Monday, August 13, 2007

Orchard Residences

The Orchard Residences is named for its most coveted and strategic location at the gateway of Orchard Road and for its affinity to the world-famous shopping street’s lead in luxury city living. It is also Orchard Road’s tallest landmark building, a stature and distinction approved by the authorities.

A limited 175 exclusive, super luxury apartments housed in the district’s tallest and most architecturally-definitive landmark aim to offer a lifestyle of timeless elegance and privacy in the midst of the vibrant city below. Standing at a commanding height of 218 metres and with no buildings nearby to rival its stature, the 56-storey residential tower will offer residences with breathtaking, unobstructed panoramic 360º views of Singapore.

Besides its world-famous and most expensive address, The Orchard Residences will also set unparalleled benchmarks in every aspect of luxury living by way of its all-encompassing design features that maximize its views and are attentive to every lifestyle need of those who have progressed well beyond personal success. All units will have unique enclosed alcoves that extend from the living and dining areas, as well as large master bathrooms with a curvilinear facade for optimal enjoyment of the views.

The Orchard Residences is also named for its pièce de résistance: a 75,000 square foot high-rise garden which architects have referred to as the development’s ‘fifth elevation’. True to its iconic building concept and design, which drew inspiration from the site’s heritage as an orchard, the re-creation of a private orchard located on the 9th floor will provide a habitat of quiet and serenity, amidst a spring-time botanic ambience for the exclusive use of its residents.

Executive Summary

Location: At the junction of Paterson and Orchard roads. Together with ION Orchard (Picture : Left, previously referred to as the Orchard Turn project) a 663,000 sq ft mall, which will rejuvenate Singapore’s main shopping strip

Address: 238 Orchard Boulevard (District 9)

Map Source :

Tenure: 99-year leasehold from 13 Mar 2006
Expected TOP: 30 Dec 2010
Overall Building Height: 218 metres, 56 storeys
Residential Levels: 9 to 54
Total Units: 175 super luxury apartments with unobstructed views of Singapore (north- or south-facing)

Count/Unit Type/Levels:
168 typical units on levels 10 to 29 and on levels 31 to 52
3 garden units on level 9
4 penthouse units on levels 53 and 54

Unit Size Range:
Typical units ~ between 1,800 sqft & 2,800 sqft
Garden units ~ between 4,500 sqft & 6,500 sqft
Penthouse units ~ between 4,200 & and 5,000 sqft

Unit Access : Private lift lobby with card access
No. of Lifts : 4 private lifts, 1 service lift
Vehicular Access/Drop-off Points: Grand entrance and car park access via Orchard Boulevard, which is located outside the ERP gantry on Orchard Road. Separate entrance(s) from retail mall
Car Park: More than 270 lots on levels 5, 6, 7 and 8 (inclusive of 3 handicap lots)

Complimentary Car Parking:
Typical units (3BR units) ~ 1 lot each
Typical units (4BR units)/Garden units ~ 2 lots each
Penthouse units ~ 3 lots each

Treading The Thin Line Between Turmoil And Crisis

Source : The Business Times, August 13, 2007

Wall Street Insight
Don't assume the bounce of US stocks on Friday will continue this week, warn strategists

DESPITE suffering the biggest single-day loss since Feb 27 - when the sub-prime mortgage crisis first came to light - the Dow Jones Industrial Average, along with the other two major US stock indexes, actually finished a panic-laden week with gains when last Friday's closing bell sounded.

But Wall Street stock market strategists warned that investors should not assume that Friday's bounce back at the close from what had been shaping up to be another trading session of steep losses will be continued this week.

'If we hadn't seen all the central banks coming in with announcements that they were intervening in the markets to inject liquidity into the global financial system in order to encourage borrowers and lenders, and assure investors, we'd have had another rout in the stock market on our hands on Friday,' said Joe Battipaglia, chief market strategist at Ryan, Beck.

With uncertainty still running high over how much further the credit crisis could spread and how many hedge funds and mortgage lenders could end up failing, Mr Battipaglia said he expects a fretful beginning to what is almost certain to be another volatile week. 'I don't know if we're going to end this coming week in positive territory or negative territory, but I'll tell you one thing I am certain of: there are going to be at least a couple of days of one per cent or more swings for the indexes.'

That scenario is sure to further raise the blood pressure of plenty of investors and Wall Street traders.

'We're getting close to a breaking point now,' said Hugh Johnson, chief investment strategist at Johnson Illington Investors, who has been through many selling panics in more than three decades as an investment professional.

'We haven't seen an all-out panic yet, but it could very easily happen. The move by the central banks, for instance, on Friday assured the financial markets that the central banks are ready to step in in time of crisis, but by Monday it also could send the signal that they're so worried about the situation because there's much worse yet to come,' he said.

Mr Johnson added that he thinks it's just as likely that the stock market will start a bottoming process sometime this week and possibly show signs of lower volatility. 'We've taken some hard hits here the last few weeks, but the fundamentals are holding up very well, and investors might start thinking it's worth dipping a toe back into the market and seeing what buying opportunities exist after a 6 or 7 per cent pullback,' he said.

Indeed, Citigroup chief investment strategist Tobias Levkovich, who predicted that the US Federal Reserve would step in to provide liquidity to the system to keep the credit market breathing, believes the time is ripe for investors to buy large caps, the IT sector and big pharma.

'We expect that the equity markets will continue to churn, but the degree to which the VIX (the Chicago Board Options Volatility Index) has soared argues for a strong recovery in the next one to three months,' he said.

On Friday, the panic in the credit markets nearly swamped equities, but stocks came back after the Fed injected US$38 billion in liquidity into the system to keep rates from rising above its target level, and central banks in Europe, Japan and Australia followed suit.

After being down more than 200 points on Friday morning, the Dow closed down just 31.14 points, or 0.2 per cent, to 13,238.54. The Standard & Poor's 500 eked out a gain of 0.55 points to close at 1,453.64. The Nasdaq Composite shed 11.6 points, or 0.4 per cent, to 2,544.89. For the week, the Dow finished with a 0.4 per cent gain, while the S&P 500 added 1.4 per cent and the Nasdaq rose 1.3 per cent .

The turmoil had the Dow closing with swings of more than 100 points in three out of five sessions. Despite the reassurance of the US$62 billion the Fed injected into the credit system on Thursday and Friday combined, and a promise to do more of the same in order to keep the Federal Funds rate at its 5.25 per cent target, investors will face the likelihood of another week of turmoil spreading from the sub-prime mortgage crisis.

'No one has a handle yet on how far the sub-prime crisis will spread into other areas of the financial system,' said Alan Alvarez, a money manager at First Equity Capital Management. 'Until investors get a solid idea of how bad things can get, panic is just the next announced failure of a major hedge fund away,' he added, referring to last Thursday when French bank BNP Paribas said it has suspended three of its funds that have exposure to US credit markets.

That spurred concerns that liquidity problems in the United States, caused by increasing problems in the mortgage markets, were spreading globally, and sparked a 387-point swoon in the Dow. Those deep fears over the credit market and the fallout from the US sub-prime mortgage industry will continue to dominate the markets in the coming days, but Wall Street analysts will also be keeping an eye on several key economic reports due out this week.

The Producer Price Index and the Consumer Price Index, scheduled for release tomorrow and on Wedenesday respectively, should give traders a good view into inflationary pressures. The Fed in its announcement last week signalled that it would not consider a rate cut until it felt certain that inflation was well under control.

With calls for the Fed to cut rates in order to prevent a credit scare induced recession already on the rise, a benign inflation report will only make those calls louder. Retail sales for July are due today. Second-quarter earnings season has been all but ignored during the turmoil of the last few weeks, but US companies continue to turn in surprisingly strong results, with a year-on-year earnings growth rate of 7.9 per cent.

With nearly 90 per cent of S&P 500 companies having reported, earnings season is winding down. But 18 S&P 500 components, along with the final three Dow components are scheduled to release results this week.

Will Central Bank Interventions Just Delay The Inevitable?

Source : The Business Times, August 13, 2007

The US sub-prime mess hasn't yet run its course. Volatility will remain high in the days ahead, and this will offer plenty of trading opportunities for short-sellers and day traders. On the one hand, most research houses, brokers and analysts believe that plunging prices have created a conducive buying environment - and they are recommending clients to buy.

Witness Credit Suisse's well-timed 'overweight' on the local banks last Wednesday, for example, which helped push the sector up sharply.

Similarly, BCA Research in its Aug 10 Global Investment Strategy stated 'market sentiment is still very fragile and emotional while investors have been spooked'.

'It is hard to predict what share prices will do in the days ahead. However, we urge clients to maintain composure. We should always be ready to buy when there is blood on the streets and dead bodies are floating on the surface'.

Add to such urgings the increasing pressure on the US Federal Reserve to cut interest rates, and we have a reasonable case for 'buying the dips'.

On the other hand, you can't help but worry that while the European Central Bank and other major central banks may have bought some time when they made the unprecedented move last week to inject liquidity into the system, they could simply only be delaying the inevitable all-out crash in markets.

Those looking to buy might wish to note the recent comments of Nobel-prize winning economist Joseph Stiglitz, who spoke of the roots of the sub-prime crisis lying in the economic and monetary policies of Alan Greenspan and George Bush after the Nasdaq crash of 2000. The full effects, he said, have not been felt yet.

In a nutshell, his thesis is that Mr Bush's tax cuts aimed at enriching the wealthy and Greenspan's interest rate cuts at about the same time had the combined effect of inflating a huge housing bubble. This then enticed lower-income Americans to try and play the property game, leading to the sub-prime mortgage crisis gripping markets today. Our best guess is that even though the market has known about the problem for a good six months now, the end game is not yet upon us because the full impact has still not shown up in US consumer spendings and corporate earnings.

Short-sellers have stepped up their activities after smelling blood and, in such a climate, it's best to view bounces with scepticism because they would invariably include a hefty short-covering element. As such, it's probably best to be overweight cash, or to stay defensive for the time being.

For those who opt for the latter, this means looking for companies with low valuations, steady earnings, strong balance sheets and a track record of paying good dividends.

Unfortunately for hordes of retail punters, criteria such as these probably exclude most of Sesdaq and a sizeable chunk of penny stocks listed on the mainboard. In the space of 12 trading days, the UOB Sesdaq Index, for which no price-earnings ratio exists because the majority of its components have no earnings, has lost 24 per cent.

Perhaps not surprisingly, among its biggest losers are those that had been earlier pushed to stratospheric heights on pure speculation - Baker Technology, for example, was 55 cents on July 24 but has since collapsed by 47 per cent to 29 cents now, while Alantac was 59.5 cents four weeks ago but has since crashed an astounding 71 per cent to 17.5 cents now.

Many in the market feel that the whole penny mania started with video surveillance firm LottVision which in April announced a move into the China lottery market, but in May announced it expects a full-year loss for the year ended March 31.

Its shares had been jacked up to 72 cents in April but sold for 29.5 cents prior to a trading halt last week, a loss of 58 per cent.

Needless to say, few punters here caught at the top of the penny bubble would have expected the end to have come because low income American real estate punters have been unable to meet their mortgage payments.

If anything, the sub-prime crisis has served as a timely wake-up call, a much-needed reality check that valuations do matter.

ECB Makes Fresh Cash Injection Of US$65 Billion

Source : The Business Times, August 13, 2007

FRANKFURT - The European Central Bank (ECB) on Monday pumped another 47.66 billion euros (US$65.06 billion) into the money market to address liquidity shortages amid growing fears about the US home loan sector.

The bank said earlier that the eurozone banking market was returning to normal after it injected a record 155.85 billion euros into the market over two days last week.

'The ECB notes that money market conditions are normalising and that the supply of aggregate liquidity is ample,' it said in a statement.

The bank, which sets monetary policy in France, Germany, Italy and the 10 other nations that use the euro, said the new injection would be lent to banks at a minimum interest rate of 4.0 per cent.

'With this fine-tuning operation, the ECB is further supporting the normalisation of conditions in the money market,' it said.

The cash injections by the Frankfurt-based ECB, which enable commercial banks to borrow from the central bank to meet their liquidity needs, are designed to forestall a credit freeze linked to problems in the US sub-prime, or high-risk, mortgage market.

Sub-prime loans are offered to Americans who have a poor credit rating and might otherwise be denied mortgages.

The current crisis stems from concerns that banks exposed to losses in the sub-prime market might have insufficient cash to continue lending normally, causing a credit crunch. -- AFP

The Marq On Paterson Hill

Without compromise, The Marq on Paterson Hill offers the design elements and spaciousness of high-end bungalow living within a luxury high rise apartment setting.

Private 15 metre lap pools in every residence on every floor of the Signature Tower afford a tranquil luxury like no other, complimented by the unprecedented luxury of space with grand 6.5 metre double volume space throughout the living, dining and kitchen areas.

Defy every conventional notion of luxury living where a landmark architectural vision of exquisite proportions meets unsurpassed service to create the ultimate resort setting for residents.

Location: Paterson Hill (District 10)

Map Source :

Tenure : Freehold
Total Units : 66 in two 24 storey towers
Land : 125,000sqft
Expected TOP Date : 2011

Unit Types:
4-Bedroom: from 3,000sqft (Premier Tower)
5-Bedroom: from 6,000sqft (Signature Tower)
Price: From $4,200-5,000psf

An unparalleled address with uninterrupted 180° panoramic views across the Orchard skyline.

Taking luxury to new heights, The Marq on Paterson Hill offers the relaxed ambience of a super-exquisite luxurious resort within the heart of Singapore’s premier shopping and entertainment belt.

Just a stones throw away, the world’s leading fashion labels and designer couture, the finest hospitality and the trendiest gymnasiums and spas beckon. The term ‘a good neighbour’ has never held such promise.

Cuscaden Royale

Cuscaden Royale. As one of society's upper echelon, it is not surprising that you have chosen to be at the centre of Singapore's kinetic fashion, dining and entertainment scene at a freehold abode that is a testament to your elevated lifestyle.

Residing at the Cuscaden Royale means you are just a short drive away to wherever you want to be. Its proximity to the PIE and CTE expressways gives you immediate access to all parts of Singapore. Public commutes are equally convenient with a multitude of on-call taxis and the MRT is just a short walk away.

Life is infinitely more enjoyable when every place becomes pleasantly accessible. Say hello to your neighbours - world class designer boutiques, chic fashion labels and purveyors of high-end lifestyle accessories. At the Cuscaden Royale, desired retail destinations are so near that they are practically next door.

Be spoilt for choices when dining out with friends and entertaining business colleagues. From famed international and local restaurants with signature fare to gourmet venues that serve epicurean delights for discerning palates, each time you dine is a welcome exploration of fine taste. Renowned bars and bistros also abound the immediate area, all the more reason to enjoy the pleasurable company of others.

Away from the outside world, your own apartment is a privileged living space that embraces your presence. Marble flooring beckon invitingly in the living, dining and kitchen. Splendid scenic views silently clamor for attention at the balcony. Stylish wardrobes open to reveal abundant room for your collection of designer wear. And in every master bathroom, a relaxing jet bath awaits to luxuriate your stress away.

The exquisiteness extends from the fine fittings and fixtures to the well-designed kitchen with branded appliances and meticulously chosen cabinets. At the main door, a fingerscan biometric lockset and audio-cum-video hands-free intercom system bestows you with greater security and peace of mind.

Location: Cuscaden Walk (District 9)

Map Source :

Tenure : Freehold
Site Area : 17,290sqft
Expected TOP Date: Dec 2010
Total Units : 46 in One 19 Storeys Tower

Unit Types:
2BR ~ 937sqft (16 units)
3BR ~ 1,001sqft, 1,399sqft, 1,539sqft, 1,604sqft (27 units)
3BR + study + utility ~ 1,905sqft (1 unit)
3BR Penthouse ~ 1,948sqft (2 units)

-Garden Pond
-Reflective Pond
-Trellis Garden
-Scented Garden
-Tropical Garden
-Lap Pool
-Fun & Wading Pool
-Water Lounger
-Sun Deck
-Cosy Corner
-Changing & Steam Room
-BBQ and Teppanyaki Area
-Children’s Playground
-Gymnasium & Outdoor Fitness Station (14th Storey)
-Foot Reflexology Path (14th storey)
-Function Room (14th storey)
-Sky Garden (14th storey)

Standing 19 storeys above the cityscape and located at the prestigious Orchard district, you will reside in a distinguished neighbourhood amidst tranquil surroundings. Expect utmost privacy at this stately tower of 46 privileged residences and savor the exclusivity and distinction of the Cuscaden Royale.

How US Homeowners Caused Global Market Tremors

Source : Channel NewsAsia, 13 August 2007

PARIS : The link between repossessed houses in the United States and wealthy moneymen around the world is the key to understanding the current stock market turbulence and fears for the world economy.

Markets in the United States, Europe and Asia were rattled last week in what could be either the start of a downturn or a simple correction similar to one seen in February this year.

Only three weeks ago, the main US stock index, the Dow Jones Industrial Average, had broken through 14,000 points for the first time in its history, but sentiment has reversed sharply in recent weeks.

The turning point came last month when a US bank, Bear Stearns, spooked the markets with news of major losses and accounting difficulties with its investments linked to risky US housing loans.

Related Video Link : How US homeowners caused global market tremors

Losses by other banks and investment funds have led to what has been termed the "US sub-prime housing crisis," the source of turbulence and uncertainty last week.

Sub-prime loans are housing loans made by lenders to individuals with poor credit histories and are therefore risky.

Following years of booming house prices and cheap credit - interest rates have been low by historical standards - the US housing market is now in reverse with loans becoming more expensive and prices falling.

This has caused high numbers of defaults and repossessions as borrowers, particularly high-risk sub-prime borrowers, struggle to keep up with their mortgage payments.

The human face of the current financial crisis is likely to be a low-earning American, possibly someone who took on a mortgage they could ill-afford and whose mortgage broker did inadequate checks on their ability to repay.

The link between these people and turmoil in financial markets involves a piece of financial trickery that has enabled banks and funds all over the world to make investments that are essentially bets on borrowers repaying their mortgages.

Funds looking for a high-risk, high-return investments have bought unknown numbers of innovative securities called mortgage-based securities (MBS) or asset-based securities (ABS), and their variants such as collateralised debt obligations (CDOs).

Questions about the scale and scope of these investments - i.e. who has bought them and how much are they exposed - has caused volatility on world stock markets with investors waiting to see who has been caught short.

So far, banks in Germany, Australia and Britain have revealed losses and several funds have closed because of severe losses.

The sharp falls on Thursday and Friday were sparked by an announcement by French bank BNP Paribas that three of its investment funds had been suspended because of their exposure to sub-prime loans.

"The big question is what is the overall amount (of sub-prime-linked investments) and this is bad for the markets because if there is one thing that the markets hate, it is uncertainty," Gilles Moec, senior economist with Bank of America in London, told AFP.

So far, so bad - but losses by a few risk-loving investors is only half the story with the real danger to the global economy the consequences that might trickle down to consumers or companies.

Banks are now setting aside cash as a precaution against further losses from their bad investments and have become far more cautious about lending.

This is known as a "credit squeeze," but the fear is that this could become a veritable "credit crunch" in which companies and consumers have inadequate access to loans.

"As private sector banks, in a time of uncertainty, set aside more funds for their own funding needs, we are seeing a shortage of liquidity in the money markets," explained Societe Generale's chief Asia economist, Glenn Maguire.

A shortage of liquidity would restrict the ability of companies, and eventually consumers, to borrow, potentially slowing economic growth worldwide.

As a result, central banks across the world have been pumping money into the banking system by offering loans at attractive interest rates to commercial banks in the hope of forestalling a damaging crunch.

The European Central Bank put a record 94.8 billion euros into the market on Thursday and followed up with another 61.05 billion euros on Friday.

The Federal Reserve for its part pumped US$62 billion into the US banking system since Thursday, intervening three times on Friday to shore up the country's financial system.

For some, the tightening of borrowing conditions is well overdue and the sub-prime crisis is a sting in the tail after years of easy money and lax lending by banks and mortgage brokers.

The consequences for the stock market could be serious, however, particularly given that much of the rise in stock prices in recent years has been caused by aggressive takeover activity by private equity companies.

Private equity groups, investors that specialise in increasing profits at underperforming groups, rely on large amounts of debt to finance their acquisitions and they might now have difficulty finding financial backing.

"There are two things I am more or less sure about," said Philippe Waechter, senior analyst at French group Natexis Asset Management.

"One is that the financing problem in the housing market is going to continue. The other is that on the markets there is going to be a lot of volatility and for the moment one can't say if the low point has been reached." - AFP/ch

Effect Of US Sub-Prime Crisis Could Be Diluted: Analysts

Source : Channel NewsAsia, 13 August 2007

FRANKFURT : The US home loan crisis looks set to continue gripping world markets but the effect could be diluted because the risk is spread among investors around the globe, analysts say.

The European Central Bank pumped 155.85 billion euros (US$212.98 billion) into the eurozone banking market on Thursday and Friday as central banks across the globe rushed to ward off a global credit crunch linked to the US sub-prime loan market.

Picture : A Euro Sculpture infront of The European Cental Bank Building

A crunch would make it harder and more expensive for businesses and consumers to get loans and cash.

The potential for instability to spread fast when markets re-open on Monday is high, analysts agreed, but most thought the main bourses would weather the storm.

Gilles Moec, senior economist at Bank of America, said: "One of the big issues is that no-one has any real clue of the amount of sub-prime loans which have been purchased by foreigners.

"The big question is what is the overall amount and this is bad for the markets because if there is one thing that the markets hate, it is uncertainty."

He said however that there was a paradox - although there was negative market sentiment, the risk appeared to be spread around the world.

"This shows that the risk is not concentrated in any one place and this is a good thing for the market," Moec said.

Sub-prime loans are offered at high interest rates to Americans who have a poor credit rating and might otherwise be denied credit.

Andreas Huerkamp, a Commerzbank analyst, predicted the crisis would blow over.

"There are strong parallels with the crisis in the mid-90s so you have to be a brave investor to buy shares at the moment," he said.

"But history shows that everything will be forgotten in six months and the market will recover."

The US Federal Reserve and Japanese central bank had made similar interventions to ensure that the markets continued to function normally, with the Fed injecting US$62 billion into the market.

The Frankfurt-based European Central Bank, the guardian of the euro, said its decision to pump money into the market was a "fine tuning" operation.

The "fine tuning" on Thursday had involved injecting 94.8 billion euros, more than the bank had released after the September 11, 2001, attacks on the United States.

The cash injections enable commercial banks to borrow from the central bank to satisfy their liquidity needs.

Howard Archer, chief UK and European economist at Global Insight in London, said that if the central banks did their job, the markets should stabilise.

"As long as the central banks succeed in calming markets down, the chances are that the impact of financial market volatility on the real economies should be small," he said.

"Importantly, the underlying fundamentals for the UK and Eurozone economies are still pretty good, so hopefully this will help to limit the overall economic fallout." - AFP/de

Asian Shares Gain Ground In Early Trading

Source : Channel NewsAsia, 13 August 2007

SINGAPORE : Asian stocks rose on Monday as central banks around the world pumped billions of US dollars into banking systems in an effort to ease a widening credit crisis.

However analysts said global stock markets were likely to remain jittery after last week's rollercoaster ride, with investors afraid of more bad news about the fallout from problems in US sub-prime mortgages to risky borrowers.

Sentiment was firmed by the late recovery on Wall Street last Friday.

Japanese share prices rose 0.28 percent in early dealings on Monday.

The Tokyo Stock Exchange's Nikkei-225 index of leading shares was up 47.26 points at 16,811.35 after plunging 2.37 percent on Friday to a near five-month low.

In Singapore, shares were also higher in early trading.

The ST index climbed nearly 22 points to 3,381 after 20 minutes of trading.

In South Korea, the key KOSPI index edged up 0.2 percent as market heavyweight Samsung Electronics climbed 0.5 percent and top lender Kookmin Bank added 0.3 percent.

In Australia, the S&P/ASX 200 index rose 1.2 percent, boosted by a rebound in the big four local banks such as Commonwealth Bank. - CNA/ch

Central Bank Credit Has Worked For Now

Source : The Business Times, Mon, Aug 13, 2007

IN the past year, central banks have studied various models on how to cope with a 'systemic' global financial crisis. They are now being tested.

'So far, the first step of central bank credit to banks appears to have worked,' said Brendan Brown, the London-based chief economist of Mitsubishi UFJ Securities International.

But the main worries are that tighter bank credit and higher interest rates could cause a further market slide, he said.

This could lead to further hedge fund and other financial failures. Coupled with a downturn in the real estate market, the US and European economies could slow down or experience recession, he feared. This, in turn, would dampen the exports and economic growth of Singapore and other Asian economies.

In the initial rescue phase, global central banks have pumped more than US$300 billion into financial markets. These loans appear to have eased panic in the European, US and Asian interbank markets. Such were the fears about the financial health of counterparties that banks, especially in Europe, became nervous about lending money to each other. Credit dried up and interbank interest rates soared as lending banks demanded a higher risk premium.

Last Thursday and Friday, the European Central Bank (ECB) supplied US$214 billion to loosen the squeeze on vulnerable European banks. The US Federal Reserve Bank funnelled US$62 billion into the US financial markets. Alongside efforts of the Bank of Japan and Asian central banks, a credit crunch and bank failure has so far been avoided.

After an initial slump of several hundred points, the Dow Jones index last Friday ended up 58 points on the week. With Asian central banks at the ready to support their banks, there is hope that their markets will stabilise and possibly recover today. But the underlying problems are still very serious.

The next step is how central banks, regulators and investors deal with two parallel crises, economists said. The first relates to excessive loans on residential real estate and rising defaults. The most publicised is the so-called sub-prime crisis in the US where figures of potential defaults of US$100 billion are being bandied about. Real estate prices are tumbling.

But there are also huge and potentially doubtful loans to property owners in Britain, France, Spain, Eastern Europe and, more recently, Asia. Some economists believe that Spanish banks are particularly at risk as prices there have already begun to fall.

In England's north and midlands, property prices have already begun to slip. The current debacle has a good chance of ending London's financial boom, which would cap the city's heady property prices.

Parallel to this problem is an acute crisis in the US$1.6 trillion global hedge fund industry. Leverage, or borrowings of thousands of hedge funds, have raised their market exposure to US$3-4 trillion, estimated Dresdner Kleinwort. Economists and other analysts believed the unwinding of these positions are the root cause of the current crisis, the worst since the failure of the hedge fund Long Term Capital Management in 1998.

The inevitable result has been panic among investors who placed money in hedge funds. Many now want to withdraw their money, forcing the managers to dump shares and other assets on the market. This has created a vicious circle, causing stock market falls, further hedge fund losses, more withdrawals, leading to inevitable closures.

The dilemma facing central banks is whether to allow the free market to dish out bad medicine, causing failures and a painful adjustment. They are aware that if they continue to pour money into the market and slash interest rates to save reckless banks and hedge funds, they could spur inflation. That would stem today's financial crisis, but an ultimate one could be much worse.

Tally So Far: First-Half Earnings Of SGX Firms Up 27%

Source : The Business Times, Mon, Aug 13, 2007

PROFITS of corporate Singapore rose more than 27 per cent in the first half of this year, led by strong gains in earnings in the property sector.

By 3 pm yesterday, 266 SGX-listed companies had released their first-half financial results for the six months ended June 2007. They racked in more than $13.3 billion in combined profits (after taxes and minority interests) during this period.

More than half of these companies reported an improved bottom line. Of these, 16 had climbed from the red back into the black, 154 boosted their net profits while six narrowed their losses.

Overall, 236 companies were in the black for the first half of this year, while 30 - 11.3 per cent - made losses. Of the latter group, 13 had been profitable in H1 last year.

Excluding the 11 companies which had no comparative results for H1 2006, the remaining reported total profits of $13.2 billion in the first six months of this year.

This represents a 27.4 per cent jump in combined first-half earnings from H1 2006.

Property and construction companies reported some of the most spectacular increases in earnings, in part due to the Financial Reporting Standard 40 (FRS 40) adopted from the start of the year.

The FRS 40 requires fair-value gains and losses on investment properties to be recorded in the profit-and-loss account.

The run-up in property prices has meant revaluation gains being recorded in the earnings of many property companies.

Property giant CapitaLand reported a year-on-year jump of 430.3 per cent in first-half earnings to $1.52 billion, putting it at No. 2 position in the earnings league table.

CapitaLand's earnings were boosted in the second quarter by fair-value and portfolio gains and higher profits from development projects.

'The group's ambitions to expand into new markets, increase its fee-based business, maintain a considerable exposure to Singapore's mid to high-end residential market and its capital recycling model will be the main drivers for growth,' said Kim Eng analyst Wilson Liew in a recent research note. He has a 'buy' call on the stock.

Taking the top earner spot was HongKong Land, which reported a net profit of $1.8 billion. This was fuelled also by fair-value gains as well as higher net rental income.

Other property players such as UOL, Keppel Land, Hwa Hong, Heeton, Tuan Sing, Orchard Parade and Pan Hong also put in a strong performance in the first half of the year.

The three local banks rounded up the top five earners, with each reporting more than $1.1 billion in net profits.

DBS, OCBC and UOB all benefited from higher lending activity and increased fee income. But the effects of these on their net profit had been largely masked by exceptional items, leading to less than stellar gains in their net profits from a year ago. Their core earnings, however, showed strong growth.

Companies in the offshore and energy also continued to be in good form. Keppel Corp, the world's largest builder of offshore rigs, reported a near-40 per cent increase in net profit to $510 million, while SembCorp Marine saw a 62 per cent rise in net profit to $158.8 million.

Smaller players in the sector such as Beng Kuang, Penguin Boat and Courage Marine also saw robust gains in their bottom line.

Not all was rosy in the corporate scene here, however. For example, lower freight rates in the first quarter of the year drove Neptune Orient Lines' first-half net profits down 27 per cent to $208 million. The group's second-quarter performance was, however, an improvement over last year.

Chartered Semiconductor also sank into the red with first-half losses amounting to $35.56 million, down from a net profit of $46.1 million a year ago. It suffered from consumer sector weakness and higher tax expense.

It was the second-worst performing company in terms of first-half earnings.

The company with the biggest net losses was Hup Soon, which made a net loss of $62.2 million, down from a net profit of $5.3 million. This was due to a large write-off of US$42.5 million in goodwill which resulted from the completion of its reverse takeover of Twinwood Engineering in April.

New Way To Beat Rise In Storage Costs

Source : The Business Times, Mon, Aug 13, 2007

(SINGAPORE) With rising office rents and thousands of en bloc sellers moving house, demand for 'do-it-yourself' storage is soaring.

Companies offering such facilities are reporting an explosion in business over the past few years.

Three major players BT spoke to - Storhub, Lock+Store and Store-It, which between them offer more than 4,000 self storage units in total - have seen their business grow by as much as 60 per cent over the past year.

The companies said that the surge in demand is driven by two factors - small and medium enterprises moving archives and inventories out of their main offices to save on rising office rents, and homeowners storing less-frequently used items while they move homes or downgrade to smaller flats.

'For sure, the demand has been picking up,' said market leader Storhub's vice-president for marketing, Anthony Chua. 'People stay in small flats, and many move homes regularly - they have to put their stuff somewhere.'

For example, one customer uses a unit to store her 70 pairs of shoes and drops by to pick up a pair whenever she wants to wear a particular one, said Mr Chua.

Yet another customer keeps a Barbie doll collection. And one expatriate, who spends most of the year outside Singapore, uses a large unit to store his prized Harley Davidson motorbike.

Companies are also contributing to the demand.

Said Lock+Store general manager Lee Seng Chee: 'Companies are feeling the office squeeze. By storing archives and small inventory items here, they can take advantage of the fact that the per square foot price is lower than in the central business district.'

Prices, for example, range from about $75 per month for a 16 sq ft unit to about $600 for a 200 sq ft units.

In addition, the companies get flexibility when they use self-storage. Unlike the use of a warehouse, there is no fixed one-year or two-year lease. Companies pay on a monthly basis - and when less space is required, they can 'downgrade' to a smaller unit and pay less rent.

The concept works mainly because it is so simple, said Storhub's Mr Chua. Once the units are rented out, customers can then lock their self-contained storage rooms with their own padlocks. They can then stop by at the 24-hour facility at any time to retrieve items. Security is maintained with a sophisticated security system, with CCTV cameras and a security presence at all times.

'We are kind of like a goods hotel,' said Lock+Store's Mr Lee.

In the face of strong demand, some operators are planning further expansion.

Storhub, which introduced the concept of self-storage to Singapore in 2003 with just one facility in Kallang, now has about 2,500 units across three facilities in Toa Payoh, Kallang and Changi. The company, which is owned by SGX-listed Hersing, has big plans.

It will add at least another 200 units in Toa Payoh, while the Kallang facility will also be ramped up by another 600 units or more. In April this year, Storhub bought a two hectare site at the corner of Tampines Street 92 and Simei Avenue for $8.7 million. The company plans to build an 8-10 storey storage facility in one to two years' time on the site.

Storhub is confident that its investments will pay off as revenue from the business has grown over the past few years. Hersing's financial data shows that revenue from Storhub increased to $6.2 million for the 2006 financial year, from $4.3 million for 2005.

Similarly, business is also booming at Lock+Store. Mr Lee said that the company saw turnover growth of at least 60 per cent year-on-year.

On the back of this, Lock+Store, which is owned by Temasek subsidiary Mapletree, is looking to add another 1,000 units.

And over at Store-It, the number of storage units has grown from around 200 when the company first started in 2004 to 650 units now.

Jackie Chan’ Condo Sold For $625m

Source : The Straits Times, 3 Aug 2007

The Grangeford near Orchard Road, a condominium where Hong Kong movie star Jackie Chan has an apartment, has been sold for $625 million - significantly below the owners’ asking price.

The price paid by Overseas Union Enterprise (OUE) works out to about $1,820 per sq ft per plot ratio (psf ppr). The owners had demanded $2,016 psf ppr.

It remains, however, as the highest price paid for a collective sale of a 99-year leasehold property on a psf basis. The priciest freehold deal was the $2,337 psf ppr that SC Global paid for The Ardmore.

Owners of two-bedroom apartments at The Grangeford will pocket about $2.7 million from the sale, while owners of three-bedders could get around $3.4 million.

Mr Chan will make a $2.1 million profit from the 1,755 sq ft three-bedroom apartment he bought in 1996 for $1.3 million.

Cove Development, an OUE unit, inked the deal.

The 193-unit Grangeford sits along Grange Road across from the Indian High Commission.

OUE, controlled by Indonesia’s Lippo Group and Malaysian billionaire Ananda Krishnan, will have to pay the Government a premium in addition to the $625 million purchase price to top up the remaining 66-year lease back to 99 years.

No Go For Horizon Towers En Bloc Sale

Source : The Straits Times, 4 Aug 2007

Move taken because the correct sale procedures were not followed, says STB

The Strata Titles Board (STB) axed the contentious collective sale of Horizon Towers yesterday after months of bitter wrangling between neighbours and lawyers.

The surprise move - it is the first such decision in seven years - cheered the condominium’s unhappy sellers, who have been complaining about a neighbouring estate fetching a higher price due to the property boom.

But it was technicalities, not money or the validity of the minority owners’ claim, that finally decided the case.

The STB told a room packed with residents, lawyers and onlookers that the sale was stopped because correct procedures were not followed.

The decision, after a week-long hearing, was the latest step in a battle watched closely by collective sale parties and property owners elsewhere amid the escalating en-bloc frenzy and rising unhappiness among minority owners forced to sell.

Horizon Towers was pledged to be sold to developer Hotel Properties (HPL) and a Middle Eastern fund in January for $500 million. At the time, it was the biggest collective sale in dollar terms.

But The Grangeford next door went en bloc a few months later at a far higher asking price per square foot (psf). It was eventually sold on Thursday, just two days ago - for double the Horizon Towers’ psf price.

The Grangeford asking price prompted unhappy Horizon Towers residents to band together to reverse their sale, in the process inspiring a growing group of minority owners in other condos disgruntled with the record wave of collective sales.

Even those who signed the original Horizon sales deal ended up backing the minority owners in their bid to unwind the sale.

Some residents cheered the decision. One who declined to be named but had signed the sale deal said: ‘It’s good we’ve brought things back to square one. This time around, hopefully, we can get a fairer deal relative to what’s going on in the market.’

But this may not be the end of the road yet.

HPL said in a statement yesterday that it is now ‘considering the STB’s decision and reserves all its rights’, including against the sales committee and the owners who signed the sale agreement.

Property watchers called the STB’s decision ’significant’.

‘On the basis of price, I felt the sale would go through,’ said Mr Jeremy Lake, executive director of investment properties at CB Richard Ellis. ‘Clearly, people will now look carefully at STB’s reasons to ensure that other projects don’t repeat them.’

Horizon Towers is not the first condo to have its collective sale bid turned down.

In 2000, Mandalay Court and Grenville Condominium faced similar rejections, also on technicalities. But in both cases, the majority owners ironed out the glitches and succeeded on the second try.

But Horizon Towers may not be so lucky. The deadline for owners to obtain the sale order is next Saturday, and without the order or an extension of the deadline, the deal will be off.

While the STB said the rejection was based on technicalities, it did not specify which ones. But sources told The Straits Times that cases of irregularities were presented by the objecting lawyers.

These included a notice put up on July 11 last year saying that owners with 80.81 per cent of share values in Horizon Towers had signed the sale agreement. A sale needs 80 per cent consensus. But only 79 per cent had agreed to the sale at that time, lawyers said.

No-Go On Horizon Towers Sale: Minority Victory After Long Fight

Source : The Straits Times, Sunday, 5 Aug 2007

When Mr Hendra Gunawan and three of his neighbours tried to engage lawyers to block the collective sale of Horizon Towers, three firms turned them down flat.

All felt they had no case. The last time the Strata Titles Board (STB) ruled in favour of minority owners was seven years ago.

Although more than 80 percent of the owners were reported to have signed the collective-sale agreeement, it still needed the board’s approval before the sale could proceed.

But in June, Harry Elias Partnership agreed to represent them, and on Friday, the board ruled in their favour.

The firm’s lawyer Philip Fong explained that the deal was thrown out because the application for STB approval did not comply with the law.

‘They dismissed the application on this ground alone, and not on the merits of the case.’

For the minority, however, it has been a long fight.

Although 33 owners objected to the sale, only nine turned up to file an official objection with the board in late May.

Besides the four, three owners were represented by Tan Kok Quan Partnership, another by Pang & Co, and the last chose to represent himself.

Mr Gunawan, a 51-year- old businessman, attended all the mediation meetings and hearings since they began late last month.

Now, he is just relieved that he will get to keep his home of seven years.

‘We were determined and committed to our cause; the comfort we so enjoyed in this home was at stake.’

The two tower blocks in Leonie Hill were due to be sold for $500 million to Hotel Properties Limited, Morgan Stanley Real Estate and Qatar Investment Authority, the investment arm of the Gulf Arab state of Qatar.

When STB threw out the deal, HPL issued a statement reserving its rights against the majority owners who signed the collective sale agreement and the sales committee of the property.

Lawyers, however, say that the contract to sell was conditional upon STB’s approval. That would have protected the majority owners from a breach of a commercial contract.

But the contract may have contained other clauses which enable buyers to examine whether the majority owners had attended properly to technical issues - such as making sure approval papers are in order.

One lawyer who spoke on condition of anonymity said: ‘This is a big area, and if the potential loss to the buyer is $500 million, then they might be willing to spend $1 million to test the case in court.’

Goodbye Famous 5?

Source : The Straits Times, Sunday, 5 Aug 2007

Architects lament five iconic buildings that are succumbing to en bloc fever and may soon go under the wrecking ball

Thirty years or so ago, they were residential buildings that helped pioneer the start of modern architecture here. And they stood tall and proud during Singapore’s formative years.

Mention their names, and they are bound to evoke a flood of memories for many Singaporeans: Pearl Bank Apartments in Outram Road, Golden Mile Complex in Beach Road, Futura in Leonie Hill Road, Beverly Mai in Tomlinson Road and The Habitat in Ardmore Park.

Beverly Mai and Futura were Singapore’s first condominiums, Pearl Bank has its unusual horse-shoe shape, The Habitat is a distinctive child of the 1980s and rundown Golden Mile Complex was the first here to mix homes and businesses.

Yet, the physical presence of these iconic five is set to be just a memory, too. The en bloc frenzy has them in its sights.

While for owners this is a windfall, history buffs and architects told LifeStyle the razing of the iconic residences will be a loss for Singapore’s architectural heritage.

The famous five are also written about in a book called Singapore 1:1 City, published two years ago by the Urban Redevelopment Authority and featuring a selection of significant architecture over the last 40 years.

It may seem strange to think old condos are part of the Republic’s heritage, just like grand colonial buildings, monuments and conserved shophouses.

Yet Mr Tai Lee Siang, president of the Singapore Institute of Architects (SIA), says these residential projects have left a strong impression on the collective memory of Singapore.

‘They also have a unique architecture form and were designed by local architects,’ he says. Beverly Mai was designed by Singapore architect Timothy Seow in 1974 and was the first to introduce the condo principle of high-rise living and shared facilities to Singaporeans.

Dr Goh Chong Chia, managing director of TSP Architects & Planners, who worked with Mr Seow on the project, says Beverly Mai marked a change in housing type. ‘It was a pioneer of luxury housing,’ notes Dr Goh, an SIA past president.

Futura, also designed by Mr Seow in 1976, certainly lived up to its name. Mr Tai points out that its unique form lies in the space-pod look of the living spaces.
‘Clearly inspired by the space age explorations, the design is bold and futuristic in outlook,’ he says.

He adds that although its location at Leonie Hill created less impact in the public memory due to its status as a high-end private development off Orchard Road, ‘there is no denying that the building is a quiet tour de force in Singapore architecture landscape’.

Architect Mink Tan of Mink Tan Architects agrees that these five buildings should be kept because of their historical significance to local architecture.

He is passionate about retaining Golden Mile Complex, which, of the five, is the only one whose en bloc sale is uncertain.

‘The complex marks our first mixed-use development,’ he says, and he hopes that instead of tearing it down, it can be refurbished to its original condition.

Dr Kevin Tan, president of the Singapore Heritage Society, says the five are ‘all important and aesthetically and architecturally important buildings. Their demise or impending demise is to be much lamented’.

The SIA, meanwhile, is working to identify modern buildings that are less than 30 years old that may be worthy of recognition and future conservation - even though it is too late for the five featured here.

‘To realise the development of potential of these buildings that may be demolished due to en bloc sale, SIA would like to make suggestions to the relevant authority on how to integrate the new potential with the old landmarks,’ says Mr Tai.

However, home-owners at these landmark buildings have a different take. Ms Wong Chin Chin, a Pearl Bank Apartments resident for 11 years, says most owners in her block have agreed to sell at prices of about $1,300 psf, but adds it is more than just the money. Factors pushing them to sell include high maintenance fees, leaky pipes and lifts that break down.

‘No doubt the building is unique and historical, but living and dealing with the inconvenience is a chore,’ she says.

Welcome to my horse shoe

The deal: LifeStyle understands from residents and industry experts that more than the mandatory 80 per cent of residents have agreed to sell. The apartments, near Outram Park MRT, could fetch more than $500 million.

History: The building was designed by local architect Tan Cheng Siong of Archurban Architects Planners, and completed in 1976.

Why it’s so special: The 280-unit, 38-storey Pearl Bank Apartments has a distinctive horse-shoe shape for a reason. The block’s horse-shoe opening faces west, shading the building from the afternoon sun.

Being located on a hill, it was the tallest residential building in Singapore at the time. And it had the highest density of apartments for a private residential development.

There are eight penthouses and 272 split-level units that are either two-, three- or four-bedroom apartments, with eight units to a floor.

Much thought went into the layout. Living rooms and bedrooms are at the front, giving great city views. Utilities and service areas are situated at the rear, overlooking a courtyard.

‘Slum’ becomes landmark

The deal: The en bloc is not yet a done deal. Some owners at the strata-titled mixed development are lobbying for one. But there are many units and it may be difficult to get the mandatory minimum of 80 per cent of individual owners to agree.

History: The 16-storey building, with 411 shops, 226 offices and 68 residential units, was designed by Gan Eng Oon, William Lim and Tay Kheng Soon of then Design Partnership - now known as DP Architects - and was completed in 1973.
Why it’s so special: It pioneered the idea of a mixed-use development. And its unique sloping form is unforgettable.

Today the complex is a hot spot for Thai clubs and eateries, as well as travellers going to Malaysia by bus.

It was even mentioned in Parliament once, when it was described as a national disgrace and a vertical slum because residents had put up zinc sheets and patched boards over their balconies to create an extra room.

The complex may look run down, but it is appreciated by architecture gurus.

Dutch architect Rem Koolhaas said at a press conference when he visited Singapore in 2005: ‘These buildings (Golden Mile Complex and People’s Park Complex) were not intended to be landmarks, but became landmarks.’

Pritzker Prize-winning Japanese architect Fumihiko Maki said it is a prime example of an urban building where people can live, work, shop and play - all in a single development.

Professor William Lim, a veteran architect here, says the demolition of the complex ‘will be a definite loss for Singapore’.

Living in a space-pod
FUTURA 14 Leonie Hill Road

The deal: The condo, with 69 units and three penthouses, was sold en bloc last year for $287.3 million to City Sunshine Holdings, a subsidiary of City Developments. However, the deal is still in the works as minority owners have gone to court, claiming that the sale was not made in good faith.

History: It was completed in 1976.

Why it’s so special: Futura was the second condominium to be built in Singapore. Its main architect is Mr Timothy Seow, who also designed Singapore’s first condo, Beverly Mai, two years earlier. This, too, has gone en bloc.

The Futura was the first residential project to incorporate lifts that open directly into the apartments, giving residents much privacy. It was a novelty to most Singaporeans living in flats with a shared lift opening onto a shared corridor.

The 25-storey block has a distinctive curved facade, a move away from the usual linear configurations.

Its name reflects its architecture, considered advanced at the time: three radial wings linked by a central service core. As a result, the living rooms are in an elliptical shape, resembling space-pods, while the rooms are geometric shaped.

Airy bungalow
BEVERLY MAI 31 Tomlinson Road

The deal: The 28-storey tower was sold en bloc in April last year for $238 million to Hotel Properties Ltd (HPL).

History: It was built in 1974.

Why it’s so special: It helped kick off Singaporeans’ famous obsession with attaining the 5Cs: car, credit card, cash, country club and, of course, condos.

Yes, this is Singapore’s first condo.

It was built by architect Timothy Seow, who also designed several other old favourites in LifeStyle’s feature.

Mr Seow, founder of Timothy Seow & Partners, now known as CPG Consultants, pioneered the ‘bungalow-in-the-air’ concept with Beverly Mai. The 48 maisonettes, two deluxe apartments and two-storey luxury penthouses are all linked by a central service core, giving residents privacy.

As the first condo, it had other firsts - the first to incorporate shared facilities such as a swimming pool, to have maisonettes and to have apartment units with no party walls.

It also has big balconies, inspiring residents to build gardens in the sky.

Prefab boxes
THE HABITAT 1 & 2 2 & 3 Ardmore Park

The deal: Property developer Wheelock Properties bought Habitat 1 for $180 million last year, and Habitat 2 for $103.88 million in 2005. The site of Habitat 2 and its neighbouring Ardmore View, which was also sold en bloc, is making way for Ardmore II condo. Habitat 1, which is still standing, will become Ardmore III condo.

History: The condo was completed in 1984, and was designed by local firm

RDC Architects in association with internationally renowned American firm Moshe Safdie & Associates.

Why it’s so special: The two blocks can be considered a local version of Montreal’s Habitat ‘67, a housing project done by Moshe Safdie for the 1967 World Exposition. The Canadian project, today a heritage landmark, pioneered the design and implementation of three-dimensional prefabricated housing. Each unit, resembling a box, was constructed elsewhere and connected together on site. There are 158 units.

Singapore’s version is similar but on a smaller scale - there are just 61 units in both blocks.

It makes use of the same concept as in Montreal - vertically stacked precast boxes with hanging roof terraces, giving the condo a three-dimensional facade.

Both towers have single-storey units and maisonettes that overlook a garden with a pool and squash courts.

Have 40- To 60-year Leases In Land-Scarce Nation

Source : The Straits Times, 6 Aug 2007

With Singapore a Little Red Dot, land is at the same time scarce and precious.
I would like to make one suggestion.

Now, most housing is either freehold or leasehold of 99 or 999 years.

Given that the earliest an individual turns home-hunter is usually at a certain stage in his life - such as marriage or career success, which puts him roughly in his mid-20s to early 30s - and given that the lifespan of the average individual is usually not more than 80 years, I suggest that the authorities consider leasing out residential land parcels for between 40 and 60 years.

This will have many benefits, such as greater affordability and more housing options, and greater flexibility in urban planning and future enhancement of such land parcels as the demographic landscape changes.

The obvious downside is less attraction of such land parcels for investment and speculation.

On the other hand, they will give the owners the opportunity to develop a greater rootedness to their home for their lifetime, without having to worry about the spectre of a collective sale.

Tan Kah Tian

En-Bloc Sale Frenzy: Concerns Of A Home Owner In Singapore

Source : The Straits Times, 6 Aug 2007

The recent spate of announcements from the Government on spiralling home property prices is indeed a concern for those who intend to make Singapore a home.

These include the masses, the middle class, the affluent who are citizens, as well as permanent residents with many friends and relatives here.

There is also the spectre of Singapore becoming a less attractive place for expatriates to come here to work. If left unchecked, all the efforts to brand Singapore as a truly cosmopolitan place may be derailed for several years until our property prices and rental rates are attractive in comparison to other regional hubs.

Several of the measures introduced of late are to ensure that en-bloc activities do not get out of hand, as well as to have those in the property sector to be more objective in their announcements to the public.

Hopefully, property developers and property analysts will heed the Government’s call, lest the Government is forced to implement some harder measures to slow the rate at which prices are going up.

That said, two things have still to be addressed.

Firstly, prime property developers need to realise that the headlining of the top psf prices fetched at their developments does have an impact on the rest of the market, extending all the way to the mass market.

The sentiment among sellers, and expressed by the agents marketing their properties, is ‘if a unit in Paterson Road can sell for $5,000 psf, then why can’t the unit in nearby River Valley sell for $2,000 psf’.

Speaking of agents, they should be more responsible and not engage in activities that incite speculative sentiments among prospective buyers.

While looking at some investment grade properties recently, an agent marketing a unit in District 10 told me that property prices will top $8,000 psf in 3-5 years’ time and the unit that I was looking at was therefore a steal.

Another agent, in collusion with other agents, engaged in options trading.

While wondering if that was legal at all, options trading has the effect of taking advantage of the anxieties of potential buyers and making them buy at prices that are not even reflective of the prevailing market prices.

As Minister Mah Bow Tan mentioned recently, such buyers may regret buying at almost inflated prices, and may suffer considerable losses eventually.

From what I understand, options trading, involving agents who sign these options with sellers, is fairly rampant in prime areas.

Options trading is a flipping activity, and drives property speculation - where agents are themselves involved, this is both unethical as well as a sign of the property marketing becoming unhealthy.

I hope the authorities can look into this and come up with measures to stop this too.

Gene Chia Choon Hwee

Living In Risky Times

Source : The New Paper, 7 Aug 2007

The worldwide economy isn’t doing badly, but things can get worse fast

Do we need to prepare for a perfect storm that whips up a worldwide depression?
In a depression, stock and property prices can fall 80 per cent. One out of two people lose their jobs. It isn’t pretty.

Is it unlikely? Yes.

Is it impossible? No. It happened once before, 75 years ago.

Three mini-storms have hit us in recent weeks. Together, they have the potential to produce an economic typhoon.

Storm #1: Raw material prices shoot higher

Could it happen? Yes. Last Wednesday, crude oil prices hit another all-time high. Commodities like zinc, iron, copper, tin and palm oil are at or near all-time highs.
Those prices filter through the economy and boost the price of all goods. It produces inflation.

We are accustomed to harmless 2 to 3 per cent annual price increases.

To see how bad things can get, we need to take a trip to South Africa’s northern neighbour, Zimbabwe. Its inflation rate has reached 9,000percent per year.

One expatriate from Zimbabwe complained: ‘The price I paid for my home 10 years ago buys only one bunch of bananas today.’

Storm #2: ‘Oops, wrong policy’

The US Central bank regards the inflation fight as their primary mission, and it always uses the same tool to fight it - higher interest rates.

I recently had the privilege to speak to one of the region’s central bank governors. She told me: ‘Raising interest rates in response to higher oil prices will not create one more barrel of oil. It will only slow economic growth.’

It is a great insight. Commodity prices are high because of (i) limited supplies and (ii) new demand from emerging markets.

Higher US interest rates won’t affect either one. It will not reduce inflation.

Higher interest rates, however, will slow growth and produce stagflation. It is the worst possible combination - a weak economy with high inflation.

Storm #3: Tight credit

Blame it on the hedge funds. Their investments stand at $2 trillion (one trillion is 1,000billion) and they are the biggest buyers of risky US home loans.

Not only that, they invest with borrowed money. It adds a kicker to returns. While risks are high, the returns can also be spectacular, like 20 to 30 per cent per year.

Now, many of those bets are turning bad.

Take the case of two hedge funds managed by investment banking firm, Bear Sterns. They had purchased $30b of assets with only $2.5b of investors’ money. The rest was borrowed.

Last month, Bear Sterns revealed that its investments in risky US home loans were not doing so well.

The firm apologised and said investors in one fund had lost all their money and those in the other had lost most of it. Too bad.

The banks and other lenders will get back their money. But even that required a $2.4b infusion by Bear Sterns.

Since then, conditions have worsened.

Nearly every day, another hedge fund closes down or halts redemptions. Losses are in the tens of billions and climbing.

Greed vs Fear

In the battle between greed and fear, greed had the upper hand. Now, fear is coming on strong.

The change is due to risky US home loans.

Our home loans work like this:

- We borrow money from a bank. Then we repay the loan with interest. Simple.

- It’s different in the US. First, banks and finance companies make home loans.
- Then they sell them to underwriters who put a few hundred into a package and re-sell it as a collateralised debt obligation (CDO).

CDOs are unique because investors buy debt plus a queue number. If you go for high risks and returns, you take a low number, like 1.

That puts you in the ‘equity tranche’ also known as ‘toxic waste’. You are the first in line in the event of default.

- The first 5 per cent of defaults get paid by this tranche.

- The next 5 per cent of defaults go to the BBB group.

Example: If 10 per cent of a CDO’s home loans defaulted, all losses would be assigned to these two tranches. Those investors would lose their entire investment.
The higher-rated A, AA and AAA tranches would suffer no losses.

It isn’t widely understood that the queue system of CDOs means their ratings are not comparable to corporate debt.

Moody’s data shows that from 1983 to 2005, the average default rate on Baa corporate bonds was 2.2 per cent. For Baa CDOs, it was 24 per cent.


The system has worked well for two groups.

- First, banks and finance companies got access to a seemingly endless stream of money which they plowed back into more home loans.

- Second, practically anyone who could sign their name got a loan.

Sub-prime borrowers with low incomes or bad credit records found they were suddenly popular with lenders who offered super-easy terms like (i) no money down, (ii) 40-year loans, (iii) low ‘teaser’ rates in early years and (iv) interest-only loans with partial repayments.

The latter works like a credit card. It allows payment of part of the interest with the rest rolled over. It helps cash flow but the debt keeps growing like a balloon.

By Larry Haverkamp (Doc Money)

Short-Term Land Leases Will Lead Us Nowhere

Source : The Straits Times, 13 Aug 2007

The writer of ‘Have 40 to 60-year leases in land-scarce nation’ (ST, Aug 6) focuses on the spectre of collective sales while ignoring the positive sides of renewal and asset appreciation.

The 99-year leasehold concept is the bare minimum threshold to retain residual values for property. Short-term leases denote things temporal. The downside of short leases for housing would preclude the erection of nice buildings and those of lasting design. Who will spend a fortune to build a beautiful landmark to be torn down 40 years later?

Buildings are designed to last over 100 years. Buildings, especially the high-rise ones, on 40-year leasehold land still need to comply with all construction specifications and structure safety design of national standards. Property should not be regarded as durable consumable goods like cars and TV sets. Can you imagine the magnitude of waste to demolish all such solid structures hardly before you get used to seeing your homes?

What benefits are there for homeowners and town planners if the structures are to be reduced to ground zero within 40 years? Can developers compromise building codes with costs? Would the prices be cheaper? Where is the intrinsic value of asset appreciations for its citizens if everything is temporal?

The perception of house ownership on such short lease becomes one of depreciating commodity. There is no resale value and no appreciation of one’s investment. Where is the value of posterity and asset enhancement living here? Why stay in a place where things are temporal?

We should not forgo the forest trying to protect one tree. From the economic point of view, there are upsides to collective sales. In a nutshell en-bloc sales multiply one’s investments manifold while enabling society to accelerate its tempo of developments. Moving to another area with plenty of hard cash may not necessarily be a bad thing.

A country will not progress without renewal and improvement of its infrastructure and landscapes. Short-term land leases will lead us nowhere.

Paul Chan Poh Hoi

En Bloc Sale: Work Starts Even Before All Move Out

Source : The Straits Times, 13 Aug 2007

Amid all the stories on collective property sales readers of The Straits Times have come across, mine in Balmoral View has a twist.

The developer has moved in equipment to build a showflat even though seven units of this 22-unit condo are still occupied.

It means we cannot use the visitors’ carpark and the recreation areas, apart from having to tolerate the dirty swimming pool, noise and dust. In the meantime, we are still billed for monthly maintenance.

Yes, our condo was an early bird in the ‘en bloc wave’, and prices paid to unit owners were low compared to the current level. We accepted the deal, and the last unit must be vacated by November.

But what right has the developer to rush in before everyone moves out?

Some to-ing and fro-ing with Building and Construction Authority officials revealed that, although the deal was completed in May, the developer had already applied for and got the necessary approvals from the Urban Redevelopment Authority (URA) to build a showflat in February last year.

Did the URA check with the Strata Titles Board on the legality of such a move, given that there are residents who do not need to move out until November?

By mid-June, heavy construction equipment was moved in and the construction of the showflat is now in earnest. The recreation area has been cordoned off.

Also, I see obvious safety concerns with children playing in the compound, especially with wooden scaffolding less than a couple of metres from the swimming pool.

I understand the developer’s haste to catch the hot property market but this is at the expense of residents still living on the estate.

Can the authorities enlighten us on this unsatisfactory situation?

Chio Tan Seng

UOB Clarifies Its Home Loans Stand

Source : The Business Times, 13 Aug 2007

We would like to clarify your report, ‘UOB tightens up on home loans in face of dizzy market’ (BT, Aug 9).

Firstly, the article mentioned that ‘UOB has been lending only 80 per cent of a home’s valuation, even though most banks are willing to stump up 90 per cent of the selling price’. This is inaccurate. The bank is a market leader and aligns itself with market practice.

Thus, if any customer submits a loan application for up to 90 per cent of the property’s valuation, whether the bank grants the loan will depend on factors including the creditworthiness of the borrower as well as the merits of the property. The bank would consider the loan application favourably if the borrower meets the bank’s criteria.

Secondly, the article also highlighted that ‘UOB has also decided to put its own cap on valuations, which appear more conservative than the current market prices’. The bank does not have a policy on valuation caps.

Market conditions change very quickly and if there is a valuation cap, adjustments in valuations will have to be made as well. Thus, any cap in valuations will only complicate the loan and approval process.

The article also incorrectly quoted Eddie Khoo, UOB’s executive vice-president, personal financial services, as having said ‘we require a higher cash portion’. He did not make such a comment.

He was also quoted as having said that ‘more than 80 per cent of UOB’s home loans were for owner occupation and that foreigners accounted for 20 per cent of home loan customers’. This is inaccurate. He said foreigners account for 10 per cent of home loans.

For the record, UOB grew its Singapore home loans book by 15 per cent for the 12 months ending June 30 2007, outpacing the industry average.

Kevin Lam
Head, Loans Division
United Overseas Bank

West Coast Condo Sold Out In Less Than Two Weeks

Source : The Straits Times, 13 Aug 2007

Buyers pay average of $880 psf for the 659 units at The Parc project

All 659 units of The Parc Condominium in West Coast Walk have been snapped up in less than a fortnight since the start of the month.

Prices for the freehold 24-storey condominium went as high as $1,040 per sq ft (psf) for several coveted high-floor units.

Overall, the apartments were sold at $880 psf on average, having risen from an average of about $820 psf at the start of sales.

Collective sale sellers of the former Westpeak condominium, on whose site The Parc now stands, got the first bite of the cherry on July 31. Other buyers joined in later.

The last unit was taken up by 6pm on Saturday, after which sales staff of the condominium’s sole marketing agent, Savills Singapore, threw a celebratory party at the show-flat.

The most common type of unit are three-bedders, ranging from 1,216 to 1,302 sq ft. There are 282 of them, or nearly 43 per cent of all homes. The condominium also has apartments as small as 667 sq ft and three penthouses at about 3,681 sq ft each in size.

Buyers were mostly Singaporeans, with foreigners making up less than 20 per cent of the purchasers, said the firm’s managing director, Mr Michael Ng.

The Singaporean buyers included young families and older people looking for retirement homes or homes for their children, he said. Foreign buyers included those from Hong Kong and Indonesia, he added.

Developed by construction and property group Chip Eng Seng and a Lehman Brothers unit, The Parc is near Clementi town centre and a short drive away from the National University of Singapore, Singapore Polytechnic, Singapore Science Park and one-north in Buona Vista.

Savills said professionals and lecturers from these places are potential tenants. The condominium features recreational facilities such as a 50m lap pool, jacuzzi and a toddlers’ pool on a relatively large site of 366,432 sq ft.

Chip Eng Seng bought Westpeak in a collective sale last April for $206.09 million, which worked out to $348 psf of potential gross floor area, inclusive of a development charge then estimated at $21.5 million.

Lehman Brothers came in for an equal share of the project last October.

Meanwhile, Chip Eng Seng soft-launched a high-end project with about 70 units in Peck Hay Road, near Cairnhill Circle, about a month ago.

It has since sold close to 50 per cent of the development - which sits on the former Venus Mansion site - at about $2,500 psf on average.

Next up for the developer will be the launch of a small, luxury condominium in Grange Road.

US Credit Woes Seen Weighing On Singapore

Source : TODAY, Monday, August 13, 2007

SINGAPORE share prices are expected to remain under pressure this week from the spillover impact of turmoil in the United States housing market sparked by loans to lowquality borrowers, analysts said.

Like other regional stock exchanges, the local market succumbed to a sell-down last Friday, despite news that its economic growth came in better than expected in the second quarter to June.

The Straits Times Index closed at 3,359.19 on Friday, down 76.86 points or 2.24 per cent from the previous week.

In the week ending Aug 10, average daily volume for four days totalled 2.44 billion shares worth $2.70 billion, compared with 3.38 billion shares valued at $3.23 billion last week. There was no trading last Thursday due to the National Day Holiday.

“I suspect we will continue to see the impact ripple through financial institutions around the world,” Mr Song Seng Wun, a regional economist at CIMB-GK in Singapore, said of the US fallout. “It is a bit early to tell whether this is contained or the beginning of something more serious as far as the credit markets are concerned.”

DMG and Partners senior dealing director Gabriel Yap expects market volatility to continue for a few more days before stabilising, if no more funds report any major fallout from exposure to the US sub-prime sector.

Stock markets worldwide plummeted last Friday, a day after France’s BNP Paribas suspended three funds open to the US subprime market, which involves lending to borrowers with poor credit histories. There are concerns the problem could spread into the larger economy and affect consumption and investments.

Fraser Securities research head Najeeb Jarhom said the strong domestic economy and corporate earnings growth prospects should cap the index’s downslide at 3,200. — AFP

Telling Turbulence - Central Banks May Have Underestimated Credit Crisis

Source : TODAY, Monday, August 13, 2007

WASHINGTON — Recent turbulence on global financial markets suggests that central bankers’ assurances about the credit crisis perhaps underestimated the scope of the problem.

World stock markets seesawed violently last week: While the Dow Jones Industrial Average cut its losses last Friday,closing 0.23 per cent lower after Federal Reserve interventions, other stock markets landed in the mud.

London’s FTSE 100 plunged 3.71 per cent, the CAC 40 in Paris dropped 3.13 per cent and any news of the United States’ subprime mortgage crisis, which has begun to contaminate the world economy, sent investors running for the hills.

However, earlier last week, economic leaders had offered reassuring words to calm the markets. Last Tuesday, the Fed issued a statement that took note of the “volatile” markets, but warned inflation remained its top risk for the world’s biggest economy.

The previous week, the president of the European Central Bank, Mr Jean-Claude Trichet, said the market volatility “can be interpreted as a phenomenon of normalisation of risk pricing”.

US Treasury Secretary Henry Paulson echoed that tone, stressing the health of the economy and saying “risk is being repriced”.

“For the moment, a change in monetary policies seems unlikely because the central banks view the tensions as temporary, and above all not private-sector financial problems,” analysts at French investment bank Natixis wrote last Friday in a note to clients.

In a matter of days, however, a “normalisation of risk pricing” turned into panic, forcing the central banks to massively intervene, injecting liquidity into the markets.

For economist Frederic Dickson, of DA Davidson, the combined actions “triggered heavy selling in the equity markets as traders interpreted these actions as a tacit admission that the current credit crisis is more severe than previously perceived, and threatens the economic expansion in the US and European countries”.

And their interventions still may not be enough: The markets are clamouring for Fed chairman Ben Bernanke to cut interest rates. The Federal Open Market Committee (FOMC) has held the key federal funds rate unchanged at 5.25 per cent for 13 months.

“I suspect Mr Bernanke would like to avoid that as it sends the message that the FOMC, as recently as Tuesday, was underestimating the problem,” said Mr Joel Naroff of Naroff Economic Advisors.

Some analysts say the Fed can only blame itself for the quagmire. By slashing interest rates to 1 per cent in 2003 to fight deflation, the central bank flooded the market with cheap money, which led to excessive risk-taking. And by riding to the rescue in times of distress, as it did when the dot-com bubble burst about seven years ago, the Fed has encouraged bad habits among investors.

“In effect, the central bank is promising at least a partial bailout of bad investments,” Mr Gerald O’Driscoll, a former vice-president of the Federal Reserve Bank of Dallas, wrote in a commentary in the
Wall Street Journal on Friday.

“If investors come to expect that the policy will persist, then they will deliberately take on additional risk without demanding commensurately higher returns,” he wrote.

Investors now expect the Fed to make an urgent rate cut — before its next planned FOMC meeting in September. “The Fed will probably wait a few more days to see if things come under control, but they may not be able to wait that long,” said Mr Naroff. — AFP

Zooming to a housing estate near you

Source : TODAY, Monday, August 13, 2007

GO-KART racing could become a regular feature in Singapore's housing estates soon.

Giving the thumbs-up after zipping around in one of these powerful little racing machines at a community event in Sengkang yesterday, Parliamentary Secretary for the Ministry of Community Development, Youth and Sports Teo Ser Luck, said: "The possibility is there for any heartlands that have their roads available. We'll plan it out as soon as we can.

"If it's a month's time, it will be great. If not, I don't see that we'll wait too long."

Largely popular in Europe, a go-kart is a small car made of an open frame on four wheels, and used in races on a circuit, usually no longer than one kilometre.

Singapore will host its first-ever Formula 1 race on Sept 28 next year, and holding go-kart races in the heartlands will bring the people closer the sport, said Mr Teo.

"When you have go-kart carnivals like that, you can have display booths, we can bring in F1 literature to the heartlands and let them understand," he said.

There might even be a chance for go-karts to race on the actual F1 track at Marina Bay when it is ready, but this would depend on public reception, Mr Teo said.

Yesterday's Go-Kart Mania, which was flagged off by guest of honour, Prime Minister Lee Hsien Loong, saw Mr Teo and four other Members of Parliament — Charles Chong, Lee Bee Wah, Lam Pin Min and Michael Palmer — zip around a 300m track. After several laps, Ms Lee beat her male parliamentary colleagues to take the chequered flag. — ANSLEY NG GO-KART racing could become a regular feature in Singapore's housing estates soon.

Giving the thumbs-up after zipping around in one of these powerful little racing machines at a community event in Sengkang yesterday, Parliamentary Secretary for the Ministry of Community Development, Youth and Sports Teo Ser Luck, said: "The possibility is there for any heartlands that have their roads available. We'll plan it out as soon as we can.

"If it's a month's time, it will be great. If not, I don't see that we'll wait too long."

Largely popular in Europe, a go-kart is a small car made of an open frame on four wheels, and used in races on a circuit, usually no longer than one kilometre.

Singapore will host its first-ever Formula 1 race on Sept 28 next year, and holding go-kart races in the heartlands will bring the people closer the sport, said Mr Teo.

"When you have go-kart carnivals like that, you can have display booths, we can bring in F1 literature to the heartlands and let them understand," he said.

There might even be a chance for go-karts to race on the actual F1 track at Marina Bay when it is ready, but this would depend on public reception, Mr Teo said.

Yesterday's Go-Kart Mania, which was flagged off by guest of honour, Prime Minister Lee Hsien Loong, saw Mr Teo and four other Members of Parliament — Charles Chong, Lee Bee Wah, Lam Pin Min and Michael Palmer — zip around a 300m track. After several laps, Ms Lee beat her male parliamentary colleagues to take the chequered flag. — ANSLEY NG

Bringing Go-Kart Racing To The Heartland

Source : The Straits Times, Aug 13, 2007

LETS RACE: PM Lee checks out a go-kart at the Sengkang West National Day Carnival as Ang Mo Kio GRC MP Lam Pin Min (left) looks on. -- ST PHOTO: EDWIN KOO

PRIME Minister Lee Hsien Loong yesterday flagged off the first heartland go-kart race.

Five Members of Parliament joined in the fun, taking to the wheel at the Sengkang West National Day Carnival.

Ang Mo Kio GRC MPs Lee Bee Wah and Lam Pin Min, and Pasir Ris-Punggol GRC MPs Teo Ser Luck, Michael Palmer and Charles Chong got all decked out in black jackets and helmets for the event.

More such races in the heartland are being planned to tie in with the first Singapore Grand Prix in September next year.

Mr Teo, Parliamentary Secretary for Community Development, Youth and Sports, said: 'We can't bring Formula One cars to the heartland, but we can create awareness of car racing and F1, and give residents a taste with go-karts.'

Such events are not just for race enthusiasts, he added, but bring families and residents together.

As to whether the F1 street circuit downtown could be used for go-karting, Mr Teo said this could be explored when the circuit was ready.

Currently, the only go-kart track here is in Jurong.

Yesterday, some 150 residents paid $15 each for a 15-minute spin on the temporary circuit: a 100m stretch of Sengkang East Way.

Among them was musician Jeremy See, 31, who said he enjoyed the thrill: 'It was right at my doorstep, so I decided to try it.'

About 3,000 residents attended the carnival, where PM Lee watched stunt bikers perform, toured game stalls, played an arcade car-racing game with three residents and saw several children demonstrate their go-karting skills.

He also viewed six race cars, two of which were built by NUS engineering students, and displays by the Singapore Motor Sports Association.

Leonie Parc View

Leonie Parc View. Located within the verdant enclave of the prime Leonie Hill, the statuesque 29-storey Leonie Parc View stands like a beacon in an urban oasis. Its sleek façade exudes modern elegance and its lush landscaped spaces offer you the perfect private retreat.

Rising above through your own private lift, you can admire the breathtaking views of the city from atop the Sky Terrace and bask in quiet contemplation of the beauty of life. The exciting pulse of the prime Orchard Road district is just mere steps away, but is a world of distance from the hustle and bustle.

Soak in the sights at your private lap pool, enjoy a swim with the children at the wading pool, or sweat it out at the gymnasium. Leonie Parc View offers a full range of facilities to suit your lifestyle. Spend every night in unparalleled luxury with designer fittings. A walk in the closet and luxurious bathrooms complete the comfort and convenience. With the chic, state-of-the-art kitchen, European appliances and servery, the finest gastronomic delights are just a recipe away.

By day, let the glistening rays stream in through the floor-to-ceiling windows and bask in the warmth of family and friends. By night, envelope yourself in a quiet cocoon as you unwind from the humdrum of daily life. Experience your own private urban oasis today.

Location: 22 Leonie Hill Road (District 9)

Located within the verdant enclave of the prime Leonie Hill, the statuesque 29-storey Leonie Parc View stands like a beacon in an urban oasis. Its sleek façade exudes modern elegance and its lush landscaped spaces offer you the perfect private retreat.

Map Source :

Tenure : Freehold
Expected Completion Date: Dec 2011
Site Area : 33,000sqft
Total Units : 44 (One 29-Storeys Tower)

Unit Types:
4BR ~ 2013sqft or 2250sqft
Penthouse/Sky Villa ~ 2906-6975sqft

Price: from $3200/psf

-Pond with Deck
-Entry Waterwall and Water Feature
-Swimming Pool
-Sunbathing Deck
-Children’s Wading Pool
-Jacuzzi Seat
-Function Room
-Restroom & Steam room
-BBQ Area
-Children’s Playground
-Sky Sanctuary (14th Storey)