News Highlights Friday 28 March 2008

Choa Chu Kang residential parcel up for sale
The URA launched a 1.9-hectare residential site in Choa Chu Kang drive for sale by public tender. Analysts reckon the 99-year leasehold site could fetch $230-270 psf ppr, or $131.7 million to $154.6 million in all. The site has a maximum gross floor area of 572,600 sq ft. bidders may include Far East Organization, Allgreen and Centrepoint, according to Colliers International. A project on the latest site should be popular with mass-market buyers. According to Savills, mass market private homes are still in good demand because of the strong HDB market, where many sellers are getting large amounts of cash-over-valuations for their flats. There is also a ready pool of HDB upgraders in Choa Chu Kang. Colliers said that at a bid price of $230-250 psf ppr, the breakeven price will come to about $560-580 psf. Developers would be looking to sell the new units at prices ranging between $620-650 psf. Savills believes units could go for about $700 psf, with some 500-550 units built.

- The Business Times, P12



S’pore-India economic ties on SM’s agenda
SM Goh said that one key initiative to speed up the pace of Singapore’s economic partnership with India is a speedy conclusion of the Asean-India free trade agreement. He also said that another initiative is to persuade Indian leaders to free up aviation, which would promote freer flow of trade, investments and people. A third initiative that Singapore is working on with India is to funnel third-country investments into the country, particularly from Japan. India’s gross domestic product expanded by more than 9% in the past year, making the nation the fastest-growing free market economy in the world.

- The Straits Times, P14



New HDB grant for filial singles
Single Singaporeans who opt to buy an HDB resale flat in order to live with their parents can get a housing subsidy of $20,000. The $20,000 subsidy – called the higher-tier Singles Grant – starts on Tuesday. Applicants must be aged 35 and above, first-time HDB buyers and must not earn more than $3,000 a month if they are buying alone. They must also commit to living with their parents in the flat for at least 5 years. Parents cannot buy or own another HDB flat or invest in private property within this period.

- The Straits Times, H4



Flying Club aims to sign up Asia’s super rich
The growing number of Asian millionaires is expected to spur demand for luxury goods and services, including a high-society club for people with their own planes. The Flying Club has a membership fee of $30,000 and aims to attract Asian jetsetters. According to the 2007 report co-authored by Merrill Lynch, there are about 2.6 million Asians with over US$1 million in liquid assets, accounting for 27% of the world’s millionaires. Leading the swell are Singapore, India and Indonesia.

- The Straits Times, H18



Singapore’s growth could slow to 3% if US enters recession
The growth figure is expected to be 5.5% if the US experiences a slowdown instead, predicted by the Econometric Modelling Unit of NTU’s Economic Growth Centre. A recent Monetary Authority of Singapore survey found that economists and analysts had lower growth expectations for this year to 5.6%. CIMB-GK economist said that 3% sounds like the worst-case scenario, while 5.5-6% is still doable because of the growth momentum carried over last year.

- The Straits Times, H30



Worst case: 3% growth, best case: 5.5% - NTU
The NTU Economic Growth Centre based its forecast on the US suffering a mild period of minus -0.5% growth in the first half of 2008, before recovering in Q3 and Q4. NTU noted that industry forecasters were predicting a close to 50% chance of a US recession in the first half of 2008. In the optimistic scenario where the US economy escapes a recession and manages 1.9% growth for the year, Singapore’s GDP could grow a decent 5.5%. If the US does go into a recession, the negative wealth effects could be large but investment is likely to stay strong due to construction projects and the integrated resorts. Inflation is likely to moderate once the pass-through of last year’s GST hike tapers off in Q3

- The Business Times, P1



Property trust to acquire office building for $1.17b
CapitaCommercial Trust (CCT) plans to buy a three-year-old office block in the Central Business District for $1.17 billion from its biggest shareholder, CapitaLand. The 1 George Street transaction works out to $2,600 psf of net lettable area. CapitaLand will ensure a minimum net property income of $49.5 million a year for 5 years from the day the sale is completed. This translates into a net yield of 4.25% a year on the purchase price. According to Cushman & Wakefield, the 4.25% yield is reflective of the current office market. CapitaLand said it expected a gain of about $47 million from the sale.

- The Business Times, Property P9



$484m gain in value of A-Reit properties
Ascendas Real Estate Investment Trust (A-Reit) said the book value of its investment properties rose $483.6 million – about 14.2% - during the latest annual valuation exercise. A-Reit attributed the increase to an improving industrial property market, which has led to higher occupancy and higher rents across its portfolio. Valuations were revised upwards across all sectors, with the business and science parks sectors registering the largest appreciation.

- The Business Times, P5



CapitaLand to build Viet condo
CapitaLand will build a US$500 million project in Ho Chi Minh City with a Vietnamese partner. CapitaLand will take a 60% stake in the proposed joint venture. Thien Duc, CapitaLand’s strategic partner in The Vista condominium in Ho Chi Minh City, will hold the other 40%. CapitaLand will build a 28-storey condo with about 1,400 apartments and commercial and retail space on a 6.7 hectare site. It aims to launch the first phase of the project by the second quarter of 2009. CEO of CapitaLand Residential said that CapitaLand will continue to look for prime development sites in Ho Chi Minh City and Hanoi to build quality homes. It will be building more than 4,200 homes in Ho Chi Minh City. According to CBRE, Vietnam’s residential property market is booming but buyers are becoming more discriminating – well-priced quality developments are, and will remain the top sellers.

- The Business Times, P6