Why church inked Buona Vista mega-property deal

Why church inked Buona Vista mega-property deal
60-year rental: $343m

A place of its own: $280m

By Nur Dianah Suhaimi
AN ARTIST’S IMPRESSION of the $660m complex with its distinctive shape which is likely to be achieved using titanium. When the complex is ready in 2011, church services would be held at the 5,000-seat auditorium.

TO HEAR Deacon Matthew Kang talk, it makes sense for a church to go into property development.
The church in question is the 23-year-old charismatic New Creation Church. Its Sunday services at Suntec City Mall draw long lines of worshippers that snake round the block.

The property in question, announced last week, is a $660-million lifestyle hub in Buona Vista. The church’s business arm, Rock Productions, is partnering property giant CapitaLand to develop the site.

In an interview with The Sunday Times, Mr Kang, one of the directors of Rock Productions, explained why the church decided to turn property developer in such a big way - the company’s investment in the project comes up to $280 million.

Every month, the church pays Suntec City $477,000 to rent the 1,400-seat auditorium, where it holds its services, and a convention hall to accommodate the spillover of worshippers. Its congregation is 16,000-strong.

Mr Kang, a full-time director of financial services at insurance company Manulife Financial, said the rental would add up to $343 million in 60 years’ time.

It thus makes economic sense to invest $280 million in developing its share of the 60-year lease Buona Vista site, which consists of an auditorium, an amphitheatre, an outdoor theatre, two ballrooms and a rooftop function area.

The restaurants, shops, wine bars and dance clubs will be developed by CapitaLand.

When the complex is ready in 2011, services would be held at the 5,000-seat auditorium.

The amount involved is no small sum but Mr Kang, 47, said the church would have no problems ponying up the money.

Even before the foundation has been laid, it already has $100 million in cash to cover 35 per cent of the project cost.

Since the company is projected to make about $60million in profit over the next three years, it is left with $120 million to raise.

Mr Kang, who is married with three children, said: ‘Of course it is possible to raise $120 million. We have faith that people will give.’

According to the church’s financial statements, it received $39.3 million in tithe and offerings in its 2007 financial year.

Rock Productions, set up in 1998 with a paid-up capital of $8 million, is fully funded by the church.

The company is run by a six-member board chaired by church pastor Joseph Prince, 44, who started preaching from a four-room flat in Holland Road.

The board members, who do not receive any salary or dividends from the company, make all the business decisions.

One of its shrewdest was the 2001 purchase of Marine Cove at East Coast Park for $10 million, $4 million below its valuation price, after the previous owner had to sell off assets to pay creditors.

Mr Kang, who readily quotes from the Bible to illustrate the virtues of investing, said: ‘Marine Cove was a great investment. It came with ready, popular tenants such as McDonald’s and the place is always crowded. Even the carpark is making money.’

Profit from Marine Cove came up to $425,388 in the last financial year.

Other religious organisations are also actively involved in business. Sultan Mosque, in Bussorah Street, collects rent from 11 shophouses that were donated to the mosque by members of the public. The Kong Meng San Phor Kark See Monastery earns income from its crematorium.

In 2002, the Methodist Church leased out a 173,800 sqft piece of land in Mount Sophia to Centrepoint Properties for a reported sum of $50 million.

In 2003, the Seventh-Day Adventist Church sold a 13-storey condominium in Irrawady Road for an estimated $21 million.

Mr Kang, referring to the parable about the servant who buried Jesus’ money instead of investing it, said: ‘In today’s context, that is like keeping money under your mattress. Putting money in the bank and earning interest is the last resort.’
Source : Straits Times - 17 sept 2007

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Expats hit by space crunch at international schools here

Expats hit by space crunch at international schools here

Some deterred from coming here as they face long waiting list for kids to enter school
By Sandra Davie, Education Correspondent
HIS name card says ‘real estate agent’. But to many expatriates, Mr Adrian Tan is a relocation expert - helping them find the right home when moving to Singapore.
These days, though, Mr Tan has an added role: A lot of his time is spent helping expats find places for their children in international schools.

Said Mr Tan, 34, who has been in the business for more than a decade: ‘Finding a place in an international school is more difficult than finding a home for some of my clients.’

The crunch is especially bad for preschoolers and lower primary children, who have to wait for as long as six months to a year for a place.

One international school says it has a four-month-old baby on its list who will not be entering the school until 2011.

The booming economy is the major factor for the shortage of places. Many more foreigners have arrived here - the expat population grew from 798,000 in 2005 to 875,500 last year.

It has, in turn, led to a shortage of places at the 40 international schools that operate non-Singaporean education programmes.

At least four international schools are expanding.

The Australian International School is putting up a new building at its Lorong Chuan campus to take in 840 more students next year.

The Canadian International School will open its fourth campus, in Tanjong Katong, this week.

Meanwhile, it is building a central campus in Jurong West to bring students from its three current campuses under one roof.

Two international schools that cater to mostly Indian expats are also planning to start new campuses.

The Global Indian International School, which has close to 4,000 students, is looking into setting up a third campus, while the DPS International School is seeking another new site in the east.

Canadian International School head principal Glenn Odland said the school currently has 200 students on its waiting list. It is the one with the four-month-old baby on its list.

Mr Odland observed that while earlier student applicants were mostly from English-speaking homes, the more recent ones were from countries where English is not the first language.

The school has decided to offer a one-year intensive English programme for students who need to hone their language skills before entering its main programmes.

Australian International School director for marketing and enrolments Kim Douglas said the school’s waiting list is at a historic high, with 400 names on the list so far.

Currently, the school has a total of 1,750 students from 40 countries.

Newly arrived Australian expat Kevin Weatherly, 36, who is still searching for a place for his two daughters, aged eight and 10, felt the shortage problem needs to be addressed - or expats may decide against coming here.

Executive director of the American Chamber of Commerce in Singapore (AmCham) Dom LaVigne thinks it is already happening.

He knows of at least two Americans who did not come here because they could not find a place for their children in international schools.

The problem is serious enough for the AmCham to set up a task force. The chamber reckons that several large companies will be bringing in 2,000 American employees over the next two years.

‘They will require schooling for their children. If not, they will look elsewhere,’ said Mr LaVigne.

Source : Straits Times - 17 sept 2007

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Sales of office units jump amid space crunch

Sales of office units jump amid space crunch

By Fiona Chan

SALES of office units have shot up this year in the face of a crunch in office space here.
An impressive $491.79 million worth of single units in larger office buildings has changed hands since January.

This already outstrips the $386.39 million in deals for the whole of last year, according to new figures from property firm CB Richard Ellis (CBRE), which tracked deals above $5 million.

The price of each unit has also surged. Last year, a record 24 office units were sold, but only 19 have been sold so far this year.

This means that, on average, each of the units sold this year is fetching a much higher price than those sold last year.

Compared with earlier years, this year’s sales look even more impressive. Only $95.21 million in single office deals were done in 2005, and $8.14 million in 2003, said CBRE.

These standalone office spaces, called strata-titled office units in the property industry, are owned by one-off investors or businesses, as opposed to an office block that belongs to a single owner.

Price rises have been dramatic. In buildings such as Suntec City, the prices of strata-titled office units have trebled over the past 18 months, CBRE data showed.

Demand for office space here has been soaring in recent months, pushing up both sale prices and rental levels, as a shortage of prime office buildings coincides with booming investor and business demand.

Due to the limited supply of buildings in the Central Business District (CBD), investor interest has extended to strata-titled office properties in the fringe areas of the CBD, said Mr Jeremy Lake, CBRE’s executive director of investment properties.

‘The rising number of strata-titled office transactions is a logical consequence of a tight office rental market,’ he said. ‘Rather than pay rentals of $12 per sq ft (psf) per month, investors are finding it attractive to buy a unit and cash in on the high rentals.’

The most popular buildings for such deals this year are International Plaza and Suntec City, Mr Lake said.

There were 43 office sales in International Plaza this year, just shy of its 45 deals for the whole of last year.

However, these deals ranged in price from $215,000 to $3.3 million, so they were not captured by CBRE’s analysis of strata office deals above $5 million.

In Suntec City Tower One and Two, seven deals had taken place this year, at prices starting from $4.61 million.

Mr Lake also said the prices of units in these buildings had skyrocketed in the past 18 months. At International Plaza, they jumped from $491 psf in January last year to $1,150 psf in July.

In the same period, prices of units in Suntec City Tower One nearly tripled from $850 psf to $2,200 psf.

In Suntec City Tower Two, prices doubled from $1,148 psf in March last year to $2,360 psf last month, a new high for the tower.

‘Investors’ demand for office units at these buildings has been strong due to the scarcity of this type of medium-sized office space located in the core business districts,’ explained Mr Lake.

He suggested that some buyers of these units could be ’small- and medium-sized businesses’ whose space needs can be met by small office units, unlike multinational companies, which take up entire floors in a single building.

Other buyers could include investors ‘who have pocketed some gains in the stock market and are looking at attractive investment options’, Mr Lake said.

He expects the number of strata-titled office deals above $5 million to hit a new record this year.

Source : Straits Times - 17 sept 2007

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HDB move to cut concrete use pays off

HDB move to cut concrete use pays off
It adopts alternative materials and techniques following Indonesian sand ban
By ARTHUR SIM

STEEL, aluminium and even glass are to be the new concrete for many of the Housing and Development Board’s latest projects.

Using steel instead of concrete to build lift shafts shortens construction time and leads to overall savings by 20%.

Materials and techniques which might not have been cost-effective in the past have become increasingly viable following the rise in the price of concrete caused by January’s ban on exports of sand from Indonesia.

The HDB says that initiatives it has already taken, such as using steel instead of concrete to construct lift shafts, have already achieved positive results.

The HDB told BT that using steel in a conventional 12-storey block has reduced the amount of concrete needed for lift shafts by 90 per cent. ‘This leads to an overall cost savings of about 20 per cent and a shortening of construction time by 20 per cent,’ a board spokesman said.

A conventional 12-storey concrete lift shaft can require up to 90 cubic metres of concrete.

This new method of construction was piloted in projects in Yishun, Jurong East and Marsiling and the HDB says that since April, use of the technique has been extended. Another upside of the new method is that an additional 250 blocks which previously exceeded the budget for the Lift Upgrading Programme now become eligible.
Following the sand ban, the HDB - probably Singapore’s biggest developer - said that it would try to cut the use of sand by as much as 30 per cent. By volume, sand is the main ingredient of concrete.

‘While engineers work towards economising on materials and designs, architects will continue to ensure that the outcome retains its desired aesthetics and functionality,’ said the HDB.

Building layouts and structures are being fine-tuned to optimise concrete usage. But some of the new architecture-led initiatives include the simple tweaking of previous HDB design guidelines.

One new idea involves providing much larger glass windows. The HDB has been providing bay windows in flats since 2004. ‘Taking this a step further to improve economy and reduce sand use, we now provide three-quarter and full-height glass windows for bedrooms and living rooms respectively,’ the board said.

Other simple solutions include changing the design of concrete parapets along corridors. Since 2000, most parapets have been built using perforated aluminium panels. HDB says that all HDB buildings tendered from June onwards will have parapets designed with slits or perforations to reduce the concrete use - or simply have metal parapets.

Other solutions involve replacing concrete designs with metal ones. For new shelters and linkways, HDB plans to use steel columns instead of concrete.

Modular steel ramps were tried out at Woodlands Street 83 and will be introduced to more HDB estates in line with its Barrier Free Access initiative.

The HDB said: ‘As the industry exploits new materials, methods and technology in our move towards sustainable construction, we believe home buyers will also grow more receptive to the use of these new materials and designs.’
Source : Business Times - 17 sept 2007

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Drop in subsales points to more stable prices ahead

Drop in subsales points to more stable prices ahead
Speculation window seen closing, with prices in high-end sector peaking
By ARTHUR SIM
(SINGAPORE) The number of property subsales - an indicator of speculative activity - appears to be stabilising, possibly even falling.
Orchard Residences: Most expensive property in Singapore at $5,500 psf
Some industry players even believe that this could mark the beginning of more stable prices in the months to come.

Official property statistics for the third quarter will not be out until next month but monthly figures tabulated by CB Richard Ellis show a surprising dip in the number of subsales between the months of June and July.

The July figures will be updated in time but the drop is still likely to be an estimated 5-10 per cent. This comes after numbers that have been rising consistently for the three months in the second quarter of 2007.

One explanation for this could be that the window of opportunity for speculators is closing, with prices in the high-end sector peaking.

CB Richard Ellis executive director Li Hiaw Ho said: ‘If you don’t have sharp increases in prices, you don’t have property speculation.’

Speculators could also be discouraged by the volatility in the global markets. ‘Because of the sub-prime crisis, a lot of buyers are exercising caution,’ said Mr Li.

Another indication that speculators could be cooling off is that the number of returned options to buy new condos also appears to be dropping.

In January, the high-profile launch of One Shenton attracted many punters hoping to flip units before exercising their options. And even though it was fully booked within days of the launch, industry watchers believe that as much as 15-25 per cent of the options were returned in the following months when speculators failed to get their target prices.

Since then, there have been several more high-profile launches. Among the most notable ones were Orchard Residences - which has since set the record for the most expensive property in Singapore at $5,500 psf - and Scotts Square.

Both developers declined to reveal the number of options returned. But persistent talk in the market has it that ‘many’ options were returned for Scotts Square.

A source said that the figure was closer to about 5-10 per cent, which in comparison is perhaps not as high as might be expected for such a prime location.

CapitaLand’s Seafront on Meyer was launched in Q2 and saw queues of buyers forming at its showflat. Now 80 per cent sold, CapitaLand said that only 3 per cent of the options were not exercised.

One Rochester, another hot property launched in Q2, also saw queues at its showflat. Developer United Engineers Ltd (UEL) said that it was surprised that only 10 per cent of the options for the fully sold condo were returned.

UEL CEO and group managing director Jackson Yap said: ‘Initially, we had some concerns about the number of returned units as the option period coincided with the sub-prime crisis. We are rather happy that the number of returned units eventually stabilised at 10 per cent, which reflects a high proportion of genuine buyers who are confident of the strong fundamentals of the development.’

Speculators are very much a part of the market and do actually have a function as they help set the threshold prices that buyers are willing to pay.

UEL’s Mr Yap added: ‘We are in no urgency to sell the returned units, although there is a waiting list of genuine buyers, in this current market. We have more than covered our costs through the rest of the sales, and feel there is a need to protect the selling prices for a high-quality development like ours.’

One Rochester was sold at a price ranging between $900 psf and $1,600 psf. Whether these prices will go up could depend on how gung-ho speculators will be in the coming months.

The Soleil at Novena was launched last month and is almost fully sold. Developer UOL said that to-date, 42 per cent of its buyers have exercised their options. The remaining 58 per cent have until the end of the month to exercise theirs.

Source : Business Times - 17 sept 2007

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