CapitaLand, which has Chinese properties valued at more than US$14 billion ($19.6 billion), said demand in China is “strong” and the real-estate boom can’t be called a bubble.

Still, the Singapore-based developer said it was “comforting” that the Chinese government is taking steps to rein in the market, according to a CapitaLand presentation filed to the Singapore Exchange today. CapitaLand, Southeast Asia’s biggest developer, has said it plans to expand its China business to 45% of its operations within 5 years.

China’s property prices rose at the fastest pace in almost two years in February, adding urgency to the government’s efforts to damp speculation and increase the amount of affordable housing. Residential and commercial real-estate prices in 70 cities climbed 10.7% from a year earlier, the statistics bureau said on its website yesterday, topping a gain of 9.5% in January.

To cool speculation, China is requiring a down payment for land purchases equal to 50% of a plot’s price, the Ministry of Land and Resources said on its website late yesterday. The government in January also re-imposed a tax on homes sold within five years of their purchase, after having cut the taxable period to two years in January 2009 to bolster a then-flagging market.

Bank of China, the nation’s third-largest lender by market value, said Feb. 3 that it had reduced discounts for some mortgages, citing concern about rising property-market risks.

Source: The Edge, 11 Mar 2010

Once seen as a poor cousin to the prime East Coast area, the West Coast is gaining in popularity, with transformation of the entire western region underway.

There are one-north, with Biopolis, its biomedical research cluster, and Fusionopolis, its infocomm and media cluster; wellknown tertiary institutions like the National University of Singapore (NUS) and INSEAD; parkland and green lungs like West Coast Park and Hort Park nearby; and the Clementi MRT station and the Ayer Raja Expressway, which are also located nearby.

ClementiWoods condominium, located along the quiet West Coast Road neighbourhood near NUS, has been enjoying an uptrend in the prices of units since last June. A high of $974 psf was achieved when a 560 sq ft unit was sold for $545,000 last November, surpassing the peak of $819 psf in 2007. The 240-unit condominium, developed by Frasers Centrepoint Homes, is due to receive its temporary occupation permit (TOP) in 1H2010.

For the period of Feb 4 to 12, there were three transactions at ClementiWoods in the price range of $836 to $870 psf, according to caveats lodged with URA Realis.

The owners, who had purchased the units at the launch in 2007, made significant gains. On Feb 11, a 1,130 sq ft unit on the fifth floor was sold for $950,000, or $841 psf, netting a 55% gain for the original owner, who bought
the unit for $612,000, or $541 psf. On the second floor, two units changed hands. A 1,076 sq ft unit was sold for $900,000, or $836 psf. The previous owner had purchased it for $592,000, reaping a gain of 52%. The other sale was for a larger 1,388 sq ft unit, which fetched $1.2 million, or $870 psf, translating into a gain of 45%.

Adjacent to ClementiWoods is the 530- unit Varsity Park condominium developed by CapitaLand and completed in 2008. On Feb 11, a 1,991 sq ft unit on the fifth floor was sold for $1.6 million, or $828 psf — a 106% gain for the previous owner, who had purchased the unit a year after it was launched in 2005 for $800,320, or $402 psf.

In the Buona Vista area, there has been strong interest in One-North Residences, located within a 200ha development funded by the government for growing the biomedical, infocomm and digital media industries. Prices of the 405-unit condominium, which received TOP last year, have seen strong support at the $1,000 psf level since last July. They hit a high of $1,280 psf last October when a 570 sq ft unit on the fourth floor was sold for $730,000.

For the period of Feb 4 to 12, two units were sold. It was the second time both units changed hands since the launch of the project in 2007 by the consortium of developers — Kheng Leong, United Overseas Land, and Low Keng Huat. A 592 sq ft unit on the fifth floor was sold for $735,000, or $1,242 psf, and prior to this sale, it had changed hands for $645,000 or, $1,089 psf, last August. In 2007, it was sold for $518,914, or $877 psf.

A 1,420 sq ft unit on the 10th floor was sold for $1.5 million, or $1,056 psf. The original buyer had purchased the unit for $1.36 million or $957 psf, in June 2007. Before this, it had been sold for $1.15 million, or $814 psf.

Property agents say interest in the West Coast area has also spiked in the run-up to the private preview of Cheung Kong (Holdings)’s The Vision, its highend condominium on West Coast Crescent that is expected to be priced above $1,000 psf.

Source: The Edge, 11 Mar 2010

The executive condominium site at Yishun Avenue 11 has attracted 10 bids.

MCC Land Singapore put in the top bid of $127.8m for the 99-year leasehold plot. This translates into S$281 per square foot per plot ratio.

The second highest bid came from Qingjian Realty, at S$118.8m, followed by Maxdin Pte Ltd which placed a bid of S$117m. The remaining offers range between S$46.8m and S$116m.

Real estate consultancy firm CB Richard Ellis says the tender results show that developers in Singapore are keen to acquire land for mass market housing.

An earlier tender for an EC site at Compassvale Bow had attracted 11 bids.

CBRE also noted that developers may have been more confident, following the success of The Estuary project which was launched recently at Yishun Avenue 1.

CBRE said the top bid of $127.8m for the latest EC site will work out to a breakeven price of S$520 psf.

Source: Channel News Asia, 11 Mar 2010

Grand Park Orchard – formerly known as Park Hotel Orchard – will be opening its doors in July after an $80 million makeover.

The five-star 308-room hotel at Orchard Road is Park Hotel Group’s flagship property. Room rates are expected to be around $350 per night.

Grand Park Orchard will bring more sparkle to the shopping belt with an eight-storey-tall media wall. It will also add to food and beverage establishments in the area, with all-day restaurant Open House serving pizzas, dim sum, sandwiches, claypot dishes and roast meat; the Champagne Bar serving Veuve Clicquot cocktails; and the Onyx Bar.

Shoppers can also look forward to the opening of Grand Park Orchard’s four-storey retail podium, Knightsbridge.

Park Hotel Group has positioned Knightsbridge as a space for luxury brands, and it will soon reveal the names taking residence.

It said that it has secured pre-commitments for more than 50 per cent of the space so far.

Park Hotel Group director Allen Law said that Grand Park Orchard ‘represents the aspirations of the group as we scale the heights to be the leading hospitality chain in the Asia-Pacific’.

The hotel owner, developer and manager has eight properties across three countries. These include Park Hotel Clarke Quay and Grand Park City Hall in Singapore.

Source: Business Times, 11 Mar 2010

CHEUNG Kong has set its sights on building the tallest – and perhaps priciest – condominium project in the West Coast area.

The Hong Kong developer will launch The Vision at West Coast Crescent this weekend. It plans to release no more than 100 units at the 99-year leasehold project, and the average asking price will range from $1,000-$1,200 per sq ft (psf).

The Vision comprises 281 apartments and 14 strata terrace units. The apartments will be housed in two towers – one with 33 levels and the other with 32. The project will be the tallest residential development in the area, said Cheung Kong sales manager Cannas Ho yesterday.

It will have two-, three- and four-bedroom units ranging from 818-1,604 sq ft. There will also be two penthouses. Going by the average asking price cited, a four-bedder could cost about $1.9 million.

The target psf price tag for units at The Vision looks high compared with those at developments nearby. Just next door is the 99-year leasehold Blue Horizon, which was launched around 2001. Units there went for $764-$808 psf last month, as caveats lodged show.

Homes at ClementiWoods Condominium in the vicinity changed hands at $836-$957 psf last month. It has a 99-year lease and entered the market in 2007.

But Cheung Kong is marketing The Vision as a high-end project in the West Coast area – and that probably shows in the asking prices.

According to the developer, the construction cost is ‘high due to the quality finishes and high-end fittings used’.

For instance, Cheung Kong says it will cost about three times more to build a bathroom in The Vision than in a typical condominium.

The developer says it is confident there will be demand because of several factors. For one thing, the site is across the road from West Coast Park, and about 70 per cent of units will enjoy unblocked sea views.

The area is also popular with expatriates. And this is a group which The Vision is targeting, besides Singaporeans.

Ms Ho expects owner-occupiers to make up the majority of buyers, and says there have been plenty of enquiries. BT understands agents have collected cheques from potential buyers.

Chesterton Suntec International research and consultancy director Colin Tan reckons The Vision’s target pricing could be ‘a bit strong’ for owner-occupiers. Investors would not mind paying, if they believe property prices will continue rising, but they tend to be more interested in one- bedroom units, he said.

‘If the launch is successful, it will set the benchmark’ for developments in the West Coast area, he said.

Elsewhere, more property launches are on their way. Agents are gathering interest for Ho Bee’s Seascape and City Developments’ The Residences at W, both at Sentosa Cove.

Sources say Seascape could be launched towards the end of the month, at asking prices of $2,700-$3,000 psf.

Agents are also advertising for Hong Leong Group’s 76 Shenton Way, said to comprise mostly one and two-bedders. BT understands it could be previewed at month-end, and agents are quoting prices above $2,000 psf.

Source: Business Times, 11 Mar 2010

Property developer CapitaLand said the present property boom in China cannot be labelled as a bubble. It is of the view that current market conditions are driven mainly by physical demand.

While it notes there is some degree of speculative demand in the Tier 1 cities, CapitaLand said there is no subprime danger in China, unlike in the US.

It added that it is comforting to note that the Chinese government is taking steps to rein in the market.

CapitaLand is of the view that the rapid urbanization and huge demand for housing will continue to underpin the Chinese market for a long time to come.

For the Singapore residential market, the firm said there is a balanced demand and supply situation. It noted that the recent cooling measures introduced by the government are to ensure stable and sustainable property market, and discourage speculation.

CapitaLand said it will continue to acquire new sites here. It made the comments in a presentation at the Daiwa investment conference in Tokyo on Thursday.

Source: Channel News Asia, 11 Mar 2010

The government has accepted an application from a developer to put up an industrial site at Woodlands Avenue 12 for public tender.

The Urban Redevelopment Authority (URA) said it has received an application from a developer who has committed to bid a price of not less than S$25 million for the land parcel.

The land parcel has a site area of about 3.2 hectares and a maximum gross plot ratio of 2.5. It can be developed for a variety of uses under “Business 1″ zoning and has a lease period of 60 years.

URA will launch the public tender for the site in about four weeks.

The land parcel was made available for sale through the Reserve List System.

Under the system, the government will put up a Reserve List Site for public tender if it receives an application from a developer who commits to bid at or above an acceptable minimum price.

Source: Channel News Asia, 11 Mar 2010

About half a million square feet of office space in the core business district and fringe areas could become available when government bodies move out of Singapore’s city centre by 2015.

Experts said that with occupancy in the CBD bouncing back after the downturn, the space will be sorely needed.

Government agencies such as the Ministry of National Development will be moving out of their premises in the CBD by 2015.

And when that happens, they could be leaving behind as much as half a million square feet of real estate space.

While this could present an opportunity for market players and tenants to pick up a bargain, experts said full redevelopment will be needed, for these properties to reach full commercial potential.

Chris Archibold, regional director, Head of Markets, Jones Lang LaSalle, said: “It’s going to be a land sale and a total redevelopment. That’s probably the most likely scenario. A top up of the land lease so that they’re a 99 year lease, then a sale to the private sector so the buildings can be redeveloped to international standards and specifications.

“I think releasing a number of those buildings in their existing condition, the older ones, is not necessarily a good thing.”

The government bodies that are slated to move include the Ministry of National Development, the Agri-Food and Veterinary Authority, the Building and Construction Authority and the Ministry of the Environment and Water Resources.

Office occupancy rates within the CBD have hit 93 per cent in recent months, their highest levels in a year.

And property-watchers said the additional space left vacant by the government agencies will help to relieve growing pressure on demand for prime office space.

They expect supply to be tight, even with additional space at the Marina Bay Financial Centre.

Donald Han, managing director, Cushman & Wakefield, said: “There will be a scenario of supply overhang that flows into the year but the scenario is that landlords are becoming more confident of the market.

They’re no longer dropping rentals as fast as they did 12 months ago. On top of that, if you look at the economic prospects, a lot of tenants are looking into an expansionary process, looking to increase head count.”

And with little new space in the pipeline after 2013 in both the fringe and non-core CBD areas, experts said the government’s plan to move out within three to five years is timely because it gives developers additional time to figure out what to do with the area once it becomes available.

Source: Channel News Asia, 11 Mar 2010

There’s pent-up demand for half a million homes in the sector, says BPTP

BPTP Ltd, an Indian developer backed by Citigroup Inc and JPMorgan Chase & Co, aims to tap demand for housing from India’s middle class, managing director Kabul Chawla said here yesterday.

The nation has a pent-up demand for half a million homes in the mid-tier segment, where houses cost two million rupees (S$61,584) to six million rupees each, Mr Chawla, 37, said in an interview yesterday. That’s likely to widen by up to 100,000 homes each year, he forecast.

‘The mid-segment space is a great story and many developers are now moving there,’ said Mr Chawla. ‘We’ll get volumes from this robust segment.’ The New Delhi-based developer has sold 18,000 homes over the past five years in the middle tier, Mr Chawla said. He declined to provide any forecasts for BPTP’s sales ahead of the company’s proposed 15 billion rupees initial public offering. BPTP, which mostly develops property in the National Capital Region around New Delhi, plans to use funds from the IPO for new projects and to pay debt.

The company is awaiting approval from India’s capital markets regulator for the share sale, he said.

Source: Business Times, 11 Mar 2010

Biggest jump in 8 years comes after banks had forecast a 3% increase

Australian home loans fell the most in nearly eight years in January, hit by the scaling back of government grants to buyers and higher mortgage rates, suggesting past increases in interest rates were starting to bite.

The 7.9 per cent drop in mortgage commitments in January came as a complete surprise to analysts who had forecast a 2.0 per cent rise and broke a string of upbeat economic news, briefly knocking the Australian dollar lower.

It also contrasted markedly with a survey of consumers for March that showed confidence remained at very high levels even after the Reserve Bank of Australia (RBA) last week lifted its cash rate for the fourth time in five meetings.

Indeed, the scale of the fall in home loans went against what the banks themselves had experienced, and they hold around 90 per cent of the mortgage market. The top four banks had forecast a rise of 3 per cent in housing finance.

‘This is a very strange outcome,’ said Michael Workman at Commonwealth Bank. ‘It goes against what we and the other major banks had seen in our own numbers and against other indicators like housing credit.’

It would also have come as a surprise to the central bank which has been resolutely upbeat on the domestic economy.

Earlier yesterday, RBA assistant governor Philip Lowe predicted the economy would grow at, or above, average for the next couple of years and so support a strong labour market. His concerns about housing were that the country was not building enough new homes to meet the demands of a rapidly growing population, thus pushing prices higher.

Home prices have been rising steadily for months and one closely watched measure hit record highs in January.

The Australian dollar took a knock after the mortgage figures but bounced back to trade higher on the day on the view house prices would stay firm as housing supply struggles to keep up with demand from a fast-growing population.

After raising rates last week to 4 per cent, the RBA made it clear that further moves would be needed to keep inflation restrained. The market continues to price in around a one-in-three chance of a rise to 4.25 per cent in April and has fully priced in such a move by June.

There was little sign as yet that higher rates had dented household sentiment much. A survey of 1,200 consumers by Westpac showed its index of confidence actually edged up 0.2 per cent this month even after the latest increase in interest rates.

That left it 37 per cent up on March last year and well above historic averages. Key was the astounding performance of the labour market which generated 200,000 new jobs in the five months to January and drove the unemployment rate down to 5.3 per cent.

The February employment report is due today and expectations are for another healthy rise of 15,000.

Source: Business Times, 11 Mar 2010