Landmark Tower Goes En Bloc Again, At Lower Price Tag

Source : The Business Times, March 26, 2008

LANDMARK Tower, a 99-year leasehold residential site in Chin Swee Road, is up for collective sale again - this time with a lower asking price.

Landmark Tower: The 60,821 sq ft site in Chin Swee Road can accommodate a high-rise condo of 220 units

The property was first put on the market in July last year with an indicative price of about $300 million - but there were no takers.

That price worked out to $1,471 per sq ft per plot ratio (psf ppr), including a charge to top up the site’s remaining tenure to 99 years.

This time, the sellers are asking $270 million, which works out to $1,324 psf ppr, including a $28 million charge to top up the tenure.

No development charge is payable.

The 60,821 sq ft site has a 3.7 plot ratio that would give a developer a total gross floor area of 225,038 sq ft to play with.

‘The successful buyer can redevelop the site to accommodate a high-rise condominium development comprising 220 apartment units of about 1,000 sq ft each,’ said Ho Eng Joo, executive director of investment sales at Colliers International, which is conducting a public tender for the project.

‘With the recent success seen for the sale of state land, we are optimistic that this site - given its strategic location - will be highly attractive to developers and investors who are looking to secure a prime site on the fringe of the central business district,’ he said.

If the asking price is met, owners will get an en-bloc premium of about 70 per cent, Mr Ho said.

Landmark Tower is now a 38-storey residential development comprising 139 apartment and penthouse units.

The tender closes on April 15 at 3pm.

Bt Panjang, Jurong West Sites Go On Reserve List

Source : The Business Times, March 26, 2008

HDB has released two land parcels under the government’s reserve list system - a condominium site at Bukit Panjang and an executive condominium (EC) parcel at Jurong West.

The 99-year leasehold Bukit Panjang site in Chestnut Avenue is thought to be the more attractive of the two.

The parcel is 244,300 sq ft and has a 2.1 plot ratio - yielding a maximum gross floor area of 513,100 sq ft.

Ku Swee Yong, director of marketing and business development at Savills Singapore, estimates the site can fetch $190-$200 per sq ft per plot ratio (psf ppr) - which works out to $97.5-$102.6 million in all.

But Nicholas Mak, director of research and consultancy at Knight Frank, is more bullish - he estimates that price should be in the region of $220 to $280 psf ppr.

This works out to $112.9-$143.7 million in all.

‘Units in the proposed development will enjoy views of Cheng Hua Garden and the Lower Peirce Reservoir,’ Mr Mak said.

Units can fetch average prices of $720-$750 psf, he said.

Both analysts said 400-450 units could come up on the site.

Elsewhere, the EC site in Jurong West Street 42 has an area of some 183,000 sq ft and a 3.0 plot ratio - giving it a maximum gross floor area of 549,000 sq ft.

For this site, Mr Ku expects $125-130 psf ppr.

Mr Mak, on the other hand, estimates the price will be in the region of $120 to $160 psf ppr.

He said the site is expected to attract fewer than five bids if put up for tender.

About 420-500 flats can be built on the site.

Both plots are offered through the reserve list system, under which a site is only offered for public tender if the government receives an application with a committed bid at a price deemed acceptable.

‘It is good that the two sites are being offered under the reserve list,’ Mr Ku said.

‘In today’s uncertain market, this lets developers who are looking to build up their landbanks trigger the sites, rather than selling at a time when the market response might be poor.’ he said.

MCL Tops Bids At $213.5m For Yishun 99-Yr Condo Site

Source : The Business Times, March 26, 2008

Offer of $350 psf per plot ratio is 68% above the next highest bid

MCL Land yesterday offered almost 70 per cent more than its closest rival in a state tender for a 99-year condominium site at Yishun fronting Lower Seletar Reservoir and close to Singapore Orchid Country Club/Golf Course.

The Hongkong Land subsidiary placed the highest of five bids the site drew. Its price of $213.5 million - or about $350 per sq ft of potential gross floor area - was 68 per cent higher than the next highest offer, of $127 million or $208 psf per plot ratio by Peak Properties unit Peak Green. Peak Properties is controlled by the Wee family.

The tender drew three other bids - from Frasers Centrepoint ($109.66 million or $180 psf ppr), Sim Lian Land ($92.6 million or $152 psf ppr), and Cheung Kong Holdings unit Billion Rise, which placed what some market watchers termed a cheeky bid of $57.74 million or just $95 psf ppr.

Asked how he felt about offering such a steep premium for the plot, MCL Land’s CEO Koh Teck Chuan said: ‘I bid at a price I’m comfortable with. I’m confident of making money on this project.’

The breakeven cost for a new condo development on the site will be about $680 psf, and MCL Land’s bid model assumed an average selling price of $750-800 psf, he added.

The group plans a 480-500 unit condo development 15-16 storeys high. ‘Because the site has a long frontage along the reservoir, we can design the project in such a way that almost every unit will face the reservoir,’ Mr Koh said.

‘We’ve studied the site. I climbed up the nearest HDB block and the view was breath-taking. I saw unobstructed views of the reservoir and greenery.

‘And the site is within walking distance of Khatib MRT Station. This is a nice suburban housing location.’

Mr Koh pointed out that developers have adopted divergent strategies at state tenders lately. ‘Some are using the current lull to fish for bargains, while those who need to replenish their landbanks tend to bid at closer to market prices,’ he said.

MCL currently does not have any 99-year leasehold residential sites in its landbank, although it has a string of freehold residential projects it hopes to launch this year or next year. These are in locations like Holland Hill (in a joint venture with Ho Bee), Balmeg Hill in the Pasir Panjang area, Upper Serangoon Road, Boon Teck Road in the Balestier vicinity, Ewe Boon Road, Sixth Avenue and Seletar Hills.

CB Richard Ellis executive director Li Hiaw Ho said the ‘fairly robust response’ of five bids at yesterday’s tender from major and mid-size developers signals ‘developers’ confidence in the suburban segment despite the current lukewarm response to new projects’.

Demand for the new condo on the plot at Yishun Avenue 1/2 is likely to come from HDB upgraders and those working in the northern part of Singapore, he added.

Confluence Of Factors Feeding Inflation

Source : The Business Times, March 26, 2008

FOR the first time in five months, Singapore’s inflation rate hasn’t surged to a new peak - though, at 6.5 per cent, the February rise in the consumer price index (CPI) is close on the heels of January’s 26-year high of 6.6 per cent. And if not for the September 2007 ‘aberration’, the string of rising inflation numbers every month would stretch back to last July, when the CPI first leapt, mainly because of a two-point jump in the Goods and Services Tax (GST) effective that month.

Still, even with the CPI hitting new heights in the past eight months, the Ministry of Trade and Industry (MTI) maintains that the underlying inflation momentum has been fairly stable over the period. The basis of its contention: not just the raw month-on-month change in the CPI (the February figure, for instance, measured against the preceding January’s) but a smoothed-out three-month moving average (3MMA) of the measure. By this 3MMA, ‘inflation’ picked up in the middle of 2007 and has stayed at around 0.8 per cent since, MTI points out. The underlying inflation momentum is expected to decline during the course of the year, it adds, and inflation for 2008 is forecast at between 4.5 per cent and 5.5 per cent. It’s the second such statement (in two months) of ‘assurance’, as it were, about stable inflation from MTI. While MTI chooses to focus on the month-on-month measure, just about everyone else looks at the inflation rate as it is commonly measured worldwide: the year-on-year percentage change in the CPI

By this measure, there is no question that Singapore’s inflation rate has risen since the middle of 2007 - largely because of global inflationary forces, which are also expected to nudge up the CPI rate a bit more, and keep it elevated for a while. After soaring for months, commodities prices appear, for now, to be taking a little breather. But the latest projections from the United Nations’ Food and Agriculture Organisation indicate that consumers face at least 10 years of more expensive food. A confluence of forces - freak weather, rising demand in Asia, not least high oil prices that raise the cost of every part of the food processing chain - will drive up grain prices ‘for many more years to come’, the FAO says. With the Sing dollar already at an all-time high against the greenback, there could be little room left in Singapore’s only policy tool to rein in imported prices. What is within better control are domestic sources of inflation - which the policymakers must keep close tabs on. Untimely, if not unwarranted, increases in various government fees, service charges or other costs will certainly not help. Neither will a wage spiral fed on expectations of higher pay as consumers feel the strain on their pockets. Maintaining a liberal approach towards the entry of foreign labour and skills will help ease market tightness and nip in the bud any risk of wage inflation. Rather than hope to talk inflation away, Singapore is more than able to deal with the challenges it poses.

High Court Rejects Airview Towers’ Collective Sale

Source : The Straits Times, Mar 26, 2008

A SINGLE home owner has managed to persuade the High Court to reject the $202 million collective sale of Airview Towers in the River Valley area.

The sole objector, Mr Ken Lee, 52, a business consultant, pulled off the victory by representing himself in court against the might of top Singapore law firm Harry Elias Partnership.

The High Court upheld a decision of the Strata Titles Board (STB) last October to throw out the sale application as the minimum 80 per cent approval had not been met in the required time.

Mr Lee said the case showed that the system is fair and considers the views of minority owners.

Bukit Sembawang Estates was the prospective buyer. Unit owners would have reaped about $2 million each.

The court case centred on just two out of the 100 units at Airview Towers, which made the crucial difference between the approval level rising above or falling below 80 per cent.

These two new owners had bought their units during the collective sale process from owners who had signed the agreement - but the new owners failed to sign the agreement in time.

Justice Lee Seiu Kin, in a judgment dated March 19, concluded that the two flats should not be counted. The owners of the two units, whose signatures were originally counted as part of the 80 per cent had, in effect, not signed in time, he said.

That meant the condo did not meet the minimum requirement for the sale to go ahead of 80 per cent of share values within 12 months of the first signature.

As a result, he threw out the appeal against STB’s dismissal of the sale application.

He said the 12-month timeline for the 80 per cent minimum requirement is a ’substantive’ condition put in place by the legislature to protect the legitimate rights of the minority.

The plaintiffs, three owners, argued that the owners of the pivotal two units agreed all along to the sale. Their failure to sign was due to ‘mistake or inadvertence’ and so was a technicality.

But the judge ruled that non-compliance with the timeline is not a mere technicality.

He said safeguards were built into the Land Titles (Strata) Act, allowing for the consideration of all objections of minority owners, and other factors. ‘Timing is important because the longer the process is dragged out, the greater the likelihood that market conditions will change.’

Numerous owners agreed to the sale after the 12-month period. Mr Lee said he objected only over concerns that the sale process was not being done properly - which was some time last June after he had rushed out to buy a replacement unit.

‘I had nine objections but only one was found necessary to halt the sale,’ said Mr Lee.

He added: ‘I respect the majority’s wish to sell, but they should be mindful of the minority’s rights to their homes.

‘That means they have to sell it at a proper en bloc price and do it properly and legally.’

An owner who signed the agreement after the estate’s sale tender was launched said he is ‘very happy’ it did not go through.

‘I was misled into signing the (agreement). I was told they had launched the tender and 80 per cent have signed,’ said Mr Foo Feng Yin, 54.

‘I am very grateful to Mr Lee as I feel that the sale wasn’t done in a transparent manner. The proceeds are also not enough for me to find a replacement unit in the same area.’

Listed Bukit Sembawang won the tender last April. It was planning a 36-storey condo on the site and an adjacent site, Chez Bright Apartment, that it bought in an en bloc sale in 2006. It could not be reached for comment yesterday.

Property consultants said the firm is unlikely to take the case further.

‘Chez Bright can be developed into a small upmarket development,’ said Savills Residential director Ku Swee Yong

‘Given today’s tighter credit terms and slower pace of sales, this decision is probably a positive for Bukit Sembawang.’

GIC, Host Hotels In Property Venture

Source : The Straits Times, Mar 26, 2008

THE Government of Singapore Investment Corporation (GIC) has teamed up with a New York-listed real estate investment trust to invest up to $2US billion ($2S.8 billion) in Asian and Australian property.

The Singapore firm’s real estate arm and Host Hotels & Resorts, one of the world’s largest owners of luxury hotels, have set up a joint venture with an initial investment of up to $600US million. This, combined with anticipated leverage, will provide total investment potential of at least $1US.5 billion.

Host, which will provide fund management services to the venture, will own a 25 per cent stake while GIC will hold the remaining 75 per cent.

GIC Real Estate president Seek Ngee Huat said the combination of ‘Host’s core skills in hospitality investment and asset management, and GIC’s regional presence and network’ would serve the venture well.

This places it in a good position to ‘build up a substantial portfolio of hospitality related assets in Asia’.

GIC Real Estate, one of the world’s top 10 real estate investment firms, has a multi-billion-dollar portfolio in more than 200 property-related investments across 30 countries, according to the statement announcing the venture.

Last month, GIC reportedly paid about 80 billion yen ($1S.1 billion) for the 438-room Westin Tokyo hotel, and in January, it announced a joint venture to develop a residential township near Moscow.

Housing Subsidies Only For Citizens And PRs

Source : The Straits Times, Mar 26, 2008

I REFER to the letter, ‘Include non-citizens in fiance scheme’ by Mr Ang Kin Leong (March 12).

Singapore’s public housing is intended to meet the housing needs of citizen households. Under the Fiance-Fiancee Scheme, citizen couples can apply to purchase a new HDB flat prior to their marriage. They will only have to produce their marriage certificate within three months after taking possession of their flat.

We recognise that some citizens may wish to marry and form a family unit with non-citizens.

For such households, they are treated as citizen households if the fiancee is a Singapore Permanent Resident (SPR), and they can purchase a subsidised new flat under the Fiance-Fiancee Scheme as well.

However, HDB is unable to extend the Fiance-Fiancee Scheme to citizens if their fiance or fiancee do not have at least SPR status. This is to ensure that our limited housing subsidies are judiciously disbursed to households that have demonstrated their commitment to settle down in Singapore.

We wish to highlight that citizens who marry foreigners can purchase a resale HDB flat under the Non-Citizen Spouse Scheme. If the citizen spouse is a first-timer, he can apply to enjoy the Singles Grant. Such households can apply for a top-up grant to receive the full CPF Housing Grant when the foreigner spouse obtains SPR status.

We thank Mr Ang for his feedback.

Leong Chok Keh
Deputy Director (Policy & Property)for Director (Estate Administration & Property)Housing & Development Board

Hotel Room Rates Hit Record High For Second Month

Source : The Straits Times, Mar 26, 2008

Average room rate $256, up by 8% from January, driven by boom in visitor arrivals

HOTEL room rates in Singapore have registered an all-time high for the second consecutive month, driven by a record number of visitors.

Average room prices last month shot up to $256 per night, some 8 per cent higher than January's record of $237, according to figures released by the Singapore Tourism Board (STB) yesterday.

The average price is higher than the latest tally available for Hong Kong, which pegged rates in the territory at $222 in January.

While Singapore is still nowhere near cities like New York, Mumbai and London, industry watchers believe a booming tourism sector could push the average room price above $300 within the year.

'The psychological barrier now is $300 and I think that will be broken during the Formula One Grand Prix period,' said Dr Donald Han, managing director of property consultancy Cushman & Wakefield. 'But that kind of price cannot be sustained in the long term.'

For hoteliers like Crowne Plaza Changi general manager Mark Winterton, the latest spike is 'fantastic news'.

Last month, 811,000 visitors entered Singapore, a record for February, according to STB statistics. The charge was led by Indonesians (125,000), Chinese (121,000), Australians (52,000), British (51,000) and Malaysians (50,000).

The boom helped room revenues for all of Singapore to reach an estimated $174 million in February, a 43.5 per cent jump from the same month last year.

The rate spurt has not been confined to exclusive hotels such as the Ritz-Carlton Millenia or Fullerton. Even three-star properties like Windsor Hotel in MacPherson Road say they are doing a roaring business.

Boutique hotel Link Hotel in Tiong Bahru has been operating for barely five months and is already more than 80 per cent full on most nights.

Its general manager George Chen said: 'New hotels generally have problem filling up their rooms. But demand in Singapore is so strong that there is no such issue.'

Although rising room rates are a good thing, Mr Winterton, whose hotel in Changi Airport Terminal 3 opens in May, had a cautionary word about the increases.

'We must not get too greedy and start pricing ourselves out of the market.'


GOING UP AND UP

'The psychological barrier now is $300 and I think that will be broken during the Formula One Grand Prix period.'

DR DONALD HAN, managing director of property consultancy Cushman & Wakefield

Yishun Condo Site Draws Record Bid Of $213.5m

Source : The Straits Times, Mar 26, 2008

MCL Land's offer for 99-year plot almost 70 per cent higher than the next bid

A YISHUN condominium site drew a higher-than-expected top bid when its tender closed yesterday, belying expectations of a property market slide.

Developer MCL Land offered $213.5 million for the 99-year leasehold plot, which works out to about $350 per sq ft per plot ratio (psf ppr) - believed to be a new benchmark for Yishun.

Property consultants said this could translate into the finished project selling at record prices for the area, even as home buyers are now holding out for lower prices in a subdued market.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, estimated that the end units for the Yishun project could be priced from $830 psf up to almost $900 psf.

This would be almost double what the 99-year leasehold Orchid Park Condo down the road is fetching. Four units at the 14-year-old development have been sold there this year at an average price of $460 psf.

MCL Land's bid pipped four others and came in almost 70 per cent higher than the next bid, from Peak Green, at $127 million, or $208 psf ppr.

Frasers Centrepoint, Sim Lian and Hong Kong's Cheung Kong also tabled offers ranging from $57.7 million to $109.7 million, or $95 to $180 psf ppr - which some consultants said were 'unrealistically low' bids. They had predicted bids of between $200 and $300 psf ppr.

But Mr Li Hiaw Ho, executive director of CBRE Research, said the response was 'fairly robust' and signalled 'developers' confidence in the suburban segment despite the current lukewarm response to new projects'.

'Should the United States enter a mild recession and the sub-prime problems clear up, sentiment for suburban homes should improve after June, bringing demand and upward price momentum back to the market.'

Experts described MCL Land's offer as 'extremely bullish' and suggested that the developer may be short on land bank in the mass market segment.

MCL Land said in its latest financial results that it bought some sites last year, including Holland Hill Mansions and Dynasty Court Garden 1 in Sixth Avenue. Its land bank can now yield 780 units with a total gross floor area of 1.4 million sq ft.

The Yishun site is at the corner of Yishun Avenues 1 and 2, and is 10 minutes' walk from Khatib MRT Station. It is next to Yishun Stadium and overlooks Lower Seletar Reservoir.

'The site is good in that frontage to the reservoir is fantastic,' said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore. 'I agree you should pay a premium for this site, but this seems to be a very significant premium.'

Separately, HDB yesterday put two more sites up for sale through its reserve list system.

One is a 182,986 sq ft plot at Jurong West Street 42 for executive condos, while the other is a 244,341 sq ft condo site at Chestnut Avenue in Bukit Panjang.

_______________________________________________________

HIGH BID = HIGH HOME PRICES?

Property consultants said the higher-than-expected offer by MCL Land could translate into the finished project selling at record prices for Yishun, even as home buyers are now holding out for lower prices in a subdued market.

Creative Selling S'pore Building For $250m

Source : The Business Times, March 25, 2008

It expects $200m gain from sale, but warns of Q3 operating loss

CREATIVE Technology could get a bumper cash infusion this June. The company said yesterday it has entered into an agreement with a buyer to sell and lease back its 11-year-old Singapore office building at International Business Park.

The sale price for the proposed transaction is $250 million. Creative will lease back the whole building for five years with an option for additional periods of three and two years, the company said in a statement, without disclosing the identity of the buyer.

Creative said it expects to make a gain of about $200 million from the transaction. It said that in accordance with US accounting standards, this amount will be treated as a deferred gain and will be amortised and recognised in the company's income statements over the lease term of five years.

The deal, which is subject to regulatory and shareholder approval, is expected to be completed by end-June.

Creative has owned its flagship Singapore building - called Creative Resource - since it was completed in 1997. The MP3 player and PC sound card specialist moved into the building from its Ayer Rajah Industrial Estate premises that year.

Creative Resource houses the company's headquarters operations and subsidiaries in Singapore.

In another announcement yesterday, Creative said its third-quarter revenue will be 'below target'.

For its fiscal Q3 that ends on March 31, it expects a revenue of about US$150 million. Revenue in the same quarter last year was US$183.8 million.

As well, operating expenses in Q3 will be higher than the company had forecast. This is mainly due to currency exchange rates, it said.

Creative expects to report an operating loss for the quarter.

However, the company - which this year started selling subscription-based video-conferencing services - is still expecting overall profitability in the period. An investment gain of about US$20 million is expected to boost its bottom line in Q3.

Creative has posted successive profitable quarters for the year so far. In 2007 it posted revenue of US$914.9 million and net income of US$28.2 million, aided by a US$100 million paid-up licence from MP3 market leader Apple Inc.

Singapore Inflation Stays At 26-Year High

Source : The Straits Times, Mar 25, 2008

Prices jump 6.5%, driven by higher food, transport and housing costs

CONSUMER prices surged 6.5 per cent last month from a year ago, continuing a rate of increase not seen in 26 years.

Food, transport and housing costs were again the main drivers as a confluence of external and internal factors kept last month’s inflation at just a shade off January’s 6.6 per cent.

The figure - released by the Department of Statistics yesterday - was broadly within market expectations. A Bloomberg News poll of 17 economists tipped a rate of 6.8 per cent.

Experts said rising prices will persuade the Monetary Authority of Singapore (MAS) to keep its policy of allowing the local currency to strengthen, to help fight off higher prices of imported goods.

But there is less consensus as to whether the central bank will get more aggressive when it holds its scheduled review next month. Any tightening of monetary policy will hurt an already slowing economy.

‘February’s consumer price index moderated a touch but still stayed elevated,’ said Goldman Sachs economists Mark Tan and Michael Buchanan, who expect inflation to peak at around 7 per cent in the first half of the year.

Prices of meat and poultry, cooking oils and dairy products clocked double-digit gains, while rice, cereal and fruit cost almost 10 per cent more than they did last year.

High oil prices also made themselves felt in electricity bills and at petrol pumps.

Indeed, transport costs jumped 9.6 per cent, boosted also by higher taxi fares and car prices.

Housing costs surged the most at 8.8 per cent. But this was mostly a pass-on effect from January’s one-off revision in annual home values.

Health-care costs rose 7.4 per cent from higher hospitalisation fees and medical consultation charges - and also as Chinese herbs became costlier.

Standard Chartered Bank economist Alvin Liew said sustained increases in this area are of concern, especially as the population gets older.

He noted that the sector is especially dependent on foreign nurses. Competition for these workers and the rising currencies of their home countries may be driving up wage costs in Singapore.

The statistics department also highlighted foreign maid salaries, holidays, cable subscriptions and cigarettes as other significant sources of inflation.

The Trade and Industry Ministry issued an accompanying statement yesterday, saying the ‘underlying momentum in inflation remained stable’. It expects this to decline ‘during the year’ and is retaining its forecast of 4.5 to 5.5 per cent for annual inflation.

Still, Mr Tan and Mr Buchanan believe the MAS will move next month to allow for a faster appreciation of the Singapore dollar.

‘Slowing growth is an obstacle…but in our view, the easing in fiscal settings revealed in the 2008 Budget and low interest rates will provide a buffer to growth,’ they said.

But Citigroup economist Kit Wei Zheng reckons the MAS will stay put as growth concerns take precedence.

He raised his full-year inflation forecast to 5.4 per cent, ahead of the latest data. But he also slashed his economic growth estimate to 4.7 per cent, from 5.2 per cent, citing worsening United States conditions.

Resale Flats: New Checklist

Source : TODAY, Tuesday, March 25, 2008

From May, agents must apprise buyers, sellers of HDB policies

MORE transparency and fewer disputes - these are the twin aims of a new checklist that housing agents will have to go through with buyers and sellers before a HDB resale flat transaction can be completed.

Similar to what insurance agents have to do with their clients before sealing a policy, property agents will have to cover the key items of a resale flat transaction, such as the potential buyer’s liability to pay upgrading costs, if any.

The “resale checklist”, announced yesterday by the Housing and Development Board and which will take effect from May 1, is to ensure that buyers and sellers are aware of purchase and financing policies.

When asked if the move was to rein in errant agents, the HDB said there has been feedback and suggestions from the public that agents should highlight certain important points to their clients.

“It would also prevent situations whereby the resale transaction has to be cancelled or delayed due to miscommunication and ignorance about policies,” said an HDB spokes-person.

Industry players told Today the checklist might deter practices such as under-declaring or over-declaring flat prices so that either buyers or sellers can get cash in hand.

One of the checks is on giving accurate information. The penalties for giving false statements under the HDB Act are highlighted in a bright yellow box, which also lists stiffer penalties - of up to three years in jail - under another law for false statements in a statutory declaration, such as the checklist.

The HDB began preparations for the checklist last September after consultation with industry associations Singapore Accredited Estate Agencies, Singapore Institute of Surveyors and Valuers, and Institute of Estate Agents.

Real estate firms and their agents welcomed the news.

Said property agent Rohana Abdullah, who has encountered many buyers who are unaware of the many HDB rules and regulations: “Now, they will know whatever I do is because of regulation and not because I’m trying to make the deal difficult.”

Potential buyers also thought a checklist would be helpful, although some wondered if the additional paperwork would be an effective deterrent for errant practices.

HDB receives about 30,000 applications for resale flats annually and about 92 per cent of the cases engaged housing agents to guide them through the resale process.

Checklist Of Must-Dos For HDB Resale Flats

Source : The Straits Times, Mar 25, 2008

Housing agents will soon have to walk buyers and sellers through the rules before a deal

THE process of buying a resale HDB flat will soon become more stringent before a deal can be struck.

Buyers and sellers will have to sit down with the housing agent and go through a checklist that details all the dos and don’ts, financial ins and outs, and other rules that are involved in a sale.

The aim is to ensure everyone in the process knows what he is getting into, what his obligations are and that dodgy behaviour like under-declaring prices is illegal.

‘It would also prevent situations whereby the resale transaction has to be cancelled or delayed due to miscommunication and ignorance about policies,’ said an HDB spokesman yesterday.

Last year, about 2.5 per cent of resale applications registered, or about 750 cases, ended up being cancelled.

This may not seem substantial but it shows that there could be potential buyers and sellers who need more help.

Indeed, the HDB said yesterday that it started preparing the checklist last year, a process that included consultations with industry bodies such as the Institute of Estate Agents (IEA). It also had public feedback suggesting that agents should highlight certain points to their clients.

ERA Realty Network’s assistant vice-president, Mr Eugene Lim, agreed that there was a knowledge gap: ‘A lot of buyers and sellers are quite ignorant of the whole sale process.’

The mandatory checklist will kick in on May 1. Sellers will be taken through the list before they grant an Option to Purchase to a buyer.

An agent will advise them on their eligibility to sell and the need for accurate data on things such as price, and ensure that they understand what the Option to Purchase entails.

They might not realise, for example, that once they grant a buyer an option to purchase, they cannot revoke the offer within a 14-day period.

Agents will explain the checklist to buyers before they exercise the option to purchase, such as making sure they can service the loan.

Buyers intending to take out an HDB loan, for instance, must ensure they meet loan eligibility conditions and obtain an HDB loan eligibility letter.

Although the new checklist is not in response to the recent ‘magic dollars’ scam involving sellers reporting falsely low prices, PropNex chief executive Mohamed Ismail said it will help curb the practice. It will force agents to tell buyers and sellers that false price declarations and other scams are crimes.

Housing agents already have to declare that the sale price is the true one, which means they would be aware that the scams are illegal, said ERA’s Mr Lim.

Buyers or sellers who make false declarations also face fines and/or jail time.

Agents said problems arise when buyers and sellers deal with inexperienced agents unfamiliar with HDB policies and rules.

‘More than half of the agents here are already practising what is in the checklist,’ said Mr Ismail, who is also IEA’s first vice-president.

‘It is expected of any good agent. But in this industry, a lot of them come and go, especially in a good market. And …there are many policies involved.’

There are around 30,000 agents in Singapore and the industry is largely unregulated.

Mr Darrell Chua, 32, who bought a resale flat last year, welcomes the checklist: ‘It will help those who are not familiar with HDB rules but, hopefully, lazy agents won’t turn it into some routine list that they tick off without really checking.’

Agents will have to submit the completed checklist to HDB together with the resale application. Applications that do not meet the new requirement will be rejected.

The checklist is also available in Chinese, Malay and Tamil. Agents will have to indicate what language they used to explain the information.

Singapore’s Inflation Hits 6.5% In Feb

Source : The Business Times, March 25, 2008

The Consumer price index (CPI) rose 6.5 per cent in February from a year earlier - just shy of the 25-year high of 6.6 per cent reported in January - as the cost of housing, food, transport and communication increased, data released yesterday by the Department of Statistics (DOS) shows.

This prompted the Ministry of Trade and Industry to issue a second statement in two months saying that underlying inflation remains stable, as indicated by the three-month moving average (3MMA) CPI, which grew 0.8 per cent month- on-month in February.

It noted that 3MMA, which picked up in the middle of 2007, has stayed around 0.8 per cent since then.

‘The underlying inflation momentum is expected to decline during the course of the year,’ it said.

The ministry issued a similar statement in January when the CPI surged to a 25-year high.

Led by more expensive accommodation and electricity tariffs, the cost of housing jumped 8.8 per cent in February from a year earlier.

Food prices rose 6.7 per cent on the back of higher prices for cooked food, milk products, fresh poultry, fruit and bread.

Higher petrol prices, taxi fares and car prices drove costs of transport and communication by 7.6 per cent year on year.

On a month-on-month seasonally adjusted basis, the CPI rose 0.2 per cent in February from January. For the first two months of this year, the CPI increased 6.6 per cent from a year earlier.

Economists note that while an upside risk to the CPI remains, an expected easing in the second half of this year will allow the index to fall within the government’s official forecast of 4.5-5.5 per cent. Hence, monetary tightening by the Monetary Authority of Singapore in April is unlikely, they say.

‘Clearly, the downside risk to growth is probably greater now,’ said Citi economist Kit Wei Zheng. ‘With policy makers being aware of that, I think further tightening is not the way to go.’

Mr Kit said he expects the CPI to stay above 6 per cent in the first half of this year before moderating to around 4 per cent in the second half when the effect of the two percentage point hike in goods and services tax wanes and the high base of comparison for commodity prices in the second-half 2007 kicks in.

‘While the year-on-year figure looks rather daunting, exaggerated by the low base a year ago, we can take comfort that the rate of growth is stable or slowing,’ added CIMB-GK regional economist Song Seng Wun.

CIMB-GK is keeping its full-year CPI forecast the same as the government’s estimated range, while Citi recently raised its projection from 5 per cent to 5.4 per cent.

Across different income groups, the top 20 per cent of households have felt the most heat from the higher inflation climate, according to DOS’s household survey.

The CPI for the top 20 per cent income group rose more sharply, from 0.4 per cent in 2006 to 2.3 per cent in 2007 on the back of higher costs of holiday travel, car and petrol, which have relatively larger weightings in this group than the lower-income groups.

This compares with a 2 per cent year-on-year increase in the CPI for the lowest 20 per cent income group and middle income group, from 1.8 per cent and 1.1 per cent in 2006.

For the whole of last year, the inflation rate for general households - the central 90 per cent of households by expenditure - was 2.1 per cent compared with one per cent for 2006, as the cost of food, holiday travel, accommodation (rented and owner-occupied), university tuition fees, taxi fares and petrol rose. The CPI rise also reflected a one-off increase in GST in July last year.

DBS Expanding Its Operations In India

Source : Channel NewsAsia, 25 March 2008

Southeast Asia's largest bank by assets, DBS Group, is expanding its operations in India.

It has received the green light from Indian regulators to set up eight new branches in Bangalore, Chennai, Kolkata, Moradabad, Nasik, Pune, Salem and Surat.

These will add to DBS Bank's current two branches in New Delhi and Mumbai.

All eight branches are expected to be operational within a year.

DBS Bank in India offers a range of wholesale banking products and services to its corporate and SME customers.

These include corporate lending, treasury services, transaction services and M&A advisory.

The bank also provides wealth management services to the growing middle class in India.

The latest licences come just a week after DBS secured the green light to open a representative office in Hanoi, the capital of Vietnam.

Singapore-based DBS has been expanding aggressively outside of its key markets of Singapore and Hong Kong. - CNA/ms

Pacific Star Forms Munich Joint Venture For Property Investments In Asia, Europe

Source : Channel NewsAsia, 25 March 2008

Real estate investment house Pacific Star has formed a joint venture in Munich which will help investors park their funds in prime Asian and European properties.

Under the deal, Pacific Star Europe also launched its Asian funds distribution business with targeted assets under management of over US$2 billion.

These will focus on real estate in India, China, Northeast Asia and Southeast Asia.

Pacific Star Europe will also manage a Fund of Funds that invests in global real estate.

The joint venture links Pacific Star with two individuals Dr Matthias Sturmer and Dirk Grosse-Wordemann.

Under the deal, Pacific Star Fund Management Singapore will own 51 percent of the company while the two partners will hold the remaining 49 percent stake.

European institutional investors transacted an estimated US$2.2 billion worth of property deals in Asia in the first half of 2007, according to figures by Jones Lang LaSalle.

At the same time, Asian inflows into European real estate totalled US$3.5 billion. - CNA/ms

GIC Real Estate Forms Joint Venture With Host Hotels & Resorts

Source : Channel NewsAsia, 25 March 2008

GIC Real Estate has formed a joint venture with New York Stock Exchange-listed Host Hotels & Resorts to explore investment opportunities in Asia and Australia.

The partners have agreed to invest a maximum of US$600 million of equity in the joint venture.

Combined with the anticipated leverage, they will have a potential investment war chest of up to US$2 billion.

GIC will own 75 percent of the joint venture while Host will hold the remaining stake.

An affiliate of Host will provide asset management services and will earn fees for these services.

Host Hotels & Resorts has been described as the largest lodging real estate investment trust and one of the largest owners of luxury and upscale hotels.

GIC Real Estate is the real estate investment company of the Government of Singapore Investment Corporation. - CNA/ms

HDB Releases 2 Land Parcels Under Reserve List For Condominium Development

Source : Channel NewsAsia, 25 March 2008

The Housing and Development Board is releasing two parcels of land for condominium housing under the Reserve List of the Government Land Sales programme.

One of them, at Jurong West Street 42, is for executive condominium housing, while the other at Chestnut Avenue is for private apartments.

Among the two sites, the one at Chestnut Avenue is expected to get more attention from developers.

Analysts said this is because of its attractive location, compared to the site at Jurong West Street 42, which is some 1.2 kilometres away from the nearest train station.

The proposed condominium project at Chestnut Avenue could yield about 400 to 450 units, which will be sold at between S$720 and S$750 per square foot on average.

Nicholas Mak, Director, Knight Frank, said, "This particular parcel at Chestnut Avenue...I think the developers might want to make it not so much mass market, but they may make it slightly mass to mid market and they may play on the fact that it is quite near to a park, so they may try to sell on its greenery aspect."

The plot at Jurong West for executive condominium housing is projected to yield about 420 to 460 units.

Both sites, with lease terms of 99 years, are on the Reserve List. This means they will only be released for sale by tender if developers commit to a minimum bid acceptable to the HDB.

However, market watchers expect rising construction costs to put pressure on the land price.

Mr Mak said, "For the executive condominium site, we can expect bids ranging from S$120 to S$160 per square foot per plot ratio, while for the private 99-year leasehold site, we could see a range of bids of about S$220 to about S$270 per square foot per plot ratio."

The potential developments are unlikely to have any immediate impact on property prices in the surrounding areas until the units are ready to be launched.

Industry watchers said the demand from developers for the two land parcels will be soft and it will depend on whether they are able to sell their current stock of inventory.

In addition, the developers are also expected to take a wait-and-see approach when it comes to bidding for the two sites, as they are on the Reserve List.

Separately, the HDB also released the provisional tender results for a 99-year leasehold condominium site at the junction of Yishun Avenue 1 and 2.

MCL Land put in the highest of the five bids at over S$213 million, some 68 percent more than the next bid from Peak Green.

Analysts said the bid reflected the confidence of developers in the mass market in 2009.

They added that there is a potential for the building of 15- to 18-storey apartments at the site, which could be marketed at around S$800 per square foot. - CNA/ms

S'pore Hotel Room Rates Hit Record-High

Source : The Straits Times, Mar 25, 2008

HOTELS in Singapore have become more expensive than Hong Kong, with February's average room rates peaking at $256 - a record high.

This is an increase of 43.7 per cent over the rate a year ago, and is higher than Hong Kong's average room rate for January at HK$1,245 (S$221.60).

With the higher rate, Singapore hotels were estimated to report a 43.5 per cent increase in room revenue to S$174 million, said the Singapore Tourism Board on Tuesday.

Singapore hotels have been on a rising streak for the last two years with room rates picking up, a move cheered by hoteliers who long bemoaned that hotels here are under-priced.

But the average hotel occupancy for February fell to 79 per cent, down by 3.8 per cent from a year go and 7 per cent from last month's 85 per cent.

The higher room rates and occupancy were boosted by more foreign visitor arrivals, which rose 7 per cent in February from a year ago.

Singapore welcomed 811,000 visitors in February, compared with 758,000 a year earlier.

'This is a new record for visitor arrivals for the month of February,' said the STB.

The average length of stay increased at a faster pace, with visitor days rising 20 per cent from a year ago to 3.2 million days.

Leading the tourist packs were 125,000 Indonesians, 121,000 Chinese, 52,000 Australians, 51,000 British and 50,000 Malaysians. These markets accounted for 49 per cent of total visitor arrivals for the month.

And the number of Chinese tourists is the highest ever in a single month, pulling close to the Indonesians.

STB attributes the jump to travel promotions from China to Singapore, the Chinese New Year period which encouraged Chinese to travel abroad and more flights out of China.

Markets like Vietnam registered the biggest growth, rising by 43.2 per cent, followed by Australia (30.1 per cent) and South Korea (30 per cent).

This year, STB is banking on events like the Formula One Grand Prix race and attractions like Singapore Flyer open to draw in 10.8 million visitors and $15.5 billion in tourism dollars.