Bumper prices fetched by HDB flats fuel condo demand

Bumper prices fetched by HDB flats fuel condo demand


High cash over valuation provides ‘filter-up’ demand for private homes




(SINGAPORE) More Housing Development Board flats in prime locations are now being sold for more than half-a-million dollars each, and the trend is pushing up the asking prices for mass market condominiums and adding to demand for entry-level private homes.


Data compiled by property firm ERA showed that 269 HDB flats were sold for $500,000 or more in the fourth quarter of 2007 – a 69 per cent increase over the 159 flats sold for more than $500,000 each in the previous quarter.


While most of such flats in the fourth quarter of 2007 went for between $500,000 and $599,999, 50 were sold at $600,000 to $699,999.


And 12 changed hands at $700,000 or higher.


Anecdotal evidence also suggests that larger HDB flats in Singapore’s central locations are fetching more money than before.


For instance, a 21st-storey executive flat along Mei Ling Street in Queenstown sold for a record $890,000 earlier this month.


Last November, another executive flat along the same street went for a then-record $780,000.


The sellers of such flats will now have the capacity to buy entry-level private homes, said ERA assistant vice-president Eugene Lim.


New homeowners could also look at private homes for their first property purchases, rather than at resale HDB flats in the more central parts of Singapore.


‘HDB flats provide the support for entry-level types of private housing,’ said Mr Lim.


‘If HDB prices keep moving up, people will begin to look at private properties.’


CB Richard Ellis executive director Joseph Tan pointed out that the recent surge in HDB prices has narrowed the price gap between public housing and private homes.


Many of the pricier flats are being sold for high amounts of cash-over-valuation (COV), which means that sellers will have cash on hand to make the downpayment when they purchase private properties.


‘The HDB sellers now have greater purchasing power, especially with the high COVs, which can be used for downpayments on private properties,’ said Nicholas Mak, director of research and consultancy at Knight Frank.


HDB statistics show that the median COV for executive flats in Bukit Timah rose to $137,500 in the third quarter of 2007.


In Marine Parade, the COV for five-room flats hit $84,000 in the same quarter.


The massive growth in COV for larger flats in central districts can largely be attributed to homeowners that have sold their properties through en bloc sales and are now moving into HDB flats.


But the reverse also applies now, analysts said. Sellers of these flats are starting to upgrade to mass market private homes with spare money fetched from the high COVs of their old flats.


Property agents told BT that sellers of HDB flats with cash on hand are looking mostly at mass market condominiums in the resale market as they need replacement properties to move into.


New mass market homes, by contrast, are not as popular.


But eventually, this ‘filter-up’ demand will cause mass market property prices to climb, analysts said, which could once again put private homes out of reach of HDB upgraders.


Property agents also report that sellers of mass market private homes are upping their asking prices as they see HDB prices in prime locations head skywards.


‘Sellers are seeing five-room and executive HDB flats fetching $700,000,’ said one property agent.


‘So they think, I can ask for $1 million for my four-room private home.’


The agent said that at least two sellers of mass market homes that he is representing have recently upped their asking prices, even though the new prices are not ‘realistic’, in his opinion.


Knight Frank’s Mr Mak agreed. ‘Word gets around that HDB prices are going up, and quite quickly, sellers (of mass market private homes) start upping their asking prices.’


Source: Business Times

Resorts World to build new $80m bridge to Sentosa

Resorts World to build new $80m bridge to Sentosa


RESORTS World at Sentosa (RWS) yesterday announced the award of a $80 million contract to Australian-based engineering and construction company McConnell Dowell to build a new vehicular bridge to Sentosa.


Work on the bridge begins this week and is expected to be completed by end-September 2009.


The 710-metre three-lane bridge will connect Singapore to Sentosa and provide visitors with a smooth and convenient entry into Sentosa and RWS. It will be built parallel to the present four-lane Sentosa bridge. When the new link is completed, the two bridges will be merged.


RWS anticipates 15 million visitors calling on its $5.2 billion resort when it opens in early 2010. ‘This is the first vehicular bridge infrastructure of this scale built by a private developer in Singapore,’ said RWS’s senior director of projects Michael Chin. ‘We are committed to provide our visitors with a once-in-a-lifetime holiday experience, and that includes hassle-free access to the resort,’ he added.


According to Sentosa Leisure Group executive director for special projects, planning and development Low Tien Sio, the new link is ‘set to take on up to four times more traffic when it opens . . . and will not only facilitate travel to RWS, but also drive traffic smoothly to Sentosa’s popular destinations and give our Cove residents a welcome ride home’.


To help ease congestion near the Telok Blangah junction, the existing admission booths to Sentosa will be relocated on the island along Gateway Avenue and by April, Gateway Avenue will be diverted to make way for the development of RWS.


From the vehicular bridge, drivers will then travel along Gateway Avenue, before the road fans out into seven lanes to expedite island admission.


Source: Business Times

79 Anson Rd stake sold for 3rd time in 2 years

79 Anson Rd stake sold for 3rd time in 2 years


SEB Asian Property Fund pays $215m for 55% stake




TRADING office buildings continues to be flavour of the month in the real estate market. A 55 per cent stake in the freehold 79 Anson Road has changed hands for the third time in about two years. The latest deal involves a fund managed by Ferrell Asset Management selling the space to an SEB Asset Management fund for $215 million.


Ferrell’s fund, FAM Maximilian Real Estate Investment Fund, last year bought the space – spread over 12 floors of the 23-storey building, for $149 million from two parties, at least one of which is linked to the Lippo group.


Pramerica Asia had sold the property to Lippo entities for over $90 million in early 2006.


The latest acquisition, by SEB Asian Property Fund SICAV-FIS, for $215 million works out to about $1,937 per square foot based on a lettable area of 110,976 sq ft.


The fund, which was launched in late-August last year, invests in Asia only. The plan is to develop a broad-based portfolio, primarily in China, Japan, South Korea and Singapore, over the coming months.


This is not the German group’s first acquisition in the Singapore office sector. It made at least two purchases last year.


In September, SEB bought 12 floors at Springleaf Tower nearby for $2,088 psf of net lettable area. And a few months before that, in April, the group bought SIA Building for about $526 million or $1,783 psf from TSO Investment, a fully owned subsidiary of a property fund managed by CLSA Capital Partners.


TSO had purchased the office block from Singapore Airlines in June 2006 for $343.88 million, or about $1,165 psf.


A Ferrell-SEB joint release yesterday said the space transacted at 79 Anson Road is currently about 98 per cent occupied. Major tenants include Kellogg Brown & Root, Mitsubishi Chemicals, interTouch and Infor Global Solutions.


Ferrell Group managing director David Lee said the group will keep searching for development and investment opportunities in the commercial property sector.


SEB Immobilien-Investment managing director Choy-Soon Chua said the group expects to capitalise on the ‘extremely positive growth prospects’ in the Singapore office sector due to rising demand and limited supply.


The remaining 45 per cent of 79 Anson Road is owned by the Central Provident Fund Board.


Source: Business Times

Lippo-linked fund sells Anson 79 stake



Lippo-linked fund sells Anson 79 stake


A REAL estate fund linked to Indonesia’s Lippo Group has sold its stake in an Anson Road office block – achieving a 139 per cent gain in just two years.


Ferrell Asset Management said yesterday it sold the 12 floors it owned at Anson 79 for $215 million – more than double the $90 million it originally paid in January 2006.


The buyer is SEB Asset Management, part of German pension fund manager SEB. It bought 12 floors of office space in nearby Springleaf Tower in October.


SEB’s purchase price for the 117,423 sq ft of freehold office space at Anson 79 worked out to $1,831 per sq ft (psf) of strata area. This was slightly lower than the $2,088 psf of net lettable area the company paid for the 99-year leasehold Springleaf Tower.


One reason is that Springleaf Tower is a newer development that commands higher rents, according to market experts. ‘No doubt, Anson 79 is freehold, but it is an older building that was completed in 1992,’ said one expert.


Asking rents were $10.50 psf in September at the now fully-occupied Springleaf Tower. At Anson 79, average rents stand at $5 psf due to locked-in leases, but the latest rent achieved there is $9.50 psf.


Property consultants estimate SEB’s entry yield at Anson 79 to be about 2.5 per cent to 3 per cent. The sale agreement was struck in September but completed only last week.




Source: Straits Times

Five million more unemployed expected this year

Five million more unemployed expected this year


Grim global outlook is offset by strong growth in regions like Asia though: ILO


GENEVA – FIVE million more people risk being made unemployed this year as the global economy struggles with the US sub-prime crisis and rising oil prices, the International Labour Organisation (ILO) said.


‘This year’s global jobs picture is one of contrasts and uncertainty,’ said ILO director-general Juan Somavia in a statement on Wednesday.


‘While global growth is annually producing millions of new jobs, unemployment remains unacceptably high and may go to levels not seen before this year,’ he added.


The gloomy outlook is in contrast to the previous year, hailed by the ILO as a ‘watershed’ with 45 million new jobs created and only a slight rise in unemployment, which stood at 189.9 million people at the end of last year.


The ILO said in its Global Employment Trends report for 2008 that the worldwide jobless rate is set to increase to 6.1 per cent from 6 per cent the previous year.


Economist Dorothea Schmidt told journalists that five million fewer jobs are expected to be created in the year ahead.


But the organisation’s employment director, Mr Jose Salazar-Xirinachs, conceded that these forecasts will have to be further revised after recent market turmoil wiped billions of dollars off stock exchanges, further stoking fears of a global recession.


The ILO noted that, to date, the slowdown in industrialised countries due to the credit crunch and soaring oil prices has been offset by strong growth in developing economies, especially in Asia.


‘Probably, for the first time ever, it can be seen that turbulence in one region (developed countries and the European Union, and upfront the United States) may not necessarily impact on other regions to the extent that a global slowdown is caused,’ the report said.


Jobs growth in the developed countries rose 2.5 per cent last year, less than the year before, partly as a result of turbulence stemming from a US housing market crisis, the ILO said. ‘The outlook for the coming years is not as positive,’ the report concluded.


In contrast, South Asia, dominated by India, was the world leader in employment growth last year, contributing 28 per cent of the jobs created worldwide. But it also had the highest share of ‘vulnerable employment’ as a result of poor-quality jobs created, and few women in the region are employed.


East Asia, with China as the driver, accounted for 16 per cent of the jobs created worldwide last year.


The Middle East and North Africa continued to have the highest unemployment rates at 11.8 per cent and 10.9 per cent, respectively.


The ILO urged governments to place labour market policies at the heart of macroeconomic strategy to ensure that growth translates into new jobs.


‘The current economic situation is, therefore, cause for significant concern, and the ILO will monitor developments closely over the coming year,’ Mr Somavia said.




Source: Straits Times

Work on new Sentosa bridge begins

Work on new Sentosa bridge begins


WORK started yesterday on a new bridge linking Sentosa to the mainland.


Developer of the island’s casino resort, Resorts World at Sentosa (RWS) said that the new vehicular bridge will ease traffic for the anticipated 15 million visitors expected at the resort when it opens in early 2010.


The three-lane 710m bridge will be built parallel to the current Sentosa bridge, which currently has four lanes. When completed, the two bridges will be merged. Lanes and traffic directions are being finalised.


RWS awarded the bridge building contract, worth more than $80 million, to McConnell Dowell, an Australian-based engineering and construction company.


The work involves widening lanes at the Harbourfront end of the current Causeway, and the construction of the parallel new bridge from Sentosa.


McConnell Dowell’s project director, Mr David Christodoulou said: ‘The marrying of the structures into one cohesive roadway is the precise reason why this project is so exciting.’


To help alleviate congestion near the Telok Blangah junction, the existing admission booths will be relocated within the island along Gateway Avenue by Sentosa Leisure Group.


By April, Gateway Avenue will be diverted to make way for the development of RWS. From the vehicular bridge, drivers will then coast along Gateway Avenue, before the road fans out into seven lanes to expedite island admission.


Sentosa Leisure Group’s Executive Director for Special Projects, Planning & Development, Low Tien Sio, added: ‘Set to take on up to four times more traffic when it opens, the new vehicular bridge will not only facilitate travel to RWS, but also drive traffic smoothly to Sentosa’s popular destinations and give our Cove residents a welcome ride home.’


Source: Straits Times