New short-term work passes for foreigners - Singapore

New short-term work passes for foreigners - Singapore
FOREIGNERS working on short-term assignments in Singapore are no longer to be issued with Professional Visit Passes (PVPs) by the Immigration & Checkpoints Authority. Instead, from Feb 1, the Ministry of Manpower (MOM) will introduce two new Work Pass categories for such foreigners - the Miscellaneous Work Pass and the Work Permit (Performing Artiste).
Foreigners currently exempt under the PVP scheme as well as those performing two new short-term activities will be exempted, but they will still need to notify MOM before performing such activities.

The Miscellaneous Work Pass is valid for up to 60 days and will apply to:
a foreigner involved in activities directly related to the organisation or conduct of any seminar, conference, workshop, gathering or talk concerning religion, race or community, cause, or political end;

a foreign religious worker giving talks on any religion;

a foreign journalist, reporter or accompanying crew member not supported or sponsored by any Singapore government agency to cover an event or write a story in Singapore.

The maximum duration of the Work Permit (Performing Artiste) is six months. The new pass will apply to foreign artistes performing at any bar, discotheque, lounge, night club, pub, hotel, private club or restaurant.

Two types of activity will be exempt because they are of short duration, sporadic in nature and do not involve an employer-employee relationship with a local company. They might also require specialised expertise generally unavailable here.

The first type includes those in the commissioning or audit of any new plant or equipment, and those involved in the installation, dismantling, transfer, repair or maintenance of any equipment. The other type of activity involves those in the arbitration or mediation services in relation to matters not involving religion, race or community, nor a cause or a political end.

Foreigners performing Work Pass Exempt activities can do so for the duration of their Social Visit Passes subject to a maximum of 60 days.

More information is available on the MOM website at www.mom.gov.sg

Source : Business Times  - 26 Jan 2008

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New licence system for traders in April-Singapore

New licence system for traders in April-Singapore

DETAILS of a new and simplified licence system for traders were spelled out yesterday in a speech by Minister of State for Finance and Transport Lim Hwee Hua given at Suntec Singapore Convention Centre to mark International Customs Day.
She said that the new Apex Licence system would be set up in April.

‘The Apex Licence is a single licence for traders involved in different activities like storage, manufacturing and retail of various duty- suspended products, and at different locations.’

This would be a vast improvement over the current arrangement, in which traders require separate licences for different products depending on their type, whether they are dutiable or not, as well as the nature of activity they are engaged in and the location of operation, she said.

Traders, however, must first qualify for the licence by demonstrating ‘a good track record and a single inventory accounting system that is robust and secure’.

‘Qualifying operators of the Apex Licence can henceforth enjoy lower business costs in terms of a reduction in licence fee as well as greater flexibility in the storage and movement of goods between pre-approved warehouses.’
Source : Business Times  - 26 Jan 2008

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Singapore HDB resale deals at a new low in 2007

Singapore HDB resale deals at a new low in 2007

Rising resale prices and higher COVs result in last year’s total of 29,436
By UMA SHANKARI
THE number of resale HDB flats which changed hands fell to a new low in 2007 - with just 29,436 transactions recorded - as buyer resistance set in, in the face of escalating resale prices and more sellers asking for large amounts of cash-over-valuation (COV), fresh HDB data shows.

The number was lower than the 29,723 resale transactions seen in 2006, which was itself a new low. Stock-market jitters in the fourth quarter also caused resale transactions in the last three months of 2007 to fall 13 per cent to 6,700.

The fall in transaction volume came despite a 17.5 per cent increase in HDB resale prices last year. In the fourth quarter, HDB resale prices rose 5.7 per cent, lower than the increase of 6.6 per cent seen in the third quarter.

‘With escalating resale prices and more and more COV transactions, we saw the resale market hitting resistance level in the fourth quarter as HDB flat buyers do not have or are not willing to part with so much cash,’ said Eugene Lim, assistant vice-president of property agency ERA.

The COV is the amount that is paid above the valuation of a flat and cannot be paid with a home loan or monies from the Central Provident Fund (CPF). With high COVs demanded by sellers, buyers are required to fork out more cash.

In the fourth quarter, cases requiring COV constituted 86 per cent of all resale transactions, up from 80 per cent in the third quarter. The median COV amount also increased to $22,000 in the last three months of the year, from $17,000 in the previous quarter.

However, a closer look at some of the traditionally popular estates show that median COVs have actually decreased as buyers resisted forking out large sums of cash. For example, in the third quarter, the median COV for a five-room flat in Queenstown was $110,000. In the fourth quarter, it had fallen to $79,000.

But despite the lower total resale volume, the number of five-room and executive flat transactions actually increased in 2007 over 2006, ERA’s Mr Lim pointed out.

The number of five-room resale transactions rose 13.3 per cent to 7,275 in 2007. Similarly, for executive flats, there were 2,627 transactions in 2007 - a jump of 17.9 per cent compared with 2006.

The robust numbers are mainly due to cash-rich buyers from enbloc sales or private property sales downgrading to larger HDB flats in choice locations, experts said. These buyers also account for the robust COVs fetched by larger flats.

‘Based on our data, more than 50 per cent of the high COVs of $80,000 or more seen in 2007 are from private property downgraders,’ said Mohamed Ismail, chief executive of property firm PropNex.

Sellers of these larger HDB flats are either upgrading to private properties or downgrading to smaller HDB flats, Mr Ismail said. He added that there was little upgrading from smaller to bigger HDB flats.

ERA’s Mr Lim said the fact that sellers of larger HDB flats are upgrading is good news for developers of mass market condos as traditionally, the support for their projects comes from buyers living in these HDB flats.
Source : Business Times  - 26 Jan 2008

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Wing Tai’s second-quarter net profit slips 19% to $43.6m - Singapore

Wing Tai’s second-quarter net profit slips 19% to $43.6m - Singapore

By OH BOON PING
WING Tai Holdings yesterday reported a 19 per cent year-on-year drop in net profit to $43.6 million for its second quarter ended Dec 31, 2007, while revenue plunged 59 per cent.

Revenue contributor: Artist’s impression of The Riverine by the Park. Wing Tai said in view of volatility in the current market, it will continue to monitor the property market closely.
Q2 sales for the property group came to $110.7 million, while earnings per share were 5.81 cents - down from 7.47 cents.

The Q2 earnings brought first-half net profit attributable to shareholders to $105.35 million, a rise of 25 per cent, even though revenue fell 52 per cent to $210.9 million. The results included a $27.5 million gain from the disposal of available-for-sale financial assets.

The company attributed the lower half-year sales to smaller contribution from the development properties division.

Revenue on development properties for the current period was mainly from the units sold in The Riverine by The Park, The Meritz and The Lakeside.

Related link:

Click here for Wing Tai’s financial statements
The profits recognised from these three projects contributed to its operating profit of $70.1 million - down 37 per cent from $110.5 million a year ago.

However, the company was helped by a more than three-fold jump in the share of profit of associated and joint venture companies, which lifted half-year net income.

The share of profit from associates and joint ventures rose from $23.2 million in the previous corresponding period to $75.9 million, due to the higher contributions from VisionCrest and Casa Merah projects in Singapore.

Wing Tai said that in view of volatility in the current market, it will continue to monitor the property market closely.

New residential projects for sale in the current year will be released at an opportune time.

Yesterday, Credit Suisse issued an ‘underperform’ on the stock, with a price target of $2.48.

The shares ended trading yesterday at $2.30 - up 6 cents from previously.
Source : Business Times  - 26 Jan 2008

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Ascott’s Q4 net profit triples on divestment gains - Singapore

Ascott’s Q4 net profit triples on divestment gains - Singapore

By UMA SHANKARI

THE Ascott Group, Asia’s biggest operator of serviced apartments, yesterday said that its fourth-quarter profit more than tripled on the back of divestment gains.

Expanding: Ascott plans to have 25,000 apartments in Asia, Europe and the Gulf region by 2010. It crossed the 20,000-unit mark for the first time in Q4 last year
Net profit for the three months ended Dec 31, 2007 rose to $45.4 million from $13.6 million a year earlier. Q4 earnings per share rose to 2.8 cents, from 0.9 of a cent a year earlier.

The company is recommending a total cash dividend of six cents a share, including a bonus dividend of 4.8 cents.

Ascott’s performance was boosted by the divestment of the Somerset Bayswater property in London, which gave it a net gain of $17.8 million. The company also saw some gains from the sale of a golf course in Guangzhou.

Q4 revenue rose 14 per cent to $116.5 million, from $102.1 million a year earlier, as Ascott benefited from increases in revenue per available unit and better fee-based income.

During the quarter, Ascott’s property portfolio also crossed the 20,000-unit mark for the first time. The company added 3,528 units to its stable, taking the total number of serviced residence units under its management to 20,449. Ascott plans to have to have 25,000 apartments in Asia, Europe and the Gulf region by 2010.

For the whole of 2007, Ascott’s net profit rose 8 per cent to $177.3 million, from $163.6 million in 2006. Revenue for the full year rose 7 per cent to $435.3 million, from $405.9 million previously.

Ascott will continue to grow its portfolio, said chief executive Jennie Chua yesterday. ‘I think crossing the 20,000-mark makes us the largest owner-operator of serviced residences in the world. We will continue to grow, in the right cities and the right locations.’

Ms Chua aims to expand Ascott’s presence in South-east Asia, China, India and Europe. For South-east Asia, Vietnam and the Philippines are particularly attractive, she said.

In a separate statement, Ascott said that it would invest A$136.2 million (S$170.4 million) to develop a 398-unit property in Melbourne’s central business district. The investment amount includes land and building costs. The property will be Ascott’s first Citadines-branded serviced residence in Australia, the company said.

Ascott’s parent company, CapitaLand, made a general offer for Ascott on Jan 7 in a deal that values the serviced residence company at $2.8 billion.

CapitaLand, South-east Asia’s largest property firm by market value, owns 66.5 per cent of Ascott and intends to pay up to $989.5 million - or $1.73 a share - for the remaining shares in Ascott to take the company private. Ascott’s shares closed one cent lower at $1.72 yesterday.

Source : Business Times  - 26 Jan 2008

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As Sibor falls, so can your mortgage… - SIngapore

As Sibor falls, so can your mortgage… - SIngapore

Plunging interest rates bring Sibor- linked home loan packages into focus
By CHOW PENN NEE

(SINGAPORE) With interest rates going down, now might be a good time to refinance your mortgage loans. Sibor-linked packages are particularly attractive, mortgage consultants say.
Mortgage rates are affected by the Singapore interbank offered rate (Sibor) - the rate at which banks lend to one another. And mortgage rates should follow the Sibor’s downward trajectory.

Yesterday, the three- month Sibor fell to 1.5 per cent, its lowest level since December 2004. It was hovering around 2.5 per cent last year.

Economists say it is expected to go even lower by mid-year, partly due to the US steadily cutting its key interest rate. Sibor takes its cue from interest rates in the US, and earlier this week the US Federal Reserve slashed its key interest rate from 4.25 per cent to 3.5 per cent.

So, Sibor-linked home loan packages introduced by the banks are starting to look attractive, as homeowners can take advantage of these rates to refinance, if they think rates are headed south.

Banks here say they have seen an increase in interest in their Sibor-linked packages.

A United Overseas Bank spokesman told BT: ‘In light of falling Sibor, there are now more inquiries on home loan packages pegged to cost of funds but it is still too early to see a substantial shift to such packages.’
At OCBC, Gregory Chan, head of consumer secured lending, said that there is an increase in interest in Sibor-pegged packages, but the large majority of consumers are still adopting a wait-and-see attitude to ascertain how long the downward trend in Sibor rates will be sustained.

‘There is no certainty that Sibor rates will remain low or for how long,’ he explained. He noted that for the other packages not pegged to market rates, there will always be a lag time in adjusting rates up or down, as financial institutions try to determine where rates are headed.

DBS head of secured lending Koh Kar Siong said that since June last year, the bank has seen all its new loan bookings made under rates which are pegged to publicly-available information. ‘One hundred per cent of the new loans booked are pegged against the Sibor or CPF Ordinary Account rate, with a huge majority of loans booked under the Sibor packages,’ Mr Koh told BT.

All its new mortgage packages are pegged to the 12-month Sibor, doing away with in-house board rate pegs, he added.

Mortgage consultants are of the view that Sibor is trending downwards, and consumers would benefit should they refinance their loans to Sibor packages.

‘Given that aggressive US interest rate cuts are expected to filter through to local interbank rates, refinancing to Sibor-linked packages certainly looks compelling,’ said Geoffrey Ying, head of the mortgage division at New Independent, an independent financial adviser. ‘For those who are inclined to optimise the benefits of this interest rates trend, a market-responsive mortgage rate that reprices Sibor with greater frequency is preferred.’

He said some of his clients with Sibor-linked packages have already seen their mortgage instalments shrink with the fall in rates. Dennis Ng, spokesman for mortgage consultancy portal www.HousingLoanSG. com, noted: ‘In the next 6-9 months, my personal opinion is that Sibor and swap rates are likely to remain low or reduce further,’ he said. ‘Consumers would enjoy interest saving from the next interest-fixing date if Sibor goes lower and lower.’

Mr Ng said consumers should take note of the cost of refinancing, the lock-in period on their existing loan, and interest fixing date of the Sibor or swap rate-pegged packages before refinancing.

But Leong Sze Hian, president of the Society of Financial Service Professionals, said refinancing is not so clear-cut, as Sibor-linked loans usually have higher interest rates than non-Sibor loans. ‘Why would consumers want to pay more for transparency?’ he asked.

Mr Leong said customers should check what non-Sibor rates are, relative to Sibor rates. He also urged banks to be transparent about their current practice of keeping different board rates for different customers of the same bank.

Source : Business Times  - 26 Jan 2008

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Singapore Private homes losing speculative froth

Singapore Private homes losing speculative froth

Subsale activity slowed in Q4; rising rents defined 2007
By KALPANA RASHIWALA
(SINGAPORE) The level of speculative activity in the private property market, as measured by the extent of subsales, slowed considerably in Q4 last year, especially in the Core Central Region (CCR), according to the latest official data.

Islandwide, subsales as a percentage of total private housing sales fell from 14.4 per cent in Q3 last year to 10.7 per cent in Q4, while in the CCR, the hotbed of speculation, the subsale percentage fell from 24.8 per cent to 18.6 per cent over the same period. Property consultants attributed the drop to uncertainty about the financial markets as well as the withdrawal of the deferred payment scheme in October 2007.

Reflecting the current housing shortage, the stock of completed private homes increased by just 1,448 units last year - the smallest rise in at least 12 years. The stock had increased by 4,008 units in 2006, 7,453 units in 2005, and 10,969 units in 2004.

Rents of condos and apartments rose significantly last year - by 42.3 per cent in CCR (comprising the prime districts 9, 10, 11, Downtown Core and Sentosa), an even higher 47 per cent in the Rest of Central Region (RCR), and 41.9 per cent in Outside Central Region (OCR).

‘Looking back at 2003/2004, developers were cautious and there were not many housing starts. So three or four years down the road, we’re seeing a fall in terms of new home completions,’ DTZ executive director Ong Choon Fah explains. ‘Of course there have also been a lot of en-bloc sales in the past two years and some of these properties have been demolished,’ she adds.
Developers are less likely to bid aggressively for development sites and this will affect the success rates of collective sales.

‘The situation is even more severe in the prime areas, and we’ve been seeing a lot of expats fanning out from the prime districts to RCR, to rent private homes, which probably explains why the increase in non-landed rents was steeper in RCR compared to the CCR,’ Mrs Ong explains.

With many private residential projects likely to be completed only in late 2008 and 2009, property consultants including Knight Frank managing director Tan Tiong Cheng expect rentals for non-landed properties to increase further this year. The rise could be less steep - perhaps 20 per cent, or around half the rate of increase for last year.

Yesterday’s data on the private property market by Urban Redevelopment Authority showed that the overall price index for private homes rose 6.8 per cent in Q4 over the preceding quarter, slower than the 8.3 per cent hike in Q3. For the full year, the index was up 31.2 per cent, three times the 10.2 per cent rise in 2006.

Related link:

Click here for URA’s news release
In terms of regions, the price index for non-landed private homes in CCR rose 7.5 per cent in Q4, more measured than the 8.3 per cent gain in Q3. Price indices for RCR and OCR advanced 7.7 per cent and 7 per cent respectively in Q4, slightly more modestly than in Q3.

For the whole of last year, the non-landed home price index for CCR rose 32.7 per cent, while RCR and OCR indices were up 30.4 per cent and 26.4 per cent respectively.

Developers sold a record 14,811 private homes last year, surpassing the previous high in 2006 by 32.9 per cent. They launched a total of 14,016 units in 2007, 26.6 per cent above the 2006 figure and also a new high.

Knight Frank director (research and consultancy) Nicholas Mak predicts that URA’s overall private residential property price index will rise at a more sluggish pace - around 10-15 per cent - this year, as buyers become more prudent.

Colliers International director (research and consultancy) Tay Huey Ying reckons that subsales as a percentage of total private homes sales islandwide will continue trending down in the coming months, to average about 8 per cent for the whole year, as the market moves to a ‘healthier and more sustainable set of fundamentals’.

Less speculation could also slow the hike in home prices, she says. ‘As a result, developers are less likely to bid aggressively for development sites and this will affect the success rates of collective sales,’ she adds.

Some seasoned market players are predicting that home prices in CCR could take a hit of up to 10 per cent this year; those in RCR will be flat, perhaps rising slightly; while OCR will post the biggest gains of about 10-15 per cent.

‘There’s significant supply of projects for launch in CCR, and that will weigh down on prices. Foreign buying will thin because of the financial market turmoil which is hitting high-net-worth bankers and others,’ a veteran industry observer suggests.

BT learnt yesterday that the release of the high-profile Marina Bay Suites, which was initially slated for the end of this month, has been delayed till after the Chinese New Year festivities - by which time the Budget should also be announced and hopefully lift sentiment.
Source : Business Times  - 26 Jan 2008

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2 new lines and $20b to double rail network - Singapore

2 new lines and $20b to double rail network - Singapore

Current projects could also be completed earlier, greater contestability in rail industry to be introduced
By SAMUEL EE

(SINGAPORE) The government will spend some $20 billion to build two new rail lines and a couple of extensions to double the length of Singapore’s rail network by 2020.

The figure, announced by Transport Minister Raymond Lim yesterday in the second instalment of the sweeping changes arising from the land transport review, is over and above the $20 billion already committed for the ongoing Circle Line, Downtown Line and Boon Lay extension.

Two new underground MRT lines will be built to connect Marina Bay to Woodlands in the north, and Changi in the east. The 27-km long, 18-station Thomson Line will run upwards from Marina Bay through Ang Mo Kio, connecting Kim Seng, Thomson, Sin Ming and Kebun Baru - areas that do not have a direct MRT link. This is expected to be ready by 2018.

Similarly, the 21-km long, 12-station Eastern Region Line will branch out to the right - parallel to the East-West Line - and serve the residential estates of Tanjong Rhu, Marine Parade, Siglap, Bedok South and Upper East Coast. It will be completed by 2020.
In addition, the current North-South and East-West Lines will be extended. The former, which now ends at Marina Bay station, will be extended one kilometre southwards to serve upcoming developments in the area such as the new cruise terminal in Marina South.

As for the East-West Line, it will be extended by another 14 km into Tuas. Both extensions will be completed by 2015.

‘Together with the rail lines now under construction, the new rail lines will double our network from today’s 138 km to 278 km in 2020,’ said Mr Lim. ‘We expect our rail network to carry three times as many journeys, rising from today’s 1.4 million a day to 4.6 million in 2020.’

The government is also speeding up construction of the Circle Line (CCL) and Downtown Line (DTL). Mr Lim said additional resources will be pumped in to bring forward the completion of DTL Stage 3 by two years - from 2018 to 2016 - so that it would be ready just a year after DTL Stage 2 is ready. DTL 3 serves Bedok Reservoir and Tampines, while DTL 2 the Bukit Timah Corridor.

CCL Stage 3, which was due to open from 2010 onwards, will now be ready in mid-2009 to benefit residents in the north and north-east areas. More CCL stations will be opened, such as the Thomson and West Coast stations. Originally, these two shell stations were to be fitted out only when they were deemed to have sufficient surrounding developments.

With these plans firmly in place, Mr Lim said new extensions or stages of new lines would open almost every other year until 2020.

The minister was speaking during a visit to the $290-million Kim Chuan Depot, an underground MRT depot that is the first of its kind in Singapore and the largest in the world. The 11-hectare, four-storey facility took five years to build. It will provide the stabling and maintenance facilities of the Circle and Downtown Lines, as well as house the two lines’ operation control centre.

As for the existing rail network, Mr Lim revealed that all above-ground MRT stations will have platform screen doors installed by 2012 to curb the rising number of train track intrusions.

He also said that as the rail network is expanded, future lines would cost more to build and operate as they would mostly be underground. Mr Lim said his Transport and Finance Ministries would work together to refine the financing framework. A more holistic network approach will be taken when evaluating new MRT lines, instead of the current line or project approach.

‘This would potentially enable future new lines to be implemented a few years earlier than otherwise, so long as the entire rail network remains viable,’ he explained.

Greater contestability in the rail industry will be introduced as well, in order to enhance efficiency and maintain cost competitiveness.

‘A key step in enhancing contestability is to have shorter operating licences, say 10 to 15 years, compared to the existing 30-year licence periods,’ said Mr Lim. ‘Operators will compete for the right to operate rail services. They will have to meet service obligations or risk being replaced at the end of their term.’

A senior executive at SMRT, the dominant rail operator, called the minister’s remarks ‘positive’.

‘More rail lines is good news for everyone,’ he said. ‘As for competition, that is to be expected. But we believe we are well-positioned to bid for the lines because of our operation, maintenance and engineering skills. And in terms of cost management, we are already one of the most efficient in the world.’

SMRT’s licence to operate the North-South and East-West Lines expires in 2028. As for the contestability policy, the Transport Ministry said this would only apply when the current licence expires. Existing contracts will be honoured and ‘any changes will involve discussions with the operator’.

Source : Business Times  - 26 Jan 2008

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Asian exporters brace themselves for slowdown

Asian exporters brace themselves for slowdown

Companies changing how they operate rather than wait for things to get worse
GLOOMY DAYS: Weakening US demand has hit hard in some textile firms. Knitwear factories that will be unable to compete are likely to shut down. — PHOTO: REUTERS

HONG KONG - ASIAN exporters are already feeling the effects of a United States economic downturn - effects that may be magnified by a weak US dollar, volatile world markets and fears that more bad loans may be ticking in the coffers of American companies.
Rather than waiting for things to get worse, companies from Chinese garment businesses to Japanese equipment manufacturers are changing how they operate.

The weakening US demand is clear. American orders for small tractors fell 5 per cent last year at Kubota in Osaka, Japan, and are expected to fall further this year. Orders from the US have been weak for a year at Top Form, the Hong Kong company that is the world’s largest bra manufacturer. And at Aigret Industries, a manufacturer of multi-line phone systems and fax machines in Xiamen, China, orders from the US plunged 30 per cent in the fourth quarter compared with a year ago.

In some industries, the result has been deep gloom. At Evergreen Knitting in Ningbo, China, orders from the US for T-shirts and sweaters abruptly dropped 20 per cent this winter.

‘We anticipate that this year, 10 per cent to 20 per cent of the knitwear factories will have to close due to the inability to compete,’ said Mr Sean Zhu, Evergreen’s sales manager.

In response to the downturn, some companies are pursuing remedies that will affect economic output, like Aigret Industries, which has lengthened next month’s Chinese New Year vacation for its workers to 20 days, instead of the usual 10.

Others are investing in more technological research and developing new models, like Xigo Electric in Zhongshan, China, which manufactures air conditioners and liquid-crystal display television sets.

‘We really felt the impact of the slowdown in the US during the second half of 2007,’ said Mr Stan He, a Xigo sales manager. ‘Orders were generally down by 10 per cent to 20 per cent relative to the same period a year ago.’

Asian exporters lie at the centre of the debate in financial markets over the extent to which Asia has decoupled from the US and can grow strongly even if the American economy slows significantly. The evidence so far is that the effects of a US slowdown will vary widely, depending on each country’s reliance on exports and the extent to which each economy is overheating or stumbling.

China, which has struggled in recent months with rising inflation, has actually benefited from slower exports, although a steeper decline could prove a problem. The Chinese government announced on Thursday that growth eased to 11.2 per cent in the fourth quarter from 11.5 per cent in the third quarter.

The modest slowing, almost entirely because of less brisk growth in exports, helped reduce inflation to 6.5 per cent last month from 6.9 per cent in November, the government said.

But with fixed-asset investment still soaring in China, Mr Xie Fuzhan, the director of the National Bureau of Statistics, said China was still worried that overall growth was too fast to be sustained without inflationary pressures.

NEW YORK TIMES
Source : Straits Times  - 26 Jan 2008

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Growth in rents of Singapore private homes beginning to ease up

Growth in rents of Singapore private homes beginning to ease up
EXPATRIATES and other tenants in private apartments can finally start to breathe easier. Data from the Urban Redevelopment Authority released yesterday showed a subsiding of the sharp rise in rentals for condos in key areas.
Rentals for non-landed property in the coveted core central region, which covers Tanglin and Bukit Timah, for instance, grew just 5.3 per cent, less than half the rate of 12.2 per cent achieved in the third quarter.

The drop in rental growth was not as dramatic for the rest of the central region, though, which slid from 11.9 per cent to 8.8 per cent, and outside the central region - from 11.8 per cent to 8.5 per cent. Overall rents of private homes grew 6.8 per cent from October to December, slowing from an 11.4 per cent rise in the previous period. For the whole of last year, private home rentals surged 41.2 per cent.

Mr Nicholas Mak, the head of research and consultancy at Knight Frank, expects private homes rentals to rise in a more ‘tamed manner’ of 10 per cent to 15 per cent this year.

Still, Ms Tay Huey Ying, director for research and consultancy at Colliers International, reckons rentals of luxury homes will rise by 25 per cent to 30 per cent this year.

Meanwhile, rentals for the HDB market continued to grow strongly.

The median rent for a four-room flat rose from $1,400 to $1,500 in the fourth quarter, while that for a five-room unit also grew $100 to hit $1,700.

From October to December, 3,300 flat owners were given approval to rent out their flats. The total number of flats being rented out rose 7 per cent to 17,400 in that period.

The chief executive of property agency PropNex, Mr Mohamed Ismail, expects rentals to rise by 15 per cent to 20 per cent for the whole of this year, as expats pushed out by high rentals for condo units look for cheaper options.
Source : Straits Times  - 26 Jan 2008

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Increases in cost of Singapore offices, shops starting to slow down

Increases in cost of Singapore  offices, shops starting to slow down

By Fiona Chan, Property Reporter

RESPITE may be in sight for those who have been griping about the surging cost of doing business in Singapore.
Latest figures show that the increases in the cost of shops and offices eased in the fourth quarter of last year, in line with a general slowdown in the property market.

Prices and rentals for these commercial properties soared for most of last year, especially for office space, which reached an all-time high amid an acute short supply.

This prompted complaints from businesses and sparked off worries about Singapore’s competitiveness.

But official data released by the Urban Redevelopment Authority yesterday may finally calm these jitters.

Rentals for offices rose by 10.9 per cent between October and last month, down from 14.8 per cent in the previous three months - which was a decade-high jump, said Mr Li Hiaw Ho, the executive director of CBRE Research.
The slowing could be ‘the initial sign that the numerous efforts by the Government to cool the sector are taking effect’, said Ms Tay Huey Ying, the director of research and consultancy at Colliers International.

These moves include releasing more land for offices as well as immediate steps such as short-term leases in existing buildings and temporary office plots.

Colliers’ own data shows that office tenants are becoming increasingly resistant to further rent rises. Rents for office space in several areas, including Grade A buildings in Raffles Place, have seen declining growth rates for the past two to three quarters, said Ms Tay.

She said this is because firms are more willing to explore alternative business space locations, including business parks and high-tech industrial space.

For the whole year, rentals for office space jumped by 56.1 per cent. The rental index is now at an all-time record of 175.1 points, said Mr Li.

Ms Tay expects growth to moderate next year as tenants hold out for the expected large new supply in 2010. She is forecasting a rise of up to 20 per cent for Grade A office space.

As for shops, the rise in rentals has all but peaked. Overall rentals rose by 0.6 per cent in the fourth quarter, compared with 8.1 per cent in the previous quarter.

In Orchard Road, rental growth was almost flat at 0.3 per cent in the quarter. Shops on the fringes saw slightly higher growth, but suburban retail space did the best with a 1.3 per cent rise.

For the whole year, shop rents rose by 18.2 per cent.

But landlords wanting to raise rents this year are likely to face strong resistance from retailers, said Mr Nicholas Mak, the director of research and consultancy at Knight Frank.

‘With the projected large supply coming on stream next year, retailers would have more space choices and would resist large increments in retail rents.’

He expects rents to increase by 5 to 10 per cent for this year.
Source : Straits Times  - 26 Jan 2008

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Singapore Home prices on city fringe, suburbs still rising strongly

Singapore Home prices on city fringe, suburbs still rising strongly

PRICE increases for high-end homes in the central areas may be easing, but not so for homes on the city fringe and suburban apartments - where prices are still rising strongly.
Urban Redeveloment Authority figures showed growth in the prices of uncompleted apartments in the central areas slid from 7.8 per cent to 7.6 per cent from October to December. Price increases for city fringe units, on the other hand, rose from 7.6 per cent to 8.3 per cent.

Growth in the prices of uncompleted apartments in suburban areas also crept up to 9.2 per cent from 9.1 per cent.

Dr Chua Yang Liang, head of research, South-east Asia, at Jones Lang LaSalle, said home prices in the suburbs would keep growing by 24 per cent to 26 per cent this year. This would be supported by home owners looking for new homes after being disloged by collective sales.

Last year, 14,811 new homes were sold.

Mr Li Hiaw Ho, executive director of research at CB Richard Ellis, meanwhile, expects price rises and sales volume to moderate this year.
‘Luxury prices are likely to stabilise at current levels, while mid-tier and mass market prices may have the potential to rise by 10 per cent to 15 per cent,’ he said.
TAN HUI YEE

Source : Straits Times  - 26 Jan 2008

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Buyers paying $22k over valuation for Singapore resale flats

Buyers paying $22k over valuation for Singapore resale flats

Median cash over valuation amount up a third; trend filters to outlying areas

By Tan Hui Yee, Housing Correspondent

BUYERS of resale Housing Board (HDB) flats paid a median amount of $22,000 in cash over the property’s valuation for their new homes from October to last month, a whopping 30 per cent rise from the previous quarter.
The good news for HDB flat owners in outlying areas is that this trend is filtering outwards towards them from the most popular districts downtown.

HDB data released yesterday showed that 86 per cent of all resale transactions in the fourth quarter of last year required cash payments over valuation, up from 80 per cent in the previous quarter.

However, greater resistance from buyers to the surging prices of resale flats last year resulted in a 13 per cent drop in the number of flats sold, to 6,700. For the whole of last year, 29,436 flats changed hands.

In fact, despite the overall rise, the median cash over valuation (COV) of some units in traditionally more popular estates such as Queenstown actually dropped. The median COV for a five-room flat in that area, which hit $110,000 in the July to September period, actually shrank to $79,000 in the period after that - albeit off a high base.

This, said the assistant vice-president of ERA Singapore, Mr Eugene Lim, showed the extent of the current market resistance towards high COVs.
‘Very often, the deal cannot be closed or takes much longer to close because of unrealistic sellers demanding high COV transactions,’ he said.

The chief executive of PropNex, Mr Mohamed Ismail, said another reason for this phenomenon is that the number of flat buyers with thick wads of cash in hand - mostly due to the collective sales of their private homes - is shrinking.

Most people buying HDB flats rely heavily on home loans to finance their purchase.

Resale prices of HDB flats rose 5.7 per cent during the quarter to bring the year’s growth to 17.5 per cent.

Last year’s growth is the biggest in a decade but property agents are not expecting a repeat for now as the HDB is offering at least 4,500 new flats for the first half of this year to calm buyers worried that housing is growing out of their reach.

These flats, which are highly subsidised, have an advantage over resale flats because they do not require buyers to fork out cash over valuation.

While ERA’s Mr Lim expects the price of resale flats to grow by 5 to 8 per cent this year, Mr Ismail reckons it would move by about 10 per cent.

Mr Ismail pointed out: ‘The economy is still doing well. And the labour market is tight.’

Source : Straits Times  - 26 Jan 2008

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Singapore SMRT sees good opportunity in plan to build new rail lines

Singapore SMRT sees good opportunity in plan to build new rail lines

By Grace Ng
COST CHALLENGE: SMRT’s gains slide 5.3 per cent as rising diesel prices add to expenses in the third quarter. — ST FILE PHOTO

SMRT Corp yesterday expressed confidence that it was ‘well-positioned’, as the dominant transport operator in Singapore, to compete in the tender to operate services on two new rail lines that the Government would build by 2020.
Ms Lim Cheng Cheng, SMRT executive vice-president and chief financial officer, said new plans to double Singapore’s existing rail network offered a ‘good opportunity’ for SMRT to participate in the new infrastructure system.

She said in a conference call discussing the company’s third-quarter results, that with more than two decades of operating efficient rail and other transport services behind it, SMRT was ‘confident it will be competitive in the new framework’.

Singapore will invest $20 billion to build two new subway lines by 2020.

It will also shorten the licence terms of railway operators from 30 years to as low as 10 years to make operators more efficient and ‘make the rail industry more contestable’, announced Transport Minister Raymond Lim yesterday.

Right now, however, SMRT is grappling with a different kind of challenge - rising diesel prices that pushed up its third-quarter operating costs and bit into profits.

Net profits for the three months ended Dec 31 slid 5.3 per cent to $38.3 million, from $40.4 million a year earlier.

This was in spite of a 7.3 per cent jump in third-quarter revenues to $202 million - boosted by more commuters taking the MRT and buses, as well as growth in its rental and advertising businesses.

But SMRT’s third-quarter bottom line was dragged down by higher diesel costs and repair and maintenance expenses. This drove up total operating costs by 4 per cent to $159.2 million.

The group said in a statement yesterday that it expects operating costs to rise further in the fourth quarter due to the volatile and rising price of diesel.

Earnings per share fell to 2.5 cents, compared with 2.7 cents a year earlier. Net asset value per share was flat at 42.4 cents, compared with 42.3 cents as at March 31 last year.

Ms Lim said the Government’s initiative - also announced yesterday - to add 93 additional train services during the morning and evening peak hours each week to reduce congestion, will not have a ‘material impact’ on its total operating costs.
Source : Straits Times - 26 Jan 2008

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Prospect of bidding war sends Singapore Straits Trading to record high

Prospect of bidding war sends Singapore Straits Trading to record high

By Lee Su Shyan, Assistant Money Editor

THE Straits Trading Company’s share price hit a record high of $5.89 yesterday on speculation that the low-profile firm may soon be at the heart of a bidding war.
On Thursday night, the Lee family, who founded OCBC Bank, said they were making a counter-offer of $5.76 a share for the firm.

This is just a tad higher than the offer of $5.70 from the family of the late Dr Tan Chin Tuan, via Tecity, earlier this month.

Dr Tan ran OCBC for many years and the two families were very close for decades.

But this latest move by the Lee family has raised conjecture that the two families have grown apart.

As well, given that the second offer is only marginally better than the first, the bets are on that the bids will go higher.

Yesterday’s share price was the highest that the counter has achieved in at least 20 years.

It ended 18 cents higher at $5.89, after hitting an intra-day high of $6.11.

However, volume was relatively low, with only about 166,000 shares traded. In the past six months, the average daily volume has been about 253,000 shares.

It is unlikely that the buyers were either the Tan family or the Lee family. If they buy at a higher price, they will have to raise their offers correspondingly.

News of the Lee family’s bid was released on Thursday night; trading was then halted for the morning session yesterday. Trading resumed in the afternoon.

There could be investors out there who reckon that the company - which has tin mining and smelting operations in Malaysia and property interests - is undervalued.

Yesterday, Straits Trading - which also owns and operates hotels such as Rendezvous Hotel Singapore - said it had signed an agreement to manage a new four-star hotel to be built in Shanghai.

To be branded as part of Rendezvous’ The Marque Collection of Hotels, it will be named the Marque Hotel Yu Gardens and is due to open in the middle of next year. It will be located near the famous Yu Gardens and the Bund area.
Source : Straits Times - 26 Jan 2008

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