Nov 26, 2009
Thumbs up for ending estate agents' dual role
Respondents in public consultation exercise also want an entrance exam
By Joyce Teo
A PROPOSAL to ban property agents from representing both the seller and buyer in the same transaction has generated strong public interest - with many giving the idea the thumbs up.
This practice, widespread in the HDB resale market, leaves the agent with a clear conflict of interest.
But there is likely to be resistance from some agents who stand to lose commissions if it is implemented.
The proposed ban is one of a series of possible changes in a planned industry overhaul after years of complaints about questionable practices by some agents.
A public consultation exercise on a planned real estate regulatory framework drew more than 200 comments and suggestions, said the Ministry of National Development (MND) yesterday.
The proposal most commented upon was the ban on dual representation.
Many respondents also backed a plan to ensure agents have a minimum entry qualification - probably an entrance exam. They felt it was important for the exam to cover ethics, given that complaints often stem from unethical practices.
Most respondents were 'generally supportive' of the key proposals, MND said. These also include mandatory accreditation of agencies and agents, keeping a public central registry for accredited agents, setting up an independent tribunal to resolve real estate disputes, and introducing a demerit points system.
The views received during the exercise - conducted from Oct 13 to Nov 17 - were generally consistent with feedback gathered during industry consultations a month earlier, MND said. The respondents included property agents and clients who had been caught in unpleasant encounters with agents, said a spokesman.
The Government aims to better safeguard consumers' interests and raise the level of professionalism in the industry.
Some of the key proposals are long overdue, some industry players said.
Most would be welcomed by the industry, but some agents may not be happy if dual representation is disallowed.
An agent representing both sides in an HDB deal can get two commissions, even though there is clear conflict as sellers would want the highest price for their property while buyers want the lowest.
'This practice has been around since the first day HDB flats were traded. Obviously, there will be some resistance from property agents,' said C&H Realty managing director Albert Lu.
As HDB flat transactions can be complex, it is useful for buyers and sellers to have their own agents, to ensure that an unrepresented party does not delay or mess up the transaction, he said.
Some respondents suggested disallowing dual representation for rental deals.
There were suggestions to mandate co-broking, to stipulate that all buyers are to engage an agent and to require agents to inform sellers of all offers, regardless of the offer price or agent fees.
There were also calls for a standard commission guideline to curb undercutting among agents and to protect less educated consumers, for instance.
Respondents had also called for the licensing of individual agents. While the Government had called for industry-led accreditation, some respondents wanted the Government to handle this.
Some also wanted to see minimum educational qualifications. Mr Lu felt this was unnecessary. Having paper qualifications does not guarantee an agent will act ethically, he said. Passing an entrance exam is enough, even though it does not ensure ethical behaviour. A Government accreditation board could suspend errant agents, he added.
Mr Lu felt that the entrance exam should also be conducted in Chinese, for the benefit of a group of older, experienced agents who are Chinese-educated.
PropNex chief executive Mohamed Ismail expects a central registry to come in to help control rogue agents, who are now able to switch agencies unchecked. Some respondents suggested posting the names of blacklisted agents online to warn the public.
Suggestions from the public include the use of standard forms and contracts as well as disallowing agencies and agents from buying new properties from developers with a view to selling them.
MND expects to announce key elements of the framework early next year.
Thursday, November 26, 2009
BT : 80 units sold at Marina Bay Suites preview
Business Times - 26 Nov 2009
80 units sold at Marina Bay Suites preview
Developer not expected to release more units in the condo until 2010
By KALPANA RASHIWALA
ABOUT 80 of the 90 units previewed at Marina Bay Suites yesterday have been sold, at an average price understood to be slightly above $2,300 per square foot.
However, the consortium developing the project said that the 'average price range was between $2,200 psf and $2,500 psf'. Only three and four-bedroom units on the low to mid- floors at the 66-storey development were released for yesterday's preview.
'Unit sizes range from 1,572 to 2,691 sq ft for the three to four-bedroom units,' said a spokesman for Raffles Quay Asset Management, the asset manager for Marina Bay Suites.
BT understands that the consortium developing the 221-unit, 99-year leasehold condo, does not plan to offer any more units in the development until next year. The show suite for the condo will be completed in the first half of next year and housed in an office tower in the Marina Bay Financial Centre (MBFC).
The condo, MBFC and an earlier condo project, Marina Bay Residences, are being developed on a 99-year leasehold plot sold by the Singapore government in 2005 to a consortium controlled by Keppel Land, Cheung Kong Holdings and Hongkong Land Holdings.
Yesterday's preview was held on the mezzanine level of One Raffles Quay, which was also developed earlier by the three partners. The project is being marketed by CB Richard Ellis and DTZ.
'There are no immediate plans to officially launch Marina Bay Suites (MBS). This private preview was for invited clients, business associates, registered prospects, staff and directors. We will launch MBS at the appropriate time,' the spokesman said.
Initially, the consortium had planned to release only 50 units but decided to add 40 more due to keen demand from potential buyers.
BT understands that at least a third of the buyers were foreigners (including permanent residents) and companies, with Indonesians being the predominant foreign buyers. Well-heeled Singaporeans also bought units in the condo.
Prices of three-bedders start from $3 million or about $1,908 psf, BT understands.
The least expensive four-bedder (a 2,045 sq ft unit) cost $4.3 million or $2,103 psf. For the larger four-bedroom apartments of 2,680 sq ft, prices start from $6.1 million or $2,276 psf.
In the spotlight: The developer says that the 'average price range was between $2,200 psf and $2,500 psf'
80 units sold at Marina Bay Suites preview
Developer not expected to release more units in the condo until 2010
By KALPANA RASHIWALA
ABOUT 80 of the 90 units previewed at Marina Bay Suites yesterday have been sold, at an average price understood to be slightly above $2,300 per square foot.
However, the consortium developing the project said that the 'average price range was between $2,200 psf and $2,500 psf'. Only three and four-bedroom units on the low to mid- floors at the 66-storey development were released for yesterday's preview.
'Unit sizes range from 1,572 to 2,691 sq ft for the three to four-bedroom units,' said a spokesman for Raffles Quay Asset Management, the asset manager for Marina Bay Suites.
BT understands that the consortium developing the 221-unit, 99-year leasehold condo, does not plan to offer any more units in the development until next year. The show suite for the condo will be completed in the first half of next year and housed in an office tower in the Marina Bay Financial Centre (MBFC).
The condo, MBFC and an earlier condo project, Marina Bay Residences, are being developed on a 99-year leasehold plot sold by the Singapore government in 2005 to a consortium controlled by Keppel Land, Cheung Kong Holdings and Hongkong Land Holdings.
Yesterday's preview was held on the mezzanine level of One Raffles Quay, which was also developed earlier by the three partners. The project is being marketed by CB Richard Ellis and DTZ.
'There are no immediate plans to officially launch Marina Bay Suites (MBS). This private preview was for invited clients, business associates, registered prospects, staff and directors. We will launch MBS at the appropriate time,' the spokesman said.
Initially, the consortium had planned to release only 50 units but decided to add 40 more due to keen demand from potential buyers.
BT understands that at least a third of the buyers were foreigners (including permanent residents) and companies, with Indonesians being the predominant foreign buyers. Well-heeled Singaporeans also bought units in the condo.
Prices of three-bedders start from $3 million or about $1,908 psf, BT understands.
The least expensive four-bedder (a 2,045 sq ft unit) cost $4.3 million or $2,103 psf. For the larger four-bedroom apartments of 2,680 sq ft, prices start from $6.1 million or $2,276 psf.
In the spotlight: The developer says that the 'average price range was between $2,200 psf and $2,500 psf'
BT : TripleOne Somerset to open after $50m face-lift
Business Times - 26 Nov 2009
TripleOne Somerset to open after $50m face-lift
Ex Singapore Power Building refurnished to include retail and F&B space
By UMA SHANKARI
THE former Singapore Power Building in Somerset Road will re-open in January 2010 as TripleOne Somerset - after a $50 million make-over.
The office building - acquired by Singapore-based Pacific Star Group in February 2008 for more than $1 billion - has been refurbished to include two floors of retail and food and beverage (F&B) space with a total area of 60,000 sq ft.
Pacific Star converted some of the net lettable area (NLA) into retail space, which has been leased out at better rents. Rents for office space in TripleOne Somerset are now $6-$8 per sq ft on average, while retail rents are at $15-$20 psf.
The conversion of lower value space to higher value retail use has enhanced the building, as with other properties in Pacific Star's portfolio, such as Wisma Atria in Orchard Road, said Benett Theseira, Pacific Star's president of direct investments.
'By adding the additional retail space, we have improved our revenue (from the building) about 10 per cent,' he said.
Looking ahead, the building should be able to command higher office rents with the new retail and F&B facilities in place, Mr Theseira said. Rents could climb by 5-10 per cent when current three-year leases expire, he said.
When it was acquired by Pacific Star, the building's NLA was 550,000 sq ft - all designated for office use.
After refurbishment, there is about 500,000 sq ft of office space, 60,000 sq ft of retail space and an outdoor refreshment area of about 5,000 sq ft.
The retail and F&B extension was created by converting areas previously occupied by an auditorium, cafeteria and three office units, empty space in the lobby areas facing Somerset Road and void areas above the carpark.
Further NLA expansion will be explored in 18-24 months, Pacific Star said.
It has so far secured commitments for more than 75 per cent of the mall space and is confident the mall will be fully leased when it opens in January 2010.
Tenants signed up so far include dining chain Applebee's, whose outlet at the mall will be its first in Southeast Asia. Singapore's largest supermarket chain NTUC FairPrice will open a 14,500 sq ft gourmet supermarket at the mall to cater to tenants and people living nearby.
Besides creating retail and F&B space, Pacific Star is upgrading the office building's common areas such as the lift and reception lobbies to appeal to a wider range of tenants.
The office space is now 95 per cent leased. Singapore Power, the anchor tenant, continues to occupy around 200,000 sq ft of office space under a lease-back arrangement.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
More than 75% of the mall space taken up: Tenants signed up so far include dining chain Applebee's and NTUC FairPrice
TripleOne Somerset to open after $50m face-lift
Ex Singapore Power Building refurnished to include retail and F&B space
By UMA SHANKARI
THE former Singapore Power Building in Somerset Road will re-open in January 2010 as TripleOne Somerset - after a $50 million make-over.
The office building - acquired by Singapore-based Pacific Star Group in February 2008 for more than $1 billion - has been refurbished to include two floors of retail and food and beverage (F&B) space with a total area of 60,000 sq ft.
Pacific Star converted some of the net lettable area (NLA) into retail space, which has been leased out at better rents. Rents for office space in TripleOne Somerset are now $6-$8 per sq ft on average, while retail rents are at $15-$20 psf.
The conversion of lower value space to higher value retail use has enhanced the building, as with other properties in Pacific Star's portfolio, such as Wisma Atria in Orchard Road, said Benett Theseira, Pacific Star's president of direct investments.
'By adding the additional retail space, we have improved our revenue (from the building) about 10 per cent,' he said.
Looking ahead, the building should be able to command higher office rents with the new retail and F&B facilities in place, Mr Theseira said. Rents could climb by 5-10 per cent when current three-year leases expire, he said.
When it was acquired by Pacific Star, the building's NLA was 550,000 sq ft - all designated for office use.
After refurbishment, there is about 500,000 sq ft of office space, 60,000 sq ft of retail space and an outdoor refreshment area of about 5,000 sq ft.
The retail and F&B extension was created by converting areas previously occupied by an auditorium, cafeteria and three office units, empty space in the lobby areas facing Somerset Road and void areas above the carpark.
Further NLA expansion will be explored in 18-24 months, Pacific Star said.
It has so far secured commitments for more than 75 per cent of the mall space and is confident the mall will be fully leased when it opens in January 2010.
Tenants signed up so far include dining chain Applebee's, whose outlet at the mall will be its first in Southeast Asia. Singapore's largest supermarket chain NTUC FairPrice will open a 14,500 sq ft gourmet supermarket at the mall to cater to tenants and people living nearby.
Besides creating retail and F&B space, Pacific Star is upgrading the office building's common areas such as the lift and reception lobbies to appeal to a wider range of tenants.
The office space is now 95 per cent leased. Singapore Power, the anchor tenant, continues to occupy around 200,000 sq ft of office space under a lease-back arrangement.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
More than 75% of the mall space taken up: Tenants signed up so far include dining chain Applebee's and NTUC FairPrice
ST : Buyers snap up most of the 90 units released for sale yesterday
Strong sales at Marina Bay Suites preview
Buyers snap up most of the 90 units released for sale yesterday
By Joyce Teo
An artist's impression of the 99-year leasehold, 221-unit Marina Bay Suites condominium. Real estate experts say the plus factors of the property are its proximity to the integrated resort coming up in the area and the finite supply of homes there. -- PHOTO: MARINA BAY FINANCIAL CENTRE
A one-day preview at the upmarket Marina Bay Suites development saw invited buyers snap up most of the 90 units released for sale at average prices ranging from $2,200 to $2,500 per sq ft (psf).
At least 81 units were bought yesterday at the 99-year leasehold, 221-unit condominium in Marina Bay, whose launch had been delayed by almost two years, said a spokesman for Raffles Quay Asset Management, which manages Marina Bay Financial Centre. The centre has two residential towers - Marina Bay Residences, which sold out in late 2006, and Marina Bay Suites.
Prices achieved were below the expectations the developers had early last year, before the property market slumped as the global crisis took hold.
It was then thought that the condo could be priced around $3,000 psf, given that the most expensive units in Marina Bay Residences and The Sail @ Marina Bay had then traded beyond that price level.
The invited group of buyers yesterday consisted of registered clients, directors and staff working for the developers - a consortium comprising Keppel Land, Hongkong Land and Cheung Kong Holdings.
The condo has units of three- to four-bedrooms ranging in size from 1,572 sq ft to 2,691 sq ft, as well as three larger penthouses.
Yesterday, the three-bedroom units went for between $3 million and $3.7 million.
The smaller four-bedroom units sold for around $4.3 million to $5 million, while the larger four-bedroom units achieved prices of $6.1 million to a shade below $7 million.
About two-thirds of the Marina Bay Suites buyers were Singaporeans, with the balance made up of foreigners, permanent residents and a few companies, said Mr Joseph Tan, executive director for residential properties at one of the marketing agents, CBRE.
Marina Bay Suites had been slated for launch early last year when there was talk that the three-bedroom units would command a price of $4 million to $5 million.
But the market downturn prompted the postponement and, said Mr Tan, the preview had to be pitched at today's prices.
Cushman & Wakefield managing director Donald Han agreed that in today's high-end market, 'you need to provide a discount from the peak levels'.
'The value proposition is there for investors keen on luxury properties,' he said.
'Generally, there may be more upside as prices in the high-end to luxury markets are still about 20 per cent to 25 per cent from the peak levels in early 2008.'
Mr Han said the market is seeing demand slowly returning in the $2,000 psf to $3,000 psf range, but not yet for those priced above these prices.
Experts also said Marina Bay Suites' location is a major selling point.
'The lure factor of Marina Bay properties is the proximity to the integrated resort, and the finite supply of homes there,' said Mr Han.
Caveats lodged for The Sail @ Marina Bay this month showed deals done at between $1,744 psf and $2,800 psf, while Marina Bay Residences deals were done at $2,170 psf to $2,420 psf last month.
Sellers are hoping that values in the area will rise by the time the integrated resort in Marina Bay is completed, he said.
Indeed, Mr Tan said the plan was to launch the condo at 'better prices' in the first half of next year when the integrated resort opens.
The showflat would be ready by then.
Buyers snap up most of the 90 units released for sale yesterday
By Joyce Teo
An artist's impression of the 99-year leasehold, 221-unit Marina Bay Suites condominium. Real estate experts say the plus factors of the property are its proximity to the integrated resort coming up in the area and the finite supply of homes there. -- PHOTO: MARINA BAY FINANCIAL CENTRE
A one-day preview at the upmarket Marina Bay Suites development saw invited buyers snap up most of the 90 units released for sale at average prices ranging from $2,200 to $2,500 per sq ft (psf).
At least 81 units were bought yesterday at the 99-year leasehold, 221-unit condominium in Marina Bay, whose launch had been delayed by almost two years, said a spokesman for Raffles Quay Asset Management, which manages Marina Bay Financial Centre. The centre has two residential towers - Marina Bay Residences, which sold out in late 2006, and Marina Bay Suites.
Prices achieved were below the expectations the developers had early last year, before the property market slumped as the global crisis took hold.
It was then thought that the condo could be priced around $3,000 psf, given that the most expensive units in Marina Bay Residences and The Sail @ Marina Bay had then traded beyond that price level.
The invited group of buyers yesterday consisted of registered clients, directors and staff working for the developers - a consortium comprising Keppel Land, Hongkong Land and Cheung Kong Holdings.
The condo has units of three- to four-bedrooms ranging in size from 1,572 sq ft to 2,691 sq ft, as well as three larger penthouses.
Yesterday, the three-bedroom units went for between $3 million and $3.7 million.
The smaller four-bedroom units sold for around $4.3 million to $5 million, while the larger four-bedroom units achieved prices of $6.1 million to a shade below $7 million.
About two-thirds of the Marina Bay Suites buyers were Singaporeans, with the balance made up of foreigners, permanent residents and a few companies, said Mr Joseph Tan, executive director for residential properties at one of the marketing agents, CBRE.
Marina Bay Suites had been slated for launch early last year when there was talk that the three-bedroom units would command a price of $4 million to $5 million.
But the market downturn prompted the postponement and, said Mr Tan, the preview had to be pitched at today's prices.
Cushman & Wakefield managing director Donald Han agreed that in today's high-end market, 'you need to provide a discount from the peak levels'.
'The value proposition is there for investors keen on luxury properties,' he said.
'Generally, there may be more upside as prices in the high-end to luxury markets are still about 20 per cent to 25 per cent from the peak levels in early 2008.'
Mr Han said the market is seeing demand slowly returning in the $2,000 psf to $3,000 psf range, but not yet for those priced above these prices.
Experts also said Marina Bay Suites' location is a major selling point.
'The lure factor of Marina Bay properties is the proximity to the integrated resort, and the finite supply of homes there,' said Mr Han.
Caveats lodged for The Sail @ Marina Bay this month showed deals done at between $1,744 psf and $2,800 psf, while Marina Bay Residences deals were done at $2,170 psf to $2,420 psf last month.
Sellers are hoping that values in the area will rise by the time the integrated resort in Marina Bay is completed, he said.
Indeed, Mr Tan said the plan was to launch the condo at 'better prices' in the first half of next year when the integrated resort opens.
The showflat would be ready by then.
BT : Two properties on tap for investment players
Business Times - 26 Nov 2009
Two properties on tap for investment players
Big industrial plot put on reserve list; Boon Building up for grabs for $12-13m
By KALPANA RASHIWALA
PLAYERS in the property investment sales market have just been offered two properties - an industrial plot at Kaki Bukit Avenue 4, made available for application through the government's reserve list, and Boon Building, a six-storey commercial property at 61 South Bridge Road.
The Kaki Bukit site is 323,133 sq ft and has a 2.5 plot ratio, which means the maximum gross floor area works out to a whopping 807,833 sq ft. It is zoned Business 2 - suitable for a range of uses such as clean/light industry, general industry and warehousing - and offered with a 60-year lease.
Under the reserve list system, the site will be launched for tender by the state only if a developer makes an application with a minimum bid price acceptable to the government.
Colliers International director (industrial) Tan Boon Leong reckons top bids for the plot - assuming a tender takes place now - could come in at $70-80 per sq ft per plot ratio (psf ppr). This works out to a land cost of about $56.5 million to $64.6 million.
According to Mr Tan, the plot is in a lesser location than an earlier plot in Kaki Bukit Road 2 that was sold in August this year after attracting a total 18 bids. 'The latest plot is farther away from the main mature industrial estate in the Kaki Bukit/Eunos area,' he said.
The earlier plot was awarded to KNG Development for $12.1 million or about $105 psf per plot ratio. It is about 1.07 hectares with a 1.0 plot ratio and is also zoned for Business 2 use, but came with a 30-year lease.
The latest plot, in Kaki Bukit Ave 4, is likely to appeal to developers, who may then build landed terrace factories to sell to end-user industrialists, as well as flatted factories, Mr Tan suggests.
'Perhaps some of the unsuccessful bidders at the earlier tender may bid for the latest plot,' he said. 'However, as the latest site is much larger in terms of land area as well as gross floor area, developing it will entail a bigger investment. Hence, it will likely fetch a lower psf ppr unit land price.'
In October last year, Sim Lian clinched a 1.15-ha, 60-year leasehold site in Ubi Ave 4 for Business 1 use for $26.3 million or $85.05 psf ppr. It has a 2.5 plot ratio.
Boon Building, a 999-year leasehold property, is being sold by Raffles Point Holdings, controlled by property investor Kishore Buxani and his family. The indicative guide price is $12-13 million, which works out to $1,165 to $1,262 psf based on the estimated net lettable area of 10,299 sq ft.
According to caveats records, the property was last transacted for about $9.5 million in August 2007. It will be sold with vacant possession and is being marketed by DTZ through a tender exercise that closes on Dec 17.
DTZ senior director for investment advisory services Shaun Poh said: 'The property's appeal lies in the building's excellent location and investment quantum. The availability of naming rights also offers the opportunity to carve out a flagship building with its own corporate identity.'
Mr Buxani and his partners also own 108 Robinson Road and six floors of Samsung Hub.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Boon Building: The 999-year leasehold property was last transacted for about $9.5 million in August 2007. It's being sold with vacant possession through a tender exercise that closes on Dec 17
Two properties on tap for investment players
Big industrial plot put on reserve list; Boon Building up for grabs for $12-13m
By KALPANA RASHIWALA
PLAYERS in the property investment sales market have just been offered two properties - an industrial plot at Kaki Bukit Avenue 4, made available for application through the government's reserve list, and Boon Building, a six-storey commercial property at 61 South Bridge Road.
The Kaki Bukit site is 323,133 sq ft and has a 2.5 plot ratio, which means the maximum gross floor area works out to a whopping 807,833 sq ft. It is zoned Business 2 - suitable for a range of uses such as clean/light industry, general industry and warehousing - and offered with a 60-year lease.
Under the reserve list system, the site will be launched for tender by the state only if a developer makes an application with a minimum bid price acceptable to the government.
Colliers International director (industrial) Tan Boon Leong reckons top bids for the plot - assuming a tender takes place now - could come in at $70-80 per sq ft per plot ratio (psf ppr). This works out to a land cost of about $56.5 million to $64.6 million.
According to Mr Tan, the plot is in a lesser location than an earlier plot in Kaki Bukit Road 2 that was sold in August this year after attracting a total 18 bids. 'The latest plot is farther away from the main mature industrial estate in the Kaki Bukit/Eunos area,' he said.
The earlier plot was awarded to KNG Development for $12.1 million or about $105 psf per plot ratio. It is about 1.07 hectares with a 1.0 plot ratio and is also zoned for Business 2 use, but came with a 30-year lease.
The latest plot, in Kaki Bukit Ave 4, is likely to appeal to developers, who may then build landed terrace factories to sell to end-user industrialists, as well as flatted factories, Mr Tan suggests.
'Perhaps some of the unsuccessful bidders at the earlier tender may bid for the latest plot,' he said. 'However, as the latest site is much larger in terms of land area as well as gross floor area, developing it will entail a bigger investment. Hence, it will likely fetch a lower psf ppr unit land price.'
In October last year, Sim Lian clinched a 1.15-ha, 60-year leasehold site in Ubi Ave 4 for Business 1 use for $26.3 million or $85.05 psf ppr. It has a 2.5 plot ratio.
Boon Building, a 999-year leasehold property, is being sold by Raffles Point Holdings, controlled by property investor Kishore Buxani and his family. The indicative guide price is $12-13 million, which works out to $1,165 to $1,262 psf based on the estimated net lettable area of 10,299 sq ft.
According to caveats records, the property was last transacted for about $9.5 million in August 2007. It will be sold with vacant possession and is being marketed by DTZ through a tender exercise that closes on Dec 17.
DTZ senior director for investment advisory services Shaun Poh said: 'The property's appeal lies in the building's excellent location and investment quantum. The availability of naming rights also offers the opportunity to carve out a flagship building with its own corporate identity.'
Mr Buxani and his partners also own 108 Robinson Road and six floors of Samsung Hub.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Boon Building: The 999-year leasehold property was last transacted for about $9.5 million in August 2007. It's being sold with vacant possession through a tender exercise that closes on Dec 17
BT : Public welcomes move to regulate property agents
Business Times - 26 Nov 2009
Public welcomes move to regulate property agents
By UMA SHANKARI
THE Ministry of National Development (MND) has received more than 200 independent comments and suggestions on its proposed regulatory framework for property agents.
The vast majority of respondents in a recent public consultation exercise welcomed stronger regulation of the real estate industry, MND said yesterday.
The suggestions were generally supportive of key features proposed under the new regulatory framework - such as mandatory accreditation for property agencies and agents; setting up a public central registry for agents, and an independent tribunal to deal with disputes; and introducing a demerit points system.
Public consultation took place from Oct 13 to Nov 17.
MND said that because complaints often arose from alleged unethical practices or misconduct, respondents felt it was important that agents pass a standard industry entrance examination covering not only practical knowledge but also ethics, before they are allowed to practise.
They also agreed with a proposal that an agent should represent only one party in a transaction to avoid conflict of interest.
MND said: 'These views were generally consistent with feedback gathered during industry consultations conducted from Sept 10 to Oct 1, when MND consulted stakeholders including industry associations, real estate agency directors, individual agents, Case (the Consumers Association of Singapore) and Redas (the Real Estate Developers' Association of Singapore).'
Views received from various parties will be consolidated and taken into consideration for refining the new regulatory framework, MND said.
Key elements are expected to be ready for announcement by early 2010.
Public welcomes move to regulate property agents
By UMA SHANKARI
THE Ministry of National Development (MND) has received more than 200 independent comments and suggestions on its proposed regulatory framework for property agents.
The vast majority of respondents in a recent public consultation exercise welcomed stronger regulation of the real estate industry, MND said yesterday.
The suggestions were generally supportive of key features proposed under the new regulatory framework - such as mandatory accreditation for property agencies and agents; setting up a public central registry for agents, and an independent tribunal to deal with disputes; and introducing a demerit points system.
Public consultation took place from Oct 13 to Nov 17.
MND said that because complaints often arose from alleged unethical practices or misconduct, respondents felt it was important that agents pass a standard industry entrance examination covering not only practical knowledge but also ethics, before they are allowed to practise.
They also agreed with a proposal that an agent should represent only one party in a transaction to avoid conflict of interest.
MND said: 'These views were generally consistent with feedback gathered during industry consultations conducted from Sept 10 to Oct 1, when MND consulted stakeholders including industry associations, real estate agency directors, individual agents, Case (the Consumers Association of Singapore) and Redas (the Real Estate Developers' Association of Singapore).'
Views received from various parties will be consolidated and taken into consideration for refining the new regulatory framework, MND said.
Key elements are expected to be ready for announcement by early 2010.
Wednesday, November 25, 2009
ST : Pine Grove residents keen to sell en bloc again
Nov 25, 2009
Pine Grove residents keen to sell en bloc again
PINE Grove residents are looking to sell their sprawling Ulu Pandan estate en bloc, after failing to do so in previous attempts during the 2007 boom.
They are not alone. Industry sources say there is a growing group of other estates that previously failed to sell en bloc but is now looking for reruns.
The collection of signatures at Pine Grove, a 660-unit former HUDC estate on 893,178 sq ft of land, started on Nov 15. If successful, this latest attempt will net each unit owner at least $1.6 million to $2.05 million, depending on unit size.
Many units are about 1,754 sq ft and will achieve a price of about $1.95 million each, according to an owner who declined to be named. Prices are based on a reserve level of $1.246 billion, he added.
The total price works out to at least $740 per sq ft per plot ratio, estimated a property expert. This is because the buyer of the site will have to pay an upgrading premium, plus a differential premium on top of the asking price to cover the cost of bringing the land tenure up to 99 years and site redevelopment.
Marketing agent Jones Lang LaSalle declined to comment.
Pine Grove's collective sale attempts in 2007 failed to bear fruit, even though the average payout was eventually raised to about $2 million per unit.
At Tulip Garden in Holland Road, Bravo Building Construction failed to complete a $516 million collective sale purchase last year due to funding issues.
Residents of Chin Swee Road's Landmark Tower were unable to attract a buyer in their collective sale attempts in 2007 and last year, but are keen to try again.
The sale processes at Tulip Garden and Landmark Tower are still in the preliminary stage and The Straits Times understands both have yet to officially appoint a marketing agent.
The estates are understandably eager to try again now that the economic outlook has improved and private home prices have risen, said DTZ South-east Asia research head Chua Chor Hoon.
The recent market slowdown has yet to significantly hamper owners' expectations, given that the process of collecting signatures and launching the sale may take a while, said an expert.
Pine Grove residents keen to sell en bloc again
PINE Grove residents are looking to sell their sprawling Ulu Pandan estate en bloc, after failing to do so in previous attempts during the 2007 boom.
They are not alone. Industry sources say there is a growing group of other estates that previously failed to sell en bloc but is now looking for reruns.
The collection of signatures at Pine Grove, a 660-unit former HUDC estate on 893,178 sq ft of land, started on Nov 15. If successful, this latest attempt will net each unit owner at least $1.6 million to $2.05 million, depending on unit size.
Many units are about 1,754 sq ft and will achieve a price of about $1.95 million each, according to an owner who declined to be named. Prices are based on a reserve level of $1.246 billion, he added.
The total price works out to at least $740 per sq ft per plot ratio, estimated a property expert. This is because the buyer of the site will have to pay an upgrading premium, plus a differential premium on top of the asking price to cover the cost of bringing the land tenure up to 99 years and site redevelopment.
Marketing agent Jones Lang LaSalle declined to comment.
Pine Grove's collective sale attempts in 2007 failed to bear fruit, even though the average payout was eventually raised to about $2 million per unit.
At Tulip Garden in Holland Road, Bravo Building Construction failed to complete a $516 million collective sale purchase last year due to funding issues.
Residents of Chin Swee Road's Landmark Tower were unable to attract a buyer in their collective sale attempts in 2007 and last year, but are keen to try again.
The sale processes at Tulip Garden and Landmark Tower are still in the preliminary stage and The Straits Times understands both have yet to officially appoint a marketing agent.
The estates are understandably eager to try again now that the economic outlook has improved and private home prices have risen, said DTZ South-east Asia research head Chua Chor Hoon.
The recent market slowdown has yet to significantly hamper owners' expectations, given that the process of collecting signatures and launching the sale may take a while, said an expert.
ST Forum : Making a case for upgrading housing blocks in Redhill Close
Nov 25, 2009
Making a case for upgrading housing blocks in Redhill Close
THE Housing Board's letter, "Block eligible for other upgrading schemes", last Saturday, explained that "the Selective En-bloc Redevelopment Scheme (Sers) is implemented only for old HDB precincts that can be redeveloped to optimise land use".
I would like to draw attention to the area at Redhill Close, from Block 1 to Block 22. This precinct is huge and is very near the Redhill MRT station and other amenities like a market and food centre.
These blocks are only seven stories high and lift upgrading is not scheduled, even though the buildings are about 50 years old.
Why do the Bukit Merah View blocks have a better chance at Sers than Redhill Close? Could HDB advise if there are other upgrading programmes available for this precinct?
Christopher Chew
Making a case for upgrading housing blocks in Redhill Close
THE Housing Board's letter, "Block eligible for other upgrading schemes", last Saturday, explained that "the Selective En-bloc Redevelopment Scheme (Sers) is implemented only for old HDB precincts that can be redeveloped to optimise land use".
I would like to draw attention to the area at Redhill Close, from Block 1 to Block 22. This precinct is huge and is very near the Redhill MRT station and other amenities like a market and food centre.
These blocks are only seven stories high and lift upgrading is not scheduled, even though the buildings are about 50 years old.
Why do the Bukit Merah View blocks have a better chance at Sers than Redhill Close? Could HDB advise if there are other upgrading programmes available for this precinct?
Christopher Chew
ST : 185 evicted for subletting rental flats
Nov 25, 2009
185 evicted for subletting rental flats
THE Housing Board (HDB) has evicted 185 tenants in the past 12 months, after they were found to have illegally sublet their rental flats.
These tenants were living elsewhere while subletting the flats, which is disallowed under the law, said National Development Minister Mah Bow Tan.
'They have abused government subsidy and deprived the truly needy of a rental flat,' he said in a written reply to a question raised in Parliament on Monday.
He was responding to Mr Lim Biow Chuan (Marine Parade GRC) who asked for an update on the number of evictions of rental flat tenants, and if there are plans to review rental rates to take inflation and the higher cost of living into account.
Noting that rental flats are heavily subsidised, Mr Mah said there is no need to revise rental rates as these are already low and affordable - even for those who earn a very low income.
Households with a total monthly income of less than $800 pay only $30 a month for a one-room rental flat. Those with monthly incomes of between $800 and $1,500 pay 30 per cent of the market rate. Rental rates, Mr Mah said, have been frozen at $110 a month for one-room flats since 2005.
For tenants in severe financial difficulty, the HDB will extend more help, for example, by working out an instalment plan, Mr Mah said.
He also gave an update on studio apartments for the elderly, in response to a question from Nominated MP Paulin Tay Straughan. To date, the HDB has launched 17 such developments in both mature and non-mature estates, with near 100 per cent take-up rate.
SUE-ANN CHIA
185 evicted for subletting rental flats
THE Housing Board (HDB) has evicted 185 tenants in the past 12 months, after they were found to have illegally sublet their rental flats.
These tenants were living elsewhere while subletting the flats, which is disallowed under the law, said National Development Minister Mah Bow Tan.
'They have abused government subsidy and deprived the truly needy of a rental flat,' he said in a written reply to a question raised in Parliament on Monday.
He was responding to Mr Lim Biow Chuan (Marine Parade GRC) who asked for an update on the number of evictions of rental flat tenants, and if there are plans to review rental rates to take inflation and the higher cost of living into account.
Noting that rental flats are heavily subsidised, Mr Mah said there is no need to revise rental rates as these are already low and affordable - even for those who earn a very low income.
Households with a total monthly income of less than $800 pay only $30 a month for a one-room rental flat. Those with monthly incomes of between $800 and $1,500 pay 30 per cent of the market rate. Rental rates, Mr Mah said, have been frozen at $110 a month for one-room flats since 2005.
For tenants in severe financial difficulty, the HDB will extend more help, for example, by working out an instalment plan, Mr Mah said.
He also gave an update on studio apartments for the elderly, in response to a question from Nominated MP Paulin Tay Straughan. To date, the HDB has launched 17 such developments in both mature and non-mature estates, with near 100 per cent take-up rate.
SUE-ANN CHIA
ST Forum : Developers must bear cost of flood prevention steps
Nov 25, 2009
Developers must bear cost of flood prevention steps
MR CHRISTOPHER de Souza, the MP overseeing Bukit Timah, was reported stating that he would be looking into getting the management of private buildings in the area to enhance measures to prevent flooding in their basement carparks ('Working on flood controls', Monday).
I am surprised that the residents and officials accompanying Mr de Souza did not discuss what could be done to eliminate the flooding problem to existing and future developments in the area.
Why must owners in these private buildings enhance measures? Should it not be the responsibility of the developers?
Developments alongside the Bukit Timah Canal are susceptible to flash floods judging from historical evidence. I am baffled that professional builders and developers did not take this fundamental problem into account when they started work on the projects. If they had done their due diligence, residents would not have been so unpleasantly affected by last Thursday's deluge.
We are told that widening of the canals has been ongoing for many years. Yet, the flooding problem has not stopped.
Ultimately, the people responsible for flood safety are the developers and their professional consultants. It is they, and not the residents, who should bear the cost of repairs and preventive measures.
Michael Yeo
Developers must bear cost of flood prevention steps
MR CHRISTOPHER de Souza, the MP overseeing Bukit Timah, was reported stating that he would be looking into getting the management of private buildings in the area to enhance measures to prevent flooding in their basement carparks ('Working on flood controls', Monday).
I am surprised that the residents and officials accompanying Mr de Souza did not discuss what could be done to eliminate the flooding problem to existing and future developments in the area.
Why must owners in these private buildings enhance measures? Should it not be the responsibility of the developers?
Developments alongside the Bukit Timah Canal are susceptible to flash floods judging from historical evidence. I am baffled that professional builders and developers did not take this fundamental problem into account when they started work on the projects. If they had done their due diligence, residents would not have been so unpleasantly affected by last Thursday's deluge.
We are told that widening of the canals has been ongoing for many years. Yet, the flooding problem has not stopped.
Ultimately, the people responsible for flood safety are the developers and their professional consultants. It is they, and not the residents, who should bear the cost of repairs and preventive measures.
Michael Yeo
BT : How to reduce your taxes
Business Times - 25 Nov 2009
MONEY MATTERS
How to reduce your taxes
As 2009 draws to a close, you may wish to consider the following tax tips still available to you before Dec 31
By BJ OOI AND DAVE LOH
MANY people tend to focus only on investment when planning their finances. But it is equally important to consider your tax strategy, as income taxes can have a direct effect on your net disposable income.
Tax planning is not something that applies only to wealthy individuals. As 2009 draws to a close, you may wish to consider the following tax tips still available to you before Dec 31.
While these tips may help you to reduce your income tax bill for the Year of Assessment (YA) 2010, do note that they are general in nature, and you should consult your tax adviser about your particular situation.
Claim applicable reliefs
First, remember to claim any applicable relief in your tax return.
If you are a Singapore resident and have met the qualifying conditions, you may be entitled to claim tax relief as applicable to your situation. Examples include earned income relief, wife relief, child relief, parent relief and foreign maid levy relief for married female taxpayers.
Supplementary Retirement Scheme (SRS) contributions
The SRS is a voluntary retirement savings scheme that allows individuals to enjoy tax relief for the year in which the contributions are made to their SRS account.
Participation in SRS is available to Singaporeans, Singapore permanent residents and foreigners, and is subject to different contribution ceilings. For 2009, SRS contributions are capped at $11,475 for Singaporeans and permanent residents, and $26,775 for foreigners.
Funds in the SRS account can be used for selected investments, such as fixed deposits, insurance products and unit trusts.
In general, 50 per cent of total SRS distributions will become taxable on an individual contributor's retirement for Singaporeans and permanent residents. For foreigners, this is after the minimum 10-year holding period.
However, withdrawals can be staggered over 10 years to enjoy more tax savings.
Premature distribution is normally taxable in full, with a possible 5 per cent penalty.
Central Provident Fund (CPF) top-up
Under the CPF Minimum Sum Topping-Up Scheme, you can claim tax relief for the cash top-up made to your spouse or siblings who do not have income exceeding $2,000 in the year preceding the year of top-up, or to your grandparents or parents. For the YA 2010, the maximum amount of tax relief is $7,000.
In addition, you can claim separate CPF cash top-up relief if you or your employer have made cash top-ups to your own Minimum Sum under the CPF Minimum Sum Topping-Up Scheme. The maximum amount of tax relief is $7,000.
CPF contributions for self-employed
If you are a self-employed person who has made Medisave and voluntary CPF contributions in 2009, you may claim tax relief for your CPF contribution of up to 34.5 per cent of your net trade income assessed.
This is subject to the lower of the CPF relief capped at $26,393 for YA 2010, or the actual amount contributed by you.
Donations to approved charities
You can claim tax relief for cash donations made to an approved Institution of Public Character (IPC) or Qualifying Grant-making Philanthropic Organisations.
Besides cash, donations to IPCs can take the form of Singapore-listed shares, or unit trusts that are ready for trade in Singapore, as well as land and buildings.
To encourage greater charitable acts in 2009 during the recent downturn, applicable tax deductions for YA 2010 have been enhanced to 2.5 times the amount of donations made this year (that is, calendar year 2009).
If the tax deduction for the donation is more than the income for the year, the donor is allowed to carry forward the un-utilised deductions for a maximum of five years.
Not Ordinarily Resident (NOR) Scheme
If you are a non-resident of Singapore for three consecutive years immediately preceding the year that you have become a resident of Singapore, you can apply for the NOR status for a five-year period starting with that year of residency.
As a NOR taxpayer who spends at least 90 days outside Singapore for business with an employment income of at least $160,000, you can apply for the concession of time-apportionment of employment income. This means you would not be taxed on the portion of employment income that corresponds to the number of business days spent outside Singapore.
If you qualify as a NOR taxpayer earning at least $160,000 during the calendar year, you should review your travel schedule to ascertain whether you can apply for this time-apportionment concession.
Gains from Employee Stock Option Plan and Employee Share Ownership Scheme
If you are granted stock options or share awards by your employer, there are incentive schemes allowing partial tax exemption on the gains from these stock options and share awards.
Under certain conditions, you can also defer paying any applicable tax. You should consult your employer to confirm whether stock options or share awards qualify for the incentives to take advantage of this.
Rental income from property
If you own a rental property, you should know that while the rental income is taxable, you can claim rental expenses to offset the rental income.
There are different types of allowable deductible expenses, for example, mortgage interest, property tax, maintenance fee paid to management corporation, fire insurance and general repairs or maintenance undertaken, such as painting and pest control services.
However, the first time that you rent out your first property, certain expenses incurred to secure the first tenant are disallowed. These expenses include any commission paid to the property agent, advertising and legal costs.
For any subsequent property, your property agent's commission, advertising and legal expenses incurred for securing the first tenant is deductible against the rental income of that property. The agent's commission or costs for renewing the lease for a subsequent tenant is also deductible.
If you own several rental properties, rental losses from one property can be used to offset income from another.
Where the final amount from all the rental properties is a loss, you cannot offset the loss against income from other sources. You may, however, transfer this loss to your spouse if he or she has positive rental income to absorb the loss.
In general, any gains from the sale of property are considered capital gains and not subject to tax in Singapore.
However, the Inland Revenue Authority of Singapore may query the property sale and ask the taxpayer to provide additional information about the transaction to confirm this tax treatment.
Effective tax planning requires you to be aware of any changes to tax laws and regulations that may affect your tax position. You should speak to a tax adviser to determine whether there are any of such changes that you should capitalise on.
BJ Ooi is executive director and head of private client services, and Dave Loh is director at KPMG Tax Services in Singapore. The views expressed are those of the authors and do not necessarily represent the views of KPMG in Singapore
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
__._,_.___
MONEY MATTERS
How to reduce your taxes
As 2009 draws to a close, you may wish to consider the following tax tips still available to you before Dec 31
By BJ OOI AND DAVE LOH
MANY people tend to focus only on investment when planning their finances. But it is equally important to consider your tax strategy, as income taxes can have a direct effect on your net disposable income.
Tax planning is not something that applies only to wealthy individuals. As 2009 draws to a close, you may wish to consider the following tax tips still available to you before Dec 31.
While these tips may help you to reduce your income tax bill for the Year of Assessment (YA) 2010, do note that they are general in nature, and you should consult your tax adviser about your particular situation.
Claim applicable reliefs
First, remember to claim any applicable relief in your tax return.
If you are a Singapore resident and have met the qualifying conditions, you may be entitled to claim tax relief as applicable to your situation. Examples include earned income relief, wife relief, child relief, parent relief and foreign maid levy relief for married female taxpayers.
Supplementary Retirement Scheme (SRS) contributions
The SRS is a voluntary retirement savings scheme that allows individuals to enjoy tax relief for the year in which the contributions are made to their SRS account.
Participation in SRS is available to Singaporeans, Singapore permanent residents and foreigners, and is subject to different contribution ceilings. For 2009, SRS contributions are capped at $11,475 for Singaporeans and permanent residents, and $26,775 for foreigners.
Funds in the SRS account can be used for selected investments, such as fixed deposits, insurance products and unit trusts.
In general, 50 per cent of total SRS distributions will become taxable on an individual contributor's retirement for Singaporeans and permanent residents. For foreigners, this is after the minimum 10-year holding period.
However, withdrawals can be staggered over 10 years to enjoy more tax savings.
Premature distribution is normally taxable in full, with a possible 5 per cent penalty.
Central Provident Fund (CPF) top-up
Under the CPF Minimum Sum Topping-Up Scheme, you can claim tax relief for the cash top-up made to your spouse or siblings who do not have income exceeding $2,000 in the year preceding the year of top-up, or to your grandparents or parents. For the YA 2010, the maximum amount of tax relief is $7,000.
In addition, you can claim separate CPF cash top-up relief if you or your employer have made cash top-ups to your own Minimum Sum under the CPF Minimum Sum Topping-Up Scheme. The maximum amount of tax relief is $7,000.
CPF contributions for self-employed
If you are a self-employed person who has made Medisave and voluntary CPF contributions in 2009, you may claim tax relief for your CPF contribution of up to 34.5 per cent of your net trade income assessed.
This is subject to the lower of the CPF relief capped at $26,393 for YA 2010, or the actual amount contributed by you.
Donations to approved charities
You can claim tax relief for cash donations made to an approved Institution of Public Character (IPC) or Qualifying Grant-making Philanthropic Organisations.
Besides cash, donations to IPCs can take the form of Singapore-listed shares, or unit trusts that are ready for trade in Singapore, as well as land and buildings.
To encourage greater charitable acts in 2009 during the recent downturn, applicable tax deductions for YA 2010 have been enhanced to 2.5 times the amount of donations made this year (that is, calendar year 2009).
If the tax deduction for the donation is more than the income for the year, the donor is allowed to carry forward the un-utilised deductions for a maximum of five years.
Not Ordinarily Resident (NOR) Scheme
If you are a non-resident of Singapore for three consecutive years immediately preceding the year that you have become a resident of Singapore, you can apply for the NOR status for a five-year period starting with that year of residency.
As a NOR taxpayer who spends at least 90 days outside Singapore for business with an employment income of at least $160,000, you can apply for the concession of time-apportionment of employment income. This means you would not be taxed on the portion of employment income that corresponds to the number of business days spent outside Singapore.
If you qualify as a NOR taxpayer earning at least $160,000 during the calendar year, you should review your travel schedule to ascertain whether you can apply for this time-apportionment concession.
Gains from Employee Stock Option Plan and Employee Share Ownership Scheme
If you are granted stock options or share awards by your employer, there are incentive schemes allowing partial tax exemption on the gains from these stock options and share awards.
Under certain conditions, you can also defer paying any applicable tax. You should consult your employer to confirm whether stock options or share awards qualify for the incentives to take advantage of this.
Rental income from property
If you own a rental property, you should know that while the rental income is taxable, you can claim rental expenses to offset the rental income.
There are different types of allowable deductible expenses, for example, mortgage interest, property tax, maintenance fee paid to management corporation, fire insurance and general repairs or maintenance undertaken, such as painting and pest control services.
However, the first time that you rent out your first property, certain expenses incurred to secure the first tenant are disallowed. These expenses include any commission paid to the property agent, advertising and legal costs.
For any subsequent property, your property agent's commission, advertising and legal expenses incurred for securing the first tenant is deductible against the rental income of that property. The agent's commission or costs for renewing the lease for a subsequent tenant is also deductible.
If you own several rental properties, rental losses from one property can be used to offset income from another.
Where the final amount from all the rental properties is a loss, you cannot offset the loss against income from other sources. You may, however, transfer this loss to your spouse if he or she has positive rental income to absorb the loss.
In general, any gains from the sale of property are considered capital gains and not subject to tax in Singapore.
However, the Inland Revenue Authority of Singapore may query the property sale and ask the taxpayer to provide additional information about the transaction to confirm this tax treatment.
Effective tax planning requires you to be aware of any changes to tax laws and regulations that may affect your tax position. You should speak to a tax adviser to determine whether there are any of such changes that you should capitalise on.
BJ Ooi is executive director and head of private client services, and Dave Loh is director at KPMG Tax Services in Singapore. The views expressed are those of the authors and do not necessarily represent the views of KPMG in Singapore
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
__._,_.___
ST : Work to expand canals next year
Nov 25, 2009
Work to expand canals next year
Capacity of Bukit Timah Canal will be doubled from Wilby Road to Sixth Avenue
By Amresh Gunasingham
A DIVERSION canal which overflowed last Thursday and flooded parts of Bukit Timah Road will be expanded over two phases in the next three years, said the national water agency yesterday.
The tender has closed for the first phase, which will be a $20 million facelift to double the capacity of the main Bukit Timah Canal at its juncture with the diversion canal. This is the portion stretching from Wilby Road to Sixth Avenue.
A floodgate located at the Sixth Avenue junction to divert water from the main canal into the three-decade-old diversion was unable to contain rising water levels from 92mm of rain being dumped over half an hour. The rainfall is the second-biggest in the last two decades over the same period, following the 96mm in November 1995.
This caused water levels in the main canal to rise and breach the low-lying stretch from Third Avenue to Coronation Road.
PUB said construction would probably start in the third quarter of next year, and take two years.
The second phase will see the 3km diversion canal, stretching from Sixth Avenue to Sungei Ulu Pandan, widened in parts from 11m to more than 20m. It will also be deepened from the present 4m. Work on this phase is expected to start in two years.
The PUB will also install a sensor system along the Bukit Timah Canal near Blackmore Drive next week, to provide early warning to police and nearby developments if the canal's water level is rising.
Last Thursday, at the flood's height - between 1pm and 2pm - the floodwater was knee-deep, throwing traffic in Bukit Timah into chaos.
Property and cars were damaged as three underground carparks were partially submerged.
The diversion canal was built in 1972 and sized according to how much development there was in the area as well as economic considerations, said Mr Tan Nguan Sen, director of catchment and waterways at PUB, yesterday.
'We did not want to build oversized canals that would not be used to their full capacity.'
Since then, housing and infrastructure developments have burgeoned on the road, a key factor in the volume of water flowing over the surface.
Land scarcity limits the size of drainage systems so they cannot cater to every extreme event, said Mr Tan.
To cope with last week's volume of rainfall, the diversion canal would have to be 30m wide.
The buildings which had their basement carparks submerged are hoping to avoid a similar occurrence in future.
Corona Ville condominium, one of the three, has a drainage system linked directly to the diversion canal which overflowed.
PUB is in discussions with its management to install pump systems in the carpark. It is also talking to the Holland-Bukit Timah GRC about installing physical barriers such as sandbags to prevent water flowing into other developments.
The flood comes three years after one of Singapore's worst floodings in recent history. In December 2006, 345mm of rain fell over a 20-hour period, the third-highest in the last 75 years. Parts of the island from Thomson Road to Yio Chu Kang were submerged and landslides were triggered in Mandai Road and Bukit Batok West Avenue 2.
Work to expand canals next year
Capacity of Bukit Timah Canal will be doubled from Wilby Road to Sixth Avenue
By Amresh Gunasingham
A DIVERSION canal which overflowed last Thursday and flooded parts of Bukit Timah Road will be expanded over two phases in the next three years, said the national water agency yesterday.
The tender has closed for the first phase, which will be a $20 million facelift to double the capacity of the main Bukit Timah Canal at its juncture with the diversion canal. This is the portion stretching from Wilby Road to Sixth Avenue.
A floodgate located at the Sixth Avenue junction to divert water from the main canal into the three-decade-old diversion was unable to contain rising water levels from 92mm of rain being dumped over half an hour. The rainfall is the second-biggest in the last two decades over the same period, following the 96mm in November 1995.
This caused water levels in the main canal to rise and breach the low-lying stretch from Third Avenue to Coronation Road.
PUB said construction would probably start in the third quarter of next year, and take two years.
The second phase will see the 3km diversion canal, stretching from Sixth Avenue to Sungei Ulu Pandan, widened in parts from 11m to more than 20m. It will also be deepened from the present 4m. Work on this phase is expected to start in two years.
The PUB will also install a sensor system along the Bukit Timah Canal near Blackmore Drive next week, to provide early warning to police and nearby developments if the canal's water level is rising.
Last Thursday, at the flood's height - between 1pm and 2pm - the floodwater was knee-deep, throwing traffic in Bukit Timah into chaos.
Property and cars were damaged as three underground carparks were partially submerged.
The diversion canal was built in 1972 and sized according to how much development there was in the area as well as economic considerations, said Mr Tan Nguan Sen, director of catchment and waterways at PUB, yesterday.
'We did not want to build oversized canals that would not be used to their full capacity.'
Since then, housing and infrastructure developments have burgeoned on the road, a key factor in the volume of water flowing over the surface.
Land scarcity limits the size of drainage systems so they cannot cater to every extreme event, said Mr Tan.
To cope with last week's volume of rainfall, the diversion canal would have to be 30m wide.
The buildings which had their basement carparks submerged are hoping to avoid a similar occurrence in future.
Corona Ville condominium, one of the three, has a drainage system linked directly to the diversion canal which overflowed.
PUB is in discussions with its management to install pump systems in the carpark. It is also talking to the Holland-Bukit Timah GRC about installing physical barriers such as sandbags to prevent water flowing into other developments.
The flood comes three years after one of Singapore's worst floodings in recent history. In December 2006, 345mm of rain fell over a 20-hour period, the third-highest in the last 75 years. Parts of the island from Thomson Road to Yio Chu Kang were submerged and landslides were triggered in Mandai Road and Bukit Batok West Avenue 2.
BT : Buying a home: freehold vs leasehold
Business Times - 25 Nov 2009
Buying a home: freehold vs leasehold
NICHOLAS MAK examines how both tenures perform in rising and falling markets as well as in collective sales
THE question of whether to own freehold or leasehold property seems a perennial one, with pros and cons shifting with market cycles and new trends. Here, we examine the issue from the perspective of both a home owner and investor, and see how both tenures perform in rising and falling markets as well as in collective sales.
The chief attraction of 99-year leasehold property is that it is typically priced lower than a comparable freehold property. As a result, they are popular with HDB upgraders as entry-level private properties. Most mass-market homes are 99-year leasehold condominiums, with prices ranging from $500 per sq ft to $900 per sq ft. A typical family-size apartment could cost anything from $600,000 to $1.2 million.
For investors, leasehold properties usually offer a higher rental yield because of their lower capital cost. However, the higher yield merely compensates the owner for the decaying lease.
One of the more apparent disadvantages of owning a 99-year leasehold property is that the length of the lease is contracting daily. All else being equal, this would result in falling property value. However, certain external factors could slow the decline in value, such as if the property is sought after by tenants or buyers. This could be due to a prime location, improving infrastructure (such as a proposed MRT station nearby), or good amenities or popular schools in the vicinity.
When it comes to collective sales, there are usually fewer opportunities for them with 99-year homes. One reason is that many of them are still relatively new and in good condition. Thus, the owners do not feel any urgency to sell their homes collectively.
A more pertinent reason is that the premium payable to the government to top up a 99-year lease is quite high, based on the existing formula. And since developers factor the premium as part of the total land cost, the higher the premium the less the owner of the ageing leasehold would get in any collective sale.
As such, collective sales are not attractive to many owners of 99-year leasehold apartments unless the expense of maintaining their ageing properties are so high that a collective sale becomes the cheaper alternative.
A key benefit of owning freehold real estate is that the land value does not generally depreciate in the long term. Although all properties are subject to market fluctuations, the price of freehold land tends to be more stable than that of leasehold land over time. However, the value of a freehold property could still decrease over time due to the depreciating value of the ageing building. Over the long term, while the value of freehold land may increase or remain little changed, the value of the building would decline.
One factor that supports the value of freehold land in Singapore is its scarcity. Since all the land sold by the government is leasehold, the amount of freehold land would not increase. In fact, it might shrink over time if the government makes acquisitions of such land.
Another advantage of owning a freehold property is the potential of a windfall from a collective sale. If the value of the freehold land increases while the value of the ageing building declines, it could reach a stage where the redevelopment value of the property is worth more than the utility value of the existing building. As a result, the property owners may find a collective sale of their property to a developer to be highly profitable.
Some developers looking to acquire residential land for development may also prefer freehold land to ageing 99-year leasehold property because freehold land would not require the payment of a hefty premium for extending the lease.
For all these reasons, freehold residential properties are generally priced higher than 99-year leaseholds. The price range of freehold non-landed properties is also wider than that of comparable leasehold properties. Depending on the location, freehold property prices could vary from $600 psf to $4,000 psf or more. The majority of high-end residential properties are freehold.
For investors, one disadvantage of freehold property is the lower rental yield, a function of the higher cost of the property.
Also, while freehold properties have a higher likelihood of a collective sale than their leasehold counterparts, that can prove to be a double-edged sword. The property boom of 2005 to 2008 whipped up a collective sale frenzy. But some property owners who sold for a windfall found they could not get a replacement home in the same location from their proceeds. As the collective sale boom was powered by surging property prices, by the time en-bloc property sellers received their proceeds, the prices of comparable replacement homes would have moved out of reach.
Now, we look at the price performance of freehold and leasehold properties. Although freehold properties are usually priced higher than their leasehold counterparts, their rate of appreciation does not always outperform.
There were two property cycles between end-1998 and mid-2009. The first market boom, which started at end-1998 and ended in mid-2000, was a bottom-up price recovery. Demand started in the mass-market sector and moved up to the mid-tier and finally the high-end segment.
During this 18-month period, the average price of 99-year condominiums rose faster than that of freehold homes. The average price of freehold condominiums grew by 38.2 per cent, while the average price of 99-year leasehold condominiums surged by 46.2 per cent.
But on the way down, leasehold home prices also fell more steeply. On the downcycle between mid-2000 and the first half of 2004, the average price of leasehold condominiums fell 26.1 per cent, steeper than the freehold price decline of 17.6 per cent.
The most recent boom that lasted four years from mid-2004 to mid-2008 started with high-end property and gradually filtered down to the mass market.
Even when the mass-market sector started to pick up in 2007, the momentum in the high-end segment did not let up. As a result, freehold condominium prices jumped by an impressive 64.7 per cent on average, while the average leasehold property price rose some 50 per cent.
When the property market here started to contract in mid-2008 due to the global financial crisis, freehold condominium prices fell 26.5 per cent year on year, just slightly more than 99-year leaseholds, which dropped by 23.8 per cent.
What this study shows is that if the upswing in the property market is bottom-up, leasehold condominiums could outperform freehold ones. Conversely, if the boom is top down, freehold condominiums would deliver superior results. However, this study also illustrates that the faster the rise, the harder the fall. So in a top-down property boom, owners of freehold condominiums who had enjoyed a sharper price appreciation should be nimble enough to lock in their gains before the downtrend sets in.
In comparing freehold and leasehold residential properties, there is no conclusive evidence to show that one is better than the other. Ultimately, the decision boils down to budget and preference.
The writer is a real estate lecturer at Ngee Ann Polytechnic
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Pros and cons: If the upswing in the property market is bottom-up, leasehold condominiums could outperform freehold ones. Conversely, if the boom is top down, freehold condominiums would deliver superior results
Buying a home: freehold vs leasehold
NICHOLAS MAK examines how both tenures perform in rising and falling markets as well as in collective sales
THE question of whether to own freehold or leasehold property seems a perennial one, with pros and cons shifting with market cycles and new trends. Here, we examine the issue from the perspective of both a home owner and investor, and see how both tenures perform in rising and falling markets as well as in collective sales.
The chief attraction of 99-year leasehold property is that it is typically priced lower than a comparable freehold property. As a result, they are popular with HDB upgraders as entry-level private properties. Most mass-market homes are 99-year leasehold condominiums, with prices ranging from $500 per sq ft to $900 per sq ft. A typical family-size apartment could cost anything from $600,000 to $1.2 million.
For investors, leasehold properties usually offer a higher rental yield because of their lower capital cost. However, the higher yield merely compensates the owner for the decaying lease.
One of the more apparent disadvantages of owning a 99-year leasehold property is that the length of the lease is contracting daily. All else being equal, this would result in falling property value. However, certain external factors could slow the decline in value, such as if the property is sought after by tenants or buyers. This could be due to a prime location, improving infrastructure (such as a proposed MRT station nearby), or good amenities or popular schools in the vicinity.
When it comes to collective sales, there are usually fewer opportunities for them with 99-year homes. One reason is that many of them are still relatively new and in good condition. Thus, the owners do not feel any urgency to sell their homes collectively.
A more pertinent reason is that the premium payable to the government to top up a 99-year lease is quite high, based on the existing formula. And since developers factor the premium as part of the total land cost, the higher the premium the less the owner of the ageing leasehold would get in any collective sale.
As such, collective sales are not attractive to many owners of 99-year leasehold apartments unless the expense of maintaining their ageing properties are so high that a collective sale becomes the cheaper alternative.
A key benefit of owning freehold real estate is that the land value does not generally depreciate in the long term. Although all properties are subject to market fluctuations, the price of freehold land tends to be more stable than that of leasehold land over time. However, the value of a freehold property could still decrease over time due to the depreciating value of the ageing building. Over the long term, while the value of freehold land may increase or remain little changed, the value of the building would decline.
One factor that supports the value of freehold land in Singapore is its scarcity. Since all the land sold by the government is leasehold, the amount of freehold land would not increase. In fact, it might shrink over time if the government makes acquisitions of such land.
Another advantage of owning a freehold property is the potential of a windfall from a collective sale. If the value of the freehold land increases while the value of the ageing building declines, it could reach a stage where the redevelopment value of the property is worth more than the utility value of the existing building. As a result, the property owners may find a collective sale of their property to a developer to be highly profitable.
Some developers looking to acquire residential land for development may also prefer freehold land to ageing 99-year leasehold property because freehold land would not require the payment of a hefty premium for extending the lease.
For all these reasons, freehold residential properties are generally priced higher than 99-year leaseholds. The price range of freehold non-landed properties is also wider than that of comparable leasehold properties. Depending on the location, freehold property prices could vary from $600 psf to $4,000 psf or more. The majority of high-end residential properties are freehold.
For investors, one disadvantage of freehold property is the lower rental yield, a function of the higher cost of the property.
Also, while freehold properties have a higher likelihood of a collective sale than their leasehold counterparts, that can prove to be a double-edged sword. The property boom of 2005 to 2008 whipped up a collective sale frenzy. But some property owners who sold for a windfall found they could not get a replacement home in the same location from their proceeds. As the collective sale boom was powered by surging property prices, by the time en-bloc property sellers received their proceeds, the prices of comparable replacement homes would have moved out of reach.
Now, we look at the price performance of freehold and leasehold properties. Although freehold properties are usually priced higher than their leasehold counterparts, their rate of appreciation does not always outperform.
There were two property cycles between end-1998 and mid-2009. The first market boom, which started at end-1998 and ended in mid-2000, was a bottom-up price recovery. Demand started in the mass-market sector and moved up to the mid-tier and finally the high-end segment.
During this 18-month period, the average price of 99-year condominiums rose faster than that of freehold homes. The average price of freehold condominiums grew by 38.2 per cent, while the average price of 99-year leasehold condominiums surged by 46.2 per cent.
But on the way down, leasehold home prices also fell more steeply. On the downcycle between mid-2000 and the first half of 2004, the average price of leasehold condominiums fell 26.1 per cent, steeper than the freehold price decline of 17.6 per cent.
The most recent boom that lasted four years from mid-2004 to mid-2008 started with high-end property and gradually filtered down to the mass market.
Even when the mass-market sector started to pick up in 2007, the momentum in the high-end segment did not let up. As a result, freehold condominium prices jumped by an impressive 64.7 per cent on average, while the average leasehold property price rose some 50 per cent.
When the property market here started to contract in mid-2008 due to the global financial crisis, freehold condominium prices fell 26.5 per cent year on year, just slightly more than 99-year leaseholds, which dropped by 23.8 per cent.
What this study shows is that if the upswing in the property market is bottom-up, leasehold condominiums could outperform freehold ones. Conversely, if the boom is top down, freehold condominiums would deliver superior results. However, this study also illustrates that the faster the rise, the harder the fall. So in a top-down property boom, owners of freehold condominiums who had enjoyed a sharper price appreciation should be nimble enough to lock in their gains before the downtrend sets in.
In comparing freehold and leasehold residential properties, there is no conclusive evidence to show that one is better than the other. Ultimately, the decision boils down to budget and preference.
The writer is a real estate lecturer at Ngee Ann Polytechnic
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Pros and cons: If the upswing in the property market is bottom-up, leasehold condominiums could outperform freehold ones. Conversely, if the boom is top down, freehold condominiums would deliver superior results
BT : $20m for upgrading Bukit Timah diversion canal: PUB
Business Times - 25 Nov 2009
$20m for upgrading Bukit Timah diversion canal: PUB
By FELDA CHAY
ABOUT $20 million will be spent on the first stage of widening and deepening the Bukit Timah diversion canal to prevent a repeat of last Thursday's floods, national water agency PUB said yesterday.
Upgrading works on the stretch of the canal running from Wilby Road to the junction of Sixth Avenue will start in the third quarter of next year and will be completed in two years.
PUB will also install a water level sensor next week to give early warning of rising water levels in the Bukit Timah Canal near Blackmore Drive, said the director of its catchment and waterways department Tan Nguan Sen. PUB will notify traffic police and nearby condominiums if the water rises 'above a certain level'.
A second phase of upgrading works is also on the cards to expand the remaining stretch of the canal. This phase is set to start in 2011. When completed, the width of the canal, now 11 metres on average, will be expanded to 26m. It will be able to hold about twice the amount of water it can carry now. The three kilometre canal, stretching from Sixth Avenue to Sungei Ulu Pandan, overflowed last Thursday. Floodwater was knee-high in some places, and underground carparks in three buildings were flooded.
PUB is also working with Holland-Bukit Timah GRC to encourage the management of condos such as Corona Ville, where the basement carpark was flooded, to build physical crests to prevent water flowing in.
Mr Tan said that the flooding was caused by 'heavy and intense' rainfall over the Bukit Timah area, with 110 millimetres of rain - equivalent to about 115 Olympic-size pools of water.
The canal was built in 1972 as part of the Bukit Timah Flood Alleviation Scheme - a government project to divert water away from Bukit Timah, a low-lying area with a history of flooding.
Upgrading the canal is part of long-term planning for the area and has been planned even before the recent flood, Mr Tan said. This is in anticipation of increased storm water run-off - caused by a drop in grass-covered areas as a result of new developments in the area over the next 10 to 15 years.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
$20m for upgrading Bukit Timah diversion canal: PUB
By FELDA CHAY
ABOUT $20 million will be spent on the first stage of widening and deepening the Bukit Timah diversion canal to prevent a repeat of last Thursday's floods, national water agency PUB said yesterday.
Upgrading works on the stretch of the canal running from Wilby Road to the junction of Sixth Avenue will start in the third quarter of next year and will be completed in two years.
PUB will also install a water level sensor next week to give early warning of rising water levels in the Bukit Timah Canal near Blackmore Drive, said the director of its catchment and waterways department Tan Nguan Sen. PUB will notify traffic police and nearby condominiums if the water rises 'above a certain level'.
A second phase of upgrading works is also on the cards to expand the remaining stretch of the canal. This phase is set to start in 2011. When completed, the width of the canal, now 11 metres on average, will be expanded to 26m. It will be able to hold about twice the amount of water it can carry now. The three kilometre canal, stretching from Sixth Avenue to Sungei Ulu Pandan, overflowed last Thursday. Floodwater was knee-high in some places, and underground carparks in three buildings were flooded.
PUB is also working with Holland-Bukit Timah GRC to encourage the management of condos such as Corona Ville, where the basement carpark was flooded, to build physical crests to prevent water flowing in.
Mr Tan said that the flooding was caused by 'heavy and intense' rainfall over the Bukit Timah area, with 110 millimetres of rain - equivalent to about 115 Olympic-size pools of water.
The canal was built in 1972 as part of the Bukit Timah Flood Alleviation Scheme - a government project to divert water away from Bukit Timah, a low-lying area with a history of flooding.
Upgrading the canal is part of long-term planning for the area and has been planned even before the recent flood, Mr Tan said. This is in anticipation of increased storm water run-off - caused by a drop in grass-covered areas as a result of new developments in the area over the next 10 to 15 years.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
BT : Kwek: Govt can play downpayment card
Business Times - 25 Nov 2009
Kwek: Govt can play downpayment card
But resurgence in speculative activity not likely in short term, says CDL boss
By KALPANA RASHIWALA
(SINGAPORE) Property tycoon Kwek Leng Beng feels that the authorities could raise the downpayment on the purchase of private homes if there is a risk of resurgence in speculative activity.
Currently, home buyers make a 5 per cent minimum cash downpayment.
'The downpayment payable . . . can be increased to reduce the amount of speculation. This amount can be increased further should the speculation go unabated,' Mr Kwek said this week in an e-mail response to BT's questions.
He had been asked what steps the government could potentially take if a speculative bubble builds up again, following a recent statement by the Monetary Authority of Singapore that the risk of renewed escalation of property speculation could not be discounted.
In the short term, however, Mr Kwek said he does not envisage a resurgence in speculative activity, noting that developers' sales have slowed for three consecutive months since peaking in July this year.
On Nov 9, the Monetary Authority of Singapore said further action to cool the property market may be needed if recent measures to dampen speculation prove insufficient. It said 'the risk of a renewed escalation of speculative momentum cannot be discounted' as Singapore emerges from recession and with the market expecting low interest rates to persist for some time.
'Going forward, price levels and transaction activity bear close monitoring,' it said.
Mr Kwek, who is executive chairman of City Developments Ltd (CDL), was generally more measured in his outlook on the Singapore private residential sector in his latest interview than he had been during CDL's half-year results briefing in August.
He now says the Singapore private residential market 'will slow down' following the MAS warning and reinstatement of the confirmed list next year. 'The integrated resorts (IRs) will not affect the real estate market immediately, unless the world economy recovers substantially when the IRs open, which is not likely.'
In August, Mr Kwek had sounded more optimistic about how the opening of the two IRs with casinos next year will provide a fillip to the Singapore property market, especially luxury homes, citing the experience in Macau.
The pronouncement from Singapore's de facto central bank this month on the possible risk of a revival of property speculation came just three days after the Ministry of National Development announced it will offer eight sites that can potentially generate 2,925 private homes (including exec condos) for sale under the confirmed list in H1 2010.
The quantum was bigger than what most developers had expected.
'I was rather surprised by the quantum of the confirmed list but I can understand the government's explanation for introducing the number of land parcels in the confirmed list,' Mr Kwek told BT this week.
In announcing the confirmed list, MND noted that the private residential market had seen 'very strong demand' from February to September, with developers selling about 12,800 units in the first nine months of this year, against just 4,300 units for the whole of 2008.
The government has also sought to assure market players that there is ample supply and that there is no need for buyers to rush their purchase decisions.
In September, the government scrapped interest-only housing loans and the interest absorption scheme, which some market watchers blamed for stoking speculation.
After last year's global financial crash, developers began to enjoy a revival in home sales starting in February, peaking at 2,772 units in July. Sales have since slowed, easing to 811 units in October.
Mr Kwek also said the Singapore hotel market will improve in 2010. 'But by how much and how quickly will depend on the initial success of the IRs . . . The hospitality industry will be directly affected - either adversely or favourably - by the IRs,' he added.
CDL owns 54 per cent of Millennium & Copthorne Hotels plc, which in turn has a stake in CDL Hospitality Trusts - the biggest owner of hotels here.
Whne the economy recovers, the Singapore office market will rebound in tandem as business picks up in the various sectors, Mr Kwek said. Already, the decline in office rentals is moderating and the sector is seeing an increase in leasing activity and requests for proposals from occupiers, many of which are likely to firm up in the near future.
When asked if financial industry players in the West are likely to resume their pre-crash strategy of developing hubs in Singapore, Mr Kwek said: 'They have to address their own problems first and put their institutions on sound footing before they start to relocate and to expand.
'They cannot ignore the Asia-Pacific region, and I believe they also can't ignore Singapore, which has built up equity in its brand,' Mr Kwek said.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Mr Kwek: Market will slow down after MAS's warning and reinstatement of the confirmed list next year
Kwek: Govt can play downpayment card
But resurgence in speculative activity not likely in short term, says CDL boss
By KALPANA RASHIWALA
(SINGAPORE) Property tycoon Kwek Leng Beng feels that the authorities could raise the downpayment on the purchase of private homes if there is a risk of resurgence in speculative activity.
Currently, home buyers make a 5 per cent minimum cash downpayment.
'The downpayment payable . . . can be increased to reduce the amount of speculation. This amount can be increased further should the speculation go unabated,' Mr Kwek said this week in an e-mail response to BT's questions.
He had been asked what steps the government could potentially take if a speculative bubble builds up again, following a recent statement by the Monetary Authority of Singapore that the risk of renewed escalation of property speculation could not be discounted.
In the short term, however, Mr Kwek said he does not envisage a resurgence in speculative activity, noting that developers' sales have slowed for three consecutive months since peaking in July this year.
On Nov 9, the Monetary Authority of Singapore said further action to cool the property market may be needed if recent measures to dampen speculation prove insufficient. It said 'the risk of a renewed escalation of speculative momentum cannot be discounted' as Singapore emerges from recession and with the market expecting low interest rates to persist for some time.
'Going forward, price levels and transaction activity bear close monitoring,' it said.
Mr Kwek, who is executive chairman of City Developments Ltd (CDL), was generally more measured in his outlook on the Singapore private residential sector in his latest interview than he had been during CDL's half-year results briefing in August.
He now says the Singapore private residential market 'will slow down' following the MAS warning and reinstatement of the confirmed list next year. 'The integrated resorts (IRs) will not affect the real estate market immediately, unless the world economy recovers substantially when the IRs open, which is not likely.'
In August, Mr Kwek had sounded more optimistic about how the opening of the two IRs with casinos next year will provide a fillip to the Singapore property market, especially luxury homes, citing the experience in Macau.
The pronouncement from Singapore's de facto central bank this month on the possible risk of a revival of property speculation came just three days after the Ministry of National Development announced it will offer eight sites that can potentially generate 2,925 private homes (including exec condos) for sale under the confirmed list in H1 2010.
The quantum was bigger than what most developers had expected.
'I was rather surprised by the quantum of the confirmed list but I can understand the government's explanation for introducing the number of land parcels in the confirmed list,' Mr Kwek told BT this week.
In announcing the confirmed list, MND noted that the private residential market had seen 'very strong demand' from February to September, with developers selling about 12,800 units in the first nine months of this year, against just 4,300 units for the whole of 2008.
The government has also sought to assure market players that there is ample supply and that there is no need for buyers to rush their purchase decisions.
In September, the government scrapped interest-only housing loans and the interest absorption scheme, which some market watchers blamed for stoking speculation.
After last year's global financial crash, developers began to enjoy a revival in home sales starting in February, peaking at 2,772 units in July. Sales have since slowed, easing to 811 units in October.
Mr Kwek also said the Singapore hotel market will improve in 2010. 'But by how much and how quickly will depend on the initial success of the IRs . . . The hospitality industry will be directly affected - either adversely or favourably - by the IRs,' he added.
CDL owns 54 per cent of Millennium & Copthorne Hotels plc, which in turn has a stake in CDL Hospitality Trusts - the biggest owner of hotels here.
Whne the economy recovers, the Singapore office market will rebound in tandem as business picks up in the various sectors, Mr Kwek said. Already, the decline in office rentals is moderating and the sector is seeing an increase in leasing activity and requests for proposals from occupiers, many of which are likely to firm up in the near future.
When asked if financial industry players in the West are likely to resume their pre-crash strategy of developing hubs in Singapore, Mr Kwek said: 'They have to address their own problems first and put their institutions on sound footing before they start to relocate and to expand.
'They cannot ignore the Asia-Pacific region, and I believe they also can't ignore Singapore, which has built up equity in its brand,' Mr Kwek said.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Mr Kwek: Market will slow down after MAS's warning and reinstatement of the confirmed list next year
BT : CapitaLand raises $2.8b from CapitaMalls Asia IPO
Business Times - 25 Nov 2009
CapitaLand raises $2.8b from CapitaMalls Asia IPO
By UMA SHANKARI
(SINGAPORE) Property group CapitaLand said that it raised $2.8 billion by selling 34.5 per cent of its retail arm CapitaMalls Asia (CMA) in its initial public offering (IPO).
Both the placement and retail shares were oversubscribed, and the company also released all over-allotment shares. In total, 1.34 billion shares were sold at $2.12 apiece.
The listing of CMA - which has a $20.3 billion portfolio of 86 malls in Singapore, China, Malaysia, Japan and India - is Singapore's biggest IPO since Singapore Telecommunications raised more than $4 billion in 1993.
Analysts expect CMA shares to gain today on their debut, fuelled by demand from institutional investors keen to gain exposure to China's fast-growing consumer market. More than half of CMA's malls are in China.
In a note, DMG & Partners analysts Brandon Lee and Jonathan Ng gave a valuation range of $2.42- $3.01 for CMA's shares. This is between 14 and 42 per cent above the IPO price of $2.12.
CapitaLand had earlier set an indicative range of $1.98 to $2.39 for the IPO, but later decided to price it below the mid-point of the range - a move that analysts said was to ensure that the stock trades well after it debuts.
CapitaLand yesterday reported demand of about 2.5 times for the placement tranche of 1.059 billion shares. An additional 174.8 million shares were over-allotted due to strong demand from investors.
Also, the public offer (excluding reserved shares) of 95 million shares was 4.9 times subscribed. In addition, all of the 11.7 million shares reserved for the directors, management, employees and business associates of the group were also taken up.
'Upon completion of the IPO and assuming the full exercise of the over-allotment option, CapitaLand's shareholding interest in CapitaMalls Asia will be reduced from 100 per cent to 65.5 per cent, and the IPO would have raised approximately $2.8 billion,' CapitaLand said.
CMA chief executive Lim Beng Chee said that the company is well-positioned to ride on strong consumerism trends in Asia and will continue to grow its business in the region, with an initial focus on China and Singapore.
CMA marks the sixth entity within the CapitaLand group to be listed on the Singapore Exchange. CapitaLand has previously said that it could record a one-time gain of $883 million from this IPO.
Part of the proceeds will be paid out as a special dividend to the group's shareholders. The company will also use some of its proceeds to invest in its residential and service residence business units. In particular, CapitaLand is looking at Singapore, China, Australia and Vietnam for growth for the overall group.
CapitaLand's shares lost four cents to close at $4.11 yesterday.
CapitaLand raises $2.8b from CapitaMalls Asia IPO
By UMA SHANKARI
(SINGAPORE) Property group CapitaLand said that it raised $2.8 billion by selling 34.5 per cent of its retail arm CapitaMalls Asia (CMA) in its initial public offering (IPO).
Both the placement and retail shares were oversubscribed, and the company also released all over-allotment shares. In total, 1.34 billion shares were sold at $2.12 apiece.
The listing of CMA - which has a $20.3 billion portfolio of 86 malls in Singapore, China, Malaysia, Japan and India - is Singapore's biggest IPO since Singapore Telecommunications raised more than $4 billion in 1993.
Analysts expect CMA shares to gain today on their debut, fuelled by demand from institutional investors keen to gain exposure to China's fast-growing consumer market. More than half of CMA's malls are in China.
In a note, DMG & Partners analysts Brandon Lee and Jonathan Ng gave a valuation range of $2.42- $3.01 for CMA's shares. This is between 14 and 42 per cent above the IPO price of $2.12.
CapitaLand had earlier set an indicative range of $1.98 to $2.39 for the IPO, but later decided to price it below the mid-point of the range - a move that analysts said was to ensure that the stock trades well after it debuts.
CapitaLand yesterday reported demand of about 2.5 times for the placement tranche of 1.059 billion shares. An additional 174.8 million shares were over-allotted due to strong demand from investors.
Also, the public offer (excluding reserved shares) of 95 million shares was 4.9 times subscribed. In addition, all of the 11.7 million shares reserved for the directors, management, employees and business associates of the group were also taken up.
'Upon completion of the IPO and assuming the full exercise of the over-allotment option, CapitaLand's shareholding interest in CapitaMalls Asia will be reduced from 100 per cent to 65.5 per cent, and the IPO would have raised approximately $2.8 billion,' CapitaLand said.
CMA chief executive Lim Beng Chee said that the company is well-positioned to ride on strong consumerism trends in Asia and will continue to grow its business in the region, with an initial focus on China and Singapore.
CMA marks the sixth entity within the CapitaLand group to be listed on the Singapore Exchange. CapitaLand has previously said that it could record a one-time gain of $883 million from this IPO.
Part of the proceeds will be paid out as a special dividend to the group's shareholders. The company will also use some of its proceeds to invest in its residential and service residence business units. In particular, CapitaLand is looking at Singapore, China, Australia and Vietnam for growth for the overall group.
CapitaLand's shares lost four cents to close at $4.11 yesterday.
Tuesday, November 24, 2009
ST : 274 precincts upgraded from 1993 to 2006
Nov 24, 2009
274 precincts upgraded from 1993 to 2006
A DETAILED list of HDB precincts whose estates were improved with such features as covered linkways, barbecue pits and community gardens was given in Parliament yesterday.
National Development Minister Mah Bow Tan gave them in a written reply to opposition MP Low Thia Khiang (Hougang) who had asked, among other things, for the precincts that were upgraded.
Between 1993 and 2001, a total of 190 precincts were selected for the Interim Upgrading Programme (IUP).
It cost the Government $4,000 per flat.
In 2002, the IUP for flats built between 1981 and 1986 was replaced by a combination of the IUP and the Lift Upgrading Programme (LUP).
Known as IUP Plus, the budget was $2,400 per flat, excluding the cost for lift upgrading.
In all, 84 precincts were picked for IUP Plus from 2002 to 2006.
However, in 2007, the IUP Plus was replaced by the Neighbourhood Renewal Programme, which groups a few precincts together for upgrading.
Targeted at blocks built in 1989 or earlier, the renewal programme, with its bigger budget, makes it possible to consider such features as tennis courts and skating parks.
No opposition precincts were selected for these upgrading programmes.
However, in July this year, the two opposition wards of Hougang and Potong Pasir were told the LUP would be offered to them.
Last month, one precinct of roughly 10 blocks in each of the two wards was selected for the LUP, which puts a lift landing on every floor.
It was a shift in position by the Government, which had said after the 2006 General Election that opposition wards would be placed 'at the end of the queue' for the LUP.
274 precincts upgraded from 1993 to 2006
A DETAILED list of HDB precincts whose estates were improved with such features as covered linkways, barbecue pits and community gardens was given in Parliament yesterday.
National Development Minister Mah Bow Tan gave them in a written reply to opposition MP Low Thia Khiang (Hougang) who had asked, among other things, for the precincts that were upgraded.
Between 1993 and 2001, a total of 190 precincts were selected for the Interim Upgrading Programme (IUP).
It cost the Government $4,000 per flat.
In 2002, the IUP for flats built between 1981 and 1986 was replaced by a combination of the IUP and the Lift Upgrading Programme (LUP).
Known as IUP Plus, the budget was $2,400 per flat, excluding the cost for lift upgrading.
In all, 84 precincts were picked for IUP Plus from 2002 to 2006.
However, in 2007, the IUP Plus was replaced by the Neighbourhood Renewal Programme, which groups a few precincts together for upgrading.
Targeted at blocks built in 1989 or earlier, the renewal programme, with its bigger budget, makes it possible to consider such features as tennis courts and skating parks.
No opposition precincts were selected for these upgrading programmes.
However, in July this year, the two opposition wards of Hougang and Potong Pasir were told the LUP would be offered to them.
Last month, one precinct of roughly 10 blocks in each of the two wards was selected for the LUP, which puts a lift landing on every floor.
It was a shift in position by the Government, which had said after the 2006 General Election that opposition wards would be placed 'at the end of the queue' for the LUP.
ST : Be realistic, Mah tells home buyers
Nov 24, 2009
Be realistic, Mah tells home buyers
HDB cannot build flats only in mature estates, or only on high floors
By Jessica Cheam
ST PHOTO: MALCOLM MCLEOD
THE Housing Board (HDB) cannot meet all expectations of home buyers even though the standard of housing has increased over the years, said National Development Minister Mah Bow Tan.
Addressing Parliament yesterday, he said some buyers seemed to have unrealistic expectations.
Mr Mah, who is 61, recalled his childhood days living in Kim Keat Avenue.
His then three-room HDB flat 'was like a palace' - even though there was just one toilet and bathroom in a flat with eight people.
'It was basic but it was like a palace to us because I had just come from a one-room (flat) with 10 people in Chinatown. So I think that reflects our expectations at that time and how things have changed,' he said.
Although new HDB flats are 'going to be even nicer over time... certain expectations, we cannot meet', he said.
HDB cannot build flats only in mature estates, or flats that are only on high floors, he pointed out.
'I need to have flats on the second floor and third floor as well. And who is going to live on these floors?
'So I think our commitment is that we will build and make available flats to young couples at affordable prices.'
The minister was responding to Nominated MP Viswa Sadasivan, who had wondered why - despite the measures for adequate and affordable housing - 'there appears to be a groundswell of discontent that first-time buyers are not able to buy the flats'.
Replying, Mr Mah shrugged off the suggestion that there is a groundswell of discontent.
However, feedback from the ground has shown that home buyers 'would like HDB to provide ready-made flats in good locations at cheaper prices, faster, better... and this is the reason why I think we have to better communicate our policies', said Mr Mah.
'But I dare say that there is also a mismatch of expectations, that there is an element of unrealistic expectations.'
He urged young Singaporeans to be realistic in their expectations. Even flats on the second floor will grow in value, he said. 'These flats will increase in value over time. The non-mature estates today will become the mature estates of tomorrow.'
Be realistic, Mah tells home buyers
HDB cannot build flats only in mature estates, or only on high floors
By Jessica Cheam
ST PHOTO: MALCOLM MCLEOD
THE Housing Board (HDB) cannot meet all expectations of home buyers even though the standard of housing has increased over the years, said National Development Minister Mah Bow Tan.
Addressing Parliament yesterday, he said some buyers seemed to have unrealistic expectations.
Mr Mah, who is 61, recalled his childhood days living in Kim Keat Avenue.
His then three-room HDB flat 'was like a palace' - even though there was just one toilet and bathroom in a flat with eight people.
'It was basic but it was like a palace to us because I had just come from a one-room (flat) with 10 people in Chinatown. So I think that reflects our expectations at that time and how things have changed,' he said.
Although new HDB flats are 'going to be even nicer over time... certain expectations, we cannot meet', he said.
HDB cannot build flats only in mature estates, or flats that are only on high floors, he pointed out.
'I need to have flats on the second floor and third floor as well. And who is going to live on these floors?
'So I think our commitment is that we will build and make available flats to young couples at affordable prices.'
The minister was responding to Nominated MP Viswa Sadasivan, who had wondered why - despite the measures for adequate and affordable housing - 'there appears to be a groundswell of discontent that first-time buyers are not able to buy the flats'.
Replying, Mr Mah shrugged off the suggestion that there is a groundswell of discontent.
However, feedback from the ground has shown that home buyers 'would like HDB to provide ready-made flats in good locations at cheaper prices, faster, better... and this is the reason why I think we have to better communicate our policies', said Mr Mah.
'But I dare say that there is also a mismatch of expectations, that there is an element of unrealistic expectations.'
He urged young Singaporeans to be realistic in their expectations. Even flats on the second floor will grow in value, he said. 'These flats will increase in value over time. The non-mature estates today will become the mature estates of tomorrow.'
ST : 'Ease rental rules' for divorced mums
Nov 24, 2009
'Ease rental rules' for divorced mums
By Cai Haoxiang
THE Housing Board needs to be more flexible when renting flats to divorced women with children, said Madam Halimah Yacob (Jurong GRC) yesterday.
She was speaking to The Straits Times after statistics released yesterday showed the HDB waived the eligibility criteria for renting flats for only a handful of divorced women with children last year.
In all, 649 had registered for homes but only 28 among them had the eligibility criteria waived.
Eventually, 200 were allocated rental flats, said National Development Minister Mah Bow Tan in a written reply to Parliament.
However, owing to the limited supply of rental flats, not all of them are due for allocation yet, said Mr Mah.
He gave the response to Madam Halimah who had asked earlier, among other things, how many of these women had applied to rent flats and were successful.
Her beef is with an existing rule which states that rental flat-seekers must not have sold an HDB flat or private property in the last 30 months.
However, in a divorce, the jointly owned flat is usually sold when the man and woman go their separate ways, a move that disqualifies them from applying for a rental home.
At the same time, these women often cannot afford to buy another flat. They can stay with family members, like a married brother or sister, but living in crowded conditions often causes conflict.
'One told me that she and her three children live in the living room of her brother's flat,' said Madam Halimah.
Also, most people do not rent flats to women with children, she added.
'Many of them are very desperate because they have young children to look after,' she said, adding that she had received about 30 requests for help from these women in the last few months.
In a separate written reply, the Minister for Community Development, Youth and Sports Vivian Balakrishnan said 57 per cent of the 6,328 civil divorce suits filed last year involved children younger than 21.
Detailed statistics on their ages and which parent had custody are unavailable, he added.
For Muslim divorces, 66 per cent of the 1,696 divorce suits involved children under the age of 21.
And in 62 per cent or 703 of the cases, the women get custody. For the rest, custody either went to the father or to both parents.
On average, the cases involve two children and the average age of each child is 11 years.
'Ease rental rules' for divorced mums
By Cai Haoxiang
THE Housing Board needs to be more flexible when renting flats to divorced women with children, said Madam Halimah Yacob (Jurong GRC) yesterday.
She was speaking to The Straits Times after statistics released yesterday showed the HDB waived the eligibility criteria for renting flats for only a handful of divorced women with children last year.
In all, 649 had registered for homes but only 28 among them had the eligibility criteria waived.
Eventually, 200 were allocated rental flats, said National Development Minister Mah Bow Tan in a written reply to Parliament.
However, owing to the limited supply of rental flats, not all of them are due for allocation yet, said Mr Mah.
He gave the response to Madam Halimah who had asked earlier, among other things, how many of these women had applied to rent flats and were successful.
Her beef is with an existing rule which states that rental flat-seekers must not have sold an HDB flat or private property in the last 30 months.
However, in a divorce, the jointly owned flat is usually sold when the man and woman go their separate ways, a move that disqualifies them from applying for a rental home.
At the same time, these women often cannot afford to buy another flat. They can stay with family members, like a married brother or sister, but living in crowded conditions often causes conflict.
'One told me that she and her three children live in the living room of her brother's flat,' said Madam Halimah.
Also, most people do not rent flats to women with children, she added.
'Many of them are very desperate because they have young children to look after,' she said, adding that she had received about 30 requests for help from these women in the last few months.
In a separate written reply, the Minister for Community Development, Youth and Sports Vivian Balakrishnan said 57 per cent of the 6,328 civil divorce suits filed last year involved children younger than 21.
Detailed statistics on their ages and which parent had custody are unavailable, he added.
For Muslim divorces, 66 per cent of the 1,696 divorce suits involved children under the age of 21.
And in 62 per cent or 703 of the cases, the women get custody. For the rest, custody either went to the father or to both parents.
On average, the cases involve two children and the average age of each child is 11 years.
ST Online Forum : Implement two systems of property taxation
Nov 24, 2009
Implement two systems of property taxation
I APPLAUD the Government for using the property tax system to regulate tax collection from homes in accordance with economic conditions.
For example, the upward revision of annual values (AVs) of HDB flats was delayed from Jan 1 this year. According to a press statement on its website, the Inland Revenue Authority of Singapore (Iras) reviews annually the AVs of all properties, including HDB flats, to ensure they reflect prevailing market rental values for the purpose of determining property tax.
The current reaction to the HDB rent increases was delayed and now the Government will give a one-off rebate to cushion the impact of the taxman's actions.
However, the announcement is silent on AVs of other properties. I suggest Iras segregate the imposition of property tax according to property type since it tackles a specific group at any one time, even after it has reviewed all properties.
Let me explain. Iras uses an assessment system to determine the property tax payable by homes which are mostly owner-occupied (that is, no rental evidence) and even grants a 4 per cent owner-occupier concession to residential homes.
However, such an assessment system is not efficient for properties that are rented out. Rented-out properties should be taxed on their actual income rather than reply on an assessment which can be prone to error of judgment.
I therefore urge the authorities to have two systems of property taxation - one based on assessment of the property if it is owner-occupied and another based on actual rent if it is leased out.
Patrick Sio
Implement two systems of property taxation
I APPLAUD the Government for using the property tax system to regulate tax collection from homes in accordance with economic conditions.
For example, the upward revision of annual values (AVs) of HDB flats was delayed from Jan 1 this year. According to a press statement on its website, the Inland Revenue Authority of Singapore (Iras) reviews annually the AVs of all properties, including HDB flats, to ensure they reflect prevailing market rental values for the purpose of determining property tax.
The current reaction to the HDB rent increases was delayed and now the Government will give a one-off rebate to cushion the impact of the taxman's actions.
However, the announcement is silent on AVs of other properties. I suggest Iras segregate the imposition of property tax according to property type since it tackles a specific group at any one time, even after it has reviewed all properties.
Let me explain. Iras uses an assessment system to determine the property tax payable by homes which are mostly owner-occupied (that is, no rental evidence) and even grants a 4 per cent owner-occupier concession to residential homes.
However, such an assessment system is not efficient for properties that are rented out. Rented-out properties should be taxed on their actual income rather than reply on an assessment which can be prone to error of judgment.
I therefore urge the authorities to have two systems of property taxation - one based on assessment of the property if it is owner-occupied and another based on actual rent if it is leased out.
Patrick Sio
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