Monday, May 12, 2008

Rates To Be Displayed At All Gantries

Source : The Straits Times, May 12, 2008

BY the latter half of this year, motorists will have an idea of how much they have to pay to pass under an Electronic Road Pricing (ERP) gantry - from 100m away.

Existing gantries will each have an extra panel installed above them to show the charges for that time period and the pricing for the various types of vehicles.

Some gantries already have an electronic board alongside the gantry serving the same purpose but, as Transport Minister Raymond Lim conceded in Parliament earlier this year, these are sometimes too small for motorists to read.

The new signboards, called the Rates Variable Message System, by being visible from 100m away, will enable motorists to make a 'considered decision' about whether to pass under the gantry.

Each panel costs $65,000 to install. The tab for the 70 gantries therefore comes to $4.55 million.

The first five gantries with these new displays will be those at the Singapore River cordon. They go live in July. The signboards will then be installed at the gantries in the city centre and, subsequently, at the other gantries. The displays will go live progressively and all will be operational by November.


ERP Cuts Traffic While Keeping Orchard Buzz

Source : The Straits Times, May 12, 2008

5 new gantries to form S'pore River cordon, as speeds down to 18kmh; negative retail impact unlikely

WHEN an Electronic Road Pricing (ERP) cordon went up around the Orchard Road area in 2005, there were concerns not just from motorists but from retailers as well.
These businesses were worried that the move would drive customers away.

The Government's counter: The measures were necessary to keep up the buzz of the shopping belt as traffic had slowed down to 15kmh on Orchard Road.

Not everyone was convinced, but the gantries went up and ERP hours were extended to Saturdays and for an hour more on weekdays.

The aim: To discourage motorists from using the shopping belt as a way of getting to other destinations, such as Marina Bay.

Three years on, a study has shown that vehicles have indeed been able to move along faster. Traffic speeds went up to 25kmh and have since stabilised at an average of 23kmh; the volume of traffic has shrunk by 20 per cent.

And the retailers have stopped complaining - shoppers are still making their way to the strip.

Orchard Road Business Association spokesman Stephen Goh noted that the cordon had noticeably reduced the amount of pass-through traffic on weekday afternoons.

'The overall effect is something positive because what we are left with are the 'real shoppers', not people just using the road to get elsewhere.'

The Transport Ministry presented the positive effects of the Orchard Road cordon on Thursday, ahead of giving updates for the second cordon in the business district, which will take effect in July.

The five gantries in the new cordon - at Eu Tong Sen Street, New Bridge Road, South Bridge Road and two at Fullerton Road - will begin evening operations to reduce traffic going through the Singapore River area. This kind of traffic now makes up more than a third of the traffic in the area.

The Land Transport Review first pointed out in January that a motorist travelling in the area - say, from Bugis to Chinatown - can now go at only 18kmh, down from 25kmh five years ago.

With the Singapore River cordon of gantries, the commercial and shopping areas of Bugis, Marina Centre and Bras Basah will be separated from the office areas of Shenton Way and Raffles Place.

Yesterday, construction work began on two of the five new gantries. Already, some businesses in the area are jittery about what this could mean for them.

Mr Colin MacDonald, the outgoing president of the Boat Quay Business Association, said: 'It seems to go against the tourism board's intention of injecting life and vibrancy into the river area.

'If locals are put off because of the charges, tourists are likely to follow suit.'

But the Singapore Retailers Association said it had not received complaints from its members in the area, and that there were few retail shops there anyway.

Said Ms Lau Chuen Wei, the association's executive director: 'Most of the shops along the river area are specialist shops; shoppers can plan their shopping trips there around the gantry timings.'

The Esplanade said it did not think the gantries would be a 'significant deterrent to patrons genuinely interested in catching arts performances at the centre'.

The Transport Ministry said the concern of some stakeholders thus far was not how business would be affected, but whether enough taxis would ply the area.

It said it was working with taxi operators to provide rebates for cabbies who cannot find fares when they enter the ERP zones. At the moment, only ComfortDelGro has such a scheme to give rebates to its cabbies.

Condo Won't Prune Trees Over MRT Tracks

Source : The Straits Times, May 12, 2008

Branches deemed safety hazard, but condo won't foot bill

THE problem: About a dozen 12m-tall trees on the premises of a condominium in the east coast area, encroaching on the raised MRT tracks.

SMRT says the overgrown branches may be a safety hazard to train operations.

But the condominium, Stratford Court, has balked at spending over $2,000 to prune them.

It noted that the Land Transport Authority (LTA) guide classified the planting of trees with full-grown height extending above the railway barrier as a restricted activity.

However, the condominium's management committee (MC) added that the guide dated back to August 2000 - and those trees were planted in 1998.

The condominium was therefore not obliged to comply with the demands of the guide, said MC chairman Lionel De Souza.

SMRT could not provide 'legal justification' for the condominium to foot the tree-pruning bill, he said.

The face-off marks the first time a tree- pruning request by the MRT operator has been challenged.

An SMRT spokesman said the company had notified and made arrangements with various landowners and maintenance agents to prune overgrown trees or vegetation 64 times last year.

The Stratford Court matter first arose in late March, when SMRT first contacted its MC, asking it to prune the branches of its khaya trees near the tracks between the Simei and Tanah Merah MRT stations.

The condominium, which sits at the junction of Upper Changi Road East and Bedok Road, duly obtained quotations for the job.

Its regular landscaping contractor asked for $2,145.

Mr De Souza, 65, said of the quoted price: 'That is not a small amount, so I checked up on the matter myself. As chairman, I have a duty to protect the money in the condominium's fund. I must be very careful with how I spend this money.'

This was when he found out that the guide put out by the LTA - which owns the train viaducts - went back to 2000, and that Stratford Court's trees pre-dated that.

In its reply on April 4, SMRT agreed that, going by the LTA guide, the condominium was not obliged to engage a contractor to prune the trees and pay for it as well.

But it later cited the Parks and Trees Act, which gives the Commissioner of Parks and Recreation - the chief operating officer of the National Parks Board (NParks) - the right to issue an order for the condominium to prune its trees if they are obstructing MRT trains.

The cost of non-compliance: A fine of up to $20,000.

NParks said the Commissioner has never had to issue such an enforcement notice before - and he is not about to do so if the matter can be resolved in other ways.

The Stratford Court MC is standing its ground.

Mr De Souza said the MC had so far not received any notice from the Commissioner, and that until it did, it would not arrange to prune the trees.

SMRT has passed the matter to LTA.

When contacted, LTA said it was working with SMRT, NParks and the condominium to resolve the matter amicably.

No Change In CPF Interest And HDB Mortgage Rates

Source : The Straits Times, May 12, 2008

THE Central Provident Fund (CPF) board will keep the interest rate for members' CPF savings in their Ordinary Account at 2.5 per cent for the third quarter of this year.

According to a joint statement by CPF and HDB on Monday, the computed CPF interest rate derived from the major local banks' interest rates for the three-month period - Feb 1 to Apr 30, is 0.74 per cent per annum.

But the board will pay the higher rate of 2.50 per cent from July 1 to Sept 30 as the CPF Act provides for a minimum rate of 2.5 per cent per annum.

An extra one per cent interest will be also paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA).

The extra interest from the OA will go into the member's Special or Retirement Account for retirement savings.

The Housing Development Board's concessionary interest rate for its mortgage loan - pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account - will remain unchanged at 2.6 per cent per annum for the third quarter.

As for the interest rate for CPF's Special, Medisave & Retirement Accounts (SMRA), the new rate for July to September will announced in June.

This is because the SMRA interest rate, currently at 4 per cent, is calculated based on the 12-month average yield of the 10-year Singapore Government Security plus one per cent.

Rents Go Up, Shops Move

Source : The Electric New Paper, May 12, 2008

FORGET the red-light district.

The way rents are going, Geylang is now the red-hot district.

The demand for properties between Lorong 1 and 25 is so hot that rents have shot up, and some long-time businesses are being forced to move out.

One such casualty is the famous Tanjong Rhu Pau.

It had to give up its lease for its Lorong 21 corner unit because the landlord more than tripled the monthly rent, from $9,000 to $30,000.

Said the boss of Tanjong Rhu Pau, Mr Yap Peng Wah, 62: 'We had to move. We had no choice.'

The increase meant an additional monthly expenditure of $21,000 on the 1,600 sq ft unit.

'We would not be able to sustain our business with such high overheads,' said Mr Yap.

He explained that his manpower costs are high as he has to employ more than 10 employees to make the buns and pastries by hand.

'Even with a rent between $10,000 and $20,000, the business would not be profitable,' he added.

So Mr Yap moved to another 1,600-sq-ft unit, at the corner of Guillemard Road and Lorong 34.

His rent there? Just $4,500.

'The rent here is half of what I paid previously, but business has dipped by about 30 per cent,' he said.

'Some of our old customers happen to drive by here and spot us. Most say they were wondering where we had moved to.'

'The only good thing is this part of Geylang is less complicated.'


His partner, Mr Lee Kwang Hua, 52, said: 'At our previous location, we lost some female customers, because they complained that some men mistook them for prostitutes when they come to our shop.'

Still, Mr Yap had hoped to relocate within the same part of Geylang initially.

'It was impossible to find a unit in the same area because the prices kept climbing,' he said.

'It's a landlord's market there because many businessmen want to open coffeeshops in the stretch between Lorongs 6 and 25.'

Mr Yap attributes the property boom along this stretch partly to the active night life.

'The general property boom did push up the property prices, but here in Geylang it is also because of the presence of the women,' he said.

'A lot of businesses want to open coffeeshops here because there is so much human traffic. The retirees come from all over Singapore to look at the girls and hang out at the coffeeshops.

'Without them, the coffee-shop businesses would collapse,' he commented.

He cited the example of a coffee shop on Lorong 23.

'Between 1997 and 1999, the coffee shop changed ownership because the business was poor,' he said.

'But once the China girls appeared in the area around 2000, all the men came, and now the business there is booming.'

Yong He Eating House, a favourite haunt among foodies, also had to move out because of the sky-rocketing rent.

The eatery, which has been selling its Taiwanese soya beancurd and youtiao in Geylang for the last decade, moved to a Lorong 27A corner unit in January.

$20,000 TO $40,000

Mr Dong Rong, 50, the boss of the eatery, said his landlord at the original location near Lorong 9 had wanted to double the rent from $20,000 to $40,000. The lease for the 2,200 sq ft unit expired last December.

He now pays $28,000 a month for a 3,600 sq ft unit.

'The property market boom is the main reason, but the China girls also played a part in driving up business in the area,' he said in Mandarin.

'There was a scramble to open coffee shops to catch the business from the men who come to Geylang to look at the girls and chat them up.

'It doesn't cost much to drink a coffee or have a beer and they can sit there all day to look at the girls and make friends with them.'

But while the coffee shops thrived on the constant flow of business from male customers who flock to Geylang to gawk at the prostitutes, it did little to boost his business.

He said: 'Our customer base is different, we attract locals and tourists who come here for our Taiwanese snacks.'


Indeed, he felt the volume of traffic in this part of Geylang was not too good for his business.

'Too many cars, and there is always a traffic jam. Many of our customers complained that they could not find parking in the area, so they would stay away,' he said.

He finds his new location better, as parking is less of a problem for customers.

The bigger space also suits his plan to expand his eatery into a Taiwanese food court.

'The increased rent was a blessing in disguise for us,' said Mr Dong.

'But other tenants who are still located in that stretch may have to move when their current leases expire.'

On the other side of Geylang, business tenants have not been spared the rising rents hitting the popular stretch of Geylang Road.

Near Lorong 21, along Sims Avenue, durian seller You Chee, 37, said his boss, who renewed the lease in January, is now paying $10,000 a month for the corner ground-floor shophouse.

That is almost double the previous rate of $6,000 a month.

Mr You said his boss is looking for another location, possibly out of Geylang.

'We have no choice but to move. The rent is too high. We have seen many of the other businesses move out because of the increased rent,' he said in Mandarin.

'We have been here for four years, and built up the business from scratch. I feel sad to leave this place.'

Sales Of Strata Offices Down, May Fall Further

Source : The Straits Times, May 12, 2008

Prices holding for now but may suffer if wider market weakens

THE dispirited housing market has claimed another casualty: Sales of strata-titled offices have taken a nosedive this year.

And while prices are holding steady for now, they might start to dip in the coming months, predicted property firm CB Richard Ellis (CBRE).

It analysed data for seven major strata-titled office buildings and found that, in the first three months of the year, only 11 sales of strata office units took place. These properties are not sold as entire office blocks; instead, units are sold singly.

The figure is less than half of that in the previous quarter and a fifth of that for the same period a year ago. In the first quarter, most of the buildings saw only one sale or none at all.

The slowdown in deals comes despite a continuing shortage of office supply, which helped boost sales and prices of strata office units to record highs last year. Some $1.7 billion of offices changed hands last year.

Since the office crunch has not improved much, this implies that the sombre mood in the market is behind the lacklustre activity, said Mr Jeremy Lake, CBRE's executive director of investment properties.

'In the strata-titled market, most transactions are relatively small, so buyers are high net worth individuals or companies rather than property funds,' he said.

'They are more likely to be sentiment-driven, and no doubt, sentiment now is not as strong as it was a year ago.'

The stalled office activity echoes the current housing market situation in Singapore, Mr Lake added.

Homebuyers and sellers are at a stand-off now, after private property prices soared 31 per cent last year only to hit the brakes towards year-end following the sub-prime mortgage crisis in the United States.

'For the secondary markets in the residential and office segments, most vendors will hold on if they can't get their price,' said Mr Lake.

'Because rentals are very good and mortgage rates are low, investors have strong holding power.'

Across property types, offices saw the smallest increase in prices in the first three months of this year, perhaps because of the slowdown in activity. They inched up 1.1 per cent in the January to March period.

Mr Lake said he believes office prices are now 'largely flat' rather than on an uptrend.

CBRE data shows that in some buildings, the average price of offices sold has actually come down this year.

At International Plaza, for instance, the average price of units sold in January to March was $1,375 per sq ft (psf), down from $1,449 psf in the previous three months.

But Mr Lake said it is too soon yet to say if prices are peaking. 'It's a lull at the moment. Whether it will turn into a peak, we shall see.'

However, he added that investors 'should not expect to see exciting capital gains going forward'.

'We're likely to see easing of activity and easing of capital values with the market stalled as it is,' he said.

Older 'New' Condos On The Market

Source : The Sunday Times, May 11, 2008

Leftover units offer immediate occupation, but buyers should take note of some things

With property developers holding back major launches as they wait out the gloomy market sentiment, eager buyers have had to turn to other avenues for a home.

Some with urgent housing needs are looking at older 'brand-new' condominiums - developments that have been completed for a number of years but still have unsold units.

At the 384-unit, 99-year leasehold Tanglin View, developed by Far East Organization, there are about 20 units left. Most are three-bedroom units, with an asking price of $1,400 psf.

At several of these condos, which have had unsold stock for a few years, all the remaining units have been taken up in recent months.

Far East Organization, for instance, held an open house last month for the leftover units at its four-year-old Water Place in Tanjong Rhu. The 437-unit development is now fully sold.

The company's Tanglin View has about 20 unsold units, going for $1,400 per sq ft (psf).

But do such properties make good buys?

Some of the condos might have been priced above the market at the time they were launched, which is why there are still unsold units, said Mr Ku Swee Yong, the director of business development and marketing at Savills Singapore.

But now that their surrounding projects are mostly sold out, it might be worth paying a premium for immediate occupation or immediate rental income at these completed units, he added.

Another advantage is that buyers get to see the actual unit they are buying - the views, fittings, defects and so on, said consultants.

'What you see is what you get, so there is less scope for misunderstandings,' said Mr Colin Tan, the head of research and consultancy at Chesterton International.

What to look out for

Apart from the standard considerations - location, price and design - completed condos come with a few more checkboxes for you to tick off before you sign that contract.

Buyers should ask what the developers have done with the unsold condos since they were completed.

In some cases, the developers have left the units empty, which is what GuocoLand has done with Le Crescendo in Paya Lebar, where would-be buyers can see the actual units that are on sale.

Other developers rent out the unsold homes for interim income, but are willing to sell them with the tenancies.

At The Equatorial, developer City Developments is selling one last two-bedroom unit, tenanted, for $2.1 million.

If the unit has been rented out for five years or more, buyers should check the electrical wiring and plumbing to see whether they need to be changed, said Mr Tan.

'The danger is that, on the surface, everything looks new and you think the same goes for services that cannot be seen,' he noted, adding that 'false ceilings can hide a lot of internal problems'.

While new condos come with a 12-month liability period for defects, this might not apply to condos that have been completed for some time, especially if they have been rented out in the meantime.

Consultants recommend that buyers check with the developers to see if they are willing to make good any defects found within a reasonable period.

For 99-year leasehold condos, it is also important to find out when the clock started ticking on the lease. 'The buyer needs to check on the remaining lease period as these condos may be marketed as being new,' said Mr Tan.

Orchard Scotts in Scotts Road, for instance, was completed last year, but its 99-year leasehold tenure started ticking in 2001.

Similarly, River Place in Havelock Road was completed in 2000 but the 99-year lease took effect in 1995.

Can you get a discount?

Some developers, such as Far East Organization, occasionally hold promotions for their completed projects in order to offload the units.

In the past few months, it has offered discounts on completed condos such as Icon in Tanjong Pagar, The Lakeshore in Jurong West and Hillview Regency in Bukit Batok.

Last week, it is understood to have offered stamp duty reimbursements for Hillview Regency units.

DTZ Debenham Tie Leung's executive director, Ms Margaret Thean, said whether you can get a discount is 'subject to location'.

'If a project is situated in a prime location, it is unlikely you will get a bargain. But if it's a mass market project and on the outskirts, you're likely to have more room to negotiate,' she said.