Sunday, August 3, 2008

HDB Rents Still Well On The Rise

Source : The Sunday Times, Aug 3, 2008

Demand still there with expats on smaller housing allowances and those priced out of condo market

Rents at many condominiums in Singapore appear to be peaking, but landlords of Housing Board flats are still riding the cash wave.
HDB rents continued their steady rise in the second quarter of this year, increasing across all flat types and most towns as renters sought cheaper alternatives to increasingly costly condos.

Priced out

'Those who used to be renting a condo at $2,000 to $2,500 a month find they have very few options when they want to renew their lease, because their landlords have increased rents to $3,000 to $3,500.'

MR CHRIS KOH, director of real estate agency Dennis Wee Properties, on rising demand for HDB flats

Owners of four-room flats benefited the most, with average monthly rents climbing almost 10 per cent to $1,750, from $1,600 in the previous three months, according to the latest data from HDB.

In terms of towns, Bukit Batok, Central, Serangoon and Hougang saw major rent rises across all flat types.

Generally, HDB rents have been increasing because rents of private apartments 'have hit a level too high for many to afford', said Mr Chris Koh, director of real estate agency Dennis Wee Properties.

'Those who used to be renting a condo at $2,000 to $2,500 a month find they have very few options when they want to renew their lease because their landlords have increased rents to $3,000 to $3,500.'

Many of these displaced tenants work for smaller firms and do not have the flexibility of higher rent budgets, so they turn to HDB flats, Mr Koh said.

Some new tenants are also S-pass holders with smaller budgets that can only fit HDB flats rather than condos, added Dr Tan Tee Khoon, head of KF Property Network, a subsidiary of Knight Frank.

He also noted that the stock of HDB flats for rent remains fairly constant, unlike that of condos. Supply of HDB flats is also limited because of the conditions imposed on owners who want to lease out their flats.

Rising across the board

Between April and June, eight out of every 10 towns saw higher rents for four-room flats, with Jurong East experiencing jumps of up to 21 per cent.

The priciest place to rent a four-room flat is now Bukit Merah, where the average monthly rent is $2,300. Close behind are flats in the Central area, Toa Payoh and Bishan, which command $2,000 or more.

'Bukit Merah has become popular with foreign nurses who work at Singapore General Hospital, and Jurong East is getting a lot of foreign students from Nanyang Technological University and foreign factory workers working in the west,' explained Mr Koh.

He added that Toa Payoh seems to attract expatriates working in the city as well as foreign nurses from Thomson Medical Centre and Mt Alvernia Hospital.

Landlords of other types of HDB flats are also seeing a tidy profit. Monthly rents of three-room and five-room flats went up by $100 on average to $1,500 and $1,900 respectively.

For three-room flats, the biggest growth was in Hougang, where rents soared 40 per cent to $1,400 a month. They also saw sizeable increases of more than 10 per cent in Geylang, Bukit Batok, Ang Mo Kio, Serangoon and the Central area.

For five-room flats, Bukit Timah, Jurong West and Hougang were especially in demand. But the most expensive five-room flats are still in Marine Parade and Central, where they go for $2,550 and $2,400 a month, respectively.

Steady in the short term

Rentals for HDB flats are likely to hold steady or even rise for the rest of the year as they remain much more affordable than condos, predicted Mr Koh.

KF's Dr Tan also believes HDB rents will rise a further 10 to 15 per cent in the next six months.

'As more new condos are completed next year and the year after, rents of condos will ease and then only will we see HDB rents easing off as tenants will have more choices,' Mr Koh said.

The Bigger, The Better

Source : The Straits Times, Aug 2, 2008

If recent condominium project launches are anything to go by, expansive balconies are hot among homebuyers

ALL it took was one look at the big balcony spanning the living room and the master bedroom, and the deal was sealed for Mrs Jean Hong.

The 47-year-old company director bought a three-bedroom unit for close to $1,500 per square foot in the Parc Centennial condominium in Kampong Java Road three months ago and is still gushing about the large balcony to her friends.

BED AND BALCONY (left): Among the features of the 51-unit Parc Centennial condo is a balcony that spans from the bedroom to the living room (not shown). Located in Kampong Java Road, the project is expected to be completed in 2011. -- PHOTOS: EL DEVELOPMENT, CITY DEVELOPMENTS LIMITED

She is planning to rent it out and feels expatriates will appreciate the balcony space.

'There is enough space to put some chairs and a small table in the balcony, so that the tenant is able to have a drink or read there without cluttering the place unnecessarily,' she said.

Parc Centennial is among a number of new condos that are bucking the trend of developments from the 1990s, which had balconies that were tiny corners with just standing space or irregular-shaped ones that nobody used.

In contrast, some of the new private housing projects today have large balconies that even extend to the master bedroom or outside the lift.

SOAK UP THE SCENERY: Cliveden at Grange Road, which offers three-, four- and five-bedroom units, comes with panoramic views of Orchard Road which can be enjoyed from the expensive balconies.

Projects with generous balconies include completed ones like Residences@Evelyn in Evelyn Road as well as those nearing completion such as Parc Centennial, JIA at 65 Wilkie Road, Lucida in Suffolk Road, Parc Mackenzie in Mackenzie Road and Cliveden at Grange in Grange Road.

Developers say that buyers prefer units with large balconies because the open space lets in natural light and ventilation and can be used as an alfresco dining area or just an outdoor area to relax in.

EL Development, the developer behind Parc Centennial, designed its units with large balconies because of the expansive views offered at the site: There are no tall buildings nearby so residents have good views of the surrounding greenery.

The balcony also serves to screen off the afternoon sun for the west-facing units.

GREEN VIEWS: Located off Bukit Timah Road, the Shelford Suites condominium project has 77 units, all of which look out to lush greenery. Its targeted completion date is 2011.

Similarly for developer City Developments Limited (CDL), the decision to incorporate balconies into the projects depends on their location.

'Typically, buyers would like a balcony where there are good views of the surroundings, such as the lush greenery which residents of Shelford Suites or Cliveden at Grange can enjoy, or if there are waterfront views that can be appreciated, which is the case with One Shenton and The Oceanfront@Sentosa Cove,' said Mr Chia Ngiang Hong, group general manager of CDL.

Larger balconies are also good for homeowners to keep in touch with their surroundings, says developer SDB. Its first local project here, JIA, is only seven storeys high so owners get to enjoy the greenery nearby from their balconies.

The developer also designed the balconies with enough depth to put a coffee table.

'Enjoying the outdoors from the balcony means being able to have a relaxing cup of tea comfortably seated,' said Ms Leon Kim Yoke, senior manager of SDB Properties.

The developer has also included 'fold and slide' screens at the balconies to provide privacy when required. They double as safety features.

Their two-bedroom units even have the lift opening directly into the balcony.

'Large balconies are targeted at those who enjoy the outdoors and do not want to be confined to indoor spaces only. Anyone downsizing from a landed property to an apartment would particularly appreciate such features,' Ms Kim Yoke added.

Mrs Hong, who lives in Serangoon Gardens, agrees.

'In my house, I can take a walk around my garden or koi pond, but in a condo, you have only your bedrooms and living room to turn to, so having a balcony helps.

'Even some HDB flats are getting their own balconies too nowadays. With large balconies, I am able to get higher rents for my unit,' she said.

About 70 to 80 per cent of expatriates opt for large balconies, according to Mr John Koh, 60, associate director of Huttons real estate group.

'Singaporeans are quite kiasu. Some think it is a waste of space and don't want to pay for it,' he said.

Senior executive Kelvin Ho, who bought a flat in Parc Mackenzie, begged to differ.

'I don't understand why people don't want balconies. I like the open air, space, lights, breeze and view. I think it is usable space,' he said.

It is opportune that buyers like him have secured units that come with large balconies as they may become a thing of the past with the recent announcement by the Urban Redevelopment Authority.

From Oct 7, features such as bay windows, balconcies and planter boxes are no longer exempt from the gross floor area (GFA) calculations.

This means that developers may scale down balcony sizes since they will be charged for the area, unlike now.

'I think it's scary if the sizes of balconies shrink in future as Singapore is going to be one large concrete jungle,' said Mrs Hong.

'Personally, I do not mind paying for the space if the design is nice and it is functional.'

URA Gets $51m Bid For Hotel Site

Source : The Business Times, August 2, 2008

At Kallang and Jellicoe roads, the 45,451 sq ft site costs $249.6 psf ppr

THE Urban Redevelopment Authority (URA) has received a committed bid of $51 million for a hotel site at Kallang and Jellicoe roads.

This works out to $249.6 per sq ft per plot ratio (psf ppr) for the 45,451 sq ft site, which is on the reserve list of the Government Land Sales programme.

The site, which has a maximum permissible gross floor area of 204,363 sq ft, will now be put up for public tender.

Knight Frank director (research and consultancy) Nicholas Mak believes that barring any major shocks to the economy, the tender could attract bids in the range of $400-$450 psf ppr.

'This is a relatively good site only two MRT stations from Raffles City and close to the future Kallang Riverside,' he said.

But poor market sentiment or lower-than-expected visitor arrivals in the coming months could result in lesser bids of $330-$400 psf ppr.

While public tenders always draw bids higher than the trigger price, one property consultant said that he is surprised the site at Kallang and Jellicoe roads was even triggered, given the state of the global economy and rising construction costs.

'Investors will have to now factor a much longer period for their return on investment,' he noted.

The public tender for the site follows poor response to hotel development sites in Balestier Road and Race Course Road, with the former attracting a top bid of $172 psf ppr and the latter drawing no bid at all. URA has said that the government is evaluating the tendered bids for the Balestier Road site, the tender for which closed on July 16.

In this light, Mr Mak said that the trigger price for site at Kallang and Jellicoe roads, which can be compared to the government's reserve price, seems 'realistic'.

URA projects that a 455-room hotel can be built, which Mr Mak reckons would be positioned as a business-class establishment.

Including the site at Kallang and Jellicoe roads, there are 10 hotel development sites on the GLS reserve list.

According to URA, the reserve list for second-half of 2008 provides for total potential supply of 5,050 hotel rooms, including a white site at Outram Road.

There is one site on the GLS confirmed list, and including a commercial site at North Bridge Road, the confirmed list could potentially yield 700 hotel rooms.

CapitaLand Gains Dive, Flat Property Market Expected

Source : The Straits Times, Aug 2, 2008

Interim earnings halved to $763m, but condo launches won't be held back

PROPERTY giant CapitaLand expects the market to stay sluggish for a while but it is still preparing to launch three mid- to high-end condos here before Christmas.

'For'll probably be very flat,' said chief executive Liew Mun Leong at a results briefing yesterday that unveiled a plunge in first-half profit.

Prices in general will be 'quite flat', with a correction seen in the high-end segment, said Mr Liew after the meeting. He added that demand for mass market homes is 'still very good' while mid-end home prices are holding well.

The picture in the high-end segment is not as rosy as prices have fallen after buyers bailed out of the market overnight. But CapitaLand said high-end prices remained relatively high.

'High-end volume will slow down, prices will not hit $5,000 psf but will still be above $3,000 psf,' said Mr Liew. 'As I keep saying, it is much more than pre-Asian financial crisis prices.' Home prices reached around $2,400 per square foot (psf) at the 1996 peak.

CapitaLand said in its results statement that sentiment in the local property market is likely to remain cautious for the rest of the year until there is greater stability in the global financial markets and improved credit environment.

But demand is still there, it said. Against this backdrop, CapitaLand is planning to release two projects in River Valley - the 127-unit Latitude in Jalan Mutiara and the 186-unit The Wharf Residence in Tong Watt Road.

It will also launch Urban Resort, which will have about 70 units on the former Silver Tower site in Cairnhill, at above $3,000 psf.

Pre-launch sales have started at the two River Valley projects. CapitaLand said it has sold 11 out of 40 units at an average of $2,400 to $2,500 psf during the preview for Latitude in the first half of the year. It has also sold 'close to 30' of 80 units at $1,500 to $1,900 psf since the preview for The Wharf held three weeks ago.

Meanwhile, CapitaLand reported a 43.5 per cent drop in second-quarter net profit to $515.2 million on the back of a 12.3 per cent fall in revenue to $820.1 million. The drop came largely on lower home sales and amid an absence of one-off gains.

First-half profit was $762.7 million, down nearly 50 per cent, while revenue fell 7.7 per cent to $1.45 billion.

CapitaLand has had to delay the launch of residential projects in China due to bad weather delaying construction.

Earnings before interest and tax from overseas contributed 54 per cent of the total, as China's contribution rose on the fair value gain of Raffles City Shanghai. Australia's contribution fell nearly 82 per cent due to provision for foreseeable losses on development projects and lower fair value gains.

Second-quarter earnings per share was 18.3 cents, down from 32.6 cents last year, while net asset value per share reached $3.68, up from $3.54 at the end of last year.

CapitaLand shares fell 23 cents to $5.47 yesterday.

CapitaLand To Launch Freehold Condo Soon

Source : The Business Times, August 2, 2008

CAPITALAND plans to launch in the second half of this year a freehold condo - Urban Resort - with about 70 units on the Silver Tower site in Cairnhill. The average price is expected to be above $3,000 psf, CapitaLand Residential Singapore CEO Patricia Chia told reporters after the group announced second-quarter results.

CapitaLand has also sold 11 of the 40 units released so far at Latitude at Jalan Mutiara in the River Valley area at an average price of $2,400 to $2,500 psf. Over at Tong Watt Road, it has sold close to 30 of 80 units released recently at The Wharf Residence; prices range from $1,500 to $1,900 psf.

CapitaLand leads a consortium that will redevelop Farrer Court which is slated for launch in the first half of next year.

Asked about his outlook for the Singapore residential market, Mr Liew said: 'Demand is still very good for the mass market. (For) the mid-range, there are still good signs of take-up; I think prices are still holding well for the mid-range.

'But in the high-end, there's not going to be massive demand. (In terms of prices), obviously it won't be the $5,600 psf record price that we achieved for a penthouse at Orchard Residences last year. But prices will still be above $3,000 psf.

'So prices will still be way above the last peak, pre-Asian crisis. Demand is still there. People who sold their properties through en bloc sales still have to buy apartments,' he said.

Given Singapore's limited land resource and with population projected to grow to 6.5 million, in the 'long term, property prices will go up', Mr Liew said, adding: 'It's a no-brainer.'

'I think we're overinfected with the housing slump in the US. That sort of mood comes to Singapore that property prices (here) will (also) go down. But look at the fundamentals, look at demand fundamentals. I think we are much stronger in Asia,' Mr Liew noted.

The group's earnings are underpinned by progressive recognition of $4 billion residential sales in Singapore in 2006 and 2007.

CapitaLand's chief investment officer Kee Teck Koon said that in Singapore, the group has hardly any residential stock or inventory that it is holding. 'So there is no issue of writing down. Most importantly, those new projects we've got, we have underwritten a value that is very supportable even at current prices,' he added.

Private Home Rents May Wobble But Won't Crash

Source : The Business Times, August 2, 2008

Fears of their decline next year may be somewhat exaggerated

Recent media reports predicting that private home rents will take a steep dive next year are certainly alarming. But a closer look at the numbers suggests that they may not take such a beating after all.

Last week, CB Richard Ellis (CBRE) said that it expects rents to fall by 5-10 per cent on average next year. In the prime areas, rents could slide by up to 15 per cent, the property firm said.

The projections are based on two major assumptions: that a record number of homes will be completed next year; and that the tenant pool here will shrink significantly as corporations stop hiring expatriates or, in some cases, even send some expats home.

'It's a double blow,' said CBRE Research.

However, developers and other analysts say that the number of completed homes may not be that high and the economic situation next year not that bad.

According to CBRE's data, 13,400 homes will be completed next year. But official estimates from the Urban Redevelopment Authority (URA) put the number of landed and non-landed private homes expected to be completed in 2009 at a more modest 10,418.

Likewise, CapitaLand's in-house estimates say that about 12,000 units will be completed from the second half of 2008 to end-2009.

'It is a comfortable number,' Patricia Chia, head of CapitaLand's Singapore residential unit, told reporters at the developer's second-quarter results briefing yesterday. Over the past six years, 8,000-8,500 private homes were completed on average each year, she said.

There are also demolitions to consider. CBRE said there will be 1,700-1,850 units demolished in 2009. Net supply next year could therefore come in even lower.

Take, for example, Q2 2008 numbers. According to Citigroup, while 2,587 units were completed in the second quarter, net supply was only 761 - implying that some 1,826 units were demolished. This partly helped occupancy rebound slightly to 93.9 per cent following three consecutive quarters of decline, the bank said in a recent report.

Rentals will also be helped by other factors, developers point out. Many of the new units coming onstream in 2009 and 2010 have already been sold, and not all of them will end up on the rental market.

The HDB market, where prices rose 4.5 per cent quarter-on-quarter in Q2, is also cause for optimism. The number of HDB resale applications also rose 22 per cent quarter-on-quarter.

'HDB upgraders who buy mass market private units will not rent out their new homes,' said one developer. 'Many of the units in new mass market condos completed in 2009 and 2010 will not be part of the supply for renters.'

For now, while rental growth is slowing down, it is still on the uptrend. Citigroup said that rentals rose 2.5 per cent quarter-on- quarter in Q2 - much slower than the 6 per cent increase seen in the first quarter.

But the other, bigger factor which could also lead to rents taking a precipitous plunge next year - the state of the macroeconomic environment - is still up in the air.

CBRE, for example, adopted scenarios in which the economic climate either stays the same or worsens in 2009 to arrive at its forecasts.

Other analysts, on the other hand, expect things to turn around in the second half of 2009.

For now, jobs growth is continuing apace, they point out. 70,600 new jobs were created in the second quarter, down only slightly from a record 73,200 jobs in Q1 and the second highest job creation rate on record.

The slowdown in services jobs creation to 37,600, from a record 46,500 jobs in Q1, was however a cause for concern. 'We suspect much of this may have reflected a slowdown in financial services hiring,' said Citigroup economist Kit Wei Zheng.

But while firms in the financial sector may hold off on hiring, companies in other industries should continue hiring next year. The overall pool of renters should therefore continue to climb in 2009.

'There should be enough people looking to rent in the next 12-18 months,' said Ku Swee Yong, director of marketing and business development at Savills Singapore.

Growth in mass market and HDB rents should continue next year, he said. But asking rents at large high-end apartments - of 4,000 sq ft and more - could fall as companies cut back on housing allowances for their employees, Mr Ku added.

As for overall rents, it's anybody's guess. Much depends on how quickly the world recovers from the US sub-prime mortgage crisis - or how much worse things get. But private home rentals here are unlikely to make a large reversal.

首个发展商承认豪宅价跌 廖文良:仍会保持每平方英尺3000元以上

Source : 《联合早报》Aug 2, 2008




他说:“高档私宅的销售量已下降,我们今年不会看到卓锦豪庭(Orchard Residences)每平方英尺5600元的售价,但3000元以上的尺价相信还能维持。3000元以上其实不算低,这还是比亚洲金融危机前来得高。当时,高档公寓平均售价介于每平方英尺2000至2500元。”


下半年推出Urban Resort豪宅

廖文良透露,集团将在今年下半年推出位于经禧路一带的前银景大厦(Silver Tower)地段,名为Urban Resort的豪华私宅项目,70个单位的售价将会在每平方英尺3000元以上。

此外,嘉德置地也计划推出另外两个中档项目,即位于里峇峇利路一带,命名为Latitude,拥有127个单位的前龙景园(Dragon View Park)地段,以及位于东发路,拥有186个单位,楼高23层的The Wharf Residence。

其中,Latitude早在今年上半年已开始预售,平均售价为每平方英尺2400元至2500元。三个星期前开始预售的The Wharf Residence,售价介于每平方英尺1500元至1900元。


尽管如此,嘉德房产开发(新加坡)总裁谢昭白表示不会急着推出新项目,也不急于投标新地段,尤是供发展大众化私宅的地段。过去两年,嘉德置地总共售出约2300个单位,总值40亿元。集团计划在明年推出花拉阁(Farrer Court)和茶阳花园(Char Yong Gardens)地段等中高档项目。

嘉德置地新加坡私宅业务今年上半年的扣税前盈利率(EBIT Margin)达25%。谢昭白预计,未来5、6年,集团预计从私宅业务能取得平均15%至16%的扣税前盈利率。




谢昭白则指出,市区重建局的供应数据制造了混乱,如果把告吹的集体出售项目比如淡滨尼阁(Tampines Court)和Bravo放弃的三个集体出售交易等考虑在内,实际供应相信没有那么多。