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19th August 2014

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First phase of Jurong Lake Gardens to be ready by 2017: Khaw

The Jurong Lake Gardens will retain the heritage elements of the Chinese Garden and the Japanese Garden, but these will be refreshed as part of the overall development, says National Development Minister Khaw Boon Wan.

Source: Channel News Asia / Singapore

SINGAPORE: Residents in the city-state, particularly in Jurong, can look forward to enjoying the 70-hectare Jurong Lake Gardens "as early as 2017", said National Development Minister Khaw Boon Wan in a blogpost on Monday (Aug 18).

He wrote that heritage elements at the Chinese and Japanese Gardens will be retained, but refreshed as part of Jurong Lake Gardens. The Gardens will be developed in phases, with Jurong Lake Park being the first to be completed in 2017, and implementation plans will dovetail with the greater plans for Jurong Lake District.

Mr Khaw also called on the public to share their ideas with NParks on how it can develop the area. NParks will invite ideas from planning and landscape design professionals and the local community next year for the development of the Gardens, he said.

The Chinese Garden and Japanese Garden were both built in the 1970s, and visitors comprise residents in surrounding neighbourhoods and the occasional tourist. Dr Harvey Neo of the National University of Singapore's (NUS) Geography department said he believes redevelopment would elevate the gardens' standing and create greater national interest in them.

"We're talking about a fairly radical imagination of the gardens, so I won't be surprised if (the gardens) look completely different. But that's almost inevitable because we're really trying to create new space, we're trying to incorporate new ideas," he said. And while he does not feel that the Japanese Garden had any iconic features, Prof Neo said the Chinese Garden's pagoda deserved to be retained. Still, "if they do not want to retain that, I think it's understandable as well because we're really talking about a major shift in how we use the space there," he said.


Mr Khaw also reiterated Prime Minister Lee Hsien Loong's National Day Rally speech, which highlighted the new Science Centre as the "jewel" in Jurong when completed around 2020. The new Centre will be located at the eastern bank of Jurong Lake, next to the Chinese Garden MRT station.

"We will make it fun, educational and spectacular, in keeping with changing times and our achievements over the decades. Its location will enable NParks to integrate the future Science Centre with the new Gardens, combining themes such as science, technology and horticulture in a uniquely Singaporean way," Mr Khaw wrote.

Dr Neo said the site of the future Science Centre next to Jurong Lake presents new opportunities. "I hope they will make full use of the location and think of educational activities that involve the lake," he said. "The sky's the limit here. They can really push the boundaries of scientific learning. This is a unique opportunity for them to think big about the kinds of experiences we want to give to the visitors.

(Artist impressions: NParks)


The Ministry of National Development (MND) also provided more details on developing the Jurong Gateway, as indicated by Mr Lee.

One idea being considered is to realign the stretch of the AYE from Yuan Ching Road to Jurong Town Hall Road to free up land south of Jurong Lake for residential development, and to integrate the Pandan Reservoir area with the district to form a larger and more cohesive development area, it said.

"Environmental improvements can be made to the surrounding parks and water bodies such as Jurong River, Pandan River, Pandan Reservoir and Teban Gardens to create an attractive waterfront residential district with good quality living environment amidst lush greenery, similar to those found in Punggol and around Bishan-Ang Mo Kio Park," MND said.

But Dr Neo urged caution when it comes to moving the AYE southwards, saying it should be studied further. "Of all the initiatives that were announced, that strikes me as a little bit hard to understand because I cannot see its relative advantage. I don't know how much southwards they want to move," he said. "I assume it is to free up a certain amount of space, so that the entire area can be bigger and development can be more seamless but this freeing up of extra space has to be weighed against the extra cost and the inconvenience."

The cost of the endeavour is hard to estimate without knowing what the freed-up land would be used for, he noted, pointing out that shifting entire expressways is not common abroad due to high costs. "I'm very sceptical. It was mentioned that (the land) will be used for housing in the plan, but how much extra housing are we talking about here? The details are not (furnished) yet."


Mr Khaw added in his blogpost that there are many other "exciting plans" in store for Jurong, including major improvements to the transportation networks. "All these will take years to realise. We shall stage the implementation," the minister said.

For instance, as part of the Land Transport Authority's (LTA) Land Transport Master Plan 2013, the current East-West and North-South MRT lines serving the region are currently being upgraded. Two new lines - the Cross-Island Line and Jurong Region Line - are expected to be completed by around 2030 and 2025, respectively, MND stated.

It added that agencies will explore building more dedicated cycling paths and park connectors to strengthen connectivity and accessibility between Jurong Lake District and the surrounding residential and business nodes such as Pandan and Teban gardens estates, Tengah New Town, JTC’s proposed integrated R&D and industrial township centred around Clean Tech Park, NTU, and Bulim and Tengah industrial estates.

"This will reduce the need to drive within the district and help promote a healthier lifestyle," MND said.

As for plans to site the future Kuala Lumpur-Singapore High-Speed Rail terminus in Jurong East, MND said the Government is currently studying possible locations. These plans will undergo detailed planning and technical studies and will be progressively implemented in the next 20 to 30 years, it added.


Once the Jurong Lake District development is complete, property experts believe there will be high demand for houses near the lake or coastal area, and they expect authorities to continue focusing on infrastructure development in Jurong.

Professor Sing Tien Foo of NUS' Department of Real Estate noted that the the plans for the Cross Island and Jurong Regional lines go hand in hand with the land use plan. "You cannot wait for the area to be developed then you put in all the infrastructure and roads. So some of these developments may have to take place earlier to support the future expansion of the area and land use intensification of the area," he said. "With more businesses and residents moving into the area, I think the demand for infrastructure capacity is also expected to increase. Early planning will actually minimise some of these interruptions in the long term and also allow for smoother transition into more integrated land use."

- CNA/kk/xy

Congested roads, factory pollution obstacles to transforming Jurong

Area could potentially emulate East Coast, but will need a lot of redesign, says analyst

Source: Today Online / Singapore

SINGAPORE — The makeover of Jurong, complete with a scenic new garden and waterfront residential housing, could potentially be a big draw, but urban planners will have their work cut out to fully transform the area and cast off its industrial image, analysts said.

As the Government yesterday announced that the first phase of the Jurong Lake Gardens project — the Jurong Lake Park— will be completed by 2017, the analysts noted that with its water bodies, the area could emulate idyllic areas such as East Coast and Punggol. However, obstacles to achieving this include the congested public transport infrastructure as well as pollution from petrochemical plants on Jurong Island nearby, they said.

Writing on his blog, National Development Minister Khaw Boon Wan acknowledged that the “exciting” plans for Jurong, including major improvements to the transportation networks, would take years to realise.

The Jurong Lake Park was originally planned in 2012 as one of three “Destination Parks” to attract Singaporeans across the island with its unique features. Construction has started at one of the parks, East Coast Park, and will last until 2016.

The third park, Admiralty Park, is currently “at the consultancy stage” and will be completed by 2016 as well, said the National Parks Board. The revamp of Jurong will include the integration of the Chinese Garden, the Japanese Garden and the Jurong Lake Park into the Jurong Lake Gardens.

New public housing developments around Pandan Reservoir is also on the cards. The Urban Redevelopment Authority said the conceptual idea will require detailed planning and technical studies. Currently, a mix of industrial offices, commercial buildings and Housing and Development Board flats line the area around the reservoir.

Analysts told TODAY that while housing prices in the Pandan Reservoir area might not be able to match those of waterfront housing in other parts of Singapore, such as Punggol and East Coast, developers will still be drawn to opportunities in the land around the reservoir.

Mr Nicholas Mak, head of consultancy and research at SLP International Property Consultants, said high-rise housing could be built there.

Noting that the area has no coastal park, he said: “I think it can potentially be like East Coast, but it will also need a lot of redesign.”

However, the analysts said Pandan Reservoir’s appeal could be affected by pollution from petrochemical plants on Jurong Island, as well as crowded roads and train networks.

“When the wind is going in a certain direction, will it blow the smell from the chemical factories towards the residents? ... There is a possibility, depending on how near they are,” said Mr Mak.

Mr Ku Swee Yong, chief executive of Century 21 Singapore, noted that the Ayer Rajah Expressway (AYE) is usually congested and that the East-West MRT Line has reached its maximum capacity.

New residents will end up competing with heavy vehicles on the jammed streets, he added, suggesting that the AYE be widened or MRT lines be extended to the area.

-By Xue Jianyue

Singapore Real Estate

Jurong Lake area to be new draw for developers

Leisure elements, potential high-speed rail terminus to boost area's value

Source: Business Times / Top Stories

[SINGAPORE] Developers are expected to take a keener interest in future state land tenders in Jurong Lake District - whether for residential, commercial or hotel projects.

The buzz created from efforts for greenery attractions in the area is expected to give a fillip to home values there.

Attention will be heightened further if a decision is made to house the future Kuala Lumpur-Singapore high-speed rail terminus in Jurong Gateway, said property consultants yesterday. 

They were giving their views on plans announced on Sunday night by Prime Minister Lee Hsien Loong to liven up Jurong Lake District.

"Going forward, the plans to realign Ayer Rajah Expressway, convert some of the old industrial estates to waterfront housing, etc, could greatly enhance the liveability of Jurong as it enjoys an image overhaul, thanks to all the leisure elements that the government will put in place," said Christine Li, research head at OrangeTee.

"Existing property owners can look forward to one of the most liveable housing estates in Singapore outside the central and fringe areas," she added.

CBRE' Singapore research head Desmond Sim too thought the changes will "remove the stigma of an industrial township that Jurong was originally planned for".

National Development Minister Khaw Boon Wan blogged yesterday: "Since 2008, Jurong has made steady progress to be our largest regional centre, outside of the city."

Jurong Lake Gardens, spanning over 70 hectares, will integrate the revitalised Jurong Lake Park (to be completed by 2017), as well as the Chinese and Japanese Gardens which are set to be spruced up, and not forgetting the new Science Centre, which will emerge next to the Chinese Garden MRT Station around 2020.

Giving her take on the announcements on residential property values, DTZ's regional head (SEA) research, Lee Lay Keng, said: "Even though the overall conditions in the residential property market remain tepid, the buzz created could provide a minor boost to existing projects and help support prices and transaction volumes in the area."

"In the longer term, the development of Jurong Lake Gardens will enhance the living environment for residents, similar to the Bishan-Ang Mo Kio Park, and increase interest in the area," she added.

The plans are expected to fuel developers' interest in a 99-year private housing site just above Jurong Lake - between The Lakeshore and Lakeville condos - that will be launched in December through the confirmed list of the Government Land Sales Programme. Said CBRE's Mr Sim: "While the number of bids is expected to be prices are expected to be dampened by current market sentiment and confidence."

Ms Li of OrangeTee expects development sites for residential, commercial as well as integrated uses (eg office, retail and residential elements) to whet developers' appetite - if they are released over the next year or two. "Hotel sites are also likely to be released once the terminus of the high-speed rail is confirmed," she added.

Mr Sim added that should the terminus be located in Jurong Gateway, it could further boost the currently nascent office market in the area, he added. "The inclusion of the high-speed rail terminus will be the final jigsaw piece to cement Jurong Regional Centre as a unique lakeside destination for business and leisure."

JLL's head of research, SE Asia, Chua Yang Liang, said the realignment of the AYE will generate the opportunity to develop "more lakefront homes for the masses". "Beyond the current slowdown in the residential market, the opportunity would be much sought after by developers in future...We can expect the regenerative efforts by the state to be capitalised into higher real estate values in the long term."

-By Kalpana Rashiwala

Jurong makeover 'will breathe new life into estate'

Residents cheer plans, but are disappointed over delay of hospital opening

Source: Straits Times / Top of The News

LAKE gardens in the heartland, a new science centre and maybe even Singapore's first high-speed rail station.

Jurong, the gritty industrial hub of the country, is transforming into a jewel in the west, and residents and workers in the area are cheering the prospect.

Almost all 24 Jurong residents and business owners The Straits Times spoke to said the changes would breathe new life into an old estate, though a few expressed disappointment that a planned hospital will open six months later than originally scheduled.

That aside, new plans for the Jurong Lake District include a new Science Centre, a possible terminus for the Singapore-Malaysia high-speed rail network, and an expanded park that will combine the decades-old Chinese and Japanese gardens, and the Jurong Lake Park, Prime Minister Lee Hsien Loong announced on Sunday in his National Day Rally speech.

Taxi driver Patrick Ong, 54, told The Straits Times yesterday: "The upgrade will be good, it will give Jurong a younger feel."

Together, the Jurong East and Jurong West Housing Board estates are home to 358,000 residents. The Jurong constituency spans more than 12 sq km.

One retiree, who wanted to be known only as Mrs Cheong, is looking forward to the new 70ha Jurong Lake Gardens. "The gardens are a national treasure and so beautiful, but so few people come here. It's such a waste," said the 62-year-old.

The new gardens will be completed by 2017, said National Development Minister Khaw Boon Wan in his blog yesterday.

Long-time fans of the Science Centre were also excited to find out it will have a new home, on the north of the lake just beside the Chinese Garden MRT station.

Madam Prabavathi Natarajan, 34, started taking her son to the science centre when he was still in a stroller. Now he is six and "knows about motors, electromagnets and things like that", said the housewife, who lives in Jurong Town Hall Road.

She plans to take him and her older son to the new centre even more often.

Over the years, 29.5 million students have visited the Science Centre, which was built in 1977.

The new centre, the "jewel" of the district, said Mr Lee, will be integrated with the lake gardens.

Others were happy that there might soon be one more way to travel to Malaysia. The terminus of the Singapore-Kuala Lumpur high-speed rail link - slated to be completed by 2020 - may be located in Jurong.

It would make life easier for people like Malaysian Sha Chia. The 38-year-old retail associate, who lives in Johor Baru, takes a bus to Woodlands and then the MRT to get to work at a Jurong shopping mall.

"If there is a train, it will be very convenient for me," he said.

Businesses said they were looking forward to increased traffic.

"The new developments will only make the area more exciting," said Mr Tan Jian Da, 26, a deputy assistant outlet manager at Sync restaurant in Westgate mall.

On another note, three of the 24 interviewed were disappointed that the new Ng Teng Fong General Hospital will not be ready this year, because of a shortage of manpower and delay in getting construction parts from Thailand.

"When my son had food poisoning a year ago, we had to rush him to the National University Hospital (in Kent Ridge)," said Mr Lim Swee King, who lives at the Park Vista condominium in Lakeside.

And there were those worried they would be left behind as Jurong modernises and moves ahead.

Mr Tay Lye Whad, 60, who has been running the Bao Sheng Minimart in Jurong Street 13 for more than 30 years, said business has been flagging for more than a decade. "Nowadays people stop and shop at the shopping malls like Jem," he said. "It's hard for shops like us to stay open."

The shops beside his store are shuttered and empty.

"Business was so much better last time. The Government should do something to help old businesses like mine," he said.

-By Danson Cheong, Lester Hio, & Tjoa Shze Hui

Business-leisure hub plans will boost home prices: Experts

Source: Straits Times / Top of The News

AMBITIOUS new plans to make Jurong a business and leisure centre will likely boost home prices, property consultants told The Straits Times yesterday.

Optimism about the area was lifted with the Sunday announcement that a new Jurong Lake Gardens will be developed in conjunction with other projects already under way nearby.

A Science Centre will also be built and there is also a possibility that the terminal for the Singapore-Kuala Lumpur High Speed Rail will be in Jurong.

The new plans underscore Jurong's development as the largest commercial hub outside the Central Business District (CBD), which has been going on apace for some years.

"It's going to be an all-encompassing township where a person can work for a multinational corporation two MRT stations from his doorstep, get home in less than 10 minutes and enjoy the leisure lifestyle by the lake," said PropNex chief executive Mohamed Ismail Gafoor.

Housing Board flats in the area may command a premium of about 20 per cent once plans for the district materialise, he added.

That is similar to the premium paid in estates like Bishan with its major park and schools, and Queenstown, which is close to the CBD.

Jurong rents could be pushed up by about 20 per cent over the next three years, partly because the Ng Teng Fong General Hospital is due to open in the middle of next year. That, in turn, should boost housing values.

Lakeside, which along with Jurong Gateway forms the Jurong Lake District, has become a "significantly private residential" area, said R'ST Research director Ong Kah Seng.

Most of the newly completed 99-year leasehold condominiums are priced about $1,000 per sq ft (psf), with more recent launches like Lakeville in May at about $1,300 psf.

But the key game-changer is the possibility of the rail terminal.

"This would put it above other regional centres in Singapore. Tampines is near the airport, but that's not as direct as having a terminus regionally linking a capital city to another," said Dr Chua Yang Liang, Jones Lang LaSalle's head of research for Singapore and South-east Asia.

Singapore Business Federation chief operating officer Victor Tay added: "The longer-term prospect that the rail will cut across more than 10 Asean countries, linking to Guangxi in China, presents immense trade potential for businesses.

"Many will look to Jurong as a strategic gateway to Asean and China."

-By Rennie Whang


Lian Beng, Heeton, KSH to co-develop A$150m mixed-use site

Development is situated in Fortitude Valley, close to Brisbane's CBD

Source: Business Times / Companies

LIAN Beng Group, together with Heeton Holdings and KSH Holdings will, through their respective subsidiaries, co-develop a A$150 million (S$174 million) mixed-use site in Brisbane, Australia.

The development is situated in Fortitude Valley, one km from Brisbane's central business district.

Lian Beng's executive chairman said: ''We are excited to break ground in a new market. Going in together with partners whom we have cooperated with in past successful projects further strengthens our resolve in making this new venture fruitful.''

The three companies yesterday identified two components to the joint venture.

-By Carine Lee

Heeton, KSH and Lian Beng take on Australia

Source: Straits Times / Money 

THREE Singapore Exchange-listed property and construction companies are joining forces in a bid to take on the Australian market.

Heeton, KSH and Lian Beng announced yesterday that they are co-developing an A$150 million (S$174.1 million) hotel and residential apartment development in Brisbane.

The development is in Fortitude Valley, close to central Brisbane and near popular tourist destinations such as Chinatown and Brunswick Street Mall.

An Australian partner, Marvel Investments, has been brought in for the residential development.

Marvel will have a 67 per cent stake in the residential development project, with Heeton, Lian Beng and KSH holding effective interests of 18.15 per cent, 9.9 per cent and 4.95 per cent respectively.

The residential project will consist of two towers: a 30-storey block with 187 apartments and a 23-storey tower with 137 units.

The joint venture partners are casting their nets far and wide to catch investors interested in the Australian market.

Besides Australia, they will promote the residential project to Asian investors from key target markets like Singapore, Malaysia, Indonesia and Hong Kong.

Only Heeton and Lian Beng will be involved in the hotel development project. Heeton will have a 70 per cent stake, while Lian Beng will hold a 30 per cent interest.

A 23-storey hotel tower with 198 rooms is planned in anticipation of rising tourism demand.

The firms said the mixed-use development will form part of the revamped skyline of Fortitude Valley, an area being rejuvenated by municipal officials.

Officials aim to double overnight-visitor spending in Brisbane by 2020, with an additional 450 rooms needed per year.

An A$4 million refurbishment of the adjoining Brunswick Street Mall is already under way.

This is Heeton and Lian Beng's first venture into the Australian market. Heeton chief operating officer Danny Low said in a statement yesterday: "We chose Brisbane to make our maiden foray into the Australian market as we believe the market is highly attractive (because of) its sociopolitical stability and a high level of transparency."

Lian Beng executive chairman Ong Pang Aik said: "We are delighted with this opportunity to jointly develop a landmark hotel in a foreign city."

Australia has become a rich hunting ground of late for Singapore property and hospitality players looking to expand their business.

Frasers Centrepoint's unit, Frasers Hospitality Global, made an A$100 million acquisition of an office building in Brisbane's central business district last year.

Luxury hospitality firm Banyan Tree Hotels & Resorts as well as trading and property group Thakral also have projects lined up in Brisbane.

-By Mok Fei Fei

Sinarmas Land buys London building

Source: Business Times / Companies

SINARMAS Land yesterday said it would acquire a freehold prime commercial building in London for £57.28 million (S$119 million) through a sale and purchase agreement with GE Real Estate.

The building - 10 Great Pulteney Street (10 GPS) - is in the heart of Soho, and in a location that has traditionally attracted media companies including M&C Saatchi, Sony Pictures and 20th Century Fox, the company said in a press release.

The property is fully leased to Creston plc, a global communications group, on a "triple net lease" agreement. This means Creston is solely responsible for all the costs relating to the asset being leased, including real estate taxes on the leased asset, building insurance and common area maintenance, Sinarmas Land said.

The lessor would also receive a net rental from the lessee with a weighted average lease expiry of over five years.

Sinarmas Land buys Soho property for $125m

Source: Straits Times / Money

SINARMAS Land has bought a prime commercial building in London, not far from Piccadilly Circus, for £57.28 million (S$125 million).

The freehold property is at 10, Great Pulteney Street, Soho, the city's entertainment district.

It has "significant frontages to two of Soho's best known streets, Great Pulteney Street and Lexington Street", the mainboard-listed company said in a statement yesterday.

The property is fully leased to global communications group Creston.

Under the lease, the tenant is solely responsible for all property-related costs, including real estate taxes, building insurance and common area maintenance.

The building has 44,116 sq ft of Grade A office space and a self-contained, five-unit residential block of 2,928 sq ft over a basement, ground and five upper floors.

Despite a slowdown in the global economy, the group has a positive outlook on Britain and believes the London commercial property market will remain resilient, said Mr Muktar Widjaja, the executive director and chief executive officer of Sinarmas Land.

The company's first foray into the London property market was the acquisition of an office property in the city's West End last year.

-By Chai Yan Min

Muted bidding expected for Bishan, Sembawang sites

Consultants point to unsold private homes, upcoming ECs in Sembawang

Source: Business Times / Singapore

THE government yesterday released for sale two residential sites - one at Lorong Puntong off Sin Ming Avenue and another executive condo (EC) site at Sembawang Road-Canberra Link.

Both are in the confirmed list, under which sites are launched according to schedule, regardless of demand.

The Lorong Puntong site has a land area of 10,503 square metres and can yield a maximum gross floor area (GFA) of 22,056 sq m - about 280 homes.

Consultants are divided on how the plot will do in the tender. While SLP International executive director Nicholas Mak is expecting 12 to 18 bids, RST Research director Ong Kah Seng is forecasting a more conservative turnout of just five bids. Both put the winning range at about S$620-680 psf per plot ratio (ppr).

-By Lee Meixian

Two residential sites put up for tender

Thomson, Sembawang plots can yield about 900 homes in total

Source: Straits Times / Money

TWO development sites that will collectively yield about 900 homes were put up for sale in state tenders yesterday.

One is a small private residential plot near Thomson Plaza that consultants believe could be fairly attractive to developers.

The other is an executive condominium (EC) site in Sembawang, which is expected to draw a more lukewarm response.

Both plots are on 99-year leaseholds.

The 113,051 sq ft parcel in Thomson is at Lorong Puntong, close to the upcoming Bright Hill MRT station as well as Ai Tong School, which is under construction. It is expected to yield about 280 private homes.

Although consultants agreed that its location was more attractive than that of the Sembawang EC site, they differed widely on whether developers would bid aggressively for the plot.

"With limited upcoming supply of private residential-zoned land for sale in the Sin Ming, Bright Hill and Bishan area, the Lorong Puntong site can be considered an attractive site," said SLP International research head Nicholas Mak.

He said that since the land parcel was relatively small, some small and medium-sized developers would be keen on bidding for it given its lower total land cost.

Mr Mak said there could be as many as 12 to 18 bidders, with the top bid coming in at between $152 million and $162 million. This works out to $640 to $682 per sq ft (psf) per plot ratio (ppr).

However, R'ST Research director Ong Kah Seng predicts that there will be only around five bids, with the top bid coming in at $620 to $670 psf ppr.

Mr Ong noted that a nearby land parcel at Bright Hill Drive, which has since been turned into the Thomson Three condominium, fetched a top bid of $720 psf ppr when it was sold in 2012 before tough home loan curbs were rolled out last year under the total debt servicing ratio framework.

The top bid for the Lorong Puntong parcel would therefore likely be 10 per cent less, or around $650 psf ppr, he said, "unless there is a high-risk-taking developer banking on a possible lifting of cooling measures in, say, a year down the road".

Consultants agreed that the developers would likely be less keen on the Sembawang EC site, at the junction of Sembawang Road and Canberra Link.

Demand for ECs, which are a hybrid of public and private housing, has gone down ever since loan caps for the segment were imposed late last year.

They expect the 309,418 sq ft plot to draw three to seven bids, with a top bid of $300 to $331 psf ppr.

Another EC in the district, SkyPark Residences in Sembawang Crescent, was launched last year and only 306 out of the 506 units available had been sold by the end of last month.

The Sembawang EC site tender closes on Sept 30 and that for the Thomson plot closes on Oct 8.

 -By Melissa Tan

Government releases 2 residential sites for sale

The two sites - at Lorong Puntong and Sembawang Road/Canberra Link - are expected to yield 900 residential units.

Source: Channel News Asia / Singapore

SINGAPORE: Two new residential sites have been released for sale, and these are expected to yield about 900 residential units when developed, according to both the Urban Redevelopment Authority (URA) and the Housing and Development Board (HDB).

The residential site at Lorong Puntong and Executive Condominium (EC) site at Sembawang Road/Canberra Link were launched for sale on Monday (Aug 18) under the second half 2014 Government Land Sales Programme.

The closing dates for the tender for the Lorong Puntong site is Oct 8, while the tender for the site at Sembawang Road/Canberra Link is Sep 30.

- CNA/kk

Savills rebrands property management arm

Source: Business Times / Property

SAVILLS is rebranding its property management arm to Savills Property Management.

The unit was previously named SavillsCKH, following the merger of Savills's property and asset management services with those of Chan Kok Hong Strata Management in August 2011.

Chan Kok Hong, the managing director at Savills Property Management, said: "This is a logical step for our business, and enables us to take full advantage of the strong brand equity, know-how and systems and technology available within the Savills group.

"The original merger was very smooth and the entire team truly feels a part of the Savills global family."

-By Mindy Tan

HDB rents 'to stay depressed for rest of 2014'

Sluggish demand, rising supply will weigh on rates, analysts say

Source: Straits Times / Singapore

LEAN times are here to stay for Housing Board landlords, with rentals likely to stay depressed for the rest of the year.

Sluggish demand, arising from foreign labour curbs that have shrunk the pool of tenants, combined with a rising supply of HDB flats, will weigh on rental rates, said property analysts.

Already, Singapore Real Estate Exchange data shows the HDB rental index has fallen 2.3 per cent since the start of the year, hitting a three-year low last month. The median rent was $2,300.

This is only the beginning of a continued slowdown, said property analysts.

ERA Realty key executive officer Eugene Lim expects a further 5 per cent to 6 per cent drop by the year end. R'ST Research director Ong Kah Seng predicts a full-year fall of 5 per cent to 7 per cent, and SLP International Property Consultants research head Nicholas Mak, one of 4 per cent to 6 per cent.

For the longer term, OrangeTee research head Christine Li sees a decline of about 10 per cent by the end of next year.

Property agents said the problem is simply a lack of demand due to a shortage of tenants.

"Landlords are realistic as the market is not doing very well," said ERA Realty agent Noel Lu.

Many have been adjusting their rentals downwards, said agents.

The worst-affected areas are those without easy access to amenities such as public transport.

However, demand in mature estates and those near MRT lines is continuing to hold up, said ERA agent Zola Tan.

Tenants for units in such areas can be found within a month, as opposed to two to three months for less popular areas, he added.

For instance, PropNex Realty agent Michelle Lai, who focuses on Woodlands, noted that demand is "still quite strong". But although tenants can be found, rents have been falling, she said. An executive apartment used to go for $2,700 or $2,800 a month; now, the rate is $2,500.

The one bright spot is that falling rents have boosted activity in the market so far this year.

There have been more rental deals in general, with 8,485 in the January to March period and 8,455 in the March to June period.

This is up from an average of 7,580 a quarter last year and 6,780 a quarter in 2012.

Woodlands, Jurong West and Tampines have seen the most rental transactions in the past month, based on an STProperty "heat map" using HDB data.

One reason for the flurry of activity is that low rents have attracted more tenants, said R'ST Research's Mr Ong.

Landlords have had to offer low rents to compete for tenants, whose numbers have been affected by foreign labour curbs. The surfeit of flats for rent also means tenants can pick and choose.

"Nowadays, tenants can be fussy," said a 32-year-old safety officer who wanted to be known only as Mr Chandran. He has been trying to rent out his four-room flat near Ang Mo Kio MRT station, but has received just one call in the past fortnight.

With more suburban condominiums due to be completed next year, competition will only rise, said Mr Ong.

He noted: "(Current upgraders) have to quickly secure a tenant for their flat in case there are more flats put up for subletting."

Falling rents in the private market are also putting pressure on HDB rents. Last month, non-landed private residential rents hit a 38-month low. 

"Suburban condos both new and old are competing for tenants, with budgets of around $3,000," said ERA's Mr Lim.

-By Janice Heng

Lease Buyback: 'Better, but limited take-up expected'

Experts say extended scheme will likely appeal to only a small segment

Source: Straits Times / Top of The News 

WHILE letting owners of four-room Housing Board flats sell part of their lease back to the Government is a good move, it will probably appeal to only a small section of the population, said property experts and academics.

They do not expect a spike in applications in response to this extension of the Lease Buyback Scheme, which was previously for three-room and smaller flats. Rather, the scheme will continue to have a limited appeal, they said - to low-income households who are short of retirement funds on the one hand, and savvier owners on the other.

Under the scheme, flat owners sell part of their flats' lease back to the HDB. The proceeds from selling the lease are used to top up owners' Central Provident Fund (CPF) Retirement Accounts, for larger monthly payouts under the CPF Life scheme.

The required top-up level is the Minimum Sum for those aged 70 and younger, and slightly less for older flat owners. The owners will receive the funds in excess of this as cash.

Response has been lukewarm since the scheme's launch in 2009. As of last month, just under 800 households have benefited.

"There is likely to be a better take-up than the current state of things, but we do not expect a surge," said ERA Realty key executive officer Eugene Lim.

One obstacle to a wider take-up is the fear of outliving one's lease. Under the scheme, flat owners keep the next 30 years of their lease and sell the rest back to the HDB.

The HDB has said that "no elderly flat owner will be left homeless" and that "appropriate housing arrangements" will be provided for flat owners who cannot pay for a lease extension.

But it is unclear what this means and the big fear is that the flat owner will get chased out of his home, said experts.

Another obstacle is cultural. Many Singaporeans wish to keep their flats so they can leave them for their children.

"This bequest motive is a very strong motivation," said National University of Singapore Associate Professor Chia Ngee Choon.

It is thus the "more open-minded, more educated or investment-savvy" home owners who may be comfortable with this option, said R'ST Research director Ong Kah Seng.

But investment-minded owners have other reasons to be reluctant. Flats under the scheme cannot be wholly sublet or resold, thus limiting their options, noted OrangeTee head of research Christine Li.

"Subletting out the entire flat for rental income would probably derive greater returns compared to payouts by CPF Life," she added.

The median rent for a flat was $2,300 last month.

About one in 10 flat owners above 55 either sublets a room or the entire flat for income, said the HDB.

It added that the scheme is aimed at low-income owners with limited monetisation options, which is why it was not previously open to larger flats.

Civil servant Lim Swee Leong, 59, owns a four-room flat and could qualify for the scheme when he retires. But he, too, sees it as being chiefly for the lower income.

"For me, it's quite different because I don't need the money," said Mr Lim.

There is the off chance that the scheme will generate a lot of demand, which would mean that the Government has to buy back many leases, which will cost it a tidy sum.

But NUS Associate Professor Albert Tsui noted that the Government is buying an asset which it can resell or use as rental housing.

"You can see it as just a transaction. It should not be a big problem," said Prof Tsui.

-By Janice Heng

Experts optimistic about take-up rate of buyback scheme

The take-up rate for the Enhanced Lease Buyback Scheme has been low so far, but analysts said this could change.

Source: Channel News Asia / Singapore

SINGAPORE: Property analysts have welcomed the extension of the Enhanced Lease Buyback Scheme to four-room flats, noting that the option to unlock value from their dearest asset would now be available to close to 60 per cent of the population.

The take-up rate for the scheme has been low so far, but analysts said this could change.

Mr Colin Tan, director of research and consultancy at Suntec Real Estate Consultants, said the move would allow more to spend their golden years in a place they are settled in.

“If they downsize (to a smaller flat), that means they have to re-adjust to a new place,” he added.

Mr Chris Koh, director of Chris International, said: “We are now reaching out to a larger group, which will definitely increase the take-up rate.”

He also felt there was no need to extend the scheme to owners of five-room or bigger flats. “They can always downgrade. They also have more rooms to lease out for additional income,” he said.


Big foreign worker dorms faring poorly

Construction firms choosing cheaper option of housing workers on site

Source: Straits Times / Singapore

DORMITORIES are seeing a sharp drop in business as companies move their foreign workers out of big purpose-built dorms in favour of cheaper options on or near their work sites.

Dorm bosses say that there are at least 5,000 empty beds, and business has been getting poorer.

This is a sudden turn in the state of affairs from just a year ago, when dorm bosses had long waiting lists of employers wishing to house workers in big purpose- built dorms with facilities such as foodcourts and basketball courts.

Now, dorm bosses are blaming firms for the empty beds, saying they are moving workers to construction sites and factory-converted dorms which are dirtier.

Construction bosses, in turn, are blaming dorm operators for setting fees at too high a price.

To date, there are about 40 dorms offering 200,000 beds for foreign workers. Another nine will be built in the next two years, adding 100,000 more beds.

But even before those have been added, Dormitory Association of Singapore president Kelvin Teo said that business has already dropped sharply.

"Business is definitely not as good before. There is some worry from operators about how their business will fare, now that many new dorms are coming up," said Mr Teo.

Part of the reason for this exodus is that more construction firms have been given permission by the authorities to set up quarters on the sites of major building projects. These include sites for new Housing Board flats and MRT stations and lines.

Tiong Seng Contractors director Derick Pay said firms like his are grateful that they are being allowed to house workers on site. It reduces traffic congestion around the area, seeing as workers do not need to be bused in. It also increases efficiency and cuts costs.

"We can reduce two to three hours of travelling time since workers live and work at the construction site," Mr Pay said.

Tiong Seng has about 100 workers living on a site for an upcoming HDB development in Woodlands, and more will be moving in soon.

The Manpower Ministry and National Development Ministry said in a joint reply that "proximity to workplace, convenience and costs" are considered by employers when deciding on housing for workers.

"Employers can house them in a variety of accommodation, such as purpose-built dorms, converted industrial premises and quarters on construction sites", they said in a statement, as long as these meet rules that "ensure the safety and well-being of the occupants".

The Land Transport Authority said there is currently only one dorm located on an MRT project site - that of the upcoming Gul Circle station and viaducts for the Tuas West MRT extension.

Another issue is cost, said Singapore Contractors Association president Ho Nyok Yong.

"The prices for such big dorms keep going up. Some are even charging around $320 a month. That is too expensive," he said.

But some dorm bosses shot back, saying that employers are not interested even when prices are slashed.

Mr Ken Lim, chairman of Singapore's biggest dorm operator Vobis, said response was poor even when he reduced prices to $250 a month from $320 as part of a National Day promotion. In recent months, he has also been advertising in newspapers. The company has at least 3,000 empty beds, across the seven dorms it runs.

"I am not sure what else I can do to attract employers," he said.

Ms Debbie Fordyce, executive committee member of workers' rights group Transient Workers Count Too, said she is sceptical that the majority of bosses will choose to house their workers in pricier purpose-built dorms if they can opt for poorer but cheaper accommodation.

"It's all about cutting cost for employers. Workers will not complain about living in poor housing too, as long as they are paid. The men just want to earn money and go home," she said.

-By Amelia Tan

Construction-site quarters home to 500 foreign workers

Source: Straits Times / Singapore

ON THE corner of Punggol Road is a hut shared by three Indian national construction workers. Made of odd-sized zinc sheets, it appears to have been hastily constructed.

Rust and mould creep on the wall. Beside the tiny kitchen where the men cook curries and rice on an electric stove, is the sleeping area with three mattresses lined back-to-back on the floor. The men shower outside, amid piles of steel rods, using tank water meant for cleaning construction equipment.

It is better than showering in the crowded toilets in the quarters beside their hut, says a worker.

The quarters, located in a Housing Board build-to-order project, is home to around 500 Indian, Chinese and Bangladeshi workers.

Boots, caked with mud and sand, fill the corridors outside. But the rooms are kept neat - toiletries are lined up in rows underneath the beds, and blankets are kept folded.

The men sleep on double-decker beds, eight to a room. But there is a stale odour from the wet clothes that are around their beds.

The men say conditions in their rooms are fine but toilet and shower facilities are unbearable. There are broken urinals and choked toilet bowls, in which waste and snack wrappers float in brackish water. The walls are covered with brown mildew.

One Chinese national worker said it has been at least eight months since the water tub, from where the men scoop water to wash, in the middle of the bathroom has been cleaned.

He says that at around 1am every day, waste from the dorm is flushed into drains outside. "It is so smelly and dirty," he said.

The workers told The Straits Times last week that they did not expect to be living in such conditions in Singapore. But they do not know what else they can do, other then bear with it.

"Things are just as bad here as they are at home. I thought Singapore was better," said one Bangladeshi worker.

An Indian national worker, who has worked on the project site for six months, added: "What the company gives me, I take. Happy or not, I must work or the boss will send me home."

-By Amelia Tan & Aw Cheng Wei

Brazilian Ambassador calls on EcoHouse to prove links to his govt

Source: Today Online / Business

SINGAPORE — The Brazilian Ambassador to Singapore yesterday called on EcoHouse to put its money where its mouth is and prove its links to the Brazilian government, as it refuted the developer’s claim that a misunderstanding led to the government disavowing any connection to the firm.

Speaking to TODAY over the phone, Mr Luis Fernando de Andrade Serra said: “We believe it is high time for EcoHouse to prove that it has official links with the CEF (Brazilian state-owned bank Caixa Economica Federal). It said there was a misunderstanding, but it has to prove the basis of this misunderstanding. If it can’t prove there is a link, nothing can be said to be a misunderstanding.”

The United Kingdom-based developer, which has shuttered its Suntec Tower 2 offices, is facing legal action from some investors trying to recover their capital investments.

Last week, the Brazilian Embassy said the Brazilian government had no dealings with EcoHouse, which had touted itself as the only UK company picked officially by the Brazilian government to build developments under Minha Casa, Minha Vida (MCMV), a national housing programme.

The embassy had added that it was not even aware that the company operated in Brazil until recently, when complaints from Singapore investors mounted.

In response to the embassy’s statement, EcoHouse chief operations officer Deen Bissessar said last Friday that it was “clearly a result of misunderstanding and/or miscommunication with the embassy and their resulting search, as we are most certainly in compliance for our operations”.

He told TODAY: “We operate within what can be viewed as the public-private sector of the MCMV programme, which is where we do not utilise government funds to construct, but end buyers are financed by the programme to purchase our properties. Perhaps this is where the error has been made.”

Mr Bissessar also said he could provide documentation from the firm’s Brazilian division to back up what he was saying. TODAY’s subsequent email queries to him went unanswered.

Mr Serra reiterated that the Brazilian government had found “there is no link whatsoever” with EcoHouse. “We feel sorry for these investors,” he said.

Various media reports have put the number of Singapore investors in EcoHouse projects at between 800 and 1,500. Up to S$70 million had reportedly been ploughed into three housing projects. Reports have been filed against EcoHouse with the police and the Commercial Affairs Department, which investigates white-collar crimes.

-By Tan Weizhen

Global Economy & Global Real Estate

Home prices in July fall in majority of Chinese cities

Tight mortgage lending deters buyers even as local govts ease curbs

Source: Business Times / Property

[SHANGHAI] China's new-home prices fell in July in almost all cities that the government tracks as tight mortgage lending deterred buyers even as local governments eased property curbs.

Prices fell in 64 of the 70 cities last month from June, the National Bureau of Statistics said yesterday, the most since January 2011 when the government changed the way it compiles the data.

Beijing prices fell one per cent from June, posting the first monthly decline since April 2012.

"The falling trend of China's property market has no sign of improving," Shen Jian-guang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd, said in an interview yesterday. "The key issue is the mortgages, despite all types of local government easings. The high rate is damping sentiment of owner occupiers."

-From Shanghai, China

China Home Prices Fall in Most Cities on Weak demand

Source: Bloomberg / Luxury

China’s new-home prices fell in July in almost all cities that the government tracks as tight mortgage lending deterred buyers even as local governments eased property curbs.

Prices fell in 64 of the 70 cities last month from June, the National Bureau of Statistics said today, the most since January 2011 when the government changed the way it compiles the data. Beijing prices fell 1 percent from June, posting the first monthly decline since April 2012.

“The falling trend of China’s property market has no sign of improving,” Shen Jian-guang, Hong Kong-based chief Asia economist at Mizuho Securities Asia Ltd., said in a phone interview today. “The key issue is the mortgages, despite all types of local government easings. The high rate is damping sentiment of owner occupiers.”

China’s property market has become a drag on the world’s second-biggest economy, prompting cities to start easing local curbs in June. Thirty-six cities had loosened measures as of the end of last week, according to Centaline Property Agency Ltd., while developers have cut prices since March to lure buyers. The International Monetary Fund has urged China to target slower expansion in 2015, saying the economy faces a “web of vulnerabilities” from rising debt and financial institutions’ exposure to real estate.

First-home buyers no longer received mortgage-rate discounts this year. In Beijing and Shanghai, first-home mortgage rates were the same as the benchmark rate in July, while in Guangzhou they were 5 percent to 10 percent higher than the benchmark rate, according to Centaline.

Maintaining Growth

Today’s housing data adds to the latest signs that the economy is weakening, making it tougher for Premier Li Keqiang to sustain the fastest growth in the Group of 20 nations. Foreign direct investment fell 17 percent in July from last year, according to separate data from Ministry of Commerce today. The broadest measure of new credit plunged to the lowest since the global financial crisis and industrial output unexpectedly slowed, the statistics bureau reported last week.

Prices in Shanghai decreased 1.2 percent and dropped 1.3 percent in Guangzhou, both the biggest slide since the data began. The eastern city of Hangzhou and the southern tropical city of Sanya had the largest declines in July, each dropping 2.4 percent.

Private data also has been signaling that the housing market is slowing. Prices fell for the third straight month in July, according to SouFun Holdings Ltd., the nation’s biggest real estate website.

Worse Times

Worse times for China’s real estate sector are still ahead, wrote Standard Chartered Plc economists led by Lan Shen in an Aug. 6 report, after surveying managers of 30 Chinese developers in six cities. Developers are offering “moderate discounts,” while buyers are still very cautious regardless of how much developers cut prices, Standard Chartered found.

The southeastern city of Xiamen and the southwestern city of Dali were the only two places where prices gained in July from June, adding 0.2 percent and 0.1 percent respectively.

“It is almost impossible for home prices to rise in the second half,” Tan Huajie, board secretary of China Vanke Co., the nation’s biggest developer, said in Hong Kong today, citing high inventory. “Home sales should improve a bit, while prices will stabilize in the next half.”

‘Steep Correction’

New-home price gains also slowed from a year earlier. They rose 5.2 percent in Guangzhou, increased 5.1 percent in Shenzhen and jumped 4 percent in Beijing, all the slowest pace since January last year. Prices advanced 4.1 percent in Shanghai, the least since February 2013.

“It’s still uncertain where the housing market will go in the next two months,” Jinsong Du, a Hong Kong-based property analyst at Credit Suisse Group AG, told Bloomberg Television today. “But at least the downward trend on housing transactions may not continue because of seasonality as well as because of the supporting measures.”

The Shanghai Stock Exchange Property Index, which tracks 24 developers listed on the city’s exchange, rose 0.3 percent at the close of trading, while the benchmark added 0.6 percent.

Both the official and private data point “to a steep correction in residential real estate prices whose depth begins to match that in the Lehman crisis,” Dariusz Kowalczyk, senior economist at Credit Agricole SA in Hong Kong, said in an e-mailed note. “We expect new measures to stimulate the economy in a targeted way to be announced in the near term.”

Existing-home prices declined 0.8 percent in Beijing in July from a month earlier and dropped 0.9 percent in Shanghai, according to the data.

Home sales fell 28 percent in July, the biggest monthly drop this year, the government reported earlier this month.

-By Bloomberg News

Chain stores using mapping software to pick locations

Source: Business Times / Property

[WASHINGTON] At the Wendy's corporate headquarters in Dublin, Ohio, real estate director John Crouse is swimming in data about the company's almost 6,000 fast food restaurants nationwide.

Mr Crouse and one other colleague are responsible for building and analysing maps of Wendy's locations and the surrounding areas. They rely on a geography-based data program to quickly comb through large volumes of information - decades of sales records, demographic descriptions of nearby residents, and other data points - to predict how much a restaurant might take in annually at sites in the United States.

Once Mr Crouse researches a potential site, he submits it to an internal committee; if the location is approved, engineering and construction can proceed.

Wendy's is one of the latest companies to make use of software from an American company called Esri. Esri specialises in mapping various kinds of data - much of it culled from publicly available data sets - to help people visualise relationships, patterns and trends.

-From Washington, US

London leads sharp August drop in UK home prices

Source: Business Times / Property

[LONDON] Asking prices for houses in Britain have fallen at the sharpest pace on record for the month of August, led by a drop in London, as the market gets ready for higher interest rates, a survey showed yesterday.

Prices of property coming onto the market fell by 2.9 per cent from July, leading to a slowing in the annual rate of price growth to 5.3 per cent in August from 6.5 per cent a month earlier, property website Rightmove said.

Asking prices in London fell for a third month, dropping nearly 6 per cent between July and August, much more than the typical fall in what is usually the quietest month of the summer for the housing market.

The decline adds to other signs of a slowing in Britain's fast-recovering real estate market. "A drop in August is typical but it's steeper than expected this year," Rightmove director Miles Shipside said.

-From London, UK

London Home Asking Prices Plunge Most in More Than Six Years

Source: Bloomberg / Personal Finance

London home sellers cut asking prices by the most in more than six years this month, adding to signs that the property market in the U.K. capital is coming off the boil.

London values fell 5.9 percent from the previous month to an average 552,783 pounds ($922,300), the biggest drop since December 2007, property website Rightmove Plc said today. Nationally, prices declined 2.9 percent, a record for an August.

While property demand usually weakens during the summer, Rightmove said the slump this year was steeper than it expected. Tougher new mortgage rules introduced by Bank of England Governor Mark Carney, as well as anticipation of higher interest rates, are putting pressure on the market after a surge in values raised concerns that a bubble may develop.

“Buyers and sellers are becoming increasingly aware about personal finances, given that the cost of mortgages are going up and regulators are trying to bring availability down,” said Miles Shipside, a director at Rightmove. “This limits what buyers are willing or able to pay, and helps moderate sellers’ price expectations.”

Some of the biggest price declines in London were recorded in affluent boroughs including Kensington and Chelsea, Camden, Hammersmith and Fulham, according to the report.

Kensington Drop

Among the “million-pound plus” districts, Kensington saw asking prices drop 7 percent on the month to an average 2.2 million pounds, while Camden fell 7.2 percent. From a year earlier, values in Kensington were down 1.4 percent, the only borough recording an annual decline. The average London price is up 10.3 percent in that period.

“Top-end sellers are very much discretionary ones, so can delay marketing till a more active time of year,” Shipside said. “That tends to depress property prices more in the higher-priced boroughs, with those that need to sell in summer pricing lower to attract holiday-distracted buyers.”

Bruce Dear, head of real estate at law firm Eversheds, said the main problem in London remains a shortage of housing supply, which has pushed property prices to more than 16 times the average salary.

“Urgent policy measures are required to reduce that gap,” he said in a statement. “The only answer is for the government and local authorities to urgently build more.”

Nationally (UKRMNAPM), the annual pace of growth in prices slowed to 5.3 percent in August from 6.5 percent in July. The average asking price was 262,401 pounds. Rightmove said the drop in monthly prices is a “lead indicator of a slower market in the second half.”

Out of the 10 regions tracked by Rightmove, all but the north of England showed a decline in home values in August from July. London led the drop, followed by East Anglia with a 4 percent drop and the south east with a 2.5 percent fall.

-By Jillian Ward

GreenOak seeks at least US$500m for 2nd Asia fund

It plans to invest in Japan, Korea, India and possibly HK and S'pore, adds source

Source: Business Times / Property

[SEATTLE] GreenOak Real Estate LP, started in 2010 by the former heads of Morgan Stanley's property-investment unit, plans to seek at least US$500 million for its second Asia fund, said a person with knowledge of the fund-raising.

The company, which also runs funds for the US and Europe, plans to invest in Japan, Korea, India and possibly Hong Kong and Singapore, said the person, who asked not to be identified because the fund-raising is private.

New York-based GreenOak previously raised US$260 million for a Japan-only fund, with investments including Tokyo office buildings and resorts in Okinawa, according to the company's website.

Demand for Asian property is increasing, Preqin Ltd said in a March report. A total of US$10.4 billion was raised by Asia-focused private real estate funds in 2013, the most in five years, according to the London-based research company. Blackstone Group LP, the largest investor in the industry, is raising a US$5 billion fund for Asia property and has gathered about US$4.4 billion so far.

-From Seattle, US

GreenOak Real Estate 'seeks $622m for second Asia fund'

Source: Straits Times / Money

SEATTLE/TOKYO - GreenOak Real Estate, started in 2010 by the former heads of Morgan Stanley's property investment unit, plans to seek at least US$500 million (S$622 million) for its second Asia fund, said a person with knowledge of the fund-raising.

The company, which also runs funds for the United States and Europe, plans to invest in Japan, Korea, India and possibly Hong Kong and Singapore, said the person, who asked not to be identified because the fund-raising is private.

New York-based GreenOak previously raised US$260 million for a Japan-only fund, with investments including Tokyo office buildings and resorts in Okinawa, according to the company's website.

Demand for Asian property is increasing, Preqin said in a March report. A total of US$10.4 billion was raised by Asia-focused private real estate funds last year, the most in five years, according to the London-based research company.

Blackstone Group, the largest investor in the industry, is raising a US$5 billion fund for Asia property and has gathered about US$4.4 billion so far.

"The potential for diversification and strong returns make Asian real estate attractive to many institutional investors," Preqin said in the report.

Mr Chris Niehaus, a partner at GreenOak, declined to comment on the new fund. The company has about US$3.6 billion of assets under management, according to its website.

In the US, GreenOak has focused on buying office, retail and hotel assets in large coastal cities including New York and Miami that it can lease up or improve, then sell at a profit.

It is close to completing its second US fund-raising and has gathered about US$850 million so far, including co-investments by clients in deals, said the person with knowledge of the company. GreenOak had sought to raise US$500 million for that fund.

The company has made several investments with the new US fund already. It bought a 49 per cent stake in the Terminal Warehouse in the Chelsea neighbourhood in Manhattan, investing more than US$100 million of equity, and signed the car-service Uber as a large tenant.

It also acquired the Figueroa Hotel in Los Angeles, which it plans to renovate, and Ten Post Office Square in Boston's financial district, for which it paid more than US$140 million. Investors in GreenOak's new US fund include General Motors' pension plan, Franklin Templeton Investments and an Asian sovereign wealth fund, said the person with knowledge of the fund-raising.

GreenOak was founded by Mr Sonny Kalsi, Mr Fred Schmidt and Mr John Carrafiell. At Morgan Stanley, they ran what was Wall Street's biggest real estate investing group until the market crashed. GreenOak finished raising about US$350 million for its debut US fund in 2012.


Brunei Sultan bids for jailed tycoon's NY, London hotels: WSJ

Source: Business Times / Property

[NEW YORK] The Sultan of Brunei has made a bid for New York's Plaza Hotel, Dream Hotel and London's Grosvenor House hotel, the Wall Street Journal's website edition reported on Saturday, citing people familiar with the situation.

An investment firm affiliated with Brunei has offered to pay US$2 billion for the three hotels, which are owned by India's Sahara conglomerate, said.

Sahara's chairman, Subrata Roy, has been negotiating a sale of the company's luxury hotels from a makeshift office in prison, having been held for more than five months after failing to appear at a contempt hearing in a long-running dispute over his group's failure to repay billions of dollars to investors who were sold outlawed bonds.

Brunei officials have reportedly been in discussions throughout the summer with representatives of Sahara, said, citing its sources, adding that an agreement could be reached as early as next month.

-From New York, US

Homebuilder Confidence in U.S. Increases to Seven-Month High

Source: Bloomberg / Luxury

Confidence among U.S. homebuilders rose in August to the highest level in seven months, showing the industry is making more headway after weakness earlier this year.

The National Association of Home Builders/Wells Fargo sentiment measure climbed to 55 from 53 in July, the Washington-based group reported today. Readings above 50 mean more respondents said conditions were good. The median forecast in a Bloomberg survey of economists projected it would hold at 53.

Historically low mortgage rates and increased employment are bringing home purchases within reach of more Americans. Faster wage gains would help provide an additional push for the industry, which is struggling to lure first-time buyers beset by tougher credit conditions.

“As the employment picture brightens, builders are seeing a noticeable increase in the number of serious buyers entering the market,” NAHB Chairman Kevin Kelly, a homebuilder from Wilmington, Delaware, said in a statement. “However, builders still face a number of challenges, including tight credit conditions for borrowers and shortages of finished lots and labor.”

Estimates of 44 economists in the Bloomberg survey for the homebuilder sentiment index ranged from 49 to 55.

The measure of the six-month sales outlook advanced to a one-year high of 65 this month from 63 in July.

An index of current single-family home sales increased to 58, the highest since January, from 56, while the group’s gauge of prospective buyer traffic rose to 42, the strongest reading this year, from 39.

Midwest Sentiment

Builder confidence increased in two U.S. regions, led by a 13-point jump in the Midwest to 65, the highest since records began in 2004. Sentiment also improved in the Northeast. It declined in the South and West.

“While the housing data remain mixed, the economic and demographic fundamentals remain strong and they will eventually prevail,” Scott Stowell, president and chief executive officer at Standard Pacific Corp., an Irvine, California-based homebuilder, said on an Aug. 1 earnings call. “The housing recovery is slow, uneven, but it is real. We’re still maintaining our cautious to positive outlook.”

More hiring and cheap borrowing costs are helping some Americans take the plunge. The economy added more than 200,000 jobs for a sixth straight month in July, the longest such stretch since 1997, according to Labor Department figures. The improving conditions drew more job seekers into the labor force, pushing up the unemployment rate fell to 6.2 percent from 6.1 percent.

Mortgage Rates

Borrowing costs have declined this year. The average 30-year, fixed-rate mortgage was 4.12 percent in the week ended Aug. 14, down from 4.53 percent at the start of January, according to data from Freddie Mac in McLean, Virginia.

An increase in homes for sale and slower price gains are also among positive developments for the industry. There were 2.3 million previously owned homes for sale in June, the most since August 2012, according to the National Association of Realtors. The S&P/Case-Shiller index of property values in 20 cities rose 9.3 percent in May from the same time last year, the smallest advance since February 2013.

“Price appreciation is beginning to slow,” Margaret Kelly, chief executive officer of Re/Max Holdings Inc., a Denver-based franchiser of real estate brokerages, said on an Aug. 13 earnings call. “So moderate price appreciation and increased affordability are positive signs for both buyers and sellers in this market.” Still, she said, “tight lending standards.”

Consumer Confidence

“We believe this is a multiyear recovery that needs continued support from steady jobs growth, increased wages, stronger consumer confidence in a gradually recovering economy,” Kelly said.

Today’s homebuilder sentiment report is the first in a series of housing data in the coming days. A report tomorrow is projected to show builders broke ground on 968,000 homes at an annualized rate in July after June’s 893,000 pace, according to the median forecast in a Bloomberg survey before figures from the Commerce Department. Data on July existing-home sales are also due this week.

-By Vince Golle

Blackstone Suffers Court Setback in Irish Real Estate Skirmish

Source: Bloomberg / News

At 11:15 a.m. on July 29, Irish property developer Michael O’Flynn realized that Blackstone Group LP (BX) was trying to gain control of his real estate empire, which includes the country’s tallest residential tower.

Ten weeks earlier, the private equity firm had bought 1.8 billion euros ($2.4 billion) of loans to O’Flynn’s companies and the developer personally. Coming out of a meeting, he learned Blackstone was demanding the immediate repayment of 16 million euros of personal loans secured on his shareholdings -- even though he wasn’t in default. By the end of the day he had lost control of the business he’d spent more than 30 years building.

“I was shocked that they’d made this demand,” O’Flynn, 57, said in an interview. “It took time to understand the gravity of it because I’ve never been served with a demand in my 36 years of business. I was very recently transferred to Blackstone and I was doing my damnedest to work with them.”

O’Flynn was out, but not for long. Last week, an Irish judge restored him to the top of his company, saying Blackstone hadn’t acted in the “utmost good faith” or given the developer enough time to repay the money.

The judgment is a setback for Blackstone, manager of the largest fund dedicated to buying real estate in Europe, as it tries to buy up distressed real estate assets in Ireland with the economy starting to rebound from its property crash of 2008.

Judge Mary Irvine ruled Aug. 13 that Blackstone failed to disclose relevant information when it sought to have officials appointed by a court to oversee O’Flynn’s companies in July. That “breached the obligation of utmost good faith,” she said.

‘Appropriate’ Actions

After the court defeat, Carbon Finance, the Blackstone-owned company that bought O’Flynn’s loans for more than 1 billion euros, said in a statement its actions were “appropriate and necessary.” The company declined to comment beyond the statement while officials at Blackstone in London declined to comment.

The ruling may only be a temporary reprieve for O’Flynn until a full hearing over Blackstone’s efforts to gain control of the company in October. Irvine said while Blackstone may have the “better side of the argument” in its view that it was enforcing an accord O’Flynn had entered with “open eyes,” the company’s approach had raised enough questions to warrant a full airing of the case.

The case is part of the legacy of Ireland’s economic collapse, which stemmed from a real estate bubble that burst in 2008. Property developers had borrowed billions of euros from the nation’s banks as they sought to cash in on the boom. After the collapse, home prices halved, the government took over the domestic banking system, and the state needed a three-year international bailout in 2010.

Elysian, Cork

O’Flynn’s story begins in Cork, a city of about 120,000 people in the south of Ireland. From there, O’Flynn forged his real estate business, culminating in the construction of the Elysian in Cork at the height of the nation’s property bubble.

Close to the River Lee, the 17-story tower contained 211 apartments, selling for as much as much as 1.8 million euros each. Trouble was, construction finished just as Ireland’s property market crashed, in 2008.

Two years later, O’Flynn’s loans were transferred to the country’s bad bank, the National Asset Management Agency, set up to purge the financial system of commercial real estate loans.

Enter Blackstone. In May, it agreed to buy the O’Flynn loans through Carbon Finance.

Burlington Hotel

Spearheaded by Blackstone, overseas investors have poured into Ireland since the crash, picking up real estate and loans to developers at a fraction of their face value. Blackstone owns the Burlington Hotel, a landmark, 501-bedroom hotel in the south of Dublin, and this year bought three office buildings in the capital from NAMA. Prime Dublin office rents rose 15 percent in the second quarter from the previous three months, according to CBRE Group Inc., a real estate services adviser.

Last month, Blackstone delivered a letter to O’Flynn’s home in the Cork village of Ovens, alerting him to the demand for payment of personal loans, according to Irvine’s ruling.

In court filings on July 29, Blackstone said that it wanted to seize shares in O’Flynn’s parent company he had pledged as security for personal loans if he wasn’t in a position to meet their demands. The loans were payable on demand, Blackstone said in the filings. As O’Flynn was unable to repay the loans forthwith, Blackstone was able to topple him, and by 1:05 p.m. that day, court-appointed officials had removed O’Flynn as a director of the wider group.

August Hearing

O’Flynn would still be out of a job if not for Irvine’s ruling. The judge returned to Dublin’s court complex, which was otherwise deserted during the August summer break, to deliver her decision.

The press and public galleries, including Bill Cullen, who hosted “The Apprentice” television show in Ireland as the nation’s version of Donald Trump, were full. In 2008, contestants on the show were invited to create a 45-second commercial for the Elysian, with the winner chosen by O’Flynn.

O’Flynn visibly relaxed during Irvine’s hour-long reading of the judgment as it became clear that he had defeated Blackstone.

Irvine concluded that Blackstone’s demand for instant repayment was designed to gain control of the entire company, because the loans were linked.

“When it issued the demand letters, it was not setting out to recover the money,” she said. “The last thing it wanted was payment because that would have scuttled its plans.”

Year-end Payment

In its statement, Blackstone signaled it’s not giving up. At the end of the year, 235 million euros are scheduled to be repaid to Carbon Finance, which maintained his companies are insolvent.

The company “will continue to safeguard its position as a significant creditor of the O’Flynn Group and to do everything to protect the assets of the group and its creditors,” Carbon Finance said in its statement.

O’Flynn, for his part, simply says he’s ready to move on.

“We’re all big boys and we just want to move on with doing what we do best,” O’Flynn said. “That’s making a return.”

-By Donal Griffin and Dara Doyle