Wednesday, September 24, 2008

Lower Top Bids Expected For Mountbatten Site

Source : The Business Times, September 24, 2008

Analysts also doubt need for more transitional offices

A 15-YEAR leasehold transitional office site in Mountbatten Road, launched yesterday, is expected to fetch top bids that are 15-40 per cent lower than a nearby site sold in January this year, according to some property consultants.

Some analysts again questioned the need for the government to keep releasing transitional office sites, given that a substantial supply of Grade A office space will be completed from 2010.

Separately, a UBS Investment Research report dated yesterday says that a 1.5-6 per cent cut in the number of jobs in Singapore's financial industry could lower UBS's forecast of monthly prime office rents from $16.20 per square foot (psf) currently to $8.60-9.50 psf in 2012 - a 41-47 per cent slide. This is more pessimistic than an earlier UBS forecast of a 34 per cent fall to $10.50 psf by 2012.

UBS also cited Urban Redevelopment Authority (URA) data showing that median office rents in the CBD had fallen in July. Monthly median rents in the Raffles Place, Tanjong Pagar and Cecil Street areas are now $12.50 psf, $7.28 psf and $6.50 psf, compared with $14.98 psf, $7.49 psf and $6.65 psf in June.

Cushman & Wakefield managing director Donald Han reckons that the highest bid for the Mountbatten Road plot will be $55-59 psf per plot ratio (ppr) - about 15-20 per cent less than for the earlier plot, which fetched $69.17 psf ppr. He said that the latest plot is farther from the future Mountbatten MRT Station - compared to the earlier plot which is just next to the station - and that sentiment in the office market is weaker now.

CB Richard Ellis executive director Li Hiaw Ho puts the range of top bids at $40-50 psf ppr - a 28-42 per cent decline from the price fetched by the nearby plot. Mr Li bases his estimate on the assumption of average gross monthly rent of $5 psf for a new office development on the site and a 10 per cent annual net return for the investor, given the short period of 13-14 years to recoup the investment.

Jones Lang LaSalle's South-east Asia research head Chua Yang Liang reckons that demand for the latest site will be lukewarm given the spate of negative news in global financial markets.

Cushman's Mr Han says that the plot is also less attractive than another transitional office site in Mohamed Sultan Road launched for tender last month by URA. 'The Mohamed Sultan site is in a superior location, given its proximity to the CBD, although it has a narrow configuration which could make it harder to maximise the net lettable area and floor-plate efficiency for a new development,' he said.

URA has launched eight transitional office sites since it introduced the scheme in July last year.

'Such parcels on short 15-year leases were mooted primarily to cater to the office supply shortage situation prevalent a year ago. However, market fundamentals have changed since,' CBRE's Mr Li said.

'Based on our estimated average annual demand for office space of 1.6 million sq ft, combined with the 1.7 million sq ft and 2.8 million sq ft that will come on-stream in 2009 and 2010 respectively, there is no supply crunch in the near future. We believe the government should review the necessity of launching more transitional offices in the immediate future.'

Agreeing, Savills Singapore's director of marketing and business development Ku Swee Yong said: 'By the time a development on the Mountbatten Road site launched today is completed, say in Q2 2010, there would be a large supply of Grade A office space in prime locations. We can say the objectives of the transitional office space programme have been met.'

SLA's Land Sales Double To $12 billion

Source : The Straits Times, Sep 24, 2008

10-year high comes in year marked by mega deals, strong demand

THE property market's bull run might have stopped but not before sending land sale revenue at the Singapore Land Authority (SLA) to a 10-year high of $12.4 billion.

Its bumper result for the 12 months ended March 31 was a twofold increase from the $6.2 billion in 2006 and is just shy of the 1997 record of $14 billion.

This Beach Road site, bought by a City Developments-led group at $1.69 billion, is one of the deals that helped SLA to its bumper result. -- PHOTO: URA

Some of the mega sales that added to the stellar figures included a plum site at Beach Road, bought by a City Developments-led consortium for $1.69 billion, and a 1.7ha site on Irrawaddy Road sold to Parkway Novena for $1.2 billion to build a private hospital.

SLA's annual report, released yesterday, showed that land sale proceeds from the private sector hit a record high of $10.4 billion - well up on the $3.5 billion for 2006 and the $6.9 billion posted in the 1997 property boom.

Land sales to the public sector dropped slightly to $2 billion, from $2.7 billion in 2006.

The financial year was marked by strong demand for land for offices, hostels, international schools and other commercial uses.

The agency rolled out 78 tenders for such interim uses - about one every 4.5 days and 8 per cent up on 2006.

SLA's operating income hit a record at $100.9 million - a 14 per cent increase from a year ago. Its total operating surplus was $17.1 million.

The gross floor area (GFA) of SLA- managed state properties also hit a record of 4.02 million sq m, translating into an 87 per cent occupancy rate of all existing state properties.

SLA said the largest use - at 1.7 million sq m GFA - of its state properties is by social and civil institutions, including voluntary welfare organisations, and for the arts and recreation purposes.

It also injected about 122,000 sq m of space to ease the office crunch and awarded more than 40 properties for educational uses.

'The potential for good rental yield has drawn many new and experienced investors to bid for state properties,' said SLA chief executive Lam Joon Khoi.

Mr Lam added that SLA has developed an integrated registration system for private and HDB properties.

This will extend search facilities, currently available only for private properties, to HDB flats.

For the coming year, SLA said it will focus on a new initiative: Establishing a national spatial data infrastructure.

It will develop a geographic information system that will coordinate and manage land data and data exchange across all the public agencies.

SLA chairman Greg Seow said the initiative is 'significant as it aids in both strategic planning and operations for the appropriate agencies'.

'It will also demonstrate a government-wide approach to problem-solving and resource-sharing,' he added.

More details on this initiative will be released later.

Year of records

# Land sales jumped to $12.4 billion, from $6.2 billion in 2006

# Land sales to private sector at a record $10.4 billion, eclipsing 1997 property peak of $6.9 billion

# Operating income rose 14 per cent to $100.9 million from a year ago

# Operating surplus at $17.1 million

# Agency fees from SLA's land business group contributed $61.6 million, from last year's $54.8 million

# Rental collections for state land and properties rose to $550.5 million - $36 million higher than last year.

# Title registration grew 17 per cent to a record $4.3 million

S'pore Govt Land Sales In FY2007 Double To $12.4b

Source : The Business Times, September 24, 2008

The total is $2b shy of FY1997's record sales of $14b

The government sold some $12.4 billion worth of land in the financial year ended March 31, 2008 - double the sales of $6.2 billion achieved in the previous year.

The numbers mark a steady increase for 10 straight years now, ever since the property slump in 1997-98. But the $12.4 billion value is still around $2 billion shy of the record achieved in total state land sales during the property boom in the 1997 financial year. Then, the state netted about $14 billion.

The Singapore Land Authority (SLA), which appoints agencies to conduct state land sales, announced the figures yesterday in its annual report. The private sector contributed the bulk of revenue, accounting for a record $10.4 billion of land sales.

Top deals included the purchase of a land parcel at Irrawaddy Road by Parkway Holdings for $1.25 billion in February 2008, and the sale of the iconic South Beach site, which was snapped up by a consortium comprising City Developments and overseas partners Istithmar (part of the Dubai World Group) and United States-based Elad Group for some $1.69 billion in September 2007.

The public sector accounted for the remaining $2 billion of land sales.

The year was marked by 'urgent strong demand' for land for office, hostel, international schools and other commercial uses, SLA said.

'2007 was a busy year,' said chief executive Lam Joon Khoi in the annual report. 'We achieved high levels of operational output across all functions.'

The government agency has been working to release state properties for adaptive interim development. For example, it has launched eight transitional office sites since July 2007.

There were also other signs that FY2007 was a boom year for the property sector. During the year, SLA launched 78 tenders, which works out to one tender every 4.5 days - an 8 per cent increase from 2006. The number of tenders awarded also increased by 56 per cent.

And with the strong growth in the property market, SLA registered a high volume of 537,600 instruments and caveats lodged for HDB and private properties during the year. By contrast, some 380,400 instruments and caveats were lodged in FY2006.

SLA also said that on the back of the property boom and strong demand for state properties, its operating income achieved an all-time high, increasing by 14 per cent to $100.9 million from $88.6 million a year ago.

SLA's total operating surplus for the year ending March 31, 2008 was $17.1 million - slightly under the surplus of $17.2 million reported for the previous financial year.

SLA also said that it managed some four million sq m in total estimated gross floor area of state properties as at March 31, 2008, which is a new high. This translated into an occupancy rate of 87 per cent.

Flats Near City Cost Up To 50% More

Source : The Straits Times, Sep 24 2008

Central, Bukit Merah and Queenstown among popular HDB estates

IF YOU want to live in an HDB flat close to the city, be prepared to pay as much as 50 per cent more than if you choose to stay out in the sticks.

Prices for resale flats in estates near the city such as Central, Bukit Merah and Queenstown have left the rest of the country behind in recent years, according to new HDB data obtained by The Straits Times.

And what is particularly striking is how fast that price differential has widened.

PropNex chief executive Mohamed Ismail pointed out that in 1996, the difference between inner city flats and the national average was only around 11 per cent. Now it is around 50 per cent.

Take a four-room flat in Bukit Batok. In 1996, it sold for an average of $252 per sq ft (psf), while a similar one in Queenstown was sold for $280 psf.

The HDB's latest second-quarter data shows that the Bukit Batok flat would now sell for about $303 psf while the Queenstown flat commands $458 psf.

The price gulf will only widen, say analysts, given the shortage of prized flats, and factors like increasing transport costs that make people more inclined to live closer to their place of work.

In the long run, 'unless there's a successful decentralisation strategy, the gap is unlikely to narrow', said Mr Colin Tan, head of research and consultancy at Chesterton International.

About 52,000 HDB flats, or 6 per cent of total supply, are in inner city areas.

The new HDB data puts in stark terms how prices can differ.

January to July figures showed that resale prices of four- and five-room flats in estates near the Central Business District were about 48 to 52 per cent higher than the national average.

Popular locations include Smith Street, Tanjong Pagar Plaza, Cantonment Close, Jalan Membina and Stirling Road.

While a four-room flat commands an average price of $295 psf islandwide, this shoots up to $437 psf in city areas - a 48 per cent jump.

Similarly for a five-roomer, the average price of $303 psf spikes 52 per cent to $461 psf nearer the city.

The resale market is the obvious way in but homebuyers also have a chance via the HDB's balloting exercises.

These are wildly popular, as offered units are in highly coveted central locations surrounded by amenities - and are priced with the HDB's market subsidy.

In January, in the HDB's latest ballot, 278 flats in Bedok, Clementi, Queenstown and Jurong West received a staggering 9,901 applications.

The price range for four-room flats was $141,000 to $398,000, the five- room units cost $218,000 to $532,000 and the executive flats $333,000 to $470,000. Prices depended on location and features of the units.

Some homebuyers, however, have baulked at the high cost of new flats.

Auditor Ho Koon Woei, 31, said he noted the new flat prices increasing at least $100,000 on average in mature towns in the last two years.

'Such a hike in prices in a short timeframe makes it more unaffordable for first-timers,' he said.

The HDB has not held a ballot since January, but analysts expect prices of any upcoming new flats in central areas to match the market prices.

While private home prices lost steam and inched up just 0.17 per cent in the last quarter, HDB resale prices rose 4.5 per cent.

Some, such as Mr Tan, feel that the HDB 'should be mindful that it does not add to the escalating price trend' in the resale market.

The HDB's new flat prices would effectively set a price floor - a level at which resale flats will not be sold below.

And if resale flats are priced above new flats, and new flats are pegged to market rates, there is a danger of a price spiral, he added.

'In the pricing of its flats, it should err more towards affordability rather than market pricing,' said Mr Tan.

However, this does not mean that the HDB should offer such low prices that it affects market prices, say analysts.

'If prices are excessively cheap, that will affect the existing prices of city properties,' said Mr Ismail.

Ultimately, he feels demand for city properties will price flats accordingly.

On a psf basis, HDB flats at premium prices are still far cheaper than private homes in the city, which are priced from $1,000psf upwards, he pointed out.

'I wouldn't be surprised if in the next 15 years, the premium of a city HDB flat achieves 100 per cent more than a flat in suburban areas.'

S'pore Still Least Corrupt In Asia

Source : The Straits Times, Sep 24, 2008

JUST like last year, Singapore has been ranked the fourth least corrupt country in a global corruption survey.

It also retains its status as Asia's least corrupt country on the Corruption Perceptions Index, released yesterday by Transparency International (TI).

Conducted annually by the Berlin-based non-governmental corruption watchdog, the index studies the level of public sector corruption in 180 countries and ranks them according to scores. A score of 10 indicates highly clean and 0 means highly corrupt.

It defines corruption as the abuse of public office for private gain and measures the degree to which corruption is perceived to exist among public officials and politicians.

In this year's index, Singapore scores 9.2, behind joint-leaders Denmark, Sweden and New Zealand, all of which obtained a 9.3 score. At the other end are Somalia (1.0), Iraq and Myanmar (1.3) and Haiti (1.4).

Asian economies which placed significantly are Hong Kong (12th), Japan (18th), Taiwan (39th), South Korea (40th) and Malaysia (47th).

Last year, Singapore was ranked joint-fourth with Sweden, behind Denmark, Finland and New Zealand. It came in fifth from 2003 to 2006.

Dr Johann Graf Lambsdorff of the University of Passau in Germany, who draws up the index, said Singapore's long tradition of strong oversight is an example for best practices in Asia.

Mr Liao Ran, TI's senior programme coordinator for East and South Asia, said factors contributing to Singapore's ranking included a strong commitment from political leaders; education, which has bred a culture of integrity among citizens; a sound and comprehensive legal framework; and an effective anti-corruption agency.

TI said the index continues to show there is a link between corruption and poverty. It also underlines the benefits of fighting corruption.

'Evidence suggests that an improvement in the index by one point increases capital inflows by 0.5 per cent of a country's gross domestic product and average incomes by as much as 4 per cent,' Dr Lambsdorff said.

TI also said the index shows that wealthy countries such as France and the United Kingdom, whose scores have slipped, need to step up their anti-corruption mechanisms.

Professor Neo Boon Siong, director of the Asia Competitiveness Institute of the Lee Kuan Yew School of Public Policy, said Singapore's fourth position was a significant achievement.

A good ranking helps attract investments as it makes doing business here more predictable and cheaper, he said.

As to whether Singapore can reach the top of the index, he said: 'The real difference among the top leaders is not very wide. The actual ranking itself is not the main issue, because being ranked among the top few is a clear recognition the country is corruption-free.'

The index is computed with data from 13 corruption-related polls and surveys carried out this and last year by institutions like the World Economic Forum's Global Competitiveness Report.

近市区组屋 转售价高50%

Source : 《联合晚报》September 24, 2008

女皇镇四房组屋 转售价达45万元










央行调查显示 中国居民购房意愿大跌

Source : 《联合早报》September 24,2008