News Highlights Wednesday 21 May 2008

Seletar's colonial houses in demand as bulldozers roll in
Rentals have soared for the 131 units of the Seletar’s houses that will remain after the area's development as aerospace hub. In some cases, they have just about doubled. This is despite the construction work until 2018, when the 300ha Seletar Aerospace Park is ready. The higher rents reflect the current market conditions, said Singapore Land Authority (SLA). Of the 378 Seletar houses, 204 will be retained, and 174 demolished. Of those to be left standing, 131 will be retained as homes, and the remaining 73 redeveloped for non-residential use. A two-storey terrace house recently attracted a bid of $5,000 - more than three times the recommended rent of $1,500 set by the SLA. Islandwide, rental rates jumped 69% between the first quarter of 2006 and the first quarter of this year.


- The Straits Times, H7



Brokers’ Take – Property Sector - CIMB-GK Research
Things are slowly improving despite the negative news on the property sector. Developers are reneging on en-bloc deals, high-end prices are under pressure, while leasing transactions and private residential sales volume have fallen. But CIMB-GK suggests that the general mood appears to be improving. While a potential slew of supply appears imminent, the government's immigration policy could drive demand for housing. The sales of commercial properties continue to be brisk. While transaction yields have risen, recent benchmark prices paid for office properties suggest renewed vigour for this asset class.

- The Business Times, P6




Banks see plunge in home prices in next two years
Barclays Capital and Credit Suisse have forecast drops of up to 40% in home rents and prices, as demand and supply dynamics move in favour of buyers. The reports pointed to the new homes coming on the market, climbing vacancy rates, a rising number of unsold condominiums and fewer rental transactions. Both banks also noted that developers were more generous with price cuts, stamp duty rebates and agent commissions in an effort to move units. Not all property analysts have such a gloomy take on the housing sector. A Kim Eng analyst believes the oversupply situation may be overstated. While there are 32,000 units being built and 42,000 more in the pipeline, current market sentiment could help slow the rate at which the planned units come onstream. Developers could also keep lands in their landbank rather than develop them if there is no demand, suggested Macquarie Securities' head of Asean research. The upcoming integrated resorts will give Singapore a boost and, while there may be a temporary weakness, home prices are unlikely to collapse.

- The Straits Times, H22




Foreign unis bet big on a S'pore school
Singapore's private education sector is luring several foreign universities here. This month, Scotland's Queen Margaret University became the first UK university to open a full campus overseas - a $38 million facility located off Balestier Road. In March, Perth's Curtin University of Technology announced it would set up a campus here by year's end. To date, 16 major foreign universities have become part of the EDB’s Global Schoolhouse initiative. Seven have set up a full campus here, while others have ties with local universities to bring their courses to Singapore.

- The Business Times, P1




GST system ranked world's 4th most friendly
THE value-added tax (VAT) system in Singapore is ranked the fourth most friendly in the world, based on the Indirect Tax/GST international survey. KPMG said that a net balance of 4% of respondents said it was easy to do business in Singapore from a VAT perspective, after the UK, Netherlands, Finland and Switzerland. The study, which will be released in the third quarter, polled senior finance professionals in over 500 large corporations in 22 countries, and ranks several markets in order of VAT friendliness.

- The Business Times, P12



Thakral to give up electronics to focus on real estate
Thakral Corp plans to move away from its principal business of consumer electronics distribution, and move into the real estate industry. The company will tap the expertise and deal flow of its key shareholders, who have expertise in real estate and infrastructure regionally and globally. Thakral added that going into real estate and related infrastructure investment in the pan-Asian region is expected to offer attractive returns to shareholders in the foreseeable future.

- The Business Times, P8