News Highlights Wednesday 4 June 2008

The incredible shrinking condo
An emerging trend in private housing is compact, capsule condos within the city. Targeted at young singles and property investors, some new studios have shrunk in size to as little as 300-400 sq ft, as developers try to make their homes more affordable amid rising costs. At least 20 new projects launched within the past year have had units smaller than 500 sq ft. The recent proliferation of such projects takes place especially in Farrer Park, Balestier and Dhoby Ghaut. Home prices in these areas start at just below $1,000 psf and go up to $1,600 psf. For a 400 sq ft condo, this translates to well below $700,000. Most of these boutique projects are fully sold, and the most recent launches have seen good take-up rates. Huttons Real Estate Group said buyers are a mix of locals and foreigners. Some are single professionals while others are investors looking for good rental yields.

- The Straits Times, P3




Sim Lian Land is top bidder for DBSS site at Simei
Sim Lian Land Pte Ltd is the top bidder in a HDB tender for a Design, Build and Sell Scheme (DBSS) site at Simei Road. The $52 million bid, or $137 psf ppr was at the lower range of market expectations. The fifth DBSS site has a lease term of 103 years and a maximum allowable gross floor area of 380,300 sq ft. Sim Lian Land said that the site is expected to yield about 340 units. Five-room flats would make up 60-70% of the units, and the rest would be a mix of four- and three-room flats. Sim Lian Land plans to launch the units for sale next May. The breakeven cost would be about $350 psf of sellable area. Cushman & Wakefield managing director said that the small number of bids reflects the cautious attitude that developers have adopted.

- The Business Times, P11




Developers turn landlords as property market stays quiet
Property developers such as Koh Brothers and GuocoLand, which bought collective sale sites during boom times, are now becoming landlords as they wait out the market slowdown. They are leasing out apartments they bought to existing occupants as a way to generate some income instead of leaving them vacant. For example, GuocoLand had bought Leedon Heights off Holland Road for $835 million and Sophia Court in Adis Road for $230 million. It is now offering residents short-term leases at Sophia Court (ranging from $800 to more than $4,000 a month) and Leedon Heights (three-bedroom unit at $2,850 a month).

- The Straits Times, H28




Uncertainty over lease top-ups may affect sentiment
The government's recent decisions to either not top up leases of some leasehold sites to the original 99-year term or to approve shorter lease extensions could affect sentiment towards investment sales of such properties. But Knight Frank executive director said that if an investor is planning to develop a new office block and hold it for rental income, he may not necessarily be deterred if he receives a shorter lease top-up or even no lease top-up on the site, since the rental income from the new office block would not vary according to the site's leasehold tenure. DTZ executive director also did not think the government's decisions would scare away investors as the shorter lease-term will be priced into the property.

- The Business Times, P2




Singapore named 'Best Seaport in Asean'
The Port of Singapore has received another accolade - the inaugural 'Best Seaport in Asean' award at the Frost & Sullivan Asean Transportation and Logistics Awards. The Asean Transportation and Logistics Awards is an annual event held to recognise outstanding performance by companies in the transportation and logistics industry in South-east Asia.

- The Business Times, P11




Asia-Pac fund management - the challenge and reward
The Asia-Pacific accounts for more than 60% of the world's population, representing up to 3.9 billion potential clients, according to KPMG's 'State of the Investment Management Industry in Asia Pacific’ report . It estimates that 27.1% of the world's high net worth individuals are located in the Asia-Pacific. Much of this wealth is held in unstructured assets, particularly real estate and bank deposits.

- The Business Times, P4




S'pore is biggest Asian investor in Japan
Among Asian economies, Singapore is the biggest direct investor in Japan. And within Asia, Singapore is the third-largest destination for Japanese multinationals - after China and Thailand. Singapore companies pumped more than US$400 million into Japan last year, taking their cumulative investment there to US$4.62 billion. Japanese MNCs injected more than US$3 billion into Singapore last year.

- The Business Times, P11




S Korea vows to achieve price stability
South Korea vowed to bring inflation under control after it hit a seven-year high in May. Currency dealers have said authorities used some of its US$260 billion in foreign exchange reserves to boost the value of the won last month to offset rising import costs.

- The Business Times, P12



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