Chip Eng Seng Makes Top Bid For Pasir Ris HDB Site

Source : The Business Times, December 19, 2007

99-yr leasehold plot can be developed into a condo with about 380 units

CHIP Eng Seng has emerged as the top bidder for a condominium site at Pasir Ris, HDB said yesterday.





















The 99-year leasehold site on Bernam Street/Tanjong Pagar Road and next to Amara Hotel, has a land area of some 49,125 sq ft and a maximum gross floor area of 288,860 sq ft.

The developer beat two other bidders with its offer of some $104.0 million - or $228 per square foot per plot ratio (psf ppr) - for the 152,054 sq ft site on Elias Road.

The bid was slightly lower than the $260-$300 psf ppr analysts expected the site to fetch when it was launched in late October.

Ku Swee Yong, director of marketing and business development at Savills Singapore, said that the price offered by Chip Eng Seng was 'reasonable'.

'The launch price should start around $650 psf,' said Mr Ku. 'We anticipate strong demand for the project given the growing demand for mass-market homes.'

Analysts expect prices of mass-market homes to climb about 15 per cent next year on the back of strong demand - outstripping the price performance in the high-end residential segment, where home prices are expected to increase by less than 10 per cent.

Chip Eng Seng's bid was just 4 per cent higher than the second highest bid of $100.4 million - or $220 psf ppr - put in by GuocoLand. The developer's bid was also 12 per cent higher than the lowest bid of $93.0 million - or $204 psf ppr - from the Sim Lian Group.

Experts said that the 99-year leasehold site can be developed into a condominium with about 380 units averaging 1,200 sq ft.

Separately, the Urban Redevelopment Authority (URA) said that a hotel site on the government's reserve list is now open for application.

The 99-year leasehold site on Bernam Street/Tanjong Pagar Road and next to Amara Hotel, has a land area of some 49,125 sq ft and a maximum gross floor area of 288,860 sq ft. The maximum building height is 35 storeys.

The site is one of the four new hotel sites which are scheduled to be released for application on the reserve list in the government's land sales programme for the second half of 2007.

Under the reserve list system, a site is only offered for public tender if the government receives an application from a developer who commits to bid for the site at a price which is deemed acceptable.

The site in Tanjong Pagar is an attractive location for a new hotel as established hotels are found there, said URA.

Good Class Bungalow Prices Surge 40%

Source : The Business Times, December 19, 2007

Huge wealth creation, high networth PRs cited for hike; smaller gains likely next year

The demand for gracious bungalow living is chugging along quite nicely.

In fact, average prices of Good Class Bungalows (GCBs) are expected to appreciate by about 10 to 15 per cent next year. This appears even more impressive if you consider that this year, they have already climbed by nearly 40 per cent to $710 per square foot of land area.

















The expected appreciation could propel the total value of GCB transactions to increase slightly in 2008, although the number of transactions may be slightly lower, Savills Singapore director (Prestige Homes) Steven Ming predicts.

The first 11 months of this year saw a total of 96 GCB transactions adding up to $1.28 billion. The value is an all-time record and has surpassed slightly the $1.24 billion achieved for the whole of last year. However, the number of GCB transactions from January to November this year is still shy of the 118 for the whole of 2006, according to an analysis by Savills Singapore based on caveats data from Urban Redevelopment Authority's Realis system.

'I don't expect the number of GCB transactions to increase next year, because prices have gone up quite rapidly in the past 12 to 15 months. The GCB market is generally restricted to Singaporeans and Permanents Residents with special approval to buy landed homes.

'Some of these potential buyers may have bought GCBs at much lower prices in the past and may take time to adjust to higher prevailing prices now. But having said that, there's been a lot of wealth creation over the past few years as seen in the reasonable number of record prices being set,' Mr Ming said.





















Credo Real Estate managing director Karamjit Singh, too, predicts moderate price upside for GCBs for next year, despite forecasting overall flat property prices. 'GCB values will benefit from the enormous wealth created from the economic boom, and the influx of high networth individuals who become permanent residents (PRs), while supply remains scarce,' he adds.

While demand-supply fundamentals remain sound next year for Singapore's real estate sector as a whole, including GCBs, the crucial factor is how the currently-shaky sentiment pans out, Mr Singh said.

Record prices were set for two adjacent bungalows at Nassim Road in the past few months - 32G Nassim Road, which was sold for just under $20 million or $1,504 psf of land in September, followed by 32H Nassim Road in October at an even higher $1,899 psf.

Raffles Education founder and chairman Chew Hua Seng is believed to have picked up 32H Nassim Road, for which he paid $25.5 million. Mr Chew is said to own a few other bungalows nearby.

The prices achieved for 32G and 32H Nassim Road surpassed the previous record for GCBs, of $1,308 psf set only in August this year, when Hong Kong group Wharf (Holdings) sold Glencaird, a conservation bungalow at 15 White House Park, for $28.8 million.

However, market watchers highlight that for the 32G and 32H Nassim Road transactions, each property's land area is just slightly over 1,200 sq metres - lower than the minimum 1,400 sq metres (or 15,070 sq ft) plot size stipulated under Urban Redevelopment Authority guidelines for GCBs. Savills' Mr Ming argues nonetheless that these two properties will be bound by GCB regulations if they were to be redeveloped. This means that they cannot be more than two storeys high, their built-up area is limited to 35 per cent of the total land area, and the plots cannot be subdivided further.

The year has also seen quite a few GCBs being flipped. 21 Cluny Hill was bought for $15 million in January and changed hands again for $20.2 million in June. 46 Mount Echo Park was sold for $10 million in January and again for $12.8 million in March.

'Some savvy bungalow investors with deep pockets, saw value in investing in freehold GCBs earlier this year, when their prices were lagging quite a bit behind those of 99-year bungalows on Sentosa Cove. The gap has since narrowed and these investors have been able to offload their GCB investment for a handsome profit,' Mr Ming said.

Over at Sentosa Cove, seafronting bungalow sites have fetched as much as $1,696 psf this year. These are vacant sites sold by the precinct's master developer, Sentosa Cove Pte Ltd, to buyers to build their dream homes on them.

The supply of completed bungalows for sale in the upscale waterfront housing locale is still limited, but Savills' director of business development and marketing Ku Swee Yong says that owners are asking for $1,800 psf to $2,400 psf depending on the direction they face. 'The main reason for higher bungalow values on Sentosa Cove than in mainland Singapore is because of expedited approval for foreign buyers of landed property on Sentosa Cove. This has been a great draw for those who want to be PRs in Singapore and park a fraction of their wealth here,' Mr Ku said.

Kuwait Finance House Buys 97 Units In Goodwood Residence

Source : Channel NewsAsia, 18 December 2007

Kuwait Finance House is pumping another S$818 million into Singapore real estate.

Artist's impression of Goodwood Residence

This time, it is buying 97 units in Goodwood Residence – a high-end residential development at Orchard Road.

This is the single largest purchase for a residential development still under construction.

Singapore-listed Guocoland is the developer behind Goodwood Residence.

Artist's impression of Goodwood Residence clubhouse

The 97 apartments are of the four-bedroom type, ranging from 2,500 to 3,900 square feet each.

Altogether, Goodwood Residence will have 210 apartments.

The project was conferred the Green Mark Award (Platinum) award earlier this year because of its green features.

Artist's impression of Goodwood Residence covered walkway

Kuwait Finance House is a market leader in the Islamic banking industry in Kuwait.

In August, it paid S$286 million for 56 units in Keppel Land's waterfront development, Reflections at Keppel Bay. - CNA/so

Kuwait Outfit Snaps Up 97 Apartments In $818m Deal

Source : The Business Times, December 19, 2007

Purchase of units in GuocoLand's condo under development in Bukit Timah is biggest of its kind

Foreign institutional investors continue to bulk buy apartments in new residential developments in Singapore.

Money spinner: GuocoLand's pre-tax profit from the sale of the 97 units alone works out to around $500 million. The company bought the former Casa Rosita site in April 2006 for $280 million or $706 psf per plot ratio

The latest deal - and biggest such transaction to date - is Kuwait Finance House's $818.4 million purchase of 97 four-bedroom apartments in GuocoLand's freehold condo, Goodwood Residence. The property is being developed on the former Casa Rosita site.

The average unit price is understood to be slightly over $3,000 per square foot. This is a new high for the prime Bukit Timah area; it is about 25-30 per cent above the $2,500 psf average price that Sui Generis is fetching at nearby Balmoral Crescent.

At over $800 million, the deal is the 'single largest purchase of units in a Singapore residential project under construction', says GuocoLand group president and CEO Quek Chee Hoon.

Industry observers' back-of-the-envelope calculations show that GuocoLand's pre-tax profit from the sale of this first batch of 97 units alone works out to around $500 million.

The four-bedders bought by a fund managed by Kuwait Finance House (Malaysia) Berhad range from 2,500 sq ft to 3,900 sq ft, GuocoLand said.

The Singapore property arm of Malaysian tycoon Quek Leng Chan is likely to release the remaining 113 units in the 210-unit freehold condo for sale in the first quarter next year, depending on market conditions. The development includes apartments with two and three bedrooms, as well as penthouses.

The largest penthouse, a duplex unit of about 12,000 sq ft with a rooftop pool, is expected to go for nearly $40 million. The WOHA Architects-designed project also includes 15 cabana-styled apartments.

This is not KFH's first such investment in the Singapore property market. A few months ago, an Islamic real estate fund set up by KFH and the Malaysian government-owned Amanah Raya Berhad, picked up two blocks (with a total of 56 apartments) at Reflections at Keppel Bay for about $286 million.

Other recent foreign bulk purchases of apartments in new projects here include Macquarie Global Property Advisors's $136 million acquisition of 19 units at 8 Napier, at an average price of $3,550 psf.

A Spanish private-equity fund is believed to have bought 20 apartments at The Cascadia, further down Bukit Timah Road, at about $1,600 psf.

While Singapore developers and property consultants are cautious about prospects for high-end residential prices next year - most are expecting modest gains of up to 10 per cent, after a nearly 50 per cent spike this year - the outlook appears rosier to foreign investors, market watchers say.

'From the perspective of these foreign funds, they must place out monies they have raised. If they look at US, there are sub-prime and credit squeeze problems. Growth in Europe is slow. Frankly, they may not have a lot of options but to look to Asia,' the research head of a property fund management outfit said.

Also, Singapore appears an island of calm in a sea of turbulence, he said. 'It's relatively stable, will soon have the integrated resorts and F1 attractions, and the island has positioned itself as a wealth management hub - these are still important factors drawing foreign institutional money to Singapore property.'

Goodwood Residence, which will comprise two 12-storey blocks, is slated for completion in 2010.

The development has received the Building and Construction Authority's Green Mark Award (Platinum). Goodwood Residence will have more than 500 trees (including 58 preserved trees) planted in the estate. In addition, the development site shares a 150-metre-long boundary with the lush Goodwood Hill.

GuocoLand bought the former Casa Rosita site in April 2006 for $280 million or $706 psf per plot ratio.

Other upcoming Singapore condo projects by GuocoLand include Sophia Residence, with about 270 units, which the group plans to release around Q3 next year, and an upscale development on the Leedon Heights site that is slated for launch in 2009.

KFH is also co-sponsor - together with Singapore's Pacific Star Group - of the Baitak Asian Real Estate Fund, whose major investments include a stake in KL Pavilion, a mega development with luxury residential, mall, office and hotel components in the prime Bukit Bintang area of Kuala Lumpur.

Global Economy Facing Threat Of Stagflation

Source : The Straits Times, Dec 18, 2007

Growth may slow to 4-year low and inflation could hit 10-year high

WASHINGTON - THE world economy is facing the risk of stagflation - the double whammy of suffering both recession and faster inflation.

Global growth this quarter and next may be the slowest in four years, while inflation might be the fastest in a decade, say economists at JPMorgan Chase.

The worst United States housing slump in 16 years, coupled with a tightening of credit by banks, have brought the world's largest economy 'close to stall speed', according to former US Federal Reserve chairman Alan Greenspan.

At the same time, rapid growth in China and other emerging markets is driving energy and food prices higher worldwide.

'What lies ahead is a period of stagflation - slow or no growth combined with rising inflation - in the advanced economies,' says Morgan Stanley co-chief global economist Joachim Fels.

Harvard University economist Martin Feldstein is among those who say it would be just a mild case of what the world endured in the 1970s and early 1980s, when a tenfold increase in oil prices drove both unemployment and inflation above 10 per cent.

Mr Feldstein, who heads the national bureau that serves as the arbiter of when US recessions begin and end, said the combination of a stalled economy and rising inflation could be seen as a form of stagflation.

'It depends on how you want to define it,' he said. 'If you say an inflation rate of 3.5 per cent and a recession is stagflation, then we could have stagflation.'

Mr David Hensley, director of global economic coordination at JPMorgan, sees global growth of 2.4 per cent this quarter and next, and inflation at 3.5 per cent.

That is a far cry from the bad old days more than a generation ago, when world growth slowed to just 0.7 per cent in 1982 while inflation ran at an annual rate of 13.7 per cent, according to data compiled by the International Monetary Fund.

Even so, no less an authority than Mr Greenspan himself expressed concerns.

Speaking on ABC's This Week programme aired last Sunday, he said a period of 'remarkable disinflation' is ending.

'We are beginning to get not stagflation, but the early symptoms of it,' he said.

The situation poses a dilemma for the Fed and other central banks as they struggle to decide which problem they should tackle first. How they respond will go a long way in determining which danger proves to be bigger: a slumping global economy or rising prices worldwide.

For now, traders in futures markets are betting the Fed will remain focused on supporting growth, even after the latest government inflation reading last week showed consumer prices rose last month at the fastest pace in more than two years.

As of last Friday, investors put a 74 per cent probability on another quarter percentage-point cut in the Fed's benchmark overnight rate next month, down from 100 per cent the day before.

If the global economy faced only the risk of faster inflation, the policy prescription would be clear: higher interest rates.

Yet, with growth slowing in the US and Europe, central banks remain under pressure to cut rates

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