Saturday, February 14, 2009

Alexis at Alexandra pulls in the punters

Source : Business Times - 13 Feb 2009

PREVIEW sales of the 293-unit Alexis at Alexandra Road started yesterday and developer Fission Group said that at least 50 per cent of the development has been sold at prices ranging from $850 per square foot (psf) to $1,100 psf.

The company was coy on the exact number of units sold but it may have been a tad too modest. Some buyers BT spoke with at the crowded show flat said that they were told by marketing agents that up to 85 per cent of the units had been sold by 7.30 pm.

‘The prices are competitive compared with other condominiums, but its proximity to the MRT and CBD makes the Alexis a good investment,’ said Steven Kwok, a potential buyer who had been quoted a price of $1,050-$1,100 psf.

Another buyer said that compared to the recently launched Caspian ($580 psf), Alexis is not cheap but he hopes to resell the property for a profit. He also said that compared to what was quoted in an invitation he had received earlier, prices quoted at the showflat were 10 per cent higher.

According to official data, three units at The Anchorage next door sold at $848-$929 psf in the fourth quarter while a unit at Queens on Stirling Road sold for $894 psf this month.

Fission Group has tied up with United Overseas Bank to offer an interest absorption scheme, which, like the now-scrapped deferred payment scheme, allows buyers to defer any payments beyond an initial downpayment until the project receives Temporary Occupation Permit (TOP).

Alexis is being built on the former Alexandra Centre which was put up for collective sale in 2007 for around $300 per square per plot ratio. It is not known how much Fission Group paid for the site.

A seasoned property consultant said that interest in Alexis is likely because most of the units are small. At between 400 sq ft for a one-bedroom unit and 650 sq ft for a two-bedder, prices range from $450,000 to $650,000.

He also said that there was ’still liquidity in the market’ and investors with a two-year investment horizon would still find property attractive. ‘There is no point putting money in a bank,’ he added.

Over on the east coast, City Developments Ltd (CDL) will launch a new phase for its Livia condominium in Pasir Ris at an average price of $620 psf, or about $30 psf less than the launch price of the first phase. A total of 30 units in two stacks will be offered in the second phase.

Chia Ngiang Hong, group general manager of CDL said: ‘The company senses a renewal of market interest and improvement in buyer sentiment. More people have been visiting our showrooms, and many have made offers for units that have yet to be launched.’


Property broker’s lament

Source : Straits Times - 14 Feb 2009

‘It is no joy to be associated with this negative image.’

MR COLIN CHOO: ‘I agree with the proposal in last Saturday’s editorial, ‘Urgent: Laws to tighten property brokerage trade’, to license individual estate agents, in addition to property agencies. This is consistent with the practice of other professions, including cab drivers and hawkers. Anyone who has a licence at stake is likely to think twice before resorting to unethical practices. Self-policing by agencies is uneven and unreliable. Given the disparate sizes of the agencies, it is hard to monitor thousands of agents in large firms. An agent dismissed by one agency for unethical practice can easily switch to another and continue brokering. There is no carrot or stick for agencies to regulate the conduct of their agents either, as the agents are not under their direct employment. As a long-time estate agent, I have seen enough blatantly unethical behaviour among agents and it is no joy to be associated with this negative image.’


Bright ideas for the city

Source : Straits Times - 14 Feb 2009

It could soon look like it is Christmas all year round in downtown Singapore: More buildings have pretty lights integrated into their design, instead of using them only as accessories during the festive season.

A new building in Selegie Road which literally dazzles is Wilkie Edge, a 12-storey development comprising office and retail space and serviced apartment units.

Designed by award-winning local firm Woha, it has a $3.5-million facade featuring a combination of high- and low-resolution LED display screens, a silver skin of perforated aluminium and a textured curtain wall in louvres and glass.

The display screen uses one row of LED lights per square metre which are projected onto the wall rather than onto the street. All this comes together in an energy-saving solution to produce an effect that is ’soft and transparent, like watercolour’, says a spokesman for CapitaCommercial Trust (CCT), which owns the complex.

LEDs, or light-emitting diodes, are semiconductor diodes that emit light when an electric current is passed through. They consume less power than conventional fluorescent lights.

The spokesman adds: ‘This design is better than just having the most up-to-date, largest and brightest LED screen, which becomes outdated very quickly and consumes huge amounts of power.’

While Singapore is nowhere near the brash neons of Hong Kong and Japan or the lovers’ glow of Paris, such LED installations and display screens mean it is bye-bye to boring spotlights and signage.

And it is about time, too. This architectural trend has been around for a decade overseas, industry experts tell Life!.

Another building here to have seen the light is Palais Renaissance in Orchard Road. It boasts the world’s first double-skin glass facade with built-in three dimensional, colour-changing LED light pattern.

The upscale mall started its $16-million renovations in June last year and the facade was completed in December. According to City Developments Limited, which owns Palais, the facade alone costs $8 million.

Three layers of lights come on and off alternately to create rhythmic patterns of blue, purple and green behind glass panels with white, square ceramic patterns.

The ‘dancing’ lights are by the award-winning architectural lighting designer Hiroyasu Shoji, whose work includes the Mikimoto Ginza Headquarters, an icon in Tokyo.

Says chief architect Seiya Muraki of Kajima Design Asia who was behind the mall’s overall new design: ‘When architecture is required to express much more nowadays, it’s not surprising that lighting is incorporated.’

The new Palais uses nearly 15,000 computer-controlled LED lights but only 20 per cent are switched on at any one time, therefore conserving electricity.

LED lights are also eco-friendly because they last 50,000 to 100,000 hours, generally 50 times longer than traditional fluorescent lights.

A light touch in Orchard and Bugis

The rise of these sparkly facades in architecture design is in line with the Urban Redevelopment Authority’s (URA) Lighting Masterplan, which was announced in 2006. It was the Government’s call to light up the city.

The plan targets the Civic District - the area around Fullerton Hotel and the Padang, the Central Business District (CBD) and the Marina Bay area. According to URA, within the Civic District and CBD, lights mostly shone onto building facades to brighten the architecture.

However, in areas such as Orchard Road, Bras Basah and Bugis, lights can be incorporated into the building design.

At the other end of Orchard Road, The Cathay also displays a light touch.

After undergoing extensive renovations, the 70-year-old landmark reopened its doors in March 2006 and showed off a glittery face. The new look was the result of a $100-million collaboration between Tange Associates Japan and RDC Architects in Singapore.

According to a Tange spokesman, colour panels visible from the exterior are located inside the building, while throbbing LED lights line the external curtain wall.

The facade lighting of The Cathay is subtle, complementing the design’s ‘urban skin’ concept - a glass layer wrapping the top half of the structure, which makes the building seem transparent.

Look out also for boutique mall Paragon, which underwent a $45-million makeover at the start of last year. Its new look can already be seen but it is not completed yet.

The facade lighting will be seen in its full glory only at the end of this month. It comprises LED lights housed within layers of aluminium panels and fritted glass, which is chemically toughened glass with a ceramic base.

In the ‘arts and heritage’ district at Bugis, the bright new spark is Iluma, which is billed as an ‘urban entertainment centre’.

Also designed by Woha, it has a custom-made innovative media facade comprising a scale-like layer of diamond-shaped lights. It is touted as a world’s first. A Woha spokesman says its dramatic effect will be showcased at the project’s public opening in the second quarter of this year.

Despite these developments, do not expect Singapore to turn into a Shinjuku.

According to URA, glittering screens and flashing images of advertisements on building facades are still limited to areas with ‘high levels of pedestrians and street activities, such as Orchard Road, Chinatown and Bras Basah-Bugis’.

A URA spokesman says: ‘While advertisement signs can contribute to the colour and vibrancy of the streetscape, their proliferation can also have a negative impact on the character of the area.

‘URA’s guidelines ensure that the signs are mounted on the building facades and are at a level where they can relate to and contribute to the street activities and not negatively impact on the city skyline.’


Chinese property hunters catch on to US bargains

Source : Business Times - 14 Feb 2009

Slumping US real estate prices are proving to be irresistible to many

BEIJING lawyer Ying Guohua is heading to the United States on a shopping trip, looking not for designer clothes or jewellery, but for a US$1 million home in New York City or Los Angeles.

He expects to get a bargain. Mr Ying is part of a growing number of Chinese who are joining tours organised especially for investors who want to take advantage of slumping US real estate prices amid a financial crisis.

‘It’s a great time to buy because of the financial crisis, and houses in large cities like New York and Los Angeles will definitely go up in a few years,’ Mr Ying said. The home is an investment, but he’s also planning long term: He hopes his five-year-old son might use it if he goes to college in the US.

While China’s ultra-rich have been buying property in the US for years, the buying tours are new, made attractive by still-rising Chinese income levels and American real estate prices that have been falling for two and a half years.

More than 100 Chinese buyers have joined such tours since late 2008, according to Chen Hang, the China-born vice-president of real estate at Fortune Group. The Pittsburgh, Pennsylvania, company shows foreclosed commercial property to Chinese buyers. ‘The Chinese are going to seize the opportunity to take advantage of some great deals,’ Mr Chen said.

Mr Ying, the Beijing lawyer, is one of 40 investors going to New York, California, Boston and Las Vegas on a Feb 24-March 6 tour organised by Beijing-based SouFun Holdings Ltd, a real estate website. SouFun plans to show participants foreclosed properties priced at US$300,000 to US$800,000.

‘We never thought these tours would garner such interest, but we’ve had an overwhelming response,’ said SouFun CEO Richard Dai. ‘Before, we heard of Chinese or Hong Kong movie stars buying homes in the US, and now more and more Chinese can afford to have the same.’

The home-buying opportunities mirror a larger trend. Cash-rich Chinese companies are looking to buy resources made suddenly cheaper by the downturn or companies suffering under the global debt meltdown. On Thursday, the Aluminum Corp of China, also known as Chinalco and the world’s leading aluminium producer, invested US$19.5 billion in debt-burdened global miner Rio Tinto Group - China’s biggest overseas investment to date. Because the authoritarian government has imposed controls limiting China’s exposure to international capital flows, the country has largely avoided the worst of the global financial crisis.

Meanwhile, high-level incomes have continued to rise. China had the world’s fifth-largest population of millionaires in 2008 with 391,000, up 20 per cent from the previous year, according to Boston Consulting Group.

But Chinese with money in the bank have few good investment options at home. Real estate prices have cooled and stock prices peaked in October 2007 after a two-year boom that saw shares rise six-fold in value. After years in which foreign money poured into China to take advantage of the hot economy, economists estimate that tens of billions of dollars began leaving the country in the last three months of 2008 as Chinese investors began bargain-hunting.

Chinese buyers are looking at both commercial property and homes to rent out or use on business trips. And the US has plenty of unsold homes to offer - 3.67 million as of the end of December, according to the National Association of Realtors.

Many buyers are unfamiliar with US markets, so they focus on well-known ethnic Chinese neighbourhoods, according to John Wu, president of the Chinese American Real Estate Professionals Association in San Gabriel, California.

Lion’s Property Development Group in New York City organises Chinese groups to visit New York homes. The company also treats visitors to Broadway shows and famous restaurants in hopes that they will take to the city and buy a US$1 million to US$2.5 million home.


Getting the ‘real’ in real estate

Source : Business Times - 14 Feb 2009

New interest-absorption schemes offered by developers through banks are attracting the smart money

JUDGING by the response to the recently launched Caspian and Alexis, real estate remains a key element of the typical Singaporean’s wealth-management strategy.

While cash is still king, real estate - like gold - is something tangible to hang on to. And recent downward price adjustments are making it an increasingly attractive asset class. What is making new launches even more enticing is that investors are cottoning on to the fact that new interest absorption schemes (IAS) offered by developers through banks are very much like the former deferred payment scheme (DPS).

At the recent launch of Alexis, units were not only offered with IAS but did not come at higher prices, typically 3 per cent more. Buyers, said mostly to be Singaporean investors, homed in. The project was almost fully sold in less than a week. Considering the depth of the economic downturn, this would seem to defy logic. So, could real estate be where the smart money is migrating to now?

Looking at yields from stocks, bonds and even fixed deposits, and comparing these with IAS, which is essentially an interest-free loan on almost all new property, the argument for putting your money, or at least some of it, into real estate is compelling - especially if you subscribe to the notion that real estate values always rise in the long run.

This last point is what differentiates property buyers now from those who bought in the run-up to peak prices in 2007 - they are more realistic.

Certainly, few buyers today would be hoping to make a fast buck. Indeed, prices may actually have some way to go before they hit bottom.

Reality appears to have set in, with investment horizons now longer than the time it takes to flip a property. The only danger is that if the recent surge in sales has more to do with IAS and less with the fundamentals of the market, recent experience is just another round of speculation, albeit a tiny one.

Does IAS encourage speculation? Some believe that unlike DPS, IAS is much more stringent insofar as terms go. A purchaser who is offered the IAS has to take out a loan with a bank, which will carry out credit checks before granting the loan. In addition, the purchaser has to make progress payments, part of which may be disbursed from the bank loan, to the developer. This amounts to 60 per cent of the purchase price of the property before the temporary occupation permit (TOP) is granted, including 20 per cent at the downpayment stage.

With DPS, as little as 10 per cent of the purchase price was payable by the purchaser before TOP.

Given that a buyer has to commit to a loan and make progress payments, the authorities do not believe IAS encourages speculation.

Hopefully, then, what the market is experiencing now is the realisation that real estate is fundamentally a safe asset class - not a flash in the pan brought on by speculation.


Launch of 6 more condos likely in next few months

Source : Business Times - 11 Feb 2009

DEVELOPERS of at least six mass-market private condos could release their projects in the next few months, riding on buying momentum generated lately by the Caspian condo near Jurong Lake - despite the recession.

Property consultancy CB Richard Ellis (CBRE) tips Oasis @ Elias, The Gale on Flora Road in Upper Changi and Ascentia Sky on Alexandra Road among projects for possible launch in the next two quarters.

Others include UOL’s 646-unit condo at Simei Street 4, Frasers Centrepoint’s project in Woodleigh Close and a 571-unit condo by NTUC Choice Homes at Lor 2/3 Toa Payoh near Braddell MRT Station.

All but one of these projects are on 99-year-leasehold sites bought through government land tenders in the past 14 months. The exception is The Gale, a freehold condo to be developed by Tripartite Developers as the latest in its series of condo projects in the Upper Changi location.

Frasers Centrepoint’s recent sales spurt for Caspian has shown where the base price is for the mass market.

The developer released the first 250 units of the 99-year-leasehold condo during a preview last week, at an average price of $580 per square foot (psf), followed by a second batch of about 130 better-facing units at $600 psf. So far, more than 330 units have been sold in the development, which is next to Lakeside MRT Station.

BT understands the developer is likely to offer a further 150 units during a public launch this weekend - and that pricing is likely to be calibrated upwards.

CBRE executive director Joseph Tan attributes the good response to Caspian partly to its timely launch, coinciding with the government’s announcement in Parliament that it will upgrade, expand and transform Jurong into a business and recreational hub.

‘The project is also priced competitively, within the affordability of HDB upgraders,’ he said. ‘The sales momentum seen at Caspian is an encouragement to developers to get their projects ready for launch in the second and third quarters of 2009.’

Knight Frank executive director Peter Ow said that in current conditions, mass-market suburban projects aimed at HDB upgraders are more likely to sell than projects in other segments.

‘After all, HDB upgraders buying private homes for their own occupation are the core group of buyers left today,’ he said. ‘Investors and ’specu-vestors’ are lying low. And as for foreign buyers, investing in overseas properties might not be a priority right now.’

Amid today’s tight lending climate, owner-occupiers are also more likely to secure finance from banks than investors, provided they have the means to service their loans, Mr Ow said.

He reckons that for condos in outlying areas near MRT stations, the price resistance for a new launch in today’s market would probably be in the $600-650 psf range on average.

Another analyst put a price resistance in a higher band of $750-$850 psf for condos in mature HDB estates such as Toa Payoh and Ang Mo Kio.


Friday, February 13, 2009

LTA to spend S$43m on building cycling tracks in HDB estates

Source : Channel NewsAsia - 13 Feb 2009

More is going to be done to promote cycling in Singapore. The Land Transport Authority (LTA) will spend S$43 million to design and construct dedicated cycling tracks next to pedestrian footpaths in HDB estates.

The first phase of this programme will be implemented in Tampines, Yishun, Sembawang, Pasir Ris and Taman Jurong.

Foldable bicycles will also be allowed on MRT trains and public buses during off-peak hours on weekdays and all-day on Saturdays, Sundays and public holidays, from March 15.

The scheme follows an earlier six-month trial where an average of 70 foldable bicycles were brought on board trains and two foldable bicycles on board public buses each week.

LTA said eight out of 10 train commuters and about seven out of 10 bus commuters surveyed support the initiative.


Changi Airport sets up $70m aid kitty

February 13, 2009

CHANGI Airport has set up a $70-million aid kitty to help airlines and cargo handlers, as well as retail and dining outlets, deal with the business slowdown.

Amid the global economic downturn, the airport expects passenger traffic to dip 8.5 per cent to 34.7 million this year, compared to last year.

Cargo volumes could slide 5.1 per cent to 1.77 million tonnes.

The $70-million relief package, announced by Mrs Lim Hwee Hua, Senior Minister of State (Finance and Transport), in Parliament yesterday, will include rental rebates and advertising support.

To incentivise cargo agents to bring in more business, warehouse and office tenants within the Changi Airfreight Centre will also receive cash payouts of $10 per tonne of cargo handled every quarter.

The total payout will be subject to a maximum, which is equivalent to 15 per cent of their rent during the time.

Changi’s latest relief scheme is on top of a year-long help package which was extended to airlines and ground handlers last month.

Worth $130 million, it is an extension of a six-year scheme to cement Singapore’s position as an aviation centre.

The Air Hub Development Fund was introduced in 2003 to help carriers hit by the impact of the Sars crisis.

With yesterday’s announcement, the Civil Aviation Authority of Singapore (CAAS) will spend $200 million this year to help its troubled partners.

Welcoming the helping hand, Mr Ken Tse, managing director of airport cosmetics and perfume chain Nuance-Watson, said: ‘Airport retailers are operating under extremely challenging conditions so any assistance that comes our way is a positive thing and very much welcomed.’

Addressing MP’s queries and concerns, Mrs Lim said that to protect the competitiveness and dynamism of Changi’s air hub status, three things need to be done.

  • Help the aviation industry to reduce and contain costs - which is what the help packages are for.
  • Push for greater liberalisation in the regional air travel market.
  • Continue with infrastructure upgrading and expansion.Liberalisation is ‘critical to Changi as a hub because the starting point to an air hub’s connectivity is the rights for the airlines to operate’, she said.

    The benefits are clear. With the opening of the Singapore-Kuala Lumpur air market, passenger traffic in 2008 grew by 11 per cent to 1.89 million passengers, compared to the year before.

    Airport expansion and upgrading works are also in full swing with ongoing projects at Terminal 1 and the Budget Terminal.

    Mr Cedric Foo (West Coast GRC) and Dr Lam Pin Min (Ang Mo Kio GRC) also asked for an update on plans to corporatise Changi Airport, which will see the CAAS split into two later this year - one part to run the airport and the other to regulate the industry.

    Plans are on track, Mrs Lim said, adding that the downturn has not diminished the rationale for corporatisation.

    The change will give Changi Airport ‘the flexibility to respond to changes in the aviation industry and the global business environment, and to stay ahead of the competition’, she said.

  • Jackie Chan to donate antique houses

    Source : Straits Times - 13 Feb 2009

    Hong Kong action star Jackie Chan is donating antique wooden houses from China worth more than $100 million to Singapore’s upcoming fourth university.

    The structures, now sitting in a warehouse in Hong Kong, are from the private collection of gongfu king Chan, a lover of Chinese history.

    They consist of seven wooden housing structures and a performing stage originating from the Ming and Qing dynasties dating back more than 200 years. The houses are anchored in stone slabs.

    These rare examples of Chinese housing from a bygone era are set to be displayed at the new university’s campus in Changi South when it is completed in 2011, according to a story in Lianhe Zaobao yesterday.

    The Chinese newspaper also reported Chan’s property manager Simon Kwan as saying that the popular star wanted the precious objects to be in safe-keeping.

    Chan, 54, had originally approached the Hong Kong government about donating his collection but changed his mind when it did not respond quickly enough, the report said.

    He decided on Singapore because his collection would be of educational value to the students seeing it on campus.

    Mr Kwan declined to go into details about the project when contacted by Life!.

    However, he confirmed that Chan had met local government officials at the site of the upcoming university last year to discuss his intended donation.

    The tertiary institution will be built on land originally earmarked for the now-aborted Asian campus of the University of New South Wales and will offer courses in design, engineering, architecture and business.

    Mr Kwan, 52, who handles Chan’s property deals here, said there should be ‘no problem bringing these structures out of China’.

    But he added that additional ‘paperwork on how to transport these structures and getting a local architect to put them together’ has to be done before anything can be finalised.

    He also said that the collection, which has ’stones taller than a man, that hold the wooden structures together’, had been amassed by antique-lover Chan over nearly 20 years.

    His collecting passion was also influenced by his late father, who loved old Chinese wooden houses. Chan’s dad, Charlie, died in February last year at the age of 93 after battling cancer.

    The star’s love of all things historical can be seen in his property purchases here. He owns the 105-year-old Jinriksha Station at 1 Neil Road, once the central depot for rickshaw drivers in Singapore, and the four-storey The 50s complex. Both are historic buildings within the Neil Road conservation area.

    He also has contemporary interests, owning condo units in the Orchard Road area, and opened Jackie Chan’s Cafe, Coffee and Tea at 1 Nassim Road two years ago.

    Life! asked Mr Jeffrey Goh, principal architect at local firm GP Design, about what might be involved in putting Chan’s antique houses on display.

    His firm has not been approached about the project but Mr Goh said that for such old wooden houses, a lot of work would have to go into conserving doors, walls and pillars which ‘might have intricate detailing because of their Chinese origins’.

    The 59-year-old has done conservation work on more than 100 houses here in areas of special architectural interest such as Joo Chiat, Geylang, Selegie and North Bridge Road.

    Rotting wood would also need to be replaced and this has to blend in with the original structure, he added.

    He said: ‘The project sounds very interesting and I wouldn’t mind taking it up. But I would need to do a lot of research to find out more about these houses first.’


    Price war in the works?


    Source : Today - 13 Feb 2009

    CDL offers Valentine’s Day discount for Pasir Ris project

    AT A time when consumers think twice before forking out money for big-ticket items, a major property developer here is dangling outright discounts to lure buyers. And if customers do bite, the move may mark the start of a price war, say industry observers.

    Yesterday, Mainboard-listed City Developments Limited (CDL) fired the first salvo by revealing a 5-per-cent discount for selected units at Livia, a mass-market condominium in Pasir Ris.

    The announcement was decibels louder than usual: Up until now, developers have largely offered discounts to walk-in customers, rather than publicly trumpeting the promotions. CDL is expected to be taking out advertisements for its special offer over the next few days.

    The occasion for the promotion? Valentine’s Day tomorrow, according to CDL’s press release obtained by Today.

    Cupid, however, is not going to be the clincher for customers, said Colliers International’s research and consultancy director Tay Huey Ying. It’s the “pretty attractive pricing”, she said.

    Livia’s special price is about $620 per square foot (psf), said CDL, versus the average of $650psf during the phase-one launch in July last year when 340 of the 360 units released were sold. This equates to a discount of 5 per cent.

    CDL “senses a renewal of market interest and improvement in buyer sentiment”, said group general manager Chia Ngiang Hong.

    Although CDL said it would apply the offer to just 30 units of the 99-year leasehold project, the reality is likely to see some 60 units let go at that price, a marketing agent said, on condition of anonymity.

    That is a small number compared to the 384 units still unsold. But observers say the V-Day offer may be a starting point, to test if the price is “right”. Said an industry insider: “People have been coming to showflats and just nibbling. Singaporeans want to see prices move.”

    A three-bedroom unit at Livia will now cost $752,000, CDL said, versus the phase-one price of $793,000.

    How long will the special offer last?

    “A limited period,” CDL said.

    Could this spark a price war? CDL’s competitors declined comment yesterday.

    Colliers’ Ms Tay said developers were likely to resort to cutting prices - and hence eroding their profit margins - “only for projects that they’re keen to move in order to ease cash flow”.

    It’s more likely that developers will roll out “a combination of competitive pricing and innovative marketing strategies”, said Ms Tay.

    Demand, however, is certainly there. Crowds yesterday thronged Alexis, a freehold condominium near Queenstown MRT station, during the first day of its launch. By evening, more than half of the 293-unit project was sold, developer EC Prime told Today.

    Agents there dangled a big sweetener: Discounts of as high as 28 per cent, resulting in prices between $850 and $1,150psf.

    While there were interested owner-occupiers, some people were overheard asking: “What are my chances of flipping this?”

    Last week, Frasers Centrepoint sold 300 units of the 712-unit Caspian project in Jurong West within the first three days for an average of $580 psf. Most of the buyers were Singaporean HDB upgraders.


    Stamford Land’s Perth block pre-leased

    Source : Straits Times - 13 Feb 2009

    STAMFORD Land Corp has defied the downturn by fully pre-leasing a 14-storey office block in downtown Perth to an Australian unit of energy giant Chevron Corporation.

    Chevron Australia has committed to a 10-year deal for the Grade A building - a clear sign of the firm’s confidence in the Western Australian mining industry.

    Chevron is the largest holder of untapped natural gas resources in Australia.

    ‘Given the abysmal global economy, it is heartening to secure a long-term lease of 10 years with a blue-chip name like Chevron,’ said Stamford Land chief financial officer Tay Lai Wat.

    ‘The rent level secured is comparable if not higher than (that for) Sydney’s Grade A buildings. We expect to enjoy a stable income flow.’

    The firm’s Perth project - it consists of the office tower still under construction and three smaller existing buildings - has an estimated on completion value of A$130million (S$136million).

    The expected net rental income of all three buildings is about A$9.5million a year, the company said.

    Two of the three existing blocks are heritage-listed and have been leased out; the other building has been ’spoken for’ but has not yet been rented, said Mr Tay.

    The vacancy rate in Australia’s office market is rising and rents are dropping. Even the market in Perth, which had nearly zero vacancy in the first half of last year, is weakening.

    Stamford Land negotiated the rent for the office tower, which will be completed next year, a few months ago at about $650 per sqm per year.

    Separately, Stamford Land’s net profit for the nine months ended Dec31 fell 51per cent to $10.76million.

    Revenue was down 16per cent at $180.2million. The hotel business contributed $160.7million in revenue, down from $174.8million in the same period a year ago.

    Earnings per share was 1.25 cents, down from 2.53 cents a year ago, while net asset value per share dropped from 51 cents at the end of March last year to 40 cents.

    Its shares closed 0.5 cent higher at 25 cents yesterday.


    CDL cuts prices of Livia units by about 5%

    Source : Straits Times - 13 Feb 2009

    CITY Developments (CDL) plans to launch 30 units of its 724-unit Livia condominium project in Pasir Ris at an average of $620 per sq ft, about 5 per cent or $30 psf below the initial launch price last July.

    The sale of the 30 three- to four-bedroom units starts tomorrow. Another 30 apartments may be released at the same price later.

    The new pricing, announced yesterday, puts the price range of a three-bedroom unit at the 99-year leasehold condo from $752,000 to about $800,000.

    This compares with last year’s price of $793,000 and up for a three-bedder.

    The developer will not be compensating earlier buyers for the price difference, given that the market has taken a big turn for the worse.

    ‘This adjustment in the long run will be better for everybody,’ said a CDL spokesman. The area’s values will rise in future as new developments are completed, he said.

    CDL’s group general manager, Mr Chia Ngiang Hong, said the company had held back from selling new phases of Livia because of poor market conditions in the light of economic uncertainty.

    The change of mind is due to revived interest being expressed by visitors to the development’s showflat, he said.

    ‘The company senses a renewal of market interest and improvement in buyer sentiment. More people have been visiting our showrooms, and many have made offers for units that have yet to be launched,’ said Mr Chia.

    The re-pricing of Livia units comes swiftly after the preview success of mass-market condo Caspian in Jurong West. Frasers Centrepoint has already sold 350 units of its 712-unit condo since last Thursday. The project was initially priced at $580 psf on average.

    Livia met with a favourable response when it was released in July last year, with buyers scooping up 160 units of the first 200 apartments released in just a few days. CDL has so far released 360 units and sold 340, leaving 384 units available for sale.


    S’pore welcomes Jackie Chan’s offer to donate old Chinese houses

    Source : Channel NewsAsia - 13 Feb 2009

    Singapore Foreign Affairs Minister George Yeo has said the offer by Hong Kong celebrity Jackie Chan to donate some old Chinese houses to Singapore’s new university would be a wonderful symbol of the proposed partnership between the upcoming university and a leading Chinese university.

    The collaboration initiative was agreed to between Chinese Premier Wen Jiabao and Singapore Prime Minister Lee Hsien Loong during their meeting in Beijing last October.

    Mr Yeo was responding to an article in the Chinese language paper Lianhe Zaobao which stated that Mr Chan wants to donate the houses from the Ming and Qing period to Singapore.

    “Mr Chan has discussed this offer with our Education Minister Dr Ng Eng Hen, who responded enthusiastically,” said Mr Yeo.

    He added that Mr Chan has been shown the proposed site of the New University in the East Coast by Chairman of the New University Steering Committee, Philip Ng.

    Mr Yeo added: “Mr Chan liked the location and thought that an educational institution was a fitting place where these Chinese houses could be enjoyed by generations of students and members of the public.

    “We are aware that approval from the Chinese authorities is required for the transfer of the houses and have raised this matter with them.”


    LTA to spend S$43m on building cycling tracks in HDB estates

    Source : Channel NewsAsia - 13 Feb 2009

    More is going to be done to promote cycling in Singapore. The Land Transport Authority (LTA) will spend S$43 million to design and construct dedicated cycling tracks next to pedestrian footpaths in HDB estates.

    The first phase of this programme will be implemented in Tampines, Yishun, Sembawang, Pasir Ris and Taman Jurong.

    Foldable bicycles will also be allowed on MRT trains and public buses during off-peak hours on weekdays and all-day on Saturdays, Sundays and public holidays, from March 15.

    The scheme follows an earlier six-month trial where an average of 70 foldable bicycles were brought on board trains and two foldable bicycles on board public buses each week.

    LTA said eight out of 10 train commuters and about seven out of 10 bus commuters surveyed support the initiative.


    Phase 1 of Circle Line to open on May 30


    Source : Channel NewsAsia - 13 Feb 2009

    Public transport ridership has been going up - and with it comes more crowding.

    To ease the situation, the government announced that two rail projects - Jurong East Modification project and the North-South Line extension - are being brought forward, and 22 new trains being bought.

    Still, with the changes only kicking in by 2011, the squeeze will still be on for a while.

    Last year, public transport ridership spiked by 7.4 per cent - one of the fastest rates in years. And the overcrowding is being felt on MRT trains.

    “MRT trains still suffer from an overcrowding problem. Has LTA (Land Transport Authority) reviewed the capacity? Is it possible to add more tracks on the existing lines, which are now overcrowded and have reached maximum capacity,” asked Cynthia Phua, MP for Aljunied GRC.

    With 900 additional train trips per week added since last year, that is the best the system can do in terms of train frequencies, given the current constraints.

    Speaking in Parliament on Thursday, Transport Minister Raymond Lim said the only way to increase capacity is through infrastructural changes.

    Currently, there is a bottleneck at the Jurong East Interchange station. The whole system is slowed down as the train does a turnaround, because there is only a single platform for this.

    LTA is now building a second platform so that two trains can turn around at the same time, with the project completion brought forward by a year to 2011.

    22 new trains are also being bought. When they enter the system, it should lower waiting times to as low as 2 minutes at the busiest stretches.

    Opening new lines will also ease the crunch. Phase 1 of the Circle Line will officially open on May 30. The new MRT line will open its first five stations - Bartley, Serangoon, Lorong Chuan, Bishan and Marymount.

    The other stages of the Circle Line are expected to open from 2010 onwards, and they are expected to divert about 10-15 per cent of passenger traffic.

    But such large infrastructure projects take time to kick in, with one of the main changes coming only in 2011. At the same time, public transport ridership is increasing, and may go up even further during the economic downturn. So the situation may just get worse before it gets better.

    One other major initiative this year is the LTA taking over the role of central bus network planner. This will be a two-stage process - first, talking to the industry, operators and experts, and then to grassroots representatives.

    The transport minister said: “One of our guiding principles is to avoid making any radical, big-bang-type changes to bus services. Commuters make more than three million trips on buses every day, and we are conscious that any change must be gradual. Otherwise, there will be mass confusion.

    “Our approach instead is to identify any gaps in connectivity, try to plug them, and see where bus services can be streamlined to improve efficiency of the network.”

    And it is only after this is done, can LTA look at how best to package the bus routes for competitive tendering.


    $60m lift for airport retailers?

    Source : Today - 13 Feb 2009

    AS air traffic falls, more than$60 million has been set aside to give retailers at Changi Airport a much needed lift.

    The Civil Aviation Authority of Singapore (CAAS) will provide a rental relief package - $43 million in rebates and $20 million for a newly set up “Promotions Development Fund” - for retail, F&B and services concessionaires to help them remain viable, Senior Minister of State (Transport) Lim Hwee Hua said yesterday.

    Last December, some $130 million was set aside to entrench airlines at Changi, which is expected to welcome 8.5 per cent fewer passengers and 5.1 per cent less in air cargo this year, according to Mrs Lim.

    She also updated Parliament on CAAS’ corporatisation exercise. The organisation will be split operationally into a private company and a regulator in April. The legal separation is set for July.

    Addressing MPs’ concerns about layoffs, Mrs Lim reiterated that the exercise is “not a cost-cutting” one, but would in fact create more jobs.

    “No retrenchment of staff is thus expected,” she said. “All staff will join the new company and new Civil Aviation Authority on ‘no worse-off’ terms at the point of transfer.”


    CAAS to give Changi Airport tenants another S$70m of rental rebates

    Source : Channel NewsAsia - 13 Feb 2009

    The Civil Aviation Authority of Singapore (CAAS) will extend S$70 million to help airport partners tide over the economic downturn.

    This is over and above the S$130 million Air Hub Development Fund announced earlier. The CAAS had, in December last year, announced an extension on this fund till end-2009.

    The money will go towards rental rebates and a Promotions Development Fund for retail, food and beverage (F&B) as well as services concessionaires at Changi Airport.

    The moves follow recent complaints of poor business by the Airport’s Terminal 3 retail and F&B tenants.

    To help boost their business, CAAS said there will be year-long shopping promotions and vouchers for passengers passing through the airport.


    Thursday, February 12, 2009

    Phase 1 of Circle Line to open on May 30

    Source : Channel NewsAsia - 13 Feb 2009

    Public transport ridership has been going up - and with it comes more crowding.

    To ease the situation, the government announced that two rail projects - Jurong East Modification project and the North-South Line extension - are being brought forward, and 22 new trains being bought.

    Still, with the changes only kicking in by 2011, the squeeze will still be on for a while.

    Last year, public transport ridership spiked by 7.4 per cent - one of the fastest rates in years. And the overcrowding is being felt on MRT trains.

    “MRT trains still suffer from an overcrowding problem. Has LTA (Land Transport Authority) reviewed the capacity? Is it possible to add more tracks on the existing lines, which are now overcrowded and have reached maximum capacity,” asked Cynthia Phua, MP for Aljunied GRC.

    With 900 additional train trips per week added since last year, that is the best the system can do in terms of train frequencies, given the current constraints.

    Speaking in Parliament on Thursday, Transport Minister Raymond Lim said the only way to increase capacity is through infrastructural changes.

    Currently, there is a bottleneck at the Jurong East Interchange station. The whole system is slowed down as the train does a turnaround, because there is only a single platform for this.

    LTA is now building a second platform so that two trains can turn around at the same time, with the project completion brought forward by a year to 2011.

    22 new trains are also being bought. When they enter the system, it should lower waiting times to as low as 2 minutes at the busiest stretches.

    Opening new lines will also ease the crunch. Phase 1 of the Circle Line will officially open on May 30. The new MRT line will open its first five stations - Bartley, Serangoon, Lorong Chuan, Bishan and Marymount.

    The other stages of the Circle Line are expected to open from 2010 onwards, and they are expected to divert about 10-15 per cent of passenger traffic.

    But such large infrastructure projects take time to kick in, with one of the main changes coming only in 2011. At the same time, public transport ridership is increasing, and may go up even further during the economic downturn. So the situation may just get worse before it gets better.

    One other major initiative this year is the LTA taking over the role of central bus network planner. This will be a two-stage process - first, talking to the industry, operators and experts, and then to grassroots representatives.

    The transport minister said: “One of our guiding principles is to avoid making any radical, big-bang-type changes to bus services. Commuters make more than three million trips on buses every day, and we are conscious that any change must be gradual. Otherwise, there will be mass confusion.

    “Our approach instead is to identify any gaps in connectivity, try to plug them, and see where bus services can be streamlined to improve efficiency of the network.”

    And it is only after this is done, can LTA look at how best to package the bus routes for competitive tendering.


    Phase 1 of Circle Line to open on May 30

    Source : Channel NewsAsia - 13 Feb 2009

    Public transport ridership has been going up - and with it comes more crowding.

    To ease the situation, the government announced that two rail projects - Jurong East Modification project and the North-South Line extension - are being brought forward, and 22 new trains being bought.

    Still, with the changes only kicking in by 2011, the squeeze will still be on for a while.

    Last year, public transport ridership spiked by 7.4 per cent - one of the fastest rates in years. And the overcrowding is being felt on MRT trains.

    “MRT trains still suffer from an overcrowding problem. Has LTA (Land Transport Authority) reviewed the capacity? Is it possible to add more tracks on the existing lines, which are now overcrowded and have reached maximum capacity,” asked Cynthia Phua, MP for Aljunied GRC.

    With 900 additional train trips per week added since last year, that is the best the system can do in terms of train frequencies, given the current constraints.

    Speaking in Parliament on Thursday, Transport Minister Raymond Lim said the only way to increase capacity is through infrastructural changes.

    Currently, there is a bottleneck at the Jurong East Interchange station. The whole system is slowed down as the train does a turnaround, because there is only a single platform for this.

    LTA is now building a second platform so that two trains can turn around at the same time, with the project completion brought forward by a year to 2011.

    22 new trains are also being bought. When they enter the system, it should lower waiting times to as low as 2 minutes at the busiest stretches.

    Opening new lines will also ease the crunch. Phase 1 of the Circle Line will officially open on May 30. The new MRT line will open its first five stations - Bartley, Serangoon, Lorong Chuan, Bishan and Marymount.

    The other stages of the Circle Line are expected to open from 2010 onwards, and they are expected to divert about 10-15 per cent of passenger traffic.

    But such large infrastructure projects take time to kick in, with one of the main changes coming only in 2011. At the same time, public transport ridership is increasing, and may go up even further during the economic downturn. So the situation may just get worse before it gets better.

    One other major initiative this year is the LTA taking over the role of central bus network planner. This will be a two-stage process - first, talking to the industry, operators and experts, and then to grassroots representatives.

    The transport minister said: “One of our guiding principles is to avoid making any radical, big-bang-type changes to bus services. Commuters make more than three million trips on buses every day, and we are conscious that any change must be gradual. Otherwise, there will be mass confusion.

    “Our approach instead is to identify any gaps in connectivity, try to plug them, and see where bus services can be streamlined to improve efficiency of the network.”

    And it is only after this is done, can LTA look at how best to package the bus routes for competitive tendering.


    Alexis: Developer offering discounts of 28% at condo project

    Source : Channel NewsAsia - 13 Feb 2009

    Singapore property prices have been coming down in line with the economic slowdown.

    But at least one developer is going a step further to attract homebuyers.

    Yi Kai Development and Fission Group, the developers of the 293-unit condominium Alexis@Alexandra, are offering discounts of 28 per cent to pull in the crowds.

    And the move appears to be paying off as potential homebuyers flocked to the opening of the development near Queenstown MRT.

    The offer ends on Thursday.

    The development includes 100 studio apartments, priced at about S$450,000 each. Two-bedroom units cost approximately S$660,000.

    That’s not an issue for buyers, some of whom snapped up several units at a go.

    But others are taking a more cautious approach.

    “I think the property market is really messy now. What if I regret it later? I’ll wait till things calm down. If there are leftover units, I’ll buy if I really like it,” said one member of the public.


    Hong Kong office rents tumble

    Source : Today - 12 Feb 2009

    HONG Kong prime office rents may fall a further 26 per cent this year as the global financial crisis prompts banks and investment companies to control spending, according to a report by property agency Colliers International.

    “The prime office market is predicted to experience a further downward adjustment due to the consolidation of the financial markets and the global economic outlook,” Colliers said.

    Office rents fell 13.4 per cent in the fourth quarter from the previous three months.

    Banks including HSBC Holdings and Standard Chartered have cut jobs in Hong Kong as the economy entered its first recession since 2003. HSBC said in November it had trimmed 500 jobs in Asia,90 per cent of which in Hong Kong. Standard Chartered in December said it would cut200 local positions.

    The report, covering 26 places in the Asia Pacific, showed office rents in the region declined 4 per cent on average in the fourth quarter from the previous three months.

    “Individual centres with a tenant profile highly geared toward the financial sector have experienced steeper rental corrections in the order of over10 per cent quarter-on-quarter,” Colliers said.


    China property prices post record fall in Jan

    Source : Business Times - 12 Feb 2009

    Chinese urban property prices fell by 0.9 per cent in January from a year earlier, the government said on Thursday, the steepest annual decline since official records began in 2005.

    But the month-on-month decline of 0.2 per cent in January was softer than the 0.5 per cent fall in December, the National Development and Reform Commission (NDRC) said, offering a measure of optimism that the housing market is near to bottoming out.

    The property sector is a pillar of the Chinese economy, accounting for about a quarter of all investment, so a sustained downturn in prices would weigh heavily on business activity and feed into the broader deflation threat.

    The 0.9 per cent annual drop in average property prices across 70 large- and medium-sized cities was down from December’s decrease of 0.4 per cent, the NDRC said on its website.

    The fall in December had been the first annual drop on record since the NDRC, which compiles the data together with the National Bureau of Statistics, began publishing the index in July 2005.

    Early last year, property prices had been increasing at a double-digit pace on an annual basis.


    Take-up of JTC industrial space falls 33% in Q4

    Source : Business Times - 12 Feb 2009

    NET take-up of industrial space fell again in Q4 2008 for industrial landlord JTC Corporation, as the downturn continued to weigh on businesses.

    JTC’s 2008 facilities report released yesterday shows the agency leased or rented out 20,000 sq metres of ready-built factory space in Q4 - a 33 per cent slide from Q3. Affected locations included flatted factories, business parks and standard factories.

    Some observers expected companies to return more space to JTC as the economy weakened, but this did not happen in Q4. In fact, termination of ready-built factory space dropped 30 per cent from Q3 to 21,200 sq m.

    Most of the terminations - 48 per cent - were because businesses consolidated their operations. The manufacturing sector, which includes electronics and precision engineering, accounted for more than half of the pull-back.

    JTC said the termination size was larger in Q3 because more companies moved out of space scheduled for ‘product renewal’ - this is when JTC systematically retires ageing facilities to redevelop sites.

    As DTZ’s senior director for research Chua Chor Hoon also suggested, some companies could have sub-let excess space instead of pulling out altogether in Q4. This helps them avoid relocation costs.

    After accounting for terminations, JTC’s net allocation of ready-built factory space in Q4 was minus-1,200 sq m, swinging further into negative territory from minus -500 sq m in Q3.

    Despite the weak Q4 showing, ready-built factory space enjoyed a decent net take-up rate for the whole of 2008 - net allocation was 90,700 sq m, up from 88,700 sq m in 2007.

    Much of the improvement was due to JTC leasing or renting out more business park space, especially in the first phase of the Fusionopolis development.

    The occupancy rate for ready-built factory space also rose in 2008 - to a 10-year high of 96.8 per cent.

    Take-up of JTC’s prepared industrial land fell in Q4. Across areas such as Jurong Island and Tuas Biomedical Park, which come complete with infrastructure for lessees to develop their facilities, net allocation was 17.5 hectares - 49 per cent down from Q3.

    Terminations fell more than 70 per cent to 6.1 ha in Q4. Industries supporting the manufacturing sector accounted for most of the pull-back.

    For 2008, net allocation of prepared industrial land was 200.9 ha. This was 41 per cent less than the 10-year high of 341.2 ha in 2007.

    JTC said 2008’s ’sustained performance was against the backdrop of global economic uncertainties and a very challenging environment towards the latter part of the year’.

    The manufacturing sector took up a much smaller proportion of prepared industrial land last year - 40 per cent of the gross allocation of 264.8 ha went to the sector, compared with 74 per cent in 2007.

    Weakness in the industrial property sector has emerged in the past few months. Data from the Urban Redevelopment Authority in January reflected lower rents and prices in Q4 2008 after more than four years of steady increases.


    Negative take-up of industrial space

    Source : Straits Times - 12 Feb 2009

    LANDLORD JTC Corp was hit by a sharp fall in the take-up of its industrial space during a tough fourth quarter.

    In ready-built factory space, lease terminations of 21,200sqm exceeded the 20,000 sq m of new space leased during the quarter, resulting in a negative net take-up of 1,200 sq m.

    This was a marked deterioration on the third quarter, when JTC reported the first negative net take-up for its ready-built factories since 2004 of 500 sq m.

    In prepared industrial land, the company remained in positive territory with a net take-up of 17.5ha. But the figure is less than half that seen in the third quarter.

    Total terminations of its ready-built facilities reached a five-year high during the whole of last year, rising to 108,000 sq m. Fewer tenants terminated their ready-built factory space in the fourth quarter, as compared with the third.

    Some 323 firms ended their leases, with the bulk of them being in multi-storey factories, up from 318 firms in 2007.

    Occupancy in this segment was at a 10-year high of 96.8 per cent last year. For the full year, take-up of ready-built facilities rose 4 per cent on the previous year.

    Take-up of prepared land slumped 41 per cent to 200.9ha. In all, 62 firms terminated leases, a rise on the 53 firms in 2007.

    Deteriorating market conditions forced JTC to last month grant 7,700 customers a 15 per cent rent rebate for one year, starting Jan 1. The move came after property experts predicted that the industrial sector would be further hit by the worsening economic climate.

    Companies are looking to renegotiate lower rents and move out or sub-let space, said Colliers International’s director of industrial sales Tan Boon Leong.

    He expects the vacancy rate in the industrial sector to rise once office rents fall nearer the rent of high-tech space - now hovering around $3.50 to $4.50 per sq ft.


    Flyer tenants fail to get compensation

    Source : Straits Times - 12 Feb 2009

    THE Singapore Flyer has rejected a demand for compensation made by a group of tenants at the attraction.

    It also denied claims made by the group that the Flyer was no longer viable or profitable.

    The tenants had sent a lawyer’s letter to the Flyer’s management last week alleging breaches in their tenancy agreement.

    In it, they claimed human traffic to the area had become ‘non-existent’ as a result of a breakdown on Dec 23 last year which left 173 people stranded in mid-air for up to six hours, and asked for compensation. They did not specify what they wanted.

    In a reply yesterday, the Flyer said it was ‘regrettable’ that the tenants had chosen their course of action at a time when it was ‘trying to sort out their default in rent payments’.

    It added that the tenants had no valid claim, saying: ‘At no time were your clients forced to shut down their operations.

    ‘Nor were your clients interrupted by the landlord in their operations. On the contrary, the landlord encouraged your clients to continue with their operations.’

    The Flyer’s management also said that it supported the tenants’ businesses at no extra cost by advertising their promotional activities in newspapers.

    The 14 tenants involved - the attraction has 30 in all - include Select Service Partner Singapore, which runs the Popeyes Chicken restaurant, Robert’s Coffee and sports bar O’Learys; and Apex-Pal International, which runs Japanese restaurant Hibiki.

    They were represented by lawyer Navinder Singh of Navin & Co.

    The letter was sent after several meetings arranged by the Flyer with several tenants, either collectively or individually, apparently failed to make headway.

    The Flyer’s management had given a one-week rental rebate to tenants last year, but many said this was inadequate as the attraction was closed for a month.

    When contacted yesterday, most of those involved in the action said that they were disappointed with the reply.

    One tenant who refused to be named said he was not surprised by the reply but he added: ‘We believe our lawyer will take care of our interests.’

    What will come next has not been determined, Mr Singh told The Straits Times. He said: ‘It was hoped that the Flyer would have appreciated the seriousness of the situation and used the opportunity to communicate with the tenants on their issues.’

    When contacted, a Flyer spokesman said: ‘We have nothing else to add to it (the reply). The Singapore Flyer management has and will continue to work closely with the tenants to improve overall patronage of the Flyer.’


    Integrated resort on course for year-end opening

    Source : Straits Times - 12 Feb 2009

    MARINA Bay Sands, Singapore’s first integrated resort, is on target to open at the end of the year, its president, Mr Nigel Roberts, said yesterday.

    His comments come after recent reports which raised the possibility that the resort would not be completed on time as a result of the global downturn.

    Mr Roberts said the resort is seeing ‘tremendous’ demand for its facilities.

    The 77th UFI congress in 2010 is so far the only confirmed event announced to the media.

    But there are more on the way. The integrated resort has received around 78 ‘expressions of interest’ for meetings, incentives and conventions up to 2014.

    It has also received more than 60 enquiries about its exhibition facilities for shows up to 2011, spanning industries such as maritime and semi-conductors, luxury consumer goods and textiles.

    When asked about the take-up of retail space, resort vice-president George Tanasijevich said it was continuing to target high-end tenants.

    He declined to elaborate further.


    DC rates may be cut in unforgiving market

    Source : Business Times - 12 Feb 2009

    Property consultants expect the government to make bigger cuts of up to 20 per cent in development charges (DC) for the upcoming revision effective March 1. And some observers say the authorities may even lower the proportion of the enhancement in land value that goes to the state.

    The bigger cuts in DC, which is payable for enhancing the use of some sites, may come despite a dearth of land transactions.

    This is because there is sufficient evidence that prices and rentals have fallen for condos, offices and industrial properties - a trend that points to lower land values.

    Explaining the residual land valuation method, Knight Frank managing director Tan Tiong Cheng says: “Condo prices have come down; that can be measured quite accurately. On the other hand, construction costs have eased at a more modest rate. This implies land values have fallen more than sale prices of apartments.”

    Property analysts say another challenge ahead for Chief Valuer would be to make an accurate assessment of property market conditions for the next six months for which the upcoming DC rates would remain applicable.

    Development charges must be paid for enhancing the use of some sites or building bigger projects on them. DC rates are revised twice yearly, on March 1 and Sept 1, by the Ministry of National Development (MND), in consultation with the Chief Valuer. They are specified according to use groups (such as landed residential, non-landed residential and commercial) across 118 geographical sectors or locations across Singapore. DTZ senior director (research) Chua Chor Hoon said: “We expect average DC rates for all major use groups to decline come March 1. Commercial and non-landed residential DC rates are likely to fall more, as prices and rents of these two major categories of properties have fallen more than the rest.”

    Jones Lang LaSalle’s associate director (research and consultancy) Desmond Sim predicts average DC rate cuts of about 20 per cent for landed and non-landed residential uses as well as for commercial use, and a 5 to 10 per cent reduction for industrial use. “For non-landed residential use, more downward pressure can be expected for high-end locations,” he added

    Colliers International forecasts average chops of 15 to 20 per cent for non-landed residential use, 10-12 per cent for commercial, 5-8 per cent for industrial, and up to 5 per cent for landed residential and hotel uses. Forecasts by both houses assume there is no reinstatement of DC formula to 50 per cent of enhancement in land value.

    Colliers says the biggest drops in non-landed residential DC rates of up to 25 per cent will be in luxury residential enclaves such as Ardmore Park, Orchard, Cairnhill, Tanglin and Cuscaden as well as on Sentosa Cove due to a steeper fall in values of luxury homes. Colliers director (research and consultancy) Tay Huey Ying suggests the biggest chops in commercial DC rates could be in outlying locations rather than in the CBD, arguing that spillover office demand to outside- CBD areas has cooled considerably lately, due to ample new supply of offices in the CBD.

    For industrial DC rates, Ms Tay reckons the largest cuts of up to 12 per cent may be seen in places like Jurong Industrial Estate, Mandai, Kranji and Woodlands based on the fact that some of these locations saw the biggest downward adjustments of about 10 per cent in JTC Corp’s land prices recently.

    A hot topic of discussion surrounding DC is whether the government will revert to the previous formula of calculating DC rates which creamed off 50 per cent of the enhancement in land value (instead of 70 per cent, since a rule change in July 2007 during the property bull run). Many consultants are making the case for reinstating the previous 50 per cent formula, though some are not holding their breaths for a change just yet.

    “If they make a change now, it may be seen as a knee-jerk reaction. The change could eventually still come, but perhaps one or two revisions later,” said Jones Lang LaSalle’s Mr Sim.

    Colliers’ Ms Tay argues for an immediate restoration of the 50 per cent formula. She said that prior to 1985, DC rates had also been on the 70 per cent formula until they were cut to 50 per cent during the recession that year. She said: “If in 1985, they deemed it fit to cut the DC rate to 50 per cent because of the recession, they should do the same now because we’re going through our worst recession.

    “In any case, sharing the appreciation in land value equally between government and private land owner is a fairer policy since the latter must be given sufficient incentive to bear the risk of development to encourage him to optimise scarce land resources.”

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

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

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


    Invest at your own risk

    Source : Today - 12 Feb 2009

    Bargain-hunting now comes with probability that prices could fall further

    PRIME properties in key cities such as London and New York have long been out of the price reach of most Singaporeans.

    However, the slide in prices and currencies caused by the global financial crisis has made such markets much more affordable for those who dare.

    Particularly attractive to potential Singapore investors are the United Kingdom, United States and Australia, whose currencies have fallen heavily against the Singapore dollar.

    In the UK for example, the sterling has fallen by one-third over the past year. Add price falls to that, and a Singapore investor may be able to snap up a London property for effectively half of what they would have paid a year ago in Singapore dollar terms. The Australian dollar has fallen by a similar margin.

    However, bargain-hunting at this time comes with the risk that prices could fall further. “There’s no impulse buying and people are now concerned with preserving cash,” said Mr Donald Han, managing director of consultancy Cushman and Wakefield.

    “However if they have excess cash, they would then be ‘bottom fishing’ for cheap, value assets.”

    Mr Han said most high net worth individuals in Singapore had not invested much in these markets for the past two years.

    While investors may now be looking for steeper discounts or distressed assets, Mr Han suggested they wait for the second half of the year before making any decisions as the crisis is still in full swing and has not, by most accounts, bottomed out. Property experts Today spoke to pointed out that buying a foreign property in the current market carries with it particular high risk and investors need to have deep pockets and strong holding power of at least five years.

    Investors should therefore consider carefully before committing to a purchase.

    “For foreign properties, not being in the country physically mean that you are not always aware of market trends,” Chesterton Suntec International’s research director Colin Tan.

    “You need reliable and trusted agents to help you. This will increase commission costs and higher agency fees,” said Mr Tan. “This will lower your eventual yield.”

    Cushman and Wakefield’s international investment arm has seen such individuals walk in recently asking for advice on buying foreign property.

    However, most are still studying the market carefully and biding their time.

    Like purchasing a property in Singapore, the location is an important consideration. Investors are advised to make a physical trip to view properties before buying.

    The type of investment is also important.

    “Don’t choose anything that is too exotic like a big hotel with 20 rooms overlooking a lake in the middle of no where for example,” said Knight Frank’s director of research and consultancy, Nicholas Mak. “Buy something that you can make an easier exit from.”

    Analysts point out that investors should also consider if there are taxes on property gains, trends in foreign exchange rates and inflation. After all, if a foreign currency has depreciated this much by now, it could drop even further or bounce back.

    “Pay for a valuation before you commit to anything as that may actually affect your buying price,” advised founder of mortgage consultancy portal www.housingloansg.com, Mr Dennis Ng.


    Global property investment expected to slide further

    Source : Business Times - 12 Feb 2009

    Global real estate spending on office buildings, stores and apartments may fall another 5.3 per cent this year to US$412 billion as lenders keep a tight rein on credit, property broker Cushman & Wakefield Inc said.

    Lack of credit pushed commercial property acquisitions down 59 per cent to US$435 billion last year, the lowest since 2004, New York-based Cushman said.

    ‘Although virtually all global markets had a decline in investment, it’s been the mature markets which have suffered most,’ David Hutchings, Cushman’s London-based head of research for Europe, the Middle East and Africa, said in a statement yesterday. ‘Emerging markets now account for 22 per cent of global investment when as recently as 2006 they only accounted for 9 per cent.’

    Banks have been reluctant to lend or refinance real estate loans as they try to conserve cash after losses and write-downs totalling US$1.1 trillion. Recessions in the US and some European countries have crimped demand for office and retail space, causing values to drop because landlords cannot command as much in rent.

    Commercial property values have fallen most in Europe, where yields rose 111 basis points, compared with an average 31 basis point increase in North America, Cushman said. The yield on property moves inversely to prices. One basis point is 0.01 percentage point.

    ‘Pricing in many countries at the market peak was aggressive and became divorced from the reality of underlying growth and income,’ Mr Hutchings said. ‘Pricing may now be becoming too conservative in some markets.’


    Aussie home loan approvals rise

    Source : Business Times - 12 Feb 2009

    Fastest increase in 9 years fuelled by government handouts, rate cuts

    Australian home-loan approvals rose in December by the most in almost nine years as government handouts and the biggest round of interest-rate cuts in almost two decades spurred first-home buyers.

    The number of loans granted to build or buy homes and apartments increased 6.4 per cent to 52,974 from November, the biggest gain since May 2000, the statistics bureau said in Sydney yesterday.

    The gain was almost double the 3.5 per cent median estimate of 16 economists surveyed by Bloomberg News.

    Approvals rose for a third month as central bank governor Glenn Stevens cut the benchmark interest rate to a 45-year low of 3.25 per cent to prevent the housing market from collapsing.

    The construction industry is shrinking, unemployment is rising, business confidence is at a record low, and lenders including Commonwealth Bank of Australia have announced higher provisions for bad debts, adding to signs the nation faces a recession.

    ‘These are the first steps in the right direction,’ said Brian Redican, a senior economist at Macquarie Group. ‘We need to see these sorts of results for another six months to be confident the construction sector will begin to pick up. Policy makers don’t have the option of failing here.’

    Mr Redican added: ‘If they don’t get construction off the ground, the economy will be in for a very sharp slump.’

    To spur house building, the government in October tripled a grant to first-time buyers of new homes to A$21,000 (S$20,700) and doubled the grant for buyers of existing homes to A$14,000. The increased payments remain available until June 30.

    First-home buyers accounted for 25.4 per cent of loan approvals in December, up from 18.9 per cent a year earlier, yesterday’s report showed.

    Yesterday’s report reflects similar gains in demand for housing in some property markets around the world where prices have fallen.

    An index of US pending home sales climbed 6.3 per cent in December, the first increase since August. UK banks granted 31,000 loans for house purchase, compared with 27,000 in November, and the value of Hong Kong mortgages jumped 22.8 per cent, reports showed in the past two weeks.

    Governor Stevens said yesterday commercial lenders have passed on about 375 basis points of the central bank’s 400 basis points of reductions since the start of September.

    The interest-rate reductions have saved borrowers with an average A$250,000 home loan about A$600 a month. Around 90 per cent of property buyers in Australia have variable-rate mortgages.

    ‘The cash flow channel for indebted households is working quite powerfully in our case,’ Mr Stevens told a conference in Kuala Lumpur on Tuesday.

    ‘The question of how people’s appetite to borrow will be expanded by these things of course is another’ matter, he said.

    Lending by banks to consumers buying houses rose 7.6 per cent last year, the weakest growth since 1983, home-building approvals fell in December for a sixth month and property prices tumbled 3.3 per cent in 2008, recent reports showed.

    Investors have a 100 per cent expectation the Reserve Bank of Australia will cut the overnight cash rate target by 50 basis points on March 3, according to a Credit Suisse Group index based on swaps trading.

    The nation’s jobless rate probably rose last month to 4.7 per cent, the highest level in more than two years, from 4.5 per cent in January, after companies including Macquarie Group fired workers, according to the median estimate of 14 economists surveyed by Bloomberg. Jobs figures will be released today.

    There also signs households may be less willing to take on extra debt after the economy expanded just 0.1 per cent in the third quarter from the previous three months, the weakest growth since 2000.

    An index of consumer confidence declined 4.6 per cent in February, according to a Westpac Banking Corp survey of 1,200 people conducted between Feb 2 and Feb 8, and released in Sydney yesterday.

    Australia’s construction industry shrank in January for an 11th month.

    Boral Ltd, Australia’s biggest seller of building materials, said yesterday it expects housing starts to tumble 15 per cent this year to 135,000.

    Commonwealth Bank, the nation’s second-biggest bank, said bad debts rose almost five-fold in the first half to A$1.6 billion as loans to failed companies including ABC Learning Centres soured. The total value of lending rose 5.9 per cent to A$18.6 billion in December.


    Shaftesbury warns of rising office vacancies in London

    Source : Business Times - 12 Feb 2009

    UK property firm Shaftesbury said yesterday that shops and restaurants in its London portfolio continue to trade well despite the economic downturn, but warned of rising vacancies and falling rents in its offices.

    ‘The general economic environment remains challenging and we expect to see an increase in vacancies in the coming months,’ Shaftesbury said in an interim statement, adding it believed its West End properties would continue to be in demand.

    Shaftesbury’s stock price was up 0.7 per cent at 298 pence yesterday morning, while the London market’s property stocks sector index was down 1.1 per cent. The FTSE 100 index was up 0.2 per cent.

    The company, which owns about 470 properties in London’s West End district, said demand from prospective tenants for shops and restaurants remained healthy and it had not seen any fall in the rental values of such spaces.

    ‘This year, the weakness of sterling is bringing more visitors from the euro zone and should also increase the volume of domestic visitors to the West End, as travel to overseas destinations has become relatively more expensive,’ it said.

    Shaftesbury, which also owns 400,000 square feet of offices and 280 apartments in the upper floors of its properties, said office rentals were now declining, while office vacancies have quadrupled to 36,000 sq ft since the end of September 2008.

    As at end-Jan Shaftesbury had a total 67,500 sq ft of vacant shops, restaurants and office space, down from 71,000 sq ft at end-September 2008.

    The estimated rental value for the vacant commercial space - including properties under offer and those being refurbished - fell to around £2.5 million (S$5.52 million) at end-January, from £3.3 million from four months ago, it said.

    Shaftesbury said its bank borrowings at the end of January stood at £473 million, against committed facilities of £600 million, while its overall cost of borrowings fell to 5.1 per cent from
    6.1 per cent at end-September 2008.

    UK commercial property values fall

    Source : Business Times - 12 Feb 2009

    UK commercial property prices fell 3.5 per cent in January, continuing their decline after the market fell 26.8 per cent in 2008, the world’s biggest property broker CB Richard Ellis (CBRE) said on Tuesday.

    While January’s fall in value was not as sharp as the 4.9 per cent drop in December, the decline in rents accelerated slightly to minus 0.9 per cent, according to the CB Richard Ellis Monthly Index.

    ‘January’s results were marked by an easing of the negative impact of higher yields, but a pick-up in the rate of rental falls,’ said Peter Damesick, head of UK research at CBRE. ‘This combination is likely to carry on, with rents continuing their downward movement in the coming months.’

    CBRE, one of the biggest contributors of data to benchmark index compiler Investment Property Databank, said property values are now 37.8 per cent below their peak in mid-2007.

    Total returns, which comprise rental returns and capital growth, were minus 2.8 per cent in January, and minus 31.6 per cent from their mid-2007 peak, CBRE said.


    2 Shanghai hotel projects on hold

    Source : Business Times - 12 Feb 2009

    Developers have put two Shanghai luxury hotel projects on hold as demand for five-star hotels plummets due to the global economic crisis, Chinese media said yesterday.

    The Jumeirah Han Tang Xintiandi Hotel, managed by the Dubai-based hotel chain Jumeirah Group, and the Hilton-managed Conrad Shanghai have delayed their openings, the China Business News reported, citing unnamed sources.

    Construction work on the hotels, both located in Xintiandi, a ritzy downtown entertainment and residential district developed by Hong Kong property tycoon Vincent Lo, has come to a halt, the report said.

    Jumeirah’s Shanghai spokeswoman Aslada Gu confirmed the opening of the chain’s hotel, originally planned for early 2009, has now been postponed to later this year.

    She declined to give a reason for the delay. Hilton and Xintiandi officials were not immediately available for comment.

    The Conrad Shanghai had been due to open last year.

    The current economic slowdown makes it a difficult time to launch luxury hotels in China, said Damien Little, a Beijing-based hospitality consultant for Horwath Asia-Pacific.

    ‘In the last quarter of the year, certainly, the financial crisis began to have an impact,’ Mr Little said.

    ‘By the end of the year, as the market begins to recover, probably is a better time for opening,’ he said.

    The average hotel occupancy ratio in Shanghai was 54.6 per cent between August and December last year, the lowest in two decades, according to Shanghai-based SAO HotelSolution Consulting Ltd.

    Source : Business Times - 12 Feb 2009

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    Seoul court bars CDL hotel from evicting ex-tycoon

    Posted by luxuryasiahome on February 12, 2009

    A former South Korean tycoon has won a court battle to retain an office in a luxury hotel which costs him 23 US cents a day in rent, officials said on Thursday.

    A Seoul appeals court rejected a request from the owner of the Millennium Seoul Hilton Hotel to stop Kim Woo-Choong - founder of the now-defunct Daewoo group - from using the top-floor office.

    Before Daewoo’s collapse in 1999, Kim signed a 25-year contract with the hotel, which was then owned by one of the group’s sister firms, to use the office for 328 won (now 23 US cents) a day.

    The hotel was later sold to Singapore’s CDL Group.

    A lower court nullified the contract, recognising CDL Group’s claim that the office had been vacant for six years and that the tenancy caused substantial damage to the hotel’s operations.

    But the appeals court on Wednesday overturned the lower court’s decision.

    ‘The office had been used by Kim’s wife but we don’t know whether Kim or his wife is using it now,’ a hotel spokesman told AFP, declining to say whether the CDL Group would appeal.

    The Daewoo group had debts of US$82 billion when it collapsed in the wake of the East Asian financial crisis. Kim, now 72, fled the country but returned after six years.

    In 2006 he was sentenced to eight and a half years in jail for embezzlement and for accounting fraud involving 20 trillion won. He was also ordered to forfeit 17.9 trillion won and pay 10 million won in fines.

    A month later the jail sentence was suspended on grounds of Kim’s ill health. The ailing tycoon, who has twice undergone heart surgery, was pardoned in December 2007 in a presidential amnesty.


    China developer reports good sales

    Source : Business Times - 12 Feb 2009

    China Overseas Land meets 2008 sales target, sees brisk take-up in Jan

    China Overseas Land, the largest Hong Kong-listed mainland property developer, said it met its target for property sales in 2008, while January sales were boosted by strong demand in central and eastern China.

    The property firm said late on Tuesday that it sold HK$26.61 billion (S$5.16 billion) worth of property in 2008, up 19.3 per cent from the previous year.

    The total gross floor area sold amounted to 2.71 million square metres, an increase of 25.4 per cent from 2007. The company said the figure met its target of selling 2.7 million square metres for the year, and in spite of concerns about weak sentiment in China’s property market.

    Strong sales in the Yangtze River Delta Region and central China boosted its January sales 60 per cent on the year to 1.202 billion yuan (S$264.1 million) with total gross floor area sold surging about 150 per cent to 160,000 square metres. It gave no further details on the rise.

    The property developer said it had a land reserve of 25.27 million square metres, sufficient for its development use in the next four to five years.

    Last week, China Overseas Land’s chairman Kong Qingping said the China property market had bottomed out and expected the overall property environment to improve in 2009.

    Shares of the company rose 1.12 per cent to close at HK$10.86 yesterday.


    HK office rents may fall 26%: Colliers

    Source : Business Times - 12 Feb 2009

    Hong Kong prime office rents may fall a further 26 per cent this year as the global financial crisis prompts banks and investment companies to control spending, according to property agency Colliers International.

    ‘The prime office market is predicted to experience a further downward adjustment due to the consolidation of the financial markets and the global economic outlook,’ Colliers said in a report yesterday. Office rents fell 13.4 per cent in the fourth quarter from the previous three months, the company said.

    Banks including HSBC Holdings Plc and Standard Chartered Plc have cut jobs in Hong Kong as the economy entered its first recession since 2003. HSBC said in November that it had trimmed 500 jobs in Asia, 90 per cent in Hong Kong. Standard Chartered in December said it would cut 200 local positions.

    The report, covering 26 places in the Asia Pacific, showed office rents in the region declined 4 per cent on average in the fourth quarter from the previous three months. The report was emailed and posted on Colliers’s Web site.

    ‘Individual centres with a tenant profile highly geared toward the financial sector have experienced steeper rental corrections in the order of over 10 percent quarter-on-quarter,’ Colliers said.

    Hong Kong’s last recession was triggered by the severe acute respiratory syndrome epidemic in 2003.

    A survey by property agency DTZ last month showed that Moscow commanded the world’s most expensive office rents last year, of US$255.60 per square foot a year on average. In second place was the West End of London, at US$186.20, and Hong Kong ranked third at US$185.20 a square foot.


    Universal Studios plans Beijing theme park

    Source : Business Times - 12 Feb 2009

    US film giant Universal Studios is awaiting regulatory approval to build a theme park costing more than 10 billion yuan (US$1.5 billion) in Beijing, a Chinese government official said on Thursday.

    ‘Universal has filed an application to build a theme park in Beijing and the project is being screened by the government,’ a spokesman with the Beijing city government told Reuters.

    The park, to be jointly owned by Universal Studios and state-owned Beijing Tourism Group, has been listed by Beijing’s city government as one of its key projects for 2009, the official Shanghai Securities News quoted unnamed sources as saying.

    The project is likely to be approved because the authorities are keen to launch big projects that would boost the slowing economy, the report said.

    But the Beijing government official played down the report saying there was no guarantee the theme park would get the green light.

    An executive with Beijing Tourism, which owns Beijing Capital Tourism Co and China Quanjude (Group) Co, told Reuters the firm had set up a team to handle the project, but declined to elaborate.

    Universal Studios was not immediately available to comment.

    Walt Disney Co said last month that it would submit a proposal to the Chinese government to build a theme park in Shanghai. That project would cost more than US$3 billion, Chinese media reports said.

    Universal Studios is operated by NBC Universal, which is 80 per cent owned by General Electric Co and 20 per cent by Vivendi.


    Wednesday, February 11, 2009

    DBSS contractors will only sell at a profit

    Source : Today - 11 Feb 2009

    I REFER to the report “No-frills housing, please” (Feb 9).

    MP Lim Wee Kiak is right to note that 3- and 4-room flats cost only $15,000 and $20,000, respectively, in the ’70s. In fact, even 5-room flats cost only $27,500 to $35,500 then. How did they all come to cost 10 to 30 times more in a matter of 30 years? Have construction costs and salaries gone up that much?

    Not only have prices gone up, the sizes of the flats have shrunk. We’re getting smaller flats for higher prices.

    One possible explanation for the higher prices: HDB is now taking the market value (and not just the cost) of the land together with construction and infrastructure costs to determine the prices.

    HDB has also farmed out the responsibility of building flats to private contractors under the Design, Build and Sell Scheme (DBSS) where the land is tendered out at market price. Would such contractors sell the flats without making a profit? This could explain the $600,000 to $700,000 prices for flats under this scheme.

    Meanwhile, for some 20 years or more, no more 2- and 3-room flats were built, forcing people to buy the more expensive 4-room, 5-room and executive flats and opt for 30-year loans.

    Cheong Chee Mun


    Detailed investigation into personal finances makes investing tough

    Source : Today - 11 Feb 2009

    OF LATE, relatives and friends looking into investing in property have found the process very difficult, with the Inland Revenue Authority Of Singapore (Iras) asking for details pertaining to their property transactions. These investigations are highly detailed and intrusive; tend to drag on for months and may even involve face-to-face meetings with a panel of senior tax officials.

    Iras typically takes issue with two things: The source of funds and whether the individual is deemed to be a property trader.

    Documents requested for include sales and purchase agreements, tenancy agreements, personal bank statements (occasionally including that of spouses and children), mortgage loan contracts and profit and loss statements.

    But why should the burden of proving that funds came from a legitimate source fall on property investors? How individuals manage their finances is a very personal matter. The veil accorded under the Banking Secrecy Act should only be lifted if there are strong reasons for Iras to believe that the source of funds are illegitimate.

    Generally, the profit derived from the sale of a property in Singapore is not taxable as it is considered a capital gain.

    However, when someone is deemed to be trading in properties, the gains from the sale of property is taxable. To determine if this is so, Iras looks at the frequency of transactions, the buyer’s financial means to hold the property for the long term, the reasons for acquiring and selling of property and the holding period.

    These factors were only put up on the Iras website recently. Previously, even if investors had wanted to act in accordance with the law, they would have been groping in the dark.

    Also, “reasons for acquiring and selling of property” and “holding period” are very fluid considerations. An individual may have initially intended to buy a property to generate rental income over the long term. However, the property boom in 2007 was an extraordinary time. Capital values of many properties doubled or even tripled within months.

    The profits made from selling these properties would have been equivalent to 15 to 25 years of rental income! Iras should not blacklist owners who changed their minds and sold off their properties quickly under these circumstances.

    Tan Choon Meng