Wednesday, August 6, 2008

On The Verge Of Change

Source : TODAY, Wednesday, August 6, 2008

But tenants, pleased with renovations, worry the new name is out of place

THE NEXT time shop owner Mr Chua Seow Bin reprints his name-cards, they will read “The Verge (Tekka Mall).”

It is good that the mall is being renovated to attract more customers, the partyware shop owner said, but he is not sure changing the mall’s name is a good idea. Tekka Mall is a popular name, everyone recognises it, he argued.

That about sums up the general sentiment of tenants and customers at Tekka Mall.

Renovations began earlier this year, and by the fourth quarter, the mall will be relaunched as an IT, lifestyle and food and beverage (F&B) hub.

Most tenants Today spoke to were glad the works would be completed soon, and expected business to do better. But the name change raised more than a few eyebrows.

Given a more sophisticated tenant mix and service offerings, the new moniker “reflects the new positioning of The Verge,” said group director of property Amir Salleh from DRB-HICOM BERHAD, one of the co-owners of The Verge, which will feature more than 100 shops on eight levels.

The mall will be refurbished to look more contemporary and brighter. Existing tenants such as the Singapore Human Resources Institute will undergo a revamp, while discussions are underway to secure IT/electronics tenants.

Still, watch store sales assistant Allal Ho, 35, asked how the mall would compete with nearby Sim Lim Tower, famous for its electronics selection.

Mr Johnny Eng, co-owner of an optical store, applauded the new name for being “more unique, like a modern shopping centre”, while others felt the name unsuited for the area. Engineer Sidney Chng, 37, said the mall “should be remodelled as a heritage centre because of the Indian neighbourhood. The Verge sounds good, but it is out of place here.”

A store assistant, who did not want to be named, said the new name might attract the “more educated” but the customers who shop here, such as foreign Indian workers, would find it “too hard to pronounce ... My friends and other tenants also said they don’t know how to pronounce it”. The adjoining block — renamed Chill@ The Verge — will also be made over and dedicated to entertainment and F&B outlets for the younger audience. It is expected to be completed by mid-2009.

Little India Condo Sold Within 2 Hrs

Source : TODAY, Wednesday, August 6, 2008

REAL estate agents claim a new five-story condominium in Little India has been “100 per cent sold within two hours of balloting”.

The brisk sales for Urban Lofts has caught property analysts offguard, especially coming during the Hungry Ghost month, when superstitious buyers are traditionally scared away.

It was also surprising given the current economic uncertainty, when sentiments for high-end property are expected to be weak.

Huttons Real Estate Group claimed on its website yesterday that all 50 units in the freehold condo in Rangoon Road had been snapped up. They had been marketed at around $912 per square foot.

However, Chesterton International research director Colin Tan pointed out that actual transaction prices might be lower than the listed guide price and this could have attracted speculators in for a quick profit.

If so, said Mr Tan: “I’m not surprised that there is still unsatisfied demand out there. There is demand but at what price?”

Noting that the development had previously not generated much media publicity, Knight Frank research director Nicholas Mak added: “Either this product is very good and underpriced or there was a lot of pre-marketing efforts. But which developer right now would not sell its product at a higher price if they can?”

“For example, they could tell their agents to go and source for potential customers. With the cheques all lined up, within the two hours they just do the administrative work.”

Huttons could not be reached for comment.

According to online advertisements, the development is made up of one single block comprising 46 Soho homes and four commerical units.

Construction is expected to begin by year-end of the year ready for completion by end-September 2011.

IEA To Remove Guidelines On Property Agents' Commissions

Source : Channel NewsAsia, 05 August 2008

If you're shopping for a new home or selling one, you can now negotiate with your property agent on the appropriate commission.

The Institute of Estate Agents (IEA) will remove its guidelines on property agents' commissions next month, to fall in line with the Competition Act.

Consumer watchdog CASE has welcomed the move, pointing out that it is not compulsory to have agents facilitate a property transaction.

Property agents currently get about 2 per cent of a property's sale price from sellers, while buyers pay a fee of 1 per cent of the price. These guidelines were put in place some ten years ago.

IEA said the guidelines were meant to serve more as a reference point for agents, as well as consumers, to prevent overcharging.

But since the guidelines have been widely accepted and practised in the industry, the Competition Commission of Singapore (CCS) thinks that they may be harmful to competition.

Jeff Foo, president of Institute of Estate Agents, said: "We submitted our professional guidelines to CCS sometime in July 2007 because we were concerned whether our guidelines do or do not infringe the Competition Act.

"So after over a year of meetings and consultations, they finally came back to us on June 25 and said that our guidelines are likely to infringe on the Competition Act and advised us to remove them."

With the removal of the guidelines, it is now up to individual real estate agencies to set their own commission guidelines. It is still unclear if this will reduce commission fees paid to property agents.

IEA said the removal of the guidelines actually puts a greater burden on property buyers or sellers to do their own checks on market rates for such fees.

Mohamed Ismail, chief executive of Propnex, said: "With such a move, the industry will find its own footing in terms of the kind of support as well as service. Overall, I must say that this will help the consumer because at the end of the day, the agents do not have a choice but to increase their level of service."

Last year, the Singapore Medical Association withdrew its fee guidelines for doctors, paving the way for private doctors to set their own fees. - CNA/so

Removal Of Property Fee Guidelines Unlikely To Have Deep Impact

Source : Channel NewsAsia, 06 August 2008

Market players said on Wednesday that the move to scrap guidelines on property agents' fees by September 25 is unlikely to leave a deep impact on the real estate sector. But they warned against rogue agents who might try to cash in on the change in rules.

The Competition Commission of Singapore (CCS) ruled on Tuesday that the fee guidelines adopted by the Institute of Estate Agents (IEA) should be removed as they are uncompetitive. Under the current guidelines, property agents stand to pocket a commission of 2 per cent of the transacted price.

With the removal of the guidelines, buyers and sellers will be free to negotiate the fee payable to their agents.

Real estate agencies are generally supportive of the move, but they are concerned that the lack of fee guidelines could trigger more rogue practices.

Chris Koh, director of Dennis Wee Group, said: "If the owner is not aware of what the market price of his property is, then he may fall into a trap where the rogue agent says, 'Ok, you want a million dollars, that's what you said you want. I will get you that S$1 million, but if I sell your property at S$1.2 million, then that S$200,000 is for me to keep since there is no guideline that it must be a percentage'."

Another real estate company, Propnex, warned against agents who offer unnecessary services just to quote a higher commission.

Without any fee guidelines, market players said it is down to the agencies to set their own commission structure. Propnex said consumers must assess their agents based on their commitment, track record and knowledge of the market.

Some industry players said the removal of the commission guidelines will not spark a price war because the cost of marketing a property has nearly doubled in the past ten years, and it will not be sustainable for agents to start under-cutting each other.

On average, about 10 to 20 per cent of the agent’s commission goes into marketing efforts, such as taking out advertisements to promote a property. Paying a lower commission does not necessarily mean a better deal as agents may not put in as much effort to sell a property.

Some Singaporeans prefer to sell their properties on their own. Rosanah Mon helped her mother sell her three-room flat at Jalan Bukit Merah for S$230,000, saving over S$2,000 in the process.

"I don't see the necessity (to get a property agent), if you know the procedures well and you follow the guidelines," she said.

In fact, the Housing and Development Board (HDB) said it has seen an increase in the number of such transactions – rising from 5.5 per cent of total resale transactions in 1998 to about 8 per cent now.

To boost greater understanding of the sales procedures, HDB holds monthly resale seminars, with the next one scheduled on September 6. More information is available online at - CNA/so

Tekka Mall Gets New Name And Focus

Source : The Business Times, August 6, 2008

TEKKA Mall will be relaunched as The Verge, according to owner Corwin Holdings yesterday.

The five-year-old mall, which is undergoing renovation, will become an IT, lifestyle and F&B hub so as to reposition itself to attract the right tenants and the right shoppers, with a better-defined identity.

The Verge: The five-year-old mall, which is undergoing renovation, will become an IT, lifestyle and F&B hub

A heavy emphasis has been put on the new hub-like nature of the mall by the name, which is derived from 'convergence'.

Both its facade and the interior are being refurbished to give it a fresh look.

The renovation, which began early this year, is expected to be completed by the fourth quarter. It is being done in phases to avoid interfering with existing tenants' business, and customers' comfort.

More than 100 shops will be spread out on eight levels in the revamped mall, and Banquet has been selected as the food court provider for The Verge.

An adjoining block is also undergoing a makeover to become Chill @ The Verge, which will be dedicated to attracting the younger set by only having entertainment and F&B outlets. The block is expected to be completed by mid-2009.

Knight Frank Shopping Centre Management Pte Ltd has been appointed by Corwin Holding as the new managing agent and sole marketing agent for the 160,000 sq ft mall.

Sers Scheme Gets The Thumbs Up

Source : The Business Times, August 6, 2008

HDB's latest survey, completed last year, shows support for Sers at 85%

RESIDENTS under the Selective En bloc Redevelopment Scheme (Sers) have shown strong support for the programme, said the Housing and Development Board (HDB) yesterday.

Under Sers, selected old blocks of sold flats are redeveloped, and residents involved are rehoused in new and better flats nearby.

HDB's latest survey, completed last year, showed that support for Sers stood at 85 per cent.

The survey covered 1,019 households among 4,418 which had moved to 10 Sers replacement sites from 2001 to 2006.

Under the category 'new replacement flats are value for money', the satisfaction level was 89 per cent.

The new living environment at the Sers sites, encompassing the replacement flats, new blocks and common areas within the precincts, scored satisfaction levels of 80 per cent or more.

Most residents were also pleased with Sers' role in retaining kinship and community ties.

Seventy-two per cent of residents said relations with their neighbours had either improved or remained the same. Ninety- four per cent also expressed a sense of belonging to their estates.

'The survey findings reaffirm the popularity of Sers among the residents. This is not surprising as Sers offers many attractive benefits,' said HDB's release yesterday.

Among various benefits, Sers offers affected residents new homes which come with a fresh 99-year lease at a subsidised price.

Fee Guidelines For Property Agents Deemed Anti-Competitive

Source : The Business Times, August 6, 2008

IEA has until Sept25 to remove its recommendation on fees, fee structures

EXISTING commission guidelines for property agents - drawn up by industry body Institute of Estate Agents (IEA) - are likely to infringe the Competition Act, the Competition Commission of Singapore (CCS) said yesterday.

The guidelines stipulate fees and fee structures for agents and agencies dealing with various types of property transactions. For example, for HDB properties, the guidelines state that a seller pays a minimum 2 per cent of the contracted price as sales commission and a buyer pays one per cent of the contracted price as service fee to agents.

The IEA's position is that the guidelines are non- binding and that agents are free to negotiate fees with their customers.

However, the CCS holds the view that even if the price recommendations are not binding, they will still provide a focal point for prices to converge. 'This will dampen competition and facilitate price coordination,' the commission said in a statement yesterday.

CCS further noted that the fees payable by sellers are couched as a minimum fee recommendation in the guidelines. Said CCS: 'This practice discourages any price competition below the recommended rate. More efficient estate agents or agencies, which are able to charge lower rates, will have little incentive to do so.'

Estate agents and agencies should set their fees independently, the commission advised.

Likewise, consumers should exercise their right to negotiate fees and terms with estate agents as this will encourage competition among estate agents and agencies, CCS said.

CCS' decision came about after the IEA had applied to it for guidance on whether its published fees guidelines could restrict competition in the real estate agency market in Singapore.

CCS, which found that the guidelines are indeed likely to infringe the Competition Act, informed the IEA on June 25 and advised it to remove its recommendation on fees and fee structures. IEA now has until Sept 25 to comply.

Property firms here said that the removal of the guidelines is unlikely to have much of an impact.

'IEA's guidelines shadow what most property agencies have in place,' said Eugene Lim, assistant vice-president of property agency ERA Asia-Pacific.

The fee structures are unlikely to change with the removal and agencies will not undercut one another by lowering their fees, he said.

'IEA's guidelines were, in essence, just that - only guidelines,' said PropNex chief executive Mohamed Ismail. 'Many agents on the ground often negotiated their own commissions anyway.'

The move by CCS, Mr Ismail said, was not unexpected. The Singapore Medical Association and Law Society were also subject to a similar removal of guidelines, he added.

Separately, the Consumers Association of Singapore (Case) said it is glad that the guidelines will be removed. 'In our view, the guidelines are anti-competitive in orientation and work against consumers' interest,' Case said.

Tough Calls In Next Property DC Revision

Source : The Business Times, August 6, 2008

Recent land sales point to cuts, but some disagree

The next revision of property development charge rates is barely a month away. So what can the market expect?

Recently a few 99-year leasehold condo sites at Woodleigh, West Coast and Choa Chu Kang were sold at prices below land values implied by current development charge (DC) rates, and this could provide evidence for a downward revision in DC rates come Sept 1.

But some property market watchers suggest that the government may leave DC rates largely unchanged for most use groups.

Any drastic cut in DC rates at this point may be seen as the government taking a bearish view on the Singapore property market and lead to a further nosedive in sentiment.

DC rates are payable for enhancing a site's use or for building a bigger project on it. They are revised twice a year - on March 1 and Sept 1 - and are specified according to use groups and location. The revisions are made by the National Development Ministry in consultation with the Chief Valuer, who takes into account current market values.

In June, a condo plot at Woodleigh Close was sold at a state land tender for $270 psf per plot ratio. This is 43 per cent below the land value implied by the March 1, 2008, DC rate for non-landed residential use for that location. Two sites at West Coast Crescent and Choa Chu Kang Drive were also sold in March and May at $305 psf ppr and $203 psf ppr, 24 per cent below the respective land value implied by current DC rates.

However, Jones Lang LaSalle's S-E Asia research head Chua Yang Liang argued that these instances are 'not statistically significant' compared to the entire market activity over the past six months and that neither a drop nor rise in DC rates is warranted.

Even in Woodleigh, West Coast and Choa Chu Kang where there is land sales evidence to justify a reduction in DC rates, the cuts are likely to be moderate, 'possibly not more than 10 per cent as the accompanying message of a downward revision in DC rate is likely to cause a further dive in market confidence', said Colliers International director of research and advisory Tay Huey Ying.

Agreeing, JLL's Dr Chua said: 'This round of DC revision is being watched closely by developers and other property players as it may provide a hint of the state's view/confidence in the property market over the next nine to 12 months.'

DTZ executive director Ong Choon Fah, too, reckons that 'where there is compelling evidence, they may trim DC rates. But where the evidence is not strong, they may say it's an aberration and keep DC rates (unchanged) for six months before the next review'.

Another property consultant takes a different view as to why there may be no rush to reduce DC rates: 'DC rates are a revenue-generating tool. They tend to go up quickly, but usually tend to come down more slowly.'

The government may also be reluctant to trim DC rates just yet as that may be read as a proxy for its assessment of land values, and could in turn create pressure for the state to accept lower land bids at state tenders in coming months. 'That's not too good for the coffers,' an analyst quipped.

Offering a contrarian view, Knight Frank managing director Tan Tiong Cheng predicts DC rates will fall. 'Selling prices of private homes have either stagnated or are slowly declining while construction costs are going up, so land values have come down, as seen in recent government land tender results.'

Mr Tan also disagreed with the view that any cut in DC rates would be confined to locations with sales evidence of low land prices. 'After all, the Chief Valuer does not take into account just land sales but the property market in general,' he reasoned.

He does not think that any drastic cuts in DC rates will send the wrong signal to the market and further depress sentiment. 'The Chief Valuer has a duty to keep the public informed of reality,' he said.

Colliers expects average DC rates to stay unchanged come Sept 1 for landed residential, commercial, industrial and hotel use but to be cut 0.5 to 1.5 per cent for non-landed residential use.

DTZ forecasts that average DC rates will generally remain unchanged except for industrial use, which may see an increase of a few per cent. For non-landed residential use, some areas in the prime districts may see a slight decrease in DC rates on the back of softer home prices in these locations.

JLL, too, expects DC rates for all use groups except industrial to remain flat. 'A rise in industrial DC rates can be attributed to rising demand for cheaper office alternatives.'

Putting things into perspective, CB Richard Ellis executive director Jeremy Lake said: 'Previously, DC rates were eagerly watched to gauge the impact on land values especially for collective sale sites with a significant DC component.

'The collective sales market is so quiet now. There have been no private residential sites sold recently that will have exposure to DC. Most developers that have sites with DC exposure would already have locked in DC rates. And if they haven't, they'll find that DC rates probably won't change much.'

GIC Takes Stake In Mexico Mall Developer

Source : The Business Times, August 6, 2008

The Government of Singapore Investment Corp's (GIC) real estate arm said on Wednesday it has taken a stake in a property fund that will invest in malls across Mexico.

GIC Real Estate declined to give details of the size of its investment in Mexico Retail Properties (MRP), which currently owns 14 retail centres in the Latin American country and has another 26 projects in the pipeline.

'The anchor space in the majority of MRP's centres is leased to Wal-Mart,' MRP, an affiliate of US private equity firm Black Creek Group, said in a statement on Tuesday.

GIC has more than 200 property investments globally. In 2005, it formed a US$700 million joint venture with US-based AMB Property Corp to invest in industrial distribution properties in Mexico. -- REUTERS

GIC Buys Minority Stake In Mexican Mall Developer

Source : The Straits Times, Aug 6, 2008

THE real estate arm of the Government of Singapore Investment Corporation (GIC) said on Wednesday it has bought a minority stake in a leading shopping mall developer in Mexico.

GIC Real Estate confirmed the 'capital infusion' into Mexico Retail Properties (MRP) but would not say how much.

MRP owns 14 retail centres in Mexico, with five more projects under development and 21 others in the pipeline.

MRP, an affiliate of US private equity firm Black Creek Group, said in a statement that American retail giant Wal-Mart is the anchor tenant in majority of its centres.

'With a growing economy, emerging middle class and a scarcity of US-style retail centres, Mexico represents a compelling retail investment opportunity,' said GIC Real Estate president Seek Ngee Huat.

GIC is one of two investment vehicles of the Singapore government and manages the country's foreign reserves of more than 100 billion dollars (S$137 billion) through various investments.

Its property arm, which currently ranks among the world's top 10 real estate investment firms, has made over 200 investments in more than 30 countries. -- AFP

Revamped Tekka Mall Gets New Name

Source : The Straits Times, Aug 6, 2008

A FIVE-YEAR-OLD mall on the edge of bustling Little India is in the midst of a revamp that will make it more modern, but tone down its Indian identity.

The owners of Tekka Mall in Serangoon Road have decided to renovate the complex and rename it The Verge - as part of an effort to improve its image, a spokesman said.

The mall, located across the street from the original Tekka Market, plans to attract a new mix of restaurants, lifestyle and electronic outlets.

At the moment, less than half of the shop spaces are occupied as construction crews refurbish the interior and facade. Only a handful of stores, offering Indian-related goods or services, remain.

Spokesman Amir Salleh, the group director of property from Malaysian listed company DRB-Hicom, which owns the mall, said it would be different from its surroundings.

'We are not trying to copy and replicate what is in Little India. We are trying to find something that is complementary,' he said in a phone interview from Kuala Lumpur.

It is understood that many tenants have found the going tough at Tekka Mall over the past few years, with a number of them going belly-up.

Although Mr Amir would not give details about his tenants, he said this revamp was one way of improving the situation for the remaining retailers.

Some of the shopkeepers are hopeful that a new mix of outlets will attract buyers from outside the local Indian community.

One of them, who wanted to be known only as Mrs Nathan, said many tourists and local Chinese and Malays visit the area.'It would be good to have more stuff to cater to them,' she added.

Meanwhile, some shopkeepers interviewed felt shoppers would trip over the new name, which is a play on the word 'converge'.

Mrs Elizabeth Sakunthala, who owns a beauty shop there, said: 'The name, Tekka Mall, is easier on the tongue. The Verge is going to take people more time to get used to.'

Mr Gohulabalan, the honorary secretary of the Little India Shopkeepers and Heritage Association, said he hoped the mall would at least retain its name.

'There are so many shopping malls in Singapore already,' he said. 'We don't want to lose the originality and authenticity of Little India.'

Support For Sers Stays Strong

Source : The Straits Times, Aug 6, 2008

HDB poll: 85% nod for scheme where old estates are rebuilt while residents get new flats nearby

RESIDENTS affected by the Housing Board's Selective En Bloc Redevelopment Scheme (Sers) are still generally happy with the programme, according to an HDB survey.

It polled 1,019 affected households between August and October last year and found that 85 per cent backed the scheme. This is about the same level as in 2005 but down from 90 per cent in 2003.

Sers, launched in 1995, allows the HDB to tear down and rebuild older estates while rehousing existing residents in new flats nearby with modern facilities and a fresh 99-year lease.

In the latest round of surveys, the households polled showed overwhelming satisfaction - well above 90 per cent - with the quality of their new blocks and lift lobbies.

They were also pleased with the workmanship of the common areas within their new precincts.

More than nine in 10 also said that the relocation allowed them to maintain their family and community ties, as their replacement flats were located near their old homes.

But respondents were less happy about the quality of the individual flats, with the satisfaction level dipping to 77 per cent for the workmanship of walls and ceilings.

In total, 4,418 households moved into their replacement flats from 2001 to 2006, the HDB said yesterday.

Most had been living in three-room or smaller flats, but had upgraded because of Sers. Now, 89 per cent live in four- and five-room flats.

The HDB said that its latest survey - the fourth it has conducted - reaffirmed the popularity of the Sers programme.

This was 'not surprising', it added, as Sers offered residents a new home at a subsidised price and gave old estates a new lease on life.

The HDB regularly conducts surveys of Sers-affected residents to gauge their satisfaction levels and support for Sers and to learn if the programme has affected community ties.

Property Fee Guidelines Must Go, Says Watchdog

Source : The Straits Times, Aug 6, 2008

Move could foster competition and a price war among real estate agents

HOME buyers and sellers will be able to haggle over the commission they pay property agents after a guideline on fees is axed next month.

The Competition Commission of Singapore (CCS) said yesterday that the guidelines adopted by the Institute of Estate Agents (IEA) in 1999 are uncompetitive and must go.

The surprise move could spark a price war among agents, say some experts.

Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, believes buyers and sellers will be the winners: 'Consumers should not accept agents who are harping on the old fee practices and should be free to bargain.'

At present, sellers of Housing Board flats generally pay the agent 2 per cent of the purchase price while the buyer pays 1 per cent. In private property transactions, only the seller pays 2 per cent.

The IEA guidelines have become standard practice, a point addressed by the competition watchdog yesterday.

It said that while the guidelines are not binding, 'they provide a focal point for prices to converge. This will... dampen competition and facilitate price coordination.'

It also noted that they are stated as a 'minimum fee', which discourages any price competition below that rate.

'Agents should not be constrained to offer the same price,' said the CCS, which told the IEA on June 25 that the guidelines 'are likely to infringe the Competition Act'.

IEA president Jeff Foo said the institute, which represents about 1,600 agents, will axe the guidelines by Sept 25.

Industry leaders had mixed reactions to yesterday's news. Some say the impact will be minimal as agencies will keep the status quo but other experts forecast an agents' price war, especially during market downturns.

'This throws open negotiations between agents and sellers or buyers. Market conditions will determine who has the upper hand,' said Mr Colin Tan of property firm Chesterton International.

In bad times, agencies could start under-cutting each other, or conversely, agents could demand higher commissions from desperate sellers and buyers, said Mr Tan.

Mr Chandran Pillay, senior vice-president of Global Real Estate Services, said smaller agencies like his cannot lower fees too much as they are already quite low and the costs of selling a property are high.

House-hunter Tania Goh, 24, welcomed the room for negotiation but she was concerned about agents who 'can abuse this system when they know a buyer strongly desires a property'.

PropNex chief executive Mohamed Ismail said the removal of guidelines 'may not be a bad thing' if agents up their service quality to justify the commission they get. His agency will use the IEA fee guidelines as the basis for negotiations with its clients.

Mr Eugene Lim, assistant vice-president at ERA Asia Pacific, said the 2 per cent fee is lower than the 6 per cent norm in the US, for example.

IEA's Mr Foo said consumers should get written agreements on agents' fees before accepting any services.


Source :《联合早报》Aug 06, 2008













Source : 《联合早报》Aug 06, 2008













房屋经纪抽佣 指导原则取消

Source : 《联合早报》Aug 06, 2008
















伊斯迈透露,在这之前,新加坡医药协会(Singapore Medical Association)和法律协会也取消它们的类似收费指导原则,因此这个宣布并不令人意外。