Singapore parking not as costly as in other cities

Singapore parking not as costly as in other cities

By Jermyn Chow

SINGAPORE cars may be among the world’s most expensive, but parking in prime areas here is far less taxing on the wallet.
Drivers here pay far less than their counterparts in cities such as London, Sydney or Tokyo, according to the first major survey of parking charges worldwide.

Property consultant Colliers International, which did the study, ranked Singapore 52 out of 138 cities for how much drivers paid to score a lot in the city centre for a day.

Drivers pay an average of $27.16 for eight hours, far less than the top price of $92.63 in London.

In the Asia-Pacific, it ranked seventh.

Also scoring well is Singapore’s monthly season parking rate - at $247.60 a month. This falls far short of charges in many cities including Sydney ($1,054.02) and Hong Kong ($1,009.94).

Analysts spoken to said that prices here remain comparatively cheap - in tandem with a relatively cheaper cost of living.

This despite parking rates increasing by 10 to 20 per cent over the past two years.

Workers in the central business district (CBD) here also enjoy the luxury of more parking spaces: about 165 per 1,000 jobs, compared to space-short Hong Kong, which has only 23.

Carpark operators say they have no immediate plans to raise charges, much to the relief of motorists.

Said marketing executive Alvin Lam, 31, who drives to his workplace in Shenton Way every day: ‘I have already paid so much to buy a car and on ERP charges, I cannot imagine having to spend even more on parking.’

The respite could be brief, warned Mr Nicholas Mak, property consultant Knight Frank’s director of research and consultancy - a looming carpark crunch in the CBD could drive up parking charges.

Upcoming office buildings and shopping malls - especially those in Marina Bay - have to restrict the number of parking spaces they can have, under tightened regulations.

The Market Street Carpark, which has 704 parking lots in the CBD area, could soon come under the wrecking ball. It may be redeveloped into an office building, cutting the number of spaces available in the city.

Said Mr Mak: ‘It will be a matter of time before carpark charges spiral upwards.’

Source : Straits Times - 28 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore Paragon to convert 3 floors of offices to medical suites

Singapore Paragon to convert 3 floors of offices to medical suites

Move spurred by strong demand in healthy sector, say market watchers

By Joyce Teo

PARAGON Shopping Centre, known as much for its medical centre as for its upscale shops, is allocating more space for medical suites.
The mall is converting three more floors of office space into medical suites, as and when the particular office leases expire.

‘It is a reaction to the strong demand for medical suites,’ said Ms Linda Kwan, general manager of the mall.

The mall, which is right next to Mount Elizabeth Hospital, already has 12 floors of medical suites after it added one floor last July.

Before that, it had converted four floors of office space into medical suites over a two-year period. All its suites, which are for lease only, have been fully let.

‘The medical industry here continues to be healthy. The fact that landlords are looking to convert offices to medical suites bears this out,’ said property consultancy firm CB Richard Ellis (CBRE).

‘Capital values for medical suites are still holding firm despite the current market uncertainty.’

Medical suites are among the most expensive properties to purchase here on a per sq ft basis. A few transactions at Mount Elizabeth Medical Centre were recorded above $4,500 psf in the second half, compared with deals at below $4,000 psf in the first half.

One deal there, for a 657 sq ft suite, set a record price of $5,292 psf in March.

But not all medical suites command the same price.

While the Mount Elizabeth Medical Centre has aged, it still commands a premium owing to its branding and central location.

At nearby Lucky Plaza, a firm linked to Hong Leong Group - which owns 56 medical suites there - has sold eight out of 13 put on sale since last April. The most recent deal was done in April at $3,200 psf.

‘The location is superb but it has been an uphill task for them because of doctors’ reaction to the image of the mall,’ said a market watcher.

At Novena Medical Centre, suites have sold for more than $2,500 psf, up from their launch price of $1,600 psf in 2005.

Asking rents for medical suites are holding well in general, with Paragon commanding around $14 psf to $16 psf, up from $10 psf to $12 psf more than a year ago.

‘We believe rents will remain firm in the short to medium term,’ said CBRE Research. Given limited supply, values of medical suites will hold up well, it added.

More players are entering the market. Far East Organization, which owns Novena Medical Centre, has said it plans to have 64 more clinics at its new hotel in Sinaran Drive by 2010.

Over at Farrer Road, a group of doctors and investors has teamed up to build a ‘mediplex’, with a hospital, hotel and specialist medical centre rolled into one. It will house 210 medical suites.

Source : Straits Times - 28 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Private equity real estate funds in Asia still booming

Private equity real estate funds in Asia still booming

They raised more cash this year and helped stave off property slump

By Grace Ng

ACTIVE IN ASIA: Capitaland’s new fund will invest in Raffles City Beijing.

THE global financial turmoil has deflated the private equity boom in Asia but regional real estate buy-out funds are still going strong.
Private equity real estate funds - many holding Asian assets - raised 32 per cent more cash in the first half than in the same period a year ago.

This contrasts with Asian private equity funds, which have seen the amount of funds raised slump 21.5 per cent in the first half of this year to US$19.2 billion (S$26.1 billion), according to Asia Venture Capital Journal.

Private equity funds typically invest in private companies or take control of listed firms. Private equity real estate funds invest in property and may get involved in development through joint ventures with local players.

Recent data suggests that the funds are sufficiently cashed up to keep investing in regional markets, including Singapore, and so help stave off a severe property slump, said some analysts.

In the first five months of this year, 13 new Asia-focused private equity property funds were set up and raised a combined US$13 billion, said research firm Private Equity Intelligence (Prequin).

For the full year, Prequin said 78 funds are looking to raise US$81 billion for Asian property investments.

Property funds were particularly active in Singapore in the first half of last year, but the market has since quietened, noted Mr Nicholas Mak, Knight Frank’s director of research and consultancy.

The funds helped drive up prices in high-end residential property as well as certain commercial segments. They also bought tens of units - or even whole buildings - at bulk discount prices, said a Singapore-based fund manager.

There had been some concern that the credit crunch and the slowing property market here would prompt such funds to cash in their investments, and so bring down prices further, he noted.

But these fears look unfounded as the recent fund-raising numbers suggest that private equity real estate funds are not suffering from a drastic drop in liquidity.

‘Real estate private equity is still going pretty strong,’ said Mr Mark Pawley, chief executive of Singapore-based private equity firm Oxley Capital. He noted that Singapore was a ‘hot market last year’ for private equity players, and certain funds may still allocate fresh funds here - albeit much less than last year.

For instance, two new Asia-focused entities - the US$3.9 billion fund raised by Macquarie Bank unit MGPA and Keppel Land’s US$1.2 billion fund - will allocate part of their portfolios to Singapore.

Oxley Capital is still looking at some opportunities for relatively ’small deals’ in residential units here.

It will also help to grow the portfolio of the Cambridge Industrial Trust (CIT), an industrial property Reit. Oxley has a stake in the manager of CIT.

However, some funds may exit their Singapore investments if they have hit their profit targets or they may shift their focus and strategy to other markets such as Australia, Japan and Vietnam, said Mr Pawley.

Funds are looking to snap up so-called ‘distressed assets’ - properties whose prices have plummeted as their developers may have encountered financial difficulties - in these markets, which have been affected by a housing slump.

Kim Eng analyst Wilson Liew noted that volatile markets have prompted some Singapore property players to raise funds from institutional rather than retail investors.

Fraser & Neave’s unit Frasers Hospitality, for instance, has said that it is not the right time to list a real estate investment trust (Reit). Instead, it is tying up with private equity players to buy serviced residences.

This year, CapitaLand raised US$1 billion for its Raffles City fund focused on property in China cities, and a further 500 million yuan (S$100 million) for the Citic CapitaLand Business Park fund.

Other Singapore-based players involved in real estate private equity include ARA and Pacific Star.

Source : Straits Times - 28 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Blasts spark fears other Indian cities may be next

Blasts spark fears other Indian cities may be next

Analysts link blasts in Ahmedabad, Bangalore to India’s ties with US

By Ravi Velloor, India Bureau Chief

NEW DELHI - MUMBAI police yesterday scoured the city and raided a house for clues to the terrorist attacks on Ahmedabad and Bangalore that took place over consecutive days.
On Saturday, Ahmedabad in the west was hit by 16 bombs. At least 45 people have died and doctors were treating another 161.

Analysts say the attacks are a warning that India’s economic centres will be targeted if it plans to increase its presence in Afghanistan.

Minutes before Saturday’s blasts, a little-known group called Indian Mujahideen e-mailed news companies claiming responsibility for what was to come.

Officials speculated that the group was actually the banned Students Islamic Movement of India using a guise, or a unit of the Pakistan-based Lashkar-e-Toiba.

In a 14-page document attached to the mail, it said the Ahmedabad blasts were an ‘opening launch… an answer to the tyranny and oppression of Hindus’.

Ahmedabad, the largest city of Gujarat state, is the scene of deadly riots in 2002 in which 2,500 people died, most of them Muslims killed by rampaging Hindu mobs.

Police yesterday raided a house in Mumbai believed to have the computer from where the e-mail originated, and rounded up 30 people.

The Ahmedabad attack came a day after two people died when eight low-intensity bombs went off in the technology hub of Bangalore, the capital of Karnataka state.

The attacks are read here as a warning not just to Hindu nationalists who govern these areas but also the Congress-led Indian government.

The message is that its economy, now expanding at an annual rate of about 9 per cent, will be targeted if it escalates its strategic presence in Afghanistan, analysts say.

India’s rising embrace of the US and Israel pushes it to the frontline of potential attacks by Al-Qaeda, Taleban and other radical groups that base their vengeance on a flawed interpretation of Islam.

This month’s political developments in India, including the government’s decision to push forward on a civilian nuclear deal with the US, has highlighted New Delhi’s growing strategic links with the US. Leftist parties, opposed to the deal, say the nuclear deal is a precursor to drawing India closer to the US.

India also has close intelligence and defence ties with Israel, which has emerged as the country’s second-biggest supplier of weaponry after Russia. For weeks, intelligence analysts have speculated that militants may target the Israeli embassy in New Delhi.

More than 180 people have died in India in terrorist attacks in the past year.

Analysts here note that Ahmedabad and Bangalore are in states ruled by the Hindu nationalist Bharatiya Janata Party (BJP) and have significant Muslim populations. Those behind the attacks were hoping to cause communal discord, they said.

‘We believe there is more to it,’ said a senior intelligence official in New Delhi.

‘Bangalore is India’s software and services hub. Ahmedabad is the administrative headquarters of India’s most industrially dynamic state, Gujarat. It is a warning that they have the capability and will to kill our remarkable economic growth.’

The attacks come weeks after the Indian embassy in Kabul was targeted by a suicide bomber.

The senior intelligence official said special vigilance was now being maintained over Gurgaon, Chandigarh and Chennai, all outsourcing centres, the mainstay of India’s booming services sector.

Source : Straits Times - 28 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore F1 a boon for hotels - in Johor

Singapore F1 a boon for hotels - in Johor

Lower rates at 5-star hotels across the Causeway draw bookings from as far as Europe

By NISHA RAMCHANDANI

(SINGAPORE) Singapore’s first Formula One (F1) night race (September 26-28) is turning out to be quite the moneyspinner for hotels and travel agents - in Malaysia, that is.

In Singapore, hotels have not been filling up as quickly as previously anticipated, although BT understands from some hotels that the pace is picking up.

Some visitors who are flying in for the big event have found an alternative to the inflated room rates at Singapore hotels, by booking five-star hotels across the Causeway where prices work out to a mere fraction of what is being charged here.

Johor Baru-based travel agency, New Asia Holidays, has been receiving calls from interested parties as far away as Europe since February this year. The travel agency has organised a special four day-three night F1 travel package, complete with daily return transfers between Johor Baru and the race circuit in Singapore.

Starting at $800 per person, the tour package boasts the option of both high-end hotels like the five-star Hyatt Regency Johor Baru as well as more affordable accommodation and even sightseeing tours.

According to general manager Raaj Navaratnaa, ‘response has been very good’, with 350 confirmations to date, although he expects numbers to run into 550-600 once September rolls in. Slightly over 60 per cent of the confirmed bookings so far hail from European countries and regions such as Germany and Scandinavia, while close to 30 per cent are from Australia. Bookings from the region such as Malaysia and Thailand have been softer, he added.

To avoid heavy traffic, New Asia Holidays has chartered private buses and will be ferrying its customers via the Tuas link. It is also working on obtaining special group ‘clearance from Malaysian Immigration,’ said Mr Navaratnaa, which he believes will come through.

Meanwhile, over at the five-star Puteri Pacific JB, bookings have started to come in recently from both individuals and groups. Rooms are going at RM500++ (S$209) per night, with a minimum of three nights, which is still vastly cheaper than the rates charged by some of the local hotels. At this point, the Puteri Pan Pacific has 300 rooms taken up - an occupancy rate of about 60 per cent.

The Hyatt Regency JB is offering a four day-three night package at a rate starting from RM395++ per night, excluding transportation. General manager Richard Simmons said the hotel is ‘optimistic’ for higher than average occupancies, especially taking into account that generally, ‘the rate falls during Ramadhan.’

The Mutiara Johor Baru currently has a take up of 72 rooms for the F1 period. Fifty-two of its superior rooms (RM270++ per night) and 20 deluxe rooms (RM310++ per night) have been paid for so far. According to the hotel, all bookings are made by Malaysians. ‘Majority of rooms are booked for a duration of four nights stay from 25 Sept onwards. Walk-in guests will pay the same rate,’ said Lily Tham, marcom manager, adding that enquiries have been pouring in since early April.

While the current occupancy level for that weekend hovers above 20 per cent, the Mutiara is forecasting 80 per cent daily occupancy from F1 bookings alone from Sept 22 till 28. Mutiara JB has 332 rooms and suites in total.

However, Patrick Fiat, general manager for Singapore’s Royal Plaza on Scotts, pointed out that staying in JB during the F1 week would also come with a heavy price to pay. You have to ‘factor in traffic jams and the distance…plus service standards’ might not be up to snuff, Mr Fiat said.

Royal Plaza on Scotts, which is a non-trackside hotel, currently has an occupancy of about 55 per cent for its 511 rooms. Rooms at the Royal Plaza are going at $960 per night with a minimum of two nights, about three times its corporate rate and nearly double its rack rate of $500 plus.

In Singapore, hotels have not been filling up as quickly as previously anticipated, although BT understands from some hotels that the pace is picking up.

Over at trackside hotel the Fullerton, bookings have been ‘definitely going up,’ said a spokesperson. Non track-view rooms start at $2,000 per night, while track-view rooms are going at close to $3,000. The Fullerton has not lowered its rates since they were launched, the spokesperson said.

Source : Business Times - 28 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Record 13,400 Singapore homes to be completed next year

Record 13,400 Singapore homes to be completed next year

Rents expected to fall, especially in prime districts and East Coast. Fiona Chan reports.

Next year is likely to be a bad one for landlords.
A bumper crop of newly completed homes is scheduled to flood the market, making more apartments available for rent and pushing down rents, which saw record rises last year.

And with lower rents, private home prices - which industry observers say have reached their peak - may drop further, especially those in the prime districts.

A massive 13,399 new private homes will be ready for occupation next year. This is double the average in recent years and the most in a single year, according to property consultancy CB Richard Ellis (CBRE).

Official supply numbers show 10,500 completions next year and 11,800 the year after, but CBRE’s analysis, based on construction progress and delays, reveals more completions next year.

It expects this new supply to depress rents by 5 to 10 per cent on average next year, coming on top of a global economic slowdown that might lead firms to hire fewer expatriates, the main source of tenants.

In the prime areas, rents could slide up to 15 per cent next year, on top of a decline that has already begun this year, predicted CBRE.

Popular rental areas such as the East Coast and Orchard will be among the worst hit as keen demand for homes there in recent years led developers to build aggressively.

An ‘alarming’ 3,341 new homes will be completed in the East Coast next year, double the number this year, CBRE said. Major projects in the area, which covers Katong and Marine Parade to Bedok and Changi, include the 562-unit One Amber and the 556-unit Casa Merah.

In the prime districts 9, 10 and 11, some 4,240 homes will be ready in areas such as Orchard, Holland, River Valley, Tanglin and Newton. RiverGate, with 545 units, is the biggest condominium scheduled to open its doors.

Suburban areas will also see a large jump in finished homes next year. In the north and north-west, for example, there will be 10 times more than this year.

But this is unlikely to result in a glut or lower rents as most suburban home buyers intend to occupy their units.

Property experts warn that many major prime projects to be ready this year and next are those that had attracted investors rather than owner-occupiers, which means their units will add to the rental supply.

‘Some big condos in the downtown areas have a higher proportion of investors,’ said Mr Colin Tan of property firm Chesterton International. These include the 1,111-unit Sail @ Marina Bay, which will be fully completed by the end of this year, and the 312-unit Clift in McCallum Road, expected next year.

‘We don’t even have to wait for the 14,000 homes next year; rents are already moderating and should come down in the third quarter,’ he said, adding that landlords are lowering their asking rentals.

He cited the case of The Sea View in Amber Road, whose 546 units were completed this year. ‘I asked someone there, how are the rents? He said: ‘I’m not sure really, there’s no demand’.’

This will be welcome news for renters, who have had to face ever-increasing rents over the last two years.

Rents have shot up 60 per cent on average since 2006 and even doubled in some places, thanks to an influx of expats and a shortage of rental homes.

For example, in Cuscaden Residences in the Tanglin area, a typical 1,485 sq ft unit could fetch $9,200 in monthly rents last year, from about $6,500 in 2005. This year, it has fallen to $8,100, according to recent reports. Next year, it could fall by another 10 per cent to $7,300, if CBRE’s predictions come true.

Entrepreneur Sebastien Dechamps, 29, who came here from France three years ago and started a website for expatriates, said high rents have seen more expatriates moving away from the city to places in the north and the east.

‘The fall in rental prices is definitely good news. It might encourage expats to move to the city, which is great because they can put more vibrancy back into the city and into its nightlife,’ he said.

A fall in rentals generally leads to a fall in home prices for two reasons: landlords, less able to service their mortgages, are willing to let go of their units more cheaply, while would-be investors will only pay as much as a home can fetch in rents.

The supply situation is not likely to improve beyond 2010: The latest official data shows that apart from the 21,000 or so homes to be completed over the next two years, there are another 20,000 homes scheduled to be built in 2011.

But Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, is still optimistic.

He expects higher than average housing demand during ‘the next few years of growth’, and believes that after accounting for demolitions of collective sale estates, the ‘net supply should be balanced by demand’.

Source : Straits Times - 27 July 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com