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12 July 2012

12th July, Thursday




Stricter rules for PRs to sublet HDB flats

Source: Channelnewsasia

Singapore permanent residents (PRs) who want to rent out their public flats will now face stricter subletting rules.

The Housing and Development Board (HDB) on Wednesday announced several revisions to the rules, which take immediate effect. Singapore citizen homeowners will not be affected by the changes.

Among the changes for PR flat owners is a shorter rental period of one year, subject to discretionary extensions. When the one-year period expires, HDB said application for any extension will be assessed on a case-by-case basis, adding that approval will be granted only if there are extenuating reasons. PRs can now only rent out their flats for a total period not exceeding five years.

HDB said that those who had secured approval under the old rules will be allowed to see out the three-year agreement. But once that expires, the homeowner will then be subjected to the new rules. This means that any requests for extensions will be given on a case-by-case basis.

HDB said the revised rule is to reinforce the policy intent of providing HDB flats as homes to the PRs, and to deter those who are buying the flats for rental yield or investment purposes.

If the PR families no longer need the flats for their own occupation, they should sell the flat instead of subletting them.

HDB said that as of April this year, 49,190 flats are owned by Singapore PRs. Of this number, 2,142 owners currently sublet their flats, making up just five per cent of the total approved sublet cases.

An analyst said the new rules are "just to put a check on the potential numbers of PR households that would actually consider renting out their flats". "So it's basically to send a message that if you are a PR, and you are buying an HDB flat, it should be for owner occupation and not with the intention of investment."

Another market watcher feels that the changes will better fit the housing needs of PRs.

Lee Sze Teck, senior manager of Research & Consultancy, Dennis Wee Group, said: "The needs of Singapore PRs may change more frequently than Singapore citizens. After all, citizens live here, whereas SPRs may only be here for work-related purposes. And if their reasons change, one year is good enough for them."

HDB has also stepped up its enforcement against illegal subletting. Last year, the authority carried out 7,000 inspections and took action against 56 flat owners. Of these, 18 had their flats taken back for infringing rules.

Reasons included renting out their flat without fulfilling the minimum occupation period and using the flat as a lodging house for tourists.


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Potong Pasir site may see hot contest

Source: Business Times

The latest 99-year leasehold site in the vicinity of Potong Pasir MRT Station to be released by Urban Redevelopment Authority (URA) is expected to be hotly contested, because of the appeal of mixed-development projects, according to most analysts.

Analysts polled by Business Times Wednesday evening predict 7-15 bids with the winning bid forecast in a wide range - $580-750 per sq ft per plot ratio (psf ppr).

The Urban Redevelopment Authority (URA) announced Wednesday that an unnamed party has successfully applied for the site's release from the reserve list with an undertaking to bid at least $154.474 million or $500 psf ppr at the tender for the site.

The 88,267 sq ft plot, along Tai Thong Crescent, is zoned for residential use with commercial space on the first storey.

The latest plot, at Tai Thong Crescent, is expected to generate a maximum gross floor area of about 308,945 sq ft and can potentially yield around 267 homes, according to URA's estimate.

An analyst says that the site's first-storey commercial component will position it ahead of the pure-residential sites in the vicinity sold at earlier state tenders. "There are good schools like St Andrew's Junior and Secondary as well as Cedar Girls' Secondary School in the vicinity; hence the successful bidder has the option to offer mostly family-sized units," he adds.

Lee Sze Teck, DWG's senior manager, research and consultancy, too points to the site's attractive location, about five minutes' walk from Potong Pasir MRT Station and adds that its commercial component will help address a shortfall in shopping amenities in the area.

"The injection of residential projects like 18 Woodsville, Nin Residence, The Sennett and the recently-sold Pheng Geck Avenue site will increase demand for amenities in the area," he notes.

Giving a slightly different take, another analyst says the latest plot on offer is not as attractive as the three earlier residential sites sold in the vicinity due to its frontage along a "major road junction and a very busy fly-over". Also, part of the development will have a two-storey height limit, which will restrict the development configuration, he adds.

Analysts say the apartments in the Tai Thong Crescent project could sell at $1,250-1,450 psf. DWG predicts the commercial space could fetch $4,000-4,500 psf.


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Koh Brothers to launch mass market project in Pasir Ris at $820 psf

Source: Business Times

Koh Brothers Group is set to launch its first 99-year leasehold pure residential mass market project Parc Olympia along Flora Drive this weekend.

Response from the public is expected to be warm for the 486-unit Pasir Ris-based project due to its attractive pricing at an average of $820 psf, which is deemed to be at the lower rung of properties recently transacted along the stretch.

The 8-block residential development, which would sprawl across 322,368 sq ft of land, will comprise a wide range of facilities such as a 600 metre synthetic jogging track, a 50 metre lap pool, an air-conditioned badminton court and a putting green for golfers.

In addition, the developer will also furnish the project with its own feeder bus which will ferry residents to and from nearby MRT stations as well as the Singapore Changi Airport to provide greater accessibility to the development.

The project which is expected to obtain its TOP in late 2015 is expected to be released in a total of four phases, with phase 1 (which would be launched this weekend) comprising a total of 118 units.

Tailored to cater to a wide range of buyers, unit types will comprise a mix of one-bedders (495 sq ft to 646 sq ft), two-bedders (646 sq ft to 1,292 sq ft), three-bedders (969 sq ft to 2,164 sq ft) and four-bedders (1,324 sq ft to 2,702 sq ft).


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New homes up to $1m are the hot sellers

Source: The Straits Times

New homes that fall within the price bracket of $500,000 to $1 million continue to be the most popular among Singaporean buyers.

In the first half of this year, 3,361 units or 46.3 per cent of all new home transactions made by Singaporeans, fell in that price band as compared with 26.0 per cent and 40.1 per cent in the first halves of 2010 and 2011 respectively, according to data from the Urban Redevelopment Authority (URA).

Consultants say that the demand for such homes continues to see a strong uptake from buyers, such as HDB upgraders who recently sold their flats to tap on the high cash over valuation (COV) recorded in recent months.

Likewise, homes in the $1 million to $2 million region also appealed to local home buyers, with a total of 1,910 transactions (or 26.3 per cent of all new home purchases by Singaporeans) recorded in the first six months of this year as compared to 1,760 during the same period last year, making it the second most popular price segment.

Buyers have also become more price conscious amid waning global economic indicators, with demand for properties over $2 million in a downtrend. In the first half of this year, new home purchases in the $2 million to $3 million, $3 million to $5 million and beyond $5 million price bands fell by 21.2 per cent, 21.3 per cent and 50.0 per cent from 1H2011 to 215, 59 and 12 units transacted, respectively.

And this trend is likely to continue, according to industry watchers as Singaporean buyers are likely to continue leaning towards homes priced under the attractive $1 million mark, with a huge flow of smallish projects and suburban developments coming on stream in the months ahead.


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$7b project Marina One breaks ground

Source: Business Times

The Marina Bay area will see a new addition to its skyline come 2017 with the completion of the $7 billion Marina One - a Khazanah-Temasek mixed development project which had its ground-breaking ceremony Wednesday.

Marina One is one of two projects undertaken by M+S Pte Ltd, the 60:40 joint venture between Khazanah Nasional and Temasek Holdings, as part of a land swap deal between Singapore and Malaysia. Together, the projects have a development value of $11 billion.

Some $5 billion in financing facilities have been secured from eight banks for the projects, according to Azman Yahya, chairman of M+S. They include Singapore banks DBS, OCBC and UOB; and Malaysia's CIMB and Maybank. ANZ, Sumitomo Mitsui and Bank of Tokyo-Mitsubishi will also be providing loans.

When completed, Marina One will comprise four buildings which together will house offices, homes and shops. Linking the four towers is a garden right in the heart of the development.

The two office towers will be 30 storeys high, while the residential towers will boast 34 storeys. M+S said that Marina One will "be eventually linked" to the Marina Bay and upcoming Downtown MRT stations.

Some 60 per cent of the 341,000 square metres of gross floor area will be devoted to office space, while residential units will take up 35 per cent. The remaining 5 per cent of space will be devoted to retail outlets.


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Vacated spaces fill up in hardy office market

Source: Business Times

The huge space that banking giant Citi left behind when it vacated Centennial Tower for Asia Square late last year has almost been filled.

Nearly 90 per cent of the 129,000 sq ft of space left by Citi has already been leased. Some has been taken up by existing tenants at the building, such as Sumitomo Mitsui Banking Corporation (SMBC) and McKinsey, with each leasing a floor of about 18,000 sq ft.

New tenants in the building include alternative dispute resolution company Maxwell Chambers, which has also taken a floor, and PetroChina. Several new-to-market international offshore engineering and energy players have also signed up for space at Centennial Tower.

Current transacted rents in the two buildings are $9-11.50 psf a month.

Industry players say potential major office leasing deals could come from Singapore Exchange, which is said to be mulling various space options. It is understood to be currently occupying about 170,000 sq ft at SGX Centre on Shenton Way under a lease expiring around mid-2014. If it doesn't stay put at its current location, it could relocate to new projects like CapitaGreen and Asia Square.

JP Morgan, which occupies around 200,000 sq ft at Capital Tower on a lease that's expiring at the end of next year, is also weighing its options, including splitting its front and back-end operations, Business Times understands. Analysts suggest CapitaGreen, Marina Bay Financial Centre (MBFC) Tower 3 and Asia Square Tower 2 could be possible candidates for the front office, assuming the bank decides to move out of Capital Tower.

CapitaGreen will have about 700,000 sq ft NLA of offices when it is completed in second half 2014. MBFC Tower 3 was completed in March this year and has about 250,000 sq ft of space available.

Asia Square Tower 1, completed last year, is said to have about 300,000 sq ft of offices available. Asia Square Tower 2 - which will be ready in Q3 2013 - will have about 780,000 sq ft of offices.


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