SINGAPORE - The Monetary Authority of Singapore's (MAS) proposed new regulations to tighten mortgage equity withdrawal loans (MWL) should have little impact on the property market if they are eventually introduced.

Market players, who include mortgage loans brokers, said this is because most buyers who aim to cash out on the value of their homes are not the average home owners or property investors.

Instead, they - usually high-net-worth individuals -account for a small portion of all property buyers. They are also said to be financially savvy and typically use the extra liquidity to re-invest in other instruments, market experts said.

Loans brokers MediaCorp spoke to said financial institutions are also unlikely to dispense MWL for a second or subsequent property, in an effort to discourage speculating on the property market.

While the Government has further reduced loan-to-value (LTV) ratios for mortgage loans to cool the property market, the MAS proposed that the LTV ratios of mortgage equity withdrawal loans be reduced as well.

MAS' consultation paper, which was put out on Jan 13, proposes that MWL be reduced to an LTV of 80 percent for individuals with no outstanding mortgages and 60 per cent for individuals with more than one outstanding mortgage.

For non-individuals like corporations, they are subject to 50 per cent LTV if they have more than one outstanding mortgage.

The consultation paper is currently open for feedback until Feb 14.

MWL allows homeowners to take out loans using their property as collateral. The amount of MWL taken out depends on the current valuation of the property.

For example, a property owner has a house worth $1 million and he has an outstanding loan of $200,000. This means the maximum amount he can receive from an MWL is $400,000.

This adds up to $600,000 in total loans, which translates to 60 percent of the $1 million valuation.

And in a property upswing, homeowners can cash out more from a higher property valuation. But such practices are not widespread and hence should not have a serious impact on the property market.

"What will really dampen sentiment are the new cooling measures on conventional housing loans, which are used largely by home buyers, instead of mortgage equity financing loans," said Mr Dennis Ng, founder of www.HousingLoanSG.com.

"MAS wants to ensure that all measures are in line for both types of loans to curb speculation," he said.

Such loans have been around before the property measures kicked in, said Mr Ku Swee Yong, chief executive of International Property Advisor.

"Financial institutions may tend to benefit from such loans because it is backed by an asset, hence it is lower risk. The home buyer who has paid off the property entirely has also demonstrated to the bank that he is unlikely to default on his payments." he added.

But loan brokerage firms may see less business if this proposed scheme is introduced, said market players.

"With interest rates looking flat and with the current curbs, business will be still for some time," said Mr Bryan Ong, founder of property loans brokerage BC Group.

by Jo-Ann Huang Limin
05:55 AM Jan 31, 2011

Source: www.yodayonline.com

Booklet of Mah Bow Tan's thoughts on housing

By UMA SHANKARI

THE Ministry of National Development (MND) is publishing a booklet containing the musings of its minister, Mah Bow Tan, in a bid to reach out to more Singaporeans and explain housing policies.

In response to a query from BT, Mr Mah said that the booklet will contain nine commentaries that encapsulate his thoughts on Singapore's public housing programme over the past five decades.

This should give readers an insight into the thinking behind the policies that shape the system Singapore has today.

Said Mr Mah: 'Today, eight in 10 Singaporeans stay in HDB flats, and nine in 10 of them own the flats they live in. This is the highest home-ownership rate in the world. No other country comes close.

'But, public housing is not just about putting roofs over people's heads. It is also about building inclusive homes and communities.

'This has not been an easy effort. There is a finite budget to work with, and policy trade-offs to be made.

'With this booklet, I hope to reach out to more Singaporeans, to tell them about our ongoing housing story, and to enhance their understanding of the policy considerations behind this success story,' he added.

The booklet will be released in either February or March this year.

MND plans to distribute the booklets to relevant entities such as HDB branch offices, town councils, public libraries, and academic institutions.

In addition, the booklet could be sold in selected bookstores.

It might also be available in a Mandarin version, sources said.

Source: www.businesstimes.com.sg

by Tan Kok Keong
05:55 AM Jan 28, 2011

The Government's move to introduce a new set of property market cooling measures two weeks ago was widely anticipated but the harshness of the measures surprised many.

The initial reaction from buyers was mixed. On the weekend immediately after the Jan 14 measures, buyers at Spottiswoode 18 snapped up 170 out of the 251 units launched, surprising many observers. The nonchalant reaction could be because the cooling measures were already a known market risk. These buyers had already overcome their reservations during the pre-launch marketing period and were primed and ready to buy.

This was somewhat similar to the good response to the launch of NV Residences after the earlier round of cooling measures on Aug 30 last year.

In contrast, over the same weekend after the Jan 14 measures, sales cooled in Austville Residences - an executive condominium project - despite earlier reports of potential buyers queueing overnight.

Beyond these anecdotal examples, we collaborated with the research team at leading real estate portal PropertyGuru.com to get a clearer picture of pre-transaction activities.

The number of visitor sessions to the website fell 10.7 per cent in the week after the measures compared with the week before. Comparatively, visitor sessions only fell by 3.5 per cent following the Aug 30, 2010 measures. Visitors searching for resale HDB flats saw the sharpest decline (Chart 1A and 1B). In addition, the number of new listings fell by 6 per cent, while the number of listings rose 2 per cent following the Aug 30 measures.

While there are many other factors that affect the visitor numbers, the comparison gives us a clearer picture of market activity following the measures.

The statistics above reinforce the consensus view that overall marketing activity has fallen. If this persists, transaction volumes will decline. Based on historical analysis, a drop in total sales volume over four quarters tends to lead to a fall in the overall Urban Redevelopment Authority's private residential price index thereafter. This happened at two most recent turning points for prices - in Q2 '00 and Q2 '08. The question remains as to whether the current market cooling measures would lead to a persistent fall in volume and thus prices.

To answer this, an analysis of events after the May 1996 market cooling measures could be a good gauge, as that was the last time when a similarly harsh set of measures was introduced.

Within a year from May 1996, overall private home prices fell 8.9 per cent. While there can be no doubt that market cooling measures played an important role, a closer look suggests that other factors could have contributed to the plunge in prices.

Firstly, the rental market weakened over the same period. Overall occupancy rate fell from 93.8 per cent in Q2 '96 to 91.7 per cent in Q2 '97 due to an increase in the number of units completed. As a result, rents also fell by 9.9 per cent over the same period. In addition, interbank three-month Sibor rose slightly to 5.94 per cent from 5.75 per cent over that period. Buying property for investment became less appealing.

Secondly, the stock market also began to decline over the same period. The benchmark Straits Times Index fell 13.4 per cent within a year from June 1996. To add to the woes, the Asian Financial Crisis started in mid-1997. The loss in wealth in the stock market probably motivated investors to sell assets, which could be another important factor that precipitated the continued fall in property prices.

The above analysis shows that for the current set of market cooling measures to cause another prolonged period of price decline, other conditions need to fall in place. This could come in the form of a decline in the stock market or the business environment, higher unemployment and a deterioration of property market basics. The lack of "wealth destructive" factors was the key reason for the ineffectiveness of the last two rounds of market cooling measures, in my opinion.

Going into the new year, the wealth creation effect appears to be largely on track. According to various equity strategists, the Singapore stock market is expected to perform well this year, on the basis that forward price-to-earnings ratios are still undemanding compared with previous peaks. Business prospects look more promising and employers are planning to expand hiring and increase wages and bonuses.

For the property market, the occupancy rate looks like it could remain above historical average of 92 per cent as completions in 2011 are expected to reach only 6,722 units - below the historical average, according to Urban Redevelopment Authority numbers.

Meanwhile, the prospect for a sharp increase in interest rate appears to be muted. Taken together, this suggests that the slowdown in transaction activity and price growth might again turn out to be temporary. Ironically, if that is the case, we should expect more market cooling measures, which will remain as a market risk in 2011. But by themselves, the measures may not be enough to turn sentiment.

In conclusion, while I expect the market to face immediate downward pressure on volume and prices, the year-on-year price fall in 2011 could be marginal. In the meantime, people interested in properties should keep watch for any of the "wealth destruction" catalysts, which in some instances can fall into place very fast.

Buyers should also note the potential for a weaker rental market from next year due to the large number of housing units to be completed from then onwards. Buyers who are stretching their last dollar to buy their dream home might want to dream less and work their numbers based on more prudent assumptions and exit strategies.



Tan Kok Keong is Head of Research and Consultancy at Orange Tee.


Source: www.todayonline.com

In defence of valuers

by Colin Tan
05:55 AM Jan 28, 2011

Whenever a crime is committed, the top on the list of suspects for any investigator has to be the party that stands to gain the most. So why is it that valuers are the first to be targeted for most of the blame whenever property owners, buyers and sellers do not get their way.

As most valuation professionals will readily attest, their fees for housing appraisals cost only a fraction of what a socialite would spend on her Birkin bags or Manolo Blahnik shoes.

I am moved to write on this topic as there has been a lot of feedback about valuations recently from readers and the glaring discrepancies they have noted. Ironically, the worst complaints are from those who hold themselves out as property professionals because they do the most damage to the reputation of valuers.

Are they so naive to believe that an appraiser's issuance or withdrawal of endorsement can make or break a deal?

If that is truly the case, valuers would be the among the best paid in the industry. Is that the case? Far from it.

Lenders will issue loans if they feel there is an almost 100 per cent chance of getting their money back with interest or when they feel the intense heat of competition. Valuations are just a polite excuse of refusing loans to their customers, particularly those with whom they have a long-standing relationship.

If you are putting pressure on valuers - to find fault or get them to disclose their valuation methods, let me say that you are barking up the wrong tree.

If many people today think of themselves as property experts, I am sure an equal number also consider themselves valuation gurus.

Like everyone else, valuers also need to put food on their table. They are also susceptible to strong pressures. Some will succumb, which brings me to my next point.

The Monetary Authority of Singapore (MAS) last week announced that all local banks and significant insurers must have a dedicated risk management committee at the board level in place following their annual general meetings this year.

This is timely news and can only be good for Singapore. The pressures of competition in an open market mean that the effectiveness of lenders to police themselves - particularly at the middle and lower levels - will wane with the heightened level of competition and we all know our banks are flush with liquidity. The sub-prime crisis in the United States is an excellent example of where the finance industry has failed miserably to police itself. We will have learnt nothing if we believe that such an event will never recur in the US or elsewhere.

In Singapore, some banks are already charging at cost for the first year of a housing loan, that is they earn nothing for 12 months. Soon, it will be negative if they start giving out furniture vouchers or discounted renovation loans.

Today, Singapore is a top financial centre and we may boast that all our banks apply the "best practice" in all their dealings. Sadly, this does not seem to be the case in the way some banks in Singapore hand out property loans.

In some cases, sales staff are responsible for handing out valuation jobs. They will scour the market to get the highest valuation. Which valuer do you think will get the job? Why do you think there is such a huge gap in the indicative valuations?

By the way, let us not call them indicative valuations. They are merely an indication of market value. They are not valuations at all. Period. As pointed out by the Singapore Institute of Surveyors and Valuers, these desktop jobs are not a subscribed practice.

Other lenders may have stronger internal credit assessment teams but, due to the shortage of manpower, they become little more than rubber stamps. To be fair, some teams are doing their best within their means but when other banks are getting away with it, the team also does not want to be the major obstacle to greater profits for their own banks.

Many years ago, when the HDB allowed private banks to finance public housing flats, valuations shot up overnight so much so that it had to take the task of handing out valuations away from the banks. Today, the HDB is the only body that hands out valuation jobs to its panel of valuers. That is true independence for you.

Maybe the lenders and the MAS, with the advice of SISV, can come up with a similar system for all private property valuations, and not just for residential properties.



Colin Tan is the head of Research & Consultancy at Chesterton Suntec International.

Source; www.todayonline.com

Published January 26, 2011

DBSS site at Clementi launched for sale

By UMA SHANKARI

THE Housing and Development Board (HDB) has launched a site at Clementi Avenue 4 for sale under its design, build and sell scheme (DBSS).

An estimated 770 flats can be built on the plot, which has a site area of 235,800 square feet and a maximum allowable gross floor area of 825,300 sq ft. The site carries a lease term of 103 years (including a four-year construction period).

Analysts expect a top bid in the range of $200-$250 per square foot per plot ratio (psf ppr) for the plot. This translates to an overall land cost of $165 million to $206 million.

'This is one of the more attractive sites offered under the DBSS scheme,' said Nicholas Mak, head of research at SLP International. 'It is close to Clementi MRT station. Clementi New Town is also becoming more vibrant, with new projects such as The Clementi Mall.'

While buying sentiment has significantly moderated in both the public and private housing sectors, participation from developers for this site is likely to be motivated by the project's physical strengths and opportunities, said Ong Kah Seng, Cushman & Wakefield senior manager of Asia-Pacific research.

'This site is likely to see moderate interest from developers, who are still interested in providing homes for this specific segment although generally, home-buying sentiments are expected to remain cautious in the months ahead,' Mr Ong said.

The last site offered for sale under the DBSS scheme, at Yuan Ching Road in Jurong, drew a top bid of $192 psf ppr. Six bids were submitted for the site.

The tender for this site will close at noon on March 8, 2011.

Last year, HDB sold five land parcels for DBSS development in Yishun, Bedok, Tampines, Hougang and Jurong West. These five land parcels will yield about 3,000 DBSS flats, and this pipeline supply will come on-stream progressively in 2011.

Another DBSS site at Pasir Ris Central, with an estimated yield of 460 units, will be launched for tender in March. More sites for DBSS development will be made available if there is sustained demand, HDB added.

Flats sold under DBSS are offered to buyers under HDB's eligibility conditions. But the developers who buy such sites have some flexibility in designing, pricing and selling the flats.


Source: www.businesstimes.com.sg

Published January 26, 2011

HDB launches 3 BTO projects with 1,728 flats
Bt Batok project will have 180; projects in Yishun will have total of 1,548 units

By UMA SHANKARI

THE Housing & Development Board (HDB) yesterday launched for sale three more build-to-order (BTO) projects - one at Bukit Batok and two at Yishun - with a total of 1,728 standard flats.

The Bukit Batok project, Golden Daisy, will comprise solely of 180 studio apartments which will sell for between $83,000 and $118,000 each.

The two projects in Yishun - Orchid Spring @ Yishun and Vista Spring @ Yishun - offer a mix of two-room, three-room, four-room and five-room flats. Orchid Spring @ Yishun, located along Yishun Avenue 11, will have 948 units while the adjacent Vista Spring @ Yishun offers 600 flats.

Prices at the two projects range from $93,000 to $112,000 for a two-room flat; $150,000 to $183,000 for a three-room flat; $230,000 to $278,000 for a four-room flat; and $292,000 to $353,000 for a five-room flat.

Analysts said the attractive pricing of the Yishun flats would be a draw and expect that over-subscription rates for the projects could be as high as five times. The two projects are located in the same vicinity as a sold-out private condominium project, The Estuary.

'Pricing is attractive when compared to resale flats in the same locality that are about 22-24 years old. The new three-room flats are 30-40 per cent cheaper, while the four-room and five-room flats are 7-12 per cent and 16-21 per cent cheaper respectively,' said ERA's key executive officer Eugene Lim.

The flats at Yishun are clearly targeted at young couples and families, analysts said. Besides playgrounds, fitness stations and a jogging track, Orchid Spring even boasts a child care centre within the development itself.

By contrast, the 180 units at Golden Daisy are meant for senior citizens, observed PropNex corporate communications manager Adam Tan. But the apartments are not likely to be keenly contested for as studio apartments are never in very high demand, Mr Tan added.

HDB has ramped up its new flat supply significantly to meet the demand from first-timer households.

This year, the agency will offer up to 22,000 new flats under its BTO scheme if demand is sustained. This is 24 per cent more than the 17,700 flats offered for sale under the BTO scheme and sale of balance flats exercise in 2010.

In the first six months of 2011, about 11,000 new BTO flats will be offered. The upcoming projects will have a good geographical spread in towns such as Bukit Panjang, Jurong West, Punggol, Sengkang and Yishun, HDB said.


Source: www.businesstimes.com.sg

Published January 26, 2011

CDL moves in on Tanglin Shopping Centre
Marine Point being sold en bloc for about $1,000 psf ppr

(SINGAPORE) The tender for Tanglin Shopping Centre's collective sale closed yesterday and is understood to have drawn at least one submission - from City Developments Limited (CDL).

The reserve price for the en bloc sale is said to be $1.25 billion, working out to a whopping unit land price of about $4,000 per square foot of potential gross floor area, assuming the freehold site is redeveloped. Market watchers find it hard to believe that CDL would be prepared to pay such a price, suggesting some conditions could have been attached to its bid.

CDL's London-listed hotel unit Millennium & Copthorne Hotels, through its wholly-owned unit King's Tanglin Shopping Pte Ltd, owns 85 strata retail and office units as well as all 325 carpark lots in the development, reflecting more than 30 per cent interest in Tanglin Shopping Centre's total strata area, based on earlier reports. The carpark lots are in the basement as well as in a rear multi-storey building.

M&C revealed in June last year that it had signed the Collective Sale Agreement for the sale of its strata-titled interest in the complex.

When contacted yesterday evening, Jean Goh, senior marketing director of ERA Realty Network, the marketing agent for Tanglin Shopping Centre's collective sale, said: 'We cannot comment at this point in time as we are still in the midst of negotiation.'

Based on Tanglin Shopping Centre's existing strata area of about 380,000 sq ft (comprising shops, offices, medical suites and carparking space), the $1.25 billion reserve price works out to about $3,300 per square foot.

Tanglin Shopping Centre has a freehold land area of about 68,512 sq ft. It is zoned for commercial use with a 4.2+ plot ratio under Master Plan 2008. ERA has previously said the property has potential for a mixed development comprising residential and retail units or commercial office cum retail and/or a hotel annex.

Assuming the authorities allow a new commercial development on the site built up to the existing gross floor area (GFA) of 313,437 sq ft with no development charge (DC) payable, the $1.25 billion reserve price would work out to $3,988 per square foot per plot ratio (psf ppr).

However, a DC may be payable for a mixed development scheme that includes a residential component, sources suggest.

The building's existing GFA slightly exceeds the maximum 287,750 sq ft allowed for the site under Master Plan 2008.

Tanglin Shopping Centre currently consists of 363 units of retail, office and medical units, plus the 325 carpark lots in the basement and eight-level multistorey carpark.

Market watchers say that the interest by CDL, which is part of Singapore's Hong Leong Group, in the property is expected, given the group's stronghold in the area. Besides its stake in Tanglin Shopping Centre, the group also has stakes in St Regis Singapore next door, Orchard Hotel and Palais Renaissance.

Separately, BT has learned that a collective sale deal for Marine Point at Marine Parade Road could take place soon. The price of the 51,185 sq ft freehold site is said to be about $95 million, or slightly below $1,000 psf ppr inclusive of DC. Selangor Dredging has been tipped as the potential buyer. Marine Point has a 2.1 plot ratio, which means it can be built into a new project with up to 107,489 sq ft GFA

Source: www.businesstimes.com.sg

Published January 25, 2011

North Bridge Commercial Complex up for sale
Expected price tag is $110-$115m, says DTZ


By FELDA CHAY


(SINGAPORE) North Bridge Commercial Complex is up for grabs, with an expected price tag of $110-$115 million, said DTZ, the marketing agent for the sale.

Located along North Bridge Road, the freehold property sits on a land area of 1,079.1 sq m (11,615 sq ft). The site is zoned for commercial use, has a plot ratio of 4.2 and total gross floor area of 4,532.2 sq m (48,784 sq ft).

Based on the sale price expectations, this translates into a per square foot per plot ratio cost of $2,255-$2,357.

According to DTZ, the plot has a buildable height of up to six storeys. The development currently sitting on the site is a six-storey commercial block with an existing gross floor area of 6,188.67 sq m (66,614 sq ft).

DTZ's senior director for investment advisory services and auction Shaun Poh said of the site: 'There has been no similar property offering in the vicinity recently and we expect the property to attract keen interest from investors and developers.'

He added that the plot's central location, coupled with its proximity to the Bugis and City Hall MRT stations and its prominent frontage, means the property has the potential to be revamped into a boutique office. It can also be turned into a retail development, with the opportunity for individual unit sales, said Mr Poh.

'Shop units at The Bencoolen have recently changed hands at $3,500 to $5,300 psf (per square foot) and at Sim Lim Square up to $9,000 psf,' he noted, adding that other possible development options for the site include a hotel, subject to planning approval.

The site is also close to shopping malls such as Bugis Junction and Raffles City, and hotels like the Inter-Continental Hotel and Raffles Hotel.

For now, entities that own more than 90 per cent of the total strata area and share values of the complex have given their consent to the collective sale. They include private commercial school operator ERC Holdings, which bought 90 per cent of the complex for $46 million in 2009.

The sale is being conducted through a tender exercise, which will close on March 3 at 3pm.


Source: www.businesstimes.com.sg

Published January 25, 2011

JTC launches tender for Ubi site


(SINGAPORE) JTC yesterday launched a 60-year leasehold industrial site at Ubi Road 1/Ubi Avenue 4 for sale by public tender.


According to its announcement last month, a developer has committed to a bid price of not less than $29.38 million, or $88 per square foot per plot ratio (psf ppr) for the site.

The 1.24 hectare site on the reserve list under the Government Land Sales Programme has a maximum permissible gross plot ratio of 2.5. It is zoned for Business 1 development, which means light and clean industry and warehouse uses are allowed.

According to Colliers International industrial director Tan Boon Leong, the site is 'an attractive plot', due to its size and proximity to MRT stations. 'This site is much smaller in hectares, therefore it is more bite-sized. It is also between two MRT stations - Tai Seng and MacPherson.'

In addition, the site is close to the 3.5 ha industrial site won last August by Oxley Rising, which offered a bid of $158.1 million, or $169 psf ppr.

The Oxley Rising site, which has a 2.5 plot ratio and is also zoned for Business 1 development, had 11 bidders, including companies like Qingdao Construction (Singapore) and Sim Lian Holdings.

Mr Tan said the Oxley Rising site has a better frontage, but the size of the Ubi Road 1/Ubi Avenue 4 plot will make it popular. He expects competition for this site to be 'hot', as 'current sentiment is good for doing industrial work'.

The tender for this site will close at 11am on March 7.


Source: www.businesstimes.com.sg

SINGAPORE - Banks should take into account potentially higher interest rates in their credit assessments and not assume that the current low cost of funds will last indefinitely, the head of the Monetary Authority of Singapore (MAS) said on Friday, as he underlined the need to guard against the risks of asset bubbles.

"Many parts of Asia in particular are vulnerable to property bubbles, not only because of current liquidity conditions but also because many investors believe that, in a growing economy, the property market can only move up," Mr Heng Swee Keat, the managing director of the MAS, said at the opening of French business school EDHEC's Risk Institute Asia.

"Many have forgotten how the property markets in the region slumped during the 1997/98 Asian Financial Crisis," he said.

He said policy makers must leave no doubt of their resolve to tackle the potential build-up of risks and must be willing to take progressively tougher measures, as MAS and other agencies in Singapore had done recently to cool the property market.

The measures, effective from Jan 14, included seller stamp duties imposed at 16, 12, 8 and 4 per cent, respectively, for homes sold in the first, second, third and fourth year from purchase, as well as the lowering of the loan-to-value ratio to 60 per cent for individuals with outstanding mortgages. Also, financial institutions can only grant loans amounting to half the value of the properties purchased by non-individuals, such as companies, trusts and collective investment schemes.

Urging banks to continue prudent lending practices, Mr Heng said the MAS will monitor bank activities closely.

Mr Heng also said the MAS will require all local banks and significant insurers to form a specific committee that will look into how they manage risks.

He said these institutions must have a dedicated Risk Management committee in place after their annual general meetings this year and members of this committee must have the right skills and expertise to perform their duties.

Starting this year, all board members of local banks will also be required to undergo training but MAS didn't provide details on what the training should comprise.

Analysts said the announcement on Friday provided a clear and positive direction for local banks.

"The timing is right," said Ms Annie Koh, associate professor of finance at Singapore Management University (SMU), adding that having a good risk management committee will be most relevant since many local financial institutions are taking on more cross-border expansions.

A DBS spokesman said that for over a decade, the bank has had in place a board risk management committee comprising seasoned bankers and professionals who have deep knowledge of risk management.

"DBS also provides ongoing training for the entire board to help them keep abreast of the latest developments in risk management, capital management, accounting policy changes and regulatory changes," the spokesperson added.

OCBC's Risk Management Committee has been in place since August 2004. It reviews and approves the bank's overall risk management philosophy, risk management frameworks, major risk policies and risk models.

"Our progressive efforts over the years to strengthen risk management practices has enabled the Bank to weather the recent financial crisis with sound asset quality and credit losses below industry level," said Mr Gilbert Kohnke, Group Chief Risk Officer, OCBC.

Meanwhile, a UOB spokesperson said the bank's Executive Committee of Directors has been assisting the Board to manage risks.

"Going forward, a dedicated Risk Management Committee will take over from the Exco, the role of assisting the board in managing the risks arising from the growing complexity of the financial landscape," the spokesperson added.

by Millet Enriquez
05:55 AM Jan 22, 2011

Source: www.todayonline.com

SINGAPORE - Regent Court, a freehold residential property at Serangoon Road, has been put up for sale via tender by its marketing agent Cushman & Wakefield.

The property has a land area of 38,857 sq ft and is zoned for high-rise residential development of up to 36 storeys. It has a plot ratio of 2.8, which allows a maximum gross floor area of 108,800 sq ft. No development charge is payable.

According to Cushman & Wakefield, the site will allow a developer to build some 200 apartment units with average sizes of 500 sq ft.

The property is worth more than $83 million, translating to a minimum price of $763 per sq ft per plot ratio. The break-even project cost is about $1,200 psf, said Cushman & Wakefield.

The firm's vice-chairman Donald Han, said the Serangoon area has been recognised as a strategic suburban residential area due to the its proximity to the city centre, as well as HDB upgraders' interest to own and occupy condominiums.

Cushman & Wakefield said the connectivity of the Serangoon area would be improved with the completion of the Circle Line and the Upper Serangoon PIE viaduct.

The tender is expected to close on Feb 28. Jo-ann Huang


by Jo-Ann Huang Limin
05:55 AM Jan 21, 2011

Source: www.todayonline.com

While the Government has to act to prevent the property market from getting beyond the reach of most Singaporeans, I am however not very comfortable that the latest steps - announced last week - are the best means of dealing with the issue.

Not only are the measures fairly drastic, they appear to be dealing more with curbing demand than raising supply.

The Government has claimed that there is no shortage of supply. It points out that the sites awarded last year under the Government Land Sales Programme (GLS) will yield about 13,300 units. For the first half of this year, it says it will make available sites that would be able to yield about 14,300 units.

Further, as at the end of the third quarter of last year, there were about 64,400 uncompleted units in the pipeline, of which roughly half were still unsold. These compare with the annual take-up rate of about 12,700 units between 2007 and last year. Unfortunately, there is a lag period between the site award and the sale of the property.

The latest attempt to cool the property market may have the unintended effect of reducing supply as developers decide to take a wait-and-see approach. They might be even willing to pay the penalties for missing completion deadlines rather than sell at a loss. It could also see the bigger developers with the financial muscle to hold being able to take advantage of those who can't hang on to their sites.

And will the new rules which took effect the day after they were announced - Jan 13 - force buyers to give up options, now that financing will be more difficult to obtain?

Under the new rules, financial institutions can only grant loans amounting to half the value of the properties purchased by non-individuals, such as companies, trusts and collective investment schemes. Individuals with existing outstanding mortgages can now borrow only up to 60 per cent of the value of their next property purchase.

Another unintended effect could be that those who have the financial resources will be able to get more properties on the cheap - to sell when prices recover later.

But should the Government be overly concerned with private-sector housing? Should it be going all out to prevent a fool from parting with his money?

Despite numerous warnings about the dangers of a property bubble bursting and that the current low interest rate regime might not last for too long, property prices, prior to the latest measures, continued to climb.

I believe the Government should be more concerned about housing the masses. It has done a marvellous job, having built more than one million units since the Housing and Development Board (HDB) was established. At present, some 900,000 units house more than four-fifths of the population. For the vast majority of newly-weds, their first home is likely to be an HDB flat. These are the people whom the Government has to be concerned with.

The Government has said it will be building more HDB flats - up to 22,000 Build-To-Order flats this year - to accommodate the masses. Will these be enough?

It should perhaps also get out of building executive condominiums (EC) units which provide condo-like facilities and the Design, Build and Sell Scheme (DBSS) units. The HDB says land for some 8,000 of these could be launched this year. Why should the HDB be catering to the needs of this select group?

Look at what is happening to the estates that were built by the HUDC for an earlier group of the so-called sandwiched class. Some like Farrer Court, Amberville and Bedok Reservoir, have been sold en bloc to private developers. The remaining ones - Shunfu, Braddell Heights, Pine Grove, Laguna Park, Neptune Court, Chancery Court and Eunosville - have been privatised or are in the process of being privatised in anticipation of en bloc sales. Why must public funds be used to cater to such profiteering?

Rather than be all things to all people, the Government should concentrate on housing the masses.

by Conrad Raj
05:55 AM Jan 21, 2011

Conrad Raj is editor-at-large with Today.

Source: www.todayonline.com

SINGAPORE - Once living in the shadow of their inner-city and city fringe cousins, suburban residential properties are now stepping out on their own - with some of these properties located in more remote areas only accessible by feeder buses and light rail transit (LRT).

And property experts say such mass market homes remain in high demand from owner-occupiers, who are unscathed by the new round of cooling measures that target mainly speculators.

The Tennery, one of Far East Organization's newest properties, is a prime example of an outlying property hot in demand. According to Far East Organization, more than 90 per cent of the 338 units - 620 sq ft to 950 sq ft for one- and two bedroom units - have been sold.

Located at the crossroads of Woodlands Road and Bukit Panjang, The Tennery units sold at prices ranging from $1,118 to $1,317 per square foot (psf), according to December sales figures from the Urban Redevelopment Authority. The 16-storey property will be built above the Ten Mile Junction LRT station and the upcoming Junction 10 shopping mall.

A little over a year ago, a unit at another Far East Organization's property, Mi Casa in the Choa Chu Kang/Bukit Panjang area, transacted at a price of $692 psf in November 2009. Mi Casa's homes cater to families, with two- to four- bedroom units ranging from 990 sq ft to over 2,000 sq ft for the largest units.

Analysts say more home buyers and investors are looking at suburban properties, now that plans to revamp regional centres have been announced by both developers and the Government.

"Home buyers who are buying properties, especially those that are away from the city centre, are predominantly Singaporeans. Almost eight out of 10 of them will be Singaporeans. But we are also seeing an increasing number of foreigners - predominantly permanent residents - who are considering buying such properties, especially as Singapore increases its intake of immigrants," said Mr Nicholas Mak, research head at real estate consultancy SLP International.

And despite the new cooling measures, property developers are capitalising on the trend. For instance, CapitaLand is building a 24,902-sq-m mixed retail and residential property at Bedok Town Centre. The developer is also going ahead with plans to release the project's 500 units for sale this year, regardless of the new measures.

The property is located within a shopping catchment of 300,000 residents in the Bedok area, atop a new integrated bus and MRT interchange, and is a short walk from new and revamped family-friendly amenities.

Other suburban locations that may present property development opportunities is the Jurong Lake District - home to Jurong Gateway, Cleantech Park and a number of business and leisure destinations - as well as Seletar Hills, where The Greenwich retail and residential development was recently launched.

"Far-flung suburban properties tend to be more for owner occupation. If they are not very accessible to local transport, they tend to be less attractive to tenants. Therefore, investors would buy it only if they think there is good capital appreciation of some of these properties," said Mr Mak.

"Once the authorities have announced plans for a new MRT track or stations around the area, the owners of some of these properties would immediately increase their asking price," he added.

With the Government Land Sales programme set to release 10 sites on the confirmed list located near MRT stations this year, analysts expect new developments to break into these areas.

"Singapore has come a long way. In the past, if you had properties in places like Changi, it could take a long journey time of at least two hours to get to the city. But now, we have a good network of MRT and expressways in Singapore. And in that sense, some Singaporeans are looking at these properties in a better light," said Mr Colin Tan, head of research and consultancy at Chesterton Suntec International.

Investors who intend to ride on growing rentals can now look to suburban properties. As Singapore's population and economy grows, demand for rental properties in suburban areas will also be on the rise. Rentals grew by 27.5 per cent from November 2009 to November 2010.

Even buyers with deeper pockets are seeking out homes in suburban areas. Mid-tier developments such as Suites @ Eunos were sold at a median launch price of $1,339 psf, while The Lanai was sold at the latest price of $1,450 psf. Both properties are in the Outside Central Region, with Suites @ Eunos located at Jalan Yasin and The Lanai located near Hillview Avenue.

The sentiment for such homes will be affected by the new cooling measures but the effect will be short-lived, Mr Tan said.

"The market is just reeling from shock, but normal service will resume in a couple of weeks," he said.

by Jo-Ann Huang Limin
05:55 AM Jan 21, 2011

Source: www.todayonline.com

SINGAPORE - In a survey conducted at property blog www.propwise.sg, 66 per cent of the 269 respondents believe that the latest round of cooling measures by the Government is sufficiently harsh to prevent a property market bubble in Singapore, while the other 34 per cent do not think so.

Some 41 per cent of the respondents believe that property prices will go down this year as a result of the measures, a sharp contrast to the majority of analysts who had forecast continued property price appreciation for this year prior to the latest measures.

Many believe that the measures will severely restrict the buying pool to mainly new homebuyers, making it difficult for investors and even genuine upgraders from buying. The high amount of cash required to buy the second property would present a significant stumbling block for the average Singaporean.

A significant 30 per cent feel that the market will stay flat, hovering within plus/minus 5 per cent of current price levels.

The remaining 29 per cent feel that prices will continue to appreciate this year, citing low interest rates, the strong economy and the low unemployment levels as reasons for the continued strength of the market.

Some 31 per cent of respondents say they will put off further property investments for the time being, suggesting that the near term pool of buyers would shrink. As holding costs remain attractively low, only 7 per cent of respondents are looking to sell their property as they believe prices may drop further. With buyers holding back and sellers not under pressure to sell, transaction volumes will likely plummet.

Investors will be forced to think hard about keeping their property for the long term as they cannot expect to divest for a profit before TOP as they have done in the past - their focus will have to shift from capital appreciation to include rental yield. Also, with the higher downpayment required for second or further mortgages, the return on capital will decline, making property a less attractive investment for some.

Interestingly, long-term investors have not been deterred by the measures - 55 per cent of the respondents are keen on making a property investment if prices fall. Some respondents thought a fall in prices of 10 to 15 per cent would be sufficient to lure them back into the market. Ku Swee Yong, IPA

05:55 AM Jan 21, 2011
Source: www.todayonline.com

SINGAPORE - The Housing and Development Board is launching today the tender for three 99-year leasehold residential sites under the Government Land Sales Programme for the first half of this year.

The first site, at Bishan Street 14, has an area of almost 12,000 sq m and can potentially yield 650 dwelling units. The site is located near Bishan MRT Station and Junction 8 Shopping Mall, Raffles Institution and Catholic High School.

The land parcel under the Reserve List has been put up for tender after a developer committed to bid at least $189.8 million. The tender will close on Feb 24.

The second site, located along Sengkang Square and Compassvale Road, has an area of 17,700 sq m and can potentially yield 530 dwelling units. The site is located near Compass Point shopping mall, Sengkang Community Club and the Tampines Expressway. The tender will close on March 15.

The third land parcel is located at Choa Chu Kang Drive and has an area of 17,589.8 sq m with a potential yield of 490 dwelling units. The site is located near Lot 1 shopping mall, Yew Tee Square and Choa Chu Kang Stadium. This tender will close on March 22.

05:55 AM Jan 21, 2011

Source: www.todayonline.com

Government measures are most effective when they are unexpected. That was why I concluded last week that the single most effective move was not the measures themselves but the timing of their introduction.

In economics, this topic is covered under the expectations theory. If the market expects the announcement, players will take positions that will nullify some of its effectiveness.

Looking at the latest round of cooling measures, the tools are not very different from the previous rounds except that they come with more punitive conditions.

The hike in sellers' stamp duty penalises early resale but tellingly, no mention was made of how big the problem was, unless the purpose was to deter property buying for investment by making it less attractive. Indirectly, this confirms for the first time that overly strong sales are also viewed as a problem, not just rapid price growth.

Seller's stamp duty on new properties was raised as much as 16 per cent of the sale price if the home is offloaded within a year of purchase, dropping by 4 per cent each subsequent year till the fourth year.

Given Singapore's strong fundamentals and steady - if not buoyant - economic growth, both local and foreign property investors can do no worse than park their monies in properties here than elsewhere, even if it is for four years. Lest we forget, investment purchases by foreign investors may even grow without any price increases if our local currency appreciates substantially against their home currencies.

Some have commented that the revised stamp duties are like taking a sledgehammer to the market. Are we not underestimating the extent of the problem here? Could anyone have foreseen that we would have reached our fourth set of cooling measures in just sixteen months after the first in September 2009. This works out to be about one set every five months!

Others expect sales volume and home prices in all segments, except at the top-end, to fall.

Let us put ourselves in the shoes of a hypothetical investor. By now, prices have already risen to quite high levels and we are closer to the peak.

Let us say that the investor has resources to buy only one high-end property or four mass market ones. Which is the preferred option? I am almost certain, nine out of 10 will pick the latter. Should the market correct unexpectedly, it is a lot easier to dispose of the lower-priced properties. In a sharp correction, most buyers are owner-occupiers and they have affordability issues.

The comment that prices of suburban homes are most vulnerable is also tantamount to saying that many of the developers who participated in the state sales of suburban sites last year did not do their homework if demand is indeed so fragile. You can question their bids but you cannot deny the demand. Let us give them some credit. They are putting their money where their mouths are - it is not just coffee shop talk.

Many are also expecting a price correction for the whole year. I can foresee a short-term correction, if any, because of panic sales in the secondary market. But a correction for the whole year, led presumably by price cuts from developers? Has anyone taken a recent look at their balance sheets after record sales for 2009 and last year? Are these knee-jerk analyses?

In the latest set of measures, we expect potential buyers to act "rationally" and pull back their buying. But are we expecting too much? This is the same group of people who have irrationally ignored the fact that there is more than ample supply in the market. We know that the authorities have been highlighting this fact at every opportunity. Can this group still feign ignorance?

We cannot simply brush this "selective rational thinking" aside because then our line of argument lacks consistency. Then we believe only what we want to believe.

For sure, with each set of measures, a slice of potential buyers are removed from the market but are many of us continuing to under-estimate the depth of liquidity in the markets?

It is worth repeating here what a local pre-eminent economist concluded in a published e-mail exchange with another last year. It is that loose monetary policy invariably leads to asset inflation. There are no two ways about it.

For the economist, the crux of the problem is low interest rates. Not many have bought into or fully understood this yet. Have the latest measures addressed that? If not, I am convinced more cooling measures will be needed until the liquidity problem fully dissipates.

by Colin Tan
05:55 AM Jan 21, 2011


Colin Tan is Head, Research & Consultancy at Chesterton Suntec International.

Source:www.todayonline.com

When the latest property measures were unveiled on Jan 13, it took most market watchers by surprise, mainly because we had been reassured several times that the previous rounds of measures announced on Aug 10 had been effective.

Reaction from the local market has been negative but not too severe, as shown in a survey by property blog propwise.sg (see Page B13).

Were these new measures necessary? Definitely.

At the macro level, Singapore's real estate is far from being overleveraged. According to data from the Monetary Authority of Singapore (MAS), as at the end of October last year, total housing loans amounted to $109 billion and the total number of completed private housing units stood at 256,513 units.

This included private residences, from good-class bungalows down to shoebox apartments. Assuming an average value of each unit at $1.1 million, the total value of completed private homes is $282 billion; that is, the loan-to-value ratio is a relatively low 39 per cent islandwide.

However, at the micro-level, pockets of risks exist. Table 1 shows a sampling of the record high prices achieved last year.

The Vision was launched in the first quarter of last year and its "higher-than-the-neighbourhood's" transacted psf prices helped to lift the general valuations in the West Coast. The highest price achieved of the 199 units that were transacted in Q2 last year was $1,266 per sq ft (psf). The average price for The Vision in Q2 2010 was $1,019 psf versus the neighbouring developments Blue Horizon (sharing a common boundary wall with The Vision) at $856 psf and Westcove Condo across the road at $689 psf. The highest price achieved in The Vision is almost double the average price achieved in Westcove Condo that quarter.

The same story unfolded itself across the outskirts throughout 2010: Serangoon, Pasir Panjang, Bukit Panjang, Pasir Ris, Yio Chu Kang, Ang Mo Kio, Yishun and more.

A most recent example is The Lakefront Residences in Jurong West launched in Q4 2010. Of the 167 units transacted, based on the latest Realis data, the highest price achieved was $1,362 psf and the average was $1,074 psf. Just 100m away, the older condominium Lakeholmz, at $681 psf on average, is half of the peak price at The Lakefront Residences (without considering the sizes of apartments, just comparing psf values for the street block). Even if we topped up the 10-year expired lease tenure for Lakeholmz to 99 years and added a generous construction cost of $250 psf, it would be difficult to place a value for a new apartment in that street at above $1,000 psf.

So it would seem Singaporeans value "newness" with a very high premium? Wrong. When we compare the prices of the still-under-construction Caspian (which shares a boundary wall with The Lakefront Residences), at an average of $793 psf in Q4 2010, we see that the newness value is not sufficient to explain the prices achieved at The Lakefront Residences.

Within two to four years, both projects will be delivered to buyers brand new. So why did The Lakefront Residences achieve an average price that is 35-per-cent higher than Caspian's? I am obliged to add two other factors to justify the premium: The "showflat wow" factor and the "showflat peer pressure" factor.



Pushing up the PPI

With premium prices achieved during property launches at 20- to 50-per-cent higher than neighbouring average psf prices and multiplied by the number of transacted units, it is no wonder that the Private Property Index (PPI) kept rising though 2010.

The PPI rose in Q4 2010 despite August's cooling measures. It's a good thing the URA's overall PPI is weighted so that transactions in a few launch projects do not overly distort the PPI. Otherwise, the rise of the Q4 2010 PPI would not have been a mere 2.7 per cent.

And that led us to the latest round of measures.

Apart from the overall islandwide PPI published by URA, investors can refer to URA's website for transactions in specific projects and compare prices so as to make better decisions. However, of late, most investors do not seem to be doing their homework and have purchased in large numbers at record high prices in the suburbs across Singapore.



Who might be the next target?

Investors make up one of several constituents in a property transaction. The past few rounds of measures have already hit investors hard enough. In the next set of measures, if any, the other parties who may be targeted are the developers, the sales agents, the mortgage lenders and valuers.

Many investors and analysts have pointed their fingers at foreign investors and their "hot money" causing Singapore's real estate to overheat.

Yet the new launches that set record-high prices in the suburbs do not attract foreigners as much as they attract Singaporeans. Table 2 shows why we should not blame hot foreign money for bringing on the latest round of measures.

On average, about 25 per cent of residential units are purchased by foreigners. These projects listed in the table are clearly well below the national average. Perhaps Singaporeans are the ones pouring hot money into property.

I would rule out targeting developers unless there are issues of misrepresentation. Otherwise, developers do what they do - acquire land, build showflats, and sell homes.

The sales agents have come under the new Council of Estate Agents and are already facing tighter operating parameters. Again, unless there is bad practice or misrepresentation, I do not think they will be the next target.

As for the mortgage lenders, when I made enquiries about loans for investors buying at these record high prices, the answer invariably was: "Oh, valuers matched developer's selling prices." Of course, as long as there are valuers who can sign off on a certain value for a property, banks are eager to lend.

How might valuers agree to value a new launch that is priced at 20- to 50-per-cent higher than other transactions in the neighbourhood? One counterargument regularly given to me is: As long as there are transactions in this new launch at this price, the valuers can support valuations at the new highs.

In the example of Caspian above, buyers today would find it difficult to obtain a loan based on $1,000psf valuation. Sellers are also unable to ask for prices above $1,000 psf when prospective buyers are unable to secure loans at that value. However, the same buyer can purchase a smaller unit at the same investment quantum at Lakefront Residences at $1,150 psf with a bank loan attached. I wonder why the discrepancy given that the two properties are side-by-side and both are not completed.

By not taking reference from other similar transactions in the neighbourhood, this means that valuations are justified solely on transacted prices within the new launch itself. Without taking into account the lower values of neighbouring condominiums and the intrinsic land value in the vicinity, this valuation method is a self-fulfilling upward spiral.

Having excluded the foreigners, the developers and the sales agents, we are left with two targets for the next set of cooling measures, if any.

Perhaps one approach would be to require valuers to disclose their assumptions and methods to the MAS and valuations for new launches to take into account values of other properties in the neighbourhood. Banks may be instructed to lend for new launches based on this more comprehensive and inclusive method of valuation.

Furthermore, seeing the strong response to the attractive investment package at Spottiswoode18 this week, I believe tougher measures to restore sanity to the market may not be far away.



Ku Swee Yong is the founder of real estate agency International Property Advisor (IPA), which provides services to high-net-worth individuals.

by Ku Swee Yong
05:55 AM Jan 21, 2011

Source: www.todayonline.com

Published January 19, 2011

Plot near Bartley MRT triggered for release
99-year leasehold site can be used for condo project

By KALPANA RASHIWALA

IT'S only January and a second 99-year leasehold private housing site has been triggered from the government's reserve list for the first half of this year - a plot next to Bartley MRT Station which can be developed into a new condo project with about 620 units.


This follows the successful application for the site's release by an unnamed developer that has agreed to bid at least $191.78 million or about $288 per square foot per plot ratio (psf ppr) for the site.

Earlier this month, the government announced that a reserve list plot near Bishan MRT Station was triggered for release with the successful applicant committing to pay at least $189.8 million or $300 psf ppr.

Analysts note that while the government has ample sites on the confirmed list - where sites are released according to a prestated schedule regardless of demand - for the current half, most of them are far from the city in locations like Choa Chu Kang, Tampines, Upper Changi, Sembawang and Punggol.

So they were probably drawn to the Bishan and Bartley plots which are closer to the city and near MRT stations. 'The Bartley plot is just one MRT stop away from Nex mall,' observed Knight Frank's head of consultancy and research Png Poh Soon.

While the successful applicants for the Bishan and Bartley reserve list plots would have submitted their applications before last week's property cooling measures were announced, some analysts say they would not be too surprised if developers continue to trigger a few more sites from the reserve list. 'It could be an opportunity to replenish their landbanks with new sites bought at less aggressive prices compared with before the latest cooling measures,' suggests Credo Real Estate executive director Ong Teck Hui.

Market watchers pointed to at least two remaining sites in the reserve list - two adjoining plots at Stirling Road near Queenstown MRT Station which can be developed into condominiums - that could be on developers' trigger watchlist.

Projects on sites in or closer to the city are more likely to enjoy investment demand from buyers thinking of leasing out the units. And usually developers can carve out smaller units from such projects and thus achieve higher psf prices.

Urban Redevelopment Authority also launched yesterday a confirmed list plot facing Bedok Reservoir that can be be developed into a five-storey project with about 640 units. Allowable developments include condominium/flats and serviced apartments.

Knight Frank's Mr Png expects top bids for the plot to be in the $450-500 psf ppr range and selling prices to be about $1,000 to $1,050 psf given the site's choice location near the future Bedok Town Park MRT Station under the Downtown Line.

Credo's Mr Ong has a lower land price expectation of about $280-320 psf ppr, with the top end of that range reflecting a breakeven cost of about $700 psf - to factor in a safety margin in case of price softening following the recent cooling measures.

BT understands that nearby, Frasers Centrepoint and Far East Organization are currently selling units at Waterfront Key and Waterfront Gold at average prices just shy of $1,000 psf.

On the other side of the reservoir, Sim Lian has been selling units at its Waterview condo at about $838 psf on average. It is developing the condo on a 99-year leasehold plot bought last year for $421 psf ppr.

As for the Bartley plot, Mr Ong predicts top bids could be in the $320-360 psf ppr range - with the upper end of the range translating to a breakeven cost of about $750 psf, again to leave a 'safety margin' for potential price declines.

He estimates a new condo project on the site could today sell for an average price of about $900 psf.

'Bidders would be cautious and factor in some cushion in case of a softening in private home prices. This will result in land bids being lower than those before the cooling measures were introduced,' said Mr Ong.


Source: www.businesstimes.com.sg

Published January 20, 2011

Resorts World set to buy Singapore Tech Building

By KALPANA RASHIWALA

(SINGAPORE) Singapore Technologies is said to be close to selling its eponymous office block in the Tanjong Pagar area for nearly $150 million to Resorts World at Sentosa Pte Ltd, the Genting Singapore unit that owns and operates the integrated resort on Sentosa.

The 13-storey freehold Singapore Technologies Building, at the corner of Cantonment and Lim Teck Kim roads, is currently about 90 per cent let and Resorts World is expected to occupy the building as leases expire and more space becomes available - to cope with its growth.

Singapore Technologies Building was completed in 1986 and boasts 135 parking lots.

The price Resorts World is expected to pay would work out to about $1,500 per square foot on the current net lettable area (NLA) of 98,906 sq ft.

Jones Lang LaSalle (JLL), which handled the expression of interest exercise for Singapore Technologies, did not pitch the property for redevelopment potential as the existing gross floor area of about 128,600 sq ft reflects a plot ratio of about 6.6 - higher than the 5.6 plot ratio assigned to the site under Master Plan 2008. The site is zoned for commercial use.

However, there is scope for additions and alterations work that could carve out more NLA and boost the property's rental profile, JLL's national director (investment sales) Anthony Barr had said in October when the property was launched for sale. When contacted yesterday, he declined to comment.

Singapore Technologies Building's expression of interest exercise closed in early November and is said to have drawn a wide profile of investors.

Market watchers said it made sense for Resorts World to invest in a location like Tanjong Pagar, which is close to Sentosa.

Tanjong Pagar is slated to be transformed into a new bustling waterfront district after the container terminals in the vicinity eventually move out.

The Tanjong Pagar Railway Station site is also expected to be redeveloped after Keretapi Tanah Melayu vacates the site under a historic land-swap deal between Singapore and Malaysia announced in September.

Resorts World generated revenues of $860.8 million for the second quarter of last year and $731.8 million for Q3.

The office investment market is off to a good start this year. NTUC Income Insurance Cooperative recently paid $101 million for a 49 per cent equity stake in the company holding 16 Collyer Quay (formerly Hitachi Tower).

The deal valued the 999- year leasehold office tower at about $626 million or $2,250 per square foot on a NLA of 278,356 sq ft.

The remaining 51 per cent stake in Savu Investments continues to be owned by an entity, the shareholders of which are funds managed by affiliates of Goldman Sachs and an indirect subsidiary of Goldman Sachs.

Oxley Holdings has also picked up The Corporate Building along Robinson Road for $57 million

Source: www.businesstimes.com.sg

Published January 21, 2011

Govt launches tenders for 3 housing sites
All three plots are near MRT stations in Choa Chu Kang, Sengkang and Bishan

By KALPANA RASHIWALA

THE government yesterday launched tenders for three 99-year leasehold housing sites near Choa Chu Kang, Sengkang and Bishan MRT stations.


This includes two plots on the confirmed list - an executive condo (EC) plot in Choa Chu Kang next to Mi Casa condo, and a private condo site near Sengkang MRT Station.

The third parcel, near Bishan MRT Station, was triggered from the reserve list as announced on Jan 7.

The EC plot at Choa Chu Kang Drive, which is near Choa Chu Kang MRT Station and Lot 1, can generate about 490 housing units. Cushman & Wakefield senior manager of Asia Pacific research Ong Kah Seng estimates top bids for the site at about $260-280 per square foot per plot ratio (psf ppr), translating to a breakeven cost of about $550-580 psf and average selling price in the $600-630 psf range.

Credo Real Estate executive director Ong Teck Hui expects three to five bids with the highest in the $220-240 psf ppr band, reflecting average selling price expectations of about $610-620 psf.

ECs are a hybrid of public and private housing with ownership and resale restrictions in the first 10 years.

The Sengkang plot can be built into a private condo with about 530 units. Both consultants predict the top bid could come in at $350-380 psf ppr and a resulting breakeven cost of about $700-740 psf and average selling price in the $800 psf region.

The calculation factors in the possibility of price softening; one MRT stop away, at Buangkok, units in The Quartz are selling at about $900 psf.

The Sengkang plot launched yesterday is a stone's throw from the bustling Sengkang Town Centre, bus interchange, MRT/LRT stations and Compass Point mall.

On January 7, the government announced that the Bishan plot had been triggered from the reserve list, following a successful application from an unnamed developer that had agreed to bid at least $189.83 million or $300 psf ppr.

Credo's Mr Ong predicts six to 10 bids for the land parcel, with the highest offer around $550-580 psf ppr; this would result in a breakeven cost of about $950 psf and an average selling price of around $1,100 psf.

Cushman's Mr Ong forecasts five to seven bids, with the top in the $450-480 psf ppr range and reflecting an average selling price expectation of about $920-950 psf.

Market watchers expect developer interest for Government Land Sale sites to be cautious following the Jan 13 cooling measures, although overall economic fundamentals remain good.

The tender for the Bishan site closes on Feb 24, followed by the Sengkang plot on March 15, and the Choa Chu Kang EC plot on March 22.


Source: www.businesstimes.com.sg

by Jonathan Peeris
05:55 AM Jan 19, 2011

SINGAPORE - Two more residential sites are now available, potentially yielding about 1,260 units that will offer homebuyers with more housing choices.

The Urban Redevelopment Authority (URA) yesterday put up for tender a land parcel at Bedok Reservoir Road, the first residential site to be sold through the Confirmed List under the Government Land Sales Programme for the first half of this year.

At about 4.6 hectares, the site will have a maximum permissible gross floor area of over 63,000 sq m and can yield about 640 housing units.

The site is well connected to major expressways and is close to the future Bedok Town Park MRT Station on the Downtown Line. The tender will close on March 3.

The URA will also make available a residential site at Bartley Road and Lorong How Sun. The tender was triggered after the URA received an application from a developer who committed to bid not less than $191.7 million. This land parcel has been on the Reserve List system since November 2009.

The site has an area of about 2.21 hectares and a maximum permissible gross floor area of over 61,000 sq m. It can potentially yield about 620 housing units.

The URA will launch the public tender for the site in about three weeks.

Source: www.todayonline.com

January 13, 2011, 7.17 pm (Singapore time)

Oxley's Loft@Holland sold out within 2 hrs of launch

By ANGELA TAN


Oxley Holdings Limited said that its Loft@Holland, has met with strong response with all 41 apartment units taken up within two hours of the soft launch on Thursday.


Oxley said the demand was strong enough to require balloting to be conducted for all but two units.

On average, there were about three interested buyers per unit.

The units were booked at prices up from $1,630 psf to $2,166 psf and the buyers were mainly Singaporeans.

Located at 151 Holland Road, the five-storey development comprises 37 one-bedroom units, ranging from 323 - 484 sq ft, and four two-bedroom penthouses with private jacuzzis, ranging from 980 - 1,141 sq ft.

Late Thursday, the Singapore government unveiled a slew of additional measures to cool the property market.

Among the measures, property buyers who are individuals with one or more outstanding housing loans at the time of the new home, the loan-to-value (LTV) limit on housing loans granted by financial institutions regulated by MAS will be lowered from 70 per cent to 60 per cent.


Source: www.businesstimes.com.sg

Published January 14, 2011


New steps rain on speculators' parade
Big hike in seller's stamp duty and mortgage restrictions to cool property market

By UMA SHANKARI

(SINGAPORE) Starting today, speculators in the Singapore property market will find their ardour cooled by a severe new regime. The seller's stamp duty for private homes will rise to as high as 16 per cent, from up to 3 per cent previously, while tighter mortgage restrictions will be put in place.

The government yesterday unveiled a new and stronger round of demand-side cooling measures - the third set in less than 12 months.

The killer move, according to analysts, is a sharp hike in the seller's stamp duty to 16 per cent, 12 per cent, 8 per cent and 4 per cent respectively for properties that are bought on or after Jan 14 this year and are sold in the first, second, third and fourth year after purchase.

Previously, owners who sold houses and apartments less than three years after buying them had to pay a seller's stamp duty of only up to 3 per cent.

Related link:


Click here to read the government's news release



Singapore also further slashed the Loan-To-Value (LTV) limit on housing loans for both individual and corporate buyers.

Its move follows Hong Kong's, which in late November 2010 announced some of its toughest-ever measures to cool the property market - including a stamp duty of as high as 15 per cent on apartments sold within six months of purchase. Hong Kong also tightened mortgage restrictions.

Analysts expect the higher seller's stamp duty will wipe out most speculators' gains and keep them out of Singapore's property market.

'For those buyers who intend to flip their properties within one or two years, the increased seller's stamp duty erases their potential gains,' said Merrill Lynch economist Chua Hak Bin. 'So this measure is pretty targeted and will take away a big chunk of these potential investors.'

But most analysts found the unexpected sharp hike in the seller's stamp duty to be harsh. In addition to hindering short and medium-term investors, it could also hurt genuine owner-occupiers looking to change homes.

International Property Advisor chief executive Ku Swee Yong said that a staggered-down capital gains tax - one that could perhaps be imposed only on capital gains from real estate - might have been more advisable. This would spare those who sell their properties at a loss.

'The government's intention of forcing people to treat real estate as a long-term investment is admirable,' said Mr Ku. 'But this (the higher seller's stamp duty) will force people to hold, including some genuine cases where there might be a real need to sell off a property.'

In addition, Singapore lowered the LTV limit on housing loans from 70 per cent to 60 per cent for individual buyers with one or more outstanding housing loans at the time of the new home purchase.

And for corporate purchasers (such as firms, trusts and collective investment schemes), the LTV limit has been cut to an even lower 50 per cent - regardless of the number of outstanding housing loans at the time of the new home purchase.

In August 2010, the government reduced the LTV ratio from 80 per cent to 70 per cent.

Yesterday's measures follow three gentler sets in September 2009, and February and August 2010.

'Previous government measures have to some extent moderated the market, but sentiment remains buoyant,' said the National Development and Finance Ministries in a joint statement with Singapore's central bank, the Monetary Authority of Singapore.

'Low interest rates plus excessive liquidity in the financial system, both in Singapore and globally, could cause prices to rise beyond sustainable levels based on economic fundamentals.'

Private home prices rose 17.6 per cent last year, according to flash estimates. A record 15,500-16,500 new private homes are also estimated to have been sold in 2010.

In a statement, the Real Estate Developers' Association of Singapore (Redas) said it has 'taken note' of the latest measures.

The measures will discourage speculative demand and will encourage longer-term holding of properties which will contribute to the stability of the market, Redas said: 'It is in the interest of the market to see a more gradual trend in growth and value for genuine home owners and investors.'

Merrill Lynch's Dr Chua also said that in addition to curbing speculators, the government could be concerned by aggressive mortgage lending by banks.

Analysts expect the volume of new home sales to fall in 2011 but were spilt on whether the new measures will cause private home prices to decline.

'There will be a sense of uncertainty in the market leading to hesitation among buyers and sellers and we can expect to see transactions easing in the short term,' said Credo Real Estate executive director Ong Teck Hui.

But the measures may not lead to an immediate price decline in Q1 2011, he said. This round of measures is still not as severe as the anti-speculation measures announced in May 1996, which resulted in a 1.9 per cent drop in prices in Q3 1996. But any upside in prices in Q1 2011 will be 'minimal', Mr Ong added.

But in any case, analysts said that the 5-10 per cent growth in private home prices for the whole of 2011, which they predicted just one week ago, now looks highly unlikely. They also expect property stocks to fall today in reaction.


Source;www.businesstimes.com.sg

Published January 17, 2011

Shoebox units in industrial projects gaining currency
Downsizing aimed at residential property investors thwarted by curbs

By KALPANA RASHIWALA

(SINGAPORE) The instant success of shoebox residential units has drawn some developers to adopt the same strategy for industrial projects - to target investors and speculators thwarted by restrictions on trading in residential properties introduced over the past year.


The trend, visible even before the authorities' latest measures last Thursday to cool the sizzling private housing market, is now expected to gain further momentum.

While smallish industrial strata-titled units have been available in the Singapore market for some time, industry observers say at least one developer - the Oxley Holdings group, which has been active in developing shoebox apartments - is now branching into developing small-format strata industrial units for sale.

Other developers, such as Soilbuild and Chui Teng, are also expected to launch projects with such units for sale in the next few months.

Shoebox apartments have sold like hot cakes over the past 18 months because of their affordable lumpsum investment quantum, and Oxley is said to be banking on the same strategy for industrial property. It plans to offer about 750 strata factory/warehouse units with an average size of about 1,000 square feet for its project in Ubi Road 1. These units will be priced at about $500,000.

The proposed scheme is subject to approval from the Urban Redevelopment Authority (URA). BT understands that URA typically approves strata industrial projects with unit sizes of at least 100 square metres (1,076 sq ft), although sources say that in certain locations, types of development and designs, the minimum size allowed could be even lower at about 80 sq m (861 sq ft).

A URA spokeswoman said the planning authority 'generally does not prescribe a minimum size for industrial units in order to give developers the flexibility to cater to the different needs of industrialists'.

'However, there is a need to ensure that the layout and configuration of industrial units are capable of effectively functioning as meaningful spaces for industrial activities (for example, manufacturing and warehousing).

'Where it is unclear how a proposed layout is going to cater to industrial activities, URA will work closely with the developer and architect to better understand their development proposal and, if necessary, refine and improve the layout of the development to facilitate the intended industrial activity. This will also help to ensure that the space is not illegally converted to other uses,' she added.

Oxley's proposed 10-storey project in Ubi is said to comprise four blocks and could also feature condo- type facilities such as a gym and rooftop swimming pool. It is located near Tai Seng MRT Station.

The project will come up on a 60-year leasehold plot that Oxley bought for a whopping $169 per sq ft per plot ratio (psf ppr) at a state tender which closed last August.

Market watchers estimate Oxley's breakeven cost for the project could be about $400 psf and that it could market the units for about $500 psf on net saleable area. The 375,150 sq ft plot is zoned for 'Business 1' use.

The lumpsum investment of about $500,000 per unit is similar to the entry-price for shoebox apartments and could draw investors who do not wish to be constrained by the restrictions when investing in residential properties, said Ong Choon Fah, head of consulting & research, SE Asia, at DTZ.

Agreeing, Colliers International director (industrial services) Tan Boon Leong noted that, unlike those who invest in private homes, investors in strata industrial units do not have to pay a seller's stamp duty if they flip the property within specified periods.

In addition, those dabbling in industrial property investment may borrow up to 80 per cent of their property values (as opposed to 50-60 per cent for residential investors), depending on whether they are companies, trusts or individuals.

There are also no restrictions against HDB flat owners who are barred from owning a private property during the HDB flat's five-year minimum occupation period.

The returns are relatively attractive. 'Yields on 60-year industrial units can be about 6-8 per cent - higher than the sub-4 per cent for residential,' said Mr Tan.

Soilbuild is expected to launch in the first half a 60-year leasehold ramp-up factory development at Yishun Street 23 with about 500 units; some will be large (above 10,000 sq ft) but the majority about 1,500-2,000 sq ft and could be priced around the $500,000 mark on average, say sources. Chiu Teng is expected to retrofit Kallang Bahru Complex into a project with more than 150 light industrial units of around 1,000-1,500 sq ft, BT understands.

Colliers' Mr Tan says small-format industrial units appeal not just to investors but end-users. 'They may buy a few adjoining units and knock down the walls for a larger contiguous area.'


Source: www.businesstimes.com.sg

January 17, 2011, 12.56 pm (Singapore time)


Developers sell 1,332 private homes in Dec

By KALPANA RASHIWALA

Developers sold 1,332 private homes (excluding executive condos or ECs) in December 2010, taking total sales for the whole of last year to 16,364 units.

This figure is 11.4 per cent higher than the 14,688 private homes (excluding ECs) developers sold in 2009.

The latest full-year tally also surpasses the record 14,811 private homes (excluding ECs) developers sold in 2007.

In November 2010, developers disposed of 1,915 private homes excluding ECs.

Including ECs, which are a hybrid between private and public housing, developers sold a total 1,699 units last month, show figures released on Monday by Urban Redevelopment Authority.

The figures, based on monthly sales figures by developers to URA, also show that developers launched 1,179 private homes excluding ECs in December, about half the 2,331 units they launched in November

SOurce: www.businesstimes.com.sg

Plot near Bartley MRT triggered for release
99-year leasehold site can be used for condo project

By KALPANA RASHIWALA

IT'S only January and a second 99-year leasehold private housing site has been triggered from the government's reserve list for the first half of this year - a plot next to Bartley MRT Station which can be developed into a new condo project with about 620 units.

This follows the successful application for the site's release by an unnamed developer that has agreed to bid at least $191.78 million or about $288 per square foot per plot ratio (psf ppr) for the site.

Earlier this month, the government announced that a reserve list plot near Bishan MRT Station was triggered for release with the successful applicant committing to pay at least $189.8 million or $300 psf ppr.

Analysts note that while the government has ample sites on the confirmed list - where sites are released according to a prestated schedule regardless of demand - for the current half, most of them are far from the city in locations like Choa Chu Kang, Tampines, Upper Changi, Sembawang and Punggol.

So they were probably drawn to the Bishan and Bartley plots which are closer to the city and near MRT stations. 'The Bartley plot is just one MRT stop away from Nex mall,' observed Knight Frank's head of consultancy and research Png Poh Soon.

While the successful applicants for the Bishan and Bartley reserve list plots would have submitted their applications before last week's property cooling measures were announced, some analysts say they would not be too surprised if developers continue to trigger a few more sites from the reserve list. 'It could be an opportunity to replenish their landbanks with new sites bought at less aggressive prices compared with before the latest cooling measures,' suggests Credo Real Estate executive director Ong Teck Hui.

Market watchers pointed to at least two remaining sites in the reserve list - two adjoining plots at Stirling Road near Queenstown MRT Station which can be developed into condominiums - that could be on developers' trigger watchlist.

Projects on sites in or closer to the city are more likely to enjoy investment demand from buyers thinking of leasing out the units. And usually developers can carve out smaller units from such projects and thus achieve higher psf prices.

Urban Redevelopment Authority also launched yesterday a confirmed list plot facing Bedok Reservoir that can be be developed into a five-storey project with about 640 units. Allowable developments include condominium/flats and serviced apartments.

Knight Frank's Mr Png expects top bids for the plot to be in the $450-500 psf ppr range and selling prices to be about $1,000 to $1,050 psf given the site's choice location near the future Bedok Town Park MRT Station under the Downtown Line.

Credo's Mr Ong has a lower land price expectation of about $280-320 psf ppr, with the top end of that range reflecting a breakeven cost of about $700 psf - to factor in a safety margin in case of price softening following the recent cooling measures.

BT understands that nearby, Frasers Centrepoint and Far East Organization are currently selling units at Waterfront Key and Waterfront Gold at average prices just shy of $1,000 psf.

On the other side of the reservoir, Sim Lian has been selling units at its Waterview condo at about $838 psf on average. It is developing the condo on a 99-year leasehold plot bought last year for $421 psf ppr.

As for the Bartley plot, Mr Ong predicts top bids could be in the $320-360 psf ppr range - with the upper end of the range translating to a breakeven cost of about $750 psf, again to leave a 'safety margin' for potential price declines.

He estimates a new condo project on the site could today sell for an average price of about $900 psf.

'Bidders would be cautious and factor in some cushion in case of a softening in private home prices. This will result in land bids being lower than those before the cooling measures were introduced,' said Mr Ong.

Published January 19, 2011

Source: www.businesstimes.com.sg

UOL pays $313m for Lion City Hotel, former Hollywood Theatre

By KALPANA RASHIWALA


(SINGAPORE) UOL Group has trumped five other contenders to bag the Lion City Hotel and adjoining former Hollywood Theatre site for $313 million.


The unit land price for the Tanjong Katong-Geylang Road area properties, with a total freehold land area of 147,909 square feet, works out to $779 per square foot (psf) of potential gross floor area inclusive of estimated development charges of $77.8 million, assuming UOL embarks on a mixed commercial and residential project with an average plot ratio of 3.39.

Based on an alternative scheme for a residential project with commercial space on the first storey with a 3.0 plot ratio, the unit land price would work out to about $871 psf per plot ratio.

The property was sold through a tender exercise which closed yesterday, attracting strong interest from six major developers, said Landmark Property Advisers and Knight Frank, which handled the sale.

UOL noted that the property is near the existing Paya Lebar MRT interchange station for the East-West and Circle lines. 'Based on the current allowable development options, the property may be redeveloped as a commercial-cum-residential development. The company will continue to assess the current allowable development options and other factors to determine the final development scheme for the property.'

Given its location, the future redevelopment of the property is expected to benefit from the nearby Paya Lebar Central commercial hub planned by the Urban Redevelopment Authority, UOL said. Lion City Hotel and the former Hollywood Theatre are being sold by the family of the late property magnate Wee Thiam Siew. The hotel was built in 1968 and the Wee family has been operating it.

The theatre stopped screening films in the 1990s and is today home to a food centre and a Sheng Siong supermarket.

In November, Shaw Brothers sold the former Singapura Theatre site at No 55 Changi Road to a consortium that includes Roxy-Pacific and Macly Capital for $44.9 million.

In the same month, Far East Organization bought Paramount Hotel and Shopping Centre along East Coast Road for $214 million. Far East is expected to keep the freehold asset as an investment property for recurring income although refurbishment is likely to be on the cards

Published January 19, 2011

Source: www.businesstimes.com.sg

Published January 19, 2011

Small units a big hit at Spottiswoode 18

By UMA SHANKARI

(SINGAPORE) Around 170 units in Roxy-Pacific Holdings' 251-unit Spottiswoode 18 were snapped up at the project's launch yesterday at an average price of $1,900 per square foot (psf) - catching many market watchers by surprise.

The project's mostly small units proved to be popular with investors. Most apartments on offer at Spottiswoode 18 - 150 out of the 251 units - are just 387 sq ft. Apartments at the project go up to 1,324 sq ft in size.

There was also balloting for a handful of units as more than one buyer was keen on them.

The group initially wanted to sell only around 100 units but released all choice units due to the strong response, said Roxy-Pacific chief executive Teo Hong Lim. But he added that last week's government measures to cool the market have had some impact on sentiment as not many units were contested for.

Roxy-Pacific's news comes a day after Oxley Holdings said it has sold 22 out of the 36 residential units at its newly-launched Vibes@Kovan over the weekend.

Apartments at Vibes@Kovan are also small - the 22 apartments range in size from 377 square feet to 1,001 sq ft. They were sold for an average selling price of $1,255 psf.

The deals surprised industry players. Said one industry veteran: 'The thinking now is that small units are mostly sought after by speculators, which is the segment that the government targeted with its measures. So it's surprising that these projects are still selling so quickly.'

But United Engineers reported that sales of its 540-unit executive condominium project Austville Residences were slower as a result of the latest curbs. The developer has sold about 20 per cent of units since its first sales day on Jan 13 - the same day the government unveiled new measures.

'Our sales are affected by the government's announcement on the new set of cooling measures. We are observing a dip in buying interest as most home buyers are still trying to digest the changes introduced to the property market,' said a spokesman for the group.

The morning of the first day of sales saw a high number of visitors and brisk transactions, but the enthusiastic demand was subsequently quelled by the government's announcement later in the day, the spokesman added. But the group is still positive that sales will pick up soon. Units at the project are selling at an average price of $680 psf and the deferred payment scheme is being offered to buyers.

Austville Residences implemented a 'first-come, first-served' system to allocate its 540 units. It was initially well received by the market, with more than 100 successful applicants forming an overnight queue outside its showflat a day before the first sales day.


Source:www.businesstimes.com.sg