The two latest HDB Build-to-Order or BTO projects – Punggol Crest and Treegrove@Woodlands – are seeing strong demand.

The number of applications received so far was four times the number of units available. The more popular ones are the bigger flats.

There were some 2,600 applicants for 270 4-room units at Punggol Crest. The 372 4-room units on offer at Treegrove saw 2,390 applicants.

But the 2-room units at Punggol Crest are less popular. So far only 75 people applied for the 240 units.

The selling price for the Punggol Crest flats ranges from S$90,000 for a 2-room flat to S$301,000 for a 4-room flat.

For the Treegrove project, the price ranges from S$64,000 for a studio apartment to S$288,000 for a 4-room flat.

Applications for the two BTO projects close later Wednesday.

Source: Channel NewsAsia, 24 Feb 2010

THE deflation that Singapore experienced in the second half of last year has turned into inflation, but in a mild way.

Last month, the consumer price index – the main measure of inflation here – inched up 0.2 per cent year-on-year, the first increase in eight months.

Compared with the month before, the index went up 0.7 per cent, said the Department of Statistics (DOS) yesterday.

But these increases were smaller than what economists had expected. They also warned against drawing historical comparisons, in the light of recent changes to the way inflation is calculated.

The consumer price index was adjusted this year to use 2009 as its base year for price comparisons, rather than 2004. The index is rebased every five years.

The latest inflation figure is the first to use the new rebased index, which also gives more weight to housing costs.

In fact, housing costs were one of the biggest reasons why prices rose last month over December figures. The costs of transport, education and stationery, health care and food also rose, DOS said.

Barclays economist Leong Wai Ho said that although inflation has been lower than expected, it is likely to increase in the coming months because of higher food prices and electricity tariffs.

Source: Straits Times, 24 Feb 2010

HE SKIPPED town with a purported $6 million in clients’ money, yet the Law Society used relatively minor charges of misconduct as a basis to get lawyer Zulkifli Mohd Amin disbarred.

The move puzzled the Court of Three Judges, the highest disciplinary body in the legal profession, which has powers to suspend or strike wayward lawyers off the rolls.

Justice V.K. Rajah said he was perplexed at why the Law Society had laid some minor charges against Zulkifli.

‘We all know that this is a lawyer who absconded with the second largest amount of money in Singapore’s legal history,’ he said.

But the relatively minor charges Zulkifli faced, added Justice Rajah, did not show the gravity of what he had done.

Chief Justice Chan Sek Keong remarked that the court should not be hearing disciplinary proceedings in stages.

He said that if the court felt the facts of the current case did not warrant Zulkifli being struck off, that means the Law Society would have to come back again with another set of charges.

Chief Justice Chan said there was ’something very wrong’ with the way the Law Society was going about handling the case, describing it as ‘worrying’.

The court adjourned the case to Friday for the Law Society to provide information on what else Zulkifli is said to have done, how much he had absconded with and details of any other pending disciplinary proceedings against him.

When contacted, a Law Society spokesman said the society was unable to comment as the matter is still pending.

Zulkifli, who had practised law since 2000, made headlines when he fled in November 2007, reportedly with $6 million in clients’ funds meant for property deals.

Yesterday, Mr Anthony Lee, counsel for the Law Society, applied to the Court of Three Judges to strike Zulkifli off the rolls over a specific conveyancing transaction.

In the case, he did not swipe any money, but his failure to follow up and keep his clients informed of the progress of the transaction caused them to lose out on a property deal in 2007.

The clients, a married couple, had engaged Zulkifli to act for them in a property purchase. They had issued cheques for the necessary payments and got a bank loan, but Zulkifli neither made the payments to the developer, nor did he draw down from the loan to meet the payments.

He also failed to tell his clients about the numerous notices and reminders for payment.

As a result of not getting the payments, the developer annulled the sale. Last year, a two-man disciplinary tribunal found Zulkifli guilty of misconduct.

He remains at large.

Source: Straits Times, 24 Feb 2010

I READ with interest Monday’s report, “HDB review: Findings out next month”.

I greatly commend the Government’s timely and wise measures to curb speculation in HDB flats. There are clear signs of market exuberance and that could result in a real estate bubble at some unpredictable time.

People now have to pay a new stamp duty of about 3 per cent if they sell their properties within a year of buying them. Plus, financial institutions like banks can now grant housing loans of up to only 80 per cent of a property’s value, compared to 90 per cent previously.

I suggest that flat owners who have sold their homes twice also pay the 3 per cent stamp duty when they make their third sales transaction, even if they had lived in their last flat for more than three years.

Simultaneously, when these flat owners buy another flat from the resale market, they should also pay the 3 per cent stamp duty.

The authorities must also be aware of and take action against unprofessional market practices common among property agents, sellers and buyers. This includes intentional under-declaring of the value of flats for sale. Such actions could further spur market speculation in HDB resale flats.

Teo Kueh Liang

Source: Straits Times, 24 Feb 2010

Real estate investment trusts (Reits) had much to cheer about after Budget measures for the industry were announced on Monday.

This was despite the introduction of an end date for a tax exemption on certain foreign-sourced income.

Reflecting positive sentiments, the FTSE ST Reits Index climbed 1.3 per cent or 7.44 points to 591.84 yesterday – the highest level in almost a month. All but one of the Reits listed in Singapore posted gains.

Reits particularly welcomed the renewal of income tax, stamp duty and GST concessions. They will apply till March 31, 2015.

The benefits – which include a concessionary income tax rate of 10 per cent for non-resident non-individual investors, and stamp duty remission on transferring a Singapore immovable property to a Reit – had expired on Feb 17.

‘We welcome this extension as it removes the uncertainty over the availability of these tax concessions post Feb 17,’ said Mapletree Logistics Trust Management deputy CEO and chief financial officer Richard Lai. ‘We feel that the S-Reit sector is still at a nascent stage and therefore, removal of such concessions today may be premature.’

CapitaCommercial Trust Management CEO Lynette Leong also praised the move, adding that the government’s gesture of support will give investors confidence to stay with Singapore Reits.

In the industry’s good books was another change making it easier for Reits going public to qualify for stamp duty remissions. An unlisted Reit would have six months from the date of completion of sale agreements to get listed and qualify, whereas it only had a month in the past.

The extension would give unlisted Reits and property sellers more time to close deals. A spokesman in Ascendas Reit noted that there there will be ‘greater flexibility for Reits preparing to list’, and the move ‘is positive for the development of the S-Reit market’.

There was however, a third Budget measure which initially raised some eyebrows. Currently, listed Reits and their wholly-owned Singapore subsidiaries enjoy income tax exemption on qualifying foreign-sourced income (FSIE), subject to conditions.

The government on Monday introduced a sunset clause of March 31, 2015 – the qualifying foreign-sourced income has to be remitted on or before this date for FSIE to apply.

Industry reaction to this move was mixed as the termination of FSIE would affect Reits with large foreign-sourced incomes more.

Furthermore, sunset clauses are common for most tax incentives here, said Ernst & Young tax partner Kang Choon Pin. He suggests that the government may simply be aligning the expiry of the FSIE with the end of stamp duty and withholding tax concessions for Reits, such that they all occur in March 2015.

‘We are hopeful that when the FSIE expires in five years’ time, all the concessions will be renewed together,’ he said.

The FSIE is important to Reits growing through foreign acquisitions. ‘If we want to position ourselves as an exchange not only for Singapore Reits, but also pan-Asian Reits, we need the FSIE,’ Mr Kang stressed.

SIAS Research lead analyst Moh Tze Yang believes that the Budget measures for Reits are significant. ‘Reit operators can continue to enjoy the benefits of tax subsidies that have traditionally been a big ’selling point’ of setting up a property investment trust,’ he said.

Source: Straits Times, 24 Feb 2010

UOL Group, whose net profit nearly trebled to $424.2 million, said that the completion of at least five Singapore residential projects this year could translate to gross sales proceeds of about $800 million. The sum will also include progressive recognition on other ongoing residential projects.

Revealing this yesterday, group chief executive Gwee Lian Kheng said that this would enable the group to reduce borrowings and facilitate its acquisition of development sites. This year, the group plans to launch three condominiums in Singapore totalling over 1,000 units.

Two are slated for release in the second quarter – a 616-unit project at Dakota Crescent and a 172-unit development at Toh Tuck Road. A 350-unit condo in the Spottiswoode area could be released in the second half of this year. Over in China, the group hopes to launch the residential component of a mixed development project in Tianjin, along the first ring road fronting Hai He River, by year-end. The project comprises 538 apartments, a 328-room hotel, 17,600 square metres of offices and 9,800 sqm of retail space. The five projects slated for completion this year are One Amber, The Regency at Tiong Bahru, Southbank in the Beach Road area, Duchess Residences and Breeze by the East. Nassim Park Residences may also be finished by year’s end.

UOL’s 188 per cent jump in net profit for the year ended Dec 31, 2009 to $424.2 million from $147.2 million for 2008 was achieved on the back of higher sales of development properties, rentals from investment properties, share of profits of associated companies and negative goodwill of $281.1 million from the acquisition of shares in United Industrial Corporation.

The improved bottom line was despite booking $184.8 million fair value losses on investment properties, including those of associated companies, mostly UIC, but also Marina Centre Holdings. UOL’s own properties that were written down were mostly office space in buildings such as Odeon Towers, Novena Square, United Square and Faber House. In FY2008, fair value losses attributable to equity-holders were at a lower $74 million.

The improvement in share of profit of associated companies was due to UIC becoming a 32 per cent associated company last year, as well as higher contribution from Nassim Park Residences.

Group revenue increased 12 per cent to $1 billion. Meanwhile, UOL’s hotels, resorts and serviced suites arm Pan Pacific Hotels Group (formerly known as Hotel Plaza) saw a 207 per cent jump in full-year net profit to $39.3 million. This was achieved despite a 9 per cent slide in turnover to $287.8 million and an 18 per cent fall in revenue per available room. The improved bottom line was due to the absence of impairment charge (FY2008: $37 million) and an $8.2 million fall in fair value loss adjustments.

Pan Pacific said that the decrease in revenue was due largely to weaker performance from the group’s hotels in Singapore, Australia and Vietnam and partly offset by the inclusion of revenue from hotel management services following the acquisition of Pan Pacific operations in October 2008.

New facilities opening this year include Pan Pacific Nirwana Bali Resort (owned by PT Bali Nirwana Resort) and Parkroyal Serviced Suites Kuala Lumpur (owned by UOL).

Pan Pacific is recommending a first and final dividend of 3.5 cents per share, down from the four-cent dividend previously. UOL shareholders will receive a first and final dividend of 10 cents per share, compared with 7.5 cents in the preceding year.

UOL’s net debt to equity ratio rose from 0.42 time at end-2008 to 0.43 time at end-2009. Its net asset value per share increased from $4.26 to $5.29 over the same period.

On the Singapore government’s measures last Friday to cool the residential property market, UOL’s chief operating officer Liam Wee Sin said: ‘We are not particularly concerned about the measures’ although there could be an immediate knee-jerk reaction.

Source: Business Times, 24 Feb 2010

The first government land sale tender to close after measures were announced last Friday to cool the property market managed to draw some solid bids.

A 99-year leasehold residential site at the junction of Choa Chu Kang and Woodlands roads – which houses Ten Mile Junction – drew a top bid of $164 million or $437 per sq ft per plot ratio (psf ppr).

Far East Organization unit Dollar Land Singapore topped seven rivals with this bid.

Chip Eng Seng’s CEL Development put in the second-highest bid of $148.3 million or $395 psf ppr.

The top two bids are not too far from market predictions in early January, even though the government has just introduced anti-speculation measures – a seller’s stamp duty on residential property bought after Feb 19 and sold within a year, as well as a lower loan-to-value limit of 80 per cent for all private housing loans.

The response to the latest government land tender ’suggests that some developers think the measures will not have a significant impact in the longer term’, said Knight Frank chairman Tan Tiong Cheng.

Going by the tender results, Colliers International research and advisory director Tay Huey Ying said some developers are ‘realistically bullish’ and there is still confidence in the mass-market sector.

Still, consultants point out that competition for land seems to have eased from a few months back. Ms Tay noted that bids for sites in the second half of last year were usually much higher than expected.

Jones Lang LaSalle South-east Asia research head Chua Yang Liang noted that there was just a 10 per cent gap between the top and second bids this time around. The gap can be as large as 20-30 per cent when the market is hot, he said.

Other participants in the tender that closed yesterday included Sim Lian Group and a tie-up between Frasers Centrepoint and NTUC FairPrice Co-operative. The lowest bid came from Soilbuild Group, at $71.2 million or $190 psf ppr.

The 1.56-hectare site is occupied by the three-storey Ten Mile Junction. The first two levels comprise commercial space with a gross floor area (GFA) of 121,191 sq ft, while the third houses an LRT station.

The winning developer will gain control of the commercial component. It can also build a residential development with a GFA of 254,394 sq ft on top of Ten Mile Junction. The residential project could yield some 200 apartments.

Going by consultants’ estimates, the average selling price of the residential units could range from $700-$850 psf.

At the 99-year leasehold Mi Casa nearby, launched last year, three caveats were lodged for transactions at $658-$731 psf in January and February.

Source: Business Times, 24 Feb 2010

WHEELOCK Properties yesterday reported a fourth-quarter net profit of $169.4 million, boosted by a $129.4 million fair-value gain on its investment properties.

That reversed a $63.8 million loss in the same quarter of 2008, when it suffered an impairment loss on investments of $114.7 million.

Gross profit was higher for the October-December quarter, up two-thirds to $48.9 million, from $29.2 million. Revenue increased 24 per cent to just over $90 million, from $72.4 million, due to higher recognition from its Scotts Square development.

The fair-value gains boosted earnings per share to 14.15 cents, from a loss of 5.33 cents in the same quarter of 2008. The company is proposing a first and final dividend of six cents a share, the same as last year.

For the full year, Wheelock reported net profit of $262.3 million, up almost 160 per cent from $100.9 million in 2008. Net fair value changes in investment properties were $127.7 million but the company took a $23.2 million impairment loss on investments.

By contrast, property fair-value gains in 2008 were just shy of $89 million, while there was a $200 million impairment loss to investments. Full-year turnover fell 15 per cent to $386.6 million from $454.6 million.

The company said Scotts Square Retail was revalued from cost to $258 million while Wheelock Place was revalued from $790 million to $794.5 million.

An increase in investment properties of $263 million was mainly due to the reclassification of property under development to investment properties and the increase in fair value of Scotts Square Retail and Wheelock Place.

And an increase in investments of $192 million was mainly due to the increase in market value of the group’s investments in Hotel Properties Limited and SC Global Developments.

Wheelock said that the company will continue to recognise profits from its development projects, Scotts Square, Orchard View and Ardmore II this year. Ardmore II is 100 per cent sold and TOP is expected in the first half of this year. TOP for Orchard View is targeted for the first half of 2010 as well and construction is almost completed, Wheelock said. Scotts Square, meanwhile, is 70 per cent sold and is scheduled for completion next year.

Wheelock’s stock price closed down one cent yesterday to $1.87 a share.

Source: Business Times, 24 Feb 2010

IN A striking sign of how the property sector has rebounded, a site that failed to sell two years ago when it attracted an offer of just $61 million has now received a bid of $164 million in a new tender.

Eight developers placed bids for the suburban plot that can accommodate residential and commercial development.

The top offers for the site at the junction of Choa Chu Kang and Woodlands roads were all in a fairly tight range, with Far East Organization’s Dollar Land Singapore on top with a bid that beat market expectations.

It offered nearly $164 million, or $436.65 per sq ft (psf) of gross floor area, about 10 per cent more than the $148.28 million or $394.80 psf offered by second-placed Chip Eng Seng’s CEL Development.

Sim Lian Land was next with $138.89 million or $369.79 psf.

Other bidders included a joint venture between Frasers Centrepoint and NTUC FairPrice Cooperative, and Soilbuild Group Holdings, which came in last with a bid of just $71.23 million.

CBRE Research had expected bids to range from $135 million to $150 million.

The $164 million bid could reflect a price of $50 million to $70 million for the commercial podium, with the developer possibly selling the apartments for around $700 psf to $800 psf, consultants said.

In April 2008, the site attracted just two bids of $61 million and $45.68 million when its sale tender closed. The bids were rejected as being too low.

The site, to be co-located with the Ten Mile Junction LRT station on the third storey of the podium block, will be near the future Bukit Panjang MRT station, part of the future Downtown Line 2 and due for completion by 2015.

Property consultants said the results showed that demand for land was still fairly strong, particularly coming after the Government’s recent measures to pre-empt a property bubble.

The Government has imposed a duty on sellers who offload property within a year of purchase, and lowered the maximum loan-to-value amount buyers can borrow from 90 per cent to 80 per cent.

Knight Frank chairman Tan Tiong Cheng said: ‘The top three bidders are the more experienced players familiar with the suburban market.

‘Their bids suggest they would think the recent measures would not affect prices in the longer term.’

With fewer sources of private land, developers are chasing government sites as they need to replenish land banks, said Colliers International executive director (investment sales) Ho Eng Joo.

He said the cooling measures will affect the sales market more than developers’ demand for land.

In the short term, some potential buyers will want to wait and see if prices will fall, experts said.

But those who are already planning to buy will likely go ahead.

Ms Christina Sim, Cushman and Wakefield’s director of investment and capital markets, said the one-year timeline for the seller’s duty is relatively short and unlikely to affect the market much.

Still, an analyst who declined to be named said: ‘The latest announcement begs the question – what conditions would qualify as a stable market? If transactions are above 1,000 units a month, that’s probably a warning sign.’

Source: Straits Times, 24 Feb 2010

UNITED Industrial Corporation (UIC) has won in-principle approval from the Urban Redevelopment Authority to convert its UIC Building in Shenton Way into a mainly residential development.

But no firm decision has been made on the building’s fate.

The UIC board is assessing all alternatives to ensure the best use for the property, according to UOL group chief executive Gwee Lian Kheng.

He disclosed this yesterday as the property group announced a near tripling in full-year profits to $424.2 million in the 12 months ended Dec 31.

The sharp jump was predominantly attributable to UIC having become a 32 per cent associated company of UOL.

Net profits included a negative goodwill sum of $281.1 million from the acquisition of shares in UIC.

Earnings from associated company Nassim Park Residences also contributed to the surge in profits.

UOL posted a record-breaking year in revenues, which rose 12 per cent from $899 million to just over the $1 billion mark.

‘Our strategy of tapping the demand of mass- and mid-market housing segments was well timed,’ said Mr Gwee.

‘This has helped us reach a major milestone of becoming a billion-dollar company by turnover.’

Strong sales from the group’s Double Bay Residences and Meadows@Peirce contributed to the revenue rise.

The group’s property development arm represented 53 per cent of revenue.

Higher average rental rates brought about a 12 per cent rise in revenue from investment properties to $141.7 million.

Revenue from hotel operations declined 13 per cent to $294.5 million as revenue per available room fell amid a slowdown in tourism, the group’s statement said.

Pan Pacific Hotels Group, the group’s listed hotel subsidiary, saw revenue fall by 9 per cent due to weaker performance in the group’s hotels.

Mr Gwee said the ‘difficult period for the hotel industry may be over’ and that efforts would be made to ’secure more hotel management contracts, thus increasing fee-based income’.

The developer remains focused on Singapore’s resilient mass and mid-tier to high-end residential market.

A total of 1,138 residential units are in the pipeline this year. Developments at its Dakota Crescent and Toh Tuck Road sites are expected to be launched by the second quarter of this year. A total of 616 and 172 units respectively are estimated to be made available at these sites.

In the second half of the year, the group will launch a development in the Spottiswoode area, where it had purchased Spottiswoode Apartment and Oakswood Heights in 2007, releasing about 350 units.

Overseas, another 1,014 units are in the pipeline – 520 in a mixed development in Tianjin, China, and another 494 units in a development located in Kuala Lumpur.

Full-year earnings per share were 53.7 cents, up from 18.5 cents the year before.

Net asset value per share as of Dec 31 stood at $5.29, up from $4.26 previously. A final dividend of 10 cents per share has been proposed.

UOL shares closed 11 cents higher at $4 yesterday before the results were announced.

Source: Straits Times, 24 Feb 2010