Real News‎ > ‎2014‎ > ‎December 2014‎ > ‎

16th December 2014

Singapore Real Estate

Developer sales in 2014 likely to be about half of last year's

But latest monthly URA data shows brisk sales of executive condominiums

Source: Business Times / Real Estate

WITH developers' sales of private condominiums falling 48 per cent in November from a month ago to 412 units and December being typically a slow month, it is almost a foregone conclusion among property consultants that new private condo sales for the full year will be about half the level of last year.

The latest monthly data from the Urban Redevelopment Authority on developers' sales reflected mixed fortunes in the private residential market - weak sales of private condominiums on the one hand and brisk sales of executive condominiums (ECs) on the other.

With three EC projects launched last month following nearly a year of hiatus, buying interest swiftly shifted to the more affordable ECs - a hybrid form of private-public housing sold with restrictions imposed by the Housing & Development Board. This turned Lake Life, Bellewaters and Bellewoods into top-selling projects in the month.

Including the 855 EC units sold in November, up from 90 units in October, total developer sales tallied up to 1,267 units in November - a 45 per cent jump from October.

JLL national research and consultancy director Ong Teck Hui said: "November was a tale of two fortunes - a waning private residential market in contrast with a brisk EC market. The fate of the private home market for 2014 is sealed as December is likely to be another slow month as well."

In the first 11 months, a total of 7,137 new private condos and 1,410 new ECs were sold by developers. Property consultants are projecting full-year sales of private condos (excluding ECs) by developers to be around 7,500-7,700 units, down from 14,948 new private condos sold last year. Another 3,588 new EC units were sold in 2013.

The EC segment presented a bright spot in November, thanks to the three newly launched EC projects that sold a total of 782 units out of 1,758 units launched. Mr Ong noted that this is the highest monthly sales and units launched since the resumption of EC launches in 2010.

Being the first EC to be launched in Jurong after many years, the 546-unit Lake Life was a near sell-out, moving 533 units at a median price of S$869 per square foot (psf); Bellewaters in Sengkang had 170 units sold at a median price tag of S$813 psf; and Bellewoods in Woodlands moved 79 units at a median S$800 psf.

In contrast, the two private condos launched in November - Sophia Hills and TRE Residences - fared poorer. Sophia Hills in Dhoby Ghaut sold only nine out of its 493 units at a median price of S$2,292 psf. TRE Residences in Aljunied sold 52 out of its 250 units at a median price tag of S$1,588 psf.

Colliers International director of research and advisory Chia Siew Chuin said that the diversion of buying interest to ECs is "an indication of buyers' price sensitivity amid tightened credit environment".

Desmond Sim, CBRE research head for South-east Asia, noted that the success of Lake Life could be attributed to latent demand in Jurong West, which has not seen a new EC project since the launch of The Floravale in 1999. Other consultants pointed to Jurong's attraction as a rejuvenated town.

There had been no new EC project launches for nearly a year due to a government rule last year to cool prices of EC land parcels. Developers that acquire EC sites after Jan 11, 2013, can begin sales only after 15 months from the date of award of the sites or after the physical completion of foundation works, whichever is earlier.

With nine more EC launches having a total of 5,000 units in the pipeline next year, SLP International executive director Nicholas Mak projected that their take-up rates may be slow in the "absence of meaningful price cuts", with the resale levy for second-time buyers for these projects likely to curtail demand.

R'ST Research director Ong Kah Seng pointed out that these upcoming ECs are located in places that already have earlier EC projects that "soaked up substantial demand". Hence, the new EC launches in 2015 are unlikely to experience a similar take-up rate as Lake Life.

Skypark Residences in Sembawang and Waterwoods in Punggol - both launched late last year - still have 170 and 68 unsold units respectively, after moving another 14 and 21 units last month.

OrangeTee research and consultancy manager Wong Xian Yang noted that while developers are resistant to aggressive price-cutting, they may offer attractive incentives to move sales at projects that are close to incurring penalties for unsold units under their qualifying certificates, which require them to finish selling all units within two years from the project's completion.

"As such, buyers should keep a close eye for good bargains at project relaunches, which would not be otherwise possible in a normal market," Mr Wong said.

-By Lynette Khoo

Private housing market downward trend expected to continue: Observers

Property watchers say rent will also be weighed down by the looming supply, but believe that buyers will still enter the market.

Source: Channel News Asia / Singapore

SINGAPORE: The Total Debt Servicing Ratio was introduced in late Jun 2013, but it was in the fourth quarter of the year that private home prices registered the first drop in almost two years.

Since then, it has been on a downward trend and property watchers expect prices to continue falling in 2015 amid weakening demand and a large oncoming supply.

Including executive condominiums, official estimates put the number of completed units in 2014 at 20,852 units. The figure is expected to go up to 23,769 units in 2015 and 29,165 in 2016. In comparison, only 14,403 units were completed in 2013.

Observers say rent will also be weighed down by the looming supply, but add that buyers will still enter the market.

Said Director for Research and Advisory at Colliers International Chia Siew Chuin: "As long as we continue to see moderate but steady economic growth, I think home buyers will still look out for opportunistic buys where the property attributes and location attributes are attractive."


“If you look at any form of a barometer to measure, from the mind of the authorities, they are saying that yes, we understand volume has dropped 30, 40, 50 per cent on different segments but prices have not dipped even close to 10 per cent,” said CEO of PropNex Realty Mohamed Ismail.

“The private residential market for the first nine months (in 2014) - prices have only gone down by 3 per cent. And for last year, it's about 1.1 per cent. In the whole of two years, private property prices have not dipped even 5 per cent. So that's why the resistance from authorities is this - 'it is not time yet'.

"But we may wait another six months and we may still be at the same rate of 5 to 6 per cent. Why? Because generally, existing owners are not prepared to lower prices and are holding on to their properties, for a valid reason because interest rates are low. So there is a ground that people are holding, and as long as people are holding, prices are not going to drop."

Others say it is more than just price movements the authorities are watching. Factors such as steady economic growth and high employment rate support home sales and are still prevailing today. Low interest rates may also encourage potential home buyers to seal that purchase.

"With all these factors still prevailing, it would then mean that if the government were to remove the measures at this point in time, it would be too premature,” said Ms Chia. “Whatever efforts that have been put in place earlier to contain or to curb buyers from over-extending themselves, that would have been in vain."


Some analysts expect the US to raise interest rates in the third quarter of 2015 and that Singapore will follow with an increase in rates as well.

"I think we only see a 100 basis point hike per year, which is much lower than the 200 basis point hike per year 10 years ago when the US last hiked their interest rates,” said an economist at Standard Chartered Bank Jeff Ng. “In terms of the translation to Singapore, it does mean that the interest rates increase in Singapore will be of a very modest and gradual pace."

Also coming on stream in 2015: The first batch of executive condominiums (ECs) that will be affected by the resale levy. Second-time applicants who buy these EC units directly from developers will be required to pay a resale levy of up to S$50,000, which is similar to second-time applicants who buy Build-to-Order flats.

Property watchers say this may affect sales, as second-timers typically comprise of 60 per cent of the demand pool for ECs.

"Not forgetting the fact that in the last couple of quarters, HDB prices have also been dipping, so if HDB prices have dipped about 10 per cent, you forgo about S$40,000 cash, plus the levy of S$40,000 – you then have about S$80,000 lesser than before. So that would impact the aspirations of some to upgrade," said Mr Ismail.

Developers may work around that by targeting more first-time buyers, although observers say this can result in smaller EC units, as developers strive to keep quantum affordable for them.

- CNA/ek

Peace Centre/Mansion make third en bloc attempt

Indicative price is about S$680 million, which works out to S$1,125 per square foot per plot ratio

Source: Business Times / Real Estate

Peace Centre/Peace Mansion, a residential-commercial mixed development along 1 Sophia Road in the prime District 9, has been put up for collective sale by tender for the third time, following two earlier failed attempts. The indicative price is about S$680 million, which works out to S$1,125 per square foot per plot ratio (psf ppr). This price is calculated with neither a differential premium nor topping-up of lease.

-By Lee Meixian

Peace Mansion, Peace Centre up for collective sale again

Source: Straits Times / Money

PEACE Centre and Peace Mansion on the fringe of the Orchard Road precinct are up for collective sale for the fourth time, after three failed attempts.

This time, the owners have set a guide price of $680 million, which works out to $1,125 per sq ft per plot ratio.

This is a slight increase from the $675 million guide price in 2011. In 2007, when the owners had first tried to make a sale, the indicative price was $470 million.

The strata-titled mixed development sits on a 76,617 sq ft site at the junction of Selegie Road and Sophia Road. It has about 55 years of lease remaining on a 99-year leasehold tenure.

Peace Centre is an office and retail space comprising two blocks that are seven storeys and 10 storeys high. Peace Mansion is a 22-storey residential tower with 86 units, including two penthouses.

The developer which purchases the plot can build a new project with a gross floor area of some 604,578 sq ft, or an approved gross plot ratio of 7.89.

Based on the current approved ratio of 60 per cent commercial use and 40 per cent residential use, there is no development charge payable.

Peace Centre could be refurbished into a modern shopping mall, and Peace Mansion converted to accommodate serviced apartments, subject to regulatory approval, said Ms Stella Hoh, executive director of investment services at Colliers International, which is handling the sale.

"The vicinity... is set to be transformed into a vibrant area with new developments and rejuvenation plans," added Ms Hoh, noting the planned development of the Ophir-Rochor Corridor.

The District 9 property also sits near malls such as PoMo, Parklane Shopping Centre and Wilkie Edge, and enjoys a large catchment student population.

Colliers is marketing the property to local and international funds and developers.

The tender will close on Feb 11 next year.

-By Marrisa Lee

Peace Centre, Peace Mansion on Sophia Road put up for sale

The 76,617-square-foot property has an indicative price of approximately S$680 million and the tender will close on Feb 11 next year, says Colliers International.

Source: Channel News Asia / Business

SINGAPORE: Peace Centre and Peace Mansion on Sophia Road were put up for sale on Monday (Dec 15) with an indicative price of approximately S$680 million, according to Colliers International, the property consultant that launched the sale.

The property on 1 Sophia Road sits on a 76,617-square-foot site that has a 99-year leasehold tenure that commenced on Jun 2, 1970. The subject site is zoned for commercial use, with a gross plot ratio of 4.2 according to the Master Plan 2014, Colliers said.

Ms Stella Hoh, Executive Director of Investment Services at Colliers International, said the successful buyer can redevelop the property into a mixed-use development comprising office, retail, residential and serviced apartment units with an allowable gross floor area of about 604,578 sq ft.

"Alternatively, the new owner can consider refurbishment and reconfiguration. Subject to the relevant authorities’ approval, Peace Centre can be refurbished into a modern shopping mall, while Peace Mansion can be converted to accommodate serviced apartments – all these while retaining the existing height of the building, which is currently the tallest in the vicinity,” Ms Hoh said.

The tender will close on Feb 11, 2015 at 2.30pm, Colliers stated.

- CNA/kk

Greenland biding its time to enter Singapore market

It plans to do so next year, adding to its growing presence internationally

Source: Business Times / Real Estate

To be in the right place at the right time underscores the reason behind Greenland Holding Group's decision not to enter Singapore this year but also drives its interest to do so next year. Having turned away from tabling a bid for a land parcel here in August, the Chinese state-owned developer is now actively studying upcoming land tenders in Singapore, said Greenland group executive vice-president Xu Jing.

-By Lynette Khoo

ECs outsell new condos for first time since 2010

Fewer exec condo projects, popular Lake Life units drive up demand

Source: Straits Times / Top of The News

EXECUTIVE condominiums (EC) were the only bright spot in a faltering property market last month, and even outsold new private homes for the first time since 2010.

The numbers tell the changing nature of the sector: 412 private condo units were moved - down 48 per cent from the revised 785 units in October - while a stellar 855 EC homes were sold.

"November was a tale of two fortunes - a waning private residential market in contrast with a brisk EC market," said Mr Ong Teck Hui, national director of research and consultancy at JLL.

The unusual sales balance was due in part to EC buyers being captivated by one particular project - the Lake Life EC in Jurong - and the decision by private developers to hold off launches to concentrate on selling existing units.

It did lift the market slightly, with 1,267 new units - including ECs - selling last month, compared to 875 in October, according to the Urban Redevelopment Authority yesterday.

It was also the first time that more ECs than private condos were sold in a month since 2010, when ECs - a special hybrid of public and private housing - were re-introduced to the market.

Experts said a dearth of EC projects this year had led to pent-up demand. The robust sales were bolstered by the 546-unit Lake Life project. Developer Evia Real Estate sold 533 units at a median price of $869 per sq ft (psf) last month.

Qingjian Realty's 651-unit Bellewaters in Sengkang moved 170 units at $813 psf last month, while its 561-unit Bellewoods in Woodlands sold 79 units at $800 psf.

Ms Chia Siew Chuin, director of research and advisory at Colliers, said the numbers indicate buyers' price sensitivity as financing has become tougher.

"Home buyers, deciding between private homes and ECs, may go for the latter due to the relatively lower price quantum and housing grants," she said.

Just two new private projects were launched last month.

The 250-unit TRE Residences by MCC Land, Sustained Land and Greatview Development in Geylang was the month's top seller, shifting 52 units at a median price of $1,588 psf. Hoi Hup's 493-unit Sophia Hills in Dhoby Ghaut sold only nine units at a median of $2,292 psf.

MCL Land's Lakeville in Lakeside was second, selling 30 units at a median of $1,374 psf. The CapitaLand project D'Leedon in Leedon Heights moved 22 units at a median of $1,538 psf.

-By Cheryl Ong

Executive condominium sales spiked in November: URA

The number of executive condominiums sold last month rose sharply to 855 units, up from 90 units in October, according to data from the Urban Redevelopment Authority.

Source: Channel News Asia / Singapore

SINGAPORE: Sales of executive condominiums (ECs) rose sharply in November even as other transactions in other forms of private property slowed, according to Urban Redevelopment Authority (URA) data released on Monday (Dec 15).

A total of 1,758 ECs were launched last month, with 855 units sold. This marked a significant turnaround from October, when 90 ECs were sold with no new units launched.

EC projects were also bestsellers in November. Topping the list was Lake Life EC in Jurong. Its developer sold 533 of the total 546 units at a median price of S$869 per square foot (psf). Lake Life is the first EC project in Jurong in 17 years.

Buyers also picked up units from other new EC developments. Bellewaters in Sengkang saw 170 units sold - at a median price of S$813 psf. The same developer cleared 79 units at Bellewoods in Woodlands at a median price of S$800 psf.

Property observers said the brisk EC sales are expected due to a pent-up demand in the market following a halt in new launches recently.

Ms Chia Siew Chuin, director of research and advisory at Colliers' International, said: "It is also an indication of buyers' price sensitivity amid a tightened credit environment, as eligible homebuyers deciding between private homes and ECs may go for the latter due to the relatively lower price quantum and housing grants available for the public-private housing hybrid."

Excluding ECs, developers sold 412 new units in November, down from the 785 units sold in October. This is despite an increase in the number of units launched - 859 units compared with the 676 units launched in October.

Mr Alan Cheong, senior director of research and consultancy at Savills Singapore, said: "The increase was mainly due to the sale of ECs. But without the ECs, the sales number for pure private properties actually fell to the lowest for 2014 - at 412 units."

Only two new private condominium developments - 493-unit Sophia Hills located at Mount Sophia and the 250-unit TRE Residences in Geylang - were launched in November. Altogether, the two projects saw just 61 units being sold.

Looking ahead, property watchers said developers are unlikely to offer discounts on projects due to the high cost of land they paid for.

"Over the next few months, a lot of the projects that will come on stream would have been derived from Government Land Sales (GLS) sites in the second half of 2013 and the first half of 2014. On average, although prices would have come off, there are pockets where the GLS sites went to the highest bidder at a relatively high price, which means that developers may not have much room to lower prices," said Mr Cheong.

But developers may turn to other strategies to keep properties affordable for buyers. Mr Lim Yong Hock, key executive officer of PropNex Realty, said: "One of the ways is to actually trim the sizes of the units, so that the quantum can be much more affordable. Some of the sizes could even range from 300 over square feet upwards. And that could come up to a very affordable pricing of below S$500,000."

As the year draws to a close, observers expect December to be a quiet month, due to the year-end festive and holiday period. Overall, property experts said 2014 is likely to end with less than 8,000 units sold - about half the number (14,948) sold in 2013.

- CNA/cy/ac

Companies' Brief

Yongnam clinches deals worth S$22.8m

Source: Business Times / Companies & Markets

Construction firm Yongnam Holdings has secured two contracts worth S$22.8 million - a specialist civil engineering contract in Hong Kong, and a mechanical engineering contract for the Trisonic Wind Tunnel in Singapore. The former was secured by Yongnam Engineering (HK), and the latter by Yongnam Engineering & Construction. Both are wholly-owned subsidiaries of Yongnam.

Sysma bags S$13.5m contract

Source: Business Times / Companies & Markets

Sysma Holdings' wholly-owned subsidiary, Sysma Construction, has secured a contract to erect a two-storey detached house with basement at Ridout Road. The contract is valued at S$13.5 million and construction will take place over 20 months, starting from this month. The contract marks the construction group's fifth project secured in the last three months; Sysma's order book now stands at approximately S$170 million.

Millennium & Copthorne

Source: Straits Times / Money

MILLENNIUM & Copthorne Hotels (M&C) is opening its first flagship hotel in Japan tomorrow. The Millennium Mitsui Garden Hotel, a collaboration with Mitsui Fudosan, is in the heart of Tokyo's Ginza district.

The luxury hotel features two special concept rooms designed by distinguished Japanese brands Mikimoto Cosmetics Ginza and Hakuza Nihonbashi.

Views, Reviews & Forum

Will it be GE 2015 or 2016?

Prime Minister Lee Hsien Loong's robust speech at the People's Action Party (PAP) rally last Sunday and his remarks that the next General Election would be a "deadly serious fight" have sparked talk that polls may be round the corner. When might they be? Insight looks at the buzz on the ground and the possible election windows that are being talked about.

Source: Straits Times / Insight

SOON after the upcoming year-end festivities are over, activists from People's Action Party (PAP) branches and opposition parties plan to resume constituency walkabouts and house visits in earnest.

They will do so with a new urgency, shifting their activities to a higher gear.

While no one knows when the next General Election (GE) will be called - it must be held by January 2017 at the latest - the sense of anticipation has grown significantly.

It has been heightened also by Prime Minister Lee Hsien Loong's robust rallying of the troops at the PAP's 60th-anniversary conference last Sunday.

Addressing 6,000 party members, the ruling party's secretary-general characterised the next election as being "a deadly serious fight", and had the opposition clearly in his sights.

The timing of an election, under laws inherited from the British and which are also adopted in countries like Malaysia and India, is solely at the discretion of the Prime Minister, who has absolute say on when to dissolve Parliament and call for an election.

And even though PM Lee noted that "the elections are still a bit off yet", several PAP activists say they are starting to update their contact lists and database of residents' concerns for when the election is called.

Not to be left behind, opposition parties have also stepped up their activities.

The Workers' Party (WP) has been on regular walkabouts to meet residents and sell its newsletter, The Hammer, in the eastern part of Singapore - its longstanding stomping ground.

The Singapore Democratic Party (SDP) announced plans to launch its GE campaign on Jan 10.

"There are indications that PM Lee Hsien Loong will call for elections in 2015. As such, the SDP will get under way our preparations for the electoral campaign," the party said last week.

Over the past months, the PAP has been putting potential candidates on the ground, understudying ministers and veteran MPs in areas such as Sembawang, Ang Mo Kio, Bishan-Toa Payoh and Tanjong Pagar.

Many are already undertaking grassroots work. The party appears to be getting them involved much earlier, after feedback in the wake of GE 2011 that many of its new faces were not familiar to many residents.

Two months ago, the Elections Department said about 30,000 public servants would be called up for training as election officers - but that this is part of preparations "on an ongoing basis".

PAP activists take a similar position. Branch members offer the line that "we're already preparing for the next one the day after the previous election".

As Mr Khong Peng Ming, secretary of the PAP's Zhenghua branch, puts it: "It's not like just because elections are coming, then we put in more effort. Otherwise, it's a rush... like burning the midnight oil. I don't have any clue as to when the election will be."

Neither do MPs, or civil servants. But one thing is clear to activists and analysts alike: The Prime Minister will call for the election when he thinks it is a good time to do so.

The SG50 effect

AS SINGAPORE kicks off its Golden Jubilee celebrations in the new year, party activists and analysts alike rule out Singaporeans going to the polls in the first half of 2015. They cite fixtures in the calendar, such as the series of SG50 events to mark Singapore's 50th year of nationhood, and the Government's Budget and ensuing debate which will stretch from late February to early March.

There will then be preparations for the SEA Games, which Singapore hosts from June 5 to 16. This will be followed by the lead-up to what is expected to be a grand National Day Parade and celebration of 50 years of independence.

But several observers feel that the months after the National Day celebrations will be a good time for Mr Lee to head to the polls. They speculate that the next GE could be called not long after Aug 9, to ride on the "feel good" effect the festivities will have on voters.

But the earliest possible date after PM Lee's traditional National Day Rally speech in August would be late September. This is because some three weeks are needed from the time Parliament is dissolved to Polling Day.

Political scientist Lam Peng Er of the National University of Singapore's East Asian Institute notes that National Day will be a joyous moment, with "lots of rah-rah and reflection".

"The PAP will probably come up with the argument that Singapore would not be what it is today without the good stewardship of the ruling party," he tells Insight.

Dr Derek da Cunha, the author of Breakthrough: Roadmap For Singapore's Political Future, published after GE 2011, also believes the election will most likely take place in 2015.

Added to the feel-good effect, he expects the Government may roll out a number of "populist" measures to mark the 50th-year milestone.

Over the past year, the Government has already announced initiatives to address concerns over the rising cost of living, to improve its prospects with the ground, Dr da Cunha adds.

He cites as examples the Pioneer Generation Package, planned changes to the Central Provident Fund (CPF) scheme, increasing the stock of available HDB flats and moderated housing prices.

He also expects "pre-election sweeteners" in the Budget next February, and others nearer to National Day.

PM Lee's National Day Rally, traditionally held at the end of August, could also set the stage for the election.

Three of the past 11 elections - in 1972, 1988 and 1991 - were held in August and September, within weeks of the rally.

But opposition parties take a different view of going to the polls amidst National Day and SG50 fervour.

Mrs Jeannette Chong-Aruldoss, secretary-general of the National Solidarity Party (NSP), says that events like next year's National Day should focus on a "national celebration", rather than something the PAP can capitalise on.

While acknowledging it is the Government's prerogative when to call an election, she adds: "I hope they won't just say that Singapore is what it is because of 50 years of PAP rule, and gloss over the sacrifices and hard work of Singaporeans.

"I would like Aug 9 to be a way to focus on the contributions which our citizens have made towards the country's progress, and not a day to extol the achievements of the PAP."

Starting early

THAT talk of an election has taken firmer root could be simply down to the fact that parties like the PAP have been doing some things differently: the soft rollout of potential new faces on the ground, for instance, began as early as April this year.

Since then, more than 20 individuals have been seen at grassroots events in the company of ministers or older MPs. In the initial stages, some were introduced and described as likely candidates.

But that is no longer the case. Individuals who are being tested and assessed have been active in PM Lee's Ang Mo Kio GRC, Bishan-Toa Payoh GRC, as well as Sembawang GRC.

PAP candidates who lost at the ballot box have also been moved to other constituencies.

Surgeon Koh Poh Koon, who lost the Punggol East by-election to the WP's Lee Li Lian last year, has been seen in Ang Mo Kio GRC. Former labour movement leader Desmond Choo, who lost twice in Hougang - in 2011 and 2013 - is now helping in Tampines GRC.

The presence on the ground of potential candidates suggests that the PAP is taking seriously public feedback after the 2011 GE that candidates sometimes get "parachuted in" or introduced with little time for residents - and party activists themselves - to get a full measure of the man.

Bishan-Toa Payoh anchor minister Ng Eng Hen acknowledged as much when he told reporters earlier this year: "Many Singaporeans said they prefer candidates who have spent some time on the ground before elections come."

He says their involvement in activities also gives potential candidates time to get to know residents.

The WP is not sitting still. It has been building up its team of candidates to contest GRCs contiguous to Aljunied GRC, including East Coast, Tampines and Marine Parade.

And observers say the ratcheting up of campaign rhetoric a notch appears to be a way for the PAP to signal to voters that they should consider what is at stake.

But it also offers an opportunity for the opposition to make themselves and their plans better known to voters - and to be held up to scrutiny.

Mrs Chong-Aruldoss says the NSP is "certainly making its preparations for the next GE".

"We have no choice but to work with the possibility (of a 2015 election) in mind," she adds.

However, former Nominated MP Eugene Tan, a Singapore Management University law academic, tells Insight he doubts the election would take place in the first three quarters of 2015.

"We know that calling for elections involves strategic considerations. But for them to take place in the midst of the 50th-anniversary celebrations would distract and detract from the focal point of 2015, which is about commemorating this very important occasion in the country's history," he says.

Still, the last quarter of 2015 stretching into the new year could be one possible window.

There has, however, not been a year-end election since 2001, when voters went to the ballot box on Nov 3.

Four earlier general elections were called in late December - in 1976, 1980 and 1984. And in 1997 polling took place on Jan 2.

The year-end used to be the favoured period. The assumption was that people would be in a good mood, with bonus payouts.

But this does not seem to apply as much now. A significant number of Singaporeans also leave the country during the year-end school holidays and the Government may not be inclined to call for an election then as turnout could be lower.

SMU's Associate Professor Tan also says that SG50 celebrations will tax national resources, from security personnel to the work of government departments. And the Government may also not want to risk ending the Golden Jubilee celebrations on a low note "by going into what is likely to be very contentious debates about Singappore...because elections can be divisive".

There is also a major exhibition being organised at the end of 2015, which would paint a vision of what the country would look like over the next 50 years. That could be a perfect set-up for a general election in 2016.

May 2016?

EVEN if 2015 passes by without an election being called, the Government can sit out its full term, until Parliament is dissolved when its five-year term ends in October 2016. The law allows for polls to be held up to three months after this, and the latest an election can be held would be January 2017.

But observers feel an election would more likely be held in the second quarter of 2016, possibly in May, the same month in which GE 2006 and GE 2011 were held.

The first few months of 2016 are to avoid holding an election in, given the Chinese New Year celebrations and the annual Budget. But waiting till later in 2016 may not be the best option either.

"There's always the danger of waiting till your term is almost up, as that leaves you with very little room to manoeuvre," says Prof Tan.

"If your original plan is early or mid-2016, you can still delay it if conditions don't look so good. But if you wait till the end of the term, you're then dictated to as to when elections are held."

Observers feel that holding the election later rather than sooner may work in the PAP's favour. It means that hot-button issues from GE2011, like housing prices and transport shortcomings, would be better resolved. This would allow the Government to present a brighter report card to voters.

Stage Two of the Downtown Line linking Bukit Panjang and Bukit Timah to the city, for instance, would be completed by 2016 and more bus routes added across the island by then.

Might there even be two bumper election Budgets, if polls take place after Budget 2016?

Prof Tan feels both 2015 and 2016 may see Budgets that could further demonstrate the PAP's ability to manage the country well fiscally and deeply engage in long-term planning.

Recent Budgets, he adds, have, after all, taken a "very significant slant" towards strengthening social safety nets.

Keeping options open

OTHERS feel the choice of a GE date remains wide open.

Political watcher Zulkifli Baharudin, a former NMP, is one of those who is uncomfortable with reading the tea leaves to try and determine the election period.

So are a number of party activists with the PAP and opposition.

"Since the PAP is the incumbent and has the prerogative to call for the election any time it wants, I would like to think that this time around, and going forward, it will use this prerogative intelligently," Mr Zulkifli tells Insight.

PAP leaders have to be the judge of the best timing, he adds.

"You have the advantage, you do it. I don't think the PAP is going to pepper the whole thing with signs saying 'I will call for elections, so get prepared'. We have to be prepared for surprises," he says.

One common thread among those who prefer not to speculate is that the Prime Minister would want to keep his options open.

Dr Lam says one consideration is the need to avoid "black swan" events - unpredictable and rare yet high-impact events.

And the longer the delay in calling the GE, the more likely such an event could happen, he adds.

Global conditions could favour the PAP too. Take GE 2001, called months after the Sept 11, 2001 terror attacks on America and amid a global downturn.

That election saw the PAP returned with 75 per cent of the vote as voters saw the party as having the safest pair of hands to steer the economy through the rough patch.

While tough economic times are an advantage for the incumbent, some things are also changing. A Straits Times survey in March this year found that the need for checks and balances on government, and a candidate's attributes, were key factors for voters deciding who to vote for.

At the next election, to a man, activists and analysts expect every seat to be contested, some more fiercely than others.

This is especially for seats targeted by the WP. This is because, as observers like NUS political scientist Bilveer Singh see it, the PAP will want to ensure that the WP - with seven elected MPs - makes no further and significant electoral gains.

And with contests expected to be fiercest in constituencies bordering WP-held Aljunied GRC, the timing of the election could also well hinge on how PAP leaders assess the chances of staving off the opposition making inroads in such constituencies.

So will the general election be in 2015? Or sometime in 2016?

At this stage, few would hazard a guess.

But one thing is certain: Expect more party activity as the build-up has well and truly gotten under way.

-By Zakir Hussain, Rachel Au-Yong & Charrisa Yong

Harness tech wisely to be 'smart city'

Source: Straits Times / Forum Letters

A "SMART city" consists of "smart people" and not just "smart gadgets" ("Vision of 'e-topia' calls for smart choices"; last Wednesday).

Being a pioneer in applying IT to business and government processes in the late 1960s, I have seen investments being wasted on "white elephants", but also clever use of technology yielding great results. In the end, it is the people, and not machines, who deliver results.

The editorial asked: "As a lifestyle choice, would people prefer to interact mainly with super-efficient machines and virtual organisations or crave the buzz from organic forms of 'culture, commerce, community' ".

I would vote for the latter even though I spent more than 30 years in the IT industry.

Smartphones are the most obvious technological advancements that have changed social norms so much so that meetings no longer have to be held face-to-face.

Manufacturers like Apple are laughing all the way to the bank, but I am not sure how these devices have improved life.

We now have friends who are so engrossed in their phones that they no longer talk to one another. Then there are drivers who are so distracted by their gadgets that they no longer pay attention to the road.

Technology can work against us unless we learn to harness it to be our slaves and not our masters. To do this, we need our people to be "smarter".

Over the past couple of weeks, we have read about how leading institutions were brought to their knees by their "smart" systems.

First, a software glitch delayed the opening of Singapore Exchange's securities market by more than three hours earlier this month. Then, a computer error caused the erroneous sale of hundreds of Singapore Airlines business-class tickets at economy-class prices.

I learnt in my IT career that machine speeds can work either way. If there is an error in the "smarts", a faster machine will accentuate the error faster.

I have not even touched on over-dependence on automation. The public will be familiar with this when an MRT train or a telco network breaks down.

Until we learn to harness and make better use of technology, there should be no hurry to race to be the No. 1 "smart city".

-By Geoffrey Kung

Global Economy & Global Real Estate

Colliers sees jump in Asian property transactions in 2015

It cites pent-up demand from both real-estate occupiers and investors due to prior lack of stock

Source: Business Times / Real Estate

Real estate transactions in Asia will probably increase in 2015, driven by greater supply that is finally starting to meet strong demand, Colliers said in a report on Monday. "There is pent-up underlying demand from both occupiers and investors, primarily due to the lack of stock (previously), and that will gradually be satisfied by what we anticipate as a growing volume of new supply in 2015," the consultancy firm said.

-By Lee Meixian

Asia property market 'to pick up in 2015'

Source: Straits Times / Money

DEMAND for real estate in Asia is expected to pick up next year as investors sink more capital into the region, according to a report by Colliers International.

Institutional investors who are under-invested in Asia will seek to "rebalance their allocations" - a move set to bring in a "much more significant" volume of inbound capital, the report said.

"It is likely that some Asian governments will relax their property cooling measures, particularly given the softening of residential prices and slowing economic growth," said Mr Terence Tang, Colliers' managing director of capital markets and investment services in Asia.

"We are already witnessing some longer-term investors... now actively seeking realistically priced deals to take advantage of the slow market, in view of the potentially lower exit risk."

The Colliers' International 2015 Property Outlook report also noted that vendors are becoming more realistic in asking prices.

This should stimulate an increase in transactions, while Chinese investors are likely to continue their buying spree both within Asia and outside the region.

Closer to home, the office market in Singapore will continue to attract investors next year, and "an under-supply of new office space will support healthy occupancy rates, as well as rising rents and prices", said Colliers.

"Investors will be keeping an eye out for good-value opportunities, especially in the luxury segment," said Mr Tang, pointing to the lull in the residential property sector.

"The slowdown in the market has encouraged sellers to reduce their asking prices, which may generate more momentum in the year ahead, compared to what has certainly been a lacklustre 2014."

He added that capital-market activities will increase, led by more international investors, particularly private-equity groups from North Asia and European pension funds.

But Colliers said that it "does not expect rates to rise either soon or fast".

"As a result, the overall environment for borrowing for real-estate purchases remains near a record-low, giving continued impetus to capital markets around Asia."

-By Jacqueline Woo

GIC and Vatika to develop residential projects in India

Source: Business Times / Real Estate

GIC to develop two projects near Delhi

High-quality homes planned in joint venture with property firm in Gurgaon

Source: Straits Times / Money

SOVEREIGN wealth fund GIC continues to have a strong appetite for real estate - turning its sights on India for its latest deal.

It has entered into a joint venture with Indian property firm Vatika Group to develop two residential projects in Gurgaon near the nation's capital New Delhi.

The two firms said in a joint statement yesterday that the projects will meet demand for high-quality residential units.

Vatika, which is involved in a wide spectrum of real estate, including residential, commercial, township and facilities management projects, will be the developer.

The two projects have a development potential of more than 2.3 million sq ft and are set to generate revenues of some 20 billion rupees (S$420 million) when completed by the 2018-2019 financial year. No other financial details were made known.

Vatika already has a significant presence in nearby areas. It is building schools, hospitals, malls and parks within 5km of the integrated townships, Vatika Express City and Vatika India Next, which it is developing.

The co-head for Asia at GIC Real Estate, Mr Loh Wai Keong, said: "GIC is confident of India's growth potential over the long term. We have nurtured long- term partnerships with developers across the globe successfully and hope that we will leverage each other's strengths to grow this partnership steadily in the coming years."

GIC has sealed a series of property deals around the world this year, with two other purchases this month alone.

At the start of December, GIC and its affiliates sewed up a mega US$8.1 billion (S$10.6 billion) transaction to buy IndCorp, which owns industrial properties in the United States.

It also said last week that it agreed to buy an office building under construction in Brazil's Rio de Janeiro for an undisclosed sum.

Another notable deal was its purchase in October of the office portion of mixed-use Pacific Century Place Marunouchi in Tokyo, reportedly for US$1.7 billion.

It also made its first foray into the New Zealand real estate market by taking a stake in a major Auckland waterfront precinct last month.

India has also featured on GIC's radar this year. GIC agreed to jointly invest 15 billion rupees with Indian developer Brigade Enterprises in residential projects in southern India in September.

GIC also raised its stake in Mumbai-listed property developer Phoenix Mills from close to 1.5 per cent to some 5 per cent for 1.06 billion rupees in February.

-By Mok Fei Fei

Homebuilder Confidence in U.S. Hovers Around Nine-Year High

Source: Bloomberg / Luxury

Confidence among U.S. homebuilders hovered in December close to a nine-year high, indicating the residential real estate recovery continues to make progress.

While the National Association of Home Builders/Wells Fargo sentiment gauge decreased to 57 this month from 58 in November, readings greater than 50 mean more respondents said conditions were good, the Washington-based group reported today. The median forecast in a Bloomberg survey projected an advance to 59.

The housing market has made gradual improvement this year, helped by mortgage rates below 4 percent and unemployment at the lowest level in six years. A pick-up in wage growth and sustained gains in consumer sentiment will support momentum in the industry into next year as the Federal Reserve considers its first interest rate rise since 2006.

“We are in a slow march back to normal,” David Crowe, NAHB chief economist, said in a statement. “As we head into 2015, the housing market should continue to recover at a steady, gradual pace.”

Estimates (USHBMIDX) in the Bloomberg survey for the homebuilder index ranged from 55 to 61. September’s reading of 59 was the strongest since November 2005.

Builder confidence retreated in three of the four U.S. regions, with the Northeast showing the biggest drop. The Midwest and South also declined, while the West jumped to its highest level since December 2005.

The group’s gauge of prospective buyer traffic held at 45 last month, while the index of current single-family home sales decreased to 61 from 62.

Outlook Gauge

The measure of the six-month sales outlook decreased to 65 in December from 66.

“Members in many markets across the country have seen their businesses improve over the course of the year, and we expect builders to remain confident in 2015,” NAHB Chairman Kevin Kelly, a homebuilder and developer from Wilmington, Delaware, said in a statement.

Mortgage rates that have steadily declined have supported the housing market this year. The average 30-year, fixed-rate mortgage was 3.93 percent in the week ended Dec. 11, down from 4.53 percent at the start of January, according to data from Freddie Mac in McLean, Virginia.

The slow rebound in residential real estate has baffled some builders.

Progress in the housing market this year has been “perplexing,” with less growth and pricing power compared to 2013, Douglas Yearley, chief executive officer of Toll Brothers Inc., said in a Dec. 10 earnings call.

Pent-Up Demand

“We’ll be there when it comes back, but right now, it’s a little bit confusing,” Yearley said. “This huge pent-up demand is building. Household formations are growing. Population is growing. Interest rates are 4 percent. It is certainly a bit frustrating and confusing.”

More job growth and a pickup in wages will give Americans the means to buy. Payrolls climbed 321,000 in November and followed a 243,000 gain in October that was bigger than originally estimated, Labor Department figures show. Average hourly earnings climbed 0.4 percent from the month before, the most since June 2013.

A Commerce Department report tomorrow will probably show housing starts rose to a 1.04 million pace in November from a 1.01 million rate a month earlier, according to the median estimate in a Bloomberg survey.

-By Victoria Stilwell

Cushman & Wakefield to Buy NYC Brokerage Massey Knakal

Source: Bloomberg / Luxury

Cushman & Wakefield Inc. agreed to buy Massey Knakal Realty Services, a brokerage that specializes in New York City commercial-property deals.

Terms of the purchase weren’t disclosed. Massey Knakal “is known for dominating the market for mid-sized office, retail and apartment building sales” in New York’s five boroughs, the city’s Westchester County and Long Island suburbs, and in New Jersey, Cushman said in a statement today.

Paul Massey Jr. and Robert Knakal’s brokerage, founded in 1988, has arranged more than 5,000 transactions with a market value of more than $21 billion, according to the statement. The firm also releases quarterly reports on New York’s commercial-property market. Agents specialize in specific neighborhoods, unusual in commercial real estate.

Connecting Massey Knakal with New York-based Cushman’s global platform “will enhance the breadth of real estate services we can now offer our clients,” Massey, the firm’s chief executive officer, said in the statement.

Massey Knakal brokered $687 million of commercial real estate sales in 2013, ranking it 15th in the U.S., according to a survey by Real Estate Alert, a weekly trade newsletter. The firm’s dollar volume rose 49 percent from the year before. Cushman ranked fifth with $9.5 billion of transactions, up 3.8 percent from 2012, according to the survey.

Cushman said it expects the acquisition to be completed before the end of the month. Massey Knakal was advised by Perella Weinberg Partners LP. Cushman was represented by Goldman Sachs Group Inc.

The Commercial Observer reported on Dec. 11 that Cushman is expected to pay about $100 million for Massey Knakal, citing an unnamed person with knowledge of the negotiations.

-By David M. Levitt

Kukral’s Northwood Agrees $995 Million U.K. Property Acquisition

Source: Bloomberg / News

Affiliates of Northwood Investors LLC, the private equity firm founded by former Blackstone Real Estate Advisors President John Kukral, agreed to buy U.K. warehouses and office buildings for 635 million pounds ($995 million).

The 7.1 million square-foot (660,000 square-meter) portfolio is being acquired from funds previously managed by Newbury, England-based Highcross Strategic Advisers Ltd., Northwood said in a statement today. Northwood also said it will acquire Highcross in a separate deal.

“We continue to see rapidly improving regional U.K. fundamentals, supported by rising rental rates, declining tenant incentives and decreasing vacancy, which combine to create a compelling entry point,” Northwood President and Chief Executive Kukral said in the statement.

U.K. commercial property gave landlords total return, a combination of rental income and changes in value, of 20 percent in the 12 months through November, according to Investment Property Databank Ltd. Warehouses and office buildings rose the most in value in November from a month earlier, gaining 1.3 percent compared with a 0.3 percent increase in the value of stores.

-By Neil Callanan

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