Source : The Business Times, August 5, 2008
(SYDNEY) Australian house prices fell in the second quarter for the first time in almost three years as the highest borrowing costs since 1996 deterred home buyers.
An index measuring the weighted average of prices for established houses in the nation's eight capital cities fell 0.3 per cent from the March quarter, when it rose a revised 0.4 per cent, the Australian Bureau of Statistics said in Sydney yesterday. The median estimate of 18 economists surveyed by Bloomberg News was for a 1.3 per cent drop.
Falling house prices support central bank governor Glenn Stevens' view that Australia's US$1 trillion economy will slow enough to cool inflation that has accelerated above his target range of 2 per cent to 3 per cent. Mr Stevens raised the benchmark borrowing cost to 7.25 per cent in March, the fourth increase since August last year.
'Property markets are losing steam and price growth is moderating in the face of high interest rates,' said Hayden Atkins, an economist at Macquarie Group Ltd in Sydney. 'But the rate of decline doesn't appear to be particularly alarming and is in stark contrast' to the US and the UK, he added.
Second-quarter house prices rose 8.2 per cent from a year earlier, the smallest gain in two years, after climbing a revised 13.2 per cent in the first quarter, yesterday's report showed. Economists forecast an 8 per cent increase.
The nation's five largest lenders, including Commonwealth Bank of Australia Ltd, have added an average 105 basis points to mortgage rates in 2008 as the global credit squeeze drove up funding costs. The central bank has added a total of 50 basis points this year.
The increases have added A$250 (S$320) to monthly payments on an average A$250,000 home loan, according to the Real Estate Institute. Households spent 38 per cent of their incomes on mortgage payments in the March quarter, the most in the 22 years the institute has measured affordability.
Second-quarter house prices dropped the most in Perth, declining 2.4 per cent from the previous quarter, followed by 2 per cent in Hobart, 1.4 per cent in Canberra and 0.3 per cent in Melbourne. Sydney gained 0.3 per cent, Adelaide 0.4 per cent, Brisbane 0.6 per cent and Darwin gained 1.9 per cent. -- Bloomberg
Tuesday, August 5, 2008
UK Construction Falls At Record Pace In July
Source : The Business Times, August 5, 2008
Little doubt that sector is now in recession: Global Insight economist
(LONDON) British construction activity fell at a record pace in July, a survey showed yesterday, as the credit crunch takes an increasing toll on the property market.
The Chartered Institute of Purchasing and Supply/Markit construction purchasing manager's index (PMI) fell to 36.7 last month - the weakest reading since the survey began in 1997 - from 38.8 in June. Any reading below 50 signals contraction.
The weak figures add to a growing raft of evidence pointing to a sharp economic downturn, with fears growing that Britain is about to enter its first recession - two consecutive quarters of contraction - since the early 1990s.
'There can therefore be little doubt that the construction sector is now firmly in recession,' said Howard Archer, an economist at Global Insight. 'The construction sector looks to be in for an extended, very difficult time. This reinforces our belief that the overall economy is more likely than not to contract in the second half of 2008.'
However, the Bank of England is not expected to cut interest rates for some time yet because inflation is running at 3.8 per cent, its highest rate in more than a decade and almost twice the central bank's 2 per cent target. The Bank will deliver its latest rates decision on Thursday.
The housing sub-index fell to a series low of 18.7 in July from 25.6, the eighth consecutive fall, the survey showed.
'Housing was again the sick man of the industry, as levels of activity plunged to a record low,' Roy Ayliffe of CIPS said. 'July marked an end to constructors' optimism about recovery, as spirits were knocked by the persistent and rapid decline in new business and activity.'
Housebuilders have been shedding thousands of jobs in recent weeks as mortgage approvals dive to record lows and house prices fall at rates not seen since the crash of the early 1990s.
'With workloads lower and cost pressures remaining intense, jobs in the sector were shed at the fastest rate in over 11 years of the survey's existence,' the report says.
The input price index came in at 79.0 in July, slightly down from 81.1 in June, but still indicating substantial increases in raw materials costs. -- Reuters
Little doubt that sector is now in recession: Global Insight economist
(LONDON) British construction activity fell at a record pace in July, a survey showed yesterday, as the credit crunch takes an increasing toll on the property market.
The Chartered Institute of Purchasing and Supply/Markit construction purchasing manager's index (PMI) fell to 36.7 last month - the weakest reading since the survey began in 1997 - from 38.8 in June. Any reading below 50 signals contraction.
The weak figures add to a growing raft of evidence pointing to a sharp economic downturn, with fears growing that Britain is about to enter its first recession - two consecutive quarters of contraction - since the early 1990s.
'There can therefore be little doubt that the construction sector is now firmly in recession,' said Howard Archer, an economist at Global Insight. 'The construction sector looks to be in for an extended, very difficult time. This reinforces our belief that the overall economy is more likely than not to contract in the second half of 2008.'
However, the Bank of England is not expected to cut interest rates for some time yet because inflation is running at 3.8 per cent, its highest rate in more than a decade and almost twice the central bank's 2 per cent target. The Bank will deliver its latest rates decision on Thursday.
The housing sub-index fell to a series low of 18.7 in July from 25.6, the eighth consecutive fall, the survey showed.
'Housing was again the sick man of the industry, as levels of activity plunged to a record low,' Roy Ayliffe of CIPS said. 'July marked an end to constructors' optimism about recovery, as spirits were knocked by the persistent and rapid decline in new business and activity.'
Housebuilders have been shedding thousands of jobs in recent weeks as mortgage approvals dive to record lows and house prices fall at rates not seen since the crash of the early 1990s.
'With workloads lower and cost pressures remaining intense, jobs in the sector were shed at the fastest rate in over 11 years of the survey's existence,' the report says.
The input price index came in at 79.0 in July, slightly down from 81.1 in June, but still indicating substantial increases in raw materials costs. -- Reuters
Land Lease Profit Falls 47% On UK Writedown
Source : The Business Times, August 5, 2008
(SYDNEY) Lend Lease Corp, the Australian developer that is building London's Olympic Village, said net income fell 47 per cent as the company wrote down its UK assets for a third straight year, driving its shares to the lowest since 2000.
Net income tumbled to A$265.4 million (S$339.7 million) in the 12 months to June 30, from A$497.5 million a year earlier, Sydney-based Lend Lease said yesterday in a statement to the Australian stock exchange. Operating profit may decline as much as 15 per cent this fiscal year from A$447.1 million.
UK house prices declined the most in almost two decades last month as the economy edged closer to a recession. Lend Lease, which took a A$121.5 million charge on concerns that it will have to slash prices to sell apartments in Great Britain, joins Mirvac Group and GPT Group in the past month as Australian property trusts slashed earnings in the wake of the US sub-prime collapse.
'The UK property market is in seriously dire straits,' said Chris Hall, who helps oversee the equivalent of US$3.7 billion at Adelaide-based Argo Investments, including Lend Lease stock. 'The property trust sector has priced in an awful lot of bad news. We're going to start seeing those fears crystallise.'
The average value of a home in the UK fell 8.1 per cent from a year earlier, the biggest decline since at least 1991, Nationwide Building Society, Britain's fourth-biggest mortgage lender, said last Thursday.
Lend Lease shares dropped A$1.34, or 13 per cent, to A$8.66 by the end of trade yesterday, its biggest one-day slide since Dec 21, 2000. The stock has slumped by half this year, cutting the company's market value to A$3.5 billion.
Lend Lease is committed to more than A$80 billion of construction projects worldwide.
About a third of its orders are in the UK, including the £pounds;4 billion (S$10.8 billion) athletes village for the 2012 Olympic Games in London, the £pounds;1.5 billion redevelopment of London's Elephant & Castle district and the Stratford City Project.
The company has set aside almost A$200 million this year, mostly tied to the weak British property market, including a A$121.5 million pretax charge on real estate held by the UK Communities unit and A$60.2 million on property values worldwide, mostly on declines in British shopping malls.
The writedowns were carried out 'in light of continuing difficult market conditions, which could see further pressure on residential sales prices and volumes', Lend Lease said.
The UK Communities charge is based on discounts Lend Lease estimates are needed to sell all the stock of British homebuilder Crosby Group plc, which it bought in July 2005 for A$612 million, the company's biggest acquisition since Greg Clarke became chief executive in December 2002.
It took charges on UK construction projects of A$37 million and A$120 million in the 2006 and 2007 fiscal years, respectively.
Mr Clarke said yesterday he was not confident of meeting the company's target of 10 per cent average annual earnings growth over every five-year period because of current market conditions. He had expanded in the UK, investing about A$850 million to A$900 million since May 2004 as Australia's residential market sagged.
The UK property market is not expected to recover before the end of next year, he said yesterday on a tele- conference call.
'This is a very hostile market,' he said. 'If the slump extends to 2012, that would make it unprecedented.'
Lend Lease is struggling to raise financing for its Olympic Village project and may need more government cash to avoid falling behind schedule, David Ross, an adviser to London City mayor Boris Johnson, said in a report on June 18.
The developer is building 3,300 apartments that will house 15,000 athletes and coaches during the Games. The company, which expects to have a financing deal in place by the end of the year, reiterated that it will meet the construction target yesterday.
There is still growth potential in the UK and Lend Lease needs to be a 'big player' in the market, Mr Clarke said. 'Downturns often create great opportunities.'
The company will pay a dividend of 34 Australian cents a share for the second half of fiscal 2008, down from 42 cents in the year-earlier period.
The company had A$800 million in cash on hand at the end of June. Lend Lease said that it has identified assets to be sold in the current fiscal year in yesterday's statement. -- Bloomberg
(SYDNEY) Lend Lease Corp, the Australian developer that is building London's Olympic Village, said net income fell 47 per cent as the company wrote down its UK assets for a third straight year, driving its shares to the lowest since 2000.
Net income tumbled to A$265.4 million (S$339.7 million) in the 12 months to June 30, from A$497.5 million a year earlier, Sydney-based Lend Lease said yesterday in a statement to the Australian stock exchange. Operating profit may decline as much as 15 per cent this fiscal year from A$447.1 million.
UK house prices declined the most in almost two decades last month as the economy edged closer to a recession. Lend Lease, which took a A$121.5 million charge on concerns that it will have to slash prices to sell apartments in Great Britain, joins Mirvac Group and GPT Group in the past month as Australian property trusts slashed earnings in the wake of the US sub-prime collapse.
'The UK property market is in seriously dire straits,' said Chris Hall, who helps oversee the equivalent of US$3.7 billion at Adelaide-based Argo Investments, including Lend Lease stock. 'The property trust sector has priced in an awful lot of bad news. We're going to start seeing those fears crystallise.'
The average value of a home in the UK fell 8.1 per cent from a year earlier, the biggest decline since at least 1991, Nationwide Building Society, Britain's fourth-biggest mortgage lender, said last Thursday.
Lend Lease shares dropped A$1.34, or 13 per cent, to A$8.66 by the end of trade yesterday, its biggest one-day slide since Dec 21, 2000. The stock has slumped by half this year, cutting the company's market value to A$3.5 billion.
Lend Lease is committed to more than A$80 billion of construction projects worldwide.
About a third of its orders are in the UK, including the £pounds;4 billion (S$10.8 billion) athletes village for the 2012 Olympic Games in London, the £pounds;1.5 billion redevelopment of London's Elephant & Castle district and the Stratford City Project.
The company has set aside almost A$200 million this year, mostly tied to the weak British property market, including a A$121.5 million pretax charge on real estate held by the UK Communities unit and A$60.2 million on property values worldwide, mostly on declines in British shopping malls.
The writedowns were carried out 'in light of continuing difficult market conditions, which could see further pressure on residential sales prices and volumes', Lend Lease said.
The UK Communities charge is based on discounts Lend Lease estimates are needed to sell all the stock of British homebuilder Crosby Group plc, which it bought in July 2005 for A$612 million, the company's biggest acquisition since Greg Clarke became chief executive in December 2002.
It took charges on UK construction projects of A$37 million and A$120 million in the 2006 and 2007 fiscal years, respectively.
Mr Clarke said yesterday he was not confident of meeting the company's target of 10 per cent average annual earnings growth over every five-year period because of current market conditions. He had expanded in the UK, investing about A$850 million to A$900 million since May 2004 as Australia's residential market sagged.
The UK property market is not expected to recover before the end of next year, he said yesterday on a tele- conference call.
'This is a very hostile market,' he said. 'If the slump extends to 2012, that would make it unprecedented.'
Lend Lease is struggling to raise financing for its Olympic Village project and may need more government cash to avoid falling behind schedule, David Ross, an adviser to London City mayor Boris Johnson, said in a report on June 18.
The developer is building 3,300 apartments that will house 15,000 athletes and coaches during the Games. The company, which expects to have a financing deal in place by the end of the year, reiterated that it will meet the construction target yesterday.
There is still growth potential in the UK and Lend Lease needs to be a 'big player' in the market, Mr Clarke said. 'Downturns often create great opportunities.'
The company will pay a dividend of 34 Australian cents a share for the second half of fiscal 2008, down from 42 cents in the year-earlier period.
The company had A$800 million in cash on hand at the end of June. Lend Lease said that it has identified assets to be sold in the current fiscal year in yesterday's statement. -- Bloomberg
Growth In Office Occupancy Costs Tapers Off In Q2
Source : The Business Times, August 5, 2008
Prime Raffles Place space up only 1.1% quarter on quarter: DTZ report
GROWTH in office occupancy costs in Singapore has started to taper off after the meteoric rise last year, reflecting the increased resistance to higher occupancy costs, according to a new report.
Small rise: Average occupancy cost of prime office space in Raffles Place grew only 1.1 per cent in Q22008
'Apart from Raffles Place, Shenton Way/ Robinson Road/Cecil Street and decentralised areas, growth in occupancy costs in other areas like Marina Centre and Orchard Road was flat in 2Q 2008,' said DTZ in its second-quarter office market brief.
Average occupancy cost of prime office space in Raffles Place grew only 1.1 per cent quarter on quarter to $19 per square foot per month (psf pm) in the second quarter of 2008.
In the Shenton Way/Robinson Road/Cecil Street area, the average office occupancy cost rose by 2.6 per cent quarter on quarter to $11.80 psf pm, while office buildings in HarbourFront enjoyed a higher growth of 5.3 per cent to $10 psf pm.
By contrast, in the first quarter of 2008, occupancy costs continued to rise amid a dearth of supply. Prime occupancy cost in Raffles Place gained 13.9 per cent quarter on quarter to $18.80 psf pm in the first quarter of 2008, for example.
'As more new supply come on stream, office occupancy is likely to ease and limit growth in occupancy costs in the CBD for the rest of 2008,' said DTZ, referring to the Central Business District.
However, the report also said that the cautious business outlook and companies gravitating towards cheaper premises like decentralised office buildings, industrial properties, business parks and disused state properties are putting a downward pressure on office occupancies.
Islandwide, average occupancy eased by 0.2 percentage point quarter on quarter to 96.9 per cent in Q2 2008.
As a result of occupiers moving out to cheaper locations after lease expiration, office occupancies in Raffles Place and Marina Centre dropped by 0.3 percentage point to 97.4 per cent and 1.2 percentage points to 98.6 per cent respectively.
But over in decentralised areas like Novena and HarbourFront, occupancy levels rose by 0.4 percentage point to 99.0 per cent and 1.1 percentage points to 98.7 per cent respectively, supported by lower occupancy costs.
DTZ also released its Q2 2008 office report for Kuala Lumpur yesterday.
Gross occupancy costs for prime buildings in the Malaysian city rose 3.9 per cent quarter on quarter to RM6.32 (S$2.65) psf pm in the second quarter of this year, the property firm said.
But despite this, financial institutions with presence in Singapore are considering locating call centres in Kuala Lumpur because of cost differential and special tax breaks, DTZ said in response to a query from BT.
Prime Raffles Place space up only 1.1% quarter on quarter: DTZ report
GROWTH in office occupancy costs in Singapore has started to taper off after the meteoric rise last year, reflecting the increased resistance to higher occupancy costs, according to a new report.
Small rise: Average occupancy cost of prime office space in Raffles Place grew only 1.1 per cent in Q22008'Apart from Raffles Place, Shenton Way/ Robinson Road/Cecil Street and decentralised areas, growth in occupancy costs in other areas like Marina Centre and Orchard Road was flat in 2Q 2008,' said DTZ in its second-quarter office market brief.
Average occupancy cost of prime office space in Raffles Place grew only 1.1 per cent quarter on quarter to $19 per square foot per month (psf pm) in the second quarter of 2008.
In the Shenton Way/Robinson Road/Cecil Street area, the average office occupancy cost rose by 2.6 per cent quarter on quarter to $11.80 psf pm, while office buildings in HarbourFront enjoyed a higher growth of 5.3 per cent to $10 psf pm.
By contrast, in the first quarter of 2008, occupancy costs continued to rise amid a dearth of supply. Prime occupancy cost in Raffles Place gained 13.9 per cent quarter on quarter to $18.80 psf pm in the first quarter of 2008, for example.
'As more new supply come on stream, office occupancy is likely to ease and limit growth in occupancy costs in the CBD for the rest of 2008,' said DTZ, referring to the Central Business District.
However, the report also said that the cautious business outlook and companies gravitating towards cheaper premises like decentralised office buildings, industrial properties, business parks and disused state properties are putting a downward pressure on office occupancies.
Islandwide, average occupancy eased by 0.2 percentage point quarter on quarter to 96.9 per cent in Q2 2008.
As a result of occupiers moving out to cheaper locations after lease expiration, office occupancies in Raffles Place and Marina Centre dropped by 0.3 percentage point to 97.4 per cent and 1.2 percentage points to 98.6 per cent respectively.
But over in decentralised areas like Novena and HarbourFront, occupancy levels rose by 0.4 percentage point to 99.0 per cent and 1.1 percentage points to 98.7 per cent respectively, supported by lower occupancy costs.
DTZ also released its Q2 2008 office report for Kuala Lumpur yesterday.
Gross occupancy costs for prime buildings in the Malaysian city rose 3.9 per cent quarter on quarter to RM6.32 (S$2.65) psf pm in the second quarter of this year, the property firm said.
But despite this, financial institutions with presence in Singapore are considering locating call centres in Kuala Lumpur because of cost differential and special tax breaks, DTZ said in response to a query from BT.
Competition Watchdog Wants Fees Guidelines For Property Agents Removed
Source : The Straits Times, Aug 5, 2008
THE Competition Commission of Singapore (CCS) on Tuesday asked the Institute of Estate Agents (IEA) to remove its fees guidelines for property agents, saying that they are anti-competitive.
The current fees structure set by the IEA has been in place since 1999 and serves as an industry-wide guidelines for agents.
It generally recommends a seller pays an estate agent 2 per cent of the contracted price as sales commission, and the buyer pays 1 per cent as service fee to agents for Housing Board properties.
The IEA has said that the guidelines are non-binding and agents are free to negotiate fees with their customers.
But the CCS said even if the recommendations are not binding, 'they will still provide a focal point for prices to converge.'
'This will dampen competition and facilitate price coordination,' it said in a statement on Tuesday.
'CCS further notes that the fees payable by property sellers are couched as a minimum fee recommendation in the Fees Guidelines. This practice discourages any price competition below the recommended rate.
'More efficient estate agents or agencies, which are able to charge lower rates, will have little incentive to do so.'
It advised estate agents or agencies to set their own fees.
Consumers are encouraged to compare fees and services offered by different estate agents or agencies, before making a decsion, it added.
'This will facilitate and encourage competition amongst estate agents and agencies,' said the CCS.
The latest development comes as the industry is moving towards self-regulation.
Reacting to the new move, which comes into effect on Sept 25, some property agents on Tuesday said it will lead to some marking up their fees, while others said it the rates will become more competitive.
THE Competition Commission of Singapore (CCS) on Tuesday asked the Institute of Estate Agents (IEA) to remove its fees guidelines for property agents, saying that they are anti-competitive.
The current fees structure set by the IEA has been in place since 1999 and serves as an industry-wide guidelines for agents.
It generally recommends a seller pays an estate agent 2 per cent of the contracted price as sales commission, and the buyer pays 1 per cent as service fee to agents for Housing Board properties.
The IEA has said that the guidelines are non-binding and agents are free to negotiate fees with their customers.
But the CCS said even if the recommendations are not binding, 'they will still provide a focal point for prices to converge.'
'This will dampen competition and facilitate price coordination,' it said in a statement on Tuesday.
'CCS further notes that the fees payable by property sellers are couched as a minimum fee recommendation in the Fees Guidelines. This practice discourages any price competition below the recommended rate.
'More efficient estate agents or agencies, which are able to charge lower rates, will have little incentive to do so.'
It advised estate agents or agencies to set their own fees.
Consumers are encouraged to compare fees and services offered by different estate agents or agencies, before making a decsion, it added.
'This will facilitate and encourage competition amongst estate agents and agencies,' said the CCS.
The latest development comes as the industry is moving towards self-regulation.
Reacting to the new move, which comes into effect on Sept 25, some property agents on Tuesday said it will lead to some marking up their fees, while others said it the rates will become more competitive.
Stalemate Threatens Thomson Collective Sale
Source : The Straits Times, Aug 5, 2008
KSH Holdings seeking more time to close property deal, say sources
THE collective sale of five small estates near Thomson Road seems to have hit the rocks, with the owners of 88 units set to walk away - taking the $12 million deposit with them.
ROADBLOCK: KSH reportedly had to delay the purchase as it had trouble acquiring from the SLA part of a road that divides one development from the other four.
Unlike in recently aborted sales, where the developers appeared to have changed their minds because of the property slide, this deal may likely become a victim of a three-way stalemate among the buyers, sellers and the Singapore Land Authority (SLA).
The deal was inked last November, when a unit of listed developer KSH Holdings signed up to buy Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui for $120 million.
It also paid a 10 per cent deposit.
The buyers, however, have failed to close the sale despite a two-month extension.
One owner, who declined to be named, told The Straits Times yesterday that KSH offered to stump up $3 million as additional deposit if the sellers would agree to a further three-month extension.
It is understood the sellers are considering the offer.
KSH declined to comment yesterday, but sources said the deal hit problems when the firm tried to buy a 1,000sq m section of a road from the SLA.
The land is needed so the five estates near Rangoon and Moulmein roads can be combined and developed into one large project.
This will give a land area of 74,355 sq ft and a gross floor area of 208,196 sq ft. It will allow a high-rise block with about 142 luxury flats each measuring 1,250 sq ft on average.
Industry sources told The Straits Times that the SLA had priced the land at $16 million - double what KSH and industry experts expected.
The property firm has appealed to the SLA to review the price.
The deal now seems to hinge on whether the sellers and buyers can reach an agreement.
The owners are said to be considering the offer and have requested a specific date when the sale can be completed from the buyers.
If no consensus is reached - and the sellers reject the $3 million sweetener - the deal will be off, but the flat owners will keep the $12 million deposit. That works out to about $136,000 on average for each of the 88 units.
If the deal goes through, on the other hand, each unit stands to receive between $906,856 and $1,908,491.
There has been a string of failed collective sales since sentiment in the property market turned sour.
Bravo Building Construction withdrew from a series of purchases earlier this year.
It forfeited deposits of $1.6million for Makeway View, $25.8 million for Tulip Garden and $12 million for Pender Court rather than go ahead with the deals.
Property giants Far East Organization and Frasers Centrepoint walked away from a $405 million deal to buy Tampines Court when the Strata Titles Board dismissed their sale application.
Analysts said the failed deals could be indicative of the wider credit crunch, with developers finding it difficult to find financiers to complete their purchases.
'Even if the developers can complete their projects, they will be wondering if they can achieve their desired prices in this market,' said Mr Colin Tan, the head of research and consultancy at Chesterton International.
Savills Singapore's director of business development and marketing, Mr Ku Swee Yong, agreed: 'Buyers face quite high levels of risk now to go ahead with projects inked at last year's prices.'
KSH Holdings seeking more time to close property deal, say sources
THE collective sale of five small estates near Thomson Road seems to have hit the rocks, with the owners of 88 units set to walk away - taking the $12 million deposit with them.
ROADBLOCK: KSH reportedly had to delay the purchase as it had trouble acquiring from the SLA part of a road that divides one development from the other four.Unlike in recently aborted sales, where the developers appeared to have changed their minds because of the property slide, this deal may likely become a victim of a three-way stalemate among the buyers, sellers and the Singapore Land Authority (SLA).
The deal was inked last November, when a unit of listed developer KSH Holdings signed up to buy Norfolk Court, Mergui Lodge, Northern Mansion, Mergui Court and The Mergui for $120 million.
It also paid a 10 per cent deposit.
The buyers, however, have failed to close the sale despite a two-month extension.
One owner, who declined to be named, told The Straits Times yesterday that KSH offered to stump up $3 million as additional deposit if the sellers would agree to a further three-month extension.
It is understood the sellers are considering the offer.
KSH declined to comment yesterday, but sources said the deal hit problems when the firm tried to buy a 1,000sq m section of a road from the SLA.
The land is needed so the five estates near Rangoon and Moulmein roads can be combined and developed into one large project.
This will give a land area of 74,355 sq ft and a gross floor area of 208,196 sq ft. It will allow a high-rise block with about 142 luxury flats each measuring 1,250 sq ft on average.
Industry sources told The Straits Times that the SLA had priced the land at $16 million - double what KSH and industry experts expected.
The property firm has appealed to the SLA to review the price.
The deal now seems to hinge on whether the sellers and buyers can reach an agreement.
The owners are said to be considering the offer and have requested a specific date when the sale can be completed from the buyers.
If no consensus is reached - and the sellers reject the $3 million sweetener - the deal will be off, but the flat owners will keep the $12 million deposit. That works out to about $136,000 on average for each of the 88 units.
If the deal goes through, on the other hand, each unit stands to receive between $906,856 and $1,908,491.
There has been a string of failed collective sales since sentiment in the property market turned sour.
Bravo Building Construction withdrew from a series of purchases earlier this year.
It forfeited deposits of $1.6million for Makeway View, $25.8 million for Tulip Garden and $12 million for Pender Court rather than go ahead with the deals.
Property giants Far East Organization and Frasers Centrepoint walked away from a $405 million deal to buy Tampines Court when the Strata Titles Board dismissed their sale application.
Analysts said the failed deals could be indicative of the wider credit crunch, with developers finding it difficult to find financiers to complete their purchases.
'Even if the developers can complete their projects, they will be wondering if they can achieve their desired prices in this market,' said Mr Colin Tan, the head of research and consultancy at Chesterton International.
Savills Singapore's director of business development and marketing, Mr Ku Swee Yong, agreed: 'Buyers face quite high levels of risk now to go ahead with projects inked at last year's prices.'
Tortured By Bloc Head Bullies
Source : The Electric New Paper, August 04, 2008
CONDO RESIDENTS WHO OPPOSE EN BLOC RECOUNT 'PINUSHMENT'
# PHONE LINE CUT
# MERC BADGE RIPPED OFF
# CARS SCRATCHED
# RUDE MESSAGE ON DOOR
ONE resident's Mercedes Benz badge was ripped off and stolen. Another had a poster plastered on his front door, with the words 'Trouble Maker' on it.
Yet another resident's telephone stopped working. And when he went outside to check, he discovered that someone had cut his phone line.
Flaming shame: A corosive liquid is splashed on the bonnet of this Lexus at Laguna Park condominium. Several cars in the estate had been damaged. All belong to owners who have not yet agreed to en bloc sale. file picture: The Straits Times
Say hello to a new form of neighbourly harassment that has reared its ugly head in several condominiums around Singapore, following the en-bloc fever that began last year.
Upset by some of their neighbours' refusal to endorse en-bloc deals, which could result in instant windfalls for some owners, these condo bullies resort to cowardly acts of vandalism to torment their neighbours.
As one aggrieved resident put it: 'This is really uncivilised behaviour.'
Last week, it was reported that at least six cars had been vandalised at Laguna Park since en-bloc discussions began. They all belonged to residents opposed to an en-bloc sale.
In the wake of the Laguna Park incidents, Singaporeans living in other private estates are coming forward with similar horror stories. At least two other condominiums have supposedly been hit by such bullies.
Some of its residents told The New Paper on Sunday of bullying acts - some uncivil, others plain criminal.
One such resident is Mr Tan Keng Ann, who owns an apartment at Green Lodge estate, a condominium along Toh Tuck Road.
Some of the 80 apartment owners there have been pushing for an en-bloc agreement for years. But Mr Tan was among those who resisted.
'I don't even read some of the proposals that were put out, because I have no intention of selling,' the 60-year-old cosmetics distributor said.
He bought his apartment in 1984 and lived there for a decade before moving elsewhere. He has been renting out the apartment.
Mr Tan claimed that from late 2006, residents opposed to the en-bloc sale had become targets of a variety of pranks and bullying tactics.
In December that year, someone pasted a poster on his door with the words 'Trouble Maker', he said. At that time, no one was living in the apartment, as the previous tenant had just moved out.
'If I had a tenant, you can imagine how it might have affected my relationship with him,' he said.
In the same month, Mr Tan's neighbour, who also opposed the sale, woke up one morning to find the badge of his Mercedes Benz missing.
The two made police reports together. Mr Tan said the police came and took fingerprint samples from his neighbour's car.
The New Paper on Sunday could not reach his neighbour, who is on an overseas trip.
Mr Tan said: 'I feel very angry. If you have any problem, as a neighbour, you should come and talk to me, instead of resorting to such acts.'
Green Lodge's en-bloc attempts have so far gained the approval of about 70 per cent of owners, falling short of the 80 per cent required under law.
Mr Heng Chee Tong, 32, a civil engineer, who lives at Lakeview Estate along Upper Thomson Road, said someone twisted off the radio antenna of his Toyota Altis last August after he declined an en-bloc deal.
He spent $50 to fix it and made a police report.
Four neighbours who rejected the en-bloc sale told him their cars were scratched.
Another said his telephone line outside the apartment was deliberately cut, Mr Heng told The New Paper on Sunday.
'Why are (these culprits) trying to harass other people into selling their apartments?
'There shouldn't be any coercion into making a decision. We should be more civil about the whole exercise. But now, there is a spirit of animosity in our estate.'
Mr Heng said that pro-en-bloc neighbours who used to talk to him when they met in the lift have since turned cold or hostile.
Two en-bloc attempts so far - in January and August last year - by Lakeview Estate's residents have failed. Both had about 60 per cent support.
A nature lover, Mr Heng intends to stay put in his apartment.
'The location is so good. It is central, and it is close to MacRitchie Reservoir.'
Property agents contacted by The New Paper on Sunday said that tension from en-bloc discussions is nothing new.
Mr Andrew Lin, an agent, said: 'There will definitely be hostility, because some want to sell and some refuse to.'
Another agent Francis Ngiam said en-bloc meetings by residents have been known to be heated, with some residents even making banners to express their strong views.
However, both said that resorting to illegal acts, such as car vandalism, is still relatively rare here.
Psychologist Kit Ng, director of The Centre for Psychology, said these condo bullies are not like common vandals 'who go around carparks painting cars'.
He said these vandals are 'seeking to create fear in others by sending a message that 'something will happen to you if you don't comply'.
Dr Elizabeth Nair, who heads Work & Health Psychologists, said that anger can turn even professionals and well-educated people into bullies.
And when they are upset over a perceived attempt to ruin their chances of getting a windfall from a property sale, the anger could just cause them to lose their heads.
OTHER CONDO BULLIES
LAGUNA PARK
Six cars belonging to residents were vandalised in the past two weeks. Two were damaged with corrosive liquid. Another had black paint splashed on it. Some cars were also scratched.
All the victims were opposed to the en-bloc sale.
BAYSHORE PARK
Residents were sharply divided after an en-bloc agreement was proposed this year.
One meeting in May to elect a committee to take charge of en-bloc sale matters was disrupted by shouts and jeers.
An anti-en-bloc resident who asked 'too many questions' was silenced by pro-en-bloc heckling, prompting the chairman of the management committee to threaten to end the meeting.
FARRER COURT
Before an en-bloc meeting last December, anonymous letters were circulated to convince residents opposed to the sale that their blocks had bad fengshui, and would bring bad luck to residents.
A 73-year-old resident on the en-bloc committee also had the windscreen and bonnet of his car damaged.
NEPTUNE COURT
En-bloc meetings last year were not pretty to watch. One resident said those in favour of the sale would 'shout and boo at dissenters, usually the older residents'.
'You come home from the meetings very stressed. We have lost all sense of value and respect for the elderly,' she lamented.
CONDO RESIDENTS WHO OPPOSE EN BLOC RECOUNT 'PINUSHMENT'
# PHONE LINE CUT
# MERC BADGE RIPPED OFF
# CARS SCRATCHED
# RUDE MESSAGE ON DOOR
ONE resident's Mercedes Benz badge was ripped off and stolen. Another had a poster plastered on his front door, with the words 'Trouble Maker' on it.
Yet another resident's telephone stopped working. And when he went outside to check, he discovered that someone had cut his phone line.
Flaming shame: A corosive liquid is splashed on the bonnet of this Lexus at Laguna Park condominium. Several cars in the estate had been damaged. All belong to owners who have not yet agreed to en bloc sale. file picture: The Straits Times
Say hello to a new form of neighbourly harassment that has reared its ugly head in several condominiums around Singapore, following the en-bloc fever that began last year.
Upset by some of their neighbours' refusal to endorse en-bloc deals, which could result in instant windfalls for some owners, these condo bullies resort to cowardly acts of vandalism to torment their neighbours.
As one aggrieved resident put it: 'This is really uncivilised behaviour.'
Last week, it was reported that at least six cars had been vandalised at Laguna Park since en-bloc discussions began. They all belonged to residents opposed to an en-bloc sale.
In the wake of the Laguna Park incidents, Singaporeans living in other private estates are coming forward with similar horror stories. At least two other condominiums have supposedly been hit by such bullies.
Some of its residents told The New Paper on Sunday of bullying acts - some uncivil, others plain criminal.
One such resident is Mr Tan Keng Ann, who owns an apartment at Green Lodge estate, a condominium along Toh Tuck Road.
Some of the 80 apartment owners there have been pushing for an en-bloc agreement for years. But Mr Tan was among those who resisted.
'I don't even read some of the proposals that were put out, because I have no intention of selling,' the 60-year-old cosmetics distributor said.
He bought his apartment in 1984 and lived there for a decade before moving elsewhere. He has been renting out the apartment.
Mr Tan claimed that from late 2006, residents opposed to the en-bloc sale had become targets of a variety of pranks and bullying tactics.
In December that year, someone pasted a poster on his door with the words 'Trouble Maker', he said. At that time, no one was living in the apartment, as the previous tenant had just moved out.
'If I had a tenant, you can imagine how it might have affected my relationship with him,' he said.
In the same month, Mr Tan's neighbour, who also opposed the sale, woke up one morning to find the badge of his Mercedes Benz missing.
The two made police reports together. Mr Tan said the police came and took fingerprint samples from his neighbour's car.
The New Paper on Sunday could not reach his neighbour, who is on an overseas trip.
Mr Tan said: 'I feel very angry. If you have any problem, as a neighbour, you should come and talk to me, instead of resorting to such acts.'
Green Lodge's en-bloc attempts have so far gained the approval of about 70 per cent of owners, falling short of the 80 per cent required under law.
Mr Heng Chee Tong, 32, a civil engineer, who lives at Lakeview Estate along Upper Thomson Road, said someone twisted off the radio antenna of his Toyota Altis last August after he declined an en-bloc deal.
He spent $50 to fix it and made a police report.
Four neighbours who rejected the en-bloc sale told him their cars were scratched.
Another said his telephone line outside the apartment was deliberately cut, Mr Heng told The New Paper on Sunday.
'Why are (these culprits) trying to harass other people into selling their apartments?
'There shouldn't be any coercion into making a decision. We should be more civil about the whole exercise. But now, there is a spirit of animosity in our estate.'
Mr Heng said that pro-en-bloc neighbours who used to talk to him when they met in the lift have since turned cold or hostile.
Two en-bloc attempts so far - in January and August last year - by Lakeview Estate's residents have failed. Both had about 60 per cent support.
A nature lover, Mr Heng intends to stay put in his apartment.
'The location is so good. It is central, and it is close to MacRitchie Reservoir.'
Property agents contacted by The New Paper on Sunday said that tension from en-bloc discussions is nothing new.
Mr Andrew Lin, an agent, said: 'There will definitely be hostility, because some want to sell and some refuse to.'
Another agent Francis Ngiam said en-bloc meetings by residents have been known to be heated, with some residents even making banners to express their strong views.
However, both said that resorting to illegal acts, such as car vandalism, is still relatively rare here.
Psychologist Kit Ng, director of The Centre for Psychology, said these condo bullies are not like common vandals 'who go around carparks painting cars'.
He said these vandals are 'seeking to create fear in others by sending a message that 'something will happen to you if you don't comply'.
Dr Elizabeth Nair, who heads Work & Health Psychologists, said that anger can turn even professionals and well-educated people into bullies.
And when they are upset over a perceived attempt to ruin their chances of getting a windfall from a property sale, the anger could just cause them to lose their heads.
OTHER CONDO BULLIES
LAGUNA PARK
Six cars belonging to residents were vandalised in the past two weeks. Two were damaged with corrosive liquid. Another had black paint splashed on it. Some cars were also scratched.
All the victims were opposed to the en-bloc sale.
BAYSHORE PARK
Residents were sharply divided after an en-bloc agreement was proposed this year.
One meeting in May to elect a committee to take charge of en-bloc sale matters was disrupted by shouts and jeers.
An anti-en-bloc resident who asked 'too many questions' was silenced by pro-en-bloc heckling, prompting the chairman of the management committee to threaten to end the meeting.
FARRER COURT
Before an en-bloc meeting last December, anonymous letters were circulated to convince residents opposed to the sale that their blocks had bad fengshui, and would bring bad luck to residents.
A 73-year-old resident on the en-bloc committee also had the windscreen and bonnet of his car damaged.
NEPTUNE COURT
En-bloc meetings last year were not pretty to watch. One resident said those in favour of the sale would 'shout and boo at dissenters, usually the older residents'.
'You come home from the meetings very stressed. We have lost all sense of value and respect for the elderly,' she lamented.