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14 July 2012

14th July, Saturday




GDP shrinks 1.1% in Q2: advance estimates

Source: Business Times

The Republic's economy performed worse than expected in both the second and first quarters, igniting talk of a looming technical recession in the third quarter.

Advance estimates from the Ministry of Trade and Industry (MTI) Friday showed GDP shrinking 1.1 per cent in 2Q from the previous quarter on a seasonally adjusted annualised basis, as manufacturing faltered. This was a sharp reversal from 1Q's 9.4 per cent expansion, which MTI lowered from the previously announced 10 per cent.

Several economists have trimmed their full-year growth forecasts, and some have raised the odds of a looser monetary policy in October.

Quarter on quarter, Singapore's economic contraction in 2Q was largely due to a 6 per cent sequential drop in the manufacturing sector. A decline in biomedical manufacturing output more than offset gains in the transport engineering cluster, MTI said.

The construction sector grew by just 0.3 per cent, supported by ongoing public civil engineering works. The services sector expanded 0.4 per cent. Tourism-related activities grew at a moderated pace, while wholesale and retail trade and the finance and insurance sectors contracted.

Minister for Trade and Industry Lim Hng Kiang Friday maintained confidence in Singapore's economy growing 1-3 per cent this year, in line with the official forecast, if no major trouble develops in Europe.


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Koh Bros, CDL sell homes at brisk pace

Source: Business Times

Koh Brothers is said to have sold about 80-plus of the 118 units it released at Parc Olympia at Flora Drive on Thursday evening at an average price of $820 per sq ft after an early-bird discount of 16 per cent. Most of the units are said to have been picked up on Thursday.

Market watchers reckon the developer could release more units in the 486-unit, 99-year leasehold condo project in the Upper Changi location over the weekend.

Word in the market Friday evening was that City Developments Ltd (CDL) and Hong Realty had moved 25 of 40 terrace houses released at the preview of Haus@Serangoon Garden. Prices range from $2.4 million to $2.7 million apiece for intermediate terrace houses, which will have land areas ranging from 1,615 sq ft to 1,914 sq ft and floor areas of 3,595-3,918 sq ft. Corner units cost more as they sit on bigger plots of 2,175-3,144 sq ft; their floor areas are 3,294-4,736 sq ft.

In all, Haus@Serangoon Garden will have 18 corner units and 79 intermediate terrace homes. All 97 units have two storeys, a basement and an attic.

Over at the Interlace condo project on Depot Road, CapitaLand is unveiling today two new showflat units - ground-floor or "garden home" units - incorporated in the actual development.

The 99-year leasehold project's average pricing is expected to remain in the $1,100-plus psf band. Still available are three and four-bedroom apartments and penthouses; all the two-bedders were snapped up much earlier. According to developers' sales stats captured by Urban Redevelopment Authority, 728 of the project's 1,040 units were sold as at end-May this year.

Next week, Wee Hur Holdings' Parc Centros condo near Punggol MRT Station goes on the market at an average price of $950 psf. The 618-unit project will have one- to five-bedroom apartments as well as penthouses.

Those keen on city living can look forward to United Industrial Corporation's upcoming V on Shenton (or Five on Shenton), which is tipped to be priced at $2,300-2,500 psf on average. The project's 510 units will be housed in a 54-storey residential tower. Units range from studios to three-bedders; there will also be six penthouses.


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Some areas ripe for building curbs

Source: The Straits Times

The increasingly crowded areas of Rosyth, Hillside and Kovan could be ripe candidates for tougher building measures to ease congestion, said property experts.

These traditionally landed areas have become more built-up, with at least a dozen new projects being built in the last five years.

The Ministry of National Development (MND) said on Tuesday that the Urban Redevelopment Authority (URA) and Land Transport Authority (LTA) are studying whether a more stringent cap is needed, specifically for Rosyth, Hillside and Kovan.

The stricter caps would be similar to those imposed on Telok Kurau, where there has been a rapid growth of blocks featuring small apartments.

This is in line with the Government's move to cap the number of units allowed for flat and condominium developments in low-density residential areas.

Guidelines could also ensure a mix of unit sizes, restricting developers from building predominantly small ones. An analyst pointed out that roads in landed areas are usually one-way streets, which could exacerbate traffic congestion. Security could also be a concern if the tenant population is large and varied.

But there is nothing to stop landed home owners in the Rosyth, Hillside and Kovan areas from selling their properties collectively because the land can be used for non-landed housing as well, noted Mr Lee Sze Teck, Dennis Wee Group's senior manager of research and consultancy.

'This has affected the character of the area,' he added.

But he was sceptical that building controls would alleviate traffic congestion, as motorists use the residential roads as a short cut to the expressway. Measures can also be counter-productive, and may induce pre-emptive irrational buying among home hunters.

'Putting a minimum size on units may result in developers designing more bedrooms in the units, which does not solve the density and traffic problem,' Mr Lee said.


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Strong interest in mixed-use projects

Source: The Straits Times

Mixed-use projects where flats run up against shops and other commercial outlets are the property industry's latest big thing - but they can also turn out to be a mixed blessing for buyers.

Noise, crowds, lack of privacy and faster wear and tear are among issues that can affect the lifestyle in such developments and hit the resale potential.

But whatever the pitfalls, the mixed-use tag on a site is proving irresistible for developers, as some recent en bloc sales testify. Novena Ville went for $131.52 million in May to a subsidiary of the Fragrance Group. The sale generated profit of about 30 to 40 per cent above current market prices for both apartment and shop owners. In March, the freehold mixed-use Seletar Garden was sold en bloc for $96.2 million, well above expectations, to a consortium led by Oxley Holdings.

Both sites can be redeveloped into new mixed-use projects.

On Wednesday, the Urban Redevelopment Authority (URA) announced that a mixed-use site has been triggered for sale by a developer who offered to bid at least $154.5 million.

An analyst noted that mixed-use projects make it easier for people to shop for necessities and can be a more attractive option than a secluded condo. But property agents said buyers have raised concerns, including congestion, noise and security.

However, buyers should not assume that there will be buoyant resale interest.

'It really depends on the state of the mall then, and there will be buyers who value exclusivity and quieter living options,' said one analyst.


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Investment Sales


Adjoining shophouses for sale in Chinatown

Source: Business Times

The owners of two adjoining shophouses in Chinatown are putting up the conservation units for sale with an indicative price of $12-13 million, says a property consultancy.

The 3.5-storey units are at 36 and 38 Pagoda Street, on the pedestrian mall, about 150 metres from the New Bridge Road entrance to Chinatown MRT Station. The total floor area for both units is about 6,800 sq ft, and the current combined rent is about $33,000 per month.

The marketing agent will solicit expressions of interest until 3pm on 27 July.


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