Property Market Updates (10 Nov 2010)

Top bids for Hougang site just 2.6% apart
The more sober bidding mood continued at a state tender for a 99-year leasehold private condominium site at Upper Serangoon View in the Hougang area, as developers remained mindful of the sustained land supply being delivered by the state. The top bid of $320.15 psf of potential gross floor area - from a tie-up of Frasers Centrepoint, Far East Organization and Japan's Sekisui House - was within market expectations and just 2.6% above the second highest offer by a unit of Centurion Properties. It bid about $312 psf ppr. Yesterday's tender drew just four bids. A unit of CapitaLand offered $302 psf ppr, while a unit of City Developments bid at $278 psf ppr. This is believed to be Osaka-based Sekisui House's first major Singapore real estate venture. The group is the largest home builder in Japan and prides itself on building environmentally-friendly houses. In a joint statement, Frasers Centrepoint, Far East and Sekisui said: 'This is an attractive site as the development will enjoy water views (from the adjacent Sungei Serangoon) and the greenery from nearby Punggol Park. We are planning to build about 470 units (eight blocks of 17 storeys) on the site. Tender result is consistent with the pattern for the previous four state tenders for 99-year leasehold private condo land where top bids have also come in below the $350 psf ppr mark. This pattern reflects caution on the part of developers who are mindful of the continuity of sites coming on. There will be a Government Land Sales (GLS) tender closing every week till mid-December, and the first-half 2011 GLS Programme can be expected to throw up a wide selection of sites when it's announced. In May this year, MCL Land paid $456 psf ppr for a site at the corner of Hougang Avenue 2 and Yio Chu Kang Road that can be developed into a five-storey condo. That plot is next to a landed housing estate. In the resale market, units at Evergreen Park and Rio Vista (both nearby 99-year condos) were sold at $600-720 psf in July to September 2010.

- The Business Times, P10

- Also quoted in The Straits Time, B29, “Serangoon residential site draws just 4 bids”.

Bought: $20m in June 2009 ; Sold: $37m in Oct 2009
Good-class bungalow owners are cashing in on rocketing property prices. A CBRE analysis of URA Realis caveats shows that good-class bungalows are netting bumper profits for owners who have seen average psf prices rise almost 30% over the past year. Several have taken to buying and selling their good-class bungalows within a period of less than two years. At least seven good-class bungalows bought since May last year have been sold within 18 months of purchase, with four sold within a year, with a profit of as much as 85 per cent over the purchase price. This massive gain was seen by a 40,677 sq ft good-class bungalow property on Ridout Road near the Holland area, translating to a $17 million gain within a four-month span. At least one home, on Nassim Road, has even been sold five times within the past six years - soaring from $9.8 million in 2005 to $43.5 million this year. It sold at $1,800 psf in April this year - almost 4.5 times the $405 psf it was sold for in February 2005. The 24,186 sq ft property had changed hands at $620 psf in August 2006, $760 psf in December the same year, followed by $1,000 psf in June 2007. Experts said that good-class bungalows have turned out to be one of this year's star investment propositions. URA data shows that non-landed home prices inched up 1.6 per cent in the third quarter, while prices of detached homes rose 8.4 per cent over the same period. This increase is one of the steepest over the last 15 years, said Cushman and Wakefield's senior manager of Asia-Pacific research, Mr Ong Kah Seng. He noted that the keen buying interest in good-class bungalows was being driven by limited supply, making it the safest buy for a home buyer not limited by affordability. The owners are usually ultra-high net worth Singaporeans, who are mostly professionals, businessmen or entrepreneurs. Typically, only Singapore citizens can own a good-class bungalow, but permanent residents may obtain permission to buy small bungalows with land areas of about 15,000 sq ft.

- The Straits Times, P14

S'pore Pools buys its new home
A unit of Malaysia's IOI Properties Bhd is understood to have sold IOI Plaza, a landmark 12-storey granite office block at the corner of Middle Road and Prinsep Street, for $139 million. The price works out to about $1,381 per square foot (psf) based on a net lettable area (NLA) of about 100,640 sq ft. The building is on a site with about 85 years' remaining lease. The buyer is said to be Singapore Pools, whose headquarters are currently located a stone's throw away at PoMo at 1 Selegie Road. According to a media report in 1996, IOI unit Future Link Properties developed the building at a total cost of about $100 million, inclusive of about $52.2 million or $444.18 per square foot per plot ratio paid for the 99-year leasehold plot which it won at a state tender that closed in January 1996. The 27,992.60 sq ft plot was one of the first 'white' sites to be sold by Urban Redevelopment Authority. Owners of such sites can make changes of use during the plot's 99-year leasehold tenure without paying a differential premium. The plot was sold with a 4.2 plot ratio (ratio of maximum potential gross floor area to land area). The plot's zoning and plot ratio remain unchanged in the current Master Plan 2008.

- The Business Times, P3

Hot money flood 'could trigger more property curbs here'
The flood of hot money unleashed by the United States' latest round of monetary easing runs the risk of inflating a Singapore property bubble and increases the chances of further property dampening measures. Regional markets - already awash with liquidity from advanced economies seeking better returns in Asia - are expected to be on the receiving end of a large slice of the US$600 billion (S$770 billion) injected by the US Federal Reserve last week. Analysts are highlighting property as the asset area most likely to be impacted by these large flows, with the market boosted in two ways.

The more direct route is via foreign funds buying into property directly, pushing prices up. The other is by flows pushing down interest rates and allowing people to borrow more to buy property.

- The Straits Times, B29

8,000 apply for 1,322 BTO flats
Demand for the latest batch of new Housing Board flats is high, with the offering oversubscribed by six times. Nearly 8,000 people applied for the 1,322 build-to-order (BTO) units in Sengkang and Bukit Panjang. By contrast, oversubscription rates for the two previous projects in Yishun in September and Woodlands last month were more modest, at 2.4 and 2.2 respectively. The oversubscription rate for the latest project, while high, was not as high as some of the earlier BTO projects such as the ones in Punggol and Boon Lay in May, which was more than six times the number of units available. Bigger flats proved the most popular this time around. Five-room premium flats at Anchorvale Horizon in Sengkang were oversubscribed by 12 times, with 1,838 applications for 148 units. The demand for the Sengkang flats, which are within walking distance from the town centre and the MRT, is a sign buyers are becoming more discerning. Some people are also prepared to wait for the flats they want because now they have more options, he added. HDB announced 16,000 new BTO flats this year, with 22,000 expected next year.

- The Straits Times, B5

Interpol to build global base in Singapore

Interpol is to build a base in Singapore, which will beef up the international policing organisation's crime-fighting efforts in the Asia-Pacific region. The Interpol Global Complex is expected to house about 300 staff, including enforcement officers seconded from Interpol's 188 member countries and those hired by the organisation. It could be sited in the Tanglin area, where several embassies are located. The proposal for the complex was approved by members at the Interpol General Assembly meeting in Qatar. The agreement was signed yesterday by Home Affairs and Law Minister K. Shanmugam and Interpol secretary-general Ronald Noble. The decision to build the complex is a recognition that technology and globalisation have allowed crimes to be carried out simultaneously across continents. The complex will complement Interpol's headquarters in France, the MHA said. It is expected to be operational by 2014.

- The Straits Times, B5

More SMEs understand concept of true branding

Local enterprises are becoming more aware about branding, going by the quality of submissions at this year's Singapore Prestige Brand Awards (SPBA). According to one of the judges, most of the applicants have gone beyond the basic concept of improving their product quality and services, and are looking at branding as a positioning and differentiating element. Even B2B businesses are beginning to focus on brand building. Among this year's SPBA winners, there were more than 20 that came from non-retail, non-F&B sectors. They included industrial property developer Kingsland Development and liquefied petroleum gas supplier Union Energy Corp.

- The Business Times, P11

Exchange Rates (extracted from xe.com)

1.00 SGD	=	0.77 USD
1.00 SGD	=	5.14 CNY
1.00 SGD	=	2.39 MYR
1.00 SGD	=	0.48 GBP
1.00 SGD	=	869.59 KRW
1.00 SGD	=	34.44 INR
1.00 SGD	=	6,899.05 IDR

ST Index change: 3,295.96 (-17.65) *As at Wed 10 Nov 2010 09:22 AM
SIBOR (3 mths): 0.43751 (S$)

SWAP (3 mths): 0.26788 (S$)

Property Market Updates (9th November 2010)

Major revamp for town centre

Minister of State Lee Yi Shyan has his sights set on bringing new life to Kampong Chai Chee. Mr Lee, MP of the mature ward in East Coast GRC, believes its town centre needs to be rejuvenated. One immediate project is a new integrated public transport hub to provide a seamless connection between the Bedok bus interchange and MRT station. The bus interchange and a plot next to it will also be developed to house retail shops and condominium blocks with 500 homes. The project will be completed by 2015. Further in the pipeline is another integrated project: a sports complex. Still in the conceptual stage, it will bring together the new community centre and sports facilities such as a swimming pool, indoor courts for badminton and sepak takraw, and a gymnasium. By integrating these facilities, land will be freed up for new flats and condominiums, said Mr Lee. 'Bedok Town Centre really needs an injection of new facilities that are up to date,' he said yesterday, ahead of a ministerial visit next month by Mrs Lim Hwee Hua, Minister in the Prime Minister's Office and Second Minister for Finance and Transport.

- The Straits Times, B3

'Invest in Jiangsu's untapped north'
Jiangsu may be one of the top investment destinations in China for Singapore firms but a significant part of the province has been somewhat overlooked, said Health Minister Khaw Boon Wan. Just back from a trip to the province, Mr Khaw is urging firms here to seize market openings in the Chinese coastal province's largely untapped north. Mr Khaw, who co-chairs the Singapore-Jiangsu Cooperation Council (SJCC), said yesterday that he has high expectations for bilateral trade and cultural exchanges. 'Our relationship has always been strong and dates back two decades,' said Mr Khaw. 'Suzhou Industrial Park, our first flagship project with China, as well as... the Wuxi Industrial Park are both over 15 years old now.' Singapore's private and public sectors have enjoyed a good run since the Suzhou Industrial Park project between the two countries was established in the 1990s. But until recently, most of Singapore's focus in Jiangsu was around the southern part of the province near the mouth of the Yangtze River. Mr Khaw, however, believes that the time is ripe for businesses to venture over the river into northern Jiangsu, an area that is fasting catching up with the south. 'One-third of Singapore's investments in China go to Jiangsu, making it our top investment destination in China, with cumulative actual investments exceeding US$16 billion (S$21 billion),' he said. 'And our investments in Jiangsu have gone beyond Suzhou and Wuxi, where there are now good projects in Nanjing, Zhangjiagang, Yangzhou, and across the Yangtze River to the north, like Nantong and Lianyungang.'
Mr Khaw also pointed out that there are more than 3,400 investment projects in Jiangsu involving Singapore companies, most of which have been the efforts of small and medium-sized enterprises. And while investments through the SJCC have been broad-based, ranging from manufacturing and property development to water treatment and many other modern services, Mr Khaw also sees local health-care players gradually making inroads in the province. 'They have a lot of interest in the service sector because they are now already into more than two decades of industrialisation,' he said. 'The service sector will include all sorts of things and of course health care will be a major piece, especially with their ageing population.'
- The Straits Times, B18

Wheelock's Scotts Square snags Hermes as maiden tenant
Wheelock Properties (Singapore) has secured Hermes as the maiden tenant for its Scotts Square retail podium which is slated to open by Christmas next year. Hermes will occupy a 3,000 sq ft ground-floor corner unit. This will be Hermes' fourth outlet in Singapore - after Liat Towers, Takashimaya Department Store, and The Shoppes at Marina Bay Sands. The Liat Towers store will remain open even after Hermes opens its new Scotts Square boutique, said Hermes' managing director. Tenants in the retail and services trades will make up about 70-75 per cent of the high-end mall's net lettable area, with food and beverage outlets (restaurants but not a food court) accounting for the rest of the space. There will be about 60 shops (assuming units are not amalgamated). Unit sizes start from about 800 sq ft plus. The mall will have four levels (from Basement 1 to Level 3) and 80-plus carpark lots in Basement 2. About 70% of the 338 freehold apartments in the development have been sold at an average price of $3,992 psf. 'We just sold one unit last week for $4,360 psf,' Ms Tan said. A Singaporean buyer picked up the 624-sq ft, one-bedroom apartment on the 38th floor for $2.72 million. Of the remaining units, most of which are on the upper floors, the highest priced among them would be about $4,600 psf, for a one-bedder.
- The Business Times, P30

InterCon group to manage RB Capital hotel
RB Capital Hotels, led by Kishin RK, has appointed InterContinental Hotels Group (IHG) to operate the hotel it will develop at the corner of Clemenceau Avenue and Havelock Road. At between 460 and 500 rooms, the property will be the biggest Holiday Inn Express (by room count) in South-east Asia. It is scheduled to open in the second half of 2013; earlier in the same year, in June, another Holiday Inn Express will open in Singapore - a 220-room property being developed by Chee Swee Cheng Group of Companies on the Wellington Building site near The Heeren. IHG Asia Australasia managing director Jan Smits said there was enough room for Singapore to have even more Holiday Inn Express hotels. 'A brand like Holiday Inn Express for instance offers excellent value backed by an international brand and the benefits of a big hotel chain.' The names of the two hotels are being finalised and their locations will offer different demand drivers. The property at Clemenceau / Havelock Road will appeal to corporate and leisure travellers transiting in Singapore who wish to be close to the CBD as well as nearby waterfront entertainment hubs at Clarke Quay, Robertson Quay, and Boat Quay. The hotel on the Wellington Building site on the other hand is targeted more at leisure guests and retail shoppers given its location in the Orchard Road belt, added Mr Smits.
RB Capital Hotels paid about $101.1 million or $813 psf ppr - a record unit land price for a 99-year leasehold hotel site in Singapore - for the plot at Clemenceau Avenue and Havelock Road at a state tender that closed in August.
- The Business Times, P30

CMA to buy major stake in prime Shanghai project
CapitamallsAsia (CMA) said yesterday it has agreed to buy a two-thirds stake in a shopping mall and office development in Shanghai for about 1.45 billion yuan (S$281 million). The 3.86 billion yuan project in Shanghai's prime Luwan district will comprise a six-storey shopping mall and a 31-storey office tower, yielding a total gross floor area of 127,000 sq m to be split equally between retail and office space. Projected development costs, including land costs, work out to 30,400 yuan per sq m of gross floor area. CMA chief executive Lim Beng Chee said the project, in one of Shanghai's key commercial and residential areas, 'will be able to tap on a large catchment of about one million residents with high disposable incomes in the immediate vicinity'. He sees the investment as adding further value to CMA's portfolio and its pipeline of growth. The development will be built on 24,000 sq m site at the junction of Xujiahui and Madang roads. It will be connected to the interchange of subway Lines 9 and 13 and is close to the Xintiandi dining and entertainment area. The latest valuation of the property, commissioned by CMA and conducted by DTZ Debenham Tie Leung in September, was 2.28 billion yuan, based on the existing land condition.
- The Business Times, P9
- Also quoted in The Straits Times, B15: “CAN Buys into Shanghai property.”

Developers mind the gap in bids for land



Developers looking to build homes are no longer bidding with wild abandon at Government Land Sale tenders as the impact of the property cooling measures kicks in. This can be gauged from the fact that the gap between the top bidder and next highest bid for residential sites and sites with residential components has started to narrow. The gap peaked in August and early September before declining in recent weeks as the impact of the Aug 30 measures gradually took effect, according to an analysis by Jones Lang LaSalle. The gap (measured by the difference between the top two bids divided by the second highest bid) peaked at 31% for the condo plot at Miltonia Close next to Orchid Country Club in the Yishun area offered at a tender which closed in August. Another tender that closed on Sept 1, a residential-commercial plot next to Bedok MRT Station, also saw a relatively high winning margin of 21%. The trend persisted into early September, with a tender for a condo plot at Jalan Eunos/Foo Kim Lin Road drawing a 26% winning margin from top bidder Far East Organization when it closed on Sept 7. Since then, the margin has slipped to single-digit per cent levels, mostly between one and 4%. Between Jan 1 and July 31 this year, the winning margin ranged from one to 17%, with the 17% premium paid by a Far East Organization-Frasers Centrepoint tie-up for a private condo plot at Yishun Ave 2/Canberra Drive offered at a tender which closed in June. Market watchers suggest that the margin being at its widest in August and early September reflected the bullish sentiment prevailing in the property market at the time that led the government to rein in the market on Aug 30.
Close to 14,000 private homes (including executive condominiums) are estimated to be generated from sites sold and to be sold under the government land sale programme this year. This figure includes 9,790 units that can be built on sites sold so far this year, and 3,470 units on seven sites that are pending - either the tenders have yet to close or have yet to be awarded. In addition, a site in Punggol Walk/Central that can be developed into 685 homes will be launched later this month.
- The Business Times, P1

Exchange Rates (extracted from xe.com)

1.00 SGD	=	0.777 USD
1.00 SGD	=	5.199 CNY
1.00 SGD	=	2.406 MYR
1.00 SGD	=	0.481 GBP
1.00 SGD	=	866.913 KRW
1.00 SGD	=	34.756 INR
1.00 SGD	=	6,923.239 IDR

ST Index change: 3,249.90 (-5.50) *As at Tue 9 Nov 2010 09:21 AM
SIBOR (3 mths): 0.43751 (S$)

SWAP (3 mths): 0.26330 (S$)

Property Market Updates (8th November 2010)

En bloc market still active
Eight collective sales - they include Pastoral View in Bassein Road and Glenville in Lim Tua Tow Road - totalling $369 million have been completed since Aug 30. But at least five sites where tenders closed after that date have struck out with buyers. The five are Maison Royale in Surrey Road, Newton View, Selegie Centre, Amber Glades near Marine Parade and 13 shophouses in Owen Road. All are freehold developments. Experts said most of the owners are either negotiating private treaties or deciding whether to go for a second tender process. Jones Lang LaSalle's head of investments said the collective sale market has started picking up momentum. Collective sale sites going for under $100 million seem to be the one area where buyers - usually boutique developers - are still prepared to put their money down. This could be due to their more affordable prices and the relative ease of garnering the 80 per cent support level from owners compared with larger developments. Seven of the eight successful sales since Aug 30 involve smaller sites priced at less than $100 million. Bigger sites can be expected to hit the market next year, after the dust has settled from recent changes to en bloc rules, which have extended the sale process for some larger developments. Collective sale transactions have hit $975.6 million so far this year. And residential collective sales - at $883.6 million year-to-date - account for more than 90% of the total, with sales predominantly in upgrader locations such as Balestier and Toa Payoh in District 12, Geylang and Eunos in District 14 and Serangoon and Hougang in District 19. In contrast, there was only one successful collective sale last year - that of Dragon Mansion for $100.8 million. The rise in popularity of collective sales can be due to 'improving fundamentals of the Singapore property market and the widening gap between new sale and resale prices for residential property'.


- The Straits Times, B22

ERC snaps up Prime Centre for $103m
Hong Leong Group is understood to have sold freehold Prime Centre on Middle Road for $103 million or $1,415 psf based on existing net lettable area of about 72,800 sq ft. The 16-storey building is about half-vacant but that should suit buyer ERC Holdings group just fine as the private commercial school operator is said to be planning to renovate the property for use as an educational hub and hotel. The group's ERC Institute runs tourism and hospitality courses among its academic programmes. DTZ brokered the sale of Prime Centre through a private treaty deal. Market watchers say it makes more sense for ERC to renovate the existing 18-year-old office block rather than to tear it down and redevelop the site since Prime Centre's existing gross floor area of 94,657 sq ft reflects a plot ratio of 4.69 on its site area of 20,162 sq ft - exceeding the 4.2 plot ratio allowed for the site under Master Plan 2008. The site is zoned for commercial use. It has 73 car park lots. DTZ has also brokered the sale of nine Singapore industrial properties this year for a total of nearly $366 million to Sabana Investment Properties (SIP), which is expected to list the syariah-compliant Sabana Reit by year-end. About $4 billion worth of office investment sales is estimated to have been transacted so far this year.

- The Business Times, P1

Corporate earnings up 35% in Q3
Corporate earnings for the third quarter have swelled by some 35 per cent compared to a year earlier, boosted by better-than-expected earnings at the Singapore banks, based on the companies that have reported their earnings so far. By last Thursday, 94 companies listed on the Singapore Exchange had released their results for the three months to Sept 30. They recorded a combined $5.04 billion in net profit. Of these, 90 firms turned in profits, while four reported losses for the quarter. Among the profitable firms, half or 45 firms reported an increase in net profit in Q3 compared to a year earlier.

- The Business Times, P8

One-stop personal finance portal
Trying to find the best way to invest his money was the spark that prompted Mr Giora Kanner to start the personal finance portal MoneyLine.sg. Tired of going through several different websites to find out about the various financial products available, he decided to create 'a single point of reference'. Mr Kanner, MoneyLine.sg's chief executive, said other online financial portals in Singapore present only one to two products. But MoneyLine.sg will offer a wide variety of products - including home loans, credit cards and online investment platforms available here - from about 25 financial organisations. By the first half of next year, it aims to include insurance products as well. The portal, which starts operating today, allows consumers to specify the product traits they are searching for, then presents the most relevant products. MoneyLine.sg is aimed at Internet-savvy users aged between 30 and 45, who earn enough to make a financial decision.

- The Straits Times, B21

Indonesia - Twitter taking Indonesia by storm

Twitter usage in Indonesia has skyrocketed over the last two years. An estimated nine million people have accounts, going by Internet market research firm Comscore, which in August estimated that one in five Internet users in Indonesia uses Twitter. This puts Indonesia just behind the United States - and ahead of many developed countries - in terms of sheer user numbers. Unfettered freedom of expression in Indonesia and a growing number of smartphone users have aided Twitter's rise. About 65 per cent of the nation's population of 234 million own handsets, and many use them to surf the Internet.

- The Straits Times, P15

Exchange Rates (extracted from xe.com)

1.00 SGD	=	0.77 USD
1.00 SGD	=	5.17 CNY
1.00 SGD	=	2.40 MYR
1.00 SGD	=	0.48 GBP
1.00 SGD	=	863.40 KRW
1.00 SGD	=	34.16 INR
1.00 SGD	=	6,927.05 IDR

ST Index change: 3,264.04 (+23.73) *As at Mon 8 Nov 2010 09:28 AM
SIBOR (3 mths): 0.43889 (S$)

SWAP (3 mths): 0.25757 (S$)

Property Market Updates (6th November 2010)

Far East top bidder at Woodlands site

FEO has lodged the top offer in a six-way bidding battle for a Woodlands site. The firm tendered $105.1 million or $333 psf ppr for the 99-year leasehold plot at the junction of Woodlands Avenue 1 and Rosewood Drive. EL Development is the next highest on $100.9 million. BS Capital, Sim Lian Land, TID Residential and Ecco Development, with the lowest bid of $73 million, were also in the hunt. Far East is planning to develop a five-storey condo incorporating some townhouses on the site. CBRE Research executive director Li Hiaw Ho estimates that Far East’s bid price would translate to a likely breakeven cost of about $650-700 psf. ‘The project will likely be launched above $800 psf,’ he added. In the subsale market, units in the low-rise Rosewood Suites (under construction) were sold at $650-700 psf in the July-September period. In the secondary market, units in Woodgrove Condominium (also a low-rise project) changed hands at $560-675 psf while those in the Casablanca and Rosewood condo (these are mid-rise developments) were sold at $620-750 psf over the same period. The site is a stone’s throw from the Singapore Sports School and about 1km from the Singapore American School. It is also around 700m from Woodlands MRT Station.

Far East executive director (development and planning) Chng Kiong Huat said: ‘We envisage a five-storey condominium development that will incorporate some townhouses, designed to complement the low-rise set-up. Buyers will have a choice of one to four-bedroom units and townhouses which will come with private terraces, roof gardens and dedicated car park lots. ‘This is an area that Far East Organization is familiar with, having developed a number of successful themed residential projects there such as Casablanca and La Casa executive condominium as well as a collection of New England-style houses within Woodgrove Estate popular with American expats with children attending the Singapore American School next to it.’

- Mediasources

Small size, big draw

Small studio apartments might be a tight squeeze for some, but they have punched above their weight - and size - by achieving record prices, even in less glitzy areas outside the city centre.

These so-called shoebox apartments, typically less than 500 sq ft in size, first made their presence felt around 2006 in mainly prime districts. The Robertson Edge project off Mohamed Sultan Road is one example. But the trend has since spread to regions outside the central area.

In fact, a 474 sq ft apartment at The Scala, near Lorong Chuan MRT station, was sold for $1,522 psf - or about $720,000 - in August, according to caveats lodged with the URA. Experts said this was likely to be a benchmark price set for a 99-year leasehold project outside the central region. Another two similarly sized apartments sold for $1,467 psf and $1,437 psf last month. Other apartments which have fetched high prices include a 484 sq ft unit at 99-year leasehold project Optima@Tanah Merah, which sold for $1,280 psf, or $620,000, in September. A 420 sq ft unit at Siglap V - also outside the central area - transacted at $1,584 psf, or $665,000, in August, while a 409 sq ft unit at Suites@Changi sold for $1,379 psf, or $564,000, in September. Both projects, however, are freehold.

Experts said buyers are drawn to the more affordable investment prices of shoebox units, compared with those of family-sized homes. The rising prices of Housing Board flats might also have nudged some to buy private properties at comparable prices instead. The success of earlier shoebox developments, which have enjoyed capital gains in line with the market and higher rental yields, has also fed the trend, they added.

A CB Richard Ellis report last month said about 10 residential projects featuring predominantly small-format units will be launched in the next few months. With the exception of one, all the sites are in suburban areas like Telok Kurau, Siglap and Eunos. 'Buyers of shoebox units are mixed in profile, but are usually singles or couples without kids, who do consider renting out the units... although the majority do not mind using them for owner occupation should there be limitations in finding the right tenants,' added Mr Ong.,Shoebox units also achieve slightly better rental yields than larger units because of their lower prices. Robertson Edge, for example, fetches a rental yield of 6.6%, while the average yield for a centrally located condominium is 3% to 4%, he said.

- The Straits Times, B16

Local firm wins global high-rise prize

Home-grown architectural firm Woha's Bangkok condominium tower, the 230m The Met, is proving a towering success in more ways than one. It has just won The International Highrise Award (IHA) 2010 - the first time that the biennial prize has been won by a local firm. The US$132-million (S$170-million) building beat a top line-up of four other finalists: the 828m Burj Khalifa in Dubai; the 492m Shanghai World Financial Center; the 262m Aqua Tower in Chicago; and Tokyo's Mode Gakuen Cocoon Tower, which stands at 203m. The finalists were selected from 27 worldwide entries. A feature of The Met is that its apartments have been designed for residents to go without air-conditioning if they wish, thanks to its clever cross- ventilation. The 370-unit structure, completed in 2009, has greenery on all its 66 storeys. Balconies have private planters. The IHA is given to a building that stands out for its special aesthetics, pioneering design, integration into its urban context, sustainability, innovative technology and cost-effectiveness.

- The Straits Times, D10

Singapore's private bankers ride the Asian wealth wave

Since the start of the year, UBS Wealth Management has hired close to 400 new people in the region, including 150 private bankers. In the medium term, it is looking to grow the number of private bankers in the Asia-Pacific to 1,200 from the current 900. 'One of the key trends that we are witnessing is how Asia-Pacific remains a key area of focus for the wealth management industry globally,' said Christine Ong, chief executive of UBS Wealth Management in Singapore.

Barclays Wealth, the wealth management and private banking division of Barclays Bank PLC, is doubling its spending on people and technology investments to 700 million pounds (S$1.46 billion) for 2010-2012. Typically, the bank spends about 350 million pounds over three years on the area. A chunk of this investment will go to expanding its operations in Asia, where it wants to double its number of private bankers and quadruple assets under management (AUM) in Asia over the next four years. According to the Capgemini World Wealth Report 2010, the Asia-Pacific's population of high net worth individuals grew 25.8% to some three million last year. Their fortunes have also increased, surging some 30.9% to US$9.7 trillion in 2009, surging past Europe's for the first time.

UOB Private Banking is looking at a 20-25% growth in staff strength 'over the next few years' to support the growing number of high net worth individuals from Singapore and Asia, said Wilson Aw, UOB private banking head.

Citi's private bank is looking to double its headcount in China and hire up to half as many bankers in India. Earlier this year, it said that it will hire some 40 people this year across the Asia-Pacific - based mainly in Singapore and Hong Kong - to serve clients in the region. It now has US$165 billion in AUM in Asia. Globally, it has hired over 100 managing directors and directors, and expects to hire another 300 bankers over the next three years.

The Standard Chartered Private Bank has increased its number of private bankers by 15% year on year in Singapore in the first six months of the year - which saw AUM grow by 15%. The bank now expects full-year growth to be between 20 and 25%. It also expanded its operations in India, where it opened its fifth private banking office earlier this year.

- The Business Times, P4

Condo rentals rising more slowly

Rents for non-landed properties such as condominiums are rising at a slower pace. Latest data from the URA showed such rentals rose just 3.6% in the third quarter, compared to 6% in the preceding quarter and 4.8% in the first quarter. Property analysts said the downward trend indicates that the market has reached a sustainable level and the growth is in tandem with the capital values of property, which have seen slower rates of increase as well. Property prices have stabilised due to the recent cooling measures by the Government. Still, a robust economy that is expected to bring in more foreign workers will likely buoy the rental property market, analysts said. Already demand for rental properties has been growing. Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said the number of rental contracts increased 5% per month for the first nine months of this year. "The proportion of owner-occupier purchases has come down significantly, so the supply of rental units is actually greater. When supply is higher relative to demand, rentals decline or show a slower pace of increase," he said. For the next year, analysts expect rentals to continue to rise steadily at about 2 to 3% quarterly. "The bulk of supply that we are seeing in mass and mid-end markets will be completed in 2013. That will be 22,000 units coming on board. The market may soften then but rental recovery will be strong for the next 24 months," said Mr Han.

- Today

S'pore firms keep eye on impact of China rate hike

'The rise in interest rates in China will surely increase our financing costs in future. We are still taking a close watch on the situation,' said Joel Leong, chief financial officer (CFO) at Changjiang Fertilizer. 'However, if borrowing costs are too high, we may consider share placement or warrants issuance as another option,' he added. Meanwhile, property developers that BT spoke to - namely, CapitaLand and Yanlord - are still optimistic about China's property market and their operations there. DMG said in its report that CapitaLand could face a bigger fallout than its peers from the policy risks in the Chinese property market as 35% of its revised net asset value comes from China. A CapitaLand spokeswoman later told BT that higher interest rates in China will have an insignificant impact on the group's business. 'Our portfolio is balanced. We are not only in residential development, but also in office buildings, shopping malls, serviced residences, and mixed developments like the ones under our Raffles City brand,' she said. Yanlord's spokeswoman noted that 'demand is still sufficient compared to supply'. The 25 basis-point hike in interest rates is expected to translate to added costs of $2.3 million per annum for a group, which generated $325.4 million of profits last year. While the actual impact of China's rates move can only be ascertained when companies' fourth-quarter results are out, businesses operating in China seem to have grown accustomed to policy changes. Prior to the rate hike, provinces and cities throughout the country have raised their minimum wage levels this year, stung by labour shortages and increased worker unrest. As Mr Koh of Fuxing puts it: 'Policy risks always exist in China. Our business operations just have to factor in such unexpected changes.'

- The Business Times, P2

Indonesia's Q3 growth comes in below forecast at 5.82%

Indonesia's economy grew a lower-than-expected 5.82% n the third quarter from a year earlier, data showed yesterday, surprising economists who had forecast growth of around 6.2%. Of the 13 economists polled by Reuters, none had forecast third-quarter GDP growth of below 6.1%. The central bank had forecast growth of 6.3% in the quarter. 'That is really low,' said Helmi Arman, economist at Bank Danamon in Jakarta. 'The risk to achieving the 6.1% figure for full-year growth is definitely to the downside now.' Quarter-on-quarter GDP growth was 3.45%, Slamet Sutomo, deputy at the country's statistics bureau told a news conference. Analysts said the data made it even more likely that the central bank will keep its policy rate on hold at 6.5% well into 2011.

- The Business Times, P15

Exchange Rates (extracted from xe.com)

1.00 SGD	=	0.779 USD
1.00 SGD	=	5.198 CNY
1.00 SGD	=	2.401 MYR
1.00 SGD	=	0.481 GBP
1.00 SGD	=	862.812 KRW
1.00 SGD	=	34.623 INR
1.00 SGD	=	6,883.49 IDR

ST Index change: 3,240.31 (+15.34) *As at Thu 4 Nov 2010 05:10 PM
SIBOR (3 mths): 0.43889 (S$)

SWAP (3 mths): 0.24726 (S$)

Property Market Updates (3rd November 2010)

Far East plans $100m project at Ten Mile Junction site

Far East Organization is planning to build a $100 million development, comprising 338 small office-home office (SoHo) units and 121,000 sq ft of retail space, at the Ten Mile Junction site it won in a government land tender earlier this year. The developer in February paid $164 million or $437 per sq ft per plot ratio (psf ppr) for the 99-year leasehold site at the junction of Choa Chu Kang and Woodlands roads, which now houses the Ten Mile Junction shopping mall. Far East said it plans to build a residential project with 338 SoHo units and also retrofit the existing retail space to create a new mall called Junction 10. The SoHo project will be called The Tennery and will be launched in the first quarter of 2011. Far East said that more details on The Tennery will be released later this year. In the meantime, the developer has started marketing the retail space in Junction 10. It will spend some $28 million to retrofit existing space to create a 'rail lifestyle' concept. 'The railway history of the area dates as far back as the British colonial era. And with Junction 10's history as a railway junction, it has inspired us to bring to life some aspects of the railway into the mall,' said Chng Kiong Huat, Far East's executive director for development & planning. Supermarket chain Giant has taken up more than 30 per cent of the space at the mall to set up a hypermarket.

- The Business Times, P12

- Also quoted in The Straits Time, B21, “Ten Mile Junction's rail-themed facelift”.



DBSS site at Bedok Reservoir draws six bids

The tender for a land parcel at Bedok Reservoir Crescent, slated for public housing, closed yesterday with six bids received. CEL Development came out tops with a bid of $112.6 million, or $224.3 per sq ft per plot ratio (psf ppr) for the site, which could yield 430 homes under the Design, Build and Sell Scheme (DBSS). Analysts said the top bid was more subdued than bids in the past. The site is located about 10 minutes' walk from Bedok Town Park MRT station, which is expected to be completed in 2017. The top bid could translate to a break-even cost of about $430-$470 psf. The bids varied across a narrower range, compared to the previous tender for a DBSS site at Tampines Avenue 5/Central 8, where the top bid was $261 psf ppr.

- The Straits Times, B4

- Also quoted in The Business Time, P10, “Chip Eng Seng tops bid for DBSS site in Bedok”.



Weeding out rogue property agents

It will take a few years before new rules aimed at weeding out rogue property agents drive down the number of complaints, the Consumers Association of Singapore (Case) said yesterday. Case director Seah Seng Choon made the prediction as it emerged that property agents are among the 10 most-complained-about professions here. A code of conduct for the industry is being enforced by a new statutory body, the Council for Estate Agencies (CEA). The CEA has the authority to fine, suspend or revoke the licences of property agents who break the rules. From Jan 1, only CEA-registered agents will be allowed to work. The new code bans agents from representing both buyer and seller, or referring clients to moneylenders. They must also have a system for handling complaints and follow advertising guidelines.

- The Straits Times, P4



Behind those gyrating home supply estimates

A recent presentation on the estimated supply of private housing units in the pipeline has reignited the debate about the accuracy of official estimates. The presentation - by real estate firm International Property Advisor (IPA) - highlighted the fact that the number of private homes that are projected to be completed each year has fluctuated broadly over time. The URA compiles the number on a quarterly basis. URA said the estimated supply of private housing units in the pipeline is computed based on the expected completion dates of projects with planning approval (either provisional permission or written permission), which is obtained through URA's quarterly survey of developers. Analysts said that what is cause for concern now is that there are no pipeline figures for 2011 and 2012 that can be taken to be reasonably accurate - at a time when the sentiment in the real estate market is uncertain and more government measures to cool the property market could be on the horizon. The Ministry of National Development (MND) takes into consideration the pipeline supply when it plans its half-yearly government land sales (GLS) programme. Market consensus is that as the end of 2010 approaches, Singapore can expect another climb in the number of expected completions for both 2011 and 2012. The estimated supply of private homes due to be completed in 2011 has already fluctuated greatly since end-2006. In Q4 2006, URA said 5,876 new private homes would be completed in 2011. The estimate rose to 20,492 in Q1 2008 before dropping sharply to 9,196 in Q4 2009. In Q3 this year, an estimated 6,766 homes were expected to be completed in 2011.

- The Business Times, P1



Govt keeping a close eye on property market

Prime Minister Lee Hsien Loong said that the Government is keeping a close eye on the property market to avert the formation of an asset bubble. Recent measures to cool the market have dampened sentiment, but liquidity is awash in the region. The latest Government measures to stem overheating include reducing the maximum loan for buying a second residential property, imposing stamp duty on owners who sell properties within three years of buying them and tighter restrictions on those buying HDB resale flats. As for Singapore's future, Mr Lee said it could define itself as one of the world's most attractive global financial centres with a less reactive approach to currently emotional issues like regulation.

- The Straits Times, P3

- Also quoted in The Business Time, P2, “Govt keeps careful watch on property market: PM”.



Consumer confidence still positive: Nielsen survey

Consumer confidence here has remained 'unwavering' and 'positive' as compared to the last quarter, according to the Nielsen Global Consumer Confidence Index. The marginal increase of the index from 112 to 113 this time round could indicate consumers are confident on continued economic recovery. On Singaporeans' personal finances, the majority (72 %) felt that they were in good or excellent states. About 50% felt that now is the right time to buy things they want. The global average was 35%.

- The Business Times, P11