Lushhome :: Online news and information on Singapore property market

Average price is $870-900 psf; buyers mostly Singaporeans

MORE than 50 units have been sold at Kovan Residences since a private preview party last Saturday.

Buyers up to now are mainly Singaporeans, most of whom have private home addresses, although a few HDB upgraders have also bought.

‘We have attracted buyers who are purchasing for their own occupation as well as for investment because of the convenient location next to an MRT station,’ said Centurion Properties CEO Tony Bin, whose company is the majority shareholder of the project’s developer Centurion Kovan. Lian Beng is another shareholder, with a 19 per cent stake.

Centurion Properties is ultimately controlled by UOB-Kay Hian stockbrokers Han Seng Juan and David Loh Kim Kang.

Last Saturday, they invited 150 business associates, friends and relatives to a private preview at the showflat, which eventually resulted in the 50-plus units being sold. Kovan Residences is also being marketed to Messrs Han and Loh’s business associates in China and Hong Kong.

The lowest-priced unit in the development is a two-bedroom apartment for just over $700,000. The most expensive is a penthouse below $4 million. Three-bedroom apartments start from $1 million.

Kovan Residences will have 512 apartments in eight blocks, all 18 storeys high. The 16 penthouses in the development range from around 2,400-4,600 square feet and come with a private pool or a Jacuzzi. The project is being developed on a 190,000 sq ft site bought in a state tender in October last year for $436 psf per plot ratio.

Another new project being offered this weekend is Livia at Pasir Ris Drive 1. The average price is said to be $650 psf.

Source : Business Times - 5 Jul 2008

Email lushhome@gmail.com for more information or a preview invitation.

Developers will release projects to capitalise on recent healthy home sales

A STRING of new private residential projects is hitting the market as developers move quickly to capitalise on encouraging recent home sales.

In the Kovan area alone, two new projects - Kovan Residences and D’Pavilion - are holding previews this weekend.

The 99-year leasehold Kovan Residences, which has 521 apartments ranging in size from 883 sq ft to about 1,700 sq ft, is next to Kovan MRT station. Prices range from just below $800 per sq ft (psf) to more than $900 psf.

More than 50 units have already been sold, said Mr Tony Bin, the chief executive of Centurion Properties, known until recently as Duchess Development.

Centurion is largely owned by well-known UOB-Kay Hian stockbroker pair Han Seng Juan and David Loh. The rest is held by private investors and Lian Beng Group.

Not far from Kovan Residences is another new project, D’Pavilion, priced at an average of $895 psf for the preview. This freehold 50-unit project in Upper Serangoon Road is within walking distance of Kovan MRT station. It has two- to four-bedroom apartments and six penthouses.

Over in Pasir Ris, the preview for 724-unit Livia has already started. It is priced at $650 psf on average, or from $597,000 to $636,000 for the two-bedroom units and $793,000 to $835,000 for the three-bedroom units. Some have been sold, sources said.

These launches come in the wake of healthy sales at the 348-unit Dakota Residences in Dakota Road. The developers, Ho Bee and ChoiceHomes, have sold about 150 units of the 99-year leasehold property for between $940,000 and about $3.38 million since they went on sale a fortnight ago.

The Sim Lian Group has also sold more than 200 units of the 308 launched units of Clover by the Park since its preview late last month. Transacted prices ranged from $582 psf to $877 psf. It has just launched for sale the remaining units at the 616-unit 99-year leasehold project in Bishan.

United Engineers is also ready to launch its condo-like Housing Board project in Ang Mo Kio Street 52, but it has yet to commit to a date.

Called Park Central, the project will have more than 550 units and comes under the HDB’s Design, Build and Sell Scheme (DBSS).

A market watcher said the firm will have to launch it below the prices of the previous DBSS project in Boon Keng.

‘They will have to learn from the Boon Keng project, which still has leftover units. When it was launched, many people came but not all later bought,’ he said.

The 714-unit City View@Boon Keng, which was launched in January, had 474 five-room flats priced from $536,000 to $727,000, a range that some considered too high.

Launches will not be confined to mass- and mid-tier properties for long.

Next Tuesday, Hayden Properties will launch The Hamilton Scotts, its luxurious Scotts Road project with 54 apartments and two penthouses, which all come with private car porches.

Still, this new project and a few others such as the freehold 100-unit Newton Road project L’VIV, were already expected.

Source : Straits Times - 5 Jul 2008

Email lushhome@gmail.com for more information or special preview invitations.

MS JANET Han, Secretariat, Singapore Institute of Surveyors & Valuers, defined very clearly what constitutes a property’s fair market value.  Can Ms Han please explain why, when bankers in Singapore quote an independent valuation (based on a professional independent valuer’s opinion, presumably a member of the SISV) for a resale property for mortgage or re-mortgage purposes, the valuation is always at least 25 per cent lower (in some cases, 40 per cent) than recent actual sale value, yet the same bankers are always willing to accept a new (primary but pre-TOP) sale price as fair market valuation.

Contrary to Ms Han’s assurance that market price is set by the market, in the case of ‘banker’s’ valuation, the practice of always giving conservative valuation for mortgage purposes is allowing valuers to effectively set market prices with some unexpected consequences:

- Loan ratio offered by banks is not the 80 per cent of market price but effectively 80 per cent of 75 per cent or 60 per cent of market price.

- a property’s collateral value is artificially diminished.

I suggest that independent valuers should only have one transparent valuation for market price (value based on their professional expertise), and let the bank decide how much risk and buffer they need to set the loan ratio accordingly.

In the UK, Australia, NZ, etc, it is common practice for the buyer to pay for specific valuation by independent valuers (acceptable to the bank), and it is up to the bank to set loan per cent ratio accordingly based on the bank’s perception of risk, taking into account the buyer’s financial position, the bank’s loan quota, etc.

I believe that one market valuation will open up new opportunities for members of SISV and, more importantly, make the valuation more reliable.

James Lee

Source : Straits Times - 5 Jul 2008

INSTEAD of gobbling up electricity from Singapore’s power grid, one local building could soon be able to fend for itself.

Planners unveiled yesterday details of renovations to a Braddell Road research institute that would make it the country’s first zero-energy building.

Officials hope to cover the government-run BCA Academy with half a football field’s worth of solar panels, said Professor Lee Siew Eang, the project’s head researcher.

The ultra-efficient institute, scheduled for completion next year, would also use about one-third the power of an average building and be able to survive on its own electricity.

‘Hopefully, with a little help from heaven, there won’t be too many rainy days, and we’ll have our zero-energy building,’ said Prof Lee, who works at the National University of Singapore.

The building would be at the forefront of a trend to turn buildings into batteries, thus reducing power consumption and cutting greenhouse gas emissions.

Officials hope the homes and offices of the future will be able to power themselves, said the president of the Institution of Engineers Singapore, Ms Lee Bee Wah.

But the difficulty is two-fold.  The buildings must be energy efficient, and affordable sources of renewable energy - like solar power - must be developed, said Ms Lee, who is also an MP for Ang Mo Kio GRC.

Simply using renewable energy without improving efficiency would be futile.

‘We cannot just plaster solar panels, as that will make costs skyrocket,’ said Prof Lee.

Daylight, natural ventilation and visitor- tracking systems will be used to improve energy efficiency, said Prof Lee.

Green buildings are key in ensuring economic growth, environmental sustainability and a high quality of life for urban dwellers, said Prime Minister Lee Hsien Loong last week.

The BCA building is not the only one heeding his call.

Under a $10 million plan by the National Environment Agency, manufacturers and contractors receive co-funding for doing an energy audit on their business.

As of last month, 107 applications to the three-year-old scheme were approved, with building projects accounting for more than 70 per cent.

If implemented, the projects could save a whopping 327,000MWh annually, or $28 million in power bills.

The Government is considering six bids for the project, tentatively scheduled for completion by next year.

Source : Straits Times - 5 Jul 2008

WE THANK readers for sharing their views about the New 7th Storey Hotel.  The Land Transport Authority carried out a comprehensive study and explored all options to construct the Downtown Line 1 (DTL1) and the new Bugis station.  After exhausting all options, we concluded there was no alternative but to demolish the New 7th Storey Hotel building.

The new DTL1 has certain structural requirements.

First, the tunnels have to swing clear of the Rochor Flyover foundations.  As a result, the tunnel alignment will inevitably head in the direction of the hotel.

Second, the current Bugis station is built on a diaphragm-walled foundation comprising deep and heavily reinforced concrete walls.

This limits where the DTL1 tunnels can pass underneath without compromising the existing station’s foundations.  This also means the new station can be built only on the south side of Victoria Street.  Hence there is no option but to demolish the building so the station can be constructed.

The conservation of buildings is assessed in the larger development context, taking into consideration long-term planning in the area where a building is located.

Land use needs to be optimised in land-scarce Singapore by balancing competing, and sometimes conflicting, needs for development and conservation, and to make painful decisions either way.

The land parcel where the hotel is sited will be amalgamated with the adjacent state-land parcel for future comprehensive redevelopment.

Doing so allows better integration between the station and the site’s future development, resulting in better urban-design plans and pedestrian networks.

We thank readers for their views and assure them that our engineers had exhausted all other options before settling on the current plan.  In time to come, the Downtown Line, with its new Bugis station, as well as the other new developments in the area, will bring many benefits and add to the vibrancy of the area for generations of Singaporeans to enjoy.

Geoffrey Lim
Deputy Director, Media Relations
Land Transport Authority

Andrew David Fassam
Deputy Director, Urban Planning and Design
Urban Redevelopment Authority

Source : Straits Times - 5 Jul 2008

But contractors sound caution with requests for longer warranty period

SINGAPORE’S first zero energy building (ZEB) project has attracted six bids for the main tender and interviews with four ’serious’ bidders will start next week, the Building and Construction Authority (BCA) said yesterday.

The tender to convert the BCA Academy into a net zero energy building has drawn bids ranging from $10.4 million to $11.8 million.

The six companies that tendered are: ACP Construction, Dokota, Logistics Construction, Lexon Furniture & Construction, Shanghai Chong Kee Furniture & Construction and Stallion Development. All six are mid-size unlisted companies. ‘We have six that came in. There are four serious ones that we are going to proceed with tender interviews next week,’ Ang Kian Seng, deputy director of technology and innovation development at BCA, said on the sidelines of a ZEB seminar.

Of the four short-listed firms, three are Singaporean while one is a Chinese company, he said.

BCA closed the construction tender on June 6. It has already awarded the building’s solar energy tender to Singapore firm Grenzone for $1.7 million.

In a sign of caution, some suppliers and contractors for renewable energy projects are ‘over-specifying’ with requests for warranties as long as 20 years, said Lee Siew Eang, who heads the research centre set up by BCA and the National University of Singapore. This is double the usual warranty period for specialised building projects and could raise costs as much as 40 per cent, said Eugene Seah, executive director of Davis Langdon & Seah.

‘There is a benchmark in the industry and the maximum is usually 10 years,’ he said.

Companies are seeking 20-year guarantees because while solar panels tend to last for that long in temperate regions, they could be damaged faster by Singapore’s tropical weather.

‘When (the panels) are exposed to the afternoon sun, it can be over 50 degrees. With rain and thunderstorms, you can go down to 28 degrees, so there is expansion and contraction. That element of uncertainty is still there,’ said Prof Lee.

Singapore lags regional neighbours such as Malaysia, Japan and Thailand, which are also constructing ZEBs.

The ZEB project was launched in November last year. By 2009, the BCA Academy will be fitted with solar panels to generate electricity that is transferred into a normal power grid.

The amount of energy produced will match the amount of power consumed in the building.

ZEB, which will cost about 10 per cent more than a conventional building, will become a test centre for other green building technology, such as energy- efficient lamps and fan-ventilation systems.

The target is to run the building on 70 per cent less energy than a conventional building. ZEB is expected to run on 86 kilowatts per hour (kwh) per sq metre, compared with 230 kwh per sq metre for standard buildings.

Source : Business Times - 5 Jul 2008

EMERGING Asia looks set to avoid a sharp slowdown given strong economic growth in China, the head of the Asian Development Bank (ADB) said yesterday.

Asia should also easily avoid a repeat of the financial crisis that rocked the region a decade ago, ADB president Haruhiko Kuroda told a press conference.

That said, the region’s emerging economies are ‘highly vulnerable’ to skyrocketing oil prices, given their high dependence on oil imports and low energy efficiency, thus making inflation the No. 1 concern for policymakers, he added.

‘With the global economy slowing and oil subsidies being phased out, high oil prices could have a more visible impact on domestic consumption and growth in the region this year and in 2009.’

Central banks in emerging Asia face a dilemma about how to contain inflation through higher borrowing costs while avoiding snuffing out economic growth, Mr Kuroda noted. While rate rises may put the brakes on growth, ‘the risk would be even greater if prices spiral out of control’.

Despite inflation worries, the ADB chief expressed optimism about prospects for the region’s economies.

‘On the whole, economic growth in Asia is quite robust. A sharp slowdown is still unlikely in emerging Asian countries,’ he said.

‘I’m reasonably confident that nothing like the Asian currency crisis 10 years ago would happen in the region,’ he added, noting that countries had built up large foreign currency reserves.

The East Asian financial crisis began in 1997 when Thailand floated the baht after a series of speculative attacks, leading to a plunge in its value.

Other regional currencies also came under pressure and countries such as Indonesia, Thailand and South Korea were forced to turn to the International Monetary Fund for emergency funds to try to stabilise their currencies.

Source : Straits Times - 5 Jul 2008

They account for 20% of resale-flat purchases, say agents

PERMANENT residents (PRs) are flocking to buy Housing Board resale flats as high rents start to make ownership a more attractive option.

Sales to PRs have rocketed in the past two years, say property agents, and the keen army of buyers is helping to keep prices buoyant in an otherwise-flat market.

Property agencies PropNex and ERA Realty told The Straits Times that in recent months, about 20 per cent of total HDB home sales were driven by PRs.

This is a four-fold increase from two years ago, when PRs bought just 5 per cent of the homes sold, said ERA’s assistant vice-president Eugene Lim.

Last year, PRs accounted for about 10 per cent of sales, said PropNex chief executive Mohamed Ismail.The sales figures are even more striking for smaller flats like three- or four-roomers, with PR buyers snapping up 45 to 50 per cent of the stock, added Mr Lim.

HSR Property Group reports similar figures. PRs bought about 18 per cent of HDB homes recently, said executive director Eric Cheng.

The three agencies command about 80 per cent of the HDB resale market.

Last year, 29,436 resale flats changed hands. If the volume holds for this year, it will mean about 6,000 flats could be snapped up by PRs.

With HDB rents rising so fast, buying now ‘makes more economic sense’ than renting, say analysts.

Rents for a four-room flat in an established estate ranged from $1,000 to $1,200 two years ago. Today, they are $1,800 to $2,000, said Mr Ismail.

The penny has dropped for Mr N.E. Shanmugam, who had been renting here for eight years.

He pays $1,200 for a three-room flat in Tampines and was initially looking for a bigger unit to move when his lease expired next month. But with rents shooting up, he faced a monthly outlay of $1,800 for a five-roomer.

‘It didn’t make sense. I’m better off buying my own home,’ said the 56-year-old project manager, who is married with a one-year-old son.

Mr Shanmugam has just bought a five-room flat in Sengkang valued at $380,000. His mortgage will be $1,500 - well under what his rent would have been.

Singapore’s burgeoning PR population - and their purchasing power - has been singled out as one of the factors driving HDB resale prices.

While private home prices inched only 0.4 per cent this quarter, HDB flat prices climbed 4.4 per cent, following a 3.7 per cent rise in the previous quarter.

Singapore’s PR population rose from 287,500 in 2000 to 386,800 in 2005, according to the Department of Statistics.

Property agencies say about 70 per cent of the PR buyers are from China and India with the rest from countries such as Malaysia and the Philippines.

Source : Straits Times - 5 Jul 2008

Positive consumer sentiment and the Great Singapore Sale have provided some support for the retail property market in Singapore, according to property consultants DTZ.

It said given the general uncertain global outlook, tenants have resisted committing to higher rents, and this has kept the retail sector stable during the second quarter.

Going forward, analysts said they see at most a marginal increase of 2 to 3 per cent in rents for the rest of this year.

313@Somerset is part of the new wave of malls making a splash in Orchard Road. All together, some 5.4 million square feet of new retail space will be available by 2012.

Analysts said these new malls will lead the retail property rental market, while older ones will see rents stabilise at current levels, with little upside.

Donald Han, Managing Director, Cushman & Wakefield, said: “The new malls are looking at rentals higher than existing malls at Orchard Road. They’re looking at anything from 20-30 per cent higher. Prime retail space is always in demand.”

Cushman & Wakefield noted that there is little risk of oversupply as international retailers clamour for a piece of the Singapore market.

And although inflation may dampen domestic consumer spending, analysts said external demand from strong tourist arrivals is likely to offset that.

Mr Han said: “Into the next six months with the F1 arriving in September, we’ll only see a higher number of tourists on shore, which will effectively see higher tourism receipts, (a) positive spillover in spite of high inflation numbers over the next six months or so.”

With more malls fighting over the same tourism dollar, analysts said malls are starting to work harder to attract customers.

Turner Canning, Associate Director, Retail Consulting, Cushman & Wakefield, said: “(There is) a lot of criticism (that)… a lot of malls are cookie cutter, (with) similar shops, just in different configurations. You’re going to see that changing. It’s a global trend that malls are becoming more themed.”

Bringing in new retail choices is also another trend.

Chua Chor Hoon, Senior Director, Research, DTZ, said: “We notice that there are more new second-line brands coming, like Just Cavalli, which is a second line to Robert Cavalli. Emporio Armani is also coming. There are also more luxury brands from Europe coming here.”

This is in line with efforts by the Singapore Tourism Board to rejuvenate Orchard Road, turning it into one of the world’s premier shopping belts.

Analysts also said there is no fear that the Orchard belt will cannibalise suburban malls, as they serve different markets.

Ms Chua said: “The suburban malls… are in the heartlands, near residents. (They are) easily accessible. They serve residents’ daily needs, like groceries, daily wear necessities, personal services. These are complementary. In fact, the rentals in suburban malls can be as high as those in Orchard.” - CNA/ms

Source : Channel NewsAsia - 4 Jul 2008

Initial units are priced at $650 psf on average; Kovan Residences launched

CITY Developments Ltd (CDL) has begun to preview its much-awaited Livia condo at Pasir Ris at an average price of about $650 psf for the initial batch of units, BT understands.

And next to Kovan MRT Station, the 512-unit Kovan Residences is being soft launched today and the average price is said to be $870 psf. Both projects are 99-year leasehold.

Market watchers reckon that the $650 psf average pricing for the initial phase of Livia’s marketing effort is about 10 per cent lower than what the developer could have fetched 12 months ago. ‘It might have been priced at $730-750 psf last year,’ an industry observer suggested. The 724-unit condo is being developed at Pasir Ris Drive 1 on a plot that is part of the group’s historical Pasir Ris landbank acquired decades ago.

CDL is developing Livia jointly with Hong Leong Holdings and Hong Realty. All three companies are part of Singapore’s Hong Leong Group. Livia will have a total of 10 blocks, either 15 or 16 storeys high with units ranging from two-bedroom apartments to four bedders. There are also 12 penthouses.

Next to Kovan MRT Station, Centurion Kovan, controlled by UOB-Kay Hian stockbroker pair Han Seng Juan and David Loh Kim Kang, has been testing the waters for its 512-unit Kovan Residences. The average price is believed to be around $870 psf and industry talk is that some 20 cheques were offered to the developer after a well-attended dinner preview for Messrs Han’s and Loh’s stockbroking community contacts last Saturday. It is not known if options have been issued.

‘Perhaps some of the potential buyers may have found the developer’s proposed price a little challenging and made their counter offers with cheques,’ a market watcher suggested.

Kovan Residences’ soft launch begins today, BT understands. Officials from Centurion Kovan, part of the Duchess Development group, have not been returning BT’s calls over the past few days.

Meanwhile, the project that started the current home buying wave, Ho Bee’s 99-year leasehold Dakota Residences, is said to have sold 150 units since sales began a fortnight ago.

Source : Business Times - 4 Jul 2008