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14th June 2014

Singapore Real Estate

Govt may tweak quota system to help married couples live near their parents

Source: Channel News Asia / Singapore

SINGAPORE: Tweaking the quota system is one option the government could look into to improve the chances of those hoping to live near their parents.

Minister of State Mohamad Maliki Osman said this at the second housing conversation session on Saturday which aims to find out what more can be done to help extended families live together or close by.

He said another area is to consider extending grants to second-time home buyers purchasing HDB resale flats near their parents.

Thirty-six married participants attended the second housing conversation.

About a third said they were in favour of giving absolute priority to those hoping to buy a new flat near their parents.

32-year-old Arina Tan, who has a one-year-old daughter, said: "We had been balloting for a flat near our parents for four times but we weren't able to get it. For the fifth time, we tried a further place at Yishun where the government has opened up more flats at the non-mature estates. We were able to get it.

“We have our flat in Yishun but we still stay weekdays at my in-laws place because of the baby. She can take care of her and we do not need to travel every day from Yishun to Jurong."

A week ago, courting couples gave a resounding "no" when asked if they were in favour of giving absolute priority to those hoping to buy a new flat near their parents.

To prevent people from abusing the system, some participants said there should be conditions if absolute priority is given such as extending the Minimum Occupation Period from five, to 10 years.

However, some also acknowledged the challenges of giving absolute priority.

"If somebody were to have absolute priority, then there would be another group that wouldn't have anything at all so I think it's a bit difficult," said Joewind Han.

About half of the participants also said while they did not want absolute priority, they were in favour of more priority being given.

One option could be to tweak the quota system instead.

Dr Maliki said: "As we try to look at ways to enhance the opportunities for young couples to live near their parents, one option is to see how best we can tweak at the quota system. Today, we have about 85 per cent of BTO flats allocated to first-timers, 15 per cent to second-timers.

"One option is if you want to really look at ways to enhance the possibility, or increase the chances of second-timers who want to live near their parents, maybe we can set aside a quota within perhaps that 15 per cent. They can possibly look at how their chances can be better met. But nonetheless, we are still exploring some of these ideas."

Participants also discussed whether second-time home buyers should get housing grants when buying a resale flat near their parents.

Currently, first time home buyers purchasing a resale flat get a S$30,000 CPF Housing Grant, but this goes up to S$40,000 when they buy a resale flat to live together with, or near their parents.

Some had suggested that the additional S$10,000 be given to both first and second-timers.

Dr Maliki said: "This is a significant shift when we talk about giving grants to second-timers but I think they recognise the proposal is to give grants to those wanting to live near their parents and this is for those who did not get to exercise that option when they bought their first flat so I think it's quite a rational proposition.

"That's something that we can try to consider how else we can facilitate couples who have moved on to their next phase of their life stage to live near their parents. If it means that a grant can incentivise that, a grant can facilitate that, we will be prepared to consider that."

Participants were also split when asked if the government should continue building more Three-Generation (3Gen) flats.

Some said while they were in favour of having more 3Gen flats built, they also hoped some design improvements could be made.

"As a concept, it's great but I think if the useable space, the common spaces are not tweaked well, it could just lead to hot housing," said Goh Ling Pin.

"There could be extra conflict within the house like a lot of people crammed within a smaller space might not fulfil the purpose of helping a family get along," Goh added.

His wife Christine Choo said: "We are living with my father-in-law and I believe that he will like to have his own privacy as well, and for us to have our own privacy, but yet at the same time we want to live together so having a dual-key system where he's just next door and we're under one roof and for us to take care of the financing, would be very helpful for elderly who is also a retiree."

Dr Maliki said: "We're looking at the needs, the profile of different family types, size commensurate with the size of the family too. We want to make it optimal for families when they use the spaces."

Dr Maliki said how the first batch of 3Gen flats in Yishun pans out will have to be observed before fine-tuning designs.

The next housing conversation session is on June 19 and will target seniors with children above 21.

- CNA/fa

Bidadari home projects attract growing interest

Source: Straits Times

Interest in Housing Board flats in Bidadari is growing but investors have also been quick to buy private homes in the growing residential enclave. Of course, any mention of the quiet neighbourhood brings to mind the burial grounds of the former Bidadari Cemetery.

Homes sold as leasehold tenures on freehold sites

Sourcer: Straits Times

Owners of The Shore Residences may be unaware that they are part of a small group to have bought units sold with leasehold tenures, though the developer owns a freehold land title. The 408-unit condominium in Marine Parade got its temporary occupation permit in January.

Price cuts at prime central private homes too

Source: Business Times / Wealth

THE sale is on for private residential projects in the prime central region, following price cuts for city fringe and suburban projects which helped developers move more unsold units.

Palms @ Sixth Avenue, a strata landed semi-detached project, is offering to absorb the 7 per cent additional buyer's stamp duty which existing Singaporean home owners have to pay for a second residential property.

With this, prices will go from $5.3 million to $4.9 million for a 4,510-sq-ft unit, and from $7 million to $6.5 million for a 5,834-sq-ft one. The discounted prices translate to a per square foot range of $1,086 to $1,114.

-By Lee Meixian

Farrer Park hotel to open in August

Source: Business Times / Wealth

ONE Farrer Hotel & Spa, located within mixed-use complex Connexion along Farrer Park Road, is set to open this August.

Besides the hotel, Connexion also includes a medical centre and hospital.

Originally slated to open in 2010, Connexion's opening date was pushed back to end-2011 due to longer-than-expected piling works. It was further delayed to early 2013 due to internal disputes among the shareholders.

-By Sheena Tan

Real Estate Companies' Brief

Sim Lian unit wins $87.8m HDB contract

Source: Business Times / Companies

A SUBSIDIARY of developer Sim Lian has been awarded an $87.8 million contract by the Housing and Development Board for a project in Sengkang Neighbourhood 3. The contract for 27.5 months comprises the construction of four residential blocks with 503 dwelling units, a multi-storey carpark and communal facilities.

Global Economy & Global Real Estate

Singapore firms remain upbeat about Iskandar

Special economic zone still compelling though it has yet to attract many companies due to labour, security concerns

Source: Today Online / Business

SINGAPORE — Despite lingering concerns about shrinking cost advantages and a lack of skilled labour in Iskandar Malaysia, the developers of a new industrial estate have said the special economic zone remains a compelling choice for Singapore companies to expand or relocate to amid land and manpower constraints at home.

Nusajaya Tech Park will be the latest addition to the Iskandar economic infrastructure when its first stage is completed in 2016.

The industrial estate is already drawing strong Singapore interest, said Mr Manohar Khiatani, chief executive of Ascendas, which is jointly developing the project with Malaysia’s UEM Sunrise.

“Out of our first soft launch of ready-built facilities, 40 per cent have been pre-committed — a large proportion of them by Singapore-based companies,” Mr Khatiani told TODAY at the groundbreaking ceremony yesterday. “When this park is eventually completed, I expect it’ll have a good mix of Singapore companies — which will take up a big proportion — as well as Malaysian and international companies.

“The tech park takes advantage of the relative strengths of Singapore and Malaysia. Singapore is a small country with scarcity of land, but the Asian market is still growing. It makes sense for Singapore companies to have a location close by that can accommodate the space and scope for expansion activities.”

Similarly, Minister for Trade and Industry Lim Hng Kiang highlighted the potential of Iskandar and encouraged Singapore businesses to consider shifting there if they want to develop operations overseas.

“The proximity between Singapore and Iskandar Malaysia provides the opportunity for investors to position their full value chain of business and manufacturing functions across both locations, hence spurring the development of complementary industries. With the right mix of industries and enhanced connectivity, there is potential for both countries to develop a seamless economic space,” he said.

A S$1.5 billion joint project that is 60 per cent owned by Ascendas, the 210ha Nusajaya Tech Park will be developed in three phases over nine years, with the first phase set to be completed in 2016.

It will offer a mixture of freehold ready-built factories and land plots for built-to-suit developments for about 200 companies in sectors such as precision engineering, clean manufacturing and logistics. The average price is RM380 (S$147) per square foot (psf). In comparison, the cheapest JTC factory space for the Business 1 category is priced at about S$406 psf.

Yet despite such attractively-priced industrial land, Iskandar has yet to see a sizable cluster of Singapore companies, which remain concerned over issues such as a lack of skilled labour, incomplete infrastructure and poor security.

Mr Philip Tan, ASEAN vice-president of Singapore-based YCH Group, agreed that it may take a while for Iskandar to gain further traction with Singapore companies, but felt the economic zone will eventually grow to its potential as the hub of choice for local businesses.

The regional supply chain solutions provider yesterday signed a memorandum of understanding with Nusajaya Tech Park to explore establishing an advanced supply chain facility. YCH is very keen on the partnership, Mr Tan said.

“At the end of the day, there will be challenges, one of which is the difficulty in getting skilled labour. There’s always a trade-off — lower costs versus other issues that we need to address,” he said.

“But I’m sure these issues are being addressed by the Malaysian authorities and, once they are, Nusajaya Tech Park — as well as Iskandar Malaysia — will be very attractive to Singapore companies.”

Ascendas’ Mr Khiatani is similarly upbeat: “The Singapore-Iskandar story remains very compelling — that’s why we’re here. As is the case with every story, there will be ups and down, but we are confident about the growth of Iskandar, and that Singapore businesses and economy will be able to benefit from it.”

-By Wong Wei Han

Oxley Holdings sells Soho idea in Cambodia

Source: Straits Times

Small office home office (Soho) units are nothing new in many countries. But the concept never existed in Cambodia before it was introduced there recently - by a Singapore developer.

'No money down' Chinese home deals echo US sub-prime risks

Source: Straits Times

China's home buyers are being offered "no money down" purchases in an echo of the sub-prime lending that triggered a US economic meltdown and the global financial crisis.

TPG-led group buys property services firm

Source: Business Times / Wealth

A TPG Capital Management-led consortium has agreed to buy the property arm of Australian engineering services firm UGL Ltd for A$1.215 billion (S$1.43 billion), a source said yesterday.

UGL put the unit DTZ, a real estate services company, for sale to cut debt as its main engineering services division faces declining revenues due to a slowdown in the Australian mining sector.

A deal was expected to be signed as early as yesterday, bringing to a close a year-long sale process that has attracted interest from a number of private equity bidders including US buyout firm Warburg Pincus.

-From Hong Kong, China

TPG, Ontario Teachers to Buy DTZ From UGL for A$12 Billion 

Souce: Bloomberg / News

A group led by TPG Capital, the buyout firm started by David Bonderman, agreed to pay A$1.22 billion ($1.2 billion) to buy UGL Ltd.’s property services arm.

The group, including Ontario Teachers’ Pension Plan and PAG Asia Capital Ltd., hopes to complete the transaction in September, subject to regulatory approvals, Sydney-based UGL said in a statement. UGL, which is evaluating “a range of options” for the net proceeds of A$1 billion to A$1.05 billion from the sale, also said Ross Taylor had been appointed as the company’s new chief executive officer from Nov. 24.

“This puts cash back onto UGL’s balance sheet and allows them to refocus on the engineering business, which has really been struggling,” Evan Lucas, a market strategist at IG Ltd., said today by phone from Singapore. “It looks like a pretty strong price, though perhaps not as much as the A$1.6 billion that some analysts were expecting.”

TPG adds to its investments in Australia, including Inghams Enterprises Pty, the nation’s biggest poultry producer, last year. The Fort Worth, Texas-based buyout firm raised $2.9 billion for its sixth Asian fund as of April and planned to close it at as much as $3.5 billion, people with knowledge of the matter said at the time.

UGL’s sale of the real estate division -- created through a merger of DTZ Holdings Plc, which it purchased in December 2011, with its existing property business -- comes after the company said last year it would split into two. UGL also provides engineering, construction and maintenance services for rail, infrastructure and resources projects in Australia, New Zealand and Southeast Asia, according to the statement.

‘Fair Valuation’

After considering the split, UGL’s board decided the bid was in the best interests of shareholders and that it represented a “fair valuation,” UGL Chairman Trevor Rowe said in the statement. The company, led by outgoing CEO Richard Leupen, will have sales of A$2.3 billion and 6,650 staff after the divestment of DTZ.

UGL should keep the proceeds as cash until an upheaval in the engineering sector subsides and then make a decision on how to use the funds when its 2015 financial position is clearer, IG’s Lucas said.

The shares rose 0.6 percent to A$6.98 at the close in Sydney, valuing the company at A$1.16 billion. They have declined 4.5 percent this year.

Renewed Leadership

DTZ had revenues of A$1.9 billion in fiscal year 2013, and employed 45,000 people globally, including contractors, according to UGL.

DTZ Chief Executive Officer Tod Lickerman will stay on in the role and former CBRE Group Inc. CEO Brett White will become executive chairman of the unit in March, the TPG-led group said in a separate statement.

Ontario Teachers’, the largest pension in Canada’s most populous province, agreed last year to buy 70 percent of Leighton Holdings Ltd.’s telecommunications assets for about A$620 million. In 2010, the fund agreed to buy the lease for the Sydney Desalination Plant alongside Hastings Funds Management Pty for A$2.3 billion.

-By Brett Foley and Nichola Saminather

House whip is sole contender for key Republican post

Source: Straits Times