Monday, December 31, 2007

Tallying The Cost Of Sub-Prime Debacle

Source : The Business Times, Dec 31, 2007

Projections of US$650b losses from the credit crunch tell only part of the story.

IN this season of stock taking, the picture past and future for financial markets is far from pretty. The reason? Sub-prime. If you didn’t know what sub-prime meant at the start of the year, it was hard to avoid its meaning by year end.

The big question now is what will the sub-prime crisis and ensuing credit crunch cost. In mid-July, Federal Reserve chairman Ben Bernanke told the Senate Banking Committee that estimates of losses associated with sub-prime-credit products were US$50 billion to US$100 billion. Those numbers ‘are far too low,’ Jan Hatzius, New York-based chief US economist at Goldman Sachs Group, said in a mid-November report.

Based ‘on historical default and loss patterns in different home-price environments,’ he estimates US losses will be roughly US$400 billion.

Assuming that US and European residential property prices fall 5 per cent to 10 per cent over the next year, investors in non-prime mortgages and securities linked to them - including banks, hedge funds, asset managers and mortgage insurers - stand to lose between US$350 billion and US$500 billion, according to London-based consultants Independent Strategy. Adding in expected losses from prime mortgages would lift the tally to more than US$650 billion.

Yet these loss projections tell only part of the story. The other portion relates to the impact of the losses on the willingness and ability of so-called leveraged investors, institutions that finance their activities with borrowed funds, to keep lending.

These include banks, broker-dealers, government- sponsored enterprises, savings institutions and hedge funds.

A September 2007 study by Tobias Adrian of the Federal Reserve Bank of New York and Hyun Song Shin of Princeton University, published by the New York Fed, found that leveraged investors, particularly banks and brokers, seek to maintain constant capital ratios. As such, when they lose money, they scale back lending to keep their capital ratios - assets divided by equity or risk-free capital, such as cash - from falling.

US commercial banks on average have capital ratios of 10 per cent, which means that for every US$1 of capital lost, they reduce lending by US$10. Thus, assuming that US$200 billion of the projected US$400 billion mortgage-credit loss is borne by leveraged institutions, the supply of credit will decline by US$2 trillion, Mr Hatzius said. ‘The likely mortgage-credit losses pose a significantly bigger macroeconomic risk than is generally recognised.’ Meanwhile, Independent Strategy figures that banks will have to shrink lending by 15 per cent to 20 per cent to return their capital ratios to pre-crisis levels, and hedge funds and brokers by US$18 to US$25 for every US$1 lost. ‘A 10 per cent reduction in global bank lending would damage corporate investment and consumer-spending growth, adding significantly to the risk of economic recession,’ the firm said in a Nov 15 report.

Apart from a decision to supply wads of money to relieve the logjam in global credit markets, the performance of central banks has been anything but sterling. They woke up late to the sub-prime mortgage mess, and some people still doubt that they fully grasp the risks involved - especially following the Federal Reserves’ decision to cut its federal funds rate by 25 basis points to 4.25 per cent on Dec 11, when the market was looking for more.

‘The timid move by the Fed was very disappointing and even appalling in the wake of intense financial-market turmoil,’ Chen Zhao, Montreal-based head of global strategy at BCA Research Ltd, wrote to clients on Dec 12. ‘The most troubling aspect of yesterday’s decision is that it reveals a lack of coherent strategy and focus at the Fed.’

The Fed also has been struggling to restore its credibility and retain its consumer-protection status in the face of congressional criticism that it was lax in overseeing mortgage lenders. Last week, the US central bank proposed various rules barring deceptive loan practices and making lenders responsible for determining whether borrowers can afford their mortgages.

Duh! Like the Fed never realised that some lenders might be unscrupulous, or that there were folks who couldn’t compute whether they could afford a mortgage. This from an institution whose New York district bank publishes comic books - that’s right, comic books - to explain topics such as how the banking system creates money and the meaning and purpose of monetary policy.

The situation in Europe isn’t much brighter. With banks balking at lending to one another out of fear of not being repaid - effectively turning the economy’s motor oil into sludge - Jean-Claude Trichet, head of the European Central Bank keeps talking about raising interest rates to battle inflationary pressures.

The massive injections of liquidity by the Fed, ECB and other major central banks have succeeded in lowering interbank lending rates - for now. But central bankers, especially Mr Trichet, continue to insist that these operations are separate from monetary-policy decisions. ‘Reduced stress in money markets will not deliver a cure for financial markets, which are absorbing the pain of substantial credit losses,’ wrote Bruce Kasman, chief economist at JPMorgan Chase & Co on Dec 21.

Now that we all know what sub-prime means, let’s hope it plays a less destructive role in 2008 and becomes a word we can afford to forget. If not, it may become a synonym for the next recession.

The writer is a Bloomberg News columnist. The opinions expressed are his own.

Slight Bump Ahead?

Source : The Straits Times, Dec 31, 2007
THE year past turned up roses in most key indicators: the GDP growth rate, job expansion, corporate profits as well as inward and offshore investment. And the headliner of the year? The long-absent property recovery arrived, to bring with it the most dramatic value appreciation seen in a decade. Adjusted for inflation, Singapore’s real estate is thought to have been the biggest gainer in the world. All of that rosiness showed in the reward premium loaded on personal incomes and the strong festive consumption, which should continue into the Chinese New Year period. We say ’should’ advisedly. Five weeks, the lead-in to the lunar celebrations on Feb 7, is a relatively short time in which to withstand buffeting when Western capital markets are still uncovering the true extent of mortgage-related horrors. What is so far known of the year ahead, for Singaporeans, is that growth forecasts are about two points off the projected final number of 8 per cent for 2007. Could they go lower?

It will depend on global behaviour in the wake of the American mortgage market collapse. The economic historian Niall Ferguson, author of The Cash Nexus, wrote in the Financial Times that the leading finance houses are coming under pressure to put the assets of other ‘novel organisms’ they have designed and invested in back on their balance sheets. He shares the view that the big banks will eventually lose some US$300 billion from sub-prime-related investments. The known writedowns, from Wall Street to Zurich, stand at about US$60 billion so far. Asian capital’s exposure is known to be limited; still less is that of Singapore banks, at least what has been acknowledged.

But capital turmoil and credit contraction in America, whose impact on Singapore is hard to predict with confidence, are coming together with inflationary pressures here which are showing little sign of easing. This is the big imponderable. Inflation, now at a 25-year high, will have to be Singaporeans’ watchword in 2008. The property sector is also cooling. If the slowing is sustained, it is both bad and good. Bad, as real estate’s multiplier effect on GDP growth is considerable; good from the standpoint of broader price stability. One saving grace which will cheer Singaporeans up is that the major Asian pacesetters - China and India certainly, but also South Korea, Japan and some Persian Gulf states - are largely spared the capital whiplash. These nations (and Singapore) are flush with funds with which to pump up growth, if need be. If inflation in China does not get out of hand, the northern region’s aggregate demand will see most of the continent through the worst of the credit and consumption crunch in the economies of the West.

Asia At Forefront Of New World Order As Power Balance Shifts

Source : The Straits Times, Dec 31, 2007

WHILE the year is going out in a blaze of headlines about the sub-prime crisis and its devastating impact on financial markets, 2007 will eventually be noted for other reasons, too.

Chief among them is the emergence of a new world order where Asia - especially China - has become a dominant economic force.

The events that brought this about are clear-cut: the huge initial public offerings in Shanghai and Hong Kong, as well as soaring trade and booming share markets for much of the year.

A far more important driving force, though, has emerged - due to the sub-prime crisis.

The devastation set in motion by the meltdown in the United States mortgage market has resulted in something that would have been deemed absurd even a year ago - proud Wall Street banks going cap in hand to Asian investors.

Anyone recalling the humiliations suffered by Asian nations during the 1997 financial crisis will recognise the irony of this.

Looking to region

IN RECENT months, Citigroup, Morgan Stanley, Merrill Lynch and UBS have all turned to Asia for much-needed funds to shore up their shaky capital bases after losing billions on sub-prime bets.

In their desperation for cash, some have even counted as a resounding coup their ability to sell slices of themselves at hefty price discounts to their July highs.

During this tumultuous period, Singapore grabbed headlines worldwide after the Government of Singapore Corporation (GIC) and Temasek Holdings both bagged sizeable stakes in global banks.

GIC has paid 11 billion Swiss francs (S$14 billion) for a 9 per cent stake in UBS, which runs one of the world's largest wealth management operations.

Temasek's US$4.4 billion (S$6.4 billion) buy into Merrill Lynch will allow it to make inroads into Wall Street and give it exposure to the world's largest brokerage firm, one whose network spans the globe.

These purchases formed part of a mega fund-raising drive by cash-strapped Western banks, which resulted in China Investment Corp taking a US$5 billion stake in Morgan Stanley and an Abu Dhabi fund injecting US$7.5 billion into Citigroup.

And this trend looks set to continue, as more troubled Western financial institutions head into the market to raise funds in the coming months.

It will pave the way for Asian sovereign wealth funds, with more than US$3 trillion at their command, to invest in prized Western assets at bargain prices.

As this new world order crystallises, with countries such as China and India continuing on their march towards becoming economic giants, it is worth reflecting on how unlikely this scenario would have seemed even a few years ago.

Few could have imagined that Wall Street titans would look to Asian sovereign wealth funds for help, just as few would have expected the entire region to rebound as it has from near-calamity.

Consider the run of successes this year.

New listings in Shanghai alone raised US$60 billion, while China oil major PetroChina overtook ExxonMobil as the most valuable company on the planet. Industrial and Commercial Bank of China became the world's largest bank by market value.

The year also marked an extraordinary period of outperformance for Asian stock markets.

Although there was a big sell-off in August, as sub-prime woes soured the appetites of investors, Asian markets soon experienced a new boom, sparked by a promise from China that it would allow mainland investors to buy shares directly overseas.

While renewed credit woes concerns have taken some of the shine off recently, regional stock indexes will still end sharply higher for the year.

Since January, China's Shanghai Composite Index has surged by 97 per cent, while Hong Kong's Hang Seng Index has risen by 37 per cent.

In Singapore, the benchmark Straits Times Index (STI) repeatedly smashed records, hitting an all-time intra-day high of 3,905 points on Oct 10. Although it has since fallen 12 per cent from its peak, the STI is still up 16 per cent for the year.

In contrast, the Dow Jones Industrial Average in the US is up only 8 per cent this year.

Heady role reversal

NOW go back a decade. Asia was then in the midst of a financial crisis that some described as the worst since the Great Depression in the 1930s.

As the crisis took hold, cities such as Jakarta were racked by riots, fuelled by plummeting wages and soaring unemployment.

Billionaires were reduced to paupers literally overnight after plunging local currencies forced many of them to default on their US dollar loans.

Against the backdrop of allegations that Wall Street financiers were bankrupting the region by orchestrating attacks on Asian currencies, banks and other prized assets were sold - often at bargain basement prices - during the restructuring that followed the initial havoc.

It was a time when cash-strapped Asian nations could not raise even a murmur of protest over the harsh terms imposed by the International Monetary Fund if they wanted to get the loans they so desperately needed to repair their battered economies.

Ten years on, Asian nations are no longer downtrodden supplicants forced to do whatever they are told.

Chastened by the humiliations suffered during the Asian financial crisis, many nations now sit on hefty cash hoards, buoyed by an economic boom brought about by soaring commodities prices and fast-accelerating consumer consumption on the domestic front.

So while sub-prime hogs the headlines, it is worth taking a step back to note that the region's stellar economic performance has triggered a shift in the balance of power.

That is the real story of this year.

Star Stockbrokers Buy Workers Dorm

Source : The Business Times, December 31, 2007

David Loh, Han Seng Juan pay $60m for Westlite in Jurong

Morgan Stanley is not the only one investing in foreign-workers dormitories in Singapore. David Loh and Han Seng Juan - two star stockbrokers at UOB Kay Hian, who in October surprised the market when they snapped up a 99-year condo site at Kovan - recently signed a deal to buy Westlite Dormitory near IMM Building in Jurong.

The $60 million they are paying for the dormitory in Toh Guan Road East works out to about $13,300 a bed based on the 4,500 beds at the facility, which is on a site with a remaining lease of about 50 years.

The acquisition is expected to be completed in early 2008.

'Yields are attractive and we have a diverse range of more than 100 tenants - companies in the shipbuilding, marine engineering, construction and engineering industries, minimising risks,' said Tony Bin, CEO of Duchess Development, the majority shareholder of Duchess Dormitory Pte Ltd, which is buying Westlite Dormitory from Westlite Development.

Duchess Development is owned by Mr Loh and Mr Han, who are dubbed the 'David and Han Team' in stockbroking circles.

Mr Bin said: 'Rental is paid by the companies who lease space for their foreign workers in the dormitory. The facility is now 100 per cent occupied, with leases signed on either one or two-year terms, which means there is upside.

' The outlook for the dormitory market is pretty strong for the next few years, with the large number of construction projects going on in Singapore and continued growth in the marine industry.'

Market watchers say that dormitory rents have shot up at least 30 per cent in the past 12 months and the trend is expected to continue into 2008 at least, given the shortage of such facilities.

Of course, dorm rents could cool if the authorities were to step up the supply of such accommodation, which industry observers reckon could be done relatively quickly.

Mr Bin would not say what returns Duchess Dormitory would make on its investment in Westlite Dormitory. But a market watcher, making back-of-the-envelope calculations, suggests that 'by the end of the next two years, when all the leases would have been renewed, the net yield would be in the low teens'.

BT reported recently that Morgan Stanley unit Avery Strategic Investments had invested $153 million in three dormitories it bought from JTC Corp. Morgan Stanley controls 97 per cent of Avery. The rest is held by local company Averic Capital Management, which is owned by Vernon Chua and Eric Tan, Singaporeans with local property experience. The three dorms - Kian Teck at Jurong), Woodlands and Tampines are on sites with remaining leases of about 20 to 30 years. The three facilities can house a total of more than 15,000 workers.

In October, Mr Han and Mr Loh made headlines when Duchess Development subsidiary Duke Development emerged as top bidder for a 99-year leasehold condo site next to Kovan MRT Station at a state tender. Their winning bid of $290.02 million reflected a unit land price of $436.55 per square foot per plot ratio.

Duke Development's other shareholders are construction group Lian Beng and a private equity fund managed by Centurion Investment Management, which is also controlled by Mr Han and Mr Loh.

The Kovan site is expected to be developed into a 17-storey condo with about 520 units and is slated for launch in mid-2008.

Koh Brothers Buys Out Brothers (Holdings) In Construction Venture

Source : The Business Times, December 31, 2007

KOH Brothers Group and Brothers (Holdings) are terminating their deal over joint venture Construction Consortium.

The companies said separately over the weekend that Construction Consortium would become a wholly owned subsidiary of Koh Brothers.

Brothers (Holdings) agreed last Friday to sell its 46.58 per cent stake in the venture to its partner for $18.97 million. It said that the proposed disposal would strengthen its overall financial position - about $99 million of securities (including performance bonds, corporate guarantees and indemnities) that it furnished in support of Construction Consortium's contractual and financial obligations with third parties will be assumed by Koh Brothers.

Construction Consortium undertakes building and civil engineering construction contracts for both public and private sectors and is also involved in the production of ready-mix concrete and cement as well as rental of concrete pumps.

Koh Brothers said that Construction Consortium accounted for 30.37 per cent of pre-tax profit for the year ended Dec 31, 2006.

As at Dec 15, 2007, the venture's construction order book stood at some $848.1 million for projects in Singapore, of which $312.8 million is still to be recognised.

Koh Brothers is bullish on the sector, citing Building & Construction Authority data that actual construction demand for the first 10 months of the year reached $18.5 billion and that it is likely to carry over into 2008 and 2009.

The latest deal follows a share swap between Koh siblings in January, under which Koh Brothers aims to focus on its construction and property business in Singapore.

Koh Brothers founder and chairman Koh Tiat Meng, and his wife, acquired 6.72 per cent of the company from Mr Koh's brother, Tiak Chye.

In return, they transferred 12.67 per cent of Brothers Holdings to him.

Mr Koh Tiak Chye also stepped down as chief executive officer and managing director of Koh Brothers and resigned as director in the company's subsidiaries and associate companies - except for those related to Construction Consortium.

This is so that he can focus on his commitments in Brothers (Holdings), particularly the company's real estate business in China.

Interest In Property Auctions Picking Up

Source : The Sunday Times, Dec 30, 2007

Record 810 sales closed this year as transparency of process, immediacy of deals attracts buyers

ONE of the more striking consequences of the booming real estate market has been the sharp increase in the amount of property - residential and commercial - going under the hammer.

Auctions, which used to be associated mainly with forced sales of repossessed properties, got the thumbs-up from owners this year.

A record 810 properties were auctioned this year - 210 more than last year - while the value of sales shot from $129.54 million to $264.7 million.

‘The rising market earlier this year actually encouraged more buyers to buy at auctions because it is a transparent process and a confirmed buy,’ said Ms Mok Sze Sze, the head of auctions at Jones Lang LaSalle.

While some buyers can be intimidated by auctions - where they face a room full of potential rivals - they can yield results.

Mr Teo Jing Kok, the Singapore Land Authority’s (SLA’s) deputy director of sales, said: ‘Unlike a tender, the auction process gives individuals who may not be familiar with the real estate market the time and opportunity to adjust their bids.

‘In a tender, an amateur will have only one chance to get his bid correct and it favours those who are more experienced, for example, land developers.’

The SLA held a first-of-its-kind auction of six small residential plots aimed at individuals keen on developing their own landed homes. All six were sold at the auction last month.

The bulk of auction sales this year - 45 per cent - were in the residential sector and included good-class bungalows. Private retail units made up 21 per cent while HDB shops accounted for 17 per cent of the total.

Shophouses, while forming only 5 per cent of auction sales, reflect one of the most significant trends in real estate this year - soaring office rents.

Because rents have escalated due to tight supply, some firms have opted to buy shophouses via an auction in a bid to avoid paying exorbitant rates in prime areas, said Knight Frank’s executive director (auctions), Ms Mary Sai.

A wider variety of homes was put up for auction this year, including penthouses and high-end condominiums such as The Berth by the Cove, Marina Bay Residences and Paterson Residence. However, many failed to sell, with buyers discouraged by the price levels, said Ms Sai.

Auctions can yield bargains for canny bidders. A three-bedroom walk-up apartment in Joo Chiat Place went for $490,000 earlier this month - about $40,000 above the opening bid - but around $10,000 or more less than what such properties usually fetch, said Ms Sai.

But a 2,465 sq ft unit at Watten Estate Condominium sold for $2.4 million in an April auction, compared with the $1.73 million price tag for a similar-sized unit in the estate late last year.

There were a few bidders who were probably betting on the estate’s en-bloc potential and thus drove prices up, added Ms Sai.

Owners taking the auction plunge typically pay a charge of 1 per cent as well as the 7 per cent goods and services tax. There is also an administrative fee that can range from $500 to $1,000 to cover advertisements, printing of the property’s particulars, auction room rental and other costs.

A key benefit owners enjoy from auctions is that ‘they get their money straightaway and there is no need for any negotiation, even on sale terms’, said Ms Sai. But if the real estate sector is quiet, buyers might be thin on the ground and bids may struggle to rise above the reserve.

The cooler market over the past two months has seen few sales done at auctions but more are expected next year, especially from the mass market segment, consultants said.

Those keen to buy at auctions should arrange for a viewing beforehand and ensure they can slap down an upfront payment of 10 per cent of the sale price if their bid succeeds.

The first auction of the new year will be on Jan 10 when Knight Frank will auction off residential properties and a strip of land behind a row of houses in Balestier.

Colliers International will hold one on Jan 16, followed by DTZ on Jan 17 and Jones Lang LaSalle on Jan 29.

Will Sale Of House Affect Tenancy Agreement?

Source : The Sunday Times, Dec 30, 2007

Q WE RENTED out our house in April last year. We signed a three-year tenancy agreement prepared by the tenant's agent.

As the property's price has gone up a bit, we wish to sell this house. A potential buyer is willing to offer a price but does not wish to take over the existing tenancy agreement as he intends to live there.

After going through the tenancy agreement, I realise that something is amiss.

In the terms and conditions under 'option to renew', it states that the tenant is entitled to a three- year renewal on the same terms and conditions if the tenant makes a written request not less than three months before the expiration of the tenancy and if there is at the time no 'existing breach or non-observance of any of the agreements and stipulations on the part of the tenant herein contained' and 'as long as the landlord remains unchanged'.

In another part of the terms and conditions, it says that 'in the event that the landlord decides to sell the premises, the landlord or his agent will be permitted to arrange viewing of the premises at a reasonable time of the day by prior appointment giving one day's notice. The landlord will have to sell with tenancy to the new purchaser'.

1. Can we break the lease? What is the penalty?

2. If the buyer takes over the tenant, does he have to sign a fresh tenancy agreement? What if he does not agree with the rental or terms and conditions?

A FIRST, the current period of the lease. You cannot break the lease unless there is a breach of any of the covenants. These covenants are usually spelt out in the Tenancy Agreement.

The most common covenant would be the duty for the tenant to pay rent. If he does not pay the rent on time or at all, it is a breach of the covenant which may entitle you to terminate the tenancy agreement. You will need to look closely at the provisions on whether you need to give notice to the tenant and to allow him a grace period to remedy the breach.

Second, the contractual obligation to renew the lease for a further three years at the same price provided (1) the tenant wishes to renew the lease and (2) he was not in breach of any of the covenants (that is, non-payment of rent) at the time he asks to renew the lease.

Insofar as this clause is concerned, it is a contractual term which you have agreed to and on which you cannot now renege.

A breach of the tenancy agreement is a breach of the contract. The loss payable to the tenant would be that which would put him in a position as if the tenancy had never been terminated.

This means that he is entitled to claim from you the additional rent he has to pay in order to get accommodation of the same or similar size and location. In other words, you would be liable to pay him for additional rent incurred for three years plus the remaining period of the current term.

To answer your second query, when a purchaser buys a property with tenancy, it means that he is agreeing to take over as the landlord from the last owner.

In other words, the tenancy will continue but merely with a new landlord. The terms cannot be changed.

In this case, a buyer needs to agree not only to buy the property, but also to the tenancy on the same terms as the current ones.

The clauses in this case are not usual and are not in the interests of the landlord.

Most tenancy agreements tend to be in the landlord's favour and would include for example, a clause to say that whenever the landlord sells the property, the tenancy is deemed to be at an end and that there will be no recourse to the landlord for any loss incurred.

The MarQ与卓锦豪庭Orchard Residences 料为2007楼王

《联合早报》Dec 29, 2007

今年7月,位于巴德申山(Paterson Hill)的The MarQ豪华共管公寓,有一间19楼的单位以3140万元成交,创下历来所有共管公寓交易金额的新高,荣登2007年新加坡“楼王”的宝座。

不过如果以每平方英尺计算,2007年的“楼王”则诞生于乌节弯“地王”的卓锦豪庭(Orchard Residences)。一间位于53层楼的顶层豪宅,在今年10月以每平方英尺5600元成交,刷新本地有史以来的最高住宅尺价。


2007年新加坡售价最高的十间共管公寓,SC全球的The MarQ占了七间。最“便宜”的一间,成交价也高达2460万元。




至于位于巴德申山顶端的The MarQ,距离乌节路只有5分钟车程。除了堆砌各种名牌家具外,它的主要卖点还包括,所有单位都占据一整层楼,而且拥有一个15公尺长的私人游泳池。每一单位的浴室也附有蒸气与淋浴室,单单主人卧室内的步入式衣橱(walk-in wardrobes)就有30平方英尺,即一般共管公寓的卧室那么大。

邱瑞荣说:“越来越多超级富豪到新加坡来买楼,也是推动新加坡豪宅价格攀上新高峰的原因之一。”一些曾在媒体曝光的名人房地产交易,包括国际巨星成龙买下的百年古迹建筑物——尼路一号、盛传由澳门赌王何鸿燊买下的滨海湾超级顶层豪宅、著名日本基金经理村上世彰买下的乌节路百乐轩(BLVD)顶层豪宅,以及印裔俄罗斯商人古普塔(Sudhir Gupta)的一连串房地产交易。






展望2008年,邱瑞荣相信The MarQ和卓锦豪庭的这两个“楼王”将被超越。



邱瑞荣昨天指出,明年将上市的超级豪华共管公寓,包括了SC全球的The Ardmore地段、杨忠礼(YTL)集团的良园(Westwood Apartments)地段、Hayden Properties的史各士路37号项目、郭氏家族控制的邦典集团(Pontiac)所拥有的彬珠阁(Pin Tjoe Court)地段。这些项目大多没有透露过发展详情,不过,从它们的超高土地价格和发展商的高档背景看来,应该有望角逐2008年代的“楼王”地位。



She Bought Her First House With Casino Tips

Source : The Sunday Times, Dec 30, 2007

From the age of 16, fitness firm CEO realised real estate was where the money was, and has stuck with it since

AT THE age of 30, Shanghai-born Annie Sun was already the owner of a string of properties in Melbourne, where she had been a student.

BORN IN SHANGHAI, EDUCATED IN MELBOURNE, the jetsetting Ms Sun still recalls the heady times she spent as a spa manager at the Crown Casino, where high rollers and big tips were the order of the day. -- ST PHOTO: AZIZ HUSSIN

Her belief that real estate investments offered good returns over time sprang from her observation as a student that many rich people had made their money from property.

The lesson stuck. Now, the chief executive (CEO) of fitness and wellness firm Dynaforce - which distributes high-end gym equipment - has 80 per cent of her investments in property.

In a recent interview with The Sunday Times, Ms Sun, 38, recalled how, even at 16, she had wanted to own property.

'Even then, I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties,' she said.

Armed with a degree in hospitality and health sciences, Ms Sun hobnobbed with international celebrities and high rollers during her stint at Melbourne's Crown Casino complex, where she managed the spa and fitness club. She worked in Hong Kong and Shanghai before coming to Singapore.

She never imagined that she would be a high-flying CEO herself one day, but the opportunity presented itself when there was a mass resignation at the Dynaforce Singapore office two years ago.

As a result of the 2006 crisis, the company's chairman promoted her and put her in charge. She had become a design and spa consultant at one of Dynaforce's units in 2004.

This year, the company generated a turnover of $15 million for the period to Oct 31. It manages 11 gyms in Singapore and has helped conceptualise the gyms in St Regis Residences and at various hotels including the Ritz-Carlton, Mandarin Oriental, Fullerton, Shangri-La and Hyatt.

Ms Sun, who is single, works out in the office gym three times a week and practises power yoga once a week.

Q What are your money habits?

A I save two-thirds of what I earn. Although I enjoy the finer things in life, I have learnt to moderate my needs these days, so I spend much less than when I was younger. I don't carry much cash around, maybe $300 at a time, so I rely on credit cards. Since I eat out most days, I think hotel cards are a great invention.

During my Crown Casino days, money came easily. The high rollers gave generous tips when they came to the spa. I quickly saved up enough money to buy my first house by the sea in Melbourne.

Those were heady days. There was no financial planning. It was almost a given that if I showed up for work, there would be big tips and money coming in.

Q What financial planning have you done?

A I'm not a risk taker. Currently, about 80 per cent of my investments are in property and the balance is in a stock portfolio managed out of Melbourne. It is invested mainly in the Australian stock market and includes telecoms shares. I seldom monitor it.

I know I need to be more proactive in my financial planning, but I have been too busy to think about it. My bankers have been hounding me and I think next year will be a good time to sit down with them to work out a better plan. That will be my New Year resolution.

Q What about insurance planning?

A I have an investment-linked plan with AMP back in Australia. I'm insured for about $1 million. Apart from that, I have medical and travel insurance. My annual premiums top A$5,000 (S$6,340).

Q What are your property investments?

A At present, I have four properties, three in Melbourne and one in Singapore. One of my Melbourne properties is being rented out. This is a one-bedroom apartment in the prestigious St Kilda residential area. I bought it for A$380,000 in the late 1990s, for tax planning purposes.

Q Moneywise, what were your growing-up years like?

A I was never short of money. I always got what I wanted as I was the only child. My father's family owned a textile factory in Shanghai. My mother came from a wealthy family. When money is handed to you easily, you don't see its value.

My perception of money changed when I was alone in Australia before my family migrated there. I learnt how to live independently and had to take financial responsibility for myself. I learnt to budget and worked as a part-time waitress.

The experience taught me to believe in hard work. It is through making my own money that I enjoy real financial freedom.

Q What has been a bad investment?

A At Crown Casino, I saved up so much money that I was itching to try something new. The entrepreneur in me kept trying to emerge. The opportunity came when a relative in Shanghai asked me to join him in setting up a wine bar and fusion restaurant along the Shanghai Bund.

It was 1999 and Shanghai was starting to boom big time, so I thought the timing was perfect. I packed my bags and sold my beach house in Melbourne and moved to Shanghai. I bought that two-storey beach house in 1994 for A$300,000 and sold it for almost A$800,000.

After six months of fighting red tape and being cheated by my main contractor, who was also a distant relative, I threw in the towel and returned to Melbourne - A$400,000 poorer but much wiser. I learnt not to trust people easily and to read the circumstances and the business environment much better.

Q Your best investment to date?

A My best investment came when I was invited to become a shareholder in Dynaforce. It is an investment that I can take active control of to produce results for my team and myself. I have a 30 per cent shareholding currently and there are plans to list Dynaforce at a later stage.

Another good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.

Q What retirement plans do you have?

A I want to retire within 10 years, with $50 million in hand, so I can do more charity work and learn other things that I did not have the time or the opportunity to do before. I would be interested in charities that involve children and might even set up one if I can't find a suitable one to contribute my resources to.

I plan to spend time in Melbourne, Singapore, Thailand, Bali and Shanghai.

Q And your home now is... ?

A I invested the profits from the sale of my apartment this year into a 1,400 sq ft, 99-year leasehold apartment, also around Mt Sophia. It cost $1 million.

Q And your car is... ?

A A dark-grey Porsche Boxster.

More value for money

'I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties.'

MS SUN, on how she decided back in her student days to build her fortune

High returns secured

'A good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.'

MS SUN, listing just one of the properties she has made big bucks on

Saturday, December 29, 2007

Money News

Source : The Straits Times, Dec 29, 2007

THE property sector waited 10 long years for a proper recovery. This year, new all-time highs were set in so many categories, so often, that people lost count.
The year saw the sale of the most expensive apartment in Orchard Residences (both in absolute cost and per square foot terms), the priciest collective sale (Westwood Apartments in Orchard Boulevard) and the most expensive HDB flat and coffee shop (in Marine Parade and Jurong respectively).

The early boom in luxury properties filtered down to suburban condos and HDB flats. Latest figures show that nearly every single HDB flat sold these days goes at a price above market valuation.

The exuberance of the first six months has given way to a more cautious outlook since the Government stepped in to calibrate the market’s rise.
The removal of the deferred payment scheme, introduction of guidelines on transparency of transacted prices and the release of more land have all served to take the froth off what the Global Property Monitor has termed the world’s hottest property market in 2007.

Market watchers are already tipping 2008 to be a great year for mid-to-low priced homes, but the euphoria that marked most of 2007 will be hard to replicate for many years to come.

AT THE start of this year, no one really understood, or cared to understand, the obscure ’sub-prime’ mortgage market.

Now, the chiefs of some of the world’s largest banks - Citigroup, Merrill Lynch and UBS - have lost their jobs because of it.
And banks have been forced to write down a staggering US$50 billion (S$72.6 billion) in losses, with experts estimating another US$200 billion to come.
Economists have been fretting for some time now over when and how the next global financial crisis will occur, and signs of the current implosion emerged in the summer of this year.

Sub-prime lenders had been loaning billions of dollars at low rates to home buyers with dodgy credit histories in the United States and elsewhere.
Banks then repackaged these mortgages with sounder loans into complex securities called collateralised debt obligations (CDOs), selling them to other investors in the financial markets.

As property prices stopped rising and promotional low rates expired, these loans turned sour and CDOs backed by them became worthless.
No one knows how deep the troubles go, and experts warn that the world is only seeing the start of a full-fledged financial crisis.

GLOBAL consultancy McKinsey recently hailed them as one of the world’s new ‘power brokers’.

And indeed, the world’s sovereign wealth funds (SWFs) - investment companies and funds owned by governments - have in recent weeks been flexing their financial muscle on Wall Street.

Abu Dhabi Investment Company bought 4.9 per cent of Citigroup for US$7.5 billion and the China Investment Corporation has spent US$8 billion on sizeable stakes in Morgan Stanley and Blackstone Group.

The Government of Singapore Investment Corporation bought up to 9 per cent of UBS for S$14 billion and Temasek Holdings has invested up to US$5 billion in Merrill Lynch.

With Asian governments steadily running surpluses and chalking up reserves, and oil money pouring into Middle Eastern states, some estimate the total size of SWFs will reach US$12-15 trillion by the next decade.
This sort of power is making policymakers in the developed world nervous, and there have been calls for the World Bank and the International Monetary Fund to develop a set of guidelines for the world’s SWFs.

The outcome will be closely watched, not least by Singapore, which is home to two of the world’s ‘Super Seven’ SWFs and has been a prime beneficiary of free and open investment rules thus far.


IN A year that ought to have seen rig builder SembCorp Marine celebrate record high oil prices, the company hit the headlines for all the wrong reasons.
It shocked the corporate sector in October when it revealed that finance director Wee Sing Guan - a 33-year veteran of the company and described as ‘quiet and unassuming’ - was responsible for losses of $439 million following a series of disastrous foreign exchange trades.

The scandal underlined the dangers of companies dabbling in currency trading in a year that saw the US dollar tumble to record lows against major currencies like the euro.

SembCorp Marine was not alone. A week after its announcement, shipbuilder Labroy Marine said it had racked up $209 million in forex losses and was bought by Dubai Drydocks World for US$1.63 billion.

Money Pouring In

Source : The Business Times, December 29, 2007

Everything seems to have come together well for the economy in 2007, says Money editor Ignatius Low as he looks back on S’pore’s robust economic growth, booming property and stock markets, and record low unemployment levels
FOR the majority of working people under the age of 40 - myself included - 2007 is a year that will be difficult to forget.

After all, most of us had joined the workforce in the years just prior to, or immediately following, the 1997 Asian financial crisis.
And the 10 years since 1997 have been one long series of economic busts and false starts.

Every time the economy seemed to pick up, something would happen to stop it in its tracks.

In 2000, it was the bust. In 2003, it was the severe acute respiratory syndrome.

As Singapore’s policy maestros worked to set a clear course for the economy through all these difficulties, the last 10 years were largely remembered for anaemic wage growth, asset deflation and painful restructuring.
That is why 2007 is special. It is the one year in recent memory that everything seemed to have come together so well.

For starters, the economy roared to life. And it has stayed strong despite earlier warnings that growth will slow in the second half of the year.
After clocking a blistering 8.9 per cent growth in the third quarter, the economy looks to end the year at around the 8 per cent mark, prompting The Economist magazine to recently proclaim Singapore an economic anomaly - a developed country growing at developing country rates.

Unemployment dropped to just 1.7 per cent, which really means full employment. And the tight labour market has sent salaries and bonuses skywards, especially in sectors such as finance and construction, which grew almost 20 per cent in the last quarter.

On the ground, many in my generation looked on in bewilderment as a flood of foreign liquidity sent property and stock prices up, up and up.
Braver opportunists rode the upward wave and were amply rewarded. A friend of mine flipped not one, but three apartments within a very heady six months and laughed all the way to the bank.

Indeed, property was all that anyone wanted to talk about in 2007.
The year had started with upscale condominium Marina Bay Residences setting a record price of $3,450 per square foot (psf) for its penthouse apartments - a ‘crazy’ By April, the record was already $4,000 psf.
By July, $4,000 psf had become ‘common’ after developers sold 72 units in various developments at that price.

Now, the record stands at $5,600 psf - the buyer having forked out more than $28 million for a 53rd-storey penthouse in Orchard Residences above the Orchard MRT station.

The boom has now filtered down to mass-market apartments. Areas as remote as Upper East Coast and Buona Vista are now fetching prices seen in central districts such as River Valley just a couple of years ago.
No wonder a new report by Global Property Monitor ranks Singapore the hottest property market in the world in 2007, after adjusting for inflation.
Record property prices also helped drive a stock market rally in the first half of the year that saw foreign funds pour into Asia, notably the surging Chinese markets.
Dealers and remisiers - as well as the computer system they traded on - could not quite keep up at times as the benchmark Straits Times Index (STI) broke new highs in heavy volume week after week.

For them, as well as others in Singapore, the blistering pace in 2007 often seemed a little too hot to handle.

Rising property prices fuelled a re-development craze in apartments and some 5,700 homes were sold in collective or ‘en bloc’ sales in the first half of the year alone.
In most years, sellers would have been happy to make a profit on their homes. In 2007, however, they found that prices on new, replacement homes had risen even faster than those they sold - forcing them to downgrade to smaller apartments or move to less prime areas.

The ‘en bloc’ removal of so many apartments from the housing market then helped to contribute to an islandwide shortage of homes that pushed rentals up breathtakingly quickly.

As rents effectively doubled for many apartments, expats downgraded to smaller apartments or moved to the suburbs. Moving companies and rental agents reported a banner year.

Fast-paced economic growth also meant rapidly expanding businesses. But with no new office space available in Raffles Place till 2010, there was just nowhere to grow.
A couple of years ago, rents in Grade A offices were stable at about $5 psf. Now, they are pushing levels as high as $15 psf, sparking fresh fears that they are ratcheting up the cost of doing business in Singapore.
Finally, economic theory dictates that higher growth, higher wages and higher rents will all inevitably find their way into higher consumer prices.
So in 2007, Singapore’s inflation numbers burst dramatically out of their typically sedate range of between 0 per cent and 1 per cent. Latest figures for last month show prices rising 4.2 per cent year-on- year, the highest rate of increase in 25 years.

And it looks like higher prices will be here to stay in 2008, with worldwide demand pushing oil prices close to $100US ($145S) a barrel this year and everything from wheat to rice trading at record-high levels.
What goes up must come down. If not, then something has got to give, so there is no doubt the giddy excesses of 2007 will come back to haunt us in 2008.
In Singapore, the stock market has already gone through a serious correction and those who invested in China companies, in particular, have been left licking their wounds.

Policymakers are already starting to battle the ill-effects of inflation on lower-income workers, whose wages will not rise in tandem with prices.

And the Government is also watching the property market closely, and acting to keep homes affordable for the majority of Singaporeans.
In the United States and other global financial markets, the days of cheap credit and easy liquidity have come to an abrupt halt with the sub-prime mortgage crisis. There will be plenty of losses yet to account for in the months ahead.
The year was a huge party 10 years in the making. There were great spectacles to marvel at from afar, but there was also plenty of buzz and excitement on the ground. And its broad-based appeal meant that nearly everyone had a good time.
The party is still on, but as the music starts to wind down as we enter the new year, signs of excess and fatigue are clearly showing.
Will it all come crashing down in 2008? It will take some care and skill to ensure that there will not be too many broken pieces to pick up the morning after.

Meet The Anti-En Bloc Sellers

Source : The Straits Times, Dec 29, 2007
WHEN Gillman Heights in Alexandra Road was sold in February, it was the biggest collective sale to date.

But it had taken a whole year for the estate to be sold, and home prices had risen so much in the meantime that some sellers (left) were no longer happy with the sale price.

When they took their case to the authorities, so many people turned up that a bigger room was needed and security guards were brought in for ‘crowd control’.
This year, 109 estates were sold en bloc - most in the first six months - netting more than $13 billion for homeowners.

Despite the opportunity to make tidy profits, many owners, like those at Gillman Heights, felt they did not receive enough proceeds.
The property boom had chased prices up, leaving most of the sellers with no choice but to move to smaller apartments or cheaper locations.
The effects of the en bloc frenzy early this year are still being felt.

The demolition of apartments has led to a shortage of housing in the city and caused rents to spike.

With the cash from collective sales in hand, thousands of displaced families are still house-hunting, driving up prices for suburban apartments and HDB flats.

URA To Launch Industrial Site At Playfair Rd

Source : The Business Times, December 29, 2007

THE Urban Redevelopment Authority (URA) yesterday said it will put up an industrial site at Playfair Road for public tender in about two weeks’ time after it received an application from a developer committed to bid at least $12 million for the site.

The price works out to about $52 per sq ft per plot ratio (psf ppr). But the site could fetch $80-90 psf ppr in the public tender, market watchers said. This works out to $18.6-20.9 million.

The 60-year leasehold site in the Paya Lebar area has a land area of 92,900 sq ft and a 2.5 plot ratio, giving it a maximum gross floor area of 232,200 sq ft. The site is zoned for ‘Business 1′ use and can be developed for a range of clean and light industrial uses and warehouses.

The site was made available for sale through the government’s reserve list system. Under this system, a site is only offered for public tender if the government receives an application from a developer who commits to bid for the site at a price deemed acceptable.

URA yesterday said it will launch the public tender for the site in about two weeks. The launch date will be announced later, it said. A tender period of about four weeks will be allowed for the site.

Demand for industrial space is expected to be strong going forward, analysts say. Rents and occupancy rates for industrial space are expected to continue growing in 2008.

酒店房价上涨 旅客逗留减短 圣诞假期旅游业没丰收

《联合早报》Dec 28, 2007











圣淘沙百富大酒店(The Sentosa Resort & Spa)招待的宾客主要来自欧美和俄罗斯。公关经理林秀钦说,佳节期间酒店房价比平时上涨20%,这两个月酒店房间客满。

费尔蒙新加坡(Fairmont Singapore)营销传播经理拿瓦诺受询时也透露,本月佳节期间,酒店住客率近100%。

瑞士史丹福酒店(Swissotel The Stamford)和新加坡乌节大酒店(Orchard Hotel)拥有不少本地客人。


亚历山大公寓地段 吸引六方进场争夺

《联合早报》Dec 28, 2007

尽管最近的新加坡市场情绪较为低沉,昨天招标截止的新加坡亚历山大路(Alexandra Road)共管公寓地段还是吸引了六方人马进场抢夺,竞争相当激烈。



昨天进场的发展商,包括永泰控股、与澳门赌王何鸿燊有关联的隆辉发展(Lafe Technology)、与香港富豪李嘉诚有有关联的Billion Rise、星狮地产、城市发展,以及马来西亚富商郭令灿所掌舵的国浩置业。





世邦魏理仕(CB Richard Ellis)研究部董事郑卫铭指出,目前,隔邻未完工的The Metro- politan共管公寓,转售价格大约是每平方英尺900元至1100元。至于对街的东陵景(Tanglin View)和东陵丽晶园(Tanglin Regency)二手单位,售价则介于每平方英尺850元至1100元。





永泰控股昨天的出手比上述投标底价,高出31%。如果跟2005年11月卖出的The Metro- politan地段比较,出手则高了83%。



至于隆辉发展的背景可以追溯到澳门赌王何鸿燊。根据商业注册局的资料,隆辉发展的唯一股东是本地上市公司——隆辉集团(Lafe Technology)。这家公司的业务主要是设计和生产电脑磁头以及其他数据储存器材,但昨天却意外现身房地产投标活动。



More Legislation Needed To Protect Condo Owners Who Do Not Wish To Join En-Bloc Sale

Source : The Straits Times, Dec 29, 2007

I HOPE there can be some preventive measures to protect owners of condominiums which have failed in an en-bloc sale, or those who have spent substantial funds on upgrading.

In my condo in Clementi Park, there is renewed dissent by residents against the forming of yet another committee to try again for another en-bloc sale. Owners recently banded together to form an anti-en-bloc group called Save Clementi Park and have launched a website to save the condo. The web site features many pictures of the condo.

The en-bloc sale attempt last year failed to receive even 50 per cent of the vote. Immediately after this failed attempt, one committee was disbanded, but another one was formed in November this year. This has unsettled many of the residents and such social upheaval is becoming all too common in Singapore.

As a resident of the condo, I am not in favour of an en-bloc sale. En-bloc processes, to say the very least, are disruptive. Moreover, our condo is in the process of upgrading at a cost of $2 million. An en-bloc attempt after a majority of us have voted to upgrade would be a sheer waste of owners' funds. Our upgrading will only complete around mid-2008.

There is no mechanism in place to deal with this. This is harmful to our societal psyche as stated by Mr Waleed Hanafi in his many website articles on en-bloc madness. Perhaps a time ban of, say, 15 years could be put in place for condos which have spent more than $500,000 for upgrading. Some balancing mechanism to reflect and honour decisions made by subsidiary proprietors should also be in place.

The en-bloc law needs to be reviewed.

Yeo Han Tiong

Owners Decide What Is Fair Compensation In En Bloc Sales

Source : The Straits Times, Dec 29, 2007

IN REPLY to Mr Alex Cheong's letter, 'En bloc sales: Find fairer way to compensate all' (ST, Dec 17) on the method of distributing sale proceeds to owners in a collective property sale, the Singapore Institute of Surveyors and Valuers (SISV) would like to clarify its guidelines on the various methods of distribution.

As guidelines, they are meant to assist owners in selecting the distribution method suitable for their development. The recommended methods (based on share value, strata area, valuation or a combination of them) have been used in many successful collective sale applications made to the Strata Titles Board. However, the institute appreciates that there could be specific situations, for example, due to some unique or peculiar aspect of the development where the strict application of the guidelines may be viewed by some to be unfair. This is why there can be no single prescribed method of distribution, and the majority owners will have to decide the best method that will be acceptable to all owners.

Mr Cheong suggested an 85 or 90 per cent strata floor area and 15 or 10 per cent share value as a fair method of distribution instead of the fixed 50 per cent for both. We would like to clarify that using 50 per cent area and 50 per cent share value is just a guide based on the various formulations used in past collective sales. Under the law, it is for the owners themselves to choose a method and proportion. In addition, anyone who is aggrieved with the proposed method of distribution may file an objection with the Strata Titles Board.

The issue of the method of distribution is now better addressed with the amendments to the Land Titles (Strata) Act, which came into operation on Oct 4. Under the amended legislation, the collective sale committee has to convene a general meeting for all owners to consider the method of distribution of the sale proceeds.

The Ministry of Law and SISV will continue to work together to further refine the guidelines where necessary.

Janet Han (Ms)
Singapore Institute of Surveyors and Valuers

Radha S. Khoo (Ms)
Head, Corporate Communications
Ministry of Law

Let's Hear It For A Year Of Property Records

Source : The Straits Times, Dec 29, 2007


It has been a spectacular year for the property market. The boom, after a long lull and slow recovery, was fast and furious as one mind-boggling record after another was set. JOYCE TEO recounts the record-busters CapitaLand pays $1.339b for Farrer Court

CAPITALAND made history in June when it announced it was paying $1.339 billion for the former HUDC estate Farrer Court in a collective sale. This remains the biggest lump sum ever shelled out for a residential site in Singapore.

The sale is also the largest collective one ever in terms of land area and the number of units. Farrer Court has 618 units. Owners of each unit will get about $2.15 million depending on the size of their flats. The development sits on 838,500 sq ft of land near the junction of Farrer and Holland roads.

The sale propelled relatively small- sized Credo Real Estate into the big league of property firms.

The sale may have been the biggest lump sum paid, but Westwood Apartments - which was sold by Savills Singapore late last month - took the record in terms of the price per sq ft (psf) of potential gross floor area, at $2,525.

In all, about $12.5 billion worth of collective sales was done, 50 per cent more than last year's $8.2 billion and far exceeding the $1.99 billion total in 2005.

This has made millionaires out of many. Some lucky owners got more than a few million dollars. Owners of the 24 units at The Ardmore, for instance, received about $11 million each. Owners of the two penthouses at Westwood will each get a whopping $17 million.

Horizon Towers hearing that went on and on

THE acrimonious $500 million Horizon Towers collective sale went through possibly the longest Strata Titles Board (STB) hearing ever before it was approved.

What was meant to be just another collective sale descended into a drawn-out, and at times dramatic, fight between the supporters and opponents of the sale, and the developers wanting to buy the plot.

The sale was thrown out by the STB over a technicality, making it one of the few applications ever rejected. It was then taken to the High Court, which granted the owners' appeal, paving the way for the STB to approve the sale.

The Horizon Towers case involved an array of top lawyers. Majority owners knew they faced an unprecedented lawsuit for breach of contract by the developer if the sale had ultimately failed.

A group of objecting minority owners spent millions fighting the sale. But the estate was eventually sold to Hotel Properties and its partners Morgan Stanley Real Estate and Qatar Investment Authority, a year after they had inked the deal.

Marine Parade unit sold for $750,888

THIS title, for mainstream flats, was claimed by a five-room unit on the 23rd floor in Marine Parade that offers an unblocked view of the sea. The 32-year-old flat in a prized 'point block' right across from the East Coast Park was sold for $750,888 last month.

That is significantly more than the median price of a five-room flat in Marine Parade - $560,000 in the third quarter, up from $485,000 in the second quarter.

Still, higher absolute prices have been paid for executive flats, which are bigger and not as common as five-room flats. One of these, a 156 sq m high floor unit in Mei Ling Street, sold for $780,000 but cost less than the Marine Parade flat on a psf basis.

Property agents say such high-priced flats need to have the 'X-factor' in terms of surrounding amenities, views and so on.

Also, buyers willing to pay such big amounts are not your typical HDB flat dwellers or buyers. They are cash-rich and include home hunters flush with the proceeds of a collective sale, as well as those who have just collected their pension payout.

Orchard Residences home went for over $5,600 psf

THIS slice of downtown luxury is a penthouse unit at The Orchard Residences, the 175-unit leasehold condominium that is being built above the Orchard MRT Station.

The 53rd floor, 5,048 sq ft unit went for $5,600 per sq ft in October, or slightly more than $28 million.

This year, condo prices crossed the $4,000 psf mark and surged past the $5,000 psf mark for the very first time.

In comparison, last year's price record - set in December by a unit in Marina Bay Residences - was only $3,450 psf.

It is not just units at The Orchard Residences that have scaled such stratospheric highs.

Other developments that have registered sales of above $4,000 psf include Hilltops, Ritz-Carlton Residences and Scotts Square.

Sentosa Cove, Nassim Road plots scale new highs

GOOD-CLASS bungalows have always been considered the creme de la creme of landed homes. That is, until the waterfront homes in Sentosa Cove came along.

Last month, two seafront bungalow plots in 99-year leasehold Sentosa Cove sold for a high of $1,696 psf.

Good-class bungalows, which need to be at least 15,070 sq ft in size and be located in gazetted areas have sold for up to about $1,300 psf.

However, even the heady heights of Sentosa Cove were topped in October when a bungalow that is smaller than a good-class bungalow in the posh precinct of Nassim Road was sold for a high of $1,899 psf, or $25.5 million in total.

Raffles Place rentals soar to $19.80 psf a month

ASKING rents at Republic Plaza in Raffles Place have reportedly hit a whopping $19.80 psf a month amid tight supply, up from just above $13 psf a year ago.

Cushman & Wakefield data showed that prime achievable office rents are now slightly above $16 psf a month on average, compared with around $8.50 psf per month a year ago.

Supply of office space was so tight that the Government came up with transitional sites to cater to demand. Sales of office units also rose.

Foreigners, PRs account for a quarter of total sales

FOREIGNERS and permanent residents went on a buying spree, sometimes scooping up nearly a whole residential project.

Knight Frank data showed that they chalked up 7,902 sales from January to November, which accounted for 24.9 per cent of total sales. These figures, said the firm's research and consultancy head Nicholas Mak, are the highest in 13 years, thanks to healthy regional economic conditions, an increase in the number of expatriates as well as other factors.

Thai tycoon Charoen Sirivadhanabhakdi, for instance, bought 47 out of 48 apartments at Hoi Hup's Suites @ Cairnhill for $205 million, or about $2,550 psf.

He also purchased four floors of apartments at The Orchard Residences for $135 million, or about $3,600 psf.

Institutional investors also entered the market in a big way, picking up anything from several units to whole condo blocks and even development sites. They include Macquarie Global Property Advisors, Goldman Sachs and United States-based Wachovia Development.

En Bloc Sales Result In Rewarding Year For Property Consultants

Source : The Straits Times, Dec 29, 2007

Mega deals move some smaller firms and new entrants into new league

THE collective sale euphoria this year has swept in windfalls not only for home sellers, but also for the companies that brokered the sales.

Most property consultancies in Singapore have logged their best-ever year for such deals, pocketing record sums in related fees.

The run of 'mega deals' has also catapulted smaller property firms into the same league as the big boys.

Credo Real Estate, for instance, shot to the top of the pack this year by landing the $1.34 billion sale of Farrer Court in Farrer Road.

The local firm, started in 2002, specialises in collective sales. Bigger players like DTZ Debenham Tie Leung and Knight Frank also handle areas such as investment sales and office leasing.

In all, Credo sold $2.17 billion worth of collective sale sites this year. That is 20 per cent more than the next best performer: DTZ with $1.8 billion.

But DTZ also turned in a record year, said Mr Shaun Poh, the consultancy's director of investments and auctions. 'In terms of fee income, it was a fantastic year for us, the best year so far.'

The consultancies all declined to reveal how much they had earned from collective sales this year, but Mr Poh helped shed some light.

For smaller projects that sell for less than $50 million, most firms charge 0.75 per cent to 1 per cent of the sale price, he said. Bigger projects worth at least $300 million bring in about 0.5 per cent.

Some firms impose extra charges if they find buyers willing to go well above the reserve price, Mr Poh added.

In third place was Savills Singapore, another relatively new entrant to this segment. It only 'really got into the business last year', said investment sales director Steven Ming. It more than doubled last year's sales with deals such as Tulip Gardens and Westwood Apartments.

Next came Knight Frank, which also had a 'record year', with 10 deals totalling $1.2 billion, said investment sales head Foo Suan Peng.

Heavyweight CB Richard Ellis, last year's number one, weighed in at fifth place with four deals, including the $625 million sale of Grangeford Apartments.

Knight Frank's Mr Foo said the collective sales market had never been so active. He noted: 'All kinds of records were broken: sale price per sq ft, sale price quantum, number of transactions, size of development.'

This stellar performance also prompted agencies 'not traditionally in this market' to try their luck, he added.

Newman & Goh, which started marketing collective sale sites only in October 2005, was able to gain a solid foothold. 'It was a great year,' said investment sales head Jeffrey Goh.

Even agencies better known for individual home sales, such as Dennis Wee Group and Ivy Lee Realty, jumped on the bandwagon.

Dennis Wee helped to sell Tampines Court for $405 million, while Ivy Lee brokered the $131.5 million sale of Hong Leong Gardens in the West Coast. Both deals were done in March.

But even in the midst of popping the champagne, the consultants agree next year's outlook is rather less rosy.

Continuing concerns over the United States sub-prime mortgage crisis might discourage buyers, while a new set of collective sale rules could obstruct the path for sellers.

A Secret Garden In Seletar

Source : The Business Times, December 29, 2007


The residents of Seletar Camp have recently been living with the knowledge that progress has finally caught up with their suburb

WITH its narrow country lanes, quaint English road names, simple single-storey colonial-era houses and verdant scenery with not a single high-rise in sight, Seletar Camp is the antithesis of modern Singapore - a leafy northern suburb caught in a time warp and a throwback to an age where the relaxed pace allows residents to sit back and enjoy the ordinary things in life.

Perspectives: Mr Gobinathan's house (above) as seen from up the tree in the garden.

For Singaporeans of a certain vintage, a drive through this former Royal Air Force base-turned-military camp will trigger fond childhood memories and lead to a greater understanding of why the residents who occupy over 200 houses in the estate are so passionate about protecting that way of life.

Many other properties are either empty as leases end or occupied by aerospace companies that service the adjoining Seletar Airport.

For the past year and a half, the residents of Seletar Camp - which was first built in the 1920s to house Royal Air Force personnel - have been living with the knowledge that progress has finally caught up with their part of the world, and just like the Dempsey Road and Portsdown Road camps before it, the rhythm of life as they know it will eventually be very different.

The government-owned area is due to be turned into an aerospace hub within the next several years - complete with F&B outlets, of course - and infrastructure work has already commenced, with the roads around Seletar heavy with daily lorry traffic.

The nine-hole public golf course in the estate has already been closed, its fairways slated to make way for a runway extension project.

Like a sleepy village

Residents like G Gobinathan represent the last pockets of resistance at Seletar Camp, where the residential community is akin to a sleepy village where everyone knows each other. Although he is relatively new to the estate - some residents have been there for two decades or more - he is vociferous in support of the lifestyle it represents.

Mr Gobinathan (left) likes Seletar Camp because it's quaint, friendly and green; and he is happy to live next to an airport because of his long-held fascination for flying

His tidy three-bedroom semi-detached house, complete with spacious back garden, is located on a small lane with the atypical name of Regent Street - Hay Market, Edgeware Road and yes, Oxford Street are all nearby - and the area resembles nothing so much as a quiet English suburb, with dogs in the yard and children playing in the street.

Mr Gobinathan, his wife Annie and three children - Anthony, 14; Harry, 11; and Geoffrey, 7 - moved here from his family home in Upper Thompson Road just over a year ago, and they couldn't be happier.

'I used to have cousins living around here and I always wanted to live here because it's rather quaint,' says Mr Gobinathan, a qualified accountant who spent 15 years working in Europe and who is now the chief operating officer of a Singapore-based company that manufactures shelving for supermarkets.

The patio (left) is complete with wooden beams and lamps

'Here, you can hear the birds singing. It's also a fact that my kids don't fall ill so frequently because there's so much nature and greenery around,' he says. 'The neighbours are very friendly and our front doors are always open - it's very village-like.'

Despite the proximity to the airport, the air traffic is minimal, he says, especially since the activity is restricted to small jets and single-engine private planes.

Vanishing scenery

'Within the next five years, massive change is going to happen here, with many houses slated to be demolished, while some will be converted to restaurants and bars and workshops for the aircraft industry,' says Mr Gobinathan. 'All this beautiful scenery is going to disappear - of course there will be landscaping of whatever is left, but the whole area will still be more industrialised.'

Not surprisingly, Mr Gobinathan and his fellow residents are not too happy about the impending changes.

A loose-knit residents' committee met government representatives about preserving the area - to no avail - earlier this year, and even non-residents were moved to support. A short documentary by Li Xiuqi, titled Seletar Airbase: Singapore's Secret Garden, also helped to publicise the plight of the people living there.

A detail shot of the patio. His tidy three-bedroom, semi-detached house is located on a small lane with the atypical name of Regent Street

At present, the rural atmosphere is akin to living in the countryside, notes Mr Gobinathan. 'Too much change is not good,' he feels. 'This place reminds us of the history of Singapore and gives people an opportunity for people to experience living with nature - modernising this place is not really necessary.'

This is the kind of neighbourhood where sitting on the patio and greeting people as they walk past is a daily ritual.

At one time, there were even no fences between houses. Residents include retired professionals, businessmen and expatriates keen for a reminder of the home country.

Mr Gobinathan, whose wife is from Ajaccio, a small town in Corsica, says there are hints of Europe in Seletar Camp.

'The place where she comes from is as quaint as this,' he points out. 'We both love the countryside and working in the garden.'

'Living here, there is a sense of security, even though all the doors are always open. There's a feeling of extended community, and my friends drop by unannounced for a drink because they look forward to coming here for a feel of nature and the environment. You just feel happy over here,' he says.

Mr Gobinathan's three sons enjoying their afternoon lazing around the garden with their three dogs. They are: (clockwise from top) Geoffrey, Harry and Anthony. According to Mr Gobinathan, there are hints of Europe in Seletar Camp

'It's rare that this kind of living is available to the average person - not many people can sit out on the patio and enjoy this kind of view,' he adds.

As a young boy, Mr Gobinathan had a fascination for flying, but his father refused to allow him to fly. 'Now, I tell my kids that at least daddy lives next to an airport,' he says.

The greenery, low-rise housing and being in a rural environment help to make Seletar Camp the ultimate countryside estate - a rare instance of true suburbia in Singapore. It's a place where living extends well beyond the walls of your house.

Mr Gobinathan waves an arm at the green expanse beyond his front gate. 'These old trees are the lungs of the earth - but they're all going to go.'

Latest US Data - Nov New Home Sales Plunge To 12-Year Low

Source : The Business Times, December 29, 2007

(WASHINGTON) Sales of new homes in the US plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector.

The Commerce Department yesterday reported that new home sales tumbled by 9 per cent in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000.

The sales pace for November was much weaker than economists were expecting. They were predicting sales in the weakest sector of the economy to drop by around 1.8 per cent, to a pace of 715,000.

The median sales price of a new home dipped to US$239,100 in November. That is 0.4 per cent lower than a year ago.

The median price is where half sell for more and half for less.

By region, sales fell in all parts of the US, except for the West, where they rose.

New home sales dropped by 19.3 per cent in the Northeast. They plunged by 27.6 per cent in the Midwest and they fell by 6.4 per cent in the South. However, sales increased by 4 per cent in the West.

Over the last 12 months, new home sales nationwide have tumbled by 34.4 per cent, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high-flying housing market.

That market has been suffering through a severe slump following five years of record-breaking activity from 2001 through 2005. Sales turned weak as did home prices. The boom-to-bust situation has increased dangers to the economy as a whole and has been especially hard on some homeowners.

Foreclosures have soared to record highs and probably will keep rising. A drop in home prices left some people stuck with balances on their home mortgages that eclipsed the worth of their home. Other home buyers were clobbered as low introductory rates on their mortgages jumped to much higher rates which they could not afford.

With credit now harder to get to finance a home purchase, the problems in housing have grown worse. Unsold homes have piled up.

The problems are expected to persist well into next year. -- AP

Owner Of Grand Mercure Roxy Hotel Seeks SGX Listing

Source : The Straits Times, Dec 29, 2007

PROPERTY and hotel group Roxy-Pacific Holdings, which owns the Grand Mercure Roxy Hotel in Marine Parade, is seeking a listing on the Singapore Exchange.

The 40-year-old developer lodged its preliminary prospectus yesterday, saying that the proposed mainboard listing would enhance its image in Singapore and allow it to expand its operations.

It plans to offer 160 million shares, comprising 152 million placement shares and eight million public shares, underwritten by Hong Leong Finance.

Nine million of the placement shares will be reserved for subscription and/or purchase by one of its executive directors, Mr Koh Seng Geok, as well as other people who have contributed to the company's growth.

Of the 160 million shares intended for the offering, 128 million are new shares.

Roxy-Pacific Holdings, formerly known as Soon Nam Company, built the 12-storey Maxwell House in Tanjong Pagar.

In recent years, it has been actively developing various projects in the east of Singapore, such as the Veranda in Telok Kurau and Martia Residence in Martia Road, as well as The TreeLine, The Nclave and St Patrick's Loft.

The cost of land for its recent and current projects ranges from $5 million to $25.5 million. The number of homes that can be built on each site ranges from 15 to 70.

The company plans to use about $15 million of its net proceeds from the invitation to expand its property development business, and another $10 million to improve Grand Mercure and maintain or upgrade its properties in Roxy Square Shopping Centre.

For the financial year ended December 2006, the company booked $48.8 million in revenue - a 58 per cent jump from the previous year - and its net profit attributable to shareholders grew by 150 per cent to hit $4.8 million.

Its basic earnings per share more than doubled to 1.02 cents in the same period, while its net asset value per share stood at 7.26 cents.

Property Group Roxy-Pacific Eyes Mainboard Listing

Source : The Business Times, December 29, 2007

Net proceeds from IPO expected to exceed $30m

HOME-GROWN property group Roxy-Pacific Holdings plans to raise capital through a listing on the Singapore Exchange mainboard.

The group lodged its preliminary prospectus with the Monetary Authority of Singapore yesterday, with plans for an initial public offering of 160 million shares, including 32 million vendor shares.

Roxy-Pacific was established in 1967. Besides being a residential property developer, it owns the Grand Mercure Roxy Hotel in Marine Parade and a number of shop units in Roxy Square Shopping Centre.

The issue price is not known yet but based on the prospectus, the net proceeds are expected to exceed $30 million, with about $15 million earmarked for expansion of its property development business.

It plans to develop smaller to medium-sized land plots for 'home buyers who are HDB-flat upgraders, and the middle to upper-middle income families'.

Another $10 million will go towards enhancing the Grand Mercure hotel, while $5 million will be used to repay bank loans.

Roxy-Pacific believes the outlook for the Singapore property market is positive. It said that, based on Urban Redevelopment Authority flash estimates, prices of private residential properties rose by 8.3 per cent in 3Q07 over the preceding quarter.

The hotel industry is also expected to continue booming, with the Singapore Tourism Board looking for $13.6 billion in tourism receipts this year and $30 billion by 2015.

The company recorded a net profit of $4.84 million for FY2006, up from $1.94 million for FY2005.

Its net asset value, as at Dec 31, 2006, was $252.7 million.

Hong Leong Finance is the issue manager for the IPO.

Friday, December 28, 2007

URA To Release Playfair Road Site For Tender

Source : Channel NewsAsia, 28 December 2007

The Urban Redevelopment Authority has said it will put the industrial site at Playfair Road up for tender in about two weeks.

This comes after a developer said it would bid a minimum of S$12 million for the site.

The 0.86 hectare site is located on the junction of Henderson, Burn, and Playfair Road.

It has a maximum permitted gross plot ratio of 2.5 with a lease period of 60 years.

The site is zoned for Business 1 development, and can be used for a range of clean and light industrial uses and warehouse.

The land parcel was made available for sale under the Reserve List of the Government Land Sales programme.

Sites under the Reserve List will only be placed out for tender if there is a minimum bid that is acceptable.


《联合早报》Dec 27, 2007




他透露,他交了一个月的租金和押金,一共640元,结果现在不仅拿不回钱,更没有房子住。) w4 M% N* J4


房东吝啬又挑剔 不给房客出客厅







《联合早报》Dec 27, 2007

前公寓管理代理(managing agent)疑亏空管理费和累积基金(sinking fund)后下落不明,她可能卷走高达20万元。


其中一所遭殃的公寓是实里基路一带的“亚迪斯台”(Adis Villas),居民月前收到公寓管理委员会寄出的后天召开常年大会通知,附上一份警方寄给公寓管委会主席的报告。这份日期为今年四月的报告,详细列出前管理代理被捕后将面对205项伪造和意图欺骗的控状。





另外三所同样遭遇的是苏菲雅山公寓(Mount Sophia Apartments)、苏菲雅大厦(Sophia Apartments)和柏利卡大厦(Pelikat Mansions)。据悉,前两所公寓被盗走约7万元。警方发言人受询时证实正在调查一名30余岁女子。

物业管理公司Knight Frank Estate Management董事经理梁明才告诉媒体,研究显示房地产管理的水平主要取决于两方面:管理费和累积基金,以及管理公司和屋主租户的期望。



城市发展CDL 不满百慕乐园Balmoral Park 房地产税上诉失败

《联合早报》Dec 28, 2007

由于不满需要为百慕乐园(Balmoral Park)5号的重新发展项目缴付更高的房地产税,新加坡城市发展(CDL)向高庭提出上诉,但还是以失败收场。

根据估价检讨委员会(Valuation Review Board)在2006年10月3日的裁决,城市发展必需针对百慕乐园5号的重新发展项目,偿还16万0400元的常年房地产税,而不是根据另一算法所定下的3万8000元而已。城市发展由于不服所判,向高庭提出上诉。高庭昨天裁决城市发展需偿还较高的房地产税。

城市发展是在1999年 11月,以4200万元买下当时在集体出售的百慕乐园5号两栋三层楼高(共12个单位)的私人住宅,并在2000年2月15日完成交易。在2001年2月份,城市发展为这个项目支付了674万元的发展费,以便将总容积率从1.036增加到1.6。


在2002年1月1日以前,首席估价师是假设这12个单位个别出租,所能收取到的租金,来制定这个项目的年值(Annual Value),然后再根据年值来决定项目的房地产税。

然而,首席估价师在2002年11月29日,通知城市发展,从2002年1月1日开始,该项目的年值将以土地的估计市场价值的5%来计算,因此,从 2002年1月1日至2005年12月31日这段期间,这个项目的年值应该是160万4000元,而发展商需要支付10%作为房地产税,因此需要支付16 万0400元的房地产税。















Fewer Properties On Auction This Year But Sales Value Up

Source : TODAY, Friday, December 28, 2007

Fewer properties were put up for sale by auction this year, but the value of sales rose to an eight-year record as high-end condominiums and apartments with en bloc potential dominated in a vibrant market.

Next year, the auction market is likely to “focus on those sectors that have yet to experience sharp price increases”, said Ms Grace Ng, deputy managing director and auctioneer for Colliers International, the real estate consultancy firm which collated the data.

According to Colliers, 1,456 properties were put up for auction this year compared to 2,018 last year, but actual sales numbered 204 (172 last year), worth $407.43 million ($317.75 million last year). Sales by owners also increased to 810, a 10-year record, worth $264.71 million - double last year’s $129.54 million.

The shophouse sector recorded an increase of 172 per cent to $78.06 million this year, from $28.75 million last year. Although demand largely centred on properties in or near the Central Business District, high-value flats in the HDB heartlands were also transacted at record prices.

Wing Tai Unit Makes Top Bid For Alexandra Plot

Source : TODAY, Friday, December 28, 2007

A unit of Wing Tai Holdings trumped five other bidders by submitting a top bid of $288.4 million for a 92,128-sq-ft 99-year leasehold residential site at Alexandra Road.

Wing Tai subsidiary Winglow Investment placed the bid together with United Engineers’ unit Greatearth Developments, the Urban Redevelopment Authority said yesterday.

The $288.4-million bid works out to about $639 per square foot (psf) per plot ratio, which translates into an estimated breakeven price of $1,000 psf for the condominium project to be built on the site, according to Mr Leonard Tay, director of CBRE Research.

Besides the site’s convenient location near the Redhill MRT station, there is also “a potentially strong demand from the occupiers of older private residential projects in the city fringe area”, said Mr Tay.

The site, which can be developed to a maximum height of 40 storeys, can yield between 350 and 400 apartments, said Mr Nicholas Mak, the director of consultancy and research at Knight Frank.

“The relatively high level of interest and the strong bids show that developers are still bullish on the Singapore property market in 2008,” he added.
URA will announce the bid winner at a later date.

Wrong Time To Raise Property Tax On HDB Flats

Source : The Straits Times, Dec 28, 2007

I REFER to the intention of the Inland Revenue Authority of Singapore (Iras) to increase the annual property tax on all HDB flats next year.

Iras says it has to do this as the last increase was in 2004, and a tax hike on private properties has already been implemented.

Families are struggling to cope with the recent increase in goods and services tax (GST), on top of ever-increasing prices in household expenditure and marketing.

Oil prices fluctuate and this has caused a chain reaction in prices of essential goods.

The monsoon season is upon us and this, again, will cause a drastic price increase in vegetables and seafood, not to mention the recent price increase in flour which has caused another chain reaction in prices of food.

In Singapore, once there is an increase in price, it will not come down and the retailers have all sorts of excuses not to bring it down.

If there is a body set up to oversee this, it should do more to curtail such increases in prices of goods and so convince people of its effectiveness.

In view of all this, is there a good reason and is this the right time to increase property tax? Flat dwellers have no choice but to comply.

People who live in HDB flats should speak out as the impact, although marginal, could impose hardship on them bearing in mind other daily household expenditure.

Iras should help people, especially families with no breadwinner at all who are still committed to meet daily and monthly household expenditure and their children's education.

Income tax grants need to be improved to eliminate hardship on families that find it difficult to make ends meet.

Some families suffer in silence.

Ridzwan Abdullah