85% of MCL Land’s Hillcrest Villas sold in the past fortnight

Average price for the 163-unit cluster terrace homes project is $871 psf

MCL Land has sold 85 per cent of its 163-unit cluster terrace homes development Hillcrest Villas over the past fortnight.

The average price for the 99-year leasehold project in the Dunearn Road area on the former SingTel Academy site is about $871 per square foot (psf) of strata area. Absolute prices range from $2.5 million to $3 million per unit.

This means the listed property group, a subsidiary of Hongkong Land, has sold about 400 homes this year for slightly more than $900 million.

MCL is planning to launch two freehold condos next year with a total of about 360 units in the Holland Hill and Pasir Panjang locations, MCL Land CEO Koh Teck Chuan told BT yesterday.

Hillcrest Villas’ cluster terrace houses will have two storeys plus attic and basement, with a total strata area of about 3,100 sq ft on average per unit. The typical unit has four bedrooms plus another in the basement that can be turned into an entertainment room. The development has shared facilities including swimming pools, a clubhouse and gym.

‘Buyers are all Singaporeans, given the restrictions on foreigners regarding owning landed property. We’ve a good mix of owner occupiers and investors,’ Mr Koh said.

Hillcrest Villas’ location next to Raffles Girls’ Primary School and near Nanyang Primary School is a draw for parents eyeing a place for their children in these schools, market watchers said.

Mr Koh noted that cluster houses at The Teneriffe at Laurel Wood Avenue nearby are fetching monthly rentals of about $14,000. ‘Assuming Hillcrest Villas command the same rental, and based on our average selling price of $2.7 million, the net yield at about 5.6 per cent is pretty attractive,’ he said.

Hillcrest Villas is being marketed by DTZ Debenham Tie Leung.

Earlier this year, MCL Land launched two other condominium projects – the 132-unit Waterfall Gardens at Farrer Road and 129-unit Tierra Vue at St Patrick’s Road on the former Marine Parade Gardens site.

Both freehold projects are fully sold. MCL Land achieved average prices of about $1,500 psf for Waterfall Gardens and $850 psf for Tierra Vue, Mr Koh said.

The group has another two freehold condos that it plans to release next year – one with about 180 units on the Balmeg Court site off Pasir Panjang Road, and a joint venture with Ho Bee on a project with about 180-190 units on the Holland Hill Mansions site.

Meanwhile, Kallang Development yesterday began previewing 48 freehold terrace houses at Sembawang Road under the latest phase of its Springside development.

Intermediate terrace units are priced at about $1.75 million on average and have land areas ranging from 1,617 sq ft to 2,154 sq ft and floor areas of about 3,500 to 3,700 sq ft. Corner units, with plot sizes of 2,400 to 4,800 sq ft and floor areas of 3,500-5,000 sq ft, cost $2.2 million to $3 million. All units are three storeys high and will have attics but no basements.

Another landed development expected to come on the market soon is King’s 8, comprising eight freehold strata bungalows along King’s Road. Each strata bungalow will have its own swimming pool.

 

Source: Business Times 22 Sept 07

Fed rate cut a blessing and a curse for China

AS THE Federal Reserve cut interest rates by half a point this week, it is doubtful much thought went into what it would mean for China.

And that is fine. The Fed has 12 districts around the United States, and it acts to influence the domestic economy. Globalisation has globalised the Fed, though. It is hardly far-fetched to think of Latin America as the Fed’s 13th district, Russia the 14th, Asia the 15th and so on.

Not surprisingly, this week’s Fed decision was the most anticipated by Asia in many a year. Nowhere were officials watching closer than in Beijing.

It is not just that China’s currency is still effectively pegged to the US dollar. It is more about what Mr Donald Straszheim, vice-chairman of Newport Beach, California-based Roth Capital Partners, calls the Group of Two.

The G-2 – the US and China – is rapidly becoming the most important economic relationship.

It is getting harder and harder to discern where one economy ends and the other begins. China cannot live without US demand for exports and the vital role the American consumer plays in its poverty-reduction efforts. The US cannot survive without China’s money, much of which is parked in reasuries and enables the US to finance its excesses.

Yet the Fed’s cut highlighted the extent to which US and Chinese monetary policies are moving in opposite directions. The Fed lowered its benchmark interest rate for the first time in more than four years to 4.75 per cent, while China is still working to tighten credit.

More liquidity

THE US’ adding of liquidity – and the sub-prime loan crisis forcing Fed chairman Ben Bernanke’s hand – is both a blessing and a curse for Asia’s second-biggest economy.

First, the curse angle. China has been shielded from much of the fallout of the credit-market problems that began in the US and spread around the globe. A largely closed capital account and a stable currency protected China from the 1997 Asian crisis and the approach has paid off again in recent months.

As the Fed lowers rates, though, it is providing liquidity to a global system that seems to find no shortage of ways to channel it to China. That creates a paradox.

The People’s Bank of China can sit back and see if its five rate increases this year curb the fastest inflation since 1996 and damp down speculation in stocks and real estate. That is not a wise choice, given a global increase in price pressures.

The other choice may make matters worse. Higher borrowing costs at this point will serve as a more powerful magnet for the so-called hot money that officials in Beijing are trying to contain. And so there you have it: China’s monetary choices range from bad to worse. China must do much more than just raise rates.

Mr Bernanke is less to blame for this predicament than his predecessor, Mr Alan Greenspan. As Mr Greenspan cut short-term rates to 1 per cent in 2003, speculative flows rushed to Asia, and China especially. It seeped into all types of Chinese assets, including stocks and real estate. Now that the Fed is cutting rates again, China finds itself in a difficult position.

Looked at another way, the sub-prime mess that spooked the Fed enough to move could be a blessing for China in the long run.

A hard landing in the US cannot be ruled out, and that would hurt export-dependent China. There is much chatter about Asia decoupling from the US, yet the region is still highly reliant on the world’s biggest economy.

A couple of rate cuts, meanwhile, will not get US households out of debt. Asia should not assume the US is about to boom just because the Fed loosens credit. While such a dynamic would be a blow in the short run, it might prompt China to work harder to create a thriving domestic economy.

As global investors tighten risk-management guidelines following recent mortgage-market woes, China’s financial system may be forced to grow up.

For example, increased risk aversion – if markets get antsy again – could let some air out of China’s stock bubble, reducing risks to the broader financial system.

Also, given the lack of transparency, investors know little about the true magnitude of China’s bad-loan challenge. Throughout the nation, there are many cities that want to be the next Shanghai or Dalian with massive skyscrapers, five-star hotels, six-lane highways, international airports, world-class universities and cultural centres.

Those efforts are taking place largely beyond the control of Beijing and financed with easy credit extended by banks. When China does slow, the debt hangover will be quite painful.

High stakes

THE upside is that the subprime problems in the US may have Chinese creditors working harder to scrutinise borrowers’ ability to repay loans. That would mean fewer bad loans to clean up if China’s 11.9 per cent growth slows to 5 per cent. The nation would be better off in the decades ahead.

In the short run, though, China’s challenges are increasing as the Fed acts to calm markets. Balancing the need to raise hundreds of millions out of poverty, while also avoiding an overheated economy, just got a little harder – thanks to the Fed.

NO MAGIC BULLET

A couple of rate cuts will not get US households out of debt. Asia should not assume that the US is about to boom just because the Fed loosens credit. While such a dynamic would be a blow in the short run, it might prompt China to work harder to create a thriving domestic economy.

 

Source: Bloomberg (The Straits Times 22 Sept 07)