There was a significant jump in the number of secondary market transactions at projects near the CBD earlier this month. In the Thomson area, at Sky@eleven, three units were sold in the first week of June for between $1,140 psf and $1,200 psf. The most recent transaction was a 1,851 sq ft unit on the 24th floor, which changed hands at $2.2 million or $1,200 psf. The seller had purchased the unit from the developer for $1.7 million or $931 psf in 2007 when the project was launched. This represents a gain of over 28%.

On the 25th floor, a larger unit was sold for $2.59 million or $1,140 psf. It was the third time in two years that the property changed hands. It was sold for $2.5 million or $1,101 psf in April 2007 and $2.08 million or $917 psf in February 2007.

The project, by Singapore Press Holdings, is targeted for completion next year. Less than 1% of resale units were sold below launch price according to SPH’s 1H2009 results presentation slides dated April 13.

Over at the 545-unit RiverGate along Robertson Quay, a spike in transactions in the resale market is also evident. There were 16 transactions ranging from $1,270 psf to $1,582 psf from May 30 to June 5 according to caveats lodged with URA Realis. The largest unit sold during the period was a 3,842 sq ft apartment on the 38th floor that changed hands for $6.08 million or $1,582 psf.

Sentiment has improved in recent months. From January to March, the project saw only 11 transactions in the secondary market in the price range of $1,130 psf to $1,416 psf. Sales started to pick up thereafter, with 51 transactions for the period from April 1 to June 5 with prices trending higher, ranging from $1,146 psf to $1,582 psf.

As one of the few waterfront sites along the Singapore River, the 43-storey development was highly sought after by foreign and local buyers during its launch in 2005. RiverGate, a joint-venture project by CapitaLand and Hwa Hong Corp, received its TOP in March. In 2007, at the peak of the property market, prices of one of its units soared to as high as $2,701 psf.

Over at Orchard, a unit at Vida sold for more than $2,000 psf. The buyer of a 527 sq ft apartment on the 13th floor paid $1.07 million or $2,029 psf to the developer at the launch of this exclusive condominium. At Scotts Highpark, a 4,208 sq ft unit on the 17th floor changed hands at $8 million or $1,901 psf. The seller had purchased it for $8.05 million or $1,914 psf from the developer in 2006 during the launch.

About 10 minutes away from Orchard Road, along Leonie Hill Road, two leasehold apartments at Horizon Tower were sold at below $1,000 psf. On the 15th floor, a 2,486 sq ft unit changed hands for $2.03 million or $816 psf. On the 13th floor, a smaller unit was sold at $1.82 million or $751 psf. The seller had purchased the unit for $1.135 million or $439 psf in 2003.

While prices and sales volume have moved up, some market watchers warn that the upswing may not be sustainable given a weak rental market and oversupply.

Soure : The Edge – 29 Jun 2009

12.8% increase in average price of 2-bedroom units; firm expects full-year primary market sales to top 2006 figure of 11,147 units

THE average price of freehold non-landed resale private homes in prime districts 9, 10 and 11 increased 11.3 per cent to $1,247 per sq foot in the second quarter from Q1, says DTZ.

This followed a 3.7 per cent quarter-on-quarter (q-o-q) price fall in Q1.

Two-bedroom units posted a 12.8 per cent q-on-q gain in Q2, as their lower quantum prices stimulated interest among people hoping to own prime district property.

But DTZ considers the Q2 price gain a blip supported by buyers’ fears of missing the bottom, pent-up demand and low interest rates – rather than economic fundamentals.

As for primary market sales, the property firm is now projecting that developers’ private home sales for the whole of 2009 are likely to surpass the 11,147 units achieved in 2006, which was the second-highest performance after the 14,811 homes they sold in 2007.

In the first six months of this year, the tally was about 6,700 to 6,900 units.

DTZ’s figures also show the average price of luxurious non-landed resale homes rose 9.6 per cent q-o-q to $2,060 psf in Q2.

Outside the prime districts, the average resale price of 99-year leasehold homes rose 3.2 per cent q-o-q to $573 psf in Q2, as prices had fallen less and there are fewer ’specu-vestors’ in this segment.

Earlier this week, the Urban Redevelopment Authority’s flash estimate showed the overall private home price index declined 5.9 per cent in Q2 from Q1.

Despite DTZ’s figures showing an increase in resale prices of non-landed homes in Q2, DTZ’s head of South-east Asia Research Chua Chor Hoon said: ‘Without a clear recovery in sight for the US and Singapore economies, the price recovery in Q2 2009 is not sustainable and sales volume would be affected if prices continue to rise.’

She noted that average resale prices have fell only 10-35 per cent between Q4 2007 and Q1 2009, compared with the fall of 35-45 per cent from the Q2 1996 peak to the Q4 1998 Asian financial crisis trough.

The number of caveats lodged for resales and sub-sales in April and May this year exceeded that for the whole of Q1 by 70 per cent. The proportion of foreign buyers, excluding Singapore permanent residents, rose from 5 per cent in Q1 to 8 per cent in April and May.

Indonesians and Malaysians accounted for 49 per cent of caveats lodged in April and May by foreigners and Singapore PRs, compared with 40 per cent in Q1.

Sub-sales and resales are secondary-market transactions. Sub-sales involve projects that have yet to obtain a Certificate of Statutory Completion (CSC), while resales relate to projects that have received CSC.

Meanwhile, as new supply came on stream amid waning demand, rents continued to fall in Q2, although at a slower pace than in Q1.

The average rental value of prime district homes slipped 9.1 per cent to $3.32 psf per month in Q2, after a 16.2 per cent slide in Q1.

Rents for luxury homes were the hardest hit, with a 10.6 per cent decline to $4.65 psf per month – back to their Q4 2005 level.

Source : Business Times – 4 Jul 2009

David Lawrence is, however, bearish on Singapore office market

WHEELOCK Properties (Singapore) CEO David Lawrence is sanguine about the island’s residential market and predicts the luxury segment will be ‘doing very well within two years’.

But he is bearish on the office sector. ‘I don’t know what the policy is, but if I were running the Urban Redevelopment Authority, I would make sure I kept releasing land so that office rents are reasonable and more financial companies relocate to Singapore,’ Mr Lawrence said in a recent interview with BT. ‘So you’re not going to make money buying office buildings now,’ he quipped.

Mr Lawrence, who has a track record of astute property investments, is a chartered surveyor by training. He formerly headed Richard Ellis International in Singapore and Indonesia, and was a founding director of the company’s Thai office.

On Singapore’s residential sector, he said: ‘The mass and mid segments are doing well at the moment. Quality property is the best long-term hedge against inflation. And inflation is definitely going to come in a few years, whether you like it or not, whether governments like it or not.’

Low interest rates are also spurring home sales in the mass and mid-market segments, Mr Lawrence said. ‘The banks have woken up and started lending. They’re not being so ridiculously unrealistic about valuations. They are quite keen to lend to the lower to mid-end of the market at the moment.’

The luxury market is starting to move, but not in such a big way. ‘Sub-sale prices are going up,’ he said. ‘Although there is a bit of over-supply, actually buyers are very focused on certain developers and certain projects. A lot of the supply, people aren’t interested in really because it isn’t good investment-quality product.

‘New entrants into the market who are not developers, like the contractors, for example’, will just have to reduce their prices, he pronounced. BT understands that luxury residential developers are starting to see a trickle of sales above $3,000 per sq ft – after a hiatus of more than six months.

Another factor that is helping to draw home buyers again is ‘a lack of trust in international banks and the financial instruments they are trying to sell’, Mr Lawrence said. As well, the weaker Singapore dollar is making direct property investment attractive for overseas buyers. And there’s a shortage of investment-grade stock in all sectors.

Mr Lawrence notes there haven’t been any large distressed asset sales, due to the generally low gearing of major property companies.

Singapore’s reputation as a well-governed and safe place to live is also a strong pull for foreign buyers. It emerged as the 18th most liveable city in a recent ranking of the 25 most liveable cities by the magazine Monocle. It was the only tropical financial centre in the list, Mr Lawrence said.

On his bearish take on the office market, he said: ‘(Minister for National Development) Mah Bow Tan has managed supply and demand for the office market well in the past 10 years, but everything went up a bit crazy in the past two years and office rents got too high for the long-term development of Singapore as a financial centre.

‘The current crisis has brought rents down to a more reasonable level. My guess is the best way forward for Singapore is to have a reasonably low-cost office sector to attract financial businesses. The government has prepared a lot of infrastructure, land, ready to expand the office market, particularly in the Marina Bay area. The land should be released on a regular basis so we don’t get any more spikes in office rents.’

Grade A office rents here doubled in 2007, but have fallen about 45 per cent since peaking in Q3 last year.

A policy of keeping office rents competitive will create spin-offs for the residential sector ‘because you get more companies coming in to lease or buy’ homes, Mr Lawrence said.

As well, the opening of new offices in Singapore, with an increase in the population, will help generate more sales for retailers and ameliorate the effects of over-supply in the retail property market arising from the completion of new malls.

Source : Business Times – 4 Jul 2009

A YEAR after it started, the recession to end all recessions has yet to hit bottom officially.

But private home buyers in Singapore don’t seem to care. Since February, they have been snapping up almost as many homes each month as during the frenzy of 2007.

The strong demand has caught even property veterans by surprise, and set off furious discussions among property-obsessed Singaporeans.

Their million-dollar question: is this rally for real?

Opinion is divided. For every analyst proclaiming a sunny recovery, there is another warning of a false dawn.

To recap: after a hiatus of several months following the credit crunch last year, the property sector came back to life in February with unexpectedly healthy sales of new condominiums.

Even the stock market collapse in March didn’t deter buyers of new homes, who picked up more than 1,000 units that month for the second time in a row – 10 times what was sold at the low point in October last year. The buying momentum has held steady since then, despite more doomsayers predicting anew each month that the numbers are unsustainable.

Interest in new homes has spilled over to resale homes in the secondary market – which clocked a 70 per cent increase in sales in the second quarter over the first – as well as the harder-hit luxury home segment, where sellers are starting to turn a profit again.

As confidence in the property market builds up, boom times seem to have returned to the showflats. At the recent launch of One Devonshire in Somerset, the two-bedders were so much in demand that buyers had to ballot for them.

Agents for the upcoming Ascentia Sky project in Redhill have begun to take orders – and cheques – even before the showflat opens in the coming weeks.

There is certainly no denying that the property market is faring much better than expected, given that in the first quarter of this year, the economy contracted a record 10.1 per cent and shed the most number of jobs since Sars in 2003.

But some industry veterans, such as Knight Frank managing director Danny Yeo, are reluctant to call the increased buying activity a true rally. Even though sales are up, prices generally are not.

Between April and June, even as buyers returned to the market, the price index for private homes dropped 6 per cent, according to estimates released by the Urban Redevelopment Authority on Wednesday. Prices have now fallen for four straight quarters and are about 25 per cent off their peak last year.

Experts say that demand for private homes is returning precisely because prices have nosedived. They plunged a precipitous 14.1 per cent in the first quarter, the biggest drop in history.

This is a far cry from 2007’s property boom, when some developers raised prices for their projects multiple times in a single weekend.

Some consultants believe the price index is lagging and will show a slight increase when all the second-quarter sales are taken into account at the end of the month. Wednesday’s estimates are mostly based on deals done in April and May.

But even if this happens, the index isn’t expected to keep rising. Analysts say a sustained increase in the price index that develops into a full-blown rally by the end of the year is unlikely.

A more probable scenario is a plateau: prices and sales stabilising at their current levels for the next few months, with occasional moderate dips or increases, until there is more certainty about the economic outlook next year.

Would-be buyers hoping for another crash in the market are likely to be disappointed unless a major shock takes place, such as a delayed economic recovery, a stock market collapse, or the H1N1 virus turning more deadly, analysts say.

In fact, many dire predictions trumpeted by bears have failed to materialise. Fewer expatriates have left the country than expected. Unemployment is below the all-time high in 2003.

Home-owners and buyers are still able to afford their properties, especially as they have lowered their debt levels and increased their savings. The surprisingly low level of mortgagee sales so far this year – half of that during the Asian Financial Crisis – seems to bear this out.

Concern about oversupply of new homes crashing prices have abated in the light of the robust take-up of recent launches. Instead, low interest rates are encouraging buyers to take up mortgages.

The gravity-defying rise in HDB resale flat prices, which hit an all-time high in the second quarter, provides a firm floor for prices of mass market condos and helps support all the other price levels.

On the other hand, sellers who hope to hold out for a marked improvement in prices, could end up waiting a long time.

For one thing, the stock market resurgence appears to be tapering off, as sentiment gives way to the sobering fundamentals of an uncertain economic recovery, underscored by still-rising unemployment in the United States.

Anecdotally, buyers are also still price-sensitive, a further sign of the fragility of their confidence, although more seem willing to jump on the buying bandwagon for fear of rising prices in future.

Demand may also be limited. Most buyers now are owner-occupiers who were shut out of the 2007 market surge and are unleashing their pent-up demand. When this runs out, sellers and developers will be relying on investors and foreigners to pick up the slack, which may not happen as rentals are expected to continue falling with more homes being completed.

Then there is the deferred payment scheme. Properties sold via the scheme reach completion this year and next, and analysts fear some buyers will dump their units when full payments are due.

In the near term – say, six months – the market should be stable, given that supply and demand factors seem more or less balanced at this point.

But Singapore’s sentiment-driven property market has seldom been rational and hardly predictable, as the last six months have shown.

So it ultimately comes down to which typical Singaporean home-buyer behaviour wins out: the panic of being left out of a property boom, or the fear of buying now and being left high and dry if there is a slump.

Source : Straits Times – 4 Jul 2009

To be completed in 2015, it is the second phase of the Downtown Line

WORK started yesterday on the second phase of the Downtown Line (DTL2), which will take commuters through the Bukit Timah corridor to the city centre.

When completed in 2015, the 16.6km long DTL2 will give Bukit Panjang and Bukit Timah residents a direct rail link to the Central Business District (CBD) and Marina Bay.

More than 30 schools with about 60,000 students in all – including Hwa Chong Institution and National Junior College – will also benefit as train stations open near them.

Transport Minister Raymond Lim said at the groundbreaking ceremony yesterday: ‘Those who live, work and go to school in this area will enjoy a completely new way to travel, with convenient connections to every part of the city.’

A dozen stations will be strung out along DTL2, which will start in Bukit Panjang, pass through Bukit Timah and run to Rochor. There, it will link up to the first phase of the Downtown Line, which loops around Marina Bay and the CBD.

Those living and working in Bukit Timah are looking forward to having an MRT station open near them.

Mr Low Meng Hai, the 59-year-old chairman of the Beauty World Merchants Association, said with a laugh: ‘I might sell my car when the new line opens!’

Madam Ong Guat Ngo, 62, who lives in Jalan Jurong Kechil, is pleased that the upcoming Beauty World station will be a stone’s throw from her home.

The retiree now relies on buses to get around. A journey to People’s Park Centre in Chinatown takes her 1-1/2 hours by bus, including waiting time.

When the DTL2 opens, she will take only 40 minutes – less than half the time.

Sections of Upper Bukit Timah Road will be diverted from as early as the fourth quarter of this year; extensive diversions are also expected in Rochor.

The Land Transport Authority (LTA) stressed that the capacity of the roads will not drop significantly because there will be a lane-for-lane replacement in the diverted roads.

The LTA will award four more civil contracts for the DTL2 by September. Six, worth $2.6 billion in all, have been awarded so far.

LTA chief executive Yam Ah Mee said the entire Downtown Line, projected to cost $12 billion, is within budget. Almost $6 billion in contracts have been awarded so far.

Tendering of civil contracts for the third and final phase of the line begins next year. Due for completion in 2016, this section will thread through eastern Singapore, ending at Expo.

Source : Business Times – 4 Jul 2009

REAL estate investment trusts in Singapore or S-Reits will be underpinned by the cashflow resilience of their underlying properties, strong management of operations and capital, and the strength of their sponsors or key shareholders, Standard and Poor’s (S&P) said in a report published yesterday.

Still, in light of the currently sluggish economic climate, S-Reits will have much to contend with as leverage and refinancing risks increase while rents, occupancy rates, cashflows and capital values are on the decline, said S&P credit analyst Allan Redimerio.

‘Most S-Reits have high levels of encumbered assets on their balance sheets – meaning they have little to pledge to banks if conditions worsen.’

‘Given the strong emphasis currently on refinancing risk, we expect S-Reits to continue to assess their options on reducing their financial leverage, as well as increasing the number of unencumbered properties on their balance sheet to provide them with greater financial flexibility,’ said Mr Redimerio.

According to S&P, CDL Hospitality Trust, Parkway Life Reit, Frasers Commercial Trust, First Reit and MacarthurCook Industrial Reit appear to be among the most vulnerable, while CapitaMall Trust, Ascendas Reit, Frasers Centrepoint Trust and CapitaCommercial Trust are expected to be the most resilient against real estate and external shocks.

S&P noted that the government’s decision to increase its share of default risk on certain bank loans to small and medium-sized enterprises will contribute to the recovery of the S-Reits.

Industry watchers have said that more than $4 billion in S-Reit debt is estimated to be due this year for refinancing and a further $2 billion estimated to be due next year.

However, the easing of credit conditions has allowed vital bank funding to flow more easily, aiding the Reits. In an earlier report, UOB Kay Hian cited lower refinancing risks as the reason for its bullish take on the sector.

Source : Business Times – 4 Jul 2009

RETAIL rents continued to fall in the second quarter of 2009 amid economic contraction and new supply, according to a report released yesterday by DTZ Research.

Prime first-storey rents in the Orchard/Scotts Road area fell 0.8 per cent to $39.60 per sq ft per month (psf pm). This was a slower pace of decline, after rents fell 4.8 per cent in Q1. Rents for second-storey space fell 4.5 per cent in Q2 – also less than a 6.4 per cent fall in Q1. Rents in suburban areas fell marginally in Q2, supported by resident catchments. Prime first-storey rents eased 0.6 per cent in Q2 – the same as the fall in Q1.

However, rents in ‘other city areas’ fell more in Q2 than Q1, partly due to new supply that will be completed in the second half of 2009. Prime first-storey rents declined 3.1 per cent to $25.40 psf pm in Q2, more than the previous quarter’s fall of 2.2 per cent. 1.3 million sq ft or 56 per cent of new retail space that will be completed in the rest of the year will be in ‘other city areas’, DTZ estimates.

Anna Lee, associate director of retail at DTZ, said that many retailers and F&B operators have delayed expansion plans or changed their business strategies because of the economic downturn. Some F&B operators have or are considering moving to business parks, where rents are much lower and there is a considerable worker catchment to tap on, she added.

Looking forward, the retail sector will remain under pressure this year because of the downturn in visitor arrivals and the economic contraction, said Chua Chor Hoon, head of DTZ South-east Asia research. ‘Orchard/Scotts Road and other city areas will be more affected due to substantial new supply,’ Ms Chua said.

Other analysts likewise expect retail rents to keep falling this year, with the prime Orchard/ Scotts Road area tipped to be worst hit.

Macquarie Research, for example, said in a June 15 report that it expects prime Orchard Road rents to fall 10-15 per cent this year given new supply coming on stream. For suburban retail rents, a smaller 5-10 per cent year-on-year fall is expected.

‘Historically, retail rent growth is closely aligned with retail sales growth,’ said the firm’s property analysts Tuck Yin Soong and Elaine Cheong.

Source : Business Times – 4 Jul 2009

Always close, but never too close. That is the carrot dangled before extended families buying new condominium units which come with adjoining studio apartments.

Apart from the usual two-, three- or four- bedroom layout options, property developer Frasers Centrepoint Homes has introduced what it calls ‘dual key’ apartments at two recent two projects, Caspian at Lakeside and 8@Woodleigh.

This new layout has a studio apartment attached to a two-bedroom unit and is about 10 per cent larger than a regular three-bedroom unit.

And it has been an unqualified success.

At the recently sold out 8@Woodleigh at Potong Pasir, the 390 sq ft studio apartment comes fully equipped with its own kitchen, bathroom and dining and living areas. It also has its own entrance, which opens up to a foyer that is shared with the 682 sq ft two-bedroom unit.

Frasers’ chief operating officer Cheang Kok Kheong says such units are ’specially conceptualised to promote inter-generational ties within families’.

All 30 units of this new layout at Woodleigh have been sold. Scheduled to be completed in 2013, the project has a total of 330 units, including one-, two-, three- and four-bedroom types.

Over at Caspian, a 712-unit project, all 17 such 2+1 bedroom units are also sold out.

Global investor Simon Yong, 50, bought one such unit at Woodleigh. He nows lives with his wife in a semidetached home at Braddell. When the Woodleigh project is completed, he hopes to move in with his mother, who is in her 90s. She will live in the studio apartment.

‘My wife and I still have our privacy, but we can take care of my mum easily too,’ he says.

CapitaLand is another developer that has offered a similar adjoining unit option to encourage multi-generational living.

Its The Metropolitan at Tanglin contains 29 single units with two entrances. In these apartments, a partition wall can be built to divide the living space.

Another option the development offers for multi-generational living are adjacent separate units. There are 14 pairs of such units, which offer buyers the option of removing the partition between the two units to create a single living and dining area.

The condominium was completed recently. At its launch in 2006, Ms Patricia Chia, chief executive of CapitaLand Residential Singapore, said: ‘Many families today would like to live near to, or with, their ageing parents, while enjoying a certain amount of privacy.

‘We also recognise that every family’s lifestyle needs would change with time. The flexibility that we have built into the unit layouts at The Metropolitan is ideal to meet these needs.’

There is another use for 2+1 bedroom units: rental.

Frasers’ Mr Cheang says: ‘The new layout also gives buyers the option to finance their purchase by renting out the studio component of the unit.’

It is still about four years before they can move in, but buyers of units at Woodleigh that Life! spoke to are already thinking the same way.

Ms Teresa Kwan, a manager in a financial institution who is in her 50s, has bought a 2+1 bedroom unit at Woodleigh. She says: ‘I can live in one and rent out the studio, or I can rent both units out.’

At Lippo Realty’s Newton One, one of the bedrooms in its five-bedroom units comes with its own kitchenette and entrance – ideal for extended families and also rental.

Mr Chris Koh, director of Dennis Wee Properties, says these units are a good option for property hunters, particularly those who are looking to lease out the unit. ‘Both the tenant and the landlord still have their privacy.’

Such apartments are a new trend in the private property sector, but HDB introduced them about two decades ago. In 1987, it launched multi-generation flats, or ‘granny flats’. They comprised a four- or five-room flat with an adjoining studio apartment with a separate entrance. Around 367 units were built in Bishan, Tampines and Yishun.

However, HDB stopped building them ‘as the demand then was not high. The completed multi-generational flats are still available in the resale market’, says a spokesman.

Dennis Wee’s Mr Koh believes that 2+1 units are a hit now because they can generate extra income.

A check with other property developers, such as UOL Group and City Developments, showed that they are not implementing these special two-in-one units in their upcoming projects.

Still, tutor Leah Teo, 35, hopes that more developers will offer such units. ‘I can rent out one unit for extra income, and later on, I can have my elderly parents living next to me,’ she says.

Source : Straits Times – 4 Jul 2009

IT’S hard to believe, but more than 10 years have passed since a new mall opened on Orchard Road. Naturally, the stakes are high for Orchard Central, the new shopping and dining destination which opens in the Somerset precinct this week.

Long-starved of fresh and exciting options on Singapore’s prime shopping belt, locals and tourists alike are looking for something distinctly different – will the mall consistently please, or turn out to be a hit-and-miss?

On its part, Orchard Central’s developer, Far East Organization, has pulled out all the stops as far as creating uniqueness is concerned, positioning the 12-storey mall as the ‘Centre of New’.

There are new retail concepts, brands, architecture and designs, and a new approach to shopping, dining and service – all aiming to provide new experiences for the shopper, whose needs are at the centre of it all. International establishments making their debut include Japan’s Yamano beauty retailer, popular English shirt-maker, TM Lewin, well-known Japanese eatery Ootoya, and Duo Le – a Chinese restaurant specialising in cold dishes and cuisine from the Shaanxi region.

Then there’s Orchard Central’s largest F&B tenant, Heaven’s Loft – a new and unique all-day dining and dessert concept from the team behind the Ben & Jerry’s outlets in Singapore.

For easy navigation, related shops and dining outlets are grouped in clusters according to distinct lifestyle experiences. These include fashion, food, pampering, and active lifestyles.

In addition, renowned Japanese interior designer Takashi Sugimoto of Super Potato has created a visual feast using lighting, design and creative features on the dining levels along the open-air Verandah on levels 7 and 8 and the Rooftop on levels 11 and 12. Some 30 per cent of the floor space at the topmost floor on level 12 is outdoors, including a public Rooftop Garden. Incorporating indigenous plants, water features and infinity pools, the sky-high dining experience under the stars will open later this year.

Shopping and dining aside, Orchard Central is home to the world’s tallest indoor Via Ferrata climbing wall, the first-of-its-kind in Asia.

And of course, there is the much-talked about collection of contemporary artworks specially commissioned for the mall. Costing over $9 million, this is the largest permanent public commission for a single property in Singapore. With installation art – including sculpture, automation art, interactive digital art, light and sound installation art and multimedia art – integrated into the mall’s architectural and design elements, visual art is thus extremely accessible and non-threatening even to those new to the form. One can expect to see works by internationally renowned artists.

Topping off the entire experience is a pioneering concierge service that truly focuses on the shopper – service staff who will fan out from the mall’s information desk, roaming every floor to help shoppers with information, directions and even restaurant reservations.

Orchard Central is open till 11pm daily, with its Rooftop Garden and air-conditioned shopping street, Discovery Walk, accessible 24/7. Combined with its late-night dining options, it’s a panacea for those who’ve long wished for Orchard Road malls to open till late.

‘Looking at the bigger picture with our new and existing neighbours, mid-town Orchard Road presents an exciting new shopping precinct in the near future,’ says Susan Leng, Far East’s director, retail management, Retail Business Group.

Climbing an indoor wall on Orchard Road, dining at a rooftop verandah and getting assistance without having to look for the assistant – these are not the usual mall experiences. But if the newest shopping destination to open in Singapore’s beloved shopping street in over a decade succeeds in what it set out to do, then Orchard Central will indeed be the ‘Centre of New’.

Source : Business Times – 4 Jul 2009

WHILE shoppers can flex their muscles by choosing where to spend their hard-earned cash, shareholders are showing that they can force mall managers to stay ahead of the retail curve.

It is no coincidence that among the first malls to embark on renovations were those backed by listed companies or real estate investment trusts (Reits) – in other words, entities with investors demanding a return on their money.

The need to meet dividend payments and distribution targets for their unit holders and investors have driven managers to smarten up their malls, improve the store mix – and raise rents.

Wisma Atria, built in 1986, was first to undergo an extensive revamp in 2004 to keep it up to speed with the fast-changing retail mix on Orchard Road.

The mall is 74.23 per cent owned by Starhill Global Reit of Malaysia’s YTL Group.

It was the first mall to take advantage of an Urban Redevelopment Authority (URA) scheme that allowed it to have a ‘pop-out’ glass facade, as well as external escalators taking shoppers directly to Food Republic on the fourth floor.

Mr Kevin Chee, senior vice-president of asset management at YTL Pacific Star, told The Straits Times: ‘Wisma Atria boasts 123m of prime Orchard Road street frontage, and we are actively exploring ways to heighten the visibility of the stores to derive maximum mileage for our tenants.’

In fact, Starhill announced last week it was looking into raising $337.3 million via a rights issue and using some of the money to add up to 40,000 sq ft of retail space to Wisma Atria. It plans to push the frontage even further out towards Orchard Road and convert some carpark space into retail space.

Ngee Ann City next door, which is 27.3 per cent owned by Starhill, has also had a finger on the retail pulse since it opened in 1993.

Long before the latest round of rejuvenation started, it had duplexes for jewellery brands Tiffany, Bulgari and Cartier.

In December 2007, it announced that another two of its luxury tenants – Louis Vuitton and Chanel – were going to double the size of their Orchard Road-facing flagship stores at the Takashimaya Shopping Centre.

A spokesman for Toshin Development Company, a Takashimaya subsidiary that manages speciality shops at the mall, said: ‘Duplexes are not new for us, but an ongoing development according to tenants’ needs and desires for expansion.’

And Paragon Shopping Centre, owned by Orchard 290, a subsidiary of Singapore Press Holdings, is no laggard either.

The mall, which was merged with the old Promenade in 1996, is prized as a hot spot for international designer brands such as Gucci, Bottega Veneta, Tod’s, Prada and Ermenegildo Zegna.

In October, it will unveil duplex stores for five luxury labels, including a five-storey facade for Gucci.

While brands with deep pockets are splashing out at these malls, other retailers struggling to maintain their bottom line in the recession have accused mall managers of ’squeezing them for higher rents, even though they cannot afford to pay them’.

YTL’s Mr Chee, however, retorted: ‘Like any other business concern, we have a duty to our owners to deliver returns.’

Reits collect rental income from mall tenants and distribute it to unit-holders.

Frasers Centrepoint Trust said: ‘While we have a responsibility to ensure adequate returns to shareholders, it is certainly not in our interest to see our tenants fail. Rental increases are by no means unduly onerous, as they usually work out to annual increases of 2 per cent to 3 per cent, well in line with the national inflation rate for the past three years.’

Mr Gabriel Yap, senior dealing director at DMG & Partners Securities, said: ‘Reits are no different from normal property developers as landlords. If a Reit consistently underperforms as a landlord, other Reits will be very happy to swallow it.’

Clearly, no one wants to be left behind.

As Mrs Sng Ngoi May, director of Orchard 290, which manages Paragon, put it: ‘We are just moving with the times. We don’t take our customers for granted and have to tell them we’re not dated.’

Source : Straits Times – 4 Jul 2009

THREE sites have been added to the government’s industrial land sales programme for second-half 2009, which was launched yesterday by the Ministry of Trade and Industry (MTI).

The three sites have been added under the reserve list to continue to meet potential demand for industrial land, MTI said. This brings the total number of industrial sites on the reserve list to nine.

The confirmed list, on the other hand, remains suspended.

‘In view of current economic uncertainties, MTI will continue to suspend the confirmed list for the second half of 2009,’ the ministry said in a statement. ‘This will provide flexibility for the market to adjust supply in accordance with the current economic conditions.’

Market watchers said that the continued suspension of the confirmed list was expected. Using the reserve list only means the market will have the final say on when a site is released.

Under the reserve list system, the government puts up a site for public tender only if it receives an application from a developer who commits to bid for the site at or above the minimum price acceptable to the government.

‘This is in line with the government’s aim of letting developers decide if they are interested in a site and letting them trigger the sites they like,’ said Savills Singapore managing director Michael Ng.

The three new sites on the reserve list are at Woodlands Avenue 12, Kaki Bukit Avenue 4 and Ubi Road 1/Ubi Avenue 4. In addition, six sites from the first-half 2009 reserve list have been carried forward to the second-half list.

The nine sites on the reserve list have a combined area of about 19 hectares.

It is unclear if the demand for these will be strong, analysts said. Singapore experienced a sharp drop in industrial investment sales in the first quarter of this year, with only a few isolated transactions completed.

However, sentiment picked up in the second quarter. Data from CB Richard Ellis (CBRE) showed there were at least six investment transactions in the industrial sector in Q2 – totalling $58.9 million. Most of the buyers were end-users, CBRE said.

Singapore-listed real estate investment trusts (Reits), which bought up a significant amount of industrial property during the boom in 2007, are still holding back on acquisitions this year as dividend yields have increased significantly and it would be extremely challenging to make purchases that are yield accretive. Obtaining finance also continues to be difficult.

Source : Business Times – 3 Jul 2009

YI Kai Group and Fission Group, the duo that recently paid $71 million for VTB Building in Robinson Road, are said to have joined forces to buy Aviva Building in Cecil Street and next-door Cecil House from insurer Aviva for a total of $101 million.

Aviva is understood to be selling the assets that it considers ‘non-core’.

Market watchers reckon Fission and Yi Kai hope to redevelop all three CBD office blocks they have snapped up lately into residential projects – subject to official approval.

The three sites are zoned for commercial use with an 11.2-plus plot ratio and 35-storey maximum height, according to the Urban Redevelopment Authority’s Master Plan (MP) 2008.

In October last year, URA lifted its ban on converting office blocks in the Central Area to other uses.

Aviva and VTB buildings are freehold. Cecil House is on a site with a remaining lease of 71 years.

Analysts suggest that Yi Kai and Fission’s plans to redevelop the Cecil House plot into apartments will be subject to getting a lease top-up to 99 years from the state. ‘Otherwise, they may redevelop the property to a new office block,’ a market watcher suggested.

BT understands the freehold Aviva Building is being sold for about $65 million, which translates to roughly $960 per sq ft of existing net lettable area (NLA).

Based on the site’s 11.2-plus plot ratio under MP 2008, the unit land price works out to about $590 psf of potential gross floor area (GFA), excluding any development charge (DC) that may be payable.

Cecil House was priced at $36 million or about $710 psf of NLA in the sale to Yi Kai and Fission.

It is believed there is untapped potential to develop a further 20,000 sq ft GFA each for the Cecil House and Aviva Building plots.

The earlier sale of VTB Building for $71 million worked out to $1,061 psf of NLA and a unit land price of about $700 psf per plot ratio – based on an 11.2 plot ratio and assuming no DC is payable.

Jones Lang LaSalle’s director of investment sales Stella Hoh is understood to have brokered the sale of Aviva Building and Cecil House. JLL is also the marketing agent for two office floors at Parkway Parade that Aviva is looking to sell.

BT understands both buildings are currently almost 100 per cent occupied. Aviva uses about 60 per cent of Aviva Building.

Source : Business Times – 3 Jul 2009

EAGER shoppers may be on tenterhooks as they wait for Ion Orchard to fling open its doors on July 21, but they’ll also be pleased to know that as the Orchard Road revamp unfolds over the coming months, there’ll be enough new malls to keep them busy for a pretty long time.

In fact, any shopper with Sloane Ranger aspirations can strut their stuff on Knightsbridge – London’s most prestigious address – without having to fly to the United Kingdom, thanks to a chic four-storey retail podium opening next year.

The 83,000 sq ft luxury shopping destination that will house between eight to 10 luxury brands will be integrated within an $80 million makeover of the former Park Hotel Orchard (across Bideford Road from Paragon Shopping Centre).

‘The Knightsbridge branding is in line with our vision for Grand Park Orchard to become synonymous with fashion and luxury,’ says Allen Law, director of Park Hotel Group.

‘Our unique concept and strategic location has attracted many sought-after international brands and we are confident that Grand Park Orchard is set to become an iconic landmark on Orchard Road.’

Meanwhile, art lovers dreaming of the Tate Modern or Saatchi Gallery can find distraction by marvelling at the $9 million worth of contemporary art that Far East Organization has showcased in the mall.

The collection that features the creations of renowned artists such as Gary Carsley, Hans Peter Kuhn and Inges Idee is the largest permanent public commission by a developer for a single property in Singapore.

Artistic nightowls will also be able to enjoy the mall’s 24-hour public rooftop garden that will be transformed into a sculptural haven, showcasing a series of 11 wire sculptures by local sculptural artist, Victor Tan.

Not to be outdone, ION Orchard will also be contributing to the local artscape through ION Art – a structured art and design programme which introduces new and multi-media art outside the traditional museum venue, into the integrated mall experience.

The initiative includes permanent and changing signature sculptural and media installations positioned throughout the mall, as well as a spectrum of art-based events and exhibitions held throughout the year in the ION Art gallery (a dedicated art space in excess of 5,600 sq ft), and at other locations in the mall.

With all these in the pipeline, in these tough economic times, rather than waste money travelling abroad, a quick visit down Orchard Road might just be a cool, affordable alternative.

Source : Business Times – 3 Jul 2009

THE Ministry of Trade and Industry (MTI) will continue to suspend the confirmed list for its industrial government land sales (GLS) programme for the rest of the year.

This would provide flexibility for the market to ‘adjust supply in accordance with the current economic conditions’, it said in a statement yesterday.

But the MTI has put three new sites on its reserve list to meet potential demand for industrial land.

Under the reserve list system, a site is offered for public tender only if a developer commits to bid at an acceptable price.

The three sites are a 3.2ha plot in Woodlands Avenue 12, a 2.99ha plot in Kaki Bukit Avenue 4 and a 1.24ha plot in Ubi Road.

All three have 60-year leases and are estimated to become available in the last quarter of this year.

In the first half of the year, two reserve list sites – in Woodlands Industrial Park E5 and Kaki Bukit Road 2 – were triggered.

The Woodlands plot went up for tender recently when an unnamed applicant undertook to bid at least $12.5 million or $18.57 per sq ft of potential gross floor area.

This tender closes next Tuesday.

Mr Colin Tan, Chesterton Suntec International’s head of research and consultancy, said the MTI’s announcement yesterday is unsurprising given the uncertain climate, but he added that buyers are starting to emerge.

‘There’s interest in industrial properties, especially from owner occupiers who want to own their own business space,’ he said.

Perhaps the perception is that prices are more reasonable and lower than at the peak, he added, suggesting that more industrial sites may be activated for tender before the end of the year.

The reserve list for the second half of the year comprises nine sites with a total area of 19ha, said MTI.

Source : Straits Times – 3 Jul 2009

WE ARE a small- and medium-sized enterprise (SME) located in a building owned by the Central Provident Fund (CPF) Board. Like many companies, we are constantly examining ways to manage our costs that will allow us to retain our valuable team members in this time of economic upheaval.

I was pleased to read the news earlier this year that a number of other government landlords (HDB, Singapore Land Authority and JTC Corporation, among others) had offered their tenants a 15 per cent rent rebate from Jan 1 to Dec 31, providing them with some relief.

Understanding the consistency and transparency that exists here, I anticipated a similar announcement from the CPF Board, yet none was forthcoming. To its credit, it passed on the 40 per cent tax rebate without us asking. However, this equates to only a 4 per cent reduction in our rent.

We queried the CPF Board via e-mail on April 3, asking if the 15 per cent rent rebate would be extended as other government landlords had done, but received no response. Two weeks later, we called the CPF Board, and were told the request was under review.

On May 6, I e-mailed the CPF Board again, and on May 8 received a response that it had a number of properties under its portfolio and the review would take some time. Almost two weeks later, we called again to check the status and were told there was no response from management and were given the deputy director’s name and address to contact.

On May 20, I sent our request to the deputy director and received a response on May 25, stating that still more time was needed to collate and review the figures. I was assured my request would be considered and we would be informed ‘in due course’. I responded with some questions and an alternative solution on May 26, and I am still waiting for a response, more than one month later.

It has been more than 13 weeks since my initial e-mail, and more than four weeks from the CPF Board’s last response. I am not clear why this decision is taking so long to make, and the unresponsiveness of our landlord is disheartening. The year is half over, and while other government tenants have got six months of relief, we are still waiting for a decision from our landlord.

Steven Stearns

Source : Straits Times – 3 July 2009

CEL Development is launching the remaining units of its Oasis @ Elias condominium at Pasir Ris on Saturday.

Half of the 142 units previewed have been sold, at an average price of S$670 per square foot.

The units that have been sold included six of nine penthouses in the property.

Marketing agent CB Richard Ellis said HDB upgraders made up 80 per cent of the buyers.

The strong take-up rate reflects the current popularity of mass market private property among homebuyers.

The recently launched 8 @ Woodleigh condominium at Potong Pasir was fully sold within two weeks, while Vista Residences in Balestier has also seen a strong take-up rate for the units launched so far.

Oasis @ Elias is a 99-year leasehold property, and comprises six blocks of two to five-room apartments.

Source : Channel NewsAsia – 2 Jul 2009

While several new malls are being built along Orchard Road, Meritus Mandarin Hotel has been quietly renovating its shopping wing.

Mandarin Gallery will re-open in December, competing with new entrants on the prime shopping district for the retail dollar.

Meritus Mandarin Hotel is turning its lobby, ballrooms and function rooms into retail space – offering four floors of shopping.

The new mall will have a net lettable area of about 130,000 square feet. It is being marketed by OUE Group, which is seeing strong interest from retailers.

Patrina Tan, senior vice-president of retail, marketing and leasing, OUE Group, said: “We are slightly over 90 per cent leased in the mall. Being intimate-sized, we need to take a focus in the positioning and product mix that we offer as a shopping mall.

“In our brand mix, we will have reputable international luxury brands like Emporio Armani, Mont Blanc, D&G, Marc by Marc Jacobs, Y3, which will be a new entry to Singapore, (and) jewellery brands like Maboussin. These are some of the brands that you will find in Mandarin Gallery when we open.”

And what used to be a carpark outside the hotel will also be transformed into a pedestrian walkway.

Mandarin Gallery is well aware of the competition it faces, with three new, large malls opening along the same stretch of Orchard Road.

Tan said: “Based on the new projects coming on stream, all within this quarter to the end of this year, I personally see all the malls have carved out their own niche in terms of positioning and offering for different market segments.

“Mandarin, because it is an intimate-sized mall, our whole intent and purpose when we decided on the mix and positioning was to look at our immediate adjacencies in this junction – what are their success factors and who they already have. And what we try to do is to complement it, versus going head on in terms of competition.”

Mandarin also plans to target a niche group of customers – the affluent and well-travelled younger generation.

Tan said: “We target the segment of the market where we feel there is a gap – the younger, affluent, well-travelled and discerning (shoppers)… I suppose that’s the difference for us.”

In the past, the shops at Mandarin catered to hotel guests, but the new gallery marks a change in the hotel’s business strategy.

Tan said: “In the past, I must say the owners never really saw retail as a key component for the property. With the size of 60,000 square feet, it was mainly to just cater to the needs of hotel guests. As such, the tenancy mix was a bit of everything that would provide convenience to the hotel guests.

“The decision was made some time in early 2006 or so when owners felt it would be a good opportunity to look at maximising the value of the property. Because what we have here, the Meritus Mandarin Hotel, is situated on a very prime location.”

Source : Channel NewsAsia – 2 Jul 2009

Global luxury retailer Louis Vuitton has said it is in discussions to open a store at one of the two upcoming integrated resorts in Singapore scheduled to open next year.

This was revealed at a preview of its latest global store, which will open at ION Orchard on Friday.

Jean-Baptiste Debains, president of Louis Vuitton Asia Pacific, said: “We’re looking at it seriously. No decision has been taken now, but for sure it is an exciting project.

“We believe that Singapore has a real role to play as a hub for Southeast Asia in retail, and in luxury retail in particular.”

The store at ION Orchard is Louis Vuitton’s first and largest global store in Southeast Asia, and only its second in the world to showcase Louis Vuitton’s full range of products, including shoes, watches and its trademark leather goods.

Louis Vuitton has three other stores in Singapore – Ngee Ann City, Raffles Hotel and DFS Scotts Walk – but they do not have its full range of products.

The retailer has some 77 stores across the Asia Pacific region, with another five stores slated to open in the region later this year.

Source : Channel NewsAsia – 2 Jul 2009

An increasing number of people have been taking on green initiatives, including companies.

But what about cities?

The World Bank has just launched its Eco2 Cities programme which proposes a set of guidelines that will help cities and governments move in the right direction. The programme is aimed at encouraging cities to think of longer term, sustainable options.

The World Bank said if developing economies continue to expand at the pace of developed cities, it will take the equivalent of four planet earths to sustain the growth.

But if every city adopt sustainable practices such as economical travel options, water resource management and quality public housing, they can potentially save billions of dollars each.

Arish Dastur, co-team leader, Eco2 Cities, The World Bank, said: “What we hope to achieve, I guess, is that 30 or 40 years down the line, when we look back at the urbanisation that’s happening in the cities of developing countries, we would see that these followed models and followed examples, are more sustainable and that these cities are now benefiting because they took this action. In a nutshell, we would really like cities to be ecologically and economically sustainable.

Over in China, experts said now is an opportune time to invest in sustainable development.

A number of Singapore consortiums have come together to develop more sustainable cities in one of the world’s most rapidly developing countries. Among them are the Tianjin Eco city, and the US$50.5 billion Singapore-Nanjing Eco High-Tech Island project.

Globally, countries are continuing to push for more sustainable options. The US has just approved a legislation to reduce the emission of carbon dioxide and other greenhouse gases by 17 per cent by 2020.

This is slightly higher than the 15 per cent proposed by President Obama, but lower than the initial target of 20 per cent.

The legislation has also set longer term target of pollution reduction goals of 42 per cent by 2030 and 83 per cent by 2050.

Source : Channel NewsAsia – 2 Jul 2009

Singapore’s government said on Thursday it will continue to suspend the sale of land on its ‘confirmed list’ in the second half of 2009 due to economic uncertainties.

The government did, however, add three sites to its ‘reserve list’, increasing the number of land parcels that may be sold to nine from six.

Singapore will only release a site on its ‘reserve list’ for sale if an interested party submits an application for the site at a price that is acceptable to the government.

Source : Business Times – 2 July 2009

The government will introduce three new sites in its industrial land sales programme for the second half of the year.

The Trade and Industry Ministry says this is to meet potential demand for industrial land. With the addition, there will be nine sites on the Reserve List.

The three new sites are parcels at Woodlands Avenue 12, Kaki Bukit Avenue 4 and Ubi Road 1/Ubi Avenue 4.

The nine sites on the Reserve List cover a total area of some 19 hectares.

Under the Reserve List, the government will only release a site for sale if an interested party submits an application for the site to be put up for tender with a minimum purchase price offer that is acceptable to the government.

The government will, however, continue to suspend the sale of land on its Confirmed List in the second half of 2009 due to economic uncertainties.

Source : Channel NewsAsia – 2 July 2009

Location: Balmoral Road (District 10)
Tenure: Freehold
Site Area: 102,183 sqft
Expected Completion: June 2014
Total Units: 85
Unit Types:
2 bedroom ~ 1,324 sqft (20 units)
3 bedroom ~ 1,636 – 2,809 sqft (31 units)
4 bedroom ~ 2,174 – 2,745 sqft (29 units)
Penthouse ~ 3,509 – 6,168 sqft (5 units)

Preview soon, email lushhome@gmail.com or SMS +65 9631 8037 with the following to register your interest:

Volari / Name / Contact # / Unit Type Interested

URA flash estimates show 5.9% fall but many expect final showing to be better

Singapore’s private home prices fell for a fourth straight quarter in Q2 2009 – but the marked slowdown in the rate of decline shows that the residential market here is recovering, analysts said.

The private residential price index fell 5.9 per cent in the second quarter, according to flash estimates from the Urban Redevelopment Authority (URA) yesterday. By contrast, the index fell 14.1 per cent in Q1.

The continuing fall in the index caught many analysts by surprise, as anecdotal evidence showed that private home prices started climbing again in the second quarter.

‘The decline is surprising as prices have picked up in the latter part of the second quarter, especially in the prime districts of 9, 10 and 11,’ said DTZ’s head of South-east Asia research Chua Chor Hoon.

Echoed Li Hiaw Ho, executive director of CBRE Research: ‘This smaller decline in the price index is contrary to the present market perception where actual price levels in the second quarter were known to be more than 10 per cent above those in the first quarter.’

CBRE’s data showed that the median price registered in the second quarter for new 99-year leasehold projects was $788,000 – some 13.2 per cent higher than the median of $696,000 in Q1. For new freehold non-landed properties, it was $928,000 – 26.6 per cent higher than the first quarter’s $733,000. Some 3,800- 4,000 new homes were estimated to have been sold in Q2, 50 per cent more than the 2,596 units sold in the first quarter, the firm said.

DTZ’s Ms Chua pointed out that URA’s flash estimates are based on transaction prices from caveats lodged during the first ten weeks of the quarter, while the buying frenzy gained pace in June. ‘I expect the final price index to fall less or show some increase when more caveats in June are included in the computation of the index,’ she said.

A URA spokesman said that while some developers had started raising prices recently, the extent of price increase quarter-on-quarter was small and pertained to selected projects.

‘On the other hand, more projects had seen a fall in prices over Q2 2009,’ said the spokesman. ‘Hence, overall prices in Q2 2009 as reflected by the flash index fell in comparison with Q1 2009.’

The revised index (which will be out on July 24) will capture caveats beyond the first 10 weeks of the quarter.

Meanwhile, the slower pace of decline for private home prices was seen across the whole island.

In Q2, prices of non-landed private residential properties decreased 6.6 per cent in the core central region (which includes the prime districts, financial district and Sentosa Cove), 6.3 per cent in the rest of central region, and 2.6 per cent in the outside central region (which is a proxy for suburban mass-market locations).

In comparison, in Q1 2009, prices fell 16.2 per cent in the core central region, 17 per cent in the rest of central region and 7.3 per cent in the outside central region.

The improved sentiment was also evident in the resale prices of Housing and Development Board (HDB) flats.

The HDB resale price index, which fell for the first time in Q1 2009 after nine straight quarters of growth, also recovered somewhat to climb 1.2 per cent in Q2. The resale price index fell 0.8 per cent in the first quarter.

‘This price rebound shows that demand for HDB flats is still very strong despite current economic challenges,’ said Eugene Lim, ERA Asia Pacific’s associate director.

ERA, which says it has a 45 per cent market share of the HDB resale market, observed that its transaction volume surged some 52 per cent in Q2 over Q1.

Buyers are returning to the HDB market because sellers have become more realistic about asking prices – especially those selling five-room and executive flats, analysts said. Rather than holding out for higher cash-over-valuation (COV) amounts, most are now willing to sell at valuation or with a slight COV.

Analysts expect the property market recovery to continue – but cautioned against over-exuberance.

OCBC Investment Research analyst Foo Sze Ming said that property prices in Singapore are unlikely to surge to 2007 levels, even with the current recovery.

Then, prices were boosted by global real estate funds that bought up homes here for investment. ‘Since the economic crisis is still ongoing, I doubt that there will be that much interest from funds in the Singapore property market to drive prices up to 2007 levels this year,’ Mr Foo said.

‘We retain our cautious outlook for the Singapore residential market,’ said Nomura analysts Tony Darwell and Min Chow Sai in a June 29 report.

‘In our view, the directional trend in the market will be driven by the competing forces of inventory clearance and buyers motivated by current ‘value’ rather than expectations of a sustained recovery in asset prices.’

The analysts see the likelihood of a W-shaped recovery in asset prices, rather than their previous expectations of a U-shaped recovery, the note said.

Source : Business Times – 2 July 2009

PRIVATE home prices slowed their downward slide in the second quarter, with suburban homes helping to hold up the market.

The Urban Redevelopment Authority (URA) announced yesterday that its initial estimates showed a 5.9 per cent fall in private home prices from April to last month, following a record 14.1 per cent slide in the first quarter.

Some property experts yesterday expressed surprise at the larger-than-expected drop. And with the recent strong demand, they are expecting to see a much smaller fall in four weeks’ time, when final second-quarter figures are released.

A few are even expecting to see a small price rise by then because of last month’s buying craze, which saw project launches attracting rising numbers of investors and speculators.

But given that the current frenzy is being whipped up against a still-weak economic backdrop, more analysts are turning cautious, saying it is unsustainable.

Yesterday, the URA reported prices of non-landed homes in the suburban areas falling just 2.6 per cent in the second quarter, compared with a bigger 6.6 per cent slide in city-centre prices and a 6.3 per cent decline in city-fringe prices.

The smaller mass-market price fall reflected the strong buying support from upgraders in the HDB market, where resale prices reversed a marginal fall to rise by 1.2 per cent in the second quarter.

The stock market rally, coupled with strong liquidity, has resulted in a surge in second-quarter new home sales. CBRE Research estimated that 4,000 new homes were sold – more than 50 per cent above the 2,596 units sold in the first quarter.

The volume lent support to home prices and, in some cases, allowed developers to raise their prices when supply was tight, it said.

The second quarter also saw more new launches at higher price levels because they were located either on the city fringe or in prime districts, CBRE Research added. These include Martin Place Residences, The Wharf Residence, One Devonshire and the sold-out 8@Woodleigh.

CBRE Research executive director Li Hiaw Ho said the 5.9 per cent decline in private home prices is ‘contrary to the present market perception’ as actual price levels in the second quarter are known to have risen more than 10 per cent from the first quarter.

DTZ head of South-east Asia research Chua Chor Hoon described the fall as ’surprising’ because prices picked up around last month – especially in the prime districts of 9, 10 and 11.

Average home prices were still relatively flat in April and May – some developments saw price increases, while others saw price falls – she said. But last month, resale home prices rose from 3 per cent in the mass-market segment to as much as 11 per cent in prime areas, she added.

‘Going forward, developers are likely to test the market with gradual price increases. Should the current momentum hold, we can expect private property prices to increase by 5 per cent to 8 per cent in the second half of the year,’ said ERA Asia-Pacific associate director Eugene Lim.

While local buyers are now supporting the market, more foreign investors may come when the integrated resorts open, he added.

Colliers International director for research and advisory Tay Huey Ying thinks the strength of pent-up demand should not be underestimated as new home sales had sunk to a low of 4,264 units last year – half of the annual average of about 8,500 new units since 2000.

Home sales could remain robust in the second half of this year, possibly reaching 12,000 units or more. This will hinge on price rises not exceeding 5 per cent for mass-market homes and 10 per cent for higher-tier homes, as buyers remain price sensitive in view of the absence of economic expansion and growth in employment and personal income, she said.

If the positive buying mood continues, the third-quarter price index may show a rise, said OrangeTee’s executive director (residential), Mr Steven Tan.

Others, like Ms Chua, think the final second-quarter index may already show some increase when more June caveats are included in the computation of the index. But she thinks this could be a ‘temporary blip’ with resistance setting in at some levels and prices possibly stagnant or falling from as early as the the third quarter onwards.

POSSIBLE PICKUP

‘Should the current momentum hold, we can expect private property prices to increase by 5 per cent to 8 per cent in the second half of the year.’ – ERA Asia-Pacific associate director Eugene Lim

Source : Straits Times – 2 July 2009

PRICES of HDB flats have staged a surprising comeback, reversing a first-quarter dip of 0.8 per cent to rise 1.2 per cent in the second quarter and reach a historical high.

Flash estimates from the Housing and Development Board (HDB) released yesterday show the resale price index rising to 140 – a record level not seen since the current index started in 1990.

It beats the previous record set in the fourth quarter of last year when it hit just over 139.

Market analysts said they were caught off-guard by the turnaround, as many had been predicting 2 to 10 per cent declines in HDB resale flat prices for this year after a descent began in the first quarter – the first one since 2006.

Yesterday’s numbers have changed expectations, with analysts reversing their forecasts for HDB flat prices to hold or increase by up to 5 per cent this year.

Industry observers attribute the latest surprise figures to three factors.

First, talk of an economic recovery has gathered momentum, backed by the recent stock market rally and brisk private property sales. This has slowed the slide in private property prices islandwide.

Flash figures capturing sales prices in the first 10 weeks of the quarter, released by the Urban Redevelopment Authority yesterday, show prices falling 5.9 per cent in the second quarter, compared to a 14.1 per cent decline in the previous quarter.

The marked slowdown in the price decline is in line with rising transaction prices evident since the strong rebound in home sales since February, said Colliers International’s director for research and advisory, Ms Tay Huey Ying.

More bullish sentiment, coupled with the strength in HDB resale prices, has supported the private market, say analysts.

High HDB valuations is another key factor. HDB upgraders – buyers with HDB addresses buying private property – have been able to sell their units at high valuations and for tidy profits to fund private property purchases.

Banking executive Vic Cheow, 28, is one such HDB upgrader who recently sold a four-room HDB flat to buy a three-bed condominium unit in Jurong.

Due to the high valuations, buyers do not need to dig deep for upfront cash – otherwise known as cash-over-valuation – to purchase resale flats.

‘We found selling at a profit easier as a result of this,’ said Mrs Cheow.

ERA Asia-Pacific associate director Eugene Lim reports that the agency, which accounts for more than 40 per cent of the HDB resale market, saw transaction volumes surge 52 per cent in the second quarter compared to the first.

‘The feeling in the second quarter is the recession hasn’t been as bad as it seems,’ said Mr Lim. Many sellers have become more willing to negotiate and are realistic, especially those selling larger flats, he added.

The third factor, flagged by Chesterton Suntec International head of research Colin Tan, is that demand far outstrips supply. HDB launched 7,793 new flats last year and will launch another 3,700 in the first nine months of this year.

‘HDB may have ramped up the supply of new flats recently, but it’s not enough and it takes too long,’ said Mr Tan. ‘There is still a lot of pent-up demand from a needs-based group of people. And they have no choice but to pay high prices because they cannot wait.’

A Credit Suisse report released recently notes that total public and private housing supply for 2008 to 2012 is 16,000 on average per year – 42 per cent lower than the 10-year historical average.

‘This does not look excessive versus the annual average 24,000 household formations or marriages,’ said the report.

But, added Mr Tan, it seems ‘unnatural for prices to rise against the fundamentals of the economy’, which is still in recession.

More detailed public and private housing data for the second quarter is set to be released at the end of this month.

Source : Straits Times – 2 July 2009

The property rush continues to grab the headlines with queues at new launches and crowds at show flats. Perhaps a sobering reminder would be the still declining prices based on the Urban Development Authority’s (URA) flash estimates released earlier this Wednesday. The price index for private residential property is still falling, albeit at a slower rate. Overall residential prices fell by 5.9% in 2Q09 (q-o-q) compared to 14.1% decline in the previous quarter.

Prices declined by 2.6% outside the central region (representing the mass market), by 6.6% in the core central region (Orchard Road and its environs), and 6.3% in the rest of the central region. These declines were markedly slower than the 7.3% (outside central region), 16.2% (core) and 17% (outside central region) declines in 1Q09.

And some analysts remain skeptical about signs of a recovery in the physical property market. “I am cautious about the renewed interest in the Singapore property market” says Singapore-based Thomas Kraegi, head of macro-economic research for Asia-Pacific at UBS. “I’m surprised by the activity,” he admits. He puts it down to price cuts.

“Transactions are being driven by domestic buyers. Foreigner are absent,” he adds. This is a marked difference to the gains in 2006 and 2007, where foreigners figured largely in driving up prices in the luxury segment. What’s more, Kraegi is expecting unemployment to get worse with 30,000 to 40,000 people losing their job as a base case scenario over the whole (recessionary) cycle so its not likely that more people will keep jumping on the property buying bandwagon.

Nomura Research in a report released on Wednesday, concurs, saying that a faltering economy puts “further downside risks to rents, tempering current optimism (in part driven by the buy/rent trade-off) and subsequently investor/end user demand and asset price expectations.” Besides rising inventory, weak residential leasing demand and lower rents fundamentally are likely to continue weighing on underlying asset prices, the report states.

“Our sensitivity analysis suggests that stocks have simply run too far, too fast even assuming an aggressive up-tick in residential property prices from 2H09 through to 2011” the report adds. “Consequently, we reaffirm our bearish stance on the developers, and retain our reduce calls on CapitaLand, City Developments and Keppel Land.”

Over at Kim Eng Research, Wilson Liew sounds more upbeat. He singles out Wing Tai Holdings as an interesting play.

“After speaking to property agents, we believe that the launch of Ascentia Sky (on Alexandra Road) is imminent. We have raised our average selling price assumption to $1,100 psf, and based on an estimated breakeven of $984 psf, we no longer believe that a provision is necessary for this site – Wing Tai may in fact make a small profit,” he observes.

Interestingly, hordes of owners who had bought units under the deferred payment scheme were reported to be at the adjacent The Metropolitan (which recently received its temporary occupation permit) over the weekend trying to ‘flip’ their units. They were reported to be asking for $1,100 psf to $1,200 psf from interested buyers.

Liew has a buy recommendation on Wing Tai. “Buying the stock is cheaper than physical property,” he reckons. “As the sales outlook improves, we have upgraded our FY09-10 forecasts by 4.9% and 13.2% respectively.” He has a target price of $1.79, and the counter closed at $1.42 on Wednesday. Missed the queue? Consider property stocks.

Source : The Edge – 1 Jul 2009

Private home prices in Singapore have fallen for the fourth straight quarter, though at a slower pace.

Initial estimates from the Urban Redevelopment Authority (URA) on Wednesday showed that the cost of private residential properties fell by 5.9 per cent in the second quarter, compared to the record drop of 14.1 per cent in the previous quarter – the steepest fall since 1975.

Observers projected that some 4,000 new private homes were sold between April and June, 50 per cent more than the previous quarter.

Strong sales volume and improved market sentiment drove prices up, narrowing the decline in the second quarter.

Donald Han, managing director, Cushman and Wakefield, said: “We are going into a scenario of an upturn. (For) the third quarter, we may look at a potential positive number.

“There is still liquidity in the market and system, looking for good yielding assets. There is still a lot of activity out there and that will continue for the next two to three quarters.”

According to the latest numbers, prices for homes in the second quarter slid across the board, dipping by 6.6 per cent in the central region, 6.3 per cent in the city fringe and 2.6 per cent in suburban areas.

Going forward, experts say developers will continue to launch mass market projects starting at S$800 per square foot (psf).

Overall, prices for the second half of the year is expected to rise by up to 10 per cent, with prospects for mid-tier properties also looking up.

Liang Thow Ming, director, Residential Services, Credo Real Estate, said: “Mid-end market has basically gone to the four-digit region at this point in time. I expect mid-end (market) will start at S$1,000 (psf) upwards. There has been a lot of activity which will sustain very well. In fact, I think it may be the out performer for the rest of this year.”

More expensive luxury apartments averaging between S$3,000 and S$4,000 psf may also be placed for sale, though on a selective private preview basis.

Market watchers say foreign investors will take positively to the latest figures. And they expect some foreign buyers to return in the next six to eight months, with the majority of them likely to be looking at properties above S$5 million.

A minor recovery was also seen in the resale prices of public flats.

The Housing and Development Board said preliminary data showed that the resale price index rose 1.2 per cent between April and June, to an all-time high of 140 points since records began in 1990.

This was a 1.2 per cent price increase in the second quarter, reversing a dip of 0.8 per cent in the previous quarter.

Property agents say this is on the back of greater job security and realistic home prices.

For the whole year, observers expect resale prices of public flats to go up by some three to five per cent.

The figures captured transaction prices in the first 10 weeks of the quarter. The data for the full second quarter will be released on July 24.

Source : Channel NewsAsia – 1 July 2009

CapitaLand unit, Ascott, has opened two new serviced residence apartments in China.

Somerset JieFangBei is in Chongqing, while Somerset Garden City is located in Shenzhen. The properties are Ascott’s first in each city.

Ascott now has 26 properties in 12 cities across China, making it the largest international serviced residence owner and operator in the country.

Ascott CEO Lim Ming Yan said the addition of the two new properties signals the firm’s confidence in the Chinese market.

The company plans to open seven more properties in China by 2010.

Source : Channel NewsAsia – 1 July 2009

The Land Transport Authority (LTA) has awarded another contract worth S$378 million for Downtown Line 2 (DTL2).

The contract for civil works went to local firm, Sembawang Engineers and Constructors.

The firm will design and build stations and tunnels at Botanic Gardens and Stevens.

Construction of the stations is scheduled to start in the third quarter of 2009 and targeted to complete by 2015.

DTL2 is a fully-underground line with 12 stations and one depot. When completed, it will link commuters from the Bukit Timah corridor to the North East Line, North South Line and Circle Line.

Source : Channel NewsAsia – 1 July 2009

The official price index for private homes slipped 5.9 per cent in second quarter 2009 over the preceding quarter, according to a flash estimate released on Wednesday by the Urban Redevelopment Authority (URA).

The Q2 drop is smaller than the 14.1 per cent quarter-on-quarter decline in the index in Q1 this year.

URA also released on Wednesday the flash estimates of the price changes in the three geographical regions for Q2.

Prices of non-landed private residential properties decreased by 6.6 per cent in Core Central Region, 6.3 per cent in Rest of Central Region and 2.6 per cent in Outside Central Region in Q2 over Q1.

In comparison, for the first three months of this year, prices of non-landed private residential properties posted quarter-on-quarter drops of 16.2 per cent in Core Central Region, 17.0 per cent in Rest of Central Region and 7.3 per cent in Outside Central Region.

Source : Business Times – 1 July 2009

The Housing & Development Board’s (HDB) flash estimate of the resale price index for HDB flats in second quarter 2009 rose 1.2 per cent over the preceding quarter. This reverses a marginal quarter-on-quarter drop of 0.8 per cent registered in Q1.

The resale price index for the full Q2 2009, along with more detailed public housing data for the period and upcoming new flat supply, will be released at the end of this month, HDB said in news release.

Source : Business Times – 1 July 2009

Private home prices in Singapore have fallen for the fourth straight quarter, though at a slower pace.

Initial estimates from the Urban Redevelopment Authority (URA) showed Wednesday that the cost of private residential properties fell by 5.9 per cent in the second quarter, compared to the record drop of 14.1 per cent in the previous quarter – the steepest fall since 1975.

According to the latest numbers, prices for homes slid across the board, dipping by 6.6 per cent in the central region, 6.3 per cent in the city fringe and 2.6 per cent in suburban areas.

Minor recovery was also seen in the resale prices of public flats.

The Housing and Development Board said preliminary data shows that resale price index rose 1.2 per cent between April and June, to an all-time high of 140 points since records began in 1990.

This comes after a marginal drop of 0.8 per cent in the first quarter.

Source : Channel NewsAsia – 1 July 2009

The Urban Redevelopment Authority (URA) will put an industrial site at Kaki Bukit up for sale through a public tender.

It says it has accepted an application from a developer who has agreed to bid for the land parcel at or above the minimum acceptable price of S$5 million. The identity of the developer was not revealed.

The 1.07 hectare site, located at Kaki Bukit Road 2, has a 30-year lease period.

The site can be developed for clean, light and general industrial purposes and was made available for sale through the Reserve List System in May this year.

Under this system, a site will be released for sale only if a bid with an acceptable minimum price is received.

URA will launch the public tender in about two weeks’ time.

Source : Channel NewsAsia – 1 July 2009

Singapore has moved a notch higher to 18th spot as the most expensive retail location in the world, despite easing rental rates for super prime retail space.

Property consultancy firm CB Richard Ellis (CBRE) said prime retail rents have declined across the globe with the global financial crisis reducing consumer confidence and weakening spending.

Yet super prime rents in Singapore stood at US$408 per square feet annually at the end of the first quarter of this year.

CBRE director of retail services Letty Lee said that “going forward, we expect the rate of rental decline for prime space along Orchard Road to ease”.

In the Asia Pacific region, super prime rental rates have also declined in cities like Beijing, Tokyo and New Delhi on the back of increased unemployment rates and lower consumer spending in the first quarter of this year.

Hong Kong is also the most expensive retail destination in the region with annual rents totalling up to US$975 per square feet.

New York retained its top spot with the highest annual prime retail rent of US$1,800 per square feet, despite posting a 10 per cent year-on-year rental decline.

Following New York and Hong Kong, are Moscow, Paris and Tokyo, making up the top five retail locations with the highest prime retail rents.

Similarly in Europe, Middle East and Africa (EMEA) region, prime retail rents have fallen by 10 per cent or more, quarter-on-quarter, in several markets like Dubai, Barcelona, Athens and Dublin.

However, bright spots have been spotted in some markets with many discount chains and food retailers announcing major expansion plans.

Source : Channel NewsAsia – 1 July 2009

* Property prices drop in both big cities, rural areas
* Bleak economic conditions weigh on real estate market

Land prices in Japan fell 5.5 per cent in 2008, marking the first decline in four years, a government survey showed on Wednesday, as the global financial crisis dealt a blow to the Japanese real estate market.

Japan’s deepest recession since World War Two sapped demand for housing and office buildings, and tighter credit conditions dampened property investment, weighing on land prices which had been stabilising after more than a decade of declines.

Land prices fell in all of Japan’s 47 prefectures last year, according to the survey by the National Tax Agency, which covered about 370,000 building lots.

Property prices in Tokyo and its neighbouring prefectures fell 6.5 per cent, after a 14.7 per cent rise the previous year.

In the Osaka vicinity in western Japan, land prices declined 3.4 per cent, while those in the central Japan city of Nagoya and its neighbouring areas tumbled 6.3 per cent.

Average land prices in rural areas, which had been flat in the previous two years, dropped 3.8 per cent last year.

Japan’s land prices had slumped since the early 1990s after the bursting of an asset bubble, leaving huge piles of bad loans in the banking sector and crippling the economy for a decade.

The OECD said last week that a further drop in Japan’s land prices is likely in 2009, creating a risk of balance-sheet adjustments that would put additional pressure on the corporate and financial sectors.

The tax agency assesses land prices as of Jan 1 every year to calculate inheritance and gift taxes.

Source : Business Times – 1 July 2009

Types of unit Latitude:

2 rooms 1324 square feet from $1645psf

3 rooms 1615 square feet /1927 square feet from $1700psf

4 rooms 2659 square feet from $1823psf

Buy Sell Rent Invest Singapore Property singapore real estate

Mindy Yong

Tel: (+65) 91002985

mindy@mindyyong.com ( email me )

CapitaCommercial Trust, says a total of 1,901.1 million rights units in valid acceptances and excess applications were received at the close of its rights issue on June 24. This represents about 135.4% of the total number of rights units available under the rights issue.

On May 22, CapitaCommercial Trust announced a fully-underwritten 1-for-1 renounceable rights issue of 1,403.9 million rights units at an issue price of 59 cents per rights share to raise gross proceeds of $828.3 million.

CapitaCommercial Trust says the majority of the proceeds from the rights issue will be primarily used to reduce its existing borrowings. The balance will be used for capital expenditure, asset enhancements and general corporate and working capital purposes.

With the reduced borrowings, CapitaCommercial Trust says its balance sheet will be strengthened as its gearing will be brought down to the low end of its target gearing range of 30% to 45% through property market cycles.

Lynette Leong, CEO of CapitaCommercial Trust, said, “The proceeds from the rights issue, together with CCT’s existing unencumbered asset portfolio worth $2 billion and undrawn amount of $665 million from CCT’s multicurrency medium term note program, will give CCT tremendous financial flexibility to meet future refinancing needs. Our immediate priority is to continue to drive operational performance by maintaining CCT’s high committed occupancy rate through proactive lease renewals and active leasing as well as astute cost containment.”

CapitaLand has subscribed to its entitlement of rights units to maintain a stake of 31.4% in CapitaCommercial Trust.

Source : The Edge – 30 Jun 2009

Frasers Commercial Trust, Singapore’s third-biggest office property trust, said it plans to buy an office building in the city-state and raise $888.9 million to repay maturing debt.

The trust obtained $675 million in two loans and plans to raise $213.9 million selling stock in a three-for-one rights offer, it said in a statement today. Frasers Commercial will offer 2.25 billion shares at 9.5 cents apiece, a 60% discount to yesterday’s closing share price of 24 cents.

“It is critical for the refinancing of the maturing debt to take place for FCOT to remain as a going concern,” the trust said in the statement.

Frasers Commercial, also known as FCOT, is seeking to reduce debt after Standard & Poor’s affirmed its “BB” long- term debt rating with a negative outlook on June 17. The trust had $945.5 million of debt as of March 31, of which $624.5 million is due in the second half of this year, Frasers Commercial said in the statement.

The refinancing will be granted subject to the completion to the completion of the rights offer and the acquisition, the trust said in a separate statement.

“There is no certainty that FCOT will be able to extend its debt maturing in 2009 or obtain alternative financing proposals should these transactions not proceed,” it said.

‘Stronger’

Frasers Commercial will buy Singapore’s Alexandra Technopark office block for $342.5 million from a unit of Fraser & Neave, according to the statement. Fraser & Neave, Singapore’s biggest beverage maker, is the trust’s biggest shareholder, according to data compiled by Bloomberg.

“FCOT is put in a place where it will come up stronger,” Hui Choon Kit, deputy group financial controller of Fraser & Neave, said in a briefing today.

Frasers Commercial, which was halted from trading pending today’s announcement, was unchanged at 24 cents at the close of trading yesterday. The stock gained 78% since reaching a record low of 13.5 cents on March 9.

The trust was known as Allco Commercial REIT until Fraser & Neave took it over in August. The trust’s portfolio consists of nine office blocks in Singapore, Australia and Japan, as well as an investment in an unlisted office fund in Australia, according to its website.

DBS Group Holdings, Oversea-Chinese Banking Corp., Standard Chartered Plc and Commonwealth Bank of Australia arranged the loan.

Source : The Edge – 30 Jun 2009

Singapore Exchange’s Mainboard-listed Frasers Commercial Trust has asked for a trading halt of its units pending an announcement. No further details were given.

Back in April, Frasers Commercial Trust had said it was exploring ways to refinance its existing debt, which may include a rights issue.

Frasers Centrepoint, which sponsored the trust, is a unit of the Fraser & Neave (F&N) group. F&N shares have also been suspended pending an announcement.

Source : Channel NewsAsia – 30 Jun 2009

CapitaCommercial Trust (CCT) said its rights issue was 1.35 times oversubscribed.

The trust had launched a 1-for-1 renounceable rights issue of 1.4 billion rights units at 59 cents each.

But applications came in for over 1.9 billion rights units.

CCT launched the rights issue to raise S$828.3 million, mainly to reduce its existing borrowings.

The rest of the proceeds will be used for capital expenditure, asset enhancements and general corporate and working capital purposes.

CCT said it expects the rights units to be listed and quoted on the Singapore Exchange mainboard from this Friday.

Source : Channel NewsAsia – 30 Jun 2009

After a near month-long tussle, some tenants at The Grangeford may stay on at the condominium after all.

About 40 of them have expressed interest to do so under the new landlord, Savills although the actual number could be higher as some enter into joint-leases with others to rent whole apartment units.

Residents had been given till 5pm on June 30 to vacate the premises after previous landlord Ideal Accommodation got into trouble with the authorities for converting 140 apartments into 600 rooms.

The new landlord, Savills is still tallying the total number of tenants who have moved out.

The condominium owner, Cove Developments said a few tenants have requested for an extension to move due to various reasons such as travelling, and its considering these on a case-by-case basis.

Authorities were roped in to ensure those leaving did not take more than they came with.

Tenants told Channel NewsAsia they were warned by management that a police report would be made that if they had taken furniture that the apartments had come furnished with.

Out of those who moved, some were unhappy with terms offered by new landlord Savills, which requires them to rent an entire apartment instead of individual rooms.

40 units have been offered at rates ranging from S$2,600 to S$3,500 per month with a minimum lease period of six months.

Others just had enough of the hassle.

Rizky Priandika, an Indonesian student, said: “There are already many problems here so we need to move out already.”

Kentaro Fujiyama, an expat working in Singapore for the first time, said: “I cannot live under the contract with them. I haven’t got my deposit back and the previous landlord didn’t even say sorry.”

Another Indonesian student, George Mason, said: “I’m really pissed off now. I’ve just started staying here for one month and the contract said one year for me.”

Cove said the tenancy agreements between Ideal Accommodation and its tenants are a private matter.

At least 10 tenants told Channel NewsAsia they plan to file complaints with the Small Claims Tribunal for deposits ranging from S$1,200 to S$1,800 paid to previous landlord, Ideal Accommodation.

Ideal Accommodation could not be reached for comment.

Cove Developments has declined Channel NewsAsia’s request to film the interior of the condominium and the tearing down of the illegal partitions.

It said that with more people expected to move out on Tuesday, it might be unsafe for the media to be around.

But it added that it’s on track to completing the refurbishment of all the apartments by the July 27 deadline.

It also said it tries to carry out demolition works on vacated units to minimise disruption to existing tenants.

Source : Channel NewsAsia – 30 Jun 2009

Preview Soon – Meier Suites @ Margate Road

MEIER SUITES is situated just across from East Coast Beach and is next to Katong Park. It is within close proximity to Kallang MRT station and the future Old Airport Road MRT station. The project enjoys convenient access to the Changi airport and the city via expressways (ECP and PIE).

Meier Suites is a mere 5 mins drive to Parkway Parade.  East Coast beach and Katong Park are nearby.  The neighbouring Siglap sports many sidewalk cafes for a leisurely cuppa after work, while relaxing with the sea breeze. Sea sports and beach recreation are a stone’s throw away at East Coast.

Register your interest with me now +65-98531741 or use the Contact Form be the amongst the first to be invited for the preview

Please excuse me if your call is not answered, kindly send me a SMS, I will get back to you asap. Thank You!

Information Subject To Changes

But it is too early to call a recovery, cautions OCBC Investment Research

Private home sales stayed strong in June.

Far East Organization sold 74 apartments in its 280-unit Vista Residences at a private preview last weekend, the developer said yesterday.

And Frasers Centrepoint said that it has fully sold two of its projects – the 330-unit 8@Woodleigh and the 110-unit Woodsville 28. Homes at 8@Woodleigh went for an average of $790 per sq ft (psf), while units at Woodsville 28 sold for an average price of $775 psf.

8@Woodleigh was launched just two weeks ago. Woodsville 28 was launched in July 2008 but most units languished until the buying momentum returned to the market this year.

Over at the freehold Vista Residences – on Jalan Dusun and Jalan Datoh at the corner of Thomson Road – prices start at $960 psf. The project will be officially launched tomorrow, but Far East released 88 units at a weekend preview, and 85 per cent of them were snapped up.

‘Buyers are mainly Singaporeans and there is particularly strong interest from young professional managers, teachers and civil servants who are buying to occupy,’ said Chia Boon Kuah, chief operating officer of Far East Organization’s property arm.

While units at Vista Residences have sold for more than homes in the nearby The Arte – a City Developments project where units were launched at an average price of $880 psf in March – the difference in pricing is due to the difference in unit sizes and floor plans, analysts say.

‘Vista Residences offer smaller size units that command higher psf pricing and also smaller balcony space than The Arte,’ OCBC Investment Research analyst Foo Sze Ming said in a note yesterday. ‘As such, we caution that the strong buying momentum at higher psf pricing for the new launch should not be viewed as a new uptrend for property prices.’

Mr Foo said that it is too early to call a recovery in the property market. ‘We remain unconvinced by the recent ‘recovery’ in the physical property market,’ he said.

‘We believe buying strength over the recent weeks could have been driven by the spillover effect from earlier pent-up demand that drew cash rich local investors back into the market. In our view, potential catalysts for price increase will have to come from an inflow of foreign funds into the property market, as well as a pick up in employment opportunities.’

Foreign funds were the driving force of the property boom in 2007, but have not come back to the market in a big way.

Looking ahead, more mass-market and mid-market launches are expected in the coming weeks, including Oasis@Elias, a 388-unit, 99-year leasehold project at Elias Road by Chip Eng Seng, and The Gale, a 329-unit, freehold project at Flora Road by Tripartite Developers.

Source : Business Times – 30 Jun 2009

STRONG sales in the property market continued over the weekend as mass- and upper-mid- market launches drew crowds of buyers.

Within three days of its preview launch last Friday, the 68-unit Residences @ Killiney project sold 39 of 60 released units – with sales ongoing, a spokesman for developer Hoi Hup Realty said yesterday.

Preview prices at the Killiney Road condominium ranged from $1,700 per sq ft (psf) to $2,000 psf.

Opposite the condo at Devonshire Road, Allgreen Properties’ One Devonshire has sold more than 95 per cent of its 36-storey, 152-unit freehold condo since its launch about two weeks ago.

In the Thomson Road area, Far East Organization sold 84 per cent – or 74 homes – of an initial batch of 88 units at a private preview of its Vista Residences over the weekend.

The 280-unit freehold project offers a range of accommodation from one bedroom to penthouse units starting from $960 psf.

Far East will release another 45 units tomorrow – its official launch date – said Mr Chia Boon Kuah, chief operating officer of the firm’s property arm.

HSR Property Group executive director Eric Cheng noted that the buying activity – which started in mass-market new condo launches – seems to have moved into the higher market segments.

‘This is undoubtedly due to the stock market rally, more positive sentiment, and is enabled by the interest absorption scheme,’ he said.

The scheme allows buyers to pay a deposit and postpone monthly home loan payments until the project is completed.

‘This is attracting the investors to come out in droves,’ he added.

In the mass market, sales continued with Frasers Centrepoint announcing yesterday that its two projects, 8@Woodleigh and Woodsville 28, were sold out.

All 330 units at 8@Woodleigh in Potong Pasir were fully sold last Saturday at an average price of $790 psf. And all 110 units of Woodsville 28 were sold by last Tuesday at an average price of $775 psf.

At Pasir Ris, half of the 142 units at Chip Eng Seng group’s Oasis@Elias previewed over the weekend were sold, said its marketing agent CB Richard Ellis.

On the east coast, the 94-unit Parc Seabreeze in Marine Parade is selling well with the project close to 70 per cent sold, said HSR, which is marketing the project. Units are fetching from $1,050 psf to $1,550 psf.

Mr Colin Tan, Chesterton Suntec International’s head of research and consultancy, noted that there had been ‘pent-up demand’ resulting in strong sales activity, but added that this was ‘not sustainable’.

‘Unlike the boom years, where foreigners made up a huge number of buyers, it is mostly locals who are on this buying spree,’ he said.

Property expert Nicholas Mak expects a moderation of buying activity in the coming months, especially as developers continue to revise their prices upwards.

Source : Straits Times – 30 Jun 2009

25 initiatives will fund educational, medical needs

TO mark its 25th anniversary, the Ascott Group has organised more than 25 community initiatives worldwide, ranging from supporting the educational needs of under-privileged children to funding their medical treatment.

Ascott staff raised $25,000 to contribute to the educational and developmental needs of children at Singapore’s Chaoyang School, Pertapis Children’s Home and TOUCH Young Arrows. This was boosted by a further $25,000 from CapitaLand Hope Foundation.

Ascott is CapitaLand’s wholly owned serviced residence unit. Starting out with only one property each in Singapore and France in 1984, it has grown to become the world’s largest international service residence owner-operator, with 190 properties in 66 cities across 22 countries.

At home, Ascott’s generosity has enabled Pertapis Children’s Home to upgrade its computer laboratory with new equipment and software.

Beyond Singapore, Ascott has provided funds to build a school dormitory for hill tribe children in Chiang Rai, Thailand.

Ascott Europe will sponsor cardiac surgery for children with severe heart malfunctions, collecting donations from the sale of collectible Citadines teddy bears at its properties across major cities.

‘We are commemorating Ascott’s 25th anniversary in a meaningful way,’ said chairman Lim Chin Beng. ‘Through these efforts, we hope to create a brighter future for children.’

Source : Business Times – 30 Jun 2009

SADLY, Singapore still has a long way to go before it matures as a society, even if it has done well economically.

Hotel 81 – which is a hotel, not a brothel, by the way – in Tiong Bahru bears this out. Like the issue of housing dormitories for foreign workers in Serangoon Gardens, some residents are saying ’somewhere else, but not here’.

Presumably, it is okay in Geylang. It is also okay in Chinatown, and many other locations not considered inordinately prone to ‘vice’ (for the complainants have not, as far as I know, protested against the very existence of Hotel 81).

‘But hey. I came to live in this pleasant neighbourhood. Put it somewhere else.’

Unfortunately, there is no social or government contract when you buy a property or choose to live in a particular location, for you to ‘expect’ things to be exactly how you want them.

Like the recent online letter by Mrs Bendjenni Udiana Jamalludin about how some men dressed well but lacked social graces (’They were well-dressed but behaved like louts’, last Saturday), Singapore can develop economically but fall well behind in social development. Perhaps more can be done in school to ensure the next generation ‘grows up’.

Kevin Kwek

Source : Straits Times – 30 Jun 2009

ANOTHER furore seems to be brewing over a location for a budget hotel in Singapore. If this had been a major hotel development, I wonder if it would have invited such a reaction. If one goes to Tiong Bahru, one will notice many prominent hotels within a 2km radius. So why do we pick on a budget hotel to drive home a point of protest?

Hotel 81 is a local set-up, and its business caters to Singaporeans as much as to foreigners. It provides many employment opportunities for Singaporeans, especially during this economic downturn. Hence, to deprive it of a decent place to do business is to prevent a prospective employer from expanding its business.

From hospices to funeral parlours to pubs, Singaporeans are fast coming across as possessing a ‘my-turf-is-my-turf’ mentality. This siege mindset is harmful to the economy and will deter potential investors from doing business in Singapore. After all, if businesses are not located within the city, where else do we locate them?

Singapore is an island nation and space is a major constraint. We cannot build another island as we did for Jurong Island.

Given this constraint, we have no alternative but to change our mindset – be more open with the space we must share with others. The sooner we do this, the better we will be prepared for the future.

Because, in time to come, as the population expands and public buildings compete for more space, we can count our blessings if we find a hotel in our neighbourhood rather than something else.

Douglas Chua

Source : Straits Times – 30 Jun 2009

Mortgage rates are lowest in 19 years in face of slower demand for credit

Hong Kong high school teacher Chris Poon’s dream of buying his first apartment was dashed in last December when banks refused to fund more than 50 per cent of the HK$3.5 million (S$657,650) purchase.

Mr Poon, 33, tried again in May and got a loan covering 70 per cent of the price for the 700 square foot apartment in Hong Kong’s Sai Wan Ho district from BOC Hong Kong (Holdings) Ltd. The mortgage rate was 2.25 per cent, down from the 3.5 per cent that Mr Poon was discussing with lenders last year.

Mortgage rates in the city are the lowest in at least 19 years, as far back as records are available, to offset slower demand for other types of credit during Hong Kong’s worst recession in a decade. Among developed economies, only Japan offers similarly cheap loans, as its central bank has kept interest rates below one per cent for the past 14 years, said Leland Sun, founder of Pan Asian Mortgage Co.

‘Hong Kong banks are killing themselves with the low rates,’ said Mr Sun, whose Hong Kong-based firm advises homebuyers.

Average net interest margins for the city’s banks – the difference between what they charge for loans and the cost to fund them – will narrow by as much as half a percentage point this year from 2008, said Lee Yuk-kei, an analyst at Core-Pacific Yamaichi International Ltd in Hong Kong.

The aggregate margin declined to 1.62 per cent in the first quarter from 1.78 per cent in the previous three months, the Hong Kong Monetary Authority reported. At New York- based JPMorgan Chase & Co, the largest US bank by market value, the net interest margin climbed 37 basis points to 2.76 per cent in the first quarter, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.

Banco Santander SA, Spain’s largest bank, said that its net interest margin rose to 3.34 per cent in the first quarter from 3.05 per cent three months earlier.

Thinner margins will slow any recovery in Hong Kong bank profits this year, Core-Pacific’s Mr Lee said. First-half results ‘are likely to be weak’ because of pressure on loan profitability and weakening demand for credit, Citigroup Inc analysts Simon Ho and Franco Lam wrote in a June 16 report.

The combined pretax profits of Hong Kong banks declined 28 per cent in the first quarter from a year earlier, according to figures submitted last month by the central bank to lawmakers. By contrast, first- quarter earnings at JPMorgan and Citigroup in the US and Deutsche Bank AG in Germany increased amid lower credit-market writedowns and higher trading profits.

Total loans in Hong Kong fell 0.5 per cent in April from March, sliding for a seventh straight month as an increase in mortgage lending failed to compensate for a drop in demand for credit among individuals and small and medium-sized companies, according to the central bank. The value of mortgage loans approved by Hong Kong banks rose for a sixth consecutive month in May to HK$28.1 billion, the highest since January 2008.

Banks cut home-loan rates in the city by 15 to 40 basis points in May to an average 2.08 per cent, data compiled by Hong Kong- based mReferral Mortgage Brokerage Services show. That’s the lowest level since records began in 1990, according to mReferral.

‘With these kinds of mortgage rates, banks aren’t really making much money,’ said Dominic Chan, a Hong Kong-based analyst at BNP Paribas Securities Asia Ltd. ‘But for them, it’s probably still better than putting money in, say, US Treasury notes.’ The yield on 10-year Treasuries fell to 3.54 per cent on June 26 in New York.

Mr Chan has a ‘buy’ rating on BOC Hong Kong Holdings Ltd, Bank of East Asia Ltd and HSBC Holdings plc, and a ‘hold’ on Hang Seng Bank Ltd.

The Hang Seng Finance Index, which tracks shares of the city’s biggest lenders, fell 17 per cent during the past 12 months, matching the benchmark Hang Seng Index’s performance.

Bank of Communications Co, the Chinese bank 19 per cent owned by London-based HSBC, started offering mortgage rates on June 10 priced at as much as 3.25 percentage points below its prime rate, which stands at 5.25 per cent. The prime rate is the benchmark banks use to calculate what to charge for mortgages.

‘This is probably one of the lowest mortgage offers in history,’ said Patrick Chow, head of research at property agency Ricacorp Ltd in Hong Kong, referring to the Bank of Communications rate. ‘We’ve seen lower offers in the past, but they only applied to specific new projects or were given only to select clients.’

HSBC, Hong Kong’s biggest bank by branches, began a new mortgage plan in March offering a fixed 2.18 per cent interest rate in the first year and a floating rate of 1.75 per cent below the prime rate thereafter. BOC Hong Kong, which has the largest share of the mortgage market, announced a similar plan later that month, with rates as low as 2.16 per cent the first year.

‘This mortgage price war will go on,’ Peter Wong, head of the Hong Kong unit of HSBC, said at a June 11 briefing. ‘Both corporate and personal lending has slowed down lately, and a lot of banks have switched their focus to the mortgage market.’

Mitsubishi UFJ Financial Group Inc, Japan’s largest bank, charges about 2.48 per cent for a variable mortgage in its home market. The average 30-year fixed mortgage rate in the US was 5.42 per cent on June 25, up from 5.38 per cent a week earlier, according to Freddie Mac, the McLean, Virginia-based mortgage buyer.

The decline in Hong Kong mortgage rates has spurred a recovery in the housing market, with home sales rising 42 per cent by volume in May, the biggest increase since February 2008, data compiled by the government’s Land Registry show.

Prices for so-called mass-market homes, or those smaller than 1,000 sq ft, increased about 10.5 per cent in the two months till May 31, after falling almost 25 per cent during the second half of 2008, according to Hong Kong-based Centaline Property Agency Ltd.

Falling money market rates have underpinned the mortgage price battle. The three-month Hong Kong Interbank Offered Rate fell as low as 0.33 per cent on May 21, the lowest since January 2005, as the city’s central bank cut borrowing costs and spent US$23 billion defending the currency’s peg to the US dollar.

At 0.36 per cent, the Hibor is 84 basis points lower than the equivalent London Interbank Offered Rate. The spread was 60 points on April 22, just before the Hibor began to plunge.

‘Last year, the banks sounded like they didn’t really want to lend me any money,’ said Mr Poon, whose mortgage plan from BOC Hong Kong was 2.75 per cent below the bank’s prime rate. ‘This time, it felt like they’ve got a price war going. Every bank I went to tried to tell me they could offer better deals than the others.’

Source : Business Times – 30 Jun 2009

Investors upbeat; analysts expect more upside ahead

Japan’s real estate investment trust market climbed to an eight- month high yesterday as investors grew more optimistic about the sector’s financial health and analysts forecast more upside ahead.

Along with property stocks, Japan’s Reit market was hit hard as the global financial crisis pushed down property values and squeezed financing, driving investors out of the market.

But an increasing number of investors are returning to the Reit market after media reported that Japan plans to set up a US$10 billion fund to buy properties held by Reits and make loans to the trusts, analysts said.

Investors were also cheered by news that Daiwa Securities Group, Japan’s No 2 brokerage, plans to spend about US$140 million to take a stake in DA Office Investment Corp, a Reit which mainly invests in office buildings.

Daiwa will also buy Davinci Select, the firm that manages the Reit.

Such news has helped restore confidence in the outlook for the Reit market, which despite its recent roll is still down nearly two-thirds since hitting a peak about two years ago.

‘A series of support for the Reit and property market, like the setting-up of a fund and emergency package for smaller firms, has begun boosting investor sentiment . . . the Reit market has already hit a recent bottom,’ said Kabu.com strategist Tatsunori Kawai.

‘The Reits are still looking cheap considering their valuations,’ Mr Kawai said, adding that the index still has more upside potential.

The Tokyo Stock Exchange’s Reit sub-index rose 0.6 per cent to 976.07 yesterday, its highest level since Oct 6, and bucking the benchmark Nikkei index’s one per cent fall.

The index has also regained the level seen before New City Residence Investment Corp, in early October, became Japan’s first Reit to fold, spooking the market as investors expected more failures amid the global credit crunch.

But the Reit sub-index is still down about 63 per cent since hitting a peak in May 2007.

Yesterday, Nippon Building Fund Inc, the biggest Japanese Reit among 41 listed Reits, rose 2.4 per cent and Japan Real Estate Investment Corp climbed 3.2 per cent.

‘Easing credit concerns, an expected industry shake-up following Daiwa’s entry . . . the market is seeing a series of good news,’ said Takahiko Kishi, a senior analyst at Mizuho Investors Securities.

Mr Kishi added that the Reit market might find more impetus if investors see a further shake-up in the market, with big companies taking over or investing in smaller Reits that are having trouble raising funds.

Mitsubishi Estate, Japan’s second-biggest developer, is interested in buying a Reit in Japan, while preparing to launch a property investment fund in the US, its president told Reuters in a recent interview.

Orix Real Estate Corp, a wholly owned unit of Orix Corp, has said that it might launch a new Reit when the market recovers.

Source : Business Times – 30 Jun 2009

Asking prices for existing homes in Spain dropped by as much as 4.5 per cent in the second quarter from the previous three months, Idealista.com said yesterday, as lenders granted fewer mortgages and unemployment increased.

The prices asked by sellers in Spain’s biggest cities fell on average by 1-3 per cent, Idealista said in an e-mailed statement. The biggest decline, in the cities of Cadiz and Ciudad Real, was 4.5 per cent.

House prices soared 120 per cent between 1997 and 2007 as falling interest rates, rising employment and economic growth averaging 3.8 per cent a year boosted Spaniards’ spending power. Price gains began to slow in 2007 as the global credit crisis took hold and started falling in July 2008 as overbuilding caused the supply of homes to outstrip demand.

In Madrid, prices slipped 0.6 per cent to 3,954 euros (S$8,090) per square metre (psm) and in Barcelona, Spain’s second- largest city, they fell 1.5 per cent to 4,153 euros. In Valencia, the third-biggest city, the decline was 1.9 per cent to 2,499 euros psm.

Source : Business Times – 30 Jun 2009

Malaysian property developers, set to be the best performers on the Kuala Lumpur stock exchange this quarter, had their stock ratings raised by HwangDBS Vickers Research Sdn, which said that sales are rebounding and potential ‘positive’ policy announcements may bolster demand.

SP Setia Bhd, Malaysia’s biggest property developer, was upgraded to ‘buy’ from ‘fully valued’, and the target price increased to RM4.50 from RM3.90, HwangDBS said in a report yesterday.

Eastern & Oriental Bhd, Sunrise Bhd and Sunway City Bhd were raised to ‘buy’ from ‘hold’, it said.

‘Sales are bottoming out’ and ‘developers are more confident now to resume launches, including high-end’ properties, HwangDBS said. Property stocks are now ’stepping into the limelight’.

The Kuala Lumpur Property Index of 87 stocks jumped 43 per cent this quarter, outpacing the benchmark Kuala Lumpur Composite Index’s 23 per cent gain, and making it the best performing industry group on the stock exchange.

The plan by Prime Minister Najib Razak to announce an easing of investment restrictions today ‘could further re-rate the sector,’ HwangDBS said.

Mr Najib, who took office in April, has raised foreign ownership limits in banks and announced a RM67 billion (S$27.52 billion) spending plan in an effort to boost the economy that he predicts will shrink as much as 5 per cent this year, the first contraction in a decade.

Central bank data showed loans approved for home purchases in April climbed to the highest level in at least a year. Loans approved for home purchases in April rose to RM6.3 billion from a month earlier, the third monthly gain, adding to signs the industry is rebounding.

SP Setia has jumped 47 per cent this quarter, Sunway City climbed 82 per cent, while Eastern & Oriental more than doubled.

Source : Business Times – 30 Jun 2009

UK home-loan approvals climbed less than economists forecast last month as the credit squeeze led to the smallest increase in net mortgage lending since records began in 1993.

Banks granted 43,414 loans in May, compared with 43,191 in April, the Bank of England said yesterday in London. Economists predicted 46,000, the median of 22 forecasts in a Bloomberg News survey shows. Net mortgage lending rose by £324 million (S$779 million), about a third of the pace in the previous month.

Residential property held its value for a second month in June after falling for more than a year, Hometrack Ltd said yesterday. Bank of England policymaker Kate Barker said last week the housing market is still ’some way away from normal’ and officials have cautioned that the lending squeeze threatens to delay Britain’s economic recovery.

‘These are disappointing numbers,’ said David Page, an economist at Investec Securities in London. ‘We’ve seen approvals basically stall and lending in absolute levels remains very low. This reminds us that prospects for improvement in the housing market rely on the financial sector.’

The pound fell as much as 0.2 per cent against the dollar after the report, before recovering its losses. The British currency traded at US$1.6499 as at 10.08am in London yesterday.

Gross mortgage lending fell to £10.6 billion in May, the least since 2000, from £10.9 billion in April, the Bank of England said.

The average cost of a home in England and Wales was £155,600 this month, Hometrack said. Prices stopped falling in May on the research group’s measure for the first time in 20 months. From a year earlier, values fell 8.7 per cent in June.

The central bank said in its Financial Stability Report on June 26 that banks have curbed mortgage lending to all but the safest borrowers.

That may hamper a recovery in the economy after it shrank 1.9 per cent in the first quarter, the most since 1979. More mortgage holders are likely to default as unemployment rises, the bank said.

Still, lower interest rates may relieve some of the pressure on homeowners, the UK central bank said last week. Policymakers this month kept the benchmark interest rate at a record low of 0.5 per cent.

Individuals, whose overall debts total £1.5 trillion, added to non-secured borrowings at a faster pace in May.

Net consumer credit rose by £300 million, compared with £200 million in April, as net lending on personal loans and overdrafts increased for the first time in five months.

Source : Business Times – 30 Jun 2009

New Launch – Latitude

Setting you free from the intensity of urban living, Latitude standing on over 125,000 square feet of land off River Valley Road, offers a world of unparalleled comfort and unmatched refinement. A tranquil abode within the dynamics of the city.

Launch Date: 2^nd July 2009

Register your interest with me now +65-98531741

Please excuse me if your call is not answered, kindly send me a SMS, I will get back to you asap. Thank You!

The average monthly prime Grade A office rental fell 11 per cent quarter on quarter to $9.50 per square foot (psf) in the second quarter, slower than the 28 per cent quarter-on-quarter slide in Q1 2009, according to property consulting group Jones Lang LaSalle (JLL).

The latest drop translates to an overall slide of 48 per cent from the peak of $18.40 psf in Q3 last year.

The vacancy level of Grade A space rose to 6.1 per cent as at end-Q2 2009, up from 5.4 per cent at end-Q1 and 2 per cent at end-2008. JLL’s prime Grade A office basket covers the best properties in the Raffles Place area, and includes One Raffles Quay and One Marina Boulevard.

JLL expects office rents to continue falling for the rest of this year and into the middle of next year, albeit at a more moderated pace, as substantial physical supply and weak global demand continue to overshadow the market.

Property consultants point out that net demand remains in negative territory. And with around eight million square feet of new offices slated for completion between now and 2013, the office market isn’t out of the woods yet.

But the silver lining is that Singapore will become more cost-competitive and regain its attraction as a hub for global banks and MNCs when they stabilise their headcounts, says JLL’s head of markets, Singapore, Chris Archibold.

For now, the bright spot for the office market is a significant pick-up in leasing volumes lately. ‘There has been a marked increase in the volume of leasing and inspection enquiries recently. A significant number of these tenants are looking at remaining within the CBD core area,’ said Mr Archibold.

Said DTZ executive director (business space) Cheng Siow Ying: ‘At least now, corporates are more willing to talk about their future real estate needs. There’s recognition that a lot of good-quality office space is becoming available at competitive rents, presenting attractive leasing opportunities. Six months ago, most corporates were not even reviewing their space needs.’

CB Richard Ellis executive director (office services) Moray Armstrong, too, has seen a ’strong resurgence’ of leasing activity in the past couple of months. ‘But in truth, it’s not representative of positive office demand. Rather what we appear to be seeing is the welcome transition to a phase of greater stability, which is allowing occupiers to re-visit premises planning. For the most part, the tenants that are active are chasing lower cost and better value – in some cases by relocating to newer buildings at the fringe of the CBD,’ he added.

Giving some examples, Mr Armstrong noted that office developments such as 78 Shenton Way Tower 2 and Mapletree’s The Anson – both of which are completing in the next two to three months – are attracting keen interest.

According to JLL, lease renewals continue to dominate deals in the current market where occupiers have generally cancelled if not deferred their expansion plans.

‘While there has been more positive news of late, our domestic economic growth remains weak and this will likely continue to cast a shadow over the Singapore office property market over the next six to nine months,’ says JLL’s head of SEA research Chua Yang Liang.

Office leasing consultants say it’s too early to declare a recovery. Projections of negative office take-up this year range from 500,000 sq ft to 1.5 million sq ft. Demand is expected to fall short of new supply in the next few years.

And that’s not counting shadow space or excess space that companies try to sublet. In addition to some 400,000 sq ft of shadow space immediately available for occupation, JLL estimates there is a further 400,000 sq ft in the pipeline.

Summing things up, Mr Armstrong said: ‘We can’t really call a recovery in the office market until demand turns positive and vacancy rates reduce significantly. It’s hard to imagine that will occur in the next 12-18 months, but there is a stronger case for the market turning 2011 onwards.’

Source : Business Times – 29 Jun 2009

Credit Suisse, which predicted in January that an astonishing 200,000 foreigners and permanent residents (PRs) might leave Singapore in 2009 and 2010 on the back of job losses, now thinks that the exodus may not be as bad as it had expected.

The evidence for this can be gleaned from the bank’s forecasts for the property market.

Based on its economists’ expectations of historically high job losses (up to 240,000) and an exodus of foreigners (up to 200,000) by the end of 2010, the firm’s property analyst Tricia Song had previously assumed that 15,000 homes could be vacated by 2011.

But in a report dated June 19, she says she now believes that just 3,000 private homes will be vacant from 2009 to 2011 as foreigners leave the country.

‘Anecdotally, we expect that the number of foreigners leaving Singapore will not be as high as we had expected,’ said Ms Song in the report.

This also means that private home prices will not be as badly hit as the firm predicted just six months ago. Credit Suisse had expected private home prices to fall by as much as 60 per cent from the peak to 2005 levels, partly because of the projected 200,000-foreigner exodus.

However, in part due to the smaller-than-expected job losses and foreigner exodus, Ms Song now says home prices could dip 25 per cent in 2009 before recovering 10-15 per cent in 2010.

The main cause for the change of view is a recent update by economist Cem Karacadag, who was part of the team that in January predicted that some 200,000 foreigners and PRs might leave Singapore in 2009 and 2010.

Credit Suisse said then that the potential drop in employment and population would have far-reaching implications for the economy.

But in a recent report, Mr Karacadag said job losses have not been as large as he had feared.

‘Singapore’s labour market has held up remarkably well in this recession and much better than we had anticipated,’ he said in a June 19 economics note.

Among various things, employers appear to have adjusted labour costs through salary cuts rather than cuts in headcount, he said.

Job losses so far this year have been surprisingly low against unprecedented job gains in 2007 and 2008, the note said. Net employment fell by only 6,200 in Q1 2009, although Singapore’s real GDP was 10 per cent lower in Q1 2009 compared to Q1 2008.

Mr Karacadag also upgraded his forecast for Singapore’s 2010 GDP growth to 4.4 per cent, from 3.9 per cent.

Source : Business Times – 29 Jun 2009

LOWER rents and operating costs are luring some entrepreneurs into expanding their food and beverage businesses, even in a recession year.

But because it is a recession year, they are going for mid-priced bistros, cafes and bars which are easier on the pocket than fine dining restaurants.

The next few months will see more new eateries opening, as more retail space comes onstream, said Restaurant Association of Singapore president Ang Kiam Meng, although he could not give exact figures.

Ion Orchard alone, for example, will have over 60 F&B outlets when it opens next month. At Orchard Central, about 35 per cent of its tenants are F&B outlets.

Mr Eric Cheng, executive director of real estate company HSR, estimated that rents for F&B tenants have dropped by about 16 per cent, with downtown rates ranging from $12 per sq ft (psf) to $25 psf, and $7 psf to $15 psf in the heartlands.

It was the softening rents downtown that led AC2 Group, which runs the Gelare chain of ice-cream cafes and steakhouse The Prime Society, to expand.

It opened Society Bistro at One Fullerton at the end of last month. Next month, it will open Society Bar at Chulia Street, and a casual dining seafood restaurant called The Nautical Project at Ion Orchard.

AC2’s director Ingrid Prasatya estimated she is paying about 10 per cent less in rent with the new outlets than if she had expanded last year.

Renovation and equipment costs have also come down. Restaurateur Michel Lu, for instance, reckons he has saved about 20 per cent on the cost of setting up his latest outlet, Hacienda Cafe, at Tanglin Village next month. It has also helped that some of his competition has closed or downsized, freeing up good culinary and managerial talent, he said.

Figures from the Statistics Department’s Catering Sales Index also show a general year-on-year increase in restaurant receipts every month since September last year.

A survey of 1,200 Singaporeans conducted between April and last month by UM Consulting also found nearly 60 per cent of respondents projecting they would spend the same amount, or more, on dining out in May, June and July.

Still, a recent Nielsen survey said spending on fresh food last year had gone up as more people ate at home to save money.

Trends are reflecting consumers’ desire to stretch their dollar. For example dishes cost from $8 to $20 at Society Bistro, while a gourmet sandwich at Hacienda Cafe will not cost more than $15, in line with Mr Lu’s other cafe, Prive.

‘During this recession, you don’t open $2 million restaurants, but something that has more cross-market appeal, and is more efficient to open,’ said Ms Shareen Khattar, managing director of the Marmalade Group, which is moving its Marmalade Pantry outlet at Palais Renaissance to a bigger space at Ion Orchard. The group is also looking to open two more Toast cafe outlets by the year-end.

Mr Ang of the Restaurant Association said landlords may slash rates even more. Also, the perennial manpower shortage has not been eased even with the economic crisis triggering job losses. Mr Ang, who owns the Jumbo seafood chain, said it had been difficult to find staff for two new eateries which opened this month, and another opening next month.

But for restaurateurs with the stomach for taking the plunge, Singaporeans still have an appetite for dining out. ‘People aren’t going to buy a Bentley but they still need to eat and drink,’ said Mr Lu.

Diners such as Ms Amizadai Lee, 31, a wedding video producer, are looking forward to a wider spread: ‘I think, particularly in a time like this, people would appreciate having more affordable options without compromising on quality and ambience.’

Source : Straits Times – 29 Jun 2009

The Singapore private homes market has been seeing quite a bit of activity on improved sentiment, in contrast to the prevailing weak economic climate.

New home sales have remained strong, crossing the 1,000-unit mark every month since February, and the sentiment has spilled over to the resale market.

Last week’s data from Jones Lang LaSalle showed that resale home deals had risen 71 per cent so far in the second quarter to 1,464 units, from 856 units in the first quarter.

Even the prime homes market – believed to be the worst-hit sector, with prices and rents dropping significantly from figures in the boom days of 2007 – saw higher rents lodged at the top end.

A few luxury home deals were done at higher prices, bucking a downward trend that began a year ago, said CB Richard Ellis (CBRE).

For instance, a furnished high-floor 2,885 sq ft unit at the posh Ardmore Park was leased out in April at $19,500 a month, and another similar unit there was renewed at $20,000 a month.

It was only a few months ago when Ardmore Park units were leased out for $15,000 to $17,000 a month.

Over at Grange Residences in Grange Road, a well-renovated 2,853 sq ft unit recently fetched $20,000 a month, even though there were other similar-sized units available at a lower rent, said CBRE.

Demand for rental homes so far in the second quarter came from new expatriates as well as existing ones who were renewing their leases or moving to new premises.

CBRE executive director (residential) Joseph Tan said that even as multinational corporations in the financial sector are still reducing their expatriate teams, the commodity, petrochemical and energy sectors have been bringing in more expatriates recently.

But not all leases are at higher levels. CBRE said rents for the lower-tier apartments in prime areas and the rest of Singapore are lower.

Explaining the slight rise in luxury home rents, it said some expatriates whose housing budgets have not been cut took the chance to upgrade to better or bigger units as rents have generally fallen in the past year. Also, traditionally, the second quarter sees a high level of leasing activity because expatriates are getting ready for their children’s new school year at international schools here, experts said.

‘New expatriates will always make a trip in May or June to search for a place,’ said Savills’ director of residential leasing, Mr Patrick Lai. ‘Based on the leasing activity in May and June, top-end rents appear to have stabilised. There may be some downward rental movements for condos but I don’t expect any dramatic upheavals in rents.’

Property consultancy Jones Lang LaSalle’s head of residential, Ms Jacqueline Wong, said that rents for luxury apartments did bounce back slightly recently but it is just a ’slight blip’.

It is due to a temporary short supply, she added. Quite a lot of prime projects with large luxurious apartments were sold en bloc during the boom. But they will be replaced with additional new prime supply from perhaps next year, she said.

Also, luxury home landlords with holding power are unwilling to reduce their rents, said CBRE.

Analysts at research houses have recently highlighted falling prime rents as a key concern in the residential market, given the expected rise in completed condos in the central region. For instance, Credit Suisse recently said in a report that prime rental yields could fall to 2.4 per cent, from 3.4 per cent, though they would still be higher than bank deposit rates.

Source : Sunday Times – 28 Jun 2009

Where do you see this?

In financial news articles, classified advertisements and auction houses’ list of properties on offer.

What does it mean?

A mortgagee sale takes place when a bank force-sells a property after it has repossessed it, when the borrower cannot pay his mortgage. The repossessed property is usually sold via an auction by the bank – and often as a last resort – to recover the debt of the defaulted borrower.

Why is it important?

Such forced sales can throw up great bargains for investors.

A surge in the number of repossessed properties is a sign that the economy is not looking good. It signals a worsening property slump.

For instance, the number of such properties shot up at auctions during the economic crises of 1986 and 1998, when many homeowners struggled to pay their mortgage instalments.

But this time round, the number of mortgagee sales has not risen.

So you want to use the term. Just say…

‘I have been monitoring auction houses’ list of mortgagee sales to see if I can get my hands on a real bargain.’

Source : Sunday Times – 28 Jun 2009

Young people in Singapore are the new darlings of retailers, going by the efforts made by malls to woo them.

While they lack earning power, they have ’staying power’ – they linger longer and hang out in groups.

The 1980s saw a rash of malls, but only a few became youth hangouts. There were the Centrepoint Kids, and a teen haven nestled at Far East Plaza, still a popular hangout.

Today, it is the ‘malls the merrier’ for young peoples, whose pick of hip places includes The Heeren, Cathay Cineleisure, Square 2 and new player Iluma at Victoria Street.

Other malls with youth enclaves include Marina Square, Suntec City and Bugis Junction.

Not to be outdone, Ngee Ann City and Orchard Central are also carving out space for the younger clientele.

By the end of the year, Ngee Ann City will have a lifestyle cluster called Eighth Floor, comprising 19 hip stores and food and beverage outlets modelled after Tokyo’s trendy Aoyama district.

The new Orchard Central – its soft opening will take place this Thursday – has a retail section of more than 30 small stalls called The Ramp, which is a platform for budding entrepreneurs to showcase their wares.

‘The country just became a giant shopping mall, but I’m not complaining,’ said private university student Maia Goh, 23, a confessed shopaholic who shops for clothes online or at Orchard Road.

Retailers and mall operators agree that the youth dollar can be a burgeoning one, provided the right buzz can be created.

‘This is definitely a growing market. Youth these days are more independent and will choose their own hangout places and what they will spend on,’ said Cathay Organisation’s chief executive officer Suhaimi Rafdi.

The company owns two youth-oriented malls, Cathay Cineleisure and The Cathay, which target those aged between 14 and 35.

Ms Chua Chor Hoon, senior director and head of South-east Asia research at property consultancy DTZ Debenham Tie

Leung, said it is a common strategy for malls to differentiate themselves and target niche groups, like youth, tech buffs or high-end fashion fans.

Must-haves in a youth-oriented mall: entertainment outlets like cinemas, gaming arcades, karaoke, cheap and unusual food and beverage outlets, and one-of-a-kind shops selling edgy fashion.

Location and the competition may be decisive factors.

‘Youth today are fashion- conscious and have more spending power due to more affluent and doting parents.

‘Malls that are near educational institutions have a ready catchment of students,’ Ms Chua said.

While their spending power may not match that of working adults, they make up for it in numbers since they hang out in groups.

At Cathay Cineleisure and The Cathay, the average time spent by young people in the malls is 50 per cent higher than that at some other malls, said Mr Suhaimi.

But young people are more selective about what they spend on and are also more sensitive to trends, said a spokesman for Iluma, the new seven- storey mall in the Bugis area that caters to the youth, tertiary students and young professionals.

‘It’s not so easy or straightforward to tap on the youth market successfully,’ she said.

Still, retailers are banking on the willingness of young people to spend despite the economic downturn.

Mr Alfred Tan, 37, who runs FuncDeko, a popular shop in Far East Plaza selling vintage fashion and knick-knacks, said: ‘Youth today are resourceful and have the time to get the cheapest deals from shops, blogshops and flea markets.’

Indeed, online shopping is a big competitor for the youth dollar, said Dr Lynda Wee, chief executive officer of retail consultancy and training firm Bootstrap.

‘They have more options. They may not spend their dollar at the mall. But they want to hang out, so malls have to be more like social hubs selling services too,’ she said.

Ms Elim Chew, founder of pioneering streetwear store, 77th Street, felt that what will attract young people are the ‘intangibles’. These include a sense of association, vibrancy, buzz and high energy.

Dr Wee agreed. ‘Malls that have targeted youth have not quite raised the bar,’ she said. She cited youth-oriented malls and areas like APM Mall in Hong Kong and Harajuku in Tokyo as having the ‘It’ factor.

Successful youth-oriented malls like APM do not keep to the regular hours of the working adult. Its retail shops stay open till midnight, its restaurants go on till 2am, and its entertainment and karaoke outlets open till dawn.

Undergraduate Suffian Rahiman, 24, bemoaned the fact that there are too many big international labels here, rather than smaller independent designers.

‘There are very few mid-price options for young men who want classic and fashionable clothes,’ he said.

There is also a perception that Singapore’s retail scene is saturated.

But, going by their pitch, mall operators and retailers seem determined to cater to the youth-oriented crowd. Nor are they worried about the increasing competition.

‘The cake is big enough for everyone who can improve and do their best,’ said Ms Chew.

Source : Sunday Times – 28 Jun 2009

Look out for a three-storey lookout tower.

Coming up too are a new shopping complex linked to a condominium, an air-conditioned bus interchange and a remake of Yishun Pond. –PHOTO: HDB

That is one attraction that residents in Yishun can look forward to when the town centre is transformed in the coming years.

Coming up, too, are a new shopping complex linked to a condominium, an air-conditioned bus interchange and a remake of Yishun Pond.

Yishun is one of three towns selected for rejuvenation under the Housing Board’s Remaking Our Heartland initiative. The other two are Punggol and Queenstown.

The HDB shared its plans with reporters yesterday.

The lookout tower at Yishun Pond, beside the new Khoo Teck Puat Hospital, will offer panoramic views of the town centre when its construction is completed by the end of next year.

The 12.5m-tall tower will have a 94m-long curving ramp that will take visitors to the top.

Said Ms Nina Yang, senior vice-president at CPG Consultants, the firm in charge of the design: ‘The tower is designed according to the theme of nature and the metamorphosis of a butterfly. Similarly, it showcases the metamorphosis of Yishun New Town too.’

The area near the MRT station will have a shopping complex integrated with housing. The retail space is touted to exceed that of the Northpoint Shopping Centre. A tender for the project is expected to be called in 2011.

By next year, other developments that will be ready include an upgrading of the pedestrian mall and a heritage corner and trail.

Mr Fong Chun Wah, director for building quality at HDB, said the upgrading of the pedestrian mall will make it more elderly- and handicapped-friendly.

It will have ramps and newly paved floors.

Engineer Bryan Tan, 33, an Yishun resident for 10 years, is looking forward to the changes.

‘I know that these projects will still take some time to complete, but I’m very glad they are making the bus interchange air-conditioned as it is rather old now,’ he said.

Source : Sunday Times – 28 Jun 2009