July 2014

With fewer launches, new private home sales slump

Private residential property sales slumped again in June after a burst of activity in the previous month, with developers scaling back new launches in the expectation that the school holidays and the World Cup would further sideline potential buyers in an already cautious market. Sales of new private homes plunged 68 per cent from May’s 1,488 units to 482 homes, data released by the Urban Redevelopment Authority (URA) showed yesterday. This came as developers launched only 418 homes last month, compared with 1,819 units in May. Last month’s showing was a reversion to the sort of results seen in the first part of the year, which saw an average of 638 units sold each month between January and April. Analysts said the figures showed that developers are calibrating launches to ensure units do not flood into the market when buyers remain cautious. “Having released a handful of well-received projects in May … developers focused on moving units in previously-launched developments and generally avoided releasing new projects amid the June school holidays and World Cup season,” said Ms Chia Siew Chuin, director of research and advisory at Colliers International. There were only two new project launches last month: Trilive at Tampines Road, which sold 19 out of the 80 newly-offered homes at a median of S$1,605 per square foot (psf), and The Crest at Prince Charles Crescent, which moved 35 out of the 132 debuting units at a median of S$1,682 psf. However, there was stronger demand at two previously-launched developments, which led the sales league table for the month. The 944-unit Coco Palms at Pasir Ris Grove released another 100 homes for sale and sold 55 of them at a median price of S$1,014 psf, making it the best-selling development. The Panorama at Ang Mo Kio, which was re-launched in May at a lower price, came in second by moving 49 condominiums at a median of S$1,287 psf even though no new units were offered last month. These two projects helped the Outside Central Region (OCR) to remain the most active with 269 sales. The Rest of Central Region (RCR) recorded 167 transactions while the Core Central Region (CCR) remained fairly muted with only 46 homes sold. Besides school holidays and the World Cup keeping buyers on the sidelines, sentiment continued to be affected by the various government measures which have hit sales and prices, noted Jones Lang LaSalle’s national director of research and consultancy, Mr Ong Teck Hui. “The fundamental weakness in demand due to the Total Debt Servicing Ratio (TDSR) framework and other cooling measures prevents any market pick up from being sustained. After TDSR, there is just not enough demand to continually soak up unsold units, so we are seeing sales progress slowing significantly or even stalling completely after the initial launch,” he said. The latest set of figures by URA brought total new homes sold by developers to around 4,500 units in the first half of this year, 56 per cent lower than the same period in 2013. Analysts said the cautious sentiment is expected to persist in the coming months. “With the traditional lull period over, launch activity is expected to pick up slightly. However, with fewer affordably-priced mass market projects in the pipeline, buying volume is not expected to improve extensively. Furthermore, the slowdown in buying momentum — even for popular projects — indicates that buyers continue to face inertia to commit,” Ms Chia said. Mr Nicholas Mak, executive director at SLP International Property Consultants, said there is a growing possibility that annual sales may fall below 11,000 units as the property curbs are expected to stay in place at a time when the local economy is only growing moderately. “If this happens, it would be the lowest volume since the financial crisis of 2008, when developers sold only 4,264 private homes.”

Source : Today – 16 Jul 2014


HDB resale flat sellers can ask for extension of stay

Sellers of Housing and Development Board (HDB) flats will be able to negotiate with their buyers for a temporary extension of stay in their flats, allowing them to stay in their former homes for up to three months, the HDB said on Tuesday (July 22). The new rule, which takes immediate effect, will facilitate sellers who are transiting to their next homes, including those who may need more time for renovation or those awaiting funds from the sale of their current flats, the HDB said. “We settled on a three-month period as we think it should be sufficient time for flat sellers to complete the purchase of their next home, or make the necessary arrangements to shift into their next home,” said Minister for National Development Khaw Boon Wan in a blogpost. He added that the HDB estimates that about 15 per cent of total resale transactions, or about 2,700 households a year, will stand to benefit from this policy tweak. Flat sellers who wish to extend their stay temporarily must have committed to buy another home – whether HDB flat or a private property – in Singapore at the time of the resale application. In other words, they must have exercised an Option to Purchase or signed a Sale and Purchase Agreement, the HDB said. The request for the extension of stay is to be submitted to HDB at the time of the resale application. But HDB clarified that buyers must start paying the monthly instalments of their housing loans, property tax as well as service and conservancy (S&CC) charges once the resale transaction is completed and they become legal owners of the flat. Only the Minimum Occupancy Period will commence on the day the extension (of stay) ends. Details of the extension, including the duration and monetary compensation, if any, must be mutually agreed upon by both parties. Real estate company ERA lauded the move, saying it is “great news” for flat sellers. “Most HDB flat owners are single home owners. When you sell your flat, there may be transitional issues as the completion timing of the flat purchased may be later than the completion time of the flat sold, said Mr Eugene Lim, Key Executive Officer at ERA, in a statement on Tuesday. “It is something the market has been pushing for some time and it is certainly a relief that we now have an official policy to allow for this temporary extension of stay for the seller after the completion of the sale.” Mr Lim added that the move may help to boost resale HDB volume in the months to come.

Source : Channel NewsAsia – 22 Jul 2014


‘Too early’ to ease property cooling measures: MAS

The property market may be stabilising but it is still “too early” to ease the cooling measures that were introduced in recent years, the Monetary Authority of Singapore (MAS) said on Thursday (July 24). This is because home prices remain elevated while global interest rates are at historical lows, MAS Managing Director Ravi Menon said. Speaking at the release of MAS’ annual report for the 2013/14 financial year on Thursday (July 24), Mr Menon said property prices have risen 60 per cent over the last four years but have declined by just 3.3 per cent over the last three quarters. He also said relaxing property measures at a time of low interest rates may set off another spiral of price increases. Some Singapore households remain highly leveraged, and they would need time to reduce their debt levels, he added. Mr Menon said the measures introduced to cool Singapore’s housing market can be divided into two categories – structural measures such as the total debt servicing ratio which are meant for the long term, and cyclical measures such as loan-to-valuation limits and stamp duties that can be “recalibrated according to market conditions”. On the whole, it would be premature to ease property cooling measures now as it was important to secure the gains made in stabilising the market and restoring financial prudence.

Source : Channel NewsAsia – 24 Jul 2014


Prices, occupancy of industrial space decline in Q2

Prices and rentals of industrial space continued to moderate in the second quarter, as industrial occupancy rates continued to fall, according to a quarterly report by JTC. Released on Thursday (July 24), the report said industrial occupancy rates in the second quarter fell by 0.9 percentage point from the previous quarter to 90.7 per cent – the lowest level since late 2007. For multiple-user factory space, the occupancy rate fell by 1.1 percentage points to 87.3 per cent. On a year-on-year basis, the occupancy rate of the overall industrial property market fell by 1.7 percentage points, from 92.4 per cent to 90.7 per cent. For multiple-user factory space, the occupancy rate fell by 3.1 percentage points, from 90.4 per cent a year ago to 87.3 per cent in the second quarter. PRICES, RENTALS STABILISE Rentals of industrial space in the second quarter fell 0.1 per cent from the previous quarter, while rentals of multiple-user factory space remain unchanged. On a year-on-year basis, rentals of industrial space rose by 5 per cent in the quarter, significantly slower than the average increase of 10.2 per cent per year over the past four years. For multiple-user factory space, rentals rose 4.3 per cent on a year-on-year basis, also significantly slower than the average increase of 9.8 per cent per year over the past four years. Prices also continued to stabilise in the second quarter, rising marginally by 0.7 per cent on a quarter-on-quarter basis. For multiple-user factory space, prices rose by 2.5 per cent from the last quarter, mainly due to a higher proportion of freehold properties transacted. On a year-on-year basis, prices for industrial space rose by 3.9 per cent, significantly slower than the average increase of 18.8 per cent per year over the past four years. Similarly, the 6.2 per cent year-on-year increase in prices of multiple-user factory space was also significantly slower than the average increase of 19.1 per cent per year over the past four years. UPCOMING SUPPLY According to JTC, the Government will continue to monitor the overall industrial property market and where necessary, release more land with a range of sizes to suit different industry needs. JTC also said it will continue to develop more specialised industrial land with features such as shared facilities and services to support the growth of key industry clusters and catalyse new ones. About 1.8 million sqm of industrial space is expected to come on-stream in the second half of this year, out of which 400,000 sqm are multiple-user factory space. Between 2015 and 2017, an average of about 1.6 million sqm of industrial space is expected to come on-stream every year.

Source : Channel NewsAsia – 24 Jul 2014


Spring Grove could be largest en bloc sale in Singapore

Spring Grove, a condominium along Grange Road, has been put up for sale by tender. According to its marketing agent Knight Frank Singapore, the owners are expecting offers in excess of S$1.39 billion. This includes a lease top-up premium for a fresh 103-year lease. That will make it the the largest ever enbloc sale in Singapore, in terms of value. Spring Grove sits on a site with a land area of about 263,600 square feet (sq ft). Knight Frank says it is the largest residential plot along Grange Road to be put up for sale. Currently, there are three blocks of 20-storey apartments with 325 residential units on the site. It also includes the conserved Spring Grove House, built in the late 19th century, which has been integrated with the existing development as a clubhouse. A price of S$1.39 billion translates to S$2,512 per square foot per plot ratio, based on the maximum permissible gross floor area of about 553,377 sq ft. Knight Frank says, the breakeven cost is expected to be around S$3,400 psf to S$3,500 psf.

Source : Channel NewsAsia – 16 Jul 2014


Growing demand for data centres in Singapore

With growing internet connectivity, there is increasing demand for data centres which house hardware servers to support networks and databases. Industry observers say demand in Singapore is also driven by its status as a regional hub. Keppel T&T already owns two data centres in Singapore and it is building a third. It says growth in internet and mobile usage, as well as cloud computing, is driving demand for data centre space. Industry observers also add that the need for renewal and demand from overseas companies are also adding to the call for more space. “A lot of data centres are coming in from areas which weren’t expected due to unusual demands. For example, the effects of the Japanese tsunami had an impact on the number of Japanese organisations looking to have either a secondary, or in some cases, a primary data centre in the Singapore market,” said Simon Piff, associate vice president of enterprise infrastructure at IDC Asia Pacific. “That doesn’t look like it’s going to go away in the near future because… a number of data centres — about 22 per cent of data centres — in Singapore are 10 years old or more. They’re going to need to be refreshed soon so it looks like it is a healthy market for Singapore in the future.” Industry experts say the amount of information transmitted across networks is growing at a very quick pace. There is also a push to maintain multiple data centres to enable swift recovery from network failure and data loss. Developers such as CitySpring Infrastructure and Keppel T&T are keen to tap into this growing segment. CitySpring is planning to build a data centre in Woodlands, in conjunction with Japan’s Shimizu Corporation. “Telecoms sector is one of our key sectors of focus,” said Tong Yew Heng, CEO of CitySpring Infrastructure Management. “We are interested in infrastructure that will provide us with long-term stable cash flows. Therefore, we are focused on telecom infrastructure that can deliver long-term stable cash flows — data centre is one example.” The Infocomm Development Authority is also building a data centre park in collaboration with the Singapore Economic Development Board and JTC Corporation. The complex is expected to provide some 1.1 million square feet of data centre space. Both the IDA and CitySpring projects are scheduled for completion in 2016, while Keppel T&T’s development is slated to be ready in the third quarter of this year.

Source : Channel NewsAsia – 1 Jul 2014


Punggol Settlement outlets almost fully occupied

More than 90 per cent of the outlets at the new food and beverage cluster at Punggol Point have been taken up; three months after the site received its Temporary Occupation Permit in April 2014. Tenants at Punggol Settlement hope it will become the next go-to seafood dining location after East Coast. With a growing population in the area and more recreational facilities coming up, some tenants say they are not too concerned about the so-called far-away place, though others add the lack of public transport to the area is a concern. Talks are ongoing to start a shuttle bus service from the nearby Punggol MRT station. “Many of the tenants are already operating right now. The rest are finalising their renovations and they should be operating soon,” said Sean Fong, marketing agent of Punggol Settlement. He added that the public can experience “full seafront dining at all restaurant units.” “Many years back, there were a few popular restaurants here and they were selling seafood,” said Francis Ng, owner of House of Seafood. “I hope I can bring back those memories to those youngsters. A lot of youngsters are staying here, so I think there’s a lot of potential.”

Source : Channel NewsAsia – 14 Jul 2014


Centurion diversifies into UK student accommodation

Singapore’s Centurion Corp, which is best known for its worker dormitories, is diversifying into student accommodation in the United Kingdom with the proposed acquisition of four properties for £77 million (S$164.5 million). The four properties — Manchester Student Village, Manchester Student Village South, The Grafton in Manchester and Cathedral Campus in Liverpool — have a total of 1,906 beds. The transaction, which is likely to be completed in September, will be Centurion’s largest acquisition to date and its first in the UK, it said in a statement on Wednesday (July 16). Mr Kong Chee Min, Centurion’s CEO, said the proposed acquisition is in line with the firm’s strategic intent to expand its global footprint and build a sizeable student accommodation portfolio in key global education hubs. “The overall trajectory of the UK higher education market has been one of growth, and we believe that this acquisition will allow us to capitalise on the continued demand for quality student accommodation,” he said. “The large bed capacity of this portfolio in the UK also provides us with immediate scale and a good platform for the group’s future investments in the country,” he added. According to Centurion, the three Manchester properties are freehold, while Cathedral Campus in Liverpool is a long leasehold property with 243 years remaining. The four properties enjoy high occupancy rates and Centurion believes there is potential to enhance or redevelop the properties to increase bed capacity. Centurion, formerly known as SM Summit Holdings, owns and operates worker accommodation in Singapore and Johor, as well as a storage disc manufacturing business. The firm is keen to diversify into related areas and it has purchased student accommodation in Melbourne, Australia, as well as land in Western Australia that it plans to develop into short-stay accommodation for workers and business executives in the mining industry.

Source : Channel NewsAsia – 16 Jul 2014


More deals done, but resale private home prices fell to 18-month low in June: SRX

Resale prices for non-landed private residential homes continued to fall in June, reaching a 1.5-year low, according to the latest report by the Singapore Real Estate Exchange (SRX) on Monday (July 14). Overall resale prices fell 1.4 per cent month-on-month to hit an 18-month low, with prices at their lowest since December 2012, according to the SRX Flash Report. Compared to the price peak in January this year, June prices are 4.7 per cent lower. Prices fell for all three regions – Rest of Central Region (RCR), Core Central Region (CCR) and Outside Central Region (OCR) – with the city fringe area leading the fall by 3.2 per cent. This was followed by the core central area and the suburbs, which dropped 1.7 per cent and 0.3 per cent, respectively, SRX said. The majority of districts – or 15 of 24 districts – saw zero or negative median Transaction Over X-value (TOX) in June. For districts with more than 10 resale transactions, districts 15 (Katong, Joo Chiat and Amber Road) and 10 (Bukit Timah, Holland Road and Tanglin) had the lowest median TOX at negative S$50,000 and negative S$37,000, respectively. The number of resale transactions went up though, registering a 7.9 per cent month-on-month growth to reach an estimated 452 deals in June. Resale volume has gone up by 53.7 per cent since the beginning of year, the report said. In terms of rental deals, prices slipped 0.8 per cent compared to May while volume went up 2.2 per cent over the same period. An estimated 3,151 whole units were rented out last month, according to SRX.

Source : Channel NewsAsia – 14 Jul 2014


Land at King George’s Avenue for public housing development

The Housing and Development Board (HDB) and Singapore Land Authority (SLA) has earmarked a 1.23-hectare plot of land at the junction of Syed Alwi Road and King George’s Avenue for public housing development. In a joint statement on Monday (July 14), the agencies said the land is zoned for residential use in the Master Plan and comprises mainly of vacant State land and a private industrial property at No. 16 King George’s Avenue. To facilitate the development, the Government will be acquiring the private property under the Land Acqusition Act. The SLA gazetted the land affected by the acquisition on Monday, and both agencies are in touch with the affected landowner to assist with any queries and concerns, the statement said. More information on the future public housing development will be provided when the plans are ready, the agencies said.

Source : Channel NewsAsia – 14 Jul 2014


Shanghai approves city’s most expensive homes amid downturn

China’s financial centre, Shanghai, is allowing a developer to seek the highest-ever home prices in the city, in an effort to boost its sluggish luxury home market. Shenzhen Overseas Chinese Town can set prices as high as 298,000 yuan (S$59,700) per square metre for its high-end residential properties, said the website of the city’s real estate trading centre. This is a record asking price for the metropolis, said SouFun Holdings, China’s biggest real estate website, and realtor Centaline Group. Chinese developers are required to obtain approval from the government and register their sale price at the local housing authority. “This is a kind of policy-easing, as the government is trying to boost buyers’ confidence,” said Mr Liu Yuan, a Shanghai-based researcher at Centaline. “If developers are allowed to sell at a higher price, then people will think the market is not as bad as they may have thought.” Some Chinese cities have already started to ease property policies amid a slowdown in the market caused by the government’s four-year effort to rein in prices and stamp out speculation. Home sales from January to May slumped 10 per cent from a year earlier, a stark contrast to the 27 per cent surge last year, even though developers have tried to boost sales by reducing prices and offering incentives. Pre-sale approvals are part of the government’s property policies to regulate the market by placing caps on home prices. First-tier cities such as Beijing, Shenzhen and Guangzhou, where home-price gains were among the biggest last year, have once rejected pre-sale permits for projects that had target selling prices deemed too high by local officials. Shanghai on Wednesday sold a 6,885sqm plot in the city’s downtown area for 577 million yuan, implying a cost of 85,513 yuan per sqm of buildable space, the most expensive in the country, China Securities Journal reported yesterday, without citing anyone.

Source : Today – 11 Jul 2014


Bulk sale: Treasure on Balmoral

In a further sign that the high-end residential segment remains stuck in the doldrums, one developer is making the relatively bold move of offering all units in a District 10 condo in a bulk sale at a relatively cheap price, in an attempt to improve cash flow. Developed by Hiap Hoe, the 48-unit Treasure on Balmoral is being offered at a guide price of S$191.4 million, or S$1,850 per square foot (psf), its marketing agent Savills said. The project was first launched in January last year but managed to log only one sale, which was subsequently dropped, Urban Redevelopment Authority data showed. “The buyer chose to give up the purchase as a result of the announcement of fresh market-cooling measures,” said Savills managing director Steven Ming, who added that Hiap Hoe is looking to monetise the project and explore other investment opportunities. Analysts said while there have been several bulk sales in the past, developers usually resort to such a move only when sales are slow. The high-end market has been the hardest hit by repeated rounds of cooling measures as well as the Total Debt Servicing Ratio framework. Between January and May, developers sold 203 new homes in this segment, one-fifth the 1,017 units sold in the same period last year. “It is no secret that the high-end market is badly affected by the downturn, which is why we’re seeing developers working hard to offload their projects. And for this developer, (a bulk sale) is one way for them to exit this particular investment and move on,” said Mr Nicholas Mak, executive director of SLP International Property Consultants. “It’s a sign of a challenging market conditions in the high-end segment. When the market is good, I don’t think developers would take this route because selling individual units is more lucrative. By selling in bulk, they have to offer some discounts.” Mr Desmond Sim, CBRE’s head of research, said Hiap Hoe will be relieved of the risk and financial burden of holding onto unsold units if this strategy is successful. “If there’s a buyer, Hiap Hoe can offload everything in one transaction even if the profit margin is smaller. If they sell the units individually, it’s very difficult to sell out quickly in the current soft market and, in the long run, the unsold units will put pressure on their balance sheets,” said Mr Sim. “The location of the project is not bad and S$1,850 psf is quite a bargain, so if someone has the appetite for this, it’s good for the developer’s cash flow.” He added it remains to be seen whether the sale would go through. However, Mr Ming is optimistic that the pricing would attract some interest. “What we have here is a rare opportunity for private investors or ultra-high-net-worth individuals to acquire a well-located and high-quality product as an investment property or a strata sales exit in future. “We believe this opportunity will attract wide-ranging investors, as many will see mid-to-long (term) value at this guide pricing.”

Source : Today – 10 Jul 2014


Warehouse rents fell for 3rd straight quarter in Q2

Rents for prime warehouse space in Singapore weakened for the third straight quarter in the April-June period, according to the latest report by property services firm Colliers International on Friday (July 11). It estimates that the average monthly gross rents of ground-floor warehouse space fell 1.6 per cent quarter-on-quarter to S$2.54 per square foot per month. The average rent for upper-floor warehouse space declined 2.4 per cent to S$2.04 per square foot. However, the average rent of prime conventional factory space increased 2.8 per cent for ground-floor space to $2.55 per square foot and 0.5 per cent for upper-floor space to $2.14 per square foot. Overall, the Colliers report says that activity in the industrial property leasing market gained momentum in the April-June period, but sales remained weak. In a separate report on the industrial property sector, Savills also said that leasing activity remained active in the second quarter, with 1,426 deals. However, sales volume fell 28.2% quarter-on-quarter. Savills says a small number of manufacturers have started moving their operations to the Iskandar region, in an effort to reduce costs.

Source : Channel NewsAsia – 11 Jul 2014


Industrial property leasing gains momentum, but sales weak Leasing activity in Singapore’s industrial property market continued to gain momentum in the second quarter of this year, but sales remained weak. This is according to the latest quarterly report by property consultant, Colliers International. It said that the outlook for the sector for the rest of the year is mixed. Colliers said the increase in the number of committed leasing deals was driven mainly by renewals, and relocation and consolidation activities. Average monthly gross rents of prime factory space increased 2.8 per cent quarter-on-quarter to S$2.55 per square foot for ground-floor space, and 0.5 per cent quarter-on-quarter to S$2.14 per square foot for upper-floor space. In contrast, strata-titled industrial sales remained subdued as buyers adopted a cautious and selective buying stance. Going forward, the report said that the leasing market is expected to remain healthy, supported by the generally-better economic sentiment. However, sales volume is projected to remain low. Source : Channel NewsAsia – 10 Jul 2014


Industrial property leasing gains momentum, but sales weak Leasing activity in Singapore’s industrial property market continued to gain momentum in the second quarter of this year, but sales remained weak. This is according to the latest quarterly report by property consultant, Colliers International. It said that the outlook for the sector for the rest of the year is mixed. Colliers said the increase in the number of committed leasing deals was driven mainly by renewals, and relocation and consolidation activities. Average monthly gross rents of prime factory space increased 2.8 per cent quarter-on-quarter to S$2.55 per square foot for ground-floor space, and 0.5 per cent quarter-on-quarter to S$2.14 per square foot for upper-floor space. In contrast, strata-titled industrial sales remained subdued as buyers adopted a cautious and selective buying stance. Going forward, the report said that the leasing market is expected to remain healthy, supported by the generally-better economic sentiment. However, sales volume is projected to remain low. Source : Channel NewsAsia – 10 Jul 2014


Prime office rents in CBD expected to rise by 10% Property analysts are expecting prime office rents in the central business district (CBD) to rise by 10 per cent over the next 12 to 18 months. The increase will be driven largely by demand for Grade A office buildings in the CBD. But if rents there spike significantly, analysts warn that some tenants could move to the suburban areas. Market watchers have said that rent at Grade A office buildings in the CBD area has gone up by about 7 per cent in the past year. But if it continues to rise further, cost-conscious tenants may start thinking about moving out. Donald Han, managing director of Chestertons, said: “The increase in suburban rentals would probably be much less than that of A Grade rentals in the CBD, so we would expect there would potentially be an attractive proposition for tenants to relocate some of the operations. “The other push out of the CBD is the lack of car parking in the area, plus higher cost of entry if you are driving.” CBRE Research said that currently, suburban areas account for about a quarter (24 per cent) of the 54.6 million square feet of total office space stock in Singapore. Between 2014 and 2017, some 5.4 million square feet of new office space is expected be added in the CBD, and just under 1 million square feet outside the city. Desmond Sim, head of CBRE Research Singapore, said: “The key projects would be Westgate which will be completed end of this year, another key project in Jurong would be Vision Exchange, that will likely come in at 2017. “Apart from that, there will be pockets of office components that would come in, not forgetting Paya Lebar Square, the fully strata titled development that is also expected to come in this year.” CBRE said that in the second quarter of this year, the average monthly rental rate for Grade A office buildings in the CBD is S$10.60 per square foot (psf), compared to S$6.55 psf for offices in the suburban areas. Analysts said new grade A office space in suburban areas like Jurong and Buona Vista has been well-received by companies. But convincing staff to move away from the CBD will take some work. In the financial services sector for example, recruitment firm Robert Walters said that it has seen more companies seeking advice relating to relocation in the past 12 to 18 months. Orelia Chan, manager for financial services at Robert Walters, said: “We do see more relocations coming from CBD to outskirts areas, such as Changi or Jurong as well. What they usually do is they would already have a plan, they may come to us and see what they could do extra to retain the staff.” Robert Walters said that to encourage staff to relocate, firms can provide shuttle services, transport allowance and flexi-work arrangements. Companies may also improve the work environment and range of amenities at the new location, for example, by providing a better canteen, a gym and resting areas for staff. Source : Channel NewsAsia – 9 Jul 2014


New URA rules to affect expansion plans for hostels, hotels There has been growing demand to convert land for use as new hotels, boarding houses and backpacker hostels. As such, the Urban Redevelopment Authority (URA) said it is tightening guidelines to ensure there is a good mix of commercial uses to meet the needs of visitors and residents. Earlier this week, the URA issued a circular to the industry, outlining new measures to curb the potential proliferation of such developments. One of those affected by the new guidelines is Rucksack Inn. The hostel has grown nearly 5 times over the past five years in terms of the number of beds. It started as a 38-bed hostel, but now has 226 beds across three outlets in Singapore. Rucksack Inn has three outlets — Lavender Street, Temple Street and another in Hong Kong Street. Rucksack Inn said the new restriction on the change of use for new hostels could limit the options for a growing group of budget travellers and push prices up if there are insufficient beds to cater to rising demand. Jacquelyn Chan, general manager of Rucksack Inn, said: “We see a lot of influx from the new emerging markets like the Philippines, Malaysia and Indonesia. By limiting the number of bed, that would be a disadvantage to us in the long run. In the short run, yes, we may see an increase in occupancy.” Rucksack Inn said its average occupancy hovers around 80 to 90 per cent and the new measure could increase occupancy by another 10 per cent. Backpackers’ hostels are a pretty common sight in some areas such as Chinatown and Little India, and some of them have been converted from other commercial uses. From July 7, the URA will not approve proposals for new hotels, backpackers’ hostels or boarding houses on sites that are not zoned for hotel use. This restriction, which will be reviewed in two years, applies to locations outside the central area and four planning regions in the city. They include the Rochor area — covering locations like Serangoon Road and Jalan Besar, as well as a section in Bugis, including Purvis Street and Liang Seah Street. The third area encompasses Carpenter Street and Hong Kong Street, near the Singapore River. The new rule will also apply to the Outram area, including a substantial part of Chinatown as well as Duxton Road and Neil Road. Some industry players said the new measure will likely affect expansion plans in the next couple of years. But there are other ways to grow, for example by taking over the business of an existing operator. According to some analysts, the new restriction will provide a timely assessment of the industry. Ku Swee Yong, the CEO of Century 21 Singapore, said: “The macro environment, traffic flow and the mix of trades… I think security, safety and some of the potentially harmful vice trades that may spring up or clustered around these locations, that could be a consideration with the authorities.” Nicholas Mak, executive director of research & consultancy at SLP International Property Consultants, said: “Some of these hostels are not running at full occupancy right now. So with the restriction, there is still enough supply of budget hotels, 3-star hotels to cater to budget-conscious travellers.” The URA said it has received more applications for new hotels, boarding houses and backpackers’ hostels. There are currently 13 such developments in the Upper Circular Road precinct near the Singapore River — 12 of which were converted to hotel use in the last three years. URA said such conversions have “generally displaced” other commercial uses such as offices, restaurants, coffee shops, music studios, kindergartens and commercial schools in these areas. According to data from the Singapore Tourism Board, there are 54,962 hotel rooms in Singapore in 2013. As at the first quarter of 2014, there are 12,673 rooms in the supply pipeline. Source : Channel NewsAsia – 10 Jul 2014


Tender for Sembawang Ave site attracts four bids A residential site at Sembawang Avenue has received only four bids. A consortium comprising FCL Tampines Court and KH Capital submitted the highest bid of about S$214 million for the 22,189.7 square metre site. That translates to a unit price of about S$320 per square feet per plot ratio (psf ppr). The second highest bid for the site came from a consortium that includes Verwood Holdings and TID Residential, at S$211 million. The other two bidders for the land parcel are CEL Residential Development and Sim Lian Land. The land parcel is meant for the development of executive condominium housing. Property consultants said the low number of bids illustrates the more cautious outlook on the executive condominium (EC) market. ERA’s key executive officer Eugene Lim, said: “Developers are showing more caution with ECs now facing Mortgage Service Ratio (MSR) rules. It is tougher for buyers to afford an EC… As expected, bidding was moderate and realistic. “With the land bid remaining low, it helps keep the prices of EC in check. They will also remain competitive against mass market condominiums.” Some 620 units are expected to be developed on the 99-year leasehold site. SLP International’s executive director of research & consultancy, Nicholas Mak, noted that adjacent EC, Skypark Residences, has been experiencing fairly slow sales. It still has about 200 unsold units, seven months after launch date. The site at Sembawang Avenue was launched for tender on May 29. HDB said a decision on the award of the tender will be announced at a later date. Source : Channel NewsAsia – 10 Jul 2014


HDB resale prices fall to 2-year low: SRX The resale prices for Housing and Development Board (HDB) flats fell to a two-year low after it slipped 0.6 per cent month-on-month in June – the fifth consecutive months of declines, according to the Singapore Real Estate Exchange. According to the SRX HDB flash report released on Thursday (July 10), the price drop affected 3-, 4- and 5-room flats, which saw a price decline of 0.6, 0.8 and 0.3 per cent, respectively, compared to May. Executive flats, however, saw a rise in price by 1.3 per cent. June’s HDB resale prices marked a new two-year low since April 2012. Compared to the peak in April 2013, prices for resale flats have declined by 6.8 per cent, SRX said. In June, 1,315 HDB flats were sold, five less than the 1,320 transacted units in May, SRX added. Rental volume and prices also fell for June. An estimated 1,590 HDB flats were rented out in June, and this was a 2 per cent decrease from May’s 1,622 units. Rental prices fell 1.1 per cent on-month, reaching a new low since January 2012, the report stated. TOX STILL NEGATIVE The overall median Transaction Over X-Value (TOX), which measures whether people are overpaying or underpaying the SRX estimated market value, remained at a negative S$4,000 for June. The majority of HDB towns – 18 out of 26 estates – saw negative median TOX in June. Among HDB towns with more than 10 transactions, the lowest median TOX are in Hougang, Punggol and Sembawang, at negative S$9,000, negative S$8,100 and negative S$8,000, respectively. Bucking the trend is Geylang, which was the only town with a positive median TOX of S$1,500, SRX said. Source : Channel NewsAsia – 10 Jul 2014


Limited upside to Singapore office rents expected: Chestertons Singapore’s office market is recovering but central business district rents are unlikely to rise dramatically as much of the new demand is from tenants who are more price-sensitive, real estate services firm Chestertons said on Tuesday (July 8). According to Chestertons, firms in sectors such as energy, commodities and technology do not necessarily require prime CBD locations and will be among the first to move out when rents spike. “Companies which have relocated out of the CBD in times of escalating rents included ExxonMobil from OUB Centre, Shell from Singapore Land Tower and recently Cisco Systems from Capital Towers,” it said. OUB Centre is the old name for One Raffles Place, which is one of Singapore’s tallest office buildings. “We expect CBD office rental increase to be checked by resistance from cost-conscious tenants, lack of expansion plans by traditional major CBD office occupiers like the banks and financial institutions, and prevailing high vacancies in upcoming new completions,” Chestertons said. It added that potential rental spikes will likely be confined to upcoming suburban areas such as Jurong West, due to the completion of new Grade A offices such as the Metropolis, Jem and the soon-to-be completed Westgate Tower. Chestertons estimates that Grade A office rents in the CBD grew by 0.5 per cent quarter-on-quarter to average S$9.64 per square foot per month in the April-June period. In contrast, suburban Grade A office rents grew by 4.9 per cent to average S$5.70 psf per month. Rents in Singapore’s CBD have risen over the past year, thanks to the influx of energy and commodity firms as well as the expansion of premises by social media giants such as Google and Facebook. “In spite of the stronger-than-expected office rental recovery in the past 12 months, the fundamentals guarding the office market today differs from that in 2010/2011 or even prior to the global financial crisis,” Chestertons said. Source : Channel NewsAsia – 8 Jul 2014


Frasers Centrepoint gets green light to buy Australand Singapore property giant Frasers Centrepoint Ltd (FCL) has got clearance from the Foreign Investment Review Board of Australia (FIRB) to go ahead with plans to buy Australand Property Group in a deal worth around A$2.6 billion. In a statement to the Singapore Exchange on Wednesday, FCL said it has received a “statement of no objections” from FIRB in relation to its proposed acquisition of up to 100 percent of Australand. FCL, whose main shareholder is Thai billionaire Charoen Sirivadhanabhakdi, is one of the city-state’s biggest property companies with total assets of around S$11.4 billion. The Singapore-listed property giant earlier this month trumped a competing offer for Australand from Australia’s Stockland Corp. Australand, which was once majority owned by CapitaLand, is involved in a wide range of real estate-related businesses including residential, commercial and industrial. Analysts said the purchase of Australand will help boost FCL’s recurring income base and diversify risk from the Singapore residential market, which has been hit by a raft of government cooling measures. Source : Channel NewsAsia – 9 Jul 2014


12,700 more flats to be launched in next six months Another 12,700 flats will be launched in the next six months, according to a parliamentary written response by National Development Minister Khaw Boon Wan on Tuesday (July 8). Of the 22,400 Build-to-Order (BTO) flats targeted for this year, 9,700 flats have been launched. The Housing and Development Board will conduct a second Sale of Balance Flats Exercise later this year to augment the BTO supply. Mr Khaw added that the ministry will monitor the BTO application rates closely and decide on the supply for next year in due course, but he expects the number to be lower than this year’s supply. Source : Channel NewsAsia – 8 Jul 2014


Further correction in housing market “not unexpected”: Tharman Home prices in Singapore may have been moderating for several straight quarters now, as cooling measures introduced by the Government continue to take effect. However, while taking questions at the DBS Asian Insights Conference, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said the cycle is “not over”. “Market players will determine where the cycle goes. I don’t think the industry will crash, because we moved early enough, and we moved each step of the game, knowing full well that what we do may not be enough, but knowing too well that if we did too much, it may engineer a crash,” said Mr Tharman. “So we moved step by step, but we started early, so we avoided a huge bubble. That’s why we won’t see a crash. But I think further correction would not be unexpected.” Since 2009, the Government has implemented several rounds of measures to cool the property market. These include buyer’s and seller’s stamp duties as well as loan curbs like the Total Debt Servicing Ratio framework. The supply of new HDB flats has also been ramped up to meet demand. Together, these measures have curtailed increase in home prices. The latest flash estimates from Urban Redevelopment Authority showed that private residential prices fell 1.1 per cent in the second quarter of this year – the third consecutive quarter of decline. The government has said recently that it is too early to relax the property-cooling measures. Source : Channel NewsAsia – 4 Jul 2014


Save a part of Tanglin Halt for posterity Last Friday, the Housing and Development Board (HDB) announced its plans to rejuvenate Dawson Estate, whose transformation will include 3,700 new units that will serve as replacement flats for residents at the nearby Tanglin Halt estate. The Tanglin Halt estate, comprising 31 residential blocks with 3,480 flats along Tanglin Halt Road and Commonwealth Drive, will be redeveloped under the Selective En bloc Redevelopment Scheme (SERS). These flats, completed more than 50 years ago, were among the first blocks in Singapore’s first satellite new town, Queenstown. Tanglin Halt estate held its 50th birthday bash in 2012 at Tanglin Halt Community Plaza. This is a location our pioneer generation can identify with: Its history from squatter houses to a well-planned township, with the cluster of 10-storey blocks of flats more popularly known as “chap lau chu” in Teochew and Hokkien, and the three-storey Singapore Improvement Trust flats. Tanglin Halt Community Plaza is an open piazza, like a market square, bordered by the Commonwealth Drive Food Centre (three hexagonal blocks 1A, 2A and 3A) and three straight blocks of two-storey shophouses Blocks 46-1, 46-2 and 46-3. The 58 tenants of these six blocks will need to move out of their hawker stalls and shops in seven years. The HDB plans to demolish Commonwealth Drive Food Centre, the shops and eating houses at Blocks 46-1, 46-2 and 46-3 and Block 39 at Tanglin Halt Road once the hawkers and tenants have relocated to a new food centre in Dawson. After this, a new neighbourhood centre, including a market and food centre, will be built on this site, creating a new community node for residents. Blocks 47 to 49 at Tanglin Halt Road will be cleared in 2024. Commonwealth Drive Food Centre’s architecture comprises three connected hexagonal shapes joined like a honeycomb. While its shape may be considered unique, it is the whole environment that we should consider preserving. The food centre, also known as Tanglin Halt Food Centre, creates a market square that is Tanglin Halt Community Plaza when we include the three straight blocks of two-storey shophouses (Blocks 46-1, 46-2 and 46-3). A market square is a feature of many old European towns. It is an open area where stalls open for business, sometimes on a particular day of the week or “Market Day”. A market square is usually surrounded by important buildings and offices such as a town hall, places of worship and a post office. Such market squares existed here in the past, in the old Kallang Airport, for example. Today, I can only think of a small market square in Commonwealth Crescent. The HDB obviously feels there is a need for a commercial centre in this location and that is why it intends to rebuild this site into a neighbourhood centre. But perhaps they should simply renovate these six blocks, refresh their exteriors and allow the private sector to lease them, much like the buildings at Dempsey Hill. Preserving these buildings will keep Tanglin Halt Community Plaza intact, allowing us to retain this historically identifiable market square, a familiar surrounding that is rich in more than half a century of history. Such a move will be in line with one of the key focuses of Master Plan 2014: To create community spaces that promote social bonding and interaction between neighbours and visitors. The residents relocating to the five new neighbourhoods in Dawson are likely to be happy with the quality of their new homes and the fresh 99-year HDB leases. The new flats will feature lush landscaping with sky gardens for residents to enjoy panoramic views of Singapore’s city skyline. A complete array of amenities, with shops and social facilities such as childcare centres and a senior citizen centre, will be included. However, as with most new HDB clusters, the ones in Dawson will be built with high density, with some blocks as high as 47 storeys. These clusters of towering blocks will give one a feeling of congestion at the lower levels. There will not be much distance between blocks. Just like the current blocks at Forfar Heights and Commonwealth 10, while they will be attractive in the modern sense, they may feel clinical and lacking in nostalgic charm, with neither history nor heritage. Because none of the old buildings were retained when the area came under SERS, we do not recall the famous Forfar house, which in 1956 was Singapore’s tallest residential building. The last few fragments of the original Tanglin Halt and Queenstown remain today. While SERS should be lauded, not everything that goes en bloc has to be demolished to make way for new developments. Policymakers should consider preserving the market square at Tanglin Halt Community Plaza by keeping all the six surrounding buildings and, thereby, saving for future generations a vestige of the Queenstown of the 1960s. Ku Swee Yong is a property agent and chief executive of real estate broker Century 21 Singapore. He is the author of two national bestsellers, Building Your Real Estate Riches and Real Estate Riches. Source : Today – 4 Jul 2014


S’pore REITs may face headwinds With recent weakness in manufacturing, experts said this could impact demand for factory space. Coming at a time when the supply of industrial property is on the rise, they added that this could put pressure on some real estate investment trusts (REITs). Within the next four years, more than 5 million square metres of factory space, and 1.6 million square metres of warehouse space, are expected to come onstream. This is expected to exert pressure on rentals for certain types of industrial space. Shane Hagan, CEO of Soilbuild Business Space REIT, said: “As far as more conventional industrial (space is concerned), we are seeing quite high supply for the next three years, and there is less pre-commitment for the conventional industrial space. “So this is impacting slightly on rentals; (but) the new supply that’s coming up is mostly warehouse type space, so luckily for Soilbuild REIT, we don’t have properties in the sector so much, our properties are more in the high-tech production facility type space.” Soilbuild Business Space REIT also manages business parks. It said that this is an area where it is seeing a high level of pre-commitment from tenants. This means that rentals could hold up, amid upcoming supply. According to data from JTC, as of the first quarter of 2014, more than half a million square metres of business park space are expected to be completed in the coming years. Still, some analysts said they prefer retail REITs over industrial REITs. Jack Wang, partner at Lexico Advisory, said: “There are some retail REITs where it deals with shopping malls. I think those are great, because of the strong tenant mix, and I guess Singapore’s business environment is still pretty positive. “But industrial REITs are a very different construct altogether, because you need to look into the demand from the manufacturing and industrial sector, which is on the softer side, given the weak global demand.” So far this year, the REIT sector, as an investment class, have rebounded from last year’s losses and outperformed the benchmark STI. It is up over 7 per cent year to date, compared to the STI’s 3-per cent rise, and some analysts said this means there may be limited upside potential for the sector going forward. Source : Channel NewsAsia – 3 Jul 2014


Office property market on the road to recovery: Colliers The recovery in Singapore’s office property market gained a firmer footing in the second quarter of 2014, according to Colliers International’s latest Research and Forecast Report. As growth momentum in the global and local economy picks up, brighter business prospects sparked more leasing demand for office developments, the report said. All Grade A office micro-markets breached the technical full occupancy rate of 95 per cent by the end of June 2014, with the Shenton Way/Tanjong Pagar micro-market recording a high of 99.4 per cent. The monthly rent of Premium Grade office space in the Raffles Place/New Downtown micro-market reached a two-and-a-half-year high of S$11.00 per square feet as of June 2014 due to the overall tightening of office occupancy islandwide. The office property market is expected to continue to strengthen for the rest of 2014. In the retail arena, rents remained broadly unchanged due to a lack of gathering traction in retail spending and resistance from tenants against further increases in rents, the report said. Leasing activity, however, stayed active amid new openings in the second quarter of 2014. A lack of momentum in tourism is another factor. Despite this, modest economic growth and visitor arrival improvement in the next half of the year will lend strength to the retail sector, the report said. However, the retail trading environment remains challenging due to increasing competition and rising cost. Retail rents are not expected to change substantially for the rest of the year, with general occupancy levels expected to be fairly stable. Source : Channel NewsAsia – 4 Jul 2014


Wee Hur awarded tender for Woodlands industrial site The Urban Redevelopment Authority (URA) has awarded the tender for a 3.9 hectare industrial site at Woodlands Avenue 12 to Wee Hur Development. Wee Hur submitted the highest bid of S$76.9 million for the site, which has a 30-year lease term and a maximum gross plot ratio of 2.5. Source : Channel NewsAsia – 4 Jul 2014


Ascott Reit acquires Malaysia, China serviced residences for S$173.9m Ascott Residence Trust, also known as Ascott Reit, announced on Monday (July 7) that it has entered into conditional agreements to acquire its first serviced residence in Kuala Lumpur, Malaysia, as well as properties in Wuhan and Xi’an in China at a total property value of S$173.9 million. Ascott Reit will acquire the 207-unit Somerset Ampang Kuala Lumpur from The Ascott Ltd for RM175 million (S$67.4 million), it said in a statement on Monday. It will also acquire the 249-unit Citadines Zhuankou Wuhan and the 251-unit Citadines Gaoxin Xi’an for 252 million yuan (S$51.4 million) and 270 million yuan (S$55.1 million), respectively, from Ascott Serviced Residence (China) Fund, in which Ascott holds a 36.1 per cent stake. The three serviced residences will continue to be managed by Ascott. Ascott Reit’s international portfolio comprises 83 properties across 12 countries in the Asia-Pacific and Europe. Source : Channel NewsAsia – 7 Jul 2014


REITs have ‘signalling effect’ on rents: Teo Ser Luck Real Estate Investment Trusts (REITs) may have a “signalling effect” on retail rents in the vicinity of properties they own, Minister of State for Trade and Industry Teo Ser Luck said in parliament on Monday (July 7). He was responding to a question by Workers’ Party Non-constituency Member of Parliament Yee Jenn Jong on whether the Government agreed with a recent report that showed REIT-ownership was not the determining factor for rents. “REITs have some signalling effect on landlords around the area when the rental increases or decreases … But REITs may not be the dominant factor in influencing the market,” Mr Teo said. The Ministry of Trade and Industry in May published a study that concluded REIT-owned shopping malls commanded higher rents compared to their single-owner peers due to better locations and enhancement works, instead of ownership. This is in contrast to the growing perception that rents at malls owned by REITs are rising at a faster pace and threatening the survival of many local small and medium enterprises. Mr Yee had also noted during this year’s Budget debate that REITs’ huge collective hold on the market allow them to force prices upwards. Mr Teo noted that more detailed rental data on retail and industrial space, broken down by streets and planning regions, have been made publicly available since April. The government is also looking at publishing additional information on retail rents by the end of the year. “This will add to the existing information available on the rental market and help businesses make more informed decisions during lease negotiations,” Mr Teo said. Source : Channel NewsAsia – 8 Jul 2014


Retail shops in Toa Payoh up for sale A row of retail shops in Toa Payoh Central was put for sale by tender, according to real estate company Savills. In a statement on Monday (July 7), Savills said the property has a strata area of about 5,780 square feet and is located next to the HDB Hub. It also has a remaining lease of about 57 years from the Housing and Development Board (HDB). The company is the exclusive marketing agent for the property. Popular brands like Watsons, Hang Ten, StarHub and Hock Hua are among tenants in the property. It expects “immense competition for the property due to its location and rarity”, according to the statement. Savills added that “the defensive nature of this investment also bodes well for the current volatile investment climate”. The tender closes at 3pm on August 12, the company said. Agnes Tay, director and head of Commercial at Savills, said: “This property is strategically located at the central of Toa Payoh, so we are expecting not only investors, but also end-users, retailers, to consider this option. “So we are expecting, we are calling for an asking price of S$65 million. We actually are looking forward to good competition for this property.” Source : Channel NewsAsia – 7 Jul 2014


New hotels cannot be built on non-designated sites: URA The Urban Redevelopment Authority (URA) will reject proposals to build new hotels, boarding houses and backpackers’ hostels on sites that are not zoned for hotel use. In a circular to architects, engineers, developers, owners and tenants sent on Monday, the authority said this takes place with immediate effect. It said in recent years, it has received more applications for new hotels, boarding houses and backpackers’ hostels on sites that are not zoned for hotel use. These include proposals to change the type of use a site is zoned for — from commercial to hotel use, for instance. The authority said accommodation for visitors to Singapore is generally found in commercial areas, but such uses should not dominate and displace other commercial activities. As such, within the central area, proposals for new visitors’ accommodation, including change of use proposals, will generally not be allowed. This applies to certain locations in areas like Outram, Rochor, Downtown Core and the Singapore River. The same applies to places outside the central area. For hotel, boarding house or backpackers’ hostel proposals in other parts of the central area, the authority will evaluate new proposals individually, considering planning intentions and potential traffic impact. For existing approved hotels and boarding houses on sites that are zoned for hotel use, any proposed expansion plans will continue to be subject to evaluation. For existing approved visitors’ accommodation who have temporary permission to use a site for their activities, further renewal of the permission will only be granted to tenants if they have not caused any adverse traffic impact and disamenity to their neighbours. The authority said the policy will be reviewed in two years’ time. Source : Channel NewsAsia – 7 Jul 2014


Number of shophouses sold in Q2 likely at 5-year low The number of shophouses sold in the second quarter of 2014 will be the lowest in over five years, said property analysts. According to caveats lodged, there were just 18 transactions between April and June. Analysts said this is the lowest number since the fourth quarter of 2008, when 23 transactions took place. Sales have slowed in the past year as a result of the implementation of the total debt servicing ratio frame work last June. Colliers International said transaction volume has halved from 76 in the second quarter of 2013 to 30 in the following quarter. But weaker sales has had limited impact on their prices. Currently, the average price of shophouses in the central business district is around S$6-7 million. Those outside the city go for around S$3.5-5 million. Grace Ng, deputy managing director at Colliers International, said: “The median sales price has maintained at more or less above S$3,000 per square foot over the land area as the owners of these shophouses have deep pockets, they have strong holding power and they will not sell if they don’t achieve the target prices.” Colliers said generally shophouses enjoy a rental yield of 1-5 per cent, slightly higher than residential properties, at between 1-4 per cent. In the last quarter, Squarefoot Research said the top three areas with the highest median transacted prices per square foot were Outram, Singapore River and Bukit Merah. Analysts added that the outlook for the shophouse market in Singapore should be fairly stable. Esther Hoon, analyst at Squarefoot Research, said: “It has its own unique charm, they are usually well-located in the central region and the excellent frontage, which is very rare, and they offer a greater flexibility in terms of usage, which cannot be found in other types of commercial properties.” There are over 6,500 conserved shophouses in Singapore and they are being used as retail shops, restaurants, hotels and residences. Source : Channel NewsAsia – 7 Jul 2014


Keppel Land ups stake in Vietnam housing project Keppel Land said on Monday it has increased its share of a joint venture housing project in southern Vietnam by buying a 43 per cent effective stake in the project’s phase two and three development. The Singapore developer will pay around US$11.5 million to raise its stake in the remaining phases of the Estella — a high-rise residential development with a retail component — to 98 per cent from 55 per cent. Tien Phuoc Co, the joint venture partner, will see its share of the project drop to 2 per cent from 45 per cent previously. The Estella is a residential development comprising more than 1,500 apartments that is located in the An Phu Ward in District 2 of Ho Chi Minh City. Phase 1 has been completed, with 719 units that have been fully sold and handed over to home buyers. There is also a final batch of nine penthouse units which was recently released for sale. Mr Linson Lim, Keppel Land’s president for Vietnam, said the firm was confident about the long-term growth potential of Vietnam’s property market, due to the country’s young population and growing middle-class. Ho Chi Minh City’s high urbanisation rate, improving infrastructure and declining interest rates will also support demand for housing, he added. Source : Channel NewsAsia – 7 Jul 2014


Frasers Centrepoint Trust more than doubles revenue, asset size Frasers Centrepoint Trust (FCT) has more than doubled its revenue and asset size since its initial public offering (IPO) in July 2006. In the last eight years, the trust has been able to grow its distribution per unit at an average of 9 per cent per year. FCT said asset enhancement is its biggest engine for growth. For instance, it said the asset enhancement on malls like Causeway Point and Northpoint have garnered about a 30 per cent increase in net property income. Currently, FCT’s portfolio comprises six suburban malls in Singapore. It will continue to look for acquisition opportunities both outside and within the portfolio of its sponsor Frasers Centrepoint. Going forward, FCT said it remains positive about retail rental outlook, even though it has had to cut rent rates at Bedok Point due to competition from the new Bedok Mall. Dr Chew Tuan Chiong, CEO of Frasers Centrepoint Asset Management, said: “Bedok Point is one of the rare cases where there is a new competition there. Contrary to what the market might be saying about REITs increasing rentals, in Bedok Point we actually lowered rentals. “Rentals for suburban malls, if we look at our own portfolio, continues to be positive. The reversions continue to be positive — we have been experiencing anywhere between 7 per cent increase in rental, renewals to even double digit, but going forward, my own sense is this is going to be more subdued, partly due to the shortage of manpower which curtained the expansion plans of some tenants, partly due to increase in supply. “But because the suburban malls have very strong fundamentals feeding off growing population, increasing income levels, median income — I see, probably, still positive reversions but not as exuberant as in the past.” Source : Channel NewsAsia – 7 Jul 2014


Private, HDB resale home prices continue to soften in Q2 The price index for private homes fell 1.1 per cent in the second quarter, the third continuous quarter of price decrease, according to flash estimates released by the Urban Redevelopment Authority (URA) today (July 1). Prices of non-landed private residential properties in all market segments declined in the second quarter, the agency said. In the core central region, prices fell 1.5 per cent, more than the 1.1 per cent decline in the previous quarter. Prices outside the central region decreased by 1.1 per cent, more than the 0.1 per cent decrease in the previous quarter. In the rest of the central region, prices fell 0.6 per cent, compared with the 3.3 per cent decline in the previous quarter. Prices of landed properties fell 1.5 per cent, more than the 0.7 per cent decline in the previous quarter, the URA added. Prices of resale HDB flats in the second quarter also fell 1.3 per cent from the previous quarter, according to flash estimates released by the Housing and Development Board (HDB) today. A total of 9,707 flats under three Build-To-Order (BTO) exercises and 3,383 flats under a Sale of Balance Flats exercise were sold in the first half of this year, HDB said, adding that it will offer about 3,810 BTO flats in Punggol, Sembawang, Toa Payoh, Woodlands and Yishun this month. Source : Channel NewsAsia – 1 Jul 2014


One-fifth of CapitaGreen leased ahead of completion The upcoming CapitaGreen, a Grade A office building at Market Street, has secured leasing pre-commitments for 21 per cent of its net lettable area, joint developer CapitaCommercial Trust (CCT) said on Wednesday (July 2). About 150,800 sq ft of the 40-storey building’s total net lettable area of 700,000 sq ft has been committed, CCT said. The tenants include multinational firms such as commodities trading giant Cargill, Swiss private bank Bordier & Cie, insurance broker Jardine Lloyd Thompson, law firm Jones Day and an unnamed international gym operator. A topping-out ceremony to mark the progress of the building’s construction was held on Wednesday by the development’s joint venture partners – CCT, CapitaLand and Mitsubishi Estate Asia. National Development Minister Khaw Boon Wan officiated the ceremony and planted nine plant species, to showcase the plants that will be grown in the building. Ms Lynette Leong, CEO of CCT, said in a statement: “Given that CapitaGreen is the only new Grade A office development in the CBD completing in the next two years, it is well positioned to leverage on the limited office supply to progressively attract more tenants.” CapitaLand said that by adopting innovative technologies and design-and-build methodology, the construction timeline has been shortened from 40 months – the average industry minimum to complete a building of this scale – to 36 months. CapitaGreen is due to be completed by the end of this year. Source : Channel NewsAsia – 2 Jul 2014


Redeveloped Tanglin Halt could yield 5,000 new homes: Analysts Flats in Tanglin Halt were built in early 1960s, and are one of Singapore’s oldest. In ten years’ time, they will be among 31 blocks at Tanglin Halt Road and Commonwealth Drive that will be cleared under the Selective En Bloc Redevelopment Scheme. Under the Master Plan 2014, the area has been zoned for mainly residential use. And when redeveloped, analysts say it can yield more than 5,000 homes – 50 per cent more than the current number. Authorities have not said if the site will be used for private or public housing, but some property watchers say new HDB homes are likely to be built in the vacated area. “We also have to look at the characteristics of the neighbourhood. If the neighbourhood is predominantly HDB, and there is also strong demand for HDB flats in that area, then perhaps the more suitable type of housing could be HDB,” said Mr Nicholas Mak, the Executive Director for Research and Consultancy at SLP International Property Consultants. “But having said that, I would not exclude the possibility that authorities may reserve one or two land parcels to be developed into private housing,” he said. And if the site is put up for private residential development, analysts estimate that it may cost up to S$900 per square foot, according to bids in recent tenders. But developers will be willing to pay, say analysts, as there are not many sites in mature estates offered under the Government Land Sales programme. Tanglin Halt’s location is another draw. Said Mr Ku Swee Yong, CEO of Century 21 Singapore: “It is a short walk to the Commonwealth MRT station, and a few minutes more to walk to Holland Village. The location is a mature precinct and if you were to develop one or two private residential projects there, you could in theory get people who are upgrading from the older HDB flats into the new private residential units.” Over at Dawson, five new HDB projects will be built, offering some 3,700 new flats which Tanglin Halt residents will have priority to purchase. The new projects will have commercial facilities such as a supermarket and hawker centre. Analysts say this will bring more activity to the estate, but it is likely to remain a residential area. “Unless the authorities were to plan to have, let’s say, a major shopping mall located near the area, otherwise it will predominantly be a residential area. But for other types of weekend activities, they may go elsewhere,” explained Mr Mak. The rejuvenation plans also had analysts pointing out possible areas of concern, such as the potential overd evelopment of certain areas, which could affect their original character. “If we were to tear down everything and redevelop it into new things, yes, we would have very nice, new, clean and well-landscaped buildings. But these would be all very high-density, without much character, old-world charm or shared history,” said Mr Ku. “If we could at least preserve one part of Tanglin Halt, especially the town square which existed since the late 50s and has a lot of history, I think that would actually give the old neighbourhood some identity and focus,” he added. Source : Channel NewsAsia – 2 Jul 2014


Singapore ranked most transparent real estate market in Asia Singapore has been ranked the most transparent real estate market in Asia. This is according to Global Real Estate Transparency Index 2014, published by consultancy firm JLL. Overall, the top positions are still dominated by markets in the west. Singapore maintained its 13th place in the index. But with Hong Kong slipping from 11th in 2012 to 14th in the latest report, it has pushed Singapore to top position among Asian real estate markets. The top position in Asia has usually been held by Hong Kong since the report was first launched 15 years ago. JLL said Hong Kong was dragged down by lower scores in the area of property taxation relating to cooling measures and also in accounting standards and corporate governance. This is the second time Singapore has been ranked higher than Hong Kong since the index was published in 1999. However, when compared to other mature markets like the UK, US and Australia, JLL said Singapore did not fare as well in terms of transaction process. But Singapore was in the global top 20 for performance measurement, market fundamentals, governance of listed vehicles and regulatory and legal sub-indices. Chua Yang Liang, head of research at JLL Singapore, said: “In other markets, the tenants have the ability to look the components within that service charge. In Singapore’s case, it is typically a broad number and tenants typically do not have the ability to audit. “The other one is the market fundamentals in terms of the time series, the depth of the data, we have strong series, quite long – but in terms of depth of the details like building information, building profile, that kind of details that are publicly available are still lacking compared to other mature markets.” JLL said improvements in transparency in Asia Pacific have been steady but unspectacular. This year, the report also covered Myanmar, which emerged as one of the least transparent real estate markets globally, ranked 100. Analysts said investors generally tend to favour more transparent markets. Donald Han, managing director of Chestertons, said: “If they are risk-averse, they would need to put more allocation to more mature transparent markets, but these markets would generate lower returns. In some cases, it could be 3 to 4 per cent in terms of yield. “Myanmar is more opportunistic currently. Potentially, it would have higher returns. I would even expect double-digit (returns) because of the unpredictability in government regulation.” Looking ahead to 2016, JLL said several factors could boost transparency. They include new technologies, greater use of social media, more knowledge-sharing as well as increasing demands for transparency from government and commercial organisations. Source : Channel NewsAsia – 30 Jun 2014


Heritage buildings in Singapore given new lease of life More banks and financial institutions in Singapore are using heritage buildings as a training ground for employees in the Asia Pacific region. These buildings typically date back to the 1900s and have been given a new lease of life. They are often equipped with the latest technology to foster learning and development. The Command House, originally known as Flagstaff House, once served as the official residence of some of Singapore’s British colonial leaders in the 1930s. It also hosted many state functions in the late 1990s before being gazetted as a national monument in 2009. It now houses the UBS Business University. Swiss lender UBS is a forerunner in terms of banks utilising such buildings as regional training campuses. Moira Roberts, head of human resources at UBS, said: “We set up the house in 2007 as a testament to invest in our staff in the region and we’ve been running for the last eight years in terms of staff training and development, thought leadership.” Roberts added that the opportunity came at the time of growth of the wealth management business and the company’s strong desire to grow their talent within this region. “At the time, we were obviously growing quite substantially. We looked at a number of different options and different sites and we were very fortunate to work with the Singapore government to actually gain access to the house,” said Roberts. The Kinloss House at LadyHill Road, which served as a boarding school for British forces children from the 1950s to 1970s, is another heritage building that has been given a new lease of life. Located in the heart of Singapore, the building is now known as AXA University Asia Pacific Campus and serves as a Centre of Excellence in learning for staff from Southeast Asia, South Korea and Japan. Having invested about S$7.7 million into the university, the campus has conducted over 110 programmes so far. Caroline Buhagiar, AXA’s regional learning & development director and campus head (Asia), said: “Having ambitious projects and business growth in Asia, it was very easy for AXA to be interested in this proposal and to invest, so we invested heavily but we didn’t do it alone. The Singapore government co-funded in the renovations of the building to bring it to the state of the art that it is today.” She added: “The capacity is serving us just right and we have planned a whole year of activity making sure there’s a good balance from start to end of year so for the time being and for the next three years, I don’t anticipate we will do expansion for the projections that we have.” One particular staircase in the campus has been preserved since the early 1900s and when AXA took over the site in 2008, the building was restored into a training ground. It currently houses 10 classrooms and can accommodate up to 400 employees at any one time. And besides housing a library, all the paintings in this building were done by AXA employees. The latest financial institution to join the fray is BNP Paribas with its campus in Changi. The bank invested some S$24 million in the restoration and refurbishment of the two conservation buildings along Hendon Road for its first regional hub outside of France – all in a bid to support human capital excellence. The BNP Paribas Campus has a modern auditorium which seats 200 people meant for large seminars and conferences, 25 rooms and an in-house restaurant which seats 130 people. With potentially more companies interested in such set-ups, it certainly bears testament to the often quoted phrase, “everything old is new again”. Source : Channel NewsAsia – 29 Jun 2014


Frasers Centrepoint’s A$2.6b offer to buy Australand accepted Frasers Centrepoint Ltd’s (FCL) bid to buy Australand Property Group in a deal worth around A$2.6 billion has been accepted by directors of the Australian company, the Singapore real estate giant said in a filing on the Australian stock exchange. FCL’s offer of A$4.48 per Australand security was unanimously accepted by the Australian company’s board in the absence of a superior proposal. An independent expert had also described the offer as “fair and reasonable”. The offer is, however, still subject to approval by Australia’s Foreign Investment Review Board. FCL’s A$4.48 per security offer represents a 21.7 per cent premium to Australand’s net tangible asset value per security. Singapore-listed FCL, whose main shareholder is Thai billionaire Charoen Sirivadhanabhakdi, is one of the city-state’s biggest property companies with total assets of around S$11.4 billion. It manages two Singapore-listed real estate investment trusts, Frasers Centrepoint Trust and Frasers Commercial Trust, and it is in the process of listing a third. Australand, which was once majority owned by Singapore’s CapitaLand, is involved in a wide range of real estate-related businesses including residential, commercial and industrial. Analysts say the deal will help boost FCL’s recurring income base and diversify risk from the Singapore residential market, which has been hit by a raft of government cooling measures. Source : Channel NewsAsia – 1 Jul 2014


Hotel Grand Chancellor in Little India sold for S$248m The Hotel Grand Chancellor in Little India has been sold to an unnamed party for S$248 million, owner Hotel Grand Central Ltd said on Monday (June 30). Hotel Grand Central said the buyer has paid a deposit of S$18.6 million for the 328-room 3-star hotel at Belilios Road, and the transaction is expected to be completed in January next year. Hotel Grand Chancellor, which opened in 2010, was valued at S$201 million back in September 2012. Source : Channel NewsAsia – 30 Jun 2014



June 2014 RQAM confident of filling up office space at MBFC Tower 3 Raffles Quay Asset Management said it is confident of filling up the rest of the office space at Marina Bay Financial Centre Tower 3, as well as sell the remaining units of luxury apartments at Marina Bay Suites — despite uncertainties in the global economy and the property cooling measures announced in January 2013. About 88 per cent of the 221 units at Marina Bay Suites have been sold so far. While sales have slowed, the manager of MBFC said it is confident that buyers will return. The high-end residential development, with an average selling price of S$2,700 per square foot, will be ready for occupation soon. The luxury property segment has been hit by various rounds of property cooling measures in the past years, the most recent being the additional buyers’ stamp duty on foreign buyers. As for MBFC Tower 3, about 12 per cent of the space is still available, after filling up 100,000 square feet of the premises in the first quarter of this year. Warren Bishop, CEO of Raffles Quay Asset Management, said: “In terms of where rentals are going at the moment, there is more demand than supply at the moment. A lot of the agents are talking about prices possibly going up, which is always an issue when you refer to the cost of doing business. “But actually Singapore as a regional business centre is still very affordable compared to other regional centres. Property rates here are comparable and reasonable — compared to places like Tokyo, London, New york and even Hong Kong.” Source : Channel NewsAsia – 15 May 2013


Cheers to property savings along the NEL If you like to have a drink or two before you return home after a hard day’s work, Clarke Quay is as good a place as any. It is great for people-watching and there are plenty of bars and restaurants to choose from. Clarke Quay has the added advantage of having its own station on the North East MRT Line (NEL). Even if you have had one too many, you can still safely return home to any condominium within walking distance of this line. If you like your beer, you would want to maximise your time in the pub and minimise your time getting home. This means the ideal location for your condo would be Clarke Quay: No commuting time on the MRT. The problem, though, is that condos in the area rank second-highest in terms of price per square foot among all condos within 1km of an MRT station on the NEL. So it is best to choose a home farther out: In general, as you head towards Punggol, prices drop. There are two exceptions. First, Boon Keng offers greater savings, but you will have a longer walk, on average, to your condo than in the case of other stations. Second, Serangoon offers less savings since it is an MRT interchange with Nex mall and an interesting mix of landed and non-landed homes nearby. If you really love your beer, you could justify the long commute from Clarke Quay to Buangkok by consoling yourself with the notion that by saving so much money on property, you will have more to spend on your favourite beverage. In terms of beer, your property savings on a 1,000sqf flat would be equivalent to the cost of 59,610 pints at S$14 a pop. Yes, a home is not the only thing that is expensive in Clarke Quay. That is a huge quantity of beer. If you drink two pints a night, it would take you 81.7 years to consume your property savings. Even with the recent advances in medicine, it would be challenging to drink this much in a lifetime. So maybe in your case, there is a station on the NEL that would allow you to achieve a better balance between price, commuting time to Clarke Quay and property savings for beer. It is your decision. However, I would think twice about Chinatown. Condos there are more expensive than those near Clarke Quay, so you start 1,714 pints in the hole and it will take you 2.35 years to catch up. By Sam Baker – co-founder of SRX, an information exchange formed by leading real estate agencies in Singapore to disseminate market pricing information and facilitate property transactions. For more details on the statistics used in creating this article, visit srx.com.sg/research. Source : Today – 27 Jun 2014


Investors return as rate hike fears dissipate When the Government introduced loan curbs via the Total Debt Servicing Ratio (TDSR) framework last June, the private housing market went into a tailspin. The repercussions — tepid sales and weak prices — were so severe, some market analysts took to describing the curbs as cooling measures. Many tend to forget that the majority of private home buyers these days are investors first rather than owneroccupiers. Investors are less price sensitive in terms of affordability than in terms of exposure to risk. Investors stay out of the market as they perceive higher risk and not because they cannot afford the properties. Once this risk is perceived to be low or to have fallen, it is likely they will return to the market. There is certainly no shortage of liquidity and interest rates have remained stubbornly low. Do developers’ sales for May, which nearly doubled from those for the preceding month, signal that this has happened? In total, developers sold 1,470 private homes last month, the highest since last June and a 96 per cent jump from 749 units sold in April. The volume also returns developers’ sales to the levels recorded before the TDSR. A year ago, there was a strong feeling interest rates would not only rise, but also spike. The consensus was that this would send property prices spiralling downwards. This kept most investors away from the market unless a property was a compelling buy. In a globally connected world, a year is a long time to stay in cash and out of the market. In fact, signs have been clear in the resale market: Although monthly resale transaction volumes have remained much lower than a year ago, the number of deals has been creeping up month on month. The housing market has been inundated with so much bad news over the past year, including reports of large numbers of empty apartments in completed developments. Yet, those familiar with the ins and outs of the real estate market know these vacant apartments have been around for a long time. That the owners have been able to keep them vacant for so long is testimony to the fact that holding costs have not climbed appreciably. A recent survey by Bloomberg News showed that most economists feel money market investors under-estimate the pace of tightening by the United States Federal Reserve over the next two years. In its most recent policy meeting that ended on Wednesday, the US central bank officials predicted the federal funds rate, now between zero and 0.25 per cent, would rise to 1.125 per cent by the end of next year, up from the 1 per cent they had forecast in March. They projected a more aggressive pace of hikes in the benchmark rate for the following year, that it would rise to 2.5 per cent at the end of 2016, versus the 2.25 per cent they had predicted in March. Whether economists are right, local investors probably share the same feeling of those money market investors — that rates will probably rise only very gradually. This may explain why local investors have started to return to the market in bigger numbers. Can we expect similar robust new home sales in the coming months? Why not? There are a number of attractive and well-located projects set to be launched and, if these are priced competitively, sales will follow. Prices may remain weak for the present but, if sales return in a big way, who knows? By Colin Tan – director of research and consultancy at Suntec Real Estate Source : Today – 20 Jun 2014


Hyflux Innovation Centre to be sold to A-Reit for S$170m Hyflux is selling its eponymous Hyflux Innovation Centre at Bendemeer Road to Ascendas Real Estate Investment Trust (A-Reit) for S$170 million in cash and will lease the property back for 15 years, the water treatment specialist said yesterday. The deal, inked with HSBC Institutional Trust Services (Singapore) as trustee of A-Reit, will net a gain of about S$84 million over book value, rental support, and other expenses and charges, Hyflux said. It will free up funds for Hyflux to buy new technology and investments in research and development, allow it to expand and automate its membrane manufacturing operations in Tuas Hub and fund its infrastructure project tenders. The property is about 83.9 per cent occupied and Hyflux will provide rental support for the remaining vacant space for three years, it said. Hyflux executive chairman and chief executive Olivia Lum said: “The sale and lease-back transaction is part of our capital recycling strategy to enhance the efficiency of our balance sheet and to redeploy capital for strategic investments. “Hyflux Innovation Centre will continue to be the nerve centre of our global operations and we intend to remain at Hyflux Innovation Centre for the long term. A-Reit will also be paying an upfront premium of S$21.2 million for the remaining land lease to Jurong Town Corp. With 100 per cent occupancy, the acquisition is expected to generate a net property income yield of about 6.98 per cent in the first year, it said. Following the acquisition, A-Reit’s weighted average lease term to expiry is expected to increase from 3.85 years to 3.96 years, it said. A-Reit will own a total of 103 properties in Singapore and two business park properties in China. Source : Today – 27 Jun 2014


Equity Plaza sold for S$550m to consortium led by GSH Corp Equity Plaza, a 28-storey office tower in Singapore’s central business district (CBD), has been sold for S$550 million to a consortium led by mainboard-listed GSH Corp. Real estate consultancy CBRE, which brokered the sale, said the price works out S$2,181 per square foot (psf) based on the building’s current net lettable area of about 252,135 square feet. Keppel Land was the seller of the property. GSH said it intends to retrofit Equity Plaza, which is 22 years old, to get it on par with newer buildings in the area. “The subsequent investment to upgrade the facade and overall quality of the building will position the group to realise substantial value from the acquisition in the near future,” GSH CEO Gilbert Ee said. Mr Jeremy Lake, CBRE’s executive director for investment properties, said the sale of Equity Plaza reflects continued interest in Singapore’s office market. Just last month, Prudential Tower, another building in the CBD, was sold for S$512 million, or approximately S$2,316 psf. Source : Channel NewsAsia – 25 Jun 2014


Government releases 3 residential sites for sale The Government on Thursday (June 26) announced the launch of three residential sites for sale this month under the first half of the Government Land Sales (GLS) Programme. The two residential sites at Fernvale Road in Sengkang and one Executive Condominium site at Choa Chu Kang Drive – which can collectively yield up to 1,700 housing units – were launched under the confirmed list, the Urban Redevelopment Authority (URA) and Housing and Development Board (HDB) said in a joint statement. The tender for the two Fernvale sites will close on Aug 7, while the tender for the Choa Chu Kang site will close on Sept 4, the statement said. Source : Channel NewsAsia – 26 Jun 2014


3 more industrial sites released for sale The Urban Redevelopment Authority (URA) and JTC have launched three sites under the Industrial Government Land Sales (IGLS) Programme, as part of the Government’s efforts to offer more choices for industrial development. In a joint statement on Tuesday (June 24), the agencies said two confirmed list sites at Gambas Crescent and off Tuas South Avenue 7, and a reserve list site off Tuas South Avenue 14 are now available for public tender. Confirmed list sites go on sale regardless of interest from developers, while reserve list sites are triggered for a public tender only if a developer makes an acceptable opening offer. The 1.57-ha site at Gambas Crescent released by the URA is zoned for Business-1 development and has a 30-year tenure and a maximum gross plot ratio of 2.5. The Tuas site on the confirmed list launched by JTC has a land area of 25,700 sqm, and is zoned for Business-2 development with a lease of 30 years and maximum gross plot ratio of 2. Additionally, the reserve list site in Tuas is launched by JTC and is zoned for Business-2 development. It has a 30-year tenure and maximum gross plot ratio of 2, according to the statement. The closing date for the tender of the Gambas Crescent site is Aug 26, 2014 at 12pm, while applications for the Tuas site will close on the same day at 11am, the statement said. Deputy Prime Minister Teo Chee Hean said last Friday that the new supply of industrial and retail space coming up in the next three years is double the average demand over the past three years. “This strong upcoming supply of industrial and retail space will give businesses more options and ample space to expand their operations in Singapore,” he said. Source : Channel NewsAsia – 24 Jun 2014


Keeping Zouk at Jiak Kim St not optimising economic value: Analysts The #SaveZouk petition has garnered over 20,000 signatures as of Monday (23 June), from supporters who are hoping that the 23-year-old night spot can continue to operate at its current location at Jiak Kim Street. However, some property analysts say that having a nightspot at the site may not fully maximise its economic value. “Based on the new masterplan, where Zouk is located is meant for more intense real estate development. Residential development with commercial space on the first floor, the plot ratio is rather high, it has been increased from 2.8 to 3.5 which means potentially, that location can be developed into a 36-storey condominium with commercial space on the ground floor,” said Executive Director of SLP International Property Consultants, Mr Nicholas Mak. Zouk has said that it intends to shut at the end of this year as it is unable to get a confirmation on the lease extension. Responding to queries from Channel NewsAsia, the Singapore Land Authority (SLA) which manages the site says that Zouk has been granted multiple lease extensions on its current site, and its lease was last extended for another six months, to the end of this year. SLA adds that government agencies have been working closely with Zouk since 2007 to assist them with relocation by identifying alternative location. One potential site offered during a discussion was the former People’s Association Headquarters at old Kallang Airport, an option which Zouk has reportedly not taken up, said the SLA. With the strong branding that Zouk has built up over the years, some experts say its name will likely transcend its location. It has successfully held events like ‘Zouk Out’ off its current premises, not to mention the nightspot Zouk at Kuala Lumpur, which is also popular. They add that relocation may not be all bad – especially if it means having more parking spaces and a chance to upgrade. “Zouk at its current state is getting a little rough at the edges, a bit old. Perhaps it may be good if a new location became available, but the condition for their being there or the price cannot be too difficult to sustain a brand like that and I think it is important that Singapore sustains its iconic brands,” said Mr Samuel Seow, Managing Director of Samuel Seow Law Corporation. SLA says state properties are typically rented out for a fixed term of up to three years. This could go up to 6 or 9 years if the planning authority allows a longer tenure. It adds that typically when a tenancy ends, and if there are no development plans for the land, the site will be made available via a public tender to give others a fair and equal opportunity to bid for the property. Apart from the Zouk site, SLA also manages other state properties like Dempsey Hill. They are among some 5,000 state properties under SLA currently. Source : Channel NewsAsia – 23 Jun 2014


SLA frees up three more sites for community use Three more plots of State land reserved for redevelopment were opened up to the public by the Singapore Land Authority (SLA) on Tuesday (June 24). In a statement, the SLA said these lands are former schools and educational institutions reserved for redevelopment, but are now opened to the public for community use in the interim. The three playfields are:

Property Address Area(sqm) Est. Date of Opening
Former Manjusri Secondary School 149 Sims Drive 9,084.2 June 25, 2014
Former ITE Clementi 6 Lempeng Drive 9,912.8 End September 2014
Former ITE Tampines 2 Tampines Street 92 9,858.9 End September 2014

“As long as the field is not required for impending redevelopment, it will be opened 24 hours a day and available for use free of charge and on a non-exclusive basis,” the SLA stated, adding no advance booking was required. The agency will also be working with the Residents’ Committee on activities to promote social and community bonding amongst residents, which would encourage people to lead more active lifestyles. The SLA has been opening up plots of vacant State land to the public for community use since 2003. To data, there are about 282 plots of such land opened to the public and are marked by common signs. The list of such sites can be found on the OneMap online portal. Source : Channel NewsAsia – 23 Jun 2014


Taking stock of the Total Debt Servicing Ratio The Total Debt Servicing Ratio (TDSR) was introduced in June 2013 to ensure financial prudence among borrowers and strengthen credit underwriting practices among banks. The ratio determines how much an individual can borrow from the banks. Under it, total monthly debt payments including home and car loans cannot exceed 60 per cent of the property buyers’ income. These debt payments are wide-ranging and can include home and car loans, study loan, and even credit card debts. In the private residential market, the impact of the TDSR on sales volume quickly became apparent. There were 482 new units bought in July 2013, a drop of 73.3% compared to 1,806 unit) in June 2013. In total, 9,115 new homes were bought since the TDSR was implemented – that’s half the amount bought in a year-on-year comparison from Jul 2012 to May 2013. Analysts we spoke to say the suburban homes were the hardest hit. Numbers compiled by Knight Frank Singapore showed that 63 per cent fewer new homes in the suburbs were bought in the second half of 2013, compared to the first half of the year. “The TDSR basically impacts on mortgage loan eligibility and affordability of private homes and the mass market segment typically caters to upgraders and middle-income home buyers,” explained Knight Frank’s Director of Consultancy and Research, Ms Alice Tan. She added that these buyers might have ended up forgoing their purchases when their loan requests were rejected. “I think the strong performance of the Outside Central Region was one of the reasons why the TDSR was introduced. The Core Central Region was already affected by Additional Buyers’ Stamp Duty, where we saw a lot of foreigners opting out, because they have to pay 10 to 15 per cent in terms of stamp duties,” said Mr Desmond Sim, Head of CBRE Research in Singapore. As for prices, the effect of TDSR was seen later that year. The Urban Redevelopment Authority’s residential property price index slipped 0.9% in the fourth quarter of 2013, the first decline in almost two years. Prices dipped again in the next quarter – this time by 1.3 per cent. making it the largest drop since the second quarter of 2009, when prices fell by 4.7 per cent. In boosting sales, some developers have turned to cutting prices. One of the latest to join the fray is the Panorama condominium in Ang Mo Kio, which relaunched in May at a median price of about $1,241 per square foot. That is about 8 per cent lower than the median price when it was first launched in January this year. But property watchers we spoke to say the discounts are typically for bigger or “less prime” units, and developers are unlikely to lower prices across their projects. “Developers also have limited room to adjust their prices due to the high land prices they have committed to, earlier on,” said Ms Tan. This is especially so for those who bought their land two to three years back. Developers may also be creating smaller units, to balance between offering palatable prices for buyers, and maintaining their profit margins. According to figures from CBRE, the median size of units in the suburbs declined from 753 square feet in the third quarter of 2013, to 732 square feet in the first quarter of this year. The impact of the TDSR was also felt in the private residential resale market. CBRE’s numbers showed that sales volume in the secondary market dropped by 50 per cent in the first half of this year, compared to the same period last year. “Fortunately enough, mortgage rates still remain relatively low, so home owners, or investors, can still put their units into the leasing pool,” said Mr Sim. “But at the same time, low mortgage rates have not pressured them into putting the units back onto the market for sale.” But it may be increasingly difficult to find tenants, as the Government tightens its foreign labour controls and more new homes enter the market in the coming months. The Urban Redevelopment Authority estimates that a total of 18,350 units will be completed this year, while another 21,738 units, excluding executive condominiums, are expected to be completed in 2015. Source : Channel NewsAsia – 23 Jun 2014


Enough retail, industrial space for businesses to grow: DPM Teo The Republic has taken significant steps to remain competitive and companies that want to expand here will have sufficient space to grow, Deputy Prime Minister Teo Chee Hean said on Friday (June 20). Speaking at a luncheon that followed the annual general meeting of the Singapore International Chamber of Commerce, Mr Teo said the Government hopes to see more companies use Singapore as a base to seize growth opportunities in Asia. “The new industrial and retail space coming on-stream in the next three years provides new supply that is double the average demand over the past three years. This strong upcoming supply of industrial and retail space will give businesses more options and ample space to expand their operations in Singapore,” he said. Mr Teo also said that by end-2016, prime office space in core business areas should have increased by about 13 per cent from current levels. Price and rentals of private residential properties have levelled off since the last quarter of 2013, he added. Source : Channel NewsAsia – 20 Jun 2014


New supply could push up vacancy rates for office space market in 2016 Property consultants on Wednesday (June 18) said the office space market in Singapore could see a slight moderation in 2016, when some 4 million square feet of new supply come onstream. New office buildings are already taking a longer time to find tenants, they said, and this could push vacancy rates up in the Central Business District. According to analysts, the take-up rate in the Central Business District has been relatively healthy in the past year, cutting the vacancy rate from about nine per cent to the current five per cent. Some 1.8 million to 2 million square feet of office space is expected to be taken up this year. The average monthly rental rate for Grade A office buildings in the CBD is about $10 per square foot and this could rise by 10 per cent over the next 12 months, according to some analysts. “The concern is in 2016 where you have the completion of Guoco Tower, the completion of Marina One and DUO,” said Mr Donald Han, Managing Director of Chestertons Singapore. “These offices, combined with a few others, will offer almost 4 million square feet. We expect the market to see some form of moderation, or some form of down trend in 2016.” Over the next six months, as more buildings like South Beach and CapitaGreen are completed, vacancy rates may increase as “the new buildings are not completing with full occupancy”, he added. As of April 15 this year, about 12 per cent of CapitaGreen’s net lettable area of 700,000 square feet has been committed. Its developer CapitaLand said it was “optimistic” about progressively achieving 50 per cent commitment by the end of the year. Responding to Channel NewsAsia’s query regarding concerns about oversupply of office space, CapitaLand said: “The total gross new supply of office space in Singapore’s Central Area from 2014 to 2018 is about 6 million square feet, but this only translates to an average gross new supply of about 1.2 million square feet per annum. This annual average gross new supply of 1.2 million square feet is not expected to be excessive given that in the past five years, from 2009 to 2013, the historical average annual net demand was around 1 million square feet while historical average annual net supply was 1.2 million square feet.” Over at the South Beach Tower, which is also expected to be completed by the end of this year, more than 50 per cent of the office space is under negotiation. The project has 500,000 square feet of lettable prime Grade A office space, and its first tenant is a foreign bank which has leased about 30,000 square feet of space. Industry players noted that tenants are not taking up as much space as before. Mr Warren Bishop, CEO of Raffles Quay Asset Management (RQAM), said: “You are typically seeing transactions in the smaller size category, such as 10,000 square feet and 5,000 square feet. There is quite a lot of activity in that area. Bigger tenants are not in the market currently. It’s not that they are downsizing or shrinking, but a lot of the bigger tenants we sign on our portfolio, you are talking about 100,000 to 300,000 square foot tenants. They would typically have signed longer-term leases and not do any transaction at the moment.” RQAM’s portfolio of two properties – Marina Bay Financial Centre and One Raffles Quay – is about 98 per cent leased. The developer said there will probably be an under-supply of office space in the next 18 months and the supply that is due to come onstream in the next few years is “not unmanageable”. Established by Cheung Kong Holdings, Hongkong Land and Keppel Land in 2001, RQAM is keen on new development sites in the Marina Bay area, but will not commit to whether it will bid for a white site that is placed on the Reserve List of the Government Land Sales programme for the second half of 2014. The site, located near Marina View and Union Street has an estimated commercial space of 101,400 square metres of gross floor area. Mr Bishop said: “As a consortium, we prefer larger sites that are available in the Marina Bay reclamation area. Naturally we will be looking at sites more within our vicinity, adjacent to Marina Bay Financial Centre. Whether or not we will look at the Union Street site, we will have to see. At the end of the day if it is attractive, certainly the shareholders might look at it. But the natural lean would be towards a site more adjacent to where we are now.” Source : Channel NewsAsia – 18 Jun 2014


Price cuts for homes in Core Central Region? Developers in Singapore have been cutting prices for some city fringe and suburban projects. Property watchers Channel NewsAsia spoke to say price cuts are likely to be done in a “very limited way” in the city area despite a lower take-up rate of new homes there over the past year. Developers have been launching fewer units in the city area. For instance, in the first five months of this year, 231 units have been launched as compared to 807 new private homes in the same period last year. The number of new private homes being bought in the city area is also getting fewer. For example, from January to May this year, 203 units were bought compared to 1,017 new private homes sold in the same period last year. Some analysts say the Additional Buyer’s Stamp Duty has played a crucial role in keeping high-end buyers away. Mr Ku Swee Yong, CEO of Century 21 Singapore, said: “Firstly, they (homes in the city area) appeal to foreigners, and foreigners are not back in due to that 15 per cent tax (Additional Buyer’s Stamp Duty). Secondly, many of these units in the core central region are still designed with large format of 1,500, 2,000 square feet.” Some developers have turned to cutting prices to attract buyers. Developer MCL Land of the Hallmark Residences in the Bukit Timah area trimmed prices by some 10 per cent earlier this year. It has sold about 30 units since. However, property watchers say developers of these luxury homes are unlikely to go to town offering discounts. “The Qualifying Certificate (QC) which compels them (developers) to build within five years and sell within two years of TOP (Temporary Occupation Permit) – there is a penalty,” said Mr Ku. He added: “At this moment, for most developers who are holding on to their stock, paying the penalty is still worthwhile compared to giving a discount. Once you have given a discount on one unit, it hurts the valuation of the remaining units that are unsold.” Mr Desmond Sim, Head of CBRE Research Singapore, explained: “Generally by not giving direct discounts, it will help overall in the value of the project so at the end of the day, when the market turns, the value of the project is maintained and preserved.” Developers with deeper pockets, or are not hitting the deadlines stipulated under the QC scheme, may choose other strategies. SLP’s Executive Director of Research and Consultancy Nicholas Mak said some of the developers of these prime properties may choose to lengthen their marketing period, and in the meantime, turn to other areas for development such as the city-fringe or even overseas projects. About six projects in the city area will be launched in the next few months, according to Savills Singapore’s latest residential sales report. This includes the Marina One, a mixed development at Marina Way. The developer for this project is also behind the 660-unit Duo Residences in Bugis, which sold 600 units in the month it was launched. The condominium was launched in November last year and according to figures from the Urban Redevelopment Authority, the 600 units were sold at prices between S$1,513 and S$2,596 per square foot (psf). This compares to an average of S$2,300 psf the other projects in the vicinity were going for. Source : Channel NewsAsia – 18 Jun 2014


Frasers Hospitality to launch IPO at 88 cents per unit Frasers Hospitality Trust (FHT) has priced its upcoming initial public offering (IPO) at S$0.88 per stapled security, giving investors who buy into the offer an indicative yield of 7 per cent per annum. According to a draft prospectus filed on the Monetary Authority of Singapore’s (MAS) website on Monday (June 23), Frasers Hospitality will sell 182.1 million stapled securities at S$0.88 apiece in its upcoming IPO. A further 232.9 million stapled securities will be issued to cornerstone investors, such as DBS and Fortress Capital Asset Management, at the same price. Frasers Hospitality – which has a portfolio of 12 properties including the InterContinental Singapore and Westin Kuala Lumpur hotels – will start trading on the Singapore Exchange on July 14. Its market capitalisation will be around S$1.04 billion based on the IPO price, according to the prospectus. Frasers Hospitality is managed by Frasers Centrepoint, the former property arm of Singapore’s Fraser and Neave. Its initial portfolio comprises six serviced residences from Frasers Centrepoint – Fraser Suites Singapore, Fraser Suites Sydney, Fraser Place Canary Wharf, Fraser Suites Queens Gate, Fraser Suites Glasgow, and Fraser Suites Edinburgh. The other six properties are from Frasers Centrepoint’s Thai parent TCC Group. They are the InterContinental Singapore, Novotel Rockford Darling Harbour, Park International London, Best Western Cromwell London, ANA Crowne Plaza Kobe and Westin Kuala Lumpur. Source : Channel NewsAsia – 23 Jun 2014


Ascott secures another four contracts in China Serviced residence operator Ascott has secured another four management agreements in China, the company said on Monday (June 23). Ascott, CapitaLand’s wholly-owned serviced residence business unit, said it will operate its first serviced residence in Taiyuan, the 170-unit Ascott Taiyuan, which is slated to open in 2018. It will also operate the 195-unit Ascott Riverside Garden Beijing and 342-unit Somerset Sunland Shanghai – both slated to open in 2016 – and a property in Dalian which has been rebranded as a 195-unit Somerset Grand Central Dalian. The four new properties bring the total number of apartment units managed by Ascott to more than 35,000 globally, the company said. In China, Ascott’s portfolio will expand to more than 11,600 apartment units in 64 properties across 21 cities. Mr Kevin Goh, Ascott’s Managing Director for North Asia, said the company sees “great potential in the China (Shanghai) Pilot Free Trade Zone, where favourable policies have already attracted many multinational companies to establish their presence there”. This will drive demand for accommodation in the area, he said, adding that Ascott plans to have 12,000 apartment units in China by next year. Source : Channel NewsAsia – 23 Jun 2014


Far East Orchard Group CEO Lucas Chow to retire Far East Orchard will soon have a new man at the helm. The property firm announced on Wednesday that Group CEO and Managing Director Lucas Chow will retire on September 1, 2014. Mr Chow, who is 61 years old, will be succeeded by Mr Lui Chong Chee, who has extensive financial and management leadership experience from major listed companies, including Raffles Medical Group and CapitaLand Group. Mr Chow has been a Director of Far East Orchard since June 1, 2008. He was appointed Chief Executive Officer and Managing Director on March 15, 2012, and subsequently re-designated as Group Chief Executive Officer and Managing Director on July 12, 2012. In a statement on Wednesday, Far East Orchard said that during his tenure, Mr Chow had played a pivotal role as the group transformed itself into a major regional hospitality and property company. Source : Channel NewsAsia – 18 Jun 2014


Paya Lebar site may cost more than a billion dollars: Analysts A commercial site along Paya Lebar Road that is expected to be launched for sale later this year could set the tone for the development of the Paya Lebar regional centre. That is according to some property analysts, who also say that any developer keen on the site may have to cough up more than a billion dollars, just in land cost alone. In October, the Government is expected to release a 4-hectare commercial site next to the MRT station for sale. Some analysts estimate that the potential “Grade A” development could offer about one million square feet of net lettable space, with office space taking up about 50 to 60 per cent. About 440 residential units can also be built there. However, the site will not come cheap. “The land cost alone will be S$1 billion or even more, and that increases the risk to any single developer who wants to take a bite of this,” said Mr Alan Cheong, Senior Director of Research & Consultancy for Savills Singapore. He believes that developers will come in as a consortium for this particular site. “This project itself, with more than 130,000 sq metres of gross floor area commercial space, together with Paya Lebar Central, will set a tone for this area,” he added. “There is no character right now for Paya Lebar.” Once a sleepy industrial estate, Paya Lebar was earmarked for development as a commercial hub outside the city centre under the 2008 Masterplan, as part of the government’s decentralisation strategy. But some property-watchers say that the area — with its mix of workshops and industrial premises — seems to lack a core focus right now, compared to regional centres in Jurong and Tampines., and believe more can be done to attract more companies to locate here. Said Century 21 CEO Ku Swee Yong: “SingPost is obviously not sufficient now to bring in a lot more demand for office space, or fill up the industrial B1 space in the Paya Lebar area. But if, for example, we have a Government ministry that is willing to relocate there with about 70,000 sq ft of space – that could be a trigger, a catalyst that would bring other SMEs and service-providers to Paya Lebar Regional Centre.” According to Savill, the average office rental rate at Paya Lebar is currently around $6.50 per square foot per month, compared to S$5.50 in Tampines, and S$7 to S$8 for some of the newer commercial projects in Jurong. Analysts add that Paya Lebar could potentially appeal to firms in the IT, telecom and multimedia industries. Source : Channel NewsAsia – 16 Jun 2014


New private home sales nearly double in May The private residential property market sprang to life in May after months of remaining in the doldrums, with developers’ sales surging 96 per cent as buyers snapped up units at the slew of new launches last month. Developers sold 1,470 new private homes last month, nearly doubling the 749 units that they moved in April, latest data by the Urban Redevelopment Authority (URA) showed on Monday (June 16). Including executive condominiums (ECs), new developer sales rose to 1,528 units in May from 797 units in April. The number of new private homes sold last month is the highest monthly figure since the Total Debt Servicing Ratio was introduced in June last year. The improved sales volume also came as developers launched 1,790 new units into the market in May, nearly three times more than the 600 homes recorded in the previous month. “It is a function of supply, and supply that was with good attributes and good locations, as well as projects that were priced very attractively,” Mr Desmond Sim, the Head of CBRE Research Singapore said of the rise. Two projects by City Developments topped the best-selling list for the month. Coco Palms at Pasir Ris Grove moved 590 of the 600 condominium units launched at a median price of S$1,018 per square foot (psf), while Commonwealth Towers at Commonwealth Avenue sold 275 of 400 homes at S$1,626 psf. Analysts note the higher sales volume last month is a sign that underlying demand is strong, but some say it may be too early to rejoice. “The statistics in May do show that buyers did come back (to the market), but that is after five months of drought, of very low sales,” said Mr Nicholas Mak, the Executive Director of Research and Consultancy at SLP International Property Consultants. “In May, we actually saw a surge in the number of units launched. Developers launched roughly about three times more private home units in May compared to April. But the take-up rate only doubled. It actually shows that the private home market is still fairly soft,” Mr Mak said. Observers say attractive prices will continue to be the key consideration for buyers against the backdrop of existing cooling measures. For instance, the 100 units sold last month at The Panorama at Ang Mo Kio were transacted at a median price of $1,241 psf. This is about eight per cent lower than what units were going for at the project’s launch in January this year. Another project in the vicinity also achieved similar results after it slashed prices. Developers of The Sky Habitat in Bishan trimmed prices by some 13 percent when the project was re-launched last month. It then sold 130 units at a median price of $1,377 per square foot. “Projects like Panorama and Sky Habitat, they have turned in very good numbers after they have relaunched at better pricings. With the success of this, I am not surprised that developers out there will consider that as an option to move units,” said Mr Sim. For the whole of 2014, analysts expect developers to sell about 9,500 to about 12,000 units. That is about 20 per cent shy of some 15,000 units sold in 2013. Source : Channel NewsAsia – 16 Jun 2014


Private housing market unlikely to see price war, say analysts While more developers have taken to cutting prices to improve sales amid a property slowdown, potential home buyers anticipating a broad-based price war may be disappointed as the private residential market has yet to reach a tipping point that could trigger such a situation. Analysts told TODAY that most developers are not in a rush to lower prices given that demand has yet to reach a standstill. Projects that have been relaunched at a discount are isolated cases that are unlikely to result in intense price competition in the market, they said. Multiple sets of cooling measures and loan restrictions introduced last year have kept buyers on the sidelines, forcing some developers, including CapitaLand, South-east Asia’s largest listed developer, to re-launch certain projects at lower prices to generate demand. CapitaLand in April re-launched its Sky Habitat condominium in Bishan at about 10 to 15 per cent lower than its initial launch price, helping it sell 130 units in that month alone. This was compared with the 182 units sold since Sky Habitat’s launch in April 2012. In February, MCL Land cut prices at Hallmark Residences at Ewe Boon Road by about 10 per cent. Sales have jumped about eight times to 41 units since, versus the five sold before the discount. And at Wheelock Properties’ The Panorama in Ang Mo Kio, a 10 to 15 per cent price cut helped offload an additional 80 to 85 units, adding to the 56 units moved since its initial launch in January. Despite these success stories, developers are unlikely to launch into a broad-based price war, said analysts. “If we look at the few developers that are cutting prices, their projects tend to be a bit isolated. For example, there are no other new 99-year launches near The Panorama and there’s also no similar competing project around Sky Habitat … I don’t think we’ve reached a situation where there’s a price war,” said Mr Nicholas Mak, executive director of research and consultancy at SLP International. Singapore’s low interest-rate environment is also expected to continue to sustain demand in the long run, offering little reason for developers to slash prices too drastically. “I think developers will not participate in a price war until interest rates start rising steadily. At the moment, there’s no indication that prices will collapse in a big way … Many developers are doing okay financially, they just have to nudge it, offer a little discount, to keep their income stream,” said Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants. “Many times the discounted units are the relatively unpopular ones, for example, those on lower floors or facing a less desirable direction. These units are valued at a lower price anyway, so a market-wide impact is quite limited.” Private home prices fell for the first time in almost two years in the last three months of last year, slipping 0.9 per cent on a quarterly basis. In the first quarter of this year, prices declined another 1.3 per cent, showed Urban Redevelopment Authority (URA) data. But recent moves by developers to reduce prices are helping to draw buyers’ attention. In April, 745 new private homes were sold, up 55 per cent in March. To further boost activity, developers of slow-moving projects may want to consider taking prices a little lower, said Ms Penny Yaw, head of research at HSR International Realtors. “In recent years, we have seen property developers throwing in non-cash goodies to justify higher selling prices and to encourage sales. We think the time is ripe to take out some of these freebies and to simply reduce the selling prices … If prices were to be reduced by 15 to 20 per cent, the unsold units would move fairly quickly,” she said. But several developers contacted by TODAY said they have no immediate plans to slash prices. TA Corp, part of the joint venture developing The Skywoods at Dairy Farm, said: “Despite the impact of the Total Debt Servicing Ratio on overall market sentiment, we have seen encouraging take-up for The Skywoods … We are monitoring buyers’ sentiment closely and have no plans to change our marketing strategy as yet.” Far East Organization also said it has no plans to relaunch any of its projects. Meanwhile, buyers of projects that have since been relaunched at lower prices need not be too concerned that banks will come chasing them for a top up on their housing loans. “I think it’s still too early for the banks to request for top ups as the price falls are still moderate and the ability of borrowers to service their housing loans remain strong,” said head of mortgage advisory at REMS Advisor Chew Ching Lien. “While the existing owners may be sitting on paper losses, the property market moves in a cycle and valuation may come up again when these projects are completed.” OCBC Bank’s head of consumer credit risk Joseph Wong echoed that sentiment, saying that the possibility of invoking a margin call on housing loans is low given that movements in local home prices are rather stable. Source : Today – 13 Jun 2014


Singapore firms remain upbeat about Iskandar Despite lingering concerns about shrinking cost advantages and a lack of skilled labour in Iskandar Malaysia, the developers of a new industrial estate have said the special economic zone remains a compelling choice for Singapore companies to expand or relocate to amid land and manpower constraints at home. Nusajaya Tech Park will be the latest addition to the Iskandar economic infrastructure when its first stage is completed in 2016. The industrial estate is already drawing strong Singapore interest, said Mr Manohar Khiatani, chief executive of Ascendas, which is jointly developing the project with Malaysia’s UEM Sunrise. “Out of our first soft launch of ready-built facilities, 40 per cent have been pre-committed — a large proportion of them by Singapore-based companies,” Mr Khatiani told TODAY at the groundbreaking ceremony yesterday. “When this park is eventually completed, I expect it’ll have a good mix of Singapore companies — which will take up a big proportion — as well as Malaysian and international companies. “The tech park takes advantage of the relative strengths of Singapore and Malaysia. Singapore is a small country with scarcity of land, but the Asian market is still growing. It makes sense for Singapore companies to have a location close by that can accommodate the space and scope for expansion activities.” Similarly, Minister for Trade and Industry Lim Hng Kiang highlighted the potential of Iskandar and encouraged Singapore businesses to consider shifting there if they want to develop operations overseas. “The proximity between Singapore and Iskandar Malaysia provides the opportunity for investors to position their full value chain of business and manufacturing functions across both locations, hence spurring the development of complementary industries. With the right mix of industries and enhanced connectivity, there is potential for both countries to develop a seamless economic space,” he said. A S$1.5 billion joint project that is 60 per cent owned by Ascendas, the 210ha Nusajaya Tech Park will be developed in three phases over nine years, with the first phase set to be completed in 2016. It will offer a mixture of freehold ready-built factories and land plots for built-to-suit developments for about 200 companies in sectors such as precision engineering, clean manufacturing and logistics. The average price is RM380 (S$147) per square foot (psf). In comparison, the cheapest JTC factory space for the Business 1 category is priced at about S$406 psf. Yet despite such attractively-priced industrial land, Iskandar has yet to see a sizable cluster of Singapore companies, which remain concerned over issues such as a lack of skilled labour, incomplete infrastructure and poor security. Mr Philip Tan, ASEAN vice-president of Singapore-based YCH Group, agreed that it may take a while for Iskandar to gain further traction with Singapore companies, but felt the economic zone will eventually grow to its potential as the hub of choice for local businesses. The regional supply chain solutions provider yesterday signed a memorandum of understanding with Nusajaya Tech Park to explore establishing an advanced supply chain facility. YCH is very keen on the partnership, Mr Tan said. “At the end of the day, there will be challenges, one of which is the difficulty in getting skilled labour. There’s always a trade-off — lower costs versus other issues that we need to address,” he said. “But I’m sure these issues are being addressed by the Malaysian authorities and, once they are, Nusajaya Tech Park — as well as Iskandar Malaysia — will be very attractive to Singapore companies.” Ascendas’ Mr Khiatani is similarly upbeat: “The Singapore-Iskandar story remains very compelling — that’s why we’re here. As is the case with every story, there will be ups and down, but we are confident about the growth of Iskandar, and that Singapore businesses and economy will be able to benefit from it.” Source : Today – 13 Jun 2014


Greener high-rise buildings under LUSH 2.0 To further promote greenery in Singapore’s urban landscape, the Landscaping for Urban Spaces and High-Rises (LUSH) initiative has been expanded to cover more development types and geographical areas than its original scheme, the Urban Redevelopment Authority (URA) said yesterday. Termed LUSH 2.0, the enhanced programme includes additional incentives and regulations to encourage developers and building owners to adopt more green features. One of the enhancements requires a larger number of buildings to replenish greenery displaced during their development. Bonus gross floor area (GFA) over and above Master Plan gross plot ratio limits for rooftop outdoor refreshment areas will now be extended to new developments and redevelopment proposals. The URA will also be more flexible in considering covered areas of communal ground gardens and wider communal planter boxes for GFA exemption. “The provision of greenery in Singapore has always been important in our planning — not just because it beautifies our city, but because we see the value of greenery in improving our quality of life. This is an effort that involves many partner agencies, as well as developers and building owners, working together to create a lush environment for people to enjoy,” said URA chief executive Ng Lang. More than 40ha of green spaces have been added within Singapore’s urban areas since the introduction of LUSH in 2009. That is equivalent to 130 primary school fields, the authority said. “The green message is spreading … We are pleased with what LUSH has accomplished and have decided to do more through additional incentives and regulations. Our aim is to make Singapore a great garden and a great home,” Minister for National Development Khaw Boon Wan wrote in a blog post yesterday prior to the URA’s announcement. Developers welcomed the government’s push for more skyrise greenery. Mr Tan Seng Chai, CapitaLand’s group chief corporate officer and chairman of the company’s sustainability steering committee, said: “Skyrise greenery not only enhances the environment by bringing building users closer to nature, but also reduces urban heat gain, which potentially translates to energy savings.” City Developments (CDL) said besides environmental benefits, buildings with green features are also better-received by users. “Besides the carbon and energy usage reduction that can be achieved by doing this, developments with green spaces are also fast gaining popularity as they offer added lifestyle enjoyment for users,” a CDL spokesperson said. “The enhancements under the LUSH 2.0 programme will no doubt keep Singapore at the forefront in creating gardens in the sky, and is a step in the right direction to enhance our ‘Garden in a City’ reputation.” Source : Channel NewsAsia – 4 Jun 2014 Save more while you enjoy the sunrise As you sit on your balcony, would you rather enjoy the sunrise or the sunset over the water? When it comes to property prices, it makes a difference. As measured along the East-West MRT line, you pay less for private housing in the east than you do in the west. Using Raffles Place’s median price per square foot (psf) as the basis for comparison, as you move east or west along the MRT line, prices drop, which means your “savings” on your home increase. That is rather obvious — what’s interesting is that prices drop more quickly in the eastern direction from Raffles Place than in the western one. In the case of Pasir Ris, it pays to watch the sunrise. The median psf for a private condominium within 1km of Pasir Ris MRT station is S$973. This translates to a 60 per cent savings with respect to the median price of condos within 1km of Raffles Place MRT. In contrast, at Lakeside, which requires about the same MRT commuting time as Pasir Ris to the central business district, prices are only 48 per cent cheaper than those at Raffles Place. In direct comparison, Lakeside’s psf price of S$1,281 is a premium of 32 per cent over the Pasir Ris price. This relationship holds true for the entire East-West MRT line. Bugis and Outram Park are both four minutes from Raffles Place. Yet, apartment dwellers in Bugis save 29 per cent, whereas their counterparts in Outram Park save 25 per cent. In head-to-head comparisons of locations with equivalent commuting times to Raffles Place, the east wins every time in terms of savings: Lavender beats Tiong Bahru; Eunos vanquishes Commonwealth; Kembangan tops Buona Vista and Dover; and Tanah Merah topples Clementi. On both the east and west sides of the East-West Line, there are some opportunities to save more even with a shorter commute to the CBD. For example, on the west side, you can save 41 per cent on a Redhill home while enjoying an eight-minute commute to Raffles Place, whereas Commonwealth is a longer commute at 13 minutes but offers a lower 39 per cent in savings. On the east side, you can see a similar dynamic between Aljunied, with 50 per cent savings, and Eunos, with 46 per cent. If you subscribe to the theory that real estate is all about location and convenience in travelling to the CBD, then these areas along the East-West Line with relatively more price savings and less commuting time than their peers suggest arbitrage opportunities worthy of further investigation. By Sam Baker – co-founder of SRX, an information exchange formed by leading real estate agencies in Singapore to disseminate market pricing information and facilitate property transactions. For more details on the statistics used in creating this article, visit srx.com.sg/research. Source : Today – 13 Jun 2014 HUDC estate at Hougang Ave 7 privatised The HUDC estate at Hougang Avenue 7 has been privatised under the Land Titles (Strata) Act, after it obtained the required 75 per cent majority support, the Housing and Development Board (HDB) said on Friday (June 13). This means that the Aljunied-Hougang-Punggol East Town Council is no longer responsible for managing and maintaining the common properties of the estate, which comprises 286 units of flats at Blocks 344 to 350 Hougang Avenue 7. The Management Corporation Strata Title Plan No. 4013 will be constituted to take over the management and maintenance of the estate’s common properties. Individual owners in the estate will own their respective strata units, as well as the common property such as car parks and open landscaped areas, as tenants-in-common, the HDB said in a statement. Among the 18 HUDC estates in Singapore, 16 have completed the privatisation process. For the remaining two estates, Potong Pasir is currently undergoing privatisation, while Braddell View has just obtained the support level for privatisation. Source : Channel NewsAsia – 13 Jun 2014 Holland Village shops should innovate: analysts Property analysts say existing shops at Holland Village will have to innovate and keep pace with changing demands when a new mixed-use development in the area opens in the future. Authorities announced on Tuesday that a commercial and residential plot at Holland Road is being released as part of the Holland Village Extension plan, as unveiled in the 2014 Master Plan. Mr Sam Thambi and his family have been running their magazine and newspaper business, Thambi Magazine Store, at Holland Village for over three generations since the 1940s, and they have practically become an icon of the area. But with a new mixed-use development coming up, Mr Thambi said he has some concerns about how that might impact business. “Having new buildings — well it’s inevitable, we can’t stop developing, we have to grow. At the same time, if we can come up with an idea to still retain this village atmosphere — which we’ve already lost more than 50 per cent of it — I don’t know how they can do it, but if we can retain it, then it’ll be very good. “Somehow I’ve bonded with this area, I had offers at other parts of Singapore, but I’ve never wanted to go,” he said. Property analysts said the new development is likely to bring more footfall to the area, which may also translate into higher shop rentals. Competition from new outlets could also lead to existing landlords wanting to spruce up — another reason why rentals might rise. “For certain trades, they probably have to innovate themselves, to make sure they’re keeping pace with the demand and supply and also the kind of changes taking place in the area, because you may attract many different kinds of shoppers or people who visit the place. “To cater for that kind of new demand, the tenants will always have to innovate to make sure they can actually provide value-added service. So that is another way to justify the higher rental,” said Associate Professor Sing Tien Foo from the National University of Singapore’s Department of Real Estate. But some existing outlets say they are confident that customers will still patronise them in the long-run. Faizal Ahmad Rajah, operations manager at Barossa Bar, said: “Probably because it’s a new thing at Holland Village, so at the beginning it’ll probably affect the business. “But because knowing Holland Village and the atmosphere on its own, the guests will probably come back.” Observers say the new mixed-use development could see a variety of essential services including clinics, dentists as well as education centres, along with more food and beverage outlets to complement the existing offering. The new mixed-use development will also provide more housing options for people, with an estimated 580 residential units. But some property analysts say the units are likely to be small, being either two-room or studio apartments, which may be more appealing to younger households. Ku Swee Yong, CEO of Century 21 Singapore, said: “There hasn’t been any significant development for the several hundred apartments that have been launched within a five-minute walking distance from Holland Village in the last five years. “One MRT station away up north and one MRT station away down south, and prices have already gone as high as over S$2,000 per square foot. “So we would expect the developer who is bidding for this to be pricing their residential component, estimated at 580 units, at above S$2,000 per square foot when they open for sale. “The commercial units would be worth around S$4,000 per square foot type of value, and that would mean that the total bid price for this piece of land may be as high as a billion dollars. “That would also then help some of the older existing properties increase their value, because of the potential of the attraction of this new development at Holland Village. “I would recommend investors to focus on looking at properties around Holland Village, probably focusing on the freehold properties that are now priced at about S$1,300 to S$1,400 per square foot — they should be able to see significant capital gains in the future.” The commercial and residential site is expected to be launched in December. Source : Channel NewsAsia – 11 Jun 2014 World’s largest vertical garden in Singapore A “Tree House” in Singapore has entered the record books as the world’s largest vertical garden. The Tree House condominium in Upper Bukit Timah and on Chestnut Avenue features a 2,289-square-metre vertical garden on its facade. City Developments Limited announced on Wednesday that it was officially recognised by the Guinness World Records. Its green features make it a soaring success as well, and are expected to help save over S$500,000 in energy and water savings annually. CDL said the vertical garden reduces the estate’s carbon footprint by filtering pollutants and carbon dioxide out of the air. It also reduces the building’s heat absorption such that residents whose homes are insulated by the green wall could see air-conditioning energy savings of between 15 and 30 per cent. Mr Kwek Leng Joo, CDL deputy chairman, said: “We have continuously pushed the boundaries with breakthrough sustainable designs and features as well as state-of-the-art technologies. “With the eco-inspired Tree House, CDL has not only created a place where residents are proud to call home but more importantly, a green icon which placed Singapore in the world map.” Source : Channel NewsAsia – 12 Jun 2014 URA’s urban greening initiative taking root: Khaw The Landscaping for Urban Spaces and High Rises (LUSH) programme by Urban Redevelopment Authority (URA) is helping spread the “green message” in Singapore, said National Development Minister Khaw Boon Wan. In a blogpost on Thursday (June 12), Mr Khaw said the LUSH initiative has supported the development of 40 hectare (ha) of new high-rise and urban greenery, equivalent to the size of 130 primary school fields. More than one-third of shopping malls, offices and hotels have applied for LUSH incentives in the last two years, while more than half of eligible residential developments have done likewise, the minister revealed. In fact, in areas such as Marina Bay and Jurong Gateway, URA mandates developers to replace greenery they have displaced with green communal spaces that are “at least equivalent to the land area of the development” – a 100 per cent replacement, he said. One example of such a development is the Westgate shopping mall at Jurong Gateway, with its “lush vertical greenery, sky terraces and roof gardens”, he added. “We are pleased with what LUSH has accomplished and have decided to do more, through additional incentives and regulations. Our aim is to make Singapore a great garden, and a great home,” Mr Khaw said, adding URA will announce details of the incentives and regulations “shortly”. Source : Channel NewsAsia – 12 Jun 2014 Resale prices, volume for non-landed private homes fall in May Resale transactions for non-landed private residential units fell by 7.5 per cent month-on-month in May, and prices dipped slightly to mark a 17-month low since December 2012, according to Singapore Real Estate Exchange (SRX). In its flash report for May released on Monday (June 9), SRX said an estimated 421 transactions were registered, down from the 455 transactions in April. This represented a 42.6 per cent drop from the 734 units resold in the same month last year, it added. Commenting on this, real estate agency ERA said: “Buyers may have diverted their attention to hot new projects that were launched by developers at attractive prices, for example Commonwealth Towers, as well as projects relaunched by developers at lower revised prices such as Sky Habitat.” Overall resale prices dipped slightly by 0.3 per cent, with the city area leading the drop with 2.9 per cent and the suburbs seeing a 0.3 per cent dip. The city fringes climbed by 0.6 per cent though, the report stated. The majority, or 16 of 25 districts, experienced negative Transaction Over X-value in May, led by District 9 (Orchard, Cairnhill, River Valley) and 14 (Geylang, Eunos), SRX said. Bucking the trend, units in the Bukit Timah, Holland Road and Tanglin district (District 10) posted the highest positive Transaction Over X-value among districts with more than 10 transactions with S$80,000. This was followed by those in Upper Bukit Timah and Ulu Pandan (District 21) with S$29,000, it noted. “Resale prices have continued to fall with sellers becoming more realistic about reduced demand. The private resale market remains gloomy and prices may continue to moderate to the loan curbs like the Total Debt Servicing Ratio (TDSR),” ERA said. Source : Channel NewsAsia – 9 Jun 2014 Government releases 23 land sites for sale The Government on Tuesday (June 10) announced the launch of nine confirmed list and 14 reserve list sites under the second half of the Government Land Sales (GLS) Programme. These 23 sites can collectively yield up to 10,200 private residential units – including 1,500 Executive Condominium (EC) units – and 352,000 square metres (sq m) of gross floor area of commercial space, the Ministry of National Development (MND) said in a release. Confirmed list sites go on sale regardless of interest from developers, while reserve list sites are triggered for a public tender only if a developer makes an acceptable opening offer. The confirmed list comprises six private residential sites, including three EC sites, two commercial and residential sites, and one commercial site. The sites on the confirmed list can yield about 3,900 private residential units, including 1,500 EC units, and 159,000 sq m gross floor area of commercial space. The number of residential units is lower compared to the 4,630 units offered in the first half of the year, and some 6,000 units in the second half of 2013. Donald Han, managing director of Chesterton Singapore, said: “I think the government is sending a very clear signal that they are aware of the the current market being on an oversupply state and they have also noted that generally there has been a paring-down in developers bidding for sites.” The reserve list comprises 12 private residential sites, one commercial site and a White site. These sites can yield about 6,300 private residential units and 193,000 sq m gross floor area of commercial space. The MND said that the GLS Programme, together with the “large supply” from projects in the pipeline, is expected to be adequate to meet the demand for private housing and commercial space over the next few years. RESIDENTIAL SITES The residential sites to be placed on the confirmed list are located across all regions in Singapore. MND added a commercial and residential site at Holland Road will be placed on the confirmed list as part of the Holland Village Extension plan unveiled in the Master Plan 2014. It said the site will provide “new housing options within a mixed use development that is well connected via pedestrian linkages to surrounding transport nodes and public spaces”. COMMERCIAL SITES MND also said it will be releasing a commercial site at Paya Lebar Road for sale on the confirmed list. The 3.98-hectare (ha) site comprises a commercial site that was on the reserve list for the first half of 2014, and another plot of land immediately south of Paya Lebar MRT station. The two plots of land will be connected via a subterranean space under Sims Avenue. “The sale of the site will facilitate the development of Paya Lebar Central into a commercial node, which is in line with the Government’s objective of decentralising employment centres and bringing jobs closer to homes,” the ministry said. Nicholas Mak, executive director of research and consultancy at SLP International Property Consultant, said: “Some developers may be attracted to it because the developments that can potentially be built on it is going to be the first of its kind in the Paya Lebar area. “It is going to be an integrated shopping mall, with office space as well as apartments on it.” But analysts said developers may be deterred by the high construction costs and challenges in developing the site — the plot of land is located directly across the Paya Lebar MRT station. A canal also runs through the site. Analysts also noted that the 352,000 sq m of commercial sites released in the second half of its land sales programme this year is almost 80 per cent more than what was launched in the first half of this year. Mr Han said this likely signals the government’s intention to keep office rents affordable. He said: “They are also pre-empting the fact that they should come up with supply to pre-empt a scenario of what we have experienced in 2007, 2008 — where there was a shortage of office supply and we saw rents shooting up by as much as 40 to 50 per cent per annum. “So I think it is just prudent for the government to come up with more sites since rents have started to move upwards.” Two sites for office developments will also be placed on the reserve list – a white site at Marina View and a commercial site at Beach Road. These sites will provide opportunities for the market to initiate the development of more office space if there is demand, MND said. Apart from the GLS Programme, the Government will also make available other supply of land and properties through its various agencies. These include localised retail facilities at HDB estates, industrial estates, MRT stations, sport facilities and community, MND said. Source : Channel NewsAsia – 10 Jun 2014 Silat Ave SIT flats gazetted for conservation Five former Singapore Improvement Trust (SIT) blocks at Kampong Silat have been gazetted for conservation under the Urban Redevelopment Authority’s (URA) Master Plan 2014. Originally there were 15 blocks of flats located at Silat Avenue – mostly built between 1949 and 1952. Some blocks have since been demolished. In 2007, residents moved to Kim Tian Road under the Selective En-bloc Redevelopment Scheme. URA said there are plans for the blocks to be part of a new residential development, and the timing of the development will depend on market conditions. When asked, an analyst gave some suggestions on what could be done for the vacant land around these five blocks. “One (option) is for the government to develop the sites into high rise HDB flats,” said Nicholas Mak, Executive Director, SLP International Property. “Another option is for the government to sell the flats and the land to a private developer to redevelop it and perhaps rent it out as service apartments; or the government could also consider renovating these old flats and renting them out on a short-term basis.” Source : Channel NewsAsia – 10 Jun 2014 Profitable Plots directors jailed for cheating investors Two directors and shareholders of Profitable Plots were on Monday (June 9) convicted of conspiracy to cheat investors of about S$979,000. Timothy Nicholas Goldring was handed a seven-year jail term, while another director, John Andrew Nordmann was given eight years’ jail. Nordmann’s wife, Geraldine Anthony Thomas, was acquitted. District Judge Chay Yuen Fatt found that Goldring and Nordmann had dishonestly represented the investment scheme, known as Boron CLS Bond, to investors. The Britons had told investors their funds would be used for the purchase of Boron products, but the bulk of the money went to Profitable Plots’ operations and other expenses. They also told investors the Boron products had been pre-sold to major corporations, but this was not true. Each of them had faced 86 charges for cheating investors of over S$3.1 million in total. However, the Prosecution proceeded on a joint trial of 18 of the 86 charges, with the remaining 68 charges stood down for the time being. Both men plan to appeal. Source : Channel NewsAsia – 9 Jun 2014 Sheng Siong to buy Tampines property for $65m Supermarket group Sheng Siong intends to purchase a three-storey Housing and Development Board (HDB) commercial property in Tampines Central for S$65 million, it said in a statement on Monday (June 9). Sheng Siong said it has paid an option fee of S$650,000 for the 3,876 square metre leasehold property to the vendor, S-11 Wan Jin Investment. The property is near Tampines MRT station. The proposed acquisition will allow the group to establish a presence in Tampines, one of Singapore’s largest residential districts. Sheng Siong said it plans to open a new outlet of around 910 square metres at the Tampines property in the first quarter of 2015. The outlet will be incrementally enlarged in tandem with the scheduled expiry of various tenancies in 2016 and 2017. Sheng Siong, which is one of Singapore’s largest supermarket operators, reported a 19.3 per cent year-on-year increase in net profit to S$12.5 million for the three months ended March, as higher turnover and improved gross margins offset higher costs. Source : Channel NewsAsia – 9 Jun 2014 CapitaLand to acquire remaining CapitaMalls shares Singapore property giant CapitaLand has crossed the shareholding threshold that will allow it to compulsorily acquire the remainder of CapitaMalls Asia (CMA). As at 5pm on 6 June, CapitaLand and concert parties own or have agreed to buy 97.1 percent of CMA’s issued share capital — above the 97.02 percent level that will allow the compulsory acquisition, a spokeswoman said on Sunday. CMA shares will be suspended from trading on Tuesday, and CapitaLand has submitted an application to the Singapore Exchange to de-list its shopping mall arm. CapitaLand wants 100-percent control of its shopping mall arm to simplify its group structure so that it can more easily embark on mixed development projects. Before it began its privatisation bid, the Singapore developer owned about 65 percent of CMA, which has interests in more than 100 shopping malls across Singapore, China, Malaysia, Japan and India. Source : Channel NewsAsia – 8 Jun 2014 More malls going green More shopping malls in Singapore are going green in the global push to be more environmentally friendly. Such green features help to reap savings in energy and water usage. But in addition, some consultants say, they also help to create a safer shopping experience for consumers There are 32 eco-malls in Singapore according to the Building and Construction Authority, and some of the green features do enhance your shopping experience without you even knowing it. Lend Lease which manages 313@Somerset along Orchard Road says such features include a highly efficient air-conditioning system that generates more airflow but less noise, skylight that lets in natural lighting, and the use of what’s called low volatile organic compounds or low VOC paints which are less toxic. “It is creating a more comfortable environment,” said John Sironic, Head of Retail Operations at Lend Lease. “The paint is less volatile, there is fresher air coming through, we use bulbs with reduced flickering so there is less of a stress in your eyes which can potentially give people headaches.” Lend Lease says 313@Somerset achieves annual energy savings equivalent to powering about 6,700 4-Room HDB flats in a month. While water savings works out to an equivalent of six Olympic sized swimming pools. The mall operator is also working with tenants to drive more sustainable practices. “The way our model works is if they introduce some of these greening initiatives, and these initiative have in turn reduced energy cost that they may be charged, we may discount some electricity cost for example,” Sironic added. Lend Lease says typically air conditioning uses the most energy in a mall, followed by escalators and lifts, and lighting. Together they account for about 70 to 80 per cent of total energy consumption.” Over at City Square Mall on Serangoon Road, Singapore’s first eco-mall, there is a green feature which collects rain water to be re-used for irrigating plants. Mall Manager City Developments Limited (CDL) says such efforts have helped the mall reap annual water savings equivalent to nearly 10 Olympic-sized swimming pools. CDL says annual energy savings is equivalent to powering 3200 4-room HDB flats for a year. The developer adds that it invests 2-5 per cent of construction cost of new developments on green building design and features. But it says that there is more to going green. “It is easy to make a mall green in terms of technology, in terms of infrastructure, however to be sustainable it is more important to engage the community at large to learn about sustainability — to know about energy conservation, waste recycling, water conservation,” said Allen Ang, Head of Innovation & Green Building at CDL. So CDL has placed eco-messages around City Square mall to drive greater awareness. Consultants say that, increasingly, more developers are building green properties. “You have lower over-heads, and in some studies, it also translates into better occupancy rate, better rental rates, as well as resale value,” said Owen Wee, Vice President, Building Consultancy Services at Surbana International Consultants. “Developers are recognising that it is an asset protection strategy as well.” Meanwhile, building tenants are also getting in on the greening act. The Building and Construction Authority says at least 50 tenants including supermarkets and fast food restaurants have committed to green their outlets through the Green Mark Portfolio Programme since its launch last September. The programme seeks to encourage the adoption of energy efficient design, technologies, and good environmental management system among tenants. Source : Channel NewsAsia – 6 Jun 2014 Local developers looking abroad for more opportunities A growing number of local property developers are seeking opportunities abroad. Frasers Centrepoint is the latest to enter the fray after submitting a proposal for a takeover of Australian developer Australand. Industry experts said that is because local players have accumulated strong cash balances and are looking for opportunities abroad as cooling measures weigh on the local property scene. Frasers Centrepoint has submitted a conditional proposal, offering some S$3 billion to acquire Australand. The move appears in line with the group’s strategy to diversify across geographies and property segments. The acquisition would give Frasers Centrepoint control of Australand’s A$2.4 billion of commercial property and A$9.3 billion of developments in Australia. The proposed offer of A$4.48 per share is a premium of about 15 per cent over the volume weighted average price for the three months up to March 18. Yet, some analysts said there is significant potential to generate higher returns. Roger Tan, CEO of Voyage Research, said: “If you look at the assets of Australand, there are quite a few industrial and commercial assets on top of brand name. “If I am the buyer and I am paying this sort of premium, I must have some idea in terms of strategy to tear the assets apart and then list them as REITs and use brand names to build residential properties, or maybe sell some of the not-so-profitable parts to focus on certain industries that they may find value in.” Donald Han, managing director of Chesterton Singapore, said: “The yields which typically comes up from Australian commercial properties would be in excess of 7 per cent, which is already more than the yield accretive compared to the kind of returns we get in Singapore, which is just about 4 to 4.5 per cent.” The move is part of a broader industry trend of local developers venturing abroad. This week, local developer Hiap Hoe received regulatory approval to plan the development of a hotel in Melbourne. Earlier this year, Sim Lian acquired five shopping centres in eastern Australia for some S$152 million. Mr Han added: “A lot of big players in the market, strong balance sheets being created over the last two to three years as we saw values coming up and again the stifling environment — especially because of the measures, have forced a lot of developers to looking into new growth areas. “We’ll see more listed companies in particular going abroad to diversify income sources.” Ho Bee recently acquired prime office property in London, while CapitaLand has said it is focused on growing its core market in China, which accounts for almost half of its portfolio. Source : Channel NewsAsia – 5 Jun 2014 75 buildings gazetted for conservation under URA’s Master Plan 2014 Seventy-five buildings – including Alexandra Hospital, Queenstown Public Library and parts of Seletar airbase – were gazetted to be conserved as part of the Urban Redevelopment Authority Master Plan 2014 on Friday (June 6). All 75 buildings had been proposed for conservation under the Draft Master Plan 2013. The Master Plan, gazetted on Friday by Chief Planner Lim Eng Hwee, is the statutory land use plan that guides the physical development of the country in the medium-term. The full list of buildings to be conserved under Master Plan 2014 is as follows: Leong San See Temple, 371 Race Course Road Ban Siew San Temple, 2 Telok Blangah Drive Koon Seng Ting Temple, 4 Telok Blangah Drive Tang Gah Beo, 6 Bukit Purmei Kiew Lee Tong Temple, 5 Jalan Tambur Sian Keng Tong, 216 Changi Road Former Chee Kong Tong (Thekchen Choling) Entrance Gate, 2 Beatty Lane Sri Veeramakaliamman Temple, 141 Serangoon Road Sri Manmatha Karuneshvarar Temple, 226 Kallang Road Sri Vadapathira Kaliamman Temple, 555 Serangoon Road Sri Krishnan Temple, 152 Waterloo Street Angullia Mosque Gatehouse, 265 Serangoon Road Malabar Mosque, 471 Victoria Street Wak Tanjong Mosque, 25 Paya Lebar Road Former St Matthew’s Church & Kindergarten, 184 Neil Road Former Institute of Health (Bestway House), 226 Outram Road Alexandra Hospital, 378 Alexandra Road 394 Alexandra Road Queenstown Public Library, 53 Margaret Drive Former Commonwealth Avenue Wet Market, 38 Commonwealth Avenue Former Field Assistant’s House (Institute Of Policy Studies) & The Garage at Singapore Botanic Gardens 142 Moulmein Road (Department Of Clinical Epidemi ology – Tan Tock Seng Hospital), 144 Moulmein Road (Tuberculosis Control Unit) 5 blocks of Singapore Improvement Trust flats at Kampong Silat (18, 19, 22, 23 & 24 Silat Avenue) Robertson Quay Warehouses (17, 19 & 21 Jiak Kim Street; 19 & 20 Merbau Road; 41 & 42 Robertson Quay, 63 Caseen Street and 72-13 Mohamed Sultan Road) Former Royal Air Force Seletar (Blocks 179 & 450; 1, 2 & 226 Park Lane; 1 to 3 & 5 Hamilton Place; 3, 5A, 7, 9 to 13, 15 Hyde Park Gate; 1 to 16 The Oval) Source : Channel NewsAsia – 6 Jun 2014 HDB resale prices fall for 4th consecutive month Resale prices for Housing and Development Board (HDB) flats dipped for the fourth month running, a decline seen across all HDB property types, according to the Singapore Real Estate Exchange (SRX). HDB resale prices for May fell by 1.2 per cent over the previous month, marking a two-year low since April 2012. Prices for executive flats fell the most at 2.8 per cent, while 3- and 4-room flat prices dropped by 0.8 per cent, according to the SRX HDB Flash Report released on Thursday (June 5). Resale volume also dropped by 11.1 per cent month-on-month, with 1,320 HDB flats sold last month, from April’s 1,484 units, the SRX said. HDB units in Queenstown, Clementi and Jurong East, however, bucked the downward price pressure. These regions saw positive median Transaction Over X-Value (TOX) of S$6,500, S$1,000 and S$1,000, respectively, according to the report. The median TOX measures whether people are overpaying or underpaying the SRX estimated market value. Source : Channel NewsAsia – 5 Jun 2014 Real estate demand on the rise in China: CapitaLand CEO China’s urbanisation will continue to drive fundamental demand for homes and real estate. Speaking on Wednesday at the World Cities Summit China In-Focus Forum in Singapore, CapitaLand’s CEO Lim Ming Yan estimated that there is demand for 35 million homes, based on the expectation that over 100 million people will be moving to the Chinese cities over the next few years. Mr Lim said on average there is probably a need for five million homes a year over the next seven years, and there is still significant real demand for housing in major cities in China. CapitaLand, which established its presence in China since 1994, has built 50,000 homes there with another 65,000 homes in the pipeline. The Singapore-based developer also has a wide portfolio of properties on the Chinese mainland including shopping malls, commercial and mixed-used developments and serviced residences. During his presentation, Mr Lim also outlined some demographic changes in China, such as the rising middle class and changing consumer aspirations, as well as the ageing population. He noted that it is also “the end of cheap labour era” in China, and that some companies are shifting inland from coastal areas to keep costs down. Looking at these trends, Mr Lim said there is opportunity for integrated development projects. However, he warned that the local government funding model could impact overall development. Mr Lim said that the local government revenue is only enough to cover about 50 per cent of expenses, which means that the rest will have to be funded from other sources including land sales. “The tendency when this happens is that the local government will tend to want to supply more land, the tendency to overbuild and oversupply land… Sometimes there may be a tendency to sacrifice some long-term benefits for short-term results, that’s an issue we have to deal with,” Mr Lim added. However, Mr Lim said the central government is aware of this issue and he is confident that they will come up with solutions that will be good for the market, as well as China’s development and its people. Source : Channel NewsAsia – 4 Jun 2014 CapitaLand acquires stake needed to delist CapitaMalls Asia CapitaLand on Thursday (June 5) announced that it holds more than 90 per cent of the issued shares of CapitaMalls Asia (CMA) – crossing the threshold it needs to delist its shopping mall arm. CapitaLand said in a press release that it has submitted an application to the Singapore Exchange to delist CMA, and CMA shares will be suspended from trading after on June 9, the close of its offer to buy out minority owners, unless extended. As at 5pm on June 4, CapitaLand and its concert parties owned, controlled or have agreed to acquire an aggregate of 3,614,324,178 CMA shares – about 92.7 per cent of CMA’s issued share capital. The Singapore-listed developer had a 65.4 per cent stake when its offer was first announced in April. On May 16, it raised its offer to S$2.35 a share, up from the previous offer of S$2.22. Said Mr Lim Ming Yan, President and Group CEO of CapitaLand: “It is a key milestone for CapitaLand. With the delisting of CMA, the Group’s simplified structure and ‘One CapitaLand’ strategy will provide us with a strong platform to seize opportunities in integrated developments. We will be able to better leverage resources across the Group’s businesses to maximise overall project returns.” Shopping mall developer and operator CapitaMalls Asia has interests in more than 100 shopping malls across Singapore, China, Malaysia, Japan and India. Source : Channel NewsAsia – 5 Jun 2014 Frasers Centrepoint makes S$3b bid for Australian developer Property developer Frasers Centrepoint said on Wednesday (June 4) that it has submitted a A$2.6 billion (S$3.03 billion) takeover bid for Australia’s Australand Property Group. Frasers Centrepoint has proposed a cash offer of A$4.48 per share, topping a A$4.43 offer made by Australand stakeholder Stockland Corp, Australia’s second-largest property group. Australand’s board intends to recommend Frasers Centrepoint’s offer “in the absence of a superior proposal and subject to receipt of an independent expert opinion”, the Singapore-listed developer said in a statement. “The proposal will catapult Frasers Centrepoint to being one of Australia’s leading real estate companies with a portfolio of scale and quality. We already have an established platform and good brand recognition in Australia, but real estate is a business where scale and depth matters,” said Group CEO Lim Ee Seng. “This proposal will be the catalyst that will help Frasers Centrepoint to deepen our roots and accelerate our growth in a market that we believe will continue to offer long-term growth prospects.” Source : Channel NewsAsia – 4 Jun 2014 HDB unveils prototype of town planning tool Unveiled at the World Cities Summit on Wednesday (June 4) – the first prototype of a town planning tool which can simulate a built-up environment of a city, as well as analyse the impact of initiatives such as LED lighting and solar energy. Developed by the Housing and Development Board (HDB) together with French companies Electricite de France (EDF) and Veolia Environment Recherche et Innovation, the tool is able to simulate up to three times more parameters than existing simulation models. For instance, by keying in data on where residents live and work, the system can generate travelling patterns to help government agencies in planning the transportation network. Planners here cannot afford “needless experimentation with actual developments” as Singapore is a land-scarce island, HDB said. Instead, the tool will allow town planners to experiment with different scenarios and determine various outcomes in a risk-free laboratory environment. HDB, EDF and Veolia have been working on the tool since a memorandum of understanding was signed in 2012. The system is expected to be ready by the end of this year. Source : Channel NewsAsia – 4 Jun 2014 JTC signs MOU to help its industrial estates go green JTC Corporation is joining hands with the Sustainable Energy Association of Singapore (SEAS) to work on energy efficiency solutions for buildings in JTC’s business parks and industrial estates. The two partners signed a memorandum of understanding (MOU) on Tuesday (June 3). They plan to co-develop energy efficient solutions, such as harnessing solar energy, converting manufacturing waste to energy and improved lighting technologies. The MOU will also cover energy management and control systems to monitor energy for better use. For a start, these projects will involve the JTC Woodlands’ industrial estate. Potential projects include installation of solar PV panels and energy efficient lighting. Successful technologies could be implemented on a large scale throughout JTC estates, and this is expected to lead to potential cost savings for its tenants. Said the CEO of JTC Corporation, Mr Png Cheong Boon: “This partnership with SEAS will provide opportunities for Singapore companies, especially SMEs and startups, to demonstrate their innovations and establish track records, thereby giving them a leg up in the commercialisation of their new innovations in the global market.” Source : Channel NewsAsia – 3 Jun 2014 HDB, EMA explore home energy management scheme The Housing and Development Board (HDB) and Energy Market Authority (EMA) on Tuesday (June 3) inked a deal with Japanese technology company Panasonic to explore the feasibility of a smart home energy pilot. In a joint statement, HDB and EMA said a memorandum of understanding was signed with Panasonic on Tuesday during the World Cities Summit to conduct a year-long study to explore a suite of different energy choices and solutions for HDB households using Panasonic’s technology. The pilot study will look at the possibility of implementing time-of-use electricity rate packages and integrating features such as a home energy management system and energy aggregation models, according to the statement. For instance, a time-of-use rate package with lower charges during certain hours, can “incentivise residents to shift their electricity consumption to off-peak periods, and achieve savings in their electricity bills”. The home energy management system would provide energy usage data to residents, and this information could be delivered via a mobile application for real-time monitoring, they added. Findings from the study will allow the three parties to assess the feasibility of implementing the smart home energy pilot at the 38 HDB blocks in Yuhua estate, designated by HDB as the Greenprint neighbourhood in Jurong East. Greenprint is a comprehensive and integrated framework of goals and strategies to guide greener HDB town development and create sustainable homes, according to HDB’s website. On the same day, Mr Lee Yi Shyan, Senior Minister of State for Ministry of Trade and Industry and Ministry of National Development, highlighted Singapore’s efforts in capitalising on the opportunities on offer in the clean technologies sector. He was speaking at the UK-Singapore Green Growth and Business Forum. He noted that the country is already experimenting with green technologies in HDB estates such as Punggol Eco-town, where intelligent energy and water management solutions have been deployed to engage residents and reduce consumption. Residents are also encouraged to take up eco-friendly mobility options such as electric bicycles, he added. Ideas to retrofit mature estates to make them greener are also being explored, with solar panels and sensor-controlled LED lightings among some of the initiatives, Mr Lee said. Source : Channel NewsAsia – 3 Jun 2014 Tampines residents to get Town Hub Tampines residents will soon have their own Town Hub as construction for the integrated community lifestyle hub began on Sunday. The Tampines Town Hub is the first of its kind in Singapore, with sporting facilities, eating places, a library, recreational facilities and clinics located under one roof. There will also be information centres and offices such as the town council. The residents themselves had requested for those facilities and services. Minister for Education Heng Swee Keat, who is also MP for Tampines GRC, said: “For instance in Our Singapore Conversation, engaging Singaporeans from all walks of life to provide their input enables us to formulate better policies and to be able to respond and engage our fellow Singaporeans better. “And in the case of a local town development, it is even more important (to receive Singaporeans’ input) because the sense of ownership is very important. We want residents to feel that this hub has been built with our input, our ideas, our creativity.” Source : Channel NewsAsia – 1 June 2014 S-REITs gaining popularity among investors Singapore-listed Real Estate Investment Trusts (S-REITs) have gained popularity among investors this year. Their unit prices have risen by about eight per cent year-to-date, outperforming the benchmark STI. While market watchers are upbeat about the growth prospects for REITs, they say investors should focus on good asset quality. Suntec REIT is among the top performing REITs in Singapore this year, following completion of the first phase of renovations. As a group, all 26 REITs have averaged total returns, on a unit price and dividend basis, of 11.96 per cent so far in 2014. This is compared to last year when total returns fell by 3.75 per cent due to uncertainty over when the US Federal Reserve would end its monetary stimulus. With the Fed now not expected to move till next year, analysts say investors are being drawn to higher yields. Some S-REITs are also looking for acquisitions, thereby raising their appeal. “The average gearing across the REIT space is at 33.4 per cent. That’s still a pretty healthy level,” saod Eli Lee, investment analyst at OCBC Investment Research. “In addition, with an average distribution yield of 6.5 per cent, we are still looking at an abundant scope for acquisitions that will be accretive, both in Singapore and abroad as well. We’ve also seen management executing strongly in terms of asset enhancement initiatives and also on new developments.” According to a DBS report, S-REITs have maintained conservative balance sheets, and estimates gearing to increase to 34.3 per cent going two years forward. However, they also caution that investors should focus on asset quality in anticipation of rising interest rates. “On a consensus basis, this is expected in the middle of 2015. With this in mind, we’re fairly neutral on the outlook of the REITs sector,” said Mr Lee. “We advocate that investors take a bottom-up approach looking for specific names with strong fundamental outlooks, good track record from management, and attractive yields as well.” Going forward, analysts expect a large upcoming supply to weigh on rents for industrial space. “We don’t expect earnings to dip, mainly because they’re still renewing rents signed close to three years ago and that was near the bottom of the market,” said Derek Tan, analyst at DBS Group Equity Research. “So what it means for the industrial landlords is that their reversionary strength would start to moderate, so their earnings growth momentum will also start to moderate.” The retail segment on the other hand is expected to deliver robust growth supported by high occupancy rates, while the hospitality segment will see a rebound with higher corporate and visitor arrivals expected to exceed room supply. Source : Channel NewsAsia – 30 May 2014    



May 2014 More diverse tenants in CBD, say analysts The office leasing market in the central business district has seen a greater diversification in tenants over the past 12 months. Property consultants say that as financial institutions continue to rationalise their real estate costs, others such as dotcom companies are expanding in prime city locations to attract “Gen Y” talent. Unlike those in other cities, tech companies in Singapore are located in prime business locations, which analysts say is quite uniquely Singapore. “The growth is pretty aggressive,” said Marcus Loo, executive director of office services at Colliers International. “For example, Google have taken 200 odd thousand square feet in Asia Square and they are poised to take probably 20-30 per cent more space in the building. LinkedIn has just done a deal at MBFC (Marina Bay Financial Centre) of two floors, that’s about 45,000 square feet. Analysts say that other than dotcom companies, firms in the insurance sector are also leasing prime office space in the CBD. According to consultancy CBRE, office demand from the financial institutions has not been as strong. Last year, such demand accounted for under one-third of the leasing transactions over 30,000 square feet, compared to more than half in 2010. Colliers International estimates that financial institutions take up about 11 million square feet of office space islandwide, about 16 per cent of the total existing stock. “Based on CBRE estimates, we had close to 2.1 million square feet of take-up space last year and that’s very encouraging,” said Desmond Sim, head of research at CBRE. “We saw the tenant profile in Marina Bay and Raffles Place becoming more diversified. For example, we had Lego, the toy manufacturer, taking up close to 30,000 square feet in MBFC. We have Mead Johnson, the baby milk and nutritional pharmaceutical company, taking up space and more recently, we have bookings.com.” Analysts say the average monthly rental rate for Grade A office buildings in the CBD is around S$12.50 per square foot — about three times more than those in the suburban areas. However, tech firms are willing to pay more in order to attract talent. “CBD offers the company the opportunity to hire the best and brightest,” said Mr Loo. “We are talking about tech firms who need to hire staff that belong to Gen Y, and in the Gen Y profile, they would rather work in a convenient location for a good brand in a nice building versus going out to a suburban location.” Looking ahead, analysts say banks will continue to be a dominant occupier of office space in Singapore. But demand from the tech sector is expected to grow further as companies are drawn to the talent pool in the region. Source : Channel NewsAsia – 29 May 2014


One Raffles Place mall reopens after makeover One Raffles Place shopping mall, formerly known as OUB Centre, will reopen on Thursday (May 29) after a major refurbishment exercise, its developer said in a statement on Wednesday. Located above Raffles Place MRT station, the mall has a net lettable area of approximately 98,500 square feet spread over six levels, and a committed occupancy of more than 90 per cent. The mall’s tenants will progressively open for business, with Swedish clothing retailer H&M being the first to open from today. Other tenants include Uniqlo, Victoria’s Secret, Melissa and Paris Baguette, the statement said. “These brands, which are making their first foray in the area, bring a dose of Orchard Road into the heart of Raffles Place,” said Ms Letty Lee, Retail Services Director of CBRE Singapore, the project’s sole marketing agency. “These diverse offerings will cater to the different needs and preferences of the mall’s customers.” According to CBRE Singapore, the location has a catchment of 259,121 working professionals and PMEBs (professionals, managers, executives, businessmen). About 10,738 international tourists visited the area in 2014, due to an increase in office space and hotel developments in the vicinity. The number of residents in the area is projected to reach 11,603 this year, CBRE Singapore said. Source : Channel NewsAsia – 29 May 2014


Executive condominium site at Sembawang for sale An executive condominium site in Sembawang has been made available for sale under the Government Land Sales Programme, the Housing and Development Board (HDB) said Thursday (May 29). The 99-year leasehold site, located at Sembawang Avenue, will yield an estimated 620 residential units, HDB said. The tender for the site will close at 12pm on July 10. Source : Channel NewsAsia – 29 May 2014


Demand from first-time buyers down in BTO exercise For the first time since May last year, there were more than enough new units to go around for first-time buyers in the latest Build-to-Order (BTO) exercise. The drop in first-timer application rates from 1.4 in the previous exercise to 0.9 in the bidding that closed on Wednesday (May 28) suggested the backlog for BTO units among this group has been cleared, said analysts, who also noted that some of these buyers might have turned to units under the Sale of Balance Flats (SBF). The trend led one analyst to suggest that more flats could be allocated to second-timers and singles, although the bulk can be reserved for first-time buyers. The latest BTO exercise is the third since National Development Minister Khaw Boon Wan announced in December that the Government would slow down the supply of new public flats from this year as supply and demand for public housing return to equilibrium. Of the 3,071 BTO flats that went on sale in four projects in Bukit Batok and Woodlands for the latest exercise, demand for two- and three-room flats in Bukit Batok was lukewarm. In comparison, four- and five-room units in the same estate were more popular, seeing 1.1 and 1.9 applicants per unit respectively. Over in Woodlands, only four-room flats were vied for by more than one applicant. Demand for two-room flats from unmarried buyers remained strong, although the overall application rate fell from 19.4 to 14.9. Units in Woodlands proved more popular than those in Bukit Batok – application rates were 17.5 and 13 respectively. As for second-timers, demand eased to 1.7, from 3.3 in the previous exercise. Meanwhile, the 3,383 leftover units on offer in 11 non-mature and 13 mature estates attracted 14,153 applicants. In particular, one S2 Apartment at Pinnacle@Duxton was vied for by 223 house hunters. Five-room and executive flats in Tampines were also in hot demand, with 39 applications for each unit. Analysts TODAY spoke to attributed the fall in first-timer BTO application rates to strong demand in the concurrent SBF exercise, as well as the clearing of the BTO queue for first-time buyers due to the ramped-up supply. “Without the SBF exercise, we expect the application rates would revert to similar levels observed in the March 2014 BTO exercise,” said Mr Nicholas Mak, executive director of research and consultancy department at SLP International Property Consultants. Describing the application rate of singles as dauntingly high, Mr Mak suggested that the Government carve out more units for this group, as well as for second-timers. ERA key executive officer Eugene Lim also expects demand from singles to remain strong “for many more BTO exercises”. On SBF flats, buyers are spoilt for choice as the flats are in a variety of locations and also in mature estates, said Mr Lim. Mr Mak said the allocation ratio for SBF units – 95 per cent for first-timers – favours this group of buyers very generously and suggested that more can be made available to second-timers. The latest exercise brings the total number of flats launched by the Housing and Development Board in the first half of the year to 13,091. The next BTO launch will be held in July with 3,810 flats in Punggol, Sembawang, Toa Payoh, Woodlands and Yishun up for sale. Source : Channel NewsAsia – 29 May 2014


Indonesian buyers less keen on Singapore homes in Districts 9 to 11 Residential properties in prime Singapore districts have become less popular with Indonesians investors, who are now focusing on cheaper apartments in outlying areas, real estate consultancy DTZ said on Tuesday (May 27). DTZ said fewer than one in five of homes purchased by Indonesian investors during the fourth quarter of 2013 and the first quarter of 2014 were in districts 9, 10 and 11. This is down from an average of 32 per cent between the first quarter of 2011 and third quarter 2013. Indonesian buyers have historically accounted for a large portion of foreign demand for homes in districts 9, 10 and 11, which cover the upmarket areas around Orchard Road, Tanglin, Bukit Timah and Holland Road. Data from the first quarter of this year, however, showed greater Indonesian interest in outlying areas such as District 19 (Hougang and Sengkang) and District 28 (Seletar and Yio Chu Kang), DTZ said in a report. DTZ said Singapore property remains an attractive option for Indonesian buyers, especially in light of the upcoming presidential elections in Indonesia in July. They have, however, become increasingly price sensitive. “Indeed, the majority, or 35 per cent, of units bought by Indonesian buyers in the first quarter cost S$1 million or less,” DTZ said. Source : Channel NewsAsia – 27 May 2014


Underpass to link City Hall MRT and Capitol Singapore The Land Transport Authority (LTA) announced on Tuesday (May 27) that a new entrance will be built to connect City Hall MRT station to the redeveloped Capitol Singapore via an underpass. The entrance leads to the basement of the retail mall of the new Capitol, billed as Singapore’s first luxury integrated development. In addition to the mall, it will have a hotel, residences, and a theatre. The redeveloped Capitol Singapore is due to open at the end of this year. Construction work on the underground link and the new station entrance will start in the fourth quarter of this year, and will be completed in the first quarter of 2015. Source : Channel NewsAsia – 27 May 2014


Singapore remains attractive for firms The EDB said that despite a one-off “firm-specific factor” that led to what economists called a surprising decline in electronics manufacturing output, continued investment interest will support growth in the sector. EDB director of electronics Terence Gan said, in response to a TODAY query, that electronics firms had committed S$16 billion in fixed asset investments over the past three years, representing 38 per cent of EDB’s overall investment commitment. Most of these projects are in high-growth areas of the industry, and when implemented, will create 2,500 skilled jobs from this year to 2016 that will support the recovery in Singapore’s electronics manufacturing output. “Our efforts in attracting investments in high-growth areas will create higher-quality skilled jobs for Singaporeans. Researchers, scientists and engineers in Singapore have opportunities to design leading-edge products and manufacture them, playing a crucial role in shaping the global electronics landscape and in directly improving the lives of consumers,” said Mr Gan. Source : Today – 27 May 2014


68 Holdings’ offer for Hotel Properties rises to S$4.05 a share The group making a takeover bid for Hotel Properties Ltd (HPL) has raised its offer price again. 68 Holdings – led by Singapore tycoon Ong Beng Seng and Wheelock Properties – is now offering S$4.05 for each HPL share, up from the previous S$4.00 a share. 68 Holdings had originally offered S$3.50 per share. This follows an agreement by 68 Holdings to buy 6.69 million HPL shares, representing 1.29 percent of the firm, at $4.05 apiece. The closing date of the offer will be extended to June 12 from June 2. HPL has a portfolio of 28 luxury hotels around the world, including the Four Seasons, Hilton and Concorde hotels in Singapore. The firm also operates 10 Hard Rock Café outlets in the cities of Singapore, Kuala Lumpur, Penang, Bangkok, Pattaya, Bali, Jakarta and Makati, as well as the Haagen-Dazs ice cream franchises in Singapore and Malaysia. Source : Channel NewsAsia – 27 May 2014


CapitaLand’s stake in CapitaMalls Asia crosses 85% CapitaLand has raised its stake in CapitaMalls Asia (CMA) to 85.2 per cent, bringing it closer to crossing the 90 per cent level that would enable it to delist its shopping mall arm. CMA is one of Asia’s largest shopping mall developers and operators, with interests in more than 100 shopping malls across Singapore, China, Malaysia, Japan and India. “We are pleased with the positive response towards our final offer price of S$2.35 per share for CMA shares,” Capitaland, Southeast Asia’s biggest developer, said in a statement on Tuesday (May 27). “We are optimistic that we will achieve the objective to delist CMA. With the proposed delisting and full integration of CMA, CapitaLand will be able to further harness the key strengths of our businesses in residential, shopping malls, offices, serviced residences and integrated developments to better position us for the future,” it added. CapitaLand’s offer for CMA will close on June 9. Source : Channel NewsAsia – 27 May 2014


ONE°15 makes first overseas foray Singapore-based marina club and property developer, ONE°15 is making its first overseas foray. It signed a memorandum of understanding on Monday with Vietnamese company Vung Ro Petroleum to develop an integrated marina resort in Vung Ro Bay, Vietnam. They aim to develop ONE°15 Vung Ro Bay Marina Resort into an international nautical hub. It will comprise a private members’ club, marina berths, hotel, dining and retail outlets, as well as exclusive boutique villas. The gross commercial area will total approximately 200,000 square metres. This is ONE°15′s first overseas investment outside of Singapore. ONE°15 said it is keen to help build the marina property business in the region, and is actively pursuing marina projects in Vietnam, Korea, Malaysia, Thailand, Sri Lanka and China. As of March 2014, Singapore is the third largest foreign investor in Vietnam, with about S$38 billion in registered cumulative investments in more than 1,000 projects. Source : Channel NewsAsia – 26 May 2014


‘Strong support’ for Bidadari, Tampines North, Punggol Matilda developments: HDB Plans for the upcoming Bidadari, Tampines North and Punggol Matilda housing areas have received “strong support” from the public, according to a survey conducted by the Housing and Development Board (HDB). In a statement on Monday (May 26), the HDB said close to 4,000 visitors participated in a survey conducted last August during the launch of the three housing areas. Of these, more than 9 in 10 indicated that “they were excited about the plans and looked forward to them”, it stated. HDB said two housing projects in Punggol Matilda were launched during last September’s Build-To-Order (BTO) exercise, and it will launch more projects in Tampines North and Punggol Matilda in the second half of this year. Bidadari projects will be introduced next year. Commenting on the survey results, real estate firm ERA said Bidadari stands out due to its “excellent” location. There are two MRT stations there and nearby amenities include NEX mall in Serangoon and the upcoming commercial centre in Potong Pasir, it stated in a statement issued on Monday. “The new proposals will exploit its greenery, rich heritage and convenient transport connections to provide a high quality environment,” ERA said. When fully developed, these three housing areas are expected to provide some 40,000 new homes for Singaporeans, HDB said. Source : Channel NewsAsia – 26 May 2014


Singapore leaps to third place in latest PwC study on global cities Singapore retains its lead in the transportation and infrastructure indicator in the latest PricewaterhouseCoopers (PwC) study on global cities, which helped it edge into third position overall behind London and New York. “The city-state climbs four spots to third place and also finishes first in the two areas it is well-known for – transportation and infrastructure and ease of doing business,” Bob Moritz, US chairman and senior Partner at PwC, said in the Cities of Opportunity report that was released this week. The study was initiated in 2007 to help the world’s great cities understand what policies and approaches work best for people and economies in a rapidly urbanising world. Singapore ranked seventh in the previous edition of the report released in 2012. Transportation and infrastructure, in particular, was highlighted in the report. PwC found strong performances in the housing and public transport systems variables helped the city-state widen its lead on second-placed Toronto. “Singapore clearly understands the fundamental role of infrastructure in a city’s development and in its contribution to the well-being of its citizens,” the report stated. The latest edition of the report has expanded from 27 cities to 30, and based its findings on data collection with real-life responses to a series of questions relating to urban life. It also included publicly available information from institutions such as the World Bank and the International Monetary Fund, and commercial data providers, which was mostly culled from data collected during the latter half of 2013. Source : Channel NewsAsia – 23 May 2014


Accor buys 97 hotels in Europe for 900m euros Hotel group Accor on Tuesday announced the purchase of 97 hotels in Europe through its HotelInvest business for a total of 900 million euros ($1 billion). The group is buying a first portfolio of 86 hotels, representing 11,286 rooms across Germany and the Netherlands, which have been operated by Accor since 2007 under the Ibis, Ibis budget, Mercure and Novotel brands. These hotels, worth 722 million euros, are being sold by Moor Park Fund I and II. A second portfolio of 11 hotels in Switzerland, operated by Accor since 2008, includes Ibis, Ibis budget, Novotel and MGallery hotels, the operator said in a statement. They are being sold by Axa Real Estate. “These transactions send a strong signal of our capability to rapidly implement the strategy of restructuring the HotelInvest portfolio,” said Sebastien Bazin, Accor’s chief executive. “They are fully aligned with our selective asset acquisition criteria: hotels located in key European cities and delivering excellent operating performance in our most profitable market segment.” HotelInvest wants to raise the proportion that hotels contribute to its net operating income from 68 per cent to over 75 per cent in the medium term. The hotel operator runs 3,600 hotels, a total of 460,000 rooms in 92 countries. Source : Channel NewsAsia – 27 May 2014


CapitaLand’s stake in CapitaMalls crosses 80 per cent CapitaLand’s stake in CapitaMalls Asia (CMA) has crossed the 80 per cent mark, bringing it closer to attaining full control of its shopping mall arm. Southeast Asia’s largest developer CapitaLand now controls approximately 81.3 per cent of CMA, after taking into account open market purchases and acceptances of the offer as at 5 pm on Tuesday (May 20), it said in a statement on Wednesday. On 16 May, CapitaLand increased its offer for CMA to S$2.35 per share and said the offer was unconditional. CMA shareholders who had accepted the offer prior to 16 May 2014 will get the higher offer price. CapitaLand had previous offered S$2.22 per share – subsequently adjusted downwards to S$2.2025 to take into account a dividend payment. “CapitaLand is committed to delisting CMA and we are confident that we will achieve this objective. The proposed delisting and full integration of CMA is in line with our ‘One CapitaLand’ strategy to enhance our long term competitiveness,” Group CEO Lim Ming Yan said in a statement. “The group will be well-positioned to deepen and strengthen our ability to undertake and optimise integrated developments with the simplified structure,” he added. CMA is one of Asia’s largest shopping mall developer and operator, with interests in over 100 shopping malls across Singapore, China, Malaysia, Japan and India. Source : Channel NewsAsia – 21 May 2014


Property assets make up 80% of Singaporeans’ wealth Property assets make up 80 per cent of the total wealth of an average Singaporean, according to financial advisory firm Financial Alliance. And with Central Provident Fund (CPF) money being used for property purchases, savings meant for retirement are being locked up in real estate. Amid this backdrop, the Ministry of Manpower has said it will “review and make improvements” to the CPF system. This follows President Tony Tan Keng Yam’s address in Parliament last Friday. The CPF Minimum Sum is the amount of money that one needs to set aside in the CPF account on reaching the age of 55. And if there are insufficient funds, individuals will not be able to withdraw any cash at all although they will receive monthly payouts. Financial advisors say less than half of Singapore’s working population have enough to meet the minimum sum, which is currently S$155,000. Tan Siak Lim, financial advisory director at Financial Alliance, said: “So today, I think that’s the challenge. And I guess the reason why we are in the current situation is because of appreciating assets in the property (market).” With property prices rising steadily over the past decade, more CPF money meant for retirement has been committed to mortgages. For a middle income earner in his forties with multiple dependants, in order to retire comfortably Financial Alliance says he will need to save about a third of his monthly salary. Mr Tan said: “There’re already plenty of private sector investment products, retirement products for the consumer to choose (from). So that is not the problem. “The problem is — ‘where is the money to invest in these products?’” He said for an average, middle to low-income earner, there is not a lot of surplus cash beyond just meeting one’s monthly living expenses. To ensure retirement adequacy, the government is looking at options such as reverse mortgage schemes to help retiring or retired Singaporeans unlock the value of their homes. Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral. The owner then repays the loan with accumulated interest upon termination, or death, usually with the sales proceeds from the flat. Source : Channel NewsAsia – 20 May 2014


HDB to receive 37 BCA awards The Housing and Development Board (HDB) will receive a total of 37 awards at the Building and Construction Authority (BCA) Awards ceremony at Resorts World Sentosa on Thursday (May 22). The awards ceremony recognizes developers and builders for contributions in shaping a safe, sustainable and high-quality built environment in Singapore. 23 of those awards will be Green Mark Awards, the highest number ever garnered by a single agency. Winners for that category include the HDB Hub, Connection One and the HDB Centre of Building and Research. Four housing projects will bag the Universal Design Mark Award. Among them is the landmark integrated project, Kampung Admiralty unveiled last month. It will be awarded the Universal Design Mark GoldPlus Award. Punggol Breeze and Casa Clementi will clinch double honours with the Platinum Award for Construction Productivity and the Construction Excellence Award. HDB’s Director for Environmental Sustainability Research Alan Tan Hock Seng will be named the Green Architect of the Year for his consistent contribution and achievements in sustainability efforts in projects such as the Treelodge @ Punggol. “The awards that we have garnered are a testament of HDB’s good work, especially in the area of creating a sustainable built environment,” said HDB’s Chief Executive Officer Dr Cheong Koon Hean. Source : Channel NewsAsia – 21 May 2014


More open spaces and new amenities slated for East Coast Park East Coast Park visitors can look forward to more open spaces, new family-friendly amenities, and a range of recreational options when work at Parkland Green and Marine Cove are completed. The enhancements by National Parks Board (NParks) include a reduction in infrastructure footprint so as to allow for more open green spaces. Parkland Green will open in September, while improvements at Marina Cove are slated to be completed in mid-2016. Once open, Parkland Green will feature a 1-hectare open lawn, as well as eight dining establishments. There will also be a laser tag arena and two sports and retail outlets. When Marina Cove is completed in mid-2016, its open park space and mix of dining and recreational facilities will complement those at Parkland Green. The enhancements are part of NParks’ efforts to make Singapore a City in a Garden. While improvements are going on, park users can still use the dining and other recreational activities in the area. Source : Channel NewsAsia – 21 May 2014


REITs have no impact on retail rents: MTI Real Estate Investment Trusts (REITs) have no impact on retail rents, which are being driven up by the malls’ location and enhancements instead of their ownership. This is according to a study conducted by the Ministry of Trade and Industry (MTI), following a growing perception that rental prices at retail malls acquired by REITs are rising at a faster rate. After removing factors such as location and asset enhancement initiatives at malls, “we find that the rents in REIT-owned malls are not statistically different from rents in single-owner malls”, the report said. “Furthermore, among the malls that are acquired by REITs, we find no evidence to indicate that the rents in these malls increased as a result of the acquisition,” it added. The study, covering rental data from 35 REIT-owned malls and 76 single-owner malls between 2000 and 2013, followed inquiries over the impact of REITs during the Budget debate in March, when Workers’ Party’s Non-constituency MP Mr Yee Jenn Jong said that REITs are dominating the retail malls and are in a position to steeply raise rental prices. “Nonetheless, (rental increase) appears to be largely driven by the better physical characteristics of the REIT-owned malls… like asset enhancements and distance to the nearest MRT station,” the MTI report said. It added that further analysis will be conducted on whether acquisition by REITs has improved the performance of retailers to justify higher rental prices. Source : Channel NewsAsia – 20 May 2014


Cooling property market could affect China’s growth China’s property sector showed further signs of cooling for the month of April — average prices of new homes in 70 major cities rose 6.7 per cent on-year, down from 7.7 per cent a month earlier. Some economists said that the real estate downturn could be the main drag on China’s growth this year. After years of red-hot growth, China’s property market is cooling down but the slowdown is spilling over to other sectors — steel and cement production is down nearly nine per cent while land sales fell 20 per cent, cutting into government revenue. Oliver Barron, head of research at North Square Blue Oak’s Beijing office, said: “The key issue is that there’s too much supply and demand is constrained. Reducing purchasing restrictions and reducing barriers to entry will hopefully get some demand in. “What happens if they reduce the purchase restrictions and people don’t start buying — then you’re stuck with oversupply and no way to stimulate the market. Similarly, if they start buying, developers start building in these same places, you do risk building bubbles and making the bubble worse.” The stockpile of new unsold homes in 35 Chinese cities has risen to its highest level in five years. Developers have resorted to slashing prices to reduce inventory in a bid to turnover capital as banks tighten loans on the property sector. Johnny Sze, managing director at Hanyu Properties, said: “Tight credit affects not just the individuals. We’re seeing many developers lose funding under this situation, including Guangzhou’s Guangyao Properties which is going bankrupt, and there’s another in Hunan which is asking for government bailout. “We’ve seen it spread from third-tier cities to second-tier ones. Will it hit first-tier cities or even see credit problems for bigger developers? If so, could it expose the financial problems in the property sector which has always been regarded as unbreakable?” Problems that could potentially unravel China’s banking system, estimated to hold US$2.5 trillion of mortgages and loans to developers, on top of US$1 trillion of shadow bank credit. Some analysts also said that there are other factors which could act as buffers to prevent a hard landing for China’s property sector — like high down-payment ratio for mortgages and rising land prices in first-tier cities. In the meantime however, the sector will see some painful correction — an inevitable result of years of red-hot growth and easy credit. Source : Channel NewsAsia – 19 May 2014


Mapletree plans expansion into Europe and US Singapore property group Mapletree Investments is looking to expand into the United States and Europe amid a less certain outlook for its core Asian markets in the near future. “Over the last 12 months, we were concerned about the volatility that could arise across markets in Asia once the start of the QE tapering was made known,” Group Chief Executive Officer Hiew Yoon Khong said in a statement announcing the firm’s results for the financial year ended March. “While our concerns have been allayed so far and the outlook for Asian markets remains stable, it is not expected to be robust,” he said. QE refers to quantitative easing policies adopted by the US Federal Reserve and other Western central banks in the wake of the global financial crisis, which had resulted in near-zero interest rates and a rush of funds to Asia and other emerging markets. The flow of funds has since reversed as the Fed has begun winding down its bond purchases to inject money into the financial system. Mapletree, a unit of Singapore investor Temasek Holdings, and California-based Oakwood Worldwide last month announced a multi-billion-dollar agreement to acquire and develop serviced apartments around the world. Under the deal, Mapletree will purchase a 49 per cent stake in Oakwood’s serviced apartment business in Asia for an undisclosed amount. The two companies also agreed to acquire and develop some US$4 billion (S$5 billion) worth of corporate and serviced apartment assets within Asia, Europe and North America. Mapletree owns or manages S$24.6 billion worth of properties across Asia, including VivoCity in Singapore and logistics centres and industrial properties held under various real estate investment trusts. For the financial year ended March, Mapletree achieved a net profit of S$859.4 million which was a drop of 7.8 percent from the previous year. The decline in profit was due to a drop in gains arising from the sale of properties. Looking ahead, Mr Hiew said Mapletree’s strategy within Asia is to selectively focus on specific asset classes and micro-markets where it saw opportunities to invest in and acquire good quality, high returns assets. He cited China, which was seeing rising demand for modern logistics properties. “We will also begin expanding beyond Asia into regions such as Europe and the US, and into new real estate sectors, to further diversify earnings,” he added. Source : Channel NewsAsia – 16 May 2014


District 9 frozen due to cooling measures To see how impactful the government’s cooling measures have been, look no further than District 9. Data from the Singapore Real Estate Exchange (SRX) for last month showed that the median Transactions-Over-X Value (TOX) for District 9, which consists of Orchard, Cairnhill and River Valley, was negative S$130,000. Each month, SRX algorithms compare the actual transacted value for each unit in a district with its X-Value. The X-Value is a computer-generated estimate of the market value for a home, and the difference between the median transacted price and the district’s X-Value is the TOX. In District 9, more than half of the buyers paid below market value. In fact, 50 per cent paid at least S$130,000 below market value. In contrast, the TOX in District 10, which covers Bukit Timah, Holland Road and Tanglin, was positive S$37,500 last month. This means more than half of the buyers paid above market value, with 50 per cent paying S$37,500 or more. The TOX tells us that the sentiment in District 9 is very bearish, while that in District 10 is bullish. Why is there such a huge disparity between the two high-end neighbours? The data suggests that District 10 is where Singaporeans buy homes to live in, whereas District 9 is where buyers — both local and foreigners — purchase homes for investment. The cooling measures primarily target investors — both local and foreigners. The hefty additional buyer’s stamp duty (ABSD) applies to most foreigners, while the Total Debt Servicing Ratio (TDSR) limits Singaporeans’ ability to stretch their borrowings to purchase homes purely for investment. Therefore, the cooling measures should significantly dampen sentiment in districts where investment activity outweighs purchasing homes to dwell in. The tale of the two affluent districts bears this point out. Back in the first quarter of 2005, at the start of the private home market’s huge growth spurt, District 10 was the luxury heavyweight. It was about 13 per cent more expensive, on a median resale per-square-foot basis, than District 9. In addition, District 10 registered 18 per cent more transactions. During the huge run-up in prices after the global financial crisis in 2009, District 9 overtook District 10. Today, even with the cooling measures, it is 12.4 per cent more expensive than District 10. Before the SRX Price Index made the turn during the first quarter of last year from positive to negative, District 9 was 16.6 per cent more expensive. From the first quarter of last year to the first quarter of this year, a period that saw the ABSD regime made more severe as well as the introduction of the TDSR, median resale prices in District 10 have appreciated 0.4 per cent, while those in District 9 have seen a depreciation of 3.2 per cent. Meanwhile, District 10 posted nearly double the number of transactions during this period. What this data suggests, at least in Districts 9 and 10, is that the cooling measures have been effective at cutting the investment market off at the knees, while allowing the owner-occupiers’ market to continue to grow, albeit at a slower pace. At the risk of mixing my metaphors, the cooling measures have frozen the hot money. By Sam Baker – co-founder of SRX, an information consortium formed by leading real estate agencies in Singapore to share proprietary sales and rental data and facilitate property transactions. For more details on the trends and figures discussed in this article, visit the research page of www.srx.com.sg. Source : Today – 16 May 2014


New private home sales rebound in April New private home sales picked up last month, recovering from the doldrums they sank into in March after developers shaved prices, and analysts said the market will become more active with several attractive launches expected in the coming weeks. Last month, 745 private homes were sold, 55 per cent more than the 480 units offloaded in March, data released by the Urban Redevelopment Authority (URA) yesterday showed. The increase in sales was achieved despite developers launching fewer units last month, with 586 private homes being offered for the first time, 23 per cent lower than the 724 units in the previous month. Compared with the same month a year ago, launches and sales fell 50 and 46 per cent from 1,162 and 1,384 units respectively. Analysts said that while the cautious mood among buyers persisted following repeated rounds of property market cooling measures, sweeteners and price cuts offered by developers have been successful in attracting some of them back to the market. Ms Christine Li, head of research and consultancy at property agency OrangeTee, said: “April seems to fare quite well for both the new launches and relaunches. One reason is that developers have priced these projects more realistically, both in terms of the total quantum and the per-square-foot (psf) price, to counter the cumulative effect of cooling measures and loan curbs, drawing buyers back to the show flats.” The 99-year leasehold Lakeville, the latest offering in Jurong Lake District, was the best-selling development last month, with buyers snapping up 210 of the 230 homes launched at a median price of S$1,318 psf. The only other new launch during the month, The Sorrento, a freehold project in West Coast Road, also did well with 125 of 131 homes sold at a median of S$1,414 psf. The two projects helped to prop up sales in the Outside Central Region, or suburbs, by 63 per cent to 487 homes, the URA data showed. Sales volume in the Rest of Central Region rose 87 per cent to 237 units, largely due to the relaunch of Sky Habitat in Bishan at lower prices. CapitaLand, the developer of Sky Habitat, sold 130 units last month at a median of S$1,377 psf — significantly lower than the S$1,583 psf when the project was first launched two years ago, noted Mr Nicholas Mak, executive director of research and consultancy at SLP International. This brings the total number of homes sold in the development to 312. “Sales for Sky Habitat have been tepid after April 2012, with the monthly sales volume never exceeding 10 units. The project’s sales even tanked in February and March this year with no sales recorded. The developer’s strategy to reduce prices has obviously succeeded in drawing back buyers’ attention. The Sky Habitat story is a clear example that it is now a buyer’s market,” he said. Meanwhile, sales in the Core Central Region, or city centre, fell 61 per cent to 21 units last month. Analysts said the monthly sales volume could trend upwards if developers continue to price their units competitively. “With reduced demand in the market and buyers looking out for bargains, pricing is crucial in moving sales. Currently, the sweet spot seems to be a 10 to 15 per cent price adjustment below previous levels in order to attract buyers,” said JLL’s national director of research and consultancy Ong Teck Hui. With developers ramping up launches this month before the seasonal slowdown in June, Ms Li said this month’s volume could breach 1,000 units. New projects due to hit the market this month include Commonwealth Towers, Coco Palms, Waterfront@Faber and Kallang Riverside. Source : Today – 16 May 2014


CapitaLand increases CapitaMalls offer to minority shareholders CapitaLand has sweetened its offer to buy out minority shareholders of shopping mall arm CapitaMalls Asia. CapitaLand, Southeast Asia’s largest developer, said it will now pay S$2.35 per share, up from the previous offer of S$2.22 per share. The previous offer price was subsequently adjusted downwards to S$2.2025 per share to take into account a dividend payment. CapitaMalls shareholders who earlier accepted CapitaLand’s offer will receive the higher offer price. CapitaLand and its partners now hold approximately 70.4 per cent of CapitaMall shares, excluding shares that had been tendered in acceptance of the offer. With the increase in CapitaLand’s offer price, the offer for CapitaMalls will now close on June 9. CapitaMalls is one of Asia’s largest shopping mall developer and operator, with interests in 104 shopping malls across Singapore, China, Malaysia, Japan and India. Source : Channel NewsAsia – 1 May 2014


Keppel REIT divests Prudential Tower stake Prudential Tower will soon have new owners. Keppel REIT said on Thursday it has entered into agreements to sell its 92.8 per cent stake in the 30-storey office building near Raffles Place MRT station for S$512 million — which is 4.5 per cent above valuation. The buyers of Prudential Tower are companies held by KOP Ltd, Lian Beng Group, KSH Holdings and Centurion Global. Keppel REIT said in a statement the divestment of Prudential Tower is in line with efforts to proactively review and evaluate assets to optimise the portfolio. A substantial amount of the sale proceeds will be used to repay existing debt to provide Keppel REIT with greater financial flexibility, it added. The sale of Prudential Tower is expected to be completed on September 26. Source : Channel NewsAsia – 15 May 2014


City Developments expects ‘cautious’ property market to continue Property developer City Developments expects the Singapore residential market to be cautious with moderated volumes and a lower rate of sales compared with the peak of the property cycle. However, it believes that well-located projects, especially those near to MRT stations which are competitively priced, should continue to attract reasonable buying interests. The company made these comments today (May 14) as it announced a 13 per cent decline in first quarter net profit to S$119.7 million on lower divestment gains from property holdings. Revenue declined 5.4 per cent to S$734.2 million. Its optimism about demand for well-located developments prompted it to launch Commonwealth Towers on May 1, which is located next to Queenstown MRT station. The company said that response has been ‘good’ with over 66 per cent of the 400 units released sold to date. City Developments is also going ahead with the launch of Coco Palms, which is close to Pasir Ris MRT station, the Bus Interchange and White Sands Shopping Centre. Source : Today – 14 May 2014


DHL to build new warehouse facility in Singapore Global logistics firm, DHL Supply Chain, has unveiled plans to build its Advanced Regional Centre at Singapore’s Tampines LogisPark. The facility is a joint investment worth S$160 million between DHL and Cache Logistics Trust, a Real Estate Investment Trust (REIT). It is expected to increase the company’s warehouse capacity in Singapore by 40 per cent, create another 500 jobs, and further strengthen transport capabilities, IT and people. Construction is expected to be completed by the second half of 2015. The investment is part of the firm’s growth strategy for Southeast Asia for 2013 to 2015 — which is to grow its transportation fleet by over 85 per cent to 2,300 vehicles, staff strength by 65 per cent to some 25,000 people, and add over 50 per cent more warehouse space, particularly amid regional growth prospects in key industries such as aerospace, healthcare and technology. Speaking at the groundbreaking ceremony on Wednesday, Minister of State for Trade and Industry Teo Ser Luck said that Singapore is well positioned to leverage opportunities in the logistics industry across the region. He added: “With the continued rapid growth of Asian economies and the rise of the middle class in Asia, we can expect that demand for logistics services will grow in tandem with the increased supply and demand of goods in the region. “Beyond supporting industry transformation, the Singapore government is investing in improving our infrastructure so as to build on and strengthen our position as a leading logistics hub.” Kallang Wave mall to open next month The Singapore Sports Hub’s retail mall has been named the Kallang Wave. According to its mall manager SMRT Alpha at a media preview on Wednesday, the mall will open from June. Spread over 41,000 square metres, Kallang Wave will boast the tallest indoor climbing wall in Singapore and the first sports-themed hypermarket. The mall is part of the S$1.33-billion Singapore Sports Hub, and SMRT Alpha said it already has an occupancy rate of over 80 per cent. SMRT Alpha is a joint venture between subsidiaries of SMRT and NTUC Fairprice Co-operative. Dawn Low, board of director at SMRT Alpha, said: “Because of its unique location, which is well served by Circle Line Stadium (station), as well as the East West Line (Kallang) which is accessible using a pedestrian overhead bridge, we are quite confident that we will have good visitorship to the mall and also the facilities around. “With our wave of partners that have come on board in support of the mall, and also in support of the facilities around — such as our bank partners, our community partners — we’re very confident that Singaporeans will be able to come here to shop, dine, and play, and truly spend an integrated experience throughout the day with their young and their old.” But analysts said until the Sports Hub is fully operational, and unless there is a strong pipeline of events, it may be hard for Kallang Wave’s retailers to attract visitors. Ku Swee Yong, Century 21 Singapore’s chief executive officer, said: “In comparison with the current retail shops at Leisure Park Kallang as well as the Singapore Indoor Stadium, we definitely can observe… many quiet periods in between concerts, in between sporting events… We cannot see that current catchment being able to sustain the current retailers.” But SportsHub, the consortium behind the entire project, is optimistic. Oon Jin Teik, SportsHub’s chief operating officer, said: “The mall is going to open in tandem with all the events. So we have the rugby, the swimming events, (and) the community events — all coming along at the same time. “As the mall opens, each tenant has got its own plans as well, so again you see a staggered and phased approach here. We are not so concerned about it… as (it is in) the early phase, and it is a complex project, you will see all these multiple parties having to come together. Each will look a bit faster or slower, but it’s not a concern.” The mall at the Singapore Sports Hub is touted as one that caters to a wide spectrum of users as it comprises a supermarket, fashion retail, and even food stores. When asked about the retail mix, Mr Oon said he is not worried that the retail offerings at the mall will crowd out genuine sports users who come to this area. Mr Oon added that besides sports, it is important to have other offerings, such as dining options. SMRT Alpha also added that there are over 3,000 parking lots in the facility, of which 500 are directly under the mall. Source : Channel NewsAsia – 14 May 2014


Resale prices of non-landed private homes hit 16-month low Resale prices of non-landed private homes hit a 16-month low in April, while the resale volume last month reached its highest since October last year, according to the latest flash estimates from the Singapore Real Estate Exchange (SRX). Advance data from SRX showed that overall resale prices of non-landed private residential properties slipped by 1.7 per cent in April from the previous month — the lowest since December 2012. The city fringe area led the fall with prices dropping 3.6 per cent. This is followed by a 2.3 per cent drop in the city area, while prices in the suburbs rebounded by 0.4 per cent. According to SRX, more than half of the non-landed private property buyers paid below recent transaction prices for their units last month. Property watchers said the downward trend in prices is likely to continue in the short to medium term, largely due to loan rules, but the movement of resale prices may also mirror that of new private homes. Alan Cheong, senior director of research and consultancy at Savills Singapore, said: “If there are ample numbers of so-called new launches, I think the resale market will also be correspondingly quite active and price wise, it also gives — if the developers for the new launches maintain the prices — it also gives confidence in the resale market not to give in too much to the buyers.” SRX estimated that 476 resale transactions were registered in April — an increase of 24.6 per cent from the previous month. It is also the highest resale volume since October last year. But the figure is still 26.7 per cent lower compared to the 649 units resold in April last year. Property analysts said the transaction volume for private resale homes may be affected by the primary market, with some 13,000 units expected to be completed for the rest of the year. The private resale market is also likely to face competition from another group of developments — the executive condominiums (ECs). Donald Han, Chesterton Singapore’s managing director, said: “It (the EC scheme) is still being supported by the government, by virtue of the grants that help to reduce the entry levels. Plus the fact the (EC) market is targeted at the actual owner-occupier market which is least affected by the tightening of loans — the TDSR (Total Debt Servicing Ratio).” Government grants to purchase an EC can go up to S$30,000. Over 11,000 Singaporean families bought ECs from the last quarter of 2010 to the same period in 2013, National Development Minister Khaw Boon Wan said in a blog post on April 24. Mr Khaw added that the income ceiling adjustments in 2011 saw shifts in the profile of EC buyers over a one-year period. This includes seeing the proportion of second-time homebuyers rise from 43 to 57 per cent. As many as five new EC projects may be launched later this year. These sites are located at Woodlands Avenue 5, Anchorvale Crescent, Punggol Central, Punggol Drive and Yuan Ching Road. Over at the rental market, an estimated 3,202 units were rented last month, almost flat from March’s 3,206 rental transactions. But on a year-on-year basis, rental volume improved by 9.8 per cent from the 2,917 rental contracts signed in April 2013. Flash data from SRX also showed that rents edged up 0.2 per cent after reaching a 27-month low in March. The uptick in rental prices was mainly driven by those in the city fringe which saw a 0.5 per cent increase. However, rental prices in the city and suburbs continued to soften by 0.6 per cent and 0.2 per cent respectively. Source : Channel NewsAsia – 12 May 2014


Malls at Somerset unite to boost shopper traffic Three malls along Orchard Road – Singapore’s premier shopping belt – are planning to work together to drive greater synergy between their tenant mix. New kid on the block orchardgateway, along with 313@somerset and Orchard Central, have formed a steering committee to look at ways to boost shopper traffic – a first among competing malls in Singapore, said analysts. orchardgateway straddles both sides of Orchard Road. Its main wing, which accounts for 90 percent of the mall’s tenants, is already open. The mall has achieved nearly full occupancy, with stores opening in phases over the next few months. orchardgateway has a total net lettable area of some 167,000 square feet. It is part of a mixed development comprising a 500-room hotel and six-storey office space. With the opening of orchardgateway and orchardgateway@emerald at the end of the year, the Somerset shopping precinct — including 313@somerset, Orchard Central and orchardgateway — will be the most inter-connected section along Orchard Road. Shoppers can access malls on either side, using the 53-metre glass overhead bridge, a first on Orchard Road, as well as the underpass. The three malls will be connected on basement 2, and levels 1 and 4, while orchardgateway and Orchard Central are also linked on levels 2 and 3. orchardgateway said there are about 10 connection points between the three malls. This inter-connectivity prompted the malls to work together. Jane Lee, senior executive, advertising and promotions, at orchardgateway, said: “We will have more synergy in terms of the planning of our events and promotions to drive more traffic to this part of Orchard Road. “It is quite competitive for the market, so it makes more sense to have the three malls to work together.” Ms Lee said some joint events could include fashion shows which can be staged at Discovery Walk, an F&B and fashion strip that cuts across all three malls. Sulian Claire, senior director of retail and lifestyle at Savills, said: “There’s always a conscious effort to create a different shopping experience and not to duplicate what 313 and Orchard Central are already providing. “For example, you have a food court at 313, you have fast food in the other malls — the percentage of F&B versus the other mix at orchardgateway is actually lower than the other two malls.” Savills, orchardgateway’s marketing agent, said the greater connectivity could potentially boost shopper traffic in the area by 30 percent. Such collaborations are likely to benefit both landlords and consumers. Desmond Sim, research head at CBRE, said: “It is beneficial for the malls, so they do not eat into each other’s demand pie, don’t cannibalise each other’s business. “It gives shoppers a very good shopping experience. For example, if you look beyond our shores in Hong Kong, if you look at Central, it has got the shopping node where everything is connected.” Far East Organization, which owns Orchard Central, said a brand agency has been appointed to create an exciting brand identity for the “Somerset on Orchard” shopping precinct. Mavis Seow, chief operating officer of retail business group at Far East Organization, said: “At the planning stage, Orchard Central and orchardgateway had collaborated to ensure that architecturally and functionally, the two malls were developed in a seamless manner. “These linkages are meant to create a new shopping zone that offers seamless, all-weather connectivity and a critical mass of retail options for shoppers. “The two malls also have shared carpark facilities and there are ample signages to provide directions to both malls and MRT station. With the enhanced connectivity, we have seen an increase in footfalls to Orchard Central.” Source : Channel NewsAsia – 12 May 2014


Luxury developer KOP shifts focus to “entertainment real estate” Luxury property developer KOP is perhaps best known for its Hamilton Scotts condominium, where a unit sold for as much as S$24 million. It was also responsible for developing the Montigo resorts in Bali and Batam. But the firm is changing its strategy to focus on building mixed-use entertainment centres. Amid sluggish demand in the high-end property market, KOP said it is now seeing better prospects in a sector it calls “entertainment real estate”. Ong Chih Ching, group CEO of KOP Limited, said: “We think that the world is slightly anti-elitist right now. So as a company, we need to focus and look at what is next. And when we studied the market, we realised that we should go for consumer-type real estate. “I think that entertainment real estate is not something that a lot of the traditional developers have actually looked at, and that’s why we think this is a good opportunity for us to enter.” KOP said it may derive ticketing or food and beverage sales from these entertainment venues. In addition, given the rising popularity of online shopping, KOP said there is a need to give consumers a greater reason to leave their homes – be it for a concert, or for other forms of entertainment. Ms Ong added: “There is a lot of online retail (these days), so that also will be a challenge, in terms of footfall and traffic to the malls.” Speaking to reporters ahead of its listing on the Catalist board of the Singapore Exchange on Monday, KOP said its first project in the area of “entertainment real estate” will come in the form of an indoor winter resort in Shanghai, China. The S$2.8-billion development, named Winterland Shanghai, will also have hospitality, residential and commercial property elements in its mix. KOP said the concept of “entertainment real estate” is not new. An example is US company AEG, which owns sports venues like the Staples Centre – which is best known for being the home of the Los Angeles Lakers basketball team. Still, analysts warned that the firm may be wading into unfamiliar territory. Roger Tan, CEO of Voyage Research, said: “The high-end property market in Singapore is being hurt by a lot of government controls. So I think they are potentially using this new strategy to differentiate themselves from the rest. “But to me, if you were to do this, you’re going into untested ground, and when you go into untested ground, though you may be able to generate new revenue sources from the property development, there are a lot of unknowns and question marks with regards to how well it’s going to work.” KOP’s shares will start trading Wednesday morning. The firm listed via reverse takeover of Scorpio East, a film distributor and concert organiser. KOP said it opted to list via reverse takeover because it believes that Scorpio East’s expertise will help it produce entertainment content or secure the partnerships it needs for its “entertainment real estate” business. Source : Channel NewsAsia – 12 May 2014


Corporate investors lured by hospitality sector, say consultants Hotels and serviced apartments are increasingly finding favour among corporate investors in Singapore, according to property consultants. Chesterton Singapore says the segment is compelling, leveraging on the growth in tourism as well as rising interest in hospitality real estate investment trusts. Mapletree Investments recently signed a deal to buy a 49-per cent stake in Oakwood Asia Pacific, with plans to acquire and develop US$4 billion worth of corporate and serviced apartments in Asia, Europe and North America. Analysts say the hospitality segment is attractive to investors who wish to diversify their business. It also presents upside potential as real estate investment trusts (REITs) continue to be well received in the market. Donald Han, managing director of Chesterton Singapore, said: “You have City Developments hospitality REIT… Far East Hospitality REIT… Ascendas Hospitality Trust and more might be jumping on to the bandwagon. “Companies like Mapletree may… be mulling potential listing once their acquisitions have hit a particular matured level.” Analysts say investors are looking at hotels and serviced apartments as they tend to offer higher yields compared with investments in retail malls or commercial offices. Consultancy Colliers International says the rate of returns of hotels and serviced apartments is around 5.25 to 5.75 per cent in Singapore. This is higher than the rate of returns of offices, which is around 3.5 to 4.25 per cent, and retail properties, which is around 4.75 to 5.5 per cent. However, it is slightly lower than the rate of returns of industrial properties, which is at around 6 to 6.75 per cent. The consultancy added that total investment transaction value for the hotels and serviced apartments sector in Singapore has increased sharply from S$298 million in 2009 to S$3.7 billion last year. However, some analysts say rising prices in Singapore’s hospitality market could send investors scouting for opportunities abroad. “Luxury property like what has been transacted at Westin recently went for about S$1.5 million per key,” said Mr Han. “Compare that to Australia, where the price per key for a 5-star hotel would hover around S$500,000 to S$550,000 per key (while) in Tokyo, probably around S$400,000 to S$500,000 per key — about more than 50-per cent discount compared to some of the properties in Singapore.” Tang Wei Leng, executive director of investment services at Colliers International, said: “One hot country right now is Japan. Call it “Abenomics” or the Japan Olympics that they will be hosting in 2020, all this will lead to people wanting to travel to Japan. Where do they have to stay? Serviced apartments and hotels. “The other one that we think highly of is Seoul. There are two casinos that have been announced.” Market watchers say the expected growth in international visitor arrivals to Asia Pacific over the next five years will continue to support investments in the hospitality sector. According to preliminary findings from a recent report by the Pacific Asia Travel Association (PATA), visitor arrivals to the Asia Pacific region will continue to grow at an average annual growth rate of 6.2 per cent from 2014 to 2018, to hit 660 million by 2018. Source : Channel NewsAsia – 8 May 2014


CEA seminar to cover buying and leasing property The Council for Estate Agencies (CEA) and the Consumers Association of Singapore (CASE) will conduct a public seminar this month on topics including buying homes in new developments, leasing property and the potential problems in real estate transactions. The last of a four-part series that began last August, the seminar on May 24 will be held at NTUC Centre, 1 Marina Boulevard from 10am to 1pm. Mr Chris Koh, key executive officer of the eponymous property consultancy Chris International will guide home buyers through the process of purchasing properties in new developments. Seminar participants will find out how much they can rely on a developer’s sales brochure, learn what is strata void area and what to look out for when taking over a new property. Dr Tan Tee Khoon, key executive officer of KF Property Network, will cover the topic of leasing residential property — who is eligible to rent what type of property and whether short-term leasing is allowed. Mr Yeap Soon Teck, deputy director (Licensing) at the CEA, will talk about the common problems encountered in property transactions and how to avoid these pitfalls. The CEA handles more than 1,000 complaints a year, often over unprofessional or poor service from real estate salespersons. The admission fee is S$10. Call 6461 1842 or email to rsvp@case.org.sg for details. Serangoon North HUDC goes private The Serangoon North HUDC Estate has been privatised, clearing the path to a possible collective sale of the entire estate to private property developers. The Housing and Development Board said in a statement on Thursday the estate will be converted into a strata-titled property under the Land Titles (Strata) Act. The privatisation is initiated by residents and a requisite 75 per cent majority support was subsequently achieved by them, the statement added. Serangoon North HUDC Estate comprises 244 units of flats at Blocks 128, 129, 130, 131, 132, 133 and 134 Serangoon North Avenue 1. HUDC flats were built in the 1970s and 1980s as a housing option for middle-income citizen families. HDB phased out the building of HUDC flats in 1987 as their demand declined. Privatisation of HUDC estates was announced in 1995 as part of the government’s effort to meet the rising aspirations of Singaporeans to own private housing. It also enables the owners to have better control over the management and maintenance of their estate. Source : Channel NewsAsia – 8 May 2014


Seeking talent, social media firms take up prime locations in CBD Social media companies such as LinkedIn and Facebook are taking office space in the central business district here because they want to attract the best talent, said Mr Chris Archibold, international director and head of markets at property agency Jones Lang LaSalle in Singapore, as the tech giants displace large banks in some prime locations. Barclays, the second-largest United Kingdom bank by assets, has given up two storeys of prime office space at Tower 2 of the Marina Bay Financial Centre that has been leased to LinkedIn, people familiar with the matter said. The bank has surrendered about 60,000sqf of office space to the landlord, one of the people said. Barclays declined to comment. A LinkedIn spokesman declined to comment on the move but said the company has one million users in Singapore and 50 million in the Asia-Pacific region. Monthly rents at the property are now between S$11 and S$12 per square foot, compared with S$10 and S$11 per square foot when Barclays moved into the building in 2011, said Mr Donald Han, managing director of Chesterton Singapore, a real estate consulting company. “Social media companies like Facebook and LinkedIn are taking office space in the central business district in Singapore, whereas in other cities, you won’t find them in the CBD,” said Mr Archibold. The Singapore office of social networking site Twitter is also in the central business district. LinkedIn, the biggest online professional networking service with more than 300 million members, opened its Asia-Pacific headquarters in Singapore in 2011. The company’s office is currently in AXA Tower, in an older part of the central business district. LinkedIn last week gave a second-quarter sales forecast that missed analysts’ estimates. Its revenue in the quarter will be US$500 million (S$624 million) to US$505 million, the United States firm said. Analysts on average had been projecting sales of US$505.5 million, data compiled by Bloomberg showed. Office rents in Singapore — which is ranked by Cushman & Wakefield as the most affordable of the top five major financial centres, which also include London, Hong Kong, Tokyo and New York — are rebounding as robust demand and high occupancy rates reinforce the bargaining power of landlords. Rents in Singapore’s central business district are expected to rise as much as 15 per cent this year, DTZ Holdings said. Barclays will terminate its lease on about 15,500sqf of office space in a building in Tampines and relocate the employees to Marina Bay Financial Centre by July, people familiar with the matter said last month. This follows a similar move earlier this year when the bank exited Changi Business Park. It occupies about 290,000sqf at Marina Bay Financial Centre and has another 96,000sqf at One Raffles Quay. Source : Today – 6 May 2014


HDB resale prices remain flat in April Resale prices of Housing and Development Board (HDB) flats remained relatively flat last month, a flash report from the Singapore Real Estate Exchange (SRX) showed. Overall, HDB resale prices dropped slightly by 0.2 per cent in April compared to March. This decrease is driven by 3-, 4- and 5-room flats which softened by 0.2 per cent, 0.8 per cent and 0.4 per cent respectively. However, prices of executive flats rose 1.2 per cent. On a year-on-year basis, last month’s prices are down 5 per cent from the same period last year. Resale volume rose in April with 1,484 units sold — the highest since July last year when 1,494 units exchanged hands. Last month’s sales volume was a 4.4 per cent increase from March, when 1,422 units were sold. On a year-on-year basis, April’s resale volume is still 14.4 per cent down compared with 1,733 units resold in the same period last year. Meanwhile, rental volume also fell, with an estimated 1,653 units rented last month, a 3.8 per cent decrease from March’s 1,718 units. On a year-on-year basis, April’s rental volume was 5.3 per cent lower than the same month of last year where 1,746 units were rented out. Rental prices continued to soften, dropping by 1.1 per cent overall in April compared to March. This decrease is driven by 3- and 4-room flats which softened by 2.9 per cent and 1.8 per cent respectively. However, rental prices of 5-room and executive flats saw an increase of 0.4 per cent and 3.2 per cent respectively. On a year-on-year basis, prices in April are down 2.3 per cent from the same period last year. Overall median Transaction Over X-value (TOX), which measures how much people pay over recent transaction prices, has remained negative at -S$4,000 for the overall HDB market. This means more than half of all HDB buyers paid below recent transaction prices for their units in April. This is a drop of S$1,000 from March. Among HDB towns with more than 10 transactions, Queenstown and Jurong East had the highest median TOX at +S$2,500 and +S$2,400 respectively. This means more than half of the buyers in these towns paid above recent transaction prices. Out of 26 HDB towns, only five — Ang Mo Kio, the Central Area, Jurong East, Queenstown and Sembawang — saw a positive median TOX. Punggol and Yishun had the lowest median TOX at -S$9,000 and -S$8,000 respectively. Source : Channel NewsAsia – 8 May 2014


China’s property bubble has burst: Economists China’s property bubble has burst and growth in Asia’s largest economy could slow sharply to less than 6 per cent this year unless the government steps in with fresh stimulus measures, economists at Nomura securities brokerage warned yesterday. “It is no longer a question of ‘if’, but rather ‘how severe’ the property market correction will be. We are convinced that the property sector has passed a turning point,” the economists said in their research report. Real estate and related industries account for about a fifth of the country’s total economic output. A rapid cooling of home prices will slow growth in China and in turn hurt its trading partners. Nomura said four provinces in north China — Heilongjiang, Jilin, Inner Mongolia and Gansu — are leading indicators of the deepening problems in the real estate sector, with property investment having turned negative in the first quarter while industrial output slowed. In Heilongjiang and Jilin, property investment plunged by more than 25 per cent from the previous year. The government is caught in a bind, said Nomura. If it stays the course and refrains from major stimulus, China’s economic growth could fall below 6 per cent this year, well short of the 7.5 per cent official target. If it eases monetary policy, steps up fiscal stimulus and loosens property sector measures, growth could touch 7.4 per cent. However, this would worsen the current housing oversupply and delay the downturn by a year. This would result in a one-in-three chance of a hard landing by the end of next year, which Nomura defines as growth below 5 per cent for four straight quarters. In its base case, Nomura forecast Chinese gross domestic product to slow to 6.8 per cent next year. “Painful adjustments in the sector seem inevitable in the longer run,” the economists said. Meanwhile, more Chinese cities are rolling out measures to encourage home purchases, effectively reversing a near-five-year-old policy of reining in the property market. Ningbo, the coastal city of eastern Zhejiang province, has relaxed home purchase restrictions, the official China Securities Journal newspaper reported yesterday, citing a local industry association. Tongling in Anhui province has introduced steps including providing tax subsidies to first-home buyers and cutting down-payment rates to 20 per cent from 30 per cent for certain buyers, the city government said on Monday. The latest moves follow recent similar measures by three other cities — Nanning, the capital of Guangxi province; Wuxi in Jiangsu province; and Hangzhou, the capital of Zhejiang province — to ease rules for buying homes or land. So far, the turnaround in China’s housing policy has been confined to several cities. Local governments do not always have the support of the central government when loosening housing controls. Back in 2012, Beijing forced governments in areas including Wuhu, Foshan and Chengdu to retract plans to ease real estate curbs. Yet, analysts expect Beijing will approve the easing measures this time, in line with its preference to tailor policies for different local economies in China. UBS economists said: “If property activity weakens further, we think the central government may allow various local governments to relax home purchase restrictions and cut down the current hefty down-payment requirements.” China’s home prices rose at double-digit rates in most cities last year, but the market started cooling late last year as the authorities clamped down on speculation and as banks made it harder for buyers and developers to get loans. Data from the land ministry last month showed residential land price inflation cooled for the first time in nearly two years in the first quarter. New home sales in terms of floor space in 54 major cities dropped 25 per cent in the first four months of this year from the same period a year ago, showed data from property agency Centaline. The trend of easing demand for housing continued early this month. These cities saw home sales fall 47 per cent from a year earlier in the first three days of this month during the Labour Day holiday, it added. “There are increasing concerns of a turning point for the property market. We expect the central government would react differently this time,” said Centaline head of research Liu Yuan. Source : Today – 7 May 2014


Studio Apartments scheme can help support seniors’ retirement need: Khaw Senior citizens who sold off their old flats and moved to a studio apartment have made around S$200,000 each from the scheme. This is the amount they gained after paying off outstanding loans for the old flat and fully paying for the new studio apartment. National Development Minister Khaw Boon Wan revealed this in his blog on Wednesday as he described the Studio Apartment scheme as one which has become “valuable in supporting seniors’ retirement needs”. He said that between 2006 and 2013, 7,600 households have booked a studio apartment. Of these, two-thirds were below 65. Half were living alone, being divorced, single or widowed. About 70 per cent were former owners of a 3- or 4-room flat. Mr Khaw said: “We are taking studio apartments one step further by weaving them into integrated developments, like the Kampung Admiralty which we broke ground for recently. “The two blocks of studio apartments will have easy access to a hawker centre, public plaza, healthcare, childcare and eldercare services, all under the same roof. “The co-location is deliberate to promote inter-generational interaction and bonding with their children and grandkids. “We will continue to experiment and try out new layouts to see what will work best for our seniors, and to enable them to age actively where they live, in their familiar HDB town.” Source : Channel NewsAsia – 7 May 2014


Planned AMK pte housing estate “could be a hit” with property buyers A planned 38-hectare private housing estate in Ang Mo Kio could prove to be a hit with property buyers. This is according to some property analysts who noted that there are now few locations near the city and in mature estates available for new landed housing. The area – bordered by Tagore Road, Lentor Drive and Yio Chu Kang Road – is just a forested place now but the plan is to turn it into a new private housing estate, which will be located near the future Lentor MRT station. It’s part of plans to rejuvenate Ang Mo Kio town. The Urban Redevelopment Authority (URA) said there will be high-rise, medium-rise and landed housing options alongside parks and a variety of amenities. Other plans in the pipeline include a mixed-use development next to the new MRT station. The development of the area will be phased in tandem with the opening of the new MRT station, which is expected to be around 2020. Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, said: “Many of the vacant sites that can be developed into landed housing are either quite far from the city centre, in locations like Sembawang or somewhere in the northwest part of Singapore. “(The area bordered by Tagore Road, Lentor Drive and Yio Chu Kang Road) is a rather unique location in that it’s on the outskirts of Ang Mo Kio and potentially part of it can be carved out for landed housing development. It would also be one of the very few new landed housing developments located near a new MRT station.” Source : Channel NewsAsia – 4 May 2014


More private homes to come in the coming months Expect more private homes to be launched in the coming months. According to analysts Channel NewsAsia spoke with, some developers plan to launch their projects during the current window — after the festive period in the first quarter of the year and before the year-end holiday season. More than 3,500 units were launched per quarter in the second and third quarters last year, compared to some 2,600 units in the last quarter of 2013, according to the Urban Redevelopment Authority (URA). The preview of the 944-unit Coco Palms in Pasir Ris started on Saturday, and as of 4pm, developers recorded about 600 visitors to the show flat. The project’s marketing agents said they are encouraged by the turnout. Daniel Lim, senior marketing director at Huttons Asia, said: “The property market is rather weak right now but Coco Palms is located only a few minutes walk away from the MRT and places like this are still very much sought after.” Prices start from S$498,000 for a 1-bedroom unit. Unit sizes range from 463 square feet (sq ft) for a 1-bedroom, to 3,111 sq ft for a penthouse. The condominium is developed by Hong Leong Group Singapore, and comes on the heels of another launch by the group earlier this week. The other launch, Commonwealth Towers, opened its doors to buyers on the May Day holiday. As of closing time on the first day of the launch, 210 of its 400 units released were sold. Such new projects may be one reason why developers of older launches could be in a hurry to clear stock. About 13,000 new units are expected to enter the market in the later part of this year. However, one property analyst said that is not the only reason. Chris Koh, director of Chris International, said: “For developers today who have foreign ownership, they have to apply for a qualifying certificate and this comes with conditions that they have to sell all their units within two years of (getting its) TOP (Temporary Occupation Permit).” Many of the developers here are publicly-listed and have some form of foreign ownership, and if developers are unable to meet the two-year deadline, they can apply for an extension for a fee. Source : Channel NewsAsia – 3 May 2014


HDB doubles grace period for rental transfers The Housing and Development Board (HDB) has doubled the grace period for long-time tenants affected by a rule that restricts them from transferring their business space. The three-year assignment grace window will be extended to six years for commercial and industrial tenants who have been HDB tenants for at least 15 years as of Oct 16 last year, Minister for National Development Khaw Boon Wan said yesterday in his blog. The HDB had relaxed the policy following feedback from various groups of tenants, of which a significant proportion will be retiring in a few years’ time, or would be near retirement then, he said. Under the rule imposed last October, new tenants will not be allowed to assign their properties and must return the premises to the HDB for re-tender if they choose to exit their businesses. Existing tenants, however, were given a three-year grace period to make business adjustments. About 7,100 tenants, or 40 per cent of those who rent HDB commercial and industrial space, will benefit from the special concession. Among them, 77 per cent are aged 55 years and above, Mr Khaw noted. “I hope the extended grace period would better help them make the necessary business adjustments to dovetail with their retirement plans. This concession is a good way to recognise their many years of serving the local community,” he said. HDB said the policy was introduced following an upward trend in assignment fees and tendered rent in recent years. It aimed to weed out high assignment fees and unhealthy speculation, as the higher operating costs will eventually be passed on to consumers. The rule change has been effective, with the average transfer fees for HDB commercial and industrial properties having fallen by about 33 and 42 per cent, respectively, since last October, Mr Khaw noted. Source : Today – 3 May 2014


Lotte Shopping postpones S$1.25b S’pore REIT listing Lotte Shopping has postponed the listing of an up to US$1 billion (S$1.25 billion) real estate investment trust (REIT) in Singapore, underscoring lacklustre appetite for initial public offerings amid volatile market conditions. The operator of South Korea’s largest department store chain said in a regulatory filing yesterday it might reconsider the option if global financial markets improve, but is currently looking at a sale and leaseback deal through a local public real estate fund as an alternative. Singapore’s IPO market has struggled in recent years as most big-ticket listings in Asia opt for Hong Kong, where there is more robust demand from Chinese and international investors. IPO deals in Singapore so far this year have had a slow start, raising only US$774.6 million (S$969.2 million) compared with US$2.46 billion (S$3.08 billion) for the same period last year. Volatile equity markets also scuppered one other big Asian IPO this week — a Hong Kong listing for Chinese pork producer WH Group, even after it cut the offer size by two-thirds to US$1.9 billion. WH Group’s IPO had also suffered from rich valuations and negative publicity over executive compensation. The marketing for the Lotte IPO had been delayed as concerns about economic growth in China and other emerging markets triggered a sell-off in riskier assets, reducing investor appetite for these markets. Lotte had been pursuing the listing to improve its financial structure and utilise funds for its business operations in South Korea and abroad. Source : Today – 3 May 2014


Bridge to link Pasar Geylang Serai to civic centre As Pasar Geylang Serai’s 50th anniversary celebrations end, the authorities are busy preparing for the next phase of the iconic market’s development. A bridge will be built to connect the market to the area’s upcoming civic centre – Wisma Geylang Serai – and there will also be links to the new Paya Lebar commercial hub. Pasar Geylang Serai is one of Singapore’s oldest markets. To end Pasar Geylang Serai’s 50th anniversary celebrations, a community lunch was prepared for some 5,000 people on Sunday. It was graced by Manpower Minister Tan Chuan-Jin, who is also the Member of Parliament for the area (Marine Parade GRC). While 50 years have passed, there is more to expect. For one, Wisma Geylang Serai is set to be ready in 2017 and it will be linked to Pasar Geylang Serai by a bridge. The market will also be connected to the upcoming Paya Lebar hub by physical links like walkways. Mr Tan said: “We do intend to create the physical links, in terms of walkways, so as to facilitate the flow of people, because at the Paya Lebar end, there are going to be a lot of offices. “People will be coming here to shop, eat, and visit Wisma Geylang Serai itself. So how do we best facilitate the flow of traffic? I think that’s really quite important. “What we want to do is, really, to provide the trafficability to facilitate the flow of people from one end of the Paya Lebar area to Geylang Serai, and back and forth, which I think will liven up the area. “I think it will bring a lot of life. For the merchants here as well, it will also be a big boost for businesses. It’s a bit quiet on the weekdays. But I think as this place becomes a hub for people to live, work and play, I think you will see it coming alive quite considerably. “But I think the important point to emphasise also is to keep the character and the spirit of the place.” People Channel NewsAsia spoke to welcomed the idea. Rahmat Sawie, secretary of Geylang Serai Merchants’ Association, said: “Previously, when we had our temporary market at Eunos Road 5, which is near the MRT station, the number of visitors to Pasar at that time was quite high. “So our thinking is that, with the link from Paya Lebar hub or Paya Lebar MRT to Pasar Geylang Serai, it will really increase the number of visitors to our market.” Dokiman Tahir, a resident, said he hopes that there will be shelter for people walking between Paya Lebar hub and Pasar Geylang Serai. “When heavy rain comes, it’s easier for them — with their baju kurungs,” he said. Mr Tan added authorities are also working with the National Environment Agency on future upgrading plans for the market. With a growing number of options, Mr Tan added that work must carry on to ensure Pasar Geylang Serai remains the heart and hub of the community there. He added that Pasar Geylang Serai must provide an attractive mix of products which are of good quality and provide value for money. It should also be a place for social and cultural activities. Mr Tan stressed that as the area continues to be developed, the character and spirit of the place should not be lost. “The physical part is really the easy part but you sometimes can forget the softer aspects of culture and the relationships that have been established. That’s where I said working with the local community here, the mosques here remains an important effort,” he said. Source : Channel NewsAsia – 4 May 2014


Commonwealth Towers condo sees strong demand at launch The Commonwealth Towers condominium near the Queenstown MRT station saw strong demand at its launch on Thursday. Developers said that as at 8pm, 175 of the 400 units launched were sold, with at least another 100 buyers waiting in line. One property analyst said the lack of recent launches in the area may have driven up sales for the project. Many people took advantage of the May Day holiday to check out the latest property launch in the Queenstown area. Franky Lim, a potential buyer, said: “This is quite a good location. The psf (per square foot) is slightly over what we thought it would be. The quantum is also not small, so we are still considering.” The most popular are the two-bedroom units, which are going from S$965,000. More than 50 per cent of those units have since been sold. The launch saw 300 units on offer initially, but developers decided to add another 100 in view of the strong demand. The development has a total of 845 units consisting of one- to four-bedroom units ranging from 441 to 1,302 square feet. Prices start from S$721,000 for the one-bedroom units to S$2.2 million for a four-bedroom unit. An analyst said the lack of recent launches in the area may have boosted sales for the Commonwealth Towers project. The last condominium in the area was launched some four years ago. Ku Swee Yong, CEO of Century 21 Singapore, said: “Today’s showing is evidence that there are a lot of investors who, firstly they qualify under the TDSR (Total Debt Servicing Ratio) and ABSD (Additional Buyer’s Stamp Duty) rules, and they are also happy to put their investment money to work in a product that is well-located as well as with good interior furnishings.” Attractive prices are also important in drawing buyers, especially for two upcoming projects at Kim Tian Road and Prince Charles Crescent. Prices have not been released yet but analysts expect developers to take the cue from the market reaction for Commonwealth Towers. Channel NewsAsia understands that the Kim Tian Road site has the highest land cost at S$1,163 psf per plot ratio, followed by the Prince Charles Crescent plot at S$960 psf ppr. Another project which opened for preview on Thursday is the Waterfront @ Faber. The 199-unit development at Clementi saw some 400 visitors at its showflat. Source : Channel NewsAsia – 1 May 2014


S’pore hotel assets prove big draw for investors Investors are snapping up hotel assets in Singapore, where the average daily room rate is the highest in Asia, driven by a record number of leisure and corporate visitors. Eleven hotels valued at S$2.45 billion were sold in Singapore last year, four times the total in 2012, said property broker Savills. “We are seeing some pretty aggressive bidding just to get into Singapore,” said Mr Robert McIntosh, executive director at broker CBRE Group’s Asia-Pacific hotel business here. “Some of the landmark iconic properties, which are extremely well sought-after, aren’t driven just by income but by long-term capital gains.” Among properties bought by foreign investors were the 308-room Grand Park Orchard hotel and its retail podium Knightsbridge. It was acquired for S$1.5 million per room by Chinese steel tycoon Du Shuang-hua through his Singapore-based company Bright Ruby Resources, Knight Frank said in its third-quarter 2013 report. And in December, Tokyo-based Daisho bought the newly-opened Westin hotel from a fund owned by BlackRock for about S$468 million, or S$1.5 million per room, said CBRE. Tourist arrivals in South-east Asia’s biggest financial centre is forecast to grow as much as 8 per cent to a record 16.8 million this year from last year, while tourism revenue may climb by as much as 5 per cent to S$24.6 billion, the Singapore Tourism Board has said. “Singapore is a very strong market and one of our top markets in Asia,” said Mr Michael Issenberg, Accor chairman for the Asia-Pacific region. “Demand is high, as Singapore does a great job with the conferences, leisure and corporate sectors, and a lot of airline business. It’s got a good mix.” Accor will open its Sofitel So brand in the business district next month and its first ibis Styles brand in Singapore in 2016, while InterContinental opened its Holiday Inn Express in the city’s nightlife hub of Clarke Quay last month. Demand is also being supported by local investors chasing the assets. Ascendas Hospitality Real Estate Investment Trust bought the Park Hotel Clarke Quay for S$300 million from Parksing Property, a member of the Park Hotel Group, said a joint statement from the companies in June. “This is a small little island, so there is a scarcity of assets and land,” Mr Tan Juay Hiang, chief executive of Ascendas Hospitality Trust, said in a phone interview. “There is more certainty in investing here than in other parts of Asia.” Singapore accounted for 16 per cent of a record 143 hotel deals valued at US$13.4 billion (S$16.8 billion) in the Asia-Pacific region last year, said CBRE. This is an increase from a 6.8 per cent share of deals in Asia in 2012, CBRE data showed. But in a sign of caution, there were no hotel transactions reported in the quarter ended in March, because of the gap between buyers’ and sellers’ expectations on price, said CBRE. While the total number of deals in Singapore should come in higher this year than last year, the price paid per room may decline slightly and the number of high-value transactions could drop as it becomes increasingly challenging for investors to find prime hotel assets, said Mr Akshay Kulkarni, regional director of hospitality for South and South-east Asia at Cushman & Wakefield in Singapore. Revenue per available room, or revpar — an industry measure of occupancy and rate — in Singapore also declined 1.4 per cent last year amid an increase in supply, said Mr Kulkarni. Singapore added 3,900 rooms last year — the most in three years — and is forecast to add 2,037 rooms this year, said CBRE. Another 3,000 are expected to be added next year, which could lead to a decline of as much as 5 per cent in revenue per available room, said CBRE’s Mr McIntosh. Still, demand for hospitality assets will remain intact, with investors unlikely to be concerned by lower returns. “Singapore hotel investments remain on the radar of many core investors,” Mr Kulkarni said. “While yields may look low, one must not forget that this is a long-term play with capital appreciation as the bigger game.” Hotel yields ranged from 3 per cent to 4.5 per cent last year, Mr Kulkarni said. Mr McIntosh concurred. “The sheer weight of capital trying to find a home” is driving hotel acquisition, he said. “Investors are ready to accept yields of sub-4.5 per cent even for three-star properties.” Source : Today – 30 Apr 2014


Singapore buyers call for more property curbs Repeated rounds of cooling measures and loan restrictions may have put a squeeze on home prices here, but potential buyers continue to view affordability as a major concern and are calling for additional curbs to bring prices down even further. A biannual survey by real estate portal iProperty.com showed yesterday that 51 per cent of the 2,853 Singapore respondents intend to buy a property in the next two years, with condominiums topping the wish list of many. However, 74 per cent said prices have yet to become more affordable. General manager at iProperty.com Singapore, Mr Sean Tan, said: “The cooling measures have begun to lower prices, which respondents recognise and support … The question now is, when will buyers feel comfortable with adjusted prices and jump back in?” Latest data from the Housing and Development Board and the Urban Redevelopment Authority show that current curbs such as the Additional Buyer’s Stamp Duty have started to take effect, with prices of public resale and private homes dipping in the first three months of the year compared with the previous quarter. However, while acknowledging the effectiveness of the cooling measures, 52 per cent are calling for more restrictions. To address the affordability concerns of buyers, developers have started to price units more competitively, Mr Tan said. “Although respondents are concerned with financing options, more than half, or 51 per cent of them, have a budget above S$800,000 … Some developers are already pricing their projects or lowering prices of previously-launched projects to within this range,” he said. The survey also showed buyers taking an interest in overseas properties, with 43 per cent of the respondents saying they intend to purchase a property outside Singapore in the next two years, and 26 per cent in the next 12 months. Malaysia emerged as a top choice despite recent cooling measures introduced by the government, edging out Australia, the United Kingdom and Thailand. “The survey shows consumers retain great confidence in the property sector,” said Mr Getty Goh, director of real estate research and investment firm Ascendant Assets. “Prices are declining and, while buyers are currently hesitating, the appetite for property remains very strong at both the national and international level. The property market will certainly see a revival in demand; the big question is when. Timing the market is always tough.” Source : Today – 30 Apr 2014


Cooling measures hit home loans Hit by repeated rounds of cooling measures and loan restrictions, the housing market has emerged as a concern for Singapore’s banks, with loans to the sector and new mortgage applications slowing. Housing and bridging loans expanded 7.9 per cent in March to S$168.9 billion from S$156.6 billion a year earlier, central bank data showed yesterday. However, this compares with a compound annual growth rate of 15 per cent in the past five years. “Currently, our housing loans continue to rise due to previously committed loans by home buyers,” said OCBC chief executive Samuel Tsien. “But new loan origination has come down quite a bit, by about 40 per cent, if you compare it with the heydays two years ago.” Similarly, DBS chief executive Piyush Gupta said new home loan applications at the bank were down 45 per cent in the first quarter from a year earlier, but he expects housing loans to still grow this year, albeit at a slower pace. Responding to queries from TODAY, UOB said the bank is experiencing a similar trend, but declined to provide figures. Yesterday’s earnings reports from the banks showed housing loans at DBS rose 7.1 per cent on-year to S$49.8 billion in the first quarter, slower than the 7.8 per cent on-year pace seen in the October-to-December period. At OCBC, loans to the sector grew 8.3 per cent on-year to S$42.8 billion, narrowing from 11.2 per cent in the previous quarter. Meanwhile, home loans at UOB rose by 7.4 per cent on-year to S$51.6 billion, versus the 9.4 per cent rise in the final three months of last year. Source : Today – 1 May 2014


Rents in affluent areas suffer from outward migration As the housing market moves into the peak rental season, the Core Central Region (CCR) continues to struggle to regain the rents it commanded before the global financial crisis. According to the Singapore Real Estate Exchange’s (SRX) Rental Price Index for non-landed private homes, rents in the CCR are now down 1.9 per cent from their pre-crisis peak. The CCR consists of the city centre including high-end areas such as Orchard, River Valley, Bukit Timah, Holland Road, Harbourfront and Sentosa Cove. In contrast, rents in the Rest of Central Region (RCR), or city fringes, and the Outside Core Region (OCR), or suburbs, have exceeded their pre-crisis price peaks by more than 8 per cent. While demand during the peak rental months of May, July and August will place upward pressure on rentals, data from the SRX suggests that the CCR’s underperformance is part of a rebalancing of rental prices among the three regions. Tenants are clearly moving away from the CCR in search of more affordable housing, dampening rental prices in the region while driving them up in the other regions. Two primary factors have conspired to weaken rental prices in the CCR. First, the expansion of MRT lines has allowed condominiums in the RCR and the OCR to capture those renters who were reluctantly paying more for the convenience of living in the CCR. Now, renters can choose from more condominiums with easy MRT access to downtown and other points of interest. Yes, their commute might increase by a few MRT stations, but the savings in rent more than offset that small inconvenience. Second, the global financial crisis has shrunk the rental budget of tenants, causing them to seek more affordable homes further away from the CCR. As a result of the crisis, families tightened their budgets and corporations reduced or eliminated rich housing packages. Many families decided it made more financial sense to live outside the CCR, closer to schools, and let the breadwinner do the long commute. How long will this trend of migration out of the CCR continue? It will continue as long as people believe they are getting more value for money. For example, prior to the global financial crisis, a family saved 27.8 per cent in rent by living in the RCR instead of the CCR. Today, that family saves 17 per cent. The rental savings of the OCR over the CCR was 43.2 per cent in 2008, while it is 37.9 per cent today. As expected, the savings are coming down as demand from migration drives RCR and OCR prices up and those in CCR down. At some point, if supply were to remain constant, the migration will slow as savings become less attractive for the renter to move out of the CCR. However, it is difficult to imagine that this reshuffling of the real estate market will not last for some time. Today’s significant rent savings and the expanded infrastructure of the MRT make it much easier and faster to migrate out of the CCR. By Sam Baker – co-founder of SRX Source : Today – 2 May 2014


Battersea Power Station Phase 2 launched at double the price of Phase 1 The second phase of the iconic Battersea Power Station redevelopment in London is being marketed at more than twice its Phase 1 price, Malaysia’s The Star daily reported, with its Malaysian owners pulling out all the stops for the landmark site in the British capital. Launched in London yesterday, the 254 units in Phase 2 are priced at an average of £2,300 (S$4,870) per sq ft (psf), compared with £1,100 psf for the 861 units in Phase 1 that were sold out within three weeks of launch last year, the daily reported. Malaysians, Singaporeans and Hong Kongers together accounted for about half of the buyers in the first phase, with the rest made up of Londoners, it added. The site is owned by a consortium of Malaysian investors comprising developer S P Setia, conglomerate Sime Darby and the Employees’ Provident Fund. One of Britain’s most-loved buildings, the coal-fired power station that used to belch fumes over the capital — it was decommissioned in 1983 — has suddenly become hip. The owners have hired the renowned British firm Michaelis Boyd Associates in March as interior residential architects for Phase 2. It will team up with heritage architecture specialist Wilkinson Eyre Architects for the project. Work has already begun on the restoration of the power station, which has dominated the London skyline since 1933. To land the contract, Messrs Alex Michaelis and Tim Boyd travelled to Kuala Lumpur last year to see off competition from American and Australian rivals. The power station, the largest brick building in Europe, is impressive from a distance, but absolutely huge up close. “You could fit St Paul’s Cathedral into the main boiler house. You could even fit in the Gherkin (a London skyscraper) if you laid it flat,” said Mr Michaelis. “Our vision was for something that didn’t look like a normal high-end development, that was a little bit more raw. The look will be eclectic, but also site-specific.” Londoners and heritage enthusiasts who have become attached to the structure, in particular its four huge towers, can rest assured that they will not be demolished. “The towers are going to be taken down brick by brick while the redevelopment work is taking place, but then put back up again,” added Mr Michaelis. “One of them is going to be restored with a glass lift inside.” The Michaelis Boyd-designed apartments will be within the existing facades of the western and eastern flanks of the building and on top of the central boiler house. “We are going to be offering two slightly different looks, reflecting the fact that Battersea Power Station was built in two stages, pre- and post-war,” said Mr Boyd. “People don’t want to live in some bland modern development that could be anywhere in the world. They want to be part of the power station and its history. That means being part of the brickwork,” he added. The £8 billion project is expected to be completed in 2022. Studio apartments will start from £800,000 1-bedroom apartments will start from £1,000,000 2-bedroom apartments will start from £1,500,000 3-bedroom apartments will start from £2,700,000 4-bedroom apartments will start from £4,000,000 Penthouse will be POA (priced on application) Source : Today – 2 May 2014


Commercial, residential sites released in Potong Pasir & Sembawang The Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB) have released a commercial and residential site, and a residential site respectively for sale under the Government Land Sales (GLS) Programme. Together, the two sites can yield about 1,300 residential units. The commercial and residential site at Meyappa Chettiar Road, launched for sale under the Confirmed List, is located within a residential estate and next to Potong Pasir MRT station. It is expected to yield an estimated 685 housing units. The executive condominium site at Sembawang Road is on the Reserve List. It is located next to Canberra Residences and expected to yield an estimated 605 residential units. The tender for the site at Meyappa Chettiar Road will close at 12 noon on August 19. Selection of the successful tenderer will be based on the tendered land price only. Source : Channel NewsAsia – 30 Apr 2014


Sims Drive residential site attracts four bids A residential site at Sims Drive attracted only four bids at the close of a Housing & Development Board (HDB) tender on Tuesday. First Changi Development, a unit of Guocoland, submitted the highest bid of S$530.9 million for the 23,900.1-square-metre site. The price translates to S$687.9 per square foot per plot ratio (psf ppr). The second highest bid came from a consortium comprising Verwood Holdings, Intrepid Investments and TID Residential at S$502 million. The other two bidders for the site are Sim Lian Land and a consortium that includes Fraser Centrepoint unit FCL Topaz. Analysts said the low number of bids attest to the continued weakened sentiment in the property market. OrangeTee’s head of research & consultancy, Christine Li, said: “The sheer size of the development has also deterred developers from overbidding, as bigger projects would invariably carry bigger risks, and this applies especially so during challenging market conditions.” The 99-year leasehold site is for the development of condominium or flats. It can also be developed into a combination of flats and strata landed homes with prior written approval. Some 900 units are expected to be developed on the site. CBRE Research’s head, Desmond Sim, said in a note that “while land prices are affected by general market sentiments and specific site attributes, they are also a reflection of other considerations such as foreign labour crunch, and pre-fabrication requirements that have contributed to the rise in development cost”. The site at Sims Drive was launched for public tender on 30 December 2013. HDB said the decision on the award of the tender will be made at a later date. Source : Channel NewsAsia – 29 Apr 2014


Mapletree, Oakwood in multibillion-dollar deal Mapletree Investments and California-based Oakwood Worldwide have signed a multibillion-dollar deal to acquire and develop serviced apartments. Under the deal, Mapletree will acquire a 49 per cent stake in Oakwood Asia Pacific — the United States firm’s serviced apartment business in Asia — for an undisclosed amount. The joint venture then aims to acquire and develop some US$4 billion (S$5 billion) worth of corporate and serviced apartment assets within Asia, Europe and North America. Both companies said in a joint statement on Wednesday that this will see the opening of more than 100 new properties around the world under the Oakwood brand over the next five years. Mapletree said it will directly acquire and develop serviced apartments under a licence to use the Oakwood Worldwide brands in all markets outside of North America. Meanwhile, Oakwood Worldwide will also source and manage acquisition and development deals for Mapletree within North America. Mapletree’s group chief executive officer Hiew Yoon Khong said in the statement that the joint venture is an “important step for us in our next five-year strategic growth plan”. “The joint venture will help Mapletree build our operational capability in the corporate and serviced apartments sector,” he said. “This sector is another key asset class which we are confident of building into a world class platform with Oakwood as a partner.” Oakwood Worldwide has service apartments throughout the US, London and in the Asia Pacific region. In the region, the serviced apartments are located in China, Hong Kong, India, Indonesia, Japan, Korea, the Philippines and Thailand. Mapletree owns and manages S$24.6 billion of office, logistics, industrial, residential and retail/lifestyle properties as at March 31. Source : Channel NewsAsia – 30 Apr 2014


Three sites launched for industrial development Three sites have been launched for industrial development, under the first half of 2014 Industrial Government Land Sales (IGLS) Programme. Located at Woodlands Avenue 12, a 3.9 ha site released by the Urban Redevelopment Authority (URA) has been zoned for Business-1 development and has a 30-year tenure and a maximum permissible gross plot ratio of 2.5. A second site, at 8,922 sq m, has been released by JTC Corporation at Tuas Avenue 11. It is zoned for Business-2 development, with a lease of 30 years, and a maximum permissible gross plot ratio of 1.4. The third site, launched for sale by JTC, is located at Tuas South Street 11. Triggered from the Reserve List, the minimum bid for the land parcel is S$6 million. Zoned for Business-2 development, the site has a 20-year 10-month tenure and a maximum permissible gross plot ratio of 1.0. In a statement released on Tuesday, URA and JTC said that the three sites will provide “more location options for industrialists”, and that the different land tenures and sizes offered will cater to industrialists who prefer to purchase strata-titled industrial property, as well as those who prefer to have the flexibility to custom-build their own facilities. Tenders will close on July 1. Source : Channel NewsAsia – 29 Apr 2014



April 2014 Resale private home prices fall 1.1% in March Resale prices of completed non-landed private homes continued to fall last month, according to Singapore Residential Price Index (SRPI) flash estimates released on Monday, with declines registered across the board. The SRPI, compiled by the National University of Singapore’s (NUS) Institute of Real Estate Studies, showed overall prices decreased by 1.1 per cent last month from the month earlier, accelerating from a revised 0.9 per cent decline in February. Prices of homes in the central region excluding small units led the decline, falling by 1.3 per cent last month, compared to the 0.2 per cent drop a month earlier, the SRPI data showed. Prices of homes in the non-central region fell 1 per cent, moderating from the 1.5 per cent decline previously. Prices of small units — those with a floor area of 506 sq ft and below — fell 0.4 per after the 0.7 per cent drop a month earlier, the SRPI data showed. Mr Nicholas Mak, Executive Director of Research & Consultancy at property firm SLP International, said the first quarter had been challenging period for the private residential property market. “The relatively faster rate of price decline in March indicates that in the absence of any strong marketing activities or hype in the primary market, the demand and prices in the secondary market could suffer as well … As fewer new projects were launched in the quarter, there was less stimulus for the resale market, which resulted in weaker demand and prices in the secondary market,” he said. For the whole of 2014, Mr Mak forecasts the weak demand to cause the overall SPRI to fall by 6 to 11 per cent. “In the coming months, a growing supply of newly completed homes will exert downward pressure on rentals islandwide. The prices of completed residential properties in the central region is expected to fall less than that in the suburbs because about two-thirds of the future supply of new private homes will be in the suburban areas,” he said. Therefore, the SPRI for homes in the central region is expected to decrease by 5 to 10 per cent, while the SPRI for homes in the non-central areas could drop by 8 to 13 per cent this year, he added. Source : Today – 28 Apr 2014


Private home price decline accelerates as curbs bite There was no last-minute reprieve for the private housing market in Singapore in the first three months of the year, with finalised data from the Urban Redevelopment Authority (URA) confirming that the price decline had picked up pace amid persistently weak sentiment. Private home prices slipped 1.3 per cent in the first quarter of the year from the previous three months, unchanged from the preliminary estimate released earlier this month and accelerating from the 0.9 per cent fall in the fourth quarter of last year, the URA said yesterday, Analysts said the multiple sets of property market cooling measures introduced by the Government, especially the Total Debt Servicing Ratio (TDSR) framework imposed last June, have been effective in curbing demand and runaway prices. They expect the measures to remain for now, suppressing demand and probably leading to further weakness in home prices in the following quarters. “Market exuberance for private homes was very much tempered by the existing property cooling measures and the TDSR … The various government measures have effectively curtailed demand from most groups of home buyers,” said PropNex Realty’s chief executive Mohamed Ismail. Both the primary and secondary markets suffered sharp slowdowns in buying activity. Developers launched 1,964 new private homes from January to March and sold 1,744 units, fewer than the 2,631 launched and 2,568 sold in the previous three months. In the resale segment, transactions dropped from 1,206 units to 899 homes, the URA said. Prices fell across all segments of the private housing market in the first quarter, with condominiums in the Rest of Central Region (RCR), or city fringes, leading the decline at 3.3 per cent. Those in the Core Central Region (CCR), or city centre, dipped 1.1 per cent, while the Outside Central Region (OCR), or suburbs, registered a slight 0.1 per cent fall. Ms Christine Li, head of research and consultancy at property agency OrangeTee said the bigger declines in the CCR and RCR could be due to developers focusing on trying to sell houses from previous launches. “Most of the homes sold in the first quarter are from existing property launches, where prices could be more attractive as developers have dangled more incentives and discounts to move sales in a slow market,” she said. Ms Li added that prices in the RCR could see some support in the second quarter as more “attractively located” projects are expected to be launched during this period. “Three of the highly anticipated projects — Commonwealth Towers, The Crest and Highline Residences — are expected to be launched in the current quarter. These projects are also expected to fetch a higher median price than what’s been achieved in the first quarter.” And while prices of mass market homes are likely to stay relatively stable, the odds seemed to be stacked against the high-end CCR segment, analysts said. Ms Chia Siew Chuin, director for research and advisory at real estate consultancy Colliers International, said: “Domestic demand has been weakened by the loan curbs while interest from foreigners, who traditionally form a large demand base for high-end properties, has diminished in view of more favourable investment options in the recovering foreign markets. “On the supply side, developers of high-end properties may feel the heat to meet the Qualifying Certificate deadline.” The analysts estimated that overall prices could fall between 4 and 8 per cent by the end of this year, as the property measures are likely to remain. “As long as borrowing costs stay low, the Government is unlikely to reverse the earlier anti-speculation measures … Under such an environment, we expect price weakness to persist,” said Mr Ismail. Source : Today – 26 Apr 2014


Property developers pulling out the stops to boost sales Some are giving big discounts, while others are going on marketing blitzes — property developers are pulling out all the stops to boost sales which have been hit by cooling measures. Statistics from the Urban Redevelopment Authority (URA) on Friday showed a 1.3 per cent decline in prices in the first quarter of this year. It is the largest drop since the second quarter of 2009, when prices fell by 4.7 per cent. The Interlace condominium was launched in 2009 and some residents have since moved in. However, the project by CapitaLand still has 183 unsold units as of March 2014. Over at Whampoa East Road, the Eight Riversuites condominium has 205 unsold units. However, the 862-unit project was one of the top sellers last month, when it sold 44 units. It was the project’s highest sales volume in a single month since June 2013, when the government tightened property loan rules. Under the Total Debt Servicing Ratio framework, home buyers can only loan up to 60 per cent of his or her income. The units were sold at a median price of about S$1,100 psf — almost 20 per cent lower compared to when the project was first launched some two years back, when it was sold at S$1,340 psf. Property watchers Channel NewsAsia spoke to said developers may be under pressure to cut prices in order to boost sales. Nicholas Mak, executive director at SLP International Property Consultants, said: “If a certain residential project has been launched for quite some time and still has substantial unsold units, and this project is quite near to its completion date, the developers may be under some pressure to increase sales. “Because if let’s say the development is completed and there is still quite a number of unsold units, they (the developers) could also be facing competition from other developments that could be newly-launched in the vicinity.” Jones Lang LaSalle’s national director of research and consultancy Ong Teck Hui said: “Since the TDSR was introduced in June 2013, the number of unsold units in launched private residential projects has increased significantly by 19 per cent from 5,243 units in Q2 2013 to 6,247 units in Q1 2014. “This is reflective of the slower take-up of units at new sales launches, resulting in the build-up of unsold units.” Besides cutting prices, developers are also trying other tactics. Sales for the Sky Habitat project at Bishan Street 15 picked up in April, after a marketing blitz. In a statement issued on Friday on its first quarter earnings, developer CapitaLand said 106 units were sold in April — after more than six months of single-digit sales volume, according to URA’s figures. “Another strategy that some developers may embark on is to increase the sales commission for agents,” Mr Mak added. “For example, a one percentage point reduction may not be that attractive to buyers. However, if developers were to raise the commission by one percentage point of the price, that absolute amount will give a lot more incentive to the property agents to work harder in attracting buyers.” The competition is expected to intensify with close to 15,000 projects, including executive condominiums, set to be completed. This brings the total number of units to be completed in 2014 to almost 20,000 — higher than the some 14,400 units in 2013. Source : Channel NewsAsia – 27 Apr 2014


Number of HDB resale flats sold falls to all-time low in Q1 The number of Housing and Development Board (HDB) resale flats sold fell to an all-time low in the first quarter of this year, with 3,781 units transacted. This is the lowest figure recorded since HDB started releasing quarterly resale transaction volume data in 1997. Both public and private units have also registered price declines in the first quarter, with the private market seeing its largest price drop since 2009. The HDB Resale Price Index registered a 1.6 per cent decline in the first quarter, marking the third consecutive quarter that a price decrease has been recorded. Transaction volumes also reached an all-time low, representing a 5 per cent drop compared to the previous quarter where 4,001 resale flats were transacted. On the other hand, subletting transactions rose by 17 per cent in the first quarter, compared to the fourth quarter of last year. There were 7,268 subletting cases in the fourth quarter of 2013, compared to 8,485 cases in the first quarter of 2014. The total number of HDB flats approved for subletting also rose by 2.1 per cent, from 45,674 units in the fourth quarter of 2013, to 46,637 units in the first quarter of 2014. Mr Chris Koh, director of Chris International, said: “Ever since the ruling was changed for owners to rent out their flats instead of selling them, many have chosen to rent them out. They are staying in their private condominiums and instead have rented out their flats. Unlike in the old days when they had to sell away their flat or stay in their flat and rent out their condo. “So with that change of rule, many are tempted now to hold on to their flats because the rental that they get from their flats is not too bad. Some of them are renting out their flats as high as S$2,800 to S$3,000 a month. That’s a lot of money for an HDB owner. They have realised today that now a flat becomes a form of investment, that holding (on to) their flat helps them enjoy rental, so they have got this rental yield.” Some property analysts expect prices to continue to decline for at least another quarter before stabilising, as more buyers are expected to be drawn back to the HDB resale market. Just last month, HDB had revised its resale procedure to shift the attention of buyers and sellers away from the Cash-Over-Valuation component when negotiating a deal for an HDB resale flat. In line with that, HDB has decided that from this quarter onwards, it will also not publish COV data by town or flat type. As for the private market, with cooling measures taking effect, prices of private residential properties fell by 1.3 per cent in the first quarter of this year — the largest drop since the second quarter of 2009, when prices fell by 4.7 per cent. According to data from the Urban Redevelopment Authority, this is also the second consecutive quarter of decline following a 0.9 per cent drop in the previous quarter. Properties in the city centre (Core Central Region) saw a price drop of 1.1 per cent, following a 2.1 per cent decrease in the previous quarter. Prices in suburban areas (Outside Central Region) fell by 0.1 per cent after a 1.0 per cent decrease in the last three months of 2013. But it was prices in the city’s fringes (Rest of Central Region) which saw the biggest drop this time round, with a decline of 3.3 per cent, reversing a 0.4 per cent increase in the previous quarter. Rentals also slowed, falling 0.7 per cent in the first quarter. This is greater than the 0.5 per cent decline in the fourth quarter of 2013. Developers also launched and sold fewer uncompleted private residential units, excluding executive condominiums, compared to the last three months of 2013. There were fewer than 2,000 units launched in Q1, compared to more than 2,600 in Q4. A total of 1,744 private residential units, excluding ECs, were sold in Q1 of this year, compared to 2,568 units sold in the fourth quarter of 2013. Mr Alan Cheong, senior director of Research & Consultancy at Savills Singapore, said: “Low transactions doesn’t necessarily mean the market is in dire straits. You have to pair that up with the launches and it’s about 87 per cent. No doubt it’s lower than the 97 per cent seen in the first quarter of 2013, but still it’s a healthy number. “For the second quarter we will see a flurry of launches, in the RCR region in particular, so we will see transaction volumes going up because in Singapore there’s this phenomenon that demand chases supply, whether it’s in the office sector, retail sector or residential sector.” A total of 14,985 units, including executive condominiums, are expected to be completed in the last three quarters of this year, bringing the total to 19,505 units this year. Another 24,592 units are also set to be completed next year. In comparison, about 14,400 units were completed in 2013. Source : Channel NewsAsia – 25 Apr 2014


CapitaLand’s Q1 net profit dips by 1.7% Property group CapitaLand has posted a first quarter net profit of S$182.8 million, down 1.7 per cent compared to a year ago. The lower profit was due to a S$58.7 million one-off gain recorded in the same quarter last year. Excluding the one-off gain, CapitaLand’s operating net profit rose nearly 30 per cent to S$155.7 million from the first quarter of 2013. In a statement on Friday, CapitaLand attributed this to higher development profits and improved performance from its shopping malls. Still, CapitaLand’s group revenue declined 3.4 per cent to S$612.6 million from its restated figures in the first quarter of last year. In Singapore, CapitaLand said it sold 34 residential units, which amounted to a total sales value of S$87.0 million in the first quarter. However, sales picked up in April with 106 units sold at its development Sky Habitat with a total sales value of about S$157.6 million following a marketing campaign. In China, CapitaLand reported higher revenue, up 56.2 per cent to S$82 million in the same quarter. The company says this is in line with the increased number of units handed over from projects such as The Loft, La Cite in Foshan, and Lake Botanica in Shenyang. Looking ahead, CapitaLand said it remains confident in the potential of the Chinese market. The company added that it will continue to strengthen and deepen its presence in China through the five city clusters. Source : Channel NewsAsia – 25 Apr 2014


UIC raises stake in SingLand to 97.27% United Industrial Corporation (UIC) and its concert partners have raised their stake in Singapore Land to 97.27 per cent at the close of its takeover offer on Friday. This means UIC can now take the mainboard-listed firm private. Under the regulations, UIC needs SingLand’s public float to fall below 10 per cent before it can delist the company from the Singapore Exchange (SGX). In a late statement on Friday, UIC said it collectively controls a total of 401.2 million shares or 97.27 per cent of SingLand shares issued. It added that trading in the shares of SingLand will be suspended from Monday. Source : Channel NewsAsia – 25 Apr 2014


Private and HDB resale prices dip over 1 per cent Resale prices of Housing and Development Board (HDB) flats fell 1.6 per cent in the first three months of 2014 from the last quarter of 2013, while private home prices declined by 1.3 per cent, according to data released on Friday. The 1.6 per cent drop in the HDB resale price index was larger than the advance estimate of a 1.5 per cent decline made earlier this month. Singapore home prices have fallen in recent months, hurt by government efforts to cool the housing market. HDB resale prices have dropped for three consecutive quarters, while private home prices are down for the second straight quarter. URA said price declines were observed across all segments of the private residential property market. Prices of non-landed properties in the Core Central Region dropped by 1.1 per cent, following the 2.1 per cent decrease in the previous quarter. In Outside Central Region, prices declined by 0.1 per cent, following the 1.0 per cent fall in the previous quarter. Prices in the rest of Central Region declined 3.3 per cent, after registering a marginal 0.4 per cent increase in the previous quarter. Rentals of private residential properties decreased by 0.7 per cent in the first quarter, accelerating from the 0.5 per cent decline in the fourth quarter. Source : Channel NewsAsia – 25 Apr 2014


Rentals, sale prices of industrial space rise at moderate pace Rentals and sale prices of industrial space continued to climb at a moderate pace in the first quarter of the year, amid a marginal drop in occupancy rates during the same period, a quarterly report released by JTC yesterday showed. The report showed that rentals rose 0.4 per cent on-quarter during the January-to-March period, higher than the 0.2 per cent growth in the previous three months. On a year-on-year basis, rentals climbed by 4.9 per cent, slower than the average annual increase of 10.6 per cent over the past four years. In terms of sale prices, the data showed a 3.8 per cent on-quarter gain in the first three months, following a 3.3 per cent decline in the previous quarter. However, on an annual basis, the 2.5 per cent increase in sale prices was still significantly lower than the average yearly growth of 20.2 per cent over the past four years. The moderation came amid a drop in occupancy rates, which fell by 0.3 percentage points on-quarter and 1.4 percentage points on-year to 91.6 per cent in the first quarter. “This decline in occupancy rates follows an increase in the supply of industrial land and space by the Government in recent years,” JTC said in the report. Source : Today – 25 Apr 2014


Industrial property market to be more transparent with JTC data Businesses looking to buy or rent industrial properties in Singapore will be able to make more-informed decisions on where to look and how much they should be paying, following JTC’s move to make available more-detailed information on current trends in a bid to introduce more transparency into the market. The move comes as concerns have been raised about the cost of commercial property in Singapore, with suggestions that some landlords are looking to increase prices by unrealistic levels. JTC, which took over the collection and dissemination of industrial property data from the Urban Redevelopment Authority, yesterday launched a service on its website to allow the public to search for past rental and sale caveats for industrial sites — down to the street level. The information will be updated on a quarterly basis and dates back to the past three years. Mr Leong Hong Yew, director of Market Planning Division at JTC, said: “We want to make the market more transparent. Rather than just looking at the top-line number at the index level, we want to give more granularities in terms of geographic area, so (businesses) can see where are the areas they want to move to or whether there are cheaper alternatives. They can look at these and make informed decisions.” There have been reports in recent months of tenants experiencing significant hikes in rents when renewing their leases. Many have called on the Government to take steps to ease these concerns. Mr Victor Tay, chief operating officer of Singapore Business Federation, commended JTC’s effort, as businesses can now peg their bids to a price range based on the available historical information. “In cases where sellers or landlords attempt to hike up prices too much, buyers and tenants can actually decline. An authoritative publication of industrial rent and purchase transactions is a commencement step towards a fair tenancy and fair transaction situation. Transparency can help businesses bargain to stay on or anchor themselves to longer term leases,” he said. “When there’s a lack of transparency, companies tend to peg prices at the higher end, or even the highest pricing plus a certain premium, and because land is scarce, companies tend to outbid themselves.” Property analyst Colin Tan of Suntec Real Estate Consultants agreed, adding that the relatively opaque situation in the past often put tenants and buyers at a disadvantage at the negotiating table. “In the private sector especially, tenants are often at a loss when it comes to the starting level of negotiation. It’s usually up to the landlords to do it because they may have more experience. So, having such data is a step in the right direction because it helps to even out the playing field,” said Mr Tan. “Whether or not this will lead to more affordable prices going forward is also dependent on the demand and supply situation. In the industrial space, there are so many types of properties and different types of tenure. Negotiation is just one aspect of the whole picture,” he said. The Government has been ramping up supply of industrial space over the past few years, slowing down a rise in sale prices and rentals of these properties. An average of about 2.1 million sqm of space is expected to be made available every year over the next three years — an amount that is significantly higher than the average annual supply and demand in the past three years. “In the next few years, we’re seeing a whole range of industrial space coming up, including multiple-user factories, single-user factories, land-based, high-rise or ramped-up factories, so the market is well taken care of,” said JTC’s Mr Leong. “Looking at the supply coming up, we would expect prices and rentals to continue to moderate, and this should be good news for our industrialists operating out there.” Source : Today – 25 Apr 2014


Industrial property occupancy rates fall, prices moderate: JTC Industrial property occupancy rates fell 0.3 percentage points on a quarter-on-quarter basis to 91.6 per cent, based on latest data from Singapore’s lead industrial infrastructure developer JTC Corporation. JTC said the decline follows an increase in industrial land and space supply by the government in recent years. Prices of industrial space continued to moderate compared to previous years. In the first quarter of 2014, prices rose 2.5 per cent year-on-year, in contrast to the average increase of 20.2 per cent yearly, over the past four years. On a quarter-on-quarter basis, prices rose 3.8 per cent, following a 3.3 per cent decrease in the previous quarter. JTC has for the first time also released price data by geographical region, which will be a usual practice from now on. For instance, average prices of multiple-user factory space of B1 classification — meant for light and clean industry, dipped 8.4 per cent on a quarter-on-quarter basis in the Northeast region. Average prices for B1 multiple-user factory space in the West region, on the other hand, rose six per cent quarter-on-quarter. JTC said the government will continue to monitor the industrial property market closely. It will continue to release an adequate amount of land, including smaller Industrial Government Land Sales parcels for industrialists to build their own customised land-based facilities. Over the next three years, a yearly average of around 2.1 million square metres of industrial space is expected to come on-stream. This is about four to five per cent of current available stock — significantly higher than the average annual supply of around 1.2 million square metres, and demand of 900,000 square metres seen in the past three years. Source : Channel NewsAsia – 24 Apr 2014


UIC gets enough shares to take SingLand private United Industrial Corp (UIC) has crossed the 90 per cent shareholding level needed to de-list Singapore Land (SingLand) from the Singapore Exchange, according to a disclosure statement late on Wednesday. UIC, a property and investment firm whose major shareholders include Singapore banker Wee Cho Yaw and Philippine tycoon John Gokongwei, now controls 90.15 per cent of SingLand. SingLand’s properties include Singapore Land Tower and Clifford Centre in the heart of the central business district, SGX Centre which houses the Singapore Stock Exchange, and the Marina Square shopping centre. UIC held around 80 per cent of SingLand back in February when it made a bid to take full control of the listed property firm. Source : Channel NewsAsia – 24 Apr 2014


Woodlands Regional Centre promising for housing prices Last week, a commercial site in Woodlands attracted strong interest from developers, including some of the biggest names in the business. Yesterday, the Government awarded the tender to a consortium of Far East Civil Engineering, Tannery Holdings and Sekisui House, which had beaten seven other bids with its offer of nearly S$634 million. That translates to about S$907 per square foot per plot ratio (psfppr), for the first commercial site put up for tender since the announcement last November of Woodlands Regional Centre as Singapore’s Northern Gateway. The top bid was substantially higher than what the first development site at Jurong Regional Centre fetched in June 2010. The white site slated for commercial/residential/hotel use was contested by six parties then and the top bid submitted by Lend Lease was S$749 million, or S$650 psfppr. The keen interest in the latest tender is a testament to the confidence in the upcoming Woodlands Regional Centre, which is in close proximity to Malaysia’s special economic zone — the Iskandar region. The growth momentum in Iskandar was given an extra fillip last week when the Prime Ministers of Singapore and Malaysia spoke after their annual retreat of the importance of the region and its “complementarities” with the Republic. Three possible locations for the Singapore station of the high-speed rail link to Kuala Lumpur have been identified and the Woodlands-Johor Rapid Transit System is also on track to be completed by 2018. What does this spell for Woodlands Regional Centre? Does it have what it takes to be in the ranks of the Jurong and Tampines regional centres, which have undergone successful transformations? Envisioned as Singapore’s Northern Gateway, Woodlands Regional Centre will incorporate retail, business, residential and lifestyle elements into its two districts — Woodlands Central and Woodlands North Coast. Although the retail scene in Woodlands is not likely to match what Jurong can offer in the foreseeable future, the regional centre has its own unique selling points. Firstly, Woodlands is the only regional centre with a coastal waterfront setting and residents can look forward to enjoying views of the Straits of Johor. The 2013 Draft Master Plan shows that the existing Woodlands waterfront will be expanded eastwards so that the entire stretch can be opened for public enjoyment. New residential developments will be built along the expanded waterfront park, while shipyard facilities in nearby Sembawang will also be relocated to create more space. Secondly, job creation is likely to be at full throttle for the regional centre. Currently, Singapore’s major employment centres are located far from the north and there is high commuting traffic towards the city and the west during the peak hours. This is set to change. The Land Use Plan unveiled last year shows that one important commercial belt called the North Coast Innovation Corridor spanning Woodlands, Sembawang, Seletar, Punggol and Sengkang West is expected to see a buzzing pool of research and development activities that could attract diverse economic clusters. Companies planning to have operations in Iskandar could also take advantage of the improved connectivity between Woodlands and Johor, as well as between Woodlands and the city, with the development of the new Thomson MRT line and the North-South Expressway. When fully developed, Woodlands Regional Centre will provide an additional 100,000 jobs, boosting demand for housing. IMPACT ON PROPERTY PRICES In the past five years, the Government has launched tenders for two private and three Executive Condominium land parcels in Woodlands that can be developed into about 2,700 new homes. This is merely 2.8 per cent of the total uncompleted pipeline supply of 97,742 units. More housing supply is probably needed in Woodlands to support the growth in the jobs in the area. At present, potential tenants looking to rent a private home do not have many choices in Woodlands. The supply of condominiums is limited, with only five projects having been completed in the area over the last decade or so. Some tenants working in the industrial parks in Woodlands have to resort to renting apartments and condominiums in Yishun and Sembawang. Last year, the rental yields of District 25 (Woodlands) and 27 (Yishun and Sembawang) stood at 4 and 4.2 per cent, respectively, both outperforming the islandwide average of 3.8 per cent. In contrast, the prices of private homes in Woodlands have been largely underperforming those in the Outside Central Region (OCR), or suburbs, for all types of sales. The mismatch of capital value and yield could lead to appreciation in the home prices in Woodlands Regional Centre, although volatility is expected over the next four years amid the record completed units islandwide in both the private and public segments. In addition, a possible rise in interest rates could also put a damper on price growth in the near future. Nevertheless, vibrant commercial activities and job opportunities will increase the popularity of Woodlands over the medium to long term. Property prices in Jurong have been keeping pace with the development in the area since the unveiling of the 2008 Master Plan. Prices of non-landed private homes in Jurong have grown by 64 per cent since the first quarter of 2008, outperforming the 58.5 per cent growth in OCR homes. Home buyers and investors need not wait too long for it to happen to Woodlands as long as Singapore continues to progress economically and stay on its decentralisation course to enable more Singaporeans to live near their workplaces. By Christine Li – head of research and consultancy at property firm OrangeTee Source : Today – 18 Apr 2014


China to ease curbs on property in light of slowdown: Analysts China’s slump in property sales and construction is spurring speculation that the government’s four-year-old campaign of real estate controls will start to crack. Citigroup analysts see “targeted easing” in curbs including home purchase restrictions, while Centaline Group, the parent of China’s biggest real estate brokerage, says some cities are inclined to adjust policies, such as the level of scrutiny on buyers. Hong Kong-based Societe Generale China economist Yao Wei said: “The housing sector now poses the biggest downside risk to the Chinese economy. The next batch of policy announcements is likely to be housing policy relaxation at the local government level.” A 25 per cent plunge in new building construction helped drag economic growth in the first three months of this year to 7.4 per cent, down from 7.7 per cent in the previous period and below the 7.5 per cent official target, the National Bureau of Statistics (NBS) said on Wednesday. It was also the slowest growth in six quarters, adding pressure on Premier Li Keqiang to avert a deeper slowdown. While the government on Wednesday announced more support measures including lower reserve requirements for rural banks, Mr Li reiterated that the nation was not considering stronger stimulus for Asia’s largest economy. The lower reserve requirements at “qualified” rural banks build on plans announced earlier this month for railway and housing spending and tax breaks for companies to support expansion. Wednesday’s measures “are small in magnitude in terms of their macroeconomic impact, but send a clear signal of loosening intention,” Goldman Sachs analysts said. Bank of America analysts estimated that a cut of 1 percentage point in rural lenders’ reserve ratios may release as much as 78 billion yuan (S$15.7 billion) in liquidity. The value of property sales in the first quarter fell 5.2 per cent from a year earlier and unsold completed properties jumped 23 per cent from a year earlier to 521.6 million sq m (5.6 billion sq ft), the NBS said. NBS spokesman Sheng Laiyun said that “relevant departments will closely follow the changes in the property market and improve property macro-control policies accordingly”, responding to a question on whether housing market policies would be relaxed. The property market has had new developments including falling prices in some third- and fourth-tier cities, he added. UBS analysts estimate that the real estate industry accounts for more than a quarter of final demand in the Chinese economy when property-generated needs for goods such as machinery and instruments, chemicals and metals are included. “For now, I think the government will hold its breath, but if the sector were to continue to weaken — and I think most forward-looking indicators suggest it will — I would expect the government’s nerve not to hold,” said Mr George Magnus, an independent economic adviser to UBS. Measures that the government may take include “monetary easing, including possibly further yuan depreciation, and a relaxation of some past restraints on property purchases and transactions”, he added. Hong Kong-based JPMorgan Chase China economist Grace Ng said while there may be some degree of easing in places where the housing market is under pressure, it is unlikely to evolve into a national policy shift. Some of the cities that had imposed home purchase restrictions, such as Wenzhou, Xuzhou and Zhoushan, have already been tweaking the measures since the second half of last year to boost sales, Centaline said. In Beijing, existing home prices fell 3.8 per cent from the March average to 31,265 yuan a square metre in the first 10 days of April, according to data from Bacic & 5i5j Group, the city’s second-biggest property broker. Hong Kong-based Citigroup China economist Ding Shuang said the government could buy housing inventory to use as low-income apartments. “Property developers, especially smaller ones, are very vulnerable,” he said. “If they cannot sell their inventory, they may default and the non-performing loan ratio could increase and bond defaults could also increase.” Source : Today – 18 Apr 2014


CapitaCommercial Trust’s distributable income up 7.6% CapitaCommercial Trust’s (CCT) distributable income rose 7.6 per cent on-year to S$59.9 million in the first quarter, thanks to higher revenue contribution from most of the properties in its portfolio and lower interest expenses. This translates into an estimated distribution per unit of 2.08 cents, said the manager of the trust, CapitaCommercial Trust Management. The trust’s gross revenue for the quarter was S$64 million, up 3.2 per cent from S$62 million a year ago. The growth was attributed to higher contribution across most properties, notably from Six Battery Road and Capital Tower, due to better occupancy and positive rent reversions. Chairman of CCT Management Kee Teck Koon said the “good results” were enabled in part by its asset enhancement initiatives, active leasing efforts and disciplined capital management. Committed occupancy rates at the trust’s properties reached close to 100 per cent as of the end of last month, up from 98.7 per cent at the end of December, he added. Construction of CapitaGreen, a Grade A office building in which CCT has 40 per cent interest, is on track to be completed by the end of this year. CapitaGreen has secured commitment of about 12 per cent of net lettable area from Cargill, Bordier & Cie (Singapore) and an international gym operator. Meanwhile, improvement work at Raffles City Tower is 97 per cent completed, while that at Capital Tower is 25 per cent completed. Source : Today – 18 Apr 2014


Developers cautious in Prince Charles Crescent tender In another sign that the repeated rounds of cooling measures and loan curbs are taking their toll on the property market here, developers showed greater caution in their bids for a private residential site at Prince Charles Crescent in Redhill. The tender for the 268,713 sq ft site attracted seven bids at the close yesterday, with the highest offer by UOL Venture Investments and Kheng Leong Company at S$463.1 million. That translates to S$820.65 per sq ft per plot ratio (psf ppr), an amount analysts say is conservative when compared with previous transactions within the area. The site, which has a maximum permissible gross floor area of 564,308 sq ft, is located near the Alexandra Canal and Redhill MRT Station and will be able to yield about 655 units, said the Urban Redevelopment Authority. “Today’s tender result indicates that the multiple government interventions in the property market have finally resulted in cooling the residential land sales market,” said Mr Nicholas Mak, Executive Director for Research and Consultancy at property firm SLP International. The top bid appears cautious compared with the two most recent land sales in the vicinity, which went for well above S$900 psf ppr, Mr Mak added. Sold in 2012, the two sites were transacted before the seventh round of cooling measures and the Total Debt Servicing Ratio framework were introduced in January and June last year. These measures have also had an effect on sales of new private homes, with developers selling 480 units last month, compared with 739 in February and 2,793 in March last year. “The growing caution among developers is not surprising, given that the private residential market has softened considerably since a year ago,” Mr Mak said. Mr Ku Swee Yong, CEO of real estate agency Century 21, agreed that developers who bid for the site took a more “conservative stance”. Besides the current weak sentiment, bidders may have priced in competition in the area as well. “There are unsold and unlaunched units in that location and also a few more parcels there that will be released (for sale) in the next two years or so, so there will be competition for buyers … I think this bidding is reflecting a launch price of around S$1,300 to S$1,400 psf, which is lower than the current rate in that area,” he said. “So, even though there are a lot of good attributes about (the site) and that’s why participation is still strong, the bids are all coming in lower than expected.” Source : Today – 17 Apr 2014


New private home sales plunge in March Sales of private homes by developers in Singapore fell 35 per cent in March from February, data compiled by the Urban Redevelopment Authority (URA) showed on Tuesday. Developers only managed to sell 480 units last month, down from 739 units in February. From a year ago, new private home sales plunged 83 per cent from March 2013′s 2,793 units. Transactions in Singapore’s housing market have fallen sharply over the past year, hurt by measures to cool the residential sector. According to flash estimates from URA, private home prices fell 1.3 per cent quarter-on-quarter during the first three months of 2014 after declining by 0.9 per cent in the last three months of 2013. Source : Channel NewsAsia – 15 Apr 2014


CapitaLand plans to take CapitaMalls Asia private through S$2.22 a share offer Southeast Asia’s largest developer CapitaLand has announced plans to take its shopping arm private. CapitaLand is offering S$2.22 per share for all remaining shares in CapitaMalls Asia (CMA) that it does not already own, thus valuing the planned purchase at more than S$3 billion. CapitaLand said it wants to sharpen its competitive edge in the integrated development space where it sees opportunities, particularly in China. One of several integrated projects developed by CapitaLand is Raffles City. The development, located in Singapore’s prime downtown area, comprises offices, hotels and retail space. It was injected into CMA when the shopping malls operator was listed in 2009 in what was then one of Singapore’s largest ever initial public offerings. CapitaLand still holds 65.3 percent of CMA but the developer said it is changing its course to seize growing opportunities in the integrated development segment, especially in China. CapitaLand President and Group CEO Lim Ming Yan said: “The IPO gave CMA the opportunity with additional capital to grow its business. We have reached the stage over the recent two to three years, where we see a lot more opportunities in integrated developments. These are developments where for pure play shopping mall operators and owners, it’s hard to operate. CMA will find it awkward to go in where there are residential, office components. But at the same time, for CapitaLand to go into some of these projects, we can’t do it without CMA being a part of it.” CapitaLand said it sees growing opportunities in the integrated development sector – particularly in China where ongoing urbanisation is taking place. Mr Lim said: “China is a market that is a lot bigger. It’s also at stage where the growth is a lot faster than Singapore, which is at a different stage of development. Singapore is more mature, and of course, in terms of size, it’s a much smaller market. Overtime, we’ll see more of these opportunities in China than in Singapore.” CapitaLand said its offer price of S$2.22 in cash for each share is a premium of 27 percent over CapitaMalls Asia’s one-month volume-weighted average price. The offer price is also 20.7 percent higher than CMA’s net asset value per share as at 31 Dec 2013. The developer added that the deal will simplify the Group’s structure significantly and allow it to get an edge in the increasingly competitive integrated development space. Mr Lim said: “The amount of process that we need to go through to get, for example, CapitaLand to co-invest with CMA in Westgate is actually quite tedious. In a competitive situation, we would want the team to focus on getting the deal rather than to focus on making sure they fulfil all the compliance.” CMA manages 105 shopping malls, earning 43 percent of its revenue in 2013 from China, 32 percent from Singapore and most of the rest from Japan and Malaysia. Source : Channel NewsAsia – 14 Apr 2014


Govt mulls allowing some couples to co-rent larger PPHS flats The government is considering allowing some couples to co-rent larger flats under the Parenthood Provisional Housing Scheme (PPHS), National Development Minister Khaw Boon Wan said. He said more than 900 of the 1,150 PPHS flats have been taken up, but there are still some larger flats available. He added the number of applications per month peaked at 409 last September but has since dropped to 81. Mr Khaw was responding to a parliamentary question from Hougang SMC MP Png Eng Huat, on whether the National Development Ministry would consider lowering rental rates to encourage take-up for the bigger flat types. Mr Khaw said PPHS rents are 40 to 60 per cent lower than market rents in the vicinity. He added the cost of providing PPHS flats includes retrofitting them before they are rented out, as well as maintenance costs. PPHS was extended to all married and fiancé-fiancée couples who booked uncompleted Build-To-Order flats last year. Separately, Mr Khaw said the ministry does give priority to families with children in their new flat applications. This is done through the Third Child Priority Scheme and the Parenthood Priority Scheme. Mr Khaw said: “Under both schemes, a fixed quota of flats is set aside for these families. This ensures a better chance of success, as compared to giving them more ballot chances. “HDB also does not restrict the priority given to families with children to only four-room or larger flats. This is to allow them to choose the flat type that best suits their budgets and needs.” Source : Channel NewsAsia – 14 Apr 2014


Computer-generated value: Does it help or mislead? The Housing and Development Board (HDB) last month revised its resale flat policy to require buyers to sign the option to purchase before getting a valuation, effectively consigning the concept of cash-over-valuation (COV) to history. As expected, there has been some confusion since, as buyers and sellers look for new ways to find the “market price” of resale flats offered for sale. Some industry players quickly sought to provide alternatives to the COV to plug the information gap. They feel that the COV, under whatever new name it may be called, will remain as it fulfils a real market need. Enter the machine-generated value. There are tools in the market that purport to estimate the value of a property with a high level of accuracy based on the past transacted prices of comparable units. However, its introduction has been controversial. Because it is computer-generated, valuation purists are up in arms. If a machine can replace a valuer, where is the professionalism? Can you sue a machine for negligence for generating a wrong value? Of course, there are caveats on its use and exclusion clauses, but few pay attention to them. A recent test of several such tools showed the estimated values generated were close to the actual valuation for some properties, but there were also many that differed by wide margins, said a media report. Proponents of these machine-generated values maintain that they have a high level of accuracy as the results are close to the figures arrived at by human valuers in the majority of cases. However, the shortcomings of machine-generated values are obvious. For example, a machine cannot tell whether a particular flat faces a rubbish dump. It cannot tell whether it has an odd-shaped layout nor can it judge the quality of the renovation. It cannot tell whether there is any obstruction of view even if the flat is on a high floor or for that matter, appreciate the views the unit may offer. Even if most of the estimated values generated by the machine are close to those provided by valuers, the timing of the valuation has now changed. The valuer now has the benefit of the flat being exposed to the market for a decent length of time and only needs to affirm whether the premium placed on some of the flat’s features are justifiable or unreasonably high. If most valuations end up close to the actual prices, what added value does the machine-estimated figure provide? Aren’t high COVs the market’s real concern? As properties are not perfect substitutes for each other, the estimated values for some “special” flats without the benefit of a site visit can be off the mark by quite a margin. Are you willing to take that chance? Machine-estimated values will be most useful and beneficial in cases where the flat concerned is a very popular unit. This is because such units often attracted very high COVs in the past and it would help a potential buyer immensely to know how much cash he or she will need to have. Yet, if you examine all flats sold with very high COVs in the past, you will notice they all came with unique features that a machine cannot factor into its computation. If machine-generated values cannot help in such situations, where can they contribute? If they are redundant in most cases or misleading in others, we would be better off without consulting such values in the first place. All right, so estimated values are not useful now, but what happens when the market starts to shoot up again? Then, even a small lag can be significant depending on how fast selling prices are submitted and updated in the HDB database and when the actual valuation is conducted. My own assessment is that this will not happen. This is because new HDB flat prices have been de-linked from resale ones for some time. This is an important point to note because if new flat prices remain stable, resale ones cannot stray too far before buyers factoring in value-for-money buy directly from the HDB. The de-linking of prices is an in-built automatic stabiliser. So, if you are a worried buyer or seller, whether now or in the future, let me assure you that the COV will not make a return in whatever form. By Colin Tan – Director of Research & Consultancy at Suntec Real Estate Source : Today – 11 Apr 2014


Resale volume of private non-landed homes hits new high in March SRX data shows resale volume of private non-landed homes has rebounded 82.6 per cent month-on-month in March, the highest resale volume since October 2013. An estimated 451 resale transactions were registered in the month of March. On a year-on-year basis, resale volume still posted a 22.5 per cent drop compared to 582 units resold in the same month of last year. But resale prices remained flat. Overall resale prices of non-landed private homes inched up by 0.2 per cent in March, following a 3.1 per cent drop in February. On a regional basis, prices in Rest of Central Region (RCR) rose by 1.3 per cent, followed by a 0.3 per cent gain in the Core Central Region (CCR). However, prices in Outside Central Region (OCR) continued to soften by 0.1 per cent. Rental volume for non-landed homes rose 7.4 per cent year-on-year. According to transaction data from SRX member companies, an estimated 3,087 units were rented in March, up 27.8 per cent from February’s 2,416 rental transactions. On a year-on-year basis, rental volume also improved by 7.4 per cent from the 2,875 rental contracts signed in last year’s March. Rental prices in March fell 0.9 per cent to reach a 27-month low since December 2011. Based on the non-landed private residential rental SPI sub-index, overall rental prices in March saw a further drop of 0.9 per cent, after the same amount of weakening was seen in February. Compared to the peak rental price observed in January 2013, rents had since come down by 5.7 per cent. SRX said all three regions saw sustained dives in rental prices in March. RCR’s rents declined 1.4 per cent. Rents in the CCR and OCR regions dropped by 0.6 per cent and 0.7 per cent respectively. Rental prices continue to decline with record supply. This year, more than 17,000 private residential units are expected to be completed — the highest since URA records began in 1996, and 75 per cent higher than the long term average in the last 18 years. And for the first time, SRX has published a forward indicator for the private resale market – following the introduction of Transaction over X-value (TOX) in the HDB resale market. SRX said the median Transaction over X-value (TOX) for non-landed homes continued to fluctuate in the negative region, ending at S$13,112 in March. Source : Channel NewsAsia – 9 Apr 2014


Buying activity in private residential market remains tepid in Q1 Buying activity in Singapore’s private residential market remained tepid in the first quarter of this year. Property consultancy DTZ said in its latest report that only 906 private homes changed hands in the secondary market in the first quarter. This was a 34 per cent quarter-on-quarter decline or 62 per cent decline year-on-year. DTZ attributed the slower activity to buyers becoming more selective, with some holding back their purchases on expectation of further price declines. It said this was especially so after the Finance Minister said during his budget speech that it was too early for the government to start relaxing property-cooling measures. However, DTZ noted that transactions in the Good Class Bungalow (GCB) segment picked up in the first quarter as buyers with deep pockets returned to the market. Eight GCBs have changed hands so far this year, for a total of S$225.8 million. This was higher than the five GCB transactions amounting to S$134.6 million in the second half of 2013. DTZ said the GCB buyers are mostly buying for their own occupation and they are less affected by property-cooling measures such as the total debt servicing ratio (TDSR) and Additional Buyer’s Stamp Duty (ABSD). The property consultancy said the pullback in overall buying activity has caused resale prices of private non-landed residential homes to soften further in the first quarter. It reported that resale prices of luxury condominiums declined by a further 2.0 per cent, following a 2.0 per cent quarter-on-quarter drop in the fourth quarter of 2013. Meanwhile, resale prices of prime freehold condominiums fell another 1.5 per cent quarter-on-quarter and suburban leasehold condominiums declined 1.1 per cent on-quarter. Within the landed segment, resale prices across all areas remained flat in the first quarter after a slower year-on-year growth in 2013. Source : Channel NewsAsia – 8 Apr 2014


Tuas industrial sites attract healthy interest The tenders for the first two industrial land parcels in the Industrial Government Land Sales (IGLS) Programme for the first half of this year closed on Tuesday with healthy interest, although the offers were relatively conservative, analysts said. The tender for Plot 45 at Tuas South Street 6 attracted eight bids, with the highest bid from SH Design & Build at S$5.3 million or S$70.17 psf ppr. Down the road, the corner parcel at Plot 47 Tuas South Street 6 received seven bids, with the top offer from Soon Hock Investment at S$5.1 million or S$68.00 psf ppr. “While the relatively high number of bidders reflects a healthy interest from end-users for industrial land, the bids submitted are fairly conservative, especially as the previous parcels in the vicinity from the 2013 Industrial Government Land Sales Programme were sold for more than S$80 psf ppr,” said Mr Nicholas Mak, Executive Director of Research & Consultancy Department at SLP International Property Consultants SH Design & Build’s bid for Plot 45 is 9.3 per cent higher than the second top bidder, signalling its interest in obtaining the site and possibly amalgamating it with an adjacent plot it acquired in February last year. Source : Today – 8 Apr 2014


Woodlands commercial site draws strong interest A government tender for a commercial site in the Woodlands Regional Centre drew strong response, with a consortium that included Far East Organization submitting the highest bid of S$634 million, the Urban Redevelopment Authority (URA) said on Tuesday. The bid by the consortium comprising Far East Organization, Tannery Holdings and Sekisui House for the Woodlands Square site works out to around S$906 per square foot per plot ratio, said Colliers International’s director of research and advisory Chia Siew Chuin. “Being the first commercial site predominantly for office use in Woodlands, the site is expected to serve as the catalyst to kick-start the development of the Woodlands Regional Centre,” she said. Colliers said the site — which is near the Causeway Point shopping mall — is well located as it is just a stone’s throw away from the Woodlands MRT station where the existing North-South line and the future Thomson line will meet. URA said the site attracted eight bids — with the second highest at S$620.8 million and the lowest at S$308 million. Source : Channel NewsAsia – 8 Apr 2014


Singapore factory, warehouse rents dip in Q1 Rents for factories, warehouses and other industrial spaces in Singapore fell slightly during the first quarter of 2014 as firms became more cautious about expansion, Colliers International said on Tuesday. The real estate consultancy estimated that rents for ground floor factory and warehouse space fell 0.8 per cent in the first quarter from the last three months of 2013. For upper floor units, the decline in rents was as high as 1.8 per cent. Rents for independent high-spec space declined by 0.3 per cent. “Firms appeared to be channelling resources towards driving productivity instead of business expansion, taking heed from the government to increase productivity amid a tight labour market,” said Brenda Ong, executive director of industrial services, project and leasing at Colliers. The drive to reduce costs had, in some instances, led to the relinquishing of space, she added, citing British bank Barclays which has announced plans to give up space at Changi Business Park. Colliers predicted that rents could fall further this year due to the large supply of new industrial space coming onto the market. For the whole of 2014, rents of independent high-specs space could soften by up to three per cent, while prime conventional industrial space could experience rental correction of up to six per cent. But business park rents are likely to hold relatively steady in 2014, as downward rental pressure on older premises and developments with higher vacancies would likely be mitigated by the higher achievable rents for newer and recently renovated business park developments. Source : Channel NewsAsia – 8 Apr 2014


Tuas West most viable site for planned rail terminal, say experts Tuas West will be the most viable location for the proposed high-speed rail terminal in Singapore, say experts. This is due to its proximity to Malaysia and greater availability of space. On Monday, Prime Minister Lee Hsien Loong named three possible locations — Tuas West, Jurong East and the city centre — for the terminal of the planned high-speed rail link between Singapore and Kuala Lumpur. Tuas West is currently an industrial area, with ample space for more development. Experts said that means a higher chance to locate Singapore’s end station of the high-speed rail. Proximity to Malaysia is another plus point for Tuas West. Prof Lee Der-Horng, from the Department of Civil and Environmental Engineering at the National University of Singapore, said: “As we know Jurong East is further into Singapore, so we have to consider what kind of connection we want to have for this high-speed rail connection. Should we go by the tunnel, or should we go by the ground line? “By considering the overall construction cost and also the time involved, to put it at Tuas West definitely will save construction costs and definitely shorten the construction time.” Experts said the end station’s connectivity to the rest of Singapore must also be examined. The government had earlier announced the Tuas West MRT extension, which will see the existing East-West Line being extended. It is set to be completed in 2016. Should the end station be located at Tuas West, some property analysts say there could be potential to develop several shopping malls or commercial buildings in the area to also cater to the needs of travellers. But whether or not the human traffic will be enough to sustain those businesses is another factor to consider. So another option may be to have some shops or food outlets within the station itself. Mr Nicholas Mak, executive director of Research & Consultancy at SLP International Property Consultants, said: “In Tuas West at the moment, there is no existing population catchment. So next to the malls, the government may actually have to think about rezoning some of the industrial land for residential development.” As for Jurong East, experts said its built-up location may pose a challenge, especially since the station and possibly a depot for train maintenance will take up a large area. This is despite current facilities in the area bringing convenience to travellers. They said the chances for the station being in the city centre are even slimmer due to the lack of space and construction costs. The high-speed rail link is expected to be completed in 2020. Source : Channel NewsAsia – 8 Apr 2014


Frasers Centrepoint Trust to buy Changi City Point for S$305m Changi City Point at Changi Business Park looks set to become the next shopping mall to be acquired by a real estate investment trust. Frasers Centrepoint Trust (FCT) said on Tuesday it has entered into a conditional sale and purchase agreement to buy Changi City Point from Ascendas Frasers Pte Ltd for S$305 million. Ascendas Frasers is a 50-50 joint venture between Ascendas Development and Frasers Centrepoint Ltd, which is FCT’s sponsor. Changi City Point — a three-storey mall with one basement level — is known for its various factory outlets. It is located near the Singapore Expo convention and exhibition centre and the Singapore Expo MRT station. Source : Channel NewsAsia – 8 Apr 2014


HDB resale prices up 0.3% in March HDB resale prices rose slightly by 0.3 per cent in March compared to February, according to a flash report by the Singapore Real Estate Exchange (SRX). The increase is led by smaller flats — 3-room flats rose 0.5 per cent and 4-room flats rose by 0.8 per cent. But prices of bigger flats — both 5-room and executive flats — continued to soften by 0.2 per cent and 0.7 per cent respectively. On a year-on-year basis, prices in March 2014 is down 4.9 per cent from the same period last year. Jeremy Lee, co-founder of SRX, said: “Bigger units face more challenges in today’s market. Buyers can only use up to 30 per cent of their monthly income to service a HDB loan, which significantly reduces their ability to afford bigger flats. “Consequently, reduced demand drives prices down for bigger HDB flats compared to smaller flats with a smaller price quantum.” However, resale volume saw some recovery. According to Housing and Development Board (HDB) resale data compiled by SRX, 1,319 HDB flats were sold in March’s resale market, a close to 40 per cent month-on-month increase from Feb 2014′s 951 units. It is also the highest monthly volume observed since last October’s 1,393 resale cases. On a year-on-year basis, March’s resale volume is close to the 1,356 units resold in the same month of last year. “On the demand side, prices have become more affordable after a 5 per cent drop from last year’s peak. The policy change to shift the focus away from COV is likely to result in a more manageable cash outlay for most buyers. These factors can contribute to more buyers coming back to the resale market. “On the supply side, there will be ample sellers from HDB upgraders that will collect their keys this year to their new BTO flats. These upgraders will need to sell off their old flats within six months from receiving the keys. Therefore, downward pressure on prices will persist until the demand-supply equilibrium is restored,” said Mr Lee. Rental volume also rose to its highest in the past eight months. An estimated 1,627 HDB flats were rented in March 2014. Despite an 8.6 per cent drop year-on-year, March’s rental volume was the highest in the past eight months. Overall median rental prices remained flat at S$2,300 for the fourth consecutive month. SRX said overall HDB prices continue to face downward pressure as many buyers are paying at value below recent transactions, or what is known as the X-Value. More than 98 per cent of all HDB transactions in 2014 have their valuation prices fall within 10 per cent of the X-Value. Source : Channel NewsAsia – 7 Apr 2014


Buyers’ market? More like nobody’s market Newly-released government flash estimates for housing prices in the first three months of the year show that they have continued their downward trend. Private home prices fell a further 1.3 per cent from the previous quarter, while Housing and Development Board resale prices sank another 1.5 per cent. The downtrend was no surprise, as updates from other real estate bodies providing monthly data have been registering mostly declines across most market segments. While the latest data did not include sales volumes, other sources have shown that the number of transactions has been coming down. So how do we treat such price trends arising from vastly reduced sales volumes? Carefully, as they may not be representative of the actual market. There is no doubt that the underlying market sentiment is weak as successive rounds of cooling measures and policy moves continue to bite. The sentiment has been made worse after new United States Federal Reserve Chair Janet Yellen last month made more specific comments about the timing of an interest rate rise than she probably intended. In response to a question at her maiden post-policy meeting news conference, she suggested that a rate hike will take place around six months after the winding down of the bond-buying programme, earlier than investors had expected. With US rates leading the costs of funds across the world, markets were sold off. With the increased pressure, it is only logical that anyone who needs to sell a property now will have to give discounts to attract prospective buyers, however small. Without this, the current state of affairs — of small price drops and slow sales — is likely to persist far longer as the majority of buyers and sellers continue to stay on the sidelines. It is premature to describe the market as a buyers’ market. Yes, buyers have lots more choices and developers’ are courting them more actively through agents. Yet, if it is truly a buyers’ market, why aren’t they getting it all their way? Why aren’t more buyers benefiting from the so-called advantage by paying substantially lower prices? Only a small number seem to be doing so. In truth, the market is in a stalemate, notwithstanding declining prices. What is the impact of a 1.3 per cent decline on a million-dollar property? Only S$13,000. You can easily get a much lower price by selecting a lower-floor unit. Unless most of the sales were mortgagee sales forced upon owners by lenders, I would say the selling — for private housing, at least — is largely profit-taking by investors. Statistics from the Monetary Authority of Singapore show that there is a lot of cash sloshing about in the economy. On that basis alone, it is hard to see the current sales by owners as originating from weakness. For those who want to see a proxy struggle between buyers and sellers, they can find it in the leasing market. Older properties are losing tenancies quickly to newly-completed ones, but landlords of the older units are not panicking just yet. For the majority of these landlords who bought their properties many years ago and at much lower prices, it is simply a matter of lower rental income and weaker yields. The time to panic will come one day, the timing of which remains to be seen. The threat hanging over the housing market is that interest rates will rise and rise significantly in the near future. They have actually risen, but only marginally as lenders beef up their cash resources. How long has the market been waiting? It has been nine months now from the time the Fed first announced its decision to begin tapering its bond-buying programme. Most investors have taken their positions and nothing, it seems, has altered significantly since to make them change their minds. In the meantime, the stalemate will continue. Let us brace ourselves for a truly boring property market. By Colin Tan – Director of Research and Consultancy at Suntec Real Estate Source : Today – 4 Apr 2014


Hong Kong private-home completions set to hit 10-year high The number of private-home completions in Hong Kong this year will reach its highest since 2004, said the government yesterday, further pressuring developers after a series of cooling measures forced them to cut prices. The number of flats forecast for completion this year is around 17,610 — a 113 per cent increase from a year earlier, said the Rating and Valuation Department. The government said close to 61 per cent of completions would be in the New Territories district close to mainland China, where major developers such as Sun Hung Kai Properties and Cheung Kong Holdings are very active. With the surge in new home supply, competition to lure buyers could trigger even steeper discounts and further eat into developers’ margins in one of the world’s most expensive housing markets, said analysts. Hong Kong developers enjoyed gross profit margins as high as 40 per cent in 2009 and 2010, Ms Nicole Wong, CLSA’s regional head of property research, was quoted by the South China Morning Post as saying. However, for projects on sites that developers bought in the past few years, margins have shrunk to between 20 per cent and 25 per cent, she added. A UBS report in February also said profit margins for the city’s six major developers would fall from 36 per cent in 2012 to 20 per cent next year and 14 per cent in 2016. Hong Kong private-home prices have more than doubled — rising nearly 120 per cent — since 2008. Despite a series of steps to curb prices, such as higher stamp duties and mortgage restrictions since October 2009, prices for private properties rose 8.6 per cent last year, said the government. Source : Today – 5 Apr 2014


Private home prices in city fringe could pick up soon: analysts Private residential property prices have been subdued, following cooling measures by the government last year. Overall, they are expected to remain muted this year. But some analysts have said prices of private homes in the city fringe could start picking up soon. This is due to new project launches in attractive locations like Commonwealth Avenue, Kim Tian Road and Prince Charles Crescent. Real estate agency OrangeTee expects units at these developments to be priced upwards of S$1,600 per square foot (psf). Prices of non-landed private homes in the city fringe — or rest of central region (RCR) — took a sharp hit in the first quarter of this year, falling by 2.8 per cent, according to estimates from the Urban Redevelopment Authority. Analysts said the drop was largely due to a lack of new launches and sales of units from existing projects which had lower psf pricing. For example, according to caveats lodged, OrangeTee said Bartley Ridge sold 21 units in the first quarter at a median price of S$1,183 psf. However, property analysts said there could be an uptick during the current quarter, as new projects are released. Christine Li, head of research and consultancy at OrangeTee, said: “With new launches coming up at RCR, I expect the price to rebound, probably slightly from Q1 level. “Looking at the sites in the pipeline, the locations, they definitely command a premium. The price point could easily be S$1,600 and above, given that developers have paid high land prices for these three sites.” Ku Swee Yong, CEO of Century 21 Singapore, said: “If they (developers) plan to move project sales fast, let’s say to achieve 50 per cent sell out within the first two months, they would have to (be) priced at 5 to 10 per cent below current prices, which means pricing from around S$1,300 to S$1,400 psf for the starting price. Kim Tian may have to start higher, S$1,600 plus or even S$1,700 upwards.” The three projects include Keppel Land’s 500-unit Highline Residences at Kim Tian Road, and The Crest, a 469-unit development by Wing Tai Holdings at Prince Charles Crescent. Both developers told Channel NewsAsia that the projects are still targeted to be launched this quarter. Wing Tai added that the showflat may be ready by the end of the month. The third project is the 845-unit development by Hong Leong, located opposite Queenstown MRT station at Commonwealth Avenue. Analysts said the Kim Tian Road site has the highest land cost at S$1,163 psf per plot ratio (ppr), followed by the Prince Charles Crescent plot at S$960 psf ppr and around S$883 psf ppr for the site at Commonwealth Avenue. Analysts said that since the introduction of loan curbs last year, home buyers have become more price sensitive, and in order to move units, developers have to ensure that their projects are priced more competitively compared to other developments in the area, and that probably means taking a smaller profit margin. Market watchers also expect units to get smaller to keep the overall price quantum affordable. Citing marketing materials, OrangeTee said that the Commonwealth Avenue project will comprise 612 one- and two-bedroom units — that is over 70 per cent of the total units in the development. OrangeTee added that the largest apartments at the project are four-bedroom units spanning some 1,300 square feet. Source : Channel NewsAsia – 2 Apr 2014


Going big: Warehouse retailing in Singapore A new warehouse retail store, Big Box, is set to open soon in Jurong East. Warehouse retailing in Singapore was initiated by the Economic Development Board in 2004, through the ‘Warehouse Retail Scheme’. The pilot programme was discontinued after three years, as new government schemes to support productivity improvements were introduced soon after, but it has allowed the likes of Ikea and Courts to set up store here. Warehouse retailers reap the benefits of lower rent, particularly in the current environment where business costs are rising. Retail development Big Box was the fourth and last to be approved under the Warehouse Retail Scheme (WRS). The initiative was designed to allow the use of industrial land for retailing and warehousing — enabling retailers to save on distribution and rental costs incurred when operating in commercial malls. For small- and medium-sized enterprises (SMEs), this can be beneficial. The Big Box operators are working together with Infocomm Development Authority and SPRING Singapore to develop the mall into a hub for SMEs to showcase their products. “Big Box can facilitate showcasing SME products and also provide the avenue for the consumers to test their products,” said Julia Tong-Sng, deputy CEO of Big Box. “By doing so, the SMEs will be able to reduce their business costs and improve their productivity. We will have a lot of technological base platforms, like drive-through, m-commerce, and e-commerce to assist them to bring down their business costs.” The other three warehouse retail stores under the scheme are owned by retailers Courts, Ikea, and Giant, located in Tampines. As these stores are not centrally located, industry watchers say it is key that they have more to offer to keep consumers coming in. For example, they may offer lower prices or products which cannot be found elsewhere, said S Ramaswami, associate professor of marketing (education) at Singapore Management University. He added: “Singapore is a very saturated retail market. People have seen and been to these stores many times.” “The fact that it’s a new store will invite the traffic once at least; even if it’s far away they’ll come once to see it. “If they’re going to take all the effort to travel to Tampines, they’re going to look for lower prices.” Courts said its Tampines Megastore attracts lower shopper traffic compared to its mall-based stores. Yet, it said the lower sales per square foot is compensated by the lower rental cost per square foot. For shoppers, industry observers estimate that prices in warehouse malls may be discounted by up to 15 per cent. Courts said one advantage of having a large space is that it can offer a more extensive range of products at its megastore — under the same roof as its warehouse. It has been working on fitting even more products into that space. “We renovated the megastore market hall less than six months ago. The aim of that was productivity and trying to fit more products into that space,” said Tim Luce, country CEO of Courts Singapore. “We’ve improved productivity by about 25 per cent that means a lot more stock keeping units in the same area for the space.” Apart from offering more products at lower prices, big box retailers say they are attracting customers through different services. Some have eateries and entertainment facilities on their premises to cater to families who decide to spend the day there. Source : Channel NewsAsia – 5 Apr 2014


Capitol Mall opens at year-end Over 40 per cent of the retail mall at the Capitol Singapore integrated development has been committed so far, ahead of its opening at the end of the year. At its topping out ceremony on Thursday, developer Capitol Investment Holdings said the mall will have new-to-market brands and new concepts — which will be announced at a later date. Capitol Investment Holdings is a joint venture company, comprising Perennial Real Estate Holdings, Pontiac Land Group and Osim’s Mr Ron Sim. With a net lettable area of over 130,000 square feet, the retail space is much smaller than other malls in the vicinity — like Raffles City or Suntec City. But the developer said the mall will be positioned to serve a niche market, targeting the upper-middle segment and above. Meanwhile, of the 39 high-end apartments at the Eden Residences Capitol, about 40 per cent of units have been booked, with a unit sold recently for over S$11 million. The developer said it is unfazed by the impact of recent property-cooling measures. Pua Seck Guan, vice chairman and president of Perennial Real Estate Holdings, said: “Our main business is not to sell the residential units — this is a very small component of our project, so it doesn’t bother us. “We are happy to achieve 40 per cent sales, and we have achieved what we want to achieve. We want to hold the balance of the project for long-term investment purpose.” The residential component forms about 27 per cent of the entire Capitol Singapore development. The hotel accounts for 29 per cent of the development, while the retail mall and theatre take up about 38 per cent and 6 per cent of the space respectively. Source : Channel NewsAsia – 4 Apr 2014


Weak property market to further drive down prices After a tumultuous final quarter last year, Singapore’s housing market continued to weaken in the first three months this year as prices in both the private and public sectors fell and analysts warned that there will not be any reversal in fortunes as long as the Government’s cooling measures stayed in place. Private home prices slid 1.3 per cent in the January-to-March period from the previous three months, accelerating from the 0.9 per cent fall previously, the Urban Redevelopment Authority (URA) said in its preliminary first-quarter report yesterday. In the public segment, the Housing and Development Board (HDB) flash report showed the resale market extended its decline to a third consecutive quarter, with prices falling by 1.5 per cent in the last three months, matching the pace in the final quarter last year. This comes at a time when the demand for Build-to-Order (BTO) flats has weakened, with the overall application rate falling to 2.8 in the latest exercise, down from January’s rate of 4.1. Despite the declines, prices of both HDB and private homes are about 37 per cent higher than they were when the current round of cooling measures was first imposed in September 2009. Mr Ku Swee Yong, Chief Executive of real estate agency Century 21, said: “I don’t think we are at the bottom yet. There’s still room for falls because the property curbs have taken out a lot of demand since late 2009 when they started.” “Over the last four years, we have seen big and small changes to the policies, so I think we are probably seeing some fatigue in the market now,” he added. In the private housing market, condominium prices in the Core Central Region (CCR), or city centre, fell 1.3 per cent in the fourth straight quarter of decline. In the Rest of Central Region (RCR), or city fringes, prices declined 2.8 per cent, while those in the Outside Central Region (OCR), or suburban areas, dipped 0.3 per cent, the URA data showed. “The decline in private home prices for two successive quarters is in line with the slower transaction activities … and is an evident sign that the multiple dosages of the Government’s cooling measures and particularly the Total Debt Servicing Ratio (TDSR) have been effective in arresting price growth,” said Ms Chia Siew Chuin, Director of Research and Advisory at property firm Colliers International. She added that the TDSR framework introduced last June resulted in tighter financing rules, which restricted potential buyers’ budget and led to steeper price declines in the CCR and RCR. The framework requires lenders to ensure that the mortgage does not push a borrower’s total debt repayments above 60 per cent of his or her monthly income. Mr Mohamed Ismail, Chief Executive of PropNex Realty, said the weakening HDB resale market might also hurt demand for private housing. “The demand for private homes might also be affected by the drop in HDB resale prices. The smaller gain achieved from the sale of their HDB flat will limit their budget for their new private property and may cause some to put their plans on the back burner because the potential profit is insufficient to allow them to upgrade,” he said. And the HDB resale market will continue to come under pressure as buyers are constrained by the tightening of the Mortgage Servicing Ratio to 30 per cent last August and the reduction of the maximum term to 25 years for HDB loans and 30 years for bank loans. Rules requiring new permanent residents to wait three years before they can purchase public housing, introduced at the same time, are also expected to curb demand. The PropNex CEO expects HDB resale prices to fall by 6 to 8 per cent this year. The private residential market will likely see a smaller decline of not more than 5 per cent, said Ms Christine Li, Head of Research and Consultancy at property agency OrangeTee, as developers may not cut prices of new launches soon. “Prices of new launches will still hold because developers are not in a hurry to cut prices significantly — they still have time to market the projects. And they paid high land costs, there’s no reason for them to sell at a loss yet,” Ms Li said. “But overall, I think the market has just started tapering off. We feel that because the measures are not tweaked or removed, financing is still very much restricted, the pool of eligible buyers is shrinking so liquidity in the market is a problem. If the new rules are not relaxed, I think there’s further downside to the prices,” she added. Source : Today – 2 Apr 2014


HDB resale, private home prices fall in Q1 Singapore home prices fell in the first quarter of this year from the last three months of 2013. This is according to flash estimates released Tuesday by the Housing and Development Board (HDB), and the Urban Redevelopment Authority (URA). It is the third straight quarter of decline for HDB resale prices. The numbers show a 1.5-per cent decline from the last quarter of 2013. There was also a 1.5-per cent drop recorded in the fourth quarter of 2013. And in the quarter before, there was a 0.9-per cent fall. Nicholas Mak, executive director of SLP International Property Consultants, said: “Some of the property curbs the government has implemented, for example, the mortgage servicing ratio, tightening debts for the HDB purchasers…that has also contributed to the decline in demand and prices. “Another main factor is the steady supply of new HDB flats the government is offering to potential buyers. This has for the past two years been drawing steady demand from the resale market to the HDB primary market. “Hence we find ourselves in today’s situation, with HDB transaction volume at a low level as well as prices weakening.” As for the private residential market, prices fell for the second straight quarter. Preliminary figures showed prices declined 1.3 per cent in the first quarter of 2014, after a 0.9-per cent drop in the previous quarter. Prices also dropped across all market segments for non-landed private residential properties in the first quarter of 2014. In the Core Central Region, prices fell for the fourth straight quarter, dropping 1.3 per cent after declining 2.1 per cent in the previous quarter. The Core Central Region comprises districts 9, 10 and 11, as well as the downtown core region and Sentosa. At the Outside Central Region, prices fell for the second consecutive quarter, by 0.3 per cent, compared to the 1.0-per cent drop in the previous quarter. For the Rest of Central Region, prices dropped 2.8 per cent, compared with the 0.4-per cent increase in the previous quarter. Lim Yong Hock, key executive officer at PropNex Realty, said: “The cooling measures, especially the TDSR (total debt servicing ratio), have this impact across the board, whether it is the OCR (Outside Central Region), RCR (Rest of Central Region) or CCR (Core Central Region). “For everyone who wants to buy a property, the greatest challenge now is the loan issue. If they are not able to take up the loan, I believe there will be more people who are not able to afford the prices.” Director of Research & Advisory at Colliers International Chia Siew Chuin said the numbers also show that buyers are drawn to the relatively more affordable mass-market homes. She said: “Given homebuyers’ persistent price sensitivity and the reduction in their purchase budget under the strict financing rules of the TDSR, prices of mid- to high-end homes in the Rest of Central Region and Core Central Region showed marked declines amid thinning market activity.” Analysts expect prices in both the private and HDB resale markets to continue to soften. Some added that the HDB resale market is likely to be affected by the new resale price negotiation procedure, as buyers will tend to be more cautious with their purchases. Source : Channel NewsAsia – 1 Apr 2014


Fall in demand for BTO flats in latest exercise The demand for the second batch of Build-to-Order (BTO) flats launched this year has dropped, compared to the previous batch. But analysts Channel NewsAsia spoke to said the housing needs of some groups are still not being met. The exercise will close at midnight on Tuesday. There were 4.1 applicants vying for each unit in January’s BTO exercise. But for the exercise this month, the number is at 2.4, as at 5pm on Monday. Eugene Lim, key executive officer at ERA Realty Network, said: “Some buyers may have held back their applications this round, one reason being that there is an upcoming Sale of Balance Flats (exercise). “Some of those flats are almost completed and you can actually get them quite fast.” Some 3,000 flats will be offered in a Sale of Balance Flats exercise in May. Analysts also said the lower application rate for this month’s BTO exercise shows that supply has generally caught up with demand. But they added that housing needs of some groups are still not being met. Mr Lim said: “If you look at the overall figure, it does seem to give you the impression that housing needs are being met. “But if you look at the various sub groups, then you can actually pick up that for certain groups, their housing needs are still not met. “So for example, one that still stands out very strongly is the singles (group). The application rate for BTO flats is still very high among singles.” As at 5pm on Monday, there were 27.6 singles applying for each two-room flat in Yishun. Over at Sembawang, there were nine single applicants for each two-room unit. Analysts said it is no surprise that the flats in Yishun are more popular among singles, compared to Sembawang. Analysts said the area is closer to mature estates such as Ang Mo Kio and Yio Chu Kang, while Sembawang is at the northernmost point of Singapore. This month’s BTO exercise also saw the fourth batch of 3-Generation (3Gen) flats being launched. The popularity of such units continues to be higher among second-timers. As at 5pm on Monday, there were three first-time buyers applying for each 3Gen or five-room unit, compared to 13.2 second-time applicants. One analyst Channel NewsAsia spoke to said the Housing and Development Board could consider allocating more 3Gen flats to second-timers. Thomas Tan, executive director at Remax Singapore, said: “If I am a first-timer and I own a HDB flat, that is probably for myself, maybe my children. But as time goes by, the household size grows, together with the initiative where one wants to look after parents. “Generally, the (household) size grows — that is probably why you see greater need (for 3Gen flats) from second-timers rather than first-timers.” The next BTO exercise will be in May, and the HDB will offer 3,060 flats in Bukit Batok and Woodlands. Source : Channel NewsAsia – 31 Mar 2014


More innovative industrial developments from JTC Small- and medium-sized enterprises (SMEs) can look forward to more innovative industrial developments from JTC Corporation. Outlining its plans for the future, JTC says the 16 projects it is working on are expected to add 800,000 square metres of multi-user space by 2017. JTC also expects industrial rents to continue to moderate in the coming years. JTC is the lead industrial infrastructure developer in Singapore. It owns 81 percent of the 9,100 hectares of industrial land in Singapore as at the fourth quarter of 2013. Over the years, JTC Corporation has developed specialised land for key business clusters, including the Seletar Aerospace Park, as well as providing space with shared facilities to help companies become more efficient. To further intensify land use in the future, JTC is looking at developing integrated multi-user factories for the oil and gas sector, with provision for housing more than 1,000 foreign workers. “We want to provide a facility where we have land-based factories, where if you need higher floor loading for heavy manufacturing, you can put it on the ground floor,” said Png Cheong Boon, CEO of JTC. “We will have a warehouse; we can have light manufacturing space above it. We can have office space above that, as well as foreign workers dormitory too. So that way, a company that requires different types of space can locate there, including housing for their foreign workers.” Another initiative that JTC is studying is “decking” over major roads and highways. One example cited was the Ayer Rajah Expressway, which currently separates NUS and the Science Park from one-north. “We want to build an integrated connected community,” said Mr Png. “If there is a way for us to deck over AYE, and not just an overhead bridge but to build buildings across it, then it provides a contiguous space for people who are working or studying at NUS or Science Park to flow over to one-north and vice versa, and hopefully through this aspect we can build a more connected, integrated work-life and play community.” JTC is presently in discussions with industry partners and trade associations on the development of innovative space and land. JTC adds that its small footprint factories have seen good demand from SMEs, and that it is working on providing more of such spaces which could be ready by 2016 to 2017. As a key player in the sector, JTC says industrial property prices have moderated since the introduction of seller’s stamp duty and loan curbs (TDSR) last year. The prices rose by 3.5 per cent in 2013, compared to 9.7 per cent in the previous year. During the fourth quarter of 2013, JTC says the prices fell 1.4 per cent when compared against the third quarter of 2013. JTC says about two million square metres of space will be added annually from 2014 to 2016, which is actually double the annual demand. It is hoped that this supply will help to moderate industrial rents going forward. Mr Png said: “We think that the softening will continue in the first few quarters of this year, but a lot also depends on how well the economy is doing… Generally speaking, we think the rental prices will continue to be moderated in view of large supply coming on stream.” JTC says currently the private sector owns about 85 per cent of multiple-user industrial space in Singapore, which are commonly used by SMEs. This is up from 69 per cent in 2008 before JTC divested some of its industrial space. Source : Channel NewsAsia – 1 Apr 2014



March 2014   Private property developers say sales slowing down The private residential market is showing signs that the recent measures implemented are having some effect. Developers of a recently-launched project – The Santorini, located in Tampines – said while there were many visitors at the showroom, few actually signed on the dotted line. The project was launched on Saturday, and some 40 percent of its units have been sold. Developers said as it now takes a longer time to sell the units, they are now selling as they build. “Especially with this total debt servicing ratio, buyers are now very careful when they purchase properties,” said Tan Zhiyong, general manager of MCC Land Singapore. “They will go to the banks to check if they can afford these properties, and that takes time.” Donald Han, managing director of Chesterton Singapore, said: “Generally, in what we have seen in recent launches, there tends to be good take-up for 1-2 bedroom (units). This comes to a total quantum of less than a million per unit. So there seems to be still a strong demand for smaller units.” The government has launched seven rounds of cooling measures but land prices have shown no signs of easing. Some developers attribute this to the limited supply of land released, resulting in high bids from developers. Source : Channel NewsAsia – 30 Mar 2014


Resale private home prices fall 0.4% on-month in Feb Resale prices of completed non-landed private homes continued to fall last month, showed Singapore Residential Price Index (SRPI) flash estimates released yesterday, dragged down by an acceleration in the decline in prices of shoebox apartments. The SRPI, compiled by the National University of Singapore’s (NUS) Institute of Real Estate Studies, showed overall prices falling by 0.4 per cent last month from the month earlier, the same pace as in January, with declines registered across the board. Prices of shoebox homes — those with a floor area of 506 sq ft and below — fell 1 per cent last month, accelerating from the 0.5 per cent drop a month earlier, the SRPI data showed. Mr Ku Swee Yong, Chief Executive of property agency Century 21, said: “Shoeboxes may be tough to resell because prospective buyers may not be comfortable with the actual space and layout they see in the unit, as compared to a new sale when they buy purely on what they see in the show flat.” Excluding shoeboxes, prices of homes in the non-central region declined 0.2 per cent, reversing from the 0.2 per cent rise a month earlier, the SRPI data showed, while those of homes in the central region fell 0.6 per cent, moderating from the 1 per cent decline previously. Source : Today – 29 Mar 2014


$500,000 fund launched to test-bed ideas to improve HDB living The Housing and Development Board (HDB) has launched a $500,000 fund to help transform ideas that seek to improve HDB living into reality. Budding inventors will be able to tap on the Cool Ideas Fund to develop prototypes for test-bedding in HDB flats. National Development Minister Khaw Boon Wan announced this at the second Cool Ideas for Better HDB Living exhibition on Saturday. The fund will be built up over three years and will support 50 ideas. HDB said the money will help to bridge the gap between the ideas stage and the test-bedding stage. Inventors will be given a grant capped at $10,000 to support the development cost as well as the test-bedding costs of their prototype. But they have to put in an equal amount of money in order to receive the grant. The “Cool Ideas” initiative, launched in 2011, has received over 200 ideas from the public on ways to improve HDB living. Mr Khaw noted the number of ideas submitted this year has gone up by more than 50 per cent. Fourteen ideas and prototypes are currently on display at the exhibition held at the HDB Hub Mall in Toa Payoh. The ideas were submitted via several channels – the Cool Ideas Facebook page, student competitions and local constituency competitions. The fourth constituency to take part in this competition is Pasir Ris-Punggol GRC. Residents will work on new ideas to tackle problems such as high-rise litter and cluttered common corridors. Previous competitions were held in the East Coast, Sembawang and Nee Soon GRCs. HDB plans to hold such competitions island-wide, so that all residents can be engaged and involved in enhancing their living environment. Mr Khaw said: “I hope the fund (Cool Ideas Fund) will be well used. We hope to see the fund being depleted, rather than the fund sitting there with no cool ideas. So, please put on your thinking cap, take a look at the HDB estates. Are there ideas, are there problems waiting to be solved?” Among the projects on display at this year’s Cool Ideas for Better HDB Living exhibition is an anti-theft bicycle parking system. It bagged the second prize in the Constituency Competition for Sembawang and Nee Soon GRC. The inventors are a group from the Woodlands Youth Executive Committee. Anas Rahamat, one of the inventors, said: “We found out that the number of bicycle thefts has increased from two years. So we created this prototype to better enhance the security of the bicycles. It can secure the triangular frame of the bicycle and it also uses a padlock, which can better withstand the abuse of a board cutter, as opposed to a cable tie lock.” Another winning invention is the water-saving devices that control the amount of water that flows out of a tap. Designed by a group of students from ITE College East, the project took first place at the Student Design Competition for Polytechnics, Junior Colleges and Institutes of Technical Education. Student Muhammad Nor Hisyam Salimnor said: “It’s to prevent the wastage of water. You can save up to one litre of water per minute.” One product which may be commercialised soon is the swing rack, which allows you to hang your laundry out to dry, without having to lean out the window and without having to use much effort. The idea was submitted about three years ago, and its inventors are awaiting approval to sell the product. They have set up their own company since talks of commercialisation began. The device has already been through about a year of rigorous testing. Inventor Yan Feng said: “Previously through the help of HDB, we’ve also contacted several people to test our pilot product. So now our final product is based on their feedback and their feedback is generally positive, that our device has indeed helped them a lot in their daily lives.” Source : Channel NewsAsia – 29 Mar 2014


Investments on S’pore properties among foreign investors surge in 2013 Total investments on Singapore properties among international investors surged to S$6.4 billion last year, says property consultancy Knight Frank. This was nearly double the S$3.4 billion in 2012. The residential segment accounted for the majority of the investments, but analysts say investors are shifting their focus to hotels and commercial properties. “The Panorama” in Ang Mo Kio by Hong Kong’s Wheelock Properties was one of the top five major transactions by international investors in 2013 – at S$550 million. Knight Frank Research says it is second to the S$1.1 billion investment on Grand Park Orchard Hotel by China’s Bright Ruby Resources. Of the five transactions, three are residential developments — The Panorama, Mount Sophia and MCL’s Jurong West project LakeVille. But analysts say investments in the residential segment have declined as a proportion of total sales. “For 2012, residential investments make up approximately 65 per cent (of total sales) whereas in 2013, it only makes up 49 per cent with more investors looking towards the commercial sector,” said Ian Loh, head of investment and capital transactions at Knight Frank. “There remains a large group of Chinese developers for example, who are still positive about the residential market.” Eli Lee, head of real estate equities at OCBC Investment Research, said: “The bias is certainly toward commercial properties, not least because of the many bouts of government cooling measures we have seen in the last three to four years. “The outlook for residential properties over the shorter term is unfortunately negative. There are headwinds for the sector, again due to the government measures that we have seen and also the looming spectre of rising interest rates.” Hotels are also expected to find favour this year. Colliers International said there was a deal in 2012 — valued at S$210 million — and three in 2013 — at a total value of over S$1 billion. Tang Wei Leng, executive director of investment services at Colliers International, said: “For Singapore, there are many stats to support the hotel growth story, with new terminals, new tourist attractions and the Singapore government’s efforts to bring in… business travellers or tourists. “The storyboard is good, plus hotels as a segment are always very attractive. It is a very visible acquisition.” Knight Frank says Chinese investors accounted for over half of the total international investment in 2013 at S$3.5 billion. This was followed by Hong Kong at S$1.4 billion – with 21 per cent of total investment – while Malaysia was third with S$600 million – with about 10 per cent of the total. Knight Frank says international investors are also increasingly looking at opportunities in emerging markets like the Philippines, Cambodia and Myanmar, as they offer a bigger profit margin, albeit at higher risk. Looking at 2014, Knight Frank says total investments by international players could range from S$4 billion to S$5 billion as many government land sales — which investors tend to favour — are on the Reserve List. Still, analysts believe Singapore will remain an attractive investment destination. “Singapore should remain a haven for capital when markets are as volatile and opaque as they are,” said said Tim Gibson, co-head for Henderson Horizon Global Property Equities Fund & manager of the Henderson Horizon Asia Pacific Property Equities Fund. “Having liquidity, transparency and a stable currency are all attractive characteristics to have at times like these.” Overall, analysts say local investors still accounted for majority of investments in Singapore. Knight Frank says total investments came up to just over S$27 billion in 2013. Of these, international investors made up 23.7 per cent of the total at S$6.4 billion, while local players accounted for 49 per cent at S$13.3 billion. Real estate investment trusts contributed 27.3 per cent of the total investment at S$7.4 billion. Source : Channel NewsAsia – 27 Mar 2014


Govt releases three land sites in Yishun & Margaret Drive for sale The government has released three land parcels for private housing which are expected to yield some 1,300 units. In a joint news release, the Housing and Development Board and the Urban Redevelopment Authority said those three sites are released for sale under the first half of this year’s Government Land Sales programme. Two adjacent sites at Yishun Street 51 have been launched for sale under the Confirmed List. Both parcels carry a 99-year lease. Parcel A has a site area of 50,302 square metres, while Parcel B has a site area of 51,139 square metres. The two executive condominium (EC) sites can yield about 1,010 residential units. This is the second time that two adjacent EC sites have been launched for sale on the same day with the same tender closing date. However, some analysts remain hesitant on whether this will actually help reign in land bid prices. Property analysts expect developers, especially larger ones, to try and win both sites, which would give them greater control over pricing. The previous batch tenders featuring adjacent EC sites in Choa Chu Kang were both won by a single developer, MCL Brighton, in February. But developers are also expected to be mindful of slowing EC sales as buyers have faced tighter loan restrictions since December. “Developers should be wary of a potential oversupply in EC in the north region,” said Christine Li, head of research and consultancy at OrangeTee. Ms Li noted that there is an EC site at Sembawang Avenue on the Confirmed List and another at Sembawang Road on the Reserve List. Those two sites are expected to yield a total of 1,225 units. Another EC project at Canberra Drive was also recently awarded in January, and its launch can be expected possibly by May 2015. Skypark Residences, which was launched last year in November, has also only had about 58 per cent of its units sold. The closing tender date for the two executive condominium sites at Yishun Street 51 is May 22. Another plot at Margaret Drive has also been put on the Reserve List. Located near Queenstown MRT, the 99-year-lease plot may be smaller at 4,800 square metres, but analysts say the development could possibly be about 40- to 50-storeys high. The plot can yield an estimated 275 private homes. While it is located in a mature estate, some property analysts like Eugene Lim, Key Executive Officer of ERA Realty Network, do not expect the tender to be triggered so soon. This is because developers are expected to be more conservative due to a slowing property market and property cooling measures. Source : Channel NewsAsia – 27 Mar 2014


CapitaLand buys stake in Chengdu sites for S$155m Southeast Asia’s largest developer CapitaLand has bought a 60 per cent interest in two adjacent prime residential sites in the western Chinese city of Chengdu for 752 million yuan (about S$155 million), further strengthening its presence in the world’s most populous country. CapitaLand plans to build around 4,600 apartment units on the sites to cater to first-time homebuyers and upgraders. Construction is expected to begin in the second quarter, with the first phase targeted for launch by end 2014. “Chengdu is a leading city in China and displays tremendous growth potential arising from rapid urbanisation and China’s ‘Go West’ economic strategy,” the Singapore firm’s China CEO Jason Leow said in a statement on Friday. CapitaLand said it expects good demand for its latest project as previous developments in Chengdu had been well received. It added that the sites are located in a mature, good class residential area that is well served by main roads and a metro line. The sites are also located next to No. 7 Middle School, one of China’s top secondary schools, which is a top draw for future buyers. Source : Channel NewsAsia – 28 Mar 2014


Mortgagee sales at property auctions spike in Q1 The number of mortgagee sales at property auctions in Singapore jumped sharply during the first three months of this year — a sign that owners in financial difficulty are finding it harder to dispose of their properties. Figures compiled by real estate consultancy Colliers International showed 22 mortgagee listings during the first quarter, far higher than the average of eight mortgagee listings per quarter in 2013. The average number of mortgagee sales in 2012 was just six per quarter. “Although the absolute number of mortgagee listings remained low, this is the highest quarterly number of mortgagee sales put up for auction since Q4 2010,” Colliers said in a statement. Grace Ng, the firm’s deputy managing director, said: “The pool of potential buyers in the resale market has shrunk, making it challenging for owners to dispose of their properties in the secondary market when they default on their mortgage payments.” Bankruptcies in Singapore have also risen, she added, citing statistics from the Ministry of Law that showed the number of people made bankrupt rose by 14 percent to reach 1,992 in 2013. A total of 132 properties were put up for sale via auction in the first quarter of this year — an increase of 10 percent from 120 properties in the last three months of 2013. Source : Channel NewsAsia – 27 Mar 2014


Cashin House set to be visitor gateway to Sungei Buloh reserve Areas around the Cashin House, near the Sungei Buloh Wetland Reserve, have the potentials for further development, according to an analyst. The house is uniquely built on a pier, hence nicknamed “The Pier”, located at the coast of Lim Chu Kang. It is visible from the Lim Chu Kang Jetty, and has a panoramic view of the Johor Strait in the southern state of Malaysia. Cashin House is set to be a new visitor gateway to the western part of Sungei Buloh Wetland Reserve. Likely to be built before the 1940s, it was occupied by the Japanese in 1942 during the Second World War. After the war, the Cashin family regained possession of the house. Under a 2013 draft master plan, it was previously revealed that Cashin House will be restored and converted into a recreational spot. Mr Nicholas Mak, executive director of SLP International Property Consultants, said: “The authorities can actually consider gradually developing some of the areas around this old Cashin House without actually destroying the natural environment. “For example, they could open up the grounds for camping or for picnics for families. And hence, bring more attention to this Cashin House and increase its visitorship.” Source : Channel NewsAsia – 27 Mar 2014


3,497 BTO flats in Sembawang, Sengkang, Yishun launched The Housing and Development Board (HDB) launched four Build-To-Order (BTO) projects on Wednesday, offering 3,497 new flats in the non-mature towns of Sembawang, Sengkang and Yishun. The new flats comprise 2-room to 5-room flats, and Three-Generation (3Gen) flats. In a statement on Wednesday, HDB said the new flats are meant to meet the diverse housing needs of first-time buyers, second-timers, multi-generation families, and singles. First-timers will continue to have priority flat allocation, with at least 85 per cent of 4-room and 5-room flats and 70 per cent of 2-room and 3-room flats in the BTO supply set aside for them. Eligible first-timer singles have the option of applying for a 2-room flat in EastCrown @ Canberra, EastLace @ Canberra, and Fern Grove @ Yishun. Married or courting couples who wish to apply for a 3Gen flat together with their parent or parents can apply for one at Anchorvale Parkview, which will offer 70 3Gen flats in the exercise. Other multi-generation families who wish to live in the same BTO project can apply under the Multi-Generation Priority Scheme (MGPS). There will be flats set aside in EastCrown @ Canberra, EastLace @ Canberra and Fern Grove @ Yishun for that purpose. HDB will set aside up to 15 per cent of the Studio Apartments, 2-room and 3-room flats in a BTO project, subject to a minimum of 20 units each, for parents applying under MGPS. The same number of 2-room and bigger flats will be set aside in the same BTO project for their married children. This is the second BTO launch for 2014, bringing the total number of flats offered for sale this year to 6,636. HDB said as with all new public housing developments launched since January this year, it will introduce a standard suite of eco-features in all four projects. The features are meant to manage water, energy and waste more efficiently. Regular updates on the number of applications submitted for the various flat types or towns will be published at HDB InfoWEB. HDB advised applicants to check for updates before submitting their applications. In May 2014, HDB will offer about 3,060 BTO flats in Bukit Batok and Woodlands. An additional 3,000 flats will be offered in a concurrent Sales of Balance Flats (SBF) exercise. Information on the flats for offer under the May 2014 BTO exercise can be found at the HDB InfoWEB. Source : Channel NewsAsia – 26 Mar 2014


Ascendas Hospitality to buy Osaka hotel for S$110.8m Ascendas Hospitality Trust has agreed to buy the Osaka Namba Washington Hotel Plaza in Osaka, Japan for 8.9 billion yen (S$110.8 million) in a deal that would diversify its portfolio and boost returns. The purchase price that will be paid to Ainodake Godo Kaisha is 3.3 per cent below the independent property valuation of 9.2 billion yen made by Savills Japan. The hotel will continue to be leased to Washington Hotel K.K. until December 31, 2015 under a fixed-term building lease agreement for a fixed rent of 652.6 million yen per year, Ascendas Hospitality said on Wednesday. “Osaka Namba Washington Hotel Plaza is a hotel in an excellent location within the vibrant city of Osaka,” Ascendas Hospitality CEO Tan Juay Hiang said in a statement. “This acquisition deepens our presence in Japan and is expected to be DPS (distribution per stapled security) accretive,” he added. Ascendas Hospitality currently owns 11 hotels with over 3,900 rooms in key cities in Australia, China, Japan and Singapore. Source : Channel NewsAsia – 26 Mar 2014


Analysts expect private home rentals to fall in Q1 Some analysts expect rentals of private homes in Singapore to fall for the second straight quarter ending in March this year, as a higher supply of new projects is expected to come on stream. Chesterton Singapore estimates that overall rentals could fall by 0.5 to 1 per cent in the first quarter. This comes after rentals slipped 0.5 per cent in the last quarter of 2013, the first decline in four years. Analysts said investors hoping to lease their private residential units in Singapore may find it increasingly challenging as newer projects become available. Based on its estimates, Chesterton Singapore said an average of 22,000 new units are likely to be completed each year for the next three years. That is a lot higher than the 10,497 units in 2013 and 10,946 units in 2012. The strong supply of new homes could see pressure on rentals, especially in the suburban areas, in the next 12 months. Donald Han, managing director of Chesterton Singapore, said: “Total rents have actually gone up in the last four years for the core central region by about 25 per cent. If you look at the rest of central region, rents have gone up by 26 per cent, and if you look at outside core central region (OCR), rents went up in total 29 per cent. “We will see a higher decrease in terms of rental prediction for OCR, where there is a larger… supply coming up in the next 12 months. Probably we would expect rentals to drop by about 5 to 8 per cent.” Meanwhile, for high-end apartments in the prime districts of 9 and 10, Marina Bay and Sentosa Cove areas, market watchers expect rentals to be fairly resilient. But larger units spanning over 2,000 to 4,000 square feet may take a longer time to find tenants as rentals are more expensive. Juliann Teo, head of residential leasing at Jones Lang LaSalle, said: “There is a big range, from S$5.50 all the way to S$8; sometimes the smaller units command higher than S$8 per square foot. “We see them softening, but being luxury apartments, they always have a certain X-factor. When they are developed, there are characteristics that will appeal to tenants. “While we see there is some declining trend, but because of these factors that the property holds, we see the rentals holding fairly well for luxury projects.” According to the Urban Redevelopment Authority, in the fourth quarter of 2013, mass market homes led the decline in rentals, falling by 0.8 per cent. Meanwhile, rentals in the core central region were down 0.5 per cent, followed by a 0.1 per cent decline for city fringe rentals. Some observers expect this trend to be mirrored in the first three months of 2014. They said it is a bit of a tenant’s market right now and landlords should try to renew the lease where possible, rather than look for a new tenant. Chesterton Singapore said it could take up to two months to rent out a unit now, compared to a couple of weeks previously. Source : Channel NewsAsia – 24 Mar 2014


More units in Eunos Industrial Estate to be relocated The Housing and Development Board (HDB) said on Tuesday that another 399 units in Eunos Industrial Estate will have to move out to facilitate the future redevelopment of the area. The affected units are located in 26 blocks at Eunos Road and Eunos Avenue 3, 4, 5, 5A, 6, 7 and 8. They are the fourth batch of units in Eunos Industrial Estate to be affected by HDB’s Industrial Redevelopment Programme (IRP). Under the Urban Redevelopment Authority’s (URA) Master Plan 2008, the Eunos Industrial Estate is mainly zoned for non-industrial uses. Part of the vacated land has since been redeveloped for public housing. HDB said affected tenants will be offered replacement units in a new high-rise Industrial Complex in Ang Mo Kio Industrial Park 3. In addition to the replacement units, eligible tenants will also receive ex-gratia payment and other relocation benefits. Since 1999, three batches of IRP have been announced for the estate. The remaining units will be relocated under subsequent IRPs. HDB said the IRP was launched in February 1997 to recycle, redevelop and intensify existing HDB-managed industrial land, and to relocate pollutive trades. It said to date, it has relocated some 3,000 industrial units island-wide to new high-rise industrial complexes with better facilities. Eunos Industrial Estate housed 1,089 units when it was completed in 1981. Under the URA Master Plan 2008, Eunos Industrial Estate is mainly zoned for non-industrial uses. Part of the vacated land has since been redeveloped for public housing. Source : Channel NewsAsia – 25 Mar 2014


No formal proposal from MBS on acquisition of land sites US casino giant Las Vegas Sands may be keen to build more hotel rooms in Singapore, but the company has not made any formal proposal to authorities here. The world’s biggest casino operator plans to add 1,500 rooms to its Marina Bay Sands integrated resort in Singapore, the firm’s billionaire founder Sheldon Adelson said last week. A news report had quoted Mr Adelson as saying that Las Vegas Sands also intends to add meeting rooms, ballrooms and exhibition spaces in Singapore when the government releases more land. A spokeswoman for Marina Bay Sands confirmed Mr Adelson’s remarks. “STB has not received a formal proposal from Marina Bay Sands regarding the acquisition of land sites,” a spokeswoman for the Singapore Tourism Board said in response to questions from Channel NewsAsia. The Urban Redevelopment Authority (URA) said its officials had not met Mr Adelson recently. “The release of land in Marina Bay under the Government Land Sales Programme will be paced according to the on-going infrastructure works in the Marina Bay area, our overall development plans for Singapore and projection of market demand,” URA added. Marina Bay Sands currently has around 2,600 rooms spread across three towers. The hotel is popular with visitors to Singapore and its occupancy rate and room charges are among the highest in the city-state. There are vacant sites next to Marina Bay Sands, but the government has not yet released any of the land for tender by developers or indicated when it might do so. Built at a cost of around US$5.7 billion, Marina Bay Sands was the world’s most expensive casino complex at the time of its opening in 2010. Source : Channel NewsAsia – 25 Mar 2014


ANZ advises SingLand shareholders to accept UIC’s offer Minority shareholders of Singapore property group SingLand should accept the S$8.40 a share offer by United Industrial Corporation (UIC) as the price is fair and there is a risk that they could end up holding shares in an unlisted firm, independent financial adviser ANZ said on Monday. They can, alternatively, sell their SingLand shares on the open market since the shares are currently trading well above UIC’s offer price. ANZ is the bank appointed by independent directors to advise on the proposal by majority shareholder UIC to buy the remaining 19-plus per cent of SingLand that UIC did not already own for around S$761.7 million. “We recommend that the independent director should advise the shareholders either to accept the offer or to consider selling their shares in the open market if they can obtain a price higher than the offer price,” ANZ said in a document sent to shareholders. SingLand is one of Singapore’s largest landlords. Its properties include Singapore Land Tower and Clifford Centre in the heart of the central business district, SGX Centre which houses the Singapore Stock Exchange, and Marina Square shopping centre. UIC’s offer for SingLand was 11 per cent above the stock’s last traded price at the time of the offer. But SingLand shares have risen. The stock closed at S$9.56 on Monday. Source : Channel NewsAsia – 24 Mar 2014


Billionaire Adelson seeks land to expand Marina Bay Sands Las Vegas Sands has asked the Singapore authorities for more land to increase rooms at its Marina Bay Sands resort by about 60 per cent after facing almost full occupancy, billionaire Chairman Sheldon Adelson said yesterday. The world’s biggest casino operator plans to add 1,500 rooms to the 2,563-room resort, Mr Adelson said at a briefing here. It will also add meeting rooms, ballrooms and exhibition spaces to the US$6 billion (S$7.65 billion) project and largest hotel in Singapore when the Government releases more land, he said. “We need more rooms,” Mr Adelson said. “We are running at a 100 per cent occupancy; on a bad day, it’s 98 per cent. No other hotel in the world runs like this, except some in Vegas.” Mr Adelson said he had met government officials on Wednesday and repeated his request for more land. Marina Bay Sands has about 1.2 million sq ft of meeting and convention space and two theatres for Broadway shows, concerts and gala events, said a company filing. The room revenue at the resort rose 11 per cent to US$360.3 million last year, the filing showed. Last year’s occupancy rate was 98.6 per cent, with an average daily room rate of US$396. Hotels in the city filled 86.3 per cent of their rooms last year, data from the Singapore Tourism Board showed. Still, Sands posted fourth-quarter earnings on Jan 30 that trailed analysts’ estimates, as revenue in Singapore fell 8 per cent to US$659.8 million. Gains in mass gaming and non-gaming revenue were countered by “softer VIP play”, the firm said. Sands plans to focus on Asia after the operator abandoned a plan in December to build a US$30 billion mega-resort in Spain. “We want to develop a network of resorts around the Pacific Rim,” Mr Adelson said. Sands is ready to invest as much as US$10 billion in Japan to build a gambling, hotels, entertainment and shopping complex that would lure tourists to Asia’s biggest economy after China, Mr Adelson said, repeating comments made last month. Japan should allow Sands to build an integrated resort by 2020, before the Tokyo Olympic Games, said Mr George Tanasijevich, Chief Executive Officer of Marina Bay Sands. The Tokyo facility should have at least 200 rooms for meetings, conventions and exhibitions. The company invested in Macau a decade ago and has since become the largest foreign casino operator in the city, which is about an hour by ferry from Hong Kong. Source : Today – 21 Mar 2014


Mainland Chinese rush to sell HK luxury homes Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong and some are knocking up to a fifth off the price for a quick sale as a liquidity crunch looms on the mainland. Wealthy Chinese were blamed for pushing up property prices in Hong Kong, where they accounted for 43 per cent of new luxury home purchases in the third quarter of 2012, before a tax hike on foreign buyers was announced. The rush to sell now coincides with a forecast 10 per cent drop in property prices this year, as the tax increase and rising borrowing costs cool housing demand. Concurrently, credit conditions in China have tightened and the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan (S$720 million) have heightened concerns that financial risk was spreading. “Some of the mainland sellers have liquidity issues … Their companies in China have some difficulties, so they sold the houses to get cash,” said Mr Norton Ng, Account Manager at a Centaline Property office close to the China border, where luxury homes costing up to HK$30 million (S$4.89 million) have been popular with mainland buyers. Property agents said mainland Chinese own about a third of the existing homes that are now for sale in Hong Kong — up 20 per cent from a year ago. Many are offering discounts of 5 to 10 per cent from the market average — and, in some cases, as much as 20 per cent, property agents and analysts said. In a Hong Kong housing development called Valais, about 10 minutes’ drive from the Chinese border, real estate agents said between a quarter and half of the 330 houses are now on sale. At the development’s frenzied debut in 2010, a third of the HK$30 million to HK$66 million units were sold on the first day, with nearly half going to mainland Chinese. Built by the city’s largest developer, Sun Hung Kai Properties, Valais is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell. “Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago, but now they want to cash in as liquidity is quite tight in the mainland,” said Mr Joseph Tsang, Managing Director at Jones Lang LaSalle. A spokesman for Sun Hung Kai said the current occupancy rate at Valais was 75 per cent, and most of the sellers were looking for a good selling price and not eager to sell at deep discounts. In West Kowloon district, where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some are offering steep discounts on the higher-end apartments they bought just a few years ago. This month, a Chinese landlord sold a 1,300 sq ft unit at the Imperial Cullinan — a high-end estate developed by Sun Hung Kai in 2012 — for HK$19.3 million, 17 per cent less than the original price. The landlord told agents to sell the flat as soon as possible, said Mr Richard Chan, Branch Manager at Centaline Property in West Kowloon. “In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market — that’s for sure,” he said. Source : Today – 21 Mar 2014


Demand for smaller homes on the rise as buyers become price-sensitive Analysts said developers could start looking at building more smaller units because buyers have become more price-sensitive, pushing up demand for smaller homes. Caveats lodged with the Urban Redevelopment Authority showed that the number of new units under 800 square feet accounted for about 48 per cent of total sales in 2013. Over a month into its launch, some 40 per cent of units at UOL’s 555-unit Riverbank@Fernvale in Sengkang have been sold. But the developer said all the 148 one- and two-bedroom units have been snapped up. Prices of the one-bedroom apartments start from S$480,000, while a two-bedder costs S$660,000 and more. With the implementation of new loan curbs last year, industry players said buyers are more cautious about bigger units with larger price quantum. This trend, they said, will likely guide developers in the planning of unit-mix in future projects. REMS Advisors found that before the total debt servicing ratio framework kicked in in June 2013, 21 per cent of new units that were sold in the first half of 2013 cost less than S$800,000. While this fell to 18 per cent just after the framework kicked in, the number has climbed to 41 per cent in the first three months of 2014. Alan Cheong, research head at Savills Singapore, said: “The sweet spot is quantum-driven, anything that is S$900,000 or less would be where you would find most buyers. The size would then have to be worked around that S$900,000 cap. Anything that is going to be priced from S$400,000 plus for suburban shoebox to S$900,000 for suburban cap, that would be where architects and designers will be designing their units.” According to caveats lodged, smaller units of under 800 square feet made up nearly 48 per cent of new sales in 2013, compared with 43 per cent in 2012. This is significantly higher than the 31 per cent in 2010. While the trend points towards smaller homes, analysts said it is unlikely that homes could shrink significantly. Desmond Sim, associate director at CBRE Research, said: “There will be a limit as to how unit sizes are getting smaller; there would be a threshold where people will not start to buy… units that are too small. It is well controlled by this 70 square metre but more likely they will like to maintain this sweet spot in pricing to attract demand to buy.” In 2012, URA placed a cap on the number of private homes in a new project, based on the average unit size of 70 square metres. This was to ensure that while developers could still build small apartments, there will still be a mix of larger units. Source : Channel NewsAsia – 20 Mar 2014


Developers to hold firm on home prices, say analysts Sales of new private homes may remain in the doldrums, but bargain hunters hoping that developers will slash prices to breathe life into the market are likely to be disappointed, analysts told TODAY. Despite the slow market, several recent launches have sold well, showing that underlying demand can be realised into sales with the right marketing and pricing strategy. So, as long as holding costs remain low, developers can afford to keep prices steady and hope the market will swing in their favour over time. “It’s a given that it’s very difficult to push prices up in the current market, but there’s still liquidity,” said Mr Colin Tan, Director of Research and Consultancy at Suntec Real Estate Consultants. “I don’t think we have reached that stage where the market is on a definite decline. Volume is still coming in, whether slower or faster, and it won’t completely disappear.” He added that developers currently do not have the urgency to cut prices as buyers are still drawn to developments that “tick the right boxes”. However, projects without “premium attributes” may have to rely on attractive pricing to move units. “But even then, there are still ways to get away by pricing it at the same level and still sell; for example, by incorporating iconic designs or having very good layout,” he said. Mr Tan added that it is also unlikely that coming launches will have lower price tags since land parcels have commanded high rates despite the property curbs and lending restrictions. Sites under the Government Land Sales programme are continuing to sell at high prices, with a condominium site in Yishun Ave 9 awarded in a recently-closed tender at S$450 per sq ft per plot ratio. The break-even price for this site is estimated at S$900 psf ppr. Latest figures from the Urban Redevelopment Authority showed that developers sold 724 new condominiums last month, 28 per cent higher than the previous month, but many analysts noted that the volume is a far cry from last year’s monthly average of 1,602 units. Still, analysts singled out Hallmark Residences at centrally located Ewe Boon Road as a project that adopted the right pricing strategy to achieve strong sales. “There are successful cases; for example, Hallmark,” said Mr Ku Swee Yong, Chief Executive of property agency Century 21. “They lowered prices by 10 per cent and sold 26 units last month, compared with zero in December. So lowering prices helps, but there is not much incentive right now unless you are very near the end of the five-year mark. “In the meantime, the holding cost is low, so why lower prices? While developers construct, they can continue selling.” Developers have five years from the time of land acquisition to complete building and selling units in the development and be exempted from paying the additional buyer’s stamp duty. In addition, developers with foreign shareholders are subject to the Qualifying Certificate rules, which require them to sell all dwelling units within two years of obtaining a Temporary Occupation Permit. Mr Nicholas Mak, Executive Director of Research and Consultancy at SLP International, said many developers would only cut prices as a last resort. “It’s not so straightforward. Lowering prices has a whole list of implications and I think things have to become very bad for the developers to consider that,” he said. “For the listed developers, lowering prices means having to write down the value of that particular asset. That will have an impact on their balance sheets, share prices. “So I think it’s very much a last resort. Developers who need to sell may give certain discounts or promotions during seasonal holidays such as Chinese New Year or Christmas,” he added. Source : Today – 20 Mar 2014


Suntec REIT sells new units at discounted price Suntec Real Estate Investment Trust (REIT) has sold new units to investors at a discounted price of S$1.605 a unit, raising net proceeds of about S$341 million to pay down its debt. The private placement of just over 218 million new Suntec units was priced near the top of the indicative range of S$1.575 to S$1.615. The placement price, however, represented a discount of about 4.7 per cent to the REIT’s volume weighted average price of S$1.6839 on Tuesday. Suntec closed down nearly 2.7 per cent at S$1.645 on Wednesday. Suntec owns most of Suntec City and Park Mall. Its other assets include large stakes in the Marina Bay Financial Centre. DBS, Standard Chartered and HSBC were joint lead managers and underwriters for the placement. Source : Today – 19 Mar 2014


Industry players welcome CEA guidelines, but point out challenges The Council for Estate Agencies (CEA) earlier this week issued new guidelines for property agents and salespersons marketing foreign properties. Industry players generally welcome the move, but some said the guidelines could pose challenges. In the last couple of years, more Singaporeans have been buying properties overseas, in countries such as Malaysia and the United Kingdom. To help consumers make informed decisions, CEA rolled out an online consumer guide on Monday. It also issued a set of practice guidelines to sales agents. Real estate agency PropNex said they provide a clear understanding of the agent’s obligations to help buyers assess their investment options. PropNex has marketed about 25 projects in the last two years, in London, Tokyo, Malaysia and Australia. The guidelines include the performance of due diligence on the foreign developer to make sure they are reliable with good financial standing, as well as carrying out inspection of the property title, tenure, location and features. They also cover activities like training of agents and making sure they understand investors’ needs and inform buyers of restrictions on foreign ownership. However, PropNex said the guide does not cover foreign developers who market their overseas projects in Singapore without the help of local agents, and it hopes they can be regulated. Lim Yong Hock, key executive officer at PropNex, said: “Even though these cases may not be so rampant, but we see that it is increasing in trend – developers coming from all over the world… If the buyers do not know the risks and some of these regulations, the foreign developers who do not engage the local agencies or agents, no other due diligence can be done.” Meanwhile, some agents said the guidelines – which apply to agents registered with the CEA – could pose some challenges. Ku Swee Yong, CEO of Century 21, said: “Some of the items (in the guidelines), to be honest, are very costly for us to abide by. “For example, to understand the financial strength of the developer and whether the developer might have the chance of going bankrupt during the course of construction – for that sort of financial due diligence, property agents must have the capability and the knowledge to do it. Secondly, how much cost will be involved? Do (firms) have to employ an auditor?” JLL, which has marketed over 70 overseas projects in the past two years in London, New York and Tokyo, said emerging markets carry the most uncertainties. On the other hand, developed markets like London offer good protection on investor’s deposit. Doris Tan, director of international residential property services (Singapore) at JLL, said: “During the credit crunch in 2007-2009, these developers had funding problems in London so they could not continue to build. “But because of the guidelines or the contracts, they are liable to refund the deposits if they cannot continue to build, so we have one project that we return all the deposits to the buyers, there was another project, they finally got their money from the banks, so they continued to build, so there was a delay of three to four years.” Industry players said the guidelines will go some way to ensure that agencies bring good projects into Singapore. However, they stressed that investors will still have to do their homework to understand what they are buying into and the risks involved. Source : Channel NewsAsia – 19 Mar 2014


Singapore office rents up 3.2% on-quarter in Q1: Colliers Office rents in Singapore’s central business district rose 3.2 per cent in the first three months of 2014 from the fourth quarter of last year, helped by an improvement in global business sentiments. Property consultants Colliers International said on Wednesday that the average monthly gross rents for Premium and Grade A office space in Singapore’s CBD increased to S$8.99 per square foot in the first quarter — the highest level since the fourth quarter of 2011. The improvement in business sentiment was brought about by the faster-than-expected recovery in the United States and Eurozone economies, it added. Colliers estimated the overall average occupancy rate for Premium and Grade A office space in the CBD stood at 95.9 per cent in the first quarter, an increase from 93.9 per cent in the fourth quarter of 2013. Source : Channel NewsAsia – 19 Mar 2014


CapitaLand sells remaining stake in Australand for S$970.1m CapitaLand has sold its remaining 39.1 per cent stake in Australia’s Australand Property Group, raising around S$970.1 million. Singapore’s largest developer said in a statement on Wednesday it placed out its remaining 226.2 million stapled securities of Australand at an average price of A$3.75 per stapled security. The price was a discount of 3.6 per cent to Australand’s closing price on Tuesday. “We have decided to divest our remaining stake in Australand now as market conditions are favourable and Australand’s share price has performed strongly in the past few months,” CapitaLand group CEO Lim Ming Yan said in a statement. “This divestment would allow us to reallocate capital to our core businesses in Singapore and China,” he added. Following the completion of the placement, CapitaLand expects to recognise a net gain of approximately S$35.7 million. Source : Channel NewsAsia – 19 Mar 2014


New home sales pick up, but market still muted New private-home sales stirred in February after two months of near slumber, but analysts said activity remained muted as developers and prospective buyers continued to hold back in the current cautious environment. Developers sold 724 non-landed private homes last month, a 28 per cent rise from 565 in January, after they launched 671 units or 22 per cent more than January’s 549 units, figures released by the Urban Redevelopment Authority yesterday showed. Despite the rebound, analysts noted that the launched volume and sales pale in comparison to the roughly 1,800 units just before the imposition of the Total Debt Servicing Ratio (TDSR) framework last June. Mr Desmond Sim, Head of Research at property consultancy CBRE, said: “This is an encouraging sign that deals are still being inked and the market is still moving.” But he added that the market had yet to find an equilibrium, saying that this was largely a result of a function of supply: Developers have been treading with caution and trying to read signs from buyers, who have been waiting on the sidelines. On the lack of new launches, Ms Christine Li, Head of Research and Consultancy at real estate firm OrangeTee, said: “Buyers are becoming increasingly selective. Thus, existing projects are under pressure from newer ones in terms of pricing and location attributes. It seems developers also noticed the trend and decided to increase marketing efforts of existing launches instead of pushing out new projects.” The Outside Central Region (OCR), or the suburbs, continued to dominate activity with 588 homes sold, as buyers were attracted by lower prices. The two best-selling projects last month — Rivertrees Residences and Riverbank @ Fernvale in Sengkang — are located in the OCR. At Rivertrees Residences, 218 of the 300 units launched were sold at an average price of S$1,111 psf, while 211 of 250 units launched at Riverbank @ Fernvale were sold at an average of S$1,033 psf. In the Rest of Central Region (RCR), or the fringes of the city, developers sold 87 units, while in the Core Central Region (CCR), they sold 49 units, 26 of which are at Hallmark Residences in Ewe Boon Road. “(The sales volume of Hallmark Residences) is excellent, given that it is in the CCR and the quantum is high. This could give developers some comfort that the underlying demand for real estate investment is not totally wiped out by the Government’s cooling measures and the TDSR. The key is to find the right price point with which buyers are comfortable,” said Ms Li. Units at the condominium sold at an average S$1,860 psf. With the Government indicating that cooling measures and loan curbs would stay, new private-home sales volume for the whole of this year is likely to fall about 30 per cent to about 10,000 to 12,000 units, said PropNex Chief Executive Mohamed Ismail. Source : Today – 18 Mar 2014


St James’ shares soar on reverse takeover deal Shares of Catalist-listed St James Holdings closed 19 per cent higher on Monday, boosted by news the firm would be transformed into a property developer via a reverse takeover deal. The nightspot operator’s shares ended trading at 6.4 cents each, up from 5.4 cents before the stock was suspended on Friday. The shares rose as high as 7.7 cents earlier in the session. St James said on Friday it would buy property assets in Singapore and China worth S$1.56 billion from a group of sellers by issuing new shares. It would also buy a nearly 28 per cent stake in Perennial China Retail Trust. The transaction would effectively hand over control of the company to Perennial, which is headed by former CapitaLand shopping mall chief Pua Seck Guan. The assets that will be injected into St James including majority stakes in Chijmes, as well as the upcoming Capitol Development, a mixed development that will comprise a luxury hotel, high-end apartments, a heritage retail arcade and a shopping mall. Shares of mainboard-listed Perennial China Retail Trust (PCRT) also rose on Monday, closing almost one per cent higher at 55 cents each. Source : Channel NewsAsia – 1 Mar 2014


Chinese property investment faces Australia scrutiny Foreign investment in Australia’s housing market will be examined by a national parliamentary committee, its chair said Monday, following a study that said Chinese investors are squeezing out local buyers. Kelly O’Dwyer said the House Standing Committee on Economics inquiry into affordable housing would probe the foreign investment framework to see whether it helps increase housing stock, and whether it is driving up prices. “We know that the great Australian dream is to own your own home and we know that that’s pretty difficult — even with two incomes and lots of years of savings and a large mortgage,” O’Dwyer told ABC radio. “So we want to make sure that we’re not making it even more difficult.” Chinese investment is a sensitive issue in Australia, where rural politicians have argued against selling valuable farm and mineral land to foreigners, and there are indications of an influx in Chinese investors in housing. Investment bank Credit Suisse this month estimated that Chinese investors could pour A$40 billion (US$36 billion) into Australia’s residential property over the next seven years and this could push up prices in what is already one of the world’s most expensive housing markets. In a report, Credit Suisse said Chinese buyers — who are restricted to buying only new homes — purchased 12 per cent of new housing across Australia per year. But they concentrated their buying in Sydney and Melbourne, acquiring 18 per cent and 14 per cent of new supply respectively, meaning they were a much more powerful force in those cities where home prices are climbing. “The Reserve (central) Bank governor made some comments in the recent parliamentary oversight hearing of the Economics Committee, where he said all foreign investment does have an effect on prices,” O’Dwyer said. “We want to know though whether or not the current laws and the current framework is being properly adhered to and whether it is a truly distorting impact.” Source : Channel NewsAsia – 17 Mar 2014


Developers to go ahead with launches after govt says not tweaking measures With the government confirming that it is too early to start relaxing property cooling measures, analysts said this will lend more clarity and certainty to both developers and home buyers. One developer has decided to go ahead with plans to launch a new project at the end of March. The Santorini showflat is being built in preparation for its launch later this month. The development comprises 597 units, of which about 56 per cent are one- and two-bedroom apartments. Its developer MCC Land Singapore is rolling out the project after the government said during this year’s Budget that it will not be tweaking the property-cooling measures just yet. Mr Richard Nah, senior manager at MCC Land Singapore, said: “By removing the speculation that there would be more measures or removal of other measures, it gives us this certainty. The market is achieving some sort of equilibrium, it has somewhat stabilised and there is no need to delay any launches.” MCC Land said it has yet to set the selling price for the project, but land cost alone is S$562 per square foot per plot ratio. Mr Donald Han, managing director at Chesterton Singapore, said: “Looking at mass market segment, as what we saw in recent launches in Sengkang West for Rivertrees, for Riverbank, generally the price range hovered between S$1,000 and S$1,100 per square foot (psf). We think that probably will set the precedent for those which are in outlying suburban mass market segments. “If you are looking at those that are nearer to the rest of central region, for instance Ang Mo Kio or in Bishan area, price trend tends to be S$1,250, maybe S$1,350 psf.” Meanwhile, market watchers said one project to look out for is Highline Residences, a development by Keppel Land at Kim Tian Road. Property agents have already started marketing the project but pricing details are not available just yet. SLP Research estimated that units there could cost up to S$1,900 psf because looking at sales transactions of other properties nearby, SLP said the average unit price in the area has never crossed S$2,000 psf. Twin Regency, a freehold project went for an average price of S$1,774 psf based on sales caveats from February 2013 to February 2014. Mr Nicholas Mak, executive director at SLP International Property Consultants, said: “Some of the projects that are going to be launched in the next few months, the land were acquired about a year ago so the land cost and construction cost have already been locked in. So that gives developers very little flexibility to reduce prices as the break even cost is already fixed.” With the property measures still intact, some analysts said new home sales could come in lower at about 11,000 to 13,000 units this year. That is down from 15,000 units in 2013 and 22,000 units in 2012. Analysts also said that the recent changes to Housing and Development Board resale procedures are unlikely to affect upgrader’s demand for new homes. Source : Today – 13 Mar 2014


COVs: Consigned to history? On Monday, a piece of Singapore’s public housing story was consigned to the annals of history after National Development Minister Khaw Boon Wan said in Parliament that buyers and sellers of Housing and Development Board (HDB) resale flats must agree on a price before seeking an official valuation for the purpose of applying for an HDB housing loan. Cash-over-valuation (COV) — the difference between the flat’s selling price and its official valuation — which had dominated the HDB resale market for years, will no longer exist, in theory at least. In a practice that is unique to Singapore — it exists nowhere else in the world — almost all HDB flat sellers had hitherto obtained a valuation before marketing their property, usually as a guide to its worth in the market. To re-focus the market’s attention on the selling price, the HDB will now provide daily updates of recent resale transactions as soon as they are lodged. Sellers and their agents can now use them as comparables to set the initial asking price for their flats. Will it work? That depends on whether COVs remain relevant to the market. If the difference between the selling price and valuation remains high, the COV will continue to exist, whether by the same name or by any other. And marketing agents will continue to compile such data. The most frequent comment by property experts following Monday’s announcement is that buyers will now have to be extra vigilant. They will have to negotiate very hard lest the valuation falls way short of the agreed price. And if buyers cannot come up with the cash, they will have to pull out of the deal. But don’t buyers do this already? So, will it come down to the appraisers on the HDB’s valuation panel? Will they give an appropriate premium to some of a flat’s positive features? After all, some of the very high COVs reported by the media in the past were the result of the valuer not fully appreciating the market’s take on the flat. Personally, I feel that these valuations could have been executed better: It is inexcusable for the valuation to be so vastly different from the selling price, sometimes by as much as 15 per cent, unless there are very good reasons. One often-quoted reason is the long time lag between valuation and sale, and the effects of this may be compounded by fast-changing market conditions. But now the timing of the official valuation — after a price is agreed — means that any lag period between the actual sale and the date of valuation will only be as long as the time a buyer takes to request a valuation and its delivery. Previously, new market comparables were made available to valuers only once every two weeks. And if the flat is exposed on the market for six weeks, it means the valuation could be outdated by as much as two months or even longer, if it takes more time to sell the property. Needless to say, a lot can happen in two months. The biggest help to a valuation being done under the new system is that the property would have been exposed to the market for a period of time. Every property is unique simply because it does not occupy the exact same location as any other, and property is all about location. Comparables are after all comparables, not the real deal. And the adjustment process is not an exact science. The marketing ends when the seller feels he has received the best offer under the prevailing circumstances. If that is not the best indication of the value the market attaches to the property, what is? So, we can expect most official valuations to be very close to the agreed price in the absence of suspicious circumstances where the sale is not concluded at arm’s length. The days of COVs rising to as high as S$80,000 to S$90,000 should be a thing of the past — notwithstanding rapidly changing market conditions. If the HDB feels that resale prices are rising too quickly and not supported by the fundamentals, it can always lower its loan quantum to below 80 per cent, just as the banks do with private housing transactions when they feel the market has become too bubbly. Or it can even call for partial capital repayment as market conditions change. By Colin Tan – Director of Research and Consultancy at Suntec Real Estate Consultants Source : Today – 14 Mar 2014


More space for start-ups at one-north by end-2014 Budding entrepreneurs in Singapore will soon have more working space to turn their ideas into new products and services. Industrial developer JTC has launched a cluster site to provide more work and recreational facilities for start-ups. With the opening of JTC Launchpad @ one-north, the government plans to drive more private sector involvement in the start-up community. Block 71 at Ayer Rajah Crescent currently houses around 250 startups. It will soon be part of a cluster with two other blocks — Block 73 and Block 79. Together, the community size will be doubled to some 500 start-ups. Nine companies have already expressed interest in the new space. They include start-up incubator NUS Enterprise which has been in Block 71 for more than two years. NUS Enterprise has provided support to almost 200 young entrepreneurs, and it said the new space will provide opportunities for greater collaboration and networking. Dr Lily Chan, CEO of NUS Enterprise, said: “Some of our small companies can now go on to occupy — not just NUS companies, any company in the area — …larger spaces. “More importantly, in a community like that it’s not just about young start-ups. It’s about slightly more mature companies because they provide experience and interactions; they are the partners of the young companies, maybe even the acquirers of the young companies.” The expanded cluster will accommodate start-ups and incubators in industries such as infocomm, media and biomedical. Speaking at the launch, Minister of State for Trade and Industry Teo Ser Luck said the government aims to drive more private sector involvement. Mr Teo said: “What we’re trying to do is make sure that the private sector does most of the work within this Launchpad. The vibrancy has to be created by them. It will become a bottom-up approach, while the government takes a facilitating role in building this whole stage and platform for them to make things happen. “In Silicon Valley, for example, there is no government intervention as well, there’s just vibrancy. In Singapore, we realise we have our own uniqueness; we’ve got constraints as well. Some form of government intervention is necessary, but there comes a point where we think we can take a more supporting role.” The new cluster is built in collaboration with SPRING Singapore and other government agencies, including A*STAR, the Infocomm Development Authority, Media Development Authority and National Research Foundation, and is scheduled to be ready by the end of this year. Source : Channel NewsAsia – 12 Mar 2014


Far East Organization to build hotel on Sentosa Far East Organization has won the tender for a hotel site at Sentosa. The 60-year leasehold site at Artillery Avenue is situated on elevated ground and overlooks Palawan Beach. According to Sentosa Development Corporation, Far East will pay an upfront land premium of S$32 million. In addition, it will pay S$3.7 million annually, or 10 per cent of the total annual gross revenue, whichever is higher. The site has an area of about 45,000 square metres and was once a military parade square. It includes six blocks of barracks and a coach park. The development — to be named The Outpost — will be the fourth hotel on Sentosa that has been repurposed from its cluster of conserved buildings. Upon completion in 2018, it will bring the total number of room keys on Sentosa to 3,800. Source : Channel NewsAsia – 12 Mar 2014


Giant retail warehouse Big Box to open near Jurong East MRT Singapore’s largest retail warehouse store is set to open in the fourth quarter of this year, adding to developments that have sprung up around Jurong East MRT station. Big Box will have some 400,000 square feet of shopping space, featuring brands such as Akira, Mod Living, Castilla, Barang Barang and Novena. The services include a drive-through service that allows shoppers to place orders in advance before driving down to collect the items. Overall, the eight-storey complex will have approximately 1.3 million square feet of space including warehouses and logistic facilities. Jurong East is fast becoming a major suburban hub. Several malls have opened recently, including JEM and Westgate, and residents will soon benefit from new offices as well as the upcoming 700-bed Ng Teng Fong General Hospital. Big Box’s main shareholder is Singapore mainboard-listed TT International, which owns 51 per cent of the complex. Source : Channel NewsAsia – 12 Mar 2014


Ascott to manage first property in Myanmar Singapore serviced residence operator Ascott has secured a contract to manage its first property in Myanmar. The CapitaLand unit said on Thursday that the 153-unit Somerset Kabar Aye Yangon, slated to open in early 2018, is part of a mixed-use development that also comprises a luxury condominium. The serviced residence is a 15-minute drive from downtown Yangon and close to the Shwedagon Pagoda as well as the diplomatic quarters around Inya Lake. Ascott also announced its third property in Wuhan as well as its first property in Frankfurt on Thursday, which marked the start of its 30th anniversary celebration. Source : Channel NewsAsia – 13 Mar 2014


PropertyGuru considers listing in Australia or S’pore Online property portal group PropertyGuru is seeking to launch an initial public offering within the next 18 months, with Singapore or Australia the most likely listing destination, the company’s Chief Executive said yesterday. If the company lists in Singapore, it would be the first online property portal to list in the city-state, while in Australia, it would be the second after ipropertygroup, which raised A$37 million (S$42 million) in its 2007 IPO. “An IPO remains in the pipeline,” Mr Steve Melhuish, co-founder and Chief Executive of PropertyGuru, said in a statement. He did not elaborate on the size of the planned offering. PropertyGuru lists properties for sale and rent in four Asian countries — Singapore, Thailand, Indonesia and Malaysia. The company, which was founded in 2006 in Singapore, secured an investment of S$60 million in 2012 from Deutsche Telekom. In the statement, the company said visits to its websites across the four countries grew by 19 per cent to reach 125 million last year, while property listings increased by 60 per cent to 805,060 at the end of last year. It said Singapore topped its Web views, with 57 per cent of its Web traffic coming from the city-state. Source : Today – 12 Mar 2014


MND to study if reverse mortgages should be provided by private market or govt The National Development Ministry (MND) will study whether reverse mortgages should be provided by the private market or by the government in future. A reverse mortgage is a loan taken up by the owner using his property as collateral. This loan is then repaid with interest upon termination of the loan, or death, typically from the sales proceeds of the property. In Parliament on Monday, the government announced it has begun a “serious study” on reverse mortgages as another way for seniors to monetise their flat. Reverse mortgages were previously introduced in 2006 by NTUC Income. But the company later stopped accepting new applicants in 2009 because of the low take-up rate. Channel NewsAsia understands that there were just 24 cases during that period. The Housing and Development Board (HDB) said the low take-up rate could have been due to factors like a lack of familiarity with the scheme and a preference for the elderly to bequeath their flat to their children. Mohamed Ismail, CEO of PropNex, said: “Generally speaking, Singaporeans (being) Asians are still home proud. Many of them would like to hold on to an asset.” HDB also said the payouts determined by the provider at the time may not have been sufficiently attractive to the elderly. There could have also been the fear of outliving the fixed tenure of a loan, a maximum of 28 years in the past, which would have meant owners would have to sell their property to repay the loan. Associate Professor Chia Ngee Choon, from the Department of Economics at the National University of Singapore, said: “If the government is to be the provider, they have the advantage of economies of scale — they are better able to risk pool, they are also able to access a cheaper cost of fund for this product.” MND noted that in the past, the government did not provide financial assistance or guarantees to commercial providers of reverse mortgages. It said it had encouraged banks and financial institutions to offer reverse mortgages for HDB flats on commercial terms, based on providers’ evaluation of the costs and financial risks involved. Associate Professor Chia said that for the scheme to work, it will also have to provide a lifetime payout. She said: “The second expectation is that you will never have to have a negative equity. So at the point when the house is put up for sale, the accumulated loan that has been given to you should be able to be met by the value of the property at the time.” Some property analysts said communication will be key. Eugene Lim, key executive officer of ERA Realty Network, said: “At the end of the day, when you are at their age, a major concern is ‘I need money but I do not want my house to be taken away from me’. “The key is to explain to them clearly how the scheme works and if there is no hidden agenda and it is explained clearly, then I think there will be a buy-in. “At the end of the day, it is how the scheme is explained. It has to be explained in a very simple way, in a way they understand.” The government plans to consult and engage industry partners, experts and the elderly as part of the study. Source : Channel NewsAsia – 11 Mar 2014


Residential site at Yishun Avenue 9 attracts 5 bids A residential site at Yishun Avenue 9 attracted just five bids at the close of an Urban Redevelopment Authority (URA) tender on Tuesday, attesting to the weakened sentiment in the property market. EL Development submitted the highest bid of S$278.8 million for the 20,553.8 square metre site. The price translates to around S$4,844 per square metre of gross floor area. The other bidders for the site included a consortium comprising Fraser Centrepoint unit FCL Topaz and two other firms as well as Sim Lian Land. The site at Yishun Avenue 9 was launched for public tender on 16 December 2013. The site was offered for sale on a 99-year lease. Source : Channel NewsAsia – 11 Mar 2014


Developers required to use prefab bathroom units from 2nd half of 2014 The push to raise productivity in Singapore’s construction sector is taking on a new focus this year. New rules will soon take effect, pushing for greater use of productive technologies such as prefabricated components. From the second half of 2014, developers will be required to use prefabricated bathroom units (PBUs) for all residential projects on government land sales sites. Singapore Contractors Association said this is a significant step in getting upstream players like developers onboard productivity initiatives. PBUs are like huge Lego blocks that are hoisted up by a crane and then stacked, one on top of another. On average, prefab components already make up one third of each construction project by City Developments (CDL) which has been using prefab construction methods for over a decade. That is the highest level of prefab adoption among private developers in Singapore, compared to about 50 per cent for public housing projects. CDL said that with the new rules, more projects could have a prefab component in them in the near future. Another developer, Frasers Centrepoint, said it has been using a mix of productive technologies in all their developments since 2007. Cheang Kok Kheong, chief executive officer of Frasers Centrepoint Homes, said: “These include prefabricated railings, precast refuse chutes and dry construction options such as the use of drywall for some of the internal walls.” Mr Cheang added that the improvement in site productivity more than offsets the incremental cost of using productive technologies. Channel NewsAsia understands that currently, private developers in general have very few projects with prefab, and any prefab component is usually limited to the rubbish chute and staircases. The push towards greater adoption of prefab will also help mitigate the rising cost of foreign labour. Allen Ang, head of green building at CDL, said: “In countries like Australia, their labour cost is almost four times that of Singapore. In Hong Kong, it’s about three times more than ours. In these countries, developers have no choice but to adopt extensive prefabrication to address the high worker salaries. “In Singapore, with the recent stringent controls on foreign labour, and with prefab bathrooms being mandated, we foresee that our country is trending towards Hong Kong, Australia, and Japan.” Senior Minister of State for National Development Lee Yi Shyan said: “While the adoption of precast and prefabricated components in HDB projects is high, the same cannot be said of projects in the private residential sector.” He added that in order to break the inertia and to adopt unfamiliar but productive construction methods proven overseas, the government will also require selected Government Land Sale (GLS) sites to adopt new productive technologies such as Prefabricated Prefinished Volumetric Construction (PPVC) and Cross Laminated Timber (CLT). Mr Lee was speaking at his ministry’s Committee of Supply debates in Parliament on Monday. Despite more prefab work coming along, contractors said it will be easy for them and their sub-contractors to adapt because productivity initiatives will be built in right from the upstream, or design phase. Ho Nyok Yong, president of Singapore Contractors Association, said: “The main contractor might just tender the project, and then he’ll sub-contract to the medium-sized, and then he might have sub-sub (contractors) also. “The bigger guy will (be) teaching the smaller guy to learn their part. The smaller guy may not necessarily run out of jobs because there’s a need (for)… specialised things like installation. If you use precast, they (will be) doing (the) installation.” The contractors association estimated that costs for construction projects could increase by 10 per cent in the short term due to the cost of transporting prefab blocks. However, as the building industry adopts higher levels of prefab construction in the near future, CDL said, more precast supply could enter the market, thereby lowering costs. Mr Lee also said in Parliament that the Building and Construction Authority will roll out more land tenders to have about 10 integrated construction and precast hubs by 2020. He said that this, together with the Singapore construction firms’ precast yards in Malaysia, are sufficient to meet the rising demand of precast components of the industry in the years ahead. Source : Channel NewsAsia – 11 Mar 2014


Private home resale volume lowest in more than five years The resale market continued its downward trend as sales of previously-owned private homes last month slumped to their lowest level in more than five years, a further indication of the impact the cooling measures have had in dampening demand. Flash estimates by the Singapore Real Estate Exchange (SRX) yesterday put the overall resale volume of non-landed private homes at 242 units last month, down 18.5 per cent from January and 22.2 per cent from a year earlier. The data, which shows the lowest monthly resale volume since December 2008, illustrates the impact of cooling measures, analysts told TODAY. They added that resale prices, which dipped after two consecutive months of growth, will see a further correction this year, although the decline will be marginal. The weak demand is a continuation of the market trend last year, when resale volume dropped by 50 per cent, said PropNex CEO Mohamed Ismail. “More sellers are not motivated to dispose of their properties, as the cooling measures mean some of them will not be able to buy properties after they sell because of the stringent restrictions,” he said. Sellers are also unwilling to budge on pricing, noted OrangeTee’s Head of Research Christine Li. “Sellers will look at developers’ recent land bids — which were bullish — and think that the current price level is sustainable,” she said. “So they are not in a rush to sell or cut prices, creating a mismatch of expectations between sellers and buyers, whose appetites may be capped by the total debt servicing ratio and the additional buyer’s stamp duty.” The SRX data also showed overall resale prices declined 2 per cent last month, following a gain of 1.1 per cent in December and 1.9 per cent in January. The biggest price drop last month was in the core central region at 3.9 per cent, while prices in the rest of the central region rose 0.4 per cent. Against this backdrop, analysts said they expect resale prices to dip marginally this year. “In 2013, despite all the government measures, we still had a positive growth of 1.1 per cent in resale prices. This year, at best, we will see a marginal correction of 5 per cent,” Mr Ismail said. Ms Li said she expects a 2 to 5 per cent softening in the new and resale markets. And with close to 100,000 units of new private homes expected to be released over the next three to four years, based on Urban Redevelopment Authority data, “supply will be greater than demand and buyers will have more choices and stronger bargaining powers”, said SLP International’s Executive Director of Research, Mr Nicholas Mak. “That means sellers will be more willing to negotiate prices going forward”. Source : Today – 11 Mar 2014


UIC makes formal offer to take Singapore Land private United Industrial Corporation (UIC) has made a formal offer to take mainboard-listed Singapore Land (SingLand) private. UIC announced last month that it wanted to buy over the remaining 19.64 per cent of shares in SingLand that it did not already own. The deal is valued at S$761.7 million. UIC is offering to pay S$9.40 for each SingLand share. It said that buying out minority shareholders will give it greater management flexibility over SingLand. SingLand is one of Singapore’s largest landlords. Its properties include Singapore Land Tower and Clifford Centre in the heart of the central business district. Shareholders have up to April 7 to accept the offer. Source : Channel NewsAsia – 10 Mar 2014


Non-landed private home resale prices fall 2% in February The number of resale non-landed private homes transacted in February was the lowest in more than five years. This is according to latest numbers from the Singapore Real Estate Exchange (SRX). The data also showed that resale prices fell by 2 per cent from January. Property consultants said that they expect the resale market for private homes to remain fairly muted amid current cooling measures. Two hundred and forty-two resale non-landed private homes changed hands in February. This is down by 22.2 per cent from a year ago, and the lowest monthly sales number since December 2008. When compared to January 2014, when 287 units were transacted, the drop was 18.5 per cent. It is also the fourth consecutive month of decline, hurt by property cooling measures which are currently in place. Colin Tan, director and head of research & consultancy at Suntec Real Estate Consultants, said: “In a normal year, you would expect some resale due to upgrading, but what happens is that a lot of these upgraders, or potential upgraders, are staying put. “(This is) partly because of cooling measures, which require upgraders to pay the stamp duty first, and then after they sell the existing unit, to claim it back. It is burdensome and they have to come up with cash resources which could be used for, let’s say, renovation. Sales will continue to be weak, but this is not sustainable.” The SRX numbers showed that overall prices have also declined, dropping by 2 per cent month-on-month, led by homes in the city area. According to the SRX Property Resale Index, prices of homes in the city dropped 3.9 per cent, followed by suburban home prices, which decreased 1.8 per cent. City fringe homes, however, saw resale prices climbing by 0.4 per cent. The last time the Resale Index for the Core Central Region fell more than 3.9 per cent was in March 2012, when it fell by 4.7 per cent after the introduction of the first Additional Buyer’s Stamp Duty cooling measure on 8 December 2011. Mr Tan said: “They are freehold and they appeal more to foreigners, and since the Additional Buyer’s Stamp Duty has been imposed, the market has softened slightly. “The local market also doesn’t help because these units are fairly big, 2,000 square foot and above. Even though dollar per square foot comes down, it is still quite a substantial amount, maybe 2-3 million. So that is really beyond affordability for most locals.” Property consultancy OrangeTee said prices could fall by up to 5 per cent for 2014, and that the resale market will remain soft amid current cooling measures. Christine Li, head of research & consultancy at OrangeTee, said: “The current housing policies still favour new home sales, especially in a weakening rental market. A lot of investors will not consider buying a resale home because they have to compete with other landlords to get tenants, and the number of tenants are actually shrinking because of government policies on manpower. “We think that investors will not come back to the resale market unless rentals show some drastic improvement in the coming years.” In terms of rental prices, the SRX data showed that overall rental prices fell by 1.0 per cent in February, after a 1.2 per cent gain the previous month. The largest decline of 1.9 per cent was for property in the city fringe area. This was followed by a 1.3 per cent decline in suburban areas. Rentals in the Core Central Region fell by 0.6 per cent. Source : Channel NewsAsia – 10 Mar 2014


HDB moves to reduce focus on COV To reduce the focus on Cash-Over-Valuation (COV) in negotiations during the sale of a flat, the Housing and Development Board (HDB) will only accept valuation requests from resale flat buyers after they have been granted an Option to Purchase by flat sellers. National Development Minister Khaw Boon Wan, who announced this change in Parliament on Monday, said this will restore the original intention of valuation, which is to help buyers obtain a housing loan. This change took effect from 5pm on March 10. Mr Khaw said: “HDB will rationalise the process of price negotiations and restore the original intention of valuation, which is to help buyers get a housing loan. “Negotiating based on price rather than COV will take some getting used to. However, it is a useful move for long-term market stability.” The HDB will also publish daily prices of resale transactions as soon as they are registered, aimed at getting negotiations to focus on recent transaction prices and reduce the focus on COVs. Currently, resale prices are published twice a month. The change is timely, with many HDB resale flats being sold at or below valuation, said the government. More than a third (36%) of resale transactions last month were priced below valuation. Prices in the public housing resale market have seen a period of high growth in recent years. But prices declined in the third quarter of last year, a first in four years, after a slew of property-cooling measures were introduced. Some property analysts say changes in the behaviour of buyers and sellers will take time. PropNex CEO, Mohamed Ismail, said: “This immediate implementation of such a rule will likely create a more conscious effort in the minds of buyers in particular – ‘Am I paying the right price? Will I be affected by any of these valuation that did not match up to the price that I’ve agreed?’ “And in that instance, probably we will also see many of the options being not exercised when there is a gap in the expectation of the buyer’s valuation and the actual valuation.” If the buyer does not exercise his option, he will lose his deposit of up to a thousand dollars. So buyers have to plan ahead. ERA Realty Network’s key executive officer, Eugene Lim, said: “Before the buyer goes house hunting, he should actually clear the part about how much loan he is able to get – applying for the HLE (Loan Eligibility) letter from HDB, if you’re taking a loan from HDB. Or, if you’re taking a bank loan, you should speak to a banker to have an in-principle approval on an approximate loan amount you can get. “So with the approved amount, it basically gives you an idea of the price of the property that you are looking at.” Mr Mohd Ismail also noted that COV could continue to be a point of reference in estates where resale flats are still being transacted with a cash premium. “Even though we say you can’t do a valuation, that doesn’t stop sellers from taking reference from the COVs of the neighbouring flats. And I’m sure that the private organisations and portals are still feeding this information. As I said, old habits die hard and it will take some time,” he said. On the government’s property-cooling measures, Mr Khaw said it would still be premature to withdraw them as prices are still rising albeit at a slower rate. He added the government will continue to monitor the market closely. To further protect property buyers, the Council for Estate Agencies (CEA) will launch an online guide to provide general tips to consumers who are thinking of buying a foreign property. The CEA will also step up its effort to regulate estate agents marketing overseas property developments in Singapore. Mr Khaw advised members of the public to report to the CEA any marketing activities by unlicensed foreign estate agents so that the CEA can investigate and take appropriate actions. Addressing some MPs’ concerns about more Singaporeans turning to property investments overseas, Mr Khaw said the government does not interfere with such investment decisions. But he warned that it is a case of buyer beware. Mr Khaw said: “But I share the concerns of Mr Seah Kian Peng and Mr Liang Eng Hwa. I echo their words of caution. Property markets move in cycles. For foreign properties, there are added risks and complexities, because their legal and regulatory frameworks governing the purchase and financing agreements are different from ours. “And they may change suddenly when domestic politics pushes for a change in policies. Do go in with your eyes open.” Source : Channel NewsAsia – 10 Mar 2014


Govt studying reverse mortgage as means to help elderly The government is seriously studying the reverse mortgage scheme as an additional option to help the elderly in Singapore monetise their flat. Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral. The owner then repays the loan with accumulated interest upon termination, or death, usually with sales proceeds from the flat. The idea of a reverse mortgage was mooted by some participants at the Our Singapore Conversation on Housing sessions last year. “Many told us that they want two things: age in place and… to have an asset they can bequeath to the family,” said Minister for National Development Khaw Boon Wan. With a better understanding of the needs of seniors and experience in other monetisation schemes for the elderly — like the Lease Buyback Scheme that allows the elderly to sell back part of their existing lease to HDB while retaining a 30-year lease — Mr Khaw says it is timely to revisit the option of reverse mortgages. However, he also noted it is something that NTUC Income had tried in 2006 but did not quite take off. “We hope to formulate a practical scheme for our elderly. Along the way, we will also see if the Lease Buyback Scheme can be further improved as suggested by some members here, to be extended to larger flat types,” said Mr Khaw. Looking at the year ahead, Mr Khaw said he plans to have more conversations with Singaporeans on the relationships and values they hold dear as a society and how housing policies can better support them. Source : Channel NewsAsia – 10 Mar 2014


REITs: Good or bad? As small and medium-sized enterprises (SMEs) struggle with labour tightening in the push for improved productivity, they are also being squeezed by landlords demanding ever-rising rents. Many businesses that lease commercial and industrial space, especially those under the real estate investment trust (REIT) structure, are hurting, and I must say, hurting real bad. Over the course of this week, Members of Parliament have called on the Government in the House to rein in industrial and commercial rents to help ease the burden on businesses. Whenever I listen to the rental woes of SMEs, I am reminded of a report many years ago about a local coffee-shop chain that made it big. When asked by the reporter for the secret of its success, the owner said it just had the foresight of buying its premises in the early days of the business. Does it mean that great success or failure simply boils down to whether the business owns or leases its premises? If you talk to the affected tenants, the answer is a resounding yes. Even those doing all right feel it could be a matter of time before they are squeezed by rentals. There is very little margin for error: All it takes is one business oversight or a stretch of poor sales. It does not help that the supply of business space has always been behind the curve. Policymakers have always been quick to highlight the scarcity of land in Singapore. I think this is an excuse: It is not about the quantity but the type, mix and distribution as well. You need to get this right, too, because you can always find places where there are no takers for vacant space. And when you have a scarce resource, you cannot simply leave it to market forces. In fact, rationing or spacing out the supply is already a form of intervention. It is also not only about raising productivity by working smart. It is about moving up the value chain whether you are in a sunset or sunrise industry. Businesses that thrive or achieve higher productivity are usually helmed by creative leaders, but how do we nurture creativity when a lot of business ideas and entrepreneurial talent are nipped in the bud by the initial high rental costs? Aside from the supply of business space, we also need to ask whether the REIT structure is partly responsible for the current woes of SME tenants. Almost all the literature and so-called independent market reports are on the side of REITs, often extolling the benefits that these professionally-managed collective investment schemes bring. However, academics and analysts lament the dearth of local data from which truly independent studies can be conducted to put the debate to rest. But nobody is volunteering this data, understandably not from the REITs themselves, but also from government bodies that possess some of these figures. More transparency is needed here. To be fair, the REIT managers are simply doing their job and doing it well: After all, their rewards and salaries depend on how well they do. But why are the actions of REIT landlords praised in the past but not today? Then, they were lauded for breathing life into ageing commercial properties and livening up the business landscape. Has anything changed? As far as I know, they have been going about doing exactly the same things they were doing in the early days. However, in life, there always has to be a balance. Too much of a good thing can eventually turn out to be detrimental and this may be so in the case of REITs. I know it is not very scientific and those who are always demanding proof before they act will never be satisfied. Not being able to prove something with data, or because of the lack of it, does not automatically make it an untruth. The problem with REITs may not be so much with the structure itself, but their dominance of the business space landscape. Some describe the present market as akin to an oligopoly. How do we change this to make it more competitive? Do we limit each REIT to only a few properties to introduce more competition? Nobody has the answers now but it is a problem we need to resolve urgently. If not, because the shares of local REITs are listed and easily tradeable, all of the benefits — especially if REIT managers have been very successful in raising value for unitholders — could eventually land in foreign hands. Then we will become renters in our own country and have the life sucked out of us. By Colin Tan – Director, Research & Consultancy at Suntec Real Estate Consultants Source : Today – 7 Mar 2014


More rental data to be available to public later this year More comprehensive rental data will be made available to the public later this year, according to Minister of State for Trade and Industry Teo Ser Luck. Speaking in Parliament during the Committee of Supply debate on Thursday, Mr Teo said small and medium enterprises (SMEs) have given feedback that they face significant rental spikes when their tenancies are renewed. Mr Teo said: “To help businesses make more informed decisions about the rental market, the SME Workgroup has suggested that the government share more rental information. I think Mr Zaqy Mohamad (MP for Chua Chu Kang GRC) has also mentioned about this rental benchmark transparency. “MTI (Ministry Of Trade and Industry) and URA (Urban Redevelopment Authority) have taken this feedback on board — we are looking into publishing more comprehensive shop rental data in our indexes later this year, to make our pricing more transparent.” Addressing questions by MPs about the impact of real estate investment trusts (REITs) on the rental market, Mr Teo said REITs are not necessarily the leading players in the rental space market, as they currently own about 13 per cent of retail, and 16 per cent of industrial rental space. He said they cannot charge excessive rents if there is no demand. But he added the government will monitor the rental market and intervene if there is evidence of collusion or market domination by any player, including REITs. Mr Teo said rents are likely to moderate in the medium term as the government has released a significant amount of land for shop space and multi-user factory space. Source : Channel NewsAsia – 6 Mar 2014


Median COV for HDB resale flats falls to zero in February The overall median Cash-Over-Valuation for HDB resale flats fell to zero in February, according to latest data from the Singapore Real Estate Exchange. It is the lowest median since the Singapore Real Estate Exchange began collecting records in 2006. It was $5,000 in December 2013 and $3,000 a month later, finally hitting the zero mark in February 2014. Nearly half of 26 estates across Singapore saw zero, or negative, median cash premiums for flat transactions. Analysts said it’s probably a case of the supply of resale flats outstripping demand in those estates. Mr Thomas Tan, executive director of RE/MAX, said: “You can’t say it’s widespread in Singapore because not all the flats in Singapore are transacted under value. Because there are flats in Singapore like in Bishan, in Bukit Merah area, where they are still commanding quite a fair bit of premium in terms of the Cash-Over-Valuation.” Topping the chart in February for negative cash premiums seen in resale transactions, by estate, was Sengkang, where 69 per cent, or 20 flats, sold under valuation. This is followed by Woodlands with about 54 per cent, or 19 flats, and Jurong West and Yishun, 15 flats each. Analysts said these estates in non-central locations naturally command less of a premium. Overall, the volume of resale transactions dipped from 931 in December 2013, to 918 in January and an estimated 734 in February 2014. Mr Chris Koh, director of Chris International, said: “Historically also, February, with Chinese New Year, and you know about two weeks of Chinese New Year, you see lesser activities. Not many sales, not many purchases during those two weeks. So again, that would put an impact on prices.” Analysts said the various property cooling measures in place, plus the launch of Build-To-Order flats, have driven demand away from resale flats. They added that falling premiums indicate a measure of success in the government’s move to engineer a “soft-landing approach” in stabilising the property market. Resale prices fell 1.8 per cent in February. Going forward, analysts expect this to be the trend till mid-2014, until more buyers enter the resale market again, lured by cheaper buys. Source : Channel NewsAsia – 6 Mar 2014


GLP to buy S$1.7b real estate assets in Brazil Global Logistic Properties (GLP), the real estate giant whose key shareholders include Singapore’s sovereign wealth fund GIC, has agreed to pay Brazil’s BR Properties 3.2 billion reais (S$1.7 billion) for property assets in the South American country. Singapore-based GLP is buying 34 industrial and logistics facilities in Brazil that will lead to a yield of 9.4 per cent, the company said yesterday in a regulatory filing. The deal is subject to regulatory and shareholder approval. The portfolio comprises 13 million sq ft of completed industrial and logistic assets, with a lease ratio of 99 per cent. More than 86 per cent is located in the primary logistics markets of Sao Paulo and Rio de Janeiro, which together account for more than 40 per cent of Brazil’s gross domestic product. Mr Jeffrey Schwartz, co-founder and Chairman of GLP’s executive committee, said the deal will be “immediately accretive to GLP”. He added: “BR Properties’ portfolio of high-quality, strategically-located logistics assets complements our existing portfolio well and will further strengthen our market leadership position in Brazil.” GLP has been investing in Brazil since 2012, when it was part of a group that spent 2.9 billion reais to acquire all the logistics facilities of the private equity firm Hemisferio Sul Investimentos. Mr Mauro Dias, President of GLP Brazil, yesterday said: “Following this high-quality acquisition, our completed portfolio in Brazil will increase to 28 million sq ft.” Source : Today – 7 Mar 2014


Ho Bee Land acquires London office building Ho Bee Land continued its diversification into the United Kingdom by purchasing an office building that once served as London’s General Post Office. The Singapore developer will pay £171 million (S$362 million) for the freehold property known as 1 St Martin’s Le Grand, it said in a statement on Friday. “The acquisition of 1 St Martin’s Le Grand is our second major office acquisition in the city of London, and shows our confidence in the London office market which is strengthening rapidly in tandem with the improving UK economy,” Ho Bee chairman and CEO Chua Thian Poh said in a statement. “The acquisition is part and parcel of the group’s continuing diversification overseas in times when the local market is facing very strong headwinds with limited investment opportunities,” he added. St Martin’s Le Grand was originally constructed in the late 19th century. The building was redeveloped in the late 1980s. The building has 276,792 sq ft of Grade A office space spread over basement, ground and nine upper floors. Based on Ho Bee’s acquisition price, St Martin’s Le Grand will provide a nett yield of 5.5 per cent with total annual rentals of more than £9.9 million. Source : Channel NewsAsia – 7 Mar 2014


Tuan Sing Holdings sees encouraging take-up for Cluny Park Residence Property developer Tuan Sing Holdings said it is seeing encouraging take-up from buyers for its Cluny Park Residence project. The high-end condominium was launched on Thursday. Located in the Bukit Timah district, the freehold development spreads across close to 49,000 square feet. Cluny Park Residence has 52 units and each unit has been priced from about S$2.3 million. So far, about 20 units have been sold. The project is expected to receive its Temporary Occupation Permit in the third quarter of 2016. Tuan Sing’s earlier residential projects include Botanika, Adam Park Condominium and Leedon Park Development. Source : Channel NewsAsia – 6 Mar 2014


BCA hopes developers will adopt new technologies to increase productivity The Building and Construction Authority (BCA) has said the output productivity for building projects in the construction industry has risen by 1 to 2 per cent in the last couple of years. But it believes more can be done and it hopes developers can adopt new technologies such as the Prefabricated, Pre-finished Volumetric Construction and Cross Laminated Timber (CLT) in their projects. Whether it is in training their workers or adopting more efficient construction methods, the BCA said contractors have done a lot in the last few years to drive productivity growth. But it wants to encourage other players across the entire industry to push it even higher. John Keung, CEO of the Building and Construction Authority, said: “We think that it is really quite critical to raise further the buildability score to make sure that when the designers design buildings, architects, engineers design buildings, they bear in mind the need to make sure that it is easy to build. “We also think that developers in both the public and private sector need to do more to drive productivity improvement for their projects.” In this regard, the government will mandate the use of productive technologies for certain Government Land Sales sites, which will also help to minimise noise and dust at worksites. BCA said Prefabricated, Pre-finished Volumetric Construction allows whole apartment-sized units, complete with internal fixtures, to be installed on-site. This could boost productivity by up to 50 per cent in terms of manpower and time. The other new technology is CLT, which can be used for the construction of walls and floors. It is much lighter than steel and concrete and BCA said it will help to reduce costs of foundation works. CLT could drive productivity improvement of 25 per cent to 35 per cent in terms of manpower and time savings. Some industry players said the construction cost is around S$250 to S$300 per square foot on average right now, and the adoption of new technologies could potentially push costs up by 10 to 20 per cent during the early stages of implementation. BCA said it will look at ways to incentivise developers to take on new technologies. However, some developers said there may be logistics issues when transporting larger prefab components from factories located across the Causeway. Lim Yew Soon, managing director of EL Development, said: “There would be time involved in terms of shipping the elements over, the whole infrastructure… the custom clearing process has to be assisted by the relevant authorities to make it more seamless. If the materials cannot be delivered on time due to custom clearance or the factory’s fabrication inefficiency, the pace of construction may be delayed.” To further drive productivity, the Singapore Institute of Architects said it is in talks with BCA about implementing a national productivity quality standards and specifications for building designs. Theodore Chan, president of the Singapore Institute of Architects, said: “Maybe we are talking about 10 types of doors, 10 types of railings that have been tried and tested, and design not by just one company but the industry as a whole, and this becomes the building blocks of our building components. So for designing a building, it is a question of calling down these components and putting it together. “Give us 5-10 years and I think it will really take off because people will begin to see the benefits of it where everyone speaks the same language of design and component detail. “There will be less misunderstandings, less misunderstandings mean less problems, more productivity, less legal suits going on, because we are talking about components and building features that are tried, tested and accepted.” The institute said it has also reached out to the Housing and Development Board as part of efforts to get the industry to share information and come up with a set of national best practices. Source : Channel NewsAsia – 6 Mar 2014


Property agents turn to rental market as sales slow Real estate agents are increasingly turning from the once-lucrative resale market to rentals, as they hunt for a living to preserve their careers and clients during what is expected to be another challenging year for the industry. The shift comes as the rental market holds its own in the housing sector, which has been hit by slowing demand following several rounds of cooling measures and lending curbs, industry practitioners told TODAY. “The market definitely has slowed down, transactions have been reduced and, of course, real estate agents are feeling the pinch. So, many of them are switching from sales to rentals,” said President of the Institute of Estate Agents (IEA) Jeff Foo. He added that the rental market has not been as badly hit, adding that the regulation requiring new permanent residents to wait three years before they can buy Housing and Development Board (HDB) flats is among the factors that have held up demand. The HDB resale market continued to lose momentum in January, with transactions down 34.6 per cent on-year, according to the Singapore Real Estate Exchange (SRX). For the whole of last year, transactions had plunged by almost 30 per cent, the lowest since HDB started collecting the data in 1997. In the private resale market, an estimated 310 non-landed homes were sold in January, a sharp decline of 70.2 per cent from a year ago, SRX said. Chief Executive of real estate agency GPS Alliance Jeffrey Hong said: “There are still transactions in both the HDB and private rental markets and (conditions should) remain like that for the next one quarter or two. So for now, things are still quite okay for the agents.” One agent who has taken advantage of the relatively resilient rental market to maintain his income level is Mr Victor Chan from DWG agency. “(Resale transactions) have definitely slowed down since I started about a year ago … I’m doing more rental cases now; that’s how we’re surviving,” he said. However, industry insiders say they expect even the rental market to suffer, with an onslaught of new private homes expected in the coming months. With foreign hiring increasingly tightened, the tenant pool for these new homes will be limited, they said. “It’s going to be tougher. The rental market has always seen steady volume. But if more agents enter the market, it means the new entrants are taking the volume from somebody else. And with the huge supply of newly completed (private) homes, more landlords will be fighting for tenants,” said the Chief Executive of Century 21, Mr Ku Swee Yong. When that happens, real estate agents who fail to diversity their income stream will be forced to seek other employment opportunities. “Agents have to be very resourceful and they have to work doubly hard to reach out to more consumers because when the market swings, it becomes very competitive,” said PropNex Chief Executive Mohamed Ismail. “Previously, an agent could focus on one area, such as HDB, but today you can’t.” Mr Foo added: “You just have to bite the bullet and ride the storm and hope for the best. I think the market will go through some correction and the fitter ones will survive. But those who really can’t cope, many of them would think it’s better for them to switch careers.” Source : Today – 6 Mar 2014


Jumabhoy family developing luxury villas in Bangalore The Jumabhoy family, once the richest Indian family in Singapore, is developing luxury villas in the Indian city of Bangalore, and the units will be made available to investors in Singapore in a private preview this Saturday. This is the first property development under the Jumabhoy family name in more than a decade. The Jumabhoy family migrated from western India to Singapore in 1916, and made a name for themselves in real estate, developing Scotts Shopping Centre and the Ascott. At its peak, their listed Scotts Holdings had assets worth almost S$750 million and a presence in Southeast Asia, the UK and Australia. But a split among family members led to a sale of its main property assets in the late nineties. Now, members of the family’s third generation – Iqbal, Asad and Mimi Somjee – are engineering a comeback through a real estate vehicle, Raffles Residency. Its first project, Raffles Park, consists of 61 villas spread over 15 acres of land in Bangalore. The first phase, comprising 10 villas, was only marketed in India and has been fully sold. Phase 2, comprising 15 villas, will now be open to non-resident Indians – referring to persons of Indian origin and overseas citizens of India – and India-incorporated companies in Singapore. With an average plot area of 4,500 square feet, each unit will sell for around S$1.32 million. Mr Iqbal Jumabhoy is upbeat about the project he has undertaken with his siblings Asad and Mimi Somjee. He said: “Interestingly, we have not even launched it. We have had a preview in Bangalore, and on the back of that preview, we actually sold 20 per cent of the houses pretty much without a launch. And in Singapore too, we are doing very targeted meetings with people. And we are showing it for the first time here.” Commenting on what gave him and his siblings the idea to enter the Indian property market, Mr Iqbal Jumabhoy said: “To start with, we had the land. The second part of it, was therefore, what to do with it. “The easiest thing would be to sell it or team up with another developer. But the fact that we had an existing team of people within The WIRE Group – which is another company that I formed some years ago – gave us the courage to work on this together. “The second is that Bangalore is the IT hub of India, and the consequence of that is that you have got a large number of senior professionals who have lived or worked abroad, and they come back with expectations and needs, which perhaps (are) not easily served by the existing products.” When asked what is next after Raffles Park, Mr Iqbal Jumabhoy said: “We are currently in discussion on a couple of other projects. One of them is an extension to the existing Raffles Park, and we are in discussions with surrounding landowners. “The second is a much larger project. That project, if it comes through, is with a landowner who owns between 150 to 200 acres of land. So that would be a slightly different kind of project.” Source : Channel NewsAsia – 4 Mar 2014


Higher commission to drive property sales Property agencies say some developers are offering a higher commission to help boost sales at their projects. This comes amid slowing demand as government property-cooling measures and tighter home loan regulations take effect. Agents say the commission could be as high as 3.5 to 4 percent for hard-to-sell units, and that’s the highest commission rate in five years. As a result, some agents are focusing on new units rather than resale homes. Property agent Kelly Ho decided four years ago to switch from selling residential units on the resale market to those offered by developers instead. Today, many of her peers are doing the same as sales activity in the resale market slows. Ms Ho, an associate team director from PropNex, said some developers have been offering higher commission to drive sales since the third quarter of last year. PropNex said 20 to 30 percent of its agents have shifted from marketing resale units to focus on new residential projects. Of the 21 projects it is presently marketing, PropNex said the average agent commission rate is about 2.1 percent. That’s about twice the commission compared to what’s offered when property sales were brisk. PropNex CEO, Mohd Ismail, said: “The high commission of more than 3 percent only ‘triggers’ after the initial launch, when it is proven that the product is difficult to sell. “In the past, even for those difficult projects, at its max, it is about 2%. Today I can say that projects that are at the tail end and difficult to sell, (the commission) can go as high as 3.5 to 4 percent.” Ku Swee Yong, CEO of Century 21 Singapore, said: “In the past downturn, the commission for selling units went as high as 8% and that’s in the River Valley Road area. “Today, in this slowdown, it is not a slowdown in transaction volume due to external economic conditions, it is an artificially created policy environment which is creating a 50% drop in transaction volume. “So with these additional incentives coming in, property agents may still be hard pressed to find solutions to help buyers invest their money because of loan restrictions, age restrictions on borrowings.” Agents said that property units that are difficult to sell are typically either very large, more expensive or have less attractive attributes. In some cases, developers may try to spur sales in order to comply with Qualifying Certificate (QC) rules. Under the Residential Property Act, developers whose shareholders and directors are not all Singaporeans have to get a QC to buy a residential property. One condition of a Qualifying Certificate or QC requires them to complete construction of the development within five years and to sell all units within two years of obtaining the temporary occupation permit. Property agents said that currently, executive condominium (EC) projects offer the lowest agent commission, at around 0.5 to 0.7 percent, partly because the demand for ECs is seen to be more resilient than other private homes. Mr Ku added that EC developers who are launching new projects at S$700 to S$800 per square foot have very tight margins and are unlikely to offer high commissions to agents as well. Source : Channel NewsAsia – 3 Mar 2014


S’pore ranked world’s most expensive city by EIU Singapore has jumped to the top of the Economist Intelligence Unit’s (EIU) ranking of the world’s most expensive cities, overtaking the likes of Tokyo and Osaka as the Singapore dollar appreciated against the yen. Singapore was ranked sixth in the EIU’s survey last year, behind the two Japanese cities, Sydney, Oslo and Melbourne. According to the EIU, Osaka and Tokyo fell off the top of its cost of living ranking because of the weaker yen. Tokyo, the most expensive city to live in for 2013, fell to joint sixth place alongside Caracas, Geneva and Melbourne, while Paris is second, ahead of Oslo, Zurich and Sydney. Ten years ago, Singapore was number 18 on the list. The EIU report compares the price of products and services such as food, clothing, transport and domestic help among 140 cities with New York city as a base. According to the survey, Singapore’s curbs on car ownership, which include a quota system and high taxes, make it the most expensive city to run a car. A new Toyota Corolla Altis, for example, could cost as much as US$110,000 in Singapore but only US$35,000 in Malaysia. And overall transport costs in Singapore are almost three times higher than those in New York. But the survey does not include public transport, which is most commonly used by Singaporeans. In addition, the lack of natural resources and energy supplies means Singapore is the third most expensive city for utility costs. The survey also shows that Singapore is the priciest place in the world to buy clothes, as shopping malls along the prime Orchard Road shopping belt import luxury European brands. As for housing, Singapore, being smaller in size than New York City, has seen home prices jump to record highs in recent years amid rising wealth and an influx of foreigners. But the survey does not include public housing. And it must be noted that the EIU survey is aimed at helping companies and HR managers calculate allowances for executives or expatriates being sent overseas. This means that their spending patterns may differ from locals. Hence, while cars and utilities are expensive, public transport and hawker food in Singapore are cheaper than in most developed cities. And latest data also show that in January, consumer prices in Singapore rose at their slowest pace in four years, rising by 1.4 per cent from a year ago. Source : Channel NewsAsia – 4 Mar 2014


Weakness in en bloc market to continue, say analysts The en bloc market, which has been subdued following additional tightening measures imposed on the property sector last year, is expected to remain quiet this year as developers turn increasingly cautious, while sellers are reluctant to budge on asking prices. According to data provided by property firm CBRE to TODAY, the number of en bloc sales fell to only seven last year from 25 in the previous year and 49 two years ago. The value of these deals mirrored the trend, falling to S$572 million last year from S$1.4 billion in 2012 and S$3.02 billion in 2011. With the cooling measures remaining in place, this segment of the housing market will likely remain in the doldrums. “Looking at the whole of last year, there was quite a fair bit of land under the Government Land Sales (GLS) programme, so that swayed more developers to that. And many of the GLS sites come vacant, so developers don’t have to price in the demolition cost,” said CBRE Head of Research Desmond Sim. “The cooling measures played a part in limiting the end-selling price of the redevelopment. For developers to go the en bloc route, there must be a good enough premium between the land sale and the end-selling price,” he added. Mr Tan Kok Keong, Chief Executive of property consultancy REMS Advisors, said: “Many of the asking prices of the ongoing tenders are on the high side. I don’t think that’s achievable in this current market.” “An improvement in market sentiment coupled with a reduction in GLS and a reduction in the unsold inventory will make some developers relook at en bloc, but looking at the results announcements of the developers, many of them are looking overseas for opportunities instead,” he said. The long and sometimes tedious en bloc sale process does not sit well with developers, especially in the current weak market as the additional buyer’s stamp duty (ABSD) will be imposed if the redevelopment is not completed and fully sold within five years, said Mr Ku Swee Yong, CEO of property agency Century 21. “In the case of an en bloc, the five-year point starts when the developer puts in the deposit to buy the site. But if this en bloc doesn’t have 100 per cent consent from the residents, they have to go to the Strata Titles Board for hearing and this takes six to nine months. This eats into the developer’s timeline and it will then have to rush to prepare for launch,” he said. Such constraints are among the reasons developments such as Eunosville and Riviera Point have been unsuccessful in previous en bloc attempts. Both estates have recently been relaunched for sale, joining others such as Jervois Gardens, 165 Moulmein Road and The Versailles off Guillemard Road. Analysts said freehold or 999-year leasehold, smaller-sized parcels will stand a better chance. “Sites on GLS are usually 99-year leasehold and en bloc may be the only way to get freehold or maybe 999-year leasehold land. Developers are still hungry for land and if it’s not a very big development, developers might still go for it even if profit margin is smaller because at least there’s business continuity,” Mr Sim said. However, bigger sites that cost above S$200 million will continue to be a tough sell as the overall financial commitment will add up to a large sum, which increases the risk of the project and limits the number of prospective buyers, analysts said. Source : Today – 1 Mar 2014


Bids for first GLS site of the year may be tame, say analysts The first land parcel in the Government Land Sales (GLS) programme for the first half of this year was released for sale by the Urban Redevelopment Authority (URA) yesterday, with analysts expecting keen interest for the attractively located site as developers look to build up their land banks. However, bids for the 99-year leasehold Prince Charles Crescent site are likely to fall well short of the record price of S$1,162.86 per square foot per plot ratio (psf ppr) that Keppel Land paid for the nearby Kim Tian Road land parcel last April as housing market conditions have turned softer since then, the analysts said. “I think this site will welcome around 10 bids because of the location and because developers need business continuity, but we expect bids not to be bullish … I think the strain from the cooling measures and the evidence that there are more unsold units will put some pressure on bid prices,” said Mr Desmond Sim, Head of Research at property consultancy CBRE. Mr Nicholas Mak, Executive Director for Research and Consultancy at property firm SLP International, noted that several other sites in the vicinity were sold before the Total Debt Servicing Ratio (TDSR) framework was introduced in June last year and developers may be more cautious in bidding this time round. The United States Federal Reserve has also begun scaling back its monetary stimulus programme, which may lead to higher global interest rates. However, there could still be developers who would place “fairly high” bids to fortify their position in the area, he added. The 268,713 sq ft site, released from the Confirmed List of the GLS, has a maximum gross floor area of 564,308 sq ft, which can yield about 655 private homes, the URA said. It is close to Redhill MRT Station and well connected to the Central Business District and Orchard Road. “Due to the size of this project and the financial resources required for the development, this tender is likely to appeal to major developers, such as those who have developed projects in this location. Some of these developers would also participate in this tender to protect their market share in this location,” said Mr Mak, who expects the top bid to range from S$928 to S$980 psf ppr. “Future residents in this project could enjoy nearby facilities such as the Alexandra Canal Linear Park, the Delta Sports Hall and Swimming Complex as well as Valley Point Shopping Centre. Overall, depending on the unit mix, the future development could attract healthy interest from investors as well as owner-occupiers.” Adding to the attractiveness of the site is the unblocked view to the north, an area mainly occupied by low-rise properties, said Mr Ku Swee Yong, Chief Executive of property agency Century 21. “In theory, a good design can give almost perpetual unblocked view. The location is pretty strong … This is one of the most attractive sites in the GLS programme. But given the current conditions, the bids might come in below that by Keppel Land, maybe around the S$1,000 psf ppr level,” he said. The tender closes on April 16. Source : Today – 1 Mar 2014


DC rates for commercial property up by the most The commercial property sector has been hit by the largest hikes in development charges (DC) — taxes payable on the enhancement in land value — in the latest half-yearly review, with the increases spread across many parts of Singapore, the Ministry of National Development said yesterday. Commercial DC rates for March to August this year have been revised upwards by an average of 15 per cent in 89 out of the 118 geographical sectors, with the largest increase of 29 per cent in areas such as Holland Road, Farrer Road, Queensway and Bukit Timah. Rates for the other 29 areas remained unchanged. Mr Ku Swee Yong, Chief Executive of property agency Century 21, said: “One of the reasons could be that new mixed developments in some of these areas, for example, KAP Residences, sold very well, so that pushed up the rates. But we will see whether this is sustainable when these projects get TOP (Temporary Occupation Permit).” The hotel and hospital segment is set for an average 13 per cent climb islandwide, with increases in all but two geographical sectors. The largest hike of 31 per cent is in Changi Road, East Coast and Marine Parade, with Ms Chia Siew Chuin, Colliers International’s Director of Research and Advisory, saying this was supported by an East Coast Road site that was sold at 129 per cent above the prevailing imputed land value. In the residential sector, DC rates for landed homes will be raised in 13 out of the 118 areas, with hikes of between 9 and 10 per cent. In the non-landed segment, DC rates will be raised in 15 out of the 118 sectors, with hikes of between 6 and 10 per cent. Overall, the revision of DC rates in the non-landed residential sector averaged a mere 1 per cent rise, Ms Chia noted. “This is not surprising as the URA non-landed residential price index softened by a marginal 0.3 per cent in H2 2013, compared with the 2.2 per cent growth in H1 2013, reflecting a halt to overall price increases on a general islandwide basis and a slowdown in the wider private residential market due to the combined effects of the Government’s cooling measures, especially the Total Debt Servicing Ratio (TDSR),” she said. Areas hit by the highest 10 per cent for both landed and non-landed residential property include Paya Lebar and Aljunied. Meanwhile, the industrial and warehousing segment, which experienced the biggest jump in the last review, will have its DC rates unchanged. Source : Today – 1 Mar 2014


URA tightening measures on party-wall residential development From June 1 this year, new party-wall residential developments will need to have a minimum plot size of 600 square metres. The Urban Redevelopment Authority said this is to ensure the quality of the living environment. Party-wall residential developments are built from wall to wall with no empty space in between. Currently, developers do not have to adhere to a minimum plot size. This has resulted in some developers buying plots as small as 150 square metres for residential use. For example, there is no space for greenery or communal facilities apart from a mechanised car park on the ground floor of a development at Mackenzie Road. Such smaller private condominiums are typically 999-year leasehold or freehold properties. Chris International’s director, Chris Koh, feels that smaller developers will be most affected. He elaborated: “It will be tougher now. In the past, you could just deal with only one owner on a private treaty, buy his piece of land and then… build. “But now if… a minimum size (is required)… and I don’t have that in that area, then my next option is to talk to several owners to collectively give me that kind of size.” Source : Channel NewsAsia – 1 Mar 2014


UIC offers to take SingLand private with S$761.7m deal The majority shareholder of Singapore Land (SingLand) is offering to take the company private by buying the remaining 19.64 per cent of shares in a deal valued at S$761.7 million. SingLand is one of Singapore’s largest landlords. Its properties include Singapore Land Tower and Clifford Centre in the heart of the central business district, SGX Centre which houses the Singapore Stock Exchange, and the Marina Square shopping centre. United Industrial Corporation (UIC), which controls just over 80 per cent of SingLand, said it will pay S$9.40 for each SingLand share –11 per cent higher than SingLand’s last traded price of S$8.45. UIC said buying out minority shareholders of SingLand would give it greater management flexibility. The group would also save on compliance costs since SingLand will no longer be listed separately. SingLand shares, which were suspended from trading on February 19, will resume trading at 1pm on Monday. UIC is controlled by Singapore banker Wee Cho Yaw and Philippine tycoon John Gokongwei. Source : Channel NewsAsia – 24 Feb 2014


Wheelock’s write-down for condo project likely due to regulations, say experts The move by Wheelock Properties to take a write-down for a condominium project reflects difficulties faced by developers to sell residential units on land bought before the last set of cooling measures announced last year, property consultants said. Wheelock said on Monday that it was writing down S$110 million for The Panorama condominium project. Consultants said the developer had paid a higher-than-expected S$790 per square foot per plot ratio for the Ang Mo Kio land site in January 2013, just three days before the government introduced its seventh round of property cooling measures. Further restrictions on housing loans were later announced in June under the Total Debt Servicing Ratio (TDSR) framework. The measures have led to a drop in housing prices and transaction volumes. Industry experts said The Panaroma is likely to have been impacted by the regulations. They view the write-down as a precautionary measure in anticipation of a further potential downturn. Nicholas Mak, executive director at SLP International Property Consultants, said: “From the time the developer committed to purchasing land to the time sold, the government introduced more than one round of cooling measures. “This affects the sales process of this project. It could possibly also affect other condominium projects where land was acquired before the cooling measures and TDSR were implemented. “Based on the 100-odd residential projects currently offered for sale in the market, sales have been fairly slow. “Every month, there are even some projects that may sell less than 10 units, so sales in the residential market actually have been quite adversely affected by the TDSR as well as other cooling measures.” Source : Channel NewsAsia – 25 Feb 2014



February 2014   Rentals for private residential homes expected to slide further It’s now easier for tenants to negotiate rentals for private residential homes as some landlords have become increasingly concerned about the impact of looming supply of rental units, according to some property agents. SLP International Property Consultants said average rentals have fallen by 1 per cent in recent months, as they foresee more downside this year. A total of 19,907 private residential units, including executive condominiums, are expected to be completed this year – with another 24,153 units to come in 2015, according to the Urban Redevelopment Authority. With the growing supply, agents said tenants are spoilt for choice and it takes a longer time to close a deal. Shelly Koh, Senior Associate Director, Agency, OrangeTee, said: “In the past we probably can see a rental unit go out very fast, in a month, because there are not that many flooding the market. Right now, we can hold a rental unit for at least three to four months.” OrangeTee notes that landlords are also more realistic about rental rates. For example, in the River Valley area, some landlords have dropped asking rentals by between 9 and 13 per cent. SLP International Property Consultants said the locations most popular with tenants in the second half of 2013 were Bedok, Bukit Timah, Tanglin, Novena and Geylang. This includes rental of landed properties, non-landed properties and Executive Condominiums. Of the five locations, only Geylang registered an increase in median rental of private residential properties from the first half of 2013. SLP said based on URA data, the median rental in Bedok, Bukit Timah, Tanglin and Novena dropped by 8 per cent to 38 per cent from the first six months of 2013 to the second half. However, the median rental in Geylang rose 39 per cent. It said the percentage change can be volatile as the rental figures are relatively small. Looking ahead, SLP estimates that average rentals could fall by 2 to 5 per cent this year. But it expects well-located private homes to be more resilient. Nicholas Mak, Executive Director, SLP International Property Consultants, said: “Properties that are actually in untested areas especially in locations where they are not near to new jobs, or not near to foreign schools, some of these properties are more suitable for owner occupation. The rental market there is fairly untested, when the whole rental market softens, the rental rates in those areas will probably come under even greater pressure.” In the fourth quarter of last year, rentals of private residential properties fell by half a percent – the first decline since the third quarter of 2009. For the year 2013 as a whole, rentals increased by 0.9 per cent, lower than the 2.1 per cent increase in 2012. Some analysts say should rentals continue to weaken and interest rates go up in the future, this will raise financing cost for some investors who may be tempted to sell if market rentals cannot cover their monthly mortgage payment. Source : Channel NewsAsia – 24 Feb 2014


Riviera Point condo off River Valley Road up for enbloc sale Riviera Point, a 33-unit residential development at the junction of Kim Yam Road and River Valley Road, has been re-launched for collective sale, with the owners seeking offers in excess of S$68 million. The S$68 million asking price translates to about S$1,379 per square foot based on the potential gross floor area, sole marketing agent Jones Lang LaSalle said in a statement on Monday. If successful, each owner stands to receive approximately S$1.94 million to S$2.14 million. The development had been put on the market previously in 2011 with an asking price of around S$70 million. “Other than redeveloping the site immediately, potential buyers may also choose to refurbish the existing development and apply for conversion to serviced apartments, subject to approval from the relevant authorities,” Jones Lang LaSalle said. The tender for Riviera Point closes at 2.30pm on Tuesday, April 8. Source : Channel NewsAsia – 24 Feb 2014


CDL warns of tough times as property curbs remain The Republic’s property market is in for another challenging year with cooling measures set to stay in place and with the introduction of new measures in the construction sector, City Developments Limited’s Executive Chairman Kwek Leng Beng said yesterday after the company reported an 11 per cent fall in fourth-quarter net profit. The head of Singapore’s second-largest listed developer maintained his forecast of a 10 per cent fall in prices this year, after his call for the Government to tweak some of the curbs went unanswered. In his Budget speech last week, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam acknowledged that while the Government’s successive rounds of measures were working, it was too early to start pulling back. Mr Kwek said: “In view that the Government has very recently announced … that it will not be relaxing the property cooling measures soon and will further tighten foreign labour in the construction sector, macro headwinds are expected to continue to weigh on the domestic property market. “I’m not as disappointed (because) if you read the Finance Minister’s speech carefully, he said (the Government) is not engineering a collapse of the property market … It doesn’t matter if they treat it today or tomorrow, as long as they have the mindset that we have to do something when the market is not so good.” He added that he remained hopeful some measures, especially those limiting foreign investments, might be tweaked in due course to alleviate any prolonged down cycles. “When you see that volume starts to swing and prices come down maybe 0.1 to 0.2 per cent, you may think it’s nothing, but adding that up can be quite a lot (of declines) per annum. I believe the government is fully aware but it’s a question of when is the right time to press the button, and the right time can be a judgment call,” he said. Mr Kwek also called for changes to the Qualifying Certificate (QC) rule, which applies to developers whose shareholders and directors are not all Singaporeans, as doing so will help to moderate bidding for land. “I believe with QC in place, competition for every site (is intense) … Without any sites, business comes to a standstill so developers have no choice but to bid higher and higher,” he said. City Developments reported a 11.4 per cent on-year drop in its fourth-quarter net profit to S$221 million and a 12.6 per cent fall in revenue to S$774.4 million. The company attributed the fall to lower contributions from its property development segment, as earnings from a few completed residential projects have not been recognised. CDL’s performance in the same period a year ago was also boosted by gains from the sale of several industrial land parcels. For the whole of last year, the developer sold 3,210 homes compared with 2,395 units in 2012. However, in light of difficult conditions in the domestic property market, CDL aims to be less Singapore-centric and plans to expand its footprint overseas in order to diversify risk. “We want to build an international external wing, and that’s why we have decided to appoint Mr Grant Kelley (as the Chief Executive) because he can bring in an external angle … We cannot forever be Singapore-centric and do the way we have been doing; a company evolves over time,” Mr Kwek said. Source : Today – 28 Feb 2014


Fewer HDB flat dwellers buying condos, private apartments The number of HDB flat dwellers buying condominiums or private apartments last year fell 1.1 percentage point. According to the Singapore Real Estate Exchange (SRX), the total number of non-landed private home transactions in 2013 was 20,203 units. Of these, 9,192 units were bought by those who owned or lived in HDB flats. This accounted for 45.5 per cent of the total purchases, down from 46.6 per cent in 2012. The number of non-landed private home purchases made by HDB addressees in 2012 was 14,955 out of 32,125 total purchases. Experts said cooling measures such as the total debt servicing ratio (TDSR) restricted financing options for potential buyers to upgrade, resulting in less demand in the market. Chris Koh, director of Chris International, said: “Because a lot of buyers today own HDB flats – most of them are servicing their instalments for their HDB flats. “On top of that, if they have a car, that would mean quite a bulk of their monthly income is going toward instalments. If you put TDSR at 60 per cent and they are already stretching at 40 to 50 per cent, then it’s difficult for them to buy a second property.” Source : Channel NewsAsia – 27 Feb 2014


Orchard Road rents expected to dip slightly this year: Savills Prime Orchard Road rents are expected to dip slightly this year as some restaurants look for cheaper space on the fringes of the city-centre, Savills said in a report on Friday. Rising manpower costs in a tight Singapore labour market are also discouraging retailers from expanding, contributing to the downward pressure on rents, the UK property services firm said. Savills said it expects rents at prime Orchard Road malls to fall by around 2 per cent this year from current levels of around S$34.6 per square foot per month. But retail rents outside the central area could edge higher by around 1.5 per cent from around S$31.1 per square foot, as consumer sentiment remains strong, because businesses operating in the prime suburban malls tend to be more profitable. Source : Channel NewsAsia – 28 Feb 2014


First DBSS flats go on resale market, asking price as high as $780,000 The first HDB flats under the Design, Build and Sell Scheme (DBSS) have been put on the resale market, after reaching the minimum occupancy period of five years. Some flat owners are asking for as much as 60 per cent more than what they paid five years ago. The Premiere on Tampines Avenue 6 was the first HDB flat project designed, built and sold by a private developer. 90 per cent of the development are five-room flats, which were sold for between $308,000 and $450,000. Now, online listings for some of these properties have prices starting at $650,000 and going up to as high as $780,000. That’s $70,000 to $200,000 more than other five-room flats in the same area. “I think many owners are, in a way, testing the market to see whether the market is willing to accept their asking price. Another reason is that perhaps many of them feel that DBSS as a public housing is of higher quality than the normal HDB flats,” said Nicholas Mak, executive director of SLP International Property Consultants. Source : Channel NewsAsia – 26 Feb 2014


No relaxing of property curbs means continued weak market: Analysts With the assurance from the Government that the property cooling measures are here to stay, housing market sentiment will remain weak as buyers stay longer on the sidelines, said analysts yesterday. This is because those looking to buy a new property can look forward to further downward price correction, after Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said on Friday that there is room for more moderation before any tweaks are made to the curbs. Mr Ku Swee Yong, Chief Executive of property agency Century 21, said: “Local buyers will definitely wait and see a little more. Foreign buyers hoping for a reduction in the ABSD (additional buyer’s stamp duty) might just buy now that they know it is here to stay, especially if they have decided on Singapore as their long-term home; but those interested to buy properties as investments might be chased away.” Mr Donald Han, Managing Director of property firm Chesterton Singapore, said: “Those looking to buy property can hold back for more price correction. Good projects launched at a price lower than those sold in the vicinity will definitely see interest. “But overall sentiment is still the status quo. Some relaxation of cooling measures was on the wish list (for this year’s Budget) and that will remain on the wish list,” he added. Mr Tharman said in his Budget speech that it was too early to start relaxing the property cooling measures, given the rise in prices in the past four years. The moves, he said, are meant to help moderate the market and prevent prices from getting “too far out of line” with income levels. Mr Colin Tan, Director of Research and Consultancy at Suntec Real Estate Consultants, said the decision to keep the cooling measures provides clarity to the housing market in coming months. “Some developers have been holding back launches to observe the market. Now, with this clarity, they can make a decision whether to hold back more or to launch. But sentiment will remain weak since nothing was done to change it,” he said. Mr Tharman also said the property market would be closely monitored in the coming quarters and, if necessary, adjustments to the cooling measures would be made. Mr Ku said the continuous downtrend in cash-over-valuation (COV) premiums of Housing and Development Board resale flats might lead to the Government taking its first step to relax the curbs. He said: “The market is trending downwards, but not fast enough — it’s a gradual downtrend. “But COV is going down very quickly and there are now more cases of negative COVs. If valuation also falls quickly, it might actually kick-start the process for (the Government) to make changes.” Source : Today – 25 Feb 2014


Units of RiverTrees Residences released to robust demand Frasers Centrepoint has sold 220 of the 300 units for its latest project, RiverTrees Residences, in Sengkang’s Fernvale district, which were released for sale last weekend, said the developer yesterday. Mr Cheang Kok Kheong, Frasers Centrepoint Chief Executive for Development and Property in Singapore, said: “This validates our belief that there is still depth in the market and that there is robust demand for high-quality homes at the right prices.” The selling price for the 495-unit RiverTrees Residences ranges from S$950 to S$1,150 per sq ft in the initial phase, with two-bedroom homes priced from S$618,000. Source : Today – 25 Feb 2014


MCL Land (Brighton) submits highest bid for two leasehold sites MCL Land (Brighton) submitted the highest bids for two 99-year leasehold sites for Executive Condominium (EC) development at Chua Chu Kang Grove. The two adjacent plots were put up for sale under the batch tender closing system, aimed at ensuring more prudent bids from developers. According to the Housing and Development Board (HDB), the first plot, Parcel A, attracted a total of seven bids. The top bid, from MCL Land (Brighton), came in at S$232.5 million, just half a per cent higher than the second-highest bid from JBE Holdings. Meanwhile, there were four bids for Parcel B, with MCL Land (Brighton) placing the top bid of S$210.1 million. This is 1.7 per cent above the second-highest bid jointly submitted by Verwood Holdings and TID Residential. Each of the two sites measure about 16,450 square metres, and are expected to yield 575 units. Analysts said the bidding showed that Parcel A commands a premium over Parcel B. Desmond Sim, head of CBRE Research Singapore, said in per square foot terms, the top bid for Parcel B was 10 per cent lower than the top bid for Parcel A. This reflected Parcel A’s premium over Parcel B. He noted that demand for ECs has also slowed down in recent months. Source : Channel NewsAsia – 25 Feb 2014


Too early to ease property cooling measures, says Tharman The Singapore government plans to keep property market cooling measures in place for the time being, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Friday, even as real-estate prices have shown signs of stabilising after large increases in recent years. “Given the run-up in prices in the last four years, it is too early to start relaxing our measures,” Mr. Tharman told Parliament in his annual Budget Speech. He said the cooling measures have been aimed at moderating the market so that property prices do not get too far out of line with incomes. Mr Tharman said the government is not engineering a hard landing. However, it cannot eliminate cycles in the property market — the upswings in some years followed by corrections. “The government will continue to monitor the property market in the coming quarters and adjust our measures when necessary,” he added. Mr Tharman’s comments came after government data published in January showed private home prices in Singapore fell in the fourth quarter from the third, snapping six straight quarters of growth as the property cooling measures curbed real-estate investment. Property analysts say the decline — the first in nearly two years — could portend further price falls this year, when large supplies of new homes are expected to reach the market amid a rise in interest rates. Singapore has repeatedly tried to temper exuberance in its property market in recent years, imposing cooling measures since September 2009 to combat upward price pressures from low interest rates and abundant capital inflows. The government imposed curbs, most recently in June — tightening property loan rules to discourage imprudent borrowing. The Total Debt Servicing Ratio affects affordability by restricting a borrower’s property loans to below 60 per cent of his or her gross monthly income. These followed January measures that mainly targeted foreign investors and residents who already owned homes — stamp duties and down-payment requirements were raised, while borrowing caps were tightened. Singapore’s private residential property price index fell 0.9% in the fourth quarter of 2013 to 214.3 points. Prices last fell in the first quarter of 2012 before rising by 5% in the 18 months up to September. The fourth-quarter price decline marked the private housing market’s worst showing since the second quarter of 2009 when prices fell 4.7% from the quarter before. Despite the latest drop, private home prices are up 61% since the end of June 2009. Source : Channel NewsAsia – 21 Feb 2014


MND likely to look into help for elderly, divorcees, single parents The Ministry of National Development is unlikely to make any major policy moves with regard to housing in its budget this year. But National Development Minister Khaw Boon Wan said his ministry will be exploring ideas to expand the Lease Buyback Scheme, which helps the elderly monetise their flats. More help for second-time home buyers, like divorcees with children and single parents, is also likely to be on the cards. Mr Khaw was speaking to the media on the sidelines of a post-Budget dialogue with grassroots leaders on Sunday. Ramping up the supply of HDB flats and setting aside more Build-To-Order flats for married couples with children are some of the major initiatives introduced in the last two years to address the demand for flats from first-time home buyers. The housing needs of newly-weds have largely been met in the last two years, so the focus can now be shifted to others, like divorcees and single parents, said Mr Khaw. He was responding to questions on what can be expected at his ministry’s upcoming Committee of Supply debate (COS) next month. Helping seniors who hope to monetise their flats is another area that is likely to be addressed. “I don’t have a solution as yet, but I would like to see what else we can do to help seniors in a big flat move to a smaller flat if they wish to (and put) more money in their pockets. So I’m open to ideas and discussions,” said Mr Khaw. Mr Khaw said his ministry is studying suggestions to expand the existing Lease Buyback Scheme to include four- and five-room flats. Currently, only seniors who own three-room flats are eligible. The scheme allows elderly flat owners to sell part of their flat lease to HDB for a sum of money, while retaining a 30-year lease. But take-up has been low so far — with only about 240 owners making use of the scheme last year. Mr Khaw commented: “I think those are decisions we leave to families to decide. But, more importantly, we should provide an option, for those who want to take that option, then by all means. “I don’t regard the low take-up rate as a failure. What it means is that people are not financially desperate to need to take advantage of those options, but those options are there for those who need it.” At the post-budget dialogue, several people also asked why the one-percentage-point increase in employer CPF contribution rates would be channelled to Singaporean workers’ Medisave accounts and not be allowed to be used for housing. Mr Khaw said: “The extra 1 per cent is a recognition that as population ages, our healthcare needs will grow. Today’s CPF contribution rates are more than enough to cover housing.” Mr Khaw also stressed prudence, noting that affordability is only an issue if one chooses to buy a house bigger or more expensive than what is necessary. Source : Channel NewsAsia – 23 Feb 2014


Productive technologies to be mandated for Govt Land Sales The use of productive technologies will soon be mandated for selected Government Land Sales (GLS) sites in tender conditions. These technologies include prefabricated bathroom units. This was announced by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Parliament during his Budget Speech on Friday. Mr Tharman said the move is part of efforts to transform the eco-system of the construction industry. He added that tender conditions for Industrial Government Land Sales (iGLS) sites will have a minimum percentage level of prefabrication. Developers will also be incentivised to adopt productive technologies in developments on non-GLS sites. In addition, the government will continue to increase the legislated buildability scores and constructability scores for projects. From September this year, private projects that are outside of the GLS programme will need to meet the same higher standards as public sector projects and private sector projects on GLS and iGLS sites. Mr Tharman said the public sector will take the lead by using productive technologies more aggressively to provide a demonstrative effect and catalyse mass demand. For government construction projects, tender evaluation will favour firms with good track records in adopting productive construction designs and methods. More details on these upstream measures will be provided by the National Development Ministry at the Committee of Supply debates. Source : Channel NewsAsia – 21 Feb 2014


Not time to tweak property cooling measures, say observers While a growing number of property market participants are calling for the Government to tweak some of the measures introduced to cool the market, observers said it may be premature to do so as there is still room for the sector to stabilise. Economists TODAY spoke to have raised concerns that any unravelling of the cooling measures before interest rates start to rise would, once again, heighten the risk of excessive leverage. “We haven’t seen interest rates rise, so it’s a little premature at this point. People are still looking to come back at levels that they feel comfortable, so I think a premature loosening would reignite the speculative element that we’re trying to dampen,” said CIMB economist Song Seng Wun. “Rising interest rates bring about concerns in terms of repayment, affordability and whether people have the ability to service their debts … So, loosening now could encourage more reckless borrowing. We would certainly want a market that is more stable before doing that,” he added. While agreeing that there is still uneasiness surrounding the hike in interest rates, Bank of America Merrill Lynch economist Chua Hak Bin said the Government can keep loan curbs intact and fine-tune some of the stamp duties instead. “I think a case can be made for some measures — the additional buyer’s stamp duty (ABSD), for example — to be reduced because the latest index has shown more slowing down. Mortgage loan growth was also down to 7 per cent to 8 per cent from a peak of more than 20 per cent. So, I think a lot of the concern about runaway prices and property bubbles forming have been abated considerably,” he said. Latest figures by the Urban Redevelopment Authority showed price growth in the private residential property sector tamed somewhat, increasing by 1.1 per cent for the whole of last year compared with 2.8 per cent the previous year. New sales also moderated by more than 30 per cent last year. This has prompted several market participants, the most prominent being City Developments Executive Chairman Kwek Leng Beng, to suggest that it might be time to tweak some of the curbs. One measure that can be lifted is the ABSD, Mr Kwek said. But KPMG Principal Tax Consultant Leung Yew Kwong said that while there are merits in the proposals to roll back some cooling measures considering a somewhat weaker market, it is unlikely that the Government would start with “potent” measures such as the ABSD. “I think the likely candidate would be the seller’s stamp duty. First, this measure has lost its potency because we now have the ABSD and TDSR (Total Debt Servicing Ratio) to choke off demand. Second, removing it may encourage more people to sell, and introducing more supply into the market can help bring prices down,” said Mr Leung. “But realistically speaking, I don’t think the Government will relax (the measures) so soon because it has indicated that there still needs to be some cooling down. Even though transactions are low now, prices still have room to correct,” he added, noting that any changes may only come next year. Mr Song agreed that a better time to start scaling back these measures would be at the end of this year or next. “There’s no rush. The market can still withstand further correction before it becomes harmful to the economy. With nobody in jeopardy or difficulty yet, I would say it’s okay to keep the measures around now.” Source : Today – 21 Feb 2014


Poor housing outlook not deterring land buyers Billionaire Kwek Leng Beng, head of Singapore’s second-largest listed developer, said last year that skyrocketing prices and restrictive rules made buying residential land here suicidal. That has not stopped international developers from rushing in. Land prices in some parts of the country are climbing at three times the pace of apartment costs, with plot values rising by an average of 30 per cent each year since early 2011, said property broker Chesterton Singapore, which used government auction data. Singapore’s fourth-quarter home prices slid for the first time in almost two years, as curbs cooled values. “The increase in land prices has had a tremendous impact on developers’ profit margins,” said Chesterton Singapore Managing Director Donald Han. “Those that used to enjoy margins in excess of 20 per cent will have to contend with narrower returns.” Builders with international backing such as Kingsford Development and MCC Land (Singapore) have driven the gains as they sought to benefit from home prices that have jumped 61 per cent since mid-2009. Land prices are squeezing profits, while Singapore, ranked by Knight Frank as the most expensive to buy a luxury home in Asia after Hong Kong, has introduced measures that limit mortgages, require higher downpayments and impose new taxes to tamp housing inflation. Profit margins have narrowed to 10 per cent from as much as 20 per cent just three years ago, said broker CBRE Group. That has hammered property stocks in Singapore, with South-east Asia’s largest developer CapitaLand’s share price down about 26 per cent in the past year and City Developments, run by Executive Chairman Kwek, losing 17 per cent. Mr Kwek, reported to have a net worth of US$3.9 billion (S$5 billion) in the Bloomberg Billionaires Index, said in August it would be suicidal to buy land given the Government’s requirement that new homes must be sold within two years of completion. “Non-traditional property developers, especially foreign construction companies, are also entering the real estate development field, bidding aggressively to secure land, while sacrificing their profit margins in construction,” the company said in its earnings statement in November. “This is a very potent trend that may affect the industry in the medium to long run.” While developers are expecting prices to fall because of the measures, that is not stopping them from buying more land. “Recent bids are indicative of high competition for land bank among developers as they continue to bid aggressively to replenish their declining inventories despite a bleak outlook for property prices,” said UOB Kay Hian analyst Vikrant Pandey. CapitaLand said on Wednesday it would continue to replenish land bank in Singapore through government auctions and private sales. Home prices are expected to moderate this year due to the property measures, said Chief Executive Officer Lim Ming Yan, adding that some of the short-term measures such as stamp duties or taxes may be eased if housing values fall as much as 10 per cent. For developers, recovery in demand would be a prerequisite to avoid further compression of profit margins, said Mr Nicholas Mak, Executive Director and Head of Research at SLP International Property Consultants. “If the market is softening and units are taking longer to sell, then a rational developer will not bid so much for the land even though there are fewer land parcels,” he said. “It cuts both ways; demand will influence price.” Some of the biggest land price increases have been for plots in Upper Serangoon and Tampines, as well as in Bukit Merah and Alexandra. These former industrial areas now host car dealerships and residential apartment buildings close to the city centre. Bidding at auctions, especially those in which foreign developers took part, drove up prices in the areas annually by 32 per cent and 39 per cent, respectively, in the three years since early 2011. Over the same period, prices of homes built on the sites rose only 7 per cent per annum, Mr Han said. Chinese developer Kingsford Development emerged as the top bidder for two plots in Serangoon after offering S$522 per square foot in December, showed data compiled by Chesterton, based on the Urban Redevelopment Authority’s (URA) auctions. That compares with the S$291.39 psf winning bid by Singapore developer Allgreen Properties in September 2011 in the same area, Chesterton said. MCC Land, a unit of Metallurgical Corp of China, placed the highest offer for a Tampines plot, paying S$562 psf. The bid was about 34 per cent higher than what Singapore’s largest privately held developer Far East Organization offered for a plot in the same area in May 2012, Chesterton data showed. The Government has been fighting property speculation since 2009 as record home prices amid low interest rates raised concerns of a bubble. Rules were unveiled last June governing how financial institutions grant property loans to individuals. It is also limiting land supply to prevent units from flooding the market as demand declines. There are potentially 65,000 private homes that could be completed between 2014 and 2016, said Mr Mak. The Government will cut sales of residential plots by 18 per cent for the first half from the six months ended December, the URA said in December. The 11,585 units of total supply expected for the six months to June will be below 14,155 for the first time since 2010. Of that total, the planned supply for private residential units will drop 44 per cent in the period. Source : Today – 21 Feb 2014


Home prices will ease further: CapitaLand Property developer CapitaLand says it is unlikely to take an aggressive position in Singapore’s residential property sector in this current market cycle. Group CEO Lim Ming Yan expects home prices to continue to moderating this year. Speaking to Channel NewsAsia at an earnings briefing on Wednesday, Mr Lim says the market consensus is for home prices to fall by five per cent to slightly over 10 per cent. CapitaLand on Wednesday posted a 46 per cent drop in fourth quarter earnings to S$143 million due to one-off losses from the sale of a 20 per cent stake in Australia’s Australand. In Singapore, CapitaLand sold 109 residential units in the last quarter of 2013. That took its sales for the whole year to a new record high at 1,260 units valued at S$2.4 billion. Mr Lim said: “What we have in Singapore residential is less than 10 per cent of our total portfolio, so compared to many of our peers in Singapore, we are one of the least exposed developers. “We will be very selective about what we will be doing in Singapore. We will want to continue to look at Singapore, obviously it (property sector) moves in cycles so this may not be the cycle for us to take aggressive position in the residential sector.” Source : Channel NewsAsia – 19 Feb 2014


District 11 apartments up for collective sale An apartment development in the prime District 11 has been put up for collective sale, with its owners looking for offers in excess of S$40 million. The 16-unit apartment on Moulmein Road sits on freehold land of around 17,000 sq ft, across the road from Novena MRT Station, and Velocity@Novena and Square 2 shopping centres. The area is also served by the Central Expressway and Pan Island Expressway, and is close to several schools such as St Joseph’s Institution Junior, Anglo-Chinese Junior and Primary schools, as well as CHIJ Primary (Toa Payoh). “The location will be extremely popular with owner-occupiers and tenants looking for transportation convenience, close proximity to amenities, medical facilities and highly reputable schools,” said Mr Alex Chow, Manager for Investment Properties at CBRE, the marketing agent for the tender. With a potential gross floor area of around 26,000 sq ft, the developer can build a project with 32 apartments of an average size of 800 sq ft each. And the S$40 million that the owners are seeking works out to around S$1,598 per sq ft per plot ratio. “Given the excellent Novena location of the site, its freehold tenure and bite-sized quantum, we anticipate strong interest from local and foreign developers as well as new entrants to the Singapore real estate market,” Mr Chow said. The tender for the site closes on April 2. Source : Today – 20 Feb 2014


Singapore’s new private home sales remain low in January New private home sales in Singapore remained in the doldrums in January, as developers held back launches and lending restrictions depressed demand. According to data from the Urban Redevelopment Authority (URA), developers sold just 565 new private homes last month, up from December’s four-year low of 259 units. Last month’s figure was, however, well below the 2,028 units sold in January 2013. Singapore’s residential property market has slowed since the middle of last year, following moves by authorities to cap the amount of money people can borrow. Investors are also concerned about the upcoming supply of new units, and property analysts say private home prices could fall by as much as 15 percent this year. In the final quarter of 2013, private home prices fell 0.9 per cent from the previous three months — the first decline in nearly two years. Developers in Singapore sold around 15,000 new homes last year, some 30 per cent down from 2012. Source : Channel NewsAsia – 17 Feb 2014


Keppel, Marina Bay golf courses “could give way to private housing” An expert on land use says freeing up prime land at Marina Bay Golf Course and Keppel Club could make way for more private housing, in line with what’s already being built in the area. The government on Sunday announced that Keppel Club and Marina Bay Golf Course will not have their land leases renewed after they expire within the next 10 years. Assistant Professor Harvey Neo from the National University of Singapore’s Department of Geography said: “For Keppel…quite a significant number of private housing (could be) built there. “From what I’ve seen in the area, there are a lot of very high-rise condominiums. So it’s not surprising if those kinds of condominiums – very high density and many storeys high – (are built there). “For Marina Bay, it could be a combination of housing and other uses – housing mixed with office buildings, this kind of integrated development is a possibility.” Dr Neo also said that the reduction of space allocated for golf courses is a significant step for land-scarce Singapore. He said Singapore would still have about 1.5 per cent of its land allocated for golf course use, which is high relative to other countries. He said that more golf courses may go the same way in future, especially for those with leases being extended till 2030. “Even for those who have a reprieve…for most of them their leases will end in 2030 and with no further indication of what’s going to happen (after that)…I think, the next round of adjustments – closer to 2030 – we may see another round of taking away of golf course land,” said Dr Neo. Source : Channel NewsAsia – 17 Feb 2014


Singapore home prices may drop 10-15%, says DBS CEO Singapore’s property prices could fall by 10 to 15 per cent this year, as government cooling measures and mortgage curbs continue to dampen the property market. This is the outlook from DBS Bank’s CEO Piyush Gupta. His comment came during the bank’s results briefing on Friday. Since 2009, the government has rolled out a series of measures to rein in property prices, and the impact is showing. In the final quarter of 2013, private home prices fell 0.9 per cent from the previous three months — the first decline in nearly two years. Mr Gupta said he expects property prices to correct by 10 to 15 per cent this year, with high-end homes taking a bigger hit. His views are more bearish than those of most property analysts, who see home prices declining by 5 to 10 per cent. However, DBS said it is not overly concerned about the impact of a sharp correction in residential property prices on its loans portfolio. Mr Gupta said: “All our stress tests in the past have shown that we can easily withstand a 30 per cent reduction in Singapore property prices without having any material impact on our portfolio in Singapore.” He added that the quantum and extent of correction will also depend on any tweaks in macro-prudential policies by the government and Monetary Authority of Singapore. Meanwhile, United Overseas Bank’s CEO Wee Ee Cheong also expects to see a downward pressure on home prices, especially on the high-end property segment. However, he said it is difficult to predict the extent of correction in property prices as it also depends on factors such as the interest rate environment, economic conditions and housing supply situation. For now, DBS said it saw a 30 to 35 per cent reduction in mortgage applications as a result of the Total Debt Servicing Ratio framework put in place last June. Over at OCBC, home loans volume fell by some 40 to 50 per cent in the last few quarters. Housing and bridging loans account for about 30 per cent of total loans in the banking system in Singapore. One concern among some observers is whether households will be able to carry a heavier debt burden as global interest rates start to normalise. Samuel Tsien, CEO of OCBC Bank, said: “Because of the warnings that have been given — and I think both the regulators and the banks have been very disciplined in making sure that borrowers understand the impact on them — we believe that when the interest rate rises, it will be within the capacity of the borrowers.” OCBC said it does not expect global interest rates to rise till 2015, while DBS said it won’t be surprised if rates start to rise only from 2017. DBS said more borrowers are taking on fixed rate loans to protect themselves from a rising interest rate environment. Source : Channel NewsAsia – 14 Feb 2014


Competition heats up among developers in Sengkang area Two new condo developments in a Sengkang area are launching at around the same time, raising the possibility of a price war. This comes on the back of a fall in suburban private home prices. Prices of suburban condo units dropped 1 per cent in the last quarter of 2013. That is the first dip in about four years, or since the second quarter of 2009. Some analysts said the drop has made property developers jittery. Colin Tan, research head at Suntec Real Estate Consultants, said: “We have gone beyond the historical demand, way beyond it. So I think most people feel that it has to give, at some point. And I think that’s what’s making the developers very nervous. So I think when the window of opportunity is there, they may take the chance to market it now.” Marketing has already kicked off for Riverbank @ Fernvale. Its developer UOL Development said it has collected over 500 cheques for the 555-unit development after the developer opened its showflats for preview last week. Riverbank is located next to an upcoming 495-unit condo project, which is developed by a consortium formed by Frasers Centrepoint, Far East Orchard and Japanese firm Sekisui House. There is a flurry of building activity in the area of Sengkang known as Fernvale. And two adjacent developments, RiverTrees and Riverbank, will add 1,050 new private units in the area, raising the possibility of a price war. Other upcoming developments in the area include projects that are close to fully sold, such as City Developments’ H2O residences, and the Lush Acres executive condominium. Mr Tan said: “If there’s a price war, it’s probably below the surface. It’s where the marketing agents — when they negotiate with the buyers — may be authorised to give bigger discounts.” Still, RiverTrees’ developer Frasers Centrepoint said price competition won’t be necessary. Cheang Kok Kheong, CEO of development and property at Frasers Centrepoint, said: “We will never be able to compete on pricing. What we have is long-term value in this project — a 150-metre frontage of the reservoir, and orientated our units such that about 90 per cent of the units actually have this view of the reservoir.” The pricing for the units appear competitive. The average selling price for a unit at Riverbank is slightly above S$1,000 per square foot (psf). Frasers Centrepoint did not reveal an average selling price but said that the selling price of units at RiverTrees Residences will range from S$950 psf to S$1,150 psf in the initial phase. But analysts said that could apply to large units, or units with less attractive attributes. Instead, they estimated the average selling price to be in the range of S$1,050 to S$1,100 psf. Frasers Centrepoint said that when its showflats first opened over the last weekend, most of the viewers were residents from Sengkang. The developer also added that interested buyers include property investors. Still, some analysts said this means the units may be out of reach for some HDB upgraders in Sengkang, many of whom are reaching their five-year minimum occupancy mark. This is because HDB upgraders may find it tough to sell their units, given that resale transactions have slowed to a record low last year. Overall, prices of HDB resale flats dipped by 0.6 per cent in 2013, marking the first annual fall since 2005. Mr Cheang said: “We think that the market has narrowed a lot, but we think there is still depth in the market. The people who are not having problems in making loans; the people who are buying their second unit, rather than third or fourth unit, are still able to look for assets to invest in.” As the Frasers Centrepoint consortium paid about 9 per cent more for its site on a psf basis, analysts said that a similar price range for both developments could mean lower margins for the RiverTrees development. Source : Channel NewsAsia – 12 Feb 2014


Some golf courses to make way for redevelopment plans Golf courses make up two percent of Singapore’s total land area and this number is expected to drop as golf clubs make way or make adjustments for redevelopment plans. Keppel Club and the Marina Bay Golf Course will not get new leases when their current ones expire while the Singapore Island Country Club (SICC) will lose one of its 18-hole courses. This was announced by the Law Ministry on Sunday. Singapore has 17 golf courses -14 private and three public – most of which operate on a 30-year lease. Nine of these have leases which will expire in the next 10 years. Authorities said that Keppel Club – whose land is needed for housing development – will not be offered a new lease when its current one expires in 2021. The plan was announced in 2001 in the Urban Redevelopment Authority’s (URA) Concept Plan. If keen, it will be offered an alternative site to operate as a club without golf facilities. The Law Ministry and the Singapore Land Authority said discussions on a possible location are ongoing. Similarly, the public Marina Bay Golf Course will not get a new lease when its current one expires in 2024. Instead, one of the Singapore Island Country Club’s two 18-hole golf courses at its Bukit location will be reallocated as a public golf course once its current lease expires in 2021, and will be operated by the labour movement. This will make sure the public gets continued access to golfing facilities when the Marina Bay Golf Course is phased out for redevelopment. SICC’s other golf course at the Bukit location will be offered a new lease until 2030 on the condition that the club works with the labour movement on how the courses can be reconfigured and the facilities shared. Both sides have till February next year to work out an agreement. Two golf clubs located close to Changi Airport — Tanah Merah Country Club (TMCC) as well as National Service Resort and Country Club — will also see their courses affected, to accommodate the airport’s expansion plans. The government will acquire about 10 hectares of TMCC’s land – which now includes six holes of its Garden course – as the space is needed to build new taxiways. It will also lose three tennis courts and two storage sheds. And some 26 hectares from the National Service Resort and Country Club will go to airport expansion and related road works. The club’s 9-hole Air Force course already sits on State land on a short fixed term and is renewed on a yearly basis. TMCC will be compensated for the acquisition. Still, TMCC and the National Service Resort and Country Club are two of seven golf clubs which will have new leases for their golf courses. The other five are Changi Golf Club, Orchid Country Club, Seletar Country Club, Sentosa Golf Club, and SICC’s three other courses. These leases will end between 2030 and 2040. But, it is likely that golf courses with leases ending in 2030 – such as Orchid Country Club – will eventually have to make way for redevelopment. Golf courses occupy lots of land, and authorities say there is a need to balance the competing demands for land in Singapore. What this means is that the amount of land that is set aside for golfing will have to be reduced over the years and the space set aside to meet the needs of the wider public such as for housing and public infrastructure. Currently, golf courses sit on some 1,500 hectares of land. Following this review, the figure will drop to about 1,300 hectares. Other golf clubs, which currently have more than 10 years left on their leases, are still being reviewed by the authorities. The Law Ministry said that golf club leases are for a fixed term with an end date. This has always been made known to the public and to those who become golf club members. When the lease ends, the land reverts, by law, to the government. This applies for all State leases, whether they are for residential, commercial, industrial or other uses. Source : Channel NewsAsia – 16 Feb 2014


EC land site at Anchorvale Crescent attracts 12 bids A land site for an executive condominium (EC) development at Anchorvale Crescent has attracted 12 bids at the close of tender on Thursday. According to the Housing and Development Board (HDB), Phoenix Real Estate submitted the highest bid of S$192.89 million, which is 1 per cent higher than the second top bid of S$191 million from MCL Land. Phoenix Real Estate is a wholly-owned subsidiary of SGX Catalist-listed firm Sing Haiyi Group. The top bid translates to S$366.91 per square foot per plot ratio (psf ppr). Wee Hur Development submitted the lowest bid at S$139 million. ERA’s Key Executive Officer Eugene Lim noted that the number of bids is similar to the one for the land site at Westwood Avenue in Jurong. He said this shows that developers believe the EC market is robust, and it reflects developers’ confidence in the demand for homes in this market segment. Other analysts said the keen interest for this site showed that developers are hungry for land sites to build their land bank. Some 545 units are expected to be built on the 16,280 square metres site located in the HDB Sengkang estate. SLP International Property Consultants’ Executive Director Nicholas Mak said that based on the bids submitted, the future launch price of this EC project could vary from S$810 per square foot (psf) to S$860 psf. He added that the development will likely face direct competition from three other projects, namely Qingjian Realty’s EC at Anchorvale Crescent, and two other EC projects located at Edgedale Plains, whose tenders closed last year. Source : Channel NewsAsia – 13 Feb 2014


Some major banks welcome move by MAS to ease debt servicing Several major banks have welcomed the latest move by the Monetary Authority of Singapore (MAS) to make it easier for borrowers to refinance their loans for owner-occupied properties. This is if the property was bought before the Total Debt Servicing Ratio (TDSR) was introduced on 29 June 2013. The framework prevents home buyers from taking a loan if their monthly debt obligations exceed 60 per cent of their monthly income. Some banks say the relaxing of these rules will help homeowners avoid having to force sell their homes. According to the MAS, five to 10 per cent of households were over-leveraged in 2013. This means their debt repayment burden exceeded 60 per cent of their monthly income. This would have made refinancing difficult under the original TDSR framework. Banks say an increase in interest rates would also have added to the repayment burden and may have forced some to sell off their homes. But now homeowners can be exempted from TDSR should they wish to refinance the mortgage for the property they live in, even if they own other properties or have other outstanding home loans. Mr Donald Han, managing director of Chesterton Singapore, said: “In today’s market it’s not easy to sell, it’ll take a longer period to sell, plus the activity in the secondary market has dwindled tremendously compared to five years ago. So it takes a longer period, potentially might have to sell at a depressed price, which has got repercussions in terms of market valuation and that would have a negative spiral to the property market.” Industry experts add that the move is timely. MAS had said the broadening of exemptions was in response to feedback from borrowers. Mr Timothy Kua, director of SmartLoans.sg, said: “Homeowners typically pay higher and higher interest rates to banks anywhere between their first to fifth years of their loan tenures, and the MAS measure made it more difficult to switch out to a different bank with a lower interest rate, in a sense trapping them to a bank that they originally signed with. “So with the relaxation of this rule, homeowners can now look forward to lowering their interests and monthly payments. “People have been complaining that the measures implemented ironically caused them to incur higher debts when they suddenly face difficulties refinancing their mortgage in a bid to finance their payments.” Some industry players say the latest move is more of a policy tweak or refinement rather than a property easing measure. In fact, some analysts think it may take at least two more quarters of price declines before the government considers unwinding its property cooling measures. Source : Channel NewsAsia – 11 Feb 2014


Strong reception for 3Gen flats, says Khaw The first batch of 3Gen flats launched in Yishun last September has had a strong reception, National Development Minister Khaw Boon Wan said on his blog on Friday. About 94 per cent (79 out of 84) of these flats, which Mr Khaw said are designed to facilitate extended family togetherness, have been booked. Of the 79 families who booked these flats, 56 were first-time HDB buyers and 23 second-timers. Selection of the remaining five units is ongoing and will end in March. The average household size of these families was higher at 5.1, compared to the household sizes for 5-room flats (4) and 4-room flats (3.6). Mr Khaw said subsequent batches of 3Gen flats in Jurong West and Punggol have also been met with a strong response, with nearly 300 applications received from families who qualify for the 164 flats in these two projects. “We will continue to help extended families who want to live together, or close to one another, fulfil their dream,” he said. “This will be a key priority area for me and for my ministry over the next few years.” Source : Channel NewsAsia – 14 Feb 2014


Ex-property agent jailed two years for role in rental scam A former property agent was on Thursday jailed for two years by a district court for his part in a rental scam that targeted foreign nationals. 41-year-old Jim Tan Kuan Hui, who was unrepresented, pleaded guilty to three charges which involved some S$14,000. Five other similar cheating charges — also involving foreign nationals — were taken into consideration during sentencing. Tan also admitted to stealing his girlfriend’s Omega watch, worth some S$2,900, as well as her pendant. The court heard that Tan was introduced to a co-accused — 36-year-old Jeffrey Tan — by a person known only as Ah Lai. Ah Lai had asked the former property agent to conduct an open house viewing of Jeffrey Tan’s HDB unit in Jurong East to potential tenants, as he owed money to licensed moneylenders. Ah Lai then hatched a plan for both men to collect deposits, advance rent and agent’s fees from prospective tenants who came to view the unit. They would then tell the interested parties that the money would be returned to them if they did not succeed in securing the unit. However, both men were aware that there was, in fact, no intention to rent out the unit, and that Ah Lai was not going to return the money received. The ex-property agent would then get clients to view the unit, collect a deposit and advance rent from them. For his role in the scam, he would pocket amounts of between S$100 and S$250 as payment. The victims suspected that something was amiss when they found that there were other people already staying in the unit. They asked for a refund, but did not get their money. In pressing for a deterrent sentence, Deputy Public Prosecutor Houston Johannus said that Tan had shown persistence and boldness in carrying out the scam, and that he had abused his position of trust as a property agent. “There was deliberate deception and pre-meditation to swindle the victims, and the amount was not insignificant,” he added. It is understood that Ah Lai is still at large, while Jeffrey Tan will be dealt with separately. In passing sentence on Thursday, the District Judge also pointed out that Tan had “shamefully victimised guileless foreign nationals.” He could have been jailed for up to 10 years and fined for cheating. For theft, Tan could have been jailed for up to seven years and fined. Source : Channel NewsAsia – 13 Feb 2014


Resale private home transactions plunge 70.2% The number of resale transactions in the non-landed private home market plunged 70.2 per cent in January compared to a year ago. Analysts attributed the decline to the effects of cooling measures and loan curbs introduced last year. According to the latest data from the Singapore Real Estate Exchange (SRX), which compiles data from property agencies in Singapore, 310 private homes were resold in January this year compared with the 1,039 resale deals closed in January 2013. Property agents said 310 is the lowest monthly figure in five years. Compared to December 2013, the resale volume was down 9.1 per cent. Though transaction volumes dropped, resale prices climbed 2.3 per cent in January. Analysts said there were probably more higher priced units that were transacted in January. This pushed prices up slightly. PropNex CEO Mohamed Ismail said: “It also demonstrates one thing, that the market has found its footing where the sellers are reluctant to sell any lower than before. “And this is because the new launches are not going any cheaper either, (as) the land bid prices in recent months have been relatively strong. Therefore there isn’t any motivation for sellers to lower prices any lower.” SRX said prices of suburban homes rose 2.4 per cent last month, followed by those in the city which rose 2.1 per cent. However, resale prices of private homes in the city fringe fell 0.9 per cent. Analysts said home prices are likely to remain fairly muted this year. PropNex expects overall prices to either decline by 2 per cent or rise marginally, with support from the mass-market homes segment. Volume-wise, some agents believe this year’s resale volume could come in lower than the 6,608 units transacted in 2013, which is significantly lower than the 13,214 units moved in 2012. The resale market typically accounts for about one third of overall transactions and it’s not expected to record strong numbers this year. For 2014, analysts still expect the demand to be driven by new home launches in the suburban areas. Meanwhile, overall rental prices rebounded 1.1 per cent in January, after falling for six months. All three regions saw rental price gains in January. Rentals in the city fringe area rose 3.6 per cent. This was followed by a 0.4 per cent increase in the city area. Rentals in the suburban areas saw a 0.2 per cent gain. Source : Channel NewsAsia – 10 Feb 2014


Interest rate uncertainty hits private housing It must be a developer’s worst nightmare to flip open the newspapers and read the bold headlines screaming that new home sales have plunged to their lowest level in five years: That was exactly what happened last week. Data from the Urban Redevelopment Authority showed developers sold a paltry 259 new homes last month, down more than 90 per cent from the record high in last March of 2,793 units. Despite this, do not expect developers to start slashing prices anytime soon, because the same set of URA data showed that only 118 units were launched in the same month. If you want to be perversely optimistic about it, you could say developers sold 2.2 times the number of launched units — another record? Developers held back launches not because sentiment is very bad, but rather they have not been confident enough to hit the sales targets at the prices they hope to achieve. Developers know there are many potential buyers out there, but these buyers want lower prices to compensate for the prevailing uncertainty and the added risk they are taking. Buying interest has not waned the least bit. If buyers have left the market, it is more likely that home prices have risen beyond their means. All the curbs introduced so far via the Total Debt Servicing Ratio framework have inconvenienced many a genuine buyer looking to purchase a home to live in. However, it is just that — an inconvenience. It is different for speculators and investors. The cooling measures have not stopped this group from buying when they perceive that there is a bargain to be had — November new home sales of 1,271 units proved this. There are now heightened expectations that property prices will fall. No investor will buy today if he can get the same unit cheaper tomorrow. Yet, many investors cannot say by how much and by when prices will drop. What about upgrader demand? Almost all of this demand has migrated to Executive Condominiums (ECs), with the rest largely remaining pent-up. And so, despite recent rule changes to the EC market, including a 30 per cent Mortgage Servicing Ratio cap and the imposition of the HDB resale levy, an EC site in Jurong West attracted 12 bids with a bullish top bid of S$381.81 per sq foot per plot ratio. This is because the market is backed by strong upgrader demand, with most EC projects having sold out. Investor demand is fickle. It can come strong and fast, but it can also disappear overnight. Demand based on needs is more stable and is dependent on affordability. Developers recognise this and are willing to put in high bids for EC sites because they pose less risk compared to private housing sites. What then can we expect for the private housing market? The uncertainty over the United States Federal Reserve’s tapering of its stimulus programme has been partially resolved. While US stock markets have rallied, those in Asia are largely subdued. The stock markets in Asia are still coming to grips with the potential impact of the tapering on the region. The real estate markets in the region mirror this behaviour. Investor buyers remain unconvinced that interest rates will remain low, with borrowing costs already edging higher, but I believe this is driven largely by expectations. The latest US job report showed a sharp drop in the unemployment rate, but this was only because more people left the job market. This has reduced the labour force participation rate in the world’s largest economy. Long-term unemployment remains high, with close to 74 million Americans out of a job for more than two years. This shows that the US labour market is facing structural problems as opposed to cyclical ones. If incoming Fed Chair Janet Yellen reads it this way, there may be no acceleration in the tapering process. In fact, it could be put off indefinitely until economic reforms are implemented to resolve the structural problems. If there is no further tapering, can we expect interest rate rises? The liquidity will remain with us, but this does not mean the risks are lower. They remain high. I think an eventual interest rate hike may come suddenly via an external event other than US tapering — possibly another black swan. This is why we need to remain vigilant: It will come when we least expect it. ABOUT THE AUTHOR: Colin Tan is Director of Research and Consultancy at Suntec Real Estate Consultants Source : Today – 24 Jan 2014


MAS relaxes home financing rules for some property buyers The Monetary Authority of Singapore (MAS) will relax its home financing rules for homebuyers who had committed to residential property purchases before the rules were announced last year. This applies to buyers of private property who had signed an option to purchase the property before June 29, 2013. If they are the occupiers of the property, they will be exempt from the Total Debt Servicing Ratio (TDSR) rules. For those who bought the property for investment, they will have until June 30, 2017, to reduce their debt – such that their monthly debt repayments do not exceed 60 percent of their income. HDB and Executive Condominium (EC) owners, who bought before the mortgage servicing rules for these categories were introduced, will enjoy similar exemptions. MAS latest move was welcomed by the banking industry. Ms Koh Ching Ching, group head of corporate communications at Oversea-Chinese Banking Corp (OCBC), said: “Some borrowers with good reasons to refinance will now face less difficulties in doing so. The older home loans were not assessed with the new TDSR rules and hence the exemption for properties bought before the introduction of the stipulated TDSR rules is therefore fair.” Source : Channel NewsAsia – 10 Feb 2014


Slowdown in EC market after new rules Sales for executive condominiums (EC) slowed following new rules such as tighter loan rules for those buying EC units. Some agents said EC units, which are typically sold out in a year, may now need another year to hit 100 per cent sales. The Skypark Residences project released in November last year has sold only 60 per cent of its units so far. Another development, Waterwoods, launched in the same month, hardly made a splash with close to 40 per cent sold. Agents said past launches typically see up to 80 per cent of units sold within a month of opening. Jeffrey Hong, chief executive officer of Global Property Strategic Alliance, said: “The cooling measures are here to ensure a stable and sustainable property market, and the objectives have been achieved. Therefore, I think the lifting of cooling measures perhaps may be towards the end of the year. It is a bit too soon to say now.” Figures from the Urban Development Authority showed that out of the 3,337 units from seven EC projects launched last year, almost 970 remain unsold. The next EC project will be launched in the third quarter of this year, after a new rule stated developers can launch their units for sale only 15 months after the sites are awarded. Source : Channel NewsAsia – 8 Feb 2014


Resale prices of private homes up 2.3% in Jan Prices of resale private homes climbed 2.3 per cent in January, even as transaction volumes dropped 9.1 per cent over the same period. According to the latest data from the Singapore Real Estate Exchange (SRX), which compiles data from property agencies in Singapore, 310 non-landed private homes were resold in January 2014. Compared to a year ago, January’s resale volume plunged 70.2 per cent. 1,039 resale deals closed in January last year. The suburban area saw prices increase 2.4 per cent higher compared to a month ago, followed by the city area which rose 2.1 per cent. However, resale prices of private homes in the city fringe area declined 0.9 per cent. Meanwhile, overall rental prices rebounded 1.1 per cent in January, after falling for six months. All three regions saw rental price gains in January. Rentals in the city fringe area rose 3.6 per cent. This was followed by a 0.4 per cent increase in the city area. Rentals in the suburban areas saw a 0.2 per cent gain. Source : Channel NewsAsia – 10 Feb 2014


S’pore office rents likely to rise 5-10% this year: Savills Singapore office rents are likely to rise by 5 to 10 per cent this year, due to lack of new supply coming into the market, real estate firm Savills said on Thursday. “The overall vacancy rate of CBD (Central Business District) Grade A offices tracked by Savills declined for the fourth consecutive quarter, from 7.8 per cent at the end of 2012 to 3.4 per cent by the end of Q4 2013,” Savills said in a statement. It added that there was little new supply coming into the office market this year, with CapitaLand’s CapitaGreen, the former Market Street Carpark, and City Development’s South Beach Tower being the only large developments scheduled for completion by the end of the year. “2013 saw a turnaround in overall CBD Grade A office rents, with a 3.9 percent growth after a contraction of 4.7 percent in 2012,” the property services firm added. Grade A space refers to more sought-after office addresses in the central region that come with the wide floor plates and high ceilings favoured by financial institutions. “With limited supply, 2014 could well be the year of galloping rents.” said Savills senior research director Alan Cheong. Source : Channel NewsAsia – 6 Feb 2014


Two private residential projects to be launched in Sengkang Riverbank @ Fernvale is one of two private residential developments in Sengkang that will be launched for sale this month. Its developer, UOL, said units will be priced at an average of “slightly above S$1,000 per square foot”. The 99-year leasehold project comprises 555 apartments — 488 of them are one-, two- and three-bedroom units. The selling price of a one-bedroom unit will start from S$480,000, while the larger five-bedroom apartment will cost some S$1.3 million. Two-bedroom unit prices are from S$660,000; three-bedroom from S$880,000 and four-bedroom from S$1.06 million. UOL expects the project to appeal to buyers who are upgrading from public housing flats. But it added that investors may be keen on the smaller units. The development is located near the Seletar Aerospace Park, and future business and industrial hubs in Sengkang. Property analysts said Riverbank may face some competition for buyers from an adjacent project. Frasers Centrepoint is set to roll out Rivertrees Residences later this month. The Riverbank showflat will be opened for public viewing on Thursday, with booking of units starting from February 14. The project is expected to be completed in 2018. Source : Channel NewsAsia – 6 Feb 2014


Time may be right to tweak property cooling measures: Kwek Leng Beng City Developments Limited’s (CDL’s) executive chairman and industry veteran Kwek Leng Beng has suggested that it may be the right time for the government to tweak the property cooling measures, amid concerns over the global economy. Mr Kwek gave his views during a speech when he was presented with a Lifetime Achievement Award at an event organised by the Real Estate Developers’ Association of Singapore (REDAS) on Friday. He said as the property market cools, the government could perhaps consider lifting the Additional Buyer’s Stamp Duty (ABSD) for foreigners, Singapore Permanent Residents, and also Singapore citizens, as speculative activity is low. Currently, Singaporeans who already own one residential property have to pay an additional buyer’s tax of 7 per cent when they buy a second property in Singapore, while foreigners have to pay a 15 per cent tax to own a home in Singapore. Meanwhile, Singapore PRs who are buying their first home will have to pay an ABSD of 5 per cent or 10 per cent if they already own more than one property. Separately, REDAS president Chia Boon Kuah said the property market is showing signs of decelerating on the back of concerted efforts by the government to manage housing supply and curb speculative buying. Restrictive home loans, the increased supply of residential units and fast increasing labour costs have been “unnerving” to developers. Mr Chia said: “This is a resilient industry, and when the going gets tough, we just get more resourceful.” Meanwhile, REDAS also called on members to refocus attention on workplace safety and welfare of migrant workers in the industry. It will hold a forum to identify and discuss common causes behind construction workplace incidents, key challenges to risk reduction and best practices. Source : Channel NewsAsia – 7 Feb 2014


January COV falls to level not seen since 2009 financial crisis The median cash-over-valuation (COV) for Housing and Development Board (HDB) resale flats fell to S$3,000 in January, matching the previous low in June 2009 during the global financial crisis. Analysts Channel NewsAsia spoke to expect the COV to fall further, with 24,300 Build-to-Order (BTO) flats slated to be launched this year. According to data from the Singapore Real Estate Exchange (SRX), the median COV sank to S$3,000 last month from S$5,000 in December. In January, 893 HDB resale flats were sold — a slight drop from the 910 units sold in December. On a year-on-year basis, January’s resale volume was a 34.6 per cent drop. PropNex CEO Mohd Ismail attributed the HDB resale market condition in January to “various cooling measures put in place working at their best.” He noted the measures include the ruling that a permanent resident who intends to buy a resale flat has to wait for at least three years. “And the mortgage servicing ratio has been reduced to 30 per cent. That has a big impact. A lot of Singaporeans who want to enter and buy a resale property, which has already gone up in prices, find it a big challenge to enter the market,” he added. Real Centre Properties’ executive director Thomas Tan said: “BTO launches, the huge supply that the government has released, this will tell you that the government is telling first-timers, ‘if you are a first-timer, please buy HDB flats instead of from the resale market’. And this has taken quite a fair bit of demand, especially from the first-timers in the resale market.” Several HDB towns saw zero or negative median COV. Punggol led the drop with almost 70 per cent of transactions in the area seeing negative COVs. This is followed closely by Sengkang and Jurong West. And island-wide, almost three in 10 HDB deals closed below valuation. But resale prices gained a marginal 0.3 per cent in January, going against the general decline in monthly prices since April 2013. Some analysts attributed this to sales of niche units and penthouses. Source : Channel NewsAsia – 7 Feb 2014


Singapore’s REIT sector going through rough patch Singapore’s real estate investment trust (REIT) sector has been going through a rough patch. After seeing several bouts of sell-offs in 2013, the S-REIT index is now at its lowest level in almost one and a half years. But several REITs have reported record results this earnings season. Channel NewsAsia finds out if that could help boost sentiment in the sector. The latest REIT to list on the Singapore market has disappointed investors on its debut. OUE Commercial Trust opened below its IPO price of 80 cents last week, and has been underwater since. Analysts said part of the reason is that interest in REIT-investing has waned considerably. Daily volume for the sector has fallen, and the S-REIT Index has dropped 16 per cent over the past year, compared to a 10 per cent drop for the Straits Times Index (STI). Liu Jinshu, lead analyst at Voyage Research, said: “A bottom may have been reached right now, but the uptrend is not so obvious yet. “So from a macro perspective, I’d say that investors who are looking for income should go into REITs, but if you’re looking for capital upside, share price appreciation, I think some other sectors will be more appropriate.” But there may be some reasons to cheer. Of the 13 major REITs that have reported full-year results so far, two have achieved record distributable income — these are Ascott REIT and Keppel REIT. Another two — Cambridge Industrial Trust and Starhill Global REIT — have also hit record distribution per unit (DPU). Analysts said a combination of rising DPUs and declining unit prices will translate to higher yields for investors. However, that is unlikely to happen across the board. Investors will have to evaluate each REIT based on attributes, such as the stability of its income source and its debt structure. Wong Sui Jau, general manager at Fundsupermart.com, said: “Commercial property-type REITs are probably going to fare better, because I feel that generally, they have reached a certain level in their sell-off and there’s more potential for them to rebound, where REITs are concerned.” On average, S-REITs offer a yield of 6.8 per cent. Those returns — coupled with low or declining unit prices — now pale in comparison to the double-digit unit price gains seen in developed markets like the US and Japan. Source : Channel NewsAsia – 4 Feb 2014


London housing market shows rising bubble risk as Asians buy Singapore property investors looking to park their money in a booming overseas market should take note that London’s housing market is beginning to show “bubble-like conditions” as overseas buyers bid up prices and locals take on more debt to purchase properties, according to a report by the EY Item Club. The average London home will cost about 600,000 pounds (S$1.25 million) by 2018, the Bloomberg news agency cited the report as saying. It is about 404,000 pounds now, according to the Land Registry. Prices across most of the UK “remain well below their pre-crisis peaks and there seems little danger of a bubble,” Mr Andrew Goodwin, senior economic adviser to the EY Item Club, said in the report. “But London, which is suffering from a combination of strong demand and a lack of supply, is increasingly giving us cause for concern.” Surging London home prices, buoyed by demand from overseas investors and government initiatives to aid buyers, have prompted economists, analysts and politicians to warn of unsustainable gains. Asia has been a particularly strong source of demand for the best London properties, EY Item Club said, citing brokers. Investors from countries such as China and Singapore are taking advantage of the pound’s depreciation since the financial crisis to buy London homes. Reducing the risk of a London property bubble could be difficult because values in prime districts have outperformed the city’s peripheral areas, according to the EY Item Club report. Values in London’s best neighbourhoods, such as Mayfair and Knightsbridge, are 27 per cent above their 2007 peak, broker Savills said in November. That is more than double the gains for Greater London, according to Land Registry data. “Bursting a bubble at the luxury end of the market, which continues to attract interest from international cash buyers with the seemingly irresistible global draw of London’s X-factor, may prove tricky,” Mr Dean Hodcroft, UK and Ireland head of real estate, hospitality and construction at EY, said in the statement. The pound’s recent gains against Asian currencies and an abatement of the euro region’s debt crisis will reduce demand for homes in the UK capital’s best areas, the report forecasts. Rising supply will also curb home-value gains in London’s prime districts, it said. London’s prime housing market “has completely different drivers to the rest of the UK,” according to the report. “There is a strong argument for ignoring the excesses of the prime central London market” and “arguably it would be more appropriate to treat it as an investment market, rather than a residential market”. Source : Today – 3 Feb 2014


S’pore investors cautious about property investments in M’sia The recent slump in the Malaysian Ringgit against the Sing dollar did not spark any frenzied property buying across the Causeway among Singapore investors, according to some real estate agencies. OrangeTee and SLP International Property Consultants observed that investors have become increasingly cautious about property investments in Malaysia. Iskandar Malaysia, a special economic zone north of Singapore, has been a popular investment destination for home buyers last year as some investors were shut out of the Singapore property market due to new loan curbs and cooling measures. Market players project that on average, Singapore investors accounted for roughly one-third of the sales transactions at new property launches in Iskandar. But buying activity has slowed in recent months. Analysts said investors are now more cautious when it comes to property investment in Malaysia. There is also an increasing awareness of a large supply of new units that will be coming on stream in Iskandar Malaysia. Property agents estimated that some 50,000 to 60,000 new residential units will be available in Iskandar’s Flagship zone A and B in the next three to five years. There is also greater uncertainty surrounding real estate investment in Malaysia amid new property measures. These include rules that restrict foreigners to property purchase of homes priced above 1 million ringgit, as well as the higher Real Property Gains Tax. The latter will see foreigners taxed 30 per cent on gains they make on property sold within five years of purchase. Johnny Chng, head of international projects at OrangeTee, said: “Investors in general would want a clearer picture. They would be scrutinising every project, and they will be very selective when they do their investment.” Investors are also mindful that home prices in some areas have doubled in the past year. Analysts said current launch prices of homes in Flagship zone A, which includes Danga Bay, could start from 1,200 ringgit per square foot. While in Flagship zone B, comprising landmarks like Medini Iskandar, prices of newly launched freehold projects could cost over 1,500 ringgit per square foot. Nicholas Mak, executive director at SLP International Property Consultants, said: “Right now the weakening Malaysian ringgit is more of a short term, well, had just happened recently. It may not be enough to spur a surge in buying. “But if the Malaysian ringgit continues to remain fairly low against the Sing dollar, probably in the next three to six months, we could see a gradual pick up in buying interest again from Singaporean investors.” Mr Mak added that the cheaper ringgit is unlikely to erode rental yield just yet as rent contracts are typically locked in for at least a 12-month period, and less likely to be affected by short-term currency fluctuations. Apart from Iskandar, Singapore investors also favour properties in Kuala Lumpur and Penang. Source : Channel NewsAsia – 4 Feb 2014


Demand for homes in core central region may pick up Some market watchers said demand for homes in the core central region could pick up as early as the second half of this year, as prices continue to moderate. Property consultancy Savills added that some unsold units in the city were even transacted at below valuation. According to recent marketing materials, Hijauan on Cavenagh is offering units at prices from as low as S$1,701 per square foot. Located near Orchard Road, a 915 square foot two-bedroom unit is available for just under S$1.9 million. Property agents said the 41-unit Hijauan project is about 75 percent sold. It is not the only project selling below valuation. Alan Cheong, research head at Savills Singapore, said: “We’ve heard of anecdotal evidence where pricing has been below valuations. In the Newton area for example, prices six months ago was S$1,800 per square foot. “Today, you can get it for S$1,700 to S$1,600 per square foot for a 1,700 to 1,800 square-foot apartment. “For core central region, it is probably going to be quite the norm — (as) we expect more aggressive marketing strategies by developers.” In particular, analysts said the larger units will be a tough sell as cooling measures and loan curbs have affected the buyer’s ability to afford them. Savills said the pricing sweet spot for city homes now is probably between S$1.5 million and S$1.7 million. Home prices in the core central region fell 1.9 percent in 2013 and some analysts expect to see another 5 percent drop this year. They said that could potentially trigger a return of buying interest for core central region homes. Chris Koh, director of Chris International, said: “By middle of this year, we would have looked at four quarters of correction. Once the prices adjust by 5 to 10 percent, it would look significant. “And the moment it looks significant, my gut feel is the buyers and investors who have been waiting on the sidelines will then pour back into the market again.” Market watchers said demand for city homes could also grow if prices of units in the city fringe, or rest of central region, continue to recover. Home prices in the city fringe rose 0.4 percent in the fourth quarter of last year, compared to the 2.1 percent decline for city homes. Source : Channel NewsAsia – 3 Feb 2014


Last HUDC estate Braddell View set for privatization The Braddell View management committee said more than 80 per cent of flat owners have agreed to the privatisation of the HUDC estate, as of January 28. This is already more than the 75 per cent mandate required for privatisation. Residents have to pay a top-up to harmonise the two leases on which the estate is built, which have different expiry dates. The committee said according to the chief valuer from the Singapore Land Authority (SLA), the indicative top-up value given in September last year was S$13.47 million. Braddell View was put up for privatisation by the government last week. It is the last HUDC estate to be put up for privatisation. The management committee had started getting consent for privatisation after its Extraordinary General Meeting held in November last year. This was after more than 98 per cent of those who attended approved the resolution. There are 918 flats and two shops in the estate. Alice Liew, who has lived at Braddell View for 27 years, said: “We will feel more comfortable that it’s our own estate finally, and hopefully, the property price may go up a bit.” One issue that has to be resolved before privatisation could take place is the different expiration of the two leases. They have to be topped up so that they both expire in 2080. Based on the indicative valuation, owners of flats built on the older land parcel, or Phase One, are expected to pay S$12,000. Residents under Phase Two will pay S$8,000. The management committee plans to meet with the Housing and Development Board next week to discuss the next step and get a definitive top-up price. The committee said it hired two private valuers in 2012, who both gave an estimate of S$8 million for the top-up, compared to the S$13.47-million figure it received from the SLA chief valuer. Alex Teo, chairman of the Braddell View management committee, said: “According to present circumstances, the economy and property prices, everybody is keeping their fingers crossed — (for)… a much lower top-up price.” The committee said there have also been some owners who had raised concerns about paying the top-up premium. Mr Teo said: “A lot of these retirees have been living quite some time without jobs and without income. These retirees don’t have any children around. We’ll try to figure out how to help these residents.” The committee plans to hold a financial seminar once the final top-up value is determined to educate and present owners their financing options — which include tapping their CPF or taking a loan from banks. It also plans to use part of the estate’s sinking fund to subsidise some of the costs. There is currently around S$6 million in the fund. Teresa Ng, who has been a Braddell View resident for almost 19 years, said: “The sinking fund can help close to half of the deduction of the privatisation fee so that it’s affordable.” The whole privatisation process is expected to take about 15 months, barring any unforeseen circumstances. Source : Channel NewsAsia – 3 Feb 2014


Coney Island to open to public in 2015 Pulau Serangoon, commonly known as Coney Island, is expected to open to the public next year. Located off the northeastern coast of Singapore, the Urban Redevelopment Authority said under the Master Plan, a part of Coney Island is zoned for residential, sport and recreational use. As the land is not immediately required for development, a part of Coney Island will be kept as an interim park for the time being. The rest of the island is zoned for park use. Tender documents stated that Coney Island will have infrastructure such as a bird watching station, walkways and solar street lights. But one analyst said there is no need for residential units within such a small island. Nicholas Mak, research head at SLP International, said: “It destroys the peace and the quiet that is on the island. “If you wanted to keep a part of it as a nature reserve, for recreation, water sports, why do you need to introduce additional housing units there? It is not as if we are short of residential land within the main island of Singapore.” Source : Channel NewsAsia – 3 Feb 2014


New subletting quota likely to affect Simei, Yishun, Bt Merah first The new subletting quota for foreigners is likely to hit estates such as Simei, Yishun and Bukit Merah earlier than other areas. This is because a larger non-citizen crowd is employed in offices and other places of work located in these estates, according to analysts. The Housing and Development Board (HDB) announced the quota on subletting of whole flats to non-citizen subtenants some two weeks ago. The quota is set at 8 per cent per neighbourhood and at 11 per cent per block. From January 16, flat owners are not allowed to sublet their whole flats to foreigners, other than Malaysians. Those who are currently subletting their flats may continue to do so until the contract expires or is terminated. HDB said some towns are already seeing more foreigners renting whole units. These include the central area, Clementi, Jurong West, Queenstown and Sengkang. Property analysts Channel NewsAsia spoke with expect more areas to hit the quota, such as Changi, Simei, Tampines, Kallang, Bukit Merah, Yishun, Buona Vista and Toa Payoh. These areas are where workplaces of foreigners are typically located. Eugene Lim, key executive officer at ERA Realty Network, said: “Near employment centres, near hospitals, near centres of learning — estates in these locations will probably hit the quota earlier than other towns.” Two weeks after the new rule was implemented, analysts said landlords are still coming to terms with it. Chris Koh, director of property consultancy Chris International, explained: “For areas which have hit the quota, the pool of tenants is smaller and therefore landlords have to be more realistic in their prices. But for others, they will think that they are not affected yet and can still (dictate) the rent they want.” HDB said with the quota, it hopes to prevent the formation of foreigner enclaves in estates and maintain the Singaporean character of the heartlands. But analysts said as rental incomes fall, some flat owners may try to circumvent the rules. Colin Tan, director and head of research and consultancy at Suntec Real Estate Consultants, said: “They may get a Malaysian to rent it, and others (foreigners) may then come in to stay. “Some landlords may take the chance and say that they rent only two rooms when actually they are renting all three rooms. So to make sure that this policy is effective, there should be spot checks.” Currently, flat owners are allowed to sublet only two bedrooms per flat. Mr Koh added: “I am also concerned that as more private properties achieve their TOPs, many of these properties are bought by HDB upgraders. “So when they start collecting their keys to the new condos in the next two years, majority would prefer to rent their flat, and move into the condos. And that is when the supply issue kicks in — we end up with more flats for rent, and that would have definitely have an impact on prices.” Analysts said the authorities will be closely monitoring the market reaction and may tweak the quota accordingly. Source : Channel NewsAsia – 3 Feb 2014


Canberra Drive EC land site attracts 6 bids A land site for an executive condominium (EC) development at Canberra Drive has attracted six bids at the close of tender on Tuesday. According to the Housing and Development Board (HDB), City Developments unit Verwood Holdings and its joint venture partner TID Residential has submitted the highest bid for S$226 million. That works out to about S$350 per square foot, per plot ratio (psf ppr). The top bid is about 4 per cent higher than the second highest bid of S$216.5 million put in by MCL Land. Meanwhile, the lowest bid is from CEL Residential Development at S$168.38 million, or S$253 psf ppr. Some 600 home units are expected to be built on the 28,562.5 square metres site located in Sembawang New Town. Nicholas Mak, research head at SLP International, said: “This bid does not indicate developers are bullish, but fairly reasonable, giving developers more room to lower the price as property prices are expected to further soften.” Some analysts also pointed out that the tender for the site did not attract as many bidders as the land site at nearby Westwood Avenue. Instead, they added that the bids came mainly from seasoned players looking to replenish their land bank. CBRE Research Singapore’s Head Desmond Sim said: “Developers are more realistic, bearing in mind the new credit restrictions imposed on EC buyers, which can only be made up of Singaporeans. A City Developments spokesman said in a statement that in the event that they are awarded the site, CDL will explore a mid-rise EC development of between 10 to 11 storeys with approximately 660 units. It will also be City Development’s seventh EC project. The HDB said that the award of the tender will be announced at a later date after all bids have been evaluated. Source : Channel NewsAsia – 28 Jan 2014



January 2014 Private home prices fall for first time in nearly 2 years Singapore’s bid to tame the red-hot property market is showing signs of cooling. Private home prices fell in the fourth quarter of 2013 from the previous three months, its first decline in nearly two years. Preliminary data by the Urban Redevelopment Authority showed the private residential property price index fell 0.8 per cent in the October-December period to 214.5 points. This ended six straight quarters of price growth, including a 0.4 per cent increase in the third quarter and a 1.0 per cent rise in the April-June quarter. Prices last fell in the first quarter of 2012. For the whole of 2013, private home prices increased by 1.2 per cent, slower than the 2.8-per cent rise in 2012. Estimates are based on transaction prices compiled in the first 10 weeks of the quarter. Source : Channel NewsAsia – 2 Jan 2014


HDB resale prices fall 1.3% in Q4 2013 Prices of resale HDB flats fell 1.3 per cent — its sharpest drop since 2005 — in the fourth quarter of last year, according to flash estimates released by the Housing and Development Board (HDB) on Thursday. Last year’s fourth quarter Resale Price Index (RPI) is 202.1, according to HDB in an update released Thursday morning. It is the second consecutive drop for the index, which provides information on the general price movements in the resale public housing market. On Monday, the HDB announced that it will reduce the supply of new three-room and larger flats by 18 per cent from 22,600 units in 2013 to 18,600 units in view of stabilising demand from families. They also announced that the number of two-room BTO flats in non-mature estates will be increased from 2,600 units last year to 5,000 units this year to meet the demand from singles. Source : Channel NewsAsia – 2 Jan 2014


Singapore’s private landed residential property market to remain muted: analysts Analysts expect the private landed residential property market to remain fairly muted in 2014, following a 0.1 per cent fall in overall prices last year. Property agency PropNex said the landed homes segment is not likely to see any strong price growth anytime soon. Prices of landed homes have started to correct since 2012, rising 3.4 per cent after two years of double-digit growth. The Total Debt Servicing Ratio (TDSR) framework implemented last June has also weakened sales volume. Real estate consultancy Savills said only 465 units of landed homes were transacted in the second half of 2013, down from 865 units in the first half of the year. Total sales in 2013 were down 57 per cent from 2012. Analysts said sales are likely to remain lacklustre this year, and PropNex estimates that overall landed home prices could fall 3 to 4 per cent. Mohd Ismail, chief executive officer of PropNex, said: “The segment that really feels a little bit more of the stress here will be the semi-detached and bungalows, these are the properties that are (valued at) between S$5 million and S$10 million. “Therefore, finding the right buyers who qualify, despite all the TDSR, that person who intends to buy a property at S$5 million to S$10 million – his income on a monthly basis will have to be above S$30,000. This is where the property prices will feel some form of resistance.” Source : Channel NewsAsia – 6 Jan 2014


Crowds throng new property projects during weekend previews There has been strong interests for the first few properties opened for viewing this year. This includes what’s being called Singapore’s first retirement resort, which saw a big crowd on its first day of preview on Saturday. Its developer, World Class Land, said interests shown were mostly from those in their 50s. It was a packed showflat for The Hillford’s first viewing day. Touted as Singapore’s first retirement resort, the project offers 281 units on a 60-year lease. Apartments range from one-bedroom units to two-bedroom dual key units, and the indicative price starts from S$980 per square foot. World Class Land said units released at the upcoming VIP Preview are likely to start from S$388,000 for a one-bedroom unit, S$498,000 for two-bedroom, and S$648,000 for two-bedroom dual-key units. It added that the vision for the project was in response to Singapore’s ageing population. Jack Chua, CEO of ERA Real Estate, said: “If you look at a 99-year condominium development, a small unit nearby is about 1,600 per square foot. For Hillford, a retirement resort, pricing from S$980 per square foot is substantially below the market value. “There are more lifts, there are wider corridors to improve accessibility. There are also medical (facilities) and eateries within the development. In addition, there is also a 24-hour concierge service and full-time resort manager to organise activities like dancing classes and yoga for the residents.” “Price wise, it’s all right. It’s not very expensive,” said a prospective buyer. Mdm Tan, who is 70 years old, said: “I think it’s a bit small, if my grandchildren come, it’ll be a problem. We have to consider first.” While the project may be touted to be a retirement resort, there is no age restriction for those hoping to buy a unit. Some property analysts think this may attract a small group of younger buyers hoping to rent out their units. Mohamed Ismail, CEO of Propnex, said: “Regardless of a 60-year, a 99-year, or even a freehold, the rent is about the same. The rental is likely to be five to 10 per cent higher than a comparable either 99-year or freehold because the demand will be there for people who want to put their loved ones, or people themselves who want to stay and enjoy all these facilities. “But what I cannot imagine here is a retirement village (where) at the end of the day, youngsters who just want to stay there for convenience, then the objective would not be right.” Location was another draw for young potential buyers. The project is located at Jalan Jurong Kechil in the Bukit Timah area. Joseph Zhu, 31 years old and a Singapore PR, said: “We are mainly considering to buy the place near the good school that we can enrol our kids. Like for us young people, if we cannot afford the very expensive condominium, this could also be an option for us.” But some property analysts say resale value may be an issue in the long run. Chris Koh, director of Chris International, said: “My concern is when there are 40 years lease left. That’s when I expect the value to come down. We have today rulings on the usage of CPF, banks may also be a bit more conservative in lending the money for the purchase. But for the next five, 10 years, I still see this project will still hold its value.” Over in Ang Mo Kio, new condominium The Panorama also opened for preview. It has 698 units on offer. Marketing agents said the response has been good so far, especially since there have not been many new projects in the area. Tan Tee Khoon, executive director of Residential Services at Knight Frank, said: “Our sales persons on the ground who have been speaking to prospective buyers have indicated keen interest from families who have school going children, young professionals, as well as those who want to live near their parents living in the vicinity.” Both projects are likely to be open for bookings in two weeks’ time. Source : Channel NewsAsia – 4 Jan 2014


Property auction market remains tepid The property auction market in Singapore went into a deeper slumber in the fourth quarter, with only S$3.9 million in sales closed, a 15.1 per cent decline from the preceding quarter’s already tepid S$4.6 million, as loan curbs and cooling measures continued to weigh on the market, real estate firm Jones Lang Lasalle (JLL) said yesterday. Ms Mok Sze Sze, JLL’s Head of Auction and Sales, said: “The credit tightening measures of the Total Debt Servicing Ratio (TDSR) and the Additional Buyer’s Stamp Duty (ABSD) deterred investors and were considered to be the major attributes of the rather quiet auction market in the second half of 2013.” “Buyers have been very cautious at this point in time, when the property market is believed to have reached an inflection point. On the other hand, most of the sellers do not seem willing to lower their price expectations. Both sides are still waiting for market clarity,” she added. Under the TDSR, effective from June 29 last year, financial institutions must ensure that housing loans they grant do not push a borrower’s total debt payment obligations above 60 per cent of his or her monthly income. A rate of 3.5 per cent, or the prevailing interest rate, whichever is higher, is also used to calculate loan repayments. The framework came after the ABSD was imposed in January as well as a seller’s stamp duty on industrial properties. The fourth-quarter sales value was 88.1 per cent lower than the five-year average quarterly sales of S$32.7 million, and 91.5 per cent lower than the 10-year average quarterly sales of S$46 million, JLL said. The number of properties sold during auction increased from three in the third quarter to four in the fourth. For the full year, the number of properties sold by auction fell by 19.2 per cent to 21 last year from 26 in 2012, but the corresponding total sales value climbed 69.5 per cent to S$99.6 million. While this was due to a higher number of large deals closed during the year, the total sales quantum in 2013 was still 23.9 per cent below the five-year average of S$130.8 million, and 45.9 per cent less than the 10-year average auction sales of S$183.9 million. The largest auction deal last year was a factory at 39 Benoi Road worth S$25.6 million, which was sold in February by JLL. It said it accounted for the highest auction sales last year, in terms of property value, among all the auction houses. JLL said it believed that an auction is the preferred sales avenue of many residential property owners, but it noted that in the recent two quarters, properties sold during auction were all from the industrial sector. Looking ahead, Ms Mok said: “The majority of players believe that market fundamentals remain strong. Mild and gradual recovery is expected in the coming quarter. Increase in sales volume compared to 2013 is predicted as buyers and sellers seek ways to absorb the additional costs incurred due to the cooling measures. In the near term, the auction market is likely to gain back the sales momentum and recover at a faster pace as investment sentiment improves. Generally speaking, we expect higher success rate and better market performance in 2014.” Source : Today – 3 Jan 2014


CapitaLand, CapitaMalls Asia, CapitaMall Trust sign option to sell Westgate Tower CapitaLand, CapitaMalls Asia and CapitaMall Trust have signed an option to sell Westgate Tower for S$579.4 million. In a filing with the Singapore Exchange, CapitaLand said the option was granted to a consortium comprising Sun Venture Homes and Low Keng Huat (Singapore), which has up to January 24 to exercise it. Located at Jurong Gateway, Westgate Tower is the office component of the Westgate integrated development which also includes a shopping mall. The 20-storey prime office tower has a net saleable area of 304,963 square feet, and is targeted to be completed in late 2014. Source : Channel NewsAsia – 3 Jan 2014


Changi Village area on track to be developed into sports & recreational centre The Changi Village area is on track to be developed into a sports and recreational centre. And analysts said the recently completed Changi Cove hotel near Hendon Road could be part of the government’s plan to develop the entire area into a resort and corporate retreat site. Some of the colonial buildings around Changi Village are currently undergoing upgrading. There are plans to redevelop them into a spa resort, restaurants and even a corporate training centre. Five of the buildings along Hendon Road, which are expected to house the spa and restaurants, belong to the Singapore Land Authority (SLA). The SLA has since tendered out the operations of those five buildings. Nearby, the Changi Civil Service Club, located near the Changi Point Ferry Terminal, is also undergoing upgrading. The upgrading is expected to be completed by the second quarter of 2014. The Civil Service Club said once the upgrading is completed, the gross floor area of the facility will be tripled. Twenty per cent of that space will be designated for food and beverage and leisure space outlets. Observers feel that the location in the east of the country can provide an alternative to the city centre. Chris Koh, director of Chris International, said: “It is away from the city so if one wants to avoid the hustle and bustle of the city, the large populated areas, lots of commercial and industrial… then Changi will be a nice place.” Source : Channel NewsAsia – 1 Jan 2014


Two private residential projects to open for preview Two private residential projects are expected to be launched for viewing on Saturday. But property agents said booking of units will only start mid-January. First off the block is The Panorama at Ang Mo Kio by Wheelock Properties. Prospective buyers can visit the showflat on Saturday to find out more about the 698-unit project. Property analysts estimated the units could go for between S$1350 and S$1500 per square foot. Another project that is open for preview on Saturday is retirement resort The Hillford at Jalan Jurong Kechil by World Class Land. Sold on a 60-year lease, the project will offer 281 residential units with elderly-friendly features. Indicative prices range from over S$400,000 for a one-bedroom apartment of about 400 square feet to over S$700,000 for a two-bedroom dual key unit spanning 657 square feet. That works out to about S$1,000 per square foot. Ku Swee Yong, chief executive officer of Century 21 Singapore, said: “If you brought the 60-year lease back up to 99 years, then S$1,000 for 60-year lease would be equivalent to S$1,800 per square foot. That is very pricey. “The retirement home scheme where land parcels are sold for shorter leases in order to keep prices down, more affordable, I think that objective has been missed. Given the fact that developers are able to shrink it (unit), lower the quantum, however, increases the dollar per square foot significantly for their profit.” Source : Channel NewsAsia – 3 Jan 2014


Land parcel at Westwood Avenue attracts 12 bids A land parcel at Westwood Avenue for executive condominium (EC) development has attracted 12 bids at the close of tender on Tuesday. The Housing and Development Board (HDB) said the top bid of S$198.9 million came jointly from Changi Properties and Heeton Homes. This translates to a land price of S$382 per square foot per plot ratio. The next highest bid of S$198 million is a joint tender from Verwood Holdings and TID Residential. Meanwhile, the lowest bid was submitted by Sim Lian Land for S$93.8 million. CBRE Research head Desmond Sim said in a note that the 12 bids “demonstrate developers’ hunger to replenish their land banks in light of the pull-back in Government Land Sale sites”. He added that “the relatively palatable quantum for the site was another contributing factor for the high number of bids”. Meanwhile, Christine Li, head of research & consultancy at Orange Tee, said “the bullish bids by developers for the Westwood Avenue site could be due to pent-up demand in the area”. The Westwood Avenue EC site is the first to be sold since measures were announced to tighten mortgage servicing terms for EC buyers. This would increase the cost of EC units for HDB upgraders and tighten financing for the overall EC market. The measures, which are in effect after 10 December 2013, include a cap of the Mortgage Servicing Ratio for housing loans granted by financial institutions for EC units bought directly from property developers at 30 per cent of a borrower’s gross monthly income, and the imposition of a resale levy for second-time applicants. Experts said Westwood Avenue EC’s breakeven price should be around S$750 per square foot (psf), and they expect the selling price to be around S$820 psf. Some 485 units are expected to be built on the 99-year leasehold site which measures 17,284.8 square metres. HDB said the award of the tender will be announced at a later date after all the bids have been evaluated. Source : Channel NewsAsia – 7 Jan 2014


Long House Food Centre sold to TEE Ventures for S$45.2m In what could be bad news for foodies, the popular Long House Food Centre along Upper Thomson Road has been sold to TEE Ventures, a subsidiary of TEE Land Limited, for S$45.2 million. A statement by Knight Frank Singapore said that under the 2008 Master Plan, the 16,960 square feet (1,575.6 sqm) freehold site is designated for “Commercial and Residential” use, with a Gross Plot Ratio of 3.0. It said that the site is suitable for redevelopment into a four-storey mixed-use development with shops on the lower levels and residential apartments on the upper levels. The property is located close to Marymount MRT Station and the upcoming Upper Thomson MRT Station, Thomson Plaza shopping mall as well nearby dining, shopping and entertainment facilities. It is strategically located next to an exclusive enclave of low-rise housing estate in the well sought-after Upper Thomson area. Vehicular access to other parts of the island is also enhanced by its close proximity to Central Expressway and Pan Island Expressway. Source : Channel NewsAsia – 7 Jan 2014


Private property likely to be hit by soft HDB market: ERA The weakening Housing and Development Board (HDB) resale market is expected to weigh on the private property market, as upgraders will have less money at their disposal when looking for a new home. “There will be an impact on the private housing market because upgraders are typically former HDB flat owners. So, with the HDB resale market slowing down, we may see a smaller number of upgraders moving on to buy private properties,” said ERA’s Key Executive Officer Eugene Lim. “We have already seen this happening in 2013: The final number of transactions in the private market is expected to be 20 to 30 per cent down. This means there are already fewer people moving on to the private market,” he said. Making matters worse is the additional buyer’s stamp duty, which hinders upgraders looking to purchase a private property, he added, saying this may drive more prospective buyers to the executive condominium (EC) market. “That’s holding back genuine upgraders from the HDB market from buying private property … but they won’t have that problem if they buy ECs.” Source : Today – 10 Jan 2014


1,425 licensed estate agents as at January 1: CEA The Council for Estate Agencies (CEA) has said it has licensed 1,425 estate agents and registered 31,783 salespersons as at January 1. About 3,300 of the registered salespersons are new entrants to the industry last year, compared to about 4,500 in 2012. This represents a drop of about 27 per cent. Last year, CEA issued licences to 1,492 estate agents and registered 31,040 salespersons. However, 88 agents and 3,382 salespersons indicated they would leave this year. CEA said the number of registered salespersons has remained fairly consistent for the last three years, at around 31,000 after each renewal exercise. Source : Channel NewsAsia – 9 Jan 2014


COV for HDB resale flats falls to S$5,000 in Dec 2013 The overall median cash premium or Cash-Over-Valuation (COV) for HDB resale flats fell to S$5,000 in December last year, from S$8,000 in November 2013. This is the lowest since June 2009 when COVs were at a low of S$3,000. It was a 37.5 per cent drop month-on-month, according to the latest flash report released by the Singapore Real Estate Exchange (SRX) on Thursday. In December, about one in five (20.2 per cent) HDB resale transactions or 141 transactions were also made below valuation, or at a negative-COV. That is an increase from 13 per cent in November and just 0.6 per cent in January last year. According to SRX, the overall median valuation also fell in the fourth quarter of 2013. It fell from S$438,000 in the third quarter, to S$435,000 in the fourth. This decline in valuation is a first since the fourth quarter of 2009, during the global financial crisis. Source : Channel NewsAsia – 9 Jan 2014


Private condo rentals fall to 2-year low: SRX Rents for non-landed private housing in Singapore continued to slide last month to their lowest level in two years, and landlords may find it increasingly difficult to secure tenants, with more supply entering the market in the coming months, analysts said. Rents for condominiums fell 1.3 per cent last month, the fifth straight monthly decline, to their lowest level since December 2011, a preliminary report by the Singapore Real Estate Exchange (SRX) showed yesterday. Rents have fallen 5.5 per cent from the January peak, the data showed. Meanwhile, the private resale housing market remained quiet, with prices dipping another 0.2 per cent from the previous month, while the transaction volume was flat at 377 deals, the SRX report showed. The sales volume for the whole of last year was 6,550 deals, 46.7 per cent lower than in 2012, as property curbs continued to bite. Analysts attribute the softening in rents to the increase in the number of completed private homes as well as tighter restrictions on foreign employment, with expatriates accounting for a large portion of the demand. “It continues to be a tenant’s market (owing) to the new supply of completed buildings and the cut in foreign manpower employment. Older apartments and condominiums will experience the impact more as they will find it hard to compete against newer developments,” said Mr Eugene Lim, Key Executive Officer of real estate agency ERA. The SRX report showed that the number of leases last month fell to an estimated 2,188, down from 2,274 in November. Still, for the whole of last year, 31,788 rental deals were estimated to have been transacted, higher than the 30,593 in the previous year. A total of 19,302 new completed private homes are expected to hit the market this year, and another 19,727 and 26,355 units are expected in the next two years, respectively, according to data from the Urban Redevelopment Authority. Analysts said these would add further pressure to rents. “We notice that fewer people are coming in on expatriate terms. Most of them are now on local packages, so the rent-paying capability is correspondingly lower,” said Savills Head of Research and Consultancy Alan Cheong. Mr Lim said the private housing market would stay subdued as the Government is expected to keep in place its cooling measures until it is satisfied that the market has stabilised. “Overall, we can expect private property prices to further moderate by 6 to 10 per cent in 2014,” he said. Source : Today – 14 Jan 2014


Private home resale prices fall for 4th month in December Prices of resale private homes fell for a fourth month in December as prices weakened by a further 0.2 per cent, according to the latest data from the Singapore Real Estate Exchange (SRX) which compiles data from property agencies in Singapore. The city area saw the steepest decline at 2.3 per cent, followed by the suburban region, which dipped 1.0 per cent. Resale prices of private homes in the city fringe bucked the overall trend by climbing 2.9 per cent. An estimated 377 non-landed homes were resold in December, comparable to November’s 375 units sold. Meanwhile, SRX said rental prices of non-landed private homes slipped 1.3 per cent in December, marking the fifth straight monthly fall for the sector. All three regions saw rental price decreases in December, with the city area seeing the sharpest fall of 1.8 per cent. Rents in the city fringe slipped by 0.9 per cent, while those in the suburban region fell 0.5 per cent. Singaporeans continue to invest in London properties Despite rising interest rates and a capital gains tax to be implemented in the UK in 2015, Singaporean investors’ appetite for properties in London remains strong. In addition, buyers are getting younger too. A serious housing shortage has pushed up average property prices in London by over 25 per cent over the last four years. Colliers International expects London property prices to ease over the next two years, after the 5.5 per cent increase in 2013. In 2014, London properties may see slower price growth of 4.5 per cent and it will decelerate further to 4.2 per cent in 2015. Yet, a rebound in prices is expected in 2016 and 2017, at about 6.5 per cent growth annually. Singaporeans have never stopped looking to buy properties in London, despite interest rates possibly rising. Nina Davies, operations director of international properties at Colliers International, said: “We haven’t seen any nervousness at all in the market. That does not reflect in what we have seen in our buyers and potential buyers. We have certainly seen strong demand.” Financing has never been a major consideration for local investors when snapping up London properties. After all, one out of three Singaporean buyers of foreign property uses cash to finance their purchases. This is according to a survey of 250 buyers in Singapore by Colliers International. And a quarter of respondents have at least one property in London. Market experts have said Singaporean buyers are no longer just middle-aged, as buyers aged between 25 and 30 are increasingly putting their money on a property in London. Singaporean buyers usually have a longer investment view of five to 10 years, renting out the property to generate returns. Current yield in central London is about 3 per cent, according to Jones Lang LaSalle. Doris Tan, director of Jones Lang LaSalle Residential, said: “With London as the cosmopolitan city, you can see that there is an influx of people every year. Rentals will not be so much of a problem. “There is a short of supply but the demand is always there. So rentals should be attractive. But of course, if prices continue to go up, yields will be lower, it is still attractive in the sense that there will be capital gains along the way.” Now, investors will have to factor in the capital gains tax for non-residents in the UK, which will come into effect in April 2015. Source : Channel NewsAsia – 10 Jan 2014


No takers for some colonial bungalows in S’pore Some of Singapore’s iconic black and white bungalows continue to stay vacant, as the authorities find it difficult to attract residential tenants. House number 7 along Gallop Road has been launched three times for bidding, but in the last six months, there haven’t been any takers. The 106-year-old house was built during the colonial era, and its monthly rental is more than S$50,000. The “Atbara House” next door — which used to house the French Embassy — is going at S$43,000 per month and faces the same problem. Chris Koh, director of Chris International, said: “There must be someone willing to pay. We’re talking about a premium because of (the size and location) of the sites – that could be one. Number two is there’s a lot of upkeeping of the place.” Ku Swee Yong, CEO of Century 21 Singapore, said: “If we rent these out to private companies for marketing events, or as corporate training centres, then we could see more bids.” There are about 500 of these bungalows in Singapore, located in central areas like Nassim Road, Goodwood Hill and Bukit Timah, as well as in areas further from the city, like Alexandra Park, Sembawang and Seletar. They are all state-managed, and to date, 90 per cent are used for residential purposes. A small proportion has been rented out to F&B outlets. Source : Channel NewsAsia – 12 Jan 2014


Property agencies encouraging agents to look into overseas and rental markets With property transactions dampened by various cooling measures last year, some real estate agencies have said they are encouraging their agents to diversify their income stream. That means looking beyond local transactions and venturing into the overseas and rental markets as well. The Council for Estate Agencies (CEA) announced on Thursday that there was a 27 per cent fall in the number of new property agents in 2013, compared to 2012. 25-year-old Victor Chan became a real estate salesperson last year. But on the back of loan curbs and other property cooling measures, the market was less than rosy for him. He said; “Usually on weekends, I would go for about 15 to 20 viewings. During the November, December period, calls actually slowed down, until there were no viewings on weekends or at most just one.” With more free time, the computing graduate fell back on what he knew – programming mobile apps to sell. One of them is a financial calculator that helps property agents compute a client’s finances. Mr Chan said: “I have been getting a few hundred dollars and this actually helps to cover the expenses there are for my current listing’s advertisement.” To cope, Mr Chan added he has focused his real estate efforts on the Woodlands area, a town where he said there are more resale transactions because prices are more affordable. It is a strategy adopted by his team at DWG. With local sales slowing, some property agencies like ERA Realty Network and HSR International Realtors said they have encouraged agents to consider the overseas and rental markets for income. Common overseas locations include Malaysia and Australia. Donald Yeo, head of marketing and training at HSR International Realtors, said that agents typically get about one month of commission for a two-year rental deal. With new rules barring new Permanent Residents (PRs) from buying a HDB resale flat for three years and more private properties being completed, agencies expect rental demand to grow. Mr Yeo said: “Compare 2012 and 2013, we have witnessed a 30 per cent increase in our rental transactions and business. People who may not want to purchase a property right now may think that still prices may be coming down, so they (adopt) a wait-and-see (approach), so right now, they are actually residing in a rental flat.” Some property agencies said they have also increased the frequency of training for their salespeople. This is to better equip them with the skills and knowledge to advise their clients on a deal in the current property climate. Source : Channel NewsAsia – 10 Jan 2014


Tender for Upper Paya Lebar site attracts 7 bids A sales tender for a private residential site at Upper Paya Lebar Road has attracted seven bids, said the Urban Redevelopment Authority (URA) on Tuesday. UOL Overseas Investments submitted the top bid of S$392.3 million for the 99-year leasehold site. The bid was about 3.7 per cent more than the second highest bid of S$378.3 million from EL Development. The lowest bid of about S$205.9 million was submitted by Asset Legend. The land parcel has a site area of nearly 20,080 square metres and could potentially yield 670 residential units. Analysts said the top bid of S$392.3 million works out to a land price of about S$648 per square foot per plot ratio (psf/ppr), beating previous top bids for nearby sites. For instance, the land price was S$495 psf/ppr for the Bartley Ridge site sold in January 2012, and S$621 psf/ppr for Bartley Residences tendered in March 2011. ERA said UOL may look to sell the units at S$1,200 to S$1,300 per square foot, or higher if market conditions turn favourable, while CBRE expects the selling price to range between S$1,300 and S$1,400 psf, pegged to the selling prices of Bartley Residences and Bartley Ridge. Meanwhile, Nicholas Mak, executive director of SLP International Property Consultants, said: “Going by the healthy interests shown at both Bartley Residences and Bartley Ridge, the subject development is similarly likely to experience healthy home-buying interest. “We estimate the developer’s break-even price to be at S$1,050 to S$1,100 psf while the future project is likely to launch at S$1,240 to S$1,300 psf.” URA said a decision on the award of the tender will be made after the bids have been evaluated. Source : Channel NewsAsia – 14 Jan 2014


PropNex launches new property investment fund Property agency PropNex has launched a new fund to invest in real estate at the development stage in a partnership with fund management company Infiniti Asset Management. PropNex says the new fund – Infiniti Real Estate Strategies Fund – is designed to co-invest with developers in land bids for both local and overseas projects. These include executive condominiums and commercial properties in Singapore. The minimum outlay per investor is S$100,000 and PropNex hopes to grow the fund to S$50 million by June. PropNex says it has raised more than S$6 million at its soft launch last week. Investors have to be accredited by the Monetary Authority of Singapore (MAS). This means they need to have a net-worth of at least S$2 million or an annual income of above S$300,000. PropNex adds it is targeting a 10 per cent return per annum. Mohamed Ismail, CEO of PropNex, says: “Last year, when there were a slew of measures that restricted many people – TDSR, ABSD, Loan-To-Value and other restrictions, they find it hard to enter the real estate market, which is brick and mortar and many of these people have preference to these kind of investments. “In a way, we are trying to provide alternative solutions to people who are very much interested in property investments.” Source : Channel NewsAsia – 14 Jan 2014


OUE Commercial REIT first of REIT listings on SGX this year OUE Commercial REIT is set to be the first major initial public offering (IPO) in Singapore this year. It will also be the first among a slew of trust listings — including the ones planned by Korea’s Lotte Shopping and Keppel’s data centre unit — that’s headed for the Singapore bourse. Overseas Union Enterprise (OUE) has started taking orders for its S$400 million REIT listing. The IPO is priced at 80 Singapore cents a unit, and represents a 6.8 per cent yield for 2014. Liu Jinshu, lead analyst at Voyage Research, said: “It’s quite a decent yield compared to other REITs. For example, the FTSE ST REIT Index has an average dividend yield of between 5 and 6 percent. “From this point of view, I’d expect there to be takers, although the sentiment for REITs over the last one year has not exactly been the most exciting.” OUE Bayfront is one of two assets that make up OUE Commercial REIT. The other is the Lippo Plaza property in Shanghai. When listed, the REIT will be OUE’s second trust listing in just six months. Analysts said as the REIT landscape becomes more crowded in Singapore, investors are likely to become more and more discerning. They said REIT investors should look beyond IPO pricing and indicative yields. Instead, they should drill down into the specific assets in a REIT’s portfolio, considering factors such as tenant leases and occupancy rates. According to OUE Commercial REIT’s preliminary prospectus, nine of the top 10 tenants for OUE Bayfront will see their leases expiring over the next one to three years. These top 10 tenants make up 76.4 per cent of the building’s gross rental income. This could be a source of risk, as rental income may be affected if the leases are not renewed, or renewed at less favourable rates. Still, some analysts do not see the REIT landscape getting over-crowded in Singapore. They said there is a critical mass of investors in the REIT market, which is one of the world’s largest, with a market capitalisation of S$83 billion. Jack Wang, a partner at Lexico Advisory, said: “Definitely, investors now will have more choices, and they can compare. “In Singapore, maybe Suntec REIT and CapitaCommercial Trust will provide a very good barometer for them to use as a yardstick when it comes to evaluating and comparing different characteristics and yields of the property.” Experts said another key consideration in REIT investing is potentially higher interest rates globally. This could increase financing costs for REITs and reduce their dividend payout to investors. Other considerations include the location of the REIT’s assets, and whether the REIT has a steady pipeline of new properties to acquire. Source : Channel NewsAsia – 14 Jan 2014


Sales of new private homes down 80% in December Sales of new private homes plunged nearly 80 per cent in December compared to a month ago, as developers held off new property launches. According to data from the Urban Redevelopment Authority (URA), just 259 units of new private homes were sold in December, down from 1,228 units transacted in November. Among the units sold, 125 are located in the suburban areas, 90 units in the city fringe, and 44 units in the core central region. URA data showed that just 118 new units were launched in December. With the exception of one unit in the suburban area, the rest of the new private homes launched were in the city area. Including sales from executive condominium projects, 333 new units were sold in December, down from 1,714 units in November. December may be a typically quiet period but property consultants said the weak sales performance in December was mainly due to the government’s cooling measures. This brings the total annual sales volume in 2013 to 14,980 units, which is some 30 per cent lower than 2012 sales. Going forward, some market experts expect property prices to weaken in 2014. “We are forecasting softening of prices of between five to eight per cent for the entire market,” said Chua Yang Liang, head of research at Jones Lang LaSalle. Source : Channel NewsAsia – 15 Jan 2014


Are 60-year leasehold residences here to stay? We are reminded regularly that one in five Singaporeans will be over the age of 65 come 2030. Immigration policies and the mix of new Singaporeans can alter our demographics, but the total number of senior citizens will certainly increase. In public housing, the Housing and Development Board (HDB) already has several schemes catering for the elderly. But a pilot project was introduced in 2012 on the private housing front: Sixty-year leasehold residences targeted at retirees. To test the interest of developers, the Urban Redevelopment Authority (URA) was generous in its incentives for this project provided conditions around Retirement Housing were met: An additional 10 per cent gross floor area and no limits on the maximum number of Dwelling Units (which means it can be filled with shoebox or pigeonhole units). Developers took the bait: There were 23 bids submitted on Nov 15, 2012. Fast forward to now. The Hillford in Bukit Timah is set to launch this weekend with 281 units, 186 of which are one-bedroom units with average sizes of around 410 sq ft. Buyer interest seems high, fuelled by the relatively low outlay with prices from around S$400,000. Thousands of visitors have visited the showflat. But how attractive is the development from an investor’s perspective? And will this be a one-off experiment or the first of such properties? ATTRACTIVE RETURNS? Investors are probably attracted by the potential rental income. One possible buyer offered the following scenario: Rentals for the one-bedroom units may fetch S$2,200 per month. This means that over the 57-year lease period that would remain post-construction, the total rental income could potentially be S$1.5 million. Subtracting the purchase price of about S$400,000, that implies a profit of about S$1.1 million. Ignoring stamp duties and other costs, as well as the vacancy period between tenants, one flaw in this proposition lies in the monthly rental expectation of S$2,200 for a 398 sq ft apartment that includes a bomb shelter and an air-con ledge. In comparison, monthly rentals for two-bedroom units in Signature Park (1,055 sq ft) across the road are currently around S$2,500. A little further off, Springdale (970 sq ft) rents are approximately S$2,750. Both are condominium projects with much bigger grounds and facilities including tennis courts. A four-room HDB flat (about 1,000 sq ft) in nearby Bukit Batok may be rented at S$2,200 per month. The record high supply of private residences (about 19,000 units this year and next, and 23,000 units in 2016) will also put a cap on rentals. Investors might also overlook the fact that if they wanted to sell this property, say 10 years from now in 2024 when the lease is left with 48 years, the next buyer may only get a maximum loan term of 18 years, which would limit the pool of potential buyers. VALUATIONS The estimated launch prices range from S$1,000 to S$1,100 per sq ft for this 60-year leasehold property. Using a straight line depreciation to zero value over 60 years, the equivalent price based on a 99-year lease is as high as S$1,815 psf. If we adopt industry valuation methods and reference the Leasehold-Freehold tables from the Singapore Land Authority (SLA), a price of S$1,100 psf for a 60-year lease translates to an equivalent of S$1,320 psf for a 99-year lease. However, at the other extreme, considering that banks do not lend for residential properties with a remaining lease of 30 years or less (and Central Provident Fund monies cannot be used to service the instalments), the depreciation is even steeper and, therefore, the equivalent price in 99-year terms might well be in excess of S$2,500 psf depending on the residual value of the final 30 years of lease. Optimistic and eager investors often look beyond these issues and hope for a brighter future. SCORECARD FOR SUCCESS Apart from the development’s investment potential, a few milestones will need to be cleared before we can determine the final scorecard of this pilot project in assessing whether it is delivering on its aims. Firstly, after the project is fully sold, we need to understand the profile of all the buyers. If the buyers are owner-occupiers, how many are senior citizens and retirees? Secondly, after the construction is completed in two years, we need to tote up the profile of the tenants in this “retirement resort” — what proportion are senior citizens or retirees? And most importantly — say three years after completion — we should take another look at the profile of the tenants in the apartments and the services provided in the commercial units below. Are the tenants elderly citizens and are the commercial outlets providing services relevant for retirees and eldercare? The scorecard should be objectively assessed against the list of incentives given to developers for building retirement housing. And if these three final checks returned satisfactory results, i.e. the completed property is largely serving the needs of retirees, then the authorities might consider selling more residential land parcels on 60-year leases with similar incentives. By Ku Swee Yong – property agent and CEO of real estate sales organisation Century 21 Singapore. He is the author of two bestsellers: Building Your Real Estate Riches and Real Estate Riches. Source : Today – 17 Jan 2014


HDB sets quota on subletting of whole flats to non-Singaporeans The Housing and Development Board (HDB) has introduced a quota on subletting of whole flats to non-citizen subtenants. It said the move is to prevent the formation of foreigner enclaves in estates and maintain the Singaporean character of the heartlands. HDB flat owners who lease out whole units to foreigners will be bound by the new rule, with immediate effect. The quota on subletting of whole units to non-citizen subtenants applies to all foreigners, except Malaysians. It is set at 8 per cent per neighbourhood and at 11 per cent per block. Owners who wish to lease their units must make sure the quotas for both are not exceeded. HDB said some towns are already seeing more foreigners renting whole units. These include the Central area, Clementi, Jurong West, Queenstown and Sengkang. HDB said the new policy will apply to all flat subletting applications. Owners currently subletting their whole flat with HDB’s approval may continue to do so for the remaining approved duration. However, if the remaining duration is more than one-and-a-half years, it will be reduced to one-and-a-half years from the date of inclusion. The maximum period of subletting will be three years for Singaporeans and Malaysians, and one-and-a-half years for non-citizens.HDB said Malaysians are excluded as they “better integrate into our estates due to their cultural and historical similarities with Singaporeans”. For enquiries, members of the public can call 1800-5556370 between Mondays and Fridays, from 8am to 5pm. Source : Channel NewsAsia – 16 Jan 2014


Rental yield for non-landed private homes falls below 4% Rental yield for non-landed private homes fell below four per cent in 2013, according to figures from the Singapore Real Estate Exchange (SRX). The median gross rental yield for non-landed private residential properties dropped from 4.2 per cent in 2012 to 3.9 per cent last year. SRX said 4 per cent represents a psychological barrier when it comes to rental yields for investors seeking income from residential properties. With rental yield at below 4.0 per cent, investors worry that inflation will wipe out their gains. Four locations in the prime areas — Orchard, Tanglin, Sentosa Cove and Newton — saw gross rentals yield below 3 per cent. Analysts attribute this to the high prices of homes in these locations because of their location, as well as downward pressure on rents as expatriate allowances shrink or disappear. Meanwhile, Outram, Yishun, Geylang, Tampines and Jurong West registered gross yields above 4.0 per cent. Source : Channel NewsAsia – 17 Jan 2014


Buyers snap up “retirement resort” condo on first day of sale A condominium touted as Singapore’s first retirement village was sold out on its first day of sale. Despite concerns about The Hillford’s shorter 60-year lease, buyers – both young and old – snapped up all 281 apartments. By 9am on Friday, The Hillford showflat at Upper Bukit Timah was already crowded with some 1,000 prospective buyers. Within the first one-and-a-half hours, more than 80 units were already sold. That is 30 per cent of what is available. The project has been marketed as a “retirement resort” for active seniors with elderly-friendly facilities and commercial space set aside for health care and elder care. But with the condo located near the upcoming Beauty World MRT station in Bukit Timah, seniors were not the only ones interested. This is despite the smaller flats and shorter 60-year lease. Private properties in Singapore usually have a 99-year lease or are freehold. Analysts said The Hillford’s popularity shows people are receptive to properties with a shorter lease. Chris Koh, director of Chris International, said: “For many, at the end of the day it’s the price. If it’s affordable, and the quantum is low, you can see they’re willing to buy.” But there are concerns that the facilities for the elderly may not materialise if there are too many young buyers. A lot will depend on the property’s management body, which will be made up of residents, said Mr Koh. He said: “They must remember the essence of this village. It’s for the elderly, for retirement, and they should not just change it overnight to cater to the youngsters who live in the project.” Christine Li, head of research and consultancy at OrangeTee, said: “In order to make this retirement concept more meaningful, there could be some restrictions, such as the age of the buyer, as well as some resale restrictions.” Sales figures are still being worked out, but the developer World Class Land said it expects a “substantial proportion” of buyers to be over 50 years old. Source : Channel NewsAsia – 17 Jan 2014


The Arcade at Collyer Quay put up for tender Prime commercial development, The Arcade, is being put up for tender at a guide price of S$900 million. The 20-storey building located at Collyer Quay, which is partly owned by City Developments, has a maximum allowable gross floor area of some 303,000 square feet, and total existing strata area of some 157,000 square feet. Under the 2008 Master Plan, the site is zoned for “commercial” use with an allowable plot ratio of 13.86, and a building height of up to 50 storeys. Based on recent transactions around the area, office space at the 999-year leasehold development is expected to be priced at above S$3,500 per square foot, and retail space at above S$12,000 per square foot. The tender closes on March 19. Source : Channel NewsAsia – 2 Jan 2014


Raffles Medical Group acquiring site for S$105.2m to expand hospital Private healthcare provider Raffles Medical Group is acquiring a site next to Raffles Hospital at North Bridge Road for S$105.2 million. In a statement, the hospital group said the total development cost of the project, including the purchase price of the site, construction costs and improvement works to the existing hospital, is estimated to be about S$310 million. The construction period is estimated to be about 24 months. The 1,978.10 square metre site has a plot ratio of 5.6, and would yield a gross floor area (GFA) of 11,077.36 square metres. The group said it had obtained provisional permission from the Urban Redevelopment Authority in July 2010 to increase the plot ratio on the hospital’s existing land from 4.2 to 5.6, representing an additional increase in GFA by 9,534.98 square metres. The combined additional GFA will amount to 20,612.34 square metres. The group said Raffles Hospital currently receives international patients from more than 100 countries, making up a third of the total patient load and contributing to Singapore’s positioning as a medical hub. The expansion will allow Raffles Hospital to expand its range of sub-specialty centres. These include investment in state-of-the-art technologies such as for radiotherapy for cancer treatment and nuclear medicine. In addition, the hospital plans to develop a number of centres of excellence, such as for cancer, heart diseases, infertility and spine and joints. The centres will be affiliated with international medical centres as appropriate, to bring in expertise and technology that will help strengthen the clinical breadth and depth of the hospital’s services. The planned extension will also provide space for the hospital to expand its healthcare education and clinical research activities. Source : Channel NewsAsia – 22 Jan 2014


Aspial buys Melbourne property for S$48m SGX-listed Aspial Corp has acquired a property in Melbourne, Australia, which it plans to redevelop into the city’s tallest building. The A$42.3 million (S$48 million) deal is for a freehold low-rise commercial building in downtown Melbourne which has a total land area of about 2,625 square metres. In a statement on Wednesday, Aspial said the property has two active planning permits, of which one is for redeveloping the building into a 388-metre tower. Subjected to aviation clearance, the company added that it plans to build a 312-metre tall residential and commercial tower. When completed, it will be the tallest building in Melbourne with more than one million square feet of gross floor area. Based on preliminary plans, the company said the tower’s topmost floor will be accessible to the public. Currently, the tallest skyscraper in Melbourne is the 297-metre Eureka Tower, just a few blocks away from Aspial’s acquired property. Aspial’s chief executive officer said: “It is certainly a groundbreaking milestone for Aspial to play a part in the development of the tallest skyscraper in Melbourne, which will soon lend its compelling presence to the city’s urban skyline”. The latest deal comes shortly after the company had announced that it has acquired another freehold property in Melbourne’s CBD area at King Street. Source : Channel NewsAsia – 22 Jan 2014


3,139 HDB flats offered in first BTO launch of the year The Housing and Development Board (HDB) has launched six Build-To-Order (BTO) projects on Wednesday, the first exercise this year. A total of 3,139 new flats will be offered to meet the diverse needs of first-timers, second-timers, multi-generation families, the elderly and singles. This is the first tranche of the 24,300 BTO flats that HDB has planned for 2014. There will be studio apartments, 2-room to 5-room flats, and 3Gen flats. The flats will be available in four non-mature towns — Bukit Batok, Jurong West, Punggol and Woodlands — and Serangoon, which is a mature town. The price (excluding grants) of a 2-room flat in Woodlands Glen at Woodlands Drive 15 and Woodlands Avenue 6 starts from S$73,000 whereas the same room-type in Punggol Vue along Punggol Way is priced from S$84,000. A 3-room flat in Woodlands Glen is priced from S$145,000 whereas the selling price for one in Bukit Gombak Vista at Bukit Batok Street 31 starts from S$221,000. Punggol BayView along Punggol Way will offer larger flat types — 5-room flats from S$393,000 and 3Gen flats from S$433,000. 4-room flats are available in Woodlands Glen and Punggol BayView, with prices starting from S$234,000 and S$293,000. Studio apartments will be available in three projects — Golden Lavender in Jurong West, Bukit Gombak Vista and Golden Ginger along Serangoon North Avenue 1, with prices starting from S$83,000 and S$87,000. With the start of this launch, HDB will introduce a standard suite of eco-features in all new public housing developments to help manage water, energy and waste more efficiently. These include eco-pedestals in bathrooms which recycle water for toilet flushing, LED lighting with motion sensor controls and regenerative lifts that help to lower energy consumption, and centralised chutes for recyclables to promote recycling. More covered bicycle parking lots and bicycle wheel ramps will also be added to new projects to encourage residents to adopt a more environmentally-friendly mode of transport. Application for the January BTO flats can be submitted online from Wednesday to January 28. In March 2014, HDB will offer about 3,500 new flats in Sembawang, Sengkang and Yishun. Source : Channel NewsAsia – 22 Jan 2014


MCC Land Singapore rolls out festive promotion for EC units Executive condominium (EC) developer MCC Land Singapore has rolled out a festive promotion in a bid to drive sales during the Lunar New Year period. The developer told Channel NewsAsia that it is offering a small price discount for EC units at Forestville at Woodlands and Sea Horizon in Pasir Ris. Forestville is developed by Hao Yuan Investment while Sea Horizon is jointly developed by Hao Yuan Investment and Sustained Land. Both developments are managed by MCC Land. To attract more visitors to its showflats, MCC Land is offering a S$3,888 discount off the purchase price of EC units at Sea Horizon and Forestville. This works out to a 0.5 per cent discount for a three-bedroom unit at Forestville, priced at around S$740,000. Richard Nah, senior manager at MCC Land Singapore, said: “What we are doing here is just adding a little bit of festive cheer. In this day and age, we will try all ways and means. Already it is kind of difficult to encourage the visitors to come by, so every little bit helps.” The promotion started on January 10 and Mr Nah said it could be extended beyond the Lunar New Year period, depending on the response. Sales activity has weakened since the government introduced a 30 per cent mortgage servicing ratio for EC loans from banks last December. That has affected buyers’ ability to secure a larger loan quantum. MCC Land said this has slowed sales of larger and pricier EC units. Among its two projects, Sea Horizon has 120 unsold four- and five-bedroom units while Forestville has 59. The average selling price for units at Forestville is S$740 per square foot (psf) while it is S$810 psf for Sea Horizon. Some analysts said it is uncommon for EC developers to run festive promotions. But with slower sales and new launches coming up in the second half of the year, they said these promotions will go some way to clear the unsold units. Property agency PropNex said that over the past month, it has sold over 30 EC units, but just two are five-bedroom units which cost S$1.1 million and above. PropNex is marketing four EC projects, including Waterwoods in Punggol, Skypark Residences in Sembawang, Sea Horizon and Forestville. It said promotional activities will likely draw buyers, but it does not expect EC developers to start slashing prices for existing projects and new launches over the next few quarters. Mohd Ismail, CEO of PropNex, said: “Those that are currently available in the market and those that are going to be launched in a couple of quarters, all these ECs are not subjected to resale levy, therefore the developers also know they have a strength that these are a limited stock. “Mainly because of that, there is no reason for the developers to bring down the price significantly, because the demand for these properties will be strong as we are talking about a levy, savings for the consumers to the tune of S$40,000 to S$50,000.” Analysts expect EC buyers who are upgrading from a public housing flat to have to pay a resale levy from 2015. The new requirement, announced last year, applies to EC land sales which are launched on or after 9 December 2013, including those where the tenders have not closed. The levy will range from S$15,000 to S$50,000 depending on the flat type of the buyer’s first HDB property. Source : Channel NewsAsia – 21 Jan 2014


Hotel site housing former Joo Chiat police station attracts 8 bids A sales tender for a hotel site housing the former Joo Chiat police station at East Coast Road has attracted eight bids. According to the Urban Redevelopment Authority (URA), a consortium comprising Master Contract Services and Keong Hong Construction submitted the top bid of S$352.8 million. This was around 10 per cent higher than the second highest bid of S$321.3 million put in by CEL Residential Development. The tender for the site was triggered from the reserve list last November, after an unnamed developer committed to a bid of at least S$160 million. The lowest bid in the tender came from GP Hotel Equity, which offered S$168 million. The 99-year land parcel located at the junction of East Coast Road and Joo Chiat Road has a gross floor area of about 24,700 square metres. It is also where the former Joo Chiat Police Station sits. The successful bidder will have to retain and restore the two-storey former Joo Chiat Police Station as part of the hotel development. The government has also stipulated that up to 40 per cent of the maximum permissible gross floor area will be allowed for commercial use such as office and retail space. Analysts said another challenge facing the developer of this hotel is that as the hotel could yield 600 rooms, it would have to provide sufficient parking space. Source : Channel NewsAsia – 21 Jan 2014


Private home prices fall for first time in nearly 2 years Singapore’s fourth quarter private home prices fell 0.9 per cent — the first time in almost two years as the government’s mortgage curbs took effect. The dip in prices was slightly more than the 0.8 per cent drop based on preliminary data announced on January 2. According to final data from the Urban Redevelopment Authority (URA), prices of private homes for the full year rose 1.1 per cent, lower than the 2.8 per cent seen in 2012. Prices of private homes in the suburban region declined by 1.0 per cent in the fourth quarter — the first drop since the second quarter of 2009. The URA had earlier estimated prices in this area to have fallen 0.6 per cent in the fourth quarter. Non-landed private residential units in the core central region fell 2.1 per cent, slightly slower than the 2.2 per cent fall estimated earlier. Prices in the city fringe rose 0.4 per cent, bucking the earlier estimate of a 0.6 per cent dip. In 2013, prices in city area dropped 1.9 per cent, while the city fringe saw prices dip 0.1 per cent. Prices in suburban area increased by 6.5 per cent. Developers sold 14,948 units in 2013, significantly fewer than the 22,197 units sold in 2012. Meanwhile, rentals of private residential properties decreased by 0.5 per cent in the fourth quarter, compared with the 0.2 per cent increase in the third quarter. This was the first time that rentals have fallen since the third quarter of 2009. For the full-year 2013, rentals increased by 0.9 per cent, lower than the 2.1 per cent increase in 2012. Source : Channel NewsAsia – 24 Jan 2014


First annual dip in HDB resale prices in 8 years The Resale Price Index (RPI) for HDB flats for the full year of 2013 has dropped 0.6 per cent, the first annual decline since 2005. Data released by the Housing and Development Board (HDB) showed that the RPI fell 1.5 per cent from 204.8 in the third quarter of 2013 to 201.7 in the fourth quarter of 2013. The number of resale transactions for the full year of 2013 dropped 28 per cent to 18,100 — the lowest volume since 1997 since HDB started keeping records. Resale transactions fell by 12 per cent from 4,529 cases in Q3 to 4,001 cases in Q4. Subletting transactions fell by 3 per cent from 7,505 cases in Q3 of last year to 7,268 cases in the fourth quarter. The total number of HDB flats approved for subletting rose 1.6 per cent from 44,966 units in Q3 2013 to 45,674 units in the following three months. HDB will offer 24,300 BTO flats in 2014. The first batch of 3,139 BTO flats in Bukit Batok, Jurong West, Punggol, Serangoon and Woodlands were launched earlier this week, on January 22. In the upcoming March BTO exercise, HDB will offer about 3,400 new flats in Sembawang, Sengkang and Yishun. The details will be available on the HDB InfoWEB when HDB launches the sales exercise. Source : Channel NewsAsia – 24 Jan 2014


URA to monitor outcome of first retirement village before deciding on future land sites The Urban Redevelopment Authority (URA) said it will monitor and review the outcome of Singapore’s first retirement village before deciding if it will release more land for similar projects in the future, or tweak any parameters. It added that as retirement housing is a relatively new concept in Singapore, it saw merit in giving the market and the developer the flexibility to determine the concept for this new housing development. The Hillford at Jalan Jurong Kechil was a sellout, with all 281 units snapped up in a day. With units priced at around S$400,000 to S$700,000 and its location in the Bukit Timah area, the project attracted buyers, including retirees, young families and some investors. Its developer, World Class Developments, said that a substantial proportion of buyers were over 50 years of age. Sold on a 60-year lease, The Hillford comes with elderly-friendly features and is aimed at providing affordable housing for retirees. “The land sales were loosely defined and… not restricted to people of a certain age, certain cohort nor… restrict them from leasing out the units,” said Alan Cheong, research head at Savills Singapore. “I would believe quite a number of them would have bought it for rental income yield, because (in a) worst case scenario, you still get a five per cent gross yield and that return is even better than the average shoebox (apartments) that you are getting.” Property analysts are mixed as to whether there is scope for the development of more retirement housing projects in the private residential market in Singapore. But they said should the government plan to release more of such sites, stricter conditions must be attached to the tender as the notion of retirement homes may be lost without rules specifying who could buy these units. They added that sites for retirement homes should also be located near healthcare facilities such as a hospital. “The first aspect that the government could consider would be to look at the minimum age for home buyers,” said Alice Tan, associate director and head of consultancy and research at Knight Frank. “The minimum age could be tied in with the mandatory retirement age set by the government. Now the retirement age is 62, (so) I guess the age of 60 and above would be quite palatable. “Secondly, in order to preserve the unique concept of retirement homes, URA could consider releasing sites based on a two-envelope tender that would mean that tenderers who submit their bids for the land sites would also need to submit concepts.” “Incentives or rebates could come to existing projects”, said Desmond Sim, associate director at CBRE Research “Maybe the state could give incentives or rebates for developers to turn some of the units to be more elderly friendly. In that way, there is a guarantee of integration of the elderly.” In addition, analysts said buyers should also consider if such units will be well-received in the resale market. Mr Sim said: “Let’s say you have a lease of six years and (if) you put it out on the market, 54 years will be left. It is untested on the buyer’s side whether the buyer could obtain a loan from the bank to finance the purchase. “Banks are generally quite restrictive in giving loans to properties that have a reduced tenure.” Source : Channel NewsAsia – 23 Jan 2014


Non-landed private home resale prices fall 0.7% in December Prices of resale non-landed private homes declined 0.7 per cent in December after falling by 0.5 per cent in November, according to the flash estimate of the NUS Singapore Residential Price Index (SRPI). The drop was led by resale homes outside the central area where prices dipped 0.9 per cent last month, after a 0.1 percent decline in November. Resale prices for private homes in the central area fell at a slower pace at 0.3 per cent in December, compared to a 0.9 per cent fall in the previous month. Meanwhile, resale prices of small units also continued to weaken, falling by 0.6 per cent in December, after a 0.5 per cent decrease in November. Source : Channel NewsAsia – 28 Jan 2014


Private home prices fall faster than expected Private home prices fell in the last three months of last year in the first drop since the beginning of 2012, figures released by the Urban Redevelopment Authority (URA) today (Jan 24) showed. Prices of private residential properties dipped by 0.9 per cent in the fourth quarter of last year, greater than the 0.8 per cent drip that the URA forecast earlier this month. The last time overall prices fell was in the Q1 2012. For the year 2013 as a whole, prices of private residential properties increased by 1.1 per cent, lower than the 2.8 per cent increase in 2012. Prices of non-landed properties in the Core Central Region (CCR) further declined by 2.1 per cent, after the 0.3 per cent decrease in the previous quarter. In Outside Central Region (OCR), prices declined by 1.0 per cent, the first decrease recorded in the region since Q2 2009. Prices in the Rest of Central Region (RCR) recovered 0.4 per cent, after registering a 0.9 per cent decline in the previous quarter For the year 2013 as a whole, prices in CCR and RCR decreased by 1.9 per cent and 0.1 per cent, respectively, while prices in OCR increased by 6.5 per cent. There was no growth in the prices of private landed properties. Rentals of private residential properties decreased by 0.5 per cent in Q4 2013, compared with the 0.2 per cent increase in Q3 2013. This was the first time that rentals have fallen since 3rd Quarter 2009. For the year 2013 as a whole, rentals increased by 0.9 per cent, lower than the 2.1 per cent increase in 2012. Source : Today – 24 Jan 2014


HDB resale prices fall more than expected in Q4 2013 Resale prices for HDB flats fell more than expected in last three months of 2013 when compared to flash estimates, figures released today (Jan 24) show. The Resale Price Index (RPI) fell by 1.5 per cent from 204.8 in the third quarter of last year to 201.7 in the fourth quarter. The RPI for the full year of 2013 registered a decline of 0.6 per cent, the first annual decline in eight years, since 2005. Flash estimates released earlier this month indicated the RPI would fall by 1.3 per cent. Resale transactions decreased by 12 per cent from 4,529 cases in Q3 2013 to 4,001 cases in Q4 2013. The number of resale transactions for the full year of 2013 was 18,100, a decrease of 28 per cent over 2012. The median resale prices and cash-over-valuation (COV) amounts in the various towns are tabulated in Annexes C and D. HDB RENTAL MARKET Subletting transactions fell by 3 per cent from 7,505 cases in Q3 of last year to 7,268 cases in the fourth quarter. The total number of HDB flats approved for subletting rose 1.6 per cent from 44,966 units in Q3 2013 to 45,674 units in the following three months. HDB will offer 24,300 BTO flats in 2014. The first batch of 3,139 BTO flats in Bukit Batok, Jurong West, Punggol, Serangoon and Woodlands were launched earlier this week, on Jan 22. In the upcoming March BTO exercise, HDB will offer about 3,400 new flats in Sembawang, Sengkang and Yishun. The details will be available on the HDB InfoWEB when HDB launches the sales exercise. Source : Today – 24 Jan 2014


Keppel REIT seeks buyers for Prudential Tower: Sources Keppel REIT, the second-biggest office property trust in Asia excluding Japan, is seeking buyers for its 30-storey Prudential Tower in Singapore’s financial district, Bloomberg News reported on Monday, citing two people familiar with the matter. Keppel REIT owns a 92.8 per cent stake in the tower, which was valued at S$490 million as of Dec 31 by independent valuers, according to the company’s filing on Jan 20. The property is fully occupied, that report showed. Keppel REIT is seeking S$2,400 a square foot for Prudential Tower, one of the sources said, declining to be identified as the information is private. The price would value the trust’s stake at S$531 million, based on the 221,241 square feet of space it owns in the building. “Keppel REIT does from time to time receive interest to acquire our properties,” it said in an e-mailed response to Bloomberg News queries. “We will consider all potential divestments and acquisitions, and will make an announcement if and when any such deals materialize.” The Singapore-based real estate investment trust is looking to sell older assets to help fund acquisitions, Chief Executive Ng Hsueh Ling told reporters on Jan 20. The REIT may approach Keppel Land, its biggest shareholder, to buy the developer’s stake in the city’s Marina Bay Financial Centre Tower 3, she said. Source : Today – 27 Jan 2014




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