Rewarding good workmanship

Rewarding good workmanship


A TOTAL of eight awards and four certificates of merit have been given out under this year’s Building and Construction Authority (BCA) Construction Excellence Awards, out of a total of 16 nominations.


The competition, introduced in 1986, principally recognises builders’ workmanship, focusing on downstream post-design implementation – specifically, project management, technical capability and quality of the completed project.


Of the 12 winners, nine were private residential developments. Among these, there was notable improvement in the performance of BCA Quality Mark for Good Workmanship holders.


The Quality Mark, which had its debut in July 2002, seeks to ensure the consistent delivery of quality homes. It is particularly stringent because it assesses the internal finish of every single apartment unit within a residential project, including watertightness tests in all bathrooms. Each unit must attain a minimum score and have no major defects in order for the project to receive the mark.


Where last year five Quality Mark holders took the merit certificate and just one achieved the more prestigious award, this year six Quality Mark holders bagged the award, with one more managing a merit.


About 34 per cent of units launched last year were committed to the Quality Mark scheme, and to date some 21,000 residential units have been committed or assessed.


The scheme has found potential defects and leakages in about 5 per cent of all units assessed thus far, resulting in their rectification before units were handed over to homeowners.


Source: Business Times

Seeing green with Capitafrog

Seeing green with Capitafrog


CAPITALAND unveiled a green mascot called Capitafrog as it launched its Building a Greener Future programme at Raffles City on Thursday. The property group is looking at making the mascot into a soft toy and will unveil further green initiatives in the coming months.


To drive home the green message, some 100,000 green shopping bags will be distributed to shoppers via CapitaLand mall tenants. Shoppers get one stamp on a loyalty card each time they use the bag. They can exchange three stamps for a limited edition Building a Greener Future umbrella adorned with Capitafrog. In addition, 168 customised recycling bins for paper, metal and plastics will be strategically placed in CapitaLand malls, offices and Ascott service residences to encourage the green habit.


The company will also invite architectural students in China to participate in a design competition for a Green CapitaLand Hope Foundation school as part of a corporate social responsibility (CSR) and green campaign.


Source: Business Times

Reit market may see mergers, privatisations

Reit market may see mergers, privatisations


AS THE market for listed property trusts in Singapore matures, it is likely that some will merge or go private.


There has been ‘a lot of speculation’ that such movements will take place soon, said experts on real estate investment trusts (Reits) at a regional property conference this week.


There are ‘three to five Reits in Singapore that seem obvious’ for acquisitions or privatisations, said Mr Mark Pawley, the chief executive officer of Oxley Capital.


‘It’s somewhat surprising that we haven’t seen more obvious transactions’ in that direction, he added.


Oxley is a Singapore-based private investment house that focuses on real estate and private equity. It has a stake in the manager of the Cambridge Industrial Trust, an industrial property Reit.


Mr Pawley suggested that one reason the Singapore Reit market has yet to consolidate is that private equity funds, which could help engineer some of these deals, might be ‘all cashed out’.


He was speaking to property players as part of a panel on Reits at the annual Financial Times Asia Property Summit, held at the St Regis Singapore on Thursday.


The topic was ‘Reits: Still a good bet?’ and the answer was, for the most part, yes.


Asian Reit markets reached a peak last October, before they started to feel the effects of the fallout from the United States sub-prime mortgage crisis, said Mr Daniel Ekins, the head of Asia-Pacific real estate securities at Deutsche Bank’s property arm, RREEF.


That was followed by a general sell-off of property trusts until mid-March, which pushed values down by 25 to 35 per cent in each country, he added. Since then, the values of Reits have rebounded by about 10 per cent.


While retail investors are still reluctant to re-enter the market, institutional investors have already started buying Reits, Mr Ekins noted.


‘The turnaround has already started. We’ve seen people coming to our funds who were reluctant to do so in the fourth quarter of last year,’ he said.


‘But retail investors will want to see prices rise 20 per cent before coming in,’ he added.




Mr Mark Pawley, the CEO of Oxley Capital, said it was ’somewhat surprising’ that there have not been more acquisitions or privatisations of Reits in Singapore.


He suggested that one reason the Reit market here has yet to consolidate is that private equity funds, which could help engineer some of these deals, might be ‘all cashed out’.


Source: Straits Times

World’s tallest condo in US…

World’s tallest condo in US…


…hit by pullout of many S’pore buyers


Two-thirds backed out after US sub-prime crisis took a turn for the worse


By Fiona Chan


LOCAL condominiums are not the only ones suffering from the recent sharp downturn in property market sentiment.


Two-thirds of Singapore buyers have backed out of their purchases of units in the much-hyped Chicago Spire in the United States, The Straits Times understands.


The iconic condo in Chicago was well-received when it was launched in Singapore in early March. More than 800 people attended the exhibition at the Four Seasons Hotel, and almost 40 buyers were said to have reserved units.


But more than 20 of them withdrew from their deals subsequently, after the US sub-prime crisis threatened to take a turn for the worse in the weeks following the launch, sources said.


The 150-storey Chicago Spire is touted as the world’s tallest condo, and boasts a unique spiral-shaped design.


But this was not enough to hook buyers. A number were apparently spooked by the near-collapse of US investment bank Bear Stearns, which took place a week after the Chicago Spire was launched in Singapore.


Many of the buyers who changed their minds may have been first-time punters who got cold feet, property experts suggested.


These buyers paid a US$2,000 (S$2,762) reservation fee for the units, but were refunded this amount in full, thanks to a cooling-off period that is the standard for US home sales.


Mr Colin Tan, the head of research and consultancy at Chesterton International, said it made sense for the buyers to pull out of their deals.


‘Housing prices in the US are coming down, and while some properties may look like a good investment now, you can probably get it cheaper later,’ he said.


‘It doesn’t make sense to buy and hold on to US properties when there are still sub-prime problems.’


Experts said those who had seen their purchases through are likely to be more serious buyers who may, for example, have children studying in Chicago.


Most of the units that were sold were reported to be one- or two-bedroom apartments that averaged US$1 million each, or US$1,000 per sq ft.


About half the buyers were said to be Singaporeans or permanent residents, and the rest were expatriates.


It is understood that to date, about 10 of the Singapore buyers have inked their purchase agreements. At least two of them are believed to be Indonesians.


Sources said the Chicago Spire’s exhibitions in Shanghai and Hong Kong, which followed its launch in Singapore, received a lukewarm response as the turmoil in the US financial markets deepened in March.







‘Housing prices in the US are coming down, and while some properties may look like a good investment now, you can probably get them cheaper later.’

MR COLIN TAN, head of research and consultancy at Chesterton International, who said it made sense for Chicago Spire buyers to pull out of their deals


Source: Straits Times

Regent Garden owners file appeal despite sale completion

Regent Garden owners file appeal despite sale completion


By Joyce Teo


ONE of Singapore’s most unusual collective sale disputes, over Regent Garden, is now headed for the Court of Appeal even though the sale was completed yesterday.


Last month, the High Court ruled that the $34 million sale of the West Coast Road condo to Allgreen Properties must go ahead.


But now, the owners of 23 out of the 31 Regent Garden apartments have filed papers to take the case to Singapore’s highest court – the Court of Appeal.


They cannot overturn the sale now that it has been completed, but they want the court to rule on certain ‘burning’ questions, and they might seek remedies if they succeed.


They say other people involved in collective sales might be interested in getting answers to these questions.


These majority owners, including owners of two units who did not join the appeal, had earlier sought to overturn the $34 million deal, claiming among other things that their condo had been undervalued.


In a statement, the sale committee said: ‘These questions include whether, in a situation where a minority of owners object to a proposed collective sale, an intending buyer is permitted to go behind the backs of the majority owners and reach a side deal with the minority owners.’


A spokesman for the majority owners said the ‘side deal’ referred to the fact that six of the owners who had opposed the sale had received an extra $2 million, divided between them, in return for withdrawing their objections.


Those appealing also want to know whether these minority owners are entitled to retain the extra payments without sharing the sum with the majority owners in accordance with the distribution arrangements in the sale agreement.


Yesterday, all the owners at Regent Garden completed their sale, which means they would each have pocketed a large part of their proceeds, which range from slightly over $700,000 to $1.4 million.


The remaining 5 per cent of their proceeds is due to be released to them when they vacate their homes.


In a statement released yesterday evening, Allgreen described the appeal as ‘curious’, given that the sale and purchase of Regent Garden had been completed earlier yesterday.


‘Allgreen intends to vigorously contest the appeal, and all claims and allegations made by the appellants,’ it said.


Source: Straits Times

Rising hotel rates scaring away tourists

Rising hotel rates scaring away tourists


THE rates which hotels are charging these days seem to be making it difficult for overseas clients and tourists to remain in Singapore for too long, let alone come here.


Rising costs and the strong Singapore dollar also make it less appealing for foreigners to shop here. If we don’t do something about this, we will face the brunt of the competition from some of our neighbours and lose out drastically. Measures should be taken to counter these problems.


Ishwar Mahtani


Source: Straits Times

Regent Garden owners make en bloc appeal

Regent Garden owners make en bloc appeal


Weekend • May 17, 2008


Esther Fung



Should those who oppose an en bloc sale get more money for their flats than those who support it?


Disgruntled owners of homes in Regent Garden don’t seem to think so. They are going to the Court of Appeal, after property developer Allgreen offered six owners more money than it had to the others so that the six would no longer hold up the sale.


This, after a High Court decision last month that the en bloc sale of the West Coast condominium should go ahead.


Some 23 of the 25 owners who sold at a lower price filed a notice of appeal on Thursday. They are not trying to reverse the sale but think everyone should get the same amount of money.


Allgreen described the appeal as “curious”, given that the sale of Regent Garden was actually completed yesterday. “Allgreen intends to vigorously contest the appeal, and all claims and allegations made by the appellants,” it said in a statement.


Last month, the High Court ruled that allegations against developer Allgreen of a breach of contract were without merit and ordered the sale to go ahead.


The case was a first-of-its- kind in which majority owners, after agreeing last April to the en bloc sale, sued the developer. They argued that Allgreen had overstated the development charge, thus depressing the sale price. At the time, they also alleged that it gave “disproportionately high” proceeds to win over the six erstwhile minority owners.


Allgreen, represented by lawyer Davinder Singh, has said these claims were “an attempt to reopen a concluded bargain”.


Source: Today Newspaper

Rental rate to fall 25%: Bank

Rental rate to fall 25%: Bank


Barclays Capital says market has peaked, rent to drop 5% this year and more in next 2 years


Weekend • May 17, 2008


Cheow Xin Yi



Have home rentals peaked? With a looming rush of new supply, one bank is predicting that they could fall by as much as 25 per cent by 2010.


That is good news for tenants, but not so good news for landlords, who saw private rentals surge an average of 41 per cent last year.


This bold forecast comes in a report from Barclays Capital. Its author, regional economist Leong Wai Ho, expects rentals to fall by 5 per cent this year, with a more severe price correction beginning from next year.


“The market has certainly peaked because vacancy rates are starting to rise and rents are linked to vacancy rates,” he said.


Current vacancy rates for completed flats are not particularly high, at 6.3 per cent in the first quarter of this year, according to Urban Redevelopment Authority figures.


Mr Leong said: “The vacancy rises are not strong this year, but it will be exceptional next year due to the huge supply hitting the market.”


A surge in reconstruction is taking place across town, following the recent flood of en bloc condominium sales. Some big residential developments around the central business district, including The Sail@Marina Bay, are also nearing completion.


Almost 13,000 new homes could be completed next year, rising to 18,000 the year after. All this, at a time when the global economy is slowing.


On the outlook for rents, other property consultants offered mixed views. Chesterton International’ s research head Colin Tan believes that the Barclays forecast of a 5-per-cent correction this year is too “conservative”.


He believes the recent spike in rental demand was a “one-off”. As thousands of home owners cashed in and sold their properties en bloc, there was a surge in instant tenants. Mr Tan believes many of them would have now found accommodation and the en bloc scene has since quietened down.


He added: “Supply will also be greater than usual due to the larger proportion of units owned by investors, as opposed to owner-occupiers, who usually put their properties up for rent.” During the recent boom, many people bought second or third homes as rental properties.


Jones Lang La Salle’s research head Chua Yang Liang is more bullish. He expects rents to hold steady as demand from foreign workers remains strong. In fact, he predicts that rents will grow “in the teens” this year before moderating to about 6 to 8 per cent next year. “The hiring of upper management level staff may have reached stable levels, but foreign banks such as Standard Chartered are hiring more employees at the middle-management levels, who also need housing,” he said.


ERA Singapore’s assistant vice-president Eugene Lim said that his company has seen a higher volume of leasing transactions this year and expects rents to rise by another 3 to 4 per cent this year.


Source: Today Newspaper

Developers face higher funding costs

Developers face higher funding costs




PROPERTY developers in Asia face a ‘double whammy’ of rising credit spreads on loans and banks lending less against the value of new projects, a senior Asian property fund manager said yesterday.


And the wider interest margins that banks have been demanding on loans since the start of the financial market turmoil are likely to be sustained, said Olivier Lim, chief financial officer of CapitaLand, South-east Asia’s largest developer.


Mr Lim and Ng Beng Tiong, the Singapore-based director of operations at ARA Asia Dragon Fund, were speaking at a panel discussion on the last day of a conference organised by Merrill Lynch that started on Tuesday.


Mr Ng said that although benchmark interest rates in Singapore and Hong Kong have fallen, ‘what we’ve seen is that the margins have shot up tremendously – more than double in many cases’.


Before the US sub-prime mortgage crisis broke, property companies in Asia could borrow at spreads of less than 100 basis points or one percentage point above interbank lending rates, Mr Ng said.


‘Now banks are quoting 200, 300 and for some smaller developers we understand that they’re being quoted 400’ basis-point spreads.


Besides paying higher interest rate spreads on loans, developers are also finding that the proportion of a project’s value that banks are willing to fund – the loan-to-value (LTV) ratio – has shrunk, he said.


‘In the bullish days, we were seeing 70-80 per cent LTV. Now banks are quoting 50-60 per cent, so it’s a double whammy for project financing.’


ARA Asia Dragon Fund is the flagship private real estate fund of ARA Asset Management, an affiliate of Hong Kong’s Cheung Kong Group. At the end of last year, the fund, which invests in major cities throughout Asia, had more than US$1.5 billion of capital from institutional investors worldwide, including Calpers, the largest US public pension fund.


CapitaLand’s Mr Lim said the first quarter saw ‘the worst credit market situation I’ve seen in my 19-year career’.


Although spreads have since narrowed slightly, ‘I think the blow-out in the credit margins will be sustained’, he added. ‘I don’t see it compressing to where it was last year.’


At CapitaLand, ‘we’re seeing, on average, rates go up by between 60 to 100 basis points, depending on whether it’s corporate risk or project risk’.


‘But we are sensing a flight to quality, so for us we’ve been able to raise about S$4 billion overall of credit debt from multiple sources in the first quarter alone. We still have access, but we do have to adjust to a higher margin. Thankfully, the cost of money is much lower, so the overall cost is about the same as it was last year.’


Last month, the firm raised another S$2 billion of bank funding for its new condominium development at Farrer Court. ‘Banks are still lending,’ he said.


In Asia, outside its main markets of Singapore, China and Australia, CapitaLand has been ‘probing many other markets’ including Thailand, Malaysia and the Middle East, ‘but it’s becoming much clearer to us that two countries are at the top of the list – Vietnam and India’, he said. ‘We’re starting to accelerate our investments in both of those countries.’


Meanwhile, despite suggestions that property prices in Singapore have risen too far too fast, ‘I think the market is a lot healthier than people indicate’, Mr Lim said.


Source: Business Times

Fears of US recession overblown: analyst

Fears of US recession overblown: analyst




(SINGAPORE) The Federal Reserve is likely to cut interest rates by another 25 basis points, before pausing to monitor the key economic data in US, according to the National Australia Bank.


However, its group chief economist Alan Oster felt that fears of a major US recession is overblown at present and forecast a US GDP growth of 1.2 per cent this year and 1.7 per cent next year.


Since last September, the Fed has slashed its key interest rate by 3.25 percentage points to 2 per cent.


Mr Oster was speaking to BT on the sidelines of a lunch forum organised by the CPA Australia.


On the issue of liquidity trap, Mr Oster said that: ‘Where the Fed is at right now, either they do one more or sit around for a while to see what the data says. We actually think they are very close to the bottom.’


In his presentation, Mr Oster also said that a slowdown in US consumption is still to come in 2008, while recovery is expected in 2009.


These forecasts are based on assumptions such as flat equity markets, 1.5 per cent growth in real disposable income, and that oil prices peak at about US$120 before falling to US$90 by later this year.


In Asia, growth is expected to slow only moderately as there are ‘enough dynamics’ in emerging economies of China and India.


In China, he sees slower growth in exports of around 20 per cent, while ‘retail also a touch lower – mainly in real terms given accelerating inflation’.


Overall, Chinese economic growth is expected to slow moderately to 9.5 per cent this year and about 8.9 per cent in 2009.


This year, India’s gross domestic product (GDP) could grow by 7.5 per cent, but drop to 6.4 per cent next year.


He remains optimistic about the economic prospects in Singapore, as the city state largely ‘reflects what is happening in Asia’.


This year’s GDP growth in Singapore is forecast at 5.2 per cent, while next year’s could hit 5.8 per cent.


Globally, GDP growth is estimated at 3.4 per cent and 3.2 per cent next year.


On the run-up in commodity prices, Mr Oster said that commodities are ‘close to the top . . . And so our forecast is some of them are clearly going to go down, particularly the agricultural side. So the wheat and the rice prices are expected to come down.’


‘I am not sure if iron or coal is going to come down, but if China slows, they will.’


The bank sees commodity prices falling 20 per cent from current levels in two to three years’ time.


Separately, Morgan Stanley said in a note yesterday that trade trends in Singapore are likely to continue to soften, while cyclical segments will likely face further pressures.


This came after Singapore economy posted higher exports and non-oil domestic exports last month.


Source: Business Times