A SHORT-TERM office site on Mohamed Sultan Road that the Government failed to sell two years ago has garnered renewed interest.

A developer has agreed to put in a bid of $9.33 million for the land – twice the offer that came in for the site in 2008.

The new bid for the 0.62ha spot has triggered a public tender that will start in two weeks’ time, the Urban Redevelopment Authority (URA) said yesterday. It did not identify the developer.

Located between Kim Yam Road and Martin Road, the site can host a four-storey building with a total floor area of almost 100,000 sq ft. It is being sold with a shorter-than-usual 15-year lease.

In August 2008, the URA put the site up for sale without waiting for a developer to make an offer. That was to ease a space crunch that was sending office prices soaring. But the financial crisis struck the next month, resulting in only one bid coming in, at $4.65million. The URA rejected the bid as too low.

Since then, the office market has slumped and is just starting to turn the corner. Prices rose 1 per cent in the final quarter of last year, the first increase in six quarters, according to URA data.

But property consultants do not see the fresh interest as a sign of brighter days for the market.

Mr Li Hiaw Ho, executive director of CBRE Research, said there is still more than ample supply of office space over the next few years, so the bidder for this site is more likely to be a company that needs office space rather than a developer anticipating an upturn in the market.

Separately, a housing site has also been put up for sale by its owners. Holland Hill Lodge, an 11-unit freehold development in Holland Hill, has been launched for collective sale.

The estate, built in the mid-1990s, sits on a 9,033 sq ft site with an existing gross floor area of 18,086 sq ft, said marketing agent Credo Real Estate yesterday. All the owners have agreed to the sale and are asking for $15 million to $16 million, or $1,038 to $1,107 per sq ft of gross floor area.

Source : Straits Times – 29 Jan 2010

WELLNESS provider Mary Chia is looking to move into the hotel business with the launch of a new integrated hotel and lifestyle centre.

The company has entered into a joint venture with businessman Lee Boon Leng, the son-in-law of executive chairman Mary Chia, to set up a firm called Hotel Culture.

It has paid $20 million for three properties on Mosque Street that will be converted into a combined hotel, lifestyle and wellness centre. There will also be a food and beverage business on the 21,399 sq ft site.

Mary Chia is slated to run the beauty, facial, spa and massage business, Mr Lee will be responsible for the food and beverage aspect, while a third party will be appointed to manage the hotel.

The 92-room integrated hotel, which is to emerge from the four-storey conservation shophouses, is expected to be completed by the third quarter of this year.

Mary Chia chief executive Wendy Ho said the property in the heart of the Chinatown heritage zone would charge between $150 and $180 per night and benefit from the tourist flow generated by the integrated resorts.

‘We are targeting people… who will enjoy all the spa, F&B and entertainment facilities combined with a boutique hotel stay,’ she added.

Ms Ho is bullish about her company’s investment, citing positive feedback from the surveys it has conducted.

The bulk of the $20 million bill for the property will be funded by $16 million worth of bank loans, with Mary Chia and Mr Lee extending another $3.5 million to Hotel Culture as shareholders’ loans.

The remaining $500,000 will come from the paid-up share capital of Mary Chia and Mr Lee’s stakes in the company.

Mary Chia paid $255,000 for its 51 per cent stake in Hotel Culture, while Mr Lee owns the remaining 245,000 shares. The loans extended are proportionate to their shareholdings.

Ms Ho said most of the firm’s investment would come from its initial public offering, which succeeded in raising $3.9 million last August.

‘We believe it is a worthwhile investment, and we will look into our costing,’ she said. The firm reported a net profit of $119,000 for the six months ended June last year.

Restaurant operator, Taste Paradise, which currently operates at two of the three units Hotel Culture is acquiring, has confirmed that it will be moving out.

Source : Straits Times – 29 Jan 2010

THE Law Ministry’s reply on Thursday (‘En bloc sale panels already have a lifespan’) to my letter on Monday (‘Save owners from sword of Damocles’) has not addressed the following problem.

As I understand it, a collective property sale expires one year after the first subsidiary proprietor has signed the collective sale agreement. However, until this signing process is triggered, a collective sale committee has, in legal fact, indefinite tenure.

Which means that even if it chooses to stay around for 20 years, legally there is no mechanism to disband it automatically.

The ministry suggests that the owners can do so by holding an annual general meeting (AGM) or extraordinary general meeting to do so. No doubt this is so. This means that those who oppose a collective sale must become active in collecting signatures and rally for votes.

My question is: Shouldn’t the law be refined to have an automatic mechanism to disband a sale committee, which has, after say 12 months, not even collected that first signature?

This is a loophole in the law which should be addressed. No committee should have carte blanche to exist indefinitely.

The law is clear on management councils. These must be dissolved and re-elected at an AGM and have a limited tenure of one year.

Why should collective sale committees be allowed to operate indefinitely unless they choose to dissolve themselves or are booted out?

In my condo, the collective sale committee is restarting the process after 27 months. One member has sold and others have moved out of their condo units.

More than 10 per cent of the residents are new owners. They did not vote in this committee.

Moreover, the agents say they need even more time to ‘evaluate’ the situation.

Unless legal deadlines are set, those who want to stay on live with this situation hanging over their heads. I hope the ministry will consider a revision of the rules.

Susan Prior (Ms)

Source : Straits Times – 29 Jan 2010

The Housing & Development Board (HDB) is checking to see if buyers are using its government-subsidised flats to speculate in the property market – even as resale flat prices hit a new high in the fourth quarter of 2009.

‘There are some people who are saying that people are buying HDB flats for speculation,’ said Minister for National Development Mah Bow Tan. ‘So let’s look at that, see whether it is really happening and if so, whether any of our rules are allowing it to happen.’

Speculation ’shouldn’t be’ taking place as HDB flats under the government’s home ownership programme are for people to live in, Mr Mah added. He was speaking to reporters on the sidelines of the International Housing Conference on Wednesday.

The minister has asked HDB to relook its rules to make sure that prices are not being artificially inflated. ‘I have asked HDB to review its rules and see whether there are any rules that are encouraging and allowing people to speculate in HDB flats,’ he said.

The move comes as HDB resale prices hit a new record in Q4 2009, with prices climbing 3.9 per cent from the previous quarter. The median cash-over- valuation (COV) for all resale transactions doubled to $24,000 in Q4 from $12,000 in Q3.

Answering questions on whether HDB flats were still affordable, Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a ‘willing buyer, willing seller’ basis. So if there is ‘genuine’ demand, prices will climb.

But he drew the line at speculation and stressed that public housing is for owner-occupation. He did not say which rules are being studied, but added that the review should be completed in a few months’ time.

Aside from reviewing regulations, Mr Mah said he has also asked HDB to step up enforcement. ‘I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive, but anecdotally you do hear of one or two cases,’ he added. ‘We want to make sure that this is not happening.’

Analysts BT spoke to said that there was little speculative activity in the HDB market – in the sense that few buyers are buying flats with the sole purpose of flipping them.

‘In my opinion, there is little or no speculative activity in the HDB market. I think the existing rules are relatively adequate,’ said PropNex Realty chief executive Mohamed Ismail.

Under existing rules, home buyers who receive a grant from HDB can sell their flats only after five years. Singaporeans who choose not to take up grants – as well as PRs who are not eligible for any grants – can sell their flats after a year if they have not received a loan from HDB.

However, there are concerns that people could be buying flats for rental investment. Recent media reports have suggested that some flat owners at the newly completed Pinnacle@Duxton have rented out their entire units without a minimum occupation period. This is illegal under HDB’s rules.

But market watchers pointed out that it will be difficult to check if an HDB flat is being occupied solely by renters.

Going forward, HDB will launch another 12,000 new flats this year as demand for public housing grows. Some 7,000 flats will be pushed out in just the first half of 2010.

‘So long as there is demand, so long as there is a genuine take-up rate, HDB will build,’ Mr Mah said.

Source : Business Times – 29 Jan 2010

THE home buying buzz continues at showflats. Allgreen Properties is said to have sold 54 units at its Holland Residences condo at Taman Warna released this week. The average price of the 68 units released in the 83-unit project is $1,625 per square foot; but the figure is weighed down by private enclosed spaces for ground-floor units in the five-storey freehold project.

Singaporeans bought 80 per cent of the units sold, says Joseph Tan, executive director at CB Richard Ellis, which is marketing the project.

In a more upscale location, a joint venture between BBR Holdings and SP Tao’s Shing Kwan Pte Ltd has sold seven of the total 16 units at its six-storey freehold 8 Nassim Hill project since last Friday. The development is expected to receive Temporary Occupation Permit at the end of March this year.

The project comprises eight townhouses and eight penthouses – all of them triplex units spanning across three levels. The townhouses occupy the project’s lower three levels and range from about 4,200 sq ft to 4,500 sq ft, while the penthouses, which are on the upper three storeys, are about 3,200 sq ft each. Each of the 16 units has its own swimming pool; each townhouse also has its own garden at the back.

The 16 units are priced between $3,100 psf and $3,400 psf or $11-14 million apiece. Singaporeans bought two of the seven units sold so far; the other five were picked up by foreigners – from Europe and Hong Kong.

In the Beach Road area, Hong Fok Corporation is said to have recently released upper-floor units at its 99-year leasehold Concourse Skyline priced at $2,200 psf to $2,400 psf. The 360-unit development reaches up to 43 storeys.

Over at Holland Residences, one-bedroom units (601 sq ft) and two bedders (ranging from 957 to 979 sq ft) were the first to be snapped up at this week’s preview.

The project also has three- and four-bedroom units as well as penthouses. Prices of one bedders start from $1.06 million. Two bedders cost between $1.63 million and $1.73 million. The most expensive units sold was $3.6 million for a four-bedroom duplex penthouse.

The average price of $1,600 psf for Holland Residences is higher than the $1,500 psf at which Ho Bee is selling its nearby Parvis, a 12-storey condo at Holland Hill.

However, there are no one-bedroom units in Parvis; developers typically can command a higher per square foot price for smallish units as the lumpsum amount is still relatively small.

Hence the tendency among some developers to build projects with a higher proportion of smallish units to achieve a higher overall average psf price for the development.

At a Knight Frank auction yesterday, a 1,206 sq ft unit on the 10th floor of Leedon 2 changed hands for $1.38 million or $1,144 psf. Leedon 2, a freehold development, is said to be more than 20 years old.

Source : Business Times – 29 Jan 2010

Plans are underway to turn Punggol into Singapore’s first eco-town as part of the sustainable development blueprint.

The aim is that over the next five years, energy consumption in public areas will go down by up to 30 percent while energy use in households is targeted to decrease by 10 percent.

HDB said that as a new town, Punggol is perfect as a test bed for green technologies. These include facilities in carparks for people to power up their electric cars, and solar panels to generate electricity.

HDB CEO, Tay Kim Poh, said: “We will provide a lot more greenery in the town in terms of park, green connectors, roof gardens. Buildings will be designed so there is good cross-ventilation, and they don’t really have to use their air-con.”

A pilot scheme in Serangoon and Sembawang estates to use solar power has also seen energy consumption drop by 40 percent.

It will soon be extended to Tampines, Marine Parade, Tanjong Pagar and Bukit Panjang estates.

The aim is to install solar panels at 30 housing estates over five years.

Source : Channel NewsAsia – 28 Jan 2010

Catalist-listed lifestyle and wellness service provider Mary Chia is expanding into the hotel business.

It said it has entered into a joint venture agreement with businessman Lee Boon Leng to set up a firm called Hotel Culture.

Hotel Culture’s primary business is to operate a hotel, a lifestyle and wellness centre, food and beverage and other hotel-related activities.

For a start, Hotel Culture has exercised an option to buy three properties located at Mosque Street for S$20 million. The properties will be re-developed into a 92-room heritage hotel by the joint venture firm.

Mary Chia said the new hotel will embrace a new lifestyle concept comprising a wellness spa that is integrated with hotel facilities. It added that the acquisition is part of its effort to innovate and introduce new brands into the market.

To pay for the properties, Mary Chia said about S$16 million will be borrowed externally, with the rest of the money coming from shareholders’ loans or equity.

Source : Channel NewsAsia – 28 Jan 2010

An office site at Mohamed Sultan Road has been put up for sale by public tender. The Urban Redevelopment Authority said it has accepted an application from a developer to put up the site for sale.

Since October 2008, the land parcel was made available for sale through the Reserve List System.

Under the system, a site would be released for sale only if a bid with an acceptable minimum price is received.

URA said a developer has committed to put in a bid of not less than S$9.33 million for the site.

As such, the sale process has been triggered.

URA will launch the public tender for the site in about two weeks.

The site has an area of 0.62 hectares and can generate a maximum permissible gross floor area of 9,265 square metres.

The land parcel is offered for sale on a 15-year lease.

Source : Channel NewsAsia – 28 Jan 2010

The Housing and Development Board (HDB) is reviewing its rules to curb speculation and illegal subletting in the public housing market.

National Development Minister Mah Bow Tan said the move is to ensure prices are not being artificially inflated.

The review comes amid fresh concerns over the affordability of public housing sparked off by HDB’s latest data that showed resale flat prices continued to climb in the fourth quarter of last year.

In addition, the median cash premium that home owners have to pay upfront doubled to S$24,000, prompting calls for the government to step in.

But Mr Mah noted that the resale market should be allowed to operate as a free market, with prices set on a “willing buyer, willing seller” basis.

He said: “Now, if you are a buyer, you feel anxious because you want prices to be low. But if you are a seller, you want prices to be high. So it’s not possible for the government to set the resale prices.

“If you were to interfere in the COV (Cash-Over-Valuation), or the resale flat market, essentially, you are saying the government should set the resale flat prices which I think both parties will be unhappy. Why? Because the buyer may be happy today, but today if he’s a buyer, tomorrow he would be a seller. Then when we set the prices and he wants to sell, he will be unhappy.”

While promoting a free market, Mr Mah drew the line at speculation and stressed that HDB flats are for “owner-occupation, not speculation or rental investment.”

As such, Mr Mah said the housing board is relooking rules to ensure that prices are not being artificially inflated.

“If somebody is coming in and buying because they hope to make money, through flipping or selling the flats later on, or to buy to rent without staying in there, I think that’s not possible. That’s not the idea of HDB flats,” he said.

Mr Mah declined to say which rules are being studied. But he noted that the review will be completed in a few months’ time.

How much impact will the review have? Housing analysts said speculators are not the main problem, because prices are not rising fast enough to lure them in.

ERA’s Asia-Pacific associate director Eugene Lim noted that for speculators to be lured into the market, prices have to be moving up very fast. But that’s not happening in the public housing market. For example, prices of HDB flats only increased by 8.2 percent in the past year.

He added that the mandatory holding period before you can sell your flat – one year if you’ve taken a bank loan; 2.5 years for those who borrowed from HDB – also acts as a deterrent against flipping.

Mr Lim said: “It’s basically a case of demand more than supply, because there are probably more people with immediate housing needs now, who cannot wait for the three years for new flats to be built. There is also an increasing population of PRs. They’re not allowed to buy from HDB direct, so they have to go to the resale market.”

But Mr Lim noted that while business from PRs now accounts for 25 percent of his firm’s business, up from 20 percent previously, that is still considered small. He added the review of rules is a sign that HDB is “leaving no stone unturned”.

But demand is being pushed up partly by those who buy flats to earn rent.

Mr Lim said: “If an investment gives you 7 to 8 percent (returns), it is certainly very attractive to look at. Because it’s quite easy to rent out HDB flat. It doesn’t cost much – with $300,000 or $400,000 you can get a HDB flat, you can get good returns, it does attract a fair number of people to look at this option.”

Latest HDB figures showed that between January 2008 and December last year, 56 homeowners were caught renting out their flats illegally.

And recent reports suggested that some flat owners at the newly completed Pinnacle@Duxton had rented out their entire units without a minimum occupation period. This is illegal under HDB’s housing rules.

Home buyers who received a grant from HDB must stay in their flat for a minimum of five years before they can sublet their entire unit. For those who do not use a grant, there’s a minimum occupation period of three years.

Offenders face a fine of between S$1,000 and S$21,000 and may even have their flats repossessed.

Mr Mah said: “I’ve asked HDB to also step up on any possible breaking of the rules. I don’t know if it’s extensive but anecdotally you do hear one or two cases. So we want to make sure that this is not happening.”

But observers said many of these transactions are done under the table. So even if rules are tightened, enforcement will be difficult.

However industry players like Chris Koh of Dennis Wee Realty noted that new rules requiring homeowners to report the details of their tenants are an incentive for them to be honest.

But he felt that there is scope to increase the penalties further, and to penalise agents who facilitate illegal transactions.

And to help curb demand, analysts suggested tweaking rules on how flats are financed.

Currently, a buyer can take out a loan to pay for up to 90 percent of the purchase price of a new or resale flat.

Analysts suggested HDB lower that quantum and make buyers fork out a larger down-payment. This could force them to reassess just how much they can afford, thereby serving as a check on escalating prices.

Source : Channel NewsAsia – 28 Jan 2010

The opening of the second phase of the Circle Line MRT in April is definitely something to look forward to for residents living nearby. But those looking to sell or rent their homes are set to benefit as well.

Property agents said the opening of the 11 new stations along the Circle Line is likely to push property prices up.

Agents MediaCorp spoke to estimate home prices will increase by 10 per cent while office rents will go up by 20 per cent.

They said estates like Serangoon, Bishan and Paya Lebar have a lot of market potential while units in industrial estates are also expected to be in high demand.

Eddy Ng, division director, ERA Real Estate, said: “Most of the workers are taking public transport, it can be very accessible for them, if there’s an MRT line that leads them back home after work.”

Source : Channel NewsAsia – 28 Jan 2010