Friday, November 16, 2007

PM Lee Says '08 Growth To Slow: CNBC

Source : The Business Times, November 16, 2007

Singapore's prime minister expects economic growth to slow next year and predicts inflation will run at 4-5 per cent 'for some time' in 2008, CNBC television quoted him as saying in remarks released on Friday.

'I don't expect that we will go into a recession, but it won't be like this year,' Prime Minister Lee Hsien Loong said, according to an extract from an interview with CNBC to be broadcast on Saturday.

Singapore will release final third-quarter GDP data on Monday and a Reuters poll of economists predicts the economy grew at an annualised rate of 6.4 per cent in the quarter, matching an official advance estimate, as booming construction and services offset manufacturing weakness.

Mr Lee reiterated the government's forecast for the economy to expand at the high end of a 7-8 per cent range this year compared with 7.9 per cent in 2006.

The government's growth forecast for next year is 4-6 per cent and Mr Lee said he expected an update on the official forecast within days.

Mr Lee, who is also Singapore's finance minister, said he was watching inflation carefully, adding that the effect of higher prices for oil, food and the impact from a rise in sales tax on July 1 would become visible in the consumer price index in the coming quarters.

'I expect that the property prices will also show up in the CPI ... and therefore I think next year the CPI will be 4-5 per cent for some time.' -- REUTERS

Hougang Flats To Be Cleared

Source : TODAY, Friday, November 16, 2007

AS part of ongoing plans to revitalise older estates and make better use of land, nine blocks of properties which are about 33 years old in Hougang have been marked for clearance.

The affected properties — at Blocks 3, 4, 8 to 11, 11A to 14 in Hougang Neighbourhood 3 — include one and three-room rental flats, terrace workshops, rental shops, eating houses and a market/hawker centre. Part of the neighbourhood will be up for sale for private housing development in the second half of 2009 while the remaining site will be developed for residential/commercial use after 2010.

Those affected by the plan will receive standard clearance benefits and the necessary assistance, the Housing and Development Board (HDB) said yesterday. Affected tenants of rental flats who are eligible will receive assistance such as priority allocation of new flats and a $1,000 removal allowance. First-timers who opt to buy flats directly from HDB will be given a tenancy discount of 3 per cent off the purchase price for each year they have lived in the rented flat.

Tenants of commercial properties will receive ex gratia payment of $60,000 per tenancy, while those of market produce and cooked-food stalls will receive $18,000 and $23,000 respectively. Industrial property tenants will receive $48,000 and an offer of alternative premises.

Lower Bids For Enggor St Condo Site Could Signal Cooling Market

Source : The Straits Times, Nov 16, 2007

Top offer a far cry from that for neighbouring parcel sold two weeks ago

A CONDOMINIUM site in Tanjong Pagar raised eyebrows yesterday when it drew lower bids than a neighbouring plot, which was sold just two weeks ago.
In a market that has been booming, this is the latest in a series of lukewarm responses to government land sales. Experts say it is further evidence that sentiment in the property market may be fast cooling.

The condo plot, along Enggor Street in Tanjong Pagar, fetched a top bid of $180.8 million when its tender closed yesterday. Allgreen Properties put in the highest offer, pipping bids by Far East Organization and GuocoLand.

Its price works out to $717 per sq ft per plot ratio (psf ppr) - well below the $852 psf ppr achieved by the plot just next to it, which drew only two offers when the tender closed. That prompted market watchers to warn that the mood might have changed. Even then, the high bid, from Far East, was some $70 million above yesterday's top offer.

The two land parcels, which are located behind the Icon condominium and a stone's throw from the Tanjong Pagar MRT Station, are of similar size.
The situation mirrors that in Marina View. Two months ago, a site there fetched a record $2 billion bid - but a neighbouring plot managed only half that price when its tender closed on Tuesday.

Earlier this month, an office site in Tampines drew only one bid, at a lower price than most consultants had expected.

These tepid sales come after the Government last month unexpectedly removed the deferred payment scheme for homebuyers in what was seen as a bid to curb speculation. Homebuyers can no longer postpone the bulk of their payments and must now pay progressively.

Although the Government has since come out to say that it has no further plans to cool the property market, the once-powerful winds appear to have shifted.

Yesterday's tender is a reflection that 'developers are turning cautious', said Mr Ku Swee Yong, the director of marketing and business development at Savills Singapore.

He offered several reasons for the lower bids. For one thing, construction costs are surging, but home prices are not rising as quickly, he said. This means developers have to find a way to lower their land costs.

Luxury homes used to cost $300 psf to $350 psf to build, but this has now gone up to about $600 psf because of a construction squeeze, he explained.

At the same time, there are plenty of freehold collective sale sites still on the market that have not found takers. Faced with many options for land, developers might be less attracted to 99-year leasehold sites from the Government, suggested Mr Ku.

In any case, the Enggor Street plot was 'not exactly a choice site', he said, adding that it has 'small floor plates, its views are blocked and it is very close to the next building'.

Partly because of this, the top bid for the site, while lower than that for the plot next door, is 'reasonable', he said.

With the developer's breakeven cost estimated at around $1,200 psf or $1,300 psf, finished homes could sell for at least $1,700 psf. Mr Li Hiaw Ho, the executive director of CB Richard Ellis Research, said current prices at nearby projects such as Icon, Lumiere and The Clift are between $1,600 psf and $2,100 psf.

Despite the lower prices being paid for state land now, consultants think this will not translate into cheaper homes, thanks to rising construction costs and still-strong demand from homebuyers.

But Mr Nicholas Mak, the director of research and consultancy at Knight Frank, warned that if the Government continues to release more land, it might result in a supply glut that could cause prices to plunge.

'We are standing at the threshold of a glut, but it is still preventable,' he said, adding that the low bids in recent state tenders will not affect existing projects, but will affect future land tenders.

'If the Government pushes out more land parcels, and bids continue to slide downwards, some of the earlier buyers of state land are going to find it very challenging to sell their developed properties at a profitable rate.'

All eyes will now be on the government land sales programme for next year, which is due out next month. If the Government places many sites on the confirmed list, to be sold at a fixed date regardless of interest, this could lead to opportunistic bidding by developers and push down prices, consultants said.

Apart from the Enggor Street tender, Mr Mak said that the latest home sales data released by the Urban Redevelopment Authority yesterday also points to weaker sentiment.

Homebuyers remained cautious last month, taking up only slightly more new homes than in September. They bought 590 new homes, up from 529 previously, but still a far cry from the 1,720 snapped up in August.

But while sales levels stayed low, home prices kept steady, even inching up for many projects. Homes sold last month were also pricier, with 63 units sold at between $3,500 psf and $4,500 psf, up from 28 in September.

Cheaper condos did even better, said Mr Mak. In fact, the number of units sold in the core central region fell by 53 per cent last month from September, while the number of mid-tier units sold doubled.


The Enggor Street situation mirrors that in Marina View. Two months ago, a land parcel there fetched a record $2 billion bid - but a neighbouring plot managed only half that price when its tender closed on Tuesday.

After Rich Patriarch Dies... Sons Fight Over 'Mansion' He Built For Them

Source : The Electric New Paper, November 16, 2007

HIS was a classic rags-to-riches story.

A poor immigrant from China, Mr Ong Chay Tong became a successful businessman through his entrepreneurship and hard work.

As chairman of mainboard-listed Hwa Hong, the late Mr Ong managed a group which included insurance, engineering, property development, manufacturing and trading companies.

He had two wives, who bore him six sons. And Mr Ong built an apartment block on Nallur Road, so that his sons could live there.

It was called Ong Mansion and, in 1979, each of Mr Ong's sons paid $100,000 for a unit there.

A company, Ong Chay Tong & Sons, was set up to own the land and all six sons were directors.

Under a resolution, they were barred from selling their units to anyone except to this company.

And if they sold it to the company at any time, they would only get the $100,000 back.

After Mr Ong's death in 1993, the sons began fighting over his assets.


In 2003, they went to court over their shares in Hwa Hong. That was settled out of court, but earlier this year, they met in court again.

The legal battle pitted the sons of Mr Ong's first wife - Choo Eng, Kay Eng, Hian Eng, Kwee Eng and Mui Eng - against their half-brother, Hoo Eng.

The company controlled by the first wife's sons claimed a stake in Hoo Eng's apartment.

It turned out that in 1998, Choo Eng had called for a directors' meeting at Ong Chay Tong & Sons to pass a second resolution.

This resolution allowed him and his brothers to transfer their flats to their male-line descendants.

Hoo Eng did not participate in that meeting. He and his mother, MadamChang Yueh Nu, who also had shares in Ong Chay Tong & Sons, did not get along with the other sons even when Mr Ong was alive.

And in June last year, Hoo Eng and his mother sold their shares in this company to his half-brothers. He also resigned as a director of Ong Chay Tong & Sons. However, he continued to own the apartment.

In August last year, Ong Chay Tong & Sons passed a third resolution to overturn the 1998 resolution. The company then claimed an interest in Hoo Eng's flat, and lodged a caveat against the property, saying it could be sold only to Ong Chay Tong & Sons.


Hoo Eng asserted that the company had no right to impose the caveat.

This caused a dilemma for the Registrar of Titles, as it had to be decided if the caveat should remain on the land register.

The Registrar decided that the parties should let the High Court resolve the dispute, and Ong Chay Tong & Sons asked the court to order that the caveat be allowed to stay.

Last month, Justice Kan Ting Chiu dismissed the company's claim.

In his written judgment, Justice Kan described the company's third resolution as 'mischievous and misleading', as it was passed on the same day the caveat was lodged.

By passing the 1998 resolution, the company had already ceded its rights to be the first purchaser of the flats in Ong Mansion. The third resolution could not revive this right.

Justice Kan wrote: 'This action is on its face, a dispute over whether a caveat should remain on the land register. The real cause of the dispute was disharmony between the children of the two wives of a patriarch.'

Hoo Eng's lawyer, Mr Albert Teo, declined comment as Ong Chay Tong & Sons still has two weeks to appeal.

Their lawyer said his client has not decided whether to appeal or not.

Hoo Eng and his brothers are still shareholders of Hwa Hong, with Choo Eng as its managing director.

Horizon Towers Hearing - Majority Owners Fault Sales Committee

Source : The Business Times, November 16, 2007

It should have reverted to them before closing deal at just reserve price

MORE displeasure was expressed at the Strata Titles Board (STB) hearing into the Horizon Towers sale yesterday - this time, not from the minority owners who opposed an en bloc sale but the majority owners who agreed to it.

They found fault with the sales committee's efforts, particularly, its failure to consult owners about going ahead with an offer from Hotel Properties Ltd (HPL) and its partners, which just met the reserve price of $500 million, set months before property prices started surging.

Majority owner Poonam Harilela, whose family owns several units in the development, said that they agreed to the en bloc sale in April 2006 because they were told by the sales committee they would get an 80 per cent premium if they sold their units collectively rather than individually.

But by January 2007 - around the time the sales committee signed the deal with HPL and its partners - that premium had dwindled significantly.

Ms Harilela said that her father's unit attracted an offer of more than $2 million in December 2006 - close to what it would get in a collective deal - so it did not make sense to sell it en bloc.

She conceded that the quantum of the premium was not guaranteed by the sales committee.

'But the reason we went for the en bloc was the premium, because it could better our lives,' she said.

'The main reason why we wanted to sell was to upgrade our lives, not to downgrade and have nowhere to live.

'We're not talking about the stock market, we're talking about a home. And at that point in January 2007, the prices were so high we couldn't get a replacement unit. And that's the point,' said Ms Harilela, who has lived in Horizon Towers for 17 years.

She acknowledged that the collective sale agreement signed by the consenting owners was legal and binding and gave authority to the sales committee to sell the development as long as the reserve price of $500 million was met.

She said that this was why she approached sales committee chairman Arjun Samtani - before the deal was sealed - to ask if the committee could reconsider selling the development en bloc.

A second witness yesterday, Mohinder Kalra Singh, testified in his affidavit that the sales committee failed to go back to the consenting owners to ask them whether they wanted to proceed with the HPL offer.

The hearing before STB was concluded yesterday.

The various parties have until Nov 23 to make their closing submissions to the tribunal and until Nov 30 to make their replies.

The STB tribunal will then deliberate and announce its decision by Dec 7 - just before the sale completion deadline of Dec 11.

If the tribunal approves the sale and grants Horizon Towers a collective sale order, the minorities still have the right to appeal against that decision.

If the STB decides not to grant an order and the sale falls through, HPL may go ahead with the lawsuit it has filed against the majority owners for breach of the sale and purchase agreement.

Property Market Picks Up In Non-Prime Areas: URA Report

Source : Channel NewsAsia, 15 November 2007

Sentiment in the property market in October continued to be weighed down by concerns over the US housing credit crunch.

According to the latest report from the Urban Redevelopment Authority (URA), more homes were launched and sold in October than in September.

But there was a drastic drop of more than 50 percent in the number of units sold in the core central region.

About 629 new homes were launched in October – about 10 percent more than in the previous month.

The number of new homes sold also increased by about the same margin, with some 590 units changing hands.

However, most of these units were outside the core central region.

Only 135 homes within the core central region were sold - about half the number from the previous month.

Dr Chua Yang Liang, Head of Research & Consultancy, Jones Lang LaSalle, said: "It could be attributed to the sub-prime effect. At the same time because prices there are significant right now, compared to the other regions, there is a filter-out effect into the other non-prime areas."

In the mid market, 196 units were sold - more than double the previous month.

And units sold in the mass market went up by 72 percent at 259.

Property consultants said the current rise in prices seems to be at a healthy level.

Nicholas Mak, Director of Consultancy and Research, Knight Frank, said: "The median prices have increased by about 3.3 percent month on month, which is still quite an impressive growth and it can also be pointing towards a more sustainable rate of growth."

For the whole year, property consultants CBRE expect sales volume to hit 15,000 to 16,000 units.

This will be a sharp jump from the number of homes sold in 2006.

Some analysts said home prices are likely to increase by another 3 to 6 percent in the final quarter to achieve 27 to 30 percent for the whole year.

It is also expected that the withdrawal of the deferred payment scheme will probably have an effect on the property market in November and December. - CNA/so

Malaysia Says Singapore Merely A Lighthouse Operator On Disputed Island

Source : Channel NewsAsia, 16 November 2007

THE HAGUE, Netherlands : Malaysia said on Thursday Singapore's activities on a disputed island were merely those to be expected of a lighthouse operator and administrator.

Malaysian Ambasador-at-Large Abdul Kadir Mohamad (R) and Malaysian Ambassador to the Netherlands Noor Farida Ariffin.

This was the main thrust of arguments put forward by the Malaysian team on the third day of its presentations at the International Court of Justice at The Hague.

Singapore had said that it carried out all activities that are consistent with that of being the owner of Pedra Branca, which Malaysia calls Pulau Batu Puteh.

Operating and administering the Horsburgh Lighthouse on Pulau Batu Puteh does not mean sovereignty over the island, the Malaysian team argued.

Malaysia insisted that all activities, such as Singapore granting permission for official visits or patrolling the waters around the island, are consistent and expected of one who is operating the lighthouse.

Related Video Link -
Singapore merely a lighthouse operator on disputed island: Malaysia

Mr James Crawford, Foreign Counsel for Malaysia, said: "Singapore is the administrator of Horsburgh Lighthouse and nothing more. Britain's and Singapore's activities in respect of the lighthouse do not amount to conduct a titre de souverain (acts consistent with sovereignty).

"Singapore's claim that its conduct on the island went completely unopposed by Malaysia is not to the point. There was no open conduct a titre de souverain to be opposed.

"Singapore's conduct was at all times consistent with that of a lighthouse administrator littoral state of the Singapore Straits.

As to the former capacity, Johor consented to the establishment and operation of the lighthouse. As to the latter, the activity was not referable to the lighthouse, as such, at all. In neither capacity was there anything for Malaysia to protest."

But Singapore said it had done many activities and constructed many other structures, besides the lighthouse on Pedra Branca, because she knew she owned the island.

Non-lighthouse related activities include having reclamation plans for the island and installing military communications equipment.

Singapore argued that she would never have done all these if the island belonged to someone else.

In its argument, Malaysia also cited the 1953 letter which the Johor government sent to Singapore.

In that letter, the Johor government had said it did not own Pedra Branca.

Malaysia's counsel said before that 1953 letter, only two possibilities exist - whether Singapore had ownership over the disputed island or not.

If Singapore did have sovereignty over the island, the letter would not be relevant to the question of ownership.

But if it did not, then Malaysia said Singapore is treating the letter as its root of title.

Sir Elihu Lauterpacht, Foreign Counsel for Malaysia, said: "As to this last possibility which verges on the absurd, the Court only needs to be reminded that a cession of territory, which on this analysis is how this letter must effectively be viewed, can hardly be achieved by a letter written by even an Acting Secretary of a Government in reply to a question posed by a junior official of another Government, albeit on behalf of the Colonial Secretary, Singapore."

But Singapore argued that it lost its archives in the war and needed Malaysia to confirm that Malaysia did not own the island.

And Singapore's Deputy Prime Minister S. Jayakumar had questioned what could be clearer than the 10 words in that letter from Johor to Singapore that read: "The Johor government does not claim ownership of Pedra Branca."

On Thursday, Sir Lauterpacht reiterated Malaysia's claim that the British had no intention to acquire sovereignty of the disputed island.

He said: "There is no evidence of intention to acquire sovereignty. There is no evidence of a permanent intention to do so. It follows that there is no evidence of any overt action to implement the quite clearly non-existent intention. Finally, it follows also that there is no evidence that Britain made its non-existent intention manifest to other States."

Sir Lauterpacht asked: "Why did the Crown never say it was annexing the Island, notwithstanding the many occasions in which it could have reasonably done so? The answer is simple. It never contemplated such an acquisition."

But Singapore's counter to that - it had exercised sovereignty over the island from the time the British constructed the Horsburgh Lighthouse in the 1800s to now.

Singapore has been executing all kinds of activities on the island consistently and openly without anyone's permission because it owned it.

Another point Malaysia brought up - that Pedra Branca and its two outcrops of Middle Rocks and South Ledge should be seen as individual features.

Malaysia said Singapore should claim ownership over these three features separately and not as a whole.

But Singapore argued that the three should be seen as one because maps and navigational charts have treated Pedra Branca and Middle Rocks as a group, while South Ledge lies within Singapore's territorial waters.

Malaysia has one more day on Friday to present its case. - CNA/de

Home Sales Dive In Upmarket Core, Pick Up Elsewhere

Source : The Business Times, November 16, 2007

Bourse turmoil, sub-prime problems cited for foreign investors' caution

The private housing momentum is shifting decisively as sales and launches flag in the Core Central Region (where upmarket homes are located) but appear to be picking up in other areas.

In the so-called Outside Central Region - which includes suburban mass-market housing locales like Jurong, Woodlands and Bukit Batok - developers sold some 259 homes in October. The sales here were more than in both other regions in the Urban Redevelopment Authority's geographical classification, according to Jones Lang LaSalle's analysis and represented a 72 per cent jump over September.

The Rest of Central Region, which includes locations like Amber Road, Rochor, Geylang, Toa Payoh and Bishan, also saw a 123 per cent month-on-month rise in developer sales to 196 homes in October, according to Jones Lang LaSalle's analysis.

In contrast, demand in the Core Central Region was shrinking sharply. Just 135 homes were sold there in October, compared to 290 units in September and 583 in August, when the market was rollicking.

JLL also noted that the number of new homes launched by private developers dropped 55 per cent month-on-month in October for the Core Central Region, but jumped 299 per cent and 30 per cent respectively in the Rest of Central Region and Outside Central Region.

Knight Frank, which made a similar analysis, attributed the lower sales volumes in Core Central Region to the stock market turbulence causing local buyers to be more cautious while the US sub-prime problems and credit crunch have also dented sentiment among foreign investors.

Islandwide, developers launched 629 homes in October, up 10.4 per cent from 570 units in September. The number of homes they sold also increased 11.5 per cent from 529 in September to 590 in October.

JLL pointed out that the average gap between the highest and lowest prices achieved for projects in the Outside Central Region widened to 25.7 per cent in October, from 14.8 per cent in August and 18.7 per cent in September, which JLL suggests reflects more buoyancy in this segment. 'Buyers are more optimistic and confident of this submarket,' Dr Chua said.

'However, this method does not account for the product differentiation or any other physical attributes that may have resulted in this gap. It is to be used only as an indication of buyers' mood or confidence rather than to predict the market,' he added.

Knight Frank's analysis of URA's data showed that, islandwide, the median transacted price increased 3.3 per cent from $960 psf in September to $992 psf in October. 'The increase signifies that the market is on a path of modest and steady growth,' the firm said.

It also noted that the impact of the withdrawal of the deferred payment scheme, which took effect on Oct 26 was yet to be reflected. 'However, in subsequent months, buyers could adopt a more cautionary stance and although a significant drop is not expected, the number of units launched and sold will likely remain close to current levels,' Knight Frank added.

CB Richard Ellis' analysis shows that Park Natura in Bukit Batok chalked up the most primary market sales during October, at 101 units, followed by Aalto at Jalan Kechil (in the Amber Road/Peach Garden vicinity), with 49 units.

Two luxury projects that sold fairly well last month were Hilltops in the Cairnhill area, and Scotts Square, with 24 units and 33 units sold respectively.

Hilltops' median transacted price was $3,711 psf, while that for Scotts Square was $4,005 psf. The developers of The Orchard Residences saw nine units being sold at a median price of $4,476 psf, with the highest price achieved of $5,600 psf setting a new record, as reported by BT earlier.

'In the mid-range, new projects in the east such as Aalto, De Centurion, Suites @ Amber and The Seafront On Meyer achieved median prices ranging from about $1,300 to $1,600 psf. For suburban projects, Park Natura's median transacted price was $1,022 psf,' CBRE said.

URA's data also revealed that the first unit at Far East Organization's Boulevard Vue at Angullia Park was sold in October for $3,900 psf. In the eastern part of Singapore, the first 20 units in the 28-unit Suites @ Amber were sold at between $1,224 psf and $1,440 psf.

CBRE predicts that developers will sell about 1,800-2,000 private homes in Q4 this year, bringing their full-year sales to 15,000-16,000 units - which will still be much higher than the 11,147 new private homes they sold for the whole of 2006.

The official URA private home price index, which has already risen 22.9 per cent in the first nine months of this year from end-2006, is likely to increase another 3 to 6 per cent in the final quarter, to achieve a full-year gain of 27-30 per cent.

Another CBD Condo Site Draws Weaker Bids

Source : The Business Times, November 16, 2007

Observers say developers hoping to pick up bargains and average down costs

Some developers yesterday took advantage of the current dip in sentiment caused by the stockmarket turmoil to go fishing for land on the cheap. A state tender for a 99-year condo site at Enggor Street behind Icon drew a top bid of $717 per square foot per plot ratio (psf ppr) from Allgreen Properties - about 16 per cent lower than the $852 psf ppr that Far East Organization paid for the next-door parcel exactly two weeks ago.

Interestingly, Far East's bid yesterday (it was second-highest tenderer) of $652 psf ppr was 24 per cent lower than its winning bid a fortnight ago. This probably reflected a strategy of attempting to average down its cost, market watchers say.

Yesterday's tender also attracted one other contender, GuocoLand, whose $600 psf ppr bid was 9.1 per cent higher than the price it offered for the next-door plot earlier this month.

Allgreen, controlled by Malaysian tycoon Robert Kuok, is expected to develop a project about 50 storeys high with about 200 units. The ground level must be developed into commercial space.

'Their breakeven cost will be about $1,200 psf. Going by current prices for units at Icon, Lumiere and The Clift of between $1,600 and $2,100 psf, Allgreen stands to enjoy a good profit margin when they launch their project,' according to CB Richard Ellis executive director Li Hiaw Ho.

Market watchers said the lower top bid at yesterday's tender reflected the erosion in sentiment over the past fortnight due to the stockmarket slide following massive writedowns by major American banks due to the US sub-prime crisis.

However, Mr Li reasoned that yesterday's tender drawing three bids - against just two for the earlier plot - showed that developers are confident of the prospects for this site.

Agreeing, Knight Frank managing director Tan Tiong Cheng said: 'Fundamentally, the property market is still sound, so there will be developers taking advantage of the current stock-market turmoil to go fishing. You never know; you may catch something at a reasonable price.'

The averaging down of cost strategy was also very much at play at another Urban Redevelopment Authority (URA) tender earlier this week: that of Marina View Land Parcel B. Macquarie Global Property Advisors' top bid of $779 psf ppr was about 55 per cent of their winning bid in September for the adjacent plot, also slated for a predominantly office use.

But other factors were also at play in the tender that closed on Nov 13, including a minimum hotel component for the site, and office investors turning cautious as the outcome of the sub-prime crisis may have a direct impact on demand for Singapore office space if big international banks are hit.

The government has also expressly stated recently that it will boost the supply of office land in Singapore over the next few years to alleviate the current shortage.

Separately, URA also made available for application yesterday a 99-year condo site next to Tanah Merah MRT Station. The reserve-list site, with a land area of nearly one hectare, can be developed into a condo with about 250 units averaging 1,200 sq ft.

Jones Lang LaSalle's head of research (South-east Asia) Chua Yang Liang notes that at the next-door Casa Merah project, seven units have changed hands in the subsale market since August this year, at an average price of $717 psf. 'Assuming the latest site on offer receives a successful application from a developer this quarter and the new condo on the site is launched say around mid-year 2008, we reckon it could sell for about $850-$950 psf on average.

'Going by this assumption, the plot would fetch land bids of $425 to $470 psf ppr, translating to breakeven cost for a new condo of about $710 to $790 psf.'

Knight Frank director (consultancy and research) Nicholas Mak predicts a lower price, of $288 to $323 psf ppr, on the assumption that the proposed development will be launched in 12 to 18 months at $800-$850 psf.

Reserve-list sites are only launched for tender upon successful application by a developer who undertakes to offer a minimum bid acceptable to the state.

Second Enggor St Site Draws Lower Bids Than Next Door Plot

Source : The Straits Times, Nov 15, 2007

A CONDOMINIUM site in Tanjong Pagar raised eyebrows on Thursday when it drew lower bids than a neighbouring plot, which was sold just two weeks ago.

In a market that has been booming, this is the latest in a series of lukewarm responses to government land sales. Experts say it is further evidence that sentiment in the property market may be fast cooling.

The condo plot, along Enggor Street in Tanjong Pagar, fetched a top bid of $180.8 million when its tender closed on Thursday.

Allgreen Properties put in the high offer, pipping bids by Far East Organization and GuocoLand.

Its price works out to $717 per sq ft per plot ratio (psf ppr) - well below the $852 psf ppr achieved by the plot just next to it.

That site drew only two offers when its tender closed, prompting market watchers to warn that the mood might have changed. Even then, its high bid, from Far East, was some $70 million above Thursday's top offer.

Both land parcels, which are located behind the Icon condo and a stone's throw from the Tanjong Pagar MRT Station, are of similar size.

The situation mirrors that in Marina View. Two months ago, a site there fetched a record $2 billion bid - but its neighbouring plot managed only half that price when its tender closed on Tuesday.

Earlier this month, an office site at Tampines drew only one bid, at a lower price than most consultants had expected.

These tepid sales come after the Government last month unexpectedly removed the deferred payment scheme for homebuyers in what was seen as a bid to curb speculation.

Homebuyers can no longer postpone the bulk of their payments and must now pay progressively.

Read the full report in Friday's edition of The Straits Times.