Saturday, February 28, 2009

Government lowers development charge for properties by 4%-15%

Source : Channel NewsAsia - 27 Feb 2009

The government has lowered the redevelopment tax on non-landed residential property by 15 per cent on average – a more drastic cut than the 6 per cent it made half a year ago.

The biggest reductions affect higher-end properties in prime locations, including Marina Bay, Robertson Quay, River Valley, Orchard Road, Grange/Tanglin, Newton and Holland Road areas.

Some market watchers had been hoping for even deeper reductions, given the weak property market due to the current recession.

But property consultant Chesterton Suntec International said the 15 per cent drop is an accurate reflection of current land valuations.

Chesterton Suntec analyst Colin Tan said regular review of the development charge or DC rate is based on actual transaction values in the previous six months, and not on market sentiment.

He said the cut could help the slumping property market.

“Of course, we are just seeing the beginning of a drop so it will take a lot more, maybe the next DC rate cut, to ensure that it’s profitable now to move forward. Generally, the taxes do not act as an incentive or disincentive, it’s the market. But it lessens the obstacles,” said Mr Tan.

According to CB Richard Ellis, land values are expected to moderate in the course of this year. It said DC rates for non-landed residential use probably fell because of comparatively lower prices for new launches in the residential market in the last six months.

The DC rates for hotel and hospital properties fell by 10 per cent and business zone commercial use properties decreased by 4 per cent.

The development charge is levied when a property is redeveloped into a more valuable project, for example, after an en bloc sale.

The Singapore government adjusts the DC rate every six months to reflect the value of land here. The latest revision will take effect from March 1.


Renewing the urban landscape


Source : Straits Times - 28 Feb 2009

MORE than half the world lives in cities. According to the United Nations, the urban population is growing by an average of 1.6million people every 10 days. By 2030, two in three people will be city-dwellers.

Larger countries may still be able to afford the old model of urban sprawl, where the city boundary grows ever outwards.

In smaller countries like Singapore, however, evolving a city of the future will be very different.

When the Republic gained independence 44years ago, urban development focused on the country’s needs: public housing to address a housing shortage, and infrastructure catering to low-technology and labour-intensive industries.

As Singapore’s needs have evolved, so has the urban landscape.

The country has grown without choking on its own exhaust fumes, via measures such as limiting the car population and having an established and vigorously enforced environmental policy.

We are unique, and we need to develop our own holistic model and solutions for future sustainable urban development.

Sustainable construction refers to the adoption of building designs, construction methods and materials that are environmentally friendly.

It also means using materials and resources that have sustainable supplies.

The issue of sustainability came under the spotlight in 2007 when an unexpected disruption in the supply of sand and granite from Indonesia resulted in the prices of these materials tripling virtually overnight.

This is just one example of how over-dependence on imports of materials from overseas can put the construction industry in a stranglehold.

Research on sustainable development at institutions such as the National University of Singapore is ongoing.

A number of interesting projects are targeted at developing sustainable solutions to meet challenges unique to Singapore.

One project involves using microwave rays to increase the yield and quality of recycled materials.

This novel technique utilises microwave heating to separate the components of recycled concrete for reuse. Heating causes mortar, which sticks to the surface of granite particles, to peel off like the layers of an onion.

Such work aims to provide a sustainable supply of construction materials available locally, which can reduce an over-reliance on imported sand and aggregates, and temper the negative impact of any unexpected disruption in supply.

Another project funded by the National Development Ministry which is being worked on in conjunction with the Housing Board, is to design high-rise buildings which - like building blocks - can be disassembled and reused.

When en bloc fever reached a peak here last year, many older buildings were demolished to make way for new ones.

Unfortunately, there are no recyclable buildings here yet, so many were demolished even though they had plenty of service life left in them.

If they had been designed for disassembly, they could have been reincarnated as new buildings.

Currently, most of the recycled concrete aggregates from demolition debris have been used in land reclamation, roads, and in non-structural applications, such as in carparks and pavement slabs, as they cannot fully replace fresh stocks of aggregates used in constructing new structures.

Also, additional resources are needed to reuse them - they have to be sorted, then crushed, sieved and graded.

Reuse of precast concrete structural components in new buildings would actually take recycling a step further, by removing the need for these steps.

Premature demolition, which generates demolition waste for disposal, would be unnecessary, together with the need for fresh stocks of construction materials for the new building.

The Design for Disassembly (DfD) process involves the management of resources throughout the lifecycle of a building; from the extraction of raw materials, through manufacturing, design, construction and operation, to the eventual demolition.

The DfD building system takes full advantage of the flexibility, convertibility, addition and removal of future buildings.

With this concept in place, the next generation of buildings constructed in Singapore can be viewed as store houses of future building materials.

Spiralling construction costs are here to stay, due to increased global demand and the rising costs of construction materials and manpower.

With dwindling resources and an urgent need to preserve the environment, the concept of unlimited supplies of construction materials is no longer viable.

Stakeholders in the construction industry and members of the public must work together to develop a uniquely Singaporean model, so that future generations will also be able to live, work and play comfortably in Singapore.

The writer is deputy head (infrastructure and resources) at the National University of Singapore’s Department of Civil Engineering.


When en bloc fever reached a peak here last year, many older buildings were demolished to make way for new ones.


Tax cut will enhance value


Source : Straits Times - 28 Feb 2009

THE Government has responded to the weakening property market by slashing the charges developers pay when they enhance the value of a site by such things as building a bigger project on the land.The move to cut development charges, or DC as the fees are called, will give developers some relief but the effect will not be significant, given the weak market.

Dramatic reductions were made for non-landed homes - mainly private condominiums - with cuts of up to 30 per cent in prime areas and an average of 15 per cent islandwide.

Rates for this segment were also cut in the previous six-monthly review last September, when they were reduced by an average of 6 per cent. The rates for other property segments were largely unchanged then.

In the latest review, on average, cuts of around 10 per cent were made for development charges in the hotel and hospital sector and about 4 per cent for commercial property projects.

The National Development Ministry sets the rates every March and September, taking into account market values, in consultation with the Chief Valuer. The new rates apply from tomorrow.

While the cuts mean developers will save on developing sites, the impact will be muted.

The savings are not enough to warrant any rush by developers to reinitiate collective sales or change their development plans, said Jones Lang LaSalle’s local director and head of research, South-east Asia, Dr Chua Yang Liang.

The lower DC for commercial sites would also have little impact in the next six months as developers will be concentrating on office and retail projects already under construction rather than acquiring land, said CBRE Research’s executive director, Mr Li Hiaw Ho.

The biggest cuts in the non-landed homes segment are in areas with luxury residential projects that have seen the greatest price correction over the past six months, said Jones Lang LaSalle.

Areas in District 11 and the Marina Bay vicinity have seen prices plunge around 20 per cent, it said.

‘While transactions have been few and far between in the light of the present poor market sentiment, it is widely understood that land values have become depressed and will start to moderate during the course of this year,’ said Mr Li.

The comparatively lower prices for new residential launches in the past six months were probably the main reason for the cuts in DC for non-landed residential use, he said.

In the commercial use segment, the core central business areas of Raffles Place, Marina Bay and Marina Centre saw DC cuts of 15 per cent to 16.7 per cent, said CBRE.

In the Orchard Road and surrounding areas, the DC has fallen by around 15 per cent to 17.6 per cent. However, islandwide, the average cut is only 4 per cent.

Charges for the hotel and hospital use segment have been cut by 7 per cent to 11 per cent. There were no cuts six months ago. The current cut was expected, due to the likely fall in demand for hotel rooms, given the drop in tourism, said Mr Li.

Two property segments have had no changes to their DC - industrial land and landed homes - but they are unlikely to remain untouched for long.

Knight Frank’s director of research and consultancy, Mr Nicholas Mak, said the DC for the landed homes and industrial segments are ‘very likely to come down’ the next round.

Further DC cuts are also expected in the non-landed homes, commercial and hotel sectors, he said.


Hotel occupancy plunges to 60%


Source : Straits Times - 28 Feb 2009

HOTELS bore the brunt of the impact from a steep slide in tourist arrivals last month, with average occupancy tumbling to the 60 per cent mark - the lowest level since the 2003 Sars outbreak.

Average hotel room rates, which had been on the uptrend for the past two years, also took a beating, and are now at levels not seen since 2007.

The cause of the fallout: A 12.9 per cent drop in tourist arrivals for January compared to the same month last year.

In all, Singapore saw just 771,000 visitors last month, compared to 883,000 in January last year.

Visitor numbers from all but four of Singapore’s top 15 markets fell, with Indonesia - the Republic’s best ‘customer’ - dropping 24 per cent.

The only ones that grew were Vietnam, Hong Kong, the Philippines and Germany.

The Singapore Tourism Board (STB) said the overall decrease was due to the ‘impact of the current global economic slowdown on consumer sentiments and discretionary spending’.

January’s fall was swift but not unexpected. Though Singapore had been bracing itself for the impact of the global recession on tourism, numbers had been falling since last June, sparked by what STB referred to as ‘challenging global economic environment’.

As a result, expectations for a record-breaking year fell meekly by the wayside in July, and last month, the STB predicted that the number of visitors to Singapore this year will drop to 2005 and 2006 levels of between nine million and 9.5 million.

Hoteliers interviewed said that things might get worse.

Grand Mercure Roxy’s general manager Kevin Bossino said the real test will come in March and April, when business travel usually picks up.

He said corporate travellers curtail their travelling during festive periods like Chinese New Year, which fell in January this year.

But, once the festivities are over and people go back to work, they are expected to travel to make deals and attend meetings and conferences.

If the numbers stay bad this month and next, he said, they will point to a really bad year ahead.

Established hotels are also looking over their shoulders at new kids on the block, who are expected to make competition for the shrinking market even more cut-throat.

Rendezvous Hotel general manager Kellvin Ong is taking no chances. He has lowered rates from $200 to $190.

Such moves may mean that a price war might break out among hotels, said Shatec Institutes chief executive officer Steven Chua.

However, he advises against manic price-cutting as this could compromise service levels.

Instead, his advice for hoteliers is to focus more on adding value for the same price.

The knock-on effects of tourism’s downward spiral are being felt elsewhere too, such as at attractions, restaurants and nightspots.

Mr James Heng, chief executive officer of Singapore Duck & Hippo Leisure Group, said business has dropped by 30 per cent since financial markets began going south last September.

He said: ‘For the first time since our inception, we are not expecting to turn in good numbers.’


Hotel rates up, occupancy down during F1 period


Source : Business Times - 28 Feb 2009

IT’S finally the moment of truth.

Data reveals that local hotel room rates surged 150.4 per cent on average to $616 during the 2008 Formula One (F1) race period of Sept 24-28. But at 75 per cent for the five-day period, occupancy was six percentage points lower than the overall average occupancy rate (AOR) for 2008.

Revenue per available room (Revpar) came in 132.3 per cent higher at $462, compared to overall Revpar for 2008. The average length of stay recorded by foreign visitors was more than five days, according to figures released yesterday by the Singapore Tourism Board (STB).

Some $168 million was chalked up in incremental tourism receipts - significantly higher than the $100 million projected initially - as over 100,000 spectators attended the race, of which some 40 per cent were tourists. The Singapore leg was watched by over 110 million viewers worldwide.

And given the ailing tourism industry, the F1 hotel levy - which required trackside and non-trackside hotels to fork out 30 and 20 per cent of room revenue respectively during the 2008 race period - is in the final stages of review. An announcement is expected soon.

Last year, hotels hiked room rates sharply for the race period and some also stipulated a minimum number of nights, which could explain the occupancy rate of 75 per cent.

While many hotels later slashed rates as tourists seemed unwilling to pay such steep prices, the inflated room rates may have kept some tourists - F1 and non-F1 fans alike - at bay.

Meanwhile, January tourism figures continued the downward slide in a testament to the weakening global economy.

Despite the Chinese New Year holidays, visitor arrivals for the month were down 12.9 per cent year-on-year to 771,000 as travel worldwide continues to wane.

Indonesia, China, Australia, India as well as Malaysia accounted for about half of all tourist arrivals during the month. However, tourist numbers from Vietnam were 53.6 per cent higher year-on-year, thanks to air travel promotions as well as the Chinese New Year holidays.

Singapore gazetted hotels pulled in $124 million in room revenue, a staggering 29.9 per cent less than the corresponding month in 2008.

Average room rates (ARR) for hotels were 11.7 per cent lower year-on-year at $209, while AOR dropped to 67 per cent, a 17.7 percentage point fall from January last year, and Revpar plummeted 30.2 per cent to $140.

Hotels in the mid-tier scored the highest AOR of 69 per cent, while economy-tier hotels saw the smallest decrease in ARR and Revpar year-on-year, with a 3.4 per cent dip and a 26.8 per cent decline respectively. Upscale hotels saw the biggest fall in ARR - down 13.7 per cent - while luxury hotels were down 12.6 per cent.


Standoff at the mall


Source : Business Times - 28 Feb 2009

IT is an old-fashioned stalemate in the retail industry. Retailers are saying that rent cuts of at least 20-30 per cent are an ‘absolute necessity’ for them to survive, while landlords - who have given no indications that they are looking at granting significant rent cuts - insist that they are doing all they can to help tenants.

On Thursday, the Singapore Retailers Association (SRA) said that 20,000 retail employees - or some 20 per cent of the workforce - could be retrenched unless store rents are slashed. Members’ income has dived 20-30 per cent in the past few months, said SRA, which represents close to 300 retailers. But occupancy costs, on the other hand, have climbed 50-80 per cent over the past three years.

A rent cut is needed for retailers to survive, said the industry body, adding that retail landlords don’t seem to understand the current plight retailers are facing.

But when contacted on Thursday and yesterday, landlords here said that they are doing what they can to help their tenants. Many of them have passed on the 40 per cent property tax rebates granted to them by the government to their tenants in full - although this works out to a less than 5 per cent drop in rents for most retailers.

Most of them also reiterated that they are working with tenants to find customised solutions. ‘A 20-30 per cent across-the-board rate cut isn’t needed for every retailer,’ said one landlord.

‘During this downturn, we recognise that not all retailers are affected equally and in the same way,’ echoed a spokesman for CapitaLand, Singapore’s largest retail landlord. ‘We continue to stay close to our retailers, work with them individually to better understand the specific issues that they are facing, so that we can customise a solution jointly with them.’

Other property landlords agree.

But SRA has said that the initiatives offered to date are inadequate as they do not address the main concern of the retailers - that of cost containment in these difficult times. Likewise, a retailer said that only a sharp cut in retail rents can immediately reduce cost and improve cash flow, which are the two main problems that retailers are facing. ‘Other forms of support by landlords to generate more traffic and sales will not be effective,’ he said.

Another issue is the rent increases that landlords are proposing when negotiations for renewal of leases begin. As one retailer put it: ‘Is now really the time for it?’

Retailers told BT that landlords are asking for as much as 20-30 per cent more when negotiations begin. When talks for lease renewal for the Mothercare store at VivoCity began, the mall asked for 22 per cent more, said Pang Kim Hin, chairman of the baby goods retailer. The landlord did say that rent is ‘negotiable’, but even then, a 22 per cent starting point is ‘too high’, Mr Pang said. ‘Even if it is just posturing, you have to be reasonable with the posturing.’

VivoCity is owned by Mapletree Investments (which is fully owned by Temasek Holdings) and managed by CapitaLand.

Sales at his VivoCity outlet have fallen by about 30 per cent since Chinese New Year, Mr Pang said.


MND slashes development charge rates


Source : Business Times - 28 Feb 2009

THE government yesterday announced bigger cuts to development charge (DC) rates, which are payable for enhancing the use of some sites, compared with the previous revision six months earlier. It used lower condo/apartment prices and weaker office rentals as evidence, given the dearth of land transactions.

The average DC rate was chopped 15 per cent for non-landed residential use, 10 per cent for hotel and hospital use and 4 per cent for commercial use. The average rate was also trimmed 4 per cent for business zone commercial use (which covers the warehouse retail scheme).

However, the Ministry of National Development (MND) left completely untouched DC rates islandwide for landed residential and industrial uses, and for this reason, some market watchers described yesterday’s adjustment as ‘conservative’.

‘More corrections are expected in future DC rate revisions in light of the economic climate and sentiments,’ said Chua Yang Liang, Jones Lang LaSalle (JLL) head of research (SE Asia).

Colliers International director Tay Huey Ying too reckons that ‘we could see adjustments made to those areas which did not see corrections this round’.

She was also disappointed that the government had stuck to its DC calculation formula, which creams off 70 per cent of the enhancement in land value, instead of reverting to its pre-July 2007 formula of 50 per cent.

MND reviews DC rates in consultation with the Chief Valuer, taking into account current property market values.

A spokeswoman for the Chief Valuer said: ‘As there was very little land sales evidence during the past half-year, we had to look at other indications of property values such as sales of apartments/condos and office rents, and use the residual valuation method to derive the land values - in the case of non-landed residential and commercial use DC rates.’

In trimming hotel use DC rates, the Chief Valuer looked at the price fetched for a hotel site at Kallang/Jellicoe roads at a state tender that closed in October last year, which was about 10 per cent lower than the land value implied by the Sept 1, 2008 DC rate for the location, and proposed an average 10 per cent islandwide drop in the DC rate for hotel use, she added.

DC is payable to the state in exchange for the rights to enhance the use of some sites or to build bigger projects on them. DC rates are revised twice yearly, on March 1 and Sept 1. They are specified according to use groups (such as landed residential, non-landed residential and commercial) across 118 geographical sectors or locations across Singapore.

For yesterday’s revision, which takes effect tomorrow, non-landed residential DC rates fell in 115 geographical sectors by between 7.1 per cent and 30 per cent. The Ardmore/Draycott, Leonie Hill and Oxley areas saw 30 per cent reductions, followed by Sentosa, with a 29.4 per cent decrease, according to JLL’s analysis.

Noting the big corrections in Districts 9 and 10 and Sentosa, JLL said that these are the areas with luxury residential projects that have also seen the greatest price correction over the past six months.

Hotel DC rates were slashed across all 118 sectors. The falls ranged from 7.1 to 11.1 per cent.

However, commercial DC rates were cut in just 48 sectors by between 4 and 17.6 per cent, with the largest reduction in the area around Somerset MRT Station. Office strongholds in the CBD - including Raffles Place/Golden Shoe, Marina Centre, Marina Bay and Fullerton Road - all saw commercial use DC rates ease 16.7 per cent.

Colliers’ Ms Tay wondered why commercial DC rates were not cut islandwide, unlike the case for hotel use. ‘That’s not very balanced.’

She also said that the government was being conservative in not trimming DC rates for industrial use at all, despite the fact that JTC Corp has revised downwards its land rent and land premium since the start of the year.

DC rates are tracked in property circles as they reflect land values. However, the latest DC revision is not expected to have much market impact as developers are unlikely to have much appetite for buying sites in the near future.

Says JLL’s Dr Chua: ‘Despite the large revisions to non-landed residential DC rates, there’s unlikely to be a sudden rush by developers to reinitiate en bloc deals or change their development plans.

‘Our market understanding is that most developers had locked away the earlier DC rates when they made their planning applications to capitalise on the exemption of bay windows and planter boxes from gross floor area calculation prior to rescission of policy on Dec 31, 2008. The savings in DC rates is not sufficient to warrant such a move.’

Colliers’ Ms Tay said yesterday’s revisions indicate that ‘the government has recognised the market has taken a turn for the worse, but it probably took the approach of erring on the side of caution’.

During the last DC rate revision effective Sept 1, 2008, MND left DC rates largely unchanged, except for an average 6.3 per cent cut for non-landed residential use.

At the time, property consultants said that there may not be sufficient evidence yet of declines in property values, and that rates could be cut at the next revision if stronger evidence emerges of falling values.

The last revision also saw MND change boundaries for eight sectors in three precincts - the Race Course Road area, Jurong Lakeside area and Pulau Brani.

Yesterday’s revision saw no change to sector boundaries. However, some industry observers reckon that changes could be on the cards in future for locations in the vicinity of new MRT stations opening this year and next.


MND slashes development charge rates


Source : Business Times - 28 Feb 2009

THE government yesterday announced bigger cuts to development charge (DC) rates, which are payable for enhancing the use of some sites, compared with the previous revision six months earlier. It used lower condo/apartment prices and weaker office rentals as evidence, given the dearth of land transactions.

The average DC rate was chopped 15 per cent for non-landed residential use, 10 per cent for hotel and hospital use and 4 per cent for commercial use. The average rate was also trimmed 4 per cent for business zone commercial use (which covers the warehouse retail scheme).

However, the Ministry of National Development (MND) left completely untouched DC rates islandwide for landed residential and industrial uses, and for this reason, some market watchers described yesterday’s adjustment as ‘conservative’.

‘More corrections are expected in future DC rate revisions in light of the economic climate and sentiments,’ said Chua Yang Liang, Jones Lang LaSalle (JLL) head of research (SE Asia).

Colliers International director Tay Huey Ying too reckons that ‘we could see adjustments made to those areas which did not see corrections this round’.

She was also disappointed that the government had stuck to its DC calculation formula, which creams off 70 per cent of the enhancement in land value, instead of reverting to its pre-July 2007 formula of 50 per cent.

MND reviews DC rates in consultation with the Chief Valuer, taking into account current property market values.

A spokeswoman for the Chief Valuer said: ‘As there was very little land sales evidence during the past half-year, we had to look at other indications of property values such as sales of apartments/condos and office rents, and use the residual valuation method to derive the land values - in the case of non-landed residential and commercial use DC rates.’

In trimming hotel use DC rates, the Chief Valuer looked at the price fetched for a hotel site at Kallang/Jellicoe roads at a state tender that closed in October last year, which was about 10 per cent lower than the land value implied by the Sept 1, 2008 DC rate for the location, and proposed an average 10 per cent islandwide drop in the DC rate for hotel use, she added.

DC is payable to the state in exchange for the rights to enhance the use of some sites or to build bigger projects on them. DC rates are revised twice yearly, on March 1 and Sept 1. They are specified according to use groups (such as landed residential, non-landed residential and commercial) across 118 geographical sectors or locations across Singapore.

For yesterday’s revision, which takes effect tomorrow, non-landed residential DC rates fell in 115 geographical sectors by between 7.1 per cent and 30 per cent. The Ardmore/Draycott, Leonie Hill and Oxley areas saw 30 per cent reductions, followed by Sentosa, with a 29.4 per cent decrease, according to JLL’s analysis.

Noting the big corrections in Districts 9 and 10 and Sentosa, JLL said that these are the areas with luxury residential projects that have also seen the greatest price correction over the past six months.

Hotel DC rates were slashed across all 118 sectors. The falls ranged from 7.1 to 11.1 per cent.

However, commercial DC rates were cut in just 48 sectors by between 4 and 17.6 per cent, with the largest reduction in the area around Somerset MRT Station. Office strongholds in the CBD - including Raffles Place/Golden Shoe, Marina Centre, Marina Bay and Fullerton Road - all saw commercial use DC rates ease 16.7 per cent.

Colliers’ Ms Tay wondered why commercial DC rates were not cut islandwide, unlike the case for hotel use. ‘That’s not very balanced.’

She also said that the government was being conservative in not trimming DC rates for industrial use at all, despite the fact that JTC Corp has revised downwards its land rent and land premium since the start of the year.

DC rates are tracked in property circles as they reflect land values. However, the latest DC revision is not expected to have much market impact as developers are unlikely to have much appetite for buying sites in the near future.

Says JLL’s Dr Chua: ‘Despite the large revisions to non-landed residential DC rates, there’s unlikely to be a sudden rush by developers to reinitiate en bloc deals or change their development plans.

‘Our market understanding is that most developers had locked away the earlier DC rates when they made their planning applications to capitalise on the exemption of bay windows and planter boxes from gross floor area calculation prior to rescission of policy on Dec 31, 2008. The savings in DC rates is not sufficient to warrant such a move.’

Colliers’ Ms Tay said yesterday’s revisions indicate that ‘the government has recognised the market has taken a turn for the worse, but it probably took the approach of erring on the side of caution’.

During the last DC rate revision effective Sept 1, 2008, MND left DC rates largely unchanged, except for an average 6.3 per cent cut for non-landed residential use.

At the time, property consultants said that there may not be sufficient evidence yet of declines in property values, and that rates could be cut at the next revision if stronger evidence emerges of falling values.

The last revision also saw MND change boundaries for eight sectors in three precincts - the Race Course Road area, Jurong Lakeside area and Pulau Brani.

Yesterday’s revision saw no change to sector boundaries. However, some industry observers reckon that changes could be on the cards in future for locations in the vicinity of new MRT stations opening this year and next.


Friday, February 27, 2009

En bloc sales partly to blame for ‘vanishing’ Singapore


Source : Straits Times - 27 Feb 2009

I REFER to Mr Vincent Paul Carthigasu’s lament on Tuesday, ‘Where did you go, my Singapore of old?’, about the eradication of ‘almost everything’ in Singapore in the name of ‘change and development’. He believes ‘Singapore has lost much of its soul’ in its ongoing policy of redevelopment.

Allow me to go a little further in asserting that for many, Singapore has indeed lost its soul to ‘progress’ in recent years. To thousands of Singaporeans who have been uprooted from their condominiums and other strata-titled properties, many of which are freehold, their grief at losing their homes against their will via collective sales, and the consequent trauma of relocating to new homes, are unnerving.

Concomitant is the acrimony of court cases and blatant vandalism, which may threaten the ‘kampung spirit’ built up so arduously over the years.

Perhaps the authorities, during this lull in the property market, should revise the rules on future collective sales. One area they should look into is the physical condition of a development, regardless of its age. It is heart-rending to see an ‘old’ development in good condition demolished to make way for a new development.

Han Soon Juan


A plea for survival


Source : Today - 27 Feb 2009

Association calls for landlords to cut rents by 20-30 per cent, with 20,000 jobs on the line

WITH sales plunging by 20 to 30 per cent and profit margins “almost negligible if not negative”, 20,000 jobs - that’s a fifth of retail employees - are at stake as stores face the real prospect of folding.

This is red alert sounded by the Singapore Retailers Association (SRA) after an emergency meeting on Wednesday of council members and leading retail figures. In a strong statement yesterday, it called on landlords to give rental rebates of “at least 20 to 30 per cent” immediately - the “bare minimum” to ensure survival.

Even as occupancy costs have risen 50 to 80 per cent over the last three years, landlords “have proven slow to acknowledge or respond to the current downturn”, the SRA said. This, even after the Government announced a hefty property tax rebate for landlords on Jan 22.

Except for Government landlords, SRA’s executive director Ms Lau Chuen Wei told Today, the rest “are currently not willing to budge, and some even have the audacity to increase their rental rates.”

She declined to name names, only adding that SRA has written to “all landlords and are seeking audience with them one by one”.

While some mall landlords, like CapitaLand, Mapletree and Lend Lease, have announced they would pass on the full 40-per-cent property tax rebate to tenants - it would amount to 40 cents out of every $10 in rent - Ms Lau said some retailers feel this is “too little too late”.

“What the retailers need urgently is a reduction off the base rent, as this is what’s cutting very sharply into their bottom line,” she said.

One tenant at Square 2 in Novena told Today that when he renewed his lease last month, he got a 5-per-cent rental cut, though he had asked for a 10-to-20 per cent reduction. There was no mention of rebates or other form of help.

“At Square 2, more shops are closing down than tenants are moving in. On the ground floor alone, there are five or six units vacant at the moment,” he said.

Mr Lee Han Fong, director of cafe chain Secret Recipe which has 14 outlets here, said when the lease for a town outlet was renewed in end-2008, the rent was raised 15 per cent.

But “some landlords have recognised the (bad economic) situation and have been active in stepping up to help tenants, mostly through marketing,” Mr Lee said.

“In our nine years of business, this is the only time … we’re really worried because sales have been affected. We‚re more worried about the middle and end of the year, when consumers feel more effects of the downturn”.

The chain will ask for lower rentals when other outlet leases come up for renegotiation this year.

SUBHD: What landlords are doing: Just lip service?

A report yesterday by property consultancy CBRE showed, in the fourth quarter, prime Orchard Road retail rents slipped 1.9 per cent on-quarter, the first drop since 2003, even as retail sales volume declined by 5.9 per cent in the same period according to latest government figures.

When contacted, Maple Tree - which owns Vivo City and HarbourFront Centre Retail - said it is doing its best to help tenants survive the slowdown.

Other than passing on the full benefits of the property tax rebate, “we are also looking into individual cases where our tenants are facing short-term cash flow problems,” said Ms Shae Hung Yee, vice-president of corporate communications.

Specific assistance measures include restructuring the leases. “We feel this focused approach would better channel our limited financial resources to cases where help is most needed, rather than an across-the-board rental rebate.”

A spokesperson from Frasers Centrepoint Limited - which runs The Centrepoint, Causeway Point and Northpoint among others - said it will also pass on the tax rebate benefits and is now “working out the details”.

CapitaLand, the first to announce it would pass on the rebate, adds that it will continue to “stay close to our retailers, work with them individually to better understand the specific issues that they are facing so that we can customise a solution jointly with them”. It manages Tampines Mall, Junction 8 and Hougang Plaza, among others.

The other mall landlords contacted, Far East Organization and City Development Limited, did not respond to TODAY‚s queries as of press time.

SRA‚s Ms Lau, however, is sceptical. “So far, it‚s only lip-service and PR gestures on the part of the landlords. They don‚t seem to understand the plight of the retail tenants,” she told TODAY.

Sales are there yes, but slowing, and “anecdotal evidence” suggests many retailers‚ topline figures are shrinking. Should stores fold, this would have a knock-on impact on industries that feed off the health of the retail sector, such as media, F&B and advertising, she noted.

“This is the reason the SRA is indicating that retailers really need a reprieve of base rent reductions by at least 20 to 50 per cent, at least for a temporary period, until things look up.”


It’s not the time to buy

Source : Today - 27 Feb 2009

End 09, early next year could be better, says CDL chief

CITY Development Limited (CDL) believes it is too early for it to start snapping up property in the downturn.

“The buyer-seller price gap is too wide still, so it’s not time to buy. The end of the year, early next year could be better,” said City Developments Limited’s (CDL) executive chairman Kwek Leng Beng at the group’s annual results briefing yesterday. Asset prices, he said, have not fallen to levels that are attractive enough.

CDL yesterday announced an after-tax profit of $580.9 million, almost a 20-per-cent dip from a year earlier. Even so, that was the group’s second-highest earnings since inception.

It attributed the fall partly to a 5.2-per-cent decline in revenue and lower contribution from its hotel operations under London-listed Millennium and Copthorne Hotels (M&C). This was mostly due to currency conversion, given the Singapore dollar’s recent strength against the British pound.

“Not unexpectedly, 2008 was a challenging year for the Singapore property market with downward pressure on both transaction volumes and sale prices after blistering performance in the previous two years, weighed down by global financial woes,” the company said.

“The group is aware of the many challenges that lie ahead.”

CDL said its balance sheet remained healthy, and it was not planning any rights issue to raise capital. It expects to stay profitable this year.

In the coming year, CDL said it would “exercise prudence” on expenses. It would “keep staff as much as (it) can” in Singapore.

CDL’s net borrowings stood at $3.4 billion, or 32 per cent of assets if fair value gains are taken into account, said chief financial officer Goh Ann Nee.

In the first half of this year, it will launch 60 units at the 724-unit Livia, 100 units at the 336-unit The Arte at Thomson, and 100 units of the 228-unit The Quayside Isle @ Sentosa Cove.

The group has 142 unsold units from projects previously launched projects, with less than 10 per cent of those high-end.

CDL is holding back its South Beach project. It added that based on a recent valuation for the year ended Dec 31, there was no impairment required for the development.

Mr Kwek refuted rumours about consortium partners pulling out of the project.

The company is planning to issue the second tranche of Islamic Sukuk in the first quarter of this year. It is likely to be three or four times larger than the first one. In January, CDL issued $100 million worth of notes under its $1-billion Islamic note programme.


S’pore is tops in industrial competitiveness


Source : Business Times - 27 Feb 2009

Ireland and Japan came in second and third, according to a UN survey

SINGAPORE came out top in terms of industrial competitiveness, a United Nations (UN) survey has found.

The 2009 Industrial Development Report, which ranked 122 markets, said that the city-state took pole position in 2005 and 2000, based on an index that assesses national industrial performance across a five-year period.

Ireland and Japan came in second and third, while Switzerland, Sweden and Germany followed behind.

Developed by the UN Industrial Development Organisation (UNIDO), the competitive industrial performance (CIP) index considers factors such as industrial capacity, manufactured export capacity, industrialisation intensity and export quality.

In the report, UNIDO pointed out that the United States was the only mature industrial power that saw a deterioration in its relative position. This resulted from the improved performance of South Korea and Taiwan.

Among the top 60 countries, the largest improvements were seen in Qatar (up 23 places), Cyprus (18), Iceland (13) and Slovenia (10).

Among the bottom 60, several African countries, including Mozambique, Senegal and Cote d’Ivoire, improved their rankings considerably - by 21, 18 and 13 places, respectively.

Manufactured exports in those three countries grew much faster than manufacturing value added (MVA), while the share of primary exports in total exports declined sharply.

East Asia leads the developing world in the CIP index, where the four mature ‘tigers’ continue to dominate the rankings.

However, Hong Kong has dropped in industrial competitiveness, while China continues its impressive performance and is in 26th position in the 2005 ranking.

Sub-Saharan Africa lagged behind all other regions. Most of the region’s countries cluster at the bottom of the CIP index.

Latin America continued to lose ground to East Asia. The best three performers in the region - Mexico, Costa Rica and Brazil - lost several positions in the rankings.

South Asia does not perform well on the CIP measure. India leads the CIP in the region but lost three positions in the global rankings, despite its strong information technology and electronics sectors.

In the Middle East and North Africa, Tunisia and Morocco continued to improve in industrial competitiveness.

They have emerged as small dynamic economies and are able to compete in global markets not only in basic manufacturing, but also in sophisticated products.


Those 224 studio flats …

Source : Today - 27 Feb 2009

The new build-to-order (BTO) flats at Champions Court in Woodlands caught their eye, but the young couple decided to stick with their application for a four-room flat at Sengkang even though prices were similar.

Why? Bride-to-be Izyanty Asmary, 23, said she was “not comfortable” with having studio apartments — targetted for senior Singaporeans — in the same residence, and the Woodlands flats appeared to be more cramped.

For the first time, studio apartments, comprising 224 of the 815 units, will be up for sale in Woodlands. The apartments come with elderly-friendly features such as grab bars and non-slip flooring.

Member of Parliament Dr Lim Wee Kiak (Sembawang) pointed out that “different demographics would make the community more interesting. It also encourages community to help one another.”

Families can get a bigger unit, while the older folks live in the studio apartment, he noted, they could help take care of young children.

There are 30 units of 37-sq metre studio apartments priced between $57,000 to $64,000, and 164 units of 47-sq metre apartments priced from $71,000 to $80,000 up for sale.


Will it be a Champion?

Source : Today - 27 Feb 2009

Mixed views on whether pricing is attractive to buyers

THE first batch of HDB flats for this year has been launched, but do they reflect homebuyers‚ budgets in this downturn? And are their prices an indication of what to expect from other projects later this year?

Champion Court, at the junction of Champions Way and Woodlands Avenue 1, was launched yesterday under the Build-To-Order (BTO) system, where projects are only built when a certain level of demand is reached.

The 815 new flats include the first studio apartments in Woodlands and are priced below their equivalent market prices to ensure affordability, said the Housing and Development Board (HDB).

There are 182 three-room flats priced from $118,000 to $142,000, and 224 four-room flats with prices ranging from $194,000 to $227,000. Five-room flats - of which there are 185 - are from $247,000 to $296,000. The others are smaller studio apartments and three-room units.

Member of Parliament Lim Wee Kiak (Sembawang) who raised the issue of affordable housing in Parliament recently, said Singaporeans could be paying under $100,000 for a three-room flat if they make use of Government grants.

PropNex CEO Mohamed Ismail said he expects the project to be “five times oversubscribed” since prices are up to 40 per cent lower than resale flats in the area.

But Chesterton International‚s head of consultancy and research Colin Tan does not expect response to be good. Besides the less-than-ideal location, prices are not attractive enough for the smaller-sized apartments, he said.

Mr Tan said HDB should reconsider pricing some of its new flats “in far-flung suburban locations such as Woodlands” by about $20,000 to $30,000 lower.

But Dennis Wee Group‚s vice-president Chris Koh expects prices to remain constant since HDB should have “factored in” the long recession and “priced accordingly.”

HDB will launch some 3,000 BTO flats in the first half of this year, mostly in Ponggol.

Out of these, 1,400 will be smaller studio apartments, two- and three-room flats. It will also continue to monitor demand in other towns.

Applications can be submitted online at www.hdb.gov.sg until March 11.


Ibis on Bencoolen opens; hotels upbeat

Source : Straits Times - 27 Feb 2009

IT IS not the best of times, but the first of 10 new hotels to come up in Singapore this year threw open its doors in a grand official opening ceremony yesterday.

Hundreds of guests turned up for The Ibis on Bencoolen’s launch event, and were feted with champagne and local delicacies such as chilli crab, bak kut teh and char kway teow before a ceremony in which the hotel’s main signpost was turned on.

The 538-room, three-star hotel - and the other nine which will open here this year - were planned for in better times, when Singapore was setting tourism arrival records at breakneck pace, and fears were looming of a room crunch.

Those fears never materialised: Just 12 months ago, hotel occupancy was in the high 80 per cent to 90 per cent range. It has now dropped to the high 70s to 80s range.

But despite the tourism downturn and recession, the hotels are all confident of doing well, and say they have drawn up strategies to cope.

The Ibis on Bencoolen, for instance, has struck pay dirt since its ’soft opening’ on Feb 12, and has been almost full since.

The hotel said it is depending on its international brand name and cheap rooms to make it a winner. The chain’s parent company, Accor Hospitality, has 4,000 hotels in 90 countries around the world.

The economy-tier hotel on Bencoolen Street was offering its rooms at an opening rate of $148 which is valid till May.

In fact, Mr Gerard Guillouet, Accor’s vice-president for Singapore, Indonesia and Malaysia, was upbeat enough yesterday to proclaim loudly: ‘If this hotel does not perform, no other hotel in Singapore will.’

He said Ibis will be able to tap on growing demand from corporate business travellers who are downgrading, as well as leisure travellers on a tight budget.

It is banking on a low introductory rate of $148 per night till May, as well as bundled deals like free Internet access in rooms, to attract guests.

So confident is the chain of doing well that it announced yesterday that it will develop another 241-room hotel on Balestier Road by 2011.

The heads of several other hotels opening this year are similarly optimistic, never mind the gloomy figures: Between nine million and 9.5 million visitors are expected in Singapore this year, a drop of between 6 per cent and 11 per cent over last year’s 10.1 million tourists.

Mr C. L. Ng, the managing director of home-grown firm Santa United, which will open a 74-room hotel in Bugis this year, said its plan to stimulate demand revolves around being flexible with room rates.

Even established hospitality chains are bullish.

As Ascott Hospitality’s chief executive officer Gerald Lee put it: ‘There is still business out there to be done. We just have to work harder and offer better value to get them.’

It was a point that was driven home by Senior Minister of State for Trade and Industry S. Iswaran.

Reminding the industry that it is going into the downturn from a position of strength, he said: ‘There continues to be demand for travel, it’s just a question of how to give travellers a good enough value proposition.’

Mr Iswaran, who spoke at the Ibis’ launch, also urged the sector to capitalise on Singapore’s strengths to ’seek out new opportunities and to build on our capabilities’, so that when the economic recovery comes, it can increase its market share.

There are currently some 39,000 hotel rooms here, according to the Singapore Tourism Board.

The new hotels will add over 4,000 rooms to the mix. This does not include new serviced apartments like Citadines at Mount Sophia.


Build-to-order flats in Woodlands for sale


Source : Straits Times - 27 Feb 2009

THE Housing Board yesterday launched its first build-to-order flat sale this year, with 815 flats in Woodlands up for grabs.

Called Champions Court, the batch of flats will include 224 studio apartments, which are being offered for the first time in Woodlands. There are also 182 three-room flats, 224 four-room flats and 185 five-room flats.

By its final update for the day, at 5pm yesterday, HDB had received 205 applications, mostly for the four- to five-room flats. There were 24 applications for studio apartments and 21 applications for three-room flats.

The monthly household income ceiling for purchasing a new three-room flat is $3,000. Those with gross monthly household incomes of not more than $8,000 can buy new four- to five-room flats, and studio apartments.

Champions Court is at the junction of Champions Way and Woodlands Avenue 1, near the Woodlands Regional Centre.

In its statement, HDB said the new flats are priced below their equivalent market prices to ensure that they are affordable to first-time buyers.

Indicative prices for the three-room flats range from $118,000 to $142,000; for the four-room flats, $194,000 to $227,000; and for the five-room flats, $247,000 to $296,000.

In the resale market, comparable three-room flats go for $200,000 to $209,000 while four-room units sell for $255,000 to $278,000, according to data provided by HDB.

Comparable five-room resale flats cost $304,000 to $345,000, it said. The 60 smaller studio apartments, which are 35 sq m in area, are priced from $57,000 to $64,000 while the 45 sq m studio units cost $71,000 to $80,000.

PropNex chief executive Mohd Ismail expects the project to be about five times over-subscribed.

‘There’s still strong demand for HDB flats in mature estates, particularly for four-room and five-room flats,’ he said.

The absolute prices for the bigger HDB flats in mature towns such as Woodlands are still more affordable than those in estates nearer town, said Mr Ismail.

The recession has already hit the cash amount that buyers have to pay over the valuation price, but the volume of resale deals is so far largely steady, he added.

The median cash-over-valuation for resale flats in Woodlands fell from $18,000 in the third quarter of last year to $15,000 in the fourth quarter.

Applications for Champions Court can be submitted online from now until March 11.


Leave my green spot alone

Source : Today - 27 Feb 2009

OVER the years, I have seen many green swathes of the forest which had once covered Singapore being replaced by new buildings, shopping centres and so on. The area where Nan Hua High School now stands used to be covered with tall, old trees, now an increasingly rare sight here. The green hill opposite Wheelock Place where many enjoyed having picnics has now made way for the new ION Orchard. One of the many green spots in my neighbourhood has made way for office buildings and factories.

It saddens me to see what remains of our natural environment gradually being replaced by all these buildings.

I count myself lucky to be living in one of the houses at the edge of a small area of jungle opposite Burgundy Park at Bukit Batok which has for now been left untouched. However, I was greatly saddened to see construction workers clearing the area a few days ago, hacking down the tall trees there.

I’m not sure why they‚re clearing the trees, but it seems to me that the jungle I have grown fond of will soon be replaced by more buildings.

What is even more heart-wrenching is that this patch of forest is home to a community of monkeys which I have often seen perched on the treetops. I have also caught glimpses of a giant monitor lizard wriggling its way back into one of the thick bushes on the jungle floor.I am greatly saddened that such wildlife will have their homes destroyed as the vegetation is cleared to make way for new developments.

Could the respective ministry or company overseeing that development refrain from destroying what remains of that forest patch? We are always talking about having to protect the environment, but how many of us, and how many companies and ministries here, really practise what we preach?

Although I agree that the construction of new office buildings and shopping centres to keep Singapore competitive is necessary, I do not think this should come at the expense of our natural environment. We should make it a point to preserve such green spots which are still in their natural state, without having to give them nature reserve status.

Koh Wen Hui Melissa Lois


HDB launches BTO project in Woodlands

Source : Business Times - 27 Feb 2009

THE Housing & Development Board (HDB) has launched its first 2009 build-to-order (BTO) project at Woodlands.

Champions Court, at the junction of Champions Way and Woodlands Avenue 1, has 815 units, comprising 224 studio apartments, 182 three-room, 224 four-room and 185 five-room flats.

About 50 per cent of the units are studio apartments and three-room flats, in line with the government’s commitment to provide a greater supply of smaller dwellings this year, HDB said.

The studio apartments will have elderly-friendly features such as grab bars and non-slip flooring.

Three-room flats cost from $118,000 to $142,000, four-room flats from $194,000 to $227,000 and five-room flats from $247,000 to $296,000.

The units are being offered at less than equivalent market prices so they are affordable for first-time buyers, HDB said.

Eugene Lim, associate director for ERA Asia-Pacific, said: ‘HDB seems to have deliberately priced the flats well below resale flats in the area.’

Likewise, PropNex chief executive Mohamed Ismail said that based on HDB’s Q4 2008 figures, flats at Champions Court are priced 27 to 40 per cent lower than resale flats in the area.

The project is expected to be well received and could be about five times over-subscribed, Mr Ismail said.

Both analysts also reckon the location will be a draw.

‘Woodlands is a mature estate,’ said Mr Ismail. ‘Besides being within walking distance of Woodlands Regional Centre and the MRT station, Champions Court is within 1km of a good number of schools. So I expect it to be quite popular.’


Thursday, February 26, 2009

Sleaze is not all bad


Source : Straits Times - 26 Feb 2009

It is said that location, location, location is everything when it comes to property. But what about your neighbour’s vocation?

Pity the residents of Joo Chiat. Long admired for its beautiful pre-war shophouses and rich Peranakan heritage, the middle-class residential district in the east is also associated with karaoke lounges, seedy bars and girls who prowl the streets making clear what goods they have to offer.

Besides the negative effect it has on the resale value of property, it’s easy to see why sleaze is bad. First and foremost, the victims are the girls themselves, most of whom hail from poorer neighbouring countries and who are driven into the sex trade out of desperation.

As for the residents, there is of course the worry that their children might be exposed to bad influences - never mind the danger posed by lecherous men and drunken fights, as well as detritus such as cigarette butts and broken bottles.

It is not just Joo Chiat that faces this problem. My own neighbourhood of Duxton Hill, a mix of Housing Board blocks, condominiums and shophouses, is a prime example. It is in an enviable location, right next to the central business district, near the good food of Chinatown and a stone’s throw from trendy areas such as Club Street.

Yet the stretch of shophouses along Tanjong Pagar Road is notorious for its sketchy establishments, identifiable by their neon signs, dark-tinted glass doors and five-foot-ways crowded with scantily clad Thai and Vietnamese girls.

Some friends have teased me about the dodginess of the area, but I personally find it exciting. In more enthusiastic moments, I have even dubbed my neighbourhood Singapore’s answer to the East Village in New York City.

Cheek by jowl in the terraced shophouses, the seedy bars co-exist with bridal studios, expensive restaurants, gay clubs and a Christian theology school - an eclectic mix that is a shining example of how disparate factions can live in harmony.

Admittedly, I am not a parent and thus do not have to worry about my young ones being traumatised by the flesh parade. But as a young person, I appreciate the fact that I do not live in yet another cookie-cutter housing estate or Stepford-like suburb.

In an interview this newspaper ran earlier this month, well-known Singaporean architect William Lim - of Golden Mile Complex and People’s Park Complex fame - said that Singapore was dull compared to cities such as Tokyo because of our tendency to plan districts from the top down, rather than letting them blossom naturally.

He praised neighbourhoods like Geylang and Little India, saying that these areas, which mixed eateries, indie stores, red-light districts and residential properties, have developed their own ‘chaotic order’ which gives them an authenticity missing from our manufactured hubs.

In this spirit, I see Duxton Hill’s sleaze as fair exchange for the privilege of living in a historic conservation district. Indeed, what Duxton Hill and Joo Chiat - and Geylang and Little India - have in common are shophouses built in the 1800s and early 1900s by immigrants from southern China.

As the shophouses have been gazetted for conservation by the Urban Redevelopment Authority, owners and tenants have very little leeway when it comes to renovation, as the shophouses have to retain, according to URA guidelines, all ‘original structural and architectural elements’.

While living or working in a shophouse has become rather fashionable of late, thanks to retro-fever, the space and renovation restrictions pose daunting challenges to would-be tenants. Businesses would not only have to be on the small side, but they would also require that certain air of quirkiness and eccentricity as embodied by a shophouse.

Meanwhile, of those businesses that would find such a space suitable, location once again becomes an issue. Boutique shops might prefer the higher pedestrian traffic in specific shophouse clusters such as Ann Siang Hill, while professional outfits like hedge funds prefer shophouses within the business district, such as on Telok Ayer Street.

Thus, when it comes to those shophouses located in less central or accessible areas, the only businesses willing to set up shop are ones that can occupy cramped, narrow spaces with minimum renovations, and which have a devoted clientele that would be willing to go out of their way to get what they want.

Really good eateries are one example of such a business. Girly bars are another.

Sometimes, we just have to recognise that certain things turn up on our doorsteps for a reason. A prominent Singaporean actor and long-time resident of Joo Chiat once told me during an unrelated interview that he has no interest in joining the Save Joo Chiat group, a grassroots movement comprised of residents campaigning for a ’sleaze-free’ Joo Chiat.

The actor, who has a young daughter, pointed out that the sex industry exists here because there is a market for it in Singapore.

‘Whatever is out there is out there because of us. Don’t get on your high horse,’ he said.

He also added that ultimately, these ’sleazy’ people are, in hard times, just trying to make a living wherever and however they can - something he feels Singaporeans should be able to identify with.

He said: ‘We are a migrant society, we all came here as foreign labourers. My great-great-grandfather came to Singapore as a coolie. These foreign workers - they could be the next Singaporeans.’

How suitable, then, that they should get their start in a shophouse.


More mass market projects to launch

Source : Business Times - 26 Feb 2009

Developers are planning to launch more mass market projects this weekend to take advantage of a recent surge in buying interest.

Hiap Hoe Group, a niche developer, will officially launch its 118-unit The Beverly, located at Toh Tuck Road, this Saturday. The starting selling price is $648 per square foot (psf), which Hiap Hoe says is an ‘attractive starting selling price’.

‘We have designed The Beverly for those looking for affordable, high-quality residential developments in a good location,’ said Teo Ho Beng, the company’s managing director.

The Beverly’s two, three and four-bedroom apartments range from 1,120 sq ft to 4,187 sq ft, while its double-storey penthouses range from 2,099 sq ft to 3,757 sq ft and are each outfitted with a private roof garden and pool.

On the other side of the island at Pasir Ris, Sustained Land Pte Ltd will also officially launch Coastal Breeze Residences come this weekend. Two and three-bedroom units at the 63-unit development will sell for $610-$660 psf.

Sustained Land has sold 13 units in Coastal Breeze Residences since the start of 2008 in a soft launch. The units, which were mostly prime apartments on higher floors, went at an average price of $690 psf.

The remaining units are mostly three-bedders between 1159 sq ft and 1356 sq ft in size and there are also duplex penthouses. In terms of absolute value, for example, the price for a three-room 1159 sq ft unit starts at $712,000.

Meanwhile, the UOL Group is expected to launch its 646-unit Double Bay Residences in Simei sometime next week. Market talk has it that the project could be launched at $650-680 psf.

The three projects are coming hot on the heels of two successful launches earlier this month. Units at Frasers Centrepoint’s Caspian condominium near Jurong Lake and Alexis @ Alexandra, a project by joint venture partners Yi Kai Group and Fission Group, sold quickly upon the projects’ launches.

One market insider said that developers are taking pricing cues from each other, and making sure their newly launched projects are priced to sell. ‘There is a sense that people will only be willing to buy projects in the $600-plus psf range, and also only units that don’t cost too much in total. People don’t really want to pay more than $600,000 or $700,000-plus in these times,’ he said.

Developers are also throwing in more upmarket features into their mass market offerings to entice buyers. Each of The Beverly’s 118 apartments is served by private lifts that open into the lobby of its interior. UOL’s Double Bay Residences will also offer extras such as full-length windows in the kitchen, the company has said.


Singapore tops in innovation and competitiveness

Source : Business Times - 26 Feb 2009

Singapore is the world leader in terms of innovation and competitiveness while South Korea ranks fifth and Japan ninth, according to a report released on Wednesday.

Other countries in the top 10 of the study by the Information Technology and Innovation Foundation (ITIF) were Sweden (2), Luxembourg (3), Denmark (4), the United States (6), Finland (7), Britain (8) and the North American Free Trade Agreement (NAFTA) region of Canada, Mexico and the United States (10).

Other Asia-Pacific region countries in the top 40 included Australia (19), China (33) and India (40). The 15 Western European countries in the European Union, the EU-15, ranked 18th.

The study by the ITIF, a non-partisan think-tank based in Washington, used 16 indicators in six key areas to come up with the rankings: human capital, innovation capacity, entrepreneurship, information technology infrastructure, economic policy factors and economic performance.

Measured differently, in terms of progress on the 16 indicators over the last decade, China topped the rankings, and the United States finished 40th, the ITIF said.

Singapore was second followed by Lithuania, Estonia, Denmark, Luxembourg, Slovenia, Russia, Cyprus and Japan. India ranked 14th, South Korea 17th and Australia 32nd. The EU-15 region ranked 28th in terms of change since 1999.

“This study is based on the importance of benchmarking global competitiveness and innovation on a variety of factors, not simply policy factors or economic performance,” said ITIF president Rob Atkinson.

“In today’s global economy, it’s important to look at the competitiveness of the United States, Europe, Asia and the rest of the world based on a variety of factors - not just one.”

“We found that the United States performs well when compared to the rest of the world, leading Europe, but is not the runaway leader that some recent studies have found it to be,” Atkinson said.

The ITIF said that “if the EU-15 region as a whole continues to improve at this faster rate than the United States, it would surpass the United States in innovation-based competitiveness by 2020.”

“All of the 39 other countries and regions studied have made faster progress towards the new knowledge-based innovation economy in recent years than the United States,” it said.

The ITIF outlined “key policies that need to be pursued to turn around the decline in US innovation-based competitiveness.”

They included incentives for companies to innovate at home, being open to high-skill immigration, fostering a digital economy, supporting the kinds of institutions that are critical to innovation and ensuring that regulations and other related government policies support, not retard, innovation.

Source : Channel NewsAsia - 26 Feb 2009

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CapitaLand pays S$46.75 mln for 60% more in Vietnam JV

Posted by luxuryasiahome on February 26, 2009

CapitaLand said it has acquired an additional 60 per cent of its Vietnamese joint venture company - CapitaLand-Hoang Thanh - from its partner Hoang Thanh for US$32.51 million.

The property group also said it has terminated joint venture agreements it entered into in 2007 with partner Azure City and a company affiliated to Azure City to develop a residential site located in Ho Chi Minh City, Vietnam into a high-rise condominium and villa.

The agreements were terminated as the relevant government approvals have not been obtained by the joint venture partners. Thus, the intended joint venture companies have not been incorporated, CapitaLand said.

The developers stake in CapitaLand-Hoang Thanh, on the other hand, was upped from 10 per cent to 70 per cent. CapitaLand-Hoang Thanh has therefore become an indirect subsidiary of CapitaLand. The remaining 30 per cent interest is held by Hoang Thanh Company.

The principal activities of CapitaLand-Hoang Thanh are that of property investment and development and project management. CapitaLand-Hoang Thanh owns a parcel of land of 24,466 square metres in the Mo Lao New Urban Area of Hanoi, which will be developed into residential apartments.

The acquisition price was arrived at on a willing-buyer willing-seller basis, taking into account, among other factors, the net tangible assets of CapitaLand-Hoang Thanh of US$54.19 million.


Singapore’s economy grew by 1.1% in 2008

Source : Channel NewsAsia - 26 Feb 2009

Singapore’s economy, already in recession, shrank 4.2 per cent in the fourth quarter of 2008 from a year earlier, with overall annual growth coming in at 1.1 per cent, the government said on Thursday.

The Ministry of Trade and Industry (MTI) said it was maintaining its 2009 forecast of a shrinkage in gross domestic product (GDP) of between 2.0 and 5.0 per cent.

On a seasonally adjusted annualised quarter-on-quarter basis, GDP declined 16.4 percent in Q4 last year, the ministry said in its economic survey.

“The economy is likely to continue to perform weakly in the first half of 2009,” the ministry said. “The spillover effects of the global crisis will have an impact on many sectors.”

Initial estimates released last month by the government showed the economy grew 1.2 per cent in 2008.

The manufacturing sector declined by 10.7 per cent in the fourth quarter, similar to the preceding quarter. Most of the clusters, particularly electronics, precision engineering and chemicals, contracted.

Growth in the construction sector slowed to 18.5 per cent, from 26.0 per cent in the third quarter, weighed down by a slowdown in industrial building activity and the deferment of several private sector projects.

The services-producing industries as a whole contracted by 1.3 per cent, down from the 5.5 per cent growth in the previous quarter. All sectors, except information and communications and business services, contracted.

Growth in the financial services sector fell by 8.1 per cent on the back of significant declines in trading activities in foreign exchange and stock brokerage, fund management and Asian Currency Units.

MTI said the sharp decline in world trade towards the end of 2008 also resulted in contractions in the wholesale and retail sector (-5.3 per cent) and the transport and storage sector (-2.4 per cent).

For the whole of 2008, MTI said the manufacturing sector contracted by 4.1 per cent, compared to a growth of 5.9 per cent in 2007.

With the exception of the transport engineering sector and general manufacturing, the majority of manufacturing sectors (electronics, chemicals, biomedical manufacturing and precision engineering) contracted in 2008.

The construction sector grew strongly by 20.3 per cent in 2008, outperforming the growth of 18.2 per cent in the previous year.

Overall growth of the services producing industries slowed to 4.7 per cent in 2008, compared to 8.1 per cent in 2007.

The slowdown was led by significantly slower growth in most of the industries, in particular, the wholesale and retail trade, hotels and restaurants, and financial services.


Do your homework

Source : Today - 26 Feb 2009

Some mortgage rates are rising; shop around before making a choice

As global interest rates fall, you would expect more homeowners to be tempted into taking up mortgages pegged to the Singapore Interbank Offered Rate (Sibor) or Swap Offer Rate (SOR).

After all, the three-month Sibor rate is currently around 0.68 per cent - just shy of its all-time low of 0.63 per cent.

However, instead of resulting in lower mortgage rates, interest payments on these pegged loans have surprisingly started to rise.

Rather than passing on savings from cheaper inter-bank lending, most financial institutions are now charging higher premiums above Sibor and SOR to reflect higher default risk, given that the economy has turned.

Banks have turned increasingly cautious over lending.

Last July, someone taking out a mortgage with DBS Bank would have paid a rate of Sibor plus 1.25 percentage points for an 80 per cent loan.

Today, DBS‚ mortgage rates start at Sibor plus 1.75 percentage points, with no lock-in period.

That means the total interest rate paid would now be 2.43 per cent, up from 2.25 per cent last July.

Similarly, spreads over SOR have widened.

Tellingly, some financial planners Today spoke to suggested that home-buyers should consider fixed-rate loans instead.

“Personally, I would lock in for as far as possible,” said Mr Sani Hamid, Financial Alliance‚s director of wealth management.

That is because Sibor rates - while now low - rose to as high as 3.1875 per cent in 2005.

At DBS, Sibor fixed rate mortgages start at 3.25 per cent for a one year lock-in period on an80 per cent loan.

In contrast, fixed rate mortgages charge interest rates at a stable interest rate that is fixed and guaranteed in the first few years. This means that the monthly instalment amount is fixed for this period.

This brings about stability and certainty about how much you will be expected to pay in the long-run.

Another tip: Shop around for - and even ask - for the best rates possible in the competitive markets, note financial planners. You may just get a rate that is better than those published.


Orchard Rd sparkles after $40m facelift


Source : Straits Times - 26 Feb 2009

Makeover to be completed this weekend; fashion show in May to celebrate

FINAL touches to the $40 million Orchard Road makeover are expected to be completed this weekend, after a 10-month-long project to rejuvenate Singapore’s main shopping strip.

One road lane has been sacrificed to create a wider pavement in front of Ion Orchard, Wisma Atria and Ngee Ann City. The extra space has been given to 25 ‘urban green rooms’, containing benches, planter boxes and large decorative glass screens that light up at night. — ST PHOTO: JOYCE FANG

Workers were seen yesterday scurrying around, erecting flower totems - large pillars decorated with fresh flowers - on the pavement from Forum The Shopping Mall to Liat Towers.

By this weekend, old lamp posts and electrical boxes will be stripped out.

New benches, lamp posts, recycling bins, planter boxes and other improvements are already in place along nearly 2km of Orchard Road, between Tanglin Mall and Concorde Hotel Singapore.

The walkways have been repaved, and one road lane has been sacrificed to create a wider pavement in front of Ion Orchard, Wisma Atria and Ngee Ann City.

The extra space has been given to 25 ‘urban green rooms’, containing benches, planter boxes and large decorative glass screens that light up at night.

This is the first time Orchard Road has been extensively improved, with the aim of elevating it to the level of famous shopping streets like Paris’ Champs-Elysees.

But the project had a rocky start. An initial ambitious idea by the Singapore Tourism Board, which paid for the works, to construct a glass canopy running down the stretch was promptly shot down by mall owners, who said it would require too much maintenance.

Works were then delayed by nearly two months at the start because of stalled talks with businesses, which were concerned about how the closure of one lane would affect them. Some shops and restaurants actually saw their takings drop when hoardings went up outside Wisma Atria and Ngee Ann City and the drilling began.

But with all that in the past, and to celebrate the facelift, the Orchard Road Business Association is now planning events, including a fashion show and shopping promotions, all set to begin in early May.

One idea is to hold the fashion show on what would be Singapore’s longest catwalk - a specially constructed outdoor platform on the pavement stretching from Wisma Atria to Ngee Ann City.

Retailers, restaurants and cafes are also expected to take part in promotions and lucky draws to lure shoppers and diners to the area.


OUE unit Clifford loses appeal to waive stamp duty

Source : Business Times - 26 Feb 2009

CLIFFORD Development’s appeal to waive some $2.18 million in stamp duty for the transfer of two properties has been dismissed.

On Tuesday, the Court of Appeal upheld an earlier ruling that made Clifford liable to pay stamp duty on the transfer of Overseas Union House and Change Alley Aerial Plaza.

The case arose when Clifford, a wholly owned subsidiary of Overseas Union Enterprise (OUE), inked a joint venture agreement in March 2006 to enable OUE and United Overseas Land (UOL) to co-invest in Clifford, in order to undertake the business of redeveloping the properties.

The agreement also envisaged that the parties will bid for and jointly develop a property at Collyer Quay.

Then in May 2006, OUE and Clifford signed a reconstruction agreement where OUE was to transfer the ownership of those properties to Clifford for $73 million - comprising 50 per cent shares in Clifford and a shareholders’ loan of $7.3 million. UOL then obtained a 50 per cent stake in Clifford.

Following the second agreement, Clifford then made an application for relief from stamp duties under Section 15 of the Stamp Duties Act, citing the transfer of properties as a transfer of undertaking under a scheme of reconstruction of OUE and Clifford.

Section 15 of the Stamp Duty Act gives relief from stamp duty on instruments made in connection with the reconstruction or amalgamation of companies.

However, the tax authority did not approve the application, and Clifford later appealed against the decision at the High Court. But the High Court sided with the tax authority, and Clifford subsequently filed an appeal to the Court of Appeal.

The Court of Appeal upheld the High Court’s decision as it took the view that the reconstruction agreement had not been made for the purpose of, ‘or in connection with the transfer of the undertaking with respect to the properties from OUE to Clifford, which was in fact a transfer to effect the terms of the joint venture agreement’, said the Inland Revenue Authority of Singapore.

As for the joint venture, some disagreement arose later and it triggered a deadlock mechanism. As a result, OUE bought back UOL’s 50 per cent stake in Clifford for a consideration of $212 million on Oct 14, 2006.

Clifford participated in the URA tender of a site at Collyer Quay which closed on Oct 17, 2006, but its bid was unsuccessful.


Eight Flyer tenants seek documents

Source : Straits Times - 26 Feb 2009

THE latest salvo in a spat between a group of disgruntled Singapore Flyer tenants and the management of the attraction was fired yesterday.

The tenants’ lawyer has sent a letter requesting financial and other documents related to the Flyer.

The process, known as discovery, will help the tenants decide on a potential course of legal action, said their lawyer, Mr Navinder Singh of Navin & Co.

Among the 12 items demanded are a consultant’s report on the Dec 23 breakdown and all documents relating to any company or members of the public making claims against the Flyer.

The latest step was taken after the Flyer management rejected a Feb 5 demand by the tenants for compensation to make up for a lack of business during the month-long breakdown.

But cracks are appearing in the coalition of tenants: Initially, there were 14 in the group - the Flyer has 30 - but six have dropped out for various reasons.

Last night, the Flyer’s management dismissed the latest action as ‘baseless’. It cited the decision by several tenants to pull out of the action as proof of its commitment to helping them, adding that some shop owners had also apologised for taking part in it.

The Flyer has until next Monday to reply to the latest request. Mr Singh said: ‘If they do not accede to our request, my clients will consider making an application to the court to compel discovery.’

It is understood that the Flyer had earlier offered a 12 1/2-day rental rebate to all tenants, in addition to a nine-day rent waiver from Dec 23 to Dec 31.

All the tenants not involved in the current action have accepted the offer. Of the six that dropped out, five have said ‘yes’ and one is still in talks with the management. The eight that are continuing with the action have rejected it.


Hiap Hoe to launch The Beverly this weekend from $648 psf

February 25, 2009

Hiap Hoe Group, a niche residential property developer, is set to launch its latest residential project – The Beverly, near Upper Bukit Timah, this Saturday.

“This freehold development within a low-density private housing estate sits on a 124,000 sq ft site, and offers good accessibility to the city via the Pan-Island Expressway (PIE), Bukit Timah Expressway (BKE) and upcoming Beauty World MRT station.” said Hiap Hoe in a press announcement to the SGX.

It is conveniently located minutes away from the shopping and dining hub along Upper Bukit Timah and Holland Village, and close to prestigious schools such as Pei Hwa Presbyterian Primary School, CHIJ (Bukit Timah) and Methodist Girls’ School.

“Nature lovers will certainly also relish the lush greenery of the nearby Bukit Timah Nature Reserve and Bukit Batok Nature Park.”

The Beverly’s 2, 3 and 4-bedroom apartments range from 1,120 sq ft to 4,187 sq ft, while its double-storey penthouses range from 2,099 sq ft to 3,757 sq ft, and are each outfitted with a private roof garden and pool.

While most units have a view of the pool and the courtyard, each of the Beverly’s 118 apartment units is served by private lifts that open right into the lobby of its designer interior.

The Beverly offers a comprehensive suite of facilities, including a yoga corner, a spa oasis lagoon and a two-tier pool, consisting of a lap pool on the upper tier and a children’s pool in the lower tier, complete with sun-tanning pool deck. In addition, there is a spacious second storey sky deck where one can enjoy clubhouse activities, al fresco barbecue, and fitness facilities.

Teo Ho Beng, Managing Director of Hiap Hoe Group, said, “We have designed The Beverly for those looking for affordable, high quality residential developments in a good location.”

The Beverly comes at a starting selling price of $648 psf and will receive its Temporary Occupation Permit by Dec 31, 2013.

US Jan new home sales slump to record low


Source : Business Times - 26 Feb 2009

Sales of newly built US single-family homes slumped to a record low in January, while prices fell to their weakest level in five years, according to a government report on Thursday that highlighted the continued distress in the housing market.

The Commerce Department said sales plunged 10.2 per cent to a 309,000 annual pace, the lowest on records dating back to 1963, from an upwardly revised 344,000 in December.

Economists polled by Reuters had forecast sales at a 330,000 rate in January.

The median sales price in January tumbled 13.5 per cent to US$201,100 from a year earlier, the lowest level since December 2003, the department said. The percentage decrease was the largest since July 1970.

The median marks the half-way point, with half of all houses sold above that level and half below.

The inventory of homes available for sale in January was at 342,000, the lowest in over five years. However, because of the weak January sales pace, the supply of homes available for sale is now at 13.3 month’s worth, a record high.


Singapore office rents fall 20% on-quarter in Q4


Source : Channel NewsAsia - 26 Feb 2009

Office rentals in Singapore suffered their sharpest quarterly drop since 2000 in the final three months of last year.

A research report from property consultancy CB Richard Ellis (CBRE) said Grade A office rents fell 20 per cent on-quarter in the fourth quarter of last year, to an average of S$15 per square foot.

Average office rents stood at some S$13 per square foot, down 14 per cent from a year earlier.

CBRE expects rents to continue to fall throughout this year. It said the environment will be highly competitive and lease negotiations will be vigorous.

As for the retail sector, prime Orchard Road rents slipped 1.9 per cent on-quarter to S$36 per square foot. This was the first time they had fallen since 2003.

Prime suburban rents dipped 1 per cent to an average of S$29 per square foot.

CBRE said given the weak demand and the abundant retail supply that will come on stream in the next two years, prime Orchard Road rents could fall by 10 per cent in the first half of this year.

Suburban malls may see a rental consolidation of 2 to 3 per cent.


Contractors found touting for business in Punggol housing estates

Source : Channel NewsAsia - 26 Feb 2009

It may be a property buyers’ market now, but the poor economy has brought woes to another segment of the housing industry.

The business slump is turning contractors into casualties of the recession, forcing some to tout for business.

Residents in Punggol have recently become the targets of touts. Several callers to Channel NewsAsia’s news hotline said they had been approached by many contractors seeking to do renovation work on their homes.

Checks with these contractors revealed that they have resorted to such tactics because of the bad economy.

The Singapore Renovation, Contractors and Materials Suppliers Association said the renovation business is undergoing tough times.

Many contractors said new home owners are now holding off plans to renovate. Those who do plan to have work done are asking for lower prices.

The number of customers defaulting on their payments has also risen in recent months.

On top of that, the Housing and Development Board’s (HDB) Build-to-Order scheme, which offers flat with standard or premium finishes, has drastically reduced the need for contractors.

“Many of our members say they haven’t had any jobs since the start of 2009. If the situation continues, nearly half the contractors in Singapore might close down,” said Lim Ah Bah, honorary advisor of the Singapore Renovation, Contractors and Materials Suppliers Association.

Under the HDB’s Registered Renovation Contractors’ Scheme, registered contractors are not allowed to tout or solicit for business in HDB estates. Those found guilty of such offences can be fined S$500 and given demerit points.