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The Urban Redevelopment Authority has launched 11 land parcels at Sembawang Road and Andrews Avenue for sale for landed housing development.

This is the second phase of the planned Sembawang Greenvale estate.

It is one of the eight residential sites on the confirmed list announced under the Government Land Sales Programme for the first half of 2008.

The estate will have a mix of landed housing including bungalows, semi-detached and terrace houses.

Phase 1 of Sembawang Greenvale, which consists of 12 land parcels with a total of 57 units, was successfully sold in October 2007.

The 11 land parcels under Phase 2 will be sold on 99-year leases.

A public auction will be held on April 22.

Source : ChannelNewsAsia - 29 Feb 2008

Fair value gains as a result of a revaluation of properties has boosted the full-year earnings of Singapore Land by 1,252 percent.

It posted net earnings of nearly S$1.4 billion, compared with S$121 million in the year-ago period.

Revenue rose 34 percent to S$271 million.

This was due to the contribution from its Pan Pacific Singapore hotel operations and higher rental income.

Singapore Land expects the office and retail rental market to remain buoyant in 2008 because the Singapore economy is forecast to grow moderately and office supply will continue to be limited.

However it is more cautious about the residential property space, amidst the current turbulent global financial environment

Singapore Land is recommending a first and final dividend of 20 Singapore cents per share.

Meanwhile, its parent company United Industrial Corp reported a 139 percent rise in its net profit for the full year to S$1.2 billion.

This is on the back of a 62 percent rise in revenue to S$528 million.

Source : ChannelNewsAsia - 29 Feb 2008

Developers will have to pay more to redevelop non-residential sites such as hospitals, hotels, shops and warehouses.

They also have to pay marginally more to redevelop residential sites for condominiums.

This is according to the latest revision of development charge rates released by the Ministry of National Development (MND).

The biggest hikes came from non-residential sites, which include parcels for hotel and hospital, as well as industrial and warehouse use.

The industry and warehouse sector saw the development charge rise 16.8 per cent overall.

The most affected was the Tuas Area, which includes Kranji, Lim Chu Kang and Choa Chu Kang.

For hotels and hospitals, there’s been a 3.3 per cent rise all round.

According to consultants Knight Frank, this was likely fuelled by a hospital site at Novena Terrace and Irrawaddy Road that was sold to the Parkway Group for S$1.2 billion.

Knight Frank said locations with the biggest percentage increases include Sungei Seletar, Yio Chu Kang Road, Raffles City and Grange Road area.

Commercial sites will see their development charge go up by 1.5 per cent in general, moderating from the high of 42 per cent in September 2007.

Consultants CB Richard Ellis (CBRE) said the increases were seen in areas where there were recent land sale transactions.

These include the Serangoon Central, Toa Payoh, Braddell Road and Bishan region.

CBRE said the hike could be due to the recent award of a commercial site at Lorong 6 Toa Payoh.

For the closely-watched development charge for residential plots, rates have gone up 2.6 per cent overall compared with the last review in September.

The rise is seen to be not significant, given that the charge has been increased a few times in 2007 as a result of the booming private residential property market.

The Thomson, Ang Mo Kio Ave 6 and Choa Chu Kang Road areas saw the sharpest increase - with the charge rising nearly 29 per cent.

The increase was due to some collective sales done in the second half of 2007 in fringe areas such as the Thomson Road and East Coast areas.

Development charges are paid by developers to enhance the use of sites or build bigger projects on them.

The charges are revised every March and September and are based on recent land and property values.

Source : ChannelNewsAsia - 29 Feb 2008

More details on HDB Lease BuyBack Scheme released yesterday. It will help 25,000 needy households

IN a bid to help low-income elderly Singaporeans unlock their flats’ values, the Minister for National Development Mah Bow Tan unveiled more details about the HDB Lease BuyBack Scheme (LBS) during Budget 2008 yesterday.

Some 25,000 households, or 70 per cent of two-and three-room flat owners will benefit from it.

Under this scheme, HDB will purchase the tail-end of the flat’s lease from the home-owner. The value will depend on market conditions.

The flat will then be left with a 30-year lease, which the home-owner will continue to live in.

For example, if you live in a three-room flat (with a 70-year lease) valued at $200,000, you will get $97,000.

This sum will include $87,000 for 40years of your flat’s lease and a $10,000 government subsidy.

Of this, $92,000 will go to the purchase of the CPF Life Plan and $5,000 will be paid out to you in cash.

The CPF Life Plan will pay you about $490 a month for the rest of your life.

The LBS is not the only way you can unlock the value of your flat.

There’s also the NTUC Income’s reverse mortgage plan, which allows you to borrow against the value of your flat and receive a cash advance from them, either in a lump sum or a series of regular payouts.

The loan is repayable when the property is sold, usually upon the death of the borrower or expiry of the mortgage tenure.

AT LEAST 62 YEARS OLD

To qualify for the LBS, you must be at least 62, live in a three-room or smaller flat, and earn less than $3,000 a month.

While some we spoke to liked this option, others thought the estimated payout was too little to keep up with rising living costs.

Home-maker Madam Lee Kiu, 65, is not so sure the payout amount will be sufficient.

Mdm Lee said her household expenditure is at least $1,000 a month, and a payout of even $500 a month is not enough.

She said in Hokkien: ‘It’s good that we get a regular income from this scheme but I don’t think the amount is enough for me to want to sell my flat to HDB. Food prices have gone up, I need at least $1,000 a month to feed my family.

‘And what if I need a huge sum of money for medical reasons or some emergency? I can’t sell my flat to raise the money if that happens.’

She currently lives in a three-room flat in Holland Drive with her husband, an odd-job labourer in his 70s.

Their son, who has just graduated from the National University of Singapore, also lives with them.

The couple bought their 700 sq ft place for about $130,000 in 1985.

The market value for their place is around $300,000 now, according to HDB resale statistics.

Madam Lee would also prefer to have the option of leaving her flat to her son in the future.

Another resident, who only wanted to be known as Madam Tan, would rather rent out her place and live with her niece.

This 70-year-old currently lives in a three-room HDB flat in Toa Payoh, which her mother bought for $7,500 in the 1960s.

The market price for her place is about $200,000 now.

Madam Tan, who lives alone, said: ‘It’s not as good as me renting out the place. I can get $1,400 per month for the place and live with my niece instead. The cost of living is quite high and I don’t think $460 a month will go very far, unless you really need the money.

‘I don’t want to be tied down with that. I want to have the option of selling it to raise cash if need be. It’s still an asset to me.’

ERA Realty Network’s assistant vice-president Eugene Lim said this scheme benefits those who want a regular source of income.

He added: ‘It’s not a lot of money but it’s better than nothing. This scheme targets those who need the additional source of income.

‘But those who are financially okay may not take to this scheme. They probably will prefer the flexibility of being able to sell their place whenever they want, just in case they need that extra cash for medical reasons.’
 
Source : NewPaper - 29 Feb 2008

Banks batten down hatches amid global turmoil and as big deals suck liquidity.

The squeeze is on. Banks have tightened financing for property investment deals, which include big transactions like sales of office blocks and development sites. This, in turn, may keep some buyers from participating in the market, industry players have told BT.

It’s also taking longer to wrap up property sales deals these days as securing funding becomes more of an issue - and this could be a drag on investment sales.

Bankers cite two main causes for the tightening. The turmoil in the global financial market has led to increased awareness of risks all round, and several mega transactions in the past 12 months here have left less liquidity available for others.

Says Tan Teck Long, DBS Bank managing director, corporate and investment banking: ‘There are a couple of large deals such as the integrated resorts (IRs) which have soaked up a fair bit of liquidity.’

Yesterday, Las Vegas Sands Corp announced the completion of its $5.25 billion loan syndication for the Marina Bay Sands IR, the largest deal of its kind here.

Brad Nelson, global head of commercial real estate, Standard Chartered Bank, agrees that the big deals had been sucking liquidity out of the market. ‘Banks only have a certain amount of capital base,’ he points out.

Banks’ exposure to property-related loans is capped by law at 35 per cent of their total loans, to keep risks from the industry in check. This does not include mortgages for owner-occupied properties.

Meanwhile, banks have become more cautious and are giving smaller loans relative to a property’s valuation than, say, 12 months ago. This serves to provide them with a greater buffer in the event of a fall in property values given the weaker sentiment in the Singapore property market today.

Jones Lang LaSalle regional director and head of investments Lui Seng Fatt says that about a year ago, banks may have given loans of up to 75 per cent of valuation for income-producing assets like office blocks. Today, the figure may be closer to 60-65 per cent.

Things are even harder for relatively unseasoned, smaller players buying residential development sites. They face greater scrutiny these days before banks give them loans, BT understands.

‘Financing for real estate projects has definitely tightened, especially since last quarter. This is essentially because of tighter liquidity brought about by limited appetite in the capital markets, due to current market developments,’ says Paul Kwee, Citigroup Singapore corporate bank director and head of real estate.

Lending amounts are more conservative now and covenants tighter, he says.

And despite the decline in Singapore dollar interest rates, the margins that are added to the floating interest rate reference are wider today, observes Mr Kwee. Margins are wider by 50-100 basis points now compared to last year, say bankers. Property sources say that while big established developers can still secure financing for purchases of development sites with relative ease, things are less rosy for smaller players.

Maybank head of business banking Lee Hong Khim acknowledges that his bank hesitates to finance new players whose core business is not in property development.

Mr Lee adds that Maybank is ‘more selective in the projects we finance; the location of the project is an important consideration as well’.

Giving his take, Citi’s Mr Kwee says: ‘Smaller players may find it harder because they have fewer financing options available to them as compared to the big boys who may also be able to tap the convertible bond or Sing-dollar bond market, for instance.’

But Mr Nelson of Stanchart says that ‘when liquidity is tight, lenders will normally take the position of supporting their existing relationships . . . regardless of whether they are SME (small and medium enterprise) or wholesale customers’.

Another outcome of banks becoming more cautious in evaluating loan applications is that it’s taking longer to complete property investment sales deals, says JLL’s Mr Lui.

The investment head of another major property consultancy group feels that the tighter financing environment could change the profile of institutional property buyers. ‘We may see greater participation from core funds, which assume lower risk, lower returns, and lower debt, and less participation from opportunity funds, which assume higher risks, higher returns and higher debt.’

Market watchers point to an extreme recent example, when UK-based New Star International Property Fund made a pure-cash (zero debt) acquisition of One Phillip Street, an office block in the Raffles Place area, for $99.02 million.

Funds that need to assume higher leverage to achieve their investment returns may find it difficult to buy property assets in Singapore - and their numbers may dwindle.

Source : Business Times - 29 Feb 2008