One of them demands $2m, but court awards him $74k

A palatial bungalow sits at 20A Meng Suan Road, in stark contrast to Nos. 20 to 28 – old one-storey terrace houses, most of them with zinc roofs.

Over the past 10 years, families and workers have moved in and out of the nine terrace houses, which sit on land owned by Mr Ong Beng Chong, who lives in the bungalow.

In recent years, Mr Ong has been trying to get the occupants out so that he could redevelop the land.

The job looks simple enough, given that he is the landlord and calls the shots.

Except that the 21,066 sq ft piece of land in Mandai has a history that dates back to the 1950s, when people could own the land, and let others build houses on it in return for ‘ground rent’.

In this case, that amounted to between $7 and $20 a month.

As of January 2008, the plot had an indicative price of around $250 to $260 per sq ft. Inclusive of the development charge, this would put its worth at about $5 million.

Mr Ong sent quit notices to tenants, with offers of compensation.

But he found several unwilling to budge.

Then the takeover battle started.

In March last year, he sued to evict the home owners of Nos. 21 and 23 after they refused his $40,000 compensation. He failed.

Justice Lai Siu Chiu ruled that Mr Ong’s father had, in 1959, sold the two houses to Mr Yeo Ang Moo and Ms Victoria Jayaram’s father, at a price for which they could have bought houses outright in other parts of Singapore.

Mr Ong’s offer of $40,000 compensation then was ‘derisory’ and not a reasonable sum compared to the $5 million he stood to gain by auctioning off the land on which the row of houses stood.

Although Mr Ong lost the suit then, he appealed further and the case was subsequently settled through mediation.

He acquired the two units and the land they sat on.

He then moved on to acquire one more unit, settling the matter with the unit owner out of court.

Retiree Goh Kim Thong of No. 24, however, held out. He refused $225,000 and wanted between $1.8 million and $2 million instead. Mr Ong applied to evict him.

Mr Goh had bought the house for $10,000 in 1983 from the previous owner and lived there, paying a $7 monthly ground rent.

Based on the original 1959 agreement, Mr Goh argued in court he was entitled ‘to squat on the land at $7 per month until the 999-year lease ran out in 2883′, according to court documents.

Twice, the High Court warned Mr Goh that he might not end up getting the amount he wanted.

Twice, Mr Goh insisted on pressing his case, never mind that independent valuers had placed the value of the 51-year-old buildings at between $67,000 and $74,000 – far lower than what he had been offered.

Mr Goh, who represented himself, had taken what Justice Chan Seng Onn described as ‘a gamble’.

He lost.

Justice Chan said the law to repossess such land is clear. The original land owner could retake the land as long as the building owner was reasonably compensated.

He awarded him $74,000 for the house based on its present condition and ordered him to hand over the premises within four months.

Mr Goh, who does not live at No. 24, signalled that he would be fighting on with an appeal.

The house is now occupied by six workers from Malaysia who are renting the house for $180 each. Mr Pang Kah Peng, 48, a tiling worker who has been living there for six years, said: ‘We’ve heard before that we are supposed to move out, but we still don’t know when. No one has told us anything.’

It is now four units down for Mr Ong. Two others are occupied by Mr Ong’s family and relatives.

That leaves just Nos. 22, 26 and 28.

No. 28 is owned by the Lim Clan Association. Member Lim Teck Huat, 78, a retiree, said the clan had been offered $225,000 for it, but may want to ask for more.

‘We have been here for over 20 years and don’t have an alternative location yet. The house is so big, surely we should be given more,’ he said.

The caretaker of the clan’s premises, Mr Soh Boon Ang, 71, has a different problem: ‘I’ve been living here alone for 10 years. I’ll have nowhere to go if we have to move out and I have to get an HDB flat.’

Source: Sunday Times, 11 Jul 2010

If there is no evidence that a ‘squatter’ paying ground rent is entitled to stay on the land permanently, then he needs only to be compensated reasonably for his house, Justice Chan Seng Onn had said.

He added that the law to repossess such land is clear.

The case has a precedent. In 1973, a landowner successfully evicted someone who bought an attap house on his land and paid $3 ground rent per month.

The judge had concluded that the landowner should be allowed to recover possession of the land, provided he made reasonable compensation to the defendant.

Lawyers said the latest case was a throwback to more than 50 years ago when it was a practice for some landowners to allow others to build houses on their land and reside in these houses, provided they continued to pay rent for the land as ground tenants.

Mr Patrick Tan, a lawyer who handles property cases, said it is very rare to find people paying ground rent in Singapore now.

‘Most of the time now, a landowner will own both the structure on the land and the land. Developers, for example, will buy both the property and land when a place goes en bloc,’ he said.

He added that the case is ‘archaic and complicated’ and that, in the past, the only way for a tenant to lay claim to the land was to prove he had an ‘interest’, that is, had developed roots and ownership there over a very long period.

Another property lawyer, who declined to be named, said the practice of ground rent dates back to the time of slums when it would have cost landowners nothing to allow a tenant to beautify and improve their land by squatting on it and building a house.

Source: Sunday Times, 11 Jul 2010

Tenants hope new lifestyle store will lure crowds back to deserted mall, a former youth hangout

It was lunch time last Wednesday at The Heeren Shops in busy Orchard Road.

You would think the eateries at its basement and on the fifth floor would be packed, but, at Thai Express, only a handful of tables were occupied.

Just two shop spaces away, at Fish & Co, not even one customer was spotted.

And it was not only the eateries that were deserted.

Manicurists at The Nail Spa & Wellness chit-chatted and worked on each other’s nails.

A hairstylist at UrbanHair by Ginrich was busy – fussing over his own hair.

There were no customers at either shop.

The shopping mall, a popular hangout with young adults about four years ago, has lost a lot of its vibe.

A former anchor tenant, music store HMV, has packed up and gone, and glitzy malls like Ion Orchard and 313@Somerset are now the new buzzwords with shoppers.

‘When The Heeren opened, people had to squeeze through crowds, and I’d see about 200 people walk past in an hour,’ said Mr Richard Tat, 51, owner of Body Decor Tattoo and Piercing.

‘These days, hardly anyone walks by,’ said the Heeren tenant of 10 years, who now depends on regulars for business.

Days can be slow. Last Wednesday, six hours after he started work at noon, the tattoo artist had done just one tattoo and one piercing and had sold a replacement ball for a navel ring.

Indeed, that day was not a good one either for many other tenants, going by what The Sunday Times observed between 9.45am and 10pm.

We saw people venturing into the six-storey mall, but many just window shopped on the first floor before walking out.

Most of those interviewed said they were looking only for a specific item and were not interested in checking out the shops.

Even fewer bought anything.

Certainly, at 2pm, there were no shoppers in the youth zone on the fourth floor, as loud techno music blared from some shops.

Around 6pm, things got a little better. We counted about 30 people on the fourth floor, which is occupied mostly by shops selling apparel.

But there were fewer than 15 patrons at the restaurants on the fifth floor.

The dearth of traffic was despite at least 19 shops in the mall offering discounts of up to 75 per cent, though Pasta de Waraku’s student discount of 25 per cent seemed to be working.

It was the only restaurant on the fifth floor that was half-full at 1.30pm and 8.30pm. Other eateries were, at the most, about one-fifth full.

It was the same story with the basement eateries.

They were mostly empty, save for the newly opened Kiseki Japanese Buffet Restaurant, which attracted a queue.

When the music stopped

Tenants have been wringing their hands ever since HMV pulled out in January this year. The music store relocated across the road to 313@Somerset, less than a five-minute walk away.

‘When HMV was here, we would be able to get more foreigners and increase our sales. Without it, we see a 30 to 40 per cent decrease in sales,’ said Ms Cherly Wong, store manager at shoe and apparel outlet Converse on the third floor.

Fewer customers could have prompted some tenants to pull out. The Sunday Times estimated that 25 per cent of shops were available for lease.

According to Swee Cheng Management, the company that manages the mall, it has an incoming tenant, hairdressing salon Shunji Matsuo. It is in talks to fill up six units.

Efforts have been made to keep up with the changes in the Orchard Road area.

The 14-year-old Heeren was renovated two years ago, with changes made to the basement and fifth floor to make for more retail and recreation space.

Last year, an outdoor refreshment area was built and several eateries, such as McDonald’s, set up shop.

Last month, the mall even hosted this year’s Manhunt Singapore in a bid to whip up excitement.

Shoppers, however, remained lukewarm.

Ms Jocelyn Chan, 22, a Singapore Management University student, said she used to shop at The Heeren during her secondary school days, when it was still a trendy hangout.

Now, she prefers malls that carry international brands like Zara and Topshop. ‘These days, I come only when the eating places at other malls are too crowded,’ she said.

Tenants are now banking their hopes on ALT, the new anchor tenant which takes up the space vacated by HMV.

ALT, a lifestyle concept store targeting shoppers from their mid-20s to mid-30s, opened last Thursday.

Mr Ignatius Koh, 27, owner of Coalition Store, which sells clothes and accessories on the fourth floor, said: ‘The crowd has been slow because we’ve been missing an anchor tenant for three levels of shop space.

‘I’m expecting things to go back to normal once ALT opens,’ he said last Wednesday.

The folks at Indonesian restaurant Desa Kartika share the same hope.

‘We’ll be happier once the anchor tenant opens. It will revitalise Heeren again,’ said a spokesman.

Source: Straits Times, 11 Jul 2010

Others say excessive liquidity exaggerates prices

PROPERTY prices of both private and Housing Board resale flats have, for the first time, surpassed previous peaks to reach new records.

Latest official estimates show private home prices rose 5.2 per cent in the second quarter, after a 5.6 per cent jump in the first quarter. That means prices are now 1.5 per cent above the 1996 highs.

HDB resale flat prices rose 3.8 per cent in the second quarter, marking the eighth straight quarter that prices have broken records since 2008, when they surpassed the peak levels of 1996.

The rise in prices signals a strong demand for homes in the property market. But with prices at record levels, can this demand be sustained?

For home-buyers and investors still on the lookout, the big question is: To buy or not to buy? Does it make sense to buy now, given that prices are at the highest levels?

Or is this a new era of property prices in Singapore?

Most industry analysts whom The Sunday Times spoke to seemed to think so.

The increase in levels of affluence in Singapore and in Asia due to a robust regional economy has helped to fuel prices, said C&H Realty managing director Albert Lu.

These prices move up and down in tandem with property cycles, but each peak is higher than the previous peak and each bottom is higher than the previous bottom, noted ERA Asia-Pacific associate director Eugene Lim.

‘So, if we were to plot a trend line across all the cycles, we can see that property prices will be on an uptrend over time,’ he said.

Given Singapore’s economy is roaring at double-digit growth rates, property prices can be expected to continue their march upwards in the short term, he added.

Even if private property buyers wait a year or two, there is no guarantee that prices will come down. And when they do, desirable properties are often taken off the market. ‘So if you see something you like, do your sums and if it is affordable for you, then go for it.’

Mr Lu agreed. Buyers who cannot wait might want to buy before prices go up further, although if the purchase can be put on hold, ‘it would be best to catch the next down cycle’, he said.

This means the absolute loan amount a buyer takes will be lower and more affordable.

But prices are unlikely to return to the 2004 levels and the next down cycle could be as far as five years away, he said.

Chesterton Suntec International research and consultancy director Colin Tan has a contrarian’s view.

This new level of prices is ‘somewhat exaggerated by the excessive liquidity in all the markets today’, he said.

While the market has achieved new peaks, it has done so on the back of ‘abnormally low interest rates’ – three times less than normal interest rates, he added.

The fundamental level of prices is likely much lower and close to pre-2007 price levels, he said.

‘So although we’re on a higher plane, current price levels will correct significantly to their true levels. The big question is when.’

So have investors missed the boat? ‘In a sense, they have. But it’s a boat lined with super glue – easy to jump into but difficult to disembark,’ cautioned Mr Tan.

The rental market has plateaued in the second quarter and from anecdotal evidence by agents, investors are finding it difficult to achieve the rental returns they had hoped for, he added. As a general rule, investors should aim for a 3 per cent to 4 per cent rental yield per year, said Mr Lim.

Despite the high price levels, Associate Professor Sing Tien Foo of the National University of Singapore’s real estate department observed that the current growth in prices is ‘still not as high compared with the growth in prices in the previous peaks in the 1990s’.

However, ‘we have to be concerned about the high volatility created by the active markets’ and cautious about the possibility of a property bubble, especially if prices continue to increase at a pace that is not sustainable or reflective of the health of the economy, he added.

Source: Straits Times, 11 Jul 2010