Sunday, February 3, 2008

Singapore's GIC To Buy Westin Hotel Tokyo For US$723m

Source : Channel NewsAsia, 03 February 2008

TOKYO: The Government of Singapore Investment Corp (GIC) has agreed to buy the Westin Tokyo luxury hotel for 77 billion yen (723 million US dollars) from Morgan Stanley, a newspaper said Sunday.

The parties have reached a basic accord on the purchase of the land and the building located in Tokyo's high-end residential and commercial district of Ebisu, the Nikkei business daily said.

They plan to complete the deal by late February, the newspaper said.

GIC will likely have the hotel continue its current operations and aim to increase the asset's value by making it a long-term investment.

The purchase indicated that Japan's real estate market is relatively attractive though other ones around the world are suffering from the US mortgage crisis, Nikkei said.

GIC is one of the world's largest sovereign wealth funds, with more than 200 billion US dollars in assets under management, the report said.

In December and January, GIC made large investments in UBS AG of Switzerland and Citigroup Inc of the United States. Last year, it acquired Hawks Town, a commercial complex in Fukuoka Prefecture, western Japan.

Morgan Stanley purchased the Westin Tokyo for about 50 billion yen from Japanese brewer Sapporo Holdings Ltd in 2004. - AFP/ac

Dubai's Iconic Projects Boost Its Tourism Industry

Source : Channel NewsAsia, 03 February 2008

DUBAI: Iconic projects around Dubai belied its ambition to turn barren desert into a world class destination.

The Palm Jumeirah, fanning out into the Arabian Gulf, is hailed as a symbol of Dubai's growth, innovation and vision for the future.

Palm Jumeirah

It is one of the world's largest man-made islands, covering 560 hectares or more than 600 football fields.

Built entirely on reclaimed land, it is also the smallest of three Palm Islands.

The Singapore delegation, led by Senior Minister Goh Chok Tong, was briefed on Sunday on the development which will be home to over 8,000 residents from 70 nationalities when it is completed.

The first-phase properties – 4,000 in total – were sold within 72 hours of the initial sales release. Its developer said the average premiums on properties are between 70 percent and 120 percent, with some reaching up to 300 percent.

In about six years, premier resorts like 'Altantis, The Palm' will also take their places on the island.

Mr Goh visited the Mall of the Emirates which is presently the largest shopping complex in Dubai. The upcoming Dubai Mall will take the top spot when it is ready in 2009.

Mall of the Emirates boasts Middle East's first indoor ski resort where patrons can ski or snowboard in a safe environment.

Ski Dubai is completely insulated, with temperature kept at about minus 2 degrees Celsius. It has five different runs of varying difficulty and length of up to 400 metres. 27 snow guns spray a mist of water and air, creating snow flakes in the process.

Another hot property is Downtown Burj Dubai, slated to be the world's tallest building at over 700 metres high. The final height is a closely guarded secret to prevent new buildings from topping its feat.

There, Mr Goh toured serviced apartments – a component of Burj Dubai alongside retail shops and the Armani Hotel.

The delegation also visited the Souk Al Bahar, a stylish leisure and retail attraction in the Old Town Island, right in the heart of the Downtown Burj Dubai development.

Earlier, Mr Goh paid a visit to the Dubai Healthcare City – an integrated hub which provides quality healthcare services, medical education and research. - CNA/so

Berlin Edges Towards Property Boom Second Time Round

Source : The Sunday Times, Feb 3, 2008

BERLIN - SOME of the cheapest housing of any major European city is attracting a wave of foreign buyers to the German capital, promising a new property boom after a false start after the fall of the Berlin Wall nearly 20 years ago.

Buyers from Britain, Scandinavia, Ireland and the United States are leading the rush to snap up flats in the once-divided city, making the 12 months up to November last year the busiest on the property market since World War II, estate agents say.

Foreigners were responsible for 70 per cent of the transactions, the German federation of estate agents said, with Danes spearheading the march. The interest is so high that Danish estate agents have opened offices here.

One Danish agent, Esben Tjalvi, said Danes found the prices too good to resist.

'At 1,500 to 2,000 euros (S$3,114 to S$4,177) per square metre, it's up to four times cheaper than in Copenhagen and Stockholm,' Mr Tjalvi said.

'People are buying what they can't afford at home.' But private buyers alone do not account for the eye-popping 28-percent rise in turnover in the first half of 2007 - that is thanks to the muscular presence of investment funds, once a rare feature in the Berlin property market, that are snapping up dozens of apartment blocks.

Cerberus Capital Management and Goldman Sachs' Whitehall fund have invested 2.1 billion euros since 2004.

'In Berlin, the price per square metre is one of the cheapest of any major city in Europe, including those in eastern Europe,' said Andrea Magnoni, the Italian co-founder of the Valore fund.

Higher returns

'The return for investors is higher than anywhere else at between seven and eight percent compared to 3.5 per cent in Milan because even if the rents are moderate the purchase prices are always low enough to guarantee a good rate.'

Investors are speculating on rents rising.

'In the rest of Europe, 50 to 60 per cent of people's salaries goes towards rent. In Germany, it is about 20 per cent,' Mr Magnoni said.

The influx of investors to Berlin is having a marked effect on the landscape of the city.

Whole streets are being renovated without the city authorities having to dig into their already massively stretched finances. The decrepit flats with coal-fired heating and toilets on the landing are disappearing and new shops are opening where they were once rare.

This in turn is creating jobs, not only in the property sector but also in the building trade.

But Berliners fear that the property boom is threatening to change the character of a city that has always had a more alternative feel than its German, and many of its European, counterparts.

The once rare occurrence of tenants forced to leave so that the owner can raise rents is now becoming more common, some say.

And new luxury blocks of flats are mushrooming on the choicest roads, with prices well beyond the reach of most residents in a city where 11 per cent of the population is unemployed and thousands of students and hard-up artists make their home.

Investors would also do well to remember that many people lost heavily after betting on sharp price rises after the Berlin Wall came down and communist rule disintegrated in 1989. In fact, prices fell.

Andrea Magnoni says investors back then were motivated by the promise of big tax breaks instead of solid economic reasons.

'But today the market is underpinned by genuine economic growth,' he said. -- AFP

Property Transactions With Contract Dates Between Jan 7th - 12th, 2008


《联合早报》Feb 02, 2008



市建局受询时表示,这主要是因为发展商将一些大型项目的完成期提前了。发展商每个季度都会向市建局呈报预计完工或取得临时入伙准证日期,这些项目包括拥有546个单位的海景华庭(The Sea View)和228个单位的The Cosmopolitan。




卓登国际(Chesterton International)研究部主管陈瑞谨则指出,由于过去五个月,房地产需求一直在下跌,而价格则横摆,一些发展商可能担心市道因美国经济增长放缓和次贷问题拖累,加快完成预定在2009年才完工的项目,同时把2010年的供应延后推出,希望等到市场回调时再推出。




预计将在今年完工的项目,大部分位于市区以外以及东部的一些小型公寓项目,但黄金地段的项目也不少,拥有387个单位的乌节史格园(Orchard Scotts)、295个单位的Parc Emily和486个单位的Park Infinia at Wee Nam预计将在今年内完工,使得第9第10和第11邮区高档公寓供应紧张的情况有望获得舒缓。

不过,莱坊(Knight Frank)研究部主管麦俊荣认为,由于即将完工的项目几乎都被预定一空,因此对价格的影响并不会太显著。





市建局指出,淡滨尼宏道(Tampines Grande)、安顺路和史各士路的短期办公楼等新办公楼项目,在第四季里获得申请规划准证(planning approval),使得供应进一步提高了。


Mapletree To Handle JTC Reit

Source : TODAY, Weekend, February 2, 2008

Expected to list on SGX by middle of the year.

More than a year since its decision to divest its industrial properties, JTC corporation - Singapore’s biggest industrial landlord - has appointed Mapletree Investments to establish and manage a real estate investment trust (Reit).

The Reit is expected to list on the Singapore Exchange by the middle of the year, subject to market conditions, said JTC.

“We received quality submissions from a wide range of international and local players. All proposals were evaluated based on individual merit against an objective set of criteria and Mapletree was chosen after a rigorous selection process,” said JTC chief executive officer Ow Foong Pheng.

JTC invited proposals to be submitted in May last year, after which it shortlisted seven potential Reit managers.

The divestment is part of JTC’s pledge to encourage greater competition in the industry property market and for the government agency to exit the development of ready-built industrial facilities in market segments where there is active private sector participation.

Out of the approximately 1.7 million square metres of industrial space intended for divestment, a “significant majority” will be placed in the Reit, while the rest will be sold through trade sales, JTC earlier said.

The properties are worth a total of between $1.4 billion to $1.6 billion.

The Reit’s portfolio will comprise a wide range of high-rise ready-built properties including flatted factories, ramp-up and stack-up factories, and multi-tenanted business park buildings.

Calling the asset portfolio “attractive” and “well diversified in terms of tenancy, location and asset type”, Mapletree CEO Hiew Yoon Khong said the properties also enjoy high occupancy rates, a good quality tenant base and long-staying tenants.

“We are confident that we will be able to add further value to this portfolio of assets,” said Mr Hiew.

Mapletree is the sponsor for SGX- listed Mapletree Logistics Trust and the co-manager of Lippo-Mapletree Indonesia Retail Trust, the first Indonesia retail Reit offering in Singapore.

It also intends to list a commercial trust with a $3-billion to $3.5-billion portfolio in the coming months.

Even Fortresses Like CapitaLand Can Show Signs Of Stress

Source : The Straits Times, Feb 2, 2008

INVESTORS scurry for cover in the strongest fortresses they can find when a storm breaks - such as the ferocious one currently raging in global financial markets.

But even the strongest citadel will show signs of wear and tear amid the panic that has been unleashed in recent weeks - just look at CapitaLand.

With a market value of $16 billion, the real estate giant must surely qualify as an ideal ‘fortress’ for property bulls to take cover in until calm is restored on global bourses.

And while the counter managed to stay relatively unscathed as the shares of other developers crumbled under the strain of the United States sub-prime mess and a vicious selldown, its strong walls showed signs of stress last week.

In the big frenzy that started on Jan 21, a Monday, when regional bourses were hit by widespread panic-selling, CapitaLand plunged to $5.10 at one point - its lowest levels in 19 months.

However, the relief rally sparked by the US Federal Reserve’s emergency interest rate cut of 0.75 percentage point last week enabled it to recover to a high of $6.55 on Tuesday.

But investors are now wondering if that is the best CapitaLand can manage in the near term. A further Fed cut of 0.5 percentage point on Wednesday failed to give CapitaLand a lift even though its bottom line should get a boost from the falling costs of funds.

Yesterday, the stock fell to a low of $5.58 before closing 10 cents lower at $5.80, as investors were spooked by news that it was raising $1.3 billion via a 10-year convertible bond issue.

This begs a question. Surely, in the current climate when the availability of credit is drying up globally, raising such a big sum should be a feather in CapitaLand’s cap.

The conversion price of $8.614 - which works out to a hefty 48.5 per cent premium over yesterday’s close - is not the same as giving away the family silver.

But some market observers believe the selldown could be due to fund managers switching out of CapitaLand into the bonds that pay a coupon rate of 3.125 per cent per annum.

Said a dealer: ‘In times like these, preservation of capital is king. If you believe that CapitaLand has more downside, you can cap your loss by selling the shares and buying the bonds. And since it is a convertible bond, you get to enjoy any upside if it subsequently rebounds above $8.60.’

So using the fortress analogy, fund managers are simply taking shelter in the strongest part of CapitaLand’s edifice, as storm clouds continue to gather and the global financial system encounters further stress from the sub-prime fallout.

Even the usually ebullient property analysts are not getting excited over developers’ prospects. Morgan Stanley analyst Melissa Bon noted in a report on Jan 25 that the attractive valuations for property counters may be an illusion.

Even though the sector is now trading at a 28 per cent discount to its net asset value, compared with a 15 per cent premium a year ago, she ’sees potential downside risks if there are further delays to residential launches’.

CLSA is also cautious, saying in a recent report that ‘2008 will see a year of more sustainable price growth though the pace of increase is likely to slow’.

Mapletree To Manage JTC’s Industrial Property Trust

Source : The Straits Times, Feb 2, 2008

INDUSTRIAL landlord JTC Corporation has appointed Mapletree Investments to establish and manage a real estate investment trust (Reit) that it plans to list around the middle of the year.

The Reit will acquire some of JTC’s high-rise, ready-built properties , including flatted factories and multi-tenanted business park buildings, said JTC and Mapletree in a joint statement yesterday.

Singapore’s largest industrial landlord first announced its divestment plan in late 2005. It said the move would create a more vibrant market and enable it to focus on strategic industrial developments such as the Jurong Island chemicals hub.

JTC announced last July that it had shortlisted seven firms to manage the Reit.

It also said that it will sell $1.4 billion to $1.6 billion of assets - about 10 per cent of its $10.6 billion portfolio and that part of it will go into a Reit.

JTC chief executive Ow Foong Pheng said yesterday: ‘We received quality submissions from a wide range of international and local players.’

All proposals were evaluated on individual merit against an objective set of criteria, and Mapletree was chosen after a rigorous process, she said.

Mapletree, a Temasek Holdings subsidiary, is the sponsor for Singapore-listed Mapletree Logistics Trust.

The firm has an asset base of about $5.3 billion and assets under management of $2.5 billion across Asia.

Mapletree chief executive Hiew Yoon Khong said: ‘We find the asset portfolio very attractive. It is well diversified in terms of tenancy, location and asset type.’

The properties are also strategically located close to or have good access to the city centre, housing estates, key industrial belts and transport nodes, he said.

They enjoy high occupancy rates, a good quality tenant base and long-staying tenants.

JTC said it will work closely with Mapletree to effect a smooth transition upon the transfer of the selected properties .

The timing for the proposed Reit is around mid-2008 and subject to market conditions, said the joint statement.

The current outlook for initial public offerings is bearish as volatility rocks the stock market.

Singapore’s industrial property market has done well, with prices up 22.7 per cent last year, according to Urban Redevelopment Authority data.

Rents of industrial properties chalked up a stronger 32 per cent growth last year, as the sector had benefited from spillover office sector demand.

JTC Appoints Mapletree To Manage Reit

Source : The Business Times, February 2, 2008

Trust due to launch in middle of the year, subject to market conditions.

JTC Corporation yesterday said that it has appointed Temasek unit Mapletree Investments to establish and manage its upcoming real estate investment trust (Reit). The Reit is set for launch about the middle of this year, ’subject to market conditions’, JTC said.

JTC - Singapore’s biggest industrial landlord - said last July that it plans to sell up to $1.6 billion of assets, a big chunk of which will be pumped into a Reit. Industry players have said that the Reit’s initial portfolio is expected to be worth more than $1 billion.

JTC said that appointing Mapletree is a milestone in its divestment exercise, after it announced a request for proposals to explore the appointment of a Reit manager last year.

‘We received quality submissions from a wide range of international and local players,’ said JTC chief executive Ow Foong Pheng. Mapletree was chosen after a rigorous selection process, she said.

Mapletree aims to grow its capital management business, its chief executive Hiew Yoon Khong has said.

‘This appointment reflects the recognition, both locally and internationally, of our capabilities in managing industrial properties and in structuring and managing Reits,’ he said yesterday. Mapletree already has one Reit - Mapletree Logistics Trust - under its belt.

JTC Reit’s portfolio will comprise a range of high-rise ready-built properties including flatted factories, ramp-up and stack-up factories and multi-tenanted business park buildings, the landlord said yesterday.

The asset portfolio is attractive, Mr Hiew said, adding: ‘It is well diversified in terms of tenancy, location and asset type.’ The properties also enjoy high occupancy rates, a quality tenant base and long-term tenants, he said.

Market sources said that Mapletree beat several competitors to manage JTC’s Reit, including Singapore’s CapitaLand and Australian-listed property and wealth management company Goodman Group.

Previous reports have said that UBS, Goldman Sachs and DBS are in line to underwrite the offer.

Looking For A Room To Rent? Try Ex-Army Camp

Source : The Sunday Times, Feb 3, 2008

Two former barracks redeveloped as hostels to meet housing crunch caused by surge in number of foreigners here.

WHEN rent for engineering student Wu He Kun and his three friends got too high, they turned to a former army camp instead.

From paying $1,600 a month for a three-room flat in Commonwealth, the four China students now shell out just $1,000 a month for a two-room hostel in the former Singapore Civil Defence Force camp in Jalan Bahar.

The housing crunch in Singapore, due to a boom in the number of foreigners living here, has caused the Singapore Land Authority to open up two former military barracks in the last six months to be used as hostels. The number of foreigners here went up from 798,000 in 2005 to 875,500 in 2006.

Highlighting his problem, Mr Wu, 24, said: ‘I viewed so many flats online but the rents were all more than what they offer here,’ he said.

Property developers are also seeing the potential in making money from such alternative homes.

Last week, five hostel operators made bids for the former Ulu Pandan camp and the winning company, E M Services, won only after a bid which was 60 per cent above the valuation.

E M Services, which bid $122,725 of monthly rent, is planning to pump $5 million to transform the camp into a full-facility student hostel. The lease is renewable on terms till 2017.

When the Ulu Pandan hostel starts operations in June, these two former camps will house up to 1,800 foreign students in total.

For the Jalan Bahar site, Jian Yu Construction spent $7 million to spruce up the place including repainting and landscape works.

There are 360 units each between 420 and 500 sq ft, with a kitchen, toilet and living room. The rent ranges from $700 to $1,100.

The hostel opened last July and now houses close to 900 foreign students.

Vietnamese student Tho Nguyen, 16, is now paying $500 for a unit he shares with two others. The Informatics student has been here since last September.

‘I like the fresh air and open space here,’ he said. ‘This is something I don’t get back home.’

The third camp tenanted out was the old police hostel in Cantonment which was converted into Pearl’s Hill Hostel in 2004.

Vita Group pumped in $1.5 million on renovations, alterations, retrofitting and furniture to turn the old building into a hostel.

With its central location, 85 per cent of its 142 units were snapped up by foreign students in the first six months of operation.

Bangladeshi trainee doctor Fetama Yasmin, 39, pays $650 monthly for a room she shares with another. She works at the Singapore General Hospital nearby.

‘Sometimes, I even take a 20-minute walk to work and save on transport,’ she said.

Fresh air a bonus

‘I like the fresh air and open space here. This is something I don’t get back home.’VIETNAMESE STUDENT THO NGUYEN, on the unit he rents at the former SCDF camp in Jalan Bahar.

Rental Increases Hard To Swallow, Say Eateries

Source : The Sunday Times, Feb 3, 2008

SIX hundred and ninety.

That is the extra number of Vietnamese sandwiches that Baguette, a sandwich store in Raffles City, has to sell a month to adjust to an increase in rent.

Indeed, food and beverage (F&B) outlets have not been spared by recent retail rental hikes of as much as 40 per cent per sq ft (psf) in Raffles Place.

Some businesses have had to relocate as a result.

Mr Wei Chan, business development manager of Baguette, says the store, whose lease is up in May, is facing a 65 per cent spike in rent. His outlet offers no seating so there is a limit to the number of customers he can attract and makes ’selling 690 more sandwiches a month a near-impossible task’.

He is considering shifting to a larger outlet with seating in Capital Square where the rent psf is lower.

Rising rents also affected Eurasian restaurant Quentin’s, previously in East Coast Road.

Chef-owner Quentin Pereira shifted to a much larger unit in the Eurasian Association in Ceylon Road in December last year because the rent is almost 40 per cent less.

Explaining the rent increase, Mr Donald Han, managing director of property consultant Cushman & Wakefield, says: ‘In the last two years, the Singapore economy grew at its fastest pace, above 7 per cent per annum since it was in the doldrums in 2003. The boom resulted in new retail tenants and F&B concepts jostling for limited retail space.’

According to Mr Charles Chua, PropNex Realty’s head of commercial department, rents for a Raffles Place ground-level shop have increased by some 40 per cent, from $18 to $35 psf, and basement shops by some 35 per cent, from $12 to 25 psf.

He says the rental hike in areas outside Orchard Road is more manageable, about 3 to 5 per cent year-on-year on average.

Local sandwich chain Cedele, which has three outlets in Raffles Place, had to bear the brunt of rental hikes of between 18 and 50 per cent when the leases of some of its 13 outlets were up for renewal last year.

The chain chose to remain in these locations to retain customers. But its executive director Yeap Cheng Guat says: ‘This rent increment is becoming more difficult to absorb as we cannot pass this to our customers.

‘If rental continues to escalate at this non-sustainable and unrealistic rate, we will have no alternative but to consider relocating.’

Mr Han says rents are expected to climb 5 to 8 per cent this year though successful and established malls are likely to ask 10 to 15 per cent more.

He adds that the rental market might ‘adjust itself to offer more value to F&B tenants’ in the next two years, given the addition of some 3 million sq ft of retail space with the opening of three malls in Orchard Road, as well as the Marina Bay Sands shopping mall.

Consumers LifeStyle interviewed say they will still patronise their favourite eateries even if they relocate.

Civil servant Julia d’Silva, 55, a fan of Quentin’s, says: ‘No matter where it moves, I will follow because it’s the only restaurant here serving good Eurasian food.’

US Interest Rate Cuts Fuel HK Property Boom

Source : The Sunday Times, Feb 3,2008

Analysts see prices revisiting the heady 1997 peak

HONG KONG - When first-time buyer Judy Kwan heard a flat was for sale in a street she admired in Hong Kong's Wanchai district, she snapped it up within 24 hours without even seeing it, inheriting a tenant she had never met.

Now she wants to buy another as the property market surges from a strong economy and mortgages become cheap as local interest rates drop in line with rates cuts in the United States. Ms Kwan hopes property investment will allow her to retire in five years' time, aged 50.

'The price was right and the market's going up,' said Ms Kwan, an accountant, who paid US$282,000 (S$399,283) for the boxing ring-sized flat in November.

The apartment's value has risen 10% since then and analysts predict that falling interest rates and rising salaries will propel prices back to a heady 1997 peak.

Hong Kong's economy is riding on the coat-tails of China's boom, but its currency peg with the US dollar forces the territory to officially track US interest rate cuts. Local banks have more leeway but have still slashed rates by 100 basis points in the past two weeks as the US federal funds rate has fallen to 3%.

So the housing downturn and mortgage crisis that threatens the US economy has indirectly bolstered Hong Kong property.

Monthly transactions for mass market housing in the final three months of last year were on average 63% higher than in the rest of 2007, hitting their highest level for a decade.

Real Hong Kong mortgage rates are now negative, below inflation of 3.8% and it has become cheaper to buy than rent, analysts say.

On fire

A Merrill Lynch property analyst has predicted a 50% rally in property prices in the next two years, prompting several Hong Kong employees at the bank to go on an apartment hunting spree. UBS has the same forecast.

Geoff Lewis, head of investment services at JF Asset Management, said the property might 'catch fire'.

The expected boom fed a price rally late last year in Hong Kong's biggest developers, including Sun Hung Kai Properties, Cheung Kong Holdings and Henderson Land Development but Hong Kong's property sub-index has see-sawed this year.

Several Hong Kong developers are also expected to get an extra kick from their fast-growing mainland China businesses.

But many analysts say buying an apartment is better than buying shares, as equity markets will probably stay volatile.

Others suggest that investors suffering share losses might have less cash to invest in real estate.

New housing supply in the next three years is forecast at half levels seen during the 1990s boom, and interest rates could fall further while inflation heads above 4%, economists say.

With no control over monetary policy and inflation on the rise, a 50% appreciation in flat prices could pose a risk for an economy that saw property prices nosedive 65% when the last property boom burst 10 years ago.

Economists, however, are not worried about an asset price bubble just yet.

They think a strong property market will create wealth, spur consumer spending, and enable the territory to still notch up 4-5% economic growth even if the US economy tips into recession and hits exports from one of the world's busiest ports.

Hong Kong's gross domestic product (GDP) has grown an average 7% annually in the last four years.

'Mass market property prices are still 35-40% below their peak in 1997,' said Nicholas Kwan, Asian head of research at Standard Chartered Bank.

'So even if they rise 30-40%, prices would only be what they were 10 years ago,' he said. 'It's hard to argue that would be a bubble.'


Hong Kong home prices slid after the 1997 Asian economic crisis. Home prices were rocked by the bursting of the bubble and they slumped in a 2003 outbreak of the Sars respiratory disease, before rebounding about 80% in the last four years.

Clifford Lam at Credit Suisse believes a steady Hong Kong economy could send home prices up 15-20% this year but warns against complacency.

'If the US goes into recession and China's economic growth slows, Hong Kong businesses, including exporters and high rollers in the financial industry are going to get hit,' Mr Lam said.

'Some of the home buyers that are jumping into the market on the assumption property prices will rise 40-50% will be disappointed.' Prices for luxury property, on a four-year roll, have already returned to 1997 levels, with an Indonesian fund paying US$30 million for a house on Hong Kong's iconic mountain, the Peak, last month - an Asian record on a per-square-foot basis.

With the pegged Hong Kong dollar's weakening, property has become attractive to foreigners and mainland Chinese.

For Judy Kwan, buying an apartment allows her to diversify out of a Hong Kong stock market that surged 39% in 2007, and get a yield on her investment of 5.6% a year.

Bank deposit rates range between 0.75% and zero.

'I don't believe in putting money in the bank, inflation is rising,' said Ms Kwan, who has doubled her money on some mutual fund investments over the past four years.

'You need to diversify your investments and rental income will cover my mortgage. It's a win-win situation.'

Prices Unlikely To Fall Yet Even If Launches Have Been Stalled

Source : The Sunday Times, Feb 3, 2008

Larger developers can still hold out, but some may be more open to slightly lower offers

SENTIMENT in the property market is lacklustre, showflats are quiet and developers are delaying launches. So there is a chance that prices will head down, right?

Wrong. While stock market volatility and fears of a United States recession have sent many property buyers to the sidelines, developers have not lost their nerve yet.

MASS MARKET PRICES ARE HOLDING STEADY, shored up by HDB resale prices, so launches for this segment have been well-attended, including this preview (above) at Waterfront Waves in Bedok Reservoir. -- PHOTOS: FRASERS CENTREPOINT, CREDO REAL ESTATE

Prices for post-Chinese New Year launches are unlikely to head south over the next three months, consultants said.

'Major developers are financially strong, so buyers can't expect price cuts at launches,' said Knight Frank director of research and consultancy Nicholas Mak.

Even if the stock market suffers, the property market tends to lag behind by two to three quarters. Usually, property prices fall only when there's a recession or general weakness in the labour market, said Mr Mak. Singapore is not facing either of those scenarios and they are not expected to arise, he added.

But individual sellers and some smaller developers could find themselves over a barrel in the months to come if buyers stay home.

Developers certainly have an ample supply of projects for launch, having picked up a slew of sites during the boom times in the past two years.

While many can delay launches, those with 99-year leasehold sites might not be able to hold out for long, said a developer.

Still, even if developers are unwilling to cut prices, they could be more willing to negotiate in today's more subdued market.

'Officially, their prices might remain at the levels seen last year, but they could be more open to serious but slightly lower offers,' said Savills Residential director Ku Swee Yong. However, he does not expect them to budge by more than 5 per cent.

And there are still buyers out there looking for homes. Take the situation at the 618-unit Farrer Court. Owners there will receive their collective sale proceeds early next month and not all would have bought a home yet.

Time for homebuyers to do their homework

FIGURES from the Urban Redevelopment Authority (URA) show that private home prices shot up 31.2 per cent last year - way up from 10.2 per cent in 2006 and very close to the spurt seen in the 1996 peak year.

High-end property prices have far exceeded the 1996 peak while mid-tier homes are on a par, noted one market watcher.

Mass market property is a different story. Prices are still below the last peak and good buys could pop up, Mr Ku said.

This segment remains supported by HDB resale flat prices, which rose 17.5 per cent last year, the fastest growth seen since prices shot up by 25 per cent in 1996.

Buyers need to do their homework and look for properties in 'good' locations, with easy access to public transport. They could consider fairly new, completed condominiums near an MRT station, said Mr Ku.

They might even look at suburban landed homes, said Mr Ku, who feels those in the Upper Thomson Road to Mandai Road stretch are still undervalued.

As for new mass market launches, the 99-year leasehold Waterfront Waves in Bedok Reservoir has done fairly well. Eighty of the 148 units have been sold. Prices remain at $690 to $870 per sq ft.

'I think buyers are slowly gaining the upper hand - if they do not already have it,' said Chesterton International's head of research and consultancy, Mr Colin Tan. 'For every buyer, there are many sellers right now. But their expectations are different, there is still a wide gap in between and no sales are taking place.'

Nevertheless, if the stand-off lasts longer than expected, some developers and sellers could panic and slash prices so as to draw in buyers, said market watchers.

These are likely to be the very small developers or new entrants facing a credit crunch, they said.

'Singapore's property market is still bullish. The external factors affecting it are actually good because they have stopped the market from overheating,' said a seasoned property investor.

'Developers were selling at tomorrow's prices. Now, they might have to ask for today's prices.'

CapitaLand Tells Gillman Heights Owners To Honour Sale

Source : The Straits Times, Feb 2, 2008

Resident circulates letter to stop deal; developer warns of breach of contract

ANOTHER collective sale dispute is brewing between the majority sellers of a condominium and its buyer.

This time, it is the owners of Gillman Heights in Alexandra Road that are locking horns with property developer CapitaLand, which agreed to buy the sprawling 607-unit estate in February last year.

The condo's minority owners are already filing an appeal against the $548 million deal, which got the green light in December from the Strata Titles Board (STB), the body that governs collective sales.

But even some Gillman Heights majority owners, who originally agreed to sell, are not all happy about the sale.

At least one home owner has circulated letters to his neighbours, calling for a concerted application to the High Court to invalidate the collective sale agreement.

The letters, distributed at the beginning of last month to residents' mail boxes, prompted a quick response from CapitaLand after they were brought to its attention.

It sent out at least two lawyers' letters addressed to all Gillman Heights majority owners, warning them 'not to do anything...that may hinder or prevent' the sale.

These strongly worded letters, sent through law firm Rajah & Tann, identified the dissenting majority owner as Mr Jerry Lum.

Rajah & Tann also sent a six-page letter addressed specifically to Mr Lum, urging him to 'take notice' - in full capital letters - that CapitaLand 'may have no option' but to take legal action against him unless he stopped circulating the letters and organising any similar activities.

The letters stressed the sale agreement is 'binding' on all who have signed it and any attempt to block the sale could be viewed as a breach of contract.

A copy of the letters was obtained by The Straits Times this week. When contacted, Mr Lum confirmed he had distributed letters and had received the lawyers' letters, but declined to comment further.

Among other things, Mr Lum argued in his original letters that the sale should require consent from 90 per cent of owners, rather than the usual 80 per cent. This is due to a dispute over Gillman Heights' completion date.

He was also unhappy with the sale price, which he said 'many neighbours' feel is 'so, so cheap'. Each owner can expect to receive about $890,000 to $950,000 from the collective sale.

Although Mr Lum was the only one who signed off on his letters, the liberal use of the pronoun 'we' in the letters suggests he may have been writing on behalf of other like-minded, but unidentified, owners.

However, the Gillman Heights sales committee has claimed no knowledge of any activities aimed at obstructing the collective sale. It responded to CapitaLand's letters with a letter of its own, sent through its lawyers Lee & Lee. In its letter, it said it 'has every intention to and will carry out' its obligations under the sale agreement.

Meanwhile, a group of 22 minority owners at Gillman Heights are appealing to the High Court to overturn STB's approval of the sale. They filed it on Jan 16 and are awaiting the hearing. They are appealing on the grounds that the sale price is too low, and that more owners' consent is required.

The Gillman Heights brouhaha is the latest in a series of unusual conflicts between an estate's majority owners and its buyer. Historically, the quarrels have involved minority owners instead, who are unwilling to sell their homes.

But recent cases such as Horizon Towers in Leonie Hill and Regent Garden in West Coast Road have thrown up examples of majority owners who signed on the dotted line but later wanted to back out.

The Horizon Towers owners ended up being sued by the buyer - the suit is now on hold. The Regent Garden owners managed to get the sale dismissed earlier this week.

Letters making their rounds

THE letter-writing saga at Gillman Heights (above) was kicked off by home owner Jerry Lum, who distributed two letters to his neighbours dated Jan 1 and Jan 3.

Mr Lum called into question the estate's sale price and the level of consent required for its collective sale. He also flagged rising home replacement costs, saying a High Court application would hold up the sale and let residents delay finding another place to stay.

CapitaLand responded with three letters - dated between Jan 4 and Jan 9 - reminding the majority owners of their contractual obligations and warning of breach of contract.

In reply, the estate's sales committee wrote on Jan 10 that it was unaware of and did not support activities obstructing the sale. If anyone was involved in such activities, he would have to take 'personal responsibility'.

Saga Of Mitre Hotel Site Ends After 12 Years

Source : The Straits Times, Feb 2, 2008

AFTER dragging on for 12 years, the legal battle over a rundown hotel sitting on millions of dollars worth of prime downtown real estate has ended.

Singapore's highest court yesterday ordered the land on which the Mitre Hotel sits to be sold and its occupants cleared out.

Some experts estimate that the plot could fetch $200 million, although the actual valuation has been ordered by a judge to be kept confidential.

The decision ends a long-running battle between the land owners, the bulk of whom want to sell the property.

The only owners resisting the sale are Mr Chiam Heng Hsien and Mitre Hotel Proprietors, the partnership that runs the hotel. Each has a 10 per cent stake in the land.

For more than 50 years, the hotel proprietors paid rent of about $660 a month to the land owners.

Mr Chiam, 62, went to the Court of Appeal to overturn an earlier lower court decision that ordered the site of the dilapidated, two-storey hotel to be sold.

But the three-judge panel rejected his appeal yesterday.

The hotel, which opened in 1948, stopped letting rooms when it lost its licence in 2002. But it continued to operate its bar.

The colonial-era building sits on a prime 40,000 sq ft lot in Killiney Road, against the backdrop of high-rise condominiums and office buildings.

When The Straits Times visited the site yesterday, the hotel looked abandoned. A distinct smell of urine wafted over the covered driveway leading to the lobby entrance.

The legal tussle over the land began in 1996, when Mr Chiam fought off a move by his cousin Heng Luan to sell the property.

Mr Chiam, who is the managing partner of the hotel, continued staying at the building.

The case went back to court in 2006. Mr Chiam argued that an agreement in 1948 allowed the hotel proprietors to stay on the property for as long as they wished.

In April last year, the High Court ruled against him.

Justice Judith Prakash ordered the property sold via public tender and the occupants to clear out.

She decided that the hotel partners are not entitled to compensation for being evicted, beyond the proceeds from the sale.

Mr Chiam and the hotel proprietors were ordered to pay the legal costs of the other parties.

The Court of Appeal yesterday upheld most of those decisions. But it ordered the costs of the legal battle to be paid out from the proceeds of the sale.

Rental Market Watchers Home In On Key Figures

Source : The Business Times, February 2, 2008

Launch delays, construction bottlenecks may lead to lower home completions than thought

With private residential rents shooting up 41 per cent last year, one big question is on the minds of property market watchers.

They are now busy trying to figure out just how many private homes will be completed in the next few years - as that will be a key factor affecting how private residential rents will move.

For each of 2006 and 2007, some 6,500-plus private homes received their Temporary Occupation Permit (TOP), meaning that the properties were completed and ready for occupation. This is lower than in preceding years as developers were more cautious in the 2003 to 2004 period due to weak demand for private homes then.

'As a result, developers initiated fewer projects and bought fewer Government Land Sale sites during the period,' an Urban Redevelopment Authority (URA) spokeswoman said in response to BT's queries.

Going forward, about 8,300-plus private homes are slated for completion this year, 13,400-plus units next year and around 18,500 units in 2010 - going by URA estimates as at end-Q4 2007, which were based on the latest quarterly update of completion dates declared by developers for their projects.

However, the actual number of private home completions in 2009 and 2010 may be much smaller because of construction capacity bottlenecks and developers delaying new launches, property consultants and analysts suggest.

Jones Lang LaSalle's head of research (South-east Asia) Chua Yang Liang says: 'One factor is whether developers decide to delay launching new projects, given current soft market conditions, especially in the high-end segment, where there may be oversupply concerns. If developers delay project launches, chances are they will also delay the start of their construction.'

The second factor is the bottleneck in construction capacity. This, in turn, will push back TOP dates of projects.

Dr Chua suggests a closer look at URA's latest numbers as at end-2007, which split the estimates for the number of private homes completed into two groups - based on whether they are in projects which are already under construction or in planned projects.

The 13,493 units slated for completion in 2009, for instance, comprise 11,026 units already under construction as at end-2007 and 2,467 planned units. Dr Chua argues it is almost a certainty that the 11,026 units already under construction will be completed in 2009.

For the units that are being built, 'there's no turning back barring unforeseen construction delays. As for those under planning, developers may have some free-play to delay their construction or the tight construction sector may lead to a delay in their completion dates. So there's for certain at least 11,026 units that will be completed in 2009', he adds.

For 2010, Dr Chua estimates that between 9,000 and 11,000 new private homes will receive TOP, lower than the headline estimate of 18,509 indicated in the latest official stats. 'Everyone will be monitoring the official completion estimates quite closely, quarter to quarter,' he says.

Dr Chua expects URA's overall private residential rental index to increase by 12-15 per cent this year, after surging 41.2 per cent in 2007.

Knight Frank managing director Tan Tiong Cheng expects private home rents to rise by about 20 per cent this year - roughly half the pace for last year, given that many private residential projects are likely to be completed only in late 2008 and 2009.

Lehman Brothers in a research report dated Jan 28 also projects private residential rents will by rise by 20 per cent this year and stay flat in 2009.

Citigroup in a Jan 25 report noted that the 8,364-unit TOP forecast for 2008 contained in URA's latest data as at end-Q4 2007 was 51 per cent higher than the 5,541 units forecast for completion in 2008 in URA's end-Q3 2007 data.

'With actual demolitions of en bloc developments still impending in the next 9-12 months, net supply will remain low. Construction capacity bottlenecks with competing infrastructure projects may cause completions to be lower than expected,' Citi Investment Research said.

The net stock of private homes increased by just 1,448 units last year - the smallest rise in at least 12 years.

Property consultants say that this was caused by a combination of a relatively low number of homes that received TOP in 2007 as well as demolition of properties that have been sold by en bloc sales in the past two years.