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A busy year on the horizon?
05:55 AM Nov 28, 2009
by Donald Han
EVEN though Singapore saw its worst economic recession since independence
this year, the property market remained relatively buoyant, with the
resurgence led by sell-out mass market condominium projects such as The
Caspian and The Alexis.
In the first 10 months of this year, developers sold 13,905 new homes -
almost three times that in the whole of last year. In fact, Q3 alone saw
developers selling 5,720 units – more than in the whole of 2008. Total sales
volume this year is likely to breach the 15,000 unit mark, exceeding 2007′s
record high of 14,811 new home sales.
This remarkable development was mainly supported by the convergence of huge
pent up demand, low savings deposit rate, stock market revival and a market
flushed with liquidity.
Twelve months ago, no one would have dared to predict a U-shaped property
market recovery, let alone a V-shaped rebound this year. Even the most
optimistic property consultant would not have anticipated Q3′s property
price index to have turned a corner, registering a mind-boggling
15.8-per-cent price rise quarter-on-quarter. With just about a month to go,
we are likely to end the year with a price hike of between 2 and 5 per cent.

With economic improvement and the ease of credit, developers have been busy
replenishing their land bank. Five Government sites, which have been on the
Urban Redevelopment Authority’s Reserve List since last year, have been
released from as early as July. The parcels represent the choicest
residential sites on the list, mostly within established residential
enclaves with reasonably close proximity to MRT stations, thus making end
products easily saleable.
The five sites attracted between six and 15 bidders per tender exercise.
Each of the successful bids exceeded initial reserve prices by between 2.32
and 3.07 times – a huge premium. Fierce bidding among developers translated
to high bids for land prices. With developers typically passing on this land
cost to buyers, one can only expect higher project launch prices when these
offerings come to the market.
But the Government’s release of a slew of 99-year leasehold sites the 1H2010
Government Land Sales (GLS) programme sees a variety of sites, some of which
may not translate to high selling prices.
There are two plum sites which developers have seemingly given a miss thus
far. These are within excellent strategic development zones which provide a
catalytic start to urban rejuvenation and being part of Government’s larger
decentralisation and suburbanisation programme.
The sales of sites at Kallang Riverside (for the development of hotel with
possibility residential component) and Jurong East Street 13 (a “white site”
zoning where part residential is permissible) at Jurong Gateway near to
Jurong Lake district are paramount examples. These sites have been placed in
the reserve list since last year, but they have not received the necessary
attention despite their immense potential and location appeal.
Developers should look at sites like these at Kallang and Jurong when
studying their choices in the GLS programme. After all, those that have
embarked in new and seemingly obscure development precincts have in the past
been rewarded with “first mover” advantage.
These include Ho Bee Group’s achievement at Sentosa Cove and the consortium
of Keppel Land, Cheung Kong Holdings and Hongkong Land’s success at Marina
Bay. Next year looks set to be a busy year for property developers. ¢
The writer is the managing director of Cushman and Wakefield Singapore. The
opinions expressed here are his own.
Copyright 2009 MediaCorp Pte Ltd | All Rights Reserved

Nov 28, 2009

S’pore firms shrug off Dubai default

Those with links to Gulf emirate expect little impact on tie-up projects

By Fiona Chan
THE debt troubles of Dubai World appear to have had a limited impact on
Singapore companies with links to the Gulf emirate.
Property group City Developments (CDL), which tied up with the Dubai
government investment company to develop the billion-dollar South Beach site
near Suntec City, said it does not expect ‘any impact at all’ on the site’s
development.
‘Dubai World holds only a one-third share’ of the development, a CDL
spokesman said yesterday. CDL has another third, and the last third belongs
to the United States-based El-Ad Group.
The spokesman told The Straits Times that no further capital needs to be
pumped into the project at present.
‘However, when the time comes for construction to proceed, all partners will
be required to put in their share of additional funds. Should Dubai World
decide not to contribute their proportionate share for whatever reasons,
their shareholding will be diluted.’
Dubai World had asked on Thursday for six more months to repay its debts,
sending global financial markets into a panic over Dubai’s possible
bankruptcy.
Analysts singled out banks as among the most vulnerable to a Dubai debt
default. The news could have a ‘meaningful impact’ on banks across Asia,
said Mr Daniel Tabbush, a banking analyst at CLSA in Bangkok.
He listed Standard Chartered, HSBC and Singapore’s DBS Group as the most
exposed in the region.
DBS has a branch in Dubai that was opened in 2006, marking the bank’s first
foray into Islamic finance. DBS could not be reached for comment yesterday.
Along with United Overseas Bank and OCBC Bank, DBS is also part of a
syndicate helping to finance CDL’s South Beach project.
Market observers said the banks that have exposure to Dubai only through the
South Beach project are unlikely to be affected by Dubai’s financial
problems, as they will have collateral in the form of the property.
Public transport company SMRT also has a partnership with Nakheel, a
property developer that works under the umbrella of the Dubai World group.
SMRT has a six-year contract worth about $120 million with Nakheel to
operate and maintain a monorail running through the Palm Jumeirah
development in Dubai.
In response to queries about how Dubai’s debt difficulties would affect
SMRT, chief operating officer Yeo Meng Hin said the impact to the monorail’s
operations, if any, would be minimal.
‘We are long-term partners with Nakheel, and will continue to work closely
with its management during this challenging time,’ he said.
Other Singapore companies that have crossed paths with Dubai World include
Labroy Marine and Pan-United Marine. The Dubai firm bought both Singapore
shipyards in 2007 for about US$2 billion (S$2.7 billion).
Earlier that year, Dubai World’s sister firm Dubai Ports World grabbed
headlines in Singapore when it beat PSA International to buy P&O Ports for
£3.9 billion (S$8.8 billion).
<mailto:fiochan@sph.com.sg> fiochan@sph.com.sg
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From fishing village to desert paradise in 40 years
IN A land seemingly built for the purposes of conspicuous consumption, Dubai
never lacked extravagant icons of success.
The most extravagant – and most emblematic of the once sleepy fishing
village’s transformation to oasis playground for the rich – were surely the
palm tree and the sail.
In keeping with the tiny Gulf emirate’s grandiose vision, both were
artificial. One was a set of man-made islands in the shape of palm trees and
the other the sail-shaped Burj Al Arab, the world’s most expensive hotel.
Then there was the man-made harbour, the largest in the world, built at
Jebel Ali while a free-trade zone was created around the port, catapulting
Dubai into the league of major international business hubs.
Billing itself as a safe haven within a volatile region for investors and
tourists alike, Dubai, which discovered oil in 1966, tripled its economy to
US$34.5 billion (S$47.9 billion) in the 10 years to 2006 and achieved
double-digit growth every year until the financial crisis struck.
Its expansion was relentless. By last year, foreign direct investment into
Dubai totalled US$21 billion, according to the Financial Times.
The Gulf emirate established itself as the region’s trade and tourism hub,
developing businesses such as port operator DP World that became leaders in
their field.
It also set out to become a world-class financial centre, competing with the
likes of New York and London and boasting an edge in the burgeoning area of
Islamic finance.
In 2007, Dubai and Qatar became the two biggest shareholders of the London
Stock Exchange, the third-largest bourse in the world.
Within its own borders, Dubai embarked on a massive six-year building boom
that turned sand dunes into a glittering metropolis and the city into a
magnet for the young, rich and glamorous.
No project was too lavish for Dubai. It is home to the world’s biggest
shopping mall – the 1,200-shop Dubai Mall – and will have the world’s
tallest building when the 160-storey Burj Dubai is completed next year at an
estimated cost of US$1 billion.
The Burj Al Arab hotel was itself the tallest building in the world when it
was completed in 1999. The hotel gave itself a seven-star rating – the first
in the world – and watched as the publicity, room rates and bookings
rocketed.
Dubai made the unthinkable possible with Ski Dubai, which opened in 2006 to
offer the ultimate in luxury: skiing in the desert, on one of the world’s
largest indoor ski slopes with fresh powder all year round.
Celebrities converged on Dubai’s sands, with David Beckham and Brad Pitt
reportedly owning villas in the Palm Jumeirah development, the only one of
three planned palm-tree shaped islands that has been completed.
The future of the other two Palm islands is now up in the air – much like
that of Dubai itself.

Business Times – 28 Nov 2009

Resorts World househunt reaches into HDB heartland
Property consultants say Sentosa IR is scouting for rental flats for some of
its foreign staff
By EMILYN YAP
VISITORS to the Universal Studios theme park in Resorts World at Sentosa
(RWS) will soon be able to live out adventures seen in various movies. There
will be zones based on films such as Madagascar, Shrek and Jurassic Park, to
bring thrill-seekers to a make-believe world far away from home.
For some employees at RWS, being away from home will also be a new
adventure. The integrated resort will be hiring a considerable number of
foreigners, and it is said to be searching for hundreds of HDB flats to help
them settle in. C&H Realty managing director Albert Lu said that RWS is
looking for HDB flats to rent, and approached his firm a few months ago to
find out about the rental market. RWS did not share many details then, but
the number of flats is ‘in the hundreds’, he told BT.
Another property market insider who declined to be named also said that RWS
has been ‘aggressively looking for flats to rent’, and is probably in need
of ‘a few hundred’ units.
So far, there is no official statement on the number of foreigners that RWS
could hire. Overall, it will employ about 10,000 people when it opens next
year. RWS spokesman Robin Goh told BT that it remains committed in
recruiting Singaporeans and Singapore permanent residents.
A media report in June noted that RWS had hired 600 workers, of whom 80 per
cent are locals. Assuming that the local-foreign ratio stays constant, its
headcount from abroad could reach 2,000.
Going by HDB rules, one- or two-room flats can each be rented out to at most
four people; three-room flats to at most six people; and four-roomers or
bigger flats to at most nine people. Assuming that RWS hires 2,000
foreigners and all of them rent four-room flats, it would need to find at
least about 220 units.
Mr Goh said that RWS started looking for ‘suitable accommodation’ for
foreign staff early this year, with help from a ‘reputable service
provider’. He did not specify the types and number of housing involved.
‘To help reduce their stress and anxiety of relocating overseas, we assist
our foreign team members in addressing one of their basic needs -
accommodation,’ he said. ‘We make sure that they settle down comfortably as
well as enjoy working and living in Singapore.’ And it is important for RWS
to keep its employees happy because that could enhance their work
performance and in turn, visitors’ experience at the integrated resort, he
said.
Mr Goh added that RWS considered several factors in choosing accommodation,
including the place’s accessibility and proximity to amenities such as
convenience stores. ‘The locations we have chosen facilitate good
interaction between the local community and foreign talent,’ he added. BT
understands that units at Tiong Bahru and Toa Payoh have been found.
C&H Realty’s Mr Lu said that he believes that RWS would want flats in areas
near Sentosa, such as Telok Blangah. But he pointed out that the supply of
rental flats in such central locations is tight, and RWS might have to
broaden its search to estates near MRT stations.
Rents of HDB flats in the central region rose between the second and third
quarter of the year. For instance, the median sub-letting rent for a
four-room flat in the area increased from about $2,000 to $2,200.
HDB’s website shows that up to the third quarter of this year, the agency
has granted 11,235 sub-letting approvals. The bulk of these – 3,978 or 35
per cent – were for three-room flats. Another 3,593 approvals were for
four-room flats.
Also, looking across all towns and flat types, median sub-letting rents have
remained relatively steady from the first to third quarter.
Dennis Wee Group director Chris Koh observed that the HDB rental market is
‘more stabilised’ compared with the period when collective sales were rife
and many displaced residents were looking for lodging. His firm has seen
more rental enquiries direct from foreigners working with RWS.
Marina Bay Sands, the other integrated resort due to open next year, has not
engaged property agents to look for accommodation for its foreign staff.
‘Housing arrangements will take into account the needs of the prospective
foreign employees,’ said a spokeswoman. ‘At this time, Marina Bay Sands is
giving priority to attracting and selecting Singaporeans and permanent
residents for our job opportunities.’
Copyright C 2007 Singapore Press Holdings Ltd. All rights reserved