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Two-week session to give final word on en bloc sale application.

The Horizon Towers saga goes back on the boil today when the majority owners’ application for a collective sale is again heard by the Strata Titles Board (STB).

The hearing, scheduled for two weeks, will be the final word on whether the en bloc sale goes through - and on a battle of wills between the project’s majority and minority owners.

The minority owners will take this final opportunity to scuttle what they say is a deal done ‘in bad faith’.

Their lawyers have repeatedly said that they have plenty of objections to the sale that they have not yet aired. It is believed that these range from alleged non-compliance with the law governing en bloc sales to the sale being prejudicial to the minority owners.

‘We have quite a few arrows we still haven’t shot,’ lawyer SK Phang, who represents a minority owners, has said.

The minority owners’ objections have stalled the en bloc sale. On Aug 3, the STB dismissed the majority owners’ application on the grounds that it was incomplete and the accompanying statutory declaration false, because it was missing three signature pages. This was before the STB had heard the merits of the case.

The STB’s decision was then overruled by the High Court, which said this month that the missing pages did not constitute a substantial omission that prejudiced the minority owners. The court sent the application back to the STB.

Today’s STB hearing picks up where the previous hearing left off in August. Over the next fortnight, the parties will call witnesses and present evidence to support their opposing claims on whether the collective sale application complies in form and substance with the law and whether the sale was conducted in good faith.

But this time majority owners are unlikely to collaborate with minority owners. At the previous STB hearing, majority and minority owners were seen hugging one another and celebrating the board’s decision to dismiss the application.

Several majority owners - after signing the deal to sell Horizon Towers for $500 million in February - regretted their decision when neighbouring developments began fetching much higher prices. They circulated anonymous flyers to other majority owners, asking them to rescind the deal.

The move transformed what would have been a run-of-the-mill en bloc sale into the drawn-out battle it has become.

But this time around, it will be in the majority owners’ interests to push the collective sale through. The buyers - Hotel Properties and its partners - have slapped a $1 billion lawsuit on them.

Angered by some majority owners’ attempts to sink the sale, HPL and its partners filed a suit in the High Court claiming damages of up to $1 billion, saying that the sellers had failed to honour their part of the bargain.

The suit has been stayed until the STB hearing is concluded. But HPL and its partners have indicated that they could revive the proceedings if the collective sale falls through.

HPL and its partners have been excluded from the STB hearing, after their application to intervene was dismissed recently.

Source : Business Times - 30 Oct 2007

He says Friday’s measure will inject some market reality.

Prime Minister Lee Hsien Loong yesterday said the government will continue to monitor property market trends closely and take further action if necessary.

His remarks come shortly after Friday evening’s announcement on the scrapping of the deferred payment scheme for property purchases, which Mr Lee described yesterday as a step that will ‘help to dampen excessive speculation and help to inject some reality into the market’.

Touching on various facets of property in Singapore, Mr Lee said that the government will also inject more office space into the market over the next two to three years to boost supply for the sector, which is facing an acute shortage of prime office space because of strong growth.

The government is also releasing more land for executive condos (ECs), a hybrid of public and private housing, Mr Lee said in his speech at the NTUC National Delegates’ Conference yesterday morning.

‘But more fundamentally than the ups and downs of the property cycle, the government is committed to keeping housing affordable for Singaporeans, for all Singaporeans,’ he stressed.

‘We will continue to monitor the property market carefully and watch the trends and if necessary, we will continue to take more action. And therefore we will be able to make sure that the property market stays in balance over the long term.’

To keep public housing affordable, the Housing and Development Board is building more flats. And to cater to the aspirations of Singaporeans who aspire to own a private condo unit, the government will step up the supply of land for ECs. This housing form was first introduced in 1996, at a time when private home prices were running away.

ECs cater to the ’sandwich’ class of home buyers who cannot afford private housing but whose monthly household income is high enough to disqualify them from buying new flats in the public housing segment.Related link: Click here to read the full text of PM Lee’s speech

However, as the property market slumped and private home prices fell, the need for ECs diminished and the government stopped selling land for EC development. But the Ministry of National Development has re-introduced ECs into the Government Land Sales Programme, with a plot in Punggol that will be made available through the reserve list next month.

Source : Business Times - 30 Oct 2007

THE property sector is agog at the Government’s withdrawal of the deferred payment option for buyers. Should the industry be surprised? Dismayed? Hardly. Developers and property consultancies, not to forget flip artistes, had for a couple of months been expecting the guillotine to drop as the data showed an impressive churn rate in sub-sales of condominiums was holding even after an assurance was given of adequate supply. The fact that supply has a gestation of about two years has been the inherent weakness of moves to pace the market evenly. These have included land sales and raised development charges. National Development Minister Mah Bow Tan was the model of caution when saying the scrapping of deferred payments was called for as there were ’signs’ real estate was overheating. He has to balance nurturing sentiment in a sector recovering from a decade-long slump, while punishing the cowboys whose punts drive up property prices which in turn feed through to business costs. Prowling speculators, the prime target of the move, should have been chased off months ago. They serve no verifiable market function except to warp prices and cause anxiety to serious purchasers. Speculators’ influence on price in premium developments has been noted by developers. The move to discourage speculation indicates the Government figures the line between a stable market and bubble conditions is being crossed.

Would this be enough? What if the speculative element is barely blunted? The time lag between the downpayment and the first progress payments is long enough for those with a decent cash reserve to continue playing the system. Third-quarter URA data showed a drop of one-third in primary market sales over the previous quarter, part of the worldwide fallout on account of the United States sub-prime mortgage crisis. But prices still climbed by 8.3 per cent. Little wonder then that the trade might be bracing itself for the Government’s use of a blunt tool, the return of the capital gains tax last seen in the 1996 boom. Such a tax used in tandem with an end to deferred payments is sure to knock out speculators. But, careful. It can be the imperceptible tip into a wholesale withdrawal by institutional buyers, foreign individual purchasers as well as local and foreign group investors who are key elements in holding real estate values. The last time it was used to cool the market, it came ahead of an unforeseen downturn. The combined effect sent the market into an unintended chill, from which it has taken a long time to recover. So, for now, watch if speculators who exhibit nothing but dollar signs and a smirk on their faces make a dash for the door.

Source : Straits Times - 30 Oct 2007

1 vehicle lane to make way for wider walkways in $40m makeover.

CARS will have to make way for pedestrians along a stretch of Orchard Road as part of a $40 million makeover of Singapore’s premier shopping belt.

Work on the changes will start in February and be complete in April 2009.

By then, the extreme-right vehicle lane will become part of a wider pedestrian mall in the 270m stretch from the front of the new Ion Orchard and Wisma Atria.

Another 150m stretch in front of the Meritus Mandarin will also be given a wider walkway, but the Land Transport Authority has not decided whether this will also involve closing down one lane of the road or just a narrowing of the existing five lanes.

Besides the widening of the walkways, the makeover will also introduce new plants, ambient lighting, new paving for walkways and new street furniture.

Spaces such as the one created in front of Wisma Atria by the closing down of one vehicle lane will give pedestrians places to rest and catch performances.

More than seven million tourists visit the shopping belt annually, making it by far Singapore’s most popular attraction.

The overhaul was announced as early as 2004 to prevent Singapore’s premier retail street from losing its shine.

Plans included the sale of vacant sites for new malls, sprucing up the pedestrian experience and wooing more exciting retail concepts to set up shop there.

Sites like Orchard Turn and Somerset Turn, since sold, are being developed.

And yesterday, Singapore Tourism Board revealed details of how a walk down the shopping street will be made more pleasant.

STB’s assistant chief executive for leisure Margaret Teo said that lighting fixtures will be installed to illuminate Orchard Road’s lush greenery.

Three distinct zones, characterised by flower, forest and fruit themes, will also be created from Tanglin Mall down to Le Meridien, to add variety.

Retailers along the strip hailed the news of the makeover.

Hilton Singapore’s director of sales and marketing Ailynn Seah, referring to the excitement whipped up over Marina Bay with the coming of the integrated resort and the Formula One race, said: ‘A lot of attention has been put there of late. But these changes will put Orchard Road back on the map.’

Paragon’s deputy general manager of marketing Patrina Tan added that although this is a ‘good starting point’, ‘eventually, good service levels at the shops are what will set us apart’.

When asked how the loss of one vehicle lane would affect traffic flow down the busy road, the Land Transport Authority’s director of community partnership Chandrasekar Palanisamy said it would not affect traffic adversely, since the right-most lane is now not used much anyway.

Knight Frank’s director of retail Danny Yeo said that if one lane of traffic could be shut down, features like a tram or cable car to transport people from one end of the strip to the other could also be incorporated. Better signs are also needed, he said.

‘Tourists now think of Orchard Road as just Orchard MRT station. But that is not it. There is Somerset MRT too, an area which will become very powerful once the new developments there open.’

Source : Straits Times - 30 Oct 2007

THE Government is watching the property market ‘carefully’ and taking steps to ensure it does not overheat.

It will inject more prime office space into the market over the next two to three years, said Prime Minister Lee Hsien Loong yesterday.

And for those worried they have ‘missed the boat’ in the current residential property boom, he had this message: Don’t worry, there is enough land for affordable housing for all Singaporeans.

Speaking at the NTUC National Delegates Conference, Mr Lee highlighted two property segments ‘of concern’: prime office space and residential property.

Office rents have soared with strong economic growth, he noted. The financial and business services sectors are expanding, while many new businesses are moving in from the region and the West.

‘They’re wanting to grow their business in Singapore and we’re unable to meet it,’ said Mr Lee.

To ease the squeeze, the Government will increase supply. ‘We hope we’ll be able to inject more office space into the market over the next two or three years, not just to stabilise the office space market but provide the capacity so lots more businesses can come set up in Singapore and grow our economy.’

In the home market, Mr Lee noted the scrapping of the Deferred Payment Scheme for buyers of upcoming private homes.

No longer can they just fork out 10 or 20 per cent of the price and defer payment of the rest till the project is done. Now, they have to make periodic payments as construction progresses.

Mr Lee said the move will ‘help to dampen excessive speculation and inject some reality into the market’.

He reiterated that the Government ‘is committed to keeping housing affordable for all Singaporeans.’

The HDB is building more flats. The Government will offer more land for executive condominiums to help middle-income families who do not qualify for HDB flats.

‘We’re convinced we will be able to provide good housing for all Singaporeans over the medium to long term. There is enough land in Singapore. There is no need for anybody to get alarmed that this is the last chance and, if you don’t get on, you’ll miss the boat,’ said Mr Lee.

Looking ahead, the Government will continue to ‘make sure the property market stays in balance over the long term’, he added.

Source : Straits Times - 30 Oct 2007