S'pore Office Rents Fall Sharpest in Asia

Source : The Business Times, March 3, 2009

Landlords here more defensive, tenant retention given priority: CBRE report

Office rents for Grade A/Prime space in Singapore fell a steep 14 per cent in Q408 on a year-on-year (yoy) basis, the sharpest fall in Asia.

In Tokyo, office rents fell 13.4 per cent yoy while in Hong Kong (citywide), rents fell 13.2 per cent yoy.

WORST QUARTER: According to CBRE, the fourth quarter saw prime office rents suffer the most severe quarterly correction since records began

In Hanoi, rents rose the fastest at 25.6 per cent yoy while in Kuala Lumpur, rents increased by 19.3 per cent yoy. In Seoul (Yeouido), rents rose by 9.5 per cent yoy.

In its report Asia Marketview (Q4 2008), CBRE Research said that Singapore landlords adopted a more 'defensive position' and 'tenant retention was given greater priority'.

'Cost-cutting measures by occupiers and the first signs of sub-letting initiatives on excess space taken up during the expansion fervour in the past year were evidenced,' it added.

According to CBRE, the fourth quarter saw prime office rents suffer the most severe quarterly correction since records began. At the end of the review period, Grade A rents fell to an average of $15.00 per square foot (psf) per month, down from $17.15 psf per month a year ago.

Grade A vacancy in the fourth quarter was 0.9 per cent compared to 0.2 per cent a year ago.

CBRE believed that tenants here will decide to stay put rather than relocate as landlords look to retain tenants, and corporates come under pressure to further consolidate and reduce costs over the next 12 to 18 months.

But it also reckoned that there are still many tenants with renewals and rent reviews falling in 2009 under leases committed three to four years ago who could still be faced with rents that could potentially increase by some 75-150 per cent.

Generally, however, rents will continue to fall throughout 2009 with the biggest threat to the office market likely to be job attrition, not only within the key financial services sector, said CBRE, but also from supporting business services.

In Tokyo and Hong Kong, falling rents was partially attributed to new office space supply.

The fourth quarter saw Grade A vacancy increase to 3.5 per cent quarter-on-quarter (qoq) in Tokyo. CBRE said that a major factor was the completion of a Grade A building in Marunouchi, which added 533,700 sq ft of net lettable area to the market.

Similarly, CBRE included two more sub-markets - Kowloon East and Island East - in its fourth quarter data for Hong Kong (citywide) Grade A office rents with Grade A office vacancy rising 65 basis points (bps) qoq to 8.03 per cent. In Kowloon East alone, vacancy rate was more than 30 per cent, putting pressure on landlords to offer flexible terms to potential tenants.

Across Asia during the fourth quarter, vacancy increased in 14 of the 17 markets tracked by CBRE. Overall vacancy across the region rose by 334 bps between January and December 2008.

UK Under Pressure To Shore Up Housing, Home Owners

Source : The Business Times, March 3, 2009

Mortgage arrears, repossessions seen rising in 2009 as help schemes kick in

THE British authorities are under growing pressure to support the property market and offer respite to distressed home owners, as repossessions - already at a 12-year high - are expected to hit 200 a day within the year.

The Council of Mortgage Lenders (CML) says that the number of repossessions will exceed 75,000 by year-end, as rising unemployment puts further pressure on borrowers already struggling with mortgage repayments.

Last year, the number of homes repossessed by banks increased 54 per cent to 40,000, CML said. This was 11 per cent less than it expected, as mortgage lenders are taking steps to ensure repossessions are a last resort.

But CML director-general Michael Coogan said: 'There seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties. We strongly urge them to contact their lender and work with them before taking this step.'

Debt arrears among mortgage holders are rising steadily. By the end of last year, 1.57 per cent of all mortgages in Britain had arrears of 2.5 per cent or more on the outstanding balance.

Almost 220,000 mortgages were in arrears for three months or more by year-end, up from 166,000 at the end of the third quarter.

Particular areas, such as the Midlands, are seeing a sharp rise in repossessions. Housing charity Shelter says that 24 per cent more homes in this region were threatened with repossession last year than in 2007.

The charity's chief executive Adam Sampson dubbed CML's prediction of 75,000 homes being affected by repossessions in 2009 as 'all too realistic'.

'With CML also estimating that half a million people in Britain will fall into mortgage arrears this year, there is no doubt that many home owners will plunge further into debt as they turn to credit cards and loans in an effort to keep the bailiffs from the door,' he said.

The government has adopted several measures to ease the burden of home owners, such as a mortgage-rescue scheme that enables housing associations to buy a property and rent it back to the former owner.

The Mortgage Support Scheme, to start next month, will enable home owners to hang on to their homes by taking a repayment holiday.

But policy-makers have faced criticism that not enough is being done to stem the growth in repossessions and stimulate the housing sector.

A group of Labour Party members, for example, is urging the government to boost the property market by imposing a freeze on stamp duty for homes worth less than £1 million (S$2.2 million) for the rest of this year, and offering a tax credit to home buyers.

Home prices have dropped as much as 30 per cent in some parts of the country. Transactions are thin on the ground, despite the Bank of England cutting official interest rates to one per cent in the past few months.

'Flippers' Back At Condo Launches

Source : The Sunday Times, March 1, 2009

Speculators were among buyers at the recent sell-out sale of all 293 units at Alexis @ Alexandra, a newly launched condominium.

Another project, Caspian, in Jurong, sold around 515 of its 712 units at about the same time.

'For sale' ads followed both launches last month - but sub-sale buyers are not rushing in.

Yesterday, there was no huge crowd, but a steady stream of more than 300 people turned up at the launch of developer Hiap Hoe's The Beverly in Toh Tuck Road.

Its spokesman did not say how sales went for the 31 apartments that were released in the 118-unit development at an average of $750 per sq ft.

Property agents reported signs of attempted 'flipping' - quick profit sales from having bought at the developer's price - but they also said few sub-sale buyers were biting.

They noted that in the case of Alexis and Caspian, shortly after they were launched, ads for subsales began to appear.

An agent who declined to be named said about 10 per cent of Alexis' 293 units were being flipped.

Property agents cited the relatively low pricing as reasons for buyers wanting to do a flip. Prices for Caspian apartments started at $580 psf, while those at Alexis @ Alexandra were priced on average at $850 to $1,100 psf.

In addition, property agent K.L. Goh, who is marketing two sub-sale units at Alexis, said: 'Although the market is bad, Alexis is located near Queenstown MRT station and is highly sought after.'

The owners of a two-bedroom apartment are asking for $880,000, up from the $760,000 they paid for it.

Property agent Leslie Yap, who is helping a buyer market a two-bedroom apartment at Caspian for about $580,000, said: 'She bought it at $527,400 and even if she can make a little profit, I think it's quite good in such a short time.'

Meanwhile, agents said the response from sub-sale buyers was still rather cautious. Mr Yap said last Friday that he had received only one call that day for the Caspian unit.

'Even though this is a very popular project, the response is still very bad and it may be difficult for buyers to make a profit right now,' he said.

Mr John Murray, 41, who works in IT company EMC, was at the launch of The Beverly.

He said: 'I've noticed that the prices are down from when I went house-hunting five or six months ago. This is actually a great time to buy.'

But he did not buy a unit yesterday.

Boon For Boon Lay

Source : The Straits Times, February 28, 2009

Two new MRT stops to ease crowding at western station

THE twice-daily chaos that grips Boon Lay MRT station during the morning and evening peak hours on weekdays will soon quieten down.

An overview of Pioneer MRT station and the part of the community it serves. The station, together with Joo Koon station, are two new additions to the East-West Line. They start operating from 5.30am today. -- ST PHOTO: NG SOR LUAN

The station, a popular pick-up and drop-off point, is where private buses wait bumper-to-bumper in public bus bays, taxi stands and along Boon Lay Way to pick up or drop off a crush of scurrying commuters, mainly those working in Tuas and Jurong.

Relief has appeared in the form of two new MRT stations west of Boon Lay, which will also cut travelling time to other parts of the island by up to 15 minutes for the area's residents.

Boon Lay, which used to be the western-most station on the East-West Line, will, from 5.30am today, have a track extending further out west to the pair of new MRT stops, Pioneer and Joo Koon, which will now bear some of the commuter load and spread out the crowds.

Their opening means that the buses chartered by factories to ferry their workers to and from Boon Lay can now stop elsewhere, perhaps at Joo Koon station.

The Land Transport Authority (LTA) has paved the way for this by building a sheltered bus bay along Benoi Road, about 200m from Joo Koon station.

The bus bay can take up to seven 40-seater buses and is linked to Joo Koon station by a covered walkway.

Already, private bus operators have indicated that they are willing to pick up or drop off commuters there instead of at Boon Lay.

Mr Chitson Yap of Chitson Transport, for instance, said at least one of his clients has already approached him to discuss the matter.

The factories and companies in the area are also positive about the change, partly because having their workers picked up or dropped off at Joo Koon will cost less.

Ms Melissa Lau, the human resource manager at plastics factory Superpet Plastic in Tuas, said that if transport companies could 'give a better discount', moving the pick-up/drop-off point to Joo Koon would be good.

She added: 'Boon Lay is definitely messy in the mornings. Moving to Joo Koon will solve the problem.'

Pioneer and Joo Koon stations, declared open yesterday by Transport Minister Raymond Lim, are part of the 3.8km long Boon Lay Extension, which cost $436 million and took 31/2 years to build.

The extension is the first of $40 billion worth of new rail projects aimed at coaxing more people to use public transport.

The 35,000 people living or working west of Boon Lay station will be glad for the extension.

Instead of having to first make it to Boon Lay station by public or private bus, car, taxi, bicycle or on foot for onward journeys elsewhere, they will now be linked to the rest of the rail network by the two new stations.

Mr Lim called the opening of Pioneer and Joo Koon stations a significant milestone, as they are the first new stops since the Government unveiled its ambitious plan last year to revamp the public transport system.

The extension of the East-West Line will 'help to improve the attractiveness of public transport as a choice mode of travel', he said at the extension's opening ceremony at Pioneer station.

Pioneer sits along Jurong West Street 63, while Joo Koon, the East-West Line's new terminal station, is at Joo Koon Circle, near the Tuas industrial area, the Singapore Discovery Centre and the Safti Military Institute.

At the official opening of the extension yesterday, Mr Lim led hundreds of LTA officials and guests in a countdown.

At the count of zero, a train pulled into the station, honking its horn loudly.

The new disabled-friendly stations each have four lifts and four escalators.

Commuters who use them can also expect to do a spot of shopping along the overhead bridges leading to them.

British Home Prices Slide 10%

Source : The Business Times, March 3, 2009

(LONDON) UK house prices fell the most since at least 2001 last month as rising unemployment and a dearth of loans discouraged buyers, Hometrack Ltd said.

Few buyers: Prices fell across three-fifths of UK and sellers are achieving less than 90% of their asking price

The average cost of a home in England and Wales declined 10 per cent from a year earlier to £157,000 (S$345,400), the property researcher said yesterday. Prices slipped 0.8 per cent from a month earlier, led by Wales.

The economy contracted at the sharpest pace since 1980 in the fourth quarter and joblessness rose to a 10-year high in January, intensifying Britain's year-long property slump. The Bank of England will probably lower the key interest rate to a record low this week to help the country out of recession.

Said Richard Donnell, director of research at Hometrack: '2009 is a year when the housing market is at the mercy of the economy and rising unemployment.' He added: 'A broadbased recovery in the housing market will require a major turnaround in consumer confidence which is still some way off yet.'

Repossessions on UK mortgages that don't meet standard lending criteria rose by a quarter in the last three months of 2008, while delinquencies increased by a fifth, according to Standard & Poor's.

While the number of new buyers registered with real estate companies increased 17 per cent in the month, prices fell across three-fifths of the country and sellers are achieving less than 90 per cent of their asking price, Hometrack said. All 10 regions tracked in the survey of 5,800 real estate agents and surveyors showed price declines.

Foreclosures on so-called non-conforming mortgages included in £35 billion of bonds rated by S&P climbed to 3.47 per cent in the fourth quarter, from 2.77 per cent in the previous three-month period, S&P said in a report yesterday. The percentage of home loans in arrears for more than 90 days climbed to 12.46 per cent, from 10.3 per cent, it said. -- Bloomberg

MND Slashes Development Charge Rates

Source : The Business Times, February 28, 2009

However, it leaves untouched DC rates for landed residential and industrial uses throughout Singapore

THE government yesterday announced bigger cuts to development charge (DC) rates, which are payable for enhancing the use of some sites, compared with the previous revision six months earlier. It used lower condo/apartment prices and weaker office rentals as evidence, given the dearth of land transactions.

The average DC rate was chopped 15 per cent for non-landed residential use, 10 per cent for hotel and hospital use and 4 per cent for commercial use. The average rate was also trimmed 4 per cent for business zone commercial use (which covers the warehouse retail scheme).

However, the Ministry of National Development (MND) left completely untouched DC rates islandwide for landed residential and industrial uses, and for this reason, some market watchers described yesterday's adjustment as 'conservative'.

'More corrections are expected in future DC rate revisions in light of the economic climate and sentiments,' said Chua Yang Liang, Jones Lang LaSalle (JLL) head of research (SE Asia).

Colliers International director Tay Huey Ying too reckons that 'we could see adjustments made to those areas which did not see corrections this round'.

She was also disappointed that the government had stuck to its DC calculation formula, which creams off 70 per cent of the enhancement in land value, instead of reverting to its pre-July 2007 formula of 50 per cent.

MND reviews DC rates in consultation with the Chief Valuer, taking into account current property market values.

A spokeswoman for the Chief Valuer said: 'As there was very little land sales evidence during the past half-year, we had to look at other indications of property values such as sales of apartments/condos and office rents, and use the residual valuation method to derive the land values - in the case of non-landed residential and commercial use DC rates.'

In trimming hotel use DC rates, the Chief Valuer looked at the price fetched for a hotel site at Kallang/Jellicoe roads at a state tender that closed in October last year, which was about 10 per cent lower than the land value implied by the Sept 1, 2008 DC rate for the location, and proposed an average 10 per cent islandwide drop in the DC rate for hotel use, she added.

DC is payable to the state in exchange for the rights to enhance the use of some sites or to build bigger projects on them. DC rates are revised twice yearly, on March 1 and Sept 1. They are specified according to use groups (such as landed residential, non-landed residential and commercial) across 118 geographical sectors or locations across Singapore.

For yesterday's revision, which takes effect tomorrow, non-landed residential DC rates fell in 115 geographical sectors by between 7.1 per cent and 30 per cent. The Ardmore/Draycott, Leonie Hill and Oxley areas saw 30 per cent reductions, followed by Sentosa, with a 29.4 per cent decrease, according to JLL's analysis.

Noting the big corrections in Districts 9 and 10 and Sentosa, JLL said that these are the areas with luxury residential projects that have also seen the greatest price correction over the past six months.

Hotel DC rates were slashed across all 118 sectors. The falls ranged from 7.1 to 11.1 per cent.

However, commercial DC rates were cut in just 48 sectors by between 4 and 17.6 per cent, with the largest reduction in the area around Somerset MRT Station. Office strongholds in the CBD - including Raffles Place/Golden Shoe, Marina Centre, Marina Bay and Fullerton Road - all saw commercial use DC rates ease 16.7 per cent.

Colliers' Ms Tay wondered why commercial DC rates were not cut islandwide, unlike the case for hotel use. 'That's not very balanced.'

She also said that the government was being conservative in not trimming DC rates for industrial use at all, despite the fact that JTC Corp has revised downwards its land rent and land premium since the start of the year.

DC rates are tracked in property circles as they reflect land values. However, the latest DC revision is not expected to have much market impact as developers are unlikely to have much appetite for buying sites in the near future.

Says JLL's Dr Chua: 'Despite the large revisions to non-landed residential DC rates, there's unlikely to be a sudden rush by developers to reinitiate en bloc deals or change their development plans.

'Our market understanding is that most developers had locked away the earlier DC rates when they made their planning applications to capitalise on the exemption of bay windows and planter boxes from gross floor area calculation prior to rescission of policy on Dec 31, 2008. The savings in DC rates is not sufficient to warrant such a move.'

Colliers' Ms Tay said yesterday's revisions indicate that 'the government has recognised the market has taken a turn for the worse, but it probably took the approach of erring on the side of caution'.

During the last DC rate revision effective Sept 1, 2008, MND left DC rates largely unchanged, except for an average 6.3 per cent cut for non-landed residential use.

At the time, property consultants said that there may not be sufficient evidence yet of declines in property values, and that rates could be cut at the next revision if stronger evidence emerges of falling values.

The last revision also saw MND change boundaries for eight sectors in three precincts - the Race Course Road area, Jurong Lakeside area and Pulau Brani.

Yesterday's revision saw no change to sector boundaries. However, some industry observers reckon that changes could be on the cards in future for locations in the vicinity of new MRT stations opening this year and next.

“第二把钥匙”交给年长者 屋契回购计划正式推行

Source : 《联合早报》March 2, 2009

讨论多时的屋契回购计划昨天正式推行，国家发展部长马宝山形容这是一把“重要的钥匙”，为年长屋主开启多一个从组屋套现的选择。

马宝山昨早在计划的推展仪式上以华语和英语致词时说，建屋发展局为年轻夫妇提供购屋津贴，协助他们获得屋子的“第一把钥匙”。当他们年老时，当局再把“第二把钥匙”交给他们，而这把钥匙指的是各种从组屋套现的选择，以确保他们在退休后仍有收入来源。

年届七旬的许忠英和妻子林宝春马上申请屋契回购计划，把屋契“卖”回给政府。

这些套现方法包括出租整个组屋，再搬去和孩子同住，或是把组屋卖掉，然后买个小型公寓。

马宝山说，有需要的年长者可以选择任何一个套现方法，而屋契回购计划就是一个相当好的选择，可说是我国公共住屋政策的一个里程碑。

“这是个两全其美的计划，让年长者可以原地养老，又可以获得终身年金，补贴他们退休后的收入。”

屋主必须满62岁

这项计划让年长屋主把二房或三房式组屋的部分屋契，以市价卖给建屋局套现。当局会保留30年屋契给他们，让他们继续在同一组屋养老。

加入计划后，屋主会获得5000元现金，其余收入须拨入公积金终身入息计划（CPF Life），让他们每月获取一笔固定收入。建屋局也会发出额外的1万元津贴给参与计划的屋主。

申请加入计划的屋主必须年满62岁。这些年长屋主多是在上世纪六七十年代购买组屋，马宝山对于这计划能让我国首批组屋屋主受惠感到高兴。

他在致词时也解答公众对计划的一些常见疑问。其中，最让公众感到困扰的是，寿命的长短如何影响他们所能取回的款项和住屋情况。

马宝山说，如果屋主在30年屋契结束前去世，屋主的妻儿可选择继续住在同一组屋，直到屋契期满，或选择取回所剩屋契的退款。比如说，要是屋主以10万元加入公积金终身入息计划，而在领取1万元年金后就逝世，他的遗产受益人可获得其余9万元。

屋契满后屋主仍健在 当局确保有栖身之所

要是屋主在30年屋契结束后仍健在，当局也会确保他还有栖身之所，不至于无家可归。

目前约有2万5000户低收入家庭符合加入屋契回购计划的条件。为让年长屋主对计划有更深的了解，建屋局将在10个组屋区举行巡回展览。这些成熟组屋区有较多年长者居住，它们是女皇镇、麦波申、甘榜格南、加基武吉、哥南亚逸、牛车水－金声、拉丁马士、德义、大巴窑东和大巴窑中。

巡回展览昨天在淡滨尼打响第一炮，吸引约600名年长者出席。不少年长者都有孩子陪同，让孩子与建屋局代表接洽，再以熟悉的语言向他们解释计划详情。

建屋局代表也可当场用电脑软件进行估算，算出当局回购屋契后，个别屋主可获得的款项以及每月可领取的终身入息数额。

5对夫妻昨天已表示有意加入计划。当局会安排他们接受财务辅导，确保他们了解计划的种种细节。之后，年长者会签署屋契回购的法律文件。整个过程约需两个半月。

申请加入屋契回购计划的屋主必须年满62岁，而且只享受过一次购屋津贴，建屋局将只向二房式和三房式的屋主回购屋契。申请者过去也必须不曾拥有四房式或更大型组屋或私人房地产，而且须在要求建屋局回购屋契的组屋住满五年，家庭月入不超过3000元，负债也必须少于5000元。

屋契“卖”政府 每月领约500元

协助年长者从组屋套现的屋契回购计划（Lease Buyback Scheme）昨天正式启动，年届七旬的这对老夫妻就马上申请，把屋契“卖”回给政府。

许忠英（72岁）和妻子林宝春（70岁）在淡滨尼三房式组屋住了23年，早已落地生根。他们不想搬到其他邻里或小型公寓住，也不愿出租房间来赚取收入，屋契回购计划成了他们套现的理想选择。

两人的组屋屋契剩下76年，其中30年屋契保留给他们，建屋发展局将以市价回购剩余46年屋契。他们会获得5000元现金，其余的须拨入公积金终身入息计划（CPF Life）。按照初步估算，他们将领取每月约500元的终身入息，直到终老。

年事已高的许忠英目前在油站工作，每月赚取800元收入。他说，一旦无法继续工作，终身入息就能派上用场。“我们可以用这笔钱来付生活费及组屋杂费等。”

两人育有一个女儿，女儿已成家并有自己的组屋，因此他们可以在无后顾之忧的情况下加入这计划。

国家发展部长马宝山昨天推展仪式上说，这措施让年长国人把部分投资在组屋里的钱套现成现金，作为养老用途，可说是一项创新之举，甚至可能是世界首创。