DAILY MARKET UPDATES 2nd August 2008

Private home rents may wobble but won't crash
Developers and other analysts say that the number of completed homes may not be that high and the economic situation next year not that bad. URA put the number of landed and non-landed private homes expected to be completed in 2009 at 10,418, compared to earlier CBRE’s data of 13,400. CapitaLand’s in-house estimates say about 12,000 units. With demolitions of about 1,700-1,850 units in 2009 to consider, net supply next year could therefore come in even lower. Many of the new units coming onstream in 2009 and 2010 have already been sold, and not all of them will end up on the rental market. The number of HDB resale applications also rose 22 % quarter-on-quarter. HDB upgraders who buy mass market private units will not rent out their new homes and many of the units in new mass market condos completed in 2009 and 2010 will not be part of the supply for renters. For now, while rental growth is slowing down, it is still on the uptrend. 2.5% growth in Q2, slower than the 6% increase in Q1. The other bigger factor will be the state of the macroeconomic environment. CBRE adopted scenarios in which the economic climate either stays the same or worsens in 2009 to arrive at its forecasts. Other analysts, on the other hand, expect things to turn around in the second half of 2009. For now, jobs growth is continuing apace, they point out. 70,600 new jobs were created in the Q2, down only slightly from a record 73,200 jobs in Q1 and the second highest job creation rate on record. Citigroup economist is concerned about a slowdown in financial services hiring but companies in other industries should continue hiring next year. The overall pool of renters should therefore continue to climb in 2009. Savills Singapore said growth in mass market and HDB rents should continue next but asking rents at large high-end apartments - of 4,000 sq ft and more - could fall as companies cut back on housing allowances for their employees.

-The Business Times, P1




CapitaLand to launch freehold condo soon
CapitaLand plans to launch in the second half of this year a freehold condo - Urban Resort - with about 70 units on the Silver Tower site in Cairnhill. Average price is to be above $3,000 psf. CapitaLand has also sold 11 of the 40 units released so far at Latitude at Jalan Mutiara in the River Valley area at an average price of $2,400 to $2,500 psf. Over at Tong Watt Road, it has sold close to 30 of 80 units released recently at The Wharf Residence; prices range from $1,500 to $1,900 psf. CapitaLand are positive that the demand is still very good for the mass market, whereas there won’t be a massive demand in the high-end side. And given Singapore's limited land resource and with population projected to grow to 6.5 million, in the long term, property prices will go up.

- The Business Times, P4 (Also read The Straits Times, S35 – CapitaLand gains dive, flat property market expected)



URA gets $51m bid for hotel site
URA has received a committed bid of $51 million for a hotel site at Kallang and Jellicoe roads. This works out to $249.6 per sq ft per plot ratio (psf ppr) for the 45,451 sq ft site. The site, which has a maximum permissible gross floor area of 204,363 sq ft, will now be put up for public tender. Knight Frank believes that the tender could attract bids in the range of $400-$450 psf ppr. But poor market sentiment or lower-than-expected visitor arrivals in the coming months could result in lesser bids of $330-$400 psf ppr. URA projects that a 455-room hotel can be built, which Knight Frank reckons would be positioned as a business-class establishment. Including this site, there are 10 hotel development sites on the GLS reserve list. According to URA, the reserve list for second-half of 2008 provides for total potential supply of 5,050 hotel rooms, including a white site at Outram Road.

– The Business Times, P8



Developers must take own initiatives to go green: Leng Joo
CDL said depending on the government for more subsidies to encourage developers to go green is not sustainable on a long-term basis. CDL added that developers have to make their own plans and it's not a one-way street and that while the returns may not be 'direct and apparent' now, green buildings will become more attractive to buyers who can lower their utility bills through green features such as photovoltaic cells when their prices fall over time. CDL currently audits the green practices of its contractors and those who score better stand a higher chance to bid for tenders for subsequent projects. However, smaller developers are less likely to be able to influence construction and architectural firms to go green because they have little influence over the supply chain.
- The Business Times, P8



CapitaLand Q2 profit falls 43.5% to $515.2m
CapitaLand saw Q2 net profit falling 43.5 per cent year-on-year to $515.2 million. Despite the cautious market sentiment, CapitaLand are positive of the outlook. CapitaLand's Q2 net profit drop was due mainly to lower fair value gains from the revaluation of investment properties, lower portfolio gains and developments profits, and the absence of writeback of previous provisions. The group posted return on equity of 15 per cent in H1 2008, down from 38 per cent in the corresponding year-ago period but slightly ahead of the 14.5 per cent achieved for full-year 2006.Overseas contribution to earnings before interest and tax rose 10.4 per cent year-on-year to $695.8 million in H1 2008. The increase came mostly from China but was partly offset by a lower contribution from Australia.

- The Business Times, P4



11 new sites to house 65,000 foreign workers
11 new sites have been identified for building dormitories that will house 65,000 foreign workers, but these facilities will take till 2010 to complete. In the meantime, vacant government buildings will be converted into temporary quarters for these workers, said MOM. Demand for housing for foreign workers had gone up in tandem with the growth of various industry sectors. Singapore Contractors Association Limited are keen to have as many housing facilities as possible for foreign workers, as there is a shortage. But basically, there is now not enough land to build these housing facilities. Some existing dormitories fail to meet basic needs as well because of the limited space. Employers, such as ExxonMobil Asia-Pacific, have opted to build their own dormitories. Final touches are being added to ExxonMobil's 9ha facility, which can take in 9,000 petrochemical workers. A year from now, the company expects as many as 12,000 workers at the site, during the construction of its second chemical plant.


– The Straits Times, H8



Bank Indonesia may raise interest rates as inflation hits 11.9% in July
Indonesia's annual inflation picked up to a higher-than-expected 11.9 per cent in July, almost a two-year high, cementing expectations that the central bank will raise interest rates for the fourth time this year. The accelerating inflation in July - above the 11.2 per cent market forecast, and June figure of 11.03 per cent - was attributed to higher prices for food and fuel. In a poll conducted before the inflation news, analysts had predicted the central bank, Bank Indonesia (BI), would raise its key rate by 25 basis points to 9 per cent on Aug 5 when it holds its next policy review meeting. It has raised its rate three times this year by a total of 75 basis points.

– The Business Times, P11



Studios@Marne- 2 Marne Road/Petain Road- Farrer ParK MRT Station- Freehold 46 units + 3 retail shop space
- Studio apts ranging from 474 to 883 sft
- 1 bedroom apts ranging from 980 to 1098 sft- Retail shop space of 700, 1195 and 1690 sft- No instalment payments till TOP- Developer : Vyco Pte Ltd- Marketing Agent : REAMX- The Straits Times, S27 - advertisement
Parc Mackenzie- 42 units of Freehold apartments- Bukit Timah Road/Mackenzie Road- 9 mins from orchard road and netwon circuls- Little india MRT Station- Developer : Yanlord Development- Marketing Agent : Citicorp (S) Pte Ltd- The Straits Times, P6 - advertisement
Ivory


- Close proximity to future Paya Lebar Central- Collection of 20 freehold units- From $690 psf- Showroom at 15 Ceylon/Onan Road- facilities includes a Jacuzzi, gym, swimming pool and BBQ pit- Close to Parkway Parade and Katong eateries
- Expected TOP: Dec 2012- Developer: Oxley
- The Straits Times, P7 – advertisement
Shelford Suites
- 77 freehold units
- Private lift lobby for all units
- Conferred the BCA Green Mark GoldPlus Award
- Approved deferred payment scheme
- Developer: City Developments
- Marketing agents: CBRE, Savills
- The Straits Times, P20 - advertisement
Charlton Villas
- 39 Strata Terraces & 4 Semi-Ds- 4 bedrooms ranging from 2,734 sqft to 4,026 sqft- 5 mins walk to Kovan MRT, heartland Mall- Showflats at Charlton Lane- Developer : Hoi Hup Realty Pte Ltd- Marketing agent : Huttons- The Straits Times, S32– advertisement
Versilia on Haig
- Near future Paya Lebar Central- 128 freehold condo. units- 3 bedroom from $985,000- Close proximity - Showflat at Ipoh Lane- Developer : Hoi Hup Realty Pte Ltd- Marketing agents : DTZ, HSR- The Straits Times, P32 - advertisement
Woodsville28- 110 exclusive units
- Near Potong Pasir MRT Station- 2 to 3+1 bedroom apartments and 2 penthouses with private jet pool- 36m lap pool, spa pool, gym & BBQ- Within 1Km from st. andew’s village- Showflat at Woodsville Close- Developer : Frasers Centerpoint- The Straits Times, P36 - advertisement
37 Chancery Lane- New Launch, Early Bird discount & Deferred payment scheme
- Freehold cluster bungalows with individual swimming pool- 4 ultra modern and exlusive 3-storey + basement cluster bungalows- private swimming pool- finished from Bulthaup, Hansgrohe, Duravit and Miele- Exhibition at Hollandse Club @ 22 Camden Park- Developer : Chancery Land Pte Ltd- Marketing agent : CBRE- The Straits Times, H7 - advertisement
Livia
- Attractively priced 3 bedroom apts from $797K ($628 psf)
- Pasir Ris Drive 1
- 2-4 bedroom units and penthouses
- Exciting activity zones for family
- Tenure: 99-years leasehold (from 7 Jan 2008)
- Expected TOP: 31 Dec 2011
- Developer: Hong Realty Pte Ltd (joint venture between City Developments Ltd and Hong Leong Holdings Ltd
- Marketing agents: ERA, Knight Frank
- The Straits Times, H12 - advertisement
ParkCentral@AMK
- DBSS public housing project- 30-storey with 578 4-5 bedroom units with condo-style fittings and finishes- 400m jogging track, themed precinct pavilions, fitness corner, BBQ garden- Ang Mo Kio Ave 3- Developer : Greatearth Developments Pte Ltd- Marketing agent : DTZ- The Straits Times, S5 - advertisement

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