ST : Global uncertainty slows sale of high-end homes

Aug 19, 2010

Global uncertainty slows sale of high-end homes

Outlook still favourable but mass market properties more popular

By Joyce Teo

BUYERS are still showing relatively muted interest in the most luxurious homes in the city centre, the latest set of new home sales data shows.

But they are making a beeline for very popular mass market homes, followed by mid-tier units, the figures show.

Property experts say the outlook for the luxury sector remains favourable, though growth has slowed and current global uncertainties mean these prime high-end homes are unlikely to rebound this year as some experts had hoped.

A few months back, it was expected that luxury projects such as Ardmore3 and those on the former Grangeford and Parisian condo sites in the Orchard area would be launched in the first half year.

No major luxury projects were launched last year.

Developers of these homes have been cautious again this year. Bukit Sembawang recently said it will be launching the marketing of Paterson Suites in its current financial year ending March31 - unusually late in the game for a project that has already received its temporary occupation permit.

Underscoring the point, City Developments chairman Kwek Leng Beng last week said luxury homes had not sold as well as the industry had expected.

He said this segment would perform well - perhaps next year - only if the wider global economy stabilises.

Said Cushman & Wakefield managing director Donald Han: 'Singapore may not be the place to make extraordinary gains but the good thing is the luxury market is still compelling.The market is just taking a breather. The earliest possible time for the return of interest in the luxury end market will be at the end of the year.'

While the prime segment (homes selling for $2.5million to $5million) saw some activity in the first half, transactions in the luxury ($5-$8million) and super-luxury (above $8million) segments have been rather scarce, said CBRE executive director, residential, Mr Joseph Tan.

'Most homebuyers were generally more cautious towards high-priced projects under the present uncertain conditions on the global front.'

Still, Colliers International's director of research and advisory, Ms Tay Huey Ying said the price rebound in high-end and luxury properties, which started in the second half of last year, had continued this year, though the pace of growth has moderated to more sustainable rates.

'Developers are holding back their high-end and luxury launches because there has been some derailment in the strength of the economic recovery due to the euro zone crisis. There is also growing uncertainty in the recovery of the US economy. Prices are not yet at the levels they are aiming for.'

More investors are going for cheaper new properties - mostly those under $1,500 psf - as global uncertainties have put a lid on risk appetites, said Ms Tay.

The slight slowdown means that price growth in the high-end and luxury segments is likely to come in towards the low end of the firm's forecast range of 15-20per cent for this year, she said.

Experts note that in the first half year, the Urban Redevelopment Authority's price index for non-landed homes in prime districts was already up 10per cent, and is just 1.8per cent off the 2008 peak. This is just a tad slower than the 10.3per cent and 12.9per cent price gains seen for non-landed homes in the city fringes and suburban areas respectively.

CBRE expects high-end home prices - still about 5-10per cent below 2007 boom levels - to be stable till year-end.

While high-end prices are up this year, sales volume has not picked up significantly owing to fresh concerns on the global economic recovery's sustainability.

But the number of high-end home deals of $3,000 psf and above has risen from eight units in the fourth quarter to 29 units and 35 units in the first and second quarters respectively, noted Savills Prestige Homes director Steven Ming.

'This is an indication that pockets of luxury home buyers are still streaming into the local market,' he said.

However, as high-end homes are very dependent on foreign demand, sales could recover to previous peaks in the next 12 to 18 months after macro-economic concerns have been sorted out, he said.

CBRE's Mr Tan said developers have adopted a low-key strategy to marketing luxury projects, such as direct invitations for private previews and appointments.

For example, Far East Organization recently launched its luxury brand 'Inessence', and sold a handful of units in Boulevard Vue and Skyline @ Orchard Boulevard. Wheelock Properties and Hong Leong Group sold a few units at their respective new super-luxury projects, Orchard View and Sage.

Mr Tan said there is a 'strong likelihood' the high-end market will continue in this manner for the rest of the year.

However, the few possible high-end launches in September such as Twin Peaks and The Peak @ Cairnhill will test the market's receptivity. If these launches do well, it will motivate developers to launch more high-end projects, he said.

joyceteo@sph.com.sg


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DEVELOPERS HOLDING BACK

'Developers are holding back their high-end and luxury launches because there has been some derailment in the strength of the economic recovery due to the euro zone crisis. There is also growing uncertainty in the recovery of the US economy. Prices are not yet at the levels they are aiming for.'

Colliers International's director of research and advisory, Ms Tay Huey Ying



Possible September launches, such as for Twin Peaks, will test the market's receptivity. -- ST PHOTO: ALPHONSUS CHERN

ST : Prime Capitol site tender draws 14 submissions

Aug 19, 2010

Prime Capitol site tender draws 14 submissions

By Joyce Teo

THE much anticipated tender for the stretch of colonial buildings along Stamford Road that includes the Capitol Theatre has drawn a strong response, with 14 submissions lodged by nine firms.

Big-gun developers here and overseas, including Far East Organization and CapitaLand, have lined up for the prime land, which could go for more than $300million.

The high number of tenders surprised experts, as the Government has placed some tough constraints on how the 1.43ha plot at the junction of Stamford and North Bridge roads can be used.

The 99-year leasehold site comprises Stamford House, Capitol Building, Capitol Theatre and Capitol Centre.

The dingy Capitol Centre can be demolished but the other three buildings must be conserved.

The winning developer must use Capitol Theatre as an arts or entertainment-related performance venue. It must also build an underground walkway lined with shops and restaurants to link the site to City Hall MRT station.

A quarter of the land parcel's total gross floor area of 50,389 sqm must also be used for hotel rooms, to add to the existing hotel cluster in the area.

'The challenges for the developers and designers will be quite intense because the buildings are in the civic precinct, which is the the original heart of Singapore and they have to be conserved,' said architect John Ting.

Stamford House was built in 1904 in a neo-classical style by Regent Alfred John Bidwell, the architect behind the Raffles Hotel.

Capitol Theatre, which housed Singapore's first cinema, was built in 1929, and Capitol Building, previously known as Shaw Building, was built in 1933.

The buildings also mark the time when the same neoclassical language was used in the civic precinct. They are private developments, but belong to the same era as government buildings such as City Hall and the Supreme Court, added Mr Ting. 'The designers have to be very creative to come up with something that is relevant to today's use,' he said.

Knight Frank group managing director Danny Yeo added: 'What you are putting into the site is key. I think the conserved buildings could house a unique, upmarket hotel, while the new development there could house a mall. Whoever can bring something new to the site will have an extra edge.'

Far East submitted three ideas for the land while Wing Tai Group lodged two. United Engineers, GuocoLand Group, CapitaLand, Hong Kong-based Park Hotel Group, Malaysia's YTL Corporation and private equity firm Gaw Capital Partners made submissions as well.

A proposal also came from a consortium formed by Mr Pua Seck Guan, former chief executive of CapitaMall Trust Management, comprising Perennial (Capitol), a subsidiary of his Perennial Real Estate Group, Mr Kwee Liong Seen's Chesham Properties and Top Global's Top Property Investment.

'The high number of bids reflects optimism in the commercial and hospitality sectors,' said DTZ's head of South-east Asia research, Ms Chua Chor Hoon.

Bids were not revealed yesterday as the tender is on a two-envelope system, in which developers submit their design proposals and tender prices in two separate envelopes.

The Urban Redevelopment Authority will first shortlist the designs and then choose the one with the highest bid. The South Beach and Clifford Pier plots were also sold this way.

CBRE Research expects bids to be in the range of $220million to $270million. This would work out to $400 to $500 per sq ft (psf) of total floor area.

Said Mr Yeo: 'We expect the bids to be high because of the conservation requirements and the underground link. The price could easily be about $550 to $600 psf per plot ratio.'



The 1.43ha plot comprises Capitol Theatre (above), Capitol Centre, Capitol Building and Stamford House. -- ST FILE PHOTO

BT : Office market crackles as banks go hunting for space

Business Times - 19 Aug 2010

Office market crackles as banks go hunting for space

Existing players are expanding while new boys in town are sniffing around for lease deals

By KALPANA RASHIWALA

(SINGAPORE) The Singapore office market is buzzing with leasing interest as banks and other occupiers expand their operations and plan moves to new Grade A office buildings.

Citigroup is widely tipped to be considering taking more than 200,000 sq ft at Asia Square Tower 1. The 43-storey block will have 1.26 million sq ft net lettable area (NLA) of offices when it is completed in June 2011.

At 50 Collyer Quay, Bank of America (BOA) is said to be in talks to lease about 120,000 sq ft. If a deal materialises, the leasing level in the building will cross the 50 per cent mark. 50 Collyer Quay, which will have 412,0000 sq ft NLA, is expected to be ready in Q1 next year.

Russian oil, gas and resource group Gazprom, which currently uses serviced offices in Singapore, is believed to be negotiating to rent one of the top few floors of the 43-storey Ocean Financial Centre (OFC), which will be completing next year.

OFC's top few levels will have roof gardens.

Swiss bank Julius Baer, currently at One George Street and Harbourfront Tower 1, may also be considering taking space at a new location, possibly OFC, suggest sources.

In the Tanjong Pagar area, Goldman Sachs and Yahoo have each leased about 40,000 sq ft at Mapletree Anson, which was completed last year.

CB Richard Ellis is understood to be advising both anchor tenants that are expected to lease space at 50 Collyer Quay and Asia Square but its executive director (office services) Moray Armstrong declined to comment on specific clients the firm is representing.

Mr Armstrong was, however, willing to discuss the strength of the office leasing market in general terms.

When office demand began to pick up about a year ago, it was a game of musical chairs as occupiers cashed in on low office rents to move to new office developments.

'However, deals in the past three months or so have been underpinned by positive headcount growth among occupiers in various sectors - including finance, insurance and professsional services,' Mr Armstrong said.

Agreeing, Knight Frank director, business space (office) Robert MacDonald said: 'We're also seeing hedge funds, principally from New York, coming back to town. Law firms from the UK and US are also looking at Singapore.

'Serviced offices are seeing very high occupancy thanks largely to new players entering Singapore. These companies will lay the foundation for office demand and help to backfill some of the space being vacated in older Grade A buildings when tenants move out to newer properties.'

On a positive note, Savills Singapore's director (commercial) Agnes Tay points out that departures from older buildings create opportunities for remaining tenants to expand their premises within the same buildings.

Demand for office space in Singapore has recovered from a negative net take-up of about 236,000 sq ft last year to positive net demand of about 635,000 sq ft in first-half 2010. Standard Chartered Bank's head of Asean property research Regina Lim forecasts positive demand of 1.9 million sq ft for full-year 2010. She predicts that the average monthly Grade A office rental value will end the year at about $10.20 per square foot, up 26 per cent from end-2009.

An office leasing agent says preleasing rents for Grade A buildings under construction have risen about 25-35 per cent year to date. 'Monthly rents in new buildings are about $8.50 to $10 psf; they were $7-ish at end-2009.'

The islandwide office vacancy rate has fallen marginally from 12.5 per cent at end-Q1 2010 to 12.3 per cent at end-Q2.

DTZ executive director, business space, Cheng Siow Ying says a key challenge for office leasing agents is managing a mismatch of expectations as landlords have raised rent expectations in select buildings with high occupancies while tenants are still hoping to secure leases at competitive terms.

Citigroup, which is believed to be studying options including renting space at Asia Square Tower 1, currently operates at Millenia and Centennial towers (over 400,000 sq ft), Capital Square and Changi Business Park.

Leases on some space in Centennial Tower and Capital Square are understood to expire sometime next year. When asked if the bank was looking at new locations, its spokesman would say only that 'from time to time, we may look for real estate options based on the expiry of leases'.

Chris Archibold, head of markets at Jones Lang LaSalle - the exclusive marketing agent representing Asia Square's developer MGPA - said leasing interest in Tower 1 has accelerated in the past six months, with about 40 per cent of NLA under serious negotiation or let.

'Tenant profiles are predominantly from banking and finance, professional services and consultancy practices,' he added.

BOA, which is expected to vacate about 60,000 sq ft at Republic Plaza when its lease expires around mid-2011, is said to be considering a move to 50 Collyer Quay.

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



Asia Square: Citigroup is tipped to be considering taking more than 200,000 sq ft of office space at the Marina View complex which comprises offices, shops and a hotel

BT : Demand for JTC industrial space mixed in Q2

Business Times - 19 Aug 2010

Demand for JTC industrial space mixed in Q2

Net take-up of its ready-built facilities turns negative while prepared industrial land demand rises

By EMILYN YAP

(SINGAPORE) JTC Corporation has turned in a mixed report card for the second quarter in terms of demand for its industrial properties.

Net take-up of its ready-built facilities fell into negative territory from the previous quarter, while take-up of its prepared land rose.

Net allocation of ready-built facilities was a negative 2,700 square metres in Q2, down from a positive 9,400 sq m in Q1.

Higher lease terminations were the culprit. Businesses returned 27,200 sq m of space - more than double the 12,700 sq m in the previous quarter.

The manufacturing sector accounted for 80 per cent or 21,800 sq m of the terminations in Q2.

Also, close to half of the terminations, involving 13,400 sq m of space, happened as companies consolidated their operations.

Standard factories bore the brunt of this, as 14,700 sq m of space in such properties was returned.

Larger gross take-up could not make up for the higher terminations. Gross allocation of ready-built facilities was 24,500 sq m in Q2, up 11 per cent from 22,100 sq m in Q1.

Despite the negative net take-up, the occupancy rate for ready-built facilities remained relatively steady at 97.4 per cent in Q2, dropping 0.1 of a percentage point from Q1.

At end-Q2, JTC had four ready-built facilities under development. Two at Seletar Aerospace Park and one at CleanTech Park are due to be completed next year, and Fusionopolis Phase 2A should be ready by Q2 2013.

Separately, JTC's prepared industrial land enjoyed a 5 per cent increase in net take-up, to 24.4 ha in Q2 from 23.2 ha in Q1.

A drop in terminations contributed to the improvement. Businesses returned 21.4 ha of land, down 43 per cent from 37.8 ha a quarter earlier.

Manufacturing-related and supporting industries contributed the bulk of terminations. Lower terminations boosted net take-up even as gross take-up fell. Gross allocation was 45.8 ha in Q2, slipping 25 per cent from 61 ha in Q1.

Jurong Island saw a surge in demand. Gross take-up there was 37.1 ha in Q2, more than two times the 16.2 ha in the previous quarter.

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



Consolidation: The manufacturing sector accounted for 80 per cent or 21,800 squaremetres of the terminations in the second quarter, with nearly half of this by companies consolidating their operations

BT : Soilbuild divests logistics warehouse for $60m

Business Times - 19 Aug 2010

Soilbuild divests logistics warehouse for $60m

By YEN PEI WEN

SOILBUILD Group Holdings is divesting Penjuru Logistics Hub, a five-storey purpose-built logistics warehouse, for $60 million.

The integrated boutique developer is expecting to recognise a gain of about $16.3 million from the sale of the property at 34 Penjuru Lane, which has a remaining lease of 22 years.

The warehouse, which has 0.4 million square feet of business space, will be leased back to Soilbuild for five years at about $5 million per year.

'As at end-June 2010, Penjuru Logistics Hub had been leased to a range of logistics support businesses, including those for petrochemical and maritime companies located at Jurong Island and Jurong Port respectively,' said Soilbuild.

Soilbuild executive director Low Soon Sim said: 'This divestment is part of our capital management strategy to enhance yields and returns for our growing business space portfolio held for lease.'

The proposed transaction, which needs the approval of the JTC, involved Soilbuild's subsidiary, SB (Lakeside) Investment, signing a put and call option agreement with Sabana Investment Partners.

Soilbuild said that the group's stronger balance sheet and lower gearing allow it to tap into new opportunities to optimise its portfolio mix for better yields.

It is expecting two ongoing developments to yield 1.6 million square feet of business space when they come onstream next year, bringing Soilbuild's total space of business properties for lease to 3.01 million square feet.

For the second quarter of this year, Soilbuild's net profit was $32.7 million, up 66 per cent from a year earlier, in spite of a 24 per cent fall in revenue to $73.6 million. This was helped by fair value gains of $16 million.

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

BT : Landmark site at City Hall draws 14 bids

Business Times - 19 Aug 2010

Landmark site at City Hall draws 14 bids

Far East submits 3 separate bids, Wing Tai and a consortium 2 each

By UMA SHANKARI

(SINGAPORE) Ten developers and consortiums handed in 14 different bids to buy and redevelop a landmark commercial site at City Hall - with the historic Capitol Theatre, Capitol Building and Stamford House on it - by the close of the state tender yesterday.

Far East Organization submitted three separate bids while two bids were put in each by Wing Tai Holdings and a consortium made up of Perennial Real Estate, Chesham Properties and TOP Property Investment.

And one bid each was submitted by: CapitaMalls Asia and parent company CapitaLand; GuocoLand; Park Hotel Group; United Engineers; YTL Corporation; private equity fund manager GAW Capital Partners; and a consortium made up of Sin Heng Chan Group, Kim Eng Group and Japan's Takenaka Group.

The amount of each bid was not revealed by the Urban Redevelopment Authority (URA) as the land parcel is being sold through a 'concept and price revenue' tender process.

Under this system, tenderers are required to submit their concept proposals and tender prices in two separate envelopes. The concept proposals will be first evaluated against a specified set of criteria and only those that meet the criteria will be considered. The site will then be awarded to the tender with the highest bid price among those with acceptable concept proposals.

Developers can therefore choose to submit multiple bids, as Far East Organization, Wing Tai Holdings and the consortium led by Perennial Real Estate have done. Perennial Real Estate is led by Pua Seck Guan, ex-CapitaLand head of retail.

The 99-year leasehold site, which is located at the junction of Stamford Road and North Bridge Road and which also comprises Capitol Centre and a subterranean parcel that will link directly to City Hall MRT station, was launched for sale in April this year.

The tender was triggered after an unnamed developer committed to bid at least $100 million - or $184 per square foot per plot ratio (psf ppr) - for it.

Analysts said then that the plot can fetch $400-$600 psf ppr.

The eventual developer of the site is required to retain and restore three 'historically and architecturally significant buildings' - Capitol Theatre, Capitol Building and Stamford House - for re-use. In particular, URA said that Capitol Theatre is required to be used as an arts or entertainment-related performance venue. Capitol Centre, on the other hand, can be torn down.

The winning bidder is also required to set aside 25 per cent of the total gross floor area for hotel use. This will help to strengthen the hotel cluster in the area, which now includes Swissotel The Stamford, The Fairmont and Grand Plaza Park Hotel.

The bidders will now present their concepts to a concept evaluation panel put together by URA.

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



Capitol Building: The eventual developer of the site must retain and restore three buildings' - Capitol Theatre, Capitol Building and Stamford House - for re-use. Bidders will now present their concept to an evaluation panel

BT : Newton View for sale en bloc

Business Times - 19 Aug 2010

Newton View for sale en bloc

Freshly launched unit at The Scala in Serangoon also up for auction

By EMILYN YAP

OWNERS of Newton View have climbed aboard the collective-sale bandwagon, putting their estate up for tender with an indicative price of $153-155 million.

The freehold residential development at 26 Newton Road (between Newton and Novena MRT stations) sits on a 37,577 square foot site with a plot ratio of 2.8 and a permissible gross floor area (GFA) of 105,215 sq ft.

Including an extra 10 per cent of space for balconies, the GFA can go up to 115,737 sq ft. Savills Singapore is handling the tender and expects the winning developer to be able to build a condominium with about 80 units averaging 1,300 sq ft each.

The developer will have to pay an estimated development charge of some $582,000. At the indicative price, the overall cost of the site would work out to $1,460-$1,479 psf per plot ratio (psf ppr).

Savills' investment sales head Steven Ming reckons Newton View's location is a selling point. 'New developments in the area have been substantially sold, reflecting the location's desirability,' he said.

Separately, a two-bedroom unit at The Scala in Serangoon - fresh from a developer's launch last month - has been put up for auction.

Industry watchers say it is unusual for an owner to sell a residential property at auction so soon after a launch. Hong Leong Holdings rolled out the 99-year leasehold 468-unit project in the last week of July. According to official data, 68 units were left that month.

Jones Lang LaSalle is handling this owner's sale. Its head of auctions Mok Sze Sze said the seller is a regular client who has put other properties up for auction previously, and is confident of selling the unit this way.

DTZ's senior director for investment advisory and auction, Shaun Poh, said owners typically auction units some time after launch, when a project is close to obtaining its temporary occupation permit (TOP) or has been substantially constructed.

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

BT : Katong apts put up for collective sale

Business Times - 18 Aug 2010

Katong apts put up for collective sale

Amber Glades and Robin Court hope to be third time lucky

By UMA SHANKARI

AMBER Glades, off Amber Road, and Robin Court, with an adjoining bungalow at Robin Drive, are being put up for collective sale - for the third time.

The 63-unit freehold Amber Glades was first offered for sale in October 2007 for $145 million or $1,345 per sq ft per plot ratio (psf ppr) including a development charge.

The project was re-launched in April 2008 at a lower price of $127 million, or $1,140 psf ppr including a development charge - 15 per cent cheaper than the first time around.

Now the sellers are hoping they will be third-time lucky. They are asking for $130 million. This translates to a land price of some $1,091 psf ppr - including a development charge of $7.5 million and assuming a developer will maximise the potential of the 10 per cent of extra gross floor area allowed for balcony space.

'With an evident pick-up in momentum for collective-sale sites, low interest rates and depleting land banks among developers, we are optimistic this corner plot will draw keen interest, particularly as it is in a part of Katong where many new projects have enjoyed good sales,' said Ho Eng Joo, executive director of investment sales at Colliers International, which is marketing the project.

The successful buyer can re-develop the site into a 22-storey residential project comprising some 150 units of 840 sq ft each, or 84 units of 1,500 sq ft each, Colliers said.

It is a similar story for the 15-unit Robin Court and the adjoining No 1 Robin Drive, which were put up for sale with a third property in late 2007 at a price of $1,500-$1,600 psf ppr.

After there were no takers, the two properties were re-launched in July 2008 for $58-$60 million, or $964-$996 psf ppr - a 40 per cent cut in the asking price. But there were still no takers then, in the midst of the global financial crisis.

Now, the majority owners of Robin Court and the sole owner of No 1 Robin Drive are asking for $66 million to $74 million, or $1,046-$1,172 psf ppr.

This pricing assumes the developer would maximise the potential of the 10 per cent of extra gross floor area allowable for balcony space, and the remnant state land may be purchased.

'We believe this offering will be hot,' said Karamjit Singh, managing director of Credo Real Estate, which is marketing the project. 'This is a District 10 site with a prestigious No 1 Robin Drive address. It enjoys the convenience of a train station a stone's throw away, and is within walking distance of the most popular primary schools. On top of that, the sellers' expectations are very reasonable.'

About 60 apartment units of an average size of 1,000 sq ft - depending on layout and configuration - can be built on the plot, Credo said. Mr Singh reckons a developer would break even around $1,600-$1,750 psf.

Separately, Jones Lang LaSalle (JLL) has put up for collective sale by tender a row of 13 freehold shophouses in Owen Road. The indicative price is around $43 million - or $930 psf ppr - subject to the tender process.

All the owners have agreed to the sale of the 15,388 sq ft site, which was zoned 'residential with commercial at first storey'. The plot could potentially yield 36 apartment units of an average size of 1,000 sq ft and 11 commercial units of an average size of 800 sq ft each, JLL said.

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



District 10 site: The majority owners of Robin Court and the sole owner of No 1 Robin Drive are asking for $66 million to $74 million, or $1,046-$1,172 psf ppr

BT : Li Ka-shing pays top dollar for two sites

Business Times - 18 Aug 2010

Li Ka-shing pays top dollar for two sites

His company forked out a total of HK$7.6b for the land

(HONG KONG) Hong Kong's richest man, Li Ka-shing, snapped up two prime residential sites yesterday for prices well above market estimates, despite government measures to cool the overheating property market.

Mr Li's Cheung Kong (Holdings) bought a 7,551-square-metre waterfront plot in the city's Kowloon district for HK$3.51 billion (S$612 million), with around 150 bids placed in just over an hour.

The final price was nearly twice the opening bid of HK$1.77 billion, and translates into a per-square-foot price of HK$9,597, making it the most expensive land in the district.

The whopping price exceeded estimates of HK$2.3-2.82 billion from analysts polled by Dow Jones Newswires.

The blue-chip developer also bought another auctioned site, a 7,326-square- metre plot also in Kowloon, for HK$4.1 billion.

The price was 43.5 per cent higher than the opening bid and above the top end of market estimate of about HK$3.9 billion.

Developers remained upbeat despite a series of government measures announced last week to rein in Hong Kong's soaring residential market.

House prices in Hong Kong surged nearly 45 per cent from their trough at the end of 2008, while prices of some luxury flats have returned to, or surpassed, the peaks of the 1997 property boom.

'The new measures will not change the imbalance of supply and demand of residential buildings. The increase in land supply in recent months is not sufficient to satisfy the large appetite for residential flats,' Charles Chan, managing director for Savills Valuation and Professional Services, told AFP.

The government said last week it would increase land supply and tighten mortgage lending to avoid a property bubble.

John Tsang, the city's financial chief, said the government would auction three more sites before March 2011, regardless of whether developers tabled an offer equal to at least 80 per cent of the government's minimum price - a requirement under the city's land auction rules.

Two of the three sites will be auctioned in September, he said.

'A large amount of hot money has flown into Hong Kong's financial system. Flat prices of some popular housing developments are fast approaching historic highs,' Mr Tsang said last week.

'There is an increased risk of a property bubble forming because interest rates are expected to continue to be very low for some time to come.'

The Hong Kong Monetary Authority warned banks that the credit risks they faced in residential mortgages were rising and unveiled measures to help them cope.

These included lowering the loan-to-valuation ceiling to 60 per cent for properties worth HK$12 million or more.

The ceiling for all non- owner-occupied residential mortgages would also be lowered to 60 per cent\. \-- AFP

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

BT : Rich Londoners hire new breed of housing agents

Business Times - 18 Aug 2010

Rich Londoners hire new breed of housing agents

(LONDON) Beverley Kirby gave up trying to buy a house on her own in London's Chelsea area after twice getting burned by owners reneging on agreements to sell to her. The night before Ms Kirby was due to sign for one £4.5 million (S$9.5 million) house a year ago, she was trumped by an offer that was £500,000 higher. The aborted deal cost her £4,000 in fees and left her with a few months to vacate the apartment she had sold.

'I was getting desperate,' said Ms Kirby, who bought and sold seven other homes previously with her former husband. 'There was madness in the market. People had no ethics at all.'

That experience, along with the surge in prices for a dwindling number of top-end properties for sale, led Ms Kirby to hire Robert Bailey, a type of broker known as a buying agent. Mr Bailey is one of several hundred operators in a field that barely existed in the UK 15 years ago. He found her a home that wasn't advertised. Ms Kirby moved into it in early April after Mr Bailey helped her carry out refurbishments and get planning consent to use the top of the garage as a roof terrace.

The agents are a response to a flaw in the British real estate system that favours sellers, said Phil Spencer, who hosts property-search shows on UK television with fellow agent, Kirstie Allsopp. Typically, potential UK homebuyers register with 'estate agents', who show them properties but are ultimately paid by the sellers.

In the United States, both buyers and sellers usually hire brokers, though only the sellers pay commission. These fees are shared by both sets of brokers. 'A buyer has nobody to help them with the biggest financial decision of their life,' said Mr Spencer, 40.

The new breed of advisers charge the potential purchaser a retainer plus commissions of as much as 2.75 per cent of the sale price. It's a cottage industry largely used by the wealthy because it's too expensive for most people with budgets of less than about £500,000.

Buying agents have proliferated in the luxury markets of London and southern England as a weaker pound lured overseas investors. They do everything from locating the home and negotiating the price, to arranging legal and survey work and researching potential pitfalls such as noisy neighbours. They are prized largely for speeding up the process to reduce the chance of getting 'gazumped', a British term for being trumped by a higher bid before signing contracts.

'Over the past five years especially, there has been a quadrupling in the number of buying agents in the prime central London market and their numbers increase all the time,' said Noel de Keyzer, head of house sales at broker Savills plc's Sloane Street branch in the city.

There are fewer luxury properties for sale in prime London neighbourhoods even as demand is rising. Residential purchases in the Westminster and Kensington & Chelsea boroughs, where average house prices exceed £1.3 million, are down 23 per cent from the average since 1996, according to London Central Portfolio Ltd, which buys and manages prime rental property investments.

About 100 properties worth at least £20 million have been purchased since 2006 - a category that's less than 10 per cent of the prime central London market. Most deals of that size are now handled by buying agents, Mr de Keyzer said. The scarcity of prime homes for sale lifted prices in central London by 23 per cent since a year-long slump ended in March 2009, Knight Frank LLP estimates.

Agents have to court private banks or wealth managers to generate new leads to sustain the deal flow. Dozens of individuals, many former brokers, have set up on their own as overseas buyers flocked to London. 'All you have to do is two or three deals a year and you earn as much as you did before,' said Johnny Turnbull, who has worked independently since 2006 after heading the London arm of Prime Purchase, Savills's buying-agent arm.

Some independent buying agents say rivals owned by brokers have a conflict of interest because their companies represent both the buyer and the seller. 'They're trying to milk the fees at both ends,' said Francis Long, who set up buying agency Hanslips 12 years ago.

Savills and Knight Frank say there are 'Chinese walls' and enough transparency to avoid conflicts, and that few customers have problems with the arrangement. Buying agents rely on relationships with brokers, developers and owners to get their customers first in line for a home. -- Bloomberg

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

BT : Chinese state firm sinks roots in S'pore, plans to take on the world

Business Times - 18 Aug 2010

Chinese state firm sinks roots in S'pore, plans to take on the world

MCC Land uses Bukit Batok base to tap the region

By EMILYN YAP

(SINGAPORE) A Chinese state-owned enterprise is quietly growing its global footprint out of a nondescript industrial building in the leafy suburbs of Bukit Batok.

The 19th floor has been taken up by China Metallurgical Group Corporation (MCC), which has businesses stretching across natural resource exploration, equipment fabrication, engineering, construction and property development around the world.

MCC has been in Singapore for almost 20 years, registering its construction unit China Jingye Engineering Corporation as early as 1996. But it was only with the recent incorporation of its property development unit MCC Land that the market sat up and took notice.

MCC Land is eyeing expansion - literally. Managing director Tan Zhiyong has hanging in his office a large map of Singapore dotted with stickers: two pink ones for the land parcels it has bagged, and more than 20 green ones for other plots that the government has to offer.

'We will pursue long- term development in Singapore,' says Mr Tan in Mandarin in an interview with The Business Times. 'We are not here to offer just one or two projects. We plan to offer long-term real estate services just like a local developer.'

In time to come, MCC Land may even go regional, partnering other developers to enter countries such as Malaysia and Indonesia.

Registered only in February, MCC Land stirred up the property market in March when it pipped big boys such as Far East Organization to win the state tender for an executive condominium site in Yishun. Its bid of $127.8 million or $281 per square foot per plot ratio (psf ppr) far exceeded analysts' expectations.

Just three months later, it took home another residential plot in Sembawang by offering $131.7 million or $387 psf ppr - a price that again surpassed market estimates.

There were rumblings among market watchers about the high bids but Mr Tan plays down these concerns. MCC Land made reasonable bids given that they were not too far off from the second and third-placed ones, he says.

Furthermore, China Jingye will be the contractor for both sites and construction costs will be lower, giving MCC Land a competitive edge, Mr Tan says. 'On the whole, we will not be charging high prices just because our bids were higher.'

MCC Land plans to launch The Canopy, an executive condominium project with about 400 units in Yishun in Q4. And in Sembawang, it could roll out a condominium with about 300 units in Q1 next year. Both projects will have lush landscaping and water features for a tropical resort feel.

Mr Tan acknowledges that consumers may not be familiar with MCC Land yet. 'We can't say we weren't worried. Some may know us as a contractor but we are quite new to the market as a developer,' he says.

To ensure that its projects will appeal to consumers here, the firm engaged local architects Surbana and SAA. It also sought feedback from local employees during the design process. 'I believe many people will like our products when they are launched,' Mr Tan says.

Some have wondered why MCC Land chose to enter the Singapore property market this year, amid fierce competition for sites and rising land prices. And there is a bigger question: why would a Chinese developer be interested in tiny Singapore when there are still so many business opportunities in vast China?

MCC has property projects in cities such as Beijing, Nanjing and Wuhan but it has to venture abroad, Mr Tan says. This is something that the Chinese government has been encouraging state-owned enterprises to do. 'To be an international corporation, we can't have operations only in China . . . To build our brand, we have to expand overseas,' he says.

MCC has gained a good understanding of the Singapore market, so becoming a developer here was the next logical step. 'We have handled so many construction projects and real estate is a major part of MCC's business. So it's quite a natural progression for us to go into property development,' Mr Tan says.

Singapore's property market is attractive because it carries lower risks, offers more stable returns, and provides opportunities for regional expansion, he adds. MCC Land has plans to use the experience it gains here to enter other markets such as Indonesia and Malaysia.

It also helps that Singapore's culture is not too different from China's, Mr Tan says. Perhaps as proof of how easy it is to live here, he has settled down with his wife and two children for the last 14 years.

MCC Land is taking competition with local developers in its stride. 'No company can monopolise a market. It's not good for consumers too,' Mr Tan says. 'Every market is the same - the Chinese come to Singapore, Singaporeans go to China. We are all competing in the same market.'

In fact, he believes more developers from the Chinese mainland could come for a slice of the property pie. There is evidence of this happening. Last year, China Sonangol Land bought 21 Angullia Park from OUE for $283 million. Qingdao Construction, which started taking on property development projects some years ago, also won the tender for a site in June.

'Singapore is a free market and there aren't many investment restrictions. Some private developers like Singapore and may even wish to immigrate here,' Mr Tan says. 'I think there will be more and more Chinese developers entering the Singapore market.'

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



Mr Tan: We will pursue long-term development here. We aren't here to offer just one or two projects. We will offer long-term real estate services just like a local developer

ST : Council for Estate Agencies

Aug 17, 2010

Council for Estate Agencies

A NEW statutory board will be set up under the Ministry of National Development to serve as a regulator for the real estate industry here,under the Estate Agents Bill tabled in Parliament on Monday.

To be christened the Council for Estate Agencies (CEA), the regulator will take over the Inland Revenue Authority of Singapore's current role in licensing real estate agencies.

The CEA would be empowered to prescribe codes of practice for estate agencies and agents, and ensure that agreements between agencies and clients do not contain unfair clauses.

Estate agents will be required to register with the CEA, pass an examination and possess the necessary qualifications.

Each agency will also be required to appoint a key executive officer, who will be responsible for the overall management of the business and the supervision of all its agents.

The Bill also empowers the CEA to investigate complaints against agencies and agents, and to mete out suitable penalties, including suspensions and fines.

Information on all registered estate agents, including the name of the agency they work for and disciplinary actions taken against them, will be made available on a public register.

ST : Sales of new private homes surge in July

Aug 17, 2010

Sales of new private homes surge in July

By Joyce Teo

BUYERS returned to the private home market with an extra spring in their step after a lacklustre June laid low by school holidays, the World Cup and the euro zone crisis.

Developers sold almost twice as many new homes last month as they did in June in what some experts are calling a pre-Hungry Ghost Month burst.

Dr Chua Yang Liang, Jones Lang LaSalle's research head for South-east Asia, said the July number is 'a bit of a seasonal spike' as developers and buyers rush to act before the traditionally inauspicious month.

This 'pre-hunger rush' has also been seen in previous years, he said.

There were 1,544 new private homes sold in July against 847 in June, while developers launched 1,335 units compared with 1,010 in the previous month, according to the Urban Redevelopment Authority (URA) yesterday.

New private home sales totalled a robust 9,957 units for the first seven months.

While sales last month were relatively strong, buying interest remained selective with transactions lifted mostly by three new launches.

The top seller was The Scala near the Circle Line's Lorong Chuan station. Officially launched late last month, it sold 400 out of 468 units at a median price of $1,173 per sq ft.

Terrene at Bukit Timah - near the future Beauty World MRT station - sold 162 out of 172 units at a median price of $1,247 psf, while 368 Thomson sold out all 157 units last month at a median price of $1,403 psf.

Local buyers continued to drive the market in July, shown by the high take-up in suburban projects or those outside the central region, experts said.

Projects in the city fringes did relatively well. As with the suburban spots, developments near MRT stations or other key amenities with affordable pricing had better take-up rates, said Dr Chua.

These include the sold-out Centra Studios and Haig 162, and the near sold-out Leicester Suites: All offered affordably priced small format units, said CBRE Research.

Apart from 368 Thomson, prime projects did not attract much attention.

DTZ's head of South-east Asia research, Ms Chua Chor Hoon, said strong buying interest in the mass and mid-end segments continues to be fuelled by low interest rates and an improving economy.

PropNex chief executive Mohamed Ismail noted that the strengthening economy has raised slightly the threshold for the price per square foot that buyers are willing to pay.

A fairly busy July is expected to give way to a slower August because developers are likely to launch fewer units during the Hungry Ghost Month from Aug 10 to Sept 7.

'As we enter the month, coupled with the possibility of a double-dip recession in the US and a sluggish UK economy, we expect sales volume to weaken in August by about 25 to 35 per cent,' said Dr Chua.

'Some volatility may be experienced in the second half as a result of seasonal fluctuations and as the market awaits a clearer growth direction in the US and UK.'

ST : Temple loses TOP, devotees in a fix

Aug 17, 2010

Temple loses TOP, devotees in a fix

Loss of fire permit in July leads to premises being made off limits

By Yen Feng

DEVOTEES of the Cheng Teck Sian See Buddhist Association have been shut out of their temple during the ongoing Seventh Month activities.

The temple recently lost its temporary occupation permit (TOP) and fire permit. Without these, its premises are off-limits and members who want to pray are being turned away.

Already, the temple's trustees, who were occupying offices on the ground floor, have moved out.

The century-old temple in Geylang is said to have about 2,000 followers and holds some 800 Chinese ancestral tablets.

On July 19, the temple's trustees mailed to more than 200 members a notice that said: 'Due to the revocation of the TOP, we regret to inform that we are unable to conduct the Seventh Month puja celebrations in the premises this year.'

Ancestral veneration during the lunar seventh month is a cherished Chinese tradition and some devotees have expressed their disappointment at what has happened.

Mr Alvin Yap, 50, whose father's ancestral tablet has been kept at the temple for more than 20 years, said: 'This is a helpless situation for all of us. I hope the people involved in this can get to the root of the matter soon.'

Construction of the temple's new home in Geylang Lorong 20 began in 2007, after its original home in Tiong Bahru was reclaimed by the Government several years earlier.

The new, seven-storey building received its TOP last August.

But a site check conducted by Building and Construction Authority (BCA) officers in March found something amiss: a fire escape staircase with headroom of 1.8m, shorter than the approved height of 2m.

Around the same time, checks by the Singapore Civil Defence Force (SCDF) discovered several other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.

In March, the SCDF downgraded the temple's fire safety certificate to a temporary fire permit and sent a letter to the temple's architects, WP Architects, saying it had until June 30 to regain the certificate.

A month later, the temple's TOP was partially suspended by the BCA - its third to seventh floors could no longer be used.

On July 9, the architects received a second letter from the SCDF that said that because the deadline for fire safety measures had not been met, the temporary permit was no longer valid.

This, in turn, led to another issue: Because the temple now did not have a fire permit, the BCA suspended the remainder of the temple's TOP for its first and second floors.

WP Architects says the matter is with its lawyers now and declined to comment further.

The temple's trustees and the parties involved in the temple's construction have locked horns a number of times over the last two years.

This year, the temple and its main contractor, Kenston Construction, went to court over the building's defects and outstanding payment issues.

In April, Kenston sued the temple and one of its trustees over comments made to the media about the temple's building safety issues.

The two parties, along with others involved in the matter, are seeking legal arbitration.

zengyan@sph.com.sg


--------------------------------------------------------------------------------

Timeline of events

2007: Construction begins on the temple's new home in Geylang Lorong 20.

August 2009: The seven-storey building gets its temporary occupation permit (TOP).

March 2010: BCA officers discover that the headroom for the fire escape staircase is 1.8m. The approved height is 2m.

Around the same time, checks by the SCDF uncover other irregularities, including absent fire doors, misplaced exit signs and missing smoke detectors.

The SCDF downgrades the temple's fire safety certificate to a temporary fire permit. It sends a letter to the temple's architects, WP Architects, saying it has until June 30 to reapply for the building's fire safety certificate.

April 2010: The temple's TOP is partially suspended by the BCA. The third to seventh floors are closed off.

July 2010: WP Architects receives a second letter from the SCDF that says that the temporary permit is no longer valid as the deadline has not been met.

As the temple does not have a fire permit, the BCA suspends the remainder of the temple's TOP for its first and second floors.



The TOP for the Cheng Teck Sian See Buddhist Association's building in Geylang, which was partially suspended by the BCA in April, was fully suspended last month. -- ST PHOTO: BENJAMIN NG

BT : S'pore still cheaper to build in than HK and London: DLS

Business Times - 17 Aug 2010

S'pore still cheaper to build in than HK and London: DLS

Data refutes earlier report that S'pore is costliest Asian country to build in

By UMA SHANKARI

SINGAPORE is still a much cheaper place to build than Hong Kong and London, the director of Davis Langdon & Seah Singapore (DLS) said yesterday - refuting an earlier report that found otherwise.

DLS data shows that at end-Q1 2010, construction costs in Singapore for standard apartments, standard office space and 'prestige' office space were lower than those in London, Tokyo, Sydney and Hong Kong.

'Cost data recorded by our offices in the region has clearly established that Singapore is the third costliest city to build in (in the region) after Tokyo and Hong Kong,' DLS director Seah Choo Meng told BT in an interview.

Construction costs in London and Sydney have also been consistently higher than in Singapore, he said.

Mr Seah was responding to a report released two weeks ago by EC Harris that said Singapore is now the most expensive Asian country to build in except Japan and the 10th most expensive worldwide. This was despite a 5-8 per cent drop in tender prices here last year, EC Harris said.

Tender prices here were higher than in Hong Kong and London, according to EC Harris's international construction cost report covering 50 countries. Switzerland was the most expensive country to build in globally, the report found. Hong Kong was ranked 21st globally while the UK - or London - was ranked 16th.

Yesterday, Mr Seah presented DLS data that shows building costs in Singapore are lower than those in London, Tokyo, Sydney and Hong Kong.

The two firms collect data from their worldwide offices from the jobs they handle. The EC Harris report did not include values for Japan because the firm did not have any projects there in the past two years.

The differentiation between the DLS and EC Harris data is partly caused by a difference in how much each of them said tender prices in Singapore fell last year.

The EC Harris report put the fall at between 5 and 8 per cent. But DLS put it at 20 per cent.

Mr Seah noted: 'The Building and Construction Authority's (BCA) record has shown a drop of 15 per cent; Rider Levett Bucknall (another consultancy) indicated a drop of 18.5 per cent while DLS saw a drop in the region of 20 per cent.'

EC Harris also said the Singapore market recovered on the back of sustained demand and strong economic growth - leading to tender price growth in the first six months of the year.

Mr Seah agrees the market recovered, but said tender prices have only climbed by 3 per cent since the start of this year - which means construction prices are still a long way from their peaks after last year's 20 per cent drop.

Although Singapore is not the most expensive city in Asia in which to build, BCA is looking at how to boost construction cost-efficiency to bridge a gap in productivity between Singapore and other advanced countries, Mr Seah said. The productivity of the construction industry in Singapore is only half of that in Australia's and one third of that in Japan.

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

BT : Developers sell 9,957 homes in first 7 months

Business Times - 17 Aug 2010

Developers sell 9,957 homes in first 7 months

Outlook still positive but buyers will be more selective with greater spread of projects

By KALPANA RASHIWALA

(SINGAPORE) Developers' sales of private homes surged 82 per cent month on month to 1,544 units in July from the low of 847 units in June, according to latest official figures. This reflects a resumption in home buying, which had taken a breather during the school holidays and World Cup.

However, sales are expected to slip to around 800-1,000 units again in August, on the back of slower launches during the Hungry Ghost Month, say some property agents. After this ends on September 7, both launches and sales will pick up again, they reckon.

In the first seven months of this year, developers have sold 9,957 private homes (excluding executive condos), after last year's strong sales of 14,688 units.

CB Richard Ellis expects the full-year figure will be about 14,000 units. Jones Lang LaSalle's estimate is 13,000-14,000 while DTZ's SE Asia research head Chua Chor Hoon puts the number at 13,000-15,000 units.

'The outlook still remains positive against the backdrop of Singapore's economic growth and the low interest rate environment but buyers will be more selective given that so many Government Land Sale sites are being sold; this will translate to greater choice of new projects.

'Prices have also been on the rise, so potential buyers will be more discerning in picking properties that have better potential for rental income or capital appreciation,' Ms Chua added. DTZ's data shows that secondary market prices of completed private homes appreciated about 6-8 per cent in the first half of this year; her full-year forecast is an 8-13 per cent increase.

CB Richard Ellis executive director (residential) Joseph Tan reckons that developers are unlikely to test new price benchmarks when they resume launches next month. But prices are unlikely to fall below current levels either, as land prices remain high, he adds.

On the other hand, signs of buyer price resistance continue to prevail. Colliers International's analysis of official developer monthly sales data released by Urban Redevelopment Authority shows that the proportion of private homes sold by developers priced at $1,500 psf and below was at its highest level in 10 months in July, at 88 per cent.

The Outside Central Region, where mass-market properties are typically located, accounted for 42.8 per cent of the total 1,544 units sold by developers in July, while the Core Central Region, where the most expensive homes in Singapore are found, had a 17.9 per cent share.

Nonetheless, a handful of buyers picked up properties at top-line prices in July, notes CB Richard Ellis executive director Li Hiaw Ho. The most expensive apartment/condominium unit (in terms of $ per square foot) sold by a developer in July was a unit at Boulevard Vue which fetched $4,600 per square foot. BT understands that Far East Organization sold the high-floor unit of 4,456 sq ft for $20.5 million.

URA's data shows that other high-end deals last month included a unit at The Orchard Residences which sold at $4,099 psf and another at Skyline @ Orchard Boulevard at $3,719 psf.

The least expensive non-landed home was a unit at The Minton in Hougang which was transacted at $612 psf.

July's surge in primary market sales came on the back of three major launches - 368 Thomson, Terrene at Bukit Timah and The Scala at Serangoon Avenue 3. Together, they made up 46.6 per cent of the total 1,544 units developers sold in July.

The top-selling project was The Scala, with 400 units transacted at a median price of $1,173 psf.

Also helping to boost last month's sales were sell-out launches for three projects that comprised mostly one-bedders - the 51-unit Centra Studios at Lorong 25 Geylang, 99-unit Haig 162 and Leicester Suites (46 of its 47 units were sold last month). 'Their success could be attributed to the affordably-priced small-format units they offered,' says CBRE's Mr Li.

Developers launched 1,335 private homes in July, up from 1,010 units in June.

Projects expected to be released after Ghosts Month include NV Residences in Pasir Ris, Twin Peaks on the Grangeford site, Cityscape in Mergui Road and Killiney 118.

Two executive condo projects - the 573-unit Esparina Residences at Compassvale Bow in Sengkang and Chinese developer MCC Land's 406-unit The Canopy in Yishun - are slated for release in October, say market watchers.

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

BT : HK property stocks hit by tighter mortgage lending rules

Business Times - 17 Aug 2010

HK property stocks hit by tighter mortgage lending rules

(HONG KONG) Developers fell in Hong Kong trading after the government tightened mortgage lending rules and said it will increase the supply of land to help cool surging home prices.

Sun Hung Kai Properties Ltd, the world's biggest builder by market value, dropped 4.1 per cent to HK$110 at the 4pm close of trading, its biggest decline since May 25. Cheung Kong Holdings Ltd, controlled by Hong Kong's richest man Li Ka-shing, declined 2.3 per cent.

Property transactions in some of the city's largest residential complexes slumped by more than half over the weekend, according to Centaline Property Agency Ltd. Financial Secretary John Tsang said the government won't hesitate to introduce further measures if necessary, after saying on Aug 13 that home prices are approaching the level of 1997, the height of a previous bubble that was followed by a six-year slump.

The measures 'will hurt sentiment on property stocks,' JPMorgan & Chase Co analysts Raymond Ngai and Ryan Li wrote in a note yesterday. 'The market will require a bigger discount for developers on concerns of property bubbles and ongoing policy measures.'

The government has been seeking to rein in home prices that have soared about 45 per cent since the beginning of 2009, boosted by mortgage rates at the lowest in two decades and buying by mainland Chinese.

Henderson Land Development Co, the developer controlled by billionaire Lee Shau-kee, declined 3.2 per cent to HK$48.45. Sino Land Co dropped 5.7 per cent to HK$13.28, the biggest loser among the seven-member Hang Seng Property Index. The gauge fell 2.6 per cent yesterday, bringing its loss this year to 3.9 per cent.

Down payments for apartments costing HK$12 million (S$2.1 million) or more will rise to 40 per cent, from 30 per cent, with immediate effect, Hong Kong Monetary Authority chief executive Norman Chan said on Friday. The government will increase land sales next year, Mr Tsang said.

'The basket of measures will have the effect of stabilising prices,' said Buggle Lau, chief analyst at property agency Midland Holdings Ltd.

Weekend transactions of used apartments at 10 of Hong Kong's biggest private residential complexes fell 53.5 per cent from a week earlier to 32, Centaline, one of the city's largest real estate agencies, said.

'The demand-side measures should have an immediate impact on the market,' Mirae Asset Management Ltd analysts Keith Yeung and Stephanie Lau wrote in a report. 'Speculative activities will come down sharply and developers' premium pricing capability is likely to be affected.' Home prices will fall 10 per cent, and Sun Hung Kai and Sino Land are the 'most vulnerable' developers because they bought 'expensive parcels of land,' according to the Mirae analysts.

Sun Hung Kai on June 8 paid HK$10.9 billion for a residential site in the Ho Man Tin district. The price, which beat a Bloomberg News estimate by 30 per cent, is the highest paid in a government auction in urban Hong Kong since the market peaked in 1997.

Sino Land, one of the biggest commercial landlords in the Tsim Sha Tsui district, and K Wah International Holdings Ltd in December bought two residential sites for HK$10.4 billion in what was then the city's biggest land auction in almost two years.

Last week's measures came as Hong Kong's economy expanded a more-than-estimated 6.5 per cent in the second quarter, according to a government report last week, topping the 6.3 per cent median forecast of 13 economists in a Bloomberg survey. Hong Kong's economy will grow between 5 per cent and 6 per cent for the full year, the government said, revising up a previous forecast.

For properties worth HK$12 million or less, the maximum loan amount will be capped at HK$7.2 million, meaning down payments will increase for any property valued above HK$10.3 million. Luxury homes in the city are defined as those costing at least HK$10 million, or bigger than 1,000 square feet.

Down payments for investment properties will rise to 40 per cent from 30 per cent, Mr Chan said.

Since the early 1990s, Hong Kong banks have been restricted from lending more than 70 per cent of the purchase price of a home, to reduce the risk of loan losses from a market crash. To help the market recover from the 1998 crash, buyers were subsequently allowed to borrow a further 15 per cent of their home's value as long as they obtained mortgage insurance, a move that increased affordability while limiting risk for banks.

The market has already been cooling, with new mortgage approvals declining to HK$35.4 billion in June, down 6.2 per cent from May, according to HKMA data. Some 0.03 per cent of mortgage loans were delinquent, while only 310 owners in the city owe more on their homes than their properties are worth.

'Our house view on property developers is 'cautious' because the government is determined to curb the overheating real-estate market,' said Steve Tse, a research manager at BEA Union Investment Management. 'They don't want a bubble, and they want to get it under control.' - Bloomberg

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

BT : Fusionopolis' Solaris 60% leased

Business Times - 17 Aug 2010

Fusionopolis' Solaris 60% leased

By EMILYN YAP

SOLARIS, an extension of the Fusionopolis research cluster at Buona Vista, has been 60 per cent leased ahead of its completion by the end of the year.

The developer Soilbuild Group is in 'advanced negotiations' with other potential tenants.

Soilbuild's executive director Low Soon Sim gave BT these updates following the release of the company's second quarter results last week.

Organisations which have signed leases at Solaris include government agency Spring Singapore, software designer Autodesk, video game creator and publisher Ubisoft, and green building consultancy Kaer.

Spring Singapore is Solaris' largest tenant to date, taking up some 15 per cent of the total net lettable area of around 430,000 sq ft. Tenants should be moving in in the early part of next year, Mr Low said.

Soilbuild won the tender for Phase 2B of Fusionopolis in April 2008 and put in around $140 million to develop Solaris on the 83,248 sq ft site.

The building is designed by famed architect Ken Yeang and will be decked with roof gardens and other energy saving features.

Most of the space at the Solaris is set aside for offices. There will also be a childcare centre, and retail outlets will occupy some 3,000 sq ft of space. Soilbuild plans to start marketing the retail space this quarter.

JTC Corporation, which oversees the development of Fusionopolis as a research centre for the infocommunication, media, science and engineering industries, expects the completion of Solaris to boost human traffic flow in the area.

Fusionopolis Phase 1, which was officially opened in October 2008, currently has a working population of around 2,500 people. According to The Straits Times, business has been poor for retail outlets there. Just about 57 per cent of the retail space has been taken up.

JTC estimates that the daily average human traffic flow will increase to 4,000 when Solaris is completed. The working population could grow further as Fusionopolis expands through more phases.

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

ST : No quick fix for junk mail menace

Aug 16, 2010

No quick fix for junk mail menace

Pasting fliers on common property attracts fine, but flats' door grilles are a grey area

By Jamie Ee Wen Wei

THEY are here, there, everywhere. It's the invasion of advertising fliers, and Housing Board residents are upset as it seems that very little can be done to put a stop to the problem.

They are irked because the culprits, unable to drop fliers in anti-junk-mail letter boxes, now slip the sheets between flats' door grilles.

The accumulated paper can slip onto the floor and create a mess. The fliers at the door also show that a flat is vacant or the family is away.

While the authorities can fine advertisers for sticking fliers on common property, slotting these sheets into the grilles is a grey area.

Eunos resident Nadia Abdul Muttalib wrote to The Straits Times two weeks ago. The manager in her 30s came home one night to find a pile of ash outside a neighbouring unit which had been vacant for some months. She suspected that pranksters had set fire to fliers left outside it.

Her corridor has also been strewn with fliers from estate agents and home maintenance firms, among others.

The litterbugs should be stopped, she said in her Aug3 letter, which prompted at least 11 others to write in.

Sengkang resident Mark Chan, 32, travels once every three months, and is worried that an accumulation of fliers outside flats could be a telltale sign that no one is home, making them a target for burglars.

Advertisers have resorted to such tactics as a result of anti-junk-mail locking devices installed on letter boxes in HDB estates. These mean fliers cannot be slotted in.

MPs interviewed acknowledge their residents' complaints, adding that there is no straightforward solution to the longstanding problem.

Aljunied GRC MP Cynthia Phua says the town council there has fined businesses for sticking advertisements on common property in the estate, but not for leaving fliers at the door.

'It's neither vandalism nor littering because they are left at the door grille,' said the Aljunied Town Council chairman, noting that the issue is a tricky one.

It is an offence to paste fliers on common property without prior written approval from the town council. The maximum penalty is $5,000.

Madam Halimah Yacob, a Jurong GRC MP, said the town council there receives an average of five complaints a month about unwanted fliers left at residents' doors.

Jurong Town Council has put up noticeboards at the lift lobbies of 10 residential blocks and commercial buildings in the town centre for advertisers to use for free. She said this solution has been quite effective, though not wholly so.

The town council also advises junk mailers to advertise in its newsletter.

Ms Lee Bee Wah, an MP for Ang Mo Kio GRC, flagged the issue of unwanted fliers in Parliament in May.

In its written reply, the Ministry of National Development said the town councils and HDB cannot stop businesses - estate agencies included - from distributing fliers to HDB households. It advised residents to refrain from responding to the fliers to discourage such marketing practices.

Mr Ben Ang, 29, who runs a printing and distribution firm, said his staff avoid units which carry 'No fliers' signs. 'If there is a notice outside the home to say no depositing of junk mail, we will respect the family,' he said.

Estate agent Albert Wong, 50, defended such door-to-door distribution, saying it is targeted, and it works. He is thinking of using telemarketing but feels fliers are 'less intrusive' because one can easily throw them away.

'Unless we go back to using the old letter box system, I have no choice but to distribute the fliers door to door,' he said.

jamieee@sph.com.sg


--------------------------------------------------------------------------------

DIFFICULT TO FINE

'It's neither vandalism nor littering because they are left at the door grille.'

Aljunied GRC MP Cynthia Phua, noting that the issue was a tricky one

BT : UK house asking prices fall in August

Business Times - 16 Aug 2010

UK house asking prices fall in August

LONDON - Asking prices for homes in England and Wales fell by 1.7 per cent in August after an oversupply of property coincided with a seasonal dip in demand, property website Rightmove said on Monday.

Prices fell by their biggest margin since a 2.2 per cent decline recorded in December, another period when the holiday season depresses prices.

Rightmove said average stock per agent rose for a sixth consecutive month during the latest survey period and the number of properties added to its website jumped 41 per cent from a year earlier.

'No one really wants to come to market in August unless they have to. It shows these new sellers have a compelling need to sell,' Rightmove commercial director Miles Shipside said in a statement.

The latest month-on-month price fall comes after a 0.6 per cent decline in July, the first dip this year. The Royal Institution of Chartered Surveyors and mortgage lender Nationwide both reported seasonally adjusted falls in selling prices last month.

Rightmove said asking prices were 4.3 per cent higher than a year ago, above July's 3.7 per cent annual growth rate but below the 5.0 per cent seen in June.

The West Midlands saw the biggest monthly price fall, down 4.4 per cent, closely followed by London with a 4.1 per cent drop.

'The number of sellers coming to market in the capital is the highest seen in the month of August since 2007,' Shipside said.

'New seller levels seem to be getting back to a degree of pre-credit-crunch normality, but mortgage levels have a lender-imposed ceiling. Its restricted height is giving the market a long-term headache as pent-up buyer demand continues to bang up against it.'

Rightmove said it based its data on a survey of 116,879 asking prices on its website between July 11 and Aug 7, which it says covers 90 per cent of property marketed via estate agents in England and Wales. -- REUTERS

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