IRAS reduces Annual Values of over 115,000 private properties in Q1

IRAS reduces Annual Values of over 115,000 private properties in Q1

By May Wong,

SINGAPORE : The Inland Revenue Authority of Singapore (IRAS) has reduced the Annual Values of over 115,000 private properties in the first quarter of this year.

That is almost 100 per cent of the total number of properties reviewed.

With the reduction and the 40 per cent property tax rebate announced in this year’s Budget, owners of these properties will pay between 45 per cent and 60 per cent less in terms of property taxes.

In a news release, IRAS said most - 84,900 - of the properties which have Annual Values reduced are private residential ones.

IRAS has also reviewed more properties in the first quarter of this year, compared to the same period last year.

It reviewed 116,200 properties this first quarter, up from just 31,300 in the first three months of last year.

IRAS reviews the Annual Values of properties every year to ensure that they reflect prevailing rental market values for property tax computation.

It said that all private properties, including retail ones, will be reviewed by the third quarter of this year.

As for HDB flats, IRAS pointed out that Annual Values should be higher than the existing ones this year, based on current market rentals.

But it has kept the Annual Values of such flats unchanged this year in view of the poor economic conditions. - CNA/ms

Source : Channel NewsAsia - 08 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

US Treasury eases rule for bad-assets programme WASHINGTON

US Treasury eases rule for bad-assets programme WASHINGTON

WASHINGTON: - The Treasury Department is making it easier for hedge funds and other private investors to participate in its plan for buying up banks’ bad assets, an acknowledgment that the interest level so far has been lacklustre.

Analysts said the move shows the programme has not yet attracted enough large fund managers who may be wary of ending up on the wrong side of a congressional probe or public backlash. The programme’s requirements also excluded too many smaller managers, they said.

The government is relying on private investors to purchase poorly performing real estate investments currently weighing on bank balance sheets.

Treasury on Monday relaxed a requirement that companies already manage at least US$10 billion (S$15 billion) of the mortgage-backed securities to participate. A Treasury official said that only a few firms qualified under that criteria. The department also emphasised that the programme is open to small and women- and minority-owned firms and said it will encourage such firms to partner with private asset managers.

‘Clearly, they weren’t getting the participation they needed,’ said Mr Bernie McGinn, chief executive of McGinn Investment Management, a money manager based in Alexandria, Virginia.

Some fund managers are concerned about teaming up with the government in the aftermath of the firestorm over bonuses paid to executives at insurance giant American International Group, which has received US$182.5 billion in bailout funds.

The House held hearings on the issue and approved legislation taxing the bonuses at 90 per cent, though the measure has not become law.

‘Investors are leery about getting involved with any government programme, because they don’t want to be very visible,’ said Mr Steven Persky, managing partner and co-founder of Dalton Investments, a 10-year-old hedge fund specialising in distressed debt. ‘You don’t want to be on the wrong side of a congressional investigation.’

Large banks, such as Citigroup, which have received billions in government bailout funds, could seek to buy toxic assets through the public-private partnership, though Treasury said it would consider a financial institution’s ‘overall financial health and stability’ before approving its application.

But Mr McGinn noted that some large banks are more likely to sell assets into the programme than buy.

The new guidance follows details of the public-private investment partnership announced by Treasury Secretary Timothy Geithner last month. The programme will use government money and loans from the Federal Reserve to finance purchases by private investors of commercial and residential mortgage-backed securities from banks. A second part of the programme will finance purchases of loans.

Mr Geithner has said the initiative will use between US$75 billion and US$100 billion from the bank rescue fund.

The application deadline for private fund managers also was extended by two weeks until April 24. Treasury officials plan to approve the first set of applications by May 15. Those managers would then raise capital, which Treasury has offered to match. The private firms also can borrow additional money from the Treasury or the Fed.

The plan is that firms would then use that pot of money to purchase toxic assets from banks.

ASSOCIATED PRESS

Source : Business Times - 08 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com

Straits Trading selling 10 apartments

Straits Trading selling 10 apartments

$3m asking price for each Gallop Gables unit comes with rental guarantee
By Joyce Teo

Gallop Gables, a freehold four-storey 140-unit development, has seven low-rise blocks. Straits Trading is asking $1,156 psf for its 10 units there.

INVESTORS are being offered 10 units in the 12-year-old Farrer Road district residential development Gallop Gables at the knock-down price of around $3 million each - complete with a rental guarantee.
The seller is Straits Trading, which has had a year to conduct a strategic review of its assets after Ms Chew Gek Khim’s Tecity group took over as a controlling shareholder.

The firm’s new executive vice-president Eric Teng told The Straits Times the sale is to enable it to invest in distressed assets that may surface locally and regionally - even though the sale itself is being done at a reduced price. ‘This is just our financial discipline. Before you buy something, you should sell something,’ said Mr Teng.

The average sale price per sq ft (psf) is about 23 per cent lower than what Straits Trading was seeking for the units last July.

Gallop Gables is a freehold four-storey 140-unit development near the Botanic Gardens. It has seven low-rise blocks.

For each of the 10 units, Straits Trading is offering a guaranteed rental yield of 7 per cent for two years. It will also absorb the maintenance fee for two years.

The units are fairly big, from 2,800 sq ft to 3,200 sq ft each. The firm said it is offering investors a ‘rare opportunity’ to invest in ‘a solid piece of real estate, with an unprecedented yield of 7 per cent a year or 14 per cent for two years’.

At that kind of yield, the rent should be about $12,000 to $13,000 a month. But right now, the yield for the estate should be only around 4 to 5 per cent, said a property expert who declined to be named.

The firm’s average asking price for the 10 units is $1,156 psf, slightly above the average $1,130 psf registered for two recent deals in the development.

Last July, the firm invited expressions of interest at $1,500 psf, or about $4.5 million each, for 38 tenanted units there. The property market has since deteriorated markedly.

That sale bid had come about three months after Tecity gained control of Straits Trading. Tecity is the parent of a group of investment companies built by the late Tan Chin Tuan, former OCBC Bank chairman - Ms Chew’s grandfather.

He had helped OCBC acquire Straits Trading in the 1950s.

In the 1980s, Straits Trading’s share price was more than $4, almost twice its price between 1995 and 2003. Tecity paid $6.70 a share for Straits Trading.

Yesterday, the shares closed five cents higher at $3.20 each.

In a separate announcement, Straits Trading said Mrs Victoria Tse will be retiring as the senior executive vice-president and group chief financial officer on July 7. She will be succeeded by Mr Eldon Wan, financial controller of Tecity, from yesterday.

It has also appointed Mr Iqbal Jumabhoy, who has more than 20 years of executive management experience, as chief executive of hospitality to oversee its hospitality management arm and hotel assets.

Mr Teng was named executive vice-president of property sales and leasing as well as adviser, corporate communications. He retains his role as adviser to Tecity and CEO of Tan Chin Tuan Foundation.

Mr Teng will oversee the sale of completed residential property owned by the group as well as the leasing of the Straits Trading Building in Battery Road. This office block will be ready by the end of the year and is now about 25 per cent leased.

Straits Trading was founded in 1887. Apart from hotels and property, its other business is in tin mining.

Source : Business Times - 08 April 2009

Singapore Property - Buy, Sell, Rent, Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com