Atrium @ Orchard could fetch over $1b: analysts - Singapore

Atrium @ Orchard could fetch over $1b: analysts - Singapore

Govt expected to put property up for sale with fresh 99-year lease
By KALPANA RASHIWALA
SINGAPORE Land Authority is putting up The Atrium @ Orchard for sale, BT understands.

Atrium @ Orchard: With 359,000 sq ft of office space and 16,000 sq ft of retail space, it has tenants like HSBC, Barclays, MTV
Market watchers say the property is expected to fetch over $1 billion. They reckon the Orchard Road property, which will be sold with a fresh 99-year lease, could fetch up to $3,000 psf of net lettable area (NLA).

At $1 billion, the price works out to $2,667 psf based on the building’s NLA of about 375,000 sq ft. ‘I think it can fetch anything from $2,500 to $3,000 psf. The building has big-name tenants like Temasek, HSBC, Barclays and MTV, good-sized floor plates plus a prime location above Dhoby Ghaut MRT Station,’ one market observer said.

BT understands that agents were recently approached by SLA to handle the sale of the property, and it is believed that CB Richard Ellis has been selected for the job.

Most of the space in the building, which has two blocks, of 10 storeys and six storeys, is for offices but there is also some retail space. The building was completed in 2002 when Singapore was still experiencing a glut in office space.

The Atrium @ Orchard was built by the Land Transport Authority as a model planning project integrating land use and town and transport planning, and handed to SLA for management on behalf of the state.

The development has about 359,000 sq ft of office space and 16,000 sq ft of retail space, according to an earlier report in The Straits Times.

Market watchers expect The Atrium to attract strong demand from overseas as well as local real estate investors. Interest in Singapore’s office market, which is currently experiencing a supply crunch and soaring rents, has been sizzling.

In August, a Goldman Sachs real estate fund bought the leasehold Chevron House at Raffles Place for $730 million or a record $2,780 psf of NLA. Goldman Sachs group is also said to be finalising a deal to buy the next door Hitachi Tower, a 37-storey office tower on a 999-year leasehold site facing Collyer Quay, at about $3,000 psf.

Another major overseas investor in the local office market is Macquarie Global Property Advisors (MGPA). In September, it put in a record bid of $2.02 billion, or $1,409 psf of potential gross floor area, for a 99-year leasehold site slated for a mostly-office development behind the One Shenton project.

In March, an MGPA fund bought Temasek Tower in the Anson Road area for $1.04 billion or $1,550 psf of NLA. Later, MGPA sold 12 floors at Springleaf Tower, also in the Anson Road area, for $225 million to a unit of German pension fund manager SEB, making a neat profit as it had bought the floors for $134 million only in January.

SEB also bought SIA Building in April for about $526 million or $1,783 psf from TSO Investment, a fully-owned subsidiary of a property fund managed by CLSA Capital Partners. TSO had purchased the office block from Singapore Airlines in June last year for $343.88 million or about $1,165 psf.

Source : Business Times - 01 Nov 2007

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Two 99-year Singapore sites up for collective sale

Two 99-year Singapore sites up for collective sale

Chancery Court, Thomson View tenders likely to close in early Dec
By KALPANA RASHIWALA

(SINGAPORE) Chancery Court and Thomson View Condo, both 99-year leasehold properties, are being put up for collective sale, with respective guide prices of $468 million and $550 million.

For sale: Chancery Court, a privatised HUDC estate along Dunearn Road, has been launched for tender with a guide price of $468 million
Chancery Court, a privatised HUDC estate on a choice location along Dunearn Road, has been launched for tender.

The guide price of $468 million indicated by its marketing agent CB Richard Ellis works out to about $1,614 per square foot of potential gross floor area inclusive of two payments to the state.

These are a differential premium of about $65.5 million (for intensifying the site’s use) and a lease upgrading premium of $52 million for topping up the site’s lease to 99 years from a remaining term of about 73 years.

The breakeven cost for a new condo on the site will work out to around $2,075 psf based on the guide price, according to CBRE.

Chancery Court has a 259,137 square feet land area and can be redeveloped into a new condo with about 242 units with an average size of 1,500 sq ft. Chancery Court, which is near Anglo-Chinese School (Barker Road), is designated a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a five-storey height limit.

Owners controlling more than 87 per cent of share values in the development have signed the collective sale agreement, before the latest en bloc legislation kicked in on Oct 4. Chancery Court’s tender closes on Dec 5.

Thomson View Condo, along Upper Thomson Road, is being marketed by First Tree Properties and Huttons Real Estate. The indicative price for the 540,314 sq ft site is $550 million, which works out to $652 psf per plot ratio inclusive of an estimated differential premium of $110 million and a lease-upgrading premium of about $80 million. First Tree managing director Alvin Er said that it may be possible to amalgamate the site with a strip of state land of about 39,000 sq ft along Bright Hill Drive subject to approval for its sale by the authorities.

‘If this is allowed, then the total unit land price to the buyer of Thomson View will be lowered to $620 psf ppr,’ he said.

The Thomson View site is designated for residential use with a 2.1 plot ratio and 24-storey maximum height. The plot can be redeveloped into a new condo with about 950 units averaging 1,200 sq ft. ‘Because the property is on elevated ground, the new project will boast 270-degree views of MacRitchie Reservoir, surrounding nature reserve as well as Singapore Island Country Club,’ Mr Er said.

Thomson View’s collective sale agreement has received approval from owners controlling at least 82 per cent of share values before the new en bloc laws kicked in. The tender is expected to be launched next week and is likely to close in early December, Mr Er added.
Source : Business Times - 01 Nov 2007

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Brisk sales at newly-launched suburban projects - Singapore

Brisk sales at newly-launched suburban projects - Singapore

Analysts looking to see effect of scrapping of deferred payment
By ARTHUR SIM
UIC Ltd is launching its 192-unit Park Natura development across from Bukit Batok Nature Park, and market watchers will be eager to see how sales will be affected by the US sub-prime mortgage crisis or by the withdrawal of the deferred payment scheme (DPS).
Park Natura: More than 100 units have been sold, priced at an average of $1,000 psf
So far, sales look good. Priced at the higher end for a suburban condominium at an average of $1,000 psf, more than 100 units have already been sold at the private soft launch. UIC group general manager Vito Koh said: ‘The demand shows that the pricing is right.’

Mr Koh said he did not have a breakdown of the profile of buyers but added that Park Natura was not the type of development to attract speculators.

UIC received approval to offer deferred payment to buyers before the end of the DPS, but whether this alone is attracting buyers is hard to say.

Still, Mr Koh said that the withdrawal of DPS from future developments could affect buyers’ confidence, especially for HDB upgraders hoping to enter the private property market.

Mr Koh also pointed out that the withdrawal of the DPS has come at a time when prices in the high-end segment appeared to have levelled off. ‘Market prices have already adjusted themselves so withdrawing DPS is not necessary,’ he said.

Another development that was recently launched is the CGH Group’s 72-unit Esta Ruby in the Katong area. Already, 25 per cent of the units have been sold at an average price of $1,160 psf.

CGH sales director Alex Chng said that recent events have affected the property market, with some potential buyers changing their minds. ‘But our feeling is that the buyers are still there.’ The good news seems to be that more foreigners and Singapore permanent residents appear to be buying units in suburban developments.

At Esta Ruby, Mr Chng estimated that 30 to 40 per cent of the buyers were non-Singaporean. ‘What is interesting is that the buyers are mainly from China, Indonesia and even Vietnam,’ he added. The remaining buyers are mainly those displaced by en-bloc sales, with 20 to 30 per cent of buyers being HDB upgraders.

Another development that has been selling through private previews is the 196-unit Aalto in the East Coast by Hong Leong Holdings. Units there are also selling fast with about 60 per cent - about 120 units - sold so far.

A spokesman for Hong Leong also said that transacted prices ranged from $1,500 to more than $2,500, or roughly the transacted prices for new developments in the area even before the US sub-prime mortgage crisis.

Source : Business Times - 01 Nov 2007

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Banks lend big for property and share investments - Singapore

Banks lend big for property and share investments - Singapore

Share financing grows a thumping 74.8% over the year
By CONRAD TAN

(SINGAPORE) Bank loans to the property sector in September grew at the fastest annual pace in nearly eight years, according to new data released yesterday.

Booming: Loans to the broad property sector hit $102.4b at end-September
Meanwhile, lending by banks to individuals to buy shares rebounded to its highest level since end-July, when the recent financial market turmoil started, the latest estimates from the Monetary Authority of Singapore (MAS) show.

‘All these reflect the robust growth of the domestic economy,’ said CIMB economist Song Seng Wun.

Loans to the broad property sector, which comprises consumer home loans and business loans to the building and construction industry, reached $102.4 billion at end-September - up 15.1 per cent from a year ago.

The year-on-year expansion was the largest since October 1999, when property-related lending grew by 19.5 per cent, said Mr Song.
After the jitters of August, the market sort of bounced back. Since then both property lending and share financing have been growing very rapidly.

- CIMB economist Song Seng Wun

Over the month of September, property-related loans grew 2.4 per cent from end-August, the fastest monthly pace since May last year. The property-related loans make up nearly half of all outstanding bank loans.

The MAS data also shows that share financing grew 74.8 per cent over the year to $1.26 billion at end-September - the highest since end-July, when it hit $1.42 billion.

The year-on-year growth in share financing is by far the fastest among all consumer loan segments, although it is still the smallest segment, accounting for just 1.2 per cent of total consumer loans.

Over the month, share financing grew 7.1 per cent, reversing a 17.2 per cent fall in August, when financial markets worldwide were rocked by the collapse of several hedge funds and widespread uncertainty stemming from problems in the US mortgage market.

‘After the jitters of August, the market sort of bounced back,’ said Mr Song. Since then, ‘both property lending and share financing have been growing very rapidly’.

Total customer deposits grew 22 per cent over the year to $308.7 billion at end-September, while total loans grew just 12.8 per cent to $218.7 billion.

But while deposit growth continued to outpace loans growth on a year-on-year basis, monthly growth in loans has exceeded that of deposits since June.

Overall, loans to businesses grew at a faster pace than consumer loans, both on a monthly basis and when compared to a year ago.

Loans to businesses grew 15.1 per cent over the year and 2.7 per cent over the month to $117 billion - just over half of total bank loans at end-September.

Among the business sectors, loans to the transport, storage and communications industry showed the fastest year-on-year growth at 36.6 per cent, followed by loans to the building and construction industry, which grew 21.2 per cent.

Meanwhile, consumer loans expanded 10.1 per cent over the year and 1.8 per cent over the month to $101.7 billion. Next to share financing, credit card debt grew the fastest among consumer loans over the year, rising 13 per cent to $4.3 billion.

Source : Business Times - 01 Nov 2007

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Companies call for relaxation of rules on hiring foreign workers - Singapore

Companies call for relaxation of rules on hiring foreign workers - Singapore

SOME companies here want the Government to relax the foreign-worker quota and allow them to recruit more workers from non-traditional sources.
Singapore National Employers Federation executive director Koh Juan Kiat made this point yesterday, when he revealed that hotels, restaurants, and the retail and transport sectors were finding it increasingly hard to recruit foreign workers from ‘traditional sources’ - typically countries in the region.

The reason: The economies there are also booming and need workers.

Mr Koh said: ‘Some companies are hoping the foreign manpower policy may be retuned to take into account the quota and sources of supplies.’

The Straits Times understands these companies may want to recruit workers from China and India, but the Manpower Ministry places restrictions on these sources.

Companies here, depending on their sector, have to keep to certain quotas of foreign workers in relation to local hires. On top of that, they are also limited in their sources of foreign workers.

For instance, service-sector firms can hire work-permit holders for up to 45 per cent of their total workforce, but China workers can make up only 5 per cent of the 45 per cent.

And while they can hire workers from Malaysia and South Korea, India is not on the list of approved countries.

Manpower Minister Ng Eng Hen said last Friday that Singapore was coping since the Government eased the rules on foreign workers this year. It had raised the quota for the construction sector among other changes, but projections show demand for workers will grow further.

Asked yesterday at a work safety event whether Singapore could handle the influx of foreigners, Dr Ng said the Government can take the lead to help people here gel.

But each Singaporean, together with communities in the constituencies and in workplaces, will have to do his part, he said.

Source : Straits Times - 01 Nov 2007

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