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Home market will grow even if punters retreat: report

Developers may go for higher volumes, lower margins in mass, mid-segment

(SINGAPORE) Recent events could make the residential property market vulnerable to declines in collective sales and speculative activity.

However, Goldman Sachs believes that other demand drivers such as the increase in resident population will help mitigate the fall in those selling their homes through collective sales and looking for replacement homes.

It reckons there will be little adverse impact from a drop in speculation while foreign buying will be relatively sticky. And the silver lining from the recent market slowdown brought about by the sub-prime mortgage crisis in the US is that it has weakened reasons for the Singapore government to curb price rises, argues a paper by Goldman Sachs Global Investment Research.

‘Going forward, we think all developers will see more of their residential exposure being tied to mid- and mass market projects via new site acquisitions so as to meet expected demand in those segments.

‘We look for achievement of strong selling prices and take-up in forthcoming residential launches to demonstrate the strength of demand in the residential market and drive share price performance of Singapore developers,’ according to the paper, titled ‘Residential market shaken but still good for developers’.

The paper, authored by Goldman Sachs executive director (Asia-Pacific Investment Research) Leslie Yee, says the sharpest increases for Singapore residential property prices are over.

However, the operating environment in Singapore for developers is good, as they can still enjoy fat margins from developing their existing prime district residential landbanks, and reinvesting the money they make from selling such projects into mass/mid market sites where profit margins will be lower but volumes will be high.

‘We see developers achieving margins of about 20 per cent in mid to mass market projects and tapping into opportunities as population increases,’ Mr Yee said. He expects a positive demand picture, with net incremental annual demand of around 19,000 private homes over the next few years.

New demand will come from increases in the resident population, of which an increase in the number of permanent residents is a major driver; increase in the non-resident population; sellers of properties that are the subject of en bloc sales; and Housing and Development Board (HDB) upgraders.

The bank said its demand numbers do not factor in speculative buying. ‘Given the speed and scale of price increases this year, we think a fall in speculative activity benefits the property market in the longer run by reducing pressure for government intervention to cool prices,’ it added.

Goldman Sachs says it is not overly concerned about a decline in en bloc sellers looking for replacement properties arising from a near-term slowdown in collective sales amidst higher development charges and changes in legislation. This is because other components of demand will remain strong.

As for a slowdown in the supply of redevelopment sites if en bloc sales cool off, the paper argues that developers have enough residential projects on hand to execute, and the ability to acquire mid- and mass-market land from state tenders.

Goldman Sachs says it does not expect foreign buying, which has been instrumental in driving up residential property prices here, to dissipate as the factors attracting these buyers to the local property market – including transparency, openness to foreigners, and absence of capital gains tax – still hold.

Also, foreign buyers include permanent residents, whose property purchases here are likely to remain strong provided the momentum of new investments and jobs is maintained.

Goldman Sachs favours GuocoLand and City Developments for their leverage to the Singapore residential sector, accounting for 35 and 38 per cent respectively of their revalued net asset values.

In the mass segment of the private housing market, ‘we see strong domestic economic factors and rising HDB resale prices underpinning price performance’, the paper says.

‘We think the government will be happy to see HDB resale prices rise so that larger segments of the population can enjoy the fruits of Singapore’s success while continuing to ensure affordable housing for citizens through the HDB primary market,’ Goldman Sachs reasons.

 

Source: Business Times 21 Sept 07

Horizon Towers resolution may be in sight

Owners of 135 units vote to extend sale deadline to Dec 11

(SINGAPORE) There may finally be a resolution, of sorts, for the long-running Horizon Towers saga.

Owners of 135 units at the Leonie Hill development – who attended a hastily convened meeting at the Raffles Town Club last night – voted in favour of extending the deadline for the en bloc sale of the development.

These owners – who form the bulk of the owners of the 177 units who had consented to the en bloc sale in February – agreed to push back the collective sale deadline to Dec 11. They also agreed to do everything ‘reasonably necessary’ to effect the collective sale.

And while these owners of 135 units recognise that their votes are not binding on the owners of the remaining 42 units – who didn’t attend last night’s meeting – they say they hope the other owners will support their decision.

They will be reaching out to these remaining owners soon, to seek their support.

This startling twist to recent events may be the key to unlocking the impasse between the majority sellers of Horizon Towers and the development’s buyers – Hotel Properties Ltd (HPL), Morgan Stanley Real Estate-managed funds and Qatar Investment Authority.

HPL and its partners sued the majority sellers after repeated requests to the sellers – to extend the Aug 11 sale completion deadline by four months – were not met.

The collective sale had collapsed on a technicality before the Strata Titles Board (STB) in early August, and the buyers wanted an extension of the deadline so that there would be enough time to file a fresh application to the STB for a collective sale order.

HPL and its partners have threatened to sue every one of the majority sellers for millions of dollars each.

HPL chief Ong Beng Seng – who rarely makes public appearances – even met some 40-odd sellers at the Hilton on Wednesday, in a bid to convince them of the need to extend the deadline.

His lawyers, Allen & Gledhill, also told the attendees at the Hilton meeting that they would be prepared to adjourn the legal proceedings if the sellers agreed to extend the deadline – and that they would drop the lawsuit altogether if the sale goes through.

Some observers believe that this overture by HPL may have swayed the vote at the Raffles Town Club meeting yesterday.

A group of sellers, represented by Wong & Leow, however, told BT that their decision to extend the deadline wasn’t motivated by the threat of the lawsuit filed against the sellers.

‘Throughout this entire period, from the time the STB rejected the collective sale application, we have never said we were not going to extend the deadline. We have chosen to extend the deadline today, as an act of good faith,’ said a spokesperson for the group, which comprises owners of about 60 units.

When contacted by BT last night, HPL’s group executive director Christopher Lim said the buyers would honour the undertaking given to sellers at the Hilton meeting.

‘We will stand by what we offered, which is that we are prepared to apply for the adjournment of the legal proceedings once we get formal confirmation that the deadline has been extended. And we will drop the lawsuit altogether once the collective sale goes through,’ he said.

It means, however, that the lawsuit still hangs over the majority sellers.

The Horizon Towers owners at last night’s Raffles Town Club meeting also voted in a new sales committee – comprising five new members and two members from the first sales committee.

 

Source: Business Times 21 Sept 07

House okays changes to en bloc sale rules

PARLIAMENT yesterday approved changes to the Land Titles (Strata) Bill, which spells out proper procedure for en bloc sales.

The changes will now become law sometime next month after it has been cleared by the President’s office.

During the second reading of the Bill in Parliament yesterday, Deputy Prime Minister and Law Minister S Jayakumar said that the changes are meant to provide more safeguards and transparency for all owners – and not intended to make it harder to reach a collective sale agreement.

‘We have to craft the amendments in a way that strikes a balance between trying to make the process more transparent and fair with suitable safeguards, while at the same time not making it unduly unmanageable or too onerous to bring about an en bloc sale,’ Prof Jayakumar said.

He was responding to Members of Parliament (MPs) who wanted more safeguards added to the Bill.

For example, one suggestion was to make it mandatory for developers to offer sellers a replacement unit within the same estate as their old property.

Prof Jayakumar explained that the government will not implement more safeguards this time round as he does not want to ‘micro-manage’ the en bloc process.

However, the Ministry of Law will not ‘close shop’ and forget about the issue, he said: ‘This review by my Ministry and the Strata Titles Board and the Singapore Land Authority will be an ongoing one.’

For now, in line with several MPs’ suggestions, the Ministry of Law will see if a best practices guide for en bloc sales can be developed.

For now, the passing of the bill means that the en bloc process will change somewhat.

For example, a lawyer will have to be present when an owner signs the collective sales agreement.

Owners can also change their minds after signing the agreement within a five-day ‘cooling off’ period.

Prof Jayakumar also explained that the changes will not apply to projects that have already got the required 80 or 90 per cent majority – based on share value – before the start of the amended act.

 

Source: Business Times 21 Sept 07

Steep rates likely for F1 trackside hotel rooms

Companies seeking to entertain guests may have to pay top dollar for packages over race period

(SINGAPORE) Corporations preparing to entertain their guests at trackside hotels during the Singapore Formula One Grand Prix in September next year may have to dig deep into their pockets.

Though most hotels have not publicised their rates yet, indications are that guests may be charged several times the normal tariff when F1 fever is in full swing. Also, some hotels may not agree to let out rooms just for race night, but could sell packages for several nights.

Companies in a hurry to book rooms for their guests and clients have already started negotiating with the hotels and some have been quoted tentative rates.

One hotel that usually charges $900 a night for a suite tentatively quoted a package of more than $18,000 for the period leading up to the race.

This works out to a daily rate of around $4,000 a night.

Trackside hotels will pay a levy of 30 per cent to the Ministry of Trade and Industry for the five-day period between Sept 24 and Sept 28 next year to offset some of the expenses involved in staging the event. While the levy contributes to raising the rates somewhat, the period also coincides with the drivers’ practice sessions, qualification races and the main event itself – all of which are eagerly watched by racing aficionados. This also enables hotels to sell packages for the entire period for which the F1 circus will be in town.

While the hotels involved seem hesitant to pin down concrete prices, BT was tipped that the suites at one of the trackside hotels, Swissotel the Stamford, are already fully booked with a price tag hovering around $3,500 per night.

One source trying to book rooms for his company said that he had been quoted a tentative rate of around $1,300 a night at The Pan Pacific Singapore. The hotel refused to confirm this. Cheryl Ng, public relations manager for the Pan Pacific, said: ‘Based on the market forces of variable demand and supply, certain room rates have been finalised and extended to potential guests. There are many wait-listed enquiries regarding rooms during Formula One and we are in the midst of responding to interested parties.’

She added that the price floor and ceiling will not be apparent until the hotel has completed its entire pricing strategy.

Ritz-Carlton Millenia general manage Allan Federer told BT that similar rates would be offered to individuals and corporations, and differentials would arise only on the basis of room types and the view of the track during the F1 period. The official room rates would be released on the Ritz-Carlton website around the end of the month. At this point, the Ritz-Carlton has committed about 85 per cent of its guest rooms, with bookings largely stemming from both local and international companies.

‘The F1 is a terrific way to entertain your top customers,’ enthused Mr Federer, adding that the hotel began to confirm bookings from its wait-list about a month ago.

The Oriental director of communications Ruth Soh said that no official bookings have been made although the hotel has also been maintaining a waiting list for interested clients, consisting of both F1 enthusiasts and corporations. Various packages will be available in time to come, with prices to be determined by a confluence of factors such as room size, a view of the track as well as special amenities.

Other trackside hotels include The Fullerton, Marina Mandarin, Raffles Hotel, Conrad Centennial, Carlton Hotel and Peninsula-Excelsior.

Unsurprisingly, even non-trackside hotels – which will pay a levy of 20 per cent during the lead-up to the race – say that the response so far has been heartening. According to Thierry Douin, area manager and general manager for Shangri-La Hotel Singapore, there have been many inquiries from various race teams as well as travel agencies.

One factor that will decidedly influence the prices of hotel rooms is the time of the race. The world governing body for motorsports, Federation Internationale de l’Automobile (FIA), is expected to confirm soon whether – as expected – Singapore will conduct a night race. An affirmative response would be significant as it will mark the first night race in F1 history.

 

Source: Business Times 21 Sept 07

Sands raising $5b to fund building of S’pore IR

Banks roped in are said to include DBS, UOB, OCBC

(SINGAPORE) Las Vegas Sands Corp, the world’s largest casino operator by market value, is seeking a record loan in Singapore currency to fund construction of the nation’s first integrated resort (IR), which will include a casino, three people familiar with the deal said.

The gaming firm hired eight banks including the three local banks – DBS, OCBC Bank and United Overseas Bank – as well as Goldman Sachs to arrange the $5 billion borrowing, according to the people, who declined to be identified because the information is private.

The other four arranging banks are Morgan Stanley, Merrill Lynch & Co, Lehman Brothers Holdings Inc and Citigroup Inc.

Ron Reese, spokesman for Las Vegas Sands, didn’t reply to an e-mail sent by Bloomberg. Spokesmen at the banks either declined to comment or could not be immediately reached.

Part of the $5 billion will be used to repay a US$1.4 billion 12-month borrowing arranged a year ago, according to the people. The $5 billion loan, maturing in seven to eight years, will be the largest-ever made in Singapore currency, according to data compiled by Bloomberg. It will be backed by the casino.

The interest margin on the loan will be between 2 percentage points and 2.5 percentage points more than the swap offer rate on Singapore currency, according to the people. The three-month rate is fixed at 2.62 per cent yesterday.

That compares with 2.75 percentage points more than the London interbank offered rate Las Vegas Sands is paying on US$3.3 billion borrowed last year for its Macau expansion, a loan that matures in 2011. The three-month Libor rate is 5.59 per cent.

‘Banks will likely create a syndicate to spread the risk,’ said Lim Kok Boon, chief investment officer here at Fortis Private Banking. ‘The collateral in the form of land and building will appreciate.’

Second-quarter profit at Las Vegas Sands, run by billionaire Sheldon Adelson, fell 69 per cent as interest payments on funds borrowed to expand in Asia more than doubled from a year earlier to US$54.4 million.

Las Vegas Sands’ downtown Marina Bay resort, neighbouring Singapore’s business district, will feature three hotel towers linked by a sky garden, restaurants run by celebrity chefs Charlie Trotter and Thomas Keller, and an art-andscience centre.

The casino company’s debt is rated three steps below investment grade at Ba3 by Moody’s Investors Service and an equivalent BB- by Standard & Poor’s.

 

Source: Bloomberg (Business Times 21 Sept 07)

Funding squeeze tightens as China reins in asset markets

Policy shift could spell trouble for stock, property markets: analysts

(SHANGHAI) A massive squeeze in China’s money market suggests the authorities are getting serious about reining in soaring asset markets to control inflation.

Funding squeezes have occurred a few times this year in response to initial public offers of equity and seasonal demand for money. But the current drought of funds is much harsher than previous ones and is set to last longer.

In contrast to past squeezes, this one is largely the result of initiatives by the authorities to cool the stock market and reduce the amount of funds available for bank lending, much of which is going into the property market.

In the past, the central bank balanced supply and demand for funds more carefully to limit spikes in short-term interest rates. This time, rates have largely been left to soar unchecked as the authorities soak up money from the market.

‘Authorities are shifting their focus to the stock market and to commercial banks’ lending growth, while putting less focus on short-term volatility in money market rates,’ said Chai Cipeng, a fixed-income trader at Daiwa SMBCSSC Securities in Shanghai.

The shift in policy priorities could spell trouble for the stock and property markets in coming months. It could also mean a difficult time for Chinese fixed-income investors until stock and property prices finally show signs of cooling down.

The weighted average seven-day repo rate, a key measure of short-term liquidity, surged to a multi-year high of 6.6942 per cent yesterday – far exceeding this year’s previous peak of 4.77 per cent, hit in April.

Because the squeeze is expected to last until early October, when money will return to banks after a long holiday period, the average one-month repo, usually more stable, also jumped yesterday, hitting a multi-year high of 7.2092 per cent against this year’s previous peak of 4.45 per cent.

Trade in bills and bonds almost halted this week as desperate banks lack the money to trade. While the central bank has reduced money market draining operations, the resulting net injection is dwarfed by the hundreds of billions of yuan that the market is being required to provide.

Net injections of that scale are ‘not enough in this environment’, said Shi Lei, an analyst at Bank of China.

The squeeze is largely due to the planned sale of big volumes of special bonds to the market this month, a form of monetary tightening, and by record IPOs in quick succession from China Construction Bank and Shenhua Energy, part of efforts to cool the stock market by boosting supply of equity.

The steps are being taken just a week after China announced August consumer price inflation jumped to a 10-year high of 6.5 per cent from July’s 5.6 per cent.

 

Source: Reuters (Business Times 21 Sept 07)

Sunshine to acquire China property firm for 61m yuan

Henan Jinjiang has 2 mixed-devt projects in Zhengzhou

SUNSHINE Holdings is buying a China property company for 61 million yuan (S$12.2 million).

The acquisition, Henan Jinjiang Real Estate Co Ltd, will be 90 per cent owned by Xinxiang Huilong Real Estate Co Ltd and 10 per cent by Henan Huilong Property Management Co Ltd. The latter two companies are wholly owned subsidiaries of Sunshine.

Sunshine said Henan Jinjiang is a property developer, with two projects in Zhengzhou.

Zhengzhou, the capital city of Henan province, has a population of 3.5 million and a gross domestic product of 165 billion yuan in 2005. The two projects – Zhong Mou Project (site area: 76,000 sq metres) and Yan Ming Hu Project (779,000 sq metres) – are mixed developments. Both are expected to see revenue contribution from FY2008.

Sunshine said the total planned GFA for the Zhong Mou project – strategically located near the Civic District – is about 97,000 square metres. About 80 per cent will be allocated for residences and the rest commercial development.

The estimated average selling price is between 2,500 yuan and 3,500 yuan per square metre for residential space and about 4,000 yuan per square metre for commercial space.

As for the Yan Ming Hu project, the total planned GFA is about 274,000 square metres and will comprise deluxe residential with facilities for business conferences. The estimated average selling price for residential space is about 10,000 yuan per square metre.

Sunshine said the purchase will be satisfied from internal resources and borrowings.

Listed on the Singapore Exchange mainboard in March 2006, Sunshine is one of the rapidly growing property developers in Henan province and has successfully carved a niche in developing properties in second and third-tier China cities.

Yesterday, the shares closed trading at 35 cents each, compared with its initial public offer price of 27.5 cents.

 

Source: Business Times 21 Sept 07

Fresh sub-prime concerns in Europe?

Local session turns more sober with ST Index down 41.9 points and a weak broad market

IT’S possible to argue that since the Straits Times Index had rocketed by almost 117 points on Wednesday, it would be reasonable to expect some kind of pullback yesterday. This, indeed, was the case, with the index dropping 41.9 points to 3,552.46.

On the other hand, it must have been troubling on some level to some observers that activity yesterday was very heavily concentrated in penny stocks and warrants, and that the focus as far as blue chips were concerned was narrow – support for the index came almost exclusively from DBS, while the main drag was exerted by SingTel.

For those who subscribe to the first point of view, which is that Tuesday’s 50-basis-point US interest rate cut is sufficient to kickstart the bull market, then yesterday’s dip would best be described as the market ‘taking a breather’.

This is the phrase most commonly used to describe a fall in prices, a seemingly innocuous term but one actually laden with meaning, since it implies that once the breather is over, the upward push will resume.

However, those who were troubled by the lack of breadth, depth and follow-through would undoubtedly have found grounds to fret over the fall, since it came despite a follow-through rise in Hong Kong and Japan.

Instead of the former British colony setting the pace as it traditionally does, the local market most probably drew its inspiration – or lack of it – from a fall in the US futures market and a soft opening for Europe.

One possible reason for Europe’s slip was a plunge in the shares of the UK’s embattled mortgage lender Northern Rock and a warning by Deutsche Bank that its Q3 profit has been adversely affected by the recent market turmoil, both serving as reminders that the US sub-prime crisis may not have fully played out yet.

All told, it was a much more sober session than that which preceded it, resulting in the broad market recording 145 rises versus 341 falls excluding warrants.

Meanwhile, DBS Vickers (DBSV) recommended an ‘overweight’ on the banks, mainly because it expects topline growth to remain robust.

On the ongoing and controversial subject of the local banks’ exposure to US collateralised debt obligations (CDOs), DBSV said that ‘as CDO investments are generally held as available-for-sale and/or held-to-maturity securities, mark-to-market losses would be recorded in reserves rather than the profit-and-loss account unless it is deemed permanently impaired’.

‘Nevertheless, the upcoming release of Q3 results will clearly reveal how banks treat their respective CDO investments, and we believe this would ultimately seal back investor confidence over time.’

Morgan Stanley, on the other hand, reminded investors that good times don’t last forever.

‘Singapore banks have enjoyed very low loan loss charges for the last four years. Current earnings and ratings don’t capture underlying risk tendency in our view,’ said Morgan Stanley. It called an ‘underweight’ on OCBC and an ‘equal weight’ on DBS and UOB.

In a preview of its upcoming global investment strategy to be released today, BCA Research said it recommends staying positive on equities since policy reflation will lift prices. In addition, BCA recommends overweighting emerging markets, raising the weighting of US stocks to ‘neutral’, and that investors stick to larger caps instead of small caps.

 

Source: Business Times 21 Sept 07

New, tighter rules for en bloc sales passed

Further changes may follow if necessary, Jaya tells MPs who want more to be done

A SLEW of intensely-debated changes aimed at making the red-hot collective sales market fairer was passed in Parliament yesterday.

The revisions – keenly watched since they were mooted in March – will make it harder for residential developments to go en bloc as they must fulfil more conditions.

And further changes may be in the works if they are necessary, said Deputy Prime Minister S. Jayakumar, also Law Minister.

He was responding to spirited appeals by several Members of Parliament yesterday, who peppered him with suggestions on how to further tighten the rules.

Most felt more could be done to protect the interests of minority owners and the elderly, who are often strongly opposed to selling en bloc but find they have no choice.

In response, Prof Jayakumar said that while their suggestions were not ‘without merit’, he was also concerned about not ‘micromanaging the process’.

‘We have to…strike a balance between trying to make the process more transparent…while at the same time not making it unduly unmanageable or too onerous.’

But he added that the ministry is not going to ‘close shop and forget about the process of en bloc sales’.

It will ‘monitor very closely’ the new laws and make further amendments if needed.

The changes have already had some effect on the en bloc market, even before they are due to come into effect next month.

Property players say they have spurred a rush among homeowners to go en bloc before the new rules make it harder.

But some consultants, like Knight Frank director of research and consultancy Nicholas Mak, say the changes may not have a large impact on the market.

‘They will add more procedural hurdles, but on the whole, they were not designed to slow down en bloc sales and they are unlikely to do so,’ he said.

More than 30 amendments were approved yesterday, after extensive public and industry feedback. They are meant to introduce more regulation into the market and ‘minimise complaints of harassment, unfairness and lack of transparency’, said Prof Jayakumar.

Key revisions include a five-day period for owners to change their minds after signing the collective sale agreement. Also to come are new rules on setting up a sale committee and new powers for the Strata Titles Board, which governs collective sales.

Another major change addresses an imbalance in voting rights in a mixed development. It adds an extra level of owner consent, by floor area, before a sale can proceed.

The amendments were beefed up in recent months after 400 suggestions from the public and discussions with about 40 industry experts.

They follow months of grievances from homeowners over a lack of clarity in collective sales, which have seen a spectacular record run in the last two years.

The need for more regulation has also been thrown up by cases such as that of Horizon Towers, where owners are being sued by the estate’s buyer over a botched collective sale.

Not to be outdone, MPs weighed in with their own proposals yesterday.

These ranged from not allowing ‘young’ buildings below 10 years of age to go en bloc to offering a one-for-one exchange of units in the new development.

More than one MP also spoke of the non-monetary losses felt by owners forced to sell en bloc, and condemned ‘condo raiders’ who buy units in a development and push for a collective sale.

Nominated MP Kalyani Mehta suggested that only residents who have stayed in an estate for more than two years can sit on the sale committee.

Prof Jayakumar took these outpourings in his stride.

A two-year residency condition, he said, would discriminate against new bona fide homeowners. Replacement units are sometimes offered, but turned down by sellers for various reasons.

As for those concerned about younger buildings, he offered this statistic: since 1999, almost 70 per cent of developments that have been sold en bloc were more than 20 years old.

But he agreed to look into some proposals, such as a best practices guide and standard forms to help en bloc players.

 

Source: The Straits Times 21 Sept 07

Horizon Towers sellers vote to extend sale deadline

New sale committee formed and they hope to avert potential lawsuit

A LARGE group of Horizon Towers sellers voted last night to extend a deadline for the sale of the condominium, in a bid to head off a lawsuit over an earlier $500 million sale that fell through.

The sellers last night voted to do everything ‘reasonably necessary’ to effect the collective sale of their estate, which has been mired in uncertainty for months.

The sellers hope to avert a lawsuit filed by a Hotel Properties-led (HPL-led) consortium, which is trying to buy the condo. The case is due in court next week.

At a meeting on Wednesday between HPL chief Ong Beng Seng and about 50 sellers, it was made clear that the buyers would adjourn the court hearing if there was an extension of the sale deadline.

Yesterday, HPL spokesman Christopher Lim reiterated this position. ‘If the Horizon Towers transaction goes through, we will drop the lawsuit as well as claims for damages,’ he said.

The buyers are seeking hundreds of millions of dollars in damages for an alleged breach of contract by the condo majority owners.

Last night, the sellers also elected seven members to form a new sale committee – their third so far in the drawn-out saga.

The new committee is to be headed by Mr Lim Seng Hoo. The team includes one person from the old sale committee.

‘The meeting was very well organised and amicable,’ said an owner who attended the meeting.

Sellers of 135 units – out of 177 units – gathered at Raffles Town Club yesterday to attempt to resolve its botched collective sale after their previous sale committee quit.

Only one unit did not vote in favour of the resolutions passed yesterday. Horizon Towers has 199 apartment units and 11 penthouse units.

The 7.30pm meeting ended after 10pm, even though owners were still streaming in from 8pm to 8.30pm.

Many owners at the meeting refused to speak to the media.

HPL and its two partners, Morgan Stanley Real Estate-managed funds and Qatar Investment Authority, want to buy Horizon Towers at the $500 million price it inked in February. But the collective sale application was thrown out by the Strata Titles Board (STB) early last month because of a technical error.

The agreement then lapsed because the sellers did not extend an Aug 11 deadline that was written into their contract. Meetings followed and the sale committee eventually quit.

Sellers from 21 units had then called for yesterday’s meeting to pass a few resolutions such as forming a new sale committee and to vote on an extension of the sale deadline to seek an STB order for the sale to go through.

This is ahead of a High Court hearing next Thursday and a High Court appeal to quash the STB order next Friday.

Also yesterday, a group of more than 80 owners represented by lawyers from Wong & Leow engaged a public relations consultant to help them with media relations.

 

Source: The Straits Times 21 Sept 07

All new buildings to go green from next year

IN A major push to make developers go green, the Government will require all new buildings to meet minimum environmental standards from next year.

Developers will be required to be more efficient in using water and energy than under current industry practice.

The Building Control (Amendment) Bill was passed in Parliament yesterday to give the Minister of National Development the power to impose the rules.

This latest change is perhaps the most significant extension of regulations so far to make buildings environmentally friendly.

The Building and Construction Authority (BCA) estimates the requirements would raise construction costs by just about 1 per cent.

But experts say the final figure would be even less – negligible in fact – if green features were factored into a building’s design from the start.

These could take the form of more efficient air-conditioning and lighting systems, water fittings or better insulation. More details of the rules will be released later.

Going green was optional for developers in the past. In December last year, the Government launched a $20 million incentive fund which private developers could use to make their buildings more environmentally sustainable.

In April, the Government required all new public buildings to meet green standards as set out by the BCA.

Under its two-year-old Green Mark certification programme, buildings are rated on how efficient they are in the use of water and energy, and their effect on their users’ health and the environment.

So far, 66 out of about 120,000 buildings in Singapore have received the Green Mark certificate, while another 25 are in the pipeline for this stamp of approval.

The BCA estimates that getting this minimum Green Mark standard would eventually shave 10 to 15 per cent off a building owner’s utilities bill.

Major developer City Developments, which has Green Mark certifications for 16 of its buildings, said the Government’s previous green initiatives had made the impending requirements easier to accept.

General manager for its projects division Eddie Wong told The Straits Times: ‘We believe that with early and efficient planning, green buildings can be both environmentally sustainable and financially successful.’

Meanwhile, another part of the Bill passed yesterday requires building owners to maintain facilities for the disabled. They will not be allowed to change, remove or block any features designed especially for these users. This would mean, for example, that they risk being penalised if they lock up a toilet built for the disabled.

 

Source: The Straits Times 21 Sept 07

HDB launches sixth build-to-order project in Fernvale

The 698 4-room flats will have full floor finishes, sanitary fittings

TO MEET the increasing demand for homes, the Housing Board (HDB) yesterday launched 698 flats for sale in Sengkang.

HDB’s latest build-to-order (BTO) project, Coral Spring, offers premium four-room units of 95 sq m to 96sq m, priced between $188,000 and $252,000.

These premium flats will be provided with full floor finishes and sanitary fittings.

Home buyers can choose other components to be installed under HDB’s Optional Component Scheme.

The project, which will consist of five 25-storey buildings, is located at the junction of Sengkang West Avenue and Fernvale Road.

The flats are within walking distance of Fernvale LRT station and Fernvale Point, which houses a wet market, supermarket and foodcourt.

It is also near schools such as Fernvale Primary School and Pei Hwa Secondary School.

Prices are higher than the last BTO project, launched in May, Fernvale Vista Phase 2, where four-room flats were priced between $145,000 and $200,000.

Four-room flats at Fernvale Court, launched two years ago, were priced from $138,000 to $177,000.

Coral Spring is the sixth BTO project in Fernvale.

With the exception of Coral Green, which was launched in 2004 and later dropped because of weak demand, the other projects have been well-received, said HDB.

Three – Fernvale Grove, Fernvale Court and Fernvale Vista Phase 1 – are now at construction stage. HDB is selecting applicants for Fernvale Vista Phase 2.

An HDB spokesman told The Straits Times yesterday it is confident there will be good demand for Coral Spring.

If the response is good, applicants will be called to select their flats.

HDB will assess the take-up rate before deciding whether to call for a building tender under the build-to-order scheme.

Applications for the new homes close on Oct 9.

If Coral Spring is given the green light, it is expected to be completed by the end of 2011.

An exhibition of the project will be held at the HDB Hub’s Habitat Forum during the application period.

 

Source: The Straits Times 21 Sept 07

Rising costs, competition top list of SME concerns

Annual poll shows firms are squeezed by higher wages, input costs, rents

RISING business costs have overtaken staffing issues as one of the top hurdles faced by small and medium-sized enterprises (SMEs), an annual survey has found.

Stiff competition, a perennial worry, is the top concern, but escalating costs were the next biggest worry cited by firms polled in the latest SME Development Survey.

Amid strong economic growth, firms feel squeezed by climbing wages, followed by higher prices for raw materials and other inputs, as well as steeper rents.

Three out of five SME bosses cited rising wages as their biggest headache among cost components.

About half faced rising input prices while 37 per cent were concerned about steeper rents.

The findings were unveiled yesterday by DP Information Group, which conducted the poll, with partners Spring Singapore and IE Singapore. The exercise was supported by the Infocomm Development Authority of Singapore.

More than 1,200 SMEs took part in the survey, now into its fifth year.

This year, six out of 10 firms listed competition as their greatest worry, compared to 45 per cent last year.

But next on the list came rising cost pressures.

A total of 53 per cent of SME bosses this year said this was a major headache, up from just one-third last year, making it the fastest-growing SME concern.

‘With a strong economy, low levels of unemployment and demand for labour rising, it is to be expected that SMEs need to pay more to attract the right people,’ said DP Info managing director Chen Yew Nah.

‘The boom in China and India also fuelled the demand for raw commodities, with rising prices being felt across all industries,’ she added.

Among those most affected by rising wage costs are firms in the construction, services and food and beverage industries, the survey showed.

At the same time, however, SMEs polled are also gaining from the buoyant economy, with more firms reporting turnover growth of more than 10 per cent, and fewer businesses suffering losses.

Despite a tighter labour market, 68 per cent of firms surveyed said they pay the market average for salaries and staff benefits, and 16 per cent claim to pay ‘above-market rates’. Still, more than half of the SMEs polled reported problems hiring workers for roles from operational to managerial.

Meanwhile, worries about finding business opportunities and getting funding have taken a back seat this year.

More firms are growing their business by expanding abroad – with 70 per cent of respondents doing business overseas, up from 59 per cent last year.

The proportion of SMEs which reported problems finding new financing has fallen to 10 per cent, from 19 per cent last year.

‘There have been major improvements in the ability of SMEs to access funding, reflecting the responses of the banks and the Government to the needs of SMEs,’ said Ms Chen.

‘At Spring Singapore, we listen closely to our SMEs to gain insights into their challenges, issues and aspirations,’ said deputy chief executive Png Cheong Boon, outlining a series of public initiatives to improve SMEs’ access to money, markets, management skills and know-how.

There are about 148,000 SMEs in Singapore, making up 99 per cent of all enterprises and providing six in 10 jobs.

 Rising Cost

 

Source: The Straits Times 21 Sept 07