DAILY MARKET UPDATES 15th September 2008

Bohemian enclave
CBRE research shows that since March last year, nine residential projects have been launched in the Little India and Farrer Park area, with seven more in the pipeline, comprising 198 units. Many small projects in the area have received good response. The location is attractive because commuting time to the city is only 10 to 15 minutes by MRT. Developers are capitalising on Little India's popularity with single working professionals and expatriates unfazed by the bustle. Foreign staff and students in the nearby Singapore Management University also increase the area's rental potential. Recent projects focus on one- and two-bedroom units. With prices about $400,000 to $800,000 each, they work out to about $800 to $1,000 psf. The most expensive is Suites 123 at Rangoon Road, with units sold for an average $1,050 psf, while Oxford Suites at Oxford Road, at $800 psf, is the cheapest. At City Square Residences, the biggest residential project in the area with 910 units, the average selling price is $877 psf. Five units of Studios @ Marne in Marne Road were sold in July at a median price of $1,010 psf. CBRE said these units are affordable considering the area's proximity to the city centre and rising construction costs. Future launches in the area include the 25-unit City Studios at Race Course Lane, a 51-unit project in Rangoon Road, and small apartment blocks with eight to 29 units at Owen Road, Roberts Lane and Kinta Road.
- The Sunday Times, P22 – 14th September
(see attached “15 Sept – Projects under construction in Little India”)
Old district a hive of activity
Over the past two decades, Bras Basah and Bugis have seen a transformation that has delivered buzz and vibrancy, but also heartache and controversy. How it became an arts, entertainment and learning hub goes back to 1991, when a URA concept plan mapped out this vision for Bras Basah and Bugis. It got to work, restoring terrace houses and bungalows along Waterloo Street at a cost of $7 million, and handing them to the National Arts Council, which rented them out at 10% of the market rate to arts groups. It also made the area pedestrian-friendly, converting a section of Waterloo Street into a no-car zone, and improved connectivity with four - soon to be five - MRT stations serving the area. Then it set about wooing educational institutions, offering prime land to SMU, Lasalle College of the Arts, Nanyang Academy of Fine Arts (Nafa) and School of the Arts (Sota).
- The Sunday Times, P25 – 14th September
(see attached “15 Sept – Bras Basah and Bugis”)
Short-term apartment leases a growing trend
Homes with short-term leases of less than a year are gaining in popularity. Property agents say the market for temporary leases is perhaps 20% bigger now than a few years ago. This demand is coming from Singaporeans who are renovating their houses or are in between buying homes, and expats on short-term contracts and medical tourists who are here for treatment and need a place to stay for a few weeks. A new supply of interim rental homes has surfaced as a result of delayed collective sales. Those in need of a temporary lease turned to serviced residences or renting a room within a residential apartment. But serviced residences are now near full occupancy, causing rates to rise and prompting tenants to look for cheaper alternatives. On average, short-term tenants pay 20 to 30% more per month for a short-term lease than for a normal year-long stay. But this is still much cheaper than serviced apartments, which cost about $350 to $600 a night. Far East Organization offers month-long stays starting at $7,600 for a two-bedroom unit at Central Place in Hougang.
- The Straits Times, A8
S'pore, HK top legal system poll
Hong Kong and Singapore have the best judicial systems in Asia, according to a survey of expatriate business executives. The survey by the Political and Economic Risk Consultancy (Perc) put Hong Kong's judicial system at the top of the vote with a score of 1.45 on a scale that has zero representing the best performance and 10, the worst. Singapore was in second place with a grade of 1.92, followed by Japan (3.5), South Korea (4.62), Taiwan (4.93) and the Philippines (6.1). Singapore was also ranked second in the 2007 survey, scoring 1.88, behind Hong Kong's 1.78. Singapore has been rated first or second by Perc since 1996. The Hong Kong-based consultancy said 1,537 corporate executives working in Asia were asked to rate the judicial systems in the countries where they reside, using such variables as the protection of intellectual property rights and corruption.
- The Straits Times, B4
China, Vietnam landbanks may hit developers
Concerns are mounting about Singapore developers' exposure to the China and Vietnam markets. Many Chinese developers are cutting selling prices as the sector feels the heat from government measures to cool the market, coupled with a slowing economy. While price cuts are not widespread, transaction prices have fallen by about 10% so far this year. Going into 2009, CIMB's Hong Kong/China property analyst expects another 5-10% decline in prices. Regions that she is particularly negative on are Shenzhen, Guangzhou, Beijing and Shanghai. The fundamentals in the Chinese property sector are weakening. Construction costs have risen by around 10% year-to-date. Developers who deferred sales in the first half of 2008 are coming under pressure to move their units and cut prices. Like in China, the Vietnam government is fighting inflation with regulatory measures to cool the economy. In line with this, there is a danger of prices dropping.
- The Business Times, P5
Beijing likely to lift lending curbs, say economists
China's central bank may cut the amount of cash it requires lenders to set aside as reserves, as inflation slows and economic growth weakens, economists say. Inflation was the weakest in 14 months in August, export growth cooled and industrial output grew by the least in six years. The central bank pushed the reserve requirement to a record 17.5% in June. JPMorgan expects a cut in the fourth quarter, with the requirement falling to 15% during next year. Standard Chartered predicts one reduction this quarter and another in the first three months of 2009.
- The Business Times, P17

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