DAILY MARKET UPDATES 26th September 2008

Guide to Prime Residential 2008
- The Business Times, P18-19
(See attachment; “Prime Residential 08”)
38-Storey Tower to Rise at Raffles Place
A NEW office block will soon come up next to OUB Centre, with the two buildings to be packaged in a single prime development called One Raffles Place. The tower, due to be completed in 2011, will offer 350,000 sq ft of top-quality Grade A office space and five floors of shops, said OUB Centre Limited, which is developing the 38-storey building along with United Overseas Bank (UOB). The new block will cost $540 million to develop, which will be financed by a syndicated loan from financial institutions, said Mr Kok. OUB Centre's shareholders are Overseas Union Enterprise, UOB, UOL Group, Khattar Holdings and the Kuwait Investment Office. Other new upcoming offices in Raffles Place include the 28-storey Straits Trading Building in Battery Road, whose redevelopment will be completed by this year, and Ocean Building in Collyer Quay, due for completion in 2011.
- The Straits Times, B37
(See also; The Business Times P18, “OUB Centre to get $540M Adjacent Office Tower”)
Singapore Rises to No. 3 in the Financial Centre in Global Index
S’pore has been ranked the No. 3 financial centre in the world behind New York and London in a new survey, commissioned by the City of London. Singapore enjoyed a rise of 26 points - more than any other centre in the top 20 ranking. Singapore scored 701 points in the ranking, 73 points behind New York and one ahead of Hong Kong. The big losers in the rankings included Frankfurt, which slipped three places to ninth, and Paris, down six places to 20th.
- The Straits Times, B37
(See attachment; “Top 10 Financial Centres” – Source; The Business Times P4)
(See also, The Business Times P4, “S’pore overtakes HK in Financial Centre Ranking”)
S’pore Prime Areas Beckon
From 2005 to 2007, a total of 116 residential projects in District 9,10 and 11 were sold in collective sales for re-development. Over the past three years, the number of homes bought by foreigners has risen from around 3,600 in 2005 to about 9,100 in 2007. The proportion of foreign buyers islandwide for all landed and non-landed homes stood at 25.6 per cent as at 2Q 2008, a marginal fall of 2.3 percentage points from the previous quarter. Foreign buyers originate from various continents and based on 1H 2008 statistics, the majority, 17.7 per cent, were from Indonesia. Malaysians formed 17.6 per cent followed by those from India and China. Buyers from the UK and the US are also evident in Singapore's private residential property market with a proportion of 8.7 per cent and 2.3 per cent respectively at 1H 2008.
- The Business Times, P16
(See attachment; “Foreign Home Buyers”)
Fairly Sound Fundamentals for GCB
The first eight months of 2008 saw a total of just 31 GCBs worth some $550 million changing hands, down from the 84 transactions worth $1.1 billion in the same period last year. The first six months accounted for 27 of the 31 transactions in the review period, signalling a significant slowdown in activity after June. Transaction volume has declined to its lowest since 1998. On the other hand, the transacted value of each GCB this year has averaged around $16 million, with eight GCBs transacted remarkably above the $20 million quantum. The average price of a GCB stands at around $836 per sq ft (psf) as at end-August 2008, more than twice the average price of $365 psf transacted in 2005. The highest price paid this year in terms of psf is for a property located at Leedon Road, sold in May for $1,303 psf. GCBs transacted this year at over $1,000 psf on land area, most were sold with a new or relatively new bungalow, or a bungalow that had undergone some recent refurbishment and hence been able to command the price premium.
- The Business Times, P14
(See attachment; “GCB”)
Developers Tap Starchitects for added Cachet
Amongst the developers named; CapitaLand, Keppel Land and Wing Tai, Far East Organization (FEO) is no stranger to starchitects either, having worked with the likes of Arquitectonica, and more recently Rem Koolhaas' OMA. Chia Boon Kuah, COO (Property Sales) at FEO, added that most of their luxury home buyers have homes in other international cities. 'With Singapore staging itself to be a vibrant global city attracting international businesses and talent, there will be demand for world-class accommodation complete with top notch services and facilities,' he added. But the partnership with international architects is just one aspect of the value-add that FEO's luxury developments bring to our buyers, Mr Chia said. Mr Chia also believes that interest in brand-name architecture and design is not a new thing, but he noted: 'Internationally, homes designed by famous architects in the past remains one of the most coveted addresses.'
- The Business Times, P16
Pulsating Marina Bay
New Downtown and Sentosa Cove are among the most expensive leasehold properties, their price levels are almost on par with the new freehold projects in the Orchard area and 25-30 per cent below those of new luxury properties. The evolution of was partly fuelled by the sharp growth of local high net worth individuals (HNWIs) as a result of the global wealth effect in 2005-2007. As for projects in the pipeline, 76 Shenton Way has obtained written permission to be converted into a 179-unit apartment block while the owners of 5 Shenton Way (UIC Building) are waiting for the lifting of the moratorium on the conversion of office buildings to residential use at end-2009 before they proceed. Two new projects at Enggor Street in Tanjong Pagar have also obtained written permission as at June this year.
- The Business Times, P20
(See attachment; “New Downtown”)
Spoilt for Choice
According to URA statistics, Caribbean at Keppel Bay consistently enjoys one of the highest rentals among condominiums islandwide. Its median rent was $6.40 per sq ft in 2Q 2008. The potential supply in the area is fairly limited. Besides the uncompleted The Reflections at Keppel Bay, with 507 units available out of a total 1,129 units as at end 2Q 2008, the only other projects in the pipeline in the area are 307 units on a parcel next to Caribbean at Keppel Bay and 94 units on Keppel Island.
Important factors listed in The Business Times to consider before making a purchase include:
- Purpose of purchase, ie whether for owner-occupation or investment;
- Your budget and the price of the property;
- Surrounding environment;
- Proximity to amenities such as MRT stations, schools, and shopping centres;
- Rental and resale values (especially if you are buying for investment);
- and Reputation of the developer
- The Business Times, P24
(See attachment; “Popular Residences”)
Sentosa Cove a Coveted Address
Completing in 2010, Sentosa Cove will be a luxurious estate comprising 2,500 99-year leasehold homes in the form of oceanfront villas, waterway bungalows, hillside mansions and upscale condominiums. Complemented by an intimate marina village offering supporting amenities such as the 240-berth One Degree 15 Marina, the 320-room W Hotel being developed jointly by City Developments and Starwood, and a three-storey retail and commercial complex with a wide array of shops, upmarket F&B outlets, spa and fitness centre and small-office-home-office (SoHo) units. In the pipeline are some 535 condominium and landed houses in Sentosa Cove, which could potentially be launched in the next two to three quarters. These include the 105 yet-to-be-launched condominium units from Turquoise and Marina Collection as well as City Developments' 228-unit Sentosa Quayside and Ho Bee Group's 151-unit Seascape.
- The Business Times, P22
Branded Residences Set to Take off
Branded residential developments could either be single or mixed use located within an urban or resort setting. They provide the buyers the opportunity to enjoy a full range of services rendered by a branded hospitality service provider. Branded residential developments usually command a premium of 20 per cent up to 40 per cent as compared to similar unbranded residential developments. While there is already an established market of branded residential developments in certain cities in South-east Asia, there is also a strong pipeline of branded residential coming on stream over the next few years. The existing major players include St Regis in both Bali and Singapore and Four Seasons in Bali and Langkawi. Some other notable developments include Bulgari in Bali, Ritz Carlton in Bali and Marriott in Phuket.
- The Business Times, P26
(See attachment; “Property Investment Guide”)
Diversification is Key
Alternative investments extend from hedge funds and private equity to commodities and real estate and finally to exotic investments such as art and wine. Most investors think of hedge funds, private equity and commodities, but various exotic investments such as art, weather derivatives or catastrophe bonds also belong in this group. Real assets include exotic investments, such as timber, along with real estate and commodities. Alternative investments, if used in a disciplined manner, could represent a way out of the dilemma of low yields on the bond market combined with traditionally high risks on the equity market.
- The Business Times, P10
(See attachment; “Diversification”)
More Norway Companies Investing in S’pore
NORWAY is now Singapore's sixth largest foreign investor, as increasing numbers of firms from the Scandinavian nation site their operations here. Foreign direct investment from Norway stood at $14.8billion in 2006, up from $8.6billion in 2005, according to the Department of Statistics. REC has started building the initial $3billion phase of the $6.3billion Tuas plant, said REC senior vice-president Oyvind Hasaas. The firm launched a recruitment drive - called Here Comes The Sun - here recently, and was inundated with 3,500 applications for just 120 advertised jobs.
- The Straits Times, B36
Property Prices, Rents set to fall in Asian Cities
A whole new office project called the Marina Bay Financial Centre (MBFC) is under construction, spurred by the creation of 50,000 jobs since 2004 as hedge funds and banks lapped up incentives to expand in the city-state. A loss of a fifth of those new jobs would cause monthly office rents to fall 47 per cent and capital values to drop 34 per cent by 2012, according to UBS analyst Regina Lim. It would hit landlords such as City Developments and CapitaCommercial Trust. In HK Central district, dominated by landlord Hongkong Land, is chock-a-block, rents will probably fall by 25 per cent by the end of next year as cheaper new offices across the harbour hit the market, says Macquarie Securities. In Tokyo, falling values will be accompanied by a 5 per cent fall in average Tokyo office rents next year and a 10 per cent drop for grade-B buildings.
- The Straits Times, B37
Opportunities in the Middle East
Housing rents and prices in Dubai, Abu Dhabi and Doha continued to climb even as they head south for most of the world's major real estate markets. Abu Dhabi's Department of Planning and Economy warned that prices could fall because of oversupply, speculation and an absence of proper regulation. It said the real estate sector has leapt by an average of 22 per cent over the past five years. Boston Consulting Group report rate the UAE, Qatar and Kuwait among the world's top five countries which enjoy the densest concentration of millionaire population in the world. It estimated the total GCC market has US$1.5 trillion in assets under management (AUM). The average AUM of a wealthy household was an estimated US1$ million - well above the global average of about US$400,000.
- The Business Times, P29
China’s Super Rich list longer than Japan’s
Japan is still home to 56 per cent of high net worth individuals in the Asia-Pacific region, or 1.5 million Japanese with US$1 million or more in investible assets excluding their primary residence. China, however, has more than 6,000 ultra high net worth individuals, with at least US$30 million in investible assets, compared with around 5,300 in Japan. India and Vietnam are seeing fast expanding pool of wealthy residents. Like China, millionaires increase by more than 20 per cent last year, according to this year's Asia-Pacific Wealth Report. The region's 2.8 million high net worth individuals make up a third of the world's millionaire population. Asia's still solid economic growth should continue to boost the number of high net worth individuals by 8 per cent this year and for each of the next four years. By 2012 their wealth should reach US$13.9 trillion, up from US$9.5 trillion in 2007.
- The Business Times, P26

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