‘Sharp slowdown in US economy likely’

‘Sharp slowdown in US economy likely’

 

Monday • January 28, 2008

 

Mr Vasu Menon, chief editor of Finatiq and editor of Securities Investors Association Singapore (Sias) E-Newsletter and Publications, commented on the market turmoil on the recent Sias Heart Talk programme.

 

ON THE SUB-PRIME CRISIS

 

“Markets will continue to be worried about a US recession, so, investors will be keeping a very close eye on US economic data. I think the sub-prime writedowns could escalate – if you look at adjustable rate mortgages in the US, most of the rate resets will only take place in March. The delinquency rate is running at about 16 per cent. It could increase and result in further sub-prime writedowns. Subtle indications from CEOs of some major institutions are that there will be more writedowns because, I think, default rates are going up.”

 

ON A POSSIBLE US RECESSION

 

“Some of the risks that the market is fearful of are actually quite real. The employment numbers in the US fell off the cliff. December non-farm payroll employment came in only at 18,000. The Philly Index went into minus 20 territory – the last time this happened, the US slipped into recession. Given that they had almost a hundred billion in sub-prime writedowns, there must be some impact on lending activity. There are no clear signs of a recession just yet, but a sharp slowdown seems to be clearly on the cards.”  

 

Source: Today Newspaper

Seafront living at Woodlands

Seafront living at Woodlands

 

Monday • January 28, 2008

 

— Channel NewsAsia

 

Come 2010, Woodlands residents can enjoy seafront recreational amenities right at their doorsteps.

 

The Urban Redevelopment Authority (URA) has unveiled a $19-million design plan to build a coastal promenade and park in their neighbourhood.

 

Woodlands will certainly live up to its name with URA’s “Woodlands Waterfront” proposal, where more lush greenery, trees and woods will be planted.

 

A nine-hectare park will be created from vacant land along the coastline, featuring playgrounds, picnic areas and nature trails.

 

Next to the park is a 1.5-km-long promenade that will offer unobstructed views of the Johor Straits. To allow visitors to be closer to the water, an old jetty connected to the park will be refurbished as well.

 

On why the waterfront idea was mooted, project head Wan Khin Wai said: “You’ll find that Woodlands is one of the towns that is located along the coastline.

 

“However, if you’re inside Woodlands, you can’t appreciate the coastline. So, this project offers residents the chance to get to the coastline and have recreational activities there.”

 

The Woodlands Waterfront proposal is part of URA’s overall vision to raise the standard of living here, said director for conservation and urban design Ler Seng Ann.

 

“Singapore is an island, surrounded by water on all sides. The waterfront is an important asset. So, in the planning of parks and water bodies, we have capitalised on these so that we can generate recreation space for Singaporeans to enjoy.”

 

One Woodlands resident, Mrs Chow, is looking forward to the new amenities. “The plan is very good because we don’t have any of these features in our area.”

 

Construction of the Woodlands Waterfront will begin by the middle of this year and is expected to be completed by the middle of 2010.

 

The Woodlands Waterfront is also something Dr Tony Tan, an ex-MP of the area, will definitely look forward to.

 

“It has been one of his (Dr Tan’s) dreams for Sembawang,” revealed Health Minister and MP for Sembawang GRC Khaw Boon Wan, who was at the launch on Saturday.  

 

Source: Today Newspaper

Rising inflation a worry for S’pore

Rising inflation a worry for S’pore

 

WHILE fears of a US recession loom large, Tony Tan’s larger concern is if the downturn drags beyond the first six months of 2008 into the second half.

 

But the ‘biggest worry to the world economy’, he said, is inflation.

 

‘I myself do not believe that if the US runs into a deep recession, the rest of the world will be unaffected,’ he told Singapore reporters in Davos.

 

He added that he was worried, not so much about the first half of the year as the second half. ‘That’s the real test.’

 

‘Even if there’s a recession, if the rescue measures taken by the US government and the Federal Reserve succeed in stabilising the economy and recovery gets underway in the second or third quarter, then basically it’s normal adjustments,’ he said.

 

‘We have had three, four very good years when markets were rising, economies were expanding, credit was widely available, so every fund manager did very well, including GIC. We all looked like geniuses. It’s easy to do well in a rising market, not so easy to do well in a choppy market or in a downturn.

 

‘I would worry a great deal if the recession continues into the second half of this year. If that’s the case, then we’re in a different situation and we may face difficult times, not for a few months but maybe one or two years.

 

‘That’s why we’ve structured the UBS and Citigroup investments so that if this happens, we will still be well protected. But my overall worry for 2008, even more than this economic recession, is inflation. Oil prices are high, food prices are going up, we’ve already felt the effects in Singapore.’

 

A return of high inflation would have a serious impact on the US and other economies, and ultimately on Singapore, he said.

 

Already, Singapore has had to offset rising prices with a faster appreciation of the Singapore dollar, he said. ‘If oil is at about $80, $90, $100 (a barrel), it remains a very serious concern. And you can see the price of gold, it’s reached a record level. That’s always a good indication about how analysts, market participants out there, view how likely inflation will come back, because gold is a classic hedge against inflation.’

 

Source: Business Times

Changi park shaping up as financial backroom hub

Changi park shaping up as financial backroom hub

 

URA studying plans for Changi Business Park as part of 2008 Master Plan Review

 

By ARTHUR SIM

 

(SINGAPORE) OCBC could soon follow Credit Suisse, Citibank and DBS to Changi Business Park to form a growing alternative financial hub there. And with prime land going for about $60 psf and rentals at between just $4-$5 psf per month, it does seem to make sense.

 

In response to a query by BT, OCBC head of operations (group operations and technology division) Eugene Sng said: ‘We are currently assessing the feasibility of Changi Business Park as an alternative location to house our operations units.’

 

A-Reit has also revealed that Credit Suisse has committed to take up about a quarter of its new 200,000 sq ft HansaPoint@CBP building, scheduled to get its TOP (temporary occupation permit) in February.

 

A-Reit is already developing a built-to-suit building for Citibank and Tan Ser Ping, CEO of the reit manager said: ‘A-Reit continuously evaluates all potential investment opportunities, both in acquisitions and developments. The outlook for properties in the business and science parks and hi-tech industrial sector is especially strong.’

 

While business parks are still categorised as industrial space, where at least 60 per cent of the space must be an approved ‘predominant activity’ like R&D, a check with JTC’s website reveals that financial backroom operations now constitutes an approved predominant activity.

 

The Urban Redevelopment Authority does appear to have new plans for CBP. In response to a BT query, URA said: ‘We are studying the plans for the area as part of our Master Plan 2008 Review. More details will be made available later this year.’

 

CBP is a 66.54 ha business park which currently comprises about 61 development plots. A JTC spokesman said that about 50 per cent has already been allocated. Depending on location and plot ratio, the 30-year leasehold land is leased for about $28.50 to $57 psf.

 

JTC said that land rents are revised quarterly with a 5.5 per cent annual adjustment escalation cap over the preceding year’s rent.

 

And unlike the Government Land Sales programme, there is no public tender for business park sites and prices are fixed. JTC added: ‘All the land plots in CBP are prepared land which can be allocated immediately to companies that can meet our criteria.’

 

Not surprising then, Cushman & Wakefield (C&W) managing director Donald Han expects that between two to five more sites at CBP could be allocated this year. Already, Mr Han reveals that C&W has three clients looking for possible sites for built-to-suit buildings. Two are from the financial sector.

 

One of the advantages of built-to-suit premises in a business park is that the potential tenant can specify its own needs. ‘As land cost is less, you could have bigger workstations or provide special amenities like a gym and childcare facilities for your staff,’ he said.

 

And for developers, attractive yields of between 5-7 per cent are achievable, added Mr Han, although only JTC approved developers need apply.

 

The demand for such alternative space was brought about by the severe space crunch in the city. While this may be remedied by a new surge of supply coming onstream around 2010, Colliers International director (industrial) Tan Boon Leong believes that as long as rents remain ‘competitive’, business park space will remain a viable option.

 

He added: ‘Based on a lease period of 10 years, the developer could recoup 70-80 per cent of its initial investment from its tenant. If the tenant then chooses to move out, the developer can then afford to lease the space out at a lower rent. It’s a win win for both developer and tenant.’

 

Mr Tan does not, however, expect CBP to be a dedicated backroom for the financial sector. Business environments change and he noted: ‘CBP was originally targeted for the aerospace sector.’

 

Savills Singapore director of commercial services June Chua added that alternative sites in the Alexandra area are also popular. At Comtech, where Deutsche Bank, HSBC and American Express have taken space, rents are equally competitive at around $4.50 psf per month.

 

Competition for tenants should also increase as Ms Chua expects more industrial grade buildings to be retrofitted and made available for backroom offices as office rents rise.

 

On the future of the central business district (CBD), Ms Chua believes there will always be businesses who cannot afford to be out of the CBD, despite high rents. ‘They may however, be more selective in the future, when more space becomes available,’ she said.

 

Source: Business Times

WE’RE DOWN BUT NOT OUT

WE’RE DOWN BUT NOT OUT

 

EVEN during his retirement, he is making quite a substantial amount of money by dabbling in property. At one stage last year, Richard, a retired businessman in his 60s, owned seven posh condominium units in prime districts.

 

By Joyce Lim

 

 

28 January 2008

 

EVEN during his retirement, he is making quite a substantial amount of money by dabbling in property.

 

At one stage last year, Richard, a retired businessman in his 60s, owned seven posh condominium units in prime districts.

 

As property prices shot up, he sold off half of his property assets and made a profit of close to $1 million within six months.

 

He then channelled his windfall into shares and bought a new property, hoping to make more quick profits.

 

Unfortunately for him, the property market started to slow down after he put down his cheque of $50,000 to secure a brand new three-bedroom apartment in the west.

 

Said Richard, who wants to keep a low profile and spoke on condition of anonymity: ‘I was hoping to make a quick profit by selling the property within a few months. Many people were queuing up for a unit and thought I could sell it to those who didn’t manage to get one.’

 

SLOWING DOWN

 

But before Richard could start marketing his new apartment, the property market started to slow down.

 

He said: ‘The property market is interlinked with the stock market. When it’s hot, people rush in to buy, all wanting a share of the pie.

 

‘But once something looks not quite right, these people also rush to sell off whatever they have. In the case of property, they stop buying.

 

‘These people see that share prices are dropping, so they think that property prices will also drop.’

 

Afraid that he would suffer bigger losses later, Richard decided to withdraw from the purchase of the new condominium unit and forfeit 25 per cent of his deposit.

 

That came to about $12,500.

 

He still owns four freehold apartments.

 

NO RUSH

 

Another retiree, who wanted to be known only as Mr Wong, does not feel the need to rush to sell off his properties.

 

The 60-year-old, who invested mostly in apartments in the east, said: ‘I believe that Singapore will continue to experience steady growth. We have our integrated resorts and F1 race to look forward to.

 

‘Also we are well-prepared this time, even if recession is to hit the US.’

 

Mr Wong also suffered losses in the stock market recently, but he declined to reveal his losses.

 

He said: ‘I am a conservative investor who does not gamble with money that I don’t already have. So I am still fine.’  

 

Source: The New Paper

PROPERTY’S STILL HOT IN S’PORE

REAL ESTATE VETERAN SAYS OF COOLING MARKET:

 

PROPERTY’S STILL HOT IN S’PORE

 

Her view: Upgraders and enbloc sales will keep demand up

 

WHILE most people her age would be blissfully retired, Madam Marlena Chong, a 70-year-old grandmother, is still working, aggressively.

 

By Elysa Chen

 

 

28 January 2008

 

WHILE most people her age would be blissfully retired, Madam Marlena Chong, a 70-year-old grandmother, is still working, aggressively.

 

And her work involves millions of dollars.

 

She is an active player in Singapore’s property market, as she has been since she was in her 20s.

 

One of her friends even calls her ‘Queen of Leedon Park’ for owning four bungalows there.

 

They occupy an area of around 100,000 sq ft.

 

She also has investments in Australia and Malaysia, and is developing a condominium project in China.

 

Having invested in property locally and regionally for more than 40 years, Madam Chong has seen her share of people going bankrupt over the last three property cycles.

 

BRIGHT OUTLOOK

 

Despite the gloom cast by threats of recession in the US and the battering that Asian stock markets took over the last week, Madam Chong retains her ‘bright outlook for the Singapore property market’.

 

Madam Chong, who recently bought a freehold luxury apartment at Scotts Square for $3 million, said: ‘The market has softened, but I think it’s still holding up. With many en-bloc sales and HDB upgraders, there is still a demand for private housing in the market.

 

‘The prices of freehold landed properties are still far below those in other global cities like London, Hong Kong and New York. People will soon realise that land is still under-valued and will buy the freehold land,’ she added, observing how landed property in Sentosa has shot up from $200 to $1,800 per square foot.

 

Madam Chong’s interest in property was first stimulated through discussions with her father, who was in the hotel business.

 

But Madam Chong, who is a very private person, declined to reveal more details about her family.

 

She started out first with a few commercial units at People’s Park in the 1960s.

 

In 1972, she bought an apartment at Beverly Mai, a Tomlinson Road condominium, and slowly expanded the number of properties to her name over the years.

 

Madam Chong declined to reveal the number of properties she and her family own, and also declined to reveal how much she has earned in the property market.

 

She bought a plot of land with an area of 1hectare for $16 million some years ago.

 

The land is now worth a cool $40 million.

 

UNCANNY ABILITY

 

Talking about her uncanny ability to make predictions about where the property market is headed, Madam Chong said: ‘I can feel it.’

 

In 2004, she asked her friends to buy property when prices were at their lowest.

 

‘But many of them were reluctant to, because property prices had been declining since 1996.

 

‘The mood was still not there and the market was still quiet so they were still unsure,’ she said.

 

Now, Madam’s Chong’s friends chip in when she makes investments so that they can get a share of the profits as well.

 

She said: ‘Every high that a property cycle brings with it will be higher than that of the last property cycle. It is a good time to buy freehold land.’

 

Madam Chong’s property agent, MsAnnabelle Khan, describes her client as someone with ‘good foresight, careful when she makes decisions’.

 

Madam Chong has bought three properties through Ms Khan since they got to know each other last September.

 

Ms Khan said: ‘She’s not stuck up, and she’s always willing to give younger people a chance.

 

‘She’s always very happy to help people.’

 

Ms Khan also described Madam Chong as a ‘very compassionate’ woman, who, after she knew of Ms Khan’s family problems, even offered to visit her family.

 

Source: The New Paper