A new road network will be built progressively in the new downtown Marina Bay area as part of the Land Transport Authority’s new developments in 2010.

This is to serve upcoming developments such as the Marina Bay Sands Integrated Resort and the Marina Bay Financial Centre.

Motorists travelling to the Marina Bay Sands Integrated Resort can soon use a new bridge and road.

The Bay Bridge connects directly across the Marina Centre to Marina Bay.

Motorists can then continue along Bayfront Avenue towards the Marina Bay Financial Centre.

With the opening of the 1.4 kilometre bridge and road, a new ERP gantry will also be installed.

Yam Ah Mee, chief executive, Land Transport Authority, said: “Together with the Bayfront Avenue road, there’s a need to adjust the CBD cordon and having a new ERP gantry at that location. So that the overall, CBD cordon comprising of the Orchard cordon, the Shenton-Chinatown cordon and the Marina City cordon remains intact.

“And that’s the reason why we are closing the CBD cordon and adjusting it with this new ERP gantry.”

The Bayfront Avenue ERP gantry will be up by end-March.

To further adjust the CBD cordon, three more ERP gantries will be erected and will be operational in the third quarter of this year.

The existing gantry along Central Boulevard will be replaced by a new one at Marina Way.
Two other gantries will be on the other side of Bayfront Avenue and Marina Station Road.

In other developments, motorists can look forward to the opening of the Bartley viaduct on Sunday.

The 1.9 kilometre long viaduct marks the completion of the Bartley extension project.

Mr Yam said: “With the opening of the Bartley viaduct, motorists can expect travelling along Tampines Avenue 10 to Bartley to have a time saving of about 10 to 15 minutes and also alternatives to PIE. We expect that up to about five to 10 per cent of motorists, may consider alternatives of travelling on the Bartley viaduct instead of going through PIE.”

The Bartley Road extension project, which started in 2000, costs S$208 million.

Source: Channel News Asia, 14 Jan 2010

Mainboard-listed Natural Cool Holdings said its unit has told its property at 29 Tai Seng Avenue to Emirates Tarian Capital for S$53 million.

After the deal is done, Natural Cool Investments will leaseback the property for 10 years at an annual average rent of S$4.74 million.

Natural Cool’s CEO, Joseph Ang, said the sale is in line with the firm’s efforts to adopt an asset-light strategy.

He added that the firm has not decided what to do with the proceeds of the sale, but may use it to repay bank borrowings, to distribute to shareholders as dividends, or to use as working capital to fund future growth and expansion.

The proposed sale and leaseback deal is subject to shareholder approval, as well as legal and binding due diligence on the property.

Source : Channel News Asia, 14 Jan 2010

More businesses may consider expanding in Singapore, thanks to the supply of office space entering the market.

With office rentals in Hong Kong expected to rise sharply, analysts said that is another reason why companies may find it more cost effective to hire in Singapore.

The office property sector within Asia is expected to see considerable growth in supply over the next three years, according to recent data from property consultant Savills.

In terms of some key cities, Singapore is expected to see a 47 per cent increase in Grade “A” office supply, and Shanghai a 64 per cent jump. But Hong Kong is expected to see as much smaller increase of just six per cent.

Simon Smith, Regional head of Research, Savills, said: “Hong Kong at the moment is almost unique in the region in not having an oversupply situation in the office markets – this is both good and bad. I mean that rents have already found a bottom.

“But it equally means that over the next quarter or two, our markets are going to look quite tight. So that’s going to translate into quite dramatic rates of growth in rents towards the end of this year for many corporates who are looking at weighting their businesses across Asia.

“They may choose to expand in areas other than HK where costs are rising dramatically. So Singapore, where you see quite a lot of office development over the last year or so, could be a net beneficiary.”

Rentals in Hong Kong are expected to move up in the region of 20 per cent for 2010, especially towards the end of the year, while in Singapore, prices are expected to remain relatively stable with the office market expected to see a bulk in supply between 2010 and 2012.

While most market watchers agree that government stimulus packages in the last year helped to push liquidity into the market and stimulate property demand, in the coming year, the slow withdrawal of the stimulus packages is not expected to have any impact on the property market.

Experts added that with governments in the region keeping a closer eye on potential bubble developments and the impact of stimulus package unwinding, they expect residential prices to be quite well supported even if growth moderates.

Source: Channel News Asia, 14 Jan 2010

The luxury housing sector is expected to lead the way for the Singapore property market this year, according to real estate broker Savills.

Savills is forecasting that prices in the luxury segment will rise 15 per cent in the year ahead.

However, prices in the mass market and mid-end properties could see values move up by about five per cent.

Last year, despite the deep economic recession, private property transactions nearly surpassed the highs of 2007.

Going into 2010, Savills believes the rising trend will continue but at a more moderate pace.

Savills said the underlying demand would come from the completion of the two integrated resorts as well as attractive office rentals which are expected to bring in more overseas investments.

Michael Ng, managing director, Savills Singapore, said: “We do see strong demand because of the population growth. Again a lot more foreign workers are expected to come in over the next 12 months, so I don’t think there will be a correction downward in that sense. But certainly not the same kind of growth as seen last year, more moderated, but healthier.”

“I think the prices in terms of luxury is still some 20 to 25 per cent off the peak. In terms of the high net worth individuals, I think a lot of confidence is coming back to the market. There is a lot of liquidity around that’s pushing them back into real estate.”

Source : Channel News Asia, 14 Jan 2010

But onus is on S’poreans to buy within their means

ABOUT 13,500 HDB flats were sold last year, half of which were launched in the last three months to meet strong demand, said Minister of National Development Mah Bow Tan.

He also said that about 12,000 new build-to-order (BTO) flats will be offered this year if demand continues to be strong.

These will be supplemented by premium flats under the Design, Build and Sell scheme and executive condominiums, added Mr Mah in a written reply to a question from Madam Ho Geok Choo (West Coast GRC).

He assured her that HDB is committed to ensuring a sufficient supply of new flats and keeping flats affordable, especially for those setting up their first home.

The minister noted that eight out of 10 new flat buyers pay for their home loans entirely from their CPF monies, without having to fork out any further cash.

His remarks were made amid concerns that the supply of HDB flats is not keeping pace with growing demand.

Noting that HDB has progressed from the mass production of basic flats to offering variety in design and price, Mr Mah said the onus is on Singaporeans to play their part by buying a home within their means.

To illustrate, he said a family with a monthly income of $3,000 can buy a flat worth up to $250,000 and spend only 30 per cent of their income every month on the mortgage.

The $250,000 ceiling covers all the new three-room flats in HDB’s most recent BTO projects in Choa Chu Kang and Hougang, and some four-room units.

Similarly, a family with a monthly income of $4,000 can afford to buy a new flat worth up to $333,000 without spending more than 30 per cent a month on the mortgage.

This means they can comfortably buy any of the flats offered in the latest BTO projects this month, said Mr Mah.

Source: Straits Times, 14 Jan 2010

FIVE Singapore companies were among the first batch of 12 who signed agreements to invest in the new Vietnam-Singapore Industrial Park (VSIP) project in Hai Phong city yesterday.

The quintet comprises Boustead Projects, which plans to develop a multi-user food processing and logistics hub; GuocoLand Vietnam Company, which envisions a self-sustained integrated community in the VSIP; KingsLand Development, which intends to build customised factories and warehouses; Modern Montessori International, which wants to develop pre-schools; and Zaienta Singapore, which plans to set up a mobile device assembly and data centre services for the VSIP.

The Nanyang Technological University (NTU), too, has signed a deal to collaborate in research, education and feasibility studies in the 1,600-hectare integrated township and industrial park, about two-hour drive from the Vietnamese capital Hanoi.

Ng Wun Jern, executive director of NTU’s Nanyang Environment & Water Research Institute (Newri) said the deal would see the institute conduct research in environmental impact, water management and scenario analysis of flooding and draining management.

Modern Montessori International (MMI), meanwhile, is continuing its expansion across Asia with the aim of leasing land or a ready-built building within the VSIP to develop international-class pre-schools for Vietnamese children.

The group’s chairman and chief executive T Chandroo said this maiden entry into Vietnam and the first strategic partnership with the VSIP would allow MMI to expand its pre-school education services across Vietnam.

Zaienta Singapore CEO Benjamin Chow told BT at yesterday’s VSIP ground-breaking ceremony, where he signed the memorandum of understanding (MOU), that the ‘time was ripe’ for his four-year-old company to make its first foray into ‘bustling Vietnam’.

‘A lot of banks have got their full licenses to operate here, so they would require data services from a third party. We are now in the process of obtaining the necessary telco licenses and we hope to be operational in VSIP in the next two years,’ he said.

Zaienta already has offices in China and the United States and regards Vietnam as an ideal location to do business given its central location in the region and vast business opportunities as an ‘emerging economy’, said Mr Chow.

Among the remaining six companies that signed deals with VSIP include the Best Western Pearl River Hotel, Vietnamese property developer Central Land Corporation and Malaysian real estate developer Setia International.

Source: Business Times, 14 Jan 2010

It sees share of sales from redevelopment to triple in 3 years

Unitech Ltd, India’s second-biggest developer, expects its share of sales from redeveloping Mumbai slums into luxury apartments to triple in three years and boost profit, managing director Sanjay Chandra said.

Unitech, based in New Delhi, is developing 100 acres of land in north Mumbai’s Santacruz area, near the city’s airport, by knocking down shacks typically built with tin, asbestos and plastic sheets, and building apartments in towers serviced by high-speed elevators. Slum dwellers will be resettled in smaller apartments in separate buildings on part of the cleared land.

The world’s second-fastest pace of economic growth is boosting incomes for India’s urban population and spurring demand for houses that cost at least 2.5 million rupees (S$76,420) in a Mumbai suburb. About eight million people live in slums in India’s financial capital and surrounding areas, more than the population of Switzerland.

‘Mumbai is a lucrative market and prices tend to go up firmly and demand is usually strong,’ said Jigar Shah, head of research at Kim Eng Securities India Pvt in Mumbai.

The measures to develop slum areas and build affordable homes ‘will help lift return on equity and profit’. Mumbai properties may account for 40 per cent of revenue in three years, up from the current 12 per cent, Mr Chandra said in an interview in Mumbai.

The government’s plan to redevelop larger shanty towns such as the 535-acre Dharavi slum near the new Bandra-Kurla business district has been delayed because of political indecision and disagreements, said Jockin Arputham, founder and president of the National Slum Dwellers Federation. Set up in 1975, the federation, spread over 70 towns, has 15 million slum dwellers as members through their respective local associations.

‘It’s not easy to do redevelopment as moving people is a complex task,’ said Anshuman Magazine, New Delhi-based managing director of CB Richard Ellis for South Asia. ‘Not everyone may want to be relocated for economic reasons, not to mention legal and other regulatory issues, and the state of the real estate market.’

Shares of Unitech gained 0.2 per cent to 88.7 rupees at the close of Mumbai trading. They more than doubled last year compared with an 81 per cent increase in the benchmark index.

Unitech, which posted a 51 per cent drop in profit in the three months ended Sept 30, is also building budget homes. It has cut the time to build low-cost housing by 40 per cent as it tries to boost revenue in a nation facing a shortage of 24.7 million homes.

The company is trying to emulate the success developers including Cyrela Brazil Realty SA Empreendimentos e Participacoes have had in boosting profit from selling budget homes, Mr Chandra said. Cyrela, Brazil’s biggest developer, tripled profit in the third quarter and plans to sell 19,000 homes this year, according to a company presentation.

‘We are looking at it as an assembly-line kind of business model,’ Mr Chandra, 37, said. ‘If you make an affordable product, the margins will be lower, but the capital will churn much faster, so your return on equity will be much faster.’

Success for Unitech will depend on government laws, Mr Chandra noted. The company, which began selling its Unihomes brand of budget housing in Bhopal, hasn’t built such properties in its biggest market near New Delhi because of rules restricting the number of residents in its housing complexes, he added.

The Unihome brand sells property for about two million rupees, according to the company’s website.

Source: Business Times, 14 Jan 2010

INDUSTRIAL property prices could be heading up anytime by Q2 2010, says Colliers International, citing the close link between that sector and the improved residential property market.

The property consultancy took a look at historical trends and found that industrial property prices have typically lagged residential property prices by one to three quarters.

For instance, when the home price index bottomed in Q4 1998, the industrial property price index hit a trough three quarters later in Q3 1999. And when home prices reached a high in Q2 2008, industrial property prices peaked shortly after in Q3 2008.

‘If past trends were to hold true, the industrial strata property market could be poised for a recovery in Q4 2009 at the earliest, or Q2 2010 at the latest, given that the residential property market bottomed out in Q3 2009,’ Colliers said.

After a year-long decline, the private home price index managed to turn around with a 15.8 per cent gain in Q3 from the previous quarter, supported by a surge in demand for suburban homes. The government estimates that the index continued to climb by 7.3 per cent quarter-on-quarter in Q4.

Colliers added that the industrial strata market has been drawing investors’ attention. Various developments have made it ‘a good alternative for property investors traditionally familiar only with investing in residential properties’.

For one thing, there has been an increase in the supply and variety of strata-titled industrial properties, and Colliers foresees more projects being launched soon.

Industrial properties have also become more affordable as an increasing number of them are on short leaseholds of 30 or 60 years, or have units measuring less than 1,000 square feet in size. Many such properties can be bought for less than $500,000, Colliers noted.

And while properties with shorter leaseholds cost less, they can command rents similar to those of properties with longer leaseholds, leading to higher rental yields raging from 6.5-7 per cent.

Colliers observed that demand is also returning for strata-titled industrial properties. As at end-November last year, some 690 transactions had taken place in the market, and this is almost 90 per cent of the volume seen in the same period in 2008.

‘If the buying momentum continues, prices of strata industrial space could start creeping up soon,’ it said.

State industrial land put up for sale in the last few months also drew keen interest from the market, reflecting developers’ confidence that the industrial strata market is near bottom.

Source: Business Times, 14 Jan 2010

THE tender for the collective sale of Green Lodge at Toh Tuck Road closed yesterday afternoon but it is not clear if a winner for the site has emerged.

BT understands that there were ‘a few’ bids for the freehold parcel, but marketing agent Newman & Goh was tight-lipped over the results of the tender. It is conducting due diligence and has imposed a blackout period in the meantime.

The 80-unit Green Lodge, spanning 151,075 sq ft with a plot ratio of 1.4, was put up for sale at end-December last year. The asking price stood at $135 million, and including a development charge of around $9.5 million, the price worked out to $683 per sq ft per plot ratio.

The winning developer would be able to launch a project with around 211 units measuring an average 1,000 sq ft.

A consultant estimated that the units could be sold at around $1,000-$1,100 psf, while Newman & Goh projected an average selling price of at least $1,250 psf.

In a report issued yesterday, analysts from Goldman Sachs expressed reservations over the return of collective sales activity for now. ‘Even though developers are financially stronger, we think they will choose to stay on the sidelines in the en bloc market until demand returns more visibly in 2H 2010,’ they said.

‘A good indication of potential trigger points for en blocs is the widening of primary over secondary market prices.’

Source: Business Times, 14 Jan 2010

THE New York apartment complex that proved an ill-fated investment for the Government of Singapore Investment Corporation (GIC) may face foreclosure after its owners defaulted on a debt payment last Friday.

Some of the debt holders are now demanding payment within 10 days from the owners of Stuyvesant Town and Peter Cooper Village in Manhattan – the first step towards foreclosure, according to a Bloomberg report yesterday.

GIC reportedly holds US$575 million (S$798 million) in mezzanine debt backed by the property and a further US$100 million in equity.

On Monday, the state investment company said it had ‘recognised the losses’ on its investment last year. GIC is also believed to have written down the value of the loan.

If a property is foreclosed and sold, senior debt holders – like the bank that issued the main mortgage for the property – have the right to be repaid first from the cash, followed by mezzanine debt holders and then equity owners.

When asked to confirm the latest developments and how they would affect GIC, a spokesman told The Straits Times: ‘We have nothing to add beyond our earlier response.’

Bloomberg’s report yesterday said a group of debt holders, led by Winthrop Realty Trust – which holds about US$300 million in senior mezzanine debt – issued a letter saying they intend to pursue ‘rights and remedies’ including a foreclosure sale.

The parties could act within 90 to 180 days, said two people familiar with the matter, according to Bloomberg.

The owners of the 11,200-unit apartment complex, an American venture led by property firm Tishman Speyer Properties and asset management firm Blackrock, missed a US$16.1 million payment on development last week.

They bought the property in 2006, at the height of the United States housing boom, for US$5.4 billion. To pay for this, they took out massive loans: a US$3 billion mortgage from Wachovia bank and US$1.4 billion in mezzanine debt from various companies, including GIC.

A former banker told The Straits Times yesterday that after a company has defaulted on its debt, the bank or debt holders can call an event of default and demand payment. If they do not receive payment, they can go to court and serve a writ to get summary judgment, after which the court will order payment.

But if there is still no payment forthcoming, then the lenders can apply to the court for foreclosure, said the ex-banker, who asked not to be named because he has retired.

He added that, usually, the main lenders, or senior debt holders, will have lent about 60 per cent of the property’s value. After they get that back following the foreclosure, and assuming the value of the property has fallen quite significantly by about 30 per cent to 40 per cent, there is not much left for mezzanine debt holders and equity owners.

Bloomberg’s report said Fitch Ratings valued the Stuyvesant Town and Peter Cooper Village at US$1.8 billion in October last year – a third of the original purchase price and just over half of the mortgage taken from Wachovia.

Source: Straits Times, 14 Jan 2010