Friday, July 25, 2008

S'pore Private Home Prices Up 0.2% In Q2

Source : The Business Times, July 25, 2008

Urban Redevelopment Authority's private home price index increased 0.2 per cent in second quarter 2008 over the preceding quarter, slower than the 3.7 per cent quarter-on-quarter increase posted in Q1 2008.

The official price index for offices increased 0.7 per cent quarter-on-quarter in Q2 2008 while shop and industrial property prices posted gains of 0.7 per cent and 4.1 per cent respectively.

URA also said that rentals of private residential, office, shop and industrial properties increased by 2.5 per cent, 6.3 per cent, 5.2 per cent and 2.3 per cent respectively in Q2 2008 over Q1 2008.

'The rates of increase in the prices and rentals of private residential and office properties have moderated in Q2 2008 as compared to Q1 2008.

While the rate of increase in the prices of shop properties has also moderated in the Q2 2008, the rate of increase in the rentals of such properties has increased in the period as compared to Q1 2008.

For industrial properties, prices have increased at a faster pace in Q2 2008, while increase in rentals moderated in the period as compared to Q1 2008,' URA said. -- KALPANA RASHIWALA, BT NEWSROOM

HDB Resale Flat Price Index Up 4.5% In Q2

Source : The Business Times, July 25, 2008

Housing & Development Board's resale flat price index increased 4.5 per cent in Q2 2008 over the previous quarter, higher than the 3.7 per cent gain in Q1 2008.

Resale transactions increased by about 22 per cent, from about 6,360 cases in Q1 2008 to about 7,760 cases in Q2 2008.

The median cash-over-valuation (COV) amount of all resale transactions in Q2 2008 was $20,000, a slight dip compared with the COV of $21,000 in Q1 2008. -- KALPANA RASHIWALA, BT NEWSROOM

Cross-Appeal Filed For Gillman Enbloc

Source : The Business Times, July 25, 2008

Ankerite Pte Ltd, the entity that purchased Gillman Heights Condominium, has filed a cross-appeal to the Court of Appeal.

Previously, the High Court has dismissed an appeal by minority owners of Gillman Heights to stop the $548 million (US$402 million) sale of the development to CapitaLand, Hotel Properties and two private funds.

The Strata Titles Board (STB) had approved the collective sale of the 607-unit, 99-year leasehold estate late last year. But a group of minority owners, had appealed that decision.

Ankerite, an indirect associated company of Capitaland, is 50 per cent owned by CRL Realty, with the balance shareholding held by HPL Orchard Place and two private funds.

Capitaland said yesterday that further details will be announced in due course.

The STB had approved the collective sale of the 607-unit, 99-year leasehold estate late last year. -- LEE U-WEN, BT NEWSROOM

P-Reit Beats 2Q08 Forecast By 6%

Source : The Business Times, July 25, 2008

Parkway Life Real Estate Investment Trust (P-Reit) on Friday said that its distributable income for Q208 came to $10.0 million (US$7.3 million), exceeding the forecast of $9.4 million by 6.4 per cent.

Distribution per unit (DPU) for the three months ended June 30, 2008 was 1.66 cents. This was also 6.4 per cent higher than the forecast DPU of 1.56 cents.

There is no comparable period for 2007 as P-Reit was only listed on the Singapore Exchange in August last year.

Looking ahead, P-Reit said that the private healthcare sector remains robust even in the current volatile market conditions. The trust should enjoy strong growth and see attractive asset acquisition opportunities, it said. -- UMA SHANKARI, BT NEWSROOM

Public Housing Hots Up While Private Cools

Source : Channel NewsAsia, 25 July 2008

Prices for public housing on the resale market have risen, while those for private property have moderated for the second quarter of 2008.

According to latest official figures, there has also been little upward movement in the private property rental market.

Data for the HDB resale and rental markets based on transactions in Q2 saw HDB's Resale Price Index (RPI) up 4.5 per cent, compared to the 3.7 per cent increase for the previous quarter.

Reflective of the interest in public housing was the rise in resale transactions, from about 6,360 cases in the first quarter to about 7,760 cases in the second quarter, an increase by about 22 per cent.

Meanwhile, subletting transactions in HDB flats increased by about 15 per cent to about 4,120 cases in the second quarter from about 3,580 cases in the first quarter.

In contrast, the private property market was a little more subdued, with home prices increasing 0.2 per cent, the third straight quarter of slower growth, signalling a definite slowing of the four-year housing boom.

Prices for non-landed properties saw a modest 0.1 per cent rise compared with 3.7 per cent in the previous quarter as prices for condominium and apartments in districts 9, 10, 11, downtown district and Sentosa fell 0.1 per cent compared to similar properties in areas outside of the region which rose between 0.7 and 0.9 per cent.

As for landed property, prices rose 0.6 per cent compared with 3.9 per cent in the previous quarter.

Indicative of the cooling in the property market are the 43,473 new units still unsold from a total supply of 67,569 uncompleted units from private housing projects.

This number includes more than 12,000 which developers have held back from launch and another 28,282 which are pending approval. - CNA/sf

Slow Demand For Office Space Hits Rents

Source : TODAY, Friday, July 25, 2008

Tough times ahead for the office rental market?

SINGAPORE’S booming office market is facing a drop in demand and a slowdown in rents that have left many wondering: What happens next, when a host of new developments are launched?

Tight supply and high demand, mostly from financial institutions, made Singapore the ninth most expensive office market in the world, ahead of rival Hong Kong, according to property consultant CB Richard Ellis. Rents nearly doubled on-year last year, after rising by more than 50 per cent in 2006.

The Government started boosting land supply two years ago, but a global financial crisis that has made companies increasingly cost-conscious, and the increase in supply, is sounding alarm bells for analysts.

“We are increasingly concerned about the risk of demand falling short of expectations,” Citigroup said in a report.

“The strong Singapore dollar, the high rental rates, the slowing economy and the uncertainties surrounding the financial industries are likely to put a lid on new demand for office space.”

Citigroup estimates that rents could fall 30% to 35% by 2011 as a host of new office buildings are expected to be ready for occupancy.

Singapore currently has 71 million square feet of office space, and is expected to add about 10 million by 2012.

Official second-quarter figures on office rents and occupancy aren’t out yet, but according to CB Richard Ellis, average prime and top classed Grade A office rents edged up just 0.8% and 0.6%, respectively, in the quarter over the previous three months. And even though Grade A office vacancies remained tight at less than 1%, the rate just outside the central business district rose to 7% from 4.6%.

Government figures for the first quarter of the year already show vacant office space in the island grew slightly over the previous three months, while the pace of rental increase has slowed considerably since the second half of last year.

While landlords, including real estate investment trusts, will obviously feel any pinch arising from lower rents, there could be a lag before the pain sets in.

According to Kim Eng analysts Wilson Liew, many property owners are still charging rents locked in years ago, which are probably still below market prices in the near future.

He estimates rents should fall to S$15 to S$16 per square foot over two to three years, from a current average rate of S$18.

Heavyweight real estate investment trust CapitaCommercial Trust, however, is less pessimistic about the near term, saying Wednesday that, because of tight supply, office rents should remain relatively stable over the next two years, although it still expects a decline in 2010 and hasn’t given estimates for 2011 - when the bulk of new supply will come online.

“Beyond that, it depends on what the take-up will be for the new buildings,” said Lynette Leong, chief executive of CapitaCommercial Trust Management, the trust’s manager.

Nobody is suggesting the market is in for a hard landing, but already, many companies that rent are beginning to reevaluate their leasing strategies.

That includes renting offices in Singapore’s suburbs to avoid the high rents and the space crunch of the business district, property consultancy DTZ said.

Citibank, DBS Group and Standard Chartered have all announced plans to expand or relocate some operations to a business park in Changi.

Expats Rank S'pore As World's Best Place To Live

Source : The Straits Times, July 25, 2008

Poll of foreigners in 49 locations puts the Republic ahead of US, HK

SINGAPORE has emerged as the best place to live in the world in a survey of more than 2,000 expatriates by HSBC Bank.

The Republic also ranked first for quality of accommodation and second for luxury living.

COMING UP TOPS: Singapore takes the top spot for having quality accomodation and ranks No. 2 for luxury living. -- PHOTO: BLOOMBERG

Its closest rival, Hong Kong, was ranked fifth overall, though it took top spot in terms of an expat's ability to earn and save.

The United Arab Emirates (UAE) and the United States came in as joint second-best overall destinations, with Belgium next in the rankings.

HSBC's Expat Explorer survey - a first for the bank - interviewed 2,155 expats across 49 countries and territories to rank places based on living standards, the ability to earn and save, a country's popularity, and the level of luxury experienced.

HSBC's survey, released yesterday, comes after human resources consultancy Mercer ranked the Republic the fifth most expensive Asian city for expats - up a notch from a previous survey.

ECA International, also a human resources consultancy, ranked Singapore as the best place for Asian expatriates to live worldwide earlier this year.

In a separate survey, it found that Singapore has become a more expensive place for expats to live, but that it is still cheaper than Hong Kong.

The Republic jumped 17 places to land at the 114th spot in a global survey of the costliest cities for expatriates, on the back of higher inflation and a stronger Singapore dollar in the past year.

But despite rising living costs, especially in housing, Singapore remains competitive with its Asian neighbours such as Tokyo, Seoul and Hong Kong, and other global financial centres such as London, said Mercer.

HSBC's head of consumer banking in Singapore, Ms Wendy Lim, said there are an estimated 300,000 expats residing here.

The safe environment and relatively low taxes make it 'an ideal location for expats to grow and protect their savings and investments', she said.

Other countries such as Britain and France scored poorly as expat destinations in the survey, especially on accommodation and luxury. The UAE was the most luxurious destination, followed by Singapore and India.

Project manager Pham Nguyen Hung, 34, a French-Vietnamese expat living in Singapore, said he was not surprised at the survey results.

Singapore, US cities such as San Francisco and New York, and Hong Kong are among his top picks.

'It's hard to compare cities directly, because each of them offers different lifestyles. But I agree Singapore has quite a high quality of life, and its accommodation standards are among the best,' he said.

Vandals Keen On En-Bloc Sale Damage Cars

Source : The Straits Times, July 24, 2008

Lexus and Toyota vandalised in the latest attacks in Laguna Park

HUNGER for en-bloc dollars looks to have turned vicious at a quiet private estate in East Coast.

On Tuesday night, two residents of the 530-unit Laguna Park estate discovered that their cars had been doused with a corrosive liquid, possibly paint thinner.

UGLY ACT: Corrosive liquid was thrown on a Lexus belonging to a Laguna Park resident who is against a collective sale of the estate. It may have been a vicious attempt to change his mind. -- ST PHOTO: DESMOND LIM

They were among the residents who had not yet agreed to put the seaside development up for sale. Earlier this month, two other cars belonging to the dissenting group were also vandalised.

Residents claim they were the latest of several cases of vandalism that began after the possibility of going en-bloc arose last December.

The estate has until the end of this year to gather an 80 per cent vote to put it up for sale. But so far, residents say less than 65 per cent are onboard.

Residents have been told by a property valuer that an average unit could be worth more than $2.1 million and the penthouses almost $4 million if the estate goes en-bloc. A resident said the market rate for a normal unit now is about $1.3 million.

Some of the holdouts have lived in Laguna Park since it was built in 1977, while others have been there for many years.

Some residents told The Straits Times they were surprised that the sale has fostered so much acrimony.

Five cars have been vandalised in recent weeks, said the outgoing chairman of the condominium's management committee, Mr Chua SC, who declined to give his full name. Some vehicles were doused with a corrosive liquid while others were scratched and splashed with black paint.

Police reports have been made and investigations are under way.

An independent analyst said residents sometimes do strange things in the hopes of pushing through an en bloc sale.

'But resorting to criminal acts...this would be the first time,' said Mr Ku Swee Yong, Savills' director of marketing and business development.

The vandalism could ultimately be a futile exercise with the cooling property market, said Mr Ku.

'It's a bit of a long shot in these market conditions to find buyers.'

Laguna Park residents told The Straits Times yesterday that they believed the vehicle attacks were 'inside jobs' committed by people who support the en-bloc deal.

If this proves true, Mr Chua thinks it is a 'very stupid, silly and naive way of trying to get people to sign'.

'I don't think this is the right way to do it,' said an agitated Mr Chua, who had the logo ripped off his Nissan about three weeks ago.

Mr Robin Sng, a company director, owns one of the cars damaged on Tuesday night. The corrosive liquid ate away the paint on the bonnet, door and bumper of his four-year-old Lexus.

'I feel frightened,' he said.

A brand new Toyota parked 50m away was also vandalised on the same night.

A resident diligently went round the estate's dustbins and found a can of paint remover in a rubbish bin near the carpark. The can was taken away as evidence by the police, who are investigating the rash of vandalism.

Mr Chua said he told residents at a recent annual general meeting that something had to be done about the cases.

Residents earlier shot down the idea of installing surveillance cameras, he said.

'Now I suppose it has become urgent enough to reactivate the idea.'

Sales Of Existing Homes Decline To 10-Year Low

Source : The Business Times, July 25, 2008


(WASHINGTON) Sales of previously owned US homes fell in June to the lowest level in a decade as tumbling real-estate prices and consumer confidence signal no end in sight to a housing recession now in its third year.

Resales dropped 2.6 per cent to a lower-than-forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors (NAR) said here yesterday. The median home price dropped 6.1 per cent from June of last year.

The housing slump may deepen further after mortgage rates climbed to the highest in a year this month and turmoil engulfed Fannie Mae and Freddie Mac, which account for more than two-thirds of new home-loan financing.

A record 18.6 million homes stood empty in the last three months as the industry's recession reverberated through communities, separate figures showed yesterday. The NAR report 'is, unfortunately, not telling us about an end' to the slide, said David Resler, chief economist at Nomura Securities International Inc in New York. 'Housing is going to be a non-contributor, if not a drag, on the overall economy.' The Standard & Poor's Supercomposite Homebuilding Index dropped 4.9 per cent to 480.61 at 10.33am in New York. By comparison, the Standard & Poor's 500 Stock Index lost 0.6 per cent, to 1,274.06.

Economists forecast home resales would fall to a 4.94 million pace, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from a 4.79 million pace to 5.1 million rate.

The Labor Department earlier yesterday reported that first-time claims for unemployment benefits rose last week to the highest in almost four months, a sign the slowing economy is weakening the labour market. Applications increased by 34,000 to 406,000 in the week ended July 19.

Compared with a year earlier, existing home sales were down 16 per cent in June. Purchases are down by about a third from a record of 7.25 million reached in September 2005.

The number of previously owned unsold homes on the market at the end of June rose to 4.49 million from 4.482 million in May. The total represented 11.1 months' supply at the current sales pace. The agents' group has said that a five-to-six month's supply reflects a balanced market.

'The biggest problem is that we've not yet seen inventories come down,' Paul Puryear, managing director of Raymond James & Associates Inc in St Petersburg, Florida, said in an interview with Bloomberg Radio. The housing market isn't likely to recover until at least 2009 or 2010, he said. -- Bloomberg

Expats Living In S'pore Just Loving It: Poll

Source : The Business Times, July 25, 2008

SINGAPORE has been ranked the best place in the world to live in, based on a poll of expatriates.

The Expat Explorer survey for HSBC Bank International revealed that, as well as being top overall, expats rate Singapore best for quality of accommodation and second in terms of luxury living.

The survey was conducted between February and April, with data analysis conducted by Freshminds. It looked at a range of topics relevant to expats' lives, including living standards, an expat's ability to earn and save, a country's popularity and the level of luxury experienced.

On luxury, countries were rated on a number of categories, including access to private healthcare, access to more than one property, and ability to own a pool and to employ staff (such as cleaners).

Across the 11 categories of perceived luxuries, on average, expats reported an increase in eight of these factors, with employing staff ranked as the highest increase.

The United Arab Emirates was the most luxurious destination, with expats enjoying increases in 10 of the 11 categories, followed by Singapore and India.

The UK was ranked the least luxurious with decreases recorded in nine of the 11 luxuries.

The survey polled 2,155 expats in more than 49 countries. However, only countries with at least 30 respondents were analysed in the league tables.

Accommodation is a key concern of expats and almost three-quarters of expats living in Singapore said that the quality of their accommodation had improved since moving away from home, the highest amount recorded in the study.

This was followed by those living in the United States and Belgium.

The UK was identified as the most expensive expat location for accommodation, with over three-quarters of expats living there revealing that their living costs had increased.

In terms of remuneration, expats in Hong Kong (ranked fifth overall) have the world's highest salaries, with almost half earning more than £pounds;100,000 (S$271,000) per annum.

It was found that Europe is a popular destination overall in terms of the length of stay. More than three-quarters of expats now living in the Netherlands have been there for three or more years, followed by Germany and Spain. Hong Kong and Singapore were ranked fifth and sixth respectively.

HSBC head of consumer banking (Singapore) Wendy Lim estimates that there are over 300,000 expatriates residing in Singapore. She said: 'Singapore's safe, tax-efficient environment makes it an ideal location for expatriates to grow and protect their savings and investments.'

Singapore is home to one of HSBC's five offshore banking centres around the world, the others being Hong Kong, Dubai, New Jersey and Miami.

URA Awards Woodlands Site To Soilbuild

Source : The Business Times, July 25, 2008

THE Urban Redevelopment Authority (URA) yesterday awarded a Woodlands industrial site to top bidder Soilbuild Group Holdings - two days after the tender closed on Tuesday.

But for a tender last week for a hotel site in Balestier Road that drew three bids - all below market expectations - there is no announcement yet from the URA on its decision.

'The government is evaluating the bids for the Balestier Road site,' a URA spokeswoman said when asked about the outcome of this tender.

On Wednesday last week, HH Properties, a joint venture between Hiap Hoe and sister company SuperBowl Holdings, placed the top bid for the 99-year leasehold Balestier plot - about $172 per square foot of potential gross floor area (psf ppr).

This was way below the $350-470 psf ppr that analysts indicated when the site was launched in late March - and much less than the $420-805 psf ppr at which the government awarded 99-year hotel sites last year.

The Balestier site is opposite the Sun Yat Sen Nanyang Memorial Hall.

The Woodlands site awarded to Soilbuild is the tenth that the company has garnered since it moved into the business space sector in 2005 to complement its residential development activity. The 180,835 sq ft site, at Woodlands Industrial Park E5, comes with a 60-year lease.

Soilbuild, which bid $13.61 million or $30.10 psf ppr, said yesterday that the total development cost including land would be $35-40 million. It will fund the purchase from internal resources and through bank borrowings. Development could take about 20 months, with factories slated for completion by 2010.

Soilbuild is targeting SMEs for these factories, which can be used for clean/light industry, general industry and warehousing. It does not expect the project to have a material financial impact on its consolidated net tangible assets per share or consolidated earnings per share in the current financial year ending Dec 31.

With the Woodlands plot, Soilbuild has six business space projects in the pipeline, totalling more than 3.5 million sq ft.

Soilbuild shares closed unchanged at 96 cents yesterday.