Home sales set to rise in 3 to 12 months: CDL

Home sales set to rise in 3 to 12 months: CDL

By Jessica Cheam

PROPERTY developer City Developments (CDL) said yesterday that it expects increasing numbers of homebuyers to enter the market in the next three to 12 months.
Its optimism stems from the sale of more than 80 per cent - or 150 units - of its newly-launched development, The Arte at Thomson. CDL has put 180 units of the 336-unit project on sale.

It said The Arte was ‘a record breaker of sorts’, being one of the few large projects launched in the global economic meltdown ‘that has tasted success’.

CDLs’ statement comes on the heels of newly released data that showed 1,220 new private homes sold last month, just shy of the 1,332 units sold in February.

This makes two consecutive months with more than 1,000 units sold - the first time it has happened in a year.

First-quarter private home sales have hit 2,660 units - about 62 per cent of all of last year’s new home sales.

It has led some to speculate that the market has indeed turned a corner.

CDL said that ‘after absorbing news of forecasts of a steep decline in GDP growth for 2009, the upbeat in sales volume could mean that there is greater confidence that a turnaround is in sight - with a steady rise expected in the property market within the next three to 12 months’.

But analysts maintain that this level of buying may not be sustainable.

Knight Frank director of research and consultancy, Mr Nicholas Mak, has estimated that only 6,000 to 7,000 new private homes are expected to be sold this year, unless the Singapore economy and employment market improve significantly.

However, CDL’s group general manager, Mr Chia Ngiang Hong, said that recent launches have shown that ‘buyers are still willing to spend when they see value and see a good deal’.

Developers, prompted by the challenging economic conditions, have lowered selling prices - by between 5 to 25 per cent - and these factors have contributed to larger transaction volumes, said CDL.

Source : Straits Times - 17 April 2009

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Raffles Hotel reported to be going on sale

Raffles Hotel reported to be going on sale

Saudi Arabian Prince Alwaleed bin Taal Alsaud (next picture), who owns Raffles Hotel, is said to have put the heritage icon back on the market in a bid to offset billion-dollar losses racked up in the financial crisis.

THE wealthy Arab owner of Raffles Hotel is reported to have put the local icon back on the market in a bid to offset billion-dollar losses racked up in the financial meltdown.
Prince Alwaleed Bin Talal Alsaud of Saudi Arabia is said to have put a price tag of $674 million on Raffles, the iconic heritage hotel on Beach Road.

London’s Times newspaper said yesterday that Fairmont Raffles Hotels International is seeking buyers for Raffles and other hotel assets, despite a severely depressed market.

If true, this is the second time in as many years that the Singapore landmark has been the subject of a sale.

However, the communications manager for Prince Alwaleed’s Kingdom Holding Company, which has a controlling stake in Fairmont Raffles, said early this morning that the Prince was not seeking a buyer for Raffles Hotel.

Last May, a proposed sale of Raffles Hotel to a consortium led by former Credit Suisse banker Mark Pawley failed to materialise for reasons that remain unclear. The deal was said to have been tagged at about $650 million.

The hotel is more than 120 years old and gazetted as a national monument.

Built by the Sarkies Brothers in 1887 on the site of a 10-room bungalow, the hotel expanded quickly and its fame grew far and wide, partly thanks to it being mentioned in the works of writers Somerset Maugham and Joseph Conrad.

In 2005, it was part of a hotel portfolio belonging to Raffles Holdings - since delisted - that was sold to US-based Colony Capital for $1.7 billion.

Colony Capital later merged that portfolio with Fairmont’s assets to create Fairmont Raffles. Other local assets owned by Fairmont Raffles include Fairmont Singapore and Swiss�tel The Stamford.

The group has 123 hotels under the Fairmont, Raffles, Swiss�tel and Delta brands.

The Saudi Arabia-based firm is one of the world’s leading hotel investors.

But industry sources told The Times the Saudi Prince is considering a range of disposals after a sharp fall in value of some of his biggest investments.

The Evening Standard in Britain yesterday said he is also looking for a buyer for the Savoy, London’s most famous hotel, which could be worth more than £200 million (S$445 million). Kingdom Holding has denied this report as well.

Prince Alwaleed’s investments have taken bruising hits, most notably in American banking giant Citigroup. His initial 3.9 per cent stake has plunged in value from more than US$50 a share two years ago to about US$4 today.

Last October, the Prince tried to stabilise the situation by increasing his stake to 5 per cent, but the shares have continued to nosedive.

KHC also lost a bundle of cash on its investments in Songbird Estates, the majority owner of London’s Canary Wharf financial complex, Euro Disney and Rupert Murdoch’s News Corporation.

Kingdom Hotel Investments, a small London-listed vehicle in which the Prince has a 55 per cent stake, has also lost more than two-thirds of its value in the past 12 months.

Fortune magazine said his wealth has fallen from US$21 billion to about US$13 billion (S$19 billion) over the past year.

BLOOMBERG

Source : Straits Times - 17 April 2009

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Simei condo-style flats: No balloting

Simei condo-style flats: No balloting

360 four- and five-room DBSS units can be booked on the spot

By Joyce Teo

An artist’s impression of the Parc Lumiere development under the Design, Build and Sell Scheme. The project will offer condo-style fittings but not facilities.

A NEW condo-style estate being launched by the Housing Board will allow buyers to secure a flat on the spot and not have to join a ballot like for other Design, Build and Sell Scheme (DBSS) projects.
Parc Lumiere at Simei Road will have 120 four-room flats and 240 five-room units. The four-roomers, of 1,012 sq ft each, are priced at between $378,000 and $425,000. The five-roomers range from 1,152 sq ft to 1,195 sq ft and are priced at between $462,000 and $575,000. The average price is $425 per sq ft (psf).

The walk-in selection sale starts with a viewing period from tomorrow for buyers to check out the showflats and enquire about eligibility. Booking on a first-come, first-served basis starts next Tuesday. The executive director of developer Sim Lian Group, Ms Diana Kuik, said the booking date may be brought forward if there is strong interest.

Parc Lumiere will have eight 12-storey blocks and an elevated landscape deck. Like other DBSS projects, it offers condo-style fittings such as bay windows and balconies, built-in wardrobes and kitchen cabinets. But unlike condominiums, DBSS projects do not have facilities such as pools and barbecue pits.

The Peak @ Toa Payoh, a DBSS project with 1,203 units, was launched on Wednesday for sale via the balloting system. Buyers have until April 28 to apply.

DBSS projects are public housing and so are subject to rules for new HDB flats. For instance, only those who earn $8,000 or less a month can buy them.

Because DBSS homes are sandwiched in a narrowing price gap between private condominiums and HDB flats, experts have cited a $500,000 price point as the resistance level for such homes.

Real estate company PropNex’s chief executive Mohamed Ismail Gafoor said there may be some buyer resistance for the Parc Lumiere five-roomers.

Other DBSS projects like Natura Loft in Bishan and Park Central in Ang Mo Kio still have units available for sale.

Recent DBSS projects take into account peak HDB prices because the developers had bought their land when the market was still fairly strong, Mr Ismail said. Sim Lian bought the Simei site last June for $137 psf of potential gross floor area.

Mr Ismail said four- and five-room flats in Simei are now valued at around $350 psf. If buyers do not mind an older flat, they can get a five-room unit nearer the Simei MRT station for the price of a four-room DBSS flat, he said.

Ms Kuik said Sim Lian should be able to complete Parc Lumiere by the first half of 2011. The developer was behind Singapore’s first DBSS project, the 616-unit Premiere @ Tampines, which drew nearly 6,000 applications in late 2006.

Source : Straits Times - 17 April 2009

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Doing business? S’pore is fourth best

Doing business? S’pore is fourth best

Republic goes up four spots in Forbes annual world ranking

By Fiona Chan

SINGAPORE has been named the fourth best country in the world in which to do business, an achievement that could help pull the country out of its worst recession in history.

The annual ranking of business-friendly countries by financial magazine Forbes Asia saw Singapore jump four spots from last year, leapfrogging Britain, Sweden, Ireland and Finland. Singapore also kept its regional top-dog position as the economy with the best business conditions in the Asia-Pacific. New Zealand was fifth, Australia eighth and Hong Kong ninth.

Business-friendly economies like Singapore, which are able to attract entrepreneurs, investors and workers, are ‘in a much better position than others to rebound’ from the economic downturn that has gripped the world, Forbes said.

Its survey ranked 127 countries according to criteria such as taxes, red tape, investor protection, stock market performance, promotion of free trade and freedom of expression and organisation.

The only three countries ahead of Singapore in the rankings were Denmark, the United States and Canada.

To top it off, 17 Singapore-listed firms also made it to this year’s Forbes Global 2000 list of the world’s 2,000 biggest public firms, ranked by profits, assets, sales and market value. Last year, only 14 firms from Singapore were featured.

In fact, with the financial meltdown centred around the US and Europe, Asian firms featured more prominently on the list this year. A total of 681 from the region made the list, 61 more than last year.

But the US is still the single dominant nation with 551 firms represented - including list-topper General Electric - although this number is down by 47 from last year’s. Japan, the clear leader in Asia, fielded 288 firms to the list, 29 more than last year. China, at No. 2, had 91 firms, an increase of 21 from that last year.

‘It’s not surprising that more Asian companies would be in the list this year,’ said Mr Kevin Scully, executive chairman of independent equity research firm Net-

Research Asia. ‘Asia is not the source of the economic problems we’ve been having, so their companies have probably fared better on a relative basis.’

The total turnover of all firms on the list was US$32 trillion (S$48 trillion), up 7.6 per cent from last year’s - the smallest gain since the list started in 2004.

SingTel led the local pack on Forbes 2000 in 290th place, up from 360th last year. It was followed by list newcomer Wilmar International at 314th, and DBS Group at 337th, up from 358th last year. Other newcomers included Fraser & Neave and Singapore Press Holdings.

Source : Straits Times - 17 April 2009

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World economy expected to pick up before US mid-term elections, says MM Lee

World economy expected to pick up before US mid-term elections, says MM Lee

By Hasnita A Majid,

SINGAPORE: Minister Mentor Lee Kuan Yew says he expects the world economy to pick up before the US mid-term elections at the end of next year.

This is because a battered US economy will cost the current government votes.

His assessment differs from that of US Federal Reserve chairman Ben Bernanke and Treasury Secretary Timothy Geithner — that the economy will pick up at the end of this year or early next year.

Mr Lee said “My own guess is that recovery will not take place till the US Congress, both the lower and the upper House and Senate, vote in vast sums of money to clear all the bad debts and toxic assets.”

He says to do that in one tranche will make voters angry but by the middle of next year, in order to win votes, the US Congress will have to take the step of pumping in more public funds to boost the economy.

In a dialogue with about 100 senior and new members of the Community Party of Vietnam in Hanoi, Mr Lee says the world economy will pick up when the US recovers.

And when that happens, there will be slower growth but enough to allow all countries, including Singapore and Vietnam, to resume trade.

On Vietnam, he expects the country’s economy to continue growing, although at a slower rate of four to five per cent, as its economy is not too dependent on exports.

Countries like Singapore which depend heavily on imports and exports however, are not as fortunate.

Mr Lee says Singapore will have to find its way out of the doldrums and cannot depend on anyone for help, unlike Hong Kong which has China’s support.

But he is confident Singapore will survive the crisis and is optimistic its economy can recover just as quickly as it has declined because of its globalised economy.

He told his audience that Singapore is taking this opportunity to upgrade its workforce to a higher value chain, especially in growth areas that have little competition from China and India.

One area is in research and development which will attract big pharmaceutical companies.

Mr Lee said: “There are many such openings for us where China and India will take some time to catch up. While they can get individuals to be as good as us, it is difficult for them to get their systems to be as good as ours. We have more transparent systems, more intellectual property protection, have more laws observed and the investors feel safe to invest in Singapore.”

Mr Lee also met Vietnam’s Communist Party General Secretary, Nong Duc Manh, and discussed the current economic situation.

They also talked about ways to further cooperation and friendship between their two countries.

- CNA/yt

Source : Channel NewsAsia - 17 Apr 2009

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Sales at City Development’s “The Arte” surpassed 80%

Sales at City Development’s “The Arte” surpassed 80%

By Valarie Tan,

SINGAPORE: City Developments (CDL) said sales at “The Arte” condominium project have surpassed the 80 per cent mark.

The developer said 150 units were snapped up in a Phase 1 launch recently with S$190 million of deals recorded.

Most of those sold went for under S$2 million.

The 336-unit freehold project at Thomson Road has been priced at an average of S$880 per square foot, with units ranging from 1,055 sq ft for a two-bedroom apartment to 4,000 sq ft for a penthouse.

CDL has also offered buyers an interest absorption scheme which allows them to defer the bulk of their purchase till completion.

New private home sales surpassed the 1,000 mark in March, the second month in a row. - CNA/vm

Source : Channel NewsAsia - 17 Apr 2009

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Two insurance firms launch rent protection scheme

Two insurance firms launch rent protection scheme

By EMILYN YAP

AS disputes between landlords and tenants hot up, two insurance companies have launched a rent protection insurance scheme to shield residential landlords from rental income losses.

Said to be the first in Singapore and Asia, the product from Jardine Lloyd Thompson (JLT) and QBE Insurance makes up for up to 12 months of lost rent (capped at $100,000) in several events, such as the tenants defaulting on payments or real estate agents absconding with rents collected.

The insurance also covers other administrative costs such as legal fees incurred in evicting tenants.

At 15 per cent of one month’s rent, premium for the rent protection insurance is affordable, said JLT business development director Gerard Lee.

‘Landlords and real estate agents . . . have commented that it is being introduced at the right time in Singapore.’

The insurers noted a rising number of landlord-tenant dispute claims.

According to data they sourced from the Small Claims Tribunals of the Subordinate Courts of Singapore, there were 1,137 such cases in 2008 - 70 per cent more than a year earlier.

And feedback from the real estate industry indicates that most disputes do not even reach the tribunals, the insurers highlighted.

As Dennis Wee Group director Chris Koh said, it is hard to take some tenants to task if they have simply disappeared.

With market conditions deteriorating, the insurers also felt that rent protection insurance would come in handy.

Institute of Estate Agents president Jeff Foo observed that rent defaults have increased significantly from nine months ago, and such cases would hurt landlords that rely on rental income for mortgage payments.

The new product will be distributed through real estate agents, who will get a referral fee. Coverage applies for entire tenancy periods of up to 24 months, and landlords have to bear deductibles in some cases.

Rent protection insurance has spawned premiums of over A$30 million (S$32.5 million) in Australia, JLT said.

‘We believe that this product will find comparable success in Singapore and in Asia.’

Source : Business Times - 17 Apr 2009

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Recession keeping US inflation risks under control

Recession keeping US inflation risks under control

Severe inflation from stimulus expected to be at least 2-3 years away

(WASHINGTON) So much for fears that flooding the economy with money to fight the financial crisis would ignite inflation. The recession is keeping a tight lid on both prices and wages.

Consumer prices have fallen over the past year at the fastest clip in more than a half-century, including an unexpected drop last month. Economists see little sign that inflation will be a problem anytime soon.

Adding to evidence of the economy’s weakness, the Federal Reserve said on Wednesday that production at the nation’s factories, mines and utilities fell in March for the fifth month in a row, and faster than analysts predicted.

There was some good news: A series of Fed snapshots from around the country found a few faint signs that the steep plunge in economic activity that began last fall is beginning to level off.

For example, the report said that while home prices and construction are still declining in most of the country, the number of people shopping for homes has begun to rise.

Consumer prices dropped 0.1 per cent for March, the Labor Department said. Over the past 12 months, consumer prices have dropped 0.4 per cent - the first 12-month decline since 1955.

Economists seem to think that the United States has entered a period of sustained low inflation. The trillions of dollars committed by the government to stop the financial crisis will probably prevent broad price declines, they say.

Some economists said that prices may keep declining slightly this year - though not enough to trigger a dangerous bout of deflation.

Economists worry about any widespread and prolonged decline in prices. Deflation drags down wages, clobbers home prices and leads people and businesses to hold off on buying things so they can wait for lower prices.

Analysts say that further low inflation will keep rates low on mortgages and other loans. Low inflation also could allow businesses to keep pay raises to a minimum, even after the economy begins to recover.

John Ryding, chief economist at RDQ Economics, said in a note to clients that the overall drop in prices for the past year is ‘not evidence of general deflation pressures but a product of the bursting of the speculative bubble in energy prices.’

The price of gas, home heating oil and natural gas all fell slightly last month. Food costs dropped by a minuscule 0.1 per cent. The declines offset the biggest rise in tobacco prices in more than a decade.

Travel got cheaper but medical care, education and clothing all became slightly more expensive.

The core inflation figure, which does not account for energy and food prices, rose 0.2 per cent, the same as it has over the past three months. Core inflation is up 1.8 per cent for the past year.

Some economists have expressed concern that the Federal Reserve’s interest rate cuts and other efforts to stimulate growth are setting the stage for severe inflation once the economy recovers.

In addition to cutting its benchmark short-term interest rate to nearly zero, the Fed has vastly expanded its lending to financial institutions, by more than US$1 trillion since the financial crisis intensified last fall.

But Dean Maki, an economist at Barclays Capital, said any serious inflation risks are at least two to three years away.

The weak new figures on industrial production point to one reason why. Over the past three months, industrial production has plunged at an annual rate of 20 per cent - the biggest quarterly decline in more than three decades.

The nation’s factories, mines and utilities operated at just 69 per cent of capacity last month, the lowest rate on records that go back to 1967. — AP

Source : Business Times - 17 Apr 2009

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CityDev sells 150 units of The Arte for $190m

CityDev sells 150 units of The Arte for $190m

THE buzz continues at property launches on the island. City Developments said yesterday that it achieved about $190 million of sales from selling about 150 units at The Arte at Thomson since March 21.

The freehold project is priced at $880 psf on average. No premium is being being charged for an interest absorption scheme (IAS) that CDL has extended to buyers. The scheme means buyers pay just the initial 20 per cent to CDL and defer paying the bulk of their purchase price until The Arte is completed. However, buyers have to take up a housing loan at the point of purchase.

CDL has released 180 of the total 336 units in the project, which comprises two 36-storey high towers.

The majority of The Arte’s buyers have private home addresses. Most of the units are going for under $2 million.

Over at Holland Road, Bukit Sembawang is releasing more units at its freehold Verdure from today. It has sold 14 of the 34 apartments in the five-storey project released last weekend. Verdure comprises 69 apartments, with an average price of about $1,350 psf, and six strata semi-detached homes, which cost about $4.8 million on average.

Bukit Sembawang had previously offered an IAS without charging any premium, but from today, buyers will have to pay 2 per cent more to benefit from the IAS.

Over at Tembeling Road in the Katong area, Alpha Land International is offering a small development with a total of 12 apartments. Prices in the five-storey freehold project, which is expected to be completed towards the end of this year or early next year, range from $663,840 (for an 818 sq ft two-bedroom unit) to $1.64 million (for a 2,379 sq ft four-bedder penthouse).

Alpha Land is offering an early bird discount in the form of renovation packages ranging from $10,000 to $25,000, depending on the size of the units. Tembeling Court is being marketed by Texan Associates.

Sim Lian Group will also launch its 360-unit HDB project Parc Lumiere tomorrow. Offered under HDB’s design, build and sell scheme, units in the Simei development have an average selling price of $425 psf. Parc Lumiere has four and five-room flats, with four-room flats selling for $378,000-$425,000 and five-room flats going for $462,000-$575,000.

Source : Business Times - 17 Apr 2009

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Singapore talent a big draw for MNCs in China

Singapore talent a big draw for MNCs in China

By ANNA TEO

(SINGAPORE) Singaporeans - along with Hongkongers - are, and will continue to be, a key source of foreign labour for China, a survey has found.

In turn, multinationals here that hire executives and other skilled staff from China say that almost half (48 per cent) of their foreign employees come from the mainland - and expect the proportion to grow over the next three years.

This reciprocal labour dependence between Singapore and China is one of the findings from the survey by KPMG International of 260 MNC senior executives in 11 economies on their priorities when deciding where and how to locate their businesses, and their hiring practices.

Some 18 per cent of the respondents from China indicated that they recruit from Singapore. Of these, 34 per cent of their foreign workforce are Singaporeans, according to the findings.

By far, Hong Kong and Singapore stand out as the biggest sources of foreign skills for China, with smaller ‘contributions’ from Korea, Japan and the US, although Malaysia, Australia and India are expected to make inroads into China’s expatriate scene in the next three years.

Singaporeans also figure as a key source of foreign labour for MNCs in Hong Kong, accounting for 46 per cent of their non-local staff. Other countries that list Singapore among their top 15 sources of foreign staff are Japan, Australia, Switzerland and the United States - but not the United Kingdom nor India.

Overall, what emerged from the survey conducted late last year is a growing pool of Chinese expatriates worldwide, with companies in Australia, India, Japan, Spain, the UK and US all planning big increases in the number of Chinese they employ.

The survey also found that while countries in Asia Pacific tend to rely on a small number of other states for workers, companies in the UK, Spain and the US show no particular preference as to where their foreign workers come from.

But some 60 per cent of suggested that ‘businesses’ preferred to hire local workers while a further 37 per cent had no preference.

And while there is growing pressure in many countries to protect domestic labour, and despite rising recruitment and wage costs, businesses recognise the advantages of diversifying their sources of skilled labour.

Singapore respondents, it seems, are second only to the Chinese in their enthusiasm for a strong government hand in attracting and retaining workers; elsewhere, in Europe particularly, businesses see that as their own responsibility.

In all, some 90 per cent of all respondents agreed that governments should collaborate by introducing more flexible immigration policies to attract workers to sectors where they are most required. Eight in 10 said immigration requirements should be relaxed overall.

And while tax policies aimed at improving labour flows are welcome, companies generally prefer direct incentives. They also value ‘favourable business conditions’ rather more than a well-qualified workforce when considering a new business location.

When asked where they would locate themselves if they were to start afresh next year, and again in five years’ time, China came out the clear favourite, with the US in second spot for 2009 but overtaken by India for 2013.

In fourth and fifth positions are Singapore and Hong Kong, ‘both punching well above their weight in GDP terms’, the report notes.

Source : Business Times - 17 Apr 2009

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