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LOCAL bank lending related to property shows no sign of abating despite an impending US recession and associated slowdown of the Singapore economy.

Total property -related loans, which include housing loans and lending to building and construction businesses, was 3.2 per cent higher in December than the previous month, reaching $110.7 billion, according to preliminary data released by the Monetary Authority of Singapore (MAS) yesterday.

On a yearly basis, property -related loans were up 23.4 per cent from Dec 2006’s figure of $89.7 billion.

These loans constituted the main bulk of banks’ lending business here, boosting total loans and advances to $233.4 billion in December last year. This figure is 20 per cent higher than in December 2006.

Loans grew despite measures undertaken by the government to cool the property sector. Last October, the government unexpectedly removed the deferred payment scheme for homebuyers, in an apparent bid to curb speculation.

Lending to building and construction firms jumped 42.6 per cent from a year ago to $37.5 billion. On a monthly basis, the loans were up 8.7 per cent.

December also saw loans to homebuyers reach $73.1 billion, or 15 per cent higher than a year ago, and 0.6 per cent up month-on- month.

Generally, loans to most business segments went up, except loans to sectors such as agriculture, mining and quarrying, manufacturing and business services.

Borrowing by business services companies has been on a downtrend since last November. It surged to $5.3 billion in October, then dropped 12 per cent to $4.7 billion in November and by a further 2 per cent in December.

Meanwhile, housing loans were the biggest component of bank lending to consumers. Lending to other segments like share financing and credit cards also continued to grow, although these accounted for only about 7 per cent of total consumer lending.

The number of credit cards in circulation, including supplementary cards, shrank marginally by 0.5 per cent over the month to 5.7 million at end-December. But the total credit card rollover balance - that portion of the credit card debt that is subject to interest charges - went up over the month to $3.02 billion, from $2.99 billion.

Overall, month-on month, and on a yearly basis, loans to businesses grew at a faster pace than loans to consumers. Monthly, loans to businesses rose 5 per cent to $127.8 billion, while consumer loans grew only 0.6 per cent to $105.6 billion.

Year-on-year, business loans grew 26.3 per cent while consumer loans expanded 13.1 per cent.

Source : Business Times - 1 Feb 2008

A BUILDING on Singapore’s first transitional office site in Scotts Road will be completed in September at a cost of about $75 million.

The entire four-storey block has already been leased to insurance firm Prudential, which has locked in an unusual rental agreement that will last for an effective 14 years.

Prudential will pay $6.50 per sq ft per month for the building. At about 150,000 sq ft of space, that works out to $975,000 a month.

The agreement is unusual because most office leases are granted on a three-year basis - although this can range from two to five years - with an option for renewal.

In today’s market of rising office rents, Prudential sees value in locking in a longer-term lease, explained chief executive Philip Seah.

Mr Seah said rents at the Scotts Road building would be half of what Prudential would have to pay to extend its current leases at Fuji Xerox Tower in Anson Road and at Bugis Junction, where it has a combined 130,000 sq ft of space.

Both those leases, as well as Prudential’s third location at Singapore Post Centre, will expire this year.

The firm is seeking a replacement for the Singapore Post location, where it occupies 70,000 sq ft.

In the meantime, Prudential will give up the Fuji Xerox and Bugis spaces and relocate 2,500 of its more than 3,600 staff to the Scotts Road block, Mr Seah said at a ground-breaking ceremony for the building yesterday.

The Scotts Road site, which is being developed by KOP Capital, Hwa Hong Corporation and Dubai Investment Group, is the first and most successful of the Government’s temporary office sites - an initiative launched recently to ease a shortage in office space.

The three other sites that were released garnered lacklustre response, with the latest not even awarded due to inadequate bids.

Source : Straits Times - 1 Feb 2008

BUSINESSES in Singapore leased a record 214,700 sq m of ready-built industrial space and 341ha of land from industrial landlord JTC Corporation last year on the back of strong economic growth.

Figures released by JTC yesterday showed that the net allocation of ready-built space, which includes factory space and business park space, surged 68 per cent from 2006 and easily surpassed the last peak of 179,600 sq m set in 2005.

The jump, said JTC, was due mainly to the increase in the net allocation - space leased less any given up - of all its types of factory space.

Flatted factory space last year was taken up by the companies in the manufacturing and manufacturing-related sectors, which include those in the precision engineering and electronics industries.

The overall occupancy of JTC’s ready-built facilities rose 4.9 percentage points to 92.7 per cent last year.

Net allocation of prepared industrial land - which is land provided with road access and water and sewer mains at its perimeter - also hit a record high of 341ha, a 27 per cent jump from 2006.

The growth in net allocation of land was supported mainly by the chemical sector, which accounted for half of all the industrial land taken up last year.

The occupancy rate for prepared industrial land stood at 89 per cent last year.

Source : Straits Times - 1 Feb 2008