PRIME BUYS ARE THE BEST BET

PRIME BUYS ARE THE BEST BET

 

Cushman and Wakefiled’s Donald Han (picture) offers his views on the property market in the Channel NewsAsia programme, When The Bears Are Out – Invest Wise, hosted by Lin Xueling.

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What are your favourite locations at the moment? And for which categories?

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It all depends on your investment profile and investment criteria. I always say that you should go into a project or property sector that you are most familiar with.

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For someone who is looking at residential properties, you might want to go into the first-tier residential market where you can get fairly good returns for your investment.

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The more sophisticated ones are banding their investment dollars to create a larger quantum and investing in markets where we’ve seen substantial depreciation in asset values.

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And one of the more common routes would be to go to the United States. This could present an opportunity, in terms of going in to buy US40 cents (54 cents) out of US$1 and getting what we call the deep-sea fishing expedition prices.

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So it’s a question of waiting for the right time. But generally, you’re still pretty bullish about the market?

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I’m still pretty bullish. I think everyone says it’s all about location, location, location. I think you need to put another important doctrine to that. It’s also about timing, timing, timing.

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In fact, history has shown that one can make more money from timing than just from location over a short period of time.

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We Asians tend to be really keen on property. Do you think that’s going to continue?

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If you’re looking at the market right now, it’s a perfect opportunity for investors who have missed out over the last one or two years and have cash.

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This is the investor whose money in the bank is earning interest rates of less than one per cent, considering that inflation is going to be four, or even six per cent.

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At the end of the day, you’re better off hedging that and putting your money in asset location — with part of it being in property. This can help because as an asset class, it’s a hedge against inflation.

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Also, owners and buyers are now more realistic in terms of pricing. If they were quoting a price 10 to 20 per cent higher than the market value last year, they’re now willing to sell at, or below market value.

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You’ve been talking about time being everything. Do you think that the timing is right now?

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I think the timing could be anything from the next six to 12 months. A lot depends on what unfolds from the sub-prime and, more importantly, the banking mess. It will affect the demand and sentiment.

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At the end of the day, the Singapore property market is affected by sentiment — what you hear and what’s in the headlines tomorrow.

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The headlines recently have been pretty much stellar economic growth for the first quarter — 7.2 per cent. That’s excellent. If the stock market doesn’t go down from current levels, that would help sentiment again. And we’ll have to wait for some of the Urban Renewal Authority data in terms of the analysis of the first quarter. We’ll make a decision at that point of time and over the next six months.

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What would be your top tips for surviving the next six months?

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Go for prime properties … it’s probably the first to go up in any recovery and the last to come down, so it’s very defensive. And measure your investment on the kind of yields that you can get and prime properties typically would be able to be leased out very quickly. Always look into prime properties wherever you go. It works in Singapore, Tokyo and US, too.

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The programme is shown on Channel NewsAsia every Thursday at 9.30pm.

 

Source: Today News Paper

New residential buildings must now meet minimum standards for energy efficiency

New residential buildings must now meet minimum standards for energy efficiency

 

SINGAPORE: New residential properties must now include basic environment-friendly features before the building plans are approved.

 

This is a requirement introduced on 15 April by the Building and Construction Authority (BCA).

 

Under the new guidelines, BCA has set a limit on the amount of heat that can enter a residential building through its facade. This limit is called the Residential Envelope Transmittance Value. Such a criterion already exists for commercial properties.

 

A house with floor-to-ceiling glass designs and little concrete all around. Such a look has become increasingly popular among private residential properties in Singapore.

 

The full-height window design exudes an air of elegance and makes the rooms look larger. But such a design is not environmentally-friendly.

 

“…..because during the day, a lot of heat will be trapped inside the unit and when you turn on the air-conditioning, it’ll work harder than normal,” said BCA’s deputy director for technology development, Ang Kian Seng.

 

This is why the BCA hopes that designers will incorporate ‘green’ features at the planning stage.

 

Today, more than 30 residential properties in Singapore have floor-to-ceiling glass designs. The BCA says such architecture is not suitable for a tropical country like Singapore.

 

In fact, if architects use less glass in their designs, they could actually save more money in overall construction costs. Consumers would then stand to benefit.

 

BCA’s Mr Ang said: “Typically in a residential unit, 60 percent of the electricity bills will have to be used for air-conditioning. So with this (heat limit) requirement, typically you’re looking at 10-20 percent kind of savings for the home owner….With our buildings properly designed….that can go a long way to delay the construction of a power plant, for example……instead of wasting energy and the load goes up, you may need a plant earlier than before.”

 

So a ‘greener’ home now is a practical step towards a healthier environment in future. – CNA/ir

 

Source: Channel NewAsia

World’s first US$2b home rising in Mumbai

World’s first US$2b home rising in Mumbai

 

400,000-sq-ft marvel across 27 storeys for tycoon’s family of 5

 

(MUMBAI) A 27-storey sea-facing skyscraper coming up in downtown Mumbai will soon be home to a family of five. With a price tag nearing US$2 billion, it will be the world’s largest and most expensive home – ever.

 

The proud owner of this property, which will be ready by January next year, is Mukesh Ambani, head of Mumbai-based petrochemical giant Reliance Industries and the fifth richest man in the world.

 

The only remotely comparable high-rise property currently on the market is the US$70 million triplex penthouse at the Pierre Hotel in New York, designed to resemble a French chateau, and climbing 525 feet in the air. The Ambani residence will be 550 feet high with 400,000 square feet of interior space.

 

Mr Ambani’s home costs much more than a hotel or high-rise of similar size because of its customised measurements and fittings, the Forbes magazine reports.

 

A hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building, such as door handles, floors, lamps and window treatments. But the Ambani home, called Antilla, differs in that no two floors are alike in either plans or materials used. At the request of Nita Ambani, the tycoon’s wife, if a metal, wood or crystal is part of the ninth-floor design, it shouldn’t be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition.

 

While visiting New York in 2005, Nita Ambani was in the spa at the Mandarin Oriental New York, overlooking Central Park. The contemporary Asian interiors struck her just so, and prompted her to inquire about the designer.

 

The Ambanis then consulted architecture firms Perkins + Will and Hirsch Bedner Associates, the designers behind the Mandarin Oriental, based in Dallas and Los Angeles, respectively.

 

Antilla’s shape is based on Vaastu, an Indian tradition much like Feng Shui that is said to move energy beneficially through the building by strategically placing materials, rooms and objects.

 

Forbes reported that atop six stories of parking lots, Antilla’s living quarters begin at a lobby with nine elevators, as well as several storage rooms and lounges. Down dual stairways with silver-covered railings is a large ballroom with 80 per cent of its ceiling covered in crystal chandeliers. It features a retractable showcase for pieces of art, a mount of LCD monitors and embedded speakers, as well as stages for entertainment. The hall opens to an indoor/outdoor bar, green rooms, powder rooms and allows access to a nearby ‘entourage room’ for security guards and assistants to relax.

 

For more temperate days, the family will enjoy a four-storey open garden. The top floors of entertaining space, where Mr Ambani plans to host business guests (or just relax), offer panoramic views of the Arabian Sea.

 

Mr Ambani plans to occasionally use the residence for corporate entertainment, and the family wants the look and feel of the home’s interior to be distinctly Indian; 85 per cent of the materials and labour will come from outside the United States, most of it from India.

 

Where possible, the designers told the Forbes, whether it’s for the silver railings, crystal chandeliers, woven area rugs or steel support beams, the Ambanis are using Indian companies, contractors, craftsmen and materials firms.

 

Elements of Indian culture juxtapose newer designs. For example, the sinks in a lounge extending off the entertainment level, which features a movie theatre and wine room, are shaped like ginkgo leaves (native to India) with the stem extending to the faucet to guide the water into the basin.

 

Forbes estimated Mr Ambani’s net worth at US$43 billion in March. The couple, who have three children, currently live in a 22-storey Mumbai tower that the family has spent years remodelling to meet its needs.

 

Source: Business Times

Do we really need more people?

Do we really need more people?

 

A city’s size alone does not seem to result in economic growth or leadership

 

Weekend • May 3, 2008

 

RICHARD HARTUNG

 

SINGAPORE‘S population is too small to compete globally!

 

This constant refrain, tied to the concept that Singapore needs a rapidly growing population to sustain economic growth, seems to lie at the heart of the argument for increasing the population by millions.

 

The size of many cities at the forefront of innovation and economic growth in other locations, however, belies this need for a large population. Indeed, bringing in small numbers of the right people rather than just lots more workers, and focusing on creating the right environment for growth, may be more important.

 

Think about innovative cities around the world. In the United States, Silicon Valley immediately comes to mind. Not too far away, Seattle is the birthplace of Amazon, Microsoft and Starbucks. Around the world, top centres of innovation include cities such as Bangalore, Helsinki, Stockholm and Dublin.

 

It’s true that the seven-million population in the Bay Area around Silicon Valley is larger than Singapore’s, even though the population of the Valley itself is only about 2.5 million. Yet the populations of other centres of innovation and entrepreneurship are actually surprisingly small.

 

Seattle is at 3.4 million, Stockholm 1.9 million, Helsinki 1.3 million and Dublin 1.6 million. Bangalore’s population of 5 to 6 million is admittedly larger than Singapore’s, though not by much. Even when they are part of a larger country such as the US or India, economic development in these cities is local, and having a large population available in places such as Kansas or Kashmir doesn’t enable innovation or growth in these cities.

 

One driver of growth is that these cities attract top talent from around the world. In Silicon Valley, about 35 per cent of the population is foreign-born and 17 per cent of Seattle’s population is imported. In Bangalore, about half the population has migrated in from other cities in population-heavy India. Even Helsinki has the largest percentage of immigrants of any area in Finland. And it is not just numbers, as immigrants are usually more highly educated that the average population.

 

On the other hand, many of the world’s largest cities certainly aren’t recognised as centres of innovation and leaders in the competitive economy. The five largest cities in the world — Tokyo, Mumbai, Mexico City, Sao Paulo and New York — have populations between 17 and 28 million.

 

While it’s true that Tokyo is known for adapting new technology well and New York is a financial capital, Mexico City or Sao Paulo may not top the global list for growth and innovation. Size alone therefore does not seem to result in economic growth or leadership.

 

If population size is not the key, then, what makes these cities thrive?

 

Mr Steve Poloz of Export Development Canada summarises the thoughts of many when he says that “today, the prime determinant for growth is whether a city is a catalyst for innovation. A city’s rise or fall depends on how well it attracts the players — business, institutions, individuals — to interact, create and innovate.”

 

What results in innovation? Leading author Richard Florida says in The Flight of the Creative Class that the drivers of innovation are the three Ts — talent, technology and tolerance. A nation that nurtures talent through education, develops technology with research funding and tolerates diversity such as women’s rights or democracy or gays, he says, has a higher likelihood of attracting the human capital that will drive innovation and growth.

 

A city with the 3 Ts can have more innovation and higher growth than a city that just attracts lots of people.

 

Instead of size, then, developing a welcoming environment that nurtures talent and enables it to flourish seems more likely to drive growth than just population increases.

 

Two issues loom large for Singapore: First, Singapore may need to re-examine whether it has the right environment to attract talent, and how its environment is presented. A bourgeoning arts scene, allowing in same-sex partners and pouring money into research centres may help pave the road to success.

 

Yet, it is anecdotes such as censors banning movies and limited media freedom that attract attention. The image of the environment for one T — tolerance — could need improvement.

 

Second, attracting the right type of immigrants may be more important than sheer population growth alone. However, the people arriving to support the sectors currently driving growth here may not reflect the purported focus on talent development.

 

Even as research funding focuses on key strategic sectors, such as biotechnology and environment research, that epitomise talent development, the real engines of job growth are reported to be tourism, construction and marine engineering. Saying that high-end technology is central when lower-skilled jobs drive growth may make a second T — talent — seem suspect.

 

The successes of smaller, innovative cities indicate that population can be less important than other factors for driving economic growth. Instead, having all three Ts seems more central to success. Research funding initiatives show that technology in Singapore is here or on the way.

 

Enhancing the other two Ts — talent development for jobs that matter and a tolerant environment — to attract more talented people may be more important than sheer population numbers in driving growth higher.

 

The writer is a consultant who has lived in Singapore since 1992.

 

Source: Today Newspaper

S&P’s ‘AAA’ rating affirms Singapore’s stable outlook

S&P’s ‘AAA’ rating affirms Singapore’s stable outlook

 

SINGAPORE: Standard & Poor’s Ratings Services affirmed on Friday its ‘AAA/A-1+’ sovereign credit ratings on Singapore.

 

In a statement, Standard & Poor’s said the outlook is stable.

 

The ratings reflect Singapore’s enduring fiscal and external strengths and competitive economy, while taking into account the challenges it faces as a small and open economy.

 

Singapore‘s general government surplus is estimated at 8.8 percent of GDP in fiscal 2007 and averaged 8.0 percent of GDP between 2003 and 2007.

 

Standard & Poor’s added that this level of surplus – one of the highest in the world – provides strong fiscal flexibility, which is needed for structural reforms such as the ongoing efforts to diversify the economy so that it would be less reliant on electronics exports and be more cost competitive.

 

Source: Channel NewsAsia