Five parties said to have tendered for job of marketing Jurong East building

JTC Corporation is seeking to lease out about 95,000 square feet of offices at its headquarters building near Jurong East MRT Station. It recently conducted a tender exercise to appoint a sole marketing agent to help it find tenants for the building.

The space to be leased represents about 21 per cent of the building’s total 447,778 sq ft net lettable area.

BT understands that JTC itself occupies about 10 floors in the 32-storey building; the rest of the building’s occupied space is leased to other tenants.

The 95,000 sq ft of offices is believed to be from expiry of tenancies and JTC intensifying its space usage by reducing space per head and regrouping its staff according to industry clusters. The statutory board has been at JTC Summit for a decade.

‘As part of JTC’s process for leasing space, JTC called a tender on Jan 29, 2010 for the appointment of a sole marketing agent to undertake the leasing of JTC Summit’s office space, for a period of one year,’ a JTC spokeswoman told BT.

The tender closed on Feb 12. JTC is evaluating the proposals, and the results should be available by next month, she added.

Five parties are said to have tendered for the job – CB Richard Ellis, DTZ Debenham Tie Leung (SEA), Savills (Singapore), United Premas and Advanz International.

BT understands that some of the space to be leased at JTC Summit covers entire floors – such as the 27th and 28th levels.

According to its website, JTC is seeking a flat rent of $44 per square metre a month (or $4.09 per square foot a month) for space on Levels 1 to 30.

Industry observers point to limited supply of office space in the western part of Singapore, although there is business park space.

BT understands that landlords of newer office blocks in Tampines are seeking monthly rentals of $4-5 psf.

According to JTC’s tender documents for appointing a JTC Summit marketing agent, the commission rate will be one month’s gross rental for areas up to 5,000 square metres or 1.25 months gross rentals for areas above 5,000 square metres.

Tenderers’ marketing proposals will be evaluated on their marketing strategies and concept, as well as track records on similar projects and manpower commitment.

Source: Business Times, 9 Mar 2010

I REFER to Sunday’s report, ‘Property agents call for curbs on subletting’. It was mentioned that the new measures taken by the Government to reduce speculation may not be sufficient to keep prices of resale flats in check, since prices may still be driven up by those who keep flats to rent out rather than to occupy.

I believe a simple solution is to limit the number of HDB owners who can rent out their flats.

Some HDB owners may be compelled to rent out their flats because they have no other source of income or because they face financial difficulty. It would not be wise for the Government to restrict this group of owners who need the rental income to sustain themselves in the face of financial difficulty.

Nonetheless, HDB should not condone owners who view their HDB flats solely as a form of investment.

The Government should impose restrictions by not allowing owners whose income exceeds a certain limit or own private property to rent out their HDB flats.

This policy takes into account the predicament of owners who are genuinely in need of rental income and underlines the principle that flats are primarily intended to provide shelter.

Javern Sim

Source: Straits Times, 9 Mar 2010

I REFER to last Wednesday’s letter by the Ministry of Law, ‘Allowing one owner to stop majority untenable’, in response to Mr Tan Keng Ann’s letter, ‘Review law on en bloc sales’ (Feb 27).

In the same manner, it is also untenable that 90 per cent of owners of property developments less than 10 years old, and 80 per cent for developments at least 10 years old, can decide to sell such properties collectively.

This is because it is wasteful of resources to demolish buildings by using the ‘less than 10 years’ or ‘at least 10 years’ benchmarks.

Therefore I suggest the Government review the law on collective sales and restrict the age of such properties to at least 40 years old.

Not only is it less wasteful but also the building’s owners can at least enjoy a lifetime there, even if the collective sale is eventually successful.

Tony Lee

Source: Straits Times, 9 Mar 2010

ALJUNIED and Jurong town councils will raise their monthly service and conservancy (S&C) charges from April for the first time in five years.

They have cited higher maintenance and operating costs – particularly for the numerous new lifts in the older estates – as reasons for the hike.

Charges will go up by between 50 cents and $4.50 for Singapore homeowners, depending on the type of flat.

This will raise the charges to between $19.50 for a one-room flat in Jurong and $109.50 for an HUDC apartment in Aljunied each month.

The increase for permanent residents and foreigners will be between $2.80 and $7.50. They already pay more in fees than Singaporeans, providing a larger baseline for the increase. Aljunied Town Council, for example, will raise fees by between 5.5 and 7per cent.

The changes are expected to affect about 50,000 households in Aljunied and 53,500 households in Jurong.

Rates will also go up for shops, offices and market stalls in the estates.

While Jurong did not give details, Aljunied said its shops will now have to pay $1.83 per sq m, up from $1.66 per sq m. Market and hawker stalls have to pay between $6.27 and $21.65 more.

Checks on the websites of the 14 other town councils, all of which charge different S&C fees, showed no one else is raising them.

MPs for both Aljunied and Jurong GRCs said they were older estates which, because of the Lift Upgrading Programme, have an influx of new lifts, all of which need to be maintained.

In circulars sent out to residents and lessees of shops, offices and hawker stalls, both town councils said the hikes were to pay for higher electricity tariffs and cleaning expenses, in addition to the upkeep of new lifts.

Though tariffs have fluctuated, they have risen by 38.4 per cent between October 2004 and January this year, they said.

Jurong noted that electricity charges formed 30 per cent of its overall operating costs and would increase with ‘the installation of more lifts, linkways and amenities within the town’.

But it is lift maintenance which takes up the biggest chunk of funds, said MPs for both town councils.

In Aljunied GRC, 1,109 blocks are now equipped with lifts stopping at every level, up from 884 in 2005. In Jurong, the figure is now 1,139, up from 1,002 in 2005.

On its website, Aljunied Town Council said it was ‘no longer sustainable’ to maintain charges at the current level without running into an operating deficit. Keeping the current charges would mean deteriorating standards over time, which would only raise costs further.

MP for Aljunied GRC Cynthia Phua said that while Singapore was emerging from a recession, she was mindful there was ‘no good time’ for a fee hike.

She told The Straits Times that the town council had wanted to increase the fees as early as February 2008, but held back as high inflation rates were adding to residents’ burdens. Finance Minister Tharman Shanmugaratnam had called on town councils then to freeze their fees but left it to them to make the call.

Then the recession hit last year, and the town council had to absorb the costs.

‘We are playing catch-up with costs now, and we also have to set aside money for future costs,’ she said.

On their websites, both town councils said the increases were not tied to losses made in investments linked to the failed Lehman Brothers investment bank.

In 2008, town council investments came under the spotlight when it was revealed in Parliament that several had sunk a total of $16 million into such products. Jurong was not one of them, but Aljunied had some exposure.

On their websites, both town councils claimed to have made money from their investments.

Both MPs also said that the town councils would help residents who might find the fee hike difficult to afford.

‘We can consider their case, and help will be provided to them,’ said Madam Halimah Yacob for Jurong GRC.

Aljunied also said in its FAQs that it does not expect S&C fee arrears to rise.

Source: Straits Times, 9 Mar 2010

SHOULD the Government do something about ‘Mickey Mouse-size’ apartments that are all the rage now?

No, said National Development Minister Mah Bow Tan yesterday, reiterating that market forces should continue to determine the prices and sizes of homes that will be developed.

He was responding to concerns raised by Dr Amy Khor (Hong Kah GRC) about the proliferation of such small units in Singapore.

‘Profit-maximising developers want to push per square foot (psf) prices of every unit up,’ she noted.

‘The way to do so without hurting sales is to reduce unit sizes to make them more affordable on a lump sum basis.’

She also warned that such high psf prices could influence buyers in the highly sentiment-driven market and give the perception that property prices are experiencing steep price rises.

She gave the example of Siglap V, a new development comprising small units in the east, where headline prices hit $1,634 psf recently.

There is no market data on the number of these small apartments, but some projects such as Suites@Guillemard have offered units as small as 258 sq ft.

In response, Mr Mah said that ‘beyond ensuring market stability, we should let market forces determine prices and the type of unit sizes that will be developed’.

But he agreed that headline prices of these units ‘are indeed misleading’, and suggested that ‘we do more to educate consumers not to take such headlines at face value’.

Source: Straits Times, 9 Mar 2010

IN ITS urban planning blueprints, the Ministry for National Development (MND) won’t miss the forest for the trees. Instead, it takes a well-rounded approach when drawing up its development concept plans, taking into account existing infrastructure and consulting MPs and other agencies.

This was National Development Minister Mah Bow Tan’s assurance to the House yesterday. ‘When we do make changes, they will be taken as a whole. It’s not just development for its own sake,’ he said.

‘On an overall basis, the whole planning process takes into account the whole gamut of requirements, ranging from housing, to roads, to schools, to nature areas, even right down to things like markets, places of worship and so on.’

Earlier, Mr Lim Biow Chuan (Marine Parade GRC) had asked about the Government’s planning methods. Were new projects drawn up in isolation, or was the total ‘ecosystem’ of the area taken into account?

He was particularly concerned about the growing density of the Amber and Katong areas. After the Urban Redevelopment Authority (URA) approved the construction of new residences in the area, a clutch of condominiums had sprung up. With more such estates on the way, traffic congestion, overcrowding and rising social pressure are becoming a definite possibility, Mr Lim said.

Mr Mah said the URA’s integrated approach to planning would mitigate such problems. In fact, the development of the Amber and Katong districts was precisely an example of such consultation bearing fruit.

‘The master plan takes into account what the increased density in the area means for traffic congestion and discussions were held with the relevant agencies, such as the Land Transport Authority.’

This helped the URA pre-empt overcrowding, he explained. The MRT network will be extended into the area and the Marina Coastal Expressway will take pressure off the existing East Coast Parkway.

‘I think this is one of the strengths of the Singapore planning system: That when we plan, we plan it on a holistic level, taking everything into consideration,’ he said.

Source: Straits Times, 9 Mar 2010

THE on-again, off-again redevelopment of the prime Specialists’ Shopping Centre and Hotel Phoenix site in Orchard Road is back on the agenda after a two-year break.

OCBC Bank announced yesterday that it is in talks with construction and property group United Engineers Limited (UEL) to build a hotel and mall on the land.

But the original player lined up for the project – the Straits Trading Company – is out. It had announced in January 2008 that it was in ‘advanced negotiations’ with OCBC about redeveloping the land.

OCBC’s group corporate communications head, Ms Koh Ching Ching, told The Straits Times yesterday that negotiations with Straits Trading were discontinued after the last announcement in 2008.

‘We subsequently received indications of interest from other potential parties and we decided to enter into discussions with United Engineers,’ she added.

The original proposal called for a 21-storey complex with shops and a 580-room hotel with construction slated to begin in the second half of 2008. It was to be linked to the nearby Orchard Central and 313@Somerset malls.

Straits Trading, a holding company with businesses ranging from smelting and mining to hotel investment and property development, was the target of a bidding war in 2008.

The Tecity Group eventually succeeded in taking over Straits Trading.

It also holds 12 per cent of UEL’s shares after Straits Trading transferred its entire stake to the parent company in May last year.

Tecity is controlled by the family of the late Tan Chin Tuan, a past chairman of OCBC. Dr Tan set up Tecity, which had held a stake in Straits Trading since the 1950s.

Dr Tan also started the old 392-room Hotel Phoenix, which closed in August 2007 after 35 years. It has since been demolished.

OCBC said the site is one of its long-term investments.

It added yesterday: ‘Proposed arrangements will enable OCBC Bank to rely on UEL’s financial resources and expertise to complete the proposed redevelopment and construction project.’

The terms of the arrangements are still being negotiated so another announcement will be made if a deal is struck, OCBC said.

Mainboard-listed United Engineers reported a net profit of $52.2 million for last year, a significant jump from $6 million in 2008.

Its projects include residential developments such as The Rochester@One North in Buona Vista and Park Central@AMK in Ang Mo Kio.

Source: Straits Times, 9 Mar 2010

THE noise from construction projects has long been the bane of residents hoping to sleep in on Sundays.

But there is hope for some peace soon.

From Sept 1, all new projects will have to stop work from 10pm on Saturday to 10am on Sunday.

This ban applies to any building project within 150m of a residential area. It also applies to the eve of public holidays and public holidays.

The duration of the ban will be further extended next year, with the stop-work rule stretching from 10pm on Saturday till Monday morning.

It will start from Sept 1 next year and apply to new projects that begin work then.

These measures, announced by Minister for the Environment and Water Resources Yaacob Ibrahim in Parliament yesterday, were greeted with equanimity by contractors.

Mr Andrew Khng, president of the Singapore Contractors Association, told The Straits Times: ‘I don’t think it’s a huge burden. Contractors and workers also need time at the weekend to rest.

‘We will probably work harder during weekdays.’

Currently, contractors can bang away on Sundays as long as the noise level from 7am to 7pm stays under 75 decibels, which is close to the sound of a car travelling on a road.

After 7pm, the noise level has to go down to 65 decibels till 10pm, when all work must stop.

But, said MP Hri Kumar Nair, ‘there will be instances where the work will from time to time exceed the limit but not break the regulations because it is sustained’.

Added the Bishan-Toa Payoh GRC MP: ‘This is of little comfort to those who have had their rest disturbed.’

Dr Yaacob admitted as much when he disclosed that 12,000 complaints were received last year. That is around 33 a day.

It was worse in 2008, when the National Environment Agency (NEA) received 14,000 complaints, up from 9,000 in 2007 and 6,000 in 2006.

MP Lim Biow Chuan (Marine Parade GRC) noted that construction noise in the middle of the night seems louder, as there is no other background noise to drown it out.

The NEA estimates that the new measures will raise construction costs by 2 to 2.5 per cent, and projects will take 10 to 17 per cent longer to finish.

While residents interviewed welcomed the move, they felt more could be done.

Mr David Seah, 54, whose Farrer Road home is a stone’s throw from the construction site of a Circle Line MRT station, suggested that the Government plant more trees and shrubs in his estate to act as a sound buffer.

Mr Seah, who works the evening shift in the food business, said: ‘They should consider people who do shift work.’

To reduce noise from cars and other vehicles, the NEA will introduce standards to match those of Japan and the European Union.

These will take effect from Oct 1 this year.

Source: Straits Times, 9 Mar 2010

THE Government will not introduce more measures relating to the property market for now, but will monitor the market closely, said National Development Minister Mah Bow Tan yesterday.

This follows a string of measures aimed at cooling both the private and HDB property markets unveiled by the Government in the past two months.

But Mr Mah said that to address land supply concerns – and to increase flexibility – the Government is tweaking one of the methods used to release new land sites, and will make more land available to developers.

He announced the move in Parliament during the Committee of Supply debate, as he fielded questions from several MPs on the health of the real estate sector.

Dr Amy Khor, MP for Hong Kah GRC, said complaints aired by buyers in recent months – on rising property prices and project sellouts – are ’symptomatic of short-term dislocations between the housing market and the overall economy’.

‘If overall economic growth and property prices continue to diverge for a prolonged period, we run the risk of blowing a real estate bubble,’ she said.

Mr Mah said the Government had acted quickly to pre-empt such a scenario by introducing measures to cool the market.

Last month it said a property buyer now has to pay extra stamp duty if he sells a property within a year. The proportion of the valuation price that buyers can borrow for home loans has also been cut.

Last September, the Government stopped allowing developers to absorb interest payments for homes under construction to deter speculative purchases.

When asked what other measures the Government would adopt to pre-empt runaway prices, Mr Mah said there would be no more measures for now. ‘If there are signs that the market will overheat again, we are ready to introduce additional measures to stabilise the market.’

His comments are likely to come as a relief to an industry absorbing a slew of recent market-cooling measures.

Mr Mah recently also introduced new rules for the Housing Board (HDB) resale market: Buyers of non-subsidised HDB resale flats must now occupy their flats for at least three years before they can sell – up from 2.5 years or one year previously, depending on the financing.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak said Mr Mah’s assurance would give the market a breather to digest recent measures and see the impact.

Real Estate Developers’ Association of Singapore (Redas) chief executive Steven Choo noted, however, that the Government’s approach has not changed as it is still monitoring the market.

MP for Sembawang GRC Lim Wee Kiak asked what form future measures might take. Mr Mah replied: ‘If I tell you, then there’s no point having those other measures in place in our pockets.’

He also said the Government would ensure there was an adequate supply of land to support economic growth.

The Government is tweaking the Urban Redevelopment Authority’s reserve site system in which sites are put out to tender if sufficient interest is shown.

With immediate effect, the deposit to be lodged by developers who trigger tenders under the reserve list will be cut from 5 per cent to 3 per cent of the minimum price, capped at $5 million.

The reserve list system offers sites on top of those on the confirmed list, which are tendered according to a set schedule.

The reduced deposit will help lower upfront costs and the cashflow burdens of developers, URA said.

Mr Mah also said the Government would consider releasing a reserve list site for sale immediately if more than one bidder submitted a price close to the Government’s reserve price.

Previously, a site was released for sale only if a developer’s submitted bid matched or exceeded the reserve price.

The Government will also offer a larger supply and wider variety of sites in the reserve list in the second half of the year to give developers more choice.

Details will be announced by June.

Industry observers said the tweaks could further cool the booming property market.

Mr Colin Tan, director of property consultancy Chesterton International, suggested however that the Government consider selling two or three sites at the same time to temper developers’ bids – which have been aggressive in recent months as competition for land heats up as they seek to replenish their land banks.

Source: Straits Times, 9 Mar 2010

IT IS full steam ahead for Singapore’s new growth areas such as Jurong and Paya Lebar as the Government ramps up plans to develop the Republic’s alternative city centres.

National Development Minister Mah Bow Tan yesterday said several government agencies, including the Ministry of National Development (MND) and some of its statutory boards, will relocate to Jurong Gateway by 2015.

The development of new growth areas such as Jurong Gateway, Paya Lebar Central and Kallang Riverside was first announced in the Urban Redevelopment Authority’s (URA) draft Masterplan 2008.

‘Despite the downturn, we pressed on with infrastructure works and more sites at these areas will be progressively released for development from this year onwards,’ said Mr Mah in Parliament.

‘Together with Grade A office space in the CBD, they will offer commercial firms more choices in business locations,’ he said.

The Agri-Food and Veterinary Authority, the Building and Construction Authority – along with the Ministry of the Environment and Water Resources and its statutory boards – are planning to move to Jurong by 2015, said Mr Mah.

The Singapore Workforce Development Agency will move to Paya Lebar Central, while its new Continuing Education and Training Campus, due for completion by 2013, will also be located there.

Mr Mah said the relocations will free up prime office space in the city to meet private sector demand: ‘By 2015, the current supply of about one million sq m of office space in the pipeline should have been taken up. The relocation… will help to free up more space for the private sector.’

Responding to questions raised by MPs such as Mr Teo Ser Luck (Pasir Ris-Punggol GRC) and Ms Jessica Tan (East Coast GRC) on land constraints on growth, Mr Mah said MND and URA have embarked on the Concept Plan 2011 which will chart Singapore’s land use strategies over the next 40 to 50 years.

‘Under the review, we will develop strategies to increase land productivity to support future growth,’ he said.

Mr Mah also noted that as a key city in growing Asia, Singapore will naturally see foreign interest in private residential properties here. But he said Singapore residents still account for nearly 90 per cent of all private housing transactions last year.

He was responding to Mr Liang Eng Hwa (Holland-Bukit Timah GRC), who asked about foreign buyers and steps to pre-empt a collective sale fever.

Mr Mah said the Ministry of Law has been reviewing existing en-bloc sale regulations, and has been taking feedback and suggestions from members of the public. Any changes to collective sale rules will be announced by the ministry in due course.

Source: Straits Times, 9 Mar 2010