Choice Singapore Tanah Merah condo site receives seven bids

Choice Singapore Tanah Merah condo site receives seven bids

By KALPANA RASHIWALA

DESPITE the quieter property market and a weak response at some state land sales, a 99-year leasehold condo site next to Tanah Merah MRT station yesterday drew seven bids.
 
TID’s $84m bid was 12% above the next highest offer by Sim Lian Land of $75m or nearly $252 psf ppr.
 
 
The top bid of $84 million or $282 per sq ft per plot ratio (psf ppr) came from TID - a joint venture between Singapore’s Hong Leong Group and Japan’s Mitsui Fudosan.

The top bid was within the $250-300 psf ppr range predicted for the plot when it was launched by the Urban Redevelopment Authority in mid-July.

But it is 11 per cent shy of the $318.50 achieved for a neighbouring site - farther from the MRT station - in April 2006, when sentiment was more buoyant. That site is now being developed as the Casa Merah condo.

Commenting on the response at yesterday’s tender, an observer said: ‘The market is not dead. If a prime site comes along there will be takers, especially at state land tenders.’

Agreeing, DTZ senior director (research) Chua Chor Hoon said: ‘I’m not surprised with the outcome of the tender. After all, it was for a mass-market site in an attractive location where there has always been good demand for condos.’ TID’s bid was 12 per cent above the next highest offer by Sim Lian Land of $75 million or nearly $252 psf ppr. The other bidders were:
Midview group unit Boon Keng Development ($61.88 million);
BS Capital subsidiary Bishopsgate Developments ($61.33 million);
Frasers Centrepoint unit FCL Emerald (3), which bid $53.58 million;
Hoi Hup Realty ($48.51 million); and
GuocoLand subsidiary First Changi Development ($44.63 million)

CB Richard Ellis director Leonard Tay estimates that based on TID’s bid price, the breakeven cost for a new condo is likely to be $700-750 psf, translating to possible sale prices ranging from $800-850 psf.

‘This takes into account recent comparables, the current market, much higher construction costs and the new planning guidelines on bay windows and planter boxes,’ he said.

‘Waterfront Waves, a new condo at Bedok Reservoir, is currently being marketed at $800 psf on average. A sub-sale unit at Casa Merah, was sold at $783 psf in August, while in the resale market, older units in East Meadows were transacted at an average of $660 psf in the first half of 2008.’

The 106,299 sq ft plot on offer at yesterday’s tender has a 2.8 plot ratio - ratio of maximum potential gross floor area to land area - and can be developed into a condo with 240-250 units averaging 1,200 sq ft.

CBRE’s Mr Tay said the future project on the site will be attractive to HDB upgraders living in Bedok, Tampines and Marine Parade and private homeowners in the East Coast area.

‘It will also be attractive to expats looking to rent homes along major transport nodes,’ he added.

 
Source : Business Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore moves up in world of global business hubs

Singapore moves up in world of global business hubs

It pips Chicago, HK to take 4th spot in MasterCard study
By CONRAD TAN
(SINGAPORE) Singapore has been ranked the fourth best centre of commerce worldwide, just behind Tokyo, according to a recent study of 75 global cities.
It was also considered the best city for ease of doing business, ahead of Hong Kong, London, Toronto and New York.

The latest Worldwide Centres of Commerce Index published by MasterCard ranks 75 cities, based on seven broad criteria including their legal and political framework, economic stability, ease of doing business, knowledge creation and information flow, and quality of life.

As businesses expand beyond their home market, an understanding of the advantages that different cities have to offer will prove to be an indispensable competitive edge, said the report’s authors.

‘While many multinational companies may claim to be global businesses today, in the coming decades only those capable of building a globally integrated structure will rise above the competition.’

London, New York, and Tokyo retained the top three spots respectively in this year’s ranking, but Singapore moved up two rungs, overtaking Chicago at No 5 and Hong Kong - its main rival in Asia - at No 6.

 
 
Paris moved up one spot to No 7, while Frankfurt slid to No 8 from No 7 last year. Seoul stayed at No 9, while Amsterdam moved from No 11 to No 10, displacing Los Angeles, which slid to No 17.

Singapore ranked second only to Stockholm for its legal and political framework, and ahead of more established financial centres such as New York and London.

The cities ranked top for economic stability were all in Western Europe - Vienna in first place, and Barcelona and Madrid tied in second place.

 
Source : Business Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Thailand Court orders Thai PM to step down over TV cooking show

Thailand Court orders Thai PM to step down over TV cooking show

Caretaker PM appointed but Samak’s party may re-elect him later
By GREG LOWE

IN BANGKOK
PRIME Minister Samak Sundaravej was forced to resign yesterday for violating the Thai Constitution, over payments he received for hosting TV cooking programmes.
The Thai Constitutional Court’s unanimous verdict found the payments breached Article 267 of the 2007 charter, which bans ministers from holding outside economic interests.

‘His (Prime Minister Samak’s) premiership is over, and the term of the Cabinet has also expired,’ Constitutional Court Judge Chat Chawakorn was reported as saying. Mr Samak’s party said, however, that it would vote him back as prime minister again.

Mr Samak said previously that he had sought legal counsel before appearing on the two TV shows, and that any monies received were to reimburse travel expenses and did not constitute payment. The court ruled otherwise, ordering him to step down immediately. Thai constitutional law also states that his Cabinet must resign, but it will remain in place until a new prime minister is elected by Parliament within the next 30 days.

Deputy Prime Minister Somchai Wongsawat has been appointed as caretaker-Prime Minister for the interim process.

The ruling will not address the problems that lay at the root of Thailand’s current political turmoil, political observers said.

 
 
‘It is unlikely to solve any of the underlying problems of the current crisis as it appears that the (Mr Samak’s) People’s Power Party coalition has said it will vote him in as prime minister again. The law does not prevent this,’ said Ismael Wolf, a Bangkok-based political and security analyst with PSA Asia.

PPP has a number of options open to it, including re-selecting Mr Samak, electing a new PM or calling a snap election.

Such a move would enrage the right-wing anti-government People’s Alliance for Democracy (PAD), which has occupied Government House for more than two weeks, demanding the prime minister’s resignation and the dissolution of Parliament.

The PAD is likely to use the court’s decision as a rallying point for its campaign, according to Mr Wolf. Though Bangkok’s streets are likely to remain safe despite earlier fears of violent clashes between pro- and anti-government supporters, he said. ‘From a security point of view, there is nothing that indicates an escalation of violence in Bangkok. In fact, there has been no violence since last week,’ he said.

While rifts between pro- and anti-government alliances are becoming increasingly polarised, recent polls revealed that Bangkokians are losing patience with the current situation, as the deadlock between the PAD and the PPP continues to slow Thailand’s already sluggish economy.

International observers are also likely to be bemused by the fact that Prime Minister Samak’s short time as a TV chef achieved what months of PAD protests, and allegations of corruption, cronyism and economic mismanagement could not.

‘It’s farcical, really,’ said Mr Wolf. ‘That he was taken down for appearing on a cooking programme may seem absurd to international observers.’

 
Source : Business Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore HDB upgraders come out to play in quiet market

Singapore HDB upgraders come out to play in quiet market

Their share of private home purchases rises, that of foreigners falls
By KALPANA RASHIWALA

(SINGAPORE) When the property market is hot, foreign buyers are in action. When it quietens, HDB upgraders take the spotlight.

 
HDB upgraders’ share of private home purchases rose to 34 per cent in Q2 2008 from just 28 per cent share in Q1 2008. This is the highest quarterly figure in at least three years, according to DTZ’s analysis of caveats captured by Urban Redevelopment Authority’s Realis system.

The number of private homes bought by those with HDB addresses also increased 35 per cent quarter-on-quarter to 1,199, outpacing a 3 per cent increase over the same period in the number of private homes picked up by those with private addresses.

In absolute terms in Q2, HDB upgraders picked up the most number of units in The Verve in the Balestier area - 36 - followed by 32 at Stadia at Yio Chu Kang Road in the primary market (from developers). Proportionately, The Quartz was the most popular with 86 per cent of its buyers being upgraders.

Developers are targeting this segment. ‘Developers have been pricing launches at more realistic prices and some developers have arranged for banks to offer attractive mortgage schemes for buyers,’ said DTZ executive director Ong Choon Fah.

Meanwhile, the buyers of 97 of the 169 primary market transactions of private apartments/condos below 1,000 sq ft and costing at most $1,000 psf in Q2 had HDB addresses. ‘This could be partly due to singles who are staying with parents in HDB flats purchasing for either investment or owner-occupation,’ DTZ said.

HDB upgraders have also been more active in Q2 in the secondary market, where prices have dropped by as much as 10-12 per cent in Q2 2008 over Q1 2008 in some instances, Mrs Ong said.

The number of private apartments/condos changing hands in the subsale market bought by those with HDB addresses increased 52 per cent Q-on-Q to 152 deals in Q2 2008.

‘HDB upgraders can more easily upgrade to private properties as HDB resale flat prices are still rising, while prices for some private properties have fallen,’ DTZ said.

The median price for private apartments/condos picked up by HDB upgraders in the subsale market declined 8 per cent Q-on-Q to $871 psf in Q2 this year.

Subsales - often seen as a reflection of speculative activity - refer to secondary market deals in projects that have yet to receive their Certificates of Statutory Completion.

The total number of subsales for non-landed private homes rose 25 per cent quarter-on-quarter to 493 in Q2 2008. They made up about 17 per cent share of transactions of non-landed private homes in Q2.

‘This is high considering that there’s very little speculation now compared with last year. Rather, the subsale activity in Q2 seems to have been fuelled by those who’d bought units in the past few years unloading their investments as their units reach or near completion,’ DTZ said.

The median subsale price (of non-landed private homes) continued to fall by 5 per cent quarter-on-quarter to $1,052 psf in Q2 after sliding 8 per cent in Q1 and 4 per cent in Q4 2007. ‘This was due to fewer high-end units being transacted in the subsale market as well as slight price corrections. Owners are now more realistic in asking prices,’ DTZ said.

Median subsale prices of Citylights and The Sail @ Marina Bay were $1,100 psf and $1,810 psf respectively in Q2 2008, down about 2 and 14 per cent respectively from Q1.

Meanwhile, the number of private homes acquired by foreigners (including permanent residents) rose 3 per cent Q-on-Q to 913 in Q2. Foreigners bought 26 per cent of total private homes in the quarter, down slightly from a 28 per cent share in Q1.

DTZ senior director Chua Chor Hoon observed that ‘when private property prices are high, there are more foreigners as they are attracted by the growth story. When private property prices are low, there are more purchasers with HDB addresses as it’s a good opportunity to upgrade at more affordable levels.

‘The price gap between HDB resale flats and private properties is also narrower, so the outlay is smaller for HDB upgraders who can use the sale proceeds from their HDB flats to pay off part of the private property purchase price.’

 
Source : Business Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Tanah Merah Singapore residential site attracts 7 bids

Tanah Merah Singapore residential site attracts 7 bids 

A TENDER for a choice residential development site right next to Tanah Merah MRT station has attracted a healthy seven bids - proving that even in a subdued market, location is king.
TID placed the highest bid - $84 million, or $282 per sq ft (psf) of potential gross floor area, the Urban Redevelopment Authority said yesterday.

The firm is a partnership between the Hong Leong Group and Japan’s leading real estate company Mitsui Fudosan,

Its bid is 12 per cent above the second highest bid - from Sim Lian Land - at $75 million or about $252 psf of potential gross floor area.

Boon Keng Development was third at $61.88 million or about $208 psf of potential gross floor area.

Other bids were much lower, with First Changi Development coming in last at $44.63 million.

The seven bids were a strong showing. ‘It’s a positive shot in the arm for the property market where sentiment is concerned,’ said Knight Frank’s head of research and consultancy Nicholas Mak.

He said the 99-year leasehold Tanah Merah Kechil Avenue site generated healthy interest as it is next to an MRT station.

‘In light of the current cautious sentiment in the residential market, the amount of interest that this site has generated provides evidence that land parcels in good locations with immediate accessibility to transport links are still sought after by developers,’ said CBRE Research director Leonard Tay.

TID’s bid is lower than the $318.50 psf per plot ratio price achieved for the nearby Casa Merah site back in 2006.

Property consultants said the breakeven cost of a condo at the Tanah Merah site should be at $700 psf to $750 psf, based on the top bid. This means that TID, if awarded the site, would be able to sell condo units at between $800 psf and $850 psf, they say.

Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Concourse Skyline Soft launch for Singapore Beach Road condo

Concourse Skyline Soft launch for Singapore Beach Road condo 

By Joyce Teo, Property Correspondent 
  
The 99-year leasehold Concourse Skyline is located along Beach Road. Units will cost between $1,500 and $1,800 psf; sea-facing units will cost $300 psf more.

THE weak property market has forced developer Hong Fok Corp to shun the traditional glitzy condo launch in favour of a ’soft’ release of some flats for its new Beach Road project.

The firm is initially releasing 90 flats in the 360-unit Concourse Skyline. An additional 30 units may be sold if demand is strong enough.

‘If we can sell 120 units, we’ll call it a day,’ said Hong Fok director S.E. Cheong. ‘We would hold back the rest until the market improves.’

Prices for the one- to four-bedroom apartments will be between $1,500 and $1,800 per sq ft (psf) - or from just below $1 million to around $4.2 million. Sea-facing units will cost $300 psf more than those facing the city, said Mr Cheong.

The 99-year leasehold project near Kampong Glam, next to Parkroyal Hotel, has two tower blocks - one with 40 storeys, the other, 28. About 60 per cent of the flats are one-bedders of about 800 sq ft and two-bedders of around 1,000 sq ft. There are also some penthouses.

There will be a podium block with shops on the first storey and 18 units that Hong Fok will keep for rental. Hong Fok will spend about $200 million to build the Concourse Skyline.
Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore SPH to buy popular online financial portal

Singapore SPH to buy popular online financial portal 

Proposed $12m deal for Shareinvestor to expand SPH’s online presence 

By Robin Chan 

SINGAPORE Press Holdings (SPH) is furthering its push into the growing online market with a proposed $12 million acquisition of financial portal Shareinvestor.com Holdings.
The transaction cost could rise to $18million depending on Shareinvestor’s performance this year and next, SPH said in an announcement to the Singapore Exchange yesterday. The media group will pay a further $2 million to $6 million if the targets it has set for the high-profile Internet firm are met.

Shareinvestor is a home-grown web-based trading platform with more than 5,000 subscribers. It provides real time information on shares and other financial instruments as well as providing a forum for investors to trade opinions.

An SPH spokesman said the firm had been ‘planning for some time to develop its financial information offering’ as part of its strategy to ‘expand its online presence and enhance its offerings to investors, advertisers and readers’.

She added that the media group hopes to ‘offer an even more comprehensive and compelling platform to investors and its readers’ and ‘to provide better access to financial information and tools to facilitate investment decision-making’.

Dr Michael Leong, the founder and chairman of Shareinvestor, said: ‘(The sale) will create not only the largest investor relations group, but a more powerful financial portal.’ He added that the portal will continue to do ‘what we do best’ but with a much larger parent and more resources available.

SPH has made a strong push into the new media segment recently. It launched The Straits Times RazorTV, a Web TV station, last month and online search engine Rednano in March.

In April, a subsidiary, SPH Interactive International (SPH II), signed a joint venture with Malaysia’s Star Publications to provide digital media services in Malaysia through the firm 701Panduan. Last October, SPH II took a 60 per cent stake in a Hong Kong company, 701 Sou, to provide digital media services to China.

Another firm that stands to gain from the deal is the Lexicon Group, which owns a 27.6 per cent stake in the financial portal. If it goes through, it will receive between $3.28 million and $4.92 million.

Based on the larger amount, Lexicon - a Singapore-based magazine publisher - said that it will gain about $3.7 million. It reported losses of $42.67 million for the 12 months to March 31.

Executive vice-chairman and managing director Ricky Ang said the deal is an opportune time to divest of its investment in Shareinvestor.

‘It will improve our working capital position, and will allow us to explore other synergistic businesses.’

The deal will be made through SPH’s wholly-owned unit SPH Interactive.

 
Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore Home prices have peaked ‘but won’t crash’

Singapore Home prices have peaked ‘but won’t crash’ 

By Jessica Cheam 
  
Mr Cheng says home prices should stabilise at their current levels.

HIGH-END home prices have dropped by about 15 per cent to 20 per cent and will ’stabilise at this level’, Wing Tai Holdings deputy chairman Edmund Cheng said yesterday.
The United States sub-prime crisis has affected Singapore’s property market, he said.

Transactions here in the first half of the year have dropped by about 77 per cent from the same period last year, he added.

‘In recent launches and resale of high-end properties, the market experienced about a 15 per cent to 20 per cent drop, but I believe we’re going to stabilise here.’

Many developers have strong balance sheets and acquired properties before the property boom last year, so they are sitting on profits and ‘will not be forced to sell below what they believe is the right price’, he said.

The era of condominiums selling out within days of their launch is over, he said. Property sales in Singapore will see a more ‘normal pace’, with decent-sized projects taking six months to a year to sell out.

Home prices have ‘peaked for now’, but they will not crash as long as developers and home sellers hold on to their properties, he added.

Asked about concerns of further home price falls and a potential supply glut in 2010, Mr Cheng replied that these would depend on whether the US financial crisis would deepen.

‘If it’s really bad, obviously Singapore will be affected. In the meantime, we won’t see that (happening).’

Singapore’s burgeoning population, especially foreigners who come to the country to live and work, will be able to absorb this supply, he said.

He was speaking on the second day of the annual Forbes Global CEO Conference, held at the Shangri-La hotel.

In a session titled ‘Rolling the dice on real estate’, a panel of speakers, including Mr Ronnie Chan, the chairman of Chinese developer Hang Lung Properties, spoke on pressing real estate issues.

Mr Chan said China’s real estate market had been affected more by domestic economic conditions than the US crisis.

‘Real estate is a long-term asset. Some short-term impact will be inevitable, but in the longer-term view, it’s not as serious,’ he said.

Mr Stanley Gale, the chairman and managing partner of Gale International, a New York-based property developer, said the US sub-prime crisis was a banking crisis, ‘not a real estate one’.

It is more difficult for developers to get financing in the US now. Despite the nervousness, however, the market has strong fundamentals, he said.

The office market, for example, especially in the Central Business District, has held on very well, he said. ‘The US is open to new ideas and quick to change.’

With the efforts by the US authorities to take over ailing mortgage finance giants Fannie Mae and Freddie Mac, and the US presidential elections in November, ‘we’ll see a different economy in the US going into 2009′.

 
Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Singapore PM Lee urges US to be open to overseas investments

Singapore PM Lee urges US to be open to overseas investments 

By Yang Huiwen 

PRIME Minister Lee Hsien Loong yesterday urged the United States to regard investments from overseas as a positive factor and not a threat.
The US shoud resist adopting the kind of xenophobic attitudes that could scare off foreign investors, he said.

The PM’s comments came during a question-and-answer session with Mr Steve Forbes, the chief executive officer (CEO) of Forbes and the driving force behind the annual Forbes Global CEO Conference being held at Shangri-La Hotel this week.

Mr Forbes said sovereign wealth funds (SWFs) were ‘one of the things Singapore pioneered’, and asked Mr Lee how the US and foreign funds should operate in order to not trigger a political backlash.

Mr Lee told the 450-strong audience that the US ’should treat this with some equanimity’. ‘(America’s) challenge is not sovereign wealth funds per se, it is how to keep the economy open and yet have adequate safeguards to cater to security concerns for foreign investments whether by sovereign wealth funds or other companies which may want to buy your companies from abroad.’

He also pointed out that foreign entities like United Arab Emirates-based Dubai Ports World and the Russian company Gazprom are conventional companies and not SWFs, he said.

‘Its about keeping the economy open, yet have adequate safeguards to cater to foreign investors,’ added Mr Lee.

A year ago, the administration of US President George W. Bush stepped up its vetting of foreign transactions that were deemed to affect national security. Mr Bush also signed into law a Bill that would boost oversight of acquisitions of US companies by foreign firms.

Mr Lee also reiterated that Singapore’s two state-owned investment firms - Government of Singapore Investment Corporation (GIC) and Temasek Holdings - make portfolio decisions without a political agenda or non-commercial objectives.

They have a clear mandate, which is to ‘maximise the long-term risk-adjusted returns of the portfolio’, he said.

GIC has invested about US$18 billion (S$25 billion) in beleaguered US banking giant Citigroup as well as Swiss bank UBS in the past year. Both have been hard hit by the collapse of housing-related debt.

Similarly, Temasek has invested US$5.9 billion in Merrill Lynch since Dec 24 and in August received the nod to further increase its stake in the banking giant.

On whether there will be further tightening of financial regulation given the events unfolding in the US, Mr Lee said that there is a need to ‘find the balance’ in banking and financial regulations, and the regulators will always be ‘behind the game’ as new instruments and new ways of doing business are invented.

He added: ‘Our challenge is not just how we regulate our own banks; that’s not so very hard because there are only three. Our challenge is that the big part of our banking system is connected with the rest of the world and all the big banks are here.

‘So if they go sick not because of us but because of what happens elsewhere, that’s going to have a big impact on our financial system and on our economy and that’s another set of cards we have been dealt which we have not that much say about.’

Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

4% interest rate for savings in 3 Singapore CPF accounts to stay

4% interest rate for savings in 3 Singapore CPF accounts to stay 

CENTRAL Provident Fund (CPF) members will continue to get an interest rate of 4 per cent on a portion of their savings for the next three months.
This is the minimum rate guaranteed by the Government for three CPF accounts: Special, Medisave and Retirement Accounts (SMRA).

Savings in the Ordinary Account will earn an interest of 2.5 per cent.

The 4 per cent guarantee is for two years, starting from Jan 1 this year, said a statement from the CPF Board yesterday.

Thereafter, the floor rate will be 2.5 per cent for all CPF accounts.

The change follows a modification in the way the CPF interest rate is being calculated, a move Prime Minister Lee Hsien Loong announced last year.

With the change, the interest rate for the SMRA is pegged to the 12-month average yield of the 10-year Singapore Government Security plus 1 per cent.

This market-based rate, which fluctuates every three months, was introduced on Jan 1 this year.

However, it was not applied and will take effect only from 2010.

The CPF Board, in its statement, worked out this floating rate for the one-year period, from Sept 1 last year to Aug 31. It averaged 2.77 per cent.

A chart it gave showed the peak was in June, at around 4 per cent. The lowest was in late February, around 2 per cent.

Eventually, the SMRA interest was 3.77 per cent, including the extra 1 per cent. In the old system, the SMRA got a fixed interest of 4 per cent.

Another change in the new rate structure is the interest for the first $60,000 saved in all the CPF accounts of a member. Only $20,000 of this sum can be from the Ordinary account.

The combined balance will earn an extra 1 per cent interest. So, the SMRA will get 5 per cent and the Ordinary Account, 3.5 per cent.

The extra interest will go into the member’s Special or Retirement Account to boost his or her retirement savings.

Source : Straits Times - 10 Sept 2008

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com