Nov 13, 2009
Pasir Panjang Village Centre to go
New owner will tear down building and build condo in its place
By Jessica Lim
CHANGE is coming to the Pasir Panjang Village area, home to a clutch of pubs, restaurants and shops.
The Village Centre, a four-storey building housing a Cold Storage supermarket and various shops ranging from a nail salon to a laundromat, will be pulled down and rebuilt as a condominium with shop spaces on the first floor and in its basement.
The tenants in the building have been given until April next year to move out.
A 30-space carpark and a bungalow sitting next to the building will also become part of the new five-storey development, which will be ready by 2013.
But the row of pubs and restaurants occupying the conserved shophouses next door will stay.
This change comes just as this sleepy hollow seems to be blossoming into a slightly busier suburban nook.
Mr C. K. Ching, chief executive of boutique property developer Hume Homes, which owns The Village Centre, said the tenants have to go in order for the place to be revitalised.
'There will be a better concept, more variety and will really add to the environment. Now, the place is very quiet,' he said.
Hume Homes bought the building from Ridge Investments for $23 million in June. A showroom launch for the condominium will be held in January, and the wrecking ball will start swinging in April.
The commercial space in the new development has already attracted interest from Starbucks, while Cold Storage has also expressed interest in moving back in.
The building - at the junction of South Buona Vista and Pasir Panjang roads - was a quiet spot only two years ago.
But tenants have since moved in, and brought with them customers in search of food and a tipple, groceries and other services, though the buzz is nowhere near that of Holland Village.
The change has ruffled a few feathers.
Nail salon owner Doreen Tan, 35, said she signed a two-year lease for her second-floor shop, Vois, only in May, and had sunk $20,000 into renovations.
'When we got the news, it was such a big blow to us,' she said of the termination letter, which came last month.
Some residents also dread the loss of the area's only commercial development.
Mrs Davi Beschizza, an artist in her 40s, and a mother of one, who lives in a condominium a 10-minute walk from The Village Centre, said: 'It's going to be very inconvenient. We don't have any other supermarket near here. For the next three years, I will have to take a bus or taxi to Bukit Timah Plaza or West Coast Mall, both of which are quite far away.'
Friday, November 13, 2009
ST : Record $653,000 for 4-room flat
Nov 13, 2009
Record $653,000 for 4-room flat
Industry players caution high price for unit in Queenstown is a one-off
By Jessica Cheam
A FOUR-ROOM Queenstown HDB flat has sold for $653,000, setting a new record for price per sq ft (psf), amid continuing red-hot demand for resale flats.
The buyers, a male Indonesian permanent resident and a Singaporean woman, could have bought a condominium unit in an outlying area for the price.
But they were won over by the location, just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block, with unblocked views of greenery from all windows.
The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, sold for $68,000 above valuation - a level determined by an independent valuer.
This works out to $674 psf, smashing the previous record of $609 psf, achieved in January last year, by about 10 per cent.
This may be an unusually high price but resale prices have been moving up.
Recent Housing Board data shows resale flat prices surged 3.8 per cent in the first nine months of the year, reaching a historic level - surpassing even that of the 1997 property peak.
The deal was brokered by Mr Chris Neo, 32, and Kelvin Lim, 28, marketing directors of ERA Realty. Mr Neo told The Straits Times yesterday that the price was good for the prime location.
'Although at that price you could buy a private property somewhere else, at this location, you wouldn't be able to get private property for less than $900 psf,' said Mr Neo, who has three years' experience and specialises in HDB flats in Queenstown.
He clinched the deal by persuading the vendors, who had not been looking to sell, to part with their home - promising a good price. He then trawled property websites to look for potential buyers.
The buyers declined to be interviewed.
However, seller Michael Nandakumaran, 55, was thrilled. 'We were surprised that we could achieve this price, but are very glad about it,' he said.
The final selling price is about 2.5 times the $262,000 he and his wife paid a few years ago when their flat was selected for HDB's en bloc redevelopment scheme.
They paid a designer $60,000 to renovate their Queenstown home.
The couple, who have three children, are off to live in Jurong East in an HDB flat.
HDB's latest data shows four-room units in the Strathmore Avenue block sold for between $501,000 and $595,000 between February and June.
The latest record stunned some industry observers. Ngee Ann Polytechnic real estate lecturer Nicholas Mak said it was 'highly unusual' for buyers to pay that price when they could get a private condominium unit, albeit in an outlying estate.
Still, he feels that this could be the first of more to come as HDB resale flat prices creep up. 'The record will stand for a couple of quarters and if prices keep climbing, we'll see another record.'
ERA Asia-Pacific associate director Eugene Lim, however, thinks the sale is a one-off, owing to its good attributes.
'This is not common at all and is not the general trend. Usually, such sales happen only when there's a well-off buyer who wants a specific location and has the budget for it,' he said.
Mr Mak added: 'This sale is going to be quoted by sellers and agents to try and get people to pay higher prices. Buyers have to bear in mind such sales are not usual and not get pressured into paying more than they should.'
The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, is just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block. The price paid by the Indonesian buyer is about 2.5 times the $262,000 the seller and his wife paid a few years ago. -- ST PHOTO: DESMOND LIM
Record $653,000 for 4-room flat
Industry players caution high price for unit in Queenstown is a one-off
By Jessica Cheam
A FOUR-ROOM Queenstown HDB flat has sold for $653,000, setting a new record for price per sq ft (psf), amid continuing red-hot demand for resale flats.
The buyers, a male Indonesian permanent resident and a Singaporean woman, could have bought a condominium unit in an outlying area for the price.
But they were won over by the location, just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block, with unblocked views of greenery from all windows.
The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, sold for $68,000 above valuation - a level determined by an independent valuer.
This works out to $674 psf, smashing the previous record of $609 psf, achieved in January last year, by about 10 per cent.
This may be an unusually high price but resale prices have been moving up.
Recent Housing Board data shows resale flat prices surged 3.8 per cent in the first nine months of the year, reaching a historic level - surpassing even that of the 1997 property peak.
The deal was brokered by Mr Chris Neo, 32, and Kelvin Lim, 28, marketing directors of ERA Realty. Mr Neo told The Straits Times yesterday that the price was good for the prime location.
'Although at that price you could buy a private property somewhere else, at this location, you wouldn't be able to get private property for less than $900 psf,' said Mr Neo, who has three years' experience and specialises in HDB flats in Queenstown.
He clinched the deal by persuading the vendors, who had not been looking to sell, to part with their home - promising a good price. He then trawled property websites to look for potential buyers.
The buyers declined to be interviewed.
However, seller Michael Nandakumaran, 55, was thrilled. 'We were surprised that we could achieve this price, but are very glad about it,' he said.
The final selling price is about 2.5 times the $262,000 he and his wife paid a few years ago when their flat was selected for HDB's en bloc redevelopment scheme.
They paid a designer $60,000 to renovate their Queenstown home.
The couple, who have three children, are off to live in Jurong East in an HDB flat.
HDB's latest data shows four-room units in the Strathmore Avenue block sold for between $501,000 and $595,000 between February and June.
The latest record stunned some industry observers. Ngee Ann Polytechnic real estate lecturer Nicholas Mak said it was 'highly unusual' for buyers to pay that price when they could get a private condominium unit, albeit in an outlying estate.
Still, he feels that this could be the first of more to come as HDB resale flat prices creep up. 'The record will stand for a couple of quarters and if prices keep climbing, we'll see another record.'
ERA Asia-Pacific associate director Eugene Lim, however, thinks the sale is a one-off, owing to its good attributes.
'This is not common at all and is not the general trend. Usually, such sales happen only when there's a well-off buyer who wants a specific location and has the budget for it,' he said.
Mr Mak added: 'This sale is going to be quoted by sellers and agents to try and get people to pay higher prices. Buyers have to bear in mind such sales are not usual and not get pressured into paying more than they should.'
The four-year-old 969sqft unit at Forfar Heights, Strathmore Avenue, is just five minutes walk from Queenstown MRT station, and on the top, 40th floor of the block. The price paid by the Indonesian buyer is about 2.5 times the $262,000 the seller and his wife paid a few years ago. -- ST PHOTO: DESMOND LIM
BT : CDL sells $1b worth of homes in Q3
Business Times - 13 Nov 2009
CDL sells $1b worth of homes in Q3
It posts 28.4% jump in profit, sells North Bridge Commercial Complex
By KALPANA RASHIWALA
CITY Developments Ltd (CDL) sold 854 private homes for a total of about $1 billion in the third quarter of this year. As a result, its sales tally for the first nine months of 2009 came to 1,391 units worth about $1.72 billion, a big jump from the 360 units of about $340 million in the same period last year.
Residential projects that contributed to the group's latest Q3 sales include Volari in the Balmoral area, Hundred Trees in West Coast, Livia in Pasir Ris and The Arte at Thomson.
The property and hotels group posted a net profit of $193.6 million for the third quarter ended Sept 30, 2009, an increase of 28.4 per cent from $150.8 million a year ago. The improvement was due chiefly to its property development business. There was no one-off divestment gain, unlike for Q3 2008 when the sale of Commerce Point was booked.
For the first nine months, CDL's net earnings slipped 13.3 per cent to $416.75 million.
CDL said that it has agreed this month to sell all its 60 strata subdivided units in the 999-year-leasehold North Bridge Commercial Complex for $46 million. The sale is slated to be completed in March 2010 and profits will be booked in Q1 2010.
On the launch front this quarter, CDL is planning to offer a new 177-unit condo on Thomson Road next to The Arte. The project will comprise one to four-bedroom units, and they will be relatively small at affordable prices, the group said.
CDL generated $852.4 million cash flow from operating activities in the first nine months, a 175 per cent jump from $309.8 million previously. Gearing ratio improved to 42 per cent at end-September, from 48 per cent at end-December last year. CDL pointed out that this was not due to any fund-raising exercise such as rights issues or equity funding. Interest cover also improved to 13 times, compared to 11.7 times previously.
Group revenue increased 36.7 per cent to $940.9 million for Q3, and 5.5 per cent to $2.35 billion for the first nine months.
At Sentosa Cove, the group expects to complete construction of a yet-to-be-launched 228-unit condo on the Quayside Isle Collection plot towards the end of next year. The hotel and commercial components of the site could be completed in second-half 2012.
CDL, which is also a major office landlord, said that the group achieved occupancy of 90.3 per cent for its office portfolio as at end-Q3.
It said that the office market is seeing an increase in leasing activity. 'Occupiers are, in the meantime, still looking for lower-cost and better-value options, but there are selective companies seeking to expand.'
Looking ahead, CDL said that home buying interest in the next few months is expected to remain relatively stable, though not at the same pace as that experienced in Q2 and Q3 this year. This is on the back of the Monetary Authority of Singapore's recent statement that it may introduce further measures to cool the property market should there be risk of renewed escalation of speculative momentum.
'Compared to a year ago, positive property market sentiments are showing signs of recovery,' CDL said. 'For the group's property development segment, it has managed to lock in its profits from presales activities. It also has a wide spectrum of land bank catering to the different needs of the market segment and will be able to extract the appropriate land parcels, at the right time, to seize the opportunities as the market improves.'
The counter ended 12 cents lower at $10.08 yesterday.
CDL sells $1b worth of homes in Q3
It posts 28.4% jump in profit, sells North Bridge Commercial Complex
By KALPANA RASHIWALA
CITY Developments Ltd (CDL) sold 854 private homes for a total of about $1 billion in the third quarter of this year. As a result, its sales tally for the first nine months of 2009 came to 1,391 units worth about $1.72 billion, a big jump from the 360 units of about $340 million in the same period last year.
Residential projects that contributed to the group's latest Q3 sales include Volari in the Balmoral area, Hundred Trees in West Coast, Livia in Pasir Ris and The Arte at Thomson.
The property and hotels group posted a net profit of $193.6 million for the third quarter ended Sept 30, 2009, an increase of 28.4 per cent from $150.8 million a year ago. The improvement was due chiefly to its property development business. There was no one-off divestment gain, unlike for Q3 2008 when the sale of Commerce Point was booked.
For the first nine months, CDL's net earnings slipped 13.3 per cent to $416.75 million.
CDL said that it has agreed this month to sell all its 60 strata subdivided units in the 999-year-leasehold North Bridge Commercial Complex for $46 million. The sale is slated to be completed in March 2010 and profits will be booked in Q1 2010.
On the launch front this quarter, CDL is planning to offer a new 177-unit condo on Thomson Road next to The Arte. The project will comprise one to four-bedroom units, and they will be relatively small at affordable prices, the group said.
CDL generated $852.4 million cash flow from operating activities in the first nine months, a 175 per cent jump from $309.8 million previously. Gearing ratio improved to 42 per cent at end-September, from 48 per cent at end-December last year. CDL pointed out that this was not due to any fund-raising exercise such as rights issues or equity funding. Interest cover also improved to 13 times, compared to 11.7 times previously.
Group revenue increased 36.7 per cent to $940.9 million for Q3, and 5.5 per cent to $2.35 billion for the first nine months.
At Sentosa Cove, the group expects to complete construction of a yet-to-be-launched 228-unit condo on the Quayside Isle Collection plot towards the end of next year. The hotel and commercial components of the site could be completed in second-half 2012.
CDL, which is also a major office landlord, said that the group achieved occupancy of 90.3 per cent for its office portfolio as at end-Q3.
It said that the office market is seeing an increase in leasing activity. 'Occupiers are, in the meantime, still looking for lower-cost and better-value options, but there are selective companies seeking to expand.'
Looking ahead, CDL said that home buying interest in the next few months is expected to remain relatively stable, though not at the same pace as that experienced in Q2 and Q3 this year. This is on the back of the Monetary Authority of Singapore's recent statement that it may introduce further measures to cool the property market should there be risk of renewed escalation of speculative momentum.
'Compared to a year ago, positive property market sentiments are showing signs of recovery,' CDL said. 'For the group's property development segment, it has managed to lock in its profits from presales activities. It also has a wide spectrum of land bank catering to the different needs of the market segment and will be able to extract the appropriate land parcels, at the right time, to seize the opportunities as the market improves.'
The counter ended 12 cents lower at $10.08 yesterday.
BT : Property division helps boost Q2 profit 13% for Boustead
Business Times - 13 Nov 2009
Property division helps boost Q2 profit 13% for Boustead
By VEN SREENIVASAN
CONTINUED strong performance by its real estate division allowed Boustead Singapore to lift second- quarter earnings by a respectable 13 per cent in the face of challenging business conditions and unfavourable forex movement.
The engineering and infrastructure specialist posted a profit of $10.8 million for the quarter ended Sept 30, compared to $9.5 million a year ago. This was achieved despite a 12.7 per cent fall in revenue to $114.3 million.
The results translated into first-half net earnings of $20.2 million, which are 33.4 per cent up from last year's $15.2 million. Revenue came to $233.2 million, up 10.8 per cent from a year ago.
The group had net cash of $163.4 million and an order book in excess of $450 million as at end-September.
It declared an interim dividend of 1.5 cents.
The star performer during the quarter remained the real estate solutions division, which achieved revenue of $61.8 million, 7.7 per cent up year-on-year. This division's strong performance was underpinned by the steady progress of the industrial real estate solutions business, as well as improving revenue from the new township business in Libya, where Boustead is constructing a 1,164-villa township. To date, about one-third of the villas have been completed. The unit expects to continue clinching numerous projects in Singapore and around the world.
Commenting on the results, CEO and chairman Wong Fong Fui said that the first-half financial results were not unexpected given the generally challenging operating environment.
'Still, it was pleasing to see net profit growth of 33.4 per cent for the first half. Nonetheless, it is highly unlikely that we will be able to exceed our full-year record performance in FY2009, given that it is improbable that we will be able to unlock the value of any industrial leasehold facilities in FY2010.'
Property division helps boost Q2 profit 13% for Boustead
By VEN SREENIVASAN
CONTINUED strong performance by its real estate division allowed Boustead Singapore to lift second- quarter earnings by a respectable 13 per cent in the face of challenging business conditions and unfavourable forex movement.
The engineering and infrastructure specialist posted a profit of $10.8 million for the quarter ended Sept 30, compared to $9.5 million a year ago. This was achieved despite a 12.7 per cent fall in revenue to $114.3 million.
The results translated into first-half net earnings of $20.2 million, which are 33.4 per cent up from last year's $15.2 million. Revenue came to $233.2 million, up 10.8 per cent from a year ago.
The group had net cash of $163.4 million and an order book in excess of $450 million as at end-September.
It declared an interim dividend of 1.5 cents.
The star performer during the quarter remained the real estate solutions division, which achieved revenue of $61.8 million, 7.7 per cent up year-on-year. This division's strong performance was underpinned by the steady progress of the industrial real estate solutions business, as well as improving revenue from the new township business in Libya, where Boustead is constructing a 1,164-villa township. To date, about one-third of the villas have been completed. The unit expects to continue clinching numerous projects in Singapore and around the world.
Commenting on the results, CEO and chairman Wong Fong Fui said that the first-half financial results were not unexpected given the generally challenging operating environment.
'Still, it was pleasing to see net profit growth of 33.4 per cent for the first half. Nonetheless, it is highly unlikely that we will be able to exceed our full-year record performance in FY2009, given that it is improbable that we will be able to unlock the value of any industrial leasehold facilities in FY2010.'
BT : Ho Bee posts record 9-month profit
Business Times - 13 Nov 2009
Ho Bee posts record 9-month profit
By KALPANA RASHIWALA
HO BEE Investment posted a strong increase in third-quarter net earnings, lifting its top and bottom lines for the first nine months past the record showing for full year 2007.
Net profit for the quarter ended Sept 30 rose to $99.3 million from $18.7 million for Q3 last year. Revenue swelled from $52.5 million to $209.2 million, largely as a result of a big chunk of income booked for the Orange Grove Residences project, which was completed in July.
Ho Bee's first nine months net profit jumped from $81.8 million to $293.9 million. Revenue quadrupled from $263.5 million to $1.06 billion. The numbers surpass the full-year 2007 net earnings of about $272 million and revenue of $596 million.
The strong report-card for the first nine months was achieved despite the fact that Ho Bee booked some $110 million of writedowns in Q2 this year for fair-value changes of investment and development properties.
'The group's revenue and earnings for the next quarter will remain positive,' said Ho Bee chairman and CEO Chua Thian Poh.
Besides Orange Grove Residences, other projects that contributed to the group's performance in the Jan to Sept period include Vertis in the Amber Road area, Quinterra at Holland Road, and The Coast condo and Paradise Island villas at Sentosa Cove. Ho Bee sold the last of 29 villas at Paradise Island in August for $22 million. All five projects received Temporary Occupation Permit in the first nine months of this year. That's when developers book a chunk of earnings from units sold in residential property developments.
Collections from buyers from these projects boosted Ho Bee's coffers. It enjoyed a whopping $896 million net cashflow from operating activities in the first nine months of 2009. This enabled it to repay nearly $700 million of borrowings this year, trimming group borrowings from about $1.15 billion at end-2008 to $457 million at end-Sept 2009. Cash and cash equivalents stood at $161.6 million at end-Sept 2009, up from $45.1 million at end-2008. Net gearing fell to a low of 0.26 times at end-Sept 2009 from 1.26 times at end-2008.
Ho Bee's net asset value per share appreciated from $1.20 at end-2008 to $1.56 at end-Sept 2009. On the stockmarket yesterday, the counter ended three cents higher at $1.40.
Ho Bee has released two projects in the current quarter - Trilight at Newton Road and Parvis at Holland Hill. The latter is a joint project with MCL Land. So far, 61 Trilight units have been sold since its launch in October and 55 units sold at Parvis, which was released this month.
Next year, Ho Bee is expected to launch a 151-unit condo project at Sentosa Cove named Seascape. The group has another project - a 304-unit condo - in the upscale waterfront housing area which it's developing on the Pinnacle Collection site. This could possibly be released late next year. Ho Bee is developing both projects jointly with Malaysia's IOI group.
Ho Bee posts record 9-month profit
By KALPANA RASHIWALA
HO BEE Investment posted a strong increase in third-quarter net earnings, lifting its top and bottom lines for the first nine months past the record showing for full year 2007.
Net profit for the quarter ended Sept 30 rose to $99.3 million from $18.7 million for Q3 last year. Revenue swelled from $52.5 million to $209.2 million, largely as a result of a big chunk of income booked for the Orange Grove Residences project, which was completed in July.
Ho Bee's first nine months net profit jumped from $81.8 million to $293.9 million. Revenue quadrupled from $263.5 million to $1.06 billion. The numbers surpass the full-year 2007 net earnings of about $272 million and revenue of $596 million.
The strong report-card for the first nine months was achieved despite the fact that Ho Bee booked some $110 million of writedowns in Q2 this year for fair-value changes of investment and development properties.
'The group's revenue and earnings for the next quarter will remain positive,' said Ho Bee chairman and CEO Chua Thian Poh.
Besides Orange Grove Residences, other projects that contributed to the group's performance in the Jan to Sept period include Vertis in the Amber Road area, Quinterra at Holland Road, and The Coast condo and Paradise Island villas at Sentosa Cove. Ho Bee sold the last of 29 villas at Paradise Island in August for $22 million. All five projects received Temporary Occupation Permit in the first nine months of this year. That's when developers book a chunk of earnings from units sold in residential property developments.
Collections from buyers from these projects boosted Ho Bee's coffers. It enjoyed a whopping $896 million net cashflow from operating activities in the first nine months of 2009. This enabled it to repay nearly $700 million of borrowings this year, trimming group borrowings from about $1.15 billion at end-2008 to $457 million at end-Sept 2009. Cash and cash equivalents stood at $161.6 million at end-Sept 2009, up from $45.1 million at end-2008. Net gearing fell to a low of 0.26 times at end-Sept 2009 from 1.26 times at end-2008.
Ho Bee's net asset value per share appreciated from $1.20 at end-2008 to $1.56 at end-Sept 2009. On the stockmarket yesterday, the counter ended three cents higher at $1.40.
Ho Bee has released two projects in the current quarter - Trilight at Newton Road and Parvis at Holland Hill. The latter is a joint project with MCL Land. So far, 61 Trilight units have been sold since its launch in October and 55 units sold at Parvis, which was released this month.
Next year, Ho Bee is expected to launch a 151-unit condo project at Sentosa Cove named Seascape. The group has another project - a 304-unit condo - in the upscale waterfront housing area which it's developing on the Pinnacle Collection site. This could possibly be released late next year. Ho Bee is developing both projects jointly with Malaysia's IOI group.
ST : Five lawyers sued over sale of house
Nov 12, 2009
Five lawyers sued over sale of house
A PRIVATE investigator is suing five lawyers for professional negligence over the sale of his house in 2002.
Mr Simon Suppiah Sunmugam, 62, alleged that they had mistakenly paid property agency ERA $28,000 as a commission.
He said in his affidavit that he found the buyer of the property. The agency, therefore, did not deserve any payment.
The lawyers he is suing are Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low of the now-defunct firm Peter Low Tang & Belinda Ang. The firm represented his ex-wife Nee Shyam Huey in their May 1996 divorce.
The fifth lawyer he is suing is Mr Andrew John Hanam, who acted for him in the divorce.
The defence of the four lawyers is that they were hired by Madam Nee and not by Mr Suppiah, and thus owed him no professional obligation.
Mr Hanam is denying responsibility on the grounds that the sale of the Suppiahs' matrimonial home after the divorce was arranged by the other lawyers, so Mr Suppiah should refer to them to recover his losses.
Court documents showed that when Mr Suppiah defaulted in the divorce settlement, Madam Nee obtained a court order to sell the matrimonial home in Punggol.
She found a buyer for $1.6 million but Mr Suppiah objected because the price was too low. He then found a neighbour who was willing to pay $1.75 million.
He was expecting his share of the sales proceeds to reach $240,000, but received only $212,000 in July 2002.
When he discovered that a commission of $28,000 had been paid to the housing agent, he instructed Mr Hanam to write to the other lawyers to withhold payment. But it was too late.
At the opening of the civil suit yesterday, Mr Suppiah took the stand to tell his lawyer Alain A. Johns that despite the sale-and-purchase agreement, which did not authorise payment of the housing agent's commission, the five lawyers failed to protect his interest.
The hearing will continue next year.
Five lawyers sued over sale of house
A PRIVATE investigator is suing five lawyers for professional negligence over the sale of his house in 2002.
Mr Simon Suppiah Sunmugam, 62, alleged that they had mistakenly paid property agency ERA $28,000 as a commission.
He said in his affidavit that he found the buyer of the property. The agency, therefore, did not deserve any payment.
The lawyers he is suing are Ms Amarjit Kour, Mr Gregory Tang Wee Thiang, Ms Belinda Ang Choo Poh and Mr Peter Cuthbert Low of the now-defunct firm Peter Low Tang & Belinda Ang. The firm represented his ex-wife Nee Shyam Huey in their May 1996 divorce.
The fifth lawyer he is suing is Mr Andrew John Hanam, who acted for him in the divorce.
The defence of the four lawyers is that they were hired by Madam Nee and not by Mr Suppiah, and thus owed him no professional obligation.
Mr Hanam is denying responsibility on the grounds that the sale of the Suppiahs' matrimonial home after the divorce was arranged by the other lawyers, so Mr Suppiah should refer to them to recover his losses.
Court documents showed that when Mr Suppiah defaulted in the divorce settlement, Madam Nee obtained a court order to sell the matrimonial home in Punggol.
She found a buyer for $1.6 million but Mr Suppiah objected because the price was too low. He then found a neighbour who was willing to pay $1.75 million.
He was expecting his share of the sales proceeds to reach $240,000, but received only $212,000 in July 2002.
When he discovered that a commission of $28,000 had been paid to the housing agent, he instructed Mr Hanam to write to the other lawyers to withhold payment. But it was too late.
At the opening of the civil suit yesterday, Mr Suppiah took the stand to tell his lawyer Alain A. Johns that despite the sale-and-purchase agreement, which did not authorise payment of the housing agent's commission, the five lawyers failed to protect his interest.
The hearing will continue next year.
ST : Kwek launches 'cool' Studio M hotel brand
Nov 12, 2009
Kwek launches 'cool' Studio M hotel brand
He aims for 50 worldwide in five years, with first at Robertson Quay area
By Joyce Teo
PROPERTY tycoon Kwek Leng Beng launched an 'utterly cool' hotel brand boasting a Singapore label yesterday. He aims to have at least 50 outlets across the world in five years.
The Studio M in Singapore brand is being unleashed through the Millennium & Copthorne Hotels (M&C) chain with the first to open at 3, Nanson Road in the Robertson Quay area around April next year.
Singapore could eventually have three to five Studio Ms, which Mr Kwek describes as a 'cross-breed between a boutique hotel and the normal type of hotels'.
The brand will cater to mostly savvy business and leisure travellers but not tour groups, said Mr Kwek, who is executive chairman of Hong Leong Group, the parent of M&C.
Studio M outlets have been earmarked for the Middle East, India, China, Vietnam and possibly Britain - through management contracts and ownership.
The debut hotel at Nanson Road will cost $120 million and will be built on a site Hong Leong bought in late 2006. It paid $45.8 million, or $518 per sq ft of potential gross floor area, in the tender.
The hotel will have 365 rooms with interiors and open-air tropical decks designed by Italian architect Piero Lissoni.
'It is chic, stylish, and you don't have to pay a bomb for it,' said Mr Kwek. 'It is like a five-star hotel, but you pay four-star rates.' Rates have not been finalised, but a room will likely cost $230 to $250 a night, he said.
Mr Kwek described the Studio M brand as 'utterly cool' and a '21st century new generation type of hotel' that will boast the best technology and pack efficiency into mostly standard rooms of 270 sq ft.
He hatched the idea of creating a new hotel brand about four years ago, and said the brand will fill a gap in the market here. There is increasing demand from business travellers who want a distinctive and unique experience from their hotel in addition to functional services such as wireless connectivity, he said.
Room rates here have fallen this year, and while the hotel market is not as good as in pre-crisis days, Mr Kwek said it is set to improve.
'It is my belief that the IRs (integrated resorts) will bring different types of customers here,' he said, adding that a second Studio M could be built within the next 12 months.
A likely venue is the sleepy Orchard Hotel Shopping Arcade. Mr Kwek said they are studying the possibility of converting it into a Studio M.
He also believes the central business district and the Bukit Timah area could support Studio M outlets. And as if Studio M is not enough, Mr Kwek wants to create another hotel chain as 'the world is running out of brands'.
Creating another brand will allow M&C to leverage on its vast experience in running hotels across the world.
Kwek launches 'cool' Studio M hotel brand
He aims for 50 worldwide in five years, with first at Robertson Quay area
By Joyce Teo
PROPERTY tycoon Kwek Leng Beng launched an 'utterly cool' hotel brand boasting a Singapore label yesterday. He aims to have at least 50 outlets across the world in five years.
The Studio M in Singapore brand is being unleashed through the Millennium & Copthorne Hotels (M&C) chain with the first to open at 3, Nanson Road in the Robertson Quay area around April next year.
Singapore could eventually have three to five Studio Ms, which Mr Kwek describes as a 'cross-breed between a boutique hotel and the normal type of hotels'.
The brand will cater to mostly savvy business and leisure travellers but not tour groups, said Mr Kwek, who is executive chairman of Hong Leong Group, the parent of M&C.
Studio M outlets have been earmarked for the Middle East, India, China, Vietnam and possibly Britain - through management contracts and ownership.
The debut hotel at Nanson Road will cost $120 million and will be built on a site Hong Leong bought in late 2006. It paid $45.8 million, or $518 per sq ft of potential gross floor area, in the tender.
The hotel will have 365 rooms with interiors and open-air tropical decks designed by Italian architect Piero Lissoni.
'It is chic, stylish, and you don't have to pay a bomb for it,' said Mr Kwek. 'It is like a five-star hotel, but you pay four-star rates.' Rates have not been finalised, but a room will likely cost $230 to $250 a night, he said.
Mr Kwek described the Studio M brand as 'utterly cool' and a '21st century new generation type of hotel' that will boast the best technology and pack efficiency into mostly standard rooms of 270 sq ft.
He hatched the idea of creating a new hotel brand about four years ago, and said the brand will fill a gap in the market here. There is increasing demand from business travellers who want a distinctive and unique experience from their hotel in addition to functional services such as wireless connectivity, he said.
Room rates here have fallen this year, and while the hotel market is not as good as in pre-crisis days, Mr Kwek said it is set to improve.
'It is my belief that the IRs (integrated resorts) will bring different types of customers here,' he said, adding that a second Studio M could be built within the next 12 months.
A likely venue is the sleepy Orchard Hotel Shopping Arcade. Mr Kwek said they are studying the possibility of converting it into a Studio M.
He also believes the central business district and the Bukit Timah area could support Studio M outlets. And as if Studio M is not enough, Mr Kwek wants to create another hotel chain as 'the world is running out of brands'.
Creating another brand will allow M&C to leverage on its vast experience in running hotels across the world.
Record $653,000 for Four-room HDB flat
Nov 13, 2009
A four-bedroom HDB flat in Queenstown was sold for $653,000. The sale sets a new record for price per square foot (psf), amid the continuing demand for resale units.
The buyers, an Indonesian male residing permanently in the country and a Singaporean woman, could have purchased a condominium unit in the suburbs for the same price.
But the couple was won over by the location, which is just five minutes walk from Queenstown MRT station. The unit is also on the 40th floor, with unblocked views of the surrounding greenery from all windows.
The four-year-old 969 sq ft flat located at Forfar Heights in Strathmore Avenue, was sold above valuation for $68,000 - a level determined by an independent appraiser.
The price works out to $674 psf, which is 10 percent higher than the previous record of $609 psf achieved in January last year.
A four-bedroom HDB flat in Queenstown was sold for $653,000. The sale sets a new record for price per square foot (psf), amid the continuing demand for resale units.
The buyers, an Indonesian male residing permanently in the country and a Singaporean woman, could have purchased a condominium unit in the suburbs for the same price.
But the couple was won over by the location, which is just five minutes walk from Queenstown MRT station. The unit is also on the 40th floor, with unblocked views of the surrounding greenery from all windows.
The four-year-old 969 sq ft flat located at Forfar Heights in Strathmore Avenue, was sold above valuation for $68,000 - a level determined by an independent appraiser.
The price works out to $674 psf, which is 10 percent higher than the previous record of $609 psf achieved in January last year.
Thursday, November 12, 2009
High luxury-home prices are good
(Abstract by Business Times 12th Nov,2009 by Leslie Yee)
Policymakers can focus on alleviating life's anxieties such as providing low-cost quality education, healthcare coverage
I WORK in the real estate sector in Hong Kong but do not cover the residential property market. Nevertheless, like many residents of the Special Administrative Region, I have been fascinated by recent market developments. Over the past few months, prices have been rising, China buyers have been increasingly active, developers have been launching units and analysts have been talking about the lack of supply. Debate raged over the sustainability of price rises with the argument centring on lingering economic weakness versus abundant liquidity coupled with early signs of economic improvement.
News then broke in late October of Henderson Land's sale of a duplex at 39 Conduit Road for HK$439 million (S$78.54 million) or a world record HK$71,280 per square foot. What has since ensued is heated discussion over whether dreams of home ownership for the middle class in Hong Kong have been shattered in part due to rich China buyers driving up prices. Calls are being made for the government to tame the raging animal spirits in the Hong Kong residential market.
The themes playing out in the Hong Kong market are to some extent applicable to Singapore, although the Singapore private residential market rally this time round has been mass-market-led while that in Hong Kong is driven by the high end. Still, with Singapore's imminent opening of the integrated resorts, there could be a new spring in step for high-end properties.
In Hong Kong, questions being discussed include: Are foreigners pricing out locals? Do sky high prices for luxury units matter? What can and should government do to control property prices? What help if any should government render middle-class locals in owning their homes? Are the controversies in the property market a reflection of economic growth in recent years benefiting high-income earners disproportionately while the rest lag behind?
Invariably, there will be some degree of envy when wealthy foreigners come to any city and lord it over the locals. Such a scenario emerges in many a successful city, with rich Russians and Arabs in London, rich China nationals in Hong Kong and rich Indonesians in Singapore. However, should one follow the head rather than the heart, it is not just the Hong Kong property tycoons who ought to celebrate the sale of a luxury unit for HK$71,280 psf but everyone.
Wealthy people have a choice of where to invest their money. Hong Kong people should be proud that there are a fair number of rich people confident enough in Hong Kong's prospects to pay princely sums for property in the territory. Indeed, having millions poured into residential property helps generate real-estate-related jobs plus spending by the dwellers of luxury properties. Real estate investment may not generate the same amount of economic spin-offs as investment into manufacturing but they still bring economic benefits.
Singapore and Hong Kong share many similarities, key of which is that both cities, in my view, have a bright future catering to a rapidly growing Asia as hubs of finance, trade, transport, tourism, and various other services. Economic success of both cities does depend on keeping an open door to foreigners and this includes being broadly welcoming to participation by foreigners in the property market. Hong Kong has an important strategic fight on its hands of being competitively positioned as Shanghai and Beijing make strides up the league of global cities. The people of Hong Kong should be more concerned with the city's ability to thrive in an ever-changing global landscape than the state of the property market. Of course, should Hong Kong continue to grow as a key business hub, expect more reports of developers selling luxury units for mind-boggling sums.
Shelter is a basic need of man and owning a home is a key purchase decision for many people. Defining the type of housing that the middle class should be able to afford is, however, tricky. I believe that all policymakers can largely do is to ensure that there is adequate land supply such that there is a range of property types at different price points available. Just as with any consumer product, we should rely on developers to offer choice to meet a variety of needs.
It is not surprising that developments in the residential property market generate strong emotions. Very high prices at luxury projects are not mere aberrations and high prices at the high end can lead the rest of the market up. Nonetheless, the high end typically forms a small part of the wider market and purchasers at the high end tend to be financially strong, Thus, it would be wrong to see high luxury-unit prices as indicative of a property bubble, which is what policymakers rightly fret about. Instead, what policymakers could do is to be more effective in winning hearts and minds - that high prices at the high end are generally a good thing.
More critically, what policymakers in successful Asian cities can focus on is to put any discussion of residential real estate in a wider context. While anxieties of the middle class with regards to home ownership may be difficult to assuage, the state can focus on doing more in other areas to alleviate life's anxieties such as providing low-cost quality education, healthcare coverage and help with retirement savings. Let the pursuit of making a city a great place to work, live and play go together with ensuring that a range of needs of local residents are well taken care of. While not everyone can live in a prime neighbourhood, everyone can perhaps get reasonably good health care and education.
The writer is a Hong Kong-based real estate executive with extensive experience in the Singapore property market
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Policymakers can focus on alleviating life's anxieties such as providing low-cost quality education, healthcare coverage
I WORK in the real estate sector in Hong Kong but do not cover the residential property market. Nevertheless, like many residents of the Special Administrative Region, I have been fascinated by recent market developments. Over the past few months, prices have been rising, China buyers have been increasingly active, developers have been launching units and analysts have been talking about the lack of supply. Debate raged over the sustainability of price rises with the argument centring on lingering economic weakness versus abundant liquidity coupled with early signs of economic improvement.
News then broke in late October of Henderson Land's sale of a duplex at 39 Conduit Road for HK$439 million (S$78.54 million) or a world record HK$71,280 per square foot. What has since ensued is heated discussion over whether dreams of home ownership for the middle class in Hong Kong have been shattered in part due to rich China buyers driving up prices. Calls are being made for the government to tame the raging animal spirits in the Hong Kong residential market.
The themes playing out in the Hong Kong market are to some extent applicable to Singapore, although the Singapore private residential market rally this time round has been mass-market-led while that in Hong Kong is driven by the high end. Still, with Singapore's imminent opening of the integrated resorts, there could be a new spring in step for high-end properties.
In Hong Kong, questions being discussed include: Are foreigners pricing out locals? Do sky high prices for luxury units matter? What can and should government do to control property prices? What help if any should government render middle-class locals in owning their homes? Are the controversies in the property market a reflection of economic growth in recent years benefiting high-income earners disproportionately while the rest lag behind?
Invariably, there will be some degree of envy when wealthy foreigners come to any city and lord it over the locals. Such a scenario emerges in many a successful city, with rich Russians and Arabs in London, rich China nationals in Hong Kong and rich Indonesians in Singapore. However, should one follow the head rather than the heart, it is not just the Hong Kong property tycoons who ought to celebrate the sale of a luxury unit for HK$71,280 psf but everyone.
Wealthy people have a choice of where to invest their money. Hong Kong people should be proud that there are a fair number of rich people confident enough in Hong Kong's prospects to pay princely sums for property in the territory. Indeed, having millions poured into residential property helps generate real-estate-related jobs plus spending by the dwellers of luxury properties. Real estate investment may not generate the same amount of economic spin-offs as investment into manufacturing but they still bring economic benefits.
Singapore and Hong Kong share many similarities, key of which is that both cities, in my view, have a bright future catering to a rapidly growing Asia as hubs of finance, trade, transport, tourism, and various other services. Economic success of both cities does depend on keeping an open door to foreigners and this includes being broadly welcoming to participation by foreigners in the property market. Hong Kong has an important strategic fight on its hands of being competitively positioned as Shanghai and Beijing make strides up the league of global cities. The people of Hong Kong should be more concerned with the city's ability to thrive in an ever-changing global landscape than the state of the property market. Of course, should Hong Kong continue to grow as a key business hub, expect more reports of developers selling luxury units for mind-boggling sums.
Shelter is a basic need of man and owning a home is a key purchase decision for many people. Defining the type of housing that the middle class should be able to afford is, however, tricky. I believe that all policymakers can largely do is to ensure that there is adequate land supply such that there is a range of property types at different price points available. Just as with any consumer product, we should rely on developers to offer choice to meet a variety of needs.
It is not surprising that developments in the residential property market generate strong emotions. Very high prices at luxury projects are not mere aberrations and high prices at the high end can lead the rest of the market up. Nonetheless, the high end typically forms a small part of the wider market and purchasers at the high end tend to be financially strong, Thus, it would be wrong to see high luxury-unit prices as indicative of a property bubble, which is what policymakers rightly fret about. Instead, what policymakers could do is to be more effective in winning hearts and minds - that high prices at the high end are generally a good thing.
More critically, what policymakers in successful Asian cities can focus on is to put any discussion of residential real estate in a wider context. While anxieties of the middle class with regards to home ownership may be difficult to assuage, the state can focus on doing more in other areas to alleviate life's anxieties such as providing low-cost quality education, healthcare coverage and help with retirement savings. Let the pursuit of making a city a great place to work, live and play go together with ensuring that a range of needs of local residents are well taken care of. While not everyone can live in a prime neighbourhood, everyone can perhaps get reasonably good health care and education.
The writer is a Hong Kong-based real estate executive with extensive experience in the Singapore property market
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Group8asia-Aedas design for Punggol homes
(Abstract from Business Times 12th Nov, 2009 by Uma Shankari)
THE design for the first public housing project along the upcoming Punggol waterway has been chosen.
International architectural firm group8asia has emerged as winner of the Housing & Development Board's Punggol Waterfront housing design competition. Group8asia teamed up with local firm Aedas to come up with the winning design.
The development, which will be launched in mid-2010, will have about 1,200 mostly four-bedroom apartments and will offer residents an eco-friendly housing experience, HDB said.
National Development Minister Mah Bow Tan announced the winner at an HDB awards ceremony yesterday.
The design will set the benchmark for other developments along the 4.2km waterway. Mr Mah said: 'I am glad to note that the private sector has responded enthusiastically to the challenge of coming up with truly innovative design proposals for this highly anticipated housing project.'
More than 100 firms took part in the contest, half of them foreign firms from as far as Spain, the Netherlands, Japan and Hong Kong.
The government's plans call for about 21,000 homes to be built along the Punggol waterway - comprising 60 per cent public housing and 40 per cent private housing. The waterway is slated to be completed by end-2010.
The winning design will take shape on the first residential plot to be developed along the waterway.
HDB said that the design by group8asia and Aedas stood out from the rest for its sky terrace concepts, with spaces for roof gardens. Other winning attributes include the resort-like design of the development, the 'functional and workable layout' of the site, and the refreshing housing forms that could be replicated along the waterway.
Chong Fook Loong, HDB's deputy director for physical planning, said that homes in the development will be kept affordable. In the same vein, Mr Mah said during the awards ceremony that HDB must be mindful to be cost-effective when designing and building its flats.
The ceremony recognised seven winners with a total of 12 awards in the categories of construction safety, quality and design. Two companies, China Construction and Surbana International, won multiple awards. The other five winners were Thong Huat Brothers, Kian Hiap Construction, Kienta Engineering Construction, Sim Lian Construction and United Premas.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Refreshing: The winning design stood out from the rest for its sky terrace concepts, HDB says
THE design for the first public housing project along the upcoming Punggol waterway has been chosen.
International architectural firm group8asia has emerged as winner of the Housing & Development Board's Punggol Waterfront housing design competition. Group8asia teamed up with local firm Aedas to come up with the winning design.
The development, which will be launched in mid-2010, will have about 1,200 mostly four-bedroom apartments and will offer residents an eco-friendly housing experience, HDB said.
National Development Minister Mah Bow Tan announced the winner at an HDB awards ceremony yesterday.
The design will set the benchmark for other developments along the 4.2km waterway. Mr Mah said: 'I am glad to note that the private sector has responded enthusiastically to the challenge of coming up with truly innovative design proposals for this highly anticipated housing project.'
More than 100 firms took part in the contest, half of them foreign firms from as far as Spain, the Netherlands, Japan and Hong Kong.
The government's plans call for about 21,000 homes to be built along the Punggol waterway - comprising 60 per cent public housing and 40 per cent private housing. The waterway is slated to be completed by end-2010.
The winning design will take shape on the first residential plot to be developed along the waterway.
HDB said that the design by group8asia and Aedas stood out from the rest for its sky terrace concepts, with spaces for roof gardens. Other winning attributes include the resort-like design of the development, the 'functional and workable layout' of the site, and the refreshing housing forms that could be replicated along the waterway.
Chong Fook Loong, HDB's deputy director for physical planning, said that homes in the development will be kept affordable. In the same vein, Mr Mah said during the awards ceremony that HDB must be mindful to be cost-effective when designing and building its flats.
The ceremony recognised seven winners with a total of 12 awards in the categories of construction safety, quality and design. Two companies, China Construction and Surbana International, won multiple awards. The other five winners were Thong Huat Brothers, Kian Hiap Construction, Kienta Engineering Construction, Sim Lian Construction and United Premas.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Refreshing: The winning design stood out from the rest for its sky terrace concepts, HDB says
Don't give up confirmed list card again
(Abstract from Business Times 12th Nov,2009 by Kalpana Rashiwala)
Maintaining land supply will help alleviate volatilities in property prices and rents when cycles change suddenly
LAST week, the Ministry of National Development (MND) revealed a slate of eight residential sites that it would sell on the confirmed list starting January 2010. This came after a break of about a year on the sale of such sites.
Should confirmed list land sales have been suspended for such a long period? When markets suddenly pick up and land prices shoot up - as they have this year - it translates to less affordable homes in the mass-market segment.
For the Government Land Sales Programme to be effective, both the confirmed and reserve lists need to operate side by side. By restricting state land sales to the reserve list system - where sites are triggered for launch only upon successful application by developers - the state may effectively be giving all the cards to developers, who have their own self-interest at heart, first and foremost.
For instance, it would not be in a major office landlord's interest to make an application seeking the release of an office site from the reserve list if it is trying to fill a major office development and hopes that office rents will increase. However, if there is suddenly a pick-up in office demand - for example, if major financial institutions and funds resume their strategy of expanding in Asia and setting up hubs in Singapore - office rents could suddenly spike. Having sales of sites on the confirmed list would help to mitigate this.
Mass-market condo sites
Another drawback of selling land only through the reserve list has emerged of late, with prices of mass-market condo sites soaring at state tenders.
In October last year, MND suspended confirmed list land sales. That made sense at the time, during the dark days of the global financial crash. However, it continued the suspension for the first-half 2009 Government Land Sales programme and later, for the H2 2009 programme, even though developers' home sales had shown clear signs of revival by the time the H2 2009 slate was announced in early June.
After several months of strong home sales, especially in the mass-market segment, developers found that they had started to run out of entry-level private residential land. However, it was only in July that they began triggering residential sites for release through the reserve list. To date, six sites have been released, of which tenders for five have closed and been awarded - amid rising land prices.
Many of the sites are well located - near MRT stations, or near reservoirs. These are naturally the type of sites that developers would want released in the reserve list during a mass-market housing boom. However, such prime sites, because they are worth more, also lead to rising land values when there is a shortage of such plots in developers' landbanks. A rapid hike in land prices is not compatible with the national goal of keeping mass-market private home prices affordable.
Had the confirmed list not been suspended for the current half, the government could have used it to introduce some less-choice sites further away from MRT stations and not so near the city, just as it has now done for the H1 2010 confirmed list.
One can't blame developers for not wanting land released too early in the cycle from the reserve list. Frankly, it's not in their interest. Their motivation is to increase the value of their landbanks and existing properties; and having less land supply is generally better than having more supply.
There are also other factors at play. Developers don't have the best information - such as the size of new investments flowing into Singapore in the near future, how many permanent residents and new citizens Singapore will take in each year, and how much monies high net worth foreigners are parking in Singapore. The government has a much better idea.
Always maintaining at least a minimum supply in the confirmed list - in both good times and bad - will help alleviate the volatilities in land values, property prices and rents that come when cycles change suddenly, as they have in the mass-market private housing sector this year.
Booms and busts
While the government has, in the past, suspended the confirmed list midstream of its half-yearly programme when the market turns south, it has never restarted the confirmed list midstream when things suddenly picked up. Instead, it has waited for the prevailing half-year period to end before restarting the confirmed list. The argument for this would be that the authorities want to play by the rules and give more notice to market participants.
However, the substantial time-lag in resuming the confirmed list exaggerates the booms and busts in the property market.
That is why both lists need to operate side by side.
The government does not sell confirmed list sites if bids come in too low. Its usual policy is to award sites only if the top bids are at least 85 per cent of the Chief Valuer's assessed market value. This reserve-price formula - if rigorously applied - acts as a safety mechanism that would create a price floor for state land sites so that land prices don't crash and further erode market confidence in a downturn.
As the Singapore property market matures, it will be able to absorb news of confirmed list sites attracting no bids or low bids - and the sites subsequently not being sold by government. Over time, they will come to be seen as part of natural market cyclical fluctuations. The government should hold some of the cards by maintaining a confirmed list throughout instead of leaving everything in the hands of developers.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Maintaining land supply will help alleviate volatilities in property prices and rents when cycles change suddenly
LAST week, the Ministry of National Development (MND) revealed a slate of eight residential sites that it would sell on the confirmed list starting January 2010. This came after a break of about a year on the sale of such sites.
Should confirmed list land sales have been suspended for such a long period? When markets suddenly pick up and land prices shoot up - as they have this year - it translates to less affordable homes in the mass-market segment.
For the Government Land Sales Programme to be effective, both the confirmed and reserve lists need to operate side by side. By restricting state land sales to the reserve list system - where sites are triggered for launch only upon successful application by developers - the state may effectively be giving all the cards to developers, who have their own self-interest at heart, first and foremost.
For instance, it would not be in a major office landlord's interest to make an application seeking the release of an office site from the reserve list if it is trying to fill a major office development and hopes that office rents will increase. However, if there is suddenly a pick-up in office demand - for example, if major financial institutions and funds resume their strategy of expanding in Asia and setting up hubs in Singapore - office rents could suddenly spike. Having sales of sites on the confirmed list would help to mitigate this.
Mass-market condo sites
Another drawback of selling land only through the reserve list has emerged of late, with prices of mass-market condo sites soaring at state tenders.
In October last year, MND suspended confirmed list land sales. That made sense at the time, during the dark days of the global financial crash. However, it continued the suspension for the first-half 2009 Government Land Sales programme and later, for the H2 2009 programme, even though developers' home sales had shown clear signs of revival by the time the H2 2009 slate was announced in early June.
After several months of strong home sales, especially in the mass-market segment, developers found that they had started to run out of entry-level private residential land. However, it was only in July that they began triggering residential sites for release through the reserve list. To date, six sites have been released, of which tenders for five have closed and been awarded - amid rising land prices.
Many of the sites are well located - near MRT stations, or near reservoirs. These are naturally the type of sites that developers would want released in the reserve list during a mass-market housing boom. However, such prime sites, because they are worth more, also lead to rising land values when there is a shortage of such plots in developers' landbanks. A rapid hike in land prices is not compatible with the national goal of keeping mass-market private home prices affordable.
Had the confirmed list not been suspended for the current half, the government could have used it to introduce some less-choice sites further away from MRT stations and not so near the city, just as it has now done for the H1 2010 confirmed list.
One can't blame developers for not wanting land released too early in the cycle from the reserve list. Frankly, it's not in their interest. Their motivation is to increase the value of their landbanks and existing properties; and having less land supply is generally better than having more supply.
There are also other factors at play. Developers don't have the best information - such as the size of new investments flowing into Singapore in the near future, how many permanent residents and new citizens Singapore will take in each year, and how much monies high net worth foreigners are parking in Singapore. The government has a much better idea.
Always maintaining at least a minimum supply in the confirmed list - in both good times and bad - will help alleviate the volatilities in land values, property prices and rents that come when cycles change suddenly, as they have in the mass-market private housing sector this year.
Booms and busts
While the government has, in the past, suspended the confirmed list midstream of its half-yearly programme when the market turns south, it has never restarted the confirmed list midstream when things suddenly picked up. Instead, it has waited for the prevailing half-year period to end before restarting the confirmed list. The argument for this would be that the authorities want to play by the rules and give more notice to market participants.
However, the substantial time-lag in resuming the confirmed list exaggerates the booms and busts in the property market.
That is why both lists need to operate side by side.
The government does not sell confirmed list sites if bids come in too low. Its usual policy is to award sites only if the top bids are at least 85 per cent of the Chief Valuer's assessed market value. This reserve-price formula - if rigorously applied - acts as a safety mechanism that would create a price floor for state land sites so that land prices don't crash and further erode market confidence in a downturn.
As the Singapore property market matures, it will be able to absorb news of confirmed list sites attracting no bids or low bids - and the sites subsequently not being sold by government. Over time, they will come to be seen as part of natural market cyclical fluctuations. The government should hold some of the cards by maintaining a confirmed list throughout instead of leaving everything in the hands of developers.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Hersing Q3 profit soars on ERA's strong sales
(Abstract from Business Times 12th Nov,2009 by By Uma Shankari)
PROPERTY firm ERA Real Estate saw its Q3 profit jump more than five-fold year-on-year as it sold more homes.
Hersing Corporation, its listed parent company, said yesterday in its Q3 financial statement that ERA's after-tax profit for the three months ended Sept 30 climbed to $3.7 million, from $651,000 in 2008. Revenue rose 58 per cent to $57.1 million from $36 million.
'Not only have (home) prices increased, but the volume of transactions has also increased a lot,' said Hersing president Jack Chua.
The strong showing of its property division pushed Hersing's Q3 net profit up 315 per cent to $4.4 million, from $1.1 million in Q3 2008. Revenue rose 49 per cent to $67.2 million, from $45 million in 2008. Revenue was also boosted as Hersing's two other business divisions, StorHub Self Storage and its Western Union money transfer business, also posted better year-on-year results.
ERA marketed a slew of private home launches in the first nine months of the year, including Caspian, Double Bay Residences, The Gale and The Interlace. The company's data shows that of the 12,828 new private homes sold in the first three quarters of 2009, ERA's share came to 2,494, or about 19 per cent.
Mr Chua said that ERA has been working to increase its market share for sales of new private homes as the margins are better. 'New (private) homes contribute a bugger margin for the company than resale flats,' he said.
The firm is now best known for its HDB resale business. In the first nine months of 2009, ERA's market share of the HDB resale market came to 41 per cent.
Mr Chua also said that he expects ERA to be appointed as the marketing agent for more private property launches in 2010.
'The government is releasing more land for buildings more homes, so we will have more market opportunities for ERA,' he said, referring to the decision to restart the confirmed list of the Government Land Sales programme in the first half of next year to meet the strong demand for private homes.
ERA has already been appointed to market several private residential developments that could be launched in Q1 2010.
For the nine months ended Sept 30, ERA saw after tax profit climb 181 per cent to $5.8 million, while revenue rose 19 per cent to $116.1 million.
For Hersing, net profit for the first three quarters rose 116 per cent to $8 million, while revenue climbed 18 per cent to $144.8 million.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
PROPERTY firm ERA Real Estate saw its Q3 profit jump more than five-fold year-on-year as it sold more homes.
Hersing Corporation, its listed parent company, said yesterday in its Q3 financial statement that ERA's after-tax profit for the three months ended Sept 30 climbed to $3.7 million, from $651,000 in 2008. Revenue rose 58 per cent to $57.1 million from $36 million.
'Not only have (home) prices increased, but the volume of transactions has also increased a lot,' said Hersing president Jack Chua.
The strong showing of its property division pushed Hersing's Q3 net profit up 315 per cent to $4.4 million, from $1.1 million in Q3 2008. Revenue rose 49 per cent to $67.2 million, from $45 million in 2008. Revenue was also boosted as Hersing's two other business divisions, StorHub Self Storage and its Western Union money transfer business, also posted better year-on-year results.
ERA marketed a slew of private home launches in the first nine months of the year, including Caspian, Double Bay Residences, The Gale and The Interlace. The company's data shows that of the 12,828 new private homes sold in the first three quarters of 2009, ERA's share came to 2,494, or about 19 per cent.
Mr Chua said that ERA has been working to increase its market share for sales of new private homes as the margins are better. 'New (private) homes contribute a bugger margin for the company than resale flats,' he said.
The firm is now best known for its HDB resale business. In the first nine months of 2009, ERA's market share of the HDB resale market came to 41 per cent.
Mr Chua also said that he expects ERA to be appointed as the marketing agent for more private property launches in 2010.
'The government is releasing more land for buildings more homes, so we will have more market opportunities for ERA,' he said, referring to the decision to restart the confirmed list of the Government Land Sales programme in the first half of next year to meet the strong demand for private homes.
ERA has already been appointed to market several private residential developments that could be launched in Q1 2010.
For the nine months ended Sept 30, ERA saw after tax profit climb 181 per cent to $5.8 million, while revenue rose 19 per cent to $116.1 million.
For Hersing, net profit for the first three quarters rose 116 per cent to $8 million, while revenue climbed 18 per cent to $144.8 million.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
High-spec space losing favour due to low office rents
(Abstract from Business Times - 12 Nov 2009, by Emilyn Yap)
Some firms have gone back to leasing commercial space.
HIGH-spec industrial space has lost favour with tenants in the past few months. As office rents plunged, some companies have gone back to leasing commercial space, says Colliers International.
The move has, in turn, driven down rents for high-spec space. According to the property consultancy, the average monthly gross rent of high-spec space fell 14.1 per cent to $2.93 per square foot at end-September from $3.41 psf at end-March.
The lower rents reflect stiff competition for tenants, Colliers said, adding that some companies had taken advantage of the sharp drop in office rents to relocate to office premises.
This marks a reversal of the trend that started in 2007. As office rents soared on the back of a booming economy, more firms moved away from the central business district to cheaper high-spec industrial space.
But office rents have plummeted amid the economic slowdown. CB Richard Ellis said in September that monthly prime office rents averaged $7.50 psf in the third quarter, dropping 12.8 per cent from the previous quarter. They have fallen 53.4 per cent from their peak in Q3 last year.
Colliers said that on top of shrinking demand, a large supply of high-spec space is expected to appear next year, which has also contributed to falling rents.
In contrast, rents for some factories and warehouses have been relatively stable. Colliers said that from end-March to end-September, the average monthly gross rent of single-user factories in central Singapore stayed firm at $1.30 psf, while that of warehouses in eastern Singapore held up at $1.20 psf.
And on a positive note, Colliers said that there has been a noticeable pick-up in sales of industrial space. These involved mainly private investors, owner-occupiers and domestic companies.
While industrial space markets across the Asia-Pacific appear to be bottoming out, Colliers remains cautious in its outlook. It believes that these markets could stay subdued in the next 12 months, given that the global economy is still recovering and excess manufacturing capacity still exists.
Colliers research and advisory director Tay Huey Ying expects rents and capital values of factories and warehouses in Singapore to rise by up to 5 per cent in the next 12 months 'on the back of the expected improvement in the economy and the manufacturing sector, as well as more optimistic business sentiment'.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
Some firms have gone back to leasing commercial space.
HIGH-spec industrial space has lost favour with tenants in the past few months. As office rents plunged, some companies have gone back to leasing commercial space, says Colliers International.
The move has, in turn, driven down rents for high-spec space. According to the property consultancy, the average monthly gross rent of high-spec space fell 14.1 per cent to $2.93 per square foot at end-September from $3.41 psf at end-March.
The lower rents reflect stiff competition for tenants, Colliers said, adding that some companies had taken advantage of the sharp drop in office rents to relocate to office premises.
This marks a reversal of the trend that started in 2007. As office rents soared on the back of a booming economy, more firms moved away from the central business district to cheaper high-spec industrial space.
But office rents have plummeted amid the economic slowdown. CB Richard Ellis said in September that monthly prime office rents averaged $7.50 psf in the third quarter, dropping 12.8 per cent from the previous quarter. They have fallen 53.4 per cent from their peak in Q3 last year.
Colliers said that on top of shrinking demand, a large supply of high-spec space is expected to appear next year, which has also contributed to falling rents.
In contrast, rents for some factories and warehouses have been relatively stable. Colliers said that from end-March to end-September, the average monthly gross rent of single-user factories in central Singapore stayed firm at $1.30 psf, while that of warehouses in eastern Singapore held up at $1.20 psf.
And on a positive note, Colliers said that there has been a noticeable pick-up in sales of industrial space. These involved mainly private investors, owner-occupiers and domestic companies.
While industrial space markets across the Asia-Pacific appear to be bottoming out, Colliers remains cautious in its outlook. It believes that these markets could stay subdued in the next 12 months, given that the global economy is still recovering and excess manufacturing capacity still exists.
Colliers research and advisory director Tay Huey Ying expects rents and capital values of factories and warehouses in Singapore to rise by up to 5 per cent in the next 12 months 'on the back of the expected improvement in the economy and the manufacturing sector, as well as more optimistic business sentiment'.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
TODAY online : Reits required to hold mandatory AGMs
05:55 AM Nov 12, 2009SINGAPORE - Real estate investment trusts (Reits) will be required to hold annual general meetings, or AGMs, once every calendar year with effect from next year.
This is a new requirement introduced by the Monetary Authority of Singapore (MAS) under the revised Property Funds Appendix.
MAS said mandatory AGMs will enhance corporate governance for Reit by providing an important channel for communication between Reir managers and unit holders.
This will allow Reit managers to be more accountable to unit holders, MAS said.
In addition, MAS said AGMs will also provide a regular opportunity for Reit managers to seek general mandates from unitholders for the issuance of new units.
The central bank said the revision took into account feedback from its public consultation earlier this year as well as discussions with Reit players. Irene Chan
This is a new requirement introduced by the Monetary Authority of Singapore (MAS) under the revised Property Funds Appendix.
MAS said mandatory AGMs will enhance corporate governance for Reit by providing an important channel for communication between Reir managers and unit holders.
This will allow Reit managers to be more accountable to unit holders, MAS said.
In addition, MAS said AGMs will also provide a regular opportunity for Reit managers to seek general mandates from unitholders for the issuance of new units.
The central bank said the revision took into account feedback from its public consultation earlier this year as well as discussions with Reit players. Irene Chan
Wednesday, November 11, 2009
ST : S'pore household net wealth hits $1 trillion
Nov 11, 2009
S'pore household net wealth hits $1 trillion
HOUSEHOLDS have generally weathered the financial crisis well with net wealth rising to an all-time high of
$1 trillion as of Sept 30, after slumping to $895 billion in the first quarter this year.
The record numbers - released in the Monetary Authority of Singapore's (MAS) annual Financial Stability Review on Monday - go a long way towards explaining why the recession that has just ended seemed less painful than previous downturns.
The recovery in the stock and property markets since the first quarter is one reason, but Singaporeans are also richer as they saved, invested and paid down their debt.
The global economic recovery has meant a strong rebound in net wealth - assets minus liabilities.
Take property assets, for instance. The MAS data showed that real estate holdings have turned around - they were up by an estimated 9 per cent to $537 billion in the three months to Sept 30, from the low of $491 billion in the second quarter.
The central bank noted that household assets remain more than six times the value of household liabilities, while aggregate household net wealth is about four times the value of gross domestic product, up from about 3.6 times in the first quarter.
Singaporeans refused to splurge on credit, keeping debt at roughly the same level during the economic downturn, the data showed.
Total liabilities increased by just 4 per cent year-on-year in the third quarter - much lower than the long- term average growth rate of about 13 per cent, the MAS said.
Most of the increase came from mortgages, which account for the bulk of household borrowing. This was mainly due to the increased activity in the property market.
'In short, households have generally weathered the crisis relatively well on the back of their strong balance sheets,' said the MAS.
S'pore household net wealth hits $1 trillion
HOUSEHOLDS have generally weathered the financial crisis well with net wealth rising to an all-time high of
$1 trillion as of Sept 30, after slumping to $895 billion in the first quarter this year.
The record numbers - released in the Monetary Authority of Singapore's (MAS) annual Financial Stability Review on Monday - go a long way towards explaining why the recession that has just ended seemed less painful than previous downturns.
The recovery in the stock and property markets since the first quarter is one reason, but Singaporeans are also richer as they saved, invested and paid down their debt.
The global economic recovery has meant a strong rebound in net wealth - assets minus liabilities.
Take property assets, for instance. The MAS data showed that real estate holdings have turned around - they were up by an estimated 9 per cent to $537 billion in the three months to Sept 30, from the low of $491 billion in the second quarter.
The central bank noted that household assets remain more than six times the value of household liabilities, while aggregate household net wealth is about four times the value of gross domestic product, up from about 3.6 times in the first quarter.
Singaporeans refused to splurge on credit, keeping debt at roughly the same level during the economic downturn, the data showed.
Total liabilities increased by just 4 per cent year-on-year in the third quarter - much lower than the long- term average growth rate of about 13 per cent, the MAS said.
Most of the increase came from mortgages, which account for the bulk of household borrowing. This was mainly due to the increased activity in the property market.
'In short, households have generally weathered the crisis relatively well on the back of their strong balance sheets,' said the MAS.
TodayOnline : A HOME TO CALL YOUR OWN
A HOME TO CALL YOUR OWN
Let owners mortgage their HDB flats for private loans
05:55 AM Nov 09, 2009
by Conrad Raj editor-at-large conrad@mediacorp.com.sg
THE Housing and Development Board (HDB) has received numerous awards and kudos over the nearly 50 years of its existence, including the 2008 United Nations Public Service Award for providing affordable homes to the vast majority of Singaporeans.
For the most part, the commendations are deserved. More than 85 per cent of Singaporeans now live in an HDB flat with 95 per cent of them considered home-owners, according to HDB chairman James Koh Cher Siang. This must be the highest ratio of home-owners of any country in the world.
But while you can rent out your flat under certain conditions, and even do a lease buyback to unlock value if you are an elderly, you cannot mortgage your apartment for a loan even if the property is fully paid up for.
Why not? I could not get a proper answer from a phone call to the HDB.
So I went to its website where it said: "HDB flats can only be mortgaged to banks or financial institutions to finance the purchase of the flat itself. You are not allowed to use your HDB flat, which has been fully paid for, as collateral to banks to raise credit facilities for private reasons. This is to avoid exposing flat owners like yourself to the risk of losing your flat should you be unable to repay the bank loan."
This begs the question: Why this difference between an HDB flat, which in effect comes with a 99-year lease, and any other leasehold property?
Perhaps HDB's reasoning was valid and even necessary during those days, now long past, when most buyers were less sophisticated and less knowledgeable in the ways of modern finance. But people these days are more sophisticated.
And in any case, some HDB flat-owners already make themselves vulnerable to banking foreclosure rules when they take out a home loan from a financial institution. In other words, they are already exposed to the risk of losing their flat - allowing them to take out a mortgage loan does not add to that risk.
So why not let the flat owner have a shot at putting his asset to better use? Furthermore, shouldn't the financial institution be the best judge as to whether one's flat is good enough collateral for a loan?
Then there are those residents eligible for lease buyback - applicable to the elderly in three-room and smaller flats, who under the scheme would have the tail-end of their lease bought up by the HDB and given a monthly payment through an annuity for life. Why not offer them the alternative of using the flat to get a loan?
Over the last few years, the HDB has been easing its rules, especially on selling and tenanting out its flats. For instance, since 2003, anyone wishing to sell his flat bought with bank loans and without a Central Provident Fund housing grant, has been able to do so after living in it for a year, compared with two-and-a-half years previously.
The same time-lock applies to those who bought resale flats without housing grants, and who choose to refinance their mortgages with a bank loan.
You can also sublet your entire flat after living in it for five years in the case of a subsidised unit, and only three years if you did not use an HDB subsidy.
Yet, one cannot use the flat to get a private loan. And we are not talking small beer here. These days some HDB flats - especially those near a Mass Rapid Transit line - can cost almost as much as a private apartment.
Singaporeans these days are financially more sophisticated, and the HDB's rules ought to change with them. It's time the board eases its restrictions on using housing board flats as loan collateral, and let HDB dwellers really feel that they own their homes.
Let owners mortgage their HDB flats for private loans
05:55 AM Nov 09, 2009
by Conrad Raj editor-at-large conrad@mediacorp.com.sg
THE Housing and Development Board (HDB) has received numerous awards and kudos over the nearly 50 years of its existence, including the 2008 United Nations Public Service Award for providing affordable homes to the vast majority of Singaporeans.
For the most part, the commendations are deserved. More than 85 per cent of Singaporeans now live in an HDB flat with 95 per cent of them considered home-owners, according to HDB chairman James Koh Cher Siang. This must be the highest ratio of home-owners of any country in the world.
But while you can rent out your flat under certain conditions, and even do a lease buyback to unlock value if you are an elderly, you cannot mortgage your apartment for a loan even if the property is fully paid up for.
Why not? I could not get a proper answer from a phone call to the HDB.
So I went to its website where it said: "HDB flats can only be mortgaged to banks or financial institutions to finance the purchase of the flat itself. You are not allowed to use your HDB flat, which has been fully paid for, as collateral to banks to raise credit facilities for private reasons. This is to avoid exposing flat owners like yourself to the risk of losing your flat should you be unable to repay the bank loan."
This begs the question: Why this difference between an HDB flat, which in effect comes with a 99-year lease, and any other leasehold property?
Perhaps HDB's reasoning was valid and even necessary during those days, now long past, when most buyers were less sophisticated and less knowledgeable in the ways of modern finance. But people these days are more sophisticated.
And in any case, some HDB flat-owners already make themselves vulnerable to banking foreclosure rules when they take out a home loan from a financial institution. In other words, they are already exposed to the risk of losing their flat - allowing them to take out a mortgage loan does not add to that risk.
So why not let the flat owner have a shot at putting his asset to better use? Furthermore, shouldn't the financial institution be the best judge as to whether one's flat is good enough collateral for a loan?
Then there are those residents eligible for lease buyback - applicable to the elderly in three-room and smaller flats, who under the scheme would have the tail-end of their lease bought up by the HDB and given a monthly payment through an annuity for life. Why not offer them the alternative of using the flat to get a loan?
Over the last few years, the HDB has been easing its rules, especially on selling and tenanting out its flats. For instance, since 2003, anyone wishing to sell his flat bought with bank loans and without a Central Provident Fund housing grant, has been able to do so after living in it for a year, compared with two-and-a-half years previously.
The same time-lock applies to those who bought resale flats without housing grants, and who choose to refinance their mortgages with a bank loan.
You can also sublet your entire flat after living in it for five years in the case of a subsidised unit, and only three years if you did not use an HDB subsidy.
Yet, one cannot use the flat to get a private loan. And we are not talking small beer here. These days some HDB flats - especially those near a Mass Rapid Transit line - can cost almost as much as a private apartment.
Singaporeans these days are financially more sophisticated, and the HDB's rules ought to change with them. It's time the board eases its restrictions on using housing board flats as loan collateral, and let HDB dwellers really feel that they own their homes.
ST : This for developers and their customers
Nov 11, 2009
This for developers and their customers
NO PROPERTY bubble shall be tolerated. This bald assertion went down like a splash of cold water on the fast heating market when, in September, the Government stopped home loans on easy terms and chose not to extend concessionary support for developers upon its scheduled expiry next year. These concessions were granted in the last Budget. Speculative demand did slow as a result of these moves, but price levels were still too high for comfort. Developers were pushing their luck cashing in after a fallow period. Last week came an early announcement that land sales targeted at mass market buyers, including parcels for executive condominiums, will be available for bids early next year. Land releases have a gestation period between tender and launch, but the depressant effect on sentiment is immediate. The market understands that, like nothing else. This undoubtedly was the intention of the National Development Ministry, as the consensus among government trend trackers is that the variable economic recovery is hard to chart. It makes sense that asset price inflation associated with unjustified market exuberance has to be checked.
Within days, the Monetary Authority of Singapore reinforced the message with a prominent warning on real estate activity in its year-end Financial Stability Review. It cited risks covering the opposing contingencies of a faltering economic recovery leading to property portfolio devaluations, and a sustained recovery leading inevitably to higher interest rates, which would be trouble for the over-leveraged and the illiquid. The central bank's concern about macro stability is naturally holistic, seeing what adverse impact unrestrained stock and property bets in a period of unstable growth can have on the soundness of the banking system. Household debt shall not grow onerous, it is saying by extension. Banks' lending capacity must remain unimpeded so as to keep the economy oiled. It would be compromised if the rebound falters and brings in its train business failures, job losses and the ultimate danger of soured loans forcing banks to be again stringent with credit. The MAS bottom line (developers should prick their ears up here) is that further intervention in the property market would be necessary if 'speculative momentum' re-emerged.
Buying activity and price levels for the rest of the year and up till the next Budget is presented will tell if the industry and its customers see the inherent risks of acting too hastily on the rebound. It took Hong Kong a dozen years for property values to right themselves. But stable growth never stood a chance in that archetypal monetised enclave. Its government is now desperately acting to head off a bubble forming.
This for developers and their customers
NO PROPERTY bubble shall be tolerated. This bald assertion went down like a splash of cold water on the fast heating market when, in September, the Government stopped home loans on easy terms and chose not to extend concessionary support for developers upon its scheduled expiry next year. These concessions were granted in the last Budget. Speculative demand did slow as a result of these moves, but price levels were still too high for comfort. Developers were pushing their luck cashing in after a fallow period. Last week came an early announcement that land sales targeted at mass market buyers, including parcels for executive condominiums, will be available for bids early next year. Land releases have a gestation period between tender and launch, but the depressant effect on sentiment is immediate. The market understands that, like nothing else. This undoubtedly was the intention of the National Development Ministry, as the consensus among government trend trackers is that the variable economic recovery is hard to chart. It makes sense that asset price inflation associated with unjustified market exuberance has to be checked.
Within days, the Monetary Authority of Singapore reinforced the message with a prominent warning on real estate activity in its year-end Financial Stability Review. It cited risks covering the opposing contingencies of a faltering economic recovery leading to property portfolio devaluations, and a sustained recovery leading inevitably to higher interest rates, which would be trouble for the over-leveraged and the illiquid. The central bank's concern about macro stability is naturally holistic, seeing what adverse impact unrestrained stock and property bets in a period of unstable growth can have on the soundness of the banking system. Household debt shall not grow onerous, it is saying by extension. Banks' lending capacity must remain unimpeded so as to keep the economy oiled. It would be compromised if the rebound falters and brings in its train business failures, job losses and the ultimate danger of soured loans forcing banks to be again stringent with credit. The MAS bottom line (developers should prick their ears up here) is that further intervention in the property market would be necessary if 'speculative momentum' re-emerged.
Buying activity and price levels for the rest of the year and up till the next Budget is presented will tell if the industry and its customers see the inherent risks of acting too hastily on the rebound. It took Hong Kong a dozen years for property values to right themselves. But stable growth never stood a chance in that archetypal monetised enclave. Its government is now desperately acting to head off a bubble forming.
ST : Property cycles hard to predict
Nov 11, 2009
Property cycles hard to predict
But the Government will do its best to avoid boom-bust cycles, says Finance Minister
By Fiona Chan
PROPERTY cycles are hard to predict, but the Government will try to avoid boom-bust cycles, said Finance Minister Tharman Shanmugaratnam yesterday.
'We will keep our eyes on the ball and use all the tools at our disposal, but in a calibrated fashion,' he told about 80 business leaders at a forum to garner feedback for the Economic Strategies Committee. Mr Tharman is heading this committee to look into new ways for Singapore to grow.
The Government will probably not use 'macro tools' to manage property cycles, such as changing interest rates or exchange rates, because these rates have many other effects such as on businesses as well, said Mr Tharman in his concluding remarks at the forum.
But there are other options. These include tweaking rules on credit, adjusting land supply and - in extreme situations - amending tax policies, he said.
Two months ago, the Government introduced measures to help cool the property market, including removing the interest absorption payment scheme and significantly increasing land supply.
On Monday, the Monetary Authority of Singapore also highlighted the possibility that additional cooling measures may be needed if there is a renewed surge in property speculation.
'We do want to manage the property cycle as best we can, prevent boom and bust,' said Mr Tharman, adding that this is not easy as it is difficult to anticipate Singapore's property needs four or five years in advance. As for broader economic cycles, Singapore will always be exposed to ups and downs beyond its control, he said.
'As a city, and a global city at that, we will always be subject to global cycles in specific industries as well as the global macro cycle,' he said.
The important thing is to achieve good average growth over the cycle, rather than go for a lower growth path to avoid volatility, said Mr Tharman. 'If you try to dampen all volatility, you usually end up with a lower average as well.'
The unusually strong growth that Singapore enjoyed in 2006 and 2007 helped pull the average growth across the most recent business cycle up to 5 per cent, he added. Without this, wage growth in particular would have been weak.
So Singapore should opt for a path of good growth in incomes, but prepare its businesses and workers well for occasional shocks and respond quickly when they come, said Mr Tharman.
Singapore has 'not come out too badly' in the downturn in terms of its ability to buffer companies and employees and to prepare for recovery, he said. But for its next growth phase, the country must undergo a 'step change'. What are needed are higher skills, higher productivity and a higher level of expertise across the board.
Singapore could not engage in strategies of the industrial policy type, that try to plan well ahead of the market. But it moves quickly to identify emerging market trends and work with early adopters to develop clusters of real strength, Mr Tharman said.
One advantage that Singapore can use is its diversity of both people and companies. This will prove a big boon in an age where the Asian consumer is expected to be a key driver of economic growth, Mr Tharman said.
'In Singapore, you can get a feel of what is happening all around Asia... a sense of what the emerging drivers are.'
Property cycles hard to predict
But the Government will do its best to avoid boom-bust cycles, says Finance Minister
By Fiona Chan
PROPERTY cycles are hard to predict, but the Government will try to avoid boom-bust cycles, said Finance Minister Tharman Shanmugaratnam yesterday.
'We will keep our eyes on the ball and use all the tools at our disposal, but in a calibrated fashion,' he told about 80 business leaders at a forum to garner feedback for the Economic Strategies Committee. Mr Tharman is heading this committee to look into new ways for Singapore to grow.
The Government will probably not use 'macro tools' to manage property cycles, such as changing interest rates or exchange rates, because these rates have many other effects such as on businesses as well, said Mr Tharman in his concluding remarks at the forum.
But there are other options. These include tweaking rules on credit, adjusting land supply and - in extreme situations - amending tax policies, he said.
Two months ago, the Government introduced measures to help cool the property market, including removing the interest absorption payment scheme and significantly increasing land supply.
On Monday, the Monetary Authority of Singapore also highlighted the possibility that additional cooling measures may be needed if there is a renewed surge in property speculation.
'We do want to manage the property cycle as best we can, prevent boom and bust,' said Mr Tharman, adding that this is not easy as it is difficult to anticipate Singapore's property needs four or five years in advance. As for broader economic cycles, Singapore will always be exposed to ups and downs beyond its control, he said.
'As a city, and a global city at that, we will always be subject to global cycles in specific industries as well as the global macro cycle,' he said.
The important thing is to achieve good average growth over the cycle, rather than go for a lower growth path to avoid volatility, said Mr Tharman. 'If you try to dampen all volatility, you usually end up with a lower average as well.'
The unusually strong growth that Singapore enjoyed in 2006 and 2007 helped pull the average growth across the most recent business cycle up to 5 per cent, he added. Without this, wage growth in particular would have been weak.
So Singapore should opt for a path of good growth in incomes, but prepare its businesses and workers well for occasional shocks and respond quickly when they come, said Mr Tharman.
Singapore has 'not come out too badly' in the downturn in terms of its ability to buffer companies and employees and to prepare for recovery, he said. But for its next growth phase, the country must undergo a 'step change'. What are needed are higher skills, higher productivity and a higher level of expertise across the board.
Singapore could not engage in strategies of the industrial policy type, that try to plan well ahead of the market. But it moves quickly to identify emerging market trends and work with early adopters to develop clusters of real strength, Mr Tharman said.
One advantage that Singapore can use is its diversity of both people and companies. This will prove a big boon in an age where the Asian consumer is expected to be a key driver of economic growth, Mr Tharman said.
'In Singapore, you can get a feel of what is happening all around Asia... a sense of what the emerging drivers are.'
BT : Mustafa Warehouse closes doors to shoppers
Business Times - 11 Nov 2009
Mustafa Warehouse closes doors to shoppers
URA case against company due for mention in court today
THE shutters finally came down at Mustafa Warehouse in Kallang Pudding Road yesterday afternoon after the company was slapped with a writ of summons last Thursday by Urban Redevelopment Authority (URA) for unauthorised use of the warehouse building.
The case against the building's owner, Mohamed Mustafa & Samsuddin Co Pte Ltd, is due to be mentioned in the Subordinate Courts today.
The six-storey building is approved for warehouse use but for the past four weeks or so, a department store has been operating on the first level and a supermarket on level two. Commercial activities like these are not permitted in warehouse developments. The building's upper levels are used as a warehouse.
Yesterday afternoon, around 2pm, customers shopping in the facility were told to leave, after which staff started to close the shutters on the first two levels, BT understands. Customers were told to shop at Mustafa Centre in Little India instead.
Last week, when URA served the writ of summons to Mustafa, a URA spokeswoman said that approval to use the premises as a warehouse was given in 2001. Its owner subsequently submitted an application in 2004 to change the building's use to a wholesale centre for household goods and appliances.
'The application was not approved and URA advised the owner that the proposed wholesale centre use involves sale of products and is considered commercial use, which is not allowed in a warehouse development. URA recently received feedback regarding the unauthorised commercial activities,' URA's spokeswoman said last Thursday.
If found guilty, Mustafa could be fined up to $200,000 for the breach, which is classified as a planning offence under the Planning Act.
Mustafa Warehouse closes doors to shoppers
URA case against company due for mention in court today
THE shutters finally came down at Mustafa Warehouse in Kallang Pudding Road yesterday afternoon after the company was slapped with a writ of summons last Thursday by Urban Redevelopment Authority (URA) for unauthorised use of the warehouse building.
The case against the building's owner, Mohamed Mustafa & Samsuddin Co Pte Ltd, is due to be mentioned in the Subordinate Courts today.
The six-storey building is approved for warehouse use but for the past four weeks or so, a department store has been operating on the first level and a supermarket on level two. Commercial activities like these are not permitted in warehouse developments. The building's upper levels are used as a warehouse.
Yesterday afternoon, around 2pm, customers shopping in the facility were told to leave, after which staff started to close the shutters on the first two levels, BT understands. Customers were told to shop at Mustafa Centre in Little India instead.
Last week, when URA served the writ of summons to Mustafa, a URA spokeswoman said that approval to use the premises as a warehouse was given in 2001. Its owner subsequently submitted an application in 2004 to change the building's use to a wholesale centre for household goods and appliances.
'The application was not approved and URA advised the owner that the proposed wholesale centre use involves sale of products and is considered commercial use, which is not allowed in a warehouse development. URA recently received feedback regarding the unauthorised commercial activities,' URA's spokeswoman said last Thursday.
If found guilty, Mustafa could be fined up to $200,000 for the breach, which is classified as a planning offence under the Planning Act.
BT : SPH-led consortium makes top bid for Clementi mall
Business Times - 11 Nov 2009
SPH-led consortium makes top bid for Clementi mall
With FairPrice and Income onboard, it puts in $541.9m bid
(SINGAPORE) A joint venture involving Singapore Press Holdings (SPH) subsidiary Times Properties, NTUC FairPrice Co-Op and NTUC Income Insurance Co-op placed the top bid of $541.898 million for a mall being developed in Clementi Town Centre by the Housing & Development Board (HDB).
The top bid was 41.9 per cent above the next highest bid of $382 million, made by a joint venture involving Keppel Land's fund management unit Alpha Investment Partners and Guthrie.
HDB is building only the core structure and facade of the mall, which it aims to hand over to the winning bidder in August next year. The new owner will then finish the project internally, with flexibility to plan the theme and layout.
Clementi Mall - the working name for the property - comprises two basement levels and five storeys above ground with a maximum net floor area of 18,000 square metres or 193,750 square feet of retail space.
An air-conditioned bus interchange will be on the first level and the third level will be connected to Clementi MRT Station.
The SPH-led consortium's top bid works out to $2,797 per square foot (psf) based on the maximum allowable retail net floor area (NFA), says Stella Hoh, head of investments at Jones Lang LaSalle, which handled the tender exercise for the mall for HDB.
Including an estimated fitting-out cost of about $50 million, the unit price works out to $3,055 psf of retail NFA, she added.
Knight Frank managing director Danny Yeo, using a lower fit-out expenditure assumption of $40 million, says the top bid works out to about $3,003 psf of retail NFA.
'To achieve a 5.5 per cent to 6 per cent net property yield that most investors would want today for such an asset, an average gross monthly rental of about $18 psf would be required. Right now the average rental at the best suburban malls is about $15-16 psf,' he said.
'If they get their tenant mix right, it would not be a problem to grow the mall's rental level in a few years,' he added.
When contacted, a spokesman for SPH said: 'We intend to optimise the usage efficiency of the mall.'
He added that 'the joint venture parties have evaluated the business case for the project and believe that it is a reasonable bid', citing several factors, including the good catchment area.
Besides its location in Clementi Town, the property is in close proximity to the Holland, Bukit Timah and West Coast areas with key tertiary institutions such as the National University of Singapore, Ngee Ann Polytechnic, Singapore Polytechnic and UniSIM.
'There are not many malls in the area. The property is in a high-traffic area due to integrated transport amenities and the business will provide solid and steady income stream to the JV parties,' he added.
SPH is leading the joint venture with a 60 per cent stake, with FairPrice and Income taking 20 per cent each.
FairPrice will operate a supermarket and Income is also considering taking up some space in Clementi Mall, said SPH's spokesman.
The other bidders at yesterday's tender were Frasers Centrepoint Ltd ($352.1 million), the trustee of CapitaMall Trust, and Australia's Lend Lease group.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
SPH-led consortium makes top bid for Clementi mall
With FairPrice and Income onboard, it puts in $541.9m bid
(SINGAPORE) A joint venture involving Singapore Press Holdings (SPH) subsidiary Times Properties, NTUC FairPrice Co-Op and NTUC Income Insurance Co-op placed the top bid of $541.898 million for a mall being developed in Clementi Town Centre by the Housing & Development Board (HDB).
The top bid was 41.9 per cent above the next highest bid of $382 million, made by a joint venture involving Keppel Land's fund management unit Alpha Investment Partners and Guthrie.
HDB is building only the core structure and facade of the mall, which it aims to hand over to the winning bidder in August next year. The new owner will then finish the project internally, with flexibility to plan the theme and layout.
Clementi Mall - the working name for the property - comprises two basement levels and five storeys above ground with a maximum net floor area of 18,000 square metres or 193,750 square feet of retail space.
An air-conditioned bus interchange will be on the first level and the third level will be connected to Clementi MRT Station.
The SPH-led consortium's top bid works out to $2,797 per square foot (psf) based on the maximum allowable retail net floor area (NFA), says Stella Hoh, head of investments at Jones Lang LaSalle, which handled the tender exercise for the mall for HDB.
Including an estimated fitting-out cost of about $50 million, the unit price works out to $3,055 psf of retail NFA, she added.
Knight Frank managing director Danny Yeo, using a lower fit-out expenditure assumption of $40 million, says the top bid works out to about $3,003 psf of retail NFA.
'To achieve a 5.5 per cent to 6 per cent net property yield that most investors would want today for such an asset, an average gross monthly rental of about $18 psf would be required. Right now the average rental at the best suburban malls is about $15-16 psf,' he said.
'If they get their tenant mix right, it would not be a problem to grow the mall's rental level in a few years,' he added.
When contacted, a spokesman for SPH said: 'We intend to optimise the usage efficiency of the mall.'
He added that 'the joint venture parties have evaluated the business case for the project and believe that it is a reasonable bid', citing several factors, including the good catchment area.
Besides its location in Clementi Town, the property is in close proximity to the Holland, Bukit Timah and West Coast areas with key tertiary institutions such as the National University of Singapore, Ngee Ann Polytechnic, Singapore Polytechnic and UniSIM.
'There are not many malls in the area. The property is in a high-traffic area due to integrated transport amenities and the business will provide solid and steady income stream to the JV parties,' he added.
SPH is leading the joint venture with a 60 per cent stake, with FairPrice and Income taking 20 per cent each.
FairPrice will operate a supermarket and Income is also considering taking up some space in Clementi Mall, said SPH's spokesman.
The other bidders at yesterday's tender were Frasers Centrepoint Ltd ($352.1 million), the trustee of CapitaMall Trust, and Australia's Lend Lease group.
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved.
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