Tuesday, July 31, 2007

CapitaLand's Q2 Net Profit Rises 480% to $912.6m

Source : The Business Times, July 31, 2007

SINGAPORE - CapitaLand, South-east Asia's biggest developer, on Tuesday posted a 480.6 per cent rise in second-quarter net profit due to higher luxury home sales and office rentals in its home base of Singapore.

The firm, partly owned by Singapore state investment firm Temasek Holdings, earned net profit of $912.6 million in the April-June quarter, up from a restated $157.2 million in the same period a year ago.

CapitaLand earns up to 80 per cent of its profits abroad, but like Singapore's other big property developers -- Keppel Land and City Developments -- it has benefitted from a surge in prices in Singapore's real estate market.

Office rents have risen 46 per cent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade. -- REUTERS

Boustead To Build High-Tech Devt In Ubi

Source : The Business Times, July 31, 2007

$74m design-and- build job due to be completed Dec 2008

ENGINEERING group Boustead Singapore, through its 91.7 per cent owned subsidiary, Boustead Projects Pte Ltd, has clinched a $74million contract to design and build a high-tech development in the Ubi district.

The 41,200 square metre floor area high-tech development, comprising two connecting glass buildings rising up to seven storeys, is due for completion by December 2008.

Strategically located next to the Pan-Island Expressway and near the future MacPherson MRT Station and Kallang-Paya Lebar Expressway, the project will boast state-of-the-art technology, including a fibre optic network, wireless connectivity, an integrated building management system and provisions for dual feed power supply and back-up power generators.

These features will cater to the back-office functions of transnational companies, as well as firms in the precision engineering and information technology sectors.

This is the fifth contract secured by Boustead Projects in the last few months. Since February, the Boustead unit has secured some $160 million worth of new projects, accounting for about half of the group's current order book of $320 million.

'This contract represents the largest contract secured by the group to date,' said Wong Fong Fui, chairman and group chief executive officer of Boustead.

'We hope to continue drawing on our vast expertise and established position for industrial real estate solutions to secure more design-and-build opportunities,' Mr Wong said.

The contract is expected to have a positive material impact on the profitability and earnings per share of the company in the current financial year ending March 31, 2008, and the next financial year ending March 31, 2009.

Boustead said that the contract is not expected to have a material impact on the net asset value per share of the company for the current and the next financial year.

Boustead Projects accounts for about 30 per cent of the group's revenue. The group's other key business units are energy, water & wastewater engineering, and geo-spatial technology.

The group's full-year earnings grew 42 per cent to $35.2 million for the year ended March 31, 2007, from $24.9 million previously.

This came on the back of a 19 per cent revenue rise to $343.86 million for the year ended March 2007.

The Boustead counter ended two cents lower at $2.18 yesterday, on volume of 94,000 shares.

No Property-Cooling Measures On The Horizon, Says Mah

Source : The Business Times, July 31, 2007

Government puts faith in market forces but will keep an eye on prices

The government does not seem inclined to roll out measures to cool the property market - at least in the near future.

'We prefer to let market forces work,' Minister of National Development (MND) Mah Bow Tan said yesterday.

It was the government's clearest response yet to recent market talk that cooling measures could be in the works.

On the sidelines of MND's inaugural Joint Scholarship Presentation Ceremony yesterday, Mr Mah was asked if the government was likely to announce measures to cool the property market. He said: 'We will try to avoid interfering in the market if we can.'

While the government is mindful of maintaining Singapore's price competitiveness, it prefers to do this by keeping supply ready and by keeping the market better informed.

To this end, the Urban Redevelopment Authority (URA) recently released median rentals for residential, office and retail sectors.

Along with the new monthly data on developers' sales numbers and prices, the median rental data is expected to alleviate fears that property prices are spiralling out of control. Mr Mah added: 'The data shows that property is still affordable and not as high as the headline numbers in media reports.'

In the data that was released by URA last week, sub-sale numbers had also increased considerably from 749 in Q1 to 1,254 in Q2. But this is still sustainable. 'If you look at the numbers, it's a long distance from (the previous peak of) 1996,' Mr Mah pointed out.

It will not, however, be entirely laissez-faire as far as prices go.

One of the government's chief concerns now is maintaining price competitiveness with other Asian capitals like Hong Kong and Tokyo. Mr Mah said that the government was confident of 'moderating prices'. He added: 'We will push out supply (of land) if there is a need.'

'The government will keep a close eye,' he stressed.

But again, Mr Mah tempered this comment by saying that the number of sites on the current Government Land Sales programme was adequate.

There will be a supply crunch in the residential sector in the short term, Mr Mah said, and reiterated that the government would look at interim measures to alleviate this.

The Housing and Development Board (HDB) already said last week that it would offer about 120 flats selected for Selective En-bloc Redevelopment Scheme (Sers), but not redeveloped yet, to the public in the short term. If these prove popular, Mr Mah said that, 'there are a few thousand units under the Sers programme that are not ready for redevelopment yet'.

DBS Vickers analyst Wallace Chu said he was 'comforted somewhat' by Mr Mah's comments. 'At least a direction is set,' he added

Ang Mo Kio Site May Fetch Over $500 PSF

Source : The Business Times, July 31, 2007

Bids for 99-year leasehold plot likely to be 65% higher than minimum offer

A PLUM 99-year leasehold condo site opposite Ang Mo Kio MRT Station could fetch bids of over $500 per square foot (psf) of potential gross floor area, say market watchers. This is at least 65 per cent higher than the minimum offer price of $302 psf of potential gross floor area received by Housing & Development Board for the reserve list site.

The plot, right next to the AMK Hub, can be developed into a new condo with 337,408 sq ft maximum gross floor area, enough for a condo with about 280 to 300 apartments averaging 1,200 sq ft, according to Knight Frank director Nicholas Mak.

He expects the site to fetch top bids of about $480 to $530 psf per plot ratio in the current bullish market, but given its prime suburban location, is not discounting bids of $550 psf ppr or even higher.

'This is one of the best residential sites in the second half 2007 Government Land Sales Programme. On a scale of 1 to 10, I would rate it 8 or 9,' Mr Mak says.

Assuming the site sells for $510 psf ppr, the breakeven cost for a new condo works out to around $800 to $820 psf. If the developer wants a minimum 10 per cent profit margin, he would be eyeing an average selling price of around $900 psf.

The developer can count on a huge pool of upgraders given that Ang Mo Kio is a mature HDB estate, Nicholas Mak reckons(Director of Knight Frank).

CB Richard Ellis executive director Li Hiaw Ho, who is predicting the winning bid to be above $400 psf ppr, and a selling price of around $800-900 psf for the new condo units that will be built on the site. 'This should be achievable if the residential market continues its current performance, by the time the project is ready for launch in mid-2008,' he added.

CBRE said that in the June/July period, units at Grandeur 8 condo a short distance away changed hands at $570 to $620 psf in the secondary market, while over at Bishan 8 condo, apartments have changed hands at around $800 psf.

Steady Rise In Property Loans

Source : TODAY, Tuesday, July 31, 2007

PROPERTY loans made up almost half of all loans in Singapore for the first half-year, a steady increase over the decade that reflected banks’ widened exposure to the real estate market amidst the ongoing property boom.

Outstanding property loans came to more than $94 billion, or 47 per cent of the total loan portfolio of commercial banks here, at the end of last month, the Business Times reported yesterday.

This contrasts with the 33 per cent from about a decade ago (end-1996) during the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

Housing and bridging loans made up some $64 billion as of June end, compared to about $63 billion six months ago, while building and construction loans were worth about $30 billion, up 21 per cent from a year earlier.

The increase in building and construction loans, which took a bigger share of the total loan pie, has also been much faster over the past few years. Loans to developers, under the building and construction category, are additionally risky due to the deferred payment scheme, which allows home buyers to pay only a fraction of the property price upfront.

The Monetary Authority of Singapore said its monthly statistical bulletin with banking data will come out today. — CHEOW XIN YI

Stocks Rise On Higher Home Rates

Source : TODAY, Tuesday, July 31, 2007

SINGAPORE’S stocks rose for the first time in four days, led by property stocks after second-quarter private-home prices climbed at the fastest pace in eight years.

A measure of property stocks had the biggest percentage decline last week among the nine industry groups on the Singapore. All Equities Index on concerns the Government will introduce measures to slow the rise in home prices and office rentals.

“The rising residential prices show that the property market is retaining its momentum,” said Mr Najeeb Jarhom, head of research at Fraser Securities in Singapore.

“Concerns over government measures to cool the market were overdone.”

The Straits Times Index rose 1 per cent to 3,526.29 at close, snapping three days of losses. About three stocks climbed for each that declined. August futures gained 1.1 per cent to 429.3.

CapitaLand, the nation’s largest developer, climbed 2.8 per cent to $7.25, its first advance in six days. The company said it was setting up two property funds to invest in retail developments in China and India. Luxury home developer Wing Tai Holdings gained 4 per cent to $3.66. Citigroup raised its price forecast to $4.62 from $4.31 and kept its “buy” rating, citing rising residential property prices.

Singapore’s private-home prices rose 8.3 per cent in the second quarter, the fastest pace in eight years, as the city’s economic expansion allowed developers to sell apartments at record prices. — BLOOMBERG

CapitaLand Earns Record Profits

Source : Channel NewsAsia, 31 July 2007

A man walks past a CapitaLand advert in Singapore

Singapore's biggest property company CapitaLand said Tuesday its second quarter net profit more than quadrupled to a record S$912.6 million (US$604.37 million) on the back of robust sales and valuation gains in its business portfolio.

The Singapore property developer, also ranked the largest in Southeast Asia, said for the six months to June it earned a record net profit of S$1.5 billion, up more than five times the year-earlier S$286.7 million.

"The exceptional performance was achieved on the back of fair value gains in respect of the investment properties portfolio, higher profits from development projects and higher portfolio gains," CapitaLand said in a statement.

Revenues were boosted by higher sales at its development projects in China and CapitaLand expects overseas markets to remain the drivers of future growth.

"Going forward, the group's prospects will be underpinned by our expanding overseas geographic footprint, even as we seek opportunities in Singapore's firm property market," said president and chief executive Liew Mun Leong.

"We will be focused as a major developer of residential, retail, commercial and integrated developments and rapidly extend our lead in the serviced residences business," he said.

CapitaLand said overseas revenues accounted for almost 70 percent of total sales in the first half of the year, compared with nearly 65 percent in the same period in 2006. - AFP

Three CBD Office Projects Given URA Approval In Q2

Source : The Business Times,Tue, Jul 31, 2007

Provisional permission also granted for several hotel projects

A SLEW of projects were granted provisional permission in Q2, according to latest Urban Redevelopment Authority statistics.

Afro-Asia Building: It will be torn down and the site redeveloped into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space

These include a business park development of 215,000 square foot gross floor area (GFA) for Eurochem Corporation at International Business Park (IBP) in Jurong East, and several new office projects in the CBD - including redevelopment of Afro-Asia Building on Robinson Road (which was once the headquarters of Nanyang Siang Pau), Asia Chambers at McCallum Street, and Marina House at Shenton Way.

Asia Chambers: Owner TM Asia Insurance Singapore Ltd will build a new 19-storey office project with about 161,000 sq ft GFA offices

Residential projects that received provisional permission in the April to June quarter of this year include a 316-unit condo by Tripartite Developers on Flora Road, off Old Tampines Road, and a 329-unit condo by Frasers Centrepoint unit FCL Land Pte Ltd on the freehold Far East Mansion site on Kim Yam Road. Another condo, with 300 units, on River Valley Road, by EC Investment Holding Pte Ltd, was also granted provisional permission in April.

And as reported in June, Hong Fok has obtained provisional permission to develop 369 apartments on Beach Road under a redevelopment of part of The Concourse.

Eurochem's business park project at IBP is expected to have about 180,000 sq ft net lettable area. Eurochem is expected to occupy part of the space, while the rest could be leased out. Allowed uses include data processing and backroom offices of banks.

The company will be developing this on a site that it bought from JTC Corp on an initial 30-year lease term with an option to renew for a further 22 years, BT understands.

The three CBD office projects granted provisional permission by URA in Q2 can generate about 480,000 sq ft GFA of offices. Hong Leong Group obtained provisional permission to redevelop Marina House at Shenton Way into a new office project with about 199,455 sq ft GFA of offices. Afro-Asia Shipping Co Pte Ltd received URA's nod to tear down its Afro-Asia Building on Robinson Road (with an MPH store at street level) and redevelop the site into a new project with about 121,100 sq ft GFA offices and 1,399 sq ft of shop space.

Assuming redevelopment work begins early next year, the redeveloped building could be ready around early 2010. The current owner bought it in the late 1960s. The site has a land area of about 16,000 sq ft and has a remaining lease of about 45 to 46 years.

Work on redeveloping Asia Chambers at McCallum Street is expected to begin in August. Owner TM Asia Insurance Singapore Ltd - part of the Tokio Marine & Nichido Fire Insurance Co group - will build a new 19-storey office project with about 161,000 sq ft GFA offices. The net lettable office space could be about 110,000 sq ft, of which around half or so is expected to be occupied by the group, which currently operates out of leased premises at Fuji Xerox Towers on Anson Road. Tokio Marine's project, which is slated for completion in late 2009, will see a chunk of the building's street level space devoted to public spaces with trees, other greenery and sitting areas to serve as a meeting point in the location.

URA also granted provisional permission for several hotel projects in Q2, such as a 355-room hotel on Clemenceau Avenue/Unity Street to be developed by Hong Kong's Park Hotel Group); and a 90-room facility at Fullerton Square granted to Sino Land subsidiary Precious Quay Pte Ltd. The latter project also includes about 26,700 sq ft GFA of retail space.

In May this year, URA temporarily banned conversion of office use in the Central Area to other uses until December 2009 to curb further depletion of the existing office stock on the island. Even prior to that announcement, though, the trend had changed, with some owners of ageing CBD office blocks considering redeveloping their premises into office blocks, instead of the earlier trend of going for apartments, on the back of rising CBD office values.

Nonetheless, the redevelopment of these properties into bigger new office projects will worsen the office crunch in the short term while they are being redeveloped, say market watchers.

Two River Valley Condos Fail To Get Asking Prices

Source: The Straits Times, Tue, Jul 31, 2007

NO TAKERS FOR NOW: Owners of Pacific mansions are seeking $1.18 billion. Marketing consultants are said to be negotiating with ‘interested parties’, as developers are finding these prices too steep.

RECENT high-profile collective sales of Pacific Mansions and Rivershire have both failed to attract bids from developers willing to match the prices being sought by owners at the two River Valley condominiums.

Marketing consultants of both sites, however, are understood to be negotiating with 'interested parties' to see if they can at least achieve the reserve price - ranging from 10 per cent to 20 per cent below the asking price.

Asking prices at the two condominiums were optimistically priced at the very top end of market levels.

The current collective sale record stands at $2,338 per sq ft (psf) of potential gross floor area at The Ardmore in the prestigious Ardmore area.

Owners at the 45-year-old Pacific Mansions in River Valley Close, however, asked for even more - about $2,400 psf of potential gross floor area. This placed its total price at $1.18 billion.

Although the property market is booming, the perception is that the asking price for Pacific Mansions is high and unachievable for now, said a source.

Rivershire in the Leonie Hill area was put up for sale in late June at $348 million, or a hefty $2,200 psf of potential gross floor area.

The recent hike in development charge has no impact on the sites, as no such charge is payable for both sites.

There is talk that the Pacific Mansions' tender had attracted a few expressions of interest but no firm bids.

Mr Steven Ming, director of investment sales at Savills Singapore, which is marketing Pacific Mansions, only said: 'We have received interest, and we are in discussions with the interested parties.'

Knight Frank, which is marketing Rivershire, is also believed to be in talks with keen parties.

Nearby, owners of the 99-year leasehold Grangeford Apartments, who had asked for $2,016 psf of potential gross floor area, also failed to get what they had asked for.

The best they got was an offer from Overseas Union Enterprise - believed to be around $1,820 psf - subject to approval by owners controlling 80 per cent of the property's share values.

The deal is likely to be sealed soon. CB Richard Ellis, which is marketing the site, said it is waiting for lawyers to confirm the approval level.

The absence of finalised deals for these condos has not stopped others from hitting the market at relatively high prices.

These include Trendale Tower in the Cairnhill Road area, which was relaunched for sale in late July at $2,477 psf of potential gross area. Its earlier asking price in May, when it was put up for sale via an expression of interest exercise, was at $2,200 psf of gross floor area.

Recently, City Towers in Bukit Timah Road was also relaunched for sale at a revised asking price of $2,100 psf of potential gross floor area.

Property consultants say the residential market is still rosy, though some collective sales may stall as the owners' asking prices are far beyond what the market is currently willing to pay.

'It really depends on the site's potential,' said one.

CapitaLand Q2 Net Profit Up Near Six-Fold (AsiaOne News)

Source : AsisOne News, Tue, Jul 31, 2007

SINGAPORE, July 31 (Reuters) - CapitaLand , Southeast Asia's biggest developer, on Tuesday posted a nearly six-fold surge in second-quarter net profit on the back of strong home sales in Singapore and China.

Like Singapore's other big property developers -- Keppel Land and City Developments -- CapitaLand has benefitted from a surge in prices in the city-state's real estate market.

Office rents have risen 46 percent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade.

The firm, partly owned by Singapore state investment firm Temasek Holdings , saw its net profit rise to its highest ever of S$912.6 million ($603.2 million) in the April-June quarter, up from a restated S$157.2 million in the same period a year ago.

"The exceptional performance was achieved on the back of fair value gains in respect of the investment properties portfolio, higher profits from development projects and higher portfolio gains," it said in a statement.

Quarterly revenue rose 21 percent to S$935.6 million.

CapitaLand has in the past earned up to 80 percent of its profits abroad, but Singapore accounted for 69 percent of its pre-tax profit in the first half of 2007.

The developer said divestment gains as well as higher fee income from its real estate investment trust (REIT) subsidiaries -- CapitaMall Trust , CapitaCommercial Trust and CapitaRetail China -- also contributed to its highest ever quarterly net profit.

CapitaLand, which earned S$1.5 billion net profit in the first half, said its finance costs rose 32 percent in the second quarter mainly due to higher gross debt and rising interest rates.

CapitaLand shares, which closed Monday at S$7.25, have risen 17 percent this year to outperform rival City Developments' 15 percent gain. Singapore's property stock index has risen 27.6 percent this year.

Regulating Property Agents

Source : The Straits Times, July 31, 2007

Accreditation scheme enhances professionalism

The Housing & Development Board (HDB) and the Inland Revenue Authority of Singapore (Iras) have been working with the Singapore Institute of Surveyors and Valuers and the Institute of Estate Agents to provide property buyers/sellers with more effective consumer protection, as well as support the drive of the real-estate industry towards greater professionalism.

To this end, an accreditation scheme for real-estate agents, called the Singapore Accredited Estate Agencies (SAEA) Scheme, was set up in November 2005. The scheme sets minimum education and practice standards for estate agents, and conducts disciplinary hearings into complaints against member agents and their agencies. We will continue to work with the SAEA on the accreditation scheme to enhance and improve the standards of professionalism in the industry.

To prevent HDB flat buyers and sellers from being taken advantage of by unscrupulous estate agents, HDB conducts monthly resale seminars on the policies and procedures pertaining to transactions in resale HDB flats. A comprehensive guide on the resale process is also available on the HDB InfoWeb at www.hdb.gov.sg.

HDB has also set up the e-Resale System which allows resale flat buyers and sellers who transact without engaging housing agents to submit resale applications and valuation requests electronically.

Property buyers and sellers may check if a housing agent is licensed, or view the criteria for granting of a house agent's licence, on www.iras.gov.sg.

Those who need clarification on the policies and procedures involving transactions in resale HDB flats can call HDB's Sales/Resale Customer Service Line on 1800-8663066, or visit HDB Hub during office hours.

For enquiries on housing agents' licences, they can call the Iras enquiry line on 6351 2465.

Tan Heng Huay
Deputy Director (Public Affairs)
Housing & Development Board

Lee Leng Kiong (Mrs)
(Corporate Communications)
Inland Revenue Authority of Singapore

CapitaLand Q2 Net Profit Up Near 6 Fold (The Straits Times)

Source : The Straits Times, July 31, 2007

SINGAPORE - CAPITALAND, Southeast Asia's biggest developer, on Tuesday posted a 480.6 per cent rise in second-quarter net profit due to higher luxury home sales and office rentals in its home base of Singapore.
The firm earned net profit of $912.6 million in the April-June quarter, up from a restated $157.2 million in the same period a year ago.

CapitaLand earns up to 80 per cent of its profits abroad, but like Singapore's other big property developers - Keppel Land and City Developments - it has benefitted from a surge in prices in the Republic's real estate market.

Office rents have risen 46 per cent in the past 12 months in Singapore, beating increases in rival financial centres such as Tokyo and Hong Kong, while prices for private homes have risen to the highest level in nearly a decade. -- REUTERS



Govt To Take 'Light Touch' Approach To Property

Source : The Straits Times, July 31, 2007

It will give out more data on prices and ramp up supply of homes and offices By Jessica Cheam

THE Government is not hitting the brakes on the roaring property market, but it is keeping a sharp eye on soaring prices and the office squeeze.
This assurance came yesterday from National Deve- lopment Minister Mah Bow Tan, who said the Government was more inclined towards applying a light touch.

It will depend on 'non-interventionist' measures like providing more information to the public on prices and rents while ramping up the supply of homes and offices.

The Government sees this shortage of space - which has resulted in rising home and office rents - as a short-term problem that is best tackled with like-minded measures.

'We don't want to use long-term solutions to try to solve short-term problems. If you do that, you might create problems in the long run,' said Mr Mah.

He added that the Government will look into releasing temporary premises as a way of helping the supply side of the equation.

Video Link - http://tinyurl.com/3x8g47
Skyrocketing property prices? No need for alarm, says Mah (2:15)

The HDB is also rolling out a pilot project to lease 120 vacated flats under the Selective En-bloc Redeve- lopment Scheme for terms of one or two years, depending on public response.

A 'few thousand units' would be available to help tide the market over the interim period before long- term supply kicks in with the completion of new residential projects, said Mr Mah.

Another initiative announced recently involved the launch of 'transitional' office sites by the Urban Redevelopment Authority (URA), which can be built on quickly.

The other weapon in the Government's approach is to provide buyers and sellers with information - a lot more of it, and data that is more up to date.

Such data is seen as particularly important, given the headlines that rising prices have commanded of late.

Figures by the URA last week showed private home prices climbed 8.3 per cent in the April to June quarter, while the Housing Board revealed that resale prices for flats jumped 3 per cent in the same period.

Both increases are the highest in almost a decade.

Mr Mah maintains that in such an environment, providing useful data can clear the air for buyers and sellers.

He said he preferred to 'let the market forces work', but for them to work effectively, 'there must be sufficient information'.

A wealth of information on sale prices and rent levels for both residential and HDB homes, HDB resale prices and offices has already been released and made available online.

It allows buyers and sellers to get a better handle on how the market is moving in particular areas.

Mr Mah cautioned the public to 'make a distinction' between data analysis reports or projections by property analysts and the hard facts provided by the authorities.

'You can have many different reports, but you should take URA and HDB reports as a snapshot of what is really happening on the ground,' he said.

Mr Mah added that he was confident that with these measures - comprehensive data and temporary supply - 'we will be able to moderate the prices'.

Mr Mah was speaking on the sidelines of a Ministry of National Development joint scholarship presentation ceremony, where 36 awards were given out.

This is the first time the ministry's agencies - such as the National Parks Board, HDB and URA - have award their scholarships in a single ceremony.

New Rules For Lawyers To Curb Money Laundering

Source : The Straits Times, July 31, 2007

They will have to scrutinise potential clients' profiles, sources of funds By K.C. Vijayan, Law Correspondent

LAWYERS will soon be barred from holding funds from unnamed sources, and will have to check their clients' backgrounds before agreeing to represent them.
The rules, which were published under the Legal Profession Act recently, will kick in on Aug15 and are meant to prevent lawyers from being used by their clients to launder 'dirty money'.

These rules will apply to legal work done in areas such as real estate, securities accounts management or mergers and acquisitions.

They also apply to matters related to the amount of money to be held, the complexity of the case, and the business or risk profile of the client or parties with controlling interest over the client.

Lawyers will have to be satisfied that there is nothing untoward in the business relationship, or between the client and any other party to the case.

A lawyer who comes up against a cagey client is obliged to drop the case. If a lawyer suspects illicit activity linked to drug trafficking, corruption or serious crimes, he has to report this to the Commercial Affairs Department.

The Law Society's governing council, as enforcer of these rules, can ask a lawyer to produce documents or an explanation if a complaint is filed.

The society's spokesman said last Tuesday that the rules have been put in place to enable Singapore to play its part as a member of the Financial Action Task Force, an inter-governmental body set up to develop, promote and monitor policies that fight money laundering and the funding of terrorism.

No known cases have been reported so far of unsavoury characters who park gains from shady businesses with lawyers to give the funds an appearance of respectability.

The rules have been seen as a landmark move by lawyers here, who liken them to measures in place for banks.

Just as banks follow KYC or Know Your Customer checklists before accepting client transactions, these rules will forbid lawyers from accepting monies from clients with fictitious names.

Due-diligence checks may involve database searches and inquiries, which will require a prospective client to show he has a legitimate business and that his funds are coming from lawful sources.

Lawyer Amolat Singh said: 'In a way, lawyers are like part-time bankers in that they, too, hold deposits for clients. The new laws make explicit the need for checks to protect them from being a conduit for illicit funds.'

With the rules in place, an overseas client will no longer be able to deposit monies here with a lawyer for a specified purpose and then cancel the deal months down the road and move the funds to third country without a satisfactory reason, he added.

Drew & Napier LLC director Wendell Wong described the rules as a 'paradigm shift' that subjects professional and commercial interests to national interest and public-policy considerations.

He said: 'While for lawyers, it means more work has to be done, it is in the interests of good governance and it is a good start, bearing in mind we are up against organised syndicates involved in money laundering.'

Skyrocketing Property Prices? No Need For Alarm, Says Mah

Source : The Straits Times, July 30, 2007 Monday

The Government will depend on 'non-interventionist measures' to cool the red-hot property market.

Video Link - http://tinyurl.com/3x8g47

National Development Minister Mah Bow Tan said his ministry's twin approach is to give out more information and push up supply.

Speaking to the media just three days after the release of Singapore's first comprehensive data on housing prices, Mr Mah also said 'there's no reason to be alarmed'.

Govt To Take A More 'Hands-Off' Approach To Property Market

Source: The Straits Times, July 30, 2007

'I think we try to avoid interfering in the market if we can and that's the reason why we continue to depend on broad dissemination of information even sometimes persuading various parties to come up with more accurate information and then collating them and getting URA and HDB to push out this info in a very timely and very comprehensive manner,' said Mr Mah. -- ST PHOTO: LIM SIN THAI

THE Government will depend on 'non-interventionist measures' to cool the red hot property market.
National Development Minister Mah Bow Tan said the Government's twin approach is to give out more information and push up supply.

Speaking to the media just three days after the release of Singapore's first comprehensive data on housing prices, Mr Mah also said 'there's no reason to be alarmed.'

Referring to sub-sale figures, he said: 'If you look at the numbers, it's quite a distance away from what we have in the mid 90s, particularly in 1996.'

The minister also declined to say if the government will introduce more measures to cool the property sector.

'I think we try to avoid interfering in the market if we can and that's the reason why we continue to depend on broad dissemination of information even sometimes persuading various parties to come up with more accurate information and then collating them and getting URA and HDB to push out this info in a very timely and very comprehensive manner,' he said.

Mr Mah added long term measures are already in place.

There will be sufficient supply to meet housing demands over the next three to five years.

In June, the Ministry of National Development (MND) announced the biggest Government Land Sales (GLS) Programme with enough land for about 8,000 private homes.

Another 56,182 housing units are in the pipeline. Of which 30,158 units have not been sold. These units are expected to be ready between the end of this year and 2010

'The long term measures are very well in hand and we know that there's going to be enough supply in the next 3 to 5 years. I think that's a fact and nobody disputes that. It's really what happens in the short term.

'I think there's a lot of excitement and maybe a little bit of panic in the short term - maybe next month, 6 months, one year', said Mr Mah.

This is where measures like releasing vacated flats under the Selective En Bloc Redevelopment Scheme or Sers will help.

120 such flats in Tiong Bahru will be released for short term rental.

The flats, which are built in the 50s, will be spruced up by the Managing Agents, tasked with renting out the flat.

'The Managing Agent will do some renovations, touch up, repairs and do some short term rental for one or two years. It's not going to make a big dent in the market but it will test the market,' Mr Mah explained.

If response to these flats is good, up to 5,000 more units can be added to the supply over the next there years.

Mr Mah said he's confident that by pushing out information and increasing housing supply, property prices will be moderated.

He said the latest data released last Friday showed that although prices have gone up across the board, rates remain 'affordable'.

'The government will keep an eye on the situation to make sure we remain competitive,' he said.

Property Loans Rising In Boom Market

Source : The Business Times July 30, 2007

They make up 47% of total loans by commercial banks at end-June

(SINGAPORE) As the property boom chugs full steam ahead, banks' exposure to the sector has been steadily widening and their risks may be deepening, especially as a result of the prevalence of deferred payment schemes.

Work in progress: Loans to the building and construction industry jumped 21 per cent to $30 billion from about a year ago

As at end-June, housing and bridging loans as well as loans to the building and construction sector made up nearly half - a high of 47 per cent - of the more than $200 billion loan portfolio of commercial banks here, according to preliminary figures obtained from the Monetary Authority of Singapore (MAS).

This has been a steady increase from the 33 per cent from about a decade ago (end-1996) around the height of the last property boom, and the 42.5 per cent at the start of the current property boom at the end of 2002.

In absolute terms, the housing and bridging loans were worth some $64 billion as at end-June, compared to about $63 billion six months ago.

Loans to the building and construction sector stood at about $30 billion as at end-June, an increase of 21 per cent from a year ago, said MAS.

Not surprisingly, the run-up in property prices has led to an increase in housing and bridging loans (the consumer loans), but this rise has slowed dramatically from the early years of the current boom.

Right after the current property boom started, housing and bridging loans surged 17 per cent between end-2002 and end-2003 to reach $52.2 billion. Since then, the increase has slowed to about 2 per cent for the first six months of the year and from end-2005 to the end of last year, the value of housing and bridging loans increased by only 2.2 per cent.

Housing and bridging loans' share of the total loans of commercial banks - while still the biggest - has also declined over the last couple of years. Their share of total loans, after building up over the years to a peak of 33.8 per cent at end-2005 has dipped over the last one-and-a-half years to about 32 per cent as at end-June this year.

What is perhaps more significant for the financial sector is that the loans to the building and construction sectors including loans made to developers have been expanding much faster over the past few years and have been taking up a bigger share of total loans extended by banks.

Loans to developers have an added element of risk because of the deferred payment scheme which allows home buyers to pay only a fraction of the property's price upfront.

Loans to the building and construction industry, after contracting between 2004 to end-2005 as the construction industry went through the doldrums, surged 14.4 per cent to $26.3 billion as at end-2006. The further growth to $30 billion as at end-June this year represents a growth of 21 per cent from end-June 2006.

'As MAS has previously said, the use of the deferred payment scheme by property developers introduces additional risks to the developers, and to the banks which finance these developers, because property purchasers under this scheme are not subject to credit checks by developers.

'This is unlike property purchasers who apply for housing loans and are subject to credit assessment by banks. MAS expects banks to exercise prudence in their financing to the property developers and be fully cognizant of the additional risks from the use of deferred payment schemes,' a spokesperson from MAS told BT.

Last week, during the release of MAS' annual report, Heng Swee Keat, the authority's managing director had said that MAS is keeping a close eye on developments in the property boom. As Singapore's central bank and the regulator of the financial industry, MAS's concerns with regard to the property boom are how rising prices impact inflation and the risks posed to the stability of the financial system.

Mr Heng had noted that the banking sector's exposure to the property and construction sectors is 'significant' and that housing and related loans have grown over the last few quarters. 'So for both of these reasons, we will be watching developments in the market very carefully.'

The Urban Redevelopment Authority (URA) price index for private homes, released on Friday, has risen 13.5 per cent for the first half of this year.

URA figures also revealed that developers sold 9,385 uncompleted private home in the first six months of this year, less than a thousand units shy of the record 10,363 units sold through all of last year.

Monday, July 30, 2007

Lawyers Roped In To Combat Money Laundering

Source : The Business Times, July 30, 2007

New rules state that they can no longer keep anonymous accounts

(SINGAPORE) Lawyers sitting on millions of dollars of clients' money in trust or client accounts will have to be more sure where the money came from, under new rules that aim to curb money laundering.

In particular, lawyers will no longer be able to maintain anonymous accounts - they will have to know a client's business and keep records for at least five years.

The moves - spelt out in the Legal Profession (Professional Conduct) (Amendment) Rules 2007 that takes effect Aug 15 - come amid whispers that some crooks are using Singapore's hot property market to launder ill-gotten gains. The fear is that crooks who are using the property boom could be parking cash with lawyers here pending a purchase.

More than 90 per cent of all property purchases go through lawyers. 'To help combat laundering through law firms, two areas need to be looked at,' said Wong Partnership's managing partner Dilhan Pillay Sandrasegara - 'retail conveyancing and clients that come to us via private banks'.

Law firms also need to pay more attention to funds from overseas or by way of telegraphic transfer, he said. Singapore banks have had to implement increasingly stringent rules to prevent 'black' money being moved into the financial system.

And now lawyers are going to have to do the same, to prevent illegal funds seeping into the legitimate economy through investments in real estate, luxury assets or business ventures. But once clients clear the first hurdle of opening a bank account here, it is difficult for lawyers to know whether funds are illicit.

'I've yet to see anyone come in with a suitcase of cash,' said KCChuang, conveyancing partner at Advent Law Corp. 'Usually they have a cheque or demand draft issued from a Singapore bank.'

Mr Chuang said he has been approached three times by suspected money launderers in the past few years.

'They asked to use our client account, saying they would remit money from an overseas bank and if we could remit onwards to their accounts - one was to Thailand, another to New Zealand.'

The amounts were US$5 million a month, for which the launderers offered a 2-5 per cent service fee, he said. 'For some lawyers this can be very tempting.'

Mr Chuang turned down all the requests. 'One of them said he was dealing in second-hand cars,' he said. 'I asked him why he could not remit directly, but got no answer.'

Lawyers typically hold clients' money in common accounts that can be huge, running to tens or even hundreds of millions of dollars. Once illegal funds are sent into a client account, it can be difficult to separate them from the rest of the account.

Law firms typically have three accounts - trust account, client accounts and an office account.

Worldwide, laundering illicit money by buying real estate has become a common tactic.

The new rules here put the onus on lawyers to know a client's business, with the 'acquisition, divestment or any other dealing of any interest in real estate' at the top of the list. Reputable law firms say they will not be affected by the amendment because they have systems to guard against money laundering.

'Our reputation is very important to us,' said Wong Partnership's MrDilhan. But some tweaking will have to be done with regard to private banking clients, he said.

Private banks do not want to reveal clients' identity at first for requesting searches, such as for caveats, before a deal goes through. 'But going forward, in keeping with the principal of know your client, the private banks will have to disclose upfront their clients and vouch for them,' he said. 'Otherwise we cannot accept instructions.'

Every financial centre is a target for money launderers. 'The real estate market is so global that the issues we face are the same issues a lawyer in London faces,' Mr Dilhan said.

Still, the new rules are no tougher that those in London or New York, so legitimate investors will have no problem buying property or other assets here, he said.

For instance, most law firms already keep records five years after a transaction. 'Law Society rules already say we have to maintain files for 6-12 years,' MrChuang said. 'It's a storage nightmare.'

Many firms use external warehouses to store records and files, he said. 'We don't look at the new rules as negative. They formalise requirements that some of us already practise.'

Will law firms that are expanding overseas, such as in China, have to be extra vigilant against suspicious transactions?

Wong Partnership exercises the same diligence on clients at all its offices, Mr Dilhan said. 'So far the number of incidents in China when we've had to discharge ourselves is very small.'

The Dot Is Hot

Source : Straits Times, Sunday, July 29, 2007

It's boomtime, boomtown Singapore as the island sheds its stuffy image and revels in the sound policy decisions that were made

Happy days are here and Singaporeans are spending like there's no tomorrow. Restaurants are packed, fast cars crowd the roads and people are stocking up on high-end furnishings for their multi-million-dollar homes. But how long will the good times last? -- ST ILLUSTRATION: MIEL; ST DESIGN: SALLY LAM

WHAT a difference two years make.
In 2005, Singapore was still recovering from a recession and MP Charles Chong remembers crowded meet-the-people sessions with heartrending cases of families that could not make ends meet. He helped out-of-work men find jobs and wrote letters to the HDB to reschedule housing loans.

Fast forward 24 months and now the issue is no longer about finding a job. It is about finding a better-paying one, says the Pasir Ris-Punggol GRC MP.

South West District Mayor Amy Khor senses a more upbeat mood on the ground as well. A restaurant owner who was operating in the heartlands recently told her that his business was much better this year. Tables are fully booked on weekends and he did roaring business on Mother's Day.

'The sense of optimism was reflected not only in the greater number of diners, but also the increase in the average bill size. More diners were willing to spend more on their meals,' she says.

'The average sentiment on the ground is much more positive now than it was a year or so ago.'

It's all thanks to the boom that Singapore is enjoying, which began around 2004 after the Sars crisis ended, analysts say. The economy rebounded, with growth surging from 3.1 per cent in 2003 to 8.8 per cent the following year and has averaged about 7.8 per cent since then. Between January and March this year, there were 49,000 jobs created, continuing a trend that started in 2003.

The number of people made bankrupt has gone down as well. After hitting a 19-year high of almost 400 a month in 2004, it now hovers at fewer than 300 a month.

As for the stock market, the Straits Times Index has been repeatedly setting record highs since it surged past the 3,600-point mark for the first time last month.

Mr Song Seng Wun, a research head with brokerage CIMB-GK, says: 'People who are selling cut fruits and drinks at the kopitiam are asking me for stock tips.'

He last saw such fervour during the bull run of the early 1990s. That screeched to a halt with the Asian financial crisis in 1997. Stocks then went on a roller-coaster ride, what with the dotcom bust, Sept 11 and Sars.

Capitalising on globalisation

ONE of the reasons Singapore has bounced back is careful, detailed and strategic planning, notes DBS economist Irvin Seah, pointing to the work done by the Economic Restructuring Committee from 2001 to 2003.

One key objective was to diversify the economy instead of putting too many eggs in one basket. Pharmaceuticals and transport engineering now play a significant part in the manufacturing sector when previously there was an over-reliance on electronics.

Services, as well as the construction sector, have also become key drivers of growth, and new areas such as the clean energy sector are being explored, too.

These efforts make Singapore more resilient to external shocks, says Mr Seah.

Another important measure was the signing of numerous free trade agreements with countries such as the United States, Australia, New Zealand, Japan, India and potentially China, which Singapore is in the midst of negotiations with.

The emergence of China, India and Middle East countries - which have benefited from rising oil prices - has helped the Republic as well, with the new rich from these places being lured to invest money here, says Mr Song.

Mr Seah adds: 'These factors allowed us to ride on the current wave of the global economic boom. Essentially, we've capitalised on globalisation instead of resisting it.'

Ironically, the bad times did some good, too.

The swift manner in which Singapore bounced back enhanced its reputation as a reliable place to invest in, says Professor Neo Boon Siong, director of the Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy.

'The Government showed that it responds quickly and pragmatically to problems and this has given the world greater confidence in Singapore,' he says.

But beyond the hard restructuring of the economy, Singapore is looking to spruce up its stuffy image as well.

The concerted attempt to inject buzz and vibrancy began in earnest in 1991, with the launch of the Global City for the Arts project, notes Institute of Southeast Asian Studies sociologist Terence Chong.

'This has been followed by the Government's mindset change on Formula 1 racing, casinos and Crazy Horse, which signalled that the city-state is serious about shedding its conservative cloak,' he says.

While these efforts enhance the feel of Boomtown Singapore, the bigger picture is to entice foreign talent to not just come here to work, but to also make Singapore their home by portraying an exciting image, says Prof Neo.

'When someone decides to stay here long-term, that is when he will be willing to invest in the country, which he won't if he thinks of it as a layover,' he notes.

Ms Rebecca Bisset, editor-in-chief of magazine Expat Living Singapore, feels there is now a 'freer' atmosphere here.

'The whole image of Singapore as a 'fine' city isn't so relevant anymore. In the past, when I told people that I lived here, they go: 'Ooh, that's where they whip people for committing crimes.' But now that perception of a controlled society has really eased off,' says Ms Bisset, who has lived here for 10 years.

This has attracted expatriates like sales manager Jo Cooper to uproot from Britain and relocate here. She and her husband Martin, both 41, looked at Shanghai, Hong Kong and Beijing as possible choices for their new home, but eventually plumped for Singapore because of its English-speaking population, lower costs and cultural mix.

Having lived here since last October, what the couple had initially planned as an overseas experience for a few years with their two children has become an intention to stay for good.

'Singapore has really made us feel at home and we are hoping to apply for permanent residence now,' says Ms Cooper, whose family lives in a condominium in Cairnhill Road.

Indeed, in the past year, the Republic has been popping up in a string of very desirable and 'hip' global surveys: No. 2 in the world for nightlife and dining, 17th most liveable city, the best quality of life in Asia.

Conducted by respected magazines like Monocle and world-class organisations such as the World Economic Forum, these surveys no doubt add to the buzz surrounding Singapore. For example, in making Monocle's most liveable cities list, the country was featured alongside long-recognised happening cities such as Sydney, Paris and Barcelona.

Mr Gavin Coombes, Asia-Pacific chief executive officer of consultancy FutureBrand - which compiled the survey in which Singapore scored well for nightlife and dining - notes the Republic is clean and safe where it matters but 'not so much so that people don't know how to have fun'.

'It has a unique combination of advantages over places which can be a bit too dangerous, a bit too isolated, a bit too foreign and a bit too restrained for international travellers,' he adds.

Boom for whom?

DESPITE the hurrahs and champagne-popping, 'boomtown' needs to be qualified, warns Dr Chong.

'Boom for whom? The needy still face pressing concerns like rising prices, while older citizens still find it hard to get jobs. Even large sections of the middle class do not have the ready capital to invest in the boom,' he says.

'For many of them, the GST rise and increase in transport fares will negate the feel-good factor. It's boomtown for those who are lucky enough to have capital or own property.'

Sociologist Paulin Tay Straughan adds that when a society is developing and economic opportunities arise, people tend to be more excited and view opportunities positively, even if they do not gain from it themselves, as they see in these opportunities hope and optimism for the future.

But as a society matures, many such cycles pass and social inequalities set in. 'It gets more difficult for the have-nots to view the boom period with equal enthusiasm - especially when they perceive that they will not stand to gain significantly,' she says.

Dr Khor says the Government is aware of this and has set aside aids for the needy, such as a higher share of the GST offset package, workfare bonus, school subsidies and interim financial assistance while they look for a job.

But she adds that the responsibility lies with them to come forward to get help and that 'they must make the effort to upgrade themselves and get out of the poverty trap and become self-reliant again'. She also notes that it is not uncommon for people to have concerns and worries during boom times.

'The worry, for instance, of young couples being priced out of the market and unable to find affordable homes to purchase due to the current property market boom is genuine but not new,' she says.

'This concern also surfaced during the last property boom in the 1990s and as in the previous boom, the Government has reiterated its stand to ensure affordable public housing.'

The issue may be a matter of expectations, says Mr Seah. 'During a recession, a young couple may be happy with a four-room flat, but because it's boom everywhere now, they may be aiming for a condominium in a prime estate and grumbling about how they can't afford it. The problem isn't the affordability - it's the expectation,' he says.

The million-dollar question then is: How long will this boom last? While the experts say it's impossible to know for sure, it's safe to expect a few more good years.

'As long as our policies are ahead of global economic trends and the external environment remains favourable, we are likely to see reasonably strong growth of about 6 to 8 per cent per annum in the years ahead,' says Mr Seah.

Sunday, July 29, 2007

Home Buyer's Guide & The Buying/Selling Process

Source : Urban Redevelopment Authority (URA) [http://www.ura.gov.sg/lad/HBG/basicCheck.htm]

Buying a new apartment, flat or house may probably be your single largest investment. Hence, before you even visit a showflat or view any unit, it is important that you familiarise yourself with some existing Government policies which may affect you.

Fast Facts:
.If you own a HDB flat or Executive Condominium, you have to fulfill the minimum occupation period before you can purchase private residential properties

.If you are a Non-Singapore citizen, you have to obtain approval from the Controller of Residential Property before you may buy landed houses.

.You should consider your finances before committing to any property purchase, taking into consideration the limit on the use of CPF monies for property purchase and the loan amount you can obtain.

.You can access free property market information, such as prices of private residential properties transacted over the last 12 months, from URA website.

.Besides the price of the property, other fees such as stamp duty and property tax are payable.

.You may wish to consult a lawyer on your rights and obligations before signing any document.

Check Your Eligibility to Buy
Before you consider buying your dream home, check whether you are eligible to buy especially if you own a HDB flat and/or are a non-Singapore citizen (including Singapore Permanent Resident).

If you own a HDB flat, you may wish to check whether you have fulfilled the minimum occupation period required for your HDB flat before you can purchase private residential properties. For more information, visit the Housing Development Board of Singapore (HDB) website. [http://www.hdb.gov.sg]

If you are a non-Singapore citizen (including Singapore Permanent Residents), you have to obtain approval from the Controller of Residential Property, Singapore Land Authority, before you may buy landed houses. For more information, visit the Singapore Land Authority (SLA) website.[http://www.sla.gov.sg]

Considering Your Finances
You should consider your finances and decide on a budget that you would be able to commit towards your property purchase. You could use the "Housing Affordability Calculator" from CPF's website to estimate your housing loan based on your income and ability to service the loan.

If you decide to utilise your CPF monies, you should take note that there are limits on their use for property purchases. Information on the use of CPF monies and how proceeds of sale from your previous residential property will be handled is available from the Central Provident Fund Board (CPF) website. [http://www.cpf.gov.sg]

If you need to borrow from banks, you should familiarise yourself with the terms of the loan and mortgage as well as the variation in interest rates for the period of your loan. You may wish to discuss with a banker to determine the maximum loan amount that you may obtain, the interest rate and period of repayment for the loan. The list of local and foreign full banks operating in Singapore can be found in Monetary Authority of Singapore (MAS) website. [http://www.mas.gov.sg]

Your application for the use of CPF monies and/or loans from banks will take some time to be processed. Your lawyer will also need time to carry out certain checks regarding the property to be purchased. To ensure that you have enough funds to meet the payments required as well as a place to stay, you should plan carefully when you should sell your existing home and when to purchase a new home. For information on the process of sale of HDB flats, visit the Housing Development Board of Singapore (HDB) website. [http://www.hdb.gov.sg]

Property Market Information
URA provides free information on the property market, including:

• List of the launch and sale status of uncompleted private residential projects. The list is updated every month.

• Prices of private residential properties that were transacted with caveats lodged over the last 12 months.

Know the Fees Payable
You may want to find out more about the other fees payable when purchasing a residential property. Besides the following fees, you should also find out from the sales agent or your lawyer on any other fees which you may have to pay.

For information on stamp duty and property tax payable, visit the Inland Revenue Authority of Singapore (IRAS) website.[http://www.iras.gov.sg]

A valuation report on the value of the property to be purchased is required by banks and the CPF Board. For a list of valuers and the fees payable, visit the Singapore Institue of Surveyors and Valuers(SISV) website. [http://www.sisv.org.sg]

Consult a Lawyer
You may wish to consult a lawyer to understand better the process of buying a property and your rights and obligations before signing any document. In engaging a lawyer you should also clarify the scope of services to be provided as well as the fees payable. For information on lawyers and the legal profession in Singapore, visit the website of The Law Society of Singapore [http://www.lawsociety.org.sg]

The Buying/Selling Process:

1) Select an agent
Optional, but recommended. A professional agent will not only help you to find the right property, but also ensure you get the right price, ensure all small details are covered prior to purchase, guide you through the process and make recommendations on financing and legal representation.

2) Find your property and agree a price
When reaching a preliminary agreement to buy, ensure that all important points have been discussed and agreed, including any repairs or changes prior to purchase, what stays and what goes, any special requirements from both side and the anticipated schedule.

3) Sign an Option to Purchase
For Private Property - This is obtained from the seller through their lawyer or agent. At this point you are required to pay a non-refundable option fee (normally 1% of purchase price). The option period is usually 14 days.

For HDB Property - Since 15 April 2003, the HDB standard Option to Purchase has replaced the Sale & Purchase Agreement as the form of contract to be used in resale flat transactions. Buyers and sellers should not enter into any other forms of agreement or supplemental agreements.

4) Appoint a Lawyer
You now need to appoint a lawyer to make legal enquiries on the status of the seller, the title of the property and the terms of the sale.

5) Arranging Financing
Compare interest rates and special terms when choosing your finance scheme. You can apply for withdrawal of CPF savings by completing an application together with a valuation report prepared by a licensed valuer who is on the CPF panel of valuers.

6) Exercise the Option / HDB 1st Appointment
For Private Property - If all is well you now sign the sale contract, and pay 5% of the purchase price (less the option fee). You also need to pay stamp duty within 14 days of the contract.

For HDB Property - The buyer and seller must both attend the Sales Declaration & Registration appointment to seal the closing price. After this appointment, HDB will check eligibility of the transaction and arrange for a 1st Appointment – usually about 4 weeks after the Sales Declaration.

7) Legal Inspection & Completion
Your lawyer will carry out an investigation of title deeds and send requisitions to various government departments. The seller’s lawyer will also prepare the completion statement and send documents for stamping to effect completion.

8) Settle Payment and Handover / HDB 2nd Appointment
For Private Property - You now settle the outstanding balance of the purchase price. This might be 8 to 12 weeks after exercising the option. The seller’s lawyer will then handover the keys and title deed of conveyance, and you become the owner of your new home.

For HDB Property - Completion takes place at the 2nd Appointment, usually about a month after the 1st Appointment. The insurance and mortgage is arranged and stamp duty, legal fees and agent fees are paid. The sale is completed and arrangements are made for moving into your new home.

Leasehold Vs Freehold

Source : The New Paper, 10 Feb 2007

In boom times, Lease is more

Which would you rather buy - a leasehold property or freehold?

For many Singaporeans, it’s a no-brainer.

Why? Ownership of the freehold property lasts generations (unless it’s acquired by the authorities) compared to leasehold, where the fear is that after 99 years, you may lose your home.

But if the largest en-bloc sale on Tuesday is any indication - where CapitaLand paid a staggering $548 million for the leasehold Gillman Heights - it just goes to show that en-bloc possibilities are not limited to the freehold market.

Just last month, the leasehold Minton Rise at Hougang was also sold en-bloc for $209 million to the Kheng Leong group. With the market looking up, this leasehold or freehold dilemma will be on many home-buyers’ minds.

Consider this: The number of new homes sold hit a staggering 11,147 last year, far exceeding the sub-10,000 units sold during the last three peaks in 1996, 1999 and 2002, according to figures released by the Urban Redevelopment Authority last month.

For a home-buyer, the price difference between a freehold and leasehold unit in the same area could be a premium of as much as 40 per cent.

Here’s an example: Four years ago, we compared some properties in the East Coast area, such as the freehold Amber Park and the 99-year leasehold Mandarin Gardens.

Both units were three-bedroom apartments of about the same size.

Back then, Amber Park was about 15 years old, while Mandarin Gardens was about 21 years old. We polled 50 people then and asked: ‘If you have to live in one of the above developments, which would you choose?’

Without knowing the price and land leases, 42 out of 50 chose Mandarin Gardens - the main attraction being the condo’s huge grounds and facilities.

But when told that Mandarin Gardens is leasehold, 46 out of the same group of 50 chose Amber Park.

Today both properties have seen the same price increase of about 25 per cent. (See comparison above.)

But if you had bought the two properties to rent out, you’ll realise that Mandarin Gardens gives you more bang for your buck.

Currently, the monthly rental at Amber Park is about $3,500.

This means a yield of about 4 per cent a year ($3,500 x 12 months divided by the property value of $1.07m).

In comparison, the monthly rental at Mandarin Gardens is about $2,800.

But its rental yield of about 5 per cent a year is better than Amber Park ($2,800 x 12 months divided by the property value of $668,000).

ERA Singapore vice-president Eugene Lim explained:

‘The tenant doesn’t care if the property is leasehold or freehold. If the age, size, location and facilities of the two places are about the same, the rental should be similar too.’

During a boom, prices of both types of properties will appreciate. The reverse happens when the market dips, said Mr Colin Tan, Chesterton International’s head of research and consultancy. He said: ‘Some may say that freehold has better capital gains. But it’s inconclusive if one type of tenure is better than the other. In some areas, the freehold gains are better but in other areas, leasehold does better.’

Tenure aside, the location, the surroundings, and even a new MRT line does affect property prices.

In the past, it was true that a leasehold property’s value depreciated sharply after 60 years.

Then, you couldn’t use your CPF to pay for properties with less than 60 years on the lease.

This forced potential buyers to use only cash to pay for the unit if bought at the cut-off mark.
That affected the asking price drastically.

This policy was revised in 2005 for properties with less than 30 years on the lease, which is good news for leasehold property owners.

For leasehold properties, however, going en-bloc is not a given compared to freehold ones. This is because there’s still the issue of lease top-up which needs approval, property watchers said.
And for that to happen, the plot ratio must be hiked where there is potential for intensifying the use of the land.

For auditor James Tang, 37, property location is foremost on his mind.

His dream is to own a freehold property, both for the prestige factor and also so that the place will be ‘mine forever’, he said.

He said: ‘It’s a notion that we want to leave something for our children that can last forever. But knowing how upgrade-crazy Singaporeans are, it may make sense to just jump from a leasehold property to another.’

Macpherson Estate Set To Become A More Vibrant Town

Source : Channel NewsAsia, 29 July 2007

Macpherson is set to become a more vibrant town in the next five to ten years as it goes into the next phase of development and regain its status as a transportation hub, said MP Matthias Yao.

In its hey day, 13 bus routes had their terminals at Macpherson and on Sunday, over 2,000 residents at the Macpherson Day Carnival were told that the estate is lined up for bigger things.

Video Link - http://tinyurl.com/2gv27c (Channel NewsAsia Video News)

The upcoming MacPherson Circle Line station looks set to make a splash with residents when it is ready in 2010 as it promises to inject vibrancy into the area.

It will also serve as an interchange, intersecting with the Downtown MRT line which will ply through the city centre and Marina Bay.

With the development, linkways and underpasses will be built to connect the neighbourhood centres to the new station.

Mr Yao, who is also the mayor of South East CDC, said: "Because of the convenience of transport in the coming years, Macpherson will become very lively. More people will want to choose to live in Macpherson, and certainly, I see some of the property value going up.

"When the interchange is done, there will be commercial activities around it and that will also bring more dynamism to the existing small businesses within the estate."

And as more residents move in, it is important to promote harmonious living in the estate.

Senior Minister Goh Chok Tong and Marine Parade GRC MPs joined Macpherson residents in celebrating diversity at the carnival.

There are also plans to make life easier for the senior citizens as more than half of the population here in Macpherson are 55 years old and above.

These plans include providing more financial and social assistance to the elderly and upgrading the estate.

Over the next five years, they can look forward to more barrier-free access features around the estate and lifts on every floor, even for low-rise flats.

Three upgrading programmes are in the pipeline and residents from 15 blocks are expected to vote for the projects in September. - CNA/so

Home For Family Of Three Is Entire 11-Storey Condo

Source : The Straits Times, Sunday, July 29, 2007

They're leaving the penthouse and 3 other maisonettes empty. Who needs to rent them out when you're billionaire Peter Lim - and he won't cash in on his $100m Ardmore Park property By Lee Su Shyan

Billionaire Peter Lim (above) has no plans to sell his condo and move into a landed property because it feels more secure to live in an apartment. -- ST PHOTO: LIM WUI LIANG

EVEN for the ultra rich, condo living still means having to share facilities like pools and tennis courts with neighbours. Unless you're billionaire Peter Lim, that is.

Mr Lim, his wife Cherie and his 85-year-old mother have an entire 11-storey condo - and pool - at Ardmore Park to themselves. No noisy neighbours, no barking dogs, no learner trumpeters practising in the apartment next door.

LOCATION AND SPACE are what keep billionaire Lim from selling Abelia, of which he has an 80 per cent share. -- ST PHOTO: MAY LIN LE GOFF

The family occupy an apartment close to 4,000 sq ft at the Abelia condo while the other three maisonettes and a 5,000 sq ft penthouse sit empty, although there is a security guard.

Not that Mr Lim needs the rent. He made his first fortune as a remisier and another bigger one with shrewd investments in palm oil.

And Abelia - Mr Lim owns 80 per cent and a pal the rest - is probably worth about $100 million given its primest of prime locations near Orchard Road.

But Mr Lim is resisting the temptation to sell up and cash in on the property boom as his mum does not want to move.

They like the location and the acres of space, including an underground carpark, which is handy given Mr Lim's pricey collection of 10 cars, Ferraris included.

'I have enough space to park them,' Mr Lim said in a recent interview.

'The road is also very wide with lots of entrances and exits. If I were to live at Orchard Turn, I would have to put up with the bad traffic. But here, there are many ways for me to avoid the congestion,' he added.

And while he could sell the Abelia and buy a handful of houses, the posh bungalow life in District 10 doesn't suit him.

'Maybe it comes from the days when I was a remisier and travelling a lot in Malaysia, every four days of the week.

'That has made me security conscious so I prefer to live in an apartment,' he said.

The bumper gain he is sitting on at the Abelia must also enhance the home sweet home feeling. He bought the building in 1994 when Malayan Credit sold some of its investment properties, paying less than $14 million.

That is looking like a bargain to end all bargains, what with the land and building now worth as much as $100 million, going by recent sale prices.

Last month, SC Global forked out $262 million for The Ardmore, just a few doors away at 6 Ardmore Park. The price for the plot of 42,565 sq ft worked out to $2,337 per sq ft (psf) of potential gross floor area, including development charges.

Abelia has an estimated 40,000 sq ft of gross floor area, which could mean a sale price of about $100 million given the $2,500 psf it could command in today's market, say some consultants.

Others sound a note of caution as the Abelia's land area is far smaller at 14,000 sq ft, although as Knight Frank's head of research and consultancy Nicholas Mak says: 'The whole stretch of Ardmore Park is valuable land, and the price it can fetch will depend on the size and the shape of the parcel.'

Whatever price it might command, it will be small beer compared to Mr Lim's stake of just under 5 per cent in palm oil giant Wilmar International, which is worth around $1 billion.

While Abelia is only 11 storeys, it dominates the area - at least for the next few months.

It is surrounded on three sides by the building site for Wheelock Properties' 36-storey Ardmore Park II. The site was occupied by Habitat Two and Ardmore View, which were sold en bloc last year.

But Mr Lim is not fretting about the noise and dust as modern piling methods have reduced much of the impact.

Anyway, he can always get away for the day in one of his flashy cars sitting in that spacious underground carpark.

He Owns The Whole Condo In Orchard Rd

Source : The Straits Times, July 28, 2007

EVEN for the ultra rich, condo living still means having to share facilities like pools and tennis courts with neighbours. Unless you're billionaire Peter Lim, that is.

Mr Lim, wife Cherie and his 85-year-old mother have an entire 11-storey condo and pool at Ardmore Park to themselves.

No noisy neighbours, no barking dogs, no learner trumpeters practising in the apartment next door.

The family occupy a flat close to 4,000 sq ft at the Abelia condo while the other three maisonettes and a 5,000 sq ft penthouse sit empty, although there is a security guard.

Not that Mr Lim needs the rent.

He made his first fortune as a remisier and another bigger one with shrewd investments in palm oil.

And Abelia - Mr Lim owns 80 per cent and a pal the rest - is probably worth about $100 million given its primest of prime locations near Orchard Road.

Mr Lim is resisting the temptation to sell up and cash in on the property boom as his mum does not want to move. -- ST PHOTO: LIM WUI LIANG

They like the location and the acres of space, including an underground carpark, which is handy given Mr Lim's pricey collection of 10 cars, Ferraris included.

And while he could sell the Abelia and buy a handful of houses, the posh bungalow life in District 10 doesn't suit him.

Rents Here Too High? Not So, Say Expats

Source : The Staits Times, Sunday, July 29, 2007

Though rents are rising, expats say housing here is more affordable than in many major cities

MR CHARLES TIDSWELL, 34, managing director for South-east Asia at IT company Facilitate Digital, pays about $3,000 for his 1,100 sq ft apartment at The Legend in Bukit Timah Road. When he was in Hong Kong, he paid $4,500 for a 900 sq ft apartment. He moved here in 1998. 'You could say that Singapore's prices are possibly 10 years behind those of Hong Kong's,' said Mr Tidswell. -- ST PHOTO

SINGAPORE and Hong Kong are keen competitors in most things but when it comes to rent, there is only one winner.
Ask Mr Jason Longley, the regional manager of an insurance company. A year ago, he was paying $8,500 a month to rent a 900 sq ft apartment in Hong Kong's prime Peak area.

Now he rents a 1,400 sq ft flat at Leonie Hill off Grange Road for just $5,500.

Mr Longley, 35, said Singapore's cheaper rent was a key factor in his decision to relocate: 'I definitely saw rent as a huge expense in Hong Kong.'

It also helps put into perspective the growing complaints about rising rents.

Urban Redevelopment Authority figures out last Friday showed that residential rents rose 10.4 per cent in the April to June quarter and are up 31.2 per cent over the past 12 months.

But expats and agents told The Sunday Times that Singapore rents are still cheaper than in cities such as Hong Kong, Tokyo, London and New York.

A new survey by ECA International, a human resource consultancy, showed that rents here were 45 per cent less than the average price in Tokyo and 40 per cent less than in Hong Kong.

Singapore was the eighth most expensive place to rent a three-bedroom flat in Asia and 15th most expensive in the world - below Hong Kong, Tokyo, New York and London.

Investment banker Timothy Rice, who moved here last August, can testify to that.

Mr Rice, 27, pays $1,400 for a 350 sq ft studio in Kelantan Lane, near Bugis Junction. He said such a flat in an equivalent London location would still cost about the same figure - but in pounds. That is about $4,300.

Mr Masamitsu Kawasumi, 44, chief bank representative of the Development Bank of Japan, arrived here last month and was struck by the rental gap between Tokyo and Singapore.

Tokyo's hip Roppongi area, with its many clubs and restaurants, has rents of about $13 per sq ft. Orchard Road's $6 psf seems like a bargain.

Mr Thomas Preben Hansen, 32, chief executive of a listed marine firm, has lived in Shanghai and London: 'Rents had become very cheap since 1997, and still have some catching up to do.'

He anticipated the rent squeeze and so bought a flat in Ewe Boon Road, off Bukit Timah Road, when he arrived in May.

A rental squeeze is exactly what Ms Isabelle Scali, 30, is bracing herself for. The public relations manager thinks Singapore is relatively more costly than London.

She pays $1,800 - nearly half of her salary - for a 1,200 sq ft flat at Sunshine Plaza off Prinsep Street.

In London, she said she spent just a third of her salary on a 700 sq ft studio flat in Balham, southwest London.

Ms Scali, who has signed a two-year lease, said rental costs will determine if she stays in Singapore.

Mr Rajesh Malkani, 43, who lived in Hong Kong for 13 years before moving here in 2005, said: 'I don't expect Singapore's prices to reach Hong Kong levels because there is still land here. But I do expect them to go up.'

Mr Malkani, the global head of sales and business development at Standard Chartered, rents a 4,000 sq ft bungalow in Sunset Place. He would not reveal his rent but said it would get only half the space in Discovery Bay, which he feels is a comparable site in Hong Kong.

Given the decade-long property slump here, Mr Simon Smith, a senior director at Savills Asia Pacific, thinks rents will keep rising for the next one to three years.

But Mr Rice is not complaining: 'Compared to Hong Kong, New York, London - Singapore is still cheap,' he said.

Saturday, July 28, 2007

The Modules - SOHO Living

Nestled in the vibrant, bohemian heart of Katong, the modules is the very first Small Office Home Office in the East. This FREEHOLD development represents a tremendous investment opportunity for all.

In the morning, take advantage of the sanctuary that East Coast Park offers from the daily hustle and bustle. The modules offers a conductive private space for work in the day, and by night, the perfect home to recuperate as you gaze at the stars from the landscaped roof top terrace.

Offering everything you need for the lifestyle you want, the modules encapsulates the very best of SOHO living.


Project Details
Project : The Modules
Developer : Shining Holdings Ptd Ltd

Address : 387 Joo Chiat Road S(427623)
Ideally located, the modules is within walking distance to prestigious educational institutions such as Tao Nan School, Haig Girl`s School, Tanjoing Katong Girl`s School and Victoria Junior College

A dining paradise, an amazing plethora of cuisines awaits to delight the most descerning taste buds and not forgetting the ambience created by the rich heritage of nostalgic Katong, you will enjoy dining like no other

The close proximity to Parkway Parade, Katong Mall and Katong Shopping Centre offers unsurpassed convenience.

Easily accessible by the ECP, PIE and Paya Lebar MRT, it is within minutes to the city.

Tenure : Freehold
Total Units : 48
Expected TOP : 31 Dec 2010
Expected Legal Completion : 31 Dec 2011

Facilities available :
•Swimming Pool
•Water Features
•Barbercue Pit
•Landscaped Roof Garden
•Coin Operated Vending Machine

Element @ Stevens Rd

The Concept of Free Living

Freedom of choice, being able to live in a manner that ascribes to particular and different lifestyles, was the concept that drove The Element@Stevens from drawing-board to raelity.

Three distinct modes for living were designed around a waterscape theme set in an idyllic tropical garden. Only three penthouses, two dyuplexes and 12 apartments were built into this environment. The common feature is the visual 'flow' - water-enhanced intimacy for all.

Propject Details
Project Name : Element @ Stevens Road
Developer : Heeton Holdings Ltd
Address : 72 Stevens Road (A Prestigious address that is just 2 minutes drive to Orchard Road)

Just a glance at the map will show that The Element@Stevens is at the epicentre of a world of action - shopping, dining, entertainment, club-life, and importantly close to some of the best schools Singapore has to offer. Not only this, but Stevens Road is still part of the `Old World` of Tanling where shady trees still domainate on the doorstep of Singapore`s precious showpiece, The Botanic Gardens

Tenure : Freehold
District : A Boutique Development in Prime District 9
Expected TOP : 30 Sept 2007
Expected Completion : 30 Sept 2010

Total Units : Exclusively 17units
2Bdrm 958sqft -3, 1012sqft - 1, 1658 sqft - 1 (5)units
2Bdrm Duplex with 11sqm Strata Void 1076sqft - (2)units
3Bdrm 1324sqft -3, 1518sqft - 1, 2379sqft - 1 (5)units
3+Study 1389sqft -3, 1593sqft - 1, 2637sqft -1 (5)units

Asking Only @ $1700/psf; Left 5 units

-Swimming Pool