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Wednesday, June 23, 2010

ST : Land-swop deal to be finalised in 3 months

Jun 23, 2010

Land-swop deal to be finalised in 3 months

Singapore, Malaysia PMs to meet again after studying matter further

By Jeremy Au Yong

PUTRAJAYA: The prime ministers of Singapore and Malaysia will meet again in three months' time to finalise details of a land swop deal linked to Malayan Railway land in Singapore.

Prime Minister Lee Hsien Loong and his Malaysian counterpart, Datuk Seri Najib Razak, emerged from an hour-long meeting here yesterday to announce that both sides were going to study the matter further before finalising the deal.

Both leaders stressed that they wanted to see the matter through.

'It is something we want to clear expeditiously. Three months means the end of September, it will be soon after Hari Raya Aidilfitri. I think that is a good moment to have a final settlement of this matter,' said Mr Lee at the joint press conference.

Mr Najib, in turn, said he was looking forward to going to Singapore for the 'final resolution' of the matter.

The land swop is the only outstanding issue left unresolved on the contentious Points of Agreement (POA) signed in 1990.

If both countries can find common ground in the next three months, it would mean closure on one of the oldest bilateral issues dogging Singapore-Malaysia ties.

The first breakthrough in negotiations came at a retreat in Singapore last month when both sides agreed to, among other things, move the existing railway station in Tanjong Pagar to Woodlands by July next year.

The railway land left behind could then be jointly developed by both countries, or it could be returned to Singapore and land of equivalent value elsewhere jointly developed instead.

National Development Minister Mah Bow Tan was in Kuala Lumpur last week presenting details of land parcels that Singapore is offering in the swop. These are in the Marina South and the Rochor/Ophir areas. Various combinations were offered to Malaysia.

Mr Lee said yesterday that Malaysia had certain comments on the land parcels, which Singapore will consider over the next three months.

Underlining the enormity of the swop involved, he said: 'This is a major decision. Malaysia will think it over further, and Singapore will take back the comments which Malaysia has made and consider them.'

Officials from both sides are likely to be meeting to fine-tune the proposal in the next three months.

Yesterday, both sides declined to elaborate on the elements of the land swop.

POA aside, the two also agreed to lower toll charges at the Second Link by 30 per cent from Aug 1.

The highway, linking Tuas to Johor, is currently underused as toll charges are substantially higher than those at the Causeway.

Both prime ministers spoke affirmatively of their discussion, with Mr Lee calling it a 'useful exchange' and Mr Najib saying it was very warm and positive.

Said Mr Najib: 'I thank PM Lee for being as flexible as possible with the intention that there will be a final resolution of the POA.'

He hosted dinner last night for Mr Lee and the Singapore delegation.

The Singapore team included three ministers: Mr Mah, Foreign Minister George Yeo and Law Minister K. Shanmugam.

Mr Lee returned to Singapore late last night.

Political observers interviewed yesterday were optimistic that despite the delay, a final resolution would be reached.

Former Nominated MP Zulkifli Baharudin said it was an achievement that talks had progressed so far.

'Most of the principles of the agreement have been carved out. What's left is probably the basis and the quantum of the valuation (of the land parcels),' he said.

Mr Manu Bhaskaran, a council member of the Singapore Institute of International Affairs, was similarly hopeful that an agreement could be reached.

He said: 'There are strong and compelling reasons for both countries to set aside their differences and show the world that we have moved on from the period of ill-tempered differences to one where we can resolve issues in a sensible and mutually beneficial manner.'

jeremyau@sph.com.sg



Malaysian Prime Minister Najib Razak receiving PM Lee Hsien Loong at the Prime Minister's Office in Putrajaya yesterday. The two leaders announced that Malaysia and Singapore were going to study the land swop deal further before finalising it. -- PHOTO: AGENCE FRANCE-PRESSE

ST : DBSS site near Tampines Town Centre up for tender

Jun 23, 2010

DBSS site near Tampines Town Centre up for tender

Located 600m from MRT station, it could add 580 units to housing stock

By Joyce Teo

THE Housing and Development Board has launched a site near Tampines Town Centre for sale under its design, build and sell scheme (DBSS).

A project to be built on the land in Tampines Avenue 5 could add about 580 units to the housing stock.

The site, which is adjacent to Singapore's first DBSS project, The Premiere @ Tampines, has a maximum allowable gross floor area of 63,395 sq m, including 1,060 sq m for social and commercial facilities. DBSS projects allow private developers to design, build and sell the homes directly to buyers.

As with HDB flats, the units have 99-year leases and are sold subject to Housing Board rules. Also, 95 per cent of the flat supply is set aside for first-time buyers.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the Tampines tender may draw up to seven bidders with offers between $160 and $200 per sq ft per plot ratio. At these prices, the breakeven cost would be about $400 to $450 psf, he said.

It is about 600m from Tampines MRT station and town centre, making it one of the more attractive DBSS plots, he said.

But he believes developers 'should rationally not be too bullish' as the Government will launch two more DBSS sites later this year.These sites are at Bedok Reservoir Crescent and at Upper Serangoon Road. Each will yield about 1,010 units.

More sites for DBSS developments will be made available if there is sustained demand, the HDB said yesterday.

The Tampines tender closes on Aug 3.

Meanwhile, the Urban Redevelopment Authority (URA) has made a hotel site at the junction of Robinson Road and Boon Tat Street available for application. The site includes an 82-year-old neo-classical conservation building, the Ogilvy Centre.

Tenderers can bid for the site on either a 30- or 60-year lease term. The shorter lease term can help lower upfront investment costs, said the URA.

joyceteo@Sph.com.sg

ST : Big and beautiful Punggol

Jun 23, 2010

Big and beautiful Punggol

Transformed estate may have 35,000 flats, about as many as Toa Payoh

By Hoe Pei Shan

PUNGGOL is set to become as big as Toa Payoh.

The remaking of the coastal town is on track, and the crown jewel of the estate, the first waterfront public housing development in the country, will be launched for sale next week.

Giving an update on the makeover yesterday at a Housing Board exhibition, Senior Minister of State for National Development Grace Fu said that by 2015, there could be 35,000 flats in the estate, up from the current 18,000 residential units already built. This is on a par with the number of homes in Toa Payoh, based on HDB's annual report last year.

Jointly designed by international architectural firm Group8asia and local firm Aedas, the first batch of Punggol waterfront flats will sport solar panels and rooftop gardens, among other green initiatives.

The area will also soon welcome a new town centre, where the first mixed commercial and residential development site will be launched in the second half of this year.

A 4.2km waterway running through the heart of the neighbourhood, that connects Sungei Punggol and Sungei Serangoon, is also estimated for completion by the end of the year.

Adding a little touch of Punggol's seafaring past, parts of the waterway and promenade will feature sandy coasts.

Other highlights include a sports activities area and horse riding centre that will be up and running by the year end.

Ms Fu said the array of facilities on offer makes the estate part of 'a premium housing project that targets a niche group of buyers who are prepared to pay more for its signature attributes'.

When asked about the prices of such luxury public housing, an HDB spokesman said that prices will be revealed only during next week's launch.

But realtor PropNex told The Straits Times that the first batch of waterfront flats would, on average, probably fetch around $350,000 for a four-room flat and $400,000 for a five-room flat.

These figures are based on estimates without information on the range of flat sizes, but taking into consideration the various views corresponding to unit location. According to the designs, about 80 per cent of the flats in the first phase of the project will command waterfront views.

PropNex's analysis found that these prices are still lower than the median re-sale price tags for Punggol flats, which currently stand at $369,000 for a four-room flat and $430,000 for a five-roomer, according to data from the first quarter of this year.

One home buyer keen to take to Punggol's waterways is Mr Wu Da Wu, 35, who took a day off work to view yesterday's exhibition.

'It looks great, and with the surrounding water, it's very soothing - I wouldn't mind paying a little more for a home that is different from anywhere else at this price.'

Speaking of how the Punggol project is changing the face of Singapore's housing estates, Ms Fu said: 'They mark an important milestone in HDB's town planning and the evolution of public housing design.

hpeishan@sph.com.sg

ST : Harder for Reits to find good property

Jun 23, 2010

Harder for Reits to find good property

THE global recovery is making it easier to raise money for real estate investment trusts (Reits) but harder to find good properties to buy, according to industry experts.

They said the credit crunch affected many Reits over the past two years but the market is starting to recover as money flows back to rapidly growing Asia.

The difficulty now is locating attractive properties to buy. There is 'a lot of money but few big assets' in Asia, said Ascendas Funds Management chief executive Tan Ser Ping.

Reits invest in a variety of properties from industrial factories and warehouses to office buildings and shopping malls.

But office buildings are expensive to build while rents in Singapore and Shanghai are experiencing a slow recovery, said Mr Ng Beng Tiong, the chief executive of ARA Managers (Asia Dragon), which manages the ARA Asia Dragon Fund. Industrial spaces are more attractive, he added.

Mr Ng said he expects China to have 'high growth rates for many years' with investment in retail space poised to surge as domestic spending rises. He and Mr Tan were speaking at the 2010 Asian Real Estate School & Symposium, organised by the Sim Kee Boon Institute for Financial Economics and held at the Singapore Management University on Monday.

Singapore is Asia's third largest Reit market after Japan and Australia, with more than 20 listed Reits.

ST : US existing home sales down 2.2% in May

Jun 23, 2010

US existing home sales down 2.2% in May

WASHINGTON: Sales of existing homes in the US fell 2.2 per cent in May after two consecutive rises, an industry group said yesterday, despite support from a government tax incentive programme.

The National Association of Realtors (NAR) said that existing home sales dropped to an annual rate of 5.66 million units, from an upwardly revised surge of 5.79 million units in April.

Most analysts had expected sales to rise to 6.10 million units as homebuyers raced to close contracts under a federal tax incentive programme.

'Although the data can be volatile, the homebuyer tax credit seems to have run out of steam early,' said Ms Celia Chen at Moody's Economy.com. The report 'suggests that there may be greater fundamental weakness in housing demand than anticipated', she added.

The Dow Jones Industrial Average lost ground after the news but rose again. It was 30.15 points higher at 10,472.56 after two hours of trade.

Existing home sales last month were 19.2 per cent above their level in May last year as the housing sector slowly stabilises after the collapse of a real estate bubble caused a mortgage meltdown that sparked a global financial crisis in mid-2007.

'We are witnessing the ongoing effects of the homebuyer tax credit,' said Mr Lawrence Yun, NAR's chief economist.

The government reported last week that new housing construction in the United States slumped 10 per cent in May to its lowest level since October 2009.

NAR said it was supporting Senate amendments to extend the homebuyer tax credit closing deadline through Sept 30 and to renew a national flood insurance programme.

'Sales and related local economic activity would have been higher without delays in the closing process or flood insurance issues,' Mr Yun noted.

'The tax credit undoubtedly pulled into the spring transactions which would have taken place in the summer, so the next few months will be tough,' said Mr Ian Shepherdson, chief US economist at High Frequency Economics.

AGENCE FRANCE-PRESSE

BT : Funding rethink for developers after crisis

Business Times - 23 Jun 2010

Funding rethink for developers after crisis

By UMA SHANKARI

THE global financial crisis made CapitaLand rethink its strategy for funding expansion, the property group's chief investment officer Wen Khai Meng said yesterday.

CapitaLand learned that it cannot count on just the capital markets for finance after those markets froze during the crisis, Mr Wen said.

So the developer is now looking at alternative forms of funds - especially private equity - for its growth needs, he said.

Speaking during a panel discussion at the Real Estate Investment World Asia conference on the lessons that real estate developers picked up from the crisis, he also said that it brought home the need to diversify - geographically and among its various business units.

CapitaLand will continue to maintain a good balance among its various income streams - income from property trading, which involves building and selling homes, as well as recurring income from its investment assets and fund management activities, he said.

Other developers echoed the view that the crisis made them re-evaluate their financing needs.

'The lesson we took out of that (the crisis) is to make sure we have sufficient liquidity and sufficient reserves,' said Thio Gim Hock, chief executive of Overseas Union Enterprise (OUE). When the crisis hit, OUE often had to go back to the table to negotiate bank loans as it delayed property launches and construction work. Banks were eventually willing to offer fresh loans after considering the new time frame - but at much higher interest rates.

And so like CapitaLand, OUE is looking to diversify its sources of funding. Mr Thio said that the company is now looking beyond bank loans, to instruments such as convertible bonds. OUE this month scrapped plans to issue up to $200 million dollars of convertible bonds, citing market conditions.

The local hotel and property group is also looking to diversify its income base. Mr Thio said that it would like to get as much as 60 per cent of its income from investment assets eventually.

Most representatives on the panel also admitted that they missed opportunities during the financial crisis. 'We were hoping to pick up some bargains, but before we knew it, it (the crisis) was all over,' said Mr Wen.

Mr Thio said he identified some good opportunities during the crunch but could not secure finance to take advantage of them.

Donald Choi, managing director of Hong Kong's Nan Fung Development, who was also a panellist, similarly said that his company should have been more aggressive, as the window of opportunity was very short.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Asian non-listed property funds back in the buzz

Business Times - 23 Jun 2010

Asian non-listed property funds back in the buzz

A SURVEY of organisations active in the Asian non-listed real estate funds market has found that 63 per cent of investors plan to increase allocations to Asian non-listed real estate funds.

The proportion is still lower than the 88 per cent that were planning to increase allocations in a similar survey done in 2008, but shows a sharp uptrend from 2009's figures. Last year, just 24 per cent of respondents were planning to increase their allocations.

Findings from the survey, which was by Asian Association for Investors in Non-listed Real Estate Vehicles or Anrev, were released yesterday at the Real Estate Investment World Asia conference. The 75 respondents were either investors, fund managers or fund of funds managers.

Anrev's numbers show that as at end-2009, Asian real estate allocations accounted for 4.1 per cent of investors' global portfolio on average, with a further 9 per cent allocated to non-Asian real estate investments. The survey also found that the lack of transparency and market information continues to be the single biggest challenge faced by 74 per cent of investors surveyed when investing in Asian non-listed property funds - a view also shared by 63 per cent of fund managers surveyed.

China's retail and residential sectors were selected by the highest proportion of investors (47 per cent) as markets that offer the most appealing performance prospects. Around 21 per cent of investors also picked Australia's retail market and Vietnam's residential market, making them the second most preferred markets in Asia.

Around 37 per cent of investors are of the view that there are not enough non-listed property vehicles suitable for investment in their favoured Asian markets. However, only 13 per cent of fund managers and fund of funds managers share the same opinion.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Property players may gain from yuan push

Business Times - 23 Jun 2010

Property players may gain from yuan push

But commodity markets are unlikely to join the ride, say analysts

By JAMIE LEE

(SINGAPORE) Property developers in Singapore and Asia could benefit if China nudges its currency up, as Chinese consumers snap up real estate overseas with a stronger yuan in hand.

But there is less positive reading on the commodities market - which reacted to China's currency reform with a sharp price jump - as analysts note that an appreciation of the yuan might not boost demand for commodity imports ahead.

Over the weekend, China said that it would make the currency more flexible by getting rid of its 23-month peg to the US dollar, though it firmly ruled out a one-off revaluation.

But the knee-jerk reaction seen on Asian markets on Monday gave way to a region-wide sell-off yesterday, as temporary amnesia over Europe's debt problems vanished overnight.

The Hang Seng Index dipped 0.45 per cent, the Straits Times Index lost 0.46 per cent, the Nikkei 225 slid 1.2 per cent, and the Shanghai Composite gained just 0.1 per cent.

Analysts were not surprised by the latest reform on the yuan, saying that the move could help to curb a build-up in the asset bubble, and are now expecting a mild yuan appreciation in the second-half of the year.

DBS economists expect the currency to appreciate by as much as 2 per cent this year, on the back of an uncertain global economic outlook and debt issues surrounding the eurozone.

Singapore property firms such as CapitaLand - which has about 35 per cent of its revised net asset value coming from China - should gain from a revaluation of China assets and stronger Chinese interest in properties here, said a Citi Investment Research note.

DMG & Partners Securities also noted that property developers such as SC Global and Wing Tai would win from greater demand in high-end properties.

Some analysts have also turned sanguine on commodity plays on hopes that a stronger yuan would lift demand for resources.

'Commodity prices were strongly correlated with the last yuan appreciation episode in 2005- 2008,' said Citi, which sieved out Singapore listings Golden Agri Resources and Indofood Agri Resources as its top picks for the region.

But HSBC's China economist Qu Hongbin said in a report that since this currency reform was pitched at resuming flexibility, there will be no 'meaningful impact' on Chinese demand for commodities.

An RBS report also noted that a modest increase in the purchasing power of the yuan is unlikely to cause a sharp rise in Chinese commodity imports.

'Most hard commodities have traded in a more than 20 per cent range in the past few weeks and intra-day moves for the exchange traded commodities of 3-5 per cent,' the RBS report yesterday said.

'Against an uncertain macro backdrop, we believe it is unlikely that modest and gradual yuan revaluation would provide the catalyst for significant commodity price gains in 2010.'

Other beneficiaries include Chinese banks. Morgan Stanley raised its positions in ICBC and Bank of China to overweight the banking sector, on hopes that a less aggressive stance in tightening measures in China should prompt better loans growth over the next six months.

The impact on Singapore equities is mixed, since some companies here may only benefit from the forex translation, and not operational gain, Yeo Kee Yan, vice-president of DBS Vickers Group Research, told BT.

Because S-chips such as Midas Holdings and China Animal Healthcare have all its revenue exposure in yuan, their net profit should improve by as much as the extent of yuan strengthening, DBS said.

But companies such as Broadway Industrial and Yangzijiang Shipbuilding could see a negative impact, said DMG's report.

Broadway's accounts receivables are mostly denominated in the US dollar, which means the company could see higher staff costs. This currently accounts for up to 20 per cent of its cost of goods sold.

As for Yangzijiang, there could be marginal impact from a stronger yuan against the US dollar because its contract revenue is set in US dollars.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Well in hand: CapitaLand - which has about 35 per cent of its revised net asset value coming from China - should gain from a revaluation of China assets and stronger Chinese interest in properties here

BT : Downtown retail rents ease in Q2: DTZ

Business Times - 23 Jun 2010

Downtown retail rents ease in Q2: DTZ

By EMILYN YAP

LANDLORDS of retail space located in the city had little to cheer about in the second quarter.

According to a DTZ report yesterday, retail rents at Orchard Road and Scotts Road stayed flat, while those in other areas downtown fell slightly as more space came onstream.

The property consultancy found gross rents of prime first-storey space in the city outside Orchard Road and Scotts Road dipping 0.4 per cent quarter-on-quarter to $24.30 per sq ft per month (psf pm). Upper-storey rents in the same areas slipped 0.7 per cent to $13.90 psf pm.

The emergence of more retail space contributed to this. Over 815,000 sq ft of space was completed in the city outside Orchard Road and Scotts Road in Q2, DTZ said. The Shoppes at Marina Bay Sands accounted for most of this.

At Orchard Road and Scotts Road, prime first-storey rents remained at $39.70 psf pm in Q2, unchanged from the previous quarter. Upper-storey rents also stayed at $20.50 psf pm.

'Competition in the Orchard/ Scotts Road and other city areas has intensified' and consumers have become more selective with the increased range of retail choices, said DTZ associate director of retail Anna Lee.

'Retailers, particularly in the newer malls, are adjusting to the vagaries of consumer preferences, resulting in early termination of leases in some cases.'

The consultancy's longer term outlook for retail rents at Orchard Road and Scotts Road is brighter. Its South-east Asia research head Chua Chor Hoon said that with 'a limited amount of retail space' expected in that area in the next two years, rentals could 'trend gently upwards'.

Landlords of retail space in suburban malls had an easier time in Q2. Rents of prime first- storey space inched up by 0.3 per cent from a quarter ago to $33.60 psf pm, and those of upper-storey space rose 0.4 per cent to $22.90 psf pm.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : HDB concession loans used for downsizing

Business Times - 23 Jun 2010

HDB concession loans used for downsizing

By EMILYN YAP

(SINGAPORE) More than 1,200 public flat owners have made use of a recent rule relaxation to obtain a second concessionary loan from the Housing & Development Board, hoping to move to a smaller or similar-size flat.

But although more have turned to the government to borrow, some private financial institutions say that this has had little effect on their HDB loan business.

Before the policy change, only households moving to larger flats could apply for a second concessionary loan. But HDB found that this may have inadvertently led some to upgrade at the risk of straining their finances.

To encourage greater financial prudence, HDB revised its policy on March 5 and made the second concessionary loan available to all eligible households, regardless of whether they upgrade, down-size or move to a flat of the same size.

HDB told The Business Times that up to May 31, it had received 5,494 applications for second concessionary loans, and approved 2,439 of them.

More than half of the 2,439 successful applicants indicated that they were moving to a smaller or same-sized flat. They would not have been eligible for such loans under the previous policy. HDB did not give an exact number for these applicants.

Had the rule not been changed, would these 1,200-plus applicants have had to turn to banks to borrow?

Not necessarily so, says HDB. 'We should not assume this is the number of bank loans reduced for HDB flats,' it said, suggesting that some applicants might not have considered moving to smaller or similar-sized flats at all if they did not qualify for a second concessionary loan.

Financial institutions that BT contacted said that they have noticed little change to their HDB business. 'We have not seen a significant impact on the number of applications for HDB home loans,' said OCBC Bank's head of consumer secured lending, Phang Lah Hwa.

And a Hong Leong Finance spokesman said: 'There is still strong demand for HDB home loans, as a good number of home owners are either new purchasers or seeking refinancing.

'We offer very competitive HDB loan packages, which we believe is one of the primary factors customers take into consideration when selecting a package.'

ERA Asia-Pacific associate director Eugene Lim said that HDB's concessionary loans are attractive to many people because they charge an interest rate that is almost fixed, pegged at 0.1 percentage point above the CPF Ordinary Account interest rate of 2.5 per cent.

But some flat owners might still go for bank finance to avoid restrictions that come with HDB's second concessionary loan, he said.

For instance, as part of the policy change in March, those who sell their flats and apply for a second concessionary loan can keep only the greater of $25,000 or half the cash proceeds from the sale. They have to use the remaining cash and CPF balance to finance the purchase of their next flat.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



HDB living: More than half of the 2,439 successful loan applicants indicated that they were moving to a smaller or same-sized flat

BT : Tampines DBSS site up for tender

Business Times - 23 Jun 2010

Tampines DBSS site up for tender

By EMILYN YAP

THE Housing and Development Board (HDB) is putting a public housing site in Tampines up for tender today and market watchers expect developers to show a fair bit of interest in it.

The plot at Tampines Avenue 5/Central 8 comes under the Design, Build and Sell Scheme (DBSS), which gives private developers a chance to undertake the design, pricing and sale of flats. DBSS flats come with a 99-year lease and buyers have to meet criteria set by HDB.

The 103-year land parcel measures 227,460 sq ft and has a maximum allowable gross floor area of 682,379 sq ft. It can accommodate an estimated 580 units.

The site is near the Tampines town centre, MRT station and bus interchange. It is also near amenities such as Tampines Mall, a sports hall and a swimming complex. The tender for the plot will close on Aug 3 at 12 noon.

'The site is in a very desirable location with all conveniences within walking distance,' said DTZ South- east Asia research head Chua Chor Hoon.

'It will attract many applicants. Hence the bidding for the land is expected to be competitive.'

Ngee Ann Polytechnic real estate lecturer Nicholas Mak also found the site's location attractive and expects to see four to seven bidders, some of which could be contractors cum developers.

But with more DBSS sites coming onstream later this year, the bids for this site at Tampines 'should rationally not be too bullish', he said.

Mr Mak projects that the land price could range from $160-200 per sq ft (psf) per plot ratio, leading to a breakeven cost of $400- 450 psf.

The site is next to another DBSS project, The Premiere@Tampines, which is fully sold.

When developer Sim Lian Group launched it in 2006, prices for four-room flats ranged from $278,000-410,000, and those for five-room flats were between $308,000- 450,000.

HDB will roll out another two DBSS sites for sale in the second half of the year, at Bedok Reservoir Crescent and Upper Serangoon Road. Both can yield an estimated 1,010 units together.

HDB said it will push out more DBSS sites 'if there is sustained demand'.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : S'pore, M'sia set to settle land issue in 3 months

Business Times - 23 Jun 2010

S'pore, M'sia set to settle land issue in 3 months

M'sia to look at land swap proposal; toll charges at Second Link to be slashed

By CHUANG PECK MING
IN PUTRAJAYA, MALAYSIA

SINGAPORE and Malaysia are poised to resolve the issue of land owned by Malayan Railway in the Republic - and move forward to greater economic cooperation.

The leaders of both countries yesterday agreed to finalise a land swap proposal in three months' time in Singapore, after further study of the matter, said a joint statement issued at the end of a meeting between Prime Ministers Lee Hsien Loong and Sri Mohd Najib Tun Abdul Razak.

Presumably, M-S Pte Ltd, the company Singapore and Malaysia have agreed to set up to jointly develop the railway land, will then be able to get on with the job.

The company is to be set up by December at the latest.

At the same time, the statement said that Singapore and Malaysia will reduce their respective toll charges at the Second Link by 30 per cent, with effect from Aug 1.

'I think it's good news for Singaporeans going to Malaysia and for Malaysians coming to Singapore,' Prime Minister Lee said during a joint press conference. 'And may many more Singaporeans and Malaysians do so.'

Yesterday's talk in Mr Najib's office, in which the two leaders were accompanied by their officials, stretched over an hour. It was a follow-up to a breakthrough meeting between the two in Singapore last month, when they broke a 20-year impasse in the Points of Agreement (POA).

The POA, with the Railway land remaining the only outstanding major issue, was signed in 1990 between then Singapore Prime Minister Lee Kuan Yew and Malaysian Finance Minister Daim Zainuddin.

It stalled over differences in interpretation and has been a big stumbling block for the two countries to advance on many areas of cooperation.

Last month, the Singapore and Malaysian leaders were all smiles when they emerged from their 'retreat' at Shangri-La Hotel in Singapore to announce they had agreed to move the existing Malaysian railway station from Tanjong Pagar to the Woodlands train checkpoint by July 2011 - and they had sorted out how the redevelopment of the railway land left behind would be dealt with.

One option mentioned by Mr Lee was to get an updated valuation of the Railway land and make an offer to Mr Najib to swap the six land parcels for land of equivalent land value in Marina South near Marina Bay Sands and/or the Ophir-Rochor area.

Mr Lee yesterday disclosed that Singapore's offer was conveyed to Mr Najib by National Development Minister Mah Bow Tan a few days before the latest talks.

'So I have made the prime minister a proposal laying out several variations for the prime minister (Mr Najib) to choose from,' Mr Lee said of yesterday's meeting. 'He raised some issues which we are discussing. But as the prime minister said - and we have put in our statement - we aim to settle this matter within three months.'

Added his Malaysian counterpart: 'Our position would still be to look at the land swap, the parcels of land with respect to Marina South and Ophir-Rochor, the details of which will be considered and we will convey to the Singapore government in due course within the three-month timeframe.'

Mr Najib said Malaysia is still keen on joint development of the land with Singapore.

Mr Lee, while indicating that Singapore understands Malaysia's need 'to think it over further' - this is a major decision, he noted - also suggested that Singapore may still make adjustments to its proposal.

'Singapore will take back the comments which Malaysia has made and we will consider them,' he said.

The matter should be settled soon because 'it is something we want to clear expeditiously', Mr Lee said. 'Three months means the end of September. It will be soon after Hari Raya Aidilfitri. So I think that is a good moment to have a final settlement of this matter.'

He also said other issues like the use of air space and Central Provide Fund money of Malaysian workers will be considered in due course.

'The focus of this meeting has been on the POA because that's something which we both decided on as a priority,' Mr Lee said. ' The other matters we will resolve progressively one by one.'

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Meeting of minds: Accompanied by their officials, Mr Lee (left) has discussions with Mr Najib for over an hour

BT : Investment sales zoom past '09 mark

Business Times - 23 Jun 2010

Investment sales zoom past '09 mark

China players add buzz; more en bloc deals expected in coming months

By KALPANA RASHIWALA

(SINGAPORE) Investment sales of property so far this year have already reached $11.26 billion - surpassing the $10.62 billion totted up for the whole of last year, according to latest figures from CB Richard Ellis.

The property consulting group is now forecasting that the full-year 2010 number is likely to surpass its initial projection of $15 billion and perhaps reach the $17.9 billion mark achieved in 2008.

The momentum comes from continued strong interest among residential developers for development sites as well as more buyers for commercial investment properties, says CBRE executive director (investment properties) Jeremy Lake.

Investment sales of property are often seen as a gauge of the confidence of major players in the sector's mid- to long-term prospects. CBRE defines investment sales as transactions with a value of at least $5 million, inclusive of apartments and landed residential property, government and private sales of land and buildings, both strata and en bloc. It also includes change of ownership of real estate via share sales.

The $11.26 billion year-to-date number (up to June 21) includes YTD Q2 figure of $5.5 billion, but CBRE expects the Q2 number to reach $6.4 billion to $6.7 billion when the tender for a plum site next to Jurong East MRT Station closes tomorrow and as more caveats for property transactions (of at least $5 million) are lodged for June.

The residential sector has been the star performer of the investment sales market, accounting for nearly $7.7 billion or about 68 per cent of the YTD H1 total tally.

A chunk of this or $2.64 billion was contributed by residential sites sold under the Government Land Sales (GLS) Programme as developers continued to hunger for suburban condo sites.

From April to June alone, 10 such plots were sold for a total $1.7 billion, making up 30.9 per cent of the YTD Q2 tally.

The collective sales market was also more active in Q2, with six properties sold for residential redevelopment for a total $278.9 million. The most prominent deal was the $95 million sale of Pender Court, which worked out to $1,007 per square foot per plot ratio.

'In the months ahead, there should be a steady flow of collective sales projects and private land sites being transacted, typically of land parcel sizes less than 100,000 sq ft,' says Mr Lake.

Credo Real Estate managing director Karamjit Singh too predicts more successful en bloc sales in the second half. 'While the government will continue to release 99-year leasehold land in the suburbs, there's a shortage of sites in the mid-prime and prime locations, especially large freehold sites. This can be met by en bloc sales - as long as owners' expectations are set realistically,' he said.

Mr Lake points out that 'a significant new entrant to real estate in Singapore are developers from China who have been active in acquiring sites'.

It started with China Sonangol Land's purchase of the freehold former Parisian site at Angulia Park from OUE last October for $283 million, followed by a unit of Chinese state-owned enterprise Metallurgical Corporation of China (MCC Group), which bought two 99-year leasehold private residential sites at state tenders this year and Qingdao Construction, which this month clinched a 99-year leasehold condo plot next to Potong Pasir MRT Station for $607 per square foot per plot ratio, a record for the area.

The Good Class Bungalow market also posted robust sales, with 26 properties transacted at $571 million from April to June based on caveats so far.

This means the figure for the first half has crossed the $1 billion mark. Notable deals in the second quarter include 14 Bishopsgate, which was sold for $36.3 million or $1,120 psf on land area, 4 Ewart Park ($39.8 million or $1,045 psf) and 20B Nassim Road ($43.53 million or $1,800 psf) - all in April. 1 Brizay Park was sold at $35 million or $941 psf in May.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

BT : Ogilvy Centre expected to be highly sought after

Business Times - 23 Jun 2010

Ogilvy Centre expected to be highly sought after

Landmark conservation building to be turned into a hotel

By KALPANA RASHIWALA

OGILVY Centre, a landmark conservation building opposite Lau Pa Sat, is now open for application under the reserve list.

Prospective bidders will be allowed to bid for the site, which is designated for hotel use, on either a 30- or 60-year lease term, the Urban Redevelopment Authority (URA) said yesterday.

BT understands that Ogilvy, which has until the end of this year to move out from the state-owned property, has already inked a lease for about 60,000 sq ft at 71 Robinson Road.

Cushman & Wakefield Singapore managing director Donald Han said the Ogilvy Centre site, at the corner of Robinson Road and Boon Tat Street, will be highly sought after, given that there are few hotel investment opportunities in prime locations in Singapore involving under 150 rooms.

Also, the choice of lease terms - at 30 or 60 years - will help to make the investment affordable to a broader pool of investors.

'However, most bidders will probably opt for a 60- year leasehold tenure as the hotel business is pretty capital intensive and 30 years may be too short for a viable investment, inclusive of an exit strategy,' Mr Han said.

Developers keen on buying the site may now apply to URA to put it up for tender.

A range of investors could be interested - including those keen on positioning the property as a luxury property like an Armani Hotel or possibly an affordable, stylish concept like Indigo by the InterContinental Hotels Group, Mr Han suggested.

The land parcel includes a historically and architecturally significant conservation building designed in the Neo-classical style, URA said. Built in 1927, it is an important heritage landmark, representative of Singapore's business district in the first half of the 20th century. It was accorded conservation status in February 2000.

The future developer would have to retain the existing four-storey conservation building.

However, the rear part of the existing building may be demolished, redeveloped and integrated as a new five-storey extension.

Mr Han says one major drawback of the property is that it will be difficult to provide a drop-off point along Robinson Road, which forms the front of the building/hotel.

'The drop-off point is likely to be created along the back lane at Boon Tat Link as part of the extension block. That will knock one star off the hotel's rating,' he said.

URA said the property can have a maximum gross floor area of 80,191 sq ft inclusive of 43,228 sq ft from the conservation building.

The site is being offered as part of the first half 2010 Government Land Sales Programme. It can yield about 70 hotel rooms and about 12,920 sq ft gross floor area of commercial space.

However, Cushman's Mr Han says the room count from the hotel could be higher at about 120-130 rooms, with commercial space mostly for ground-floor restaurants.

Based on his model, the land price on a 60-year lease could be about $480 per square foot of potential gross floor area or $38 million.

It could cost a further $28-36 million to spruce up the conservation property, build the new extension and fit out and furnish the hotel, taking the all-in investment to about $66 million to $74 million.

URA said that for the purpose of tender evaluation, bids submitted for a 60-year lease term will be normalised to their 30-year equivalents by using the formula derived from the Singapore Land Authority's Leasehold Table.

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Ogilvy Centre: Government is offering the parcel on either a 30- or 60-year lease

BT : No risks seen for banks from real estate exposure

Business Times - 23 Jun 2010

No risks seen for banks from real estate exposure

This is because prices are rising in tandem with GDP growth: Moody's

By SIOW LI SEN

SINGAPORE banks' real estate exposure - while hefty - is not posing any risks as prices are rising in tandem with economic growth, said analysts from Moody's Investors Service.

Real estate exposure has always been an area of concern as it makes up 40-50 per cent of Singapore banks' exposure, said Christine Kuo, Moody's Singapore banking analyst.

'Having said that, we look at Singapore banks' housing portfolios and they are performing quite reasonably well up to now and the Singapore government has also put in a few measures to cool down the real estate market which seem to be working,' she said.

Ms Kuo also said Singapore property prices are growing in tandem with GDP growth.

'If you look at the charts, the property price line is moving parallel to the GDP growth lines ... while it has converged in Hong Kong,' she added.

The unabated rise in Singapore property prices this year, as well as in Hong Kong and Shanghai, has led to asset bubble concerns.

In April, the International Monetary Fund said real estate markets in East Asia are overheating and that capital inflows into Singapore and Hong Kong have fuelled price rises.

It noted that the proportion of real estate loans to total bank lending, which in Singapore was close to 80 per cent in Q4 2009, is the highest among markets highlighted in its report.

In the same month, DBS Group Holdings chief executive Piyush Gupta said asset bubbles have already formed in Asia but he did not think a price correction would precipitate a crisis.

'There are asset bubbles in Asia. That's true of Singapore property, of Hong Kong property, of Shanghai property - there's no question,' said Mr Gupta then.

But he added that when a correction comes, he did not think it would lead to a crash which would bring everything back down on its knees.

Singapore property prices only recently surpassed those of the 1996 peak, said Deborah Schuler, Moody's senior vice-president and group credit officer, Asia.

'Only this year we are starting to see the growth in housing prices versus the growth in GDP, sort of housing prices getting a bit ahead of GDP so there isn't the sign yet that we're dealing with a big bubble ... it doesn't look like we're terribly out of line with the growth in the economy,' said Ms Schuler.

The worry would be only if housing prices accelerated while GDP growth slowed, she added.

Both analysts were speaking to the media yesterday following a morning conference on the impact of the global financial crisis.

Earlier, Ms Schuler said Asian banks would do well when the Basel III amendments are implemented.

The implementation, which is expected at the end of 2012, will tighten capital and liquidity requirements of all banks.

'With the exception of Vietnam and Cambodia, our South-east Asian banking system outlooks are stable. NPLs (non-performing loans) have peaked at much lower levels than expected. Bank revenues are growing and should continue to do so as long as China's economic growth does not drop abruptly,' she said.

'The region's banks are well positioned to cope with the Basel III capital and liquidity requirements, thanks to their strong capital levels, traditional banking franchises and customer deposit funded loan portfolios.'

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.

Tuesday, June 22, 2010

TODAY ONLINE : Private property market cools

Private property market cools

Number of caveats lodged in May down

05:55 AM Jun 22, 2010

by Julie Quek


SINGAPORE - It's official - Singapore's private residential property market cooled significantly last month, going by the number of caveats lodged.

Only 1,979 caveats were lodged, down 41 per cent from April, according to latest figures from the Singapore Institute of Surveyors and Valuers (SISV). District 4 saw the biggest drop in caveat numbers, down 76 per cent. The residential district includes the Sentosa, Keppel Bay and Telok Blangah areas.

This was followed by Districts 1 and 2, covering Marina Bay and Shenton Way, falling about 75 per cent.

Caveat numbers across all districts in Singapore fell in May from the month before, ranging from 57 per cent for the Orchard area to a 24 per cent drop for District 5 spanning West Coast and Pasir Panjang.

Property analysts told MediaCorp the key reasons for May's steep fall in volumes were buyers waiting for prices to decline and fewer new launches by developers.

Coupled with World Cup fever this month, observers expect caveats for these next two months to remain constant at up to 2,400 units per month - translating to a roughly 21-per-cent decline in caveats compared with 3,053 in March.

Mr Chris Koh, director of Dennis Wee Group, said: "Genuine buyers and investors who want to buy a home would have bought it last year before the start of the property boom. So, now it's mostly investors waiting for cheaper home prices."

Despite the caution in the property market, Sentosa Cove was in the news recently after a bungalow was bought by a Chinese national for a record $36 million, or around $2,400 per square foot.

But Mr Mohamed Ismail, chief executive of PropNex, does not expect cooling sales volumes to hit demand for Sentosa Cove properties.

"Foreign investors keen to buy landed property currently can only get Sentosa Cove. As such, demand is there," he said.

According to PropNex, prices of landed properties on Sentosa currently average $2,000 per square foot but due to the World Cup, investors can expect prices to fall slightly to $1,800 to $2,000 per square foot.

Despite China possibly tightening its monetary policy in coming months and the Eurozone debt crisis, Mr Mohamed Ismail does not expect foreign investors' appetite for residential property to be dampened.

"Many China nationals believe Singapore's property will rise in the long run," he said.

Mr Koh of Dennis Wee Group also believes there will be buying support for properties, given limited land supply in Singapore and projected good economic growth in the next few years.

Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved

ST : Residential property sector takes a breather

Jun 22, 2010

Residential property sector takes a breather

World Cup, euro zone crisis combine with high prices to create a lull

By Joyce Teo

THE World Cup and the euro zone debt crisis have helped create a lull in the residential property market, experts say.

They also cite other reasons for the subdued activity, including high asking prices, a lacklustre stock market and the month-long June school holidays. The market is taking a much-needed breather after running too fast, too soon, they add.

Sales are down and some developers, particularly those selling high-end homes, have also retreated to the sidelines for now.

So far this month, there has not been a major launch to excite the market.

Sales at the 1,145-unit The Minton in Lorong Ah Soo slowed to 20 units over the past weekend, bringing total sales to 350 units. It sold about 300 units in the fortnight after its preview late last month. Average prices, though, have risen slightly to $865 per sq ft (psf), said developer Kheng Leong.

At the 72-unit Horizon Residences at Pasir Panjang Hill, buyers have picked up nine more units so far this month.

The project was also released for sale late last month. Sales hit 21 units that month, Urban Redevelopment Authority data shows. The average price so far is $1,396 psf, said Far East Organization.

At the 393-unit Flamingo Valley in Siglap, just two units were sold in the past fortnight, bringing the total to 50. The project sold 46 units last month, the same month it was released for sale.

Expected high-end launches such as Twin Peaks at Grange Road have yet to hit the market.

Mr Joseph Tan, CBRE's executive director of residential services, said: 'The market conditions for high-end are not conducive, so it's only prudent for developers to monitor the market.'

Still, the take-up of 1,078 new homes last month, while down from April, was healthy, he said.

'It shows the market is stabilising and prices are stabilising. That's generally good for everyone. If the lower take-up leads to the perception that there will be a drop in prices, the scenario is unlikely because most developers have to watch their bottom line and there's no necessity for them to adjust prices now,' he said.

Land prices have not dropped and demand is intact, as interest rates are still low, said another property expert, who asked not to be named.

'Buyers hoping for prices to come down may be disappointed. If there's any price correction, it will likely be small.

'The market has been running very fast in the first four months of the year,' said the expert. 'Prices also went up very quickly, especially in the mid- and mass- market sectors. It was quite unprecedented. It cannot continue.'

Recent launches such as The Vision in the West Coast, Waterbank at Dakota and Tree House at Chestnut Avenue have all achieved benchmark prices, he said.

Experts say launches are expected to pick up next month. The 172-unit Terrene and the 468-unit The Scala have been lined up to go on sale, while Waterfront Gold at Bedok Reservoir is likely to be launched soon.

Most developers will want to launch their projects before the Hungry Ghosts' Month starts on Aug 10, experts said.

Mr Peter Ow, Knight Frank's managing director of residential services, said: 'The market may seem exceptionally quiet this month, but it is still doing well. Demand is still there and prices will hold as long as the economy continues to grow, and interest rates are still low.'

joyceteo@sph.com.sg



The lull in the residential property market has seen sales slow down for properties like The Minton in Lorong Ah Soo, which sold just 20 units over the past weekend. -- PHOTO: KHENG LEONG GROUP

ST : PM Lee in KL to discuss land swop proposal

Jun 22, 2010

PM Lee in KL to discuss land swop proposal

By Jeremy Au Yong

PUTRAJAYA: Prime Minister Lee Hsien Loong will meet his Malaysian counterpart, Datuk Seri Najib Razak, here today to discuss terms for a land swop linked to Malayan Railway (KTM) land in Singapore.

If they succeed in ironing out details of the land swop, both countries will finally break the impasse over the railway land issue that has dogged ties for 20 years.

Today's meeting between the two leaders was announced by the foreign ministries of the two countries in separate statements yesterday.

The Singapore statement said it was to follow up on the bilateral issues the leaders had discussed in Singapore last month.

During those talks, a breakthrough was achieved when both sides agreed, among other things, to move the existing railway station in Tanjong Pagar to Woodlands by July next year.

After the relocation, the land owned by Malayan Railway in Singapore would be jointly developed.

Six parcels of land are involved - one parcel each in Tanjong Pagar, Kranji and Woodlands, and three in Bukit Timah.

There is an option, however, to swop these parcels of land for land of equivalent value in the Marina South and the Ophir-Rochor areas.

Mr Lee, in explaining last month the need for a separate meeting to iron out the terms of the proposed land swop, had observed that Singapore's property market has been 'quite active' and that both sides should obtain updated valuations.

Based on its new valuation, Singapore will make Malaysia an offer today.

It will be up to Malaysia to decide if it wants to accept the offer, Mr Lee had said last month.

The joint development of the land parcels, including the railway land, will be undertaken by a company to be set up by the end of this year.

To be called M-S Pte Ltd, the company will be 60 per cent owned by Khazanah Nasional Berhad, the investment holding arm of Malaysia, and the remainder 40 per cent will be held by Singapore investment company Temasek Holdings.

Commenting on Mr Lee's working visit, the Malaysian Foreign Affairs Ministry said in its statement yesterday: 'The visit will also further strengthen bilateral relations between the two countries.'

It also said Mr Lee will co-chair the 'four-eyes' meeting with Mr Najib, and added: 'Both prime ministers will subsequently hold a joint press conference.'

In the evening, Mr Najib will host Mr Lee and the Singapore delegation to dinner.

Accompanying Mr Lee on his one-day visit are three ministers and officials from various ministries, said the Singapore statement.

The trio are Foreign Affairs Minister George Yeo, National Development Minister Mah Bow Tan and Law Minister and Second Minister for Home Affairs K. Shanmugam.

If an agreement is reached today, a high-level joint team will sort out the implementation details.

From there, a written instrument will be produced to be signed by both countries upon approval of their respective governments.

BT : US housing industry split on liability

Business Times - 22 Jun 2010

US housing industry split on liability

Bankers and agents disagree on responsibilities of foreclosed owners

(NEW YORK) As the housing market continues to sputter, the real estate industry is increasingly split on the responsibilities of overextended and foreclosed homeowners.

On one side are the bankers, who say borrowers should be liable for what they owe. On the other side are real estate agents, who say those who lost their houses should not be so burdened by debt that they cannot move on.

The differences have real financial consequences: Bankers want to collect on billions of dollars in outstanding loans; real estate agents want as many people as possible to return to the housing market.

For the first time, the debate is spilling into the realm of law making, with state legislators in California considering a bill that would redefine the obligations of many defaulting homeowners. The efforts to shape the bill demonstrate how much is at stake - in California and the many other states with distressed real estate markets.

The legislation introduced in the spring by the real estate lobby would have largely shielded foreclosed homeowners from debt collectors. But by the time it passed the state Senate on June 4, the banking lobby had succeeded in scaling it back. Now the bill is headed to the state Assembly, where a committee will take it up next week and bankers intend to continue lobbying against it.

'We're concerned this could adversely accelerate strategic defaults,' said Rodney K Brown, chief executive of the California Bankers Association, referring to instances in which borrowers leave their properties without settling with the lender.

For years, a house in California was a machine for building wealth, and few were the families that could resist temptation. They refinanced their loans to pay for vacations, operations, tuition or, frequently, investments in more houses. Many of these households ended up struggling after the crash.

The lenders were often aggressive in making loans and frequently were predatory. The extent to which this absolves the borrowers of responsibility is at the centre of the current debate.

In the style of King Solomon, the proposed law in its current form tries to divide defaulting borrowers into the sober and the feckless, and help only the first group.

The bill that passed the Senate by a lopsided vote of 30-4 would protect former homeowners up to the amount of their original loan. For instance, a family that took out a US$500,000 mortgage to buy a house and then refinanced and took cash out, swelling their loan to US$600,000, would be released from claims on the original sum but remain vulnerable on the US$100,000.

Ellen M Corbett, the Democratic state senator from San Leandro, California, east of San Francisco, who introduced the measure, said it is a matter of fairness.

During the Depression, she said, California legislators decided that losing your house was punishment enough. They did not want lenders endlessly hounding borrowers for the difference between what they owed and what their former house was worth, an amount called the deficiency.

Seventy-five years later, because of that law, anyone who has an original loan and wants to get rid of the house because it has fallen in value can simply walk away without further legal jeopardy. But a homeowner who refinanced, even for the straightforward reason of getting a lower interest rate, could in theory lose the house and be pursued for the deficiency.

'I don't believe the original intent was to have a two-tier system, where some were protected and some were not,' Ms Corbett said.

The agents, too, say this is a fairness issue. But there is also self-interest involved.

'Realtors are very worried about this because they think it will destroy the housing market if people end up with these huge deficiency judgements and are never able to buy a house again,' Ms Corbett said.

To some extent, this is a fight over something that is not happening, at least not yet.

Lenders in California rarely chased foreclosed borrowers for deficiency judgments. Pursuing such cases in court can be an arduous process, and few of those in foreclosure have the assets or incomes to make it worthwhile.

But the threat of such action can come in handy for lenders, servicers and collection agencies. By raising the possibility of a court fight, they can negotiate favourable terms when agreeing to loan modifications and workouts, surrenders of deeds and sales for less than the full amount owed, also known as short sales.

'Using the threat of a deficiency, full-recourse lenders often prevail upon distressed borrowers to sign new, unsecured obligations in exchange for their assent to a proposed short sale or surrender of a deed,' said William A Markham, a lawyer with Maldonado & Markham in San Diego. 'This practice will nearly vanish overnight if the new measure becomes law.' About a third of the seven million California households with a mortgage have negative equity, a condition known as being underwater, according to the research firm CoreLogic. Many of these families might be content to wait years for a rebound in real estate but others, if at least partly freed from deficiency worries, might walk away.

'This will lead to a surge in the supply of housing, a corresponding decrease in the price, and a welcome hastening of the end of the foreclosure crisis in California,' Mr Markham said.

State Senator Mimi Walters, a first-term Republican representing Laguna Hills, north of San Diego, voted against the measure precisely because it could encourage more defaults.

'I'm very sympathetic to what's going on in the economy and to people that are losing their homes,' said Ms Walters, a former executive with two Wall Street firms. 'But we have to be careful not to overleverage ourselves and to take responsibility when making investments.' The banking lobby says it could accept the bill as is, on one condition: that it apply only to new loans. In its current form, it applies to any existing loan. -- AP

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Starting block: For years, a house in California was a machine for building wealth. Families refinanced their loans to pay for vacations, operations, tuition or, frequently, investments in more houses

BT : Boutique hotels in New York

Business Times - 22 Jun 2010

Boutique hotels in New York

A new breed is standing out from the masses with designer details and special perks

(NEW YORK) A new breed of hotels is trying to stand out from the masses with designer details and memorable perks and prices around US$250 a night.

Finding a decent place to sleep in New York City has never been easy. Traditionally, you either had to spend a tonne of money (the Ty Warner Penthouse at the Four Seasons for US$35,000 a night, anyone?) or scrimp and hope for the best (warning: a recent search for 'bed bugs' on TripAdvisor found 877 mentions for city hotels).

What is a budget and style-conscious traveller to do? Go for the new middle. In a city that still boasts one of the nation's highest room rates (US$238 on average in Manhattan, according to Smith Travel, which tracks the industry), hotels aiming for the midrange are reaching new heights.

The trend began about three years ago, with a trickle of boutiquey places like the Pod, the Ace and the Jane - which offered a patina of style without the premium prices. It has accelerated in recent months, with a raft of new hotels promising cool design, nods to local flavour and wallet-friendly rates of about US$200 to US$250.

Call them budget boutiques. But instead of coming from daring young hoteliers, many are being rolled out by chains like InterContinental and Wyndham in a bid to attract a hipper clientele.

'There's a huge wave of consumer demand, especially with the younger Gen Y or millennials, for properties that have some level of style to them,' said Sean Hennessey, founder of Lodging Advisors, a hospitality consultant firm.

In May, I slept in some of these new hotels. Despite their novelty, some were already victims of their own cliches. Rooftop bars, rainfall showers and iPhone docks were everywhere. Still, rooms were large by the city's pint-size standards, service was sharp, and for the moment, they offer some of the best values around.

Distrikt Hotel

Why book? On an exhaust-choked block next to the Port Authority bus station, three new cookie-cutter hotels are stacked together like cereal boxes in a configuration that hotel bloggers have started calling a 'tri-pack'. Distrikt, next door, is different: It has a simulacrum of soul. This is impressive, not only because of its unseemly location - within shouting distance of a homeless shelter and a parole office - but also a kitschy design conceit: Every floor takes its cue from a New York City neighbourhood.

Room: My standard room was on the 28th floor: Central Park. Don't expect a wax statue of Frederick Law Olmsted. The only nods to the famous park were photo collages that hung in the room and hallways.

Needless to say, the actual park wasn't visible from the window, though tantalising glimpses of the Hudson River were. The room itself was a beige rectangle furnished with the type of inoffensive contemporary furniture one might find in a West Elm catalogue.

Vibe: Blame the sketchy neighbours, but parts of the hotel feel as though they're under lockdown. Key cards are needed to operate the elevators, and the marble-and-steel lobby is a tad cold, despite a 12-foot vertical garden. An adjacent lounge, called Collage, looks like a modern airport bistro. It serves breakfast by day, and drinks and bar food by night. On a recent Friday evening, it was empty. 'This is New York City,' said the young bartender. 'Who wants to stay inside their hotel?'

Mints: An organic fudge brownie awaits you in the room, along with a personalised welcome letter - nice touches for a hotel of this class. There's no fitness centre, but free passes are available to the nearby Mid City Gym. You can check your e-mail on one of three large Mac screens in the lobby, but be prepared to wait.

342 West 40th Street, between Eighth and Ninth avenues; (888) 444-5610; distrikthotel.com; free Wi-Fi; breakfast for US$14.95; 155 rooms from US$209.

Eventi Hotel

Why book? Straddling the higher end is the Eventi, a 292-room hotel that opened last month in northern Chelsea. Operated by Kimpton - a San Francisco-based chain that helped pioneer the budget boutique niche - it offers doses of luxury that are unusual at this price range. There's clever design, 24-hour room service, a large terrace, a sunny gym, a spa that offers something called spirulina body wraps, and even dog and cat massages.

Room: The standard queen was sleek and handsome, with custom-made furnishings (dark woods, cloud-gray upholstery, heavy drapes) that felt rich. It had a risque side: a huge mirror faced the bed, Frette robes were trimmed with zebra prints, the honour bar was stocked with an Intimacy Kit (US$6). Other high-end perks await in the marble-tiled bathroom. There was an elongated tub, a magnifying makeup mirror and bottles of musk-scented Italian hair products.

Vibe: It's a work in progress. Planned for October are a Basque restaurant by Jeffery Chodorow, a plaza with a movie screen and whiskey bar. Meanwhile, the lobby - with cave-red marble and quirky seating nooks - fills up during the free wine hour that begins at 5pm. For breathing room, take your glass to the wraparound terrace on the fifth floor, furnished with terra-cotta planters and oversize wicker love seats.

Mints: No Pringles here. The minibar was stocked with goodies like blueberry acai Gummy Pandas (US$4), Late July organic crackers (US$3), and Alba Botanica shave cream (US$5). There's even a 375-millilitre bottle of Absolut vodka, big enough for an impromptu party. Service was polished. A free toothbrush and hair straightener were delivered in less than five minutes.

851 Avenue of the Americas, between 29th and 30th streets; (212) 564-4567; eventihotel.com; Wi-Fi is US$10 per day (free for Kimpton rewards members); a breakfast buffet is US$22; 292 rooms starting at US$249 (at US$399 once introductory rates finish in fall)

Fashion 26

Why book? A quick step from the Fashion Institute of Technology, this shiny new hotel by Wyndham tries hard to live up to its name.

There's a Best Dressed Guest contest held occasionally (winners get room upgrades), the Mondrian-like mural above the front desk is made from thread spools, and the concierge keeps tabs on sample sales. No, you won't see a gaggle of models during check-in, but the hotel does have fun playing dress-up.

Room: A standard room was maybe a size medium, with plenty of nods to fashion: buttons on the door numbers, a merino herringbone throw on the bed and mint-green polka dots on the walls. Housekeeping staff members wear custom dresses that hint, naughtily, at French maid. A big window offered postcard views of the Empire State Building, as well as peeks inside garment showrooms across the street.

Vibe: Despite all the sartorial trappings, guests dressed like any in your typical off-the-rack hotel. On a recent Monday, there were FIT parents in the slate-gray lobby, and suits trading airport stories in the elevator. There's a chatty cocktail scene at the lobby bar, but Rare, the fiery orange dining room, was desolate. Maybe the ho-hum menu - part burger joint, part formal steakhouse - was to blame. A rooftop bar is expected to open this month.

Mints: Service was elegant and unobtrusive. Arriving two hours before check-in was no problem; the attendant had a room ready. Come back from dinner and the bed is turned down: the pillows stacked upright, the comforter removed, a note left on the sheets with tomorrow's weather, and a mint. There's also a decent gym in the basement and a single-cup Keurig coffee maker in the room.

152 West 26th Street, between Avenue of the Americas and Seventh avenues; (212) 858-5888; f26nyc.com; free Wi-Fi and a US$15 cold and US$19.70 hot breakfast buffet, along with à la carte; 280 rooms from US$229.

Hotel Indigo

Why book? Hotel Indigo may be the prototype of this new hotel class. Started by the InterContinental Hotels Group, which owns Holiday Inn and other chains, the Indigo brand aims to be affordable yet stylish, though its first property in New York City doesn't quite hit the mark. It opened last October in the heart of the flower district, so it is hemmed on all sides with orchids and pussy willow.

There are flowers inside the hotel, too, though mostly of the printed variety. Hallway carpets with comically giant indigos and carrot-orange walls conspire to create a visual jungle. Too bad the floral theme didn't extend to the scent. The lobby smelled more like cleaning fluid than roses.

Room: The oversaturated colour scheme continued inside the room, with a headboard stitched together from swatches of reds, oranges and yellows. Still, the room was bright and airy, with hardwood floors, a small desk and a floor-to-ceiling print of sewing needles. The view was quintessentially New York: fire escapes and the back of old factory buildings. As in many of these budget boutiques, the bathroom was sleekly appointed. In this case, however, the shower lacked water pressure, and a puddle from the previous night was still on the shower floor in the morning.

Vibe: An oddball mix. Foreign tourists in I (HEART) New York T-shirts sat in the lobby. Office workers crowded the smoky rooftop Glass Bar. And at Blu, its street-level Italian restaurant, there was, well, no one. The soupy risotto I was served one night may have something to do with it.

Mints: Service was unexpectedly attentive; the front desk called shortly after check-in to make sure everything was in order. In the basement, there's a basic business centre (two desktop computers) and a well-equipped, if petite, fitness studio with free weights and treadmills.

127 West 28th Street, between Avenue of the Americas and Seventh Avenue; (212) 973-9000; indigochelsea.com; 122 rooms from US$269; US$15.99 breakfast buffet, and à la carte brunch served on weekends. -- NYT

Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.



Going places: In a city that still boasts one of the nation's highest room rates (US$238 on average in Manhattan), hotels aiming for the midrange are reaching new heights

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