Aug 26, 2010
Sports Hub deal sealed
By Leonard Lim
PEN was put to paper yesterday on the contract that will pave the way for the construction of the Sports Hub.
Demolition of the National Stadium will begin by October, with the new 35ha facility catering to both sports and non-sports enthusiasts to open its doors by April 2014, the Singapore Sports Council said in a press statement early this morning.
The centrepiece remains a new 55,000-seater stadium with a retractable roof, with other highlights including a 6,000-capacity indoor Aquatic Centre, a water sports centre, and 41,000 sq m of commercial space.
But several features not in the initial proposal by a private consortium tasked to build the world-class project have been added. They include a beach volleyball court and rock climbing wall.
The construction cost is $1.33 billion. This does not include the costs of operating the facility.
Under the agreed public-private-partnership (PPP) scheme, the winning consortium Singapore Sports Hub Consortium (SSHC) will bear the cost of constructing and operating the Sports Hub. The Government will, however, make an annual payment to SSHC over 25 years.
The new cost announced is higher than the $1.2 billion estimated in 2008.
'I am glad that we are ready to start construction of the Singapore Sports Hub,' the statement quoted Minister for Community Development, Youth and Sports Vivian Balakrishnan as saying.
'It will be a fully integrated sports, leisure, entertainment and lifestyle hub for world class events and community activities.
'As part of the Greater Marina Bay masterplan, the Singapore Sports Hub will also contribute to the larger government objective of repositioning Singapore as a great place to work, live and play,' he added.
Since its announcement, the Sports Hub has been dogged by repeated delays and been a magnet for criticism. Its completion date was pushed back from this year to next year, 2012 and then 2013.
After the SSHC beat two other groups to be named the project's preferred bidder in January 2008, it struggled to raise financing for construction to begin due to the recession.
Mr Ludwig Reichhold, the managing director of Dragages Singapore which heads the SSHC, said: 'We are ready to go full swing.'
Other members of the consortium include United Premas, a facilities management company, and events management firm World Sport Group.
It is understood that while $1.87 billion was the initial cost to the Government over the 25-year period for the contract with the SSHC, this figure will now change as there have been tweaks to the financing terms.
Under the PPP scheme, SSHC is in charge of designing, financing, building and operating the hub.
Events such as the Asean Football League and Twenty20 cricket matches are among the high-profile events being planned to ensure it remains a vibrant year-round destination.
Singapore Rugby Union president Low Teo Ping, who had been among those eagerly awaiting the hub's completion, said: 'Now we can try to bid to get the highly successful Rugby 7s series back.
'With the sport making its debut at the 2016 Olympics, we could see qualifying matches for the Rio Games played here too from 2014 onwards.'
The Sports Hub's completion will also allow the Republic to host a major Games like the South-east Asia Games.
It had given up hosting rights for the 2013 edition as the Hub could not be completed in time. Cambodia are the front runners for the 2015 SEA Games, though no country has been picked yet.
limze@sph.com.sg
Thursday, August 26, 2010
BT : China housing prices will start dropping in Q4: bankers
Business Times - 26 Aug 2010
China housing prices will start dropping in Q4: bankers
(BEIJING) Chinese property developers are facing strained cash flows and will be forced to cut prices beginning in the fourth quarter, a state newspaper reported on Tuesday, citing several bankers.
Beijing has strictly controlled financing to real estate developers by limiting their lending from banks and fund-raising from capital markets - part of its efforts to cool speculative purchases and prevent prices from rising too fast.
'As far as we know, property developers are feeling very strained cash flows now and many of them have made preparations to tighten their belts,' the official Shanghai Securities News quoted an unnamed executive at the Shanghai branch of China Everbright Bank as saying.
Property developers purchased a large amount of land lots in 2009 when the market was booming. Under current regulations, they are not allowed to hold land for a long period of time without developing it and have to speed up construction. That will likely increase the supply of housing in the coming quarters, the newspaper said.
'Housing prices will probably show an evident drop as early as from the fourth quarter,' the newspaper quoted another unnamed banker at Shenzhen Development Bank as saying.
Earlier this month, the National Bureau of Statistics reported that housing prices in 70 major cities were unchanged in July from June.
But the National Development and Reform Commission said property prices in 36 key cities actually rose 1.6 per cent in July from June. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
China housing prices will start dropping in Q4: bankers
(BEIJING) Chinese property developers are facing strained cash flows and will be forced to cut prices beginning in the fourth quarter, a state newspaper reported on Tuesday, citing several bankers.
Beijing has strictly controlled financing to real estate developers by limiting their lending from banks and fund-raising from capital markets - part of its efforts to cool speculative purchases and prevent prices from rising too fast.
'As far as we know, property developers are feeling very strained cash flows now and many of them have made preparations to tighten their belts,' the official Shanghai Securities News quoted an unnamed executive at the Shanghai branch of China Everbright Bank as saying.
Property developers purchased a large amount of land lots in 2009 when the market was booming. Under current regulations, they are not allowed to hold land for a long period of time without developing it and have to speed up construction. That will likely increase the supply of housing in the coming quarters, the newspaper said.
'Housing prices will probably show an evident drop as early as from the fourth quarter,' the newspaper quoted another unnamed banker at Shenzhen Development Bank as saying.
Earlier this month, the National Bureau of Statistics reported that housing prices in 70 major cities were unchanged in July from June.
But the National Development and Reform Commission said property prices in 36 key cities actually rose 1.6 per cent in July from June. -- Reuters
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : Joint venture bids $165m for 99-year site in Yishun
Aug 25, 2010
Joint venture bids $165m for 99-year site in Yishun
Hoi Hup Realty and Sunway Developments will cite nearby golf course as key selling point
By Joyce Teo
A JOINT venture which has emerged as the top bidder for a condominium site in Yishun is highlighting its location next to a golf course as a key selling point.
The tie-up between Hoi Hup Realty and Sunway Developments put in the best of seven bids for the 99-year leasehold land parcel at Miltonia Close, at the fringe of Yishun Town Centre.
The bid of $165 million, or $405.5 per sq ft per plot ratio (psf ppr), beat market expectations and came in about 31 per cent above the next bid.
Hoi Hup director Wong Sjew Hung told The Straits Times: 'We see the potential of the site. It is really hard to find a site next to the golf course here.
'We plan to build a five-storey condominium with 380 units. It will be mainly two- and three-bedroom units suitable for families.'
A construction firm, Master Contract Services, placed the second-highest bid of $126 million, or $309.68 psf ppr. The third-highest bid from a joint venture between Frasers Centrepoint and Orchard Parade Holdings came very close at $125.32 million, or $308 psf ppr.
The lowest of the seven bids came from Intrepid Investments - at $97.88 million, or $240.56 psf ppr.
Analysts had projected bids of $270-$350 psf ppr.
The site, which can be developed into a strata housing community or a condominium project, is on the boundary of the Orchid Country Club golf course. It is not near an MRT station, but it does enjoy an unblocked view of Lower Seletar Reservoir.
CBRE Research director Leonard Tay said the location will appeal to people who prefer a quiet neighbourhood, lots of greenery and a serene environment.
Private residential developments nearby include The Shaughnessy, Lilydale executive condominium, Orchid Park Condominium and The Estuary (under construction).
Mr Tay said the top bid could reflect a break-even cost of about $700-$750 psf should a low-rise condo be developed. And condo units in this new project could possibly sell above $800 psf, he said.
By comparison, units at The Estuary, which was launched in April, transacted at $650-$850 psf from April to August.
In the same period, units at the 16-year-old Orchid Park Condominium were sold at $550-$700 psf, said Mr Tay.
An industry expert said the tender response shows that, apart from the top bidder, the other developers are now more cautious in bidding for sites given the record upcoming supply.
But developers are still hungry for land as their landbanks are fast depleting, he said.
Ms Wong said this project - if the joint venture is awarded the site - will be Hoi Hup's fourth with Sunway Developments. The joint venture's previous project was The Peak @ Toa Payoh.
Joint venture bids $165m for 99-year site in Yishun
Hoi Hup Realty and Sunway Developments will cite nearby golf course as key selling point
By Joyce Teo
A JOINT venture which has emerged as the top bidder for a condominium site in Yishun is highlighting its location next to a golf course as a key selling point.
The tie-up between Hoi Hup Realty and Sunway Developments put in the best of seven bids for the 99-year leasehold land parcel at Miltonia Close, at the fringe of Yishun Town Centre.
The bid of $165 million, or $405.5 per sq ft per plot ratio (psf ppr), beat market expectations and came in about 31 per cent above the next bid.
Hoi Hup director Wong Sjew Hung told The Straits Times: 'We see the potential of the site. It is really hard to find a site next to the golf course here.
'We plan to build a five-storey condominium with 380 units. It will be mainly two- and three-bedroom units suitable for families.'
A construction firm, Master Contract Services, placed the second-highest bid of $126 million, or $309.68 psf ppr. The third-highest bid from a joint venture between Frasers Centrepoint and Orchard Parade Holdings came very close at $125.32 million, or $308 psf ppr.
The lowest of the seven bids came from Intrepid Investments - at $97.88 million, or $240.56 psf ppr.
Analysts had projected bids of $270-$350 psf ppr.
The site, which can be developed into a strata housing community or a condominium project, is on the boundary of the Orchid Country Club golf course. It is not near an MRT station, but it does enjoy an unblocked view of Lower Seletar Reservoir.
CBRE Research director Leonard Tay said the location will appeal to people who prefer a quiet neighbourhood, lots of greenery and a serene environment.
Private residential developments nearby include The Shaughnessy, Lilydale executive condominium, Orchid Park Condominium and The Estuary (under construction).
Mr Tay said the top bid could reflect a break-even cost of about $700-$750 psf should a low-rise condo be developed. And condo units in this new project could possibly sell above $800 psf, he said.
By comparison, units at The Estuary, which was launched in April, transacted at $650-$850 psf from April to August.
In the same period, units at the 16-year-old Orchid Park Condominium were sold at $550-$700 psf, said Mr Tay.
An industry expert said the tender response shows that, apart from the top bidder, the other developers are now more cautious in bidding for sites given the record upcoming supply.
But developers are still hungry for land as their landbanks are fast depleting, he said.
Ms Wong said this project - if the joint venture is awarded the site - will be Hoi Hup's fourth with Sunway Developments. The joint venture's previous project was The Peak @ Toa Payoh.
ST : Downtown Line news lifts home sales
Aug 25, 2010
Downtown Line news lifts home sales
HOME buyers have snapped up eight units at Waterfront Key and six at Waterfront Gold in the Bedok Reservoir area in the days since last week's news that an MRT station will be built nearby.
Developer Frasers Centrepoint Homes said the units have been sold since the Government announced details of Stage 3 of the MRT Downtown Line last Friday.
The firm will also officially launch Waterfront Gold this Saturday.
Waterfront Gold, Waterfront Key and the fully sold Waterfront Waves are near the planned Bedok Reservoir station on the newest stage of the Downtown Line.
Experts say projects near this line should experience stronger demand, as with other projects located near MRT stations.
Stage 3 of the Downtown Line stretches from Singapore Expo in the east to Liang Court in River Valley in the south. A total of 16 stops are planned, including Tampines East, Upper Changi, Kampong Ubi and Kaki Bukit.
Ms Christine Sun, senior manager at Savills Research & Consultancy, noted that quite a number of MRT stations on this line are located within commercial and industrial areas, particularly in the North-east and Eastern regions.
This line will boost transport links to suburban commercial sites in Ubi, Kaki Bukit, MacPherson and Singapore Expo, she said.
The Paya Lebar Industrial Park, where 15ha are to be developed under the Masterplan 2008, will be a definite beneficiary.
Ms Sun said more businesses may relocate their offices from the city fringes and downtown areas to the park, and a positive impact on industrial property prices in these areas can be expected.
Residential properties near the Bedok Reservoir, Tampines, Pasir Ris and Upper Changi areas could see higher demand down the road, she added.
Residents in these areas will be able to transfer to the East-West Line stations via the new Downtown Line instead of using bus transfers, she said.
'For now, owner-occupiers may show more interest than investors in the projects near the new Downtown Line because these are mostly suburban areas.'
Also, the timeframe for the completion of the Downtown Line may be too long for some investors, she said.
Savills Residential director Phylicia Ang concurred that new and existing residential projects near the upcoming Downtown Line should attract demand but said not all investors will be eager to jump in now.
They will have to wait a few years for the line to be ready in order to reap the benefits, she said.
Price is also a key factor as developers and individual sellers may raise their prices, she said.
Stage 3 of the Downtown Line is scheduled for completion in 2017.
JOYCE TEO
Downtown Line news lifts home sales
HOME buyers have snapped up eight units at Waterfront Key and six at Waterfront Gold in the Bedok Reservoir area in the days since last week's news that an MRT station will be built nearby.
Developer Frasers Centrepoint Homes said the units have been sold since the Government announced details of Stage 3 of the MRT Downtown Line last Friday.
The firm will also officially launch Waterfront Gold this Saturday.
Waterfront Gold, Waterfront Key and the fully sold Waterfront Waves are near the planned Bedok Reservoir station on the newest stage of the Downtown Line.
Experts say projects near this line should experience stronger demand, as with other projects located near MRT stations.
Stage 3 of the Downtown Line stretches from Singapore Expo in the east to Liang Court in River Valley in the south. A total of 16 stops are planned, including Tampines East, Upper Changi, Kampong Ubi and Kaki Bukit.
Ms Christine Sun, senior manager at Savills Research & Consultancy, noted that quite a number of MRT stations on this line are located within commercial and industrial areas, particularly in the North-east and Eastern regions.
This line will boost transport links to suburban commercial sites in Ubi, Kaki Bukit, MacPherson and Singapore Expo, she said.
The Paya Lebar Industrial Park, where 15ha are to be developed under the Masterplan 2008, will be a definite beneficiary.
Ms Sun said more businesses may relocate their offices from the city fringes and downtown areas to the park, and a positive impact on industrial property prices in these areas can be expected.
Residential properties near the Bedok Reservoir, Tampines, Pasir Ris and Upper Changi areas could see higher demand down the road, she added.
Residents in these areas will be able to transfer to the East-West Line stations via the new Downtown Line instead of using bus transfers, she said.
'For now, owner-occupiers may show more interest than investors in the projects near the new Downtown Line because these are mostly suburban areas.'
Also, the timeframe for the completion of the Downtown Line may be too long for some investors, she said.
Savills Residential director Phylicia Ang concurred that new and existing residential projects near the upcoming Downtown Line should attract demand but said not all investors will be eager to jump in now.
They will have to wait a few years for the line to be ready in order to reap the benefits, she said.
Price is also a key factor as developers and individual sellers may raise their prices, she said.
Stage 3 of the Downtown Line is scheduled for completion in 2017.
JOYCE TEO
ST : Crackdown on illegal dorms in Little India
Aug 25, 2010
Crackdown on illegal dorms in Little India
Rooms let out on sites that are not zoned for hotel use
By Tessa Wong
A NEW type of lodging for foreign workers has sprung up in Little India in recent years, with some offering air-conditioned rooms, cable television and housekeeping services, among other amenities.
But these establishments have come under scrutiny by government agencies, which say that some may not be operating legally and have clamped down on at least two in recent weeks.
At least nine such foreign worker hotels have come up in the past two years. Seven of them are owned by local property company DRA Property Management, spread out over Desker Road, Rowell Road and Dunlop Street.
One is operated by supermarket chain I-Tec above its Jalan Besar retail outlet, while the ninth is operated by the owner of Lamea Restaurant in Desker Road.
They have come up due to demand from foreign workers, particularly those who have not been housed in dorms by their companies, as well as tourists on a tight budget and foreign job seekers looking for a cheap place to stay.
The big attraction is their rates, which can be a fraction of what traditional hotels charge.
Rates range from $7 a night - for a bunk bed in a dorm-like room that can fit up to 30 people - to about $1,200 a month for an air-conditioned room shared by four people.
But it appears that such businesses may be operating on locations that have not been zoned for hotel use and are meant for other purposes, such as commercial or residential activity.
In addition, most of them do not have hotel licences, claiming that they are merely 'residences'. But technically, they meet the Government's definition of a hotel or boarding house, in which case they would need a licence and must operate on a location zoned for hotel use.
This definition, by the Hotel Licensing Board, states that any place with four or more rooms hired out for a fee, and that provides domestic services such as room cleaning, must get a hotel licence.
The Urban Redevelopment Authority (URA) has already told at least two DRA residences in Rowell Road to shut down by the middle of next month because those sites have been zoned for commercial use and not for hotel use. The DRA spokesman said the company plans to appeal.
Mr Jolovan Wham, spokesman for foreign workers' rights group Home, said that such establishments helped to fill a gap in housing, by providing cheap yet comfortable accommodation.
'Other places can be quite squalid, with no proper management. At least these boarding houses are maintained well, sometimes even with air-conditioning,' he said.
Guests also gave the thumbs-up, saying such establishments provide good service at a low cost.
Mr Dhanam Tennakoon, 74, who is from Sri Lanka, has been sharing a room with two relatives at a DRA residence for the past six months while one of his relatives seeks medical treatment here.
'We like this place. It's very reasonable, and it lets us do our own cooking and washing,' said Mr Tennakoon.
When told that the establishment might be illegal, he shrugged. 'We pay, and we stay. That's all I know.'
But others are less thrilled to see such businesses springing up. The Straits Times understands that the URA has received a number of complaints from the public, alleging that some of them are illegal boarding houses.
A URA spokesman said it is investigating some of these establishments.
Under the Planning Act, a person responsible for unauthorised use of a property may be fined up to $200,000 and/or imprisoned for up to a year. If the offence continues after conviction, a fine of up to $10,000 per day may be imposed.
Owners of unlicensed hotels may also be fined up to $2,000 on the first conviction, under the Hotel Act. For subsequent offences, the person may incur the same fine and/or be sent to prison for up to six months.
twong@sph.com.sg
Crackdown on illegal dorms in Little India
Rooms let out on sites that are not zoned for hotel use
By Tessa Wong
A NEW type of lodging for foreign workers has sprung up in Little India in recent years, with some offering air-conditioned rooms, cable television and housekeeping services, among other amenities.
But these establishments have come under scrutiny by government agencies, which say that some may not be operating legally and have clamped down on at least two in recent weeks.
At least nine such foreign worker hotels have come up in the past two years. Seven of them are owned by local property company DRA Property Management, spread out over Desker Road, Rowell Road and Dunlop Street.
One is operated by supermarket chain I-Tec above its Jalan Besar retail outlet, while the ninth is operated by the owner of Lamea Restaurant in Desker Road.
They have come up due to demand from foreign workers, particularly those who have not been housed in dorms by their companies, as well as tourists on a tight budget and foreign job seekers looking for a cheap place to stay.
The big attraction is their rates, which can be a fraction of what traditional hotels charge.
Rates range from $7 a night - for a bunk bed in a dorm-like room that can fit up to 30 people - to about $1,200 a month for an air-conditioned room shared by four people.
But it appears that such businesses may be operating on locations that have not been zoned for hotel use and are meant for other purposes, such as commercial or residential activity.
In addition, most of them do not have hotel licences, claiming that they are merely 'residences'. But technically, they meet the Government's definition of a hotel or boarding house, in which case they would need a licence and must operate on a location zoned for hotel use.
This definition, by the Hotel Licensing Board, states that any place with four or more rooms hired out for a fee, and that provides domestic services such as room cleaning, must get a hotel licence.
The Urban Redevelopment Authority (URA) has already told at least two DRA residences in Rowell Road to shut down by the middle of next month because those sites have been zoned for commercial use and not for hotel use. The DRA spokesman said the company plans to appeal.
Mr Jolovan Wham, spokesman for foreign workers' rights group Home, said that such establishments helped to fill a gap in housing, by providing cheap yet comfortable accommodation.
'Other places can be quite squalid, with no proper management. At least these boarding houses are maintained well, sometimes even with air-conditioning,' he said.
Guests also gave the thumbs-up, saying such establishments provide good service at a low cost.
Mr Dhanam Tennakoon, 74, who is from Sri Lanka, has been sharing a room with two relatives at a DRA residence for the past six months while one of his relatives seeks medical treatment here.
'We like this place. It's very reasonable, and it lets us do our own cooking and washing,' said Mr Tennakoon.
When told that the establishment might be illegal, he shrugged. 'We pay, and we stay. That's all I know.'
But others are less thrilled to see such businesses springing up. The Straits Times understands that the URA has received a number of complaints from the public, alleging that some of them are illegal boarding houses.
A URA spokesman said it is investigating some of these establishments.
Under the Planning Act, a person responsible for unauthorised use of a property may be fined up to $200,000 and/or imprisoned for up to a year. If the offence continues after conviction, a fine of up to $10,000 per day may be imposed.
Owners of unlicensed hotels may also be fined up to $2,000 on the first conviction, under the Hotel Act. For subsequent offences, the person may incur the same fine and/or be sent to prison for up to six months.
twong@sph.com.sg
BT : New benchmark set for condo land in Yishun area
Business Times - 25 Aug 2010
New benchmark set for condo land in Yishun area
Hoi Hup-Sunway tie-up puts in top bid of $405.53 psf ppr or $165m
By KALPANA RASHIWALA
A NEW benchmark has been set for condominium land in the Yishun/Semba- wang area. A state tender that closed yesterday for a 99-year leasehold plot at Miltonia Close next to Orchid Country Club fetched a top bid of $405.53 per square foot per plot ratio (psf ppr) or $165 million from a tie-up between Hoi Hup Realty and Sunway Developments.
The joint bid was 31 per cent higher than the next highest offer, placed by Master Contract Services, whose activities are listed as builders, contractors, developers and steel structural component makers.
Yesterday's tender drew seven bids, suggesting developers' appetite for choice sites is still healthy. Earlier this month, an executive condo plot at Jurong West did not draw a single bid - which some analysts blamed on its unattractive location.
At yesterday's tender, the lowest offer, from Hong Leong Group unit Intrepid Investments, was $240.56 psf ppr.
Market watchers note that the $405.53 psf ppr offered by Hoi Hup-Sunway surpassed the $387 psf ppr winning bid for a condo plot at Sembawang Road/ Canberra Drive at a state tender in June.
A Hoi Hup spokeswoman, explaining the group's 31 per cent margin at yesterday's tender, said: 'This is a rare site on mainland Singapore - next to a golf course, overlooking the (Lower Seletar) reservoir. We can see its potential.'
Hoi Hup and Sunway hope to build a five-storey condo with about 380 units comprising one- to four-bedroom units with as many units as possible having golf course views, she added.
Most of the units will be two- and three-bedders, targeting families.
The project is likely to be launch ready in about nine months to a year.
The allowed uses for the site are strata landed housing or condo housing or a flats development.
The Hoi Hup spokeswoman said the group's breakeven cost would be slightly above $700 psf.
'Our associated company, Straits Construction, will be doing the construction,' she added.
CBRE Research director Leonard Tay estimates that units in a new condo project on the site 'could possibly sell for above $800 psf'.
Another analyst suggests Hoi Hup and Sunway could be eyeing an average price of about $900 psf.
Market watchers note that a short distance away, The Estuary was launched in February this year at an average price of $750 psf. MCL Land is developing the project on a site it clinched for $350 psf ppr at a March 2008 tender. MCL's winning bid in that contest was a whopping 68 per cent more than the next highest bidder.
MCL's unit Superport also bid at yesterday's tender, emerging in fourth place at $285.10 psf ppr.
Frasers Centrepoint teamed up with Orchard Parade Holdings for a $308 psf ppr bid. Other bidders include Allgreen Properties ($267.60 psf ppr), and Ho Lee Group ($253.15 psf ppr).
Yesterday's joint top bid by Hoi Hup and Sunway will mark the duo's fourth collaboration.
They are developing two public housing projects under the Design Build and Sell Scheme as well as a 473-unit freehold condo at Jalan Senang, Vacanza@East, expected to be released soon.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
New benchmark set for condo land in Yishun area
Hoi Hup-Sunway tie-up puts in top bid of $405.53 psf ppr or $165m
By KALPANA RASHIWALA
A NEW benchmark has been set for condominium land in the Yishun/Semba- wang area. A state tender that closed yesterday for a 99-year leasehold plot at Miltonia Close next to Orchid Country Club fetched a top bid of $405.53 per square foot per plot ratio (psf ppr) or $165 million from a tie-up between Hoi Hup Realty and Sunway Developments.
The joint bid was 31 per cent higher than the next highest offer, placed by Master Contract Services, whose activities are listed as builders, contractors, developers and steel structural component makers.
Yesterday's tender drew seven bids, suggesting developers' appetite for choice sites is still healthy. Earlier this month, an executive condo plot at Jurong West did not draw a single bid - which some analysts blamed on its unattractive location.
At yesterday's tender, the lowest offer, from Hong Leong Group unit Intrepid Investments, was $240.56 psf ppr.
Market watchers note that the $405.53 psf ppr offered by Hoi Hup-Sunway surpassed the $387 psf ppr winning bid for a condo plot at Sembawang Road/ Canberra Drive at a state tender in June.
A Hoi Hup spokeswoman, explaining the group's 31 per cent margin at yesterday's tender, said: 'This is a rare site on mainland Singapore - next to a golf course, overlooking the (Lower Seletar) reservoir. We can see its potential.'
Hoi Hup and Sunway hope to build a five-storey condo with about 380 units comprising one- to four-bedroom units with as many units as possible having golf course views, she added.
Most of the units will be two- and three-bedders, targeting families.
The project is likely to be launch ready in about nine months to a year.
The allowed uses for the site are strata landed housing or condo housing or a flats development.
The Hoi Hup spokeswoman said the group's breakeven cost would be slightly above $700 psf.
'Our associated company, Straits Construction, will be doing the construction,' she added.
CBRE Research director Leonard Tay estimates that units in a new condo project on the site 'could possibly sell for above $800 psf'.
Another analyst suggests Hoi Hup and Sunway could be eyeing an average price of about $900 psf.
Market watchers note that a short distance away, The Estuary was launched in February this year at an average price of $750 psf. MCL Land is developing the project on a site it clinched for $350 psf ppr at a March 2008 tender. MCL's winning bid in that contest was a whopping 68 per cent more than the next highest bidder.
MCL's unit Superport also bid at yesterday's tender, emerging in fourth place at $285.10 psf ppr.
Frasers Centrepoint teamed up with Orchard Parade Holdings for a $308 psf ppr bid. Other bidders include Allgreen Properties ($267.60 psf ppr), and Ho Lee Group ($253.15 psf ppr).
Yesterday's joint top bid by Hoi Hup and Sunway will mark the duo's fourth collaboration.
They are developing two public housing projects under the Design Build and Sell Scheme as well as a 473-unit freehold condo at Jalan Senang, Vacanza@East, expected to be released soon.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : China housing prices to start dropping in Q4
Business Times - 24 Aug 2010
China housing prices to start dropping in Q4
BEIJING - Chinese property developers are facing strained cash flows and will be forced to cut prices beginning in the fourth quarter, a state newspaper reported on Tuesday, citing several bankers.
Beijing has strictly controlled financing to real estate developers by limiting their lending from banks and fund raising from capital markets, part of its efforts to cool speculative purchases and prevent prices from rising too fast.
'As far as we know, property developers are feeling very strained cash flows now and many of them have made preparations to tighten their belts,' the official Shanghai Securities News quoted an unnamed executive at the Shanghai branch of China Everbright Bank as saying.
Property developers purchased a large amount of land lots in 2009 when the market was booming. Under current regulations, they are not allowed to hold land for a long period of time without developing it and have to speed up construction. That will likely increase the supply of housing in the coming quarters, the newspaper said.
'Housing prices will probably show an evident drop as early as from the fourth quarter,' the newspaper quoted another unnamed banker at Shenzhen Development Bank as saying.
Earlier this month, the National Bureau of Statistics reported that housing prices in 70 major cities were unchanged in July from June.
But the National Development and Reform Commission said property prices in 36 key cities actually rose 1.6 per cent in July from June. -- REUTERS
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
China housing prices to start dropping in Q4
BEIJING - Chinese property developers are facing strained cash flows and will be forced to cut prices beginning in the fourth quarter, a state newspaper reported on Tuesday, citing several bankers.
Beijing has strictly controlled financing to real estate developers by limiting their lending from banks and fund raising from capital markets, part of its efforts to cool speculative purchases and prevent prices from rising too fast.
'As far as we know, property developers are feeling very strained cash flows now and many of them have made preparations to tighten their belts,' the official Shanghai Securities News quoted an unnamed executive at the Shanghai branch of China Everbright Bank as saying.
Property developers purchased a large amount of land lots in 2009 when the market was booming. Under current regulations, they are not allowed to hold land for a long period of time without developing it and have to speed up construction. That will likely increase the supply of housing in the coming quarters, the newspaper said.
'Housing prices will probably show an evident drop as early as from the fourth quarter,' the newspaper quoted another unnamed banker at Shenzhen Development Bank as saying.
Earlier this month, the National Bureau of Statistics reported that housing prices in 70 major cities were unchanged in July from June.
But the National Development and Reform Commission said property prices in 36 key cities actually rose 1.6 per cent in July from June. -- REUTERS
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
ST : China buyers are tops in Sentosa Cove
Aug 24, 2010
China buyers are tops in Sentosa Cove
They form biggest group of foreign purchasers there this year; many snap up landed homes
By Joyce Teo
BUYERS from China now comprise the largest group of foreign buyers in the exclusive residential enclave of Sentosa Cove.
In the first half of this year, Chinese buyers accounted for nearly a third of all foreign buyers - well up from 18 per cent for all of last year and just 7 per cent in 2008, according to a new DTZ report yesterday.
Malaysians were the largest group at the gated community last year, and Indonesians held the title back in 2008, the property consultancy said.
The buying surge from China is even more dramatic for landed homes there. When purchases of landed homes in the Cove were tallied up, China buyers accounted for a hefty 60 per cent (12 deals) of all foreign buyers there in the first half of the year, up from 38 per cent (nine deals) for all of last year.
Chinese buyers have shown a clear preference for the landed homes, which tend to be more expensive than apartments there.
DTZ said this is because the place offers them the opportunity to own landscaped grounds with waterfront facing in a resort-style living environment, and at prices lower than similar properties in mainland China and Hong Kong.
Chinese buyers' share of total foreign purchases across Singapore rose to 17 per cent in the first half of the year, from 7 per cent in 2006. Foreigners include Singapore permanent residents (PRs).
But overall, they are still No. 3 among foreign buyers here, after Indonesians in second place and Malaysians at the top.
Malaysians and Indonesians accounted for around 22 per cent and 18 per cent respectively of total deals by non-Singaporeans in the first half of this year.
Still, foreign buyers, not including PRs, are certainly not rushing into the market here. Their share of total deals in the second quarter was stable at 11 per cent. They remained cautious, owing to slow economic growth in the United States and Europe, said DTZ.
Singaporeans accounted for a higher proportion of private home purchases in the second quarter, at 74 per cent of total deals, up from 71 per cent in the first quarter, it said. Meanwhile, Singapore PRs accounted for 13 per cent of total deals in the second quarter, down from 15 per cent in the first, while purchases by companies were unchanged at 2 per cent.
China buyers have made headlines with some notable purchases recently, such as the $36 million purchase of a Sentosa Cove bungalow in June this year. DTZ said this is largely due to their increasing wealth and mobility on the global scene. They are also attracted to the transparent and well-regulated Singapore market.
Also, many in China come to Singapore to work, or they want their children to study here, because of the relative ease of adjusting to the culture and the bilingual environment in Singapore. This may lead them to buy homes, to live in or for investment, said DTZ head of South-east Asia research Chua Chor Hoon.
Rising real estate prices and property purchase curbs in China have also motivated its citizens to look to overseas markets for diversification and investment opportunities, Ms Chua said.
Savills Singapore prestige homes and investment director Steven Ming said Singapore is the main Asian market Chinese buyers are keen on, though they are also looking at markets elsewhere, such as Britain.
'The Chinese buyers are still active. Some of them are now in the market looking for bulk purchases of condominium units,' Mr Ming said.
The DTZ report said that when it comes to non-landed homes, Chinese buyers generally prefer districts 15, 16 and 23.
Singapore PRs from China generally like homes in districts 22 and 23 such as Jurong and Choa Chu Kang as they are near a number of their workplaces.
On the other hand, well-to-do Chinese buyers are attracted to prime districts 9, 10 and 11 as well as waterfront areas in Sentosa Cove and district 15 in the east.
joyceteo@sph.com.sg
China buyers are tops in Sentosa Cove
They form biggest group of foreign purchasers there this year; many snap up landed homes
By Joyce Teo
BUYERS from China now comprise the largest group of foreign buyers in the exclusive residential enclave of Sentosa Cove.
In the first half of this year, Chinese buyers accounted for nearly a third of all foreign buyers - well up from 18 per cent for all of last year and just 7 per cent in 2008, according to a new DTZ report yesterday.
Malaysians were the largest group at the gated community last year, and Indonesians held the title back in 2008, the property consultancy said.
The buying surge from China is even more dramatic for landed homes there. When purchases of landed homes in the Cove were tallied up, China buyers accounted for a hefty 60 per cent (12 deals) of all foreign buyers there in the first half of the year, up from 38 per cent (nine deals) for all of last year.
Chinese buyers have shown a clear preference for the landed homes, which tend to be more expensive than apartments there.
DTZ said this is because the place offers them the opportunity to own landscaped grounds with waterfront facing in a resort-style living environment, and at prices lower than similar properties in mainland China and Hong Kong.
Chinese buyers' share of total foreign purchases across Singapore rose to 17 per cent in the first half of the year, from 7 per cent in 2006. Foreigners include Singapore permanent residents (PRs).
But overall, they are still No. 3 among foreign buyers here, after Indonesians in second place and Malaysians at the top.
Malaysians and Indonesians accounted for around 22 per cent and 18 per cent respectively of total deals by non-Singaporeans in the first half of this year.
Still, foreign buyers, not including PRs, are certainly not rushing into the market here. Their share of total deals in the second quarter was stable at 11 per cent. They remained cautious, owing to slow economic growth in the United States and Europe, said DTZ.
Singaporeans accounted for a higher proportion of private home purchases in the second quarter, at 74 per cent of total deals, up from 71 per cent in the first quarter, it said. Meanwhile, Singapore PRs accounted for 13 per cent of total deals in the second quarter, down from 15 per cent in the first, while purchases by companies were unchanged at 2 per cent.
China buyers have made headlines with some notable purchases recently, such as the $36 million purchase of a Sentosa Cove bungalow in June this year. DTZ said this is largely due to their increasing wealth and mobility on the global scene. They are also attracted to the transparent and well-regulated Singapore market.
Also, many in China come to Singapore to work, or they want their children to study here, because of the relative ease of adjusting to the culture and the bilingual environment in Singapore. This may lead them to buy homes, to live in or for investment, said DTZ head of South-east Asia research Chua Chor Hoon.
Rising real estate prices and property purchase curbs in China have also motivated its citizens to look to overseas markets for diversification and investment opportunities, Ms Chua said.
Savills Singapore prestige homes and investment director Steven Ming said Singapore is the main Asian market Chinese buyers are keen on, though they are also looking at markets elsewhere, such as Britain.
'The Chinese buyers are still active. Some of them are now in the market looking for bulk purchases of condominium units,' Mr Ming said.
The DTZ report said that when it comes to non-landed homes, Chinese buyers generally prefer districts 15, 16 and 23.
Singapore PRs from China generally like homes in districts 22 and 23 such as Jurong and Choa Chu Kang as they are near a number of their workplaces.
On the other hand, well-to-do Chinese buyers are attracted to prime districts 9, 10 and 11 as well as waterfront areas in Sentosa Cove and district 15 in the east.
joyceteo@sph.com.sg
TODAY ONLINE : Pasir Panjang apartment block up for en bloc sale
Pasir Panjang apartment block up for en bloc sale
05:55 AM Aug 24, 2010
by Ephraim Seow Siew Lee
SINGAPORE - A 16-unit walk-up apartment block in Pasir Panjang has been put up for collective sale for between $26 million and $30 million in the latest addition to the en bloc revival.
The freehold site, at 252 to 258 Pasir Panjang Road, is near the future Haw Par Villa MRT Station and covers 28,263 square feet.
Under the Urban Redevelopment Authority's 2008 Master Plan, it is zoned for residential development with a gross plot ratio of up to 1.4 and an allowable height of up to five storeys.
The total gross floor area allowed is about 43,523 sq ft, after including the additional 10 per cent balcony space, according to marketing agent Credo Real Estate.
The asking price "translates to a land rate of approximately $597 psf to $689 psf on potential GFA, including balconies", said Mr Karamjit Singh, managing director of Credo.
He added that there would be no development charge. Credo said the site may be configured into about 40 apartment units with an average size of 1,000 square feet.
Ms Christina Sim, director of investment at Cushman and Wakefield, says the asking price is reasonable since the site is freehold and close to major research and educational institutions like Science Parks 1 and 2 and the National University of Singapore.
The tender closes on Sept 23.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
05:55 AM Aug 24, 2010
by Ephraim Seow Siew Lee
SINGAPORE - A 16-unit walk-up apartment block in Pasir Panjang has been put up for collective sale for between $26 million and $30 million in the latest addition to the en bloc revival.
The freehold site, at 252 to 258 Pasir Panjang Road, is near the future Haw Par Villa MRT Station and covers 28,263 square feet.
Under the Urban Redevelopment Authority's 2008 Master Plan, it is zoned for residential development with a gross plot ratio of up to 1.4 and an allowable height of up to five storeys.
The total gross floor area allowed is about 43,523 sq ft, after including the additional 10 per cent balcony space, according to marketing agent Credo Real Estate.
The asking price "translates to a land rate of approximately $597 psf to $689 psf on potential GFA, including balconies", said Mr Karamjit Singh, managing director of Credo.
He added that there would be no development charge. Credo said the site may be configured into about 40 apartment units with an average size of 1,000 square feet.
Ms Christina Sim, director of investment at Cushman and Wakefield, says the asking price is reasonable since the site is freehold and close to major research and educational institutions like Science Parks 1 and 2 and the National University of Singapore.
The tender closes on Sept 23.
Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved
ST : Drop in mortgage default rate here
Aug 24, 2010
Drop in mortgage default rate here
By Jonathan Kwok
THE level of mortgage default has dropped dramatically over the past two years, thanks to the improving property market and low interest rates.
Only 0.43 per cent of borrowers - or one in 233 - were in default in their mortgage payments in March. That is down from the 0.59 per cent - or one in 169 - at the same point last year. It is also less than half the rate in 2008, when the economy began to sour. Then, 0.89 per cent - or one in 112 - of mortgage holders lagged in their payments.
'The numbers represent an improvement in the property market leading to more positive sentiment,' said Mr Lincoln Teo, general manager of information firm DP Credit Bureau, which conducted the study. 'This indirectly drives better payment behaviour from mortgagors.'
He added the better payment situation comes amid greater efforts from consumers to maintain or improve their credit worthiness as they realise its importance for securing future borrowings. A loan is regarded to be in default, for example when it is 90 days past due.
Mr Teo also pointed out that for many, a home mortgage is the most important loan they will ever take out: 'Typically, one would choose to default on other borrowings and not a mortgage.'
The study also showed middle-aged Singaporeans are overtaking younger borrowers as the group with the highest mortgage default rate. People aged between 50 and 59 had the highest percentage of loans in arrears, with 0.62 per cent in default.
Mr Teo said many people in this group find it harder to get another job if they are laid off, affecting their ability to pay their mortgage.
The most striking change came in the level of arrears - 0.42 per cent - for people aged between 21 and 29 years. This group traditionally has the highest proportion of defaults, but they have shown a marked improvement. However, Mr Teo said other data from DP Credit Bureau shows younger borrowers are still the most likely to default on car loans, credit card debts and overdrafts.
DP Credit Bureau's study was based on loan records from its members, which include OCBC Bank and United Overseas Bank. DBS Bank is not a DP Credit Bureau member, but it told The Straits Times it is also seeing a fall in mortgage defaults.
Drop in mortgage default rate here
By Jonathan Kwok
THE level of mortgage default has dropped dramatically over the past two years, thanks to the improving property market and low interest rates.
Only 0.43 per cent of borrowers - or one in 233 - were in default in their mortgage payments in March. That is down from the 0.59 per cent - or one in 169 - at the same point last year. It is also less than half the rate in 2008, when the economy began to sour. Then, 0.89 per cent - or one in 112 - of mortgage holders lagged in their payments.
'The numbers represent an improvement in the property market leading to more positive sentiment,' said Mr Lincoln Teo, general manager of information firm DP Credit Bureau, which conducted the study. 'This indirectly drives better payment behaviour from mortgagors.'
He added the better payment situation comes amid greater efforts from consumers to maintain or improve their credit worthiness as they realise its importance for securing future borrowings. A loan is regarded to be in default, for example when it is 90 days past due.
Mr Teo also pointed out that for many, a home mortgage is the most important loan they will ever take out: 'Typically, one would choose to default on other borrowings and not a mortgage.'
The study also showed middle-aged Singaporeans are overtaking younger borrowers as the group with the highest mortgage default rate. People aged between 50 and 59 had the highest percentage of loans in arrears, with 0.62 per cent in default.
Mr Teo said many people in this group find it harder to get another job if they are laid off, affecting their ability to pay their mortgage.
The most striking change came in the level of arrears - 0.42 per cent - for people aged between 21 and 29 years. This group traditionally has the highest proportion of defaults, but they have shown a marked improvement. However, Mr Teo said other data from DP Credit Bureau shows younger borrowers are still the most likely to default on car loans, credit card debts and overdrafts.
DP Credit Bureau's study was based on loan records from its members, which include OCBC Bank and United Overseas Bank. DBS Bank is not a DP Credit Bureau member, but it told The Straits Times it is also seeing a fall in mortgage defaults.
ST : Property launches picking up speed
Aug 24, 2010
Property launches picking up speed
Developers wary of looming market uncertainties: Wing Tai boss
By Robin Chan
DEVELOPERS are fast-tracking mass market properties in order to take profits sooner rather than later, a leading local developer said yesterday.
These firms fear looming property market uncertainty, said Wing Tai Holdings chairman Cheng Wai Keung.
With government cooling measures taking hold, developers believe it is better to take a bet on prices now, and are pushing out their properties much faster than usual, he said.
Mr Cheng was speaking at Wing Tai's results briefing at the Raffles Hotel. He was answering a question on whether he believed there would be a correction in the property market.
'My reading of the upgraders' market is that it seems to have come to a saturation point,' he said, after low interest rates and a 'tremendous increase' in the number of permanent residents saw property demand outstrip supply.
He said Wing Tai would have tendered for land last year before prices shot up, but not now as it would be dangerous to 'chase' rapidly rising land prices.
'If you look at any developer, they are actually pushing out (properties) much faster than the normal timeframe required. What it translates to is that people believe the risks are too high to wait.
'You can see that more and more projects are actually pushed out in six to nine months' time, rather than the normal time of one to 11/2 years.'
The site for Waterbank at Dakota was won by the UOL Group in September last year, and pushed out within seven months in April this year. Similarly, Hong Leong Group won the site for The Scala last October and launched the property in July, while City Developments' Tree House site was won last August and launched in April.
'If we also try to push off in the next six to nine months, we may get jammed and given there is such a high price, we believe, even if we wait, the upside may not be there,' Mr Cheng added.
Property prices in the mass market segment have surged. Home buyers have already snapped up 9,957 private homes in the first seven months of this year, after last year's strong sales of 14,688 units.
The latest official data shows sales of private homes have slowed, but prices have still edged above their 1996 highs.
The Government moved to cool the market with a string of measures last September and again in February and a record Government Land Sales programme in May for the second half.
Mr Cheng said the Government is likely to introduce more measures if the market is still not 'in control'.
While the frenzy in the mass market has not been reflected in the high-end market, Mr Cheng believes this segment will eventually continue to rise. 'I see this market becoming even more sophisticated than before,' he said.
When asked why Wing Tai has not joined the frenzy for sites, he said it was because 'most of the land available for tender is for the upgrader market or just one class above it'.
Wing Tai is among 10 bidders to buy and redevelop a landmark commercial site at City Hall which includes the historic Capitol Theatre, Capitol Building and Stamford House. It did so as the site offered long-term opportunity, he said.
'We will have to look at the different sites available. If you ask me, I will play a medium-to-long term game now, rather than the next nine to 12 months.'
On possible launches this year, Mr Cheng said the high-end Anderson18 site, its joint venture with City Developments, 'is a likely scenario'. But he said he did not want to pre-empt its partner.
Wing Tai booked net profits of $68.9 million in the fourth quarter, reversing a net loss of $53.9 million a year earlier. This helped push its full-year profits up 666per cent to $160.8 million.
Revenue rose 64 per cent to $821.9 million for the year helped by properties sold at Belle Vue Residences and The Riverine by the Park. For the quarter ended June30, revenue was up 17per cent to $222million.
The firm declared a final dividend of three cents a share and a special dividend of two cents a share.
chanckr@sph.com.sg
TREE HOUSE (LAUNCHED IN APRIL)
Property launches picking up speed
Developers wary of looming market uncertainties: Wing Tai boss
By Robin Chan
DEVELOPERS are fast-tracking mass market properties in order to take profits sooner rather than later, a leading local developer said yesterday.
These firms fear looming property market uncertainty, said Wing Tai Holdings chairman Cheng Wai Keung.
With government cooling measures taking hold, developers believe it is better to take a bet on prices now, and are pushing out their properties much faster than usual, he said.
Mr Cheng was speaking at Wing Tai's results briefing at the Raffles Hotel. He was answering a question on whether he believed there would be a correction in the property market.
'My reading of the upgraders' market is that it seems to have come to a saturation point,' he said, after low interest rates and a 'tremendous increase' in the number of permanent residents saw property demand outstrip supply.
He said Wing Tai would have tendered for land last year before prices shot up, but not now as it would be dangerous to 'chase' rapidly rising land prices.
'If you look at any developer, they are actually pushing out (properties) much faster than the normal timeframe required. What it translates to is that people believe the risks are too high to wait.
'You can see that more and more projects are actually pushed out in six to nine months' time, rather than the normal time of one to 11/2 years.'
The site for Waterbank at Dakota was won by the UOL Group in September last year, and pushed out within seven months in April this year. Similarly, Hong Leong Group won the site for The Scala last October and launched the property in July, while City Developments' Tree House site was won last August and launched in April.
'If we also try to push off in the next six to nine months, we may get jammed and given there is such a high price, we believe, even if we wait, the upside may not be there,' Mr Cheng added.
Property prices in the mass market segment have surged. Home buyers have already snapped up 9,957 private homes in the first seven months of this year, after last year's strong sales of 14,688 units.
The latest official data shows sales of private homes have slowed, but prices have still edged above their 1996 highs.
The Government moved to cool the market with a string of measures last September and again in February and a record Government Land Sales programme in May for the second half.
Mr Cheng said the Government is likely to introduce more measures if the market is still not 'in control'.
While the frenzy in the mass market has not been reflected in the high-end market, Mr Cheng believes this segment will eventually continue to rise. 'I see this market becoming even more sophisticated than before,' he said.
When asked why Wing Tai has not joined the frenzy for sites, he said it was because 'most of the land available for tender is for the upgrader market or just one class above it'.
Wing Tai is among 10 bidders to buy and redevelop a landmark commercial site at City Hall which includes the historic Capitol Theatre, Capitol Building and Stamford House. It did so as the site offered long-term opportunity, he said.
'We will have to look at the different sites available. If you ask me, I will play a medium-to-long term game now, rather than the next nine to 12 months.'
On possible launches this year, Mr Cheng said the high-end Anderson18 site, its joint venture with City Developments, 'is a likely scenario'. But he said he did not want to pre-empt its partner.
Wing Tai booked net profits of $68.9 million in the fourth quarter, reversing a net loss of $53.9 million a year earlier. This helped push its full-year profits up 666per cent to $160.8 million.
Revenue rose 64 per cent to $821.9 million for the year helped by properties sold at Belle Vue Residences and The Riverine by the Park. For the quarter ended June30, revenue was up 17per cent to $222million.
The firm declared a final dividend of three cents a share and a special dividend of two cents a share.
chanckr@sph.com.sg
TREE HOUSE (LAUNCHED IN APRIL)
BT : Real estate investment goes green
Business Times - 24 Aug 2010
Real estate investment goes green
Investors are realising that incorporating sustainability into property investment strategies can make sound long-term business sense
TODAY'S real estate investors are aware that environmental issues can have an impact on investment portfolios and that incorporating sustainability into property investment strategies can make sound long-term business sense.
So real estate investors now think about environmental issues with regard to government regulations and incentives, costly natural resources, legal risks, the rise of corporate social responsibility, changing occupier behaviour and stakeholder pressure.
Recent years have seen a growing number of institutional and individual investors, socially concerned high-net-worth individuals, pension funds and mission-driven institutions incorporate environmental concerns into the way they manage their property portfolios as energy efficiency is introduced into building codes and countries establish energy performance rating systems.
Although a direct link between green property investment strategies and increased returns on investment has yet to be proven beyond all doubt, the 'green approach to property selection' is beginning to attract a wide institutional following.
The key factor here is that investors have increasingly come to believe that a green property portfolio will offer better long-term investment return as less efficient buildings become obsolete and their prices become subject to discounting.
In Asia too, this practice is now starting to take hold, with large institutions increasingly adopting the principle of sustainability as a key part of their investment criteria. These institutions want to improve the environmental performance of buildings in their existing portfolios, while other investors launch innovative funds to invest in energy efficiency projects in buildings around the region.
Evidence linking green buildings with stronger financial performance remains ambiguous, largely due to the absence of commonly agreed measurement standards and centralised building information.
However a consensus is now growing within the real estate investment community that outdated and unsustainable investment, construction and facilities management practices will hasten the obsolescence of properties and result in declining asset values and poor financial performance.
At the same time, investors are also anticipating that tougher government regulations relating to energy efficiency and green buildings will be rapidly coming into force in various markets, both globally and within Asia.
The European Union has already introduced its Energy Performance of Buildings Directive (EPBD) for new and refurbished buildings. In Australia, new buildings must comply with the Green Star sustainable performance measures.
In Asia, under the Singapore government's Green Building Masterplan unveiled last year, 80 per cent of buildings in the city must be Green Mark certified by the year 2030.
As the move towards mandatory energy efficiency gathers pace across the region and also influences occupiers' leasing decisions, it looks highly likely that non-green buildings are gradually going to become obsolete and could see their capital values and rents trade at a discount, resulting in lower investment returns.
Such buildings could also incur additional taxes for excessive emissions and energy use. In contrast, green buildings are likely to command a rental premium in the marketplace, depreciate at a slower pace, enjoy a longer life cycle and ultimately retain higher capital values.
All of this adds up to the suggestion that Asia will ultimately witness the emergence of a two-tier market in which green properties will enjoy higher values, rental levels and therefore rates of investment return.
Among institutional investors in Asia, one of the clear leaders in commitment to sustainability in its real estate related activities in Asia is ING Real Estate Investment Management, which in 2008 formalised a corporate policy underlining its commitment to this goal.
The policy defines the company's vision, ambition and principles and serves as a sustainability framework.
The company has established a global sustainability platform with representatives from all regions around the world to support collaboration between different areas of its business, to share best practices and to incorporate sustainability as a standard business practice in anticipation of greater demand for sustainable real estate projects from its clients.
'Over the past two years, many of our investor clients in Asia have begun to implement environmental goals as part of their investment criteria. Several of our bigger clients, particularly the large pension funds, are increasingly insisting on transparency and sustainability,' says Richard Price, chief executive officer of ING REIM Asia.
Forward looking
'We also have a very forward looking environmental and corporate social responsibility commitment within the group. So we are seeing twin drivers, coming from both the top down internally, as well as externally from our clients,' he adds.
ING REIM Asia had two funds surveyed in 2009 and both finished in the top 10 of private equity real estate fund leaders in sustainable investment in Asia in a global survey undertaken by the University of Maastricht as commissioned by APG Asset Management, PGGM Investments, and the Universities Superannuation Scheme (USS).
There are a number of ways in which institutional investors have begun reflecting their greater concern about sustainability directly into the way they manage their portfolio.
Most begin by identifying and sorting existing buildings in their portfolio that may breach current or future legal requirements relating to energy efficiency or other green standards.
Next, they examine ways of making these buildings more environmentally friendly. Steps adopted can range from implementing relatively straightforward smaller initiatives, such as installing energy saving light bulbs, to major projects, such as the full scale en-bloc sustainable retrofitting of entire buildings.
They can also talk to their tenants and other stakeholders and agree on actions and goals related to energy or other resource savings.
ING REIM Asia followed such a model. 'We firstly audited our existing portfolio and sorted our assets into different categories, according to how much control we had, to make sustainability improvements,' says Arjen Seckel, senior vice-president at ING REIM Asia and Asia coordinator of ING Real Estate's global sustainability platform.
'We identified buildings that can achieve LEED certification (Leadership in Energy and Environmental Design) and then conducted research into the costs, what needs to be done and what are the benefits obtainable from these actions. We also started to measure energy usage and see where we can achieve savings,' he adds.
The major challenge encountered in this approach is the ownership structure of the company's existing portfolio. ING REIM Asia's degree of control over its assets is varied; in some cases there will be a master lessee who will not accept changes, while joint-venture partners also need to be persuaded or encouraged.
There are only a limited number of buildings in its portfolio over which it has full control. On a macro level, the lack of standardisation in the Asian market can often be an obstacle, with the different certification regulations and standards found in the various countries.
The largest asset in ING REIM Asia's portfolio under its full control is a regional shopping centre outside Tokyo.
Here the company has been actively reducing the building's energy consumption and has introduced a number of measures that have led to significant year-on-year reductions in the use of gas, water and electricity.
Key measures introduced have included reducing the working hours of escalators, installing sensors in emergency stairs, using of a water well, reducing the operating hours of air conditioners, cutting the use of backyard lighting and incorporating an inverter controller.
Other measures to be incorporated in the near future include the installation of LED lighting and a system to generate electricity from garbage.
'The next step is to set goals,' says Mr Seckel. 'In the future we hope to have a system where we can benchmark our portfolio against global and regional green building standards and use this as a basis for making intra-regional comparisons. But at the moment we are restricted to measuring where we are, so we can determine where we can go.'
ING REIM Europe recently launched a test system called 'Green Rating' to rate and benchmark the environmental performance of its portfolio together with GE, AXA and AEW.
The company contributed 30 buildings from 12 different funds to the pilot project and the ING RE European Office Fund is surveying the energy, water and transport performance of all of its properties. Should this new rating system prove successful, the system will eventually be rolled out in Asia as well.
Along with the increased focus on sustainable real estate among institutional investors in Asia, other investors are raising innovative funds to invest in energy efficiency initiatives in buildings around the region.
Sustainable Development Capital LLP (SDCL) is raising capital for the China Energy Efficiency Partners LP Fund (CEEP) to invest in energy efficiency projects being developed at energy intensive industrial sites and in commercial and public buildings and facilities in China.
The fund is the first of its kind and will seek to generate relatively high, predictable levels of income by making investments in projects involving the installation, operation and maintenance of energy saving solutions and equipment.
It will aim to earn investment returns by sharing in the consequent energy cost savings achieved by the site, building or facility owners. 'The technology is there and the economics make sense,' says Glen Plumbridge, director at SDCL in Hong Kong.
'Over the next five years there will be a raft of legislation tightening the efficiency of existing buildings across the region which will force people to retrofit for sustainability. At the same time, retrofitting is not as complex as it was before. Technology, measurement and verification are all becoming more advanced.'
The CEEP model aims to capitalise on the increasingly resource-constrained global economy and a growing awareness among countries that they face significant energy challenges.
'Countries need to be more energy efficient because they are running out of energy,' says Mr Plumbridge. 'The growth of our industry may eventually turn out be more driven by sovereign risk and the urge to be self sufficient as opposed to climate change issues or carbon emission reductions,' he adds.
SDCL, which is involved with the UN Environment Programme, the Clinton Climate Initiative and the P8 group of the world's biggest pension funds, believes that the rising cost of natural resources makes energy efficiency simple business sense and that the sustainable retrofitting of buildings is both the primary and cheapest solution to this problem.
Challenge
The biggest challenge facing the CEEP model is scalability and the fact that most projects are too small and many banks and other investors are therefore not interested.
SDCL believes that the bigger the project value, the better, and is currently exploring opportunities to link up with big developers and fund energy efficiency retrofits across entire portfolios.
Various other green financing and investment tools are gaining traction around the globe and are gradually finding their way to Asia.
Recent years have seen an increasing number of socially responsible investors purchase local government-issued green bonds to fund the sustainable retrofitting of low income housing projects, such as the Climate Awareness Bonds issued by the European Union in 2007.
Commercial bank green loans and investment products are also being offered. In January 2010, the government of South Korea formally passed its 'low carbon, green growth' law which saw it pledge to spend 2 per cent of annual GDP on developing eco-friendly businesses and projects that will result in economic growth and the reduction of greenhouse gas emissions.
At the same time, a number of the country's biggest banks unveiled a number of new green financial products and services including loans for green residential and commercial buildings.
China tops the list of markets within the region that investors have identified as the most desirable location for investing in green real estate.
'Over the past few years, the improvement in construction standards and the quality of the final product in China has been immense and construction practices there now are more technologically sophisticated than those in many developed Western markets,' says Richard Price.
'The country will leap generations of building standards and skip inefficient technologies altogether as it continues rapid urbanisation and this will present many opportunities for investors in green buildings.'
On the energy efficiency side, China has doubled the number of energy service companies (ESCOs) and the value of energy efficiency projects each year for the past six years.
'China has some of the strongest legislation around and is acutely aware of its energy challenges,' says Mr Plumbridge.
Indeed, over the past few years China has implemented strong top-down policies including nationwide energy conservation and clean energy targets supplemented by incentives at the municipal level for developers which engage in green or energy efficient projects.
Elsewhere around the region, Singapore has good infrastructure and strong rules and regulations relating to energy efficiency and green buildings but is a small market, while in Hong Kong progress is slower due to legacy issues, fragmented ownership and a lack of government leadership.
'In general, across Asia there is a need for greater government support and in some markets there is a lack of financial incentives,' says Mr Price.
'In markets such as Australia, the government is being very proactive and that is really facilitating green investment.'
Despite the gradual shift towards investing in sustainable real estate, a number of challenges remain, not least of which is the fact that it has yet to be proven that developing green buildings is really worth the incremental cost.
'We believe that sustainable investment is important but we have to remain prudent and always keep the costs and benefits in balance,' says Mr Price.
'However, as an investor, the value in investing in green buildings will emerge in the sale, as they are far less likely to be functionally obsolete.'
In the longer term, improved data and research will illustrate whether new regulations and growing demand are actually resulting in higher prices for green real estate.
Nevertheless, there is still gradual global and regional momentum in favour of green buildings as socially responsible real estate investors evaluate and enhance the environmental performance of assets in their portfolio to prevent obsolescence and reduce exposure to future taxes and penalties associated with carbon emissions and energy use.
This is an edited version of an article that first ran in Issue 2 of CB Richard Ellis' Sustainability Asia
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Environmentally friendly: Under Singapore's Green Building Masterplan, 80 per cent of buildings in the city must be Green Mark certified by the year 2030. Winners of the Building and Construction Authority's Green Mark Platinum Awards include GuocoLand Group's Sophia Residence (above) and Mapletree Anson (next), an office tower in the CBD
Real estate investment goes green
Investors are realising that incorporating sustainability into property investment strategies can make sound long-term business sense
TODAY'S real estate investors are aware that environmental issues can have an impact on investment portfolios and that incorporating sustainability into property investment strategies can make sound long-term business sense.
So real estate investors now think about environmental issues with regard to government regulations and incentives, costly natural resources, legal risks, the rise of corporate social responsibility, changing occupier behaviour and stakeholder pressure.
Recent years have seen a growing number of institutional and individual investors, socially concerned high-net-worth individuals, pension funds and mission-driven institutions incorporate environmental concerns into the way they manage their property portfolios as energy efficiency is introduced into building codes and countries establish energy performance rating systems.
Although a direct link between green property investment strategies and increased returns on investment has yet to be proven beyond all doubt, the 'green approach to property selection' is beginning to attract a wide institutional following.
The key factor here is that investors have increasingly come to believe that a green property portfolio will offer better long-term investment return as less efficient buildings become obsolete and their prices become subject to discounting.
In Asia too, this practice is now starting to take hold, with large institutions increasingly adopting the principle of sustainability as a key part of their investment criteria. These institutions want to improve the environmental performance of buildings in their existing portfolios, while other investors launch innovative funds to invest in energy efficiency projects in buildings around the region.
Evidence linking green buildings with stronger financial performance remains ambiguous, largely due to the absence of commonly agreed measurement standards and centralised building information.
However a consensus is now growing within the real estate investment community that outdated and unsustainable investment, construction and facilities management practices will hasten the obsolescence of properties and result in declining asset values and poor financial performance.
At the same time, investors are also anticipating that tougher government regulations relating to energy efficiency and green buildings will be rapidly coming into force in various markets, both globally and within Asia.
The European Union has already introduced its Energy Performance of Buildings Directive (EPBD) for new and refurbished buildings. In Australia, new buildings must comply with the Green Star sustainable performance measures.
In Asia, under the Singapore government's Green Building Masterplan unveiled last year, 80 per cent of buildings in the city must be Green Mark certified by the year 2030.
As the move towards mandatory energy efficiency gathers pace across the region and also influences occupiers' leasing decisions, it looks highly likely that non-green buildings are gradually going to become obsolete and could see their capital values and rents trade at a discount, resulting in lower investment returns.
Such buildings could also incur additional taxes for excessive emissions and energy use. In contrast, green buildings are likely to command a rental premium in the marketplace, depreciate at a slower pace, enjoy a longer life cycle and ultimately retain higher capital values.
All of this adds up to the suggestion that Asia will ultimately witness the emergence of a two-tier market in which green properties will enjoy higher values, rental levels and therefore rates of investment return.
Among institutional investors in Asia, one of the clear leaders in commitment to sustainability in its real estate related activities in Asia is ING Real Estate Investment Management, which in 2008 formalised a corporate policy underlining its commitment to this goal.
The policy defines the company's vision, ambition and principles and serves as a sustainability framework.
The company has established a global sustainability platform with representatives from all regions around the world to support collaboration between different areas of its business, to share best practices and to incorporate sustainability as a standard business practice in anticipation of greater demand for sustainable real estate projects from its clients.
'Over the past two years, many of our investor clients in Asia have begun to implement environmental goals as part of their investment criteria. Several of our bigger clients, particularly the large pension funds, are increasingly insisting on transparency and sustainability,' says Richard Price, chief executive officer of ING REIM Asia.
Forward looking
'We also have a very forward looking environmental and corporate social responsibility commitment within the group. So we are seeing twin drivers, coming from both the top down internally, as well as externally from our clients,' he adds.
ING REIM Asia had two funds surveyed in 2009 and both finished in the top 10 of private equity real estate fund leaders in sustainable investment in Asia in a global survey undertaken by the University of Maastricht as commissioned by APG Asset Management, PGGM Investments, and the Universities Superannuation Scheme (USS).
There are a number of ways in which institutional investors have begun reflecting their greater concern about sustainability directly into the way they manage their portfolio.
Most begin by identifying and sorting existing buildings in their portfolio that may breach current or future legal requirements relating to energy efficiency or other green standards.
Next, they examine ways of making these buildings more environmentally friendly. Steps adopted can range from implementing relatively straightforward smaller initiatives, such as installing energy saving light bulbs, to major projects, such as the full scale en-bloc sustainable retrofitting of entire buildings.
They can also talk to their tenants and other stakeholders and agree on actions and goals related to energy or other resource savings.
ING REIM Asia followed such a model. 'We firstly audited our existing portfolio and sorted our assets into different categories, according to how much control we had, to make sustainability improvements,' says Arjen Seckel, senior vice-president at ING REIM Asia and Asia coordinator of ING Real Estate's global sustainability platform.
'We identified buildings that can achieve LEED certification (Leadership in Energy and Environmental Design) and then conducted research into the costs, what needs to be done and what are the benefits obtainable from these actions. We also started to measure energy usage and see where we can achieve savings,' he adds.
The major challenge encountered in this approach is the ownership structure of the company's existing portfolio. ING REIM Asia's degree of control over its assets is varied; in some cases there will be a master lessee who will not accept changes, while joint-venture partners also need to be persuaded or encouraged.
There are only a limited number of buildings in its portfolio over which it has full control. On a macro level, the lack of standardisation in the Asian market can often be an obstacle, with the different certification regulations and standards found in the various countries.
The largest asset in ING REIM Asia's portfolio under its full control is a regional shopping centre outside Tokyo.
Here the company has been actively reducing the building's energy consumption and has introduced a number of measures that have led to significant year-on-year reductions in the use of gas, water and electricity.
Key measures introduced have included reducing the working hours of escalators, installing sensors in emergency stairs, using of a water well, reducing the operating hours of air conditioners, cutting the use of backyard lighting and incorporating an inverter controller.
Other measures to be incorporated in the near future include the installation of LED lighting and a system to generate electricity from garbage.
'The next step is to set goals,' says Mr Seckel. 'In the future we hope to have a system where we can benchmark our portfolio against global and regional green building standards and use this as a basis for making intra-regional comparisons. But at the moment we are restricted to measuring where we are, so we can determine where we can go.'
ING REIM Europe recently launched a test system called 'Green Rating' to rate and benchmark the environmental performance of its portfolio together with GE, AXA and AEW.
The company contributed 30 buildings from 12 different funds to the pilot project and the ING RE European Office Fund is surveying the energy, water and transport performance of all of its properties. Should this new rating system prove successful, the system will eventually be rolled out in Asia as well.
Along with the increased focus on sustainable real estate among institutional investors in Asia, other investors are raising innovative funds to invest in energy efficiency initiatives in buildings around the region.
Sustainable Development Capital LLP (SDCL) is raising capital for the China Energy Efficiency Partners LP Fund (CEEP) to invest in energy efficiency projects being developed at energy intensive industrial sites and in commercial and public buildings and facilities in China.
The fund is the first of its kind and will seek to generate relatively high, predictable levels of income by making investments in projects involving the installation, operation and maintenance of energy saving solutions and equipment.
It will aim to earn investment returns by sharing in the consequent energy cost savings achieved by the site, building or facility owners. 'The technology is there and the economics make sense,' says Glen Plumbridge, director at SDCL in Hong Kong.
'Over the next five years there will be a raft of legislation tightening the efficiency of existing buildings across the region which will force people to retrofit for sustainability. At the same time, retrofitting is not as complex as it was before. Technology, measurement and verification are all becoming more advanced.'
The CEEP model aims to capitalise on the increasingly resource-constrained global economy and a growing awareness among countries that they face significant energy challenges.
'Countries need to be more energy efficient because they are running out of energy,' says Mr Plumbridge. 'The growth of our industry may eventually turn out be more driven by sovereign risk and the urge to be self sufficient as opposed to climate change issues or carbon emission reductions,' he adds.
SDCL, which is involved with the UN Environment Programme, the Clinton Climate Initiative and the P8 group of the world's biggest pension funds, believes that the rising cost of natural resources makes energy efficiency simple business sense and that the sustainable retrofitting of buildings is both the primary and cheapest solution to this problem.
Challenge
The biggest challenge facing the CEEP model is scalability and the fact that most projects are too small and many banks and other investors are therefore not interested.
SDCL believes that the bigger the project value, the better, and is currently exploring opportunities to link up with big developers and fund energy efficiency retrofits across entire portfolios.
Various other green financing and investment tools are gaining traction around the globe and are gradually finding their way to Asia.
Recent years have seen an increasing number of socially responsible investors purchase local government-issued green bonds to fund the sustainable retrofitting of low income housing projects, such as the Climate Awareness Bonds issued by the European Union in 2007.
Commercial bank green loans and investment products are also being offered. In January 2010, the government of South Korea formally passed its 'low carbon, green growth' law which saw it pledge to spend 2 per cent of annual GDP on developing eco-friendly businesses and projects that will result in economic growth and the reduction of greenhouse gas emissions.
At the same time, a number of the country's biggest banks unveiled a number of new green financial products and services including loans for green residential and commercial buildings.
China tops the list of markets within the region that investors have identified as the most desirable location for investing in green real estate.
'Over the past few years, the improvement in construction standards and the quality of the final product in China has been immense and construction practices there now are more technologically sophisticated than those in many developed Western markets,' says Richard Price.
'The country will leap generations of building standards and skip inefficient technologies altogether as it continues rapid urbanisation and this will present many opportunities for investors in green buildings.'
On the energy efficiency side, China has doubled the number of energy service companies (ESCOs) and the value of energy efficiency projects each year for the past six years.
'China has some of the strongest legislation around and is acutely aware of its energy challenges,' says Mr Plumbridge.
Indeed, over the past few years China has implemented strong top-down policies including nationwide energy conservation and clean energy targets supplemented by incentives at the municipal level for developers which engage in green or energy efficient projects.
Elsewhere around the region, Singapore has good infrastructure and strong rules and regulations relating to energy efficiency and green buildings but is a small market, while in Hong Kong progress is slower due to legacy issues, fragmented ownership and a lack of government leadership.
'In general, across Asia there is a need for greater government support and in some markets there is a lack of financial incentives,' says Mr Price.
'In markets such as Australia, the government is being very proactive and that is really facilitating green investment.'
Despite the gradual shift towards investing in sustainable real estate, a number of challenges remain, not least of which is the fact that it has yet to be proven that developing green buildings is really worth the incremental cost.
'We believe that sustainable investment is important but we have to remain prudent and always keep the costs and benefits in balance,' says Mr Price.
'However, as an investor, the value in investing in green buildings will emerge in the sale, as they are far less likely to be functionally obsolete.'
In the longer term, improved data and research will illustrate whether new regulations and growing demand are actually resulting in higher prices for green real estate.
Nevertheless, there is still gradual global and regional momentum in favour of green buildings as socially responsible real estate investors evaluate and enhance the environmental performance of assets in their portfolio to prevent obsolescence and reduce exposure to future taxes and penalties associated with carbon emissions and energy use.
This is an edited version of an article that first ran in Issue 2 of CB Richard Ellis' Sustainability Asia
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Environmentally friendly: Under Singapore's Green Building Masterplan, 80 per cent of buildings in the city must be Green Mark certified by the year 2030. Winners of the Building and Construction Authority's Green Mark Platinum Awards include GuocoLand Group's Sophia Residence (above) and Mapletree Anson (next), an office tower in the CBD
BT : Over 80% of Viva Vista's shoebox units snapped up
Business Times - 24 Aug 2010
Over 80% of Viva Vista's shoebox units snapped up
MORE than 80 per cent of the 144 residential units in Oxley Holdings' Viva Vista were snapped up during the project's preview yesterday - indicating that there is still strong demand for small, or shoebox, apartments.
The sizes of the units in the project along South Buona Vista Road range from 323 sq ft to 1,076 sq ft, with the bulk being just shy of 400 sq ft.
Oxley Holdings said that the average transacted price was $1,450 per square foot (psf) while the absolute price started from about $520,000.
The project also has more than 100 commercial units which are yet to be sold.
Market watchers said that affordable and shoebox units continue to be popular with buyers, which could have prompted Oxley to go ahead with the launch of Viva Vista even as most developers hold back their sales activity this month - the seventh month in the lunar calendar.
Last month, 400 out of 468 units were sold in Hong Leong Group's The Scala, accounting for a quarter of July's total sales volume.
Analysts cited the project's affordable pricing tagged to its mainly small units (around $985,000 for a 839-sq-ft two-bedroom unit) as one of the reasons behind the good showing.
The popularity of shoebox units first spiked in 2009. A study by property consultancy CB Richard Ellis in October 2009 showed that small apartments have become more common.
The firm looked at caveats lodged between January and September 2009 and found that 412 new non-landed residential units measuring 500 sq ft or less had been sold - 38 per cent more than the 299 sold in the whole of 2008.
In 2006 and 2007, 171 and 275 such apartments were sold respectively.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Affordable: The average transacted price of Viva Vista units was $1,450 per square foot, says Oxley Holdings
Over 80% of Viva Vista's shoebox units snapped up
MORE than 80 per cent of the 144 residential units in Oxley Holdings' Viva Vista were snapped up during the project's preview yesterday - indicating that there is still strong demand for small, or shoebox, apartments.
The sizes of the units in the project along South Buona Vista Road range from 323 sq ft to 1,076 sq ft, with the bulk being just shy of 400 sq ft.
Oxley Holdings said that the average transacted price was $1,450 per square foot (psf) while the absolute price started from about $520,000.
The project also has more than 100 commercial units which are yet to be sold.
Market watchers said that affordable and shoebox units continue to be popular with buyers, which could have prompted Oxley to go ahead with the launch of Viva Vista even as most developers hold back their sales activity this month - the seventh month in the lunar calendar.
Last month, 400 out of 468 units were sold in Hong Leong Group's The Scala, accounting for a quarter of July's total sales volume.
Analysts cited the project's affordable pricing tagged to its mainly small units (around $985,000 for a 839-sq-ft two-bedroom unit) as one of the reasons behind the good showing.
The popularity of shoebox units first spiked in 2009. A study by property consultancy CB Richard Ellis in October 2009 showed that small apartments have become more common.
The firm looked at caveats lodged between January and September 2009 and found that 412 new non-landed residential units measuring 500 sq ft or less had been sold - 38 per cent more than the 299 sold in the whole of 2008.
In 2006 and 2007, 171 and 275 such apartments were sold respectively.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Affordable: The average transacted price of Viva Vista units was $1,450 per square foot, says Oxley Holdings
BT : More buyers spend above $1 million on homes
Business Times - 24 Aug 2010
More buyers spend above $1 million on homes
DTZ report shows mainland Chinese buyers closing in on Indonesians
By UMA SHANKARI
MORE private home buyers are paying more than $1 million apiece for a property as prices climbed in the past year, a new report from DTZ shows.
The consultancy's Q2 2010 residential report also said that the share of transactions involving purchasers with HDB addresses has stabilised at around the 34-36 per cent mark in the last three quarters - despite the increase in prices - as these buyers are now supported by the rising HDB resale prices.
And among non-Singaporeans, buyers from mainland China are closing in on Indonesians as the second largest group of non-Singaporean purchasers.
Buyers from Malaysia still made up the largest group of foreign buyers in Q2.
DTZ's report is based on caveats lodged on private home transactions in the primary and secondary markets.
As of August 17, 9,437 caveats were available for analysis.
Buying sentiment cooled in May and June on the back of the European debt woes, local stock market jitters and an increased supply of land from the government land sales programme.
But despite this, the proportion of higher-priced homes that changed hands in the quarter continued to grow in Q2 2010.
The share of purchases for units that are at least $3 million edged higher to 10 per cent of all transactions recorded in the quarter, slightly higher than the 9 per cent in Q1 2010.
Most of the transactions were in the prime districts of 9, 10 and 11.
More buyers also paid more than $1 million each for their new homes.
DTZ's analysis shows that the proportion of purchasers with HDB addresses who bought units of above $1 million stood at 43 per cent in Q2, compared to 36 per cent in Q1 2010.
Similarly, purchasers with private addresses who made purchases of above $1 million climbed to 73 per cent from 69 per cent.
'This shift is due to prices having risen almost 20 per cent since Q3 2009, according to the residential property price index compiled by the Urban Redevelopment Authority,' noted DTZ.
The report also said that 33 per cent of all private units transacted in the quarter were bought by purchasers with HDB addresses - way higher than the 22 per cent seen in 2007 when the property boom was led by the higher-end segment.
In contrast, the current buying wave is mainly in the lower end market segment which is buoyed by rising public housing resale prices - which allows for more HDB upgrader participation.
DTZ's analysis also found that buyers from Malaysia, Indonesia, China and India made up 69 per cent of total transactions by foreigners and Singapore Permanent Resident (SPRs) in Q2 2010.
Malaysians accounted for 22 per cent of total transactions by non-Singaporeans in the quarter, unchanged from Q1 2010.
Historically, the Malaysians and Indonesians have been the two largest non- Singaporean purchaser groups.
But mainland Chinese buyers are closing in on the Indonesians.
Mainland Chinese buyers made up 17 per cent of non-Singaporean purchasers in Q2, slightly lower than the 18 per cent in Q1.
The Indonesians constituted 18 per cent of all non-Singaporean purchasers both in Q1 and Q2 2010.
The Interlace saw the largest number of foreign purchasers in Q2 2010, followed by The Laurels, Centennia Suites, Goodwood Residence and City Square Residences.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
More buyers spend above $1 million on homes
DTZ report shows mainland Chinese buyers closing in on Indonesians
By UMA SHANKARI
MORE private home buyers are paying more than $1 million apiece for a property as prices climbed in the past year, a new report from DTZ shows.
The consultancy's Q2 2010 residential report also said that the share of transactions involving purchasers with HDB addresses has stabilised at around the 34-36 per cent mark in the last three quarters - despite the increase in prices - as these buyers are now supported by the rising HDB resale prices.
And among non-Singaporeans, buyers from mainland China are closing in on Indonesians as the second largest group of non-Singaporean purchasers.
Buyers from Malaysia still made up the largest group of foreign buyers in Q2.
DTZ's report is based on caveats lodged on private home transactions in the primary and secondary markets.
As of August 17, 9,437 caveats were available for analysis.
Buying sentiment cooled in May and June on the back of the European debt woes, local stock market jitters and an increased supply of land from the government land sales programme.
But despite this, the proportion of higher-priced homes that changed hands in the quarter continued to grow in Q2 2010.
The share of purchases for units that are at least $3 million edged higher to 10 per cent of all transactions recorded in the quarter, slightly higher than the 9 per cent in Q1 2010.
Most of the transactions were in the prime districts of 9, 10 and 11.
More buyers also paid more than $1 million each for their new homes.
DTZ's analysis shows that the proportion of purchasers with HDB addresses who bought units of above $1 million stood at 43 per cent in Q2, compared to 36 per cent in Q1 2010.
Similarly, purchasers with private addresses who made purchases of above $1 million climbed to 73 per cent from 69 per cent.
'This shift is due to prices having risen almost 20 per cent since Q3 2009, according to the residential property price index compiled by the Urban Redevelopment Authority,' noted DTZ.
The report also said that 33 per cent of all private units transacted in the quarter were bought by purchasers with HDB addresses - way higher than the 22 per cent seen in 2007 when the property boom was led by the higher-end segment.
In contrast, the current buying wave is mainly in the lower end market segment which is buoyed by rising public housing resale prices - which allows for more HDB upgrader participation.
DTZ's analysis also found that buyers from Malaysia, Indonesia, China and India made up 69 per cent of total transactions by foreigners and Singapore Permanent Resident (SPRs) in Q2 2010.
Malaysians accounted for 22 per cent of total transactions by non-Singaporeans in the quarter, unchanged from Q1 2010.
Historically, the Malaysians and Indonesians have been the two largest non- Singaporean purchaser groups.
But mainland Chinese buyers are closing in on the Indonesians.
Mainland Chinese buyers made up 17 per cent of non-Singaporean purchasers in Q2, slightly lower than the 18 per cent in Q1.
The Indonesians constituted 18 per cent of all non-Singaporean purchasers both in Q1 and Q2 2010.
The Interlace saw the largest number of foreign purchasers in Q2 2010, followed by The Laurels, Centennia Suites, Goodwood Residence and City Square Residences.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Residential sector may lead hike in DC rates
Business Times - 24 Aug 2010
Residential sector may lead hike in DC rates
Marina Bay, Circle Line could give rates a nudge; collective sales may feel fallout
By KALPANA RASHIWALA
(SINGAPORE) Development charges are set to appreciate further, led by the residential sector which has seen brisk land deals. These charges are payable to enhance or intensify the use of some sites.
'The upcoming DC rate revision is likely to be monitored closely by industry players as the extent of revision would indicate the government's assessment of the exuberance of the property market, providing clues on the government's propensity to implement further market cooling measures,' suggests Colliers International director (research and advisory) Tay Huey Ying.
Property consultants suggest that DC rates for non-landed residential use could increase about 10-15 per cent on average from Sept 1. The rate for landed residential use could climb by up to 20 per cent on average. During the last revision effective March 1 this year, the average DC rates for non-landed and landed residential use were upped 8.5 and 12.5 per cent respectively. Commercial, industrial and hotel use DC rates could post modest rises on average.
'Chief Valuer is likely to consider the positive impact generated from the opening of Marina Bay Sands and the improved accessibility from the newly opened MRT stations on the Circle Line in assessing upcoming DC rates,' says Ms Tay.
DTZ's South-east Asia research head Chua Chor Hoon predicts that for residential and commercial DC rates, some of the biggest jumps will be in Sentosa, the prime residential districts and the CBD.
DC rate revisions are also tracked by those involved with redevelopment sites with a sizeable DC payment, including some collective sale sites. 'If the DC rate increases significantly, a developer would typically pay less to the owners, making it harder to transact en bloc sales,' says veteran property consultant Lee Hon Kiun, director of Landmark Property Advisers.
Karamjit Singh, managing director of Credo Real Estate, says that 10 per cent of the en bloc sites his company is working on have a significant DC component of at least 5 per cent of total land value. 'About 30 per cent involve a DC component below 5 per cent of total land value, while the majority 60 per cent don't have any DC.'
DC rates - revised on March 1 and Sept 1 each year - are specified by use groups (such as landed and non-landed residential, commercial and hotels) across 118 geographical sectors throughout Singapore. The review is conducted by the Ministry of National Development in consultation with Chief Valuer, who takes into account current market values.
Colliers' Ms Tay predicts that on average, DC rates for non-landed residential use will rise about 10-15 per cent, with city-fringe locations leading the hikes.
The biggest rise, possibly to the tune of 30 per cent, could be in the geographical sectors containing the Circle Line stations at Mountbatten, Dakota and Macpherson which opened in April, as well as the Fort Road and Kampong Bahru areas.
Ms Tay points to the sale of the freehold Fort Terrace site in March at a unit land price that was 137 per cent above the imputed land value based on the March 1 DC rate for the area. Harbourside Apartments at Kampong Bahru was sold in April at a unit land price 99 per cent above the DC rate-implied land value for the location.
High bids at state tenders for condo sites in places like Simei St 3, Tampines Ave 1/10, Lakeside Drive, Sembawang Road/ Canberra Drive and Yishun Ave 2/7 may also lead to a surge of about 20 per cent in non-landed residential DC rates in these areas, Ms Tay reckons.
Jones Lang LaSalle associate director Desmond Sim predicts the biggest jumps in non-landed residential DC rates of about 20 per cent will be in suburban locations, due to bullish land bids at state tenders. 'In prime districts, the increase could be about 5-10 per cent,' he added.
For landed residential DC rates, Mr Sim forecasts a 15-20 per cent average rise. 'A bigger increase is expected at Sentosa Cove, as well as districts 9, 10 and 15, given the stronger transaction volume and price movements in these areas,' he added. Colliers reckons that on average, the increase will be up to 10 per cent, while CB Richard Ellis executive director Li Hiaw Ho expects gains in sectors with a large proportion of landed homes, citing continued strengthening in prices of such properties.
DTZ's SE Asia research head Chua Chor Hoon sees a bigger jump for landed residential rates than for non-landed residential rates as the landed market has been hot this year due to scarcity value.
Industrial DC rates could be raised up to 10 per cent on average, says Colliers' Ms Tay, citing state land sales of industrial sites at high prices. In addition, JTC Corporation has revised upwards its industrial land rents in most areas by 10-15 per cent from June 1.
For commercial use, the hike in DC rates could average up to 2 per cent. Increases may be in sectors that include Marina Bay Sands as well as the 11 new Circle Line stations, which opened in April. CBRE predicts a 15-20 per cent rise in the rate for Jurong, following the sale of a plot at Jurong Gateway Road at a bullish price in June.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Residential sector may lead hike in DC rates
Marina Bay, Circle Line could give rates a nudge; collective sales may feel fallout
By KALPANA RASHIWALA
(SINGAPORE) Development charges are set to appreciate further, led by the residential sector which has seen brisk land deals. These charges are payable to enhance or intensify the use of some sites.
'The upcoming DC rate revision is likely to be monitored closely by industry players as the extent of revision would indicate the government's assessment of the exuberance of the property market, providing clues on the government's propensity to implement further market cooling measures,' suggests Colliers International director (research and advisory) Tay Huey Ying.
Property consultants suggest that DC rates for non-landed residential use could increase about 10-15 per cent on average from Sept 1. The rate for landed residential use could climb by up to 20 per cent on average. During the last revision effective March 1 this year, the average DC rates for non-landed and landed residential use were upped 8.5 and 12.5 per cent respectively. Commercial, industrial and hotel use DC rates could post modest rises on average.
'Chief Valuer is likely to consider the positive impact generated from the opening of Marina Bay Sands and the improved accessibility from the newly opened MRT stations on the Circle Line in assessing upcoming DC rates,' says Ms Tay.
DTZ's South-east Asia research head Chua Chor Hoon predicts that for residential and commercial DC rates, some of the biggest jumps will be in Sentosa, the prime residential districts and the CBD.
DC rate revisions are also tracked by those involved with redevelopment sites with a sizeable DC payment, including some collective sale sites. 'If the DC rate increases significantly, a developer would typically pay less to the owners, making it harder to transact en bloc sales,' says veteran property consultant Lee Hon Kiun, director of Landmark Property Advisers.
Karamjit Singh, managing director of Credo Real Estate, says that 10 per cent of the en bloc sites his company is working on have a significant DC component of at least 5 per cent of total land value. 'About 30 per cent involve a DC component below 5 per cent of total land value, while the majority 60 per cent don't have any DC.'
DC rates - revised on March 1 and Sept 1 each year - are specified by use groups (such as landed and non-landed residential, commercial and hotels) across 118 geographical sectors throughout Singapore. The review is conducted by the Ministry of National Development in consultation with Chief Valuer, who takes into account current market values.
Colliers' Ms Tay predicts that on average, DC rates for non-landed residential use will rise about 10-15 per cent, with city-fringe locations leading the hikes.
The biggest rise, possibly to the tune of 30 per cent, could be in the geographical sectors containing the Circle Line stations at Mountbatten, Dakota and Macpherson which opened in April, as well as the Fort Road and Kampong Bahru areas.
Ms Tay points to the sale of the freehold Fort Terrace site in March at a unit land price that was 137 per cent above the imputed land value based on the March 1 DC rate for the area. Harbourside Apartments at Kampong Bahru was sold in April at a unit land price 99 per cent above the DC rate-implied land value for the location.
High bids at state tenders for condo sites in places like Simei St 3, Tampines Ave 1/10, Lakeside Drive, Sembawang Road/ Canberra Drive and Yishun Ave 2/7 may also lead to a surge of about 20 per cent in non-landed residential DC rates in these areas, Ms Tay reckons.
Jones Lang LaSalle associate director Desmond Sim predicts the biggest jumps in non-landed residential DC rates of about 20 per cent will be in suburban locations, due to bullish land bids at state tenders. 'In prime districts, the increase could be about 5-10 per cent,' he added.
For landed residential DC rates, Mr Sim forecasts a 15-20 per cent average rise. 'A bigger increase is expected at Sentosa Cove, as well as districts 9, 10 and 15, given the stronger transaction volume and price movements in these areas,' he added. Colliers reckons that on average, the increase will be up to 10 per cent, while CB Richard Ellis executive director Li Hiaw Ho expects gains in sectors with a large proportion of landed homes, citing continued strengthening in prices of such properties.
DTZ's SE Asia research head Chua Chor Hoon sees a bigger jump for landed residential rates than for non-landed residential rates as the landed market has been hot this year due to scarcity value.
Industrial DC rates could be raised up to 10 per cent on average, says Colliers' Ms Tay, citing state land sales of industrial sites at high prices. In addition, JTC Corporation has revised upwards its industrial land rents in most areas by 10-15 per cent from June 1.
For commercial use, the hike in DC rates could average up to 2 per cent. Increases may be in sectors that include Marina Bay Sands as well as the 11 new Circle Line stations, which opened in April. CBRE predicts a 15-20 per cent rise in the rate for Jurong, following the sale of a plot at Jurong Gateway Road at a bullish price in June.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
BT : Mortgage default rates halve in two years
Business Times - 24 Aug 2010
Mortgage default rates halve in two years
Credit bureau cites buoyant property, stable job markets
By MICHELLE QUAH
(SINGAPORE) Mortgage default rates in Singapore have fallen dramatically in the last two years, as a buoyant property market and a stable employment situation helped individuals repay more easily.
According to figures released yesterday by DP Credit Bureau (DPCB), a national consumer credit bureau, the percentage of mortgagors in Singapore that have fallen behind in their repayments has halved over the last two years.
The average rate of default across all age groups fell to 0.43 per cent in March this year - down from the 0.59 per cent in March 2009, and the 0.89 per cent in March 2008.
This means that one in every 233 mortgagors are in default of their payments - down from one in every 112, two years ago.
'The numbers represent an improvement in the property market leading to more positive sentiment,' said Lincoln Teo, general manager of DPCB. 'This indirectly drives better payment behaviour from mortgagors. A home mortgage is the most important loan many people take out during their lives. Typically, one would choose to default on other borrowings and not a mortgage.'
'We have also seen greater consumer awareness on the maintenance of one's credit worthiness and how important it is for securing credit. Over the last two years, the credit bureau has seen a growing number of borrowers being diligent in their loan repayments in order to maintain or improve their credit standing,' he said.
The banks here say their experiences tie in with the data just released by DPCB.
OCBC Bank's chief credit officer of its consumer, group risk division, Joseph Wong, told BT: 'We have seen a general improvement in consumer credit repayments including mortgage repayments.'
DPCB's findings are also in line with recent data on the broader economy. Song Seng Wun, an economist with CIMB Research, notes that petitions for bankruptcy have fallen and should touch a new low this year.
'A lot of it (mortgage servicing) depends on property prices, which have been resilient and on jobs creation growth, which has been fairly buoyant. There should be enough momentum for both of these this year, even if growth in the US and Europe should slow down, which will mean that people's ability to pay off credit spending should be quite strong,' Mr Song said.
It's an observation which DBS Bank's managing director and head, consumer banking group (Singapore), Jeremy Soo, concurred with: 'The combination of (lowered unemployment rates and improved property prices) and a relatively low interest rate environment has resulted in a natural decline of mortgage defaults. DBS also engages our customers actively where needed, to work on their debt repayment, and that helps to lower the delinquency rate and ultimately default of loans.'
And a spokesperson at United Overseas Bank said: 'Mortgage payment defaults have decreased when compared to the same period the previous year, on the back of an improving economy and a lower unemployment rate.'
DPCB's data showed that people aged between 40 and 49 make up the largest proportion of mortgagors, of all the age groups - accounting for 37 per cent of all loans.
It also found that there has been a shift towards younger borrowers, over time - with the percentage of loans given to 21-29 year olds increasing, while those extended to people over 50 is declining.
It also found that the 21-29 year olds - which traditionally have had the highest percentage of defaults on their mortgages - are getting better in meeting their debt obligations. The percentage of defaults for this age group has fallen from 2.2 per cent in March 2008, to 0.42 per cent this year.
Instead, the 50-59 year olds have overtaken 21-29 year olds as the age bracket with the highest percentage of loans in arrears, with 0.62 per cent behind in their payments. DPCB's Mr Teo said: 'One explanation is that when people in this age bracket lose their employment, many find it hard to get another job, placing great pressure on their ability to continue servicing their mortgages.'
The bureau also found that almost half of all mortgage defaults take place between the third and the fifth year of the loan. It said that defaults within the first year of the loan are rare (4.1 per cent), while those between two and three years represent 15 per cent of all defaults. More established loans - those older than five years - account for 31 per cent of the total number of loans in default.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Mortgage default rates halve in two years
Credit bureau cites buoyant property, stable job markets
By MICHELLE QUAH
(SINGAPORE) Mortgage default rates in Singapore have fallen dramatically in the last two years, as a buoyant property market and a stable employment situation helped individuals repay more easily.
According to figures released yesterday by DP Credit Bureau (DPCB), a national consumer credit bureau, the percentage of mortgagors in Singapore that have fallen behind in their repayments has halved over the last two years.
The average rate of default across all age groups fell to 0.43 per cent in March this year - down from the 0.59 per cent in March 2009, and the 0.89 per cent in March 2008.
This means that one in every 233 mortgagors are in default of their payments - down from one in every 112, two years ago.
'The numbers represent an improvement in the property market leading to more positive sentiment,' said Lincoln Teo, general manager of DPCB. 'This indirectly drives better payment behaviour from mortgagors. A home mortgage is the most important loan many people take out during their lives. Typically, one would choose to default on other borrowings and not a mortgage.'
'We have also seen greater consumer awareness on the maintenance of one's credit worthiness and how important it is for securing credit. Over the last two years, the credit bureau has seen a growing number of borrowers being diligent in their loan repayments in order to maintain or improve their credit standing,' he said.
The banks here say their experiences tie in with the data just released by DPCB.
OCBC Bank's chief credit officer of its consumer, group risk division, Joseph Wong, told BT: 'We have seen a general improvement in consumer credit repayments including mortgage repayments.'
DPCB's findings are also in line with recent data on the broader economy. Song Seng Wun, an economist with CIMB Research, notes that petitions for bankruptcy have fallen and should touch a new low this year.
'A lot of it (mortgage servicing) depends on property prices, which have been resilient and on jobs creation growth, which has been fairly buoyant. There should be enough momentum for both of these this year, even if growth in the US and Europe should slow down, which will mean that people's ability to pay off credit spending should be quite strong,' Mr Song said.
It's an observation which DBS Bank's managing director and head, consumer banking group (Singapore), Jeremy Soo, concurred with: 'The combination of (lowered unemployment rates and improved property prices) and a relatively low interest rate environment has resulted in a natural decline of mortgage defaults. DBS also engages our customers actively where needed, to work on their debt repayment, and that helps to lower the delinquency rate and ultimately default of loans.'
And a spokesperson at United Overseas Bank said: 'Mortgage payment defaults have decreased when compared to the same period the previous year, on the back of an improving economy and a lower unemployment rate.'
DPCB's data showed that people aged between 40 and 49 make up the largest proportion of mortgagors, of all the age groups - accounting for 37 per cent of all loans.
It also found that there has been a shift towards younger borrowers, over time - with the percentage of loans given to 21-29 year olds increasing, while those extended to people over 50 is declining.
It also found that the 21-29 year olds - which traditionally have had the highest percentage of defaults on their mortgages - are getting better in meeting their debt obligations. The percentage of defaults for this age group has fallen from 2.2 per cent in March 2008, to 0.42 per cent this year.
Instead, the 50-59 year olds have overtaken 21-29 year olds as the age bracket with the highest percentage of loans in arrears, with 0.62 per cent behind in their payments. DPCB's Mr Teo said: 'One explanation is that when people in this age bracket lose their employment, many find it hard to get another job, placing great pressure on their ability to continue servicing their mortgages.'
The bureau also found that almost half of all mortgage defaults take place between the third and the fifth year of the loan. It said that defaults within the first year of the loan are rare (4.1 per cent), while those between two and three years represent 15 per cent of all defaults. More established loans - those older than five years - account for 31 per cent of the total number of loans in default.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
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