Friday, August 31, 2007

HDB Unveils New Generation Of Public Housing In "Remaking Our Heartland" Exhibition

Source : Channel NewsAsia, 31 August 2007


















Artist impression of Punggol 21+ town centre

SINGAPORE: HDB heartlands are set for a major facelift over the next few years.

In fact, National Development Minister Mah Bow Tan has described it as a "quantum leap in public housing in Singapore".

Mr Mah was speaking at the opening of the HDB's "Remaking Our Heartland" exhibition on Friday evening.

He also unveiled more details on the new generation of public housing and plans to help the elderly unlock the value of their flats.

"We will provide a variety of housing choices, landscaped community spaces, bring more greenery to residents' doorstep and make better use of water bodies to soften the impact of high-rise, high-density living. Some of these features are new; others are not so new. We will bring these various elements together to transform HDB living into 'Housing in a Park'," said Mr Mah.

On display at the week-long exhibition at the HDB Hub are plans in store to rejuvenate the HDB estates - starting with Punggol for the new towns, Yishun for the middle-age towns and Dawson for the old estates.

Related Video Link - http://tinyurl.com/ywjo37
HDB unveils new generation of public housing


"It (HDB living) also helps our citizens to share the country's progress through the upgrading programmes. And now it's also going to help to supplement our retirement income when we grow old," said Mr Mah.


















Artist impression of Punggol 21+ promenade

And this can be done through a new lease buyback scheme which was announced by Prime Minister Lee Hsien Loong during the National Day Rally.

Under this scheme, HDB will buy back the tail end of the flat lease from elderly owners and leave them with a shorter lease of 30 years on the same flat.

The value unlocked from the lease buyback scheme will be based on market rate.

Mr Mah said that owners will receive a lump sum payment when they sign up for it. That will be the first part of the payout.

They will also be able to continue living in the flat while drawing a monthly payout for a fixed number of years.

Mr Mah said: "But should they live beyond the payout period, we want to make sure that they continue to have some money to meet their living expenses. Therefore the third part (of the payout) will go towards a longevity insurance that will continue to pay the owners a monthly allowance for as long as they live. It is likely that we will ride on the CPF scheme when it is ready."

HDB projects that some 25,000 households will qualify for the lease buyback scheme.

It is targeted at owners aged 62 and above, particularly those living in a 2- or 3-room flat who have only had one bite of the housing cherry.

Mr Mah added that the government will provide a subsidy to encourage eligible residents to join the scheme.

All residents are encouraged to be more involved in the shaping of their neighbourhood.

Mr Mah said there will be more formalised consultation channels like mini Town Hall gatherings, where residents can discuss the facilities they wish to be built in the estate. - CNA/ir

Govt Will Continue To Manage Increases In Construction Costs

Source : Channel NewsAsia, 31 August 2007

SINGAPORE : Trade and Industry Minister Lim Hng Kiang has urged developers and contractors not to price in expectations of increases in costs into their tenders for projects.

Speaking to reporters on the sideline of a groundbreaking ceremony on Friday, he said that the government would continue to manage the increase in cost of steel and other materials and try to mitigate the impact of higher costs.

He said: "The construction industry contributes about 4 percent of our GDP, and the construction cost itself is a very small part of the GDP, so the impact would not be that significant. But nevertheless, we don't want to have a situation of it being built into expectations and contractors padding their tenders with very high expectations of continued cost escalation.

"This is something that we want to avoid, so Ministry of National Development is in constant dialogue with the Singapore Contractors Association to explain to them the situation, to make sure there isn't this situation, that they don't create a self-fulfilling prophecy. And they don't have expectations built into their tender process. We must have a realistic view of the situation and know the measures that the different parties are taking to mitigate it."

Mr Lim also touched on the need to make investing in hotel developments attractive.

He cited the increase in hotel rates, adding that these will continue to go up at a measured pace, and developers can factor this into their calculations.

Mr Lim said: "They can calculate the returns. We hope they will tender sensibly for the land price and then be in a position to build the supply that we need. If you look at the basic numbers, if we are practically doubling the number of tourist arrivals, simple common sense would say that you also practically double the number of rooms." - CNA/ch

Construction Of F1 Facilities Begins With Groundbreaking Ceremony

Source : Channel NewsAsia, 31 August 2007

The Opening Ceremony of the Singapore F1 Pit Building

SINGAPORE: Singapore formally began construction of its Formula One Grand Prix facilities on Friday with a groundbreaking ceremony for the new pit building.

The facility along Singapore's waterfront will hold 36 garages for 12 racing teams on the ground floor.

"Today's groundbreaking event marks an important milestone in our preparations to host the F1 race in September next year," Lim Neo Chian, chief executive of Singapore's tourism board, said at the site ?which is now a muddy field beneath an expressway off-ramp.

Singapore is to host its first Grand Prix street circuit race on September 28 next year.

"The pit building that will rise from this piece of land that we now stand on will be one significant milestone that all will watch closely," said Lim Hng Kiang, minister for trade and industry.

Model of the Singapore F1 Pit Building

The tourism board said the glass-fronted building, tendered with an estimated cost of S$33 million (US$21.68 million), is targeted for completion at the end of May. - AFP/so


Biggest Wheel Set To Turn In Singapore

Source : Channel NewsAsia, 31 August 2007

At 165 metres (545 feet), or 42 storeys high, the Singapore Flyer will be the largest observation wheel in the worldSINGAPORE - Please, don't call this a Ferris wheel, officials stress.

"We don't use the F-word," says Florian Bollen, the chairman of Singapore Flyer, a giant slowly-rotating observation wheel, which he says will be leagues apart from its old-fashioned little brother at the fairground.

At 165 metres (545 feet), or 42 storeys high, the Singapore Flyer will be the largest observation wheel in the world, said Bollen.

The project, still under construction, is tentatively expected to open in the city-state next March.

Bollen's Singapore-based company, Great Wheel Corp, is also building wheels in Beijing and Berlin which will edge out the Singapore Flyer as the world's biggest when they begin turning in about two years, he says.

"It's a completely different generation of wheels by comparison to the old-style Ferris wheel," Bollen told reporters on Thursday.

He says Britain's London Eye, which opened at the turn of the century and is 30 metres lower than Singapore's wheel, was the first of the new generation.

"It's a huge success story. It really has created something completely new, and that's why we thought building these wheels is a good thing," says the German, who came to his new venture from the financing of films.

Unlike cramped Ferris wheel carriages which hang in the open air, the Singapore Flyer and other large observation wheels feature fixed "capsules".

The Singapore Flyer's capsules -- about the size of a city bus -- are air conditioned and can carry up to 28 people. Passengers are free to walk around and will not feel movement or vibration, the company says.

"And when you're up on top of the wheel, you really have the feeling of being on top of the world," Bollen says.

"It's just a very slow, nice experience. It's all about the view."

The Singapore Flyer will be located on the Singapore waterfront across from the Marina Bay Sands casino complex set to open in 2009, and near the pit area of a Formula One Grand Prix street race to be held for the first time in 2008.

Lacking natural attractions, the wealthy nation has embarked on a major campaign to spruce up its tourist appeal.

For S$29.50 (US$19.37), passengers on the Singapore Flyer will get a 360-degree view of up to 45 kilometres across the island republic and into neighbouring Malaysia and Indonesia, the developers say.

Higher-priced tickets include food and drinks.

The project, worth about S$240 million, is a private venture backed mainly by German investors. But Bollen says it has received strong marketing and other support from the city-state's tourism board.

He declined to reveal the rent they are paying for the site. Bollen says his company was the only bidder for the project designed by Kisho Kurokawa Architects and Associates of Tokyo, along with Singapore's DP Architects.

The builders are Mitsubishi Corp and Takenaka Corp of Japan.

Each ride on the flyer will last about 37 minutes and while passengers wait for "takeoff", they can wander among two lower levels of shops, restaurants, and a tropical rainforest.

It is marketing itself as a venue for everything from business meetings to weddings.

The 28 capsules on the wheel will be able to move about 10 million people per year, Bollen adds.

About 40 percent of revenue is expected to come from corporate clients and another 30 percent from travel agents, says Patsy Ong, managing director of Adval Brand Group Pte Ltd, the marketing agents.

Bollen says his firm is in "very active discussions" with civic authorities in New Delhi and Mumbai about possible wheels there too. - AFP/fa

Works Begin For Formula 1 Singapore Grand Prix

Source : Channel NewsAsia, 31 August 2007

SINGAPORE: Work has started at the Marina Bayfront for the F1 Singapore Grand Prix as officials await a decision next month by the international governing body for motorsports,FIA,on whether Singapore will proceed with a night or day race.

In nine months, what's now a muddy patch of land at the Marina Promenade will be transformed into a sleek Pit Building for the Formula 1 Singapore Grand Prix.

Trade and Industry Minister Mr Lim Hng Kiang, who graced Friday's groundbreaking said the event marks an important milestone. He noted that although the F1 Singapore Grand Prix is set to flag off in a year's time, the infrastructure will have to be up in about nine months. "But Singapore is a City of Possibilities, so I have full confidence we will be ready for the 28 September race date."

According to Mr Lim Neo Chian, Deputy Chairman and Chief Executive of the Singapore Tourism Board, the Pit Building will be completed by the end of May next year, which is a construction industry record.

The Pit Building, a key element in the infrastructure of the F1 Singapore Grand Prix, will house the race control facilities, team garages, hospitality lounges for about 4,000 guests, a Media Centre and other facilities.

Located along the waterfront at a new stretch of road off Republic Boulevard, the estimated S$33 million, three-storey Pit Building will measure some 350 metres long.

The structure has been designed to be simple yet modern, and also environmentally sustainable.

Related Video Link - http://tinyurl.com/2khtgq
Works begin for Formula 1 Singapore Grand Prix


Taking up most of the ground floor is space for 36 garages for the 12 race teams.

The Media Centre, hospitality lounges, race control centre and the winners’ podium will be situated at the second floor.

The top floor with a modern, aerodynamic structure will house more hospitality lounges and an open rooftop terrace for a bird's eye view of the street race.

The Pit Building will feature an extensive use of glass to provide guests in the exclusive Paddock Club a panoramic view of the track’s starting straight and all the exciting pit lane action that will take place just metres away.

Project developer Singapore GP, will also have to work with local firm Jurong Primewide Pte Ltd, which is the main contractor, to ensure that construction meets the stringent requirements of Formula One Management and the FIA. -CNA/vm

Photo Gallery: Pit Building for F1 Singapore Grand Prix


















Front View of the F1 Pit Building

















Rear View of the F1 Pit Builind


















Aerial View of the F1 Pit Building at the Southeast


















Ground View of the F1 Pit Building at the Southeast

Government Raises Property Development Charges

Source : Channel NewsAsia, 31 August 2007

SINGAPORE : The government is raising property development charges with effect from Saturday.

This follows the regular six-monthly review on development charge rates.

For non-landed residential use, the charge was raised by an average of 58 percent with prime areas like Cantonment Road seeing the biggest jump of 112 percent.

For commercial use, the hike is an average of 42 percent.

Market watchers say an increase was expected, but the steep hike is likely to slow down collective sales.

Related Video Link - http://tinyurl.com/394ut3
Government raises property development charges


Margate Mansion off Meyer Road in District 15 was sold en bloc on Thursday to Soilbuild Group for S$58 million.

The developer had projected a 20 percent increase in development charge.

But based on the announced rates, the jump is estimated to be about 55 percent - or an additional $2 million.

That means about S$10 million instead of the projected S$7.8 million.

This will work out to about 2 percent of the total development cost which property consultants say is still acceptable.

Nicholas Mak, Consultancy and Research Director, Knight Frank, says: "I think the industry as a whole is expecting an increase in the DC rate but the steep increase that we just saw this evening is probably higher than what most people would have expected. In July, the government adjusted the computation rate and DC rate increased by about 40 per cent across the board."

The average increase for non-landed residential use this time round is 58 percent.

Cantonment Road will see the sharpest hike at 112 percent followed by the Newton and River Valley at 108 percent and Anson Road at 104 percent.

Analysts attribute the jump to recent en bloc prices of properties like Oakswood Heights at Cantonment and Lincoln Lodge at Newton.

While market watchers expect the new rates to slow en bloc sales, they also note that developers might start looking at non-prime areas.

Mr Mak says: "I think that developers and sellers will have to go back and redo their sums, they'd have to factor in this new reality. Some developers may consider that some of the asking prices coupled with this increase in DC rate may make land prices a bit too expensive. Owners may have to adjust their asking price to see whether it still makes sense for them to proceed with the en bloc sales."

Meanwhile, commercial DC rates have gone up by an average of 42 percent.

And market-watchers say this could affect plans to redevelop certain commercial buildings.

Areas seeing the highest increase (of over 100 percent) include Telok Ayer, Maxwell, Shenton, Anson and South Bridge Road. - CNA/ch

Wing Tai Asia Upcoming Projects

Former Anderson 18 Site

The former Anderson 18 site is strategically located along Anderson Road, amongst one of Singapore’s most prestigious addresses. This exclusive freehold development is tucked away in a quiet residential enclave and yet just a few minutes walk from Singapore’s shopping belt – Orchard Road.

Within the immediate vicinity of the former Anderson 18 site are top schools and institutions such as the Raffles House Preschool, the Anglo-Chinese Junior School, the Raffles Girl’s Secondary School, and the Singapore International School. There are also much sought after clubs such as The American Club and The Tanglin Club nearby.

Easy AccessibilityThe site is well served by the Central Expressway (CTE) and major roads such as Tanglin Road, Stevens Road, Scotts Road and Orchard Road. The Orchard MRT Station is also just a short walking distance away.

Type : Condo
Tenure : Freehold
Location : 18 Anderson Road, Singapore
Site Area : 10,414 sq m ( 112,098 sq ft)























Former Ardmore Point Site

Located at the prestigious residential area of Ardmore Park, this exclusive site is just a mere five-minute walk from Orchard Road, Singapore’s main entertainment and shopping belt, where major shopping malls like Orchard Hotel and Palais Renaissance Shopping Arcade can be found. In addition, the site is within close proximity to the popular Singapore Botanic Gardens whereby residents can enjoy lush greenery and find themselves close to nature.
Distinguished clubs such as The Pines, The American Club and Tanglin Club are just a stone’s throw away while leading educational institutions like Raffles Girl’s Secondary School, Anglo-Chinese School, Singapore Chinese Girls' School and Singapore International School are within the immediate vicinity.
Easy Accessibility
Residents will find traveling a total breeze with Orchard MRT Station located nearby. Accessibility of the site is further enhanced by its close proximity to the Central Expressway (CTE) and major roads such as Stevens Road, Newton Road and Scotts Road. Hence, residents will find themselves well connected to any part of the island.

Type : Condo
Tenure : Freehold
Location : Ardmore Park, Singapore
Site Area : 5,623.75 sq m (60,534 sq ft)























Belle Vue Residences

Situated in the exclusive residential area of District 9, this distinctive site is located on high ground and enjoys the luxury of an unobstructed view of its surroundings. As it is sited away from the main road, it provides future residents with a serene and tranquil environment. Prestigious educational institutions such as the University of Chicago Graduate School of Business (GSB) and Singapore Management University (SMU) are in the vicinity. Sits in the Civic District, this distinguished site is also in close proximity with the Singapore History Museum and Singapore Arts Museum. Shopping malls such as Singapore Shopping Centre and Plaza Singapura, are a stone’s throw away while Orchard Road - Singapore’s main entertainment and shopping belt, is just a short walk away.

Easy Accessibility
Traveling could not have been made easier with the availability of the public transport facilities available along Penang Road. Located nearby are the Somerset MRT Station and the Dhoby Ghaut MRT Station - a vital mass transit hub that links the existing North-South MRT line to the new North-East MRT line and the proposed Marina line. Future residents will also enjoy easy access to the Central Expressway, which makes traveling to all parts of Singapore a total breeze.

Type : Condo
Tenure : Freehold
Location : 15 Oxley Walk, Singapore
Site Area : 22,649.11 sq m (243,795 sq ft)
Total Units : 176





















L'VIV along Newton Rd

Located along Newton Road, this prestigious freehold development is located in Newton exclusive neighbourhood, with other high-end private developments by Wing Tai such as Amaryllis Ville and Newton 18 just located directly opposite.
Sited between the Newton and Novena MRT Stations, it has one of the most strategic locations and both MRT Stations are just within walking distance from the site. Orchard Road – Singapore’s main shopping and entertainment belt is a mere 5-minute drive away while many distinguished social and recreational clubs such as the American Club and the Tanglin Club are also within the immediate vicinity. Some of the excellent schools located nearby include Anglo-Chinese Primary School, Anglo-Chinese Junior School, St. Michael’s Primary School, Singapore Chinese Girls’ School, St. Joseph Institution and Monks Hill Secondary School.
Residents can also take a pleasant stroll to nearby shopping malls such as Novena Square and United Square; where shops, supermarkets, banks, and eateries are ample and conveniently available.







Easy Accessibility
Traveling will be a total breeze as both Newton and Novena MRT Stations are located within walking distance from the site. Accessibility of the site is further enhanced by its close proximity to the Central Expressway (CTE), the Pan Island Expressway (PIE), Bukit Timah Road, Newton Road and Scotts Road.

Type : Condo
Tenure : Freehold
Location : 23 Newton Road, Singapore
Site Area : 3,984.20 sq m (42,886 sq ft)
Total Units : 100

MCL Land Upcoming Projects

Hillcrest Villa at Hillcrest Rd

MCL Land has successfully purchased a 256,000 sq ft leasehold site at No. 1 Hillcrest Road from telecom giant SingTel. The residential redevelopment of this prime District 11 site will certainly be one to watch, as its location at the junction of Hillcrest and Dunearn Roads means that it is, uniquely, practically surrounded by some of Singapore's most prestigious schools: Nanyang Girls' High School, National Junior College, Raffles Girls' School, The Chinese High School, and Hwa Chong Junior College. Its immediate vicinity is primarily low-rise private landed estates, with ample shopping and dining facilities also in the area.























D'Pavilion at Upper Serangoon Rd

The 46,100 sq ft freehold site is situated in a well-established neighbourhood predominantly comprising mixed apartment developments and landed housing. It is in close proximity to the Kovan MRT station on the North-East Line, as well as the amenities of neighbourhood centres and shopping malls like Kovan Centre, Heartland Mall, Upper Serangoon Shopping Centre, and Serangoon Gardens. Numerous schools are also in the vicinity, including Rosyth School, Serangoon Junior College and Parry Primary School. In addition, it is well-served by numerous thoroughfares in the area, such as Upper Serangoon Road and the Upper Serangoon Viaduct, Yio Chu Kang Road, Upper Paya Lebar Road, and Boundary Road, which leads to the CTE.























Boon Teck Heights Site

The 27,369 sq ft freehold site is located along Boon Teck Road, off Balestier Road and in close proximity to the Toa Payoh Town Centre and MRT Station. It is well served by established facilities/amenities such as Balestier Plaza and Shaw Plaza. Access to the Central Business District and other parts of the island is convenient via the Central Expressway (CTE) and the Pan Island Expressway (PIE).

















Balmeg Court Site

Balmeg Court is located in an area consisting primarily of landed properties, townhouses and low-rise apartments on the west coast of Singapore. The site is favourably situated on Balmeg Hill off Pasir Panjang Road, and is characterised by an exclusive and tranquil setting with sea views even from the ground level. The area is popular with both locals and expatriates as it is well-known for several boutique eateries and shops, as well as food centres. It is also near centres of learning, including the National University of Singapore and the National Community Leadership Institute. The historic Kent Ridge Park adds to the greenery and ambience of the locale.





















The site is easily accessible via the West Coast Highway and the AYE. Furthermore, the new underground MRT Circle Line will run through the area and it is anticipated that the proposed West Coast Station will be sited within a stone's throw to the site. At over 183,900 sq ft, this freehold site is slated for redevelopment into approximately 200 units in a 5-storey condominium.

Rising Rents Offer Opportunities

By Sonia Kolesnikov-Jessop

Tenants in Singapore have been getting a nasty surprise. Having been stagnant for years, the rental market started to rapidly increase last year, especially for luxury residential property. An average 15% jump in 2006 means rents in Singapore are now the 15th most expensive in the world and the eighth highest in Asia, according to a survey by human resources research firm ECA International.

The shock has been nastiest for tenants coming out of a long-term lease, especially in prime districts, as they can often face increases of 50% or even more to renew their lease, as property owners strive to catch up with the current market level.

Savills estimates overall non-landed residential rents (all districts) averaged S$2.24psf per month in the second quarter of 2007, up 33% on the same period last year. But non-landed residential rents in prime districts 9, 10 and 11 have increased by 36% and now average S$3.30psf per month, while high-end developments within these districts are transacting at an average of S$5.56psf per month, a 26% increased compared to the same period last year.

“Overall, rental rates in Singapore are still cheaper than in Hong Kong,” points out Simon Hill, Savills’ Regional Director of Commercial Real Estate Services. For example, in Singapore, the asking rent for a luxury apartment at Ardmore Park is from S$17,000-$19,000 month, or S$5.90-$6.60psf, while a sought-after lifestyle condo, like Caribbean at Keppel Bay, can fetch about $5psf for a unit with a view on the waterway.

In comparison, the asking rent for a unit at the prestigious Branksome Crest in Hong Kong’s Mid-levels area is about S$24,000 per month or about S$10psf per month, while the average rent of other luxury residential in the Mid-Levels area is around S$7-$7.2psf per month.

Landlord’s market
Although Singapore’s rental market started on its upward path in the second quarter of 2005, the pace only really picked up at the end of 2006. Nicholas Mak, Knight Frank’s Director of Research and Consultancy, points out that rentals are now still 25% lower than the peak in 1996.

“One reason why tenants are complaining is because they’re used to the tenant’s market from 2001 to 2005, where there was lots of supply and low rentals. Landlords then were bending over backwards to please tenants. Now, it’s becoming a landlord’s market,” Mak says.

Tenants are likely to continue feeling the pinch for some time. Hill predicts rents in Singapore will continue to increase by another 10-15% until the end of the year and by another 25% in 2008. This fast increase in rents reflects the convergence of several factors.

“It really gathered pace in the last year with the en-bloc sales,” says Ong Choon Fah, DTZ Debenham Tie Leung’s Executive Director and Regional Head for Consulting and Research. “Last year more than 6,000 units were sold and people are looking for replacements. On top of it, we’re getting more expats coming into Singapore as the economy strengthens.”

The sharp rental spike in districts 9, 10 and 11 heralds the rise of several new trends in the local property market, including that many expatriates are now moving out of the prime districts. Some are considering landed properties and HDBs, while others are buying, thus lending further support to the recovery of the property sales market.

"Unless you have a good corporate budget helping cover this housing cost, it’s becoming quite pricey, which is why we’re seeing expatriates moving out of prime districts and into the fringes, like District 15, where rents are also rising but remain more affordable,” Ong says.

"For the high end of the market, we’ve found multinational companies are still willing to give housing allowances in order to attract and retain talent. However, middle managers are the ones squeezed out. They’re the ones moving out to the fringe areas, or to landed housing where rents are usually lower by 10-20% than a condominium because the locations are often not in a prime area.”

Time to buy
Hill adds that the desire to buy is increasing among expatriates, “particularly Australian and British expats who generally have more confidence in Singapore as a market and are more conditioned into buying rather than leasing homes”.

A DTZ analysis of the Urban Redevelopment Authority’s Realis caveat data revealed that foreigners and permanent residents bought 1,938 private homes in the first quarter of this year, just a fraction higher than the 1,934 homes in the fourth quarter of 2006, but still the highest number of foreign purchases recorded by the Realis system. Buying was concentrated in the prime areas of Orchard, Holland and Bukit Timah, as well as Katong and East Coast.

Interestingly, the number of foreigners who purchased apartments from developers fell 21% quarter on quarter, while the number of foreigners who bought resale apartments increased 13% quarter on quarter to total 1,315 transactions.

The immediate availability of private homes in the secondary market means that foreigners either want to have a share of the current buoyant leasing market or require immediate accommodation. “There are also some who have received permanent residency and are keen to own residential properties, partly as rents have been rising,” the DTZ report noted.

But if rents have been going up, rental yields remain fairly stable and in some case are even compressed because underlying property prices have been increasing at the same rate or at an even faster pace.

At Ardmore Park last year, rent for a 2,885sqft unit was about S$15,000 per month, and with a median price back then of $1,800psf this would give a yield of 3.5%. This year, the asking rent has gone up to about S$18,000 per month for a similar unit, but the median price has also increased to S$2,500psf, so bringing the yield down to only about 3%.

“Yield for luxury properties is currently around 2.5%-4%,” notes Hill, adding that for some mid-tier properties, and depending on the area and developments, some properties can still achieve a yield as high as 5%.

However, Ong notes that: "Most people don’t buy in Singapore for the rental yield but for the appreciation in capital gain, so they look at total return. Those that would have bought those high-end apartments in District 9 and 10 last year can look for a profit of 50-100% this year

Marina Bay living

Kan Kum Wah, Head of Residential Marketing, BFC Development.

As plans are being finalised for the launch of the second tower of Marina Bay Residences, Kan Kum Wah explains how the sell-out success of the first tower kick-started Singapore’s current luxury sector boom.

As Head of Residential Marketing for BFC Development, Kan Kum Wah oversaw the record sales of Marina Bay Residences last December. It was the latest major project for Kan, who has nearly 20 years of experience in marketing and launching many of Singapore’s most coveted residential addresses, including Ardmore Park and The Claymore, to key regional markets.Kan joined Knight Frank’s marketing department in 1989, providing consultancy services to major property developers such as City Developments Limited (CDL) and Far East Organisation. In 2004, he was seconded to Knight Frank Indonesia as head of the company’s residential department, managing promotional and marketing campaigns for premium serviced apartments in Mega Kuningan to the Indonesian, Singapore, Hong Kong and China markets. Kan then joined PT Cozmo Internasional, a leading Indonesian property developer, as Director of Marketing, Business and Project Development.

BFC Development
BFC Development Pte Ltd is a joint venture between Cheung Kong Holdings, Hongkong Land and Keppel Land, focused on the development of the Marina Bay Residences and the Marina Bay Financial Centre on a 3.55-hectare site in Singapore’s new ‘downtown’. Phase One is set to be completed in 2010 and will include a 55-storey residential apartment building, 244,000sqm of office space, and retail and recreational facilities. Plans for Phase Two, which will include more commercial and residential elements to be completed in 2011, will be announced later this year.

How did Keppel Land, Cheung Kong Holdings and Hongkong Land decide to come together to buy the site in Marina Bay?
In 2002-03, the property market was still very slow. This prime site was released for tender and the three developers were all interested, but were not certain of the market. Any of them could handle the project alone, but they teamed up to mitigate some risk because the market was not healthy at the time. The economy was quite stagnant and everyone was waiting to see what would happen, and that’s why they went in together and bid almost S$1 billion for the land. Once we were awarded the land, the master planning started with KPF (Kohn Pedersen Fox). We were all just hoping the project would take off, and it did.

What assets and attractions in Marina Bay were the developers aware of at the time?
At that point, the URA (Urban Redevelopment Authority) had given a vision for Marina Bay, but nobody knew then the gaming licences were coming (they were announced in April 2005). The new downtown had been clearly identified and the URA had its blueprints, but how far and how well it was going to be developed was an unknown.

How did you feel in May 2006 when you found out Marina Bay Sands would be a neighbour of Marina Bay Residences?
It was a pleasant surprise. After all, we had gone into virgin territory. I mean, The Sail launched its second tower at the end of 2005, selling for just over S$1,000psf, and in December 2006, we launched the first tower of Marina Bay Residences, which sold on average at S$1,900psf. That’s almost a 100% jump, which nobody could have predicted. You could have said Christmas came early for the developers, but it was never meant to be like that. We were never meant to be greedy. We were happy with a certain amount of profit and are prepared to share the rest with consumers.

Aside from the profits, Marina Bay Sands and all the other new attractions in the area, like the Singapore Flyer, are all positives for prospective residents. How do you spread such news to overseas markets?
We have a very good PR campaign run by Baldwin Boyle Shand, along with our internal marcom team. The experience of the three developers showed in the success of this launch, because we all understood how important it was to communicate with our market. A lot of times, insufficient information is given to buyers and we don’t want consumers to second guess what’s coming up. We embarked on a very thorough communication process, by having journalists brought from Hong Kong, the Jakarta Post, and so on. I also went to Jakarta to talk to the media. So, we were able to spread awareness much faster and that’s where we gave ourselves a competitive advantage.

Were you expecting a large number of foreign buyers?
Traditionally, Singapore developers always go after two markets, Indonesia and Hong Kong. We were just following that tradition. But we knew there would be a high amount of foreign interest, so the intention was to get the best buyers, globally, to participate in this project. This is for buyers with deep pockets. Most of them know what they really want, so there’s not much need for an introduction except to reassure them of the quality. That’s the part we were doing, because the location was already there.

Generally, what are the different requests between a buyer from Hong Kong and a buyer from Jakarta?
People in Hong Kong will always ask, ‘What’s my upside?’ For Jakarta buyers, as they’re so close to Singapore, they’ll ask about the tenure of the land. This is leasehold land (99 years). At the same time, they always ask, ‘Are we close to Orchard Road?’ You have to explain in more detail. In Hong Kong, you explain that we’re equivalent to being in Central (in Hong Kong) or Canary Wharf, in London.

The location of the casino beside Marina Bay Sands must have been a major attraction.
Asians like gambling, so by announcing Sands, it gave us a lot of mileage. It does help us push the marketing to the next level.

Of the 428 units sold, 40% were bought by foreigners. Aside from Hong Kong and Indonesia, where did buyers come from?
We have buyers from Malaysia, the Middle East, India, UK and the US. We also sold eight apartments to mainland Chinese and two to Taiwan, so I think we really had a good spread. Most of them already have a home in Singapore or investments in Singapore, so for them it’s an additional home or an additional piece of investment.

What was the nationality about the buyer of the three-storey, 11,000sqft Über Penthouse?
He’s an Asian buyer who’s very familiar with Singapore properties. That’s all I can say.

What’s your opinion on the amount of speculators who bought into Marina Bay Residences?
Most of the buyers are still holding on to their units. I’d say 10-15% of units have changed hands, so the speculation factor is not as high as some people thought it was. The speculative issue has been addressed by the current government, but it doesn’t want to discourage the current property market, as most speculation is focused on the high-end market. Most of these buyers can afford it and know what they’re doing. I think we’re in a very controlled environment. The banks are very careful with their lending, and they assess the risks for potential buyers. Speculation has not filtered down to the mass market.

You’ve said December is not usually a good time to launch because many people go on holiday. So, how did you sell 428 units in three days?
I think the market was ‘ready’ for us and as a marketing team, we decided it was time to launch, so we did. If you’re really keen on the property, you’ll book your holidays around the launch! The quality and workmanship was evident in the showflat, the three developers have established reputations, so the most common question was about the timing of the next phase: ‘When can we get another flat?’

The prices certainly made headlines.
We averaged S$1,900psf, but we peaked at between S$3,450-S$3,500 for a penthouse unit. The Über Penthouse sold for over S$28 million.

Yet, considering how the market has since risen, do you sometimes think, ‘If only we’d waited …’
Ha ha. I think Marina Bay unleashed the potential in the Singapore market and brought back the confidence of the real estate market. Everyone was holding back, thinking whether real estate was worth considering, and finally they said, ‘Yes’, and that’s when all the rest of the buying came along. There are no regrets from the shareholders, as we had a base price, we achieved our objectives, everybody was happy. Sure, six months down the line, the market booms, but we don’t look back. Also, we must share our gains with our buyers, because if the market downturns, they will suffer. It’s a two-edged sword. We have no regrets launching at the price we did, as all our consumers have made money.

You’ve set a provisional target of launching the second residential tower by the end of the year. Physically, how will it differ from the first?
We’re looking at a bigger building, with about 250 larger units, a mix of three and four bedrooms. We expect to build close to the allowable maximum height of 250m, whereas the first tower was 239m high and 55 storeys. However, I can say now that we’re not here to set record prices. We want to sell it as quickly as possible, but we don’t want to set a timeline target. We’ll let the market decide, as we don’t know what it will be like in a few months’ time.

Why have you chosen to speak at September’s China International Luxury Property Show in Shanghai?
China is now a very global market that one has to visit. For the first phase, we didn’t have the chance to go to China and talk to our customers there, so we’re making full use of this opening. This is not limited to Chinese buyers because Shanghai is a global city. When we sold tower one, we sold all the units at our launch Singapore, so that’s why we want to market more overseas and do more sales overseas. We’re looking at all possibilities.

The luxury sector has evolved a lot in the last six months, with the advent of ‘super-luxury’, such as pools on every balcony. Will it be harder to pitch Marina Bay Residences as ‘luxury’ in light of more boutique developments?
We have upgraded our plans a lot in terms of quality, security, kitchenware and so on. For this level of buyer, you have to provide such quality. The buyers are more educated now, definitely, but we also don’t want to go through a stage where we’re creating things that are extravagant, where people may not feel the need for it. We are addressing what we call the expected quality but not over-killing it.

The Marina Bay Residences will stand beside the Marina Bay Financial Centre, which is already filling up with future tenants. What kind of environment can buyers of Marina Bay Residences expect to be living in?
We expect about 50,000 office workers in the office towers when the second phase is complete in 2011 and 2012. By then, the new MRT line should be operational, with the Landmark station below the office towers and Bayfront station by Marina Bay Sands. In fact, the resort should be open by 2009, while our first residential tower should open by the first quarter of 2010. The Sail is set to be up by 2008. New attractions in the Marina Bay area include the Marina Bay Golf Course, which is open, the Singapore Flyer, Clifford Pier, Gardens by the Bay and the Marina Barrage. It’s amazing how much is going on.

Singapore joining next year’s F1 calendar is also good news for Marina Bay residents, who should be able to view parts of the race, and certainly hear it.
F1 is a yearly event, so it’s more geared towards the tourists, but I’m sure owners will expect more friends to stay over! It’s expected to bring a lot of revenue into the area and a lot of vibrancy.

What else will residents be able to see from their windows and balconies?
They can see the Singapore Flyer, the nightly fireworks from Sands, the Esplanade, as well as the ‘postcard of Singapore’: the Fullerton and the Merlion. Marina Bay Residences units are generally facing this Marina Bay area or the Straits, across the water to Sentosa and Batam. These are views only money can buy. This is truly the ‘million dollar view’, so it’s really for the exclusive few.

Do Away With The Frills, Pay Higher Interest Instead, POSB

Source : The Straits Times, Forum, Aug 31, 2007

I REFER to the article, 'POSB gets a boost with $35m makeover' (ST, Aug 29), and am saddened by DBS' lavish spending to refurbish the 'People's Bank' where rising service charges and affordability are paramount concerns to account holders.

The 'People's Bank' started off as a poor man's savings bank for the masses with minimal balance of $1 and paying interest at a nominal rate.

But now, you need to maintain a daily average balance of $500. When the amount falls below the threshold, a fee of $2 per month is levied.

Many low-income workers earning less than $1,000 are compelled to open a savings account for the convenience of the employers.

It is impossible for them to maintain the daily average balance of $500 when they are living from hand to mouth, and some with many mouths to feed.

There are also many old folk and senior citizens whose old-age savings are placed with the bank earning a miserable low interest.

These elderly folks, who in their youth had contributed to national building, should be rewarded by the 'People's Bank' as a corporate citizen by waving the monthly $2 fees and offering a higher interest rate that will benefit them more than all the frills fitted in the branch premises.

Chin Kee Thou

Raise Saturday ERP Rates To Ease Gridlock

Source : The Straits Times, Forum, Aug 31, 2007

I REFER to the letter by Ms Naleeza Ebrahim, 'Saturday ERP keeps Orchard Rd traffic going' (ST, Aug 29), and could not agree less with the views of the Land Transport Authority (LTA).

From where I live, I have a perfect view of Cairnhill Road and Orchard Road and the weekend traffic gridlock is appalling. There was one Saturday evening when I missed four green lights even though I was just metres away from the traffic junction.

Being a student of economics, I understand the relationship between the demand and supply of road utilisation. During the weekends, demand for the use of Orchard Road is far more than what the road network can supply, therefore a price, in the form of ERP, must be imposed to regulate demand so that there is optimal utilisation of the road.

Unfortunately, many motorists don't understand the ramifications of not having ERP on Saturdays: emergency vehicles would be caught in jams, endangering the lives of whoever requires their service; goods vehicles would be delayed, resulting in late deliveries and affecting trade; the environment would be damaged by the fumes of vehicles; oil prices might rise in the long run due to wastage of petrol while engines continue running in jams, etc.

I had even contemplated writing to LTA to suggest a further increase in ERP rates for the Orchard area during peak periods and on Saturdays.

One of the reasons why rates for ERP are so high and are in operation for longer hours is to discourage the use of private vehicles downtown and as an incentive to take public transport.

Furthermore, the tax collected from the ERP can be used to fund projects that benefit the environment, to offset the pollution caused by vehicles caught in jams.

I thank the LTA for doing what it thinks is best for society.

Pavin Limanont

Peg CPF Rate To Bonds But Keep 4% Minimum

Source : The Straits Times, Forum, Aug 31, 2007

I REFER to Manpower Minister Ng Eng Hen's recent proposal to change the interest structure for CPF members' Special, Retirement and Medisave accounts.

Presently the interest rate for the Ordinary Account is based on the 12-month fixed-deposit and month-end savings rates of the major banks. For balances in the Special and Retirement accounts, members earn an additional 1.5 percentage points over the normal interest rate. From Oct 1, 2001, this also applied to the Medisave account. This is to help CPF members build up their Medisave savings in view of escalating medical costs.

Under the CPF Act, the Board pays a minimum interest of 2.5 per cent per annum when the CPF interest formula yields a lower rate. The corresponding minimum for the Special, Retirement and Medisave accounts is 4 per cent. The provision of the minimum rate is commendable, and serves to preserve the value of CPF savings. This has underpinned the social compact regarding CPF savings between the Government and the people for as long as one can remember.

The importance of this minimum rate can be seen from the fact that the CPF formula had yielded a lower rate for eight years, from July 1999 till now. I am sure many people are quietly thankful that there is a minimum rate during this prolonged period of low interest rate.

Recently, Mr Ng proposed pegging the interest rate for the Special, Retirement and Medisave accounts to 'long-term bond rates' with no minimum. He conceded that in the prevailing low-interest regime, the new rate would initially be lower than 4 per cent.

Going by past trends and present outlook, I am concerned that 'initially' is likely to be a fairly long period, with the interest rate shaved by 1 percentage point or even more.

Hence I suggest that the longstanding social compact on CPF interest rate be preserved, that is, to peg the rate to the long-term bond rate, but subject to the present minimum of 4 per cent per annum.

Either that or defer any change until the overall target date of 2012.

This will be fairer to CPF members, and will dispel any perception that the Government is taking from the Special, Retirement and Medisave accounts to fund the one-point bonus interest on the first $60,000 of CPF members' combined accounts.

Loke Yue Chong

Rising Construction Costs: Govt Will Step In If Needed

Source : The Straits Times, Aug 31, 2007














'We must have a realistic view of the situation and know what measures the different parties are taking to mitigate it and ride this boom,' said Mr Lim. -- ST PHOTO: ALBERT SIM

THE Government will step in and mitigate any impact from the rising construction costs whenever it is in a position to be pro-active.

Singapore's Trade and Industry Minister Lim Hng Kiang gave this assuarance on Friday just three days after Las Vegas Sands revealed an almost 40-per-cent rise in the projected cost of the development of Marina Bay Sands.

Speaking to reporters after observing the groundbreaking for Singapore's Formula One Pit Building, Mr Lim said the construction sector is experiencing a 'very special set of circumstances'.

'During the downturn, there was consolidation...so our capacity in fact was reduced. Now with this big spurt in construction activities there is a shortage of construction capacity, aligned with higher cost of steel and other construction material, so construction cost has gone up,' he said.

The Government's job, said Mr Lim is to 'try and manage this process'.

He added: 'Where we are in the position to be pro-active and mitigate the impact for example quota for foreign workers and other ways, the Government will continue to do so. We have done so and we'll continue to do so.'

The minister added the Ministry of National Development is in constant talks with the Singapore Contractors Association to contain any price increases that could be detrimental to Singapore.

'We must have a realistic view of the situation and know what measures the different parties are taking to mitigate it and ride this boom,' he explained.

Mr Lim added the construction industry contributes about 4 per cent of Singapore's overall GDP, a 'small part' of the economy, he said, so the impact is not that significant.

Las Vegas Sands president William Weidner had said on Tuesday that costs are expected to rise by up to US$1.4 billion (S$2.1 billion) ? a significant increase on the original US$3.6 billion price tag for the Marina Bay Sands Integrated Resort.

'We are struggling quite frankly to stay within budget', Mr Weidner said.

He attributed the higher cost to recent increases in construction prices, including the cost of sand, as well as various refinements to the design.

Despite the rising budget, Las Vegas Sands had reiterated that it remains committed to the massive resort project, which is expected to transform the Marina Bay area.

Some 25,000 People Qualify HDB'S Lease Buyback Scheme: Mah

Source : The Straits Times, Aug 31, 2007

ABOUT 25,000 people qualify to take part in the Housing Board's future lease buyback scheme, which allows flatowners to sell a portion of their lease to the Board in return for an income.

That number will increase over the years, revealed National Development Mah Bow Tan on Friday night.

The upcoming scheme, announced by Prime Minister Lee Hsien Loong in August this year, is designed to supplement the retirement savings of elderly low-income flatowners, while letting them live in their own flats.

Under the plan, the Government will shorten a flat's lease to 30 years, and pay the homeowner for amount of lease left over.

This means that, if the 99-year-leasehold flat has just 50 years of lease left, a homeowner would be compensated for the remaining 20 years after Housing Board buys back his lease.

Mr Mah said, while opening an exhibition showcasing future public housing projects at the HDB Hub, that the actual value of the flat 'unlocked' will depend on the market value of the flat. But to encourage homeowners to join the scheme, it would give them a subsidy on top of this market value.

Payment will be divided into three parts - the first being an initial lump sum payment, followed by monthly instalments over a fixed number of years.

If the residents do not live for that long, the amount unpaid will be returned to the participants' families.

A third portion of the payment, said Mr Mah, will go towards an insurance scheme that will give the owners an income for as long as they live.

Mr Mah said the HDB is still working out the details with agencies like the Central Provident Fund Board, which is also looking into a scheme to make sure people do not outlive their savings.

HDB's scheme, he said, will likely ride on the CPF's plan when it is ready.

Home owners wanting to join the lease buyback scheme must be at least 62 years old, with a two- or three-room unit and have had only one housing subsidy, in order to qualify.

At the same event, Mr Mah unveiled a wide range of proposals for housing in Punggol, Yishun and Dawson estate in Queenstown.

On display were designs by three award-winning architectural firms - Surbana International Consultants, WOHA Architects and SCDA Architects - which conceptualised 3,000 cutting edge homes in three public housing precincts in Dawson Estate in Queenstown.

The new generation of public housing, said Mr Mah, would give buyers more choices of homes, landscaped community spaces, and bring greenery and waterscapes to their doorstep.

Punggol, for example, will get 4.2km waterway linking two future reservoirs, by which future housing will take root.

The exhibition will be held at the HDB Hub until Sep 8, after it will travel to various housing estates. The HDB will gather feedback on the its proposals before proceeding with them.

Soilbuild Paying $58m For Meyer Road Site

Source : The Business Times, August 31, 2007

Separately, URA launches tender for Sin Ming light industrial site

Recognising potential: Soilbuild factored in a 20% rise in DC rates in the Margate Mansion deal

SOILBUILD Group Holdings has bought the freehold Margate Mansion off Meyer Road for $58 million through a collective sale.

The deal reflects a unit land price of $882 psf per plot ratio including an estimated $6.5 million development charge (DC) based on July 18, 2007 DC rates. Provisional permission for a new development has not been obtained, so the $6.5 million estimated DC quantum has not been locked in.

Soilbuild will have to pay DC based on Sept 1, 2007 rates, which most market watchers say will shoot up in tandem with sharp gains in residential land values over the past six months.

Asked why Soilbuild announced a deal just a day before the latest DC rates are announced, the group's executive director Low Soon Sim said: 'We have factored in a 20 per cent rise in DC rates for the area come Sept 1, and we see the potential of the area. This is a District 15 site located in the much sought-after Meyer Road residential enclave.'

Margate Mansion's collective sale, which is subject to approval by the Strata Titles Board, was brokered by CB Richard Ellis.

The 34,804 sq ft site has a 2.1 plot ratio - the ratio of maximum potential gross floor area to land area. Assuming an average size of 1,500 sq ft per unit, the site can be redeveloped into a new project up to 24 storeys high, with a total of 48 units, Soilbuild said in a statement yesterday.

The project may be launched towards the end of next year.

Separately, the Urban Redevelopment Authority launched a tender yesterday for a 5.13-hectare industrial site in Sin Ming Lane. The land has a 2.5 plot ratio and is being sold on 60-year leasehold tenure. Colliers International director (industrial) Tan Boon Leong reckons the top bid is likely to be in the $60 psf per plot ratio range. This would translate to a breakeven cost of $230-250 psf for the completed development.

'If a developer wants to maximise profit, he will build a ramp-up development,' Mr Tan said.

The site is zoned for Business 1 use and can be used for clean and light industrial use. It is within the established Sin Ming Industrial Estate.

The tender for the site, which is on the confirmed list of the Government Industrial Land Sale Programme, closes on Oct 24.

Too Early To Declare Market Woe Over: IMF's Lipsky

Source : The Business Times, August 31, 2007

Although market woes were not good news, Mr Lipsky said that strong underlying growth in many economies before the turbulence picked up would provide a crucial cushion

JACKSON HOLE - Financial market turmoil will dent but not derail world growth and it is too soon to declare the problems over, International Monetary Fund (IMF) First Deputy Managing Director John Lipsky said on Thursday.

'Central bank action so far has been appropriate but market turbulence has not fully receded,' Mr Lipsky said in an interview on the sidelines of a gathering of top international central bankers and economists.

The Federal Reserve and European Central Bank have injected billions of dollars and euros into the financial system this month to prevent them from seizing up over fears of contagion from the US sub-prime mortgage market, but it was not over.

'The problems persist. It is far too early to draw a line under the recent events,' Mr Lipsky said.

Many policymakers involved in these decisions were in Jackson Hole for a policy conference hosted by the Federal Reserve Bank of Kansas City, including Fed Chairman Ben Bernanke, members of the Fed's interest rate-setting committee, board members of the ECB and other central banks.

The IMF is still estimating the fallout for world growth and although market woes were not good news, Mr Lipsky said that strong underlying growth in many economies before the turbulence picked up would provide a crucial cushion.

'On the basis of developments so far, it would seem clear that the financial turmoil will exert some dampening on global growth. But given the strong starting point it would seem that growth will remain solid,' he said. -- REUTERS

Bush To Outline Sub-Prime Mortgage Initiative

Source : The Business Times, August 31, 2007

Mr Bush, in a statement scheduled for 11.10am (1510 GMT) in the White House Rose Garden, will discuss the need for Congress to pass Federal Housing Administration reform legislation aimed at giving the agency the flexibility to help sub-prime mortgage borrowers

WASHINGTON - US President George W Bush will propose reforms on Friday intended to help homeowners with sub-prime mortgages avoid default, his first public step to address a crisis that has created turmoil in financial markets around the world.

'He will also discuss reform efforts to prevent these kinds of problems from arising in the future,' a senior administration official said on condition of anonymity.

Many analysts warn that a spreading credit crisis could drag the US economy into recession but the Bush administration has repeatedly said that US economic fundamentals are healthy and that global growth is robust.

The Federal Reserve has taken steps to increase liquidity in markets and faces calls for interest-rate cuts to head off a broader credit squeeze that could drag economic growth down.

Mr Bush, in a statement scheduled for 11.10am (1510 GMT) in the White House Rose Garden, will discuss the need for Congress to pass Federal Housing Administration reform legislation aimed at giving the agency the flexibility to help sub-prime mortgage borrowers, two administration officials said.

One move will be an administrative change to allow the Federal Housing Administration to guarantee loans for borrowers at least 90 days behind in mortgage payments to help them avoid foreclosure, the Wall Street Journal reported from a briefing given to a few newspapers.

Mr Bush will urge the Democratic-led Congress to work with him in a bipartisan way to reform the tax code to help troubled borrowers revise their loans, administration officials said.

He will ask Congress to temporarily suspend a tax provision that has left some troubled homeowners with large tax bills, the Wall Street Journal reported.

Mr Bush is also expected to direct Treasury Secretary Henry Paulson and Housing Secretary Alphonso Jackson to work on an initiative to help troubled mortgage holders obtain services and products needed to prevent default, officials said.

He will discuss the need for rigorous enforcement of predatory lending laws and strengthening lending practices, they said.

Federal Reserve Chairman Ben Bernanke, who has been criticised for being too slow to take sterner measures to stamp out the smoldering credit crisis, is scheduled to speak on Friday morning about housing and monetary policy shortly before Mr Bush's statement. -- REUTERS

S'pore Hikes Property Development Charges

Source : The Business Times, August 31, 2007

SINGAPORE - Singapore said on Friday it will raise property development charges from Saturday to reflect the rising value of homes and offices.

Firms building offices and malls will see the development charge rise by an average of 42 per cent from July, while those developing condominiums will pay a charge that is 58 per cent higher, the Ministry of National Development said.

The charge for houses will rise 11 per cent while the charge for hotels and hospitals will increase by 23 per cent.

The government imposes a development charge whenever it approves plans that result in an enhancement in the land value.

The tax is aimed at creaming off about 70 per cent of the rise in the site's estimated value.

Private home prices in Singapore rose 8.3 per cent in the second quarter from January-March, according to government data, boosting earnings for developers like CapitaLand Ltd and City Developments.

Singapore's property stock index has fallen 6 per cent in the past month following a global credit squeeze, but remains 23 per cent up since the start of the year.

Horizon Towers Saga Reaches A Turning Point

Source : The Business Times, Fri, Aug 31, 2007

(SINGAPORE) The long-running saga that has gripped the Singapore property market has reached a turning point; the majority sellers in the Horizon Towers debacle now have just over a week to respond to lawsuits filed against them.

Sued for allegedly messing up the en bloc sale of the development, the majority sellers need to decide if they should contest the action or give in to the demands.

BT spoke to several lawyers to determine the implications of each decision.



Background

The tale began in February when 84 per cent of Horizon Towers owners - the majority sellers - agreed to sell the Leonie Hill development en bloc to Hotel Property Ltd (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority for $500 million.

The sale fell through when the Strata Titles Board (STB) in early August refused to grant an order for the collective sale. The board said the sale application was defective because certain documents were missing.

STB's rejection came just days before the Aug 11 deadline for the completion of the collective sale. To salvage the deal, HPL and its partners asked the majority sellers to extend the deadline and either to appeal against the STB's decision or file a fresh application.

When the majority sellers did not respond, HPL and its partners decided to make good on their threat to sue.

The lawsuit

Through their lawyers, Allen & Gledhill, HPL and its partners filed an originating summons in the High Court last week - naming all 255 owners and the sales committee members who signed off on the collective sale as defendants.

It is believed that HPL feels the majority sellers may not have kept faith with them - especially when some sellers were not keen on having the en bloc sale succeed, when subsequent collective sales of neighbouring developments fetched much higher prices.

HPL and its partners are now demanding that the majority sellers 'do everything necessary' to obtain the collective sales order - including extending the sale completion deadline by four months to Dec 11, appealing against STB's decision and/or filing a fresh application for a new sales order, if needed.

Should the sellers fail to take one of these actions, HPL and its partners will sue for damages of between $800 million and $1 billion. This means each of the majority sellers could be liable for about $4 million.

The majority sellers have until Sept 11 to decide on what to do.

The minority owners are not being sued because they were not part of the collective agreement to sell Horizon Towers, but the majority's decision would impact whether they would have to move out of their homes.

What should Horizon owners do?

The sales committee of Horizon Towers told BT they have asked the High Court to appeal against STB's decision, but have not yet decided if they should give in to the other demands.

Some sellers have indicated their intention to contest the lawsuit, with one apartment owner saying the sellers intend to raise up to $5 million to engage lawyers to prepare their defence.

The majority is now collectively represented by Tan Rajah & Cheah, but individuals have begun seeking their own legal advice.

BT spoke to lawyers not involved in the Horizon Towers saga. While refraining from making a direct judgment on the case, the lawyers acknowledged that the majority sellers are obliged to 'do everything in their power' to file a proper sale application to the STB, given that they agreed to do so in the sale-and-purchase agreement.

Patrick Ee, director of law firm Legal21 LLC, told BT: 'It's an accepted position in law that parties to an agreement have to use their best endeavours to achieve the condition precedent in that agreement. In a previous en bloc deal I was involved in, we advised the sales committee to extend the sale completion deadline because that was what was needed to ensure that the sellers were 'doing everything in their power' to make a proper collective sale application to the STB.'

Mr Ee also pointed out that in the case of Horizon Towers, the STB had rejected the collective sale order application because of improper documentation. 'Speaking generally, technicalities which can be rectified should be dealt with,' he said.

Some majority sellers have also indicated their intention to name the lawyers and sales agents who advised them on the collective sale application as third parties to the claims made by HPL and its partners.

A corporate lawyer, who asked to remain unnamed, commented on such a course of action: 'Naming their advisers as third parties doesn't absolve the sellers of their contractual obligations to the buyers; it merely serves to indemnify them against some of the damages which HPL is looking to claim against them.'

Alvin Chang of M&A Law Corporation explains the position further: 'Bringing in the advisers as third parties doesn't mean the sellers can shift the blame completely on the advisers. It just means that, should HPL prove its case against the sellers and succeed in their claim for damages, the sellers can try to get their advisers to indemnify them for those damages caused as a result of the advisers' negligence or inadequate advice.

'But whether the sellers have a case would depend a lot on the scope of work their advisers were supposed to provide during the en bloc sale application.'

Nicholas Narayanan of law firm Nicholas & Co believes the focus should be on resolving the issue, rather than assigning blame. 'I feel it's premature at this juncture to point fingers at various parties as to who's to blame for the STB's decision, when a resolution for the whole matter is clearly in sight. The majority sellers can easily rectify the situation: they can extend the deadline and refile an application to save the sale,' Mr Narayanan said.

Foreign Funds, Individuals On Property Spree

Source : The Business Times, Fri, Aug 31, 2007

Almost $2b spent on buying condos this year
















(SINGAPORE) Institutional investors and foreign individuals have been bulk-buying 10 to 50 condominium units at a time here, with such deals expected to have hit almost $2 billion so far this year.

CB Richard Ellis (CBRE) Research says at least 16 deals worth a total of about $1.7 billion have been done in the first eight months.

And CBRE executive director (investment properties) Jeremy Lake believes 20-25 per cent more deals could also be going undetected.

The deals are usually registered as acquisitions by companies. More detailed data is held by the Inland Revenue Authority of Singapore but is not available to the public.

The Urban Redevelopment Authority releases quarterly figures on purchases by companies but these are only for sold, uncompleted private residential projects.

The figures nevertheless show that companies bought 279 units in the second quarter of this year - six times more than the 39 units in Q2 2006.

Societe Generale (SG) said in April that it had set up a property fund that had already raised $20 million that was quickly invested in 10-15 properties in prime districts.

These transactions were not captured by CBRE. And when contacted recently for more information, SG said that because the fund is a private one, it could not give details.

Other institutional investors said to have made bulk-buys recently are Kuwait Finance House and Goldman Sachs.

According to CBRE, only three deals were done in 2006. Citadel Equity Fund, for one, bought 25 units at One Tree Hill Residence.

The trend is not new. Mr Lake said Pramerica made bulk-buys at Avalon, Holland Hill and Duchess Crest in early 2002.

The current buoyancy in the property market is the major factor behind the resurgence of such deals.

As Mr Lake pointed out: 'You can participate in this market as a developer - as Lehman Brothers is doing through joint ventures with Chip Eng Seng. The other route is to buy units.'

The returns may be less, but Mr Lake said: 'There is also less risk compared to a development project.'

The investment in a development project is also much larger. 'Some of these investors are not looking to spend large amounts of money,' he said.

According to CBRE, most bulk-buying was by individual foreign investors. Their identities are not readily available, as they could have bought through companies. But Mr Lake believes these high net worth individuals are 'primarily driven by confidence in the market and personal interest in a particular project'.

Bulk purchases at Reflections @ Keppel Bay included one such private investor as well as a Middle Eastern fund, he said.

He reckons these buyers are looking for either rental returns or capital appreciation. 'In either case, they expect prices to increase.'

They may also want to diversify their portfolio and spread risks, he said.

But in light of the global credit crunch, investors everywhere will be re-evaluating risk.

And according to Mr Lake, it is 'unlikely' that the same number of investors - institutional or otherwise - would choose to park their money in real estate in the months ahead. 'They will be more selective now,' he said.

Why Have Evening ERP In The First Place?

Source : The Straits Times, Forum, Aug 31, 2007

BACK in 1998 when Electronic Road Pricing (ERP) was introduced to replace the Area Licensing Scheme, the reason given was that it was imperative that traffic in the Central Business District (CBD) be kept free flowing so as not to impair the conduct of business.

Then ERP was introduced for roads leading to the CBD. The public generally agreed that keeping traffic in the CBD free flowing requires the access roads to the CBD to be congestion free.

Rates were increased frequently in an attempt to improve the ever-deteriorating situation, especially on the CTE, but to not much avail.

The real problem was that there were too many cars and too little road space.

Again, the public acquiesced to the higher rates to support the efficient conduct of business.

Then ERP was introduced in the evening but it did not ease the traffic congestion. So now the authorities have decided to extend the ERP in the evening to a much later hour - 10.30pm. This may or may not solve the problem.

But traffic congestion in the evening is not the sore point. The sore point is having evening ERP in the first place. It runs contrary to the reason for introducing ERP - for better business efficiency. Going home from work and being caught in traffic is a pain that most people can tolerate, just like driving into town on Saturday and Sunday evenings. The ill effect is strictly personal and has nothing to do with the conduct of business.

The question that begs to be asked is why then are the authorities doing this? Have the authorities considered the ramifications?

With the extended evening ERP, motorists who do not want to pay are left with two choices - leave work early or get home much later. The former is not good for business. The latter will further adversely affect family life that is already poorer than in most other countries.

As a mother whose children are already working long hours, I urge the authorities not to cause them to return even later. The little time I spend with them in the evening is cherished by us.

Ivy Bragassam (Mrs)

Chevron House Sold For Record $2,780 Per Sq Ft

Source : The Straits Times, Fri, Aug 31, 2007

OFFICE prices in Singapore have reached a new record high with the sale of Chevron House in Raffles Place.

The 33-storey building fetched $730 million, or $2,780 per sq ft (psf) of net lettable area, developer CapitaLand said in a statement yesterday. The buyer is believed to be a foreign fund.

CapitaLand has a 50 per cent stake in the property. The rest is held by NTUC Income Insurance Co-operative and IP Property Fund Asia, which is managed by CapitaLand and ING Real Estate.

The price of Chevron House eclipses the last known record set for the sale of an office building - 1 Finlayson Green - which the Hong Leong Group sold in June for about $230 million, or $2,650 psf.

Another record, however, is already in the works.

Sources say that Hitachi Tower in Collyer Quay, also partly owned by CapitaLand, has received bids of $3,200 psf to $3,400 psf, and an official sale announcement is expected soon.

Chevron House's sale comes just a few days after CapitaLand paid $590.3 million for the remaining 50 per cent stake in Eureka Office Fund, which owns One George Street. This valued the development at $1.2 billion, or about $2,700 psf.

Property watchers said Chevron House's price is particularly stunning because it is on a 99-year lease that started in 1989, while 1 Finlayson Green is a freehold property.

Mr Donald Han, managing director of property consultancy Cushman & Wakefield, said, however, that the price for Chevron House 'seems fairly in line with market rents'.

Asking rentals for top-grade offices in Raffles Place are hovering at $15 psf to $18 psf per month, he said. This puts current yields for such offices at 'anything from 2.8 per cent to 3.5 per cent'.

Market sources said that based on Chevron House's sale price, the yield is about 3 per cent. Mr Han puts the yield of 1 Finlayson Green at about 2 per cent and that of One George Street at between 2.5 per cent and 2.8 per cent.

Prices and rentals of Singapore's offices have been soaring in recent months, due to a shortage in quality buildings and growing demand from occupiers and investors alike.

Indeed, The Straits Times understands that about half a dozen parties expressed interest in Chevron House via a private tender, and it was a close contest between the top two or three bids.

CapitaLand said it will book a gain of about $150.8 million from the sale of its stake in the building.

The developer bought Chevron House - then known as Caltex House - from tycoon Ong Beng Seng in 1999, along with Hitachi Tower which is behind it. CapitaLand paid just under $670 million for the two buildings.

Singapore Breaks Ground For Formula One Building

Source : AsiaOne News, Fri, Aug 31, 2007

SINGAPORE, Aug 31 (Reuters) - Singapore broke ground on Friday for a Formula One building that will host what is set to be the world's first street grand prix to be held at night.

The Southeast Asian city-state won a five-year deal in May to host a street grand prix in the heart of its business district with the first race scheduled for Sept. 28, 2008.

The planned building -- currently an undeveloped muddy field surrounded by trees and a highway -- would house 36 garages for 12 grand prix teams, the Singapore Tourism Board said.

Singapore, which wants to woo more tourists to the country to boost its services sector, is building a string of tourist attractions, including a casino and the world's largest Ferris wheel in its business district.

"We look forward to the sound of race engines roaring to life," Lim Hng Kiang, Singapore's trade minister said at the ground breaking ceremony, before sticking a gold-coloured shovel in a sand box to mark the occasion.

Lim said he was confident that Singapore could stage a night race as planned, although that was subjected to the approval of the FIA, the international governing body for motorsports.

Several F1 drivers have spoken against the idea of a night race, citing safety concerns such as poor visibility, especially during rainy weather.

Please Don't Use The F-Word

Source : AsiaOne News, Aug 31, 2007











We don't use the F-word," says Florian Bollen, the chairman of Singapore Flyer, a giant slowly-rotating observation wheel, which he says will be leagues apart from its old-fashioned little brother at the fairground.

At 165 metres (545 feet), or 42 storeys high, the Singapore Flyer will be the largest observation wheel in the world, said Bollen.

The project, still under construction, is tentatively expected to open in the city-state next March.

Bollen's Singapore-based company, Great Wheel Corp, is also building wheels in Beijing and Berlin which will edge out the Singapore Flyer as the world's biggest when they begin turning in about two years, he says.

"It's a completely different generation of wheels by comparison to the old-style Ferris wheel," Bollen told reporters on Thursday.

He says Britain's London Eye, which opened at the turn of the century and is 30 metres lower than Singapore's wheel, was the first of the new generation.

"It's a huge success story. It really has created something completely new, and that's why we thought building these wheels is a good thing," says the German, who came to his new venture from the financing of films.

Unlike cramped Ferris wheel carriages which hang in the open air, the Singapore Flyer and other large observation wheels feature fixed "capsules".

The Singapore Flyer's capsules -- about the size of a city bus -- are air conditioned and can carry up to 28 people. Passengers are free to walk around and will not feel movement or vibration, the company says.

"And when you're up on top of the wheel, you really have the feeling of being on top of the world," Bollen says.

"It's just a very slow, nice experience. It's all about the view."

The Singapore Flyer will be located on the Singapore waterfront across from the Marina Bay Sands casino complex set to open in 2009, and near the pit area of a Formula One Grand Prix street race to be held for the first time in 2008.

Lacking natural attractions, the wealthy nation has embarked on a major campaign to spruce up its tourist appeal.

For 29.50 Singapore dollars (19.37 US), passengers on the Singapore Flyer will get a 360-degree view of up to 45 kilometres across the island republic and into neighbouring Malaysia and Indonesia, the developers say.

Higher-priced tickets include food and drinks.

The project, worth about 240 million Singapore dollars, is a private venture backed mainly by German investors. But Bollen says it has received strong marketing and other support from the city-state's tourism board.

He declined to reveal the rent they are paying for the site. Bollen says his company was the only bidder for the project designed by Kisho Kurokawa Architects and Associates of Tokyo, along with Singapore's DP Architects.

The builders are Mitsubishi Corp and Takenaka Corp of Japan.

Each ride on the flyer will last about 37 minutes and while passengers wait for "takeoff", they can wander among two lower levels of shops, restaurants, and a tropical rainforest.

It is marketing itself as a venue for everything from business meetings to weddings.

The 28 capsules on the wheel will be able to move about 10 million people per year, Bollen adds.

About 40 percent of revenue is expected to come from corporate clients and another 30 percent from travel agents, says Patsy Ong, managing director of Adval Brand Group Pte Ltd, the marketing agents.

Bollen says his firm is in "very active discussions" with civic authorities in New Delhi and Mumbai about possible wheels there too.

Singapore "Fairly Confident" Of Holding F1 Race At Night, Pending Approval: Official

Source : AsiaOne News, Aug 31, 2007

SINGAPORE (AP) -- Singapore is confident its proposal to hold the first ever Formula One night grand prix will be approved by motorsport authorities, an official said Friday.

The city-state announced in May it was joining the Formula One circuit next year and would stage the first race on Sept. 28 - possibly at night - subject to approval by the FIA, world motorsport's governing body.

Minister of Trade and Industry Lim Hng Kiang said Singapore was making efforts to assure the FIA that holding the race at night in this skyscraper-filled metropolis would be safe.

"We're committed to doing whatever is necessary - the lighting levels, the road conditions - to make sure it is safe," Lim said. "The various tests and the various assessments have been going on track, so we're fairly confident."

F1 boss Bernie Ecclestone has said he wants several night races on the F1 calendar - especially in Asia - to make broadcast times more accessible to European and North American television viewers.

The proposal has met with mixed responses from teams and drivers, with safety concerns the main issue as F1 cars do not have headlights and reach speeds of more than 300 kilometers (185 miles) per hour.

The FIA is also expected to finalize Singapore's race route next month, Lim said. The 5.2-kilometer (3-mile) proposed circuit winds along streets lined with high-rise buildings and newly restored, British colonial-era mansions.

The pit complex, housing garages, the race control center and the winners' podium, is scheduled to be completed at the end of May.

The city-state has the rights to hold the race for five years - with the option for the Formula One Administration to extend for a further five years - and expects annual tourism receipts from the event of about 100 million Singapore dollars (US$65.9 million; euro48.72 million).

The race is part of Singapore's efforts to boost tourism revenues, along with the construction of two casino resorts expected to contribute S$2.7 billion (US$1.77 billion; €1.3 billion) to the economy.