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Court finds developer’s use of name likely to damage Amanresorts’ goodwill

Amanusa

The prestigious Amanresorts Group has won a court battle to force a condominium project in Yio Chu Kang to be renamed.

Local property developer Novelty had named its condo Amanusa, but the court found that this was likely to cause damage to the goodwill of the Amanresorts Group, which runs a well-known luxury resort in Bali also called Amanusa.

The court decision last week found that although no buyers had purchased units in the uncompleted project thinking it is related to Amanresorts, allowing Novelty to call its project Amanusa may cause the name to lose its uniqueness.

Justice Tay Yong Kwang said that the name which ‘inspires hushed awe’ may in future ‘evoke suppressed laughter’ because of the association with projects that are not as luxurious and well-maintained, especially when residential projects start to show their age.

He rejected Novelty’s argument that it came up with the name through the creative inversion of two words as it is too coincidental that it chanced on the same two foreign words and decided to fuse them in exactly the same way that Amanresorts did 15 years ago.

Justice Tay added that he found it hard to believe that in this Internet age, Novelty did not make any searches to see if the name exists in some language and if so, whether it could mean something quite unintended or untoward.

Rooms at the Amanusa resort start from US$700 per night. The group also owns and manages 18 luxury resorts around the world in countries such as Morocco, Bhutan and France.

Amanresorts was represented by Alban Kang and Koh Chia Ling of Alban Tay Mahtani & de Silva. Mr Kang said this is the first time the local courts have declared a mark to be a well known, which means it is entitled to special protection not given to an ordinary trade mark.

Source : Business Times - 14 May 2007

Tenants feel the heat, with some forced to downgrade, as rents of private units spike

When the lease on her River Valley apartment came up for renewal, 31-year-old operations manager Jordana Brumby was told her rent was going up by $1,000 a month - an increase of 55 per cent from the $1,800 she used to pay.

It was galling, but the Australian, who now pays $2,800 a month for a three-bedroom unit at Nathanville, felt she had no choice because ‘everything else was much dearer and not as attractive’.

After about eight years of stagnation, the rental market has been picking up steadily in recent months.

Bad news for tenants, good news for owners.

Urban Redevelopment Authority (URA) figures show that private residential pro- perty rents rose 7.6 per cent in the first quarter of this year, compared with a 5.3 per cent increase in the last quarter of last year.

Property agents said that since last year, rents have gone up by at least 20 per cent to 30 per cent across the island, and not just in the prime central districts such as Orchard, Newton and Tanglin.

According to figures from property agency ERA, rents in the western parts of Singapore such as Bukit Batok and West Coast have increased 28 per cent, while rents in eastern areas like Tampines and Pasir Ris have risen 23 per cent.

Although rental prices have surpassed the last high in 2000, they have yet to break the 1998 records.

But ERA assistant vice president Eugene Lim predicts that ‘at the rate we are going, there may be a new record high this year’.

Mr Lim said the buoyant rental market is due to strong demand from foreigners.

And generally, when the economy is good, as with other bustling cities like Hong Kong and London, ‘ there are more expatriates who need homes’, said Mr Mohamed Ismail, chief executive of property agency PropNex.

High demand is clashing with limited supply, due to the ‘fall in stock of property available for lease due to collective sales’, said Mr Lim.

He added that the market has lost about 6,000 units in the past two years.

In contrast, the number of foreigners coming to Singapore grew by 9.7 per cent last year to 875,500, the biggest leap in six years.

While tenants feel the squeeze, landlords like Madam Jenny Khoo are celebrating.

Madam Khoo rented out her 1,340 sq ft apartment at Tanglin Park for $3,100 a month last year. This year, a new tenant was willing to pay $5,200, an increase of nearly 70 per cent.

‘We were expecting more rent, but we didn’t expect it to be so high,’ said the housewife.

Rentals have even gone up for HDB rooms.

Suddenly, it is no longer a buyer’s market and landlords have the luxury of adopting a take-it-or-leave-it attitude, forcing many tenants to downgrade.

When engineer Sue Lim, 27, moved into her three-bedroom unit at Springdale Condominium in Upper Bukit Timah in June 2004, her rent was $1,300 a month.

Last June, her landlord raised it to $1,400. When the rent was increased again to $1,800 in January, she decided to downgrade.

Ms Lim now pays $1,200 for a four-room HDB flat in Toh Yi Drive.

Many who have not downgraded are struggling.

‘About a third of my pay now goes to rent and it’s burning a hole in my pocket,’ said Miss Brumby. ‘I’m really starting to regret it.’ - MISS BRUMBY, on agreeing to pay an extra $1,000 for the rental of her Nathanville condo unit after a lease renewal

`We were expecting more rent, but we didn’t expect it to be so high.’ - MADAM KHOO, who rented out her apartment at Tanglin Park for $3,100 a month last year. This year, a new tenant was willing to pay $5,200, an increase of nearly 70 per cent.

Source : Sunday Times - 13 May 2007

Two months after first try, it is estimated that largest Pine Grove unit will get a minimum $1.75 million

Barely two months after owners at Pine Grove estate rejected a collective sale, a fresh attempt has been made to lure them, with an extra $550,000 per unit.

In February, only about 50 per cent of the 660 owners in the sprawling ex-HUDC estate in Ulu Pandan voted for the sale, which would have earned them up to $1.2 million each.

This was well short of the 80 per cent requirement.

Now, according to a letter circulated to Pine Grove residents by one home owner, property experts have estimated that the largest unit should not be priced lower than $1.75 million.

And unlike the previous attempt, the new initiative promises to secure 80 per cent support from home owners first before even proceeding to form a sales committee.

Usually, a group of residents will form a sales committee on their own, appoint a property consultant and then try to secure support from at least 80 per cent of owners.

A sales committee has not been formed yet and the letter writer declined to be interviewed.

Mr Karamjit Singh, managing director of Credo Real Estate, said he was not surprised by the 40 per cent spike in the expected minimum price. ‘It’s not impossible. In the past six months, property prices have jumped quite substantially,’ he said.

The February attempt to sell en bloc had met with resistance because many owners feared the hot property market would force them to downgrade to less spacious flats.

At around 1,750 sq ft, most units at the 99-year leasehold development are big by today’s standards.

Project manager K.K. Pang, 54, voted against the last attempted collective sale.

‘With the previous offer of $1.2 million, there was no way we could have bought a similarly spacious apartment in this area,’ he said.

The Sunday Times interviewed 12 home owners in Pine Grove and almost all said they would agree to the sale if offered $550,000 more. Many believe their units deserve the additional sum because of the size and the estate’s close proximity to the Dover MRT station and various other amenities.

However, property consultancy Knight Frank’s head of research, Mr Nicholas Mak, is sceptical that the second attempt will go through.

Said Mr Mak: ‘The weak response in the first round might have put off property consultants from getting involved in Pine Grove. Why put in so much effort and resources into a lame duck?’

He also warned that some collective sale initiatives are not genuine, but rather a ploy by some home owners to drive up the value of their unit.

DTZ Debenham Tie Leung, the firm engaged to handle the first collective sale, said it is not involved in the fresh initiative, but did not rule out the possibility of getting involved again if invited.

‘I’d say the second time is always easier. Sometimes during the first round, owners are not ready to give up their units. By the second round, they’d have had sufficient time to reconsider,’ said Ms Tang Wei Leng, DTZ’s director for investment advisory services.

Some owners, however, insist on staying put despite the prospect of making a huge profit.

Financial assistant Louissa Ang, 24, moved into her Pine Grove flat two years ago and spent $60,000 on renovations.

Said Ms Ang: ‘This is my matrimonial home and I just moved in. I don’t want to start searching for another house so soon.’

Source : Sunday Times - 13 May 2007

Q Please advise on a checklist of important details to look out for when buying property.

A The purchase of property involves a substantial amount of money and can involve long-term financial commitment.

Thus, the most important thing is to ensure you can comfortably afford the property you’re purchasing.

Basic checklist

Affordability

A general guide is to ensure your total monthly housing loan instalment does not exceed 35 per cent of your monthly income. This will help ensure that you have sufficient cash for fulfilling other objectives such as retirement.

To be prudent, it is also a good idea to set aside cash and/or sufficient CPF monies to pay for at least six months’ monthly instalments.

Location is also an important consideration. A well-maintained property in a good location would be better able to sustain its valuation.

Personal inspection

You should personally inspect the property before buying it. Keep an eye on the physical structure to estimate any cost of renovation and repairs that might be necessary.

The physical environment is also an important consideration. For instance, a large vacant plot of land next to the subject property may eventually be built up, blocking your view and affecting the value of the property.

Remaining lease

For any property with a remaining lease of less than 60 years, the maximum CPF withdrawal limit can range from 0 to 100 per cent, much lower than the usual 126 per cent.

Prior bank loan approval

You might risk forfeiting your option money in the event that the bank is unable to meet your financing requirements.

For instance, if the purchase price of your property might be higher than the bank’s valuation, any excess would have to be paid in cash. You might also need a higher loan amount than what the bank is willing to approve based on your income.

Mortgage shopping

When shopping for the right home loan, keep these in mind:

Loan duration

Check the maximum loan term that you can get. The normal loan term is 30 to 35 years, or up to when you are 65 or 70 years old, whichever is lower.

However, if you plan to retire by age 60, you should not take out a housing loan that stretches to when you are say, 65 years old.

Payment projections

Compare the monthly repayment (based on different interest rate scenarios) from various banks to see if you are comfortable with the amount.

Interest rate comparison

Check to see if the bank offers fixed rate loans and how long the fixed rate period will be. Note that banks typically charge higher interest rates if you want fixed interest rates.

Thus, if interest rates are not going up, you might actually be better off choosing a floating rate housing loan instead.

Extras

Check if the bank gives free fire insurance and other freebies.

Free loan conversion

If you are buying properties that are still under construction, you might want to check if the bank offers a one-time free loan conversion when the property reaches temporary occupation permit status as you want the flexibility to switch to a better package rather than be stuck with your existing package, which might be a worse option.

Penalties

Ask to see what fees will be charged if you do a partial or full redemption of your loan. Also check how long the penalty period is. Currently, there are some housing loan packages with zero penalty period, while typically most loans have one to three years of penalty period.

Other costs

These include legal fees. Banks typically provide a legal subsidy pegged to 0.4 per cent of the loan amount. Thus, if your loan is big enough, the bank might help you pay for the legal fees fully without you having to pay at all.

Promotional packages

From time to time, banks might come up with special promotional packages. If you engage the services of a mortgage broker, he would be able to provide you updated information on such special promotions.

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

Source : Sunday Times - 13 May 2007

Top condos of times past that are still popular tend to be those in prime spots and which are well-maintained

They were top of the heap a few years ago, the ever so hip and grand condominiums that Singaporeans and expats were keen to call home.

Any roll call would include The Colonnade, Paterson Edge, Four Seasons Park and Ardmore Park.

Go outside the Orchard Road area and you have The Bayshore, once coveted for its sea views before Costa Del Sol was plonked in front of it.

But even though many of them have fallen out of favour, a select few, mostly those in prime locations, have stood the test of time.

Singapore’s first condominium, Beverly Mai, which was built in 1974, was sold en bloc in April last year for $238 million, or about $1,184 per sq ft (psf) of potential gross floor area. Its selling point was not nostalgia but its position in ever-so-prime Tomlinson Road.

Other such condos in coveted districts 9 and 10 would also have kept their value well, property consultants say.

A condo with unique design features and layout can command a rental premium but location is a prerequisite, says Chesterton International’s head of research and consultancy, Mr Colin Tan. And if expats like the condo, its value will also stay buoyant, he added.

With time and changing trends, those unique features or frills that wowed buyers in days past tend to matter less and less when it comes to determining price, says Savills Singapore’s director of marketing and business development, Mr Ku Swee Yong.

‘If your condo’s features are unique, they are usually very quickly copied anyway,’ he says, pointing out that the key to good valuation is the upkeep of the place. ‘Whether or not it has unique designs or features, a property’s value will be sustained if it is well-maintained.’

Certainly, prime developments such as Four Seasons Park in Cuscaden Walk and Ardmore Park just behind Orchard Road are still very much in demand. Sales at Ardmore Park have been steady, with four recent transactions done at $7 million or more for a 2,885 sq ft unit. That translates to at least $2,426 psf.

And The Colonnade in Grange Road, which features a unique columnar structure designed by the late New York architect Paul Rudolph, has maintained its rental levels, largely because they are controlled by the developer and the building is well-maintained, says an agent.

Developer Pontiac Land has kept the 90-unit block, completed in 1987, for investment.

The project has very large units, ranging from 2,700 sq ft two-bedders to 12,700 sq ft penthouses, for lease. A two-bedder costs about $11,000 a month while a three-bedder costs between $16,000 and $16,500.

‘It is the budget that drives what tenants can choose,’ says Ms Kavita Borglin, an agent with Premiere Realty. But a unique building such as The Colonnade can help in attracting tenants, she adds.

Otherwise, the upkeep of an apartment is more important than whatever design the developer has graced - or inflicted - the exterior with.

Take Arcadia Gardens in Adam Road - its spacious 3,800 sq ft units can command $14,000 to $15,000 a month if renovated, but just $9,000 to $10,000 otherwise, says Ms Borglin.

She adds that potential tenants do not bother to view units in a development if they do not like the exterior.

Some estates get a chance at a second lease of life. The ageing Pandan Valley, for instance, which created a splash many years ago for its then-unique features such as maisonette units, full facilities and retail shops, has seen prices rise amid the collective sale fever.

Caveats lodged in March showed that two units were sold - one at $574 psf and the other at $612 psf. But a 2,239 sq ft unit was sold at a higher $750 psf or $1.68 million in February.

Four caveats lodged in May last year showed that sales for units ranging from 1,690 sq ft to 3,089 sq ft were done at just $474 psf to $518 psf.

Source : Sunday Times - 13 May 2007