News Highlights Wednesday 16 April 2008

Private home sales tumble, prices weaken
Developers sold only 795 private homes in the first quarter of this year – just about half the 1,469 units that they had sold in the preceding quarter. The islandwide median price of private homes (excluding executive condos) sold by developers dipped 0.8% from $1,064 psf in February to $1,055 psf in March, with the decline coming from the Outside Central Region. The median price there slipped about 3.8% from $844 psf in February to $812 psf in March. The median price in the Core Central Region jumped from $1,723 psf to $2,450 psf, while that for the Rest of Central Region rose from $1,095 psf to $1,104 psf over the same period. These figures are based on URA’s monthly survey of developers’ sales. Developers sold 301 private homes in March, a significant improvement from 174 units in February but slightly lower than the 320 units for January. URA’s data showed that developers launched a total of 642 private homes (excluding ECs) in March, up significantly from 343 units in February. Jones Lang LaSalle, looking only at private apartments and condo sales, said the ratio of units sold to units launched is 46.4% in March, slightly lower than the 47.5% in February. CBRE said that the current market sentiment is likely to continue into the second quarter.

- The Business Times, P1




Choice Homes unit top bidder for site
A subsidiary of NTUC Choice Homes Co-operative placed the top bid of $290.19 million or $460 psf ppr for a 99-year leasehold private condominium site at Loron 2/3 Toa Payoh. The bid was about 23% lower than the $601 psf ppr that property giant Far East Organization paid for a condo site next to Ang Mo Kio hub in September last year. That plot is about 2 MRT stops away from the latest parcel, which is a stone’s throw from Braddell MRT station. The $601 psf ppr for the Ang Mo Kio Avenue 8 site is a record for 99-year suburban condo land, and that tender attracted14 bids. In contrast, yesterday’s tender for the Toa Payoh plot drew only 4 bids. The other bids came from GlucoLand unit First Capital Holdings, Frasers Centrepoint and a joint bid by Hoi Hup Realty and Sunway Developments. CBRE estimates the breakeven cost for Choice Homes would be around $800 psf. Choice Homes CEO said that the 43-strorey project would target the upper end of the mass market, more affluent HDB upgraders given the attractiveness of the location in Toa Payoh. Choice Homes is in talks with possible joint-venture partners.

- The Business Times, P11




Dent in Singapore investor optimism
According to a survey of investor briefs and outlook conducted by banking group ING Asia Pacific, Singapore’s investor sentiment fell 35%, the largest decline of 13 countries in Asia. Investor sentiment in Singapore stood at 88 for Q1 2008, down from 136 in Q4 2007. Singapore came in thirds in terms of being least optimistic. ING said that there was a further decline in investor sentiment in Asia, reinforcing that the region is not insulated from the global market sentiment. The less buoyant sentiment in some markets was tempered by optimism in fast-growing markets like China and India. These two reflected the highest levels of investor optimism in Asia, with investor sentiment index scores of 136 and 168 respectively. Singapore investors remained less optimistic about the longer term than their Asian counterparts – slightly over a quarter of respondents in Singapore indicated that they have a positive outlook of the economy in Q2 2008. More than a third of respondents here believed that property prices in Singapore will drop and about one-forth of these investors expect it to drop by 5 to 7.5% in the next three months.

- The Business Times, P36




Kim Eng’s Ronald Ooi cuts losses on condo deal
Kim Eng Holdings managing director Ronald Ooi, in his personal capacity, is believed to have led a group that backed Bravo Building Construction on its failed $516 million purchase of Tulip Garden. Mr Ooi and the group were instrumental in raising the initial $25.8 million or 5% deposit on the Tulip Garden sale which has since been forfeited. Mr Ooi is said to have decided to cut losses on the acquisition in the face of weakening sentiment on the prime property front.

- The Business Times, P2




Global property firms showcase projects here
While Cityscape Asia is very much a platform for the real estate industry to market its projects and services, the only Singapore developer exhibiting this year is City Developments Ltd (CDL). It is part of the “Singapore: Building Green Pavilion” supported by the Building and Construction Authority. Major companies with representation at Cityscape Asia 2008 were from Hong Kong, Malaysia, the UK, Germany, the United Arab Emirates, and others. Malaysian developers are making their presence felt, with UEM Land and SP Setia taking up large exhibition spaces. Also making their mark are developers from the Middle East.

- The Business Times, P10




Property, construction hit by election fallout
Malaysia’s election was toughest on the construction and property sectors, with both indices falling by over 20% in the first quarter on fears that gains by the opposition coalition would lead to tighter vetting of projects. The construction sector fell nearly 23% in the first quarter. The property sector took the worst hit, plunging 24.4% in the first 3 months as the new state governments – particularly those in the two most industrialized states of Selangor and Penang – were expected to vet proposed property projects more closely.

- The Business Times, P18




Dubai, China firm to launch fund
Dubai International Capital (DIC) and Chinese firm First Eastern Investment Group will launch a fund that will invest in Chinese companies. The joint venture is expected to raise US$1 billion and will be called China Dubai Capital. It will invest in a wide range of sectors including infrastructure, resources, healthcare and services. DIC’s emerging market division aims to manage more than US$5billion in assets in Asia, the Middle East and North Africa in the next 3 years.

- The Business Times, P19




Inflation to remain fairly high in 1st half
Singapore’s inflation rate will stay at record levels despite a tightening of monetary policy last week to combat rising prices. The Monetary Authority of Singapore expects inflation this year to settle at the upper half of the 4.5 to 5.5% range.

- The Straits Times, H26