S’pore on track to host first night F1 race

S’pore on track to host first night F1 race

By Leonard Lim

ALMOST there.
Singapore’s bid to host Formula One’s first night race has entered the final straight, with only a few more obstacles to be overcome.

Recent trials of night-time racing in France were a success, and two more all-important trials - one in Singapore and one overseas - are expected to be held soon.

Approval for a night race must be given from motorsports’ governing body, the Federation Internationale de l’Automobile (FIA).

A decision is expected to be taken after the trials, which are to be held within the next few weeks.

Yesterday, Trade and Industry Minister Lim Hng Kiang expressed optimism that the green light will be given soon.
‘The various tests and various assessments have been going on track, so we’re fairly confident,’ he said at a ground-breaking ceremony for the pit building - where the cars will be refuelled and have their tyres changed during the race - along Raffles Boulevard.

F1 boss Bernie Ecclestone is pushing for several night races on the calendar - especially in Asia - to increase television viewership figures in North America and Europe.

But teams and drivers have given mixed responses to the idea.

Many are apprehensive about the safety aspects. Race cars, which can hit speeds of more than 300kmh, cannot be fitted with headlights - they affect aerodynamics, which are all-important in a sport where a tenth of a second makes a major difference.

They also add weight to cars, slowing them down.

Track lighting, therefore, will have to replicate daytime conditions, and this is difficult and costly to do.

But Mr Lim added that the Republic would go all out to assure the FIA and drivers that a night event would be safe.

‘We’re very committed to the idea of a night race and we will do whatever is in our powers to facilitate it,’ he said.

Singapore’s first F1 race will be held at the Marina Bay area on Sept 28 next year. Testing and qualifying is expected to begin on Sept 26.

The race - along with several new attractions, such as the Singapore Flyer - is expected to further boost tourism in Singapore, which hit record levels in July.

Yesterday, Mr Lim revealed that 951,000 visitors arrived in Singapore that month, an increase of 103,000 over June.

Many were drawn by a new tourism programme that started on July 23 to draw visitors here on weekends.

On the F1 front, Singapore Tourism Board (STB) deputy chairman and chief executive Lim Neo Chian said the country hit a ‘milestone’ yesterday with the ground-breaking ceremony for the pit building, which will be the nerve centre for the race.

The three-storey, $33 million facility, parallel to the Marina Bay waterfront, will house key infrastructure such as the exclusive Paddock Club and 36 garages for the 12 F1 teams.

The building’s glass facade will also offer high-end guests views of the track’s starting straight and pit-lane action.

It will also house race-control facilities, commentary booths, a media centre, the winners’ podium and a rooftop terrace.

In non-race months, it is likely to be used for hosting corporate functions. Its environmentally-sustainable design also meets Green Mark certification.

Said STB’s Mr Lim: ‘Over the next few months, more pieces will gradually come together as we plan the biggest leisure event Singapore has ever hosted.

‘There is still a lot more work to be done.

‘But we can all look forward with some excitement that, in a little over a year, we can come back to this same spot to witness the crowning of the Singapore GP’s first champion.’
Source : Straits Times - 01 sept 2007

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Record rise in development fee could slow collective sales

Record rise in development fee could slow collective sales

Steep hikes of as much as 112% in some areas take industry by surprise
By Fiona Chan & Joyce Teo

PROPERTY developers will now have to pay a much bigger fee if they want to buy and redevelop a site to enhance its use, such as in a collective sale.
The charges they must pay were raised sharply by the Government yesterday, in what is believed to be the steepest round of hikes ever.

The record increases - which come into effect today - are likely to put a dampener on the collective sale frenzy, property consultants said.

The main impact of higher development charges is that they make it more costly for developers to acquire sites for redevelopment.

Although the half-yearly revision of these development charges is a routine affair, the extent that they rose by yesterday caught market watchers by surprise.

The charges even doubled in some areas, which consultants said has never happened before.

These rises come on top of an unexpected round of hikes in July, which pushed up all development charges by 40 per cent across the board.

Development charges, which can amount to millions of dollars, are based on recent land and property values.

They are revised in March and September every year to keep them up to date with current market values.

Their dramatic rise yesterday was mostly due to the unusually steep climb in property and land prices over the last six months, and particularly because of the record- breaking run of collective sales recently.

The charges are divided by sector - including commercial, hotel and residential - and into 118 locations.

The biggest rises this time round were for non-landed residential sites in the Spottiswoode/Cantonment area, the River Valley/Kay Poh Road/Kellock Road area, and the Newton/Surrey/Lincoln roads area.

Charges in these areas rose by between 108 per cent and 112 per cent, an unprecedented jump.

They may have been boosted by recent deals such as the collective sale of Lincoln Lodge in Newton, which set a benchmark for the area.

In general, charges for non-landed residential land rose by up to 85 per cent in the downtown area, up to 100 per cent in Orchard and 89 per cent in Sentosa.

Islandwide, they rose by 58 per cent on average - the highest increase among the different sectors. Up to last week, consultants were predicting an average rise of 25 per cent at most.

Charges for commercial land, which includes shops and offices, went up by 42 per cent on average.

The largest hikes were for land in the Telok Ayer/Amoy Street area and the Anson Road area. Charges in these locations grew by 105 per cent.

In other sectors, the average hike for hospital and hotel land was 23 per cent, and 11 per cent for landed residential sites. Industrial land saw charges go up by 2 per cent on average.

Given the July rises, some consultants were surprised that yesterday’s hikes were so high.

The ‘double whammy’ of rises in July and yesterday, coming at a time when global credit is tightening, could dampen the collective sale market, said Ms Tay Huey Ying, director for research and consultancy at Colliers International.

The hikes are ‘likely to lead to more cautious bidding by developers and more realistic price expectations by sellers’, she said.

At the same time, Ms Tay added, the supply of collective sale sites could also take a beating as upcoming changes in legislation make it more difficult for estates to go en bloc.

But most developers have already acquired significant land banks and are likely to have locked in lower development charges, noted Mr Nicholas Mak, director of research and consultancy at Knight Frank. He added that another result of the hikes could be a shift in collective sale activity to the suburban areas.

‘The rates are significantly steeper now for prime areas, so suburban areas such as Bedok and Buona Vista may look more attractive to developers,’ said Mr Mak.
Source : Straits Times - 01 sept 2007

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Cutting-edge HDB designs on display

Cutting-edge HDB designs on display

Ideas include ‘granny flats’, pick-your-own unit facades and ’sky villages’
By Tan Hui Yee, Housing Correspondent
EXTENDED families could live side by side, in separate but specially designed flats, while other home buyers could pick the specific facade they want for their unit.
These are some of the new faces of public housing and will soon be found first in Queenstown and then across the country.

These cutting-edge proposals were on show last night at the HDB Hub as part of a Housing Board exhibition. If the public backs them, work will start in three to four years.

Dawson Estate, highlighted by Prime Minister Lee Hsien Loong in his National Day Rally speech last month, will be the testbed for such ideas.

Residents will eventually have their pick of more than 3,000 homes in three developments designed by award-winning Singapore architecture firms - Surbana International Consultants, Woha Architects and SCDA Architects.

The companies were told to design estates with spaces for neighbours to linger and chat while retaining the area’s heritage.

‘They have more than fulfilled this brief,’ said National Development Minister Mah Bow Tan last night as he opened the exhibition, which also showcased plans for Punggol and Yishun.

SCDA’s housing blocks, for example, will be more than 40 storeys high, comprising flats with lofts that could be joined to smaller adjacent units if extended families choose to live together.

If built, they will mark a return of the HDB’s multi-generation flats, or ‘granny flats’, which were introduced in 1987 for extended families.

They comprised a four- or five-room flat with an adjoining studio apartment with a separate entrance. A total of 367 units were built before they were scrapped due to poor demand.

Another idea, put forward by Woha, allows buyers to pick from a range of facades for their flats - which include balconies, monsoon windows, planter boxes and bay windows.

Woha also mooted the idea of ’sky villages’ - common high-rise spaces shared by every 10 floors - to encourage interaction.

There are also plans to retain the now defunct market along Commonwealth Avenue and integrate it with new developments, which would include a new plaza for community events.

Longtime Queenstown resident Hu Nguk Mee, 57, looks forward to the return of the district’s former bustle. It was one of the first new towns to be built by the HDB and used to teem with banks, eateries and entertainment outlets.

‘The new designs look really beautiful,’ said Madam Hu.

Singapore Institute of Architects president Tai Lee Siang said giving residents more flexibility in flat design and configuration will allow them to stay longer even as their household needs change over time. This will help foster a stronger sense of community spirit.

Source : Straits Times - 01 sept 2007

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Hotel unfinished but nine in 10 rooms taken

Hotel unfinished but nine in 10 rooms taken

Demand for Link Hotel rooms even before official opening highlights room crunch
By Tania Tan

IT IS barely finished, but already, nine in 10 rooms at the Link Hotel have been taken.
There is still some way to go before its official opening next month and the second block is still being refurbished, but the hotel’s guests are just glad to have rooms to lay down their heads at night.

Of the 150 rooms now available in the Tiong Bahru Road hotel, converted from the old Singapore Improvement Trust flats, 130 have been let out.

The demand for these rooms, priced at between $260 and $600 a night, kicked in even before the hotel’s soft opening in mid-July, and it has consistently filled its rooms since then.

This thirst for rooms is just a sign of the boom times for hotels.

The hotel’s executive assistant manager James Ting said travel agents were already calling him in June to secure rooms for their clients.

‘There was definitely a big demand. The travel agents needed rooms,’ he said.

And no wonder. July saw a record-breaking 951,000 visitors vying for the just over 36,000 hotel rooms available here.

Mr Ting, noting an increasing number of guests from India and China, said: ‘They travel within Asia because it’s familiar territory, and cheaper than Europe or America, so there’s bigger demand now.’

Industry players have already been warning of a room crunch.

Mr Robert Khoo, who heads the National Association of Travel Agents Singapore, has in fact gone as far as to say that the shortage in rooms could put a dampener on growth in tourist arrivals.

The Singapore Tourism Board has said it is working with the Urban Redevelopment Authority to monitor the supply of hotel rooms.

Since last August, contracts for nine hotel sites, which should yield about 3,100 rooms, have been awarded, among them, the Link Hotel.

And with next year’s Formula One races expected to draw some 80,000 to 90,000 more revellers here, the room shortage situation is beginning to look acute.

Yesterday, the Minister of Trade & Industry Lim Hng Kiang said that the Government was aware of the situation and was ‘looking at it’.

The agencies would release land, and with room rates going up, there would be more interest from developers, he said.

Source : Straits Times - 01 sept 2007

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Record 951,000 visitors in July and longer stays

Record 951,000 visitors in July and longer stays
$168.3m in hotel room revenue, up by 27.5% over last July; record arrivals from US, Australia and Vietnam
By Lin Xinyi & Leonard Lim
JULY was the best ever month for Singapore tourism.
Four records were set:
951,000 visitors - the most in a month, beating the previous high of last July by four per cent.

They stayed longer too - 3.6 million days in all, 11 per cent more than last July’s record.

Travellers from the United States, Australia and Vietnam set records of their own for arrivals from the three countries.

Plus $168.3 million in hotel room revenue - 27.5 per cent over last July.

Trade and Industry Minister Lim Hng Kiang is confident that the industry will continue to grow.

‘The tourism sector has been riding a new wave in the last few years,’ he said during the ground-breaking of the Pit Building for next year’s Formula 1 Singapore Grand Prix.

With 5,883,000 tourists visiting Singapore shores in seven months, the industry is well on its way to its ‘10.2 million visitors’ target for the year which, if fulfilled, will be another record.

July has traditionally been a strong month for tourism, said National Association of Travel Agents Singapore (Natas) chief executive Robert Khoo.

Australian tourists head here during their winter season while Americans and Europeans arrive on summer holiday.

Another lure: the Great Singapore Sale.

Visitors from Down Under made a strong showing in July, with their 76,000 visitors making them Singapore’s third largest group of tourists, after Indonesians (192,000) and Chinese nationals (109,000).

Natas’ chairman of the inbound committee Allen Tsang noted that several business events added to visitor numbers.

In July, the likes of Herbalife Asia Pacific Extravaganza 2007, the World Glaucoma Congress 2007 and the 18th Wonca World Conference on Family Medicine were held in Singapore.

Such business events drew close to 25,000 visitors and contributed at least $40 million in tourism receipts.

Whether tourist or business traveller, it did not matter for hotels here.

A spokesman for the Grand Copthorne Waterfront said: ‘The back to back conventions in July contributed to the increase of revenue.

‘We had to turn more than 3,100 room nights away. We also had to stop taking reservations as early as one month before the peak period.’

Hotel cashiers were working overtime, going by the latest Singapore Tourism Board numbers. Nine in 10 hotel rooms were booked up and average room rates hit $185 per night - a record for the month of July.

Just two years ago, room rates were averaging $136.

It was also a bumper month for Changi Airport. In July, 3.16 million passengers passed through Changi’s aerobridges, the highest ever in a single month this year and 3.5 per cent more compared to the same month last year.

While hoteliers and retailers enjoyed the boom, travel agents have raised the alarm about Singapore literally running out of rooms. Natas’ Mr Tsang said the pace at which new hotels are being opened is not keeping up with the growth in visitor arrivals.

And more tourists are expected with Changi Airport’s Terminal 3 opening its doors in January, especially given new attractions next year like the Formula 1 and the Singapore Flyer ferris wheel in the Marina Bay area.

The F1 alone is anticipated to bring in 80,000 tourists.

Weighing in on the issue yesterday, Minister Lim said: ‘We recognise that our demand is greater than supply. We have not been building sufficient hotel rooms during the difficult years from 1998 to 2003 partly because hotel rates were low and hotel developers and investors did not see the yield and the returns to hotel investments.’

In fact, Singapore will need to double the number of rooms here given that it had ‘practically doubled visitor arrivals’, he added.

There are 36,000 rooms here now and Mr Khoo estimates that 5,000 more rooms will be available by 2010, with the integrated resorts contributing half of the total.

The industry is also exploring novel accommodation ideas such as floating hotels, homestays and converting existing buildings to hotels to ease the tight room supply.

Mr Lim said that the Government is releasing many sites to put up new hotels and the ball is now in the developers’ court.

Since August last year, contracts for nine hotel sites, which should yield about 3,100 rooms, have been awarded. Another 10 sites are available, with eight on the reserve list.

He said: ‘They know hotel rates have gone up and will continue to go up at a measured pace.

‘We hope they will tender sensibly for the land price and be in the position to build the supply that we need.’

Source : Straits Times - 01 sept 2007

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25,000 may gain under HDB lease buyback scheme

25,000 may gain under HDB lease buyback scheme

Payouts will be in 3 parts: a lump sum, instalments and insurance
By Tan Hui Yee, Housing Correspondent

THE new HDB lease buyback scheme, which allows flatowners to sell back a portion of their lease, could mean as many as 25,000 elderly folk cashing in.
That number - an initial estimate - will increase over the years, revealed National Development Minister Mah Bow Tan last night.

The scheme, announced by Prime Minister Lee Hsien Loong last month, will be open to people at least 62 years old who own a two- or three-room unit and who have had only one HDB subsidy.

It is is designed to supplement the retirement savings of older, low-income owners while allowing them to continue living in their own homes.

Under the plan, the Government will shorten a lease to 30 years and pay the owner for the amount of time that has been deducted.

Take a 99-year leasehold flat with 50 years left to run. That 50-year balance would be shortened to 30 and the owner compensated when the HDB buys back the 20-year portion.

New vision for estates
SOME cutting-edge proposals for HDB estates are on show at the HDB Hub in Toa Payoh as part of a Housing Board exhibition. Here are some of the concepts:

The actual amount ‘unlocked’ by the buyback will depend on each flat’s market value, said Mr Mah, who opened an exhibition showcasing future public housing projects last night.

But the Government will give owners a subsidy on top of the market value as a way of encouraging people to sign up for the scheme.

The payout will be divided into three parts. The first is an initial lump sum, followed by monthly instalments over a fixed number of years.

If the owner dies during that period, the unpaid amount will go to his family.

The third portion of the payment, said Mr Mah, will go to an insurance plan that will give owners an income for life after the first two payment batches run out.

Mr Mah said his ministry and the HDB are still working out the details of this ’safety net’ with agencies like the Central Provident Fund Board, which is looking into a way to ensure people have enough savings to get by.

Mr Mah also guaranteed home owners who join the buyback scheme that they will still have a roof over their heads if they outlive the 30-year lease. But some may not be able to continue living in their own flats.

The full details of the plan are expected to be ready by next year’s Budget.

Mr Mah also unveiled a wide range of proposals for housing in Punggol, Yishun and the Dawson estate in Queenstown last night.

On display were designs by three leading architectural firms - Surbana International Consultants, WOHA Architects and SCDA Architects. They conceptualised 3,000 cutting-edge homes in three housing precincts in Dawson Estate in Queenstown.

The new generation of public housing will give buyers more choices of homes and landscaped community spaces while bringing greenery and waterscapes to their doorstep, said Mr Mah.

Punggol, for example, will get a 4.2km waterway that will link two future reservoirs and become a centrepiece for housing.

But, Mr Mah cautioned: ‘All these plans…are really premised on continued growth.

‘That is unspoken, but that must be so. If there is another major crisis or slowdown, it’s not just a matter of building it - who’s going to buy it?’

The exhibition will be at the HDB Hub in Toa Payoh until Sept 8 and then moves to various estates.

The HDB will gather feedback before proceeding with the plans.

Source : Business Times - 01 sept 2007

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Lease Buyback Scheme: Govt to give extra cash subsidy to home owners

Lease Buyback Scheme: Govt to give extra cash subsidy to home owners
A flat’s value will be based on current market value: Mah
By ARTHUR SIM
THE government will hand out an additional cash subsidy to encourage elderly owners of public housing flats to join its proposed Lease Buyback Scheme (LBS).
‘LBS could be finalised next year, around the time of the Budget debate in Parliament.’

- Mr Mah Bow Tan

About 25,000 HDB flat owners are already eligible for this scheme and the number is set to rise.

Speaking on the sidelines of the launch of the Housing and Development Board’s Remaking Our Heartland exhibition yesterday, National Development Minister Mah Bow Tan said the government will ‘top up the cash value’ that flat owners receive after HDB buys back the tail end of a lease from them.

The value of a flat will be based on current market value.

The news comes two weeks after Prime Minister Lee Hsien Loong first said the government was working on a scheme to allow elderly people to monetise their HDB flats to provide them with retirement income.

Mr Mah said LBS could be finalised next year, around the time of the Budget debate in Parliament.

Elderly owners who sign up for the scheme will be left with a 30-year lease on their HDB flats.

Mr Mah said the scheme will pay cash from the buyback of a flat in three tranches - a lump sum, monthly payments for a fixed number of years and longevity insurance.
He also said LBS is likely to ‘ride on the Central Provident Fund (CPF) scheme when it is ready’.

The onus will, however, be with HDB.

The housing board now has a bigger role, Mr Mah said: ‘It is a provider of a roof over people’s heads through the subsidies; it maintains value (of property) through upgrading schemes; and it is an old-age pension scheme as it were.’

He said the new Home Improvement Programme that replaces the Main Upgrading Programme ‘gives residents what they want, and they pay less for it because the government is going to increase subsidies’.

Mr Mah also revealed that HDB has comprehensive plans to upgrade old, middle-aged and new housing estates, starting with Dawson Estate, Yishun and Punggol 21+.

Dawson Estate could see a ‘new generation’ of public housing designed by local award-winning architects, while Yishun’s new town centre could be home to a large educational institution. The most ambitious plans are for Punggol 21+, which is envisioned as a waterfront community that could eventually have up to 92,000 flats.

Mr Mah said development of a town centre could start as early as 2010, when work to create new reservoirs there is completed.

A spokesman for PUB confirmed that construction work on dams to create reservoirs at Sungei Punggol and Sungei Serangoon started at the end of 2006 and will be completed in 2009.

So far, at least one commercial-cum-residential development site in Punggol 21+ has been identified for the Government Land Sales Programme and could be made available within five years.

Punggol 21+ will have a 60:40 public-private development ratio.

Noting that as a development model Punggol 21+ resembles Sentosa Cove in its infancy, property consultant Cushman & Wakefield’s managing director Donald Han said: ‘There should be some buyers looking to have the first-mover advantage there.’

Source : Business Times - 01 sept 2007

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Work to start on $33m F1 pit building

Work to start on $33m F1 pit building
Project off Raffles Boulevard will take 9 months to complete
By SAMUEL EE
(SINGAPORE) The first infrastructure project for next year’s Formula One race was flagged off yesterday by Minister for Trade and Industry Lim Hng Kiang, at a groundbreaking ceremony.
Sporting milestone: Artist’s impression of the 350-metre-long F1 pit building. The 3-storey structure will house the 36 garages for the 12 F1 teams, race control facilities, winners’ podium and hospitality lounges for 4,000 guests.
The pit building for the inaugural Singapore F1 Grand Prix on Sept 28, 2008, will cost $33 million and take nine months to complete.

The three-storey building will house the 36 garages for the 12 F1 teams, race control facilities, winners’ podium and hospitality lounges for 4,000 guests.

It is situated off Raffles Boulevard, close to the Singapore Flyer ferris wheel.

Race promoter Singapore GP Pte Ltd is developing the 350-metre-long building, which will have a gross floor area of about 18,000 sq m.

At yesterday’s groundbreaking ceremony, Mr Lim called F1 the world’s third most-watched event after the Olympics and the World Cup.
The race promoter and government agencies ‘face the daunting task of building 20 per cent of the circuit and this pit building from ground up’, he said. ‘But Singapore is a city of possibilities, so I have full confidence we will be ready for the Sept 28, 2008, race date.’

The pit building is described as having a ’simple yet modern’ design that is environmentally sustainable and meets the Building and Construction Authority’s Green Mark standard.

The world governing body for motorsports, FIA, is expected to confirm the final circuit layout of Singapore’s 5.1 km track this month, Singapore Tourism Board chief executive Lim Neo Chian said yesterday.

When that happens, the Land Transport Authority will start work on constructing and widening roads that will form the street circuit.

‘FIA will also confirm soon whether Singapore will stage a race at night, and in so doing, become the first venue in the F1 calendar to do so,’ said STB’s Mr Lim.

Mr Lim Hng Kiang and STB’s Mr Lim took part in the groundbreaking with Minister of State for Trade and Industry S Iswaran and race promoter and property tycoon Ong Beng Seng.

‘The pit building that will rise from this piece of land we now stand on will be one significant milestone that all will watch closely,’ said Mr Lim Hng Kiang.

‘But besides the infrastructure, what will also be watched closely will be the softer aspects - how Singapore plays host to this international event.’

F1 is part of the government’s efforts to grow tourism into a significant contributor to the economy, he said.

Visitor arrival figures are already breaking records every month. In July there were 951,000 visitors - an increase of 4 per cent from a year earlier.

‘This is the highest number of visitors we have ever received in any single month,’ the minister said. ‘From January to July, a total of 5.883 million people visited Singapore - a 5 per cent increase over the same period last year.’
Source : Business Times - 01 sept 2007

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DC rates hoisted by as much as 112%

DC rates hoisted by as much as 112%
Average rate raised by 58% for non-landed residential use, and 42% for commercial use
By KALPANA RASHIWALA

(SINGAPORE) The government yesterday announced what is possibly the sharpest hikes in development charge (DC) rates, which are payable for enhancing the use of some sites or building bigger projects on them.
The Ministry of National Development (MND) cited the rise in market values as the reason for the increases.

On average, the DC rate for non-landed residential use was raised by 58 per cent and that for commercial use by 42 per cent. The average DC rate was also increased 23 per cent for hotel use, 11 per cent for landed residential use, and 2 per cent for industrial or warehouse use.

But the escalations were much bigger in certain locations - as high as 112.1 per cent for non-landed residential use in the Everton/Spottiswoode Park vicinity and 104.5 per cent for commercial use in the Maxwell Road/Telok Ayer St and Anson Road areas, based on Jones Lang LaSalle’s analysis.

The latest increases, which take effect today, are in addition to the 40 per cent across-the-board appreciation in DC rates announced on July 18 arising from a change in formula for computing DC.

While yesterday’s increases look steep, they did not surprise most market watchers given the substantial appreciation in land values over the past six months.

As to whether the latest hikes will further slow en bloc sales, which have decelerated lately as developers become more cautious about land-banking amid the stock market rout and credit tightening fears, property agents offered a range of views.

Credo Real Estate’s managing director Karamjit Singh estimates that probably only about 20 to 30 per cent of all collective sale sites have substantial DC components amounting to 10 per cent or more of total land value. ‘For many of these sites with high DC component, the increase may have been anticipated and priced in, so things can move on. For those that haven’t, their progress for an en bloc sale could be affected if owners are unwilling to lower their price expectations.’

Jones Lang LaSalle’s regional director and head of investments Lui Seng Fatt too said: ‘Despite the stellar increases in DC rates, the impact of the DC hike on en bloc residential developments remains marginal on most sites, especially freehold sites. Some leasehold sites with substantial DC components, however, may feel the heat.’

CB Richard Ellis executive director Li Hiaw Ho said the hikes will to ‘a small extent, slow down collective sales’. ‘Coupled with homeowners’ expectations of high prices for their properties, developers might not be as aggressive in acquiring sites,’ he added.

Colliers International’s director for research and consultancy Tay Huey Ying said two rounds of DC hikes in July and September, and global credit tightening, will likely lead to more cautious bidding by developers and more realistic price expectations by sellers.

Ms Tay said that increases in land prices may not be as phenomenal in the coming six months compared with the past six months. ‘But demand for development land should stay healthy as the end-market for residential property is expected to remain healthy on the back of strong economic prospects,’ she added.

Analysts noted that in any case, the supply of collective sale sites will slow due to impending changes to en bloc sale rules requiring more safeguards and procedures.

DC is specified according to use groups and is listed by 118 geographical sectors or locations across Singapore.

The 112 per cent hike in non-landed residential DC rates in the Everton/Spottiswoode Park area was attributed by most analysts to the Spottiswoode Apartment and Oakswood Heights collective sales in April and June at $732 psf per plot ratio and $740 psf ppr respectively - more than twice the land value of $307 psf ppr implied by the July ‘07 DC rate for the location.

And the DC rate hikes of 107.5 per cent each in the Newton/Surrey/Lincoln roads and River Valley/Jalan Mutiara areas were attributed to the collective sales of Lincoln Lodge for $1,449 psf ppr, and Bishopswalk for $1,544 psf ppr respectively, which are about three times the $492 psf ppr land value implied by the July ‘07 DC rate for the locations.

The Maxwell Road and Anson Road areas topped the increases for commercial use with gains of 104.5 per cent each, likely due to prices achieved at two recent state tenders for commercial sites at Anson Road. The same two locations also recorded the biggest increases in hotel use rates, at 66.7 per cent each, and again, this was probably due to two hotel sites at Gopeng Street and Tras Street sold by the state at significantly higher land values than implied by July DC rates.

As for industrial DC rates, the highest increase of 15.8 per cent was for the Pasir Panjang/Science Park area, followed by 11.1 per cent hikes in 15 other locations including Henderson Industrial Park, Bukit Merah View, Redhill and Hoy Fatt Rd/Alexandra Road, according to JLL’s analysis.

Source : Business Times - 01 sept 2007

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