HDB Launches 2 New BTO Projects In Punggol, Sengkang

Source : The Straits Times, June 30, 2008

THE Housing Board on Monday launched two new housing projects, Punggol Breeze in Punggol and Fernvale Residence in Sengkang, under the Build-To-Order (BTO) scheme.

They will comprise 1,587 premium flats - 55 three-room, 1,222 four-room and 310 five-room flats.

With these two new projects, HDB has launched a total of 4,524 units in 7 BTO projects in towns like Punggol, Sengkang, Yishun and Woodlands in the first half of 2008.

Punggol Breeze, bounded by Punggol Drive and Edgefield Plains, will have 778 units of four-room and 186 units of five-room flats.

Fernvale Residence, located at the junction of Sengkang West and Fernvale Road, offers 55 units of three-room, 444 units of four-room and 124 units of five- room premium flats.

Applications for the new flats can be submitted online from June 30 to July 14.

For enquiries, the public can e-mail hdbsales@hdb.gov.sg or call the Sales/Resale Customer Service Line at 1800-866 3066.

Buyers Snap Up 195 units In Bishan Condo

Source : The Straits Times, June 30, 2008

LEASEHOLD PROJECT

IN A welcome departure from the generally quiet market so far this year, the latest property launch - of the 616-unit Clover by the Park - has generated sales of 195 units so far.

Sim Lian Group, which is developing the condo, said that as at 8pm last night, it had sold 195 out of the 308 units that were released for sale since last Friday's official launch.

The 99-year leasehold condominium has large units, suites and penthouses.

The eight suites, of 3,057 sq ft each, were all snapped up, indicating that buyers were keen on larger units.

Buyers were mostly families upgrading from HDB flats. They picked up units priced between $907,000 and $2.68 million, or $599 per sq ft (psf) to $858 psf, said Sim Lian Land's executive director, Ms Diana Kuik.

The average price worked out to be about $750 psf.

Ms Kuik said potential buyers thronged the showflat and some stayed so late that the developer closed the showflat only at midnight on Saturday and around 10pm last night.

However, about 100 units had already been sold by Thursday, following the development's soft launch on Wednesday.

The property market has largely been quiet recently, as sentiment dipped drastically early in the year. Sales volume has plunged dramatically from the numbers registered during the boom times of last year. While the mood is still cautious, a few recent launches have registered encouraging sales.

Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said: 'Serious buyers were probably spoilt for choice this weekend, shopping among the few launches which are attractively priced.'

A week ago, the 99-year leasehold Dakota Residences in Dakota Crescent and the freehold The Amery in Telok Kurau were released for sale.

Construction Stocks: Keep The 3 S's In Mind

Source : The Business Times, June 30, 2008

Tiptoeing gingerly around the sector, think specialised, short and selective

THEY say there's no business like show business; right now, they are also saying there's no worse business than the construction business.

The construction industry is being battered from every angle: margins are being squeezed; sand, concrete and steel prices have been taking turns to take off; and residential property sales have turned anaemic.












Steel suppliers further tightened the screws by cutting the lock-in period for steel prices from six months to three months early this year, leaving contractors even more vulnerable to price fluctuations.

It isn't surprising then that some pundits are ironically predicting the destruction of the construction business.

'This is a very bad time to be looking for bargains in the construction industry. It's in bad shape and is the worst hit by inflation,' says an analyst who does not want to be identified.

Other analysts, however, are decidedly bullish on the industry and insist that all builders cannot be tarred with the same brush.

'Investors are not able to differentiate between specialised and integrated construction firms. The former have a lower risk profile,' explains CIMB analyst Lawrence Lye.

Investors should bear in mind the three S's when tiptoeing around the minefield of construction stocks: think specialised, short and selective.

Specialist companies involved in specific parts of a construction project may be better placed to stay out of the crossfire between suppliers and the main contractors that attempt to do everything.

'We would recommend investors reduce their exposure to integrated construction companies,' Mr Lye says. 'These companies have large order books and stand a higher risk of margin erosion.'

Instead, he suggests specialist firms with low exposure to construction material costs, like Tat Hong and Tiong Woon, both of which are crane-leasing companies.

With commodity prices being contractors' Achilles heel, firms with shorter- term contracts are better bets, like foundation engineering firm CSC Holdings, according to Mr Lye.

'CSC's average contracts are short at three to six months, which limits its exposure to fluctuating prices,' he says.

And while trite, it pays to remember the adage, 'location, location, location'. Selective locations, in particular.

'Wealthy buyers tend to be more discriminating, and they will be looking for property in areas like Districts 9, 10 and 11 which are not overbuilt,' says Mr Lye.

Contractors with projects in such areas will be safer bets, as prices are expected to remain relatively higher.

BBR, a contractor working on a development in Nassim Hill, would appear to fit the bill, especially since the estimated benchmark sale price of a similar unit was $2,200 per square foot in June, far exceeding BBR's breakeven price of $1,304 psf on the project.

One particular firm that has struck out on all three counts is Lian Beng Group, a main contractor saddled with a large order book of $800 million extending till 2010 and unsold residential properties.

Order books provide an indication of both future revenue and costs. The larger and longer a firm appears to be committed to an order, the larger and more risky its exposure to raw material price increases.

While Lian Beng's latest projects in Bukit Timah and Emerald Hill are estimated to have higher gross margins, its overall development portfolio remains a risky bet.

'We are cutting our FY08-10 forecasts for Lian Beng by 11-60 per cent to account for risks in its property development profits, which stem from projects such as Lincoln Lodge and Kovan Road, where benchmark transacted prices have fallen below breakeven costs,' Mr Lye said in a report this month that downgraded Lian Beng from 'outperform' to 'neutral'.

Kim Eng analyst Wilson Liew begs to differ on Lian Beng, citing the contractor's advantage in controlling raw material costs because it owns a batching plant for ready-mixed concrete, and maintaining a 'buy' recommendation.

Even so, the writing on the wall cannot be ignored. The valuation of the company has been lowered from $1.12 to $0.68 per share by Mr Liew, based on an expected shrinkage of all-important margins.

In addition to its three strikes, Lian Beng also falls into a category of firms that now fancy themselves as property developers as well.

This category also includes the likes of investment holding company Eastern Holdings and is dismissed by CIMB's Mr Lye as 'Johnny-come-lately firms that snapped up land in the middle of 2007 when property prices had peaked, right before the meltdown in July'.

'Reduce exposure to contractors that have turned opportunistic property developers late in the cycle,' he says. 'These are likely to be saddled with unsold inventory or expensive land.'

And if you must invest in a giant, go for one that has fluctuation clauses to manage raw material prices, like main contractor Chip Eng Seng.

'Gross margins for public projects are likely to remain stable at around 5 per cent, as increases in raw material prices will be protected by fluctuation clauses,' Westcomb analyst Wong Say Tian said in a report this month on Chip Eng Seng. 'We estimate that public projects account for about 60 per cent of the group's existing order book.'

While the bottom line may take a beating for some builders this year, it is still clear: investors should avoid construction companies built on sand if they want a solid portfolio.

Huh? What Are Plot Ratios?

Source : The Sunday Times, June 29, 2008

Where do you see this?

In articles about property. The term is often used by those engaged in collective sales.

What does it mean?

The plot ratio of a site is the gross floor area of the building divided by the site area.

The higher the plot ratio, the more gross floor area can be allocated to the site.

Why is it important?

It tells you the site's development intensity, or how much can be built on the site. This is of particular interest to those who are keen to sell their ageing homes en bloc.

If a site's allocated plot ratio is higher than that utilised by the existing building or if it is revised upwards, then more gross floor area can be allocated to the site.

This would raise the site's value because a developer could build and sell more homes on the site.

If the Government feels there is a need, it can revise plot ratios in its Master Plans - which are reviewed every five years - to cope with a growing population, for instance.

So you want to use the term. Just say ...

'Many developers were disappointed with the 2008 Master Plan as there were no major changes to the plot ratios.'

'Mickey Mouse Homes' Snapped Up Near Little India

Source : The Sunday Times, June 29, 2008

Buyers like these small apartments as they are close to the city and they seem more affordable

The area near Farrer Park MRT station in Little India - once largely shunned by developers - has become the playground of smaller property players.

These little-known companies have bought land there and launched projects that range in size from as few as 13 units to around 50.



























Recently, Suites 123 in Rangoon Road - which has 37 apartments - was largely sold out, despite weak market sentiment.

Before that, other small projects such as Citigate Residence, Suites@Owen and Soho@Farrer were also sold out. Some of these projects were sold at around $1,000 to $1,100 per sq ft (psf), which is not cheap, market watchers noted.

However, as the apartments are usually quite small, these 'Mickey Mouse units' appear to be priced at relatively low levels. Most of these projects have shop units as well.

Mr David Neubronner, the executive director of Savills Residential, noted that many of the one-bedroom units are just 400 sq ft and the two-bedroom units 700 sq ft.

He added: 'A two-roomer may cost $700,000.'

That, he said, is a 'very attractive entry point' for buyers looking to stay near the city.

At Suites@Owen, the 20 apartments range in size from just 366 sq ft for a one-bedroom unit to 1,044 sq ft for a two-bedroom penthouse.

The sizes shrink even further at the 13-unit Kent Residences on Kent Road. The smallest apartment is just 312 sq ft - roughly half the size of an average three-room HDB flat, or about the size of two Old Chang Kee kiosks.

The developer of Kent Residences, which is also behind Tyrwhitt 139 on Tyrwhitt Road, said the area is attractive because it is near an MRT station.

These projects target singles and small families. The buyers are mainly Singaporeans in their 30s but there are also some foreigners.

Mr Neubronner said the projects attract many end-users as the area is at the city fringe, which is getting more exciting.

Market watchers said Farrer Park's proximity to Little India might deter single females or families with kids, but not necessarily single men.

Still, there are many projects located north of Farrer Park MRT station, across the road from the buzz and chaos of Little India - and less savoury activities at Desker Road.

While many people also do not want to live near the Little India conservation area, some love living there, including artists and film-makers.

The area is full of history and character. Race Course Road, for instance, took its name from Singapore's first race course, built in Farrer Park in 1842. One of the country's oldest Buddhist temples, Leong San Buddhist Temple, is also in the vicinity.

And when some of the newer developments are completed, the residents might include a famous face or two. At least one local celebrity is believed to have bought a unit in a small development north of Farrer Park MRT station.

For buyers, the good thing about these small projects is that they are mostly either freehold or 999-year leasehold. With the MRT station only a short walk away, residents are basically two MRT stops away from town.

However, market watchers warn that buyers - those who bought off developer's plans - might not realise how small the units are until they see the completed apartments.

Nowadays, the space allocated for bay windows, planter boxes, air-con ledges and balconies can eat significantly into your living area.

'In some instances, they can make up as much as 20 per cent or more of the total. If you want more 'liveable' space, you should do a like-for-like comparision before you make your decision,' said Chesterton International's head of research and consultancy, Mr Colin Tan.

For instance, at the 56-unit Citigate Residence on Rangoon Road, the 441 sq ft and 517 sq ft advertised for its smaller units include the bay window, air-con ledge, planter and balcony.

Nevertheless, many buyers could still bite simply because of the seemingly low absolute prices and projected high rental yields, market watchers say.

'Consumers must be more prudent. The absolute value of such developments might be low, but investors have to consider whether they can find a buyer or tenant later,' said HSR Property Group's executive director, Mr Eric Cheng. 'They are suitable only for those who are comfortable with small units.'

He said that many buyers might not realise the units are too small to live in until the projects are completed.

'One of my friends who bought a 580 sq ft unit on Mackenzie Road told me it's like a bird's nest,' he added.


Hidden risks

Many are drawn in by the seemingly low absolute prices and projected high rental yields. However, the units aren't that cheap on a per sq ft basis. Also, some buyers might find the units too small to live in comfortably when they see the completed apartments. It might not be easy to find a buyer or tenant later.

Is This S'pore's Most Expensive House?

Source : The Sunday Times, June 29, 2008

# Worth at least $120 million
# The size of 92 five-room HDB flats
# Owned by a prince

The mansion mired in a legal battle between the Brunei Sultan's brother and
the country's national investment agency could well be Singapore's most expensive residence.


The palatial residence of Arwaa Mansion is certainly fit for a prince and comes with a suitably intimidating value. It was built by merging two pieces of property with different addresses. This photo shows the part of the mansion at 46B Nassim Road. -- ST PHOTO: LIM WUI LIANG

Owned by Prince Jefri Bolkiah, the younger brother of Sultan Hassanal Bolkiah, Arwaa Mansion at 46B and 48 Nassim Road is said to be worth at least a jaw-dropping $120 million.

That figure for a home, even in land-scarce Singapore, is not something you hear about every day. Even property pundits that The Sunday Times spoke to were hard-pressed to think of a residential address that could fetch that kind of value.

There are only between 2,500 and 3,000 good-class bungalows with at least 15,070 sq ft of land area here.

Based on the Urban Redevelopment Authority's numbers, the average cost of a good-class bungalow was $13.8 million last year.

What could possibly make the Brunei royal's Nassim address worth that princely sum? Size, location, possibly even its pedigree ownership.

Industry observers believe that the palatial property, which stands on top of a hill, has such a staggering value because of its sheer size.

The mansion sits on a land area of about 110,000 sq ft. The area was the result of merging two pieces of property with different addresses. Imagine 92 five-room HDB flats combined.

'It is part of Singapore's most desirable and prestigious residential area,' said Savills Singapore's director of prestige homes Steven Ming.

'But each property value is unique,' he said.

And this none-too-humble villa is special because, well, it belongs to a prince.

'You would assume that only good-quality stuff went in there, so there is a premium attached to it,' said one industry pundit.

The mansion made news last Friday after it was reported that the Brunei Investment Agency, which manages the Brunei government's General Reserve Fund and external assets, wants Singapore's courts to get the 53-year-old prince to hand over the property.

Homes in the $100 million club are few and far between.

Said Credo Real Estate managing director Karamjit Singh: 'Over the years, governments and corporations that have owned large properties have been selling them and they get re-developed and sub-divided. So such big properties are very rare.'

Property pundits say that large parcels still exist, owned mostly by the old rich or foreign governments to house their embassies.

'Some are sitting on land that has been passed down for generations and it goes into the $100 million category because you can build 20 storeys on it,' said Mr Ku Swee Yong, the director of business development and marketing for Savills.

He singled one out: Mitre Hotel in Killiney Road, which some have estimated could fetch $200 million for its nearly 40,000 sq ft of land. Its prime location and plot ratio mean it has good redevelopment potential.

Size isn't the only thing that matters when it comes to how many zeroes go into a property's value. In areas like Katong, property can fetch a premium since plot ratios there are higher than those in town, like in Nassim. That means more units can be built.

Dr Della Suantio Lee, the wife of Mr Lee Seng Gee, the eldest son of late philanthropist Lee Kong Chian, was said to have sold a 115,300 sq ft piece of property in Meyer Road to the Hong Leong Group for about $200 million last year.

Even fengshui plays a part, albeit a much smaller one.

'Some wealthy Chinese businessmen will consider how wide the gate at a bungalow is, whether it's sloping up or down or whether it faces a good house,' said Mr Ku.

CCT Expects Financing To Get More Expensive

Source : The Business Times, June 28, 2008

CAPITACOMMERCIAL Trust (CCT) expects financing to become more expensive after it raised US$1.2 billion to fund an acquisition of an office tower this year.

The manager of about three million square feet of commercial space in Singapore agreed in March to buy a 23-storey office block known as 1 George Street in Singapore's business district for $1.17 billion. The trust said it will fund the acquisition with debt such as convertible bonds and medium-term notes.

'We raised the debt at the right time before the increase in rates, but going forward, we see that as a greater challenge,' chief executive officer Lynette Leong said at a real estate conference in Singapore this week.

CapitaCommercial Trust's shares have fallen 21 per cent this year on concern that borrowing costs for the trust may rise, prompting Citigroup to downgrade the stock earlier this month.

Asia's real estate funding costs are likely to remain high over the next 12 months after rising as much as 700 basis points in the past year, Sameer Nayar, head of real estate finance at Credit Suisse Group, said this week.

CapitaCommercial said in April it plans to sell $280 million of bonds, with an option to raise another $90 million. It also issued $150 million of medium term notes and took on loans for the acquisition. -- Bloomberg

Thakral Seeks Up To $99m For Rest Of Sovereign Units

Source : The Business Times, June 28, 2008

THAKRAL Land is selling the remaining 17 apartments it owns at The Sovereign, a freehold condo in Meyer Road that it developed more than a decade ago.

En bloc potential: The 15-year-old property is built up to 1.8 plot ratio, lower than the maximum 2.8 allowed currently

Based on asking prices of $1,300-1,500 psf for lower-floor units and $1,800-2,500 psf for upper floor units, the total price works out to between $75 million and $99 million

Thakral is open to selling the units individually or to a single party. Market watchers reckon a bulk buyer who takes the whole 17 apartments would get some discount.

All the units are leased or about to be leased. Based on current monthly rents of $3.20 to $4.50 psf, the net yield works out to around 2.5 per cent, says Jones Lang LaSalle's Singapore and South-east Asia managing director Chris Fossick, whose firm is sole marketing agent for the 17 apartments, each of which has four bedrooms.

A party that buys all 17 units may also hold the key to a potential collective sale of the condo, which has a total of 87 units. The 17 units that Thakral is offering represent 19 per cent of share value and about 26 per cent of the total sq ft area.

There is redevelopment potential as the site's current Masterplan plot ratio - ratio of maximum potential gross floor area to land area - is 2.8, which is higher than the 1.8 plot ratio tapped by the existing property.

The unutilised plot ratio may be tapped by building an additional block or tearing down the existing project and redeveloping the 143,918 sq ft site into a brand new condo.

The 30-storey Sovereign, at 99 Meyer Road, received its Temporary Occupation Permit in 1993.

It is next to a 115,300 sq ft plot of land at 97 Meyer Road sold by Della Suantio Lee last year to Hong Leong Group for around $200 million. The price worked out to around $760 psf of potential gross floor area, including development charges (DC), according to an earlier report.

Dr Lee is the wife of Lee Foundation chairman Lee Seng Gee.

SPH's Paragon Valued At $2b

Source : The Business Times, June 28, 2008

SINGAPORE Press Holdings' Paragon shopping centre in Orchard Road is now worth $2 billion, about 10 per cent up from its valuation of $1.82 billion a year ago.

The higher valuation came amid higher rents and continued strong demand.

'Rents are firm, increasing as of last June. Occupancy is at 100 per cent,' said Lydia Sng, executive director of valuations for property consultancy Knight Frank, which carried out the latest valuation yesterday. The earlier valuation of $1.82 billion on June 28, 2007, was also done by Knight Frank.

The Paragon: Undergoing a makeover as part of a continuous effort to enhance the retail environment and shopping experience for customers

The Paragon is undergoing a $45 million makeover to update its facade and increase retail space. The renovation is slated for completion in October.

SPH said earlier that the makeover was part of a continuous effort to enhance the retail environment and shopping experience for Paragon customers.

In addition, the commercial space above its retail podium will be expanded - at a cost of $37 million, including the payment of land premium. This is scheduled to be completed by end-2008.

The total cost of the facade makeover and the addition of commercial space is $82 million.

Paragon remains open and operates as it normally does during the renovation period.

SPH will be releasing its financial results for the third quarter ended May 31, 2008, on July 11.

大巴窑1A巷地段 供私人发展商建组屋

Source : 《联合早报》June 27, 2008

建屋发展局推出位于大巴窑1A巷的地段供私人发展商竞标设计、兴建和销售组屋（DBSS）。

建屋局文告说，这是第六块供发展私人组屋的地段。地段位于大巴窑地铁站和布莱德地铁站之间，夹在大巴窑1巷和2巷之间。

地段距离两个地铁站大约10分钟步行距离，附近有巴刹、邻里中心、学校等，大巴窑镇中心则有超级市场、体育场、体育馆、游泳池、公园等。

这个地段占地2万7500平方尺，总建筑面积达11万5400平方公尺，建筑高度限制是153公尺，也就是不能建超过50层楼。投标截止日期是8月19日中午12时。

莱坊（Knight Frank）研究部主管麦俊荣受访时估计，投标价会介于容积率每平方英尺150元至200元。这应该是发展商能够负担的成本。

博纳集团总裁伊斯迈受访时说，由于大巴窑位置居中，转售市场需求比其他地区强劲，所以他估计投标价会接近容积率每平方英尺200元，可是应该不会超过200元。

他说：“我看，现在这种市场情况，建筑成本高，市场情绪不稳定，发展商应该不会那么大手笔。”

伊斯迈估计，大巴窑地点优越，应该可以吸引到比较多发展商竞标，而不会像过去的投标，每个地段只吸引到两个发展商竞标。

位于淡滨尼的第一块私人组屋地段两年前以8222万元售出，容积率每平方英尺114元。位于文庆路的第二个地段以1亿7020万元售出，容积率每平方英尺234元。第三块地段位于宏茂桥52街，成功标价是1亿3418万元，容积率每平方英尺212元。第四块位于碧山，成功标价是1亿3589万元，容积率每平方英尺237元。本月初开标的第五块地段位于四美，成功标价是5200万元，容积率每平方英尺137元。

麦俊荣估计，五房式组屋的售价可能会介于40多万至50万元，如果售价定得更高，可能就无法在预定时间内卖出这些组屋。发展商可能得更谨慎。

“现在买房子的主要考量是组屋与地铁站和设施的距离。虽然这块地在大巴窑，但如果不是很靠近主要的设施，人们可能会喜欢北部较远、但靠近地铁站的组屋，毕竟在地铁上多坐6分钟，总比多走6分钟路好。”

伊斯迈也说，新组屋售价应该定在每平方英尺500元左右，如果超过600元，有能力的买家会少了很多。

文庆路私人组屋City View@Boon Keng的平均售价定在每平方英尺520元，销售速度不尽如意。

Tender For Phase 3 Of Fusionopolis Will Open By H2

Source : Channel NewsAsia, 28 June 2008

Singapore is seeing an overwhelming demand for research and development space, particularly from the info-communication, media and science sectors.

So to meet the growing need, the government said it will expand the Fusionopolis cluster at one-north.

This was revealed at the ground-breaking ceremony of Phase 2B of the development on Friday.

The ground-breaking marks the start of Phase 2B of Fusionopolis. However, further development of the cluster is now projected to grow at a much faster pace.

Philip Su, Assistant CEO, JTC Corporation, said: "In terms of demand from the private sector for space in business park, you'll find that we are presently quite short.

"Even with the ground-breaking of Phase 2B, there is an unfulfilled demand for such space. So, that's the reason why we may have to push forward some of our plans to bring in Phase 3."

An additional 50,000 square metres of Gross Floor Area will be added under Phase 3 and Phase 4. And to meet demand for more business park space, JTC is bringing forward the development of the third phase.

It will open Phase 3 for tender by the private sector by the second half of this year.

Speaking at the ground-breaking, Trade and Industry Minister Lim Hng Kiang noted that Fusionopolis plays a key role in building up a knowledge-based economy in Singapore.

Mr Lim said: "The Fusionopolis cluster, together with the other developments in one-north, will help to anchor high-value economic activities and contribute to the development of Singapore as a knowledge-intensive economy."

When ready, the 15-storey building will house R&D labs for the infocomm, media, science and engineering industries. As part of the Fusionopolis cluster, it is expected to set the stage for more public-private partnerships.

With Fusionopolis Phases 1 and 2A previously attaining full occupancy even before completion, Phase 2B is expected to receive similar responses.

Low Soon Sim, Executive Director, Soilbuild, said: "There has been quite a bit of interest, and at this point in time, we are focusing on their design requirements."

Mainboard-listed Soilbuild is the developer for Phase 2B - the first private developer in the Fusionopolis cluster. Construction for Phase 2B is expected to be completed by 2010. - CNA/ms

SLA To Auction Off Eight Vacant Plots For Homes

Source : The Straits Times, June 27, 2008

THE Government has put a further eight small plots of vacant land on sale, some in prime districts like Ridout Road, near Peirce Road.

These infill sites have been popular with buyers who want to build their homes from scratch - but the catch is that the sites are on 99-year leases, and some of them are oddly shaped.

They are either in landed estates that have been left untouched by nearby developments, or are plots once used for public purposes, housing possibly parks, sub-stations or even septic tanks.

The plot in Ridout Road would be ideal for a good-class bungalow. These large bungalows have a minimum land area of 15,070 sq ft.

Another site is in Upper East Coast Road, near Woo Mon Chew Road in the Siglap area.

The Singapore Land Authority (SLA) will auction the eight sites at M Hotel on Aug 21.

Mr Simon Ong, the SLA's assistant chief executive of the land operations group, said: 'The appeal of such sites is that they can be customised to suit the buyers' needs.'

Mr Teo Jing Kok, the SLA's deputy director of land sales, said that normally, a family that wants to design and build a home would have to buy a piece of land along with the existing building, which they have to demolish before they can redevelop the site.

'Often, after paying so much for the building, most landowners are tempted to keep the existing building or parts of it and retrofit their dream design into the existing form.'

But with a vacant infill site, they would be able to freely customise the design of the entire home, said Mr Teo.

He added that some bidders of previous infill sites were experienced investors who said the sites made good investment properties as the land cost was lower.

'Since the upfront investment is lower, the yield of the investment is higher for such 99-year properties,' said Mr Teo.

An auction for six infill sites late last year attracted fairly brisk bidding and ended with sale prices ranging from $1.3 million to $12.1 million.

Brunei Prince Fights To Keep Nassim Mansion

Source : The Straits Times, June 27, 2008

Worth at least $120m, it was used by the prince up to year 2000

THE fight between Brunei's national investment firm and the sultan's brother, Prince Jefri Bolkiah, has reached Singapore's courts.

The prize in this legal battle: the prince's now-unoccupied Nassim Road mansion, worth at least $120 million and believed to have housed valuable artworks and other assets.

HOUSE OF CONTENTION: The Brunei Investment Agency (BIA) is seeking court order here to compel the prince (2nd image) to hand over the title to this Nassim Road mansion. The Registrar of Titles here requires a Singapore court order for the BIA to be registered as the legal owner of the mansion. -- ST PHOTO: LIM WUI LIANG

The prince, the younger brother of Sultan Hassanal Bolkiah, is already mired in tussles with the Brunei Investment Agency (BIA) over his assets elsewhere, including those in London and New York.

The BIA, which the sultan oversees, is the main agency holding and managing the Brunei government's General Reserve Fund and its external assets.

In the fight for the Nassim Road property, the BIA is represented here by Senior Counsel Vinodh Coomaraswamy.

According to court documents filed in the Supreme Court, the BIA is seeking a court order to compel the 53-year-old prince to hand over the title to the premises.

The Registrar of Titles here requires a Singapore court order for the BIA to be registered as the legal owner of the mansion.

Prince Jefri, defended here by lawyer George Pereira, is contesting the application.

A hearing has been fixed for October.

The plush Nassim Road premises, named Arwaa mansion, were understood to have been used by Prince Jefri up to the year 2000.

The house, having been developed as a single structure from two back-to-back properties with different addresses, has entrances on two roads.

Although unoccupied, it is guarded round the clock by private security staff; cleaners are also there regularly.

In a bid to keep it in his possession, Prince Jefri is expected to argue, among other things, that Arwaa mansion was excluded, and therefore separate, from matters heard before the Brunei courts as part of the enforcement proceedings started there against him in 2004.

The prince, who left Brunei that year and now lives in France, is expected to ask the courts here to return Arwaa mansion to him.

His assets in London are still the subject of court enforcement.

Over in New York, a court ordered in March that he hand over ownership of the plush New York Palace hotel in Manhattan to the Brunei government.

It has been reported, however, that the court has barred its sale because the prince is disputing the order for a chance at ownership.


The legal battle

BILLIONS of dollars are alleged to have gone missing while Prince Jefri Bolkiah was Brunei's finance minister.

He signed an agreement out-of-court with Brunei's government in May 2000 to hand over several of his properties and valuables from around the world, but apparently failed to comply fully with the terms.

Legal action began against him in Brunei in 2004, and ended last year at London's Privy Council, the oil-rich kingdom's highest court of appeal, which ruled that he had to comply with the deal.

Earlier this month, the London court issued an arrest warrant against him for not showing up to answer charges that he had violated a court order to hand over £3 billion (S$8 billion) to the Brunei government.

Office Rents Nearing Peak As Supply Increases: Report

Source : The Straits Times, June 27, 2008

Impact of US sub-prime crisis, Singapore's rising inflation and weaker growth curbing rentals

AFTER more than two years of relentless rises, Singapore's office rents look to be finally peaking as more supply comes on stream.

A CB Richard Ellis (CBRE) report said the impact of the United States sub-prime crisis, rising inflation in Singapore and more modest economic growth have dampened the office sector and slowed rent rises.

Prime office rents edged up 10 cents - just 0.6 per cent - in the second quarter to $16.10 per sq ft (psf) a month on average. The rise over the first half has been 7.3 per cent, way below the 'astounding 92.3 per cent' for the whole of last year, said CBRE.

CBRE executive director office services Moray Armstrong said: 'Our sense is that the natural ceiling is close at hand.'

While there is resistance over rents from a number of occupiers, an encouraging sign is that there are still many ongoing negotiations, he said.

'Selected buildings may achieve higher rents but across the board, rentals are as high as they can go.' These are top-grade properties with rents of over $20 psf - though it is believed they are mostly for small offices.

Rents of top office buildings rose 9.6 per cent in the first half compared with 96.5 per cent in the whole of last year. Such Grade A rents averaged $18.80 psf a month in the second quarter, up from $18.65 in the first period.

Cushman & Wakefield managing director Donald Han said it was only a matter of time before rents peaked as they rose too fast and too soon last year.

'However, while office rents may have peaked, they will probably stay at the current levels for the next 12 months given tight supply,' he said.

A supply shortage over the past two years has prompted firms to try various means to save space or costs.

Some companies, facing a doubling or tripling of rent when leases were due for renewal, moved out to more affordable spaces in suburban areas or industrial locations.

And the search for lower-cost space continues. There is, for example, said Mr Armstrong, heightened interest for upcoming space in the Alexandra and Harbourfront areas.

Mr Han added that rents are also facing limited upside as many companies already made expansion plans and arranged for extra space last year.

Citigroup agreed in a recent report, saying that slowing demand and decentralisation are likely to start putting downward pressure on both rental and capital values. It tipped office rents to fall 30 to 35 per cent.

According to CBRE, the vacancy of Grade A space - now 0.6 per cent - will remain tight as no new top-grade office developments will be completed before the second half of next year.

But there is some relief in sight.

The vacancy rate for fringe areas rose from 4.6 per cent to 7 per cent in the April to June quarter because of new completions such as VisionCrest and the refurbished 111 Somerset in the Orchard Road area.

The Government has also introduced transitional office sites to help ease the shortage.

There will be about 10.2 million sq ft of new space coming on stream between now and 2012, with the bulk likely to be ready in 2010 to 2011, said CBRE. About 63 per cent of this will be in Grade A properties in the core downtown area.

Still, the supply should be viewed in context with the strong take-up rate, said CBRE. About 22 per cent of known supply from now to 2012 has already been pre-committed.

55-Year-Old Hotel To Make Way For MRT

Source : The Straits Times, June 27, 2008

Backpacker haven New 7th Storey Hotel site acquired for Downtown Line station

THE New 7th Storey Hotel, a 55-year-old landmark in Rochor Road, will check out its last guest by the end of the year.

It will then have to make way for the construction of the new Bugis MRT station for the upcoming Downtown Line.

Government agencies said yesterday that the plot of land housing the hotel will be needed to build parts of the new station, such as the entrance and lifts.

OLD-TIMER: The hotel's chief concierge Lee Chong Hock, 75. -- ST PHOTO: LIM SIN THAI

The new Bugis station is one of six that will form Downtown Line Stage 1, to open in 2013.

Constraints in the area have left the authorities no choice but to build the new station under the hotel popular with budget travellers and backpackers.

The hotel's operations manager Shirley Fong, 32, said that the management heard the news only yesterday afternoon.

Government officers had showed up with notices of the land acquisition.

'We had no advance notice at all. All our staff were taken aback,' said Ms Fong.

Explaining this, a Singapore Land Authority (SLA) spokesman said that registered land owners were notified immediately only after the land acquisition was announced on the same day in the Government Gazette.

This is because information on land acquisition is kept confidential, to ensure that no one has an advantage over others.

Ms Fong said that the hotel management will have a meeting soon to decide on its plans. It will also have to deal with about 30 guests who have made advance reservations for early next year.

The hotel, which actually has nine storeys despite its name, was opened in 1953 by the late property magnate Wee Thiam Siew. It has largely remained in the Wee family since then.

In its early days, the then-five-star hotel was popular with politicians and businessmen visiting Singapore.

It now caters more to backpackers but retains an air of old-world charm. It still uses a manually operated 'cage' lift, reportedly the last of its kind here.

Although neighbouring shophouses have been torn down over the years, the hotel has stayed intact. It stands out now as the lone building on a plot of land close to Bugis Junction.

'We sort of knew that the land might be acquired some day for development, but we did not see this coming at all,' said Ms Fong, who added that the hotel had recently spent $100,000 on new furniture and carpeting.

The SLA said that the compensation awarded to the hotel owners will be pegged at market value and take into account renovations, among other factors.

Ms Fong's top concern now is her 20 staff members, whose morale has been hit by the news.

One of them, lift operator Francis Poh, 66, said: 'We are very close here, like a family. It would be a pity to leave.'

Next to the hotel lobby in the same building is a Hainanese steamboat restaurant, which will also have to pack its bags by the end of the year.

Staff there told reporters that they had not heard of the news and declined to comment further. Their boss, who is renting the restaurant space from the hotel, was overseas.

Doctor Chan Shijie, 26, who dines at the restaurant twice a month, was sad to hear that it would have to go.

'The food here is really good and it's affordable. I hope they move somewhere else,' he said.


Balloon to go too

THE DHL balloon, operating on a plot of state land next to the hotel, will also have to find a new home.

Its lease expires at the end of August, but the Singapore Land Authority has offered it a two-month extension.

Singapore Ducktours, which runs the balloon, said it is considering the offer. In the meantime, it has identified two sites to relocate the balloon: Merchant Loop opposite Clarke Quay or the upcoming Gardens by the Bay in Marina Bay.

Hotel At Bugis To Make Way For New Downtown Line MRT Station

Source : The Straits Times, June 26, 2008

THE Government will acquire the New Seventh Storey Hotel at Bugis to make way for a Downtown Line (DTL) MRT station.

The Land Transport Authority said on Thursday that the hotel will have to be vacated by year end to enable comprehensive redevelopment of the area.

(Artist's impression) The new Bugis station will be sited under Rochor Road and partly within the adjacent land to the west. -- PHOTO: LTA














The new Bugis station is one of six that make up the 4.3 km DTL Stage 1 (DTL1) that will run from Bugis Station on the East-West Line (EWL) to Chinatown Station on the North East Line (NEL).

The other five stations are Promenade, Bayfront, Landmark, Cross Street and Chinatown. The new line is scheduled to open in 2013.

The new Bugis station will be sited under Rochor Road and partly within the adjacent land to the west.

LTA said due to engineering constraints which cannot be avoided, the land currently occupied by the New Seventh Storey Hotel and part of the adjacent state land fronting Rochor Road, is needed for the construction of the station box and station structures, such as the station's entrance and lift facility.

'The hotel will have to be demolished to allow for the construction of the station,' said LTA. The hotel site will be amalgamated with the adjacent state land parcel at North Bridge Road, Tan Quee Lan Street, Beach Road and Rochor Road for future comprehensive redevelopment.

LTA said the amalgamation of the hotel site with the adjacent land parcel will allow for better integration of the station with future development in the area, and allow the planned pedestrian network and urban design plans for the area to be carried out.

The owner and occupants of the New Seven Storey Hotel, who will have to move out of the building by end December, will receive compensation pegged at market value.

LTA said commuters will have more transport choices in the city as the DTL 1 will serve existing and upcoming developments in the Marina Bay area, including One Raffles Quay, The Sail @ Marina Bay, Marina Bay Sands Integrated Resorts and the Marina Bay Financial Centre.

The contract for the construction of the new DTL Bugis station and tunnels from Beach Road to Queen Street will be up for tender in early July and awarded in November.

UOB Buys 15.4% Stake In China's Evergrowing Bank For US$114m

Source : Channel NewsAsia, 26 June 2008

Singapore's second largest lender, United Overseas Bank (UOB), said it will buy a 15.4 per cent stake in China's Evergrowing Bank for about US$114 million.

This follows a letter of intent that UOB signed in April 2007 to make a strategic investment in the Chinese lender. The acquisition will still need the approval of authorities in China.

UOB said it will fund the purchase in cash using internal resources. After the deal is completed, UOB will become Evergrowing Bank's second largest shareholder.

Evergrowing Bank is a regional lender, but analysts said the move will help UOB familiarise itself with the Chinese banking market.

The investment is not expected to have a material impact on earnings or the net tangible assets of UOB for the current financial year.

"No global bank can afford to ignore China or India, so this could be sort of testing the waters. With Evergrowing, UOB can test how the Chinese market would react to the offerings it could potentially provide at a later point," said J Ananda Kumar, Associate Director at Fitch Ratings.

Evergrowing Bank, which is not listed, is a small regional lender in China, based in Yantai, Shandong. It has branches in major cities in the country, including Beijing, Shanghai and Shenzhen.

Late last year, UOB received the green light from Chinese authorities to operate a locally-incorporated bank in the country. This will allow it to tap into trillions of dollars of household savings in China.

UOB has also been seeking opportunities in the region. Just last week, UOB said it was planning to buy over the 38.9 per cent stake in Indonesia's PT UOB Buana that it did not already own. The additional stake is estimated to cost some US$330 million.

In January last year, UOB also agreed to buy a 10 per cent stake in Vietnam's Southern Commercial Joint Stock Bank for about US$33.7 million. - CNA /ls

HDB To Launch New Site At Toa Payoh For Tender Under DBSS

Source : Channel NewsAsia, 26 June 2008

The Housing and Development Board is launching a new site for tender under the Design, Build and Sell Scheme (DBSS) on June 27.

The site, located at Lorong 1A Toa Payoh, will be the sixth site to be offered under the scheme.

The plot has an area of 27,480 square metres and an allowable gross floor area of 115,416 square metres. The site is in a mature estate, just minutes away from the Toa Payoh Town Centre.

Tender packets will be available during office hours from June 27 at S$100 each at The Procurement Office (Basement 1), HDB Hub, 480 Lorong 6 Toa Payoh.

The tender will close at noon on August 19. - CNA /ls

Maldives To Lease 19 More Islands For Development

Source : Channel NewsAsia, 26 June 2008

COLOMBO : The Maldives, one of the world's most exotic holiday destinations, plans to lease 19 uninhabited coral islands to be developed as upmarket resorts, officials said on Thursday.

Kurumba island in the isolated Indian Ocean republic of the Maldives

The new resorts will add to the 44 islands that are either to be leased out this year or at various stages of development, Tourism Minister Mahamoud Shougee told AFP by telephone from the capital of Male.

"Once the new investors are identified, they have four years to build the resort," Shougee said.

The Maldives is famed for its exclusive tourists, where guests pay thousands of dollars a night to snorkel, dive and sleep in wooden cabins built over turquoise waters.

In 2006, President Maumoon Abdul Gayoom's government leased 35 islands to foreign and local investors for resort development. Only two of those are currently in operation.

The government is also building 10 new regional airports to compliment the booming resort development and allow locals to commute quickly between the 1,192 small islands, 91 of which have been converted into resorts.

The latest offer of new islands comes as the governor of the Maldives' Monetary Authority, Abdullah Jihad, last week asked the finance ministry to look for alternative sources of revenue to prop up the nation's coffers.

"Leasing new resorts seems to be the quickest option for now," Jihad told AFP. This year's one billion dollar state budget is expected to be short of 190 million dollars.

Tourism accounts for more than a third of the Maldives' economy.

It has enabled the nation of 369,000 Sunni Muslims to emerge as the richest in South Asia, with a per capita income of 3,400 dollars. - AFP /ls

US Existing Home Sales Rise 2.0% In May

Source : Channel NewsAsia, 27 June 2008

WASHINGTON: Sales of existing US homes rose a surprising 2.0 percent in May from April amid falling home prices, the National Association of Realtors (NAR) said on Thursday.

The improved monthly data for the battered real-estate sector offered a fleeting glimpse of relief from a severe and prolonged slump that has resulted in spiking foreclosures and credit turmoil.

The May reading of a seasonally adjusted annual rate of 4.99 million units exceeded analysts' consensus forecast of a rise to 4.95 million units.

Though better than April's pace of 4.89 million units, the number of existing homes sold last month was 15.9 percent below the 5.93 million-unit pace in May 2007, NAR said.

"Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages," NAR president Richard Gaylord said in a statement.

The national median existing home price was 208,600 dollars in May, down 6.3 percent from a year ago when the median was 222,700 dollars.

Lawrence Yun, NAR chief economist, highlighted a glut of inventory in the market two years after the real estate collapse.

"The large supply of homes on the market clearly favours buyers, and it should take several months to draw the inventory down," he said.

"Stabilisation in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices."

Inventory of existing homes for sale at the end of May fell 1.4 percent to 4.49 million units, which represents a 10.8-month supply at the current sales pace, down from a 11.2-month supply in April.

"The excess supply remains at a high level and still suggests that the downward correction in prices is not over," said Amine Tazi, an economist at Natixis.

Existing home sales rose across most of the country but remained in double-digit declines from sales in May 2007.

By region, existing home sales rose 5.5 percent in the Midwest, 4.6 percent in the Northeast and 2.0 percent in the West, but fell 0.5 percent in the South.

"It'd be premature to say the improvement marks a turnaround," NAR's Yun said. "The market is fragile."

A closely watched survey of home prices in 10 major US metropolitan areas released this week showed a deepening fall in home values.

The Standard & Poor's/Case-Shiller Home Price Indices reported a record decline of 16.3 percent in home prices in April from a year ago. - AFP/de

For Sale: 8 Infill Sites For Housing Use

Source : The Business Times, June 27, 2008

THE Singapore Land Authority (SLA) said yesterday that it would sell eight infill sites for residential use. The sites will be offered at a public auction on Aug 21 at M Hotel in Anson Road. They will be sold with fresh 99-year leases.

The auction comes after one in November 2007 at which six infill sites were sold for more than $30 million.

'We were very encouraged by the strong response at the last auction,' said Simon Ong, assistant chief executive of SLA's land operations group. 'It attracted niche or boutique developers with expertise in building unique houses and dream homes.'

The latest sites include some in prime areas such as Holland Road, Carmichael Road and Upper East Coast Road.

As at the previous auction, a Good Class Bungalow site is being offered. Proposed developments for other sites include a two-storey bungalow and a pair of three-storey semi-detached houses.

'The appeal of such sites is that they can be customised to suit the buyer's needs,' said Mr Ong. 'This is aligned with SLA's mission to optimise the use of vacant state land.'

The developer's packet for the sites can be bought from the SLA at $52.50 or found online at www.sla.gov.sg. Interested parties can register for the auction outside the Shenton Room of M Hotel, from 2pm on Aug 21. The auction starts at 3pm.

6th Design, Build And Sell Site Up For Sale In Toa Payoh

Source : The Business Times, June 27, 2008

30% of units built must be equivalent to 4-room or smaller HDB flats

THE Housing and Development Board (HDB) is selling a site on Lorong 1A Toa Payoh by tender under the Design, Build and Sell Scheme (DBSS) - the sixth since the first such site was awarded in January 2006.

The latest site measures 295,790.9 square feet and has an allowable gross floor area (GFA) of 1.24 million sq ft.

HDB said that the successful tenderer has to build at least 30 per cent of the flats with a floor area of 1,022.6 sq ft or less - equivalent to 4-room or smaller flats.

Knight Frank director (research and consultancy) Nicholas Mak believes that the site could draw bids of $150-200 per sq ft per plot ratio (psf ppr).

While this is lower than the $237 psf ppr that Qingdao Construction Group Corporation paid for a DBSS site in Bishan in February, Mr Mak believes that developers will have to factor in market conditions and higher construction costs.

The developer will also have to be sensitive about pricing, he said.

'This kind of project will basically be a bread-and-butter project. The developer will need to sell at quite a fast pace.'

DBSS homes are essentially HDB homes and are not part of the Government Land Sales Programme.

So, potential DBSS units are not considered when calculating future private home supply.

'It is more likely to affect supply and demand of HDB homes,' Mr Mak added.

Chesterton International head of research and consultancy Colin Tan said that as with normal HDB flats, eligibility based on household income applies, so the supply of more DBSS flats should not have much of an impact on the private property market.

He added, however, that some HDB upgraders could decide to buy DBSS flats rather than upgrade to entry-level private condominiums.

Also, he said: 'This Toa Payoh site will appeal to existing residents in the neighbourhood. There is already a captive market.'

Consultants agree that the launch price of the development is not likely to be more than that of the recently launched City View @ Boon Keng, a DBSS site awarded in May for $233.74 psf ppr.

The average price for City View is understood to be $520 psf.

However, in April, HDB awarded a nearby site on Lorong 2/3 Toa Payoh for a private condominium project to the highest bid of $460 psf ppr.

Analysts had estimated that based on the breakeven price, the condo could be launched at $950-1,000 psf.

Frasers Commercial Trust Gets Listing Nod

Source : The Business Times, June 27, 2008

SGX has issued an eligibility-to-list for the admission of units in FCOT to the main board

THE way has been paved for Fraser and Neave (F&N) to list Frasers Commercial Trust (FCOT), a real estate investment trust (Reit).

F&N said yesterday that the Singapore Exchange has issued an eligibility-to-list for the admission of units in FCOT to the main board.

FCOT will be established in Singapore and sponsored by Frasers Centrepoint, a wholly owned subsidiary of F&N. It will be managed by Frasers Centrepoint Asset Management (Commercial), a wholly owned subsidiary of the sponsor.

F&N said that, subject to market conditions, Frasers Centrepoint Asset Management intends to make an offering of units which will likely consist of, inter alia, an international placement to both institutional and other investors in Singapore as well as to the public.

In the event of an offering, the Reit intends to acquire a 99-year leasehold interest in three commercial properties - Alexandra Point, Alexandra Technopark as well as the office and retail component of Valley Point.

More details will be 'set out in the preliminary prospectus of FCOT which will be lodged with the MAS in due course, subject to market conditions,' the statement said.

In the long term, FCOT will also own and invest in commercial real estate in the Asia-Pacific region, including office and business space.

F&N, whose activities cover food and beverage, property and publishing, reported net profits of $96.6 million for the second quarter ended March 31, 2008, down 9.8 per cent from $107.1 million in the corresponding quarter the year before. Revenue came in at $1.14 billion, up 4.7 per cent from 2Q07.

However, for 1H08, net earnings rose 11.7 per cent to $205.2 million, up from $183.7 million in the corresponding period last year. This came on the back of a 12 per cent increase in revenue for 1H08, to $2.46 billion from $2.20 billion in the year-ago period. Earnings per share for H1 2008 was 14.8 cents, up from 14.6 cents.

Ho Bee's Robust Sales Prompt More Launches

Source : The Business Times, June 27, 2008

SOME developers are riding on the pick-up in home-buying mood created by Ho Bee's Dakota Residences preview last week to launch their own projects.

Upbeat: Sim Lian Grp has sold about 100 units of the Clover By The Park condo since its Wednesday preview

Mainboard-listed Sim Lian Group, for one, has sold about 100 units of its Clover By The Park condo at Bishan St 22 since it began previewing the development on Wednesday at an average price of $750 psf.

Next to Kovan MRT Station, an outfit controlled by UOB-Kay Hian star stockbroker pair Han Seng Juan and David Loh Kim Kang is getting ready to release its 512-unit condo, according to industry sources.

BT understands that Centurion Kovan, which is developing the project, plans to preview the condo soon to 'remisier friends' of Messrs Han and Loh. There are also plans to preview the condo overseas, including China. The average price is expected to be in the $850-900 psf range.

The duo bought the 189,812 sq ft site at a state tender in October last year for around $436 psf per plot ratio.

Over in Bishan, Sim Lian is developing two 39-storey blocks with a total of 616 units for the Clover By The Park condo. The first phase released earlier this week comprises one tower with 308 units. It is near good schools like Catholic High (within 1 km), Ai Tong Primary School and Raffles Institution. 'Clover By The Park features three-bedroom and four-bedroom units to luxurious penthouses and suites of six bedrooms,' Sim Lian said in a release yesterday.

Ho Bee has sold 95 units at Dakota Residences since last Friday. The average price is $976 psf. All three projects are 99-year leasehold.

Rochor Rd Hotel Makes Way For Downtown Line

Source : The Business Times, June 27, 2008

Acquisition to accommodate station structures, the authorities say

CONSTRUCTION on the Downtown Line (Stage 1) has begun. And the first casualty will be the New Seventh Storey Hotel in Rochor Road.

Looming shadow of acquisition: Compensation for the 55-year-old hotel will be pegged to market value

A joint statement from the Land Transport Authority, Singapore Land Authority and Urban Redevelopment Authority yesterday said that the government intends to acquire the 38-room hotel to make way for the construction of the new underground station at Bugis.

'Due to engineering constraints which cannot be avoided, the land currently occupied by the New Seventh Storey Hotel and part of the adjacent state land fronting Rochor Road is required,' the statement said.

This is necessary to accommodate station structures and will also 'enable comprehensive redevelopment of the area'.

After the acquisition, the 55-year-old hotel's site will be amalgamated with an adjacent state site at North Bridge Road/Tan Queen Lan Street/Beach Road/Rochor Road. According to the draft Master Plan 2008, the parcel has a plot ratio of 4.2 and is zoned for both commercial and commercial/residential use.

No compensation figure for the hotel's operators - understood to be descendents of Wee Thiam Siew, who also owned the Ban Leong Group - has been revealed. The government will peg this to market value, according to the provisions of the Land Acquisition Act.

An SLA spokesman said that an inquiry will be held, with input from the Chief Valuer to determine the market value.

Chesterton International senior executive director Chng Shih Hian said that the market value of the hotel will likely be based on the potential gross floor area of the site. He said that the recent tender price of $1,068.6 per square foot per plot ratio (psf ppr) for the nearby South Beach site in Beach Road could also be a factor in the valuation. But he noted that the Rochor Road site's attributes - and constraints - are different.

Savills Singapore director Ku Swee Yong believes that the parcel is potentially 'a very good site' because of its proximity to the new Beach Road/Ophir-Rochor corridor. Already, office space at nearby Parkview Square is being leased at about $14 psf, he said.

UOB Buying 15.38% Of Evergrowing Bank

Source : The Business Times, June 27, 2008

$156m stake gives it active participation in Chinese market's growth

AFTER more than a year of talks, United Overseas Bank is finally buying a stake in Chinese lender Evergrowing Bank for 780 million yuan (S$156 million).

UOB said yesterday that it has agreed to subscribe for 15.38 per cent or 260 million shares in the Shandong province bank, subject to approval by China's regulatory authorities. UOB started talks with Evergrowing in May last year.

'The investment in Evergrowing Bank affords UOB an opportunity to participate actively in the growth of the Chinese market,' UOB said in a statement yesterday. 'As a joint-stock bank with nationwide licence, Evergrowing Bank plans to build its distribution network and product capabilities.'

UOB said that as a strategic shareholder it will impart its knowledge, expertise and experience to help Evergrowing Bank enhance its services and products.

Post-subscription, UOB will be the second-largest shareholder in unlisted Evergrowing Bank, after Yantai Electric Power Development.

The purchase will be funded with cash from UOB's internal resources. The investment is not expected to have a material impact on UOB's earnings or net tangible assets in the current financial year.

In conjunction with UOB's subscription, Evergrowing Bank is increasing its issued capital to 1.69 billion yuan.

Set up in 1987, Evergrowing has 81 branches, located mainly in the Yantai region, and in the Chinese cities of Jinan, Qingdao, Nanjing, Hangzhou and Chengdu. Its total shareholders' equity was 1.99 billion yuan and issued capital was 1 billion yuan at the end of last year.

Previously known as Yantai Housing Savings Bank, the bank was primarily involved in the housing credit and settlement business until 2003, when it completed a restructuring exercise, changed its name and became a joint-stock commercial bank.

According to Evergrowing's website, its deposits totalled 65.2 billion yuan and its assets were 107.37 billion yuan at the end of last year.

Besides inorganic expansion in China through mergers and acquisitions, UOB is growing its own franchise there after getting the go-ahead for local incorporation in December last year. This enables the bank to offer the full range of foreign currency and renminbi services to Chinese nationals.

At present, UOB has seven branches and one sub-branch - in the cities of Beijing, Guangzhou, Shanghai, Shenzhen, Xiamen, Shenyang and Chengdu.

Flight To Quality May Cool Office Rents In Places

Source : The Business Times, June 27, 2008

Spiralling rentals almost ground to a halt in Q2 with more cautious economic climate

For office tenants in Singapore wearied by steep rental hikes in the past couple of years, some relief is at hand.

The sharp escalation in office rents screeched almost to a halt in the second quarter of this year as a more cautious economic outlook became widespread. Average prime and Grade A office rents edged up just 0.8 and 0.6 per cent respectively in Q2 over the preceding three months, according to latest figures from CB Richard Ellis (CBRE).

'We may see on an average basis, marginal advancement in rentals in second-half 2008 beyond current levels. 2009 will probably be flat, and for 2010 and 2011, we may see office rents easing' as new supply is completed, says CBRE executive director (office services) Moray Armstrong.

Last year, prime and Grade A office rents nearly doubled and that came on top of the 50-plus per cent gains they posted in 2006, on the back of tight office space and strong demand from occupiers including global financial institutions expanding their operations in Singapore.

Alarmed that spikes in office rents in the past two years may threaten Singapore's business competitiveness, the government has been boosting supply.

While new office developments being built are not expected to face difficulty pulling in tenants, vacancies created in older properties from a departure of tenants in a 'flight to quality' will create downward pressure on rents, market watchers say. A lot will also depend on how demand pans out.

CBRE noted yesterday that 'it was evident that the volume of leasing transactions driven by expansion was lower in the past two quarters'. The pace of leasing pre-commitments in new prime office developments has slowed but negotiations are still progressing, the property consultancy said.

'A couple of large occupiers have identified excess space which can be made available for subletting, but at this stage, this has not become a notable trend,' it added.

Mr Armstrong says that the significant number of new developments being built in the central business district (CBD) is likely to lead to a more competitive environment for pre-letting. 'Existing landlords can be expected to adopt more defensive positions, with tenant retention being given greater priority as the completion of new supply is now more imminent.

'Increasing competition from higher-quality new buildings should serve to cap rental appreciation from today's levels,' he adds.

CBRE's figures show that about 10.2 million square feet of new office space will be completed between 2008 and 2012, the bulk of which (6.7 million sq ft) is targeted to be ready in 2010-2011.

Key projects slated for completion in 2010 include Marina Bay Financial Centre (MBFC) Phase 1 and 50 Collyer Quay. The following year will see the completion of MBFC Phase 2, Ocean Financial Centre, OUB Centre Phase 2, Marina View (North Tower) - all in the financial district - and Mapletree Business City in the Alexandra Road area.

To redress the office shortage, the government has not only been selling more sites for development into Grade A projects in the CBD but is also seeking to resolve the short-term supply shortage by releasing 15-year leasehold 'transitional' office sites outside the financial district that can be developed into low-rise projects within a year.

These will cater to tenants that don't need premium office space. As well, vacant state properties are being leased to the private sector for conversion into offices.

Putting the supply numbers in perspective, CBRE says: 'At face value, potential confirmed supply seems abundant, but it should be viewed in context with strong take-up. Some 22 per cent of known supply from Q3 2008 to 2012 is pre-committed, with around 9 per cent under offer.'

Jones Lang LaSalle (JLL) managing director (South-east Asia) Chris Fossick says: 'We expect very strong interest in the new office developments completing over the next few years from tenants wishing to relocate and expand into new high-quality office stock and to meet their corporate social responsibility goal of occupying 'Green Mark' buildings.'

JLL expects prime and Grade A office rents to increase 18 per cent for full-year 2008 but to grow more moderately next year. 'We expect strong take-up of office space over the coming three years due to pent-up demand that has accumulated because of the tight supply over the past couple of years,' Mr Fossick adds.

Office landlord Hongkong Land director (commercial property, South Asia) Robert Garman says that occupier demand for offices on the island has been holding up well against the backdrop of an uncertain global economic environment. 'Commitment levels for MBFC have exceeded our expectations and we feel confident moving forward,' he adds.

CBRE data shows the average monthly prime office rental in Singapore as at Q2 this year was $16.10 psf, just 10 cents higher than the Q1 figure and reflecting a 7.3 per cent increase in the first half of this year (against the end-2007 level). For the whole of last year, the increase was 92.3 per cent.

CBRE's data also showed that the average Grade A office rental stood at $18.80 psf a month in Q2 this year, up 15 cents from the preceding quarter and a 9.6 per cent appreciation for the first half. This is more moderate than the 96.4 per cent hike seen for the whole of 2007.

'Grade A vacancy also remained very tight at 0.6 per cent. No new development will be completed before H2 2009,' CBRE notes.

CapitaLand Acquires 62% Of KL's Sungei Wang Plaza For S$250m

Source : Channel NewsAsia, 25 June 2008

Property developer CapitaLand has acquired about 62 per cent of Sungei Wang Plaza, one of the most established retail malls in Kuala Lumpur.

It paid about S$250 million for the purchase, which includes retail space and parking lots.

Sungei Wang is a prime freehold property along the main Bukit Bintang shopping precinct in the Malaysian capital.

The mall has close to 100 per cent occupancy and sees more than 24 million visitors annually.

CapitaLand said the acquisition will form the third seed asset for its proposed pure-play Malaysian retail real estate investment trust (REIT).

Its earlier acquisitions are the Gurney Plaza in Penang and Mines Shopping Fair in Selangor.

The three properties will have a combined asset size of about S$840 million.

CapitaLand said this will put it firmly on track to create its proposed pure-play Malaysian retail REIT by the end of this year. - CNA/ms

New 7th Storey Hotel To Make Way For Downtown Line Development

Source : Channel NewsAsia, 26 June 2008

One of Singapore's oldest hotels - New 7th Storey Hotel at Rochor Road - will be demolished to make way for the new Bugis MRT station for the Downtown Line.

The hotel's owner and occupants will have to move out of the premises by the end of December.

The quaint hotel was well-known in the 1960s and 1970s when its pub was one of the main nightspots to be seen.

Its iconic spiral staircase has been a favourite backdrop of photographers, and the hotel still has a lift which is manually operated.

The authorities say the demolition is unavoidable due to engineering constraints which cannot be avoided.

The new Bugis station is one of the six stations that make up the 4.3-kilometre Downtown Line One, which is scheduled to open in 2013.

Once completed, commuters will have more transport choices in the city as the Downtown Line One will serve existing and upcoming developments in the Marina Bay area, including One Raffles Quay, The Sail @ Marina Bay, Marina Bay Sands Integrated Resort and the Marina Bay financial centre. - CNA/ac

SLA To Auction 8 Infill Sites For Residential Developments

Source : Channel NewsAsia, 26 June 2008

The Singapore Land Authority (SLA) has launched another eight infill sites for residential use.

They will be offered through a public auction on August 21. The sites will be sold with fresh 99-year leases.

This will be the second time the SLA is offering such sites for public auction. In November last year, six infill sites were sold for over 30 million Singapore dollars.

As in the previous auction, a site within the Good Class Bungalow area is also being offered. It has a land area of about 1,400 sq m in Ridout Road, District 10.

Possible developments for the other sites include detached, semi-detached and terrace houses.

Some of the other sites are located within prime residential areas such as Holland Road and Carmichael Road. There is also a site at Upper East Coast Road, within walking distance of the popular Siglap and East Coast food haunts.

'Infill' sites are pockets of State land located in the midst of an established landed housing estate that have either been left untouched by nearby development, or are formerly used for public purposes that have since been phased out.

SLA's assistant chief executive for land operations group, Mr Simon Ong, said: "We were very encouraged by the strong response at the last auction. It attracted niche or boutique developers with expertise in building unique houses and 'dream homes'.

"This time, we have identified and released more sites and offering them through public auction for wider participation. The appeal of such sites is that they can be customised to suit the buyer's needs. This is also aligned with SLA's mission to optimise the use of vacant State land." - CNA/ir

SLA Offers 8 Infill Sites For Residential Homes

Source : The Straits Times, June 26, 2008

THE Singapore Land Authority (SLA) on Thursday launched another eight infill sites for residential use.

They include a 1,400 sq m site in Ridout Road, District 10, within the Good Class Bungalow area.

Some of the other sites are located within prime residential areas such as Holland Road and Carmichael Road. There is also a site at Upper East Coast Road, within walking distance of the popular Siglap and East Coast food haunts.

The sites, to be offered through a public auction on Aug 21 at M Hotel, can be developed for detached, semi-detached and terrace houses. They will be sold with fresh 99-year leases.

This will be the second time that SLA is offering such sites for public auction.

Last November, six infill sites were sold for over $30 million.

'Infill' sites are pockets of state land located in the midst of an established landed housing estate that have either been left untouched by nearby development, or are formerly used for public purposes that have since been phased out.

Assistant Chief Executive, Land Operations Group, Mr Simon Ong said: 'We were very encouraged by the strong response at the last auction. It attracted niche or boutique developers with expertise in building unique houses and 'dream homes'.

'This time, we have identified and released more sites and offering them through public auction for wider participation. The appeal of such sites is that they can be customised to suit the buyer's needs. This is also aligned with SLA's mission to optimise the use of vacant State land.'

For more information, please log on to http://www.spio.sla.gov.sg and http://www.sla.gov.sg/Land_Sales/ls_index.htm

Gillman Heights En-Bloc Sale To Move Ahead Following Court's Ruling

Source : TODAY, Wednesday, 25 June 2008

After three months of deliberation, Justice Choo Han Teck has delivered a 31-page judgment that - for now - signals the end of the Gillman Heights en-bloc saga.

However, it was not the outcome hoped for by the 22 minority owners seeking to scupper the S$548 million deal.

The judge said the specific issue was not one concerning protection for the minority, but "whether a privatised HUDC estate can participate in the benefits of an en-bloc sale if the requisite conditions are met".

Under current laws, a 90 per cent approval is required for estates less than 10 years old and 80 per cent for those older.

Some 87.5 per cent of the 608 unit owners had agreed to the sale of Gillman Heights, built in 1984.

On the issue of the estate's age, which the plaintiffs claimed was less than 10 years old since the condo only underwent privatisation in 1995 and acquired the Temporary Occupation Permits or Certificates of Strata Completion (CSC) in 2002, the judge ruled that the estate was more than 10 years old.

He said that there was also no bad faith and breach of natural justice due to the involvement of the National University of Singapore (NUS), which held 46.86 per cent share at the development.

Five months after the en-bloc sale was inked in February last year, it emerged that NUS was also a shareholder of Gillman Heights' purchaser Ankerite Pte Ltd.

While some owners claimed this was a conflict of interest, Justice Choo said NUS was entitled to exercise its right as a consenting subsidiary proprietor (CSP) to vote for the collective sale.

He added: "The minority CSPs were duly noted of the NUS vote and execution of the collective sale agreement about six weeks before the application for approval was submitted to the Strata Titles Board."

Futhermore, Gillman Heights was sold before property prices skyrocketed last year, so "it would not be appropriate for the Board or this court to assess good faith with regard to the sale price of the development through the lens of hindsight".

Despite the setback, one minority owner - who declined to be named - said he is not giving up the fight.

"Many of us are still disappointed by the conflict of interest and we will stick it out till the end and take this case to the Court of Appeals."

But Lee & Lee senior partner Quek Mong Hua, who represented the majority owners, said: "They have every right to appeal, but they have to consider if it is in their interest bearing in mind the cost."

For now, Mr Quek said his clients were happy the judgement is out and they are hoping to complete the sale. - TODAY

High Court Dismisses Appeal Against Gillman Heights Sale

Source : The Straits Times, June 26, 2008

THE High Court has dismissed an appeal by owners objecting to the collective sale of Gillman Heights Condominium, which means the $548 million sale can go ahead.

MOVING ON: CapitaLand can now proceed to complete its $548 million purchase of the Alexandra Road condo, unless the objecting owners take their case to the Court of Appeal. Yesterday, the High Court rejected all eight objections raised against the collective sale.

CapitaLand, the lead buyer of the 99-year leasehold Alexandra Road site, can now proceed to complete the deal, provided the objecting owners do not appeal against the High Court's decision.

Yesterday, about three months after the case was heard, Justice Choo Han Teck rejected all eight objections raised by the minority owners.

Among their contentions was a claim that the Strata Titles Board (STB) had made a mistake granting the order approving the sale, as the minimum consent rules did not apply to Gillman Heights, a former HUDC estate.

The judge said the requisite majority consent does apply to privatised estates such as Gillman Heights. For instance, the level of consent required is pegged to the age of the building, rather than the temporary occupation permit or certificate of statutory completion dates - neither of which applies to former HUDC estates.

The owners also objected to the fact that the link between the buyer and the National University of Singapore (NUS) - which owns 303 of the 607 units - was not disclosed to the STB, which approved the sale late last year.

NUS had taken a 15 per cent stake in the buyer Ankerite, whose other shareholders are CapitaLand, Hotel Properties and a private fund, after it agreed to the sale.

Justice Choo said he was not persuaded that the STB should hear the parties again on this issue.

He said there was no bad faith in this case, as the sale price was $20 million above the reserve level. The price works out to $363 per sq ft of potential gross floor area.

A minority owner, who wanted to be known only as Mr Kok, said he was still digesting the decision.

'We will have to discuss among themselves and with our lawyer to see whether we should take the case to the Court of Appeal.'

Yesterday, CapitaLand said it looked forward to developing the site into an 'innovative' residential project with about 1,200 homes.