Singapore Retail boom drives luxury brands to expand stores

Singapore Retail boom drives luxury brands to expand stores

Louis Vuitton and Chanel will double size of outlets in Takashimaya as mall adds more luxury labels

By Nicholas Fang & Kua Zhen Yang
SINGAPORE’S booming retail market has led luxury brands Louis Vuitton and Chanel to double the size of their flagship stores in Takashimaya Shopping Centre.
And in a move that will bring even more cheer to fans of high-end fashion, the mall has also revamped and repositioned its second level to feature more top international brands such as Van Cleef & Arpels and La Perla.

Toshin Development Company, a Takashimaya subsidiary that manages speciality luxury shops in the mall, said yesterday that Louis Vuitton and Chanel will expand their ground-floor stores into two-storey duplexes.

Louis Vuitton, which occupies 5,200 sq ft, will double its size to close to 10,500 sq ft by mid-2009. Its duplex will face Orchard Road and is expected to be completely renovated with a new concept featuring the latest in facade design and interior design elements.

Chanel’s sole flagship outlet in Singapore takes up 3,600 sq ft on Takashimaya’s ground floor but this will be expanded to more than 7,000 sq ft by late 2010 or early 2011. This duplex will also face Orchard Road and undergo a complete renovation.

Fashion brand Hugo Boss is consolidating its 2,600 sq ft men’s boutique on level one and its 4,600 sq ft women’s and men’s leisure wear store on the third level into a 7,000 sq ft flagship outlet on the first floor.

Jeweller Tiffany & Co will also embark on renovation plans in the middle of next year for its 6,000 sq ft duplex. Tiffany managing director Hew Yee Min said the renovation was in response to ‘high customer traffic and sales revenue’ in recent months, and would include expansion of retail floor space as well as plans to make the area more efficient.

Takashimaya’s revamp of its second level, which has been in the works for more than two years, has now come to fruition with more international brands in fashion, accessories, fine jewellery and watches being featured.

Among some of the top fashion names that have been introduced since April are Marc by Marc Jacobs, Stella McCartney and Chloe.

Also debuting in the mall is Hong Kong-based celebrity hairstylist Kim Robinson, who will open a 5,500 sq ft Kim Robinson Salon on level two.

These changes and expanded retail space for top-end brands came as welcome news to shoppers who were thronging Takashimaya stores yesterday.

When The Straits Times visited the place last night, close to 20 people were queuing outside the Louis Vuitton store, which has a policy restricting the number of shoppers inside at any one time. Mr Stanley Ng, in his early 30s, who was in the queue, said the expansion was to be expected, given the growing spending power of Singapore shoppers and their penchant for luxury wares.

British tourist Annie Ip, in her 40s, applauded the move as it would enhance the shopping experience. She said: ‘It’s definitely a good move. For us shoppers, it will mean more room, and spaciousness.’

While none of the brands would divulge details on sales or customer traffic, a spokesman for Toshin said all the luxury brands in Takashimaya had experienced ’strong double-digit growth’ in the past few years.

‘The economy here is doing well and people are just spending more. At the same time, Singapore is fast gaining a reputation as a luxury goods centre in this region,’ she said.

She added that feedback from customers about the revamped second floor offerings had been positive, with traffic having surged 30 per cent since April, when the first of the new stores were opened. She declined to disclose rental rates in the mall.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said current monthly rental rates could reach $70 psf for prime ground floor units, up from $60 psf last year.

Source : Straits Times - 19 Dec 2007

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Singapore Temasek fights anti-trust ruling in court

Singapore Temasek fights anti-trust ruling in court

By Gabriel Chen

TEMASEK Holdings has filed an appeal against a ruling by Indonesia’s competition watchdog that said the investment company broke anti-trust laws.
Temasek’s managing director of corporate affairs, Ms Myrna Thomas, said in a statement: ‘The case against Temasek is baseless and totally without merit. We’re filing an appeal to demonstrate that there is no basis for the decision and to ensure that Temasek’s legal rights under the laws of Indonesia are respected at all times.’

The appeal was filed with the District Court of Central Jakarta yesterday with a ruling expected within 30 days.

Last month, Indonesia’s Business Competition Supervisory Commission (KPPU) ruled that Temasek had violated anti-monopoly laws and ordered it to sell its shares in one of the two top Indonesian mobile telcos.

Temasek’s interests in the telcos are held indirectly. SingTel, in which Temasek holds a 56 per cent stake, has a 35 per cent slice of PT Telekomunikasi Selular.

Asia Mobile Holdings (AMH) is 75 per cent owned by Temasek Holdings unit Singapore Technologies Telemedia (STT) and 25 per cent by Qatar Telecom. AMH owns a stake of about 40 per cent in Indosat.

Temasek’s Indonesian legal counsel, Mr Todung Mulya Lubis, said the KPPU has ignored overwhelming evidence that supports Temasek’s defence and has offered no explanation for disregarding the evidence.

The KPPU began investigating Temasek in April, six months after an Indonesian labour union filed a complaint alleging that Temasek had violated anti-monopoly laws.

Although the union later withdrew the complaint, the KPPU continued its investigations.

‘We are confident that the Indonesian telecommunications market is, and remains, highly competitive and our evidence overwhelmingly supports this decision,’ Ms Thomas said.

‘Temasek Holdings calls for a fair and just decision by the District Court, one that is based on the evidence and merits of the case.’

Source : Straits Times - 19 Dec 2007

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5,000 apply for 316 Singapore flats

5,000 apply for 316 Singapore flats

PUNGGOL, SENGKANG,HOUGANG SEE UNPRECEDENTED DEMAND

By Jessica Cheam

OVERWHELMING demand for the latest batch of new Housing Board (HDB) flats suggests newlyweds are now looking at outlying estates they once shunned.
A total of 5,147 applications had been made yesterday by the close of the HDB’s latest sale of just 316 flats in the far-flung areas of Hougang, Punggol and Sengkang.

That is 16 would-be buyers for every flat - a big jump in demand since June when 922 flats in the same areas attracted 3,955 applicants, or about four buyers for every flat.

Market watchers say only mature estates used to experience such high demand.

But the latest figures suggest new trends in which couples are turning increasingly to new HDB flats as resale prices rise - and to estates further away from the city.

The August and October sale of flats in established towns, and in the north and west zones, saw a 100 per cent take-up rate for the first time, the HDB said last week.

Earlier this year, applications for mature towns such as Bukit Merah were seven to 13 times the flats offered, while in newer estates such as Sengkang, this number was a lower 1.8 to 4.7 times, said the HDB in answer to queries from The Straits Times.

Housing experts The Straits Times spoke to said the limited flat supply means couples cannot afford to be too picky as competition is tough.

Associate Professor Tu Yong of the National University of Singapore’s department of real estate said the buoyant economy is fuelling demand as more people get married.

The booming HDB resale market has priced homes out of reach of many buyers, so it is no surprise more people are turning to new, cheaper flats.

Resale home prices grew by 11 per cent in the first nine months of this year.

The HDB’s latest sale offers flats from $142,000 for a four-room flat in Hougang where the median price is $250,500 in the resale market, and from $278,000 for an executive flat in Sengkang compared to $346,000 for a resale unit.

New flats can be paid for with Central Provident Fund monies or a home loan, unlike in the resale market where couples typically have to fork out cash to get a flat. Typically too, the more established the town, the higher the sum of cash needed upfront.

The problems faced by newlyweds in finding homes was flagged in Parliament last month by Aljunied GRC MP Cynthia Phua, who said she gets appeals from distressed couples every week.

IT consultant Goh Jhin Hin, 29, has tried to get a flat nine times in the past year - and rejects the notion that couples are too choosy.

He has applied for a range of locations from Toa Payoh to Sengkang - all without success. ‘Getting a flat now is like gambling - it all depends on your luck,’ he said.

Last month, National Development Minister Mah Bow Tan said the HDB will offer 7,000 new flats in the next seven months. He also urged newlyweds not to be too choosy, adding that it was not realistic ‘for the HDB to offer only new flats in mature estates in the heart of the city’.

First-timer Leonard Tan, 27, widened his net and got lucky. He bagged a Bukit Panjang executive flat earlier this year, after failing to get his dream Ang Mo Kio home.

Property agency PropNex’s chief, Mr Mohamed Ismail, said outlying, less mature estates such as Punggol and Sengkang are now seen as more attractive by young couples - hence the higher demand.

Mr Goh said build-to-order flats - which are built only if a certain level of demand is reached - are not a solution for him as the flats will be ready only in four to five years time.
Source : Straits Times - 19 Dec 2007

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Investing tricks of the wealthy

Investing tricks of the wealthy

Average investors can apply the same techniques to their own investments, no matter the size of their portfolio
By BEN FOK
RECENTLY, I asked a wealth manager whether an average investor can make more money by mimicking the investment strategies of the rich. He answered: not really. Later he explained that the rich invest differently because, well, they’re different. They can take more risks because they have more money to lose. Furthermore, they can speculate and have a short-term view because losing money is not a problem for them.

Patience is virtue: Great investors like Warren Buffett always invest in the long term. He held on to his investment in Washington Post for 33 years
Well, I do not totally agree with his opinion. For the past few years, I have been advising wealthy people on their financial well-being. As a financial adviser, my job is to help these rich clients search for financial services who meet their needs. Throughout my interaction with them, I have gained an insight into how they accumulate wealth.

I can tell that the rich don’t necessarily have any special insights into which stocks or assets are going to soar. But what they do have is the confidence to apply a disciplined and systematic approach to managing their money. They have the habit of applying common sense to each investment opportunity facing them. Even though the interests of wealthy investors are not always necessarily aligned with those of the average investor, there are a number of principles and strategies employed by wealthy investors that do apply to virtually anyone who seeks to invest for the future.

It is a common fact that most financial textbooks teach us that in order to build wealth we need diversification, wealth preservation and strategic growth. To me, this not an accurate statement in itself because two of those strategies - diversification and preservation - don’t help to build wealth. Perhaps the rich use these two strategies to maintain wealth.

After they have accumulated great wealth, they didn’t use the strategies during the accumulation phase and they tend to preserve the wealth they have built. Yet average investors have not yet reached the ranks of the financially independent, so they are generally more concerned about investment growth and losses. The wealthy, as a general rule, do not have this concern. At the same time, they also learn how to avoid taxes legally so that they can keep their money working for them and learn how to pass their assets on to the future generations without the government taking a huge part of what they spent their lives building.

Another common perception is that the rich take more risk, therefore they accumulate wealth faster. However, the truth is that the majority of rich people do not build their fortunes by speculating on high-risk investments as is commonly believed. My experience tells me that the rich do not heavily rely on high-risk investment vehicles like hedge funds or venture capital funds but are moderate risk takers who put more than half of their money into listed securities and keep a large amount as cash. The reason for this is that they have so much money that even if they do not meet their goals for investment growth, it would not be bad news to them; however losing their financial independence would be devastating.

So how do the rich invest? Unlike the average investor, the rich think long term in most of their investment strategies. They believe that there is power in long-term thinking and many of them make it habit of doing so. Great investors like Warren Buffett - his successes in investment include Washington Post Co, where Berkshire invested US$11 million in 1973 and which investment was worth US$1.3 billion at the end of 2006. That is 33 years of holding power which demonstrates his investment philosophy - always invest for the long term. Hence, most rich do not engage in short-term speculation but have a long-term goal in mind.

However, the rich make use of risk by taking advantage of risk. They often build fortunes using volatile assets and investments but that does not mean they were engaging in risky behaviour. They understand the risk and embrace risk because they know it always brings an opportunity for growth; however, the average investor is fearful of risk. Nevertheless, taking risk for the rich does not mean taking a shot in the dark. The rich take calculated risk that means to gain knowledge first and to consider the consequences of failing before taking action. The rich overcome fear with knowledge as knowledge can cause fear to fade away.

The rich also demand value for their money. Otherwise, how do you think they got to be rich in the first place? Value to them is buying assets at a discount to its intrinsic value. So for them the right time to buy is when there is weakness in the market. They buy when others are despondently selling and sell when others are greedily buying. This requires the greatest fortitude but also has the greatest rewards. This bargain-hunting approach to buying value will enable them to buy quality assets at reasonable prices. So they buy when there is bad news and sell on good news. For instance, some of the wealthy invest because they understand that the weakness is only temporary, and the stock price had fully priced in negative news and it was time for them to hunt for bargains again.

If we look back at the Singapore stock market, there are many opportunities for investors to bargain hunt and buy on bad news, e.g. the Asian financial crisis in 1997/98, the Sept 11 terrorist attack and SARS. The rich take advantage of these negative events to buy assets, whether in real estate or stocks and that’s where value can be found. However, the average investor will seek to sell and get out of a bear market fearing that the asset will fall in value.

To the rich, probably now is the best time to sell and get out of the market, where all assets prices have gone up in value. Over the past years, we have very good reports about our economic growth and all the good news are now factored into the stock price, so for the rich it’s time to sell.

Another investing secret of the rich is that they approach investing like a business. They set up a business plan, establish annual targets, then analyse the results and they have reasonable expectation. At the end of the day what they want to achieve is increasing their net worth and not their income. The rich truly understand the meaning of working smart not working hard: to focus on growing your net worth is working smart but working for an income is working hard. As their net worth grows, they do not increase their spending, instead they increase their investment. By repeating this over the years, once their net worth is built to a certain level, they are free to do what they want. Hence, to increase your net worth you need patience, knowledge, and wisdom.

Often they are not willing to pay more for investment services simply because they find a particular adviser to be charming or knowledgeable. Nor do they chase after the hottest manager or the most publicised fund. Instead, they go shopping for the best combination of reasonable fees and consistently good performance. However, they will pay for advice from people who have specialised knowledge in a field they need to learn about. They don’t believe in free advice as it can often be the most expensive advice.

As you can see, most investing secrets of the rich are nothing more than a combination of basic common sense and knowledge. The difference between the rich and the average investor is that they have the self-confidence to stick to the basics and to find out what they need to know. They don’t get caught up in the theory of the week or the trend of the month. It’s an approach that’s easy to articulate but difficult to follow.

However, average investors can learn important lessons from the wealthy, specifically the need to manage both risk and their own investment expectations. The failure to match expectations to the risk an investor is willing to take can result in frequent switching among investments, or even worse. Now the good news for the average investor is that you can apply many of the same techniques to your own investments, no matter how big or small your portfolio is.

Source : Business Times - 19 Dec 2007

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Chip Eng Seng makes top bid for Pasir Ris HDB site

Chip Eng Seng makes top bid for Pasir Ris HDB site
99-yr leasehold plot can be developed into a condo with about 380 units
By UMA SHANKARI

CHIP Eng Seng has emerged as the top bidder for a condominium site at Pasir Ris, HDB said yesterday.

The 99-year leasehold site on Bernam Street/Tanjong Pagar Road and next to Amara Hotel, has a land area of some 49,125 sq ft and a maximum gross floor area of 288,860 sq ft.
The developer beat two other bidders with its offer of some $104.0 million - or $228 per square foot per plot ratio (psf ppr) - for the 152,054 sq ft site on Elias Road.

The bid was slightly lower than the $260-$300 psf ppr analysts expected the site to fetch when it was launched in late October.

Ku Swee Yong, director of marketing and business development at Savills Singapore, said that the price offered by Chip Eng Seng was ‘reasonable’.

‘The launch price should start around $650 psf,’ said Mr Ku. ‘We anticipate strong demand for the project given the growing demand for mass-market homes.’

Analysts expect prices of mass-market homes to climb about 15 per cent next year on the back of strong demand - outstripping the price performance in the high-end residential segment, where home prices are expected to increase by less than 10 per cent.

Chip Eng Seng’s bid was just 4 per cent higher than the second highest bid of $100.4 million - or $220 psf ppr - put in by GuocoLand. The developer’s bid was also 12 per cent higher than the lowest bid of $93.0 million - or $204 psf ppr - from the Sim Lian Group.

Experts said that the 99-year leasehold site can be developed into a condominium with about 380 units averaging 1,200 sq ft.

Separately, the Urban Redevelopment Authority (URA) said that a hotel site on the government’s reserve list is now open for application.

The 99-year leasehold site on Bernam Street/Tanjong Pagar Road and next to Amara Hotel, has a land area of some 49,125 sq ft and a maximum gross floor area of 288,860 sq ft. The maximum building height is 35 storeys.

The site is one of the four new hotel sites which are scheduled to be released for application on the reserve list in the government’s land sales programme for the second half of 2007.

Under the reserve list system, a site is only offered for public tender if the government receives an application from a developer who commits to bid for the site at a price which is deemed acceptable.

The site in Tanjong Pagar is an attractive location for a new hotel as established hotels are found there, said URA.
Source : Business Times - 19 Dec 2007

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Singapore becoming a magnet for the world’s wealthy

Singapore becoming a magnet for the world’s wealthy

Non-residents’ deposits rise, fuelled by strong S$, private banking drive
By SIOW LI SEN
(SINGAPORE) As wealth from across the globe seeks new homes, a growing chunk is finding its way to Singapore. In fact, more rich people who live elsewhere have decided to let their money reside in the Republic.
According to the Monetary Authority of Singapore, deposits by non-residents grew 46 per cent to almost $30 billion at end-October from a year ago. This is almost three times the $10.6 billion parked here in 2002.

Singapore’s strong fundamentals and its growing reputation as a private banking hub have obviously proved to be a strong magnet. Most of the money - $20.4 billion - is in longer-term fixed deposits. The rest is in short-term demand deposits and savings and other deposits.

Domestic resident deposits were up a more sedate 20 per cent at $232 billion in October.

Bankers and economists say that Singapore’s efforts to be a private banking hub are paying off. Much of the money piling up here is from rich individuals in the region, the Middle East and even as far away as Russia, they say.

Standard Chartered Private Bank this year became the first international bank to make Singapore its global private banking headquarters.

More boutique private banks are also setting up shop here. Lombard Odier Darier Hentsch, a Geneva-based institution with a history going back more than 200 years will open a Singapore office next month. Its target clients are predominantly family entrepreneurs from Singapore, Malaysia, Indonesia, Brunei and Thailand.

‘It shows that people are comfortable putting money in Singapore,’ said Citigroup economist Chua Hak Bin. In addition, an explicit policy change towards steeper appreciation of the Singapore dollar has led many private bankers to recommend that clients hold more Sing dollars, he said. The forecast is for the Sing dollar to rise about 5 per cent against the US unit by the end of 2008.

‘It has become a store of value, and it has helped that interest rates have not come off despite the Fed cuts,’ Dr Chua said.

The US Federal Reserve this month cut interest rates. But interest rates globally, including Singapore, did not slide because of a continued liquidity squeeze in the credit markets.

Singapore’s economic fundamentals, well-regulated markets and stable currency are also attractive for wealthy entrepreneurs.

Standard Chartered economist Alvin Liew believes much of the increase in non-resident deposits here is from the growing ranks of wealthy individuals and the level of wealth in the non-Western world, from Asia to Middle East to Eastern Europe.

Standard Chartered global head of private bank Peter Flavel said: ‘From our research, the majority of wealth is in cash or near cash, and a lot of wealth created in Asia is relatively recent - first or second generation.’

Singapore’s strong regulations, good infrastructure and government support for the wealth management business are magnets, he said. These factors, coupled with an attractive tax environment and a stable currency, have made it a top place to do business. Interest on non-resident funds deposited here is tax-exempt.

Some non-resident deposits could be parked here before the money is invested in property, though some is also used by those betting on the appreciation of the Chinese renminbi.

The Singapore unit is the best proxy for investors betting on renminbi appreciation, according to United Overseas Bank’s head of economics and treasury research, Jimmy Koh.

‘The Sing dollar has the least restrictions and is the most liquid currency in the region,’ he said.
Source : Business Times - 19 Dec 2007

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Singapore Good class bungalow prices surge 40%

Singapore Good class bungalow prices surge 40%

Huge wealth creation, high networth PRs cited for hike; smaller gains likely next year
By KALPANA RASHIWALA

(SINGAPORE) The demand for gracious bungalow living is chugging along quite nicely.
In fact, average prices of Good Class Bungalows (GCBs) are expected to appreciate by about 10 to 15 per cent next year. This appears even more impressive if you consider that this year, they have already climbed by nearly 40 per cent to $710 per square foot of land area.

The expected appreciation could propel the total value of GCB transactions to increase slightly in 2008, although the number of transactions may be slightly lower, Savills Singapore director (Prestige Homes) Steven Ming predicts.

The first 11 months of this year saw a total of 96 GCB transactions adding up to $1.28 billion. The value is an all-time record and has surpassed slightly the $1.24 billion achieved for the whole of last year. However, the number of GCB transactions from January to November this year is still shy of the 118 for the whole of 2006, according to an analysis by Savills Singapore based on caveats data from Urban Redevelopment Authority’s Realis system.

‘I don’t expect the number of GCB transactions to increase next year, because prices have gone up quite rapidly in the past 12 to 15 months. The GCB market is generally restricted to Singaporeans and Permanents Residents with special approval to buy landed homes.

‘Some of these potential buyers may have bought GCBs at much lower prices in the past and may take time to adjust to higher prevailing prices now. But having said that, there’s been a lot of wealth creation over the past few years as seen in the reasonable number of record prices being set,’ Mr Ming said.

Credo Real Estate managing director Karamjit Singh, too, predicts moderate price upside for GCBs for next year, despite forecasting overall flat property prices. ‘GCB values will benefit from the enormous wealth created from the economic boom, and the influx of high networth individuals who become permanent residents (PRs), while supply remains scarce,’ he adds.

While demand-supply fundamentals remain sound next year for Singapore’s real estate sector as a whole, including GCBs, the crucial factor is how the currently-shaky sentiment pans out, Mr Singh said.

Record prices were set for two adjacent bungalows at Nassim Road in the past few months - 32G Nassim Road, which was sold for just under $20 million or $1,504 psf of land in September, followed by 32H Nassim Road in October at an even higher $1,899 psf.

Raffles Education founder and chairman Chew Hua Seng is believed to have picked up 32H Nassim Road, for which he paid $25.5 million. Mr Chew is said to own a few other bungalows nearby.

The prices achieved for 32G and 32H Nassim Road surpassed the previous record for GCBs, of $1,308 psf set only in August this year, when Hong Kong group Wharf (Holdings) sold Glencaird, a conservation bungalow at 15 White House Park, for $28.8 million.

However, market watchers highlight that for the 32G and 32H Nassim Road transactions, each property’s land area is just slightly over 1,200 sq metres - lower than the minimum 1,400 sq metres (or 15,070 sq ft) plot size stipulated under Urban Redevelopment Authority guidelines for GCBs. Savills’ Mr Ming argues nonetheless that these two properties will be bound by GCB regulations if they were to be redeveloped. This means that they cannot be more than two storeys high, their built-up area is limited to 35 per cent of the total land area, and the plots cannot be subdivided further.

The year has also seen quite a few GCBs being flipped. 21 Cluny Hill was bought for $15 million in January and changed hands again for $20.2 million in June. 46 Mount Echo Park was sold for $10 million in January and again for $12.8 million in March.

‘Some savvy bungalow investors with deep pockets, saw value in investing in freehold GCBs earlier this year, when their prices were lagging quite a bit behind those of 99-year bungalows on Sentosa Cove. The gap has since narrowed and these investors have been able to offload their GCB investment for a handsome profit,’ Mr Ming said.

Over at Sentosa Cove, seafronting bungalow sites have fetched as much as $1,696 psf this year. These are vacant sites sold by the precinct’s master developer, Sentosa Cove Pte Ltd, to buyers to build their dream homes on them.

The supply of completed bungalows for sale in the upscale waterfront housing locale is still limited, but Savills’ director of business development and marketing Ku Swee Yong says that owners are asking for $1,800 psf to $2,400 psf depending on the direction they face. ‘The main reason for higher bungalow values on Sentosa Cove than in mainland Singapore is because of expedited approval for foreign buyers of landed property on Sentosa Cove. This has been a great draw for those who want to be PRs in Singapore and park a fraction of their wealth here,’ Mr Ku said.

Source : Business Times - 19 Dec 2007

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Singapore URA awards Boon Lay site to Frasers Centrepoint

Singapore URA awards Boon Lay site to Frasers Centrepoint

By UMA SHANKARI
THE Urban Redevelopment Authority (URA) yesterday awarded a residential site at Boon Lay to Frasers Centrepoint, which put in the higher bid of $205.6 million - or $248 per sq ft per plot ratio (psf ppr) - after the tender closed last week with just two bids.
The weak response to the 99-year leasehold site caught industry watchers by surprise as mass market homes are expected to see good demand next year. Property analysts say that prices of mass market private homes could climb by about 15 per cent next year.

The site, which is bounded by Boon Lay Way and Lakeside Drive, had attracted only two bids - Frasers Centrepoint’s $205.6 million ($248 psf ppr) and GuocoLand’s $191 million ($230 psf ppr).

Both bids are below earlier market expectations of about $300 to $375 psf ppr, which were indicated in October when the tender for the site was first launched.

Despite this, market watchers predicted that URA will award the site as the government is committed to its aim of increasing housing supply.

The site, which has a gross floor area of 828,600 sq ft, is just five minutes from Lakeside MRT station.

Frasers Centrepoint plans to build an 18-storey development comprising three blocks, with a total of 600-plus apartments based on an average size of 1,300 sq ft each.

When the tender closed last week, a spokeswoman for Frasers Centrepoint described the group’s bid price as ‘conservative’. She said that the price reflects a breakeven cost of about $550 psf. ‘We would be looking at an average selling price of at least $700 psf,’ she added.

Source : Business Times - 18 Dec 2007

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Singapore Private home sales inch up; prices remain firm

Singapore Private home sales inch up; prices remain firm

URA data shows 4,000 units in 70 developments with pre-requisites for sale as at end-Nov
By ARTHUR SIM
(SINGAPORE) The number of private homes sold by developers inched up 4.7 per cent to 593 units in November, up from 566 units in October.
The Urban Redevelopment Authority (URA) also revealed monthly property market data of transacted benchmark prices as well as median prices. During the month, a significant number of transactions were seen at Amber Residences, which sold 85 units at the median price of $1,392 psf, and Casa Fortuna which sold 103 units at $1,009 psf.

CBRE Research executive director Li Hiaw Ho also noted that 20 units at 8 Napier were sold at a median price of $3,557 psf and pointed out that these were likely to have been made by a single buyer.

On the performance in November, Mr Li said: ‘Overall, prices are firming. Sales volume and prices in December should remain at the same levels as October and November.’

Indeed, developers told BT that launch prices are being maintained even though buyers are now a bit more ‘cautious’.

UIC Ltd’s 192-unit Park Natura, across from Bukit Batok Nature Park, saw 56 units sold in the month at a median price of $945 psf. The price was slightly lower than the October median price of $1,022 but UIC group general manager Vito Koh explained that this was because units sold in November included those with private enclosed spaces like roof terraces.
Mr Koh said that the withdrawal of the Deferred Payment Scheme (DPS) have made buyers more cautious but added that he believes developers are not lowering prices to move units. ‘Prices are not coming down, but they are not going up either,’ he said.

A comparison of the median price of Amber Residence ($1,392 psf) and the reported average selling price ($1,650 psf) does appear to show that prices may have softened a little.

According to the URA data, 68 units were sold in the $1,000-$1,500 psf bracket with 16 units sold in the $1,500-$2,000 psf bracket. One unit was sold at between $2,000-$2,500 psf.

Jones Lang LaSalle head of research and consultancy Chua Yang Liang noted that launches declined significantly in the Core Central Region (CCR) by 43 per cent from the 166 in October to only 95 in November. ‘The take-up or demand further reflects this softer market with 130 units absorbed - a marginal drop of 4 per cent month-on-month (MoM),’ he said.

Similarly, demand in the Outside Central Region (OCR) also weakened with a 33 per cent MoM decline or only 173 units absorbed compared to 259 in October. Dr Chua pointed out that this was on the back of a larger supply of 221 units or a 28 per cent increase in the number of units launched.

‘The decline in demand in OCR is a likely result of the removal of the DPS,’ he explained.

In contrast, the demand in Rest of Central Region (RCR) remained strong. In November, the take-up increased by 57 per cent MoM.

Most of the transactions in the RCR were in District 15. ‘Take-up in this segment is largely driven by foreign occupiers that has spilled over from the CCR,’ Dr Chua added.

According to the URA data, there are over 4,000 units in 70 developments with pre-requisites for sale as at end-November. This includes mass-market offerings at Bedok Resevoir as well as high-end developments at Cairnhill.

While developers are not ‘panicking’ at the possibility of a slowdown in the economy, Cushman & Wakefield managing director Donald Han believes more will be ‘repositioning’ their launches and going directly to foreign buyers in the Middle East and North Asia.

Mr Han, who expects the total volume of transactions in Q4 2007 to be below 2,000 units, added: ‘Some developers were already marketing their high-end products at the recent Mipim exhibition in Hong Kong to reach an international market.’

It is a strategy that appears to be working.

Savills Singapore director of marketing and business development Ku Swee Yong said he was pleasantly surprised at some of the benchmark prices reached in the high-end sector, with the highest price for the 40-unit Sui Generis at Balmoral Crescent increasing from $2,578 in October to $2,713 psf in November. Six units were transacted in November and the median price rose from $2,406 to $2,474 psf.

Saying that he believes that this end of the market would continue to be driven by international high net worth individuals, he revealed: ‘We had a client who insisted on being first in queue for The Ritz Carlton Residence.’ The client later set a new benchmark price of $4,515 psf for the Cairnhill area.

Source : Straits Times - 18 Dec 2007

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

http://www.hotvictory.com

No takers for many collective sale sites as Singapore market cools

No takers for many collective sale sites as Singapore market cools

Quiet end to record year where $12.5b worth of estates were sold en bloc

By Joyce Teo, Property Correspondent

MOST collective sale sites put up for tender in recent weeks have closed without any bids.
About 40 estates have been launched for sale since October, but just eight deals were sealed between October and last month, said property firm CB Richard Ellis (CBRE).

‘The end of the year has come early,’ said CBRE executive director Jeremy Lake.

This market cooling comes after a record of about $12.5 billion of collective sales was notched up this year.

That was more than 50 per cent up on last year’s $8.2 billion, CBRE said yesterday.

But developers have become more cautious about buying new sites, amid slowing home sales in Singapore and worries over the United States sub-prime mortgage crisis, property analysts say.

While there is no shortage of home owners keen to go en bloc for the sort of record prices seen for most of this year, the number of sites that have successfully been sold has dropped off significantly in recent weeks - coinciding with slower private home sales.

Figures released yesterday by the Urban Redevelopment Authority showed that 611 new units were sold last month, just a tad more than the 590 new units in October.

That compares with a much higher 1,731 units sold in August, for instance.

Said CBRE Research executive director Li Hiaw Ho: ‘Clearly, buyers have become more cautious in view of the volatility in global stock markets resulting from the sub-prime problems in the US, the smaller number of new launches…and tightened en bloc sales rules.’

A new set of collective sale rules kicked in on Oct 4.

In the weeks before that, a wave of potential sellers rushed to go en bloc to avoid the more time-consuming rules. But even some who managed to launch sales under the old rules have not succeeded in closing deals.

Big sites such as Spanish Village in Farrer Road, Villa delle Rose off Holland Road and Elizabeth Towers in Mount Elizabeth all had no takers at the close of their tenders recently. Their indicative prices were $878 million, $700 million and $673 million respectively.

The tender for former Housing and Urban Development Company estate Chancery Court on Dunearn Road also closed earlier this month without any bids. It had an indicative price of $468 million.

The freehold Royalville off Sixth Avenue - with a guidance price of up to $350 million - also failed to attract bidders. Others with unsuccessful tenders include Dunearn Gardens, Cavenagh Gardens, The Village, Amber Glades, Grange Heights and Thomson View Condominium.

‘There are developers who still want to buy but the problem is that some owners are expecting obscene, sky- high prices,’ said an industry observer.

‘The lull may continue for a while into the first quarter,’ said Credo Real Estate managing director Karamjit Singh.

He said developers have already acquired quite a lot of sites. ‘They don’t need to take extra risks by buying at today’s level unless they believe that there is further upside at current levels.’

Knight Frank’s managing director Tan Tiong Cheng said: ‘Singapore definitely looks very positive… But this external sub-prime problem will affect local and foreign buying so everyone will exercise caution.’

‘Long-term fundamentals still look good… Buying interest should return from mid-January when people return from their holidays,’ said Mr Ku Swee Yong of Savills Singapore.

Others, such as Mr Tan and Mr Lake, believe activity will pick up after Chinese New Year in February.

Source : Straits Times - 18 Dec 2007

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

http://www.hotvictory.com