ST : Older malls losing shoppers, and shops

Jul 6, 2010

Older malls losing shoppers, and shops

Orchard retailers moving to new sites with higher traffic

By Jessica Lim

OLDER malls in Orchard Road are seeing smaller tenants jump ship because of the ever-changing flow of shoppers coursing through this prime area.

Smaller retailers at complexes such as The Heeren, The Centrepoint and Midpoint, say customers are more attracted to their shiny new neighbours Ion Orchard, 313@Somerset and the Mandarin Gallery.

At The Heeren, there are more than 20 boarded-up shop spaces and only about 60 tenants in operation. Business has halved in the past year for clothing store Mon Chavon, said its manager, Ms Wan Choy Kun. 'Sometimes, we get our first customer at 6pm. Then we hear them say the place is so empty they will not come here again.'

She hopes business will pick up when the mall's new anchor tenant, department store ALT, opens on Saturday.

Some businesses have seized the upper hand by migrating to the new malls, while others are closing down. In response, the managements of the malls are working to reinvent themselves.

The Heeren is one of them, but the revamp has come too late for designer shoe chain Limited Edt Vault, which moved out in April. Owner Mandeep Chopra opened two new outlets, at 313@Somerset and Marina Bay Sands (MBS), saying there were 'no walk-in customers at all' at the shop in The Heeren.

'The traffic has moved to the newer malls. It was a no-brainer to shut down the Heeren store and move elsewhere,' he said. The rental at 313@Somerset is similar to that at The Heeren, he added.

Ossia International, which manages brands like Camper and Springfield, pulled its Camper shoe store out of The Heeren in March, before its lease ended, and opened two outlets in Ion Orchard. Brand manager Pauline Sing said it left because of 'bad sales performance' with 'only about 10 walk-in customers a day'.

Down the road, at The Centrepoint, skincare chain L'Occitane moved out on June 24 and opened at MBS in the same month. Another tenant, handbag shop Furla, called it quits in May, after opening an outlet in Ion Orchard last year.

Men's clothing store Caserini will close down later this month when its lease ends, as it is in the red, said its spokesman. 'We were badly affected, especially when 313@Somerset opened.'

At Midpoint and Orchard Plaza, two of the older malls in Orchard Road, outlets such as Burger King, Midpoint Electronics and This Fashion have moved out in the past six months.

Not all malls have seen their tenants bail, however, with Ngee Ann City and Paragon and their higher-end tenant mix relatively unfazed.

And long-time stalwarts such as Robinsons at The Centrepoint are still packing them in. Robinson Group spokesman Donna Chua said it had 'no plans to move out of The Centrepoint'.

'We are fortunate to have a strong customer base, many of them long-standing and loyal customers,' she said.

The Centrepoint is working on 'improving tenant mix and introducing new concepts' to pull in more shoppers, said Frasers Centrepoint Malls general manager Wendy Low.

This includes a basement foodcourt which features new dishes such as crab roe dumplings from Shanghai, she added.

Acknowledging the recent departures at The Heeren, a spokesman for Swee Cheng Management, which manages the mall, said it is currently 'repositioning to focus on a new target market of the young and sophisticated professionals, managers, executives and businessmen crowd'.

ALT is an exclusive new entrant which will occupy three levels of prime space in the mall, he added.

About 1.5 million sq ft of lettable retail space was added to Orchard Road in the past year, said Orchard Road Business Association chairman May Sng, an increase of 25 per cent.

'In such a situation, there will definitely be cannibalisation,' she said.

Singapore Retailers Association president Jannie Tay said a ready supply of retail space has led to business owners being able to pick and choose.

'At the moment it's a retailers' market. They have more choice now and will get out of unprofitable places,' said Ms Tay, who suggested landlords reduce rents to make their malls more attractive to retailers or offer other incentives.

Old or new, Orchard Road malls also face competition from big suburban malls. Estate agents say they are drawing more shoppers, which consequently drives up rents at the more popular malls in the suburbs.

limjess@sph.com.sg



The boarded-up shops in The Heeren (above) show how much business there has faded since new malls such as 313@Somerset opened last year. -- PHOTOS: ST FILE, RAJ NADARAJAN

BT : Boutique developer buys Kim Keat site for $36m

Business Times - 06 Jul 2010

Boutique developer buys Kim Keat site for $36m

It will develop a 20-storey apartment building, with prices at about $1,400 psf

By KALPANA RASHIWALA

BOUTIQUE developer BS Capital has bought a freehold site at Kim Keat Road-Lorong Ampas for just over $36 million or $670 per square foot of potential gross floor area, including an estimated development charge of almost $25 million.

The Colourscan building now stands on the 32,544 sq ft site, but the Urban Redevelopment Authority has approved rezoning from Business 1 to residential use with 2.8 plot ratio - the ratio of maximum potential gross floor area to land area.

BS Capital plans to develop a 20-storey project with about 160 apartments - mostly studios, and one and two-bedders - ranging from about 400 to 700 sq ft per unit.

There will also be some four and five-bedroom penthouses, said the company's chief executive, Chin Teck Chuan.

The plan is to launch the proposed District 12 residential project within six months.

'We're targeting an average price of about $1,300-1,400 psf,' Mr Chin told BT yesterday.

The property was sold by Colourscan in a deal brokered by Colliers International.

Balestier has been gradually transformed into a vibrant and modern area, with a number of new residential projects and a commercial development slated to be completed in the next few years, said Colliers executive director of investment sales Ho Eng Joo.

In April, BT reported that the freehold Diamond Tower in Jalan Rajah, also in the Balestier area and District 12, was sold for $49.6 million or $652 psf per plot ratio including DC through a collective sale.

The Diamond Tower site is 27,323 sq ft and is zoned for residential use with 2.8 plot ratio.

Buyer EL Development plans to redevelop the site into a new apartment block with about 100 units comprising one, two and three-bedroom units.

BS Capital also developed The Lumiere off Shenton Way.

It plans to release for sale soon the final 55 apartments, which are on the 34th floor and above.

'Most of the units will be priced at $2,500 psf or more,' Mr Chin said.

The 99-year leasehold project, which is 45 storeys high, has ground floor retail space and 168 apartments.

The development is expected to receive Temporary Occupation Permit next month.

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



Making way: URA has approved rezoning the site from Business 1 to residential use with 2.8 plot ratio

ST : Prices of prime district homes at new high

Jul 6, 2010

Prices of prime district homes at new high

Outlook for rest of year less rosy as uncertainty in global economy likely to keep buyers away

By Jessica Cheam

PRIME property prices are at record highs having surpassed the peak seen in the first quarter of 2008, according to Jones Lang LaSalle (JLL).

Prices of prime homes - in Districts 9, 10 and 11 - shot up 8 per cent in the second quarter, hitting an average of $1,350 psf.

However, prices for luxury prime properties - those in the same districts but at least 3,500 sq ft in size and with ultra-luxurious fittings - are still about 8.4 per cent below the last peak in 2008, at about $2,500 psf.

Early government estimates last week said private home prices rose a higher- than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first.

JLL's report yesterday noted that price growth has been supported by an improved rental market.

Prime rentals have grown by an average of 10.8 per cent over the first half of the year, supported by increased demand from expatriates in the financial and petrochemical sectors, said JLL.

Investment sales also appear healthy.

DTZ Research said in a separate statement yesterday that investment sales for the second quarter posted a 64.1 per cent increase over the previous three months to hit $4.71 billion, of which 58.3 per cent were from residential transactions.

This was driven by a record-breaking quarter in sales of government sites earmarked for residential use. These totalled $1.85 billion in the second quarter, surpassing the $1.51 billion record set in the last quarter of 2007.

However, the outlook for the rest of the year is not as rosy.

JLL's head of research, South-east Asia, Dr Chua Yang Liang, noted that until buyers can predict the impact of the euro zone crisis on the property market, there will be further slowdown in both sales volume and price growth for the next six months.

JLL said the uncertainty in the global economy has kept buyers at bay: 3,127 caveats were lodged in the second quarter, a 21.6 per cent drop from the previous quarter.

Still, this is 78.4 per cent above the average of 1,753 units sold per quarter from 2000 to last year, noted JLL, whose figures are based on Urban Redevelopment Authority (URA) data as of June 26.

Its report found that the number of foreign buyers are falling - down 28.3 per cent to 898 in the second quarter compared with the previous quarter, while the number of local buyers slid by 21 per cent to 2,112 over the last quarter.

Chinese buyers are proving the most resilient.

They accounted for 18.5 per cent of caveats lodged by foreigners for resale private apartments in the second quarter - up from just 6.2 per cent in the first quarter of 2007.

JLL's head of residential, Ms Jacqueline Wong, noted that increasingly, 'Chinese buyers are climbing up the price ladder and buying up properties in the prime market which is traditionally dominated by the rich Indonesians and Malaysians'.

These are high-net-worth individuals who can spend at least $2.5 million, she said.

The caveats lodged by Chinese buyers for resale units priced $1.5million and above are more common today than a year ago, she added.

jcheam@sph.com.sg


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

RESILIENT

'Chinese buyers are climbing up the price ladder and buying up properties in the prime market which is traditionally dominated by the rich Indonesians and Malaysians.'

Jones Lang LaSalle head of residential Jacqueline Wong

BT : Dalvey Rd residential site offered for collective sale

Business Times - 06 Jul 2010

Dalvey Rd residential site offered for collective sale

By KALPANA RASHIWALA

A PLUM freehold residential site at Dalvey Road has come on the market. Villa D'Este, being offered through a proposed collective sale exercise, has a land area of about 55,480 square feet. Its guide price of $115 million reflects a unit land price of about about $2,343 per square foot of potential gross floor area. No development charge is payable.

Currently Villa D'Este comprises 12 apartments sitting in an area approved by Urban Redevelopment Authority for the most exclusive housing form - Good Class Bungalows.

Based on a URA circular dated April 6, 2009 and its guidelines, Villa D'Este may be redeveloped back to apartments, provided there is no intensification of the existing approved gross floor area (GFA) and storey height.

The GFA has been verified by the URA to be about 49,071 sq ft and the developer can choose to build 13 to 14 apartments with an average size of about 3,500 sq ft each, says CB Richard Ellis, the property's marketing agent.

Ten of the the 12 owners have signed the collective sale agreement.

Villa D'Este comprises a part three-storey and part four-storey apartment development sitting on a car park podium.

The site is located in tranquil surroundings overlooking mature trees and greenery. It is also within walking distance to the Singapore Botanic Gardens.

'The new development is expected to draw keen interest from foreign buyers, especially the Chinese and Indians, who would like to live within the most prestigious Good Class Bungalow areas but are unable to own landed properties. Given its excellent attributes, several foreign parties have already expressed their keen interest to acquire the site,' CBRE said in a news release yesterday.

Villa D'Este's tender closes on August 4.

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



Villa D'Este: The freehold site located close to the Singapore Botanic Gardens, nestles in tranquil surroundings overlooking mature trees and greenery

BT : CapitaLand's S'pore residential business CEO resigns

Business Times - 06 Jul 2010

CapitaLand's S'pore residential business CEO resigns

This marks the 5th departure of a senior exec at the group in last 2 years

By KALPANA RASHIWALA

PROPERTY giant CapitaLand yesterday announced the resignation of Patricia Chia as CEO of its Singapore residential business 'to spend more time with her family'.

Her job will be taken over by Wong Heang Fine, who will concurrently continue in his present role of developing CapitaLand's business in the Gulf Cooperation Council (GCC) region.

Ms Chia's resignation marks at least the fifth departure of a senior executive from the group in the past two years.

The departure train began to take off in September 2008, with the shocking announcement of the resignation of Pua Seck Guan, who was CEO of CapitaLand Retail and chief executive of CapitaMall Trust Management Ltd. The day after his resignation was announced, CapitaMall Trust lost over $300 million of its market capitalisation. Mr Pua now heads international operations at Indian real estate giant DLF and is based in Singapore; he has also set up his own property fund management outfit, Perennial Real Estate.

Then in December 2008, CapitaLand announced that its chief corporate officer Tham Kui Seng, was leaving, 'to pursue personal interest'.

In June last year, the company announced that its chief investment officer Kee Teck Koon, was retiring. However, Mr Kee was recently named chairman of CapitaMalls Malaysia Reit Management Sdn Bhd, the manager of the soon-to-be-listed CapitaMalls Malaysia Trust.

In April this year, it was announced that CapitaLand Financial CEO Lui Chong Chee, would exit the company on June 1 to pursue his personal interests. Mr Lui, however, remains as chairman of CapitaLand's Australian unit Australand.

Messrs Kee and Tham were members of CapitaLand Group president and CEO Liew Mun Leong's 'inner kitchen cabinet' as he terms his inner circle. Market watchers note that another member in that league to have parted ways earlier was Hiew Yoon Khong. He was CEO of CapitaLand Commercial and CapitaLand Financial when he left the group in 2003. He is now CEO of Mapletree Investments, a fully owned real estate subsidiary of Temasek Holdings.

In its statement yesterday announcing Ms Chia's departure, Mr Liew said: 'Patricia has worked with me in various capacities over the years. She joined Pidemco Land in 1996 and, given her excellent execution skills, she has played a key role in establishing CapitaLand Residential Singapore as a leading developer in Singapore today. She has now requested to step down to spend more time with her family and I have acceded to her request.'

CapitaLand was formed in 2000 out of a merger between Pidemco Land and DBS Land.

Ms Chia is 55.

Her successor, Mr Wong, 52, holds degrees in mechanical engineering, and engineering production and management.

'Heang Fine, with his track record in the areas of engineering and construction globally, will bring a new perspective to the Singapore residential business as we enter the next phase of growth,' Mr Liew said.

Mr Wong joined the CapitaLand Group in 2006. He had previously been president and CEO of SembCorp Engineers and Constructors and prior to that, held the same post at Cathay Organisation Holdings.

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



Ms Chia: Key role in establishing CapitaLand Residential S'pore as a leading developer

BT : Hot money flowing into stocks, property

Business Times - 06 Jul 2010

Hot money flowing into stocks, property

(BEIJING) China's high economic growth and expectations of a stronger yuan are luring global speculative funds into its stock and property markets, a senior foreign exchange regulator said in remarks published yesterday.

Deng Xianhong, vice-head of the State Administration of Foreign Exchange, said China must step up efforts to reform exchange rate policies and let the market play a fundamental role in deciding the value of the yuan.

'Against the backdrop of the global financial crisis, China's good economic fundamentals, a strengthening currency as well as a positive gap in interest rates between home and abroad have been the main reasons attracting a continuous inflow of foreign capital,' Mr Deng told the official People's Daily.

Since February, the administration had detected 190 illegal foreign exchange transactions involving a total sum of US$7.4 billion, he said\. \-- Reuters

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

BT : Glorious Property cautious on H2 sales outlook

Business Times - 06 Jul 2010

Glorious Property cautious on H2 sales outlook

(HONG KONG) Chinese developer Glorious Property says it is cautious about the outlook for sales later this year, after the central government unveiled harsh measures to rein in the red-hot property sector.

The Shanghai-based developer logged contracted sales of 4.2 billion yuan (S$862 million) in the first six months of this year, up about a third from the same period a year earlier, senior executives said yesterday. In June alone, contracted sales were 890 million yuan, up from about 220 million yuan in May, they said, adding that there were uncertainties for the remainder of the year.

'We are quite cautious about the second half. We'll mainly be monitoring property policies - whether the government adopts a tightening or loosening attitude,' CEO Cheng Lixiong told a news conference here.

In mid-April, China announced a series of property measures to tighten the market, such as raising minimum downpayments and mortgage rates for second homes, and raising downpayments for first-home buyers purchasing huge apartments.

Urban property prices rose an annual 12.4 per cent in May, easing from April when prices climbed at a record pace, government data showed. Compared with April, May prices were up 0.2 per cent, also trending lower.

The tightening measures, coupled with Europe's debt crisis, are also prompting the developer to put its plans to issue a dollar bond on hold. 'The debt market is too volatile now. We feel that it's not the right time to issue the bonds because of demand uncertainty and the costs of issuing,' Mr Cheng said\. \-- Reuters

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

BT : Sunway sees its prices rising 20% from 2008

Business Times - 06 Jul 2010

Sunway sees its prices rising 20% from 2008

It believes focus on premium properties will place it ahead of competition

(KUALA LUMPUR) Sunway City Bhd (Suncity), developer of the Sunway Integrated Resort City in Bandar Sunway, expects prices at its property launches to increase by 20 per cent this year from 2008.

Its managing director of property development in Malaysia, Ho Hon Sang, said this was in line with the current market trend.

'Suncity's launches for this year will mainly be in the Klang Valley with a gross development value of RM1.5 billion (S$651 million),' he told Bernama in an interview.

Suncity, Mr Ho said, believes that its premium pricing strategy of focusing on properties with 'green initiatives' that promote quality of life will place it well ahead of competitors.

'Our property prices are usually 10 to 20 per cent above the competitors,' he said.

According to Mr Ho, the Malaysian property market is not expected to enter a bubble stage despite rising prices due to the limited supply of land in prime areas, and availability of liquidity at the banks and institutions such as the Employees Provident Fund (EPF).

'Malaysian property prices are still lower compared to Singapore,' he said.

Suncity began its green journey back during its Sunway Integrated Resort City in Bandar Sunway, an iconic project which encompasses a township of medical, university, shopping and retail mall as well as resort and hotels.

'We have also emphasised on security with the implementation of CCTV within strategic roads and location and auxiliary police to ensure proper surveillance,' Mr Ho said. 'Sustainable construction is certainly here to stay as Malaysians are becoming more environmentally conscious. Moreover, it is widely practised by other developers overseas,' he said.

He also said that Lafarge Malayan Cement Bhd's cement products such as the Phoenix complemented the group's objective to promote sustainable construction.

The group's efforts in going green were given recognition when the Sunway Palazzio development in Sri Hartamas, Kuala Lumpur, was awarded the Gold Award in High Rise Residential Development by Singapore's Building and Construction Authority Green Mark Scheme.

Sunway Palazzio is the first high-rise residential development in Malaysia to receive the coveted award based on five criteria - energy efficiency, water efficiency, site/project development and management, good indoor environmental quality and environmental protection, and innovation. -- Bernama



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

BT : Islamic loans hit five-year low on declining property prices

Business Times - 06 Jul 2010

Islamic loans hit five-year low on declining property prices

Downgrade of credit rankings by ratings agencies makes borrowing costlier

(DUBAI) Syariah-compliant loans slumped to a five- year low in Europe, the Middle East and Africa in the first half on credit-ratings downgrades and falling property prices.

Islamic syndicated loans declined 40 per cent to US$2.2 billion, compared with a 5 per cent drop in total lending to US$304 billion, according to data compiled by Bloomberg. Real estate prices have dropped 50 per cent in the United Arab Emirates from their peak in August 2008, according to estimates from Colliers International.

'Banks have plenty of liquidity but they have been very selective when it comes to where they would like to deploy it,' Faisal Hijazi, business development manager of rating services and Islamic finance in Dubai at Moody's Investors Service, said in a July 1 interview in Kuala Lumpur. 'Real estate and investment companies seem to be the most seriously challenged when it comes to refinancing.'

Middle East property developers have been forced to renegotiate loans and bonds after they struggled to meet their obligations, prompting ratings companies to downgrade credit rankings and making borrowing more expensive. The last time banks made fewer Islamic loans was in 2005, when the total was US$75 million.

The UAE's state-owned Dubai World, Saudi Arabia-based Saad Group and Investment Dar Co in Kuwait announced plans in the past year to restructure debt. Dubai Holding Commercial Operations Group, a real estate and hospitality company, had its rating cut to B2 on June 30 by Moody's, five levels below investment grade.

Islamic finance transactions are based on the exchange of assets rather than interest to comply with the syariah principles.

Created in the 1970s, the industry's assets may quadruple to US$2.8 trillion by 2015 from about US$700 billion in 2005, according to the Kuala Lumpur-based Islamic Financial Services Board, a standards-setting body.

Dubai Department of Finance's sukuk, or Islamic bonds, have dropped since the debt was sold in October. The 6.396 per cent note maturing in November 2014 yielded 7.82 per cent, 145 basis points more than 6.37 per cent at the time of issue, according to Bloomberg bond trader composite prices. The rate reached a record high of 10.29 per cent on Feb 15. The securities' spread over similar- maturity US Treasuries narrowed 187 to 624 in the same period.

The HSBC/Nasdaq Dubai US Dollar Sukuk Index, made up of sukuk from Indonesia to Saudi Arabia, gained 0.8 per cent in the three months ended June 30. The average yield on corporate and government sukuk dropped seven basis points, or 0.07 percentage point, to 6.29 per cent last quarter, according to the HSBC/Nasdaq Dollar Sukuk Index.

The yield on Malaysia's 3.928 per cent Islamic notes due June 2015 fell one basis point last week to 3.57 per cent, according to prices from Royal Bank of Scotland Group.

Dubai companies may have to restructure loans due over the next 12 to 18 months, Moody's said in a report on June 14. Arab companies in the Persian Gulf region have US$28 billion of debt maturing in 2012, Moody's said.

The loan of Qatari Diar Real Estate Development Co, a unit of the Gulf state's sovereign wealth fund, was one of four Islamic loans in Europe, Middle East and Africa so far this year, the data show. It borrowed US$300 million in April from banks led by HSBC Holdings plc, Europe's biggest lender by market value, Bloomberg data show.

In Asia, the Malaysian government's plan to spend RM230 billion (S$99.3 billion) on development projects from 2011 to 2015 may boost demand for financing, according to rating company RAM Holdings Bhd. Bank loans in Malaysia more than doubled to US$4.1 billion in the first half, the highest in two years, after the country climbed out of its first recession in a decade last year.

Malaysia's economy is forecast by Prime Minister Najib Razak to expand as much as 6 per cent this year after shrinking 1.7 per cent in 2009.

Maybank Islamic Bhd, a unit of Malaysia's largest lender Malayan Banking Bhd, expects to increase Islamic loans by 20 per cent to 30 per cent for the financial year ending June 2011, chief executive officer Ibrahim Hassan said in a message to Bloomberg on July 1.

Dubai World, whose unit Nakheel is building palm-shaped islands off Dubai's coast, reached an agreement with its main creditor group in May to restructure US$23.5 billion of liabilities.

Saad Trading, Contracting and Financial Services Co, a unit of Saad Group owned by billionaire Maan al-Sanea and his family, defaulted on a US$650 million sukuk in November. Investment Dar, the Kuwait- based owner of half of Aston Martin Lagonda Ltd, was unable to meet obligations on its outstanding US$30 million debt in April last year, according to data compiled by Bloomberg.

The company and its creditors agreed to most commercial aspects of restructuring liabilities, the creditors committee said on June 14. It had 1.03 billion dinars (S$4.9 billion) of debt outstanding at the end of September 2008.

'The quality of the creditors has deteriorated,' Mr Hijazi of Moody's said during an Islamic capital market forum in Kuala Lumpur. 'So the uncertainty is still pretty much there.' - Bloomberg

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

BT : More than just K-pop heading here from Seoul

Business Times - 06 Jul 2010

More than just K-pop heading here from Seoul

Korean investors building up property holdings in Asia, including Singapore

By OLIVIA HO

SOUTH Korean investors are keen on a larger slice of their Asian neighbours' real estate pie - and some of them have their eye on Singapore.

Korean investment in Asian real estate may currently be worth more than US$10 billion, estimates Derek Wong, director of real estate investment & finance at Woori, Korea's largest financial group. This sum, he believes, has the potential to increase by 52-100 per cent over the next 3-5 years.

Forced to take rain checks for over a decade by not one but two financial crises, Korean investors can finally seek overseas investment opportunities under clear skies. And they are doing so with a vengeance.

'With Korean National Pension Service (NPS) acquiring more than US$3 billion worth of overseas real estate in the last six months, we expect other Korean pension, insurance and investment funds to follow suit,' says Mr Wong.

NPS plans to have 6.6 per cent of assets in overseas equities in 2011, compared with 5.1 per cent targeted for this year, and is considering establishing a fund that will focus on investments in Asia.

Besides the pension funds, Mr Wong names conglomerates with a lot of liquidity - such as Samsung, Daewoo and Hyundai - as well as insurance companies such as Samsung Insurance and Woori Aviva as other investors with pent-up interest and strong balance sheets.

'Since the 1997 Asian financial crisis, when Korean conglomerates were badly hit, Korean corporates had to strengthen their corporate balance sheets and were discouraged by the Korean government from making any significant overseas investments,' says Mr Wong.

As an indicator of how pent-up Korean interest can surge, he highlights how Korean investment in overseas real estate leapt from less than US$10 million in 2003 to US$750 million in 2006. It was about US$1.2 billion in 2008 before the global crisis halted all overseas investments again.

While China and Hong Kong are natural favourites for Korean investment, Singapore wins points for the transparency of its market - as well as for its political stability, strong legal system and clear tax structure without capital gains tax.

Korea was already making its presence felt in Singapore's residential market before the crisis set in; in 2007, Koreans accounted for 7 per cent of all foreign buyers and were ranked joint fifth among foreign buyers in Singapore.

Post-crisis, Korean investment is not a one-way street. The sharp depreciation of the Korean won during the crisis attracted an influx of overseas funds, especially from the United States.

Despite the strengthening of the won, the success of these early-bird investors has garnered Korean real estate a steady stream of attention. Woori is currently stitching together about US$2-3 billion worth of deals in Seoul, as well as facilitating the investment of Malaysian conglomerate Berjaya in an integrated resort on Jeju Island.

Mr Wong estimates that a standing asset in Korea can fetch a yield of about 6 per cent per annum, compared to a much lower 4 per cent in Singapore.

Choice picks of Korean real estate include office buildings and retail malls, he adds. 'These depend a lot on the economy of the country, and the Korean economy looks to be good for the next 10 years.'

The Korean government predicted last month that Korea's economy would grow 5.8 per cent this year.

Of course, many investors remain leery of Korea due to the language barrier and the political tension between the North and the South, as well as a widespread perception of the Korean market as being insular and 'closed off'.

'It's a misconception,' says Mr Wong, who feels that the country is making an effort to reach out to the world, especially through its entertainment scene.

'Now is a good time to break the Korean mystique,' he concludes. 'A lot of people say we're going through 'the golden decade of Korea'.'


Korean overseas investment leapt from less than US$10m in 2003 to US$1.2 billion in 2008.

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

ST : A concierge at your service - at home

Jul 5, 2010

A concierge at your service - at home

Such perks being offered by more high-end residential projects

By Esther Teo

CONCIERGE services used to be the preserve of posh hotels but an increasing number of high-end residential developments are including them as perks to attract buyers.

Developers and property experts say there is a growing demand for such personalised services, as increasingly sophisticated homebuyers look to redefine high-end living.

'While good-class serviced apartments provided such services a while ago, it is a relatively new introduction for private condos and an increasing trend as buyers start to get more affluent,' said Knight Frank group managing director Danny Yeo.

While locals might not demand a full range of concierge services, they appreciate having a touch of class that allows a development to differentiate itself, he said.

Mr Steven Tan, executive director of residential at property agency OrangeTee, said buyers had higher expectations of their quality of life and were willing to pay more for the convenience that concierge services offer.

It also enhances the possibility 'of renting out your condo to high-budget expats, especially those who might have just moved here, are still unfamiliar with Singapore and would appreciate a concierge assisting them with information', he said.

Some concierge services in residential projects include catering menus for privately held parties, managing restaurant reservations, dog walking and even preparing a family picnic basket.

The expenses are usually included in a condo's monthly conservancy fee, although external services like spa treatments will cost more.

Overseas Union Enterprise (OUE) chief executive Thio Gim Hock said a full concierge service is not a must-have. However, if it does not bump up monthly maintenance fees too much, it is 'good to have' as residents of any development would appreciate it.

Mr Thio estimates monthly maintenance fees at OUE's high-end Twin Peaks project at Leonie Hill to be $300 for a smaller flat and $500 for the biggest unit.

He describes them as 'very reasonable' when combined with the full range of lifestyle facilities, such as gourmet kitchens and sky gyms.

Twin Peaks, which has yet to be launched, will include a concierge desk serving as a collection and drop-off point for residents and a concierge manager to help with bookings of movie tickets, air tickets or taxis.

City Developments' (CDL) St Regis Residences in Tanglin Road and the upcoming Residences at W in Sentosa Cove - expected to be completed by 2012 - will also offer those extra personal touches. CDL will offer the full suite of services such as housekeeping and laundry at the adjoining hotels that will operate under the same brand name next to each project.

There will also be in-house concierges who arrange for private chefs and butlers.

A CDL spokesman said residents have asked for a St Regis chef and butlers at their residences to prepare a banquet for friends and family, or butlers to prepare a basket for a picnic.

Ms Rena Dharmawan, 24, said the concierge services at St Regis Residences were a nice touch that allowed her to hold her engagement party conveniently at the function room below her apartment block.

'They assisted us in directing our guests and helped out with manual tasks like lifting tables for the buffet... On regular days, they would even help with our luggage or shopping bags all the way up to our apartment,' she added.

Two of Far East Organization's developments - Orchard Scotts in Scotts Road and Vida in Peck Hay Road - field about 60 concierge requests a week, ranging from walking pets, grocery shopping to booking theatre tickets, its spokesman said.

One particularly unusual request: buying a specific serving of hot chocolate with marshmallows from a hotel for a resident with a craving.

esthert@sph.com.sg


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There is a growing demand for such personalised services, as increasingly sophisticated homebuyers look to redefine high-end living.

BT : Rents at suburban malls catching up with Orchard Rd

Business Times - 05 Jul 2010

Rents at suburban malls catching up with Orchard Rd

Upper levels in such malls already drawing higher rents than equivalent space in Orchard and Scotts area, says DTZ

By UMA SHANKARI

(SINGAPORE) Rents at suburban malls in Singapore are fast catching up with those for prime Orchard Road retail space as neighbourhood malls draw increasing shopper numbers and more interest from tenants.

The difference between prime Orchard Road rents and suburban rents narrowed to just 9 per cent in Q2 2010 - from as much as 24 per cent at the start of 2009 and 21 per cent in Q1 2005 - according to CB Richard Ellis (CBRE).

In fact, upper-storey space at these suburban malls is already more expensive than upper-storey space in the Orchard Road and Scotts Road area, according to data from DTZ.

The rental gap tightened as Orchard Road rents fell for the seventh consecutive quarter while suburban rents continued to edge up in the second quarter of 2010, CBRE's data shows.

Prime Orchard Road rents fell to $31.10 per square foot per month (psf pm), reflecting a 3.4 per cent decrease from $32.20 psf pm in Q1 2010.

Suburban malls, on the other hand, saw a 1.4 per cent quarter-on-quarter increase in prime rentals to $28.50 psf pm.

And when it comes to retail space on the upper floors, suburban malls are in fact fetching more than their Orchard Road and Scotts Road counterparts.

According to DTZ, upper-storey rents at suburban malls inched up 0.4 per cent quarter-on-quarter to $22.90 psf pm in Q2 2010, while upper-storey rents in the Orchard Road/Scotts Road area stayed flat at $20.50 psf pm.

Analysts said that rents in the Orchard Road area are depressed after a large amount of new supply - from malls such as Ion Orchard, 313@somerset and Orchard Central - came onstream over the past year.

'Competition in the Orchard Road and Scotts Road and other city areas has intensified and the increased range of retail choices has rendered consumers to be more selective in their purchases,' said Anna Lee, DTZ's associate director for retail.

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

In contrast, rents in the suburban areas continued to edge up in the second quarter of 2010. Suburban malls, with their built-in catchment of shoppers and mass market offerings, largely performed better than malls in the city during the financial crisis.

These malls, which draw more and more shoppers every year, are now able to command higher rents from tenants.

'Generally, 2009 shopper traffic at our suburban malls is higher than that in 2008,' said a spokesman for CapitaMall Trust (CMT). CMT has eight suburban malls in its portfolio.

Frasers Centrepoint Trust (FCT), which owns four suburban malls, also said that footfall across its portfolio rose 6 per cent from the 2008 financial year (October 2007 to September 2008) to the 2009 financial year (October 2008 to September 2009). The figures exclude Anchorpoint, where traffic counters were removed for asset enhancement works.

The increased visitor numbers have translated into higher rents for both retail trusts.

FCT said that in the first six months of its 2010 financial year (October 2009 to March 2010), its portfolio achieved average rental reversions of 4.5 per cent. And for the suburban malls in CMT's portfolio, the rate of average rental growth per year ranged from 1.1 per cent to 2.3 per cent in Q1 2010.

Developers are extremely bullish on the potential of suburban retail space here.

Australian developer Lend Lease, which paid $749 million for a mixed-use land parcel in the Jurong Lake district, intends to build a suburban shopping mall on most of the site.

Lend Lease, which owns the 313@somerset and Parkway Parade shopping malls here, is required to set aside a mandatory 30 per cent of the gross floor area for office use. But the remaining 70 per cent will be used solely for retail space, said Ooi Eng Peng, executive officer for retail and investment management in Asia for Lend Lease.

'The mall will be the Parkway Parade of the west,' Mr Ooi said. Suburban malls offer good prospects for developers who can come up with the right tenant and product mix for the surrounding catchment population, he added.

Looking ahead, the gap between prime Orchard Road rents and prime suburban rents will narrow even more over the rest of this year as Orchard Road rents dip further.

'We expect prime Orchard Road rents to dip 5 per cent to 10 per cent in 2010 due to the settling of business and trading patterns,' said Letty Lee, CBRE's director for retail services. 'But prime suburban rents are likely to see a 3-5 per cent upside in the same period, underpinned by catchment demand.'

But it is not all doom and gloom for malls on Singapore's best-known street; analysts expect that over the next two to three years, rents in the Orchard Road will rebound.

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



More competition: Orchard Road rents affected by new supply which came onstream in the past year

TODAY ONLINE : HDB resale flat prices up 3.8 per cent in Q2 this year

HDB resale flat prices up 3.8 per cent in Q2 this year

05:55 AM Jul 02, 2010

by Joanne Chan



SINGAPORE - Prices of Housing and Development Board resale flats continued to climb in the second quarter in the wake of Singapore's economic recovery.

In the latest flash estimates for the second quarter of this year, HDB resale prices rose 3.8 per cent. While the market is showing signs of slowing down, more time is needed before the full impact of Government measures aimed at raising supply could be felt, said analysts.

After stumbling in the middle of last year due to the recession, prices have since registered continuous growth. HDB resale prices rose for a fifth consecutive quarter and housing agents said the increase was due to rising cash-over-valuations (COVs).

PropNex, which handles about 30 per cent of HDB resale transactions, said the median COV has gone up to $30,000 in the second quarter.

The overall median COV was $25,000 in the first quarter, said the HDB.

Another major player in the resale market, ERA, also said the COV had risen by $5,000 in the second quarter.

Media advertising executive Ellena Tan, 25, recently bought a five-room flat in Punggol and had to fork out $30,000 as COV. She said: "It's a very good deal. There are home owners asking for even more ridiculous amounts, such as $50,000 and $65,000!"

ERA's associate director of Asia-Pacific, Mr Eugene Lim, said the Government's move to raise supply will have some impact on the market, but it would take time.

"New flats do not impact people who have immediate housing needs. For example, the upgraders, or those that are PRs, they can only look at the resale market."

Ngee Ann Polytechnic Real Estate Lecturer, Mr Nicholas Mak, said it can take up to a year before prices start to slow down.

Human relations practitioner Kristin Chan, 26, and her fiance want to buy a resale flat near her parents in Bukit Merah, but cannot afford the prices.

" We are looking at BTO flats now as they are more affordable. The flats may be in less-than-ideal locations ... but at least they're cheaper," she said.

On Wednesday, HDB launched about 2,700 Build-To-Order flats in Punggol and Sengkang.

The BTO supply will be supported by units released under the Design, Build and Sell Scheme.

It also put up three sites for tender under the Government Land Sales Programme for the second half of this year.

Analysts expect HDB resale prices to increase by between eight and 15 per cent this year.

Copyright 2010 MediaCorp Pte Ltd | All Rights Reserved

ST : HDB resale market still going strong

Jul 3, 2010

HDB resale market still going strong

High Q2 sales figures from property firms carrying momentum

By Joyce Teo

THE still-strong but slowing private homes sector is being left behind by the HDB resale market where prices and transaction activity are surging.

Agencies report that the high demand seen early in the year has been sustained with sale numbers staying buoyant - and nudging up prices in the process.

Early HDB estimates for the second quarter showed that resale prices rose 3.8 per cent to yet another record level, following a 2.8 per cent rise in the first.

It marked the eighth straight quarter that prices have broken records since 2008, when they surpassed the peak levels of 1996.

The figures released on Thursday have prompted analysts to revise their full-year estimates for price rises from 5 to 8 per cent to 12 to 15 per cent.

They say the brighter economic outlook is helping to sustain demand.

Dennis Wee Group said its study of HDB data shows that HDB resale transactions were moving briskly in April-May, with about 5,892 resale deals done in the two months. There were 8,484 deals done in the first quarter, according to HDB, which will provide second quarter sales numbers later this month.

PropNex chief executive Mohamed Ismail said his firm expects that the HDB will announce about 9,000 resale flat deals in the second quarter. He believes the momentum will continue: 'We have a 30 per cent market share and have already done 8 per cent more in the second quarter at 2,630 deals.'

ERA Asia-Pacific assistant vice-president Eugene Lim said the April to June period is the most active for HDB resales.

Resale deals done by ERA - which has a market share of around 40 per cent - reached 3,531 in the second quarter. Still, there will not be as many resale deals transacted this year as last year because many more new flats are being launched.

Mr Lim tips sales of 30,000 to 33,000 compared with 37,205 transactions last year - 31 per cent higher than in 2008. This is still a lively pace given that annual resale volumes hovered around 28,500 from 2006 to 2008, he said.

The activity in the HDB resale market is in contrast to the slowdown in the private homes sector, particularly in the prime districts 9, 10 and 11.

Total sales of these prime private homes slowed to 308 units in May, from 723 in April and 688 units in March, said Dennis Wee Group director Chris Koh.

While the high-end market is in a stalemate, there is a pool of buyers for HDB resale flats.

One sign of buying interest is the climbing cash-over-valuation (COV) - cash paid upfront by buyers on top of a flat's valuation.

Mr Lim added: 'Now, buyers and sellers just haggle on the cash portion, without bothering to talk about the valuations.

'It's a chicken and egg situation for many. If they sell to move to a new place, they will ask for high cash in order to pay the other seller.'

Some sellers are raising prices to take advantage of the situation, he said. Mr Lim cited a case where a seller was about to seal a deal with a COV of $28,000 for his $280,000 fourth floor, three-room flat in Clementi.

He rejected it after reading about the 3.8 per cent rise in HDB resale prices in yesterday's papers and is holding out for a better offer, claimed Mr Lim.

joyceteo@sph.com.sg



Early estimates see HDB resale prices rising 3.8 per cent in the second quarter. It marked the eighth straight quarter that prices have broken records since 2008, when they surpassed the peak levels of 1996. -- ST PHOTO: SAMUEL HE

ST : Prices of private homes hit new peak

Jul 2, 2010

Prices of private homes hit new peak

Experts expect more rises this year but at a slower rate

By Joyce Teo

PRIVATE home prices in Singapore are now at their highest level ever, eclipsing even the previous 1996 peak.

Official estimates show prices rose a higher-than-expected 5.2 per cent in the second quarter after a 5.6 per cent jump in the first. That means private home prices have risen 11.1 per cent so far this year.

Prices, now 1.5 per cent above the 1996 high, are expected to continue to edge up this year given the positive economic outlook, property experts forecast.

But the rises should moderate as the market is no longer feverish, having slowed to a more sustainable level with many more sites on the way, they said.

CB Richard Ellis' executive director, residential, Mr Joseph Tan, said the ample supply of residential land to be released by the Government will ensure a more stable supply in the longer term. 'As sales momentum becomes less frenzied, home prices will stabilise,' he said.

The Government has lined up a record amount of land for sale in the second half of the year and yesterday released three sites for sale.

One is an executive condominium site in Jurong West which can yield about 460 units. The other two sites are in Miltonia Close and Bedok Town Centre. Together, they can yield about 1,300 homes.

Other data out yesterday showed that Housing Board resale prices rose 3.8 per cent to a new record high in the same period, giving strong support to 'mass market' private homes - generally the less expensive private homes. This came after HDB this week offered 2,696 build-to-order flats in its largest ever single launch.

In the private mass market, buyers such as HDB upgraders are increasingly reluctant to pay sky-high prices, noted Colliers International's director of research and advisory, Ms Tay Huey Ying.

Preliminary estimates released yesterday by the Urban Redevelopment Authority (URA) showed that mass market non- landed private homes rose at a faster clip of 5.7 per cent to a new high, compared with 4.3 per cent in the first quarter.

These prices are now a hefty 14.2 per cent above the previous 2008 peak.

Mr Tan said this could be attributed to higher price levels set at new launches such as Tree House and The Minton, as well as rising prices of resale deals in areas where several government sites had been sold in the past six to nine months.

In central Singapore, non-landed home prices moved up 5.1 per cent, from 4.4 per cent in the first quarter. It was only in city fringe areas that prices of non-landed homes rose at a slower 4.5 per cent, compared with a furious 7.9 per cent first-quarter jump.

'Individual sellers on the resale front, especially those who had bought their properties before the 2007 boom, are now making capital gains in the region of 80-90 per cent,' noted ERA Asia Pacific associate director Eugene Lim.

Since late May, there has been a sales slowdown owing to the euro zone crisis, a lacklustre stock market and high asking prices, but home prices have generally remained firm. Sales of new, private homes halved to 1,078 units in May, from April.

Mr Lim said developers are unlikely to cut prices for new launches to sell more units as most have strong balance sheets.

Still, the slower sales will affect sentiment, said Cushman and Wakefield managing director Donald Han. The pace of price rises will slow down with the resale market first to be hit. The full effects will be felt from this quarter, he said.

For the whole year, property experts are mostly looking at price increases of about 15 per cent. Estimates range from 12 per cent to as much as 20 per cent.

'After the football World Cup season, people will look at whether the West is coping well and Singapore's economic growth and policies. Economists revising higher their growth estimates means that prices are likely to rise,' said Knight Frank chairman Tan Tiong Cheng.

'On the other hand, ample supply has translated to developers being more selective in bidding for sites. Land costs would come off and that would mitigate price rises six months down the road.'

Looking further ahead, Ngee Ann Polytechnic real estate lecturer Nicholas Mak said the risk of a price correction could grow if uncertainties in global financial markets hurt market sentiment, and if the large impending supply of government land leads to a private home glut.

URA will update its second quarter price data in four weeks.

joyceteo@sph.com.sg

ST : HDB resale prices rising faster

Jul 2, 2010

HDB resale prices rising faster

Preliminary figures show a 3.8 per cent Q2 rise; analysts revising full-year estimates

By Jessica Cheam

THE rise in Housing Board resale flat prices is accelerating again - after taking a slight breather early this year.

Preliminary estimates released by the HDB yesterday show resale HDB flat prices rose 3.8 per cent to a fresh record in the second quarter compared to the first quarter.

This is the eighth straight quarter that resale flat prices have broken records since 2008 when they surpassed the levels of the 1996 property peak.

Property analysts are now dramatically revising their full-year estimates for resale flat price rises - from 5 to 8 per cent previously, to 12 to 15 per cent.

Earlier this year, analysts had expected resale flat price increases to moderate when HDB figures showed prices rising 2.8 per cent in the first quarter over the previous quarter.

This rate of increase was slower than the 3.9 per cent in the fourth quarter of last year, and led industry observers to predict a moderation in price growth.

But the economic environment has changed. ERA Asia-Pacific associate director Eugene Lim said the outlook for the local economy 'is strong and the jobs market has picked up significantly'.

This has sustained the high level of demand for resale flats, and as supply is still tight for resale flats, prices have continued to grow, said Mr Lim.

Even though HDB has aggressively ramped up the supply of new flats - it launched 2,696 flats on Wednesday, the largest ever single launch - these cater to first-time buyers and those who are able to wait three years for the flats to be built, he said.

'For upgraders, permanent residents and those with immediate housing needs, the resale market is the only source.'

Associate Professor Sing Tien Foo of the National University of Singapore's real estate department says rising prices will hit new home-buyers hardest. 'For existing HDB homeowners, however, there is a 'wealth' effect, which may induce them to upgrade to bigger or private flats,' he said.

Analysts said yesterday the price increase was also likely due to higher cash-over-valuation (COV) premiums. COV refers to the cash paid upfront by buyers above the valuation of a flat.

While HDB will release full figures - including COV numbers - only in a few weeks, two top property agencies ERA and PropNex said the median COV for second quarter sales shot up to $30,000.

This is up from the median COV of $25,000 seen in the first quarter, according to HDB's figures.

HDB said yesterday it would continue to release adequate supply to meet housing demand. It has so far offered 8,828 new flats in the first half of the year - equivalent to the supply for all of last year.

But Prof Sing noted that the new supply would take even longer to enter the resale market, due to the five-year minimum occupation requirement before an owner can sell.

He added, however, that the 3.8 per cent rise in resale prices is still relatively small compared to private property prices, which shot up 5.2 per cent this quarter, and 5.6 per cent in the first quarter.

'In the public market, where supply is regulated, prices will respond more slowly than the private markets. The price increases in HDB resale will lag private market price increases.'

jcheam@sph.com.sg

ST : Big demand for Punggol flats

Jul 2, 2010

Big demand for Punggol flats

A couple checking out artists' impressions of new build-to-order (BTO) flats at HDB Hub in Toa Payoh yesterday. The Housing Board received a deluge of applications just one day after the launch of BTO project Waterway Terraces in Punggol, which will feature waterfront units.

As of yesterday, five-room flats had been almost six times oversubscribed, with 1,755 applications received for the 306 flats available. Demand was also high for four-roomers, with 2,461 applications received - more than four times the 588 available units.

ST : Admiral Hill developer dropped

Jul 2, 2010

Admiral Hill developer dropped

SLA to look for new developer, gives Yess' sub-tenants until early next year to move out

By Jessica Lim

ADMIRAL Hill was to have been the Dempsey Hill of northern Singapore, a lifestyle hub with a country club, rock-climbing facilities, a golf driving range and beauty and health businesses, among other attractions.

But the future of the project is in doubt: The landlord of the site, the Singapore Land Authority (SLA), has terminated the contract of developer Yess Resorts & Country Club (Yess) for failing to pay the rent.

The SLA will shop for a new developer, and Yess' sub-tenants have until early next year to clear out.

The jury is out, however, on whether there will be new takers for this 4ha site in far-flung Sembawang. Admiral Hill was to have come up around Old Admiralty House, which was built in 1939 to accommodate Royal Navy officers and declared a national monument in 2002.

The project was dogged by problems from the get-go.

Yess clinched the SLA tender to develop the place in 2007 by offering to pay $40,000 a month in rent and on the strength of its proposed plans.

But instead of a 'lifestyle hub', an illegal school and a workers' dormitory came up. Both were ordered shut last year.

When The Straits Times visited the site this week, it was in a state of neglect. Units sat empty and weeds had overrun the place.

Sub-tenants there now were apparently given the impression that Yess was forging ahead with the lifestyle hub.

Mr Al Lim, 39, who owns Chinese restaurant House Kitchen, said Yess claimed it had the SLA's clearance to take on more sub-tenants, so he signed a two-year lease in March and poured more than $100,000 into renovations.

He was thus shocked when the SLA told him two months later that he had to move out this month. He appealed and was given a reprieve until early next year.

He said that when he met Yess last month, it claimed to have been in the dark about the SLA's plans to terminate its contract.

Mr Alan Poh, who opened steamboat restaurant Fat Fish there a year ago on a two-year lease, has a similar tale - and some regrets to go with it, since his business is just starting to take off following an advertising campaign, he said.

A third sub-tenant, Sembawang Family Enrichment Network, signed up for a three-year lease in April last year and put $200,000 into renovations. Its manager Daniel Sum, 56, is now looking for another site. 'It has happened and there's nothing we can do about it,' he said.

The Straits Times understands Yess signed agreements with these new sub-tenants without first asking the SLA for consent, which is illegal.

They are only the latest ones to feel short-changed. Two former sub-tenants who signed contracts with Yess in 2007 have sought legal advice.

Yess refused to comment yesterday.

The Accounting & Corporate Regulatory Authority (Acra) lists it as a 'live company' and names a Mr Lee Kiang Hong as its director. The company is fully owned by the Yess Group.

An SLA spokesman said the Government was not party to sub-tenancy agreements between Yess and its sub-tenants, and that the parties would have to sort out the disputes among themselves.

She urged prospective sub-tenants of state properties to run checks on the tenant. They should also ask the tenant to produce the SLA's written consent for sub-tenancy agreements and seek legal advice before signing a contract.

The spokesman said this is to avoid the scenario in which sub-tenants commit themselves, only to find that their intended business activity is not an approved one for the property, or that the tenure falls outside that of the main tenancy.

With Yess out, the future of Admiral Hill looks none too certain, going by the assessment of Country City Investment, which successfully developed Dempsey Hill in Tanglin Village.

Admiral Hill's problem is its lack of drawing power, said Country City's general manager Nicholas Ng.

Still, how successful it can be will depend on the uses for the plot and the rental, he said; its rundown state, short tenancy agreement and its inaccessibility are factors against it. He said: 'It's not impossible, but it would take a lot of work and capital to make it successful.'

City Country, which lost the 2007 bid to Yess, has no plans to put in a bid again, he added.

limjess@sph.com.sg

BT : Three land plots put up for sale

Business Times - 02 Jul 2010

Three land plots put up for sale

99-year-lease sites located at Bedok, Yishun, Jurong West

By EMILYN YAP

(SINGAPORE) The government yesterday rolled out for sale three plots of land across the island, potentially adding some 1,300 units to the residential supply pipeline.

The blitz of sites followed the release of new data showing public and private home prices continuing their ascent in the second quarter.

The three sites at Bedok, Yishun and Jurong West are from the confirmed list under the government land sales (GLS) programme in the second half of the year. The Housing & Development Board (HDB) is handling the tenders.

Of these sites, the 99-year-lease one at New Upper Changi Road/Bedok North Drive attracted the most attention because it can house a commercial-residential development which will be integrated with a bus interchange.

The 2.49 hectare site is at Bedok Town Centre, next to Bedok MRT Station, and is surrounded by amenities such as supermarkets and a library. It has a maximum permissible gross floor area (GFA) of 938,157 square feet and can yield an estimated 475 dwelling units.

DTZ South-east Asia research head Chua Chor Hoon believes this plot is the most attractive of the three because it is centrally located in a well populated town. Also, 'there are only a few mixed sites available at the heart of HDB estates in the GLS programme', she said.

Cushman & Wakefield managing director Donald Han added that Bedok still lacks a major retail centre, so there could be fairly fierce bidding for the site, in the range of $500-580 per sq ft per plot ratio (psf ppr).

Colliers International investment sales executive director Ho Eng Joo expects to see bids coming in at $500-550 psf ppr. The tender for the site will close on Aug 17.

Another 99-year-lease land parcel at Miltonia Close can be developed into a strata housing community, or a condominium project with 345 units and a maximum permissible GFA of 406,875 sq ft. It lies at the fringe of Yishun Town Centre and is next to The Shaughnessy terrace house project.

While the plot may not be near an MRT station, its views of Lower Seletar Reservoir and Orchid Country Club's golf course may be a selling point, Mr Ho said. He projects bids of $300-350 psf ppr, while Mr Han is anticipating $270-320 psf ppr. The tender for this land parcel closes on Aug 24.

There was little hype over the third site at Jurong West Street 42, which is for an executive condominium project and is some distance from Lakeside MRT Station. It has a 99-year lease and can yield an estimated 460 units with a maximum permissible GFA of 542,988 sq ft.

Mr Ho and Mr Han expect to see bids of $230-280 and $250-300 psf ppr respectively. The tender for this site closes on Aug 12.

With more land parcels to be released, Mr Ho believes developers will be less aggressive in their bids. This month, the Urban Redevelopment Authority (URA) will be launching another two sites from the confirmed list, and making one from the reserve list available for application.

Mr Han added that the Miltonia Close and Jurong West sites just released by HDB are right next to other plots which can be launched for sale in future. The presence of such potential competition may make developers more price-sensitive when submitting their bids, he said.

The government has been ramping up land supply in the last few months to temper sentiment in the property market. Flash estimates yesterday showed private home prices rising 5.2 per cent in Q2 from Q1, and HDB resale flat prices increasing 3.8 per cent.

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

BT : Private home prices outstrip peak of '96

Business Times - 02 Jul 2010

Private home prices outstrip peak of '96

But govt cooling measures expected to mitigate hikes; resale HDB prices continue to climb

By UMA SHANKARI

(SINGAPORE) Private home prices in Singapore have now surpassed the former all-time peak they achieved in 1996, official data shows.

Flash estimates released yesterday said that private home prices in Singapore rose 5.2 per cent in Q2 2010 after climbing 5.6 per cent in the first three months of the year.

This brings the Urban Redevelopment Authority's (URA) price index for private residential property to 184.1 points - 1.5 per cent higher than the previous pre-Asian crisis peak of 181.4 points in Q2 1996.

Prices of resale HDB flats also continued to climb and set another record in the second quarter. Resale prices rose a steeper 3.8 per cent in Q2, higher than the 2.8 per cent climb seen in Q1.

For the private residential market, homes in the 'outside central region' (a proxy for suburban mass- market locations) led the price increase with a 5.7 per cent quarter-on-quarter climb in Q2.

Prices in the 'core central region' (which includes the prime Districts 9 and 10, the financial district and Sentosa Cove) rose 5.1 per cent while prices in the 'rest of central region' rose 4.5 per cent.

Home prices in the outside central region and rest of central region are higher than they were during the recent 2008 peaks. But prices in the high-end core central region are still about 2 per cent below the 2008 peak.

While prices climbed across all three regions, analysts pointed out that recent government measures to cool the market have worked to some extent as the price growth has now slowed down for three consecutive quarters - although the deceleration in growth has been slower than what was hoped for, particularly in the mass- market segment.

'There will be a time lag before we will see a more moderate increase in prices,' said Knight Frank chairman Tan Tiong Cheng. 'The market has been positive but the government has mitigated this by providing a lot of land. But the supply needs some time to come onto the market.'

There is also increasing price resistance, as demonstrated by the more than 50 per cent drop in sales of new homes in May. This should help to further moderate price increases - especially in the mass-market segment - to within 5 per cent for each of the next two quarters, said Tay Huey Ying, Colliers International's director of research and advisory.

Jones Lang LaSalle's head of research for South-east Asia, Chua Yang Liang, added: 'Overall, the falling sales volume in both primary and secondary markets suggests that the overall URA property price index, a lagging indicator of demand, may soften in the next few months.'

Developers sold just 1,078 private homes in May - about half the 2,208 units they transacted in April.

Analysts also said that further anti-speculation measures are unlikely as prices in the primary market, which are thought to be a better reflection of current market sentiment, are pointing towards a slowdown. Most analysts expect private home prices to rise a total of 12-15 per cent for the whole of 2010.

But for the HDB resale market, it is a very different story. The rate of price growth seems to be increasing.

Eugene Lim, associate director of ERA Asia-Pacific, pointed out that on average, HDB resale prices are increasing at a rate of 3.3 per cent per quarter this year, compared to just 2 per cent per quarter last year.

The 3.8 per cent increase in prices in Q2 to another new high can be attributed to higher cash- over-valuation (COV) amounts, industry players said.

'Our Q2 2010 transactions show a median COV of $30,000 for all flat types across all estates, while HDB's Q1 2010 results showed an overall median COV of $25,000,' said PropNex chief executive Mohamed Ismail.

ERA's transactions also show that the median COV has increased across all flat types. For three-room flats, the median COV is now $29,000 compared to $22,000 in Q1; four-room flats $32,000 ($25,000 in Q1); five-room flats $36,000 ($28,000); and executive flats $40,000 ($30,000).

HDB on Wednesday said it has launched 2,696 new build-to-order (BTO) flats to ensure that there is an adequate supply of new flats to meet housing demand - the largest number of such flats ever offered at one go.

But this might not satisfy demand from all corners.

'Though HDB has increased the supply of new flats, these cater predominantly to the first-timers and those who can wait three years for these new flats to be built,' said ERA's Mr Lim.

'For upgraders, permanent residents and those who have immediate housing needs, the resale market is the only source.'

He expects HDB resale prices to increase 12-15 per cent for the whole year.

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