Tuesday, July 31, 2007

CapitaLand's Q2 Net Profit Rises 480% to $912.6m

Source : The Business Times, July 31, 2007

SINGAPORE - CapitaLand, South-east Asia's biggest developer, on Tuesday posted a 480.6 per cent rise in second-quarter net profit due to higher luxury home sales and office rentals in its home base of Singapore.

The firm, partly owned by Singapore state investment firm Temasek Holdings, earned net profit of $912.6 million in the April-June quarter, up from a restated $157.2 million in the same period a year ago.

CapitaLand earns up to 80 per cent of its profits abroad, but like Singapore's other big property developers -- Keppel Land and City Developments -- it has benefitted from a surge in prices in Singapore's real estate market.

Office rents have risen 46 per cent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade. -- REUTERS

Boustead To Build High-Tech Devt In Ubi

Source : The Business Times, July 31, 2007

$74m design-and- build job due to be completed Dec 2008

ENGINEERING group Boustead Singapore, through its 91.7 per cent owned subsidiary, Boustead Projects Pte Ltd, has clinched a $74million contract to design and build a high-tech development in the Ubi district.

The 41,200 square metre floor area high-tech development, comprising two connecting glass buildings rising up to seven storeys, is due for completion by December 2008.

Strategically located next to the Pan-Island Expressway and near the future MacPherson MRT Station and Kallang-Paya Lebar Expressway, the project will boast state-of-the-art technology, including a fibre optic network, wireless connectivity, an integrated building management system and provisions for dual feed power supply and back-up power generators.

These features will cater to the back-office functions of transnational companies, as well as firms in the precision engineering and information technology sectors.

This is the fifth contract secured by Boustead Projects in the last few months. Since February, the Boustead unit has secured some $160 million worth of new projects, accounting for about half of the group's current order book of $320 million.

'This contract represents the largest contract secured by the group to date,' said Wong Fong Fui, chairman and group chief executive officer of Boustead.

'We hope to continue drawing on our vast expertise and established position for industrial real estate solutions to secure more design-and-build opportunities,' Mr Wong said.

The contract is expected to have a positive material impact on the profitability and earnings per share of the company in the current financial year ending March 31, 2008, and the next financial year ending March 31, 2009.

Boustead said that the contract is not expected to have a material impact on the net asset value per share of the company for the current and the next financial year.

Boustead Projects accounts for about 30 per cent of the group's revenue. The group's other key business units are energy, water & wastewater engineering, and geo-spatial technology.

The group's full-year earnings grew 42 per cent to $35.2 million for the year ended March 31, 2007, from $24.9 million previously.

This came on the back of a 19 per cent revenue rise to $343.86 million for the year ended March 2007.

The Boustead counter ended two cents lower at $2.18 yesterday, on volume of 94,000 shares.

No Property-Cooling Measures On The Horizon, Says Mah

Source : The Business Times, July 31, 2007

Government puts faith in market forces but will keep an eye on prices

The government does not seem inclined to roll out measures to cool the property market - at least in the near future.

'We prefer to let market forces work,' Minister of National Development (MND) Mah Bow Tan said yesterday.

It was the government's clearest response yet to recent market talk that cooling measures could be in the works.

On the sidelines of MND's inaugural Joint Scholarship Presentation Ceremony yesterday, Mr Mah was asked if the government was likely to announce measures to cool the property market. He said: 'We will try to avoid interfering in the market if we can.'

While the government is mindful of maintaining Singapore's price competitiveness, it prefers to do this by keeping supply ready and by keeping the market better informed.

To this end, the Urban Redevelopment Authority (URA) recently released median rentals for residential, office and retail sectors.

Along with the new monthly data on developers' sales numbers and prices, the median rental data is expected to alleviate fears that property prices are spiralling out of control. Mr Mah added: 'The data shows that property is still affordable and not as high as the headline numbers in media reports.'

In the data that was released by URA last week, sub-sale numbers had also increased considerably from 749 in Q1 to 1,254 in Q2. But this is still sustainable. 'If you look at the numbers, it's a long distance from (the previous peak of) 1996,' Mr Mah pointed out.

It will not, however, be entirely laissez-faire as far as prices go.

One of the government's chief concerns now is maintaining price competitiveness with other Asian capitals like Hong Kong and Tokyo. Mr Mah said that the government was confident of 'moderating prices'. He added: 'We will push out supply (of land) if there is a need.'

'The government will keep a close eye,' he stressed.

But again, Mr Mah tempered this comment by saying that the number of sites on the current Government Land Sales programme was adequate.

There will be a supply crunch in the residential sector in the short term, Mr Mah said, and reiterated that the government would look at interim measures to alleviate this.

The Housing and Development Board (HDB) already said last week that it would offer about 120 flats selected for Selective En-bloc Redevelopment Scheme (Sers), but not redeveloped yet, to the public in the short term. If these prove popular, Mr Mah said that, 'there are a few thousand units under the Sers programme that are not ready for redevelopment yet'.

DBS Vickers analyst Wallace Chu said he was 'comforted somewhat' by Mr Mah's comments. 'At least a direction is set,' he added

Ang Mo Kio Site May Fetch Over $500 PSF

Source : The Business Times, July 31, 2007

Bids for 99-year leasehold plot likely to be 65% higher than minimum offer

A PLUM 99-year leasehold condo site opposite Ang Mo Kio MRT Station could fetch bids of over $500 per square foot (psf) of potential gross floor area, say market watchers. This is at least 65 per cent higher than the minimum offer price of $302 psf of potential gross floor area received by Housing & Development Board for the reserve list site.

The plot, right next to the AMK Hub, can be developed into a new condo with 337,408 sq ft maximum gross floor area, enough for a condo with about 280 to 300 apartments averaging 1,200 sq ft, according to Knight Frank director Nicholas Mak.

He expects the site to fetch top bids of about $480 to $530 psf per plot ratio in the current bullish market, but given its prime suburban location, is not discounting bids of $550 psf ppr or even higher.

'This is one of the best residential sites in the second half 2007 Government Land Sales Programme. On a scale of 1 to 10, I would rate it 8 or 9,' Mr Mak says.

Assuming the site sells for $510 psf ppr, the breakeven cost for a new condo works out to around $800 to $820 psf. If the developer wants a minimum 10 per cent profit margin, he would be eyeing an average selling price of around $900 psf.

The developer can count on a huge pool of upgraders given that Ang Mo Kio is a mature HDB estate, Nicholas Mak reckons(Director of Knight Frank).

CB Richard Ellis executive director Li Hiaw Ho, who is predicting the winning bid to be above $400 psf ppr, and a selling price of around $800-900 psf for the new condo units that will be built on the site. 'This should be achievable if the residential market continues its current performance, by the time the project is ready for launch in mid-2008,' he added.

CBRE said that in the June/July period, units at Grandeur 8 condo a short distance away changed hands at $570 to $620 psf in the secondary market, while over at Bishan 8 condo, apartments have changed hands at around $800 psf.

Steady Rise In Property Loans

Source : TODAY, Tuesday, July 31, 2007

PROPERTY loans made up almost half of all loans in Singapore for the first half-year, a steady increase over the decade that reflected banks’ widened exposure to the real estate market amidst the ongoing property boom.

Outstanding property loans came to more than $94 billion, or 47 per cent of the total loan portfolio of commercial banks here, at the end of last month, the Business Times reported yesterday.

This contrasts with the 33 per cent from about a decade ago (end-1996) during the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

Housing and bridging loans made up some $64 billion as of June end, compared to about $63 billion six months ago, while building and construction loans were worth about $30 billion, up 21 per cent from a year earlier.

The increase in building and construction loans, which took a bigger share of the total loan pie, has also been much faster over the past few years. Loans to developers, under the building and construction category, are additionally risky due to the deferred payment scheme, which allows home buyers to pay only a fraction of the property price upfront.

The Monetary Authority of Singapore said its monthly statistical bulletin with banking data will come out today. — CHEOW XIN YI

Stocks Rise On Higher Home Rates

Source : TODAY, Tuesday, July 31, 2007

SINGAPORE’S stocks rose for the first time in four days, led by property stocks after second-quarter private-home prices climbed at the fastest pace in eight years.

A measure of property stocks had the biggest percentage decline last week among the nine industry groups on the Singapore. All Equities Index on concerns the Government will introduce measures to slow the rise in home prices and office rentals.

“The rising residential prices show that the property market is retaining its momentum,” said Mr Najeeb Jarhom, head of research at Fraser Securities in Singapore.

“Concerns over government measures to cool the market were overdone.”

The Straits Times Index rose 1 per cent to 3,526.29 at close, snapping three days of losses. About three stocks climbed for each that declined. August futures gained 1.1 per cent to 429.3.

CapitaLand, the nation’s largest developer, climbed 2.8 per cent to $7.25, its first advance in six days. The company said it was setting up two property funds to invest in retail developments in China and India. Luxury home developer Wing Tai Holdings gained 4 per cent to $3.66. Citigroup raised its price forecast to $4.62 from $4.31 and kept its “buy” rating, citing rising residential property prices.

Singapore’s private-home prices rose 8.3 per cent in the second quarter, the fastest pace in eight years, as the city’s economic expansion allowed developers to sell apartments at record prices. — BLOOMBERG

CapitaLand Earns Record Profits

Source : Channel NewsAsia, 31 July 2007




A man walks past a CapitaLand advert in Singapore






Singapore's biggest property company CapitaLand said Tuesday its second quarter net profit more than quadrupled to a record S$912.6 million (US$604.37 million) on the back of robust sales and valuation gains in its business portfolio.

The Singapore property developer, also ranked the largest in Southeast Asia, said for the six months to June it earned a record net profit of S$1.5 billion, up more than five times the year-earlier S$286.7 million.

"The exceptional performance was achieved on the back of fair value gains in respect of the investment properties portfolio, higher profits from development projects and higher portfolio gains," CapitaLand said in a statement.

Revenues were boosted by higher sales at its development projects in China and CapitaLand expects overseas markets to remain the drivers of future growth.

"Going forward, the group's prospects will be underpinned by our expanding overseas geographic footprint, even as we seek opportunities in Singapore's firm property market," said president and chief executive Liew Mun Leong.

"We will be focused as a major developer of residential, retail, commercial and integrated developments and rapidly extend our lead in the serviced residences business," he said.

CapitaLand said overseas revenues accounted for almost 70 percent of total sales in the first half of the year, compared with nearly 65 percent in the same period in 2006. - AFP

Three CBD Office Projects Given URA Approval In Q2

Source : The Business Times,Tue, Jul 31, 2007

Provisional permission also granted for several hotel projects

A SLEW of projects were granted provisional permission in Q2, according to latest Urban Redevelopment Authority statistics.

Afro-Asia Building: It will be torn down and the site redeveloped into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space

These include a business park development of 215,000 square foot gross floor area (GFA) for Eurochem Corporation at International Business Park (IBP) in Jurong East, and several new office projects in the CBD - including redevelopment of Afro-Asia Building on Robinson Road (which was once the headquarters of Nanyang Siang Pau), Asia Chambers at McCallum Street, and Marina House at Shenton Way.

Asia Chambers: Owner TM Asia Insurance Singapore Ltd will build a new 19-storey office project with about 161,000 sq ft GFA offices

Residential projects that received provisional permission in the April to June quarter of this year include a 316-unit condo by Tripartite Developers on Flora Road, off Old Tampines Road, and a 329-unit condo by Frasers Centrepoint unit FCL Land Pte Ltd on the freehold Far East Mansion site on Kim Yam Road. Another condo, with 300 units, on River Valley Road, by EC Investment Holding Pte Ltd, was also granted provisional permission in April.

And as reported in June, Hong Fok has obtained provisional permission to develop 369 apartments on Beach Road under a redevelopment of part of The Concourse.

Eurochem's business park project at IBP is expected to have about 180,000 sq ft net lettable area. Eurochem is expected to occupy part of the space, while the rest could be leased out. Allowed uses include data processing and backroom offices of banks.

The company will be developing this on a site that it bought from JTC Corp on an initial 30-year lease term with an option to renew for a further 22 years, BT understands.

The three CBD office projects granted provisional permission by URA in Q2 can generate about 480,000 sq ft GFA of offices. Hong Leong Group obtained provisional permission to redevelop Marina House at Shenton Way into a new office project with about 199,455 sq ft GFA of offices. Afro-Asia Shipping Co Pte Ltd received URA's nod to tear down its Afro-Asia Building on Robinson Road (with an MPH store at street level) and redevelop the site into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space.

Assuming redevelopment work begins early next year, the redeveloped building could be ready around early 2010. The current owner bought it in the late 1960s. The site has a land area of about 16,000 sq ft and has a remaining lease of about 45 to 46 years.

Work on redeveloping Asia Chambers at McCallum Street is expected to begin in August. Owner TM Asia Insurance Singapore Ltd - part of the Tokio Marine & Nichido Fire Insurance Co group - will build a new 19-storey office project with about 161,000 sq ft GFA offices. The net lettable office space could be about 110,000 sq ft, of which around half or so is expected to be occupied by the group, which currently operates out of leased premises at Fuji Xerox Towers on Anson Road. Tokio Marine's project, which is slated for completion in late 2009, will see a chunk of the building's street level space devoted to public spaces with trees, other greenery and sitting areas to serve as a meeting point in the location.

URA also granted provisional permission for several hotel projects in Q2, such as a 355-room hotel on Clemenceau Avenue/Unity Street to be developed by Hong Kong's Park Hotel Group); and a 90-room facility at Fullerton Square granted to Sino Land subsidiary Precious Quay Pte Ltd. The latter project also includes about 26,700 sq ft GFA of retail space.

In May this year, URA temporarily banned conversion of office use in the Central Area to other uses until December 2009 to curb further depletion of the existing office stock on the island. Even prior to that announcement, though, the trend had changed, with some owners of ageing CBD office blocks considering redeveloping their premises into office blocks, instead of the earlier trend of going for apartments, on the back of rising CBD office values.

Nonetheless, the redevelopment of these properties into bigger new office projects will worsen the office crunch in the short term while they are being redeveloped, say market watchers.

Two River Valley Condos Fail To Get Asking Prices

Source: The Straits Times, Tue, Jul 31, 2007























NO TAKERS FOR NOW: Owners of Pacific mansions are seeking $1.18 billion. Marketing consultants are said to be negotiating with ‘interested parties’, as developers are finding these prices too steep.

RECENT high-profile collective sales of Pacific Mansions and Rivershire have both failed to attract bids from developers willing to match the prices being sought by owners at the two River Valley condominiums.

Marketing consultants of both sites, however, are understood to be negotiating with 'interested parties' to see if they can at least achieve the reserve price - ranging from 10 per cent to 20 per cent below the asking price.

Asking prices at the two condominiums were optimistically priced at the very top end of market levels.

The current collective sale record stands at $2,338 per sq ft (psf) of potential gross floor area at The Ardmore in the prestigious Ardmore area.

Owners at the 45-year-old Pacific Mansions in River Valley Close, however, asked for even more - about $2,400 psf of potential gross floor area. This placed its total price at $1.18 billion.

Although the property market is booming, the perception is that the asking price for Pacific Mansions is high and unachievable for now, said a source.

Rivershire in the Leonie Hill area was put up for sale in late June at $348 million, or a hefty $2,200 psf of potential gross floor area.

The recent hike in development charge has no impact on the sites, as no such charge is payable for both sites.

There is talk that the Pacific Mansions' tender had attracted a few expressions of interest but no firm bids.

Mr Steven Ming, director of investment sales at Savills Singapore, which is marketing Pacific Mansions, only said: 'We have received interest, and we are in discussions with the interested parties.'

Knight Frank, which is marketing Rivershire, is also believed to be in talks with keen parties.

Nearby, owners of the 99-year leasehold Grangeford Apartments, who had asked for $2,016 psf of potential gross floor area, also failed to get what they had asked for.

The best they got was an offer from Overseas Union Enterprise - believed to be around $1,820 psf - subject to approval by owners controlling 80 per cent of the property's share values.

The deal is likely to be sealed soon. CB Richard Ellis, which is marketing the site, said it is waiting for lawyers to confirm the approval level.

The absence of finalised deals for these condos has not stopped others from hitting the market at relatively high prices.

These include Trendale Tower in the Cairnhill Road area, which was relaunched for sale in late July at $2,477 psf of potential gross area. Its earlier asking price in May, when it was put up for sale via an expression of interest exercise, was at $2,200 psf of gross floor area.

Recently, City Towers in Bukit Timah Road was also relaunched for sale at a revised asking price of $2,100 psf of potential gross floor area.

Property consultants say the residential market is still rosy, though some collective sales may stall as the owners' asking prices are far beyond what the market is currently willing to pay.

'It really depends on the site's potential,' said one.

CapitaLand Q2 Net Profit Up Near Six-Fold (AsiaOne News)

Source : AsisOne News, Tue, Jul 31, 2007

SINGAPORE, July 31 (Reuters) - CapitaLand , Southeast Asia's biggest developer, on Tuesday posted a nearly six-fold surge in second-quarter net profit on the back of strong home sales in Singapore and China.

Like Singapore's other big property developers -- Keppel Land and City Developments -- CapitaLand has benefitted from a surge in prices in the city-state's real estate market.

Office rents have risen 46 percent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade.

The firm, partly owned by Singapore state investment firm Temasek Holdings , saw its net profit rise to its highest ever of S$912.6 million ($603.2 million) in the April-June quarter, up from a restated S$157.2 million in the same period a year ago.

"The exceptional performance was achieved on the back of fair value gains in respect of the investment properties portfolio, higher profits from development projects and higher portfolio gains," it said in a statement.

Quarterly revenue rose 21 percent to S$935.6 million.

CapitaLand has in the past earned up to 80 percent of its profits abroad, but Singapore accounted for 69 percent of its pre-tax profit in the first half of 2007.

The developer said divestment gains as well as higher fee income from its real estate investment trust (REIT) subsidiaries -- CapitaMall Trust , CapitaCommercial Trust and CapitaRetail China -- also contributed to its highest ever quarterly net profit.

CapitaLand, which earned S$1.5 billion net profit in the first half, said its finance costs rose 32 percent in the second quarter mainly due to higher gross debt and rising interest rates.

CapitaLand shares, which closed Monday at S$7.25, have risen 17 percent this year to outperform rival City Developments' 15 percent gain. Singapore's property stock index has risen 27.6 percent this year.

Regulating Property Agents

Source : The Straits Times, July 31, 2007

Accreditation scheme enhances professionalism

The Housing & Development Board (HDB) and the Inland Revenue Authority of Singapore (Iras) have been working with the Singapore Institute of Surveyors and Valuers and the Institute of Estate Agents to provide property buyers/sellers with more effective consumer protection, as well as support the drive of the real-estate industry towards greater professionalism.

To this end, an accreditation scheme for real-estate agents, called the Singapore Accredited Estate Agencies (SAEA) Scheme, was set up in November 2005. The scheme sets minimum education and practice standards for estate agents, and conducts disciplinary hearings into complaints against member agents and their agencies. We will continue to work with the SAEA on the accreditation scheme to enhance and improve the standards of professionalism in the industry.

To prevent HDB flat buyers and sellers from being taken advantage of by unscrupulous estate agents, HDB conducts monthly resale seminars on the policies and procedures pertaining to transactions in resale HDB flats. A comprehensive guide on the resale process is also available on the HDB InfoWeb at www.hdb.gov.sg.

HDB has also set up the e-Resale System which allows resale flat buyers and sellers who transact without engaging housing agents to submit resale applications and valuation requests electronically.

Property buyers and sellers may check if a housing agent is licensed, or view the criteria for granting of a house agent's licence, on www.iras.gov.sg.

Those who need clarification on the policies and procedures involving transactions in resale HDB flats can call HDB's Sales/Resale Customer Service Line on 1800-8663066, or visit HDB Hub during office hours.

For enquiries on housing agents' licences, they can call the Iras enquiry line on 6351 2465.

Tan Heng Huay
Deputy Director (Public Affairs)
Housing & Development Board

Lee Leng Kiong (Mrs)
Director
(Corporate Communications)
Inland Revenue Authority of Singapore

CapitaLand Q2 Net Profit Up Near 6 Fold (The Straits Times)

Source : The Straits Times, July 31, 2007

SINGAPORE - CAPITALAND, Southeast Asia's biggest developer, on Tuesday posted a 480.6 per cent rise in second-quarter net profit due to higher luxury home sales and office rentals in its home base of Singapore.
The firm earned net profit of $912.6 million in the April-June quarter, up from a restated $157.2 million in the same period a year ago.

CapitaLand earns up to 80 per cent of its profits abroad, but like Singapore's other big property developers - Keppel Land and City Developments - it has benefitted from a surge in prices in the Republic's real estate market.

Office rents have risen 46 per cent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade. -- REUTERS

CAPITALLAND LIMITED 2007 SECOND QUARTER FINANCIAL STATEMENTS ANNOUNCEMENT

http://tinyurl.com/26u6z8

Govt To Take 'Light Touch' Approach To Property

Source : The Straits Times, July 31, 2007

It will give out more data on prices and ramp up supply of homes and offices By Jessica Cheam















THE Government is not hitting the brakes on the roaring property market, but it is keeping a sharp eye on soaring prices and the office squeeze.
This assurance came yesterday from National Deve- lopment Minister Mah Bow Tan, who said the Government was more inclined towards applying a light touch.

It will depend on 'non-interventionist' measures like providing more information to the public on prices and rents while ramping up the supply of homes and offices.

The Government sees this shortage of space - which has resulted in rising home and office rents - as a short-term problem that is best tackled with like-minded measures.

'We don't want to use long-term solutions to try to solve short-term problems. If you do that, you might create problems in the long run,' said Mr Mah.

He added that the Government will look into releasing temporary premises as a way of helping the supply side of the equation.














Video Link - http://tinyurl.com/3x8g47
Skyrocketing property prices? No need for alarm, says Mah (2:15)

The HDB is also rolling out a pilot project to lease 120 vacated flats under the Selective En-bloc Redeve- lopment Scheme for terms of one or two years, depending on public response.

A 'few thousand units' would be available to help tide the market over the interim period before long- term supply kicks in with the completion of new residential projects, said Mr Mah.

Another initiative announced recently involved the launch of 'transitional' office sites by the Urban Redevelopment Authority (URA), which can be built on quickly.

The other weapon in the Government's approach is to provide buyers and sellers with information - a lot more of it, and data that is more up to date.

Such data is seen as particularly important, given the headlines that rising prices have commanded of late.

Figures by the URA last week showed private home prices climbed 8.3 per cent in the April to June quarter, while the Housing Board revealed that resale prices for flats jumped 3 per cent in the same period.

Both increases are the highest in almost a decade.

Mr Mah maintains that in such an environment, providing useful data can clear the air for buyers and sellers.

He said he preferred to 'let the market forces work', but for them to work effectively, 'there must be sufficient information'.

A wealth of information on sale prices and rent levels for both residential and HDB homes, HDB resale prices and offices has already been released and made available online.

It allows buyers and sellers to get a better handle on how the market is moving in particular areas.

Mr Mah cautioned the public to 'make a distinction' between data analysis reports or projections by property analysts and the hard facts provided by the authorities.

'You can have many different reports, but you should take URA and HDB reports as a snapshot of what is really happening on the ground,' he said.

Mr Mah added that he was confident that with these measures - comprehensive data and temporary supply - 'we will be able to moderate the prices'.

Mr Mah was speaking on the sidelines of a Ministry of National Development joint scholarship presentation ceremony, where 36 awards were given out.

This is the first time the ministry's agencies - such as the National Parks Board, HDB and URA - have award their scholarships in a single ceremony.

New Rules For Lawyers To Curb Money Laundering

Source : The Straits Times, July 31, 2007

They will have to scrutinise potential clients' profiles, sources of funds By K.C. Vijayan, Law Correspondent

LAWYERS will soon be barred from holding funds from unnamed sources, and will have to check their clients' backgrounds before agreeing to represent them.
The rules, which were published under the Legal Profession Act recently, will kick in on Aug15 and are meant to prevent lawyers from being used by their clients to launder 'dirty money'.

These rules will apply to legal work done in areas such as real estate, securities accounts management or mergers and acquisitions.

They also apply to matters related to the amount of money to be held, the complexity of the case, and the business or risk profile of the client or parties with controlling interest over the client.

Lawyers will have to be satisfied that there is nothing untoward in the business relationship, or between the client and any other party to the case.

A lawyer who comes up against a cagey client is obliged to drop the case. If a lawyer suspects illicit activity linked to drug trafficking, corruption or serious crimes, he has to report this to the Commercial Affairs Department.

The Law Society's governing council, as enforcer of these rules, can ask a lawyer to produce documents or an explanation if a complaint is filed.

The society's spokesman said last Tuesday that the rules have been put in place to enable Singapore to play its part as a member of the Financial Action Task Force, an inter-governmental body set up to develop, promote and monitor policies that fight money laundering and the funding of terrorism.

No known cases have been reported so far of unsavoury characters who park gains from shady businesses with lawyers to give the funds an appearance of respectability.

The rules have been seen as a landmark move by lawyers here, who liken them to measures in place for banks.

Just as banks follow KYC or Know Your Customer checklists before accepting client transactions, these rules will forbid lawyers from accepting monies from clients with fictitious names.

Due-diligence checks may involve database searches and inquiries, which will require a prospective client to show he has a legitimate business and that his funds are coming from lawful sources.

Lawyer Amolat Singh said: 'In a way, lawyers are like part-time bankers in that they, too, hold deposits for clients. The new laws make explicit the need for checks to protect them from being a conduit for illicit funds.'

With the rules in place, an overseas client will no longer be able to deposit monies here with a lawyer for a specified purpose and then cancel the deal months down the road and move the funds to third country without a satisfactory reason, he added.

Drew & Napier LLC director Wendell Wong described the rules as a 'paradigm shift' that subjects professional and commercial interests to national interest and public-policy considerations.

He said: 'While for lawyers, it means more work has to be done, it is in the interests of good governance and it is a good start, bearing in mind we are up against organised syndicates involved in money laundering.'

Skyrocketing Property Prices? No Need For Alarm, Says Mah

Source : The Straits Times, July 30, 2007 Monday
















The Government will depend on 'non-interventionist measures' to cool the red-hot property market.

Video Link - http://tinyurl.com/3x8g47














National Development Minister Mah Bow Tan said his ministry's twin approach is to give out more information and push up supply.

Speaking to the media just three days after the release of Singapore's first comprehensive data on housing prices, Mr Mah also said 'there's no reason to be alarmed'.

Govt To Take A More 'Hands-Off' Approach To Property Market

Source: The Straits Times, July 30, 2007














'I think we try to avoid interfering in the market if we can and that's the reason why we continue to depend on broad dissemination of information even sometimes persuading various parties to come up with more accurate information and then collating them and getting URA and HDB to push out this info in a very timely and very comprehensive manner,' said Mr Mah. -- ST PHOTO: LIM SIN THAI

THE Government will depend on 'non-interventionist measures' to cool the red hot property market.
National Development Minister Mah Bow Tan said the Government's twin approach is to give out more information and push up supply.

Speaking to the media just three days after the release of Singapore's first comprehensive data on housing prices, Mr Mah also said 'there's no reason to be alarmed.'

Referring to sub-sale figures, he said: 'If you look at the numbers, it's quite a distance away from what we have in the mid 90s, particularly in 1996.'

The minister also declined to say if the government will introduce more measures to cool the property sector.

'I think we try to avoid interfering in the market if we can and that's the reason why we continue to depend on broad dissemination of information even sometimes persuading various parties to come up with more accurate information and then collating them and getting URA and HDB to push out this info in a very timely and very comprehensive manner,' he said.

Mr Mah added long term measures are already in place.

There will be sufficient supply to meet housing demands over the next three to five years.

In June, the Ministry of National Development (MND) announced the biggest Government Land Sales (GLS) Programme with enough land for about 8,000 private homes.

Another 56,182 housing units are in the pipeline. Of which 30,158 units have not been sold. These units are expected to be ready between the end of this year and 2010

'The long term measures are very well in hand and we know that there's going to be enough supply in the next 3 to 5 years. I think that's a fact and nobody disputes that. It's really what happens in the short term.

'I think there's a lot of excitement and maybe a little bit of panic in the short term - maybe next month, 6 months, one year', said Mr Mah.

This is where measures like releasing vacated flats under the Selective En Bloc Redevelopment Scheme or Sers will help.

120 such flats in Tiong Bahru will be released for short term rental.

The flats, which are built in the 50s, will be spruced up by the Managing Agents, tasked with renting out the flat.

'The Managing Agent will do some renovations, touch up, repairs and do some short term rental for one or two years. It's not going to make a big dent in the market but it will test the market,' Mr Mah explained.

If response to these flats is good, up to 5,000 more units can be added to the supply over the next there years.

Mr Mah said he's confident that by pushing out information and increasing housing supply, property prices will be moderated.

He said the latest data released last Friday showed that although prices have gone up across the board, rates remain 'affordable'.

'The government will keep an eye on the situation to make sure we remain competitive,' he said.

Property Loans Rising In Boom Market

Source : The Business Times July 30, 2007

They make up 47% of total loans by commercial banks at end-June

(SINGAPORE) As the property boom chugs full steam ahead, banks' exposure to the sector has been steadily widening and their risks may be deepening, especially as a result of the prevalence of deferred payment schemes.

Work in progress: Loans to the building and construction industry jumped 21 per cent to $30 billion from about a year ago

As at end-June, housing and bridging loans as well as loans to the building and construction sector made up nearly half - a high of 47 per cent - of the more than $200 billion loan portfolio of commercial banks here, according to preliminary figures obtained from the Monetary Authority of Singapore (MAS).

This has been a steady increase from the 33 per cent from about a decade ago (end-1996) around the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

In absolute terms, the housing and bridging loans were worth some $64 billion as at end-June, compared to about $63 billion six months ago.

Loans to the building and construction sector stood at about $30 billion as at end-June, an increase of 21 per cent from a year ago, said MAS.

Not surprisingly, the run-up in property prices has led to an increase in housing and bridging loans (the consumer loans), but this rise has slowed dramatically from the early years of the current boom.

Right after the current property boom started, housing and bridging loans surged 17 per cent between end-2002 and end-2003 to reach $52.2 billion. Since then, the increase has slowed to about 2 per cent for the first six months of the year and from end-2005 to the end of last year, the value of housing and bridging loans increased by only 2.2 per cent.

Housing and bridging loans' share of the total loans of commercial banks - while still the biggest - has also declined over the last couple of years. Their share of total loans, after building up over the years to a peak of 33.8 per cent at end-2005 has dipped over the last one-and-a-half years to about 32 per cent as at end-June this year.

What is perhaps more significant for the financial sector is that the loans to the building and construction sectors including loans made to developers have been expanding much faster over the past few years and have been taking up a bigger share of total loans extended by banks.

Loans to developers have an added element of risk because of the deferred payment scheme which allows home buyers to pay only a fraction of the property's price upfront.

Loans to the building and construction industry, after contracting between 2004 to end-2005 as the construction industry went through the doldrums, surged 14.4 per cent to $26.3 billion as at end-2006. The further growth to $30 billion as at end-June this year represents a growth of 21 per cent from end-June 2006.

'As MAS has previously said, the use of the deferred payment scheme by property developers introduces additional risks to the developers, and to the banks which finance these developers, because property purchasers under this scheme are not subject to credit checks by developers.

'This is unlike property purchasers who apply for housing loans and are subject to credit assessment by banks. MAS expects banks to exercise prudence in their financing to the property developers and be fully cognizant of the additional risks from the use of deferred payment schemes,' a spokesperson from MAS told BT.

Last week, during the release of MAS' annual report, Heng Swee Keat, the authority's managing director had said that MAS is keeping a close eye on developments in the property boom. As Singapore's central bank and the regulator of the financial industry, MAS's concerns with regard to the property boom are how rising prices impact inflation and the risks posed to the stability of the financial system.

Mr Heng had noted that the banking sector's exposure to the property and construction sectors is 'significant' and that housing and related loans have grown over the last few quarters. 'So for both of these reasons, we will be watching developments in the market very carefully.'

The Urban Redevelopment Authority (URA) price index for private homes, released on Friday, has risen 13.5 per cent for the first half of this year.

URA figures also revealed that developers sold 9,385 uncompleted private home in the first six months of this year, less than a thousand units shy of the record 10,363 units sold through all of last year.