Strong demand at Nathan Residences relaunch

Strong demand at Nathan Residences relaunch 

By Joyce Teo 

FRESH evidence emerged yesterday of a possible short-term rebound in the private residential market with strong demand at a 91-unit development in River Valley.

A quiet relaunch preview was held at the freehold Nathan Residences - and 75 units were snapped up quickly. These sales were sealed even though there was no interest absorption scheme or stamp duty waiver to entice buyers.

The deals were done at $1,220 to $1,320 per sq ft - a level market observers say is not entirely cheap but is easily 30 per cent to 35 per cent below last year’s prices.

Small developer Tat Aik first released the Nathan Road project for sale in September last year. At prices averaging $1,800 to $2,000 psf, the project saw no takers.

Yesterday, the one-bedders were sold from about $730,000 to $785,000 while the two-bedders went for about $960,000 to just over $1 million. Those are the only two options at Nathan Residences - the one-bedders at 592 sq ft and the two-bedders at 786 sq ft.

All the one-bedders have been sold. The left-over units include eight penthouses costing around $1.6 million each and a few ground-floor units priced around $1.2 million.

Knight Frank, which marketed the project, said buyers were mostly couples and singles, and an overwhelming number were locals and permanent residents. HDB upgraders made up about 30 per cent of buyers.

‘This shows that confidence is back and people are willing to buy when something good comes along,’ said its executive director, Mr Peter Ow.

A new sold-out project sale nearby - The Mercury in Shanghai Road - was launched in March this year. Its 67 units went for a lower price range of $779 psf to $1,258 psf in March and April.

Market observers have said that more developers are preparing to launch their projects, hoping to bank on the renewed buying interest in the market.

Demand for new projects has generally risen as developers lower prices from earlier levels. The buying mood has also largely been helped by the recent rally in the stock market, observers said.

However, quite a number of individual sellers appear to have started raising their prices from the lows, following in the footsteps of some developers.

Upcoming major launches this month may include the 152-unit One Devonshire in the Killiney Road area, the 388-unit Oasis@Elias in Pasir Ris and Frasers Centrepoint Homes’ 330-unit leasehold project near the Woodleigh MRT station.

Source : Straits Times - 01 July 2009

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Chingay moves from Orchard to Marina Bay

Chingay moves from Orchard to Marina Bay

Change of parade site from next year aimed at drawing bigger crowds

By Lim Wei Chean

THE annual Chingay Parade has a new home.

From next year, the assorted stilt-walkers, musicians and other performers who grace the parade will strut their stuff over a 1km route that will begin at the Formula One Pit Building at Marina Bay and end at the Singapore Flyer.

The move marks an end to Chingay’s 19-year association with Orchard Road.

The parade - a street procession to celebrate Chinese New Year - had been moved from Singapore’s main shopping street to City Hall in 2007, but it was to have been a temporary, two-year arrangement while Orchard Road underwent a $40 million makeover.

However, the organisers of the parade, the People’s Association (PA), decided on a permanent move to Marina Bay to attract bigger crowds.

The new route will have seating space for 18,000 spectators a night, more than triple the 5,500 at Orchard Road.

‘It will give us a chance to put on a bigger and more spectacular show,’ said Mr Nah Juay Hng, chairman of the executive committee for the event.

Chingay is a top draw for tourists and Singaporeans alike each year, and tickets are snapped up quickly once they go on sale.

Tickets for next year’s parade, to be held on Feb 19 and 20, will go on sale from Aug 1. They will cost between $25 and $80.

Organisers will also be leading a drive to get people overseas to buy tickets.

To do this, the PA has teamed up with two travel agents. GTMC Travel and City DMC will market and sell tickets in countries such as China and India, and will offer tour packages with the parade as a highlight as well.

At a briefing yesterday, organisers gave a peek at what is to come at next year’s performance, which will incorporate creative takes on Asian legends and traditional arts.

The opening act promises to be spectacular, with a dance that incorporates the setting off of firecrackers, called Firecracker Dragon. Performers will be specially flown in from the Chinese city of Guangxi.

More details on the six-act parade will be announced later.

Orchard Road businesses, meanwhile, say that Chingay’s move is a boon for them. The chairman of the Orchard Road Business Association (Orba), Ms May Sng, said retailers have always had issues with the hosting of Chingay because of space constraints.

They felt that the stands erected for spectators hampered pedestrian traffic, thus hurting business.

Ms Sng added that Orchard Road will still have plenty of activities without Chingay - the annual Christmas Light-Up, the Great Singapore Sale and the Singapore Fashion Festival, among others.

She said Orba was working with the Singapore Tourism Board to add more events.

Others, however, said the loss of Chingay dampens some of the allure of Orchard Road.

Said one Orchard Road hotelier, who declined to be named: ‘So many things are happening in Marina Bay - the F1 race, the integrated resort. It’s inevitable that will take some attention away from us.’

Source : Straits Times - 01 July 2009

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AIG signals more losses on derivatives sold to banks

AIG signals more losses on derivatives sold to banks

(NEW YORK) American International Group Inc said the risk of losses on derivatives sold to European banks may last ‘longer than anticipated’ if the contracts aren’t terminated.

AIG’s new board reflects the muscle wielded by federal authorities since taxpayers ponied up billions of dollars to keep the insurer afloat.

‘Given the size of the credit exposure, a decline in the fair value of this portfolio could have a material adverse effect on AIG’s consolidated results,’ the New York-based insurer said on Monday in a regulatory filing updating its 2008 annual report.

Meanwhile, AIG set to pad out its shrinking board yesterday when a new slate of directors stood for election at its annual meeting.

The nominees will help rebuild a board decimated in the past year by seven resignations, one retirement and three other directors not standing for re-election.

The meeting, to be held on Wall Street, will be the first public opportunity for shareholders to vent frustration since the insurer’s financial implosion last year.

Shareholders were all but wiped out as AIG recorded US$99 billion in losses last year, largely stemming from a financial product unit’s foray into risky derivatives. Shares have plummeted to just above US$1 following the dilutive effect of the government’s move to take majority ownership.

AIG had delayed its annual meeting, usually held in May, to allow time to reshuffle directors. The board that emerges will feature many new faces.

Apart from George Miles and Morris Offit, who have served as directors since 2005, the 11-member board will have been entirely elected within the last year.

Joining the board since 2008, were Suzanne Nora Johnson, a former Goldman Sachs vice-chairman; Dennis Dammerman, former General Electric Co finance chief, and Ed Liddy, chief executive and chairman, although he plans to stand down as soon as successors are found. The rest of the board will be comprised of nominees: Harvey Golub, Laurette Koellner, Christopher Lynch, Arthur Martinez, Robert S Miller and Douglas Steenland.

The new board reflects the muscle wielded by federal authorities since taxpayers ponied up billions of dollars to keep AIG afloat. Trustees appointed to have oversight of the government’s 80 per cent stake in AIG wanted to shake up the board to raise corporate governance standards, they said last month.

At least seven of the new directors were recommended by either the US Treasury or the trustees.

In a May statement, Mr Liddy said, ‘adding these individuals to the AIG Board will help AIG achieve its goals of maximising the value of AIG’s core businesses and repaying US taxpayers.’ Mr Dammerman, tapped by government officials to join AIG’s board last November, is leading the search for a new chairman and CEO.

AIG is to hold the shareholder meeting at its 72 Wall Street building, adjacent to 70 Pine Street headquarters. It recently agreed to sell both buildings, although it still occupies them for now.

Alongside prime real estate sales, AIG has been trying to find buyers for many of its businesses around the world. It needs to raise enough to pay off some US$83 billion in federal loans.

Last week AIG said it had finalised a deal to give the New York Federal Reserve stakes in two large life insurers, a development expected to reduce the debt eventually by about US$25 billion.

The units are being positioned for initial public offerings, as is AIG’s large global property-casualty division, AIU Holdings. Other AIG asset sales have included much of its stake in reinsurer Transatlantic, a US personal lines business and other units in Switzerland, Mexico, Thailand and Russia. — Bloomberg, Reuters

Source : Business Times - 01 July 2009

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US economy showing greater signs of stability: Geithner

US economy showing greater signs of stability: Geithner

(NEW YORK) US Treasury Secretary Timothy Geithner said the American economy is showing signs of emerging from its slump and financial markets are starting to stabilise.

‘The national economy is showing some greater signs of stability’ as consumer confidence and credit conditions improve, Mr Geithner said on Monday at a community-development event in New York.

Still, the United States faces ‘extremely challenging times’ and ‘we have a lot to do to lay the foundation for financial stability’, he said.

Mr Geithner attributed the signs of improvement in part to a US$787 billion stimulus plan signed earlier this year by President Barack Obama. The federal government may need to do more to ensure the economy rebounds from the recession, Mr Geithner said.

‘We’re going to keep at it until we get a strong foundation for recovery in place,’ he said, mentioning spending on education, infrastructure, as well as efforts to reduce healthcare costs.

Mr Geithner also said that US$90 million in lending assistance from the economic stimulus legislation will help communities finance local development.

At the event in New York, Mr Geithner announced awards to 59 organisations through the Community Development Financial Institutions programme, which was started during the Bush administration and received a boost from the US$787 billion stimulus legislation passed earlier this year.

The stimulus is ‘playing a critical role in restoring economic growth and strengthening our nation’s financial stability by developing and investing in local communities’, Mr Geithner said in his prepared comments. — Bloomberg

Source : Business Times - 01 July 2009

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S’pore market cap surges 38.7% in H1

S’pore market cap surges 38.7% in H1

Top five companies retain May rankings in June, which sees just 1.7% rise

By JOYCE HOOI

(SINGAPORE) The first half of 2009 saw a roaring 38.7 per cent surge in market capitalisation for the Singapore stock market, even though the gain in June was more like a whimper.

Market capitalisation in June rose by just 1.7 per cent month-on-month to $545 billion, but still a 10-month high since last August shortly before the Lehman Brothers collapse sparked a stampede out of equities.

While the first quarter of the year saw market capitalisation failing to break the $394 billion ceiling set in January, market sentiment surged at the start of the second quarter to make up for the oversold state of stocks. April saw counters gaining 12.6 per cent in market capitalisation month on month and May recorded a further 23.2 per cent surge to $535.7 billion, as investors rushed back into the market as quickly as they had rushed out last year.

‘In June, price-earning valuations and price-to-book-values started to normalise, so the market capitalisation also started to go back to normal,’ said Yeo Kee Yan, a research analyst at DBS Vickers.

The top five companies in the market capitalisation league retained their May rankings in June, with only SingTel seeing a dip in market capitalisation, month on month.

Despite growing another 13.6 per cent in market capitalisation during H1 2009, UOB slipped from second place at the end of last year to sixth place, as the other heavyweights bulked up more in comparison.

Of the top five stocks, Wilmar International recorded the largest year-to-date increase in market capitalisation, a 79.9 per cent increase to $32.1 billion. Analysts have been bullish on the agriculture products firm of late. Last week, OCBC Investment Research initiated coverage of the stock with a ‘buy’ recommendation, citing the upside of Wilmar’s China operations.

Of particular note for the first half of 2009 was Chartered Semiconductor Manufacturing, which vaulted from 96th place at the end of 2008 to 53rd place, more than quadrupling its market capitalisation to $1.93 billion. After Chartered’s lacklustre 2008, DBS Vickers’ Tan Ai Teng is upbeat about the firm’s prospects for Q3 this year, following the company’s ’sharp rebound’ in Q2.

While property counters such as CapitaLand, City Developments and Hongkong Land Holdings held fast to their rankings from a month ago, only Hongkong Land Holdings saw an increase in market capitalisation in June as investors dithered over analysts’ opposing outlooks for the sector.

In one camp, analysts believe that the property market is gaining ground, pointing to the recent increase in residential sales as reason for jubilation.

Credit Suisse analyst Tricia Song noted in a report last month that private home sales have been clearing at prices that were ‘20-80 per cent better than our assumptions’ and believes that such levels are sustainable on the back of lower-than-expected expatriate outflow and job losses.

A recent Merrill Lynch report also raised price objectives for CapitaLand, City Developments and Keppel Land but gave investors pause as it remained less confident about the sector’s sustainability post-2010.

UBS AG’s director of wealth management research Thomas Kaegi was not as buoyant about the property sector. Mr Kaegi told reporters yesterday that he expects a ‘modest recovery’ only in Q2 2010.

‘I am cautious about the renewed optimism. It looks like just a pickup in transactions, triggered by developers’ price cuts,’ he said.

Looking ahead, most analysts have placed their bets on bank stocks, believing that the contraction for the financial sector has come to a halt.

‘Bank earnings may increase as home loans go up,’ noted DBS Vickers’ Mr Yeo. UBS AG’s Mr Kaegi reckons that the manufacturing sector will be the next to recover, while the beleaguered retail sector will be the last.

The muted increase of market capitalisation in June also makes a larger statement about the business outlook for the country. Experts agree that the worst is over for Singapore, but it will be awhile before the go-go years return.

‘The rest of the year will remain challenging, but we have seen the trough of the business cycle,’ said Mr Kaegi.

While the market has pulled back from the brink, it is unlikely to soar to dizzying heights this year.

Source : Business Times - 01 July 2009

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Strong sales for new condo launches

Strong sales for new condo launches

Units in mass- and higher-market projects snapped up

By Jessica Cheam

Far East Organization sold 74 of its initial batch of 88 units at a preview of its Vista Residences over the weekend.

STRONG sales in the property market continued over the weekend as mass- and upper-mid- market launches drew crowds of buyers.

Within three days of its preview launch last Friday, the 68-unit Residences @ Killiney project sold 39 of 60 released units - with sales ongoing, a spokesman for developer Hoi Hup Realty said yesterday.

Preview prices at the Killiney Road condominium ranged from $1,700 per sq ft (psf) to $2,000 psf.

Opposite the condo at Devonshire Road, Allgreen Properties’ One Devonshire has sold more than 95 per cent of its 36-storey, 152-unit freehold condo since its launch about two weeks ago.

In the Thomson Road area, Far East Organization sold 84 per cent - or 74 homes - of an initial batch of 88 units at a private preview of its Vista Residences over the weekend.

The 280-unit freehold project offers a range of accommodation from one bedroom to penthouse units starting from $960 psf.

Far East will release another 45 units tomorrow - its official launch date - said Mr Chia Boon Kuah, chief operating officer of the firm’s property arm.

HSR Property Group executive director Eric Cheng noted that the buying activity - which started in mass-market new condo launches - seems to have moved into the higher market segments.

‘This is undoubtedly due to the stock market rally, more positive sentiment, and is enabled by the interest absorption scheme,’ he said.

The scheme allows buyers to pay a deposit and postpone monthly home loan payments until the project is completed.

‘This is attracting the investors to come out in droves,’ he added.

In the mass market, sales continued with Frasers Centrepoint announcing yesterday that its two projects, 8@Woodleigh and Woodsville 28, were sold out.

All 330 units at 8@Woodleigh in Potong Pasir were fully sold last Saturday at an average price of $790 psf. And all 110 units of Woodsville 28 were sold by last Tuesday at an average price of $775 psf.

At Pasir Ris, half of the 142 units at Chip Eng Seng group’s Oasis@Elias previewed over the weekend were sold, said its marketing agent CB Richard Ellis.

On the east coast, the 94-unit Parc Seabreeze in Marine Parade is selling well with the project close to 70 per cent sold, said HSR, which is marketing the project. Units are fetching from $1,050 psf to $1,550 psf.

Mr Colin Tan, Chesterton Suntec International’s head of research and consultancy, noted that there had been ‘pent-up demand’ resulting in strong sales activity, but added that this was ‘not sustainable’.

‘Unlike the boom years, where foreigners made up a huge number of buyers, it is mostly locals who are on this buying spree,’ he said.

Property expert Nicholas Mak expects a moderation of buying activity in the coming months, especially as developers continue to revise their prices upwards.

Source : Straits Times - 30 June 2009

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Latitude at Jalan Mutiara

Latitude at Jalan Mutiara

Types of unit Latitude:

2 rooms 1324 square feet from $1645psf

3 rooms 1615 square feet /1927 square feet from $1700psf

4 rooms 2659 square feet from $1823psf

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