SGHOUSING.COM 新加坡房地产网

River Valley location is big plus for new tenant ERC

The former River Valley Primary School looks set to be transformed into a hub for temporary offices, providing much-needed relief in the face of the office space crunch in the Central Business District (CBD).

Tenancy for the site, a stone’s throw from Great World City, was awarded to ERC Holdings by the Singapore Land Authority (SLA).

ERC, a local company that trains and funds business start-ups, beat out three others when it submitted the highest monthly rent of $75,555. The lease is for an initial term of three years, renewable up to 2013.

With a land area of about 17,600 sq m, ERC plans to convert the school’s former classrooms into a cosy office building — with well-furnished offices, designed to meet tenants’ different spatial needs.

Amenities such as F&B outlets, meeting and training rooms will dot the compound. Ample parking space will also be provided.

Chief executive Andy Ong said response to ERC’s plans has been “immediate and pretty intense” — even though news of the winning tender was announced only yesterday.

Already, ERC has received four enquiries, including one from an established bank which, according to Mr Ong, is keen to move its back-offices to River Valley.

“The site has everything,” he told Today. “It is in a convenient location — two minutes away from the city area, yet outside the CBD and ERP areas.”

ERC wants to invest up to $5 million to refurbish the property and put in air-conditioning, with plans to occupy half of the site and sub-let the rest.

It expects to draw rentals of between $4 and $5 per square foot (psf), and aims to have the first tenant move in by the end of September.

Analysts say tendering out state buildings will give companies a cheaper option outside the CBD, where rentals have hit record levels of more than $10 psf.

The SLA is also evaluating bids received for three other buildings, and has launched three more for tender, to alleviate the acute office space shortage in the city.

The SLA said there was strong bidding for office space in the latest exercise. For example, the former CPIB Building at Cantonment Road attracted 15 bids — the most ever for a SLA public tender for the rental of state property.

The bid amounts ranged between $27,000 and $91,731, with the highest from Bravo Building Construction — 68.6 per cent above the guide rent.

Chesterton International Property Consultants’ research director Colin Tan said the temporary office space released would provide relief for small and medium enterprises “forced out” of the city area by rising rentals.

Source : Today - 8 Jun 2007

Two parties I knew bought into a Katong condominium for different reasons. One, a bachelor who never lived there, collected a windfall he had anticipated on an en bloc sale. The other, a couple, had spent heavily on doing up a dream home that they had not sufficiently enjoyed. Had they objected to the en bloc sale, they would likely be in a minority derided for a foolish sentimentality. Before 1999, an en bloc proposal required 100-per-cent agreement among the owners. Technically, the old lady who preferred the familiarity of her environment or wanted to live near her relatives could prevent her neighbours from becoming millionaires. The law was amended to allow an 80-per-cent majority to decide the fate of the minority.

What rights, then, do the minority have but the opportunity to cast a dissenting vote?

Is majority rule a fair yardstick when it can literally push someone out of their home, albeit under what most people would deem propitious circumstances?

Many societies thrive on the making of decisions that benefit the majority, from electing a government to small group commitments as personal as deciding on a venue for dinner. Without this mechanism, life may come to a standstill or there may be chaos. The question is whether this seemingly “as fair as it can get” principle should be applied to every situation.

All arguments distilled, it comes down to deciding whether the minority in a situation like this deserves protection.

In the wider context of a multi-racial, multi-cultural and multi-religious society like Singapore’s, it is easy to understand the importance of upholding minority rights.

Prime Minister Lee Hsien Loong recently assured minority communities that they will have the space to keep their heritage alive and not feel pressured by the dominating community.

In fact, a hallmark of Singaporean success lies in the acceptance, tolerance and promotion of diversity.

However, less visible is the recognition — or non-recognition — of the minority rights of communities defined by different factors, whether social, physical or sexual. Examples are the physically disadvantaged and working mothers.

Dissenting property owners to an en bloc proposal form an even more ambiguous segment.

For many people, buying a home is a once-in-a-lifetime experience. It would, therefore, be callous to consider an en bloc proposal solely as a matter of the mind and nothing of the heart, toting up the numbers on the profit to be gained.

The couple I mentioned were far from thrilled with the little profit they may make. Unlike the bachelor, they did not have the luxury of time to wait for the next trough before buying a replacement home.

Hence, this minority deserves some measure of consideration, if not protection. For example, ensure a minimum age of the property before it can be eligible for en bloc sale, so that prospective buyers, whether speculators or residential owners, are not blind to its possibilities. Another option is to allow a minimum dwelling period for any owner.

Fundamental to the issue of minority rights must be the respect of individual freedom that does not become criminal or result in others being disadvantaged as a consequence.

In an en bloc proposal, it is a moot point whether pecuniary benefits outweigh emotional considerations. If it is as clear-cut as deemed by many people, why peg approval to a 80-per-cent majority? Would not a simple majority, even if it is by one, have been sufficient?

Buyers of a strata development would have been spared all that angst if, on day one, they are made aware of an en bloc contingency by majority rule.

It is another matter, then, if you ask what price a place you call home, if you have to live with that uncertainty?

Source : Today - 8 Jun 2007

Being an Australian expatriate living and working in Singapore for the past 10 years, I have found myself in a position where the rental on my current condo unit will be increased from $1,900 a month to $3,500.

Most of us know that paying this much in rental is nothing short of pointless and a complete waste of hard-earned money. So, like almost all of my expatriate friends, I have decided to buy rather than rent. I decided to make appointments with all of the major banks in Singapore and get an idea of what kind of loans are available and see who offers the best rates and loan package in town.

Having purchased property in Australia, I was keen to find out how competitive banks were in Singapore and to arrange a similar loan to what I have there.

About 10 years ago, a housewife in Queensland, Australia, discovered that if you were to pay your home loan repayment fortnightly and not monthly, you could reduce the life of your loan from 20 years to 12 years (based on an average loan amount). The banks in Australia had been hiding this fact from the consumer for decades. Not a single one had any provision for fortnightly payments.

For example, you owe the bank a monthly repayment of $2,000. Instead of paying $2,000 at the end of the month, you pay $1,000 each fortnight, and so reduce the amount of interest calculated on at the end of each month. Over time, this adds up to a huge saving in interest payments over the life of the loan and will bring about the end of the loan years sooner.

So, why do banks in Singapore not offer this? Simple. They would lose hundreds of millions of our hard-earned dollars in interest payments. Hence, their profits will drop.

In Australia, when the news of the benefits to consumers of this repayment method hit the media, major banks scrambled to cut off the defection of hundreds of customers to smaller banks offering this service.

Today, every major bank in Australia offers the service and even sets up simulators to show how you can cut your loan in half with fortnightly repayments.

When I asked each of the loans officers in Singapore why they did not offer this service, I received a sheepish grin and a shrug. I am sure many home owners here will be very keen to know why fortnightly repayments — offered by most banks in the world today — are not available?

When can we expect this service to become available so that we can look forward to saving possibly hundreds of thousands of dollars in interest payments to banks that post huge annual profits partially due to our home loan repayments?

Letter from Bruce Harvey

Source : Today - 7 Jun 2007

Indons lead buyers, followed by M’sians, Aussies, Brits and Indians

FOREIGNERS bought 241 private apartments and condos in the subsale market during the first quarter of this year, up 35 per cent from the preceding three months and the highest figure since 1996, according to DTZ Debenham Tie Leung’s analysis of caveats captured by Urban Redevelopment Authority’s Realis system.

Higher Share

The 241 subsale condos/apartments foreigners purchased in Q1 2007 gave them a nearly 36 per cent share of the total of 673 non-landed private homes purchased in the subsale market during the quarter. This is a much higher share compared with foreigners’ overall 27 per cent share of total private home purchases in the same period.

DTZ in its report suggests the increasing foreign subsale interest may mean that foreigners are turning to the subsale market to buy homes because they may have less access to high-profile launches in the primary market. ‘However, of greater significance is the fact that it also reflects their confidence about the investment potential of quality projects in Singapore,’ the study added.

Subsales, often seen as a gauge of speculative activity, refers to secondary market deals - properties not bought directly from developers - in projects yet to receive Certificate of Statutory Completion.

The Sail @ Marina Bay and Icon were among the projects that attracted relatively strong foreign buying in the subsale market in Q1. Foreign buyers accounted for 36 per cent, or 24 of the total 67 units at The Sail transacted in the subsale market in Q1 2007. Foreign purchasers also made up 25 per cent, or 18 of the 72 Icon units purchased in the subsale market. Other projects favoured by foreign buyers in the subsale market during the quarter included Sky @ Eleven in Thomson, The Cosmopolitan at River Valley/Kim Seng roads, Twin Regency at Kim Tian Road and Watermark at Robertson Quay.

DTZ observed that foreigners also upped their subsale purchases for high-end apartments/condos in the first three months.

At 26 per cent, Indonesians accounted for the lion’s share of foreign buyers of subsale apartments/condos, followed by Malaysians (21 per cent share) Australians (10 per cent), United Kingdom nationals (8 per cent), Indians (7 per cent), Koreans (5 per cent) and US citizens and mainland Chinese (with 3 per cent share each).

Historically, the highest levels of foreign buying of subsale condos/apartments were recorded in Q4 1995 (485 subsales), Q1 1996 (329 subsales) and Q3 1996 (321 subsales).

The total 673 subsale apartments/condo deals (involving buyers of various nationalities including Singaporeans) in the first quarter was 18 per cent higher than the preceding quarter and just over six times the 111 subsale deals done in Q1 2006.

The latest subsale figure was 8 per cent shy of the previous high recorded in Q2 1999, when 735 non-landed private homes changed hands in the subsale market. The highest figure ever reported was 1,653 in Q2 1996, at the peak of speculative fever in the mid-nineties. The 673 caveats lodged for subsale apartment/condo deals in the first quarter made up 11 per cent of total caveats lodged for non-landed private homes (comprising both primary and secondary market transactions) during the period. During the first three quarters in 1995, subsales made up 30 per cent or more of deals.

The median subsale price fell 2 per cent quarter-on-quarter to $1,005 psf in Q1 this year. However, it was still 65 per cent higher than the $609 psf posted in Q1 last year.

DTZ’s report also said the momentum in the subsale market is expected to keep up, particularly for high-profile projects, with likely support from foreigners increasingly positive about the potential of the Singapore residential property market. ‘However, the subsale market is expected to be increasingly competitive as choices increase,’ the firm added.

Source :  Business Times - 7 Jun 2007

CITIGROUP Investment Research expects prices of private homes to climb 20-25 per cent this year - substantially more than the 12-15 per cent increase the bank predicted just a couple of months ago in April.

Home prices rose 10.2 per cent last year.

This year, rents as well as prices are likely to continue to surge as the supply of rental property dwindles, Citigroup said in a research note yesterday.

Net negative supply in the first quarter - about 880 units were demolished but only 716 units were completed - coupled with strong demand of 2,225 units pushed the occupancy rate to a record 94.9 per cent, the note said.

Property analyst Wendy Koh believes strong demand was due to strong employment, drawing foreign workers here. As many as 48,000 jobs were created in the first three months of 2007. Citigroup expects the residential occupancy rate to rise to new records of 96.6 per cent and 97.2 per cent by end-2007 and 2008 as supply continues to tighten.

Only 4,573 units are scheduled for completion from April to December 2007, Citigroup estimates. In 2006, about 3,500 units were affected by en bloc sales. Assuming 2,700 units are demolished from April to December, the net increase in supply for 2007 is likely to be just 1,700 - versus demand of 8,000.

Ms Koh also believes fewer units will be ready in 2008 and 2009 than the Urban Redevelopment Authority’s estimates of 6,600 and 10,600, as not all units are under construction yet. This will support a further rise in occupancy rates to above 97 per cent in 2008, she said.

Ms Koh also said as rents continue to outpace price rises, rental yields in the broader market - particularly the mass market, where price rises have lagged - will continue to rise. The current gross rental yield for mass market properties now averages 5.3 per cent, versus 5 per cent six months ago and 4.5 per cent a year ago.

‘Such yield improvement will start to attract some investors into the mass market segment, especially given that rents are likely to continue to surge as the occupancy rate continues to reach a record high,’ she said. Positive sentiment and strong affordability among first-time buyers is also likely to drive prices sharply higher in this segment, she predicts.

The report has ‘buy’ calls on Allgreen Properties, City Developments and Keppel Land and a ’sell’ call on CapitaLand.

Source :  Business Times - 7 Jun 2007