Wednesday, January 2, 2008

Runaway Lawyer Zulkifli Amin - He Flew To Philippines And Billed His Firm

Source : The Straits Times, Jan 2, 2008

Lawyer may have also used part of missing $6m to pay costs of delayed property deals

bolted to the Philippines on an air ticket he did not pay for. It was billed to his law firm.

As more details surface from efforts to trace more than $6 million that went missing when he vanished in November, it has also emerged that he may have used some of the money to settle costs incurred from delayed property deals.

Mr Zulkifli, 33, a lawyer for about seven years, was one of three partners in law firm Sadique Marican and ZM Amin. His partners alerted the authorities when he disappeared and a police probe is ongoing.

He headed the firm’s conveyancing and real estate department. The Straits Times understands that as the property market took off last year, he took on more work than he could handle.

He had more than a dozen secretaries who processed and handled clients’ matters, said a staff member who resigned recently. Typically, a lawyer would have up to five assistants to cope with similar property-related work.

It is believed that some of Mr Zulkifli’s transactions stalled when he could not complete his work on time and there were penalties to pay for the delays.

One such transaction is believed to have led to a $200,000 penalty for a property valued at $700,000, after a delay caused the seller to offer the property to another buyer at $900,000.

A property seller who lost money on a deposit due to him from Mr Zulkifli alleged that the lawyer dipped into some other client’s monies in the firm’s account to fork out the difference and make the original deal stick. Such payments are not allowed and as his troubles piled up, they may have snowballed.

The current rules are that two lawyers must sign cheques to withdraw money from a client’s account for any amount exceeding $30,000, among other things. It appears that Mr Zulkifli acted alone and may have forged the second signature or perpetrated some other fraud.

It is believed the $6 million disappeared as he kept ‘rolling’ money to pay penalties, but it is unclear how much he kept for himself before he fled.

More than a dozen people have reported that their deposits with the firm’s conveyancing section went missing.

It is understood investigators are now trying to establish the extent of unauthorised payoffs he made, and attempts are expected to be made to reclaim these monies.

Meanwhile, the firm remains open for business at its premises at the HDB Hub in Toa Payoh Central. Only the conveyancing section was affected by Mr Zulkifli’s disappearance.

‘We’ve secured the interests of all the affected clients and our other work is going on,’ partner Sadique Marican said, when contacted by The Straits Times.

Two victims said they would give the firm more time to settle the outstanding amounts owed.

Mail company manager John Sasayiah, who lost some $26,000 in deposits, said: ‘We want to be fair to them but, at the same time, I hope to see some closure by this month.’

Mr Zulkifli, a bachelor, lived at his family home in Chai Chee until about two years ago. He and his younger sister moved out after their mother died of cancer in 2005. Their father had died earlier.

‘The family kept to themselves and hardly mixed with anyone,’ said a neighbour who had lived in his block in Chai Chee Street for more than 20 years.

‘Even when their mother died, we did not know.’

Ruling On Rental Income Cheers Serviced Apartment Operators

Source : The Business Times, January 2, 2008

But IRAS files appeal with High Court against tax review board’s ruling.

In a landmark decision, the Income Tax Board of Review has ruled that a serviced apartment operator’s rental income should be treated as normal recurrent business income, and not as income from property investments.

This means that serviced apartment operators can claim deductions on expenses and capital allowances beyond the actual income for the year.

The Dec 14 ruling came after the company, believed to be part of the Frasers Centrepoint group, appealed against an earlier ruling of the Inland Revenue Authority of Singapore (IRAS). The latest ruling will have significant implications for not just serviced apartment operators, but also for the operators of the future integrated resorts.

Earlier, IRAS had contended that serviced apartment owners and operators were merely in a business of letting property, and in a ‘business of making investment’ under Section 10E of the Income Tax Act.

Section 10E says that a business which makes investments, including the ‘letting of immovable property’, cannot claim deductions on expenses and capital allowances beyond the actual income for the year.

The tax implication is that any losses sustained for one year will not be allowed to be carried into the following year, as is the case for an ordinary trade or business where losses are generally allowed to be carried forward.

The Board rejected IRAS’ contention that the serviced apartments and the retail mall businesses are businesses of making investments under Section 10E.

Unlike serviced apartment, hotels in Singapore are allowed to carry forward losses.

Industry insiders say the ‘Section 10E’ treatment has troubled the industry for a long time.

As the range and sophistication of services have increased over the years with top-end serviced apartments offering a myriad of products and services, this unequal treatment has become increasingly untenable, they say.

Not surprisingly, many see this as a test case for the industry.

The Board of Review’s decision will also no doubt be welcomed by serviced apartment operators, who argue that it is the correct approach in looking at serviced apartments as a ‘multi-factorial’ one.

The appellants’ counsel, tax lawyer Ong Sim Ho, successfully argued that whether a business was one of making investment had to be determined in the light of all the surrounding facts, including evidence of the intention of the enterprise in embarking on the venture.

He said that where the letting of property was a mere but necessary platform from which business operations are carried out, Section 10E should not be applicable if those business operations constituted the real business of the taxpayer. He urged the Board to consider the wide range of hospitality services provided to the apartment guests.

The Board agreed that the serviced apartment- cum-shopping mall business should be looked at as an integrated whole.

The decision is likely to cause a re-examination of the approach to taxation of serviced apartments generally.

The IRAS has filed an appeal against the decision to the High Court.

Government Will Continue To Monitor Residential Property Market

Source : Channel NewsAsia, 02 January 2008

The government will continue to monitor the residential property market in a bid to ensure that prices remain stable, according to National Development Minister Mah Bow Tan (Picture).

He was responding to questions from reporters on Wednesday for his outlook for the property sector in 2008.

He noted that the government had taken measures last year to cool the sector, but also said that there are external factors at play in 2008.

Mr Mah said: "It's not my job, neither is it my ability to predict prices. All I can say is that we monitor the price situation very carefully and over the past months, the government has taken several steps to try to cool down the strong speculative fervour that was taking place earlier in the year. Those are the internal factors.

"As you know, there are also many external factors that could affect property prices. Those are external factors which are beyond our control, so we don't really know how the sub-prime crisis is going to pan out. We don't know what's going to happen to the American economy this year.

"What we do know is for Singapore and we are optimistic that we will continue to do well. It's up to us to keep a close eye on the market to ensure prices remain stable and move in tandem with the economy." - CNA/so

Redevelopment Site Along Changi Road Up For Sale By Tender

Source : Channel NewsAsia, 02 January 2008

A redevelopment site along Changi Road spanning 26,500 square feet is up for sale by tender.

The site can be redeveloped into a hotel or commercial development with a plot ratio of 3, giving a maximum gross floor area of about 80,000 square feet.

Civil engineering and property development firm Koh Brothers, which is selling the site, is asking for S$55 million.

This excludes a development charge of S$12.5 million which the successful developer will have to fork out.

The price works out to about S$850 per square foot per plot ratio.

The tender exercise will close at the end of this month. - CNA/ms

Chip Eng Seng To Develop 2 Projects In Ho Chi Minh City

Source : Channel NewsAsia, 02 January 2008

Mainboard-listed construction firm Chip Eng Seng is expanding its footprint in Vietnam with two residential projects in Ho Chi Minh City.

The projects are expected to cost a total of S$180 million and will be undertaken with local partners.

One is a condominium development comprising three 18-storey blocks, yielding a total of 780 units. This will be built on a 23,000 square metre site.

Chip Eng Seng will have a 20 percent stake in this project.

The second development is on a 7,000 square metre parcel. It will consist of three 21-storey blocks of more than 450 units.

Chip Eng Seng will provide project management and consultancy services for both projects.

The developments are expected to be launched in the second half of the year.

The construction and property group said it is looking to undertake bigger projects that involve integrated planning.

Besides residential developments, it will also consider hotels, commercial and retail properties. - CNA/ms

Private Residential Prices Up 6.6% In Fourth Quarter

Source : Channel NewsAsia, 02 January 2008

Private residential property prices rose by a slower pace in the fourth quarter - up 6.6 per cent compared with the previous three months.

Meanwhile resale prices for public housing or Housing and Development Board flats grew by 5.6 per cent in the fourth quarter.

That's also at a slower pace, down from 6.6 per cent in the previous quarter.

Analysts believed this was due to the uncertainty over the economic outlook and the government's measures to cool the property market.

Prices of private residential properties continued to climb in the final quarter of last year, but at a slower rate and analysts said this was not totally unexpected.

Nicholas Mak, Director of Knight Frank, said: "The figures are quite in line with our expectations - we expect prices to continue to expand but at a slower pace - this is because 2007, the private home prices (rose) at a very fast rate and we think that this is not sustainable.”

He added: “Going forward 2008 and 2009 we expect (that it) will continue to expand but at a slower and more sustainable growth."

Prices rose by about 7 per cent across the board, but it is those outside the core central region that's taking the lead, with a 7.5 per cent climb.

This includes areas such as Bukit Batok and East Coast.

The core central region saw seven per cent growth, rest of central region was 7.3 per cent, and outside Core Central Region 7.5 per cent.

Analysts said this trend of rising prices in outlying areas is likely to continue into 2008.

Donald Han, Managing Director of Cushman and Wakefield, said: “Well I think if you look at the statistics itself, most of the price increase that we have been seeing is from outside of the central region as well as the fringe area which dominated in the price increase over the last six to 12 months.”

He added: “On top of that I think we are also seeing some re-investment money coming from those who are affected by the collective en bloc - looking into downsizing - looking at outlying areas in terms of affordability."

Private residential home prices rose by 31 per cent in 2007.

Meanwhile, HDB resale prices grew by 5.6 per cent in the fourth quarter, taking the total climb for the year to 17.4 per cent. -CNA/vm

Singapore Growth Slows To 6.0% In Fourth Quarter: Ministry

Source : Channel NewsAsia, 02 January 2008

Singapore's economy grew at a slower-than-expected 6.0 per cent in the fourth quarter, pulled down by falling manufacturing output, the government said on Wednesday.

Economists had expected growth of 7.0-8.5 per cent for the last three months of the year.

The estimate for real gross domestic product (GDP) growth, compared with the same period a year earlier, meant a moderation from the revised growth figure of 9.0 per cent seen in the third quarter, the Ministry of Trade and Industry said.

"Growth of the Singapore economy moderated in the fourth quarter of 2007," it said.

On a quarter-on-quarter seasonally adjusted annualised basis, real GDP fell by 3.2 per cent in the quarter compared with a 4.4 per cent gain in the preceding quarter, reflecting a slowdown in the manufacturing sector, the ministry said.

The figure marks the first quarter-on-quarter decline since the first three months of 2005, according to an AFP review of data.

The trade ministry said growth in the manufacturing sector is estimated to have slowed from 10.3 per cent in the third quarter to 0.5 per cent in the last three months of the year.

"This was largely due to a fall in the output of the biomedical manufacturing cluster as some active pharmaceutical ingredients were not produced," the trade ministry said.

Transport engineering, which includes oil rig manufacturing and ship repair, continued to show double-digit growth, while the construction sector is estimated to have expanded strongly by 24.4 per cent in the fourth quarter, up from the 19.2 per cent third-quarter growth, it said.

Growth in the service sector was steady at 8.3 per cent.

Singapore's economy grew 7.5 per cent in 2007, marking the fourth straight year of strong growth, Prime Minister Lee Hsien Loong said in his New Year message.

The figure for 2007 economic expansion was at the lower end of the government's upgraded full-year growth target of 7.5-8.0 per cent, and was below the 7.9 per cent recorded for 2006.

Mr Lee forecast growth of 4.5-6.5 per cent for Southeast Asia's most advanced economy in 2008.

The advance GDP estimates are computed largely from October and November data. More detailed figures for the quarter and for the full 2007 year are to be released in February.

GDP is the value of all goods and services produced in the country. - AFP/ac

Govt Considers Tightening Eligibility Criteria For HDB Rental Flats

Source : Channel NewsAsia, 02 January 2008

As there are not enough rental flats in Singapore, the government may tighten the eligibility criteria to ensure that rental units go to those who need them most, according to National Development Minister Mah Bow Tan.

He added that the Housing and Development Board (HDB) will also beef up the supply of rental flats over the next two years to meet rising demand.

There are over 40,000 rental flats in Singapore and most of the 1- and 2-room units are home to needy families with an average monthly household income of below S$1,500.

The monthly rental for a 1-room flat is about S$30, while a 2-room unit goes for about S$60.

HDB said the demand for such subsidised flats has risen over the years. Currently, over 3,000 applicants are on its waiting list and it could take between 5 and 11 months before they get a unit.

Touring new rental flats in Woodlands, Mr Mah said: "Theoretically, you could have sold your bungalow and join the queue for an HDB rental flat because you are a retiree – you have zero income so you meet the average household income criteria.

"But there may be other criteria that may not be tenable for you to join the HDB rental queue. These are some of the things that we need to look at. Currently, it's a very straightforward income criteria."

Mr Mah added that there has been an increase in the number of divorcees and elderly who want to monetise their assets and join the queue to rent flats.

But there are other options to unlock the value of their flats – one way is through the new Lease Buyback Scheme. Details of this initiative will be announced in March.

To ease the supply crunch, the HDB will also put out more rental flats. Its first batch of 180 newly converted rental flats in Woodlands is now ready to be allocated.

Built in 1987, the vacant block of 3- and 4-room flats was converted last April to house 1- and 2-room units.

The new rental flats are equipped with barrier-free access facilities like wheelchair-friendly lifts.

Moving around will be easier too, with ramps leading right to the doorstep. There are also low-lying switches and retrofitted toilets in the flats to cater to the disabled and the elderly.

The HDB will roll out another 748 rental flats in Boon Lay in March and 290 units in Redhill by early 2009.

In 2010, HDB is also expected to build 976 new rental flats in Choa Chu Kang, Sembawang and Yishun. - CNA/so

S'pore Private Home Prices Up 31% In 2007 Despite Slower Q4 Gain

Source : The Straits Times, Jan 2, 2008

Resale prices of HDB flats also rise by 17.4% for the year, in tandem with robust economy

PRICES of Singapore's private homes rose by 31 per cent in 2007, while that for Housing Board resale flats went up by 17.4 per cent, as the property market rebounded after years of sluggish growth.

But for the fourth quarter, prices of private residential property went up at a slower pace of 6.6 per cent compared with 8.3 per cent in the previous quarter, according to flash estimates of the price index for private residential property released by the Urban Redevelopment Authority (URA) on Wednesday.

Related Video Link -
Many factors can affect property prices: Mah

Development Minister Mah Bow Tan said that while it is too early to speculate on how private residential prices would move in the coming months, the Government will still keep its eye on the market and put in place measures to keep prices stable.

Mr Mah was speaking to reporters after touring some newly converted rental flats in Woodlands.

Separate flash estimate released by Housing Board also on Wednesday showed that resale prices of HDB flats went up by 17.4 per cent for the year, in tandem with improved sentiments and economic growth.

The fourth quarter HDB's Resale Price Index rose to 121.6 points, an increase of 5.6 per cent over the previous three months.

The URA, which oversees land use planning, said the fourth quarter figures were based on preliminary data.

The flash estimates showed that the increase in prices of non-landed private residential properties was higher in the suburban regions than the central prime areas.

Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector. -- PHOTO: PRESIDENT'S DESIGN AWARD

They went up by seven per cent in the Core Central Region, 7.3 per cent in the Rest of Central Region and 7.5 per cent in Outside Central Region in the last quarter.

In comparison with the third quarter, prices of non-landed private residential properties rose by 8.3 per cent in the core central region, and 7.9 per cent respectively in the other two regions.

The flash estimates are compiled based on transaction prices given in caveats lodged during the first 10 weeks of the quarter, supplemented by information on the number of new units sold.

The statistics will be updated four weeks later when URA releases the full fourth quarter 2007 real estate statistics, when more data on the caveats lodged and the take-up of new projects are captured.

On the supply side, the URA said there are about 65,400 private residential units in the pipeline, of which about 41,600 new private housing units are expected to be completed between 2008 and 2010.

About 38,000 units of the supply in the pipeline (or 58 per cent) have not been sold by developers yet. This does not take into account new sites that will be made available for development through the Government Land Sales (GLS) programme.

The HDB is also increasing the supply of new flats under the Build-to-order system and the release of Design, Build and Sell Scheme (DBSS).

Both the URA and HDB said they will continue to monitor the market situation and property prices closely.

Singapore's property sector saw record prices paid by developers for older condominium sites as they rushed to redevelop them into new units to meet robust demand during the year.

Data showed prices are within sight of peaks reached in 1996, before a regional financial crisis struck and sent the sector into the doldrums.

Singapore's property sector finally began to turn around after the government in 2005 gave approval for two multi-billion-dollar casino-entertainment complexes.

Strong economic performance and efforts to woo the cash of wealthy foreigners also helped to perk up the sector.

6 Percentage Point Reduction In CPF Housing Withdrawal Limit From Jan 1

Source : Channel NewsAsia, 01 January 2008

The CPF housing withdrawal limit for buying houses will be reduced by six percentage points from 1 Jan 2008.

It will be cut to 120% of the valuation limit, down from 126%.

Related Video Link -

The CPF housing withdrawal limit is being reduced to ensure that Singaporeans have enough savings when they retire and also for health care.

It was introduced in 2002 - at 150% of the valuation limit.

Analysts said the reduction is unlikely to have much impact for buyers and sellers.

"While it does result in lesser CPF to be used for buy housing, the impact on the market is not significant. But it does make people a little bit more careful when it comes to calculations over the long term," said Eugene Lim, Assistant VP, ERA Realty Network.

"The impact on the mid-tier and high-end market is likely to be very limited because home buyers in this segment rely very little on CPF financing," said Nicholas Mak, Director of Consultancy and Research, Knight Frank.

According to analysts, it's hard to predict if prices will rise or fall. But one thing they agree on is that the six percent reduction in the CPF housing withdrawal limit will not have an impact on prices.

Industry watchers remain confident that the market will continue to be healthy, although they expect the figures from the final quarter of 2007 to be slightly lower.

About 70 private developments are expected to be launched in the first quarter of 2008.

"I expect the market to continue to remain healthy although the rate of growth in price appreciation and rental appreciation would probably be a bit more tapered, a bit more moderated compared to what we've seen one year ago," said Mak.

However, the US sub-prime issue and the possibility of a recession in the US market are likely triggers for a slowdown in the housing sector here.

But many in the industry remain confident. - CNA /ls

Bank Lending In November Hits Record Pace Too

Source : The Business Times, January 1, 2008

DOMESTIC bank lending here grew at another record pace in November, despite the breather seen in the property market that has led to a momentum slowdown in related loans.

According to preliminary data released by the Monetary Authority of Singapore, total property-related loans - including housing loans and lending to building and construction businesses - grew at a monthly pace of 1.4 per cent in November, from 3.2 per cent in October. On a yearly basis, however, property-related loans rose 19.3 per cent to $107.2 billion.

Such loans continued to boost banks' lending business here, which chalked up total loans and advances of $226.5 billion in November. This is 16.3 per cent higher than in November 2006 and the fastest rate of total bank loan growth in more than 10 years.

Lending to building and construction firms jumped 29 per cent to $34.5 billion. This is the highest growth rate since 1995, when loans in this category were bursting above the 30 per cent growth mark as the market experienced a rise in property investments.

In the same month, home buyers borrowed $72.7 billion, or 15.2 per cent more than in the year-ago period. This is, however, faster than the 14.3 per cent growth rate seen in October.

Total loans to businesses went up 19.4 per cent to $121.5 billion, while consumer loans rose 12.9 per cent to $105 billion.

Lending to most business segments saw growth. Transport, storage and communication firms borrowed 40.9 per cent more than a year ago, or a total of $9.1 billion in November. Borrowing by business services companies surged 36 per cent to $4.7 billion, while that by financial institutions and general commerce firms went up 19.1 per cent and 10.6 per cent respectively, to $28.2 billion and $22 billion.

On the other hand, manufacturing firms borrowed less. Loans in this segment continued their eighth month of year-on-year decline, falling 4.4 per cent to $10.4 billion. Loans to businesses engaged in agriculture, mining and quarrying also fell 14.8 per cent to $287.5 million. Within consumer loans, share financing lending registered the biggest growth, at 53.6 per cent, to $1.3 billion.

I Can't Afford Top-Up Cash

Source : The Electric New Paper, January 02, 2008


Buyers have to pay a premium of at least $7,000 cash for 3-room flat even in outlying areas

SHE wants to buy a house but is stuck with a real problem.

Ms Manay, seen with her mother. - Picture: Gavin Foo

Ms Lynn Manay does not have enough cash to pay for the cash-over-valuation (COV) amount her seller is demanding.

That's the cash difference between the property's valuation and the asking price. It is the premium sellers ask for in a bouyant market.

And with the current booming HDB resale market, it means COV prices can now hit new highs, said industry watchers.

So for those in the market looking to buy a resale HDB flat, it is becoming a pretty frustrating affair.

Ms Manay, a cashier, who makes about $900 a month, can afford to buy and service the loan for a three-room HDB flat, but she's unable to fork out the COV amount for that same flat.

Ms Manay, 25, was willing to pay about $150,000 for a three-room HDB resale flat in Bukit Batok, but the buyer wants about $20,000 above valuation for the flat.

This means the selling price for the flat is about $170,000.

Said Ms Manay: 'How can I afford to pay $20,000 in cash for the flat?

'I don't have that kind of money. It's very stressful looking for a flat these days.

'I've been looking for three-room flats in the resale market in many areas and the sellers are asking for high top-up amounts.

'I've calculated that I'll need to top up at least $10,000 cash to buy a place now.'


Ms Manay, who is single, is planning to buy the flat with her mother.

The two of them do not qualify for a HDB subsidised flat, hence they have to look at the resale market.

Her mother, 54, has been separated from her husband for 19 years and they have not finalised their divorce.

Ms Manay said she doesn't know where her father is now.

She's currently living with her brother and his wife in a four-room HDB flat in Bukit Panjang.

But the brother has sold his flat because of financial difficulties and will be moving in with his in-laws by February next year.

Added Ms Manay: 'I've been calling property agents for the last three months and they said that I've to top up cash if I want to buy a place.

'I can only pay at most $5,000 cash and even that, I've to borrow from friends and relatives.

'Even if I want to rent a place from HDB, I've to wait for at least a few months and I need a place urgently.'

While she can always rent a place first, the market rental rate for a three-room flat at about $1,200 per month is a big deterrent.

She said: 'I'll rather use that money to pay for a mortgage for a place. To pay about $1,000 for rental is not cheap, and that doesn't include utilities and furniture.'

The current high COV prices is reminiscent of the property bull-run in the mid-1990s, when buyers have to pay a huge premium over the valuation for HDB flats.

Executive apartments in Bishan, for instance, routinely found buyers who were willing to pay more than $100,000 above their valuation, according to a Straits Times report in 1995.

Today, be prepared to pay a premium of at least $7,000 cash for a three-room flat in outlying Choa Chu Kang and similarly for a five-room flat in Yishun, according to HDB's third quarter median COV figures for resale flats.

And that's just for flats in the outlying areas.

The highest COV paid last quarter was a whopping $91,500 for a five-room flat in the central area.

The executive director of HSR Property Group, Mr Eric Cheng said that his firm has received letters from the public asking if they are selling flats with just a $5,000 premium or no upfront cash.He said: 'I've to tell them that I don't have such flats at the moment.

'For those buying a resale flat today, they have to pay upfront cash above valuation. The property market has strengthened, the economy is doing well and it's a sellers market now.

'You can't buy a resale flat now if you don't have money. It's not just the COV, you've to think about paying for property tax, agent's fee and renovation too.'

He advised Ms Manay to rent if she can't afford a place now.

The limited HDB flat supply is expected to improve with over 7,000 new flats to be launched in the next seven months.

This means that the COV situation will improve, said Mr Cheng.

He added: 'Those who want to buy resale flats but can't pay the COV can perhaps wait for next year when a lot of HDB flats will be launched.

'By then, the COV should be more reasonable.'


How can I afford to pay $20,000 in cash for the flat? I don't have that kind of money. It's very stressful looking for a flat these days.
- Ms Manay

New Industrial Sites Offered In First Half Of 2008

Source : The Straits Times, Jan 1, 2008

Land release to keep up supply, ease pressure on business costs.

ONE new industrial site - in Woodlands - will be put up for tender early this year, while three in north and central Singapore will be open for applications.

The land release, announced by the Ministry of Trade and Industry yesterday, is designed to keep up the supply of land and take some of the pressure off business costs.

All four plots listed yesterday come with 60-year leases.

A 1.68ha plot in Woodlands Industrial Park is on the confirmed list and will be put up for tender in May.

Another three - a 1.14ha site in Ubi Avenue 4, a 0.54ha site in Kallang Pudding Road and a 0.8ha plot in Serangoon North Avenue 4 - will go on the reserve list in the first half of the year. These will be put up for sale only if a potential buyer commits to bidding a minimum price acceptable to the Government.

Apart from these plots, there are four others - in Yishun Avenue 6, Toh Tuck Avenue and Ubi Avenue 4 - already available for developers to bid on.

Property consultants said the latest list was a good mix of locations to meet demand for industrial space, but some pointed out that the amount of land had shrunk from previous programmes.

In the first half of last year, the Government put out a total of two sites on the confirmed list. This meant the sites were put up for tender at specific dates. It also offered another two sites under the same conditions in the second half.

The head of Knight Frank’s research and consultancy, Mr Nicholas Mak, said the Government is probably toning down as there is enough potential supply out there.

Mr Donald Han, the managing director of Cushman & Wakefield, expects demand to come from two areas: companies that have been forced out of their office premises on the fringes of the Central Business District because of rising rents; and firms bearing the brunt of rising rents within existing high-end industrial parks.

The latter, he said, would be looking to buy their own premises to lock in property costs.

Rents in districts like Alexandra Technopark have risen from about $3 per sq ft (psf) to more than $4 psf now and may continue heading northwards this year, Mr Han said.

‘We will see spillover demand coming out of high-tech parks and going into industrial space,’ he said.

He predicted that the new sites in well-located areas like Kallang Pudding and Toh Tuck would see the most action, especially from developers wanting to build multi-user facilities and sell them on a strata-title basis.

But he has also urged the Government to put out more sites around more centrally-located areas like Paya Lebar, Kallang and the Lower Delta area, which are popular for their accessibility.

‘The sooner we get this out, the sooner supply will meet demand,’ added Mr Han.

Savills’ industrial director, Mr Dominic Peters, felt there was some demand for industrial sites up north, but there could be a mismatch in supply due to the nature of the sites being offered.

The new 1.68ha Woodlands plot put up for tender, for example, may be too small for companies looking for premises on the ground floor.

Mr Peters said developers would need at least 2ha to 3ha to build efficient ‘ramp-up’ buildings, which give each industrial unit in a multi-storey building ground-floor access via giant ramps.

Still, he expected demand for industrial sites to be ‘good’ for the next one to two years.

Industrial Land Sales Slate Hints At Slowdown

Source : The Business Times, January 1, 2008

MTI puts only one site on confirmed list, although it keeps 7 sites on reserve list.

THE Ministry of Trade and Industry (MTI)’s industrial land sales programme for H1 2008 seems to reflect a slowdown from the preceding programme for H2 2007.

MTI is releasing just one site through the confirmed list in the latest slate, a 1.68 hectare site at Woodlands Industrial Park that can be developed into a project with a maximum gross floor area (GFA) of 42,000 sq metres.

In contrast, the H2 2007 programme had two confirmed list sites with a total maximum potential GFA of 156,900 sq metres.

Both sites have been sold. The government launches tenders for confirmed list sites according to a prestated schedule, regardless of demand.

And although MTI is sticking to seven reserve list sites - these are launched only upon successful applications by developers - for H1 2008, the 174,570 sq metres maximum GFA they can potentially yield is slightly lower than the 190,800 sq metres that can be generated from the seven reserve sites in the H2 2007 programme.

‘Perhaps the MTI’s slowdown in industrial land sales reflects its own outlook of slower economic growth for 2008,’ a senior property consultant suggested.

Agreeing, another veteran consultant, Colliers International managing director Dennis Yeo, said: ‘They probably want to moderate industrial land supply because economic growth is likely to be slower in 2008. Nevertheless, the reserve list for H1 2008 having seven sites will ensure there’s sufficient supply - if developers and industrialists identify demand for them.

‘The reserve list method of supplying land is market-led rather than force feeding the market, which is what the confirmed list can sometimes be,’ Mr Yeo said.

The latest slate of reserve list sites comprises three new plots at Ubi Ave 4, Kallang Pudding Rd and Serangoon North Ave 4, and four sites which are being rolled over from the H2 2007 reserve list - comprising two plots at Yishun Avenue 6, and a site each at Toh Tuck Avenue and Ubi Ave 4/Ubi Road 2.

Among the newer sites, property consultants ranked the ones at Ubi and Kallang Pudding as the choicest. Savills Singapore head of industrial Dominic Peters observes that all three new reserve sites are relatively small plots (ranging from 0.54 hectare to 1.14 hectares in land area) and expects them to attract strong response.

‘The best would be the Kallang Pudding and Ubi sites; they’re likely to fetch around $55-60 per square foot per plot ratio’, citing their location in the central part of Singapore and assuming they are close to the Circle Line MRT Stations.

Colliers’ Mr Yeo predicts the Kallang Pudding and Ubi plots may fetch much higher prices - $70-100 psf ppr. ‘If the sites are within close proximity to the new Circle Line MRT Stations, the timing of their development would be just right,’ he added.

Seven of the eight sites in the latest slate are being offered on 60-year leasehold tenure, while the reserve list plot at Toh Tuck Avenue has a 30-year leasehold tenure.

With the exception of the Woodlands Industrial Park plot which is zoned Business 2 (B2), the other seven plots are zoned for Business 1 (B1) meaning they can be developed for a range of clean and light industrial, and warehouse use.

B2 sites can be used for B1 purposes as well as for general industrial use.

A Year Of Mixed Results For Property Firms

Source : The Business Times, January 1, 2008


IT WAS a year in which property prices soared and the earnings of property companies surged with them.

But the government's move on Oct 26 to discourage speculative buying by withdrawing the deferred payment scheme for private property purchases led to a steep fall in the share prices of Singapore developers in November and December, wiping out most of their gains earlier in 2007.

Most have not recovered, which means any gains in their market value over the year were lacklustre compared with advances of more than 80 per cent for the largest Singapore developers in 2006.

Among the bigger developers, GuocoLand saw its market value grow the fastest in 2007 - both in dollar and percentage terms.

Its market capitalisation rose from $1.72 billion at the end of 2006 to $5.01 billion at the end of trading yesterday - an increase of almost three times.

By contrast, CapitaLand, the largest developer here, ended the year with a market cap of $17.6 billion, just 2.1 per cent higher than at the end of 2006.

City Developments, the second-largest developer here, saw its market cap rise 11.8 per cent during the year to $12.9 billion.

Keppel Land's market cap rose just 5.6 per cent to $5.24 billion, while UOL Group's market cap rose 4.3 per cent to $3.6 billion. Singapore Land saw its market cap shrink 7 per cent to $3.3 billion.

Some of the smaller developers did turn in big gains. SC Global Developments, for example, saw its market cap rise from $372 million to $956 million during the year.

Overseas developers listed here also saw larger gains. Hongkong Land, a commercial developer in Hong Kong, saw its market cap grow 17.2 per cent to $16.4 billion.

And Yanlord Land, a mainland Chinese developer listed here, saw its market cap rise 47.1 per cent to $6.01 billion.