Tuesday, August 19, 2008

LTA To Look Into Impact Of ERP Gantries On Chinatown

Source : The Business Times, August 19, 2008

THE Land Transport Authority (LTA) will bring forward its ERP review of the Singapore River Line gantries from November to October, after feedback from the Chinatown Business Association that ERP charges may be having a negative impact on business.

As the ERP was implemented in July, this still gives LTA three months for its customary review and provides sufficient time for vehicle travel patterns to stabilise.

Senior Minister of State for Transport and Finance Lim Hwee Hua said: 'If the traffic situation warrants it, LTA would adjust the ERP charges to be effective from early October instead.' Review results will be announced in late September.

The gantries were introduced to ensure that businesses in the area benefit from smooth-flowing traffic in the long run.

At a meeting yesterday, Chinatown retail and business stakeholders gave LTA feedback on business operating hours, as well as where gantries could be located to control traffic.

Mrs Lim said LTA aims to ensure that ERP rates are pegged at levels that do not discourage users from entering the area simply due to congestion.

'Some of the businesses have been experiencing some slowdown either because of consumer changes or economic conditions. Changes to the ERP rates will not be able to address (this),' she said. 'There are also some issues with regard to public education. A lot of people thought that the ERP hours were operational on Saturdays as well, which is not the case.'

Adjustments to ERP charges in the area will be determined by speeds over different time segments, as well as traffic volume. In addition, LTA will study car park occupancy rates and retail sales figures to 'refine the scheme'.

SLA Sees Good Interest For Infill Sites Ahead Of Auction

Source : The Business Times, August 19, 2008

THE Singapore Land Authority (SLA) yesterday said that it has received about 100 enquiries for the eight infill sites it launched for residential use on June 26. The sites will be auctioned off on Aug 21.

'There has been especially strong interest in the good class bungalow site at Ridout Road and sites in the eastern region of Upper East Coast Road and Tanah Merah Kechil Road,' SLA said. 'These sites received the most number of enquiries.'

Other sites include bungalow plots in Namly Avenue, Braddell Road and Glasgow Road.

Over 30 auction packets were sold for these sites, with quite a number downloaded from SLA's website. Interested parties include individuals, niche developers, architects and contractors, SLA said. This is the second time that SLA is offering such sites for sale through public auction.

In November 2007, six infill sites were sold for some $30.6 million in all. Then, some of the 99-year leasehold residential land parcels went for bargain prices.

A 16,690 sq ft good class bungalow (GCB) site at Eng Neo Avenue was picked up by a buyer at the starting auction price of $6 million - which works out to $360 per square foot (psf).

And another GCB plot, also on Eng Neo Avenue, was sold for $12.1 million - significantly above the starting price of $9.5 million. But the 29,200 sq ft site was still considered a good buy as it went for $414 psf.

UK Biz Body Warns Of Recession Risk

Source : The Business Times, August 19, 2008

(LONDON) An influential body which represents British business says there is a 'distinct possibility' of the country facing recession in the next six or nine months, according to a report published on Sunday.

In its quarterly economic forecast, the British Chambers of Commerce (BCC) said that while a major downturn was unlikely, a cut in interest rates was necessary to counter the threat of serious problems.

Its comments came the week after Bank of England governor Mervyn King said Britain faced an increased risk of recession, with economic growth set to slow further and inflation expected to spike.

'Our quarterly economic forecast highlights a significant worsening in UK economic prospects,' said David Kern, the BCC's economic adviser. 'There is now a distinct possibility of technical recession.' He added that unemployment would climb by up to 300,000 in the next 2-3 years. It would 'likely' reach nearly two million, he said, not ruling out a rise above that.

'Our view is that the threats to growth are more serious and more immediate than the risks of higher inflation,' Mr Kern added. 'The UK economy urgently needs an interest rate cut to counter threats of recession.' - AFP

Fear Of Technical Recession Looms As July Exports Fall

Source : The Business Times, August 19, 2008

Global slowdown does not augur well for sputtering electronics exports

Continuing their downward trend, Singapore's non-oil domestic exports (NODX) shrank by 5.7 per cent in July as the shipment of electronic goods continued to fall.

This followed a 10.5 per cent fall in May and an 11 per cent tumble in June, and some economists are predicting a technical recession after the economy grew just 2.1 per cent in Q2 - the slowest growth in five quarters, and following a revised 6.9 per cent pace in Q1.

'The fall (in non-oil domestic exports) will translate into weaker manufacturing activity, at least for the third quarter, raising the likelihood of a technical recession in 2008,' said Alvin Liew at Standard Chartered.

Said David Cohen, an economist at Action Economics in Singapore: 'The global outlook is looking darker with Japan and Europe probably slipping into recession, and the US still sputtering. It doesn't bode well for demand for Singapore's exports.' A technical recession is defined as two consecutive quarters of economic contraction.

Non-oil retained imports of intermediate goods (NORI) also fell 5 per cent in the month - worse than the 2.8 per cent drop in June, mainly due to lower NORI of consumer electronics, parts of PCs, diodes and transistors and integrated circuits.

Total trade jumped 21 per cent to $88 billion last month.

Minus oil, domestic exports put on a dismal show in July. For example, electronics shipments contracted 14 per cent over the same month last year.

'The contraction in electronic domestic exports was largely due to weaker domestic exports of parts of PCs, consumer electronics, disk drives and ICs,' International Enterprise (IE) Singapore said.

Non-electronic exports posted a slight improvement of 0.3 per cent - reversing its drop of 7.9 per cent drop in the previous month.

'The turnaround in non-electronic NODX was largely led by higher domestic exports of ships and boats, petrochemicals and non-monetary gold,' IE Singapore said.

Except for Indonesia, China, Hong Kong and South Korea, domestic exports to the rest of Singapore's top 10 markets declined in July. According to IE, the United States, the European Union and Thailand were the top contributors to the NODX's fall last month.

NODX shipments to the US were down 33 per cent year-on-year following a 24 per cent drop in June.

Domestic exports to the EU sank 27 per cent, against a 16 per cent decline in the previous month. Shipments to Thailand, which dipped 8.4 per cent in June, tumbled 22 per cent.

Exports to China grew 8.6 per cent last month, bouncing back from a 12 per cent contraction in June. Shipments to Hong Kong, which dipped 0.5 per cent in the previous month, crept up a paltry one per cent.

Exports to Indonesia jumped 29 per cent in July, recovering from a 7 per cent decline in June.

Frasers Targets 'Road Warriors'

Source : The Straits Times, August 19, 2008

FRASERS Hospitality is cashing in on a newly emerging class of business traveller, known as 'road warriors', with the launch of a new, lower-tiered brand of serviced apartments early next year.

The new apartments, to be branded Modena, will cater to business travellers who are on the road so often that high-end accommodation is unrealistic.

Frasers Hospitality currently operates only the Frasers brand, which is a high-end or five-star brand. The first Modena apartments will be in China.

'There's a market for road warriors. It's not necessarily budget,' said Frasers Hospitality chief executive officer Choe Peng Sum of its Modena brand. Frasers Hospitality is the serviced apartment arm of conglomerate Fraser & Neave.

'It's for the people who are travelling so much...If they start staying in Four Seasons or Ritz Carlton, they would bust their budget.'

It's a huge and growing market. Mr Choe said the firm sees a market in China, India, Europe and South-east Asia.

'I would even say it's for the Generation Y road warriors,' he said. The Modena brand will be easier to expand because the market is not as well covered and there is a huge market especially in emerging markets, he said.

Modena can also be sited in areas just outside the central business district and rooms will be smaller than the Fraser brand properties.

In a separate development, the company also told The Straits Times that it will launch its third serviced apartment property in Singapore later this year at Fusionopolis in one-north. Called Fraser Place Fusionopolis, it will be launched in October and opened in November.

It will be a fairly small property with 50 loft units based on the 'work, live and play' concept promoted at one-north. Frasers Hospitality will manage the property - owned by JTC Corp - under a 10-year contract. The other two properties are Fraser Suites in River Valley and Fraser Place in Robertson Quay.

The firm remains optimistic on the business outlook, though the global financial turmoil triggered by the sub-prime problems in the United States has hit the hospitality industry in the region to some extent.

Mr Choe said the banking and financial industries have been affected somewhat but they are prepared for it. 'We have seen this coming and, therefore, we have shifted very heavily into the shipping, petrochemical industries.'

At present, bookings for Frasers apartments boast a three-month waiting list in Singapore, he said.

The Ascott group is adding two more properties in Singapore under its Ascott and Citadines brands. But the serviced apartment market in Singapore still has a limited supply of branded serviced apartments, said Mr Choe.

US Home Builders Stay Grim In August

Source : The Business Times, August 19, 2008

WASHINGTON - Home builder sentiment was stuck at a record low in August, as stringent lending and a flood of foreclosed homes dragged on the real estate market, according to data from the National Association of Home Builders released on Monday.

The NAHB/Wells Fargo Housing Market index held at 16 in August for a second straight month, the group said in a statement.

The August figure matched the median forecast among analysts surveyed by Reuters. Readings below 50 mean more builders view market conditions as poor than favorable.

Despite the weak reading, the Washington trade group said its members hope a recently enacted home buyer tax credit will bolster housing appetite.

'Builders are anticipating the stimulative effects of this legislation and are optimistic that the tax credit will give those buyers who've been sitting on the fence the reason they need to jump back into the market,' NAHB President Sandy Dunn said in a statement.

This sliver of optimism was reflected in an improvement in two of the index's three components.

The sub-index on current single-family home sales ticked up to 16 in August from a downwardly revised record low of 15 in July, and the component on the six-month sales outlook rose to 25 from a record low of 23.

But the reading on traffic of prospective buyers was stuck at a record low of 12, NAHB said.

On July 30, the Housing and Economic Recovery Act was signed into law, which included a provision that gives a temporary US$7,500 tax credit for first-time home buyers who meet certain income requirements.

Meanwhile, the performances of the four regional markets tracked by NAHB diverged in August. The Northeast and Midwest markets improved, while the Western market continued to slide. The Southern market held steady at its depressed level.

An increase in foreclosed sales at discounts hurt the new homes market in the West, NAHB said.

Demand for new homes has also been crimped by heightened anxiety among consumers facing worsening job conditions and tough times in obtaining a mortgage to buy a home, analysts said.

Towering Icons Lend A New Identity

Source : The Straits Times, August 19, 2008

Daring designs such as The Sail add glamour to Singapore's skyline

SKYSCRAPERS here don't have it easy.

They have been panned for spoiling the city skyline or for towering over older buildings which have more 'character'.

They have also been seen as potential death traps when people recall how New York's World Trade Center became a target of terrorists.

But here, where land is scarce, the only way to build is up.

The Sail

Mounting a defence of skyscrapers, Mr Ashvinkumar Kantilal, the first vice-president of the Singapore Institute of Architects, said towering concrete structures will enable Singapore to accommodate its growing population.

'Because of future plans to house a population averaging six million, special considerations must be given to land use to achieve our national objectives. In Singapore, land is so expensive, so the game plan is to maximise its economic potential,' he said.

The URA's draft Masterplan 2008, a document stating the guidelines for buildings based on the intensity of Singapore's projected physical development, is shooting for exactly that.

But critics charge that talk about 'development' covers up the dent in conservation efforts.

They say that with nondescript modern skyscrapers jostling for space in the air, Singapore becomes just another modern-looking metropolis lacking in character; quaint but smaller buildings are being bulldozed into history in the name of creating space for their taller, shinier cousins.

But architects who spoke to The Straits Times said skyscrapers can be glamorous icons.

Mr Tai Lee Siang, 45, president of the Singapore Institute of Architects, believes that if these buildings are planned and designed with a gung-ho attitude, they can have an edge over their regional counterparts.

He said: 'They could lend new identities to cities. With the completion of the new skyscrapers that are more daring and dramatic in design, such as The Sail and Sands integrated resort, Singapore can definitely stand out.'

The professionals, when asked to name some of their personal favourite buildings, obliged.

Mr Ashvinkumar singled out The Concourse in Beach Road, known for its iconic haphazard structure, saying that he was involved in its design 'in my formative years as an architect some 19 years ago'.

Mr Tai was torn between naming the Asia Insurance Building and the OCBC building, both of which he termed 'classic beauties'.

He said the 87m-tall Asia Insurance Building's marble-clad facade and tropical fins make it a one-of-a-kind structure in this region.

Singapore's tallest skyscrapers are Republic Plaza, OUB Centre and UOB Plaza One, which stand at 280m.

They are midgets compared to regional giants like Kuala Lumpur's Petronas Towers, and Taiwan's Taipei 101.

Should Singapore try to measure up?

Mr Ashvinkumar said he did not think so: 'Such massive structures lack a 'human connectivity' factor. Buildings and people have to interact together and not have one dominate over the other.'

Mr Tai shares this sentiment.

Citing the HDB's plans for 50-storey flats at Duxton Plain, he said that while going that high fulfilled a function, the challenge for architects lay in ensuring that these homes did not function the way offices did.

He said: 'Unlike offices, public housing has the additional responsibility of providing a socially harmonious environment. People just cannot be boxed in. They must have the necessary infrastructure in place to interact.'

Frustrated UK Home-Sellers Opt To Let, Not Sell: Survey

Source : The Business Times, August 19, 2008

LONDON - Plummeting house sales and depleted mortgage markets have led to a surge in demand for rented housing in Britain, tempting many frustrated home sellers into renting, the Residential Lettings Survey from the Royal Institution of Chartered Surveyors (RICS) showed on Tuesday.

The survey showed agent instructions to let homes increased at the fastest pace in the survey's 10-year history last quarter, as sellers withdrew houses and flats from the sales market and placed them on the lettings market, pending improvement in buyer demand.

Forty-three per cent more chartered surveyors reported a rise than a fall in landlord instructions, compared to 30 per cent in the previous quarter, the report said.

Surveyors said prospective sellers were keen to exploit growing demand for rented homes as would-be-buyers remained in rented accommodation after finding their home-owning dreams thwarted by anaemic mortgage markets.

Thirty-seven per cent more chartered surveyors reported a rise than a fall in tenant lettings, up from 30 per cent in the last quarter, with demand for family homes remaining stronger than for flats.

Rents have continued to rise while house prices fall, driving gross rental income yields upwards and persuading landlords to hold onto their buy-to-let assets until house prices begin to rise again.

The proportion of landlords opting to sell at the expiry of a tenant lease fell to 2.1 per cent, the lowest level on record, and down from 4.2 per cent in the preceding quarter, which was the previous record.

'The lettings market is booming with many vendors opting to rent their property while sales in the housing market continue to dry up,' RICS spokesman James Scott-Lee said in a statement.

'Becoming a landlord is now an increasingly profitable option with rising rents and yields offering good returns.'

The RICS said established investors would continue to reap the benefits of Britain's housing downturn in the short term although it warned future increases in supply to the lettings market could have an impact on future rental growth as tenant options increase. -- REUTERS

US July Housing Starts Down 11%

Source : The Business Times, August 19, 2008

WASHINGTON - US home building projects started in July fell 11 per cent to the lowest annual rate in more than 17 years, while building permits tumbled 17.7 per cent, the Commerce Department reported on Tuesday.

The annual pace of housing starts at 965,000 slimly beat Wall Street's expectations of 960,000, but it was the lowest since a 921,000 unit rate in March 1991. In June, housing starts rose 10.4 per cent, revised up from the previously reported 9.1 per cent.

Building permits, an indicator of future construction, dropped to an annual rate of 937,000, well below the 970,000 analysts polled by Reuters had forecast. It was the lowest level since March, when they were 932,000, the Commerce Department said. -- REUTERS

Large US Bank Collapse Ahead, Says Ex-IMF Economist

Source : The Business Times, August 19, 2008

The worst of the global financial crisis is yet to come and a large US bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.

'The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say 'the worst is to come',' he told a financial conference.

'We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks,' said Rogoff, who is an economics professor at Harvard University and was the International Monetary Fund's chief economist from 2001 to 2004.

'We have to see more consolidation in the financial sector before this is over,' he said, when asked for early signs of an end to the crisis.

'Probably Fannie Mae and Freddie Mac - despite what US Treasury Secretary Hank Paulson said - these giant mortgage guarantee agencies are not going to exist in their present form in a few years.'

Mr Rogoff's comments come as investors dumped shares of the largest US home funding companies Fannie Mae and Freddie Mac on Monday after a newspaper report said government officials may have no choice but to effectively nationalise the US housing finance titans.

A government move to recapitalise the two companies by injecting funds could wipe out existing common stock holders, the weekend Barron's story said. Preferred shareholders and even holders of the two government-sponsored entities' US$19 billion of subordinated debt would also suffer losses.

Mr Rogoff said multi-billion dollar investments by sovereign wealth funds from Asia and the Middle East in western financial firms may not necessarily result in large profits because they had not taken into account the broader market conditions that the industry faces.

'There was this view early on in the crisis that sovereign wealth funds could save everybody. Investment banks did something stupid, they lost money in the sub-prime, they're great buys, sovereign wealth funds come in and make a lot of money by buying them.

'That view neglects the point that the financial system has become very bloated in size and needed to shrink,' Mr Rogoff told the conference in Singapore, whose wealth funds GIC and Temasek have invested billions in Merrill Lynch and Citigroup In response to the sharp US housing retrenchment and turmoil in credit markets, the US Federal Reserve has reduced interest rates by a cumulative 3.25 percentage points to 2 per cent since mid-September.

Mr Rogoff said the US Federal Reserve was wrong to cut interest rates as 'dramatically' as it did.

'Cutting interest rates is going to lead to a lot of inflation in the next few years in the United States.' -- REUTERS

URA Launches Tender For Office Site At Mohamed Sultan Rd

Source : The Business Times, August 19, 2008

Urban Redevelopment Authority on Tuesday launched the tender for a transitional office site in the pubbing hub of Mohamed Sultan Road.

The 15-year leasehold site has a site area of about 0.62 hectare and a maximum permissible gross floor area of about 9,200 square metres.

The potential office development on the plot is expected to be low rise, with about four storeys, that can be built quickly in about a year, URA said.

The site, with direct frontage along Mohamed Sultan Road, is located within the city centre and a short drive away from the business and financial hub at Raffles Place and Marina Bay. It is well connected to the rest of the island via major arterial roads like Clemenceau Avenue and the Central Expressway and the nearby Clarke Quay MRT station.

URA is offering the site through the confirmed list of the Government Land Sales Programme for second-half 2008.

The tender for the site will close on October 14, 2008.

Hoi Hup-Led Group Top Bidder For DBSS Site In Toa Payoh

Source : The Business Times, August 19, 2008

A consortium led by Hoi Hup Realty has emerged as the top bidder for a Design, Build and Sell Scheme (DBSS) site at Lorong 1A Toa Payoh.

Its bid of about $198.82 million (US$140.66 million) works out to about $160 per square foot of potential gross floor area.

The site is being sold on 103-year leasehold tenure. The consortium that placed the top bid also includes Sunway Developments Pte Ltd and Hoi Hup JV Development Pte Ltd.

The tender attracted two other bids - from TP Development Pte Ltd, which bid nearly $160.3 million and Sim Lian Land ($130 million).

NZ Housing Affordability Improves In July

Source : The Business Times, August 19, 2008

(WELLINGTON) Housing affordability in New Zealand improved to its best level in 18 months in July, driven by lower interest rates and a cooling property market, a mortgage broker said yesterday.

Buyers' market: Falling interest rates, rising wages and lower tax rates are working in favour of home buyers

Wizard Home Loans said an average homebuyer needed to spend 77.4 per cent of post-tax income to afford a mortgage on a median-priced house last month, from 78.3 per cent in June and its lowest since February 2007.

The position of home buyers was expected to improve through the rest of the year.

'Home buyers are in a much stronger position than they have been for a long time,' John Grant, director of New Zealand business at Wizard Home Loans, said in a statement. 'It is a buyer's market and falling interest rates, rising wages and lower tax rates are all working in favour of home buyers as we head back into summer.'

The Reserve Bank of New Zealand cut interest rates by a quarter point to 8 per cent last month, its first policy easing in five years, and has said it was likely to lower them further to support an economy widely seen in recession.

Hit by record high interest rates and soaring food and energy costs, the once-rampant housing market has been cooling rapidly.

Data from the Real Estate Institute of New Zealand showed last week the national median house price held steady at NZ$340,000 (S$342,250) in July, while sales rebounded from 18-month lows.

A tight labour market, buoyant economy and rising net migration gains saw house prices nearly doubled over the past six years. -- Reuters

UK Sees Biggest Fall In Home Prices Since 2002

Source : The Business Times, August 19, 2008

Property slump deepens as banks starve market of mortgage loans

(LONDON) UK house prices posted the biggest annual decline since at least 2002 as banks choked off mortgage lending, deepening London's property slump, Rightmove plc said.

Discount sale: London appears to be having its own special summer sale, with more than £21,000 off in a month, says Rightmove, UK's most-used property website

The average asking price for a home fell 4.8 per cent in August from a year earlier to £229,816 (S$606,350), the biggest yearly drop since Rightmove began measuring home values six years ago.

Britain's most-used property website also said yesterday that prices dropped 2.3 per cent in the month, the most since December, led by London.

'The lack of mortgage finance is central to the problem,' Miles Shipside, commercial director of Rightmove, said in the statement. 'London, in particular, appears to be having its own special summer sale, with over £21,000 off in a month.'

Bank of England governor Mervyn King said last week that the housing market faces 'a significant adjustment' as banks ration loans for home buyers. Falling prices may exacerbate the economic slowdown as the threat of a recession looms and unemployment rises the most in 16 years.

The pound traded at 1.8671 against the US dollar at 10.05am in London, from 1.8623 on Sunday, the currency's first gain in 12 days. Against the euro, it was at 78.90 pence.

Prices in London fell 5.3 per cent on the month and 3.8 per cent from a year earlier. Each of the 32 districts in the capital showed a decline, and the biggest drop was in the south-west area of Wandsworth, where values fell 7.9 per cent. Hackney, in east London, was the best performer, with a 0.6 per cent decline.

The stock of unsold property per real estate agent rose for a seventh month to 78, from 77 in July. The number of transactions may reach the lowest since 1959, Rightmove said.

Banks have starved the market of loans after more than US$500 billion in losses and writedowns worldwide from the US mortgage market collapse. UK mortgage approvals fell to the lowest since at least 1999 in June, the Bank of England said on July 29.

The Royal Institution of Chartered Surveyors said last week that the housing market is at a 'virtual standstill'. Mr King said on Aug 13 that 'there is a feeling of chill in the economic air' and that 'the British economy is going through a difficult and painful adjustment' that 'cannot be avoided'.

Weakness in the housing market may 'amplify' the impact of the lending squeeze on household spending, the central bank said last week.

Retail sales probably fell for a second month in July, dropping 0.2 per cent, according to the median forecast of 32 economists in a Bloomberg News survey. The government's statistics office will release that data on Aug 21.

Britain's gross domestic product will either stagnate or contract in the next two or three quarters, meaning the economy may fall into a recession, the British Chambers of Commerce said in forecasts released yesterday.

Confidence on business prospects fell to the lowest level in at least six years, according to a survey of more than 200 companies released by Lloyds TSB Group plc yesterday.

The index of sentiment on the next 12 months fell to 22 in July, the lowest since the survey began in 2002, from 32 in June.

The economy probably grew 0.1 per cent in the second quarter, less than previously estimated and matching the slowest pace since the aftermath of the last recession in 1992, the median forecast of 34 economists surveyed by Bloomberg News shows.

The statistics office will publish the figures on Aug 22.

The central bank kept its benchmark interest rate at 5 per cent on Aug 7 for a fourth month, as policy makers weighed the risk of accelerating inflation against the threat of a recession. Minutes of their meeting, showing how the panel voted, will be released tomorrow.

The ongoing fall in house prices 'is set to become increasingly painful for consumers over the next year', Lena Komileva, an economist at Tullett Prebon in London, said in a note to clients yesterday. -- Bloomberg

China Property Sector Slowing Down

Source : The Business Times, August 19, 2008

(BEIJING) Property investment has slowed in China since mid-year, both in value and land area, amid tighter credit and buyers' uncertainty, official statistics released yesterday show.

The National Bureau of Statistics said that between January and July, investment in real estate development totalled 1.588 trillion yuan (S$326.7 billion), up 30.9 per cent year-on-year.

However, the rate of increase was 2.6 percentage points less than the rate in the first half.

Spending on residential projects was 1.15 trillion yuan, up 33.7 per cent but 2.8 percentage points lower than in the first half alone.

The total included 45.9 billion yuan in low-income housing, up 25.2 per cent but six percentage points less than in the first half.

In the first seven months, 148 million square meters of land went under development, up 4.2 per cent year-on-year. However, the growth rate was 5.7 percentage points lower than in the first half.

About 2.23 billion sq m of housing were under construction during the January-July period, up 22.5 per cent. Yet again, the growth rate slowed from the first half, by 1.6 percentage points.

Previously, the central bank had reported that first-half lending to real estate developers and home buyers was 398.84 billion yuan, down 170.66 billion yuan from a year earlier.

Since the end of last September, when China tightened credit for those buying more than one apartment, demand has ebbed.

Additionally, price falls in some cities have made prospective buyers wary.

Developers sold about 260 million sq m of housing in the first six months with a value of one trillion yuan, representing decreases of 7.2 per cent and 3 per cent year-on-year, respectively.

The National Bureau of Statistics also said that between January and July, 129 million sq m of commercial property was vacant, up 6.1 per cent. This was one of the few cases where the growth rate rose from the first half; in this case, by 3.9 percentage points. -- Xinhua

Atrium, Crosby Sales Among Top 5 Asia-Pac Deals In Q2

Source : The Business Times, August 19, 2008

But DTZ says S'pore commercial property sales in Q2 fell 24% from Q1

INVESTMENT sales of property in Singapore slowed in the second quarter of this year, but the sales of The Atrium @ Orchard (US$617 million) and 71 Robinson Road (on the former Crosby House site) for US$547 million made it to the list of top five commercial real estate deals in the Asia-Pacific region in the second quarter of 2008, according to DTZ Research's Q2 2008 Asia Pacific Investment Brief.

No 4 ranking: The Atrium @ Orchard's US$617 million price tag was dwarfed by Tokyo's Resona Maruha Building, Shinsei Bank Building and Shanghai's The Centre

Total transaction value of commercial real estate across Asia-Pacific was about US$19.6 billion in Q2, a decrease of over US$2 billion or 10 per cent from Q1 2008 and down a bigger 43 per cent or almost US$15 billion from the peak in Q3 last year, DTZ's numbers showed.

With the global economic outlook remaining uncertain, transactional activity in the region is expected to stay subdued. However, with many international investors looking to Asia as the engine of growth over the next 18-24 months while the US and European economies slow, this should ensure that capital continues to flow into the region to supplement the already-high levels of liquidity and equity that exist in many markets in Asia-Pacific, the property consulting group said.

'Those economies that are the most open and have the greatest exposure to markets in the US and Europe are likely to be most affected,' DTZ said.

Transaction values in the four largest markets of Tokyo, Singapore, Hong Kong and Australia have dropped markedly over the last three quarters from a peak of over US$27 billion in Q3 last year to just under US$15 billion in Q2 2008.

For the Asia-Pacific region as a whole, DTZ noted that despite declines in transaction values, activity is still well above the long-term average for the region. It is expected to remain so through this year as investors remain committed to increasing their exposure to Asia-Pacific,' the report said.

As the global economic outlook remains uncertain, DTZ expects transactional activity to remain subdued. 'However, we are unlikely to see the significant decline in activity or values that have been seen in other markets around the world, most particularly in the US and UK, although there could be isolated incidents within Asia-Pacific,' DTZ added.

The US$1.5 billion sale of Resona Maruha Building in Tokyo was the biggest transaction in the Asia-Pacific in Q2 2008, followed by the US$1.1 billion sale of Shinsei Bank Building (BR), also in Tokyo. In third position was the deal for The Centre in Shanghai (US$639 million), followed by The Atrium @ Orchard and 71 Robinson Road in Singapore.

DTZ's numbers on commercial real estate cover office, retail, industrial, mixed-use, healthcare, educational property and infrastructure such as carparks.

For Singapore, the value of such real estate transactions fell 24 per cent from $5.9 billion in Q1 2008 to $4.5 billion in Q2.

CB Richard Ellis executive director Jeremy Lake said that investment sale deals in the Singapore commercial property sector (office and retail) for the second half of this year will likely be less than the level achieved in the first-half.

'Even though there are quite a number of property funds and institutional investors with money to spend, the volume of deals is slowing down,' he said. 'In the retail property sector, traditionally the deal flow has been poor as there have been few sellers. In the office sector, there are some sellers, but there's often a price gap of 10-20 per cent between buyers and sellers.'

Buyers of Singapore office blocks have been adopting a more cautious stance more recently due to a combination of concerns over an increase in supply as major office developments are completed from 2010 onwards and an element of uncertainty over whether companies will continue to expand at the same pace, Mr Lake added.

US Recession Likely: UBS

Source : The Straits Times, August 19, 2008

ZURICH - THE United States is likely to slip into recession in the coming months as the cushioning impact of sharp interest rate cuts and tax rebates wears out, UBS bank economists said on Tuesday.

Real economic growth in the United States is expected to reach 1.3 per cent this year, but just 1.0 per cent next year. -- PHOTO: AP

'Sharp cuts in interest rates and tax rebates have prevented the US economy from sliding into recession until now,' said UBS in a statement.

'But the economists of UBS Wealth Management now expect the effects of fiscal concessions to peter out in the second half of the year, leaving the US economy facing the inevitable prospect of recession.'

Real economic growth in the United States is expected to reach 1.3 per cent this year, but just 1.0 per cent next year.

In the Eurozone, a sustained period of weakness is forecast, but the region is unlikely to sink into a severe recession, the bankers said.

The outlook for Asia's fast-growing economies is also uncertain, added the economists, noting that a 'steady deceleration in growth' is seen for the region. -- AFP


Source :《联合早报》August 19, 2008