Ang Mo Kio site may fetch over $500 psf

Ang Mo Kio site may fetch over $500 psf
Bids for 99-year leasehold plot likely to be 65% higher than minimum offer
By KALPANA RASHIWALA

A PLUM 99-year leasehold condo site opposite Ang Mo Kio MRT Station could fetch bids of over $500 per square foot (psf) of potential gross floor area, say market watchers. This is at least 65 per cent higher than the minimum offer price of $302 psf of potential gross floor area received by Housing & Development Board for the reserve list site.
The plot, right next to the AMK Hub, can be developed into a new condo with 337,408 sq ft maximum gross floor area, enough for a condo with about 280 to 300 apartments averaging 1,200 sq ft, according to Knight Frank director Nicholas Mak.

He expects the site to fetch top bids of about $480 to $530 psf per plot ratio in the current bullish market, but given its prime suburban location, is not discounting bids of $550 psf ppr or even higher.

‘This is one of the best residential sites in the second half 2007 Government Land Sales Programme. On a scale of 1 to 10, I would rate it 8 or 9,’ Mr Mak says.

Assuming the site sells for $510 psf ppr, the breakeven cost for a new condo works out to around $800 to $820 psf. If the developer wants a minimum 10 per cent profit margin, he would be eyeing an average selling price of around $900 psf.

The developer can count on a huge pool of upgraders given that Ang Mo Kio is a mature HDB estate, Mr Mak reckons.
 
CB Richard Ellis executive director Li Hiaw Ho, who is predicting the winning bid to be above $400 psf ppr, and a selling price of around $800-900 psf for the new condo units that will be built on the site. ‘This should be achievable if the residential market continues its current performance, by the time the project is ready for launch in mid-2008,’ he added.

CBRE said that in the June/July period, units at Grandeur 8 condo a short distance away changed hands at $570 to $620 psf in the secondary market, while over at Bishan 8 condo, apartments have changed hands at around $800 psf.
Source : Business Times - 31 Jul 2007

Three CBD office projects given URA approval in Q2

Three CBD office projects given URA approval in Q2
Provisional permission also granted for several hotel projects
By KALPANA RASHIWALA
A SLEW of projects were granted provisional permission in Q2, according to latest Urban Redevelopment Authority statistics.
Afro-Asia Building: It will be torn down and the site redeveloped into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space. 
These include a business park development of 215,000 square foot gross floor area (GFA) for Eurochem Corporation at International Business Park (IBP) in Jurong East, and several new office projects in the CBD - including redevelopment of Afro-Asia Building on Robinson Road (which was once the headquarters of Nanyang Siang Pau), Asia Chambers at McCallum Street, and Marina House at Shenton Way.

Residential projects that received provisional permission in the April to June quarter of this year include a 316-unit condo by Tripartite Developers on Flora Road, off Old Tampines Road, and a 329-unit condo by Frasers Centrepoint unit FCL Land Pte Ltd on the freehold Far East Mansion site on Kim Yam Road. Another condo, with 300 units, on River Valley Road, by EC Investment Holding Pte Ltd, was also granted provisional permission in April.

And as reported in June, Hong Fok has obtained provisional permission to develop 369 apartments on Beach Road under a redevelopment of part of The Concourse.

Eurochem’s business park project at IBP is expected to have about 180,000 sq ft net lettable area. Eurochem is expected to occupy part of the space, while the rest could be leased out. Allowed uses include data processing and backroom offices of banks.
The redevelopment of these properties into bigger new office projects will worsen the office crunch in the short term
 
 
The company will be developing this on a site that it bought from JTC Corp on an initial 30-year lease term with an option to renew for a further 22 years, BT understands.

The three CBD office projects granted provisional permission by URA in Q2 can generate about 480,000 sq ft GFA of offices. Hong Leong Group obtained provisional permission to redevelop Marina House at Shenton Way into a new office project with about 199,455 sq ft GFA of offices. Afro-Asia Shipping Co Pte Ltd received URA’s nod to tear down its Afro-Asia Building on Robinson Road (with an MPH store at street level) and redevelop the site into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space.

Assuming redevelopment work begins early next year, the redeveloped building could be ready around early 2010. The current owner bought it in the late 1960s. The site has a land area of about 16,000 sq ft and has a remaining lease of about 45 to 46 years.

Work on redeveloping Asia Chambers at McCallum Street is expected to begin in August. Owner TM Asia Insurance Singapore Ltd - part of the Tokio Marine & Nichido Fire Insurance Co group - will build a new 19-storey office project with about 161,000 sq ft GFA offices. The net lettable office space could be about 110,000 sq ft, of which around half or so is expected to be occupied by the group, which currently operates out of leased premises at Fuji Xerox Towers on Anson Road. Tokio Marine’s project, which is slated for completion in late 2009, will see a chunk of the building’s street level space devoted to public spaces with trees, other greenery and sitting areas to serve as a meeting point in the location.

URA also granted provisional permission for several hotel projects in Q2, such as a 355-room hotel on Clemenceau Avenue/Unity Street to be developed by Hong Kong’s Park Hotel Group); and a 90-room facility at Fullerton Square granted to Sino Land subsidiary Precious Quay Pte Ltd. The latter project also includes about 26,700 sq ft GFA of retail space.

In May this year, URA temporarily banned conversion of office use in the Central Area to other uses until December 2009 to curb further depletion of the existing office stock on the island. Even prior to that announcement, though, the trend had changed, with some owners of ageing CBD office blocks considering redeveloping their premises into office blocks, instead of the earlier trend of going for apartments, on the back of rising CBD office values.

Nonetheless, the redevelopment of these properties into bigger new office projects will worsen the office crunch in the short term while they are being redeveloped, say market watchers.

Source : Business Times - 31 Jul 2007

Publishing firm buys $12.5m plot

Publishing firm buys $12.5m plot 
PUBLISHING company Eastern Holdings, which ventured into property development three years ago, has bought a 10,888 sq ft freehold plot in Grove Drive for $12.5 million.
The price for the plot - which is near Ghim Moh Road - works out to $1,148 per sq ft of potential gross floor area.

Eastern said the move into property has allowed the company to ride on Singapore’s booming property market for growth.

Its chairman and managing director, Mr Stephen Tay, said yesterday: ‘This is the beginning of a new era of growth for Eastern, brought about by the robust demand for residential and commercial spaces.’

Eastern had earlier secured an option to buy an adjacent plot for $10.3 million and now plans to amalgamate the two sites.

Together, the combined plots at 81 and 83 Grove Drive offer a total gross floor area of 42,837 sq ft.

In a statement yesterday, the group said it is still discussing specific plans for the sites but may develop cluster bungalows or cluster semi-detached houses.

Eastern entered the property business in 2004 when the property market showed the first tentative hints of recovery.

It was a way for the company to diversify and add growth to its revenue streams beyond publishing, it said.

Today, the group - which publishes magazine titles such as Motherhood, Teens and Motoring - has a property portfolio of commercial, industrial and residential properties.

Source : Straits Times - 31 Jul 2007

Two River Valley condos fail to get asking prices

Two River Valley condos fail to get asking prices 
Pacific Mansions sought $2,400 psf; Rivershire asked for $2,200 psf
By Joyce Teo, Property Correspondent 
NO TAKERS FOR NOW: Owners of Pacific mansions are seeking $1.18 billion. Marketing consultants are said to be negotiating with ‘interested parties’, as developers are finding these prices too steep. — PHOTO: SAVILLS SINGAPORE
 
  View more photos
 
RECENT high-profile collective sales of Pacific Mansions and Rivershire have both failed to attract bids from developers willing to match the prices being sought by owners at the two River Valley condominiums.
Marketing consultants of both sites, however, are understood to be negotiating with ‘interested parties’ to see if they can at least achieve the reserve price - ranging from 10 per cent to 20 per cent below the asking price.

Asking prices at the two condominiums were optimistically priced at the very top end of market levels.

The current collective sale record stands at $2,338 per sq ft (psf) of potential gross floor area at The Ardmore in the prestigious Ardmore area.

Owners at the 45-year-old Pacific Mansions in River Valley Close, however, asked for even more - about $2,400 psf of potential gross floor area. This placed its total price at $1.18 billion.

Although the property market is booming, the perception is that the asking price for Pacific Mansions is high and unachievable for now, said a source.

Rivershire in the Leonie Hill area was put up for sale in late June at $348 million, or a hefty $2,200 psf of potential gross floor area.

The recent hike in development charge has no impact on the sites, as no such charge is payable for both sites.

There is talk that the Pacific Mansions’ tender had attracted a few expressions of interest but no firm bids.

Mr Steven Ming, director of investment sales at Savills Singapore, which is marketing Pacific Mansions, only said: ‘We have received interest, and we are in discussions with the interested parties.’

Knight Frank, which is marketing Rivershire, is also believed to be in talks with keen parties.

Nearby, owners of the 99-year leasehold Grangeford Apartments, who had asked for $2,016 psf of potential gross floor area, also failed to get what they had asked for.

The best they got was an offer from Overseas Union Enterprise - believed to be around $1,820 psf - subject to approval by owners controlling 80 per cent of the property’s share values.

The deal is likely to be sealed soon. CB Richard Ellis, which is marketing the site, said it is waiting for lawyers to confirm the approval level.

The absence of finalised deals for these condos has not stopped others from hitting the market at relatively high prices.

These include Trendale Tower in the Cairnhill Road area, which was relaunched for sale in late July at $2,477 psf of potential gross area. Its earlier asking price in May, when it was put up for sale via an expression of interest exercise, was at $2,200 psf of gross floor area.

Recently, City Towers in Bukit Timah Road was also relaunched for sale at a revised asking price of $2,100 psf of potential gross floor area.

Property consultants say the residential market is still rosy, though some collective sales may stall as the owners’ asking prices are far beyond what the market is currently willing to pay.

‘It really depends on the site’s potential,’ said one.
Source : Straits Times - 31 Jul 2007

Govt to take ‘light touch’ approach to property

Govt to take ‘light touch’ approach to property 
It will give out more data on prices and ramp up supply of homes and offices
By Jessica Cheam 
THE Government is not hitting the brakes on the roaring property market, but it is keeping a sharp eye on soaring prices and the office squeeze.
This assurance came yesterday from National Deve- lopment Minister Mah Bow Tan, who said the Government was more inclined towards applying a light touch.

It will depend on ‘non-interventionist’ measures like providing more information to the public on prices and rents while ramping up the supply of homes and offices.

The Government sees this shortage of space - which has resulted in rising home and office rents - as a short-term problem that is best tackled with like-minded measures.

‘We don’t want to use long-term solutions to try to solve short-term problems. If you do that, you might create problems in the long run,’ said Mr Mah.

He added that the Government will look into releasing temporary premises as a way of helping the supply side of the equation.
The HDB is also rolling out a pilot project to lease 120 vacated flats under the Selective En-bloc Redeve- lopment Scheme for terms of one or two years, depending on public response.

A ‘few thousand units’ would be available to help tide the market over the interim period before long- term supply kicks in with the completion of new residential projects, said Mr Mah.

Another initiative announced recently involved the launch of ‘transitional’ office sites by the Urban Redevelopment Authority (URA), which can be built on quickly.

The other weapon in the Government’s approach is to provide buyers and sellers with information - a lot more of it, and data that is more up to date.

Such data is seen as particularly important, given the headlines that rising prices have commanded of late.

Figures by the URA last week showed private home prices climbed 8.3 per cent in the April to June quarter, while the Housing Board revealed that resale prices for flats jumped 3 per cent in the same period.

Both increases are the highest in almost a decade.

Mr Mah maintains that in such an environment, providing useful data can clear the air for buyers and sellers.

He said he preferred to ‘let the market forces work’, but for them to work effectively, ‘there must be sufficient information’.

A wealth of information on sale prices and rent levels for both residential and HDB homes, HDB resale prices and offices has already been released and made available online.

It allows buyers and sellers to get a better handle on how the market is moving in particular areas.

Mr Mah cautioned the public to ‘make a distinction’ between data analysis reports or projections by property analysts and the hard facts provided by the authorities.

‘You can have many different reports, but you should take URA and HDB reports as a snapshot of what is really happening on the ground,’ he said.

Mr Mah added that he was confident that with these measures - comprehensive data and temporary supply - ‘we will be able to moderate the prices’.

Mr Mah was speaking on the sidelines of a Ministry of National Development joint scholarship presentation ceremony, where 36 awards were given out.

This is the first time the ministry’s agencies - such as the National Parks Board, HDB and URA - have award their scholarships in a single ceremony.
Source : Straits Times - 31 Jul 2007

Asia’s rent boom

Asia’s rent boom

HK: Housing and office rents pushed up by limited supply

It’s a common refrain from property agents these days, but one that irks flat-hunter Shen Man Yan.

‘Better view that apartment soon or risk losing it to someone else,’ they would advise Ms Shen, a 31-year-old lawyer who is looking for a flat in Happy Valley, a prime district for professionals and expatriates.

‘I don’t know if that’s a marketing ploy, or if the market is really that hot, but I hate it when I hear that,’ she said.

Analysts say it is a combination of both factors, with housing rents for professionals and expatriates here now among the priciest, if not the priciest, in the world.

Add that to similar double-digit rental increases over the past year for office space - bolstered by the promise of more mainland investment funds - and the city’s property industry looks pretty rosy.

A recent report by human-resource specialist ECA International showed that the cost of renting an expatriate apartment in Hong Kong is the world’s highest, at an average of US$8,592 (S$13,000) a month.

The figure was 17 per cent higher than for Tokyo, which ranked second, and 150 per cent over that in 15th-placed Singapore.

According to Mr Lee Quane, ECA general manager in Hong Kong, apartment rents in executive districts such as the Mid-levels and Happy Valley have jumped 25 per cent over the past two years.

The main reason for the spike is a limited supply of homes in the top districts.

A similar situation exists in the office space market, where a 17-year-low vacancy rate is pushing up prices in the prime Central district on Hong Kong Island.

US giant Morgan Stanley, for one, is said to be considering moving some operations from its Central address - traditionally de rigueur for the financial services trade - to less expensive Kowloon on the other side of Victoria Harbour.

Rents in the Kowloon hub of Tsim Sha Tsui average about HK$30 (S$5.80) per sq ft (psf) to HK$40 psf - less than half of the HK$90-HK$100 psf in Central.

For now, such increases in housing and office rents are hardly denting Hong Kong’s ability to attract investors. The city’s gross domestic product is expected to grow by 5.5 per cent this year.

One reason, noted Ms Karen Choi, research head of property firm Vigers, is that the average cost, while high, remains about 10 per cent off the peak in 1997 before the economy was ravaged by the Asian financial crisis and 2003 Sars outbreak.

‘Also, prices everywhere from Singapore to Shanghai are rising too,’ she told The Straits Times.

Said Mr Quane: ‘In the future, more companies will certainly consider moving to Shanghai, where housing costs are 50 per cent lower.

‘But then, tax rates there may also run as high as 45 per cent, which could prove just as costly for firms that pay taxes for their employees.’

The next logical option, he added, would be Singapore, which shares Hong Kong’s attractive tax regime but not its physical and political intimacy with China.

‘Hong Kong remains, for now, worthwhile for the large multinationals despite high property rents,’ Mr Quane concluded.

Source : Straits Times - 30 Jul 2007

It could get worse: Wall St braces itself for more selling

It could get worse: Wall St braces itself for more selling
Any new signs of distress from hedge funds could hit stocks, say analysts
By ANDREW MARKS
IN NEW YORK
WALL Street had been waiting for a major sell-off in the stock market for several weeks, and last week it got it. Between expanding concerns over the subprime mortgage market spreading throughout the hedge funds, major brokerages and big lender banks, the pullback in the credit markets, a big yen rally sparking an unwinding of the carry trade, and some disappointing earnings reports, there were more than enough reasons to send investors packing. The coming week promises to be another extraordinarily volatile one, as Wall Street gets a stock market roller coaster ride with every bit of news hitting the market.
Market woes: Traders outside the New York Stock Exchange on Friday. This week promises to be another volatile week for the stock market 
‘You certainly don’t get the feeling that we’ve come to a bottoming,’ said Grace Financial chief investment strategist Joe Kalinowski, who also manages a hedge fund. ‘There is a lot of fear still out there despite the correction we’ve already seen and I don’t think it will take much to send stocks further into bearish mode this week,’ he said.

And they certainly have reason to worry. With the severe contraction in the credit market and higher interest rates that make access to cash harder for corporations and consumers alike, the liquidity-driven bull market is imperilled. Rather than risk losing all the gains they’ve accumulated since March, investors big and small are taking their money and running.

Although the biggest bloodletting didn’t happen until Thursday, the market’s fate was essentially sealed on Tuesday after the closing bell, when Countrywide Financial, the largest mortgage lender in the United States, announced poor second-quarter earnings and its CEO said that problems in subprime are spilling into prime loans and that the current housing environment is the worst since the Great Depression.

Investors were then treated to further confirmation of the credit squeeze when Chrysler and Britain’s Alliance Boots failed to find buyers for US$20 billion of loans to pay for previously announced private equity buyouts. A consortium led by JPMorgan was left holding the debt on its balance sheets until the deals can get done, presumably at less favourable terms. Wire service Bloomberg reported that 40 firms either postponed or cancelled debt offerings last week, and it’s not hard to see why.

Bondholders are now demanding that borrowers pay them 3.9 per cent more than the yield on the 10-year Treasury note, 4.78 per cent, to hold junk bonds, up from a premium of just 2.1 per cent in early June, according to KDP Investment Advisors, a research firm.

At the very least, said traders, based on Friday afternoon’s late trading action when stocks went from mild losses to another rout, the S&P 500 doesn’t appear to have support above 1,448, its 200-day moving average. That’s nearly another percentage point below its current level.

‘At this point, I think a lot of people would be pleased if all we lose is another per cent or two,’ said Hugh Johnson, chief investment strategist at Johnson Illington Investors.

If stocks are to start recovering this week, there’s going to have to be a lot of good news coming out of the wave of corporate profit reports due out.

There will be 99 reports from S&P500 companies, including Dow components Verizon, General Motors, Disney and Proctor & Gamble, as well as MasterCard, Time Warner and Starbucks.

Thus far, second-quarter earnings growth expectations for S&P500 companies stand at 5.8 per cent, up from 5.2 per cent the previous week and 4.1 per cent on July1.

There’s also a lot of economic data on tap in the coming week for investors to chew over. Tuesday’s reports include personal income and the employment cost index, as well as construction spending, Chicago purchasing managers data and consumer confidence. The highlight will be July’s employment report on Friday.

But, say analysts, no matter how positive the news is from corporate earnings and economic news, stocks will remain vulnerable to any new signs of distress from hedge funds hit by their exposure to bad US home loans, as well as from credit markets.

‘A few consecutive days without news of threatened hedge funds or cancelled buyout deals, and stocks could start to bounce back,’ said Mr Kalinowski. ‘But this market is in a fragile state of mind, so more bad news could easily bring a repeat of last week,’ he added.

Source : Business Times - 30 Jul 2007

Lawyers roped in to combat money laundering

Lawyers roped in to combat money laundering
New rules state that they can no longer keep anonymous accounts
By SIOW LI SEN
(SINGAPORE) Lawyers sitting on millions of dollars of clients’ money in trust or client accounts will have to be more sure where the money came from, under new rules that aim to curb money laundering.
In particular, lawyers will no longer be able to maintain anonymous accounts - they will have to know a client’s business and keep records for at least five years.

The moves - spelt out in the Legal Profession (Professional Conduct) (Amendment) Rules 2007 that takes effect Aug 15 - come amid whispers that some crooks are using Singapore’s hot property market to launder ill-gotten gains. The fear is that crooks who are using the property boom could be parking cash with lawyers here pending a purchase.

More than 90 per cent of all property purchases go through lawyers. ‘To help combat laundering through law firms, two areas need to be looked at,’ said Wong Partnership’s managing partner Dilhan Pillay Sandrasegara - ‘retail conveyancing and clients that come to us via private banks’.

Law firms also need to pay more attention to funds from overseas or by way of telegraphic transfer, he said. Singapore banks have had to implement increasingly stringent rules to prevent ‘black’ money being moved into the financial system.
And now lawyers are going to have to do the same, to prevent illegal funds seeping into the legitimate economy through investments in real estate, luxury assets or business ventures. But once clients clear the first hurdle of opening a bank account here, it is difficult for lawyers to know whether funds are illicit.

‘I’ve yet to see anyone come in with a suitcase of cash,’ said KCChuang, conveyancing partner at Advent Law Corp. ‘Usually they have a cheque or demand draft issued from a Singapore bank.’

Mr Chuang said he has been approached three times by suspected money launderers in the past few years.

‘They asked to use our client account, saying they would remit money from an overseas bank and if we could remit onwards to their accounts - one was to Thailand, another to New Zealand.’

The amounts were US$5 million a month, for which the launderers offered a 2-5 per cent service fee, he said. ‘For some lawyers this can be very tempting.’

Mr Chuang turned down all the requests. ‘One of them said he was dealing in second-hand cars,’ he said. ‘I asked him why he could not remit directly, but got no answer.’

Lawyers typically hold clients’ money in common accounts that can be huge, running to tens or even hundreds of millions of dollars. Once illegal funds are sent into a client account, it can be difficult to separate them from the rest of the account.

Law firms typically have three accounts - trust account, client accounts and an office account.

Worldwide, laundering illicit money by buying real estate has become a common tactic.

The new rules here put the onus on lawyers to know a client’s business, with the ‘acquisition, divestment or any other dealing of any interest in real estate’ at the top of the list. Reputable law firms say they will not be affected by the amendment because they have systems to guard against money laundering.

‘Our reputation is very important to us,’ said Wong Partnership’s MrDilhan. But some tweaking will have to be done with regard to private banking clients, he said.

Private banks do not want to reveal clients’ identity at first for requesting searches, such as for caveats, before a deal goes through. ‘But going forward, in keeping with the principal of know your client, the private banks will have to disclose upfront their clients and vouch for them,’ he said. ‘Otherwise we cannot accept instructions.’

Every financial centre is a target for money launderers. ‘The real estate market is so global that the issues we face are the same issues a lawyer in London faces,’ Mr Dilhan said.

Still, the new rules are no tougher that those in London or New York, so legitimate investors will have no problem buying property or other assets here, he said.

For instance, most law firms already keep records five years after a transaction. ‘Law Society rules already say we have to maintain files for 6-12 years,’ MrChuang said. ‘It’s a storage nightmare.’

Many firms use external warehouses to store records and files, he said. ‘We don’t look at the new rules as negative. They formalise requirements that some of us already practise.’

Will law firms that are expanding overseas, such as in China, have to be extra vigilant against suspicious transactions?

Wong Partnership exercises the same diligence on clients at all its offices, Mr Dilhan said. ‘So far the number of incidents in China when we’ve had to discharge ourselves is very small.’
Source : Business Times - 30 Jul 2007

Property loans rising in boom market

Property loans rising in boom market
They make up 47% of total loans by commercial banks at end-June
By NANDE KHIN

(SINGAPORE) As the property boom chugs full steam ahead, banks’ exposure to the sector has been steadily widening and their risks may be deepening, especially as a result of the prevalence of deferred payment schemes.
This has been a steady increase from the 33 per cent from about a decade ago (end-1996) around the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

In absolute terms, the housing and bridging loans were worth some $64 billion as at end-June, compared to about $63 billion six months ago.

Loans to the building and construction sector stood at about $30 billion as at end-June, an increase of 21 per cent from a year ago, said MAS.

Not surprisingly, the run-up in property prices has led to an increase in housing and bridging loans (the consumer loans), but this rise has slowed dramatically from the early years of the current boom.

Right after the current property boom started, housing and bridging loans surged 17 per cent between end-2002 and end-2003 to reach $52.2 billion. Since then, the increase has slowed to about 2 per cent for the first six months of the year and from end-2005 to the end of last year, the value of housing and bridging loans increased by only 2.2 per cent.

Housing and bridging loans’ share of the total loans of commercial banks - while still the biggest - has also declined over the last couple of years. Their share of total loans, after building up over the years to a peak of 33.8 per cent at end-2005 has dipped over the last one-and-a-half years to about 32 per cent as at end-June this year.

What is perhaps more significant for the financial sector is that the loans to the building and construction sectors including loans made to developers have been expanding much faster over the past few years and have been taking up a bigger share of total loans extended by banks.

Loans to developers have an added element of risk because of the deferred payment scheme which allows home buyers to pay only a fraction of the property’s price upfront.

Loans to the building and construction industry, after contracting between 2004 to end-2005 as the construction industry went through the doldrums, surged 14.4 per cent to $26.3 billion as at end-2006. The further growth to $30 billion as at end-June this year represents a growth of 21 per cent from end-June 2006.

‘As MAS has previously said, the use of the deferred payment scheme by property developers introduces additional risks to the developers, and to the banks which finance these developers, because property purchasers under this scheme are not subject to credit checks by developers.

‘This is unlike property purchasers who apply for housing loans and are subject to credit assessment by banks. MAS expects banks to exercise prudence in their financing to the property developers and be fully cognizant of the additional risks from the use of deferred payment schemes,’ a spokesperson from MAS told BT.

Last week, during the release of MAS’ annual report, Heng Swee Keat, the authority’s managing director had said that MAS is keeping a close eye on developments in the property boom. As Singapore’s central bank and the regulator of the financial industry, MAS’s concerns with regard to the property boom are how rising prices impact inflation and the risks posed to the stability of the financial system.

Mr Heng had noted that the banking sector’s exposure to the property and construction sectors is ’significant’ and that housing and related loans have grown over the last few quarters. ‘So for both of these reasons, we will be watching developments in the market very carefully.’

The Urban Redevelopment Authority (URA) price index for private homes, released on Friday, has risen 13.5 per cent for the first half of this year.

URA figures also revealed that developers sold 9,385 uncompleted private home in the first six months of this year, less than a thousand units shy of the record 10,363 units sold through all of last year.
Source : Business Times - 30 Jul 2007

Ex-Red House Bakery to be part of $15m project

Ex-Red House Bakery to be part of $15m project 
New complex in Katong will also have shops and service rooms
By Jane Ng 
THE former Katong Red House Bakery will soon welcome customers again - but perhaps not the kind craving fragrant cakes and rolls.
Along with the five shophouses next to it, it will become part of a $15 million complex housing shops and rooms managed like service apartments.

The landmark fire-engine red facade of the two-storey building at 75, East Coast Road will be retained, as will the traditional floor tiles and pillars, because the shophouse is a conservation property.

But whether or not it will go back to being a bakery will depend on its future tenant, said Mr Mohammad Zahid Yacob, who heads Warees Investments, a subsidiary of the Islamic Religious Council of Singapore (Muis), the legal owner of the property.

The former bakery, hugely popular with Singaporeans, sold traditional cream cakes and Swiss rolls until its closure in 2003.

The former tenants said they could not afford to pay the $15,000-a-month rent, which was almost eight times the old rate.

Mr Zahid said: ‘If we can get a tenant selling kueh, we’ll take him.

‘But as much as we want to preserve the original concept, the bottom line is it has to be commercially viable.’

He added that the plan was for the Red House to remain a food-and-beverage outlet to evoke memories of the bakery.

A food outlet will serve the needs of the long-term residents in the five-storey block of 80 to 100 service rooms to be built behind it.

Talks in recent years have been about turning the former bakery into a halal foodcourt or Indonesian restaurant.

The five shophouses adjacent to the Red House will be redeveloped, for instance, into a 24-hour convenience store, a launderette and business centre serving the residents.

Work on the complex will start early next year and will take two years.

Mr Zahid said it was hoped that the complex would liven up that stretch of Katong.

‘We want to revitalise the whole area. With a sizeable plan, we can create a more ‘happening’ district, raise human traffic and bring Katong back to the way it was in the old days.’

The Red House is a wakaf property, meaning it is held in trust for Muis.

It was put in trust by Sherrifa Zain Alsharoff Mohamed Alsagoff, who wanted the income generated from the property to be used to provide free medicine for the community.

She was the great-granddaughter of Hajjah Fatimah, who built the Hajjah Fatimah Mosque in Beach Road.
Source : Straits Times - 30 Jul 2007