Saturday, August 11, 2007

Draycott 8

Draycott 8 is attractively located on an elevated site along Draycott Drive with just a few minutes’ walk from Orchard Road – Singapore’s bustling shopping and entertainment belt. Prestigious clubs such as The Tanglin Club and The American Club are just a stone’s throw away. Top schools and institutions are also within the vicinity.

Enjoy an infinite plethora of the nation’s best shopping, dining, entertainment, education and arts. Just a few minutes’ walk from the Central Business District (CBD), this exquisite 136-unit condominium is also well served by major roads such as Steven Road, Scotts Road, Orchard Road and the Central Expressway. The Orchard MRT Station is also just a short walking distance away.

Location: Draycott Park (District 10)

















Map Source : http://www.mightyminds.com.sg
Mighty Mind Street Directory


Tenure : 99 years leasehold
Site Area : 152,920sqft
Year of Completion: 2006
Total units : 136 in two 24-storey tower (4BR, Penthouse)
& One 24-storey tower (2BR, Loft)

Unit Types:
Sky Suites Apt (2bdrm) ~ 1,173, 1,421, 1,615 sqft
Sky Suites Lofts (2bdrm) ~ 1,432, 1,485, 1,528, 1,561, 1,647, 1,701, 1,798 sqft
Sky Villas (4bdrm)~ 2,863, 2,896, 3,175, 3,218 sqft
Penthouse ~ 4,015, 4,187 sqft

Facilities:
-50m Lap Pool
-Children's Fun Pool
-Jacuzzi
-Reading Corner
-Tennis Court
-Children's Playground
-BBQ Areas
-Multi-Purpose Turf Lawn
-Reflective Pool
-Clubhouse
-Book Lobby
-Dining / Party Room
-Theatre Lounge with Biometric Access
-Massage Room
-Steam, Sauna Room
-Day Bed Terrace
-Poolside Lounge
-Billiard Room
-Games / Mahjong room
-Gymnasium
-Yoga / Pilates room
-Onsen Bath
-Wine Cellar with Biometric Access
-Wine / Cigar lounge, Terrace
-Covered Car Park
-24 Hours Security












The Most Exclusive Residential Club in Singapore

At the heart of the Draycott 8 sits a 16,000 sq ft conserved 2-storey Colonial style house that has been transformed into an exclusive clubhouse. It is to-date the largest clubhouse for a single condominium property. Residents can enjoy a relaxing game at the Mahjong Room or the Billiard Rooms, catch the latest movies and live sports telecasts at the fantastic Theatre Lounge, or surf wireless at the verandah of the clubhouse. There is also an exclusive resident’s wine cellar, Cigar Terrace and Japanese Onsen room to the residents to unwind.

Residents will be enthralled by the cascading water features and the extensive offering of top-notch facilities that cater to both the young and old. Its exciting outdoor facilities include a 50-metre swimming pool, Jacuzzi, Children’s pools and an interesting playground accentuated with fun-filled “saber lights”.

CapitaLand In JV To Develop 300 Luxury Villas In Vietnam

Source : The Business Times, August 11, 2007

CAPITALAND has entered into a US$42 million joint venture (JV) agreement to develop an 11.7 hectare residential site in Vietnam's Ho Chi Minh City.

Mr Lui (Picture) : Vietnam's growth has led to increased demand for quality homes

CapitaLand will take a 75 per cent stake in the venture and inject US$31.5 million cash into the JV company. Local partner Azure City Co will hold the remaining 25 per cent stake.

Azure City is involved in infrastructure and property development.

As lead development manager, CapitaLand plans to build a gated community of about 300 luxurious villas on the site. The project will be ready for launch by the third quarter of 2008.

The site is about 35 minutes from the city centre.

'The site is CapitaLand's third residential project in Ho Chi Minh City,' said Lui Chong Chee, chief executive of CapitaLand's residential arm. 'We are now getting our second condominium project ready for launch by the end of the year.'

CapitaLand said in June that all 273 units offered under the first phase of its maiden Vietnamese residential project The Vista had been booked, at indicative prices of US$1,200-US$1,600 per square metre.

The entire project comprises 750 apartments in five towers. The second phase will be launched soon.

With the three projects, CapitaLand has a pipeline of about 1,600 homes in Ho Chi Minh City.

'Vietnam saw its GDP grow close to 8 per cent in the first half of this year - the highest in five years,' Mr Lui said. 'The strong growth has translated into increased demand for quality homes among affluent local professionals and rising number of expatriates in the country.'

CapitaLand's shares closed 15 cents lower at $7.20 yesterday. The stock has climbed 16.1 per cent since the start of the year.

Property Boom Benefits Hersing

Source : The Business Times, August 11, 2007

HERSING Corporation yesterday reported record profit and turnover figures for the first six months of the year as its real-estate brokerage arm marketed a whopping 13,800 properties worth $10 billion.

Mr Chua: 'We were kept very busy through the first half of 2007, marketing over $10 billion worth of properties - with $2 billion just from new project launches alone.'

Hersing, whose subsidiary ERA Realty is a major player in the real estate scene in Singapore, said that net profit for the first half ended June 30, 2007, rose six times to $9.7 million from $1.6 million a year ago.

Total revenue rose 135.2 per cent to $96.5 million, from $41 million last year.

Earnings per share rose to 4.36 cents, from 0.83 cents a year ago. The company announced an interim dividend of one cent a share.

Hersing attributed the strong showing mainly to its real-estate brokerage business.

'We were kept very busy through the first half of 2007, marketing over $10 billion worth of properties - with $2 billion just from new project launches alone,' said Harry Chua, Hersing's founder and chairman. Major projects the company marketed include One Shenton, Trillium and Seafront on Meyer.

Hersing's real-estate operations contributed $83.3 million to turnover and $9.6 million to profit before tax.

The 13,800 properties, sold for some $10 billion over the first six months of the year by ERA, earned Hersing over $80 million in commissions - the highest-ever in ERA's 25-year history, said Jack Chua, Hersing's executive director.

The company's financial services and self-storage businesses also did well, he said.

Hersing's Western Union financial services franchise profit before tax rose 37.1 per cent to $1.3 million year-on-year, while its StorHub self-storage business' profit before tax rose 32.6 per cent to $0.8 million.

Going forward, as developers are expected to slow the pace of new launches in the second half of 2007, Hersing expects revenue and profit performance from its real-estate brokerage business to be 'satisfactory but moderated in comparison to the first half of the year', it said.

The financial services and self-storage operations are, however, expected to maintain steady performance.

Hersing's shares closed unchanged at 51 cents yesterday. The stock has climbed 205.9 per cent since the start of the year.

F&N Q3 Profit Up 28.6%, Boosted By Property Division

Source : The Business Times, August 11, 2007

APB reports 10.4% rise in profit to $30.6m

The booming property market helped to boost Fraser and Neave's (F&N) third-quarter net profit by 28.6 per cent to $97.1 million.

The year-on-year rise in profit attributable to shareholders came as revenue rose 41.4 per cent to hit $1.3 billion for the three months ended June 30.

Before exceptional items, net profit attributable to shareholders rose 27.1 per cent to $96.5 million.

Profit before interest, taxation and exceptional items (PBIT) rose 25.9 per cent to $186.4 million.

Earnings per share for the third quarter rose to seven cents from 6.4.

F&N said its Q3 earnings and revenue were underpinned by revenue growth across all its core businesses, in particular its property and food & beverage divisions.

For the first nine months, net profit attributable to shareholders rose 35.7 per cent to $280.7 million. Before exceptionals, it rose 38.1 per cent to $278.1 million.

Said Han Cheng Fong, F&N's group CEO: 'Our properties division continued to benefit from higher-than-expected development profits and higher rental rates achieved from new and renewed leases. Likewise, our food & beverage division maintained its strong growth momentum while our publishing and printing division showed good progress and is on track to returning to historic growth rates and levels of profitability.'

Related links:-

Fraser and Neave's press release
http://tinyurl.com/25s3ww

FRASER AND NEAVE, LIMITED Financial statements
http://tinyurl.com/2e2rqv

APB's press release
http://tinyurl.com/27m9uw

ASIA PACIFIC BREWERIES LIMITED Financial statements
http://tinyurl.com/ynwzj9

Other corporate results reported on Aug 10
http://tinyurl.com/yto79w

Consolidated corporate results table
http://tinyurl.com/237ges


Revenue from overseas projects as well as new projects such as One St Michael's boosted revenue and PBIT from development property in Q3 to $412.8 million and $85.3 million respectively.

This represents increases of 41 per cent and 61 per cent respectively from Q3 2006.

PBIT from its commercial property division (comprising investment property and Frasers Centrepoint Trust) rose from $32.8 million a year ago to $34.9 million in Q3 this year.

Meanwhile, F&N's subsidiary Asia Pacific Breweries (APB) reported a 10.4 per cent increase in net profit attributable to shareholders to $30.6 million in Q3. Excluding exceptional items, it rose 3.9 per cent to $31.8 million.

This was on the back of a 22 per cent increase in revenue to $431.6 million.

Due to translation difference, gestation losses and non-recurring items, PBIT declined by 5.9 per cent to $61.3 million.

The non-recurring items include a one-time royalty adjustment in Vietnam in Q3 2006 which improved PBIT by $17.1 million then. Another item was a reinvestment credit in Q3 this year which added $4 million to Q3 2007's PBIT.

Said Koh Poh Tiong, chief executive of APB: 'This dilution in earnings was not unexpected and partly due to the gestation losses from our recent investments and new start-up breweries.'

He added that considering the potential of its regional investments, APB's earnings rates are expected to improve, as was the case with its first phase of regionalisation which began over a decade ago.

'Fundamentally, our business remains sound and we have continued to deliver stronger organic growth rates, driven mainly by our overseas operations,' said Mr Koh.

Region's Loan, Bond Volumes Down In July

Source : The Business Times, August 11, 2007

Sub-prime mortgage woes put the brakes on fund raising

SINGAPORE) Spooked by sub-prime mortgage fears in the United States, and the uncertain market conditions, corporates seem to have pulled back on their fund-raising activities. Contrast this with the picture just a few weeks back, when markets were cheering record merger & acquisition (M&A) deal sizes and huge liquidity was sloshing around.





















Syndicated loans - which are large loans provided by a group of banks - saw their volumes and numbers for the Asia Pacific region (excluding Japan) fall in July, from a peak in May and June (see table). Loan volumes and deals for August so far are also looking dim, according to data from Thomson Financial. Proceeds from bond issuances - which is also a measure of financing activity - have dipped in the month of July and August.

This credit squeeze has slowed the flood of debt financing that has driven the buyout boom for the past couple of years, said Thomson Financial. The months of May and June raised the most loan proceeds for the region but in July, the region experienced a 53 per cent decline in loan proceeds, with US$13.6 billion worth of loan proceeds and 62 deals done. So far, August has seen nearly US$3 billion worth of loans and four deals done.

Asia-Pacific bonds proceeds also reached record levels in May, with US$40.1 billion worth of bond issuances. But in July, bond proceeds dropped 58 per cent.

Perhaps this is symptomatic of the rising defaults on payments by sub-prime homeowners in the United States, leading to losses by hedge funds and banks investing in securities backed by these payments.

This has in turn driven up borrowing costs for companies and buyout funds, as creditors tighten conditions for lending and investors shy away from new debt issues.

Last month, US and European investment banks withdrew the sale of more than US$10 billion worth of loans needed to fund the private equity buyouts of US car-maker Chrysler and UK retailer Alliance Boots after failing to find buyers.

Industry watchers here say that the turmoil in the markets in recent weeks might be a temporary setback for financing activities.

'It could be that corporates are deferring their fund raising because credit spreads have widened,' noted Chua Hak Bin, an economist at Citigroup. 'Corporates and lenders don't like to go in when markets are still turbulent.' He said that markets will likely normalise in time. 'I think the sub-prime (problem) will probably not translate into a recession, but the problem could last maybe three to six months.'

Some bankers are still sanguine about the prospects, saying that the decline in loan volumes and deals were just a blip. 'M&A activity still continues to be very strong in Asia. Everybody is skittish, but we don't see any deals being pulled out,' said a local banker involved in loan syndication.

'There's still a lot of liquidity and the syndication market is still strong,' he noted.

Central Banks Move To Ease Credit Crunch

Source : The Business Times, August 11, 2007

Asian currencies and carry trades hurt as liquidity fears escalate

SINGAPORE) Asian central banks acted swiftly yesterday to calm renewed fears of a liquidity crunch in the financial markets, after both Asian favourites and the high-yielding currency duo Down Under came under heavy selling pressure.

As the jitters escalated overnight, the Bank of Japan was reportedly obliged to pump an extra one trillion yen (S$12.9 billion), or about US$8.5 billion worth, of funds into the Tokyo money market yesterday - lent until Monday - while the Reserve Bank of Australia supplied up to A$5 billion (S$6.4 billion) in extra liquidity, according to a Reuters report.

Other regional central banks were also quick to offer reassurances on both the liquidity and currency fronts, after Asian currencies tumbled nervously in response to another rush to close out speculative or risky trades - with central banks in Indonesia, Malaysia, the Philippines and Taiwan widely cited as US dollar sellers against their falling currencies.

Locally, the Monetary Authority of Singapore also made it clear that it would act against any liquidity bottlenecks, if necessary.

That, however, could not stop the Singapore dollar from sliding in tandem with its Asian neighbours - lifting the US dollar to a one-week high of S$1.5238.

This despite cheery National Day news that local growth had been revised higher to 7-8 per cent for 2007 (from 5-7 per cent before), or yesterday morning's revelation that Q2 GDP had grown an impressive 8.6 per cent year on year as well.

The painful fallout for Asian stocks and currencies yesterday followed more bad news out of both sides of the Atlantic on Thursday - which was serious enough to force both the European Central Bank (ECB) and the US Federal Reserve to inject unusually large amounts of liquidity into their respective money market systems.

UK-based currency research firm IDEAglobal reported that before the US session was over on Thursday, the Chicago Options Exchange's closely watched VIX measure of financial market volatility had surged to a four-year high of 26.9

Wire reports suggested that, as a result, the ECB was obliged to supply as much as 95 billion euros (S$197 billion) worth of overnight money market funds, and the Fed was said to have offered a larger than normal US$24 billion in US domestic money market operations.

But as this was just one-day money, traders also warned yesterday, short-term US dollars lent for 'tom-next' (another one-day loan of funds between next Monday to next Tuesday) were being offered only at 6 per cent or even higher by the time London had started trading yesterday - compared to the Fed's much lower reference rate of 5.25 per cent.

The ECB had to act for a second time in 24 hours, pumping more than 61 billion euros into the market.

Catalysing the renewed spike in financial market fears overnight was the news that French banking giant BNP Paribas had frozen redemptions on three funds valued at around 1.6 billion euros.

Thereafter, in US trading on Thursday, Wall Street's benchmark Dow Jones and S&P 500 indices each suffered a dreadful one-day loss of almost 3 per cent after a US investment bank acknowledged similar liquidity issues at another of its hedge funds, and already nervous traders were shaken by warning rumbles about two US home loan outfits too.

By the Asian close yesterday, jangled nerves had lifted the US dollar as much as 1.3 per cent higher to 45.75 Philippine pesos, while a 4 per cent slide in South Korea's Kospi stock index had boosted the greenback by 0.8 per cent to 931.8 Korean won - brushing aside an unexpected rate hike by the Bank of Korea just a day earlier.

Elsewhere in Asia, the greenback also finished the session between 0.4 and 0.6 per cent better off at S$1.5212, 9,340 Indonesian rupiah, 34.08 Thai baht and 3.4770 Malaysian ringgit - though nervous unwinding of carry trade positions had also forced the greenback one per cent lower to 118.08 yen at the same time.

Indeed, the worst 'bloodshed' yesterday was suffered by the high-yielding currencies Down Under. At their worst levels yesterday, the Australian and New Zealand currencies had each tumbled at least one US cent, 1.5 yen, and almost 1.5 Sing cents from the opening bell - before cutting back some losses.

In yen terms, however, this still left the Australian and New Zealand units a painful 2.4 and 3.3 per cent worse off compared to their Asian closes just two days earlier on Tuesday - at 99.85 yen and 87.96 yen respectively. In Singapore terms, this also left them 1.5 and 1.7 per cent weaker - at S$1.2883 and S$1.1331 respectively.

Looking ahead, UK investment bank Barclays Capital warned against attempting to buy the two on dips just yet, explaining that both the ECB and the Fed may well need to do more to stabilise short-term money markets, and this would impact currency prices too.

'For instance, part of the reason for the move lower in the euro yesterday was probably investors swapping borrowed euro funds into dollars, as the ECB had injected far more liquidity into the euro money market than the Fed did in the US dollar market.'

Sub-Prime Domino Hits Asia Again

Source : The Business Times, August 10, 2007

Painful pattern takes shape as US ripples exact their toll

(SINGAPORE) For the fourth time in two weeks, stock markets in Asia plunged following steep losses in the United States and Europe the previous trading day.












As the fallout from rising defaults in US sub-prime mortgages continues to spread, the Straits Times Index fell 53.99 points or 1.6 per cent to end at 3,359.18.

Earlier in the day, the index was down as much as 3.8 per cent before clawing back some ground.

A distinct pattern - that seems set to continue for some time - has been unfolding of late.

Each new piece of bad news related to the US sub-prime mortgage market has been followed by a plunge in the Dow Jones Industrial Average. This has invariably been mirrored the following trading day in Asia.

Fears of a global credit crunch hung over the US for the second day running as, shortly after opening yesterday, the Dow Jones index was down 124.8 points at 13,145.9.

Europe reflected the strain, too, as in London the FTSE 100 fell 3.1 per cent in morning trade, the Paris index was down 3 per cent and German shares slumped 1.6 per cent as fear of more bad news to come in credit markets gripped investors.

On Thursday, the trigger had been provided by French banking group BNP Paribas, which stopped withdrawals from three of its funds which own US sub-prime mortgages citing a 'complete evaporation' of liquidity.

Central banks across the globe have since been pumping in doses of liquidity to ease the crunch.

Here, the Monetary Authority of Singapore said it is monitoring developments in the markets and is ready to inject additional liquidity 'if the situation so warrants'.

Meanwhile, Fullerton Fund Management, a unit of Temasek Holdings, told Bloomberg that it has no direct exposure to US sub-prime loans and its investments in collateralised debt obligations or CDOs amount to less than one per cent of its total assets under management.

Over the past week, banks and asset managers here have sought to reassure analysts and investors by releasing details of their exposure to US sub-prime property loans through their investments in CDOs.

The sub-prime woes in the US have already caused several hedge funds to suspend withdrawals by investors, usually seen as a sign that the value of the assets they hold may not be enough to repay investors in full.

'The markets will remain volatile for a few more weeks. More hedge funds are going to have some terrible announcements to make,' said economist David Cohen at Action Economics. But he added: 'I wouldn't get too upset by the fact that the central banks were injecting liquidity today - they were just accommodating the public want to hold cash rather than stocks.

'That would have caused some cash-flow problems in the banking system, so they added some reserves. It's not as if they're bailing out the economy.'

In Asia-Pacific, stocks were again battered as all major markets in the region suffered losses.

South Korea saw the worst fall in percentage terms with a 4.2 per cent plunge, followed by Australia, where shares fell 3.6 per cent.

In Japan, the Nikkei 225 lost 2.4 per cent, while Hong Kong's Hang Seng Index fell 2.9 per cent. China's CSI 300 index slid 1.1 per cent.

In South-east Asia, the Kuala Lumpur Composite Index ended 2 per cent lower, while key indices in Thailand, Indonesia and the Philippines also lost 0.9-3.1 per cent.

MTI Credits Diversification For Strong Q2 GDP Growth

Source : The Business Times, August 11, 2007

Gains in biomedical and transport engineering more than make up for slack in electronics

Despite risks on the horizon, the Ministry of Trade and Industry is confident that the Singapore economy's strong first-half momentum - notably the robust 8.6 per cent second-quarter pace - will see it through the year.

The 8.6 per cent GDP growth - 0.4 of a point better than the advance estimate and 0.6 of a point higher than the market consensus - amounts to a blistering 14.4 per cent pace in seasonally adjusted, annualised terms. It is the fastest rate in eight quarters.

At a media briefing yesterday, MTI second permanent secretary Ravi Menon told 'the story behind the numbers' - how Q2's broad-based growth reflects a well-diversified economy - and fielded questions about the impact of the US sub-prime woes.

Both financial services and construction clocked up double-digit growth in Q2 (the building sector's 17.6 per cent rate is almost a decade-high), while manufacturing recorded healthy expansion despite an electronics downturn.

'One of the most exciting things about the current GDP cycle is how well the economy has done despite the slump in electronics,' said Mr Menon. 'Ten to 15 years ago, this would not have been imaginable.'

Now, strong growth in the biomedical and transport engineering industries has more than made up for the slack in electronics.

Financial services is seeing growth across credit-related and wealth advisory services, and construction growth is strong not only in the residential market but also the commercial and industrial segments.

'This broad-based growth momentum across the major sectors and within the sectors is one of the reasons for our higher (GDP) forecast of 7-8 per cent for this year,' Mr Menon said.

RELATED LINKS http://tinyurl.com/2tkgmd

MTI press release: Improved Outlook for 2007 As Growth Broadens and Economy Diversifies


The driving factors behind the higher forecast are diverse, he pointed out.

First, strong global demand for biomedical, aerospace and marine industry products, 'all not highly correlated with one another'.

Second, robust regional demand for financial services. And third, a buoyant domestic property market fuelling the construction sector.

'With greater diversification, the economy is becoming more resilient and less volatile in the face of industry-specific shocks,' Mr Menon said.

In any case, the official growth forecast does take into account the key growth risks - namely negative shocks from the US housing market and an oil supply crunch. 'The situation in the US credit market remains the most significant risk on the horizon,' Mr Menon said.

A general risk aversion could spread to other financial markets, and if that translates into increased volatility, consumption and investment growth could be hit globally, he said. So far, this scenario has not played out.

'Our sense is that if the situation worsens, it'll be some time before it creeps into the real economy,' he said. So, going just by the first-half momentum, 7-8 per cent growth for Singapore looks to be in the bag.

As HSBC economist Robert Prior-Wandesforde notes, even if GDP growth were flat in second-half 2007, the full-year average pace would still come to 6.9 per cent. An 8 per cent quarter-on-quarter pace annualised rise in Q3 and Q4 would produce 8.5 per cent for the year - well above the official forecast.

While HSBC is staying with its 8 per cent forecast for 2007 and 2008 pending 'further clarity on the fallout from the US sub-prime crisis', the risks, 'at least for this year, are once again on the upside', said Mr Prior Wandesforde.

Another economist, CIMB-GK Securities' Song Seng Wun, is also keeping his 7.5 per cent growth forecast for the year despite the risks. 'As long as we continue to see job and income growth, there should be sustained growth in domestic demand,' he said.

Indeed, private consumption finally perked up in Q2, growing 5.8 per cent, while investment surged by 26 per cent.

And the leading indicators bode well: The composite leading index rose 3.4 per cent in Q2 from Q1, and 8 per cent year-on-year.

Sample Schedule for Deferred Payment & Progressive(Standard) Payment Scheme




What Is A Collective Sale (En Bloc)?

Source : The Business Times, 22 Mar 2007

A collective sale (or more commonly termed en-bloc sale), is a combined sale by the owners of 2 or more property units to a common purchaser.

The most common en-bloc sale is the sale of all the units in a strata or flatted development to a purchaser. The sale proceeds are then divided amongst all the unit owners.

Other variations of en-bloc sales include the sale of all units in a development together with an adjoining development or landed properties.

WHAT DO THE AMENDMENTS TO THE LAND TITLES (STRATA) ACT COVER?

Before the amendments, an en-bloc sale of all the units in a strata or flatted development could take place only if all the unit owners agreed.

The amendments provide that if a specified majority of unit owners in a strata or flatted development agree to an en-bloc sale and meet the requirements of Part VA of the Act, they may apply to a Strata Titles Board for an order that all the units and the land in the development be sold.

WHAT ARE THE TYPES OF DEVELOPMENTS FOR WHICH AN APPLICATION CAN BE MADE FOR AN ORDER FOR EN-BLOC SALE UNDER PART VA OF THE ACT?

The developments for which an application can be made for an order for en-bloc sale by majority agreement are:

Strata developments registered under the Land Titles (Strata) Act;

[Section 84A]

Strata or flat developments where the owners of the flats also own a share in the land and the leases for their flats are registered under the Registration of Deeds Act or the Land Titles Act; and

[Section 84D]

Strata or flat developments where the owners of the flats own a registered leasehold estate of 999 years or more (or such other leasehold period as the Minister may specify) but they do not own the land in the development. The leases for the flats may be registered under the Registration of Deeds Act or the Land Titles Act.

[Section 84E]

As there are no share values or shares in land assigned to flats in such developments, the owners of at least 25% of the total number of flats in the development must apply to the Registrar of Titles for notional shares in land to be assigned to their individual flats to facilitate calculation of the majority agreement.

[Section 84E(2)]

WHAT IS THE REQUIRED MAJORITY WHICH MUST BE OBTAINED BEFORE AN APPLICATION CAN BE MADE?

If a development is less than 10 years old [calculated from the date of the issue of the latest Temporary Occupation Permit (TOP) (or Certificate of Statutory Completion (CSC) if no TOP)], the owners of 90% of the share values, share in land, or notional share in the land must agree in writing to sell all the units and common property or land to a purchaser under a sale and purchase agreement (subject to an order of the Strata Titles Board); and

[Sections 84A(1), 84D(2) and 84E(3)]

If a development is 10 years old or more [calculated from the date of the issue of the latest TOP (or CSC if no TOP)], the owners of 80% of the share values, share in land, or notional share in the land must agree in writing to sell all the units and common property or land to a purchaser under a sale and purchase agreement (subject to an order of the Strata Titles Board).

[Sections 84A(1), 84D(2) and 84E(3)]

Note: The date of issue of the TOP or CSC may be obtained from the Building Plan Department, Building and Construction Authority at 5 Maxwell Road #16-00 Tower Block, MND Complex, Singapore 069110 (Tel No: 63251586, Fax No: 63251607).

WHAT ARE THE STEPS WHICH THE MAJORITY OWNERS MUST TAKE BEFORE SUBMITTING AN APPLICATION?

1. Hold at least one Extraordinary General Meeting to consider the en bloc sale.

[4th Sch. Para. 1(a)]

2. Appoint not more than 3 owners to represent the majority owners in connection with the application.

[Section 84A(3)]

3. Obtain a valuation report for the whole development which must not be more than 3 months old when the application is made.

[4th Sch. Para. 1(c)]

4. Obtain a report by a valuer on the proposed method of distributing the sale proceeds.

[4th Sch. Para. 1(c)]

5. Advertise the particulars of the proposed application in the local newspapers, as approved by the Board, in the 4 official languages.

[4th Sch. Para. 1(b)]

The advertisement must include:

(i) information on the development;
(ii) the names of all the unit owners and their addresses, unit addresses and their strata lot numbers, if any;
(iii) the names of the mortgagees, chargees and other persons with an estate or interest in the units;
(iv) brief details of the sale proposal; and
(v) the place at which the relevant parties can inspect the documents for the en-bloc sale.

[4th Sch. Para. 3]

6. Prepare the application to be made to the Board. A copy of the application form may be obtained from the Land Titles (Strata Titles Boards) Regulations 1999 or downloaded from this website. The form is also available at the office of the Strata Titles Boards at 45 Maxwell Road #01-11, East Wing, The URA Centre, Singapore 069118 (Tel: 63251586, Fax: 63251607).

7. Serve a notice of the proposed application (”the notice”) to all the owners of the units by registered post and by placing a copy under the main door of every unit and to the mortgagee, chargee or other person (other than a lessee) with an estate or interest in the unit and whose interest is notified on the land register for the unit by registered post. [For the address of service by registered post, please see paragraph 10]

The notice must include a copy of:

(i) the advertisement referred to in paragraph 5 above;
(ii) the sale and purchase agreement;
(iii) a statutory declaration made by the purchaser on his relationship, if any, to the unit owners;
(iv) the valuation report referred to in paragraph 3 above;
(v) the report by a valuer on the proposed method of distributing the sale proceeds referred to in paragraph 4 above; and
(vi) the minutes of the extraordinary meeting referred to in paragraph 1 above.

[Section 84A(4), 84D(3) and 84E(5)
4th Sch. Para. 1(c)]

Affix a copy of the notice on the main door of the units whose owners have not agreed in writing to the sale.

[4th Sch. Para. 1(d)]

Affix a copy of the notice, in the 4 official languages, to a conspicuous part of each building in the development.

[4th Sch. Para. 1(e)]

The notice to be served by registered post shall be served on a party:

(i) where the party is an owner of a unit registered under the Land Titles (Strata) Act, at the address as shown on the strata roll;
(ii) where the party is an owner of a unit not registered under the Land Titles (Strata) Act, at the last recorded address at the Singapore Land Registry;
(iii) where the party is a mortgagee, chargee or other person with an estate and interest in the unit whose interest is notified on the land register, at the address on the strata roll or last recorded address at the Singapore Land Registry; and
(iv) where the party is a management corporation, at its address as shown in the Singapore Land Registry.

[4th Sch. Para. 2]

WHAT IS THE PROCEDURE FOR APPLYING?

The application for en-bloc sale must be made using the prescribed form within 14 days of the publication of the advertisement. The application

is to be made by way of a statutory declaration by the representatives appointed by the majority owners, stating that the relevant provisions of the

Act have been complied with. The application is to be submitted at the office of the Strata Titles Boards, 45 Maxwell Road #01-11, East Wing, The URA Centre, Singapore 069118 (Tel No: 63251586, Fax No. 63251607).

The application must include the following:

(i) the documents set out in paragraph 7;
(ii) a list of the names of the unit owners who have not agreed to the sale in writing, their mortgagees, chargees and other persons (other than lessees) with an estate or interest in the flats whose interests are reflected in the land registers;

[4th Sch. Para. 4]

(iii) such other documents that the Board may require; and

[4th Sch. Para.6]

(iv) an undertaking to pay the costs of the Board in relation to any valuation or other reports called for by the Board.

[Section 84A(3)]

WHAT OTHER DOCUMENTS DO THE MAJORITY OWNERS NEED TO FILE?

After submitting the application at the Strata Titles Boards, the applicants must lodge a copy of the application, in the approved form, for registration at the Singapore Land Registry. A copy of the forms can be downloaded from the website of the Singapore Land Registry at http://www.gov.sg/molaw/slr.

[4th Sch. Para. 6]

HOW CAN A MINORITY OWNER OR HIS MORTGAGEE, CHARGEE, ETC, FILE AN OBJECTION TO THE EN-BLOC SALE APPLICATION?

A unit owner who has not agreed to the sale in writing, his mortgagee, chargee or other person with an estate or interest in the unit may, within 21 days of the date of the notice for en-bloc sale, file an objection in the prescribed form with the Strata Titles Boards.

[Sections 84(A)(4), 84D(3) and 84E(5)]

The Board will, within 5 days of the filing of an objection, forward a copy of it by registered post to the representatives appointed by the majority owners and their lawyers, if any.

[4th Sch. Para. 5]

WHAT ARE THE FACTORS WHICH THE BOARD WILL TAKE INTO ACCOUNT IN DECIDING ON AN APPLICATION?

Where no objection is filed against the application, The Board will approve the application unless, after going through the application, it is satisfied that the transaction is not entered into in good faith, after taking into account:

(i) the sale price for the whole development;
(ii) the method of distributing the sale proceeds; and
(iii) the relationship of the purchaser to any of the flat owners.

The Board will not approve an application if the sale agreement requires any unit owner who has not agreed in writing to the sale to be a party to any arrangement for the redevelopment of the property.

[Sections 84A(9), 84D(7) and 84E(9)]

Where objections are filed against the application, The Board will consider all the factors in paragraph 1 above and the objection and may call for mediation.

The Board will not approve an application if it is satisfied that:

(i) the unit owner who objects to the sale will suffer a financial loss; or
(ii) the sale proceeds to be received by a unit owner, his mortgagee or chargee, are insufficient to redeem any mortgage or charge against theflat.

Note 1: A unit owner will be considered to suffer financial loss if the sale proceeds for his unit, after any deduction allowed by the Board, are less than what he paid for the unit.

Note 2: A unit owner will not be considered to suffer financial loss because his net gain from the sale will be less than the other unit owners.

[Sections 84A(8), 84D(5) and 84E(7)]

WHAT ARE THE EFFECTS OF AN ORDER OF THE BOARD FOR EN-BLOC SALE?

Owners of units and land

An order for en bloc sale issued by the Board is binding on all the unit and land owners of the development (including their successors in title and assigns), their mortgagees, chargees and persons with an estate or interest in the units and land (including lessees).

Under such an order, all the unit owners must sell their units (together with the land) to the purchaser in accordance with the sale and purchase agreement. They must produce the certificates of title and relevant title deeds to the representatives appointed by the majority owners for the purpose of the sale.

[Section 84B]

Owners of land in an application under section 84E where the unit owners of a 999-year registered leasehold estate do not own a share in the land Where the Board makes an order for the en-bloc sale of the units and the land, the owner of the land (or reversion) will be deemed to have transferred his estate and interest to the land to the purchaser upon the registration by the Registrar of the transfers of all the units in the development and the Registrar shall enter a notification of the vesting of the land in the purchaser on the land register.

[Section 84E(10)]

Effect on leases of the units

A lease against any of the units (other than the lease held by the unit owner) shall, unless there is an earlier agreed date, determine on the date on which vacant possession is required to be given to the purchaser.

The order does not prejudice the lessee’s right to any compensation from the unit owner. However, only unit owners who have not agreed to the sale in writing or their lessees can apply to the Board to determine the amount of compensation payable.

[Section 84B]

CAN THE MAJORITY OWNERS APPLY TO THE BOARD TO APPOINT A THIRD PARTY TO ACT FOR CERTAIN UNIT OWNERS IN THE SALE?

The representatives appointed by the majority owners may apply to the Board to appoint a person to deal with all matters pertaining to the sale of a flat where:

(i) the unit owner has died and no personal representative has been appointed; or
(ii) in any other case as the Board may think fit.

[Section 84C]

WHO CAN APPEAR IN A HEARING BEFORE THE BOARD?

Where a Board has appointed a date for hearing, it will, where necessary, give to all parties to the dispute or matter a notice of the hearing.

[Regulation 9(1)]

A party entitled to appear before the Board may appear in person or may be represented by his lawyer or such other person as the Board may allow and who may examine witnesses and address the Board on behalf of the party.

[Section 110]

Source : Ministry of Law

The ABCs of en bloc sale

JEREMY LAKE answers some of the commonly asked questions on the collective sales process

The Singapore residential market is witnessing the third wave of collective sales, with a hive of transactions in 2006 and the highest volumes recorded in the last decade. The two other waves occurred in 1994-1997 and in 1999-2000.

This third wave is significantly different from the previous two waves in two aspects. One is the wider and more diverse pool of players. Back in 1999-2000, the market was dominated by a couple of locally listed companies. Now, this has expanded to include foreign funds, private equity groups and institutional players. Previously, such funds have focused on the retail and office sectors.

The other emerging trend is the faster turnaround from the purchase of sites to the launch of projects. The trend these days is for purchasers to buy, seek the necessary approvals and sell quickly, as opposed to adopting a wait-and-see approach. Many of the collective sale sites purchased in the last two years can be expected to be launched this year.

The key challenge for en bloc sales committees is in getting the 80 per cent consensus. Sales committee members are finding it more difficult to persuade owners to sign on the dotted line, as owners anticipate higher asking prices. (Note: The government will be seeking feedback for proposed changes to the process. Among them is getting consent from owners of at least 80 per cent of units in a development, in addition to the existing requirement of a nod from owners with at least 80 per cent of share values.)

We answer some of the commonly asked questions on the en bloc sales process.

Q: When is an en bloc sale feasible?

A: If the land value of your property is higher than the total value of the individual apartments, offices or houses combined, it means your property has redevelopment potential and you may well profit from a collective sale. These are the most common situations where a collective sale might be possible:
Where the land use has been changed. For example, when use has been changed from landed to high-rise, as a result of re-zoning under the Master Plan. Changes were made to the Master Plan by the Urban Redevelopment Authority in 1993/1994 which sparked a series of collective sales.
Where the Master Plan provides for an increase in plot ratio.
Where the existing development has not fully utilised the allowable plot ratio. This is especially true of older apartment buildings built before 1985.

Q: How does one work out a collective sale agreement?

A: The land price which a purchaser pays is shared among the owners in a pre-determined method. The collective sale premium is the difference between the collective sale price and the most recent transaction of the same unit type in the open market.

Q. What are the methods of apportionment?

A: The Singapore Institute of Surveyors and Valuers (SISV) recommends five methods of apportionment:
Share value
Strata area
Average of share value and strata area
Valuation and share value excess
Any other method

The guidelines provide for any other method - so any combination of the above methods is acceptable, as long as it is fair and equitable. There are no distinct pros and cons of one method over the other. But owners should consider various factors including the individual unit size.

For example, the share value method favours small units while the strata area method favours units with large areas. Share values and strata areas are facts that are available in your title deeds, so any method involving these two values is less contentious. Usually the property consultant will advise the sales committee on an appropriate method depending on each development’s unit composition.

Q. How are owners of mixed developments apportioned their share?

How complicated is determining apportionments for owners of mixed developments over residential developments?

A: The number of collective sales for mixed developments is limited to date. The share of apportionment is a bit more complicated to determine in mixed developments where there are retail and office components. One needs to consider factors such as frontage of units and human traffic.

Q: Under what circumstances may disputes arise?

A: For example, if you have a collective sale of a shopping mall, the ground floor shops command a higher price than other floors, but others on the second floor beside the escalator will demand the same or a higher price than the ground floor back corner unit.

Q: How important are valuations in the settlement of disputes?

A: Valuations are subjective and different people will have different views on it. An owner may have three different valuers which give similar values but an owner may still disagree with it.

Q: Can CPF funds be included as financial loss?

A: Based on the latest Strata Titles Board (STB) judgment for the Waterfront View case, interest on CPF funds cannot be included as financial loss. If the board waives or does not require the owner to top up the account, it is not considered financial loss.

Q: What are the steps involved if you’d like to do an en bloc sale in your estate?

A: A group of interested owners can get together to form the pro-tem sale committee (PTSC). They can contact a property consultant to evaluate the potential. Then, the PTSC can appoint the property consultant and lawyers, who will then advise them on the process forward. (Note: The government is proposing that en bloc sale committees be formed only at extraordinary general meetings convened by management corporations.)

Q: How does one select a good agent?

A: A collective sale is a complex process and there are many pitfalls to be avoided. A good agent should help you to:
Confirm the development potential of your property
Assess accurately the land value and compare it with the value of the individual apartments, houses, shops or offices
Recommend a minimum price
Aggressively market the property in Singapore and internationally, to maximise the sale price
Advise on and coordinate the signing of the collective sale agreement
Help owners find replacement properties
Advise on the legislation and how to apply to the Strata Titles Board for approval of the collective sale.

Q: How long does the entire process take?

A: By legislation, the sale committee has 12 months to obtain the 80 per cent and a further 12 months to make an application to the STB for approval. The STB usually approves the application within four to six months. Thereafter, the owners will receive their payments within three months. They will have another four to six months to vacate the premises.

The writer is executive director, investment properties, at CB Richard Ellis

More FAQ can be found at http://www.redas.com/HTML/ePropFAQs/en-bloc.html

Documents Require For Applying A Housing Loan & Refinancing An Existing Mortgage Loan

Below are the documents required for buyers applying a Housing Loan

1. Attached application form duly signed
2. CPF statement of account
3. CPF 15th month contribution history and latest computerised payslip
4. Latest income tax notice of assessment (2005)/2 yrs income tax assessment for self employed
5. Copy of NRIC (Valid Passport, for foreigners)

If there is an existing property that is currently for sale/sold or if bridging loan is required:

1. CPF property withdrawal statement
2. HDB 18 months mortgage loan statement or last 6 months housing loan statement
3. Option To Purchase if property is already sold



Refinancing Mortgage Loan

Most housing loans granted charge lower interest rates for first 2 years and thereafter higher interest rates. Thus, you might be able to save substantially by refinancing your housing loan.

Here are a few considerations to take into account when refinancing your mortgage :-

1. Interest rates after the promotion

Borrowers should particularly note the bank’s interest rate after the “promotional” years. This is especially relevant if the property owner does not expect to sell his property within 10 years of buying it. Most banks peg the rates at a discount off their housing rate or at a markup from their prime rate. Almost no bank will fix the interest rate for a loan beyond the first 5 years.

2. Early redemption penalty on current loan

Ensure current mortgage is not under the lock-in period as stated in the current loan’s T&C. To a bank, committing to a housing loan means setting aside a large sum of money for a long period of time and much paperwork. As such, almost all banks will impose a penalty for borrowers repaying the loan and redeeming their mortgage within the first few years. Typically, the penalty is set at 1% of the housing loan amount. However, it is common practice that banks impose a longer/higher penalty if their promotional package is especially attractive.

3. Cash Top-Up

The current outstanding loan amount must not be greater then the valuation of the property. If your property has lost a lot in value since you took your existing loan you may find the new loan quantum substantially lower than the original amount. It may not be enough to pay off your current loan, which means you may need to come up with cash to bridge the difference. Generally, bank will refinance about 80% to 90% of the current valuation of the property.

P.S : If you need any help in finding a Bank, do give me a ring or drop me an email.

Vita Holdings, CapitaLand Ride The Vietnam Wave

Source : Weekend TODAY, August 11, 2007

WITH a growing middle class, Vietnam is increasingly luring investors. And two Singapore developers have announced building projects this week.

CapitaLand said on Friday that it plans to build upmarket homes in Ho Chi Minh City —its third residential project there. Also, Vita Holdings is planning a 5-star hotel in the Vietnamese capital.

“Vietnam has seen its GDP grow by close to 8 per cent in the first half of this year, the highest in five years,” said Mr Lui Chong Chee, CEO of CapitaLand Residential.

“The strong growth has translated into an increased demand for luxury homes among the affluent local professionals and rising number of expatriates in the country,” he added.

CapitaLand has around 1,600 homes in Ho Chi Minh City in the pipeline. It is targeting the niche expatriate and highnet-worth Vietnamese segment by developing a gated community that includes shared recreational facilities and 24-hour security services.

Through its subsidiary CapitaLand (Vietnam) Holdings, CapitaLand will take a 75-per-cent stake in the joint venture for US$31.5 million ($48 million). Vietnamese company Azure City Co Ltd, an infrastructure and property developer, will hold the remaining stake of 25 per cent.

The venture includes 300 villas on the 11.7-hectare site and is expected to launch by the third quarter of next year.

Residential properties aside, the country is also facing a shortage in upmarket hotels. Vita will develop a US$41.5-million, 5-star hotel in the country, through a 65-percent stake in a joint venture with Dai Viet Trading Co.

The Singapore Exchange-listed diversified group with interests in property leasing and management, shipping, and coal trading is expected to invest US$17 million in the project while Dai Viet Trading will contribute the land lease.

According to an industry observer, “it is a good time to enter the Vietnamese market. With the potential gains they can make, it represents good value for the long term player”.

Mr Nicholas Mak, Knight Frank’s director of consultancy and research, said, “The country’s entry into the WTO (World Trade Organization) will also see an increase in trade and business. That means more foreigners will come and they will need accommodations.”

Mr Mak added: “The Vietnamese people will get wealthier and their standards of living will increase.”

According to Standard Chartered Bank, foreign direct investments into Vietnam could hit US$10 billion by the end of the year.

Fraser & Neave 3Q Net Profit Rose 29 Per Cent

Source : Weekend TODAY, August 11, 2007

Fraser & Neave said third-quarter net profit rose 29 per cent on year due to strong contributions from its food and beverage and property businesses.

Profit in the three months ended June 30 was $96.5 million, up from $75.9 million last year.

Revenue was up 41 per cent to $1.3 billion from $916.5 million previously.

STB Confident Of FIA Green Light

Source : Weekend TODAY, August 11, 2007

Construction of street circuit to start next month, pending FIA approval























According to the Singapore Tourism Board (STB), the project will be carried out in phases and is expected to be completed by the end of May next year, four months before the Singapore Grand Prix on Sept 28.

In a statement on Friday, the STB said that work will include the construction of a paddock area and a 1.2-km stretch of road near the Singapore Flyer.

Some sections of the 5-km street circuit will also be widened.

The Sept 28 race is currently on the provisional calendar of the Federation Internationale de L'Automobile (FIA), the world motor sport body, for next season. The race will be confirmed once the street circuit is approved.

The STB expects the green light to come early next month. "Work will begin immediately after that, sometime in the middle of next month, and it will be carried out in phases to minimise inconvenience to the public," said an STB spokesperson.

More than 70 per cent of the circuit, which will wind around Marina Bay as well as the Padang, is made up of the existing road network.

Once completed, the paddock, which is located in front of the Singapore Flyer, will house the control tower, garages for teams, hospitality lounges and a media centre.

An underground entrance to the area will also be constructed.

According to Mr Lim Neo Chian, STB deputy chairman and chief executive, some modifications were made to the original street plan that was revealed to the public in May.

He added: "At the same time, we are combing through the details for the rest of the infrastructure works, such as finalising the design concept and the construction schedule of the paddock building.

"We are confident that both the circuit and paddock building will be officially endorsed very soon."

Mr Colin Syn, the deputy chairman of Singapore GP, the promoters and organisers of the race, said the track layout "hasn't changed dramatically".

But the circuit plan finally resembles a proper racetrack, with all the attendant infrastructure marked in.

Withdrawal Of 1998 Off-Budget Concession On Stamp Duty Deferment

Source : INLAND REVENUE AUTHORITY OF SINGAPORE, 15 December 2006

A concession to defer Stamp Duty payment on all contracts was introduced in June 1998 as part of the off-budget measures to cushion the impact of economic slowdown. The Government has decided to withdraw the concession with immediate effect (from 15 December 2006) as the economic conditions and the property market have improved.

The concession allows property buyers to pay the Stamp Duty at a later date. For newly constructed properties, the due date is the date of Temporary Occupation Permit (TOP). For completed properties, the payment is due when the property sale is completed.

With the withdrawal of the concession on 15 December 2006, the normal treatment would apply, that is, a property buyer is required to pay Stamp Duty within 14 days from the date of acceptance of the Option to Purchase.

However, buyers who have accepted their Options to Purchase before 15 December 2006 are not affected by the new rule. They would continue to enjoy the Stamp Duty deferment concession.

As a transitional measure, buyers who accept the Option to Purchase or sign the Sale & Purchase Agreement between 15 and 31 December 2006, will have up till 14 March 2007 to pay the Stamp Duty without any penalty. These buyers are required to complete and send a prescribed form to the Commissioner of Stamp Duties within 14 days after accepting the Option to Purchase or signing the Agreement. The form is available at IRAS website.

Taxpayers who have any queries may call IRAS on 6351 3697 or 6351 3698. Or they can email to estamp@iras.gov.sg.

Guidelines On Singapore Private Residential Property Financing & Other Expenses

Reference : Monetary Authority of Singapore (MAS)

Can I take a loan if I am a foreigner?

As an established real estate agency, we can help you secure a loan for property purchase from one of the major banks.


What is the maximum financing (loan) amount?

As a foreigner earning foreign income, you can loan up to a maximum of 80% of the purhcase price of the property subject to property valuation by the lenders. From our experience, majority of our clients can secure loans of 70%.


What are the types of bank loan available?

The loan can be fixed rates or floating rates.


What are the other expenses involved in investing in Singapore properties?

Legal fee - You have to pay for a one-time legal fee of about $3000 SGD per transaction. However, the bank usually provide full legal subsidy if you take up a loan subject to the bank's terms and conditions.

Renovation costs - You may want to renovated your property.

Furnishing costs - You may have to purchase furniture and electrical appliances if you intend to lease out your property for rental income.

Guidelines On Singapore Private Residential Properties Taxation

Reference : Inland Revenue Authority of Singapore (IRAS)

What kind of tax do I have to pay for purchase of private residential property?

All purchasers have to pay a stamp duty tax equal to (the purchase price x 3%) - $5,400.

For example, a $1mil SGD property
= $1,000,000 x 3% - $5,400
= $30,000 - $5,400
= $24,600

The stamp duty tax is payable upon completion of the property transaction.


What are the Property Tax Rates?

4% of annual value for owner-occupied properties
10% of annual value for 2nd properties and others (if any)

The annual value is determined by Valuation Review Board of the IRAS usually based on a average rent of similar properties.

The property tax is payable upon 1 month from the completion of the purchase of property and every January subsequently.


Do I have to pay capital gain tax?

Currently, there is no capital gain tax. In fact, the Singapore government encourages foreign investments in property.


Rental Income
1. How do I declare rent income received from my property?

You have to report the total rent received from the tenant. Total rent includes charges on the property, the furniture and fittings and service charges.

If you are claiming expenses on the property, you need to show the details of the expenses claimed. Generally, you can only claim expenses incurred during the period of tenancy. Expenses incurred outside the period of tenancy cannot be claimed. However, if you can show intention to let out the property, we may consider the expenses.

The total rent and deductible expenses claimed must be reported when filing your income tax. You will be taxed on the net rent, which is the total rent less total deductible expenses.


2. What expenses are deductible from my rent/net annual value (NAV) for income tax purposes?

The following are deductible for income tax purposes.
· interest on your mortgage loan
· property tax
· fire insurance on your property
· repairs and maintenance which can include painting, pest control, and monthly maintenance charges to management corporations
· commission paid on getting a subsequent tenant
· cost of renewing a lease or getting a new tenant (except for the first tenant)

The following are NOT deductible for income tax purposes.
· mortgage or bank loan repayments
· agent's commission, advertising, legal costs, for getting the first tenant
· depreciation of furniture and fixtures
· costs of renovation, additions, and alterations to your property, for example extension of car porch, construction of drains, cementing of walls and floors, and installation of window grilles


3. Do I need to submit receipts and documents together with my income tax form to support my claim for deductible expenses?

You do not need to submit supporting documents together with your income tax form. You are however, required to keep these documents for 7 years for verification purposes.


4. If my total rent is less than my deductible expenses, do I need to report my loss in rent in the income tax form?

Yes, you have to report your total rent and details of the deductible expenses in your Income tax form even if you made a loss in rent.


5. Can I deduct last year’s loss in rent against this year’s gain in rent or against other income?

No, you cannot deduct the loss in last year’s rent against this year’s rent. You also cannot offset the loss in rent against any other income you may have.


6. I own two properties. Can I deduct my loss in rent from property A against the gain in rent from property B?

Yes, you can deduct the loss in rent from property A against the gains in rent from property B if both properties are treated as a single source of income for the same calendar year. You will only be taxed on the net gain from these two properties. If the final amount is still a loss, you cannot offset this loss in rent against any other income you may have.


7. I own a property with my brother at half share each. We received rent of $6,000 for Jun-Dec 2002 and $30,000 for Jan-Dec 2003. The expenses were $7,500 for Jun-Dec 2002 and $17,000 for Jan-Dec 2003. Hence, we have made a loss of $1,500 for Jun-Dec 2002 and a gain of $13,000 for Jan-Dec 2003.

a. Can I report all the rent from Jun 2002 - Dec 2003 in the Income tax return for Year of Assessment 2004?

No. You need to apportion the total rent and the deductible expenses according to your share in the property for each calendar year. You need to show separately how you arrive at the loss or gain in the Income tax return for Year of Assessment 2003 and again in the Income tax return for Year of Assessment 2004.

b. Can I report all the rent under my name?

No. As your brother is a co-owner of the property, he must also report his share in his Income tax form.

You will have to declare the rent according to your share in the property. Since you and your brother each own a half share of the property, you will report a loss of $750 ($1,500 / 2) in the Income tax return for Year of Assessment 2003 and a gain of $6,500 ($13,000 / 2) in the Income tax return for Year of Assessment 2004.


8. My tenant paid the rent for Oct-Dec 2003 only in Jan 2004. Do I include this amount in my Income tax return for Year of Assessment 2004?

Yes. You need to include this amount as the rent was due to you in 2003. It does not matter if the rent was received at a later date.

If you have already submitted your Income tax return for Year of Assessment 2004, you can write to IRAS informing us of the rent you received.


9.What is the tax rent for rent income?

Rent income is taxable at 20% with effect from 2005.

Guidelines On Foreign Ownership of Singapore Private Residential Properties

What is non-restricted residential property under the Residential Property Act?
In general, foreigners are not restricted from buying any apartment within a building; any flat or dwelling-house in an approved condominium development under the Planning Act. However, a foreign person is not allowed to buy all the apartments within a building or all the units in the condominium development.

What is restricted residential property under the Residential Property Act?

Foreign persons (including natural persons, companies and societies) are restricted from purchasing restricted residential property within the meaning of the Residential Property Act. Such property includes:

-vacant residential land;
-landed property [i.e detached house, semi-detached house, terrace house (including linked house or townhouse)]; and
-landed property in strata developments which are not approved condominium developments under the Planning Act.

Approval will have to be obtained from the Minister for Law to purchase a restricted residential property.

The Land Dealings (Approval) Unit administers the provisions of the Residential Property Act and its rules by:

-processing applications from foreign persons and foreign companies for approval to acquire or retain restricted residential property;
-issuing clearance certificates to Singapore companies and societies;
-prosecuting offences under the Residential Property Act; and
-dealing with general enquiries relating to the operation of the Act.

Under the Act, a foreign person is defined as a:

-person who is not a Singapore citizen:
-foreign company; and
-foreign society.

If you are a foreign person and are interested in purchasing a restricted residential property, you need to download the approved form from the SLA website. You can then submit the form together with the relevant supporting documents such as your entry and re-entry permits and qualifications to:

Land Dealings (Approval) Unit
Singapore Land Authority
8 Shenton Way
#27-02
Temasek Tower
Singapore 068811

Cash Transfusions To Keep Markets Pumping

Source : weekend TODAY, August 11, 2007

CENTRAL banks across the Asia-Pacific on Friday joined a global effort to restore calm to financial markets and ward off a full-blown credit crunch, even as tumbling Asian stocks mirrored sharp falls across global bourses.

The Bank of Japan (BOJ) injected one trillion yen ($12.9 billion) into the money market, while Australia's central bank pumped US$4.2 billion ($6.3 billion) into the banking system, more than twice the daily average.

Besides Singapore, South Korea's central bank, too, sought to soothe jittery markets by promising it would "promptly act" if needed — as global share prices fell amid alarm that the fallout from the United States sub-prime mortgage problems might be spreading.

Meanwhile, the European Central Bank (ECB) pumped even more money into the eurozone banking market on Friday — taking its cash injections to 155.85 billion euros ($325 billion) in two days.

Worries about the US mortgage market have caused liquidity to dry up in money markets as private banks withhold funds, prompting central banks to offer extra cash. The main concern is that if the banks become increasingly reluctant to provide funds, the broader economy will slow since businesses will not be able to finance their operations.

If that happens, there could be knock-on effect as spending and employment fall, which could prompt central banks to cut interest rates to try to head off the risk of a recession.

The move by central banks came after French bank BNP Paribas said it was freezing three funds that had exposure to US sub-prime mortgages, prompting overnight interest rates in the US and Europe to shoot up. On Thursday, the ECB had pumped in an initial sum of 94.8 billion euros — more than it did after the 911 attacks on the US rattled financial markets.

But news of the various central banks' cash injections only seemed to add to the nervousness of global markets.

The plunge in share prices spilled over into Asia. Instead of being reassured by central banks' measures, Okasan Securities strategist Hirokazu Fujiki said, investors "took it the other way ... That is, the problem is so big that the central banks had to intervene".

In Tokyo, where share prices on Friday closed down 2.37 per cent at a near five-month low, market players nevertheless welcomed the BOJ's action.

"It's about money flows ... The heart would stop beating if it does not have blood flowing," said a broker at a Japanese securities firm.

In South Korea, officials sought to reassure local investors but without marked success. The stock market closed down 4.2 per cent, the biggest percentage fall in over three years.

Sydney slumped 3.7 per cent, Hong Kong closed down 2.88 per cent, Taipei lost 2.74 per cent and Shanghai ended down 0.1 per cent.

"The fear is feeding on itself," Mr Jeffrey Kleintop, chief market strategist at LPL Financial Services, told Bloomberg. "It's what you don't know that seems to be taking over the market."

The Malaysian ringgit fell to a six-week low as investors reduced holdings of emerging-market assets. Nine of the 10 most-active Asian currencies fell, according to data compiled by Bloomberg.

But analysts said that, so far, the impact of the US housing sector woes on overall economic growth still appeared to be contained, particularly in Asia.

"I think the risk to global growth at this stage is still not significant," said Societe Generale's chief Asia economist Glenn Maguire. "We're seeing central banks do what is appropriate, and that's to supply precautionary funds to the market." — AGENCIES

US, EURO SHARES DOWN

The United States Federal Reserve pumped US$19 billion ($28.9 billion) into the banking system before stock markets opened on Friday – on top of the US$24 billion added on Thursday – and said it was prepared to inject fresh liquidity if necessary.

Even so, US shares opened sharply lower. As of 9.35am in New York, the Standard & Poor’s 500 Index lost 0.9 per cent to 1440.5, the Dow Jones Industrial Average fell 0.8 per cent to 13,162.97, while the Nasdaq Composite Index slid 1.3 per cent to 2524.06.

Countrywide Financial Corp, the biggest US mortgage lender, fell the most since 1987 after saying investor demand for its loans had dried up. Citigroup Inc, the largest US bank, and Goldman Sachs Group Inc, the biggest securities firm, also dropped.

Europe’s main stock markets, too, slumped further. London’s FTSE 100, for instance, shed 2.62 per cent in late morning trading.

$30m To Restore UNSW Site

Source : Today, Thursday, August 9, 2007

THE University of New South Wales (UNSW) might have to spend up to $30 million to restore the condition of the plot of land in Changi — meant for its campus — before handing it back to the Singapore Government.

A UNSW Asia academic told The Australian newspaper yesterday that the Singapore Land Authority and Jurong Town Corporation (JTC) wanted UNSW to remove 857 steel and concrete pilings from the site, situated next to the Singapore Expo. This could cost up to $30 million.

The report comes less than a week after the Economic Development Board (EDB) confirmed it is trying to reclaim $17.3 million in grants to UNSW. The university has said it is in danger of liquidation, which means the EDB may have to write off the grants if UNSW Asia declares itself insolvent.

When contacted, JTC did not confirm the facts in the report, saying that it was "in discussions" about the terms of termination.

The original plan was for UNSW to build a campus that would eventually take up 20ha of land and accommodate up to 15,000 students by 2015.

Meanwhile, as UNSW Asia prepares to shut its temporary campus tomorrow, 47 academic staff have sent a letter to the university's councillors in Sydney to take up their case for better severance pay.

Unhappy with UNSW Asia's offer of 20 weeks' salary, the lecturers are appealing for full redundancy entitlements — 30 weeks' pay and another three weeks' pay for each year of service — which is what the parent university typically dishes out.

The lecturers are also given another week to mull over their options: Once they accept the offer and sign a deed of release, they cannot make further legal claims against the varsity.

The letter also called on UNSW to take a "moral obligation" to academic staff who worked for the university to build its name across Asia and were now made redundant.

In any case, UNSW Asia will not leave Singapore just yet. It will continue to operate from a rented office at Shaw House in Orchard Road next week to settle remaining administrative issues.

Where There’s A Will, There Are Fewer Nasty Legal Disputes

Source : New Paper, 11 Aug 2007

She was his employee until he married her.

He eventually gave her control of assets worth more than $2million, including business interests and the condominium unit he had bought as their marital home.
As she was quite a bit younger than him, he expected her to outlive him.

The couple had a young son, and all seemed sunny - until she was diagnosed with cancer.

And when she died, her grieving husband had a rude shock. His wife had willed nothing to him, choosing instead to give everything to her child.

To make things worse, she gave control of all the assets to relatives who had never taken care of the child, and even appointed them as joint guardians of the boy.

In effect, her husband had been left not just penniless, but now had to seek approval from others on how to bring up his son.

It didn’t make sense, and the husband challenged the will.

He felt that his wife, in her illness, was not mentally capable of making the right decisions and might have been influenced by relatives.

The case was eventually settled out of court, but it highlights the importance not only of making a will, but of making one that makes sense.

Lawyer Justin Chan of Tito Issac & Co., who specialises in civil litigation, has seen numerous families slug it out in court over money.

It’s not because no wills were made, but because the circumstances surrounding their creation were questionable, or because they were not worded clearly enough.

And it’s not just the rich who need wills.

Mr Chan said he once drew up a will for a client who had just $20,000 to his name.
‘The money, no matter how small, will then go to the right person,’ he said. ‘If you want someone to have your wedding ring or Rolex, you can ensure that he gets it.’

Nor does it cost much. How much depends on the size of the estate and the complexity of the will.

A simple one can cost a few hundred dollars, a complicated one about $1,000.

‘The larger the estate the more precautions you should take,’ he said. And you should do it when you are mentally capable, and get a psychiatrist to certify that.

Your will should also be updated whenever your financial situation, affections or loyalties change.

WHEN YOU CAN CHALLENGE A WILL

-When suspicions arise that a person lacked the mental capacity to execute a will, possibly due to mental or physical illness.

-When it is suspected that the person was coerced into making the will

-When it is suspected that the person signed the will without fully understanding what it said.

Who’s The Spoiler?

Source : Weekend Today, 11 Aug 2007

US credit woes top threat to the Singapore party

Now that the fireworks are over, here comes a reality check.

While the fanfare is over how a sparkling first half will lift the entire year’s economic showing — the Government announced on Friday that the GDP expanded by 8.6 per cent year-on-year in the second quarter — a growing monster halfway round the world is threatening to gatecrash Singapore’s party.

The pundits call it the “United States sub-prime problem”. In layman lingo, it’s a wave of Americans with dodgy credit histories defaulting on their home loans, causing some of their lenders to keel over.

Scarily, many such high-risk mortgages have been packaged into complex financial instruments bought by banks worldwide, including those in Singapore.

With banks crying for help, government after government has been pumping in fresh funds to boost liquidity since Thursday. Financial markets, rattled by doomsday scenarios of a global contagion, went into a tizzy.

Singapore share prices plunged by 1.6 per cent on Friday, wiping out all gains made since late April. Investors were pushing the “sell” button, ignoring reassurances by officials that morning.

“We stand ready to inject additional liquidity if the situation so warrants … At this stage, market conditions remain relatively stable,” the Monetary Authority of Singapore’s (MAS) deputy managing director Ong Chong Tee said, when asked if the central bank would follow its counterparts in Japan, Europe and the US, which together ploughed in billions of dollars just before the weekend. Banks have grabbed the funds to cover losses.

Dow Jones Newswires quoted unnamed sources as saying that the MAS injected $1.5 billion into the country’s money supply on Friday. The MAS declined to comment on the figures.

Investors hardly took heed of Singapore’s glowing economic numbers that day.The second quarter saw the construction sector expanding at the fastest pace in nearly a decade and a continued flourish in financial services demand, leading the Government to upgrade its growth forecast for the year to 7 to 8 per cent — up from the previous 5 to 7 per cent.

The bullish prediction factors in the sub-prime situation, said Mr Ravi Menon, Second Permanent Secretary at the Ministry of Trade and Industry. He added that the risk of credit woes spreading was “the most significant downside to the (growth) forecast”. But even if the situation does worsen, “it will take some time before it feeds into the real economy”, Mr Menon said, noting that the fundamentals of the major economies remained sound.

Private-sector economists are not so sure. Mr Vishnu Varathan of research house ForeCast, uncertain when and whether the credit crunch will unravel, has put off revising his growth forecast for Singapore until more clarity on the sub-prime situation emerges.

Singapore’s three local banks recently said their exposures to sub-prime-linked funds were small and limited. But if the US economy does take a hit from the reeling credit market, a ripple effect will certainly touch the Republic despite its attempts to ensure its revenue sources come from other markets besides the US. “None will be spared,” said Mr Varathan.

For now, however, the outlook remains benign — even rosy.

“It’s all cylinders firing,” said CIMB-GK Securities economist Song Seng Wun, confident of continued support by the property, construction, and biomedical sectors. He is also optimistic the sub-prime woes are “a US-Europe problem”.

Other than that, few risks threaten to derail Singapore’s economic progress, Mr Song said. Even oil prices, once the bogeyman, have fallen below US$70 ($106) per barrel.

The only domestic concern, he said, may be rising costs. Consumer prices rose 1 per cent in the second quarter, double the rate of 0.5 per cent in the first quarter. At current levels, inflation has not crimped Singapore’s competitiveness as a business centre. But Mr Song says: “If it continues, then it probably will.”

A Sweeter Cut For Manufacturing

Source : Weekend Today, 11 Aug 2007

Sector grows 8.3 per cent, boosted by biomedicals, transport engineering

















The manufacturing sector has loosened its dependence on electronics, with other industries such as transport engineering and biomedicals helping it to expand a strong 8.3 per cent from a year earlier, faster than the first quarter’s 4.4-per-cent growth.

With a first-half slump in the electronics sector, such growth “would not have been possible 10 to 15 years ago”, said Mr Ravi Menon, second permanent secretary of the Ministry of Trade and Industry (MTI) yesterday.

“The fortunes of the economy (10-15 years) ago were very closely tied to electronics,” he said. “Over the past 10 years or so, there’s been a structural change in manufacturing, developing a reduced dependence on electronics.”

The transport engineering sub-sector reported a 31-per-cent growth from a year earlier, compared to 23 per cent in the first quarter.

Biomedical manufacturing, a sub-sector making pharmaceuticals and medical devices, chalked an 11-per-cent rise, reversing the 5.1-per-cent drop a quarter earlier.

Electronics grew only 2.5 per cent while the precision engineering sub-sector contracted 2 per cent.

Manufacturing contributed 27 per cent of Singapore’s second quarter nominal gross domestic product (GDP) this year, which stood at about $56 billion.

The biomedical segment has grown substantially in the last 16 years, increasing its share of the manufacturing pie from 5.3 per cent in 1990 to 24.6 per cent last year — the second largest. While it is still the largest portion, the electronics sector has dropped from 31.1 per cent in 1990 to 28.8 per cent in 2006.

Still, Mr Vishnu Varathan from economic research house ForeCast said the biomedical industry tends to be volatile, partly because of the portion of output from pharmaceuticals.

“There’s only a handful of the big names here producing,” UOB economist Alvin Liew said. “So, the coincidence of a few big plants shutting down for cleaning purposes in a month could see a sharp drop in production for that month.”

Mr Liew added: “In time to come, when more firms come in to produce, you can grow a bigger pool and the volatility may then be reduced.”

While pharmaceuticals will likely see more volatile months ahead, “we expect to see at least 15-per-cent growth for pharmaceutical exports this year”, he said.

Diversification may be one way of broadening economic growth. The economist added that manufacturers should do more research and development and move up the value chain as the economy matures.

“So far, we have seen a few (pharmaceutical) companies starting operations, but most of them do production, not much in terms of research and development. So that needs to be improved,” he said.

S’PORE ECONOMY LOOKING UP: INDEX

Singapore’s Composite Leading Index (CLI) rose 3.4 per cent in the second quarter, up from 3 per cent in the first quarter, reflecting increased optimism about the economy.

Eight of the nine index components posted gains for the quarter, with only domestic liquidity showing a decline from the last quarter.

Attributing the fall to “fluctuations in the financial markets”, Mr David Cohen, economist at Action Economics, said that is not a major concern the banking system has enough liquidity to keep the economy growing.

The financial market has been volatile lately because of heightened concerns over the shaky United States sub-prime mortgage market, which might spill over and hurt the quality of risky assets held by local banks.

Popular, Yet Not So Popular Flats

Source : Weekend Today, 11 Aug 2007

They may be largely unsold, but take-up rate is relatively good

Flats in Jurong West and Sembawang made up a whopping 94 per cent of unsold flats that were put on the market by the Housing and Development Board (HDB) in April this year. But the situation is not as dismal as it seems.

Industry players have, in fact, given these figures the thumbs-up, noting that flats in these towns sold well given that they had the highest number under the HDB’s revamped bi-monthly sale of four-room and bigger flats.

As of July 31, Jurong West had 274 of its 381 units — 72 per cent — taken up. In Sembawang, 348 out of the 502 units — 69 per cent — on offer were sold, according to statistics from the housing authority yesterday.

Other towns that took part in the April exercise, such as Bukit Batok and Yishun, had all their flats on offer snapped up. Only one out of the 127 flats at Woodlands, as well as 16 out of the 139 flats in Bukit Panjang, remain available.

The exercise — which is determined by computer ballot and does away with queues of homeseekers outside the HDB sales office — a total of 1,269 flats offered in northern and western Singapore.

Mr Mohamed Ismail, chief executive of property agency PropNex, said the take-up rate of the Jurong West and Sembawang flats is “very commendable” as these are usually not popular with buyers.

Buyers tend to perceive these towns as lacking in neighbourhood amenities and “far off” from the rest of the island, said managing director for C & H Realty Albert Lu.

Statistics from the HDB showed that, in the second quarter of the year, the median cash-over-valuation for a five-room resale flat in Jurong West was $6,000, vis-à-vis $10,000 in Jurong East. The difference for an executive flat was even greater, at $20,000.

Cash-over-valuation refers to the difference between the resale price and market value of the flat.

Given the market conditions now, the “lower” prices for the Jurong West and Sembawang unsold flats — whereby buyers buy direct from the HDB — could have helped seal the deal, said Mr Chris Koh, director at Dennis Wee Properties. The prices could be between “5 and 10 per cent” lower than those in popular towns, such as Choa Chu Kang and Woodlands, he said.

The HDB also launched the sale of 354 flats in established towns yesterday. Between one and four units are in each of the towns of Marine Parade, Clementi, Toa Payoh and Central. Geylang is putting out 79 units, followed by Bukit Merah (77) and Tampines (44).

Those seeking a four-room flat and are Chinese stand a high chance of success in Geylang, where they can purchase up to 70 such available units are on offer. This is in contrast to Malays (30) and those in the Indian and Others grouping (21), in line with the ethnic quota policy for public housing.

On the other hand, non-Chinese applicants could look to Bukit Merah, which is offering 61 five-room units. All these units are available to Malays, with 47 available to Indians and other ethnic groups.

Interested flat buyers can submit their applications online until Aug 16.

Money, Poker And Reputation At Play

Source : Weekend Today, 11 Aug 2007

Why would a low-profile, public-listed company helmed by a man who avoids the public radar like the plague join an international consortium and initiate a talk-of-the-town legal spat with 173 residents over 204,742 square feet of prime residential land?

Money, man, money. There are big bucks (anywhere between $800 million and $1 billion) that might slip away if the Horizon Towers en bloc sales agreement lapses because of a rejection by the Strata Titles Board — and that, too, on a technicality.

Reputation, man, reputation. Bringing in two international brand-name partners — Qatar Investment Authority and Morgan Stanley Real Estate — to develop that Leonie Hill property must have been a dream come true for Hotel Properties Ltd (HPL) and its managing director, Mr Ong Beng Seng.

Why allow that brand association to be scuttled by a bunch of unhappy owners?

And, finally … poker, man, poker. HPL and its partners have that all-important joker to throw with relish in their talks with the sellers or convince the judge in the worst-case scenario that the legal suit goes to court.

That trump card is hidden in the strata board’s official reason for throwing out the en bloc deal: Technical grounds.

A source familiar with en bloc sales said the technical hitch revolves around some of the names of the sellers in the sales purchase agreement.

The attention to detail in preparing such documents has been overshadowed by the frenzy in clinching lucrative deals, he said.

“A seasoned developer would have gone through details like the names of sellers with a fine toothcomb, although it is not the developer’s duty to do so.

“It’s all about the old-school ideal of wanting a water-tight deal so that a sour aftertaste can be avoided.”

With the sellers staring at the prospect of a protracted legal fight and a huge loss of about $5 million each, how can this messy affair be resolved?

The sellers can be persuaded to go back to the strata board for another shot at approval with the technical anomalies sorted out. That opportunity will come in two weeks when they vote on whether the deadline for the failed sale should be extended. And the buyers can be magnanimous enough to shake hands on a new money deal.

Even if it does end amicably, the wounds will take a long time to heal. The unhappiness with not getting more money, the fear of a legal tussle with a giant group and the finger-pointing among residents will continue.

Unless two home truths sink in: Don’t look back once you have sold your property, even if the price goes up after the deal has been done. And don’t treat your property as a house, treat it as a home.

In a land where asset enhancement and upgrading are uttered freely, the Horizon Towers episode shows what can happen when frenzy overtakes reason, when making money overwhelms values and when the home is treated as a lottery.

A sobering thought as we celebrate 42 years of independence.