RENTS at industrial properties formerly owned by JTC Corp are likely to go up from June next year once a rental rise cap is lifted and a real estate investment trust (Reit) manager takes over.

The properties are held under the Mapletree Industrial Trust, which is headed for an initial public offering, possibly by the end of the year. Reits collect rent from tenants of the properties they own and pay most of it as dividends to unit holders.

Mapletree Investments, which bought the properties in 2008, had to face unhappy tenants struggling with soaring rents last year. Many had petitioned Mapletree for hefty rent cuts to cope with the tough market conditions then. Most of all, they were upset at having missed out on a 15 per cent rental rebate granted by JTC as part of the Government’s Resilience Package.

Many are small and medium-sized enterprises occupying the cheapest of the ex-JTC factories. And JTC rents are generally below market rates.

Property consultants had said that they cannot expect Mapletree to offer them the same low rates.

In any case, Mapletree had said that 1,448 of the industrial trust’s flatted and stack-up factories, as well as warehouses, would benefit from a 5 per cent rental cap – of JTC’s rent in July 2007 – when they renewed their leases before this month.

There is no cap for the remaining 108 – 7 per cent of the total – tenants in its business park buildings.

Mapletree Investments’ chief executive (Industrial) Phua Kok Kim said yesterday it has stuck to the rental cap. He said new tenants are signing leases at higher rates, which shows that the properties are ‘under-rented and there is potential for organic growth’.

But any rise is likely to be gradual, said Mapletree group chief financial officer Wong Mun Hoong.

Mr Phua added: ‘All our rents are subject to competitive market forces of supply and demand, so even when the rental cap of 5 per cent is lifted for non-business park space, the renewal rents will still be subject to market forces.’

Source: Straits Times, 1 Jul 2010

Record number of flats offered in single launch includes waterfront units

THE Housing Board is offering the largest number of build-to-order (BTO) flats in one launch to date, with 2,696 flats up for grabs – including prized waterfront units in Punggol.

The projects being launched are: Waterway Terraces in Punggol, and Fernvale Foliage and Rivervale Arc, both in Sengkang.

A total of 95 per cent of units will be set aside for first-time buyers.

The latest batch brings the total number of new BTO flats in the past six months to 8,828. The HDB said that is equivalent to all of last year’s BTO supply.

Under the BTO scheme, flats are built only when a certain level of demand for the project is met.

A first in public waterfront housing, Waterway Terraces will consist of 1,072 premium flats suitable for buyers willing to pay more for eco-friendly designs and features, the HDB said.

Prices start from $186,000 for three-room flats of 67 sq m, followed by $300,000 for four-room flats of 92 sq m and $374,000 for 112 sq m five-room flats. The development will be ready in the first quarter of 2015.

‘Flat buyers with lower budgets can consider the standard flats at Fernvale Foliage and Rivervale Arc,’ the HDB said.

To be completed in the second quarter of 2014, Fernvale Foliage’s 504 flats start at $215,000 for four-room, 92 sq m units and $279,000 for five-room units which are 111 sq m in size.

The project is close to Fernvale and Thanggam LRT stations, which connect to Sengkang MRT station.

Rivervale Arc is at the corner of Tampines Expressway and Sengkang East Drive, within walking distance of Rumbia LRT station.

Prices start at $68,000 for two-room flats of 47 sq m; and $122,000 for three-room, 67 sq m units. Four-room units of 93 sq m start from $201,000. Units in this project will be ready in early 2014.

Even more BTO flats are on the way. The HDB aims to have at least 12,000 launched by September and more, if public demand requires it.

Next month, another 1,000 homes in Bukit Panjang and Jurong West will be launched. Homes in Yishun and Woodlands are also scheduled this year.

ERA Asia-Pacific associate director Eugene Lim expects units at Waterway Terraces to be five to six times oversubscribed. ‘Where else can you get waterfront housing at such affordable prices?’ he said yesterday.

The standard flats, at prices 30 to 40 per cent lower than resale prices of similar units in the vicinity, are very attractive, especially for first-time buyers, he added.

Consultants also say the large slew of new flats a day before the release of the HDB’s latest resale price index estimates could indicate a further rise in the index.

The second-quarter flash estimates will be released today.

‘When resale prices keep going up, those who opt for resale units may look out for BTO flats as well,’ said Mr Colin Tan, research and consultancy director at Chesterton Suntec International.

Applications for the flats will close on July 13.

Source: Straits Times, 1 Jul 2010

Market players believe more home hunters and investors are going up-market.

To tap opportunities in this segment, developer Far East Organization has launched a series of luxurious apartments under a brand called Inessence.

Industry figures show that some 240 ultra high-end homes were sold in the first half of this year, and observers said there is more upside ahead.

Living it up at Boulevard Vue will come with a big price tag.

An apartment here costs about S$3,700 per square foot, and that is just the starting price.

About one-third of the project has been snapped up, with the penthouse sold for about S$34 million recently.

Boulevard Vue is among four bespoke residences under the Inessence brand.

Its developer Far East Organization said the properties are all located in the Orchard Road area.

So far, about six-in-10 of the available units are taken up by foreigners.

Chia Boon Kuah, executive director, Far East Organization, said: “With the increase in interest in Singapore, especially from the Chinese, from Malaysians, from Indonesians, and we expect also the Indians to be arriving and buying such luxury properties…with these people, with the new money and the new customers coming to Singapore, we believe these products will be taken up.”

According to recent studies by Cap Gemini and Merrill Lynch, global wealth increased by about 19 per cent to US$39 trillion to close in on the pre-crisis peaks of 2007. The Asia Pacific led the growth in wealth, outpacing Europe for the first time.

Observers said foreigners are also attracted to properties in Singapore because they are relatively cheaper.

The peak price for luxury homes was about S$4,500 per square foot in 2008.

Donald Han, managing director, Cushman & Wakefield, said: “If you look at the ultra high end pricing wise, it is hovering about 18 to 20 per cent off from peak of the residential market, which is defined as the first quarter of 2008.

“There is a lot for the ultra high-end market to pick up, and values are deemed quite compelling to some of our neighbouring cities like Hong Kong, Shanghai or even Beijing, which is all pretty toppish – at market peaks in that sense.”

In the first half of this year, some 240 luxury apartments were sold in Singapore, at a total value of S$1.4 billion.

And Far East Organization believes there is room for growth, as sales are still below the peaks in 2007 when 1,000 units were sold that year, at a total value of S$6.4 billion.

Source: Channel News Asia, 30 Jun 2010

The Singapore Land Authority (SLA) will re-launch a tender for the Old Admiralty House, part of the former British naval base in Sembawang.

SLA has terminated its contract with YESS Resorts and Country Club, which had converted the national monument into a country club.

YESS had taken over the premises in 2007 for a monthly rent of $40,000.

This was also the first time a preserved monument was tendered out by the SLA.

YESS had proposed to transform the place into the multi-purpose Admiral Country Club, with family-oriented leisure and entertainment activities.

SLA said it had to terminate the contract after non-payment of rent, despite repeated warnings.

But it agreed to allow all six of sub-tenants to remain until early-2011 on compassionate grounds.

SLA will take over operations of place until the re-launch of the tender.

Source: Channel News Asia, 1 Jul 2010

The Housing and Development Board’s (HDB) latest Build-To-Order (BTO) project, Waterway Terraces in Punggol, is six times oversubscribed, just a day after applications opened.

Five-room flats are the most popular, receiving almost 1,800 applications for the 306 available flats.

Four-room and three-room units are also oversubscribed.

Four-room flats received 2,461 applications for 306 units, while 268 applications were received for the 178 available three-room units.

Waterway Terraces is Singapore’s first waterfront public housing project.

Industry watchers said they expect the project to be more than 10 times oversubscribed.

HDB’s other new BTO projects – Rivervale Arc and Fernvale Foilage, both in Sengkang – were less popular.

About half of the units in these projects received applications.

Source: Channel News Asia, 1 Jul 2010

The Housing and Development Board, HDB, has launched three sites for sale by tender under the second half of the Government Land Sales or GLS Programme.

Two of them are residential sites and one is a mixed commercial-residential site.

The mixed development site is located at the junction of New Upper Changi Road and Bedok North Drive.

One of the residential sites in Jurong West is meant for an executive condominium development.

The other site at Miltonia Close in Yishun is slated for strata housing.

HDB says the three sites can potentially yield about 1,300 housing units of which about 460 are Executive Condominium (EC) units.

In addition to the three sites released by HDB today, URA will also be launching another three sites with residential component in the later part of this month.

These include a residential site at Jalan Eunos/ Foo Kim Lin Road, and a white site at Peck Seah Street/ Choon Guan Street which are released for sale under the Confirmed List.

Another residential site at Buangkok Drive/ Sengkang Central will be made available for application under the Reserve List.

The GLS Programme for the second half of this year comprises 27 residential sites and four mixed-use sites where private residential housing can be built.

The total potential supply quantum of 13,905 private residential units is the highest potential supply quantum from any half yearly GLS Programme since the Confirmed List/Reserve List system started in second half of 2001.

Source: Channel News Asia, 1 Jul 2010

Prices of resale HDB flats went up for the fifth consecutive quarter to surpass the 1996 peak by nearly 18%.

HDB’s flash estimate for the second quarter showed the Resale Price Index (RPI) rise 3.8% on-quarter to 160.9, surpassing the 1996 peak of 136.9 points.

Some analysts said the second quarter tends to see the strongest activity as many home buyers leave their flat purchases till after the Lunar New Year.

But others didn’t expect resale prices to rise so quickly, because of the government’s aggressive launch of new flats this year.

The government on Wednesday announced its single largest launch of HDB flats and said if demand continues it will add more units for sale, bringing the total to 16,000 for the whole of this year.

Analysts said this will help assure home buyers there are enough flats to go around, and will in the long-term, moderate prices of resale flats.

But over the next few months, they do not expect any let-up either in resale demand or price.

Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said: “In the HDB market, although the slowdown might be more in terms of the Cash Over Valuation, or the seller’s expectations, the buyers, I think, are fairly bullish because in a way, the HDB public housing market forms the very base, the cheapest form of housing to anyone in Singapore.”

Furthermore, analysts said mass market condominiums are still out of the reach of most buyers.

Despite a slowdown in sales in recent months, private home prices have remained firm, increasing at 5.2 percent in the second quarter.

This is slightly smaller than the 5.6 percent rise in the first three months of this year.

It is also one of the smallest rate of increases in the last 12 months.

ERA Asia Pacific’s Associate Director Eugene Lim added that developers “are not likely to cut prices to move sales, as most of them have strong balance sheets.”

Chris Koh, Director of Dennis Wee Group, estimated that private home transactions have gone down by about 20 percent in recent months.

He said: “You speak to some of us who do private property transactions, we will tell you, yeah, the market is correcting a bit.

“We’re not seeing a steep rise in prices anymore for the private market. Instead private property prices have only inched one, two percent up and you can see that it’s more or less starting to plateau out.

“If that happens maybe the HDB market will mirror it….but at the moment I’m not seeing that in the HDB market yet.”

Overall, market watchers expect resale prices for 2010 to increase by 8 to 15 percent.

On Thursday, the government announced three more land parcels for sale, which could yield about 1,300 residential units, including 460 Executive Condominium flats.

The Urban Redevelopment Authority will also launch another three sites later this month, which will include sites for residential purposes.

In total, the Government Land Sales (GLS) Programme for the second half of 2010 comprises 27 residential sites and four mixed-use sites where private residential housing can be built.

The total potential supply of 13,905 private residential units is the highest potential supply quantum from any half yearly GLS Programme since the Confirmed List/Reserve List system started in the second half of 2001.

Source: Channel News Asia, 1 Jul 2010

Private home prices remained firm in the second quarter, sending the residential property price index to a record high of 184.1 points.

Private residential prices increased by 5.2 percent quarter-on-quarter in the April-June period, according to flash estimates released by the Urban Redevelopment Authority (URA) on Thursday.

The figure beats the 3 percent rise forecast by some analysts. But market watchers do not expect further anti-speculative measures to be implemented by the government.

Sales-wise, industry figures showed that the number of caveats lodged in Q2 fell by 19.2% on-quarter to 7,041.

While sales volume moderated, prices continued to grow, albeit at a slower pace.

Private home prices were up 5.2 percent in Q2, after rising 5.6 percent in the first three months of this year.

The rise in Q2 pushed the residential property price index to an all-time high, surpassing the market peak (181.4 points) in Q2 of 1996.

Still, analysts said it is too early to call for additional cooling measures.

Liang Thow Ming, from Credo Real Estate, said: “Compared to 1996, I think we are a little bit above in terms of prices, especially in mass-market (homes). However in terms of income, I think we are also well above the 1996 level. So in that sense where affordability is concerned, it’s still pretty well-maintained. So I don’t think there is a bubble over here.”

In Q2, prices for mass-market homes (those outside the central region) showed the highest growth of 5.7 percent, partly due to price points set by new projects like Tree House and The Minton.

Consultancy firm CB Richard Ellis said another reason for the increase is the rising prices of resale transactions in locations where several sites from the government land sales programme had been sold in the past six to nine months.

Meanwhile, private homes in the city and prime districts (core central region) cost 5.1 percent more. And those in the city fringe (the rest of central region) saw price increases of 4.5 percent.

In comparison, for the first quarter of 2010, prices of non-landed private residential properties increased by 4.4 percent in the core central region, 7.9 percent in the rest of the central region and 4.3 percent in the outside central region.

Home prices are also expected to soften as the government rolls out more state land for tender in the second half.

Jones Lang LaSalle’s Head of Research (Southeast Asia), Dr Chua Yang Liang, said: “Prices are likely to remain stable or grow very moderately for the next few quarters. This is given that transaction volumes have come off in the earlier quarters and the few months that we’ve seen. And usually going by the long-term trend, as transaction volume comes down, prices will follow suit. In terms of the rate of increase, it will slow down or remain stable.”

Observers expect prices to grow by up to 3% for the next two quarters, bringing the full-year price increase to 20 percent.

Source: Channel News Asia, 1 Jul 2010