Singapore Aljunied temp office plot draws single bid

Singapore Aljunied temp office plot draws single bid

By Fiona Chan, Property Reporter

A TEMPORARY office site in Aljunied Road has attracted only one bid - and a far lower-than-expected one at that.
The $7.8 million sole offer that came in for the 1.88ha site by the close of its tender yesterday represented only a quarter of the $30 million or so that experts had predicted.

This follows similarly cool responses for other transitional office sites released recently. Property consultants said it could signal that such plots - introduced last year to relieve the severe shortage of office space - are no longer necessary.

All eyes are now on whether the Urban Redevelopment Authority (URA) will award the 15-year leasehold site to Mezzo Development, a small development and construction firm that was the sole bidder.

A related firm, Mezzo Properties, turned in the top bid for a transitional office site in Mountbatten Road last week. Although the offers for the Mountbatten parcel also came in lower than predicted, the site drew a better response with three bids.

URA awarded the site to Mezzo the day after the tender closed.
But the offer for the Aljunied site is only about half the top bid for the Mountbatten plot.

The Aljunied bid works out to just $38.37 per sq ft of gross floor area - close to the level of some industrial space, said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

He said the market may have reached a saturation point for such transitional office space. ‘All these temporary sites attract only certain types of tenants’, who may have had their fill of the four short-term sites that URA has pushed out to date.

Besides the Aljunied and Mountbatten sites, URA released a plot in Tampines late last year that drew only one bid. The first such site, in Scotts Road, elicited a strong 11-bid response.

Mr Mak added that market uncertainties arising from the recent stock-market turbulence could also be a reason for the cool response.

Another factor could be that construction costs have gone up more quickly than the expected rise in office rentals in Aljunied, making this site less attractive as an investment, suggested Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

He also agreed that ‘we probably do not need any more transitional office sites’. Any new sites released in the coming months are unlikely to help relieve the current space crunch anyway, Mr Ku said. Construction on them will be finished only in late 2009 or beyond - when a flood of office space is already expected. ‘You don’t want your transitional building to be competing with a whole lot of new Grade A premium space,’ he added.

URA said yesterday that it would ‘consider releasing more transitional office sites if there is demand for such office space’. It also said the last time it did not award a tender for a sale site was in 2001, for a white site - where developers can choose whether they want to put up a residential or commercial building - at Central Boulevard.
Source : Straits Times - 17 Jan 2008

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Singapore Marina Bay Suites to go on sale this month

Singapore Marina Bay Suites to go on sale this month

By Joyce Teo, Property Correspondent
PRIVACY FEATURES: The 66-storey Marina Bay Suites condo has 221 units, with just four units of 1,600 to 2,700 sq ft on each floor. — PHOTO: MARINA BAY SUITES

PREVIEW sales of the posh Marina Bay Suites will start before the end of the month, even though sentiment in the property market remains weak and the stock market is very rocky.
About a year ago, apartments like this - in the new downtown and preferably with a bay view - were setting new price benchmarks.

For instance, Marina Bay Residences attracted large crowds and achieved a record price of $3,450 per sq ft (psf) in December 2006.

But since then, Orchard Road properties have emerged as some of Singapore’s hottest properties, crossing $5,000 per sq ft (psf).

Also, the market has now slowed significantly, weighed down in part by fears of a United States recession.

Market sources said Marina Bay Suites could sell for $3,000 psf and above, so the units could go for $4 million to possibly more than $20 million for the penthouses. The condominium is being marketed around the globe.

‘Marina Bay is a growth area,’ said marketing agent DTZ’s regional head (consulting and research), Mrs Ong Choon Fah. ‘This is the next big thing.’

A series of previews for the 221-unit, 99-year leasehold Marina Bay Suites will be held late this month. To the project’s head of residential marketing, Mr Kan Kum Wah, the time is right. ‘As a joint venture, we believe that the market currently is strong enough,’ he said.

The 66-storey condo, which together with two office blocks form phase two of the Marina Bay Financial Centre, is being developed by Cheung Kong (Holdings)/Hutchison Whampoa, Hongkong Land and Keppel Land.

Every unit comes with its own private lift lobby and there are just four units of 1,600 to 2,700 sq ft per floor.

Apart from three penthouses - which range from 4,700 sq ft to more than 8,100 sq ft, each with its own swimming pool - the rest are three- and four-bedders.

‘It is one of the last sites in the bay area with bay views,’ said Mr Joseph Tan, executive director (residential) at CB Richard Ellis, which is also marketing the project.

Elsewhere, Frasers Centrepoint will start staff previews for its freehold Martin Place Residences in Kim Yam Road today and its Waterfront Waves in Bedok Reservoir tomorrow.

But most other launches are expected to take place only after the Chinese New Year celebrations next month.
Source : Straits Times - 17 Jan 2008

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Another bid to stop sale of Singapore Gillman Heights

Another bid to stop sale of Singapore Gillman Heights

By Fiona Chan, Property Reporter

A GROUP of minority owners at the Gillman Heights condominium is making another bid to stop the $548 million collective sale of the huge estate in Alexandra Road.
They filed a High Court appeal yesterday against last month’s decision by the Strata Titles Board (STB) to approve the sale to CapitaLand and other parties.

Among other things, the 22 disgruntled owners are appealing on the grounds that the sale of Gillman Heights should require consent from 90 per cent of owners, rather than the usual 80 per cent.

The rules say consent from 90 per cent of owners is required for estates less than 10 years old to be sold en bloc. For older estates, 80 per cent is needed.

The conflict over the required consent for Gillman Heights comes because it is a former Housing and Urban Development Company estate, said the minority owners’ lawyer, Mr Richard Tan, from legal firm Tan Chin Hoe & Co. It has engaged Senior Counsel Michael Hwang to act for the minority owners.

The minority owners point out that although the estate was completed in 1984, it was privatised only after a seven-year process that ended in 2002. They argue that this should be the date from which the age of Gillman Heights is calculated.

Majority owners say that 87.5 per cent of owners at the condominium signed the collective sale agreement, which places it outside a 90 per cent consent mark, Mr Tan said.

However, the minority owners are also contesting this figure. They say the original sale agreement expired before the STB heard the sale application while the subsequent supplementary agreement had signatures from less than 80 per cent of owners.

Another bone of contention is the estate’s price, Mr Tan said.

He said the majority owners’ valuation report valued the condominium at $530 million as of last February, when the estate was sold. But a separate report commissioned by the minority owners valued it at $660 million.

The Gillman Heights appeal follows similar legal battles over other collective sales.

The most high-profile case is that of Horizon Towers in Leonie Hill, where minority owners earlier this month filed a High Court appeal against STB’s go-ahead.

Other estates embroiled in legal collective sale tussles include Finland Gardens in Siglap, Regent Court in Serangoon Road and Airview Towers in St Thomas Walk.
Source : Straits Times - 17 Jan 2008

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Singapore economists unfazed as US recession fears grow

Singapore economists unfazed as US recession fears grow

They opt to wait for more data before revising growth forecasts

By Bryan Lee

FEARS of a United States recession are hitting a fever pitch with the dreaded ‘R’ word mentioned with increasing frequency by American policymakers and economic soothsayers.
But the temperature in Singapore is notably lower. Local analysts are sitting tight on their forecasts - for both the US and Singapore - even with the hair-raising news out of America this week.

‘It’s looking darker undeniably,’ said Action Economics economist David Cohen. ‘But the situation hasn’t changed that dramatically either.’

Economists in Singapore said their colleagues in the US might be overreacting somewhat. Local experts are forecasting a slowdown but they want more evidence before making a recession call.

The mood in the world’s largest economy turned south dramatically in the past few days, with several global banks and former Fed chief Alan Greenspan issuing strongly bearish outlooks. Goldman Sachs, Standard Chartered Bank (Stanchart), Merrill Lynch and Morgan Stanley slashed their forecasts and joined Mr Greenspan in saying that the US is either in a recession or about to enter one.

Economists are expecting the US Federal Reserve to make deeper interest rate cuts, with Stanchart chief economist Gerard Lyons predicting that the benchmark rate could go as low as 1 per cent.
On the fiscal front, a US$100 billion (S$143 billion) stimulus plan, which will likely include tax rebates, is being put together by Democratic leaders in the US House of Representatives.

The surge in pessimism has been triggered largely by surprisingly weak labour and retail data. A jump in unemployment last month and a slide in holiday sales are being seen as signals that the era of the irrepressible US consumer is coming to an end.

Especially worrying were poor sales of luxury cars and premium jewellery, suggesting that even affluent Americans are tightening their belts.

Meanwhile, more big write-downs on sub-prime mortgage losses by US banks, led by Citigroup on Monday, will do little for the already shaken banking sector in the West. The gloomy sentiment has sent global investors into a frenzy with stock markets slumping and gold prices surging as safety is sought in these uncertain times.

‘Market prices tend to overreact to fluctuations in economic data,’ said Mr Cohen, who maintains that the US could still grow by about 2 per cent this year.

He said the figures may not be as bad as they are made out to be. For instance, the weak December will not derail fourth-quarter retail sales from a 2 per cent expansion.

CIMB-GK economist Song Seng Wun said that while US household spending will moderate, American firms are doing well generally, tourists are taking advantage of the cheap US dollar and an election year will provide extra jobs for many.

Analysts in Singapore said the sharp reactions in the West may be caused by the economists there being too close to the battle.

Some suggested that dramatic calls may have been made to hog headlines while others said an element of overcompensation could be in play after previously ’sticking their heads in the sand’.

Indeed, United Overseas Bank economist Thomas Lam said he had anticipated last May that the US was headed for a slowdown and flagged the possibility of Fed rate cuts against a sea of predictions for inflation-busting rate hikes.

Economists said a sharper slowdown in the US will hurt growth in Singapore but the effect will be cushioned by expected resilient growth in China and the region’s rising affluence, which should keep tourism humming.
Source : Straits Times - 17 Jan 2008

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Singapore Marina Bay Suites priced around $3,000 psf

Singapore Marina Bay Suites priced around $3,000 psf

Over 600 potential buyers, half foreigners, have registered interest to buy units in 221-unit project
By ARTHUR SIM

AT around $3,000 psf, the next luxury development to go on sale - Marina Bay Suites - looks like it could actually be quite reasonably priced, especially as luxury home prices have trended towards the $4,000 psf range.

‘As a developer, we believe in leaving something behind for capital appreciation . . . At this price range, it will attract the investors.’
- Kan Kum Wah, head of residential marketing,

Marina Bay Financial Centre
Revealing the estimated selling price at a press conference for the upcoming sales preview of Marina Bay Suites, slated to be before Chinese New Year, Marina Bay Financial Centre (MBFC) head of residential marketing Kan Kum Wah said: ‘As a developer, we believe in leaving something behind for capital appreciation.’

Asked if this meant giving speculators more incentive to buy, Mr Kan said he doubts there will be speculative activity, but added that several investors have already expressed their interest in the development.

Marina Bay Suites is part of Marina Bay Financial Centre, being developed by joint venture (JV) partners Cheung Kong Holdings/Hutchinson Whampoa, Hongkong Land and Keppel Land.

So far, over 600 potential buyers (of whom half are foreigners) have registered their interest to buy into the 221-unit Marina Bay Suites. Mr Kan added that over 100 of these potential buyers already own a unit at the JV’s earlier-launched development, Marina Bay Residences.

On the projected pricing, Mr Kan cited some sub-sale transactions for Marina Bay Residences at above $3,000.

Mr Kan also said that Marina Bay Suites will have only 218 three- and four-bedroom units ranging between 1,600 and 2,700 sq ft in size. This means units could cost in the range of $5 million to $8 million, putting them out of reach of the average property speculator. DTZ Debenham Tie Leung (DTZ) executive director Ong Choon Fah added: ‘At this price range, it will attract the investors.’

These investors will be looking for capital appreciation.

Joseph Tan, executive director (residential) at CB Richard Ellis (CBRE), which is marketing the development together with DTZ, said that capital appreciation for developments in the vicinity has been between 35 and 75 per cent in the previous two years. ‘Some have even seen 100 per cent gains,’ he added.

But news of a possible US recession does seem to have affected market confidence.

According to caveats lodged, a unit at Marina Bay Residences (excluding penthouses) did cross the $3,000-level last August. However, sub-sale caveats lodged in December show transactions at between $2,400 and $2,700 psf.

Marina Bay Suites will be initially sold through private previews.

Source : Business - 17 Jan 2008

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Singapore Transitional office site fetches just one bid

Singapore Transitional office site fetches just one bid

Mezzo’s $7.8m offer for Aljunied site also below expectations
By ARTHUR SIM

INTRODUCED as a quick fix to address the shortage of office space, the new transitional office sites may just as quickly become redundant.
The Urban Redevelopment Authority (URA) closed the tender for the fourth transitional office site at Aljunied Road and Geylang East Avenue 1 yesterday with only one bid received.

The bid price was also below earlier market expectations at $7.8 million or a unit land price of $38.35 per square foot per plot ratio (psf ppr).

The bidder was Mezzo Development, which also put in the top bid for the third transitional office site at Mountbatten earlier this month. Only three bids were received then with the top bid coming in at $69.17 psf ppr.

In November 2007, the second transitional site in Tampines also received a single bid of $80.65 psf ppr.

The recent tenders are a stark comparison to the first one, which saw 11 bids received in August 2007 and a top bid of $219 psf ppr.

That the site was next to Newton MRT Station may have had something to do with it.

Cushman & Wakefield managing director Donald Han said that demand (and prices) could increase if the transitional office sites are more attractive. But at the going rate, these sites could well be phased out. Mr Han said: ‘At some stage if demand (and prices) drops even further, the government will have to decide if these sites are relevant.’

As at December 2007, the URA had said in its H1 2008 land sales press release that, ‘more sites in a number of locations will be made available for the development of transitional offices’.

But as Mr Han notes, the closer in time these sites are released to 2010, when projected new office supply comes onstream, the higher the risks involved in developing them. ‘The window of opportunity for whoever buys these sites is getting narrower,’ he added.

While Savills Singapore director (marketing and business development) Ku Swee Yong does not believe that there would be an oversupply of office space in 2010, he does feel that transitional offices are not entirely feasible either.

‘Especially when you consider construction time and rising construction costs,’ he said.

Mr Ku, who estimated that construction time alone could take between 9 and 12 months, added: ‘I don’t think we need to keep launching these (transitional) sites.’
Source : Business - 17 Jan 2008

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Las Vegas Sands draws down $2b for Singapore IR

Las Vegas Sands draws down $2b for Singapore IR
LAS Vegas Sands Corp, the world’s largest casino operator by market value, has drawn down $2 billion from its credit facility for the building of a Singapore casino, it said in a statement yesterday.

Mr Adelson: Credit facility will provide flexible and cost effective financing for the resort
The company is paying an interest margin of 3.6 percentage points more than the 30-day Singapore dollar swap offer rate, it said in the statement.

Las Vegas Sands got its initial funding for the integrated resort in Singapore at a time when the credit markets are roiled by rising borrowing costs due to concern about losses in US sub-prime mortgages. The Singapore dollar one- month rate is at 1.5 per cent, 2.5 percentage points lower than the one-month London interbank offered rate (Libor), a benchmark for US dollar borrowings.

‘The credit facility, which is the largest private Singapore dollar-denominated financing ever completed, will provide flexible and cost effective financing’ for the gaming resort, Sheldon Adelson, chairman of the casino company, said in the statement. ‘We are quite gratified that the Singapore interest rate is significantly below the rates which we would have to incur in the US or other international markets in today’s market.’

About 42 per cent of the US$24.8 billion that loans companies received in Singapore in 2007 are in the local currency, compared with 25 per cent of US$26.1 billion of debt for 2006, according to data compiled by Bloomberg.

‘Bank liquidity is extremely strong in Singapore,’ said James Chua, who helps manage US$450 million at Phillip Capital Management Ltd in Singapore. ‘This is a low-risk project due to the duopolistic nature of the casinos and the high execution skill of Las Vegas Sands.’

Singapore Prime Minister Lee Hsien Loong’s government has pledged to allow only two casinos in country in the next 10 years. The nation ended a four-decade ban on casinos in a bid to triple tourism revenue to $30 billion by 2015.

The other casino licence was awarded to Malaysia’s Genting International plc, owned by Kuala Lumpur- based Genting Bhd. Genting is building a casino resort on Sentosa island.

The Singapore resorts will capture a slice of the regulated gambling market in the Asia-Pacific region, expected to expand 15.7 per cent a year to US$30.3 billion in 2011, according to PricewaterhouseCoopers LLP. The loan will also test the city-state’s debt market, where more loans are being issued in the local currency.

Las Vegas Sands hired eight banks, including Goldman Sachs Group Inc and Singapore-based companies DBS Group Holdings Ltd, Oversea-Chinese Banking Corp and United Overseas Bank Ltd, to arrange the $5 billion borrowing, according to three people, who declined to be identified because the information is private, on Sept 20.

The other four arranging banks are Morgan Stanley, Merrill Lynch & Co, Lehman Brothers Holdings Inc and Citigroup Inc.

The casino company’s debt is rated three steps below investment grade at ‘Ba3′ by Moody’s Investors Service and an equivalent ‘BB-’ by Standard & Poor’s.

Las Vegas Sands’ downtown Marina Bay resort, next to Singapore’s business district, will feature three hotel towers linked by a sky garden, a convention centre, restaurants run by celebrity chefs Charlie Trotter and Thomas Keller, and an art-and-science museum. — Bloomberg

Source : Business - 17 Jan 2008

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Singapore Retail sales here to rise 4.2% in H1: MasterCard

Singapore Retail sales here to rise 4.2% in H1: MasterCard

It’s expected to hit $17.6b; survey also forecast slower GDP growth of 5% in H1
By LYNETTE KHOO
WITH private consumption seen holding steady in the first half of this year, retail sales in Singapore are expected to post a sturdy 4.2 per cent year-on-year growth in the first half to $17.6 billion, according to a MasterCard survey.

The MasterCard Worldwide Index of Consumer Confidence for Singapore edged up 0.3 points to 83.6, marking the highest level in seven years of this survey series.

But the survey estimated that Singapore’s gross domestic product would fall 2.5 percentage points from 2007 to 5 per cent in the first half of this year, dragged down by softer global demand for electronics and pharmaceuticals.

These forecasts on Singapore are part of the MasterCard Worldwide Index of Retail for the first half of 2008 in Asia-Pacific.

Conducted twice a year in June and December, the index factors in 10 years of retail sales data based on official statistics in each market, secular growth trend in the retail industry, and uses the MasterCard Worldwide Index of Consumer Confidence as an independent variable.

The MasterCard Worldwide Index of Consumer Confidence for Singapore in this survey edged up 0.3 points to 83.6, marking the highest level in seven years of this survey series.

The forecasts across the other Asia-Pacific markets also reflect an expansion, with China maintaining its lead with an estimated 12.8 per cent growth in the first half to 4.74 trillion yuan (S$790.4 billion) from a year ago.

‘Consumer sentiments in China remain very optimistic,’ the survey said. The MasterCard Worldwide Index of Consumer Confidence for China gained 1.5 points to 85.5, the highest since 2003.

Other markets expected to mark strong growth in the first half include Indonesia, with 12.6 per cent growth to 243.6 trillion rupiah (S$36.9 billion ) and Hong Kong with a 10.5 per cent increase to HK$126.7 billion (S$ billion) from the same period a year ago.

‘The global economic turmoil will inevitably affect Asia in 2008, however,’ said Yuwa Hedrick Wong, economic adviser at MasterCard Worldwide.

‘The real test is to what extent Asian economies will be able to continue to drive growth with domestic demand, and thereby maintaining a steady pace of healthy retail sales.’

But markets that may remain lacklustre include Taiwan, New Zealand and Japan, where year-on-year growth is expected to be 2.9 per cent, 2.4 per cent and 0.7 per cent respectively.

Dr Hedrick-Wong noted that poor consumer sentiments in Taiwan amid uncertainty ahead of elections could be the cause of weak retail sales. Japan is experiencing a cyclical downturn while New Zealand faces the threat of rising interest rates and slower economic growth.

Source : Business - 17 Jan 2008

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KepLand in tie-up with marina builder - Singapore

KepLand in tie-up with marina builder - Singapore

By VINCENT WEE

KEPPEL Land International and high-end marina builder Bellingham Marine Industries yesterday signed a memorandum of understanding for Bellingham to design and construct premier marinas in Keppel Land’s waterfront properties in the region.

Partners: Mr Wong (left) with Mr Babbitt. Bellingham will design and construct premier marinas in Keppel Land’s properties in the region
Bellingham will provide KepLand with design, project management and construction expertise for marinas, when there is a potential for one to be included in one of its masterplan projects. KepLand chief executive Kevin Wong said: ‘We are confident that Bellingham, with its proven track record in the design and construction of marinas, will enhance our overall masterplan for our developments at Keppel Bay as well as our other waterfront developments in Asia.’

The US-headquartered company with an annual turnover of over US$100 million has carried out several marina projects in countries around the world. Apart from the recently completed Marina at Keppel Bay, others include the 180-berth Portofino Yacht Club in Redondo Beach, California, and the 250-berth Marina CostaBaja in Mexico.

Bellingham president Everett Babbitt said: ‘Keppel is a very honourable and outstanding company and our talents mesh very well because we bring a high degree of technical skills while they have all the contacts and infrastructure base throughout Asia.’

KepLand’s marina project is Bellingham’s biggest foray into the region, where it has been active for only the past three years.

Mr Babbitt said Bellingham enjoys a good reputation among the yachting and marina circles. The company organises forums for megayacht skippers and crews and is well known in the community. Mr Babbitt said these crews, who make many decisions on behalf of the owners about where to dock these expensive boats, tend to look out for Bellingham-designed marinas because they know they can expect a high standard.

Mr Babbitt said he hopes the partnership will lead to more success in the region and perhaps raise revenue share from Asia from about one per cent to 10 to 15 per cent in future.
Source : Business - 17 Jan 2008

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S’pore Power Building sold for $1b

S’pore Power Building sold for $1b

Buyer said to be Pacific Star-linked fund; group also eyeing DBS Building
By KALPANA RASHIWALA

(SINGAPORE) A property fund managed by Singapore’s Pacific Star group, with monies invested by German and other European investors amongst others, is believed to have bought Singapore Power Building at Somerset Road.

The building, on Somerset Road, has scope for asset enhancement by creating ground level retail space.
The price is said to be in the region of $1 billion or around $1,820 per square foot of net lettable area.

The 17-storey building, once known as PUB Building, is on a site with a remaining lease of about 66 years. It has a total net lettable area of about 550,000 sq ft.

Although it does not have immediate redevelopment potential - as its current gross floor area surpasses the maximum allowed under the 2003 Master Plan - the 30-year-old property’s new owners can look at rental upside as leases roll over. BT understands that there may also be some scope for asset enhancement works, perhaps by adding retail space at the ground level.

The property is being sold by Singapore Power and the Public Utilities Board. PUB moved out last year, while SingPower currently occupies about 200,000 sq ft, which it is likely to lease back at market rent for a few years, market watchers reckon.

SingPower Building was sold through an expression-of-interest exercise which closed in the fourth quarter of last year.

Pacific Star, started by former real estate investment banker Jeff Tay, is also said to be eyeing DBS Building Towers 1 and 2 at Shenton Way, which is being divested by Goldman Sachs. Market watchers suggest the potential buyer may take the form of a consortium involving Pacific Star-linked entities and possibly some of the group’s past and present partners.

The Pacific Star group also spearheaded the $505 million securitisation of Capital Square near Raffles Place in 2002 in a deal that valued the prime office development at about $1,200 psf of strata area.

The market has been abuzz with office deals. A Goldman Sachs-linked fund recently bought the 999-year leasehold Hitachi Tower at Collyer Quay for $811 million or about $2,900 psf of net lettable area. Last year, Goldman Sachs also bought Chevron House for $2,780 psf. Formerly known as Caltex House, Chevron House had a remaining 81-year lease at the time of the deal in August 2007.

This week, the Singapore Land Authority launched an expression-of- interest exercise for The Atrium @ Orchard. CB Richard Ellis, the marketing agent, has indicated a price of above $2,700 psf for the property, which will be sold with a fresh 99-year lease.

Prime Grade A office rents in Singapore doubled last year because of the office space crunch. Investment interest in this sector remains strong, given that the supply shortage is expected to continue for the next couple of years.

Some occupiers are even leasing entire small- to mid-sized office developments to get a firmer handle on their occupation costs in the next few years. Among such buildings being eyed by single occupiers is 67 High Street, which will be completed by the end of this year or early next year.

The nine-storey building, which will have about 78,000 sq ft in net lettable area, is being developed on the former Satnam House site by an entity linked to the Royal Brothers group. The property is being marketed by Jones Lang LaSalle.
Source : Business - 17 Jan 2008

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