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KINGDOM Holding, the investment company controlled by Saudi billionaire Prince Alwaleed bin Talal, said its Fairmont Raffles Hotels International unit has sold The Swissotel Merchant Court in Singapore.

Bloomberg said yesterday the 476-room hotel was sold for US$153 million ($208 million), citing an emailed statement from Kingdom, which did not name the buyer.

“The sale of this hotel is in line with Kingdom’s strategy to continue to realise value from hotel assets either through a sale or aggressive operational and financial management across its hotel portfolio,” Mr P J Shoucair, the executive director for international investment, was quoted by Arab news agency MENAFN as saying.

Fairmont Raffles, a joint venture between Kingdom and United States-based private equity firm Colony Capital, last week called off a deal to sell Singapore’s iconic Raffles Hotel to a consortium led by former Credit Suisse banker Mark Pawley.

The consortium earlier planned to buy the grand old dame for a reported $650 million - more than triple the $200 million paid by its American and Middle Eastern owners in 2005. Fairmont Raffles would have continued running the property through a management contract if the sale had gone through.

Both parties declined to provide reasons for the scrapped deal, citing confidentiality clauses. The consortium’s spokesman, however, denied that funding was the cause.

Source : Today - 2 Jun 2008

With office units in short supply, condos make a good option for investors: Analysts

Singapore’s city centre is set to get bigger and bolder in the next decade, with the injection of around 23,000 homes that promise to take the buzz to another level.

And if Singapore’s urban planners have their way, more office buildings will sprout at Marina Bay, along with mixed-use developments in the Beach Road and Ophir-Rochor areas - bringing people closer to their jobs.

All this will come to pass while hotels and lifestyle hot spots in Little India and the Singapore River surroundings ensure that the city teems with activity.

And even if you need a quick getaway from the city’s frenzy, green open spaces such as the upcoming Gardens by the Bay and Esplanade Park are all within walking distance.

This vision for Singapore’s 1,650ha central area was unveiled by the Urban Redevelopment Authority (URA) last week as part of its latest masterplan, which outlines Singapore’s land use over the medium term.

With all these grand plans and more, is it time for investors to hunt within the city for a good buy?

Property experts say this depends on the location of the property, the timing and how quickly URA’s blueprint materialises in the next few years.

Let us start with the Central Business District (CBD).

Office space investments are limited, although there are some strata-titled commercial units available, such as those at The Arcade in Raffles Place and International Plaza in Tanjong Pagar.

However, there is only a small pool to shop from, and units in good locations could be beyond the reach of the average investor. Units at The Arcade, for example, changed hands at around $5,000 per sq ft (psf) at the end of last year.

Knight Frank director of research and consultancy Nicholas Mak said there are ‘very few good strata-titled office spaces in the city’. A more obvious choice would be to shop for homes.

With the government’s latest strategy to repopulate the city centre and bring people closer to their jobs, investors can rest assured that this pool will only get bigger.

Some projects that have already been launched include The Sail@Marina Bay and Marina Bay Residences. Further inland, One Shenton Way and Scotts Square also offer units in the heart of the city.

The latest URA data shows Marina Bay properties transacting at around $2,100 psf. This is a slight dip from the peak prices seen in the property boom last year.

At Scotts Square in Scotts Road, units are being sold at an average price of $3,700 psf this year, down about 8 per cent from $4,000 psf in last year’s fourth quarter.

At One Shenton Way, the latest sale went at $2,069 psf in January.

Prices might be falling at some condos now, but as these homes were launched at just below or around the $1,000 psf level, the question remains whether the upside is limited if one buys now, say some market watchers.

It is possible that prices might drop further, given the current cooling of the market, but Mr Mak added that owners are unlikely to let go of units if they would incur a loss.

Savills Singapore’s director of business development and marketing, Mr Ku Swee Yong, said that sellers are more likely to negotiate now given the current market sentiment.

For investors holding out for drastic price drops, he said it is unlikely that home prices in the city will drop as much as 30 per cent, as recent bank reports have predicted.

‘Current market conditions do not support that. At the most, we will see a 5 to 10 per cent decrease for top-end luxury homes.’

Mr Ku said that even at the $2,000 psf level, city homes can command rental yields of about 4 per cent as they are attractive properties to rent, catering to the international expatriate community.

At DTZ Debenham Tie Leung, senior director of research Chua Chor Hoon agreed.

‘City centre homes fetch pretty good rentals and therefore give good yields…URA’s data shows that rentals for condos such as Icon were in the range of $6.50 to $7.50 psf a month,’ she said.

Mr Ku added that investors who are in for the long haul might find that their investments will pay off in the next five to 10 years, especially after the Marina Bay integrated resort opens and the city gets busier.

Other homes to consider include those at Robertson Quay and Tanjong Pagar.

The condos include Robertson Blue, RiverGate and Watermark at Robertson Quay; at Tanjong Pagar, there are the Pinnacle @ Duxton and Icon. Units at these projects have changed hands for $1,400 to $1,600 psf in the last three months.

The other option for investors is to wait for further government land sales, for more new homes to be developed, said Mr Mak. These developments would probably be in the Marina Bay area, he added, unless URA allows city properties to be converted into mixed-use projects.

Around Beach Road and the Ophir-Rochor area - touted as the northern gateway to the city - investment opportunities are more diverse.

There is a good mix of shophouses and strata-titled commercial and residential units on the market for the average investor.

The 101, Premier Centre and The Plaza, for example, are all strata-titled properties with a mix of commercial and residential units. At The Plaza, transacted apartment prices have gone up 28 per cent, rising from $600 psf in June last year to $900 psf currently.

Commercial units in this area have generally stayed at the $1,500 psf price level this year, though transaction volumes have fallen since last year, said Mr Ku.

Over at Tanjong Pagar, shophouses are also a staple of the district. These properties are usually more affordable, added Mr Mak, although he warned that they are more sensitive to market downturns.

If plans for a revamped Kallang Riverside and Paya Lebar Central go ahead, the city centre will also benefit from the buzz added by these new, nearby commercial hubs.

How soon investors will see price movements in city investments will depend on the pace of development. Market watchers agree it is still too early to see the price effects from URA’s masterplan.

‘Prices are peakish now, so one should consider the investment time horizon and yield before making a purchase,’ said Ms Chua.

Promising outlook

For property investors who are in for the long haul, they might find that their investments will pay off in the next five to 10 years, especially after the Marina Bay integrated resort opens and the city gets busier, says
Mr Ku Swee Yong, Savills’ director of business development and marketing.

LOCATION AND TIMING CRUCIAL

Market watchers point out that while prices of many city centre residential properties have come down since last year’s peak, the upside may be limited as many of these homes were launched at much lower prices.

On the other hand, apartments at The Plaza, a development in the Beach Road and Ophir-Rochor area with a mix of commercial and residential units, have actually enjoyed price increases since last year.

Source : Sunday Times - 1 Jun 2008

After a most spectacular year for the en bloc market last year, sales activity has finally frizzled out and for most parties involved, it is a welcome time-out. While property agents may lament the slowdown, one group of home-owners can heave a sigh of relief, as the threat of being forced to sell their homes retreats into oblivion.

Well, for most, anyway.

The recent debacle at the annual general meetings of two of the most iconic condominiums on the East Coast - Bayshore Park and Mandarin Gardens - proves that while the market has gone dead, en bloc woes have not, and will not, go away.

Some points of contention that arose at the meetings were the use of proxy votes to influence decisions, and conflicts of interest arising over the roles of management councils and sales committees.

In the course of my job, I have covered my fair share of en bloc deals, and as a non-partisan observer of proceedings, I have come to one conclusion about the ‘uniquely Singapore’ phenomenon that is the en bloc.

It is ugly. And it brings out the worst in Singaporeans.

Recent developments have also highlighted weaknesses in the law regarding collective sales and a private property owner’s rights. This is despite the tightening of en bloc rules that kicked in last October, which ensure, among other things, that sales committees are properly elected, and collective sales agreements witnessed by lawyers.

This has no doubt cooled the en bloc fever which gripped the nation last year, with a total of 116 collective sales generating record investment sales of $13.64billion.

But some glaring flaws in the en bloc process remain. They include the distribution of sale proceeds, the role of the management council versus the sales committee, and the use of proxy votes at annual and extraordinary meetings.

Let me elaborate.

Firstly, owners should be compensated according to their flat attributes - height, cost of renovation, view.

I have found that pro-en bloc types usually own low-floor units, with average furnishings and view. Anti-en bloc types, by contrast, typically own beautifully renovated top-floor units with stunning views - it is no wonder that these owners want more compensation or refuse to sell, according to how much they have invested in their homes.

Current laws favour the average owner, who receives a pay-out equal to that of his top-floor neighbour, which is obviously unfair and has been the root of many conflicts and arguments.

The Strata Titles Board (STB) has also previously ruled that renovations, along with interest, are not a ‘deductible expense’, which means your renovations count for nothing in a collective sale.

To create a level playing field, provision should be made so that owners get fair value for their homes, perhaps by a government-appointed independent valuer.

Secondly, the management council and sales committee should be kept separate by law, since the role of the former is to maintain the upkeep of the estate, while the other’s role is to sell it.

Current laws allow a sales committee member to be on the management council as well, but this has caused unhappiness at many estates - not just at Bayshore and Mandarin - where suspicion breeds among residents towards those who carry both positions.

On the issue of proxy votes, it is theoretically democratic. But it also allows decisions to be skewed one way, because residents who want certain things changed will attend meetings and get proxies from similar-minded neighbours to achieve the results they desire.

Meetings currently require only 30per cent of the total share value held by residents of an estate to attend, which enables decisions to be made without majority consent.

This should be looked at. One solution could be to raise the minimum requirement of residents present to 80per cent, or instead to do away with proxy votes altogether so that voting cannot be manipulated - perhaps via an online or e-mail voting system.

My advice in the meantime?

Don’t buy into a strata-titled property if you do not want to be forced to sell your home. Current laws do not ensure you will be able to live in your condominium unit until your dying days - even though, in my opinion, you should be able to.

Most countries in the world allow this basic right, why can’t we?

Perhaps the lawmakers could take some of these issues into consideration when compiling the next set of refinements.

Beyond the economic value of urban rejuvenation or boosting shareholder value for property developers, the en bloc phenomenon has ripped apart the moral fibres and harmony of our society.

Is this a cost our society is willing to pay?

On the one hand, I can sympathise with those who want to sell: they may be approaching retirement, or perhaps have plans to move away, and want to get the best price.

But there are people who have spent hundreds of thousands of dollars beautifying their homes to be their retirement nests, plus those who value the environment they live in beyond any amount of realisable value.

Do the former have the right to determine if the latter lose their homes? Owners still have a choice to sell their homes on the open market.

In terms of ’specuvestors’ who swoop in to snap up units in the hope of making a quick collective sale buck, their motivation is even more inexcusable. It is okay to want to make money, but do it without hurting someone else.

It’s not just Singaporeans who become embroiled in controversial sales, but also foreigners and permanent residents.

I just hope that my estate never has to go through this nightmare. It is sure to do permanent damage to relationships which have taken years to build up, but which take only a sale notice to destroy.

Source : Sunday Times - 1 Jun 2008

In this weekly column, we bring you a sampling of properties up for sale. In the spotlight this week: Condos for below $800 per sq ft.

Serenity Park, Tamarind Road, freehold

What it is: A two-bedroom apartment

Price: $679,000, or $617 per sq ft (psf). The maintenance fee is $250 a month.

This 1,100 sq ft unit comes with a maid’s room and a balcony.

The apartment is in a quiet area off Yio Chu Kang Road, surrounded by landed homes.

Castle Green, Yio Chu Kang Road, 99-year leasehold

What it is: A three-bedroom apartment

Price: $730,000, or $483 psf. The maintenance fee is $267 a month.

Completed in 1997, this condo is a five-minute walk to the Yio Chu Kang MRT station.

It has an area of 1,511 sq ft and comes with a maid’s room. It is currently tenanted.

Pinevale, Tampines Street 73, 99-year leasehold

What it is: A three-bedroom apartment

Price: $730,000, or $595 psf. The maintenance fee is $240 a month.

This ground-floor unit is 1,647 sq ft in size and comes with a maid’s room and built-in wardrobes.

It was completed in 1998 and is currently vacant. The Tampines MRT station is four bus stops away.

Hillington Green, Hillview Avenue, 999-year leasehold

What it is: A three-bedroom apartment

Price: $1.07 million, or $789 psf. The maintenance fee is $350 a month.

Located on the fifth floor, this 1,356 sq ft unit is about five years old and has had a $30,000 renovation. It comes with a private lift lobby.

Next Week: HDB flats in Bishan
 
Source : Sunday Times - 1 Jun 2008

Road repairs, including stabilisation work, are still going on at Cornwall Gardens, following a cave-in there on May 24.

The cave-in created a 7m by 8m hole that was 3m deep. No one was injured that morning but water supply for four homes was disrupted.

The Sperling family, whose doorstep was where the cave-in occurred, also had their Internet and cable connections interrupted.

Currently, cement is being pumped into the ground to fortify it, said Mr Chris Knight Hasell, the Land Transport Authority’s (LTA) project manager for the Circle Line Stage 4.

This process, known as grouting, will take another week or so. Only one of the two lanes of Cornwall Gardens is accessible now.

Grouting also helps to stabilise the ground as tunnelling work for the Circle Line’s Holland Village Station continues, Mr Hasell added.

For now, LTA is concentrating on repairing and stabilising the road.

When The Sunday Times visited the Sperling family at their home yesterday, they reported a crack in their driveway leading to the construction site. The LTA did a check and does not think it is new.

The Sperling family stayed at the Shangri-La Hotel for two nights after the road cave-in blocked driving access to their house.

Source : Sunday Times - 1 Jun 2008