DAILY MARKET UPDATES 2nd October 2008

The MRT guide to home prices
While the classic prime districts of 9, 10, 11 are still sought after, home buyers are also increasingly keen on properties near MRT stations, which can command up to a 20% premium. Apart from non-drivers, MRT-accessible homes also attract buyers with school-going children as well as investors who want to rent the units to expatriates, many of whom rely heavily on public transport. A PropNex agent estimated that HDB flats near MRT stations have their valuations jacked up by at least $20,000 or $30,000, and buyers often pay even more in cash on top of that. Condominiums near MRT stations can command a premium of up to 20 per cent over similar units a bit further away, said HSR. The price difference stems from the convenience of these homes and their limited supply. Property values can differ between MRT stations, even between consecutive stops such as Novena and Toa Payoh, where condos around the former are almost double the price of those around the latter, according to Savills. Apart from the proximity to an MRT station, buyers look at other factors such as quality, age and tenure of the project and its facilities, how much the unit can fetch in rentals and what amenities are nearby, said Savills.
- The Straits Times, B16 (see attached “2 Oct – MRT guide to home prices”)
New business park space looms over CBD
According to CBRE, projected new supply of business park space over the next five years is about 7.8 million sq ft. This includes developments like The Icon@International Business Park, Solaris, Mapletree Business City, and Centric Singapore. CBRE also believes 67 per cent of this has already been pre-let. Only about 25 per cent of future office supply is thought to be pre-let. The upcoming 1.7 million sq ft Mapletree Business City in Alexandra will be a more office-like integrated precinct including retail space. Over 400,000 sq ft of pre-lease deals have been done ahead of completion in H2 2010. Business park rents, at an average $3.15 psf per month in Q2 2008, are considerably lower than average prime rents of $16.10 psf per month. According to CBRE, Grade A office space vacancy remained tight in Q2 '08 at 0.6 per cent. Vacancy rates for the CBD fringe rose significantly from 4.6 to 7 per cent. For the same period, vacancy rates for decentralised areas dipped to 1.6 per cent from 3 per cent.
-The Business Times, P3
Write-downs could see property stocks slip further
The outlook for developers here could get worse, with write-downs on asset values possible, says Credit Suisse. CapitaLand could write down as much as $200 million on its Farrer Court and Char Yong Gardens projects alone. This is based on an estimated breakeven figure of $1,429 psf and an estimated average selling price of $1,280 psf for Farrer Court. For Char Yong Gardens, the estimated breakeven figure is $2,564 psf and the estimated average selling price $1,960 psf. Credit Suisse believes that small developers will drive the price cuts in the near future in the primary markets, especially in the prime and mid-high end.
- The Business Times, P6
Schools get $24m reason to saddle up
Singaporean will have a $24 million reason to saddle up next September. That is when the Singapore Turf Club Riding Centre - the venue for the equestrian events at the Youth Olympic Games - will be completed. The 3ha facility’s main goal is to promote riding to young Singaporeans at affordable prices. Fees of $15 to $75 for a 45-minute ride are a fraction of the commercial charges. Located next to the Singapore Racecourse at Kranji, the new centre will be the country's biggest riding facility. It will feature two world-class riding arenas, classrooms, as well as a viewing gallery that can seat up to 250 people. About 100 schoolchildren have already signed up for lessons.
- The Straits Times, A4
Indonesia to grow 6.2%: poll
Indonesia's economic growth is expected to ease marginally this year, after reaching its fastest pace in more than a decade in 2007, on higher interest rates and slowing global demand for its key commodities. The median forecast for growth in 2008 was 6.2 per cent, up from 6 per cent in a similar poll in July. Analysts attributed the slightly higher forecast to better- than-expected bank loan growth and bigger budget spending ahead of elections next year. In response to soaring inflation, Bank Indonesia has raised its benchmark interest rate by a total of 125 basis points this year to 9.25 per cent.
- The Business Times, P8
China's manufacturing expands for first time in 3 months
China's manufacturing expanded for the first time in three months, indicating that the economy is weathering global slowdown. The Purchasing Managers' Index rose to a seasonally adjusted 51.2 in September from 48.4 in August. To combat four straight quarters of slowing economic growth, China has since July loosened loan quotas, encouraged lending to small businesses and increased export-tax incentives to boost growth and protect jobs. The central bank last month cut borrowing costs and trimmed the pace of yuan gains. The output index rose to 54.6 in September from 48.7 per cent in August, while the index of new orders climbed to 51.3 from 46. The index of export orders increased to 48.8 from 48.4.
- The Business Times, P11
Minister says economy, financial system sound
The Indian economy and financial system are sound and should not suffer from the financial crisis of global markets, the Indian Commerce Minister said. The Prime Minister predicted that the Indian economy will grow at a rate of 7.5-8 per cent this year. Indian Commerce Minister said that Indian banks were not exposed to the collapsed US sub-prime home loan market at the heart of the crisis and so India's financial system is not going to be hurt. India's gross domestic product grew by 7.9 per cent during the April-June period from a year earlier.
- The Business Times, P12
Japan firms pessimistic for first time in five years: survey
Business sentiment at big Japanese manufacturers turned negative for the first time in five years, a Bank of Japan survey showed, as Japan headed towards recession. Underlining growing uncertainty over the outlook, the central bank's quarterly survey also showed big manufacturers expect conditions to worsen in the fourth quarter. Big firms expect their capital spending to rise 1.7 per cent in the year to next March, lagging a 2.4 per cent rise forecast three months ago. The survey also showed big firms cut their profit forecasts for the current fiscal year, expecting their recurring profits to fall 9.4 per cent. The sentiment index at financial institutions fell to its lowest since the comparable data started in December 2003. The index is taken from a survey of 10,488 firms from Aug 27 to Sept 30.
- The Business Times, P9
S. Korean inflation hits 10-year high
South Korea's inflation rate shot up to a 10-year high last month, raising doubts about how soon the central bank could move to cut interest rates to shield the economy from the global credit crisis.
- The Straits Times, B14

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