in Singapore. CEA will be established to administer the new regulatory framework.
Licensing of Estate Agencies and Registration of Salespersons
3 Estate agencies will continue to be licensed, but with enhanced conditions. Each agency will have to appoint a key executive officer (KEO) to be responsible for the proper administration and overall management of the business and supervision of all its salespersons. The KEO, all partners and directors in each agency will have to satisfy enhanced licensing conditions, such as fulfilling fit and proper criteria and prohibition to simultaneously hold a moneylender’s license, or be an employee, director or partner of a licensed moneylender.
4 Estate agencies will be required to exercise effective supervision of their salespersons and take responsibility for their actions. To enable agencies to do so, the Bill will require a salesperson to contract with only one agency and to operate under a written agreement with the agency. Salespersons will need to be registered with CEA through and with the support of their agencies, before they are allowed to do estate agency work.
5 Estate agencies will have to ensure that all their registered salespersons are professionally competent and meet the fit and proper criteria. Salespersons also need to have the necessary qualifications, pass the CEA’s salesperson examination and undertake continuing professional development relating to estate agency work. Information on all registered salespersons will be available on a public register, including the agency they are working for and any disciplinary action taken against them.
Duties and Liability of Estate Agencies and Salespersons
6 The Bill will empower CEA to prescribe codes of practice, ethics and professional conduct to regulate the practices of estate agencies and salespersons. Failure to comply with the codes may render the estate agency and/or salesperson liable to disciplinary action.
7 The CEA will also prescribe standard estate agency agreements between estate agencies and their clients, to ensure that the agreements do not contain unfair clauses. An estate agency that performs estate agency work without the required agreement will not be able to recover any fees or seek any remedy in legal proceedings.
Investigative and Disciplinary Powers
8 The Bill will provide CEA with powers of investigation to enable CEA to investigate breaches and enforce regulatory requirements. Under these provisions, CEA investigators will be able to summon agencies’ KEOs and salespersons, and seize relevant materials and documents.
9 The Bill will allow CEA to set up a Disciplinary Committee to hear and consider disciplinary cases. The Disciplinary Committee can mete out penalties including revocation, suspension, fines, admonishment and other conditions on estate agencies and salespersons if it finds the agencies and/or salespersons responsible.
10 The Bill will allow any person who is aggrieved by the decisions of CEA to lodge an appeal to an independent Appeals Boards. The decision of the Appeals Board shall be final.
Dispute Resolution
11 Estate agencies and salespersons will be required to participate in CEA’s prescribed dispute resolution process covering mediation and arbitration, once this has been initiated by the consumer.
Transition Arrangement
12 The Bill includes transition provisions for existing agencies to be deemed as licensed by CEA for the remainder of the duration of the licence previously issued by the Inland Revenue Authority of Singapore (IRAS) until 31 December 2010. Other transitional arrangements will be provided for in the regulations to be published in the Gazette after the Bill is passed.
Second Reading
13 The Bill will be tabled for a Second Reading at the following available Parliament sitting.
Issued by: Ministry of National Development
Date: 16 August 2010
MND INTRODUCES ESTATE AGENTS BILL
IN PARLIAMENT ON 16 AUGUST 2010
1 The Ministry of National Development (MND) introduced the Estate Agents Bill for a First Reading at the Parliamentary Session on 16 August 2010. The proposed Estate Agents Bill seeks to establish the Council for Estate Agencies (CEA) as a new statutory board under MND to regulate the real estate agency industry.
Key Features of the Estate Agents Bill
Coverage of Framework and Establishment of CEA
2 The proposed Estate Agents Bill will apply to all estate agency work for Singapore and foreign properties marketed, sold or leased in Singapore. CEA will be established to administer the new regulatory framework.
Licensing of Estate Agencies and Registration of Salespersons
3 Estate agencies will continue to be licensed, but with enhanced conditions. Each agency will have to appoint a key executive officer (KEO) to be responsible for the proper administration and overall management of the business and supervision of all its salespersons. The KEO, all partners and directors in each agency will have to satisfy enhanced licensing conditions, such as fulfilling fit and proper criteria and prohibition to simultaneously hold a moneylender’s license, or be an employee, director or partner of a licensed moneylender.
4 Estate agencies will be required to exercise effective supervision of their salespersons and take responsibility for their actions. To enable agencies to do so, the Bill will require a salesperson to contract with only one agency and to operate under a written agreement with the agency. Salespersons will need to be registered with CEA through and with the support of their agencies, before they are allowed to do estate agency work.
5 Estate agencies will have to ensure that all their registered salespersons are professionally competent and meet the fit and proper criteria. Salespersons also need to have the necessary qualifications, pass the CEA’s salesperson examination and undertake continuing professional development relating to estate agency work. Information on all registered salespersons will be available on a public register, including the agency they are working for and any disciplinary action taken against them.
Duties and Liability of Estate Agencies and Salespersons
6 The Bill will empower CEA to prescribe codes of practice, ethics and professional conduct to regulate the practices of estate agencies and salespersons. Failure to comply with the codes may render the estate agency and/or salesperson liable to disciplinary action.
7 The CEA will also prescribe standard estate agency agreements between estate agencies and their clients, to ensure that the agreements do not contain unfair clauses. An estate agency that performs estate agency work without the required agreement will not be able to recover any fees or seek any remedy in legal proceedings.
Investigative and Disciplinary Powers
8 The Bill will provide CEA with powers of investigation to enable CEA to investigate breaches and enforce regulatory requirements. Under these provisions, CEA investigators will be able to summon agencies’ KEOs and salespersons, and seize relevant materials and documents.
9 The Bill will allow CEA to set up a Disciplinary Committee to hear and consider disciplinary cases. The Disciplinary Committee can mete out penalties including revocation, suspension, fines, admonishment and other conditions on estate agencies and salespersons if it finds the agencies and/or salespersons responsible.
10 The Bill will allow any person who is aggrieved by the decisions of CEA to lodge an appeal to an independent Appeals Boards. The decision of the Appeals Board shall be final.
Dispute Resolution
11 Estate agencies and salespersons will be required to participate in CEA’s prescribed dispute resolution process covering mediation and arbitration, once this has been initiated by the consumer.
Transition Arrangement
12 The Bill includes transition provisions for existing agencies to be deemed as licensed by CEA for the remainder of the duration of the licence previously issued by the Inland Revenue Authority of Singapore (IRAS) until 31 December 2010. Other transitional arrangements will be provided for in the regulations to be published in the Gazette after the Bill is passed.
Second Reading
13 The Bill will be tabled for a Second Reading at the following available Parliament sitting.
Issued by: Ministry of National Development
Date: 16 August 2010
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