SM Goh says challenge for Tianjin Eco-City is to attract investors

September 27, 2008

With initial progress underway at the China-Singapore Tianjin Eco-City project, Singapore Senior Minister Goh Chok Tong says what needs to be done is for policy measures to be either tweaked or put in place.

While saying that Singapore had chosen the right site for the bilateral flagship project, Mr Goh acknowledged that the challenge right now lies in attracting investors.

Mr Goh said his visit to the Tianjin Eco-City site allowed him to visualize what the area would soon look like - a place where residents enjoy a good and leisurely lifestyle, alongside vibrant economic activities such as financial services, research and development, and education.

Mr Goh said he is overwhelmed by the scale of China’s vision, the boldness and the determination of the Chinese in realizing the Tianjin Eco-City dream.

To get the project going, Mr Goh said what is important is to put in place incentives and remove restrictions.

He said, “There are three harmonies we’re talking about, people with people, well we can achieve that. But people with environment, that’s in fact the whole purpose of the eco-city, we can achieve that.

“So the challenge will be people and the economy… we have some ideas on how to attract the activities that we want, financial services, research and development, education, but in the end, can we attract them to come over here, that’s the challenge for us.”

Agreeing, Senior Minister of State for National Development Grace Fu said the eco-city must have more than just a pro-environment living area.

She said, “I think increasingly the challenge is to be economically competitive as well. So I think it’s now time to re-focus on the policy side of it, how to make this place attractive to investors, and to create jobs for the people here.”

Turning the Tianjin Eco-City from dream to reality involves more than just the physical dimensions. It also involves the software of ensuring the city’s long term sustainability and viability, and having endorsement from China’s highest leadership might just be the extra touch that is needed to distinguish the Singapore flagship project from other similar eco-cities in China.

Mr Goh also attended the opening plenary session of the World Economic Forum.

At the session, Chinese Premier Wen Jiabao noted that in view of the global financial crisis, China’s greatest contribution to the global economy would be to ensure that it remains economically vibrant.

Turning to the recent milk powder scandal, Mr Wen said that China will revamp the country’s entire food industry so as to ensure greater trust and credibility in Chinese products.

Singapore property still an investment choice

Source : My Paper - 24 Sep 2008

DESPITE an uncertain economic outlook, Singapore property is still being viewed as an attractive investment option, according to a survey by the iProperty.com Group, a network of property portals.

Some of the factors contributing to this sentiment include the potential profit from capital appreciation and the potential rental income.

The survey studied the buying habits and trends of 949 people - both Singaporeans and foreigners - who visited iProperty’s Singapore website last month.

With Singapore property prices stabilising in recent months, respondents said they are open to buying a property in the next 12 months - almost 85 per cent said they intend to or may purchase one.

They are most interested in completed condominiums (25 per cent), followed by uncompleted condos (18 per cent), completed landed properties (16 per cent) and resale Housing Board flats (12 per cent).

Among those polled, 42 per cent expect prices to rise, with almost the same number (41 per cent) expecting them to fall.

Given the slowing down of the economy, a majority of respondents (48 per cent) are looking at properties from US$110,000 (S$155,700) to US$500,000. Only 4 per cent are looking for a property in the price range of US$1.1 million to US$3 million.

‘Even though people are keen on investing in property, we can see that the bearish economic outlook has resulted in investors looking at more conservative property choices,’ said iProperty.com Group executive chairman Patrick Grove.

However, some things about buying a property, such as the emphasis on location, remain unchanged. Whether the property is for personal use or for investment, location is the most important factor, said 51 per cent of the respondents.

The other factors are price (36 per cent) and potential capital appreciation (20 per cent).

Pulsating Marina Bay

Source : Business Times - 26 Sep 2008

This new prime area for living, working and playing will become even more vibrant once Marina Bay Sands is ready, writes HAN HUAN MEI

FOR a long time, when the question was asked, ‘where do wealthy Singaporeans live’? The answer would either be ‘the bungalows in Tanglin, Bukit Timah and Holland Road’ or ‘the luxurious apartments in Orchard, Cairnhill and Grange Road’. This is set to change.

While these prestigious addresses evolved through Singapore’s history over several decades, two new prime residential areas have emerged in recent times as a result of brilliant land use planning based on the government’s vision of lifestyles in the new millennium. These are the New Downtown and Sentosa Cove.

The properties in the traditional prime residential areas are largely freehold estates, but those in the New Downtown and Sentosa Cove are mainly 99-year leasehold estates. Not only are they among the most expensive leasehold properties, their price levels are almost on par with the new freehold projects in the Orchard area and 25-30 per cent below those of new luxury properties.

The evolution of these two new prime residential locations was partly fuelled by the sharp growth of local high net worth individuals (HNWIs) as a result of the global wealth effect in 2005-2007. Most of them would have invested in real estate in one way or another during this period.

In the past few years, not only have locals invested in property, but the Singapore property market boom has also attracted a lot of permanent residents (PRs) and foreigners as the government relaxed rules on foreign ownership. There is no restriction on the purchase of any non-landed property in Singapore but a foreigner or PR who wishes to purchase a restricted residential property still needs to obtain the approval from the Land Dealing (Approval) Unit. A restricted property refers to vacant residential land, landed property (such as a detached house, semi-detached house, terrace house and landed property in strata developments which are not approved condominium developments under the Planning Act).

However, PRs and foreigners who wish to purchase landed property on Sentosa island have been able to obtain fast track approval from the government since 2005.

Between the emerging prime areas of Sentosa and the New Downtown, the New Downtown possesses a dynamic multi-faceted character that makes it a more ‘happening’ place. This is because it is being developed into a place where living, working and playing will be blended together into an exciting mix of diverse activities. The Esplanade - Theatres By The Bay provides for the enjoyment of the arts. The Marina Bay Financial Centre (MBFC), the purpose-built financial district of the New Downtown, will offer nearly three million sq ft of prime Grade A office space and two residential towers comprising 649 upmarket apartments to complement the newly completed iconic skyscraper, The Sail @ Marina Bay. Both The Sail and MBFC will also provide some 20,000 sq ft and 105,000 sq ft of retail space respectively.

To top it all, the proposed Marina Bay Sands integrated resort will feature three hotel towers with 2,500 suites, over a million sq ft of space for conventions and meetings, the ArtScience Museum designed like ‘floating’ crystal pavilions, more than 800,000 sq ft of retail space known as Marina Bay Shoppes as well as a 160,000 sq ft casino. There is no doubt that Marina Bay will be a focal point of business, recreation and living for many years to come.

While the concept of in-city living has hogged the headlines in recent times, the number of residential units in the New Downtown is still rather limited. Around Marina Bay, only The Sail (1,111 units), Marina Bay Residences (428 units) and Marina Bay Suites (221 units) are available. The first two projects are fully sold while the third is not for sale yet. One Shenton (341 units) at One Shenton Way is 93 per cent sold to date while The Clift (312 units) at McCallum Street is 76 per cent sold. In the Tanjong Pagar area, Lumiere (168 units) is 58 per cent sold.

As for projects in the pipeline, 76 Shenton Way has obtained written permission to be converted into a 179-unit apartment block while the owners of 5 Shenton Way (UIC Building) are waiting for the lifting of the moratorium on the conversion of office buildings to residential use at end-2009 before they proceed. Two new projects at Enggor Street in Tanjong Pagar have also obtained written permission as at June this year.

Over at Icon in Tanjong Pagar, one-bedroom units (570-800 sq ft) were recently leased at $5-$7.50 psf while two-bedroom units (900-940 sq ft) were leased at $5.50-$7 psf. This works out to a gross yield of 4-5 per cent. Using these as a proxy for the possible rental range for the recently completed The Sail (Tower 2), it is likely that similar-sized units may be leased at $7-$8.50 psf. This would translate to a lower yield of 3-4 per cent due to their higher capital values.

For 2009, modest growth is expected as the US financial and housing slumps ripple through the rest of the world, affecting employment, business confidence, consumer spending and overall demand. The slowdown in the global economy and inflation woes are likely to curtail residential sales and cause overall home prices to dip by 10-15 per cent.

Despite the current tentative sentiment in the residential market, there are several fundamental merits for living in the new prime area of Marina Bay. And momentum should pick up again once the Marina Bay Sands commences operations at the end of next year. The lure of living, working and playing in an area that never sleeps would once again prove too attractive for home buyers to ignore.

The writer is by associate director of CBRE Research

Population grew to 4.84 million, boosted by strong non-resident growth

Source : Channel NewsAsia - 26 Sep 2008

Singapore’s population hit 4.84 million in June this year, marking a 5.5 per cent increase from a year before. The figure is buoyed by an increasing number of foreigners in the country, boosted by strong economic growth over the past few years.

The number of non-residents grew by 19 per cent, while the resident population went up by a mere one per cent.

The National Population Secretariat said foreigners increasingly view Singapore as an attractive place to relocate.

Most come from neighbouring Asian countries.

There are also more new Permanent Residents (PRs) and citizens. In the first half of this year, 34,800 were granted PRs. That’s up by some 20 per cent from the same period last year.

Meanwhile, 9,600 were granted citizenship, up by some 30 per cent, compared to the year before.

And nearly seven in 10 new PRs aged 20 and above had post-secondary qualifications.

Moving forward, the Secretariat said integration would be a key challenge.

It added that the government will also continue to exercise discretion and facilitate the naturalisation of foreigners who can add value and contribute to Singapore socially and economically.

Roy Quek, director, National Population Secretariat, said: “Integration is not just about what the government can do because the government is limited in terms of its ability to reach out to everyone. Integration happens all the time, in our schools at the workplace, in our local community, in the neighbourhoods.”

Mr Quek added that a strong non-resident presence in Singapore is also testament to the country’s good growth.

“In a way it’s a compliment to Singapore that we have a place where others want to come to, that we have economic opportunities, we have enough jobs not just for locals but also for people who are willing to come in to spend time here.

“So the key is not to look at it as competition for jobs but adding value to Singapore’s economy and ultimately contributing to a better life for all of us in Singapore,” he said.

The number of Singaporeans grew to 3.16 million due to the higher number of citizen babies and more PRs taking up citizenship.

There were some 18,000 births registered in the first half of this year, slightly higher than the numbers registered the same period last year.

So while Singapore is on track for another historic high fertility rate, the biggest concern is still about making babies.

The country’s total fertility rate was 1.29 in 2007, far below the replacement level of 2.1.

Mr Quek said: “Of course, it’s going to be an uphill task but we are hopeful at least of crossing the 1.3 level at some point in the future.”

As for overseas Singaporeans, more are making their homes abroad either for work or study.

As of June 2008, there’re about 153,500 overseas Singaporeans compared to 147,500 a year ago.

The countries with a high concentration of overseas Singaporeans are Australia, the UK, US and China.

For a full list of the statistics, you can log on to www.nps.gov.sg.

HDB launches 992 flats under balloting exercise

Source : Channel NewsAsia - 26 Sep 2008

The Housing and Development Board (HDB) of Singapore has launched the sale of 992 flats under its Balloting Exercise on Friday.

They include surplus flats available from the Selective En Bloc Redevelopment Scheme (SERS) in Ang Mo Kio, Kallang, Whampoa, Queenstown and Jurong West, as well as remaining units at The Pinnacle@Duxton.

HDB said on Friday the units offered are of different types and designs that will suit varying needs and budget of home buyers.

Prices of three and four-room flats in Jurong West are expected to cost between S$142,000 and S$253,000.

While the 428 units at Singapore’s first iconic 50-storey public housing project, The Pinnacle@Duxton are priced between S$457,000 and S$646,000.

The Board said that buyers who do not find a flat of their choice in this balloting exercise can consider applying for a new flat under the Build-To-Order exercises in the future.

Interested buyers can view models of the projects at the Habitat Forum at the HDB Hub or visit unfurnished sample units on site.

Applications for the new flats can be submitted online at www.hdb.gov.sg from September 26 to October 9.

Pinnacle flats on offer

Source : Today - 27 Sep 2008

FOR those waiting to snap up a public flat in the iconic 50-storey integrated housing development, the good news: Some 428 four- and five-room units at The Pinnacle@Duxton are among 992 available under the Housing and Development Board’s (HDB) latest balloting exercise launched on Friday.

The much-hyped flats in the Cantonment Road area are among some of the most expensive new units with a four-room S1-type priced between $457,000 and $555,000, while the bigger S2 units cost between $545,000 and $646,000.

Even so, the board pointed out, these new flats which come with the HDB discount are priced lower than what resale units in the area have recently sold for. Resale HDB prices have been climbing, showing a4.4-per-cent growth in the second quarter.

The Pinnacle@Duxton is based on an award-winning design, and boasts special features such as skybridges and sky gardens at the 26th and 50th storeys. Apartments will be provided with a varied combination of balconies, bay windows and planter boxes, to suit the preferences of flat buyers.

The balloting exercise also includes surplus units from Selective En bloc Redevelopment Schemes in Ang Mo Kio, Kallang/Whampoa, Queenstown and Jurong West.

There are 128 studio units, priced between $80,000 and $115,000, for sale in Ang Mo Kio, while Jurong West has 285 three-, four- and five-room flats, starting at $142,000. Kallang/Whampoa has 39 four-room and 64 five-room units, while there are 48 five-room flats in Queenstown.

One-North: No rental restrictions on venue

Source : Straits Times - 27 Sep 2008

I REFER to Mr Lester Lam’s letter on Tuesday, ‘Concern over use of building’. He had also earlier shared his concerns with us last Wednesday over a ‘church’ being built in One-North. We assure him once again that we appreciate his concerns.

As we had informed Mr Lam earlier, the Civic, Cultural and Retail Complex (CCRC) will comprise a proposed 5,000-seat auditorium and a retail mall, to be operated on a neutral basis, open for rental by the public without any restriction. JTC announced the award of the site in One-North for the development of the CCRC to Rock Productions and CapitaLand in September last year, following a public tender.

Rock Productions has provided a legal undertaking to JTC that the venue will be managed strictly on a commercial basis and will not be converted into a religious facility. IMG Artists, a prominent global performing arts management company, has been appointed by Rock Productions as the third party to market and manage the venue.

Any organisation or group, regardless of affiliation, can rent the venue with the necessary permits obtained from the authorities.

The CCRC is intended to be a lifestyle hub within One-North and the Buona Vista-Queenstown region. It is envisaged that the CCRC will generate a wide range of attractions, food and beverage outlets, entertainment and amenities. This will create a vibrant social and cultural environment for the benefit of everyone in the vicinity and not just a select and exclusive group.

We thank Mr Lam for sharing his concerns with us.

Kelly Wee (Ms)
Director, Communications
JTC Corporation

$645K HDB’s priciest flats go on sale

Source : Straits Times - 27 Sep 2008

FOR sale: the most expensive flats ever released by the HDB.

They are the remaining 111 five-room units at the iconic 50-storey Pinnacle@Duxton in Tanjong Pagar, which is due to be completed this year.

Prices start at $545,000 and go up to an eye-popping $645,800 for a 49th storey unit, making them Singapore’s costliest new flats by a long shot. Forty-four cost more than $600,000.

The current record for a new HDB flat is held by a five-room unit at Toa Payoh, which was released for sale in February at $531,500. This excludes the premium flats built by private developers under the Design, Build and Sell Scheme (DBSS).

Pinnacle@Duxton also has 317 four-room units still unsold, which were made available at prices ranging from $457,000 to $555,000. These units are left over from when the development was launched in 2004. The flats were then priced between $289,200 and $439,400 and met with overwhelming response.

But not all the units were eventually sold, and some were returned to HDB after the buyers withdrew from their planned purchases.

The remaining flats were among 992 new flats released for sale yesterday under HDB’s latest balloting exercise, which also included surplus units from the Selective En bloc Redevelopment Scheme (Sers) in Ang Mo Kio, Jurong West, Kallang/ Whampoa and Queenstown.

While the prices for the Pinnacle@Duxton flats seem steep, the HDB said they were still lower than the prices of resale flats in the area.

‘Despite their pricing, units at the Pinnacle@Duxton are especially attractive as they are priced below the market prices of similar flats in the resale market,’ a spokesman said.

‘Their high prices are supported by recent open market resale prices of comparable flat types in the vicinity, for example at Cantonment Close, Tanjong Pagar and Jalan Membina. Overall resale prices in these areas have gone up in recent years.’

HDB provided figures showing that prices for five-room flats in Jalan Membina recently hit $670,000 for a unit above the 20th floor. The average price of a five-room flat sold in Jalan Membina and Cantonment Close over the last three months was $624,000.

Still, whether buyers will respond well to these prices remains to be seen.

Housewife Lily Lee, who is in her 30s, said the prices for the Pinnacle@Duxton units were ‘very high’.

‘I wouldn’t pay $600,000 for a five-room flat, I don’t think any HDB flat is worth that value,’ she said.

But Mr Zhao Bing Yao, 29, thought the price seemed ‘reasonable in this market’.

‘My friend just spent about $400,000 for a four-room flat in Clementi that is 30 years old, so I think it’s okay to pay up to $600,000 for a brand-new five-room flat near town,’ said the director of an IT company.

Mr Mohamed Ismail, the chief executive of property agency PropNex, said that HDB ‘has no alternative but to price at market norms’.

‘If they price too low, it will have an impact on resale prices in the area,’ he said, adding that private homes in Tanjong Pagar cost mostly above $1,000 psf.

Still, he noted that the target group of buyers for the Pinnacle@Duxton flats will be ‘very small’, given the $8,000 monthly household income ceiling. Buyers of the five-room flats would be paying almost $3,000 in monthly mortgage instalments, he said.

For ‘young couples and those who are not ready to pay the higher prices for flats in Pinnacle@Duxton’, HDB suggested applying for the other types of flats released in yesterday’s balloting exercise.

These include 285 flats in Jurong West along Corporation Drive, with three-room flats starting at $142,000, four- room flats starting at $213,000, and five- room flats starting at $270,000.

There are also four- and five-room flats in the Kallang/Whampoa area next to Kallang MRT, and 128 studio apartments in Ang Mo Kio that elderly buyers can opt for.

As at 5pm yesterday, 1,271 applications had been received for the 992 flats.

NOT WORTH PAYING FOR

‘I wouldn’t pay $600,000 for a five-room flat, I don’t think any HDB
flat is worth that value.’ - Housewife Lily Lee, who is in her 30s and looking for a new flat

PRICES REASONABLE

‘My friend just spent about $400,000 for a four-room flat in Clementi that is 30 years old, so I think it’s okay to pay up to $600,000 for a brand-new five-room flat near town.’ - Mr Zhao Bing Yao, 29, director of an IT company

On the market

Pinnacle@Duxton, Tanjong Pagar
Units: 428 (317 four-room, 111 five-room)
Prices: $457,000 to $645,800

Ang Mo Kio
Units: 128 studio apartments
Prices: $80,000 to $115,000

Kallang/Whampoa
Units: 103 (39 four-room, 64 five-room)
Prices: $364,000 to $554,000

Queenstown
Units: 48 five-room flats
Prices: $481,000 to $539,000

Jurong West
Units: 285 (91 three-room, 164 four-room, 30 five-room)
Prices: $142,000 to $306,000

Interbank rate spikes to 2.23%

Source : Straits Times - 27 Sep 2008

THE turbulence in global financial markets hit home yesterday when the three-month Singapore Interbank Offered Rate (Sibor) shot up to 2.23 per cent from 1.76 per cent on Thursday.

The Sibor is the level at which banks lend to one another and it has a direct link to how much the rest of us pay for borrowed money.

Although rates have since eased to about 2 per cent, market watchers say the rise was a sure sign of troubled economic times ahead.

‘The spike reflects the spillover from the US funding freeze and also the increase in risk aversion in the local interbank market following the collapse of Lehman Brothers,’ said Citigroup economist Kit Wei Zheng.

‘But even before the Lehman collapse, domestic short-term interest rates were already facing some upward pressure because liquidity was normalising from previously very loose conditions.’

The Monetary Authority of Singapore (MAS) issued a statement last night saying that a ‘combination of a dislocation in global money markets and quarter-end funding pressures caused the Singapore dollar interest rates to firm’.

And to ease market funding pressures, the MAS said it has kept a higher level of liquidity in the banking system through ‘its market operations’.

The MAS also said that it remains in close contact with market participants and is ready to ‘inject additional liquidity as required’.

However, economists say that move may provide only temporary relief.

‘Our view is that while the MAS’ liquidity injection may moderate the increases of interest rates, or even bring them down somewhat, it is quite unlikely that rates will regress to previous levels any time soon,’ said Mr Kit.

Short-term rates leap to about 2%

Source : Business Times - 28 Sep 2008

SHORT-TERM interest rates here jumped again yesterday, sending it higher than the US Fed Fund rate of 2 per cent and causing the Monetary Authority of Singapore to inject money into the system.

Underlining the seriousness of the situation, the MAS in a rare statement confirmed that it had intervened in the interbank market.

‘A combination of a dislocation in global money markets and quarter-end funding pressures caused Singapore dollar interest rates to firm this morning. To ease market funding pressures, MAS kept a higher level of liquidity in the banking system through its market operations,’ it said last night.

The 3-month Sibor or Singapore interbank offer rate was fixed by the Association of Banks at 2.23 per cent yesterday, up from 1.76 per cent on Thursday.

‘Rates have since eased to about 2 per cent,’ the MAS said.

MAS said that it was prepared to inject additional liquidity, if required. The 3-month Sibor is now almost double of what it was a month ago.

This could hit home loan borrowers who have been enjoying low interest rates, especially those on interbank pegged rates.

A month ago, on August 26, the 3-month Sibor was 1.18750, up slightly from a low of one per cent on August 7.

‘Banks are tightening credit to each other and to their customers,’ said Matthew Wilson, Morgan Stanley analyst.

Capital is scarce globally and banks are responding by rationing or preserving capital, he said. ‘Refinancing may become more difficult and we risk entering a vicious credit/capital cycle as de-leveraging takes hold,’ said Mr Wilson.

‘Unless risk aversion subsides and/or the Fed cuts the Feds rates, upward pressures on domestic interest rates could persist for awhile,’ said Kit Wei Zheng, Citigroup economist. Despite coordinated action by global central banks to inject liquidity, USD interest rates could stay high near term, pulling up SGD interest rates as well, said Mr Kit.

Ho Woei Chen, United Overseas Bank economist noted that with the exception of the Asian financial crisis, the 3-month Sibor has always been trading at a discount to the Fed funds target rate which is currently at 2.00 per cent. ‘We expect the current phenomenon to be temporary,’ she said.

The spike in wholesale interest rates will hurt home loan borrowers who peg their loans to Sibor. ‘Volatility in interest rates causes mortgage instalments to vary with each re-pricing period,’ said Kevin Lam, UOB head of loans.

‘This could affect customers’ personal cashflow management. For example, if the Sibor rate increases by one per cent, a customer with a $500,000 loan (on 20 years loan tenure) will see his annual instalment increase by $2.928,’ said Mr Lam.

Opportunities in the Middle East

Source : Business Times - 26 Sep 2008

Amid economic gloom, Gulf property markets have shown surprising resilience, writes COLIN TAN

AMID the heightened uncertain global economic outlook and the doom and gloom afflicting many of the world’s real estate markets, the Middle East housing sector has been demonstrating surprising resilience especially given that the market has been enjoying at least four years of phenomenal price growth. Today, housing rents and prices in Dubai, Abu Dhabi and Doha - the three most popular markets to outside investors - have continued to climb even as they head south for most of the world’s major real estate markets.

However, recent emerging events - both internal and external - could signal that this comfortable situation may be about to change, albeit not in the immediate future.

For starters, interest from western foreign investors in Gulf property markets, especially in the high-end residential segment, has waned considerably. While some interest remains, there is less enthusiasm than before as British and US buyers re-focus on their home and other markets which they see as cheaper and more competitive. Now, less than a fifth of real estate purchases in Dubai were made by European or US investors.

At the same time, various measures to combat property price inflation, such as rental caps, trading restrictions and proposals for a capital gains tax have all combined to make Gulf property investment much less attractive.

The massive supply under construction over the past few years could also finally catch up with demand by the beginning of 2009 and overtake it by 2010. The problem is compounded by the fact that units completing in the coming years do not meet the actual needs of the different segments of the market. This will lead to oversupply in some market segments.

A Morgan Stanley report issued in late August caused a furore when it warned that the overheated Gulf markets are expected to experience a period of consolidation. It said real estate prices in Dubai have surged 79 per cent since the beginning of 2007. While the sector was unlikely to crash, it projected a series of price declines in 2009 brought about by an oversupply in the market. Property prices could then fall by about 10 per cent in 2010. This was followed by a Reuters poll which had Dubai real estate analysts suggesting that the correction in 2010 could be bigger at about 15 per cent.

Even Abu Dhabi’s Department of Planning and Economy got into the picture when it warned that prices could fall because of oversupply, speculation and an absence of proper regulation. It said the real estate sector has leapt by an average of 22 per cent over the past five years. Although it was expected to maintain high growth due to an economic upswing, a surge in population and tourism, high public spending and other factors, supply is rapidly gaining ground and could sharply depress prices in the medium and long term.

As properties in Dubai set the benchmark for the entire real estate sector in the Gulf region, it follows then that a price correction in Dubai will have a knock-on effect on the rest of the region leading to similar declines in Abu Dhabi and Doha and the rest of the Gulf region.

But how likely is this correction? We have had such similar market calls before but none of it had materialised. It is still early days and 2010 is still some way off but a no-show may well be played out again. One of the main reasons analysts get their calls wrong is that the Middle East markets are notoriously difficult to predict. This is due to the vast amount of petrodollars flowing into the region. As such the Middle-eastern markets operate to a different set of circumstances.

The Middle East provides 62 per cent of global oil reserves and 31 per cent of global production. The GCC alone was already generating a current account surplus of over 30 per cent of GDP in 2007, and that’s before oil topped US$100 per barrel.

Analysts suggest that the breakeven prices for oil producing countries is between US$25 and US$42 per barrel in the GCC countries. Government spending is generally based on the assumption of US$50 a barrel.

According to figures from IMF and HSBC, every US$1 increase in the oil price, sustained for one month, translates to an additional US$500 million of revenues for GCC producers. If one considers the difference between oil at US$60 a barrel, and at US$80 per barrel, it equates to a GCC economy US$200 billion bigger; a fiscal surplus US$100 billion bigger; and a current account surplus US$100 billion bigger. This means if the price of oil were to drop to US$50, the economy would continue to grow at a very healthy rate.

Consequently, governments have been able to pledge huge amounts for capital expenditure in the region. Broad estimates put the figures at US$500 million over the next two years, and US$2 trillion over the next ten. And it’s not just oil that is providing such a boost. Non-oil GDP is rising too as more of the GCC countries adopt a policy of diversification.

The rise of the non-oil sectors adds to an already strengthening economic position. National income growth averaged 19 per cent in the six GCC nations (Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, Bahrain and Oman) in the four years to June 2007. Over the same period, GCC governments added US$500 billion to their net foreign assets despite huge spending on projects. Overall, the IMF forecast 5.9 per cent growth for the Middle East in 2009, and in some nations, notably Qatar and the UAE, analysts have double-digit expectations for near-term GDP growth.

Additionally, the Gulf is one of those rare parts of the world where the age dependency ratio is declining: it’s a young region, with its population entering a demographic sweet spot, and more and more people of a working age. The robust economic growth of both the oil and non-oil sectors have also lead to greater job creation and this has resulted in greater expatriate inflows into the region, thereby creating even more demand for real estate.

In the face of such robust economic growth and high spending on infrastructure, it is very difficult to see prices or rents declining.

Even the new proposals and measures to combat property price inflation across the region cited as reasons for lowering the attractiveness of Middle East property investments, are actually good for the market in the long term. They add confidence to the markets instead of detracting from it.

In the area of demand, departing western investors are easily replaced by local billionaires who are actually less fussy about their desired returns. A recent Boston Consulting Group report rate the UAE, Qatar and Kuwait among the world’s top five countries which enjoy the densest concentration of millionaire population in the world. It estimated the total GCC market has US$1.5 trillion in assets under management (AUM). The average AUM of a wealthy household was an estimated US1$ million - well above the global average of about US$400,000.

Before we forget, some of these wealthy GCC citizens have been reaping huge financial gains from their real estate investments over the past four years - not only on apartment purchases but gains on land in the early years of development. Many have come to build up very deep pockets.

It was always interesting to watch many seemingly dark vacant blocks of apartments light up over the weekend as many GCC nationals flock to their holiday homes be it in the UAE or Qatar. At the same time, many local owners have been known to be more than willing to keep their apartments vacant if they are unable to lease their apartments at the rents they want.

Finally, completed supply is very difficult to predict as they can drag on longer than in developed markets even before rising construction costs and inflation and bottlenecks have become a major problem these days resulting in even more delays.

Until the petrodollars stop flowing into region, it would be most unwise to bet on a market correction actually materialising.

The writer is associate director, Chesterton International

HK luxury housing market unruffled by economic turmoil

Source : Business Times - 26 Sep 2008

SO far this year the financial turmoil elsewhere has had surprisingly little effect on the luxury residential housing markets in Hong Kong and Singapore.

Following the demise of Lehman Brothers, the takeover of Merrill Lynch, and the strong possibility of future consolidation in the financial sector, it is difficult to gauge the number of European and American expats who are likely to continue to be posted to Hong Kong and Singapore. However, banks and other major multinational corporations are looking at the higher levels of growth in Asia to support future revenues, given the slowdown in the United States and European Union.

That should provide some support for demand for high-end property in Hong Kong and Singapore, as leading locations for multi national headquarters for a range of industries.

Wealthy Asian expats are continuing to invest, where they are cash rich and less dependent on debt financing. China’s new rich are buying in Hong Kong.

The discussions in the press about a downturn in the housing markets, particularly in Hong Kong, so far this year have not been seen at the luxury high end of the residential market.

Megan Walters, Asia economist for Cushman and Wakefield, commented: ‘It is too soon to tell what effect the Wall Street crisis will have on the luxury residential market in Hong Kong, but people always want prime property. It is always in demand reflecting the lower risk and lower yields than that on secondary property, and invariably luxury and prime property occupy the same area of the market.’

Buying luxury residential property in leading cities can be an excellent investment, but the returns are a complicated three-way play between the point in the property cycle, long-term growth prospects and foreign currency exchange movements, as well as the particular characteristics of what may turn out to be a hot new location in a city.

The cost of buying a 120 sq m apartment in Hong Kong is comparable with buying one in London, New York or Tokyo. An apartment in a decent neighbourhood is in the order of US$1.2-1.9 million or about US$ 4,000 to US$6,000 per metre per month to rent.

Luxury property in Hong Kong can reach five times those figures, and with the level of wealth distribution much more unequal than in the US, UK and Japan, there are sufficient numbers of wealthy purchasers to support the prices. The Gini co-efficient is a measure of wealth distribution, where 0 is total equality and 100 is total inequality with very rich and very poor. Hong Kong has a higher Gini co-efficient than Japan, the UK and USA.

In terms of where is the best long-term bet to buy a property, at the luxury end of the market, it is interesting to look at the GDP per capita figures for Hong Kong compared to those for the USA, UK and Japan.

There are no restrictions on foreigners buying in Hong Kong.

Investment yields in Hong Kong are comparable at around 4 per cent for prime 120 sq m apartment in a good neighbourhood, about the same as New York, London and Tokyo.

Foreign investors can occasionally see buying overseas property as more risky due to a lack of familiarity with local rules. For those looking to buy in Hong Kong, the country’s position in the World Bank Ease of Doing Business ranking shows it to rate higher than Japan and the UK demonstrating no great risk to investments. From the property cycle perspective, luxury apartments at this level exhibit similar risk characteristics compared to other international cities and consequently exhibit similar returns.

In Hong Kong, the traditional high end luxury area of the Peak is being superseded by the new Kowloon side location. Fifteen years ago it would have been unthinkable that investment bankers would want to live anywhere other than on Hong Kong Island. Now, West Kowloon is home to fund managers and their spouses, with all the restaurants, shopping and gyms that are a prerequisite for some to lead a luxurious life style. The new Kowloon Station where the ICC is being developed is now home to prime office, retail, residential and hotel properties and prices are at historical highs.

Traditional high-end areas are Mid-Levels, Southside of HK Island and The Peak. The Peak is the traditional area for high net worth purchasers. Severn 8, a luxury town house development, concluded a transaction at HK$56,000 (S$10,220) psf in June, and developer Sun Hung Kai Properties also achieved a record price for an apartment when they sold a penthouse unit in their Arch development above Kowloon Station for HK$41,100 psf. This now holds the record price for an apartment surpassing Mid-Levels.

For those that want houses, developers are also focusing on building villa properties in the New Territories close to the border with Guangdong Province. Wealthy factory owners in the Shenzhen SEZ prefer to live close to the border and high quality properties are between HK$5,000-9,000 per sq ft.

Gary Knowles, head of residential services at Cushman and Wakefield’s Hong Kong office, suggested that ‘the expat community in Hong Kong has grown on the back of the financial sector. Due to the rapid increase in office rents, many banks have moved their back office to less expensive locations and the relocation of the airport to Chek Lap Kok has led to an increase in popular residential locations away from the more traditional areas of HK Island and Sai Kung’.

Other infrastructure developments are also affecting popular locations, with the Bridge Link to Macau and Zhuhai new rail links between the New Territories and HK Island as well as the redevelopment of the old Kai Tak Airport. The new Airport Express link has seen a plentiful supply of new residential properties built on the West Kowloon reclamation above the Airport Express stations.

Land sale auctions in Hong Kong have been limited and the majority of new residential developments are being generated by Urban Renewal Authority redeveloping older areas of HK and Kowloon.

Upcoming luxury developments are The Cullinan above Kowloon Station (which will be HK’s tallest glass wall residential building) and the latest phase of Residence Bel-Air in Pokfulam on the Island.

The writer is managing director, Cushman & Wakefield Singapore

Fairly sound fundamentals for GCBs

Source : Business Times - 26 Sep 2008

Prices of Good Class Bungalows are expected to hold steady at least for the rest of the year. STEVEN MING and AVIN SEOW explain why

GOOD Class Bungalows (GCBs), as defined by the Urban Redevelopment Authority (URA), are bungalows that sit on at least 1,400 sq m of land and are located within one of URA’s 39 designated GCB areas. The more popular GCB addresses are located within Nassim, Cluny, Bishopsgate and White House Park estates. They are widely viewed as a barometer of the overall health of the economy.

These bungalows are homes to the upper echelon of Singapore society - successful businessmen, high flying professionals and captains of industries. This housing segment does not have a high concentration of foreign buyers as they are generally not allowed to acquire any landed properties, except on Sentosa Cove.

The recent slew of bad economic news on global economic conditions has slowed down the sentiment-sensitive property market, as seen by the lower sales volume and fewer development launches. Together with the rest of the market, the GCB segment is feeling the impact of an economic slowdown, although from a price point, it has been relatively unscathed to-date.

The first eight months of 2008 saw a total of just 31 GCBs worth some $550 million changing hands, down from the 84 transactions worth $1.1 billion in the same period last year. The first six months accounted for 27 of the 31 transactions in the review period, signalling a significant slowdown in activity after June. Transaction volume has declined to its lowest since 1998.

On the other hand, the transacted value of each GCB this year has averaged around $16 million, with eight GCBs transacted remarkably above the $20 million quantum.

Consequently, the average price of a GCB stands at around $836 per sq ft (psf) as at end-August 2008, more than twice the average price of $365 psf transacted in 2005. The highest price paid this year in terms of psf is for a property located at Leedon Road, sold in May for $1,303 psf. It is observed that for GCBs transacted this year at over $1,000 psf on land area, most were sold with a new or relatively new bungalow, or a bungalow that had undergone some recent refurbishment and hence been able to command the price premium.

In spite of the much hyped pessimism overhanging the property market, the underlying fundamentals of the GCBs remain fairly sound.

Firstly, the inherent scarcity of land in Singapore should continue to lend support to the landed housing segment, especially GCBs, given there are only about 2,400 of such homes in Singapore. It is little wonder then that these prestigious homes are much sought after and justifiably more expensive over time.

We also note that there is growing accumulated wealth in Singapore, as backed by a recent World Wealth 2007 Report by Merrill Lynch and Capgemini. The report said that the number of millionaires in Singapore with net assets of at least US$1 million has grown by 15.3 per cent per annum to 77,000 (or 1.7 per cent of the population) in tandem with recent strong economic performance of the Asian region. The new and more accumulated wealth among Singaporeans creates new demand for the limited number of GCBs, which will then lend support to the current prices.

Government initiatives like the integrated resorts, Formula One (F1) race, the revamp of the Orchard Road shopping belt and the growing stature of Singapore as a financial hub should also lend more support to the property market in the longer term. The economy will receive its much-needed jab in the arm once these initiatives are up and running successfully.

The integrated resorts at Marina Bay and Sentosa, scheduled to be ready by 2009 and 2010 respectively, are expected to create an additional 75,000 jobs island-wide and generate millions of revenue for the government - and hence boost the economy. The same spillover effects are expected from the F1 and other government initiatives.

GCBs tend to be bought and kept as a long term investment. A GCB owner’s average hold of the property is for well over 10 years. Drawing from past performance, GCBs have proven to be a very stable and secure investment.

For example, a GCB located along Second Avenue, which was transacted at a price of $4 million, or $142 psf, in 1990, was sold again in 2003 at around $8 million, or $280 psf, according to the URA’s lodged caveats. Similarly, a unit located along Mount Echo Park bought for $9.3 million, or $501 psf, in 1996 was sold at $13.3 million, or $714 psf, this year.

The high construction cost is another factor shoring up the current GCB prices. According to Rider Levett Bucknall’s May 2008 report, construction cost for landed detached homes has risen by more than 20 per cent year-on-year to about $311-$525 psf of construction floor area. Therefore, given today’s higher replacement cost as a result of the higher construction cost, buyers would prefer GCBs that are reasonably well-maintained and priced with minimal refurbishment required.

Outlook

The extent of the impact of the US crisis on Singapore property market is as good as anyone’s guess. However, if history were anything to go by, where a major crisis like the 1997 Asian Crisis led to a plunge in property prices, GCB prices should also come under significant downward pressures once the US credit crisis fully blows out.

The 1997 Asian Crisis then saw average prices of GCBs reaching a high of $637 psf before sliding by more than 70 per cent to $359 psf in the following year.

With US recession imminent, it should be no surprise if history replays itself with a free fall in asset prices especially since given that the current US sub-prime is widely seen as a crisis with a magnitude stronger than the 1997 Asian Crisis.

However, there are no strong indications yet to subscribe to such a pessimistic view, especially after taking the above mentioned factors into consideration. Barring a greater-than-expected slowdown in US economy and sudden changes in macroeconomic conditions, GCB prices are expected to hold steady at least for the remainder of the year.

Steven Ming is director of Savills Prestige Homes; Avin Seow is analyst, research & consultancy, at Savills Singapore

Developers tap starchitects for added cachet

Source : Business Times - 26 Sep 2008

THE phenomenon known as the starchitect has been around for a while but it was only after 1997 - when the Guggenheim Museum in Bilbao, Spain, became an international hit - did these architects become global celebrities.

The Guggenheim Museum in Bilbao was designed by the eminent American starchitect Frank Gehry. While the titanium-clad museum is spectacular, it was the fact that the museum had such a huge multiplier effect on the economy of the little seaside town that got many municipal governments (and some developers too) excited.

Within the first three years of opening, it was reported that the museum was receiving almost one million visitors a year, generating about US$130 million for the town’s economy, and helping the local government collect over US$20 million in taxes.

This multiplier effect has since been dubbed the Bilbao effect and governments and developers alike have been scrambling to sign up starchitects in hopes of replicating it.

Singapore came close to having a Frank Gehry designed development after CapitaLand signed him up to design their proposal for the integrated resort at Sentosa.

CapitaLand did not win but it never lost sight of the power of starchitecture. Earlier this year, CapitaLand announced that it had signed on Zaha Hadid to design its new condominium development at Farrer Road. And in the universe of starchitects, few are more stellar than Ms Hadid.

Patricia Chia, CEO of CapitaLand Residential Singapore added: ‘In a challenging market where homebuyers are faced with many choices, it becomes even more important to create a distinct point of differentiation for our developments.’

Ms Hadid is certainly a good designer but developers now also appreciate the cachet a starchitect’s name carries. ‘We believe that Zaha’s signature style and international brand position, together with the site’s many attributes, will provide a strong competitive edge for us when we launch the project in 2009,’ added Ms Chia.

Keppel Land also snagged a starchitect Daniel Libeskind for Reflections at Keppel Bay back in 2006 when ‘iconic architecture’ was the buzzword of the day.

Keppel Land general manager (marketing) Albert Foo added: ‘With globalisation, consumers are now well travelled and informed, and have over time, developed a taste for fine living. As such, the home has gone beyond brick and mortar to factor in lifestyle, luxury, prestige and unique product offering to appeal to these discerning customers.’

Of course, developers know they have to pay a premium for starchitects’ services. In 2006, Mr Libeskind himself said: ‘There are premiums. And if it is worth it, it is worth it.’

Some starchitects are more savvy at parleying their names. Philippe Starck, who has pop-star status, co-founded the design, marketing and branding company yoo Inspired by Starck and has Heeton Holdings as its first client in Singapore. For Heeton, getting Starck on board for its new Grange Road development also helps their own brand.

Heeton chief operating officer and executive director Danny Low said: ‘It is a fantastic opportunity for us to collaborate with the world famous Philippe Starck and this development will further enhance Heeton’s profile both locally and regionally.’

Mr Low said that there was definitely a price premium over local designers but he is confident that it will pay off. ‘From their previous track record, the Philippe Starck brand has been able to achieve premiums in the range of 10-25 per cent, and selling 20-30 per cent faster than other competitive developments launched at the same time,’ he added.

Far East Organization (FEO) is no stranger to starchitects either, having worked with the likes of Arquitectonica, and more recently Rem Koolhaas’ OMA.

Chia Boon Kuah, COO (Property Sales) at FEO, added that most of their luxury home buyers have homes in other international cities. ‘With Singapore staging itself to be a vibrant global city attracting international businesses and talent, there will be demand for world-class accommodation complete with top notch services and facilities,’ he added.

But the partnership with international architects is just one aspect of the value-add that FEO’s luxury developments bring to our buyers, Mr Chia said.

Mr Chia also believes that interest in brand-name architecture and design is not a new thing, but he noted: ‘Internationally, homes designed by famous architects in the past remains one of the most coveted addresses.’

Upping the ante is Wing Tai which has commissioned not one but two starchitects - Jean Nouvel and Toyo Ito - to design Le Nouvel Ardmore in Ardmore Park and Belle Vue Residences in Oxley Walk.

Looking at the designs in more detail reveals that regardless of their star status, starchitects do deliver that certain je nes sais quoi.

For Le Nouvel Ardmore, Mr Nouvel somehow manages to weave living bamboo into the 33-storey facade of the building while Mr Ito sculps organic spaces out of glass and concrete to mimic the branches of trees for Belle Vue Residences.

Is it art or architecture? With starchitects, you get both.

Property prices, rents set to fall in Asian cities

Source : Straits Times - 26 Sep 2008

Property prices and rents in Asia’s financial centres of Hong Kong, Singapore and Tokyo are set to fall as banks scale back hiring and investments in the global financial turmoil.

But while banks lay off tens of thousands in the United States, in Asia they are more likely to step back from ambitious expansion plans, so property markets will slip rather than slide.

In Hong Kong, property agents were scrapping to clinch a deal to put new tenants into three floors at the IFC2 building occupied by Lehman Brothers, which could have won them as much as US$2million (S$2.8 million) in commission.

But with Nomura Holdings snapping up Lehman’s Asia operations, the Japanese bank will probably keep most of the space as its own Hong Kong office is in the same building.

However, a reshuffling of tenants in the city is still likely.

Although the Central district, dominated by landlord Hongkong Land, is chock-a-block, rents will probably fall by 25 per cent by the end of next year as cheaper new offices across the harbour hit the market, says Macquarie Securities.

‘There’s a lot of supply coming on to the market,’ said Mr Richard Pyvis, chairman of CLSA Capital Partners, which runs private equity property funds. ‘Just look at that big joint out there,’ he added, pointing across Hong Kong’s harbour to the 118-storey International Commerce Centre (ICC) built by Sun Hung Kai Properties.

With prime Hong Kong office rents almost quadrupling since Sars ravaged the economy in 2003, the likes of Morgan Stanley, Credit Suisse and Deutsche Bank have agreed to move to the ICC building.

But now they could choose not to take up options for more space, or even off-load some.

‘Lots of banks are committed to long leases but some tenants could look to sub-lease space like they did after the dot.com bubble burst,’ said a property agent who works with several global banks but asked not to be identified because of commercial sensitivity.

‘That will put pressure on rents.’

The situation is similar in Singapore.

A whole new office project called the Marina Bay Financial Centre (MBFC) is under construction, spurred by the creation of 50,000 jobs since 2004 as hedge funds and banks lapped up incentives to expand in the city-state.

A loss of a fifth of those new jobs would cause monthly office rents to fall 47 per cent and capital values to drop 34 per cent by 2012, according to UBS analyst Regina Lim. It would hit landlords such as City Developments and CapitaCommercial Trust.

Mr Wilson Kwong, general manager of the management firm for MBFC, said two-thirds of the 150,000 sq m of office space in the project’s first phase had been pre-leased, but conceded that some tenants might choose to sub-let space if they could not fill it.

The US$2 billion development, built by a venture between Cheung Kong Holdings, Hongkong Land and Keppel Land, will eventually provide over 300,000 sq m of office space.

‘Given the current uncertainty in the global economy, we expect some caution from larger corporations with their leasing commitments,’ Mr Kwong said.

‘But many international companies still see Asia as an engine of growth and are confident of Singapore’s role as a key hub in the regional and global financial systems.’

In Tokyo, more gloom will fall on the property market because Morgan Stanley and Goldman Sachs will probably scale back their Japanese property investments, said Credit Suisse analyst Yoji Otani.

As they switch to commercial banks regulated by the US Federal Reserve, the two investment banks are expected to sell high-risk assets such as properties and unlock equity in real estate funds to meet capital adequacy requirements.

Mr Otani predicted falling values will be accompanied by a 5 per cent fall in average Tokyo office rents next year and a 10 per cent drop for grade-B buildings.

Spruce up your personal space

Source : Business Times - 26 Sep 2008

IT’S NO secret that the upper echelons of Singaporean society love branded clothes, accessories and cars. But they crave designer labels on their furniture, too.

‘Interior design is increasingly geared towards incorporating branded furniture into personal tastes,’ said William Ong, executive chairman of Axis ID. ‘People are creating interiors that focus on their treasured items, and they are also willing to spend more on designer pieces.’

Premium furniture brand names like Poliform, Giorgetti, Minotti and Meridiani are making their way into local living rooms at an unprecedented pace.

Antonio Lupi bathroom fittings and SCIC kitchen cabinets have been installed in apartments and condos now come with Fendi Casa and Armani/Casa sofas and tables.

At Far East Organization’s Boulevard Vue, for example, buyers can have Poggenpohl kitchen cabinets and wardrobes, Antonio Lupi bathroom fittings and Toto Neorest water closets.

‘Many developers are looking to five and six-star hotels as their points of reference,’ said Grace Ng of real estate developer Colliers International. ‘More luxury items are being used, especially in high-end homes.’

Even traditionally non-furniture brands are looking to cash in on the rising demand for high-end homeware, parleying their existing properties into interior design ventures.

Bottega Veneta has branched out from handbags and wallets to create study desks in leather, while Ralph Lauren has diversified into gold cashmere-wool tweed throw pillows and velvet-upholstered lounge chairs.

‘We know clients who have paid thirty to forty thousand dollars for a dining set,’ said Mr Ong. ‘And there are those who pay upwards of twenty thousand dollars for a sofa set and consider it the norm. They don’t mind the high price, because they think it’s something they will enjoy using.’

Patty Mak of Suying Design said: ‘The high-end property homeowner wants interiors that are modern in terms of design language, but not minimalist in context.’

Homeowners are opting for furnishings that look rich, but not dated. According to Ms Mak, these include elaborate textures and prints on thick fabrics and embossed leathers.

‘Homeowners are keen on having items that make statements,’ she said. ‘It’s a joy for them to be able to showcase and own this type of furniture.’

Details should be simple yet sophisticated, declares Kunio Iwata, managing director of KKS International. Bold, natural materials, such as large stone in a rough finish, have replaced polished or laminated timber.

‘How one furnishes one’s home has become a benchmark of one’s success,’ explains Mr Ong. ‘Filling your home with exquisite furnishings, designer items and artwork represents the next level in sophistication.’

Why the shift towards such extravagance?

The trend could be explained by the increasingly global tastes of local consumers.

‘Clients nowadays are more enlightened, more well-travelled and more in tune with international design trends,’ said Eugel Yeo of Chik & Yeo Architects. ‘Increased affluence has also empowered them to make more discerning and bolder steps towards experimentation in design ideas.’

However, the prevalence of fancy fittings may also be attributed to soaring property prices. With the price of property through the roof, building cost now forms a relatively small percentage of a residence’s overall cost.

‘Property prices have shot up so much in Singapore,’ said Mr Ong. ‘If you have spent millions on your apartment, you want to furnish it in an appropriate way.’

Regardless of reason, it is clear that high-end property owners are hardly skimping on filling their homes with only the best and brightest of interior design names. Bathrooms are fitted out with imported rain showers and jacuzzi bathtubs, produced by companies like Laufen, Hansgrohe and Duravit - where toilet bowls can run up to US$1,300 apiece.

But a thousand-dollar WC does not a well-designed home make. Rather than just seeking extravagance, homeowners should look for a tasteful blend of furniture that is both elegant and practical.

‘Over-the-top, opulent decorative treatment that does not balance form is something that these buyers cannot relate to,’ said Ms Mak. ‘Homeowners need to feel that they can express their lifestyles in a simple language, and will seek to do so through a good selection of furniture, art and well-treated interiors.’

And it seems they are doing just that, splurging on luxury versions of every day items in order to integrate form with function.

Hoffen Designer wardrobe systems, for example, come in sliding, bi-fold and walk-in varieties. Their cabinet doors and drawers are equipped with ’soft-close’ mechanisms, which use shock absorbers to ensure that they shut slowly and soundlessly.

Even kitchen appliances have become high-end. Take, for instance, an aluminium Gaggenau coffee machine, which boasts a customised coffee strength selector and retails in Gaggenau’s online store for a whopping US$2,499 - on sale. Household appliances manufacturer Miele also offers graphic text displays on their ovens for convenient operation, and triple-glazed doors that are cool and safe to touch.

Ultimately, the message seems to be that quality is king. Many luxury pieces of furniture are painstakingly handmade, and are specifically designed to be timeless. ‘Craftsmanship is something that homeowners are willing to pay top dollar for,’ said Ms Mak.

People want to own what will last for the next five to ten years; and with the recent upsurge in affluence, they can. As Mr Ong puts it: ‘With high-end furnishings, quality is assured. And uniqueness is a given.’

Branded residences set to take off

Source : Business Times - 26 Sep 2008

Still in its infancy, the branded residential market in Asia has the potential to grow, write DESMOND SIM and MELISSA SNG

COMING home to an immaculately kept apartment with all the creature comforts or having a beach retreat at your own private villa with all the attendant luxuries are all possible in a branded residential development - the marriage of a luxury residential development and a reputable brand.

Such brands are typically from the luxury fashion world of the likes of Armani and Bulgari, or from an established designer like Yoo or Starck. Then there are the luxury hospitality brands such as St Regis and the Ritz Carlton.

Branding is imperative to an individual seeking a specific lifestyle that the brand espouses. A branded residential development not only provides the investors ownership of a tangible real estate, it also encompasses the brand’s image and value-added services. Branded residences thus become the epitome of an affluent lifestyle given the exclusivity and recognition that these brands provide, in addition to the security, trust and extensive privileges and services which other unbranded luxury residential developments do not generally offer.

Branded residential developments could either be single or mixed use located within an urban or resort setting. They provide the buyers the opportunity to enjoy a full range of services rendered by a branded hospitality service provider.

The target market for branded residential developments is of course the well-heeled high end of society. These affluent individuals have experienced similar quality services elsewhere and now seek the same uncompromised high quality hospitality services in their home country.

Branded residential developments usually command a premium. This is because they offer the owners a distinguished appeal with exclusively designed developments and luxury hotel services and amenities. This premium is estimated to range from 20 per cent up to 40 per cent as compared to similar unbranded residential developments.

While the branded residential market in the US and Europe is quite mature, this market is relatively non-existent and is still in its developing stage in South-east Asia. It is therefore not impossible to expect countries such as Indonesia, Thailand and Singapore to witness the continual development of this market.

Branded developments prefer locating in areas with strong resort markets or cities that offer occupiers and investors the opportunity for a second home. For example, Bali and Phuket are favoured for their unique cultures and luscious beaches. Singapore on the other hand, offers the unique blend of a modern multi-racial city set in a tropical environment.

Rising affluence in Asia is another primary driver for this growth. According to World Wealth Report by Merrill Lynch and Capgemini, the number of high net worth individuals (HNWI) grew by 6 per cent while the Ultra-HNWI band grew by 8.8 per cent in population size in 2006 globally.

Asian countries recorded the fastest growth in terms of the number of HNWIs. India, China, South Korea, Indonesia, Singapore and the United Arab Emirates are in the top 10 markets in HNWI population growth. Other countries in this list include Brazil, Slovakia, Czech Republic and Russia. Collectively, Asia currently holds a quarter of the global high net worth individuals.

According to the same World Wealth Report, Asia’s high net worth wealth will grow at 7.9 per cent per annum and is projected to reach US$13.9 trillion by 2012. The Asia-Pacific region wealth market is expected to surpass Europe as the second wealthiest region after North America in the next five years.

Using real disposable income as an indicator of rising affluence, Asia as a region has the highest disposable income compared to West Europe and North America. As at 2007, the Asian disposable income has a 22 per cent and 47 per cent gap over North America and Western Europe respectively.

With rising affluence globally and regionally, demand for branded residential developments is likely to increase in tandem. Furthermore, it is the affluent from Asia Pacific that are most likely to spend on luxury items and judging by their investment portfolios, Asians have a greater affinity for tangible assets such as real estate and cash compared to their Western counterparts.

An investment in branded residential developments can be for personal occupancy or for income purposes which will help defray the carrying costs when these properties are leased. The demand for branded residential developments could therefore come from a mixture of high net worth individuals and institutions situated locally, regionally or across continents. Some examples of these investors include real estate funds, and individual investors from the Middle East, China, India, Indonesia and Eastern Europe.

It should be highlighted that investments in the branded residential development may differ from country to country.

With potential demand on the rise, the branded residential development market is set to grow in this region. While there is already an established market of branded residential developments in certain cities in South-east Asia, there is also a strong pipeline of branded residential coming on stream over the next few years. In terms of existing developments, the major players include St Regis in both Bali and Singapore and Four Seasons in Bali and Langkawi. Some other notable developments include Bulgari in Bali, Ritz Carlton in Bali and Marriott in Phuket.

Thailand seems to lead this market in terms of future supply. The St Regis Group and Regent Group will each open a branded residential development in Bangkok, Four Seasons and Shangri La in Phuket and Conrad in Koh Samui.

In addition, the St Regis Group and Regent Group is each developing a branded residential development in Kuala Lumpur while Singapore will welcome the completion of a Ritz Carlton branded residential development in the next couple of years.

The branded residential market in Asia is still in its infancy but the market has the potential to grow. We are already seeing a number of developments mushrooming around Asia.

There is also a strong investment demand from high net worth investors looking for branded products where price is not a major issue.

Desmond Sim is associate director of research and consultancy while Melissa Sng is research analyst, Jones Lang LaSalle

Singapore prime areas beckon

Source : Business Times - 26 Sep 2008

High-end homes in these exclusive areas appeal to foreign buyers whose numbers have risen over the years

IN Singapore, Districts 9, 10 and 11 are traditionally recognised as prime residential areas.

Districts 9 and 10 are located around the main shopping belt of Orchard Road (Orchard, Cairnhill, River Valley, Ardmore, Holland Road, Tanglin), while District 11 is situated to the north of Orchard Road, in the Bukit Timah, Watten Estate, Novena and Thomson areas.

Since 2005, District 1 (the financial district) and Sentosa Cove have been new additions to Singapore’s prime residential market.

While offering a much-admired lifestyle like no other in Singapore, developments in these prime areas offer an exclusive sanctuary for an individual or family, amid the bustle of city life.

Ranked high on appeal, prices of homes in these areas also come with a hefty price tag. It is not surprising that the developments surrounding or within the Orchard Road area have been some of the most expensive properties in Singapore. With Orchard Road renowned as the epicentre of Singapore’s shopping and entertainment district as well as upcoming malls that seek to titillate one’s senses, the heart of the 1,650ha urban landscape of the Central Area is set to undergo a slew of changes.

On the same note, older prestigious residential projects in the area are usually situated on a five-minute drive from Orchard Road, typically nestled in quiet enclaves. This has changed over the years as we see newer projects planned to be visually apparent from Orchard Road itself compared to those built in the 1980s.

Likewise, Orchard Road is gradually being transformed with new malls such as Orchard Central and Ion Orchard set to enhance the shopping scene. Not only has this led to an alteration of Orchard Road’s urban landscape, but it has also enhanced the nature of high-end developments in Singapore. While still able to furnish a level of opulence, exclusivity and uniqueness, high-end developments are now embedded into the flurry of urban activity, with Orchard Road as its backdrop.

To buttress these claims, the large number of collective sales in recent years would eventually contribute to the remodelling of high-end urban areas.

From 2005 to 2007, a total of 116 residential projects in District 9,10 and 11 were sold in collective sales for re-development. Given this substantial number, and with freedom to re-develop, older residential buildings in the high-end districts would increasingly give way to modern and taller apartment blocks that feature modern architectural designs with complete range of recreational facilities.

Furthermore, some of the new high-end condominiums also offer the luxury of space as seen in developments in the Ardmore Park and Draycott area where the units are larger than 200 sq m.

High-end luxury homes in the traditional prime districts, with their enduring charm, have always been highly regarded by those with large coffers and a distinct taste for the luxuriant high life. With chicly designed homes that offer a lush and lavish lifestyle, residential developments in these areas have drawn the interest of both locals and foreigners alike.

Over the past three years, the number of homes bought by foreigners has risen from around 3,600 in 2005 to about 9,100 in 2007. The proportion of foreign buyers islandwide for all landed and non-landed homes stood at 25.6 per cent as at 2Q 2008, a marginal fall of 2.3 percentage points from the previous quarter.

Over the last 13 years, the proportion of foreigners that purchased all types of private homes (excluding executive condominium units) islandwide reached its peak in 2007 when this figure registered at 25.7 per cent. Regardless of this slight slackening in terms of the proportion of foreign buyers in Singapore, the 25.6 per cent registered in 2Q 2008 is still 3.6 percentage points higher than the five-year quarterly average figure.

Foreign buyers originate from various continents and based on 1H 2008 statistics, the majority, 17.7 per cent, were from Indonesia. Not far behind, Malaysians also formed a significant proportion at 17.6 per cent followed by those from India and China. Farther across oceans and land masses, buyers from the UK and the US are also evident in Singapore’s private residential property market with a proportion of 8.7 per cent and 2.3 per cent respectively as at 1H 2008.

Most foreign home-buyers and investors would prefer to acquire a condominium unit in the prime districts, and figures indicate that for District 9, 10 and 11, the proportion that has purchased both landed and non-landed homes in these two districts was a considerable 35 per cent in 2007.

Driving forces behind foreigners’ interest in residential properties here can stem from a multitude of reasons. One major compelling reason is the efficiency, safety and open business environment in Singapore. There are also Singapore government policies in place to welcome foreigners to live here.

The service industry, especially the financial services segment has seen robust growth over the past decade. This has seen an increase in high-paying jobs, which have attracted many highly skilled foreigners to work in Singapore.

Coupled with various other socio-political reasons, the cosmopolitan city-state of Singapore is endless in its appeal. Not only was Singapore ranked as the best place for Asian expatriates to reside in earlier on in the year, but a recent poll also highlights that expatriates have rated Singapore to be the best place in the world to live, especially in terms of the quality of accommodation. With the introduction of the two integrated resorts and added casinos to boot, the F1 night races and a host of other initiatives, Singapore is also gradually becoming a more interesting place to work, live and play.

In addition, well-heeled investors prefer real estate in the prime districts because property prices in these areas would always be among the first to increase during a property boom. Moreover, investment in Singapore’s real estate is deemed to be relatively low risk in Asia.

With prime residential districts timeless in their appeal, it is still not too late to buy a property in these swanky, plush neighbourhoods within a city that is becoming more enchanting and cosmopolitan. An urban oasis in Singapore’s private residential landscape, these prime areas offer a splendour and lifestyle like no other.

This article is contributed by Knight Frank Consultancy & Research Dept

Singapore property investment: Spoilt for choice

Source : Business Times - 26 Sep 2008

Home buyers have a wide range of projects to choose from that will match their lifestyles, write CHUA CHOR HOON and ONG KAH SENG

PROPERTY investment requires substantial capital outlay and it takes a longer time to dispose of it compared to other assets like shares, especially in a soft market. Important factors to consider before making a purchase therefore include:

~ Purpose of purchase, ie whether for owner-occupation or investment;
~ Your budget and the price of the property;
~ Surrounding environment;
~ Proximity to amenities such as MRT stations, schools, and shopping centres;
~ Rental and resale values (especially if you are buying for investment);
~ and Reputation of the developer.

Many of these factors are related to location, which is often cited as the most important criterion in property purchase. Besides the traditional prime districts 9, 10 and 11, there are other areas worth considering.

The east coast has always been a favourite among Singaporeans, being close to the city and beach, easily accessible to the airport, and with many amenities like shopping, food and beverage, and the Marina Bay golf course. Faced with high rents in the prime districts, the East Coast has also become a popular alternative with many expatriates.

Joo Chiat and Katong are rich in the culture of Eurasian and Peranakan communities, and their food and architecture. Residents in the East Coast will also enjoy proximity to the Sports Hub when it is completed in a few years’ time. Besides Parkway Parade and Kallang Leisure Park, the Sports Hub will offer 441,000 sq ft of commercial space and the redevelopment of Katong Mall is expected to have about 185 retail units.

There are ample choices of developments to suit different budgets. Developments with sea views such as The Belvedere, Water Place and Sanctuary Green enjoy strong leasing interest with monthly median rentals ranging from $3.80 to $4.50 per sq ft.

The last three years have seen other areas getting popular as they offer alternative quality lifestyle living.

Waterfront living, which in the past had been mostly confined to the east and by the Singapore River, gathered momentum in the last few years with areas like Sentosa Cove, Keppel Bay and Marina Bay coming up.

Sentosa Cove offers luxurious houses and condominiums with sea or canal views, and more than 50 per cent of the buyers are foreigners. Many of the properties are bought as weekend or holiday homes. Keppel Bay offers exhilarating views of Sentosa, ships cruising in and out of the harbour front and pleasure boats berthed at Marina at Keppel Bay.

Since the completion of Caribbean at Keppel Bay in 2004, the Harbourfront area has livened up with many lifestyle amenities such as VivoCity, St James Power Station, Marina at Keppel Bay and Jewel Box at Mount Faber.

Future developments that residents in Sentosa Cove and Keppel Bay can look forward to are the integrated resort at Sentosa and the government’s development of the Southern Ridges and waterfront.

The Southern Ridges, Labrador area and Keppel waterfront will collectively form a major recreational and leisure destination at the southern part of Singapore. Already bridge connections have been made to link the 9km chain of green, open spaces across Mount Faber Park, Telok Blangah Hill Park and Kent Ridge Park. Soon, an elevated boardwalk over the sea will be built skirting the foothills of Bukit Chermin, and connect eastwards to the future promenade at The Reflections at Keppel Bay condominium project and westwards to Labrador Park.

According to URA statistics, Caribbean at Keppel Bay consistently enjoys one of the highest rentals among condominiums islandwide. Its median rent was $6.40 per sq ft in 2Q 2008. The potential supply in the area is fairly limited. Besides the uncompleted The Reflections at Keppel Bay, with 507 units available out of a total 1,129 units as at end 2Q 2008, the only other projects in the pipeline in the area are 307 units on a parcel next to Caribbean at Keppel Bay and 94 units on Keppel Island.

At Marina Bay, there will be plenty of buzz from the Marina Bay Sands integrated resort, Marina Bay Shoppes, and events and activities that are being/will be held in the bay. Marina Bay Shoppes will provide 800,000 sq ft of retail space, close to the one million sq ft in VivoCity. Nearby is the uncompleted Gardens at Marina South which will provide nature relief from the hustle and bustle.

Tiong Bahru, with its MRT station, Tiong Bahru Plaza, conserved buildings, Tiong Bahru market and hawker centre and freehold condominiums like Twin Regency, Regency Suites and The Regency at Tiong Bahru, has a strong following for its convenience of transport and amenities. The area is attractive with many expatriates and working professionals who like the quaint living environment near their workplaces. Monthly rents of Twin Regency, which was completed in 2007, are generally above $4.50 per sq ft.

Other growing fringe city areas are at Selegie and Beach Road/Kallang area. Both are near the Bras Basah/Bugis area which is developing nicely into a bustling arts, cultural, entertainment and education hub. The rich history and conserved shophouses at Beach Road and Kampong Glam offer a variety of experiences with their traditional trades, interesting shops and food outlets. Nearby at Bugis, Illuma will be completed soon by end of the year.

At Selegie, there are upcoming malls like Wilkie Edge, while Tekka Mall is being re-positioned and re-named The Verge. New residential developments include Parc Emily and Parc Mackenzie. Monthly rents of Parc Emily are at least $4.50 per sq ft while some units were recently sold for about $1,100 to $1,200 per sq ft. Projects currently available for sale include Parc Sophia and Mount Sophia Suites, with the latter not fully released.

At the Beach Road/Kallang area, the government plans to develop the Ophir-Rochor corridor into a vibrant office cluster for financial and business institutions that will complement the financial district at Marina Bay and Raffles Place. The Circle Line will further enhance the accessibility and connectivity of the vicinity.

Further up at Kallang Riverside, plans are announced in the draft Master Plan 2008 to develop it into a commercial hub with a residential enclave capitalising on the beach and waterfront. Launched at about $1,400 per sq ft last year, The Riverine by the Park, a 96-unit development at Kallang Road, was well-received and fully sold in weeks. A more recent launch is Concourse Skyline with selling price of $1,500-$1,800 per sq ft, which will be able to take advantage of an area that is anticipated to grow into a sought-after mixed commercial and residential area at the city fringe and with waterfront views of the Kallang River and the sea.

Property buyers are now spoilt for choice, as more areas take off, backed by the government’s plan to introduce city living and develop different parts of the island to provide for varied lifestyle needs. Understanding the attractions and potential of each area is therefore important so that it will be easier to sell or rent the property that is purchased and to ensure that there is better capital protection or appreciation.

Chua Chor Hoon is senior director, while Ong Kah Seng is assistant manager, DTZ Research Singapore

Sentosa Cove a coveted address

Source : Business Times - 26 Sep 2008

CHIA SIEW CHUIN and AUDREY TAN look at the projects that make up Singapore’s exclusive marina residential community

FANCY revelling in a resort home that’s just under 15 minutes from the central business district and shopping malls? Where can you enjoy a round of golf at an international golf course situated right at your doorstep? And if travel is on the cards, the airport is just a 30-minute ride away. If that sounds appealing to you and you have anywhere from $2 million to $20 million to spare, a resort home in Sentosa Cove could be the answer.

Sentosa Cove is to Singapore what Sanctuary Cove is to Australia and the French Riviera is to France. Set on the eastern shore of Sentosa island (just south of the main Singapore island), Sentosa Cove, which spans 117 hectares of mostly reclaimed land, is undergoing a transformation that will see it become Singapore’s first and only integrated oceanfront gated marina residential community.

When completed in 2010, Sentosa Cove will be a luxurious estate comprising some 2,500 99-year leasehold homes in the form of oceanfront villas, waterway bungalows, hillside mansions and upscale condominiums. These will be complemented by an intimate marina village offering supporting amenities such as the 240-berth One Degree 15 Marina, the 320-room W Hotel being developed jointly by City Developments and Starwood, and a three-storey retail and commercial complex with a wide array of shops, upmarket F&B outlets, spa and fitness centre and small-office-home-office (SoHo) units.

To top it all, the development of Resorts World at Sentosa, Singapore’s second integrated resort with a casino, will undeniably attract high-rollers who covet luxury homes to invest in Sentosa Cove, making it the Monte Carlo of Asia.

There are no restrictions on foreigners purchasing condominium units in this enclave. However, foreigners looking to purchase a landed home here will need to submit an abridged application form to the Land Dealings (Approval) Unit of the Singapore Land Authority for approval to purchase what is classified as restricted property in Singapore.

This abridged application, only available for landed homes in Sentosa Cove, will enable a foreigner to receive fast-track approval in 48 hours on the back of simplified purchasing criteria and approval procedure. The catch is that foreigners who have been granted the abridged approval will be required to occupy the landed homes themselves and must not own more than one restricted property in Singapore.

Furthermore, as one of the options under the Global Investor Programme, an applicant can apply for Singapore permanent residency by utilising his property investment in Singapore to form up to half the minimum $2 million required to be invested in approved businesses or investments in Singapore.

With these attractions, it is no wonder that high net worth individuals from all over the world have been making a beeline for a slice of this luxurious resort home market. Foreigners are believed to have accounted for 50 per cent of the property sales in Sentosa Cove. By 2010, 60 per cent of the 10,000 Sentosa Cove residents will likely be foreigners, thus setting the stage for a truly international community.

Since 2004, at least 12 projects comprising six condominium and six landed housing developments have been launched for sale. These projects have enjoyed brisk sales, save for those launched after the onset of the US sub-prime mortgage crisis in 3Q 2007.

Here is a a snapshot of some of the projects in Sentosa Cove.

NON-LANDED DEVELOPMENTS

The Berth by the Cove: This was the first condominium development to be launched and completed in Sentosa Cove. The development consists of 15 six-storey blocks and provides an array of facilities including 25 berths for private yachts. All the apartments have views of the ocean, with the master bedroom and living rooms facing the sea.

There are 200 units in the development comprising 188 two- to four-bedrooms apartments and penthouses, ranging from 1,015 sq ft to 3,100 sq ft; and two duplex sky villas of 6,028 sq ft, each with a balcony lap pool.

The Oceanfront @ Sentosa Cove: This seafront condominium comprising three 15-storey and two 13-storey blocks is by far the largest and tallest residence in Sentosa Cove. Designed by world-renowned architects Wimberly Allison Tong and Goo Inc and Antonio Citterio, it features a host of luxurious facilities including a fully equipped gym and an infinity lap pool stretching into the horizon.

There are 264 units in the development, comprising 239 two- to four-bedrooms apartments ranging from 1,216 sq ft to 4,282 sq ft, seven sky suites of 3,326 sq ft to 5,038 sq ft, two villas measuring 4,585 sq ft to 4,704 sq ft and 16 sky villas of 2,745 to 8,095 sq ft.

Turquoise: One of the most recently launched developments in Sentosa Cove, Turquoise comprises two six-storey blocks with attics fronted by a waterway near the fairways for views of the golf courses. It boasts full condominium facilities as well as 21 private berths within the development.

Turquoise will have a total of 91 residential units, with 78 three- to four-bedrooms ranging from 2,088 sq ft to 3,035 sq ft, 10 duplex penthouses of 3,111 sq ft to 3,746 sq ft with private spa pools and terraces and three sky villas ranging from 6,900 sq ft to 7,987 sq ft with private sky gyms, infinity lap pools and terraces. Units are still available for sale by the developer.

Marina Collection: Marina Collection is the latest condominium project to be launched in Sentosa Cove. Located next to the One Degree 15 Marina, the development comprises three four-storey blocks. Facilities provided include a lap pool, gym, clubhouse and concierge service. Buyers are offered One Degree 15 Marina club membership and 40 berths will be made available for lease to owners.

The 124-unit project will have 93 three- to four-bedroom apartments ranging from 1,873 sq ft to 3,272 sq ft and 31 penthouses (with private lap pools) measuring 3,369 sq ft to 4,693 sq ft. The project is still open for sale by the developer.

LANDED DEVELOPMENTS

Those who want to design and build their own homes have the chance to do so on Sentosa Cove with land parcels on offer for sale. So popular are they that all the land parcels at Sentosa Cove have been sold as at end-August 2008. There are, however, opportunities to purchase landed homes in the primary and secondary markets. Landed projects that keen buyers can still lay their hands on include:

The Berthside: The Berthside comprises eight terraces with their own private berth and a spacious deck area for outdoor dining. It is the first landed housing development to be launched and completed in Sentosa Cove. The land size for each terrace unit ranges from 2,324 to 3,851 sq ft, with a built-up area of 4,168 sq ft to 5,170 sq ft.

Coral Island: This is an island in the North Cove of Sentosa Cove. It houses 21 bungalows, each equipped with its own private mooring berth for a pleasure craft. The bungalows are built on land plots ranging from 6,000 sq ft to 15,000 sq ft and have built-up areas of between 6,000 sq ft and 12,000 sq ft.

FUTURE PROJECTS

In the pipeline are some 535 condominium and landed houses in Sentosa Cove, which could potentially be launched in the next two to three quarters. These include the 105 yet-to-be-launched condominium units from Turquoise and Marina Collection as well as City Developments’ 228-unit Sentosa Quayside and Ho Bee Group’s 151-unit Seascape.

Beyond the next nine months, would-be purchasers and investors can also look forward to another estimated tally of 350 condominiums and landed homes that are likely to be generated from developers’ land banks.

Buoyant demand for Sentosa Cove’s resort homes has resulted in the trebling of launch prices of non-landed properties, from an average of $785 per sq ft for the first condominium project, The Berth by the Cove, launched in November 2004, to $2,800 psf for latest release for The Marina Collection in December 2007.

Based on caveats lodged, prices of landed homes in Sentosa Cove have similarly trended up steeply. Prices of bungalows have increased some 75 per cent from an average of $743 psf of land area as at late 2005 to $1,303 psf of land area as at end-2007. For terrace houses, average prices have leaped by 185 per cent from $847 psf of land area as at 1Q 2005 to $2,414 per sq ft as at 1H 2008.

With the stock of resort homes in Sentosa Cove capped at 2,500 units, one can be assured that the exclusivity and resort ambience of homes in the marina community will be preserved. In addition, the rising population of well-heeled expatriates brought about by Singapore’s growing status as a global city and regional financial hub will continue to support demand for resort homes in Sentosa Cove. Hence, despite the current market weakness due to global economic and financial turbulence, the mid-to-long term prospects for resort homes in Sentosa Cove are bright.

Singapore’s sound political, social, economic and geographic environment that is free from natural disasters makes buying a home in this island state, be it for investment, holiday or retirement, a worthwhile option. Hence, laying one’s bet on Sentosa Cove could just be the match made in investment heaven.

Chia Siew Chuin is associate director while Audrey Tan is analyst at Research & Advisory, Colliers International