Source : Straits Times – 2 May 2009
I REFER to the letter by Mr Ng Kwong Yee, ‘Relook eligibility criteria for renting out HDB flats’ (April10).
We would like to assure Mr Ng that HDB flats are primarily meant for owner occupation. The HDB allows flat owners who have fulfilled a minimum occupation period (MOP) to sublet their whole flats. The MOP is three or five years, depending on whether the flat owner has enjoyed any subsidies for the flat. This provides flat owners the flexibility to use their flats to earn a rental income during periods when they do not require it for occupation.
Forty per cent of those who sublet their flats are Singaporeans above the age of 50. This subletting option allows elderly Singaporeans to earn additional income to meet daily expenses, while they move in to live with their adult children for mutual support.
As for those who flout the rules and sublet illegally, HDB will take strict action against them, ranging from a fine to compulsory acquisition of the flat.
We thank Mr Ng for his feedback.
Foo-Ho Yoke Ming (Mrs)Deputy Director (Branch Operations)Housing & Development Board
Saturday, May 2, 2009
What’s that condo called again?
Source : Straits Times – 2 May 2009
Home buyers may be drooling over the latest stylish new condominiums, but once they move in, they might face a tongue-twisting time.
That is because developers sure have got creative in the latest condo name game.
But it could translate to a word puzzle once hapless home owners move in and give directions to visitors.
Telling a well-travelled friend to ‘Take me to the Caspian‘ might have him wondering why you want to suddenly go around the world to the Caspian Sea in Russia.
But no, you would be meaning Caspian Condominium near Singapore’s Lakeside.
And be careful if you ask the friend to ‘Come and visit me at Double Bay this afternoon’.
He might assume you have moved to Australia as Double Bay is the name of a famous, ultra-expensive suburb in Sydney.
But you are really closer to home, at Double Bay Residences at Simei on the east coast.
E-mail someone to visit you at The Arte, and your visitor might find that his taxi driver has taken him to an art gallery.
Worse, if you were a smartie and asked for somewhere art-ee, you might find yourself at the MRT.
For the record, the 336-unit The Arte condo in Thomson Road is pronounced as ‘art’. The ‘e’ is silent.
Condo names come and go in waves of fashion, and where once monickers with @ in them or the word One were ‘in’, the latest trend is for fancy, posh-sounding names.
Developers say a well-chosen name can complement and enhance the development and helps to brand and define its positioning.
A spokesman for City Developments (CDL), developer of The Arte, says ‘arte’ is Italian for art and that the name is a ‘fitting reflection of the unique visual statement that the iconic design of the residence makes, which elevates architectural aesthetics to a work of art’.
However, one potential buyer, housewife Tammy Tan, 37, finds the chi-chi names confusing.
Ms Tan, who viewed The Arte’s showflat last month, asks: ‘Is it meant to be called ‘art’ or ‘art-ay’?’.
In addition to mispronunciations, there are misnomers.
The latest condominium project to be launched in Simei is Double Bay Residences, which oddly enough is located in an area where not a single bay is in sight.
Developer UOL Group says the 646-unit project was named after Sydney’s Double Bay because it has similar attributes.
The Double Bay residential suburb is in the east of Sydney near the city’s commercial centre and near Bondi Beach.
UOL says that like the Australian suburb, Double Bay Residences is in the eastern part of Singapore, near the Changi Business Park commercial district and the beach at East Coast Park.
The property developer has other projects with more apt names: Newton Suites in Newton Road and Duchess Residences in Duchess Road.
As for Caspian, a condominium in Boon Lay Way, a spokesman for developer Frasers Centrepoint Homes says the name was inspired by the Caspian Sea.
This is the largest lake in the world, which borders Azerbaijan, Russia, Kazakhstan and Iran.
‘It is surrounded by several islands, some of which hold significant geopolitical and economic importance,’ says the spokesman.
She adds: ‘Our project was similarly named because of its strategic location in the Jurong Lake District, which is an upcoming business, leisure and educational hub that promises home buyers a quality and vibrant lifestyle.’
According to CDL’s representative, various factors such as a project’s neighbourhood, views and architectural theme are considered in coming up with a name.
The Frasers Centrepoint spokesman says names chosen should be ‘tasteful, can be pronounced easily and have no negative societal or religious connotations’.
Still, not everyone is attracted to a project just because of its name.
‘The right location, price and size of the apartment are still more important than the name,’ says financial consultant Tommy Lim, 35, who is looking for a house.
Big And Cheap Condominium, anyone?
Home buyers may be drooling over the latest stylish new condominiums, but once they move in, they might face a tongue-twisting time.
That is because developers sure have got creative in the latest condo name game.
But it could translate to a word puzzle once hapless home owners move in and give directions to visitors.
Telling a well-travelled friend to ‘Take me to the Caspian‘ might have him wondering why you want to suddenly go around the world to the Caspian Sea in Russia.
But no, you would be meaning Caspian Condominium near Singapore’s Lakeside.
And be careful if you ask the friend to ‘Come and visit me at Double Bay this afternoon’.
He might assume you have moved to Australia as Double Bay is the name of a famous, ultra-expensive suburb in Sydney.
But you are really closer to home, at Double Bay Residences at Simei on the east coast.
E-mail someone to visit you at The Arte, and your visitor might find that his taxi driver has taken him to an art gallery.
Worse, if you were a smartie and asked for somewhere art-ee, you might find yourself at the MRT.
For the record, the 336-unit The Arte condo in Thomson Road is pronounced as ‘art’. The ‘e’ is silent.
Condo names come and go in waves of fashion, and where once monickers with @ in them or the word One were ‘in’, the latest trend is for fancy, posh-sounding names.
Developers say a well-chosen name can complement and enhance the development and helps to brand and define its positioning.
A spokesman for City Developments (CDL), developer of The Arte, says ‘arte’ is Italian for art and that the name is a ‘fitting reflection of the unique visual statement that the iconic design of the residence makes, which elevates architectural aesthetics to a work of art’.
However, one potential buyer, housewife Tammy Tan, 37, finds the chi-chi names confusing.
Ms Tan, who viewed The Arte’s showflat last month, asks: ‘Is it meant to be called ‘art’ or ‘art-ay’?’.
In addition to mispronunciations, there are misnomers.
The latest condominium project to be launched in Simei is Double Bay Residences, which oddly enough is located in an area where not a single bay is in sight.
Developer UOL Group says the 646-unit project was named after Sydney’s Double Bay because it has similar attributes.
The Double Bay residential suburb is in the east of Sydney near the city’s commercial centre and near Bondi Beach.
UOL says that like the Australian suburb, Double Bay Residences is in the eastern part of Singapore, near the Changi Business Park commercial district and the beach at East Coast Park.
The property developer has other projects with more apt names: Newton Suites in Newton Road and Duchess Residences in Duchess Road.
As for Caspian, a condominium in Boon Lay Way, a spokesman for developer Frasers Centrepoint Homes says the name was inspired by the Caspian Sea.
This is the largest lake in the world, which borders Azerbaijan, Russia, Kazakhstan and Iran.
‘It is surrounded by several islands, some of which hold significant geopolitical and economic importance,’ says the spokesman.
She adds: ‘Our project was similarly named because of its strategic location in the Jurong Lake District, which is an upcoming business, leisure and educational hub that promises home buyers a quality and vibrant lifestyle.’
According to CDL’s representative, various factors such as a project’s neighbourhood, views and architectural theme are considered in coming up with a name.
The Frasers Centrepoint spokesman says names chosen should be ‘tasteful, can be pronounced easily and have no negative societal or religious connotations’.
Still, not everyone is attracted to a project just because of its name.
‘The right location, price and size of the apartment are still more important than the name,’ says financial consultant Tommy Lim, 35, who is looking for a house.
Big And Cheap Condominium, anyone?
Condo heroes
Source : Business Times – 2 May 2009
UNTIL recently, Singapore’s list of best burger places held no more surprises than the familiar sandwiches themselves: among the line-up were such usual suspects as One-Ninety at the Four Seasons, Astons, Iggy’s and WineGarage. But then, last November, a tiny joint with a clumsy-sounding name opened in a place where no one would have thought to look for a good burger – and unexpectedly took a bite out of that list.
Sunshine @ Carrie’s is located within the Sommerville Park condominium at Farrer Drive, and its signature dish is the Sunshine Burger made with beef, bacon and ‘a bit of sunshine’ – a portobello mushroom. Each patty is hand-formed and juicy, the rashers of bacon are reamed with fat, and the bun is soft and fresh, so it’s no surprise that the burger is receiving rave reviews from foodies, some of whom reckon this to be Singapore’s best.
Of course, as with any other food, that’s arguable. What’s certain, however, is that the Sommerville Park cafe signals a new age in condo eateries, one where the pau machines and quick-fix fare of yore are replaced by speciality foods.
Indeed, Sunshine @ Carrie’s aside, several other decent, cuisine-focused eateries have sprung up within condo developments over the past six months. For starters, there’s an as-yet-unnamed Korean restaurant at Ridgewood Condominium, and the Italian cafe Buono (opened by the owner of the similarly-named Buono restaurant at Lichfield Road in Serangoon Gardens) within Chuan Park. Over at Rodyk Street’s Watermark condo, coffee specialist Kith Cafe has taken up a ground-floor unit, while Japanese seafood cafe Hokkaido Sandwich and Sashimi Bar has anchored at The Sail. Then there’s Mandarin Gardens‘ Thai-influenced Thaipan restaurant, which recently underwent a makeover and reopened in December with a bigger kitchen.
Why pick a condo to present food that could easily win over bigger audiences in a central area? Although such locations mean that these eateries get virtually no non-resident walk-ins and have to abide by the estates’ by-laws (no structural changes, no renovations without prior approval et cetera), the general consensus is that there is a lot to like about being situated within the residential developments.
Says Sunshine @ Carrie’s co-owner Andrew Sim, who originally wanted to set up shop at Holland Village: ‘The rental is much cheaper, for one thing.’ Also, because about 80 per cent of Sommerville Park’s residents are expatriates, the cafe – whose business has been ‘picking up ever since people started talking about us on the Internet’ – gets better feedback as the diner-residents are ‘well-travelled and used to eating well’.
In any case, how brisk one’s business is depends more on quality than on location, reckons Mr Sim, whose background is in food-and-beverage consulting. ‘In Singapore, wherever you are, if the food is good, people will come. Look at Sunset Grill at Seletar Airbase – it’s so obscure and yet you find people there.’
For Hokkaido Sandwich and Sashimi Bar, being in a CBD-situated condo ensures a flow of diners even after office workers leave for home. Ng Wai Khuan, who owns the bistro together with her husband, says that while during the day the cafe is busy with orders from those working at the nearby One Raffles Quay, the bulk of business after-hours comes from The Sail’s residents. ‘A lot of the other CBD stores are quiet at night, but we get residents coming down for dinner or to grab a quick bite,’ she says.
In fact, condo eateries may play an even bigger part in residents’ lives should the recent outbreak of swine flu worsen. Thaipan’s Paul Lee remembers when his restaurant opened in 2003 during the time of the SARS epidemic. ‘Our business did really well during that period because everyone was staying in, they didn’t go to the supermarket, lots of shops outside were closed. But they still needed to eat so they came downstairs. So for us, that was the time everyone really got to know us.’
With many of the condo cafes open to non-residents as well though, some residents feel that the businesses are doing the estates a disservice. At Chuan Park, complaints about parking problems have surfaced, while another resident who declined to be named feels that eateries that are open to the public and located within condos raise security issues. He says: ‘The restaurants bring non-residents into the estate, and it’s hard to keep tabs on so many people going in and out.’
But Thaipan’s Mr Lee points out: ‘A condo eatery is like a swimming pool, it adds value to the estate. We provide something for the residents and we also draw non-residents who may eventually like the place enough to buy it.
‘With Mandarin Gardens, for instance, they’ll come in and see that the estate not only has a restaurant but also a minimart, a kindergarten and more, and this will give the place more value.’
Still, such eateries must do their part to keep the peace, he adds, explaining that Thaipan does not advertise (’so that we don’t draw the crowds and inconvenience the residents’) nor openly market itself. Instead, the restaurant relies on ’soft marketing tactics’ such as word-of-mouth, says Mr Lee.
Sunshine @ Carrie’s Mr Sim agrees. ‘We close by 10pm and our last order is at 9pm so that we have time to shut down our machines and wash up by closing time,’ he says. ‘We do tell our diners to keep it down and the security guards appear like ninjas if it gets too noisy anyway! But we’ve not had any problems so far; everyone has been very cooperative. The residents have given me lots of encouragement and the management committee has been very kind to my cafe.
‘I’ll play by the rules because I don’t want to make things difficult for all parties.’
Most of the eateries BT Weekend spoke to have also introduced delivery or takeaway services so as to minimise the amount of traffic within the condos.
It stands to reason that if a balance can be struck, everyone has something to gain, says Mandarin Gardens resident J Chua. ‘The cafes will get good business without disrupting the convenience of others, the profile of the condo will be raised – that’s if the restaurant is good, of course. And everyone will have one more place to get a decent meal,’ she concludes.
UNTIL recently, Singapore’s list of best burger places held no more surprises than the familiar sandwiches themselves: among the line-up were such usual suspects as One-Ninety at the Four Seasons, Astons, Iggy’s and WineGarage. But then, last November, a tiny joint with a clumsy-sounding name opened in a place where no one would have thought to look for a good burger – and unexpectedly took a bite out of that list.
Sunshine @ Carrie’s is located within the Sommerville Park condominium at Farrer Drive, and its signature dish is the Sunshine Burger made with beef, bacon and ‘a bit of sunshine’ – a portobello mushroom. Each patty is hand-formed and juicy, the rashers of bacon are reamed with fat, and the bun is soft and fresh, so it’s no surprise that the burger is receiving rave reviews from foodies, some of whom reckon this to be Singapore’s best.
Of course, as with any other food, that’s arguable. What’s certain, however, is that the Sommerville Park cafe signals a new age in condo eateries, one where the pau machines and quick-fix fare of yore are replaced by speciality foods.
Indeed, Sunshine @ Carrie’s aside, several other decent, cuisine-focused eateries have sprung up within condo developments over the past six months. For starters, there’s an as-yet-unnamed Korean restaurant at Ridgewood Condominium, and the Italian cafe Buono (opened by the owner of the similarly-named Buono restaurant at Lichfield Road in Serangoon Gardens) within Chuan Park. Over at Rodyk Street’s Watermark condo, coffee specialist Kith Cafe has taken up a ground-floor unit, while Japanese seafood cafe Hokkaido Sandwich and Sashimi Bar has anchored at The Sail. Then there’s Mandarin Gardens‘ Thai-influenced Thaipan restaurant, which recently underwent a makeover and reopened in December with a bigger kitchen.
Why pick a condo to present food that could easily win over bigger audiences in a central area? Although such locations mean that these eateries get virtually no non-resident walk-ins and have to abide by the estates’ by-laws (no structural changes, no renovations without prior approval et cetera), the general consensus is that there is a lot to like about being situated within the residential developments.
Says Sunshine @ Carrie’s co-owner Andrew Sim, who originally wanted to set up shop at Holland Village: ‘The rental is much cheaper, for one thing.’ Also, because about 80 per cent of Sommerville Park’s residents are expatriates, the cafe – whose business has been ‘picking up ever since people started talking about us on the Internet’ – gets better feedback as the diner-residents are ‘well-travelled and used to eating well’.
In any case, how brisk one’s business is depends more on quality than on location, reckons Mr Sim, whose background is in food-and-beverage consulting. ‘In Singapore, wherever you are, if the food is good, people will come. Look at Sunset Grill at Seletar Airbase – it’s so obscure and yet you find people there.’
For Hokkaido Sandwich and Sashimi Bar, being in a CBD-situated condo ensures a flow of diners even after office workers leave for home. Ng Wai Khuan, who owns the bistro together with her husband, says that while during the day the cafe is busy with orders from those working at the nearby One Raffles Quay, the bulk of business after-hours comes from The Sail’s residents. ‘A lot of the other CBD stores are quiet at night, but we get residents coming down for dinner or to grab a quick bite,’ she says.
In fact, condo eateries may play an even bigger part in residents’ lives should the recent outbreak of swine flu worsen. Thaipan’s Paul Lee remembers when his restaurant opened in 2003 during the time of the SARS epidemic. ‘Our business did really well during that period because everyone was staying in, they didn’t go to the supermarket, lots of shops outside were closed. But they still needed to eat so they came downstairs. So for us, that was the time everyone really got to know us.’
With many of the condo cafes open to non-residents as well though, some residents feel that the businesses are doing the estates a disservice. At Chuan Park, complaints about parking problems have surfaced, while another resident who declined to be named feels that eateries that are open to the public and located within condos raise security issues. He says: ‘The restaurants bring non-residents into the estate, and it’s hard to keep tabs on so many people going in and out.’
But Thaipan’s Mr Lee points out: ‘A condo eatery is like a swimming pool, it adds value to the estate. We provide something for the residents and we also draw non-residents who may eventually like the place enough to buy it.
‘With Mandarin Gardens, for instance, they’ll come in and see that the estate not only has a restaurant but also a minimart, a kindergarten and more, and this will give the place more value.’
Still, such eateries must do their part to keep the peace, he adds, explaining that Thaipan does not advertise (’so that we don’t draw the crowds and inconvenience the residents’) nor openly market itself. Instead, the restaurant relies on ’soft marketing tactics’ such as word-of-mouth, says Mr Lee.
Sunshine @ Carrie’s Mr Sim agrees. ‘We close by 10pm and our last order is at 9pm so that we have time to shut down our machines and wash up by closing time,’ he says. ‘We do tell our diners to keep it down and the security guards appear like ninjas if it gets too noisy anyway! But we’ve not had any problems so far; everyone has been very cooperative. The residents have given me lots of encouragement and the management committee has been very kind to my cafe.
‘I’ll play by the rules because I don’t want to make things difficult for all parties.’
Most of the eateries BT Weekend spoke to have also introduced delivery or takeaway services so as to minimise the amount of traffic within the condos.
It stands to reason that if a balance can be struck, everyone has something to gain, says Mandarin Gardens resident J Chua. ‘The cafes will get good business without disrupting the convenience of others, the profile of the condo will be raised – that’s if the restaurant is good, of course. And everyone will have one more place to get a decent meal,’ she concludes.
Refinancing fears recede but Reits still cautious on outlook
Source : Business Times – 2 May 2009
REAL estate investment trusts (Reits) turned in a solid set of earnings for Q1 2009 – unlike the developer stocks – with most of the major Reits reporting incomes that were in line with analysts’ estimates.
And refinancing fears, which were dampening the market performance of Singapore-listed Reits just three months ago, now seem less urgent.
‘For the Reits under my coverage, the results were largely in line,’ said DBS Vickers analyst Derek Tan.
While the office sector here faces the greatest risk of seeing a sharp drop in rentals, first-quarter earnings were buffered by the fact that most leases up for renewal were signed three years ago. What this means for Reits is that when tenants sign new leases, they might pay below the current market rate, but still more than they were paying under their previous lease agreements. This provided income support for office Reits in Q1 2009, Mr Tan said.
For example, K-Reit Asia said that gross rental income from its properties – Keppel Towers, GE Tower, Prudential Tower and Bugis Junction Towers – rose 29 per cent year-on-year in Q1.
CapitaCommercial Trust (CCT), another office Reit, likewise said that rental reversion remained positive in Q1, at about 49 per cent higher than previous rents on a weighted-average basis.
However, some Reits here – such as CapitaMall Trust (CMT) and K-Reit – saw a fall in dividend per unit (DPU) because of enlarged share bases after rights issues.
More such DPU falls could be on the cards as some Reits here might still need to look for fresh funds, analysts said.
CCT, for example, said on Thursday that it has it has secured a three-year term loan facility for up to $160 million, which means that it has no more refinancing requirements for 2009. But Macquarie Research analysts Tuck Yin Soong and Elaine Cheong said in a note that they think there is still a risk of equity issuance in the next six to nine months to bring gearing down ahead of expected falls when assets are revalued at the end of this year.
Likewise, Suntec Reit also announced during its Q1 earnings that it has secured an $825 million loan facility. With this fresh loan, the office and retail trust has no further refinancing needs until 2011, it said. The cost of the new debt is slightly higher; the blended all-in interest margin now works out to less than 3.75 per cent, as compared to an all-in financing cost of 3.02 per cent in Q1 2009. Analysts said that this was a fair reflection of the current lending environment.
‘This announcement clears one ‘elephant in the room’ but it does not change our view on Suntec’s potential need for an equity issue to address falling capital values,’ said OCBC Investment Research analyst Meenal Kumar, who has a ‘buy’ call on Suntec Reit.
But on a whole, refinancing concerns, which were a sore point for many Reits at the end of last year, seemed to be less of a sticking point in Q1 2009 with some Reit announcing fresh refinancing deals. This led to some analysts to issue fresh ‘buy’ calls on some Reits. DMG & Partners Securities analyst Brandon Lee, for example, upgraded his recommendation on Suntec Reit to a ‘buy’ after the trust announced that it had secured the $825 million loan facility.
Reits are cautious heading into the rest of this year. Singapore’s largest Reit by market capitalisation CMT said that its first-quarter distributable income climbed 8 per cent after it added one property to its portfolio and completed improvements at two others. Rental renewal rates in Q1 2009 saw a moderate growth of 1.3 per cent over preceding rental rates, and gross revenue locked-in for this year exceeds 90 per cent of gross revenue for the whole of 2008.
But despite this, CMT – which owns malls such as Raffles City and Plaza Singapura – is cautious on its outlook. ‘The revenue outlook for CMT will depend on the extent, depth and duration of the economic recession and financial uncertainties on CMT’s tenants as well as new demand for retail space,’ said Lim Beng Chee, chief executive of the trust’s manager. Retail sales in Singapore fell for the fifth straight month in February.
And one fresh concern that has cropped up over last few days is swine flu and its potential impact on the Singapore market. A widespread pandemic or epidemic is likely to affect stocks related to travel and tourism, said OCBC Investment Research in an April 28 report.
‘Hospitality-linked Reits such as CDL Hospitality Trusts (CDLHT) and Ascott Residence Trust will likely be affected in such a scenario,’ OCBC’s research team said. ‘We believe the impact will be larger on CDLHT which derives its revenue from short-stay hotel properties.’
And on a broader scale, retail Reits such as Frasers Centrepoint Trust and Suntec Reit could also be affected. In particular, ‘premium’ malls that rely on high tourist traffic as compared to the suburban malls will be affected, said OCBC’s report.
‘Big picture: we feel the macroeconomic crisis has already pushed sector valuations to distressed levels,’ said OCBC’s research team. ‘A pandemic scenario would depress near-term yields, but our investment calls should be relatively unaffected.’
REAL estate investment trusts (Reits) turned in a solid set of earnings for Q1 2009 – unlike the developer stocks – with most of the major Reits reporting incomes that were in line with analysts’ estimates.
And refinancing fears, which were dampening the market performance of Singapore-listed Reits just three months ago, now seem less urgent.
‘For the Reits under my coverage, the results were largely in line,’ said DBS Vickers analyst Derek Tan.
While the office sector here faces the greatest risk of seeing a sharp drop in rentals, first-quarter earnings were buffered by the fact that most leases up for renewal were signed three years ago. What this means for Reits is that when tenants sign new leases, they might pay below the current market rate, but still more than they were paying under their previous lease agreements. This provided income support for office Reits in Q1 2009, Mr Tan said.
For example, K-Reit Asia said that gross rental income from its properties – Keppel Towers, GE Tower, Prudential Tower and Bugis Junction Towers – rose 29 per cent year-on-year in Q1.
CapitaCommercial Trust (CCT), another office Reit, likewise said that rental reversion remained positive in Q1, at about 49 per cent higher than previous rents on a weighted-average basis.
However, some Reits here – such as CapitaMall Trust (CMT) and K-Reit – saw a fall in dividend per unit (DPU) because of enlarged share bases after rights issues.
More such DPU falls could be on the cards as some Reits here might still need to look for fresh funds, analysts said.
CCT, for example, said on Thursday that it has it has secured a three-year term loan facility for up to $160 million, which means that it has no more refinancing requirements for 2009. But Macquarie Research analysts Tuck Yin Soong and Elaine Cheong said in a note that they think there is still a risk of equity issuance in the next six to nine months to bring gearing down ahead of expected falls when assets are revalued at the end of this year.
Likewise, Suntec Reit also announced during its Q1 earnings that it has secured an $825 million loan facility. With this fresh loan, the office and retail trust has no further refinancing needs until 2011, it said. The cost of the new debt is slightly higher; the blended all-in interest margin now works out to less than 3.75 per cent, as compared to an all-in financing cost of 3.02 per cent in Q1 2009. Analysts said that this was a fair reflection of the current lending environment.
‘This announcement clears one ‘elephant in the room’ but it does not change our view on Suntec’s potential need for an equity issue to address falling capital values,’ said OCBC Investment Research analyst Meenal Kumar, who has a ‘buy’ call on Suntec Reit.
But on a whole, refinancing concerns, which were a sore point for many Reits at the end of last year, seemed to be less of a sticking point in Q1 2009 with some Reit announcing fresh refinancing deals. This led to some analysts to issue fresh ‘buy’ calls on some Reits. DMG & Partners Securities analyst Brandon Lee, for example, upgraded his recommendation on Suntec Reit to a ‘buy’ after the trust announced that it had secured the $825 million loan facility.
Reits are cautious heading into the rest of this year. Singapore’s largest Reit by market capitalisation CMT said that its first-quarter distributable income climbed 8 per cent after it added one property to its portfolio and completed improvements at two others. Rental renewal rates in Q1 2009 saw a moderate growth of 1.3 per cent over preceding rental rates, and gross revenue locked-in for this year exceeds 90 per cent of gross revenue for the whole of 2008.
But despite this, CMT – which owns malls such as Raffles City and Plaza Singapura – is cautious on its outlook. ‘The revenue outlook for CMT will depend on the extent, depth and duration of the economic recession and financial uncertainties on CMT’s tenants as well as new demand for retail space,’ said Lim Beng Chee, chief executive of the trust’s manager. Retail sales in Singapore fell for the fifth straight month in February.
And one fresh concern that has cropped up over last few days is swine flu and its potential impact on the Singapore market. A widespread pandemic or epidemic is likely to affect stocks related to travel and tourism, said OCBC Investment Research in an April 28 report.
‘Hospitality-linked Reits such as CDL Hospitality Trusts (CDLHT) and Ascott Residence Trust will likely be affected in such a scenario,’ OCBC’s research team said. ‘We believe the impact will be larger on CDLHT which derives its revenue from short-stay hotel properties.’
And on a broader scale, retail Reits such as Frasers Centrepoint Trust and Suntec Reit could also be affected. In particular, ‘premium’ malls that rely on high tourist traffic as compared to the suburban malls will be affected, said OCBC’s report.
‘Big picture: we feel the macroeconomic crisis has already pushed sector valuations to distressed levels,’ said OCBC’s research team. ‘A pandemic scenario would depress near-term yields, but our investment calls should be relatively unaffected.’
Friday, May 1, 2009
Condo life at Woodleigh Close hits an irritating bump
Source : Straits Times – 1 May 2009
SINCE construction started on a condominium, Parc Mondrian, next to my home at Euro Asia Park in Woodleigh Close, off Upper Serangoon Road, I have had to put up with illegal parking of motor vehicles and heavy vehicles along Woodleigh Close leading to my home, as well as incessant construction noise, especially from 6pm to 10pm almost every night.
I have lodged e-mail complaints with the Traffic Police, Land Transport Authority and Building and Construction Authority. I have received either a lukewarm response or none at all.
Every day, a concrete pump truck with an RU licence plate is about 10m from the entrance to my condominium, round the clock without any barrier or warning lights at night.
If I am not mistaken, vehicles with RU plates are not supposed to be on the road. This truck poses a potential danger, especially at night.
Also throughout the day, every day, there is a line of vehicles parked along the road leading to my condo. They ignore the fire hydrant on the pavement and the continuous white line on the road and park indiscriminately.
As for the noise pollution, since the construction site is near a residential area, the construction site should limit its activities to between 8am and 6pm. This is not the case here as residents have to endure incessant noise well above the permitted level of 70 to 80 decibels stipulated by the Ministry of Manpower.
Ooi Oon Hee
SINCE construction started on a condominium, Parc Mondrian, next to my home at Euro Asia Park in Woodleigh Close, off Upper Serangoon Road, I have had to put up with illegal parking of motor vehicles and heavy vehicles along Woodleigh Close leading to my home, as well as incessant construction noise, especially from 6pm to 10pm almost every night.
I have lodged e-mail complaints with the Traffic Police, Land Transport Authority and Building and Construction Authority. I have received either a lukewarm response or none at all.
Every day, a concrete pump truck with an RU licence plate is about 10m from the entrance to my condominium, round the clock without any barrier or warning lights at night.
If I am not mistaken, vehicles with RU plates are not supposed to be on the road. This truck poses a potential danger, especially at night.
Also throughout the day, every day, there is a line of vehicles parked along the road leading to my condo. They ignore the fire hydrant on the pavement and the continuous white line on the road and park indiscriminately.
As for the noise pollution, since the construction site is near a residential area, the construction site should limit its activities to between 8am and 6pm. This is not the case here as residents have to endure incessant noise well above the permitted level of 70 to 80 decibels stipulated by the Ministry of Manpower.
Ooi Oon Hee
BCA strives to make buildings more accessible
Source : Straits Times – 1 May 2009
I REFER to the concerns raised by Madam Lucy Ng in her letter last Saturday, ‘No, it’s a bumpy ride’. We recognise the current challenges faced by users with diverse mobility needs, especially in older buildings built before the 1990 Code on Barrier-free Accessibility in Buildings came into effect.
To prepare for an ageing population and promote an inclusive society, the Building and Construction Authority (BCA) mapped out a five-year Barrier-free Accessibility Masterplan in 2006 to improve accessibility in the city.
In particular, we have extended a $40 million Accessibility Fund for building owners to upgrade buildings with accessible features. So far, 26 pre-1990 buildings have tapped the fund, and we encourage more building owners to use this fund to improve accessibility in and around their buildings.
For new buildings, BCA regularly reviews the accessibility code with user groups, the private sector and other government agencies to ensure they are able to meet the needs of not just wheelchair users, but also the elderly and ambulant disabled.
It was unfortunate that both lifts at the Tiong Bahru market were under service when Madam Ng and her mother visited. Nonetheless, we would like to highlight that building owners are required to keep the accessible features in their premises well-maintained and functional to facilitate movement of people with diverse mobility needs.
Like Madam Ng, we are concerned about the extent of barrier-free accessibility in the built environment and we have progressively been assessing buildings and rating their levels of accessibility. We would like to highlight that a database of buildings with user-friendly and accessible features is available on our Friendly Built Environment Portal (www.friendlybuildings.sg). Users can access information on the location of accessible entrances and facilities in shopping complexes, food centres, offices and parks. There are 700 buildings in our database and we are continually adding to the list.
We would like to assure Madam Ng that BCA works with both public agencies, user communities and private sector organisations to shape a friendly built environment for all. We seek everyone’s support to be considerate of the needs of individuals with diverse mobility needs, by extending help where possible and leveraging on BCA’s initiatives to provide seamless mobility for all.
Chin Chi LeongDirectorBuilding Plan Management DivisionBuilding and Construction Authority
I REFER to the concerns raised by Madam Lucy Ng in her letter last Saturday, ‘No, it’s a bumpy ride’. We recognise the current challenges faced by users with diverse mobility needs, especially in older buildings built before the 1990 Code on Barrier-free Accessibility in Buildings came into effect.
To prepare for an ageing population and promote an inclusive society, the Building and Construction Authority (BCA) mapped out a five-year Barrier-free Accessibility Masterplan in 2006 to improve accessibility in the city.
In particular, we have extended a $40 million Accessibility Fund for building owners to upgrade buildings with accessible features. So far, 26 pre-1990 buildings have tapped the fund, and we encourage more building owners to use this fund to improve accessibility in and around their buildings.
For new buildings, BCA regularly reviews the accessibility code with user groups, the private sector and other government agencies to ensure they are able to meet the needs of not just wheelchair users, but also the elderly and ambulant disabled.
It was unfortunate that both lifts at the Tiong Bahru market were under service when Madam Ng and her mother visited. Nonetheless, we would like to highlight that building owners are required to keep the accessible features in their premises well-maintained and functional to facilitate movement of people with diverse mobility needs.
Like Madam Ng, we are concerned about the extent of barrier-free accessibility in the built environment and we have progressively been assessing buildings and rating their levels of accessibility. We would like to highlight that a database of buildings with user-friendly and accessible features is available on our Friendly Built Environment Portal (www.friendlybuildings.sg). Users can access information on the location of accessible entrances and facilities in shopping complexes, food centres, offices and parks. There are 700 buildings in our database and we are continually adding to the list.
We would like to assure Madam Ng that BCA works with both public agencies, user communities and private sector organisations to shape a friendly built environment for all. We seek everyone’s support to be considerate of the needs of individuals with diverse mobility needs, by extending help where possible and leveraging on BCA’s initiatives to provide seamless mobility for all.
Chin Chi LeongDirectorBuilding Plan Management DivisionBuilding and Construction Authority
Thursday, April 30, 2009
MCL books profit on just 5 Fernhill units in Q1
Source : Business Times - 30 Apr 2009
HONG Kong Land subsidiary MCL Land, which yesterday posted a 72 per cent year-on-year drop in net profit to US$1.4 million for the first quarter ended March 31, 2009, said that the buyer of 20 units at The Fernhill project has not made the necessary payment when the project received Temporary Occupation Permit (TOP) in March. This confirms a recent BT report.
As a result, MCL booked for Q1 the profit for only the five units in the 25-unit freehold project for which buyers have paid the outstanding purchase price by the payment date.
MCL Land’s policy is to recognise 100 per cent of sales and profits on units sold only when the project receives TOP. However, for Fernhill, it has deferred income recognition for the 20 units because of the outstanding payment.
The company, which reported Q1 revenue of US$8.3 million, said that had the purchaser of the 20 units paid up in full, MCL’s Q1 revenue and profit would have been US$31 million and US$9.3 million higher respectively.
If the buyer of the 20 units - which BT has reported as Concordia Overseas Pte Ltd - fails to pay up by the time a 21-day notice period to repudiate the sale and purchase agreement ends around late-May, MCL would be entited to treat the 20 per cent paid so far as forfeited and resell the units. At that point, MCL can book the 20 per cent as forfeiture income. As and when it resells the freehold apartments, it can book profit on them. If MCL sells at above $1,128 psf ($1,410 psf sale price to Concordia less the 20 per cent collected so far), then the total profit on the 20 units would be higher than the said US$9.3 million. This is likely to be the case given prices being fetched at recent launches in District 10.
BT’s earlier report said that Concordia, controlled by Hong Kong resident Chan Ki, had bought all 25 apartments in The Fernhill in January 2007 at $1,410 per square foot. Later the same year, it flipped five of these units to foreigners at an average price of nearly $2,200 psf.
Market watchers say the outcome for The Fernhill reflects the risk of selling the chunk of units in a project to a single buyer on a deferred payment scheme (DPS), where typically only 10-20 per cent of the purchase price is paid initially, with the bulk due when the project receives TOP. DPS was scrapped in October 2007.
MCL has another two projects slated for completion this year - - the 129-unit Tierra Vue condo at St Patrick’s Road and Hillcrest Villa, a 163-unit cluster terrace homes development in the Dunearn Road area.
These projects have been sold to individuals although a handful of buyers are believed to have purchased two to three units each. For Hillcrest, another factor that should reduce the risk of non-completion of sales is that all the buyers are Singaporeans (the project is classified as landed housing). Property consultants say that property investors, especially foreigners and even if they are permanent residents in some cases, are finding it tough to get housing loans from banks.
In February, MCL became the first Singapore-listed developer to book provisions for its residential landbank this market downcycle. It wrote down the value of development properties for sale by US$180.2 million, and this pushed MCL into the red, with a US$107.3 million net loss.
The provisions leave MCL with flexibility to launch new projects at an opportune time, generate cash flow and begin a new cycle of profit-booking.
MCL Land chairman YK Pang said in yesterday’s results statement: ‘With strong cash flow generated from the sale of development properties and a healthy balance sheet, the group is well placed to weather the difficult economic and market conditions.’
Earnings per share fell from 1.36 US cents in Q1 2008 to 0.38 US cent in Q1 2009.
Greening buildings in bad times a hard sell
Source : Straits Times - 30 Apr 2009
EVEN as it topped a global list published this week of cities with the best infrastructure, and ranks reasonably in quality of life, Singapore has barely begun to make its buildings energy-efficient. It is one contradiction that can be fixed with policy measures and private sector cooperation. The second Building and Construction Authority (BCA) green building master plan, unveiled on Monday, could achieve that - if incentives and injunctions work. The first plan, begun in 2006, made only 1 per cent of buildings energy-efficient, despite what the BCA described as a ’sharp increase’ in buildings meeting its Green Mark last year.
Aiming to render 80 per cent of buildings green by 2030, the new plan shifts the emphasis from new to existing buildings. It is a tactical refocusing that could have wider potential impact, since these buildings account for a third of national electricity consumption. The BCA will offer $100 million in government co-funding to retrofit such buildings as shopping malls, hotels, offices and hospitals so they can cut their energy costs by at least 20 per cent. It estimates energy savings at $120 million a year, which is not a bad rate of return on investment. The critical question is, are there enough building owners who are in a position to take advantage of the incentive? Many are expecting to collect less rent as business slows further.
Developers of new buildings face a similar constraint. Energy efficiency will likely not be their first priority even if they are bold enough to begin construction in a recession. Like owners of existing buildings, they will want the BCA to indicate long if not short term gains. The plan will award 1 or 2 per cent bonus gross floor area, capped at 2,500 sq m or 5,000 sq m, if buildings reduce energy consumption by 25 or 30 per cent. Developers will have to go to the drawing board, literally, to build green technology into the designs. Again, how many can BCA convince with the green carrot? Perhaps because of the economic climate, only in several ’strategic growth areas’ are higher energy standards set (as land sales conditions).
National Development Minister Mah Bow Tan has pointed out that sustainable development efforts and tackling economic challenges ‘are not mutually exclusive’. With deeper pockets, the Government can and will take the lead, by greening existing and new public buildings. As soon as the economy recovers, the private sector will be more willing and able to follow that lead. It will do well to help Singapore maintain the best infrastructure and achieve among the highest and most sustainable liveability standards.
More ’sky gardens’ set to blossom
Source : Straits Times - 30 Apr 2009
EXPECT to see more ‘gardens in the sky’ in Singapore, especially in areas like Orchard Road, Raffles Place and along the Singapore River.
A new plan launched yesterday by the Urban Redevelopment Authority (URA) makes it a must for new developments coming up in several areas from December to have landscaping.
This can take the form of rooftop gardens, planter boxes and sky terraces on the upper levels. Developers will also be encouraged to landscape their grounds.
The areas affected by this new ruling are the Downtown Core - which encompasses Raffles Place, Shenton Way, and Marina Centre - along the Kallang River, and Jurong Gateway, the upcoming commercial hub in the west.
Existing buildings will not be left out.
Those in Orchard Road and the business district will be allowed to open outdoor refreshment areas on their rooftops. To do this, they will be given additional gross floor area of half the roof area or up to 200 sq m.
This complements a programme launched on Monday by the Building Construction Authority (BCA) and URA. Under it, private buildings which are eco-friendly enough to achieve high standards under BCA’s Green Mark scheme get additional gross floor area.
The new URA initiative, launched yesterday, is called Landscaping for Urban Spaces and High-Rises (Lush), and is part of a national sustainability blueprint launched by an inter-ministerial committee on Monday.
The blueprint sets national targets for pollution standards, energy usage and green areas over the next 20 years, and aims to create a more environmentally friendly and energy-efficient nation.
In addition to the Lush programme, the National Parks Board also announced yesterday an $8 million fund that developers can tap to create rooftop gardens on existing buildings.
To be launched in September, the fund will offset up to $75 per sq metre for landscaping costs - about half the $150 to $180 per sq m usually charged by gardening companies.
Landlords in the Orchard Road and downtown areas can apply to the fund.
In announcing the plans yesterday, the URA said that encouraging private developers to include greenery in their buildings is becoming increasingly important as Singapore becomes more built up.
Developers that The Straits Times spoke to yesterday welcomed the moves, but had suggestions to make the scheme more attractive as URA had said that the the usual development charges (DC) would apply.
The DC rate is pegged at 70 per cent of a building’s enhanced land value.
Managing director of City Developments Kwek Leng Joo felt that while developers can make use of the additional area, they would have to grapple with the additional costs.
‘We would suggest that the DC rate be pegged at the previous rate of 50 per cent instead of the current 70 per cent, which most developers find too high.
‘This could make the incentive more attractive and effective to help the policy take off quickly,’ he said.
Will DC complicate the green push?
Source : Business Times - 30 Apr 2009
Reverting to the 50% formula might be timely
NEW incentives rolled out this week to support the greening of Singapore’s buildings have once again put the spotlight on the formula for calculating development charges (DC).
For instance, the Building and Construction Authority and Urban Redevelopment Authority will offer bonus Gross Floor Area (GFA) of up to one per cent of total GFA capped at 2,500 square metres to developers that construct new buildings which attain Green Mark Gold Plus rating.
For new projects that achieve the top Platinum rating, a higher bonus GFA of up to 2 per cent capped at 5,000 sq m will be granted as incentive.
The bonus GFA is not free; DC is payable.
URA has also announced a new incentive to promote skyrise greenery. It will allow additional GFA for existing buildings within key activity corridors in the Orchard and Downtown Core planning areas.
The additional space can be used for outdoor refreshment areas on the rooftop level if owners provide rooftop landscaping for their developments. Again, DC is payable for this bonus GFA.
Unfortunately the way DC has been calculated since a formula change in July 2007 could diminish the attactiveness of these incentives. The current DC formula creams off 70 per cent of the appreciation in land value that arises from changing the use of a site or putting more GFA on it.
The previous DC formula, which was effective between 1985 and July 2007, creamed off 50 per cent of the enhancement in land value. A point to note is that prior to 1985, DC rates had also been based on the 70 per cent formula, until they were adjusted to 50 per cent during the 1985 recession.
With Singapore in the throes of a slump currently, many property industry players have called on the government to reinstate the 50 per cent formula.
After all, in 1985, the authorities deemed it fit to cut the DC rate to 50 per cent because of the recession and the same should apply now as Singapore is going through its worst recession.
Another reason to argue for a restoration of the 50 per cent DC formula is that sharing the appreciation in land value equally between government and private land owner - instead of developers being forced to surrender 70 per cent of the enhancement to the state - would be a fairer policy. Developers have to be given sufficient incentive to bear the risk of development.
Now, there’s an extra reason why it would be timely for the government to reinstate the previous DC formula: to spur developers to attain higher Green Mark ratings for their buildings and promote skyrise greenery on the island. According to BCA data, it costs 2-8 per cent more to develop a building to attain the top Platinum standard and the payback period for this is between two and eight years.
For developments built to the second-highest Green Mark standard of Gold Plus, the green cost premium is 1-3 per cent and the payback period is 2-6 years.
Having to pay a lower DC rate on the bonus GFA would lessen the cost burden to developers keen on building new projects that attain the top two Green Mark ratings.
Some observers have suggested that even if the government refuses to restore the old 50 per cent DC formula, it should at least consider using this formula for computing DC for the bonus GFA under the new schemes announced this week.
But having different DC rates for different purposes may complicate things. Retaining the current uniform DC rate would be desirable but a reversion to the old 50 per cent formula would be a timely move for the government to give developers more bang for their buck to invest in green buildings.
It will also allow the government to get maximum effect from its newly minted schemes to promote Sustainable Development in Singapore.
Rooftop landscaping gets $8m boost
Source : Business Times - 30 Apr 2009
NParks launches 3-year co-funding scheme; URA starts landscaping for urban spaces plan
Hot on the heels of a sustainable development blueprint released on Monday, the National Parks Board (NParks) yesterday announced a three-year $8 million scheme to co-fund rooftop landscaping in the city.
The Urban Redevelopment Authority (URA) also launched its landscaping for urban spaces and high-rises (Lush) programme to help meet the blueprint’s goal of creating another 50 hectares of ’sky-rise’ greenery by 2030.
‘Despite Singapore being land scarce, greenery can be pervasive in our urban spaces,’ said URA chief executive Cheong Koon Hean. From September this year, NParks will give cash incentives to owners who install green roofs on existing buildings in the downtown and Orchard planning areas. The scheme will first target low- to mid-rise developments that are highly visible, and those surrounded by little street-level greenery.
NParks hopes to create nine hectares of green roofs over the next three years. The incentives will cover up to half of installation costs, capped at $75 per sq m. According to the agency, the typical cost of installing a green roof ranges from $150-$180 per sq m.
Gardens on the roof cost more than those on the ground for every square metre, said Singapore Institute of Landscape Architects’ president Henry Steed. ‘But once you have built it, the asset is there and the land usable, whereas a plain roof is not.’
In conjunction with NParks’ scheme, URA will offer owners who install green roofs bonus gross floor area (GFA) above the master plan permissible intensity. The additional space - limited to half of the roof area or 200 sq m, whichever is lower - can be used for outdoor refreshment areas.
Developers will have to pay a development charge (DC) or differential premium, but URA believes the bonus GFA offer is sufficiently attractive.
The current DC calculation formula creams off 70 per cent of the enhancement in land value, but ‘there’s still a 30 per cent gain for developers,’ said URA’s urban design deputy director Cheng Hsing Yao.
The GFA incentive scheme is part of URA’s Lush programme, which includes other existing and revised measures to enhance the urban landscape.
For instance, developers applying to exclude sky terraces from GFA computations now have to submit detailed plans on landscaping and communal facilities at the terraces.
Developers housing car parks within raised decks must also put up earth berms for plants on at least 60 per cent of each side of the deck wall, and should surround the area with see-through fences rather than solid walls.
In the strategic areas of the Downtown Core, including Marina Bay, Kallang Riverside and Jurong Gateway, new developments also have to put in place ’sky-rise’ greenery or ground-level landscaping equivalent to the site area in size.
For very small plots where buildings have to be tall to maximise the plot ratio, ‘replacement is typically not too difficult,’ said Singapore Institute of Architects immediate past-president Tai Lee Siang.
Both Mr Steed and Mr Tai believe more can be done to promote urban greenery.
Mr Steed, for instance, envisions it will ultimately be possible for all roofs to have green features ranging from gardens, water catchment areas and even mini-farms.
Live and work in Armenian Street
Source : Today - 30 Apr 2009
Hong How Investments tests the market with a new SoHo development
LOCAL developer Hong How Investments is testing the market with the soft launch of 14 units in a SoHo development on Armenian street.
It has cut its asking price by 12.5 per cent to $2,100 to $2,200 per square foot (psf) from the $2,400 to $2,500 psf range when the developer was first ready for launch last August.
While enquiries have been forthcoming since the soft launch on April 9, Hong How said interested buyers have so far offered below asking price. “For some of the interested buyers, we are prepared to negotiate,” said Hong How director Teo Teck Weng.
SoHo stands for “small office, home office” and refers to purpose-built office units that double up as homes. They often come with like kitchenettes and bathrooms.
Hong How’s development is called “36/38 Armenian Street” and encompasses the former Mayfair City Hotel. It is located near The Substation theatre in the heart of the art and heritage district around City Hall.
Despite the gloomy sentiment, Knight Frank’s director of research and consultancy Nicholas Mak expects the appetite for SoHo units to remain intact when the economy recovers.
“There’s definitely a future for SoHo partly because it’s very difficult for property investors to buy commercial property,” said Mr Mak.
“SoHo also allows for flexibility uses which some office buildings don’t allow. So that’s another plus point.”
The SoHo hybrid concept is still relatively new to Singapore. Far East Organization was first to try it out on a large scale with its Central development above Clark Quay in 2004. This included 227 SoHo units which were sold out by 2007, fetching prices as high as $2,000 psf.
Other developments include Straits Trading and Great Eastern Life’s China Square Central project, with 81 shophouses converted into SoHo units alongside office and retail space.
Jones Lang LaSalle is the marketing agent for 14 of the remaining 24 available SoHo units in 36/38 Armenian Street.
So far, both investors and owner-occupiers like design firms and boutique fund managers have shown interest. But Hong How’s Mr Teo expects most buyers to be owner-occupiers. “It’s going to take us another nine months or so to finish the development … at which point I think we can get a much better price,” he said.
Last August, the developer sold an entire four-storey block in the project to a single art collector. It intends to sell the remaining 10 offices and 13 retail units as an enbloc sale to a property fund.
While analysts praise its location, Colliers International’s research director Tay Huey Ying said: “In today’s market, demand could be affected due to weak sentiment in the investors market and in the office market, when companies are down-sizing and we don’t see new businesses being started.”
Franklin raising US$700b with eye on distressed property sales
Source : Business Times - 30 Apr 2009
The fund will wait till banks arrive at a valuation for their problem assets
US fund manager Franklin Templeton is looking to raise about US$700 million for real estate investment this year as it braces for a flood of distressed sales from banks, its managing director for European property, Raymond Jacobs, said.
‘We are going towards a distressed sales situation, but we’re not there yet . . . banks are still trying to figure out what to do with their problem assets,’ Mr Jacobs told Reuters in an interview.
The commercial property sector has been ravaged by the credit crisis causing waves of mortgage breaches, but most banks have so far been hesitant to dispose of repossessed assets due to a lack of clear market valuations, he said.
‘We still need transactional evidence, which will come as soon as banks have a clear feel of what to do with the properties . . . that will trigger forced sales, and when it happens we will get to a market bottom,’ said Mr Jacobs.
The company’s global-focused Franklin International Real Estate Fund 3 is currently raising US$300 million, he said, while the Franklin Templeton European Real Estate Fund of Funds 2 will launch by the year-end and target 300 million euros (S$586 million).
The New York-based fund manager sees British commercial property as the most attractive among developed markets, as it has seen the sharpest drop in values in the current downturn compared with continental Europe and the United States.
The main difference in the repricing, said Mr Jacobs, is because UK property owners such as real estate investment trusts are required to regularly provide ‘mark-to-market’ valuations, even when no transactions have taken place.
‘We haven’t seen a lot of that repricing take place yet in continental Europe, partly because of a different way of valuing assets there, which is more of valuations based on transactions,’ said Mr Jacobs, a Dutch national.
The current lack of transaction data in Europe has caused valuations to be higher than they should really be, he argued, comparing it to a previous European property bust two decades ago, where banks had refused to accept lower prices.
‘Our hope is that it won’t be in the same situation as in the late 1980s where a number of participants in the European market put their heads in the sand and hoped that this would resolve by itself,’ Mr Jacobs said.
‘There were good examples in markets like France and Spain where things took much longer to recover, because of inability to act by banks and distressed owners,’ he added.
While some real estate funds have spied rich pickings from the carnage in commercial property lending and are stockpiling cash to buy discounted debt from banks, Franklin Templeton is still waiting to see how the market plays out.
‘It is the flavour of the month because currently it’s much easier to put a price on the debt of something that was historically set, than it is on the value of something in the future,’ Mr Jacobs said.
While the company is adopting a wait-and-see stance before investing in real estate debt funds, it has no interest in more complicated, bond-like products such as commercial mortgage-backed securities (CMBS).
‘(CMBS) does not have the control element of real estate investments. We are real estate investors and we like to have a certain control over the assets.’
Malacca building 2 cities to draw Arab tourists
Source : Business Times - 30 Apr 2009
Arab investors will spend US$303 million on building two ‘Arab Cities’ to lure Middle Eastern tourists to the historic Malaysian town of Malacca, a report said on Wednesday.
The RM1.1 billion (S$456 million) project includes an Arabian bazaar, Middle Eastern restaurants, shopping complex, five-star hotel, water theme park, and a unisex Arabic health and beauty spa, The Star daily said Wednesday.
One of the ‘Arab Cities’ will be built on a small island lying south of Malacca town, while the other will be located at a beachside resort just west of the historic port, it said.
Malacca chief minister Mohamad Ali Rustam reportedly said that the project, due for completion by 2012, will attract more Middle Eastern tourists and give locals a chance to experience Arabic culture.
Malaysia’s tourism industry has seen a sharp rise in the number of big-spending tourists from the Middle East in recent years, attracted by the tropical country’s Islamic image.
Some 264,338 visitors from the region made their way to Malaysia last year, almost double the figure recorded in 2005.
The capital Kuala Lumpur has already seen the introduction of an ‘Arab Street’ to make tourists from the Middle East feel at home.
Tourism was Malaysia’s second highest foreign exchange earner in 2007, raking in US$14 billion in revenue from 21 million tourists arrivals.
The government, however, expects tourist numbers to fall 9.3 per cent to 20 million this year as the global economic slowdown hits.
Wednesday, April 29, 2009
Vienna tops in living quality, S’pore improves ranking
Source : Business Times - 29 Apr 2009
Mercer has released the findings of its annual quality-of-living survey, showing Vienna, Zurich and Geneva to be the top three cities to live in.
Vienna managed to oust Zurich from the top spot in this year’s survey, due in part to improvements in Austria’s political and social environment.
The city also led Europe in a strong showing - the top 10 list was largely dominated by German and Swiss cities, with most of them retaining their rankings from the previous year.
The Asia-Pacific region also had its bright sparks.
Ranked at 26, Singapore led all Asian cities by a comfortable margin, with Tokyo being the next highest- ranked city at 35.
Up six places from the previous survey, Singapore was also Asia-Pacific’s biggest mover.
This was attributed to the development of Singapore as a key financial centre as well as the many international and private schools available to the expatriate community.
Singapore’s infrastructure was also deemed a cut above the rest. Factoring in essentials like electricity supply, water availability and traffic congestion, Singapore emerged at the top of this index, beating out Munich and Copenhagen.
Aimed at helping governments and major companies decide deployment destinations for employees, the survey could also help companies streamline costs, said Cathy Loose, Asia-Pacific global mobility leader with Mercer’s information product solutions.
‘As a result of the current financial crisis, multinational companies are looking to review their international assignment policies with a view to cutting costs,’ said Ms Loose.
‘Many companies plan to reduce the number of medium to long-term international assignments and localise their expatriate compensation packages where possible, although the hardship allowance, based on quality-of-living criteria, will remain an essential component of the package.’
Two hundred and fifteen cities were considered for this survey, with New York City being used as the base with an index score of 100.
Singapore is Asia’s most liveable city
Source : Straits Times - 29 Apr 2009
SINGAPORE has risen six places in a global ranking of cities with the highest quality of living, overtaking cities such as Paris in France and Honolulu and San Francisco in the United States.
At 26th place, the Republic also surpassed all its Asian neighbours to be the region’s best performer in the latest Worldwide Quality of Living Survey by human resource consultancy Mercer.
As the icing on the cake, Singapore also topped Mercer’s list of cities with the best infrastructure in the world. It proved superior in various areas, including electricity and water supply, telephone and mail services, public transport, traffic congestion and range of international flights from local airports.
Although it is often taken for granted, infrastructure ‘has a significant effect on the quality of living experienced by expatriates’, said Ms Cathy Loose, Mercer’s Asia Pacific global mobility leader.
The development of Marina Bay and Sentosa Cove as new waterfront living areas appear to have boosted Singapore’s position in the rankings.
‘Singapore already has excellent housing, but now its new ocean-front and seafront living options have allowed the ranking to move even higher,’ said Mr Derrick Kon, Mercer’s Singapore global mobility leader.
He added that the ‘high-quality houses and apartments’ that are available for rent and the ‘excellent selection of appliances and furniture’ for residents definitely helped elevate Singapore’s quality of life.
The other factor that contributed to Singapore’s higher ranking is the presence of ‘many good schools’ in the city, said Mr Kon.
‘Singapore has always had a lot of good schools and international schools, but now there are also more private schools offering university degrees,’ he said.
‘If expatriates come here with their children, this is one area they would be looking at, and in Singapore they would have a lot of options, with international programmes and university programmes.’
Singapore’s strong position in quality of life rankings such as these could stand the nation in good stead in the current financial crisis, said Mr Mark Ellwood, managing director of Robert Walters, another human resource consultancy.
With companies looking to cut costs, many are reducing the number of international assignments and localising their expat compensation packages where possible, which means not giving out the ‘hardship’ allowances or benefits that are offered to expats who have to live in cities with a lower quality of life.
‘There is perhaps less of an argument these days that Singapore is a hardship posting, so you don’t have to give many expat benefits in terms of additional bells and whistles,’ said Mr Ellwood.
Singapore is the only Asian city on the top 100 list that managed to increase its ranking this year, with the rest largely maintaining their previous positions.
China’s capital, Beijing, moved up three places from 116 to 113 due to public transport improvements stemming from the Olympic Games last year, but Bangkok in Thailand and Mumbai in India both dropped in the rankings amid worsened stability and security.
Globally, the Austrian city of Vienna overtook Switzerland’s Zurich to boast the best quality of life this year. European cities continued to dominate the top positions in the ranking, amid a sprinkling of Canadian and American cities.
Mercer publishes this list annually to help multinational companies determine an appropriate amount of compensation for expatriates sent to work in difficult locations.
Work begins on Marina expressway
Source : Straits Times - 29 Apr 2009
WORK on Singapore’s 10th expressway, and its most complex and expensive one to date, started yesterday.
The Marina Coastal Expressway (MCE) is meant to deal with traffic expected at the new attractions, offices and residences going up in the Marina Bay area.
These include the new integrated resort, the Gardens by the Bay and the Marina Cruise Centre at Marina South.
With five lanes in each direction, it has the capacity to move up to 10,000 cars per hour each way, compared to the 6,000 cars per hour each way on the Kallang-Paya Lebar Expressway (KPE).
Once completed in 2013, the MCE will link the KPE and East Coast Parkway (ECP) in the east, and with the Ayer Rajah Expressway in the west.
Motorists who are not headed downtown can also use the MCE to bypass the Marina Bay area.
There will be four exits and four entrances along its 5km length.
To ease congestion, the ECP stretch just after Benjamin Sheares Bridge will be converted into a network of normal arterial roads to serve the area. Currently, this portion of the ECP splits the Marina area into two unlinked sections.
Said Transport Minister Raymond Lim at the launch of the mammoth project yesterday: ‘The MCE will be a valuable addition to our expressway network. It will improve our road connectivity and help to support the future development of our city.’
Of its 5km length, 3.6km will be underground, including a 420m stretch parallel to the Marina Barrage which will duck 20m below the mean sea level.
It will be 120m wide at some points, almost three times the width of the KPE.
The project is so massive that civil works have to be carved up into six portions so that the construction crews are not overstretched.
So far, the cost of the project has come up to $4.1 billion - far exceeding the $2.5 billion estimated in 2007.
In comparison, the 12km-long KPE, which has 9km of road underground and some parts under the Singapore River, cost $1.7 billion.
The Land Transport Authority (LTA) said that it considered alternatives like building a network of bridges to link the area, but decided against it as it would ‘devalue’ property in the area and ‘look messy’.
Reasons for the high costs include:
~ Large-scale excavations of up to 25m deep and 120m wide;
~ Difficult soil conditions - the soil is made up mostly of soft marine clay;
~ The need to drill up to 59m - or 20 storeys - in some areas of the seabed to get to solid ground for piling work;
~ Reclamation of 13.1ha of land at the Marina Wharf and Marina East area;
~ High raw material costs when tenders were awarded. A clause in LTA’s contracts ensures that if raw materials are purchased by contractors at lower prices, the Government will be reimbursed the difference; and
~ The cost of Electronic Road Pricing gantries at the entrances and exits, which is included in the construction cost.
Despite the technicalities of the project, Mr Lim assured the public that all work will be done safely.
Among the safety measures employed for the MCE is an SMS alert system that will send continuous alerts to engineers on data like ground movements that is collected and analysed on a regular basis.
Professor Robert Mair, who is on an international panel of consultants called in to review the MCE, noted that the complexity of the project was ‘right up there with the toughest in the world’.
Similar projects include Shanghai’s Yangtze River tunnel and Japan’s Tokyo Bay Aqua Line.
The head of civil and environmental engineering at Cambridge University added, however, that LTA is well-equipped and experienced to handle this project.
Said Prof Mair: ‘Looking at their robust structures, soil investigations and monitoring systems, they have taken on board the lessons learnt from Nicoll Highway.’
Developers meet valuers in search for common ground
Source : Business Times - 29 Apr 2009
Developers last week held a meeting with valuers amid recent complaints in some quarters that conservative valuations have derailed some home sale deals as potential buyers could not secure the required loan quantum from banks.
BT understands that the valuers disagreed with the developers that their valuations had been too conservative, and that it was the banks that were just not lending.
‘Generally, if there are transactions, we’ll match (with valuations). It’s the banks that are more cautious about lending to certain profiles of borrowers like investors, especially if they are foreigners,’ a valuer told BT.
The valuers also raised issues that they had been facing in recent months, such as a dearth of comparable transactions, and explained the methods that they use to arrive at valuations in such situations.
‘We explained that some banks require valuers to look at three comparable transactions, and how we generally do not take into account outlier transactions that may perhaps reflect ‘depressed’ prices,’ another valuer said.
Sources say that the meeting was amicable, drawing more than 20 valuers and heads of property consulting groups and the executive committee members of the Real Estate Developers Association of Singapore led by its president, Simon Cheong.
When contacted, a Redas spokesman said: ‘We wanted to better understand issues that valuers may have in their day-to-day valuation and what else the profession may need from developers to enable them to give (as) updated and relevant (a) valuation as possible.
‘The discussions were general in nature and discrepancies in valuations in some instances were highlighted and analysed. Valuers shared with us some of the constraints they are facing such as the lack of or insufficient comparable sales data and other issues.
‘The session was fruitful as it helped us understand one another better and we agreed to look into areas where communication and interaction could be improved upon.’
A property consultant told BT that he found it odd that the same banks that were willing to give a 75 per cent or 80 per cent loan on a high-end residential unit when it was priced at $2,000 psf (thus assuming an exposure for about $1,500 to $1,600 psf) are now reluctant to give even 50 or 60 per cent loan when the property is going for a much lower price of $1,200 psf (which works out to $600-720 psf exposure for the bank).
‘It’s particularly difficult for foreign buyers, even PRs in some instances, to get loans for investment properties. Banks are more willing to lend to Singaporeans buying residential properties for owner occupation.
‘Some of the bigger banks should take the lead and be more proactive in lending to property buyers, not just for entry-level but also luxury homes, given that spot prices have already come off about 40 per cent.’
Agreeing, another valuer said: ‘We provide the valuations. It’s up to the banks whether they want to lend, and how much. It’s a commercial decision for them.’
Giving his take on the challenges facing the profession, a senior valuer said: ‘We have to be as level headed as possible and (assign) a sensible value. Valuers play a very important role in the financial system and economy, as we’re marking everybody’s asset values.’
This was the first time Redas has met valuers as a group, at least in recent years, and this follows its maiden meeting in November with analysts in stockbroking research houses covering the sector.
Redas also holds regular dialogues with government agencies such as Urban Redevelopment Authority, and Building and Construction Authority. ‘Such dialogues provide learning opportunities for Redas and promote better understanding across the industry leading to a healthy property market,’ the association’s spokesman added.
Two lessons from KepLand cash call
Source : Business Times - 29 Apr 2009
SOME were surprised by Keppel Land’s $712 million rights issue announced last Friday. Though there had been whispers that the property developer was in need of funds due to its high gearing, those rumours had somewhat died down, thanks partly to the company’s indication that there was no need for a rights issue during its results briefing in January.
But, as BT understands it, the company was in early discussions with bankers about a potential rights issues at the beginning of the year.
Consider that Neptune Orient Lines (NOL) was rapped recently for not making a frank disclosure when market rumours of a rights issue were making their rounds. How then should one view Keppel Land? It would have been better if the company’s indication that it had no need for a cash call in January had also flagged its discussions with the banks. Preliminary or not, the fact that the negotiations took place suggested that a rights issue was an option being mulled over.
Instead, by just indicating that a rights issue was something that was unnecessary, it created the market perception that no cash call was forthcoming. Keppel Land shares subsequently enjoyed a rally over the last couple of months as property counters surged.
This was in contrast to CapitaLand’s response to talk of a rights issue earlier this year. The company told the market that it had made no decision on fund-raising and that it remained open to all forms of fund-raising. That signalled to the market that there was a possibility of a rights issue (which materialised in the end), although no decision was taken at the time.
Of course, many things can change over the course of a few months in the current environment. So it is possible that Keppel Land had no need to raise funds back in January, but has found itself in a different situation now.
Two conclusions can be drawn from the development. Considering the speculation over cash calls by Temasek-linked companies, Keppel Land should perhaps have been more circumspect when it responded to questions of a potential rights issue back in January. It could have said it had no need for fund-raising, but indicated that it was a possible option if circumstances changed. And between then and now, it could have found a way to alert the market that the situation had changed enough to warrant a cash call.
The other conclusion is that investors should not take such indications from companies at face value.
Concerns over Keppel Land’s high gearing had been highlighted as early as late last year, which led some analysts to ignore what the company said in January and stick to the position that it would sooner or later need to tap on shareholders for funds.
But shareholders who took Keppel Land’s word at face value now find themselves having to fork out more money or face being diluted by the rights issue. That the rights issue was priced at a 42 per cent discount offers some comfort - but it’s still not something that leaves a good taste in the mouth.
Work begins on S’pore’s 10th expressway
Source : Business Times - 29 Apr 2009
The Land Transport Authority (LTA) broke ground yesterday on the construction of Singapore’s first road tunnel under the sea, the Marina Coastal Expressway (MCE).
The new expressway, slated for completion in 2013, will connect the Kallang-Paya Lebar Expressway (KPE) and the East Coast Parkway (ECP) to the Ayer Rajah Expressway (AYE).
‘The MCE underscores the government’s commitment to continue investing in Singapore’s road network,’ Transport Minister Raymond Lim said at the ground-breaking ceremony.
‘The MCE will be our 10th expressway, after the KPE which opened last year. We will continue to invest in road infrastructure for the future, within the constraints of our limited land space. By 2020, we will complete the North South Expressway (NSE), which will provide an additional route from the north to the city.’
The 5 km MCE is the most ambitious project undertaken by the LTA and involves the widest road tunnel in Singapore, with five lanes going in each direction.
A 420 m section of the expressway will be beneath the sea bed. At its deepest point, it will be about 20 m below mean sea level. Some 13.1 ha of land will be reclaimed for the project - 9.1 ha at Marina Wharf and 4 ha at Marina East.
Singapore’s 10th expressway is also notable for another superlative - it will be the country’s most expensive expressway, with the value of contracts awarded so far coming up to $4.1 billion.
Exceeding a budgeted figure of $2.5 billion, based on lower construction and engineering costs in 2006, the contracts awarded so far comprise six major civil contracts and four major system-wide contracts. One minor civil contract and three other system-wide contracts are still to be awarded.
In comparison, Singapore’s second most expensive expressway, the KPE, cost $1.8 billion to build.
According to LTA, some of cost of the MCE may be recovered if the prices of materials fall, due to a price fluctuation clause in contracts.
Apart from higher tender prices, construction of the MCE in difficult ground and soil conditions, as well as additional safety requirements for the sub-sea tunnel, added to the overall cost.
Construction will take place in soft clay that runs as deep as 60 m in some places.
‘Soft clay is not very good for construction,’ said Chuah Han Leong, LTA’s director of the MCE project. ‘It is like working with toothpaste. So we have to conduct extensive ground improvement to enhance the safety of the excavation.’
Planning for the MCE was done with an eye on property values. To increase the development potential of prime land in Marina Bay, the section of the ECP that runs through Marina South will be realigned and downgraded to an arterial road.
‘The MCE will add to the long-term growth of Singapore and increase accessibility to the Marina Bay downtown area,’ said LTA chief executive Yam Ah Mee.
80% of buildings to be eco-friendly by 2030
Source : Straits Times - 27 Apr 2009
GREEN buildings make up a paltry 1 per cent of buildings in Singapore today, but come 2030, that number will grow to cover 80 per cent of all buildings.
This is one of the most ambitious of the many targets outlined by the Inter- Ministerial Committee on Sustainable Development in its inaugural report released yesterday.
To help achieve this, property developers will be offered a carrot - free extra floor area if their new buildings are built in a way that meets high Green Mark standards. The Government has also set aside a $600 million fund to green existing public and private buildings.
Launched in 2005, the BCA Green Mark Scheme is a system that rates a building’s environmental performance.
When fully implemented, all these initiatives under the Building and Construction Authority’s (BCA’s) second green building masterplan will help Singapore achieve annual savings of $1.6 billion in terms of energy cost reductions.
BCA’s second masterplan expands on the first one, which focused on greening new buildings. A total of 245 buildings met the Green Mark standard.
But public feedback had urged BCA to do more with existing buildings, which make up majority of Singapore’s physical landscape, said BCA’s chief executive John Keung.
Under the new masterplan, the public sector will drive the transformation by requiring all new, large air-conditioned public buildings to achieve the highest Platinum standard from now on.
In addition, the Government will pump $500 million into greening all its public buildings to the GoldPlus standard - just one level below Platinum.
For the private sector, BCA will hand out $100 million in cash incentives to building owners to help them retrofit buildings to be more energy efficient.
Land sales to builders in strategic growth areas such as Marina Bay, Jurong Lake District, Kallang Riverside and Paya Lebar Central will also now come with a condition: Buildings constructed on the sites must achieve either a Green Mark Platinum or GoldPlus rating.
To provide incentives to the private sector, BCA is handing out free gross floor area (GFA) for new private buildings - a suggestion made by industry players during the report’s feedback sessions.
Developers who build Green Mark GoldPlus buildings will get an extra 1 per cent of GFA, capped at 2,500 sq m; while Platinum buildings will get an extra 2 per cent, capped at 5,000 sq m.
Industry players such as City Developments’ managing director Kwek Leng Joo have welcomed the move. Mr Kwek adding that this will ‘help developers defray some investment in green technology and features’.
Even smaller developers, such as executive director Lim Yew Soon of Evan Lim & Co, said they would ‘happily build green buildings despite the cost’ if there were some incentives available.
Dr Keung said the masterplan will ‘not only result in more of our buildings being able to achieve substantial savings in energy costs, but it also provides a boost to the ‘green collar’ job market’.
About 18,000 green specialists are expected to be trained over the next 10 years in the development, design, construction, operation and maintenance of green buildings.
In the longer term, BCA is considering mandating energy labelling for existing buildings so as to encourage building owners to green their physical assets to a high level of efficiency.
Making the Mark
What makes a green building?
Through the use of cutting-edge green technology, occupants enjoy a cut in water and energy bills, as well as an improvement in indoor environmental quality for healthy living. This also reduces the building’s impact on the environment.
One key target:
80 per cent of all buildings in Singapore to be certified Green Mark by 2030. The Green Mark scheme rates buildings on their environmental impact.
Initiatives:
~ $100 million incentive for private building owners to upgrade existing buildings to meet green standards.
~ Developers will be granted the right to extra floor area for new private buildings meeting green criteria.
~ New buildings in strategic growth areas to achieve high Green Mark standards.
~ All new public buildings will have to attain Platinum standard.
~ All existing public buildings will be upgraded to meet the Goldplus standard at a cost of $500 million by 2020.
Developers still putting up project plans
Source : Business Times - 25 Apr 2009
THE property market may be subdued, but developers are not sitting still. A check with the Urban Redevelopment Authority shows some are still putting up proposals to convert office space or embark on residential and commercial projects.
URA told BT it has received four applications to convert office space in the central area to other uses since it lifted the ban on doing so in October last year. ‘These applications are now being evaluated and are pending final approval,’ said a URA spokesman.
In a bid to ease the office space supply crunch that built up during the boom years, URA called a halt to such conversions in May 2007. It later removed the ban as the supply of office space coming on stream started to increase, while the economy began to slow. URA did not identify the buildings involved in the applications, but some property owners have revealed plans to convert office space.
CapitaMall Trust, for instance, said last week that it was ‘in talks with the authorities to optimise the integration plan for The Atrium @ Orchard and Plaza Singapura’ and that work could start by end-2010 subject to market conditions and official approvals.
URA has also granted approval for close to 10 commercial and private residential projects, according to its Q1 2009 real estate statistics released yesterday.
UIC Investments (Properties) received provisional permission in January to develop office and retail space with gross floor areas (GFAs) of 114,500 sq ft and 48,000 sq ft respectively at the UIC Building in Shenton Way. Some 593 residential units could also take shape at the site.
The South Beach consortium - comprising City Developments, a Dubai World unit and Elad Group - has been given the go-ahead to develop 560 hotel rooms across a GFA of 474,100 sq ft at its Beach Road project. The site may include office space with a GFA of more than 632,100 sq ft, and retail space with a GFA of 158,000 sq ft. The project is tipped to receive a temporary occupation permit in 2014.
BT understands there will also be a residential component in the South Beach project, although this did not appear in the URA statistics. The data only shows development approvals for uncompleted private residential projects if they have at least 200 non-landed property units.
YTL Corp, which bought the Westwood Apartments in Orchard Boulevard in 2007, has obtained provisional permission to develop shop space with a GFA of 1,500 sq ft and 39 hotel rooms across 78,200 sq ft at the site. BT understands the residential component similarly did not show up in the URA statistics, because there are less than 200 non-landed units.
In February, UOL Group subsidiary Hotel Plaza got URA’s nod to re-use the GFA in The Plaza’s podium block to create 273 hotel rooms.
Sentosa Cove on track to meet schedules
Source : Business Times - 25 Apr 2009
CONSTRUCTION at Sentosa Cove is largely on schedule, but Sentosa Development Corporation (SDC) - which oversees the luxury residential enclave - has received a ‘handful’ of requests from developers to delay their upcoming projects, chief executive Mike Barclay told reporters yesterday.
SDC has granted an extension to one developer and it is reviewing requests from others. It will consider requests on a case-by-case basis, Mr Barclay said.
And in a few cases, land-owners have had to pay liquidated damages - which is essentially a penalty - for taking slightly longer than the maximum time allowed to develop the sites they bought. The penalty comes to 2 per cent of the land purchase price for each month’s delay.
Buyers of land plots meant for landed homes are given four years to complete building on their sites, while buyers of condominium and commercial plots are given up to five years. So far, no major delays have been seen, SDC said. With most construction on track, Sentosa Cove should be home to some 2,100 condominium units and landed homes by 2014.
While some 2,500 homes could have been built on the Cove, some developers decided to combine land plots or build larger units, which means that the enclave will have fewer units than it could have.
To date, there are some 1,700 people living in Sentosa Cove in about 400 homes. More than 30 condominiums and landed properties have received their temporary occupation permits (TOPs).
This includes condominiums such as The Berth by the Cove and The Azure. Overall condo occupancy at projects that have achieved TOP now stands at about 70 per cent, according to data from SDC.
The number of people who have set up home in the Cove is expected to climb as another 60 projects are expected to get their TOPs over the next six months.
‘With more TOPs on the way, our live-in population is set to swell to about 3,000 by the end of 2009,’ said Mr Barclay.
About 840 homes - comprising 140 landed units and 700 condo apartments - will be ready by the end of this year, up from about 400 now.
Sentosa Cove comprises of North Cove and South Cove. Land parcels in the North Cove were launched first.
‘By the end of the year, 85 per cent of the projects within North Cove will have obtained TOPs,’ said Jason Yeo, general manager for Sentosa Cove Resort Management. ‘As for South Cove, the land sale was completed in 2008 and it is envisaged to be fully developed by 2014.’
The masterplan for Sentosa Cove was finalised in 1996, and land sales kicked off in 2003. All land sites were sold by 2008, with the total investment from land sales for the Sentosa Cove project coming to some $5.1 billion in total. Some 60 per cent of all buyers were foreigners.
With all land plots on the island sold off, Sentosa’s management has now turned its attention to building a cohesive residential community.
Right now, Sentosa Cove is home to people from 21 nationalities including Europe, the United States, China, India, Australia and neighbouring South-east Asian countries.
‘We are actively building a community life now and are committed to fulfilling our vision of delivering the world’s most desirable address,’ said Mr Barclay.
‘Are we on track with our vision? The answer is yes,’ said Jennie Chua, chairman of the Sentosa Cove Council. In recent quarters, property prices across Singapore (including Sentosa Cove) have tumbled and reports of construction delays have emerged. But this is due to a global economic downturn, Ms Chua said. In the longer term, Sentosa Cove still offers an attractive residential enclave for locals and foreigners, she said.
Tuesday, April 28, 2009
More can be done to boost energy efficiency
Source : Business Times - 28 Apr 2009
THE first-ever sustainable development blueprint launched by the Inter-ministerial Committee on Sustainable Development (IMCSD) won support from various quarters yesterday, but a few observers also felt that more could be done to push the green agenda.
The plan has outlined various programmes for Singapore’s sustainable development and is ‘a very good start to the whole process’, said the Singapore Environment Council’s executive director Howard Shaw. But he felt that it could have gone further to include caps on carbon emissions.
The blueprint set several goals in improving resource efficiency, such as a 35 per cent cut in energy consumption per dollar GDP from 2005 levels by 2030, but carbon emission caps were not part of them.
Environment and Water Resources Minister Yaacob Ibrahim, who is also co- chair of the IMCSD, shed some light on this at a media briefing yesterday. According to him, Singapore is constrained by the lack of alternative energy sources and the best strategy so far is to be resource-efficient.
‘If you ask us whether we can really change our economic structure and replace all the fossil fuels that we import with alternative energy - not possible,’ he said.
There were also questions at the briefing on whether Singapore is spending enough on sustainable development. The government committed in this year’s Budget $1 billion over the next five years to this area.
To this, National Development Minister and also IMCSD co-chair Mah Bow Tan highlighted that it was more important to invest in measures that will yield the best results. ‘We are not throwing money at the problem . . . If the $1 billion gives us results and it starts to show, we will be going back to the Finance Ministry to ask for more.’
The blueprint also rolled out a mix of rules and incentives for buildings to become more energy-efficient. BT understands that the idea for one scheme - which offers bonus gross floor area for new private developments which attain the Green Mark platinum or gold plus rating - came from CapitaLand boss Liew Mun Leong at a BCA event last year.
City Developments managing director Kwek Leng Joo said: ‘With the public sector taking the lead in raising the standard of greening our buildings by some mandatory requirements coupled with strategic incentives, developers and building owners are likely to respond positively.’
Mr Kwek also suggested that the government look into ‘greening’ the existing stock of around 1.2 million public and private housing units in Singapore.
Air quality also came to the IMCSD’s attention and it has set caps on levels of sulphur dioxide and fine particles in the air. ExxonMobil’s Singapore refinery manager Darrin Talley said that the company shares the government’s desire for good air quality.
Solar test bed scheme on wider scale by 2015
Source : Business Times - 28 Apr 2009
SOLAR panels will be fitted on the roofs of residential blocks and multi-storey carparks in 30 HDB precincts by 2015 in the largest solar trial rolled out here.
The $31 million trial will provide 3.1 megawatts peak of solar capacity in 28 existing HDB precincts and two new ones.
HDB is testing solar technology in preparation for greater use when the cost of it is closer to that of energy from traditional sources.
Senior Minister of State for Trade and Industry S Iswaran said industry players expect to see returns from investments in solar technology in five to eight years.
But there are systemic issues involved in harnessing solar energy, he pointed out. ‘It’s not just about the cells being able to convert solar energy into electrical energy. Even if you’re able to do that, after that, how does that integrate with your energy system, your electricity grid - those are important issues too.’
Last August, HDB installed rooftop solar panels on blocks in Serangoon North Avenue 3 and Wellington Circle, as part of the Energy Save Programme it is working on with the National Environment Agency and Energy Market Authority. Results so far show the panels installed on seven residential blocks and one multi-storey carpark in each precinct can generate about 220 kilowatt hours a day - enough to meet the common services power requirements in a single block.
HDB’s first eco-friendly public housing development, Treelodge@Punggol, is designed to incorporate rooftop solar panels that are expected to generate enough energy to meet 40 per cent of the precinct’s common services requirements. HDB said testing on a wide scale of 30 precincts will enable it to better assess the feasibility of different solar technologies in Singapore’s environment, and gather technical knowledge on their installation and maintenance.
HDB also expects the programme to encourage global manufacturers to set up base in Singapore for R&D on solar panel technologies, which will help to drive down the cost of the panels.
Last year the government set aside $20 million for its Solar Capability Scheme to encourage the installation of solar technology in new building projects.
Clean, green blueprint to redefine S’pore
Source : Business Times - 28 Apr 2009
The government yesterday unveiled a blueprint for sustainable development for the next 10 to 20 years, adopting a ‘light-touch’ approach for now to spare businesses and households from higher costs at a time of economic hardship.
Even so, there will be huge implications for developers, the transport sector, oil refineries and even makers of airconditioners, refrigerators and clothes dryers.
A key target is a 35 per cent reduction in energy consumption per dollar GDP by 2030 (from 2005 levels), which is projected to potentially generate about $3.6 billion annual savings (net of the cost of investment).
New buildings in Singapore will be more energy efficient while existing ones will be retrofitted to conserve energy.
Electric vehicles and diesel-hybrid buses will be tested out. Minimum energy performance standards for household air-conditioners and refrigerators will be introduced by 2011. In short, the moves will touch all aspects of life in Singapore.
The government will provide ‘incentives, information and educate the public, as opposed to other policy options of say legislation or even disincentives such as taxes’ as National Development Minister Mah Bow Tan, co-chair of the Inter-Ministerial Committee for Sustainable Development (IMCSD), said at a media briefing yesterday.
For a start, the government has set aside $1 billion for the next five years - this was announced in the January Budget statement - to help implement plans in the blueprint.
Part of this sum will go towards helping businesses reduce the upfront costs of investing in resource-efficient buildings, systems and processes. The $1 billion sum includes $100 million set aside for the new Green Mark Incentive scheme to retrofit existing private-sector buildings to boost energy efficiency.
‘The temptation is to slow down our efforts in the area of sustainable development while we tackle the immediate economic challenges. However, the two are not mutually exclusive. Even as we tackle the short-term challenges, we must build capability for our long-term development,’ Mr Mah said.
The blueprint keeps open the option of mandating changes in the longer term. For instance, the government will study the experiences of countries that have legislated minimum energy-efficiency standards for major energy-consuming equipment and systems and see if it needs to use the law for this.
The 128-page document, available at www.sustainablesingapore.gov.sg, also elaborates on plans to build new R&D capabilities.
Minister for the Environment and Water Resources Yaacob Ibrahim, co-chair of IMCSD, highlighted that the ‘concrete targets’ set in the blueprint for 2020 and 2030 ‘reflect how serious we are about sustainable development’.
The targets will be reviewed every five years. ‘These targets will be reviewed regularly, as technology improves and the cost-effectiveness of measures changes,’ he added.
Energy-related benchmarks will be set for key industrial sectors.
Other specific targets include reducing daily domestic water consumption per capita from 156 litres currently to 140 litres by 2030. To improve air quality, ambient sulphur dioxide levels will be capped despite economic growth. Air emission standards for industry and transport will be regularly reviewed and Singapore will be benchmarked against top Asian cities - without imposing prohibitive costs on the players.
There will also be 50 additional hectares of skyrise greenery, and 900 hectares of water bodies and 100 km of waterways open for recreational activity by 2030.
Another important target set is for at least 80 per cent of Singapore’s stock of buildings to achieve Building and Construction Authority’s (BCA) Green Mark Certified Rating by 2030.
The government will promote more efficient pollution-control equipment for industries and the use of more efficient sulphur recovery systems for oil refineries.
Singapore will be positioned as an international knowledge hub in sustainable development solutions. Solar technology will be piloted at 30 public housing precincts across the island. Singapore will invest early in solar technology to prepare for using it on a larger scale when its cost falls closer to that of conventional energy.
BCA will develop prototype energy-efficient building designs that can more than halve energy consumption.
Clean energy and water technologies are projected to provide about $3.4 billion economic value-add per year by 2015 and to create a total of 18,000 jobs by 2015.
Marina Coastal Expressway to cost more than $4b to build
Source : Channel NewsAsia - 28 Apr 2009
Construction for Singapore’s most expensive highway, the Marina Coastal Expressway (MCE), has begun.
Costing more than $4 billion, it is much higher than the initial estimation of $2.5 billion due to the difficult soil conditions.
When completed, the 5-kilometre road will serve as a high speed link to the new Downtown area in Marina Bay.
It will also link up to the Kallang-Paya Lebar Expressway, East Coast Parkway and the Ayer Rajah Expressway.
The connection will in turn allow a section of the ECP to be coverted into arterial roads serving nearby developments such as the integrated resort.
Commuters who are not heading to the area can also use the MCE to bypass Marina Bay.
A special feature of the new expressway - Singapore’s tenth - is the road tunnel that runs under the sea, parallel to the Marina Barrage.
Transport Minister Raymond Lim, who broke ground for the project at the barrage, explained the complexity of the construction process.
“A 420-metre section of the MCE will be directly beneath the sea bed, making it one of LTA’s most technically challenging projects yet. At its deepest point the MCE will be at about 20 metres below mean sea level,” he said.
The difficult soil condition in the area means that excavation works could run as deep as 60 metres in certain sections, not to mention the width of the expressway - five lanes in each direction.
Director of the MCE project, Chuah Han Leong, said part of the road will also be constructed on reclaimed land.
“We are working very close to the coast and also quite far away from all the developments that are happening now, like the IR, the Marina Bay and the Financial Centre. We are basically next to the sea and we will use the right material as well as construction methods to make sure that all our construction is safe,” he said.
The MCE is expected to be ready by 2013.
UK home prices fall 10.1% in April
Source : Business Times - 28 Apr 2009
House prices in England and Wales fell by 10.1 per cent in April compared with a year ago, while prices declined at their slowest monthly pace for a year, property data company Hometrack said yesterday.
April’s annual fall is a modest improvement from the 10.3 per cent decline recorded in March, which was a survey low, and leaves the achievable price of a home at £155,600, it said.
Hometrack said the slowdown in the monthly rate of decline to 0.3 per cent from 0.6 per cent in March reflected an increase in optimism from estate agents driven by increased levels of market activity.
However, it said it was too early to call a revival of the housing market, and warned the improvements in April’s survey may be seasonal.
Recent housing market data have been mixed: official figures suggest that approvals for home loans have edged up from record lows, but surveys from mortgage lenders Nationwide and Halifax sent opposing signals on house prices last month.
Analysts reckon the housing market will remain under pressure for some time yet as rising unemployment and tough borrowing conditions deter people from entering the property market.
‘Only when first-time buyers feel confident to enter the market in significant numbers can we really start to claim any ‘real’ green shoots of recovery,’ said Hometrack director of research Richard Donnell.
‘This suggests to us that the recent pick-up in demand is largely seasonal and unlikely to be sustained over the rest of the year.’
Still, the survey did show improvement in a number of indicators.
The number of sales agreed in April rose by nearly 15 per cent after a rise of 18.6 per cent in March, while the number of prospective buyers registering with estate agents rose by 6 per cent in April after an 8.5 per cent rise in March.
‘The increase in demand, together with a move to more realistic pricing, has supported a growth in the number of sales,’ according to the survey.
Britain’s approved mortgages fall by a quarter in March
Source : Business Times - 28 Apr 2009
The number of mortgages approved for house purchases in Britain fell by a quarter year-on-year in March, the British Bankers’ Association (BBA) said yesterday, casting doubt on a sustained pick-up in home sales.
The number of mortgages approved slipped to 26,097 last month from 28,024 in February, and were 25.3 per cent lower than the same month last year.
The total was lower than many analysts had expected.
Approvals hit a record low of 17,574 in November but had recovered steadily at the start of the year.
‘The banks’ figures also show it would be unrealistic to expect the mortgage market to recover in a steady and consistent way in the current economic environment,’ said David Dooks, BBA statistics director.
A separate survey from property data company Hometrack yesterday showed house prices in England and Wales fell by 10.1 per cent in April compared with a year ago, while prices declined at their slowest monthly pace for a year, Hometrack said the slowdown in the monthly rate of decline to 0.3 per cent from 0.6 per cent in March reflected an increase in optimism from estate agents driven by increased levels of market activity.
There was an even sharper drop in the number of people remortgaging, down 58 per cent year-on-year, as people reverted to standard variable rates rather than moving to new fixed-rate products.
Overall, there was £3.7 billion (S$8.06 billion) of net mortgage lending in March, less than February’s £3.9 billion on a seasonally adjusted basis.
House prices have lost a fifth of their value in little more than a year as the credit crunch forced banks to cut back on lending.
Although mortgage availability has risen slightly in response to government initiatives, higher unemployment means demand is likely to remain weak.
Figures last week showed Britain’s economy contracted by 1.9 per cent in the first three months of 2009, casting serious doubts over government forecasts for a recovery by the end of the year.
‘The relapse in the BBA mortgage data for March highlight the fact that the most likely scenario is that the pick up in housing market activity will be both gradual and prone to relapses,’ said Howard Archer, chief UK economist at IHS Global Insight.
‘The overall evidence is that housing market activity is still very weak by past norms.’ The BBA figures also showed lending to non-financial companies fell by around £1 billion, largely reflecting the unwinding of takeover finance.
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