房产咨询公司：本地甲级办公楼租金 明年底或比香港低两成

Source : 《联合早报》February 20, 2009

未来两年完工的新办公楼供应来得不逢时，预计将打压本地甲级办公楼租金在今年退低30％至40％，而明年则将进一步下滑20％至25％，使本地楼租到了2010年底将比香港平均便宜20％左右。

房地产咨询顾问公司第一太平戴维斯（Savills）亚洲区商业地产主管马理烈（Marriott）昨天召开记者会，发表了一份针对亚洲三个金融中心的办公楼租金走势研究报告，并作出上述预测。在新加坡、香港和上海之间，第一太平戴维斯对本地办公楼市场最为悲观。




















他说：“对于在新加坡有业务的企业，以及有兴趣买入新加坡资产的投资者和基金，这是大好消息，呈现进场的机会，但对发展商和先前进场的投资者，除非有持守能力，目前的情况确实不利。一些养老基金、房地产基金等，有计划重新调整投资组合，增加亚洲房地产的投资，尤其对新加坡、澳洲、韩国和中国等地的甲级办公楼感兴趣。”

马理烈指出，去年第二季，本地办公楼租金飙至颠峰时，位于中央商业区的办公楼租金平均为每平方英尺15.10元，一度比香港的66.90港币（13.17新元）来得高，但在去年底本地楼租已回落至13.70元，跌幅为9％。这是由于香港部分的新优质办公楼供应在过去两年完工，及时赶上了繁荣经济的尾段。

办公楼供应将增加

相对而言，过去四年，我国中央商业区几乎没有新办公楼供应，导致租金在2004年至2008年期间狂升300至400％，而2009年至2011年，我国预计将会有550万平方米的新办公楼完工，主要租户又是在这一轮金融海啸中被淹没的金融和保险业者。马理烈表示，这些租户预料在办公楼建成时延后或不签下先前订下的额外拓展空间，势必将打压租金。在供过应求加速租金放缓的情况下，第一太平戴维斯预测，本地甲级办公楼月租将在今年底平均下跌至每平方英尺8至9元，而在明年底将继续跌到6至7元。

香港方面，甲级办公楼月租今年底平均将退低至42港币（8.26元），明年底则将是38港币（7.47元）。

至于上海，由于当地市场仍在蓬勃发展和增长中，尽管今年至2011年将迎来2500万平方米的新办公楼，预料市场很快能将新供应吸收。

有鉴于此，马理烈认为，我国办公楼市场过去飞得高而猛，在危机中难免会摔得更深更严重，本地甲级办公楼市场的复苏预料将比香港和上海来得慢，呈U型，虽然在2010年将稳定下来，但预计要等到2012年或2013年才能见起色。

他说：“新加坡和香港的办公楼市场是在去年9月中旬才受环球信贷吃紧的情况冲击。在这之前，企业担心租金会继续上涨而纷纷提早续约，但9月以后，企业预计租金将继续下滑，续约事宜能拖多久就拖。”

市区外办公楼租金 下跌情况较不严重

至于我国市区以外的办公楼和商业园区，马理烈表示，租金将紧随甲级办公楼的走势，但放缓的情况不会那么严重。

“吸取2003、2004年，租金飙涨的教训，企业不会因为租金下跌而一窝风迁回到中央商业区，这有助于缓冲市区以外办公楼租金下跌的情况。”

Avoiding Property Tussles

Source : TODAY, Thursday, February 19, 2009

Reduce risk of bargains turning into legal liabilities:

IN THE current recession, people with ready cash are looking to pick up good bargains. However, tread with care.








Reported cases that I took on over the years showed that property investors unwittingly fell into costly legal tussles because they failed to take the necessary safeguards before putting down their money.

What seem like simple and standard procedures in a property transaction can lead to expensive, drawn out legal battles. Here are four tips for minimising your risks.


Tip 1: Do on-site approval checks

The year was 1991, just after the Gulf War. Property values had dived sharply here.

My client, who owned a Lornie Road home, was faced with a lawsuit from a buyer wanting to back out of the deal.

The buyer claimed that the seller had not disclosed substantial unauthorised additions and alterations to the property, which affected its title.

At stake was the recovery of a $250,000 deposit from the buyer.

Fortunately for my client, the Appellate Court was persuaded that a seller’s obligation to disclose in a conveyance did not extend to unauthorised structures where no order or notice had been issued by the Building Control Division, as that relate only to an issue of quality and not title.

In a sale and purchase of property containing unauthorised alterations and additions, caveat emptor *applies.

This means it is for the buyer to protect himself by checking that the property is free of illegal additions and alterations before buying the option, or to include in the option to purchase, a clause enabling the buyer to exit the purchase before completion if there are illegal or unauthorised alterations and additions.


Tip 2: As a buyer, ensure you have exit or compensation clause

Last year, I represented a couple that had contracted to sell their Changi terrace house, which had an unauthorised second storey.

The buyers wanted the couple to restore the unauthorised structure, claiming they would suffer huge financial damages if they were to buy a property which required regularisation of unauthorised works.

They further argued that if the works could not be regularised, and had to be removed, this would reduce the built-in area.

It seemed like a case that was plainly in favour of the buyers.

As it turned out, the couple won the case on the argument that the contract was inadequate and did not provide for an exit or compensation clause for the buyers, where there were unauthorised works on the property.


Tip 3: Think carefully before SIGNING ON THE DOTTED LINE

Beware of buying on a whim and then changing your mind.

A caveat cannot be filed willy-nilly and unless a party has an interest in the property, he can be liable for damages and costs for wrongful filing.


Tip 4: IF YOU HAVE TO SUE, DO IT BEFORE THE time warranty LAPSES

In a case where a developer was suing an architectural firm for professional negligence, the claim failed because it was not filed within six years from the act of negligence.

An injured party must pursue a claim with diligence. Otherwise, it may fail because of the time bar.

The writer is director of Bernard & Rada Law Corporation. She has 22 years’ experience in property and commercial litigation.

Cairnhill Heights Sale: Would-Be Buyer Pulls Out

Source : The Straits Times, Feb 20, 2009

Developer cites poor market conditions for 11th-hour decision

A DEVELOPER has backed out of a planned $44 million purchase of an enbloc sale site in the prime Cairnhill area at the 11th hour - sparking anger from some of the home owners.

Owners of Cairnhill Heights will now get their share of the forfeited deposit, after deducting for expenses. -- ST FILE PHOTO

The firm, Jewel 1, blamed 'difficult, uncertain and deteriorating market conditions' for its decision to pull out of buying Cairnhill Heights.

The move came just 20 days before the deal to buy the 19-unit condo was due to have been completed on Feb 24, the condo's sales committee said yesterday. The developer, wholly owned by one shareholder, will have to forfeit its 5 per cent deposit of $2.2 million.

'This really feels like a stab in the back. Where is the good faith?' said one owner, also a sales committee member, who declined to be named.

The decision came despite a protracted legal battle in which Jewel fought for the right to buy the site.

The developer outlined its decision in a letter to the lawyer involved in the proposed sale.

Three sale committee members told The Straits Times they felt let down by the developer, as they regarded the firm as a partner in a deal that they had robustly defended against all challenges, believing it was a reputable property developer.

Jewel 1, which was registered in 2006, has only one shareholder and director - Mr Cheong Sim Lam. He was not available for comment.

Mr Cheong's family owns Hong Fok Realty, and he is the uncle of SC Global chief Simon Cheong.

He had agreed to buy Cairnhill Heights in May 2007, at the height of the property boom and amid a frenzy of collective sale deals.

The Strata Titles Board granted the sale in March last year. An objector at Cairnhill Heights then took the case to the High Court but lost the appeal in November.

A sale committee member who wished to remain anonymous said: 'Having been on the same side for almost two years now, sometimes fighting shoulder-to-shoulder to secure the sale, the last thing you would have expected is for your contracting party to turn around and leave you in the lurch.'

The sale committee said it has reserved all options in terms of possible legal recourse.

Owners of the 19 units will get their share of the forfeited deposit, after deducting for expenses, which are still being calculated.

If the sale had gone through, each owner would have received $1.97 million to $2.5 million, apart from the sole penthouse owner, who would have pocketed $5.5 million.

About half of the owners have rented out their units. One of the owners lives there but also own properties elsewhere in Singapore.

At least one owner is believed to have already bought a replacement property - assuming the full sale price would soon be paid - and is now stuck with two homes.

One owner, businessman Georg Mechtler, said: 'We felt aggrieved, having committed for more than two years to sell this property while the market kept climbing. Now, we have missed all our selling opportunities of this cycle. And the buyer only forfeits a miserable 5 per cent.'

Still, not all owners are upset. One said she is happy that an architectural icon has been preserved. Cairnhill Heights was designed by Singapore- based architect Geoff Malone.

'We should keep evidence of our architectural heritage,' she said.

Sentosa, Marina IRs Get Pricier

Source : The Straits Times, Feb 20, 2009

Both are revising costs upwards for 2nd time

SINGAPORE'S two integrated resorts (IRs) are getting increasingly expensive, with both developers revising their cost estimates upwards for a second time.

Construction in progress at Marina Bay Sands, certain section of which are expected to open by year's end. It was announced last week that the IR project is now estimated to cost US$5.4 billion, up from previous estimates of US$3.6 billion and US$4.5 billion. -- ST PHOTO: ALPHONSUS CHERN

An additional $590 million will need to be pumped into the kitty for the Sentosa project, while the price tag for the Marina Bay Sands development has gone up by US$900 million.

Resorts World at Sentosa yesterday revised the cost for the 49ha resort in its earnings call, bringing it up to $6.59 billion. This is the second time the budget has been revised: It was bumped up from $5.2 billion to $6 billion in November 2007.

Marina Bay Sands will cost more as well. At last week's earnings call, Las Vegas Sands Corp announced its Singapore IR is estimated to cost US$5.4 billion, an upward revision from previous estimates of US$3.6 billion and US$4.5 billion.

No explanations were given by Sands for the increase in cost, but it raised US$2.1 billion last November in a rights issue to cover its projects, including the one in Singapore.

Resorts World at Sentosa chief executive officer Tan Hee Teck said yesterday that additional funding would come from operating cash flows when the casino resort opens next year.

The extra money was needed for improvements to the design of the casino project, he said. Areas which were tweaked included pedestrian flow, the monorail stop at the resort and adjustments to the 24 attractions.

He said: 'We want to make sure each and every attraction is up to standard. We found we needed more money to bring the attractions up to a superlative level.' Moreover, construction costs had risen sharply in the last few years, he added. Steel, for example, rose from $800 per tonne in 2007 to $1,800 last year.

CIMB-GK Song Seng Wun said it was simply bad timing that the IR projects were awarded at the peak of the construction boom, which led to costs spiralling upwards.

Construction projects awarded earlier do not benefit from prices softening since the global financial meltdown, as they had locked in materials at a higher rate, Resorts World's Mr Tan said.

Despite the revision in budget and the ongoing global recession, Mr Justin Tan, managing director of parent company Genting International, said he is 'still as confident' in the success of the project.

As travellers trim their budget to take in short-haul travel, visitors from China and India who may have splurged on trips to Las Vegas or Europe would head to Singapore instead, he added.

Resorts World at Sentosa is slated to open on schedule by March next year.

One section of the resort is due for completion next week when its first 11-storey hotel, the Maxims Tower, is topped off. It will be the first development to be completed at either of the IRs.

Marina Bay Sands is expected to open in the fourth quarter of this year. However, it is uncertain which parts of the resort will be ready as Las Vegas Corp said only 'certain features' are targeted to be ready by December.

The resort has applied to the Government for a staggered opening, but has yet to receive official approval.

Sibor Dives, But Home Loan Rates Go Up

Source : The Straits Times, Feb 19, 2009

Most banks have raised their spreads to make up for increased risk and higher capital costs

FALLING 3-MONTH SIBOR

A KEY interest rate that sets the cost of interbank lending has plunged in recent weeks, but those taking out new mortgages will be no better off.

The three-month Singapore Interbank Offered Rate, or Sibor, dived to 0.68 per cent this month, bringing it near the all-time low of 0.63 per cent reached in June 2003.

The rate at which banks lend to one another has been dropping since September last year, and is expected to stay low.

But new home buyers expecting interest rates for Sibor-linked housing loans to fall in tandem will be disappointed.

To compensate for increased risk and the higher cost of capital, most banks have upped the spreads that they charge above Sibor, making Sibor-pegged home loans more expensive.

At DBS Bank, a home buyer taking a loan of 80 per cent of his property's value in July last year would have paid a rate of Sibor plus 1.25 percentage points. Now, a new buyer has to pay Sibor plus 1.75 percentage points.

Even though Sibor fell from 1 per cent to 0.68 per cent between last July and now, the rate charged has actually risen from 2.25 per cent to 2.43 per cent.

The margin on HSBC's standard Sibor-pegged package now stands at 1.25 points, up from 0.7 point last July. The rate has effectively risen to 1.93 per cent, from 1.7 per cent.

However, at least one bank - Citibank - has not raised its spreads on Sibor-linked loans. A customer applying for a loan now would get the same rate as last July's.

The bank's head of secured finance solutions, Ms Vibha Coburn, said it has remained consistent in the pricing of spreads on Sibor-linked packages.

Its range of spreads is still between 0.8 percentage point and 1.25 percentage points, 'depending on the extent of the customer's relationship with the bank and the type of home loan package', she added.

Rising spreads will affect a growing number of borrowers as Sibor-linked loans have become increasingly popular after banks introduced them about two years ago.

One reason for their popularity is their transparency when compared to loans pegged to banks' own board rates.

However, although new loan applicants will feel the pinch of the higher rates, home buyers who locked into the more competitive Sibor-pegged mortgages last year are seeing their monthly instalments fall steeply in line with the nosediving Sibor.

Loans pegged to the Singapore dollar Swap Offer Rate (SOR) - another popular benchmark interest rate - have also been hit by the increasing spreads.

OCBC Bank is now charging SOR plus 1.75 points for its home loan, compared to plus 1.25 points just two months ago, according to a news report last December. This means its rate has increased from 2.25 per cent to 2.43 per cent.

Banks said they have raised their spreads because the credit crunch has made lending more expensive and riskier.

'Unlike the period of robust property markets in 2006 and early 2007, banks now have to contend with higher capital costs and increased credit risks, given the current financial turmoil and economic crisis,' said Mr Gregory Chan, OCBC's head of consumer secured lending.

Mr Dennis Ng from mortgage broker www.HousingLoanSG.com agreed: 'Property values have fallen, so default risk has definitely gone up. It's natural for banks to increase the interest margin to cater for this higher risk of lending.'

The higher margins are also being introduced because banks are seeing fewer home loan applications as the property market softens.

'If banks reduce rates, they face not only a decline in loans growth but also a decline in margins, which could affect them quite badly,' said Mr Ng. 'So they may increase their margins to make sure revenue doesn't drop that much.'

No update was available from two other banks here that offer Sibor- or SOR-linked home loans: Standard Chartered Bank could not respond by press-time while United Overseas Bank declined to comment.