The Urban Redevelopment Authority (URA) on Tuesday launched a transitional office site at Mohamed Sultan Road for sale by public tender.

The 15-year-leasehold site has an area of about 0.62 hectares and a maximum permissible gross floor area of about 9,200 square metres.

The minimum price for the site is S$9.33 million.

Since October 2008, the land parcel was made available for sale through the Reserve List System. Under the system, a site would be released for sale only if a bid with an acceptable minimum price is received.

Two weeks ago, URA said it accepted an application from a developer to put up the site for sale.

In October 2008, URA had rejected a sole bid for the Mohamed Sultan site as the price offered was deemed to be too low. Back then, RSP Architects Planners & Engineers had put in a bid of S$4.65 million.

The site was subsequently placed on the reserve list. The current tender for the site will close on March 18.

Source: Channel News Asia, 9 Feb 2010

Property developer CapitaLand on Tuesday said it has seen overwhelming response to its new condominium in Beijing, with 95 per cent of phase one units sold in just over two weeks.

The condominium, called the Beaufort, sits on a 53,808-square metre site and is located within walking distance to Beijing Chaoyang Park, one of China’s largest city parks.

An entire block, comprising 467 units, was launched for sale. The average launch price for the units was S$5,600 per square metre, with a total sales value amounting to over S$167 million.

Commenting on the Beaufort’s success, CEO of CapitaLand China Holdings, Jason Leow, said the Chinese government has introduced a slew of measures to ensure that the property market is developing at a sustainable pace.

When completed, the Beaufort will have a total of four residential blocks with 1,027 high-end apartments, comprising studios, and one- to four-bedroom units.

The entire development will be completed over three to five years, with the first residential block slated to be handed over to the homebuyers by 2011.

Source: Channel News Asia, 9 Feb 2010

Borrowers looking to make energy upgrades in their homes that will lower utility bills, along with their environmental impact, may soon find additional options available to them.

Fannie Mae will offer incentives to borrowers of conventional loans who devote some of the funds to energy improvements.

Fannie Mae, the government-backed company that sets lending standards for mortgages, said that by this summer it would unveil incentives for those who use part of their mortgages for energy-related improvements.

And EnergyStar, a joint effort of the Department of Energy and the Environmental Protection Agency, is expected to introduce borrower incentives in New York, after running pilot programmes in Colorado, Maine and Pennsylvania.

At the same time, the Appraisal Institute, an industry trade group, said it was training members to better quantify the value of energy-efficient homes. It also said that it was developing a certification programme for appraisers who want to specialise in energy-efficient homes.

For years, the only option for borrowers was a so-called energy-efficient mortgage from the Federal Housing Administration.

Under that programme, borrowers who obtained FHA-insured mortgages could qualify for larger loans if they earmarked additional funds for energy-related improvements, and if those upgrades yielded long-term savings. The FHA has varying formulas for determining the maximum amount for energy improvements, but for many homeowners, the limit is 5 per cent above what they could have qualified for in a conventional loan.

As with all FHA loans, energy-efficient mortgages are marginally more expensive, because borrowers must pay the FHA insurance premium.

Borrowers have flocked to FHA loans in the past two years, because the qualifications are less stringent than for non-FHA loans. But just 3,088 borrowers chose energy-efficient mortgages last year, according to the agency.

Some mortgage executives have complained that these loans are more complicated than others, because borrowers have to complete an energy audit of their homes and use an appraiser with expertise in evaluating energy-efficient properties, among other things.

But Susan Barber, the senior vice-president for Wells Fargo’s new construction and renovation programmes, said the approval process was on par with those for other loans.

Either way, borrowers will have more options in the coming months.

Amy Bonitanibus, a spokeswoman for Fannie Mae, said the company would introduce a programme before the summer offering incentives to borrowers who take out conventional loans, and devote some of the funds to energy improvements. She declined to disclose details about the programme.

Fannie Mae loans require no mortgage insurance if the borrower makes a down payment of at least 20 per cent, so its energy-efficient mortgage will very likely save borrowers more money.

New York borrowers, meanwhile, will have another option, said Howard Banker, a managing director of the Energy Programs Consortium, a non-profit group in Washington that determines which lenders may participate in the federal EnergyStar programme.

Mr Banker said EnergyStar would announce before July that one of the nation’s major lenders will offer EnergyStar mortgages. He declined to identify the lender by name, but he said the EnergyStar borrowers would probably receive below-market interest rates or other monetary incentives if they took out bigger loans and spent the extra money on energy upgrades in the home.

EnergyStar borrowers must submit to an energy audit, and demonstrate that the upgrades will cut energy consumption by at least 20 per cent.

Homeowners could still face logistical hurdles in obtaining ‘green’ mortgages from lenders, said Curt Jones, the president of Civil1, a civil engineering company in Woodbury, Connecticut. He said that appraisers sometimes failed to recognise the increased market value of energy-efficient homes.

Source: Business Times, 9 Feb 2010

Salt Lake City’s huge church-financed redevelopment project has prompted debate both inside the Mormon community and out

FOR many devout Mormons, Utah’s capital city is important mainly as a setting for the jewel that really matters: Temple Square at the city’s centre. Brigham Young, the pioneer leader of the Church of Jesus Christ of Latter-day Saints, laid out the urban grid with street numbers starting at the temple. The secular world was thus defined by the sacred core.

But now a hugely ambitious, US$1 billion church-financed redevelopment project near the temple, called City Creek Centre, and a wave of recent church property purchases in the vicinity are prompting a new debate inside the church community and out over where the line between culture and economics should be drawn.

Some residents say the church, by opening its chequebook in a recession, rescued the city when times got tough. The 1,800 construction jobs at City Creek alone have provided a big local economic cushion. Completion of the project – 20 acres of retail shops and residential towers – is scheduled for 2012.

‘City Creek has been a literal and figurative godsend,’ said Bradley D Baird, the business development manager at the Economic Development Corporation of Utah, a private nonprofit group that has no direct involvement with the project.

Other people say that if the new heart of downtown has a strong church flavour, Salt Lake, which has become more diverse in recent years – could veer back toward its roots, for better or worse. About half of city residents are Mormon, according to many estimates, and if many, or most, of the roughly 700 apartment units at City Creek were occupied by Mormon families, the city could have a dramatic new feel.

‘Our downtown has become a ghost town in my life – nobody lives there,’ said Dan Egan, 55, a lawyer and church member who works near the site but lives in the suburbs. ‘Having several thousand people live down here will have a big impact, and having many of them LDS would be a very interesting thing to see.’ Church leaders say they have no religious goals in mind for City Creek, or for their other recent acquisitions. Over just the last month, the church has bought three more properties, including a 13-acre parcel a few blocks south of City Creek. A spokesman said the purchases were investments.

‘There will be no evidence of the church within those blocks,’ said H David Burton, a former corporate executive who oversees the church’s business interests as the presiding bishop. Bishop Burton said the civic spaces inside City Creek would be private property, but ‘with all the attributes of a public venue.’ Alcohol, for example – always a cultural flashpoint because of the church’s teachings to avoid it – will probably be allowed in City Creek, Bishop Burton said, under special contracts that will allow a restaurant wanting a liquor license to buy the underlying property.

That would keep the church from being in the liquor business or from benefiting from liquor sales while still allowing sale and consumption on the premises.

As for who might want to move in, Bishop Burton said he thought proximity to the temple would make the apartments attractive to church families, but only time will tell. About 40 per cent of the available condominium units have been reserved by deposit, but a church spokesman said the buyers’ religious affiliations were unknown.

‘If I were making a guess – and I don’t have any empirical data – it might be more attractive to LDS than to others,’ Bishop Burton said.

One former Salt Lake City planning official, Stephen A Goldsmith, who is not a Mormon, said he was thrilled by the thought of people moving back downtown, but feared that the church’s economic concentration would lead to a ‘Vaticanisation’ of the area.

‘The concern is about having just one owner own so much of the heart of the capital city,’ said Mr Goldsmith, who was director of city planning from 2000 to 2002 and is now an associate professor of architecture and planning at the University of Utah.

Already, Mr Goldsmith said, a buffer zone of about 100 acres of church-owned properties, assembled gradually over the past few decades, rings the inner core. He said the ‘we/they’ divide between Mormons and non-Mormons could widen if even more public space became private or was linked to one group’s cultural values.

Church leaders said the desire to head off economic decline in downtown was their prime directive at City Creek.

‘Along with economic malaise comes an element that we were concerned about in proximity to the temple,’ said Bishop Burton. That the temple area might one day start to feel dangerous was simply intolerable, he said. ‘With decay, sometimes comes crime,’ he said.

Although lots of urban churches worry about those issues, the ones that can write a US$1 billion check are rare.

‘It’s certainly one of the largest, if not the largest project in the United States funded by a single entity, and the fact that the entity is a church makes it doubly unusual,’ said Patrick L. Anderson, the chief executive and founder of the Anderson Economic Group, a Michigan-based real-estate consulting company.

Mr Anderson, who said his firm had no economic involvement in City Creek, said such megascale urban redevelopment mostly went out of fashion after the 1970s and ’80s. That makes Salt Lake even more singular, he said.

Church officials said, however, that some of what they were doing was a throwback – to the 1930s. In the Great Depression, the church established a food and clothing distribution system for destitute members and bought land all over the state, establishing a precedent for wading in during hard times.

Now, some of those 1930s economic stimulus lands could come back into play. The Salt Lake City Council is considering another huge development project called the Northwest Quadrant near the airport, where the church owns a swath of land used long ago as a Depression-era church farm.

Source: Business Times, 9 Feb 2010

Industrial and Commercial Bank of China (ICBC) said it will halt lending to property developers that are hoarding land and may even call back some loans, in a bid to guard against credit risks.

The world’s biggest bank by market capitalisation also reiterated that it planned to increase lending in a reasonable and balanced manner for the rest of the year after lending roughly 110 billion yuan (S$22.9 billion) in January.

‘The bank will strictly control the quality of new lending, strengthen the management of potential risks and ensure a stable quality of credit assets,’ ICBC said in an emailed statement yesterday.

ICBC said it would offer more loans to major projects already under construction, to companies in services and green energy sectors and to drive domestic consumption, and would avoid lending to sectors suffering from overcapacity.

Chinese banks lent 9.6 trillion yuan last year, flooding the economy with cash that has fuelled rampant property price rises.

After Beijing announced a slew of tightening measures in recent weeks, some market observers are worried that a potential correction in the real estate market in 2010 could saddle banks with a raft of bad loans.

Source: Business Times, 9 Feb 2010

Move affects those involved in late and abandoned projects

Malaysian Housing and Local Councils Minister Kong Cho Ha said yesterday that 1,345 developers and more than 5,000 directors of such companies involved in problematic projects have been blacklisted.

Mr Kong said it involved not only housing projects that were abandoned but also housing projects that were not completed on schedule.

‘Apart from being blacklisting, many developers were also fined for not conforming with the Housing Act, including not preparing reports on schedule, especially work progress reports every six months,’ he told reporters after visiting the abandoned Putra Intan Condominium project in this small town in Sepang district.

The project that was initially supposed to have been completed in 2005 was abandoned and later taken over by another developer who is expected to complete the work in eight months.

Mr Kong said, according to statistics, there were 135 abandoned housing projects in the country but some were being revived by corporate organisations.

Though the figure was not high when compared with 18,000 housing projects throughout the country, it would not be fair to house buyers.

‘For every developer, starting a new housing project is a new business. So, if they understand their responsibility as a developer and follow the agreement, they must complete the projects according to the dates set,’ he said.

Mr Kong added that the government also encouraged the build-and-sell concept to safeguard the interests of the buyers, but not all developers can afford the concept.

‘If we do 100 per cent build-and-sell system, then the property market or developers will be more or less limited to only the very big boys – which would lead to a situation whereby they can monopolise the market and it’s not good for the consumer,’ Mr Kong said.

‘We have an open-economy policy, where we cannot exclude new players coming into the property market.’

Source: Business Times, 9 Feb 2010

As a youngster living in a tiny flat with six others in one of the world’s most densely populated cities, Hong Kong architect Gary Chang has been obsessed by living space, or rather a chronic lack of it.

After three decades in the same boxy, 32-square-metre dwelling he grew up in, Mr Chang has come up with an innovative answer to the increasingly cramped lives of many urban dwellers – the science fiction-like ‘domestic transformer’.

‘The idea is everything is moving. This is my laundry space,’ Mr Chang said, sliding away a wall filled with CDs to reveal a washing machine and dryer.

By sliding another track-mounted metal wall that bears a plasma TV, a kitchen materialised. Beside that, there is a luxurious 1.9-metre bathtub that itself turns into a guest bed.

While people in other teeming cities such as Tokyo resort to drop-down beds and foldable futons, the award-winning Mr Chang has taken the concept of space-saving to the extreme.

His tiny rectangular apartment, tucked into the bowels of an old, nondescript tenement building, has polished chrome walls that bear 24 configurations, each suiting a specific need.

The space available becomes a home theatre, spa, kitchen, bedroom, chill-out zone rigged up with a hammock, depending on what Mr Chang needs at any moment.

‘The high intensity of use makes (it) more like a large home appliance than a dwelling,’ wrote Mr Chang in his book 32 metre square apartment – a 30-year transformation that chronicles the origins of his innovative abode, which has undergone numerous facelifts through the years.

Mr Chang, who runs his own design and architectural firm, describes an empty space as a ‘luxury’ and once built a ‘Suitcase House’ in Beijing blurring the boundaries between public and private space.

‘The only enclosed space is the toilet, and again, it’s bigger than usual,’ said Mr Chang, whose flat is surrounded by the highways and skyscrapers that embody Hong Kong’s rampant urban development that have made spacious flats a pipedream for many.

At a cost of HK$1.8 million (S$329,600), Mr Chang hopes his dwelling offers a viable, life-enhancing alternative for Hong Kongers who can’t afford anything bigger.

‘The idea is to tune your home closer to what you really want instead of being dictated by the market or by the space allocated,’ said the designer who says he’s now in talks with property developers to replicate his flat in other space-starved, costly cities across Asia and Europe, including Paris.

Source: Business Times, 9 Feb 2010

Cheung Kong warns buyers to look out for a bubble amid an ‘unusual rise’

The Hong Kong property market has risen too fast and buyers must look out for a bubble, Cheung Kong (Holdings) Ltd’s executive director Justin Chiu said.

‘The rise is a bit unusual,’ Mr Chiu said in a Bloomberg Television interview yesterday. ‘There should be a correction at some point.’ Low mortgage rates and buying by rich mainland Chinese drove a 29 per cent gain in Hong Kong home prices last year. The city faces a ‘huge’ potential risk of bubbles forming in its asset markets as low interest rates and high liquidity drive up prices, Norman Chan, chief executive of the Hong Kong Monetary Authority, said last week.

Cheung Kong, controlled by billionaire Li Ka-shing, last month forecast luxury-home prices may rise 15 per cent this year, and those for new mass-market residences may climb 15 per cent to 20 per cent.

‘House prices now are still almost 50 per cent below the 1997 high and affordable to households,’ said Buggle Lau, chief analyst for properties at Hong Kong-based Midland Holdings Ltd. ‘It is too early to call it a bubble.’ Hong Kong prices rose about 40 per cent from June to January, and buyers must not expect the same pace of growth in prices in 2010, Mr Chiu said. ‘When people make their buying decisions, they should be cautious,’ he said. ‘Low interest rate environment will not last forever.’

Prices for luxury homes in Hong Kong, defined as those costing at least HK$10 million (S$1.83 million) or bigger than 1,000 square feet (92.9 square metres), may rise 20 per cent this year, real estate broker CB Richard Ellis Group Inc said on Jan 12. Prices for non-luxury homes may rise 15 per cent, it said.

The Hong Kong government has taken ‘appropriate steps’ to warn investors about overheating in the market and will increase land supply this year to curb gains in home prices, Mr Chiu said.

Hong Kong suspended scheduled land sales in November 2002 as real estate prices fell after the 1997-98 Asian financial crisis, the 2000 bursting of the dot-com bubble and the Sept 11, 2001, terrorist attacks. It resumed sales in January 2004, introducing a system of selling land through auctions only after developers promise to pay a minimum amount, part of an undisclosed reserve price.

Cheung Kong rose 0.6 per cent to HK$90.65 at the close of trading in Hong Kong. The shares climbed 37 per cent in 2009, underperforming the 66 per cent advance in the Hang Seng Property Index.

Source: Business Times, 9 Feb 2010

I REFER to yesterday’s letters, ‘Costly choices’ by Mr Mervyn Song, and ‘Room for pragmatism’ by Mr Ng Kwong Yee.

The HDB flat ownership scheme has been tweaked several times to meet the demands of the population, without sacrificing the primary objective of the HDB as the government provider of affordable housing.

For example, in the 1970s, HDB compulsorily acquired flats of owners who had another property, but the rule was later amended to allow private property owners who lived in their HDB flat for more than five years to keep the flat and lease out their private property for investment.

The relaxation of rules should be commensurate with the circumstances in the supply and demand of affordable housing.

Where supply of new flats is abundant and resale flat prices affordable, HDB flat owners can live in them while investing in another property. Resale flats, like private property, are subject to the fierce forces of the open market, and prices come down only if supply exceeds demand. However, in the past two decades, demand has always exceeded supply, so we can expect prices of flats sold in the open market to go up.

Thus HDB remains the only provider of affordable housing amidst rising costs of building materials and land.

Mr Ng is right to mention that HDB lacks the teeth to weed out illegal letting of flats. Perhaps the National Registration Office can match registered addresses with HDB’s records to see how many mismatches there are.

Next, it may help if HDB buys back (not compulsorily acquires) from HDB flat owners who own private property and resells these flats to those who need a roof over their head at subsidised prices.

Patrick Sio

Source: Straits Times, 9 Feb 2010

I REFER to yesterday’s letter from Mr Ng Kwong Yee (‘Room for pragmatism’).

I agree with most of his comments on appreciating values and preferences of flats in various locations, but not with his comments on rental.

The reason for ever rising valuation and cash-over-valuation of flats is clear – buying and selling.

Some buy to have a roof over their heads, whereas some sell and then buy again to upgrade. Then there are those who buy now to save money as it is cheaper than waiting until prices go up again. No matter how you look at it, when you buy or sell, the price is never the same.

From the main context of previous discussions, it is buying and selling that causes movement in the value of HDB flats – not rental. When one buys and then rents out, it actually relieves market tension by reducing the number of people who would otherwise be in the buying market. When more people rent, fewer people buy and prices are not driven higher. And when the landlords decide to keep their flats for rental, the speculative part of rental property also disappears.

Yeo Shuan Chee

Source: Straits Times, 9 Feb 2010