SOME years back, at the peak of the en bloc saga, the authorities rightfully responded to calls for more transparency in the sale process and decided that sales committees should be elected.

There were suggestions that a sales committee (SC) so elected should have the support of at least 80 per cent of eligible voters present in that meeting, thus giving the SC a clearer and stronger mandate from owners to pursue the en bloc options for their estate.

As the rules currently stand, both the management council (MC) and the SC is elected by a simple majority of voters present in a general meeting. As the MC is primarily tasked with the management and maintenance of the estate, a simple majority vote for the MC is appropriate.

The SC’s primary objective is to prepare the estate for the en bloc sale, which requires 80 per cent of all owners’ consent. Therefore, it may be inferred that the SC is deemed the elected representative of owners in favour of the sale and thus should provide justifications for expenses likely to be incurred in preparing the estate for the sale.

This way, owners not in favour of the sale would not feel short-changed, especially when the percentage of such owners is significantly higher than 20 per cent, making a successful en bloc highly unlikely. This would also address concerns by objecting owners that 50 per cent of the owners can dictate expenses for an activity that required 80 per cent of owners to proceed.

Coupled with the current rule allowing an MC member to serve in the SC as well, a pro-en bloc MC may over time be less differentiated from the SC, thus undermining the original intent of the authorities to have a committee separately elected for the purpose of en bloc work.

The obvious advantage with two distinct bodies is to provide the mechanism of checks and balances over the management of estate funds, in particular that of the SC’s en bloc expenses and processes.

In the light of the improving property markets, perhaps the authorities should pro-actively ponder the above observations and consider changes in the law governing the election of an SC.

Ong Tee Jin

Source: Straits Times, 2 Feb 2010

ROLLS-ROYCE yesterday commenced construction of its $700 million Seletar Campus which is expected to become fully operational by mid-2012.

The 15.4ha campus at the Seletar Aerospace Park will comprise a Trent aero engine assembly and test facility, a wide chord fan blade (WCFB) manufacturing facility as well as a regional training centre and advanced technology centre.

The engine facility has a designed capacity of 250 engines a year while the fan blade plant will initially be able to manufacture 6,000 pieces a year, with the possibility of expanding to 7,600 blades with further investment.

These products are currently made in Rolls-Royce’s plants in the UK but management emphasised that the Singapore facilities are meant to complement, and not replace, these.

‘What we’ll see is a facility with massive experience in the UK partnering with a new facility . . . to achieve for both facilities increased productivity and lowering of costs,’ said Rolls-Royce Singapore Southeast Asia regional director Jonathan Asherson. There will also be likely downstream effects from the manufacturing process as more of the supply chain is moved to Asia to feed the plants.

Typically 70 to 80 per cent of production process is outsourced, Mr Asherson said, and this would naturally likely lead to more involvement of local supply chain players. As other engine manufacturers such as Pratt & Whitney set up in Singapore, there will also be more suppliers coming in to service them and this will benefit all the manufacturers, Mr Asherson said.

It made sense to locate the plants in Singapore because Asian growth is the highest for Rolls-Royce by region with some 40 per cent of the order book coming from the region, he added. In addition, ‘it would be a logical progression’ to do design work at the Singapore facility to make full use of the talents available.

‘Singapore is an important regional hub for Rolls-Royce and we are very pleased to be expanding our presence here,’ said COO Mike Terrett.

‘We are pleased that Rolls-Royce has chosen to locate its Asian campus in Singapore, making it the home in Asia for some very sophisticated aerospace capabilities,’ said Trade and Industry Minister Lim Hng Kiang, who was guest of honour.

Source: Business Times, 2 Feb 2010

I WAS shocked last Friday to read a notice pasted in the lift lobby area announcing that HDB would begin construction this month of two blocks of one- and two-room rental flats on the green field between Block 475 and 476 Pasir Ris Drive 6.

Residents were not informed prior to the notice.

There was no attempt to make sure that affected residents were well informed nor was there any proper feedback channel established.

The field has provided much needed space in a cramped HDB environment, and adding another two blocks of flats would not only deprive the residents of greenery, but also their privacy. This is only some of the concerns of the residents.

Shouldn’t HDB concentrate on building rental flats in new estate developments? This would make more economic sense.

The HDB has converted two blocks of flats in Toa Payoh Lorong 6 into dormitories for foreign workers. Is this an indication that more rental flats will be built in mature estates and that there will be more conversions of other rental flats into workers’ dormitories?

Does it also mean that these two blocks in Pasir Ris Drive 6 will be converted into rented dormitories in times to come?

Eileen Ng (Ms)

Source: Straits Times, 2 Feb 2010

THE logistics service provider CWT has moved closer to setting up a real estate investment trust (Reit) by announcing that it will sell and lease back two of its properties.

The buildings are CWT Commodity Hub – the largest warehouse in Singapore valued at $323 million – and the $120 million CWT Cold Hub.

The valuations are based on the leasehold titles of the two properties granted by JTC Corporation, which has given in-principle approval for the sale and lease back arrangements. The lease terms are for five years for each property.

They will form part of Cache Logistics Trust (CLT), the name of the proposed Reit. It aims to list on the Singapore mainboard and make further investments in logistics assets around Asia-Pacific.

Earlier reports quoting a source involved in the transactions suggested the Reit will hold properties worth around $1 billion, with DBS managing the listing. CWT said yesterday that ‘the initial portfolio is envisaged to comprise six high-quality logistics properties (here)’.

Apart from the two buildings cited yesterday, it has four other properties earmarked. They are owned by C&P Holdings, Singapore’s largest privately owned container depot operator.

CWT announced its plans to form a Reit with ARA Asset Management – a locally based property fund manager tied to Hong Kong tycoon Li Ka Shing’s Cheung Kong group – on Jan 14.

Under the proposal, CWT will have a 40 per cent stake in the trust manager with the rest held by ARA. EDB Investments – the investment arm of the Economic Development Board – subscribed to 16 million new CWT shares at 78.8 cents apiece last week. The $12.6 million stake represents 2.7 per cent of the firm’s enlarged capital.

The CLT listing is subject to regulatory approvals by the Monetary Authority of Singapore and SGX. CWT shares closed half a cent down at 93 cents yesterday.

Source: Straits Times, 2 Feb 2010

ONE innovative solution to meeting the nation’s expected shortage of land is to go underground and carve out spaces.

These subterranean land banks would be located mainly near transport hubs, according to the Economic Strategies Committee (ESC) report yesterday.

As Singapore plans ahead for a city that ‘remains extremely liveable even as we grow, we have to make more efficient use of our land (and)… this will call for bold and imaginative urban planning and redevelopment’, said the report.

Senior Minister of State for National Development Grace Fu expanded on the idea yesterday, saying that the Government has to identify new industrial estates to serve new industries.

It could create basement spaces with new underground infrastructure, and land banks around our rail network, said Ms Fu, who co-chairs the ESC sub-committee on land.

She said the Government has found ‘tremendous potential for us to create infrastructure underground already’ during the process of developing the rail system.

‘This means that there’s land that can be created underground. We may not need to tap (it) any time soon but if we’re to do it, as we are developing the infrastructure underground, it’s getting the land ready for us,’ she said.

The Government also wants to develop a masterplan to ensure that underground and ground spaces are developed in sync with each other to ensure that the maximum potential is realised. It is setting up the National Geology Office to collate information on underground development.

The Government will also develop a subterranean legal and valuation framework that will benefit private and public sector efforts in developing underground spaces, added Ms Fu.

Investment will be pumped into research and development and cavern level test beds to gain experience in underground development.

Going underground is not alien to Singapore. The industrial developer and landlord, JTC Corporation, has started work on the first phase of the Jurong Rock Cavern, the first underground oil storage facility to be built in South-east Asia.

Industry observers said yesterday that going underground is challenging from a cost viewpoint.

Mr Ashvinkumar Kantilal, president of the Singapore Institute of Architects, said developers only go into basements when required because of the cost.

‘The uses of these underground spaces also have to be very specific,’ he said.

Perhaps a leap in technology will lower costs to allow Singapore to maximise the potential of such spaces, he added.

Source: Straits Times, 2 Feb 2010

EVEN as Singapore’s iconic Marina Bay nears completion, its next waterfront city has been identified: Tanjong Pagar.

Right now, it is home to cranes and rows of stacked containers waiting to be loaded onto ships calling at one of the world’s busiest ports.

But come 2027, when port operator PSA Corporation’s lease on the land expires, the prime waterfront space should become home to skyscrapers of another sort.

The Economic Strategies Committee (ESC) yesterday called for Tanjong Pagar to be transformed into a waterfront city catering for the expansion of Singapore’s business district and boasting apartments, hotels, and lifestyle and tourism facilities.

‘This area is very attractive, it is just at the fringe of the city, the size is comparable to another Marina Bay and it can offer immense opportunities to support future growth,’ said Senior Minister of State for National Development Grace Fu yesterday.

Because of its proximity to the Central Business District, Sentosa and universities, Tanjong Pagar ‘will give us lots of elements to work on and we’re quite excited about the potential’, she added.

However, details are not ready at the moment as the Government is not looking at developing it any time soon.

Ms Fu, who co-chaired the ESC sub-committee on higher land productivity for future growth, said this is all part of the committee’s push to make the most productive use of Singapore’s land.

This is especially since Singapore’s competitiveness will in future rest on being ‘a global city and a meeting point in Asia for enterprise, talent, cultures and ideas’.

The idea is make each piece of land work harder and examine how land use should be reconfigured to support the new economic strategies for the country.

For example, more incentives and grants could be given to encourage the private sector to pilot innovative plant layouts for key manufacturing sectors to minimise the use of land, she said.

‘We will also have to progressively step up the rejuvenation of mature industrial estates and at the more macro level… recycle land to support new economic activities,’ she added.

Another look may also be taken at industrial spaces which one cannot imagine could be used for other purposes.

Lorong Halus, for example, used to be just a dumping ground for rubbish, but is now home to wildlife.

‘So we would try not to imagine Tuas as it is now, but rather a place where we could find a congregation of not just economic (or) industrial activities but hopefully residential and recreational as well – a much more pleasant place and a place for the birds as well!’ Ms Fu quipped.

‘We are limited in terms of land but I think we are not limited in terms of imagination and creativity.’

Commenting on the plans for Tanjong Pagar, Mr Steven Choo, chief executive of the Real Estate Developers’ Association of Singapore, said they will add a new dimension to land-scarce Singapore.

However, he also noted that this is a long-term vision which will not have much impact on the current market over the next few years.

‘But eventually I’m sure it will open up more options, more quality living, offices, accommodation, and more variety to our urban landscape,’ he said.

Singapore Institute of Architects president Ashvinkumar Kantilal said the plans were ‘very pragmatic, typical of the Singapore approach’.

The location already boasts Sentosa, residential estates, and a shopping and office hub, and will present a great planning opportunity ‘when the time comes’, he added.

Source: Straits Times, 2 Feb 2010

The Urban Redevelopment Authority (URA) has launched a residential site at Tampines Avenue 1/Avenue 10 for sale by public tender.

The land parcel is the fourth residential site to be launched for sale under the confirmed list of the Government Land Sales (GLS) Programme for the first half of this year.

With a site area of about 3.2 hectares, the site will have a maximum permissible gross floor area of more than 66,000 square metres, and can potentially yield about 600 housing units.

In line with the announced GLS Programme for the first half of 2010, the government will continue to release residential sites for sale on the confirmed list every month, over the next three months till April.

The government also said that it will continue to monitor the property market closely.

If necessary, more land supply can be injected through the GLS Programme for the second half of 2010 to ensure that property prices are in line with economic fundamentals.

Source: Channel News Asia, 2 Feb 2010

Far East said to be top seller in January; Lippo and MCL may release some units

EVEN as developers have gotten off to a good start this year, selling well over 1,000 private homes in January, their launch machinery remains well oiled for more roll-outs in the near future.

Lippo Group is expected to preview Centennia Suites on the former Kim Seng Plaza site, diagonally opposite Great World City, later this week. The average price for the District 9 freehold project is being touted at $2,000 per square foot or even higher.

This is higher than recently achieved prices in the secondary market for nearby projects such as The Trillium and The Cosmopolitan but Lippo is probably banking on the exclusivity factor to market its latest offering. The 36-storey freehold Centennia Tower comprises a single tower with just 97 units, comprising two, three and four-bedroom apartments and two penthouses.

The two bedders are relatively large at slightly over 1,200 sq ft. Three bedders come in five variations but all around 1,800 sq ft; four-bedroom apartments also have five variations of roughly 2,250 sq ft. Centennia’s two penthouses are around 3,300 sq ft and 4,400 sq ft. BT understands that the project is being marketed by CB Richard Ellis and Jones Lang LaSalle.

Agents are also busy gathering interest for MCL Land’s The Estuary, a 608-unit condo at Yishun Ave 1/2. Some market watchers say that they would not be surprised if MCL releases some units before the Chinese New Year break.

For the month of January, Far East Organization is believed to have been the top seller, with sales of close to 300 units. Its bestseller was The Shore Residences, a 103-year-old condominium project on the former Rose Garden site in Katong. Far East is understood to have sold over 140 units in the project last month.

City Developments sold 243 units in January, the bulk of which were in Cube 8 at Thomson Road (167 units) and Livia in Pasir Ris (59 units), a CDL spokeswoman said.

Fellow property giant CapitaLand also did brisk sales. Its 165-unit Urban Suites condo in the Cairnhill area is said to be left with fewer than 30 units.

Frasers Centrepoint sold a total 102 units last month, including 43 units at its Residences Botanique in the Yio Chu Kang/Sirat roads area.

Frasers Centrepoint’s and Far East’s sales numbers are inclusive of about 35 units sold at their two joint-venture condominium projects along Bedok Reservoir, Waterfront Waves and Waterfront Keys.

Allgreen Properties is also believed to have sold a total 62 units from its preview of Holland Residences last week. The average price is $1,625 psf.

CB Richard Ellis executive director (residential) Joseph Tan says: ‘Generally, buyers are showing more interest and there’s acceptance that prices have bottomed out with a strong likelihood of growth. Developers in their pricing policy should also leave room for capital appreciation for investors.’

A Morgan Stanley report dated Jan 27, on a survey of the Singapore private residential sector involving Singapore-based respondents, concluded that, generally, respondents are expecting prices to trend upwards gradually in the medium term rather than spiking in the next 12 months.

As for developers, DTZ executive director Ong Choon Fah says: ‘When there’s a window of opportunity like what we’re seeing now, developers want to capitalise on it and try to push out projects as soon as possible; they can always restock land at government tenders.

‘After all, most economists are still calling for a note of caution on the sustainability of the global economic economy – for instance, if interest rates rise and as governments withdraw their stimulus measures.’

Source: Business Times, 2 Feb 2010

The government will release five residential sites for sale by public tender between this month and April under the Government Land Sales (GLS) programme for the first half of the year.

The Urban Redevelopment Authority (URA) said that apart from the five confirmed residential sites, another 18 residential sites are on the reserve list.

It added that the land from the confirmed and reserve lists are expected to supply a total of 10,550 housing units, the highest in the history of the programme.

URA said the government has more sites in the pipeline to cater for any surge in demand for private housing and to keep private property prices in line.

The latest to be put up for tender is a 3.2-hectare residential site at the junction of Tampines Avenue 1 and Avenue 10.

Source: Channel News Asia, 2 Feb 2010