Swiss bank chief upbeat on Singapore property market
Genevieve Cua
The Business Times
Wednesday, 24 February 2010
Dr Varnholt: 'I can't see a bubble yet and for the foreseeable future in a place like Singapore.'
Singapore real estate is 'exceptionally attractive' from a yield and capital appreciation perspective, says Bank Sarasin chief investment officer Burkhard Varnholt.
He dismisses fears of a bubble, even in the wake of new measures here to quell speculation.
Last Friday, the government announced the imposition of a new seller's stamp duty for those buying residential properties from Feb 20, and a reduction in the loan to value limit for home loans from 90% to 80%. New private home sales had rebounded sharply last month.
'Even though concern for monetary tightening in Asia is widespread, fundamentally I continue to view markets like Singapore as exceptionally attractive ... I think real estate price can double over the next 3 to 5 years and maintain attractive yields.
'That's based on comparing property prices in Singapore against global peers, and the expected capital inflow from the rest of Asia into the Singapore market in the next few years.'
Dr Varnholt says the crisis in Greece has made central bankers in developed markets wary of how stimulus is withdrawn.
'The combination of cheap money and strong growth in the east, as well as weakness in the west, with the sustainable recovery in corporate and non-financial earnings and balance sheets - I think those make a powerful case for real assets, for real estate and equities.'
His preference in Asia, he adds, is for real estate over equities 'because for the first time in many years, Asian equities have become more expensive than the MSCI World'.
For Sarasin clients, he is recommending real estate funds, as single real estate purchases are 'something the clients should do themselves because of the lack of liquidity'.
'Travelling the world, I can't see a bubble yet and for the foreseeable future in a place like Singapore ... which has the quality of life, business friendliness, political and economic stability.'
Dr Varnholt remains positive on the prospects for emerging markets, but the bank's 'roadmap' for investments differs markedly from last year when its balanced portfolio's exposure to emerging markets were at a high of 55% to 60%.
This year, the allocation has been cut drastically to about 10%, thanks to valuation concerns. 'We shifted our equity exposure from emerging markets to super-competitive western blue chip companies that benefit from cheap currencies and leverage on the boom in Asia and the emerging markets,' he says, citing companies such as Coca-Cola and Nestle.
These defensive companies pay an 'extraordinarily' attractive dividend yield against low corporate and sovereign bond yields.
He sees a number of key risks in the horizon. One is a 'super' spike in commodity prices caused by resources bottlenecks. A second risk is China's 'ballooning' money supply growth which is likely to prompt more tightening measures.
Meanwhile, China's reserves held in US bonds have shifted substantially to short dated bonds. In this context, the bank maintains a weighting in gold as an insurance against a dollar crisis, even though the latter is not its base case.
A third risk, is that the housing market globally is likely to have more downside as in many markets, prices look expensive based on price to income and price to rent ratios.
Still, the current cycle remains positive for equities, he says. The recovery in non-financial earnings will lead into 2011. 'The environment is not too hot or too cold. It's historically one of the best environments for equities,' he says.
Showing posts with label SG property news. Show all posts
Showing posts with label SG property news. Show all posts
Wednesday, February 24, 2010
Friday, February 19, 2010
Government to introduce new tax, lower loan limit to cool private property market
SINGAPORE: The Government has introduced two new measures that will take effect Saturday to temper sentiments and pre-empt a property bubble from forming in the private residential market.
It said they will help to ensure a stable and sustainable property market.
The first is a Seller's Stamp Duty on all residential properties and residential lands that are bought after Friday and sold within one year from the date of purchase. The stamp duty will be applied at the standard ad valorem stamp duty rates for the conveyance, assignment or transfer of property.
Housing and Development Board (HDB) flats will not be subjected to the stamp duty as they are already subject to a minimum occupation period of at least one year.
The Ministry of National Development (MND) said the objective of this new tax measure is to discourage short-term speculative activity that could distort underlying prices. It stressed that it is not targeted at the purchase of properties for owner occupation or longer term investment.
The housing loan limit will also be capped at 80 per cent of the private property's value, instead of the current 90 per cent.
The 80 per cent Loan-To-Value limit will apply to all housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats, including those under the Design, Build and Sell Scheme.
Loans granted by the HDB for flats - including those under the Design, Build and Sell Scheme - will still have a cap of 90 per cent.
MND said this is because HDB flats are already subject to other criteria to prevent speculation and encourage financial prudence, such as minimum owner occupation period and restriction on ownership to one flat per household.
Explaining the rationale for the measures, MND said there is a risk that the market could overheat in the next few months, given the optimism fuelled by the economic recovery and low global interest rates.
However, it noted that the current level of speculative activity is still lower than what it was at the height of the property market boom. Overall price levels are below the previous peak.
MND warned that any excessive exuberance will make the property market vulnerable to the continuing risks in the global economy.
The Government described the new measures as "calibrated", saying it prefers to take small steps early, rather than be forced to impose more drastic measures after a bubble has formed.
It will continue to ensure that there is adequate supply of housing to meet demand. Sites that can yield 10,550 private housing units have already made available in the Confirmed and Reserve List of the Government Land Sales (GLS) Programme in the first half of 2010.
This is the highest supply quantum in the history of the GLS Programme.
- CNA/sc
It said they will help to ensure a stable and sustainable property market.
The first is a Seller's Stamp Duty on all residential properties and residential lands that are bought after Friday and sold within one year from the date of purchase. The stamp duty will be applied at the standard ad valorem stamp duty rates for the conveyance, assignment or transfer of property.
Housing and Development Board (HDB) flats will not be subjected to the stamp duty as they are already subject to a minimum occupation period of at least one year.
The Ministry of National Development (MND) said the objective of this new tax measure is to discourage short-term speculative activity that could distort underlying prices. It stressed that it is not targeted at the purchase of properties for owner occupation or longer term investment.
The housing loan limit will also be capped at 80 per cent of the private property's value, instead of the current 90 per cent.
The 80 per cent Loan-To-Value limit will apply to all housing loans granted by financial institutions for private residential properties, Executive Condominiums, HUDC flats and HDB flats, including those under the Design, Build and Sell Scheme.
Loans granted by the HDB for flats - including those under the Design, Build and Sell Scheme - will still have a cap of 90 per cent.
MND said this is because HDB flats are already subject to other criteria to prevent speculation and encourage financial prudence, such as minimum owner occupation period and restriction on ownership to one flat per household.
Explaining the rationale for the measures, MND said there is a risk that the market could overheat in the next few months, given the optimism fuelled by the economic recovery and low global interest rates.
However, it noted that the current level of speculative activity is still lower than what it was at the height of the property market boom. Overall price levels are below the previous peak.
MND warned that any excessive exuberance will make the property market vulnerable to the continuing risks in the global economy.
The Government described the new measures as "calibrated", saying it prefers to take small steps early, rather than be forced to impose more drastic measures after a bubble has formed.
It will continue to ensure that there is adequate supply of housing to meet demand. Sites that can yield 10,550 private housing units have already made available in the Confirmed and Reserve List of the Government Land Sales (GLS) Programme in the first half of 2010.
This is the highest supply quantum in the history of the GLS Programme.
- CNA/sc
Sunday, November 22, 2009
Saturday, November 14, 2009
What’s up at the bay
Posted by luxuryasiahome on November 15, 2009
In 1992, there were plans for a landmark twin tower – Singapore’s tallest office buildings – just at the water’s edge in Marina Bay, soaring to as high as 80 storeys.
A model of the towers was even on exhibition in 1996 when plans were unveiled for the area.
Those monumental structures never quite materialised on the fringe of the waterfront. And it was probably a good thing: Imagine how people in the other buildings behind the two mammoth structures would have felt.
The new plan by Singapore’s urban planners was much more equitable: Let everyone have a piece of the bay views.
It was a rethinking that meant throwing out the original blueprint of densely developed buildings along the waterfront, and creating districts rather than block after block of commercial buildings.
And so it was mandated that waterfront developments should not rise above 50m in height, while buildings will step up gradually, much like how seats are arranged in a theatre.
When the Urban Redevelopment Authority (URA) was tasked with the job of planning for Singapore’s future land needs, it was not just about dumping soil into the sea to create more land.
The bigger challenge was sculpting the skyline, making sure it looks picture perfect on every postcard and tourist snapshot.
Meticulous planning
Marina Bay is, undoubtedly, Singapore’s crown jewel – arguably the most ambitious and longest-in- planning development the Government has ever undertaken.
An enormous amount of contemplation, engineering and investments has been poured into this prime plot, which the public had a glimpse of when Prime Minister Lee Hsien Loong shared a fly-by video of it at his National Day Rally speech this year. In his rally speech in 2005, he gave a preview of the new Marina Bay, which was still at the drawing stage.
The Government has already pumped in $7.5 billion in infrastructure cost to make the land ready for investors, while total private investments tally up to $20.2 billion to date.
Around 24ha of land within Marina Bay has already been sold for development, including sites for One Raffles Quay, the Marina Bay Financial Centre and Marina Bay Sands.
It is where everyone will congregate and where everything will happen: the annual night-time Formula One race, New Year’s Eve countdown, National Day Parade, big-scale conventions, an upcoming casino, the new financial centre and the city’s highest luxury residential blocks.
With the bay’s most iconic development – integrated resort Marina Bay Sands – about to open for business in the first quarter of next year, anticipation and excitement are at an all-time high.
But it has taken more than 30 years to get to this point. At the beginning, there was nothing – not even land.
Land reclamation exercises from 1969 to 1992 produced about 370ha in the bay area and 80ha in Marina Centre, in anticipation of the nation’s economic growth and, with it, the extension of the Central Business District (CBD).
Unlike, say, Canary Wharf in East London, which was developed as a huge office and shopping precinct that is separate from the city’s traditional financial centre in The Square Mile, Marina Bay’s advantage is in its integration with the current financial district.
‘It is not the old downtown and the new downtown. Marina Bay is planned as a seamless extension of the existing CBD,’ said Mr Andrew Fassam, deputy director of URA’s urban planning department.
All new roads branch off from existing road networks at Raffles Place and Shenton Way.
Singapore’s urban planners also made a conscious decision to frame the bay, and ensure that the area would have a mix of uses where there would be life after dark – 24/7, in fact.
Another design principle was that it had to be a place for everyone and ‘not just the affluent’, said Mr Fassam.
So the Government decided to put in public-pleasing facilities: A 3.4km promenade linking the major public attractions like the Merlion, Esplanade – Theatres on the Bay and the upcoming ArtScience Museum; underground links lined with shops; and 100ha of land set aside for three waterfront gardens.
But it also decided to zone the area as a ‘white site’, which means that developers have the flexibility to build according to their vision.
When property tycoon Kwek Leng Beng bid for a plum piece of land fronting the bay, he had initially wanted the project to be half-commercial.
He later changed his mind and developed The Sail instead, two residential blocks towering at 63 and 70 storeys which saw no lack of takers, even though property analysts were initially sceptical and felt only that an office building would work on that site.
The URA also allotted larger parcels in the area so developers could build bigger buildings based on the needs of financial institutions, such as trading floors.
An upcoming development, Asia Square, is hoping to plug the gap for Grade A office space in town, especially those that have column-free floor plates.
When completed, the two towers will add 2 million sq ft of office space to the mix.
‘What clinched the deal for us was the availability of a huge parcel of land that could be developed into premium grade A+ office space, sitting in a prime location that is well-connected to the business hub,’ said project director Jeremy Choy.
The development’s parent company, Macquarie Global Property Advisors, bid more than $2 billion for the land.
The integrated development also houses a 280-room five-star hotel, and has space for retail and food and beverage, in addition to office space.
Mr Choy added that one of the critical deciding factors was the long-term plan for the area.
That the area was supported by the latest advances in infrastructure, like access to a district cooling system, also helped seal the deal.
Buildings in the area are served by common services tunnels which carry sewerage, water and telecommunication pipes typically buried under the road. These tunnels can be accessed without digging up the roads.
This is the first such network in South-east Asia.
The district also has its own cooling system, which makes for better economies of scale. In the pipeline is a centralised pneumatic refuse collection system that sucks all rubbish to one central location and saves the garbage truck from having to go door to door.
Even the greening of the area has been planned to a T. Planting plans include green, pink and yellow themes for different districts within the area. Coupled with this is a night lighting plan, which was originally designed for the Civic District but has since been extended to the CBD and Marina Bay.
Under the plan, buildings are required to be lit as part of the sale conditions, while the Government gives a cash grant to existing buildings around the bay to light up.
‘We can put good hardware in place, but that doesn’t mean that the place will be successful. The right software is important to make it come alive,’ acknowledged Mr Fassam.
So it went and wooed private investors by going to overseas fairs, some of which have translated into successful land sales.
Good long-term prospects
Likewise, the clincher for Marina Bay Sands has been the long-term prospects of the area and the growing exhibition and convention business, said its chief executive officer and president Thomas Arasi.
‘The company’s investment and commitment were based on the fact that Singapore has breadth and depth across all the major travel segments to make the integrated resort thrive. Few global gateways offer everything that Singapore can offer tourists from around the region and around the world,’ he said.
Over the years, the plan has been constantly refined – from when it first appeared as a concept plan in the 1970s, to 2000, when the first site was launched – which has since been developed into what is now One Raffles Quay.
At one point, Marina South was thrown up as a possible site for the Singapore Management University campus, but it was decided that the university should go back to where the schools traditionally were, in the Bras Basah area.
Marina South’s interim tenants have since all gone, and infrastructure works are taking place there now. That land had been sold on short-term leases of between 21 and 24 years after it was reclaimed. Those leases expired last year.
But the fervent development of Marina Bay as the new financial hub has also thrown up some concerns, among which is whether there will be an oversupply of office space, especially since the economy has been hit so badly.
The authorities do not seem worried.
Some office leasing agents have reportedly seen an increased number of leasing enquiries over the last quarter as rental rates became more competitive, and lease packages offered by landlords became more attractive, said URA.
And this could spur demand and help absorb some of the office space that is coming on stream.
Some developers have also continued to delay the completion of their projects, while a few others are considering converting existing office buildings in the CBD to residential use.
This would help regulate the supply of office space, they reason.
There has been quite a bit of international interest, said Mr Fassam, with investors asking when the next parcel will be released for sale.
But the authorities are in no hurry to open the floodgates and let buildings sprout.
After all, it has taken three decades for Marina Bay’s transformation, and it could well take another three decades to fill up the rest of the land.
Source : Sunday Times – 15 Nov 2009
In 1992, there were plans for a landmark twin tower – Singapore’s tallest office buildings – just at the water’s edge in Marina Bay, soaring to as high as 80 storeys.
A model of the towers was even on exhibition in 1996 when plans were unveiled for the area.
Those monumental structures never quite materialised on the fringe of the waterfront. And it was probably a good thing: Imagine how people in the other buildings behind the two mammoth structures would have felt.
The new plan by Singapore’s urban planners was much more equitable: Let everyone have a piece of the bay views.
It was a rethinking that meant throwing out the original blueprint of densely developed buildings along the waterfront, and creating districts rather than block after block of commercial buildings.
And so it was mandated that waterfront developments should not rise above 50m in height, while buildings will step up gradually, much like how seats are arranged in a theatre.
When the Urban Redevelopment Authority (URA) was tasked with the job of planning for Singapore’s future land needs, it was not just about dumping soil into the sea to create more land.
The bigger challenge was sculpting the skyline, making sure it looks picture perfect on every postcard and tourist snapshot.
Meticulous planning
Marina Bay is, undoubtedly, Singapore’s crown jewel – arguably the most ambitious and longest-in- planning development the Government has ever undertaken.
An enormous amount of contemplation, engineering and investments has been poured into this prime plot, which the public had a glimpse of when Prime Minister Lee Hsien Loong shared a fly-by video of it at his National Day Rally speech this year. In his rally speech in 2005, he gave a preview of the new Marina Bay, which was still at the drawing stage.
The Government has already pumped in $7.5 billion in infrastructure cost to make the land ready for investors, while total private investments tally up to $20.2 billion to date.
Around 24ha of land within Marina Bay has already been sold for development, including sites for One Raffles Quay, the Marina Bay Financial Centre and Marina Bay Sands.
It is where everyone will congregate and where everything will happen: the annual night-time Formula One race, New Year’s Eve countdown, National Day Parade, big-scale conventions, an upcoming casino, the new financial centre and the city’s highest luxury residential blocks.
With the bay’s most iconic development – integrated resort Marina Bay Sands – about to open for business in the first quarter of next year, anticipation and excitement are at an all-time high.
But it has taken more than 30 years to get to this point. At the beginning, there was nothing – not even land.
Land reclamation exercises from 1969 to 1992 produced about 370ha in the bay area and 80ha in Marina Centre, in anticipation of the nation’s economic growth and, with it, the extension of the Central Business District (CBD).
Unlike, say, Canary Wharf in East London, which was developed as a huge office and shopping precinct that is separate from the city’s traditional financial centre in The Square Mile, Marina Bay’s advantage is in its integration with the current financial district.
‘It is not the old downtown and the new downtown. Marina Bay is planned as a seamless extension of the existing CBD,’ said Mr Andrew Fassam, deputy director of URA’s urban planning department.
All new roads branch off from existing road networks at Raffles Place and Shenton Way.
Singapore’s urban planners also made a conscious decision to frame the bay, and ensure that the area would have a mix of uses where there would be life after dark – 24/7, in fact.
Another design principle was that it had to be a place for everyone and ‘not just the affluent’, said Mr Fassam.
So the Government decided to put in public-pleasing facilities: A 3.4km promenade linking the major public attractions like the Merlion, Esplanade – Theatres on the Bay and the upcoming ArtScience Museum; underground links lined with shops; and 100ha of land set aside for three waterfront gardens.
But it also decided to zone the area as a ‘white site’, which means that developers have the flexibility to build according to their vision.
When property tycoon Kwek Leng Beng bid for a plum piece of land fronting the bay, he had initially wanted the project to be half-commercial.
He later changed his mind and developed The Sail instead, two residential blocks towering at 63 and 70 storeys which saw no lack of takers, even though property analysts were initially sceptical and felt only that an office building would work on that site.
The URA also allotted larger parcels in the area so developers could build bigger buildings based on the needs of financial institutions, such as trading floors.
An upcoming development, Asia Square, is hoping to plug the gap for Grade A office space in town, especially those that have column-free floor plates.
When completed, the two towers will add 2 million sq ft of office space to the mix.
‘What clinched the deal for us was the availability of a huge parcel of land that could be developed into premium grade A+ office space, sitting in a prime location that is well-connected to the business hub,’ said project director Jeremy Choy.
The development’s parent company, Macquarie Global Property Advisors, bid more than $2 billion for the land.
The integrated development also houses a 280-room five-star hotel, and has space for retail and food and beverage, in addition to office space.
Mr Choy added that one of the critical deciding factors was the long-term plan for the area.
That the area was supported by the latest advances in infrastructure, like access to a district cooling system, also helped seal the deal.
Buildings in the area are served by common services tunnels which carry sewerage, water and telecommunication pipes typically buried under the road. These tunnels can be accessed without digging up the roads.
This is the first such network in South-east Asia.
The district also has its own cooling system, which makes for better economies of scale. In the pipeline is a centralised pneumatic refuse collection system that sucks all rubbish to one central location and saves the garbage truck from having to go door to door.
Even the greening of the area has been planned to a T. Planting plans include green, pink and yellow themes for different districts within the area. Coupled with this is a night lighting plan, which was originally designed for the Civic District but has since been extended to the CBD and Marina Bay.
Under the plan, buildings are required to be lit as part of the sale conditions, while the Government gives a cash grant to existing buildings around the bay to light up.
‘We can put good hardware in place, but that doesn’t mean that the place will be successful. The right software is important to make it come alive,’ acknowledged Mr Fassam.
So it went and wooed private investors by going to overseas fairs, some of which have translated into successful land sales.
Good long-term prospects
Likewise, the clincher for Marina Bay Sands has been the long-term prospects of the area and the growing exhibition and convention business, said its chief executive officer and president Thomas Arasi.
‘The company’s investment and commitment were based on the fact that Singapore has breadth and depth across all the major travel segments to make the integrated resort thrive. Few global gateways offer everything that Singapore can offer tourists from around the region and around the world,’ he said.
Over the years, the plan has been constantly refined – from when it first appeared as a concept plan in the 1970s, to 2000, when the first site was launched – which has since been developed into what is now One Raffles Quay.
At one point, Marina South was thrown up as a possible site for the Singapore Management University campus, but it was decided that the university should go back to where the schools traditionally were, in the Bras Basah area.
Marina South’s interim tenants have since all gone, and infrastructure works are taking place there now. That land had been sold on short-term leases of between 21 and 24 years after it was reclaimed. Those leases expired last year.
But the fervent development of Marina Bay as the new financial hub has also thrown up some concerns, among which is whether there will be an oversupply of office space, especially since the economy has been hit so badly.
The authorities do not seem worried.
Some office leasing agents have reportedly seen an increased number of leasing enquiries over the last quarter as rental rates became more competitive, and lease packages offered by landlords became more attractive, said URA.
And this could spur demand and help absorb some of the office space that is coming on stream.
Some developers have also continued to delay the completion of their projects, while a few others are considering converting existing office buildings in the CBD to residential use.
This would help regulate the supply of office space, they reason.
There has been quite a bit of international interest, said Mr Fassam, with investors asking when the next parcel will be released for sale.
But the authorities are in no hurry to open the floodgates and let buildings sprout.
After all, it has taken three decades for Marina Bay’s transformation, and it could well take another three decades to fill up the rest of the land.
Source : Sunday Times – 15 Nov 2009
Wednesday, July 22, 2009
Tuesday, June 23, 2009
Saturday, May 30, 2009
Eunos motor workshops to move out
Posted by luxuryasiahome on May 31, 2009
It is the end of the road after 30 years for 169 motor workshop operators in Eunos.
From next month , they will begin relocating from the Eunos Industrial Estate to AutoBay@Kaki Bukit in Kaki Bukit Avenue 6.
The move will be completed by end-September.
Another 52 workshop operators will stay put in Eunos until further notice from the landlord, the Housing and Development Board.
The new site does not have space for all and those moving in were selected via balloting.
But now that it is time to move out, 10 out of 11 tenants that The Sunday Times spoke to said they are not looking forward to it.
They cited expenses incurred in renovating the new premises, and worries over whether customers would seek them out in Kaki Bukit.
‘Even though the new rent is about the same as what we pay now, it’s hard to generate the same income in Kaki Bukit,’ said Mr Phng Hock Lee, 43, director of a spray painting shop.
Noting that the new place is not served by buses and trains, he estimated his business will suffer a 70 per cent drop.
Mr Ken Ho, 39, co-owner of a car audio workshop, agreed that the ‘new site is remote’ and expected takings to dip by half.
He owns two shops in Eunos but managed to get only one lot in Kaki Bukit. He will retain a presence in Eunos.
Tenants were invited to view the new site two months ago. It was then that they realised the designated office, on the second floor, took up a third of the floor area.
‘The office design is nice but all we need is a table and a phone which can be placed on the ground floor,’ said Mr Phng.
But Ms Patricia Kan, owner of a motor workshop, is excited that she can convert the new unit into a boutique workshop.
‘It’s a known fact that workshops are dirty and messy with no image to speak of. I hope to change that by presenting a new and nice-looking interior,’ she said.
The HDB, which held several dialogue sessions with the tenants in March and April, is planning to implement measures to cushion the impact of starting business in a new area.
These include waiving parking charges, arranging for shuttle-bus services between AutoBay and Eunos MRT station, and creating an air-conditioned waiting area for customers.
It is also waiving rental for six months.
The relocation is in line with the HDB’s move to reduce pollution within the Marina Barrage water catchment area.
Under the Urban Redevelopment Authority’s gazetted Master Plan 2008, the majority of the Eunos Industrial Estate will be zoned for business or residential use.
The HDB said there are no immediate plans to redevelop the estate. The vacated units will be rented out for light and clean trade instead, said a spokesman.
The remaining 52 tenants will move to another motor workshop complex in Kaki Bukit by 2012.
Source : Sunday Times – 31 May 2009
It is the end of the road after 30 years for 169 motor workshop operators in Eunos.
From next month , they will begin relocating from the Eunos Industrial Estate to AutoBay@Kaki Bukit in Kaki Bukit Avenue 6.
The move will be completed by end-September.
Another 52 workshop operators will stay put in Eunos until further notice from the landlord, the Housing and Development Board.
The new site does not have space for all and those moving in were selected via balloting.
But now that it is time to move out, 10 out of 11 tenants that The Sunday Times spoke to said they are not looking forward to it.
They cited expenses incurred in renovating the new premises, and worries over whether customers would seek them out in Kaki Bukit.
‘Even though the new rent is about the same as what we pay now, it’s hard to generate the same income in Kaki Bukit,’ said Mr Phng Hock Lee, 43, director of a spray painting shop.
Noting that the new place is not served by buses and trains, he estimated his business will suffer a 70 per cent drop.
Mr Ken Ho, 39, co-owner of a car audio workshop, agreed that the ‘new site is remote’ and expected takings to dip by half.
He owns two shops in Eunos but managed to get only one lot in Kaki Bukit. He will retain a presence in Eunos.
Tenants were invited to view the new site two months ago. It was then that they realised the designated office, on the second floor, took up a third of the floor area.
‘The office design is nice but all we need is a table and a phone which can be placed on the ground floor,’ said Mr Phng.
But Ms Patricia Kan, owner of a motor workshop, is excited that she can convert the new unit into a boutique workshop.
‘It’s a known fact that workshops are dirty and messy with no image to speak of. I hope to change that by presenting a new and nice-looking interior,’ she said.
The HDB, which held several dialogue sessions with the tenants in March and April, is planning to implement measures to cushion the impact of starting business in a new area.
These include waiving parking charges, arranging for shuttle-bus services between AutoBay and Eunos MRT station, and creating an air-conditioned waiting area for customers.
It is also waiving rental for six months.
The relocation is in line with the HDB’s move to reduce pollution within the Marina Barrage water catchment area.
Under the Urban Redevelopment Authority’s gazetted Master Plan 2008, the majority of the Eunos Industrial Estate will be zoned for business or residential use.
The HDB said there are no immediate plans to redevelop the estate. The vacated units will be rented out for light and clean trade instead, said a spokesman.
The remaining 52 tenants will move to another motor workshop complex in Kaki Bukit by 2012.
Source : Sunday Times – 31 May 2009
For extra value, focus on yield
Posted by luxuryasiahome on May 31, 2009
As a value investor, I am naturally attracted to investments that produce decent yields. This is because these investments tend to be more stable and less likely to give one a heart attack.
Other more gung-ho investors may prefer investing purely for capital gains, even if they are to get little or no yield.
My interest was therefore piqued when The Straits Trading Company last month offered for sale 10 units of its Gallop Gables condominium at Farrer Road by dangling a big carrot in the form of a guaranteed rental yield of 7 per cent for two years.
For those who are unfamiliar with the term, yield is the recurring annual income you get divided by the amount you paid for an investment. In properties, yield is derived from rental income. In stocks and shares, it is based on dividends that companies pay.
With savings in banks drawing a paltry annual interest of half a per cent or less these days, Straits Trading’s offer was understandably snapped up by eager buyers.
Seasoned property investors will tell you that it’s rare to get rental yields as high as 7 per cent, not unless you convert your property illegally into a workers’ dormitory. For residential properties, a yield of 2.5 per cent to 4 per cent is the norm.
As an investment class, real estate generally provides a lower yield compared to investing in corporate bonds and equities. This is an acceptable trade-off as the risks of investing in physical properties are lower than those for stocks and shares.
The focus on yield, however, is only half the picture.
Another pertinent question an investor should ask is whether the current yield of a property is real or sustainable.
According to the Urban Redevelopment Authority, rents for private homes in the first quarter fell by 8.5 per cent. They had dropped by 5.3 per cent in the fourth quarter of last year.
In a prolonged economic downturn such as the one we are probably experiencing, there is further room for rents to fall. This is notwithstanding the recent revival in the residential property market.
On the demand side, numerous companies have slashed or are reducing head counts. Some have stopped operations altogether while many more have cut the pay of their staff. There is less discretionary income all around.
On the supply side, vacancy rates are likely to rise as more new homes are completed while some older developments that were earmarked for demolition have been put back into the rental market as their redevelopment plans get frozen.
Rising capital prices combined with falling rents spell bad news for yields, something property investors should be mindful of.
Equity investors tend to be more savvy when it comes to matters of investment yields and their sustainability.
Which is why the stock market today is littered with numerous instances of shares that seemed to be going for a song when measured against their historical yield. Stock investors are not buying these high yielding stocks because they suspect they will not repeat the high dividend payouts of the previous year.
To be sure, there are people who see real estate investing purely as a capital gain game. In the bull run from 2005 to 2007, many home owners were content to leave their units unoccupied while waiting for the right opportunity to resell them for a big profit.
Such windfalls are harder to come by in the current climate and a prudent investor cannot afford to look through the prism of 2007 and hope for a repeat of these fabulous gains any time soon.
For investors who acquire properties with the help of a bank loan, rental yield takes on added significance.
Mortgage rates currently vary from as low as 1.5 per cent to 3.75 per cent or more. As an investment, income from renting out a property should preferably be able to cover the monthly bank interest charges plus a portion of the principal repayment.
For those lucky enough to obtain a low rate such as Standard Chartered Bank’s 1.5 per cent promotional offer for the first year, the bar for rental income is low.
But for those who are locked in to significantly higher rates, their rental income should at least match the interest they are paying for their mortgages if they don’t want to end up working for the bank for free.
Don’t forget, mortgage rates tend to rise over time as initial teaser rates give way to prevailing ones. One way for a borrower to maintain a low mortgage rate is through the regular refinancing of his home loan. But this assumes that the current low interest rate environment will remain benign.
Refinancing may not be feasible if the property’s valuation has fallen sharply or if the refinancing bank decides to offer a lower loan quantum.
Unlike stocks and shares, yields on property investment are also more easily manipulated. A crafty seller can sometimes entice a buyer to overpay for a property by promising an abnormally high rental yield. To achieve this, the seller will sell his property and execute a leaseback agreement with the buyer.
In such a deal, the seller will guarantee the buyer for a limited period – typically not exceeding two years – a monthly rental income that will meet the promised yield.
The seller then sub-leases out the unit to a genuine tenant at the prevailing market rate. If the rent is below the guaranteed amount – as is likely to be the case for an overvalued property – the seller will top up the rental shortfall. But he does not lose out as he is able to count on the extra profit he had made earlier from selling his property at a higher price. The buyer ends up worse off even though he gets a higher monthly income rental for two years.
An example of how this can be done is illustrated in the accompanying table.
Rental guarantees are not illegal and, in fact, are the de rigueur practice of some developers that simply refuse to lower their selling price of unsold, completed projects during a downturn for tactical reasons.
They are also not necessarily detrimental to buyers.
Getting an attractive rental guarantee in today’s market will appeal to investors who believe that home prices will recover by 2011 or 2012, as they will enjoy higher-than-usual returns in the next two years while awaiting the recovery to take place.
In the case of the Gallop Gables apartments, the buyers probably got a good deal.
Apart from getting guaranteed rental yield of 7 per cent for two years, these purchases were done, on average, at prices about 23 per cent below what Straits Trading had asked for last July.
The developer has since raised the price of the remaining few units to $1,400 per square foot (psf) from the $1,188 psf average it had sold at in the past six weeks.
But the cheapest unit still went for a tad above $3 million.
If only I had a few million dollars to spare.
Source : Sunday Times – 31 May 2009
As a value investor, I am naturally attracted to investments that produce decent yields. This is because these investments tend to be more stable and less likely to give one a heart attack.
Other more gung-ho investors may prefer investing purely for capital gains, even if they are to get little or no yield.
My interest was therefore piqued when The Straits Trading Company last month offered for sale 10 units of its Gallop Gables condominium at Farrer Road by dangling a big carrot in the form of a guaranteed rental yield of 7 per cent for two years.
For those who are unfamiliar with the term, yield is the recurring annual income you get divided by the amount you paid for an investment. In properties, yield is derived from rental income. In stocks and shares, it is based on dividends that companies pay.
With savings in banks drawing a paltry annual interest of half a per cent or less these days, Straits Trading’s offer was understandably snapped up by eager buyers.
Seasoned property investors will tell you that it’s rare to get rental yields as high as 7 per cent, not unless you convert your property illegally into a workers’ dormitory. For residential properties, a yield of 2.5 per cent to 4 per cent is the norm.
As an investment class, real estate generally provides a lower yield compared to investing in corporate bonds and equities. This is an acceptable trade-off as the risks of investing in physical properties are lower than those for stocks and shares.
The focus on yield, however, is only half the picture.
Another pertinent question an investor should ask is whether the current yield of a property is real or sustainable.
According to the Urban Redevelopment Authority, rents for private homes in the first quarter fell by 8.5 per cent. They had dropped by 5.3 per cent in the fourth quarter of last year.
In a prolonged economic downturn such as the one we are probably experiencing, there is further room for rents to fall. This is notwithstanding the recent revival in the residential property market.
On the demand side, numerous companies have slashed or are reducing head counts. Some have stopped operations altogether while many more have cut the pay of their staff. There is less discretionary income all around.
On the supply side, vacancy rates are likely to rise as more new homes are completed while some older developments that were earmarked for demolition have been put back into the rental market as their redevelopment plans get frozen.
Rising capital prices combined with falling rents spell bad news for yields, something property investors should be mindful of.
Equity investors tend to be more savvy when it comes to matters of investment yields and their sustainability.
Which is why the stock market today is littered with numerous instances of shares that seemed to be going for a song when measured against their historical yield. Stock investors are not buying these high yielding stocks because they suspect they will not repeat the high dividend payouts of the previous year.
To be sure, there are people who see real estate investing purely as a capital gain game. In the bull run from 2005 to 2007, many home owners were content to leave their units unoccupied while waiting for the right opportunity to resell them for a big profit.
Such windfalls are harder to come by in the current climate and a prudent investor cannot afford to look through the prism of 2007 and hope for a repeat of these fabulous gains any time soon.
For investors who acquire properties with the help of a bank loan, rental yield takes on added significance.
Mortgage rates currently vary from as low as 1.5 per cent to 3.75 per cent or more. As an investment, income from renting out a property should preferably be able to cover the monthly bank interest charges plus a portion of the principal repayment.
For those lucky enough to obtain a low rate such as Standard Chartered Bank’s 1.5 per cent promotional offer for the first year, the bar for rental income is low.
But for those who are locked in to significantly higher rates, their rental income should at least match the interest they are paying for their mortgages if they don’t want to end up working for the bank for free.
Don’t forget, mortgage rates tend to rise over time as initial teaser rates give way to prevailing ones. One way for a borrower to maintain a low mortgage rate is through the regular refinancing of his home loan. But this assumes that the current low interest rate environment will remain benign.
Refinancing may not be feasible if the property’s valuation has fallen sharply or if the refinancing bank decides to offer a lower loan quantum.
Unlike stocks and shares, yields on property investment are also more easily manipulated. A crafty seller can sometimes entice a buyer to overpay for a property by promising an abnormally high rental yield. To achieve this, the seller will sell his property and execute a leaseback agreement with the buyer.
In such a deal, the seller will guarantee the buyer for a limited period – typically not exceeding two years – a monthly rental income that will meet the promised yield.
The seller then sub-leases out the unit to a genuine tenant at the prevailing market rate. If the rent is below the guaranteed amount – as is likely to be the case for an overvalued property – the seller will top up the rental shortfall. But he does not lose out as he is able to count on the extra profit he had made earlier from selling his property at a higher price. The buyer ends up worse off even though he gets a higher monthly income rental for two years.
An example of how this can be done is illustrated in the accompanying table.
Rental guarantees are not illegal and, in fact, are the de rigueur practice of some developers that simply refuse to lower their selling price of unsold, completed projects during a downturn for tactical reasons.
They are also not necessarily detrimental to buyers.
Getting an attractive rental guarantee in today’s market will appeal to investors who believe that home prices will recover by 2011 or 2012, as they will enjoy higher-than-usual returns in the next two years while awaiting the recovery to take place.
In the case of the Gallop Gables apartments, the buyers probably got a good deal.
Apart from getting guaranteed rental yield of 7 per cent for two years, these purchases were done, on average, at prices about 23 per cent below what Straits Trading had asked for last July.
The developer has since raised the price of the remaining few units to $1,400 per square foot (psf) from the $1,188 psf average it had sold at in the past six weeks.
But the cheapest unit still went for a tad above $3 million.
If only I had a few million dollars to spare.
Source : Sunday Times – 31 May 2009
Friday, May 15, 2009
Interview: Singapore wants to showcase achievements at World Expo Shanghai 2010
SINGAPORE, May 14 (Xinhua) -- Through World Expo Shanghai 2010, Singapore will showcase the city state's achievements in sustainable development, its continuous drive to reinvent itself, and lesser known aspects beyond its economic success, says a Singapore official.
Leong See Kay, director of the Singapore Tourism Board's World Expo, said the key objectives of the country's participation in the Shanghai expo are to highlight the city state's expertise in offering a high-quality and integrated live-work-play environment within a compact area.
Singapore also wants to showcase its achievements in urban planning, water technology and environmental services, and profile its work in the Tianjin Eco-city and the Summer Youth Olympic Games, she said.
She added during an interview with Xinhua that the country intends to promote closer people-to-people relations between China and Singapore.
Leong said the Singapore Pavilion, with a theme of Urban Symphony emphasizing the city state's harmony and progress, showcases the country's transformation into a model global city that combines sustainability and quality urban living.
"The theme Urban Symphony was inspired by the harmony of unique elements in Singapore: Progress and sustainability, urbanization and greenery, tradition and modernity, and the different races living in harmony together," Leong told Xinhua.
"The two environmental areas that Singapore has successfully made headway with in balancing progress with sustainability - water and garden - will form the soft layer of the pavilion as its two design elements," she said.
Urban Symphony, she continued, aims to articulate the city state's rhythm and beat through the pavilion's architecture of water fountain movements, window and sunshade fin layouts on the facade, interplay of sounds and visuals on different levels and flora on the roof garden.
As for the Singapore Pavilion, which will span 3,000 square meters and is designed to resemble a magic music box, Leong said only four columns of different shapes and sizes support its structural system and the floors above.
In line with the theme of sustainability, she said, recyclable materials such as aluminum and steel will be used for the facade and structural framework of the pavilion.
There will be a Garden in the Sky -- a roof-top garden of tropical flora specially landscaped to recapture the essence and the beauty of living in a garden-city, Leong said.
The design, she said, will incorporate facade slits, which allows a cool breeze in the heat of summer, and chilled water along the perimeter of the ground floor to reduce energy consumption for air-conditioning.
Construction of the Singapore Pavilion will start in early June and Singapore aims to attract 10 million visitors after its completion in April 2010.
Leong said World Expo Shanghai 2010 will see the largest-scale participation by Singapore yet in any expo, not only in terms of pavilion size, but also in terms of resources.
She attributed this partly to a testament to Singapore's confidence in China as a host country and the city state's intent to build on the existing good relations between the two countries.
Special Report: Expo 2010 Shanghai China
Leong See Kay, director of the Singapore Tourism Board's World Expo, said the key objectives of the country's participation in the Shanghai expo are to highlight the city state's expertise in offering a high-quality and integrated live-work-play environment within a compact area.
Singapore also wants to showcase its achievements in urban planning, water technology and environmental services, and profile its work in the Tianjin Eco-city and the Summer Youth Olympic Games, she said.
She added during an interview with Xinhua that the country intends to promote closer people-to-people relations between China and Singapore.
Leong said the Singapore Pavilion, with a theme of Urban Symphony emphasizing the city state's harmony and progress, showcases the country's transformation into a model global city that combines sustainability and quality urban living.
"The theme Urban Symphony was inspired by the harmony of unique elements in Singapore: Progress and sustainability, urbanization and greenery, tradition and modernity, and the different races living in harmony together," Leong told Xinhua.
"The two environmental areas that Singapore has successfully made headway with in balancing progress with sustainability - water and garden - will form the soft layer of the pavilion as its two design elements," she said.
Urban Symphony, she continued, aims to articulate the city state's rhythm and beat through the pavilion's architecture of water fountain movements, window and sunshade fin layouts on the facade, interplay of sounds and visuals on different levels and flora on the roof garden.
As for the Singapore Pavilion, which will span 3,000 square meters and is designed to resemble a magic music box, Leong said only four columns of different shapes and sizes support its structural system and the floors above.
In line with the theme of sustainability, she said, recyclable materials such as aluminum and steel will be used for the facade and structural framework of the pavilion.
There will be a Garden in the Sky -- a roof-top garden of tropical flora specially landscaped to recapture the essence and the beauty of living in a garden-city, Leong said.
The design, she said, will incorporate facade slits, which allows a cool breeze in the heat of summer, and chilled water along the perimeter of the ground floor to reduce energy consumption for air-conditioning.
Construction of the Singapore Pavilion will start in early June and Singapore aims to attract 10 million visitors after its completion in April 2010.
Leong said World Expo Shanghai 2010 will see the largest-scale participation by Singapore yet in any expo, not only in terms of pavilion size, but also in terms of resources.
She attributed this partly to a testament to Singapore's confidence in China as a host country and the city state's intent to build on the existing good relations between the two countries.
Special Report: Expo 2010 Shanghai China
Recession-hit Singapore pours billions into banking district
Singapore is pouring billions of dollars into a new financial district in a bid to create an Asian version of Wall Street with a dash of Las Vegas thrown in -- despite its worst ever recession.
The Marina Bay complex, situated on reclaimed land, exemplifies the city-state's ambitions to expand its financial sector and attract more tourists and investors.
The government and private firms have invested over 22 billion Singapore dollars (14.7 billion US) into the 360-hectare (889-acre) site, equivalent to about 400 football pitches, and officials say more money is coming in.
Marina Bay is the country's most ambitious urban transformation project, a dream that began in 1969 when groundwork started on the expansion of the old financial district in the British colonial quarter.
"We are beginning to see the fruits of the labour put in years ago," Mah Bow Tan, the minister for national development, told reporters recently after a tour of the site.
Among the key developments is the country's first casino complex bankrolled by US gaming tycoon Sheldon Adelson's Las Vegas Sands at a cost of over 7.3 billion dollars.
The Marina Bay Sands casino resort, scheduled to open at the end of the year, will feature 2,600 hotel rooms, shopping malls and convention and exhibition space.
The new district has also attracted Hong Kong's richest man, Li Ka-shing, whose Cheung Kong Holdings property outfit is one of three partners behind a commercial development called the Marina Bay Financial Centre (MBFC).
When fully completed in 2012, the MBFC will offer what it calls "prime Grade A" office space in three blocks with waterfront views plus 649 luxury apartments designed with a "work-live-play" theme.
By the middle of next year, a pedestrian route linking all the major attractions surrounding Marina Bay will be completed.
A few of the projects in the bay area are already up, including The Sail at Marina Bay, a 70-storey, twin-tower condo.
For leisure and entertainment, the Singapore Flyer, said to be the world's largest observation wheel, offers a panoramic view of the downtown area, while the Esplanade performing arts centre hosts global, Asian and local acts.
Those who want something closer to nature can head to Gardens by the Bay, three interconnected parks spread over 101 hectares (250 acres) that will open in phases in late 2011.
"Based on the plans they have put out, it is pretty exciting for Singapore," said Chua Yang Liang, head of regional research with property consultancy Jones Lang LaSalle.
The casino resort "brings more excitement and a balance to the work environment", he said.
The Singapore government has put in about 5.7 billion dollars' worth of infrastructure and expects to inject more than one billion dollars for similar works such as roads and bridges over the next 10-15 years.
There is no reason for Singapore to hold back on its plans for Marina Bay, said Mah.
"So while we need to be mindful of the current economic downturn and find ways and means to cope with it, we must also not forget that we have to prepare ourselves for when the economy recovers," he said.
"That's where I think Singapore can be well positioned and investors, when they look at this, when they look at what we are doing ... they know this is a place that is ready for them whenever the upturn comes."
Singapore has been in a recession since the third quarter of last year with the economy forecast to shrink by 5.0 to 9.0 percent in 2009, its worst downturn since gaining statehood in 1965, but boasts massive financial reserves.
The Marina Bay complex, situated on reclaimed land, exemplifies the city-state's ambitions to expand its financial sector and attract more tourists and investors.
The government and private firms have invested over 22 billion Singapore dollars (14.7 billion US) into the 360-hectare (889-acre) site, equivalent to about 400 football pitches, and officials say more money is coming in.
Marina Bay is the country's most ambitious urban transformation project, a dream that began in 1969 when groundwork started on the expansion of the old financial district in the British colonial quarter.
"We are beginning to see the fruits of the labour put in years ago," Mah Bow Tan, the minister for national development, told reporters recently after a tour of the site.
Among the key developments is the country's first casino complex bankrolled by US gaming tycoon Sheldon Adelson's Las Vegas Sands at a cost of over 7.3 billion dollars.
The Marina Bay Sands casino resort, scheduled to open at the end of the year, will feature 2,600 hotel rooms, shopping malls and convention and exhibition space.
The new district has also attracted Hong Kong's richest man, Li Ka-shing, whose Cheung Kong Holdings property outfit is one of three partners behind a commercial development called the Marina Bay Financial Centre (MBFC).
When fully completed in 2012, the MBFC will offer what it calls "prime Grade A" office space in three blocks with waterfront views plus 649 luxury apartments designed with a "work-live-play" theme.
By the middle of next year, a pedestrian route linking all the major attractions surrounding Marina Bay will be completed.
A few of the projects in the bay area are already up, including The Sail at Marina Bay, a 70-storey, twin-tower condo.
For leisure and entertainment, the Singapore Flyer, said to be the world's largest observation wheel, offers a panoramic view of the downtown area, while the Esplanade performing arts centre hosts global, Asian and local acts.
Those who want something closer to nature can head to Gardens by the Bay, three interconnected parks spread over 101 hectares (250 acres) that will open in phases in late 2011.
"Based on the plans they have put out, it is pretty exciting for Singapore," said Chua Yang Liang, head of regional research with property consultancy Jones Lang LaSalle.
The casino resort "brings more excitement and a balance to the work environment", he said.
The Singapore government has put in about 5.7 billion dollars' worth of infrastructure and expects to inject more than one billion dollars for similar works such as roads and bridges over the next 10-15 years.
There is no reason for Singapore to hold back on its plans for Marina Bay, said Mah.
"So while we need to be mindful of the current economic downturn and find ways and means to cope with it, we must also not forget that we have to prepare ourselves for when the economy recovers," he said.
"That's where I think Singapore can be well positioned and investors, when they look at this, when they look at what we are doing ... they know this is a place that is ready for them whenever the upturn comes."
Singapore has been in a recession since the third quarter of last year with the economy forecast to shrink by 5.0 to 9.0 percent in 2009, its worst downturn since gaining statehood in 1965, but boasts massive financial reserves.
Saturday, March 21, 2009
pay 8.8m sell 15.5m
The Sail generates top gains in subsale deals
By KALPANA RASHIWALA
TRANSACTIONS at The Sail @ Marina Bay last year topped the subsales deals that generated the highest gains, both in absolute as well as in percentage terms, a caveats analysis by Savills Singapore shows.
In absolute dollar terms, the biggest gain of $6.66 million was achieved for a unit above the 60th floor of the 99-year leasehold project. It was bought for $8.8 million or $1,508 psf in November 2005 from the project's developer, and sold in the subsale market for $15.5 million or $2,650 psf in August last year.
The top percentage gain of 178 per cent was generated by a 49th floor unit at The Sail that was sold for $1.42 million or $2,400 psf in the subsale market in May last year. The seller had picked up the unit for $510,400 or $862 psf from the developer (a joint venture between City Developments and AIG) in December 2004.
Two other units at The Sail also yielded subsale profits of 176 per cent and 175 per cent; the sellers had bought their units from the developer.
In all, there were 74 instances of gains generated from subsale transactions at The Sail in 2008. Market watchers noted that this was because the project's launch in two phases in 2004 and 2005 was 'perfectly timed' before residential property prices shot up in 2006 onwards.
As for subsale deals that produced losses last year, the biggest loss in absolute quantum, $1.03 million, was suffered for a unit around the 20th floor at Scotts Square. It was sold in November last year for $3.7 million or $3,050 psf; the seller had bought it up in the primary market in August 2007 for nearly $4.8 million or $3,890 psf.
The largest percentage loss (36 per cent) was incurred by the owner of a 26th floor unit at Tribeca on Kim Seng Road who had paid the developer $885,800 or $1,553 psf in February 2007 and sold his unit at $570,000 or $999 psf in December last year.
Looking ahead, Savills Singapore director Steven Ming said: 'It's reasonable to expect that subsale losses may increase this year, unless macro and global economic problems are ironed out and financing eases,' he added.
Knight Frank executive director (residential) Peter Ow notes that what would usually make an investor cut losses in the subsale market is when it is time to pay up the developer. 'An investor exposed to a few properties he has bought on deferred payment scheme may want to cut losses on the first one or two to improve his cashflow, so that when it is time to pay up for the third one, he can afford it,' he added.
In the event that a buyer has difficulty getting a bank loan and footing the bill for a chunk of the purchase price to the developer when the project receives Temporary Occupation Permit (TOP), some developers may be prepared to repudiate the sale and purchase agreement and forfeit the 20 per cent initial payment collected from the buyer and proceed to resell the unit.
But other developers may sue the buyers and force them to complete the sale and purchase agreement at the contracted price. 'Most buyers wouldn't want to take the risk of defaulting because they don't know the position of the developer and risk being sued and even bankrupted,' Mr Ow said.
For projects completing in 2011/2012, most investors will tend to hold their units as there is a possibility of a property market recovery, he predicts. 'But for projects receiving TOP, say, this year, investors will have to weigh risks of whether they have the financial means to pay up. If not, it may be better to cut loss,' Mr Ow said.
Mr Ow estimates that most investors would be prepared to cut a loss of up to 20 per cent on their purchase price (assuming they have already paid an initial 20 per cent to the developer) since they will then not have to take a further hit.
However, if they subsell the property at, say, 70 per cent of their purchase price, they would have to fork out a further 10 per cent to the developer before the developer agrees to transfer the title to the new buyer.
This article was first published in The Business Times.
By KALPANA RASHIWALA
TRANSACTIONS at The Sail @ Marina Bay last year topped the subsales deals that generated the highest gains, both in absolute as well as in percentage terms, a caveats analysis by Savills Singapore shows.
In absolute dollar terms, the biggest gain of $6.66 million was achieved for a unit above the 60th floor of the 99-year leasehold project. It was bought for $8.8 million or $1,508 psf in November 2005 from the project's developer, and sold in the subsale market for $15.5 million or $2,650 psf in August last year.
The top percentage gain of 178 per cent was generated by a 49th floor unit at The Sail that was sold for $1.42 million or $2,400 psf in the subsale market in May last year. The seller had picked up the unit for $510,400 or $862 psf from the developer (a joint venture between City Developments and AIG) in December 2004.
Two other units at The Sail also yielded subsale profits of 176 per cent and 175 per cent; the sellers had bought their units from the developer.
In all, there were 74 instances of gains generated from subsale transactions at The Sail in 2008. Market watchers noted that this was because the project's launch in two phases in 2004 and 2005 was 'perfectly timed' before residential property prices shot up in 2006 onwards.
As for subsale deals that produced losses last year, the biggest loss in absolute quantum, $1.03 million, was suffered for a unit around the 20th floor at Scotts Square. It was sold in November last year for $3.7 million or $3,050 psf; the seller had bought it up in the primary market in August 2007 for nearly $4.8 million or $3,890 psf.
The largest percentage loss (36 per cent) was incurred by the owner of a 26th floor unit at Tribeca on Kim Seng Road who had paid the developer $885,800 or $1,553 psf in February 2007 and sold his unit at $570,000 or $999 psf in December last year.
Looking ahead, Savills Singapore director Steven Ming said: 'It's reasonable to expect that subsale losses may increase this year, unless macro and global economic problems are ironed out and financing eases,' he added.
Knight Frank executive director (residential) Peter Ow notes that what would usually make an investor cut losses in the subsale market is when it is time to pay up the developer. 'An investor exposed to a few properties he has bought on deferred payment scheme may want to cut losses on the first one or two to improve his cashflow, so that when it is time to pay up for the third one, he can afford it,' he added.
In the event that a buyer has difficulty getting a bank loan and footing the bill for a chunk of the purchase price to the developer when the project receives Temporary Occupation Permit (TOP), some developers may be prepared to repudiate the sale and purchase agreement and forfeit the 20 per cent initial payment collected from the buyer and proceed to resell the unit.
But other developers may sue the buyers and force them to complete the sale and purchase agreement at the contracted price. 'Most buyers wouldn't want to take the risk of defaulting because they don't know the position of the developer and risk being sued and even bankrupted,' Mr Ow said.
For projects completing in 2011/2012, most investors will tend to hold their units as there is a possibility of a property market recovery, he predicts. 'But for projects receiving TOP, say, this year, investors will have to weigh risks of whether they have the financial means to pay up. If not, it may be better to cut loss,' Mr Ow said.
Mr Ow estimates that most investors would be prepared to cut a loss of up to 20 per cent on their purchase price (assuming they have already paid an initial 20 per cent to the developer) since they will then not have to take a further hit.
However, if they subsell the property at, say, 70 per cent of their purchase price, they would have to fork out a further 10 per cent to the developer before the developer agrees to transfer the title to the new buyer.
This article was first published in The Business Times.
Tuesday, March 3, 2009
Keppel Land kiasu
Property developers get 'kiasu'
By Conrad Raj, TODAY | Posted: 03 March 2009 1115 hrs
Photos 1 of 1
Related News
• Developers need to launch properties to avoid holding costs
• Private home sales down in January but more units launched
• Developer of Alexis@Alexandra condos offering discounts of 28%
SINGAPORE: Some developers are getting so “kiasu” (afraid to lose out) that they are getting the original buyers of homes to indemnify them should a sub-purchaser fail to pay. However, the Controller of Housing has told at least one developer, Keppel Land, that this is wrong.
The issue was raised when the buyer of an apartment at Park Infinia at Wee Nam Road, just off Keng Lee Road, tried to sell the unit bought from KepLand.
The developer had wanted the original buyer to not only be liable for breaches by the sub-purchaser, but also to ensure that property tax and maintenance bills are paid.
Asked to sign such a form, the original buyer asked lawyers to look into its enforceability. The lawyers then wrote to the Housing Controller for advice.
In response to the law firm, the Controller of Housing said in a letter seen by TODAY: “We are of the view that requiring your clients to sign a Letter of Authority with the indemnity clause stated above is contrary to the intention of rule 16 of the Housing Developers Rules, which requires a developer to enter into a fresh S&P Agreement (Sale and Purchase) with the sub-purchasers on the same terms and obligations as the original purchasers. This will place the sub-purchasers in a direct contractual relationship with the developer and releases the original purchasers from their obligations under the original S&P Agreement.”
The Controller added: “We have therefore written to the developer to request that the indemnity clause be deleted from the Letter of Authority which your clients have been asked to sign and complete the sub-sale expeditiously.”
A KepLand spokesman said the matter had since been resolved between the company and the purchaser, and the offending clause taken out of the S&P agreement.
A lawyer-friend of the purchaser said: “The clause should never have been included in the first place. How can any purchaser keep tabs on the financial position of a sub-purchaser down the road?”
Sources said this was not first time that KepLand had asked original purchasers to sign the indemnity form. It also appears that other developers have asked their purchasers to sign similar forms or are keen to follow KepLand’s example.
“In the current climate where scores of purchasers are said to be defaulting on their mortgage payments, it’s not hard to see why developers have to resort to such measures to protect their own interests,” said a prominent developer.
Against a backdrop of rising business failures and unemployment, property industry observers think mortgage defaults could increase this year. As a result, banks have become stricter on their mortgage financing, especially for those buying second and third properties.
- TODAY/yb
By Conrad Raj, TODAY | Posted: 03 March 2009 1115 hrs
Photos 1 of 1
Related News
• Developers need to launch properties to avoid holding costs
• Private home sales down in January but more units launched
• Developer of Alexis@Alexandra condos offering discounts of 28%
SINGAPORE: Some developers are getting so “kiasu” (afraid to lose out) that they are getting the original buyers of homes to indemnify them should a sub-purchaser fail to pay. However, the Controller of Housing has told at least one developer, Keppel Land, that this is wrong.
The issue was raised when the buyer of an apartment at Park Infinia at Wee Nam Road, just off Keng Lee Road, tried to sell the unit bought from KepLand.
The developer had wanted the original buyer to not only be liable for breaches by the sub-purchaser, but also to ensure that property tax and maintenance bills are paid.
Asked to sign such a form, the original buyer asked lawyers to look into its enforceability. The lawyers then wrote to the Housing Controller for advice.
In response to the law firm, the Controller of Housing said in a letter seen by TODAY: “We are of the view that requiring your clients to sign a Letter of Authority with the indemnity clause stated above is contrary to the intention of rule 16 of the Housing Developers Rules, which requires a developer to enter into a fresh S&P Agreement (Sale and Purchase) with the sub-purchasers on the same terms and obligations as the original purchasers. This will place the sub-purchasers in a direct contractual relationship with the developer and releases the original purchasers from their obligations under the original S&P Agreement.”
The Controller added: “We have therefore written to the developer to request that the indemnity clause be deleted from the Letter of Authority which your clients have been asked to sign and complete the sub-sale expeditiously.”
A KepLand spokesman said the matter had since been resolved between the company and the purchaser, and the offending clause taken out of the S&P agreement.
A lawyer-friend of the purchaser said: “The clause should never have been included in the first place. How can any purchaser keep tabs on the financial position of a sub-purchaser down the road?”
Sources said this was not first time that KepLand had asked original purchasers to sign the indemnity form. It also appears that other developers have asked their purchasers to sign similar forms or are keen to follow KepLand’s example.
“In the current climate where scores of purchasers are said to be defaulting on their mortgage payments, it’s not hard to see why developers have to resort to such measures to protect their own interests,” said a prominent developer.
Against a backdrop of rising business failures and unemployment, property industry observers think mortgage defaults could increase this year. As a result, banks have become stricter on their mortgage financing, especially for those buying second and third properties.
- TODAY/yb
Friday, February 27, 2009
Counting the opportunity cost of a mistimed property purchase
Counting the opportunity cost of a mistimed property purchase
February 26, 2009 by admin
Filed under Daily Musings
By Jeremy Koh, Guest Columnist
I bought a two room unit in a centrally located condomnium in the mid 2007 at the peak of the property market which appears to be on a bull run.
Almost everyone was upbeat on the rosy future of the property sector. Prices were going up like crazy. A 5 room HDB flat at Marine Parade was sold for $730,000.
Like many others, I jumped into the bandwagon thinking that the price would continue to move up. I thought I could flip my purchase a few months later and make a killing.
Actually, the price did go up a little and I was offered a reasonable price for my unit, but being greedy, I declined and stay put in the vain hope that I can sell for a higher price later on.
It didn’t. The subprime crisis erupted in the states and the market stagnated. Then came bankruptcy of Lehman Brothers which trigger the financial crisis. The expats left Singapore in droves. The market dived.
I was stuck with my property which will TOP only in 2010. Rentals are expected to be lower then and I may have to top up with cash to finance the mortage.
More importantly, I have over $200K stuck when I could have used it to invest in another property now when the prices are dropping.
Last week, a mid-floor unit at The Sail was sold at $1,250 psf. My eyes were literally red with envy when the agent told me how she closed the sale. I will definitely give it a go if there is still spare cash in my pocket.
Yes, the property purchase I made was for a long-term investment. I didn’t borrow money to buy it and there is a possibility I may sell it for a profit 10 years down the road when the economy recover.
However, if I didn’t make the hasty decision then, I will surely have the means to buy a unit of The Sail at ridiculously low prices which will fetch a higher price later on.
Alas, I am having sleepless nights daily counting the cost of a mistimed property purchase. I wondered if Mr Lee and his daughter-in-law are able to sleep well at night too given the billions of losses our SWFs have incurred.
When I last checked, the shares of Citi Bank and Bank of America have dropped more than 75%:
Yes, I know our investments are for the “long-term” and are made from a “long-term” perspective and therefore it is okay for us to wait a few “long-terms” for the graph to pick up to where it first left off.
Still, I can’t help having nightmares when I think of it - BILLIONS of dollars gone in a flash !!! That will take generations to reaccumulate. How is the government going to count the “opportunity cost” ???
Saturday, August 2, 2008
HDB rents continued their steady rise
| Aug 3, 2008 |  | ||
| property HDB rents still well on the rise | |||
| Demand still there with expats on smaller housing allowances and those priced out of condo market | |||
| By Fiona Chan, PROPERTY CORRESPONDENT | |||
HDB rents continued their steady rise in the second quarter of this year, increasing across all flat types and most towns as renters sought cheaper alternatives to increasingly costly condos. Owners of four-room flats benefited the most, with average monthly rents climbing almost 10 per cent to $1,750, from $1,600 in the previous three months, according to the latest data from HDB. In terms of towns, Bukit Batok, Central, Serangoon and Hougang saw major rent rises across all flat types. Generally, HDB rents have been increasing because rents of private apartments 'have hit a level too high for many to afford', said Mr Chris Koh, director of real estate agency Dennis Wee Properties. 'Those who used to be renting a condo at $2,000 to $2,500 a month find they have very few options when they want to renew their lease because their landlords have increased rents to $3,000 to $3,500.'
Some new tenants are also S-pass holders with smaller budgets that can only fit HDB flats rather than condos, added Dr Tan Tee Khoon, head of KF Property Network, a subsidiary of Knight Frank. He also noted that the stock of HDB flats for rent remains fairly constant, unlike that of condos. Supply of HDB flats is also limited because of the conditions imposed on owners who want to lease out their flats. Between April and June, eight out of every 10 towns saw higher rents for four-room flats, with Jurong East experiencing jumps of up to 21 per cent. The priciest place to rent a four-room flat is now Bukit Merah, where the average monthly rent is $2,300. Close behind are flats in the Central area, Toa Payoh and Bishan, which command $2,000 or more. 'Bukit Merah has become popular with foreign nurses who work at Singapore General Hospital, and Jurong East is getting a lot of foreign students from Nanyang Technological University and foreign factory workers working in the west,' explained Mr Koh. He added that Toa Payoh seems to attract expatriates working in the city as well as foreign nurses from Thomson Medical Centre and Mt Alvernia Hospital. Landlords of other types of HDB flats are also seeing a tidy profit. Monthly rents of three-room and five-room flats went up by $100 on average to $1,500 and $1,900 respectively. For three-room flats, the biggest growth was in Hougang, where rents soared 40 per cent to $1,400 a month. They also saw sizeable increases of more than 10 per cent in Geylang, Bukit Batok, Ang Mo Kio, Serangoon and the Central area. For five-room flats, Bukit Timah, Jurong West and Hougang were especially in demand. But the most expensive five-room flats are still in Marine Parade and Central, where they go for $2,550 and $2,400 a month, respectively. Rentals for HDB flats are likely to hold steady or even rise for the rest of the year as they remain much more affordable than condos, predicted Mr Koh. KF's Dr Tan also believes HDB rents will rise a further 10 to 15 per cent in the next six months. 'As more new condos are completed next year and the year after, rents of condos will ease and then only will we see HDB rents easing off as tenants will have more choices,' Mr Koh said. Have your say on www.straitstimes.com | |||
Wednesday, July 2, 2008
HDB's challenge: low-cost housing, condo-like flats
By Fiona Chan, Property Reporter
AS THE population grows and becomes more diverse, the Housing Board will have to find creative ways to keep its flats affordable for low-income families but attractive for the better-off.
As it tackles this task, one concern is rising construction costs, said National Development Minister Mah Bow Tan yesterday.
He said costs are estimated to jump a further 20 per cent this year and they could start pushing up the prices of HDB flats. 'Construction costs have gone up significantly...HDB is trying to contain the cost as much as it can.'
BOARD WINS UN PUBLIC SERVICE AWARD
WHAT IT IS: An annual award for excellence in public service that has been given out by the United Nations since 2003. There were four winners each in three categories this year. HDB was the only Asia-Pacific winner in its category: improving transparency, accountability and responsiveness in the public service. The other two categories were improving the delivery of services and fostering participation in policy-making decisions through innovative mechanisms.
PAST AWARDS
Singapore has won the award in the past.
* Progress Package, various ministries, 2007
*
* Work Permit Online system, Ministry of Manpower, 2006
*
* Online Business Licensing Service, Ministry of Trade and Industry, 2005
*
* Polygon of Good Laws, Ministry of Law, 2002
*
* National Trust Council and the Trustmark programme, Infocomm Development Authority of Singapore, 2002
These higher costs will not directly affect the selling prices of flats, as the Board prices flats at a discount to market prices rather than based on cost, Mr Mah said.
But building costs will boost the market prices of flats, so 'there will be some feed through' to HDB prices.
'We cannot escape that. But the important thing is, as salaries go up and prices are fixed at a discount to the market, flats will continue to remain affordable,' added Mr Mah, who made a special visit to the HDB Hub in Toa Payoh yesterday to congratulate staff on winning a United Nations (UN) Public Service Award.
The HDB's 44-year-old Home Ownership Programme was honoured for improving transparency, accountability and responsiveness in the public service. HDB chairman James Koh Cher Siang and chief executive Tay Kim Poh will accept the award at a ceremony held at the UN headquarters in New York on June 23.
Mr Mah praised the agency for its success over the past 48 years in moving Singaporeans out of slums into clean and modern flats. In its first five years, HDB built 50,000 flats; now there are 900,000, housing more than 80 per cent of the population.
He also pointed out the new challenges the Board is facing, including the key issue of helping more low-income families buy a flat rather than rent one.
'Those with income of $1,000 to $1,500 a month, although they are eligible to rent a flat, I much rather they own a flat because from there they can build a base and own some assets,' he said.
The cheaper two-room flats the Government has been building over the past few years will be ready soon, with construction to be ramped up, he added.
For those who cannot afford to buy even the cheapest flats, HDB will make available 20 per cent more rental flats over the next three years, Mr Mah said.
On the other end of the spectrum, better-off Singaporeans should also get to enjoy the 'HDB experience'. To this end, condo-like flats are being built under the Design, Build & Sell Scheme in areas such as Boon Keng and Bishan.
HDB also launched a new Build-To-Order project at Marsiling yesterday. Straits Vista @ Marsiling is near Woodlands Regional Centre and is the first new public housing estate in Woodlands in recent years. It will offer 50 three- room and 332 four-room flats.
Applications can be made until June 23.
This article was first published in The Straits Times on Jun 11, 2008
AS THE population grows and becomes more diverse, the Housing Board will have to find creative ways to keep its flats affordable for low-income families but attractive for the better-off.
As it tackles this task, one concern is rising construction costs, said National Development Minister Mah Bow Tan yesterday.
He said costs are estimated to jump a further 20 per cent this year and they could start pushing up the prices of HDB flats. 'Construction costs have gone up significantly...HDB is trying to contain the cost as much as it can.'
BOARD WINS UN PUBLIC SERVICE AWARD
WHAT IT IS: An annual award for excellence in public service that has been given out by the United Nations since 2003. There were four winners each in three categories this year. HDB was the only Asia-Pacific winner in its category: improving transparency, accountability and responsiveness in the public service. The other two categories were improving the delivery of services and fostering participation in policy-making decisions through innovative mechanisms.
PAST AWARDS
Singapore has won the award in the past.
* Progress Package, various ministries, 2007
*
* Work Permit Online system, Ministry of Manpower, 2006
*
* Online Business Licensing Service, Ministry of Trade and Industry, 2005
*
* Polygon of Good Laws, Ministry of Law, 2002
*
* National Trust Council and the Trustmark programme, Infocomm Development Authority of Singapore, 2002
These higher costs will not directly affect the selling prices of flats, as the Board prices flats at a discount to market prices rather than based on cost, Mr Mah said.
But building costs will boost the market prices of flats, so 'there will be some feed through' to HDB prices.
'We cannot escape that. But the important thing is, as salaries go up and prices are fixed at a discount to the market, flats will continue to remain affordable,' added Mr Mah, who made a special visit to the HDB Hub in Toa Payoh yesterday to congratulate staff on winning a United Nations (UN) Public Service Award.
The HDB's 44-year-old Home Ownership Programme was honoured for improving transparency, accountability and responsiveness in the public service. HDB chairman James Koh Cher Siang and chief executive Tay Kim Poh will accept the award at a ceremony held at the UN headquarters in New York on June 23.
Mr Mah praised the agency for its success over the past 48 years in moving Singaporeans out of slums into clean and modern flats. In its first five years, HDB built 50,000 flats; now there are 900,000, housing more than 80 per cent of the population.
He also pointed out the new challenges the Board is facing, including the key issue of helping more low-income families buy a flat rather than rent one.
'Those with income of $1,000 to $1,500 a month, although they are eligible to rent a flat, I much rather they own a flat because from there they can build a base and own some assets,' he said.
The cheaper two-room flats the Government has been building over the past few years will be ready soon, with construction to be ramped up, he added.
For those who cannot afford to buy even the cheapest flats, HDB will make available 20 per cent more rental flats over the next three years, Mr Mah said.
On the other end of the spectrum, better-off Singaporeans should also get to enjoy the 'HDB experience'. To this end, condo-like flats are being built under the Design, Build & Sell Scheme in areas such as Boon Keng and Bishan.
HDB also launched a new Build-To-Order project at Marsiling yesterday. Straits Vista @ Marsiling is near Woodlands Regional Centre and is the first new public housing estate in Woodlands in recent years. It will offer 50 three- room and 332 four-room flats.
Applications can be made until June 23.
This article was first published in The Straits Times on Jun 11, 2008
HDB contributing to price spiral
| HDB contributing to price spiral | ||||
 | ||||
| I REFER to the article 'HDB pricing policy limits impact of rising costs' (BT, June 11). As a 60-year-old Singaporean, I empathise with the growing despair of young couples when it comes to such a basic aspiration as home ownership. Private property is mostly beyond their reach. Even for HDB flats, they are caught between waiting as long as six years for new flats or paying exorbitant prices for resale flats. In the 1970s, a graduate's starting pay was around $1,000 per month. Then, in HDB Marine Parade Estate, prices of 3-room, 4-room and 5-room new flats were $17,000, $20,000 and $35,000 respectively. By 1990, the average price of 5-room new flats was $70,000. Such prices then reflected a 'cost-based' pricing approach. Now, graduate starting pay is three times higher than in the 1970s, but prices of new similar HDB flats have gone up 10-30 times. These massive price hikes are largely due to the HDB switching over to a 'market-based' pricing approach, following the 1994 property bull run. In 2007, the HDB finally confirmed that 'the prices of new HDB flats are based on the market prices of resale HDB flats, and not their costs of construction'. In 2000, the total break-even cost for a 5-room new flat was an estimated $120,000. But, under the market- based pricing approach, the HDB first looks at the prevailing market price of, say, $260,000 of a 5-room resale flat. It will then pick a slightly lower figure of, say, $200,000 as the selling price for the 5-room new flat (despite its $120,000 break-even cost). HDB will then say the new flat buyer is getting a so-called 'market subsidy' of $60,000, arising from the difference between the resale flat market price and new flat selling price. There is thus no actual 'cash subsidy' given at all. This market-based pricing approach had resulted in new flat prices and resale flat prices chasing each other in an upward spiral, affecting buyers of both new and resale flats. It has also led to current prices of 4-room new flats varying so much from $200,000 (Sengkang) to $400,000 (Telok Blangah) and a whopping $590,000 (Boon Keng). HDB is supposed to be a low-cost public housing developer. Why then is it not passing on to flat buyers the economy-of-scale cost savings in its huge developments by pricing its new flats on a cost-based break-even basis? See Leong Kit This letter was first published in The Business Times on 20 June 2008.
|
Posted by lushhomeonline on July 2, 2008
WE refer to Mr See Leong Kit’s comments on the pricing of HDB flats in his letter ‘HDB contributing to price spiral’, (BT, June 20).
HDB adopts a market-based pricing approach so as to reflect the true subsidy that buyers are enjoying. Under this approach, HDB determines the market value of the flat, based on its location, the finishes and other attributes. Then, it sells the flat at a discount to the market value.
HDB buyers understand this, and appreciate that new HDB flats are priced lower than resale flats. Similarly, when they want to sell their flats in the open market, they are allowed to do so at the prevailing market value, not at their cost of purchase of the flat.
We also wish to highlight that under this approach, the current sharp escalation in construction costs does not directly affect the selling price of HDB flats.
Currently, a new 4-room flat can cost close to $300,000 to develop, taking into account land, building and other costs. This is significantly higher than the subsidised price of a 4-room flat sold by HDB at about $200,000-$260,000.
Kee Lay Cheng (Ms),
Deputy Director, Marketing & Projects for Director, Estate Administration & Property,
Housing & Development Board
Source : Business Times - 2 Jul 2008
Saturday, June 21, 2008
SECOND HALF OF 2008 Ministry of National Development
Press Releases
GOVERNMENT LAND SALES PROGRAMME FOR PRIVATE RESIDENTIAL, COMMERCIAL AND HOTEL DEVELOPMENTS FOR THE SECOND HALF OF 2008
1. The Ministry of National Development (MND) today announced:
| a. | The Government Land Sales (GLS) Programme for private residential, commercial and hotel developments for the second half of 2008; and |
| b. | The non-GLS supply of private residential, commercial and hotel space from various projects by Government agencies in the second half of 2008, which is in addition to the GLS supply. |
Opening Up of New Growth Areas
2. A highlight of the GLS Programme is the offer of 2 new sites which will help to transform the Jurong Lake District and Kallang Riverside into attractive destinations for work, live and play, in line with the recently unveiled draft Master Plan 2008.
3. A new white site at Jurong East Street 13 will help to kick-start the development of the commercial hub at Jurong Gateway. Another new site is a hotel site at Kallang Riverside, a new waterfront lifestyle precinct by the edge of the city.
4. In total, 13 new sites have been added to the GLS Programme for the second half of 2008. These 13 sites comprise 6 residential sites, 3 commercial sites, 3 hotel sites and 1 white site. 26 unsold sites from the first half 2008 GLS Programme and 1 unsold site from the second half 2007 GLS Programme1 will be carried over to the second half 2008 GLS Programme (see details in Appendix 1).
5. The GLS Programme for the second half of 2008 will therefore consist of 40 sites comprising 21 residential sites, 6 commercial sites, 11 hotel sites and 2 white sites. These sites can potentially yield about 7,960 private residential units, 400,000 sqm Gross Floor Area (GFA) of commercial space and 5,750 hotel rooms. The total supply has been assessed to be sufficient to meet the demand for various types of properties over the medium term.
6. The unsold hotel site at Race Course Road / Bukit Timah Road from the first half 2008 GLS Programme, will be removed2. The original intention was for the successful tenderer to build underground pedestrian links that will connect to the nearby Rapid Transit System (RTS) station in conjunction with the hotel development. However, as the site was not awarded, the links will now be built by LTA. URA will review when the site can be released through a future GLS Programme, taking into consideration LTA's schedule for the works.
Confirmed List for Second Half of 2008
7. A total of 8 sites will be sold through the confirmed list in the second half of 2008 to facilitate their early development to meet various planning objectives.
8. Out of the 8 confirmed sites, 6 are new sites and 2 are sites carried over from the reserve list in the first half of 2008. The 6 new sites are:
| a. | 3 commercial sites at North Bridge Road / Stamford Road, Mohamed Sultan Road and Mountbatten Road; |
| b. | 2 residential sites at Yio Chu Kang Road / Seletar Road and Sembawang Greenvale Phase 3; and |
| c. | 1 hotel site at Bukit Chermin Road. |
The 2 sites which are carried over are:
| a. | the Executive Condominium (EC) site at Punggol Field / Punggol Road; and |
| b. | the residential site at New Upper Changi Road / Tanah Merah Kechil Avenue. |
(See Appendix 2)
9. The 1.45-ha North Bridge Road / Stamford Road site comprises the existing Capitol Theatre, Capitol Building, Stamford House and Capitol Centre. Capitol Theatre, Capitol Building and Stamford House have been gazetted for conservation. The sale of the site will facilitate the restoration of the conserved buildings and add vibrancy to the area through the introduction of new entertainment, retail and hotel uses. The successful tenderer will have the flexibility to demolish Capitol Centre and erect new buildings on the site. A minimum quantum for hotel use will be stipulated for the site to meet the demand for hotel rooms. More details will be announced when the site is released for sale in December 2008.
10. The 2 commercial sites at Mohamed Sultan Road and Mountbatten Road will be tendered out on 15-year leases for the development of transitional office space. URA has successfully sold 5 transitional office sites since August 2007. These developments can be built quickly within a year and hence can meet the needs of businesses which require office space urgently.
11. The new residential site at Yio Chu Kang Road / Seletar Road will replace the smaller commercial & residential site at the same location which was in the reserve list of the GLS Programme for first half 2008. URA has received market feedback that a larger residential site with a small component of commercial space is more attractive than the original smaller commercial & residential site with a limited number of residential units. URA has included the surrounding vacant land to form a larger land parcel for residential use for sale under the GLS Programme for second half 2008. A minimum quantum for commercial use will be stipulated for the site to facilitate the development of shops and eating establishments, to serve the residents in the surrounding housing estates. More details will be announced when the site is released for sale in November 2008.
12. The 3-ha hotel site at Bukit Chermin Road, located next to Keppel Club, comprises four black and white bungalows set amidst a hilly terrain. The sale of this site for hotel development is timed to coincide with the completion of the Labrador Nature and Coastal Walk nearby in 2011. Together, the Bukit Chermin hotel development and the Labrador Nature and Coastal Walk will enhance the attractiveness of Singapore's Southern Ridges and Southern Waterfront as a premier leisure and recreation destination.
13. The sub-divided landed housing parcels at Sembawang Greenvale Phase 3, which will be sold by auction, will continue the momentum of development of the Sembawang Greenvale landed estate. URA has so far successfully sold 23 landed housing parcels in Sembawang Greenvale since October 2007. The sale of such sub-divided landed parcels will allow smaller developers and individual home-owners to participate in the Government Land Sales Programme.
14. The residential site at New Upper Changi Road / Tanah Merah Kechil Avenue and the Executive Condominium (EC) site at Punggol Field / Punggol Road are located near RTS stations. The sale of these sites will expedite the development of land around the RTS stations and help to increase the ridership catchment for the rail system. In addition, placing the EC site on the confirmed list will help to build up Punggol New Town and provide more affordable private housing options for home owners.
15. The confirmed list sites will yield about 1,120 private residential units, 50,000 sqm GFA of commercial space and 700 hotel rooms.
Reserve List for Second Half of 2008
16. A total of 32 sites will be placed on the reserve list for the second half of 2008. These sites will provide flexibility for the market to adjust the supply to meet demand. The 32 sites will comprise 24 sites carried over from the first half 2008 GLS Programme, the unsold site at Choa Chu Kang Road / Woodlands Road from the second half 2007 GLS Programme and another 7 new sites. These 7 new sites comprise:
| a. | 1 white site at Jurong East Street 13; |
| b. | 2 hotel sites at Kallang River and Short Street; and |
| c. | 4 residential sites at Serangoon Avenue 3, Yishun Avenue 7 / Canberra Drive, Hillview Avenue and Dakota Crescent. |
(See Appendix 2)
17. The white site at Jurong East Street 13 will help to kick-start the development of the commercial hub at Jurong Gateway and is in line with the broader vision to develop the Jurong Lake District into an attractive destination for business and leisure. To facilitate the development of new office hubs outside the Central Business District and to provide more choices of location for businesses, a minimum quantum for office use will be stipulated for the site. More details will be announced when the site is released for sale in November 2008.
18. The hotel site at Kallang River will set in motion URA's plans to transform Kallang Riverside into a new waterfront lifestyle precinct by the edge of the city. The hotel site at Kallang River will have a unique beachfront location and will be in close proximity to the city centre as well as the future Sports Hub.
19. The 4 new residential sites on the reserve list will provide more choices for private housing on different parts of the island. The Hillview Avenue site, which will be sold with a minimum quantum for commercial use, will also help to inject amenities, such as shops and eating establishments, to serve the residents in the area.
20. The 2 new hotel sites will add to other hotel sites on the reserve list, thus providing a wide variety of hotel accommodation to cater to a range of visitors and to meet the growing demand for hotel rooms.
21. The second half 2008 reserve list of the GLS Programme will have a total potential supply of about 6,840 private residential units, 350,000 sqm GFA of commercial space and 5,050 hotel rooms.
Other Government Supply to be Made Available in Second Half of 2008
22. Apart from the GLS Programme, the Government also makes available other supply of land and properties which provide additional residential, commercial and hotel space. MND works closely with other agencies to coordinate the supply of space from GLS and other sources made available by the Government.
23. The supply of private residential, commercial and hotel space by the Government outside of the GLS Programme in the second half of 2008 are as follows:
| a. | 143,000 sqm GFA of commercial space, including: | |
| i | Interim use of vacant State buildings and small land parcels for commercial uses (about 94,200 sqm GFA); | |
| | ||
| ii | retail space at the mixed-use development at Lavender Street by JTC (about 13,300 sqm GFA); | |
| | ||
| iii | retail space at the proposed University Town (about 7,500 sqm GFA); and | |
| | ||
| iv | Localised retail facilities in parks, MRT stations and industrial estates. | |
| b. | 240 hotel rooms and 20 private residential units. | |
24. The announcement of the planned supply to be made available by the Government outside of the GLS Programme will provide a more complete picture of the overall Government supply of space for the second half of 2008.
Supply in the pipeline expected to be completed in next few years
25. Apart from the potential supply from the GLS Programme and other Government sources in the second half of 2008, there is additional supply coming from projects in the pipeline which have been initiated earlier, both from the Government and private land sources. In order to give a more complete picture of the supply situation in the next few years, URA has provided in the following paragraphs, information on the various types of space from all sources of supply.
26. For the private housing sector, as at first quarter 2008, there were about 67,700 private residential units in the pipeline, comprising the supply from projects that were already under construction and those that had been granted planning approval but were not under construction yet. Of these, a total of about 56,500 new private residential units are expected to be completed between second quarter 2008 and 2011. These units come from awarded GLS sites, Government projects outside the GLS Programme and private land projects, including new projects from en-bloc sale sites. Of the 56,500 units, about 23,300 units will be in Core Central Region, 16,100 units in Rest of Central Region and 17,100 units in Outside Central Region.
27. For the office sector, as at first quarter 2008, there is a total supply of about 1.49 million sqm GFA of office space from various Government and private land sources in the pipeline. Of these, about 1.11 million sqm GFA of office space is expected to be completed between second quarter 2008 and 2011.
28. Apart from office space, there is a pipeline supply of about 435,000 sqm GFA of Business Park space, including supply from Changi Business Park and Alexandra Distripark, which is expected to be completed from second quarter 2008 to 2011. Space in business parks (BPs) can meet the needs of some companies, such as the requirements of small and medium enterprises (SMEs) and the backroom operations and data centres of financial institutions.
29. For the shop and hotel sectors, as at first quarter 2008, there is a total supply of about 578,000 sqm GFA of shop space and 11,200 hotel rooms in the pipeline, most of which are expected to be completed between second quarter 2008 and 2011.
30. A summary of the estimated pipeline supply of private residential units, office space, shop space and hotel rooms as at first quarter 2008 can be found in Appendix 3. The estimated pipeline supply is based on expected project completion dates provided to URA by developers on a quarterly basis. These completion dates will be updated when URA releases the second quarter Real Estate Statistics in end-July 2008.
| 1 | This is the residential site at Choa Chu Kang Road / Woodlands Road. The site was released for sale via the confirmed list on 13 December 2007 but was not awarded when the tender closed in April 2008 as the bids received were too low. |
| 2 | The site did not receive any bid when the tender closed on 21 May 2008. |
Issued by: Ministry of National Development
Date: 19 June 2008
Status of the GLS Programme for the First Half of 2008
1. The GLS Programme for the first half of 2008 comprised 11 sites on the confirmed list and 26 sites on the reserve list. To-date, 5 sites have been sold.
2. The 5 sites that were sold were from the confirmed list, namely the residential sites at West Coast Crescent, Yishun Avenue 1/Avenue 2, Lorong 2/3 Toa Payoh, Sembawang Greenvale Phase 2 and Choa Chu Kang Drive.
3. The tenders for the remaining 3 confirmed sites at Woodleigh Close, Balestier Road/Ah Hood Road and Tampines Avenue 1/Avenue 10 will close between end June 2008 and mid August 2008. The confirmed site at Ophir Road/Rochor Road will be launched for sale in later part of June 2008 as scheduled.
4. Two other confirmed list sites at Westwood Avenue1 and Race Course Road/Bukit Timah Road2 were not sold. None of the 26 sites in the reserve list have been triggered for tender. As such, excluding the 9 confirmed list sites which have been sold or where the tenders have not closed, 28 sites remain unsold in the GLS Programme for the first half of 2008.
5. Of the 28 remaining sites, 2 sites will be removed from the GLS Programme. One is the unsold hotel site at Race Course Road/Bukit Timah Road which LTA will require for its underground pedestrian links works. The commercial & residential site at Yio Chu Kang Road/Seletar Road will also be removed. This site has been re-parcelled and the revised site will be sold on the confirmed list of the second half of 2008 for residential use with a minimum commercial quantum.
6. The Westwood Avenue site, which was not awarded, will be placed on the reserve list for second half of 2008 to allow interested developers to trigger the site for sale. The residential site at New Upper Changi Road/Tanah Merah Kechil Avenue and the Executive Condominium site at Punggol Field/Punggol Road will be launched as confirmed sites in the second half of 2008. The remaining 23 sites will be carried over to the reserve list of second half of 2008.
7. Separately, the residential site at Choa Chu Kang Road/Woodlands Road, which was released for sale under the confirmed list of the 2H2007 GLS Programme in December 2007, was not sold when the tender closed in April 2008 as the bids received for the site were too low. The site will be placed on the reserve list for second half of 2008 to allow interested developers to trigger the site for sale.
| 1 | This residential site was released for sale via the confirmed list on 11 January 2008 but was not awarded when the tender closed on 11 March 2008 as the bids received were too low. |
| 2 | The site did not receive any bid when the tender closed on 21 May 2008. |
GOVERNMENT LAND SALES PROGRAMME FOR SECOND HALF OF 2008
| CONFIRMED LIST | ||||||||
| S/N | Location | Site Area (ha) | Gross Plot Ratio | Estimated No of Housing Units (1) | Estimated No. of Hotel Rooms (1) | Estimated Commercial Space (sqm)(1) | Estimated Launch Date | Sales Agent |
| Residential Sites | ||||||||
| 1 | New Upper Changi Road / Tanah Merah Kechil Avenue (PDF, 124 Kb) | 0.99 | 2.8 | 250 | 0 | 0 | Jul 08 | URA |
| 2 | Punggol Field /Punggol Road (EC) (PDF, 86 Kb) | 2.27 | 3.0 | 620 | 0 | 0 | Sep 08 | HDB |
| 3 | Sembawang Greenvale Phase 3 (2) (PDF , 61 Kb) | 0.59 | Landed | 27 | 0 | 0 | Oct 08 | URA |
| 4 | Yio Chu Kang Road / Seletar Road (2) (PDF, 136 Kb) | 2.1 | 1.4 | 225 | 0 | 4,500 | Nov 08 | URA |
| Commercial Sites | ||||||||
| 5 | Mohamed Sultan Road (2) (PDF, 95 Kb) | 0.77 | 1.2 | 0 | 0 | 9,240 | Aug 08 | URA |
| 6 | Mountbatten Road (2) (PDF, 91 Kb) | 1.21 | 1.0 | 0 | 0 | 12,100 | Sep 08 | URA |
| 7 | North Bridge Road / Stamford Road (2) (PDF, 104 Kb) | 1.45 | 3.5 | 0 | 600 | 20,750 | Dec 08 | URA |
| Hotel Sites | ||||||||
| 8 | Bukit Chermin Road (2) (PDF, 168 Kb) | 2.99 | 0.4 | 0 | 100 | 4,780 | Nov 08 | URA |
| | Sub-Total for Confirmed List | | | 1,122 | 700 | 51,370 | ||
| RESERVE LIST | ||||||||
| S/N | Location | Site Area (ha) | Gross Plot Ratio | Estimated No of Housing Units (1) | Estimated No. of Hotel Rooms (1) | Estimated Commercial Space (sqm)(1) | Estimated Available Date (4) | Sales Agent |
| Residential Sites | ||||||||
| 1 | Tampines Road (PDF, 104 Kb) | 0.27 | 1.4/Landed | 35 | 0 | 0 | Already available | HDB |
| 2 | Jalan Jurong Kechil (PDF, 122 Kb) | 1.02 | 1.4 | 240 | 0 | 0 | URA | |
| 3 | Yishun Avenue 11 (EC) (PDF, 61 Kb) | 1.48 | 2.8 | 375 | 0 | 0 | HDB | |
| 4 | Upper Changi Road North / Flora Drive (PDF, 65 Kb) | 3.07 | 1.4 | 390 | 0 | 0 | URA | |
| 5 | Jurong West Street 42 (EC) (PDF, 84 Kb) | 1.70 | 3.0 | 465 | 0 | 0 | HDB | |
| 6 | Sengkang East Avenue / Buangkok Drive (EC) (PDF, 84 Kb) | 1.70 | 3.0 | 465 | 0 | 0 | HDB | |
| 7 | Upper Thomson Road (PDF, 68 Kb) | 2.08 | 2.1 | 400 | 0 | 0 | URA | |
| 8 | Chestnut Avenue (PDF, 82 Kb) | 2.27 | 2.1 | 435 | 0 | 0 | HDB | |
| 9 | Bishan Street 14 (PDF, 104 Kb) | 1.20 | 4.9 | 535 | 0 | 0 | HDB | |
| 10 | Westwood Avenue (PDF, 119 Kb) | 1.40 | Landed | 50 | 0 | 0 | HDB | |
| 11 | Choa Chu Kang Road / Woodlands Road (above Bukit Panjang LRT Depot) (PDF, 143 Kb) | 1.56 | 3.0 | 200 | 0 | 0 | URA | |
| 12 | Sengkang West Avenue / Fernvale Link (PDF, 71 Kb) | 1.70 | 3.0 | 465 | 0 | 0 | Jun 08 | HDB |
| 13 | Sembawang Road /Canberra Drive (PDF, 71Kb) | 2.28 | 1.4 | 290 | 0 | 0 | Jun 08 | HDB |
| 14 | Yishun Avenue 7 /Canberra Drive (2) (PDF, 82 Kb) | 2.65 | 2.5 | 600 | 0 | 0 | Aug 08 | HDB |
| 15 | Serangoon Avenue 3 (2) (PDF, 89 Kb) | 1.45 | 2.8 | 370 | 0 | 0 | Aug 08 | URA |
| 16 | Hillview Avenue (2) (PDF, 77 Kb) | 1.50 | 2.8 | 325 | 0 | 6,000 | Oct 08 | URA |
| 17 | Dakota Crescent (2) (PDF, 106 Kb) | 1.80 | 3.5 | 575 | 0 | 0 | Nov 08 | URA |
| Commercial Sites | ||||||||
| 18 | Punggol Point (PDF, 48 Kb) | 1.10 | - | 0 | 0 | 3,000 | Already available | URA |
| 19 | Tampines Grande /Tampines Concourse (PDF, 65 Kb) | 0.50 | 4.2 | 0 | 0 | 21,000 | HDB | |
| 20 | North Buona Vista Drive (PDF, 77 Kb) | 1.94 | 6.2 | 0 | 0 | 119,500 | JTC | |
| White Sites(3) | ||||||||
| 21 | Outram Road /Eu Tong Sen Street (PDF, 118 Kb) | 2.56 | 5.6 | 240 | 575 | 93,190 | Already avaliable | URA |
| 22 | Jurong East Street 13 (2)(5) (PDF, 80 Kb) | 2.17 | 4.9 | 385 | 0 | 63,840 | Nov 08 | URA |
| Hotel Sites | ||||||||
| 23 | New Bridge Road (PDF, 129 Kb) | 0.45 | 3.5 | 0 | 385 | 2,360 | Already available | URA |
| 24 | Victoria Street / Jalan Sultan (PDF, 136 Kb) | 0.68 | 4.5 | 0 | 745 | 4,590 | ||
| 25 | Kallang Road / Jellicoe Road (PDF, 131 Kb) | 0.42 | 4.5 | 0 | 455 | 2,840 | ||
| 26 | Jalan Bukit Merah / Alexandra Road (PDF, 88 Kb) | 0.79 | 2.8 | 0 | 540 | 3,320 | ||
| 27 | Jalan Besar / Sturdee Road (PDF, 130 Kb) | 0.61 | 3.0 | 0 | 445 | 2,750 | ||
| 28 | Bernam Street / Tanjong Pagar Road (PDF, 82 Kb) | 0.45 | 5.88 | 0 | 450 | 3,970 | ||
| 29 | Gopeng Street /Peck Seah Street (PDF, 88 Kb) | 0.23 | 8.4 | 0 | 330 | 2,900 | ||
| 30 | Clemenceau Avenue / Havelock Road (PDF, 112 Kb) | 0.55 | 2.8 | 0 | 260 | 2,310 | ||
| 31 | Short Street (2) (PDF, 163 Kb) | 0.12 | 3.5 | 0 | 100 | 630 | Aug 08 | |
| 32 | Kallang River (2) (PDF, 112 Kb) | 1.59 | 2.8 | 0 | 765 | 17,810 | Dec 08 | |
| Sub-Total For Reserve List | | 6,840 | 5,050 | 350,010 | | | ||
| Grand Total | - | - | 7,962 | 5,750 | 401,380 | - | - | |
| (1) | The actual number of housing units, hotel rooms and commercial space could be different from that estimated depending on the actual plans of the developers in terms of mix of uses and the size of the housing units and hotel rooms. |
| (2) | New sites introduced in 2H2008. |
| (3) | In general, white sites can be developed for commercial, residential or hotel developments, or a mix of such uses. The use quantum in this table is an estimate based on probable sales conditions and typical mix of similar developments in the same locality. |
| (4) | Refers to the estimated date the detailed conditions of sale will be available and applications can be submitted. |
| (5) | The parameters and use quantum are subject to further detailed studies. |
PRIVATE RESIDENTIAL UNITS IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE SECOND QUARTER OF 2008
| Period | Total (units) |
| 2Q2008 - 4Q2008 | 6,068 |
| 2009 | 12,723 |
| 2010 | 17,445 |
| 2011 | 20,265 |
 2012 | 11,235 |
| Total | 67,736 |
OFFICE SUPPLY IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE SECOND QUARTER OF 2008
| Period | Total (sq m GFA) |
| 2Q2008 - 4Q2008 | 150,000 |
| 2009 | 231,000 |
| 2010 | 408,000 |
| 2011 | 321,000 |
| 2012 | 376,000 |
| Total | 1,486,000 |
SHOP SUPPLY IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE SECOND QUARTER OF 2008
| Period | Total (sq m GFA) |
| 2Q2008 - 4Q2008 | 196,000 |
| 2009 | 217,000 |
| 2010 | 64,000 |
| 2011 | 88,000 |
| 2012 | 13,000 |
| Total | 578,000 |
HOTEL SUPPLY IN THE PIPELINE EXPECTED TO BE COMPLETED FROM THE SECOND QUARTER OF 2008
| Period | Total (rooms) |
| 2Q2008 - 4Q2008 | 1,805 |
| 2009 | 5,595 |
| 2010 | 2,093 |
| 2011 | 1,668 |
| Total | 11,161 |
Last updated on 19 June 2008
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