Complete Property Market Updates of Singapore

June 24, 2008

Govt agencies asked to tighten CBD space usage

Filed under: Agency News,Commercial,General — Propertymarketupdates @ 3:01 am

New exercise targets efficient use to free up more space for private sector

GOVERNMENT agencies in the Central Business District have been told to re-evaluate their office space needs in light of the current office space crunch, even if these agencies own their buildings.

It is understood that the Ministry of Finance (MOF), which oversees all government office relocation projects for government ministries and statutory boards, has recently issued a directive asking these government bodies to look into the possibility of compacting their offices.

Asked to comment, a spokesman for MOF said: ‘MOF and MND (Ministry of National Development) are working with government agencies to make more efficient use of office space. This is part of the government’s effort to better manage its resources.’

While MOF did not reveal to what extent this exercise is being undertaken, it is expected to be on top of the 20,000 sq m of office space that Finance Minister Tharman Shanmugaratnam said the government would free up in February.

The Urban Redevelopment Authority (URA) for one, has confirmed that it is indeed looking at compacting its office space at the URA Centre on Maxwell Road to make space available to the private sector.

A spokeswoman for URA said: ‘We will be consolidating our office space to achieve greater space efficiency. We are still reviewing and are unable to say at this stage how much space can be freed up for rental.’

URA also said that it expects the consolidation to be completed by 2009/2010.

This latest exercise is a slight departure from earlier government office space crunch measures in that the agencies involved are not expected to move out of the CBD.

As such, URA will not be following the Singapore Land Authority (SLA) to Revenue House at Novena. Nor will it be following the Economic Development Board (EDB) to Fusionopolis at one-north in Buona Vista.

‘All the URA divisions will be staying at The URA Centre,’ added its spokeswoman.

But while SLA and EDB – currently located at Temasek Tower and Raffles City respectively – do not own their offices, URA does.

The 16-storey URA Centre, which was opened in 1999, was designed by Kenzo Tange Associates at a cost of $118.9 million.

And it could now prove to be a generator of considerable rental revenue.

Cushman and Wakefield managing director Donald Han says that rents at nearby Capital Tower and Temasek Tower are currently $16-$18 and $12-$13 psf per month respectively.

Prime office space is a luxury these days and Mr Han reckons that government bodies that occupy space in the CBD, may need to ‘justify’ their occupation of the space, even if they own it.

It is not known what the efficiency of office space at government-owned buildings such as URA Centre is but Mr Han says anything above 150 sq ft per person, ‘is a luxury’.

‘The industry standard in the private sector is between 80-130 sq ft per person,’ he explained, adding that cutting space usage by 50 sq ft per person and improving ‘operational efficiency’ could amount to quite a lot of new, leasable space, especially at today’s rates.

Colliers International director (research and advisory) Tay Huey Ying also believes that the MOF directive could be revenue driven rather than just a move to help ease the office space crunch.

As Ms Tay points out, the URA and other government bodies do pay rent even if they own their own buildings. But it is not known what rent they pay. ‘The rents could be tied to market rates but it could also depend on the accounting system,’ she added.

Ms Tay nevertheless lauds the move. ‘At this point in time, any freeing up of space will help the supply crunch,’ she said.

Interestingly, Mr Han believes that with the announcement of new growth areas in the Draft Master Plan 2008, even more government agencies could be moving out of the CDB, if only to help kick-start these areas.

‘To be a catalyst in these areas, it cannot be left to the private sector because the lack of amenities will mean land prices in initial land sales sites will be low and this could lead to price distortions,’ he explained.

Source : Business Times – 27 May 2008


June 21, 2008

Hersing in JV talks to buy up to $300m storage facilities

Filed under: Agency News,General — Propertymarketupdates @ 6:45 pm

Property-related Hersing Corporation on Monday said it is negotiating with a leading global real estate fund regarding a possible joint venture (JV) in the self-storage business.
The purpose of the proposed JV is to acquire and develop properties worth up to $300 million (US$221 million) in order to expand StorHub’s selfstorage facilities in Asia Pacific.

Hersing provides professional real estate brokerage, valuation, consultancy, property management, money transfer and storage facilities services through ERA, RIA, Coldwell Banker, Western Union and StorHub Self-Storage.

The proposed JV remains subject to, among other things, the fund’s satisfactory due diligence, the negotiation and execution of definitive agreements in relation to the proposed JV and the acquisition of new sites, other customary conditions precedent to completion and approval by Hersing’s shareholders.

The directors emphasized that no binding agreement in relation to the proposed JV has been entered into, and the proposed JV may or may not materialise. — BT newsroom

Source : Business Times – 26 May 2008

May 12, 2008

Fee dispute: PropNex drops lawsuit against couple

Filed under: Agency News,General,Legal Ground — Propertymarketupdates @ 3:07 am

PROPERTY company PropNex is dropping its lawsuit against a couple who refused to pay the seller’s agent the 1 per cent commission after buying a home.

Both sides reached an agreement after a mediation session on Tuesday, which PropNex said yielded a ‘win-win’ conclusion. They declined to disclose the terms of the settlement.

If the case had gone to trial, it would have turned the spotlight on the contentious issue of whether home buyers should pay a fee to sellers’ agents.

PropNex associate director Ricky Low Yong Sern, who was the only agent handling the sale of a terrace house in Whampoa last year, had sought about $4,000 in commission or a service fee from the buyers, marketing specialist Loh Yi Min, 29, and his wife Ariel Wee, a 33-year-old polytechnic lecturer.

The couple bought the house – built over 30 years ago and classified as a Housing Board flat – for $400,000 in April last year. They did so without hiring an agent.

According to court documents, PropNex’s Mr Low claimed that he had provided services to them.

But the buyers refused to sign the commission agreement, saying they had not agreed to pay him a fee.

PropNex chief executive Mohamed Ismail said of the first such lawsuit initiated by his company: ‘It has been amicably settled, so we are withdrawing the case. PropNex initiated this on the grounds that a fair amount of work has been done by the agent to start off with. This negotiated settlement takes into consideration both parties’ views.’

Ms Wee, however, called for rules requiring property agents to state clearly what services they were providing independent buyers that would justify the commission.

‘And we really need to see whether the same agent can represent both the buyer and seller – it’s a complete conflict of interest,’ she added.

The issue of commissions payable by buyers who deal without agents has been hotly debated in recent years. The law does not fix agents’ fees, but most property sellers pay their agents a commission of 2 per cent of the selling price, while buyers foot 1 per cent.

Many agents marketing HDB flats also charge independent buyers a 1 per cent fee, but this is not practised for transactions involving private property.

This difference, say agents, comes from the lower prices of HDB flats, which translates into a lower commission. The sale of HDB flats involves more paperwork, they add.

Disputes arise when sellers’ agents tell independent buyers about the commission only just before sale papers are signed.

Agents, on their part, say independent buyers often leave the sellers’ agents to handle the paperwork but refuse to pay a service fee.

Source : Straits Times – 8 May 2008

JLL re-entering housing project sales business

Filed under: Agency News,Developer News,General,Market Watch,World Property — Propertymarketupdates @ 1:13 am

JONES Lang LaSalle (JLL) is poised to re-enter the Singapore residential project sales business after a hiatus of about seven years.

It has clinched appointments to market Floridian, a 336-unit freehold condo development in Bukit Timah by Far East Organization and Wing Tai Holdings, as well as Lippo’s Centennia Suites at Kim Seng Road.

It is also marketing 34 units at the completed 99-year leasehold Amaryllis Ville condo in the Newton area on behalf of Goodearth Hotel group of Australia. Goodearth – controlled by the family of the late Teo Lay Swee, who used to own the Cockpit Hotel site – bought the 34 units from the project’s developer, Wing Tai, about two years ago and is expected to sell the units for about $1,500 per square foot (psf).

JLL will focus on the upper end of the Singapore residential market, rather than the mass market. ‘As well as marketing Singapore residential projects here, we’ll market them through our international office network,’ JLL managing director (Southeast Asia) Chris Fossick said in a recent interview with BT.

‘I believe that with an increasing number of overseas buyers in the local market, the benefits of an international marketing campaign will grow in importance. We believe we can stay ahead of the game because we already have successful residential project sales businesses in Hong Kong, Jakarta and London, and a large presence in India, China, Korea, Japan and the UAE – we can mine our database of international investors in these places when marketing Singapore residential properties.’

‘We believe the proportion of foreign buying in the Singapore housing market will continue to increase. Singapore is a destination for people to want to be in; it’s becoming an exciting place,’ Mr Fossick added.

He views the current slowdown in housing sales here as a temporary thing, ‘driven by sentiment, not fundamentals’.

‘The fundamentals for Singapore and Asia remain very strong. But we’re being somewhat sidetracked by the goings-on in the world credit market.’

The property consulting group will also step up investment sales of Singapore residential properties – for instance, by matching foreign property funds/ institutional investors with local developers buying land for housing projects here, or helping these investors purchase stacks of apartments in new projects.

‘The other idea we have for our residential business is to help Singaporeans who want to diversify into overseas property investments. The UK market, for instance, has been so high for so long and the currency so strong, we feel that for the last five years, UK has not been overly attractive. But that could change over the next 12 months.

‘The pound has been coming off against the Sing dollar. But I think UK home prices have to come down further, but may be in 12 months, UK property might start looking reasonably attractive.’

Helping JLL achieve some of its new business plans is Julian Sedgwick, who joined as a local director in JLL Singapore’s residential investments department earlier this year. He used to work with Chesterton London, where he marketed homes and condos in Central London.

‘He brings an international flavour, and some new ideas on how they do project sales in London versus how we do it here. He will be quite helpful to Jacqueline Wong, who heads our Singapore residential business,’ Mr Fossick said.

In a separate development, JLL regional director and head of investments Lui Seng Fatt is leaving the group. Mr Fossick confirmed Mr Lui’s departure. ‘He made a decision to move on. We’re grateful for his contributions in the success of our investment business and wish him the best on his new ventures,’ he added. Mr Lui, who is overseas, could not be reached for comment.

Meanwhile, Mr Fossick is expected to oversee the investments department. ‘We’ve got a big team; we might as well find somebody within that team to take the helm.’

Source : Business Times – 6 May 2008

May 9, 2008

Reach out to your customers the smart way

Filed under: Agency News,General,Property Add Value,Property Investment — Propertymarketupdates @ 2:50 am

BUSINESSES in Singapore are learning to tap infocomm to transform their processes and gear themselves up to take advantage of new market opportunities. An example is real estate company HSR, which pioneered a new way for its agents to help buyers find their dream home using a system called SMARTplus.

A SMARTplus programme called iMatch enables HSR agents to specify the criteria for the house they are looking for their buyers. On finding a perfect match, the system will alert the agent via SMS and send an email with more details about the property. Agents can also view the latest property listings online, with just a few clicks of the mouse.

SMARTplus also comes as a boon for the agents. They can now discuss issues, share their opinions and seek advice on the online forum, and update themselves on upcoming courses and events using the HSR eCalendar. By allowing agents to work from any location that has Internet access, the system has also enabled them to cut down on travelling and make more productive use of their time. In fact, the system has been so popular that HSR increased its recruitment of agents by up to 40 per cent with its implementation.

Like HSR, used car exporter Sunauto has also been leveraging on infocomm to reach out to customers in new and innovative ways while enhancing staff efficiency.

Sunauto exports quality used cars to various parts of the world, and has also made inroads into the parallel import market. All these have been made possible through the development of an online presence, backed by a system that automates many of its processes.

Today, instead of paper-based orders, Sunauto’s customers can order used cars online.

Through the company’s website, they can access the latest information on the used car inventory, and view the photos and specifications of vehicles.

At the same time, manual tasks such as the storage and retrieval of car photographs and other data have been automated, reducing the manpower required and cutting down on errors due to inconsistent information or missing documents. These developments have helped to free Sunauto’s manpower resources to focus on broadening its business lines and developing its regional strategy.

Like HSR and Sunauto, SMEs in Singapore can learn to leverage on infocomm to expand their market reach and tap new business opportunities.

A good starting point would be to tap the Technology Innovation Programme (TIP), which is jointly administered by the Infocomm Development Authority of Singapore (IDA) and Spring Singapore.

Calling on more SMEs to take advantage of the programme, Lo Yoong Khong, Cluster Director, IDA, said: ‘If you have an innovative idea on how infocomm can better your business, make use of the support from TIP to turn it into a reality. Through the adoption of infocomm, businesses can make a difference in the way they operate. Infocomm can relieve them of the operational challenges they face daily, and allow them to focus on sourcing for new markets and business opportunities.’

This article is contributed by the Infocomm Development Authority of Singapore (IDA)


Infocomm public education for SMEs

The Technology Innovation Programme (TIP) supports SMEs in infocomm innovation projects and helps to defray up to 50 per cent of the qualifying cost. TIP can also defray up to 70 per cent of the qualifying cost for industry-wide projects.

Source : Business Times – 6 May 2008

February 29, 2008

No need to form new estate agents’ group

Filed under: Agency News,Community Voices — Propertymarketupdates @ 6:58 am

I REFER to the article, ‘Plans for new group to lift standards of housing agents’ (ST, Feb 4).

Legislation for individual estate agents is already in place in many neighbouring places, for example, Malaysia, Hong Kong, Macau and Australia. Why not a First World country like Singapore?

In 1998, three organisations amalgamated to form the Institute of Estate Agents (IEA). Setting up another association is a pure waste of resources – and gives the impression of a divided and fragmented industry. The best solution is for all to get involved, resolve problems and evolve. Unity, a standard set of self-regulation and self-policing measures are the only way to move forward with IEA.

An accreditation scheme was launched in 2005 to raise industry standards. Clearly, three years on, standards have not improved. Statistics provided by the Consumers Association of Singapore (Case) show complaints against agents continue to rise. The scheme has not solved problems, raised industry standards or injected more confidence among consumers.

If parties are serious about the state of affairs and cleaning up the industry, be it raising standards or information sharing, IEA’s doors are always open. It is more sensible to work together to address and resolve industry problems quickly and resolutely, working on an ability to recommend solutions to meet future challenges. Practitioners should decide what is best for the industry.

Make estate agents responsible and accountable for their actions, especially when they are dealing with consumers’ biggest asset. Over time, with tighter control it will raise industry standards and lead to better service, more discipline and higher professionalism. Eventually, there will be fewer complaints about estate agents.

IEA plays an active role in promoting public awareness and keeping estate agents abreast of the latest housing policies. The IEA Central Registration Scheme is supported by more than 354 licensed real estate agencies with well over 21,000 real estate agents’ names. It also acts as a platform for IEA to disseminate information and exchange programmes with agency bosses.

IEA and Case are presently working closely to provide solutions towards self-regulation of estate agents and setting up self-policing measures. It is time we stood together and united as one body that truly looks after the interests of all estate agents and that of consumers who engage the services of estate agents in Singapore.

Jeff Foo President, Institute of Estate Agents

Source : Straits Times – 15 Feb 2008

February 28, 2008

Why confuse people with a new association for real estate agents?

Filed under: Agency News,Community Voices — Propertymarketupdates @ 11:59 pm

I REFER to the article, ‘Plans for new group to raise standards of housing agents’ by Ms Tan Hui Yee (ST, Feb 4).

Being the founding member and council member of the former Association of Singapore Realtor (ASR), now known as IEA (Institute of Estate Agents), I am surprised to see my former council member of ASR and past president of the IEA wanting to set up another association with the reasons of raising standards or covering more grounds.

If this new group has the interest of the realtors and the real estate industry at heart, then it would make more sense to work with the IEA. Why waste resources, time and personal commitment which, I doubt, many can give to form this new association. And would the new association be more effective or is it a clash of personalities?

From my understanding from the realtors, I believe the present IEA has done a fairly good job for realtors in Singapore. They have the Central Register Scheme (CRS) which is already well supported by the majority of the larger agencies. Be it raising standards, sharing of information or conducting courses, I believe these are being done by the IEA. As reported in the newspaper, the IEA has captured more than 354 licensed agencies and about 21,000 agents’ names. The bulk of the industry’s players have been supporting it since 2006. Why confuse people with another register or association now?

More importantly, now, for the IEA is to work harder for the day when we can see the association governing realtors in Singapore, like the Singapore Institute of Architect or the Singapore Medical Council.

As the saying goes: Rivalry will surface when there is more than one tiger in the hills. Work together in unity for the betterment of the industry and not oneself.

Khoo See Pheng

Source : Straits Times – 14 Feb 2008

GIC RE takes 40% stake in Finnish mall

Filed under: Agency News,Commercial,World Property — Propertymarketupdates @ 11:48 pm

Deal worth 131.6m euros; partner Citycon Oyj to manage project

GIC Real Estate, the property investment arm of the Government of Singapore Investment Corporation, has partnered Finnish retail property investment company Citycon Oyj to acquire a 40 per cent stake in a Helsinki mall called Iso Omena for 131.6 million euros (S$271.7 million).

In a statement yesterday, GIC RE said Citycon will hold 60 per cent of Iso Omena upon completion of the deal.

Citycon – which owns 22 shopping centres in Finland, eight in Sweden and three in other Nordic Countries – will be responsible for the business and management of Iso Omena.

The centre is Finland’s fifth largest and has a wealthy catchment area, GIC RE said. Its total net lettable area is 61,300 sq m, of which 49,000 sq m is retail space.

Citycon acquired Iso Omena from funds managed by private equity firm Doughty Hanson for 329 million euros in September 2007.

According to a statement released by Citycon then, the shopping centre’s net yield on the purchase price was 4.5 per cent. Citycon said that after redevelopment and other improvements, it estimated the net yield would increase. Iso Omena has planning permission for an extension of some 7,000 sq m.

Citycon CEO Petri Olkinuora said of the GIC RE deal: ‘With this agreement we will release capital for the redevelopment of our property portfolio in accordance with our strategy. This business concept may also become part of our strategy and source of capital.’

This is the third property deal that GIC RE has announced this year. Last week it entered into a joint venture to take a S$416.1 million stake in Roma Est Shopping Centre in Italy with with ING Real Estate. It also said it will develop a township on a site in Russia with a market value of US$1.33 billion.

Also last week, it was reported that GIC plans to acquire The Westin Tokyo for about S$1.02 billion.

Source : Business Times – 14 Feb 2008

Some small property launches but most still hold back

Filed under: Agency News,Developer News,Market Watch,Property Deal — Propertymarketupdates @ 11:12 pm

Developers selling projects abroad first before launching them in Singapore.

PROPERTY developers are starting to gingerly test the volatile market with a few launches now that the festive season is behind them.

Those dipping their toes into the choppy waters, however, are mostly offering smaller projects away from the prime areas, said property agents.

Home seekers may have to wait a bit longer for major launches, with the earliest set for next month or April.

Meanwhile, developers waiting for the market to regain momentum are selling Singapore projects overseas before launching them locally, said Mr Ku

Swee Yong, director of business development and marketing at Savills Singapore.

‘Developers are still waiting for the stock market here to settle down,’ said Mr Ku.

Savills is dispatching a large sales team to Dubai next week to market Skypark at St Thomas Walk, CapitaLand’s condo on the Silver Tower site in Cairnhill, and the units Kuwait Finance House bought in Reflections at Keppel Bay and Goodwood Residences last year.

For local buyers, one project likely to be launched within weeks is the 47-unit Cosmo at Guillemard Lane. Prices could be $1,100 to $1,200 per sq ft (psf), said Mr Patrick Oei, associate group director for Huttons Real Estate, which is marketing the project.

Another upcoming launch is that of the 108-unit Verve Residences near Jalan Rajah, with prices likely to range from $900 to $1,100 psf.

These prices are similar to recent transactions in each area, showing that levels are still holding steady.

Homebuyers also picked up a few units in three freehold boutique projects launched in Telok Kurau recently. One is the 28-unit Costa Este, which is selling at $663 to $980 psf. The others are Palm Galleria and Espira Spring, launched during the Chinese New Year weekend with average prices of $850 to $870 psf.

Generally, smaller projects have done well, even in shaky market conditions, said Mr Oei, citing Casa Fortuna in Balestier and Wilkie 80 in Wilkie Road. Both were sold out within three days of their launches late last year. The 106-unit Casa Fortuna sold at about $1,000 psf, while Wilkie 80’s 50 units were taken up at $1,500 to almost $1,800 psf, Mr Oei said.

As for bigger projects, the first phase of Waterfront Waves at Bedok Reservoir will be officially launched this weekend. Prices for the 60-odd units still unsold will rise marginally from the current average of $750 psf, said Ms Kellie Liew, a project director at HSR Property Group.

The next brand-new launch may be Frasers Centrepoint’s Martin Place Residences in Kim Yam Road, due next month. Staff previews for the 302-unit condo started last month, at $1,800 to $2,300 psf.

Other launches to look out for include the delayed Marina Bay Suites and Ho Bee’s project at Dakota Crescent.

Not all industry players, though, have high hopes for upcoming launches. ‘The market is really quiet,’ said one agent. ‘Showflat crowds have thinned out to five or 10 people at a time. We’re still placing advertisements, but no telephone calls are coming in.’

Source : Straits Times – 13 Feb 2008

Rising cost of going en bloc adds to cooler market

Filed under: Agency News,Collective Sale — Propertymarketupdates @ 6:17 pm

New rules bump up lawyers’ fees, draw out collective sale process by months.

GOING en bloc is now a more costly and time-consuming business for home owners because of a new set of stricter rules implemented last October.

The rules – aimed at making the process more regulated and transparent – have bumped up the price of organising a collective sale by about 20 per cent to 30 per cent and drawn out the process by a few months, say property consultants.

Most of the higher cost comes from rising lawyers’ fees, which have doubled or trebled to reflect a similar increase in workload.

According to one industry source, lawyers ‘previously charged maybe $2,000 per household, but now they can charge anything from $3,000 to $6,000′.

Among other things, the new rules now require a lawyer to be present whenever a resident signs a collective sale agreement and to explain the terms of the agreement to each resident during the signing process.

Lawyers may also have to assist the owners in vetting the minutes of sale committee meetings, as well as draft motions for the general meetings, said Ms Tng Peck Chin, the partner in charge of collective sales at law firm WongPartnership.

Another law firm, Rodyk & Davidson, said it has mostly tried to double its fees, although the actual increase varies from estate to estate.

Rodyk partner Lee Liat Yeang said the new rules now double or treble the amount of time lawyers need to put in to get a collective sale going.

‘Also, looking at market conditions, prices are already quite high,’ he said. ‘Lawyers worry that a buyer cannot be found and nothing will materialise from all the effort they had to put in at the initial part.’

In addition to higher lawyers’ fees, owners now need to bear the cost of a valuation report for the estate, previously not a requirement, said Mr Karamjit Singh, the executive director of Credo Real Estate, which specialises in collective sales.

The report can cost between $100 and $300 per owner, depending on the size of the project, he said.

Some marketing agents have also raised their fees. Savills Singapore’s investment director, Mr Steven Ming, said the firm now charges about 15 per cent to 20 per cent more to make up for ‘the extra effort and time’.

Mr Shaun Poh, a senior director of investment advisory services at DTZ Debenham Tie Leung, said while there has been no ‘great jump’ in the fees his firm quotes, there is no longer any room for bargaining.

‘Previously, it was very competitive. We used to make our fee more negotiable,’ he said. ‘Now, if we quote a fee, we will stick to it.’

A big reason is that it takes much longer to get a collective sale going under the new rules.

One rule, for instance, provides for a five-day cooling-off period during which a home owner may still change his mind after he signs a collective sale agreement.

‘Last time, consultants would meet an owner, persuade him of the benefits of going en bloc, and he could just sign the agreement,’ said Savills’ Mr Ming.

‘Now, we have to meet them. After they agree to sign, we have to schedule another time for the lawyer to come down to witness the signing.

‘If it all goes well, that’s good, but if they change their mind later, we may have to go through the whole process a few times.’

In the four months since the rules were changed, not a single estate has gone up for sale under the new system.

And while the property boom last year owed much to an unprecedented collective sale frenzy, the almost silent collective sale market now is similarly contributing to the cooling property sector.

Marketing agents say plans for a sale are under way at several developments, although most are still in the preliminary stages.

Source : Straits Times – 9 Feb 2008

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