Saturday, December 26, 2009

Banner year for good class bungalows


Source : Business Times – 17 Dec 2009

Demand looks robust going into new year after the $1.6b chalked up in 11 months

The Good Class Bungalow (GCB) market – the creme de la creme of the Singapore landed residential property market, at least on the mainland – has seen nearly 100 transactions worth a total of $1.6 billion in the first 11 months of this year.

The numbers, based on analyses of caveats by CB Richard Ellis (CBRE), are almost double the 51 deals valued at $827 million for the whole of last year.

The value also surpasses the full-year record for total value transacted of $1.23 billion set in 2006. But the number of deals so far this year is still shy of the record 119 set in 2006.

Credo Real Estate estimates GCB prices could have risen 5-10 per cent this year and projects a further 5-15 per cent appreciation in 2010. ‘Current GCB prices are not far off the peak levels established between mid-2007 and mid-2008,’ says the company’s managing director Karamjit Singh.

Sentiment in the GCB market is tipped to remain firm next year on the back of Singapore’s economic growth, and as the country attracts more high net worth new citizens.

However, some observers expect a slight easing in transactions as the strong pool of demand seen earlier this year has been substantially sated following a year of brisk sales.

CBRE director (luxury homes) Douglas Wong predicts 80-90 GCB deals next year worth a total of $1.2-$1.4 billion.

William Wong, managing director of RealStar Premier Property Consultant, also sees an easing in the number of GCB deals in 2010. ‘Demand is still strong, but the pool of buyers right now is not as big as, say, earlier this year. Most of those who wanted to buy a GCB have already bought this year, so demand has been substantially satisfied for now,’ he says.

‘Of course, the buying pool may expand again, for instance, as more high net worths from overseas become Singapore citizens.’

An upbeat Mr Singh declares: ‘Demand for GCBs is poised to remain robust as Singapore’s economy begins to grow again and the rich get to feel richer. GCBs are also popular investment tools played by seasoned high net worth individual investors when they smell capital appreciation potential.’

CBRE’s analyses of caveats data captured by URA Realis and SISV Realink as at Dec 11 show that 99 transactions worth a total of $1.58 billion have been done so far this year in GCB areas.

But with caveats yet to be lodged for any deals this month as well as some of November’s transactions, some industry watchers estimate the actual year-to-date tally could be closer to $1.7 billion, if not higher. There’s also talk of a few buyers choosing not to lodge caveats, perhaps to keep a low profile, although this can happen only if they’ve not taken a mortgage.

July was the busiest month this year with 23 deals done for $356 million. CBRE says 2009 has seen 20 GCB transactions at $20 million apiece and above, up from 12 in 2008, nine in 2007 and four in 2006. The number of GCB deals priced at $1,000 per square foot of land area and above has also risen from zero in 2006 to nine in 2007, 12 in 2008 and 24 in 2009.

This year’s strong showing was due to buyers deciding to make a commitment before prices increased further – when a price dip they had been hoping for earlier in 2009 did not materialise, says CBRE’s Mr Wong. This was amid a sudden improvement in property market sentiment when the stock market posted a stunning recovery.

Analysts also say a general distrust of financial instruments following the global financial crash has enhanced the appeal of GCBs to the well-heeled.

‘They’re evergreen investment products that would always be preferred by ultra-high net worth individuals. GCBs are limited in supply – the existing stock is about 2,400 – in an urban environment where landed housing is scarce. So there’ll never be an oversupply situation for GCBs. Most owners have strong holding power, reducing the risk of falling prices in a downturn,’ says CBRE’s Mr Wong.

Mr Singh says most buyers these days already own existing GCB properties and tend to trade in them. ‘There are also a handful of buyers seeking to upgrade from smaller landed properties or large apartments. The third category of buyers are new PRs and citizens, who qualify to own landed properties.’

Says CBRE’s Mr Wong: ‘About four, five years ago, the typical age of a GCB buyer would be in the mid-40s, but these days it would not be unusual to have a GCB buyer in the late 30s. Young professionals and entrepreneurs and PRs have been showing keen interest in the GCB market,’

In Singapore, foreigners need permission from the Land Dealings (Approval) Unit (LDAU) before they can own landed property.

On mainland Singapore, the main criteria are whether the foreigner is a Singapore PR and his or her economic contribution to Singapore. However, non-PR foreigners may buy landed homes on Sentosa Cove subject to LDAU approval.

Whether on the mainland or on Sentosa Cove, the landed home a foreigner is allowed to buy usually must not exceed 15,000 square feet in land area.


Owners turning to auction sales

Source : Sunday Times – 27 Dec 2009

Next year, there will be even fewer mortgagee sales at auctions as the economy continues to improve. Yet more owners are expected to go the auction route when it comes to selling their properties.

Jones Lang LaSalle said it expects to see more owners choosing to do so in the year ahead.
It also believes the number of mortgagee sales – or forced sales of repossessed properties – will fall further as the economy continues to improve.

Colliers International noted that more owners have taken to using auctions as a mode of sale due to its convenience.

This method has a relatively structured marketing process, a fixed sale date as well as a pre-arranged viewing schedule, it said.

‘Additionally, owners would be able to achieve good prices as a result of competitive bidding at auctions, especially if the market is buoyant.’

The bet is on a stronger property market next year. This means that mortgagee sales may not be done at very low prices.

‘A mortgagee sale does not necessarily mean a cheap sale,’ said Knight Frank auctioneer Mary Sai.

‘Next year’s mortgagee sales will be done at the prevailing market rate then, and prices may have inched up a few more per cent from this year’s level,’ she said.

Colliers expects high-end prices to recover next year as Singapore steps out of the global recession and opens its two integrated resorts. The sale of more high-value properties will prop up the total sale value at auctions next year, it said.

Mass market prices have recovered, while high-end prices are still a distance from the boom levels of early last year.

Nevertheless, buyers may still be able to find what they want at an auction.

As apartments get smaller and smaller these days, Colliers International is predicting that large homes will increase in popularity at next year’s auctions.

Residential properties that are perceived to be ‘value for money’, such as landed homes with big land areas or large apartments, would continue to be favoured by buyers, said its deputy managing director (agency and business services) and auctioneer Grace Ng.

But these need to be at bargain prices as terrace houses or small bungalow plots are typically popular with owner-occupiers.

The commercial sector, experts said, may present some good buys.

Colliers said that given ample liquidity in the market, shops and shophouse units with attractive rental returns will remain highly sought after.

Said Ms Sai: ‘Strata shops and offices are something to look out for. If rentals have declined, prices will likely fall in tandem.’

In the past, buyers wanted a gross rental yield of 6per cent to 8 per cent for a commercial property, she said.

‘Now that the cost of borrowing has fallen, some short-term buyers may want to buy a commercial property that gives a smaller yield of 4per cent to 5 per cent,’ she added.
Indeed, said Ms Ng, tenanted shop and shophouse units with average yields of about 5 per cent have attracted investors at auctions this year, given that bank interest rates are at a low of less than 1per cent.

In comparison, the average residential yield is about 3per cent to 3.5 per cent.

Landed homes typically offer an even lower yield of 1.5per cent to 2 per cent, though the potential for capital appreciation may be greater, experts said.

Friday, December 25, 2009

Malaysia property gains tax gets a time bar


Source : Business Times – 25 Dec 2009

MALAYSIA will now impose real property gains tax (RPGT) of 5 per cent on those who sell their property within five years of acquiring it.

This reverses a government decision made in October to slap a flat 5 per cent tax on all real estate transactions regardless of how long the property had been owned. The revised move was announced by Prime Minister Najib Razak on Wednesday night.

The about turn comes in the wake of concerns that home-owners – particularly senior citizens – would be badly affected by the tax. Although it was put in place to curb real estate speculation, the tax in its earlier form would have been unfair to those who had held on to their properties for decades.

Foreign investors had also complained about reinstating the tax that Mr Najib’s predecessor, Prime Minister Abdullah Ahmad Badawi, had waived in 2007 to boost the property sector.

Even so, the decision marks another policy U-turn.

The government is expected to forego some RM200 million (S$82 million) as a result of the latest decision, but in truth, many believe that the RPGT reversal was inevitable, particularly its imposition on long-holding owners.

Although some had argued that 5 per cent was a modest amount, many, especially senior citizens, had lamented it was unfair since some family homes had been held over several generations.

‘I inherited an old shophouse which was bought in 1960 at RM10,000. Today it is worth about RM400,000. So I would have to pay about RM20,000 in RPGT? I am retired and likely need to sell off this property to support my old age,’ a retiree had complained.

And as many had pointed out they were no longer in possession of documents and receipts dating back through the years to facilitate the calculation of the tax.

Property players had also been disappointed with the re-imposition given that the sector is still soft, barring a few areas that are in demand. While the economy appears to have grown stronger in the last quarter, many fear that it may not be sustained once governments worldwide ease up on stimulus spending.

Tax experts had observed a rush in applications by sellers to beat the deadline following the re-introduction of RPGT in the October national budget.


Thursday, December 24, 2009

The practice of foreclosure stripping


Source : Business Times – 24 Dec 2009

More owners stripping fixtures from a property before foreclosure

‘Stripping House – Before Foreclosure,’ the ad declared, offering potential buyers the cabinets and countertops, the sinks and toilets, the doors, the appliances, the sprinklers. Even the palm and citrus trees in the yard were for sale, with a catch.

‘You dig,’ the author advised.

In Nevada and other states hit hard by the housing crisis, stripping fixtures and appliances from homes in foreclosure has become commonplace. Craigslist, the Web site for classified ads, functions as a bazaar where stripped items are sold openly. Often, the stripping is not done by strangers. It is done by the owner, just before the bank forecloses on the mortgage and takes the property back.

If that seems like a situation tailor-made for the police, it is – at least in Arizona, where the Federal Bureau of Investigation has used Craigslist to arrest a handful of people for stripping homes and trying to sell the goods, charging them with felonies under a state fraud statute.

In other parts of the country, however, the police are stymied. As it turns out, several troubled states, like Nevada, have no specific criminal prohibition against stripping fixtures from a property before foreclosure. Mortgage contracts do prohibit such behaviour, requiring that homes be kept in good order. But violating those provisions is a civil matter, not a criminal offence.

‘If the homeowner sells the components to the house while they still own the house, that’s not a crime,’ said Officer Bill Cassell, a spokesman for the Las Vegas police.

So too in Florida, another state swamped by foreclosures. Several prosecutors and police agencies there said that unless laws were modified, such behaviour would have to be sorted out between borrower and lender in civil court.

Even in Arizona, which has an applicable law and where thousands of homes have been stripped, convictions are rare. There, to make a charge stick, law enforcement basically has to catch people in the act, said Julie Halferty, a special agent with the FBI in Phoenix and head of a mortgage fraud task force.

‘This window of time can be quite short,’ Ms Halferty said in an e-mail message. ‘Once homes are abandoned, arguably any number of people can get access and strip the fixtures.’ Statistics on foreclosure stripping are elusive, and experts disagree on just how widespread the practice is. Yet even those who play down the number acknowledge that the problem is serious, particularly in housing boom-and-bust areas like central Arizona, southwest Florida and the Las Vegas region.

‘Clearly it’s happening, and it’s happening with some frequency,’ said John A Courson, president of the Mortgage Bankers Association.

Banks are largely powerless to stop a homeowner determined to strip a property. Lenders can pursue such homeowners in court, but the expense and difficulty typically outweigh the gain.

Though the efforts are scattered and feeble, law enforcement officials are trying in places to stop the practice.

Last April, Randolph Guzman, 42, of Phoenix, was arrested while trying to strip appliances and fixtures from an investment home he owned, shortly before a bank was to hold an auction.

Mr Guzman posted an ad on Craigslist and found a married couple interested in buying the air-conditioners, kitchen cabinets, ceiling fans and a light fixture for US$2,300. They met at the house, in Surprise, a distant Phoenix suburb, and Mr Guzman accepted a down payment of US$400 in cash.

Then he was handcuffed and read his rights. The couple, he discovered, were police officers working undercover with the FBI.

Guzman pleaded guilty to defrauding a secured creditor, a felony.

If he completes 18 months of probation, the charge will be reduced to a misdemeanour, he will serve no jail time and pay only a few hundred dollars in court fees.

David Michael Cantor, Guzman’s attorney, called his client’s offence minor when compared with the thousands of homes that have been thoroughly stripped by their former owners.

‘I understand why they want to crack down on this stuff, but Randy is small potatoes,’ Mr Cantor said.

After the FBI publicised the arrest of Guzman and a handful of others caught stripping homes, the number of ads for stripped goods on Craigslist in Phoenix dropped sharply.

‘That was our objective – to get the word out that stripping a foreclosed home is illegal,’ Ms Halferty said.

Craigslist does not vet the postings created by its users, and a spokeswoman, Susan MacTavish Best, said the site had not been contacted by law officials about ads for stripped merchandise. ‘One wonders how one would know the provenance of each fixture and appliance,’ she wrote in an e-mail message.) The police in Las Vegas would like to follow the lead of those in Phoenix, but Nevada law hinders them.

‘We don’t have the tools to prosecute,’ said David Roger, district attorney for Clark County, which includes Las Vegas.

‘It’s obviously an issue that the Legislature should address.’ Not all legal experts agree that existing law is insufficient, given that homeowners who strip a house are violating their mortgage contracts. General fraud statutes might be stretched to apply. Yet so far, few prosecutors or the police – dealing with budget cutbacks – are making arrests or bringing cases.

The key to reducing the number of homes being stripped, experts suggest, lies not with the law but with lenders.

‘If banks focused more on prevention, everybody would be better off, particularly them,’ said Kenneth Thomas, a banking consultant in Miami.

Already, some indicators suggest that mortgage servicers are starting to delay the final step in a foreclosure – seizing the home – in part to limit the number of homes being stripped and vandalized.

Yet for some areas, it is too late. In several Phoenix suburbs, the stripping of homes appears to have peaked, but not before taking a heavy toll.

In Maricopa, a distant Phoenix suburb that had rapid growth before the crash, new developments were stripped one after another, often in the order they were built, according to Shawn Schlegel, a real estate broker who publishes a weekly community newspaper.

Some see an upside. Justin Cellini, 29, spent the last year being rejected by lender after lender in his quest for a home loan.

Finally, with cash from relatives, he was able to buy a four-bedroom, two-bath house in Hollywood, Florida, that had been stripped by its former occupants.

He paid US$111,000. ‘I’m actually thankful that they stripped the house,’ Cellini said. ‘It wound up costing me a lot less money in the end.’ He has been refurbishing it on the cheap – by buying fixtures and appliances off Craigslist.


Manhattan apartment rents decline as joblessness climbs


Source : Business Times – 24 Dec 2009

Manhattan rents fell as much as 7 per cent in the year ended Dec 15 as the recession helped some tenants move up to larger apartments for less.

Rents for studio apartments dropped 7 per cent to an average of US$2,247 a month in the period, the Real Estate Group of New York said on Tuesday. One- bedroom apartments fell 5.6 per cent to US$3,262. Both figures are for buildings with doormen.

‘The biggest difference between this year and last year is the amount of inventory,’ said Andrew Barrocas, chief operating officer of the Real Estate Group of New York.

Rents in Manhattan are falling as unemployment climbs. Seasonally adjusted joblessness in New York City rose to 10 per cent in November, the state Labor Department reported on Dec 17.

The city lost 25,200 finance-related jobs, including banking, securities and commodities, in the year ended Nov 30, including 700 last month.

In buildings without doormen, studio apartments fell by 3.8 per cent to US$1,921, while one-bedrooms fell less than one per cent to US$2,636.

New luxury rental buildings with amenities such as doormen include the 1,359 unit Silver Towers on West 42nd street as well as 808 Columbus, part of a five-building complex in development on the Upper West Side, Mr Barrocas said.


Surprise 11% drop in Nov new home purchases


Source : Business Times – 24 Dec 2009

However, personal incomes and spending post solid gains in Nov

Purchases of new homes in the US unexpectedly fell last month, indicating a recovery from the worst housing slump since the Great Depression will be slow to develop.

However, at the same time personal incomes rose in November at the fastest pace in six months while spending posted a second straight increase.

The Commerce Department yesterday said that personal incomes were up 0.4 per cent in November, helped by a US$16.1 billion increase in wages and salaries, reflecting the drop in unemployment that occurred last month.

Purchases of homes dropped 11 per cent to an annual pace of 355,000, lower than the lowest estimate of economists surveyed by Bloomberg News. The median sales price decreased 1.9 per cent from November 2008.

Last month’s decrease signals a sustained housing recovery may be difficult to secure without additional assistance from policy makers.

‘The tax credit put a Band-Aid over the housing problem and in October and November we ripped it off’ as it was set to expire, said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina, who projected sales would fall.

‘Demand for housing is not likely to pick up on a consistent basis until we start to see some improvement in employment,’ he said.

Sales were projected to climb to a 438,000 annual pace from an originally reported 430,000 rate in October, according to the median estimate in a Bloomberg survey of 72 economists. Forecasts ranged from 400,000 to 460,000.

Consumer spending increased in November less than anticipated as Americans cut back on services after buying more autos and electronics, others figures from the Commerce Department also showed. The 0.5 per cent increase in purchases was the sixth gain in the past seven months and followed a 0.6 per cent increase in October.

The report also showed incomes climbed 0.4 per cent, the biggest increase since May, and inflation cooled.

Fewer job losses and discounts may be brightening consumers’ moods. A measure of household confidence increased in December for the first time in three months, another report showed.

The Reuters/University of Michigan final index of consumer sentiment climbed to 72.5, less than anticipated, from 67.4 in November. The figure was lower than the preliminary 73.4 reading, reported on Dec 11.

The report from the Commerce Department showed the median price of a new home in the US decreased to US$217,400, from US$221,600 a year earlier.

Sales of new homes were down 9 per cent from November 2008.

Construction cutbacks helped bring inventories down. The number of homes for sale fell to a seasonally adjusted 235,000, the fewest since April 1971. The supply of homes at the current sales rate increased to 7.9 months’ worth.

New home purchases, while accounting for less than 10 per cent of the housing market, are considered a timely indicator because they are based on contract signings. Sales of previously owned homes, which make up the remainder, are compiled from closings and reflect contracts signed weeks or months earlier.

Sales of existing homes in November rose 7.4 percent to a 6.54 million annual rate, the highest level in almost three years, the National Association of Realtors said yesterday. Foreclosures accounted for 33 per cent of all sales, while 51 per cent were to first-time buyers, NAR said.


Capitalising on glut of condominiums in US


Source : Business Times – 24 Dec 2009

Group to buy properties and convert them into rental apartments

For most Americans, the US housing market collapsed about four years ago. For three real estate heavyweights, it’s just getting started.

Boutique investment bank Westwood Capital, veteran apartment building owner and manager Gerald Guterman, and appraiser Jonathan Miller plan to buy US$1 billion worth of new condominium buildings from struggling banks and convert them into rental apartments.

The venture, Condominium Recovery LLC, would buy whole buildings or large swaths of 50, 100 or 200 units at a time from banks that soon may be forced foreclose on billions of dollars in loans they made to developers.

Its team plans to start buying in New York City and south Florida. In both places, the financial crisis and recession shuttered construction projects in what were among the hottest US real estate markets.

Condominium Recovery is trying something that few other investors have because there has rarely been such a glut of property hitting the market during such depressed conditions.

The boom of the past decade grew out of low interest rates that made loans easy to get. Abundant low-interest loans boosted condominium prices to the tune of an average of US$1.5 million to US$2 million for a New York condominium.

‘If you look at the window of the expansion of condominium development, it correlates with the credit boom, and now we’re past that,’ Mr Miller said.

Now banks are in a tough spot. Not only did they bankroll the developers, they lent them interest reserves – money to cover the interest payments.

Banks are reluctant to foreclose on loans and get property instead because it means that they have to book the loans as a loss and take a hit to their already wobbly bottom lines.

‘Vacant condo project lenders are downright ostrich-like in the face of an unmitigated disaster,’ Daniel Alpert, managing Partner of Westwood Capital, said in a recent interview, referring to the widespread practice of banks extending loans instead of foreclosing on commercial real estate properties.

Mr Guterman says banks would be better off selling their buildings to his group at a price that would support apartment investment, as opposed to the typically higher condo prices.

Why? It’s better for the banks to take a smaller loss and shed the property – with all its possible problems, such as litigation and more construction – than to take a bigger loss and keep it.

‘The whole question is, especially after all of the reserves are gone, do you take the unlimited liability and run with it, or do you deal with someone who has credibility and has the funds, and sell it to them on a reasonable basis, which today is a rental basis?’ Mr Guterman said.

It is a convincing argument when you consider the source.

Mr Guterman, whom many real estate experts consider a master of he business, has owned or managed more than 60,000 apartments in the last 41 years.

Then there is Mr Miller’s authority in residential appraisals.

His quarterly reports on the New York City-area market is considered required reading among real estate professionals.

There is no shortage of inventory. In Manhattan alone, about 6,500 condo units completed or near completion but have not been listed for sale. Add to that new listings on the market, and that figure jumps to 8,500.

In New York City there are about 22,000 condos completed or near completion, but not listed for sale. That’s more than 26,000, counting new units on the market. In the Miami area, more than 20,000 condos are under construction or complete but not on the market, Mr Miller said.

In the third quarter, new condos comprised 22 per cent of sales. However, stripping out contracts signed before the Lehman Brothers collapse froze credit markets, it is more like 15 per cent, Mr Miller estimated. At that rate, it would take more than seven years sell the inventory of available units.

Once the developers’ interest reserves run out and the property or the bank must write down non-performing loans, those properties need to find buyers.

Mr Guterman thinks this will start happening next year.

If a bank sells its condos at fire-sale prices, others might join in, pushing prices down even more than they have already fallen. That could cause even bigger loan loses, perpetuating the cycle.

Condominium Recovery LLC is eyeing an average 10 per cent return, and expects to hold the properties for about four years. Based on market conditions then, it could sell rentals as co-ops or condominiums. or it could create an apartment real estate investment trust.

And while the group thinks it will get a good return on its investment, it thinks that renters will too.

‘A condo apartment is a wonderful rental opportunity,’ said Mr Guterman, adding that condos often have better finishes and details, and the rooms often are 15 per cent larger on average than units built as rentals.

‘You’re generally in a much better location.’


Major Hong Kong land sale may net up to HK$13b for two sites


Source : Business Times – 24 Dec 2009

The New Territories waterfront land will be auctioned on Monday

Cheung Kong (Holdings) Ltd, Sino Land Co and other Hong Kong builders seeking to replenish land reserves may pay up to HK$13 billion (S$2.4 billion) in next week’s government auction of two waterfront properties in the New Territories, analysts said.

Two residential parcels of the same size in the Tai Po district will be auctioned on Monday. Each covers 2.0925 hectares, the largest properties to be offered since September 2007, according to Lands Department records.

Hong Kong is trying to ease a shortage in land supply and homes that fuelled price increases of up to 30 per cent this year, sparking a public outcry over housing costs and prompting the central bank to warn the city may face ’sharp corrections’ in asset prices should fund flows reverse. Developers said the government, one of the largest suppliers of building sites, should offer more land.

‘If you are running very low on inventories and aren’t sure when the next site will be drawn, you’d want to seize on this auction and lock in the project,’ said Paul Louie, a Hong Kong-based analyst at Nomura Holdings Inc.

The two sites could fetch up to HK$6.5 billion each, said Alnwick Chan, executive director at Knight Frank LLP in Hong Kong. Two other analysts surveyed by Bloomberg estimated the combined price at HK$11.4 billion.

Sino Land Co, controlled by chairman Robert Ng’s family, is the front-runner to win Monday’s auctions since the developer already owns three sites nearby, Mr Louie said.

Joyce Yu, a spokeswoman at Sino Land, wasn’t immediately available for comment.

Henderson Land Development Co, controlled by Hong Kong’s third-richest man, Lee Shau-kee, is interested in bidding, company spokeswoman Bonnie Ngan said. New World Development Co and K Wah International Holdings Ltd also said they may participate in the auction, which was announced on Nov 18.

Developers trigger government auctions from a list of available sites by promising to pay a minimum amount. One bidder will likely buy both parcels to build luxury homes, said Alvin Lam, executive director of Midland Surveyors Ltd.

‘These are choice waterfront sites, and given the low-density requirements, it should draw many builders to auction for it,’ Mr Lam said. The sites each have a gross floor area of 720,757 square feet. Mr Lam forecasts both sites to be auctioned at HK$11 billion, or HK$7,631 a square foot. Mr Louie and James Cheung, director of Centaline Surveyors Ltd, estimated the land could fetch HK$11.4 billion.

Low mortgage costs, near-zero interest rates on savings deposits, and buying by mainland Chinese pushed up existing home prices by 28 per cent this year as of Dec 13, according to the Centa-City Leading Index, a weekly measure developed by Centaline Property Agency Ltd and the City University of Hong Kong.

Hong Kong developers have 50,000 units on hand to sell, based on estimates of their land bank, sites under construction and homes that were built, compared with 73,000 units in September 2007, Mr Louie said. The government sold a 22,126-square-metre site in Tai Po that month, according to Lands Department records.

Hong Kong home transactions almost tripled in November from a year earlier, figures from the Land Registry show, marking the eighth straight monthly gain.

The Hang Seng Property Index, which tracks the city’s six biggest developers, has risen 61 per cent this year, making it the best-performing component in the benchmark.


Condo residents sick of litter thrown from upper floors


Source : Straits Times – 24 Dec 2009

I REPRESENT a group of residents from Hougang’s Regentville Condominium who live in ground-floor units with open-concept balcony or private enclosed space.

Over the past few years, we have been experiencing rubbish thrown from the upper-floor units into our enclosed spaces. These include used tissue paper, soiled sanitary pads and diapers and packets of food, half eaten.

What is more disturbing is the killer litter: Cleavers, hardcover story books, toys, wooden sticks and even a baby walker have actually landed in our spaces. Each time this happened, we sought the help of the security guards and complained to the condo’s management agent (MA). The guards would issue verbal warnings to those who were caught red-handed, and that would be the end of it. No further action or deterrent measure has been taken to resolve the littering problem effectively.

When some ground-floor residents decided to build protective roofs over their spaces (within Urban Redevelopment Authority guidelines), they were asked by the MA to tear them down. Reasons for this included protecting the interests of the upper-floor residents, maintaining the estate’s facade, privacy, security and value of the property.

The motion to build the roofs was defeated during the annual general meeting, too, simply because ground-floor residents were in the minority.

When our group approached our MP, we were told that he could not interfere unless officially invited by the estate’s management council.

So it seems that our safety, and that of our families, now lies in the hands of upper-floor residents who lack civic sense. This should not be the case as our children and parents should be entitled to walk around our own private spaces free from the fear of being hit by something thrown from above.

Repeated calls for face-to-face discussions with the upper-floor residents to resolve the issue amicably have fallen on deaf ears.

I would like to know which authority would be in a position to help us.

Also, would the condo’s management council be liable if someone is seriously injured or killed by killer litter?

Lim Shaw Ming


Reit takeover guidelines require closer look


Source : Business Times – 24 Dec 2009

WHAT exactly does it mean when a Reit is taken over? In the case of other corporate entities, it’s fairly clear that when a general offer is made after the 30 per cent trigger point is reached, control of the company and the subsequent economic decision-making will pass into the hands of the successful takeover party. With Reits though, the situation is not as clear – mainly because economic decision-making does not lie with shareholders but rests with the Reit manager instead.

It was in June 2007 that the Securities Industry Council announced that the Singapore Code on Takeovers and Mergers will be extended to Reits – about five years after the first Reit was floated on the SGX. This means a party whose stake in a Reit hits the 30 per cent threshold would have to make a general offer for remaining units in the Reit. This is the same as for any listed company on the Singapore Exchange.

But Reits are unlike other listed entities because they are externally managed by a manager appointed by the trust.

In the case of other companies, anyone owning the controlling block of shares can control the company’s management, assets and cashflow.

But when you buy units in a Reit, you own its assets but not the manager. So even if a party owns a controlling stake in the trust, it has no control over distribution of its cashflow as this rests with the Reit manager, as spelled out in the trust deed as well as the Reit guidelines.

One could thus argue that gaining a controlling block of units in a Reit does not necessarily give you control of the trust’s underlying economics, which is vested with the manager.

Another example of the influence that a Reit manager has over the trust’s business is that the manager gets to recommend what assets the trust should buy and on what terms – including pricing and timing of the acquisition. This includes purchases from the Reit’s sponsor, which may also own the manager.

What this means it that if a new entity takes control of a Reit manager, one could argue that control of the Reit’s economics has actually passed to this new investor, even if this party did not buy any units in the Reit or bought less than the 30 per cent threshold that will trigger a takeover offer. The new investor could be prepared to pay a premium for the stake in the Reit manager but not for units in the Reit. In this instance, the new investor would have managed to take control of the Reit’s manager – and the trust’s economics – without making an offer to other unitholders.

In another scenario, even if the incoming investor in the Reit does reach the 30 per cent mark and makes a general offer to other unitholders, it could structure a deal such that the price at which it buys the Reit units reflect no or low premium; in exchange, it pays a handsome premium for a stake in the Reit manager. Hence, current guidelines allow an incoming investor to shift value between units in the Reit and the price of the management company.

The long and short of it is that Reit unitholders are deprived of an offer – or a good offer. What’s more, bad Reit managers are rewarded when an incoming investor pays a premium for the Reit manager as a cheap way to gain control (and where the premium paid for management control is not made available to minority unitholders) instead of making a general offer for the Reit and having to pay a premium for units in the Reit.

There is thus a need for the authorities to study whether transfer of ownership in the Reit manager is tantamount to a passing in control of the Reit itself.

Current interpretation of takeover guidelines for a Reit – defined as gaining control of at least 30 per cent ownership of the trust but without any reference to the Reit manager – is open to being exploited by incoming investors looking for a cheap way to control a Reit as well as bad Reit managers who’ll be handsomely rewarded in the process for their stake in the Reit management company.

The takeover guidelines for Reits require a closer look. Sure it will not be easy. How does one define passing of control of a Reit manager? Should it be when an incoming investor buys a 20 per cent stake in the management company? Or should the limit be set higher – at say, 50 per cent? And requiring the investor to make a general offer for the Reit itself could also have other implications. What happens if this party then turns out to be a bad manager for the Reit? If other unitholders subsequently want to get rid of it, they may not be able to muster enough support to pass a resolution at an EOGM to oust the manager.

Then there will be cries from other quarters that such rules would stifle the property fund management industry in Singapore. There must be room for pure Reit managers, who do not take any stake in the Reit, goes the argument. But such a breed of managers may not have their interests fully aligned with unitholders’, and may engage in activities that boost their fee income but which may be detrimental to unitholders – such as buying assets that could be earnings dilutive but which would enable them to cream off a nice acquisition fee and boost their management fees as the value of the Reit’s deposited property increases.

Still, the issue of when the control of a Reit passes on warrants a re-look by the authorities. This will protect the interests of minority investors as well as the reputation of Singapore as a Reits hub in Asia.


Wednesday, December 23, 2009

Mayfair Gardens plans en bloc sale


Source : Straits Times – 22 Dec 2009

THE en bloc market is showing more signs of life, with owners of Mayfair Gardens in Rifle Range Road being the latest to put their estate up for sale.

They want $210 million or more for their 99-year leasehold site, which translates to about $857 per sq ft (psf) of potential gross floor area.

That would allow owners of the 124-unit development to reap between $1 million and $2.1 million each, depending on the size of their units.

In March, just over 80 per cent of owners backed a sale but they wanted to wait for the market to perk up before launching.

Their $210-million price tag also includes an estimated $40 million for development charge and the topping of the site’s lease to 99 years.

CKS Property Consultants, which brokered the Dragon Mansions collective sale – the only one done this year – is the marketing agent.

It said the Rifle Range estate is very attractive, given its location in the established residential area of Bukit Timah and its proximity to the upcoming Blackmore MRT station.

The site, which also fronts Dunearn Road, is next to a good class bungalow area and relatively close to the Bukit Timah Nature Reserve.

It has a land area of 208,475 sq ft and is zoned for residential use with a gross plot ratio of 1.4. There are about 72 years left on the lease.

A new development could potentially yield a maximum gross floor area of about 292,000 sq ft, which translates to an estimated 200 units of 1,500 sq ft apartments, CKS said.

The $210-million sale price gives a breakeven level of around $1,400 psf for a developer, said a property consultant, who noted that surrounding projects are mostly selling at lower prices apart from Jardin.

Nearby developments include Gardenvista, Jardin, The Sterling, Maplewoods, and The Nexus.

A unit at freehold Jardin in Dunearn Road sold for $1,510 psf in August.

This year, several collective sale sites – all relatively small ones except for Laguna Park – have been launched for sale.

But only one was sold. Dragon Mansions went for $100.8 million, below the owners’ initial asking price of $120 million.

The Mayfair Gardens tender closes on Jan 14.


US home foreclosures top the million mark


Source : Business Times – 23 Dec 2009

Troubled home loans continued to mount in US banks in the third quarter as even once-solid borrowers increasingly fell behind on their mortgage payments.

For the first time, foreclosures on mortgages serviced by US national banks and savings and loans topped the one million mark, according to figures released on Monday by the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

The percentage of prime borrowers whose loans were more than 60 days past due doubled from the July- September period a year ago, while more than half of all homeowners whose payments had been lowered through modification plans re-defaulted.

The report, which covers about 34 million loans, or about 65 per cent of all US mortgages, underscores the obstacles facing policymakers trying to strengthen the nation’s housing market. Persistent unemployment is making it tough for millions of homeowners to pay their home loans. In addition, many people whose monthly instalments have been lowered through mortgage modification programmes still are unable to keep up.

Current and performing mortgages serviced by national banks and thrifts fell to 87.2 per cent – the sixth straight quarter that the quality of their home loan portfolios has slipped.

‘Mortgage performance continued to decline as a result of continuing adverse economic conditions including rising unemployment and loss in home values,’ the report said.

Seriously delinquent mortgages – loans 60 or more days past due and loans to delinquent bankrupt borrowers – rose to 6.2 per cent of the servicing portfolio. That represented a 16.7 per cent increase over the second quarter and a 73.8 per cent increase from a year earlier, according to the report. Of those seriously delinquent loans, the number in homes in the foreclosure process reached 1.09 million, or about 3.2 per cent of all the loans surveyed.

The report highlighted some troubling trends as the housing market continues to struggle despite increasing sales and prices in many areas.

Difficulties increased for holders of prime mortgages, with the percentage of those loans that were 60 days or more delinquent increasing to 3.2 per cent, up almost 20 per cent from the second quarter and more than double the rate of a year ago.

In addition, holders of mortgages whose payments had been lowered through government or private modification plans re-defaulted at high rates. More than half of all homeowners with modified loans fell 60 days or more behind in their payments within six months of the modification taking place.

But Bruce Krueger, a mortgage analyst for the Office of the Comptroller of the Currency, noted that homeowners with more recent modifications were doing better at keeping up with their new payments, reflecting a push by the Obama administration to get mortgage servicers to come up with better plans. About 35 per cent of homeowners who received modifications in the third quarter of 2008 fell behind 60 days or more behind on their payments after three months in the modified payment plan, the report said. That figure decreased to about 19 per cent of homeowners who received a mortgage modification in the second quarter of this year.

Still, the report’s data could add pressure on Congress to give financially strapped homeowners additional help by allowing judges to lower mortgage principal as part of bankruptcy, said Jaret Seiberg, a financial policy analyst with Concept Capital’s Washington Research Group.

‘While the re-default rate seems to be getting better, it’s still very high and it’s high enough to continue causing a political problem for the industry,’ he said.

Mortgage modifications increased in the third quarter as the Obama administration pushed servicers to participate in its Home Affordable Modification Program. The report said that servicers modified 680,000 loans through that programme or their own efforts. Overall, mortgage servicers started almost twice as many mortgage modifications as new foreclosures.

The invigorated attempt to keep people in their homes with lower payments ironically contributed to the rise in the number of homes in the foreclosure process. The pace of homes in which foreclosure proceedings began remained about the same in the third quarter as it was earlier this year. But fewer of those proceedings were finished as mortgage servicers worked with homeowners to modify some of those loans.


Singles do get benefits


Source : Straits Times – 23 Dec 2009

I REFER to the letter ‘Think about singles too’ by Mr Lua Eng Chuan (Dec 15). HDB’s basic principle underpinning all housing policies is that families get priority over singles.

This is in line with our national objective of encouraging marriage and having children. However, this does not mean that singles get no benefits.

In fact, since 2004, single citizens have been able to buy resale flats and can get an $11,000 grant. Two singles buying a resale flat together can get $22,000. Singles can also qualify for subsidised housing loans.

Furthermore, if they form a family unit with their parents, singles can buy a subsidised new flat directly from HDB, or a Design, Build and Sell Scheme (DBSS) or resale flat with a $20,000 grant.

If housing grants are pegged to a percentage of the price of resale flats as Mr Lua has suggested, those who can afford more expensive flats will receive larger subsidies. This will not be fair to those who can buy only smaller flats. It may also feed the market, leading to higher resale prices.

Mr Lua has also suggested allowing singles to buy new two-room flats. Singles are not allowed to buy new flats as the subsidy included in the selling price is for a family of at least two. However, singles can buy a new flat if they form a family unit with their parents. They also have other options as outlined above.

Permanent residents (PRs) do not enjoy any housing subsidy and can buy only from the resale market. They have to abide by HDB rules to sell or sublet their flats – for example, meeting the minimum occupation period.

Not allowing PRs to sublet or sell their flats would be unfair because they, too, paid full market value for their flats.

We thank Mr Lua for his feedback and suggestions.

Lily Chan-Wong Jee Choo (Mrs)
Deputy Director (Policy and Property)
Housing & Development Board


Being first may not matter


Source : Straits Times – 23 Dec 2009

NO ONE at the ChildAid concert over the weekend could have missed a huge mural in the lobby of the Festive Grand Theatre at Resorts World Sentosa (RWS): it touted itself as Singapore’s ‘1st Integrated Resort’.

Staff members were out in force to make sure the resort’s first public function went without a hitch – in the auditorium, carpark and the restrooms.

From chief executive officer Tan Hee Teck down, they were clearly excited at the prospect of finally showing off the goods, so to speak. And yes, people gawked.

RWS has overcome a six-month handicap to beat Marina Bay Sands (MBS) with a soft opening for concert ticket-holders, and has declared that it will be throwing its doors open to all in early January.

On the other hand, MBS has been battling speculation and reports that it is in trouble – money-wise and management-wise. Its initial intention to open all its offerings by the end of the year had to be taken back. It will now open some parts by April, said its flamboyant chairman, Mr Sheldon Adelson. He insists the delays are ‘no big deal’.

Is he right?

The fact is, the sooner it can open for business, the faster it will generate income. This is critical because both projects have busted their budgets not once, but twice.

MBS’ estimated cost went from US$3.6billion (S$5billion) to US$4.5billion to US$5.4billion. Resorts World saw its cost rise from $5.2billion to $6billion to $6.59billion.

Analysts said RWS’ rush to be first to open could be an attempt to cash in on the ‘first-mover’ advantage and lock in resident patrons.

By law, Singapore citizens and permanent residents have to pay an entrance fee of $100 per day or $2,000 per year to patronise a casino. And the annual pass is exclusive to one casino only.

There is a small speed hump which few know about. The casino that opens first has to pay $15million a year for a licence. The fee is reduced to $12.5million when another casino opens up. When this happens, CasinoA is refunded a pro-rated amount.

This sum, however, is small beer compared to the billions that resorts are sinking into their projects.

MBS has blamed the price of sand, the cost of construction and even the rain for the delays. A critical building structure, the SkyPark linking the three hotel towers, will be hauled into place by the end of the year. That section will open for business only in June.

Mr Adelson has already put a figure on how much his resort will earn annually: US$1billion. Putting things in place properly, he said, will make up for not being able to generate revenue sooner. RWS won’t get a ‘gold star’ for being the first to open, he snorted.

‘Let them open first and we’ll see what mistakes they make and we will correct them so we’ll make fewer mistakes.’

Mr Felix Ling, a senior partner of Platform Asia, a Singapore-based casino consultancy firm, concurs.

He said: ‘An early opening is a double-edged sword. It could work to your advantage, but could also expose your soft underbelly.’

For example, the competitor can suss out its rival’s weaknesses and strengths, he said. So any minor improvement on the part of the latecomer would be appreciated by customers more.

Key business processes need to be in place in the casino and theme park for things to run smoothly, service quality has to be top notch, the attractions have to give people a sense of excitement. Otherwise, both resorts could turn out like Hong Kong Disneyland, he said.

The park, which opened in 2005, was plagued with problems from the start – including hour-long waits for rides, inadequate parking and food shortages.

Early signing of annual levy pass holders, Mr Ling added, may not be that big an advantage as the competitor can always lure customers through creative marketing programmes, superior trip incentives, and better customer loyalty programmes.

Agreeing, CIMB-GK regional economist Song Seng Wun said: ‘Being first to open will get you only bragging rights.’ Ultimately, the proof of the pudding will be in the eating.

Both are worthy players. MBS’ parent company, Las Vegas Sands (LVS), knows the meetings and business travel market well – the trump cards that won it the bid in the first place. LVS was credited for bringing Mice – industry parlance for meetings, incentives, conventions and exhibitions – to Vegas. When it went to Macau, its Sands Macao recouped its investment capital within a year.

More recently, it has battled potential bankruptcy and has brought back stalled Macau projects after selling shares in the Hong Kong stock market. It has also fired up to 11,000 construction workers in Macau and has put work on a project there on hold, to focus its resources on its Singapore project, which it has described as the company’s No.1 priority.

On the other hand, RWS’ parent, Genting Group, has had years of experience of operating in Asia, running the casino resort in Genting Highlands and Star Cruises.

Also, working with a world-class partner like Universal Studios has given RWS more cachet than it ever had running its own theme parks.

Expectations of RWS are high precisely because it will be the first to open. Flaws in facilities or service would not be kindly tolerated. Nor would hitches in its theme parks, including its roller coasters and other mechanical devices. In fact, if anything untoward were to happen, the speed that is now praised as efficiency would be regarded as unnecessary haste.

By all accounts, its first public function went smoothly. One thing the staff did not anticipate: When blue and white balloons were dropped from the auditorium ceiling at the end of the concert, delighting the audience, they wafted out of the door and filled the staircases.

Some stumbling and fumbling ensued as patrons made their way down the steps. Balloons were pricked by women’s stiletto heels.

To be sure, that is too small a thing to burst RWS’ bubble. But you can be sure that its rival was there – watching.


A village in which to retire, perchance to dream

Source : Business Times – 23 Dec 2009

This is among the lifestyle alternatives that S’pore’s ageing population will need

Lush, manicured lawns. Bubbling fountains. Bright, beautiful homes fitted with state-of- the-art living equipment. Residents strolling in the evening light.

Not an advertisement for a high-end residential development but, rather, a real-life retirement village for older folk with good access to medical care.

While not yet a reality in Singapore – though incarnations exist in abundance in the US, Europe and Australia – such a development is something society here will need sooner rather than later.

A recent study by the Lien Foundation revealed that Singaporeans’ greatest fear is to be a burden to their family and friends. Among their top five wishes is to spend their final days at home, but with medical and nursing support nearby.

With the local population fast ageing – almost half are in the 35-64 age group – and with this generation being more affluent and educated, there is a growing need for alternative lifestyle choices for the elderly.

A retirement village, or community, is one such alternative. Such communities are planned for the retired or older folk, and have special facilities catering to their needs and wants, which include extensive amenities like clubhouses, swimming pools, and golf courses, as well as on-site medical facilities.

These cater to the wishes of the older folk who prefer to live on their own, with their spouse, or those who have no children in Singapore to look after them.

One person who feels the need for a retirement village here is Stefanie Yuen Thio, who jointly manages TSMP Law Corporation with her husband, Senior Counsel Thio Shen Yi. Mrs Thio, who is in her late 30s, tells BT: ‘One of the things that people drive home over and over again when they hear that I have only one child is that he will be saddled with having to look after both his parents in his old age. I don’t want that.’

‘When Shen and I grow old, we want our son and our grandchildren to want to spend time with us, but not to have to look after our daily living needs. We want (our son) Jonathan to have the freedom to develop his potential and follow his dreams wherever that may lead. I know I am not alone in this,’ she says.

She’s not. Adrian Tan, a lawyer with Drew & Napier and author of well-known local novels, The Teenage Textbook and The Teenage Workbook, has been thinking a lot about how he’s going to spend his retirement days, now that he’s left his teenage years well behind him.

The 43-year-old, who is married but does not have children, says a retirement community is the most attractive option for him.

‘If we are lucky enough to have good health, my wife and I want to spend our days being active – travelling, learning and being among like-minded people,’ he says.

Mr Tan is drawn to the retirement communities in the West – in the United States, especially, where there are hundreds of well-established retirement community programmes spread out across the country. Such communities have made luxury and independence for their residence a big business.

‘I would really like to remain independent – that’s a big thing for me. Even for those who have children to look after them, these older folk are sometimes tolerated, put in the smallest room in the house, their activities dictated by the rest of the family,’ Mr Tan says.

‘I would like to preserve my independence, be able to spend my days with my wife as we please, stay in a well-appointed place designed for folks like me, but without the vibe of a nursing home,’ he adds.

Mrs Thio’s thoughts echo that: ‘I think I, and others like me, would like to have the option of living in an assisted living facility. It would be more a condo with extra amenities and services than an old age home. Everyone has their own serviced apartment, but with extra services.

‘And it’s not just about medical care. I think this sort of planning and infrastructure is important for the fabric of our families. When someone is unable to take care of his sick parent, and has to move him into a nursing home, there is often a great deal of financial sacrifice that he has to make just to pay for it. And yet the aged parent feels abandoned and resentful. This drives a terrible wedge into the relationship at a time when the bonds need to be strongest.’

‘We need to have facilities in place where elderly folks can grow old with dignity and grace, not as some invalid in a nursing home in a dormitory with five other beds,’ Mrs Thio says.

But will such a retirement village become a reality in Singapore in the near future? A quick check by BT with the major property developers here indicate a reluctance to venture into such a project – with profitability and legislative issues being their main concerns.

Hopes for a retirement village rest on one man: property developer and former chief of the Real Estate Developers’ Association of Singapore (Redas), Daniel Teo, who has made it his life mission to build such a retirement community in Singapore.

The 66-year-old, who is married to former ballerina Goh Soo Khim, has four children and six grandchildren. But he’s sensitive to the needs of others who don’t have so many offspring.

‘Families are getting smaller, these days. Children study and then work abroad and are separated from their parents. More and more young people are choosing to not get married, not have families,’ he told BT.

‘I feel for a lot of seniors, who have been driven out of their homes by en bloc sales, and those whose children don’t live close to home. I would like to have a community where the older folk can live independently – preferably with some middle-aged people as well – along with assisted care and even a nursing home; several stages together.’

‘There is definitely a need for a retirement community here,’ Mr Teo said. ‘But yes, there are issues that need to be worked out – laws that need to be developed.’


Developers yet to warm to idea for the silver years


Source : Business Times – 23 Dec 2009

Most of them cite unfamiliarity and high costs as barriers

SINGAPORE’S ageing population means a growing need for greater medical care and facilities for the elderly – not least of which would be a retirement village for the more independent-minded.

The government has sought to encourage the development of a retirement community here: In February 2008, it released a land parcel in Jalan Jurong Kechil, close to the Bukit Timah Nature Reserve, with a 30-year lease, specifically for a retirement village. So far, no one has taken it up.

A quick check with some of the major property developers revealed that none were willing to venture into retirement villages. Most cited unfamiliarity and high costs as barriers to their entry.

Ong Choon Fah, executive director in Singapore and regional head of consulting for the global real estate consultant DTZ, told BT that building a retirement village isn’t a straightforward task – there are a host of issues that need to be resolved first.

Retirement villages or communities are a big business in countries such as the United States and Australia and in Europe, and include amenities such as clubhouses, swimming pools and golf courses, as well as on-site medical facilities. But developers in Singapore are less keen on the concept.

‘I think it’s something that will happen in time to come. But, in the meantime, there are some issues that need to be addressed, issues which we’ve explored with several clients who have expressed an interest in developing retirement homes on the Jalan Jurong Kechil site,’ she told BT.

‘First, there’s a question of the land. Most of our clients have expressed an interest in a freehold plot, rather than one with a use-by date.’

‘A retirement village also differs from a normal property development because it has other amenities and may need some level of medical care on site. This makes the upkeep of the entire community rather expensive – and such a concept will most likely be targeted at the higher end of the market,’ she said.

But perhaps the most important issue that needs to be addressed is the legislative one. While there are laws to govern home purchases in Singapore, there aren’t any relating to transactions in retirement communities – unlike in countries such as the US, Australia and in Europe, where there are well-established laws governing the business.

Mrs Ong says: ‘There’s the question of the business model for the retirement village. Will residents buy or rent the units? If they buy it, will they be able to sell or will away their units to their children? Will young people be able to buy? An exit strategy is very important. And there are major issues that need to be worked out to ensure a win-win outcome for all stakeholders involved.’

Property developer and former Redas (Real Estate Developers’ Association of Singapore) chief Daniel Teo is up to the challenge. He told BT: ‘I want to offer a better lifestyle to the elderly folk here, give them that companionship they need. Develop something that the ambulant can live in comfortably.’

‘But yes, there are issues that need to be worked out – laws that need to be developed. I think the government needs to take the lead in this.’

‘Perhaps I can arm-twist them into developing such legislation when I build a retirement village,’ he quips.

Mr Teo, who is the director of his family businesses Tong Eng and Hong How groups, says he has been searching for years for the perfect site – or the right building – to begin fulfilling his dream.

He says that property developers such as MCL Land, City Developments and Frasers Centrepoint have approached him to explore the idea of developing a retirement village together.

‘The problem is finding the right piece of land. I’ve lost out on several deals, despite having done a lot of legwork on them,’ he said.

He has looked at the plot of land released by the government in Jalan Jurong Kechil, in the Upper Bukit Timah area, for a private developer to build a retirement village. ‘The problem with that is that the lease (30 years) is just too short. The size of the land and its location (next to some residential housing, close to the Bukit Timah Nature Reserve) would be perfect for an idea I have for low-rise retirement housing – maybe a five-storey block here and an eight-storey block there. But the lease needs to be changed. It needs to be extended, or there needs to be an agreement that the lease can be extended, based on a certain agreed sum. Then, it would be workable.’

Mr Teo has visited various retirement villages and communities around the world to get ideas.

He recently returned from a trip to Perth, where he found his ‘dream’ retirement village in St Ives Centro – just minutes from the Subiaco Townsite and the beach. The development is part of the St Ives group, which has several retirement villages across the country. It’s designed like a Balinese resort with an indoor heated pool, spa, gymnasium, restaurant, Internet cafe, games room, a bar and a beauty salon. Importantly, the development has 24-hour care, the latest technology emergency call system and is completely surrounded by perimeter fencing for the safety of its residents.

‘This is the standard I’m interested in; this is the sort of retirement village I’m keen on developing in Singapore,’ Mr Teo says.

He told BT that he has already found ’some 20 to 30′ like-minded folk, equally keen on developing a retirement village as he is. These include doctors, lawyers, even former Nominated Members of Parliament – ’some of whom have even engaged their own consultants to draw up plans for a retirement village’, he said.

‘I hope this will be a reality in my lifetime,’ he said.


Marina Bay Sands’ loss is Genting’s gain: DBS Vickers


Source : Business Times – 23 Dec 2009

RWS gets first mover advantage from rival’s delay

GENTING Singapore’s Resorts World at Sentosa (RWS) will benefit from construction delays at Marina Bay Sands (MBS) caused by problems with weather and sub-contractors.

In a research note yesterday, DBS Vickers said: ‘The second delay in the soft launch of MBS will further enhance RWS’s first mover advantage.’

DBS Vickers also said that ‘RWS should be able to catch the Chinese New Year peak season and lock in local market share’, highlighting that the $2,000 annual pass in lieu of $100 per entry to be paid by Singapore residents is exclusive to one casino.

The broking house maintains a ‘buy’ call on Genting Singapore at $1.16 a share and a target price of $1.30 per share.

‘RWS is on track to open in January 2010 and has submitted its casino licence application – now pending finalisation of the Casino Control Act and interviews of employees by the authorities,’ it said, adding that RWS has already recruited about 6,000 staff out of a target of 8,000.

The research note comes a day after Las Vegas Sands chairman Sheldon Adelson said the opening date for MBS had been pushed back from the first quarter of 2010 to Q2.

Speaking at a news conference, he attributed the delays to rain and certain sub-contractors going bankrupt.

Mr Adelson also shed light on the prospect of junket operators, saying that few, perhaps even none, will operate here.

In its research note, DBS Vickers said a strict junket licensing regime will be in place ‘and we believe the Singapore government will be pragmatic in ensuring both integrated resorts will be a success’.

For RWS, DBS Vickers expects gaming revenue to come mainly from the grind segment, contributing about 60 per cent of gaming revenue.

‘Universal Studios should help draw in the mass market, differentiating RWS from MBS’s MICE/business visitors focus and help diversify revenue base,’ it said. It expects non-gaming revenue to contribute 25-30 per cent of RWS’s total revenue.

‘In any case, a higher percentage of direct VIP business should help boost margins given the typical lower rebates compared with junket commissions,’ it said. ‘Although this could lead to higher default risk, we believe it should be easier to conduct credit checks and enforce debts given Singapore’s target market.’


Integrated Resorts in Singapore upbeat about outlook in 2010

Source : Channel NewsAsia – 23 Dec 2009

Three years in the making and Singapore’s two integrated resorts will finally open soon and the operators are upbeat about the prospects.

Resorts World Sentosa, due to open in a matter of weeks, expects to attract 13 million visitors in the first year alone.

The resort said it has been receiving thousands of enquiries from the public everyday. And one of the most talked about attractions is Universal Studios. The theme park is expected to attract some 30,000 visitors each day.

Visitors will encounter ferocious dinosaurs, Egyptian mummies and if that is not thrilling enough, a pair of duelling roller coasters should do the trick.

Resorts World Sentosa said with 60 F&B outlets, six hotels and retail options, there will be no lack of things to see and do.

Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa, said: “We’ve got Michael Graves studio – Michael Graves being the man who designed the entire resort.

“We’ve got a Chihuly studio – Dale Chihuly is probably the most famous artist and maker of fabulous glass pieces, which by the way, he will have many pieces on display within the casino and in our Crockfords tower.”

And over in the downtown area, construction of the Marina Bay Sands resort is progressing well. The resort is touting its crown jewel in the form of the huge Sands SkyPark which sits 200 metres in the air, linking the three hotel towers.

The SkyPark will feature a public observation deck, landscaped gardens, outdoor pools and F&B options. Its massive convention space, at 120,000 square metres, will also bring over 150,000 delegates to the resort from 2010.

On the lighter side of things, the award-winning Broadway musical “The Lion King” will be making its Southeast Asian premiere in Singapore.

Thomas Arasi, CEO, Marina Bay Sands, said: “The Lion King is going to stimulate a lot of interest and a lot of curiosity. Once we move further down in our programming, it’s later on in the property’s development, but the same will occur with our second theatre.

“We are also getting a lot of buzz now and it will really pick up in the first and second quarter, about the compendium, the assortment of celebrity chefs restaurants that we have coming in.”

And those feeling lucky will clearly be hoping to take on Lady Luck in the casinos at the two resorts.




Tuesday, December 22, 2009

2010 could see plum hotel deals


Source : Business Times – 22 Dec 2009

Much of this activity in the US will be spurred by sale of distressed properties

The recession-ravaged US lodging industry will offer opportunities next year for would-be hotel investors interested in picking up plum properties suffering from falling revenue and high debt.

As much as US$3.5 billion worth of hotels are expected to trade hands in the United States next year, compared to just US$2 billion in 2009, according to projections from hotel investment firm Jones Lang LaSalle Hotels.

Much of this activity will be spurred by the sale of distressed hotels struggling to fund looming debt payments as travel demand remains weak.

‘When these loans come due, I think that’s when you’re going to see an awful lot of product in the market,’ said Daniel Lesser, a senior managing director of CB Richard Ellis.

Nearly 1,300 properties in the US are classified as distressed, representing a value of more than US$32 billion, according to Real Capital Analytics. That figure ticks up daily as more and more hotels buckle under the economic downturn, which has sapped travel demand.

‘At some point, it’s simple math,’ said Dan Fasulo, head of research at Real Capital. ‘If your income from the property (is cut) by half, there’s not enough money to go around to pay the bank, to pay your staff, to pay your suppliers.’

Hotel deals in the US have been few and far between in 2009 as buyers and sellers haggled over the worth of these properties. ‘There’s been a huge disconnect between bid and ask,’ Mr Lesser noted, adding that valuations are now not as far apart as they were 18 months ago. Many take this as a sign that transactions will pick up again in 2010.

The daily resetting of room rates means hotels are highly sensitive to fluctuations in the economy.

Daniel Vosotas, chief executive of Trans Inn Management, said his company had to revamp its hotels’ budgets at least four times this year to cope with volatile economic conditions.

‘We lease every 24 hours,’ Mr Vosotas said. ‘Our product is more perishable than fruit.’

This sensitivity, coupled with looming debt maturities coming due over the next three years, may bode badly for hotels scrambling to meet payments, but could spell opportunity for funds looking to buy.

‘In 2010, there will be a pick-up in transactions, not just in hotels, but in commercial real estate in general,’ said David Weymer, a managing principal at Noble Investment Group.

Noble has about US$200 million available in a fund dedicated to buying hotels.

Mr Weymer said the Atlanta-based firm has not closed on an acquisition in about 20 months, but he expects it will buy a property ‘fairly soon’.

‘It’s like being at the junior high dance waiting to see who goes on the dance floor first,’ Mr Weymer said. ‘In 2010, they’re going to start to see more couples get on the dance floor.’

This week, Stifel Nicolaus analyst Rod Petrik wrote that more than US$38 billion in opportunity funds stand at the sidelines looking to buy distressed assets. Of that sum, US$7.5 billion could be earmarked for buying hotels, he wrote.

Host Hotels & Resorts Inc said in October it was looking to buy hotels that might fit into its stable of top-tier properties. Pebblebrook Hotel Trust raised about US$350 million in an IPO this month to acquire distressed hotels.

But other funds are struggling to raise the cash to fund hotel acquisitions, suggesting there are mixed feelings about the pace and number of choice properties that could come up for sale in 2010.

Last week, another company vying to go public, Chesapeake Lodging Trust Corp, had to postpone its initial public offering indefinitely.

‘A lot of people are little bit hesitant to commit into a fund without knowing how long it’s going to take before you start acquiring assets,’ said Paul Novak, president of Bedrock Partners. Mr Novak is trying to put together a fund of US$200 million to US$250 million to buy hotels. He projects there will be some pick-up in hotel sales by spring.


Global property rout sends Tishman Speyer to earth


Source : Business Times – 22 Dec 2009

Unravelling billion-dollar purchases severely testing father and son CEO team

Rob Speyer showed little interest in his family’s real estate business until his father began talking about buying Manhattan’s Rockefeller Center.

It was 1995. Mr Speyer, then 26, was a reporter for the New York Daily News. His dad’s plans to purchase the art-deco complex for US$1.2 billion changed everything. He joined Tishman Speyer Properties LP, the firm co-founded in 1978 by his father, Jerry, and Robert Tishman.

Mr Speyer, now co-chief executive officer of Tishman Speyer, is getting another lesson, one on enduring the global commercial property rout. Tishman Speyer and BlackRock Realty LP’s US$5.4 billion purchase of New York’s Stuyvesant Town and Peter Cooper Village apartments is unravelling, testing the young Speyer and his father, a 30-year real estate veteran.

‘A default is expected’ on the complex, according to Fitch Ratings, which has estimated the property’s value at US$1.8 billion. The transaction is among at least four – including the US$13.6 billion purchase of Archstone-Smith Trust with Lehman Brothers Holdings Inc in October 2007 – that the company made as values rose and Jerry Speyer was giving his son increasing responsibility for running the company.

Tishman Speyer is in talks to overhaul debt on five downtown Chicago office buildings. Partnerships including the company have been sued for foreclosure on a 22.7 hectare California office park purchased with another parcel for US$200 million. And last Friday, Standard & Poor’s withdrew its credit rating on a group of Washington-area properties with debt payments that Tishman and its partners have been trying to restructure.

The Speyers are being hurt in part by US commercial real estate prices that have fallen 43 per cent since late 2007.

The fallout represents the biggest challenge for Rob Speyer since he became co-CEO with his father in June last year, said Lawrence Longua, director of the Reit Center at New York University’s Schack Institute of Real Estate.

Since 2001, Tishman Speyer has been the biggest US commercial real estate buyer after Blackstone Group LP, according to the New York research firm Real Capital Analytics. Rob Speyer is part of a multi-generational group of New Yorkers whose families made fortunes in real estate, including the Milsteins, Zeckendorfs and LeFraks. Jerry Speyer was named the world’s No. 1 developer in a 1998 New York Times article that referred to him as the anti-Donald Trump.

Rob Speyer’s first job in the business was in management and leasing at Tishman Speyer. He worked on revamping Rockefeller Center, the 6.2 million sq ft complex built by John D Rockefeller Jr in the 1930s as a show of faith in America during the Great Depression. Mr Speyer described himself as ‘the low man on the totem pole’ when he first joined the New York-based firm.

His first lease brought the luxury Reebok Sports Club to the centre, replacing a US passport office.

In 1998, Rob Speyer joined the company’s redevelopment unit and modernised 300 Park Ave, the Colgate-Palmolive Co headquarters Tishman Speyer bought for US$180 million, Jerry Speyer said. An appraisal last month valued the property at US$650 million, Jerry Speyer said.

Things have turned out differently elsewhere.

In Chicago, the company is trying to restructure debt on office properties it bought in 2007 for US$1.72 billion. The Federal Reserve Bank of New York oversees US$1.4 billion of loans made by Bear Stearns Cos.

In Los Angeles, KeyBank National Association sued to foreclose on the Playa Vista industrial, office and film production property that Tishman Speyer and Walton Street Capital LLC bought in 2007. The owners failed to repay US$154 million of debt on the complex due in July, KeyBank said in a complaint filed on Oct 20. Broker CB Richard Ellis Group Inc was hired to sell the property, according to manager Trigild Corp.

A foreclosure won’t affect any of Tishman Speyer’s other properties, spokesman Rick Matthews said in October.

In New York, the company is facing default on Stuyvesant Town and Peter Cooper Village, Manhattan’s biggest apartment complex. The property is a World War II-era, 32 ha development housing about 25,000 people. The US$3 billion in debt used to buy it was bundled with other commercial mortgages and sold as bonds.

Tishman Speyer is trying to win a forbearance agreement, according to a person familiar with the financing who declined to be identified because the talks are private. Such an accord would halt default proceedings and allow negotiations on a restructuring.

When Tishman Speyer and BlackRock Realty bought the 11,200-unit property in 2006, they planned to raise rents, evict illegal occupants and upgrade the complex with amenities including a gym, concierge service and new gardens.

Those plans were challenged by a recession, slackening demand for rentals and a legal victory for tenants who claimed some rent increases were illegal. Average rents for a two-bedroom Manhattan apartment fell 16 per cent after peaking in May 2007 at US$3,907, according to Gary Malin, president of property broker Citi-Habitats Inc.

Tishman Speyer has ceased signing new leases at the complex, Bud Perrone, a company spokesman, said. It reached a temporary agreement with tenants this month that will reduce some rents starting in January.

In the year after the purchase, Tishman Speyer filed ‘hundreds’ of non-renewal notices against rent-stabilised tenants, accusing them of having a residence elsewhere, according to Jack Lester, the attorney representing the Stuyvesant Town-Peter Cooper Tenants Association in a class- action lawsuit.

New York City rent stabilisation protects tenants of about one million apartments from sharp rent increases, according to the New York City Rent Guidelines Board. A unit remains stabilised as long as the rent is less than US$2,000 a month or the tenant’s income is less than US$175,000 for two consecutive years, according to the board’s website.

Since acquiring the property, Tishman Speyer served 1,062 non-renewal notices to Stuyvesant Town-Peter Cooper residents who own or reside in a second home, the company said. Those notices were backed by evidence that the home was their primary residence. The company has had a total of 10,595 expiring leases in that period. Tenants gave up their apartments in 45 per cent of cases resolved to date, the company said. Since March, 72 non-renewal notices have been served for the same issues.

Tishman Speyer’s losses will be limited to the US$112 million equity investment that the firm made in the complex, a person familiar with the structure of the deal said. The company has about US$2 billion in cash on its balance sheet, said the person.

Both Speyers said that they don’t think the purchase will hinder their standing or ability to buy and sell buildings.

Sitting side-by-side in a conference room at Bloomberg LP’s headquarters in Midtown Manhattan, Rob Speyer takes the lead in discussing Stuyvesant Town and his father sits silently for almost an hour.

It’s only when the subject of the firm’s reputation is raised that Jerry Speyer speaks. ‘Even in this really dreadful period that we’ve been through, we sold this incredible amount of real estate thanks to Rob’s foresight,’ he said.

‘I jotted down some specifics if you’re curious,’ the elder Speyer said, removing a folded paper from his suit pocket. It contained a handwritten list of well-timed property sales that his son arranged.

They include the sale of the New York Times Building in 2007 to Africa Israel Investments Ltd for US$525 million. Tishman Speyer bought it three years earlier for US$175 million. The company also sold 666 Fifth Ave to Kushner Cos. for US$1.8 billion in 2007. It was the highest price ever paid for a single US building at the time.

Jonathan Mechanic, chairman of the real estate practice at Fried Frank Harris Shriver & Jacobson LLP, said that Rob Speyer shouldn’t be blamed for deals that have lost value.

‘If I told you Lehman wouldn’t exist or Bear Stearns wouldn’t exist, you would have asked me if I was out of my mind,’ he said. ‘Tishman Speyer and Rob were part of that world, and they’re one of many that suffered.’

‘When you go back to the history of the deals he’s done and the profits he’s made for investors, you had years of tremendous returns,’ Mr Mechanic said.

No matter how the Stuyvesant Town transaction is judged, Rob Speyer will one day take over the company, Jerry Speyer said.

For now, they work together from seventh-floor offices linked by a conference room at 45 Rockefeller Plaza.


Geneva hit by housing constraints


Source : Business Times – 22 Dec 2009

London bankers seeking to move to Geneva face housing and other problems

Geneva, touted as a haven for London bankers facing heavier UK taxes, may lure fewer than predicted thanks to a housing shortage, crowded schools and a 44 per cent income-tax rate.

Barclays plc president Robert Diamond this month joined a chorus of financial leaders in arguing that the UK’s 50 per cent tax on bonuses would drive bankers away from London. The Swiss Private Bankers Association said the ‘arbitrary’ tax will boost the allure of Geneva, whose bankers oversee about 10 per cent of the world’s foreign-held private wealth.

‘It’s a joke, it’s lobbying,’ said Tim Dawson, an analyst at Geneva-based brokerage Helvea AG.

‘People are dreaming if they think the London investment banking world is going to move. There is more office space in Canary Wharf than in the whole of Switzerland,’ he said, referring to London’s second financial district.

Chancellor of the Exchequer Alistair Darling said this month that banks awarding discretionary bonuses of more than £25,000 (S$56,750) would have to pay a one-time levy of 50 per cent. That followed earlier decisions to boost the top tax rate to 50 per cent and rescind special breaks for residents whose tax home is outside the country.

That’s making the UK a ‘hostile environment’ for wealthy people and many are considering relocating to rival financial centers, said Caroline Garnham, a partner at London- based law firm Lawrence Graham LLP who advises on tax planning.

The numbers choosing Switzerland will be small, and banks with Swiss roots, such as Credit Suisse Group AG and UBS AG, will probably find it easiest to move workers, said Stefan Schuermann, an analyst at Zurich-based Vontobel Holding AG.

‘I don’t expect huge masses; there is going to be some inflow,’ Mr Schuermann said. ‘You don’t easily move just because of tax issues if you have a family.’

Those keen to settle in Geneva, a city of fewer than 200,000 on the doorstep of ski resorts such as Verbier, Chamonix and Megeve, will face housing constraints.

Just 92 detached houses were vacant throughout the canton, which includes suburbs and outlying villages, on June 1 as population growth outpaced expansion of the property market, according to figures from the canton’s statistic office. Geneva’s vacancy rate for all types of accommodation stood at 0.21 per cent, compared with 0.66 per cent in Zurich and 2.3 per cent in London.

The median price of a four-bedroom house in Geneva was 1.62 million Swiss francs ($1.57 million) in the third quarter. The average price of a property in Kensington and Chelsea, London’s most expensive borough, was £790,946 in October, according to Land Registry data.

‘The pressure on services might become an issue,’ said Glen Millar, a Geneva-based consultant at Kinetic Partners LLP, which says it is looking to relocate 15 hedge-fund firms to Switzerland from London after the UK announced a higher tax rate in April. ‘For that reason, arrivals may remain a trickle.’

More than 65,000 people, known as frontaliers, commute into Geneva from neighbouring France each day, according to cantonal figures, both for work and to pay less for housing.

At the International School of Geneva, where fees can total 28,000 francs (S$20,765) a year, applications for next September are almost double the number of likely vacancies, said admissions director John Douglas. The school, whose alumni include former Indian Prime Minister Indira Gandhi and retired US Army General Norman Schwarzkopf, plans to add 600 places by 2012.

‘It’s increasingly difficult to get places,’ Mr Douglas said. ‘It’s not just tax but location and quality of life. Hedge funds are part of the picture.’

And it isn’t just Geneva. Switzerland struggles to compete with the day-to-day attractions of London, a city whose population almost matches that of the whole country.

Switzerland ‘cannot match the force of attraction and integration of international melting pots like New York or London for hiring talent from all over the world,’ the Swiss Federal Council said in a Dec 16 report outlining strategies required to keep the country’s financial centers competitive.

While each Swiss canton sets its own tax rate, allowing local officials to negotiate individual tax deals with wealthy immigrants, those rules are coming under pressure. Zurich, Switzerland’s biggest city and the home of UBS and Credit Suisse, will abolish special tax privileges for foreign millionaires on Jan 1. The canton’s top rate of income tax is 40.3 per cent.

‘Some of the German-speaking cantons around Zurich are able to offer tax rates that never exceed 20 per cent, but people don’t want to move there, they prefer the lifestyle around Geneva,’ said Thierry Boitelle, a partner specialising in tax at law firm Altenburger. ‘From a tax point of view it doesn’t make sense to locate 100 people here.’

Altenburger advises clients to relocate only those functions that ‘add value,’ while leaving back office and administration jobs in cheaper locations.

With Swiss firms overseeing a quarter of the world’s offshore private wealth, it may make sense for private equity and hedge fund managers to move to Switzerland, said Millar at Kinetic.

BlueCrest Capital Management Ltd, a London-based hedge fund firm that oversees about US$15.4 billion, plans to open a Geneva office as increased taxes and regulation make London less attractive, a person familiar with the situation said last month. It follows Brevan Howard Asset Management LLP, Europe’s largest hedge fund manager, which said in September it may open an office in Switzerland.

The country has added 10 to 20 single-manager hedge funds over the past two years, according to the Swiss Funds Association. Switzerland’s 136 hedge funds managed US$17.3 billion at the end of June, compared with 828 overseeing US$263.2 billion in the UK, according to Eurohedge.

‘Limiting the income of investment managers, in addition to taxing them a lot, might encourage them to come to Switzerland,’ said Frederique Bensahel, a partner at the law firm FBT who advises hedge funds that have moved to Geneva. ‘It’s true that housing is extremely difficult and expensive and the schools are very full, but when you have a good project you will find a way.’

Altenburger receives six to 10 relocation inquiries a month at its offices in Geneva and Zurich, with about two turning into actual moves, Boitelle said.

‘It’s not a wave but a steady stream,’ he said. ‘If you’re coming from London, Geneva is a small village.’


Mayfair Gardens up for collective sale


Source : Business Times – 22 Dec 2009

Bids expected to start at $210m for the Bukit Timah site

THE collective sale market is gradually warming up, with a residential site in Bukit Timah up for bidding.

CKS Property Consultants has launched Mayfair Gardens, in Rifle Range Road, for tender. The asking price starts from $210 million, with the winner expected to fork out a further $40 million as a development charge and to top up the site’s lease to 99 years.

This means a developer will have to pay at least $857 per sq ft per plot ratio (psf ppr).

The 124-unit Mayfair Gardens has a remaining lease of about 72 years. The land area is 208,475 sq ft, with a gross plot ratio of 1.4. A new development could yield a maximum gross floor area of around 292,000 sq ft – equal to about 200 apartments of 1,500 sq ft.

CKS expects Mayfair Gardens to generate ‘keen interest’, especially as there are ‘no other such sizeable private sites available in the vicinity’.

The site is next to other private residential projects and near Bukit Timah Plaza and Beauty World Plaza.

It is also not far from Raffles Girls’ Primary School and Nanyang Girls’ High School and will be within walking distance of the upcoming Blackmore MRT station.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak reckons there is a ‘fair chance’ the site will sell because of its location.

But he believes only major developers can afford it because the land alone will cost at least $250 million. He estimates the launch price would have to be above $1,300 psf.

Caveats show units in Mayfair Gardens changed hands at $695-$740 psf or $1.1-$1.33 million in August. At nearby Gardenvista, transaction prices ranged from $916-989 psf or $1.04-$1.12 million last month.

The tender for Mayfair Gardens closes on Jan 14, 2010, at 4pm. CKS had obtained consent from more than 80 per cent of the owners to proceed with the sale in March.

CKS was also behind the collective sale of Dragon Mansion early this month – the first such deal of the year. Roxy-Pacific picked up the site for $100.8 million or $863 psf ppr – less than the original asking price of $120 million or $1,020 psf ppr.

CKS investment manager Chia Mein Mein believes there will be demand for collective sale sites if prices are realistic.

Mr Mak expects to see more plots sold en bloc next year but says a lot depends on how the mid to high-end property segments perform.