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THE reverse mortgage scheme for HDB flats will take some time to win acceptance, because many Singaporeans still believe in leaving their flats to their children when they die, said HDB chief Tay Kim Poh this week.

Insurer NTUC Income, the only company offering reverse mortgages for HDB flats now, reports that only 10 people have been offered loans under the scheme.

‘Not too good’ is how Mr Tay describes the response.

He added: ‘From our observation, a lot of Singaporeans would like to bequeath their flat to their children, so the idea of putting their flat up for reverse mortgage to generate income doesn’t come naturally to most households, unlike in Britain and the United States. ‘So we do think that it would take a while for such a scheme to take off.’

In a typical reverse mortgage, an elderly person pledges his property for a sum of money, with which he buys an annuity that provides a regular monthly income.

The HDB gave the green light for it recently to help older flat owners earn an income from their properties.

Ms Melissa Yam, a senior manager at NTUC Income, said HDB flat owners who went for reverse mortgages took out loans of between $30,000 and $120,000.

The flat owners, who were between 62 and 83 years old, mortgaged mostly three- to five-room flats.

Source : Straits Times -30 Sep 2006

LUXURY retailer FJ Benjamin Holdings Ltd is in talks with a prospective buyer to sell its property at 6B Orange Grove Road for about $37 million. ‘The proposed disposal of the property is in line with the company’s stated intention to divest the property and use the proceeds to reduce bank borrowings and as working capital for expansion of its businesses,’ the fashion retailer said yesterday, adding that there is no certainty that the sale will proceed.

But should the deal be sealed, the transaction would result in an increase in FJ Benjamin’s net tangible assets per share and earnings per share. For illustration, if the sale was made at the end of FY2006, NTA per share would have risen to 32.32 cents from 30.53 cents. And EPS would have risen to 3.55 cents from 3.53 cents if the transaction had been effected at the start of FY2006.

Source : Business Times - 30 Sep 2006

Customers can transact property at 3 outlets initially

THE neighbourhood post office has added yet another dish to its growing menu of services.

>From Oct 16, property advice and transaction services will be offered at Singapore Post outlets, starting at three places: Ang Mo Kio Central, Marine Parade and Toa Payoh Central.

The tie-up between SingPost and property agency ERA Realty, dubbed PostREALTY, will see a team of ERA staff set up shop in each of the three outlets.

A customer service officer, aided by a small sales team, will attend to walk-in customers and help them to buy, sell, or rent HDB flats, private homes and commercial properties.

Asked if there were plans to extend the new service to its 59 other outlets, a SingPost spokesman told BT yesterday: ‘SingPost and ERA Realty will monitor the demand for the PostREALTY service and we will increase the number of post offices accordingly.’

ERA Realty president Jack Chua explained that this was a partnership and not a landlord-tenant relationship. As such, no rental will be charged by SingPost. But the two have made arrangements to share advertising and commissions, details of which he declined to disclose.

The property service is but one of many recent efforts by SingPost to unlock more value from its network of 62 storefronts, which receive more than 20 million customer visits each year. It has already diversified into personal loans and pawnbroking services.

Earlier this month, it also announced a tie-up with advertising agency Focus Media to screen TV ads in all its outlets.

In a separate announcement yesterday, SingPost said that it had completed the sale of its HDB shop unit in Marine Parade for $5.68 million.

Given that the property’s net book value is about $830,000, and factoring in agent commission and legal fees, this leaves it with about $4.78 million of gain on disposal.

The Marine Parade outlet will move to a nearby spot, details of which will be released at a later date, said a SingPost spokesman.

The new premises will also begin operations on Oct 16, she added.

Source : Business Times - 30 Sep 2006

SERVICE apartment operator The Ascott Group yesterday said it would open three more properties here by the end of 2008.

This will add about 500 service apartment units to its current portfolio, and is in line with the group’s plan to have 1,600 units in Singapore by 2010.

With the additions, Ascott will have 1,357 units in 13 properties here.

Of the three new properties, two will come under the group’s recently- acquired Citadines label, marking the European value-for-money brand’s first entry into Singapore.

Ascott operates service apartments under three brand names: Ascott, Somerset and Citadines.

The 148-unit Citadines Scotts will take the place of Hotel Asia in Scotts Road, which Ascott bought for $108 million in July, while the 160-unit Citadines Mt Sophia will be located at the Selegie Complex site currently being developed by Ascott’s parent CapitaLand.

The third property will assume the group’s top- tier Ascott label and have 154 units, all suites. Ascott will convert the Asia Insurance Building, which it paid $109.5 million for, into Ascott Raffles Place.

This will replace the group’s flagship property, The Ascott Singapore at Scotts Shopping Centre in Scotts Road, which Ascott sold to Wheelock Properties in June 2004. Ascott’s lease on that property was due to expire at year-end.

Ascott will spend $60 million in all to convert Hotel Asia and Asia Insurance Building into service apartments, the group said at a briefing yesterday.

It decided to refurbish the properties rather than tear down and redevelop them so that they can be opened sooner, said Ascott chief executive Cameron Ong.

Citadines Scotts will be opened by the middle of next year, while the other two will be ready in 2008.

This is to beat the onslaught of new hotel rooms that is expected in a few years’ time, with the Government releasing a slew of hotel sites this year, Mr Ong added.

He also said that Ascott Raffles Place will be injected into the group’s property trust ‘definitely within the next five years’. This fits Ascott’s ‘asset-light’ strategy to free up capital for new acquisitions.

As for Citadines Scotts, Ascott may explore other options, such as selling or developing it.

‘Property prices are still moving up, and Citadines Scotts is such a prime site, so I think Ascott has a lot of options for the property,’ he said.

Source : Straits Times -29 Sep 2006

CAPITALAND will buy Silver Tower in Cairnhill for $161 million, its second collective en bloc sale site in about a year.

Click here to view CapitaLand’s news release

Including an estimated development charge of $16.5 million, the price works out to $1,107 psf per plot ratio (ppr). Recent transactions in the same district include Orange Grove Condominium at $970 psf ppr and Grange Tower at $1,207 psf ppr.

In October 2005, CapitaLand bought Dragon View Park in River Valley for $128 million.

Patricia Chia, CEO of CapitaLand Residential Singapore, said that the company intends to build a 20-storey condominium with some 100 units.

CapitaLand’s other prime developments like the Botanic on Lloyd, Tanglin Residences, The Imperial and The Loft are all fully sold, she said.

For its latest development, the 73-unit Scotts HighPark, 13 units have been sold so far at an average price of $1,800 psf.

The Silver Tower deal was brokered by Savills Singapore. Its director of investment sales, Steven Ming, said that owners of the 38 units in the building stand to receive an average premium of 70 per cent above current market prices.

‘Strong interest for the site was received from both local and foreign developers,’ he said.

The initial price objective set by the owners of $168 million is also close to the transacted price.

The breakeven price is expected to be between $1,600 and $1,700 psf. Currently, new developments in Cairnhill include Cairnhill Crest, The Light @ Cairnhill and The Edge @ Cairnhill.

Cairnhill Crest has even reportedly achieved prices of $2,000 psf.

There are likely to be more old apartments put on the market. Mr Ming believes that there could be five projects in the Cairnhill/Emerald Hill area that are at various stages of en bloc sale readiness.

Source : Business Times - 29 Sep 2006