Tuesday, September 9, 2008

TID Top Bidder For Tanah Merah Site

Source : The Business Times, September 9, 2008

A state tender for a 99-year leasehold private condominium site next to Tanah Merah MRT Station has drawn seven bids.

TID Pte Ltd's top bid of S$84 million works out to about S$282 per square foot of potential gross floor area.

The other bidders were Sim Lian Land (which bid S$75 million), Boon Keng Development, Bishopgsate Developments, FCL Emerald, Hoi Hup Realty and First Changi Development.

The tender, conducted by Urban Redevelopment Authority, closed at noon on Sept 9.

‘Bright Future Ahead For IRs’

Source : TODAY, Tuesday, September 9, 2008

New Sentosa Leisure Group chief is upbeat about tourism growth

ECONOMIC growth forecasts may be trimmed, and hiring may falter, but a slowing economy may actually turn out to be a blessing in disguise for Singapore’s integrated resorts (IRs).

So says Mr Mike Barclay, the new chief executive of Sentosa Leisure Group, which manages the 500-hectare (1,235-acre)island on Singapore’s southern tip where the Resorts World at Sentosa integrated resort is being built.

“With a slower economy, you could see a little bit of relief in some of the drivers, including increasing constructions costs”, Mr Barclay told Today on the sidelines of a Forbes Global CEO Conference *briefing yesterday.

A combination of rising costs and supply shortages has reportedly caused the budget of some building projects across Singapore to soar by as much as 30 to 50 per cent.

Marina Bay Sands, Singapore’s other IR being built near the central business district, was recently reported to have blamed soaring prices of building materials for costs increasing from an estimated US$3.6 billion($5.12 billion) to US$4.5 billion.

Similarly, last November, Resorts World bumped up its budget to $6 billion from $5.2 billion.

Marina Bay Sands and Resorts World are slated to be open by the end of 2009 and 2010 respectively.

When asked about the progress of construction for the Sentosa IR, Mr Barclay said that Genting, the company behind the 49-hectare project, is “pushing very hard” to meet the deadline.

“They see the great long-term goal of getting the *integrated resort up and running. Resorts World has a lot to offer businesses to Singapore and I think they share in this vision which.. (wouldn’t) be affected by the short term turbulence in the economic situation”, he added.

Mr Barclay, who is less than a month into his Sentosa role, also expressed optimism in Singapore’s tourism industry despite the recent hiccups in tourist arrivals to the Republic.

“The whole tourism industry is really looking at medium to long term goals, so whatever the short term turbulence this and next year, there’s a very bright future for the industry. We are coming out with some really great attractions in the coming years,” he said.

Future attractions at *Resorts World include a *Uni-versal Studios theme park and a marine-life park.

Mr Barclay predicts visitor arrivals to Sentosa Island will reach 15 million a year by 2015, a target set in February this year.

Sentosa island currently enjoys annual visitor arrivals of about 6 million.

CapitaLand Sells Somerset Orchard

Source : TODAY, Tuesday, September 9, 2008

FOLLOWING asset sales in China and Malaysia, CapitaLand yesterday said it has sold the Somerset Orchard serviced residence to OG Pte Ltd for $100 million in cash.

The real estate group expects to book a gross gain of $43 million from the sale of the 88-unit block, which has acarrying value of $57 million.

The property was owned by CapitaLand’s serviced apartment subsidiary, the Ascott Group, which will continue to manage the apartments for 15 years with the option to renew the contract for another 10 years.

The purchase price for the block, which is located above Orchard Point, works out to about $1,530 per sq ft.

OG bought Orchard Point’s four-storey retail podium from Ascott in 2001. The company runs its OG department store in the podium and had the first right of refusal for the serviced apartments based on a previous agreement. OG declined to comment when contacted about its purchase.

Ms Jeannie Chua, Ascott’s president, said: “The divestment of Somerset Orchard is part of our strategy to efficiently manage our capital assets to ensure that they are redeployed and reinvested in higher-yielding assets and for expansion in high growth markets.”

Mr Chong Kee Hiong, deputy chief executive of finance and investment from Ascott, said proceeds from this sale will be channeled to other opportunities to enhance the global presence of the company.

He said: “Since the beginning of the year, Ascott has made strategic investments in keycities of Melbourne in Australia, Ahmedabad in India and London in the United Kingdom.”

At the end of last month, CapitaLand sold its 30-per-cent stake in Inverfin, whose principal asset is a 50-storey building in Kuala Lumpur. The deal, worth about RM176 million ($73 million), gave the company a gain of about $22 million.

The company last week also sold its Chinese office property, Capital Tower Beijing, for US$352 million ($501 million) and recognised a gain of $163 million.

Martin No 38? In Demand

Source : TODAY, Tuesday, September 9, 2008

SC Global Developments has received a strong response to its private views for its latest high-end residential project, Martin No 38 (picture).

All 30 units released in the first phase of marketing have been sold at an average price of $2,130 per square foot (psf), above the expected average price of $2,000 psf.

“We are naturally very pleased with the response and how well-received the project has been by the buyers,” said Mr Simon Cheong, SC Global’s chairman. “We have always held the view that there is demand for the right product.”

SC Global had previously planned to debut this project in late September.

“Therefore this take up and response has exceeded our expectations,” said Mr Cheong.

There are a total of 91 units in this freehold development in Martin Road, near Mohammed Sultan Road and Clarke Quay.

Its units comprise mainly one-plus-one bedroom and two-bedroom apartments ranging from 969 to 1,130 square feet.

30 Units Sold At Martin No. 38

Source : The Straits Times, Sep 9, 2008

SC Global sells loft-style apartments at higher prices than expected

DEVELOPERS will take heart from news that all 30 private preview units at SC Global's New York-style loft apartments in Martin Road have been sold at better-than-expected prices in the past fortnight.

The company had said it was expecting around $2,000 per square foot for the project but sales came in at $1,881 psf to $2,494 psf, or an average of $2,130 psf.

That would make the flats around $2 million to $3.8 million, depending on the size and location in the 15-storey freehold development called Martin No. 38.

The firm announced yesterday that it defied expectations by selling about a third of the 91 units, with about 60 per cent of the buyers coming from overseas.

An investment bank had recently forecast a take-up rate of slightly over half of the preview units.

SC Global chairman and chief executive Simon Cheong told The Straits Times that the prices he achieved were clearly the highest in the area on a psf basis at this time. The prices also buck the trend, with sentiment in the property market still weak, particularly in the high-end sector.

'These are 30 fellows buying in the midst of a storm. They must have seen a lot of value,' said Mr Cheong. 'To sell 30 units without an official launch, that has to do a lot with our branding.'

A market watcher who declined to be named said there has been little change in prices of some other developments in the area, with a few even falling.

Deals in the Robertson Quay area have been done at $1,130 to $1,840 psf this year although some Rivergate units sold for over $2,000 psf last year.

'It's like a salmon swimming against the tide,' said Knight Frank director of research and consultancy Nicholas Mak, of the rarity of projects selling at 30 to 40 per cent above market like Martin No. 38, given today's gloomy sentiment.

A market watcher noted that high pricing works in a bullish market but in the weak market prevailing now, sales are likely to slow after the first 20 or 30 per cent is sold.

The developer says there is no need for an official launch as it has sold out its preview units. It has yet to decide on the launch of the second phase

'In good and bad times, if your product is strong, you can still sell,' said Mr Cheong. 'We could have launched next year but as far as a public company is concerned, we try to phase our launches.

'In good times, a lot of people can claim a lot of wonderful things... This is a time when you 'differentiate yourself'.'

Martin No. 38 will feature high ceilings and seamless interior spaces, like the warehouse lofts in Lower Manhattan.

It has mostly small units of 969 sq ft to 1,130 sq ft with a limited number of larger ones of 1,335 to 1,485 sq ft. There will also be four penthouses with pools.

SC Global bought the site in 1999. It has said that it deferred development partly to wait for the surrounding environment to be ready.

'Although we are a developer, we don't rush,' said Mr Cheong. 'The planning process took two to three years.'

It also has a site in the Ardmore Park area and another leasehold site in Sentosa Cove. Both are in the design stage, said Mr Cheong.

OG Buys Orchard Serviced Apartments From Ascott

Source : The Straits Times, Sep 9, 2008

DEPARTMENT store chain OG has bought a block of serviced residences that form part of its Orchard Point store in Orchard Road.

The local unlisted retailer paid The Ascott Group $100 million in cash for the 88-unit Somerset Orchard.

Ascott, the serviced apartment arm of property heavyweight CapitaLand, had originally sold OG the four-storey Orchard Point retail podium in 2001.

At that time, it agreed to offer the retailer the right of first refusal for the serviced residences on the sixth to 10th storeys of the building.

Ascott will continue to manage the residences for 15 years, with an option to renew the contract for another 10 years, it said in a statement yesterday.

The deal yields Ascott a gross gain of $43 million and works out to a price of about $1,530 per sq ft for the property, which has about 74 years left on its lease.

The price is 'reflective of current market sentiment', said Mr Donald Han, managing director of property consultancy Cushman & Wakefield.

'It looks cheap compared to other Orchard Road residences, but the location is not as prime as Orchard Turn and it's a leasehold property that's about 20 years old,' he added.

Mr Han suggested that OG's reason for the purchase was to have 'total envelope internal and external control' of the building.

'If they have plans to refurbish it, they can create a more thematic approach for the entire development.'

For Ascott, the sale would be in-keeping with its asset-light goal. 'It's a win-win scenario,' Mr Han said.

Generally, property experts viewed the purchase favourably for OG.

'From an investment point of view, it's a good deal,' said Mr Craig Ward, director of commercial investment at Jones Lang LaSalle.

'Anyone buying into the serviced apartment market has pretty strong foresight.

'There isn't huge amount of supply of serviced apartments but there is a substantial amount of demand, as serviced apartments provide a good alternative for hotels.'

Ms Sherene Sng, head of retail at Knight Frank, agreed. 'The shortage of hotel space in Singapore now is quite acute, so I would think any company on the lookout for business opportunities would jump at the chance to own these serviced apartments; they're the flavour of the month at the moment.'

While it is unlikely that OG will convert the serviced residences to shops, there is a possibility it could top up the lease to a fresh 99 years and convert the block to residential apartments, said Mr Han.

'It may not be the intention for OG's purchase, but the value of the property could be in topping up the lease in the future,' he said.

Serviced apartments are zoned for residential use, not hotel use, which could make it easier to convert.

UK To Act On Mortgage Market

Source : The Straits Times, Sep 9, 2008

LONDON - BRITISH finance minister Alistair Darling is preparing to intervene to stimulate the UK housing finance market, The Times newspaper quoted senior government officials as saying.

The newspaper said Mr Darling was waiting for the final proposals from James Crosby, the former chairman of HBOS, on which he will base his efforts to revive the ailing British mortgage market.

'Key elements in the Crosby report that Mr Darling is considering most closely are those to renew or extend the Bank of England's Special Liquidity Scheme and another to create a government guarantee for high-quality mortgage securities,' it said.

The Times said the Chancellor's proposals were likely to be finalised and presented in the Pre-Budget Report.

Mr Darling was also said to be considering a multibillion plan for the government itself to temporarily guarantee high-quality mortgage-backed securities, helping to create investor demand for quasi-government bonds, aid lenders to sell their loans and boost the supply of finance for lending. -- REUTERS

Noise, Fumes & Parking

Source : The Straits Times, Sep 9, 2008


For some residents, having pubs, eateries nearby signals the end of peace and quiet

A PROPOSAL to tweak the rules to make it easier for restaurants, pubs and shops to offer live entertainment and do on-site cooking is making residents of private housing estates nervous.

Food and entertainment strips like are popular but some residents find it all too much to stomach. -- ST PHOTO: ALPHONSUS CHERN

To them, relaxed planning guidelines will bring noise, parking woes and oily kitchen fumes to their quiet neck of the woods.

The Urban Redevelopment Authority (URA) announced on Aug 29 that it was considering cutting the red tape for businesses, especially those seeking to set up shop in private housing estates.

It is collecting views from the public on the move, aimed at injecting vibrancy into these areas.

But it appears that some residents are not keen on having buzz.

The Straits Times last week visited six housing estates with entertainment and dining strips to ask residents what they thought of entertainment and dining options on their doorstep.

In Thomson Ridge off Upper Thomson Road, residents are unhappy about the noise that patrons of the nearby bars and restaurants make.

Long-time resident Janet Chew, whose house is next to the bar Liquid Kitchen, grumbled: 'Normally it's already very bad, very noisy. But it's worse during football matches or during events like the Beijing Olympics! They shout and scream, as if they're doing a mini Kallang Roar.'

In Jalan Legundi off Sembawang Road, foodies flocking to the eateries there are causing a parking problem, especially on weekends.

Resident R.V. Raju, 53, said these visitors are 'a nuisance', parking on both sides of the road and giving grief to residents wanting to get in and out of their driveways.

The problem eased when the URA created paid parking lots, but residents fear the nightmare will return if the relaxed guidelines spawn new eating places.

Parking is also an issue in Serangoon Gardens, with what resident Jonathan Lim, 47, describes as 'havoc' and 'unbearable honking' at the junction of Serangoon Gardens Way and Yio Chu Kang Road.

'I feel like my neighbourhood has been invaded,' the businessman moaned.

But some people welcome the buzz.

Ms Serene Wong, a teacher in her 30s, said she liked having more food and entertainment options in her Sunset Way neighbourhood.

But she suggested compromises, such as allowing live music only during weekends.

Businesses near residential areas said they would offer more entertainment and food choices if the rules are relaxed.

For instance, Ms Apple Soh, the manager of Perle Noire Oyster & Grill Bar in Siglap, said bringing in light jazz singers is an option.

Aspiring entrepreneurs are also looking out for the results of the public consultation.

Ms Melissa Li, 24, who hopes to set up a food shop by the end of this year, said: 'As it is, there are many approvals I have to apply for, so one fewer would be good.'

Most business owners were willing to do the necessary to accommodate residents.

Restaurateurs in Teck Chye Terrace off Upper Serangoon Road, for instance, have responded to parking woes and jams in the area: They allow customers to double-park along the road, but require them to leave slips of paper with their cellphone numbers on the dashboard, so when a customer needs to drive off, he calls the person blocking his way to move his car.

Meanwhile, Mr Colin James, the manager of Liquid Kitchen, said he has tried to control noise levels by seating big groups near the road and moving them indoors after 11pm.

But some residents say this is not enough. Mrs Chew said: 'We want peace and quiet. That's why we live in landed property in the first place.'


Give your feedback online

THE URA is gathering feedback on the proposed review of planning guidelines for restaurants, food shops and pubs in non-HDB shophouses near residential areas.

The three areas being reviewed:

# For restaurants: Should 'live' light entertainment be allowed?

# For food shops: Should businesses with takeaway food counters be automatically allowed to have on-site cooking facilities?

# For pubs: Should pubs on the fringe of residential areas be allowed to offer 'live' music and performances, and what kinds?

The public has until Sept 30 to give feedback at www.ura.gov.sg.

CapitaLand To Book $43m Gain From Building Sale

Source : The Business Times, September 9, 2008

CAPITALAND will book a gross gain of about $43 million from the sale of Somerset Orchard by its fully owned serviced residences unit The Ascott Group.

Ascott has entered into a conditional sale-and-purchase agreement to sell Somerset Orchard, an 88-unit serviced residence in Orchard Road, for $100 million cash or about $1,530 per square foot to OG Private Limited.

The property is on a site with a remaining lease of 74 years. The carrying value of the property is $57 million.

After the divestment, Ascott will continue to manage the serviced residence for 15 years, with an option to renew the contract for another 10 years. Somerset Orchard is part of Orchard Point, which also includes a four-storey retail podium owned by department store retailer OG.

Ascott made an offer to OG to buy the serviced residence component of the complex in accordance with the right of first refusal granted to OG when the latter bought the retail podium from Ascott in 2001 for $91 million.

Ascott president and CEO Jennie Chua said that the serviced residence chain's presence in Singapore has been enhanced with the recent opening of Ascott Singapore Raffles Place. 'Our new property, Citadines Singapore Mount Sophia, is also scheduled to open in 2009,' she said.

Ascott deputy CEO (finance & investment) Chong Kee Hiong said: 'In line with Ascott's strategy to optimise the use of capital, the proceeds from this divestment will be redeployed to other investment opportunities to enhance our global presence.'

Since the start of this year, Ascott has made strategic investments in Melbourne, Ahmedabad and London.

CapitaLand's second-quarter results announcement last month showed that Ascott posted an 87.3 per cent year-on-year drop in earnings before interest and tax (Ebit) to $17.9 million, while H1 2008 Ebit fell 66.3 per cent to $57.4 million. The Q2 2007 figure included a gain from the sale of Master Golf and Country Club.

The deconsolidation of Ascott Residence Trust, which was listed last year, also contributed to the lower H1 2008 Ebit. However, Ascott's Q2 revenue rose 12.5 per cent to $120.5 million, due largely to serviced residence operations in Europe and China. The group sold $138 million of its serviced residence portfolio in H1 2008 and hinted then that it was looking at further divestments.

Parent CapitaLand, whose first-half net profit declined 49.8 per cent year-on-year to $762.7 million, recently announced deals to sell its stakes in Capital Tower Beijing and Menara Citibank in Kuala Lumpur.

Surge In Japan Real Estate Companies Filing For Bankruptcy

Source : The Business Times, September 9, 2008

(TOKYO) The number of Japanese real estate companies filing for bankruptcy protection surged 23.5 per cent in August from a year earlier as banks choke off loans to the industry.

Gloomy scene: The number of Japanese developers filing for bankruptcy protection reached 42 last month, according to credit research firm Tokyo Shoko Research

The number of developers filing for bankruptcy protection reached 42 last month, Tokyo Shoko Research Ltd, a credit research firm, said in a report yesterday.

The total number of bankruptcies rose to the highest for the month of August since 2003, gaining 4.2 per cent from a year earlier.

Liabilities at failed real estate companies more than doubled from July to 438.97 billion yen (S$5.8 billion), although they fell 24.9 per cent from a year earlier because of the bankruptcy a year ago of unlisted Azabu Tatemono KK with 564.8 billion yen of debt.

Accumulated debt by failed real estate companies accounted for half the total liabilities among all Japanese companies that went under in August.

Banks cut lending as growth in Japan's property market slowed and the collapse of the sub-prime market in the United States kept potential buyers from making acquisitions.

Japanese developers are also being squeezed by higher prices for steel and other raw materials used in construction, and by the government's revisions to building-approval regulations last June that delayed projects.

An accumulated total of 113 bankruptcy cases filed as of the end of August is related to stricter building codes, Tokyo Shoko Research said.

Loan growth at Japanese banks stalled for a second straight month in August, the Bank of Japan said yesterday, as the economy moved closer to recession.

Bankruptcies among real estate companies forced banks to cut earnings forecasts because of non-recoverable loans.

Urban Corp, Japan's seventh-largest developer by market value in 2006, on Aug 13 filed for bankruptcy protection with US$2.4 billion in debt, the biggest bankruptcy of a publicly traded company in Japan in six years, according to Bloomberg data.

Total employees affected by bankruptcies in August rose 42.9 per cent to 13,704, the highest this year.

Forty-two per cent of those affected were from the construction and real estate industries, Tokyo Shoko Research said.

The list of Japanese real estate companies filing for bankruptcy will grow this year, Takeo Higuchi, chairman of Daiwa House Industry Co, Japan's second-biggest home builder by market value, said on Aug 27.

Financial Services Minister Toshimitsu Motegi said on Sept 2 that Japan's government would urge the nation's so-called mega- banks and regional banks to lend more to small and mid-sized companies after July bankruptcy data rose to a record high.

The number of bankruptcies among real estate companies is likely to increase, regardless of what regulators say, said Junko Miyakawa, a credit analyst at Shinsei Securities Co.

'Default rates will probably continue to rise,' Mr Miyakawa said.

'No matter what the Financial Services Minister says, financial institution probably won't increase their loan exposure to small- and medium-sized companies.' - Bloomberg

Ramp-Up Warehouses Offer More In Rental Returns

Source : The Business Times, September 9, 2008

RAMP-UP warehouse facilities may be relatively new in Singapore but rents show they can offer better investment returns.

According to a white paper by Colliers International, ramp-up warehouse facilities in Penjuru and Changi go for $1.30-$1.50 and $1.70-$1.80 psf per month respectively.

Multi-storey warehouse facilities with cargo lifts (upper floors) in the same vicinity go for $1.00-$1.20 and $1.40-$1.60 respectively.

Direct vehicular access to every floor in a ramp-up warehouse development effectively makes every floor comparable to a ground floor level unit, says Colliers.

'It therefore allows developers to charge ground floor rents for every unit in the development.'

In a conventional multi- storey warehouse, upper- floor units command lower rents than ground-floor units because users have to load and unload by cargo lift.

The rent differential can range from $0.20 to $0.50 psf per month depending on location.

Colliers says the opportunity to charge ground-floor rents for every unit on every level in a ramp-up warehouse development can raise rental revenue as much as 30 per cent at present.

'And in the future, when more industrial developments go high-rise, the rental gap could widen further.'

Colliers says that in Hong Kong, ramp-up multi- storey space is believed to command 40 per cent more than multi-storey space without ramps.

Tenants also benefit, it says. Service charges are about $0.20 psf per month lower than in a conventional multi-storey warehouse because cargo lifts use a lot of power and can require high maintenance.

Singapore now has about 13 million sq ft of ramp-up warehouse space, equivalent to 19 per cent of the island's 69.4 million sq ft of total warehouse space, according to Colliers.

Singapore Office Occupancy Costs 7th Highest Worldwide: Survey

Source : The Business Times, September 9, 2008

GRADE A office space in Singapore was the seventh most expensive in the world in June this year, a survey has found.

The average annual Grade A office gross rent here was US$125.06, according to the study by Colliers International.

Cities that were dearer included Hong Kong (US$213.68), London's West End (US$207.42) and Moscow (US$167.29).

Singapore was the third most expensive location in the Asia-Pacific region, after Hong Kong and Tokyo.

In its Global Office Real Estate Review Midyear 2008, Colliers says average annual Grade A office rent in Singapore soared to US$113.49 in December 2007, from US$84.64 in June 2007.

In terms of vacancy rates, Singapore at 7.5 per cent in June 2008 ranked 13th in the Asia-Pacific, below the likes of Perth (0.3 per cent), Seoul (0.7 per cent) and Brisbane (1.2 per cent).

While the vacancy rate here rose marginally from 6.1 per cent in December 2007, Collier's director of research and advisory Tay Huey Ying said: 'Singapore registered a comparatively higher vacancy rate in the first six months of this year. This was due in part to the government providing relief to the supply shortage by leasing out some disused state properties and selling several sites for transitional office use.'

Companies appear to be increasingly receptive to alternative business locations and premises, Ms Tay said.

'Office users, who have had to grapple with the frenzied pace of rental growth experienced since mid- 2006, can heave a sigh of relief as rental growth eased substantially in the first half of 2008 on the back of reduced pressure on supply,' she said.

In terms of supply, Colliers said Singapore had 8.6 million sq ft of offices under construction in June, putting it in 16th position below cities like Dubai (42 million sq ft), Shanghai (41.6 million sq ft) and Guangzhou (19.8 million sq ft).

Office investment held up in the Asia-Pacific but was down in Europe and North America.

Global office investment fell 60 per cent - or 41 per cent excluding portfolio sales - in the first half of 2008 to $108 billion, from $268.6 billion a year earlier.

But Japan saw office transactions increase 103 per cent, followed by Hong Kong (up 86 per cent) and Singapore (up 58 per cent). China registered a drop of 16 per cent.

Capitalisation rates / initial yield in Tokyo (Central Wards), Hong Kong and Singapore were 3.9, 3.42 and 6.19 per cent respectively.

In Spain and The Netherlands, office transactions increased 77 per cent and 14 per cent respectively, while in London they fell 64 per cent.

The US remained the most active office investment sales market, even though volume dropped 69 per cent to US$28.6 billion.

50% Of Retail Space Leased At Fusionopolis

Source : The Business Times, September 9, 2008

Cold Storage and Fitness First are two of the largest tenants

AS the first phase of Fusionopolis approaches its official opening next month, more than 50 per cent of retail space in the development has been taken up.

The upcoming research and development (R&D) hotspot, comprising two towers and a podium in phase one, has around 183,000 sq ft of retail space. With seven tenants already secured, some 86,100 sq ft are left.

Upcoming hotspot: Rents for the retail space range from $4.50 to $12 per sq ft, depending on the usage

Cold Storage and Fitness First are two of the largest tenants. Fitness First @ Fusionopolis, with a rooftop swimming pool, will occupy 30,000 sq ft. According to JTC Corporation, the fitness club's members have been able to use the facilities starting yesterday.

Starbucks Coffee, Harry's Bistro & Bar, food and beverage (F&B) outlet Black Canyon, Raffles Medical Group and Frames & Lenses (Optical) will also be moving into the first phase of Fusionopolis.

Rents for the retail space range from $4.50 to $12 per sq ft, depending on how the units are used. Larger units also enjoy a lower psf rent.

'We are heartened by the enthusiastic response from our business partners in locating their retail and F&B outlets at Fusionopolis,' said JTC Corp's assistant CEO, Philip Su.

'It is an endorsement of what the vibrant Fusionopolis stands for, as the first integrated development within one-north which embraces all four work-live-play-learn elements.'

Frasers Hospitality will also be launching its brand of serviced apartments in Fusionopolis, comprising 50 work loft units.

JTC Corp is in talks with more retail and F&B businesses to take up the remaining space. 'We welcome all other like-minded and enterprising business partners to join us in realising the vision of this unique innovative hub,' said Mr Su.

Fusionopolis is a major development at one-north catering to the infocomm, media, science and engineering industries. The first phase has around 1.29 million sq ft of floor space and major R&D tenants include institutes and laboratories under A*Star's science and engineering research council.

Phases 2A and 2B of the Fusionopolis are likely to be completed by 2010.

China Developers Hard Pressed, Not Distressed Yet

Source : The Business Times, September 9, 2008

Govt moves to ease property curbs cool funds' firesale hopes

(HONG KONG) Bargain Chinese property projects will be up for grabs in coming months as developers scramble to survive falling home sales and a funding crunch.

But circling foreign funds can no longer expect a big firesale as the Chinese government eases its tough steps to cool the market, fearing mass bankruptcies and a property price slide that would send a shiver through the economy.

In the balance: With loans to developers down 30% in the first half of this year, many firms are vulnerable, especially if they took part in a land buying frenzy last year

When Beijing upped the ante in a fight against property speculation at the end of last year by ruling that buyers of second homes must pay 40 per cent in equity, apartment sales and prices slid in the southern cities of Guangzhou and Shenzhen.

Developers, already squeezed by a land appreciation tax and a clampdown on bank lending, then found that capital market turmoil closed off share and debt issuance.

Some fund managers believed their time had come, and cheap deals would open up a Chinese property market where a yearly influx of 8 million people into cities promises long-term riches.

They are still waiting. 'We expected there to be a lot more guys going under and a lot more forced sale situations,' said Chris Gradel, managing partner at Pacific Alliance, which manages about US$4.5 billion in alternative asset funds targeted at China and Vietnam.

Describing the resilience of Chinese developers as 'one of the biggest surprises of the year', Mr Gradel said property firms had muddled through with presales, delayed payments to contractors, and borrowing from banks and other sources.

Local authorities have also been stretching payment schedules for land, and choosing not to implement a government edict that developers lose land if they fail to build within two years.

However, with bank loans to developers down 30 per cent in the first half of this year to 399 billion yuan (S$83 billion), according to the central bank, thousands of firms are vulnerable, especially if they took part in a land buying frenzy last year.

'The guys who blew all their cash in the second half of last year are the guys who are having the most trouble,' Mr Gradel said. 'I think there's a good chance we'll see some more distress over the rest of the year.' So far, few bankruptcies have been reported, even as Beijing and Shanghai home sales fell by half in July from a year earlier.

Nanjing property tycoon Liu Fulin abandoned his home building business in February in favour of pig farming when hog prices soared, local television reported.

Another firm in the eastern city, Nanjing Panlong Jinling Property Development Co, went bankrupt in July, according to property website focus.cn.

The downturn was best illustrated by Changhui, one of the country's biggest property agencies, which closed half its 1,800 outlets late last year as sales dried up.

Property price falls must soon follow, analysts say, but developers appear to be holding out, with homes an average 7 per cent more expensive in July than a year earlier.

Government austerity measures are at the root of the housing slowdown.

But the policies were conceived to narrow the gap between rich and poor, not to suppress the property market, economists say, as the government is wary of damaging an industry that accounts for 8 per cent of gross domestic product (GDP).

Beijing is widely expected to relax its stance in early 2009.

'In China, it really depends on the macro-economy and the kind of government policy that is going to be put in place,' said Wilkie Lai, director and chief risk officer at Tribridge Investment Partners, a fixed-income focused hedge fund manager.

'Tightening is not the keyword anymore'.

The prospect that the market will bounce back strongly is giving hope to foreign investors.

US banks Citigroup and JP Morgan have said they are keen to spend their own money and their managed funds in China, expecting developers to offer plum deals.

Morgan Stanley , which bought distressed property assets from Chinese banks in the early 2000s, is targeting China for nearly a fifth of a US$10 billion global real estate fund it is raising, Reuters reported last week.

With shares in Chinese developers down about 70 per cent since a peak last November, as many as 30 Chinese developers have shelved IPOs planned for this year and are looking for foreign funds for capital to finish their projects.

The listing candidates often took on pre-IPO funding from private equity and hedge funds, and will have to repay investors soon if they do not push through stock market listings.

'These developers are refinancing, or selling land and offering joint venture projects to raise money,' said Anthony Ryan, head of Asia property investment banking at JP Morgan.

'An increase in restructuring activities will appear between now and the first quarter of next year.' But even when developers are forced out of business, foreign funds are found jostling at the back of the queue of buyers.

'If there are good opportunities they're taken up by other developers in off-market deals, very quietly,' said Hendrik Broeker, national director for Asia capital markets at consultants Jones Lang LaSalle in Hong Kong. -- Reuters

You've Got A Home... But Does Your Car?

Source : The Straits Times, Sep 8, 2008

Carparks at newer condos smaller; some even have fewer lots than units

HOME owners looking to buy a condominium within the next few years may soon find themselves in a squeeze when it comes to parking their cars at home.

A Straits Times survey of 26 condominiums launched or built after 2005 showed carparks are getting smaller, with some even falling below a government standard of at least one lot per unit.

About 50 per cent of the condominiums surveyed will have just one lot for each unit - plus not more than 5 per cent of extra lots - when completed.

The situation is more pronounced in the city. At least three new developments - The Sail @ Marina Bay, Marina Bay Residences and Icon in Tanjong Pagar - have between 20 per cent and 40 per cent fewer lots than units.

In comparison, a survey of about 10 condos built between 1980 and 2000 showed they were more generous, with over 50 per cent of them giving at least 15 per cent more leeway for lots.

For instance, Kembangan's Windy Heights, which was completed around 1978, has 274 lots to its 202 units - about 36 per cent more lots than units.

In comparison, The Sail @ Marina Bay will have 700 lots for its 1,111 units - but only because it has 'direct access to MRT stations, Raffles Place and is within walking distance to many workplaces and amenities', said a spokesman for the developer CDL.

The upcoming Dakota Residences in Mountbatten, when completed in 2010, will have one lot for each of the 348 units while The Reflections at Keppel Bay, when ready in 2013, will have about 1,200 lots for its 1,129 apartments - just 6 per cent more lots than units.

While many of these condos have not yet been completed, and the problem has not quite set in, there have been a few rumblings.

For instance, a handful of retailers at the mostly sold Icon - a retail-cum-residential development - said a few customers have complained how hard it can be to find a lot during the peak hours of lunchtime and 5pm to 8pm.

Investor Hengky Oeni, 54, who has bought a unit at The Sail @ Marina Bay, believes visitors may face problems finding a spot at certain times if forced to park outside at nearby office buildings. 'On weekdays when employees are around, parking spaces in these buildings will be difficult to find and expensive.'

Real-estate firm Knight Frank's director of research and consultancy Nicholas Mak pointed out that home owners-to-be would not feel the effects now.

'But once they move in, for instance when they throw a house-warming party, they will realise there may not be enough parking lots,' he said.

During festive seasons such as Chinese New Year, visitors who take up spaces meant for residents may cause spats in the estate too, he said.

Management consultant Ong Tee Jin, 46, complained he often had to park in HDB estates and walk over when visiting friends in some of the new developments, 'because their carparks are so crowded'.

'Some of my friends regretted buying these condos after they found out about the parking problems,' he said.

He also said condo owners who can afford these homes are likely to have more than one car.

Reasons for the downward trend vary: Some say it is the sheer cost of land and construction, and the smaller plots of land for sale these days.

Also, basement carparks, while ideal solutions for narrow land plots, cost three times as much as above-ground carparks to construct, said Mr Mak.

Assistant Professor Erwin Viray from the National University of Singapore's architecture faculty told The Straits Times that the authorities or developers may want to 'encourage a green urban lifestyle, where people...live healthy lives by walking and using public transport'.

He described how the well-off in cities such as Manhattan and Tokyo often ditch their cars to walk, and have 'created a sort of healthy trend'. 'It could be a sign of things to come in Singapore,' he said.

A rule change in 2005 meant that developers no longer have to provide as many parking spots, if the condo falls in the Central Business District or is near an MRT station. But it is largely still up to developers to decide what works for them.

Mr Mak said: 'People usually take parking for granted. When choosing a condo to buy...parking is one essential that often gets neglected.'

The exception is usually super deluxe condos, which sell for about $3,000 or more per sq ft. For example, the upcoming Boulevard Vue will provide up to four lots for each penthouse unit.


Some malls make the most of their carparks

SEVERAL shopping malls have been converting parts of their carparks to other uses over the past few years as well.

For instance, about one-quarter of the lots in Hougang Mall and the White Sands Mall in Pasir Ris were converted to retail use in 2006 and last year respectively.

This retail space on basement one of Hougang Mall was carved out of about one-quarter of the mall's carpark lots. -- ST PHOTO: JOYCE FANG

The spaces became shops and facilities, such as travellators, nursing rooms and children's play areas, after the authorities relaxed lot rules for commercial buildings near MRT stations, said Ms Stephanie Ho, deputy general manager of AsiaMalls Management, the buildings' management.

Under the Land Transport Authority's old parking provision standards, malls must have one car space per 200 to 400 sq m of gross floor area, depending on which zone it is in.

In 2005, the rule was relaxed so malls in the Central Business District or near MRT stations can go below this requirement by up to 20 per cent.

Ms Ho said this move had increased shopper traffic, and made 'more efficient use of the carpark', with the number of cars using a lot per day increasing by up to 70 per cent in some cases.

In 2000, Parkway Parade in Marine Parade also converted about 100 lots to 'leasable space', its spokesman said.

At Raffles City, a large chunk of what used to be the Basement 1 carpark was converted into shops such as pharmacies, eateries and lifestyle shops.

However, it replaced the lots by carving them out of unutilised space in Basement 2 and 3, its spokesman said.

A spokesman for carpark management company Elite Parking said: 'The income from carpark space versus shops or offices is too great a difference.

'Most building owners will take up the chance to gear up income.'

However, if a mall cannot pull in the crowd, the number of parking spaces available does not matter, said carpark management company Metro Parking's managing director Tyrone Lopez.

He said he believed the reduction of parking lots in buildings was not happening on a large scale as yet.

'Reducing supply of parking lots fits in with the overall government transportation policy,' he said. Reducing the supply of lots will 'in the long run reduce the volume of traffic in a given area'.

Mr Nicholas Mak from Knight Frank said most building owners would weigh the cost of business disruption from the conversion against the possible additional revenue to see if it makes business sense.

He added that this trend would unlikely affect office buildings, because carparks in offices with their 'low ceilings, no view, poor air' make for 'very undesirable space'.


Enough HDB parking? 465,000 cars, 697,500 lots

THERE are no hard and fast rules that govern parking lot numbers in HDB estates, unlike private estates.

The Housing and Development Board, in response to Straits Times queries, said it would consider two factors: the type of flat and the number of flats built in the precinct.

Public housing is not covered under the Land Transport Authority's parking provision standards, which say residential units should generally have one lot each.

Delay For New UWC Campus

Source : The Straits Times, Sep 8, 2008

Only infant school will open by August 2010, cutting number of pupils who can enrol

PARENTS whose children are on the waiting list of United World College (UWC) Southeast Asia's new Tampines campus may be in for a disappointment.

Only part of the campus slated to open in 2010 will be ready then, which will cut the number of students who were supposed to enrol.

UWC principal Julian Whiteley said that contractors keen on the project have told the school that they would not be able to complete it on time as they have other projects on their hands.

Read Jane Ng's full story in Tuesday's edition of The Straits Times.

EPS For Holland V Carpark

Source : The Straits Times, Sep 8, 2008

COME end September, parking woes at Holland Village might ease when a series of measures implemented by the Housing Development Board (HDB) takes effect.

Holland Village is one of the more popular hangouts in Singapore and parking here has always been a challenge. -- ST PHOTO: MUGILAN RAJASEGERAN

An Electronic Parking System (EPS) will kick off from Sep 22 at the Holland Avenue carpark - just behind the Cold Storage supermarket.

Free parking on Sundays and public holidays will be discontinued.

The measures will help to better regulate parking demand, HDB said in a statement.

The Lorong Liput entrance to the carpark will also be converted into a one-way street to facilitate access to the carpark.

Motorists can exit the carpark via Lorong Mambong - before 6.30pm - or Holland Avenue.

Holland Village is one of the more popular hangouts in Singapore and parking here has always been a challenge.

This was made more so after the Bali bombings in 2002, when parking along some stretches of restaurants and pubs were banned.

Over a hundred more lots were removed in Oct 2004 when two carparks nearest to the shophouses were closed for the construction of the MRT Circle Line.

In 2005, a multi-storey carpark containing 89 lots was built in Holland Village to help ease the carpark crunch.

What About Noise, Fumes?

Source : The Straits Times, Sep 8, 2008

Some residents are not keen on having pubs, eateries nearby.

A PROPOSAL to tweak the rules to make it easier for restaurants, pubs and shops to offer live entertainment and do on-site cooking is making residents of private housing estates nervous.

The Urban Redevelopment Authority announced on Aug 29 that it was considering allowing pubs, restaurants and shops to offer live entertainment and do on-site cooking, especially those seeking to set up shop in private housing estates. -- ST PHOTO: ALPHONSUS CHERN

To them, relaxed planning guidelines will bring noise, parking woes and oily kitchen fumes to their quiet neck of the woods.

The Urban Redevelopment Authority (URA) announced on Aug 29 that it was considering cutting the red tape for businesses, especially those seeking to set up shop in private housing estates. It is collecting views from the public on the move, aimed at injecting vibrancy into these areas.

But it appears that some residents are not keen on having buzz.

The Straits Times last week visited six housing estates with entertainment and dining strips to ask residents what they thought of entertainment and dining options on their doorstep.

In Thomson Ridge off Upper Thomson Road, residents are unhappy about the noise that patrons of the nearby bars and restaurants make.

Read the full story in Tuesday's edition of The Straits Times.