Tuesday, September 25, 2007

Developers To Pay Higher Prices For En Bloc Sales As New Rules Kick

Source : Channel NewsAsia, 25 September, 2007

Picture : Pearlbank Apartments

En bloc prices are set to go up when the new rules in the Land Titles Strata Bill kick in next month.

According to the Real Estate Developers' Association of Singapore (REDAS), this is because property developers will have to pay more as choice sites get harder to come by.

REDAS celebrates what it calls an autumn harvest and for good reason.

The collective sale market is expected to reach a peak this year, according to a report by Knight Frank.

Developers bought S$8.57 billion worth of private residential properties en bloc in the first half of 2007.

This is more than the S$8 billion for whole of 2006.

By September, the figure topped S$10 billion, though sales also started to slow in the third quarter.

Knight Frank attributes this to US housing credit crisis, growing uncertainty in the investment market, higher asking prices, fewer prime sites and developers' well stocked land bank.

There were 13 deals from July to September, compared to 27 for the second quarter.

There is also the recent changes to rules for collective sales.

Simon Cheong, President, REDAS, says: "Many people are still trying to digest the new en bloc rules, and I think in the process of digesting, definitely I think there will be a pause and because of there are consequences on the new en bloc rules that even the lawyers are trying to understand. But irrespective of this eventually I think it will be the process of the en bloc is a longer process, so as a result it will probably slow down the supply of land."

And REDAS says it is expecting prices to rise as a result.

Simon Cheong says: "I think almost for sure the en bloc prices will be higher simply because to entice more people to sign up, they would want a higher price. So for us as a developer, we're already anticipating, it'd be more difficult to get choice land in the near future, and if you get it, it will be at a higher price."

Mr Cheong is also CEO of SC Global Developments.

With higher replacement cost for land banks, prices of new developments are also expected to go up.

REDAS says it is fairly bullish in its outlook for the property sector in the next year due to the sheer health of the economy, and several factors that are going right for Singapore - the environment, infrastructure and its position as a global city. - CNA/ch

Property Agents To Be Certified In Move To Regulate Industry

Source : Channel NewsAsia, 25 September, 2007

To prevent property agents from committing unscrupulous practices, the Institute of Estate Agents (IEA) wants them to be certified.

The certificates issued will show that the agents have signed up to a code of conduct and ethics.

Applying for the certificates is voluntary but is largely seen as another step towards industry self-regulation.

For some one looking for a place to buy or rent, having a good property agent is crucial.

Related Video Link - http://tinyurl.com/ynmpnw
Property agents to be certified in move to regulate industry

This is why the IEA wants its members to be bound by a code of conduct.

It requires its agents to attend professional development courses and be subject to a mediation board looking after complaints, as well as a disciplinary board.

Low Swee Kim, Second Vice President, IEA, says: "The whole process will be more transparent and they can be held accountable because the institute will look into any complaint about malpractice by the agents."

So the IEA is issuing the certificate to all its 800 odd members and wants to attract new members to sign up.

Associate Director of Coldwell Banker, Santa Ashok, who has been in the business for more than 14 years, clearly sees the benefits of the new certificate.

He says: "It's good (that) there is a body coming into regulate all these errant agents who are tarnishing our industry."

And certification can only be positive for property hunters.

The idea is that certification can help stamp out bad practice that can lead to complaints like charging twice for commission and taking advantage of inexperienced and illiterate customers.

According to the Consumers Association of Singapore, complaints against property agents have gone up.

For the first nine months of last year, it received 543 complaints and this year, the number rose to 557.

The IEA hopes that the Inland Revenue Authority will endorse its effort for industry self-regulation. - CNA/ch

MPG Berth Wins First White Site At Marina View

Source : Channel NewsAsia, 25 September 2007

The first white site at Marina View has been awarded to MPG Berth, a joint venture involving Macquarie Global Property Advisors.

MPG Berth submitted the top bid of more than S$2 billion for the 10,238.4 square metre site.

This works out to more than S$1,400 per square foot per plot ratio.

According to one estimate, the site may yield more than 1.1 million square feet of net lettable office space.

A second white site at the Marina View area has also been placed for tender. - CNA/ch

Work To Start On S$60m Clubhouse For SICC

Source : Channel NewsAsia, 25 September, 2007

The Singapore Island Country Club (SICC) is building a new S$60 million clubhouse.

After teeing-off the ground-breaking ceremony, members then swapped golf clubs for spades to turn the earth.

The new clubhouse will include a 600-seat banquet hall, a spa and wellness centre and specialty restaurants.

The current clubhouse, with its distinctive A-frame facade, will be converted to a separate wing of the new project.

It will house a heritage centre that will display the club's history. - CNA/so

Choice Units For Sale. Agents Welcome Cobroke.

1. Ardmore Pk Blk 15, Low Flr, 2885sqft 4+1 bdrm, Maintenance $1.1k, Tenanted $15k till July 09. Asking $8.45m

2. Ardmore Pk Blk 9, Low Flr, 2885sqft 4+1 bdrm, Maintenance $1.1k, Tenanted $11.5k till Jan 08. Asking $8.35m

3. Spring Grove Blk 53, #01-xx, 1335sqft 2+1 bdrm. Maintenance $246. Tenanted $3800 till 21/06/08. Asking $2.25m

4. Valley Park Blk 475, #14-ABV, 1701sqft, 3+1 bdrm. Vacant. Asking $2.8m

5. Valley Pk Blk 475 Low Flr 1658sf 3+1+1 Pool View. Vacant. Asking $2.58m neg.

6. Leonie Grdn, 99yrs Leasehold Blk 23 #10-ABV 2540sf 4+1. Tenanted $6200/- 2nd Jan 09 Asking $4.9m. Enbloc Potential

7. Leonie Twr, Freehold, Blk A 3250sqft #12-ABV $250k Reno (NEW). Asking $5.9m. North South Facing. Enbloc Potential

8. The Seaview Low Flr , Studip 560sf $1380psf neg.

9. Pebble Bay Blk 4 #01-xx 1808sqft 2+1 Vacant $980psf.

10.The Makena Blk 121, #17-ABV (Sea View), 1618sqft 3+1 bdrm, Tenanted $4,500 till Sep 2008. Asking $2.59m

11.The Makena Blk 125, #21-ABV (Sea View), 1744sqft 4+1 bdrm, Sold with vacant possession. Asking $2.96m

12.Marina Bay Residence, #45-ABV, 710sqft Studio, TOP 2010. Asking $1.85m

13.One Jervois Blk 7, #10-ABV, 1959sqft 4+1 bdrm, TOP 2010. Asking $3.23m

14.Paterson Res #08-BELOW (Pool View), 1496sqft 4+1 bdrm, TOP 2008. Asking $4.11m

15.Paterson Res #08-Below, 1496sqft, 4+1 bdrm, TOP 2008. Asking $4.19m

16.Paterson Res #08-ABV, 1658sqft, 4+1 bdrm, TOP 2008. Asking $4.61m

17.Paterson Res #12-ABV, 1658sqft, 4+1 bdrm, TOP 2008. Asking $4.73m

18.The Cosmopolitan Blk 202 #30-ABV, 1679sqft, 4+1 bdrm, TOP 2007. Asking $4.2m

19.The Cosmopolitan Blk 200 #35-ABV, 1324sqft, 3+1 bdrm, TOP 2007. Asking $3.31m

Award Of Tender For White Site At Marina View (Land Parcel A)

Source : Urban Redevelopment Authority (URA) News Release, 25 September 2007

Award of tender for white site at Marina View (Land Parcel A)

The Urban Redevelopment Authority (URA) has awarded the tender for the white site at Marina View (Land Parcel A) to MGP Berth Pte. Limited. The company submitted the highest bid in the tender for the site.

The tender was launched on 30 May 2007 (http://www.ura.gov.sg/pr/text/2007/pr07-54.html) and closed on 19 September 2007 (http://www.ura.gov.sg/pr/text/2007/pr07-99.html). The Land Parcel was offered for sale on a 99-year lease.

The particulars of the awarded Land Parcel and the successful tenderer are:


For media enquiries, please contact:

Ms Serene Tng
Manager, Public Relations
DID: 6329 3224
Email: serene_tng@ura.gov.sg

Credit Crunch Set To Hit Hardest Next Year: IMF Chief

Source : The Business Times, September 25, 2007

(MADRID) Most of the impact of the global credit crunch will be felt in 2008 and the United States will be hardest hit, International Monetary Fund managing director Rodrigo Rato said yesterday.

World economic growth should remain high next year but looks set to be below the levels of 2006 and 2007 and downside risks increase the longer financial markets remain in crisis, Mr Rato told a seminar in Madrid.

'Credit markets are correcting, but slowly, we aren't at a stage of normality,' he said, adding that most countries should be able to cope with the financial conditions.

'It has an effect on the real economy which will be felt more in 2008, with greater intensity in the United States, less in other areas,' he said.

Mr Rato added that an IMF forecast of 3.3 per cent economic growth for Spain in 2008 had to be cut.

Regions with strong currencies could lose some competitiveness, he said.

'Strong currencies have advantages from the point of view of economic stability. They put some pressure on competitiveness,' he said. -- Reuters

HK Pips S'pore In Corporate Governance

Source : The Business Times, September 25, 2007

Report also notes 'palpable lessening of pressure for reform' in Asia

The Republic has lost the top spot among Asian nations for its standard of corporate governance, in the latest survey by the Asian Corporate Governance Association (ACGA).

Hong Kong has beaten Singapore to pole position, thanks to its greater tenacity in dealing with difficult reform issues and its drive to keep pace with international regulatory standards, ACGA said.

The association's fourth survey of corporate governance in Asia, CG Watch 2007, ranked 11 Asian markets according to their corporate governance standards defined in terms of rules and practices, enforcement, political and regulatory environment, accounting and auditing standards, and overall culture.

ACGA's last survey in October 2005 saw Singapore in the No 1 spot and Hong Kong at No 2.

The reversal of positions, ACGA's secretary general Jamie Allen explained, is due to a range of reasons - one of which is that Hong Kong 'continues to grapple with some difficult reform issues and its regulatory officials are well aware of the distance between local norms and international standards.

'Singapore, in contrast, gives the impression that its reform process has reached an acceptable plateau - to be fair, many of its disclosure standards are higher than those of Hong Kong - while its officials seem less concerned that some key local rules and practices are not in line with global best practices,' he said.

He noted that Hong Kong had better 'private' enforcement by the market, greater regulatory transparency, greater media freedom and discussion, and more corporate responsiveness to investors' views.

Mr Allen went on to observe that even though the process of reform is continuing in Singapore, there is a palpable sense that the pace of policymaking has slowed.

He noted that Hong Kong was well ahead of Singapore in terms of shareholder rights and the plugging of loopholes that undermine investor protection. For example, Hong Kong has disallowed discounted stock options, required an independent vote for any voluntary delisting, and mandated voting by poll for certain major and connected transactions.

Singapore has yet to address these issues, Mr Allen pointed out.

It is an area which well-known corporate governance advocate, Associate Professor Mak Yuen Teen - Watson Wyatt's regional director of research for the Asia-Pacific - said that Singapore needed to look at. 'Shareholder rights is definitely an important concern of global investors. Singapore regulators should study it more closely to see if improvements can be made.'

But individual rankings aside, of greater concern is the 'palpable lessening of the pressure for reform' which the ACGA has noted in the region.

'Many governments, regulators and market participants have taken their eye off the governance ball,' said Mr Allen. 'Indeed, certain regulators are positively complacent about what they have achieved in the past decade, recounting with pride how much their stock markets have risen, and saying that all they need do now is to 'refine their rules' and 'improve implementation' of best practices.

'This implies a degree of regulatory perfection that does not yet exist in any Asian market,' he said.

Still, there is perhaps greater hope for Singapore. Prof Mak told BT: 'There are indications that the authorities are focusing more attention on improving the implementation of corporate governance practices here, which will augur well for corporate governance in Singapore and, hopefully, push our ranking up again.'

Japan FSA Said Sub-Prime Fallout Seen Lasting Long

Source : The Business Times, September 25, 2007

TOKYO - Japanese Financial Services Minister Yoshimi Watanabe said on Tuesday that the impact from the US sub-prime loan crisis is expected to last for a considerably long time.

Mr Watanabe's comments came after the International Monetary Fund on Monday said that the turmoil in global credit and money markets will likely continue as investors worry about the size of financial losses and where they might arise.

'Just as the IMF pointed out, the impact from the US sub-prime loan problem is expected to last for a considerably long time,' Mr Watanabe told a news conference. -- REUTERS

A-Reit Plans US$180m Developments

Source : The Business Times, September 25, 2007

Singapore's Ascendas Real Estate Investment Trust (A-Reit) will spend $270 million (US$180 million) building new business facilities in the next few months as it shifts focus to development rather than acquisitions, its chief said on Tuesday.

Chief executive officer Tan Ser Ping said A-Reit's ability to create new assets would allow it to stay on track to reach a portfolio size of $5 billion by 2010, despite stiff competition for existing assets.

'When there are good acquisition opportunities we will go for them. But if there are none, we're not going to cry. There are other things to do,' Mr Tan said in an interview.

A-Reit, Singapore's third-largest property trust by market value, currently has a portfolio of 78 business and industrial properties - valued at US$3.3 billion as of end-June.

But unlike rivals such as Mapletree Logistics, Cambridge Industrial and MacathurCook Industrial who position themselves as Reits based on regional industrial assets, its assets are all located in Singapore.

Mr Tan said A-Reit would continue to focus on the republic for growth since including overseas assets in A-Reit's portfolio would affect its cost of borrowing and change its risk profile.

The trust's main shareholder, Singapore government-owned Ascendas, last month listed Ascendas India Trust, a business trust based on Indian business parks.

'For markets such as India where you have the depth and width of potential, it's better to have separate geographically focused vehicles,' Mr Tan said. -- REUTERS

Reits Yield Impressive Gains Globally

Source : The Business Times, September 25, 2007

But some investors feel that for the US$800 billion real estate trust market, the tipping point may be at hand

Going equities way? There are now at least 68 funds specialising in listed real estate shares globally. Lately, the trusts have shown much the same volatility as world equity markets

BELIEVERS in global equities have been rewarded with 16 per cent annual returns since 2004. Believers in a different asset class 'real estate' received even bigger prizes.

Take the tax-efficient real estate vehicles called real estate investment trusts, or Reits, which proliferated globally in the past several years.

They have returned 24.2 per cent annually for the past three years and 25.3 per cent over the past five years, according to the National Association of Real Estate Investment Trusts, an industry group in Washington.

Performance in Europe and Asia was particularly strong, with the three-year average annual return coming to 27.3 per cent for Europe and 30.1 per cent and Asia, in dollar terms.But some investors think that for the US$800 billion global Reit market, the tipping point may be at hand.

Share values have been bid up in some markets to many multiples of the underlying asset value, leading some big institutional investors to cut back on their Reit holdings. For those who remain in the market, as for equity investors generally, quality is key.

Reits are listed real estate funds that buy commercial properties like office buildings, shopping malls and industrial complexes. They are required to pay out most of their earnings to investors and are exempt from corporate taxes.

Until earlier this decade, such investment vehicles were found only in the United States, Australia and the Netherlands. But driven by low interest rates and investor demand for high yields and cash flow, Reit-type markets have been created over the past decade in Singapore, Japan, France and, most recently, Britain.

Other countries have jumped in as they discovered the benefits of Reits to an ageing investor population hungry for steady cash income.

According to Property Funds Intelligence, a property investment research firm in London, there are now at least 68 funds specialising in listed real estate shares globally, up from just a handful in 2002.

Lately, the trusts have shown much the same volatility as world equity markets generally. The jump in global interest rates in late May sent Reit shares tumbling, and sent a scare through investors. Reit shares dropped 7.73 per cent worldwide in June alone. In July, they slid a further 5.11 per cent.

As the credit crisis hit in August, sparked by sub-prime lending problems in the US, investors jumped back into underpriced Reit shares, pushing prices up 2.59 per cent by the end of the month.

'There was the initial severe reaction when all shares, including Reits, were down due to overall weakness in stock market sentiment and receding liquidity,' said Wen Khai Meng, chief executive officer of CapitaLand Commercial Limited, which runs several Reits including CapitaMall Trust, the largest Reit listed in Singapore.

Mr Wen is still bullish on Reits, and on markets generally. 'Funds flow into Asia has resumed in September, and investors still have confidence in Asia and the Reit market,' he said.

Sam Lieber, founder and lead portfolio manager of Alpine Woods Capital, a global real estate investment manager in New York, noted that by June 'a lot of money came out into the sector over the last few years and ultimately pushed up prices a little too high. We thought the valuation was stretched, so we pulled back and looked for other areas'.

Brett Ward, European chief executive at AMP Capital Redding Investors, an international real estate investment group based in London, said he was worried about rising interest rates, which hurt real estate development by making it more expensive to borrow for construction or renovation.

'The market is in various stages of moving from accommodative to either neutral or restrictive monetary policy,' he said. 'The interest rate cycle is turning against the market and to that extent, I think, in many markets you have a negative spread between property yields and benchmark interest rates, which has been a source of in some cases significant concern.'

Mr Lieber said property yields had comfortably stood around 6 per cent to 7 per cent five years ago, which has since shrunk to 3.5 per cent.

'These stocks made a lot of money for a lot of people because of capital appreciation,' he said. 'Money kept flowing in and now we are seeing a pullback. It really became money chasing performance.'

Analysts pointed out, however, that investors should not overlook the quality of the assets underlying the Reit shares, which have tended to spike across the board. Mr Ward said that in the direct, transactional real estate market, repricing had occurred only at the lower quality end of the spectrum.

'Some of the secondary assets began to diverge from prime quality assets,' he said. 'At the prime level, transactions we have seen in many markets haven't provided any indication of repricing. You compare that to the listed market, and the willingness to reprice listed real estate companies seems pre-emptive.'

Flight to quality might seem a reasonable strategy under such circumstances.

'Large investors usually buy major trophy investment assets like shopping centres, office towers, and industrial parks,' said John Snowden, head of listed property securities at Colonial First State Global Asset Management. 'Provided that tenants don't go broke, you can see high levels of confidence of both cash flow and income will continue. If you put your money in C-grade office development, that is a risky proposition in many ways because often these types of property are going to be hit hard in a market downturn.'

Another factor likely to bolster Reit shares is that real estate tends not to be correlated with equities. Investors worldwide bought into the story that investing in real estate internationally brings diversification benefits in a way that stocks do not: real estate is a highly localised business and correlation among markets in different countries are very low. Thus, investing in them globally reduces risks, lowering volatility and improving returns.

'If you buy in Finland, and you can buy Nokia,' Mr Lieber said. 'But if you are getting Nokia you are getting global demand for their phones and networks.'

'Whereas if you buy Citycon,' he said, referring to a leading real estate company based in Helsinki, 'you are getting local demand for shopping centres. There is a local consumption pattern that filters into rental demand'.

Even the globalisation of real estate investing has not had a generalised effect on correlation, analysts said. Correlation among different markets became stronger for certain, said Bard of AMP Capital, especially with the global debt market playing a greater role in listed real estate.

But the 'diversification argument still holds up irrespective of the performance that people have been getting recently', he said, adding, 'The synchronisation of returns between different markets has been moderate to low, and certainly it still has not reached anywhere near the levels of global equities or global bonds.' - IHT

Throw The Book At Sub-Prime Criminals

Source : The Business Times, September 25, 2007

At the heart of the current financial turmoil is simple, old-fashioned fraud

In the wilderness: Governments around the world should implement a '3R' framework of retribution, regulation and re-engineering of the financial system to deal with the credit crunch and prevent similar crises from occurring

IMAGINE local farmers growing a crop quickly by intentionally using hazardous fertilisers and selling the produce to well-reputed international grocery chains. The food safety authorities are aware of the malpractice, but turn a blind eye to it.

In their labs, the grocery chains identify the dangerous substances, too. Nevertheless they dry the produce and sell it in attractively branded packages with quality approval seals to trusting shoppers around the globe. Several consumers die, others require medical treatment at the expense of taxpayers. Would you cry 'foul play' and demand remedial action?

The current financial turmoil, which costs investors around the world dearly and spills over into the real economy, is portrayed as a very complex phenomenon. But this noise hides a simple inconvenient truth: At its heart is old-fashioned fraud, as simple as the farmers' ruse and distributors' conspiracy in the crime.

Here is the ploy: Banks rapidly grow their loan books by granting mortgages even to borrowers who cannot afford them. They swiftly sell these risky loans to other financial intermediaries and thus clean their balance sheets. The intermediaries repackage them as 'collateralized debt obligations' (CDOs), adorn the securities with high credit ratings, and thus hide the junky nature of the underlying assets.

Then, they sell myriad slices of what essentially is a black box to investors around the globe who are lured by high interest rates and put blind faith both in the sellers' brands and credit ratings. Central banks look the other way.

In a pyramid scheme, a steady flow of new CDOs help finance the interest payments to the investors. The Pandora's Box is opened when the mortgage holders start to default and the equivalent of a run on banks is triggered.

Liquidity is drained from the system, since banks refuse to lend even to other financial institutions and investors scramble to escape from the trap. Market insiders again profit, this time from well-informed bets against the junk loans.

Financial institutions at the brink of collapse are rescued with taxpayers' money. Central banks around the world succumb to pressures to cut interest rates, which fuels global inflation. The financial problems spread into the real economy and unleash a vicious circle: The credit squeeze dampens investment in the housing sector and results in layoffs. Distressed consumers spend less and default on other loans, prompting banks to tighten credit further.

Afterwards, market insiders laconically state that, as a rule of thumb, some financial product innovations will falter. They share their joy over the fact that by now, the world has come to understand the simple truth they have always known, but never shared: CDOs cannot be priced!

Governments around the world should implement a '3R' framework of retribution, regulation and re-engineering to deal with the crisis and prevent similar developments.

In the short term, authorities must stop talking about unfortunate 'mistakes' and use the term 'crime' instead. The masterminds of the financial time-bombs and their accomplices - such as certain credit rating agencies - should be prosecuted mercilessly. Destroying the life savings of pensioners and other investors is a serious offence, especially in countries with ageing populations and insufficient retirement provisions.

Like drug trafficking, it undermines the fundament of society and thus deserves the harshest sentences that courts have at their disposal. Those criminals and their employers, rather than taxpayers, should pay for the damage using the cash they horded.

Criminal convictions and significant compensation payouts will help deter similar crimes.

In the medium term, governments must tighten regulation in certain financial arenas. As for other legal subjects, compliance must be mandatory, not just voluntary.

Mortgage features, such as low downpayments and deferred debt-service, should be scrutinised to protect financially naive consumers. Hedge funds must be closely supervised, too.

Besides, the authorities must lift the veil hiding the dubious practices of credit rating agencies and regulate them, too. To eliminate their monopoly power, which leads to abuse, national governments should consider setting up their own credit rating agencies.

The authorities also need to regulate securities more tightly. They must keep a watchful eye on financial 'innovations', including off-balance sheet investment vehicles tied to asset-backed commercial paper, which often are old tricks in new disguises.


A stricter penal code needs to be introduced to deal with financial high crime.

In the long term, the financial system must be changed fundamentally to decrease the likelihood of collapse. Most importantly, countries around the world should move from a market-driven system to a bank-centred financial architecture that puts firm limits on 'securitization'.

In the past, national banks operating in a regulated environment proved capable of financing rapid and sustainable economic development. They can serve as models for the future. For example, Germany's astonishing recovery after WWII was facilitated by strong relationships between banks and industry.

They helped the credit institutions gain first-hand information about the prospects of their clients and thus price loans efficiently. Through membership in the supervisory boards of borrowers, bankers even could influence their strategies. There was no incentive for either banks or their clients to cheat on each other since they interacted continuously.

Besides, banks kept their loans on the balance sheet and had to attract savings to finance them. With direct responsibility for the results of their lending and limited financing options, they were motivated to allocate scarce resources to the best uses, which involved extending credit prudently.

Since they kept assets and liabilities on one balance sheet, it was easy to match maturities and risks. This limited the risk of illiquidity. Depositors, shareholders and regulators could understand a bank's risk profile better than now, since it did not offload risky assets into black holes in global markets.

Intelligent financial supervision and well-informed, prudent lending practices ensured that in contrast to what happened in Japan and China, German banks did not accumulate significant amounts of bad debt in the past.

Countries around the world, especially those with large underfunded 'sunset populations', cannot afford to leave the future of their citizens to the vagaries of markets that are cornered by fraudulent ring leaders with insider knowledge, who pose as emperors in new clothes.

The 3R framework will help governments regain control over the financial system and create a solid fundament for future generations.

The writer is a former professor at Peking University and McKinsey & Co Management Consultant. He is a global leadership expert at the National University of Singapore (NUS) Business School and the author of 'The Art of Chinese Management'. He can be reached at schlevogt@schlevogt.com.

How About A Committee On CPF Returns?

Source : The Business Times, September 25, 2007


I refer to the article, 'Longevity Insurance committee may report in 6 months' (BT, Sept 21), and the debate in Parliament on CPF returns. In reply to a question by opposition MP Low Thia Khiang (Hougang) on whether the GIC uses funds from the CPF funds to invest, Dr Ng said: 'The answer is no.'

Using a banking analogy, Dr Ng said: 'You put money in a bank and you agree that you put it there and you get 2 per cent. The bank publishes a report and says of all its earnings, it earned 8 per cent. You go to the bank and say, 'I want 8 per cent'. It doesn't work.'

He said that the government bears the liabilities in the same way the bank does. 'The Ministry of Finance has taken our liabilities. What the Ministry of Finance does with its money is (its) consideration. But . . . the CPF Board . . . promises a risk-free rate to (CPF) members. And that is how it works.'

The analogy used may not be very appropriate, because the bank's customers and shareholders are two different groups of people, who in many ways are on different sides. In contrast, for CPF members and the (ultimate) shareholders of Temasek, they are the same, the citizens of Singapore. We are all on the same side.

If Temasek (or GIC) do not use CPF funds to invest, where do CPF funds go to, since the budget is in surplus for most years?

Also, unlike the bank analogy, Singaporeans are not asking for the entire 8 per cent - just some of it to enable more of us to retire with enough money.

Since a committee on Longevity Insurance has been formed, why not also form a committee on CPF returns, or have the same committee study CPF returns too. We should be studying the causes of the problem, instead of just the solutions to the problem of Singaporeans not having enough CPF to retire on.

Leong Sze Hian,

German Fund Manager Eyes Asia Properties

Source : The Business Times, September 25, 2007

Union Investment looks to quadruple its regional portfolio over a 4-year period

GERMAN fund manager Difa Deutsche Immobilien Fonds (recently renamed Union Investment) is looking to quadruple its property portfolio in Asia over the next four years, its Asia-Pacific head has told BT in an interview.

'Right now, we have 10 properties worth about 500 million euros (S$1,055 million) in Asia,' said the group's Asia-Pacific managing director, Steffen Wolf.

'We would like to grow the portfolio value to at least two billion euros or so.' he added.

Union Investment, which owns some 15 billion euros worth of real estate across the world, last year turned its attention to Asia in search of attractive acquisitions.

Since September last year, it has acquired 10 properties in the region, including six residential projects in Japan and two office properties in South Korea.

In Singapore, Union Investment has bought two properties.

In January, it acquired Vision Crest's office block and the House of Tan Yeok Nee next door in the Penang Road/Clemenceau Avenue area for a total of $260 million from mainboard-listed property group Wing Tai.

Union Investment is now working on more acquisitions in Japan, China and Singapore, Mr Wolf said.

'We are also closely looking at Malaysia, India and Thailand,' he added.

Right now, the group's focus is on the key cities in all the countries, he said.

Asia, said Mr Wolf, is 'very strategic' to Union Investment.

The group has traditionally invested in Europe and the US, but has of late been building up its Asian team in Germany.

The logical next step was to set up a physical presence in the region, and so the group opened an office in Singapore in October 2006.

Right now, the office has just two people, but Mr Wolf wants to grow the team to six or eight by the end of the year, he said.

In Singapore, the group is looking at office properties as well as residential, retail and hospitality assets for acquisition, Mr Wolf said.

The group ideally has to acquire finished, freestanding and already leased-out buildings. It is, for example, not allowed to take on the risks involved with developing a greenfield project.

Its business model is based on collecting rents and distributing them to shareholders.

But Union Investment will not rush into acquisitions, Mr Wolf said.

The cash-rich company is in Asia for the long haul, and will be willing to wait for good acquisition opportunities to come by, rather than compete head-on with more aggressive bidders.

'We can ride through market cycles,' Mr Wolf said. 'We are not affected by crises such as the sub-prime crisis. We have a lot of cash.'

Singapore Ranked Third In World's Top Cities For Meetings

Source : Channel NewsAsia, 25 September 2007

Singapore has been ranked the world's third top city for meetings.

It stands just behind Paris and Vienna, which hold the first and second positions, based on the Union of International Associations (UIA) latest rankings.

This is the first time Singapore has been placed among the top three.

It has also moved up three notches, from fourth position, to being Asia's top country for meetings.

At the same time, Singapore maintains its 23-year standing as Asia's top city for meetings.

The Singapore Tourism Board said the country's strong showing serves as a resounding endorsement of its strengths and continued draw as a business destination.

Singapore hosted 298 meetings last year, a significant 62 percent growth over 2005.

These included the 2006 Annual Meetings of the International Monetary Fund and World Bank in September.

The tourism board noted that the number of meetings held in Singapore has more than doubled in the past five years. Last year, it accounted for 22 percent of all meetings held in Asia.

The Union of International Associations is an independent, non-governmental and non-profit body whose key activities include consolidating statistics on international organisations and their international meetings. - CNA/ir

Most Singaporeans Want Sky Gardens In Residential Areas: Survey

Source : Channel NewsAsia, 25 September 2007

The majority of Singaporeans like the idea of sky gardens in the housing estates.

This was evident from among the 7,500 who have taken part in a survey held in conjunction with the 'Remaking Our Heartland' exhibitions.

The exhibitions are making their rounds to various parts of the island to get public views on the Housing and Development Board's regeneration strategies for the housing estates.

Under the concept of New Generation of Public Housing for old estates, 62 per cent of the respondents said they liked the features of a Sky Garden. 57 per cent liked the idea of 'Housing in a Park'.

An overwhelming 97 per cent agreed that the proposals for Punggol would contribute to realising its vision of "A Waterfront Town of the 21st Century".

In response to the proposal for Yishun Town, 58 per cent said they look forward to having a modern shopping complex integrated with housing and bus interchange at the Town Centre.

Meanwhile, 43 per cent looked forward to the upgrading of existing pedestrian malls.

HDB said a total of 62,000 people have visited the 'Remaking Our Heartland' exhibitions so far.

They will next move to Yishun and Jurong East. The exhibitions will be opened daily from 10am - 9pm, from September 29 till October 3, next to the Yishun and Jurong East MRT stations.

Those wishing to give their feedback on the plans can also visit the exhibition website at www.hdb.gov.sg. - CNA/vm


More than a residence, Estilo embodies a way of life that blends the vibrant city life with quiet contemplation. Whether you are into arts, culture or history, the choice is yours - with the Esplanade and National Museum close at hand. And with the convenience of Dhoby Ghaut MRT station and major expressways, getting around the city is easy when you decide to venture beyond an exclusive enclave.

District : 09
Tenure : Freehold
Developer : Hoi Hup
Past Track Records/Recent Projects :
The Foliage (http://www.straitsconstruction.com/thefoliage/belonging.htm),
The Bale
Waterford Residence (http://www.straitsconstruction.com/waterford/location.htm)

Price : $1500-1700/psf (Subject to Changes by Developer)

Caribbean @ Keppel Bay

The Pulse of Waterfront Living
At Caribbean at Keppel Bay, every home sits just metres from the sea or a waterway, to give you the total ambience of a waterfront lifestyle. Full-height windows make the most of spectacular views, and a marina is a mere stroll away. In addition, with every amenity nearby, all your entertainment and recreational needs will be easily met. All of which make for a fashionable lifestyle at the pulse of waterfront living

...And A Marina At Your Door Step
A cable-stayed bridge connects your home to the marina on Keppel Island, so you can stroll across to your yacht, berthed in calm blue waters. It’s the perfect gateway for cruising, fishing or island hopping. Explore Sisters Island, St John’s Island and the Southern Islands. Or sail as far as the Riau Islands or Malaysia coast.

Developer : Keppel Bay Pte Ltd
District : 04 (Near Vivo City & Sentosa Genting Resort)
Tenure : 99 Years Leasehold wef 16 Aug 1999
Expected TOP Date : April 2005
Expected Legal Completion date : April 2010

Contemporary interiors with full-height windows afford you spectacular views here at the Caribbean. Enhanced with sophisticated finishes, life by the water is a unique experience.

Waterfront Living That Is Far From Ordinary

-Choice of 2-, 3-, 4-bedroom or penthouse apartments
-Private lift lobbies for most apartments
-Full-height French windows
-Built-in wardrobes
-Marble flooring in living, dining and family areas
-Timber strip flooring in all bedrooms
-Ducted air-conditioning in living, dining and family areas
-Safe in master bedroom

Price : From $1300/psf

From your home at Caribbean at Keppel bay, it's so easy to indulge in any sporting or leisure activity you fancy, because it's all at hand. Also within easy reach are the everyday amenities and conveniences you've come to expect.

Golf clubs
Tee off from Keppel Golf Club or Sentosa Golf Club, two world-class greens practically at your doorstep.

Set sail from the marina on Keppel Island. Or board a luxury liner at the Cruise Centre that's just minutes from home, then sit back and relax on the high seas.

Lush green foliage, gentle trails and picturesque views make the Mount Faber, Labrador and telok blangah hills parks ideal for a family stroll or scenic jog.

Wining and dining
With the harbourfront mall's fashionable eateries and gourmet restaurants, plus local eating spots nearby, a world of flavours isn't away. Good for a quick bite with the kids or if you prefer, a romantic dinner for two.

Brand name boutiques and trendy stores are at your doorstep, at the HarbourFront Mall. And a short drive away is the lure of the shops at Orchard Road.

Attractions galore
Ride a cable-car at Sentosa, Singapore's premier playground, and spend an interesting day at the Underwater World, dolphin lagoons, other unique highlights and historical sites. Then cap it off with a revolving ride all the way up the 110m-tall Sky Tower. From this vantage point, you'll be mesmerised by stunning, panoramic views of the Singapore skyline, as well as the Southern and Indonesian islands, and Malaysia.

Your children won't need to spend time travelling far each day, as top schools and educational institutions, among them the National University of Singapore, are only a short ride away.


Harbourfront MRT Station (NE1)
81, Telok Blangah Road Singapore 098867
How Far? 0.68 km


Vivo City, Harbourfront Centre and Singapore Cruise Centre
1, Maritime Square Singapore 099253
How Far? 0.56 km


Rosemount International School
461, Telok Blangah Road Singapore 109022
How Far? 0.77 km

International Community School (Private School)
3, Mount Faber Road Singapore 099196
How Far? 1.01 km

CHIJ St. Theresa's Convent School
160, Radin Mas Singapore 099138
How Far? 1.23 km

Radin Mas Primary School
1, Bukit Purmei Avenue Singapore 099840
How Far? 1.26 km

Blangah Rise Primary School
91, Telok Blangah Heights Singapore 109100
How Far? 1.27 km

Dive Headlong Into Adventure

For water lovers, the Caribbean provides a host of sporting opportunities. But that’s not all; there’s something for everyone. From racquet games to generous play areas for children, from cocktails at your clubhouse to friendly barbecues, you’ll enjoy many memorable days here.

-Clubhouse with Gymnasium, Steam Rooms, Games Room, Function Room, Residents’ Lounge and Open Terraces
-50m Swimming Pool with Bubble Pool, Two 25m Lap Pools, Children’s Pools and Circular Lagoon
-Open Air Jacuzzis
-Four Courtyard Fountains
-Jogging Tracks, Fitness Circuits Complete with Fitness Stations
-Three Tennis Courts And A Multi-Purpose Court
-BBQ Areas, Twelve Conversation And/Or BBQ Pavilions
-Children’s Play Areas and Plot Gardens
-Open Lawn

New Record Price For Sentosa Cove's Only Strata Landed Housing Devt

Source : Channel NewsAsia, 25 September 2007

Picture : Green Collection overlooking Tanjong Golf

A new record price has been set for a 6,600-square-metre residential site on Sentosa.

The Green Collection, Sentosa Cove's only strata landed housing development, has fetched a bid of more than S$78 million or S$1,099 per square foot per plot ratio.

Boutique developer Elevation Developments submitted the highest of eight bids received at the close of an Expressions of Interest for the site last month.

Sentosa Cove says this surpassed the last en bloc sale price of Sandy Island at $771.25 psf per plot ratio in March this year by 42.5%.

The Green Collection is the only land parcel on Sentosa Cove to have the flexibility to design and develop either strata terrace, semi-detached or detached houses with shared recreational facilities.

With a plot ratio of one, it can allow up to 20 homes with shared facilities such as a swimming pool or gymnasium to be built.

With the relaxation of foreign ownership of landed homes in Sentosa Cove, foreigners will be eligible to buy these strata landed homes.

Sentosa Cove is situated on the eastern end of Sentosa Island.

When completed in 2010, the sprawling 117-hectare development will see a total of 2,500 homes.

Elevation Developments is a boutique developer of landed residential property in Singapore.

It is associated with upmarket Good Class Bungalows including some 20 current projects in prime areas of Swettenham Road, Nassim Road and Gallop Road. - CNA/ir

Credit Crunch Unlikely To Let Up Soon, IMF Warns

Source : The Business Times, September 25, 2007

Mr Caruana said that uncertainty regarding overall losses and exposure has raised market and liquidity risks, with potentially broader implications for financial institution

WASHINGTON - Turmoil in global credit and money markets will likely continue as investors worry about the size of financial losses and where they might arise, the International Monetary Fund (IMF) said on Monday.

The lender also warned that a more severe tightening in credit conditions could not be ruled out, which could worsen the US housing slowdown as borrowers encounter fewer refinancing options.

The impact of the current global credit crunch, which began in August with rising defaults in the US sub-prime mortgage market, will likely slow the global economic expansion, the IMF said in its twice-yearly Global Financial Stability Report.

'The global financial system has undergone an important test and the test is not over yet. Implications of this period of turbulence will be significant and far-reaching,' Jaime Caruana, IMF director for monetary and capital markets departments, told a news conference.

The report pointed to future dangers for markets and investment firms.

'The period ahead may be difficult as bouts of turbulence are likely to recur and the adjustment process will take time.

Uncertainty regarding overall losses and exposure has raised market and liquidity risks, with potentially broader implications for financial institution,' he added.

'Credit conditions are not likely to normalise soon and the adjustment process may be protracted and may affect not only prices but also availability of credit,' it added.

Global growth still strong
IMF managing director Rodrigo de Rato said the impact on global growth from the credit crunch and re-pricing in credit markets will be felt in 2008 and that the United States will most likely be hardest hit.

He said world economic growth should remain strong next year but looked set to be below the levels of 2006 and 2007.

Downside risks increased the longer financial markets remained in crisis, Mr de Rato told a seminar in Madrid.

Meanwhile, Mr Caruana said emerging markets had weathered the current market storm well so far thanks to improved economic management and accumulation of reserves. Still, policy-makers needed to keep a close eye on the situation especially in countries where foreign borrowing has supported rapid credit growth.

The IMF added: 'Generally benign emerging market banking system default risk indicators continue to reflect market perceptions of healthy capitalisation and profitability, as well as diverse earnings sources and sound asset quality.'

The IMF said the rapid spread of problems from US sub-prime mortgages to other markets surprised investors and government policy-makers.

Mr Caruana said it was too early to draw definitive policy conclusions while markets dealt with the credit market problems. But closer scrutiny was needed of new financial instruments, such as securitisation and structured products, that may have contributed to more relaxed credit standards.

He said links between systemically important financial institutions, such as credit rating agencies, and off-balance sheet vehicles also needed to be examined. -- REUTERS

US Economy's Latest Ditty: The Worst Is Yet To Come?

Source : The Business Times, September 25, 2007

IT'S not clear whether the cheerful investors on Wall Street who were celebrating last Tuesday's decision by the Federal Reserve Board's monetary policy committee to slash federal funds rates by half a percentage point were paying much attention to Thursday's Congressional testimony by the US Federal Reserve chairman Ben Bernanke when he seemed to be warning that sub-prime defaults could actually surge in coming months.

But the financial markets as well as US President George Bush were in such a great mood - 'I'm optimistic about our economy. Inflation is down, job markets are steady and strong,' said Mr Bush - that the continuing credit crunch, rising energy prices and a decline in some key economic indicators were having no effect on exuberant investors who pushed the Dow Jones Industrials Average and the broader S&P index to new highs.

Yes, just like in the good old days of former Fed Chairman Alan Greenspan. Mr Greenspan incidentally was appearing on numerous television news shows and book parties trying to sell his memoirs The Age of Turbulence as his successor was addressing lawmakers on Capitol Hill where he promised to use the Fed's regulatory powers 'to address potentially deceptive mortgage loan advertisements and to require lenders to provide mortgage disclosures more quickly'.

During his congressional testimony two days after reducing the federal funds rate from 5.25 per cent to 4.75 per cent, Mr Bernanke reiterated that the Fed's main goal - cutting rates was not to bail out reckless investors but to contain the threat of an economic recession that seemed evident after new data indicated that US employment had declined in August.

'The turbulence originated in concerns about sub-prime mortgages, but the resulting global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans,' Mr Bernanke explained to the lawmakers, using dry economic jargon to highlight the potential for an economic crash that could have resulted from the crisis in the housing market and the ensuing credit crunch.

Of course, it would be difficult to show that the Fed's interest cuts last week ended up averting a wider economic crisis. But no one doubts that if anxiety returns to the financial markets in the coming week, critics will blame Mr Bernanke for providing incentives to irresponsible investors to take more risks - the so-called 'moral hazard' problem. And if inflation rears its ugly head soon, the dramatic cut in rates by the Fed will be held responsible for the mess.

In addition to rising oil prices and labour costs, inflation hawks who had opposed the rate cuts are also pointing to the rise in long-term interest rates and in the value of gold, two important indicators of inflation.

At the same time, they argue that there are no signs of an economic recession in the retail and manufacturing sectors and that the earlier warnings about unemployment were overblown.

Moreover, lower rates have helped to push down the US dollar against other major currencies, including the euro, which is, in turn, making imports more expensive and increases pricing pressures and inflation pressures.

At the same time, the fall in the value of the US dollar is also helping to increase US exports which is clearly good news for the American economy by helping the growth of many US industries and creating conditions for a reduction in the huge trade deficit.

From that perspective, the rate cut could prove to be just the kind of stimulus that a somewhat soft US economy needed. But fears of inflation cannot be discounted, especially when one takes into consideration that the rate cuts by Mr Greenspan's Fed were made at a time when the globalisation process helped counter the inflationary pressures of those rate cuts.

That is not the case today. This makes the rate cut by Mr Bernanke's Fed more risky. And when it comes to some of the most serious structural problems facing the US economy - the massive current-account deficit and the accumulating debt by households and businesses - the prospect of Mr Bernanke showering cheap money on the American economy - is certainly not going to help.

It could make things worse by encouraging financial institutions to come up with new ways to extend credit, take more new risks and ignite new financial crises.

Only 20% Of US Sub-Prime Mortgages At Risk

Source : The Business Times, September 25, 2007

No plans to scrap such mortgages as they democratise credit: US official

ABOUT 5 per cent of all US mortgages are sub-prime but only one fifth of these are at risk of default, US Department of Housing and Urban Development (HUD) assistant secretary Darlene Williams said yesterday.

Ms Williams was speaking at the inaugural Asia-Pacific Housing Forum held in Singapore yesterday where she said that there was no intention of abolishing sub-prime mortgages.

'Sub-prime mortgages democratise credit, and so we don't want to throw that option away,' she said.

Instead, the HUD's Federal Housing Administration is expected to help an estimated 240,000 families avoid foreclosure by underwriting refinanced loans of those still creditworthy.

Ms Williams maintained that some of those who defaulted on their sub-prime mortgages had poor financial literacy. 'Many did not even read their contracts,' she said.

Also speaking at the forum was Minister of National Development Mah Bow Tan who said that affordability in the public housing sector was not a problem in Singapore as people serviced their loans through their Central Provident Fund (CPF) savings, with little cash outlay.

With over 80 per cent of Singaporeans living in Housing and Development Board (HDB) flats and 95 per cent of these owning their homes, Singapore has one of the highest, 'if not the highest', home ownership rates anywhere, Mr Mah said.

Speaking to representatives of housing authorities from around the world, Mr Mah explained that there were two key government policies that helped make public housing in Singapore so successful: the Land Acquisition Act, and the use of CPF savings to pay for flats.

On public housing, he said: 'Over the years, this has developed into an implicit social contract that has laid a firm foundation for Singapore's economic, social and political stability.'

Defaults On Sub-Prime Loans 'Stabilising'

Sep 25, 2007

THE default rate for strife-hit United States sub-prime mortgages is stabilising, a US housing official said yesterday at a housing conference in Singapore.

Defaults on these loans, issued to homebuyers with low income or a poor credit history, triggered global shock waves recently and sparked intense scrutiny of Singapore banks' exposure to them.

Assistant secretary of policy development and research at the US Housing and Urban Development Department, Dr Darlene Williams, indicated that she did not expect last week's half-point US interest rate cut to affect the number of defaults significantly.

Speaking to reporters at the inaugural Asia-Pacific Housing Forum, she said: 'The hope is that the Fed rate cut would send the signal that the government is concerned and willing to continue to analyse the situation so that the market can relax.'

'We believe we still have a market that is correcting, but we don't expect any drastic changes to the rate of defaults.'

Dr Williams said sub-prime loans form only a small percentage of the US mortgage market and only 20 per cent of such mortgages are at risk of default.

'Our economic fundamentals are strong. The loan defaults are half of what they were in the 1980s and interest rates are low compared with the double-digit rates of 20 years ago,' she said.

Sub-prime loans play a role in helping people own homes, she said. 'Sub-prime mortgages democratise credit, so we don't want to throw that option away.'

The three-day housing forum is organised by Habitat for Humanity and the Singapore Institute of Planners.

At the same event, Singapore National Development Minister Mah Bow Tan shared the Republic's successful experience of housing its citizens at affordable prices.

Banyan Tree Signs On New Shanghai Property

Source : Channel NewsAsia, 24 September 2007

The resort, hotel and spa operator Banyan Tree has signed on a new property in Shanghai, China.

Singapore mainboard-listed Banyan Tree announced that it had secured the management of a new exclusive waterfront boutique hotel on one of the last available waterfront sites along the Shanghai Bund.

The hotel, scheduled to open in 2010, will add to Banyan Tree's growing presence in China.

Banyan Tree has recently announced five projects in the country, including two new city hotels in Beijing.

The resort operator has been aggressively expanding into new destinations around the world, such as Mexico, Mauritius, Turkey, Vietnam and Jordan. - CNA/ac

S'pore Among Top 3 Cities For Meetings

Source : The Straits Times, Tue, Sep 25, 2007

SINGAPORE is ranked among the world's top three cities for international meetings, according to the Union of International Associations' (UIA) latest rankings.

A news release from the Singapore Tourism Board said on Tuesday: 'In the UIA's International Meetings Statistics 2006 report, Singapore moved up one place from 2005 to third position in the Top International Meeting City category.'

The UIA ranked Paris first, followed by Vienna.

At the same time, Singapore topped the rankings in Asia, as the continent's top country and city for meetings.

The Republic surged from fourth to first position, as Asia's top country for meetings, while maintaining its standing as Asia's top city for meetings, a position it has held for the past 23 years.

The STB said the strong showing by Singapore serves as a resounding endorsement of its strengths and continued draw as a business destination.

'In clinching the position as Asia's top country for meetings, Singapore cements its position as the preferred destination in Asia for business travellers to hold their meetings.'

Residential Property Launches Gathering Speed Again

Source : The Business Times, 25 Sep 2007

Ho Bee previews Turquoise, Wheelock properties to launch Scotts Square

Waterfront living: The 99-year leasehold Turquoise at Sentosa Cove will be priced at $2,500 psf on average. Ho Bee is expected to begin sales at a preview starting on Thursday

DEVELOPERS are slowly stepping up residential property launches again, with Ho Bee Investments previewing its Turquoise condo at Sentosa Cove and Wheelock Properties (Singapore) holding the official launch of Scotts Square later this week.

Turquoise, which will have 91 apartments, will be priced at $2,500 psf on average. Ho Bee has been conducting viewings at its showflat lately for its business associates and is expected to begin sales at a preview starting on Thursday.

The 99-year leasehold project comprises three- and four-bedroom units, and penthouses.

Ho Bee will develop the six-and-a-half storey project on Sentosa Cove’s Waterfront Collection site, which is flanked by Tanjong Golf Course and waterways.

It bought the site in a tender that closed in November last year, for $919 psf per plot ratio (psf ppr).

This will be the first condominium launch in Sentosa Cove’s Southern Residential Precinct.

Ho Bee also won another condominium site (jointly with Malaysia’s IOI Group) in March this year. The duo paid $1,361 psf ppr for the plot, dubbed The Seaview Collection, and they are expected to develop it into an eight-storey condo with about 150 units.

Ho Bee is also said to have begun marketing The Orange Grove, a 72-unit freehold condo, in Indonesia.

The average price of the 12-storey project is understood to be around $3,000 psf.

It is diagonally across the road from another condo that Ho Bee began selling around January this year - the 60-unit Orange Grove Residences. Four units are left in the five-storey freehold condo. The current price is about $2,500 psf on average.

Over in the Scotts Road area, Wheelock Properties has sold about half of its 338-unit Scotts Square at an average price of $3,983 psf since July. And although it is holding an official launch for the freehold project on Friday, the group’s executive director, Tan Bee Kim, says the plan is not to sell off all the remaining units just yet.

The developer is in the midst of deciding just how many units it will sell for now, as well as the pricing. Market watchers expect the average price to inch up to slightly above $4,000 psf.

Over in the Dunearn Road location, MCL Land has sold off all but the showflat of its 163-unit cluster terrace housing development, Hillcrest Villas, in two weeks. The average price achieved for the 99-year leasehold development was around $870 psf of strata area.

HPL: Horizon Towers Sellers Extend Deadline

Source : The Business Times, September 25, 2007

Buyer will now ask for adjournment of legal proceedings

Hotel Properties Ltd (HPL) has finally secured a much-needed extension of a deadline to purchase the Horizon Towers (Picture) development.

And the listed developer will now make good on its promise to apply for an adjournment of the legal proceedings it has commenced against the sellers.

HPL announced yesterday evening that the sellers of the Leonie Hill property have officially agreed - en masse - to push back the deadline by four months, to Dec 11. This will give HPL and its partners - who collectively agreed to buy Horizon Towers for $500 million in February - the time needed to push through the en bloc sale.

The deal had fallen through in August when the Strata Titles Board (STB) rejected Horizon Towers' application for a collective sale order - on the grounds that the application was defective.

STB's decision, which came just days before the original sale completion deadline, meant there was no time for a fresh application to be filed or for a High Court appeal of STB's judgment to be heard.

HPL and its partners - Morgan Stanley Real Estate-managed funds and Qatar Investment Authority - needed the sellers to extend the deadline, but its repeated requests in recent weeks went unheeded. The buyers then took legal action and sued the sellers for up to $1 billion in damages.

The situation reached a turning point when HPL chief Ong Beng Seng arranged a meeting with some 40 owners of Horizon Towers, at the Hilton last week. At this meeting, Mr Ong's lawyers Allen & Gledhill told the attendees that they would be prepared to adjourn the legal proceedings if the sellers agreed to extend the deadline - and that they would drop the lawsuit altogether if the sale goes through.

This meeting was followed by a second meeting at the Raffles Town Club the next day, which was attended by owners of 135 units of Horizon Towers. These owners decided to push back the collective sale deadline to Dec 11 and to do everything 'reasonably necessary' to effect the collective sale.

They told BT after the meeting that they would be reaching out to the owners of the remaining 42 units - who did not attend the meeting - to seek their support. Their efforts have apparently succeeded, judging by HPL's announcement yesterday.

HPL also told BT now that it has received official confirmation of the sellers' decision to extend the sale completion deadline, it would honour its promise to apply for an adjournment of the legal proceedings it has filed against the sellers. This means a Thursday court showdown between the buyers and the sellers will be averted. Up next is Friday's High Court hearing of the appeal against STB's decision.

Foreigners Snap Up 87% More Landed Homes In First Half: DTZ

Source : The Business Times, September 25, 2007

Companies make 265 buys in H1 2007 vs one in H1 2006

Foreigners, including permanent residents, bought 232 landed homes here in the first half of this year, up 87 per cent from the same period last year, according to DTZ Debenham Tie Leung's analysis of caveats.

But foreign buyers' share of total caveats lodged for landed homes in H1 2007 was about 7.6 per cent, down slightly from a 7.9 per cent share in the same year-ago period.

Nearly 90 per cent of these foreign buyers in the first six months of this year were Singapore permanent residents.

Malaysians accounted for the biggest share or 23.7 per cent of foreign buyers of landed homes in H1 2007, followed by United Kingdom nationals (18.5 per cent) and Australians (7.8 per cent).

The number of landed homes picked up by Singaporeans in H1 2007 was up 76.3 per cent year-on-year, though Singaporeans' share of total caveats for landed homes fell to 83.7 per cent in H1 2007 from 92.1 per cent in H1 2006.

The decline was due to a surge in the number of landed homes bought by companies, to 265 in H1 this year from just one in the same period last year.

In all, 265 caveats were lodged by companies for bungalows, semi-detached houses and terrace homes in H1 2007, compared with just one caveat in H1 2006. The companies include both local and foreign corporations, and could possibly reflect the effect of some investors including individuals or small groups of investors who made purchases through companies, market watchers reckon.

'There have been small developers and contractors buying up stretches of landed houses in places like Telok Kurau and Kembangan, with the aim of tearing them down and redeveloping the site into a small block of apartments,' says Knight Frank executive director Peter Ow.

DTZ's analysis, which was based on caveats captured by Urban Redevelopment Authority's Realis system, also showed that the most popular landed housing districts sought after by foreigners in H1 2007 differed from those pursued by Singaporeans.

The top location for foreigners (including PRs) who bought landed homes during the period was District 10 (which covers areas like Grange Road, Tanglin, Chatsworth, Jervois, Bishopsgate, Holland Road, Swettenham Road and Laurel Wood Avenue), followed by Districts 15, 11 and 19.

District 15 covers Katong, East Coast and the Meyer Road locations; District 11 includes the Bukit Timah and Dunearn vicinity, Gilstead Road and Gentle Drive; and District 19 includes Serangoon Gardens and Lorong Chuan. Other popular locations included Districts 21 (which covers the Upper Bukit Timah area) and 4 (Sentosa Cove)

In contrast, among Singaporean landed home buyers, the most popular district was 19, followed by Districts 15, 10, 16 (part of Bedok and Tanah Merah), 20 (including Sembawang Hills and Upper Thomson) and 28 (which covers locations like Seletar Hills and Mimosa Place).

'Foreigners seem to be zooming in more on traditional residential property investment locations, such as prime Districts 10 and 11 and the traditionally popular District 15,' said a market watcher.

Among companies which bought landed homes from January to June this year, District 15 was the most in demand, followed by Districts 19, 10 and 14.

The 232 landed homes that foreigners purchased in the first half was just 11.5 per cent shy of the 262-unit figure for the whole of last year. The record was set in 1999, when foreigners picked up 347 landed homes on the island.

In Singapore, foreigners have to be PRs before they can receive permission to buy landed homes on mainland Singapore, and Sentosa Cove is the only location where foreigners who are not PRs are allowed to purchase landed property. Even then, foreign would-be buyers must seek permission from the Land Dealings (Approval) Unit under the Singapore Land Authority.

Typically, it takes about four weeks for approval to be granted, but on Sentosa Cove, the time has been cut to less than 48 hours under a special fast-track approval scheme.

Foreigners, including PRs, can at any one time own only one landed home in Singapore and must occupy it themselves rather than renting it out.

URA Reserve Site At Jalan Sultan For Commercial Development Is Now Open For Application

Source : Urban Redevelopment Authority News Release, 25 September 2007

The Urban Redevelopment Authority (URA) today released the detailed sales conditions for a reserve site at Jalan Sultan for commercial development. Developers interested in purchasing the site can now apply to URA for it to be put up for tender.

The sale site at Jalan Sultan which is located within the gazetted Kampong Glam Conservation Area is one of the sites in the Government Land Sales Reserve List for the second half of 2007 as announced by the Ministry of National Development on 14 June 2007 (http://www.ura.gov.sg/pr/text/2007/pr07-57.html)

Land Parcel at Jalan Sultan

This Land Parcel has a site area of 0.14 ha and consists of 17 units of existing two-storey conservation buildings to be restored. The successful tenderer is required to restore and reconstruct these conservation shophouses in accordance with the Tender Conditions and Conservation Guidelines for Historic District. The sale of the Land Parcel will facilitate the early restoration of the conserved shophouses in the area and add vibrancy to Kampong Glam Historic District. As the 17 units of shophouses are sold as a single Land Parcel, it is very suitable for any investor who wants to develop the shophouses for hotel or office.

Details of the Land Parcel and location plan are given in Annexes A-1 (http://www.ura.gov.sg/pr/graphics/2007/pr07-101a1.pdf) & A-2.

Reserve List System

Under the government’s Reserve List system, a site on the Reserve List would only be put up for tender if a developer’s indicated minimum bid price in his application is acceptable to the government.

Details of the Land Parcel and other sites that are currently available for application on the Reserve List can be found on URA’s website: http://www.ura.gov.sg/sales/KgGlamSep07/KgGlamSep07-intropage.html.


For media enquiries, please contact:

Ms Serene Tng
Manager, Public Relations
DID: 6329 3224
Email: serene_tng@ura.gov.sg

Annex A-2

Second Short-Term Office Site Released At Tampines

Source : The Strait Times, 25 September 2007

THE Government has released a second temporary office site for sale, this time at the Tampines Regional Centre.

This followed the strong response to a similar plot along Scotts Road last month, which drew a better-than-expected 11 bids.

The two sites are the first plots of office land to be offered in Singapore on 15-year leases as part of the Government's efforts to ease an office crunch that has sent rents and prices soaring.

The Tampines plot 'will continue to help meet the demand for office space in the short to medium term', the Urban Redevelopment Authority (URA) said in a statement yesterday.

Located at the corner of Tampines Concourse and Tampines Avenue 5, the 1.15ha site can be built up to a maximum gross floor area of about 124,000 sq ft.

A low-rise development of about three storeys can be built on the plot 'quickly in about a year', the URA said.

While they expect a good level of interest in the Tampines parcel, property consultants said competition for it is likely to be less keen than that for the Scotts Road plot.

The 1.04ha site, next to the Newton MRT station, drew a top bid of $37 million, or $219 per sq ft per plot ratio (psf ppr).

Mr Donald Han, managing director of property firm Cushman & Wakefield, said the Scotts Road site was hot due to its prime location.

In contrast, the Tampines plot is in the suburbs. It will also be competing with nearby sites at the Changi Business Park, which are sold on short-term, 30-year leases.

Mr Han expects five or six bids for the site, which are likely to be lower than the price fetched for the Scotts Road plot. Offers could range from $140 to $160 psf ppr, or about $17.3 million to $20 million, he said.

'On top of everything, the market now expects that more transitional sites will be released,' Mr Han added.

Mr Nicholas Mak, director of research and consultancy at Knight Frank, predicted, on the other hand, that while the Tampines site would fetch fewer bids than the Scotts Road plot, the bid levels would be the same.

'Suburban offices with good locations and well-developed infrastructures are in strong demand,' he said.

His estimate for the site: $24.8 million to $32.2 million, or $200 to $260 psf ppr.

Second Transitional Office Site Released

Source : The Business Times, 25 September 2007

THE government yesterday launched for sale its second transitional office site in a bid to improve the supply of office space.

Market watchers estimate that the 1.2 hectare site in Tampines could fetch about $100 per square foot per plot ratio (psf ppr) - which works out to some $12.4 million in total.

The land parcel is the second transitional site offered by the Urban Redevelopment Authority (URA) as office rents in Singapore continue to climb amidst a supply shortfall.

Transitional office sites are expected to help tide over the space shortage until new supply starts to kick in from 2009 onwards.

URA in August awarded the first transitional office site at Scotts Road. That site attracted 11 bidders, with the winning bid coming to $37 million, or $219 psf ppr.

The new site, which has a maximum gross floor area of 124,000 sq ft and a 15-year lease, is expected to fetch a lower price as it is not in the central area.

'The Scotts Road site can fetch rents of between $7 and $8 psf per month, while this site will be able to get only about $4-$5,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

Some experts were more bullish, however.

Knight Frank director of research and consultancy Nicholas Mak expects the site to fetch between $200 and $260 psf ppr, similar to the Scotts Road site. That price works out to $24.8-$32.2 million.

'With the current absorption rate of office space at 91.9 per cent, coupled with a shortage of Grade A office space in the prime area, demand for suburban offices with good location and well-developed infrastructure is in strong demand,' said Mr Mak.

'The office space that will be developed on this site is likely to be attractive to banks and financial institutions to house their backroom operations.'

The land parcel is located at Tampines Concourse/ Tampines Avenue 5 - within the established Tampines Regional Centre.

The upcoming office building will be within walking distance of the Tampines MRT station and bus interchange.

The building is expected to be a low-rise development of about three storeys that can be built quickly in about a year, URA said.

Sale Of Seletar Garden Could Fetch Up To $75m

Source : The Business Times, 25 September 2007

This works out to $683-$733 psf ppr inclusive of DC for the 73,099 sq ft site

Reaping profits: Based on the indicative collective sale price, each owner could make a premium of at least 80 per cent over the open market price

SELETAR Garden, a mixed development at Yio Chu Kang Road, is up for sale by tender with the estimated price of between $70 million and $75 million.

This works out to be $684-$733 per square foot per plot ratio (psf ppr) inclusive of development charge (DC) for the 73,099 sq ft site.

The property is being marketed by PropNex, whose head of investment sales Charles Chua says there is also a possibility of the alienation of three parcels of adjoining remnant state land at an estimated additional $8.3 million. This will bring the total site area to over 100,000 sq ft and with a possible gross floor area (GFA) of over 140,000 sq ft.

Together with the state land, the site could cost between $555 and $590 psf ppr. Mr Chua believes the site, which is within a 15-minute walk of the Yio Chu Kang MRT offers potential for a boutique serviced-residence or condominium and food-and-beverage centre.

Mr Chua estimates that the current open market value for the residential units at Seletar Garden is between $850 and $850 psf.

Based on the indicative collective sale price, each owner is expected to make a premium of at least 80 per cent over the open market price, Mr Chua said. He estimates that about 40 residential units of between 1,600 and 1,800 psf can be built on the site. The break-even price for the potential new development would be about $750 psf.

CPF Changes: A 'Money Or Your life' Gamble? Where Will The Ball Fall?

Source : The New Paper, September 25, 2007

SOME Singaporeans see longevity insurance as a gamble, or even a 'sure lose' investment: Die before 85 and you lose the money.

But to the Government, it's the best bet for those who live to a ripe old age.

Who will win?

No one can say with certainty because no one knows how long he or she will live.

Still, Prime Minister Lee Hsien Loong is putting his money on Singaporeans living to a ripe old age.

He laid the cards on the table at a dialogue on the CPF reforms with grassroots leaders yesterday. Five other ministers were also there.

The compulsory annuity scheme - the bugbear of many Singaporeans when it comes to the CPF changes - dominated the two-hour exchange at the Grassroots Club.

PM Lee said to the 500-strong audience: 'If I were going to bet, I would bet that most of you will reach 85, or at least half.

'As Lim Swee Say says, 'Bao ying (sure win)!' he quipped, quoting the Minister in the Prime Minister's Office and NTUC secretary-general.

PM Lee added: 'If you look at the obituary pages of The Straits Times and Lianhe Zaobao, you read, 'mo mo mo mo gao ling jiu shi' (so and so is 90). So many 90-year-olds... and sometimes 100 over.

'And once in a while, you have a story of somebody living to 102 or 103 and was fit and walking until a few weeks before he or she died.'


So the Government is not taking any chances, he said.

'If everybody knew he has a good chance of living to 85, I think we don't have to do anything. They will buy their own longevity insurance,' PM Lee said.

'But it is because many people don't realise and they think there's no need, that's why we worry for them.'

Referring to the annuity, one grassroot leader said a 'bo gei (toothless)' person at 85 can't spend much.

He also suggested that elderly Singaporeans be given their CPF savings early so they can 'have a good time at the IR (integrated resort)'.

If they lose, their children will take care of them, he reasoned. If not, the Government can help them.

An amused PM Lee replied: 'This is better than going to the IR. If they win, they will 'tan tio' (benefit). If they lose, their children will take care of them. If they have no children, the Government is there. Bao jia (win-win).'

Of course, PM Lee was joking, and he added: 'Bao si (sure die)... 'Bo gei', you cannot enjoy, but 'bo gei, bo lui' (no teeth, no money) is worse.'

Mr Lim Swee Say even gazed into the crystal ball - in response to a grassroots leader's remark that she had a 'feeling' most people won't live till 85 since they get 'all kinds of illnesses' even at the age of 40.

Mr Lim said: 'Many of us don't know how long we'll live or when we'll go... But I'm a very good fortune-teller.'

Pointing to the audience, he said: 'Assuming everyone of you here is 62 today... I can tell you for sure half of you will die before 85 and half will live beyond 85... (What I can't tell you) is whether it is this half or that half.'

He added: 'In every row, there're 14 of you... two of you will live until 95. I don't know which two. And in every two rows... one will live beyond 100.'

His remarks drew laughter, but Mr Lim wasn't joking. He said he was trying to show how serious the greying problem can become.

And he was not just taking a wild stab in the dark.

The Department of Statistics reported that one in two Singaporeans alive at 62 now will live beyond 85; one in seven will live to 95; and one in 20 will live to 100.


But while PM Lee and Mr Lim are willing to bet on Singaporeans living longer, the Government isn't about to gamble with the people's hard-earned CPF savings.

A few MPs have asked in Parliament if it could give CPF members better returns from the gains it made from investing their money.

PM Lee said: 'If you want more, you have to take risks. I think for Singaporeans who don't have a lot of money in their CPF, it's wiser we don't make them take risks...

'GIC (Government Investment Corporation) invests long-term... The stock market goes up and down... In the last few months, the market went down and I'm sure the GIC portfolio would also have gone down... I would have a riot in Singapore.'

It's a gamble. And Singaporeans are not too good at gambling, if you go by their CPF investments.

PM Lee noted that, between 1993 and 2004, nearly three out of every four people who invested under the CPF Investment Scheme ended up worse off than if they had just parked their money in their CPF accounts. So, it's still best to stick to the risk-free system, he said.