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26 June 2013

Five executive condo sites put up for sale
Demand for ECs being met despite uncertainty over their future: Analysts

Source: Straits Times | Money 
By Melissa Tan

THE Government will continue to roll out executive condominium (EC) sites in its land sales programme for the second half of this year, despite recent uncertainty over the future of the segment.

Half of the 10 residential sites up for sale on the confirmed list for the next six months are slated for EC development.

The five EC sites are a 1.74ha plot at Westwood Avenue in Jurong West, a 2.86ha plot at Canberra Drive in Sembawang, a 1.81ha plot at Anchorvale Crescent in Sengkang, and two adjacent land parcels in Choa Chu Kang Grove.

Parcel A and Parcel B at Choa Chu Kang Grove, which are 1.64ha and 1.65ha respectively, will be released with the same tender closing date, the Ministry of National Development (MND) said yesterday.

This is aimed at encouraging "more prudent bidding" by developers, it said.

There is one EC site on the reserve list, a 1.91ha parcel at Choa Chu Kang Drive. It is next to The Rainforest, which is also an EC.

Knight Frank research and consultancy head Alice Tan said that while most of the EC sites on the confirmed list are located some distance away from major transport nodes, they are expected to be "reasonably well received as EC homes are currently in demand".

She said the Westwood Avenue site in particular is likely to appeal to developers and home buyers since there has been no EC project launch in the Jurong West area since the Floravale EC, which was completed in 2000.

Noting that ECs account for nearly half the total number of housing units released on the confirmed list for the second half, CBRE Research associate director Desmond Sim said this reflected the Government's "firm commitment" to meet demand for such units from first-time buyers and those upgrading from Housing Board flats.

ECs are a form of hybrid housing and cater to a "sandwiched class" of home buyers who might not qualify for public housing but cannot afford private property.

The segment has been in the spotlight in recent months after Minister for National Development Khaw Boon Wan raised the issue that EC owners, who receive government subsidies, make a bigger profit in the resale market than the average flat owner.

Mr Khaw also hinted that he may relook the EC scheme, triggering concerns over EC supply.

However, Jones Lang LaSalle national director of research and consultancy Ong Teck Hui said the number of EC units released in the Government Land Sales programme in the second half does not suggest that supply will be "scaled back significantly in tandem with policy revisions".

Still, SLP International research head Nicholas Mak pointed out that the total number of EC units expected to be developed has slid slightly from 3,110 units for the first half of this year to 2,785 units for the second half.

Releasing EC sites in non-mature housing estates will help to moderate the future prices of these projects, Mr Mak added.

The MND said yesterday that it will continue to require that EC site developers only launch units for sale 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.

This applies to all the EC sites released in the second half.

Govt offering fewer residential sites to balance supply
Confirmed list has a commercial site to kick-start Woodlands development

Source: Straits Times 
By Melissa Tan

THE Government will roll out fewer residential land sites to developers in the next six months, as it strikes a balance between ensuring adequate supply while preventing a glut.

A total of 24 sites able to yield 14,155 homes are on the Government Land Sales (GLS) programme for the second half of the year, released yesterday.

That is well down from 32 sites on the first half-year's list, though the number of potential homes is similar at 14,035.

Still, the confirmed list has just 10 sites, down from 13 sites. Confirmed sites go on sale, while reserve list sites are put up for tender only if developers make an acceptable initial offer.

The reserve list allows the Government to tweak supply according to changing conditions.

Aside from housing sites, one highlight in the latest confirmed list is a commercial site at Woodlands Avenue 5 and Woodlands Square. This site will "kick-start the development of Woodlands Regional Centre", the Ministry of National Development (MND) said.

Woodlands Regional Centre is meant to anchor the North Coast Innovation Corridor, designed to add more jobs near homes in Singapore's north, it said.

The 1.97ha site is expected to provide 66,000 sq m in gross floor area of office space and 3,500 sq m of retail space.

Property industry consultants said the latest GLS residential site programme was on the cautious side and likely took into account a potential oversupply of homes.

"MND is trying to balance developers' desire to build their residential land and potential oversupply, as a high number of homes come onstream in the next few years," said ERA Realty key executive officer Eugene Lim.

Jones Lang LaSalle national director of research and consultancy Ong Teck Hui said uncertainty over interest rates and the availability of credit in the months ahead probably played a part.

The 10 confirmed list sites include five executive condominium (EC) sites, and could yield nearly 6,000 homes.

This comes on top of the record high supply of 100,600 units, including ECs, in the pipeline, of which 39,000 units still remain unsold as of the first quarter of this year, MND said yesterday.

This is fewer than the approximately 6,900 homes released on the confirmed list in the first half of the year, which Colliers International research and advisory director Chia Siew Chuin said was "a sign that the Government wants the market to tell it what it wants, rather than feeding it with sites regardless of market conditions".

Excluding ECs, the supply of private homes on the confirmed list for the full year is 7,000 units, well down from 8,060 units last year and a bumper 13,255 units in 2011, Mr Ong said.

MND also said yesterday that it will continue to put similar residential sites up for sale with the same tender closing date, to curb overly ambitious bids.

It said two pairs of sites on the confirmed list will have their tender closing dates "batched". The first pair consists of two adjacent private residential plots at Upper Serangoon View. The second pair is made up of two adjacent EC sites at Choa Chu Kang Grove.

There are 14 sites on the reserve list, including one EC site, which could yield about 7,500 homes.


Family sue their lawyers over shophouse deal
Misled over its lease, they claim lawyers were negligent

Source: Straits Times
By Selina Lum

A FAMILY of three bought a Kallang Bahru shophouse for $900,000, believing it would be in their possession for 62 years. Instead, they found out that there were only 17 years left on the property's lease. Now the family of businessman Su Ah Tee, 67, are suing their lawyers for negligence.

The defendants Allister Lim and his law firm Allister Lim and Thrumurgan, in turn, pin the blame on the seller and the buyers' property agent for misleading Mr Su and his family.

An issue in the suit, which began in the High Court on Monday, is whether a conveyancing lawyer is expected to conduct a title search and give a report, including the residual leasehold tenure, to the buying client before the option to purchase is exercised or the deal is completed.

In March 2011, Mr Su decided to purchase the shophouse from the seller William Cheng.

He was told by his property agent Ng Sing that there were 62 years left on the leasehold and the property had two tenants, earning rental income of $3,800 a month.

Mr Su, who bought the unit in the names of his wife Lye Yin and son Su Hong Quan, took out a 30-year mortgage of $630,000 on the shophouse to fund the purchase. He hired Mr Lim as the conveyancing lawyer. Mr Lim had previously acted for the businessman in the purchase of other shophouses since December 2010.

The deal was completed in June 2011. The following month, Mr Su received an e-mail from Mr Lim's law firm informing him that the unit has a residual leasehold of only 17 years.

Around the same time, he also found out that the two tenants were in fact sub-tenants, which meant he could not collect rent directly from them.

In September that year, the Su family, represented by Mr Thomas Lei, filed a professional negligence suit against Mr Lim and his firm.

The defendants, represented by Mr Christopher Anand Daniel, are arguing that there was no negligence on their part for failing to alert the family about the remaining leasehold tenure or forwarding the title search to them.

They also contend that Mr Su had not specifically instructed them to check that the lease on the shophouse was more than 60 years.

Furthermore, they claim that the family had failed to take steps to minimise any loss by voiding the deal on the basis that they were misled.

The defendants have also added the seller and property agent as third parties to the suit, seeking to claim from them a contribution of any damages that may be ordered by the court. The trial continues.

Property agent gets jail for CBT, forgery

Source: Straits Times
By Khushwant Singh

A PROPERTY agent who pocketed $2,900 of his client's money and then resorted to forgery to cover the crime was jailed for three weeks yesterday.

Benly Ang, 37, pleaded guilty to committing criminal breach of trust and to forging his client's handwriting to indicate receipt of the money.

Ang was an agent with Knight Frank Property Network in May last year when his client, Mr Nicholas Loh Kah Teck, 27, was looking to rent an apartment at the Coastarina condominium in East Coast Road.

The $2,900 sum was paid as a booking deposit and reflected in the letter of intent between Mr Loh and the landlord.

However, before the lease agreement could be signed, the landlord jacked up the rent.

Mr Loh backed out and Ang collected the full refund of $2,900 on May 25. Instead of handing it to his client, he used it to settle his gambling debts and loans from loan sharks. He also told Mr Loh that the refund would take some time to arrange.

On June 4, he handed the landlord a copy of the letter of intent with a handwritten addition, purportedly from Mr Loh, stating that he had received the $2,900.

Ang had written this himself.

He handed a cheque to Mr Loh on Aug 3 but it bounced due to a lack of funds.

A week later, Mr Loh went to the police.

Deputy Public Prosecutor Serene Chew said Ang had abused his position as a property agent.

Agreeing, District Judge Mathew Joseph said clients are entitled to expect that property agents carry out their duty professionally.

"By your actions, you have brought a stain to your profession," the judge added.

Ang, who has made full restitution, will start his sentence on July 16 so as to settle personal matters.

He could have been jailed up to seven years for committing criminal breach of trust and up to four years for forgery. He could also have been fined up to $10,000 for each offence.

Office landlords can't bank on finance sector

Source: Straits Times | Money 

SINGAPORE'S office landlords, long dependent on banks, are broadening their tenant base to soak up empty space as the commercial property market inches towards recovery after a three-year slump in rents.

Rents in the best buildings may start to rise this year, according to brokers CBRE Group and Cushman & Wakefield.

Vacancies fell to 5.1 per cent in the first quarter, the lowest since September 2008, from the previous three months, CBRE said. Annual new supply will be 38 per cent lower than in the past 20 years, CapitaCommercial Trust forecasts.

Property owners such as CapitaCommercial and Suntec Real Estate Investment Trust are using the cheapest rents in three years to lure commodity traders, law firms and software companies. The new tenants are moving in as financial service firms scale back expansion plans in the wake of the European debt crisis.

"Singapore's office market is getting a lot more diversified," said Ms Elysia Tse, senior vice- president of strategy and research at Aviva Investors Asia, which has US$2.5 billion (S$3.2 billion) in property assets in the Asia-Pacific region. "We are at the turning point where we see supply stopping, demand slightly turning positive, vacancy declining, and rents have stopped falling."

Prime office lease rates declined to S$9.55 per sq ft per month in the first quarter, the lowest since the same period in 2010, said CBRE, which ranks Singapore's overall office rents the 19th highest globally. Rents for prime space peaked at S$18.80 in August 2008, CBRE data shows.

The office market is benefiting from Singapore's emergence as Asia's wealth management centre. The city has the fifth-largest proportion of millionaire households in the world, at 8.2 per cent, according to a Boston Consulting Group report last month.

Singapore also has become a commodities hub, with Asia's biggest oil trading market for companies such as BHP Billiton, Exxon Mobil Corp and Chevron Corp, and the largest foreign exchange centre in the region after Tokyo.

"We are becoming more optimistic about the prospects and outlook for the office sector," said Mr Moray Armstrong, executive director of office services at CBRE in Singapore.

Companies are being attracted by some of the lowest occupancy costs in Asia.

Rents, local taxes and service charges average US$99.65 per sq ft on an annual basis, according to a CBRE survey published last Friday. That compares with US$235.23 in Hong Kong, the world's most expensive office market, and US$161.16 in Tokyo.

British law firm Clifford Chance, French oil-and-gas company Lynx Energy Trading, US publisher McGraw Hill Financial, German software maker Software AG and Zurich-based bakery Aryzta are among companies that have moved into Marina Bay Financial Centre's Tower 3, completed in March last year.

Clifford Chance, based in London, moved last year from One George Street as it expanded, said Mr Justin Young, its Singapore and Bangkok general manager.

The firm has taken 35 per cent more office space than before and occupies 31,000 sq ft at the Marina Bay location. "The rents were very favourable because we signed the lease before the building was completed," Mr Young said. "It made very good financial sense for us to move as we could lock in these rents for a long period of time."

The downside of diversification is that the new tenants typically cannot afford the same rents as banks and brokers, which are willing to pay top dollar for large, contiguous spaces where they can consolidate their operations.

The average monthly rent for grade-A offices at Marina Bay fell 1.1 per cent to S$10.18 per sq ft in the final quarter of last year from the previous three months, Cushman said. The broker defines grade-A offices as those built in the past three years and located in sought-after areas.

Still, some of the recent Marina Bay transactions have set rents of more than S$12 per sq ft, said Mr Toby Dodd, managing director for Singapore at Cushman. The broker expects average rents to climb 5.8 per cent to S$10.77 per sq ft by this month as vacancies shrink.

Prime office lease rates declined to S$9.55 per sq ft per month in the first quarter, the lowest since the same period in 2010, according to CBRE.