ST Forum : The other story - rogue clients

Sep 28, 2010

The other story - rogue clients

I REFER to the article ("Do your checks before signing the cheques"; Aug 22) and Miss Koh Wee Leng's letter on Sunday ("It can be tough for property agents").

The reality of the business is that it is far from easy to be a successful property agent. Besides needing the skills and tenacity to edge out competition in this highly competitive industry, there are also rogue clients to deal with.

We often hear complaints about rogue agents, yet the total number of complaints is only about 1 to 2 per cent, based on the Consumers Association of Singapore's complaints against the number of HDB transactions.

What people do not often hear about are the clients who make life even more difficult for agents. Those who refuse to pay commission after the deal, not just those who delay payment.

Those who try to renegotiate the commission after the transaction is complete.

Those who engage multiple agents to begin multiple deals, none of which can, therefore, be completed.

Those who take advantage of agents by asking for personal loans to settle their outstanding service and conservancy charges so their flat can be sold, and so on.

The Ministry of National Development is regulating the real estate industry, and rightly so. If only there was a way to regulate those rogue consumers as well.

Adam Tan

Corporate Communications Manager

PropNex Realty

ST : Tougher for investors to apply for PR status

Sep 28, 2010

Tougher for investors to apply for PR status

Minimum investment, turnover levels go up, and houses don't count

By Melissa Kok

FOREIGNERS who want to become Singapore permanent residents (PRs) under a scheme for investors must now meet stricter requirements.

Under new rules for the Global Investor Programme (GIP), they will have to more than double their investments here to $2.5 million.

Their companies must also have an annual turnover of $30 million - up from $10 million previously.

And they will no longer be allowed to count the cost of buying a private home as part of their required investment.

The changes - some of which take effect from this Friday - come on the heels of other measures by the Government to better manage the pace of the growth of immigrants.

The GIP is offered by Contact Singapore, an alliance of the Economic Development Board and the Manpower Ministry.

It was started in 2004 to ease the way for foreign entrepreneurs and businessmen to set up and run businesses here.

A spokesman for Contact Singapore would not say how many investors have become PRs this way.

As for the changes, the spokesman said they were intended 'to fine-tune the criteria and the mode of investment to ensure a higher calibre of investors who are participating in the programme'.

The amendments were announced without fanfare on the Contact Singapore website on Aug 31.

Currently, foreign entrepreneurs and businessmen applying for the GIP must have an annual company turnover of at least $10 million a year, and an average turnover of the same amount for the last three years.

That will be tripled to $30 million from this Friday.

How much they need to invest will also change.

Right now, GIP applicants must invest a minimum of $1 million. From January next year, this will be raised to $2.5 million.

Under current rules, those investing at least $2 million can use up to half the amount on an owner-occupied private home. That option will no longer be available.

Parents and parents-in-law will also be excluded from the main candidate's GIP application for PR status.

Although some of the changes take effect in January, applications received from this Friday will be subject to the new requirements as the average processing time for an application is eight months.

The changes follow the Government's move late last year to tighten the PR and citizenship framework. Those applying for PR status and citizenship now, for example, face more stringent eligibility criteria such as a higher income bar and residential requirements to ensure they can contribute to Singapore economically and also integrate well into society.

The tougher rules seem to have an effect.

Last year, 59,500 foreigners were granted PR status, compared with 79,200 in 2008. The slowdown becomes more apparent when comparing with the figures between April last year and the end of March this year, after the new rules kicked in. During this period, 46,300 foreigners were granted PR status.

The GIP is similar to other government schemes which aim to attract the wealthy by offering PR status. They include the Monetary Authority of Singapore's Financial Investor Scheme, targeted at foreigners with at least $20 million in net personal assets.

Other countries such as New Zealand, Australia and Canada offer similar schemes.

Mr Leong Wai Ho, senior regional economist at Barclays Capital, said the changes would not deter investors from applying for the scheme as most 'definitely will have more than that amount to invest'.

But he added: 'Removing the property option might be detrimental for the property market outlook in the near term, particularly in the top end, but it removes speculative pressure.'

Political observer Eugene Tan of the Singapore Management University said the changes show the Government is addressing the concerns of Singaporeans, particularly those who feel PR status is given away easily.

He said: 'In a way, it is raising the bar, and so that helps enhance the talent pool here.'

melk@sph.com.sg

Additional reporting by Amanda Tan


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Changes to the criteria



CURRENT RULES

1. Applicants with entrepreneurial experience and a business track record must have a company turnover of at least $10 million per annum in the most recent year, and at least $10 million per annum on average for the last three years.

2. In addition, applicants must make an investment. Their options:

· Invest at least $1 million in a new business start-up or expansion of an existing business operation.

· Those who invest at least $1.5 million can also choose to do so in a fund approved by the Global Investor Programme (GIP).

· For those who invest $2 million or more, up to 50 per cent of the amount can be in a private residential property occupied by the applicant.

3. Parents and parents-in-law of applicants are eligible for PR at an additional investment of $300,000 per person.

NEW RULES

From Oct 1, the company turnover requirement will be raised to at least $30 million per annum.

From Jan 1 next year:

· Minimum investment sum will be raised to at least $2.5 million.

· Money spent on residential property will no longer be considered part of the applicant's investments.

· Parents and parents-in-law are no longer eligible to be included in the candidate's GIP application for PR status. They can instead apply for a five-year Long Term Visit Pass, which is renewable and tied to the validity of the main applicant's re-entry permit.

· These changes will apply to all applications received from Oct 1.

ST : Resale home price rises slowing

Sep 28, 2010

Resale home price rises slowing

Sales of new homes also reported to be quiet over weekend

By Joyce Teo



PRICES of private resale homes are continuing to hit record highs, although the pace of increase has generally continued to slow this quarter, according to a report by property consultancy DTZ.

Over the rest of the year, this weakening growth is likely to grind to a halt as recent government measures to cool the residential market take effect, it said.

'Sales volume is expected to be lower as sellers continue to maintain their asking prices while potential buyers hold out for lower prices.'

The DTZ report said resale prices of suburban leasehold homes increased by 2 per cent to $660 psf in this third quarter.

This compares with a 4 per cent rise in the second quarter, which took prices to $648 psf. The 2007 peak for these homes was $615 psf.

In the new homes market last weekend, sales were generally fairly quiet, as buyers may have been distracted by the Singapore Grand Prix, said an industry source.

NV Residences in Pasir Ris sold another 35 units, lifting total sales to 335 out of 380 launched units, said a City Developments Ltd (CDL) spokesman.

It sold 50 units the previous weekend and 90 units over the Hari Raya weekend.

The 642-unit condo had sold 160 units at its Sept 8 preview despite the Aug 30 cooling measures having kicked in by then.

The CDL spokesman said a 'good mix of all types' of homes were sold and that there had been no change in price. CDL had earlier raised the price by 1 to 2 per cent from $830 psf on average.

Over in Leonie Hill Road, Overseas Union Enterprise could not provide a sales update for its 99-year leasehold Twin Peaks project launched about a week ago.

But executive chairman Stephen Riady said he is confident of selling the 462-unit project, where homes are sold on a fully furnished basis.

The firm released 70 units for sale last weekend - the number needed to cover construction costs. It sold half of them, achieving prices of $2,890 psf.

Another 12 units are booked, having been reserved two months ago by buyers wanting to delay their decisions because of the cooling measures, he said.

The DTZ report said resale freehold condo prices in prime districts 9, 10 and 11 rose 1.4 per cent to touch $1,513 psf, slowing from a 2.6 per cent rise in the second quarter as well-heeled investors remained cautious about the growth of major economies in the West.

Still, the price level is already above the previous 2007 record of $1,483 psf.

Luxury condos - the only segment where prices are still just below the 2007 peak - also saw a slower rise, of 1.6 per cent quarter-on-quarter, to $2,630 psf.

The landed homes segment, which has seen robust growth since the second quarter of last year, was not spared the slowdown, DTZ research shows.

Prices of prime freehold landed homes rose by 2 per cent quarter-on-quarter to $1,611 psf, compared with the 3.3 per cent growth clocked up in the second quarter of this year.

Outside the prime districts, landed home prices inched up by 1.7 per cent to $952 psf. But this rise means these prices have, for the first time, surpassed the high of $943 psf recorded during the 1996 boom, DTZ said.

joyceteo@sph.com.sg

ST : Uninhabited isles in Malaysia for sale

Sep 26, 2010

Uninhabited isles in Malaysia for sale

Foreigners invited to form joint ventures with locals or build homes there to spur economy

Osaka - Malaysia welcomes foreigners who wish to buy or develop any of its uninhabited islands as this could help stimulate the country's economy and bring in more tourist dollars.

Foreigners can develop these islands as joint ventures with locals or even build their homes there and make Malaysia their second home, said Tourism Minister Ng Yen Yen. She stressed, however, that state governments would have the final say on such transactions as land is a state matter.

'We are, however, open to this idea. It will help open up our economy and provide more opportunities to Malaysians as well,' she said, adding that there were 1,007 islands around the country with the majority uninhabited.

Dr Ng, on a promotion tour of Japan, was speaking to a group of Japanese investors, travel agents and operators, and airline representatives in Osaka. She said Malaysia enjoyed political stability, was not exposed to natural disasters and was a reasonably cheap place to live in.

The Star/Asia News Network

ST : Er, what is COV?

Sep 26, 2010

FINANCIAL QUOTIENT

Er, what is COV?

Where do you see this?

In articles on HDB resale flats and online or classified advertisements.

What does it mean?

COV is short for cash- over-valuation. It refers to the cash amount that buyers typically pay on top of the valuation of an HDB resale flat. It occurs when buyers choose to pay more than the market value of the flats as determined by an HDB panel of independent professional valuers.

COV payments are not compulsory, though they can be the norm in a booming market.

Why is it important?

It affects the price of a resale flat; it has to be paid upfront in cash as the amount the HDB or the banks will lend is based only on the flat's valuation.

So you want to use the term. Just say...

'I am waiting for COV to drop before I go flat-hunting.'

Joyce Teo

ST : Calls to preserve train station

Sep 26, 2010

Calls to preserve train station

Heritage buffs say Tanjong Pagar site has rich history and must stay open to the public

By Amanda Tan

Now that the land around the Tanjong Pagar railway station has been given to Singapore, the next question is: What should the Government do with the site?

While there are no concrete plans for the station, which sits on prime land, people familiar with the place are calling for it to remain open and accessible to all.

A group is lobbying for it to be turned into a transportation museum, much like how some people wanted to turn the old Collyer Quay into a maritime museum.

Whatever it is, experts and people who have a special attachment to the station feel it should retain some of its old flavour, to honour its historical significance.

Above all, it should remain a public space, one that people from all walks of life can enjoy.

Said Ms Carolyn Seet, 38, who started a petition in July to turn the station into a transportation museum: 'The railway was for everyone - rich or poor, or those who could not afford other means of travel in the past. So we must keep it accessible and not so posh that only a select few can go there.'

The assistant general manager of an IT firm hopes to send her petition to the Prime Minister's Office once she garners 1,000 signatures. She has now collected about 300 online.

She also started a group on social networking site Facebook that now has more than 1,000 followers, many of whom have fond memories of the station. Ms Seet herself rode on the trains on her first trip out of the country almost 30 years ago.

'I feel a sense of loss, with so many of the places I knew as a child gone or demolished. We've lost so much in one generation. If we lose that nostalgia and memories, then we have less to grasp of our past,' said the mother of two young boys.

In a land swop agreement reached last week between Singapore and Malaysia, Malaysia received six land parcels in Marina South and the Ophir-Rochor area in exchange for giving up six Malayan Railway sites in Tanjong Pagar, Kranji, Woodlands and Bukit Timah.

Development of the land around the station will be carried out by M-S Pte Ltd, a 60-40 joint venture between Khazanah Nasional and Temasek Holdings.

Tanjong Pagar station reminds people of an important point in local history, said Dr Chua Ai Lin, a historian at the National University of Singapore (NUS).

'The railway was crucial to our economic development as it was the main mode of transporting key commodities such as tin and rubber from across the peninsula.'

Singapore's port thrived because of the goods the country processed and exported internationally. Trains supported this by being efficient in transporting large volumes of goods, she said.

Dr Lai Chee Kien, an assistant professor at NUS' architecture department who has done research on the railway's history, said the place represents the social relations between Singapore and Malaysia.

'Our connections go beyond politics: We have economic, geographical, historical and social ties,' he said, adding that pre-1965 history has not yet been taught comprehensively to the younger generation.

He hopes the space can be used to help educate the public about this aspect of history.

Heritage buffs also want the building to be gazetted as a national monument. Said Mr Ho Weng Hin, director of Studio Lapis, an architectural conservation specialist consultancy: 'It is great architecturally, historically and socially. Its significance in these three areas is very high,' he said.

The 36-year-old feels the land should be developed holistically because 'the value is in the entire whole'. This includes the greenery along the railway tracks.

Mr Ho also urged developers to consider the environmental impact when deciding what to do with the site.

He has done extensive research on the station for a book he is co-authoring on architecture in Singapore from the 1920s to 1970s. Published by the Singapore Heritage Society, it is expected to be out in stores by the end of next year.

Modelled after great early 20th century train terminals in the United States - in which modern technology was used to create huge spaces - the Tanjong Pagar station was designed by D.S. Petrovich of Swan & McLaren, one of Singapore's earliest architectural firms. It opened in 1932.

'No matter what it becomes, it should not be a place for a limited few,' argued Mr Ho.

'The new use should be meaningful not just to future generations, but to people who identified with the building in the past.'

tamanda@sph.com.sg


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Worthy of preservation

Most will agree that the Tanjong Pagar Railway Station and the railway line are historically significant. Those familiar with the place say there are some important artefacts there. We take a look at what these are, and why they are of value.

Four statues at the front of the station, each with an emblem above and the letters F, M, S and R

FMSR stands for Federated Malay States Railways, as the railway operator was previously called, and refers to the consolidated train operation that allowed for interstate travel. It tells the story of developments in then Malaya - economically, politically and socially.

The railway enabled trade and allowed the British to expand their political clout and economic power from the 1870s to 1930s.

The four statues also represent four economic pillars - agriculture, industry, transport and commerce. They are a powerful statement to all who see that this station has enabled these elements to flourish.

Mr Ho Weng Hin, an architectural conservation specialist and consultant, said art was one way of conveying messages to the public, who were mostly non-literate.

The same message of economic activities is repeated on the murals inside the station.

Murals inside station

Each measuring about 8m by 3m, the murals depict the economic activities of the people of pre-war Singapore and Malaya.

The murals capture scenes such as shipping, agriculture, mining and rubber cultivation.

It is interesting to note, Mr Ho said, that the murals were made of the same material that made Singapore rich - rubber.

Keeping the murals in the same space as the passengers' waiting hall conveys a sense of grandeur, and arrival to Singapore as a principal city in British Malaya, said Mr Ho.

Key token system

The key tokens were exchanged between train drivers or crew whenever they reached a station or intersection. Gaining the key token signified permission to proceed, based on security and traffic conditions.

Introduced in 1885 when the Keretapi Tanah Melayu (KTM) trains first rolled out, the system is still being used in several regions along the trains' routes.

Only the Central route, which includes stops such as Kuala Lumpur, has switched to electronic signalling systems, which are more efficient and require less manpower to handle.

Mr Mohd Fazil Ismail, senior corporate communications manager at KTM Berhad, said the key token system will be fully replaced with the electronic system in the next 10 years.

Push trolleys

Push trolleys were introduced in 1885 and were used by station inspectors daily to check the railway. They used to be pulled by coolies, or general workers of that time.

Last used in the 1960s, they have now been replaced by higher-functioning machines such as the EM20, which monitors track strength, the diesel trolley, and the ultrasonic trolley, which can detect problems with the tracks.

Amanda Tan



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Keep it accessible

'The railway was for everyone - rich or poor, or those who could not afford other means of travel in the past. So we must keep it accessible and not so posh that only a select few can go there.'

MS CAROLYN SEET, 38, who started a petition to turn the station into a transportation museum

ST : HDB rules apply to landbanking

Sep 26, 2010

HDB rules apply to landbanking

Interest in residential land, even if vacant, constitutes ownership of private property

By Esther Teo

Housing Board flat owners who want to invest in land abroad through landbanking companies will now have to think twice before parting with their savings.

The HDB has confirmed with The Sunday Times that they will be caught out by Singapore's new property rules, which state that HDB flat owners are not allowed to concurrently own an HDB flat and private property - local overseas - within the minimum occupation period (MOP).

An interest in residential land, even vacant land, does constitute ownership of private property, the HDB said last Friday.

This means that if a landbanking investor who has a share of residential land buys an HDB resale flat on or after Aug 30, he must dispose of one of those properties within six months of the purchase.

It also means that an HDB flat owner can enter into a landbanking investment that involves residential land only after the MOP of five years.

An HDB owner yet to meet his MOP will therefore need to be careful when investing in landbanking firms, as he might have to dispose of land initially not zoned residential if it later acquires residential zoning.

But the HDB has also acknowledged that there may be small groups of people who require special consideration and is willing to help them.

'The HDB will need to look into the specifics of such cases, and evaluate whether the interest in the land is substantial enough to be considered private property ownership. They can write to us with the necessary documents and details of their appeal,' it said.

Landbanking firms buy large plots of land and subdivide them into smaller parcels to sell to investors.

These firms usually tell investors they can buy undeveloped plots of rural land overseas. When development plans are drawn up, investors are told they can sell their plots to developers who are willing to pay higher prices to secure the land.

For example, Canadian-based Edgeworth Properties, which has about 2,000 Singapore clients, of which about half are HDB flat owners, is offering investors the option to buy 7,260 sq ft - or one-sixth of an acre - of land in Alberta, Canada, for about $15,000.

This plot, however, already has an area structure plan that establishes the general planning framework for future development.

Walton International, a Canadian-based landbanking firm, said it was too early to comment on the effect the new rules would have on its business. But it added that it was discussing the matter with the HDB.

Another landbanking firm, which declined to be named, expects to be unaffected by the new rules.

It said half of its land parcels were sold to developers 'within months' of zoning approvals being obtained. This means that investors exited very soon after a piece of land was zoned residential.

The remainder were fixed-term, fixed-return contracts that would see investors getting their payouts before any homes are built on them.

But while the effect of the HDB's ruling may still be unclear, some landbanking investors are questioning its rationale.

One investor, who wanted to be known only as Mr Lim, said landbanking should be seen as a real estate investment scheme rather than as having an interest in private residential property.

'We are at the very early stages of the real estate life cycle, before even any dwellings are built... It is more of an investment where you get in and then get out. I don't think landbanking should be covered under HDB's rules,' he added.

Mr T.H. Tan, who has been approached to invest in land through landbroking firms in the past, added: 'What happens in six months' time if the private property investment cannot be disposed of, maybe due to a lack of takers? What is the Government going to do to help these people?'

Mr Christopher Tan, chief executive of financial advisory firm Providend, said that with most Singaporeans living in HDB flats, and the investment quantums involved in landbanking not being very large, the majority of landbanking investors could well be HDB dwellers.

He disagreed with the HDB's ruling as it would not help to cool down the property market, but he added: 'This is one more reason for investors to be more cautious when investing in landbanking, since there are even more grey areas and unknowns to navigate now.'

esthert@sph.com.sg

ST : New condos to keep prime rents in check

Sep 26, 2010

property

New condos to keep prime rents in check

Rents at some prime projects already feeling the impact of the new supply of private homes

By Joyce Teo

Some recently-completed prime condominium developments are commanding above-market rents and thus helping to prop up the average rentals in existing prime projects, said a recent report from Jones Lang LaSalle.

But other properties in the central areas as well as those in alternative locations are already feeling the impact of the new supply, it said.

The consultancy's preliminary estimates showed that average prime non-landed residential rents rose 1.1 per cent quarter-on-quarter to $4.65 per sq ft (psf) a month in the third quarter.

Yet, average rentals in popular central areas such as the Central Business District remained unchanged in the third quarter while rentals in the popular East Coast districts slipped 4.3 per cent quarter-on-quarter to $3.30 psf per month.

Overall, the rental market is likely to remain largely flat in the coming months, experts said.

The new prime supply in the market includes projects such as Skypark at St Thomas Walk, Ardmore II in the posh Ardmore Park area and Belle Vue Residences in Oxley Walk.

Jones Lang LaSalle said that from the beginning of this year to last month, about 1,520 new units have been completed in prime districts 9, 10 and 11.

While it is unable to release the deals done due to confidentiality, average rentals around the Ardmore area remain stable at around $18,000 per month (or about $5.50 to $6.50 psf), with some units fetching less due to construction work in the vicinity, it said.

According to OrangeTee head of research and consultancy Tan Kok Keong, the recent completion of projects means that tenants now have more choices.

'As a result, rents at better located projects are holding firm while rents at those that are affected by temporary inconveniences are softening.'

For instance, the asking monthly rent for a unit at Ardmore II was reduced from $14,000 to $11,000 due to the construction noise in the vicinity, he said.

New completions will intensify competition in the leasing market, as better located or newer units will command a rental premium, said Cushman & Wakefield's senior manager of research, Asia Pacific, Mr Ong Kah Seng.

This is especially so as there are more new developments that come with more unusual designs and exclusive lifestyle concepts.

Still, tenants will choose newer premises only if the rental premium is minimal, he said.

'Some slowdown in leasing activity leading to a muted pace of rental recovery is in sync with the moderation in economic recovery,' he said.

While the recent round of cooling measures is targeted at speculators, the leasing market may also see some spillover effect.

'Given that the private residential market will undergo a temporal softening after the slew of government measures, tenants are unlikely to be willing to accept significantly higher asking rents,' said Mr Ong.

Looking further ahead, experts said a substantial upcoming supply of prime homes in the next few years is expected to keep prime rents in check.

As more of these new prime projects come onstream, rents of some older properties are likely to be hit, said Jones Lang LaSalle's head of South-east Asia research Chua Yang Liang.

'Over time, the rental premium in new projects may ease if tenant demand is unable to keep pace with the supply coming onstream,' added Dr Chua.

An estimated 14,000 more units are scheduled for completion from the third quarter to 2015, which translates to around 2,500 units per annum on average or 1.5 times the historical 10-year average of around 1,600 units per annum, he said.

joyceteo@sph.com.sg

ST : Punggol site bids below expectations

Sep 24, 2010

Punggol site bids below expectations

Lower bids suggest cooling measures starting to have impact, say observers

By Jessica Cheam

A PUNGGOL executive condominium site tender closed yesterday with four developers putting in bids below industry expectations.

The highest bid for the Punggol Drive plot was $136.2 million, coming from Qingdao Construction (Singapore) and working out to be $237 per sq ft (psf) - below the anticipated $250 to $290 psf predicted by analysts.

The bid was only 2.2 per cent higher than the second-highest offer of $133.2 million from Hoi Hup Realty, Sunway Developments and SC Wong Holdings.

SLP International research and consultancy executive director Nicholas Mak noted that Qingdao's bidding price was 23 per cent lower than the amount paid by ChoiceHomes Investments and CEL Development for another exec condo site in Punggol Field earlier in June.

Industry observers say the tender results suggest that the Government's supply-side measures to cool Singapore's red-hot property market are beginning to have an impact on land prices.

For the second half of the year, the state has earmarked the largest potential amount of land for release since the start of the land sales programme in 2001.

This, together with government measures introduced last month to dampen demand by tightening financing and home ownership rules, appear to be lowering land prices, said Mr Mak.

'This could lead to more price competition among developers next year,' he added.

'Whether this would (eventually) lead to lower home prices will depend on whether the investment and economic climate at that time will be worse than that experienced today.'

ChoiceHomes Investments and CEL Development put in the third-highest bid for the site tender that closed yesterday - $119.9 million - with Frasers Centrepoint coming in last at $103.4 million.

CBRE Research executive director Li Hiaw Ho said that the plot had received a 'fair response' and that the modest number of bids reflected the location, which is some distance from Punggol Central.

He predicted that the units in the new exec condo project 'will possibly sell at around $600 psf'.

Similar homes sold in the resale market, such as those at Park Green, The Rivervale and The Florida, were commanding prices of $550 to $650 psf between June and last month, he noted.

Mr Li felt that the project will likely appeal to young couples and those with young families, given the Government's plans to develop Punggol New Town into a residential estate with mostly waterfront housing.

In a separate statement issued yesterday, CBRE executive director of residential services Joseph Tan said rising home prices were likely to be capped by the recent cooling measures.

'We expect the residential market to mellow in the fourth quarter of this year,' he said.

Mr Tan also noted that about 3,300 to 3,500 new homes were sold in the third quarter. Despite being a strong volume, this was considerably lower than the 4,033 and 4,380 units sold in the second and first quarters respectively.

'Projects with strong location attributes and projects with small-format units continued to be the star performers,' he said.

Projects expected to be launched in the near future include Vacanza @ East in Lengkong Tujoh, and executive condominiums Esparina Residences in Compassvale Bow and The Canopy in Yishun.

Mr Tan anticipates the volume of new homes sales in the fourth quarter to be lower than in previous quarters, at around 2,000 units.

'Developers will continue to look for development sites but will likely be less bullish in their bids,' he added.

jcheam@sph.com.sg


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Four bids

· Qingdao Construction (Singapore):
$136.17 million ($2,550.96 per sq m/gross floor area)

· Hoi Hup Realty, Sunway Developments and SC Wong Holdings
$133.21 million ($2,495.50psm/gfa)

· ChoiceHomes Investments/CEL Development
$119.88 million ($2,245.78psm/gfa)

· Frasers Centrepoint
$103.43 million ($1,937.59psm/gfa)

SOURCE: HDB

ST : Demand 'set to push up prime office rents'

Sep 24, 2010

Demand 'set to push up prime office rents'

No fear of oversupply, say Credit Suisse analysts who see office Reits as a good buy

By Gabriel Chen

CREDIT Suisse has dismissed fears of an oversupply in the office sector and is tipping that rents will rise as demand picks up.

The bank's analysts said new space is being taken up, while old supply is being removed from the market and converted into residential use.

'We think rents are on the rise and could hit $12 per sq ft (psf) by 2012 for Super Prime A. Meanwhile, we expect Grade A rents to trend up to $10.50 to $11.50 psf, and prime buildings such as Bugis Junction Towers and Suntec to hit the $9 psf level in 2012.'

There is no official grading system for office space, but Grade A typically refers to the most premium category. For CB

Richard Ellis, offices that lie within the Raffles Place, Marina Bay and Marina Centre area are classified as prime. Credit Suisse splits Grade A into two categories - normal Grade A and Super Prime A.

Falling under Super Prime A are new or soon-to-be-completed buildings such as One Raffles Quay, Marina Bay Financial Centre, Ocean Financial Centre and 50 Collyer Quay.

Normal Grade A refers to older but strategically located buildings such as 6 Battery Road, Capital Tower and Prudential Tower.

Suntec City, Keppel Tower, GE Tower and Bugis Junction Tower have been categorised under Prime, which refers to older buildings that fall inside the central business district.

The Credit Suisse report noted that rents for Super Prime A hit a peak of $18.40 psf a month in the third quarter of 2008.

Analysts from across the sector say the rental outlook is favourable as office demand is expected to grow in step with the economy.

'With rental values on the rebound, larger occupiers are anxious to lock in rents for prime office space. This has led to strong pre-commitment rates for uncompleted office buildings like Ocean Financial Centre,' said Ms Cheng Siow Ying, DTZ Debenham Tie Leung's executive director for business space.

DTZ Research said the office market has rebounded, with rents rising in all districts in the third quarter.

It added that prime rents in Raffles Place rose 6.3 per cent quarter-on-quarter to an average of $8.40 psf.

Investors keen on the sector should look at office real estate investment trusts (Reits) because they have the greatest exposure to Grade A space, say Credit Suisse analysts.

When rents increase, so should the unit prices of these Reits.

The bank's top pick in the office Reit sector is CapitaCommercial Trust (CCT). It has an 'outperform' rating on the Reit and a target price of $1.63.

'We believe its $750 million war chest is likely to be reinvested into higher-yielding opportunities,' said the bank.

CCT closed eight cents higher yesterday at $1.48.

gabrielc@sph.com.sg

ST : Land use to be reviewed in Concept Plan

Sep 24, 2010

KTM SITES

Land use to be reviewed in Concept Plan

THE future use of the land parcel at Tanjong Pagar railway station as well as the other five plots involved in the historical land swop with Malaysia are to be reviewed under the Urban Redevelopment Authority's Concept Plan next year.

The National Development Ministry has announced that the future use of the plots 'will be reviewed under the URA Concept Plan and Master Plan exercises, and the land parcels will be put to optimal use'.

Next year, URA is due to review its Concept Plan, which maps out Singapore's land use strategies over the next 40 to 50 years and is re-examined every 10 years.

And its Master Plan, which is reviewed every five years and translates the long-term strategies of the Concept Plan into detailed plans over the next 10 to 15 years, is scheduled for reappraisal in 2013.

The land swop deal inked on Monday resulted in Singapore and Malaysia agreeing to swop six parcels in Marina South and the Ophir-Rochor area for six Malayan railway (KTM) sites in Tanjong Pagar, Kranji, Woodlands and Bukit Timah.

Although the developments likely on these sites are uncertain at this stage, a recent Nomura Singapore report suggests that the deal is likely to benefit United Overseas Land (UOL) and Keppel Land as both companies have assets in the areas involved.

It cites Keppel Land as an obvious beneficiary of the development of the Marina South parcels because of its stakes in the upcoming Marina Bay Financial Centre and the Ocean Financial Centre in the Marina Bay area.

But UOL is tipped by Nomura as being the top beneficiary, given that it offers comprehensive exposure to the Rochor and Tanjong Pagar make-over - its new Spottiswoode Park residential project is just behind the Tanjong Pagar railway station.

UOL, which is currently readying its showflat, expects to launch the project by the end of the year.

Although URA's plans for Tanjong Pagar will not be announced before the launch of UOL's project, Nomura expects the potential of the railway station's redevelopment to be reflected in both prices and buyer expectations.

According to the 2008 master plan, a portion of the Tanjong Pagar railway station land parcel is zoned for commercial use with a plot ratio of 4.2, while a large chunk of it is zoned for residential use with a plot ratio of 2.8.

The rejuvenation of the Rochor district, notes Nomura, bodes well for two assets there that UOL has indirect stakes in: The Plaza and The Gateway.

And the development of the Ophir-Rochor land parcels and URA's plans are likely to help rejuvenate Rochor and Tanjong Pagar respectively.

'We believe assets in these areas could see more potential upside versus those in the Marina Bay area, as the latter is already regarded as the new Downtown (with the completion of the Marina Bay Sands and the upcoming MBFC development) and asset values have appreciated accordingly,' Nomura said.

JOYCE TEO


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ROCHOR BOOM

'We believe assets in these areas could see more potential upside versus those in the Marina Bay area, as the latter is already regarded as the new Downtown...and asset values have appreciated accordingly.'

Nomura Singapore report