Tuesday, February 19, 2008

Merchant Square On Sale For $73m

Source : The Strait Times, Feb 19, 2008

A MODEST office development with well-known cosmetics company Estee Lauder as its anchor tenant is up for sale at an indicative price of $73 million.

The price for the 99-year leasehold Merchant Square - located in Merchant Road, opposite Riverside Point - works out to $1,450 per sq ft (psf) of net lettable area.

The latest office property transaction in the vicinity involved the Apollo Centre, sold last December for $1,378 psf.

Merchant Square, completed in 1996, comprises a four-storey office tower integrated with two blocks of conserved shophouses.

CB Richard Ellis, which is marketing the property, said potential buyers can expect substantial rental appreciation in the short to medium term.

Nearly 50 per cent of the property's leases will expire over the next two years.

Some of the leases were signed at rates as low as $3 to $4 psf, while others are at the current rates of $5 to $5.50 psf.

The Merchant Square vicinity is quiet - a far cry from the other side of the road where Riverside Point and Clarke Quay are located. It is currently 96 per cent occupied.

Estee Lauder takes up 1-1/2 floors, or about 15 per cent, of the space.

Merchant Square has a net lettable area of 50,262 sq ft and sits on a 28,083 sq ft plot. There are two basement carpark levels with 76 lots.

It was originally intended to be a retail project.

Back in 1995, however, owner Jackson International reportedly took advantage of the narrowing gap between office and retail rents to convert three of four shop floors in the development into offices.

Jackson owns one industrial building, but its main business is as a carpet and rugs distributor and manufacturer.

The tender for the property closes on March 12.

志远大厦Waldorf Mansion 将集体标售

《联合早报》Feb 19, 2008

鼠年登场不久,原本淡静的新加坡房地产市场,似乎也开始有了动静。

位于新加坡马里士他路的志远大厦(Waldorf Mansion)集体出售私宅项目,准备在市场上公开招标。这个永久地契地段的要价是2100万元(即容积率每平方英尺659元)。

据了解,这也是分层地契法去年10月4日生效以来,获批准的第一个集体出售项目。

负责销售这个项目的力合产业(Realtorhub Real Estate)指出,这里的单位面积介于600平方英尺到3000平方英尺不等,因此,单位业主所能获得的赔偿,介于80万至260万元。

志远大厦位于宝石中心(Ruby Plaza)、马里士他楼(Balestier Towers)和新丽岭(Scenic Heights)附近,有15年历史,11层楼高,16个单位。

宝石中心在去年7月由速美(Soilbuild)集团以6900万元买下,这相等于容积率每平方英尺582元,原本的要价至少是7900万元。目前分层地契局正在审理这个集体出售个案。

力合产业指出,志远大厦的土地面积,只有1万1384平方英尺,容积率为2.8,总建筑楼面可达3万1876平方英尺,比宝石中心小很多。同样属永久地契的宝石中心,占地3万9494平方英尺,容积率为3.0,总建筑楼面可达4万7393平方英尺。

力合产业执行主席吴申南说,志远大厦可重新发展成拥有26个面积约1200平方英尺的单位。地段将来也有机会同毗邻的马里士他楼和新丽岭合在一起,成为一个更大的发展项目。但他也指出,这两个私宅项目目前尚未获得80%的业主同意出售。志远大厦则已获得了80.3%的业主同意出售。

力合产业指出,附近一些屋龄相近的公寓单位,目前的售卖尺价大约是600元,一些屋龄约两年的公寓单位,尺价则大约是900元。商贸坊也公开求售。

除了私宅,位于马真路和克里门梭道交界处附近的办公楼建筑商贸坊(Merchant Square)也在市场上公开求售,预示价为7300万元(以净租用楼面来计算的尺价大约是1450元)。

建筑相当独特,由一座四层楼的办公楼建筑和两座保留店屋连接在一起,地面层是饮食店,上面则是办公楼。商贸坊于1996年竣工,99年地契由1993年算起,属于商用项目。

这个项目的净可租用总面积约5万零262平方英尺,占地约2万8083平方英尺,有两层地底停车场。负责销售这个项目的世邦魏理仕(CBRE)指出,这个项目的租用率目前达到96%,主要的租户为化妆品公司雅丝兰黛(Estee Lauder)。将近一半的现有租约,会在两年内到期。

世邦魏理仕指出,现有租金大约是每平方英尺3.30元,但业主也取得一些5.50至6.50元的租金合同,以现有的市场展望来看,它相信要取得6至7元的租金尺价是可能的,并看好接下来几年的租金增长潜能。

世邦魏理仕董事洪茂钊指出,本地办公楼供应短缺,象商贸坊这样属于中小型办公楼的建筑,对终端用户来说,是个难得的购买良机。招标会在3月12日截止。

樟宜酒店卖出 获利2040万元

与此同时,位于樟宜路的樟宜酒店(Changi Hotel)昨天也以4200万元成交。原业主许兄弟集团(Koh Brothers)董事经理许庆祥受访时表示,这比2750万元的估价高出不少,因此他感到很高兴。售卖樟宜酒店所取得的盈利是2040万元。

据了解,成功标得樟宜酒店的酒店业者,也需要支付发展费。这个地段可重新发展成商用或酒店/商业两用的项目,地皮的面积约为2万6433平方英尺,属于永久地契。

4500个预购组屋单位 上半年会推出供选购

《联合早报》Feb 19, 2008

针对成熟组屋区的购屋情况空前热烈,建屋局发表文告重申,市场有足够组屋满足购屋者需求。建屋局在今年上半年会推出4500个预购组屋单位供公众选购。

有意购屋者也可考虑购买转售组屋。虽然转售组屋价格在去年有所增加,不过市场上仍有负担得起的转售组屋供公众选择。

建屋局数据显示,上月的转售组屋交易中,约四分之一的现金溢价没超过1万元,而这也包括成熟组屋区如宏茂桥、勿洛、义顺和淡滨尼的组屋。

它说,成熟组屋区的组屋一向受公众欢迎,但供发展公共住屋的土地有限,导致那里的新组屋供应也有限。

建屋局表示,无法成功选购组屋的申请者可考虑购买预购组屋,建屋局会加快推出预购组屋的步伐,以满足公众需求。过去四次在盛港和榜鹅推出的预购组屋计划都获得公众热烈反应,但不是所有组屋都被抢购一空。

盛港的预购组屋Coral Spring和Fernvale Vista的认购率分别为70%和65%。超过九成的生态组屋绿馨苑(Treelodge@Punggol)的单位已被预购,另一个预购组屋Punggol Vista的认购率也有66%。

由于预购组屋要好几年建成,建屋局吁请年轻情侣事先为购屋做好准备,他们可尽早申请预购组屋,以减少婚后等候组屋的时间。成功申请预购组屋者,也可考虑先和父母同住或暂时租房,直到预购组屋完工为止。

滞销组屋方面,由于建屋局已在去年售出不少单位,因此未来通过双月组屋销售计划出售的组屋会越来越少。据了解,建屋局目前仍有约2000间滞销组屋。

双月组屋销售计划反应超热 36人争购一组屋单位

《联合早报》Feb 19, 2008

究竟是成熟组屋区魅力无法挡,还是想买组屋的人太多?本月的双月组屋销售计划反应空前热烈,推出仅一个星期就有近一万人抢购278个单位,平均每个单位有36个人争着买。

这是销售计划推出六次以来待售单位最少,竞争最激烈的一次。

位于大巴窑中路第79A至第79E座组屋有多间待售单位。(海峡时报)

2月份双月组屋销售计划昨天停止接受第一轮申请,截至下午5时有9901人申购。

这轮主要销售成熟组屋区的滞销单位,其中近半数在大巴窑,其余遍布红山、芽笼、淡滨尼、勿洛和金文泰等。共有194个四房式、64个五房式和20个执行公寓组屋待售。

大巴窑中路第79A至第79E座组屋有多间待售单位,这批已落成的组屋与大巴窑市中心仅一路之隔,更是本地第一批拥有中层空中花园的组屋。

地点是选购组屋首要考量

记者上周六走访大巴窑中路第79C座示范单位,只见前来参观的公众络绎不绝,有的是即将结婚的情侣,有的则是想购新屋的家庭。受访者异口同声说,地点是他们选购组屋的首要考量。

30岁工程师陈思彬已参加10次的选购组屋活动,无奈仍找不到心仪组屋。他曾抽中三巴旺和榜鹅的组屋,不过嫌单位位于2、3楼,环境不够优越,最终没购成。

他说:“我不觉得是我们太挑剔,以致找不到房子。不管是哪个组屋区,只要新单位是在3楼以上,我们一定购买。”

陈思彬说,他也考虑购买转售组屋,只是卖家要求的现金溢价(cash over valuation)太高,超出他所能接受的范围。

“我们也想响应政府的号召,尽早结婚组织家庭,却因找不到组屋而延后所有计划。”

他建议建屋局应让首次购屋者在双月组屋销售计划下有优先权,以提高成功购买组屋的几率。

目前,首次购屋者在预购组屋和抽签选购计划中享有优先权,由于双月组屋销售计划是销售滞销的组屋,因此人人平等,没有优先权制。

除首次购屋者者,一些大巴窑居民也申购这批滞销组屋。他们受访时说,与其购买另同区转售组屋,他们宁可以更低价格向建屋局购买新组屋。

林振兴(42岁,经理)说,他住大巴窑四房式组屋,由于屋龄35年,因此申请购买新屋子。

他说,新组屋面积相当小,就算他幸运被抽中,也不一定会买。“我只是想碰运气,要是真的被抽中,我再考虑要不要把房子卖掉。”

大巴窑居民黄玉兰(37岁,工厂女工)说,她的三个孩子已长大,促使她决定从三房式提升到四房式组屋。她说,要是这次无法成功选购组屋,她考虑迟些再购买组屋。

房产经纪公司:转售组屋价格有回稳现象

Dennis Wee房地产经纪行董事许家荣对滞销组屋获得如此热烈反应感到相当惊讶。他说,现在转售市场仍相当火热,卖方要求的溢价介于3万至5万元,许多有意购屋者觉得向建屋局买新房子更划算。

HSR房产经纪公司执行董事郑来明说,最近转售组屋市场不再牛气冲天,价格有回稳现象。据他观察,一些卖家开出的天价已“吓跑”许多购屋者,因此纷纷把要求的溢价调低5%至8%。但许多买家仍抱着观望态度,不急于进场,或许市场会在一、两个月才变得更活跃。

Maybank Offers Promotional 1.68% Home Loan Package

Source : The Straits Times, Feb 19, 2008

INTEREST rates have been sliding for months, yet it is only now that the first cut in mortgages is appearing. And it was Maybank that fired the first shot.

Maybank unveiled yesterday a promotional 1.68 per cent fixed rate, significantly lower than the 3.5 per cent average rate offered by some rival banks.

The rate applies to the first year of a three-year mortgage package but will be available only for the next three weeks.

It has been a long time coming for market watchers, who have been predicting for months that plummeting interest rates will flow through to home loans, perhaps even igniting a mortgage rate war.

Despite the Singapore Interbank Offered Rate (Sibor) - the level banks lend money to one another - falling by a half to 1.5 per cent early this month from a year ago, no bank had budged.

Maybank took the first step yesterday, when the Sibor sank further to 1.44 per cent.

Its teaser rate of 1.68 per cent for the first year rises to 2.68 per cent for the second year and 3.38 per cent for the third and final year of the loan, which applies to private or HDB mortgages. The customer will be 'locked in' for three years.

The aggregate three-year rate is 7.74 per cent, which Maybank says is lower than the HDB's 7.8 per cent concessionary rate. The 'blended' rate - the average rate per year for three years - is 2.58 per cent.

Maybank is dangling the promotional rate for just three weeks, as it expects interest rates to head north again in the coming months.

Ms Helen Neo, Maybank Singapore head of consumer banking, said while interbank rates had softened over the past few months, the bank 'expects interest rates to rebound in view of rising inflation in Singapore'.

The bank hopes its short and sweet promotional package, which is open only to new customers, will secure for it a bigger slice of a fiercely competitive market.

If its rivals are worried, they are not showing it.

United Overseas Bank (UOB) said it was 'closely monitoring the situation'.

Mr Gregory Chan, head of OCBC Bank's secured lending, said the bank 'will review the situation before making any decisions on adjusting the rates of our packages'.

Banks, however, may find themselves under greater pressure to cut rates for fixed- and variable-rate mortgages if interest rates keep tumbling.

That, of course, is the great unknown. The difficulty in predicting where rates are headed has led banks to keep their powder dry.

Mr Tan Chia Seng, Citibank Singapore's business director, said 'interest rate movements have been difficult to predict'. Citibank 'constantly reviews' its rates to ensure these are competitive, he said.

Standard Chartered Bank's (Stanchart's) head of mortgages, Mr Stuart Kamp, said: 'We are not advising our customers to switch to fixed-rate loans yet, as we expect interest rates to trend down for the rest of the year.'

A DBS Bank spokesman said 'for now, there is no plan to adjust rates'.

She said the bank would keep its 'transparent mortgage packages', which had rates pegged to the 12-month Sibor, as well as the Central Provident Fund Ordinary Account rate. Currently, the rate on DBS' managed mortgage with a 12-month Sibor is about 2.875 per cent.

OCBC, UOB and Stanchart offer mortgage packages linked to transparent rates like the swap offered rate, or SOR, which comprise the Sibor plus a bank's lending costs.

These offer rates lower than fixed-rate packages, as they allow customers to benefit from declining interest rates.

OCBC's package, for example, charges a premium of 1 per cent on top of a three-month SOR. This means that the rate is currently about 2.46 per cent.

Banks said the transparent packages had attracted strong interest from customers in recent months.

Tan Family's Final Offer For Straits Trading: $6.70 A Share

Source : The Straits Times, Feb 19, 2008

THE battle for The Straits Trading Company went up another gear yesterday, with the family of the late Mr Tan Chin Tuan raising their bid yet again. This time, however, their offer is final.

Tecity, the family's investment vehicle, lifted its offer from $6.50 to $6.70 per share and extended the acceptance period to March 6.

This came after its rival bidder - the Lee family, who are OCBC Bank's main shareholders - raised their offer last Thursday.

The bidding war began in January, when Tecity offered $5.70 per share for Straits Trading, saying it wanted more control due to its historical ties with the firm.

Tecity, which has been a shareholder since the 1950s, now owns about 24 per cent of Straits Trading.

The Lee family own about 7 per cent of Straits Trading but control around 33 per cent through their shares in Great Eastern and OCBC, which are also Straits Trading shareholders.

Late last month, the Lee family countered Tecity by offering $5.76 per share. Tecity swiftly responded by raising its offer to $6.50, and the Lees returned serve last Thursday with an offer of $6.55.

Before the takeover tussle began, Straits Trading shares had an average price of about $4.70 over the last year, valuing it at $1.53 billion.

Tecity's $6.70 offer now values the minerals, hotels and property company at $2.18 billion, an increase in its market capitalisation of more than $500 million in just a couple of months.

Tecity chief executive Chew Gek Khim, granddaughter of Mr Tan, a former OCBC chairman, said her group's offer of $6.70 was final. Ms Chew said independent adviser CIMB had taken into account Straits Trading's financial performance and volatility in the stock market.

CIMB has revalued Straits Trading's assets at $6.52 per share.

Straits Trading announced last Saturday that for the year ended Dec 31, profits rose to $485 million from $194 million previously. The net asset value per share, which has not been revalued, works out to $5.62.

OCBC has said it will not sell its shares to either Tecity or the Lee family, while Great Eastern has yet to decide.

The question now is how the Lee family will respond.

They can opt to do nothing and hope the Tecity bid fails. Tecity needs about 27 per cent for its bid to cross the 50 per cent line and succeed.

If OCBC and Great Eastern do not sell their stocks, Tecity will have to rely on individual shareholders to shore up the numbers.

It remains to be seen if the Lee family will be willing to take the risk of sitting it out, given that they have clearly stated that they want to retain control.

However, if they trump Tecity's offer, they may end up having to shell out anything up to $1.4 billion, assuming all remaining shareholders, including Tecity but not OCBC and possibly Great Eastern, accept their offer.

Straits Trading shares closed three cents up at $6.70 yesterday.


FUNDAMENTALS

Independent adviser CIMB has taken into account Straits Trading's financial performance and volatility in the stock market.

MS CHEW, citing factors considered behind her group's final offer

Overwhelming Response To HDB's Sale Of 4-Room And Bigger Flats

Source : Channel NewsAsia, 19 February 2008

There were just 278 flats offered but the Housing and Development Board received about 9,900 applications.

This was the number recorded at the close of the application phase on Monday for the bi-monthly sale of four-room and bigger flats.

HDB said it received such an overwhelming response because the flats offered are in established HDB towns which are popular.

But the supply of new flats is tight as there is limited land available for new public housing developments.

HDB added that it has been almost a year since it introduced the Bi-monthly Sales Exercises and HDB is currently conducting a review of the scheme.

HDB also advised unsuccessful applicants to consider booking a flat in one of its Build-To-Order (BTO) projects where there is ample supply to choose from.

In fact, HDB has stepped up its building programme and plans to launch another 4,500 BTO flats in the first half of 2008.

It added that the recent BTO exercises for flats in new towns have generally been well received but there is still a good selection of balance flats left.

HDB said on average, only one in two applicants invited on the first day of the selection exercise actually booked a flat, despite having a wide range to choose from.

As BTO flats may take a few years to be ready, buyers are advised to plan ahead for their housing needs.

HDB also urged buyers with immediate housing needs to look to the resale market.

It said while resale prices have risen in the past year, there is still a wide range of affordable resale flats available.

Its records show that in January 2008, 25 percent of resale transactions were completed at prices not exceeding $10,000 above market valuation.

These included transactions in the more established towns such as Ang Mo Kio, Bedok, Tampines and Yishun. - CNA/de

No Change To Geylang's Zoning Use So Residential Nature Of Areas To Stay

Source : Channel NewsAsia, 18 February 2008

The red-light area of Geylang is ‘ring-fenced’ through vigilant enforcement to control vice activities.

National Development Minister Mah Bow Tan said the Police has and will continue to undertake regular enforcement action in both the odd and even streets (Lorongs) of Geylang.

Mr Mah was responding to questions by Marine Parade GRC MP Fatimah Lateef on strategies to ‘ring-fence’ Lorongs 22 to 44, which are mainly residential areas.

He added that the Anti-Vice Branch conducts frequent checks at the red-light areas and regular enforcement against vice.

The Police also impose stringent licensing conditions for entertainment outlets and massage establishments in the area.

Mr Mah said the majority of sites in the area between Lorong 22 and Lorong 44 are zoned residential.

So change of use to non-residential uses, such as for public entertainment, would not be supported in principle.

The Minister noted that a multi-agency effort has been set up to improve conditions in the Geylang area. The aim is to make crime and vice more difficult. Street lighting has been improved and CCTV installed.

Enhancing the sense of security among residents by reducing the number of streetwalkers venturing into the residential areas is another key objective of the effort. - CNA/vm

Merchant Square And Waldorf Mansions Up For Sale

Source : The Business Times, February 19, 2008

MERCHANT Square, a four-storey office building off Merchant Road, is up for sale with a guide price of $73 million.















With a total net lettable area (NLA) of about 50,262 square feet, the unit price works out to $1,450 psf of NLA.

The property, which was developed by carpet manufacturer Jackson Carpet and completed in 1996, sits on a land area of approximately 28,083 sq ft and has two levels of basement carparking for 76 vehicles.

CB Richard Ellis is marketing the 99-year leasehold building and its director (Investment Properties) Charles Hoon said the entry yield is about 2 per cent.

He added that while the average rental is $3.80 psf per month, new leases are being contracted at $6.50 - $7 psf per month.

The lease profile also shows that close to 50 per cent of the current leases will be expiring over the next two years.

'Smallish mid-sized office buildings similar to Merchant Square present a good acquisition opportunity and remain sought-after amongst end-users in view of tight office space supply,' Mr Hoon said.

The property is currently 96 per cent occupied and has as its anchor tenant cosmetics company Estee Lauder.

Waldorf Mansions at Balestier Road has also been put up for sale. The asking price is $21 million, or $659 per sq ft per plot ratio (psf ppr).

The freehold 11-storey block comprising 16 apartments has a site area of 11,384 sq ft, a plot ratio of 2.8, and maximum gross floor area of 31,876 sq ft.

The site is marketed by Realtorhub Real Estate (RH), whose executive director Daniel Ng said it can be redeveloped into a high-rise condominium with 26 units of about 1,200 sq ft each.

He added that the site is capable of being amalgamated with the two adjoining sites, Balestier Towers and Scenic Heights, to form a larger development.

Based on the asking price, Mr Ng said that the en bloc sellers will make a premium of about 33 per cent over the current market price for Waldorf Mansions.

In July last year, RH brokered the deal for nearby Ruby Plaza which was sold to Soilbuild Group for $69 million, or $582 psf ppr.

Modest Weekend Sales At Waterfront Waves

Source : The Business Times, February 19, 2008

IN A bellwether post-Budget property launch, Frasers Centrepoint and Far East Organization sold 20 units at the weekend at their Waterfront Waves condo fronting Bedok Reservoir. The project was officially launched at the weekend with the start of an advertising campaign.

Post-Budget launch: Twenty units at the 99-year leasehold project, which fronts Bedok Reservoir, were sold over the weekend

The sales brought the total sold so far at the 99-year leasehold project to 100 units, including 80 sold earlier after the condo was soft launched around mid-January. So far, 180 units at the 405-unit development have been released.

The average price currently for the entire development is $750 per square foot after discounts, with the spread ranging from around $650 psf to $930 psf. However, for the 100 units sold so far, the average achieved is $801 psf, as they are among the better-facing units. About 85 per cent of buyers of the 100 units are Singaporeans and 35 per cent have existing HDB addresses.

Property industry watchers were keeping an eye on Waterfront Waves for an indication of buying sentiment after Friday's Budget.

Some developers hoped the Budget would boost buyer confidence, paving the way for them to go ahead with launches they had held back because of sentiment dented by the stock market plunge and sub-prime woes.

While the 20 sales at the weekend seem modest, Frasers Centrepoint assistant general manager (sales & marketing) Elson Poon said the result was 'within our expectations in view of current market sentiment'.

'People are still cautious when it comes to making big-ticket purchases,' he added.

The project's pricing may have been a factor, market watchers reckon.

Mr Poon confirmed that the $801 psf average price achieved for the 100 units is a new high for a condo launch in the Bedok Reservoir area. Three-bedroom units at Waterfront Waves cost between $880,000 and just over $1 million.

Giving his take on the outcome for the maiden launch post-Budget, CB Richard Ellis executive director (residential) Joseph Tan said: 'The buying mood is still cautious. But if you're expecting a price correction, it may not happen for a while. The bulk of unlaunched projects are held by mainstream developers. They have the capacity to hold and control prices.'

Another property consultant said: 'If there's any price drop it may be started by smaller developers, who usually try not to hold. As long as they can make money, they'll let go.'

Amex Signs Up For Marina Bay Financial Centre

Source : The Business Times, February 19, 2008

It is said to be taking 50,000 sq ft in Tower 2, in the project's 1st phase

AMERICAN Express International is the latest new tenant at Marina Bay Financial Centre (MBFC), which means that slightly more than half of the total 2.9 million square feet of offices in the entire development has been taken up.

BT understands it will take about 50,000 sq ft or two floors in the 50-storey Tower 2, which is under MBFC's first phase and slated for completion by early 2010. Amex will join British bank Barclays, Swiss private bank Pictet and UK-based stockbroking firm Icap as tenants in Tower 2.

Barclays is said to have agreed to lease about 100,000 sq ft or four floors in the tower, Icap is taking 35,000 sq ft and Pictet around 25,000 sq ft.

MBFC's Tower 2 will have nearly one million sq ft of net lettable area (NLA).

The 33-storey Tower 1, also in the development's first phase, has about 600,000 sq ft of NLA and is fully leased, mostly to Standard Chartered, which is taking 508,298 sq ft.

Smaller tenants in that tower include French corporate and investment bank Natixis, which is taking 65,000 sq ft, and Wellington International Management Co (21,000 sq ft).

DBS has leased about 700,000 sq ft in MBFC's Tower 3 - which will be in the project's second phase and slated for completion by early 2012.

Office leasing interest in Singapore since the start of the year does not seem to have been dented by sub-prime writedowns that have struck international banks. 'Most banks still see Asia as a bright spot and will continue to invest in Asia,' an executive with a major office landlord told BT.

CB Richard Ellis executive director (office services) Moray Armstrong, whose firm is the leasing agent for MBFC's office space, declined to be drawn into speculating about the latest tenants at MBFC, when contacted by BT.

However, he said, there is a 'healthy level of active leasing negotiations going on and further announcements are expected within the next three months'.

'Generally, too, leasing momentum in the Singapore office market has carried forward from 2007. There has been relatively minor impact arising out of the external sub-prime crisis. There's still plenty of activity and leasing negotiations in motion,' he said.

CBRE data show that Grade A office rents in Singapore rose 96.5 per cent last year to hit $17.15 psf a month.

'We expect a more modest rate of rental growth in the order of 15 to 20 per cent this year. Upside remains because of the severe shortage of available office space. But because rents have moved up so sharply, a more modest pace of growth is likely, combined with greater caution among occupiers, which is understandable. These twin factors will contribute to more moderate rental growth.'

American Express International Inc currently has operations at The Concourse while American Express Bank has operations at Hitachi Tower.

Maybank's Home Loan Rate Cut Sets Cat Among Pigeons

Source : The Business Times, February 19, 2008

Analysts divided on whether this will signal undercutting among the banks

Maybank has fired a salvo that could shake up the home loan market here by slashing its rates. This has led to speculation that banks might start to undercut each other to drum up business. Meanwhile, the banks themselves are adopting a cautious stance in a falling interest rate environment that could change direction.



















For a three-week period, Maybank is launching a promotional three-year fixed rate home loan package which is the lowest of all the banks surveyed.

Home-owners pay 1.68 per cent per annum for the first year, 2.68 per cent pa for second year and 3.38 per cent pa for the third year. The rates apply to both HDB and private home loans. Homeowners are subject to a three-year lock-in period and fees will apply in case of early redemption, prepayment and cancellation during that time.

Before this promotion, the Qualifying Full Bank's rates stood at 3.58 per cent pa for all three years. Maybank's new first-year interest rate is about 40 per cent lower than similar packages being offered in the market (see table). But it has a lock-in period of three years while other banks generally have a two-year lock-in.

Helen Neo, head, consumer banking, Maybank Singapore, explained that interbank rates have softened over the past few months. 'However, we expect interest rates to rebound in view of rising inflation in Singapore,' she said. 'Against a backdrop of potential rising interest rates, home loan customers who take up this fixed rate package will enjoy the prevailing low rates and are protected from future interest rate increases for the next three years.'

Mortgage rates are affected by the Singapore interbank offer rate (Sibor) - the rate at which banks lend to one another. Sibor has been on a downward trajectory since late last year, after hovering around 2.5 per cent.

Yesterday, the three-month Sibor fell to 1.44 per cent, its lowest level since December 2004. Economists say it is expected to go even lower by mid-year, partly due to the US steadily cutting its key interest rate. Sibor takes its cue from interest rates in the US, and last month the US Federal Reserve slashed its key interest rate from 4.25 per cent to 3.5 per cent, and then to 3 per cent.

Maybank's move to reduce rates is prompting speculation among mortgage consultants that banks could follow suit with foreign banks leading the way. 'I'm not surprised that this round of interest rate reductions is led by foreign banks again,' said Dennis Ng, spokesman for Mortgage Consultancy Portal www.HousingLoanSG. com. 'From past experience, local banks have typically lagged behind foreign banks in adjusting interest rates down.' This is because the three local banks have the lion's share of the housing loan market. 'If they reduce interest rates, they have more to lose,' said Mr Ng. While cutting rates would let them gain some more business, the advantage would be neutralised if their existing clients start paying lower rates.

But with Sibor falling, other banks could follow suit in lowering their interest rates, Mr Ng said. The last time banks were seen aggressively undercutting each other on rates was in 2003-2004, where foreign banks actively led the charge in introducing lower rates.

Leong Sze Hian, president of the Society of Financial Service Professionals, agreed that banks would be nudged into lowering their rates. 'Sibor rates are dropping and once Maybank lowers its rates, everyone will follow, otherwise customers will move,' he said.

However, consultants like Tang Yin Fong, a mortgage advisor at wealth and investment outfit Providend, said local banks already have Sibor-linked packages which track the movement of Sibor, and do not need to lower rates to be competitive.

'Such packages have been relatively attractive in the current lowered Sibor environment and have since been the main packages that the banks recommend to homeowners,' she explained.

She also added that in the current situation where the Singapore property market still seems to be on the rise and more homeowners are seeking mortgage loans, banks may be less willing to lower their interest rates.

Meanwhile, DBS Bank said it has 'no plans to adjust rates' for now, while OCBC and United Overseas Bank both said they would monitor the situation before making a decision.

Foreign banks Citibank and Standard Chartered shied away from saying if they will review rates but pointed to their Sibor packages, which they say give customers control in repricing loan packages. Stuart Kamp, head of mortgages, Standard Chartered Bank, added, 'We expect interest rates to trend down over the coming months.'