Groundbreaking ceremony for 4.2km Punggol waterway

Source : Channel NewsAsia - 18 Apr 2009

The first section of the Punggol waterway is set for completion by 2010, bringing waterfront living closer to residents’ doorsteps.

Construction of the 4.2-kilometre channel started on Saturday, with a groundbreaking ceremony.

Over the next few years, the area – known as Punggol 21+ – will see more leisure and recreational facilities.

About 21,000 new public and private residences will also be built along the channel. The first public housing project there will be launched later next year.

Overwhelming response prompts developer to launch bookings early

Source : Channel NewsAsia - 18 Apr 2009

Applications were only supposed to open on Tuesday, but the overwhelming response to the Housing and Development Board’s (HDB) latest housing project in Simei, under the Design, Build and Sell Scheme (DBSS), prompted developer Sim Lian Group to accept bookings on Saturday.

Under DBSS, private developers manage the project from its design to construction and sale, and applications are accepted on a first-come-first-served basis.

Four-room units at Parc Lumiere are priced between S$378,000 and S$425,000, while five-room units are priced between S$462,000 and S$575,000.

By 6.30pm, 118 out of the 360 units at Parc Lumiere were already sold. Nevertheless, over 700 people continued to queue in the hopes that not everybody ahead of them would buy a flat.

Diana Kuik, executive director of Sim Lian Group, said: “They’re all issued with a queue ticket, so they can come back tomorrow morning and queue according to their queue number again.”

Parc Lumiere’s show flats open at 10am and close at 7pm.

Punggol Town transforms

Source : Straits Times - 18 Apr 2009

WHEN Mr Samuel Ng first heard in 2007 that the Government had plans to transform Punggol Town into a vibrant waterfront town, he simply could not wait for the makeover.

Artist’s impression of Punggol Waterway. — PHOTO: HDB

On Saturday, Mr Ng, 52, a Punggol resident for the last seven years, glimpsed the future at the groundbreaking ceremony of the new Punggol Waterway.

‘The waterway will breathe new life and add vibrancy to this sleepy town,’ he said. ‘It will just be a stone’s throw from where I live!’

But the waterway could have been a lost opportunity - if not for the spirit of innovation and teamwork between the Housing Board and Public Utilities Board, said Deputy Prime Minister Teo Chee Hean.

Indeed, he said the growth of Punggol, like Singapore itself, shows how citizens working as one with ‘vision, determination and innovation can overcome the odds to build new communities and radically transform our living environment’.

Speaking at the groundbreaking ceremony, Mr Teo said the transformation of Punggol, an old fishing village, mirrors the experience of Singapore. The nation itself was a fishing village before it made the quantum leap to global city.

In the case of Punggol, the waterway was initially meant to be a ‘drain’ connecting Sungei Serangoon and Sungei Punggol at each end of Punggol Town.

But when the PUB engineers and the HDB planners discussed the town’s development in the Punggol 21 masterplan, they spied an opportunity to build Punggol around this new waterway, he said.

The result? A 4.2km waterway which will flow beside 21,000 units of new public and private housing.

Cutting right through Punggol Town, the waterway is expected to be completed by the end of next year.

Condo sub-division without tears

Source : Business Times - 18 Apr 2009

THE Urban Redevelopment Authority has said that when processing applications to sub-divide apartments, it is guided by whether sub-division will change the character of a development and diminish the amenities of other people living there, such as families.

The authority was responding to a follow-up report in The Business Times after the recent case of Grangeford condo, where a master tenant sub-divided 140 apartments into 600 smaller units with a layout resembling a dormitory.

URA told BT earlier this week this is not allowed because the site is zoned for residential use only, and that it and other government agencies will take enforcement action against any party responsible for any unauthorised use and for not complying with requirements.

Some industry observers say that owners of apartments in other developments have carried out similar sub-divisions, though on a much smaller scale than at Grangeford.

URA outlined three scenarios.

In the first scenario, which it has encountered over the past two to three years, there have been a few cases where a handful of apartments were converted into a larger number of mini-apartments.

‘These are essentially smaller, but independent residential apartments with self-contained facilities like kitchen, living room and bathroom,’ a URA spokeswoman said.

‘Where the conversions were able to comply with planning requirements, URA followed up with the owners and they obtained approval from URA.

‘For those that were not able to comply with planning and other technical requirements, URA followed up and took enforcement action.’

Such conversions require planning approval from URA and consent from the development’s management corporation.

In the second scenario, apartments are split into a dormitory-style layout. The split units are essentially bedrooms, without their own kitchen, toilet or living room.

URA approval is needed for a change of use from residential to non-residential use - for instance dormitory or boarding house use. As a rule of thumb, URA will not approve such a conversion in a residential area, the spokeswoman said.

BT quizzed URA about a third scenario, in which an apartment is not sub-divided but is sub-let to several unrelated tenants. For example, several students might join forces to rent an apartment.

The URA spokeswoman said that sub-letting for residential use on a unit basis is allowed, but URA may have concerns if this is done on a large scale.

‘It goes back to the fundamental considerations of whether such a sub-letting exercise will change the character of the development or cause disamenities to, say, families living there,’ the spokeswoman explained.

Apartment sub-division is becoming an important topic, especially for developers who bought entire residential projects in Singapore’s prime districts through collective sales during the property bull-run from 2006 to 2008 and have had to defer redeveloping these properties because of the massive slide in the value of high-end homes.

Developers also face the burden of footing the property tax bill, with the annual value (AV) of the property based on 5 per cent of the freehold market value of the land.

Following representations by developers last year, the Inland Revenue Authority of Singapore (IRAS) agreed in September to a different basis for assessing AV for en-bloc properties where developers have changed their intention by renting out apartments instead of redeveloping the site.

The property tax for such properties will be based on the estimated total annual rent that can be fetched by all the apartments in the development - provided at least 25 per cent of the apartments have been leased on tenancies of at least a year, and on an arm’s length basis, to parties not related to the developer. Also, there must not be any provision in these tenancy agreements to evict tenants within the tenancy period.

Let’s take the case of Grangeford. Assuming the 193 apartments fetch an average monthly rent of $4,000, the AV would be $9.3 million ($4,000 x 12 months x 193). Based on the 10 per cent property tax rate, the property tax bill would be $930,000.

This is much lower than if Grangeford’s AV was assessed at 5 per cent of the estimated freehold market value of the land.

The site had a remaining lease of 66 years when Overseas Union Enterprise bought it in 2007 for $625 million. Let’s assume the freehold value of the site today is about $520 million, taking into account lower property values. The AV would be 5 per cent of this, or $26 million, and at 10 per cent property tax rate, OUE’s tax bill would be $2.6 million.

Given the credit crunch, developers are looking for creative ways to conserve cash. Hence, the advent of a master tenant willing to lease all or many apartments in an en-bloc development bought during better times is welcome news - as it allows the developer to qualify for the more favourable AV formula if at least a quarter of the apartments are leased to the master tenant for minimum period of one year.

Given the tough market for the high-end residential sector, it would be an uphill battle for a developer to try to find tenants for individual apartments. Also, some tenants may want short-term leases of a few months, so that would not comply with the condition of a minimum one-year lease set by IRAS. A master tenant willing to sign a longer lease of one or two years solves this problem for developers.

These were probably some of the considerations that OUE weighed for Grangeford when it signed a two-year master lease with Ideal Accommodation for 170 apartments with effect from Jan 1, 2009. Of these 170 apartments, Ideal split 140 apartments into a total of 600 units. In the process, most of the units have been left with unventilated corridors and without access to rubbish chutes. The former kitchen and living room areas have been boarded up to create new units. Tenants of some units have to share toilets.

‘Once a developer brings in a master tenant, there is the possibility that it may lose some control of the environment and ambience,’ says DTZ executive director Ong Choon Fah.

‘When the environment becomes different - a lot of en bloc properties that developers can’t develop now are in prime locations and very desirable residential areas - it may create social issues. It’s not just as far as families in apartments in the developments are concerned, but also families living in the surrounding area who may have the perception that the neighbourhood is no longer the same because of transient neighbours.’

Early birds flock to Parc Lumiere

Source : Straits Times - 18 Apr 2009

Developer says it may open bookings today if queue grows longer

HUNDREDS of potential buyers queued overnight at the Parc Lumiere site in Simei hoping to secure one of the new condo-like apartments that are not due to go on sale until next Tuesday.

An estimated 200 people had joined the line by 5pm, hoping to land a unit in the latest project developed under the Design, Build and Sell Scheme (DBSS).

Buyers do not have to chance a ballot like in usual DBSS developments but can book a unit on the spot. The average selling price at the Parc Lumiere is $425 per sq ft.

Two tents sheltering rows of chairs have been set up outside the project’s show flat - one for those interested in ‘booking’ a flat and one for those who want a viewing. The booking tent was teeming with interested buyers yesterday.

Developer Sim Lian Group, which brought in extra cooling units and gave those queuing free lunches, planned to start bookings on Tuesday but may end up opening bookings today if the queue lengthens.

‘I’m overwhelmed,’ said Sim Lian executive director Diana Kuik. ‘We didn’t expect them to come on Friday before seeing the show flat.’

The walk-in-selection process - a first for new flats in recent years - involves a basic pre-screening process while certain conditions must be met before buyers can book a unit.

They must then pay a deposit of 5 per cent of the purchase price. The final confirmation of a buyer’s eligibility will be determined by the HDB.

Flats will be booked on a first-come first-served basis, which is why potential buyers like Ms Florence Lim turned up at 8am yesterday.

The assistant sales manager, who is in her 40s, took leave to queue and was intending to stay overnight, taking turns with her husband and son. She was first in line and hopes to get a five-room flat.

‘I’ve aimed here for a long time, ever since I applied for The Premiere (at Tampines) but was unsuccessful,’ she said.

Ms Queena Tan, 30, who works in advertising, said she preferred a new DBSS unit to a resale HDB flat, adding: ‘I like this area as it’s rather peaceful and accessible.’

Ms Tan and her fiance will take turns to queue and they plan to stay in line until the booking period begins, even if it is not brought forward to today from next Tuesday.

‘With the upcoming university and the development of Changi Business Park, we expect increases in the prices of houses in this area. That’s why we feel it is a good investment,’ she added.

Some in the queue jumped at the chance to buy a flat that did not require too much extra work.

‘We want the balcony and the fittings, and it’s in move-in condition so we don’t need to fork out extra to renovate,’ said bank executive Cheong C. H., 30.

Ms Kuik of Sim Lian believes the small number of units available - 240 five-roomers and 120 four-room units - ‘maybe makes some buyers anxious’. ‘There could also be some pent-up demand as there have been no new HDB flats

in Simei and Tampines for the past 12 years, with the exception of The Premiere @ Tampines,’ she said.

Knight Frank director of research and consultancy Nicholas Mak said the strong response ‘is another indication that the buying interest in the mass market is still quite buoyant’.

He added that the purchasing power of some first-time buyers may limit the take-up rate of the four- and five-room flats.

‘It’s going to be interesting, seeing as there are no three-room flats.

Four-room flats will probably sell quite well but five-room flats may need some demand from HDB upgraders.’

The four-roomers at 1,012 sq ft each are priced at between $378,000 and $425,000. Five-room flats range from 1,152 to 1,195 sq ft and are priced at between $462,000 and $575,000 each.

March sales of private homes revealed that HDB upgraders were the most active group of buyers. It may be that this group is also interested in DBSS projects, which offer condo-like fittings at what is perceived to be a slightly lower price.

Rediscover Singapore, says URA

Source : Straits Times - 18 Apr 2009

IF IT is true that in crisis lies opportunity, then the Urban Redevelopment Authority (URA) is not letting this downturn go to waste.

As Singapore’s master planning agency celebrates its 35th anniversary this year, it is kicking off a string of initiatives to plan for the eventual recovery and to expand its own role locally and globally.

It is also hoping to reacquaint Singaporeans with the city and renew their love for it, National Development Minister Mah Bow Tan said at the URA’s annual Corporate Plan Seminar yesterday.

While Singaporeans love to travel, there is also much to enjoy at home, he told the 400-strong audience comprising URA’s partners from the public and private sectors during the session at the Swissotel Merchant Court.

‘Perhaps during this downturn it is timely for Singaporeans to take some time to get to know their own city better, enjoy what we have to offer here in Singapore and maybe save a little bit of money at the same time,’ he said.

‘So let’s do what we would like to do overseas - let’s do our shopping, our eating, our sightseeing - let’s travel around Singapore, revisit the places we have not visited for a long time, maybe even discover some new surprises.’

After all, a ‘new Singapore cityscape’ will emerge over the next few years with the development of areas such as Punggol, which will boast unique features such as a coastal promenade and a ‘heartwave wall’ with a mini waterfall.

To encourage Singaporeans to rediscover their city, the Ministry of National Development and URA will launch a programme called My New Singapore. Among other things, Singaporeans will be able to visit the new Marina Bay and find out what plans are in store for their own neighbourhoods.

As part of the programme, the URA will start a roving exhibition, My Endearing Home, at major malls next month for Singaporeans to learn more about the city and sign up for visits to places such as Sungei Buloh and the Changi Boardwalk.

Similarly, the Housing and Development Board (HDB) will also conduct a series of exhibitions next year - in conjunction with its 50th anniversary - showing how HDB neighbourhoods have changed over the years and presenting future public housing plans, said Mr Mah.

As it looks to the future, the URA will also kick off a new round of reviews for its next Concept Plan, due in 2011.

This overarching urban plan, reviewed every 10 years, is the longer-term version of the Master Plan and maps out Singapore’s changing land use and transportation needs over the next 40 to 50 years.

To put together Concept Plan 2011, the URA will actively seek views from the public on how to improve the quality of life in Singapore, Mr Mah said.

There will be changes taking place within the URA as well, as the agency takes on new responsibilities beyond its master planning and development roles.

Having taken charge of the branding and marketing aspects of Marina Bay, the URA will also begin to manage the Singapore River district in a similar fashion.

The agency has also created the URA Consulting Group to better export its planning expertise abroad.

‘Looking ahead, Singapore faces tremendous challenges. We know we need to continue to work even harder to stay ahead,’ URA chairman Alan Chan said in a speech yesterday.

Condo units turned hotels

Source : Straits Times - 18 Apr 2009

SOME entrepreneurial owners of condominium units are renting out and marketing their properties as hotel rooms, going against regulations set by the Urban Redevelopment Authority.

The Straits Times knows of at least four condominium developments with units being rented out on a daily basis.

Marketed as ‘condotels’, ‘holiday apartments’ or ‘hotel-style apartment room accommodation’, the rooms are advertised freely on hostel directories online and personal websites.

One website, claiming ‘award-winning service’, even indicated check-in and check-out times, a $70 key deposit and free wireless Internet.

Advertised as the Soho 188 Condotel, it is actually known as the Soho 188 condominium development in Race Course Road, near Little India.

Other accommodation can be found at Parkview Condotel, officially known as Parkview apartments in Bukit Batok; Braddell Road’s Braddell Regalia and Serangoon’s Avon Park.

These rooms are being rented out at between $40 and $150 a day and are popular with students, people here for medical treatment and vegetarian business travellers from Bangladesh who want a kitchen to cook their own food.

These lodgers typically rent for a few days, although it can go up to a month.

‘For properties approved for residential use, they are intended for long-term residential stay,’ said a URA spokesman, adding that the use of such properties for transient accommodation is similar to how hotels operate. ‘The leasing of such properties on a daily, weekly or monthly basis is not permitted.’

He added that the URA needs to assess the appropriateness of such accommodation and if it has an adverse impact on neighbouring residents.

Condominium managers agree that this arrangement may spell trouble. ‘The concept of a condominium is for home living, not short-term living,’ said Avon Park’s manager Haroon Aisree, who will be discussing the matter with the property’s management.

His worry: Tenants may be irresponsible and not take care of facilities because they have no ownership.

‘We definitely have to take a stand and protect the interest of residents,’ he said, adding that he did not know such a business was going on.

Owners of these units, like Mr Roger Pay, said they did not know they were doing anything wrong.

The owner of four units at Avon Park started renting out his 20 rooms half a year ago when he ‘received calls from people saying they wanted daily or weekly stay’.

The 41-year-old, who told The Straits Times that all but two rooms are currently occupied, charges about $50 to $90 per room each day and has seen ‘increased popularity over time’.

It is the same story for a 75-year-old owner who did not want to be named.

He has been renting out units to lodgers who fork out $70 daily. ‘I didn’t know that it was wrong,’ he said. ‘If the authorities give me a letter to tell me to stop doing this in black and white, then I will stop.’

Mr Surendra Kumar Sinha, who is in Singapore for colon cancer treatment, rents a room at a condo unit at Soho 188.

He and his wife, both from Bangladesh, pay $130 a night. Depending on how intensive treatment is, his stay could last from two weeks to a month.

‘It’s rather expensive for us, but it is still cheaper than hotels and other studio apartments,’ said the 59-year-old, who arrived in Singapore earlier this month.

For Miss Crystal Deleon, who is on a 13-day trip to visit her Singaporean boyfriend, her condotel room brings many benefits.

‘It’s cheaper than a hotel and near my boyfriend’s house, so he can send me back after work,’ said the Philippine national, who pays about $70 daily for a room at Braddell Regalia.

The URA is currently investigating the matter.

Remaking goes on in good times and bad

Source : Business Times - 18 Apr 2009

New round of reviews begins this year on blueprint for Singapore’s long-term physical development

THE Urban Redevelopment Authority (URA) will begin this year a new round of reviews for Concept Plan 2011, a blueprint that maps out the long-term vision for Singapore’s physical development.

URA’s review, which will be done with various ministries and government agencies, will examine Singapore’s land use and infrastructure needs to cater to an increased population and also the changing profile of its resident population and economy.

The Concept Plan review’s ‘ultimate aim must be to ensure that we will continue to have a good quality living environment in Singapore, one that will take into account the needs of not just the young, but also of the old, and a growing population which will consist of people from many, many different parts of the world’, said National Development Minister Mah Bow Tan.

As part of Concept Plan 2011, URA will also actively seek views from the public, Mr Mah said in his keynote speech at the URA Corporate Plan Seminar yesterday.

He also highlighted that one of Singapore’s key strengths is its long-term integrated planning approach. ‘Few cities in the world have a holistic planning framework like ours . . . ,’ Mr Mah said. He cited a case in point. Despite the dismal economic climate when URA started planning the development and infrastructure for Marina Bay, just before the start of the last downturn in 2000, the government remained focused on building up Marina Bay. ‘And because we planned ahead, we were able to attract foreign investments into the Bay when the economy started to pick up and then when it boomed,’ Mr Mah said.

He also also stressed that efforts to remake Singapore must continue in both good and bad times if the island is to be a key node in the network of global cities. It was as a result of forward planning, and effective and consistent implementation that a new Singapore city is taking shape fast. He painted a picture of the ‘new iconic signature skyline’ emerging at Marina Bay. The double helix bridge, Art Park, Gardens by the Bay and new waterfront promenade will be progressively completed by 2011. Then, there are the Marina Bay Sands Integrated Resort and the first phase of Marina Bay Financial Centre which will be operational by 2010. The government has invested nearly $5.7 billion in infrastructure works in Marina Bay so far and will continue to pump in more money to support its future growth and boost connectivity with the existing city, Mr Mah added.

The prime Orchard Road shopping belt is also being rejuvenated with new malls. Singapore will have a new generation of regional commercial districts, such as Jurong Lake District. And the island will become an even more exciting playground with a wider range of leisure and recreational options. Singapore’s park connector network will be tripled to 300 km over the next five to 10 years, joining up into a continuous loop around the island. URA is also developing scenic walks along Singapore’s coastline.

The Ministry of National Development and URA will be launching a programme called ‘My New Singapore’ to encourage Singaporeans to rediscover Singapore.

‘The programme will comprise a series of events and activities which will reach out to Singaporeans. We invite everybody to see the new developments and visit new leisure destinations. We will show Singaporeans the plans that we have for their neighbourhoods, bring them to see the new Marina Bay, let them enjoy the parks and park connectors. And I hope that when Singaporeans rediscover Singapore, they will realise what a special little city we have, and perhaps, we will love our city even more,’ Mr Mah said.

He even suggested Singaporeans may want to shop, eat and sightsee in Singapore. ‘Perhaps during this downturn, it is timely for Singaporeans to take time to get to know our city better. Enjoy what we have to offer here in Singapore, and maybe save a little bit of money at the same time.’

URA will hold the ‘My Endearing Home’ roving exhibition at major malls between May and August this year to present Singaporeans a chance to learn about plans for their immediate neighbourhoods and for the city, and ‘discover that there is much to treasure on our island’.

A Marina Bay Festival will be held in the later part of 2010 that will showcase the waterfront promenade and new developments to both locals and foreign visitors.

NParks will also press on with its efforts to green Singapore and conserve the island’s natural heritage.

A-Reit full-year DPU rises 7.4%

Source : Business Times - 18 Apr 2009

ASCENDAS Real Estate Investment Trust (A-Reit) yesterday reported a distribution per unit (DPU) of 3.23 cents for its fourth quarter ended March 31. This raised full-year DPU to 15.18 cents, a rise of 7.4 per cent on the back of sturdy growth in rental and occupancy rates.

The Q4 DPU of 3.23 cents was 12.5 per cent lower than the year-ago DPU of 3.69 cents. A-Reit said this was because of dilution by new units and the payment of performance fees in cash for the year. Otherwise, Q4 DPU would have been 3.8 cents, a rise of 3 per cent.

Full-year net property income (NPI) grew 21.8 per cent to $296.6 million, with organic growth - rentals and occupancy rate growth - contributing 39.3 per cent of the NPI growth. The rest of NPI growth was derived from investment and development projects completed over the course of the year.

A healthy portfolio occupancy of 97.8 per cent was achieved while occupancy rate for multi-tenanted properties was 95.3 per cent as at March 31, thanks to active leasing efforts by the property manager. Positive rental reversion in renewal rental rates was seen across the portfolio.

For the year, A-Reit completed three development projects at a total development cost of $178.2 million and made two acquisitions totalling $271.8 million.

A-Reit recorded a revaluation loss of 2.5 per cent to about $4.43 billion as at March 31 following a portfolio revaluation.

The NPI outlook for fiscal 2009 is expected to be about the level achieved for fiscal 2008, the trust manager said.

But with the expected higher cost of borrowing, distribution income may be lower and will also spread over a larger unit base due to recent fund-raising exercises.

A-Reit expects to keep a payout ratio of 100 per cent of distributable income, a policy it has maintained since listing, Tan Ser Ping, CEO of the trust manager, told reporters and analysts at a briefing last evening.

Explaining the payment of performance fee in cash, Mr Tan said: ‘This is to minimise the gap between the earnings per unit (EPU) and DPU to avoid paying distribution out of capital.’

Some 14.1 per cent of portfolio gross revenue is due for renewal over the next 12 months.

The current passing rentals for space due for renewal in some sub-sectors of the portfolio are lower than the spot rates and Mr Tan said he expects this weakness to persist for a while.

A-Reit has a total development pipeline costing $158.7 million. Some $132.7 million of investment is committed, of which $76.3 million has been spent and another $56.4 million of development cost require funding.

‘Over time, there may be some distressed assets opportunities that may come along but our focus is on high-quality tenants and properties that have good potential in terms of upside,’ Mr Tan said.

To strengthen its balance sheet and fund committed development projects, A-Reit raised $408 million in January and February through a private placement and a preferential offer. As at March 31, its aggregate leverage was 35.5 per cent, down from 38.2 per cent a year ago.

It also secured new loans of $200 million and incorporated a $1 billion medium term note (MTN) programme. Some 90 per cent of interest rate exposure is hedged into fixed rate for the next 3.4 years with weighted average all-in funding cost of 3.67 per cent.

Its interest cover ratio as at March 31 was 4.6 times, down from 5.1 times a year ago.

A-Reit’s $300 million of commercial mortgage backed securities that will mature this year will be repaid by existing credit facilities while its $246 million revolving credit facilities due this year will be partially paid down and partially refinanced.

URA to spread wings

Source : Business Times - 18 Apr 2009

It will take expertise overseas while bringing places alive at home

AFTER 35 years of planning and shaping Singapore’s physical landscape, Urban Redevelopment Authority (URA) is ready for a bigger canvas. It has set set up a URA Consulting Group (URACG) to provide its planning expertise for projects overseas. Meanwhile, at home, it will make new places in Singapore come alive. After Marina Bay, the Singapore River could be the next to feel its energising touch.

At the URA Corporate Plan Seminar yesterday, National Development Minister Mah Bow Tan spoke of how the master planner would step up its ‘place management’ role. This meant combining the resources of the public and private sectors to create places, districts and areas that are more vibrant economically and socially, he said. In addition to URA’s role as master planner and infrastructure provider, the stat board will also work with stakeholders on ’softer’ initiatives such as branding, marketing and events programming, he said.

Mr Mah noted that URA is already undertaking the place management of Marina Bay. It will expand its portfolio to include the Singapore River. In addition, it will chair a coordinating forum to ’synergise the place management efforts of partner agencies at Orchard Road and also the Civic District-Bras Basah/Bugis areas’, he added.

The formation of URACG would help URA playing a bigger role outside Singapore’s shores.

‘Our planning expertise is very much sought after outside of Singapore. In fact, it has played a leading role in the master planning of projects like the Tianjin Eco-City, which is now being built, which has drawn on Singapore’s experience in integrated planning and urban management,’ Mr Mah said.

Elaborating, a URA spokeswoman said URACG’s priority will be to support the Singapore government in government-to-government level projects overseas which require master planning expertise. In addition, URA can partner local private companies, where suitable, to carry out consultancy work for big projects. URACG’s scope of services will generally include concept and master planning, urban design and development control processes.

Another role of URACG is to provide professional development training on urban planning and related matters for both local and international participants under the Urban Leadership Programme. URA recently conducted a four-day training programme on integrated land use planning for participants from Brunei, Abu Dhabi, Qatar, China and Singapore.

No takers for old pools

Source : Straits Times - 18 Apr 2009

TIME is running out for four of Singapore’s oldest public swimming pools, unless private sports-related investors step in to give them a new lease of life.

If there are no takers, the four pools at Bukit Merah, Yan Kit, Pandan Gardens and Jurong Town will be returned to the Singapore Land Authority (SLA) for redevelopment.

The four had been under-utilised and have been closed for more than five years now. Yan Kit, one of the oldest pools, was opened in 1952.

But the high costs of converting the pools into facilities for other sports - which can range from $900,000 to $4 million - is likely to curtail interest from both the private sector and national sports associations.

The Singapore Sports Council (SSC), which manages the pools, is holding a final public tender exercise for them by the end of this month. It has been trying to lease the sites out without success.

Previous tender exercises had attracted bids to convert the pools into prawn- and crab-fishing grounds, but these were rejected as they did not fulfil the SSC’s criteria of sports and recreation usage.

A fifth public pool at River Valley, also closed owing to under-utilisation, is not up for tender because it is being considered under the Government masterplan for Fort Canning Park.

Many of the disused pools sit on prime land, and there were calls by the public for them to be redeveloped, partly because they were potential breeding grounds for mosquitos.

In 2005, the Singapore Ice Skating Association (Sisa) had expressed interest in one of the facilities. But its plans to turn the Bukit Merah pool into an ice-skating rink fell through when its partner from the private sector pulled out at the last minute.

Refurbishing the entire complex for ice skating would have cost a staggering $4million.

Said Sisa president Sonja Chong: ‘We looked at doing it up ourselves but, as a small sports association, we just didn’t have the means.’

The Singapore Ice Hockey Association (Siha) also considered converting a swimming pool into an ice-skating rink. But, again, the high costs were a deterrent.

‘We looked seriously at Bukit Merah, but we felt that the initial investment would be too high,’ said Siha president James Kodrowski.

He added that the location was also less than ideal, saying it was sited in an ageing neighbourhood with limited public transport options.

But not everyone has said no to former public swimming pools. Three other pools which were closed - Boon Lay, Farrer Park and Paya Lebar - have been leased out to sports organisations.

The pool at Boon Lay, for instance, has been covered over and turned into a hockey pitch. Hockey One, the company that runs the facility, spent nearly $900,000 to do that when it took over in 2006.

It now rents the pitch out to schools and individuals, for both hockey and futsal.

According to Hockey One proprietor Veer Singh, business is ‘not too bad’ and it has just renewed the lease for another three years.

In the case of Paya Lebar, it was used by the Triathlon Association of Singapore (TAS) between 2003 and 2007.

When the lease expired and the site was returned to the SLA, the TAS moved to its present home at the Delta Sports Complex.

But Farrer Park is still a hotbed of sports activity. The pool is run by the APS Swim School, founded by national swimming head coach Ang Peng Siong.

Ang, who has since left the school to concentrate on his national duties, spent between $60,000 and $80,000 to clean up and renovate the facility when he took over in 2004.

The school spends about $15,000 a month in rental and maintenance fees.

Said Ang: ‘It’s expensive, but Farrer Park has a lot of sporting history. By having the school here, we can salvage a little bit of that.’

---

Unwanted pools

~ Yan Kit: Singapore’s second-oldest public swimming pool was opened in 1952, and shut its doors in 2001.
~ Bukit Merah: Closed in 2003. The ice skating and ice hockey associations were interested in converting the pool into an ice-skating rink, but changed their minds owing to the high costs.
~ Pandan Gardens: Closed in 2003.
~ Jurong Town: Closed in 2003.

Getting to know Singapore’s urban heritage

Source : Business Times - 18 Apr 2009

A BOHEMIAN artists’ enclave in Tanjong Pagar, ’secret gardens’ in Chinatown and skate parks at Duxton Hill Park. These are some of the winning ideas generated by the inaugural Challenge for the Urban and Built Environment or CUBE.

The event, organised by the Urban Redevelopment Authority (URA), is aimed at raising awareness of the built environment and the dynamics of land use and urban planning among junior college and polytechnic students, and getting them familiar with Singapore’s urban heritage.

The three-day workshop and competition is part of URA’s Architecture and Urban Design Excellence Programme, an initiative to promote quality architecture and urban design. URA said yesterday that 10 teams, comprising about 100 students and teachers from seven junior colleges and three polytechnics, took part in the event.

The winning teams were Hwa Chong Institution, which clinched first prize, followed by Temasek Polytechnic and Serangoon Junior College.

URA chief executive officer Cheong Koon Hean said: ‘URA turns 35 this year. Marking this milestone with an urban planning competition for students creates more awareness of Singapore’s built environment and stirs interest among our bright young students in becoming the planners and architects of the future.’

During the three-day workshop, students aged 16-25 were introduced to the basics of architecture, urban planning and design. Interviews and observations were also conducted on the human and traffic patterns of parts of Chinatown. And a panel of judges from URA and industry provided critiques.

The teams were judged on sensitivity and relevance to site context and environment, creativity, clarity of ideas, execution of ideas, visual and verbal presentation skills and level of teamwork and cooperation displayed.

CUBE extends URA’s efforts to engage the younger generation. Urban planning workshops - the Young Urbanist Programme and Design My Place - have previously been conducted with primary and secondary school students.

These activities are aimed at helping a growing number of students better appreciate Singapore’s built environment and learn more about architecture and urban planning.

Raffles Hotel to have new owners again?

Source : Today - 17 Apr 2009

A BRITISH newspaper report has sparked off talk that Singapore’s Raffles Hotel could change owners yet again, for the second time in four years.

Citing unnamed hotel industry sources, the Times of London reported yesterday that Fairmont Raffles Hotels International (FRHI) — in which Saudi Prince Alwaleed bin Talal’s Kingdom Holding Company has a controlling stake — is putting the iconic property on the market for £300 million ($669 million) because of huge investment losses suffered by the billionaire Arab owner.

When contacted yesterday, the hotel said FRHI’s head office in Toronto, and not Raffles’ local office, deals with such developments. A Fairmont representative who was contacted was not able to respond by press time.

The report, which was picked up by several news media including Bloomberg and Arabianbusiness.com, said the proposed disposal is in response to the plunge in value of some of his biggest investments — which has seen the Prince’s wealth fall from US$21 billion ($31.4 billion) to about US$13 billion over the past year, according to Fortune magazine. The main cause is said to be his 5 per cent stake in Citigroup.

The newspaper quoted an unnamed analyst who is “intimately acquainted” with Prince Alwaleed’s affairs as saying: “He’s having a very challenging time.”

The billionaire is even looking for a buyer for The Savoy, London’s most famous hotel, according to another British paper, The Evening Standard.

The 121-year-old Raffles Hotel and its adjacent shopping arcade were snapped up in 2005 by United States-based private equity group Colony Capital for $1.7 billion. It was later merged with Fairmont Hotels & Resorts to form FRHI — owned 60:40 by KHC and Colony respectively.

Last May, a consortium led by former Credit Suisse banker Mark Pawley was to have bought the Grand Dame for an estimated $650 million, but the proposed deal fell through at the final hour.

CityDev sells 150 units of The Arte for $190m

Source : Business Times - 17 Apr 2009

THE buzz continues at property launches on the island. City Developments said yesterday that it achieved about $190 million of sales from selling about 150 units at The Arte at Thomson since March 21.

The freehold project is priced at $880 psf on average. No premium is being being charged for an interest absorption scheme (IAS) that CDL has extended to buyers. The scheme means buyers pay just the initial 20 per cent to CDL and defer paying the bulk of their purchase price until The Arte is completed. However, buyers have to take up a housing loan at the point of purchase.

CDL has released 180 of the total 336 units in the project, which comprises two 36-storey high towers.

The majority of The Arte’s buyers have private home addresses. Most of the units are going for under $2 million.

Over at Holland Road, Bukit Sembawang is releasing more units at its freehold Verdure from today. It has sold 14 of the 34 apartments in the five-storey project released last weekend. Verdure comprises 69 apartments, with an average price of about $1,350 psf, and six strata semi-detached homes, which cost about $4.8 million on average.

Bukit Sembawang had previously offered an IAS without charging any premium, but from today, buyers will have to pay 2 per cent more to benefit from the IAS.

Over at Tembeling Road in the Katong area, Alpha Land International is offering a small development with a total of 12 apartments. Prices in the five-storey freehold project, which is expected to be completed towards the end of this year or early next year, range from $663,840 (for an 818 sq ft two-bedroom unit) to $1.64 million (for a 2,379 sq ft four-bedder penthouse).

Alpha Land is offering an early bird discount in the form of renovation packages ranging from $10,000 to $25,000, depending on the size of the units. Tembeling Court is being marketed by Texan Associates.

Sim Lian Group will also launch its 360-unit HDB project Parc Lumiere tomorrow. Offered under HDB’s design, build and sell scheme, units in the Simei development have an average selling price of $425 psf. Parc Lumiere has four and five-room flats, with four-room flats selling for $378,000-$425,000 and five-room flats going for $462,000-$575,000.

Raffles Hotel reported to be going on sale

Source : Straits Times - 17 Apr 2009

THE wealthy Arab owner of Raffles Hotel is reported to have put the local icon back on the market in a bid to offset billion-dollar losses racked up in the financial meltdown.

Saudi Arabian Prince Alwaleed bin Taal Alsaud, who owns Raffles Hotel, is said to have put the heritage icon back on the market in a bid to offset billion-dollar losses racked up in the financial crisis. — PHOTOS: ST FILE PHOTO, BUSINESS TIMES, ISTOCKPHOTO

Prince Alwaleed Bin Talal Alsaud of Saudi Arabia is said to have put a price tag of $674 million on Raffles, the iconic heritage hotel on Beach Road.

London’s Times newspaper said yesterday that Fairmont Raffles Hotels International is seeking buyers for Raffles and other hotel assets, despite a severely depressed market.

If true, this is the second time in as many years that the Singapore landmark has been the subject of a sale.

However, the communications manager for Prince Alwaleed’s Kingdom Holding Company, which has a controlling stake in Fairmont Raffles, said early this morning that the Prince was not seeking a buyer for Raffles Hotel.

Last May, a proposed sale of Raffles Hotel to a consortium led by former Credit Suisse banker Mark Pawley failed to materialise for reasons that remain unclear. The deal was said to have been tagged at about $650 million.

The hotel is more than 120 years old and gazetted as a national monument.

Built by the Sarkies Brothers in 1887 on the site of a 10-room bungalow, the hotel expanded quickly and its fame grew far and wide, partly thanks to it being mentioned in the works of writers Somerset Maugham and Joseph Conrad.

In 2005, it was part of a hotel portfolio belonging to Raffles Holdings - since delisted - that was sold to US-based Colony Capital for $1.7 billion.

Colony Capital later merged that portfolio with Fairmont’s assets to create Fairmont Raffles. Other local assets owned by Fairmont Raffles include Fairmont Singapore and Swisshotel The Stamford.

The group has 123 hotels under the Fairmont, Raffles, Swisshotel and Delta brands.

The Saudi Arabia-based firm is one of the world’s leading hotel investors.

But industry sources told The Times the Saudi Prince is considering a range of disposals after a sharp fall in value of some of his biggest investments.

The Evening Standard in Britain yesterday said he is also looking for a buyer for the Savoy, London’s most famous hotel, which could be worth more than £200 million (S$445 million). Kingdom Holding has denied this report as well.

Prince Alwaleed’s investments have taken bruising hits, most notably in American banking giant Citigroup. His initial 3.9 per cent stake has plunged in value from more than US$50 a share two years ago to about US$4 today.

Last October, the Prince tried to stabilise the situation by increasing his stake to 5 per cent, but the shares have continued to nosedive.

KHC also lost a bundle of cash on its investments in Songbird Estates, the majority owner of London’s Canary Wharf financial complex, Euro Disney and Rupert Murdoch’s News Corporation.

Kingdom Hotel Investments, a small London-listed vehicle in which the Prince has a 55 per cent stake, has also lost more than two-thirds of its value in the past 12 months.

Fortune magazine said his wealth has fallen from US$21 billion to about US$13 billion (S$19 billion) over the past year.

Home-buying frenzy may stall: CIMB

Source : Today - 17 Apr 2009

TWO months of strong home sales may have sparked hopes of resilience in certain parts of the property market here, but the sector is still plagued by problems, said a CIMB-GK Securities report yesterday.

A supply overhang - due to default threats from deferred payment scheme buyers - and potential price falls in the high-end market, continue to weigh on property fundamentals, said Mr Donald Chua, who authored the report.

“There are issues that have not gone away … because of two months of good sales in the mass market,” he told Today.

In March, 1,220 uncompleted private homes - dominated by mass to mid-tier projects - were sold, holding up from February’s 1,323 units sold and much higher than January’s 108 units. But Mr Chua warned the buying frenzy “may well lose steam in the coming quarters” if land inventories for such projects run out and public housing prices start to retreat. “With the exception of City Developments (CDL), Fraser & Neave and UOL, we are hard-pressed to find other direct beneficiaries of this mass-market cycle,” he said.

He also believes aggressive price cutting will spread to the high-end homes, as appetite for the segment improves and leads more developers with cheap inventories to launch prime district projects.

This will put pressure on those who bought high-end land during the last up-cycle, said Mr Chua. “Falling prices will likely force developers to write down land-bank values on their books, something consensus is probably already expecting.”

In another report, Deutsche Bank warned the high-end market would remain sluggish, while pick-up at the lower end may not be sustained as pent-up demand gets satiated, Dow Jones Newswires reported.

Other brokerages were more bullish. OCBC called the current situation a “good opportunity for developers to lighten up their land bank and capture new sales to extend their earnings visibility”.

URA plans to get S’poreans acquainted with new developments

Source : Channel NewsAsia - 17 Apr 2009

The landscape of Singapore will soon look quite different as new developments spring up in the city centre and in the heartlands over the next few years.

Future skyline of Marina Bay - URA

By 2011 for instance, residents of Jurong will have more opportunities to live by the waterfront. Southern coastal areas like the Labrador Park and Bukit Chermin will also be made more accessible to the public.

These are on top of new projects coming up in the Marina Bay and Orchard Road areas.

Many of these plans were announced in recent years, but the Urban Redevelopment Authority (URA) wants to get more Singaporeans acquainted with them.

To do that, it is holding a series of activities and public exhibitions called “My New Singapore” from May this year.

Speaking at the URA Corporate Plan Seminar on Friday, National Development Minister Mah Bow Tan said: “We will show Singaporeans the plans for their neighbourhoods, bring them to see the new Marina Bay, and let them enjoy the parks and park connectors.

“I hope that when Singaporeans rediscover Singapore, we will realise what a special little city we have and perhaps, we will love our city even more.”

Other activities include the Marina Bay Festival in the later part of 2010, which will comprise a series of activities and events to showcase developments in the area.

Next year, the Housing and Development Board (HDB) will also conduct a series of roving exhibitions from March till July to show how HDB neighbourhoods have evolved and improved over the years.

There will also be new plans for public housing in the future.

New DBSS project sees queue days before applications open

Source : Channel NewsAsia - 17 Apr 2009

Over a hundred people have started queuing for the latest public housing project in Simei even though bookings are not scheduled to start till Tuesday.

Artist’s impression of Parc Lumiere - SIM LIAN GROUP website

Eager house-hunters have been at the Simei Road site since 8am in hope of viewing and eventually booking a unit at Parc Lumiere – a new project under the Housing and Development Board’s (HDB) Design, Build and Sell Scheme (DBSS).

They are taking no chances, especially when applications will be accepted on a first-come-first-served basis only.

Given the strong response, developers said applications may open from Saturday instead.

Four-room units at Parc Lumiere are priced between S$378,000 and S$425,000, while 5-room units are priced between S$462,000 and S$575,000.

One house-hunter said: “Price-wise, I don’t have a choice! I need a house. The longer I wait, the price will keep increasing. I haven’t seen a trend in prices dropping, so I have to get it. It’s now or never.”

Under this scheme, private developers manage the project from its design to construction and sale.

While units may come with condominium-like furnishings, the projects do not have facilities found in condominiums such as swimming pools.

Transform Joo Chiat from sleaze stop to Peranakan hub

Source : Straits Times - 17 Apr 2009

I REFER to the article, ‘Lights for notorious alley’ (April 3).

The sleaze plight of Joo Chiat residents is not new. Nor has it got better, as reported in the article. Despite the fact that the sleaze is officially contained within a 50m stretch, prostitutes and their customers are still found beyond this stretch.

Steps have been taken to curb the proliferation of sleaze in the area. However, these are knee-jerk, short-term and lacking in strategy or enforcement. They do not take into account the modus operandi of the prostitutes, the residential-commercial mix of the area or the restrictions imposed by the small lanes and alleys.

The police and government agencies, including the Ministry of Manpower, Urban Redevelopment Authority and Singapore Tourism Board, should work together to clamp down on the sex trade.

It is no longer enough to have police patrols and moratoriums because the prostitutes’ methods of operation have evolved. They now operate openly by planting themselves at coffee shops and calling out to men, with every intention of solicitation. Lighting up a ‘notorious alley’ is no longer enough because they are no longer afraid of lit areas.

Since the ban on indoor smoking, these prostitutes have spilled out of the bars and into the open. They have infiltrated nearby HDB blocks by renting rooms and taking their business back with them. It is no longer enough to ban hourly rates in Joo Chiat hotels. The prostitutes have become bolder and more quick-witted.??

With its beautiful Peranakan architecture and historic buildings, Joo Chiat has the potential to be a cultural destination, similar to Jonker Walk in Malacca. All we need is for the authorities, residents and business owners to commit themselves to a sleaze-free Joo Chiat all Singaporeans can be proud of.

Lee Chin Chye

Doing business? S’pore is fourth best

Source : Business Times - 17 Apr 2009

SINGAPORE has been named the fourth best country in the world in which to do business, an achievement that could help pull the country out of its worst recession in history.

The annual ranking of business-friendly countries by financial magazine Forbes Asia saw Singapore jump four spots from last year, leapfrogging Britain, Sweden, Ireland and Finland. Singapore also kept its regional top-dog position as the economy with the best business conditions in the Asia-Pacific. New Zealand was fifth, Australia eighth and Hong Kong ninth.

Business-friendly economies like Singapore, which are able to attract entrepreneurs, investors and workers, are ‘in a much better position than others to rebound’ from the economic downturn that has gripped the world, Forbes said.

Its survey ranked 127 countries according to criteria such as taxes, red tape, investor protection, stock market performance, promotion of free trade and freedom of expression and organisation.

The only three countries ahead of Singapore in the rankings were Denmark, the United States and Canada.

To top it off, 17 Singapore-listed firms also made it to this year’s Forbes Global 2000 list of the world’s 2,000 biggest public firms, ranked by profits, assets, sales and market value. Last year, only 14 firms from Singapore were featured.

In fact, with the financial meltdown centred around the US and Europe, Asian firms featured more prominently on the list this year. A total of 681 from the region made the list, 61 more than last year.

But the US is still the single dominant nation with 551 firms represented - including list-topper General Electric - although this number is down by 47 from last year’s. Japan, the clear leader in Asia, fielded 288 firms to the list, 29 more than last year. China, at No. 2, had 91 firms, an increase of 21 from that last year.

‘It’s not surprising that more Asian companies would be in the list this year,’ said Mr Kevin Scully, executive chairman of independent equity research firm Net-

Research Asia. ‘Asia is not the source of the economic problems we’ve been having, so their companies have probably fared better on a relative basis.’

The total turnover of all firms on the list was US$32 trillion (S$48 trillion), up 7.6 per cent from last year’s - the smallest gain since the list started in 2004.

SingTel led the local pack on Forbes 2000 in 290th place, up from 360th last year. It was followed by list newcomer Wilmar International at 314th, and DBS Group at 337th, up from 358th last year. Other newcomers included Fraser & Neave and Singapore Press Holdings.

Home sales set to rise in 3 to 12 months: CDL

Source : Straits Times - 17 Apr 2009

PROPERTY developer City Developments (CDL) said yesterday that it expects increasing numbers of homebuyers to enter the market in the next three to 12 months.

Its optimism stems from the sale of more than 80 per cent - or 150 units - of its newly-launched development, The Arte at Thomson. CDL has put 180 units of the 336-unit project on sale.

It said The Arte was ‘a record breaker of sorts’, being one of the few large projects launched in the global economic meltdown ‘that has tasted success’.

CDLs’ statement comes on the heels of newly released data that showed 1,220 new private homes sold last month, just shy of the 1,332 units sold in February.

This makes two consecutive months with more than 1,000 units sold - the first time it has happened in a year.

First-quarter private home sales have hit 2,660 units - about 62 per cent of all of last year’s new home sales.

It has led some to speculate that the market has indeed turned a corner.

CDL said that ‘after absorbing news of forecasts of a steep decline in GDP growth for 2009, the upbeat in sales volume could mean that there is greater confidence that a turnaround is in sight - with a steady rise expected in the property market within the next three to 12 months’.

But analysts maintain that this level of buying may not be sustainable.

Knight Frank director of research and consultancy, Mr Nicholas Mak, has estimated that only 6,000 to 7,000 new private homes are expected to be sold this year, unless the Singapore economy and employment market improve significantly.

However, CDL’s group general manager, Mr Chia Ngiang Hong, said that recent launches have shown that ‘buyers are still willing to spend when they see value and see a good deal’.

Developers, prompted by the challenging economic conditions, have lowered selling prices - by between 5 to 25 per cent - and these factors have contributed to larger transaction volumes, said CDL.

Sweet deals to keep tenants from fleeing

Source : Business Times - 17 Apr 2009

Some landlords offering rents below $10 psf in choice locations to cling on to prized tenants

Commercial landlords are fighting to retain prized tenants, with some choice buildings in Raffles Place said to be offering even single-digit rental rates.

According to industry sources who declined to be named due to the sensitivity of deals, rents below $10 per square foot have popped up in lease renegotiations for buildings such as OUB Centre and Equity Plaza. Some tenants in Singapore Land Tower have also received offers of around $7 psf, they said.

Such asking rents in the heart of the business district would have been rare during the property boom. But with firms consolidating or holding back on growth after the financial crisis broke, office demand has ‘weakened considerably’, said DTZ in an April 1 report.

Also, ‘more shadow space is emerging as companies scale down their workspace and sublease excess space’ and this trend could continue, it said.

As recently as end- 2008, the average monthly rent for Grade A space was still $15 psf. This fell 18 per cent to $12.30 psf at the end of March, said CB Richard Ellis. In the same period, the average monthly rent for prime office space also dropped 19 per cent to $10.50 psf.

‘Competition to retain tenants is on,’ Cushman & Wakefield Singapore managing director Donald Han commented.

Few landlords responded when BT asked about rents in their buildings. One which did - CapitaCommercial Trust (CCT) - said that signing rents for its Grade A offices are in the double-digit range. The trust owns several properties such as Six Battery Road.

A Keppel Land spokeswoman said that there are ’single-digit rental rates for some buildings and double-digits for others’ across Keppel Land and K-Reit Asia’s office portfolios, which include Equity Plaza and a one-third interest in One Raffles Quay.

She added that the age and non-regular layout of Equity Plaza could have led to single-digit rentals in some cases, but the property did secure double-digit rates in January.

To be fair, sources said that rents under $10 psf are still under negotiation in many cases. ‘It doesn’t mean there have been transactions,’ one pointed out.

Also, industry observers believe that only some existing tenants can benefit from these rates - these would be firms renting large spaces, taking up long leases or those with good corporate profiles.

Still, the low rents offered are putting pressure on new projects hoping to draw tenants away, sources said. They now have to propose better deals to convince companies to bear the costs and hassle of relocation.

Cushman & Wakefield Singapore estimates that around 2.4 million square feet of office space will come onstream in 2009, with more arriving thereafter. Projects taking shape include the Marina Bay Financial Centre, which Keppel Land is developing with Hongkong Land and Cheung Kong (Holdings)/ Hutchison Whampoa.

There is already talk that asking rents at the upcoming Straits Trading Building (next to Singapore Land Tower) have reached single-digit levels. Reports in the effervescent days of January last year noted that the development could fetch rents of $18 psf.

The 28-storey building is expected to receive its temporary occupation permit (TOP) in November and around 25 per cent of space has been pre-committed. According to The Straits Trading Company, asking rents range from $10 to $12 psf depending on contract terms.

Of course, rents do not tell the whole story; landlords are also giving out other incentives to retain tenants. ‘We start to see more creative packaging of deals,’ said Knight Frank director of business space (office) Agnes Tay. ‘Some deals can involve a higher transaction price but include more rent-free months to bring down the average cost.’

A CCT spokesman also shared: ‘If tenants are prepared to renew for a longer term, we would be able to offer more rental concessions.

‘Tenants will also be able to save additional costs expected to be incurred if they relocate - namely, reinstatement cost for the existing space, fitting out of new premises, business disruption, moving costs, etc.’

Lower rents and more concessions will give businesses here some cost relief. As Savills noted in February, Grade A office rents in Singapore are likely to be about 20 per cent cheaper than in Hong Kong by end-2010.

As rents shot up here in 2006 and 2007, Grade A office rents actually surpassed those in Hong Kong in H2 2007 and early 2008. As an example of the rapid rise of the property market then, reports note that monthly rents at One Raffles Quay were once $4 psf when leasing began in 2004; they have since gone up severalfold.

Two insurance firms launch rent protection scheme

Source : Business Times - 17 Apr 2009

AS disputes between landlords and tenants hot up, two insurance companies have launched a rent protection insurance scheme to shield residential landlords from rental income losses.

Said to be the first in Singapore and Asia, the product from Jardine Lloyd Thompson (JLT) and QBE Insurance makes up for up to 12 months of lost rent (capped at $100,000) in several events, such as the tenants defaulting on payments or real estate agents absconding with rents collected.

The insurance also covers other administrative costs such as legal fees incurred in evicting tenants.

At 15 per cent of one month’s rent, premium for the rent protection insurance is affordable, said JLT business development director Gerard Lee.

‘Landlords and real estate agents . . . have commented that it is being introduced at the right time in Singapore.’

The insurers noted a rising number of landlord-tenant dispute claims.

According to data they sourced from the Small Claims Tribunals of the Subordinate Courts of Singapore, there were 1,137 such cases in 2008 - 70 per cent more than a year earlier.

And feedback from the real estate industry indicates that most disputes do not even reach the tribunals, the insurers highlighted.

As Dennis Wee Group director Chris Koh said, it is hard to take some tenants to task if they have simply disappeared.

With market conditions deteriorating, the insurers also felt that rent protection insurance would come in handy.

Institute of Estate Agents president Jeff Foo observed that rent defaults have increased significantly from nine months ago, and such cases would hurt landlords that rely on rental income for mortgage payments.

The new product will be distributed through real estate agents, who will get a referral fee. Coverage applies for entire tenancy periods of up to 24 months, and landlords have to bear deductibles in some cases.

Rent protection insurance has spawned premiums of over A$30 million (S$32.5 million) in Australia, JLT said.

‘We believe that this product will find comparable success in Singapore and in Asia.’

HDB prices on their way down

Source : Straits Times - 16 Apr 2009

One-third of sales in the first quarter at or below valuation

GOOD news for home buyers eyeing the resale flat market: About one-third of HDB sales in the first quarter were struck at or below the flat’s valuation price.

The level in some areas was far higher. In Sengkang, for instance, up to three in four five-room flats sold by ERA Asia Pacific were done at or below valuation.

This means those buyers did not need upfront cash to buy their dream home.

Analysts say the trend indicates HDB flat prices are now coming down at a quicker rate after holding up better than many private residential properties.

In the recent market boom, many sellers sought prices well above valuation - a figure set by an independent valuer.

Buyers can use Central Provident Fund savings to pay for a flat only up to its valuation amount. They must stump up cash for any premium they pay above valuation.

The property agencies surveyed by The Straits Times, HSR Property Group, PropNex, ERA Asia Pacific and C&H Realty - which together account for almost the entire HDB market - said a significant 30 per cent to 40 per cent of first-quarter sales were done at or below valuation.

The agencies’ data showed prices crumbling for bigger flats such as five-roomers and executive flats. In Clementi, for instance, a five-room flat was sold for $70,000 below valuation at $500,000, while an executive flat in Tampines sold for $65,000 below its valuation at $515,000.

Industry observers say the HDB market, whose price trends typically lag behind those of the private sector, is finally reflecting the weakened economy.

Recent flash estimates showed HDB prices dipped 0.6 per cent in the first three months, compared with the fourth quarter of last year. It is the first fall since 2006.

Demand for resale flats has eased as the recession bites, while the HDB has been ramping up the supply of new flats, said Chesterton Suntec International head of research and consultancy Colin Tan. Home buyers also have more options now as prices of mass market condominiums are more affordable, he added.

ERA associate director Eugene Lim said home hunters were reluctant to pay more than $500,000 for HDB flats.

‘The longer these highly priced flats stay on the market, the more over-exposed they become. Consequently, some had to be sold at big discounts due to buyer resistance,’ he added.

The balance of power has now clearly shifted from sellers to buyers, with analysts saying this could be the time for buyers to do some bargain-hunting.

ERA’s first-quarter data showed that in locations such as Sengkang, a whopping 74 per cent of transactions for five-roomers were done at or below valuation. In Tampines, they accounted for 55 per cent while, at Jurong West, it was 42 per cent.

Even for smaller flat types like three-roomers in Ang Mo Kio and four-roomers at Woodlands, 42 per cent to 44 per cent of sales were at or below valuation.

Experts point out that while more flats are now selling below valuation, this does not mean people are selling at a loss as HDB prices rose a hefty 31.2 per cent in the property boom of the past two years. But first-time buyers, priced out of the resale market during the boom, will now find the flats more affordable.

The current discounts to valuation will eventually diminish when valuations catch up, which usually takes three months, said Knight Frank director of research and consultancy Nicholas Mak.

But there is a possibility of valuations and price falls chasing each other, further eroding prices, he said.

Developers’ sales carry note of hope

Source : Business Times - 16 Apr 2009

But healthiest quarterly sales in more than a year may not signal sustained recovery

A ray of hope dispelled some gloom in the private home market yesterday when new data showed developers selling 1,220 new units in March. This brings the number sold in Q1 2009 to 2,660 - the best quarterly performance since Q3 2007.

House hunting: Crowds at the Double Bay Residences showroom in Simei on March 6. The number of homes sold in Singapore in Q1 2009 has already reached about 60% of that for the whole of last year but observers caution that the property market still faces downside risks

But could this be a false dawn? Citing weak economic fundamentals, several industry watchers believe that it is still too early to say if a nascent recovery has begun.

According to Urban Redevelopment Authority (URA) figures from developer submissions, private home sales held up in March and dipped just 8 per cent below the 1,332 units sold in February. Both months’ showings were markedly better than in January, when buyers took up just 108 units.

In fact, the number of units sold in Q1 2009 has already reached around 60 per cent of that for the whole of 2008.

‘Most of the demand in the first three months of the year was from Singaporeans and permanent residents, a significant proportion of whom comprised HDB upgraders,’ said CBRE Research executive director Li Hiaw Ho.

Indeed, new launches in mass-market to mid-tier projects contributed to the bulk of sales in March. The most popular was Double Bay Residences in Simei - developers UOL Group and Kheng Leong sold 264 units at a median price of $659 psf.

Far East Organization also sold 101 units at its Mi Casa condominium in Choa Chu Kang at a median price of $617 psf, while 90 units at City Developments’ The Arte fetched a median price of $874 psf.

There is ’strong demand for lower-range properties in the outer areas that are priced below $1,000 psf,’ observed PropNex CEO Mohamed Ismail.

The mass-market and mid-tier sectors also dominated recent launches. DTZ senior director of research Chua Chor Hoon noted that 95 per cent of all launches in Q1 09 were outside the prime districts 9, 10 and 11. Developers brought out 832 new units in March, down 22 per cent from the 1,072 in February.

In contrast, activity in the Core Central Region continued to lag behind in March. Reception to The Mercury at Shanghai Road was the strongest, with buyers taking up 62 units at a median price of $1,148 psf.

The retreat of foreigners from the luxury property market could be one reason for the weak performance, said Knight Frank’s director of research and consultancy Nicholas Mak. ‘Preliminary figures suggest that the percentage of foreign transactions stood at 16.8 per cent in Q1 2009, settling at levels observed in Q2 2003 when the Sars outbreak badly affected the market.’

On the whole, most observers BT spoke to believe that the property market still faces downside risks - the coming months may see prices stay flat or fall and the number of units sold may decrease.

‘Historically, economic recovery precedes property market recovery,’ said DTZ’s Ms Chua. ‘Right now, there is no economic fundamental to support a bottoming of the property market.’

Just on Tuesday, the government cut its 2009 economic growth forecast again to a range of minus 6 to minus 9 per cent.

Already, there are signs of developers lowering prices to push sales. For instance, 6 units in Kovan Residences went for $782-$865 psf in February, achieving a median price of $809 psf. By March, 56 units were sold at a median price of $705 psf, with overall prices ranging from $597-$823 psf.

In fact, price cuts and the relatively affordable costs of smaller units could have spurred demand in the last few months, said DMG & Partners Securities analyst Brandon Lee. CIMB analyst Donald Chua also expects more price adjustments to happen at projects that have not been fully taken up.

In terms of new units that can be sold in the next nine months, few market watchers were confident of seeing the 1,000-a-month mark being crossed often. Some estimate that the transaction volume this year may range from 6,000-8,000 units in total. This would still be an improvement on 2008, when 4,264 units were sold.

Still, it’s not smooth sailing. Even some popular projects are taking back units. URA data indicates that buyers returned 20 units at the Caspian and 10 units at the Alexis between February and March.

URA will release more concrete data on home sales on April 24. Among other factors, its real estate statistics for Q1 2009 will take into account options on units sold that subsequently lapsed later.

Sim Lian Group to launch Parc Lumiere on April 18

Source : Channel NewsAsia - 16 Apr 2009

Main board listed developer Sim Lian Group will launch its latest development, Parc Lumiere, by walk-in-selection on April 18.

Parc Lumiere is a public housing project under the Housing & Development Board’s “Design, Build and Sell Scheme” (DBSS).

The development which is located near the Simei MRT station will comprise 360 four and five room units.

Sim Lian said the average selling price for the project is S$425 per square foot.

This translates to between S$378,000 and S$425,000 for a 4-room unit, or between S$462,000 and S$575,000 for the 5-room flat.

Viewing period for the units will begin from April 18 and home buyers can place their bookings from April 21.

Sim Lian said booking of flats will be made on a first-come-first-served basis and buyers will make payment for the units based on the Progress Payment model.

Sales at City Development’s “The Arte” surpassed 80%

Source : Channel NewsAsia - 16 Apr 2009

City Developments (CDL) said sales at “The Arte” condominium project have surpassed the 80 per cent mark.

The developer said 150 units were snapped up in a Phase 1 launch recently with S$190 million of deals recorded.

Most of those sold went for under S$2 million.

The 336-unit freehold project at Thomson Road has been priced at an average of S$880 per square foot, with units ranging from 1,055 sq ft for a two-bedroom apartment to 4,000 sq ft for a penthouse.

CDL has also offered buyers an interest absorption scheme which allows them to defer the bulk of their purchase till completion.

New private home sales surpassed the 1,000 mark in March, the second month in a row.

Abu Dhabi property market tops in M-E: survey

Source : Business Times - 16 Apr 2009

Abu Dhabi is likely to be the best performing real-estate market in the Middle East and North Africa in the next 12 to 24 months, according to an annual survey by the consulting firm Jones Lang LaSalle Inc.

A ‘balanced’ growth story, oil wealth and a relative undersupply of housing make the emirate the most attractive investment market in the region, the survey said. Property prices in Saudi Arabia and Qatar also are likely to outperform markets in other countries, the report added.

The worst financial crisis since the 1930s has weakened the property market in Gulf states as banks curtailed mortgage lending and speculators pulled out.

Real-estate prices in Dubai may decline 20 per cent more after falling 34 per cent from their peak last year, EFG-Hermes Holding SAE, Egypt’s biggest publicly traded investment bank, said last month.

Though all Middle East and North Africa real-estate markets are in a ‘downturn stage’, Saudi Arabia is the least affected and Dubai, which is struggling with the global economic crisis and a major supply coming to the market, is furthest from a recovery, the report said. Property prices will fall in all markets in 2009, with the smallest decline in Saudi Arabia, and liquidity should return in 12 to 18 months and support a broad recovery by 2011, the survey said.

Investors’ yield expectations have increased to about 11 per cent from 9 per cent in the last survey, according to the report.

Few Australian home owners face negative equity

Source : Business Times - 16 Apr 2009

Few Australian home borrowers face ‘negative equity’ if property prices fall because tighter lending standards and tax rules encourage households to repay debt faster than in other countries, a central bank official said.

‘Australian households by and large have more of a financial buffer against falls in housing prices than their American counterparts did,’ Luci Ellis, head of the Reserve Bank’s financial stability department, told a conference in Melbourne yesterday.

Australia’s financial system has withstood the shocks of the global financial crisis ‘better than many others’, partly because its housing and mortgage markets did not become as overextended as in the US, Ms Ellis said. The central bank cut borrowing costs last week to a 49-year low of 3 per cent to stoke an economy that is forecast by policymakers to contract this year for the first time in almost two decades.

‘There are signs that Australian banks and other lenders have become more risk-averse and they have tightened lending criteria somewhat,’ Ms Ellis said. ‘However, it appears that good-quality borrowers can still obtain and roll over credit.’ Households and businesses have also become more ‘risk averse’ than in recent years, are saving more, and have cut demand for credit, she said.

Total loans provided by banks and other finance companies were unchanged in February from January, when they rose 0.6 per cent, Reserve Bank of Australia figures showed on March 31. Loans to consumers to buy homes rose 0.6 per cent for an annual gain of 7.1 per cent.

Ms Ellis said that the global economic crisis has triggered debate, inside and outside central banks, on whether monetary policy should be used to respond to concerns about financial stability.

‘But there is also recognition in many quarters that low interest rates were not - and shouldn’t be - enough to cause such a crisis on their own,’ she said, referring to the interest rate cuts that followed the 2001 dotcom bust.

‘A lack of appropriate financial regulation in some countries is widely regarded as one of the important causes of the crisis,’ Ms Ellis said.

A key reason Australia’s housing market was less over-extended was that lending standards did not ease as much as in the US, according to the central bank.

‘Sitting on the other side of the world, it’s easy to lose sight of just how far lending standards did decline in the US mortgage market,’ Ms Ellis said. ‘Low-doc loans exist in Australia, but they are less common.’

Also, because Australians cannot deduct the interest on their home mortgage from their taxable income, as in the US, they are not encouraged to keep their mortgage balances high, she said.

‘Many Australian households pay off more than they have to. In doing so, they accumulate potential redraws that serve both as precautionary saving and an additional buffer of equity against falls in house prices.’

UK property slump eases as buyers return: surveyors

Source : Business Times - 16 Apr 2009

Average number of sales per surveyor up for the first time since 2007

The slump in UK house prices eased last month after more than a year of declines lured buyers back into the market, the Royal Institution of Chartered Surveyors (RICS) said.

The number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 73.1 percentage points in March, the lobby group said yesterday in London.

That compared with 78.1 in February and was the highest balance in 13 months.

The average number of sales per surveyor rose for the first time since 2007, climbing to 9.7 from 9.6.

The report adds to signs that the property market’s downward spiral is slowing.

The Bank of England has cut its benchmark interest rate to a record low, mortgage approvals increased in February and Nationwide Building Society said prices rose for the first time since October 2007 last month.

At the same time, the economy is still battling the worst recession since at least 1980, and prices may fall further in coming months.

‘We can all look forward to a tough year but one that in hindsight may yet signal the bottom of the market,’ said Benson Beard, a surveyor at Bective Leslie Marsh in London.

‘The last month has definitely seen an increase in buyer numbers and agreed sales.’

RICS’s main price index has been negative since August 2007.

Economists expected this month’s reading to be minus 77, according to the median estimate of 12 forecasts in a Bloomberg News survey.

London, the south-west of England and Scotland were the best-performing regions, RICS said.

East Anglia was among the worst.

UK prices have plunged after a decade-long boom, taking values to levels last seen in 2004, as the global financial crisis pushed the economy into a recession and banks restricted credit.

UK house prices declined 16.5 per cent in the year to February, the Land Registry reported on March 27.

Property values fell an annual 12.3 per cent in February, the Department of Communities and Local Government said yesterday in London.

From a month earlier, the figures dropped 2.7 per cent.

The Bank of England has responded to the recession by cutting its key rate to 0.5 per cent from 5 per cent in October.

Last month it started pumping money into the economy through purchases of government bonds.

The average cost of a home loan fixed for two years, one of the most popular, fell to 4.01 per cent in March, the Bank of England said on April 9.

While the rate hasn’t dropped as much as the bank’s benchmark, it is still lower than the 6.08 per cent average in August.

The number of new buyers registering with agents climbed for a fifth month, with the index reaching the highest since 2003, RICS said.

Surveyors’ optimism about sales and prices rose on the month, according to the report.

UK mortgage approvals rose 4 per cent in February, the Council of Mortgage lenders said yesterday.

The RICS ‘report does offer support to the view that the aggressive monetary easing is helping to stabilize the housing market,’ said James Knightley, an economist at ING Financial Markets in London.

Still, rising unemployment ‘runs the risk of a double dip in the housing market as people struggle to meet mortgage payments and more forced sellers emerge’.

The economy contracted 1.6 per cent in the fourth quarter, the most in almost 30 years.

Bank of England governor Mervyn King has said that the decline in output in the first quarter will be similar.

The central bank on April 9 kept the benchmark interest rate at 0.5 per cent, the lowest since the bank was founded in 1694, and said it will continue its programme to buy &pound75 billion (S$168 billion) of government and corporate bonds to stimulate the economy.