Tuesday, June 17, 2008

Strong Home Sales Lift Demand For Property Issues

Source : The Straits Times, June 17, 2008

PROPERTY counters rebounded yesterday following the positive news about private home sales - and took warrants on the shares along in their wake.

Sales hit 441 units last month, up 55 per cent from the 284 in April, as buyers took advantage of easing prices.

Last Friday, CapitaLand was down about 8 per cent for the week compared to a fall of about 5.3 per cent for the Straits Times Index. City Developments (CDL) was down about 6.7 per cent for the week.

But yesterday, the positive news on home sales sent property counters bouncing back.

CapitaLand rose 10 cents to $5.90 on a volume of 7.2 million shares while CDL was up 10 cents at $10.52 on a volume of 2.25 million shares. Keppel Land was up four cents at $5.16 with 1.35 million shares changing hands.

'The sales momentum in May has continued in June such that the number of new homes sold is likely to be better,' said Mr Joseph Tan, an executive director of residential property at CB Richard Ellis.

The activity among the mother shares was reflected in the warrants market.

A warrant issued on CapitaLand by Macquarie Securities rose one cent to 18 cents on a volume of 9.6 million units. Its exercise price is $5.84.

Another warrant with an exercise price of $6.83 and a conversion ratio of 1000 shares to 2,970 warrants rose half a cent to 6.5 cents with 1.2 million units traded.

But a call warrant on CDL with an exercise price of $12 fell half a cent to 11 cents with 1.2 million units traded.

The Urban Redevelopment Authority said in April that Singapore home prices climbed 3.7 per cent in the first quarter, the smallest increase in more than a year.

Jones Lang LaSalle said yesterday that developers are likely to keep prices competitive, by offering discounts, to keep the market demand stable.

Its head of research, Dr Chua Yang Liang, said: 'The market will continue to see the return of these price-sensitive buyers as long as prices remain affordable.'

One-North - A Place To Dine, Drink And Rock

Source : The Business Times, June 17, 2008

The 5,000-seat entertainment centre to come up at one-north will be a world-class venue for big performances

FIVE thousand people yelling their heads off. Fists pumping the air. There will be a lot to shout about when Singapore gets another large entertainment centre in 2011, and concert and theatre fans troop in for the latest and brightest in performance acts, acoustics and lighting.

Plenty of fun: One Rochester, a wine and bistro chill-out outlet (above), and Min Jiang @ one-north, that serves Chinese cuisine. One-north is fast shaping up as one of Singapore's most vibrant venues for fine dining, cocktail-sipping and art galleries

For starters, the 5,000-seat centre won't be smack dab in the middle of the town, as one might expect. It will be at one-north, the area around Buona Vista that has been earmarked for massive development. Bringing the whole concert-going experience out of the city is part of the idea, say the developers.

'Our extensive research indicates an overwhelming need for a sizeable performance venue, away from the city and well-equipped with state-of-the-art facilities,' said Matthew Kang, director of Rock Productions, which will build, lease and operate a civic and cultural zone at one-north. 'The proposed high-tech theatre is expected to fulfil the needs of and attract these performing art and cultural groups.'

The place will be a 'world-class venue for staging large-scale performances, shows and events', he added. Rock Productions hopes it will become the new centre for artistic and cultural events, as well as meetings, conventions and exhibitions in Singapore.

The centre, to be operated by Rock Productions, is part of a larger Civic Cultural and Retail Complex located at Vista Xchange within one-north. The Complex is designed to stand out with space-agey architecture by Andrew Bromberg of AEDAS Hong Kong. It will have eight levels dedicated to the civic and cultural zone, run by Rock, and four floors to retail and entertainment, managed by CapitaLand Retail.

The Complex will be served by Buona Vista MRT station, as well as the future Circle Line.

CapitaLand's retail zone will have two floors above ground and two basement levels. Its open, spiral-stairway design will help show off its multitude of restaurants, food halls, cafes and fashion outlets.

'The zone is expected to benefit from the natural visitor catchments from the one-north communities, surrounding housing estates, as well as tertiary institutions close by,' said Pua Seck Guan, chief executive officer of CapitaLand Retail. It will also cater to 'the affluent crowd' from the nearby Bukit Timah, Holland Village and Rochester Park areas, he added.

'The open concept, set in a lush green environment, will create a new destination for art and cultural patrons, professional, academic and residential communities in one-north and people from various parts of Singapore,' he said.

Rustic and bohemian: Another corner of one-north that's attracting visitors is Village Square in Wessex Estate. Among its attractions is Ristorante Pietrasanta (left), which offers hearty Tuscan dishes such as veal tripe

While the Cultural and Retail Complex will be completed in three years' time, there's already plenty of fun to be had at one-north. The area is fast shaping up as one of the most vibrant venues in Singapore for fine dining, cocktail-sipping and art-gallery hopping.

Wide variety

Rochester Park, for instance, has been pulling in the crowds for some years now, thanks in part to its tranquil colonial setting. The cluster of old black-and-white houses converted into food-and-beverage outlets offers a wide variety of dining experiences - from Graze, which offers contemporary dining, to Da Paolo Bistro Bar, with its Italian cuisine, to Min Jiang @ one-north, which serves Chinese fare.

'We have grown in terms of global awareness,' said Cheryl Lee, co-owner and director of One Rochester, a wine and bistro outlet that was the first to open in the area in December 2005. 'We have been listed among the top 30 bars in the world in lists compiled by Forbes magazine.'

One Rochester has cleverly adapted its business to its old British residence, offering its premises as a kind of 'house', with different rooms and lounge areas called the Living Room, the Playroom, the Library, and so on. It also leases out its space for a variety of events, including birthday parties, weddings, wine tastings and corporate launches.

Another place aiming to offer a smorgasbord of experiences is Rochester Terrace, which describes itself as a 'gastronomic village'. It consists of four outlets at one stretch on the elevated side of Rochester Park, each offering a different dining and entertainment concept.

The first outlet, Twelve + One, will house a gourmet bakery, cafe and cooking studio. The second, Cassis, specialises in modern French cuisine; the third, Pinchos, is a wine bar that emphasises food sharing, thus featuring tapas and finger food; and the fourth, Minx, is a Russian caviar and vodka bar.

To date, Cassis and Pinchos are open, Twelve + One will open in the middle of July, and Minx will open in time for the Singapore Grand Prix season.

Mahesh Ramnani, chief executive officer of Rochester Terrace, said the Park is a 'great location'.

'The layout and milieu is unique, allowing us to create a graceful and relaxed setting,' he said. 'It brings back classic entertainment consisting of camaraderie, indulging in the company of friends.'

Another corner of one-north that's attracting visitors is Village Square, which is situated in Wessex Estate, another colonial enclave. Unlike the more high-end Rochester Park, the Village Square is more rustic and its various art studios and galleries such as Fringe Benefits, d'Art Studio and Geeleinan give it a bohemian feel.

There is also the legendary Colbar, which started life some 40 years ago as a British officers' mess and still attracts nostalgic diners with its ramshackle, retro setting.

Across the road from the Colbar is a swish new cocktail bar called Klee, which opened just earlier this year. Klee's cocktail servers are called 'mixologists' who pride themselves on using only premium spirits - Belvedere, Johnny Walker Black Label, Sagatiba - and fresh ingredients (bottled fruit juices are a no-no).

Occupying a happy spot between dining and art is the cosy Ristorante Pietrasanta, which offers hearty Tuscan dishes such as veal tripe and T-bond steak, and also sells the art works on its walls.

'We have a curator who takes care of it, changing the works of art every two or three months,' said Loris Massimini, who opened the restaurant with his wife Jennifer Tan.

Mr Massimini said business has been brisk since Pietrasanta swung open its doors in March. 'We are always fully booked during the weekends,' he said.

NY Skyscrapers May Go To Foreign Investors

Source : The Business Times, June 17, 2008

The weak US dollar has made the landmarks attractive to overseas buyers

(NEW YORK) The iconic Chrysler and Flatiron skycrapers may soon join New York's GM Building as landmarks sold in part to Arab or European investors as the weak US dollar spurs property grabs in the Big Apple, reports said last Friday.

On the block: The Chrysler Building (left) and Flatiron Building (right) are up for sale

The 50-story General Motors Building, constructed in 1968 and which includes the Apple Store on Fifth Avenue, has already been sold - for a record-breaking US$2.8 billion - to US real estate firm Boston Properties, backed by investors from Dubai, Kuwait and Qatar.

The deal, concluded last Tuesday, makes the GM Building the most expensive skyscraper in the United States, according to several reports.

The seller, Macklowe Properties, had been mired in debt after acquiring seven major New York properties last year for US$7 billion near the height of the real estate boom, before the subsequent real estate and credit crises.

According to The Wall Street Journal, the famed Chrysler Building could be next with the Abu Dhabi Investment Authority, a sovereign wealth fund, in talks with a subsidiary of Prudential Financial Inc to pay US$800 million for a 75 per cent stake in the Art Deco treasure.

Current owners Prudential and Tishman Speyer would not confirm or deny the report.

The midtown Manhattan trophy property was briefly the tallest building in the world when it was completed in 1930 until it was eclipsed the next year by the Empire State Building.

Prudential inherited the 75 per cent stake in the tower when it purchased TMW Real Estate Group in 2002. TMW had bought its stake in the building the year before for US$300 million.

The Abu Dhabi Investment Authority, one of the world's largest sovereign wealth funds, bought into US banking giant Citigroup, paying US$7.5 billion in November. It also acquired a substantial interest in home builder Toll Brothers, according to The New York Times.

An increased ownership stake in the Flatiron Building, built in 1902 as one of the first steel structures in the city, would be a feather in the cap of one of its shareholders, Italian building investor Valter Mainetti.

Through his Sorgente Group, Mr Mainetti would acquire 53 per cent of the building for approximately US$95 million, Time magazine reported.

Upheaval in the US real estate market has led to price drops in most regions of the country, and Mr Mainetti suggested that the weak US dollar made the triangle-shaped landmark particularly attractive.

'The Flatiron is expensive, but with the (cheap) dollar, it made sense to increase our share,' Mr Mainetti said in Time.

The euro was valued at US$1.54 last Thursday, compared with 1.33 a year earlier.

Mira Matic, a spokesperson for the property's owner, Newmark Knight Frank, confirmed that the Sorgente Group was in talks to raise its stake in the building, but 'terms haven't been agreed upon and a contract hasn't been drawn', she said. -- AFP

Ascott Opens Four New Apartments

Source : TODAY, Tuesday, June 17, 2008

THE Ascott Group has opened four new serviced residences in four countries across three regions in the first two weeks of this month.

They are the Somerset St Georges in Perth; Somerset Hoa Binh in Hanoi; Citadines Sukhumvit 8 in Bangkok; and Somerset West Bay in Qatar.

This means it has now opened a total of six new properties this year, having earlier launched two in China. Five more are slated for completion in Bangkok, Chennai and Singapore later this year.

Ms Jennie Chua, Ascott’s president, said: “The new properties will further consolidate Ascott’s position as the world’s largest international serviced residence owner-operator.”

Unitech Scraps S’pore Reit

Source : TODAY, Tuesday, June 17, 2008

The move follows Indiabull’s poor IPO performance

IN A sign of the times, a second Indian real estate firms is having cold feet about listing in Singapore in light of the weak stock market.

India’s second-biggest property firm, Unitech, has scrapped plans to list a US$600 million ($824 million) real estate investment trust here.

Its big rival, DLF, which is India’s biggest developer, did likewise in March, announcing it would delay its listing plans.

However, Indiabulls Properties Investment Trust went ahead and listed last week, only to be disappointed.

It raised less than what was hoped for in the IPO despite extending its offer deadline by a day in hope of attracting more retail investors. Its units then dropped 10 per cent on their debut last week and then needed to be supported by the IPO manager Deutsche Bank on day two of trading.

All these, despite the trust being backed by billionaire Lakshmi Mittal, one of the world’s richest men.

Instead of listing in Singapore, Unitech Managing Director Sanjay Chandra says his firm will seek US$300 million from private equity firms to build hotels and shopping malls in India this year.

Unitech said yesterday it had sold a 50 -per-cent stake in a Mumbai project to Lehman Brothers Holdings’s real estate fund for US$175 million.

Mr Chandra did not say when or whether the Singapore trust listing may be revived.

As of last week, 12 of the 15 new shares listing in Singapore this year were trading below their offer price.

The last firm to scrap its listing plans was Grand Pacific Properties earlier this month.

However, it’s not all bad news. Last week, it was reported that China-based New Century Shipbuilding plans to raise up to US$1 billion ($1.4 billion) in a Singapore initial public offering (IPO). This would be Singapore’s biggest IPO of the year to date. — Agencies

Phoenix Park Draws 'Arts Village' Bid

Source : The Business Times, June 17, 2008

But $165,000 bid way below top bid of $368,888

A SINGAPORE Land Authority tender for the former Ministry of Home Affairs complex off Tanglin Road has attracted 11 bids, one of which is a proposal for an 'arts village'.

The so-called 'creative commune' proposal - submitted by the Spa Esprit Group - is meant to pull together a collection of creative agencies and art groups, which would make it Singapore's largest 'creative eco-system'.

Home for the arts? Spa Esprit Group, which put in the second lowest bid, sees a 'creative eco-system' to incubate local talent

Spa Esprit Group wants to see the space used to incubate local talent. 'We need a lot more projects geared towards building and sustaining creative eco-systems,' says Chua Koon Beng, the group's financial director, who is also an artist.

Mr Chua, brother of Spa Esprit founder Cynthia Chua, told The Business Times that the group submitted one of the lowest bids based on SLA's guide rent. 'We did that in line with SLA's aim to put a downward pressure on office space rent, and so we can charge lower rents to tenants from the creative community,' he said.

'We think that for the project, the concept and proposed use of the space should be the most important criterion - not the rental yield. This is due to the scale and strategic location of the plot, which is right next to the Youth Olympic Village being built.'

The 641,851 sq ft site - the former headquarters of the Internal Security Department and Ministry of Home Affairs - houses 24 low-rise blocks with a gross floor area of 143,160 sq ft. The guide rent is $165,000 a month or $1.15 per square foot (psf) per month. Spa Esprit Group's submission was for $165,000.

Mr Chua said that the group's interest stems from a lack of 'creative eco-systems' run by a private party that is 'nimble and entrepreneurial'. 'Phoenix Park is a well located and has interesting architecture,' he says. Compared with Old School, which was also meant to draw together creative tenants, the Phoenix Park site is four times larger but has about the same amount of built-up space.

If Spa Esprit wins the bid, it will put together a mix of commercial and supportive spaces for various talents ranging from early stage to more mature set-ups, Mr Chua said.

'There will be commercialisation opportunities without pressure on artists and creative talents to sacrifice their artistic integrity, and also marketing and PR support to communicate and build a brand with local and international appeal to draw in the relevant crowd,' he said.

Spa Esprit Group has the track record, he reckons, highlighting how the group's House at Dempsey Village has been featured in international art, design and architecture magazines such as Azure and Wallpaper.

He believes that there is no shortage of local talent for the creative commune idea, but thinks that there has not been coherent and integrated support for such talent to grow commercially. 'Now that there's a focus on arts education, with the School of The Arts opening, the new campuses for Lasalle-SIA College of the Arts and Nanyang Academy of Fine Arts, we will have much more creative young talent entering the market over the coming years,' he said.

Although the group's bid is the second-lowest, Mr Chua does not think government land should be tied to just commercial projects. It should be a 'use and concept that is more aligned to nation-building', according to him.

Phoenix Park is attractive to bidders because the buildings are ready to be occupied. Among the 11 bidders, LHN Facilities Management made the highest bid of $368,888. Other bidders include Richzone Properties Investment, which converted the former Pasir Panjang ITE into modern office blocks after being awarded the 265,000 sq ft site for $288,999 or $1.30 psf per month.

Another bidder for Phoenix Park is Country City Investments, which built and manages the food, beverage and lifestyle enclaves Dempsey Hill and Dempsey Hill Green in Tanglin Village.

A previous plot tendered by SLA, for the former Monk's Hill Secondary School, received seven bids and drew a top bid of $211,328 per month or $2.52 psf per month. This was 43 per cent above SLA's guide rent of $147,300 per month or $1.76 psf per month.

MGPA Closes US$5.2b Asia, Europe Fund

Source : The Business Times, June 17, 2008

Fund to invest in Marina View project, which will have 2m sq ft of offices

MGPA - formerly known as Macquarie Global Property Advisors and one of the biggest real estate investors in Singapore last year - has announced the final closing of MGPA Fund III with commitments for total equity of US$5.2 billion.

This war chest potentially gives the fund a buying power of US$20.8 billion, assuming 75 per cent gearing.

Mr Treacy: Sees corporate as well as real estate opportunities in Asia

Among the acquisitions that the latest fund will finance is the equity portion of MGPA's development of Marina View land parcels A & B in Singapore - which will have two million square feet net lettable area of offices - and the purchase of units at the 8 Napier condo near Botanic Gardens, MGPA Asia Investments CEO Simon Treacy confirmed to BT yesterday.

MGPA is a private equity real estate investment advisory company.

The Marina View project, with a total investment sum reported in March this year to be around $5 billion, will have two office towers, a 250-room luxury hotel plus some retail space.

'We see a significant number of international banks, particularly in the wealth management sector, being interested in this type of office space,' Mr Treacy said.

The project is expected to be completed in two stages in 2011 and 2012 - which will contribute to an anticipated spike in Singapore's office space. But Mr Treacy said: 'We believe that the market has completely under-estimated the level of demand and that the level of future supply will be eaten up very quickly.'

He is also sticking with his forecast made in March that prime-grade Singapore office rents will appreciate between 10 and 25 per cent this year after last year's 80-90 per cent surge.

Mr Treacy also maintains that Temasek Tower, which an earlier MGPA fund bought for $1.04 billion early last year, is a long-term investment.

The latest US$5.2 billion MGPA Fund III comprises two regionally based private equity property funds - the US$1.3 billion or 841.5 million euro (S$1.79 billion) MGPA Europe Fund III, and MGPA Asia Fund III, which has raised US$3.9 billion, of which 56 per cent or US$2.2 billion is already committed to investments in Singapore (Marina View project and the 8 Napier condo units), Japan, China and Thailand in the office, retail, residential, hotel and logistics sectors.

In addition, the new Asia fund has opportunities under consideration in South Korea, Malaysia, Taiwan and Australia.

'Now that we've got one of Asia's largest private equity real estate funds, we have a lot of driving power and we can be patient because pricing is getting more favourable for us,' said Mr Treacy.

'We see also corporate opportunities as well as real estate opportunities reflecting the ongoing credit crunch in the overall Asian market.'

As for the MGPA Europe Fund III, 103 million euros of the total 841.5 million euros raised has been committed to investments in the residential sector in Wroclaw, Poland, and a strategic development site in Athens, Greece. The fund has a mandate to invest in the 27 European Union member states, Switzerland and Norway.

The total US$5.2 billion total equity commitments for the two regional funds have been raised from more than 65 investors and include a substantial number of renewed commitments from existing investors in North America, Australia, Europe and the Middle East.

'MGPA has attracted a broad range of investors including corporate and public pension funds, insurance companies, foundations and endowments looking for exposure in the European and Asian real estate markets,' the company said.

'Old Money' Props Rise In Luxury Home Sales

Source : The Business Times, June 17, 2008

Prices hold firm surprisingly; investment climate may have stabilised, analysts say

Developer sales of new homes jumped to 441 units in May from 284 units in April, with some property consultants already calling it a 'sharp rebound'.

While May sales were still relatively low compared to 2007 levels, several launches in prime and city-fringe locations did well.

Strong take-up: At UOL's 100-unit Nassim Park Residences, 39 of 70 units launched were sold in May at a median price of $2,929 per square foot, URA data show

According to Urban Redevelopment Authority (URA) data, at UOL's 100-unit Nassim Park Residences, 39 of 70 units launched were sold at a median price of $2,929 per square foot (psf). Sources also told BT that most of these units were sold to Singapore's 'old money'.

Savills Singapore director (marketing and business development) Ku Swee Yong said: 'Based on what we have seen in the past few months, high net worth individuals (HNWIs) have not been affected by the slowdown in the global economy.'

While these buyers may be more 'picky' now, 'they don't want to wait for prices to fall just to save 5 per cent', he said. And with banks generally offering low interest rate returns, these HNWIs are looking to 'park' their money in real estate instead.

A check with UOL revealed that since last week, Nassim Park Residences has been marketed overseas and more than 50 units have now been sold. UOL Group's general manager of marketing, Dolly Lian said that as things stand, more than 30 per cent of the buyers are foreigners and the average selling price is $3,300 psf. This is higher than $3,000-$3,200 psf average selling price that some market watchers expected.

It is understood that most of the foreign buyers are from Indonesia.

Another popular development in May was Macly Group's 102-unit Vutton, with 72 units sold at a median price of $1,225 psf. A market watcher said this is in the same price range as UOL's Pavilion 11, also off Moulmein Road, which was sold in 2007.

Also selling well in May was Ascend Land's 106-unit The Verve, off Balestier Road. During the month, 42 units were transacted at a median price of $985 psf. According to URA data, 84 units have been sold so far. In April, eight units were sold at a median price of $1,055, while in March the median price was $1,187 psf.

Collier's International's director for research and advisory Tay Huey Ying said that while the rebound in sales activity could be 'just a monthly fluctuation, it may also be a sign that most genuine buyers have come to accept that the current price levels have reached a fair level'.

Ms Tay noted that the number of new launches increased 74 per cent in May from April. 'This encouraging response could be just what is needed to trigger more of such launches in the coming months,' she said.

She added, however, that developers will remain cautious with regard to pricing, 'as buyers in today's market tend to be price-sensitive'.

CB Richard Ellis executive director (residential) Joseph Tan said: 'Based on the transactions in May, contrary to market expectations, there was no downward adjustment of prices.'

Luxury prices in particular 'seemed to hold firm' as projects like Boulevard Vue, Scotts Square and Nassim Park Residences maintained $3,000-psf levels, he said. And in the eastern and western parts of Singapore, prices held at $800-$900 psf at projects including Breeze by the East, Blu Coral, The Ambrosia, The Lakeshore and Crystal Heights.

Still, not everyone was as sanguine about the state of the property market.

Knight Frank director (research and consultancy) Nicholas Mak said that while total new sales in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) rose 60.9 per cent month on month, the OCR saw a 14.6 per cent drop in sales volume month on month.

According to Mr Mak: 'Essentially, the slight rise in sales volume can be attributed to some stability in investment sentiment. However, it should be noted that this escalation is still 32 per cent below the 12-month average figure.'

Looking at take-up rates (new sales versus new launches) in the three regions, Jones Lang LaSalle local director and head of research (South-east Asia) Chua Yang Liang said these were 87 per cent for CCR, 84 per cent for RCR and 146 per cent for OCR.

He said the strong take-up rates in CCR and RCR were a result of 'latent demand spurred on by softening prices', while the take-up rate in OCR was 'the result of low supply of new launches over what appears to be a minimum demand threshold - an average of 113 units over the past six months - in the region'.

Private Home Sales Jump In May

Source : Channel NewsAsia, 16 June 2008

There has been a sharp pick-up in the number of private home sales in May - more than 441 homes changed hands, about 56 per cent higher than the previous month.

Despite the spike, analysts said it is premature to talk about any strong rebound in the property sector.

Colliers International's director of research and advisory, Tay Huey Ying, said: "I wouldn't say that this set of May numbers give a positive indication that the market is moving. But I think looking at last six months' developer launches and sales volume, the market has reached a stable state, with launch volumes at 400-450 range, and sales volumes at 300-350 range.

"The fact that market can reach this consistently, despite prices remaining stubbornly firm, this means that the current price levels are well supported by homebuyers."

Analysts added that even though May numbers come as a pleasant surprise, this bump upwards is also typical of the yearly property cycle.

Propnex Realty CEO Mohamed Ismail said: "The number has picked up a fair quantity compared to April. Generally speaking, the second quarter usually does better than the first quarter. Things start to pick up, and in the month of April, May, June, July, one can expect (the) numbers to grow."

Ms Tay pointed out: "Monthly fluctuations in developer sale and launch volume (are) to be expected. But this set of May numbers... is indeed a very pleasant surprise."

About 61 per cent of homes sold in May were under S$1,000 per square foot, suggesting that purchasers are genuine homebuyers, rather than speculators.

Analysts said a large decline in prices is unlikely going forward, although a marginal dip of one to two per cent may be possible.

"This is, to an extent, a buyer's market. On the other hand, developers are not bringing the price down drastically. Many (are) holding prices because (the) fundamentals of economy and demand of such properties (are) still there. So I don't expect prices to slide down," said Mr Ismail.

Knight Frank and CB Richard Ellis also noted that prices have stayed firm, contrary to market expectations.

Although some analysts called this a buyer's market, they also noted that sellers are taking a more measured approach.

Colliers said developers are likely to stay off launching luxury and super luxury projects until there is a clearer sign of market recovery. - CNA/ac

Dismal Private Property Sales Despite Lower Prices

Source : TODAY, Tuesday, June 17, 2008

PRIVATE property sales by developers remained weak last month, with 441 units sold.

That may be up 55 per cent from the 284 units sold in April, but over 3,000 new units remained unsold. That was despite developers cutting their prices for homes in 18 developments last month. Median prices for The Verve along Jalan Rajah, for example, dropped 17 per cent from $1,187 per sq ft (psf) in March to $985 psf in May.

Mr Colin Tan, Chesterton International’s research and consultancy head, said: “Presently, the market is dominated by investors rather than owner-occupiers because current price levels are beyond the affordability of most owner occupiers.

“To nibble at this investors’ market, developers will have to lower prices and have to continue to lower them to sustain sales,” he said. “A one-off price reduction may generate some sales but it will stagnate once that segment with that certain level of risk appetite is secured or captured.”

Some developments still saw fairly good sales last month. DTZ Debenham Tie Leung’s research senior director Chua Chor Hoon named Vutton at Akyab Road and Orchard Scotts as examples, but noted that some developers were holding off from new launches.

Property analysts expect smaller listed developers to lower prices first, as they will be under pressure to boost earnings.

As for leasing, Cushman and Wakefield’s Singapore managing director Donald Han said: “Contrary to the widely held perception that the rental market is still hot, it has already stabilised. The overall vacancy level is slowly rising as more units are completed.”

New Private Home Sales Up 55%

Source : The Straits Times, June 17, 2008

Highest monthly figure so far this year follows softening of prices, surge in total units launched

SINGAPORE'S private residential property market has started showing some signs of life after several months in the doldrums, thanks in part to an easing of prices.

Last month, developers sold 441 new homes, excluding executive condominiums, a sharp 55 per cent jump on the figure for April - albeit a low base - of 284 home sales.

That made May the best month so far this year, according to the monthly sales figures released by the Urban Redevelopment Authority yesterday.

The improved sales came on the back of 474 new homes launched by developers - a 75 per cent surge over April - though many of the units sold were from earlier launches.

Still, consultants caution against reading too much into the latest figures. They say the market is generally still taking a breather, as many buyers prefer to stay on the sidelines.

Sales have improved from a very low base but they remained 32 per cent below the 12-month average, said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

The figures 'do not necessarily imply that the private residential market has overcome the protracted lull sparked off by global economic woes', he said.

'The market is still at a plateau. Going forward, we will still see range- bound prices and volume of between 300 and 600 units a month. Sentiment is still very cautious,' he said.

Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, said median prices have eased.

The chief executive of PropNex, Mr Mohamed Ismail, said that most May sales were done at a median price of below $1,000 per sq ft (psf), a stark contrast to the end of last year when the median price of almost two-thirds of all sales was over $1,000 psf.

'Upon closer scrutiny, we can see that less than 50 per cent of the units launched were actually sold.'

Also, slightly over half the sales were from earlier launches, he said.

Still, there are a few bright spots. While some are struggling to sell, developer Macly Group sold 72 out of 102 units of Vutton in the Novena area at $1,057 psf to $1,416 psf.

In the luxury market, the 100-unit Nassim Park Residences is the star performer, logging in sales of over 50 units since its soft launch at end-May.

As these are large apartments, prices range from about $10 million to a whopping $19.5 million, sources said.

The prime Nassim Road project - being developed by UOL Group, Kheng Leong and Orix Corp - has already hit a high of $3,800 psf - far better than its low of $2,318 psf.

One buyer is Mr Wee Ee Cheong, son of UOL chairman Wee Cho Yaw, who bought a penthouse for $18.33 million.

Just over 30 per cent of the buyers are foreigners. The project has already been launched in Jakarta and Hong Kong, said UOL.

Another luxury development Scotts Square in the Orchard area registered sales of four units at a median price of $3,818 psf last month.

The relatively strong sales in central Singapore were the result of 'latent demand spurred on by softening prices', said Dr Chua.

'Going forward, we reckon that developers are likely to keep prices competitive to keep the market demand stable,' he said. As long as prices remain affordable, price-sensitive buyers will return, he added.

Savills Singapore's director of business development and marketing, Mr Ku Swee Yong, said the level of transactions and price levels seen last month are sustainable.