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Suntec REIT has posted a 22 percent growth in its full year distribution income to S$115.4 million.

For the fourth quarter alone, distribution income was also up 22 percent to S$30 million.

This will mean a distribution per unit of 2.12 cents for the three months to September.

Suntec REIT said the committed office occupancy at Suntec City strengthened to 99.8 percent at higher rental rates.

Buoyant demand for office space boosted the committed occupancy for Park Mall to 100 percent.

Source : ChannelNewsAsia - 29 Oct 2007

Mid to mass market may be hardest hit as some projects see 50% opt for scheme.

The withdrawal of the deferred payment scheme (DPS) for property purchases may quell demand in the short term, but will not deal a fatal blow to Singapore’s residential market, says Goldman Sachs.

The investment bank also expects negative investor sentiment on property developers in the short term, but kept its ‘buy’ on GuocoLand and a positive view on real estate investment trusts (Reits).

Goldman Sachs Global Investment Research’s report is among the first to be made available after the government announced last Friday that it was removing a scheme that allowed the bulk of payments for property purchases to be deferred till the project was completed.

Goldman said that parties that are likely to be affected by the move include property speculators, foreigners buying Singapore properties here and ‘buyers who are stretching their affordability to buy a property’.

The bank says that the key test bed for the negative impact is the mid to mass market, even though the prime to luxury end of the residential market will be affected as well.

This is because ‘there are projects in this segment where over 50 per cent of purchases are accounted for by buyers opting for the DPS route’, and ‘the need to secure financing upfront will cause buyers in this segment to hesitate in committing to buying’.

However, its analysts see certain mitigating factors like strong job creation and economic growth, which supports a positive long-term outlook on this segment.

In the short run, the pace of new launches and take-up of new launches are expected to slow over the next three to six months as property prices are likely to come under marginal pressure.

Goldman said that this would result from undiscounted selling prices, which could have been set higher using DPS, negative impact on certain pools of demand and negative impact on sentiment.

Indeed, the removal of DPS raises the risk of government intervention to curb rising property prices, the report added.

‘Given such a backdrop, we foresee developers being less aggressive in recycling monies earned from successful launches into beefing up residential land banks,’ it said.

Hence, its analysts have trimmed their forecast residential selling prices by around 3-4 per cent, assuming flat prices in 2008 as well as slower growth going forward.

‘We also remove the 10 per cent premium to return on net asset value, where applicable, to reflect a more murky picture on developers recycling capital to expand land bank.’

Against this backdrop, Goldman kept its ‘buy’ on GuocoLand with a price target of $6.20 as ‘we continue to like the China projects and find valuation attractive’.

Also, it maintains its ‘neutral’ stance on CapitaLand, City Developments and Keppel Land with price targets of $8.30, $15.70 and $8.90 respectively.

Source : Business Times - 29 Oct 2007

Singapore property plays likely to be hurt by govt move to curb overheating.

PROPERTY stocks are likely to come under selling pressure today, following last Friday night’s news that the Government will scrap the deferred payment scheme to slow down overheating in the property market.

The move, which took place with immediate effect, will affect private properties that have yet to be completed.

Analysts say the withdrawal of the deferred payment scheme is aimed at discouraging speculators from entering the market and driving up home prices.

This may result in a temporary cooling of the market.

‘This will definitely affect sentiment, and make property shares less attractive for the time being, but it will not spark a panic selling,’ said a remisier.

‘The initial impact will be there, but it is only temporary. Developers are still holding their prices very high.’

Smaller developers are likely to be more affected, as they have a greater proportion of lower-end projects. Bigger developers have a good balance of high-end projects that can attract foreign investors, who do not usually required deferred payment on their property purchases.

Still, property bellwether stocks such as CapitaLand and City Developments (CDL) will be closely watched to gauge market reaction.

Property counters had a sparkling run last Friday before the withdrawal of the deferred scheme was announced. CapitaLand rose 25 cents, or 3.2 per cent, to $8.05, while CDL jumped 70 cents, or 4.5 per cent, to $16.30.

Meanwhile, bank stocks may even gain from the curb on deferred payment as buyers of uncompleted homes will now be seeking loans from banks instead of waiting two to three years till their homes are completed.

Property counters aside, the overall market sentiment is expected to remain bullish. Support for the benchmark Straits Times Index is expected following a solid showing from Wall Street last Friday.

Regional markets are bullish on expectations of a US interest rate cut when the United States Federal Reserve meets over the next two days.

‘Expect another last- minute short rally, until there is a direction from the US,’ said a trader.

Asian bourses mostly closed higher last Friday, with Hong Kong’s Hang Seng Index being the star of the show - jumping 3.2 per cent for the week to close above the 30,000-point barrier.

But a Citigroup report last week noted that a slowdown in the US will have a great impact on Asian markets, especially Singapore and the Asean region.

‘Decoupling is highly unlikely,’ according to a report by three Citigroup analysts. ‘Asian equity markets are the most correlated to the US and Europe that they’ve been in 30 years.’

COOLING EFFORTS

‘The initial impact will be there, but it is only temporary. Developers are still holding their prices very high.’A REMISIER, on the withdrawal of deferred payment probably having a temporary effect

Source : Straits Times - 29 Oct 2007

Move may have initial dampening effect but experts say it will chase away only speculators

MARKETING manager Simon Loh has put an abrupt halt to his house hunting.

The 38-year-old had been looking for a new place for the last six months, but now that he cannot defer payments until the new apartment is ready, he has had to shelve his plans.

The Urban Redevelopment Authority announced on Friday that buyers of uncompleted private homes and offices will no longer have the option of using a deferred payment scheme.

This allowed home buyers to pay as little as 10 per cent of the purchase price upfront, footing the rest only when the property is ready.

All buyers now will have to use the progressive payment scheme where they pay between 5 per cent and 25 per cent of the purchase price every few months.

Mr Loh, who currently has to pay the bank a monthly mortgage of $1,300 on his condominium unit in Yio Chu Kang, cannot afford to take up another loan to buy a new home in town.

‘I’ll have to drop the idea, but I could have done it with the deferred payment scheme,’ he said.

Other house hunters are also thinking twice.

Sales manager Lawrence Chen, 35, who has been looking for a terrace house since last year, said he has to be ‘more conservative’ now.

Some buyers, though, are not affected by the change, saying they will just have to take up bank loans earlier.

IT manager Daniel Lim, 36, who was at a showflat in Paya Lebar, said: ‘You still have to pay for the property eventually.’

Typically, a buyer who chooses to take the deferred payment route is charged between 3 per cent and 5 per cent more than one under the progressive scheme. Still, property agents say up to 90 per cent of their buyers take up the deferred scheme.

They agree that removing the scheme will achieve the Government’s aim of driving away speculators. But the agents believe low-budget buyers could also be hit.

ERA Singapore assistant vice-president Eugene Lim said: ‘The mass market projects will be most affected because buyers there could need the three years’ construction time to build up their funds.’

But most agents believe the market will remain strong.

Property developers believe the move would have a slight initial dampening effect on sales, chasing away speculators but not buyers.

They are not taking measures, like lowering prices, to counter the new rule.

Singapore-based developer Chip Eng Seng, which will launch CityVista Residences in Peck Hay Road in about two weeks, said: ‘There are many genuine buyers and though they may be more cautious initially, the demand’s still strong.’

Source : Sunday Times - 28 Oct 2007

Property agent sister of condo owner pockets $30,000 in deposits from two buyers; now one of them is suing her to get back $25,000

HER sister had given her permission to sell her private apartment in Sengkang.

But the woman, herself a property agent, managed to ’sell’ the condo unit to not just one, but two buyers, pocketing $30,000 in deposits from them.

Now, one of the buyers is filing a lawsuit against her to retrieve the $25,000 he paid to the woman.

A police report has also been filed against her by one of the property agents who brokered the deal.

But the woman says she did nothing wrong and pins the blame on the other two agents involved instead.

In May, she approached two property agents separately to help her market her older sister’s apartment at Rivervale Crest. Her sister is said to be working in Australia.

The woman is said to be in her 30s and is married, with one daughter from a previous marriage. She is also a discharged bankrupt.

She wanted $570,000 for the apartment.

This is where the two sides’ stories begin to differ.

The agents claimed she collected cheques for payments of 1 to 5 per cent of the condo’s sale price but would delay returning the option-to-purchase (OTP) documents to the buyer until the date had expired.

The date usually expires after two weeks.

Then, she would claim the buyer did not act promptly and must forfeit the payments they had made to her.

By then, she had already banked in the cheques.

One of the PropNex agents involved in the deal, Mr Mohd Rasheed Othman, said he had known the woman for a year, having co-brokered a property with her before.

‘She knew the tricks of the trade and used her knowledge to cheat others,’ alleged the 32-year-old.

Mr Mohd Rasheed visited the Sengkang apartment after his buyer complained. There, he met her aged parents, who were shocked that their daughter was selling the apartment.

He said: ‘Her parents had no idea she was selling the apartment. They were living there as per normal.’

Her reply: My parents have nothing to do with the apartment.

The other agent, Ms S.N. Lee, 30, said the woman would come up with excuses to delay returning documents and would avoid phone calls.

She said: ‘She’d insist on meeting at ridiculous times, in the wee hours of the morning. Sometimes, she’d even tell me to collect important documents from her shoe rack.’

Most of the time, the two agents would communicate with her by SMS.

When contacted by The Sunday Times, the woman claimed that the accusations against her were not true.

She said she did not want to go ahead with the first transaction with Mr Mohd Rasheed because he had cheated her by selling her apartment for $510,000, instead of $570,000 as promised.

‘I’m the victim here,’ she said.

She also claimed he gave her a blank OTP document to sign.

This document usually states how much the property is sold for. Sellers would have to agree to the price stated before signing.

As for Ms Lee, she failed to act promptly, said the woman, and allowed the OTP date to expire. By the woman’s reasoning, the $5,350 deposit paid by the buyer is now rightfully hers.

PropNex has returned this $5,350 deposit to the buyer on a goodwill basis.

The police confirmed that a report has been made against the woman and they are investigating.

This is not the first time someone has sold a property to multiple buyers.

In 1996, a bankrupt cheated eight people of $20,000 in all by pretending to sell his Ang Mo Kio HDB flat to each of them.

The victims, who paid between $1,000 and $5,000 as deposits, found out they had been conned only when they handed their resale agreements to the HDB. The conman was given eight months’ jail. 

Source : Sunday Times - 28 Oct 2007