News Highlights Tuesday 18 March 2008

Markets and US dollar slump on banking fears
The near collapse of Wall Street financial giant Bear Stearns stunned investors along with the unveiling of emergency measures by the US Fed. The Straits Times Index went down 46 points from last Friday, closing at 2,792.75 points. Shares in India, Hong Kong and Japan were hit the hardest. Among the latest drastic measures, the Fed will provide emergency funds to more financial institutions, acting as a “lender of last resort” to major investment banks classified as primary dealers. The Fed also cut the interest rate for such loans from 3.5% to 3.25%.

- The Straits Times, P1



New home sales nosedive in Feb
Only 185 out of 343 units were sold in February, down from 328 in January. The poor property market performance, coupled with the continuing quietness of the market this month, prompted predictions that new home sales this quarter would be one of the lowest levels. Property consultants said last month’s feeble figures were due to the Chinese New Year holiday and the global financial crisis in the US. But home prices are still holding steady. At Hong Leong Holdings’ Aalto, two units were sold for a median price of $2,619 psf. The best performer last month was the Cosmo condominium, where 41 out of 45 units were sold for between $1,048 psf and $1,152 psf. Waterfront Waves and La Casa were also the top three projects with most units sold in February.

- The Straits Times, P4



Only one collective sale done so far this year
Residential estates pushing for a collective sale face a tough market due to the escalating US sub-prime mortgage crisis and a jittery stock market. Just one small deal has been sealed so far this year. The sole deal was Link (THM) Holdings buying freehold Ban Guan Park in Holland Road for $31.1 million, with plans to build landed homes. The release of more affordable 99-year leasehold sites by the Government may sway some buying interest away from private prime freehold residential sites.

- The Straits Times, H18



Commercial units, residential site up for sale
Seven adjoining commercial units in Singapore Shopping Centre and a freehold residential development in District 11 were up for sale yesterday. The seven units will be offered together and the asking price is in the region of $1,300-$1,500 psf, working out to some $5.1-$5.9 million in total. The units are offered with vacant possession and 99-year leasehold tenure with effect from May 1, 1948. Pastoral View, the residential site in District 1, is up for collective sale with a price of $95 million, working out to $996 psf per plot ratio. The site can be redeveloped up to 36 storeys and is located at the junction of Bassein road and Akyab Road.

- The Business Times, P10



MGPA says Singapore office demand underestimated
Macquarie Global Property Advisors (MGPA), which has invested about $4.5 billion in Singapore real estate in the past 18 months, is optimistic about market prospects and reckons demand for office space is underestimated. Chief Executive Simon Treacy says that the office market will experience strong take-up because Singapore’s capital markets will grow more than expected. Prime-grade Singapore office rents are expected to appreciate between 10 and 25% this year. MGPA see demand in top-end, best-of-class residential and the top end of the mass market. MGPA-managed funds were the biggest real estate investors in Singapore last year.

- The Business Times, P32



Investment sales could hit $2.5b this year: CBRE
Property investment sales this year could be substantial – about half of the record $54.58 billion clocked last year. This is based on the estimate of $5.91 billion of investment sales deals struck in the first two-and-a-half month of 2008. The residential sector accounted for 38% of total investment sales. Investors’ demand for private residential land continued to be lukewarm in the first quarter of 2008. Developers are no longer as keen to acquire more sites compared to last year as most of them have built a relatively strong inventory of freehold residential sites.

- The Business Times, P32