Citi sees no oversupply of Singapore homes in next two years

Citi sees no oversupply of Singapore homes in next two years 

It estimates only 60% of the 30,000 units forecast will be completed, so fall in prices will be modest

By Joyce Teo, Property Correspondent 

 
ANALYSTS from Citigroup have stuck their necks out to dismiss some market predictions of a crippling property glut in the next two years.
Official figures show that around 30,000 homes will be completed in the next two years, but Citi reckons only around 60 per cent will likely be ready.

If the bank’s forecast is accurate, it could mean that downward pressure on prices will not be as great as some had feared.

Citi’s report on Singapore property, which came out on Tuesday, pointed to where previous predictions may have got it wrong.

It stated that by the end of March, there were 6,000 collective sale units that had yet to be demolished.

Some of the delays are because of legal challenges over sales, as well as developers extending lease periods for owners due to the weak primary market, Citi said.

It estimated that there will be 8,200 units completed next year and 10,200 in 2010, assuming no further collective sales are done.

These numbers are way below market expectations of 12,500 units next year and 17,500 units in 2010, it said.

These higher supply numbers had led many experts to conclude that an oversupply was on the cards.

But Citi stated: ‘We have always argued that such estimates are not always accurate and they often get revised downward over time.’

However, it did not elaborate further on the reasons for its lower supply projections.

Knight Frank director of research and consultancy Nicholas Mak said the direct impact of the supply completion figures on prices is limited because most of these homes would already have been sold.

But a large supply of homes for occupation would negatively affect rentals, and this would in turn hit prices, he added.

Savills Singapore also believes the supply figures released by the Urban Redevelopment Authority are too high.

Mr Ku Swee Yong, its director of marketing and business development, said completion delays in collective sales, as well as delayed launches, have not been factored in.

‘There are insufficient construction resources, which means there will likely be delays,’ he added.

‘Prices of mid- to high-end properties will fall but not to the extent of the 30 per cent to 40 per cent drop predicted by some analysts.’

Banks like Credit Suisse and Barclays Capital have forecast drops of up to 40 per cent in rents and prices, but Citi tips a fall of up to 30 per cent, and largely only in high-end homes.

Citi expects this sector will suffer from falling demand, particularly as expatriates and locals keep downgrading.

That will put downward pressure on rents of prime homes and further pressure on prices, it said.

Citi also said a long downturn like the one that caught out many buyers in the late 1990s and early 2000s is unlikely.

This is because resale volumes are still at above average levels, reflecting strong genuine demand. There is no sign of overbuilding or an overall housing shortage.

Also, mass market homes remain highly affordable and are supported by high rental yields of more than 5 per cent, Citi said.

‘Due to the sharp rise, we believe high-end residential is likely to suffer the brunt of the 20 per cent to 30 per cent price decline while the mass market should remain fairly firm.’

The mid-tier segment is likely to fall by 10 per cent to 20 per cent, it said. These are from a high base.

Luxury home prices have surged by 149 per cent since the troughs in 2004.

Prices in the mid-tier and mass-market segments rose by a still robust 79 per cent and 39 per cent respectively.
 
Source : Straits Times  - 26 Jun 2008

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Singapore now has 77,000 millionaires

Singapore now has 77,000 millionaires 

Figure represents a rise of 15 per cent; each individual has over US$1m in net assets

By Nicholas Fang
 
SINGAPORE’S millionaires club last year swelled by about 10,000 people, or 15.3 per cent, to 77,000, or 1.7 per cent of the population here.
The Republic lags far behind more populous countries, such as the United States, which has over three million millionaires, but Singapore still boasts one of the world’s top 10 fastest-growing millionaires clubs.

The latest surge in the number of millionaires here - defined as those with more than US$1 million (S$1.3 million) in net assets - puts Singapore joint seventh globally in terms of growth in numbers of such wealthy individuals, said a new report.

Assets counted exclude a person’s main residence.

The annual World Wealth Report, released by Merrill Lynch and research firm Capgemini, found last year’s growth was lower than the 21.2 per cent boom in 2006.

However, Singapore’s growth was still higher than the global growth of 6 per cent to 10.1 million last year, the report said. The total wealth of these well-heeled Singapore residents grew by 17 per cent to US$379 billion.
‘The average wealth of a Singapore high net-worth individual was US$4.9 million at the end of last year,’ said Mr Kong Eng Huat, South Asia market managing director with Merrill Lynch Global Wealth Management.

Speaking at a press conference yesterday, Mr Kong said: ‘This is a strong performance compared to the global average of US$4.04 million per individual last year, the first time the average has exceeded US$4 million.’

The Asia-Pacific region as a whole also beat the global performance, turning in millionaire population growth of 8.7 per cent to 2.8 million and a 12.5 per cent rise in combined wealth of the region’s wealthy to US$9.5 trillion.

Asian countries also dominated the list of markets with the fastest- growing millionaire populations. India topped the list, with China in second spot and South Korea and Indonesia in fourth and fifth.

In absolute numbers, the US is top of the league with an estimated 3.03 million millionaires. But growth was a mere 3.7 per cent over 2006.

Mr Kong said: ‘In the Asia-Pacific region, wealth is being created at an unprecedented rate. We are in the midst of a multi-year growth trajectory in terms of the number of high net-worth individuals in this part of the world, and also their combined wealth.’

Mr Raj Sriram, head of private banking at RBS Coutts Singapore, said it had seen continued growth among its clients’ funds. ‘At the macro level, wealth creation in Asia shows no signs of slowing.’

He added that the growing number of wealthy individuals in Asia, and Singapore in particular, was one of the reasons why the private bank had moved its international headquarters from Switzerland to Singapore two years ago. ‘Last year, we grew our business by more than 50 per cent and, going forward, we expect a healthy growth in the medium term.’

Dr Jannie Tay, executive vice-chairman of The Hour Glass watch chain, said her clientele largely comprised wealthy individuals. The chain’s business has grown in tandem with the growth in number of such individuals. Dr Tay said annual growth had been 15 to 20 per cent in the last five years.

Source : Straits Times  - 26 Jun 2008

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Gillman en bloc sale to proceed

Gillman en bloc sale to proceed

Judge says minority owners did not provide adequate reasons to stop sale
By MICHELLE QUAH
THE High Court has dismissed an appeal by minority owners of Gillman Heights Condominium to stop its en bloc sale.
 
High rise tussle: Gillman Heights is set to be sold to CapitaLand, Hotel Properties and two private funds 
This means that the $548 million sale of the development to CapitaLand, Hotel Properties and two private funds is set to go through.

Justice Choo Han Teck, in his judgment yesterday, said that he was ’satisfied’ that the appeal by the minority owners ‘must fail’, as they did not provide adequate reasons as to why he should stop the sale.

The Strata Titles Board (STB) had approved the collective sale of the 607-unit, 99-year leasehold estate late last year. But a group of minority owners, represented by Senior Counsel Michael Hwang, had appealed that decision.

They argued that the STB had erred in approving the sale. They said that collective sale rules do not apply to Gillman Heights, which is an former HUDC estate. They also argued that insufficient notices were put up informing owners of the proposed sale and that the collective sale agreement - signed by the consenting owners - was not validly extended before the deal was brokered with the CapitaLand consortium.

Justice Choo ruled yesterday that the law does not mean to treat privatised HUDC estates differently from other private strata developments with a management corporation. He said that a privatised HUDC estate can participate in the benefits of an en bloc sale if the requisite conditions are met. He also agreed with the STB’s ruling that sufficient notices had been posted and that the collective sale agreement had been validly extended.

The minorities had also argued that the sale was done in bad faith. They said that the National University of Singapore (NUS), which owns a sizeable chunk of Gillman Heights and had agreed to the en bloc sale, has a 15 per cent stake in Ankerite, the entity that purchased Gillman Heights.

Justice Choo noted yesterday that NUS’s relationship with the buyer - which came to light after the STB approval - was not presented before the STB at the relevant time. ‘A court deliberates only on the basis of the evidence before it,’ he said. He said that it was strictly up to the STB to judge if there was an act of bad faith by reason of the relationship between NUS and Ankerite - but that he was not persuaded that the board should hear the issue again.

Justice Choo also agreed with the STB that there was no bad faith regarding the sale price of Gillman Heights, as it was $20 million above the reserve price.

The minorities had also argued that one of the STB board members, Michael Ng of Savills (Singapore), was a real estate valuation professional who had worked on projects involving the consenting owners’ lawyers.

But Justice Choo said: ‘I am of the view that it is too tenuous an objection. Professionals cannot avoid working on the same projects. It does not follow that they necessarily agree or have reasons to be biased or prejudiced against other professionals.’

Gillman Heights owners will get between $870,000 and $950,000 per unit in the en-bloc sale. But many of those objecting to the sale say that it is more important for them to be able to keep their homes.

 
Source : Business Times  - 26 Jun 2008

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Industrial site at Singapore Ubi Ave 4 now available

Industrial site at Singapore Ubi Ave 4 now available

By ARTHUR SIM

THE Urban Redevelopment Authority has released an industrial site at Ubi Avenue 4 through the reserve list of the Government Land Sales Programme. The move follows the award of a nearby industrial site at Ubi Avenue 4/Ubi Road 2 in April for $88.74 per sq ft per plot ratio (psf ppr) or $23.9 million. Both sites have 60-year leases.
Chesterton International director (industrial) Albert Yeo believes the new site could see bids of about $100 psf ppr if or when it is triggered and put up for tender. And Mr Yeo reckons interest could be high. Already, the Vertex project in the same area has been selling well. Upper-floor units in the 552-unit eight-storey flatted and ramp-up factory development are going for $320-$360 psf, and ground-floor units for $460-$600 psf.

Explaining the demand, Mr Yeo said: ‘Many businesses are now buying space instead of renting - to avoid rental hikes.’ Also, businesses that were previously located in CBD-fringe office space have migrated to industrial estates, he said. ‘We see a lot of SMEs moving in.’

The build-quality of new flatted factories has improved vastly, he added. ‘They are attracting businesses in electronics, media and distribution.’ Colliers International director (industrial) Tan Boon Leong also believes the general outlook for the industrial sector is good.

 
 
Colliers has been appointed by 3M Singapore to sell a freehold industrial site at 9 Tagore Lane by expression of interest. Mr Tan expects interest from developers and investors because the 156,188 sq ft site presents a ‘rare’ opportunity. It is now occupied by a three-storey warehouse and office building with a total gross floor area of 126,033 sq ft, but can be redeveloped into a four-storey light industrial building with a gross floor area of up to 310,000 sq ft.

The capital appreciation for similar freehold developments is 5-10 per cent so far this year, according to Mr Tan. While there is no indicative price for 9 Tagore Lane, strata-titled freehold units in the area have recently changed hands at $280-$300 psf, he said.

Separately, URA said yesterday it has awarded the tender for the residential site at Woodleigh Close to Frasers Centrepoint, which submitted the highest bid of $270 psf ppr or $87.68 million.

Source : Business Times  - 26 Jun 2008

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YTL’s Sentosa villas to start from $12m each

YTL’s Sentosa villas to start from $12m each

Sandy Island villas are being designed by Italian architect Claudio Silvestrin
By KALPANA RASHIWALA

MALAYSIA’S YTL Corp will launch later this year 18 luxury waterfront villas at Sandy Island on Sentosa Cove and prices are expected to start from $12 million for a villa or at least $2,000 per square foot (psf) of land area, BT understands.
 
Luxurious: Artist’s impression of one of the villas, which will be built on 99-year leasehold land plots 
YTL’s spokeswoman declined to comment on the planned pricing, but confirmed that the plan is to launch the project later this year.

The development will nestle within a tropical rainforest and boast upscale finishes and fixtures. It is being designed by renowned Italian architect Claudio Silvestrin, famous for designing Giorgio Armani boutiques worldwide as well as the Museum of Contemporary Art in Turin.

YTL has also appointed celebrated Australian landscape architect Jamie Durie for Sandy Island.

Each two-storey waterfront villa will have a basement and a terrace floor, and feature a double-volume living room facing a private berth. ‘Each home will have a private car lift, a passenger lift, kitchen and wardrobes personally selected by Mr Silvestrin,’ YTL’s spokeswoman said.

The villas will be built on 99-year leasehold land plots ranging from about 6,000 sq ft to 10,000 sq ft each and will have four or five bedrooms with en-suite bathrooms, a pool and timber patio set within a waterfront garden designed by Mr Durie. Sandy Island will feature more than 30 trees transplanted from the Resorts World integrated resort site.

Sandy Island is located in Sentosa Cove’s Southern Precinct. YTL also has another villa development in the waterfront housing district’s Northern Precinct on the Lakefront Collection site abutting Serapong Lake. This project is expected to comprise more than 10 villas which will boast views of Serapong Golf Course. The project is still in the design development stage and could be released next year.

On the mainland, YTL is looking at different proposals by world-renowned architects to develop an ‘iconic lifestyle quality development’ on the Westwood Apartments site at Orchard Boulevard.

YTL inked a deal in November last year to buy the 62,179-sq-ft freehold property for $435 million, which worked out to $2,525 psf of potential gross floor area inclusive of an estimated $4.6 million development charge at the time. Westwood Apartments’ collective sale was approved by the Strata Titles Board earlier this week. The deal was brokered by Savills Singapore. Law group Rodyk & Davidson acted for the majority owners.

Source : Business Times  - 26 Jun 2008

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East Asia leaders resolve to keep liveable cities dialogue alive - Singapore

East Asia leaders resolve to keep liveable cities dialogue alive - Singapore

New policy institute can be a platform to facilitate sharing of experiences: Mah
By LEE U-WEN
THE first-ever East Asia Summit conference on liveable cities might have ended yesterday, but the journey for all 16 countries in the bloc is only just beginning.
 
Mr Mah: Singapore can be a showcase of many different experiences - not just the positive ones; cities can also learn from our negative experiences and mistakes 
Singapore, which hosted the two-day event, will set up an informal network of like-minded cities to create more opportunities to meet and share knowledge on energy security, climate change and sustainable development, said National Development Minister Mah Bow Tan.

This after the participants - which included ministers, mayors and governors - made a renewed call for stronger political will for their countries to develop cities in a sustainable manner.

The countries that will be part of this new network include those from the 10-member Association of Southeast Asian Nations (Asean), together with Australia, New Zealand, China, India, Japan and South Korea.

Mr Mah, who was also the conference’s chairman, said at a plenary session yesterday afternoon: ‘There is a sense of urgency or, as one speaker put it, a sense of crisis at the moment. Although we all come from different cities, we face common challenges on how we can grow our city but at the same time make it liveable.’

Ensuring the discussions and ideas arising from the conference are kept alive will be one of the first tasks of the Centre for Liveable Cities (CLC), a new policy institute set up by the National Development and Environment and Water Resources ministries.

‘We have decided that we should not let this dialogue end here. We can continue our talks through e-mail, joint projects, studies, research, host visits. And in this respect, the CLC can be one of the platforms to facilitate this sharing of experiences,’ said Mr Mah.

Among the many East Asian policymakers who shared their city’s plans at the plenary session was Jakarta governor Fauzi Bowo, who called for bureaucratic change in the Indonesian capital’s provincial government.

‘There also has to be a mindset change among our citizens. A shift in thinking will result in better cooperation and synergy among stakeholders. The more prosperous the community, the better educated they will be - which itself will bring a better understanding of the importance of sustainable development,’ he said.

For Melbourne mayor John So, the greatest challenge facing the Australian city at present is how to reduce emissions created by buildings. He shared how energy use in residential and commercial buildings accounts for 95 per cent of greenhouse gas emissions from the municipality.

While recognising that cities are different in structure, culture, economics, geography and climate, Mr Mah said that it was time to find the most viable solution for each city.

‘Singapore can be a showcase of many different experiences - not just the positive ones; cities can also learn from our negative experiences and the mistakes that we have made. Through this informal network, all of us will be the better for it,’ he said.

All the new ideas and suggestions arising from these events will be compiled and submitted to the East Asian leaders at their next summit in Bangkok this December.

 
Source : Business Times  - 26 Jun 2008

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Singapore UOL to invest up to $500m in overseas hotels

Singapore UOL to invest up to $500m in overseas hotels

It anticipates huge growth in the hospitality industry
SINGAPORE developer UOL Group said yesterday that it will spend up to $500 million over three years acquiring hotels in the United States, Australia and throughout Asia, in expectation of a boom in global travel.
‘We see tremendous growth in the hospitality industry, especially from the Asia-Pacific where there is a growing group of new rich, and they all want to see the world,’ said UOL’s president and chief executive officer Gwee Lian Kheng at the Reuters Global Real Estate Summit in Singapore.

‘Budget air travel is also growing, and we think that with all these factors, tourism in the world will continue to boom,’ said Mr Gwee, whose firm owns the Pan Pacific global hotels brand and who also heads hospitality group Hotel Plaza.

The firm, which paid US$165 million in January for a Singapore residential land site, sees continued strength in the sector, even as first-quarter private home sales in Singapore dipped to a five-year low amid fears of a global recession.

‘If you tell me that the market is dead, I disagree because we’re still a fairly strong economy compared with other parts of the world,’ said Mr Gwee, a 35-year property veteran.

UOL, whose largest shareholders are Singapore’s number-two bank United Overseas Bank and its chairman Wee Cho Yaw, has a market value of about US$2 billion.

It is among the few developers to have continued to put up Singapore residential projects for sale this year, even as most large builders delayed sales to wait out a moribund market.

The firm’s luxury Nassim Park project, launched in early June, is now 55 per cent sold and at average prices of about $3,000 per square foot, Mr Gwee said, but he acknowledged that sales have slowed significantly compared to a year ago.

UOL has moderated its asking prices due to weaker demand, but has been able to maintain its profit margins at well over 15 per cent, he said, adding that UOL will for the next three years focus on the low and mid-tier segments where demand is expected to be stronger.

‘Prices in the luxury market could see a slowdown, but the mid and lower-tier will still go up, partly because of all the people who sold their homes en bloc last year,’ Mr Gwee said.

Thousands of Singaporeans collectively sold their apartment blocks to developers in a ferocious land-grab over the past two years in en bloc sales, and some developers believe these sellers have yet to purchase replacement homes.

UOL now has about 80 per cent of its investments in Singapore and the remainder overseas, and is also looking abroad for growth but prefers to do so defensively, Mr Gwee said.

Its top pick now is China, particularly its second-tier cities. The firm is also looking to acquire distressed US assets such as offices or hotels at a good price, but will wait for uncertainties caused by the US sub-prime mortgage crisis to clear up before doing so.

‘Right now it’s still too early. The sub-prime issue is still not resolved and there’s still a lot of currency risk when you buy overseas, so we’ll let all these clear up first,’ Mr Gwee said. — Reuters

 
Source : Business Times  - 26 Jun 2008

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CapitaLand invests RM595m in Sungei Wang - KUALA LUMPUR

CapitaLand invests RM595m in Sungei Wang - KUALA LUMPUR

Acquisition enables creation of pure-play Malaysian retail Reit by year end
By PAULINE NG
IN KUALA LUMPUR
CAPITALAND has acquired its third Malaysian retail asset, buying nearly 62 per cent of the total retail area of Sungei Wang Plaza, located in the Kuala Lumpur city centre, for RM595 million (S$250 million).
 
In the heart of KL: Sungei Wang Plaza’s eclectic mix of shops continues to attract locals and tourists despite the emergence of newer flashier malls 
The acquisition from a private entity called Sungei Wang Plaza Sdn Bhd includes the car parks and was done through an asset securitisation structure, which would see Sungei Wang held by a special purpose vehicle called Vast Winners, according to a CapitaLand statement yesterday.

Property consultants said that the deal was a positive sign for the local market, and while they expected CapitaLand to add value to Sungei Wang Plaza, the company was also gaining from a solid cash-flow acquisition.

‘They’re buying into a good stream of cash flow,’ Zerin Properties chief executive Previndran Singhe told BT, adding that there is still upside in the complex, particularly with CapitaLand’s expertise in mall management.

In the media statement, CapitaLand Retail chief executive Pua Seck Guan said much the same, noting that through CapitaLand’s proactive management and by leveraging on its retail real estate management expertise, ‘there are tenancy remixing opportunities to create significant value at Sungei Wang’.

CapitaLand had already acquired Gurney Plaza in Penang and Mines Shopping Fair in Selangor. With the Sungei Wang Plaza acquisition, it has now accumulated assets totalling about RM2 billion. This puts it on track to establish a proposed pure play Malaysian retail Reit by year end, Mr Pua said.

Of the three, Sungei Wang Plaza, which roughly translates to river of money, is the cream of the crop. Located in the city’s Golden Triangle at the Bukit Bintang shopping district, its annual visitors surpass 24 million, while its occupancy is close to 100 per cent. It is also easily accessible as it is located next to a monorail station, and according to some, enjoys one of the highest rentals on a per square foot basis in the city.

Despite the emergence of newer, flashier malls, the long-established plaza continues to attract locals and tourists who like its eclectic mix of shops.

In Malaysia, CapitaLand has a listed commercial Reit - QuillCapita - via a joint venture with local partner Quill Group. However, that Reit is more of a pure-play commercial Reit because it prefers not to take on retail malls which require shopping centre management skills.

On the asset securitisation structure, CapitaLand said that Vast Winners has issued three tranches of senior medium-term notes - Classes A, B, and C - as well as a tranche of subordinated Class D medium- term notes.

Its wholly owned subsidiary Gain 888 Investments has fully subscribed for the Class D notes in the principal amount of RM338 million, while the senior medium-term notes were fully taken up by a Malaysian financial institution, which has asked not to be identified.

 
Source : Business Times  - 26 Jun 2008

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Singapore Q2 investment sales of properties slide, but money waiting in the wings

Singapore Q2 investment sales of properties slide, but money waiting in the wings

Price mismatch expected to keep volume of deals low
By KALPANA RASHIWALA
(SINGAPORE) Total investment sales of Singapore real estate, a gauge of developers’ and investors’ medium- to long-term confidence in the property sector, have dipped to $3.7 billion so far this quarter (up to June 20), or 58 per cent lower than the Q1 2008 figure of $8.9 billion, according to figures compiled by CB Richard Ellis.
 
 
The Q2 showing is the lowest quarterly number in three years, and brings the total so far in the first-half to around $12.6 billion.

CBRE executive director (investment properties) Jeremy Lake predicts the full-year figure could come close to around $20 billion - or less than half the record $54.4 billion of investment sales deals clocked last year

Putting things in perspective, Mr Lake reasons that ‘last year was arguably a one-off year, so even if we hit $20 billion this year, it would be a very active year and the third highest performance in a decade’.

‘We’ll continue to see the sale of office, retail and industrial income-producing assets and possibly hotels during second-half 2008 but the volume will be lower (than the first half) because of a price mismatch between sellers and buyers.

‘There’s still plenty of institutional money ready to invest but pricing sought by institutional investors, including property funds, is lower than that being asked by most sellers. This means the volume of deals is low,’ Mr Lake says.

The property consultancy defines investment sales as deals with a value of at least $5 million, comprising government and private sales, buildings and land, strata and en bloc. It also includes change of ownership of real estate via share sales.

Public-sector land sales accounted for 34 per cent or $4.3 billion of total investment sales so far this year.

The office sector contributed about $5.2 billion or 41 per cent of year-to-date investment sales. Major transactions include The Atrium @ Orchard bought by CapitaMall Trust for $839.8 million or $2,249 psf of net lettable area and 71 Robinson Road’s purchase by Germany’s Commerz Grundbesitz Investmentgesellschaft for $743.75 million ($3,125 psf). ‘Investment activity in the office sector will continue to be healthy, albeit at a slower pace. The more active investors in the short- to-medium term would be the core and core-plus investors which underwrite acquisitions with lower debt levels, given the current climate of tighter bank lending and moderate increases in office rentals going ahead,’ Mr Lake reckons.

The $5.2 billion of office investment sales struck so far in H1 2008 is roughly 36 per cent of the $14 billion-plus achieved for the whole of last year.

In contrast, the residential sector has seen a much bigger slowdown. The $4.2 billion of deals in H1 2008 (up to June 20) is just 13 per cent of the $33.3 billion achieved for full-year 2007.

Residential investment sales done this year include around $2.1 billion of sites sold either through the Government Land Sales (GLS) programme or at Sentosa Cove; around $141 million of collective sales sites (compared with some $14 billion for the full-year 2007); $817 million of landed home sales (including Good Class Bungalows); and around $1.1 billion of apartment/ condo sales (units costing at least $5 million each).

Market watchers note that developers’ appetite for residential sites has weakened considerably in the first-half of this year against the backdrop of weak home sales.

Looking ahead, CBRE’s Mr Lake says: ‘The delay of new residential launches by developers, coupled with rising construction costs and tighter credit terms, would continue to curtail developers’ interest for residential sites. Hence, activity in the collective sales market is likely to remain lacklustre in H2 2008.’

Agreeing, Credo Real Estate managing director Karamjit Singh says: ‘There is a lack of availability of prime residential sites in the en bloc sales market at prices reflective of today’s sentiment. Most of the reserve prices set by owners for en bloc sites available for sale today were agreed last year, when the market was still buoyant.’

‘Residential sites are more likely to be sold in H2 from the GLS slate, by virtue of the fact that the GLS Programme is the only source of supply of sites at prices that reflect today’s market. Of course, if prime private-sector sites at current market-adjusted prices are available, there should be takers for those too.’

The industrial property market chalked up $943 million of investment sales deals between Jan 1 and June 20 this year. Ascendas Reit, Mapletree Logistics Trust and Cambridge Industrial Trust were among the major buyers.

Colliers International managing director (Singapore and North Asia) Dennis Yeo estimates that up to yesterday, the tally so far this year would have crossed the $1 billion mark and that a further $1 billion or more of industrial property investment sales deals are likely to be announced in H2 2008. ‘Some of the big overseas funds that have been buying office properties in Singapore in the past few years are now also looking at industrial, logistics and business park assets.

‘With tighter bank financing these days, smaller office blocks and industrial or business park buildings costing $20-200 million each are in greater demand among funds. Industrial property is also more in favour now because it offers higher yields than offices and is a better match for these funds’ lower risk appetite in the current climate,’ Mr Yeo added.

Source : Business Times  - 26 Jun 2008

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