Are we looking at buildings only as money-spinners?

Are we looking at buildings only as money-spinners?

 

I READ “It’s the end of the Storey” (June 27) with disbelief.

 

How serious are we as a nation about preserving what little is left of our heritage? What, exactly, are these “engineering constraints” that make it impossible to construct the Downtown Line without demolishing the New 7th Storey Hotel? Since the Bugis station already exists, would it be fair to say that they will just be doing works underground? And if so, can they not tunnel around the building, rather than just directly below it?

 

After the recent demolition of the much-loved National Library (and going back even further, other historical landmarks such as the National Theatre, the Van Cleef Aquarium, the old Esplanade — Elizabeth Walk — and Satay Club), have we not learned our lesson? We can’t turn back the clock and save these buildings — some would say, monuments — but going forward, we can try our best to preserve those that are still with us.

 

I feel that we are still not doing enough in this area and tend to look at buildings purely from an economic standpoint — hence, you get the Raffles Hotel, Chijmes and the Singapore Art Museum. These structures are money-spinners and to the authorities, the New 7th Storey Hotel is merely an anachronism from the past, on its last legs, deserving of the wrecking ball.

 

It is not too late. I beseech the authorities to re-consider their decision and leave the New 7th Storey Hotel alone.

 

Source: Today Newspaper

Thakral seeks up to $99m for rest of Sovereign units

Thakral seeks up to $99m for rest of Sovereign units

 

By KALPANA RASHIWALA

 

THAKRAL Land is selling the remaining 17 apartments it owns at The Sovereign, a freehold condo in Meyer Road that it developed more than a decade ago.

 

Based on asking prices of $1,300-1,500 psf for lower-floor units and $1,800-2,500 psf for upper floor units, the total price works out to between $75 million and $99 million

 

Thakral is open to selling the units individually or to a single party. Market watchers reckon a bulk buyer who takes the whole 17 apartments would get some discount.

 

All the units are leased or about to be leased. Based on current monthly rents of $3.20 to $4.50 psf, the net yield works out to around 2.5 per cent, says Jones Lang LaSalle’s Singapore and South-east Asia managing director Chris Fossick, whose firm is sole marketing agent for the 17 apartments, each of which has four bedrooms.

 

A party that buys all 17 units may also hold the key to a potential collective sale of the condo, which has a total of 87 units. The 17 units that Thakral is offering represent 19 per cent of share value and about 26 per cent of the total sq ft area.

 

There is redevelopment potential as the site’s current Masterplan plot ratio – ratio of maximum potential gross floor area to land area – is 2.8, which is higher than the 1.8 plot ratio tapped by the existing property.

 

The unutilised plot ratio may be tapped by building an additional block or tearing down the existing project and redeveloping the 143,918 sq ft site into a brand new condo.

 

The 30-storey Sovereign, at 99 Meyer Road, received its Temporary Occupation Permit in 1993.

 

It is next to a 115,300 sq ft plot of land at 97 Meyer Road sold by Della Suantio Lee last year to Hong Leong Group for around $200 million. The price worked out to around $760 psf of potential gross floor area, including development charges (DC), according to an earlier report.

 

Dr Lee is the wife of Lee Foundation chairman Lee Seng Gee.

 

Source: Business Times

CCT expects financing to get more expensive

CCT expects financing to get more expensive

 

CAPITACOMMERCIAL Trust (CCT) expects financing to become more expensive after it raised US$1.2 billion to fund an acquisition of an office tower this year.

 

The manager of about three million square feet of commercial space in Singapore agreed in March to buy a 23-storey office block known as 1 George Street in Singapore’s business district for $1.17 billion. The trust said it will fund the acquisition with debt such as convertible bonds and medium-term notes.

 

‘We raised the debt at the right time before the increase in rates, but going forward, we see that as a greater challenge,’ chief executive officer Lynette Leong said at a real estate conference in Singapore this week.

 

CapitaCommercial Trust’s shares have fallen 21 per cent this year on concern that borrowing costs for the trust may rise, prompting Citigroup to downgrade the stock earlier this month.

 

Asia‘s real estate funding costs are likely to remain high over the next 12 months after rising as much as 700 basis points in the past year, Sameer Nayar, head of real estate finance at Credit Suisse Group, said this week.

 

CapitaCommercial said in April it plans to sell $280 million of bonds, with an option to raise another $90 million. It also issued $150 million of medium term notes and took on loans for the acquisition\ . \– Bloomberg

 

Source: Business Times

One apartment, 90 workers

One apartment, 90 workers

 

The private apartment in Balestier Road is just :1,300-square- foot :big – but it houses some 90 foreign workers.

 

:The 50-year old landlord reportedly charges occupants between $170 and $200 a month, and is believed to run similar lodgings in other parts of Singapore.

 

:When Channel NewsAsia visited the premises with a representative from the National Safety Council, conditions were found to be extremely cramped. Some 30 stuffy, narrow cubicles of various sizes were created using wooden partitions. Power sockets in the apartment were overloaded with up to four plugs each, and there were only two fire extinguishes available.

 

:Said council chairman Tan Jin Thong: :“If something were to happen, like a short circuit, having lots of clothes lying nearby will definitely cause a fire.” :Underscoring the hazard, the CNA news team observed a blackout while there.

 

:Besides the obvious health hazards, the apartment owner could be prosecuted for breaching fire safety regulations. Apartment owners who ignore fire notices and orders can be fined. — Channel NewsAsia

 

Source: Today Newspaper

Syariah-approved properties get boost

$137M SAUDI-S’PORE FUND

 

Syariah-approved properties get boost

 

A NEW Saudi-Singapore joint venture is looking to invest up to US$100 million (S$136.7 million) in syariah-complaint real estate in the Republic and in the region.

 

AEP Investment Management, formed by Saudi Arabia-based private investment firm Al Rajhi Group and Singapore’s AsiaEquity Partners, has already raised US$100 million and is looking to raise a further US$200 million.

 

It said on Wednesday that the joint venture will be based in Singapore and will focus on opportunities in real estate across the key markets of the Asia-Pacific region.

 

AsiaEquity founder Yusof Wahid said the credit crunch that has had an impact on property markets in the region is likely to create ‘real buying opportunities in the next two quarters’.

 

‘As value-added investors, we believe that at this point, the price levels will begin to consolidate for us to commence our acquisition activities in the markets that we like.’

 

The fund will invest in commercial, residential and industrial properties.

 

As a syariah-complaint fund, it will not invest in properties such as casinos or those where alcohol is served.

 

Source: Straits Times

Construction of Solaris has begun

Construction of Solaris has begun

 

CONSTRUCTION of Phase 2B of Fusionopolis has begun with the ground-breaking ceremony for a 15-storey building called Solaris.

 

It is being developed by Soilbuild Group — the first private sector developer at Fusionopolis cluster at one-north.

 

Its $148-million new building will cover :an estimated gross floor area of 540,000 square feet and is slated for completion in 2010. It will house research activities for :infocommunications , media, science and engineering industries.

 

Trade and Industry Minister Lim Hng Kiang (left), officiating at Friday’s ground-breaking ceremony, expressed confidence that Solaris will attract strong interest.

 

Already, developments in Phase 1 and 2A of Fusionopolis are attaining full occupancy before their official completion.

 

“The Fusionopolis cluster … will help to anchor high value economic activities and contribute to the development of Singapore as a knowledge-intensive economy,” said Mr Lim.

 

Source: Today Newspaper

 

 

What determines market value of property

What determines market value of property

 

I REFER to Mr Patrick Tan’s letter, ‘Valuation the culprit in artificially inflating HDB flat prices’ (June 17).

 

The market value of a property is the estimated amount for which it should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing where both parties acted knowledgably, prudently and without compulsion. It is not a situation of a willing buyer and an unwilling seller where the terms of purchase are favourable to the buyer. Nor is it a situation of an unwilling buyer and a willing seller where the terms of sale are favourable to the seller.

 

The transacted prices of comparable properties are generally the best evidence of the market value for standard properties like HDB flats. In the case of HDB flats, cash top-up is part of the price of the property sold and the transaction price is therefore a legitimate piece of evidence to rely on when valuing a property. The valuer’s job is to interpret the market, not make the market. The market is the final arbiter of what is an appropriate valuation. It is neutral as to affordability issues. The market itself will eventually adjust downwards if buyers deem the cash top-up excessive and refrain from transacting.

 

Valuers have to examine the micro and macro factors of the particular segment of the real estate market, together with the economy sentiment. Such factors will include demand and supply of the various micro residential markets, and legislation and policies pertaining to the particular real estate segment.

 

Factors affecting the private and the HDB residential market may be slightly different, and thus the property market cycle of each real estate segment is never identical.

 

This also accounts for the difference in values of a property in different timeframes and different values for similar properties in different locations.

 

Janet Han (Ms)

Secretariat

Singapore Institute of Surveyors and Valuers

 

Source: Straits Times

Soilbuild breaks new ground at Fusionopolis

Soilbuild breaks new ground at Fusionopolis

Phase 2B kicks off with Solaris, a ‘green building’ for creative industries

 

SOILBUILD Group Holdings staked its claim as the first private developer at one-north business park Fusionopolis yesterday.

 

‘Following the award of Fusionopolis Phase 2B in April, Soilbuild will develop and lease out its new flagship project Solaris to businesses in the research and development-based science, engineering, infocommunications and media industries,’ Soilbuild executive director Low Soon Lim said at the ground-breaking ceremony yesterday.

 

Solaris, for the creative industries, is a 15-storey ‘green’ building that is expected to save $500,000 to $700,000 a year in water and electricity charges at full occupancy rates.

 

With a gross floor area of about 540,000 sq ft, Solaris is estimated to cost about $148 million and will house a mixture of multinational private firms, research laboratories and retail space. It is expected to be completed by the first half of 2010.

 

Construction of Solaris comes on the back of strong demand for business space in Fusionopolis.

 

‘With Fusionopolis Phases 1 and 2A attaining full occupancy before their official completion, I am confident that Solaris will receive similarly strong interest,’ Trade and Industry Minister Lim Hng Kiang said at yesterday’s ground-breaking ceremony.

 

Soilbuild was awarded the project by one-north’s master developer JTC Corporation under a concept and fixed-price tender.

 

Solaris will be the first of many private developers at Fusionopolis as part of a plan for large private participation as a whole.

 

JTC assistant chief executive Philip Su said that Phases 3 and 4 of Fusionopolis, expected to be ready by 2013, will also be developed by the private sector. The tender for Phase 3 will be out by this year.

 

‘While JTC is good at building labs like the ones in Fusionopolis Phase 2A, the private sector is best at building business park space,’ he said. ‘They keep costs down, are more efficient and complete it in a shorter amount of time. JTC should not do what the private sector can do better.’

 

Phases 3 and 4, with a gross floor area of 50,000 sq m, will mainly comprise general amenities needed to support the businesses in Phases 1 and 2 at Fusionopolis.

 

Besides Fusionopolis, one-north houses the Biopolis, a biomedical science research and development area, and Wessex Estate, a residential area.

 

Source: Business Times

SPH’s Paragon valued at $2b

SPH’s Paragon valued at $2b

 

SINGAPORE Press Holdings’ Paragon shopping centre in Orchard Road is now worth $2 billion, about 10 per cent up from its valuation of $1.82 billion a year ago.

 

The higher valuation came amid higher rents and continued strong demand.

 

‘Rents are firm, increasing as of last June. Occupancy is at 100 per cent,’ said Lydia Sng, executive director of valuations for property consultancy Knight Frank, which carried out the latest valuation yesterday. The earlier valuation of $1.82 billion on June 28, 2007, was also done by Knight Frank.

 

The Paragon is undergoing a $45 million makeover to update its facade and increase retail space. The renovation is slated for completion in October.

 

SPH said earlier that the makeover was part of a continuous effort to enhance the retail environment and shopping experience for Paragon customers.

 

In addition, the commercial space above its retail podium will be expanded – at a cost of $37 million, including the payment of land premium. This is scheduled to be completed by end-2008.

 

The total cost of the facade makeover and the addition of commercial space is $82 million.

 

Paragon remains open and operates as it normally does during the renovation period.

 

SPH will be releasing its financial results for the third quarter ended May 31, 2008, on July 11.

 

Source: Business Times

Fund managers see a sluggish second half: poll

Fund managers see a sluggish second half: poll

But they still see opportunities in commodities and infrastructure

 

 

FUND managers’ sentiment on the economy and the equities market has taken a turn for the worse over the course of six months.

 

 

They now expect economic growth to be sluggish at least for the second half of this year and possibly next year, a poll of 15 fund managers by OCBC Bank’s wealth management unit shows.

 

Most of these fund managers reckon the US sub-prime crisis has not completely blown over and that its economic impact will be felt in the coming months.

 

In the survey, Aberdeen Asset Management said the economic effects of the credit crisis have yet to be fully felt, and it believes the US economic slowdown is firmly entrenched because of the housing and credit problems.

 

‘House prices in the US are likely to fall further, and we may see more writedowns from financial institutions on mortgage-backed securities that use owner-occupied homes as collateral,’ Aberdeen said in the poll.

 

Prudential Asset Management (Singapore) noted that while the sub-prime crisis has seen its worst, problems still lurk with other forms of securitised debts such as those related to credit cards.

 

Some fund managers are also concerned about the impact that inflation will have on economic growth and corporate margins, the poll shows. They cited inflation, cost pressures and the volatility in commodity markets as key risks to investments over the next 12 months.

 

Future growth will hinge largely on measures taken by central banks to tackle higher inflation, said DBS Asset Management. ‘The harder the line taken in terms of raising interest rates to combat the situation, the worse the final outcome for growth becomes.’

 

According to Schroder Investment Management, ‘the risk of earnings disappointments and downgrades are real’. Lion Global Investors said ‘downward revisions to earnings are likely to continue’.

 

In the light of these concerns, fund managers who were mostly positive on equities six months ago have turned more cautious. Allianz Global Investors, for instance, favours short-term money market instruments and cash.

 

But fund managers still see investment opportunities arising in selected areas, including commodities, precious metals and infrastructure.

 

In the poll, DWS Investments said it favours investments in soft and hard commodities, including gold and precious metals which it reckons will do well in an inflationary environment.

 

Barclays Capital is cautiously bullish about sectors like energy and basic resources which have positive industry fundamentals. It also finds the valuation of US and European equities inexpensive.

 

Lion Global Investors, however, said it favours equities over bonds in the longer term as the valuations of equities are relatively more attractive.

 

Source: Business Times