900 Teban Gardens flats picked for Sers

900 Teban Gardens flats picked for Sers
10 of Jurong East’s 30-year-old blocks to be redeveloped
By Jessica Cheam

THE residents of 10 blocks in Teban Gardens, one of the oldest residential estates in Jurong East, will soon be offered new flats as part of the Housing Board’s latest redevelopment exercise.
Under the Selective En-bloc Redevelopment Scheme (Sers), more than 900 households in the 30-year-old precinct in Teban Gardens Road will be relocated to a new site near Block 61, Teban Place, the HDB announced yesterday.

This is the second site in Jurong East to be selected for Sers - the first was in 1998 - and brings the total number of Sers sites to 71 since it was launched in 1995.

The HDB will build 1,100 new two- to five-room replacement flats. Eligible owners now living in Blocks 2 to 11 will be invited to select their new flats in the middle of next year, when construction begins.

Teban Gardens will also be the first HDB precinct in Jurong East to feature new two-room flats and 40-storey blocks.

Of the four new blocks in the precinct, three will be 40 storeys high and one block will have a staggered height of 25 to 40 storeys.

The new estate, due for completion by the end of 2011, will have recreational facilities such as playgrounds, fitness corners and a landscaped deck to integrate the residential blocks with its central carpark.

The new flats will also come with universal design features catering to the needs of people of all ages and physical abilities.

Under Sers, owners are compensated for their homes at the prevailing market rate, and also get a 20 per cent discount on their new flats.

They are also assured of flats at the new site so they can choose to live with their old neighbours again. Alternatively, they can select flats elsewhere.

After the residents have been relocated, HDB said the existing blocks will be torn down for residential development.

Mr Andrew Chua, chairman of the Ayer Rajah-West Coast Citizens’ Consultative Committee said that based on initial responses, residents were positive about the news.

‘Residents are happy to get new flats to replace their existing ones, which are now very old,’ he said.

Source : The Straits Times, 12 July 2007

4 Sentosa plots offered for sale

4 Sentosa plots offered for sale
Scarcity value of bungalow sites to increase prices to $1,000-1,200 psf

By KALPANA RASHIWALA

FOUR 99-year leasehold bungalow plots have been launched at Sentosa Cove, after which Sentosa Cove Pte Ltd (SCPL) will be left with just the final 20 individual bungalow plots in the upscale housing district.

The scarcity value is expected by some market watchers to increase the prices fetched for the latest four plots, which are being offered for sale through expression of interest.
Three of the four latest plots face the waterway, and Credo Real Estate managing director Karamjit Singh reckoned these could fetch $1,100 to $1,200 per square foot (psf) of land area, well above the highest price of $960 psf achieved for a waterway-fronting bungalow plot so far this year. ‘These plots are at the corners of a stretch of bungalow sites, which means they offer a wider span of water views,’ MrSingh said.
The fourth plot, with a land area of 9,400 sq ft facing Tanjong Golf Course, could fetch about $1,000 psf, again higher than the $910 psf top bid achieved for a fairway-facing bungalow plot on Sentosa Cove, he said.
SCPL, master developer of the waterfront housing district emerging on Sentosa island, said the top price achieved for a seafront bungalow site in the area was $1,473 psf.

The bungalow sites on Sentosa Cove have a particular scarcity value not just because there are very few of them but because buyers are particularly reluctant to sell on the secondary market, Mr Singh said. ‘Many of those who’ve bought these sites are high net worth investors who buy, build and keep,’ he reckoned.
The three waterway-
facing plots launched by SCPL will permit their new owners the luxury of mooring their private yachts in their backyards. The sites range in land areas from 9,348 sq ft to 11,515 sq ft and have plot ratios (ratio of maximum potential gross floor area to land area) of 0.77. The sole fairway-facing plot has a slightly higher plot ratio of 0.8. All four plots can be developed into two-storey bungalows with attic and basement.
The expressions of interest for the four plots close on July 25. The award will be based solely on price. Besides individual bungalow plots, there is still Pearl Island, which can be redeveloped into 19 bungalows and which will be relaunched in later this year after the man-made island failed to fetch a high-
enough price in a tender that closed last November. The island would be targeted mainly at developers, unlike the individual bungalow plots which provide buyers with the opportunities to build their dream homes on their new parcels of land.
The other remaining plots at Sentosa Cove available to developers include one for terrace houses, which is slated for launch soon. Two condominium plots are still available - the Beachfront Collection, which has been launched and whose tender closes on July 24, and a plot known as C-13, which will be launched before the end of the year.
SCPL has already sold land for about 1,955 homes on Sentosa Cove comprising 358 landed homes (terraced houses and bungalows) and about 1,597 condo units. These make up about 80 per cent of the total of 2,500 homes planned for Sentosa Cove.

Source : The Business Times, 12 July 2007

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Developers passing more risk to market

Developers passing more risk to market
New ways of raising funds, like project-linked bonds, lower cost but transfer risk burden to investors

By CONRAD TAN

(SINGAPORE) As the property market boom here gathers steam, developers are raising funds for new projects through more innovative means, some of which pass on the risk to the wider capital markets.

The burden of financing such projects has fallen more heavily on the developers’ shoulders with the growing popularity of deferred payment schemes.
When buyers pay only a fraction of the property’s price upfront, it is left to the construction companies and developers to fund the land purchase and building costs before the money starts rolling in.
Instead of knocking on a bank’s door the old-fashioned way, analysts say that developers find themselves increasingly encouraged to issue bonds, for example.
‘The only reason why they would not rely on a bank is because the terms are much cheaper in issuing these,’ said David Lum at the Daiwa Institute of Research.
Kenneth Ng at CIMB said developers have been able to borrow much more cheaply from the capital markets compared to two or three years ago, ‘because there’s been more liquidity in the market.’
Large developers in particular have been able to obtain highly favourable borrowing terms because they now have ‘a lot of alternative avenues’ to raise funds, including spinning off properties into Reits and listing them, he added.

The use of convertible bonds, which give buyers the option to exchange their bonds for shares in the issuing company, have enabled even the smaller developers such as Soilbuild Group to borrow at interest rates as low as one per cent a year.
The embedded stock option - which is especially valuable in a bull market when investors expect share prices to rise further - means that firms can offer such bonds at lower interest rates than ordinary bonds.
Soilbuild said earlier this week that it would issue up to $60 million worth of convertible bonds.
Other developers have raised far bigger sums recently, also through the sale of convertible bonds. CapitaLand raised $1 billion in May, while GuocoLand sold $690 million worth of convertible bonds in April.
The latest data from the Monetary Authority of Singapore (MAS) on the corporate debt market here showed that property-related Sing-dollar debt issues doubled to $4 billion last year from $2 billion in 2005.
In a report published last month, Citi economist Chua Hak Bin estimated that the average debt to equity ratio at Singapore property developers with a market capitalisation of more than $1 billion rose to 61 per cent in the first quarter, from 50 per cent a year earlier.
With homebuyers paying only 10-20 per cent of a property’s price upfront in some cases, Dr Chua pointed out: ‘Developers, rather than households, are bearing the financing burden of the current property boom phase,’ he wrote.
Large developers such as CapitaLand and Keppel Land have also raised funds by selling securities backed by the future payments of homebuyers at specific projects.
Most recently, CapitaLand and Lippo Group raised some US$342 million selling floating-rate bonds linked to the Metropolitan and Scotts HighPark condominiums.
Investors in such asset-backed securities supply upfront working capital for the developer in exchange for regular interest payments, and they bear the risk of losing money if homebuyers in the underlying projects default on their payments.
Unlike bonds issued directly by a developer, investors in these securities have no claim on the developer’s remaining assets.
CIMB’s Mr Ng said developers selling asset-backed securities linked to specific projects could be trying to manage their own risk exposure.
‘My guess is that there’s a bigger than normal percentage of investment property buyers for these projects, so they’re trying to junk off the risk from their own books.’
Under MAS rules, the sale of such securities is usually restricted to institutions or ’sophisticated’ investors only. Since most are privately placed, the buyers are not known, but are believed to include foreign hedge funds keen to gain exposure to the local property sector.
Even so, in the event of a market crash resulting in widespread defaults by homebuyers - a big if for now, say analysts - these investors are likely to be caught out.
Daiwa’s Mr Lum said: ‘Like the sub-prime situation in the US - they’re supposed to be sophisticated, but some of them got wiped out like that. It’s always this risk.’
He added: ‘Unlike property cycles in the past in which it’s the banks that end up with the NPLs (non-performing loans), this time around, it’s probably these security holders that would end up taking the hit.’

Source : The Business Times, 12 July 2007

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