URA to auction 12 Sembawang sites for landed homes

URA to auction 12 Sembawang sites for landed homes

FOR the first time in six years, the Urban Redevelopment Authority is offering small sub-divided landed housing plots for sale. It will auction 12 on 99-year leasehold tenure at Sembawang Road/Andrews Avenue on Oct 30.

The plots, in Phase 1 of a new landed housing estate called Sembawang Green, can be developed into a total of 57 homes - 42 terrace houses, 14 semi-detached homes and a bungalow. The sale is aimed at encouraging wider participation by smaller developers and even individuals wanting to build dream homes opposite Sembawang Park and near Sembawang Beach. The approach is similar to that taken by URA for Kew Drive in 1993-1994 and Eastwood Park in 1995-1996, both in the Bedok area, and Chuan Green in 1997-2001. The Sembawang plots range in area from 4,243 sq ft (for a two semi-detached house development), to 43,694 sq ft (for a 23 terrace-home project). All 12 plots can be developed up to three storeys.

Knight Frank director Nicholas Mak expects the terrace plots to fetch $220-250 psf of land area and the semi-detached and bungalow plots around $180-200 psf. These reflect breakeven costs of $870,000 to $930,000 per terrace house, $1.025 million to $1.1 million per semi-D and $1.5-1.6 million per bungalow.

CB Richard Ellis executive director (residential) Joseph Tan expects the terrace plots to fetch $220 to $250 psf of land area, the semi-D plots $240 to $270 psf and the sole bungalow site $260-$300 psf. Based on these bid ranges, the terrace houses could sell for about $1.0-1.1 million, the semi-Ds for $1.4-1.5 million and the bungalow for $2.6-2.8 million, according to Mr Tan.

The plots are next to the established landed housing estates of Straits Garden and Sembawang Straits Estate. URA has already put in infrastructure. A URA spokeswoman said the authority will decide on the number of phases for Sembawang Green and the number of homes in each phase after the auction of the Phase 1 plots.

Source : Business Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Property stocks slip on fears over new rules

Property stocks slip on fears over new rules
Investors worried over impact on land-banking; office market retains shine
By LYNETTE KHOO

RESIDENTIAL property stocks took a beating yesterday as investors got the jitters over tougher en bloc legislation that could slow land-banking.
City Developments slipped 40 cents or 2.6 per cent to $14.70, CapitaLand lost five cents or 0.7 per cent to $7.40 and Keppel Land shed five cents or 0.6 per cent to $7.90.

The counters were hit in a lacklustre market, as the benchmark Straits Times Index slid 45.44 points or 1.3 per cent to 3,343.

CIMB-GK property analyst Donald Chua said property firms were sold on worries the government could take further measures to contain prices.

‘Investors are sitting back to wait and see what policy comes out and how it affects the market,’ he said. ‘But even if you look at the en bloc legislation, it has no real impact on fundamentals.’

Other analysts also said proposed changes to en bloc sale rules are unlikely to have a major impact on developers, with the pace of such sales having already slowed because of higher asking prices.

Winston Liew of OCBC Investment Research said the dispute between en bloc sellers at Horizon Towers and buyers including Hotel Properties Ltd has been a dampener. ‘And these changes to legislation are just further impediments that have been put in place to reduce the rate of en bloc developments.’

OCBC has a ‘hold’ call on CapitaLand and Keppel Land while keeping a ‘buy’ call on City Developments given its exposure to the office market and substantial pre-sold projects that reduce earnings risk.

Some analysts feel the new legislation will not hit developers’ earnings too hard. ‘It’s a tweaking of rules but not very prohibitive,’ said Macquarie Research Equities analyst Soong Tuck Yin said. ‘The pace of land-banking depends more on pricing than the rules.’

CIMB-GK’s Mr Chua said: ‘The property market is still strong and prices for the past half-year have consistently surprised on the upside. But at current levels, we don’t think investors are willing to take much risk, so the bullish view of further physical price appreciation may be halted for the moment.’

He is more upbeat about the office market, with rents expected to keep going up amid the supply crunch. The highest current office rent of about $18.50 per sq ft per month is expected to breach $20 for prime space by this year, Mr Chua said.

He reckons the residential sector is expected to ‘take a step back’ to see whether demand is sustained.

Among developers, he favours those that have aggressively built up landbanks at lower prices, such as Ho Bee Investment and CityDev. He has a ‘buy’ rating on both stocks in view of current low valuations caused by the recent market correction.
Source : Business Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Owners eager to push pending collective sales

Owners eager to push pending collective sales
They could soon face higher hurdles under new rules aimed at more transparency
By LYNETTE KHOO
(SINGAPORE) Ahead of proposed changes to the Land Titles (Strata) Act, property agents and owners of affected en bloc sites are eager to push pending sales as they may soon face bigger hurdles when the amendments become law.
Changes in en bloc sale legislation, expected to be passed in early October, are aimed at providing more transparency and safeguards to ensure all stakeholders get a fair deal.

But this means owners that want to sell en bloc will have to follow new rules, which could mean higher costs and a prolonged process.

Jones Lang LaSalle’s regional director and head of investments, Lui Seng Fatt, estimated there are some 50 en bloc sites already launched by tender or expression of interest in the market, with about half of these not having obtained consent from owners holding at least 80 per cent of share value. ‘They would have strong incentives to get through. Otherwise, if the new law kicks in… they would have higher hurdles to clear,’ Mr Lui said.

The amendment will mean that the majority consent is to be based on the area of the units in the development. This is in addition to the current requirement for consent from owners holding at least 80 per cent of share values for developments more than 10 years old, or 90 per cent for developments less than 10 years old.

En bloc deals that have not taken the area of units in the development in their definition of majority consent will have to redraft their collective sale agreement (CSA) if they fail to reach the market before the new legislation is passed. ‘If we don’t achieve the 80 per cent consent we’ll have to restart the exercise,’ said Jeremy Lake, executive director of investment properties CB Richard Ellis.

‘That’s extremely time-consuming, so it makes more sense to try to achieve the 80 per cent as quickly as possible. And for projects that are far away from it with no chance of achieving 80 per cent before the legislation sets in, we will have to review the situation.’ Mr Lake said the new legislation will encourage owners who have been ’sitting on the fence’ about selling en bloc to decide sooner rather than later.

CBRE has about five en bloc applications that have not passed the 80 per cent mark, with the level of consent obtained so far averaging 50 per cent. DTZ Debenham Tie Leung revealed that six of the en bloc deals it is handling are at various stages of signature collection, with some close to achieving 80 per cent consent.

Credo Real Estate has seven or eight projects that have not reached 80 per cent. These consultancies said that while the amendments to en bloc sale legislation will enhance clarity and transparency, they will add to costs and slow the pace of sales. For instance, owners will have to spend more hiring lawyers to witness the signing of CSAs and obtaining valuation reports, said Credo managing director Karamjit Singh.

These consultancies have received calls from concerned sellers who want to discuss the implications of the new legislation on existing en bloc procedure. DTZ director Shaun Poh said: ‘We would probably need to reassess the situation right now. For those close to the 80 per cent mark, I would advise them to hold a meeting with our lawyers to discuss the salient points of the new legislation and encourage them to push through the 80 per cent mark.’ For those far from achieving the minimum consent requirement, DTZ will meet sales committees to help them make informed decisions and redraft CSAs if need be.

While there could be a rush to collect signatures for en bloc sites ahead of the changes to the Land Titles Act, this could be followed by a lull as prospective sellers mull over the new en bloc requirements. ‘I think the bottle-neck will clear once this new legislation becomes standard operating procedure but I can see that temporarily, it will slow down the pipeline,’ Mr Lui of JLL said.

Source : Business Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Rafidah highlights opportunities for Singapore business

Rafidah highlights opportunities for Singapore business
Malaysian minister points to close economic ties between neighbours
By NANDE KHIN

(SINGAPORE) Singapore and Malaysia have more to gain by working together than constantly competing with each other, Malaysia’s International Trade and Industry Minister Rafidah Aziz said yesterday.

Call to work together: Ms Rafidah, with Singapore’s Minister for Trade and Industry Lim Hng Kiang, at a seminar on business opportunities in Malaysia
Speaking in Singapore at a seminar on business opportunities in Malaysia, the minister rattled off figures to show how intertwined the Asean neighbours were.

She said both countries could not avoid working together when 205,000 or so Malaysians work in the Republic, including 120,000 who commute daily.

Conversely, 130,000 Singaporeans visit Malaysia daily.

‘That’s how close we are,’ she said.

Such close ties are also evident at other levels.

Last year, two-way trade jumped almost 10 per cent year-on-year to US$40.1 billion in 2006.

Singapore was Malaysia’s second largest trading partner that year, accounting for 16 per cent of Malaysia’s total trade.

Top traded items include electronics and electrical products and refined petroleum products.

‘Exports via Singapore amounted to US$12.68 billion, or 7.9 per cent of Malaysia’s global exports, while the value of imports via Singapore was US$23.14 billion, accounting for 17.7 per cent of Malaysia’s global imports,’ Ms Rafidah said.

‘It is clear that as competition gets more keen, industry competitors and rivals have found it a viable strategy to forge alliances and to work together rather than dissipate resources by competing,’ she said.

On the investment front, 196 Singapore manufacturing projects in Malaysia worth a total of $1.6 billion were approved between January 2006 and July this year.

These include 66 projects approved so far this year with a total investment of $759.4 million.

‘These links cannot be severed,’ Ms Rafidah told an audience of business executives from both sides of the Causeway. ‘In other words, we grew together. We are not there trying to kill each other.’

Investment opportunities abound in Malaysia, not only in manufacturing but also in the services sector, she said.

Under Malaysia’s Third Industrial Master Plan, the services sector is expected to grow an average of 7.5 per cent a year over the next 15 years and its contribution to GDP is expected to increase to 59.7 per cent by 2020 from 50.8 per cent in 2006.

The sector’s total investment target over this period is $300 billion.

Opportunities for Singapore companies are available in business and professional services, integrated logistics, information and communication technology (ICT), education, health and tourism services, Ms Rafidah said.

She also urged Singapore companies to set up operational headquarters in Malaysia which has advantages in terms of a well-developed infrastructure, relatively low business costs, an educated and multi-lingual workforce, attractive investment packages and liberal policies on foreign equity participation and expatriate employment.

Ms Rafidah also highlighted the Iskandar Development Region (IDR) and the Northern Corridor Economic Region as attractive investment destinations.

The IDR, for example, offers incentives for companies in tourism, education, healthcare, logistics and creative industries.

During the seminar, organised by parties including Malaysia’s Ministry of International Trade and Industry, the Singapore Business Federation and International Enterprise Singapore, the minister had a candid dialogue lasting about 90 minutes on the concerns of Singapore investors.

She assured them the Malaysian government is stepping up efforts to combat crime and said the situation is not as bad as portrayed in the media.

On red tape in Malaysia, she said it is ‘not the norm’ and her ministry will do its best to minimise bureaucracy. She also encouraged investors to e-mail her on any difficulties they have doing business in Malaysia so she can get her department to look into the matter.
Source : Business Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Marina Bay IR to cost more than the US$2.4b Venetian Macao

Marina Bay IR to cost more than the US$2.4b Venetian Macao
Cost could jump by up to 40%, pushing price tag of S’pore resort beyond S$5b
By ARTHUR SIM
IN MACAU
GAMING and resorts operator Las Vegas Sands’ newly opened US$2.4 billion Venetian Macao in the Chinese territory may be the biggest single structure in Asia, and it may be the second biggest building in the world.
Ready for business: A replica of St Mark’s Square at the Venetian Macao, which officially opened yesterday. The resort will host 44 major events over the next 2 years, the largest one expected to attract 30,000 visitors.
But its Marina Bay Sands (MBS) integrated resort in Singapore will be more expensive - especially now that costs could escalate by as much as 40 per cent to hit some S$5.2 billion, or about US$3.4 billion.

Speaking at a press conference here yesterday at the official opening of the Venetian Macao, Las Vegas Sands COO William Weid-ner said that it had been ’struggling to stay on budget’, but rising construction costs coupled with the refinement of design on the complicated curving structure of the hotel towers is likely to push up the overall cost of the Singapore project by between 20 and 40 per cent.

Sands beat three other bidders in a hard-fought campaign last year to clinch the licence for the Marina Bay integrated resort. The cost of MBS had previously been estimated at S$5.05 billion including S$1.3 billion for the land. Taking away the land value and factoring in a 40 per cent rise in project cost, the Marina Bay resort could come to about S$5.2 billion.

Mr Weidner was nevertheless optimistic about the opening date of the Singapore project. ‘If we keep our noses to the ground, we can open in late 2009,’ he said.

So far, Sands says it has awarded S$700 million in construction contracts for the Singapore project. A S$1 billion contract will soon be awarded to build the hotels.

Mr Weidner said that Sands was in discussions with the Singapore government on construction costs but did not disclose details. ‘The government knows where we stand,’ he said.

Unlike most casino business models, Sands will also depend on the meetings, incentives, conventions and exhibitions (Mice) business.

Giving an update, Mr Weidner said it has currently 20 major events booked at MBS up to the year 2013. For the Venetian Macao, 44 major events have been booked for the next two years, with the largest expected to attract 30,000 visitors.

But Mr Weidner does not expect the North Asia market to eat into the South Asia market. He added: ‘When they see what is available (at the Venetian Macao), it will be much easier to sell Singapore.’

Selling Macau as more than just a casino destination has not been tested in the Chinese territory but Sands hopes to attract visitors to extend their stay with attractions that include a 15,000-seat arena, a US$150 million Cirque du Soleil show and a one million sq ft mall with 350 shops.

The number of visitors to Macau has been increasing; up to 26 million people are estimated to visit the territory this year.

Indeed, demand for travel to Macau has become so intense that the Chinese government decided to place some travel restrictions on its nationals earlier this year.

Macau has benefited from a surge in mass market players from China and, interestingly, Sands’ first casino in Macau - the smaller Sands Macao - was targeted largely at this market. It was so successful that it recouped its investment within a year.

The much more expensive Venetian Macao will be targeted at the leisure and Mice segment. Although Mr Weidner would not say when it would break even, he said it expects a yield of over 20 per cent per year on its investment. He added that Sands could sell some of its assets, including the mall.

Sands will also be looking to grow its premium-play segment which currently makes up 60 per cent of its gaming revenue.

Another strategy is to expand within Asia.

Also speaking at the press conference, Sands CEO and chairman Sheldon Adelson said that it would open other integrated resorts in Asia if allowed. But he added: ‘This is not a race.’

Noting that China alone hosted 60 million Mice delegates in 2003, Mr Adelson said, ‘There are only so many events you can hold in one building.’
Source : Business Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Tender for Anson Road site closed

Tender for Anson Road site closed
By Nicholas Fang
THE tender for a 99-year-old office plot on Anson Road closed yesterday with local-based Firstoffice lodging the highest bid of $237.2 million.
It outbid Mapletree Lighthouse Trust trustee VivoCity, which offered $201.7 million, and Winglow Investment, which bid $159.8 million.

The Firstoffice price works out to $941 per sq ft per plot ratio (psf ppr), which is below the $1,021 psf ppr a Mapletree Investments unit paid for a larger plot nearby last month.

Mapletree also had to beat four rival bidders for that plot; only three bidders contested the latest tender.

But industry experts say this is not an indication that the property boom is starting to lose its fizz.

For one, the earlier site is 39,733 sq ft compared with the latest plot’s 27,281 sq ft.

Property consultancy Knight Frank’s head of research and consultancy, Mr Nicholas Mak, said the two locations also differed in their appeal.

‘The latest site is triangular in shape and one side faces a carpark and a large exhaust pipe from International Plaza.

‘Even if the owners choose to build higher, the occupants would still end up looking into the offices of International Plaza just 20m away.’

CBRE Research executive director Li Hiaw Ho said: ‘Based on the highest bid submitted, the break-even cost for the site is likely to be around $1,700 to $1,800 psf ppr.

‘This would provide the successful bidder with a stabilised yield of around 4.5 per cent to 5 per cent based on a gross rent of about $9 to $10 psf each month.’

The site was launched for tender by the Urban Redevelopment Authority (URA) on July 4.

URA said that a decision on the award of the tender will be made once the bids have been evaluated. It will be announced later.

Firstoffice is owned by Homerun 28, which is based in Mauritius.

The Singapore firm’s directors include Australian Andrew Heithersay, who lives in Hong Kong, Singapore permanent resident Ian Mackie and Singaporean Woo May Poh.
Source : Straits Times - 29 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com

Collective sale market seen slowing on proposed changes

Collective sale market seen slowing on proposed changes
New rules will address minority concerns over sale price, transparency
By Joyce Teo, Property Correspondent and Nicholas Fang
EXCEPTION: The amended Land Titles (Strata) Act - likely to take effect in October - will apply to all projects except those where the 80 per cent to 90 per cent majority consent has already been obtained. — BT FILE PHOTO

THE property fever that has gripped Singapore for the past year will likely cool in the wake of proposed changes to rules on collective sales.
The new rules - likely to apply in early October - will make collective sales a lengthier, more complex procedure, say industry experts.

‘The market will eventually adapt, but the process will definitely be more long-winded and cumbersome, which should diminish the number of projects which come to market successfully,’ said Mr Jeremy Lake of consultancy CB Richard Ellis.

Lawyer S.K. Phang said Singapore’s rules on collective sales are already one of the most comprehensive in the world, but ‘the latest amendments - so far the most far-reaching in their effects - tighten them further’.

Sales have already been tapering off.

Other pressures have come from a recent hike in development charges that developers pay and a jittery stock market that has unnerved investors.

The new rules come amid seemingly growing resentment among minority owners - those who did not vote for a sale - with the sale process.

Many of their issues, apart from the sale price, concern transparency, with some owners complaining that they are being kept in the dark.

The changes, including a five-day cooling-off period, will help address these concerns, but the changes are still pro-sale, said a lawyer.

Some industry players are not happy with the short transition period for the proposed changes.

Once the amended Land Titles (Strata) Act takes effect, it will apply to all projects except those where the 80 per cent or 90 per cent required majority consent has already been obtained.

Owners are seen rushing to get the 80 per cent approval before the new rules come into effect or risk having to restart the whole sale process under the new law.

The last few signatures, however, are often the hardest to nail, observers say, so those who have not yet signed have even more reasons to resist.

‘The short transitional period may undo some ongoing collective sales, which are in the process of obtaining the required percentages of consensus,’ said Dr Phang.

Estates that have just formed sales committees or started collecting signatures will have to start again at a higher cost. A benefit is that the owners of these estates will be able to monitor the sale process better.

‘The new rules will give owners a chance to be involved,’ said a collective sale seller. ‘If not, the sales committees kind of run the show on their own.’

Mr Nicholas Mak of consultancy Knight Frank said: ‘The requirement to have a vote to set up a sales committee means very committed people are required to sit on the committee, as they will face greater responsibility and accountability.’

Some speculators looking to set up a sales committee or just buying into older properties hoping for a quick gain through the collective sale process could be deterred.

There will be a higher risk that the sale will not succeed and, even if it does, the specuators’ cash will be tied to the property for a longer period.

The proposals could also deter those who are not serious about a collective sale but are just testing the market to see their property’s worth.

‘If the new regulations can weed out such people, that would be a positive effect,’ said Mr Mak.

If fewer estates come to the market, their success rate could rise, said a consultant.

Source : Straits Times - 28 Aug 2007

Singapore Property - Buy , Sell , Rent , Invest
Mindy Yong
(+65)91002985
mindy@mindyyong.com
http://www.hotvictory.com