First Real Estate Investment Trust or First REIT said that it has terminated the option agreement to buy a property at Tuas View Lane from Tech-Link Storage Engineering.

The sale and leaseback deal was to be completed by end last year but the two parties were unable to agree on the purchase price and leaseback terms.

The option fee will be refunded to HSBC Institutional Trust Services as trustee of the Reit.

If the deal had gone through, it would be First REIT’s fifth Singapore property and would lift its assets by 13 per cent to S$368 million.

First REIT had intended to lease the 234,000 sq ft two-storey warehouse near Tuas Biomedical Park out to pharmaceutical and nutritional products multi-national companies.

Source: Channel News Asia, 5 Jan 2010

A pair of new Build-to-Order (BTO) projects have been launched by the HDB in Choa Chu Kang and Hougang.

Called Limbang Green and Buangkok Vale, the flats will cost from a low of $64,000 for a Studio flat to a high of $288,000 for a 4-room unit.

The Housing and Development Board said in a news release on Tuesday that the new flats are priced below their equivalent market prices and most of the 2- to 4-room flats will be set aside for first-time buyers.

The latest BTO project will offer a total of 1,291 standard flats with 646 units being 4-room flats and the rest being Studio Apartments (276 units), 2-room flats (128 units) and 3-room flats (241 units).

The development in Choa Chu Kang, called Limbang Green, will have 592 standard flats, comprising 276 Studio Apartments, 128 units of 3-room flats and 188 units of 4-room flats.

The selling price for the Limbang Green flats range from $64,000 to $89,000 for a Studio Apartment; $140,000 to $169,000 for a 3-room flat; and $226,000 to $278,000 for a 4-room flat.

At Hougang, the Buangkok Vale project offers 699 standard flats, comprising 128 units of 2-room flats, 113 units of 3-room flats and 458 units of 4-room flats.

The Buangkok Vale units are priced from $88,000 to $111,000 for a 2-room flat; $142,000 to $182,000 for a 3-room flat; and $231,000 to $288,000 for a 4-room flat.

The HDB said that it aims to keep public housing affordable for first-time homebuyers, and that the market prices take into account the prices of resale flats in the area – adjusted for factors such as location, flat attributes, project design and prevailing market conditions, as determined by professional valuers.

In a month’s time, the HDB also plans to launch another 1,500 flats in Punggol and Woodlands and if there is sustained demand, more BTO projects can be expected, bringing the number of new BTO flats to about 12,000 this year.

In addition, tenders are being called for the sale of two Executive Condominum (EC) housing sites at Buangkok Drive and Yishun Ave 11.

Introduced in 1995, the Executive Condominium Housing Scheme (ECHS) offers households with income of up to $10,000 a month, strata-titled apartments with facilities comparable to private condominiums but with initial eligibility and ownership restrictions similar to public housing.

The Urban Redevelopment Authority (URA) has meanwhile put up for sale by public tender, its first residential site to be sold in 2010 through the Confirmed List under the Government Land Sales (GLS) Programme.

The residential site at Choa Chu Kang Road / Woodlands Road is earmarked for an integrated commercial and residential development, that is co-located with the Ten Mile Junction LRT station.

A 3-storey podium block comprising commercial space and the Ten Mile Junction LRT station is already built and in operation.

The current sale will only include the existing commercial development and the future residential development to be built above the podium.

Source: Channel News Asia, 5 Jan 2010

It is not considering a merger with rival Nakheel, which has about US$20b of debt

Dubai’s Emaar Properties will focus its efforts abroad and on non-property sectors such as hospitality and hospitals, the company said yesterday, as a real estate crunch hits its home market.

On the day it was due to open the world’s tallest building, Burj Dubai, Emaar said it was not considering a merger with unlisted rival developer Nakheel, which is at the centre of a US$26 billion debt storm involving its government-held parent company Dubai World.

Emaar said the US$1.5 billion tower would provide a 10 per cent yield for the firm and that the opening would boost earnings for most of 2010. But investors took little heart from the outlook and sold Emaar shares down 2.2 per cent, pulling Dubai’s broader index down 2.1 per cent.

Emaar cancelled a merger in December with the property units of Dubai Holding in a dramatic strategic reversal following the financial implosion of companies tied to government-owned Dubai World, one of the emirate’s largest conglomerates. Dubai Holding is owned by the ruler of the Gulf emirate.

‘All the studies which we made, we couldn’t find a way ahead and it wasn’t the right time for a merger at this time,’ said Issam Galadari, chief executive of Emaar Dubai, at a media briefing.

Chairman Mohamed Alabbar told reporters there were no plans to merge with Nakheel, the largest property company in the Middle East, which is struggling under a collapse in earnings and a debt pile worth around US$20 billion.

The Emaar executives put a brave face on the launch of Burj Dubai, saying it was a positive move forward as the emirate’s property prices stabilised, despite wider expectations for continued stress in Dubai’s real estate sector.

‘You have to ask why we are building all this? To bring quality of life and a smile to people and I think we should continue to do that,’ Mr Alabbar told journalists. ‘Dubai is where our life is. We have beautiful long-term plans for development in Dubai,’ he said.

Emaar is the Arab world’s largest listed developer.

The needle-shaped concrete, steel and glass Burj Dubai, described by its developer as a ‘vertical city’ as it dwarfs existing skyscrapers, boasts new limits in design and construction.

Emaar has maintained the suspense over the final height of the skyscraper, saying only that it exceeds 800 metres. But it revealed yesterday that the tower will have over 200 floors, only 160 of which will be inhabited, while the remaining floors will be for services. The tower’s opening has been delayed twice and, unlike other projects, survived cancellations after the crisis hit the once-booming city.

‘We build for years to come. Crises come and go,’ said Mr Alabbar. ‘The world has gone through two years of difficult times. We must have hope and optimism.’

When Dubai’s ruler Sheikh Mohammed bin Rashed al-Maktoum opens the world’s tallest tower, it won’t be the world’s fullest.

The occupancy rate at Burj Dubai may reach 75 per cent this year, with office leasing proving the biggest challenge for investors, said Roy Cherry, an analyst at Shuaa Capital PSC. ‘Those who bought with the intention of leasing will face a difficult time, because few companies today can justify paying premiums for luxury,’ Mr Cherry said.

In the five years it has taken to build the tower, the sheikhdom’s debt-fuelled property market has gone from the world’s best performing to the worst, forcing officials to renegotiate loans and seek bailouts from neighbouring Abu Dhabi.

Apartment prices in the tower, which soared as high as 10,000 dirhams (S$3,809) per sq ft at the 2008 peak, have dropped to less than half of that.

‘It may still run at a premium to the rest of the market, but I’d be surprised if there were no defaults and if vacancy rates didn’t creep up’ since a large proportion of the developer’s sales were financed through mortgages, said Saud Masud, a Dubai-based analyst at UBS. ‘This is a symbol of the economic momentum that Dubai had and an ironic reminder of its property bubble.’

Source: Business Times, 5 Jan 2010

As housing prices in Singapore continue to climb, the Government has announced a slew of measures to raise supply.

These measures include Housing and Development Board’s (HDB’s) latest Build-To-Order (BTO) exercise, with 1,291 new flats launched in two locations on Tuesday.

Located in Choa Chu Kang and Hougang, the majority of the new units offered in HDB’s latest BTO exercise are studio apartments and four-room flats.

A studio apartment is priced between S$64,000 and S$89,000, and a four-room unit is selling between S$231,000 and S$288,000.

Already, a steady stream of potential homebuyers showed up on the first day of the launch. The deadline for applications for this BTO exercise is January 18.

With HDB resale prices hitting an all-time high, the government has made plans to raise supply. In addition to holding at least one BTO exercise a month, there are also two executive condominiums in the pipeline – at Buangkok and Yishun.

The Urban Redevelopment Authority also launched a tender for a residential development at Choa Chu Kang Road on Tuesday. The land parcel is the first residential site to be sold through the confirmed list under the Government Land Sales (GLS) Programme for the first half of this year.

Analysts said the increase in housing options will help cool the resale market.

Chris Koh, director, Dennis Wee Group said: “This will cause a lot of Singaporeans to realise that there is no rush because you have more and more land supply, and more and more units to select from.

“And that may eventually bring prices down to a plateau and stop it from rising so quickly.”

But Mr Koh noted that there will always be a group of people who require a flat immediately.

“To buy a brand new flat requires time, whereby they construct it and maybe you get it a few years down the road. Whereas there will always be a group of people who will still go to the resale market, they may need a place immediately,” said Mr Koh.

The resale market will also continue to be a source of housing for homebuyers who cross the 8,000-dollar income ceiling.

Source: Channel News Asia, 5 Jan 2010

One of Singapore’s integrated resorts, Resorts World Sentosa, will begin opening its doors in phases from January 20.

The resort said its four hotels – Crockfords Tower, Hotel Michael, Festive Hotel and Hard Rock Hotel Singapore – will be opened on that day.

Resorts World Sentosa began operations at two of its four hotels on Tuesday, and employees and their families were the resort’s main guests before the hotels’ public opening.

Resorts World Sentosa’s chief executive, Tan Hee Teck, said the phased schedule would allow the resort and its 10,000 employees to run in operations and deliver the expected guest experience.

The integrated resort (IR) said it is working closely with the authorities to obtain approvals for Universal Studios Singapore, which will open next.

As for the casino’s opening date, it will be announced when the IR gets notice of its casino licence.

Together, the four hotels offer a combined inventory of 1,350 rooms and 10 restaurant outlets at their opening.

Another two hotels at the resort – Equarius Hotel and Spa Villas – will add another 500 rooms when they are launched in phase two after this year.

The IR will also open the world’s largest Marine Life Park and its Maritime Experiential Museum in the second phase.

Source: Channel News Asia, 5 Jan 2010

JTC is looking to overcome Singapore’s chronic land shortage problem by using two radical land-optimisation concepts.

The industrial land agency has come up with what it terms the ‘cluster industrial complex with mega-hoist’, and the ‘plug-and-play factory’.

The first proposes the use of mega-hoists – commonly used in port operations – which would permit containers to be hoisted from ground level to the ‘doorstep’ of each floor of a complex and eliminate the need for ramps.

This mechanism is better equipped for multi-storey buildings and enables JTC to consider constructing taller ones on a plot of land, reducing land usage by 0.5ha.

JTC’s existing pioneering stack-up facility, Woodlands Spectrum, has a plot ratio (the gross floor area of a building divided by the site area) of 2.04, but a mega-hoist in a stack-up facility would take this ratio to 2.5.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak described the concept as ‘radical’ but not necessarily without problems. ‘With many small users, there might be a long queue for the hoist during certain peak hours, resulting in a bottleneck,’ he said.

Savills’ director of industrial services Dominic Peters expressed similar concerns. ‘Given time taken with a hoist, it may not be as productive as a typical ramp.’

The second concept, the plug-and-play factory, is designed for industries such as oil, gaS and aerospace, where operations cannot be conducted in multi-stacked facilities.

It greatly reduces the quantity of land used for an industrial development via the use of shared services and what is called co-location.

Companies have to share a centralised ‘backbone’ that comprises warehousing and logistic facilities, as well as a workers’ dormitory.

Factories are located alongside, with each plugging into the backbone’s services. Such an integrated facility would enable more factories to be built on a smaller piece of land, with land use cut by 35 per cent.

Mr Peters added that ’stand-alone facilities are important due to business secrecy’ and confidentiality, and competition may not favour co-locating.

It is thought that the centralised housing for foreign workers envisaged by the approach may provide a solution to the ongoing problem of finding suitable accommodation for migrant workers.

JTC is currently conducting a feasibility study of the two concepts, which it expects to conclude by the end of the year. Ms Josephine Loke, director of land planning at JTC, said that the key is ensuring operating costs did not increase for industrialists.

She disclosed that the techniques would most likely be tested in Jurong first and, if successful, then rolled out to industrial areas in the east.

Source: Straits Times, 5 Jan 2010

HOUSING Board (HDB) resale flat prices continue to climb ever higher, with prices in the fourth quarter of last year setting a new record.

Flash estimates released by the HDB yesterday show prices rose by 3.8 per cent in the fourth quarter, bringing last year’s total price rise to about 8 per cent – a surprise outcome for many property experts who had predicted price falls at the start of last year.

The Resale Price Index (RPI) hit 150.7 in the fourth quarter, up from the third quarter’s 145.2 and far beyond the previous peak of 136.9 achieved in the fourth quarter of 1996.

HDB flat prices have risen almost 40 per cent over the past three years.

Private home prices put on an even more impressive 7.3 per cent rise in the fourth quarter of last year compared to the third. This came on top of a 15.8 per cent gain in the third over the second quarter.

Urban Redevelopment Authority estimates released yesterday showed private home prices rose about 1.7 per cent over the whole of last year.

Analysts say the skyward rise in prices is down to demand outpacing supply.

A quicker-than-expected economic recovery during the year and a booming immigrant population, with many new families and expatriates relocating to Singapore post-economic crisis, contributed to the strong demand.

PropNex chief executive Mohamed Ismail said that permanent residents easily made up 20 per cent of his agency’s total HDB sales.

At C&H Realty, this group of buyers account for as many as 50 per cent of all HDB resale transactions, revealed managing director Albert Lu.

Mr Patrick Grove, executive chairman of online portal iproperty.com.sg, said an interesting trend to emerge was the increase in foreigners interested in Singapore properties.

The portal’s traffic from foreign countries grew by up to 20 per cent month-on-month during the second half of last year. This compares to 5 per cent to 10 per cent growth for Singapore-originated searches.

‘There’s more demand for homes now that the worst of the economic crisis is over. Low interest rates are also a key factor, as it’s more affordable than ever to buy a property,’ added Mr Grove.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak pointed out that continued recovery in private home prices meant some home buyers were being priced out of this market, and had to turn to HDB resale flats.

‘As long as the prices of suburban condominiums remain relatively high, there will be space for resale flat prices to expand,’ he said.

Analysts do not see any end in sight to the increase in HDB values. They are predicting price rises in the range of 8 per cent to 15 per cent for HDB flats for 2010.

Mr Lu reckons prices will rise about 3 per cent each quarter. But PropNex’s Mr Ismail predicts a slowdown in the rate of increase – to about 2 per cent during the first quarter of the year.

Despite further flat supplies set to come onstream during the year, Mr Mak expects prices to gain another 8 per cent to 15 per cent this year.

HDB yesterday moved to address supply concerns by announcing it would launch more build-to-order (BTO) flats this year if there was ’sustained demand for new flats’. It would, it added, ‘ensure that there is an adequate supply of flats to meet prevailing housing needs’.

Some 1,300 new flats are to be launched for sale today by HDB in Choa Chu Kang and Hougang.

As an indication of the red-hot demand for homes, there was an overwhelming response to a recent launch by HDB of BTO flats at Dawson, where some flats were more than 11 times oversubscribed.

Industry observers are unsure whether BTO flat supply will have a significant impact on the current high level of demand, given that such flats typically take three to four years to complete.

‘BTO flats do not provide immediate roofs over heads, so resale flats will continue to be in high demand. But the supply of new flats will go towards stabilising HDB resale price increases,’ said Mr Ismail.

Source: Straits Times, 5 Jan 2010

PRIVATE home prices shot up 7.3 per cent in the final three months of last year, allowing 2009 to finish in positive territory after a horror start.

Yesterday’s flash estimates indicated that prices overall increased by 1.7 per cent last year and it was all down to the final, frantic six months.

The 7.3 per cent jump in the October to December period built on a stellar 15.8 per cent surge in the third quarter – the biggest quarterly rise in 28 years and one that ended 12 dismal months of price decline.

‘In a bad year, we still managed to show a 1.7 per cent rise in prices. There’s certainly optimism in the Singapore property market,’ said Cushman & Wakefield managing director Donald Han.

That low overall figure is a stark reminder of how last year shaped up as a year of two halves, with dire results early on and a surge in the second six months.

Mass market housing was the star segment with record levels reached.

The Urban Redevelopment Authority (URA) data yesterday showed that non-landed home prices in the suburbs edged up 5.8 per cent in the fourth quarter. This is far lower than the 16.1 per cent climb in the third but it brought the full-year increase to 11.2 per cent.

‘If you want to go for deep discounts, you can’t find them now in the mass market,’ said Mr Han.

HDB resale prices – up 8 per cent last year to a new high – are helping to support mass market prices, experts said.

Prices of non-landed homes on the city fringes rose 9.5 per cent in the fourth quarter and were up 3.1 per cent overall for the year.

But prices for non-landed city centre homes were down 2 per cent for 2009 although the 7.1 per cent increase for the fourth quarter points to a recovery.

CBRE Research executive director Li Hiaw Ho said the good response to selective high-end projects launched in the fourth quarter, such as Marina Bay Suites, Cyan and Parvis, had fuelled the price rise.

The robust estimates from the fourth quarter last year have boosted confidence for this year, among the experts at least.

Ngee Ann Polytechnic lecturer Nicholas Mak said the 7.3 per cent rise, while smaller than the third quarter’s, was still ‘quite significant’, indicating that there is still sufficient momentum in the market to push prices higher this year.

The Shore Residences in Katong – launched on Jan 1 after a late December preview – did relatively well, selling 183 units out of 338 units that were released.

Overall, experts believe that by the end of the year, prices may have surpassed the previous peak.

Private home prices may rise by about 10 per cent to 12 per cent this year, with a slightly lower increase in the mass market segment and better upside in the high-end segment, experts forecast.

CBRE Research tips a smaller overall rise of 5 to 10 per cent.

PropNex chief executive Mohamed Ismail said prices will head up as more developers will be launching smaller units at higher prices on a per sq ft basis, especially from the second quarter.

While rises are tipped from every quarter, most agree that prices will moderate this year.

Much of the pent-up demand has been satisfied, said DTZ head of South-east Asia research Chua Chor Hoon.

‘There will be less panic or euphoric buying in view of the price increases…in 2009 and the possibility of more government measures if prices run ahead of economic fundamentals.

‘Affordability is a constraining factor in the mass market segment and any price increase in this segment will depend on the job market.’

Source: Straits Times, 5 Jan 2010

THE financial market rebound has put a spring in the step of Singaporeans. They are now showing a greater willingness to take risks with their money.

Investors who had sought refuge in cash and steady yield products like bonds are now looking for higher returns and ways to better grow their wealth, according to a new Citibank survey.

It found that 44 per cent of people who stopped investing in the midst of the economic crisis have now either resumed investment activity or are open to it once the right opportunity arises.

A further 36 per cent of the 400 respondents to the online poll conducted in October last year said they stayed invested throughout the meltdown, while around 20 per cent continue to hold their savings in cash.

The survey findings indicated that for current investors or those open to investing, there appears to be a return in risk appetite.

Shares were the preferred investment for this group, with 54 per cent opting for stocks as part of their portfolios while 28 per cent picked mutual funds or unit trusts.

Lower-risk instruments such as bonds and fixed deposits attracted 19 per cent each. About 20 per cent indicated they had considered buying an investment property.

‘With confidence and stability returning to markets, there is a discernible increase in willingness amongst investors to assume a little more risk,’ said Mr Shrikant Bhat, Citibank Singapore’s head of wealth management.

At the same time, the willingness to invest was also balanced with greater caution, the survey found.

About 40 per cent of respondents said they were a lot more cautious while 42 per cent indicated they were a little more cautious in their investment decisions.

Mr Bhat noted that investors are asking a lot more questions about the products they buy and are making more informed investment decisions.

‘They are also more likely to view their investments within the framework of a holistic portfolio over a longer-term horizon,’ he said.

Financial advisers say the survey bears out what they are seeing on the ground, with investors turning more positive with the better economic outlook.

‘We are getting more calls from clients who are looking to invest,’ said Mr Sani Hamid, director of wealth management at Financial Alliance.

The return of risk appetite is, however, gradual. ‘There is still a lot of retail money sitting on the sidelines which has not come back yet,’ Mr Sani added.

Ms Carol Seah, chief executive of Wynnes Family Office, said some clients are now more cautious, while at the same time more active in their investments because they are becoming ‘more aware’ of what is going on in the aftermath of all the volatility during the financial crisis.

The Citi Fin-Q Survey also showed that the top three financial concerns of Singapore residents are rebuilding their savings, meeting monthly expenses and greater retirement savings.

Source: Straits Times, 5 Jan 2010

THE labour market is tightening, with updated figures released yesterday by the Ministry of Manpower (MOM) showing the unemployment rate dipped from a revised 2.3 per cent last December to a seasonally adjusted 2.2 per cent in March.

‘Unemployment is now at its lowest level in over 12 months,’ said Lynn Ng, regional director of recruitment firm Adecco. ‘Many economists would view 2.2 per cent as full employment.’ She predicted job-hopping will rise as the job market hots up.

The dip in the unemployment rate – though it is a tad higher than the 2.1 per cent projected by private-sector economists – came as the economy posted a remarkable 13 per cent year-on-year growth in Q1. The resident unemployment rate (for Singaporeans and permanent residents) eased to 3.2 per cent in March from a revised 3.3 per cent last December.

‘The labour market shows clear signs of recovery in tandem with the strong economic recovery chalked up in Q1 2010,’ said Manpower Minister Gan Kim Yong in a statement. ‘We can expect job creation to continue for the rest of this year.’

New jobs created rose for a third straight quarter – by 34,000 – in the first three months of this year. And redundancies continued to fall – to 2,100.

Although employment growth in Q1 was smaller than the 37,500 jobs posted in Q4 2009, Ms Ng said it is still a sign that ‘Singapore’s employment market continues to rebound from the lows of the first half of last year – and shows a sustained recovery’. ‘With this sustained employment growth, we would expect to see more companies convert temporary and contract positions to full-time roles.’

Redundancies (retrenchments and early release of contract workers) dropped in Q1 from 2,220 in Q4 2009. The number was 12,760 in Q1 2009.

But the latest drop in overall redundancies masked higher figures for the manufacturing and construction sectors. Manufacturing redundancies jumped to 1,000 in Q1, from 860 in Q4 2009. And redundancies in construction edged up to 300, from 250. Still, manufacturing jobs rose for a straight second quarter (see table), while the construction sector showed a dip in employment.

Source: Business Times, 1 May 2010