Monday, November 12, 2007

New Upcoming Launches For The Month of November '07

District 9 & 10

Naga Court By Keppel
Sui Generis @ Balmoral
Former Far East Mansion Site By Fraser Centrepoint
Luma @ River Valley Grove
Exclusive 44 units @ Leonie Parc View
Parkview Elcat @ Grange Rd
Cliven @ Grange Rd By MCL land
One Devonshire
Element @ Stevens Rd

District 11
Soleil By Fraser Centrepoint
Relaunch of Park Infinia

District 15
D Oasis @ Kembangan MRT
Seabreeze @ Marine Parade
Former Versilia (Haig Garden Site)
Aalto @ Meyer

District 21
Casxadia @ Upper Bukit Timah
Jardin @ Dunearn Rd

Ascott Residence Trust Aquires 18 Rental Properties In Tokyo

Source : Channel NewsAsia, 12 November, 2007

Ascott Residence Trust is acquiring 18 rental housing properties, comprising over 500 units, in Tokyo for S$160 million.

The properties have an average age of 18 months and a lettable area of 13,000 square metres.

The acquisition will increase the value of Ascott's portfolio to S$1.3 billion.

The assets in Japan will account for 21 per cent of the value, up from 11 per cent before the acquisition.

Ascott will fund the acquisition with borrowings, raising its gearing to 37 per cent. - CNA/ac

No Plans To Introduce New Measures To Cool Property Market

Source : Channel NewsAsia, 12 November, 2007

Property prices have been climbing in the past months, but the government does not plan to take further action to cool the property market for now.

The assurance came from National Development Minister Mah Bow Tan who was responding to MPs' concerns in Parliament on Monday.

Q3 figures showed an 8.3 percent increase in prices of private residential properties, while prices of HDB resale flats rose by a 10-year high of 6.6 percent.

Last month, the government announced that it would do away with the deferred payment scheme for property purchases.

Seen as a move to reduce speculative activity and to stabilise the market, Mr Mah said the measure was sufficient for now.

He said: "If there is a need to act, we would. But at this point in time, there is no need and no intention for us to take any further action.

"The position that the government takes is that we will provide information on the supply-and-demand situation. We will put out supply as much as we can, taking into account medium- and long-term positions, and our bias is really not to over-regulate or to interfere in the market."

Mr Mah also said the withdrawal of the deferred payment scheme has not affected genuine buyers.

Another concern raised was whether there is a shortage of private residential units in Singapore.

MP Ho Geok Choo of West Coast GRC asked Mr Mah to cite the means with which the National Development Ministry would consider increasing the supply of property.

Mr Mah replied: "At the end of Q3 2007, there was a supply stock in the pipeline of 65,000 units. This, in fact, is higher than the supply at the end of Q2 – 56,000 units.

"If Singaporeans are aware of these figures – and these are numbers that we put out regularly – there is no reason for Singaporeans to panic and feel that there is a real shortage in the medium term."

The same applies to public housing - as HDB will be ramping up its building programme to offer over 4,000 new flats in the months ahead.

Mr Mah added that more sites will also be put up under the Government Land Sales Programme in the first half of next year, if necessary.

But this will be done carefully so as not to create an oversupply situation in the longer term. - CNA/so

F&N’s CEO Hunt Halted As Hsien Yang Rethinks Strategy

Source : The Business Times, November 12, 2007

Chairman to review splitting of company: sources

Fraser & Neave (F&N), the local food and beverage giant, which is also in property and publishing, has temporarily ceased its search for a new chief executive officer following the departure of Han Cheng Fong a month ago over differences with the board.

At the time of Dr Han’s departure on Oct 5, F&N in a press release said that pending the appointment of a new chief executive, the board’s chairman ‘will oversee management of the group’.

Sources said that former Singapore Telecommunications head Lee Hsien Yang, who took over the chairmanship of the company on October 15 and who has been overseeing the group’s management since, suspended the search, pending a review of the group’s future direction - whether it should remain in its present form or split into its three major components.

It is not known how long the review will take but in the meantime, Mr Lee appears to have been taking a hands-on approach and meeting all the department heads to get to know the company’s current structure.

Among the differences that had caused Dr Han, 65, to leave F&N after seven years with the group, was the proposal to hive off and possibly relist the property and publishing arms of the company on the local bourse.

Dr Han was said to have been asked by former chairman Michael Fam to present a paper on the proposal. While Dr Han himself is said to have not expressly opposed the idea, the paper presented by him after consultations with the group’s top management showed that most felt that a split, especially just five years after the publishing and property companies - Centrepoint Properties and Times Publishing - had been privatised and placed under F&N’s direct control, would have more negatives than positives.

Many, it seems, felt that morale among staff would be adversely affected by fears of retrenchment and lay-offs.

When the TimesPub and Centrepoint Properties were taken private Dr Fam in giving the rationale for the privatisation said: ‘The privatisation of Centrepoint and TimesPub is aimed at restructuring F&N into a stronger and more flexible group, to further enhance shareholder value and sustain long-term growth … F&N, as an entrepreneurial shareholder in these companies, already plays a proactive and pivotal role in charting the strategic directions of these businesses. The privatisation of Centrepoint and TimesPub will give more flexibility in managing their resources.’

Dr Fam then went on to add that ‘through appropriate rationalisation and consolidation measures, we hope to realise greater synergies within the group - for instance, by sharing best practices and tapping on the combined wealth of experience, knowledge and expertise of the management teams’.

However, there is now a school of thought that feels that splitting up the company into food and beverage, property, and publishing would fetch better value - the so-called ’sum of parts’ theory.

This school feels that the publishing unit, whose performance has been relatively poor, is a drag on the group’s share price.

The group also notes that circumstances have changed since TimesPub and Centrepoint Properties were taken private. Then, the property market was in the doldrums, but despite recent government measures to quell speculation, it has been holding up pretty well, and is now one of the biggest contributors to group profit.

So it is no surprise that Mr Lee now wants to take another look at the arguments for and against the splitting up of the group and possible divestment or public offerings of the property and publishing units.

How the two biggest shareholders, the Oversea-Chinese Banking Corporation group and Temasek Holdings, view the matter is not known. But OCBC, which has a near 20 per cent stake in F&N, and the government holding company, which paid $900 million for a 15 per cent stake in F&N last December, will want the best returns possible.

Meanwhile, Dr Han has, since the beginning of November, joined the Hong Kong-listed arm of local property magnate Ng Teng Fong. Dr Han has been appointed chief executive of Sino Land’s China operations, and also chief executive of another of its units, Far East International.

The Sino Group, which has a market capitalisation of over $21 billion was reported to have said: ‘The (Dr Han’s) job is to expand our real estate interests in China and other markets of interest.’ Dr Han is also expected to look after the group’s interest in Singapore’s Fullerton Hotel, which includes Fullerton Waterboat House, The Fullerton Hotel, One Fullerton with its trendy restaurants, and its recently acquired Collyer Quay site.

过去十年虽落在私人公寓之后 EC前景仍看好

《联合早报》Nov 12, 2007

尽管过去10年来的价格涨幅和投资回报都落后于私人公寓,执行共管公寓(Executive Condominium,简称EC)的前景仍然被看好,被房地产业界视为一种不错的投资。不过,条件是EC买家必须持长线投资策略,撑足10年的持守期。





以四美苑(Simei Green)EC来说,今年第三季的中位价为每平方英尺519元。周围约七八年屋龄的99年地契共管公寓,包括东福园(Eastpoint Green)、Modena和澎涛苑(Tropical Spring),中位转售价格却为每平方英尺578元,即10%的价差。

至于西部的蔚湄园(Westmere),目前中位价为每平方英尺447元,这与附近的柏奥花园(Parc Oasis),以及玫芳园(The Mayfair)的每平方英尺547元,相差了18%。



估计800个EC单位 2009年将被私有化

到了2009年,他估计有大约2800个EC单位将被私有化。这相信包括了东桦苑(Eastvale)、蔚湄园、芊桦园(Chestervale)和松霏园( Pinvale)等的EC单位。


建屋局预料会在这个月,开放榜鹅一幅2.27公顷的地皮,让发展商申请兴建EC。政府最后一次推出EC地皮是在2004年,该位于兀兰的地皮由远东机构标得,并于2005年以佳乐园(La Casa)的名字推出。这也是发展商推出市场的最后一个EC。













不过,整体来说,目前的EC行情已经比去年的情况明显改善,大多数转售单位的屋主还是能够套取一些利润。例如后港的富乐园(The Florida)两个月前就有一个9楼的单位,以65万元卖掉。不过,以屋主原本60万9000元的原价计算,扣除其他费用和利息,利润也可能所剩无几。

New Analysis - Asian Decoupling From Wall St Not A Sure Thing

Source : The Straits Times, Nov 12, 2007

More wild swings in regional share prices likely until US credit woes subside

IN RECENT months, as regional bourses hit record-high levels, it has become popular to bandy around the theory that Asian economies have successfully decoupled from the United States.

But like financial markets all over the world, Asian bourses took a severe beating last week as credit woes deepened in the US.

Yet, despite the battering, market sentiment is still undeniably bullish across the region.

Bullish or bearish?

WHILE fear stalked Wall Street and European markets, investors in Asia were celebrating the Shanghai listing of PetroChina, which became the first company on the planet to hit a market value of over US$1 trillion (S$1.44 trillion).

Across the border, China's decision to delay an initiative to allow its citizens to buy Hong Kong shares directly failed to dampen sentiment as traders cheered e-commerce provider's listing. The counter nearly tripled in price on its debut.

Still, the picture across the region may not be as rosy as what some have been painting.

In the space of one month, Japan's Nikkei 225 Average has fallen 11 per cent, while China's Shanghai Composite Index is down 13 per cent.

And while the benchmark Straits Times Index (STI) in Singapore has dropped only 7.3 per cent, the fall was painful enough to make investors sit up and notice.

Even mighty Hong Kong, which had attracted billions following China's recent moves to liberalise the flow of investment funds overseas, was not spared. Its Hang Seng Index has lost 9.1 per cent in a fortnight.

Broadly speaking, major markets like Tokyo and Shanghai are already experiencing a correction - a term used to describe market conditions when bourses fall 10 per cent or more.

But market experts have, so far, been remarkably sanguine about the losses sustained by regional bourses.

They argue that Asian markets have risen so much this year that a 2 per cent or 3 per cent correction in a day would be normal. And the case for investing in Asian equities has never been stronger.

Some argue that Asian economies are growing strongly and the accompanying surge in intra-regional trades will more than offset any slowdown in the US, as the mortgage slump there deepens.

And cheap money, fuelled by the US Federal Reserve's interest rate cuts, will keep interest in Asian equities on the boil.

As Asian central banks are determined to keep their currencies down against the weakening greenback, this will attract savers to switch out of low-yielding fixed deposits and into equities, as inflation gallops ahead of interest rates.

But these arguments are beginning to look wobbly.

A part or apart?

STUDIES have shown that Asian and US stock markets are more correlated now than they have been in the past 30 years.

And much of the intra-regional trade is just processing. Asian manufacturers still rely on the giant US market to buy the bulk of their finished goods - so any slowdown in the US economy is still likely to hurt Asian economies badly.

In other words, a decoupling of Asia from Wall Street may simply not be on the cards yet.

Also, believing that credit woes will be confined to Western banks may be naive.

A bear market among global financial institutions will cast a pall over the rest of the global economy.

One good case in point was last week's plunge in US technology stocks - regarded until now as a safe haven - as investors were spooked by concerns that banks may pare their technology budgets to conserve capital.

It is now clear that the two interest rate cuts by the Fed have failed to salvage the crisis-hit credit markets that needed the bailout badly.

Even AAA-rated mortgage- backed bonds are being sold down at a fraction of their issue prices, and this has forced banks like Citigroup and Merrill Lynch to write down billions on their portfolios.

Instead, the Fed moves coincided with a spike in oil prices - which fuelled inflation fears - and a rapid fall in the greenback. Last week, for instance, the greenback fell to 110.79 yen, its lowest level against the Japanese currency since June last year.

For Asian markets, this is stirring fears of an unwinding of the yen carry trade - where traders and speculators have taken out massive loans in yen because of Japan's low interest rates to buy higher-yielding assets such as shares in emerging stock markets.

So after a bountiful autumn, during which strong performances by the STI and the Hang Seng attracted fickle foreign capital by the billions, a winter of discontent may be about to descend upon Asian stock markets.

Until the Western banks sort out the sub-prime mess in the US and re-capitalise their balance sheets, investors must be prepared for more wild swings in share prices.

S'pore Still Top HQ Choice But China Closing In: Report

Source : The Business Times, November 12, 2007

Republic scores on economic policies, infrastructure and political stability

MULTINATIONAL companies (MNCs) in the Asia-Pacific still see Singapore as the best place to base their regional headquarters but China is catching up fast, according to a survey.

The findings by Spire Research & Consulting show that manufacturing companies based in Asia-Pacific still consider Singapore the best location from which to manage their regional operations - for now.

But more companies are beginning to favour mainland China and Hong Kong, especially those with dual regional HQs, the report said.

'Singapore will need to evolve new strategies to retain regional HQs in the face of fierce competition,' said Spire's group managing director, Leon Perera, in a statement.

Spire said that it surveyed more than 100 global companies located in the Asia-Pacific region. Of the 105 respondents, some 60 per cent said that they operate in at least three Asian countries and nearly a third operate in seven or more.

Fifty-seven ranked Singapore as among their top location choices for a regional HQ, mainly because of its economic policies, infrastructure and political stability. The information technology and lifestyle and leisure sectors were the main industries that ranked Singapore as the best location.

Mainland China came a close second with 56 votes. This was unsurprising, as 'China is a mecca for international manufacturing companies, who account for roughly half of China's manufactured exports', said Spire.

Many MNCs increasingly want to locate their regional HQs in China because of the overwhelming importance of the Chinese domestic market, it added. While some companies have China HQs that serve the greater China market only, others such as General Motors and Fuji-Xerox have China HQs that manage their entire Asian operations, it said.

In the future, 'many international companies may be tempted to locate a South Asia headquarters in Singapore, with Malaysia providing keen competition, and a North Asia headquarters in Hong Kong, Shanghai or Beijing,' it said.

The companies surveyed rated economic policies, domestic market size and infrastructure as their top three criteria in deciding how attractive a place is as a location for a regional HQ.

S'pore Way To Fight Rising Cost Of Living Works: PM

Source : The Straits Times, Nov 12, 2007

THE cost of living is rising, and the Government is helping Singaporeans cope with it, Prime Minister Lee Hsien Loong said yesterday.

While many people elsewhere would look to their governments to keep prices low, Singapore's approach is different, and Mr Lee believes it is one that works.

Its aim is to get the basics right - housing, jobs and affordable necessities.

'We help, we do a lot, but we don't help by keeping the prices individually controlled,' he said at a dialogue at the People's Action Party (PAP) annual convention. 'We help by making sure that the low income are able to pay for their necessities, able to earn a living, able to have a roof over their heads.'

While Singapore has gone through years with a stable cost of living and very low inflation, he acknowledged it might be tough to maintain such stability going forward.

Prices of flour, food, energy and even chicken are going up, and people are understandably worried, he said.

Following a jump in flour prices, bread prices here went up by up to 20 per cent, and noodles increased by 20 cents to 30 cents per kilogramme.

While there are calls on the Government to control prices, he said, Singapore will not head the way of countries such as Malaysia, China and India by keeping fuel and electricity prices down.

Instead, the Government helps the people with subsidies in education and HDB flats, through the Workfare Income Supplement scheme and periodic CPF top-ups when there are Budget surpluses.

'So, with the house, the HDB flat which we help you to buy... nearly everybody has a home, which is a big relief. So when rentals go up, you are not affected because you have your house, and you have something for your old age to retire by,' he said in response to concerns raised by a cadre on the rising cost of living.

There is also Workfare, he added, which sees the Government topping up the wages of low-income workers.

For example, those who earn $1,000 a month would get $1,000 plus of 'hongbao' from the Government a year in cash, CPF and Medisave, and this goes on continually.

But while these policies are important and helpful to the people, he believed the Government can do a better job in explaining them to Singaporeans.

He said that while the fine print of policies can be complicated, the principle behind them is not.

'The principle is to help yourself - you work, the Government will help you. But you must make the effort, and that is how Singapore will succeed. That is how you will succeed,' he said.

'And I think that is an approach that has worked for the economy, for the country, and we must keep that.'

Mr Lee was on a nine-member panel in the 90-minute dialogue at the meeting for cadres to speak on issues and challenges the party has to tackle.

Flanked by PAP chairman Lim Boon Heng, five MPs and a pair of activists, the PM tackled concerns that centred on the convention's catchy theme, 'Young and old, high and low', which refers to Singapore's ageing society and the growing income gap.

Mr Lee noted that Singapore's approach to battle the wealth divide has attracted the attention of other countries.

Referring to his recent interview with Chosun Ilbo, he said the South Korean top daily printed almost everything he said and displayed it over two pages.

Major newspapers and magazines in the West such as the Economist have also written about Singapore's changes, he said.

Urging the party to continue to serve Singaporeans so that it can win their support, he said: 'You are wearing white because it is a symbol that you care...and you are not just sitting there and letting somebody else take charge of the train.'

S'pore Won't Fight Inflation With Price Controls: PM Lee

Source : The Business Times November 12, 2007

Rising cost of living for lower-income, elderly to be met in other ways

The government is unlikely to impose controls on food or utility prices in response to rising inflation, but will continue to use other ways to help Singaporeans cope with the cost of living, said Prime Minister Lee Hsien Loong yesterday.

Although many other countries control oil prices, electricity prices and even bus fares to help poor people, 'our approach in Singapore is different', he said.

'We help - we do a lot - but we don't help by keeping the prices individually controlled. We help by making sure that the low-income are able to pay for their necessities, able to earn a living, able to have a house over their heads.

'We help you through Workfare, so if you work, you get more. And then we have packages like the Progress Package.

'This is the way we help Singaporeans and low-income Singaporeans to cope with the cost of living.'

He made the remarks at the People's Action Party (PAP) annual convention at the National University of Singapore's University Cultural Centre yesterday.

More than one party member had asked how the PAP-controlled government could help lower income Singaporeans cope with rising price inflation.

The difficulties faced by lower-income Singaporeans and the elderly were also raised by several Members of Parliament who spoke during the three-hour convention.

Mr Lee said: 'We've had a period now where the cost of living actually has been very stable. Inflation has been very low, bus fares have not gone up very much, food prices have not gone up very much, housing prices have been stable.

'Going forward, we're not sure that we can keep the cost of living as stable and as low as it has been. Oil prices are high and may rise further. Food prices have gone up.

'And bus fares will have to adjust when energy prices go up. Electricity prices have to go up. So I think this is something which people are going to be worried about.'

Although some expect the government to step in to keep prices low through controls, he said that it would be unwise to do so.

'If you look at bus fares in many countries, these are controlled so the bus companies lose money, the government just coughs up. Electricity prices similarly in many countries are controlled. And that is one way those governments try to help the poor people.'

'We do care,' he said. 'The principle is, you help yourself, you work, the government will help you. But you must make the effort. And that is how Singapore will succeed, that's how you will succeed. And I think that's an approach that's worked for the economy, for the country, and we must keep that.'

Orchard Road To Get $40m Makeover But No News How Access Will Be Improved

Source : Channel NewsAsia, 11 November 2007

Orchard Road is getting a $40m facelift next year to add more vibrancy to Singapore's main shopping area.

Channel NewsAsia's Margaret Perry explores what more can be done to make the area easier to get around.

Shopping along Orchard Road was always a breeze for her until she became a mother.

Then she discovered how challenging it can be to get around in some parts of the area, especially with a stroller in tow.

One of the particular "trouble spots" is at the junction of Orchard Road and Scotts Road.

Isetan Scotts is just opposite Tangs, but getting there isn't easy for someone pushing a pram.

The shortest way is to use the underpass.

But once off the escalator, the goodwill of others makes a big difference.

There is also the overhead bridge between Royal Plaza on Scotts and Far East Plaza, and using it takes quite an effort for those with a trolley.

In fact, the only way to cross Scotts Road without encountering any steps is to walk past the American Club, up to Draycott Drive.

Three pedestrian crossings later and one will arrive at the Goodwood Park Hotel, and then it is a straight run to Tangs. The detour takes more than five minutes.

For other parts of Orchard Road, getting into Wisma Atria, for example, is also an uphill task.

"I don't feel easy, because (of) this one, I need to carry up," said a woman carrying a pram.

"It's not very convenient....but they are improving.....because MRT now has a lift," said an old woman.

Some stretches of Orchard Road are much easier to get around.

For example, between Orchard Parade Hotel and the Shaw House, there are four pedestrian crossings.

Between The Paragon and Dhoby Ghaut MRT station, there are seven such crossings.

Shoppers say that having more crossings is not the only solution.

"I guess they could build more lifts, but then again you always have the hazard of them always breaking down. The escalators already have that problem," said an Indian woman.

"Pedestrian crossings would be good but underpasses are great too, just as long as there're not too many stairs because it's so hard to get a child around," said another woman.

With Singapore's ageing population, such a wish-list becomes quite a necessity.

Orchard Road can then be truly accessible to all. - CNA/ir

S'pore Will Continue To Grow Even If Recession Hits : MM Lee

Source : Channel NewsAsia, 11 November 2007

Minister Mentor Lee Kuan Yew said Singapore would continue to grow even if the world economy slows down in the coming years.

Speaking at a community event at Tanjong Pagar GRC on Sunday, he said there are enough foreign investments in Singapore, such as the two upcoming integrated resorts and next year's Formula One race, to make sure that Singaporeans have jobs.

For many Singaporeans, older generation leaders like MM Lee have laid a strong foundation for the country.

But Mr Lee said it may not be all plain sailing ahead for Singapore in the years to come.

Related Video Link -
S'pore will continue to grow even if recession hits: MM Lee

He said: "There's a real possibility that next year or a year down, the road prices will go out of control. America goes into recession and stops buying so much. China stops exporting so much. India stops exporting, and we will also stop exporting.

"Don't just believe everything will go up. Those who have lived long enough know that this is not true. So please remember to diversify your assets."

That is why, Mr Lee said, the government has a careful spread of investments across several items like real estate, bonds and shares, to adapt to how the market shifts from time to time.

He is also confident that Singapore is able to weather a global economic slowdown with several recent million-dollar foreign investments already in the bag.

Mr Lee said: "The construction work that goes on with these investments, the two integrated resorts, the Formula One and the hotels, you will not starve."

He said that the current economic boom in Singapore did not happen by chance.

It was achieved through careful planning and he promised that the government will continue to improve the assets of Singaporeans by improving public housing and the environment around it.

This includes the upgrading of older estates like Queenstown, which has a new feature called the Alexandra Canal Linear Park.

Mr Lee believes such enhancements will increase property prices of public housing and improve the value of assets owned by 85 percent of Singaporeans.

The minister mentor also launched a heritage book documenting the history of Queenstown. - CNA/so

Will Life Policy Assigned To Wife Still Incur Estate Duty?

Source : The Sunday Times, Nov 11, 2007

Q WHEN I reached 55, I withdrew $200,000 from my Central Provident Fund (CPF) Ordinary Account and bought an NTUC Income single-premium policy for $250,000 with a sum assured at $301,055.

Under this policy, if death or total disability occurs before the age of 60, as a direct result of bodily injury caused by violent, accidental, external and visible means, the insurer will pay a sum equal to two times the sum assured plus any bonus accrued.

I have nominated my wife, a full- time housewife, as the sole beneficiary.

As I intend to bequeath it to her as a gift, I am thinking of making an assignment, though I have nominated her as a beneficiary, for the purpose of estate duty planning. My questions are:

1) Is it true that once a policy has been formally assigned, the assured surrenders the interests and rights to the assignee, and the policy does not form part of the assets of the insured listed under the assets category and thus does not attract any estate duty?

2) For a policy with a named nominee and in the event of a claim, will the sum assured plus bonus be treated as an integral part of the assets of the insured and be subject to estate duty, if the amount exceeds the threshold of $600,000?

Is my decision to assign the policy to my wife as a gift to her a wise move?

A ALTHOUGH a policy that has been assigned does not form part of the estate, it will revert to the deceased’s estate for estate duty purposes if the death occurs within five years of the date of assignment as a gift.

You are correct in saying that, for an NTUC Income policy with a named nominee, the proceeds will form part of your estate and be subject to estate duty if the $600,000 CPF plus other assets exemption (excluding the $9 million exemption for residential property) has been utilised. The balance in the CPF account has unlimited exemption.

For estate duty planning purposes, you could have arranged for the policy to be for the benefit of your wife at the point of inception, under Section 73 of the Conveyancing and Law of Property Act. This would have provided separate duty assessment, and as the sum is likely to be less than $600,000, there might have been no estate duty payable.

Alternatively, you could have given the $250,000 as a gift to your wife to buy the policy on your life, with her as the applicant and owner. In so doing, you would have frozen the amount subject to estate duty in the event of your death within five years, to just $250,000.

In contrast, in a policy assignment, in the event of death within five years, estate duty would be levied on the value of the policy at the time of death.

For example, if the policy value is $400,000, the estate dutiable amount would be $150,000 more than the original $250,000 single premium.

You are also correct in saying that the policy assignment means you will relinquish all your rights and interests. Even in the event of a permanent total disability claim before age 60, the policy payout will be for the benefit of your wife.

For estates of less than $12 million, the estate duty payable, after the applicable exemptions, is at a rate of 5 per cent.

Leong Sze Hian President Society of Financial Service Professionals

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Casa Fortuna @ Balestier

Address : 36 Jalan Rajah & 38 Ah Hood Rd (Singapore 329980)
District : 12
Tenure : Estate in Fee Simple (Freehold)
Developer : Springlife Land Pte Ltd
Site Area : Approx. 2585 sqm / 27,824 sq ft
Development : Beautiful Facade with State of The Art Twin Iconic Towers
(Tower 1 - 18 Storeys & Tower 2 - 12 Storeys)
Expected T.O.P : 30 June 2012
Plot Ratio : 2.8
Total Units : 106

Type of Units :-
-1 Bedroom
-1+1 Bedroom
-2 Bedrooms

Ceiling Height :-
Typical – 2.95 m
2nd Floor & Penthouses – Minimum 4.5m

Price : From $500k Onwards

Walking Distance To MRT and 3 Stops or 10 mins Drive to Orchard

Facilities :-
2nd Storey Sky Terrace:
-Partial Cover Infinity Lap Pool ( 25 m X 5 m )
-Wadding Pool ( 5 m X 3 m )
-Pool Deck
-Children's Play Area
-BBQ Area
-Carpark (Basement -65 Lots & Surface – 41 Lots ; Include 12 Mechanical Lots)
-24 Hours Security
-High End Technology Using Biomatrix Keyless Entry(Thumbprint)
-1 & 2 Bedrooms Penthouse (Type B1 & C1) with Private Pool & Jacuzzi

Consider Shop Units For Rental Yields

Source : The Sunday Times, Nov 11, 2007

Prime units offer yields of 3.5%-5% but they don't come cheap, especially in Raffles Place, Orchard Road

SMALL INVESTORS OR RETAIL OPERATORS looking for strata-titled shops in the Orchard Road belt can check out Far East Plaza (above). Some owners of prime units there want more than $10,000 psf, but units on other floors can be had for $4,250 psf. -- BH FILE PHOTO

SHOPPING, already a national pastime, is becoming even more popular, if rising retail rents and capital values are anything to go by.

Not only are the rents and values in the traditional shopping belt of Orchard Road on the up and up, but those in the business district of Raffles Place have also risen considerably.

This is good news if you are a landlord. For those aspiring to become one, shop units are an option if you have at least $500,000 lying idle in the bank.

Property consultants say retail rents in Singapore are on the rise, with double-digit growth expected for prime shop units in Orchard Road and Raffles Place.

A recent study by property consultancy Cushman & Wakefield showed that the capital values of shops in Raffles Place have risen by 23 per cent in the past two years.

Shops at The Arcade, a 77-year leasehold property in Raffles Place, were sold recently at about $1.5 million to $2.65 million, which works out to between $4,900 per sq ft (psf) and $5,300 psf.

And prices are still climbing, with asking levels now hovering at between $6,000 psf and $7,000 psf, depending on the size of the shop and its location within the building, said Mr Donald Han, the managing director of Cushman & Wakefield in Singapore.

However, before you rush out to buy one as an investment, you should know that there are very few retail units available for sale to individuals.

And those in popular malls do not come cheap.

Commercial properties are typically traded on an en bloc basis to institutional or investment companies. In any case, most are beyond the financial reach of individual or smaller investors.

'Less than 5 per cent of the commercial stock here are strata-titled,' said Mr Han. A strata title gives you ownership of a small piece of a bigger property. As a result, many small companies or retail operators tend to buy strata-titled shops for their own use instead of renting one.

Strata-titled retail properties can be found in buildings such as The Arcade, International Plaza right next to the Tanjong Pagar MRT station, and Tanglin Shopping Centre in Tanglin.

In the Orchard Road area, strata-titled retail properties include Far East Plaza, Lucky Plaza, Orchard Plaza and Orchard Shopping Centre.

Shop units typically range in size from just 200 sq ft to as much as 1,000 sq ft, with values starting from $500,000, said Mr Han.

Net yields can range from 3.5 per cent to as much as 5 per cent a year, depending on the property's tenure, location, age, tenant mix, whether it is facing the road or the main concourse and so on, he said.

Some buyers might be able to buy a strata-titled unit with an existing tenancy. But shop units with a low rental rate and a long tenancy term might not fetch market prices. In contrast, a unit that is for sale with vacant possession might be able to achieve premium pricing.

Mr Han said vacant units attract both owner-occupiers as well as investors who wish to lease out the space at competitive rates, particularly in a rising market. At Far East Plaza, asking prices have increased significantly, in line with rising rents, said an agent familiar with the sale transactions there.

The highest-priced deal to date was done recently at slightly over $11,000 psf for a 269 sq ft shop, which works out to about $2.96 million. An investor bought the shop and is leasing it out to a shoe retailing business, the agent said.

Current asking prices for shops at Far East Plaza start from as low as $4,250 psf for a fifth-floor unit, which works out to around $850,000.

But a few owners of prime units there are asking for more than $10,000 psf; last year, such units could be had for $7,000 psf to $8,000 psf, the agent added.

Tips on buying a shop

# Get a reputable agent to search for the right property in the right location. Retail units are scarce and hard to come by, and not all agents have stock.

# Get a bank's valuation first and secure financing.

# Check with the management corporation to see:

1) If the seller still owes the corporation any maintenance fees; and

2) If there are upgrading plans as the new owner might have to bear the costs.

# Verify what uses the premises can be put to. For instance, for food and beverage outlets or restaurants, you need to get approval from the relevant authorities. Know what you're buying.

# If the unit is tenanted, get the tenancy agreement, and check that deposits are in place and tenancy terms protecting the landlord's interests are watertight.

# Try to negotiate for a few units within the development, so that you can get a better feel for the price and perhaps work out a better deal.

# Get an experienced lawyer to advise you on specific issues. For example, you will have to pay 7 per cent in good and services tax (GST) if you buy from a GST-registered vendor. One way you can offset this is by incorporating your own GST-registered company.

# Get an estimate of the fit-out costs. If the unit requires renovation, make sure the purchase price and renovation budget combined are within your limits.

Copyright : Cushman & Wakefield