Property News!

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May 5, 2008
En bloc uproar at Bayshore Park, Mandarin Gardens
Sales committees rein in estate councils, irking owners who want to upkeep homes
By Jessica Cheam
THE market for en bloc sales may have gone dead quiet, but the issue is still raising a ruckus at two of Singapore's most iconic condominium developments in the East.
Sales committees pushing for the collective sales of Mandarin Gardens and Bayshore Park have been accused of trying to control the management councils running these estates and voting down proposals to upgrade estate facilities.

The committees, made up of residents who are pro-en bloc, have denied the charges.

Still, things came to a head last Sunday at both condos' respective annual general meetings (AGM), which lasted up to 10 hours each.

Sales committees are ad hoc committees formed by residents to explore the potential of an en bloc sale. They are different from the management council, which is appointed at the AGM by residents to run the estate and look into the upgrading of facilities.

Residents against en bloc sales at both condos claim that the sales committees had gone round collecting proxy votes from residents so as to control the outcome of the AGMs.

Mandarin Gardens' emotional AGM has left the 25-year-old estate with no management council at all. The existing council quit and refused to be re-elected because of some resolutions passed at the AGM. At the centre of the dispute was a controversial proposal by the sales committee, which was formed last year, to reduce the management council's current limit of $300,000 for expenses on urgent matters to $50,000. This was successful as the sales committee had enough proxy votes to form the majority. Council chairman Neoh Chin Chee said in a letter to residents last week that the resolutions passed made it 'untenable or difficult to carry on as a council member'. Proposals to upgrade the condo's rainshields and swimming pool tiles were also not approved.

The AGM was eventually adjourned when not enough candidates were nominated.

One resident Jeannette Aruldoss, 44, a lawyer, told The Straits Times that the $50,000 limit restricted the role of the council to run the estate. In emergencies, this fund may not be enough to address safety issues, she said.

But sales committee chairman Mr Tan Kok Khoon said some residents had felt the $300,000 limit was too high.

Over at the 21-year-old Bayshore Park estate, the sales committee proposed and pushed through a resolution to reduce the council members from 14 to nine.

Of the nine, four are also on the sales committee, so some residents are upset about the change.

Bayshore resident Mr S.K. Cheah, 40, a sales director, feels there could be a conflict of interest since sales committee members are likely to act in the interest of a sale, above that of the estate.

He noted that at the AGM, some resolutions for maintenance and upgrading were also voted down.

Another Bayshore Park resident, who declined to be named, commented that one common tactic used by many sales committees is to 'run the estate down' or keep maintenance to a minimum, so residents have little choice but to vote for a sale later.

But Bayshore's sales committee member Alan Chua told The Straits Times that they had no intention of doing that.

'We've lived here for many years and love this place, why would we do that?' he said.

On the en bloc sale potential, Savills Singapore director (marketing and business development) Ku Swee Yong noted that at least $2 billion each would be needed to buy each estate - a tall order even when the market is good. 'With the current market, the sale is impossible,' he said.

 

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May 5, 2008
En-bloc system needs relook, as Bayshore shows
IF THE Government still thinks the current laws under the Building Maintenance and Strata Management Act and the Land Titles (Strata) Act (Amendment) are sufficient to regulate the issues of collective property sales, this tale of two condos may provide food for thought, especially as the Government has invited feedback on these laws.
On April 27, Bayshore Park and Mandarin Gardens both held annual general meetings. These two estates, with more than 1,000 units each, sit on 1 million sq ft of land next to the sea.

Both have got a collective sale initiative off the ground, with sale committees elected. With the support of pro-sale residents, voting powers are then used to control the rest of the estate, even though the votes represent only a minority of residents. Let me illustrate:

In Bayshore Park, the pro-sale group outvoted other residents on crucial issues and in selection of council members. Averaging 60 per cent of votes cast at the AGM, this roughly 20 per cent of residents (as only 30 per cent of owners were represented at the AGM) voted down a proposed increase in maintenance charges in line with current inflation, voted for a lower increase in the sinking fund, voted down crucial replacement of copper pipes in the common corridors and voted down any exploration of corridor upgrading. In addition, they voted for a reduction in council seats to nine, making sure four sale committee members were voted into the council, and ensured that four of the five previous council members retained had exhibited pro-sale inclinations. They made sure two previous council members who did not favour sale were not re-elected. I was one of the two.

At Mandarin Gardens, in a similar vein, the pro-sale camp mustered enough proxy forms to control 65 per cent of the votes in the AGM. They defeated a motion to reduce water ponding of walkways and lift lobbies to improve safety, and passed a resolution to reduce management council (MC) expenditure limits from $300,000 to $50,000 making it almost impossible for the MC to function. Consequently, the incumbent council refused to stand for re-election. Even more devastating, the pro-sale camp fielded no candidates for council. Hence, no council was elected.

The law was not broken at either AGM. However, many of us affected are sure the law was not designed to produce such outcomes.


Augustine Cheah

 

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May 5, 2008
Small firms bought bulk of en bloc sale sites
Some may be forced to call off deals because of financing woes, says BNP report
By Joyce Teo
A REPORT by a major bank has flagged potential financing concerns for small property developers that swooped in on the collective sale boom in the second half of last year.
BNP Paribas said that given the current turmoil in the financial market, some of these small operators might face financing problems as they move to finalise deals struck in the property market heyday last year.

In fact, some may be forced to cancel the deals and walk away, it warned.

The report by the French bank said that most of the collective sales done in the second half of last year were by small private developers, contractor- cum-developers and non-core developers.

They included Soilbuild, Hiap Hoe, Lian Beng, KSH Holdings, Koh Brothers, Popular Holdings, Aspial Corporation and Eastern Holdings.

'In the near future, we are concerned that some smaller players that have secured big and expensive en bloc sites may walk away from the deals as securing financing is not easy at this time, especially for non-core developers,' said the recent report.

Already, a small private firm, Bravo Building Construction, said to be backed by a one-time big property player, has bailed out of three collective sale deals.

In all three deals, it has had to give up its deposit, which ranged from 1 per cent to 10 per cent of the sale price.

The biggest of the three deals was the $516 million purchase of Tulip Garden, for which Bravo had to forfeit its $25.8 million deposit.

A property consultant, who declined to be named, said the smaller buyers last year were mostly listed firms and thus unlikely to renege on their deals.

'Some small privately owned firms are looking for joint-venture partners for their development sites or to divest the sites,' said Credo Real Estate's executive director, Mr Tan Hong Boon. 'But they will sell only if they can get a reasonable market price.'

Mr Nicholas Mak, the director of research and consultancy at Knight Frank, said: 'The last time developers defaulted on deals was when there was a prolonged downturn.

'But we have yet to enter a price decline situation. The jury is still out on whether the property market will suffer a downturn.'

 

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Why the negative assumptions?

Hasty judgments should not be made just to prevent speculative property buying

Tuesday • May 6, 2008


Letter from Wong Siong Yan

I AM extremely taken aback by a recent media report highlighting the negative impact the deferred payment scheme (DPS) will have on the property market.

The headline "Deferred payment scheme: Up to 4,200 homes may be dumped" was used to capture readers' attention.

In the absence of concrete data and evidence, we should not jump to the conclusion that speculators who bought homes under the DPS will panic and dump their units below market prices before the temporary occupation permit (TOP).

On the contrary, it can be argued that this is unlikely to happen because:

• Out of the estimated 4,200 homes bought by speculators under DPS, many have already been resold.

Since most developers do not extend DPS to sub-purchasers, the majority of these buyers would already have backed their property purchases with bank loans.

• Under a typical DPS sale, buyers need to fork out 20 per cent of the purchase price at the outset. This in itself is a substantial amount of money.

Anyone who can afford this sum must have substantial financial muscle and credibility to begin with. It is therefore unfair to speculate that such individuals will not be able to obtain a bank loan or fork out additional cash upon TOP.

• Since completed properties are capable of generating rental income, it will be easier to obtain financing from banks upon TOP. Hence the possibility of panic selling due to the inability to secure a bank loan come TOP is remote.

• Not all short-term property investors are speculators. Many of them are "specu-vestors" ie. people who buy in the hope of flipping their property for a quick profit, failing which they still have the means to hold it for long term investment.

• As the property bull run lasted for more than a year before the sub-prime crisis dampened sentiment, a sizeable number of speculators would already have locked-in substantial profits. Thus, their holding power for any remaining properties will be greatly enhanced.

When viewed in this holistic context, the number of "distress sales" will be lower than the purported 4,200. Moreover, since these homes are scheduled to be completed over a span of three to five years, any negative impact will be spaced out and significantly watered down.

Particularly disturbing is the fact that although the various analysts interviewed were divided in their views, the title and tone of the report was clearly biased towards a negative outcome.

This pessimistic stance was premised upon the assumption that the property market would remain stagnant for an extended period of time. However, given that strong fundamentals continue to prevail, who is to say that an upswing is not round the corner?

In our attempt to guard against speculative property buying, let us not commit a greater sin by indulging in speculative forecasting and reporting.

 

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May 12, 2008
No change in CPF interest and HDB mortgage rates
THE Central Provident Fund (CPF) board will keep the interest rate for members' CPF savings in their Ordinary Account at 2.5 per cent for the third quarter of this year.
According to a joint statement by CPF and HDB on Monday, the computed CPF interest rate derived from the major local banks' interest rates for the three-month period - Feb 1 to Apr 30, is 0.74 per cent per annum.

But the board will pay the higher rate of 2.50 per cent from July 1 to Sept 30 as the CPF Act provides for a minimum rate of 2.5 per cent per annum.

An extra one per cent interest will be also paid on the first $60,000 of a member's combined balances, with up to $20,000 from the Ordinary Account (OA).

The extra interest from the OA will go into the member's Special or Retirement Account for retirement savings.

The Housing Development Board's concessionary interest rate for its mortgage loan - pegged at 0.1 percentage point above the CPF interest rate for the Ordinary Account - will remain unchanged at 2.6 per cent per annum for the third quarter.

As for the interest rate for CPF's Special, Medisave & Retirement Accounts (SMRA), the new rate for July to September will announced in June.

This is because the SMRA interest rate, currently at 4 per cent, is calculated based on the 12-month average yield of the 10-year Singapore Government Security plus one per cent.

 

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May 27, 2008
FAIRLY LOW OFFERS
Five bids for Choa Chu Kang tender
A UNIT of property giant Far East Organization has put in the top bid for a condominium site at Choa Chu Kang Drive, about five minutes' walk from Choa Chu Kang MRT Station.
Tian Hock Properties offered $116 million for the 204,514 sq ft plot, which works out to about $203 per sq ft per plot ratio (psf ppr).

The site drew a respectable five bids when its tender closed yesterday, possibly due to the perceived strength of the mass-market condo segment, experts said. Far East's offer topped those of Sim Lian Land, Hong Leong Holdings, GuocoLand and Hiap Hoe.

But property consultants said the bid amounts remained low, reflecting a continuing caution and lacklustre demand in the overall property market.

Mr Li Hiaw Ho, executive director of ** Richard Ellis Research, estimated the site's breakeven cost at about $600 psf, based on the top bid. The units could be sold for $650 psf in about a year, he added.

Homes at nearby condos such as Yew Tee Residences, Northvale and The Warren have fetched $450 to $650 psf recently, Mr Li said.

Far East's bid yesterday came in higher than the top bid submitted last month for a similar site at the junction of Choa Chu Kang Road and Woodlands Road.

That site, home to the Ten Mile Junction mall, drew a top bid of $61 million, or $162 psf ppr.


FIONA CHAN

 

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May 27, 2008
Katong Mall on sale for up to $250m - amid controversy
Public tender comes after a contentious collective sale approval last year
By Jessica Cheam
ONE of the landmarks of the east, Katong Mall, was put up for sale yesterday at an indicative price of $220 million to $250 million - amid some controversy.
The 99-year leasehold property comprises strata-titled commercial units used as shops and other businesses.

But the site can be rebuilt into a mixed development comprising residential and commercial units, said its marketing agent Jones Lang LaSalle (JLL).

Its public tender comes after a contentious collective sale approval process in September last year.

About 35 minority owners claimed they were not consulted in the drawing up of the sale agreement, and that the sale process was conducted under the old rules and not the new, stricter ones that took effect in October.

They also complained of a low reserve price, and said some majority owners had a potential conflict of interest as they were property developers - Nustavino and Habitat Properties - that could bid for the property.

Whether the consent of owners representing 80 per cent of the share value required for the sale had been obtained was also called into question yesterday.

One minority owner, Mr Robert Ong, told The Straits Times that five owners had withdrawn their signatures before the new laws kicked in on Oct 4.

'This means the signatures collected could have fallen below the 80 per cent threshold,' he said.

When contacted, JLL's local director for investments, Ms Stella Hoh, said that the firm had the 80 per cent level to proceed with the sale.

On the conflict of interest issue, she said that even if the sale committee members were developers by trade, they were legally allowed to bid as long as they declared their position.

They would not take part in the tender decision-making and voting process, she added.

'We believe this site will attract a lot of parties despite the current market, given that there are few private land sites for sale in this area.'

The four-storey mall has a land area of 78,158 sq ft with a gross plot ratio of 3.6. This works out to a gross floor area of 281,369 sq ft - an indicative sale price of $782 per sq ft (psf) to $888 psf per plot ratio.

Developers have an extra option: JLL said it has also obtained outline planning permission for a mixed development with an approved plot ratio of three - a gross floor area of up to 234,474 sq ft. This is subject to the relevant authorities' approval and payment of a development charge.

Located at the junction of East Coast Road and Joo Chiat Road, the project could yield about 490 commercial units of 400 sq ft each, or 100 residential homes and 185 commercial units of 1,200 sq ft and 400 sq ft, respectively.

Savills Singapore director (business development) Ku Swee Yong said the site was an attractive location, with an increasing population catchment with upcoming condominiums nearby.

'But given the current market, it remains to be seen whether there will be takers.'

Meanwhile, all eyes will be on the results of the public tender, which closes at 3pm on June 25.

 

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June 4, 2008
Developers turn landlords as property market stays quiet
With projects held back, firms lease out units bought in collective sales
By Joyce Teo
PROPERTY developers such as Koh Brothers and GuocoLand, which bought collective sale sites during boom times, are now becoming landlords as they wait out the market slowdown.
They are leasing out apartments they bought to existing occupants as a way to generate some income instead of simply leaving them vacant.

If the property upswing had continued, these developers might well have moved quickly to tear down the older homes to put up new developments.

But the sharp slowdown in home sales has put paid to such thoughts for now.

Market observers say renting is a nimble move given present market conditions.

For sellers of units in collective deals who have yet to buy a new home, it is a win- win situation as they would have collected their sale proceeds.

Take, for example, the consortium that bought freehold Lincoln Lodge for $243 million in June last year.

It has decided to allow occupants to keep renting homes for six months from the sale completion date of July 8, and thereafter on a monthly extension basis.

'Upon requests by some of the sellers to stay on, and while waiting for approvals, we have decided to grant them this request by extending a lease,' said Mr Francis Koh, Koh Brothers' managing director and chief executive.

Rents at Lincoln Lodge range from $2,700 to about $4,500 for larger units.

In the middle of last year, at the height of the collective sale frenzy, Koh Brothers bought the Newton site with Heeton Holdings, KSH Holdings and Lian Beng Group for a record $1,449.30 per sq ft (psf) per plot ratio.

A Lincoln Lodge seller, who wished to be known only as Mr Tan, welcomed the rental move as sellers had collected sale proceeds in January, and those who had not bought a home could take their time.

'It's an option...I know someone who negotiated the rent down to $2,500,' he said.

GuocoLand seems to be the early rental front runner.

It offered residents short-term leases at Sophia Court in Adis Road last year, followed by Leedon Heights off Holland Road earlier this year. The leases started in March at Sophia Court and yesterday at Leedon Heights. Both last till Jan 31 next year.

A three-bedroom unit at Leedon Heights costs $2,850 a month, while rents at Sophia Court range from $800 to more than $4,000 a month.

GuocoLand bought Leedon Heights in April last year for $835 million and Sophia Court in late 2006 for $230 million.

Renting out units is a way to 'wait out the current quiet in the market', said Knight Frank's director of research and consultancy, Mr Nicholas Mak.

'If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.'

Frasers Centrepoint said it may offer short-term leases to the former owners of the 185-unit Flamingo Valley, a freehold site in Siglap Road that it bought for $194 million in February last year.

'We had 50 owners who wrote to ask us to extend their lease...They haven't found anything suitable,' said the firm's general manager of development and property, Mr Cheang Kok Kheong.

He said the firm was likely to extend a lease of six months to a year. This would 'give us more time to think about our plans'.

City Developments (CDL) has said it is still exploring the renting option.

Renting out apartments bought in collective sales is not new. CDL did so a few years back, when it rented out all 124 apartments in Kim Lin Mansion in Grange Road.

It had bought it in late 1999 for $251 million, or $996 psf of potential built-up area, but pushed it out for sale only at the height of the property boom last year. It fetched prices of $3,600 psf.

joyceteo@sph.com.sg



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Win-win deal


Developers lease out units to generate income instead of leaving them empty as they sit out the market slowdown.

Sellers of collective sale projects who have yet to buy new homes can stay on in their existing units as tenants.
TOUGH TARGET

'If developers were to launch their projects now, it may be challenging for them to reach their target price for some of the projects.'

 

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June 25, 2008
Woodleigh site draws six fairly low bids
By Joyce Teo
THE tender for a Woodleigh Close residential site attracted plenty of interest, but the bids were all on the low side.
Six hopefuls lined up for the 1.08ha, 99-year leasehold site with Frasers Centrepoint lodging the top bid of $87.68 million, or $270 per sq ft (psf) of gross floor area.

This falls well below expectations of at least $350 psf and reflects the market's subdued state.

Hoi Hup Realty was the second highest bidder with an offer of $82.82 million or $255 psf.

A joint venture between Hong Leong Holdings unit Kingston Development and TID offered $81.18 million or $250 psf.

The other bids for the site near the Potong Pasir MRT station ranged from $74 million to $81 million.

CBRE Research executive director Li Hiaw Ho said: 'While the six bids submitted for the site reflects fairly good interest, the lower quantum of prices is a reflection of a more tentative mood in the residential market and rising construction costs.'

Mr Ku Swee Yong, Savills Singapore's director of marketing and business development, said: 'The bids are lower than expected because of higher construction costs, as well as the shorter and more expensive credit lines extended to developers.'

Frasers Centrepoint aims to build about 300 high-rise condominium units on the site.

Based on the top bid, the estimated breakeven cost of the new project will be around $650 psf to $700 psf, said Mr Li.

He added that the new apartments could go for $800 psf to $850 psf, considering that nearby units in freehold Blossoms@Woodleigh have been sold in the resale market at an average price of $840 psf this year.

Also, units in Casa Meya, a new freehold project in Potong Pasir estate featuring mostly small units of around 800 sq ft, went for around $910 psf, said Mr Li.

But a market watcher said Frasers Centrepoint may be hoping to sell the new apartments for up to $900 psf.

 

[rango]

CitiBank Said NO Oversupply in Next 2 Years


It estimates only 60% of the 30,000 units forecast will be completed, so fall in prices will be modest

ANALYSTS from Citigroup have stuck their necks out to dismiss some market predictions of a crippling property glut in the next two years.

Official figures show that around 30,000 homes will be completed in the next two years, but Citi reckons only around 60 per cent will likely be ready.

If the bank’s forecast is accurate, it could mean that downward pressure on prices will not be as great as some had feared.

Citi’s report on Singapore property, which came out on Tuesday, pointed to where previous predictions may have got it wrong.

It stated that by the end of March, there were 6,000 collective sale units that had yet to be demolished.

Some of the delays are because of legal challenges over sales, as well as developers extending lease periods for owners due to the weak primary market, Citi said.

It estimated that there will be 8,200 units completed next year and 10,200 in 2010, assuming no further collective sales are done.

These numbers are way below market expectations of 12,500 units next year and 17,500 units in 2010, it said.

These higher supply numbers had led many experts to conclude that an oversupply was on the cards.

But Citi stated: ‘We have always argued that such estimates are not always accurate and they often get revised downward over time.’

However, it did not elaborate further on the reasons for its lower supply projections.

Knight Frank director of research and consultancy Nicholas Mak said the direct impact of the supply completion figures on prices is limited because most of these homes would already have been sold.

But a large supply of homes for occupation would negatively affect rentals, and this would in turn hit prices, he added.

Savills Singapore also believes the supply figures released by the Urban Redevelopment Authority are too high.

Mr Ku Swee Yong, its director of marketing and business development, said completion delays in collective sales, as well as delayed launches, have not been factored in.

‘There are insufficient construction resources, which means there will likely be delays,’ he added.

‘Prices of mid- to high-end properties will fall but not to the extent of the 30 per cent to 40 per cent drop predicted by some analysts.’

Banks like Credit Suisse and Barclays Capital have forecast drops of up to 40 per cent in rents and prices, but Citi tips a fall of up to 30 per cent, and largely only in high-end homes.

Citi expects this sector will suffer from falling demand, particularly as expatriates and locals keep downgrading.

That will put downward pressure on rents of prime homes and further pressure on prices, it said.

Citi also said a long downturn like the one that caught out many buyers in the late 1990s and early 2000s is unlikely.

This is because resale volumes are still at above average levels, reflecting strong genuine demand. There is no sign of overbuilding or an overall housing shortage.

Also, mass market homes remain highly affordable and are supported by high rental yields of more than 5 per cent, Citi said.

‘Due to the sharp rise, we believe high-end residential is likely to suffer the brunt of the 20 per cent to 30 per cent price decline while the mass market should remain fairly firm.’

The mid-tier segment is likely to fall by 10 per cent to 20 per cent, it said. These are from a high base.

Luxury home prices have surged by 149 per cent since the troughs in 2004.

Prices in the mid-tier and mass-market segments rose by a still robust 79 per cent and 39 per cent respectively.

Source : Straits Times - 26 Jun 2008

 

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June 30, 2008
LEASEHOLD PROJECT
Buyers snap up 195 units in Bishan condo
IN A welcome departure from the generally quiet market so far this year, the latest property launch - of the 616-unit Clover by the Park - has generated sales of 195 units so far.
Sim Lian Group, which is developing the condo, said that as at 8pm last night, it had sold 195 out of the 308 units that were released for sale since last Friday's official launch.

The 99-year leasehold condominium has large units, suites and penthouses.

The eight suites, of 3,057 sq ft each, were all snapped up, indicating that buyers were keen on larger units.

Buyers were mostly families upgrading from HDB flats. They picked up units priced between $907,000 and $2.68 million, or $599 per sq ft (psf) to $858 psf, said Sim Lian Land's executive director, Ms Diana Kuik.

The average price worked out to be about $750 psf.

Ms Kuik said potential buyers thronged the showflat and some stayed so late that the developer closed the showflat only at midnight on Saturday and around 10pm last night.

However, about 100 units had already been sold by Thursday, following the development's soft launch on Wednesday.

The property market has largely been quiet recently, as sentiment dipped drastically early in the year. Sales volume has plunged dramatically from the numbers registered during the boom times of last year. While the mood is still cautious, a few recent launches have registered encouraging sales.

Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said: 'Serious buyers were probably spoilt for choice this weekend, shopping among the few launches which are attractively priced.'

A week ago, the 99-year leasehold Dakota Residences in Dakota Crescent and the freehold The Amery in Telok Kurau were released for sale.


JOYCE TEO

 

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July 6, 2008
S'pore's property boom cooling: analysts
SINGAPORE'S booming residential property sector is finally showing signs of cooling but projects including two casino developments should underpin long-term prices, analysts say.

The market was described by real estate giant Jones Lang LaSalle as the world's hottest in 2007, when the city-state's property prices surged 31 per cent overall.

But this year the sector has not escaped wider concerns over a US-led global economic slowdown and inflationary pressures.

Private home prices rose 0.4 per cent in the second quarter, the slowest increase in four years, the government's preliminary figures showed last week.

The second-quarter rise was also much slower than the 3.7 per cent increase recorded in the previous three months but prospective buyers waiting for huge bargains may be disappointed.

Property analysts say prices are likely to fall further in the third quarter but experts rule out massive declines because of the multiplier effect from two multi-billion-dollar gaming resorts now under construction.

Housing demand is expected to pick up when the first of the two casinos opens next year, employing thousands, said Mr Chua Yang Liang, head of South-east Asia research with Jones Lang LaSalle.

Some of the workforce for the resorts will likely come from foreign countries, creating possible demand for housing, he said.

'To staff these people, you need housing so there will be a potential effect,' Mr Chua told AFP.

Foreigners currently make up more than 20 per cent of Singapore's 4.6 million population.

The Marina Bay Financial Centre, a new financial district under construction which will also feature luxury apartments, should also underpin the market in the longer term, analysts said.

Ms Tay Huey Ying, director for research with Colliers International real estate consultants, said prices are not about to spiral downwards even though second quarter figures indicate the residential property market may have peaked.

'Singapore's positive mid-term prospects on the back of the completion of the two integrated resorts and the Marina Bay Financial Centre will help to prop prices up,' said Ms Tay.

Values may hold, or decline by no more than three percent, in the third quarter but overall for 2008 home prices could still rise four to eight per cent, said Ms Tay.

Analysts from DTZ real estate consultancy said buyers are still interested in project launches.

'Some residential projects are enjoying sell-out status while others are being well received,' said Ms Margaret Thean, DTZ's executive director for residential.

Government approval for the two gaming resorts in 2005 was one of the major factors behind the revival of Singapore's property market, which had been stuck in a rut stemming from the 1997 Asian financial crisis.

Efforts to woo wealthy foreigners to take up residence in Singapore, along with an all-out bid to attract skilled foreign migrants, also drove the property market revival, analysts said.

The rebound left many expatriates struggling to cope with soaring rents which in some cases doubled over the past year. -- AFP

 

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Goldhill Centre up for sale
09 July 2008 2345 hrs (SST)

SINGAPORE : Goldhill Centre is up for enbloc sale by tender.

The freehold 70,177-square foot commercial site at Novena has a gross plot ratio of up to 3.0.

It can be redeveloped into a commercial building with a gross floor area of about 210,500 square feet.

The site currently comprises three blocks of three-storey walk-up commercial buildings with 87 shop and office units.

Goldhill Centre has an indicative price of S$315 million. That translates to about S$1,500 per square foot per plot ratio.

The tender will close at 3pm on August 19.

Goldhill Centre is the second full commercial collective sale site to be put up this year, after Katong Mall. - CNA/ms

 

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July 12, 2008
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in the foot after a ruling by the Strata Titles Board (STB) yesterday almost certainly killed off its estate's $405 million collective sale.
It delayed seeking mandatory STB approval for the deal and is now caught in a deadline trap of its own making.

The key date is July 25, that is when the estate's sales committee must complete the deal. However, that looks impossible now after yesterday's STB decision.

The board ruled that it would not bring forward an Aug 7 hearing set to allow testimony from witnesses that have yet to be called.

The STB had pencilled in the date after listening to sale objectors on June 16 to 18 and 'taking into account the availability of all parties and the board', it said.

Until that Aug 7 hearing is conducted, the sale cannot be signed and sealed.

The Straits Times understands that the sales committee wanted a date change as the buyers - Frasers Centrepoint and Far East Organization - will not extend the completion deadline.

With no extension, the sale agreement will likely lapse on July 25. This means the developers can walk away from a deal that looks far less compelling now than last July, given souring homebuyer sentiment and escalating construction costs.

However, this might be a blessing in disguise for some owners at the estate. The deal was inked just before the property boom at prices around $430 per sq ft (psf), but private homes in Tampines now go from $550 to $700 psf.

The deadline crunch seems to be of the sales committee's own making.

The conditions of the sales agreement were met on July 25 last year but the committee delayed applying for the standard STB approval until Jan 7.

The committee told the STB that it wanted to await the outcome of legal challenges over the contentious Gillman Heights sale.

The committee argued that if the Gillman Heights sale was halted over issues of majority consent, it would have made a Tampines Court application futile.

In the Gillman Heights case, minority owners appealed all the way to the High Court, claiming that collective sale rules did not apply to former Housing and Urban Development Company (HUDC) estates.

Tampines Court is also a former HUDC estate so any ruling could have killed its own collective sale.

But Justice Choo Han Teck ruled last month that a privatised HUDC estate can be sold collectively if the requisite conditions are met.

While that also cleared the way for the Tampines Court sale, it left the sales committee with little time to tie up loose ends, including objections by minority owners.

The STB registrar had some sympathy yesterday for the committee's argument about why it delayed applying for sale approval.

But he pointed out that a sale agreement has a deadline and, by waiting for the High Court ruling, the committtee took the risk that it would not have enough time to get a ruling from the board before the expiry date.

'This is a calculated risk, whose consequences they will have to bear,' he said.

'The board should not be pressured to accommodate a deadline set by the applicants and the buyer.'

A lawyer acting for the minority owners told The Straits Times that he did not want to comment on the outcome.

The one lifeline for the majority owners would be if the buyers extend the deadline but that also looks a lost cause.

Far East Organization and Frasers Centrepoint told The Straits Times last night that they are ready to complete the deal, but 'the onus was upon the vendors to secure the STB order within the agreed timeframe, which is about 16 months from the date of the agreement'.

Savills director of marketing and business development Ku Swee Yong said since the deal was inked last July, construction costs have escalated a lot faster than mass market property prices.

'The project, unsurprisingly, has become less attractive,' he said.

Tampines Court is a sizeable 702,162 sq ft site with 560 units. It could be redeveloped into a new condominium with around 1,580 units averaging 1,300 sq ft.

 

[jq75]

July 12, 2008
Tampines Court collective sale in peril
STB rules not to bring forward Aug 7 hearing, which must take place before deal is signed by July 25 deadline
By Jessica Cheam
THE sales committee at Tampines Court looks to have shot itself in the foot after a ruling by the Strata Titles Board (STB) yesterday almost certainly killed off its estate's $405 million collective sale.
It delayed seeking mandatory STB approval for the deal and is now caught in a deadline trap of its own making.

The key date is July 25, that is when the estate's sales committee must complete the deal. However, that looks impossible now after yesterday's STB decision.

The board ruled that it would not bring forward an Aug 7 hearing set to allow testimony from witnesses that have yet to be called.

The STB had pencilled in the date after listening to sale objectors on June 16 to 18 and 'taking into account the availability of all parties and the board', it said.

Until that Aug 7 hearing is conducted, the sale cannot be signed and sealed.

The Straits Times understands that the sales committee wanted a date change as the buyers - Frasers Centrepoint and Far East Organization - will not extend the completion deadline.

With no extension, the sale agreement will likely lapse on July 25. This means the developers can walk away from a deal that looks far less compelling now than last July, given souring homebuyer sentiment and escalating construction costs.

However, this might be a blessing in disguise for some owners at the estate. The deal was inked just before the property boom at prices around $430 per sq ft (psf), but private homes in Tampines now go from $550 to $700 psf.

The deadline crunch seems to be of the sales committee's own making.

The conditions of the sales agreement were met on July 25 last year but the committee delayed applying for the standard STB approval until Jan 7.

The committee told the STB that it wanted to await the outcome of legal challenges over the contentious Gillman Heights sale.

The committee argued that if the Gillman Heights sale was halted over issues of majority consent, it would have made a Tampines Court application futile.

In the Gillman Heights case, minority owners appealed all the way to the High Court, claiming that collective sale rules did not apply to former Housing and Urban Development Company (HUDC) estates.

Tampines Court is also a former HUDC estate so any ruling could have killed its own collective sale.

But Justice Choo Han Teck ruled last month that a privatised HUDC estate can be sold collectively if the requisite conditions are met.

While that also cleared the way for the Tampines Court sale, it left the sales committee with little time to tie up loose ends, including objections by minority owners.

The STB registrar had some sympathy yesterday for the committee's argument about why it delayed applying for sale approval.

But he pointed out that a sale agreement has a deadline and, by waiting for the High Court ruling, the committtee took the risk that it would not have enough time to get a ruling from the board before the expiry date.

'This is a calculated risk, whose consequences they will have to bear,' he said.

'The board should not be pressured to accommodate a deadline set by the applicants and the buyer.'

A lawyer acting for the minority owners told The Straits Times that he did not want to comment on the outcome.

The one lifeline for the majority owners would be if the buyers extend the deadline but that also looks a lost cause.

Far East Organization and Frasers Centrepoint told The Straits Times last night that they are ready to complete the deal, but 'the onus was upon the vendors to secure the STB order within the agreed timeframe, which is about 16 months from the date of the agreement'.

Savills director of marketing and business development Ku Swee Yong said since the deal was inked last July, construction costs have escalated a lot faster than mass market property prices.

'The project, unsurprisingly, has become less attractive,' he said.

Tampines Court is a sizeable 702,162 sq ft site with 560 units. It could be redeveloped into a new condominium with around 1,580 units averaging 1,300 sq ft.

Key proceedings
March 25, 2007: Tampines Court's sales committee enters a sale and purchase agreement with Far East Organization and Frasers Centrepoint.
July 25, 2007: The conditions of the sales agreement are fulfilled.

Jan 7: The sales committee applies to the Strata Titles Board (STB) for sale approval and the minority owners then file their objections.

June 16 to 18: The STB hears the objections and sets the next hearing for Aug 7.

June 30: The sales committee applies to bring the Aug 7 hearing forward to before the sale's July 25 expiry date.

July 11: STB dismisses the sales committee's request.

 

[jq75]

July 15, 2008
URA offers Upper Changi residential site for sale
A RESIDENTIAL site at New Upper Changi Road and Tanah Merah Kechil Avenue was put up for sale by the Urban Redevelopment Authority (URA) on Tuesday.
The land parcel is one of four residential sites to be sold through the confirmed list under the Government Land Sales Programme for the second half of 2008.

Covering an area of 0.99 ha, the site, within an established private residential estate, will have a maximum permissible gross floor area of 27,652 sqm.

More details on the site are available on the URA website.

 

[rango]

Singapore home sales in June up 80% from May
By Ng Baoying, Channel NewsAsia | Posted: 16 July 2008 0059 hrs


Photos 1 of 1





SINGAPORE: June was the best performing month in terms of home sales since the property market tumbled last September, according to numbers released by the Urban Redevelopment Authority (URA) on Tuesday.

Altogether, 801 private homes were sold, a jump of 80 per cent from May.

But there were also more units launched. The number of units launched in June leapt 125 per cent from May to 1,069 units, meaning that there were more unsold properties in the market.

However, analysts said this would not deter developers from launching even more units in July to capitalize on the momentum, before the arrival of the Hungry Ghost month.

Colliers International expects around 1,300 units to be launched in July, as developers pre-empt the traditionally slow-moving 7th lunar month in August.

In June, most transactions occurred in the suburban regions, while prime locations saw some weakness in sales. No units valued at S$4,000 per square foot or more changed hands last month.

Nicholas Mak, director of Knight Frank, said: "The pick-up is predominantly in mid-tier mass market, because the buyers are owner occupiers. Residents in HDB estates around private condos for sale are forming the backbone of the demand."

Tay Huey Ying, director for research and advisory at Colliers International, said: "In the current uncertain economic climate, developers are going to continue to delay launches of higher-end projects and likely to focus on mass-market tiers."

With the suburban market being a price-sensitive one, analysts see developers continuing to employ pricing strategies.

Knight Frank's Nicholas Mak said: "Developers must price their products quite attractively to generate sales. Any increase in prices, especially a sharp increase, will chase away buyers."

Prices may be seen softening, but analysts say there will not be a free-fall as underlying demand will put a cap on how far prices may dip. - CNA/ir

 

[jq75]

Landmark ruling

Judge sets outrole of Strata Titles Board and whichof its findings can be challenged

Friday • July 18, 2008


Zul Othman


zul@mediacorp.com.sg







IT IS a situation that may apply to some en bloc deals: The selling price could have been higher if the sales committee or its agent had tried harder to secure a better deal.

In the case of Horizon Towers, a potential buyer was even standing by with a higher price than the one that was eventually chosen.

But that cannot be reason enough to disallow an en bloc sale, according to Justice Choo Han Teck as he brought a protracted saga to an end.

In a landmark decision, the judge set out the role of the Strata Titles Board as well as which of its findings can be challenged, and which ones cannot.

When it comes to price, as long as the STB finds that a purchase price is fair, which would make it a “finding of fact” in legal parlance, it would have fulfilled its duty and is entitled to approve an en bloc sale.

Minority residents at Horizon Towers who argued that the $500-million sale to Horizon Partners Private Limited (HPPL) was done in bad faith — as evidenced by Vineyard Holdings’ higher offer of $510 million :— had failed to prove their case.

Justice Choo found “no error of law” and said the High Court “cannot and will not” interfere in findings of fact made by the STB.

“Whether it was the right time to sell, or that the sales committee ought to have made a little more effort to persuade the purchaser to offer more, are not crucial matters that oblige the STB to withhold approval.

“Nor would it be the concern of the STB that some, or all, of the appellants might have consented had the Vineyard offer been made known to all of them,” he said.

If the STB were to make such enquiries, it “would never get its job done within the time limited”.

The minority owners had appealed to reverse a Dec 7 decision by STB to approve the sale. But if residents believe that the sales committee had “deliberately or negligently” not pursued a higher offer, resulting in a financial loss to them, the recourse is through litigation in the courts, said Justice Choo.

“It is necessary for this point to be made, not to encourage further litigation, but to emphasise that a subsidiary proprietor who does not wish to sell his unit can only object to the en bloc sale on such grounds as the relevant statutes allow,” he said.

And, the statutes do not allow the STB to deal with “allegations and counter-allegations against parties” as its tribunal hearing does not give such parties “the full recourse of trial to defend themselves”.

He concluded that all sides were treated fairly in this deal as “fairness requires only that the rules and regulations of each en bloc deal to be properly and duly administered”.

 

[jq75]

July 18, 2008
$3b Farrer condo boasts sensuous, curvy towers
Renowned architect Zaha Hadid behind their design; project to be launched in 2009
By Joyce Teo
PROPERTY giant CapitaLand has unveiled the 'branded' upmarket designs for a $3 billion residential project in Farrer Road that it aims to launch next year.
The as-yet-unnamed condominium boasts a series of sensuous lines that are not commonly seen in residential projects in Singapore, while the curving towers give an ultra-modern feel without the harsh edges present on many blocks.

It is all very much in the recognised style of architect Zaha Hadid, the first female recipient of the coveted Pritzker Architecture Prize.

This is her first condo project in Singapore but she has designed two bungalows for niche developer Elevation Developments.

Past Pritzker Architecture Prize winners include Mr Frank Gehry, Sir Norman Foster and Mr Rem Koolhaas.

The seven 36-storey blocks on the sprawling 838,488 sq ft site will hold about 1,500 homes. There will also be six pairs of unique semi-detached houses.

CapitaLand is developing the 99-year leasehold plot with three partners. Hotel Properties and a Morgan Stanley Real Estate fund will each hold 22.5 per cent, while Wachovia Development will take 20 per cent.

These parties, which borrowed a whopping $1.996 billion for the ambitious project, yesterday held a signing ceremony for the loan with their bankers at the Four Seasons Hotel.

It is the largest syndicated residential property development loan ever arranged in Singapore and comes amid a slow housing scene and tight credit markets.

CapitaLand said the deal comprises a $1.362 billion term loan, $500 million of revolving credit and $133.9 million in bank guarantees.

The collective sale deal for the former Farrer Court condo site was inked in June last year at $1.338 billion, or up to $783 per sq ft (psf) of potential gross floor area.

Ms Patricia Chia, chief executive of CapitaLand Residential Singapore, said the project's break- even cost is around $1,350 psf to $1,450 psf.

The condo will be launched in the first half of next year.

Developers generally see no need to hurry given the slow property sector, falling share markets and continuing bad news from the United States.

CapitaLand chief executive Liew Mun Leong said at the signing ceremony that the past few months have been challenging, but the business world must go on, notwithstanding the current economic turbulence in the US.

He said bankers, developers, businesses and potential partners could come together to exploit opportunities that increase during bad times.

Mr Liew added later: 'Sentiment has been affected in the US, but I think the fundamentals in Asia - in terms of economic growth, the demand, urbanisation - are still very strong.'

 

[jq75]

July 18, 2008
Office space slump? 2 state-owned sites pull in strong bids
By Fiona Chan
THE former Ministry of Home Affairs complex at Phoenix Park is set to be transformed into an 'iconic integrated office complex' with restaurants and other facilities.
The plans were unveiled by LHN Facilities Management, which was awarded the right to lease the Tanglin Road site by the Singapore Land Authority (SLA) yesterday.

LHN's managing director, Mr Kelvin Lim, added that perks like a shuttle service to the nearby Redhill MRT station would help to attract government agencies and private companies which need space outside the Central Business District. The property comprises 24 low-rise blocks.

LHN, which specialises in converting old properties for new uses, offered $368,888 a month - more than double the $165,000 guide rent. A total of 11 bids were received for the site.

Another state-owned site awarded for lease by the SLA, the former Monk's Hill Secondary School at Winstedt Road, is also set for a makeover.

The top bid came in from marine engineering firm Allbest Equipments at $211,328 a month - 40 per cent more than the guide rent of $147,300.

Allbest is retaining only 5 to 10 per cent of the built-up space for its own office needs and will rent out the rest.

The company will spend about $4 million doing up the building and expects to lease space to medium-sized businesses at $8 to $10 per sq ft, said Mr Chan Cheong Hoy, general manager of Allbest.

The strong interest in the two state-owned sites shows that despite the torpor in the property market, demand for office space in the prime area appears to be going strong.

The two buildings pulled in offers that were well above their guide rents, SLA said.

Both companies plan to sub-lease most of the space in these buildings, believing that office demand will remain healthy.

These two properties are the first that SLA has leased out this year. The agency will put up another two sites, also for office use, in the coming months.

One is a former police post at 11 Kelantan Road, which has a gross floor area of 1,905 sq ft. The other is the former Pacific Can Building at Cecil Street, a vacant two-storey property with a total floor area of 19,482 sq ft.