Tuesday, July 24, 2007

Catching Up With The Joneses

Source: Weekend Today, 30 June 2007

The suburban residential market is finally catching up with the verve of the high-end luxury market, according to a report by real estate specialists CB Richard Ellis.

“The strong take-up recorded for suburban projects is in part due to the limited supply of new homes within the price range of $600psf and $800psf,” said Mr Joseph Tan, CB Richard Ellis’ executive director (residential). “Most new launches in the past 12 months have been high-end projects.”

While luxury projects continued to break price records for the second quarter of the year, three major projects in the suburban areas sold out within weeks of their launch.

The first batch of units at the 99-year leasehold, 556-unit Casa Merah near Tanah Merah MRT station averaged $590psf when it was launched in April. But these prices quickly rose to an average of $700psf, reflecting the demand for these units.

The 140 units at Northwood in Jalan Mata Ayer sold for an average price of $620psf while over at Woodleigh Close, Parc Mondrian’s 100 units averaged $680psf amid brisk sales.

Prices of mid-tier projects climbed as well, with The Seafront On Meyer and Wing Tai’s Riverine By The Park being offered to the primary market at prices between $1,400psf and $1,500psf.

Keppel Land’s Reflections at Keppel Bay set a new benchmark price for the Telok Blangah area with its launch price of $1,900psf.

Speculation on the property market has also resulted in a jump in the sub-sale market, with CB Richard Ellis expecting the sub-sale market to hit over 4,000 transactions by the end of the second quarter. This will be a slight increase over the 3,866 sales registered in the first quarter.

This hike, according to the property specialist, is because of the increase in the number of sub-sales of popular projects as well as a jump in collective sale numbers, resulting in an influx of buyers looking for replacement properties.

“Moving on to the third quarter, we expect the current positive sentiment to continue,” Mr Tan said.

“The take-up of new homes is likely to exceed 3,000 units while home prices may continue to head up by another 3 per cent to 5 per cent in the next quarter,” he added.

Awaiting this next batch of homebuyers in the next quarter will be developers with a variety of offerings to cater to these diverse tastes.

CB Richard Ellis expects Hilltops, Scotts Square and the 99-year leasehold condominium at the Marina Collection on Sentosa Cove to be launched for the high-end segment.

For the prime and mid-tier segment, there is the expected launch of the 99-year leasehold condominium project on Sinaran Drive and the developments on the sites of the former Dragon View Park and Eastern Mansion.

The suburban projects are also getting in on the act, with the possibility of the Versilia On Haig and the development on the former site of Westpeak in West Coast Walk being put on the market.

Several Launches Achieve Prices Close To Records

Source: The Straits Times, 03 July 2007

The roaring market shows no signs of easing, going by recent project launches.

New developments around the country have started to reach prices not seen since the property peak of 1996.

Units in Duchess Residences in Bukit Timah, for instance, have crossed the $2,000 per sq ft (psf) mark - the first time homes in the area have done so in almost a decade.

More than 80 per cent of the project’s 120 units have been sold since they were put up for sale last week, with all the smaller three- and four-bedroom units sold, said developer UOL Group.

Singaporeans were the main buyers but 20 per cent of the homes were sold to buyers from Hong Kong, Malaysia and Indonesia, said UOL, adding that many of them were from the finance industry.

Developer Wing Tai, meanwhile, has quietly sold all 50 units it has released in Helios Residences in Cairnhill.

The Straits Times understands that the units were priced at around $3,000 psf - also a benchmark for the area.

Prices for two-bedroom apartments are believed to start from $3.51 million.

Wing Tai said it would release the rest of the project’s 140 units soon, although it did not specify a date.

But the central areas are not the only ones doing well.

In the relatively quieter Kembangan, a 32-unit boutique project called D’Oasia had half its units sold for as much as $1,003 psf, said Savills Singapore, which is marketing the project at Lorong Melayu.

Despite prices in the area hovering around $700 psf or lower for several years, D’Oasia developer Monfort Land has managed to sell 15 units of the freehold project at an average of $950 psf.

And strata-bungalow development Dunsfold 18 has enjoyed a good take-up in Lorong Chuan.

Since mid-May, 10 of its 18 bungalows have been sold at prices ranging from $3.08 million to $3.56 million each, or an average price of $770 psf.

East Coast Site Up For Sale

Source: The Business Times, 03 July 2007

An eight-unit freehold residential site in East Coast has been put up for collective sale with an asking price of $20 million.

The price for the land at 16-22A Pulasan Road, measuring 21,334 square feet, works out to $548 per sq ft per plot ratio, and includes a development charge of $56,000, said marketing agent Newman & Goh yesterday.

‘Together with potential alienation of adjoining state lands totalling 6,826 sq ft, it can be built up to a gross floor area ceiling of 39,424 sq ft,’ said Newman.

The site can be redeveloped into about 36 units of boutique apartments averaging 1,100 sq ft per unit for an average price $1,050 psf, said Newman.

The sale has received full approval from the owners.

The tender closes on July 20 at 3pm

A Build Up To The Top: Property Investments Here Set For Record 2007

Source: Weekend Today, 23 Jun 2007

Investors have spent $21.4 billion on property for the first half of this year. And the momentum is set to continue, breaking the record $30.51 billion set last year, said real estate firm CB Richard Ellis.

These total investment sales figures for properties above $5 million are already 48 per cent higher than the value that was achieved for the same period last year.

At this halfway point, there is every reason to expect that investment sales for the whole of 2007 will surpass last year figures, and may hit $35 billion,?said Mr Jeremy Lake, executive director of investment properties, CB Richard Ellis.

For the first quarter of this year, investment sales reached $11.7 billion for land sales, en bloc sales and the purchase of strata-titled units.

The second quarter has recorded $9.67 billion to date, 16 per cent higher than the same period in 2006.

The private sector chalked up 86 per cent of the total figure, or $18.5 billion; with the public sector land sales chipping in the remaining $2.9 billion.

Some notable transactions include the $225 million Government sale of Tampines Grande to City Developments and the Carlton Group's purchase of a hotel site at Gopeng Street/Tanjong Pagar Road for $123 million.

Transactions for the residential sector in the first half of the year hit $14.6 billion, or 68 per cent of the total investment sales figure. This figure includes deals involving good class bungalows.

The first half of the year also saw 67 collective sales totalling $7.92 billion as developers rushed in to build up their land banks.

These include the record $835 million that GuocoLand paid for Leedon Heights, and SC Global's purchase of The Ardmore for $262 million ($2,338 per square foot per plot ratio).

The investment sales market will continue to perform well in the second half of 2007. In particular, sales from the public sector will contribute significantly, given the recent release of sites under the Government Land Sales Programme (GLS),?said Mr Lake.

Another $2 billion could be added to the figures in the coming quarter, with GLS tender sites at Beach Road and Marina Bay expected to attract both local and foreign investors

Private Home Prices Up 7.9% Across The Board

Source: The Straits Times, 03 July 2007

Private home prices have shot up across the board with everything from luxury condos to humble suburban homes reaping the benefits.

Figures out yesterday - still just estimates at this stage - for the April-June period show that private property is on a dramatic upswing with plenty of momentum.

Prices rose 7.9 per cent - the biggest jump since the third quarter in 1999, when the market staged a brief recovery before sliding into a lengthy slump.

The increase comes on top of a 4.8-per-cent rise in the first three months this year.

‘We are clearly in the middle of a property boom now and the growth is escalating,’ said Knight Frank head of research Nicholas Mak.

The central core region, scene of some eye-catching condo launches and collective sales, turned in another solid performance, according to the Urban Redevelopment Authority (URA) yesterday.

Prices of non-landed private homes in the core zone - it includes districts 9, 10, 11, downtown and Sentosa - rose 7.6 per cent in the second quarter, compared with a 5.5-per-cent rise in the first.

But for all this area’s golden glow, the figures that stood out were from areas outside the central core. Non-landed homes in the rest of the central region - this includes areas like Toa Payoh - saw prices leap 7.9 per cent, well up on the 3.7-per-cent increase in the first quarter.

Rises were even more impressive outside of central, where non-landed home prices surged 6.5 per cent in the second quarter, trumping the anaemic 2-per-cent effort in the first.

There was occasional panic buying as some feared they could miss bargains, said agents.

Yet despite the positive numbers, private home prices are still about 18.8 per cent below the 1996 peak.

The positive sentiment has also spilled over to HDB resales, where prices rose 2.85 per cent - again, the highest growth since the third quarter of 1999 - and up from a 1.25-per-cent rise in the first.

‘We’re seeing a broad-based recovery plus a tiny spurt from the HDB side,’ said Savills Singapore marketing director Ku Swee Yong. The climb in the high-end market, where prices have hit $5,100 psf, is likely to be sustained, he said.

Property experts are looking at a 20- to 25-per-cent rise for private homes for the whole year. They said the strong collective sales market - with about 30 to 40 more estates waiting to hit the market in the next year - will keep demand for suburban and HDB flats chugging along.

PropNex chief executive officer Mohamed Ismail expects HDB prices will clock up a 10-per-cent rise this year.

The URA statement yesterday also touched an issue vexing many - is the market overheating and should some cold water be thrown over it?

It said the Government would continue to monitor the market ‘very closely’ and ensure there is sufficient supply to meet demand.

Many residential sites have been released in Government land sales (GLS) programmes with more earmarked for next year if there is a need.

The URA said the good stock of private housing and more GLS sites in the pipeline means supply should keep up.

Or as Mr Mak puts it, there is no need to rush in.

Property Boom : Will It Last?

Source : The Business Times, 25 June 2007

Is the property boom for real or is it a bubble? What does this say about prospects for the overall economy?

STRONG economic fundamentals, regional stability and positive economic performance in Asia have provided the environment to support continual investor confidence in Singapore.

While increases in prime residential and office nominal values have been substantial over the past 12 months, there was little growth over the nine years before. The effects of inflation over this period should be taken into account. High-end residential prices (in real terms) have increased 4.5 per cent per annum since 1997. This growth seems moderate when compared to Singapore's 10-year average economic growth rate of 5.24 per cent and growth in prime residential properties in other global cities during the same period.

After removing annual inflation of 0.73 per cent, average prime office rent of $11.80 psf has only shown an annual real growth of 0.6 per cent over the same 10-year period. Singapore's prime office rent, we believe, is still competitive compared to other global cities such as London, Tokyo and Hong Kong.

The fundamentals in 2007 are different from 1997s. Asia has restructured, with Singapore emerging in a much stronger position than before. Its in-migration friendly policy and pro-business tax structure further coalesce to support the demand for Singapore properties. Barring unforeseen circumstances, the outlook for the property market remains positive.

- Christopher Fossick Managing Director - Singapore and South East Asia Jones Lang LaSalle

Looks like the real thing

SINGAPORE's economy is still slated to continue growing, year on year. With high-profile projects like Formula 1 and the integrated resorts leading the way, Singapore is gearing towards a level of global reach and relevance never before seen in its history. That is a development that is here to stay.

Because of the economic progression, the subsequent proliferation of property and its demand should be expected. The truth is, ever since its precipitous decline in 1996, the property market has not fully recovered until now. However, the reason why people are jittery is that property prices are recovering faster than most can adjust to.

Healthy moves like the release of land, as well as new developments in the pipeline, will hopefully help to cool the market. Demand needs to be eased so that the property market is steered into a more gradual, controllable and ideal growth. Then, we will see that the higher prices we are witnessing now are just one aspect of a promising economic future.

- Annie Yap CEO The GMP Group

THE property market is indeed flying.

Private residential property transactions with caveats lodged revealed higher transacted prices for districts 4, 9, 10, 11 and 15. These are the prime moving districts now, and I believe there is still a lot of room for prices to move up. Why? For every key event listed below, I expect an above-average movement of $100 per square foot in the districts mentioned to move alongside in the following years:

1. Year 2008 - First in the world! F1 night racing is coming to Singapore. The world will get invited to Singapore, interact with Singapore and invest in Singapore.

2. Year 2009 - First integrated resort to be completed with US$5 billion flowing into Singapore filled with the first wave of tourists which include participants in the Business Travel, Meetings, Incentives, Conventions and Exhibitions (BTMICE).

3. Year 2010 - Second integrated resort to be completed, with another US$5 billion flowing into Singapore filled with the second wave of tourists coming from destinations beyond the nine-hour flight radius of Singapore.

4. Year 2011 - General Election in Singapore: the government will introduce goodies to cultivate goodwill amongst voters to elect the next generation of leaders.

5. Year 2015 - Singapore celebrates her 50th birthday, which will fulfill our Prime Minister's vision for Singapore to become the jewel of the region.

If not now, then when? If not us, then who? Let's do our best to keep the property market flying high!

- Clemen Chiang CEO Freely Business School

I WISH I had a crystal ball to predict the property market. Not for gain or investment, but because I am caught in this boom just when I needed to consider a change in my residence. So I have been looking at it as a consumer.

Most of the conversations I have had these days is mainly about property prices, en-bloc deals, lack of units available and the what-if's. From meeting and chatting with various people, I gather most feel that there is still room for the per-square-foot price to move upwards. They give me the feeling that they are confident the economy is strong and sustainable.

The anticipation of the IRs does give the whole frenzy some kind of timeframe. The F1 buzz does give it an added layer of confidence. The ST Index keeps hitting record levels.

In my opinion, if no major disaster happens, I believe the property market and economic growth look likely to continue.

- Joey Chang CEO/Founder AXS Infocomm

THE property market will stay robust at least till 2012. The growth in the property market is thus backed by economic fundamentals of rising demand, income and jobs. If the overall economy continues to do well, the property market boom is likely to be sustained. Firstly, the Singapore economy has picked up and grows strongly. Our IR project further stimulates economic activities in the next few years. For the next five to 10 years, Asian economies will remain vibrant due to the Olympics 2008 in China, and the rise of Vietnam and India.

Most of the global investments will focus on the growth of the Asian economies. Singapore, being one of the financial centres and a politically stable country, will definitely reap the boom opportunity. Although the property boom reacted aggressively for the past one year, it has not reached the peak yet. I would think that the booming trend will still continue to be steadily up at least till 2012.

- Dora Hoan Group CEO Best World International Ltd

DRIVEN by excess liquidity, asset prices around the world have increased in value simultaneously since 2002. The property boom in Singapore started about a year ago, largely underpinned by the high-end segment, through the en-bloc sales fever. A property boomrequires cheap finance, excess savings in Asian economics, low long-term bond rates and an integrated international financial system. Money supply and credit must continue to grow at an accelerating rate in order to sustain the expansion.

There is no bubble ready to burst, as the boom is supported by a strong economy and political leadership, increased immigrants and foreign talents, perspectives of the IRs and a global city in the making, and a better working relationship with neighbouring countries.

- Tan Kok Leong Principal TKL Consulting

FOR those of us who saw the bubble deflated in the mid-90s, the thought of a bubble looms large on the horizon - and the speed at which prices have gone up seems to bolster this argument.

However this time around, besides the usual participants in the Singapore property market, there is participation from the Middle East, India and China which, together with good worldwide economic growth, excess liquidity and low interest rates, may make markets a bit more robust than before. There is also the IR factor plus the Formula 1 race coming into Singapore next year.

Of course the boom in the property sector brightens the prospects for the overall economy.

The downside will be that the increasing rents that will accompany the property boom will push up the cost of doing business in Singapore, and there may be some businesses in Singapore which may find the cost of doing business out of and in Singapore prohibitively expensive. This is a call that they have to take.

- Vijay Iyengar CEO Agrocorp International

THE current property boom is a natural phenomenon in the economic cycle in Singapore as capital inflows from overseas soak up the prime real estate.

The impending opening of two integrated resorts in Singapore is a key booster to the property boom. Coupled with the government announcement to bolster the population from current 4.5 million to 6.5 million by 2020, this has spurred the developers?confidence of stepped-up demand for housing and office space as well as the increase in MRT and expressway networks.

Barring any unforeseen circumstances, we are not expecting any bust in the property market in the next five years. If any, it would merely be a technical correction.

I am confident that by 2015, when we celebrate the golden jubilee of the independence of our republic, our global city state will be among the top cities in the world.

- Derek Goh Executive Chairman / Group CEO Serial System Ltd

IT's been said that growth in urbanisation, along with the emergence of real estate investment trusts (Reits), will be one of the defining characteristics of the property sector in Asia over the long term. And now, particularly with the imminence of the Bay area projects, Singapore's luxury property market has received yet another rejuvenating shot in the arm and will no doubt continue its bull run into the foreseeable future.

Like any staple industry, property and construction are subject to cyclical swings between peaks and ebbs, but as our economy fortifies itself from strength to strength and the peoples' spending power increases over the years, real estate developers can expect more high-end sales for a sustainable period of time, which readily reflects financial health and also brightens the general outlook.

- T Chandroo Chairman/CEO Modern Montessori International Group

THE soaring property prices are driven by high demand for land and office space due to the influx of foreign investors. Given such strong fundamentals, the current property boom is likely to be for real rather than a mere bubble.

Worth highlighting is the potentially adverse impact that this could have on local SMEs, including those which are providing value-added services to our community, such as childcare and eldercare. As such, the government should help ease the current skyrocketing property prices and in this respect, it is encouraging to note that more state land is being released.

- Sam Yap Executive Chairman Cherie Hearts Child Development Pte Ltd

THE property boom in Singapore is expected as the country will be a place of choice for many rich people in Asia. Multi-millionaires throughout Asia will love to have a residence here. The boom is real and not yet a bubble. The boom is not due to local needs but more from buyers abroad. Properties in the UK shot up for the similar reasons. Many rich English-speaking people throughout the world love to live in the UK too.

The prices may appear to be high in Singapore, but they are not that high compared to prices of properties in London, New York and Hong Kong. The property boom will help to generate the growth of the Singapore economy. It will not affect locals who will enjoy the help of the government in building homes for them at reasonable prices.

- Ng Kong Yeam Group Executive Chairman Sino-America Tours Corporation Pte Ltd

WHETHER the property market can be sustained depends largely on the purchasing power of buyers and on government intentions.

Of late, money flowing in from oil-producing Middle Eastern countries and noveau riche Chinese has made credit cheaper. Singapore is seen as a safe haven to park their money, and buying into properties in an improving economy is one way to preserve capital.

I see the market having some legs and will be strong in the short term; thereafter if the market goes up too high, the government may step in to cool the market. High property prices affect the population's ability to produce more babies.

- Tan Ser Giam Chairman Eastern Navigation Pte Ltd

THE Singapore economy has been recovering for the last couple of years since the Sars outbreak in 2003 put a severe dent on the economy. On the other hand, the Singapore property market started recovering only in the last year or so. As such, I tend to believe that the Singapore economy has built a strong economic base to justify the current property boom. At the same time, the next few years will see huge investments in IRs, etc, and the re-inventing of the Singapore economic model.

The government has already upped the target population to 6.5 million. All this means that there will be more people - more expatriates, more immigrants and more high-net-worth individuals - coming to this island in the next few years. Of course, in any type of asset inflation, speculation cannot be avoided, and this is likely to form a part of any property boom. However, more importantly, there are likely to be many more genuine investors and home buyers who will be attracted to invest and to live in Singapore, and to be part of the new Singapore economic story.

- Wee Piew CEO HG Metal Ltd

Need for caution

IF PRICES skyrocket too rapidly, or if we fail to balance the variables contributing to the economy, the property boom could potentially be a bubble.

Singapore's property market is artificially buoyed by foreign investors from countries such as Indonesia and Thailand leveraging Singapore's stable and growing economy. The last time the property bubble burst was due to the financial crisis, which removed this foreign investor support. This time round, we are not expected to experience the same monetary meltdown to threaten the boom.

However, what we are seeing is an unrealistic expectation from sellers that their properties will keep achieving the stellar heights that everyone is talking about. With respect, perhaps an element of Kiasu-ism?is clouding expectations. This causes an inconsistency in the market and is generally not positive. Growth is a positive attribute to any economy and it is much better for it to be based on fundamental economics.

When the different variables in an economy do not match up, a boom could well become a bust. We are already seeing rising rent rates, against a disproportionate rise in wages, becoming a deterrent to overseas working professionals. I trust the boom we are experiencing will plateau off and we will return to a steady positive growth period instead.

- Charles Reed CEO interTouch

ECONOMIC and infrastructure fundamentals support the Singapore story, and with it the long-term real estate market as a solid asset class for investors. Current speculation, however, is at a runaway pace. While I do not necessarily believe that a crash is looming, it will be inevitable that international companies will take a closer and more critical look when assessing the costs of operating in Singapore.

If unchecked for long, it may drive certain firms away, to the detriment of Singapore. International professionals may also be unwilling to pay inflated rentals, nor do they wish to move every two years due to exorbitant rental increases - and all this because of speculators, many of whom do not even live here? Is that what Singapore wants?

- John Jessen Co-Founder and Managing Director Smith & Jessen

IT's a bubble. While Singapore's economy is sound, recent real estate price increases have more than closed any valuation gap and brought prices more than in line with their fair market value that is reflective of supply and demand.

Why is it a bubble?

1) too many success stories of people flipping property within less than a year,

2) too many people buying without having seen the property? and

3) still supported by low interest rates - people are in search of alternatives.

Points 1) and 2) are pure signs of speculation and who doesn't know about the deep Chinese culture of always hunting for a deal? It works as long as more people join in - but once the first stumbles the whole house of cards will come down. I am waiting for that day - and then might buy. But for ownership, not for speculation.

- Berthold Trenkel Chief Operating Officer, Asia Pacific Carlson Wagonlit Travel

THE lethal combination of the record-breaking rise of the stock market and the ongoing en-bloc fever will continue to drive property prices northwards. This strong push in property prices is indeed a direct reflection of the stellar performance of the stock exchange and the buoyant economy. However, as with all bull runs, what goes up must come down. With more projects scheduled for completion in 2009, there is bound to be a slight correction. The slight correction will however not be a sharp drop as observed in the interim years following 2001.

I am concerned about the effect of having mainly foreign funds that are driving this steep surge in property prices. While we are all in awe of the latest blockbuster transaction pricing reported daily in the papers, we must not forget that the majority of Singaporeans still stay in government housing and this will not have much effect on them. En-bloc fever is also slowly destroying close-knit communities when most of the affected residents are forced to stay in another part of the island, as they will not be able to afford a similar place in the same area any more.

- Benjamin Low Managing Director, Southeast Asia & India Secure Computing

THE prices of property have been shooting up so fast that many ordinary middle-class Singaporeans thinking of upgrading or buying a new home are now priced out of their dream home. Developers of new property projects have found good demand from foreigners and high-net-worth Singaporeans. This all bodes very well for the developers, the contractors, the furniture and furnishing suppliers, and the economy. The upside is that the economy is growing, people are optimistic, and everyone gets a share of the pie.

The downside is that people who are not savvy property players get drawn into this feeding frenzy and may get burnt. This property boom is really a bubble created by savvy developers and people with deep pockets. Having seen the boom and bust of the property cycles in the past, I would advise people who think they can get a slice of this action to be extremely careful and to keep their ears close to the market.

- Fong Loo Fern Managing Director CYC The Custom Shop Pte Ltd

THE current property boom is a testament to the strength and resilience of the Singapore economy having recovered dramatically from the previous downturn. However, unless you're a property developer or a landlord, the boom can have an adverse effect on most businesses, due to rental being a major constituent of operational costs. From services companies to retail and manufacturing, the property boom is increasing the cost of doing business in Singapore, and if left unchecked can hamper the competitiveness vis-a-vis our neighbours in the region.

Across the board, the rise in rents will most likely trickle down to be passed on to consumers. Consumer spending may be hit too as consumers scale back on big-ticket purchases or defer purchases. Ultimately, if left unchecked, inflation may creep in and become a dampener on the overall economy. Hence, the recent move by the government to closely monitor the price movements in the property sector for any possible signs of overheating is applauded.

- J Anton Ravindran Group CEO & Co-Founder Genovate Solutions

THE property market has always been cyclical. Having said that, what is important is not to get swayed away, but rather to remain prudent and invest sensibly.

Globally, Singapore has been ranked as the 14th most expensive city to live in. While this is a strong indication of a positive and booming economy, it also implies that with the rising cost of living, Singapore may eventually lose its attractiveness as a city to work and live in.

- Lars Ronning President, North & South East Asia, India, Australia & New Zealand Tandberg

SINGAPOREANS will have to brace themselves to live with an appreciation in property prices for at least another six months to a year, and for those affected by en-bloc sales, to determine how to get the best out of this trend for another acceptable roof over their heads, moving forward.

While the flurry of property transactions will fuel the already booming economy, my concern is the economy becoming overheated, driving up the costs of living and making it untenable for the ordinary man in the street. At the same time, there is the burgeoning prospect of our economy becoming uncompetitive, with all the concomitant negative effects of investments going elsewhere and ensuing unemployment.

The government can try to regulate the property market to prevent this, but I feel the government can strengthen its approach by enforcing stricter regulations in a timely manner against rampant speculation. However, its hand is weak in relation to high-end luxurious properties, whose demand is price-inelastic, and so long as there are people willing to pay, this will continue to artificially fuel the steady increase in prices.

- Lim Soon Hock Managing Director Plan-B Icag Pte Ltd

MY CONCERN, if I were in the Singapore property market, would be understanding what is driving this boom. There seems to be a lack of fundamental economic criteria that can explain it. My second concern would be the size of the Singapore market - it is not big enough to sustain this growth. Having said that, I wish I had invested early on in the boom so that I would have had time to make some money!

- Ross Wilson Managing Director, Consumer Products and Services, Apac Region Trend Micro (Singapore) Pte Ltd

Chip Eng Seng Condo Projects: 1 Fully Sold, 3 Launches Soon

Sources : The Business Times, May 03, 2007

LISTED construction and property group group Chip Eng Seng said yesterday that its freehold Ventuno Balmoral is fully sold and it plans to launch three more condominium projects in the next few months.

The 35-unit Ventuno Balmoral, in Balmoral Road, was launched in March this year and sold at an average of $1,300 per sq ft. Chip Eng Seng now plans to launch one project each in Peck Hay and Grange road and the West Coast. All three sites, secured through collective sales, are being jointly developed with other parties. The Peck Hay and Grange road projects will be luxury condominiums.

At Peck Hay Road, Chip Eng Seng and partner Lehman Brothers Real Estate II plan to build 70 units on what is now Venus Mansion. At Grange Road, Chip Eng Seng’s partner is the Citadel Equity Fund, part of the Chicago-based Citadel Investment group. The partners paid $180 million or $1,207 per square foot of potential gross floor area for Grange Tower, which is being redeveloped into a 68-unit luxury development.

The third proposed development is a 668-unit freehold condominium at West Coast Walk/Road, on the site of the present Westpeak Condominium. Chip Eng Seng is teaming up with a Lehman Brothers unit for this project.

Chip Eng Seng said yesterday that Ventuno Balmoral and the three future projects should contribute positively for the current financial year ending Dec 31, 2007.

Lincoln Lodge Sale Sets Top Land Price For Newton Area

Sources : The Straits Times, June 22, 2007

Consortium pays record $1,449 per sq ft per plot ratio for the estate

JOINT EFFORT: The group - comprising Koh Brothers, Heeton, KSH and Lian Beng - is paying $243 million for the site near Goldhill Plaza. — PHOTO: NEWMAN & GOH

A GROUP of four property and construction firms has paid a benchmark price for a site in Newton, betting that home prices in the area will surge over the next two years.

The consortium of Koh Brothers Group, Heeton Holdings, KSH Holdings and Lian Beng Holdings forked out $243 million for Lincoln Lodge off Newton Road.

Owners at the 98-unit estate will each get between $1.89 million and $3.07 million.

The consortium’s price works out to $1,449 per sq ft per plot ratio (psf ppr) for the 59,984 sq ft site - a record land price for the Newton area, said Newman & Goh, which marketed the estate.

The previous record was held by Gilstead View, which was sold for $1,070 psf ppr last month.

Newman & Goh’s head of investment sales, Mr Jeffrey Goh, believes that a new development on the Lincoln Lodge site could fetch $2,500 psf.

This bullish projection is ‘riding on the announcement of SC Global’s The Marq, which is targeted to fetch $4,000 psf’, he said.

SC Global said on Tuesday that its latest project at Paterson Hill in the prime Orchard Road area will be sold at average prices of $4,000 psf.

But although Newton homes are still considerably cheaper than those in Orchard, Mr Goh is confident that their prices are set to soar.

‘Already, we have heard that some upcoming launches in the Newton area will be priced above $2,000 psf,’ he told The Straits Times.

‘Going forward, 18 months down the road, it shouldn’t be a problem for a new project on the Lincoln Lodge site to fetch $2,500 psf, and maybe even up to $2,700 psf.’

The record for homes in the Newton area is believed to be held by Scotts HighPark. The project, at Scotts Road next to Newton MRT Station, has fetched slightly more than $2,000 psf for a handful of units.

But closer to Lincoln Lodge, which is on Khiang Guan Avenue near Goldhill Plaza, most newer condominiums sell for only between $1,100 psf and $1,450 psf.

Units at the neighbouring Newton Suites, for instance, have changed hands for an average of $1,300 psf in the past two months. Nearby, Park Infinia at Wee Nam is selling for $1,200 psf and above.

Lincoln Lodge’s break-even price is expected to be about $2,000 psf ppr, said Mr Goh.

A 36-storey project with 120 apartments of 1,600 sq ft each can be built on the site, said Koh Brothers yesterday.

The shares of all four partners, which own equal stakes in the project, rose yesterday.

Koh Brothers was up 1.5 cents at 55.5 cents; Heeton Holdings advanced 0.5 cent to 98.5 cents; KSH Holdings added four cents to 87 cents; and Lian Beng increased 2.5 cents to 44 cents.

Time To Ease Curbs On Foreign Buying Of Landed Homes

Sources : The Straits Times, June 27, 2007

SINGAPORE’S increasing popularity with foreigners could signal that it is time to relax restrictions on overseas ownership of landed properties, according to a Goldman Sachs report.

The giant investment bank said in a research note that if curbs are relaxed across the board, it could spur further foreign buying of private properties.

It could also boost the residential property market by having ‘positive spillover from rising landed property prices to condominiums and apartments’.

The United States bank said the average price of a top-end bungalow is 35 per cent lower than that of a comparable condominium, which sells for about $26.3 million.

‘We think this price gap can narrow to parity or very close to it should the restrictions on foreign ownership of landed properties be relaxed,’ it said.

Under the Residential Property Act, foreigners and permanent residents are forbidden from buying landed property without government approval.

And a foreigner who does win approval can own only one landed property at a time and they must occupy the home, not rent it out.

If the rules are relaxed, developers with land banks for landed projects would benefit, the bank said.

Meanwhile, all residential developers could also ‘gain from even greater foreign buying interest given the positive message such a move would send’.

A land bank is a stock of land with planning permission already granted but where development has yet to occur.

Goldman reasoned that removing such curbs would not hurt the national objective ‘of giving Singaporeans a stake in the country by being able to buy and own residential properties at affordable prices’.

It said the possibility that the Government would loosen its reins on the land restrictions is higher now.

Goldman cited its discussions with developers which have affirmed its view of foreign interest in landed property.

The bank also referred to a change in the tone of government policy which has become firmly pro-immigration, it said.

‘We think relaxing restrictions on foreigners buying landed property would accelerate Singapore’s efforts to attract foreign talent,’ Goldman said, though it acknowledged that for now, there is ‘no certainty of any policy change’.

Goldman has estimated that about 2,800 landed homes with written permission for development will be let out into the market over the next few years.

Watten Estate Condo Up For En Bloc Sale

Sources : The Business Times, June 27, 2007

WATTEN Estate Condominium at Shelford Road off Dunearn Rd has been put up for collective sale through an expression of interest exercise.

So far, owners with more than 70 per cent of share values, but short of the minimum 80 per cent required, have signed the collective sale agreement, at a price believed to be around $400 million. This works out to $1,297 per square foot of potential gross floor area inclusive of development charges.

The 220,241 sq ft freehold site is zoned for residential use with a 1.4 plot ratio (ratio of maximum potential gross floor area to land area) and a five-storey maximum height. No development charge is payable, according to DTZ Debenham Tie Leung, which is marketing Watten Estate Condo. The site can be redeveloped into a new condo with about 200 units averaging 1,500 sq ft, market watchers reckon.

Currently, Watten Estate Condo has a total of 104 units comprising a block of apartments and four blocks of townhouses. Property tycoon Ng Teng Fong, who controls Far East Organization, is believed to own two units in the development. The expression of interest for Watten Estate Condo closes on July 20.

The property is near Raffles Girls’ Primary School, Nanyang Primary School, Hwa Chong Institution and National Junior College. The Botanic Gardens is a short drive away.

Lippo Realty recently paid $1,280 psf per plot ratio for Aura Park at Holland Road, which is also near Botanic Gardens.

Luxury Bungalows Enjoy Strong Demand In Buoyant Market

Sources : The Straits Times, July 3, 2007

Average asking prices now close to $1,000 psf on the back of rising land values, larger plots

DEMAND for prime bungalows is still high and prices show no sign of easing either - no surprise given the property market’s resurgence.

So far this year, 47 deals for good class bungalows have been done to the tune of $560 million, said CBRE Research.

This compares with 55 deals worth $564 million completed in the same period last year.

Good class bungalows are defined as those on at least 15,000 sq ft of land in 39 designated areas.

Asking prices for bungalows in coveted areas such as Nassim Road, Dalvey Estate, White House Park and Cluny Park now average $900 per sq ft (psf) to $1,000 psf, said Mr Douglas Wong, who heads PropNex Grandeur Homes.

This is up from transacted prices of $400 psf to $450 psf three years ago when the market for good class bungalows showed its first signs of recovery, he said.

Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong, said asking prices for Nassim Road have crept up to about $1,200 psf.

Average total prices for good class bungalow deals this year have crossed the $12 million mark, compared with last year’s average of $10.8 million and the 2005 average of $8.5 million, he said.

A bungalow on 15,075 sq ft in next door Dalvey Estate in district 10 was sold for $1,091 psf of land area in March. This brought the average price of done deals in the area to $898 psf this year.

It represents an 83 per cent rise from the average price of $501 psf recorded for five deals done last year, said CB Richard Ellis Research (CBRE Research).

Another Dalvey Road bungalow with a land area of 20,139 sq ft was sold in April for $14.2 million, up 63 per cent from the $8.7 million price that the seller paid last February, it said.

The Binjai Park area in district 21, near Bukit Timah Road, has also seen a significant price increase this year.

Three deals worth an average of $666 psf have been done compared with an average of $363 psf for three sales last year.

Higher-priced deals are being recorded because of rising land values, larger plots being sold and newer houses on those plots, said Savills Singapore’s Mr Ku.

Some owners who had bought a few years ago rebuilt or renovated their homes before putting the properties back on the market at higher prices, he said.

The prime bungalow market had a record year last year with 119 deals worth $1.23 billion.

But it cannot be compared with the condominium market as it is largely restricted to local buyers, consultants said.

Foreigners have to be permanent residents and apply for special approval to buy landed homes on mainland Singapore, with Sentosa Cove being the only location where non-PR foreigners can purchase landed property.

Foreigners are further restricted to landed properties with a land area of no more than 15,000 sq ft.

CBRE Research said good class bungalow sales this year would be similar in value to those of last year, but the number of sales may not be as high as the 119 recorded last year.

‘That is because sellers’ expectations are now much higher than before, given the very positive outlook,’ it said.

Nevertheless, where value is concerned, there is still room to move up, said Mr Wong, who predicts a 5 per cent to 10 per cent rise in bungalow prices for the rest of the year.

Prices could move even higher next year given that 99-year leasehold Sentosa Cove bungalow plots have sold for higher prices than good class bungalow plots.

‘Good class bungalows are a unique product. There are only 2,500 units in Singapore and all are freehold,’ said Mr Wong.

One Unit @ The Marq Sold For Record $5,100 PSF

Sources: The Business Times, June 29, 2007

Its $31m total price is also likely to be the highest ever paid for a single unit in S’pore

OPULENT LIVING: The record-setting apartment was one of eight sold in the Signature Tower, which boasts a 15m private lap pool in every unit. — PHOTO: SC GLOBAL

THE price of a condominium unit in Singapore has crossed the $5,000 per sq ft (psf) mark for the first time.

The all-time high was set by at least one apartment in The Marq on Paterson Hill, the latest project by luxury developer SC Global.

This 6,195 sq ft unit fetched $5,100 psf, or a total of about $31 million - also believed to be the highest price ever paid for a single condominium unit, said SC Global.

All the 21 units released at The Marq been taken up, just a week after SC Global said it would offer them at an invitation-only preview.

The apartments sold at the 66-unit development achieved an average price of $4,137 psf, SC Global said in a statement.

Each unit was priced at between $11 million and $31 million.

Prices of luxury condominiums have soared to new heights since the beginning of the year.

In March, they crossed the $4,000 psf mark at CapitaLand’s The Orchard in Orchard Turn and two weeks ago, an apartment in St Regis Residences in Cuscaden Road, developed by City Developments, fetched a record $4,635.50 psf.

Even The Marq’s record may not last for long, say property experts.

As Singapore’s property developers start catering more to ‘ultra-high net worth individuals’ from around the world, condominiums are likely to get more expensive, said Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

‘We will continue seeing more and more opulent types of developments coming into the market, which will support continued growth in capital values,’ he added.

Despite the roaring market, average prices of Singapore’s most luxurious condominiums are still below those in major cities.

In Tokyo and Hong Kong, for instance, the average price of the most prime apartments is more than $3,000 psf, Mr Ku said.

In New York, it is $4,000 psf, and in London, it can go up to $9,000 psf. The average price of luxury condominiums in Singapore is about $2,000 psf.

The record-setting apartment at The Marq was one of eight sold in the development’ s Signature Tower, which boasts a 15m private lap pool in every unit. Each unit takes up an entire floor.

Although SC Global would not disclose the nationality of the buyer who forked out $31 million, it said that 65 per cent of The Marq’s buyers so far have been foreigners.

They hail from Indonesia, Malaysia, Britain, China and India, the developer added.

SC Global also said it has not yet finalised a date for the release of the other units at The Marq.

East Coast Conservation Bungalow Sold for $13.95m

Sources: The Straits Times, July 3, 2007

A WELL-HEELED Singapore buyer has outbid four others to lay claim to a large conservation bungalow on Mountbatten Road in the East Coast area.

The buyer, known only as Mr Koh, paid $13.95 million for the 20,222 sq ft plot at an auction held by Knight Frank yesterday. About 89 bids were received for the property, classified as a rare ‘early bungalow’ built in the 1860s, said Knight Frank’s auctions director, Ms Mary Sai.

Bids opened at $9.5 million, with the winning offer coming in at almost 40 per cent over the indicative price of $10 million, she added.

While transactions for conservation bungalows are too infrequent to be easily comparable, the last similar deal was done in 2004, she said.

SC Global then paid $11.05 million for Chansville, a Mountbatten Road bungalow with grounds of 55,000 sq ft. It has since restored the house, built four new ones and sold all five.

The bungalow sold yesterday was put under the hammer by a High Court order. But more properties going on auction these days are sold by their owners, according to two separate reports by property firms.

Knight Frank research showed that the number of properties auctioned by owners climbed 38.9 per cent in the first half of this year, compared with the preceding six months. Those properties that were sold this year had a total value of $207.8 million, up from $115 million for those sold in the second half of last year.

Another major auctioneer, Colliers International, said 421 properties have been put up by their owners since January, up from about 350 properties in the preceding half-year.

It added that the auction market is being boosted by properties with the potential for a collective sale. On the days when such properties are put up for sale, ‘the number of attendees jumps from the usual 100 to as many as 200′, observed Ms Grace Ng, the deputy managing director and auctioneer at Colliers.

Bids are competitive for these properties as well, she added. A shop unit in Golden Wall Centre recently sold for $1.07 million, while a shop unit in The Adelphi also fetched $460,000.

For the auction market, $263.02 million worth of properties have been sold since January, up from $210.29 million in the six months before that, said Colliers.

Owners’ sales made up more than half of this number, with 52 deals worth $177.42 million.

CDL Sells 38 Cliveden Units @ Average Price of $3,600 Per Square Foot

Sources : The Business Times, July 7, 2007

CITY Developments Ltd (CDL) has sold 38 units at its Cliveden condo on the former Kim Lin Mansion site at Grange Road at an average price of $3,600 per square foot. About 90 per cent of buyers were foreigners. The highest price achieved was $4,162 psf for a four-bedroom apartment.

The Cliveden: The 24-storey freehold development will have three single towers and a twin tower. Forty-four units from two towers have been released for sale and CDL is considering releasing some units from another tower

CDL said yesterday that it has released 44 units from two towers in the freehold development. The condo comprises 110 units in all - comprising three-bedders (2,153 sq ft), four-bedroom apartments (2,842 sq ft) and penthouses ranging from 4,392 sq ft to 6,028 sq ft.

The project was showcased during road shows in Hong Kong and Indonesia over the past two weekends. ‘CDL has also started to present this well-appointed freehold residence to specially invited guests in Singapore,’ the listed developer said yesterday. CDL said that it is considering releasing some units from another tower for sale. The 24-storey project will have three single towers and a twin tower.

CDL bought the Kim Lin Mansion site in late 1999, during the last bout of en bloc sale fever, for $996 psf per plot ratio, including development charges. However, the ensuing property slump led CDL to hold off redeveloping the site until now.

Last year, the listed property group controlled by Singapore’s Kwek family bought the Lucky Tower site diagonally opposite the Kim Lin plot for $1,134 psf ppr.

On the stock market, CDL ended 10 cents lower at $16.80 yesterday.

Singapore In A Golden Period, Says MM Lee

Sources: The Straits Times, July 8, 2007

Mr Lee said Singapore is in this enviable position today because it had taken ‘painful and unpopular measures’ after the 1997 Asian financial crisis to get the economy into shape.

FRAMED against a Saturday night Orchard Road crowd, Minister Mentor Lee Kuan Yew last night sketched a rosy picture of a more vibrant Singapore in five years’ time - if it took full advantage of the opportunities now before it.

Investors from developed countries are pouring money into the region and Singapore is enjoying good economic growth and social development.

Economic giant China is pulling in foreign investments of US$70 billion (S$106 billion) and India, US$10 billion a year. Foreign direct investments here have maintained at about S$6 billion to S$7 billion.

The stock markets of some Asean countries have risen by an average of 48 per cent. Asian current accounts are running surpluses with reserves doubling since 2003 to US$2,500 billion.

‘If there are no wars or oil crises, this golden period can stretch out over many years,’ he said.

The key is having a good government which will get its policies right, to encourage economic growth.

Singapore’s economic growth this year will be around 5 per cent to 6 per cent - ‘not bad’ for a maturing economy with a per capita income of over US$25,000, he said at a Tanjong Pagar GRC event in Ngee Ann City’s civic plaza.

‘Once you have growth, all problems can be managed. When you have no growth and you have unemployment and no jobs, then all problems become intractable, ‘ he said.

Mr Lee told the sizeable crowd, many of them younger Singaporeans, that they were luckier than him when he was a young man.

‘You got the best schools, technical colleges. Nobody is deprived of an education in Singapore and you can go abroad if you do well with bursaries and scholarships. ‘

He had this message for those in their teens and early 20s: ‘You’re a generation that is especially blessed. You have ahead of you 10, 15, 20 years.’

Singapore was able to push ahead when China and India adopted wrong economic policies. Although they have recovered and are growing strongly, Singapore is still ahead ‘and our job is to stay ahead, and I believe we can’.

Mr Lee said Singapore is in this enviable position today because it had taken ‘painful and unpopular measures’ after the 1997 Asian financial crisis to get the economy into shape.

The data tells the story: some 9.7 million visitors came here last year; unemployment is at a low 2.9 per cent and 49,000 jobs were created between January and March.

More important, he said, the Government has revised its vision of Singapore - to turn it into a city with a lively night life, a more liberal arts and entertainment scene, the building of the two integrated resorts and the introduction of Formula 1 racing here next year.

‘I believe you’re going to see a transformation in Singapore. It’ll be the most vibrant lively city in this part of the world. And I believe in the next five years, we’ll see it evolve.’

SCPL’s Sentosa Cove Site Up For Grabs

Sources : The Business Times, July 18, 2007

The reserve price has been set at $688 psf per plot ratio

THE few remaining land parcels in the upmarket waterfront housing district coming up on Sentosa island are still being sold by Sentosa Cove Pte Ltd (SCPL).

The developer’s latest offering is a 71,589 sq ft site slated for development into 15 to 20 strata landed homes (terrace houses, semi-detached homes or bungalows) with shared facilities like a swimming pool or gymnasium. The reserve price has been set at $49.25 million or $688 psf per plot ratio (ppr), SCPL said.

Credo Real Estate managing director Karamjit Singh reckons the 99-year leasehold site could fetch around $70-80 million, reflecting a land price of about $980 to $1,120 psf ppr.

The plot, being offered by an expression of interest exercise, has a 1.0 plot ratio, hence the maximum gross floor area allowed is the same as the land area.

‘To optimise the usage of the site, the successful developer will most likely develop strata bungalows,’ Mr Singh reckons.

SCPL said the expression of interest exercise closes on Aug15 and the award will be based solely on price.

‘Foreigners will be eligible to purchase these strata landed homes as Sentosa Cove has been granted waivers for foreign ownership on residential land,’ SCPL said.

SCPL has sold land for about 80 per cent of the total 2,500 homes planned for Sentosa Cove, and more than 120 families have moved into their new homes in the location.

ION-ic Turn

Sources : The Straits Times, July 18, 2007

Ion Orchard - not many shoppers and industry insiders seem to like the name given to the mall in Orchard Turn. But location and shop mix rather than name are key to survival

PULLING POWER: Ion Orchard’s stars will be six duplex designer flagships that will project the front of the multi-million dollar complex. — PHOTOS: ION ORCHARD

SAY it loud - Ion Orchard.

Is it a clever, catchy name for a very high-profile Orchard Road mall? Or is it a moniker that you don’t quite know how to pronounce - let alone know what it means - and which sits strange on a mall?

After all, ion - which means an electrically- charged particle - seems to reside in the world of science and not the glitzy world of retail.

On Monday, CapitaLand and Hong Kong’s Sun Hung Kai Properties, the joint owners of the mall, announced that they had chosen to name their multi-million- dollar mall Ion Orchard.

The 663,000 sq ft mall, which will rejuvenate Singapore’s main shopping strip, will come up at the junction of Paterson and Orchard roads at the end of next year. It was previously referred to as the Orchard Turn project.

‘The name Ion Orchard resonates a high level of energy, dynamism and magnetism, characteristic of an ion,’ said Ms Soon Su Lin, chief executive of Orchard Turn Developments which manages the mall.

‘It is a catchy name with easy recall and will appeal to a wide audience.’

The ‘I’ in Ion also celebrates the individuality in every shopper and the personalised experience that the mall will offer, she added.

The name was thought up by Singapore-based consultants Enterprise IG, the branding subsidiary of British advertising agency WPP Group, in October last year.

It was then tested with audience groups and marketing material for it was developed before the name was unveiled.

But a straw poll of 50 shoppers, branding experts and retail industry players yesterday drew mostly thumbs-down responses - 26 per cent liked the name but 68 per cent hated it. The rest were indifferent.

‘Ion Orchard is just too much of a mouthful and it sounds like some computer-gadget mall and may be a little misleading,’ said undergraduate Maria Lim, 24.

She prefers names ‘like VivoCity which gives an idea of a city full of shops and would draw crowds’.

Others noted that the word Ion is not easy on the tongue.

‘People may mispronounce it and I can imagine some calling it ‘Eye-On’ and others ‘Yee-On’, so it’s going to confuse everyone, especially taxi drivers,’ said businessman Suresh Kumar, 52.

For the record, Ion is pronounced ‘eye-on’.

He noted that a name like Orchard Central - another Orchard Road mall next to Specialists’ Shopping Centre which will open next year - is so much easier to pronounce.

Indeed, when Life! asked readers in May for possible names for the mega project, they tagged Orchard to familiar words like City, Junction, Paradise, Central, Square, City, Oasis, Jewel, Cross and Peak.

No wonder then that flavour chemist Willi Grab, 63, has trouble associating Ion with shopping.

‘I’m a chemist so I know all about ions, but how about the man in the street? While it is clear and short, I don’t see how ions are really linked to the mall or the shopping experience,’ he said.

Retail experts also had lukewarm reactions.

‘An ion is an atom or group of atoms that has lost one or more electrons. To most shoppers, that would probably not be an immediate association with a mall,’ said practice associate professor of marketing Seshan Ramaswami from the Singapore Management University.

‘Instead, ion probably brings up associations of various health-care products that use some ion-related technology for supposed health benefits.’

Mr Danny Yeo, executive director of property consultancy Knight Frank, said: ‘My first reaction was that it isn’t a catchy name. With a shopping mall, you want a name that is catchy - easy to remember and pronounce.’

Luxury haven

STILL, a name’s just a name. Popular or not, it will only go so far in keeping tills ringing, as the shops in hard-to-pronounce Ngee Ann City will attest.

Added Prof Ramaswami: ‘The name is far less important than location, which is really key, and the assortment of stores and other retail services like hairdressers and restaurants. ‘

Ms Soon is aware of this too, which is why the mall will attract a collection of flagship concepts that will offer a wide range of merchandise and services.

The stars will be six duplex designer flagships that will project the front of the sleek complex to create the impression of a luxury haven like Tokyo’s Ginza district.

Sun Hung Kai, which owns Hong Kong’s luxe IFC Mall - home to posh department store Lane Crawford among other top shops - ‘will be instrumental in opening the right doors for us’, Ms Soon added. For now, she cannot reveal which big names have signed up.

Experts point to other advantages, including its prime location and link to Orchard MRT station.

Hence, they say it should surprise no one if shoppers come in droves, never mind if the name Ion sounds off-putting for now.

As Mr Grab predicted: ‘After a while, people will get used to the name and it’ll become Orchard Road’s icon.’

And at the very least, it’s got the public excited.

‘The name doesn’t bring to mind a shopping mall, but it works because it’s different,’ said Ms Claire Cher, senior marketing and communications manager of property-based UOL Group.

‘The fact that we’re talking about it, discussing it and debating whether it’s a good name or not means that they’ve done a good job getting themselves noticed.’

Guide To Mortgage Jargon

Sources : The Sunday Times, 24 June 2007

Deciphering rates

Reference or board rate: These vary from bank to bank, and even within a single bank, they can vary from one loan package to another.

Board rates are the basic rates used for loan packages. A bank can create its own board rates for loans, taking into account factors such as its funding costs at the time when the loan was taken, the type of property and the Singapore Interbank Offer Rate (Sibor).

Under the new guidelines by the Association of Banks in Singapore (ABS), banks must tell you what external benchmark rates they use to determine their board rates. They must inform you in advance (usually 30 days) before they change their board rates.

Blended rates: In this case, some years of the housing loan package are tagged to a fixed rate while the remainder are tagged to a variable one. The effective rate is worked out by blending the two portions. The effective rate will still change over time as the variable rate fluctuates with market conditions.

Still, the variable-rate portion of promotional blended-rate packages can be much lower than is the case for normal variable-rate ones, though rates will move up and down with market changes, noted Mr Wu Yihong of consultancy MyHappyHouse.com.sg

If you set aside promotional rates, blended rates are generally at roughly the same level as those for plain-vanilla floating-rate or fixed-rate packages.

Pegged board rates: These are directly linked to published rates, such as Sibor (published in newspapers) or the Central Provident Fund rate, which is now at 2.5 per cent.

Pegged board rates are usually about 1 percentage point higher than these rates.

A key plus is that consumers can track these publicly available rates to see how their own rates are calculated.

Effective annual rate (EAR): This reflects the annual cost of the interest that you have to fork out throughout the loan. The lower the EAR, the lower the interest cost over the loan tenure.

The EAR could be higher than the rate advertised by the banks over, say, the first three years.

Some features

Claw-back period: This is the length of time, usually three years, that the borrower has to refund the subsidy on legal costs that is provided by the bank. This subsidy usually comes to 0.4 per cent of the loan amount. The borrower might also have to pay back extra perks, such as fire insurance, thrown in by the bank, if the loan is fully paid off during the claw-back period.

Refinancing during or after lock-in periods: If you are out of the lock-in period, typically, the only cost of refinancing tends to be the legal cost.

If you are still within the lock-in period, you will have to fork out a repayment penalty and refund the legal subsidy.

Customers should check to see if the savings they can get from lower interest rates at another bank would more than offset these costs of refinancing.

Interest-servicing package: The borrower services only monthly interest repayments, leaving the principal loan sum undiminished. The interest rate applicable to this type of housing loan could be slightly higher than for a typical principal-and-interest housing loan. Such packages appeal to investors who are trying to lower their monthly mortgage repayments.

For more information, you can refer to a consumer guide issued ABS titled Key Questions To Ask The Bank Before Taking A Home Loan.

Steps To Owning Your Dream Home

Source: The Straits Times, 28 Jan 2007

#1 Work out how much you can afford.

Upfront costs include a minimum 5 per cent cash down payment, legal fees of 0.5 to 1 per cent of the loan amount, an agent’s commission of 1 to 2 per cent of the purchase price and a stamp duty of up to about 3 per cent of the purchase price.

Total monthly debt servicing should not exceed 35 per cent of your gross monthly income.

Also take into account such ongoing expenses as property tax, fire insurance, mortgage insurance, and conservancy or maintenance tax.

#2 Choose a suitable home loan and get in-principle approval from your banker on the loan amount.

Decide based on your individual risk appetite and financial situations.

#3 Search for your dream home.

Check to see if approvals have been obtained for any additions or alterations done. Otherwise, the bank will only provide financing subject to the property being restored to its original condition.

#4 Ascertain the market value of the property.

The bank can provide an indicative value if you can provide some details of the property you want to buy.

#5 Appoint a lawyer to coordinate your purchase.

The lawyer will, among other things, conduct a bankruptcy search on the seller.

#6 Make an offer on the property to the seller.

You have to place an option fee of 1 to 10 per cent to make an offer.

#7 Formally apply for the loan.

Once it is approved, you will receive a letter of offer from the bank.

#8 Meet your lawyer.

Your lawyer will help you to exercise your option to buy and apply to the CPF Board for the use of funds for your purchase.Later on, he will go through the CPF, mortgage and other documents with you.

#9 Arrange for the bank’s valuers to carry out a formal valuation.
They will submit their valuation report to the lawyer and the bank.

#10 The lawyer will receive the funds from the bank and the CPF Board to complete the purchase.

Stamp duty and legal fees are payable at this stage. Now you just need to collect the key to your dream home.

Property Transactions With Contract Dates Between 25-30th June 2007

60% Of The Marq Buyers Are Foreigners

Sources : The Business Times, July 17, 2007

SC Global will price penthouses at $5,000 per sq ft

(SINGAPORE) SC Global Development Ltd, which sold homes at its The Marq apartment project at a record price last month, said foreigners made up about 60 per cent of the buyers.

SG Global will price its penthouses, twice the size of its regular apartments at the development, at about $5,000 per square foot (psf), matching the record $5,100 achieved in other units, chief executive officer Simon Cheong said in an interview yesterday.

Singapore home prices are surging, driven by the longest economic expansion in a decade and the world's fastest-growing population of millionaires. Investors paid between $11million and $31 million for the first 21 homes sold at The Marq, a five-minute walk to the main shopping district of Orchard Road. The units fetched an average price of $4,137 psf, the company said on June 28.

'Singapore's becoming more and more of a global city, and our buyers are well travelled and well heeled, and they compare our product against those in other gateway cities around the world, and they find the prices to be reasonable,' Mr Cheong said.

SC Global shares were unchanged at $6.70 at the 5.05 pm close. SC Global's stock almost tripled this year, compared with the 37per cent average gain for Singapore property index. -- Bloomberg

Tan Tong Meng Tower Hits En Bloc Trail

Sources : The Business Times, July 17, 2007

Freehold site expected to fetch around $205m

TAN Tong Meng Tower, a freehold residential site along Thomson Road, is seeking expressions of interest for a collective sale.

Tan Tong Meng Tower: About 118 apartments averaging 1,200 sq ft each can be built on the site

CB Richard Ellis (CBRE), which is marketing the project, expects the site to fetch around $205 million - or $1,449 per square foot per plot ratio (psf ppr), including an estimated development charge of about $240,000.

The site has a land area of about 50,600 sq ft and a 2.8 plot ratio - giving it a maximum gross floor area of about 141,600 sq ft.

About 118 apartments averaging 1,200 sq ft each can be built on the site, said Charles Hoon, CBRE's director for investment properties.

'The collective sale market for prime sites located on the fringe of Orchard Road is very much in demand,' said Mr Hoon. 'The most recent successful collective sale nearby is Lincoln Lodge at Khiang Guan Road, which sold for $1,449 psf ppr in June.

'Tan Tong Meng Tower is expected to achieve a similar land price, which works out to $205 million.'

CBRE also expects the nearby sold-out project Sky @ Eleven to give a fillip to the sale of the site.

At present, the site houses 35 apartment units of the same size. If it fetches $205 million, each owner will walk away with $5.9 million.

So far, more than 70 per cent of owners have agreed to a collective sale. For the sale to go through, some 80 per cent have to agree.

The expression of interest exercise will close on Aug 10 at 3 pm.

Napier, UE Put 2 New Projects On Market

Sources : The Business Times, July 17, 2007

TWO new projects have been put on the market - 8napier on the former Eng Lok Mansion site near Botanic Gardens, and The Rochester in the one-north precinct.

Top notch: 8napier (above) will come loaded with top-of-the-line fittings while The Rochester is part of a mixed development which has a mall and hotel

Prices at the 46-unit 8napier range from $4,000 to $4,500 per sq ft for apartments, and for now, the plan is to limit sales to just 10 to 12 apartments in the freehold development.

'We may sell another dozen or so apartments when our showflat is ready on site in a few months' time. But we plan to keep the rest of the project, including the six penthouses, for sale after the project is completed, which will probably be around end-2009,' Mark Wee, director of Napier Properties, said when contacted by BT yesterday.

The company, controlled by Mr Wee and former Parkway boss Tony Tan, is currently previewing the project at its office on the 21st floor of Ngee Ann City Tower A.

The 10-storey 8napier has 40 apartments (either three- or four-bedder units) and six penthouses.

All the penthouses are duplex units, ranging in size from more than 4,000 sq ft to nearly 6,000 sq ft. They are expected to be sold by auction.

The smallest three-bedder apartment in the project is just over 2,000 sq ft and is priced at about $8 million. 'All the units come fully loaded with top-notch lighting, sound system and kitchen equipment, bathroom fittings and the like, so that our buyers do not have to do any renovations as we are fitting the units to the highest standard currently available in the Singapore market. This should minimise the hassle of moving in,' Mr Wee said.

He declined to say how many units have been sold so far but buyers are understood to be a mix of foreigners and Singaporeans.

Over at one-north, United Engineers is believed to have priced The Rochester apartments in the $1,000 to $1,200 per sq ft range. UE could not provide the average price yesterday when contacted by BT. The 99-year leasehold project is opposite One North Residences, which was sold earlier this year at an average price of around $900-950 per sq ft, market watchers said.

The Rochester has a total of 368 residential units, including eight penthouses, in a 36-storey block. The project is part of a mixed development that also includes a 100,000 sq ft mall and hotel.

The entire project is slated for completion around 2009-10. The residential component comprises one, two, and three-bedroom apartments and penthouses. Some of the one-bedders are duplexes. UE began selling the units yesterday, according to its spokesman.

Multiple Unit Buys Should Be Tracked

Sources : The Business Times, July 17, 2007

This would indicate level of speculative activity, says Colliers International

COLLIERS International has suggested that the authorities track multiple-unit purchases of private residential properties, which could be used to show the level of speculative activity.

Individuals who own several properties may dump them if the market softens and this exercise could potentially accelerate any property downfall, the property consultancy argued.

'If the market drops, and these buyers want to let go of their units ... and that will further accelerate any price downfall.' - Colliers' Ms Tay

Colliers' director for research and consultancy Tay Huey Ying, said: 'So far, the government has been giving details on the number of subsale deals - which refer to secondary market transactions for projects that have yet to receive Certificate of Statutory Completion and are often seen as a proxy for speculative activity. That's useful information.

'But in addition to that, perhaps the government may also want to monitor and see the extent to which people are buying several units or even floors, particularly at new residential property launches, as that may also reflect an intent to speculate, that is, buying units with the aim of flipping them within a short period of time.'

When contacted, a spokeswoman for the Ministry of National Development said: 'The Urban Redevelopment Authority does not monitor multiple purchases by individuals. However, the government is monitoring the property market closely, to ensure that it remains healthy and sustainable.'

Ms Tay said that in addition to tracking multiple-unit buyers as a lead indicator for future speculative activity, there could also be other potential implications of such buying activity.'If the market drops, and these buyers want to let go of their units, we could see many units on the market, and that will further accelerate any price downfall,'she said.

Ms Tay said she was more concerned with individuals who buy multiple units rather than than institutional investors like funds which make such purchases, since corporate buyers typically have greater financial muscle and are looking at holding their assets for rental income over a longer timeframe. 'Individuals are more likely to lack the financial muscle to hold on to their purchases if the market softens,' she said.

In addition to tracking those who buy multiple units or floors in the same development, Ms Tay also observed there were many individual investors who have been buying units across Singapore. 'That also deserves monitoring,' Ms Tay added.

Condos-On-Columns The In Thing In S'pore

Sources : The Business Times, July 19, 2007

Soleil@Sinaran is latest in new trend for high-rises that enhances privacy

THE upcoming Frasers Centrepoint Homes condo Soleil@Sinaran is the latest to reflect the trend for soaring buildings raised high on columns.

Architects 61, which also designed The Cosmopolitan in the River Valley area, said that by elevating the 417-unit Soleil@Sinaran, 'the privacy of the units is enhanced to greater heights'.

Bigger landscape: For Soleil@Sinaran, Frasers Centrepoint Homes' upcoming condo, raising the building has allowed to free more space for landscaping

Considerations in the design of Soleil@Sinaran included a high plot ratio of 3.5, a height restriction of about 40 storeys and high-density living.

The architects also felt that adjacent mid-rise private flats and Novena Square commercial development had large footprints and, therefore, views were minimised.

Architects 61 said: 'Privacy of the lowest level of units is further enhanced by locating it as high from the ground as possible.'

Like The Cosmopolitan - and many other new condominiums - Soleil@Sinaran will rise from above street level.

But will columns be the only thing visible from street level?

Asked about the impact on the streetscape from buildings raised on columns, the Urban Redevelopment Authority said: 'Generally, in certain areas within the city centre, urban design guidelines are put in place where the context requires buildings to relate to the street and their surrounding developments.

'In the case of The Cosmopolitan, it is located in a residential area where the relation of the building to the street is not as critical. Hence the guidelines do not specifically require the building to do so.'

For Soleil@Sinaran, raising the building has allowed Architects 61 to free more space for landscaping that will include lagoons, pool lounges, entertainment pavilions with spa alcoves and spa pavilions to create a 'green podium'.

'The landscaping extends into the depth of the tower footprint,' the architects said. 'Trees grown within the covered first-

storey terrace provide a human scale to the tower rising above, 'dissolving' the boundary between the inside and the outside. It is this landscaped podium that provides the human scale at street level.'

Soleil@Sinaran is expected to be launched mid-August. Prices have not be fixed yet.

Hotel Site At Upper Pickering St Up For Tender

Sources : The Business Times, July 19, 2007

Plot gets moved to Confirmed List after just 6 months on the GLS Reserve List

AFTER just six months on the Government Land Sales (GLS) Reserve List, a prime hotel site at Upper Pickering Street has been moved to the Confirmed List.

Sites on the GLS Reserve List require a committed minimum bid before they are offered for sale by public tender. Sites on the Confirmed List do not.

URA said: 'The hotel site at Upper Pickering Street was transferred from the Reserve List to the Confirmed List as the early development of this site will cater to the increasing demand for hotel rooms and help add vibrancy to the Hong Lim Park area.'

A spokesman for URA said the authority had received market interest for the site. 'However, URA's policy is not to reveal the details on applications to trigger sites for tender,' the spokesman said.

Being a well located site, it is surprising that it had not received a committed bid earlier, especially as the hotels sector has been enjoying higher average room rates recently.

Jones Lang LaSalle Hotels executive vice-president Chee Hok Yean re-affirmed that interest for hotel sites here has remained high and the fact that the site had not been triggered earlier probably had more to do with potential foreign developers' unfamiliarity with the Reserve List system.

'Those who trigger the tender process usually don't end up winning the site so it can appear to be a waste of time for them,' said - Ms Chee Hok Yean,Jones Lang LaSalle Hotels' executive vice-president

Ms Chee does not believe land prices for hotels are increasing too rapidly. 'Prices are still sustainable,' she said, adding that both foreign and local developers are particularly interested in the hotel sector as it is picking up from a 'low level'.

The nearby Swissotel Merchant Court Hotel currently enjoys occupancy of more than 80 per cent and an average room rate of about $150.

The Upper Pickering Street site is located within walking distance of the MRT stations at Chinatown and Clarke Quay. It has a site area of about 0.7 ha and a gross plot ratio of 4.2. It can generate a maximum permissible gross floor area of about 29,227 sqm (314,597 sq ft).

Ms Chee expects that the potential developer will want to build a four-star business hotel and reckons that bids could be in the range of $560 per square feet per plot ratio.

Fast Track For En Bloc Deals

Sources : The Business Times, July 24, 2007

CREDO Real Estate will market two prime properties for collective sale through expression-of-interest (EOI) exercises - and it could just prove to be the faster way to get a sale done.

Each of the properties - The Hillpark off Dunearn Road and Chateau Eliza at Mount Elizabeth - has less than 80 per cent of owners' approval for sale at the indicative prices, so the process of a collective sale cannot officially proceed.

However, by launching an EOI exercise, owners who are undecided may be swayed by bids from interested developers, even though the bids will not be legally binding offers.

But as Credo's managing director Karamjit Singh notes: 'It can be faster because you can secure a bid at an earlier threshold.'

The Hillpark sits on 77,646 sq ft of land and is zoned for two-storey bungalows. The indicative asking price is $106 million to $110 million, which works out at $1,365 to $1,416 per square foot.

Chateau Eliza sits on a 17,997 sq ft site and has a designated plot ratio of 2.8. The height limit is 36 storeys and the indicative price is $120 million or $2,223 per square foot per plot ratio.

Both developments have achieved around 70 per cent of owners' approval for collective sale, an important consideration when proceeding with an EOI.

Giving an idea of how EOI can work, Credo's executive director Tan Hong Boon revealed that for a recent collective sale deal it brokered through an EOI - Watten Heights off Dunearn Road - Credo received 16 bids.

One was high enough to convince undecided owners to agree to sell quickly.

An Offer to Purchase was then drawn up with the highest bidder and the collective sale was done within days, without having to proceed with a public tender.

Residential Supply Crunch To Get Worse, Says Citigroup

Sources : The Business Times July 24, 2007

Jobs growth, foreign worker inflow overwhelming available units

THE property supply crunch is likely to get worse despite government assurances that supply over the next few years is sufficient, Citigroup says in a report released yesterday.

The report comes just a week after the investment bank advocated a shift from property to bank stocks, amid what it termed 'policy uncertainty'.

Since mid-May the government has announced measures to tackle the surge in the property market - especially the rise in office rents. This has undermined the performance of property stocks, Citigroup said in a July20 report.

In yesterday's report, Citigroup analysts Chua Hak Bin and Lim Jit Soon say a supply crunch can be expected because the number of units completed from 2007 to 2010 will likely fall short of the Urban Redevelopment Authority's projection of 42,200.

'Completion rates have been consistently over-estimated in the past,' the analysts say. 'Units under construction provide better guidance and suggest a potential shortfall. Shortage of construction materials and workers implies that risk of delays has risen.'

Units under construction far lag completion estimates, with only 25,100 to be built from 2007-2010, according to Citigroup. Specifically, just 4,573 units are under construction in 2007 plus a further 6,633 in 2008. Jobs growth and the foreign worker inflow continue to overwhelm available residential units, Citigroup says. Jobs growth in 2007 is keeping pace with the 176,000 jobs generated in 2006, of which about half were taken up by foreigners.

'Accommodating the current flow of foreign workers looks near impossible with the current supply stock and pipeline,' the bank's report says.

'The lack of any slack also shows in completed but unsold units, which reached a new low of 567 at the end of the first quarter of 2007.'

En bloc sales will exacerbate the residential supply squeeze, Citigroup reckons. And it sees a risk of more policy measures.

'The government will likely favour supply side responses, including more land supply, more HDB flats and further relaxation of measures on rental of HDB properties,' it says. 'But demand-side measures cannot be ruled out if price increases continue to accelerate and speculation begins to test the comfort zone of the authorities.'

Anticipating dampening policies, Citigroup last week called for a shift from property counters to banks.

But it remains positive about the fundamentals for property because demand and supply dynamics continue to favour rental and capital growth for both the office and residential sectors. Still, policy uncertainty has affected the share prices of some property stocks, the report said.

Banks, which are beneficiaries of the property upturn because of property loans, are better proxies for the property boom, it said.

'With reasonable valuations and steady earnings growth, banks provide exposure to the reflation theme without the downside from policy uncertainty.'

Mum Bought Houses With My Money

Sources : The New Paper, Sat, Jul 21, 2007

A BUSINESSMAN is suing his own daughter - who has a low IQ - for her share of his mother's generous legacy.

He is also suing his three siblings for their share of three houses which sit on a total of about 18,000sqft of land at Paya Lebar Crescent.

The properties are estimated to be worth between $8 million and $9 million.

Madam Tan Soo Keow died in July last year at the age of 91.

In a will which she had made in April 2002, she bequeathed one semi-detached house to her son, Mr Chang Ham Chwee, 69, managing partner of Chan Kain Thye Literage Company.

She gave another semi-detached house to her mentally-challenged granddaughter, Ms Chang Lee Siang, 51.

And she willed the proceeds of a bungalow to be split four-ways: To her daughters, Madam Chan Siew Khim, 70, Madam Chan Meow Khin, 60; her other son, Mr Chan Hung Hor, 67; and to a charity of the Chan sisters' choice.

But Mr Chang, an honorary council member of the Singapore Chinese Chamber of Commerce and Industry, claims that the money which was used to buy and build the houses in the '50s and '60s was actually his.

He claims that his mother was holding the money in trust for him. And, as such, these properties - which were in his mother's name - actually belong to him.

According to documents filed with the High Court, his case is that when his father died suddenly in an accident on board a vessel in September 1950, he took over the running of the business, although he was just 13 years old.

He claims that his father had taken loans from his clients and his debts exceeded the value of his vessels.

As the eldest son, he had to step into his father's shoes, for the survival of his family. He claims his mother was in a state of shock and grief.

He negotiated with his father's creditors for a grace period to settle the debts and went about getting more business, he says.

In the days before the clean-up of the Singapore River in the early 1980s, lighters (also known as tongkangs) used to transport cargo between the port and the ships anchored out at sea.


As Mr Chang was busy with the business, he had to drop out of school the following year.

His mother could not have run such a business, he claims, as it would not have been possible for a woman to do so.

He claims that he gave the money that he had made from the business to his mother for safekeeping, as he was too young to open a bank account.

He did that from the time he took over the business, until around 1966.

He claims that his mother knew she was holding the money for him.

In 1951, he said, profit from the business was used to buy two plots at Paya Lebar Crescent.

They were put in his mother's name as, he claims, he was too young at that time.

Two years later, money from the business was used to buy another property along that stretch, now known as 40G. In 1959, Mr Chang's mother and siblings moved into the bungalow built there.

Mr Chang stayed at a shophouse in Boat Quay, to be close to his office.

In 1965, he decided to build four semi-detached houses on the other two plots so that they could be rented out.

They were completed in 1966 and paid for in 1967. In 1990 and 1991, two of the semi-detached houses, 40B and 40C, were sold for about $1.1m to help pay off MrChan Hung Hor's business debts.

Mr Chang claims that even after this, his mother had assured him that the rest of the properties belonged to him.

He also argues, through his lawyer, MrCavinder Bull from Drew & Napier, that Madam Tan's 2002 will is irrelevant as the properties were not hers to give away.

Mr Chang's sisters, however, have a different version of events.

They claim, through their lawyer, MrAnthony Lee of Bih Li & Lee, that after their father died in 1950, it was their mother, Madam Tan, who took over the lighterage business, running it with the help of her brother.

Madam Chan Siew Khim, being the eldest child, helped her mother keep the accounts and pay the workers.

The sisters, who are executors of their mother's will, claim that Mr Chang was then only a young, 'naughty' boy who was still in school and knew nothing about the business.

They say he joined as an apprentice only in 1952, after he dropped out of school.

The sisters claim it was their mother who was the boss. She ran the business while maids took care of them.


They say that Madam Tan was a 'formidable woman', with 'steely character' and determination. She commanded the respect of all the children, till the day she died.

It was she who bought the properties and dealt with the architects and contractors for their construction, they say.

They argue that the money from the lighterage business belonged to their mother alone.

It is not true that she was holding the money in trust for Mr Chang, they say, and the properties were hers to do as she wished.

Meanwhile, Mr Chan Hung Hor has taken his elder brother's side in the case, saying that Mr Chang is the beneficial owner of the three properties.

So the lawsuit has the two brothers pitting themselves against their sisters.

As for Ms Chang, represented by Mr Wong Siew Hong of Infinitus Law Corporation , she is just saying that her grandmother gave her the house.

The case is due to be heard in the High Court on Monday.