Tuesday, June 24, 2008

China May Start Reit Next Year: Industry Group

Source : The Business Times, June 24, 2008

Move could lead to the listing of US$60b worth of buildings in 5 years

China could kick-start a property trust market next year to give its pension funds and insurers an alternative to volatile stocks and meagre returns from government bonds, according to an industry group.

Mr Mitchell: The trusts are expected to be externally managed

The move could lead to the listing of as much as US$60 billion worth of buildings in the form of real estate investment trusts (Reits) over the next five years.

And although it is unclear whether overseas investors would be allowed to invest in the securities, foreign property funds in China are keen to see new potential buyers for the office blocks and shopping centres they are accumulating.

Stock market watchdog China Securities Regulatory Commission (CSRC) sent a delegation to Australia in May to study property trusts, and is working with other authorities, including the central bank, to draw up legislation.

The trusts will probably be externally managed, in line with the Singapore and Hong Kong model, said Peter Mitchell, head of the Asian Public Real Estate Association, which is advising the CSRC on the matter.

'A pilot Reit could possibly get underway next year,' Mr Mitchell said. 'They see pension funds and insurance companies as the main investors, as well as the man on the street,' he said.

Property trusts, which pay most of their rent as dividends, have been long- established in the United States and Australia, but have caught on across Asia over the last five years as commercial property markets rode a cyclical upswing.

Asian Reit market capitalisation has grown to around US$80 billion, but unit prices have dropped this year - by as much as 24 per cent in Japan - as investors demand higher rental yields to compensate for rising bond yields and inflation.

However, China is pushing ahead with Reits because insurers and pension funds are desperate for the stable returns that they offer to match long-term liabilities. Reits tend to yield more than bonds, and offer capital gain if property values rise, but are typically less volatile than stocks.

Beijing is talking about allowing insurance firms to invest in property; but at the moment, they are only allowed to invest in stocks, bonds and deposits.

Flush with US$300 billion for investment, insurers could spend as much as US$30-40 billion on Chinese commercial property if they followed global industry norms of 10-15 per cent portfolio allocations to property.

If China's Reit market grows along the lines of Japan's, it could be worth some US$60 billion in five years time.

But the experience of RREEF China Commercial Trust, one of three Reits with Chinese assets listed in Hong Kong and Singapore, demonstrates the possible risks ahead for the market.

Last year, the trust found that tenants in its newly acquired Beijing office block - its only asset - paid less rent than expected and blamed the former landlord's team for falsifying lease agreements and tampering with tenant replies during due diligence.

The trust saw its share price plunge by as much as 44 per cent below its initial public offering in the aftermath. It cut the valuation of its building, the twin 25- storey Beijing Gateway Plaza, and sought compensation from the former landlord.

Although Chinese authorities are keen to set up a stable and transparent Reit market, they may not introduce the same tax breaks and trustee structure common in most markets, said Andrew Weir, head of China property at consultants KPMG.

'It might look like a Reit and smell like one but when you delve down, it might not have all the characteristics,' Mr Weir said.

State-owned enterprises (SOEs), keen to trim their balance sheets, would be prime candidates to set up property trusts.

And developers, squeezed by a clampdown on bank loans by a government bent on cooling the housing market, would welcome them as another source of capital. -- Reuters

Global Inflation Will Put Brakes On World Economy: Henderson

Source : The Business Times, June 24, 2008

Rising food and oil prices due to supply shortage

MOVE over 'credit crunch', the latest catchphrase of doom is 'global inflation'.

According to Henderson Global Investors, global inflation, fuelled by rising oil and food prices, will put the brakes on the global economy in the near future.

'Global inflation is now at 6 per cent, and we expect it to become even higher than that,' said Tony Dolphin, director of economics and asset allocation at Henderson, an independent asset manager of US$117.8 billion worth of assets.

Mr Dolphin said that the twin threats of soaring food and oil prices stemmed from the inability of supply to meet demand, as well as loose monetary policies.

'Monetary policies have been lax, particularly in developing and emerging economies, which led to rapid economic growth - the strongest since the early 1970s. Despite tightening labour markets, wage inflation remained under control, but the price of commodities has risen as producers could not keep up with demand,' Mr Dolphin explained.

With oil prices on the rise, he reckons that global growth is bound to slow down.

'The world can't increase its oil supply fast enough for China to keep growing at 12 per cent a year and for the world to keep growing at 5 per cent a year,' he said.

While financial markets are expected to remain volatile, there remain some safe havens for investors seeking respite from inflation, especially in Japanese equities.

'Inflation in Japan is at its peak of just over one per cent and has the least to fear from rising food and energy prices,' said Mr Dolphin, who recommended a strategy of being overweight in Japan, equity-wise.

Also, it appears to be one of the least vulnerable countries where oil price hikes are concerned, given its energy efficiency.

'Despite Japan's economy's under-performance, its equities have been in line with the developed markets,' said Mr Dolphin.

This is in stark contrast to Europe, where the fund recommends an underweight strategy for equities.

'The Europe market is quite vulnerable to inflationary pressures. And the strength of the euro will have detrimental effects on the earnings of its exporting companies,' he said.

Even so, equities are not the safest hedge against inflation.

'While inflation can lead to higher earnings being reported for firms, even higher inflation causes the quality of earnings to deteriorate, because it is uncertain whether it is good fundamentals or inflation driving higher earnings,' Mr Dolphin said.

New-Concept JTC Factory Aims To Save Cost And Space

Source : The Business Times, June 24, 2008

'Practical' hoisting system to replace expensive cargo lifts

In a move that could optimise land use and help businesses save on rentals, JTC Corporation has come up with a new concept for a 'small footprint high plot ratio' standard factory to cater to small and medium-size enterprises (SMEs).

This factory is likely to be three storeys high, and take up a floor plate of 400 sq m.

With a total floor area of 1,200 sq m, the standalone facility would have a plot ratio of 1.3.

In contrast, JTC's standard factories today stand at two-and-a-half storeys, with a total floor area of between 1,200 and 4,200 sqm. Plot ratios range from 0.8 to 1.1.

Businesses, particularly those in heavier industries, tend to prefer larger ground floor space for the movement and storage of goods.

To address this need, JTC's concept includes a hoisting system that goes through every floor, to facilitate the movement of goods.

This system replaces the more expensive cargo lifts. The hoist is 'a practical and more economical option', says Colliers International managing director Dennis Yeo.

'For the new prototype factory, land rentals will definitely be lower than that of the existing standard factory in view of its smaller footprint and therefore smaller land take-up,' says a JTC spokesperson.

'The actual rentals will depend on the market situation when the new factory is launched.'

The building rent for JTC's standard factories ranges from $7.35 per sq m per month to $14 psm pm, and comes on top of land rent. Rents vary according to location.

To help reduce outfitting costs, the new factory concept would come with bolting points and corbels for companies to install customised handling systems, without having to obtain structural approvals.

And the switch room would be located on the roof top to free up more ground floor space.

'Small footprint high plot ratio' factories target SMEs which require smaller floor areas but cannot fit their operations into high-rise environments.

'Hence, this new factory design serves a different market segment from those in the flatted factories,' the JTC spokesperson says.

According to Soilbuild Group Holdings executive director Low Soon Sim, the design may be suitable for light engineering industries.

The concept is still under feasibility study. JTC will seek industry feedback in the third quarter before working out the details.

Knight Frank's senior manager of industrial business space Chow Kok Seng points out that heavier industries tend to handle bulkier goods, so a conventional hoisting system may not be suitable for them.

For instance, a company in a three-storey facility, Dynasty Lift Trucks Services, told BT that its hoisting system cannot carry items heavier than two tonnes.

It is looking to shift to a factory with a larger ground floor space to facilitate the handling of its goods.

The new factory concept comes as JTC looks for cost- and space-saving real estate solutions to maximise Singapore's limited land resource.

The idea could also catch on in the private sector. 'By coming up with this new concept, JTC will help to encourage private developers to adopt such a design for their standard factories,' says Mr Yeo.

Europe Commercial Property Dips

Source : The Business Times, June 24, 2008

But price drop unlikely to be as much as in the UK, says CBRE

(LONDON) Commercial property prices on the European mainland are adjusting downwards in the wake of a global credit crunch but are unlikely to fall by as much as in the UK, a senior executive of CB Richard Ellis said yesterday.

'We are seeing elements of repricing but the repricing is not as severe as in the UK because it does not need to be as severe to get back to equilibrium,' said Mike Strong, president of CB Richard Ellis in Europe, the Middle East and Africa (EMEA), at the Reuters Global Real Estate Summit.

CB Richard Ellis, a constituent of the S&P 500 Index, is the world's biggest property services firm and generated about a fifth of its revenues last year in the EMEA region.

Mr Strong said that British commercial property values - down an average 18 per cent since last summer, according to Investment Property Databank - had started from a higher starting point after a vintage bull run.

'On the up, none of the (other) European markets went over the tipping point. One or two of them got close but none of them went over . . . the point of unaffordability. Say the UK has shifted 100 basis points, then mainland Europe would have shifted by between 30 and 50 basis points . . . so the wind back is less,' Mr Strong said, referring to property yields which have risen by around a percentage point in the last year.

He said that if yields - which measure rental income in relation to capital values and move inversely to price - were currently about 5.4-5.7 per cent for prime office property in central London, the equivalent in central Paris was in the 'mid-to-high 4 per cents', Mr Strong said.

But he said that direct comparisons with the UK were misleading because property investors had access to cheap debt.

'You cannot directly compare European mainland yields with London because the arbitrage between the cost of money and property yields is different,' he said.

Five-year sterling interest rate swaps - a benchmark for property borrowing costs - are currently trading at around 6.1 per cent, compared with 5.1 per cent in the case of euro interest rate swaps, according to Reuters data.

When asked where he would put his money, Mr Strong nonetheless singled out the central London office market.

'I think, selectively, there is value in London,' Mr Strong said.

'I agree with the Kuwaitis,' he said, referring to the £pounds;400 million (S$1.07 billion) purchase last month of the Willis Building in London's financial district by the property investment arm of the state of Kuwait. -- Reuters

Waterside Homes Win Design Nod

Source : The Business Times, June 24, 2008

PINGGIRAN Bayou Village Homes, a 2.7-hectare enclave of 122 courtyard homes in the Malaysian town of Gelang Patah, has won the Fiabci Prix d'Excellence 2008 Award in the Best Residential category.

Resort-style living: Located 15 minutes away from the Second Link, Pinggiran Bayou is a gated residence lining a linear waterway and fronting the Canal Park

Past winners of the award include New York's Trump World Tower, Australia's Twin Waters Sunshine Coast and Singapore's Caribbean Bay at Keppel.

Located 15 minutes away from the Second Link, Pinggiran Bayou is a double-gated, guarded community lining a linear waterway and fronting the Canal Park. It is a development within the Leisure Farm Resort owned and developed by Mulpha International Bhd. The Leisure Farm Resort aims to bring nature to the doorstep by setting its facilities against 113.3-ha of natural mangrove, canals, orchards and plantations. It has previously received several local and international awards recognising its commitment to being eco-friendly.

Also in the pipeline for the resort, which already includes a 36-hole championship golf course and a 10.1-ha equestrian and country club, is a five-star hotel and a marina complex for waterfront living. When completed, the 710.6-ha freehold property is set to have a population of 30,000 people. 'We found that the social effect was better when you have a density of less than 22 units per acre, so we limited Pinggiran Bayou to 122 units in six acres, to have a better chance of creating a community,' said Mulpha International's property division general manager, Ronn Yong.

Lian Beng Wins Construction Contracts Worth S$117m

Source : Channel NewsAsia, 23 June 2008

Construction firm Lian Beng Group has won three new construction and civil engineering contracts worth a total of S$117 million.

Two of the deals are for construction projects in the private residential sector.

The first contract, worth some S$36 million, is awarded by Sing Holdings for the construction of Bellerive Condominium, a private residential development located at the junction of Keng Chin Road and Ewe Boon Road.

Lian Beng will build 51 apartment units within a 15-storey block and work is scheduled to be completed by July 2010.

A second deal, worth S$50.4 million, is from Lafe (Emerald Hill) Development to construct 33 private residential apartments at Emerald Hill Road, which is due to be finished around the fourth quarter of 2010.

The group has also secured a S$30 million civil engineering project, which was awarded by the national water agency PUB for a part of Singapore's network of NEWater pipelines.

With these latest contracts, Lian Beng's order book stands at about S$800 million. - CNA/ms

Healthy Weekend Home Sales As Attractive Pricing Draws Buyers

Source : The Straits Times, June 24, 2008

Price levels set below those at nearby units launched recently or not yet completed

THE anaemic property market received a shot in the arm during the weekend, with robust sales and buyers keen to show that they will still deal if the price is right.

BUSY TIME: Huge crowds visited the show-flat for Dakota Residences during the weekend, with more than 80 units of the 99-year leasehold project in Kallang sold since Saturday morning. -- PHOTO: HO BEE

Suites 123 at Rangoon Road was sold out - a rarity these days - while Oxley Ventures offloaded 50 units of Parc Sophia in Adis Road. Sales were also healthy at Dakota Residences in Dakota Crescent.

Market watchers said the sales at these mid-market projects show that homebuyers can be drawn off the sidelines if prices are attractive.

'Buyers will bite if you price your developments below recently launched or yet-to-be completed projects nearby and about 10 to 15 per cent above older properties in the vicinity,' said Savills Singapore's director of business development and marketing, Mr Ku Swee Yong.

Ho Bee Investment and NTUC Choice Homes have sold more than 80 units of the 99-year leasehold Dakota Residences since Saturday morning.

The developers released 122 units in the 348-unit project at an average price of $970 per sq ft (psf) - under the $1,100 or so they wanted a year ago.

Said an investor who went to the launch on Saturday: 'This project is not exactly cheap. What it offers is value for money, especially in view of the makeover plans for Kallang.'

Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, added: 'Another reason the project did well in the current market was pent-up demand. It shows that there are people on the sidelines who are waiting to come out to buy at the right price.'

Suites 123, a 43-unit development marketed by Huttons Real Estate Group, was sold out yesterday.

The 37 residential units next to Little India and Farrer Park MRT station went for $940 psf to $1,277 psf, while the six shop units fetched between $375,000 to $595,000.

In the Mount Sophia area, buyers snapped up all 50 flats released at the 152-unit Parc Sophia over the weekend. Prices ranged from $1,500 psf to around $1,650 psf, or between $742,000 and about $1.2 million.

Developer Oxley Ventures, which is also behind Zenith in Zion Road and Tyrwhitt 139 in Tyrwhitt Road, offers an interest absorption scheme. It lets buyers postpone the bulk of their payments on new purchases.

Listed developer Sim Lian also started sales at the The Amery, a 74-unit development in Telok Kurau at the weekend. It sold 16 out of 39 launched units at an average of $860 psf, or between $1.16 million and almost $2 million.

More launches are expected in the next couple of weeks, including mass-market projects such as the 724-unit Livia in Pasir Ris and the 616-unit Clover by the Park in Bishan.

Meanwhile, the Strata Titles Board gave the go-ahead yesterday for the collective sale of the 342-unit Minton Rise. Kheng Leong, which bought the site early last year, plans to build 1,300 flats for launch next year.

Lippo To Invest US$10b In Asia Over 5 yrs

Source : The Business Times, June 24, 2008

Two-thirds of funds will be allocated to emerging markets

Indonesian conglomerate Lippo Group said yesterday it remains bullish on Asian property despite a slowdown, and plans to invest US$10 billion on projects and acquisitions over the next five years.

The group is targeting retail, residential, hospital and hotel projects, and also distressed property firms.

It will allocate two- thirds of the funds to emerging markets like China and Indonesia, and the remainder in developed markets such as Hong Kong and Singapore.

'We're still very bullish about the market. This downturn is just part of the economic cycle, and a huge opportunity for us to expand in the next 1-2 years,' Lippo Group president Stephen Riady said at the Reuters Global Real Estate Summit in Singapore.

He said the group will fund its growth mainly from internal resources such as the sale of non-core assets and listing of real estate investment trusts (Reits), and will limit loans from banks as borrowing costs rise amid a global credit crunch.

The Lippo Group currently has about 70 per cent of its assets in Indonesia, where its listed units include Lippo Karawaci and Lippo Cikarang, two satellite town developments near Jakarta with their own hospitals, universities, malls, housing, offices and even golf courses.

The group has two Singapore-listed Reits: First REIT, which is backed by Lippo's Indonesian hospitals and raised US$64 million in its initial public offering in 2006; and Lippo- Mapletree Indonesia Retail Trust, which raised US$356 million last November and is backed by Indonesian shopping malls. -- Reuters

Office Rents To Rise 10%: RREEF

Source : The Business Times, June 24, 2008

But no hike next year as new supply from key projects starts coming in

OFFICE rents here are expected to rise a further 10 per cent or more this year - before growth all but disappears in 2009.

According to a report by Deutsche Bank's property arm RREEF, rental growth is expected to 'evaporate' by 2009 as extensive new supply starts to come onstream from projects such as the Marina Bay Financial Centre (MBFC), Ocean Building and Marina View.

Upcoming bay views: Artist's impression of the Marina Bay Financial Centre

From 2010 to 2012 - when the market adds 570,000 square metres of new Grade A office space - Grade A stock is expected to increase 25 per cent, the report says.

'The vacancy rate, currently near one per cent, will shoot up to 2005 levels by the time this new wave of supply is all brought on line,' it adds.

RREEF expects rent momentum - the 'general momentum behind the potential changes in rent, not an absolute variation in rates' - to decrease in 2010 and 2011, then stabilise in 2012.

In its report, Asia Pacific Property Cycle Monitor, it says each property sector has a clearly identifiable cycle with four main phases:

# recovery (high but declining vacancy rates - stable to rising rents);

# growth (low and declining vacancy rates - rising rents supportive of construction);

# post-growth (low but increasing vacancy rates - rising/flattening rents); and

# contraction (high or increasing vacancy rates - falling rents).

'The office market has the greatest volatility of the three main commercial sectors,' says RREEF. 'The retail and industrial sectors are less volatile due to the relatively high levels of owner-occupation, with less investment activity and limited modern supply, particularly in the industrial sector.'

While the office sector is currently still in the growth stage, a post-growth stage is expected in 2009, followed by two years of contraction, and finally recovery in 2012.

On the upside, the retail property sector is expected to remain in the growth stage until at least 2012.

RREEF attributes this to a 'broad construction boom' and 'robust economy'. 'Two new malls in the Orchard Road area will join the island's existing stock of dated retail space in 2008, which could spur structural change in the market,' it says. 'Extensive pre-leasing of this space will keep Singapore's retail vacancy rate steady in the one per cent range.'

RREEF expects retail rental growth to average 3 per cent per annum between now and 2012.

It also sees the industrial property market booming - especially business parks. It projects growth until 2010, when a post- growth stage will kick in until at least 2012. Rents, which grew at double-digit levels in 2006 and 2007, should continue to rise this year, before the rate of increase tapers off to single digits.

While the spillover effect from the office sector has led some companies to turn to business-park space for their back-office operations, RREEF reckons that this effect will 'diminish' when the large supply of new office space comes onstream from 2010.

It also adds a note of caution: 'While it poses no immediate competitive threat to Singapore, Malaysia's long-term plan to develop the Iskandar Development Region in Johor will be a project with structural implications for Singapore, and its progress should be monitored over the long-term.'

Singapore Property Market Approaching Peak: Report

Source : The Business Times, June 24, 2008

SINGAPORE is still a safe haven for property investments but a market peak is approaching, Pacific Star says in a recent report.

The Singapore-based property group is most bullish on the retail sector here, recommending that investors add to investments in that segment. The residential and office sectors, on the other hand, are rated 'neutral'.

In the same vein, OCBC Investment Research reiterated its 'neutral' view on the residential sector here in a June 12 report.

According to Pacific Star, the retail market here is tightening. Vacancy rates have fallen to levels not seen since 1993 and rents continue to climb slowly, with an increase of one per cent in Q1 this year, after a 0.6 per cent rise in Q4 2007.

Retail spending is expected to increase in line with growing tourism and rising incomes.

'Marketing agents report that Orchard Central and Ion Orchard, two prime (upcoming) shopping centres in Orchard Road, are attracting strong rental enquiries from retailers that currently do not operate in Singapore,' Pacific Star's report said. 'Rents at Ion are expected to significantly surpass current prime retail rents.'

For the office sector, the current demand-supply imbalance is expected to support rents till 2009, said Pacific Star. 'Office demand is still firm with leasing agents lamenting the lack of available space rather than a lack of enquiries, although the number of enquiries would have fallen somewhat.'

But an above-normal supply of office space will put pressure on rents from 2010, even if growing demand from the services sector prevents any excessive correction, it said.

In the residential segment, Pacific Star expects the current stupor to continue, as there are few catalysts for the rest of 2008. It believes prices and transaction volumes will continue to soften for the rest of the year.

However, the initial catalysts for recovery are expected in 2009, when Singapore's economic growth is expected to exceed that of 2008, according to Pacific Star.

The recovery will be fuelled by immigration and higher incomes that will make it more affordable for Singaporeans to buy mid and high-end private homes, it said.

In a report on the residential market here, OCBC sounded a warning, saying past trends point towards another price correction over the next few quarters.

On the other hand, interest in mass market properties should come back, said OCBC.

'Given that only five projects with total of 1,139 units are expected to be launched in the outside central region between Q2 2008 and Q3 2008, this should ease concerns of oversupply and drive the take-up rate higher over the next few quarters,' analyst Foo Sze Ming noted.

Subsales Carve Out Bigger Slice Of Home Deals

Source : The Business Times, June 24, 2008

In some popular projects, average subsale prices slipped by up to 5% in the first five months

Subsale volumes are down amidst a quieter property market, but a new study by Jones Lang LaSalle shows that in most parts of Singapore, subsales actually rose as a percentage of total private apartment and condo sales in the first five months compared with last year.

Driving the trend have been players who bought properties from developers on deferred payment schemes (DPS) but who are seeking to exit the market as projects near completion.

In some popular projects such as Icon, Marina Bay Residences, 8 @ Mt Sophia, Park Infinia at Wee Nam, The Grange, One Amber and The Sea View, average subsale prices have slipped between one and 5 per cent in the first five months of 2008 (5M 2008) compared with levels scaled in H2 2007. However, in some projects, prices are still much higher than H1 2007 levels, the study shows.

Subsales are secondary market transactions involving projects that have yet to receive a Certificate of Statutory Completion (CSC) and are often used as a gauge of speculative activity.

JLL's head of research (SE Asia) Chua Yang Liang expects the percentage of subsales to continue to increase till end-2008 before some high-profile projects receive their Temporary Occupation Permit (TOP). Property market watchers are keeping tabs on the potential unwinding of positions by speculators and specuvestors as the scale of such transactions could lead to a much-predicted slide in subsale prices that could ripple through the broader market.

JLL's study showed that in the prime districts 9, 10 and 11, subsales made up 23 per cent of non-landed private home sales in 5M 2008, up from a 17 per cent share in H1 2007 and an 18 per cent share for the whole of 2007.

In the east coast (districts 15 and 16), the proportion of subsales rose from 8 per cent in H1 2007 to 11 per cent in 5M 2008. In mass-market areas (defined as all districts falling outside prime, central and east coast), the subsale share went up from 9 per cent to 14 per cent over the same period.

However, in the central districts 1 to 4 (which include places like Marina Bay, Harbourfront and Sentosa Cove), the subsale percentage dipped from 35 per cent in H1 2007 to 33 per cent in 5M 2008, although the latest share remains the highest in the four submarkets in JLL's study.

'Going by the relatively high subsales proportion in the Central district, this location has a higher probability of future consolidation in subsale prices given that a number of projects in the area are reaching completion,' Dr Chua says.

Savills Singapore director (marketing and business development) Ku Swee Yong says that agents have a long list of units in high-profile condos available for the subsale market. 'But asking prices have yet to come down to a level that would be attractive to potential buyers. So we're not seeing that many subsale transactions,' he says.

Mr Ku says that things may not be so bad. 'Some of them bought their units a few years ago from developers at pretty low prices, so they should be able to get bank loans when the project gets TOP and the DPS runs out. Others bought their units in the subsale market and the developers would not have extended DPS to them; so they've already got their housing loans in place. For these owners, it's more the fear of prices falling that may drive them to put their units on the market.'

JLL's Dr Chua argues that the rising proportion of subsales this year is 'not a bad phenomenon as it may suggest a transfer of ownership from speculators to potentially long-term occupiers or investors with stronger investment stamina'.

'The danger for the market lies with short-term speculators who decide to hold back in anticipation of a higher gain but only to be caught up by insufficient investment breath. This could result in a later surge in fire sales by these speculators, or in their returning units back to developers, who in turn may be hard put to find buyers at a time when sentiment may be weak,' he argues.

Says Knight Frank executive director (residential) Peter Ow: 'If I'm not a long-term player and I bought my unit sometime ago when prices were lower than today, it would be more prudent to let go and take some profit first. Property can be very illiquid in a weak market. By the time you want to sell, everybody may also want to do the same thing.'

The level of subsales, and the prices at which such deals are done, is being watched closely by market players as a slew of condos launched earlier and sold on DPS approach their physical completion. The Sail @ Marina Bay (Tower 2) received TOP this month, while Tower 1 is expected to be completed by Q3 2008. The Oceanfront @ Sentosa Cove is expected to be completed in Q1 2009.

A project usually gets its CSC three to 12 months after obtaining TOP. Hence deals in a project that has obtained TOP but not CSC are still classified as subsales.

Typically, the deferred payment expires when the project gets TOP, which is when buyers have to pay the developer a huge portion of the purchase price. 'Those who bought on DPS and have not exited the market yet, will have to make a call as to whether to secure a loan or begin to release their holdings back into the market now,' JLL says.

The government stopped granting DPS approvals in October last year.

兀兰预购组屋 新措施让“不急者”打退堂鼓 预购组屋申请者减至三对一

《联合早报》June 24, 2008

建屋发展局调整选购组屋优先权的措施似乎开始奏效,昨天申请截止的兀兰预购组屋(Build-to-Order,简称BTO)项目,平均每间有3个人申请,与本月初申请截止的盛港“Compassvale Pearl”及榜鹅“Punggol Sapphire”的平均2.7人申请一个单位不相上下。



“Compassvale Pearl”和“Punggol Sapphire”是建屋局上月底调整预购组屋和抽签选购计划措施后第一批受新措施影响的预购组屋。仅三个月前,有五个申请者抢购一间义顺预购组屋。

截至昨天傍晚5时,马西岭路和马西岭巷交界处的“Straits Vista @ Marsiling”的382个单位预购组屋,收到1164份申请,申请人数是组屋数量的3.05倍。

兀兰预购组屋申请人数虽超出可供申请单位,但情况比新措施出台前改善许多。同在北部完全发展组屋区内的Jade Spring @ Yishun第二阶段组屋,今年3月推出时,申请人数是可供购买组屋的五倍。


预计2012年5月完工的“Straits Vista @ Marsiling”组屋,将建有50个三房式组屋和332个四房式组屋,靠近兀兰镇中心、兀兰地铁站、巴士转换站、长堤坊,附近也有商店、公园、学校、体育中心和游泳池。


Dennis Wee房地产经纪行董事许家荣说,近几个预购组屋申请者减少,显示新措施多少制止无心购屋者申请组屋,并已获市场肯定。


刚在本月初截止申请的盛港和榜鹅预购组屋项目,也出现申请者减少现象。在新条例实施前推出的Punggol Spring,申请人数是组屋单位的5.6倍。新条例生效后,在本月初截止申请的Punggol Sapphire,则是每2.9个人抢1间组屋。

林东荣认为,市场必须等到这两个预购项目确定认购率(take-up rate)后,才可以准确知道新措施的效果。