Construction frenzy puts squeeze on resources

Construction frenzy puts squeeze on resources

By Tan Hui Yee

NIGHTS are no longer as idyllic as before on Marina Bay, where at least 20 construction cranes indicate building activity proceeding at a fever pitch.The site of an integrated resort as well as new offices and homes is at the heart of the buzz in the construction industry.

Elsewhere, commercial complexes and condominium developments have been coming onstream at a breakneck pace, putting the squeeze on a building industry that has only recently come out of the doldrums.

The sector grew by a sizzling 9.7 per cent between January and March alone - the strongest quarterly showing in nine years.

This feverish activity is taking place against a backdrop of higher costs for construction materials and labour - more than 10 per cent higher than a year ago, in some cases, estimated the Singapore Institute of Surveyors and Valuers (SISV).

Contractors are feeling the heat as they race - sometimes working round the clock - to meet building deadlines.

Mr Goh Ngan Hong, president of the SISV’s quantity surveying council, told The Straits Times: ‘The volume of work coming onto the market is more than the industry can handle - too many projects are chasing too few good contractors, hence the destabilising effect on prices.’

Piling contractor Foo Hee Kang of Resource Piling, whose company is working on the Marina Bay Financial Centre, clocks 80 to 90 hours a week.

His piling machines are spread out over six to seven projects at any one time, and there is ‘practically no waiting time between jobs’, he said. He has rejected several jobs simply because his company is too busy.

And he has had to pay his workers up to twice what he did a year ago just to keep them.

Another builder, Hor Kew, is paying fresh engineering graduates about $2,600, up from about $2,200 a year ago.

Companies strapped for staff are resorting to poaching employees from other companies. For instance, Kienta Engineering Construction, a major Housing Board contractor, lost four senior employees in the past three months to other companies.

At the heart of this crunch is the work on the two integrated resorts, worth $10 billion together, and which will be completed in just two or three years.

This, coupled with the many private estates being redeveloped following the recent rash of collective sales, has fuelled a surge in construction demand.

A report by property consultancy CB Richard Ellis last week counted 67 private estates sold collectively since January for a total of $7.92 billion.

Contractor Tiong Seng’s director, Mr Andrew Khng, noted that once collective sales go through, developers want the new condominium up as soon as possible.

‘If we can have a bit of a breather, it would be good,’ he said.

The value of building contracts awarded last year jumped 41 per cent to $16.1 billion, after staying at about $11 billion in the past two years.

This year, the figure is forecast to hit $17 billion to $19 billion.

Within Singapore, the price of ready-mixed concrete more than doubled earlier this year after Indonesia abruptly banned the export of concreting sand and detained several barges carrying granite to Singapore.

Although concrete prices have since stabilised, overall costs are still heading north as more projects are started.

Demand from the Middle East, India, China, South Korea and Britain for building materials is also pushing prices up, said the SISV’s Mr Goh.

To ease the manpower crunch, the Building and Construction Authority (BCA) has worked with the Ministry of Manpower to relax the quota of workers allowed to be hired from countries such as India, China, Bangladesh, Myanmar and Thailand.

To expedite matters, it has approved the setting up of five new overseas centres - on top of the existing 15 - to test the skills of prospective workers in their home countries.

The BCA is also looking into expanding the list of qualifications it accepts for site supervisors from other countries so that more of them will be cleared to work here.

Meanwhile, owners of smaller developments with less cash to flash will probably have fewer contractors to choose from, as the more established ones get selective about what work they do.

When property agent Eric Cheng tendered out a job to redevelop a terrace house in Crane Road earlier this year, only four bids came in - at prices more than 8 per cent above his budget of $170 per square foot. A year ago, such a tender would have drawn eight bids.

He chose not to award the tender. Instead, he will call for another one after getting his architect to redesign the house using cheaper fittings and lower-grade granite flooring, for example, to cut costs.

The SISV’s Mr Goh predicted that prices are expected to head upwards until mid-2010.

Meanwhile, the BCA reckoned that the manpower squeeze will ease in two to three years.

But the construction industry - which just three years ago was grappling with stalled projects as cash-

strapped contractors went under - views the current strain on resources positively.

Mr Desmond Hill, president of the Singapore Contractors Association, said: ‘These are good problems. It means the jobs are there, the market is there.’

Hor Kew’s managing director, Mr Aw Leng Hwee, is equally upbeat.

He said: ‘At least now, we can get profit margins. In previous years, when we bid at break-even prices, we could not even get the job.’

Source: The Straits Times, 21 June 2007

Four developers pay $243m in joint buy

Four developers pay $243m in joint buy

Koh Bros, Heeton, KSH, Lian Beng acquire freehold Lincoln Lodge

By UMA SHANKARI

PROPERTY developers Koh Brothers, Heeton Holdings, KSH Holdings and Lian Beng Group have joined hands to buy the freehold Lincoln Lodge for $243 million, the companies said in a joint statement yesterday. The four will hold equal stakes in the project.
The price for the site, located in the prime District 11 off Newton Road, works out to $1449.3 per square foot per plot ratio (psf ppr) including an estimated development charge of $413,000.

The consortium is also ‘quite confident’ of acquiring a 3,358 sq ft plot of state land beside the property for about $3 million, said Koh Brothers chief executive Francis Koh.

If the four companies bag the state land, then the price paid for both sites will come to about $1,370 psf ppr, he said. Combined, the two sites will give the developers a total gross floor area of about 177,400 sq ft to work with.

The partners intend to build a 36-storey residential project with 120 luxurious apartments averaging 1,600 sq ft. The project will be launched in the first half of 2008, at prices in the region of $2,500 psf, Mr Koh said. The break-even cost for the project is expected to be around $2,000 psf.

The site was put on the market in May with a reserve price tag of $188 million. The consortium’s offer of $243 million was the highest of a few bids, BT understands.

Mr Koh said that the partners were willing to pay significantly more than the reserve price as they were ‘very interested’ in the site, and the upbeat property market means that they can be confident of making a profit even at higher break-even costs. ‘I think at the moment, it is about how much you can sell for,’ Mr Koh said. He cited the site’s ‘excellent location’ as well as the rising rental market as reasons.

The project will mark the first time all four companies have come together to develop a property. Koh Brothers and Heeton Holdings have worked together in the past - they will soon launch The Lumos in the prime Leonie Hill area, probably in the first week of July.

At the end of yesterday’s trading, the companies’ counters moved up as Koh Brothers’ stock rose 1.5 cents to end at 55.5 cents, while Heeton’s stock climbed 0.5 cents to close at 98.5 cents. Shares of KSH rose 4 cents to close 87 cents, while Lian Beng’s stock ended the day 2.5 cents up at 44 cents.

Source: The Business Times, 22June 2007

S’pore casino gaming revenue to top US$2b

S’pore casino gaming revenue to top US$2b

Advertising spending in Asia-Pac seen rising to US$108b in 2011

By AMIT ROY CHOUDHURY

REVENUE from casino gaming in Singapore could be worth as much as US$2.2 billion by 2011, just one year after both new integrated resorts have opened their doors, says a report from accountancy firm PricewaterhouseCoopers (PwC).The comprehensive 700 page report, Global Entertainment and Media Outlook 2007-2011, looks at a host of entertainment and media industries like Internet, TV distribution, casinos and other regulated gaming and advertising.Speaking to BT, Greg Unsworth, PwC’s Asia Pacific Technology Industry Leader, said casino gaming revenues in Singapore in 2001 are expected to total US$2.2 billion - S$3.4 billion at today’s exchange rate.The report notes that by 2009 when the first resort opens, casino gaming will bring in US$157 million. The income is expected to grow to US$755 million in 2010 when the second casino opens its doors.Revenues will then more than double the next year.Last year, Singapore awarded casino licences to Las Vegas Sands and Genting, the casino operator in Malaysia. ‘The Las Vegas Sands’ US$3.6-billion resort complex will feature more convention space than all the hotels in Singapore combined, with a planned opening in late 2009,’ Mr Unsworth said.
The report says the two casinos in Singapore will provide Asians with the Las Vegas experience - possibly hitting tourism growth from Asia at the original Las Vegas.

The report also notes that Asia-Pacific is the third largest - and the fastest growing - market for casinos and other regulated gaming.

The market size will increase from US$14.6 billion in 2006 to US$30.3 billion in 2011, growing at an annual rate of 15.7 per cent.

In the Asia-Pacific region, driven by strong economic growth, the entertainment and media industry will be the fastest growing in the world.

Mr Unsworth noted that spending in the region will average 9.6 per cent annual growth, the highest of any region, increasing from US$297 billion last year to US$470 billion in 2011.

This year, the market is expected to be worth US$328 billion.

In other parts of the entertainment and media industries, advertising spend in Asia-Pacific will increase from US$77 billion in 2006 to US$108 billion in 2011.

The Internet will continue to be the fastest-growing advertising medium, growing at 18.8 per cent a year, driven by increased online penetration and an expanding broadband market.

The number of Asia-Pacific households with broadband connections will increase to 243.2 million by 2011, a 20.1 per cent annual increase from 2006.

Projected growth for Singapore’s advertising market actually decreases from 4 per cent in 2008 to 2.7 per cent in 2009, before stabilising in the 3.2-3.7 per cent range for 2010-11.

‘This can be attributed to a shift in marketing focus from traditional advertising to more integrated marketing approaches that include events and sponsorships. In a small market such as Singapore, non-traditional marketing channels may, in fact, yield greater mileage for the advertiser and be more effective in generating awareness and establishing brands,’ Mr Unsworth said.

Spending related to the distribution of entertainment and media on convergent platforms (that is, convergence of the home computer, wireless handset and TV) is growing at double-digit rates and will exceed 50 per cent of global spending by 2011, the PwC official said.

‘Asia-Pacific will be the fastest-growing convergent platform region with a projected 13.5 per cent increase and double-digit growth is expected in Latin America as Internet and broadband penetration begins to gain momentum,’ he said.

‘Broadband growth is driving online advertising while the proliferation of next-generation wireless devices designed to play digital music, video games and receive TV programming is fuelling mobile distribution.’

In Asia-Pacific, spending on distribution of TV programming on mobile phones is expected to reach US$6.5 billion in 2011 from just US$26 million in 2006.

Internet advertising and access spending continues to be the fastest growing segment globally.

In this segment, Asia-Pacific - which was the second largest region in 2006, at US$59.6 billion - will also be the fastest growing with a 17.1 per cent annual increase to US$131.2 billion in 2011, the report forecast.

Access spending (that is money spent to access the Internet) will increase from US$54 billion in 2006 to US$118.1 billion in 2011.

Of overall access spending, money spent for broadband access will rise to US$101.9 billion in 2011 from US$39.4 billion in 2006.

Compared to the region, Singapore’s growth in this category will fall steadily from 38.4 per cent in 2002 to 7.4 per cent in 2006, and further to a projected 6.3 per cent in 2010.

Explaining the reason for this, Mr Unsworth said: ‘Growth rates in Internet access spending in Singapore, whilst strong, are expected to lag behind the rest of Asia-Pacific. This is due largely to the existing high Internet penetration in households, relative to Asia as a

 whole.’Source: The Business Times, 22 June 2007

Foreign buyers sink $2.4b into office property

Foreign buyers sink $2.4b into office property
June 21st, 2007
The shortage of office space on the island that has led to spiralling office rents and capital values has at the same time drawn more foreign investment into Singapore office blocks.

So far this year, foreign investors, including private equity groups and non-listed funds, have picked up about $2.4 billion worth of en bloc office buildings and sizeable strata office properties.

This surpasses the $1.9 billion for the whole of last year, which in turn was more than double the $733 million in 2005, according to latest data from CB Richard Ellis.

Also, the $2.4 billion of office buildings bought by foreign investors gave them a 69 per cent share of the $3.5 billion total in major office deals so far this year. The latter figure, for the period Jan 1 to June 8, 2007, is higher than the $3 billion chalked up for the whole of last year.

Big office acquisitions by overseas buyers this year include Macquarie Global Property Advisors’ $1.04 billion purchase of Temasek Tower in March, the $525 million sale of SIA Building on Robinson Road to German Pension fund SEB, the $260 million purchase of Vision Crest’s office block and The House of Tan Yeok Nee in the Penang Road/Clemenceau Avenue area by German fund manager Union Investment Real Estate AG (formerly known as Difa Deutsche Immobilien Fonds).

Local buyers have bought around $1.1 billion of office space so far this year, with the biggest deal being the $600 million collective sale of UIC Building at Shenton Way to United Industrial Corp. The mainboard-listed company itself owns 78.8 per cent of the property.

However, Singapore real estate investment trusts, or S-Reits, have not made any purchases of office blocks so far this year, after making acquisitions of over $700 million in each of the preceding three years.

CBRE excluded the Raffles City transaction in 2006 from its analysis as the apportionment of the value of the office space in the mixed development was not made public. The Raffles City complex also includes two hotels, convention facilities and a shopping centre, besides an office tower. Raffles City was purchased jointly by two Reits - CapitaCommercial Trust and CapitaMall Trust - for $2.1 billion. In its analysis, CBRE also excluded small strata office transactions.

Commenting on the big jump in the acquisition of office blocks by foreign buyers and falling purchases by S-Reits, CBRE executive director Jeremy Lake observed that while S-Reits are still bidding for office blocks in Singapore, they have not had much luck clinching acquisitions as the prices they can offer are constrained by the need for the acquisitions to be immediately yield-accretive to unit holders. Otherwise, there is a risk of the unit price of the Reit falling on the stock market.

On the other hand, foreign buyers, which are mostly private equity and unlisted funds, can bid more aggressively as they are looking at a total return story, Mr Lake said.

For instance, foreign buyers can offer a higher price for an office building that may reflect an initial yield, based on the building’s existing rental income of, say, only 2 or 3 per cent, with the knowledge that as leases come up for renewal at higher market rents, the yield may then go up to, say, 5 per cent. Also, these players may be looking at selling the assets and crystallising a capital appreciation a few years down the road, Mr Lake said.

Looking ahead, Mr Lake expects foreign buyers will continue to remain dominant buyers of office blocks in Singapore. He also reckons that the office en bloc market on the whole will remain very active for the rest of the year. Asked if there is a sufficient stock of office buildings for sale, he said: ‘When the market is strong, surprises come along the way. People whom you do not expect to sell their buildings will sell.’

CBRE data show that the average Grade A office rental value in prime locations has shot up 82 per cent over the past 12 months to $12.40 per square foot a month in Q2 this year.

The average capital value of prime office space has more than doubled over the past year to $2,500 psf in Q2, from $1,150 psf in the same period last year. At the trough of the current cycle, which stretched from Q3 2003 to Q2 2005, the figure was $980 psf.

DTZ Debenham Tie Leung data released yesterday evening also show that the average monthly prime rent in Raffles Place rose 20 per cent quarter-on-quarter to $13.10 psf in Q2.

Average rents in the Raffles Place and Marina Centre areas have more than doubled from a year ago.

Source: The Business Times, 21 June 2007

SC Global sees Marq fetching $4,000 psf

SC Global sees Marq fetching $4,000 psf

Boutique property developer SC Global Developments yesterday said that it expects apartments in the first phase of its just-launched The Marq on Paterson Hill to fetch an average of $4,000 per square foot (psf).

The absolute prices for the units will work out to $12-30 million each, SC Global said. The company is now marketing about one-third of the 66-unit luxury development through private previews, which are ‘by invitation only’.

The average price for the first phase is ‘reflective of the unique and exquisite finishing and detailing of the apartments’, SC Global said in a statement. ‘The Marq is the most luxurious and ambitious of SC Global’s developments to date.’

Located on the top of Paterson Hill, The Marq has two 24-storey towers. One of the towers will consist of 21 spacious 5-bedroom apartments averaging 6,195 square feet, with each unit spread out over an entire floor.

The other tower will feature 42 relatively smaller 4-bedroom apartments averaging 3,000 square feet. The development also has three penthouses, which are not being sold at the moment.

‘We are excited about the debut of The Marq,’ said SC Global chief executive Simon Cheong. ‘It has been eagerly awaited by the market since we announced the development concept a few months ago and we have been meticulously refining the plans to perfect the details.’

SC Global first announced plans for The Marq in January this year, and Mr Cheong said then that homes in the project would be priced ‘north of $3,000 psf’.

The developer’s stock climbed 10 cents to close at $6.25 yesterday. The company’s share price has climbed 143.2 per cent since the start of the year.

Source: The Business Times, 21 June 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
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Idea to up CPF minimum sum withdrawal age gets backing

Idea to up CPF minimum sum withdrawal age gets backing

LABOUR chief Lim Swee Say on Thursday backed the idea of raising the age at which Singaporeans can draw down their Central Provident Fund (CPF) minimum sum.But he also made clear that any such change should be done cautiously to ensure workers are not left in a lurch - without a job as well as the monthly cash payout from their CPF retirement savings.

‘We should be prepared for the possibility of raising the withdrawal age of the CPF minimum sum,’ he told reporters at a community event.

But, he added, ‘we need to proceed cautiously’ and make sure a system is put in place for workers to be re-employed beyond the retirement age of 62.

Mr Lim’s response came a day after Mr Lim Boon Heng, the minister who oversees ageing issues, raised the possibility of increasing the CPF minimum sum draw down age from 62 to 65.

Currently, Singaporeans can withdraw a portion of their CPF at age 55.

But they must leave a minimum amount in the CPF from which they will receive a monthly payout from age 62.

The idea of raising the draw down age is linked to the Government’s aim to get Singaporeans to work longer so that they have enough retirement savings.

‘If we’re not able to do so…we’re going to see more and more Singaporeans either run out of money or run out of purpose in life, which is undesirable,’ said Mr Lim Swee Say, who is also Minister in the Prime Minister’s Office.

With a rapidly ageing population, Singapore’s target is to have an employment rate of 65 per cent for people in the 55 to 64 age group. It was 53.7 per cent last year.

To achieve the goal, Mr Lim called for a ‘re-tuning’ of mindsets and attitudes.

‘We must not think about retiring,’ he said.

At the same time, Singapore ‘must be prepared to innovate, to try new ideas to make re-employment of mature workers work’.

Source: The Straits Times, 21 June 2007

Property investment sales expected to hit S$35b this year

Property investment sales expected to hit S$35b this year

SINGAPORE: Property investment sales in Singapore are expected to hit S$35 billion this year, according to property consultant CB Richard Ellis (CBRE).

It said sales for the six months to date have surged to over $21 billion, up 48 per cent from the same period a year ago.

For the second quarter alone, the figure was nearly S$10 billion, a gain of 16 per cent on year.

CBRE said the private sector has so far accounted for 86 per cent, or S$18.5 billion, of total investment sales this year.

The residential sector made up the largest proportion of sales, contributing S$14.6 billion or 68 per cent.

The office investment market made up 23 per cent or S$4.8 billion of sales.

Last year, property investment sales totalled S$30.5 billion. - CNA/yy

Source : Channel NewsAsia   21 June 2007

Former NKF CEO Durai sentenced to 3 months in jail

Former NKF CEO Durai sentenced to 3 months in jail
By Dominique Loh, Channel NewsAsia | Posted: 21 June 2007 1729 hrs

SINGAPORE: Former National Kidney Foundation chief TT Durai has been sentenced to three months in jail, but he is filing an appeal against the sentence.

The sentence was announced more than a week after Durai was found guilty of falsifying documents to release S$20,000 of NKF funds to interior designer and Durai’s long-time friend, David Tan.

In his remarks, District Judge Aedit Abdullah said a charity organisation such as the NKF is similar to a government institution as funds are obtained from the public.

Therefore, the criminal act is significant and it has resulted in a lot of damage.

He added that for a person in Durai’s position to initiate the act of arranging for David Tan to falsify the invoice is “particularly culpable”.

As for Durai’s social contributions, the judge said the records speak for themselves, but they cannot make up for Durai’s grave mistake.

Durai will return to the High Court where his appeal will be heard.

In the meantime, 27 June has been set for the prosecution and defence to meet with the judge to decide on a second charge.

The outstanding charge is similar to the current charge, but Channel NewsAsia understands that it involves a different sum of money.

The prosecution may proceed on this second charge, but it is also possible that the charge will be dropped entirely.

For now, Durai will remain in Singapore as his passport is being withheld by the Corrupt Practices Investigation Bureau.

He is currently out on a S$100,000 bail.

- CNA/so

Raffles Place rents almost double in just one year

Raffles Place rents almost double in just one year

Rentals now at record $11.92 per sq ft amid supply crunch: ConsultantBy Joyce Teo, Property Correspondent

PRIME office rents in prestigious Raffles Place rose again last month and are now almost double what they were just 12 months ago.

That is according to the latest figures from property consultancy Cushman & Wakefield, which says that average rents in Raffles Place are now at a record $11.92 per sq ft (psf), as the current supply squeeze takes a continuing toll.

Property consultants say some prime office tenants whose leases expire this year face a trebling of their rents.

These escalating rents are forcing some tenants to pull out of some of the best corporate addresses in town - to seek office space elsewhere.

But there are plenty of takers even at the high rents.

Cushman & Wakefield managing director Donald Han said: ‘Many buildings in Raffles Place are enjoying full occupancy…and may not have space until next year.’

At the top end of the market, deals for premium Grade A space in buildings such as Republic Plaza Tower 1, UOB Plaza, Singapore Land Tower and 6 Battery Road have already been done at record highs of $15 psf to $16 psf.

Singapore is suffering a severe supply crunch in the office sector that is likely to ease only in 2010, when more space will be ready.

About 330,000 sq m of gross floor area of new office space is set to be completed between now and 2009. But it will not be enough, property consultants say.

Demand remains strong as businesses expand, while supply is still falling as ageing office buildings such as One Shenton Way are torn down.

Prime office rents in the rest of the so-called Golden Shoe area, including Anson Road, Cecil Street, Robinson Road and Tanjong Pagar, have climbed to $8.91 psf, up 83 per cent from a year ago, Cushman & Wakefield said.

Elsewhere, rents in the City Hall, Marina Centre and Bugis areas have risen to $11.04 psf on average, or 82 per cent up from a year ago, it said. Centennial Tower and Millenia Singapore, for instance, are almost full.

Office rents in the Orchard Road area have also climbed, though not as sharply as the traditional business areas, and are now about 36 per cent higher than a year ago, it said.

‘We’re seeing more tenants take up space in various locations because they can’t find space to expand in the same building,’ said Knight Frank’s director of business space, Ms Agnes Tay.

Tenants in prime office space are paying a lot more for the same area. ‘In the past, for every three-year renewal, tenants were looking at a rise of 30 to 50 per cent,’ said Mr Han.

But tenants whose leases expired last year were met with a rude shock - they had to pay double the rent to renew their leases, he said.

Worse still for those that are renewing their leases this year - their rent could treble, he added.

Some tenants have bought their own space to avoid paying these astronomical rents.

Property consultants say some firms have moved out to non-conventional office space such as shophouses and business parks. This trend should continue, they add.

Some tenants have already pulled out of Raffles Place, while others are weighing their options, they say.

They face a tough choice as some businesses thrive on the prestige of the Raffles Place location, they add.

Even if they do move out, others ahead of them may have already contributed to the rise in rents of alternative space. Office rents in high-tech business parks are revisiting the record highs of the 1996 peak, said Mr Han.

They are now ranging from $3.20 psf to $3.50 psf, up from about $2.50 psf a year ago, he said.

Meanwhile, the Government has said it will make available land for transitional offices to help ease the tight supply.

Source: The Straits Times, 21 June 2007

40-storey condo-like blocks for Boon Keng

40-storey condo-like blocks for Boon Keng

700 units in HDB’s second private-developer project will cost about 57% more than those in the first one

By Tan Hui Yee, Housing Correspondent

PUBLIC housing is set to go upmarket by another notch when three 40-storey blocks built by a private developer - the second batch under a hybrid scheme - are completed by 2010.

The 700-unit project at the junction of Boon Keng and Bendemeer roads will give residents a clear view of the Kallang Basin and beyond. When ready, the three blocks will join a select number of 40-storey HDB blocks islandwide - 22 - that have already been completed, or would have been around that time.

The Boon Keng project - like the first, The Premiere@Tampines - will stand out from other HDB flats with its condo-like finishings like kitchen cabinets, bedroom wardrobes and bay windows. Under this programme, developers have a free hand to design, build, price and sell these flats, which will be available only to those who qualify for public housing.

This means that buyers’ household incomes cannot exceed $8,000 a month; there is also an ethnic quota. But a buyer can use a government grant of up to $40,000 to offset the price of the flat.

The Boon Keng project, developed by a consortium comprising Hoi Hup Realty, Oriental Worldwide Investments and Sunway Concrete Products, will be launched later this year.

It will come at a time when, thanks to collective sales of private estates, some cash-rich buyers are chasing up prices of relatively new resale units in mature estates like Tiong Bahru and Queenstown. Last week, a 29th-storey five-room flat in Kim Tian Place was sold for a record $720,000.

Mr Wong Chee Herng, director of Straits Construction which owns Hoi Hup Realty, said the Boon Keng units will be priced at an average of almost $500 psf, which would work out to about $645,000 for a 1,290 sq ft five-room flat. This is slightly lower than prices at nearby private condominium Kerrisdale, where new units are selling for about $550 psf, according to estimates by Knight Frank.

It is, however, 57 per cent higher than the average price of $318 psf fetched by The Premiere’s units.

But Mr Wong is confident that the Boon Keng project will sell, and is unfazed about possible competition from executive condominiums - after the Government last week made available a site for such homes for the first time since the last such plot was sold in 2004.

He said: ‘We don’t see a similar project that can compete on pricing and location.’ The project is sited in the central area, next to Boon Keng MRT station.

Even without these attributes, The Premiere drew close to 6,000 applications for 616 units.

Most units in the Boon Keng project will be five-room flats, with up to 35 per cent - or 245 units - comprising three- and four-room flats.

Property agents and analysts contacted were divided about the project.

While chief executive Mohamed Ismail of property agency PropNex felt the flats were good value for their location, Knight Frank’s head of consultancy and research Nicholas Mak felt their relatively higher prices may cause the queue to move slower than the one for The Premiere@Tampines.

Source: The Straits Times, 21 June 2007