News Highlights Wed 11th June 2008

18th floor of Peninsula Plaza sold for $15m
The 18th floor of Peninsula Plaza near City Hall has been sold to a Taiwanese trading company for $14.9 million, working out to $1,750 psf of strata area. It is below what the seller Novelty Department Store, part of the Novelty Group, wanted - $17.5 million or $2,050 psf of strata area. The six units have a total floor of about 8,500 sq ft and were put on the market in early March through an expression of interest exercise. The six units are tenanted at about $4 psf, but rents in the building have risen to as much as $8 psf so the firm can look forward to a better return when the time comes to renew the other leases. The market for strata-office units has remained fairly active. While office rent increases have started to moderate, rents in general are still supported by demand from expanding firms and tight supply.

- The Straits Times, H22




Sengkang West going for a makeover as recreation hub
Sengkang West is planned to be redeveloped into a suburban recreational hub. Sengkang West is home to about 35,000 residents but is relatively undeveloped compared to the neighbouring Sengkang and Punggol areas. The changes will cater to the needs and lifestyle of residents, more than half of whom are couples in their 20s to 40s. These will include a Sengkang sports and recreation centre, which is almost complete. A section of the Punggol River will be dammed so that there will be a calmer reservoir area where residents can take part in water sports activities. A Sengkang riverside park will also be built nearby, and a waterfront deck, lined with restaurants, will overlook the river.

- The Straits Times, H5




Brokers’ Take – Singapore Real Estate – Goldman Sachs
Goldman Sachs still holds a bullish view of Singapore property, but in the near-term, the standoff between buyers and sellers has led to a prolonged period of weak sales volumes. Goldman Sachs expects negative residential market sentiment to persist into 2009 amid possible economic weakness and increase in supply. They forecast Singapore residential prices falling 10% - 10% for prime homes and no change/5% for mass homes in 2008/09. Goldman Sachs sees developers facing a weak residential market in Singapore and overseas, particularly China and Vietnam. For China, residential prices in 2008 are expected to fall 15-20% from end-07 level. In Vietnam, government tightening measures to fight inflation will lead to a 10% price decline.

- The Business Times, P6




HDB pricing policy limits impact of rising costs
Construction costs for Housing & Development Board (HDB) flats have increased but the impact on buyers is likely to be limited, due to HDB's pricing policy and cost-control measures. One way to control costs is to simplify some of its projects. The government is also withholding some projects to ease pressures on the construction sector. For new flats, the increase in construction costs will probably feed indirectly through to the buyers as the market price of flats goes up. The prices of new flats are based on the market prices of resale HDB flats, not costs. Hence, HDB assured that the prices of public housing will remain affordable. HDB yesterday launched 382 flats for sale at Straits Vista @ Marsiling under the Build-To-Order system. The project will comprise 50 three-room units with an indicative price range of $116,000 to $164,000, and 332 four-room units from $184,000 to $257,000.

- The Business Times, P9




China's economy to grow 10%
China's economy is likely to grow about 10% in 2008 despite the global slowdown, and the government expects to rein in inflation. Growth will be slower than last year but China's fundamentals remain strong, said the National Bureau of Statistics' chief economist. China's inflation rate slowed more than what economists estimated to be 7.7% in May. China's economic growth slowed to 10.6% in the first quarter from 11.9 % for the whole of last year. China's benchmark one-year lending rate is 7.47%.

- The Business Times, P15




New budget for SICC clubhouse gets go-ahead
Members of the Singapore Island Country Club (SICC) have voted in favour of a new $90.3 million budget to build a new 25,000 sq m clubhouse at Upper Thomson Road. The budget was revised upwards because of soaring construction costs. The new clubhouse will be ready by mid-2010.

- The Business Times, P4



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