News Highlights Wednesday 16 July_2008

Private home market stirs to life again
Developers sold 1,542 private homes in the second quarter, double the 762 units in the preceding quarter. This takes the total sold in the first half of the year to 2,304, according to the URA. The Q2 number was shored up by the sale of 801 private homes in June - a huge jump from the 453 units sold in May and the best month since August last year. CBRE predicts that full-year sales volume will come in at 4,000-5,000 units. URA's data showed that the stock of private homes that could be launched for sale but have been held back continued to mount, hitting 13,005 at end-June, up 20.5% from the preceding quarter. There were 3,379 units launched but unsold at the end of June this year - some 40.3% higher than the end-2007 number. For Q2, developers launched 1,820 private homes, taking the figure for first-half 2008 to around 3,200 units. Knight Frank's analysis showed that, in June, most units were launched for sale in the Rest of Central Region - which had a 57% share. The region also accounted for 57% of total private homes sold by developers in June. The highest-priced transaction in June was $3,653 psf at Nassim Park Residences.


- The Business Times, P1








Up 77%: New private home sales
Sales of new private homes shot up 77% to 801 units last month, on the back of more project launches. But the mood in the property market remains cautious, market watchers say. Last month, the total number of units launched by developers - mostly in the mass to mid-end segment - registered a jump of 124% to 1,069 units, according to URA. Developers are stepping up launches despite the weak sentiment as they want to launch ahead of the Hungry Ghost month, said Colliers. Last month's healthy sales figures were propped up by the volume at two 99-year leasehold projects. Clover by the Park accounted for 197 units sold - out of 308 units launched for sale - at a median price of $765 psf. The 348-unit Dakota Residences sold 144 of 210 launched units at $978 psf. Most of the properties sold last month were under $1,000 psf, indicating demand from upgraders, said Savills. June sales show there is latent demand but buyers are price-sensitive, said DTZ. This month's sales figures are expected to be even stronger owing to more new launches, consultants said. Colliers International's research shows that luxury apartment prices already fell 3.9% from the first quarter to an average of $3,049 psf in the second quarter.


- The Business Times, P1








12 MRT stations for Bukit Timah by 2015
12 new MRT stations will come up in the Bukit Timah area as part of Stage 2 of the Downtown Line. This phase, to be completed by 2015, will give Bukit Timah residents access to trains for the first time. The stations will also serve the Toh Yi and Bukit Panjang Housing Board estates, and take commuters to shopping malls such as Serene Centre, Beauty World and Ten Mile Junction. Stage 2 will intersect other MRT lines at Little India, Newton and the Botanic Gardens. This section spans 16.6km, from Rochor in the south to Bukit Panjang in the north. Taking the train is expected to shave travelling time from Bukit Panjang to Marina Bay by almost half an hour. Major construction on the line is expected to start in the middle of next year. The Downtown Line is being built in 3 stages and will have 40 stations, with trains running from the north-western and eastern areas of Singapore to the CBD and Marina Bay. Jones Lang LaSalle said properties within walking distance of MRT stations typically see an enhancement in value.


- The Straits Times, P3, H7









Choice Tanah Merah site for sale
A Government Land Sale (GLS) site at Tanah Merah Kechil Avenue is on sale by public tender. Bids are expected to be around $250 psf ppr - about 20% less than the $318.50 psf ppr paid for a neighbouring GLS site in 2006. The new site, which is on the GLS confirmed list, has a land area of 106,298.9 sq ft and a maximum permissible gross floor area of 297,643.4 sqft. CBRE commented that based on nearby properties prices and the current market situation, as well as higher construction costs in view of new planning guidelines on bay windows and planter boxes, they expect a new 99-year leasehold project in this location may fetch around $750-$800 psf, translating to a possible land price of around $240-260 psf ppr for the site. Knight Frank reckons the site could fetch an average price of $700-$750 psf and the land price should be $250-$300. The site can potentially be developed into a 10 to 12-storey condominium with about 230 to 270 units.


- The Business Times, P10








Investors play a game of caution as Q2 sentiment slips 13%: ING
Singapore investors seem to be cautiously optimistic that markets will rebound in the third quarter. But investor sentiment in some South-east Asian markets slid 13% in the second quarter this year, hurt by the global economic slowdown and regional political developments, according to ING's latest Investor Dashboard survey. The survey tracks the sentiment of mass-affluent investors each quarter in 13 Asia-Pacific markets. In the latest survey, Malaysia and Indonesia faced a decline in investor sentiment to ‘neutral’, from ‘optimistic’ previously. Singapore’s investor sentiment rose 2% this time. To hedge against inflation, Singapore investors are looking to park their money in stocks (49%), foreign currency (29%), gold and property (25%) and cash deposits (24%).


- The Business Times, P18








Property counters lose ground over rising costs, pricing power concerns
City Developments Ltd fell the most in more than four months, leading declines by Singapore developers after Credit Suisse Group AG said that rising construction costs and an inability to raise prices will erode profits. Singapore private home prices rose at the slowest pace in almost four years in the second quarter on concerns that the global credit squeeze will dampen economic growth. Prices of so-called mass market homes (those that cost between $1,000 and $1,200 psf) may change 'marginally' this year, said CapitaLand. Credit Suisse said that developers' profits may decline because of the risk of increasing construction costs, weaker confidence and lower pricing power, even for mass-market projects.


- The Business Times, P6








It pays to ACT when others hold back
Small home-grown property player ACT Holdings has made money by jumping into the market when other investors are cautious or even want out. ACT bought nearly a dozen homes in Sentosa Cove when the market was cool. The firm then found itself with red-hot homes as the market roared to life in 2006 and 2007. As a result, ACT's profits grew 10 times in 2 years to $15million last year. Now the company is looking at the US market, where many homes are hit by mortgage foreclosures. The company is trying to raise a US$20 million (S$27 million) fund to invest in distressed US real estate assets. ACT focuses on small landed homes, cluster housing, boutique apartments and conservation properties. This year, ACT, with partners Nobel Design and Fortune Group, aims to launch 40 units of cluster houses near Queen Astrid Park - a project called Astrid Hill Residences. It will also launch 60 units of cluster homes at Watten Rise called Watten Residences. It is building 3 bungalows in Braddell Heights that have yet to go on sale.


- The Straits Times, H22






Frasers Centrepoint in $30m India deal
Building a presence in India's residential property market, Frasers Centrepoint will acquire a 74% interest in Indian property firm KS Realty Constructions for $30.02 million. Frasers Centrepoint's subsidiary, Frasers India (I), entered into a conditional agreement with Kotak India Real Estate Fund-I and KS Realty for the deal. Kotak Fund will hold the remaining 26% interest in KS Realty. KS Realty owns a 20.7-acre plot of land along Old Mahabalipuram Road, which is known as the IT corridor in Chennai, India. According to Frasers Centrepoint, the target is for KS Realty to develop a 1,500-unit condominium project in phases over six years. Units will range from 1,300 sq ft 2-bedroom apartments to 1,800 sq ft 3-bedroom apartments. Blocks with prime views may have penthouses with duplex layouts.


- The Business Times, P7








China's H1 GDP rises 10.4%: sources
China's economy is slowing but growth was still in double digits in the second quarter despite a credit tightening campaign, weakening exports and the Sichuan earthquake. Gross domestic product grew 10.4% in the first half of 2008 compared with the same period last year, two official sources said.


- The Business Times, P14








Tampines Court owners file appeal
Owners at Tampines Court have opened up two fronts in their battle to save their estate's $405 million collective sale. One bid saw the sales committee lodge a High Court appeal to overturn a ruling by the Strata Titles Board (STB), while some owners made a direct plea to National Development Minister Mah Bow Tan. It is understood that Mr Mah has agreed to appeal to the STB on the owners' behalf to bring forward a crucial hearing date planned on Aug 7. The buyers - Far East Organization and Frasers Centrepoint - have said they are ready to complete the deal, but the onus was upon the vendors to secure the STB order within the agreed timeframe. Each owner would get about $700,000 should the sale go through.




- The Straits Times, H24