30 units sold at Singapore Martin No. 38

30 units sold at Singapore Martin No. 38 

SC Global sells loft-style apartments at higher prices than expected 

By Joyce Teo, Property Correspondent 

DEVELOPERS will take heart from news that all 30 private preview units at SC Global’s New York-style loft apartments in Martin Road have been sold at better-than-expected prices in the past fortnight.
The company had said it was expecting around $2,000 per square foot for the project but sales came in at $1,881 psf to $2,494 psf, or an average of $2,130 psf.

That would make the flats around $2 million to $3.8 million, depending on the size and location in the 15-storey freehold development called Martin No. 38.

The firm announced yesterday that it defied expectations by selling about a third of the 91 units, with about 60 per cent of the buyers coming from overseas.

An investment bank had recently forecast a take-up rate of slightly over half of the preview units.

SC Global chairman and chief executive Simon Cheong told The Straits Times that the prices he achieved were clearly the highest in the area on a psf basis at this time. The prices also buck the trend, with sentiment in the property market still weak, particularly in the high-end sector.

‘These are 30 fellows buying in the midst of a storm. They must have seen a lot of value,’ said Mr Cheong. ‘To sell 30 units without an official launch, that has to do a lot with our branding.’

A market watcher who declined to be named said there has been little change in prices of some other developments in the area, with a few even falling.

Deals in the Robertson Quay area have been done at $1,130 to $1,840 psf this year although some Rivergate units sold for over $2,000 psf last year.

‘It’s like a salmon swimming against the tide,’ said Knight Frank director of research and consultancy Nicholas Mak, of the rarity of projects selling at 30 to 40 per cent above market like Martin No. 38, given today’s gloomy sentiment.

A market watcher noted that high pricing works in a bullish market but in the weak market prevailing now, sales are likely to slow after the first 20 or 30 per cent is sold.

The developer says there is no need for an official launch as it has sold out its preview units. It has yet to decide on the launch of the second phase

‘In good and bad times, if your product is strong, you can still sell,’ said Mr Cheong. ‘We could have launched next year but as far as a public company is concerned, we try to phase our launches.

‘In good times, a lot of people can claim a lot of wonderful things… This is a time when you ‘differentiate yourself’.’

Martin No. 38 will feature high ceilings and seamless interior spaces, like the warehouse lofts in Lower Manhattan.

It has mostly small units of 969 sq ft to 1,130 sq ft with a limited number of larger ones of 1,335 to 1,485 sq ft. There will also be four penthouses with pools.

SC Global bought the site in 1999. It has said that it deferred development partly to wait for the surrounding environment to be ready.

‘Although we are a developer, we don’t rush,’ said Mr Cheong. ‘The planning process took two to three years.’

It also has a site in the Ardmore Park area and another leasehold site in Sentosa Cove. Both are in the design stage, said Mr Cheong.

Source : Straits Times - 09 Sept 2008

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Singapore Holland Village valets told to close

Singapore Holland Village valets told to close
 
HDB puts up signs at carpark entrances banning such services 

By Sumathi V. Selvaretnam 
  
Valet operators say they have been at Holland Village for years and that nobody had ever told them they needed a permit. — ST PHOTO: ALBERT SIM

THE two carpark valet services in Holland Village, there for years, were told yesterday that they have to cease operations from today.
Last night, workers contracted by the Housing and Development Board (HDB) put up signs at the carpark entrances in Lorong Liput and Lorong Mambong declaring that such parking services were banned.
An electronic parking system will go up there on Sept 22 to regulate the demand for parking lots, said the HDB.

Mr R.K. Vicnesh, 32, who runs the year-old Sakthya Services, said he heard about the ban only yesterday. Before him, the booth had been run by his brother-in-law from 2001.

Mr Vicnesh charges motorists $8 to park their car so they can avoid the hassle of circling the area for a lot.

His valet service has tie-ups with eight restaurants and service providers in the area, including Splendour Spa, Qi Mantra and Lebanese restaurant Al-Qas’r.

Sakthya charges these businesses a monthly fee for their customers to enjoy free valet parking. It also has a tie-up with DBS Bank to give customers free valet parking if they charge $60 or more to their DBS or POSB cards at the outlets in the area.

Mr Vicnesh has written to the HDB asking to be allowed to continue his services. He is also collecting signatures from business owners for a petition against the ban on valet services.

Both he and the other valet operator, Purple Valet Services, plan to continue operating until further notice from the HDB. Said Mr Ray K., a valet with Purple Valet Services: ‘The outlets have paid us, so we will stay.’

Both operators said that in the time they have been there, nobody has told them that they needed a permit, or that they were not allowed there, except that Sakthya was once asked by the Land Transport Authority to move its valet booth away from the pavement. It has since operated its booth outside the Haagen Daz cafe without further incident.

Shop owners, whose customers are younger Singaporeans and expatriates, expressed disappointment at the ban on valet services.

Mrs Sabrinah Hussin, 23, who manages Splendour Spa, said eight in 10 of the spa’s customers used the free valet service because ‘it is hard to find parking lots here, and they want to be on time for their appointments’.

Mr Amos Liew, 27, a supervisor at Qi Mantra spa, is worried he may lose customers if the parking problem worsens.

Lebanese restaurant Al-Qas’r managing director Georges Khanashat said the restaurant might have to move if the situation does not improve.

Lawyer Leong Kwok Yan, 61, said valet services were needed because parking facilities were inadequate. ‘People are always waiting around for a long time, and they jam up the carpark.’

Besides the Lorong Liput carpark - where half the lots are season parking ones for HDB residents in the area - visitors to Holland Village used to have another carpark across the road at Chip Bee Gardens, but that was closed down in 2004 for work to build Holland Village’s MRT station.

 
Source : Straits Times - 09 Sept 2008

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Size up Singapore home supply again

Size up Singapore home supply again 

Figures predicting ample numbers don’t take into account delayed projects 

By Fiona Chan, Property Reporter 
  

WHAT a difference a year makes.
Just last year, all official hands were on deck to calm what was seen as an overheating property market.

To help keep soaring home prices in check, the Government released an unprecedented amount of data on the housing market.

It also deviated from usual practice to draw attention, in its quarterly updates, to the huge number of new homes in the supply pipeline.

This figure jumped by more than 10,000 units over the past year to reach almost 70,000 now.

To gauge how enormous this number is, just consider that it is about seven times the average number of new homes bought yearly since 2001.

The supply numbers were meant to reassure potential buyers that there were plenty to go round and they need not rush to buy.

Today, however, the property market is nowhere near as feverish as it was last year.

It is pertinent to ask whether this number is the best measure to guide potential buyers who no longer need assurance that there is enough in the pipeline but are now concerned there might be too many.

Developers have adjusted to the cooling market sentiment by putting off sales. So the Government should also adapt its calculation of supply figures to reflect these new conditions.

It could switch its focus to units already being built and supplement this data with information tailored for a wary market rather than an overexcited one.

The swift change in mood has been striking. Worries over runaway prices and property speculators have given way to a diametrically opposite problem: a protracted slowdown in the property market, sparked by the United States sub-prime mortgage crisis.

Home prices and rents are starting to dip and sales activity has slowed to a crawl. The only speculation taking place these days is about when property prices will crash for real, as no one can agree on whether the slowdown is a blip or the beginning of a downturn.

What is certain, though, is that the massive supply figure, originally meant to restore sanity to a frantic market, is now acting as a drag on already negative sentiment.

Citing these numbers, analysts, including Credit Suisse, DMG & Partners, Barclays and Nomura, have warned of a potential oversupply in coming years. This has formed the basis for their pessimistic outlook on Singapore’s property market.

A more accurate reflection of impending supply is to focus on units that have already begun to be built, as opposed to those still on the drawing board.

Given the construction crunch and the fact that developers are delaying launches due to market gloom, homes that were planned during a more bullish time could now be postponed indefinitely.

This change alone would more than halve the banner supply figure that has etched itself in bearish minds.

According to the latest data released by the Urban Redevelopment Authority (URA) in July, the total supply of homes in the pipeline has jumped to 67,569.

But a closer look at the data shows that construction has started on only 31,176 of these units.

Another reason to highlight the figures under construction is that they tend to stay more stable from quarter to quarter, unlike the total supply number, which fluctuates according to developers’ reactions to changing sentiment.

In the first quarter this year, the total number of homes expected to be ready next year and in 2010 alone was 30,296. Just three months later, URA revised this figure down by almost a third to 22,206 units, after developers submitted modified completion estimates in the light of delayed projects.

But the number of units actually under construction remained pretty much the same across the two quarters, at about 17,000 homes.

Making the change to focus on units under construction would be far from radical. In fact, before 2006, that was exactly what the URA did.

Apart from this, the URA should also divulge how many units have had their scheduled completion dates pushed back, and to which years.

This would throw light on the extent of delays in project completions, something the overall supply figure alone cannot communicate, and the current data only hint at.

The latest figures, for instance, show about 10,400 homes expected to be completed next year. But three months ago, there were 12,800. Have these missing 1,400 units been pushed back to 2010, finished ahead of schedule this year or taken out of the equation altogether?

The 2010 predictions fare even worse: The forecast for completions that year has been reduced from 17,500 units to 11,800 in just three months. When are these lost units expected to come on the market?

Another useful measure would be to break down expected supply by location, completion year and construction status.

The URA only provides the number of unsold units in each of three broad districts: the core central region, city-fringe areas and suburban locations.

If the URA could give this additional data by postal district, it would reveal valuable information about which areas might be in danger of oversupply. Quarter-on-quarter, it would also show how home supply is adjusting across different areas in reaction to demand.

Property consultancy CB Richard Ellis (CBRE) has already flagged a possible glut in the prime districts and in the East Coast, which have turned into major building sites after developers snapped up land there in the last two years.

The problem is that CBRE’s supply figures do not gel with the URA’s. But unless the Government releases more relevant information - and property developers cooperate to boost transparency - the question of supply overhang will continue to hang over the market for some time.

 
Source : Straits Times - 09 Sept 2008

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Size up Singapore home supply again

Size up Singapore home supply again 

Figures predicting ample numbers don’t take into account delayed projects 

By Fiona Chan, Property Reporter 
  

WHAT a difference a year makes.
Just last year, all official hands were on deck to calm what was seen as an overheating property market.

To help keep soaring home prices in check, the Government released an unprecedented amount of data on the housing market.

It also deviated from usual practice to draw attention, in its quarterly updates, to the huge number of new homes in the supply pipeline.

This figure jumped by more than 10,000 units over the past year to reach almost 70,000 now.

To gauge how enormous this number is, just consider that it is about seven times the average number of new homes bought yearly since 2001.

The supply numbers were meant to reassure potential buyers that there were plenty to go round and they need not rush to buy.

Today, however, the property market is nowhere near as feverish as it was last year.

It is pertinent to ask whether this number is the best measure to guide potential buyers who no longer need assurance that there is enough in the pipeline but are now concerned there might be too many.

Developers have adjusted to the cooling market sentiment by putting off sales. So the Government should also adapt its calculation of supply figures to reflect these new conditions.

It could switch its focus to units already being built and supplement this data with information tailored for a wary market rather than an overexcited one.

The swift change in mood has been striking. Worries over runaway prices and property speculators have given way to a diametrically opposite problem: a protracted slowdown in the property market, sparked by the United States sub-prime mortgage crisis.

Home prices and rents are starting to dip and sales activity has slowed to a crawl. The only speculation taking place these days is about when property prices will crash for real, as no one can agree on whether the slowdown is a blip or the beginning of a downturn.

What is certain, though, is that the massive supply figure, originally meant to restore sanity to a frantic market, is now acting as a drag on already negative sentiment.

Citing these numbers, analysts, including Credit Suisse, DMG & Partners, Barclays and Nomura, have warned of a potential oversupply in coming years. This has formed the basis for their pessimistic outlook on Singapore’s property market.

A more accurate reflection of impending supply is to focus on units that have already begun to be built, as opposed to those still on the drawing board.

Given the construction crunch and the fact that developers are delaying launches due to market gloom, homes that were planned during a more bullish time could now be postponed indefinitely.

This change alone would more than halve the banner supply figure that has etched itself in bearish minds.

According to the latest data released by the Urban Redevelopment Authority (URA) in July, the total supply of homes in the pipeline has jumped to 67,569.

But a closer look at the data shows that construction has started on only 31,176 of these units.

Another reason to highlight the figures under construction is that they tend to stay more stable from quarter to quarter, unlike the total supply number, which fluctuates according to developers’ reactions to changing sentiment.

In the first quarter this year, the total number of homes expected to be ready next year and in 2010 alone was 30,296. Just three months later, URA revised this figure down by almost a third to 22,206 units, after developers submitted modified completion estimates in the light of delayed projects.

But the number of units actually under construction remained pretty much the same across the two quarters, at about 17,000 homes.

Making the change to focus on units under construction would be far from radical. In fact, before 2006, that was exactly what the URA did.

Apart from this, the URA should also divulge how many units have had their scheduled completion dates pushed back, and to which years.

This would throw light on the extent of delays in project completions, something the overall supply figure alone cannot communicate, and the current data only hint at.

The latest figures, for instance, show about 10,400 homes expected to be completed next year. But three months ago, there were 12,800. Have these missing 1,400 units been pushed back to 2010, finished ahead of schedule this year or taken out of the equation altogether?

The 2010 predictions fare even worse: The forecast for completions that year has been reduced from 17,500 units to 11,800 in just three months. When are these lost units expected to come on the market?

Another useful measure would be to break down expected supply by location, completion year and construction status.

The URA only provides the number of unsold units in each of three broad districts: the core central region, city-fringe areas and suburban locations.

If the URA could give this additional data by postal district, it would reveal valuable information about which areas might be in danger of oversupply. Quarter-on-quarter, it would also show how home supply is adjusting across different areas in reaction to demand.

Property consultancy CB Richard Ellis (CBRE) has already flagged a possible glut in the prime districts and in the East Coast, which have turned into major building sites after developers snapped up land there in the last two years.

The problem is that CBRE’s supply figures do not gel with the URA’s. But unless the Government releases more relevant information - and property developers cooperate to boost transparency - the question of supply overhang will continue to hang over the market for some time.

 
Source : Straits Times - 09 Sept 2008

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Mindy Yong

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mindy@mindyyong.com

Ramp-up Singapore warehouses offer more in rental returns

Ramp-up Singapore warehouses offer more in rental returns

By ARTHUR SIM

RAMP-UP warehouse facilities may be relatively new in Singapore but rents show they can offer better investment returns.
According to a white paper by Colliers International, ramp-up warehouse facilities in Penjuru and Changi go for $1.30-$1.50 and $1.70-$1.80 psf per month respectively.

Multi-storey warehouse facilities with cargo lifts (upper floors) in the same vicinity go for $1.00-$1.20 and $1.40-$1.60 respectively.

Direct vehicular access to every floor in a ramp-up warehouse development effectively makes every floor comparable to a ground floor level unit, says Colliers.

‘It therefore allows developers to charge ground floor rents for every unit in the development.’

In a conventional multi- storey warehouse, upper- floor units command lower rents than ground-floor units because users have to load and unload by cargo lift.

The rent differential can range from $0.20 to $0.50 psf per month depending on location.

Colliers says the opportunity to charge ground-floor rents for every unit on every level in a ramp-up warehouse development can raise rental revenue as much as 30 per cent at present.

 
 
‘And in the future, when more industrial developments go high-rise, the rental gap could widen further.’

Colliers says that in Hong Kong, ramp-up multi- storey space is believed to command 40 per cent more than multi-storey space without ramps.

Tenants also benefit, it says. Service charges are about $0.20 psf per month lower than in a conventional multi-storey warehouse because cargo lifts use a lot of power and can require high maintenance.

Singapore now has about 13 million sq ft of ramp-up warehouse space, equivalent to 19 per cent of the island’s 69.4 million sq ft of total warehouse space, according to Colliers.

 
Source : Business Times - 09 Sept 2008

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Singapore office occupancy costs 7th highest worldwide: survey

Singapore office occupancy costs 7th highest worldwide: survey

By ARTHUR SIM

GRADE A office space in Singapore was the seventh most expensive in the world in June this year, a survey has found.
 
In terms of supply, Colliers said Singapore had 8.6m sq ft of offices under construction in June.
 
 
 
 
 
 
The average annual Grade A office gross rent here was US$125.06, according to the study by Colliers International.

Cities that were dearer included Hong Kong (US$213.68), London’s West End (US$207.42) and Moscow (US$167.29).

Singapore was the third most expensive location in the Asia-Pacific region, after Hong Kong and Tokyo.

In its Global Office Real Estate Review Midyear 2008, Colliers says average annual Grade A office rent in Singapore soared to US$113.49 in December 2007, from US$84.64 in June 2007.

In terms of vacancy rates, Singapore at 7.5 per cent in June 2008 ranked 13th in the Asia-Pacific, below the likes of Perth (0.3 per cent), Seoul (0.7 per cent) and Brisbane (1.2 per cent).

While the vacancy rate here rose marginally from 6.1 per cent in December 2007, Collier’s director of research and advisory Tay Huey Ying said: ‘Singapore registered a comparatively higher vacancy rate in the first six months of this year. This was due in part to the government providing relief to the supply shortage by leasing out some disused state properties and selling several sites for transitional office use.’

 
 
Companies appear to be increasingly receptive to alternative business locations and premises, Ms Tay said.

‘Office users, who have had to grapple with the frenzied pace of rental growth experienced since mid- 2006, can heave a sigh of relief as rental growth eased substantially in the first half of 2008 on the back of reduced pressure on supply,’ she said.

In terms of supply, Colliers said Singapore had 8.6 million sq ft of offices under construction in June, putting it in 16th position below cities like Dubai (42 million sq ft), Shanghai (41.6 million sq ft) and Guangzhou (19.8 million sq ft).

Office investment held up in the Asia-Pacific but was down in Europe and North America.

Global office investment fell 60 per cent - or 41 per cent excluding portfolio sales - in the first half of 2008 to $108 billion, from $268.6 billion a year earlier.

But Japan saw office transactions increase 103 per cent, followed by Hong Kong (up 86 per cent) and Singapore (up 58 per cent). China registered a drop of 16 per cent.

Capitalisation rates / initial yield in Tokyo (Central Wards), Hong Kong and Singapore were 3.9, 3.42 and 6.19 per cent respectively.

In Spain and The Netherlands, office transactions increased 77 per cent and 14 per cent respectively, while in London they fell 64 per cent.

The US remained the most active office investment sales market, even though volume dropped 69 per cent to US$28.6 billion.
Source : Business Times - 09 Sept 2008

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50% of retail space leased at Fusionopolis

50% of retail space leased at Fusionopolis

Cold Storage and Fitness First are two of the largest tenants
By EMILYN YAP
AS the first phase of Fusionopolis approaches its official opening next month, more than 50 per cent of retail space in the development has been taken up.
Upcoming hotspot: Rents for the retail space range from $4.50 to $12 per sq ft, depending on the usage 
The upcoming research and development (R&D) hotspot, comprising two towers and a podium in phase one, has around 183,000 sq ft of retail space. With seven tenants already secured, some 86,100 sq ft are left.

Cold Storage and Fitness First are two of the largest tenants. Fitness First @ Fusionopolis, with a rooftop swimming pool, will occupy 30,000 sq ft. According to JTC Corporation, the fitness club’s members have been able to use the facilities starting yesterday.

Starbucks Coffee, Harry’s Bistro & Bar, food and beverage (F&B) outlet Black Canyon, Raffles Medical Group and Frames & Lenses (Optical) will also be moving into the first phase of Fusionopolis.

Rents for the retail space range from $4.50 to $12 per sq ft, depending on how the units are used. Larger units also enjoy a lower psf rent.

‘We are heartened by the enthusiastic response from our business partners in locating their retail and F&B outlets at Fusionopolis,’ said JTC Corp’s assistant CEO, Philip Su.

‘It is an endorsement of what the vibrant Fusionopolis stands for, as the first integrated development within one-north which embraces all four work-live-play-learn elements.’

Frasers Hospitality will also be launching its brand of serviced apartments in Fusionopolis, comprising 50 work loft units.

JTC Corp is in talks with more retail and F&B businesses to take up the remaining space. ‘We welcome all other like-minded and enterprising business partners to join us in realising the vision of this unique innovative hub,’ said Mr Su.

Fusionopolis is a major development at one-north catering to the infocomm, media, science and engineering industries. The first phase has around 1.29 million sq ft of floor space and major R&D tenants include institutes and laboratories under A*Star’s science and engineering research council.

Phases 2A and 2B of the Fusionopolis are likely to be completed by 2010.

 
Source : Business Times - 09 Sept 2008

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Asia toasts Fannie Mae, Freddie Mac bailout

Asia toasts Fannie Mae, Freddie Mac bailout
Bank stocks jump as debt repayment is guaranteed; finance sector tipped to recover
By CONRAD TAN

(SINGAPORE) Stock markets around the world rallied yesterday, following the US government’s weekend bailout of mortgage finance giants Fannie Mae and Freddie Mac.
 
 
Across most of Asia, stocks surged at the start of trading, after Sunday’s announcement that the US government would take over the ailing companies, boot out their chief executives, and provide virtually unlimited funding support to both outfits.

Asian financial institutions and central banks - especially in Japan and China - hold billions of dollars worth of debt securities issued by both companies, so the assurance that the US government would back the repayment of that debt sent bank shares soaring, with several hitting their maximum daily trading limits.

‘Had the US mortgage-financing companies failed, it would have triggered a substantial financial crisis across the globe,’ said Naoki Fujiwara, chief fund manager at Shinkin Asset Management in Tokyo, according to Bloomberg.

Japan’s three biggest banks alone had some 4.7 trillion yen (S$60 billion) worth of exposure to debt securities issued by Fannie Mae and Freddie Mac as at end-March. Their relief at the US move was palpable.

Mitsubishi UFJ Financial Group ended 13.3 per cent higher in Tokyo yesterday, after rising by its daily limit of 100 yen to 850 yen. Sumitomo Mitsui Financial Group, another of Japan’s biggest banks, soared 15 per cent. The Nikkei 225 index finished 3.4 per cent higher.

In Hong Kong, the Hang Seng Index rose 4.3 per cent, led by gains in HSBC, whose share price gained 5.5 per cent.

In Singapore, the Straits Times Index jumped 4.8 per cent - the biggest percentage gain since Aug 20, 2007, when the index soared 6.2 per cent after the US Federal Reserve made an emergency cut to its discount lending rate for commercial banks seeking central bank funds.

United Overseas Bank rose 5 per cent, DBS Group gained 5.2 per cent, and OCBC Bank ended 4.9 per cent higher.

In Australia, too, gains in the banking sector sent the main stock benchmark soaring, eventually finishing 3.9 per cent higher. Shares in investment bank Macquarie Group jumped 15 per cent.

Stocks in Europe also opened with strong gains led by financial sector stocks, with major share indices rising more than 3.5 per cent in early trading.

In the US, the main equity indices also got off to a strong start yesterday, with the Dow Jones Industrial Average up more than 2 per cent in the first 30 minutes of trading. By midday, the Dow was up 1.36 per cent at 11,373.22 points.

The dramatic rescue of Fannie and Freddie on Sunday also boosted stocks outside the financial sector, including major exporters such as Japanese carmaker Toyota and commodity-related stocks listed here such as Wilmar International, Noble Group and Olam International, as investors speculated that the latest bailout would help the broader US economy, supporting demand for commodities and imports.

Some investors are hoping that the bailout could spur a recovery of the US financial sector and housing market by removing any uncertainty over the companies’ ability to repay their debt and provide financing for new mortgages.

But others believe that the government rescue of the two pillars of the US mortgage industry is a sign that the threat to the US economy from plummeting house prices, rising loan defaults and over-extended banks is far from over.

‘In our view, the take- over of Fannie and Freddie is actually a testament to how broken the financial system is at this time,’ said David Rosenberg, Merrill Lynch’s chief economist for North America, according to Reuters.

The US Treasury said it would provide as much as US$200 billion to the two firms to help them cope with mounting losses from defaults on the housing loans that they guarantee or own.

The Treasury will also buy on the open market US$5 billion or more of new mortgage-backed debt issued by the two firms - an attempt to give the ailing US housing market a shot in the arm.

While they do not lend directly to home owners, the two firms act as funding conduits for the vast US home loan market by guaranteeing or buying housing loans made by mortgage lenders. Most of these are repackaged and sold as debt securities to institutional investors worldwide.

As at the end of July, Fannie Mae and Freddie Mac owned or had guarantees backing about US$5 trillion worth of US housing loans, nearly half the country’s estimated US$11-12 trillion in outstanding residential mortgages.

In July, US Treasury Secretary Henry Paulson took the first step towards a government rescue of both firms, promising that the Treasury and other government agencies would provide liquidity and capital funding to the firms, if needed, to keep them afloat. On Sunday, he was finally forced to make good on that promise.

 
Source : Business Times - 09 Sept 2008

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