A GROUP of 13 Singapore companies is banking on their green know-how to snare a share of China’s lucrative and rapidly growing green buildings market.

The firms are set to attend a key China exhibition to try and tap a green buildings market set to be worth $55 billion by 2012 and $200 billion by 2020.

The Sixth International Conference on Intelligent, Green and Energy-Efficient Building & New Technologies and Products Expo – to be held in Beijing from next Monday to Wednesday – is expected to draw close to 10,000 professionals, including government officials, developers and consultants.

Singapore’s delegation will be made up of almost 50 individuals and will be led by the Building and Construction Authority (BCA) and the Singapore Green Building Council (SGBC).

SGBC, which is supported by the BCA and IE Singapore, will set up a Singapore Green Pavilion at the expo to showcase Singapore’s green building initiatives and the capabilities of the firms on the trip.

Singapore delegates will meet Chinese developers to explore possible partnerships. Said BCA’s executive director for research and international development Choo Whatt Bin: ‘Singapore has a good reputation as a Garden City – transforming into a city that is more environmentally sustainable.

‘We hope to ride on that reputation, and our experiences in the journey of going green, to help our Singapore firms make headway in the Chinese market.’

Source: Straits Times, 26 Mar 2010

CITY Harvest Church (CHC) yesterday gave its first detailed comments about its $310 million stake in Suntec Singapore, two weeks after announcing that it had become a ‘co-owner’.

The statement, in response to The Straits Times’ queries, said its shares in the downtown commercial property were not held by the church itself, but by a separate ’special-purpose investment holding company’ it wholly owned.

The CHC statement gave no details of the investment company, but said it had acquired ‘an indirect minority stake’ in the holding company of Suntec Convention Centre. CHC had previously described the stake as ’substantial’ and ’significant’.

The church added in the statement that it would be uninvolved in Suntec’s daily operations and that it did not have ‘exclusive use of any areas’.

On the issue of taxation raised by the public who wanted to know whether CHC’s rental income from Suntec would be taxed, the church said its investment holding company was not a charity, and so did not qualify for tax breaks or other concessions.

It described its investment as ‘a prudent and considered decision’ that was a hedge against rental costs; its management board thus believed that the venture would not subject the assets and resources of the 33,000-strong independent church, a charity, to unacceptable risk.

The Commissioner of Charities, when asked yesterday whether this cleared up questions about the deal, said he was ’still seeking clarifications from CHC on this business venture’.

Suntec Singapore, also called Suntec Singapore International Convention and Exhibition Centre, was acquired by ARA Asset Management last year through a specially created fund for $235 million.

The fund’s investors are Suntec Reit, which is managed by ARA and owns 20 per cent, and a consortium of private investors which holds 80 per cent. CHC, through its investment holding company, is now part of that consortium.

CHC said its $310 million did not ’solely represent the cost of the minority stake’; the sum also includes rental, renovation and other costs. Its explanation comes as more questions are being raised about its Suntec stake.

As of yesterday, a March 8 posting on the subject on CHC senior pastor Kong Hee’s website had drawn about 470 comments, most thanking the church for snagging a downtown worship location. But several were critical of the church keeping mum on where the $310 million would go.

Church member Simon Teoh, a 36-year-old investment banker, for example, said he wanted to know how much would be spent on the lease and how long it would last. CHC declined to answer such questions yesterday on the grounds of a non-disclosure agreement with the consortium.

Calling for more accountability and transparency, Mr Teoh said he had two wishes – that the Commissioner of Charities would ask for the confidentiality clauses to be rescinded and that CHC would amend its Constitution so major business deals can be put to a vote among ordinary church members.

Source: Straits Times, 26 Mar 2010

I REFER to yesterday’s report, ‘Redas chief on land supply, home prices’, where Mr Simon Cheong, president of the Real Estate Developers Association of Singapore (Redas), said the Government’s reserve price system may have been responsible for current high property prices.

Does Mr Cheong guarantee that the developer who bids low for a site and is awarded it will sell low in today’s current buoyant market, so price increases will be muted?

If there is no guarantee, then the developer will be laughing all the way to the bank.

Khong Kiong Seng

Source: Straits Times, 26 Mar 2010

WORRIED by an impending 30 per cent rise in rents next month, stallholders at five wet markets owned by supermarket chain Sheng Siong are now figuring out their next moves.

Several have said they will have no choice but to raise prices; others fear they may have to let helpers – usually family members – go; some say they have no choice but to pull out altogether.

But contemplating their future is not the only headache stallholders have.

In what could be a double whammy, residents angered by the prospect of costlier foodstuffs are planning to take their business elsewhere.

Consumers The Straits Times spoke to say they will turn to the comforts of the supermarket as the differences in prices narrow.

Said Mr Poh Bin Loo, 44, who frequents the Choa Chu Kang Street 62 wet market: ‘It is unfair. A big company buys the wet markets, increases rental and now we have to pay higher prices. Wet markets are supposed to be cheaper. Now what is the point of a wet market?’

Fajar Road wet market shopper Joyce Wong, 32, said she will head to the nearby Sheng Siong outlet instead.

Marine Parade GRC MP Seah Kian Peng, who oversees the Serangoon area, said an increase in food prices could start a vicious circle.

‘Rents are raised, stallholders increase prices, customers go elsewhere and the wet market fares even worse,’ he said, adding that stallholders should discuss strategies like opening for longer hours to remain competitive.

But for the moment, raising prices seems like a quick fix for stallholders.

At the wet market in Choa Chu Kang Street 62, yong towfoo, fruit, dried goods and vegetable sellers will be raising prices of their products by 5 per cent to 20 per cent next month.

Yong towfoo seller Jenny Kwek, for instance, will charge $1 for six pieces, compared with $1 for seven now. Plums at a neighbouring food stall will cost $1.40 each, up from $1.20. At a dried goods stall, a pack of 10 eggs will cost $1.90, up from $1.80.

‘We have no choice but to increase prices if we want to sustain the business here,’ said Madam Kwek, 55, who currently earns about $600 a month. ‘I am so scared I can’t keep my business going. But I have to try.’

Over at Choa Chu Kang Avenue 1, fishmonger John He, 39, may be forced to lay off one of his three workers because he has ‘no choice’. He pays them each a monthly salary of $1,500.

Still, he is in a better position than six other stallholders who say that they will be pulling out by the end of the month.

Vegetarian bee hoon stall owner Koh Ah Soi is one of them. The 60-year-old, who pays $1,700 in rent a month, said in Mandarin: ‘As it is, we are hardly earning anything. If we want to stay, we will have to pay rent with money out of our own pockets.’

Currently, stallholders at the five affected markets pay $1,500 to $3,000 in rent. Sheng Siong also halved the length of their contracts to one-year deals.

The rent hike comes after the chain’s controversial purchase of the five wet markets – one each in Serangoon Avenue 3, Bukit Batok West Avenue 8 and Fajar Road, and two in Choa Chu Kang – from private company Heeton Holdings in December.

The chain had wanted to convert them into air-conditioned markets, triggering public concern about the shrinking number of wet markets in Singapore.

Government leaders stepped in to say that the premises could not be turned into supermarkets and, under that condition, approved the sale.

On Monday, Mr Seah met stallholders from the Serangoon market to discuss their problems.

He has also written a letter to Sheng Siong on their behalf, asking it to reconsider the rent increase and the duration of the contracts. It has yet to reply.

‘I hope both Sheng Siong and the tenants can work something out to come to a compromise that will benefit all parties,’ he said. ‘The stallholders’ requests are not unreasonable. The lease is short for any business and the hike is on the high side.’

Sheng Siong declined comment when contacted.

The Housing Board, which approved the sale of the wet markets to the supermarket chain, will not be getting involved in what it sees as a ‘property transaction between two private parties’.

Its spokesman said: ‘HDB cannot impose new requirements on the new owner that are more stringent than those that the previous owner had to adhere to, such as controlling the rental charges.’

Source: Straits Times, 26 Mar 2010

HONG Leong Holdings has sold all 202 units in its upmarket 76 Shenton condominium in just one day.

The one- and two-bedroom apartments in the 99-year leasehold project were snapped up after a ballot yesterday. One-bedroom units went for $1,600-$2,600 per sq ft, and two-bedders for $1,600-$2,300 psf.

Hong Leong attributed the fast sales to the project’s location in Shenton Way, attractive pricing, ’solid’ design and healthy pre-launch interest.

Marketing agents began collecting cheques from potential buyers as early as two weeks ago. Balloting of 300-plus people was carried out yesterday to determine the order in which they could choose units.

Hong Leong is converting 76 Shenton from office space. Besides apartments, it will have commercial space featuring seven restaurants and retail shops. It is scheduled to be completed by end-2014.

Separately, Hong Leong unit City Developments said yesterday it will launch its high-end project The Residences at W Singapore Sentosa Cove this weekend. The 228 apartments in the project will sell for $2,500-$3,000 psf.

Some 60 units will be released this weekend, comprising two- to four-bedroom apartments, and penthouses ranging from 1,227 sq ft to 6,297 sq ft.

CityDev is partnering Starwood Hotels & Resorts Worldwide, which owns the W Hotels brand, to develop the project, which will be at the heart of CityDev’s The Quayside Isle.

The Quayside Isle will also have an adjoining 240-room W Singapore Sentosa Cove hotel and 86,000 sq ft of retail space featuring ‘quaint’ waterfront restaurants and shops. CityDev paid $255 million for the coveted marina Quayside site in July 2006 in a government tender.

CityDev managing director Kwek Leng Joo said that when all the components are completed, likely by 2012, Sentosa Cove will be one of the most compelling destinations in the region.

Mr Kwek expects most of the apartment buyers to be foreigners. Besides the Singapore launch, CityDev and Starwood will market the project in Hong Kong, Shanghai and Jakarta.

Also at Sentosa Cove, Ho Bee Investment and IOI will preview their 151-unit Seascape today. Units in that project are expected to sell from about $2,600 psf upwards.

Source: Business Times, 26 Mar 2010

THE Urban Redevelopment Authority has launched the tender for an industrial site next to Seagate’s facility in Woodlands.

An unnamed developer has agreed to bid at least $25 million or $28.78 per square foot per plot ratio (psf ppr) for the 60-year leasehold plot. The site is zoned Business 1, which means light and clean industry and warehouse uses are allowed.

The 347,451 sq ft land parcel can be built up to a maximum gross floor area of 868,628 sq ft. The tender for the plot closes on April 21.

Bernard Goh, director, industrial services at CB Richard Ellis, reckons the plot will be attractive to bidders who are contractors as well as developers. ‘It may attract three bids, with the top bids likely to be in the $35-40 psf ppr range,’ he added.

Colliers International data shows that three industrial sites have been sold in the Woodlands area in the past four years at prices ranging from $28 to $35 psf ppr. The sites are zoned Business 2, which also includes general industrial use.

The latest plot on offer, at Woodlands Avenue 12, was made available for application under the Government’s reserve list system in December last year.

Ministry of Trade and Industry’s Industrial Government Land Sales Programme for first half 2010 comprises eight reserve list sites (including the latest plot at Woodlands Ave 12 which has been triggered) and two confirmed list sites.

Source: Business Times, 26 Mar 2010

CLAIMS that the Government is partly to blame for Singapore’s short supply of land and high property prices have been firmly rebutted by the Ministry of National Development (MND) yesterday.

President of the Real Estate Developers’ Association of Singapore (Redas), Mr Simon Cheong, questioned on Wednesday the need for government intervention to halt the rise of private home prices, adding that it should shoulder some of the responsibility for short land supply and escalating property prices.

The ministry said yesterday in a statement that it ‘disagreed totally with his view’. MND pointed out that the Government’s objective was to maintain ‘a healthy property market’.

‘A property market bubble, if allowed to form, may not only impact housing affordability, but also severely impact the economy when it bursts,’ it said.

Mr Cheong – who is also chairman and chief executive of developer SC Global – had claimed that because the supply side was managed by the public sector, market forces were often not wholly free to respond to demand.

He noted that land values were largely determined by the Government’s reserve price system, but a site’s reserve price is not revealed.

This meant that during periods of high volatility, the system was unable to respond quickly enough to real-time market changes, Mr Cheong claimed, citing two recent government land tenders to illustrate the ‘conundrum and dilemma’ facing developers when bidding.

A single bid for a Tampines site was rejected in June 2008 for being too low, but was awarded in March at $421 per sq ft per plot ratio (psf ppr) – some 3.6 times higher.

A Ten Mile Junction mixed-use site also had a failed bid of $162 psf ppr in April 2008, but went for $437 psf ppr in February – 2.7 times higher.

‘Had the two sites been awarded back then at ‘market prices’, the current demand-supply mismatch scenario in the residential market may have been smoothed and price increases for such mass market projects more muted overall,’ said Mr Cheong.

Refuting this, MND said it was arguable if awarding the two sites at the low bid prices in 2008 would have moderated property prices, or simply allowed the bidders to achieve a higher profit margin.

It pointed out that the reserve price system had not deterred the successful sale of sites under the Government Land Sales (GLS) programme.

The yield of the two sites in question, it said, was small – estimated at about 800 units combined – compared to a total supply pipeline of 60,476 uncompleted units of private housing at the end of last year, of which 34,234 units are still unsold. It was ‘questionable if the added supply from these sites in 2008 would have affected prices today in any way’, MND said.

It asserted that, as the custodian of state land, it was the Government’s duty to ensure a fair market price was obtained for a site. It had awarded sale sites in the past even though the top bid was below the reserve price, it added.

And, for the two sites, it was ‘not convinced that the bids represented fair market value, rather than opportunistic bids’, given there were very few bids and those received were exceptionally low.

Industry observers that The Straits Times spoke to yesterday seemed divided on the issue.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak agreed that the Government had a duty to ensure land was sold at a fair price.

‘Even if developers buy at a low price, there’s no guarantee they wouldn’t sit on it and sell when the market is hot at a high price,’ he said.

But Chesterton Suntec International’s research and consultancy director Colin Tan felt Mr Cheong had a point and that reserve prices could be more transparent.

‘You cannot reject a very low bid as not being market price simply because it was too low, because then you would have to reject a very high bid for the same reason – for it being too high,’ he said.

Redas declined further comment when contacted yesterday.

Source: Straits Times, 26 Mar 2010

The government yesterday defended its policy of managing price movements in the private housing market and also stood by its method of supplying developers with state land sites.

It was responding to Wednesday’s speech by the president of the Real Estate Developers’ Association of Singapore (Redas), Simon Cheong, who said that the government should allow the private property market here to operate as a completely free market.

Mr Cheong also questioned the need for government intervention to manage the rise of private home prices and asked if the state should be so concerned with private housing prices when the segment serves only 16.5 per cent of the overall population.

His speech took some developers by surprise but most said that it was ‘brave’. There was also broad agreement that the government should reveal the reserve price of each site it puts up for sale.

The Ministry of National Development (MND) said it would ‘like to respond to the key points he (Mr Cheong) raised’.

‘The government’s objective is to maintain a steady and healthy property market where price movements are supported by economic fundamentals,’ MND said in a statement. ‘A property market bubble, if allowed to form, may not only impact housing affordability but also severely impact the economy when it bursts.’

MND does this by making sure that there is an adequate supply of land to meet demand and by providing timely and comprehensive real estate information to the public.

‘When necessary, the government will also introduce measures to dampen market exuberance and prevent prices from running ahead of economic fundamentals,’ MND added.

The ministry has in recent months taken several steps to keep private housing affordable, including the introduction of a stamp duty for sellers and the removal of the deferred payment and interest absorption schemes.

In his speech, Mr Cheong also cited two sites – one in Tampines and another at Ten Mile Junction – that were not awarded in 2008 after government land tenders as examples to illustrate how market forces were not allowed to act freely and were constrained by the reserve price system.

Both sites were recently awarded in new tenders at much higher prices than the bids in 2008.

Mr Cheong argued that if the government had awarded the sites at lower prices in 2008, it could have helped to moderate the recent hike in private home prices.

But MND ‘disagrees totally with his view’. Firstly, it is arguable if awarding the two sites at the low bid prices in 2008 would have moderated property prices, MND said. It could have instead simply allowed the bidders to achieve higher profit margins.

MND also said that the potential yield from the two sites is small (around 800 units) compared to the total supply of 60,476 uncompleted private housing units from projects in the pipeline (as at Q4 2009) – of which 34,234 units are still unsold. It is ‘questionable’ whether the added supply of the two sites in 2008 would have affected prices today in any way, the ministry said.

The reserve price also did not deter the successful sale of sites under the government land sales programme in 2008, MND pointed out. That year, seven residential sites which could yield a total of 2,464 units were sold through the confirmed list.

The Tampines and Ten Mile Junction sites, which were released for sale through the confirmed list but not awarded, were among the few exceptions.

MND added that a reserve price is necessary, as it is the government’s duty as the custodian of state land to ensure it obtains a fair market price for a site. But the reserve price serves only as a guide, and is not a rigid formula for the government in deciding whether to award a sale site.

Said MND: ‘The government had awarded sale sites in the past even when the top bid was below the reserve price. However, for the two sites cited by Mr Cheong, the government was not convinced that the bids represented fair market value rather than opportunistic bids, as there were very few bids for the sites, and the bids were exceptionally low.’

Developers BT spoke to said that MND’s response was ‘as expected’.

‘MND has always stuck to its line about maintaining a sustainable property market and so we didn’t expect changes just because of his (Mr Cheong’s) speech,’ said the chief executive of a property group here.

But while not everyone agreed with all parts of Mr Cheong’s speech, most developers were in favour of asking the government to disclose the reserve price of each site it puts up for sale by tender.

‘For future tenders, if the reserve price is released, there won’t be cases where bids come in under the minimum price,’ said EL Development managing director Lim Yew Soon. ‘By simply listing the reserve price, it makes the whole process easier.’

Source: Business Times, 26 Mar 2010

A TAIWANESE couple have paid $650,000 for a four-room flat in Bain Street – smashing Housing Board (HDB) records and reflecting the strength in the red-hot resale market.

The sale price works out to be $736 per sq ft (psf) for the 30-year-old flat on the 25th floor of a block at Bras Basah.

That is the highest psf price paid for an HDB property and is on a par with prices of private homes in suburban areas.

But the Taiwanese, who are permanent residents (PRs), bought the 883 sq ft flat last month for its proximity to their work place in the City Hall area, its designer interior and panoramic views, said ERA Realty agent William Koh, who brokered the deal. The couple paid $70,000 above the flat’s valuation.

The sellers were a young Singaporean couple who have a child. Both buyer and seller declined to be interviewed.

The price trumps the old record set last November when a four-room, 969 sq ft flat at Strathmore Avenue in Queenstown sold for $653,000 or $674 psf.

Housing analysts were surprised at the price achieved in Bain Street.

ERA Asia-Pacific associate director Eugene Lim said the purchase was unusual although demand ‘is still strong’, with upgraders, downgraders and PRs propping up the market.

The HDB recently tightened rules on the resale market. Buyers of non-subsidised HDB resale flats must now occupy their property for at least three years before they can sell it. This is up from 2.5 years or one year previously, depending on the financing.

The HDB has also imposed limits on the number of HDB flats in each block and neighbourhood that can be sold to non-Malaysian PRs to prevent the formation of foreigner enclaves.

Source: Straits Times, 26 Mar 2010

RESALE prices for private homes have gone through the roof this year and are now above the sky-high levels seen in the 2007 boom.

A Savills Singapore report said average values in the segment in January and last month shot ahead of the dizzy heights set three years ago.

The soaring prices are part of a larger picture that depicts the entire real estate sector roaring along in top gear.

Rising prices in the HDB market – and high launch values for new homes – are helping to push buyers into private resale homes, say experts.

Savills research showed that average prices for non-landed private resale homes have surpassed the 2007 peak by 6 per cent while landed home prices are 15.6 per cent ahead.

Private resale home prices are also now above the 1996 peak. This means they are at the highest level ever seen, said Ms Christine Sun, the firm’s senior manager for research and consultancy.

‘HDB resale prices are on the rise and prices of new launches are quite high, so private resale homes have become a popular alternative for buyers,’ said Ms Sun. Savills found that average resale prices of homes in the mass market, mid-tier and high-end segments have all crossed the 2007 peaks.

In the first two months this year, average mass market prices were at $662 per sq ft (psf), up 19 per cent from $555 psf in 2007. Average resale prices of mid-tier homes were $886 psf, up 19.7 per cent from $740 psf in 2007.

It was not as buoyant in the high-end segment where average prices reached $1,425 psf in January and last month, up 11.8 per cent from $1,275 psf in 2007.

But there have still been some gilt-edged deals in this segment this year. At The Sail @ Marina Bay, 15 units transacted for more than $2,000 psf to as high as $3,204 psf, said Ms Sun.

Private property proved unexpectedly resilient during the downturn. Prices of resale high-end homes suffered a marginal decline of 0.2 per cent from 2007, said Savills.

Prices for homes in the mid-tier segment rose 5.6 per cent while mass market ones increased 6.8 per cent.

Knight Frank chairman Tan Tiong Cheng said yesterday: ‘Once there are no suitable new launches in a certain area and there’s a huge gap between prices of new launches and old projects, people will chase after the old projects.’

While prices are up, sale numbers are still lagging those of the boom years. Resale volume has picked up in the past two months, but it has not surpassed the resales done in the first quarter of 2007, said Ms Sun.

Nonetheless, the Savills report showed that resale volume last year was strong, more than doubling those in 2008. But the 15,009 resale deals done last year are still below the 2007 peak level of 20,665 deals. Sales of new homes in comparison totalled 14,725 units last year and 14,811 units in 2007.

Consultancy Cushman & Wakefield managing director Donald Han told The Straits Times: ‘The market is seeing activity at all levels. It remains active despite measures introduced by the Government. Given that new launches have been largely well received, it is natural to see resale prices rise in tandem.’

Owners of completed homes can also cash in on the popularity of new projects nearby that are selling at high prices, experts said. In the resale market, owners of homes near new launches that are selling at higher prices would have a better bargaining power when it comes to negotiating for higher prices.

But not every project has reached its peak price, experts cautioned. In the new launch market, mass market and mid-tier prices have exceeded the 2007 peak but luxury homes are still about 15 per cent to 20 per cent below that peak.

Source: Straits Times, 26 Mar 2010