Friday, April 3, 2009

It's Final: Horizon Towers Sale Is Off

Source : The Straits Times, April 03 2009

Surprise ruling vindicates stand of minority owners

THE Court of Appeal halted the contentious Horizon Towers collective sale once and for all yesterday with a hard-hitting ruling that singled out the estate's sales committee for scathing criticism.

One of Singapore's longest-running property disputes has ended with the Court of Appeal's hard-hitting ruling. -- ST PHOTO: JOSEPH NAIR.

The dramatic judgment caught many by surprise and vindicated the four sets of minority owners who opposed the sale from day one - about 3-1/2 years ago, when the idea was first mooted - and spent nearly $1.5 million in legal costs.

One of those owners, Mr Hendra Gunawan, told The Straits Times yesterday: 'I am very happy that at last we can protect our homes.'

'We can't do anything about it if 80 per cent agree to sell but they have to do it properly so that everyone's home will be sold at a proper price.'

Industry experts are also hailing the decision as a landmark judgment that will set clear parameters for en bloc deals.

Yesterday's ruling was clear in its condemnation of the way the en bloc process was conducted and was particularly critical of the estate's sales committee.

Among a litany of criticism, it pointed to the committee's failure to follow up on a higher offer for the estate, its undue haste in agreeing to a sale price in a rising market and its sloppy procedures in appointing a marketing agent and keeping owners up to speed on the transaction.

But perhaps the most serious censure was directed at its failure to take heed of a possible conflict of interest that arose when two owners bought additional units in the estate just before they were appointed to the sales committee.

'The sale committee's duty is to achieve the best price under the circumstances, and not just a fair price,' said Mr Karamjit Singh, managing director of Credo Real Estate, which has handled many collective sales but not that of Horizon Towers.

The Strata Titles Board, which backed the sale, was also criticised for the way it took too much at face value - whether opinions on price or legal points - when it should have been more questioning. It was also rapped for not being more vigilant on the possible conflict of interest issue regarding sales committee members.

One immediate effect of the ruling is that one of Singapore's most drawn-out en bloc deals is finally over.

The sale of the Leonie Hill estate was first mooted in October 2005. The owners agreed to a reserve price of $500 million the following year, just before the dramatic run-up in the property market.

A deal was signed in January 2007 when the majority owners accepted a price of just below $850 per sq ft of gross floor area from Hotel Properties and its two partners.

The 199 owners of the 99-year leasehold estate would each have pocketed about $2.3 million while the 11 penthouse owners would each have received around $4 million to more than $6 million.

A series of court challenges followed. Even some majority owners turned against the deal when they saw how the soaring market had made their sale price look like a giveaway.

The property market has since slumped and the en bloc market has dried up.

'On paper today, the owners would have lost out, but probably by just 10 per cent,' said a property expert who declined to be named.

Only a handful of the minority owners who objected to the sale fought on until the end, spending millions along the way.

Mr Ng Eng Ghee, Mr Gunawan and his wife Sulistiowati Kusumo and Madam Ong Sioe Hong were represented by Harry Elias while Mr Rudy Darmawan represented himself, his wife and aunt at the hearing.

Madam Ong said her group incurred expenses of more than $1.5 million. Another group of objectors - who fought against the sale earlier - has spent around $1 million. Property industry experts said yesterday's landmark ruling has struck a decisive blow for transparency.

'This is the first time the court of appeal has held in favour of the minority owners,' said Mr Phillip Fong, a partner of Harry Elias Partnership, which represented four minority owners.

'There's now substantial clarity on the extent of the duties of the sale committee.'

Credo's Mr Singh said: 'The judgment is undoubtedly significant. It clarifies what constitutes, for example, good faith and conflicts of interest.'


THE OBJECTORS

FOUR sets of minority owners lasted the full distance to see yesterday's final victory in overturning the Horizon Towers sale.

Those left standing after the marathon battle were Madam Ong Sioe Hong, Mr Hendra Gunawan and his wife, Mr Ng Eng Ghee, and Mr Rudy Darmawan, his wife and aunt.

Mr Darmawan, an Indonesian living here, represented himself, his wife and his aunt at the Court of Appeal. He is believed to be an executive at a multinational corporation.

Mr Gunawan, another Indonesian living here, runs his family's manufacturing business in Indonesia. The 53-year-old and his wife Sulistiowati Kusumo, and two sons have lived in Horizon Towers for eight years.

Madam Ong is the managing director of the department store operator Metro and the sister of Mr Jopie Ong, boss of Metro Holdings. Their father is Metro founder Ong Tjoe Kim.

Madam Ong, her husband and their two sons have lived in Horizon Towers for more than 20 years.

Retiree Mr Ng, was a property developer and is listed as the director of companies such as Hi-Rise Builders and Bideford Realty.

The long-running and costly legal battle saw many minority owners fall by the wayside.

Two out of nine sets of minority owners - a couple representing themselves and a foreign firm - had dropped out of the fight by the time the case went to the High Court in March last year.

By the time the case got to the Court of Appeal stage, more owners had dropped out.


VERY HAPPY

'We are very, very, very happy that we get to keep our home. All the minority homeowners are very passionate in working together towards keeping our home. We are also fortunate to have very professional and passionate legal counsels.'

Madam Ong Sioe Hong, one of the four appellants to the Court of Appeal


VINDICATED

'I had to pinch myself a few times. These three years have been quite an emotional rollercoaster. The minority owners are happy that we have been vindicated in the fight for our homes. For us, the price was never an issue.'

Ms J. Tan, a homeowner who objected to the sale


OVER AT LAST

'As consenting parties, obviously we wanted the sale. What is disappointing is that it took that long (to reach a conclusion). So much time and money has been spent on this. At least the last two months' anxiety is over. Whichever way it goes you have to accept it and move on.'

Mr Bharat Mandloi, 49, a commodities business director, homeowner and resident


PEACEFUL PLACE

'Together in Horizon Towers we always had a peaceful environment (throughout the proceedings), and it's still a wonderful place to live. I feel that justice has been done to what the minority objectors raised.'

Ms Mamata, 40, a real estate agent and Horizon Towers homeowner


FINE WITH VERDICT

'I am fine with the verdict. I have a great apartment and I will continue to live in it.'

Mr Anil Ahuja, 46, who lives in a penthouse

Property Funds In UK Eyeing Distressed Loans

Source : The Business Times, April 02 2009

Barclays says some 35b euros worth needs to be refinanced by 2012

(LONDON) Property funds are spying rich pickings from the carnage in commercial real estate, stockpiling cash to buy discounted loans that may cost banks billions of pounds in coming years.

All over: Dunfermline Building Society collapsed this past weekend partly because of an ill-timed move into commercial property lending in 2006 and 2007.

Mortgages supporting high-profile office or shopping mall deals are in dire need of refinancing after a record crash in prices in 2008 that has hit commercial property markets much harder than their residential counterpart.

Orchard Street Investment Management, for instance, plans to spend millions buying up loans from lenders left overexposed by the property boom that ended in 2007, hoping to make good money once markets recover.

'The starting point (for us) are banks who are interested to find partners to help them work out the situation, and there are beginning to be a number of deals where you can have these discussions,' chairman Chris Bartram said.

Dunfermline Building Society collapsed this past weekend partly because of an ill-timed move into commercial property lending in 2006 and 2007.

Britain has had to come to the rescue of Lloyds and Royal Bank of Scotland after their large commercial mortgage portfolios landed them in trouble.

Many of the largest property deals were funded in the market for commercial mortgage backed securities (CMBS), in which debt is sliced into tranches and sold off to bondholders. By end-2008, UK CMBS investors were owed 77 billion euros (S$155.4 billion), according to a recent Barclays Capital report.

Around 35 billion euros needs to be refinanced by 2012, Barclays said, at a time when UK banks are cutting back their exposure to the property sector.

As a result, the number of CMBS loans in trouble in Europe, the Middle East and Asia (EMEA) is expected to 'rise significantly over the coming quarters and years', rating agency Moody's said on Monday.

Troubled CMBS deals include those for pub owner Punch Taverns, retirement home company Four Seasons, care home owner NHP, and landmark London office building Plantation Place.

'2008-2009 marks the start of the first significant downturn in the history of the EMEA CMBS market, which will be characterised by substantially increasing default levels of securitised commercial real estate loans,' Moody's said.

Average UK commercial real estate prices have fallen by 40 per cent since a market peak in mid-2007, meaning many CMBS deals have breached covenants linked to the value of the property. In addition, emptying buildings mean shortfalls in rental income to pay debt interest.

'Tenant vacancies are going up, default rates are increasing and rents are under pressure . . . so now you're starting to see payment defaults,' said Gareth Davies at Close Brothers. 'You're starting to see this in the UK, Spain, France, where we have picked up new mandates. Not yet in Germany but there will be some.'

Close Brothers is pitching to restructure two UK CMBS deals - worth about £1 billion (S$2.2 billion) each, and both 'well under water'.

Globally, investors have US$92.6 billion to invest in property debt trading at distressed levels, according to research and consultancy firm Prequin. 'The market has grown substantially from 2002 when just six funds (worldwide) raised a total of US$1.04 billion . . . it only really took off in 2007 when the effects of the credit crisis became apparent,' said Tim Friedman of Prequin.

Eleven funds are now seeking to raise about US$6.5 billion to invest in Europe. North America is the most sought-after market, with 78 per cent of funds totalling US$72 billion being raised to target the region, he said.

Most distressed investors are focusing on simpler structures rather than the more complex, multi-borrower, multi-lender structures of CMBS deals.

Funds will adopt a range of strategies to buy property assets, including acquiring distressed mortgages direct from banks, foreclosing on the properties to sell for profit when the market recovers, said Mr Friedman.

Partnering with lenders may prove more popular as banks tend not to have the infrastructure to manage properties on their own, said Simon Dunne of Savill's Capital Advisers. -- Reuters.

四业主最后上诉得直 浩然大厦集体出售告吹

Source : 《联合早报》Apr 03, 2009

过去两年搞得满城风雨的浩然大厦(Horizon Towers)集体出售官司,结局出现戏剧性变化,四名少数业主的最后上诉得直,集体出售交易告吹。

上诉庭法官维克拉惹昨天代表最高法院上诉庭,发表长达122页的判词,推翻了分层地契局于2007年12月7日批准集体出售的裁决,让这场在分层地契局和高庭纷扰了近两年的官司终于有个了结。这相信是本地历来最长的集体出售官司。

为保住家园做最后一搏,浩然大厦的四名少数业主虽一再吃败仗,但不放弃,2007和2008年期间两度告上分层地契局和高庭,并于今年2月3日向最高法院提出,浩然大厦第一任销售委员会有两人在受委前贷款购各额外单位作为投资,因此希望能快速达成交易,而没有尽力争取最好的售价。

当时,由陈锡强大法官、潘文龙法官和维克拉惹法官组成的最高法院三司要求辩方律师呈交这三名委员额外购买的单位的房屋转让文件。

维克拉惹法官在判词中指出,浩然大厦第一任销售委员会主席Arjun Samtani在委任房地产代理前与女儿贷款了100万元,以135万元购买了另一个单位;另一名销售委员会成员陈家基(人名译音)在当时也贷款了超过90万元,以120万元添购另一单位。不过,两人不曾公开它们添购额外单位的事宜。

除了这个利益上的冲突外,在审查分层地契局至高庭的呈堂证据和证词后,维克拉惹法官发现,第一任销售委员会作为委托人并没有尽法律职责,在委任代理方面没有尽职调查,过程也不透明,并在没有法律和道德约束下仓促达成交易出售,尽管楼价节节攀升,但销售委员会在决定出售时并没有进一步征询同意出售业主的意见。

维克拉惹法官也指出分层地契局和高庭法官朱汉德判决有误。

他说,分层地契局有义务扮演积极调查所有反对出售的申请和理由,不限于售价是否合理以及呈堂证据,若发现或相信销售委员会没有将作出充足披露,也应该积极找出真相,而不应该把证明错失的重担落在少数业主上。

此外,维克拉惹法官也认为,分层地契局对“诚信”(good faith)采取过于狭窄的诠释,才会裁决销售委员既然获律师建议接受献议,证明交易有诚信。

他说:“虽然委托人在他的能力和认知以外的事项上可以向专人寻求建议,但最终他必须诚心、负责任和合理地做出决定。”

至于高庭法官朱汉德的判决,维克拉惹法官表示,他狭窄地看待分层地契约局在批准集体出售的职责,以致他误认为眼前的问题与价格有关,而分层地契局既然已裁决售价合理,而决定是基于事实,因此宣判少数业主上诉败诉。

少数业主之一的吴家越告诉本报,少数业主过去两年尝试证明维克拉惹法官所提出的问题,最终获得正视,令他感到非常欣慰。他说:“正义终于得到了伸张。”

位于利安尼山(Leonie Hill)的浩然大厦,占地20万4742平方英尺,拥有210个单位,属于99年地契,目前剩下70年。

本地上市公司旅店置业是在2007年1月22日,连同两家外国投资基金(Morgan Stanley及Qatar Investments)组成HPPL财团,斥资5亿元买下浩然大厦,售价相等于每平方英尺835元。199个面积较小的单位原本可各获赔230万元,而11个顶层豪宅(penthouse)则原本可获400万至628万元。

案件虽审结,但这场风波也许不会就此告终,买方HPPL曾表示会考虑采取法律行动向业主追究违约责任。

对此,现任销售委员会主席林成和表示,同意出售业主将接受法庭的决定,之前已尽所能争取让项目出售,问心无愧,而判词中的指责都是针对第一任销售委员会。

本报多次尝试联络旅店置业集团执行董事林先禄,但他没有回应。公司昨天下午发表文告,表示因最高法院的判决,浩然大厦的收购行动将不会进行,而最高法院的裁决是最后决定,不能再翻案。

市场人士:今后要进行集体出售可难了

市场人士指出,浩然大厦案件判决意味今后要进行集体出售更为艰难,销售委员会和分层地契局的职责将加重。

Bernard & Rada律师事务所的董事符春燕受访时表示,如果浩然大厦较早下判,许多告上分层地契局和高庭的集体出售案件可能无法通过。

处理许多集体出售案件的符春燕说:“浩然大厦集体出售官司的裁决为集体出售创下新里程碑,主要因为这场官司倍受瞩目,而且问题和不足的地方较过去严重。此外,从判词所见,法官发现,过去10年,一些集体出售项目屋龄还蛮新,不急需重建或翻新,但因为价格飙升而集体出售,这么做很浪费,对于不愿失去家园的人也很不利。”

她指出,维克拉惹法官在浩然大厦的判决清楚列出销售委员会和分层地契局的职责,要求比过去苛刻,同时也澄清了“诚信”的定义。

“过去分层地契局在裁决交易是否缺乏诚信都是根据售价和赔偿分配。如今,最高法院在判词中划定分层地契局有义务扮演积极调查所有反对出售的申请和理由,不限于售价是否合理以及呈堂证据。”

在这样的情况下,符春燕表示,由于缺乏诚信的范围扩大了,提出反对者可提出更多反对理由,分层地契局日后在审理集体出售案件时需花更长的时间,以便究出任何可能出现问题的地方以及集合证据。

考虑到分层地契局的判官都是属义务性质,更繁重的工作和职责可能会导致人们不愿献身。

同样的,由于责任更重大,符春燕认为,业主日后可能不愿加入销售委员会,而在没有人领导出售交易下,集体出售可能从此销声匿迹。

“在判词中,销售委员会被等同于委托人,责任非常重大,需要做的事情也非常多。加上2007年10月新生效且更严格的分层地契法令,集体出售可能从此销声匿迹。”

新分层地契法令于2007年10月4日生效,律政部对旧有条例修订了35处,包括所有业主必须在律师见证下签署集体出售协议书,并在签署协议后将有五天的“冷静期”等。

在过去几年负责多个集体出售项目的房地产代理商齐乐行(Credo)董事经理卡南吉星(Karamjit Singh)同意,在判词和新法令下,较少业主会自愿形成销售委员会,今后要进行集体出售更为艰难。

不过,他指出,这个问题在大型项目中较为棘手,小型项目所受的影响不大。

卡南吉星说:“判词重新规划和澄清销售委员会的职责,以及什么是诚信和利益冲突的事项。这让我们清楚了解,作为代理我们不只要争取合理的售价,而是最好的售价。”

En Bloc Sale Of Horizon Towers Falls Through

Source : Channel NewsAsia, 02 April 2009

A group of homeowners has finally won the fight to keep their condominiums, ending a two-year legal saga.

In an unprecedented move, the Court of Appeal has ruled in favour of owners who objected to the S$500 million en bloc sale of Horizon Towers. The Leonie Road condominium was to have been sold in 2007 to Hotel Properties and its partners.

Had the en bloc sale gone through, owners of its 199 units would have earned S$2.3 million each, while 11 penthouse owners would have received about S$4 million each.

In its judgement, the court said the Strata Titles Board, which approved the sale, had not done enough to investigate when objections were raised.

It also said that the sales committee was not transparent when it did not pursue a higher possible price offered by another buyer.

The lawyer, acting on behalf of the minority owners, said the judgement enhances existing laws which require sales committee members to be more transparent.

Philip Fong, partner, Harry Elias Partnership, said: "This particular judgement actually deals with specific aspects such as if there's a potential conflict of interest, when sales committee members have owned additional units – should they disclose or not disclose that fact.

"The fact that there's a higher offer and there are changing market conditions, should they go back to the subsidiary proprietors? All these make it very clear that the committee is to act in the interests of all subsidiary proprietors and not the majority."

When asked how they feel about the outcome, a spokesperson for the majority owners said it is not a case of whether they are happy or unhappy, but it is a decision they have to honour.

Channel NewsAsia understands that some homeowners have spent up to S$30,000 each in lawyers' fees.

Market-watchers said the outcome would affect homeowners who might have purchased other properties. These owners are still likely to be able to sell their units, but at a marginally lower price of about S$800 per square foot, compared to the S$850 per square foot agreed in the en bloc sale.

Observers said the case and the Court of Appeal's unprecedented decision will set a benchmark for other similar cases in the future. - CNA/so

HORIZON TOWERS COLLECTIVE SALE SAGA - No Go For En Bloc Sale

Source : The Straits Times, April 2, 2009

THE Court of Appeal halted the contentious Horizon Towers collective sale once and for all on Thursday with a hard-hitting ruling that singled out the estate's sales committee for scathing criticism.

Horizon Towers at Leonie Hill. -- ST PHOTO: CAROLINE CHIA

The dramatic judgement caught many by surprise and vindicated the four minority owners who opposed the sale from day one - almost three years ago - and spent nearly $1.5 million in legal costs.

One of those owners, Mr Hendra Gunawan, told The Straits Times on Thursday: 'I am very happy that at last we can protect our homes.'

'We can't do anything about it if 80 per cent agrees to sell but they have to do it properly so that everyone's home will be sold at a proper price.'

Industry experts are also hailing the decision as a landmark judgement that will set clear parameters for en bloc deals.

Thursday's ruling was clear in its condemnation of the way the en bloc process was conducted and was particularly critical of the estate's sales committee.

It said the committee had breached its duties as a fiduciary agent for all owners, including minority ones.

Among a litany of criticism, it pointed to the committee's failure to follow up on a higher offer for the estate, its undue haste in agreeing to a sale price in a rising market and its sloppy procedures in appointing a marketing agent and keeping owners up to speed on the transaction.

But perhaps the serious censure was directed at its failure to take heed of a possible conflict of interest that arose when two owners bought additional units in the estate just before they were appointed to the sales committee.

'The sale committee's duty is to achieve the best price under the circumstances, and not just a fair price,' said Mr Karamjit Singh, managing director of Credo Real Estate, which has handled many collective sales but not Horizon Towers.

Read the full report in Friday's edition of The Straits Times.

URA To Launch Tender For Short Street Hotel Site

Source : Channel NewsAsia, 02 April 2009

The Urban Redevelopment Authority (URA) is putting up a 0.12 hectare hotel site at Short Street for tender after it received an application from a developer to bid for the land parcel.

URA said the site, which is located within the Bras Basah-Bugis district, can generate a maximum gross floor area of 4,077 square metres and is ideal for boutique hotel development.

It added that the bid received came to no less than S$8.8 million.

An eight-week long public tender for the land parcel will be held in mid-April and the launch date will be announced later.

The site was made available for sale through the reserve list under the Government Land Sales Programme on August 26, 2008. - CNA/yt

Home Prices Slip In Q1

Source : The Business Times, April 1, 2009

THE pick-up in sales volume of new homes in the first quarter did little to stem the slide in private home prices.

In the HDB resale market, prices also fell - for the first time since

Location-wise, the biggest price fall of 17.2 per cent for non-landed homes was witnessed in the rest of the central region, and not the very core areas, where prices slipped by 15.2 per cent. Outside the central region, prices also went down by 7.5 per cent. --NP PHOTO: KELVIN CHNG

Private home prices declined by 13.8 per cent as the gloomy economic climate took its toll in the first three months of the year, following a 6.1 per cent plunge in the fourth quarter of last year, according to flash estimates from the Urban Redevelopment Authority (URA) on Wednesday.

Location-wise, the biggest price fall of 17.2 per cent for non-landed homes was witnessed in the rest of the central region, and not the very core areas, where prices slipped by 15.2 per cent. Outside the central region, prices also went down by 7.5 per cent.

But sales of new private homes were strong, with the market estimating first quarter sales at some 2,000 units or more, compared with sales of 4,264 new units in the whole of last year.

Meanwhile, prices of HDB resale flats slipped 0.6 per cent, compared with a 1.4 per cent climb in the fourth quarter, according to early estimates from HDB.

The URA and HDB estimates will be updated in four weeks' time. More details will also be made available then.

Record 13.8 Per Cent Fall In Private Home Prices

Source : The Straits Times, April 2, 2009

PRIVATE home prices fell a record 13.8 per cent in the first quarter of the year, with values of city-centre and city-fringe homes hit the most.

Flash estimates released yesterday by the Urban Redevelopment Authority (URA) reveal that the fall is the largest since the index started in 1975.























And they show that the market has now lost half of the gains it chalked up in the property boom just past.

The almost 14 per cent plunge is more than double the 6.1 per cent decline in the fourth quarter of last year and nearly triple the 4.7 per cent fall for the whole of last year, according to URA data.

Some property experts have described the fall as startling while others, such as Credo Real Estate managing director Karamjit Singh, said it was not unexpected.

He said sales were extremely weak in the fourth quarter following the Lehman Brothers collapse and that this followed into January, adding that 'the index is playing catch-up - it has always lagged the market'.

Contrary to typical expectations that city-centre areas would suffer the largest price drop, yesterday's data showed the biggest first-quarter price fall of 17.2 per cent hit non-landed homes in city-fringe areas.

Non-landed city-centre home prices fell 15.2 per cent while non-landed suburban home prices dipped 7.5 per cent, said the URA, which is set to give more details on the private home market on April 24.

So far, the mass market has been the most resilient of the three areas and will remain so, consultants said.

Many of the new private homes sold this year - some 2,000 units or more are expected to be sold for the first quarter, compared with 4,264 units during the whole of last year - were mass-market units. High-end home deals have been few and far between. If volumes rise due to more distressed sales, the price drop may be more pronounced, experts warned.

Prices also fell in the HDB resale market - for the first time since 2006 - albeit by just 0.6 per cent.

'While the fall in price of private residential properties in the first quarter was acute, the drab economic situation is expected to continue to place downward pressure on home prices in 2009,' said Knight Frank's director of research and consultancy Nicholas Mak.

But the fall may not be so sharp going forward. Developers have already made a 'quantum leap' in reducing prices during the first three months of the year, said Colliers International's director for research and advisory Tay Huey Ying.

'Although further declines in launch prices can be expected, the incremental drop is likely to be marginal and more gradual.'

She expects the rate of decline to taper off to around 8 per cent for the second quarter, and 3 per cent to 5 per cent for the third and fourth quarters. Overall, she expects an average fall of 25 per cent to 30 per cent this year, with a milder drop of 10 per cent to 15 per cent for the mass market.

However, the continued decrease does not signal that the bottom is close at hand.

'If it is going to be a deep and long recession, then the bottom of the market may not come in 2009,' said Chesterton Suntec International's head of research and consultancy Colin Tan.

Currently, all bets are out on whether the fall for this downward cycle will be deeper than expected though, according to Mr Singh, history shows that prices at the bottom of the present trough will be higher than those experienced at the lowest point of the previous downturn.

Private Home Prices Take Double-Digit Dive

Source : The Business Times, April 2, 2009

Even gravity-defying HDB resale prices show signs of cracking in Q1 with 0.6% slide

Private home prices plunged 13.8 per cent in the first three months of this year - a record quarterly drop as developers and other market players slashed their expectations.

It was the third quarterly fall in prices - and much steeper than the 6.1 per cent drop in the preceding Q4 2008, according to advance estimates released by the Urban Redevelopment Authority (URA) yesterday. Private home prices dipped 1.8 per cent in Q3 2008 after 17 straight quarters of growth.

Prices of resale HDB flats, which seemed to defy gravity and grew throughout 2008, also fell in Q1 2009 - by 0.6 per cent - after nine quarters of growth.

Analysts were expecting a significant drop in private home prices, but the actual fall was bigger than thought. In recent months, developers have cut the selling prices of new homes and sellers of secondary properties have also trimmed their asking prices.

'The fall is not surprising as a lot of developers have reduced prices to move new units, and in the resale market, people are now asking for more reasonable prices,' said DTZ's senior director Chua Chor Hoon.

DMG & Partners Securities' analyst Brandon Lee said that new projects and units in previously launched but unsold projects, were being launched or relaunched at 10-30 per cent discounts to the original intended selling prices. Also, there were distressed sales in the secondary market.

Aggressive price cutting by developers seems to have paid off. An estimated 2,100-plus new homes were sold in Q1 - the highest level since the market was hit by the US mortgage crisis in the last quarter of 2007 and more than four times the number of new units sold in Q4 2008. But the pick-up in sales volume was at the expense of prices.

URA's non-landed private home price index for the Core Central Region, which includes the prime districts, financial district and Sentosa Cove, fell 15.2 per cent quarter-on-quarter in Q1. In the Rest of Central Region, prices fell 17.2 per cent. And in the Outside Central Region, which is a proxy for suburban mass-market locations, they fell 7.5 per cent.

The drop in HDB resale prices took some observers by surprise, as analysts tracking the sector had said that they would continue to rise in the first half of this year, though at a slower pace than in 2008.

'HDB resale prices increased some 32 per cent since Q1 2007 before reaching a new peak in Q4 2008,' said ERA Asia-Pacific associate director Eugene Lim. The marginal decrease in Q1 shows HDB resale prices are now moving in tandem with the deteriorating economic and unemployment conditions.

Analysts said that the main cause of the fall in HDB's resale index is the lower cash-over-valuation (COV) amounts that buyers are now willing to pay. 'The slight dip is probably due to more buyers of HDB flats being resistant to paying high levels of COV,' said PropNex chief executive Mohamed Ismail. 'While demand for HDB resale flats is evidently still strong, sellers in this economic climate are realising the weaker buying power of consumers.'

Private home prices are expected to continue falling in the rest of the year. 'While the fall in prices of private residential properties in the first quarter was acute, the drab economic situation is expected to continue to place downward pressure on home prices in 2009,' said Nicholas Mak, director of research and consultancy at Knight Frank.

But the pace of decline is expected to taper off. 'Developers have already made a quantum leap in reducing prices in Q1 2009 and although further declines in launch prices can be expected, the incremental drop is likely to be marginal and more gradual,' said Tay Huey Ying, director for research and advisory at Colliers International. Ms Tay expects the rate of decline in the URA price index to taper off to about 8 per cent in Q2 2009 and then 3-5 per cent for each of the subsequent two quarters.

For the full year, analysts put the overall drop in private home prices at 20-30 per cent, with homes in the suburban areas taking the smallest hit.

The fall in HDB prices, on the other hand, is expected to pick up steam in the rest of 2009. Analysts expect that HDB resale prices will fall by between 5 and 15 per cent for the whole of 2009.

URA To Launch Hotel Site At Short St In Reserve List In 2 wks

Source : The Business Times, April 2, 2009

The Urban Redevelopment Authority (URA) on Thursday announced that it has accepted an application from a developer to release for sale by tender a site at Short Street for hotel development.

The 99-year leasehold site is being offered through the reserve list system.

'URA has received an application from a developer who has committed to bid at a price of not less than $8.8 million (US$5.8 million) for the land parcel at Short Street. In accordance with the procedures of the reserve list system, URA is making public this price. However, the identity of the applicant will not be released,' the planning authority said in a news release.

The tender will be launched in about two weeks and close after about eight weeks.

The site, with a land area of about 0.12 hectare, can be developed into a 12-storey boutique hotel with about 100 rooms. The site is located within the Bras Basah-Bugis district, which has a synergistic cluster of arts, culture and education facilities, URA noted.

Berkeley Homes To Hold Show In S'pore

Source : The Business Times, April 2, 2009

Berkeley Homes is holding an exhibition here this weekend for its London development City Quarter.

The project, in Leman Street, not far from the Tower of London and the financial district, consists of two phases of new apartments and penthouses and one phase of the same inside a listed Victorian sugar warehouse that dates back to 1887.

City Quarter offers a daytime concierge, night porter, CCTV coverage and secure underground parking. It is well-connected to the rest of London through public transport, with rail lines within walking distance. It is also close to City University and London Metropolitan University's city campus.

Berkeley said its sound finances mean it can go ahead with the project, as others fall victim to the economic downturn.

It believes the project will appeal to Singaporeans, given the stronger Sing dollar against the British pound.

The exhibition will be held at Singapore Marriott Hotel. More details and reservations are available through the website www.cityquarter.co.uk.

Manhattan Price Slide Gives Sellers The Chills

Source : The Business Times, April 2, 2009

(NEW YORK) Consider apartment 13C at 730 Park Avenue on Manhattan's storied 'Silk Stocking' district. It has seven rooms, a fireplace, excellent nearby schools - and a price that has been cut 46 per cent.

Price support gone: Big buyers who used to come off Wall St with bonus in hand did not appear this year

The tale of 13C illustrates a role reversal of sorts underway in Manhattan real estate.

Sellers of property have called the shots for years on the 58.8 square kilometre island that is the financial capital of the United States. But now buyers are having their day, according to the first-quarter reports due from major real estate brokerages today.

In the fourth quarter of 2008, for example, resale median prices in Manhattan fell 9.5 per cent for condominiums and 5.2 per cent for co-ops compared with the third quarter of 2008, according to real estate website StreetEasy. com.

This quarter, they declined even more, both compared with the prior year's first quarter and sequentially, said Sofia Kim, the website's head of research.

From the market peak between the fourth quarter of 2007 and the first quarter of 2008, listing prices - typically higher than the selling price in a buyers' market - plunged between 10 and 20 per cent.

'I still don't think the market has bottomed out,' said Ms Kim, who expects prices to decline at least another 10 per cent.

In the first quarter of 2009, the number of Manhattan homes on the market hit 15,460, a 41 per cent increase compared with the first quarter of 2008, according to Street Easy.com data.

The reports are expected to reflect job losses on Wall Street, which have depleted Manhattan's pool of potential homebuyers, causing uncommon declines in real estate prices.

In February, New York City's unemployment rate rose 1.2 percentage points to 8.1 per cent from January, the highest level since October 2003, the state Department of Labor said last week.

The reports paint an ugly picture for sellers in the first quarter, when few creditworthy buyers were prepared to step into the market, those privy to the reports said.

'This is the first quarter that we're really seeing price drops,' said Pam Liebman, CEO of the Corcoran Group, the city's largest real estate brokerage.

'These days, the buyers are feeling better than the sellers. The last couple of years, it was the other way around,' Ms Liebman said.

In a market where prices have steadily risen for years, 'a seller today simply has to be the lowest in their category', said Brown Harris Stevens broker Elaine Clayman.

'They have to understand that their apartment could be worth less in a month,' said Ms Clayman, who has seen rejected buyers return with lower offers, generating 'tremendous frustration for the seller'. Sellers are struggling to accept this new reality, said appraiser Jonathan Miller, author of brokerage Prudential Douglas Elliman's market report.

Mr Miller said that while sellers no longer put their prices at 10 per cent above their building's peak price, they are still reluctant to price their homes below that peak price.

'Sellers are still the farthest behind the market I've ever seen,' he said.

Sellers must acknowledge the shrinking of the market in the aftermath of the upheaval on Wall Street, which cost jobs as well as billions of dollars in bonuses that financial services employees might have used to trade up to a new living space, said Paul Herrick, a real estate lawyer. He estimates his business in the first quarter was off 50 per cent compared with last year.

Already in 2008, Wall Street firms slashed bonuses by 44 per cent, cutting the total to US$18.4 billion from US$32.9 billion in 2007, state Comptroller Thomas DiNapoli said in a January report. With intense pressure on banks and other companies getting government bailouts to rein in compensation, that figure could head lower this year.

As a result, Mr Herrick said, bonus buyers have gone missing from the market. 'The buyer who comes off Wall Street with bonus in hand did not appear this year. Usually, that buyer moves big time into the market by the second week of January.' - Reuters

Office Occupancy Posts Steepest Fall Since 1997

Source : The Business Times, April 2, 2009

Rents set to slide further after 18% average islandwide drop in Q1

The islandwide average office occupancy rate slid 2.1 percentage points quarter on quarter to 93.6 per cent in Q1 2009, according to DTZ. This is the steepest quarterly fall since Q3 1997, when a decline of 2.6 percentage points was recorded.

No lack of space: During the last office slump, shadow space also emerged, and according to CB Richard Ellis research reports, this amounted to more than one million sq ft at end-2002

The average office occupancy rate at Raffles Place was 92.9 per cent at end-Q1 2009, translating to the greatest quarterly decline of 2.7 percentage points since Q4 2004 when the occupancy rate fell 2.8 percentage points, DTZ said.

'Office occupancies in Anson Road/Tanjong Pagar and decentralised areas suffered even larger declines of 3.6 percentage points to 93.7 per cent and three percentage points to 95.2 per cent respectively, due partly to the completion of Murray Terrace and two transitional office projects - 11 Tampines Concourse and Mountbatten Square,' the property consultancy group said yesterday. Office vacancies are expected to rise further and rents will slide.

DTZ executive director Ong Choon Fah said: 'Office demand has almost collapsed. Substantial new supply is starting to come on stream from this year, followed by more supply next year and in 2011. In addition, there is competition from shadow space.'

Shadow space refers to excess space that companies try to sub-let. There was at least 106,000 sq ft of such space available for leasing in Q1, according to DTZ. 'This constituted only 2.9 per cent of the total vacant office space, but is expected to grow in the next few quarters as more companies are likely to return excess space to the secondary market through cost-cutting measures,' DTZ said. 'In addition, some companies which have pre-leased space in new projects completing within these two years are likely to sub-lease excess space as they further streamline business operations and intensify space usage.'

BT understands that Macquarie is prepared to sub-let some of the space it has signed up for at Marina Bay Financial Centre's (MBFC) Tower 2 under the project's first phase, which is slated to be ready in Q2 2010. Macquarie has taken more than 74,000 sq ft on levels 16 to 18 of the tower.

Market watchers said they would not be surprised if DBS Group too tries to sub-let part of the 700,000 sq ft it has leased at MBFC's Tower 3, in the project's second phase, given that it axed some 900 staff in November.

Elsewhere in Singapore, Citibank is said to be offering over 100,000 sq ft of shadow space at various locations, including Capital Square, Marsh & McLennan Centre and Millenia Tower.

DTZ executive director Angela Tan said: 'Shadow space, which usually comes with existing fit-outs and shorter lease terms, allows tenants to save on initial set-up costs and provides flexibility.'

Shadow space also emerged during the last office slump. According to CB Richard Ellis research reports, this amounted to more than one million sq ft at end-2002.

DTZ said the fall in office rents gathered momentum in Q1 2009, with an average decline of 18 per cent from the preceding quarter across the island. Prime office rents in Raffles Place dived 25 per cent quarter on quarter to an average of $12 psf per month in Q1.

Average office rents in Tampines Finance Park fell the most, easing 32 per cent to $5 psf per month amid an increase in supply emanating from the newly completed 11 Tampines Concourse and the availability of shadow space at Tampines Plaza.

Q1 Industrial Rents Fall At Faster Pace

Source : The Business Times, April 2, 2009

7% average drop q-o-q follows 3% decline in 4Q08: DTZ

Industrial rents fell faster in the first quarter of this year against a backdrop of shrinking demand amid the recession.

DTZ said yesterday the average drop was 7 per cent quarter on quarter, after a 3 per cent decline in the preceding Q4 2008.

Average rents for upper-storey private conventional industrial space fell 7.5 per cent quarter on quarter to $1.85 psf per month in Q1, after a 2.4 per cent dip in Q4.

First-storey rents fell 4.3 per cent to $2.20 psf per month in Q1, again a bigger decline than 2.1 per cent in Q4.

Hi-tech industrial property, which includes business and science park space, has been hit by a double whammy of less spillover demand from the office sector and lower industrial demand - and saw the biggest drop in rents in Q1. The average monthly rent for this space slid 9.3 per cent quarter on quarter to $3.90 psf in Q1, after a 4.4 per cent drop in Q4.

DTZ said leasing activity was quiet in Q1, as manufacturers focused on cost containment. Sub-letting activity is expected to increase over the next few quarters as tenants downsize operations and return space to the secondary market. A huge supply of 15.4 million sq ft of private industrial space is slated for completion this year. This includes about 2.4 million sq ft of business park space, of which about 48 per cent is pre-committed.

'In the wake of weaker demand, this large impending supply of industrial space will add downward pressure on rents,' DTZ said. Industrial property investment sales in the first three months of this year include Premium Automobile's $12 million purchase of a site at 281 Alexandra Road for a sales, service and parts facility.

And Beng Kuang Marine's fully owned unit Pico Enterprise, a long-term tenant of 38 Tuas View Square, obtained an option to buy the 60-year leasehold property for $7.2 million. With the economy showing no sign of bottoming, the outlook for the industrial property market is bleak, DTZ said.

'Competition among industrial landlords is expected to intensify, especially in the face of huge new supply this year,' it said.

'To help ease occupancy costs, JTC Corp recently relaxed the 50 per cent sub-letting cap and allowed tenants to sub-let their entire gross floor area until Dec 31, 2011.

'JTC and the Housing and Development Board also gave 15 per cent rent rebates to their tenants. These will add to pressure on other landlords to lower rents and offer more lease incentives or flexible lease structures to retain existing tenants and attract new ones.'

Property Transactions With Contract Dates Between March 16th - 21st, 2009

Horizon Towers Sale Won't Go Ahead

Source : The Business Times, April 2, 2009

After a protracted battle that lasted more than two years, the minority owners of Horizon Towers have finally gotten their wish - the $500 million collective sale of the property to Hotel Properties Limited (HPL) and its partners has been called off.

Singapore's Court of Appeal on Thursday dismissed the en bloc sale after four owners appealed to it to throw out a High Court decision handed down last July that backed the property's sale of the property to HPL and partners Morgan Stanley Real Estate and Qatar Investment Authority.

The Court of Appeal's decision is the final decision on the matter, which means that the acquisition of the property will not proceed.

HDB Resale Flat Prices Start To Ease

Source : The Straits Times, April 02 2009

First-quarter dip is first since 2006 and points to end of record run

PRICES of HDB resale flats fell in the first quarter of this year - the first decline since 2006 and a sign that the two-year run of record-breaking gains has ended.

Larger units bore the brunt of the price drop in HDB flats, and property agencies expect a decline of between 2 per cent and 10 per cent in the resale market for the full year. -- ST FILE PHOTO.

Flash estimates yesterday showed that prices dropped by 0.6 per cent for the first three months, compared with the fourth quarter of last year.

Prices in the fourth quarter had increased by 1.4 per cent over the previous period and helped drive resale flat prices up by a hefty 31.2 per cent over the past two years.

The latest numbers caught industry experts by surprise and underline how the worsening recession has hit the Housing Board (HDB) market sooner than expected.

Many analysts had predicted further increases in resale prices with a decline becoming apparent only later in the year.

Agency chiefs from both PropNex and ERA Asia Pacific had recently forecast that HDB resale prices could rise by a further 3 per cent to 5 per cent this year.















But yesterday's numbers have altered expectations overnight, with analysts now predicting a decline of anything from 2 per cent to 10 per cent this year.

Tell-tale signs in the market signalled that prices have started heading southwards, in tandem with private property prices, which plunged 13.8 per cent for the first quarter of this year, said Prop- Nex chief executive Mohamed Ismail.

'The gloomy outlook for the past few months, coupled with more retrenchments, have hit home, and even the HDB market is feeling it,' said Mr Ismail.

PropNex and ERA have reported buyer resistance to flats above $500,000, with five-room and executive flats feeling the brunt of the price slide.

Such flats are now being sold at below valuation, in some cases up to $40,000 under, said ERA associate director Eugene Lim.

However, there is still strong demand for three- and four-room flats as buyers and permanent residents go for the safer option, he said.

ERA transactions showed that four-room units made up 41 per cent of its sales in the first quarter, compared with 38 per cent in the fourth quarter last year.

Despite the slight dip in prices, HDB flats are generally 'still holding' due to relatively strong demand, say experts.

Valuations of bigger flats are also likely to be lower in the face of decreasing transaction prices.

'This will have the multiplier effect of bringing down prices for these flat types,' said Mr Lim.

HDB's latest numbers did not surprise Knight Frank's director of research and consultancy, Mr Nicholas Mak, who had predicted bearish numbers from last year.

'HDB prices cannot go against the broad economic trend, when almost all asset prices are depreciating,' he said.

Chesterton Suntec International's head of research, Mr Colin Tan, said it is logical that HDB resale prices have 'turned a corner', partly because the supply of attractively priced new flats has increased.

As demand for HDB resale flats has relatively eased, so have their prices, and they will fall gradually from here, although not drastically, he added.

ERA and Knight Frank are estimating a decline of 5 per cent to 10 per cent over the year, while PropNex has put it at 2 per cent.

Demand for resale flats will continue to come from permanent residents, people downgrading from private properties to HDB flats and those downgrading from larger to smaller homes, said ERA's Mr Lim.

He expects total resale transactions for this year to be around 30,000 units, compared with last year's 28,419 units, with three- and four-room units making up the bulk of sales.

Demand for smaller flat types looks set to remain high amid the recession.

HDB's quarterly sale of 150 two- and three-room flats spread across Punggol, Queenstown, Sengkang and Yishun attracted 427 applications yesterday by the close of its first day.

City Fringe Home Values Fall The Most

Source : The Straits Times, April 02 2009

A dollar invested in a suburban flat is holding its value better

THE property downturn has crossed an unexpected frontier, with the index measuring the values of private flats on the city fringe falling below that which tracks those in suburban areas - the first time this has been recorded.

Values for private units closer to the city are typically thought to hold up better than those in the suburbs but their rate of price decline in the first quarter means that this belief may no longer hold true.

Simply put, a dollar invested in a suburban flat is holding its value better than the same ploughed into a city fringe unit, if the investments were made in the last quarter of 1998.

The Urban Redevelopment Authority (URA) uses the fourth quarter of 1998 as a base for compiling its value indexes for three parts of Singapore.



























The anomaly arose after flash estimates yesterday showed that prices of city fringe flats fell by 17.2 per cent, the biggest fall of any housing sector. City centre flat prices dipped 15.2 per cent, while suburban ones slipped only 7.5 per cent.

Knight Frank's director of research and consultancy, Mr Nicholas Mak, said the first-quarter moves could be a 'statistical blip'. 'It's likely a one-off thing. If it were to continue in the next two quarters, we could have some sort of a price gap compression,' he said.

If mid-end property prices are diving at such a high speed, they would soon be near mass-market levels, he said.

This will not be sustainable as people who live in the suburbs will then upgrade to homes nearer to the city, said Credo Real Estate's managing director, Mr Karamjit Singh.

The URA began offering property indexes based on three geographical zones in 2007. The price movements in the different segments reflect the market better than just an all-in-one index.

34年来最大跌幅 私宅价格首季猛挫13.8%

Source : 《联合早报》Apr 02, 2009

在全球金融海啸和我国经济衰退的连串打击下,楼市终于招架不住,今年第一季的楼价猛跌,创下有史以来跌幅最大的一个季度。

最新的官方数据显示,我国私宅价格在今年第一季就下跌了13.8%,是近34年来最大的跌幅。市区重建局是在1975年第二季开始公布私宅价格变化的数据。

根据市区重建局的初步数据,新加坡私宅价格指数连续第三个季度下滑,私宅价格从去年第三季开始下滑2.4%,去年第四季又跌6.1%,到今年第一季不但无法止跌,还以更快速度滑落,由162.8点跌至140.3点。这意味着楼价已跌破07年第二季的水平。

以跌幅来说,在亚洲金融危机时,本地私宅价格也曾在98年第三季下跌13.2%。

市场人士认为,数个月的房市“严冬”,终于让卖主和发展商开始在现实面前“低头”,开始以大幅削价来刺激房市恢复蓬勃生机。

高力国际研究部主管郑惠匀表示,去年第四季和今年1月份,环球经济迅速下滑、信贷市场和就业市场恶化,新私宅单位的销售市场几乎静止,相信这是让价格过后下跌的原因。

3月份,发展商就以吸引人的价格,推出的新项目、单位或重新推出的项目,就包括水之轩(Caspian)、Double Bay Residences、莉雅苑(Livia)和The Quartz等。

以星狮地产的水之轩来说,这个西部共管公寓以每平方英尺580元“开跑”,价格比隔邻西湖园(The Lakeshore)的二手单位价格,足足便宜了20%。国浩置地也一口气削价8.5%,以每平方英尺平均595元,来重新推出The Quartz的剩余182个单位。

郑惠匀说:“发展商大幅削价的作法取得成效,吸引买家进场。在今年第一季,估计发展商售出的新单位就超过2100个。这是市场在97年第四季受美国次贷危机影响以来,最高的销售量,也比去年第四季出售的新单位,多了四倍以上。”

Orange Tee执行董事陈道俊也认同。他表示,发展商减少盈利空间,以更诱人的价格推出项目,或大幅削价来重新推出项目,以达到“清货”的目的,是导致代表中档领域的其余中央地区(RCR)这一回出现价格最大滑坡的原因。RCR的价格下跌了17.2%。去年第四季的跌幅是6.2%。

市建局昨天的数据也显示,代表高档领域的核心中央地区(CCR)公寓价格,也在今年第一季下跌了15.2%,也比去年第四季的6.5%跌幅明显加快许多,两个地区的跌幅也从单位数上涨到双位数。

2006年以来第一次 组屋转售价指数首季下跌0.6%

Source : 《联合早报》Apr 02, 2009

受经济放缓拖累,连续两年多保持上涨势头的组屋转售价开始下跌,今年第一季组屋转售价指数下降0.6%,是2006年以来首次下滑。

这个跌幅也比2006年第三季滑落的0.2%还要大。房屋经纪相信,接下来的组屋转售价还会继续下滑。

建屋发展局昨天公布的预估数据显示,今年首季组屋转售价指数一反去年第四季的1.4%涨幅,滑落至138.6点,显示组屋转售市场已趋软。

事实上组屋转售价指数的涨幅,自去年第二季就开始逐渐缩小,第四季的1.4%涨幅是之前七个季度以来最低的,因此这次转售价指数下滑0.6%,一般在市场预料之内。

C&H房地产董事经理卢元士说:“私人住宅的售价已经下跌,组屋转售价退低是迟早的事,我原先就估计第一季转售价指数会下滑不超过1%,相信这只是第一波,预料接下来还会继续下跌。”  

ERA助理副总裁林东荣指出,组屋转售价自前年首季以来已上涨了32%,今年第一季稍微滑落0.6%是意料中事,显示了组屋转售价正随着经济恶化和失业率上升而下滑。

ERA指出,随着经济放缓,较大型组屋单位如五房式和公寓式的售价已面对下跌压力,价格超过50万元的单位越来越难脱手,因为银行批准房屋贷款给潜在买家的要求,越来越严谨。

林东荣说:“尽管估价还是很高,但银行已越来越保守,有些买主只争取到70%的贷款,而不是以往的80%,申请到90%贷款的人更是少之又少。”

这也就是为什么有更多转售组屋都以低于估价的价格出售,有些单位更是低于估价三四万元。他说:“大型组屋可享有溢价的日子已经结束。”

林东荣指出,三房和四房式组屋市场则比较乐观,受经济衰退冲击,一些买主较不愿购买价格较高的五房式单位,反而选购四房式。

博纳集团(PropNex)总裁伊斯迈也相信,组屋转售市场的需求还是相当强劲。

他说:“尽管经济不景,还是会有私人住宅和组屋屋主要大屋换小屋,不少永久居民也宁可买屋而不租,而且市面上新组屋的供应还是不够。”

伊斯迈指出:“组屋转售价指数微跌,主要是因为有更多买家不愿意支付较高的溢价。”他估计,接下来两个季度的组屋转售价指数还会下跌2%至3%。

卢元士则预计,今年全年组屋转售价仍会继续下滑,第二季可能下跌1%至2%。ERA相信,整年的组屋转售价会下跌5%至10%。