Thursday, July 31, 2008

女皇镇新一代组屋 明年第三季供申请

Source : 《联合早报》July 31, 2008

建屋发展局为女皇镇杜生(Dawson)组屋区规划的新一代组屋确定将落实,预定明年第三季推出供公众申请,2014年入伙。

李显龙总理在去年国庆群众大会描绘“再创我们的家园”公共住屋愿景时,宣布在第一个组屋新镇女皇镇建造新一代组屋。

SCDA的新一代组屋设计,是传统长形建筑组屋设计的创新。(SCDA照片)

建屋局于是在去年4月商请盛邦国际咨询、WOHA建筑师事务所和SCDA建筑师事务所,在女皇镇镇中心和杜生路设计3个新一代组屋项目。

国家发展部兼教育部高级政务部长傅海燕昨晚在建屋局常年颁奖礼上说,建屋局确定将进行这三个组屋项目,并委任这3家公司为设计顾问。

不过,建屋局将只在清空女皇镇镇中心后,估计2011年才发委任状给盛邦。女皇镇镇中心3座组屋前年底获选展开选择性整体重建计划(SERS),替代组屋在建造中。

受委为设计顾问后,WOHA和SCDA将为组屋项目进行细节设计,如各类型组屋数量,但不会对整体设计做出大改变,基本上跟去年展出时的模型一样。

这两个项目可在明年第三季让公众预购(BTO),工程在2010年第一季展开,预计2014年完成。建屋局将在发售时公布销售详情如组屋面积、售价、数量等。

傅海燕在演讲中说,由于公众热烈支持这三家公司所设计的新一代组屋,政府因此决定展开这项计划。“这三家公司的参与不仅给组屋购买者更多不同的选择,也为杜生组屋区引进更多活力和卖点。”

她过后答复媒体询问说:“杜生区对我们来说是非常新的尝试。我们第一次用了新加坡在国际上非常著名的建筑师来帮我们设计,所以我们相信这个组屋区推出后会受到非常热烈反应,特别是比较年轻的一群,他们都会被这个新的设计而吸引……这也把我们这个组屋的概念推上一个高峰。”

新一代组屋设计概念受欢迎

花园中的组屋、环保、空中花园、社区空间、两代家庭比邻而居、无缝行人网络等设计概念是新一代组屋的特色。建屋局去年在“再创我们的家园”巡回展中进行的调查显示,有63%和56%的参观者分别表示喜欢空中花园和花园组屋概念,53%的参观者喜欢两代同堂而居的概念。

WOHA和SCDA在国内外获奖无数。WOHA最近以摩绵坡1号获得国际大奖阿卡汉建筑奖(Aga Khan Award for Architecture);SCDA创办人曾仕乾则是第一届新加坡总统设计奖年度设计师。

由WOHA设计的杜生路B地段占地2.7公顷,约有1000个单位。SCDA则负责设计杜生路C地段,占地2.2公顷,约有800个单位。所有组屋楼高可达40层。

曾仕乾在设计中运用光与影的特点,并以独特手法实现“两代同堂而居”概念。WOHA则让屋主自行决定组屋装上什么外墙、怎样的阳台、窗户或墙壁,这使各单位外观不一样,整座大厦也独一无二。

“更新我们的杜生”(Transforming our Dawson)展览在大巴窑建屋局中心销售展示处展出,时间从上午9时至晚上9时,下月10日结束。

傅海燕昨晚也颁发18个奖项给获得建屋局设计奖、品质奖和建筑安全奖的承包商、建筑设计公司、供应商与合作伙伴。设计奖得主是盛邦国际咨询,品质奖得主有宝联建筑、海峡建筑、Kienta工程、Chiu Teng建筑以及联宇建筑等11家公司;建筑安全奖得主有海峡建筑、森联建筑及联宇建筑。

Three Parts To Dawson’s New Face

Source : TODAY, Thursday, July 31, 2008

THE public first got wind of the ambitious vision last August, when Prime Minister Lee Hsien Loong spoke of giving the 56-year-old Dawson Estate a new face.

Now, the surgeons who will design its new face have been appointed, and flats could go on sale by next year.















Construction is expected to start six months after the sale and the new generation of flats would be ready by around 2014, said Ms Grace Fu, Senior Minister of State for National Development and Education, yesterday.

She added that since the conceptual designs from the three architects invited to give shape to the ideas had been well-received by the public, all three — SCDA Architects, WOHA Architects and Surbana International Consultants — would be appointed as consultants for the Dawson project.

The rejuvenation of Dawson Estate is part of an initiative to transform public housing into vibrant homes for Singapore. Apart from Dawson, Yishun and Punggol have also been earmarked for major facelifts.

Dawson Estate — formed by the merger of Princess and Duchess estates — was first developed in the 1950s by the Singapore Improvement Trust.

Last September, the Housing Development Board (HDB) commissioned the three architects to come up with design ideas for Dawson Estate and showcased these concepts in an exhibition called “Remaking Our Heartland”.

The majority of the 11,000 Singaporeans who visited the exhibition gave the designs a thumbs up.

As a result, the HDB decided to appoint all the three architects to regenerate Dawson Estate.

SCDA and WOHA will work on the next stage of the estate’s detailed design as the sites they would be working on are now vacant.

SCDA and WOHA told Today that they are already talking to landscapers, quantity surveyors, structural and mechanical engineers.

The HDB will appoint Surbana at a later date when the site that the firm would be working on is ready for development in 2011.

Under SCDA’s concept, residents can look forward to flats with tall ceilings in the living room. These lofts are built next to smaller flats which can function as “granny units” should the owners of the bigger flat decide to buy over the smaller unit.

Other features include a central staircase with solar panels which face the West and cascading landscaped terraces. Around 800 units will come under the SCDA’s design.

WOHA’s design is based on a concept of a “kampung in the sky” by creating a 10-storey column as the heart of each village, overlooking a village square.

“This village square has community gardens, study areas, barbecue areas and gathering spaces which will allow people to get to know the other 60 to 70 households in their village,” said Mr Richard Hassell, WOHA’s founding director.

Surbana plans to stretch a park six storeys upwards with ramps covered with greenery.

It will meander in a figure-of-eight shape around the twelve 48-storey blocks. The site includes the old Queenstown town centre.

But with construction costs going up, will all these features and amenities be included?

Mr Chan Soo Khian, SCDA’s founding principal and design director, said the firm would stick to its design and “it is up to HDB” how it wants to price these units.

Mr Chan, however, said there is a possibility that not all features — such as solar panels — will be included since they “are an economic issue”.

WOHA’s Mr Hassell said it would be working very closely with the HDB to achieve Dawson’s expected standard “at a reasonable market price”.

The HDB is inviting all Singaporeans with fond memories of Dawson Estate to contribute old photos, postcards, cinema tickets and souvenirs commemorating the estate at its “Transforming Our Dawson” exhibition, which is being held at the HDB Hub until Aug 10.

Meanwhile, another first step in remaking Singapore’s heartland was taken, when 94.1 per cent of voters in a Yishun precinct said “yes” to the new Home Improvement Programme. The nine blocks are the first to come under this scheme.

Solved – The Rental Spike Mystery

Source : TODAY, Thursday, July 31, 2008

It was caused not by a jump in demand, but by a contraction in supply

LAST week, I suggested that the private housing oversupply may have been understated.

This is because units that have been bought by investors can still be considered as part of the housing supply until they are resold or are tenanted. If the rental income cannot cover the mortgage payments and if the owners are highly geared, then they will have to sell the units sooner or later. If a greater proportion of owners are in the same predicament, the competition to sell will result in lower prices.




















But surely, finding a tenant cannot be a problem.

After all, was it not so long ago that we heard complaints of unreasonable hikes in rentals. Between the third quarter of 2006 and the second quarter this year, the official rental price index went up by a hefty 69 per cent. This is almost 10 per cent each quarter.

What were the factors responsible for this? Many attributed it to higher demand. It could not have been anything else. But was this really the cause?

Amid the euphoria and excitement of the construction of the two integrated resorts and the anticipation of the tremendous spillover effects, the market misread the cause.

Many attributed it to the surge in foreign talent arriving on our shores. For sure, more expatriates were coming but were their arrivals in such large numbers so as to cause rents to escalate to such dizzy heights?

Even the new plans to prepare Singapore to accommodate up to 6.5 million people were loosely bandied around as proof that Government officials shared the same view. Investors bought the story and snapped up apartments at prices which presupposed a continuation of that strong upward trend.

However, official figures showed the number of rental contracts actually contracted by 17.6 per cent in 2006 and remained flat last year.

On the other hand, the average cost of rentals rose by 15 per cent in 2006 and 43 per cent last year. So, where are the missing expatriate households?

Certainly, the high rents did cause some to leave Singapore, others — especially Permanent Residents — to purchase, and for those without a generous budget, to rent HDB flats.

But there should have been at least a substantial — if not dramatic — nett increase in rental contracts. After all, they were supposed to have come in droves.

The mystery is solved if we realise that the spike was caused, not by a steep jump in demand as many had assumed, but by a sharp contraction in supply. The result may be the same but the implications are different.

The surge in en bloc sales had led to groups of tenants leaving their homes. The competition for homes simply drove rentals sky high.

There are no official figures but I estimate that the supply of rental accommodation to have shrunk by at least a quarter to a third of the existing stock.

Today, the rental market has stabilised. Those seeking homes would have found them by now — either by buying, downgrading or leaving Singapore.

What are the market implications?

First, there are now no hordes of expatriates scrambling for accommodation. This means demand will lag behind supply. Rents will decline. Lower rents translate into lower yields.

Second, for less prime units, it will come to a point when the low rents make no sense. It will be better to sell.

Recently, a consultant’s report extolled the benefits of owning a home on Sentosa Cove and a $19,500 monthly lease was reported in a the news as having been achieved.

Checks revealed that the 560-square-metre unit was sold in July last year for $8.59 million. It was probably a penthouse. This translates to a gross yield of 2.7 per cent. Does this even cover the interest on the mortgage?

Lest we forget, we have not factored in property tax of 10 per cent or maintenance charges of about $12,000 a year for a penthouse. What about the additional security cost for Sentosa homes? Or the cost of furnishings?

Eventually, the nett yield may dwindle to below 1.8 per cent — certainly a high risk to take for such a low return.

Is this situation typical of the other“investor” units completing over the next12 months? I hope I am wrong, but I fear this may be so.

The writer is the head of research at property consultancy Chesterton International.

IMF Sees Gradual US Economic Recovery Next Year

Source : The Straits Times, July 31, 2008

WASHINGTON - THE International Monetary Fund said on Wednesday the United States is poised for a gradual economic recovery in 2009, but urged more action to ease the housing crisis and financial turmoil.








'The housing correction and the broader financial sector turmoil of recent months have weakened household demand and credit conditions,' the IMF said in its annual review of the world's largest economy.

The IMF board of executive directors praised the US authorities' 'decisive and swift policy response' to the colliding shocks from the worst housing slump in decades and the broader financial turmoil of recent months, as well as higher energy prices.

'With added headwinds from oil prices, the US economy will be notably weaker but still register positive growth in 2008, and will recover only gradually in 2009,' the IMF said.

The IMF reaffirmed its growth forecasts of 1.3 per cent in 2008 and 0.8 per cent in 2009, released in the July 17 update of its April World Economic Outlook report.

Although short-term inflation expectations have risen 'somewhat' on surging commodity prices, price pressures are expected to be contained as commodity prices peak and demand wanes.

'Housing prices are continuing to fall, and there is a risk that such prices could move significantly below equilibrium, with important macroeconomic consequences,' the IMF said.

Directors advised the US government to 'be prepared to widen support for housing and, if serious dislocations reappear, for financial markets.'

'The housing boom has revealed multiple weaknesses in the current regulatory system,' it said A senior IMF official, speaking in a conference call with reporters, said the assessment took into account a broad housing rescue bill signed by President George W. Bush on Wednesday.

The official, speaking on condition of anonymity, criticized the new law's measure that provides public funds to allow lenders to voluntary reduce the amount of an outstanding mortgage in order to reduce preventable disclosures as not going far enough.

'The decision of lenders is completely voluntary. The question is are there sufficient incentives to do so,' the official said.

The 185-nation institution also recommended the US take up a financial reform that 'could include further consolidation and specialisation of regulatory institutions.'

The IMF strongly endorsed the Federal Reserve's actions to ease credit, but counseled that 'monetary policy should stay on hold for now, unless economic and financial conditions deteriorate further.'

However, if inflationary expectations spiral, 'the bias should be toward a decisive tightening once recovery is established and financial conditions ease.'

The Fed is widely expected to hold its key short-term interest rate at 2.0 per cent at its August 5 meeting. -- AFP

1,800 Flats To Go On Sale At Dawson Estate Next Year

Source : The Straits Times, July 31, 2008

Two 40-storey towers to be constructed under build-to-order system by 2014

A NEW generation of Housing Board flats is set to go on sale in about a year's time at now-sleepy Dawson estate.

The 50-year-old Queenstown estate is set to be transformed with the construction of two striking 40-storey towers, designed by award-winning architects, SCDA Architects and WOHA Architects.

At Dawson - Singapore's first HDB estate - the SCDA-designed block is on a 2.2 ha site and could feature about 800 flats. -- PHOTOS: HDB

The towers, to boast about 1,800 flats, are being built under the HDB's build-to-order (BTO) system - now the board's main means of providing new housing stock.

HDB rarely builds new flats within a mature estate due to the lack of space. The new towers in Dawson will be nestled among gardens designed by landscape architects - a first for an HDB estate.

News that the flats will be on sale in a year's time was unveiled by Ms Grace Fu, Senior Minister of State for National Development, at the HDB awards dinner yesterday.

She later told reporters that she expects very strong demand for the new flats.

Sales will start in the third quarter of next year. Construction could start six months after that and be completed in 2014, Ms Fu said.

At Dawson - Singapore's first Housing Board estate - the SCDA-designed tower block is on a 2.2ha site and could feature about 800 flats. The other block, on a 2.7ha site, will have about 1,000 units.

The towers will have special features such as lofts, flexible flat designs, and sky villages or common high-rise space shared by every 10 floors.

But potential buyers can still influence the final design. Feedback is invited at an exhibition on Dawson estate before the consultants finalise their designs. The show at the HDB Hub in Toa Payoh runs from today until Aug 10.

Home-hunter Lauren Shen, 27, a graphic designer, said: 'The flats are exciting because they can be customised. I have applied for a flat in Punggol. If I don't get it, I will wait for these new ones.

'But it will depend on the prices. My chances may be limited because I think they will be very popular.'

A third new-generation development will be added later at Dawson by Surbana International Consultants. It will be launched when the site for it is cleared by 2011.

To tie the three developments together, HDB has asked award-winning local landscape architects Cicada to draw up a landscape plan.

The plans will rejuvenate Dawson estate, which has about 3,000 flats. Dawson eventually could boast about 10,000 new homes, most of which are expected to be public flats.

HDB is keen to preserve Dawson's heritage and is seeking contributions of old photos, postcards, books and other items for use in a display.

MCL Land's Q2 Net Profit Up 45% To US$3.2 Mln

Source : The Business Times, July 31, 2008

MCL Land said on Thursday that second-quarter net profit rose 45 per cent to US$3.2 million, from US$2.2 million a year ago.

Revenue for the three months ended June 30, 2008 however fell to US$353,000, from US$133.5 million in 2Q 2007.

The group benefited from higher operating income even as sales slipped. In the company's financials, 'other operating income' rose to US$3.1 million in 2Q 2008, from US$515,000 for the same three months in 2007.

Earnings per share for the second-quarter rose 43 per cent to 0.86 US cents, from 0.6 US cents a year ago.

'The current uncertain economic conditions have led to a slowdown in the residential property market in Singapore,' the company said in a filing to the Singapore Exchange. However, medium to longer-term prospects remain positive, it added.

The completion of Mera Springs and The Esta in Singapore in the second half of the year should benefit MCL Land's overall performance in 2008, the company said.

In 2Q 2008, the developer launched no new projects in Singapore. All projects previously launched are fully pre-sold, with the exception of two units at Hillcrest Villa, MCL Land said.

Shares of MCL Land lost two cents to close at $1.26 on Thursday. -- UMA SHANKARI, BT NEWSROOM

Australand Fund Picked To Develop Brisbane Site

Source : The Business Times, July 31, 2008

CapitaLand's Australian unit Australand said on Thursday that its recently-formed Australand Residential Development Fund - which is a joint venture between Australand and BOS International (Australia) - has been selected as the preferred organisation to purchase and develop a 6.28 hectare riverfront site in the Brisbane suburb of Hamilton.

This follows a two-stage selection process run by the Port of Brisbane's Northshore Development Group.

The fund will acquire and develop the project over the next eight years, subject to the satisfactory finalisation of commercial terms, Australand said. The fund will utilise the equity and debt financing currently in place, the company added.

'Developing Northshore Hamilton through the Residential Development Fund will allow us to increase Australand's residential pipeline in Queensland, especially in the strong Brisbane market, without the need for additional capital,' Australand managing director and chief executive Bob Johnston said in a filing to the Singapore Exchange. -- UMA SHANKARI, BT NEWSROOM

Is CMT Morphing From Pure Retail Play Into A Mixed Reit?

Source : The Business Times, July 31, 2008

CAPITAMALL TRUST (CMT), Singapore's first real estate investment trust when it listed in 2002, has enduring appeal.

Six years since its flotation and with another 20 contenders in the Singapore Reit (S-Reit) market today, CMT remains Singapore's biggest Reit with an asset size of $7.2 billion.

The market has rewarded the trust's consistent ability to deliver total returns by according it one of the lowest costs of capital for any Singapore Reit. That is, CMT trades at one of the lowest distribution yields among S-Reits. The market demands a lower risk premium from CMT than it does for just about any other S-Reit. CMT is also trading above its net asset value. This has to do with CMT's track record in managing retail properties.

However, lately some institutional investors have been concerned that the shopping centre trust could be morphing into a mixed development trust. In 2006, CMT bought a 40 per cent stake in Raffles City, which comprises a mall, office tower, convention space and two hotels.

In May this year, CMT announced it was buying Atrium @ Orchard - a predominantly office asset - for $839.8 million.

Is CMT being forced to buy mixed developments because of the challenge of sourcing for pure-retail assets in Singapore as more shopping centres are already owned by Reits and private property funds?

Some investors would prefer CMT to be a pure retail play. If CMT dilutes its portfolio by acquiring mixed developments with office and other components, investors may demand a higher risk premium, that is, CMT may have to trade at a higher distribution yield, putting pressure on its unit price.

Not only that, there may be potential conflict of interest within the CapitaLand stable of Reits, since CMT's sister Reit CapitaCommercial Trust (CCT) owns mostly offices.

It may be timely to revisit some of the reasons behind CMT's acquisitions of Atrium and Raffles City.

Offices make up nearly 96 per cent of Atrium's existing net lettable area (NLA) of 373,446 sq ft. CMT's attraction to the property, however, is due to its strategic location next to the trust's existing mall, Plaza Singapura. By drawing synergies between the two properties, CMT can extract more value out of Plaza Singapura. Atrium is directly linked to Dhoby Ghaut MRT Station, which will be the interchange station for three lines. By integrating Atrium with Plaza Singapura, the latter will have improved MRT connectivity. CMT plans to boost Atrium's retail NLA from about 16,100 sq ft now to 172,100 sq ft by converting the first three levels into full-retail use. It also plans to create retail space on state land that it hopes to buy in front of Plaza Singapura.

CMT could also potentially move some big tenants from Plaza Singapura's upper floors to Atrium's upper levels and subdivide the vacated space at Plaza Singapura into smaller units that will hopefully fetch higher rents. Another possibility is to attract fitness centres and signature restaurants to Atrium's upper levels as office leases expire.

Given CMT's impressive track record at asset enhancement plans and its ability to create new retail space in its properties, it's possible to imagine Atrium transformed into a predominantly retail asset in future.

So too at Raffles City, asset enhancements have boosted the retail net lettable area by 12.5 per cent. These initiatives required the close cooperation of CCT, which owns the remaining 60 per cent in Raffles City. Had CMT bought only the mall in Raffles City, leaving the office tower to CCT, the two Reits might have had sibling arguments during the mall's refurbishment as many common areas were involved. Instead, by taking stakes in the entire development, the two Reits worked in unison.

When Raffles City's asset enhancement potential has been substantially realised, CMT and CCT could neaten their ownership - with CCT holding the office tower and CMT the mall. This will sharpen the two Reits' respective foci and give investors clearer choice to invest in their preferred asset class. Likewise, when CMT is done transforming Atrium and creating more retail space, it could sell the remaining office space to CCT. After all, CMT should not be competing with CCT - a big office landlord - for office tenants at Atrium.

There will also be office space when CMT builds four more floors on top of Funan DigitaLife Mall to tap the site's unutilised development potential. CMT has all approvals in place but will begin work only after the new office space has been substantially leased; this should make it easier for CMT to dispose of the office space and once more stick to its core strength in retail.

Moving ahead, CMT is unlikely to shy away from mixed assets as long as there are strategic reasons and where such assets have a retail component that it can add value to.

CMT will have to hope that investors will still find this defining strength endearing.

HK Home Sales May Fall On Inflation Worries

Source : The Business Times, July 31, 2008

Share slide, global credit crunch could push property prices down, say analysts

(HONG KONG) Hong Kong's apartment transactions may fall to a 10-month low in July, then drop further, on concerns that accelerating inflation and a slumping stock market may push prices down, analysts said.

Pricey: Hong Kong has the most expensive luxury home prices in Asia - US$10,490 to US$14,780 psm, compared with US$12,510 to US$22,923 psm in Manhattan

Transactions in 10 of Hong Kong's biggest housing complexes, used by many analysts as a benchmark, fell to 27 last week from 33 the previous week, Centaline Property Agency said. Total home sales in the city may drop to 6,100 in July, the lowest number since September, from 7,167 in June, it said.

'This will probably continue for the whole of the third quarter,' said Louis Chan, managing director of residential properties at Centaline. 'We're looking at between a 3 and 5 per cent correction in prices within the quarter.'

Home values have tracked Hong Kong's economy, peaking in the second quarter of 1997, then crashing in the Asian financial crisis, leaving many homes worth less than their mortgages for years. The 2000 dotcom bubble burst, the Sept 11, 2001, terrorist attacks and the 2003 Sars epidemic caused prices to fall as much as 70 per cent from the peak. The rebound started in late 2003 and prices doubled in the past four years.

Now, the benchmark Hang Seng Index has fallen almost a third from its record in October as credit-market losses climbed worldwide, threatening global economic growth even as inflation accelerates in Hong Kong. The combination could deter potential homebuyers, possibly for the balance of the year.

'The Hong Kong residential market will go into a quiet period for the rest of 2008,' said Cusson Leung, a Hong Kong-based analyst at Credit Suisse. His July 8 report forecast a 5 to 10 per cent reduction in home prices in the second half.

Overall housing transactions in the second half may fall between 20 and 30 per cent from a year earlier, said Patrick Chow, head of research at real estate agency Ricacorp Properties. 'Many people looking to upgrade their properties again have had their capital drained by the stock market,' Mr Chow said. 'This may seriously impact the high-end market, in part because many of those homebuyers had upgraded last year.'

Hong Kong's four biggest real estate agencies this month fired a total of more than 300 workers in anticipation of a housing slump, according to a July 23 report in the Hong Kong Economic Times.

Hong Kong's inflation accelerated in June to the fastest pace in four months as food and energy costs climbed. Local lenders including BOC Hong Kong (Holdings) and Hang Seng Bank last month raised their mortgage rates for some customers to deflect the squeeze on lending margins.

'Inflation is giving many people second thoughts about buying properties,' said Alnwick Chan, a Hong Kong-based executive director at property research company Knight Frank LLP. 'There's going to be a correction but it won't be a crash.' Hong Kong has the most expensive luxury home prices in Asia, US$10,490 to US$14,780 per square metre, according to the Global Property Guide website. That compares with US$12,510 to US$22,923 per square metre in Manhattan.

The Hang Seng Properties Index, which tracks the city's six biggest builders by market value, has dropped 30 per cent this year on concerns Hong Kong banks may lift rates.

The expectation that the US Federal Reserve will start raising interest rates in the fourth quarter of this year has damped Asia's stock markets, according to Credit Suisse.

Sino Land sold almost 70 per cent of the apartments it made available at the Palazzo, a high-end complex overlooking the Sha Tin horse track in the first nine days of sales, Sing Tao Daily reported in May. Billionaire Li Ka-shing's Cheung Kong (Holdings), Hong Kong's second-biggest builder by value, met full-year sales targets by June, selling 2,700 apartments for HK$23 billion.

Transactions and prices may rebound in the fourth quarter if both the US and Hong Kong stock markets show they have weathered the sub-prime crisis, Centaline's Mr Chan said.

The property affordability ratio, homeowners' average monthly mortgage payment as a percentage of income, is 32 per cent, 'a very healthy level' compared with 93 per cent at the peak of the 1990s boom, according to Buggle Lau, chief analyst at Midland Holdings Ltd, Hong Kong's biggest publicly traded property agency.

'Growth is definitely slowing, but the fundamentals of the economy are still strong,' Mr Lau said. 'When the uncertainties go away we're pretty sure buyers are going to come back.' Midland's shares have plunged 66 per cent this year, after nearly quadrupling between the beginning of 2007 and January. -- Bloomberg

Award-Winners To Design HDB Flats

Source : The Business Times, July 31, 2008

SCDA, WOHA and Surbana named consultants for Dawson Estate flats

FLAT-BUYERS eyeing Dawson Estate in Queenstown will be spoilt for choice, as upcoming public housing will feature designer looks courtesy of not one, not two, but three local award-winning architectural firms.

Ms Fu: There will be challenges in keeping HDB flats affordable

The Housing & Development Board (HDB) said yesterday that it will appoint SCDA Architects, WOHA Architects and Surbana International Consultants as design consultants for the district's public housing projects.

Dawson Estate comes under a 'Remaking Our Heartland' exercise that aims to transform public housing into vibrant homes for Singaporeans.

To showcase the regeneration of an old estate, HDB invited the three architectural firms last year to design public housing precincts in Dawson Estate based on new ideas and concepts.

Favourable response from the public led HDB to appoint all three as design consultants.

SCDA and WOHA received their letters of appointment at a HDB awards dinner yesterday evening. The two sites which both firms worked on are vacant and ready for development.

HDB plans to launch the first batch of flats on these two sites for sale under the Built-to-Order system in the third quarter of next year.

Construction could start in the first quarter of 2010 and be completed in 2014.

HDB will appoint Surbana later, when the site it worked on is cleared and ready for redevelopment in 2011.

'The participation of these firms will not only give HDB flat buyers greater variety and choice, it will also bring a livelier, more attractive buzz to Dawson,' said Senior Minister of State for National Development and Education Grace Fu.

HDB has also appointed a local landscape architectural firm, Cicada Pte Ltd, to draw up a landscape masterplan. The plan will create a distinct identity for Dawson Estate and bring together the three different precincts.

To retain Dawson Estate's heritage, HDB is inviting the public to contribute items from the district's past. Selected heritage items will be woven into the new development.

Ms Fu said yesterday that the 'Remaking Our Heartland' programme has made much progress. Nevertheless, she added: 'There will be challenges along the way, such as grappling with inflation and competing for resources amidst the global construction boom, while keeping HDB flats affordable.'

Frasers To Support Top KL Serviced Residences

Source : The Business Times, July 31, 2008

FRASERS Hospitality, the hospitality arm of property group Frasers Centrepoint. said yesterday that it will provide technical and advisory services for a 'gold-standard' serviced residence project in Kuala Lumpur.

Mr Choe: Fraser Place KL is ideal for expats working on medium-term projects

The project, Fraser Place Kuala Lumpur, is in the Malaysian capital's 'Golden Triangle', where most international banks, oil-and-gas companies and multinationals are based.

It is also within walking distance of the Petronas Twin Towers and the retail mall Pavilion KL.

Fraser Place Kuala Lumpur is owned by Malaysian-listed YNH Property.

The project is part of a mixed development comprising an office tower and a second tower with 217 studios, one-bedroom, two-bedroom and penthouse serviced residences.

Frasers said in a statement yesterday that when Fraser Place Kuala Lumpur opens in the third quarter of 2009, it will set a new standard for Malaysia's extended-stay segment.

Every apartment has a separate bedroom, a fully-equipped kitchen with cooking implements, cutlery and a dishwasher, and a washer-dryer for clothes.

Guests can also make use of an all-day dining outlet, meeting and function rooms, fitness centre, and playground and playroom for children.

Frasers Hospitality chief executive officer Choe Peng Sum says the project will be ideal for expatriates working in Malaysia on medium- term projects, as it provides comfort, all-day-dining and even facilities for accompanying spouses and families.

CBRE Group Income Dives 88% In Q2

Source : The Business Times, July 31, 2008

Brokerage fees hit as sales dry up due to global credit market crunch

(NEW YORK) CB Richard Ellis Group Inc, the world's largest commercial real estate brokerage, said quarterly net income plunged 88 per cent, partly on lower brokerage fees from sales that have all but dried up due to the severely constrained global credit markets.

Hazy days: CBRE's two biggest markets, the US and Britain saw a dramatic fall-off in commercial real estate sales and a slowdown in demand for space leasing. A bright spot was the Asia-Pacific where revenue rose 27.8%

Second-quarter net income fell to US$16.6 million, or 8 cents per share, from US$141.1 million, or 59 cents per share, in the year-earlier quarter, the company said on Tuesday.

Excluding one-time charges Los Angeles-based CB Richard Ellis would have earned US$33.2 million, or 16 cents per share, compared with US$157.3 million, or 66 cents last year, still far from the 44 cents analysts on average had expected, according to Reuters Estimates.

'As we had anticipated, the leasing business turned down from the strong first quarter, especially in the Americas and the UK, reflecting weak economic activity and decreasing business confidence,' Brett White, chief executive, said in a statement.

'Investment sales activity remained quite soft due to a broadening of the credit market turmoil and a continuing gap between buyer and seller expectations of property values. Decreased investment volumes have now become evident in all parts of the world.'

Revenue fell to US$1.3 billion from US$1.5 billion and behind the US$1.42 billion analysts had expected, according to Reuters Estimates.

The commercial real estate market has been hampered by the broader tightness in the credit markets.

The company's two biggest markets, the United States and Britain have seen a dramatic fall-off in commercial real estate sales and a slowdown in demand for space.

One bright spot was the company's real estate outsourcing business, which overseas real estate needs for large global companies. That segment saw revenue rise 29 per cent, accounting for one third of the Los Angeles-based company's global revenue. Also the Asia-Pacific region saw revenue rise 27.8 per cent to US$155.7 million.

But the larger regions were gloomy. In the Americas region, which includes the United States, Canada and Latin America, revenue fell 16 per cent to US$785.5 million. In Europe, Middle East and Africa, revenue fell 9.4 per cent to US$299.7 million.

In the Global Investment Management segment, which consists of investment management operations in the United States, Europe and Asia, revenue fell 49 per cent to US$42.7 million, compared with the second-quarter last year, which included performance fees from funds.

In addition, the second quarter of 2008 included a writedown of US$11.9 million for two investments whose market value declined. -- Reuters

Jones Lang Q2 Profit Dives 67% To US$25m

Source : The Business Times, July 31, 2008

(NEW YORK) Jones Lang LaSalle Inc, the world's second-largest commercial real estate broker, said that second-quarter profit fell 67.6 per cent as borrowing costs increased for apartment buildings, offices and retail properties.

Mr Dyer: Diverse business lines offset the impact of illiquid credit markets

Net income declined to US$25.5 million, or 73 US cents a share, from US$78.6 million, or US$2.32, a year earlier, the Chicago-based company said in a statement on Tuesday. Revenue dropped 2.5 per cent to US$660 million.

Higher borrowing costs and scarcer financing for investment in commercial real estate cut into property sales.

Financial services firms have lost or written down more than US$468 billion since the beginning of last year, prompting them to curtail lending.

The company said that it had a 34 per cent increase in investment advisory fees and a 23 per cent increase from commissions.

'Solid revenue performance from LaSalle Investment Management and our diverse business lines offset the continued impact of illiquid credit markets,' chief executive officer Colin Dyer said in the statement.

Jones Lang, second in market value to CB Richard Ellis Group Inc, earns about 34 per cent of its revenue from Europe and the Middle East, 29 per cent from the Americas and 23 per cent from the Asia-Pacific region, according to a company report this month.

The company was projected to earn US$1.01 a share, according to the average of four analysts' estimates in a Bloomberg survey.

In the Americas region, Jones Lang said, revenue rose 6 per cent to US$190 million. In Europe and the Middle East, it rose 20 per cent to US$236 million, and Asia Pacific revenue fell 33 per cent to US$142 million. That decline came after the company failed to repeat a year-ago gain made on a hotel transaction.

Jones Lang stock has lost 20 per cent in New York Stock Exchange composite trading since the beginning of the year.

Jones Lang operates in more than 700 cities and 60 countries with about 30,000 employees, according to its website. It represents tenants, and manages, leases and values commercial real estate. -- Bloomberg

Property Transactions With Contract Dates Between July 14th - 19th, 2008

CDL Hospitality Trusts Looks To Foreign Markets To Grow

Source : Channel NewsAsia, 30 July 2008

CDL Hospitality Trusts is setting its sights overseas for potential acquisitions, favouring markets like Japan and China.

It said that while the Singapore hospitality sector is still strong, it is also seeing many interesting offers from the rest of Asia.

Medical tourism and a growing financial sector have kept room rates at record levels in Singapore, but CDL Hospitality Trusts is looking to spread its wings.

About 97 per cent of its S$29.5 million revenue comes from Singapore right now, and the REIT is hoping to take advantage of the current downturn to change that.

Vincent Yeo, CEO of CDL Hospitality Trusts, said: "I think it's part of our plan to diversify and become a pan-Asian REIT. We like to think that we can find bargains around the region, within the next six to twelve months."

The trust has a deep well of reserves to draw from. It currently sports borrowings of 20 per cent and has a debt ceiling of S$740 million before it hits the threshold of 40 per cent.

Among the markets that the REIT finds particularly attractive are Japan, China and India.

Mr Yeo said: "Recently, there have been a lot of deals made available in Japan, and that has come about because of the credit environment where the loan to value ratio has dropped significantly in terms of what banks are willing to lend.

"Credit spreads have also gone up significantly, so people have had refinancing difficulties and have looked to sell at realistic prices."

For the first half of 2008, CDL Hospitality Trusts clocked in a 34 per cent increase in revenue per available room. Distributable income per unit rose to 5.89 cents, up 52 per cent from last year.- CNA/so

United Engineers Suffers 67% Drop In H1 Profit

Source : Channel NewsAsia, 30 July 2008

United Engineers has suffered a 67 per cent drop in first-half earnings, hurt by the strong Singapore dollar and fair value losses.

Profit for the six months ended in June came in at S$8.7 million.

But revenue increased slightly by 2 per cent to S$273.8 million, mainly bolstered by higher rental rates.

Looking ahead, United Engineers is warning about the impact of rising costs. - CNA/ms

MP REIT Reports DPU Of 1.78 Cents For Q2

Source : Channel NewsAsia, 30 July 2008

Macquarie Prime Real Estate Investment Trust (MP REIT) has booked a second-quarter distributable income of S$17.2 million.

That works out to a distribution per unit of 1.78 cents - an increase of almost 19 per cent compared to a year ago.

Gross revenue hit S$30.2 million, up 28 per cent year-on-year.

This was driven by higher rental rates achieved for renewals, new committed leases and revenue from overseas properties.

Macquarie said it has inked an agreement with footwear giant Nike to set up its biggest and first directly-owned and managed concept store in Singapore and Southeast Asia in Wisma Atria before year-end. - CNA/ms

CapitaRetail China Trust To Distribute 1.7 Cents Per Unit In Q2

Source : Channel NewsAsia, 30 July 2008

CapitaRetail China Trust (CRCT) is distributing 1.7cents per unit for its second quarter. This is 10.4 per cent higher than its forecast for the period.

In all, CRCT is distributing S$10.5 million to its unit holders. The trust said its net property income grew 34 per cent on year to about S$16.5 million.

Revenue also jumped to S$26.4 million for the quarter, some 49 per cent higher than the same period a year ago. This is mainly due to revenue contribution from Xizhimen Mall in Beijing, which was acquired in February this year.

CRCT said that barring unforeseen circumstances, it remains confident of meeting its forecast distribution per unit for the full financial year 2008 of 6.67 cents per unit.

It is posting strong same-store sales, with year-on-year growth in some malls at between 24.5 per cent and 77.2 per cent.

The trust said about 94 per cent of its forecast gross rental revenue for this year has also been locked in.

CRCT's total asset size is about S$1.2 billion, comprising eight retail mall properties in five major Chinese cities.

The properties are Xizhimen Mall, Wangjing Mall, Jiulong Mall and Anzhen Mall in Beijing, Qibao Mall in Shanghai, Zhengzhou Mall in Zhengzhou, Saihan Mall in Huhehaote and Xinwu Mall in Wuhu. - CNA/yb

Suntec REIT To Distribute 2.793 Cents Per Unit For Q3, Up 33%

Source : Channel NewsAsia, 30 July 2008

Suntec Real Estate Investment Trust is planning to distribute 2.793 cents per unit for its fiscal third quarter.

This was 33 per cent higher than the distribution per unit in the year-ago period and also 25 per cent higher than forecast.

The trust's total distributable income came to S$42 million for the three months to June, up 40 per cent on year.

Suntec REIT credited its strong organic growth and asset enhancement of its properties for the better performance.

It said despite the ongoing US sub-prime crisis, both its office and retail portfolios have achieved stronger committed rents compared to the last quarter.

Its office portfolio achieved another strong performance during the quarter. Renewal and replacement leases at Suntec City were secured at higher closing rents of between S$12 and S$15 per square foot per month.

As at 30 June 2008, Suntec REIT's committed occupancy for the overall office portfolio stood at 99.4 per cent.

The trust said it has no major refinancing needs for the rest of FY2008 and FY2009.

Suntec REIT said barring unforeseen circumstances, it expects its performance for the remainder of the year to continue to be strong. It also expects to exceed its forecast DPU of 8.69 cents. - CNA/vm

Award-Winning Architects To Design New Dawson Estate

Source : Channel NewsAsia, 30 July 2008

Two award-winning private architects were officially appointed by the Housing and Development Board (HDB) on Wednesday to put a new spin to the old Dawson Estate in Queenstown.

SCDA Architects Pte Ltd and WOHA Architects Pte Ltd were earlier commissioned to draw up plans for two separate public housing sites at the junction of Margaret Drive and Dawson Road.

The new flats will be launched for sale under the Build-To-Order system in the third quarter of 2009.

The 60-hectare Dawson district, which was first developed in the 1950s, will have new homes nestled among lush greenery.

Related Videos :- http://tinyurl.com/666pgv

SCDA's plan features multiple layers of common spaces such as car parks, shops and facilities, while individual residential units can be combined to create lofts, which are ideal for home offices or larger families.

The 823-unit project will also be eco-friendly.

Chan Soo Khian, design director, SCDA Architects, said: "All the surface runoffs will be collected in retention tanks and these will then be used to irrigate all the landscape. The staircase would be integrated with solar panels."

At a separate site in the same district, architects at WOHA spent over four months on their work. The project will also boast sky gardens and integrated facilities.

It is expected to be home to about 1,000 households, which will have plenty of opportunity to interact.

Richard Hassell, founding director of WOHA Architects, said: "Every apartment feels like it belongs to a smaller community of about 60 or 80 homes. The way we've done it is to make a space... so on the way from the lift to the front door, you always go through this space."

These flats are expected to be ready in 2014 and their price tags will be unveiled next year.

To preserve the heritage of the area, HDB is also calling on the public to contribute items relating to Queenstown. These could be old photographs, postcards or even cinema tickets, which will be incorporated into the design of the new estate.

Subana International Consultants has been chosen to develop a third site in the Dawson Estate. The company will be officially appointed when the plot is cleared in 2011.

The plans will be on display at the HDB Hub from July 31 to August 10. - CNA/so

US Home Prices Continue To Fall; Values Gain In Some Cities

Source : Channel NewsAsia, 30 July 2008

WASHINGTON : The decline in home values in major cities accelerated in May amid a lingering property slump, but prices in some areas showed improvement, a survey showed Tuesday.

A house for sale in Illinois.

The Standard and Poor's/Case-Shiller home price index - which tracks property prices across major metropolitan areas - registered a hefty fall of 15.8 percent in May compared with the same month a year ago, marking a record annual decline.

The benchmark index tracks property prices in 20 major US cities.

Home prices in the 20 large cities declined 0.9 percent on a monthly basis to May.

"The overall real estate market continued to slide in May," said David Blitzer, the head of S&P's index committee.

But the survey also showed that home prices in seven cities, Atlanta, Boston, Charlotte, Dallas, Denver, Minneapolis, and Portland, displayed monthly increases in May compared with April.

Property values in the Nevada gambling hub of Las Vegas and in Miami, Florida, continued to fall heavily, however.

The survey showed that property values slumped by 3.6 and 2.9 percent in Miami and Las Vegas respectively in the month to May.

Parts of California, Florida, Nevada and Ohio have been particularly badly hit by the lengthy US housing slump, especially neighbourhoods targeted for speculative construction projects.

"House prices will continue to drop because inventories of unsold homes remain high," said Patrick Newport, an economist at Global Insight.

"Recent progress on reducing inventories has been modest. This is bad news because inventories need to come down considerably for the housing market to equilibrate," Newport said.

Other economists believe the housing market slump is showing some signs of bottoming out.

The US housing market has been in a downturn for over two years following a multi-year boom which saw home sales and prices propelled higher, partly due to a speculative building frenzy in some states. - AFP/de

HSBC Says Global Credit Crisis Not Having Large Impact In Asia

Source : Channel NewsAsia, 30 July 2008

HONG KONG: Global banking giant HSBC has dismissed fears of a global credit crisis having a large impact in Asia. It said that overall, Asian economies remain robust, thanks to strong domestic demand.

The US mortgage crisis has put America on a cautious footing and cut its demand for Asian exports - sparking fears that this will put a drag on the growth of regional economies. However, Hong Kong-based economists from HSBC have dismissed those fears.

Frederic Neumann, senior Asian economist, HSBC, said: "We've seen a lot of news reports and commentaries suggesting that Asian economies are likely to decelerate very sharply into the year end. But I think Asian economies are fairly sound."

The most sound economies appear to be China and India, which can tap on strong domestic demand, which is buffering against the negative effects of a US slowdown.

However, HSBC said Taiwan and Thailand are among the those most vulnerable to weakness ahead because of a rapid slowdown in exports and sluggish domestic demand.

The bank said that those looking to invest should stick to places which are considered more developed markets or those that are relatively less affected by inflation.

Garry Evans, chief equity strategist, Asia-Pacific, HSBC, elaborated: "Singapore, (a) developed market, (is) relatively less volatile. (In) China, we don't see (inflation) as being a particularly big issue; (its) earnings growth is fairly visible. Korea, (an) OECD member, (is) one of the more developed markets in Asia."

Although Asian economies remain sound, HSBC said economic imbalance is something that policymakers need to keep their eye on.

It said they must tackle the issue of inflation to keep growth from suffering in the future. - CNA/ms

Bush Signs Massive Housing Bill

Source : Channel NewsAsia, 30 July 2008

WASHINGTON : US President George W. Bush has signed an elaborate housing rescue plan designed to help thousands of homeowners avert foreclosure and bolster mortgage finance giants, the White House said on Wednesday.

A sign advertising a reduced price is seen in front of a home for sale in Richmond.

Bush signed the most sweeping housing legislation in decades "to improve confidence and stability in markets, and to provide better oversight for (struggling US mortgage lenders) Fannie Mae and Freddie Mac," White House spokesman Tony Fratto said in a statement announcing the signing.

"The Federal Housing Administration will begin to implement new policies intended to keep more deserving American families in their homes," Fratto added.

The Housing and Economic Recovery Act of 2008, which legislators from both sides of the aisle have described as vital to stem fallout from a slumping housing sector, provides 300 billion dollars in federal guarantees to help refinance troubled mortgages.

It provides for government credit and equity injections in Fannie Mae and Freddie Mac, the two mortgage lenders that underpin much of the housing market, and calls for some 3.9 billion dollars to help local governments buy and rehabilitate foreclosed homes.

Opponents to the bill had argued that it would reward "irresponsible" lenders and consumers and allow the government too big a role in the housing market.

Bush, too, had opposed the bill because of the inclusion of the local government grants, but eventually dropped his opposition.

The bill's supporters stressed that providing a financial lifeline for the government-sponsored Fannie Mae and Freddie Mac as well as more regulatory oversight would contribute to confidence and stability in housing and financial markets.

The aid package comes with the housing sector still weakening from a nearly two-year-old slide and data showing home prices falling further, inventories rising and many buyers waiting on the sidelines. - AFP/de

Wednesday, July 30, 2008

收购中低价商品房 重庆注资20亿救房市

Source : 《联合早报》July 30, 2008

为了扶持不断下跌的房地产市场,重庆市政府准备拿出上百亿人民币收购中低价商品房。

重庆市政府将用100亿元(人民币,下同,20亿新元)购买一线的低价商品房,用来安置那些因为拆迁需要住房的市民。

商品房指的是私人发展商开发兴建的房屋。

未来五年,重庆将完成近800万平方米的旧危房改造,涉及成千上万的拆迁户。

去年重庆主城区房价出现了近10年最大的涨幅,但到今年中,房价几乎又跌回去年价格,并且有继续下跌的趋势。

去年中,受重庆获批成为城乡统筹综合配套实验区(“新特区”)利好消息的影响,当地房地产价格飙升。主城区房价出现了近10年最大的涨幅,市场一片兴旺。

可惜好景不长,之后受中央调控政策的影响,市场一路下降,到今年中,房价几乎又跌回去年价格,并且有继续下跌的趋势。

就在房地产商愁眉不展的当儿,重庆市委常委、常务副市长黄奇帆宣布:“政府将拿出上百亿的资金收购一线的中低价商品房。”

他并且承诺,困难的时候可以找政府,政府总归要出力。

黄奇帆日前在重庆一个房地产论坛上承认,重庆市房地产市场虽然没有大幅度下降,但是也受到一定影响。所以政府在今年的危旧房拆迁中,采取了一些推动房地产业的做法。

他所说的做法,就是政府出100亿收购一线中低价商品房。

他说:“这种方法代替了大量建设安置房,同时,这个时候收购首先是市场价格不高,还可以打折。此外,这些商品房房地产商已经缴交了各种税款。这样还能加快拆迁过程,因为建造房子可能要三四年。

“最终,这100亿进入了市场,造成了市场的正常流动和稳定,对我市的房地产业,这是一种帮助。”

对于重庆市政府采取的“救市”措施,当地房地产商并不领情。

一名不愿意透露姓名的重庆大型房地产公司负责人,昨天在接受本报采访时说:“这是一种讨好百姓的做法。黄副市长的讲话,让老百姓觉得房价还可能降得更低一点,最后的结果就是开发商争相压价,最后房地产市场是‘血淋淋’的。”

房产公司:政府采购会出现‘黑洞’

对于政府拿出百亿元收购一线中低价商品房的做法,她希望政府能够把赔偿的钱交给拆迁户,让他们直接购买,而不是由政府采购。

“政府采购会出现‘黑洞’,我们现在需要的是政府全方位综合‘救市’配套,例如放松银根、调整政策。这样的政府采购不会给开发商带来什么好处。”

至于黄奇帆提到目前政府收购商品房可以与开发商杀价,她表示:“目前重庆最大开发商华宇集团的房价,都已经跌破每平方米4000元,这在中国大城市算是很低的价格了。政府现在还要在此基础上让开发商再降价20%,我们怎么生存?”

但是,重庆最大的房地产中介公司“中原地产”商品房市场总监肖仁启在接受本报采访时认为,重庆市政府出资百亿收购一线低价位商品房,对重庆地产市场来说是个好消息。

他说,以每平方米3000元来说,100亿就能购买300万平方米商品房,以去年重庆销售1800万平方米总数来说,就相当于总销售面积的六分之一,这还是相当可观的。

不过,他估计,重庆市政府用来收购中低价商品房的100亿元不会在一年内就消化,可能会在几年内消化掉。

“因为城市拆迁是逐步的,需求也是逐步的。政府筹措100亿元也需要时间。”

由于政府收购的是一线中低价商品房,因此肖仁启认为,受益的应该多是重庆的中小型开发商,“他们的产品正好是中低价位,正切合需求。”

他认为,重庆市政府的做法对房地产市场是信心上的支持,“更重要的是政府希望以此加快城市建设,提升整个城市的价值。”

Home-Buyers Today Cautious, But Genuine

Source : TODAY, Wednesday, July 30, 2008

Applications for Park Central@AMK roll in, but how many will translate into actual sales?

SINCE its launch last week, more than 1,000 applications have been received for 578 units at Park Central@AMK, Singapore’s third condominium-style public housing development.

With developer United Engineers (UE) pricing its Design, Build and Sell Scheme (DBSS) project at $490 psf to $500 psf, it remains to be seen how much of the 20,000 visitors to the showflats will translate into applications by the Aug 5 deadline.

Mr David Liew, managing director of UE Developments, said: “The people coming here are more cautious, more serious ... What we are seeing is more genuine interest.”

Earlier this year, the pricing of such projects built by private developers had caused a stir.

City View@Boon Keng’s price tag of $520 psf was a record for new public housing flats. More than 3,500 people applied for the 714 units — but only 66 per cent actually bought them.

Six months after its launch, 20 per cent of the units remain unsold, said the project’s marketing agent.

But this slower pace of sales “does not mean the market cannot sustain the price”, said Mr Donald Yeo, executive director of HSR International Realtors. “It’s still very competitive and I believe the prices are still realistic.”

Buyer response had hit fever pitch for the first DBSS development in 2006, when nearly 6,000 people applied for 616 units, going for around $300 psf, at Premiere@Tampines.

At Park Central, all units come with the look and feel of a private residential home but they cost about 40 per cent less, at $500 per square foot.

The developer did not think the resale flats in the area would pose a threat to sales of Park Central, as many of the resale units are about 10 to 20 years old — and most home hunters prefer to buy new flats, even at a 10 per cent premium.

Industry players expect prices at the next condo-style public housing project in Bishan to be even higher, partly due to the spike in construction cost.

Rents Falling At Most Condos

Source : The Straits Times, July 30, 2008

New supply of homes and weak demand could mark start of downward trend

TENANTS, rejoice: rents have begun to fall at a majority of condominiums in Singapore on the back of fresh home supply and a turnaround in market sentiment.
Two in every three projects with a substantial number of leases saw rents drop in the second quarter from the previous three months, according to the latest data from the Urban Redevelopment Authority (URA).

This marks a reversal from the last two years, when private home rents soared, especially in expatriate-friendly areas, due to an insufficient supply of rental homes and an influx of expat tenants.

Now, rents are dipping in almost every location around the island, but particularly in the two areas most popular with expats - East Coast and the central region around Orchard Road.

This could mark the start of a downtrend that experts say may worsen with more home completions, especially in the prime areas, where rents have reached stratospheric levels.

URA's data analysed rents in developments with at least 100 units and that have 10 or more leases each in the first and second quarters this year. Of the 124 projects in this category, 80 - or about 64 per cent - saw rents drop between the two quarters.

But URA also has a more comprehensive rental index that covers all rental transactions, including those at projects with fewer than 10 leases. This showed that rents across the country rose 2.5 per cent overall in the second quarter, the smallest rise in three years.

Rents are taking a hit largely because the stock of homes available for rental has risen, property consultants said.

Several major projects have recently been completed that were heavily bought into by investors planning to rent out their units. These include the 640-unit Icon in Tanjong Pagar, a 430-unit tower at Sail @ Marina Bay, the 600-unit Citylights at Lavender, and the 546-unit Sea View in Amber Road.

Ms Tay Huey Ying, director of research and advisory at property firm Colliers International, said the 'peakish' rents could also be due to the current run of high inflation, pushing up living costs in general and making expats more resistant to any rental rises.

Another source of rental demand, collective sale sellers, has also dwindled due to the delay in demolishing several en-bloc sale estates amid a slow property sales market, she added.

Colliers' own research showed that monthly rents of luxury apartments fell 3 per cent in the first six months of this year. A 1,000 sq ft apartment was fetching $6,730 in June, down from $6,930 in December last year.

But Ms Tay said luxury rents are unlikely to fall by more than another 10 per cent in the second half, as Singapore remains attractive to expats.

Mr Colin Tan, head of research and consultancy at Chesterton International, agreed that the rental declines in the prime central districts will be 'more gradual than elsewhere as their central location means there will be no lack of demand'.

'At the other end of the rental market, in far-flung locations such as Changi and Pasir Ris, the declines are expected to be more pronounced as they will face the twin problems of weak demand and declining rentals,' he added.

IMF Sees Prolonged US Slowdown

Source : The Business Times, July 30, 2008

It cites worsening credit conditions for consumers and banks

(WASHINGTON) The International Monetary Fund (IMF) said on Monday there's no end in sight to the US housing recession and warned that deteriorating credit conditions for consumers and banks may prolong a period of slow economic growth.

'At the moment, a bottom for the housing market is not visible,' the IMF said in its Global Financial Stability Report, released in Washington. 'Stemming the decline in the US housing market is necessary for market stabilisation as this would help both households and financial institutions to recover.'

The IMF, which a year ago failed to foresee the depth of the sub-prime mortgage collapse, stood by its April forecast for about US$1 trillion in losses stemming from the US mortgage crisis. While US policy makers have helped contain the financial losses, 'credit risks remain elevated' and banks need to raise more capital, the Washington-based lender said.

'The growing concern is that, with delinquencies and foreclosures in the US housing market rising sharply, and house prices continuing to fall, loan deterioration is becoming more widespread,' the IMF said.

Worldwide asset writedowns and losses have totalled US$469 billion in the past year, and US$345 billion has been raised.

The White House also on Monday lowered its forecast for economic growth this year and next and said unemployment is likely to rise as housing and financial debacles along with high energy prices take their toll.

Under the Bush administration's new forecasts, gross domestic product is estimated to grow by only 1.6 per cent this year. That's down from a 2.7 per cent growth projection made in February.

Growth next year is expected to clock in at 2.2 per cent, also lower than the 3 per cent growth rate previously estimated by the White House's budget office.

'The US economy has continued to expand, but growth has slowed as a result of the sharp housing decline, disruptions in financial markets and high energy prices,' the administration said.

Jaime Caruana, head of the IMF's capital market division, said housing data in the US showed few signs of improvement. 'Some indicators continue to go south,' he told the press in Washington on Monday. Improving affordability, he felt, should at some point help the market recover.

Falling share prices are making it harder for banks to raise capital, increasing the risk of a downward spiral in the global economy, the IMF said. The outlook for banks may make investors reluctant to provide fresh funds needed to restore the strength of financial institutions, the fund added.

In its most sweeping effort to halt the biggest housing slump since the Depression, the US Congress last week passed legislation to stem foreclosures for 400,000 homeowners and aid Fannie Mae and Freddie Mac, the two largest sources of US mortgage financing. President George W Bush may sign the bill into law this week.

The report said oversight of Fannie Mae and Freddie Mac was too weak.

'Part of the problem stems from the current regulatory framework, which has allowed their balance sheets to expand to their current systemic significance,' the IMF pointed out. -- Bloomberg, AP

Raffles City Bahrain Receives Good Response

Source : The Business Times, July 30, 2008

80% of the 124 units launched sold within three weeks, says CapitaLand

CAPITALAND has reported strong demand for residential apartments within the first Raffles City-branded integrated development in the Gulf Co-operation Council (GCC) region.

The property group launched private sales for the Tower 2 residential block in Raffles City Bahrain about a month ago. Eighty per cent, or 101 of a total of 124 apartments and penthouses, were booked within three weeks of the launch.

Buyers include high net worth individuals from the Middle East and Europe.

The units achieved an indicative average sale price of $6,330 per square metre (psm), exceeding the average price of $4,883 psm for other high quality residential apartments in Bahrain.

Lying within the man-made islands of Bahrain Bay, the Raffles City Bahrain integrated development will comprise three residential towers, landscaped sky villas, high-end retail, food & beverage facilities and five-star serviced residences.

CapitaLand also manages the Raffles City Bahrain Fund which owns Raffles City Bahrain. The fund closed in May 2007 at US$350 million and CapitaLand owns a 37 per cent stake in it.

'Entering the GCC countries is a strategic initiative we took in 2006 to balance our investments in the fast-growing economies in Asia. Raffles City Bahrain is our first move in this direction,' said CapitaLand president and CEO Liew Mun Leong.

'We expect to further grow our presence in the GCC region to capitalise on the abundant opportunities there.'

According to CapitaLand GCC Holdings Pte Ltd's CEO Wong Heang Fine, construction of Raffles City Bahrain is well underway and piling is more than 25 per cent complete. 'We are heartened by the successful private sales and are gearing up for the public launch targeted in October this year,' he said.

CapitaLand shares closed at $5.66 yesterday, 17 cents down.

Tuesday, July 29, 2008

House Prices Falling...Financial Markets Struggling......But US Economy Is Growing?

Source : The Straits Times, July 29, 2008

Is the US in recession? Tough call as GDP grows amid financial turmoil

NEW YORK - COULD this be the first US recession without a decline in economic output?

While house prices in America are tumbling, job losses growing and financial markets struggling with their worst shock in decades, the economy is expanding.

The Wall Street Journal in a report yesterday said economists are weighing the possibility of a United States in recession while enjoying economic growth.

The US economy is likely to show a growth rate of more than 2 per cent when the government gives its first estimate of the second-quarter performance on Thursday.

The country's gross domestic product (GDP) - its total output of goods and services - expanded at a 1 per cent pace in the first three months of this year, thanks to a rise in exports because of the falling US dollar.

This means a recession under the most common definition - two straight quarters of declining GDP - did not occur in the first half of this year.

But the non-profit National Bureau of Economic Research (NBER), which decides whether the US has slipped into a recession, uses a different gauge. It looks for 'a significant decline in economic activity spread across the economy, lasting more than a few months'.

Those gauges include GDP, incomes, employment, industrial output and retail and manufacturing sales, says the NBER's seven-member Business Cycle Dating Committee, which is composed mostly of economists from academic institutions.

The panel can declare a recession, even if GDP remains positive, based on other measures, said the Journal.

Most of those gauges have been especially weak in recent months and some are in outright decline, it said.

The job market, for instance, has been contracting all year and the government is expected to report on Friday that payrolls dropped this month, the seventh consecutive monthly decline.

Harvard University's Professor Martin Feldstein, president of the NBER until this month, told the Journal the US has been 'sliding into a recession' since January, when many monthly statistics peaked.

But a GDP decline is not necessary 'if there is enough other evidence that the economy is contracting', he said.

Whatever the case, the NBER committee will not be making the call any time soon. The 2001 recession went from March to November of that year, but the committee did not declare the start of the slump until November 2001 and did not call the end until 2003.

'We take our time,' Stanford University economist Robert Hall, chairman of the committee, told the Journal. 'We like to get things right.'

S'pore Developer Heeton Sees Overseas Projects Rise To 30%

Source : The Straits Times, July 29, 2008

HONG KONG - SMALL Singapore developer Heeton Holdings Ltd expects to do more property projects with JPMorgan, an executive with the company said on Tuesday.

Mr Danny Low, chief operating officer, said Heeton would push into overseas markets such as Thailand, Vietnam and China. He expects overseas projects to account for about a third of total revenue in 3 to 5 years times, compared to about 10 percent now.

The company's revenue was S$49.25 million in its 2007 financial year, up 6.2 per cent from the previous year.

Mr Low said a surge in Singapore property prices had allowed the company to record a growth margin of 100 per cent on its Lumos residential development in Singapore, where it had sold 19 of out its 53 units.

The company had just signed a deal with JPMorgan to jointly build a 28 apartment buildings in Singapore, and Mr Low was hopeful of more deals with the US investment bank.

'We hope to do more with them and on a bigger scale as well,' Mr Low said. 'JPMorgan's criteria is to work with a developer with a proven track record and they will start with a small project and then come in with more.'

The Singapore developer expects its revenue growth to grow 30 to 40 per cent annually this year and next year, thanks to soaring property prices in its home market.

'It will probabaly be 30 to 40 per cent,' Mr Low said. -- REUTERS

Builder Has Designs On Posh Condo Market

Source : The Straits Times, July 29, 2008

Heeton recruits style-setting design firm yoo for Grange Road apartments

A COMPANY once famed for its wet markets is now rubbing shoulders with one of the world's trendiest firms in a bid to build Singapore's most chic condos.

Heeton Holdings has roped in yoo - a design-focused property firm co-founded by French style-setter Philippe Starck and British developer John Hitchcox - for its 74 Grange Road project.

STARCK SIMPLICITY: A showroom designed by yoo, the 'Prada of the property industry', inspired by its co-founder Philippe Starck. The firm was behind Hong Kong's JIA hotel and has other residential projects in Thailand and Taiwan. -- PHOTO: YOO

It has also recruited investment bank JP Morgan, which will take a 45 per cent stake in the 28-unit condo.

But yoo does not come cheap. The 'Prada of the property industry' designed Hong Kong's JIA hotel and has hooked up with designers like Jade Jagger, daughter of Rolling Stone Mick.

Heeton is paying a flat fee of around $2 million, well over double the standard design fee, for the interior design of the units and the show suite, plus an undisclosed incentive bonus if yoo sells the units.

In return, yoo is offering a cutting-edge concept intended to draw buyers worldwide. 'This will undoubtedly set a new standard here. Our focus is to help developers achieve higher prices,' said yoo's London-based chief executive Chris Boulton. 'We do add value and ensure they sell in tough markets.'

Mr Boulton said that the firm's projects had achieved a premium of 10 to 30 per cent above market value by capitalising on innovative design and the yoo brand to drive more traffic towards the project.

'It's also about making more noise about the project' to raise its profile, he added.

Heeton's chief operating officer Danny Low said it recruited yoo to give the freehold condo an edge over others.

'The Singapore market is very competitive and buyers have become increasingly sophisticated. That is why we have to present a highly differentiated product for our targeted buyers, who are high-net-worth individuals and couples.'

These are the buyers who like spacious two-bedroom units of 1,600 to 1,800 sq ft or the two penthouses of 3,600 sq ft and 4,000 sq ft.

Heeton will meet yoo next week to discuss the design for the project.

This is yoo's first residential design job here and its services will be exclusive to Heeton until the middle of next year. It also has residential projects in Thailand and Taiwan.

The project will be launched late this year or early next year. Construction should start by the first quarter of next year.

Heeton declined to give a break-even price as it has yet to appoint a contractor. It bought Grange Court for $72.8 million or $1,706 psf per plot ratio, excluding development charge, in a collective sale last August.

Knight Frank, the sole marketing agent, helped introduce yoo to Heeton. Yoo's managing director for Asia, Mr Andrew Pang, used to work for Knight Frank.

Developer Collaborates With Starck For Luxury Residential Project

Source : Channel NewsAsia, 28 July 2008

Luxury-end private residences in Singapore are facing price pressures, and one developer hopes to get around that by having a famous brand-name designer work on its project.

Philippe Starck whose design works include the Eurostar

Heeton Realty – a joint venture between Singapore developer Heeton Holdings and JP Morgan – is counting on the collaboration with a company co-founded by well-known French designer, Philippe Starck, to draw in the buyers.

It is hoping that this marketing strategy will help sales at its upcoming development that is located just outside the prime Orchard Road area at Grange Road.

Danny Low, COO & executive director of Heeton Holdings, said: "For people who want to buy a brand, it's like buying a Mercedes Benz. If you want to buy a brand, you don't care what the market is. You want to be the first to own it and you must remember that Philippe Starck is a worldwide-acclaimed name."

The 28-unit development will have its interiors, common areas and landscaping exclusively designed by a company co-founded by Philippe Starck.

The collaboration with the French designer is costing Heeton Realty more than US$2 million. But developer believes it will be able to sell its units at a 15 to 30 per cent price premium over other properties in the area, despite the current slow sales in the high-end residential sector in Singapore.

Heeton Realty said it has seen strong interest from at least two serious buyers at this stage.

The joint venture is also planning for more developments here in the year ahead.

Bryan Southergill, executive director and head of Asia Real Estate, Global Special Opportunities, JP Morgan, said: "There's been some consolidation recently. We've got a global credit crisis unfolding right now.

"But in the long term, with the IR (integrated resorts), gaming, Marina Bay, F1, and everything else Singapore has going for it, there will be strong and stable demand for projects."

Construction on the luxury residential project will begin late this year or early 2009. - CNA/so

K-Reit's Distributable Income Up 173% To $14.2m In Q2

Source : The Business Times, July 29, 2008

K-REIT Asia said yesterday its second-quarter distributable income rose 173 per cent to $14.2 million, from $5.2 million a year ago.

Major boost: K-Reit's better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007

The better showing was mainly due to income from its one-third stake in One Raffles Quay, which was absent in Q2 2007. Distribution per unit rose 1.9 per cent to 2.18 cents, from 2.14 cents in Q2 2007.

Net property income for the three months ended June 30, 2008 rose 26 per cent to $9.2 million, from $7.3 million the year before.

K-Reit also saw better rental income, with higher rents achieved for new and renewed leases, as well as improved occupancy. The average gross rental rate for investment property held directly by K-Reit rose to $5.66 per sq ft in June 2008, from $4.28 psf a year earlier.

For the first half of 2008, distributable income rose 169.8 per cent to $25.6 million, from $9.5 million in 2007. DPU for the first six months of the year rose 0.8 per cent to 3.94 cents, from 3.91 cents in 2007.

The trust also reduced its leverage to 27.7 per cent at June 30, 2008, from 53.9 per cent at Dec 31, 2007. Based on a 60 per cent aggregate leverage limit, this provides K-Reit with an additional debt headroom of $680 million to fund acquisitions and for working capital. Based on K-Reit's existing portfolio, there will be no debt re-financing requirement until 2011, the trust said.

For the longer term, the trust's manager is establishing a medium-term note programme to allow the Reit to swiftly tap the debt capital market.

K-Reit is upbeat about its prospects, even though the global economy is slowing. Some 35.4 per cent of its tenants are from the banking, insurance and financial services sectors. Most of these tenants have lease terms of six years or more, and 'provide very stable income going forward', said Tan Swee Yiow, chief executive of the trust's manager.

Mr Tan pointed out that despite the weaker external environment, Singapore's office rents rose slightly in Q2 2008, reflecting the tight supply of space.

'Office rents will be supported by continued demand for prime office space as Singapore transforms itself into a global city and with spin-off multiplier effects from the two integrated resorts currently under construction,' K-Reit said in a filing to the Singapore Exchange.

K-Reit's stock closed unchanged at $1.40 yesterday. The stock has shed 29.6 per cent since the start of the year.

Australand Hit By Revaluation, Writedown

Source : The Business Times, July 29, 2008

CapitaLand's Aussie unit's half-year earnings slide 79% to A$25.6m

PROPERTY revaluation and project writedown have resulted in CapitaLand's Australian subsidiary, Australand, reporting a 79 per cent year-on-year fall in net profit to A$25.6 million (S$33.4 million) for the half-year ended June 30, 2008.

Earnings per stapled security for the period - based on profit attributable to the stapled security equity-holders - was 2.8 Australian cents, down from the year-ago period's 12.9 Australian cents.

Dividends/distribution per stapled security for the half year were maintained at 8 Australian cents.

Australand said that investment property assets had been revalued at June 30, resulting in a net reduction in asset value of A$7.3 million.

It also said that carrying values of residential assets had been reviewed in light of the current market conditions resulting in a writedown of A$34.7 million (net of tax).

The assets are located predominantly in Sydney which Australand says has continued to 'suffer more difficult market conditions with no improvement forecast in the short to medium term'.

Excluding the unrealised losses arising from property revaluations and the writedown to the carrying value of residential development projects, half- year operating profit rose 6 per cent on the prior year to A$67.5 million, said Australand. Earnings per stapled security, on an operating profit after tax basis, were 7.3 Australian cents, up from 6.9.

Australand, which has businesses in various property segments, reported that revenue from continuing operations rose 6 per cent to A$436 million for H1'08 from A$410.1 million for H1'07.

Commercial and industrial development profit before tax (PBT) was A$46.4 million for H1'08, up 93 per cent from A$24.1 million for the year-ago period.

Investment property PBT for H1'08 was A$64 million, up 20 per cent from A$53.5 million for H1'07, excluding asset sales and unrealised gains/ losses in property revaluations.

Residential development PBT for H1'08 of A$34.2 million was down marginally from A$34.3 million for H1'07.

As at June 30, the commercial and industrial business arm had a pre-committed forward workload of 374,000 sq m, down from 424,000 sq m at end-December 2007. Australand attributed the decline to the high level of construction delivered during H1'08.

Australand's investment property business comprises a portfolio valued at A$2.18 billion of 63 income-producing investment properties and a further 10 investment properties under development.

Australand said fixed rental increases within the portfolio average 3.3 per cent for the next 12 months and the portfolio has a weighted average lease expiry profile of 7 years.

For its residential business arm, Australand said that sales volumes were lower compared with the same period a year ago. However, operating margins remained consistent.

Australand had announced a non-underwritten one-for-one renounceable entitlement offer at 60 Australian cents per stapled security to eligible security-holders and CapitaLand has committed to taking up its full entitlement.

Depending on the remaining level of participation, Australand said the entitlement offer will provide between A$302 million and A$557 million of additional capital that will be used to reduce gearing and fund projects in its development pipeline.

Lum Chang Gets $65m From Selling 2 Belmont

Source : The Business Times, July 29, 2008

3 Singapore firms controlled by Indian investors are the buyers

LUM Chang Holdings has sold all 16 units of its newly refurbished 2 Belmont for a total sum of about $65 million, BT understands.

The price is said to be in the $1,600 to $1,700 per square foot range.

Refurbished: The price for the freehold property is said to be in the $1,600-$1,700 per square foot range

Lum Chang bought the property, formerly known as Belmont Gardens, in 2006 for $22 million and has refurbished the apartments. At the time, the asset comprised 15 apartments but Lum Chang had said that it would convert a penthouse into two separate units.

Now, the 16 units in the four-storey freehold property are being purchased by three Singapore-registered companies controlled by Indian investors. Eight units (on the first and fourth levels) were bought for a total $36.36 million by a company controlled jointly by Govind Sahai Gupta of Kolkata and Amit Gupta, a Singapore permanent resident.

Another company controlled solely by Ashok Gupta bought four units on the third floor for a total $14.33 million, while the third company, owned solely by Asha Khatoria of Jaipur - the Indian city famous for gemstones - bought all four units on the second floor of 2 Belmont for a total $14.31 million.

BT understands that 2 Belmont's sale has been inked but has yet to be completed.

CB Richard Ellis is understood to have brokered the deal.

2 Belmont has a site area of about 54,800 sq ft, and is located in a designated Good Class Bungalow (GCB) Area. This means that if the property is completely torn down and the site redeveloped, it can be redeveloped only into GCBs, accommodating perhaps three bungalows at most given the minimum GCB plot size of 1,400 sq m (15,069 sq ft).

'So it made more sense for Lum Chang to refurbish the asset instead of redeveloping it,' an industry observer suggested.

The sellers are entities controlled by Lum Chang.

According to Lum Chang's 2007 annual report, three Lum Chang subsidiaries inked deals in 2006 to sell four units at 2 Belmont to a director of Lum Chang.

'These sales are expected to be completed at any time before June 30, 2008, after the completion of the redevelopment of 2 Belmont. Full consideration for the sale of these four apartment units has been received,' Lum Chang's 2007 annual report said.

Back in May 2006, when Lum Chang bought Belmont Gardens, the company had said that managing director David Lum would buy four units.

Heeton Project Getting The Starck Treatment

Source : The Business Times, July 29, 2008

His firm will design interiors of Grange Rd property

HEETON Holdings and its joint venture partner JPMorgan Global Special Opportunities Group will build the world's first Philippe Starck-branded housing in Singapore.

Mr Starck: His company yoo will not have an equity stake in 74 Grange Road

The project will be built on a site that the partners acquired last year at 74 Grange Road for $72.8 million.

The development, expected to be launched around year-end, will now come under the design, marketing and branding direction of Starck's yoo Inspired by Starck, a company co-founded with UK developer John Hitchcock in 1999.

While yoo has about 25,000 units of branded housing worldwide, it will not have an equity stake in 74 Grange Road. Nor will it be the architect.

Instead, it will provide interior design services and specifications for the interior finishes and fittings of the proposed 28-unit project.

It may provide landscape design, and buyers of the units may be offered furniture design packages for their homes.

The JV partners also hope to ride on yoo's marketing and public relations expertise, as well as draw on its pool of high net worth clients.

Heeton chief operating officer and executive director Danny Low said that yoo's services will cost about US$2 million, including the use of the 'yoo Inspired by Starck' brand.

The named of the development is yet to be finalised.

Mr Low added: 'This will be yoo's first residential design project in Singapore, and yoo's design services for the Singapore market will be exclusive to this project until mid-2009.'

Chris Boulton, CEO of yoo, said that it expects to announce more projects in the region soon. There are already yoo projects in Hong Kong and Phuket, Thailand.

Mr Boulton said that based on earlier projects, yoo developments can fetch 10-30 per cent more than market prices. According to him, yoo branding can help generate faster sales 'and sell in tough times'.

Prices for units at 74 Grange Road have not been confirmed. The break-even price was previously reported to be about $2,500 per square foot.