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From the age of 16, fitness firm CEO realised real estate was where the money was, and has stuck with it since

AT THE age of 30, Shanghai-born Annie Sun was already the owner of a string of properties in Melbourne, where she had been a student.

Her belief that real estate investments offered good returns over time sprang from her observation as a student that many rich people had made their money from property.

The lesson stuck. Now, the chief executive (CEO) of fitness and wellness firm Dynaforce - which distributes high-end gym equipment - has 80 per cent of her investments in property.

In a recent interview with The Sunday Times, Ms Sun, 38, recalled how, even at 16, she had wanted to own property.

‘Even then, I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties,’ she said.

Armed with a degree in hospitality and health sciences, Ms Sun hobnobbed with international celebrities and high rollers during her stint at Melbourne’s Crown Casino complex, where she managed the spa and fitness club. She worked in Hong Kong and Shanghai before coming to Singapore.

She never imagined that she would be a high-flying CEO herself one day, but the opportunity presented itself when there was a mass resignation at the Dynaforce Singapore office two years ago.

As a result of the 2006 crisis, the company’s chairman promoted her and put her in charge. She had become a design and spa consultant at one of Dynaforce’s units in 2004.

This year, the company generated a turnover of $15 million for the period to Oct 31. It manages 11 gyms in Singapore and has helped conceptualise the gyms in St Regis Residences and at various hotels including the Ritz-Carlton, Mandarin Oriental, Fullerton, Shangri-La and Hyatt.

Ms Sun, who is single, works out in the office gym three times a week and practises power yoga once a week.

Q What are your money habits?

A I save two-thirds of what I earn. Although I enjoy the finer things in life, I have learnt to moderate my needs these days, so I spend much less than when I was younger. I don’t carry much cash around, maybe $300 at a time, so I rely on credit cards. Since I eat out most days, I think hotel cards are a great invention.

During my Crown Casino days, money came easily. The high rollers gave generous tips when they came to the spa. I quickly saved up enough money to buy my first house by the sea in Melbourne.

Those were heady days. There was no financial planning. It was almost a given that if I showed up for work, there would be big tips and money coming in.

Q What financial planning have you done?

A I’m not a risk taker. Currently, about 80 per cent of my investments are in property and the balance is in a stock portfolio managed out of Melbourne. It is invested mainly in the Australian stock market and includes telecoms shares. I seldom monitor it.

I know I need to be more proactive in my financial planning, but I have been too busy to think about it. My bankers have been hounding me and I think next year will be a good time to sit down with them to work out a better plan. That will be my New Year resolution.

Q What about insurance planning?

A I have an investment-linked plan with AMP back in Australia. I’m insured for about $1 million. Apart from that, I have medical and travel insurance. My annual premiums top A$5,000 (S$6,340).

Q What are your property investments?

A At present, I have four properties, three in Melbourne and one in Singapore. One of my Melbourne properties is being rented out. This is a one-bedroom apartment in the prestigious St Kilda residential area. I bought it for A$380,000 in the late 1990s, for tax planning purposes.

Q Moneywise, what were your growing-up years like?

A I was never short of money. I always got what I wanted as I was the only child. My father’s family owned a textile factory in Shanghai. My mother came from a wealthy family. When money is handed to you easily, you don’t see its value.

My perception of money changed when I was alone in Australia before my family migrated there. I learnt how to live independently and had to take financial responsibility for myself. I learnt to budget and worked as a part-time waitress.

The experience taught me to believe in hard work. It is through making my own money that I enjoy real financial freedom.

Q What has been a bad investment?

A At Crown Casino, I saved up so much money that I was itching to try something new. The entrepreneur in me kept trying to emerge. The opportunity came when a relative in Shanghai asked me to join him in setting up a wine bar and fusion restaurant along the Shanghai Bund.

It was 1999 and Shanghai was starting to boom big time, so I thought the timing was perfect. I packed my bags and sold my beach house in Melbourne and moved to Shanghai. I bought that two-storey beach house in 1994 for A$300,000 and sold it for almost A$800,000.

After six months of fighting red tape and being cheated by my main contractor, who was also a distant relative, I threw in the towel and returned to Melbourne - A$400,000 poorer but much wiser. I learnt not to trust people easily and to read the circumstances and the business environment much better.

Q Your best investment to date?

A My best investment came when I was invited to become a shareholder in Dynaforce. It is an investment that I can take active control of to produce results for my team and myself. I have a 30 per cent shareholding currently and there are plans to list Dynaforce at a later stage.

Another good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.

Q What retirement plans do you have?

A I want to retire within 10 years, with $50 million in hand, so I can do more charity work and learn other things that I did not have the time or the opportunity to do before. I would be interested in charities that involve children and might even set up one if I can’t find a suitable one to contribute my resources to.

I plan to spend time in Melbourne, Singapore, Thailand, Bali and Shanghai.

Q And your home now is… ?

A I invested the profits from the sale of my apartment this year into a 1,400 sq ft, 99-year leasehold apartment, also around Mt Sophia. It cost $1 million.

Q And your car is… ?

A A dark-grey Porsche Boxster.

More value for money

‘I decided I needed to be smart and invest well, instead of relying on a monthly salary. I figured I could make more money from investing and collecting properties.’ MS SUN, on how she decided back in her student days to build her fortune

High returns secured

‘A good investment was my first apartment in Singapore, at 8 @ Mount Sophia, which I bought for $800,000 in 2004 and sold for $1.5 million this year. It is 1,100 sq ft in size.’MS SUN, listing just one of the properties she has made big bucks on.

Source : Sunday Times - 30 Dec 2007

Q WE RENTED out our house in April last year. We signed a three-year tenancy agreement prepared by the tenant’s agent.

As the property’s price has gone up a bit, we wish to sell this house. A potential buyer is willing to offer a price but does not wish to take over the existing tenancy agreement as he intends to live there.

After going through the tenancy agreement, I realise that something is amiss.

In the terms and conditions under ‘option to renew’, it states that the tenant is entitled to a three- year renewal on the same terms and conditions if the tenant makes a written request not less than three months before the expiration of the tenancy and if there is at the time no ‘existing breach or non-observance of any of the agreements and stipulations on the part of the tenant herein contained’ and ‘as long as the landlord remains unchanged’.

In another part of the terms and conditions, it says that ‘in the event that the landlord decides to sell the premises, the landlord or his agent will be permitted to arrange viewing of the premises at a reasonable time of the day by prior appointment giving one day’s notice. The landlord will have to sell with tenancy to the new purchaser’.

1. Can we break the lease? What is the penalty?

2. If the buyer takes over the tenant, does he have to sign a fresh tenancy agreement? What if he does not agree with the rental or terms and conditions?

A FIRST, the current period of the lease. You cannot break the lease unless there is a breach of any of the covenants. These covenants are usually spelt out in the Tenancy Agreement.

The most common covenant would be the duty for the tenant to pay rent. If he does not pay the rent on time or at all, it is a breach of the covenant which may entitle you to terminate the tenancy agreement. You will need to look closely at the provisions on whether you need to give notice to the tenant and to allow him a grace period to remedy the breach.

Second, the contractual obligation to renew the lease for a further three years at the same price provided (1) the tenant wishes to renew the lease and (2) he was not in breach of any of the covenants (that is, non-payment of rent) at the time he asks to renew the lease.

Insofar as this clause is concerned, it is a contractual term which you have agreed to and on which you cannot now renege.

A breach of the tenancy agreement is a breach of the contract. The loss payable to the tenant would be that which would put him in a position as if the tenancy had never been terminated.

This means that he is entitled to claim from you the additional rent he has to pay in order to get accommodation of the same or similar size and location. In other words, you would be liable to pay him for additional rent incurred for three years plus the remaining period of the current term.

To answer your second query, when a purchaser buys a property with tenancy, it means that he is agreeing to take over as the landlord from the last owner.

In other words, the tenancy will continue but merely with a new landlord. The terms cannot be changed.

In this case, a buyer needs to agree not only to buy the property, but also to the tenancy on the same terms as the current ones.

The clauses in this case are not usual and are not in the interests of the landlord.

Most tenancy agreements tend to be in the landlord’s favour and would include for example, a clause to say that whenever the landlord sells the property, the tenancy is deemed to be at an end and that there will be no recourse to the landlord for any loss incurred.

Doris ChiaConsultant Harry Elias Partnership

Advice provided in this column is not meant as a substitute for comprehensive professional advice.

Source : Sunday Times - 30 Dec 2007

THE Urban Redevelopment Authority (URA) yesterday said it will put up an industrial site at Playfair Road for public tender in about two weeks’ time after it received an application from a developer committed to bid at least $12 million for the site.

The price works out to about $52 per sq ft per plot ratio (psf ppr). But the site could fetch $80-90 psf ppr in the public tender, market watchers said. This works out to $18.6-20.9 million.

The 60-year leasehold site in the Paya Lebar area has a land area of 92,900 sq ft and a 2.5 plot ratio, giving it a maximum gross floor area of 232,200 sq ft. The site is zoned for ‘Business 1′ use and can be developed for a range of clean and light industrial uses and warehouses.

The site was made available for sale through the government’s reserve list system. Under this system, a site is only offered for public tender if the government receives an application from a developer who commits to bid for the site at a price deemed acceptable.

URA yesterday said it will launch the public tender for the site in about two weeks. The launch date will be announced later, it said. A tender period of about four weeks will be allowed for the site.

Demand for industrial space is expected to be strong going forward, analysts say. Rents and occupancy rates for industrial space are expected to continue growing in 2008.

Source : Business Times - 29 Dec 2007

I HOPE there can be some preventive measures to protect owners of condominiums which have failed in an en-bloc sale, or those who have spent substantial funds on upgrading.

In my condo in Clementi Park, there is renewed dissent by residents against the forming of yet another committee to try again for another en-bloc sale. Owners recently banded together to form an anti-en-bloc group called Save Clementi Park and have launched a website www.saveclementipark.com to save the condo. The web site features many pictures of the condo.

The en-bloc sale attempt last year failed to receive even 50 per cent of the vote. Immediately after this failed attempt, one committee was disbanded, but another one was formed in November this year. This has unsettled many of the residents and such social upheaval is becoming all too common in Singapore.

As a resident of the condo, I am not in favour of an en-bloc sale. En-bloc processes, to say the very least, are disruptive. Moreover, our condo is in the process of upgrading at a cost of $2 million. An en-bloc attempt after a majority of us have voted to upgrade would be a sheer waste of owners’ funds. Our upgrading will only complete around mid-2008.

There is no mechanism in place to deal with this. This is harmful to our societal psyche as stated by Mr Waleed Hanafi in his many website articles on en-bloc madness. Perhaps a time ban of, say, 15 years could be put in place for condos which have spent more than $500,000 for upgrading. Some balancing mechanism to reflect and honour decisions made by subsidiary proprietors should also be in place.

The en-bloc law needs to be reviewed.

Yeo Han Tiong

Source : Straits Times - 29 Dec 2007

It has been a spectacular year for the property market. The boom, after a long lull and slow recovery, was fast and furious as one mind-boggling record after another was set. JOYCE TEO recounts the record-busters

CapitaLand pays $1.339b for Farrer Court

CAPITALAND made history in June when it announced it was paying $1.339 billion for the former HUDC estate Farrer Court in a collective sale. This remains the biggest lump sum ever shelled out for a residential site in Singapore.

The sale is also the largest collective one ever in terms of land area and the number of units. Farrer Court has 618 units. Owners of each unit will get about $2.15 million depending on the size of their flats. The development sits on 838,500 sq ft of land near the junction of Farrer and Holland roads.

The sale propelled relatively small- sized Credo Real Estate into the big league of property firms.

The sale may have been the biggest lump sum paid, but Westwood Apartments - which was sold by Savills Singapore late last month - took the record in terms of the price per sq ft (psf) of potential gross floor area, at $2,525.

In all, about $12.5 billion worth of collective sales was done, 50 per cent more than last year’s $8.2 billion and far exceeding the $1.99 billion total in 2005.

This has made millionaires out of many. Some lucky owners got more than a few million dollars. Owners of the 24 units at The Ardmore, for instance, received about $11 million each. Owners of the two penthouses at Westwood will each get a whopping $17 million.

Horizon Towers hearing that went on and on

THE acrimonious $500 million Horizon Towers collective sale went through possibly the longest Strata Titles Board (STB) hearing ever before it was approved.

What was meant to be just another collective sale descended into a drawn-out, and at times dramatic, fight between the supporters and opponents of the sale, and the developers wanting to buy the plot.

The sale was thrown out by the STB over a technicality, making it one of the few applications ever rejected. It was then taken to the High Court, which granted the owners’ appeal, paving the way for the STB to approve the sale.

The Horizon Towers case involved an array of top lawyers. Majority owners knew they faced an unprecedented lawsuit for breach of contract by the developer if the sale had ultimately failed.

A group of objecting minority owners spent millions fighting the sale. But the estate was eventually sold to Hotel Properties and its partners Morgan Stanley Real Estate and Qatar Investment Authority, a year after they had inked the deal.

Marine Parade unit sold for $750,888

THIS title, for mainstream flats, was claimed by a five-room unit on the 23rd floor in Marine Parade that offers an unblocked view of the sea. The 32-year-old flat in a prized ‘point block’ right across from the East Coast Park was sold for $750,888 last month.

That is significantly more than the median price of a five-room flat in Marine Parade - $560,000 in the third quarter, up from $485,000 in the second quarter.

Still, higher absolute prices have been paid for executive flats, which are bigger and not as common as five-room flats. One of these, a 156 sq m high floor unit in Mei Ling Street, sold for $780,000 but cost less than the Marine Parade flat on a psf basis.

Property agents say such high-priced flats need to have the ‘X-factor’ in terms of surrounding amenities, views and so on.

Also, buyers willing to pay such big amounts are not your typical HDB flat dwellers or buyers. They are cash-rich and include home hunters flush with the proceeds of a collective sale, as well as those who have just collected their pension payout.

Orchard Residences home went for over $5,600 psf

THIS slice of downtown luxury is a penthouse unit at The Orchard Residences, the 175-unit leasehold condominium that is being built above the Orchard MRT Station.

The 53rd floor, 5,048 sq ft unit went for $5,600 per sq ft in October, or slightly more than $28 million.

This year, condo prices crossed the $4,000 psf mark and surged past the $5,000 psf mark for the very first time.

In comparison, last year’s price record - set in December by a unit in Marina Bay Residences - was only $3,450 psf.

It is not just units at The Orchard Residences that have scaled such stratospheric highs.

Other developments that have registered sales of above $4,000 psf include Hilltops, Ritz-Carlton Residences and Scotts Square.

Sentosa Cove, Nassim Road plots scale new highs

GOOD-CLASS bungalows have always been considered the creme de la creme of landed homes. That is, until the waterfront homes in Sentosa Cove came along.

Last month, two seafront bungalow plots in 99-year leasehold Sentosa Cove sold for a high of $1,696 psf.

Good-class bungalows, which need to be at least 15,070 sq ft in size and be located in gazetted areas have sold for up to about $1,300 psf.

However, even the heady heights of Sentosa Cove were topped in October when a bungalow that is smaller than a good-class bungalow in the posh precinct of Nassim Road was sold for a high of $1,899 psf, or $25.5 million in total.

Raffles Place rentals soar to $19.80 psf a month

ASKING rents at Republic Plaza in Raffles Place have reportedly hit a whopping $19.80 psf a month amid tight supply, up from just above $13 psf a year ago.

Cushman & Wakefield data showed that prime achievable office rents are now slightly above $16 psf a month on average, compared with around $8.50 psf per month a year ago.

Supply of office space was so tight that the Government came up with transitional sites to cater to demand. Sales of office units also rose.

Foreigners, PRs account for a quarter of total sales

FOREIGNERS and permanent residents went on a buying spree, sometimes scooping up nearly a whole residential project.

Knight Frank data showed that they chalked up 7,902 sales from January to November, which accounted for 24.9 per cent of total sales. These figures, said the firm’s research and consultancy head Nicholas Mak, are the highest in 13 years, thanks to healthy regional economic conditions, an increase in the number of expatriates as well as other factors.

Thai tycoon Charoen Sirivadhanabhakdi, for instance, bought 47 out of 48 apartments at Hoi Hup’s Suites @ Cairnhill for $205 million, or about $2,550 psf.

He also purchased four floors of apartments at The Orchard Residences for $135 million, or about $3,600 psf.

Institutional investors also entered the market in a big way, picking up anything from several units to whole condo blocks and even development sites. They include Macquarie Global Property Advisors, Goldman Sachs and United States-based Wachovia Development.

Source : Straits Times - 29 Dec 2007