CapitaMall To Raise $500m In Share Sale

Source : The Business Times, October 31, 2007

CAPITAMALL Trust, Singapore's largest real estate investment trust (Reit), may raise as much as $500 million in a share sale to pay debt and fund acquisitions.

'The funds provide financial flexibility to pursue yield accretive acquisition opportunities.' - Pua Seck Guan

CapitaMall will sell as many as 137.7 million new shares to institutional investors at between $3.63 and $3.70 apiece, it said in a statement late on Monday, representing a discount of as much as 3.5 per cent from Monday's closing price of $3.76.

The trust will reduce its debt to 33 per cent of assets from 41 per cent, allowing it to borrow more as it seeks out acquisitions in the city's shopping mall industry.

Singapore's central bank allows Reits with a credit rating to raise debt to 60 per cent of assets.

The funds 'provide greater financial flexibility to pursue yield accretive acquisition opportunities in Singapore', Pua Seck Guan, chief executive officer at the trust's management company, said in the statement.

The trust said that it will repay its debt of $453.6 million, which it took to buy bonds for three Singapore malls and a 20 per cent share of CapitaRetail China Trust, a property trust that owns shopping centres in China.

CapitaMall plans to raise $350 million in the initial sale, and may issue a further $150 million of shares 'in the event of a favourable response', it said in the statement.

'It's getting quite challenging to buy good shopping malls in Singapore,' said Nicholas Mak, Singapore-based research director at Knight Frank, a property consulting company. 'Most of them have already been acquired. Others are owned by listed property funds or the owners are simply not that keen to sell.'

The stock has risen 29 per cent this year, the second-best performing Reit among 17 trusts traded on the Singapore exchange, which have an average return of 6.8 per cent this year.

CapitaMall is 'refinancing its higher-cost debt due to still-strong demand for the shares', said David Lum, an analyst at Daiwa Institute of Research Singapore. He does not expect the trust to pursue acquisitions 'in the immediate future'.

CapitaMall's shares were suspended from trading for the announcement. The share sale is being managed by DBS Group Holdings and UBS, CapitaMall said. -- Bloomberg

Related Link :-

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CIT's news release

http://tinyurl.com/ywc4tr
Financial statement

http://tinyurl.com/29n5zg
Presentation slides

UOB Meets Forecasts With 8.2% Rise In Q3 Profit

Source : The Business Times, October 31, 2007

Loans grow 15.6% from a year ago to $85.2b but just 3.3% since end-June

UNITED Overseas Bank's third-quarter net profit rose 8.2 per cent to $501 million from a year ago, broadly in line with analysts' expectations.

Mr Wee: Despite uncertainties in the financial market, our core business remains strong

Compared with the second quarter, net profit for the three months ended Sept 30 fell 14.4 per cent, mainly due to lower trading and investment income resulting from mark-to- market losses from widening credit spreads triggered by the US sub-prime crisis, said the group.

'The negative credit impact should reverse once the market regains its confidence or when the debt securities mature,' it said.

The Q3 net profit fell below the mean forecast of $516 million by analysts polled by Reuters, but beat the $480 million median estimate of analysts surveyed by Bloomberg.

Annualised basic earnings per share for the quarter was 129.3 cents, up 9.1 per cent from a year ago.

For the first nine months of the year, the group's net profit fell 21.2 per cent to $1.6 billion from the previous corresponding period's $2.03 billion, which included a one-time gain of $689 million comprising a special dividend from Overseas Union Enterprise (OUE) and gains from divestment of OUE and Hotel Negara.

Excluding the one-time gain, nine-month net profit rose 19.2 per cent. Nine-month total income was 19.7 per cent higher at $3.6 billion.

Net customer loans grew 15.6 per cent from a year ago to $85.2 billion at end-September, but just 3.3 per cent since the end of June.

Rival DBS Group, which reported its earnings last Friday, saw its net customer loans grow 22.8 per cent from a year ago and 5.8 per cent over the quarter to $104.7 billion at end-September. But UOB saw more rapid growth than DBS over both periods in housing loans - the largest component of the banks' loan books by industry sector, comprising a quarter of total customer loans.

UOB said there had been 'no change' to its position in collateralised debt obligations or CDOs compared with the second quarter.

Total direct investments in CDOs by the group remains at $388 million, after adjusting exchange translation. None of these is in default, it said.

The group made an additional provision of $20 million for these CDO investments, bringing its total provision to $55 million. Another $46 million provision for mark-to-market losses was taken to the bank's reserves.

CDO investments managed on behalf of clients by UOB Asset Management (UOBAM) - the bank's asset management arm - dipped slightly to $11.4 billion from $11.7 billion in the second quarter. The decline was mainly due to the maturity of a CDO and currency translation effects, said the group.

Among the CDO investments managed by UOBAM, one CDO tranche had its credit rating downgraded in September and another this month. A third tranche was upgraded this month.

And last week, four tranches of a CDO launched by UOBAM late last year, Raffles Place II Funding Ltd, were put on negative watch by ratings agency Standard & Poor's. The four tranches had a combined principal value of US$57 million when first launched. UOBAM itself does not own any CDOs, including any tranches in Raffles Place II Funding.

Group chief executive Wee Ee Cheong said he was 'pleased' with the results achieved. 'Despite uncertainties in the financial market, our core business remains strong.'

Net interest income for the quarter rose 4.4 per cent over the year to $714 million. But compared to the second quarter, it was down 6.2 per cent.

The fall was due to the weakening of regional currencies against the Sing dollar and narrower interest margins as the group moved more of its funds into short-term investments 'in view of the volatile and uncertain market conditions'.

Its net interest margin fell to 1.93 per cent, down from 1.97 per cent a year ago and 2.04 per cent in the second quarter.

Non-interest income for the quarter was $393 million, up 16.5 per cent from a year ago but 26.7 per cent lower than in the second quarter.

Its share price fell after the earnings release at mid-day, ending the day 50 cents or 2.3 per cent lower at $21.50.

Get the link to UOB's financial results at www.businesstimes.com.sg

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UOB's news release

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Financial results

Rising Inflation A Major Risk In Emerging Markets: Economist

Source : The Business Times, October 31, 2007

Currencies, property, stocks may become more attractive than debt for investors

Rising price inflation is fast becoming a major risk in emerging markets around the world due to surging food, oil and asset prices, according to a senior economist.

On the rise: Rising food and fuel prices are sending inflation higher in most emerging economies.

For investors, the inflationary pressures building up in these countries and the likely response of central banks means that emerging market currencies, equities, property and commodities are likely to become more attractive than debt - the traditionally favoured emerging market investment, Philip Poole, HSBC's chief emerging markets economist, said recently.

Investment in new production capacity 'has not kept pace' with the recent rapid growth seen in most emerging economies, he said.

As a result, countries such as India - which now has very little spare productive capacity according to some estimates - are likely to experience increasingly severe price inflation as their economies continue to expand.

Elsewhere too, spare productive capacity has been falling, adding to inflationary pressures, except in China where investment in building more capacity has been consistently high, he said.

Food prices, traditionally accorded a high weight in consumer price inflation measures, have also surged due to unstable weather patterns, stronger demand from a growing middle class and a shift in land use away from agriculture to biofuels due to soaring oil prices, he said.

The combination of rising food and fuel prices is sending inflation higher in most emerging economies, he said.

He expects governments and central banks in these countries to step up their fight against inflation in the coming months, using a mix of policy tools, including allowing their domestic currencies to strengthen against the US dollar.

Part of the inflationary pressure build-up has been due to the actions of central banks themselves, he said.

When central banks intervene in financial markets to keep their domestic currencies low in order to maintain the competitiveness of their labour market and exports relative to their peers, they often do this by printing more local currency to buy foreign currencies such as the US dollar.

The new money then gets channelled into domestic assets such as property, contributing to price increases in these assets instead of the currency itself, he said.

The main anti-inflation policy tool employed by developed economies such as the United States and the European Union - raising interest rate targets to discourage borrowing - may not work for emerging economies, he said.

'In an environment where you have open capital accounts and excess liquidity . . . it can be counter-productive to raise rates', as this makes the local currency even more attractive relative to the US dollar, prompting a greater inflow of funds and raising inflationary pressure on the local economy, he said.

Instead, he expects to see central banks employ a broader range of tools to combat inflation, such as raising the regulatory reserve requirements of banks as China did recently - 'effectively a tax on the private banking system' - and allowing their domestic currencies to strengthen against the US dollar. A stronger local currency makes imports cheaper, which helps moderate price inflation.

As a result, Mr Poole believes investors in emerging market currencies, stocks, commodities and property stand to benefit from the inflationary pressures and the likely policy response in the near future.

Just this month, the Monetary Authority of Singapore said it would allow the Singdollar to strengthen at a slightly faster pace than before to cap inflationary pressures, while maintaining its long-standing official policy of allowing a 'modest and gradual appreciation' of the currency.

CapitaLand Sells $250m In bonds: Source

Source : The Business Times, October 31, 2007

Singapore property developer CapitaLand has sold $250 million (US$172.4 million) in 12-year bonds to refinance debt, a source close to the deal told Reuters on Wednesday.

The bonds were sold at a coupon rate of 4.35 per cent, the source said. Citigroup was the sole lead manager, the source added. -- REUTERS

Using HDB Equity To Pay For Annuities

Source : The Business Times, October 31, 2007

The median CPF member holds three times more in HDB housing equity than CPF cash holdings

A NEW scheme making annuities compulsory for Central Provident Fund (CPF) members has been greeted quite negatively by the public.

A smoother road for retirees: HDB can play a financial intermediary role for the elderly and the government should also help citizens monetise their savings locked into HDB housing at the end of their working lives

The scheme involves setting aside a small portion of the Minimum Sum to buy the annuity. When the individual reaches a certain age, say 75 or 80, the annuity gives a monthly payout for the rest of his life. The annuity is a form of longevity insurance.

One option of making annuities more palatable is by allowing CPF members to finance the annuities with their HDB housing equity. The median CPF member holds about $145,000 in HDB housing equity, more than three times the $45,000 in CPF cash holdings.

Retirees are generally asset rich but cash poor. Using the cash portion to purchase annuities would leave even less cash for retirement. That may not be the most optimal financial solution for most CPF members who are already holding a large portion of illiquid assets, their HDB flats, at retirement.

By design, the government's social support and CPF system encourages citizens to invest their savings in housing during their working lives. We recommend that the government should also help citizens monetise their savings locked into HDB housing at the end of their working lives.

One option is for HDB to accept the pledging of the retiree's HDB flat as collateral for a loan to purchase the annuity. This would allow HDB owners to partly monetise their assets and leave them with more cash at retirement. Such flexibility on HDB refinancing would also allow CPF retirees to stay in their existing HDB homes without necessarily having to sell their homes for the purpose of realising their savings.

Moreover, moving or downgrading from their existing homes can be a stressful experience for the elderly.

HDB can clearly play a financial intermediary role for the elderly. Retirees are not able to secure housing finance from private banks because they no longer hold a job, have a stable monthly wage, or are simply too old.

Retirees do not, moreover, want to completely reverse mortgage their HDB homes as they may want to leave an endowment and pass on some residual housing equity for the next generation. The retiree can also live on in his existing home for the rest of his life, if some refinancing is allowed.

From the perspective of the government, lending to an individual for the purchase of an annuity is probably more acceptable.

The withdrawal of the HDB housing equity is not for cash that will be wastefully spent. Allowing the housing equity to be tapped for buying longevity insurance improves the welfare and financial security of the individual. Such an option might improve the public reception to the compulsory purchase of annuities.

The writer is an economist with Citigroup and chairperson of the Policy Study Workgroup on Economic and Employment Opportunities

Chancery Court Along Dunearn Rd Put Up For En Bloc Sale

Source : Channel NewsAsia, 31 October 2007

The Chancery Court residential development along Dunearn Road has been put up for en bloc sale.

CB Richard Ellis said 124 out of the 144 units, representing more than 87 percent of the share value, have signed the Collective Sale Agreement (CSA).

The prime site is located next to Anglo-Chinese School (Barker Road).

Chancery Court sits on 24,074.4 square metres of prime land and is a short walk to Newton MRT Station.

The guide price is $468 million, which equates to about $1,614 per square foot per plot ratio.

Under the Master Plan 2003, the plot ratio is 1.4 and the maximum number of storeys is five.

To maximize the plot ratio and top up the lease to a fresh 99 years, developers will have to pay a development charge of $118 million.

A developer can build about 242 units, assuming an average size of 1,500 sq ft each.

The estimated break-even is around $2,075 per square foot.

The tender exercise closes at 3 pm on 5 December 2007. - CNA/ir

宏碁大厦(Acer Building)求售

《联合早报》Oct 31, 2007

位于裕廊国际商业园(International Business Park)内的宏碁大厦(Acer Building)有意脱手，现在正邀请买家表达认购意愿。

戴德梁行(DTZ Tie Leung)昨天发表的文告说，宏碁电脑(新加坡)已同意在大厦转手后，继续向大厦的新业主，租下部分的楼面。

该公司指出，由于一些银行和金融机构纷纷将一些后勤部门撤出中央商业区，迁移到一些高科技商业园内，国际商业园内的租金已被带动攀升，目前的叫价介于每平方英尺3元至4元。它相信，强劲的市场需求，应该会继续推动国际商业园内的租金上涨。
　　
宏碁大厦占地12万26250平方英尺，建筑楼面和可出租楼面分别为31万4134和22万2510平方英尺。它建于裕廊集团地段，属于30年(加30年)地契。

三巴旺12有地住宅地段 吸引众多买家竞标

《联合早报》Oct 31, 2007

市区重建局(URA)六年来第一次拍卖的有地住宅地段，昨天吸引到大约150人捧场。这12幅位于三巴旺路(Sembawang Road)和安德烈道(Andrews Ave)的有地住宅地段，成交价介于每平方英尺210元至327元。

当中最受瞩目的一幅排屋地段(编号LP10)，吸引了好几方人马竞标，在一来一往超过100回的喊价后才以1430万元，即每平方英尺327元成交。

成功买下这幅地段的是本地一家生产电子零件的公司——MecBonn工程集团。这家公司可说是昨天拍卖场上的最大买家，除了LP10地段外，它也分别以142万元和150万元，买下另外两幅各可兴建两间半独立洋房的地段，“买单”总数为1722万元。

另外一名大买家是飞龙置业(Fragrance Homes)，这家房地产发展公司除了出价176万元来买下可建造3间排屋的编号LP12地段外，也成功买下另外一幅可建造14间排屋的编号LP11地段，作价920万元。

飞龙集团掌舵人许伟明也以个人名义，和妻子联手买下可建造两间半独立洋房的编号LP6地段，成交价为126万元，即每平方英尺289元。
　　
昨天拍卖的12幅有地住宅地段，面积介于4242平方英尺至4万3694平方英尺，各可建造1间半独立洋房、2间半独立洋房至23间排屋单位。

它属于市建局新规划的新有地住宅区——三巴旺绿林(SembawangGreen)，是这个地区的第一阶段发展项目。占地约8公顷的Sembawang Green是由排屋、半独立式洋房和独立式洋房所组成的住宅区，位于三巴旺邻里公园对面，也靠近三巴旺海滩，毗邻还有海峡园(Straits Garden)和三巴旺海峡楼住宅区(Sembawang Straits Estate)。

政府上一次出售有地住宅地段是2001年10月。这次重新拍卖有地住宅地皮，将让人们在升涛湾(Sentosa Cove)以外，有多一个向政府购买地皮来建造梦想家园的选择。

昨天出席拍卖会的人士，不少是建筑商出身的小型房地产发展商，有些则是打算购买地皮来自己发展的自用户。昨天成功买到地段的小发展商，还包括Sunshine Land和佘控股私人有限公司(Seah Holdings)。市场人士原本估计，这12幅地段的成交价将介于每平方英尺180元至250元。昨天投标者的出价明显高于这个水平，唯一一幅独立洋房地段(编号LP3)地段是全场最少人争夺的，只吸引到三次喊价，最后以94万元成交，每平方英尺地价只有210元。　　

但是，七幅各可兴建两间半独立洋房的地段，成交价介于每平方英尺222元至289元。其余四幅可兴建2间至23间排屋的地段，成交价更高，介于每平方英尺222元至327元。

浩然大厦一业主要求 再驳回集体出售申请

《联合早报》Oct 31, 2007

曲折重重的浩然大厦（Horizon Tower）集体出售申请昨天在分层地契局继续审理，续审的第一天，案子就再次出现插曲，代表多数业主中一名业主的律师在分层地契局的审讯上，要求分层地契局以新销售委员会和展延原订8月11日的交易期限都不符合法律程序为理由，再次驳回浩然大厦的集体出售申请。

这名业主的行动是昨早审讯的最新发展，分层地契局要求她的代表律师在本星期五中午之前提呈书面陈词，代表多数业主的律师团则必须在下星期一中午之前针对这份书面陈词提呈书面回应。

若分层地契局同意这名业主所提出的论据，再次驳回浩然大厦的集体出售申请，使得交易无法在12月11日的新期限前完成，那么，多数业主之后将可能面对由旅店置业（HPL）和两家外国投资基金（Morgan Stanley和Qatar Investments）组成的财团Horizon Partners私人有限公司（HPPL）的10亿元官司。

由于分层地契局之前于8月初驳回多数业主的初次申请，以致多数业主迟迟不延长完成集体出售交易的期限，致使原本要买下公寓的HPPL财团8月底入禀高庭，控诉卖主违反选购权（Option to Purchase）。

HPPL财团当时要求法庭颁布庭令，要求卖方尽其所能重新向分层地契局申请并获得集体出售令，否则业主得归还买主之前所支付的5000万元定金，还可能得面对买主索赔10亿元的官司。业主后来同意把交易完成期限延迟到12月11日。

在今年8月的分层地契局审讯期间，一些多数业主和少数业主的立场是一致的，因为在我国房地产价格持续攀高的情况下，一些多数业主已后悔在去年7月所签下的意愿书。分层地契局在发现出售业主所提呈的申请文件中有三页出现问题后，以技术上不符合规定为理由，驳回集体出售委员会的集体出售申请。当时在分层地契局里的一些多数业主和少数业主在听到这个判决后当众互相拥抱和祝贺。

不过，同意集体出售业主的上诉得直，高庭裁定当初驳回集体出售申请的分层地契局，必须继续审理这项申请。

在高庭的裁定和可能面对HPPL财团官司的情况下，多数业主这一回的立场与少数业主不一致，若申请成功，他们将能免去与HPPL财团对薄公堂的可能性。因此，昨天出现一名多数业主向法庭要求驳回浩然大厦的集体出售申请，让人感到意外。

少数业主说有很多反对集体出售建议

此外，少数业主的律师团也表示，他们持有很多反对这起交易的论据，有待向分层地契局提出。他们将有机会在11月6日、7日、9日、10日、12日、13日和14日向该局提呈反对的论据，而大多数业主也将有机会反驳。以上日期可能在稍后调整。

据了解，这些论据包括没有遵循集体出售的法律程序，以及交易对少数业主的利益不公平。在听取了各方的论据后，分层地契局预计最迟在下个月15日作出裁决。

Wing Tai Bullish Despite End Of Deferred Payment Scheme

Source : The Straits Times, Oct 31, 2007

THE scrapping of the deferred payment scheme for new homes has failed to dampen the optimism of property group Wing Tai Holdings.

It can still offer the scheme on two yet-to-be-launched condominiums as it had obtained approval before the Government withdrew the scheme last week. The scheme allowed homebuyers to postpone most payments on uncompleted property.

The move to end the scheme was aimed at deterring speculators and forcing people to be more prudent when committing to pricey real estate.

Wing Tai chief operating officer Tan Hwee Bin told The Straits Times yesterday that ending the scheme was a good idea as it would create a basis for strong, sustainable market growth in the long run.

'There will be a short-term impact for the market as a whole as buyers will have to manage their cash flows better.'

But she did not believe that Wing Tai itself would be affected, given its portfolio of largely upmarket developments.

'About 80 per cent are located within districts 9, 10 and 11, and many of our clients are high net-worth individuals and serious investors as opposed to speculators.'

Wing Tai still has approval to offer deferred payments for its L'VIV condo in Newton Road and Belle Vue Residences in Oxley Walk - both set to be launched in the first half of next year.

Mainboard-listed Wing Tai yesterday said net earnings for the three months ended Sept 30 doubled to $61.8 million due to higher contributions from its VisionCrest and Casa Merah projects.

Revenues fell to $100.2 million from $164.8 million previously. Earnings per share rose to 8.58 cents from 4.29 cents while net asset value per share went up to $2.14 as at Sept 30, from $2.07 as at June 30.

Wing Tai also intends to increase its stable of retail and lifestyle brands next year. These businesses now contribute more than 10 per cent of revenues.

It currently has 18 brands in 129 outlets in Singapore, including well-known names such as Topman and Warehouse, sports giants Nike and Adidas, and mass market labels such as G2000, and Japanese restaurant chain Yoshinoya.

Ms Tan said Wing Tai is in talks with several mid- to high-end brands from Europe, Asia and the United States about coming to Singapore, but declined to reveal details.

ALREADY APPROVED

Wing Tai can still offer deferred payments for two upcoming launches in Newton Road and Oxley Walk says Chief Operating Officer Tan Hwee Bin.

Analysts See No Property Bubble

Source : The Business Times, October 31, 2007

They're mum on whether it's a good time to buy, but agree S'pore fundamentals are pretty robust, reports GENEVIEVE CUA

PROPERTY: boom or bust? This was the intriguing question to which a capacity turnout of about 170 investors recently sought answers, at a dinner hosted by financial advisory firm ipac. The good news is that the experts at the evening's panel do not foresee a bubble in the offing, based on three presentations - albeit with some concern expressed by Jones Lang LaSalle's head of research, Chua Yang Liang.












The not-so-good news is that the experts shied away from the multi-million-dollar question of whether this was a good time to buy. What is more, over the past weekend, the surprise news of a halt to the popular deferred payment scheme for uncompleted properties appears to have cast a cloud over residential property's upward trajectory.

In a deferred payment scheme, developers effectively extend free financing to buyers of uncompleted properties. Buyers need only pay an initial deposit of 10 to 20 per cent, with the balance due when the property is completed in a couple of years.

Thanks to this form of free credit, a sizeable number of speculators have rushed in to new home launches, as a rising market gives them a window to sell their units at a substantial profit in a short period.

The base case of one panellist, HSBC senior Asian economist Robert Prior-Wandesforde, is that there are few obvious triggers for a sharp deceleration in prices.

'If we're in a bubble, we're in the early stages. The fundamentals are pretty robust. The mass market is just starting to see a recovery and that's probably the safest area for investment,' he told the audience. The supportive factors include the expected growth in employment and personal incomes.

The cost of servicing mortgage debt also remains relatively low at just about 14 per cent of household income, compared to 50 per cent in mature markets like London.

Contacted yesterday, he said: 'I think the measure (to halt deferred pricing) will take a little bit of froth out of the market, but with employment booming, wages soaring and the real mortgage rate at its lowest level since 1990, the outlook still looks very promising.

'We should also bear in mind that valuations are still way below the levels of the previous boom. When adjusted for the growth in incomes, the private residential property price index is little more than half of what it was in 1996.'

At the discussion, Dr Chua of JLL expressed concern over the price gap between new and resale homes in the prime districts. The gap has widened sharply this year, reaching a peak of 60 per cent, against a medium to long-term premium gap of 32 to 38 per cent. The resale market, he says, reflects true demand better, as deferred payment schemes in the new home market have inflated prices.

In terms of rental yields, rentals in the luxury prime segment have edged below the 10-year Singapore bond yield. The clampdown on deferred payment schemes should remove the speculative froth, he says. 'Generally prices will take a breather in the next two to three years with the sheer volume of (new) stocks coming on stream. We expect some kind of softening, not a correction, but a softening.'

Sing Tien Foo, deputy head of the National University of Singapore's department of real estate, pointed to property's ability to help diversify a portfolio, thanks to a low correlation with stocks and bonds.

Prof Sing's research has shown that property provided a positive hedge against inflation between 1992 and 2007, a period in which stocks and bonds did not provide such a hedge.

While all types of property offered a more-than perfect hedge against inflation, the best hedge was that offered by detached housing, followed by semi-detached homes.

Meanwhile, advisers are sounding caution. Roy Varghese of ipac says: 'If you're looking to invest, be very careful. You need to have an investment objective and that includes looking into the IRR (internal rate of return). You should be able to hold it for seven to 10 years. If you bought your property at a peak, your IRR will be low.'

Joseph Chong of New Independent expects the price gap between new uncompleted homes and resale homes to narrow. 'The market should see a more moderate ascent in prices - instead of 20 per cent, perhaps 10 per cent in line with nominal GDP.

'You should see more upside...But if your portfolio is not big enough, I don't think you should bet on investment property in Singapore.'

Those with modest resources are better off investing in a global property fund or Reit, he adds.

Analysts, however, remained mostly sanguine over the medium-term outlook. Merrill Lynch's property team wrote in a paper market that sentiment will be weak over one to two months. 'However, we are of the view that genuine buyers do not buy houses on innovative purchase schemes by developers alone. We believe the more important considerations will be where Singapore is heading, will they be able to keep their jobs or businesses and will their salaries/profits increase.'

The firm's economics team recently wrote that Asian property prices were not high relative to per-capita income, and advances have been modest compared to those in the UK, the US and Australia. The drivers include low real interest rates and positive demographics.

Citigroup analyst Wendy Koh said that while sentiment will weaken in the short term, residential prices are supported by strong fundamentals. In a note on Friday, she said: 'We believe the current price increase is well supported by strong fundamentals such as the extremely tight physical supply and economic and wage growth.

'We maintain our view that rental rates for residential units will continue to climb on the back of the relative net increase in housing stock due to low completion and relatively high demolition due to en blocs. The rise in rental rates will likely continue to support further price appreciation.'

Acer Building In Jurong For Sale

Source : The Business Times, October 31, 2007

ACER Computer International is selling its building at International Business Park in Jurong East.

The property is said to be worth about $75-80 million, or $337 to $360 psf of existing net lettable area (NLA).

The property, a high- tech business park development, was completed about 10 years ago on a site leased from JTC Corp for 30 years with an option to renew for a further 30 years.

Acer is paying JTC an annual land rent of $715,469, with an escalation of 4 per cent a year (as at Q3 2007). Acer Building's new owner will likely pay JTC a slightly higher land rent each year.

Acer Computer (Singapore) will lease back 51,548 sq ft in the building - about 23 per cent of the property's 222,510 sq ft NLA - from the new owner.

BT understands that the net property yield to the new owner can work out to around 6 to 7 per cent, based on a $75-80 million price.

DTZ Debenham Tie Leung is marketing Acer Building through an expression of interest exercise.

Wing Tai Q1 Net Doubles To $61.8m

Source : The Business Times, October 31, 2007

Jump due mainly to 231% rise in share of profit of JV and associate companies

WING Tai Holdings has reported a net profit of $61.8 million for its first quarter ended Sept 30 - double the profit the property developer made in the comparable quarter a year ago.

Wing Tai said that the net profit improvement was mainly attributable to the 231 per cent increase in the share of profit of associated and joint-venture companies to $63.6 million, from the previous Q1's $19.2 million.

The higher contributions from the VisionCrest and Casa Merah projects in Singapore were the main reason for this increase, it said.

Revenue for the quarter fell 39 per cent to $100.2 million, from $164.8 million a year ago. Wing Tai said this was due to lower contribution from the development properties division.

It said that revenue on development properties for the current period was largely recognised from the units sold in Kovan Melody, The Meritz and The Lakeside.

Profits recognised from these three projects contributed to the group's $15 million operating profit.

Earnings per share was 8.58 cents for the reporting quarter, up from 4.29 cents a year ago.

Wing Tai said that no dividend has been recommended.

Looking ahead, Wing Tai said the property market sentiment in Singapore remains positive due to the buoyant economy.

'The group will be marketing several new residential projects in Singapore in the current financial year,' Wing Tai said.

These could include Newton Meadows, Belle Vue, The Floridian, Ardmore Point and Anderson 18.

In a note last month, Citi analysts reckoned that Wing Tai is one of the purest plays on the Singapore residential property market and one of the most sensitive to changes in residential property prices here.

Citi estimated that for every 10 per cent rise in property prices, the group's net asset value would rise by 7 per cent.

Citi also estimated that for its Helios Residences at Cairnhill, an average price of $3,000 psf, with a breakeven of around $1,100 psf could reap a pre-tax profit of over $400 million from this project alone.

In September, Wing Tai signed a memorandum of understanding to develop its first real estate project in China. The project, in Chengdu, is estimated to be worth about $160 million.

At the close of trading yesterday, Wing Tai shares ended at $3.46 per share, up 2 cents.

URA Property Auction Attracts $37m Of Bids

Source : The Business Times, October 31, 2007

Bidders included smaller developers, contractors and engineering firms

THE mood continued to be buoyant at two property auctions yesterday held by the Urban Redevelopment Authority (URA) and DTZ Debenham Tie Leung.













The URA auctioned 12 sub-divided landed housing plots near Sembawang Beach which can be developed into a total of 57 landed homes.

The auction fetched a total sum of $37.09 million, working out to about $285 per square foot of land area on an average basis.

The bidders included mostly smaller developers, contractors and engineering firms but also some individuals, like local advertising guru Lim Sau Hoong.

The chief executive of Singapore-based advertising agency 10AM Communications clinched the sole bungalow plot of 4,477 sq ft for $940,000.

Market watchers expect Ms Lim to spend a further $1.5 million on construction costs and fees, bringing her likely all-in investment for her bungalow at about $2.5 million.

Mecbonn Engineering, whose office is at International Plaza and which is controlled by a Tew family, walked away with the biggest plot, a 43,687 sq ft site slated for development into 23 terrace houses, for $14.3 million or $327.33 psf of land area.

The plot attracted a total of 107 bids from about eight parties.

A property consultant estimates Mecbonn's break- even cost works out to about $1.3 million per terrace house.

The company also bought two smaller plots for semi-detached homes.

Fragrance Group unit Fragrance Homes bought two plots. It paid $9.2 million or $294 psf for a plot designated for 14 terrace houses and $1.76 million or $270 psf for a smaller plot for three terrace homes.

Fragrance Group boss Koh Wee Meng and his wife Lim Wan Looi too bought a semi-detached plot for $289 psf.

The 99-year leasehold land plots auctioned by the URA yesterday form the first phase of Sembawang Greenvale.

URA's director of land administration, Choy Chan Pong, was pleased with the auction result, noting that it drew 'wide participation and competitive bidding'.

'We can consider releasing the next phase of Greenvale in the H1 2008 Government Land Sales Programme,' he added.

DTZ Debenham Tie Leung's auction at Amara Hotel saw a strong turnout of about 100, including spectators, with three mortgagee sale properties changing hands, including a ground floor shop unit at the freehold Grandlink Square at Guillemard Road selling for $226,000 or $1,102 psf of strata area.

The other two properties sold were a two-storey linked semi-D factory at 67E Tuas South Avenue 1, which fetched $1.3 million or about $139 psf of strata area, and a two-storey, freehold corner terrace house at 34 Maria Avenue in Opera Estate that was sold for $1.4 million, or $392 psf of land area.

Horizon Towers Saga - Majority Owner Raises Fresh Objections Before STB

Source : The Business Times, October 31, 2007

If there's one thing that has characterised the Horizon Towers saga, it's the number of twists and turns that have emerged - and yesterday's hearing before the Strata Titles Board (STB) was no exception.

The session marked the start of the resumption of a previous hearing, which had stalled on Aug 3 when STB decided Horizon Towers' application for a collective sale order was defective. The High Court subsequently overturned the board's decision and sent the application back to STB.

Yesterday's sitting, however, was anything but a straightforward continuation of that earlier session.

Instead, it saw one majority owner, Susanna Rusli - represented by Cheong Yuen Hee from JS Yeh - raising fresh objections and saying she did not wish to be represented alongside the other majority owners, whose legal counsel are Tan Rajah & Cheah.

Mr Cheong, on behalf of his client, questioned the validity of Horizon Towers' collective sale application after it was thrown out by STB on Aug 3.

He also argued that the sale & purchase (S&P) agreement - signed between Horizon Towers' majority owners and the buyers, Hotel Properties and its partners - had expired, as it was not extended before the deadline.

After STB threw out their collective sale application, the majority owners did not extend the Aug 11 deadline for the S&P agreement - despite repeated requests by the buyers to do so - until Sept 24. Mr Cheong is arguing that this invalidates the S&P agreement.

It's also a point taken up by some of the minority owners who are objecting to the sale. Tan Kok Quan Partnership - which represents one group of minorities - is arguing that STB does not have the jurisdiction to hear the application as a consequence of the majority owners' failure to extend the S&P agreement.

BT understands the other minority owners objecting to the sale also intend to take up this argument.

Such a move will, however, run counter to what transpired in the High Court earlier this month - when the majority sellers appealed against STB's dismissal of their application. In that session, the buyers' lawyers - Allen & Gledhill (A&G) - argued that the appeal could be heard only if the S&P agreement was still in existence and the deadline extension was not disputed.

A&G Senior Counsel K Shanmugam asked the various parties to state before the court if they were challenging the existence of the contract, adding that they could not then go back to STB after the appeal and say the contract had expired. No one challenged the existence of the contract then.

Yesterday's session before STB also saw the minorities raising queries over the role played by the sales agent for the en bloc deal, Alvin Er. They argued that Mr Er's decision to accept a sales commission from the buyers for the deal posed a conflict of interest - in that he could have been motivated by the commission rather than the need to secure the best offer for Horizon Towers.

STB has asked the various parties to submit these applications over the next few days. The hearing will resume next Tuesday.

Economy May Take Breather In 2008 With 4-6% Growth

Source : The Business Times, October 31, 2007

Oil prices and financial volatility are concerns but other drivers of growth still intact, says MAS

After four years of robust above-trend growth, Singapore faces a rather 'more uncertain' outlook next year, says the Monetary Authority of Singapore (MAS), citing high oil prices and the chances of further bouts of financial volatility.

And as investors turn cautious amid lingering uncertainties over the US sub-prime crisis, Singapore's property, wealth advisory and capital markets - the activities that saw much euphoria and froth in growth this year - will likely slow down in 2008. But other domestic sectors should still see healthy growth, and the economy, overall, revert to its medium-term trend potential of 4-6 per cent, MAS says.

MAS' Macroeconomic Review - http://tinyurl.com/29mnhx

This year, with the economy having grown 8.2 per cent in the first nine months after a blistering first half, Singapore's GDP growth is on track to reach the upper end of the official 7-8 per cent forecast.

While there has been some slowdown in the growth momentum - as reflected in the third-quarter 6.4 per cent sequential GDP growth pace - financial markets have rebounded recently and underlying economic conditions remain supportive, says the central bank in its latest half-yearly Macroeconomic Review.

Barring a major fallout from the sub-prime mortgage crisis, domestic asset market-related activities, especially financial services, 'should see some tentative improvement' in Q4, it says. In all, these asset market-related activities - key financial services and property-related transactions that saw quite some exuberance this year - accounted for 28 per cent of GDP growth in the first half.

But equity trading activity in 2008 is 'generally not expected to match the highs registered this year', and the domestic debt market could also see businesses adopt a wait-and-see approach amid lingering concerns over the credit market, MAS reckons. Market uncertainties could also dampen demand for wealth management services in 2008.

But the economy's other growth drivers, notably non-electronics manufacturing, will be largely intact and set for further expansion next year.

Even prospects for the construction sector are 'decidedly more sanguine', as many of the projects started this year move into the higher-value stages, where the biggest payment streams kick in.

And the IT-related cluster - the only growth laggard earlier this year - should also see modest growth in the near term, according to the MAS in- house electronics manufacturers' index.

An MAS study also finds 'little evidence' of any structural US-Asia decoupling, where analysts argue that East Asia's growth cycle is now less subject to the vagaries of US growth.

According to MAS, the US and Asia 'remain firmly coupled in the long run', but are seeing weaker links in the short run due to several factors. These include the modest nature of the US slowdown so far, and the fact that domestic demand in Asia has buffered the region's growth.

'In the event of a severe recession in the US, however, it is unlikely that Asian exports and growth will be unaffected,' the MAS report says.

But a temporary slowdown in the US, if confined to the housing sector with little impact on the American consumer, should not derail Singapore's growth prospects.

And if the US economy fares better than expected, the second half of 2008 could surprise on the upside - in which case, Singapore's asset market-related activities could 'bounce back swiftly and strongly', MAS says.

Wing Tai Profit Doubles

Source : TODAY, Wednesday, October 31, 2007

Real estate developer Wing Tai Holdings reported a doubling in net profits to $61.8 million for its first quarter ended Sept 30, due to an increase in its share of profits in joint venture projects.

Revenue was 39 per cent down from a year earlier, to $100.2 million on lower contributions from its development properties such as Kovan Melody, The Meritz and The Lakeside.

$501m Profit For UOB In Q3

Source : TODAY, Wednesday, October 31, 2007

UNITED Overseas Bank (UOB) reported a net profit of $501 million for the third quarter, an 8.2-per-cent increase from the previous year’s $463 million. But compared to the second quarter, its profit after tax was down 14.3 per cent.


















The bank cited “lower trading and investment income resulting from mark-to-market losses from widening credit spreads triggered by the US sub-prime crisis”.

Its net profit after tax in the nine months ended Sept 30 was $1,603 million, up 19.2 per cent from the $1,345 million in the previous year’s corresponding nine months.

As with DBS Group Holdings, none of the $388 million collaterised debt obligations (CDOs) in UOB’s portfolio were in default. But it made a $20-million provision in the third quarter for the CDOs, bringing total provisions to $55 million. Another $46-million provision was made for mark-to-market losses taken to the bank’s reserves, UOB said.

Banks’ exposures to CDOs have been in the spotlight ever since the United States subprime housing mortgage crisis emerged in the second quarter, creating turmoil in global financial markets. Some bonds, including CDOs, are backed by those risky, high-yielding assets.

DBS, the first bank to issue its third-quarter report, recognised $112 million in CDO related provisions and losses. That figure included a $70-million “prudential reserve” against the $275-million CDOs with exposure to US sub-prime assets.

UOB Group’s deputy chairman and chief executive officer Wee Ee Cheong said: “We are pleased with the results achieved. Despite uncertainties in the financial market, our core business remains strong.”

He said that the impact of the credit volatility on UOB’s core business had been minimal, aided by its diversified portfolio in both business and geographical terms.

Mr Wee said the group “will ride out this uncertain period and continue to focus on our core business. We continue to maintain a strong liquidity and capital position so that we have flexibility to scale up for further expansion, particularly in the region where we have been building our capability.”

Net interest income was $714 million, up 4.4 per cent from last year’s $684 million.

Net interest margin slipped to 1.93 per cent from 1.97 per cent a year earlier and 2.04 per cent in the second quarter.

Though up from the year earlier’s $337 million, non-interest income — at $393 million in the third quarter — was down sharply from the second quarter’s $536 million.

Daiwa Institute of Research analyst David Lum said “there was no surprise for the charges it took for sub-prime and CDOs” but interest income was weaker than expected.

UOB shares resumed trading in the afternoon, after the release of the results at midday. At the close, they fell 50 cents, or 2.3 per cent, to $21.50

Those Who Feed The Frenzy

Source : TODAY, Wednesday, October 31, 2007

More supervision of agencies needed to curb property speculation

Letter from HUI CHI SHING

I REFER to the article “Upbeat on Singapore economy” (Oct 30).

As a foreigner who has been working in Singapore for nine years, I regret to say that Singapore is gradually losing its attractiveness to me. This is because of the soaring costs of living in recent years — in almost every area, especially in the residential property market.

Over the last two years, rental for residential properties has generally increased by at least 50 per cent and, in some cases, by up to 100 per cent. Unfortunately, my salary has not been able to match that rate of increase.

With the Singapore economy improving over the years, growth in the property market — in tandem with the economy as a whole — is a natural process.

However, an overly-speculative property market will do more harm than good to the continued expansion of the economy, as well as to the livelihood of Singaporeans and foreigners who work and live here.

In such a climate, the role of the property agencies in instigating such frenzy warrants closer Government supervision.

Some months back, TODAY reported an incident where grossly-inaccurate property market data was published by a certain property agency. When confronted with the correct data, the agency simply claimed that a clerical oversight had been made.

While no outsider can draw a conclusion on the real motive or reason for such an error, one cannot deny that such misleading data had already created fear in the market — a fear among some groups of potential property buyers that “if you don’t join the queue now, you will miss the boat”.

While I can fully understand that it is always in the best interests of the property agencies to keep the property market buoyant, all property agencies must at the same time assume and fulfil their social and professional responsibilities to help potential property buyers and tenants make informed decisions.

As a potential property buyer myself, I keep reminding myself that it is crucial to do my own research using information from several independent sources, rather than rely solely on what the property agencies tell me.

A Helping Hand For The Elderly

Source : TODAY, Wednesday October 31, 2007

As an HDB flat owner, there are five ways you can generate income from your flat for retirement needs























1. RENT OUT YOUR HDB FLAT/ROOM(S)
• You can rent out your entire subsidised/non-subsidised flat* after living in it for at least five years and three years respectively. You need to get approval from HDB to rent out the entire flat.
# Subsidised flats: Flats bought directly from HDB or from the open market with a CPF housing grant; and
# Non-subsidised flats: Flats bought from the open market without a CPF housing grant.
• Alternatively, you can rent out one or more rooms without approval from HDB if you own a 3-room or bigger flat. However, you must continue to stay in the flat.
• You can receive a monthly rental of about $200 to $500 for a room, and $450 to $1,400 for an entire flat.
• You will pay a higher property tax (10 per cent) if you rent out the entire flat. There will be no change to your property tax if you only rent out room(s).

2. MOVE TO AN HDB STUDIO APARTMENT
• You can sell your flat and buy a 30-year lease Studio Apartment (SA).
• If you are the main applicant for an SA, you must be a Singapore Citizen and at least 55 years old.
• You may buy the SA with other eligible applicants. If they are related to you, such as your spouse, parents, siblings or children, they must be Singapore Citizens or Singapore Permanent Residents (SPRs) and at least 21 years old. If they are not related to you, they must be Singapore Citizens and at least 35 years old.
• Applicants who are 55 years old and above can use their CPF savings to pay for the SA after setting aside the CPF Minimum Sum cash component. After you sell your flat and buy an SA, you would expect to have some money left. You may consider buying a life annuity with this money so that you can receive a monthly income for life.

3. MOVE TO A SMALLER, CHEAPER HDB FLAT
• You can sell your flat and buy a smaller, cheaper flat from the resale market or a smaller subsidised flat from HDB such as a 2- or 3-room flat. However, if you are a second-time buyer of a flat from HDB or have taken a CPF Housing Grant before, you need to pay the resale levy if you choose to buy another subsidised flat from HDB.
• You need to meet the prevailing eligibility conditions to buy a new flat from HDB or a resale flat.

4. REVERSE MORTGAGE
• A reverse mortgage loan on your flat is a way to allow you to continue staying in your flat and receive a monthly income at the same time.
• The youngest flat owner in the household must be at least 62 years old and the owner should have little or no outstanding HDB or bank housing loans and/or upgrading costs.
• The monthly cash amount you will receive depends on the age of the youngest borrower, loan period, prevailing interest rate and the property value of your HDB flat.
• You will need to repay the loan when you sell your flat or when the loan term expires.
• NTUC Income currently offers this scheme. You should obtain information, understand how it works and consider carefully the cost and risk involved, before deciding to reverse mortgage your flat

5. LEASE BUYBACK SCHEME
The Lease Buyback Scheme (LBS) is a new monetisation option where HDB will buy back the tailend of the lease of a 2-room or 3-room flat from elderly lessees (aged 62 and above) who have enjoyed only one housing subsidy or none at all.

This will leave them with a shorter lease of 30 years on the same flat. They will be able to stay on in the same flat to enjoy the familiarity of their home and community.

The owners will receive the payout in three parts:
• A lump sum upfront upon joining the scheme;
• Monthly payments for 30 years as a steady stream of income; and
• Longevity insurance that will pay out a monthly allowance for as long as they live.

The amount “unlocked” by the buyback will depend on each flat’s market value. In addition to the payout from the flat, the lessee will also receive a subsidy from the Government.

Details of the scheme are being worked out and an announcement will be made in due course.

------------------------------------------------------------
REVISED ADDITIONAL CPF HOUSING GRANT SCHEME

The Additional CPF Housing Grant (AHG) Scheme was introduced in March 2006 to help lower income families buy their first home. It is given on top of existing housing subsidies that these flat applicants can enjoy either for the purchase of a new or resale HDB flat.

ELIGIBILITY CONDITIONS
Applicants must be Singapore Citizen families buying a subsidised HDB flat for the first time. They must also satisfy the “workfare” condition whereby at least one of the flat buyers must have worked continuously for at least two years at the point of application to buy the flat. This condition ensures that flat buyers are able to sustain their housing payments over the years.

REVISED AHG SCHEME
The revised AHG Scheme came into effect on Aug 24 this year to provide more public housing subsidies and to enable more lower-income first-timer families to own their first homes. Under the revised scheme, the income ceiling was raised to $4,000 per month and the grant amount increased to $30,000.













FOR MORE INFORMATIONS :-
VISIT
• Sale/Resale Enquiry Counters at Atrium 1st Storey, HDB Hub, Toa Payoh Lorong 6; or
• Rental Housing Section at Atrium 3rd Storey, HDB Hub, Toa Payoh Lorong 6; or
• Any HDB Branch Office

CALL
HDB Resale/Sales Customer Service Line: 1800-8663066
HDB Branch Office Service Line: 1800-2255432
HDB 24-hour HomeLink: 1800-8663060

LOG ON TO
HDB InfoWEB: www.hdb.gov.sg

FOR REVERSE MORTGAGE MATTERS
NTUC Income hotline: 6788 8788
NTUC Income website: www.income.com.sg/loans/reversemortgage/hdb/
Email: cs8788@income.com.sg

Horizon Towers Saga Sees New Twist

Source : TODAY, Wednesday, October 31, 2007

Flat owner who backed en bloc move challenges legality of sale in court

THERE was none of the sparks, spats and conspiracy theories that characterised the High Court hearing last month. Still, the Horizon Towers saga returned yesterday with yet another twist.

The hearing started with an owner, who had previously supported and signed up for the en bloc sale, challenging the legality of the sale.

Lawyer Cheong Yuen Hee, who represents the owner, argued before the Strata Titles Board (STB) that the collective sale agreement (CSA), and the purchase and sales agreement had "lapsed" and were "no longer in operation".

Mr Cheong likened the $500-million sale of the Leonie Hill development to "a joint venture" where the "joint objective was to sell at a profit". The CSA was no longer valid as three members of the original sale committee had left.

But lawyer for the majority owners, Senior Counsel Chelva Rajah, argued that if the agreements were not valid, a party should go to court to get an order against them — that is, the STB should not be the one to decide if the CSA was valid.

The five-member tribunal, chaired by STB deputy president Dr Philip Chan, gave Mr Cheong till Friday to make his written submission on his application. The majority owners would then have till Monday to respond. Other parties also have till Friday to hand in their submissions on various issues.

The STB is hearing the majority owners' application for a collective sale and deciding if the $500-million sale to a group of buyers should go through. On Aug 3, the STB had dismissed the majority owners' application on the grounds that it was incomplete as it was missing three signature pages.

Earlier this month, the High Court overturned the STB's ruling and said the missing pages do not constitute a substantial omission that prejudiced the minority owners. It sent the application back to the board.

Yesterday's two-hour hearing witnessed applications contested vigorously by the majority and minority owners. Lawyers of two groups of minority owners applied to release all correspondence between the sales committee and the lawyers for the sale. The majority owners, however, objected and argued that the information was "legal privilege".

The STB will next convene on Tuesday and the hearing is set for eight days.

Deepavali Road Closure

Source : TODAY, Wednesday, October 31, 2007

If you’re headed for the curry houses along Race Course Road (between Hampshire Road and Race Course Lane), take note that the road will be closed to all vehicles between 3pm and 10pm on Saturday for the Deepavali celebrations organised by the Hindu Endowment Board.

Auxiliary police officers and marshals will be on hand to assist and regulate traffic.

Vehicles parked indiscriminately will be towed away.

Pedra Branca Dispute To Be Heard By International Court Of Justice

Source : TODAY, Wednesday, October 31, 2007

The dispute between Singapore and Malaysia over the sovereignty of Pedra Branca, Middle Rocks and South Ledge will be go before the International Court of Justice (ICJ) from Nov 6 to 23 in The Hague.

The ICJ hearings come after three rounds of written pleadings were exchanged between the two neighbours between March 2004 and November 2005.

The Singapore delegation will comprise Deputy Prime Minister, Coordinating Minister for National Security and Minister for Law Professor S Jayakumar, Chief Justice Chan Sek Keong, Attorney-General Chao Hick Tin and Ambassador-at-Large Professor Tommy Koh.

It will also include other senior Government officials and an experienced team of international legal counsel.

Could Property And Stock Markets Lose Top Billing?

Source : TODAY, Wednesday, October 31, 2007

EARLIER this year, the asset markets, namely those related to property and stocks, were among the star performers of the Singapore economy. But the outlook for these markets is less clear in the coming months as risk aversion among investors lingers amid the global financial market turmoil.

Despite the uncertainty, the Monetary Authority of Singapore (MAS) is still keeping to previously announced forecasts for broad economic growth. It expects the gross domestic product (GDP) to expand at the upper end of the 7 to 8 per cent range this year, before moderating to 4 to 6 per cent this year. The MAS assumed higher oil prices and the possibility of more volatility in the global financial markets in its forecast.

The economic projections were contained in the MAS' Macroeconomic Review, released yesterday. The report, issued twice a year, provided the economic backdrop to the recent decision by the MAS to allow the Singapore dollar to appreciate faster.

The MAS said that while many of Singapore's economic sectors are "poised for healthy growth in 2008", the overall economic outlook for next year "is more uncertain, as it hinges on the severity of the weakness in the United States' housing sector".

The de facto central bank said the wealth advisory, capital and property-related markets accounted for close to 30 per cent of GDP growth in the first half this year because of the buoyant investment climate. However, the third quarter saw growth slowing as a result of the US sub-prime loan crisis, which spooked financial markets around the world in August.

"Stock market volumes have recovered somewhat since mid-September," the MAS said. "There has been renewed interest in Asia equities and particularly in Chinese stocks, some of which are listed on the local bourse."

But it said that 2008 trading volumes are unlikely to match this year's high stock market activity. Among other uncertainties, "latest data suggests that a full recovery in equity fund flows to Asia has yet to materialise", although investors could rebalance their portfolios towards Asia to mitigate potential downturns elsewhere, it said.

The MAS offered a more optimistic outlook for property-related industries, given that most of the large infrastructure and housing projects were entering the stage where the largest payments occur. "Projects in the pipeline should be sufficient to support fairly robust growth for the construction sector next year, even if new launches are held back by the recent financial market turmoil," the MAS said.

In other areas of the economy, the IT-related sector has seen nascent signs of recovery in the second half of this year, and is expected to pick up further next year. The expected rise will serve as an important boost to the overall economy, given the sector's share and extensive linkages with the broader economy.

Indeed, the slump in this sector shrank its contribution to GDP to just 4 per cent in the first half of this year, from about the annual average of 31 per cent between 2000 and 2006.

Except for electronics production, which shrank 5.7 per cent during the second quarter, there was broad-based growth across various sectors of the economy.

Standard Chartered economist Alvin Liew agrees with the MAS' assessment of the financial sector. "If we are factoring a slowdown in external markets next year, we would probably see some easing of growth in the sector, for example, asset management."

Looking further ahead, Mr Liew added that "the sector is poised for long-term growth because of various factors that allow it to thrive," including a good tax and legal infrastructure, and a relatively stable currency.

He isn't too concerned about the economy's shift in reliance from the IT sector. "There is a conscious effort by the Government to reduce reliance on any single industry, which is a prudent approach for economic development," Mr Liew said.

Horizon Towers Battle Returns To Strata Titles Board

Source : The Straits Times, Oct 31, 2007

Majority sellers start second attempt to get STB's approval for the $500m sale

THE saga of the botched $500 million collective sale of Horizon Towers moved a step closer to possible resolution when it returned to the Strata Titles Board (STB) yesterday.

Owners who support the bitterly contested sale to developer Hotel Properties and its two partners are battling it out with those opposed to the sale, first inked in February.

An earlier STB hearing ended abruptly on Aug 3, when the board threw out Horizon Towers' application to approve the collective sale on technical grounds, because three pages were missing.

On Oct 11, the High Court overturned the STB's decision and threw the case back to the board for the hearing to be continued.

The fight over Horizon Towers erupted in April when a group of owners decided the estate's sale price was insufficient in view of the rising market.

The buyers have launched a lawsuit against the owners for alleged breach of contract. They want to claim lost profits of up to $1 billion.

That legal battle will be averted if the condo owners finally win the STB's approval for the sale.

Lawyers from Allen & Gledhill, representing the buyers,

had wanted to take part in the STB hearing but their application for permission to do so was dismissed recently.

That leaves a battle between the majority owners, represented by Senior Counsel Chelva Rajah of Tan, Rajah and Cheah, and the minority owners, represented by various lawyers.

An otherwise unexciting hearing yesterday offered one surprise, when a lawyer turned up unannounced and was asked to leave the lawyers' table.

He had been appointed by an owner who had agreed to sell Horizon Towers en bloc.

But before he left, the lawyer - Mr Cheong Yuen Hee of J. S. Yeh & Co - was allowed to outline his client's key points of contention.

He was then asked to file a written submission.

Mr Cheong alleges there is a 'frustrated' collective sale agreement as well as sale and purchase agreement.

He said his client does not accept the new sales committee or its authority to extend the condo's sale deadline to Dec 11.

The new committee recently stretched the deadline as part of its efforts to avert the buyers' lawsuit.

A lawyer who has been following the case said Mr Cheong's statement was significant.

'It's dramatic because it's the first time a majority owner has come out to say the deal is dead, under the hammer of a lawsuit,'' he said.

Yesterday was the first of several days of hearings scheduled until mid-November.

The next session is on Tuesday.

In coming sessions, to be held at a court room in City Hall building, lawyers will call witnesses to support their respective positions.

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New twist

In a surprising turn, Mr Cheong Yuen Hee of J. S. Yeh & Co, a lawyer appointed by an owner who had agreed to sell Horizon Towers en bloc, turned up unannounced.

He alleges there is a 'frustrated' collective sale agreement as well as sale and purchase agreement. He said his client does not accept the new sales committee or its authority to extend the condo's sale deadline to Dec 11.

UOB Reports 14% Drop In 3rd-Quarter Net Profit

Source : The Straits Times, Oct 31, 2007

THE recent credit market turmoil has come home to roost at United Overseas Bank (UOB), which yesterday reported a 14 per cent drop in its third-quarter net income to $501 million from the previous quarter.

Unlike rival DBS, however, UOB did not take its heaviest hits directly from higher provisions to cover a fallout from risky debt holdings.

Instead, it suffered from a lower trading and investment income, triggered indirectly by the United States sub-prime mortgage crisis.

UOB's third-quarter net profit was still 19 per cent higher than a year ago, helped by robust loans growth as individuals and developers snapped up properties in Singapore.

The results, however, were lower than the average net profit estimate of $506 million by seven analysts polled by Dow Jones Newswires. That sent the shares down 50 cents in afternoon trade to close at $21.50.

UOB's treasury operations took a hit, with its foreign exchange, securities and derivatives income falling from $97 million to $26 million.

The bank blamed its lower trading and investment income on 'mark-to-market losses' - a slide in the market value of securities it held as at the end of last month.

Investors are jittery about the extent of risky and complex assets held by financial institutions. They are demanding much higher premiums to compensate for the higher risks they perceive in lending to funds in the commercial paper market.

This has, in turn, widened credit spreads - the difference in yield between a riskier corporate bond and a relatively risk-free government bond.

Meanwhile, UOB's holdings of collateralised debt obligations (CDOs) - products packaged from risky mortgages in the US - remained unchanged from the previous quarter at $388 million. None are in default.

UOB said its more subdued trading and fund management performance prompted it to lower provisions for staff bonuses, which accounted for the bulk of the roughly $17 million cut in its total operating expenses for the quarter.

However, UOB did make a $20 million provision for its CDO portfolio in the third quarter. This brought its total provision so far to $55 million.

As a further conservative step, UOB took another $46 million provision for mark-to-market losses to its reserves.

In comparison, DBS set aside $70 million as provisions against risky debt assets and also marked down $42 million against its exposure to a vehicle that invests in CDOs.

The volatile market conditions also squeezed UOB's net interest margins by 0.11 of a percentage point to 1.93 per cent, as the bank shifted more funds to shorter-term good quality investments. These are relatively less risky but have a lower yield.

UOB chief executive Wee Ee Cheong said in a statement issued yesterday: 'The market is undergoing a volatile period, but the impact of the credit volatility on our core business has been minimal, and our core business remains strong.'

UOB's main business of lending recorded a 15.6 per cent rise in total net loans to $85.2 million as at the end of September.

This lifted its net interest income, which is what it earns from borrowers after paying interest to depositors, to $714 million from a year ago.

Get Tough With Rogue Property Agents

Source : The Straits Times, Oct 31,2007

IT IS stated on the website of the Institute of Estate Agents (IEA) that an agent should not accept any commission from both vendor/seller and purchaser/buyer in the same transaction ... (Section 2.2.1 on page 3 on website). It is also stated that the professional fee is 2 per cent from the seller and 1 per cent from the purchaser if each of them is represented by the agent.
I would like to highlight a few points:

1) What is the recourse to the buyer without an agent if the seller's agent insists that the potential buyer pay a 1 per cent commission, failing which the agent won't go through with the transaction to sell the HDB flat to the buyer? The buyer is pressured by the agent because if he/she doesn't pay the 1 per cent commission, the seller's agent will not entertain the buyer upon signing the Option to Purchase. If the buyer decides to use legal recourse (which would take months), the property will be bought by other buyers who are willing to pay the 1 per cent commission. How does this benefit the seller as the agent is acting on his/her own interests rather than the seller's? How is the buyer's interest protected in this case? Is there any way to report the rogue agent to the authorities?

2. Are professional fees highlighted on the IEA website regulated or enforced? I am asking this because an agent can flout the rules by not letting any potential buyer view the property if he/she insists on not paying the 1 per cent commission to the agent although the agent is already paid 2 per cent by the seller. Any buyer who insists on not paying the 1 per cent commission will have considerably fewer chances to view flats. And the seller will, in turn, get fewer sales opportunities because his/her agent wants to pocket commissions from both the buyer and the seller.

3. Agents who flout the rules are punished lightly. If fired, they will simply join rival agencies. Because of the light punishment, agents are not afraid of breaking the rules. Lawsuits are out of reach for the common people, and rouge agents are using this knowledge to their advantage. How are property buyers/sellers protected from rouge agents?

4. The regulating authority should use 'mystery shoppers' (or 'buyers' in this case) to make spot checks on agents. Those found guilty should be banned or punished severely. This is to protect genuine agents who play by the rules.

Sentosa Gani

View Showflat? Hand Over Blank Cheque First

Source : The Straits Times, Oct 31, 2007

I AM writing to highlight what may be the start of a trend that property buyers need to be aware of.

Recently, I wanted to view a newly built showflat near Upper Bukit Timah Road but I was not allowed in.

The reason was that I had to present a signed blank cheque with the intention of booking a unit before I would be admitted into the showflat.

Is such a practice allowed and are there any watchdog organisations that regulate the sale practices of developers or agents assigned to market properties?

Prospective buyers should not be coerced into buying a property costing a million dollars, though this may be a small sum in today's property market.

Chue Shien (Ms)

MAS Forecasts More Moderate Growth Next Year

Source : The Straits Times, Oct 31, 2007

Diversified economy with less reliance on tech sector will soften external risks

SINGAPORE'S sizzling economy - on track for 7 per cent to 8 per cent growth this year - is expected to hum at a somewhat slower rate next year.
But it is still expected to power ahead at a 4 per cent to 6 per cent rate of expansion, thanks to a far more diversified economy.

In highlighting interesting shifts in the make-up of the economy yesterday, the Monetary Authority of Singapore's (MAS) latest macro-economic review threw up this dramatic fact: the electronics industry, once all-important to the economy, contributed a puny 4 per cent to economic growth in the first half of this year.

That is a sea change from as recently as 2000, when its contribution to growth was a hefty 40 per cent.

Relying less on this sector to bring in the goods is, however, a good thing for the economy, especially in the face of a number of factors that could cause some economic turbulence - and thus lead to lower growth - next year.

Among these: high oil prices, now at about US$93 (S$135) a barrel, and possible further volatility in global markets.

But, the central bank said, diversified growth sources should see Singapore through.

For example, the booming construction, marine and oil-rig building industries will lead economic expansion next year. The MAS said the building boom will have its biggest payoff for the economy later this year and into the next, as many projects will be ready to receive large payments.

And as high oil prices continue to drive oil exploration, demand will spike for oil rig projects. A record number of oil rigs is set to be delivered by Singapore's big shipyards next year.

Another strong performer will be the biomedical sector - pharmaceuticals and medical equipment, for instance.

'This year, we can really see a marked change in the diversification of our gross domestic product (GDP),' said CIMB-GK economist Song Seng Wun. 'It's the first time since the Asian financial crisis that we have this kind of balanced growth.'

Another key driver of growth this year, the MAS said, was 'asset market-related' activities - related to the property and financial services sector.

This contributed almost 30 per cent of GDP growth in the first half of this year, up from just 16 per cent for 2006.

It includes the wealth advisory and capital market segments, and the construction sector, which has been driven by the property boom.

This has also spilled over to financial and business services, where loans to the building and construction industry has hit double digit growth since the second half of last year.

Economists that The Straits Times spoke to are more optimistic about next year's growth than the MAS.

CIMB-GK's Mr Song is looking at a baseline growth of 6.5 per cent next year, while Standard Chartered economist Alvin Liew has set a 5.7 per cent target.

'Growth will still be strong in various sectors, but it won't be surging at the rates we've seen this year,' he said.

But economists say one crucial aspect to watch out for is rising inflation.

It hit 2.9 per cent in August - the biggest monthly rise since 1994.

MAS expects inflation of 1.5 per cent to 2 per cent this year, and up to 3.5 per cent for the first half of 2008.

But it expects this to ease in the second half of the year, with inflation at 2 per cent to 3 per cent for the whole of 2008.

'Ultimately, if we have high inflation, that could be destabilising for the economy. But we don't think that's a big risk,' said Mr Song.

Pedra Branca Court Hearing Sarts Next Week

Source : The Straits Times, Oct 31, 2007

International court to settle row over S'pore island claimed by KL

SINGAPORE and Malaysia will go before an international court next week to argue their claims of sovereignty over an island in the Singapore Strait.
The hearing before the International Court of Justice (ICJ), in the Netherlands, is to settle their dispute over Pedra Branca and two outcrops - the Middle Rocks and South Ledge.

It is the final stage of a longstanding disagreement that goes back to 1979.

Both countries have said they will accept the ICJ's decision.

The court has set aside three weeks, starting on Nov 6, to hear the case, said a Ministry of Foreign Affairs statement yesterday.

The hearings at the Peace Palace in the Hague, where the 15-member court is located, follow three rounds of written pleadings Singapore and Malaysia exchanged between March 2004 and November 2005.

These exchanges of documents were the result of a special agreement they signed on Feb 6, 2003, to submit the dispute to the ICJ.

Singapore has exercised sovereignty over the island, which is the size of a football field, since the 1840s when the British colonial government built the Horsburgh lighthouse there.

The island, about 40km east of here, is located strategically at the eastern entrance of the Singapore Strait.

However, in 1979, Malaysia staked its claim on the island - which it calls Pulau Batu Putih - when it published a new map of its territories. The map included Pedra Branca.

That touched off a row over who owns the land.

Singapore's delegation to the hearing comprises Deputy Prime Minister and Law Minister S. Jayakumar, Chief Justice Chan Sek Keong, Attorney-General Chao Hick Tin and Ambassador at Large Tommy Koh.

Accompanying them are senior government officials and a team of international legal counsel, said the MFA.

The counsel are:

Queen's Counsel Ian Brownlie, an international law specialist from Oxford University;

Professor Alain Pellet of the University of Paris X-Nanterre, a member of the United Nations International Law Commission;

Mr Rodman Bundy of the English firm Eversheds. He specialises in boundary and territorial dispute resolution; and

Ms Loretta Malintoppi, also of Eversheds and an international arbitration and public international law specialist.
The ICJ website says Singapore has four days, from Nov 6, to present its case, followed by Malaysia, from Nov 13 to 16.

Both sides then respond, Singapore on Nov 19 and 20, and Malaysia on Nov 22 and 23.

The ICJ, formed by the United Nations in 1946 to deal with legal disputes between states, is expected to announce its decision only next year.

MMP REIT Posts 7% Gain In Q3 Distribution Income

Source : Channel NewsAsia, 30 October 2007

MMP REIT has reported a seven per cent gain to S$14.6 million in its third quarter distribution income, which translates to a distribution per unit of 1.54 Singapore cents.

Revenue was up 16.5 per cent to S$26 million, thanks to contributions from the new overseas acquisitions in Japan and China. Strong demand for retail and office space and the resulting higher rental rates in Singapore also helped.

Macquarie MEAG Prime Real Estate Investment Trust (MMP REIT), the manager of REIT, Macquarie Pacific Star, said it is exploring ways to buy back units of the trust.

Results Of URA's Auction Of Landed Housing Parcels At Sembawang Road/ Andrews Avenue (Sembawang Greenvale Phase 1)

Source : Urban Redevelopment Authority (URA) News Releases, 30 October 2007

The Urban Redevelopment Authority (URA) successfully concluded the public auction of 12 Land Parcels for landed housing development (Sembawang Greenvale Phase 1) at Sembawang Road / Andrews Avenue today.

The Land Parcels were launched for sale on 28 August 2007 (http://www.ura.gov.sg/pr/text/2007/pr07-89.html). All the Land Parcels are zoned for residential uses and are on 99-year leases.

All 12 Land Parcels were sold at the public auction today. The details of the auction results are shown in Annex A.















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For media enquiries, please contact:

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

Wing Tai Doubles Q1 Profit To S$61.8m

Source : Channel NewsAsia, 30 October 2007

Higher contributions from two condominium projects in Singapore have helped Wing Tai to double its first quarter profit.

For the three months to September, the property developer booked earnings of S$61.8 million, despite a 39 percent fall in revenue to S$100 million.

Wing Tai is planning to put several new residential projects in Singapore on the market in the next few months.

It says it will continue to position itself to ride on the positive sentiment in the Singapore property market and expand its business activities overseas.

Towards this goal, it signed a memorandum of understanding to develop a real estate project in Chengdu last month.

This will be the developer's first property project in China. - CNA/so

UOB's Q3 Net Profit Up 8.2% To S$501m

Source : Channel NewsAsia, 30 October 2007

Singapore's United Overseas Bank (UOB) said on Tuesday that its third-quarter net profit rose 8.2 percent from a year ago, boosted by a growth in lending and income from fees and commission.

Earnings came in at S$501 million from S$463 million in the same period last year, the company said in a statement to the stock exchange. Revenue for the three months to September was S$1.1 billion, up an annual 8.4 percent.

Net interest income grew 4.4 percent to S$714 million as lending expanded, while non-interest income increased 16.5 percent to S$393 million.

Compared with the second quarter, net profit fell 14.3 percent.

"The decrease was mainly due to lower trading and investment income resulting from mark-to-market losses from widening credit spreads triggered by the US sub-prime crisis," the bank said.

UOB said none of the S$388 million in collateralised debt obligations (CDOs) it holds as investment is in default.

For the September quarter, the bank said it set aside another S$20 million worth of provisions against its CDO investments, raising the total provision to S$55 million.

In addition, UOB made another S$46 million in provision for mark-to-market losses against its reserves.

"We are pleased with the results achieved. Despite uncertainties in the financial market, our core business remains strong," said the UOB Group's deputy chairman and chief executive Wee Ee Cheong.

"The market is undergoing a volatile period but the impact of the credit volatility on our core business has been minimal."

Last Friday, rival DBS Group Holdings, Southeast Asia's biggest bank, said its third-quarter net profit rose an annual 11 percent to S$610 million as lending expanded due to a strong economy.

Fees earned from stockbroking, investment banking, loan syndication and wealth management also contributed to the earnings, DBS said. - AFP/ir