February 8, 2010

Love Note From Your HSR Chief Servant

Dear Bro/Sis,

Fire Up Our Company With A Great Spirit

We brought My HSR leaders on a tour of the southern part of Malaysia as a part of our Annual Team Leaders Retreat. We had lots of fun going to exotic places, visiting an organic farm, feasting on a free-flow serving of durians, and enjoying other interesting programmes.

During the trip, I make it a point to talk to each and every leader. As a servant-leader, I must listen whenever possible to every member of My HSR family. I like to learn from everybody, be a friend, and look at ways to serve all of you.

I hold to the belief, ‘There are no strangers in this world, only friends we have not met.’ Every person wants to have more friends. We want to work as a team, be united, and help each other go far in life. We want to love and be loved.

That’s why, our HSR founders decided that My HSR will go beyond being a business or an organization. We will build a warm, dynamic and caring (WDC) family.

During the trip, we played many games to help us strengthen our warm, dynamic and caring family spirit. I believe if you ask anybody who was present at the trip, they will tell you we felt the WDC spirit. We are a happier and stronger team because of it.

It is my heart’s desire that My HSR WDC spirit will continue to grow in our company. In fact, I hope we will spread it to our families, our industry and to our communities. Common sense tells me, it can only make our world a better home.

Will you continue to be a warm, dynamic and caring person? Can you help me set our company ablaze with your WDC spirit?

Together With You

Building a WDC Family

patrick liew

Your HSR Chief Servant

Borrowers looking to make energy upgrades in their homes that will lower utility bills, along with their environmental impact, may soon find additional options available to them.

Fannie Mae will offer incentives to borrowers of conventional loans who devote some of the funds to energy improvements.

Fannie Mae, the government-backed company that sets lending standards for mortgages, said that by this summer it would unveil incentives for those who use part of their mortgages for energy-related improvements.

And EnergyStar, a joint effort of the Department of Energy and the Environmental Protection Agency, is expected to introduce borrower incentives in New York, after running pilot programmes in Colorado, Maine and Pennsylvania.

At the same time, the Appraisal Institute, an industry trade group, said it was training members to better quantify the value of energy-efficient homes. It also said that it was developing a certification programme for appraisers who want to specialise in energy-efficient homes.

For years, the only option for borrowers was a so-called energy-efficient mortgage from the Federal Housing Administration.

Under that programme, borrowers who obtained FHA-insured mortgages could qualify for larger loans if they earmarked additional funds for energy-related improvements, and if those upgrades yielded long-term savings. The FHA has varying formulas for determining the maximum amount for energy improvements, but for many homeowners, the limit is 5 per cent above what they could have qualified for in a conventional loan.

As with all FHA loans, energy-efficient mortgages are marginally more expensive, because borrowers must pay the FHA insurance premium.

Borrowers have flocked to FHA loans in the past two years, because the qualifications are less stringent than for non-FHA loans. But just 3,088 borrowers chose energy-efficient mortgages last year, according to the agency.

Some mortgage executives have complained that these loans are more complicated than others, because borrowers have to complete an energy audit of their homes and use an appraiser with expertise in evaluating energy-efficient properties, among other things.

But Susan Barber, the senior vice-president for Wells Fargo’s new construction and renovation programmes, said the approval process was on par with those for other loans.

Either way, borrowers will have more options in the coming months.

Amy Bonitanibus, a spokeswoman for Fannie Mae, said the company would introduce a programme before the summer offering incentives to borrowers who take out conventional loans, and devote some of the funds to energy improvements. She declined to disclose details about the programme.

Fannie Mae loans require no mortgage insurance if the borrower makes a down payment of at least 20 per cent, so its energy-efficient mortgage will very likely save borrowers more money.

New York borrowers, meanwhile, will have another option, said Howard Banker, a managing director of the Energy Programs Consortium, a non-profit group in Washington that determines which lenders may participate in the federal EnergyStar programme.

Mr Banker said EnergyStar would announce before July that one of the nation’s major lenders will offer EnergyStar mortgages. He declined to identify the lender by name, but he said the EnergyStar borrowers would probably receive below-market interest rates or other monetary incentives if they took out bigger loans and spent the extra money on energy upgrades in the home.

EnergyStar borrowers must submit to an energy audit, and demonstrate that the upgrades will cut energy consumption by at least 20 per cent.

Homeowners could still face logistical hurdles in obtaining ‘green’ mortgages from lenders, said Curt Jones, the president of Civil1, a civil engineering company in Woodbury, Connecticut. He said that appraisers sometimes failed to recognise the increased market value of energy-efficient homes.

Source : Business Times – 9 Feb 2010

I REFER to yesterday’s letter from Mr Ng Kwong Yee (‘Room for pragmatism’).

I agree with most of his comments on appreciating values and preferences of flats in various locations, but not with his comments on rental.

The reason for ever rising valuation and cash-over-valuation of flats is clear – buying and selling.

Some buy to have a roof over their heads, whereas some sell and then buy again to upgrade. Then there are those who buy now to save money as it is cheaper than waiting until prices go up again. No matter how you look at it, when you buy or sell, the price is never the same.

From the main context of previous discussions, it is buying and selling that causes movement in the value of HDB flats – not rental. When one buys and then rents out, it actually relieves market tension by reducing the number of people who would otherwise be in the buying market. When more people rent, fewer people buy and prices are not driven higher. And when the landlords decide to keep their flats for rental, the speculative part of rental property also disappears.

Yeo Shuan Chee

Source : Straits Times – 9 Feb 2010

I REFER to yesterday’s letters, ‘Costly choices’ by Mr Mervyn Song, and ‘Room for pragmatism’ by Mr Ng Kwong Yee.

The HDB flat ownership scheme has been tweaked several times to meet the demands of the population, without sacrificing the primary objective of the HDB as the government provider of affordable housing.

For example, in the 1970s, HDB compulsorily acquired flats of owners who had another property, but the rule was later amended to allow private property owners who lived in their HDB flat for more than five years to keep the flat and lease out their private property for investment.

The relaxation of rules should be commensurate with the circumstances in the supply and demand of affordable housing.

Where supply of new flats is abundant and resale flat prices affordable, HDB flat owners can live in them while investing in another property. Resale flats, like private property, are subject to the fierce forces of the open market, and prices come down only if supply exceeds demand. However, in the past two decades, demand has always exceeded supply, so we can expect prices of flats sold in the open market to go up.

Thus HDB remains the only provider of affordable housing amidst rising costs of building materials and land.

Mr Ng is right to mention that HDB lacks the teeth to weed out illegal letting of flats. Perhaps the National Registration Office can match registered addresses with HDB’s records to see how many mismatches there are.

Next, it may help if HDB buys back (not compulsorily acquires) from HDB flat owners who own private property and resells these flats to those who need a roof over their head at subsidised prices.

Patrick Sio

Source : Straits Times – 9 Feb 2010

Salt Lake City’s huge church-financed redevelopment project has prompted debate both inside the Mormon community and out

FOR many devout Mormons, Utah’s capital city is important mainly as a setting for the jewel that really matters: Temple Square at the city’s centre. Brigham Young, the pioneer leader of the Church of Jesus Christ of Latter-day Saints, laid out the urban grid with street numbers starting at the temple. The secular world was thus defined by the sacred core.

But now a hugely ambitious, US$1 billion church-financed redevelopment project near the temple, called City Creek Centre, and a wave of recent church property purchases in the vicinity are prompting a new debate inside the church community and out over where the line between culture and economics should be drawn.

Some residents say the church, by opening its chequebook in a recession, rescued the city when times got tough. The 1,800 construction jobs at City Creek alone have provided a big local economic cushion. Completion of the project – 20 acres of retail shops and residential towers – is scheduled for 2012.

‘City Creek has been a literal and figurative godsend,’ said Bradley D Baird, the business development manager at the Economic Development Corporation of Utah, a private nonprofit group that has no direct involvement with the project.

Other people say that if the new heart of downtown has a strong church flavour, Salt Lake, which has become more diverse in recent years – could veer back toward its roots, for better or worse. About half of city residents are Mormon, according to many estimates, and if many, or most, of the roughly 700 apartment units at City Creek were occupied by Mormon families, the city could have a dramatic new feel.

‘Our downtown has become a ghost town in my life – nobody lives there,’ said Dan Egan, 55, a lawyer and church member who works near the site but lives in the suburbs. ‘Having several thousand people live down here will have a big impact, and having many of them LDS would be a very interesting thing to see.’ Church leaders say they have no religious goals in mind for City Creek, or for their other recent acquisitions. Over just the last month, the church has bought three more properties, including a 13-acre parcel a few blocks south of City Creek. A spokesman said the purchases were investments.

‘There will be no evidence of the church within those blocks,’ said H David Burton, a former corporate executive who oversees the church’s business interests as the presiding bishop. Bishop Burton said the civic spaces inside City Creek would be private property, but ‘with all the attributes of a public venue.’ Alcohol, for example – always a cultural flashpoint because of the church’s teachings to avoid it – will probably be allowed in City Creek, Bishop Burton said, under special contracts that will allow a restaurant wanting a liquor license to buy the underlying property.

That would keep the church from being in the liquor business or from benefiting from liquor sales while still allowing sale and consumption on the premises.

As for who might want to move in, Bishop Burton said he thought proximity to the temple would make the apartments attractive to church families, but only time will tell. About 40 per cent of the available condominium units have been reserved by deposit, but a church spokesman said the buyers’ religious affiliations were unknown.

‘If I were making a guess – and I don’t have any empirical data – it might be more attractive to LDS than to others,’ Bishop Burton said.

One former Salt Lake City planning official, Stephen A Goldsmith, who is not a Mormon, said he was thrilled by the thought of people moving back downtown, but feared that the church’s economic concentration would lead to a ‘Vaticanisation’ of the area.

‘The concern is about having just one owner own so much of the heart of the capital city,’ said Mr Goldsmith, who was director of city planning from 2000 to 2002 and is now an associate professor of architecture and planning at the University of Utah.

Already, Mr Goldsmith said, a buffer zone of about 100 acres of church-owned properties, assembled gradually over the past few decades, rings the inner core. He said the ‘we/they’ divide between Mormons and non-Mormons could widen if even more public space became private or was linked to one group’s cultural values.

Church leaders said the desire to head off economic decline in downtown was their prime directive at City Creek.

‘Along with economic malaise comes an element that we were concerned about in proximity to the temple,’ said Bishop Burton. That the temple area might one day start to feel dangerous was simply intolerable, he said. ‘With decay, sometimes comes crime,’ he said.

Although lots of urban churches worry about those issues, the ones that can write a US$1 billion check are rare.

‘It’s certainly one of the largest, if not the largest project in the United States funded by a single entity, and the fact that the entity is a church makes it doubly unusual,’ said Patrick L. Anderson, the chief executive and founder of the Anderson Economic Group, a Michigan-based real-estate consulting company.

Mr Anderson, who said his firm had no economic involvement in City Creek, said such megascale urban redevelopment mostly went out of fashion after the 1970s and ’80s. That makes Salt Lake even more singular, he said.

Church officials said, however, that some of what they were doing was a throwback – to the 1930s. In the Great Depression, the church established a food and clothing distribution system for destitute members and bought land all over the state, establishing a precedent for wading in during hard times.

Now, some of those 1930s economic stimulus lands could come back into play. The Salt Lake City Council is considering another huge development project called the Northwest Quadrant near the airport, where the church owns a swath of land used long ago as a Depression-era church farm.

Source : Business Times – 9 Feb 2010

Residents of Neptune Court voted on Sunday to appoint law firm Tan & Au to undertake the privatisation of the sprawling estate.

Sunday’s meeting to amend the constitution, appoint a law firm and approve the privatisation committee lasted three hours amid heated outbursts from some residents.

One complaint was the alleged lack of transparency in how the Neptune Court Owners’ Association (NCOA) had gone about its plans.

“They claim there was an open tender in selecting a law firm, but none of us knew about it and it was done without our consent,” said a long-term resident who did not want to be named.

But addressing the meeting, NCOA’s president Tommy Wong, said: “We selected (Tan & Au) for their talent, experience and capability for detail such that owners will not suffer any financial loss … and their terms of no success, no payment.”

While the previous committee had consulted the law firm some two years ago, this is the first time the NCOA has moved to appoint it.

Some 250 residents, representing fewer than half of the 752 units, turned up for the meeting. In all, 205 residents voted to appoint Tan & Au while 20 objected.

The privatisation committee was endorsed with a majority vote of 146.

There is still some way to go before privatisation becomes reality, with the agreement of 75 per cent of all the owners needed. For now, the Neptune Court Privatisation Committee (NCPC) together with its lawyers plan to meet the Ministry of Finance – which owns the land – and Singapore Land Authority to negotiate a better privatisation fee, said NCPC’s chairman David Ho.

In 2007, the residents were quoted a fee of S$144 million to privatise the 99-year leasehold estate, but in June last year were given a new figure of just S$40 million, which worked out to roughly S$50,000 per unit.

Just down the road, the 480-unit Lagoon View estate last year was quoted an estimated S$12 million, or S$28,000 a unit.

Retired civil servant Yahya Aljaru, 69, and retired manager, Mr Fadzakir Fadzlil, 67, both of whom have resided at Neptune Court since 1975, are looking forward to privatisation and a likely en bloc sale effort thereafter.

“I will take it if they make me an offer I can’t refuse,” said Mr Fadzakir.

“I have simple needs. I don’t need a swimming pool, a snooker room. I will use the proceeds to go travelling and leave some for the kids.”

Source : Channel NewsAsia – 8 Feb 2010

THE manager of Mapletree Logistics Trust (MapletreeLog) has filed a bankruptcy petition against Mr Ang Chee Seng for defaulting on a lease agreement.

Mr Ang is the guarantor and company director of Elchemi Assets, which used to occupy the industrial property at 9 Tampines Street 92.

A MapletreeLog Management statement yesterday said that it has repossessed the property – a two-storey warehouse with an ancillary office – and is marketing it for lease.

It has a net lettable area of 11,089 sq m and accounts for only about 0.5 per cent of the total net lettable area of MapletreeLog’s portfolio as at Dec 31 last year.

The bankruptcy petition will be heard on March 4, the manager of the logistics real estate investment trust said.

Elchemi apparently started its lease in end-2008 and has not paid rent for a few months.

MapletreeLog Management said it has obtained summary judgment against the former tenant and Mr Ang, and that the matter is under appeal to be heard on Thursday.

It bought the property, which has a 30-year lease from 1993 with an option to extend, for $11 million in early 2007.

Elchemi Assets is part of the Singapore-headquartered Elchemi Group, a private global investment firm established in 2008, according to the group’s website.

The company develops high-tech value-added facilities for lease to corporate customers, said the website.

Source : Straits Times – 9 Feb 2010

Residential property prices in Singapore increased 7.4% in last three months of 2009 as the property market made a quick recovery from a nightmarish start to the year, the latest published figures show.

This followed the previous quarter’s increase of 15.8%, a turnaround from a fall of 18% in the first half of 2009, leaving the annual price increase at 1.8%, said the Redevelopment Authority.

Prices of non-landed properties rose by 7.2% in the last quarter and 15.9% in the third quarter of 2009, the figures also show. Apartment prices were up 9.7% more, while prices of condominiums increased by 6.1%.

Looking ahead to 2010 luxury property is predicted to perform well in coming months. According to a report from real estate consultants Savills the sector could see price increases of up to 15% while the mass-market and middle end properties could see values increase by 5%.

‘I think luxury property prices are still some 20 to 25% off the peak. In terms of the high net worth individuals, I think a lot of confidence is coming back to the market. There is a lot of liquidity around that’s pushing them back into real estate,’ said Michael Ng, managing director of Savills Singapore.

However, the majority of people who buy property in Singapore are unhappy about some aspect of the service they get from estate agents, according to a new survey.

Some 80% of all property transactions in Singapore are done through real estate agents and most of these end up with customers encountering some sort of bad service, the report from Ngee Ann Polytechnic has found.

Bad or wrong advice were the most common complaints followed by a failure to get fair prices, they survey found. Overall 77% of respondents from diverse age groups, professional and educational backgrounds, were unhappy, said Nicholas Mak, real estate lecturer.

The survey also showed that 73% felt that more training is needed included a full accreditation system. The government is currently working on a new regulatory framework for estate agents.

‘Some of them also felt that their real estate agents neglected their opinions or suggestions,’ he added.

Source : Property Community – 8 Feb 2010

CapitaLand’s Australian unit, Australand, said on Tuesday that it made a net loss of A$298.2 million.

It said the accounting loss was due to revaluation losses on investment properties amounting to A$249.4 million.

Moreover, it incurred the impairment of development and joint venture assets amounting to A$148.4 million, on top of a non-recurring finance cost of A$20.7 million.

But Australand said it achieved a net operating profit after tax of A$120.2 million for the full year ended in December, in line with its guidance.

Going forward, Australand said an improved outlook and economic conditions will help to strengthen development activity. It added that it intends to seek approval at its annual general meeting to undertake a five into one consolidation of its stapled securities.

It said that this will reduce the large number of securities on issue following the recent entitlement offers.

CapitaLand is due to announce its group results on Thursday.

Source : Channel NewsAsia – 9 Feb 2010

The Urban Redevelopment Authority (URA) on Tuesday launched a transitional office site at Mohamed Sultan Road for sale by public tender.

The 15-year-leasehold site has an area of about 0.62 hectares and a maximum permissible gross floor area of about 9,200 square metres.

The minimum price for the site is S$9.33 million.

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.

Two weeks ago, URA said it accepted an application from a developer to put up the site for sale.

In October 2008, URA had rejected a sole bid for the Mohamed Sultan site as the price offered was deemed to be too low. Back then, RSP Architects Planners & Engineers had put in a bid of S$4.65 million.

The site was subsequently placed on the reserve list. The current tender for the site will close on March 18.

Source : Channel NewsAsia – 9 Feb 2010