URA launches 2 more temp office sites in Newton

URA launches 2 more temp office sites in Newton


Analysts see good demand just like for a nearby plot launched earlier


By Ong Bi Hui


TWO more transitional office sites have been launched by the Urban Redevelopment Authority (URA) in a move to help ease some of the pressure on space.


The adjacent sites – parcel A is 8,682.8 sq m in size and parcel B is 9,037.9 sq m – are near the Newton MRT station, between Scotts Road and Anthony Road.


The sites can accommodate developments of up to four storeys that can be built within a year.


Transitional office sites, a relatively new concept, were introduced as a quick fix to the lack of space in the Central Business District (CBD).


They have 15-year leases, significantly less than the usual 99-year leases for commercial buildings.


The response has been mixed. A plot launched by the URA in Aljunied recently flopped, with all bids rejected as being too low.


The URA believes the Newton sites will fare better.


‘Based on market feedback, there is still demand for transitional office sites in the city centre,’ it said.


Property experts also expect a more enthusiastic response.


Mr Nicholas Mak, Knight Frank’s head of research and consultancy, said the prime location near the CBD and Newton MRT would draw bidders.


And the sites being adjacent means a developer could combine the land.


‘There is a potential for amalgamation to create bigger floor space,’ added Mr Mak, who estimated that the sites could sell for around $100 to $130 per sq ft (psf).


This values the parcels from $14 million to $19 million each.


Mr Mak felt the Aljunied site was ‘too close to the red-light district of Geylang’.


For the two latest plots, the industry experts interviewed expect a level of response similar to the Scotts Spazio site, which is across the road and was eagerly received by developers.


KOP Capital is developing the site, which cost $37 million, with partners Hwa Hong Group and Dubai Investment Group.


Insurer Prudential will lease the four-storey building for 14 years, paying $6.50 psf a month. The company should move in by September.


However, some experts believe that transitional office sites will not be commercially viable given their brief tenure. Tenders for the two Newton sites close on April 24 for parcel A and April 30 for parcel B.


Source: Straits Times

Why income cap for HDB buyers won’t be raised

Why income cap for HDB buyers won’t be raised


By Lynn Lee


THE Housing Board will not raise the $8,000 income ceiling for first-time buyers of HDB flats, despite numerous calls from MPs and the public for it to do so.


The reason: The income criteria capture some eight in 10 Singaporean families, including upper middle-income earners, said National Development Minister Mah Bow Tan yesterday.


‘I hope Members will agree with me this is more than generous and will not be surprised if I tell them HDB has no plans to revise the income ceiling,’ he added.


His reply during the debate on his ministry’s budget was sparked by calls from MPs such as Mr Christopher de Souza (Holland-Bukit Timah GRC) during the debate earlier in the week on the Finance Minister’s Budget statement.


Mr de Souza said buyers, especially young couples, had no access to affordable housing if they earned more than $8,000.


Mr Mah acknowledged HDB resale prices saw ‘heady’ growth of about 17 per cent last year. But he did not expect the spike to continue.


There are other affordable alternatives for such couples, he said, citing the resale market in executive flats.


Mr Mah also assured Singaporeans that the Government will ensure HDB flats remain within reach of the vast majority, especially young couples seeking to buy their first home. For instance, they will get more chances in balloting exercises for new flats.


On average, the Government spent $1.4 billion a year over the last five years on public housing. In the coming 2008 financial year, it has set aside $1.6 billion.


The vast sums are spent on providing Singaporeans with various housing types to meet changing aspiration and various needs, said Mr Mah as he detailed HDB plans, policies and programmes.


Affordable housing


NEW HDB flats are priced below market value. And the subsidy for first-time buyers can go up to $88,000.


As a result, first-time home owners last year used, on average, only 20 per cent of their monthly income to pay their home loan.


This is well within the 30 per cent benchmark for affordability.


Also, at least 70 per cent do not fork out cash from their pockets each month but settle their mortgage entirely with their CPF contributions.


Many choices


THREE more sites will be offered to private developers to build condo-style flats, under HDB’s Design, Build and Sell scheme.


It will bring the total of such HDB flats to around 4,000 units, to cater to families who can afford to pay more.


But Mr Mah stressed that HDB-built flats will still be the mainstay of new flat supply.


Sufficient supply


ABOUT 700 new flats in Punggol and Sengkang are still available for purchase, said Mr Mah, who allayed concerns over whether supply is enough to meet growing demand.


HDB builds flats only if buyers show firm commitment, in the form of a deposit. It started the practice following a glut of unsold flats in the 1990s.


This build-to-order scheme has not reduced supply. Some 10,500 flats have been launched since last year, and HDB will continue to do more of such projects.


Mr Mah also assured the House that getting a new flat was not a case of tikam-tikam (‘trying your luck’), a phrase Mr Baey Yam Keng (Tanjong Pagar GRC) used of couples who came to see him when they could not get flats.


Mr Mah said his checks with HDB showed in the past six years, only 250 were still unsuccessful after taking part in more than four HDB sales exercises. ‘This is less than 1 per cent of first-timer applicants applying for a new HDB flat,’ he said. Also, four out of five of the 250 applied only for homes in established towns.


Such outcomes, Mr Mah said, are why he repeatedly advises young couples to be flexible and go for new flats in newer towns or resale flats.


Source: Straits Times

Three-pronged strategy to resolve rental flat shortage

Three-pronged strategy to resolve rental flat shortage


A review of the public rental scheme will also be carried out to ensure more holistic assessment criteria


By Jessica Cheam


THE Government has unveiled a three-pronged strategy to tackle rising demand for public housing rental flats.


National Development Minister Mah Bow Tan yesterday said he has asked the Housing Board to resolve the shortage in three ways.


One is to increase flat supply. Secondly, the eligibility criteria for rental flats will be reviewed; and thirdly, enforcement will be stepped up to weed out those who abuse the rules on use of flats.


To address stronger demand, the stock of rental flats will go up by 20 per cent to 50,000 over the next few years, said Mr Mah. Since 2006, when building for rental flats resumed, some 2,200 new units have been built.


Another 930 rental flats converted from vacant blocks will also be ready by next month.


This year, another 2,000 units will be built across different estates, and ready for families to move in from 2011.


Mr Mah was responding to calls by some MPs to review the policy on rental flats.


Ms Irene Ng (Tampines GRC) questioned whether the current 5 per cent of total housing stock for rental was sufficient. She also called for rules on rental flats to be relaxed ‘so that Singaporeans have more access to them’.


Mr Mah disclosed that a ‘comprehensive review’ will be done on the public rental scheme.


‘This review will put in place more holistic assessment criteria of rental flat applicants,’ he said.


Mr Mah also noted that Singaporeans who can afford home ownership or have family support should not join the queue, otherwise, ‘the more needy cases will be crowded out’.


He referred to an example raised by Mr Masagos Zulkifli (Tampines GRC) of elderly residents who had no place to go after selling their flats and giving the proceeds to their children who subsequently refused to live with them.


‘Our rental flats cannot be used to support such irresponsible behaviour of the children,’ said Mr Mah.


Addressing another point raised by Ms Ng on low-income divorcee families who are increasingly turning to rental flats, Mr Mah said: ‘We have to look at the overall issue of low-income dysfunctional families from a wider perspective together with the Ministry of Community Development, Youth and Sports and other ministries. The issue cannot be just limited to housing.’


Among others, the review will also study how existing tenants can buy their own homes when their situation improves.


In reply to MPs who shared anecdotes of tenants installing air-conditioning units or sub-letting their rental flats, Mr Mah said that ‘HDB will not hesitate to terminate the flat tenancy of those who abuse or violate the conditions of the lease’, and will re-distribute these to the more deserving cases in the queue.


The Government will continue to be flexible to help families in financial hardship, added Mr Mah.


‘But the individual has to exercise prudence and financial responsibility.’


Source: Straits Times

Marina Bay prime office space equal to HK business site

Marina Bay prime office space equal to HK business site


It’ll be a ‘seamless extension’ of CBD, to rival London’s and Hong Kong’s


By Alvin Foo


THE new Marina Bay growth area will be a ‘seamless extension’ of the Central Business District (CBD) and will offer a significant amount of office space, said National Development Minister Mah Bow Tan yesterday.


Adjacent to Raffles Place and Shenton Way, it will be more than twice the size of London’s Canary Wharf and provide as much premium office space as Hong Kong’s Central district.


Mr Mah was responding to a question by Mr Liang Eng Hwa (Holland-Bukit Timah GRC) on plans to rejuvenate the CBD and develop Marina Bay.


Mr Mah said: ‘Marina Bay remains the centrepiece of our efforts. It will be a seamless extension of Raffles Place, and will offer high-quality office spaces along a lively waterfront.’


The district will have a land area of 85ha, more than double the size of London’s bustling financial and shopping hub, Canary Wharf.


It will also offer an estimated 2.82 million sq m of office space, the equivalent of Hong Kong’s main business district.


Mr Mah also revealed that the Urban Redevelopment Authority (URA) will release more sites in this area over the next five to six years.


Once built, these projects will provide more than 1.1 million of office space – the total amount of office space in Raffles Place.


The new Marina Bay financial district is expected to take more than 15 years to materialise, he added.


Mr Mah also said the URA will release land around Tanjong Pagar and ‘redevelop the Ophir-Rochor corridor into a vibrant office cluster’.


Mr Mah also addressed a query from Mr Zainudin Nordin (Bishan-Toa Payoh GRC) on having more underground connections between buildings in the downtown area.


He said Marina Bay will be a pedestrian-friendly area, with covered walkways on the ground and an extensive underground network linking developments to MRT stations.


He added that the Government is working to ease the office space crunch in both the short and long term.


In the short term, the Government has released land for transitional office sites and vacant state properties, which will yield 150,000 sq m of space. These spaces will be available within a year.


The Government has also temporarily disallowed the conversion of office space to other uses in the central area.


Over the long term, about 1.4 million sq m of office space, equal to about five years of supply, will be completed mostly in 2010 and beyond.


Mr Mah said: ‘These measures are going to take some time to filter through to the market. I will suggest that in the meantime, tenants can look at alternative locations outside the central area.’



Source: Straits Times

14 town councils to freeze fees this year

14 town councils to freeze fees this year


Responding to the Finance Minister’s call, they will not up service and conservancy fees


By Arti Mulchand & Esther Tan


FOURTEEN People’s Action Party (PAP) town councils have decided to freeze their service and conservancy fees for both residential and commercial units this year.


This will help lessen the financial burden created by inflation, said Dr Teo Ho Pin, coordinating chairman of the town councils and mayor of the North West District.


The fees, last revised in 2004, range from $18 to $85, depending on the type of flat. Fees for commercial properties are based on floor area.


The move is in response to Finance Minister Tharman Shanmugaratnam’s call on Wednesday for them to follow the Government’s lead in freezing fees for its services.


These include carpark charges, school fees, and driving and TV licence fees till the end of the year. Those fees were expected to stay fixed only till July, a decision made when the goods and services tax went up last year.


Town councils, however, could make their own call on whether to raise their fees, said Mr Tharman.


All PAP town councils have chosen to follow suit. Neither of the two opposition MPs could be reached to see if they will, too.


Mr Hri Kumar (Bishan-Toa Payoh GRC) called the move a ‘good gesture’, especially since many town councils themselves are already having trouble balancing the books.


Costs, including those for utilities, maintenance, cleaning and landscaping contracts, and even building materials, have been on the up and up, MPs told The Straits Times.


The construction boom has translated into 15 to 20 per cent increases in cost across the board for resources, acknowledged Dr Teo.


‘Without government grants, I think every town council would be in a deficit. The rising costs are having a real impact on us…but we will hold out for as long as we can,’ he added.


He said town councils have already been capitalising on new technologies and innovations to minimise energy consumption, in order to save money. They have also simplified designs and held back on energy-wasting water features.


The decision to keep service and conservancy charges the same is especially good news for HDB residents and tenants in the 14 town councils, like retiree Helen Tan, who lives in Clementi.


‘The cost of everything is going up, so it is great to hear that at least service and conservancy fees are not going the same way,’ she said.


Source: Straits Times

HDB unveils ‘income for life’ scheme for the elderly

HDB unveils ‘income for life’ scheme for the elderly


It will buy back tail-end of flat lease at market rate, with money going to CPF Life


By Jessica Cheam


FOR 68-year-old retiree Teng Kiat Hwa, who owns a three-room HDB flat in Toa Payoh, his home is his only asset.


Since he fell ill and stopped driving a taxi, he has had no income and his CPF money has been dried up by medical bills.


But come next year, Mr Teng will be able to sell part of his flat’s remaining lease to HDB, and receive a cash payment of $5,000 and an annuity payout of about $500 monthly from CPF Life.


Details of the long-awaited ‘Lease Buyback Scheme’, which helps the elderly sell their HDB flats to the Government for cash – while still being able to stay in them – were unveiled yesterday by National Development Minister Mah Bow Tan.


This is how it works: HDB will buy back the tail-end of a flat lease at market valuation, leaving a 30-year lease for the household. So, for example, if a flat has a remaining lease of 70 years, HDB buys 40 years of the lease from the flat owner. It pays market rate for the lease it buys and this money goes to the new CPF Life annuity in the flat owner’s name.


According to Mr Mah, the cash is enough to give a typical flat owner about $500 monthly for life. At the end of 30 years, the flat’s ownership is then transferred to HDB.


If the flat owner dies before the 30 years is up, his family gets a pro-rated refund from the HDB. If he outlives the 30-year lease, HDB may extend the lease or relocate the flat owner to rental housing.


To encourage people to opt for the scheme, HDB is also providing a $10,000 ‘bonus’ for anyone eligible for the scheme who signs up. Half of this – $5,000 – will be paid immediately in cash. The other $5,000 goes into the CPF Life annuity.


One catch: the scheme will be available only to 25,000 low-income households in Singapore. That’s because the eligibility criteria restricts the scheme to those aged 62 and above and who own two- or three-room HDB flats.


Among other things, they must also have fully paid up for their flats, or else have a loan amount outstanding of less than $5,000.


Mr Mah said in Parliament yesterday that this is consistent with the objectives of the scheme, which was first announced by Prime Minister Lee Hsien Loong at last year’s National Day Rally.


He said the scheme is meant to supplement the recently announced CPF Life annuity by providing a stream of retirement income for poor households who may not have the minimum sum needed to sign up for CPF Life, but still need steady income in old age.


He added that the 25,000 households that qualify for the scheme represent about 70 per cent of elderly households in two- and three-room flats.


Asked for his reaction, Mr Teng said in Mandarin that it was ‘an interesting option’.


‘But we must consider it thoroughly before taking it up. My wife and I wanted to leave this flat to our kids,’ he added.


Meanwhile, industry players yesterday welcomed the scheme, but expressed concern that the criteria were too strict.


This was also brought up in Parliament by Madam Ho Geok Choo (West Coast GRC), who asked if owners of larger HDB flat can qualify for the scheme.


Mr Mah replied that this can be examined after the scheme was implemented and feedback given.


Mr Eugene Lim, the assistant vice-president of ERA Realty Network said renting out the flat may give better yield or payouts than the annuity.


Source: Straits Times

Low: When will it be Hougang’s turn for HDB upgrading?

Low: When will it be Hougang’s turn for HDB upgrading?


By Goh Chin Lian


OPPOSITION MP Low Thia Khiang crossed swords with Minister of State (National Development) Grace Fu over the upgrading of HDB flats, especially those in his Hougang constituency.


Mr Low yesterday repeatedly pressed her for answers as to when his residents could benefit from upgrading and asked if they were being fairly treated.


He accused the Government of using upgrading as a political tool to change voting behaviour, and wanted to know how much it spent on upgrading flats in different precincts.


He also claimed that the Government ‘owes every eligible flat owner in Hougang constituency $22,500 to $27,000 for the long overdue upgrading’.


This is based on the average cost of $30,000 for a basic upgrading package, of which the Government pays the major portion and residents the rest.


It has been 12 years since he was told that Hougang’s turn for the Main Upgrading Programme (MUP) would not happen for ‘many, many years’, he said during the debate on the National Development Ministry’s budget.


Noting that the MUP has since been replaced by schemes such as the Home Improvement Programme (HIP), he asked: ‘Will opposition wards need to start all over again and wait many, many years for HIP to happen?’


Ms Fu said the HIP was the result of residents asking for more flexibility and consultation in upgrading.


The programme would benefit 300,000 flats across the island.


Explaining that the MUP was restructured so that flats could be spruced up more quickly, she said the change applied to PAP and non-PAP constituencies.


Mr Low had asked about the amount spent upgrading each flat and how these government funds would be applied fairly to everyone.


Responding, Ms Fu said the amount was about $30,000 a unit. But she told Mr Low that the question of fairness did not arise in this matter.


‘It is not a case of an entitlement. It does not mean that every Singapore household can come and claim for this sum of money,’ she said.


‘It is something that we will prioritise. It’s something that we will do depending on the age, the quality of the flats.’


And who gets HIP first also depends on the funds available.


The Government’s focus now is to have lifts stop at every floor of HDB blocks by 2014, she said.


‘And Hougang residents can look forward to that by 2014,’ she said, adding that Mr Low could speed the process up by having his town council undertake the upgrading of the lifts in his constituency


Source: Straits Times

Shortage of new HDB flats? Young couples must be realistic, says Mah

Shortage of new HDB flats? Young couples must be realistic, says Mah


Friday • February 29, 2008





AMID concern that young couples are being priced out of the public housing resale market, National Development Minister Mah Bow Tan said the Government spent, on average, $1.4 billion a year over the last five years on its commitment to keep housing affordable — and has allocated a further $1.6 billion this coming financial year.


Last year, demand for public housing saw resale prices rise by about 17 per cent. Many first-time buyers voiced frustration at having to turn to the resale market due to a shortage of new HDB flats — but Mr Mah said that this was not an accurate picture.


While there was overwhelming demand for new HDB flats in mature estates such as Bukit Merah, Mr Mah pointed out there are still some 700 units available in the Built-To-Order projects launched last year in Punggol and Sengkang.


Urging buyers “to be realistic in their expectations”, he said: “The Government cannot ensure that flat buyers will get their ideal flat at the specific location and at the time that they prefer.”


As to calls from Members of Parliament to raise the $8,000 income ceiling for housing subsides, Mr Mah pointed out that eight in 10 Singaporean families are already eligible, which means even the upper-middle income are enjoying subsidised housing. “I hope members will agree with me that this is more than generous.”


Turning to another emotion-laden issue that surfaced during Tuesday’s Budget Debate, the Minister stressed that compulsory acquisition of flats by HDB was “absolutely the last resort”, carried out “only after other measures have been exhausted, and only if lessees do not make any effort to resolve their financial situation”.


He was referring to Tampines MP Ong Kian Min’s account of Ms Judy Mitchell’s plight — she had to vacate her flat after accumulating arrears of more than $10,000.


Mr Mah said Ms Mitchell lives in a five-room flat with her adult daughter and mother. “This is her third flat. She has bought and sold two previous flats and has made profits of about $190,000. She has enjoyed three concessionary loans.”


On four occasions over two years, HDB had allowed her to defer her mortgage or pay half her instalment amount, but Ms Mitchell — who was not receptive to HDB’s suggestion to include her working daughter to help service the housing loan — “did not make any attempt to find a long-term solution, and arrears kept mounting”.


Still, Mr Mah said he would ask HDB to consider a non-concessionary loan should Ms Mitchell fail to get a bank loan to buy a smaller flat.


Source: Today Newspaper

Borrowers may face the music too

Borrowers may face the music too


Friday • February 29, 2008


Neo Chai Chin



With more than 9,700 loanshark-related cases last year, and one in two cases of harassment affecting innocent parties, should the law be extended to penalise those who borrow from loansharks?


The Ministry of Home Affairs says it will consider this seriously after having previously rejected the idea and trying other measures to curb the problem of unlicensed money-lending.


The issue was revived by MP (Holland-Bukit Timah) Christopher de Souza, who cited the example of a borrower who gives a false address to a loanshark, causing an innocent party to get harassed. “If such a borrower abets such harassment, why not make his very act of borrowing an offence?”


Senior Minister of State Ho Peng Kee said the idea would be studied. Already, some borrowers fall within the law’s reach when, for instance, they get pulled in by loansharks to become runners.


To tackle the problem of wrongful harassment, those who change their home addresses on their Identity Cards (ICs) will have to furnish proof such as bills to show they are indeed living at that address. The Immigration and Checkpoints Authority, and the Housing and Development Board will also work together to get flat buyers and sellers to update the address on their ICs, said Associate Professor Ho.


Last year, 392 people were arrested for loanshark activities, almost 100 more than in 2006. Six syndicates that were smashed were believed to have had a combined pool of 2,000 debtors. Although the 9,762 unlicensed money-lending and harassment cases last year was a 4.5-per-cent dip from 2006, Assoc Prof Ho acknowledged the number remained “unacceptably high”.


Mr de Souza said a review of the Moneylenders Act could draw from laws against drug abuse and corruption, which have penalised both the supply and demand elements of the offences and succeeded in containing both crimes in Singapore.


Source: Today Newspaper

Faint light at end of sub-prime tunnel?

Faint light at end of sub-prime tunnel?


But banks now have to deal with slowing economy


Thursday • February 28, 2008


Cheow Xin Yi



A heart-thumping sub-prime ride for local banks may be nearing a halt after two quarters of hefty provisions for risky investments.


But investors looking to banks repeating the double-digit earnings gain of recent years could be disappointed. A slowing economy is likely to put a squeeze on interest margins and earnings growth, suggesting 2008 could turn out to be, at best, unexciting.


“The banks have already provided a significant coverage against its collateralised debt obligation portfolio (CDOs) as far as asset-backed CDOs are concerned … but currently, there is no strong growth catalyst. Business is driven by mostly organic growth and core business,” said Kim Eng analyst Pauline Lee.


For fiscal year 2008, she predicted core bank earnings to grow at an average of 6 per cent to 8 per cent, slower than the 10 per cent in 2007.


Loan growth should remain strong on a robust construction sector and as borrowers start to draw down on loans made during last year’s property boom, said Phillip Securities’ Brandon Ng.


But lower margins caused by falling interest rates could cloud the positive prospects. Inter-bank rates have been easing since late last year, taking the cue from the United States rates.


Stock markets which appeared to defy gravity helped boost non-interest income substantially last year, but the reverberations from the sub-prime crisis shook capital markets and weakened sentiment, suggesting this source of income would be affected in 2008, said Daiwa Institute of Research analyst David Lum.


While “one of the major external risks” may be removed this year, at the same time, “there’s nothing really new to look forward to”, said Mr Lum.


Global banks sent a shiver through the world’s financial system when they disclosed massive losses related to their investments in sub-prime debt. In Singapore, banks created shocks too although their exposures were viewed as more limited.


The shares of the three banks, which have dropped an average of almost 20 per cent from last August to end-January, have since found a footing.


Oversea-Chinese Banking Corporation rose 11 cents, or 1.4 per cent to $7.78 yesterday, while DBS Group Holdings and UOB dropped 18 cents and 42 cents to $17.70 and $18.42 respectively.


Source: Today Newspaper