Real News‎ > ‎2014‎ > ‎March 2014‎ > ‎

11th March 2014

Singapore Real Estate

New methods may raise costs for developers

Govt to top up CPC Fund by $30m: Lee Yi Shyan

Source: Business Times / Top Stories

[SINGAPORE] Requiring developers to adopt productive technologies and prefabricated components in new projects, as announced by the Ministry of National Development (MND) yesterday, is widely expected to translate into higher costs for them in the short term.

Developers will have to adopt productive technologies for selected Government Land Sale (GLS) sites from the second half of this year, MND said during the Budget debate.

These technologies include prefabricated prefinished volumetric construction (PPVC) for hotels and residential projects and cross-laminated timber (CLT) for low and medium-rise buildings.

The use of prefabricated bathroom units (PBUs) will be mandated for all residential GLS sites; with industrial GLS sites, a minimum level of prefabrication will be required.

The Building and Construction Authority (BCA) can issue a stop-work order on a project which does not fall in with these requirements, which are being instituted to force construction firms here - laggards in productivity compared to their global peers - to buck up.

The BCA said yesterday that developers have a greater role to play in raising construction productivity because they drive building projects from their place at the top of the construction value chain.

BCA chief executive John Keung said the use of productive technologies can speed up completion of buildings, reduce dust and noise for people living near construction sites and reduce the risk of on-site accidents.

The use of PBUs for residential GLS sites is expected to save manpower by 60 per cent. More than 20 private residential projects have incorporated such bathrooms since 2005.

Mr Keung conceded that the initial adoption of these more productive construction methods may mean higher costs for some developers, but declined to provide an estimate.

The BCA will also progressively raise the bar on buildable designs and the use of labour-efficient construction methods this year and next year.

Lee Yi Shyan, Senior Minister of State for National Development, told Parliament yesterday that the government will top up the five-year Construction Productivity and Capability Fund (CPC Fund) by $30 million.

Since its launch with $250 million of capital in 2010, the fund has helped 4,000 companies, of which 80 per cent are small and medium-sized enterprises.

Mr Lee said: "We will explore a second five-year tranche of funding to continue our support to firms to raise construction productivity."

Singapore-listed Swee Hong, a major construction firm here, is a licensee for the PPVC technology. Its managing director Ong Hock Leong told The Business Times that the company may not make cost savings at the start because it is setting up a 100,000-sq-ft factory in Kranji Link to produce modular housing units. Costs will also be run up in training its staff and in storing and transporting the prefabricated units to the site.

"We expect a 5 to 20 per cent increase in costs compared to using conventional methods," Mr Ong said, but added that manpower savings also stand to be halved.

Developers that have used productive technologies say the initial costs are high, but that the gains in site productivity will eventually offset the incremental costs of adopting the new 


Major developer City Developments Ltd (CDL), for instance, has already been using drywall for the internal partition walls and PBUs in most of its new condominium developments.

Allen Ang, the head of Green Building at CDL, said: "While the cost of prefabrication is still relatively high due to production, transportation and logistics issues, with the government's latest stringent measures in foreign-worker levies and PBUs now mandated, we expect a wider adoption of PBUs by developers.

"With economies of scale, the cost of PBUs should go down and could even be cheaper (to build) than conventional bathrooms in the long run."

The use of PBUs has yielded productivity improvements of 40 to 80 per cent for CDL.

Leading the way in the public sector, the Nanyang Technological University's upcoming hostel in North Hill will be the first project here to be built using PPVC.

Paul Chain, the chief executive of the university's Development & Facilities Management, said: "The cost savings are expected to be marginal as there is a trade-off between manpower savings and material and mechanisation costs."

To ensure an adequate supply of precasts and address a lack of space for manufacturing them, the BCA will call land tenders for the building of 10 multi-storey integrated construction and precast hubs by 2020.

The more than 20 pre-cast suppliers here are now able to meet the bulk of demand here; imports meet no more than 10-20 per cent of the demand for pre-casts.

As an interim measure, BCA said it is extending the leases of existing pre-casters where possible; it will also provide temporary precast storage land and import pre-casts from Malaysia and other sources.

-By Lynette Khoo

Non-landed resale homes market remains soft in Feb

SRX flash figures show transactions down 18.5% m-o-m

Source: Business Times / Top Stories

[SINGAPORE] Cooling measures and the Total Debt Servicing Ratio framework continued to send non-landed private home resale volume on a controlled descent to a level not seen since December 2008 during the global financial crisis.

Flash figures released yesterday by the Singapore Real Estate Exchange (SRX) showed resale transactions down 18.5 per cent month-on-month to an estimated 242 transactions last month.

The drop was a more pronounced 22.2 per cent on a year-on-year basis, from 311 resale deals closed in February 2013.

Meanwhile, resale prices reversed consecutive price gains in December and January to dip 2 per cent, which consultants say shows a "natural" pullback from "unsustainable" price increases in the previous two months.

-By Lee Meixian

Non-landed private home resale prices fall 2% in February

Source: Channel News Asia / Business

SINGAPORE: The number of resale non-landed private homes transacted in February was the lowest in more than five years.

This is according to latest numbers from the Singapore Real Estate Exchange (SRX).

The data also showed that resale prices fell by 2 per cent from January.

Property consultants said that they expect the resale market for private homes to remain fairly muted amid current cooling measures.

Two hundred and forty-two resale non-landed private homes changed hands in February.

This is down by 22.2 per cent from a year ago, and the lowest monthly sales number since December 2008.

When compared to January 2014, when 287 units were transacted, the drop was 18.5 per cent.

It is also the fourth consecutive month of decline, hurt by property cooling measures which are currently in place.

Colin Tan, director and head of research & consultancy at Suntec Real Estate Consultants, said: "In a normal year, you would expect some resale due to upgrading, but what happens is that a lot of these upgraders, or potential upgraders, are staying put.

"(This is) partly because of cooling measures, which require upgraders to pay the stamp duty first, and then after they sell the existing unit, to claim it back. It is burdensome and they have to come up with cash resources which could be used for, let's say, renovation. Sales will continue to be weak, but this is not sustainable."

The SRX numbers showed that overall prices have also declined, dropping by 2 per cent month-on-month, led by homes in the city area.

According to the SRX Property Resale Index, prices of homes in the city dropped 3.9 per cent, followed by suburban home prices, which decreased 1.8 per cent. City fringe homes, however, saw resale prices climbing by 0.4 per cent.

The last time the Resale Index for the Core Central Region fell more than 3.9 per cent was in March 2012, when it fell by 4.7 per cent after the introduction of the first Additional Buyer’s Stamp Duty cooling measure on 8 December 2011.

Mr Tan said: “They are freehold and they appeal more to foreigners, and since the Additional Buyer’s Stamp Duty has been imposed, the market has softened slightly.

“The local market also doesn't help because these units are fairly big, 2,000 square foot and above. Even though dollar per square foot comes down, it is still quite a substantial amount, maybe 2-3 million. So that is really beyond affordability for most locals."

Property consultancy OrangeTee said prices could fall by up to 5 per cent for 2014, and that the resale market will remain soft amid current cooling measures.

Christine Li, head of research & consultancy at OrangeTee, said: "The current housing policies still favour new home sales, especially in a weakening rental market. A lot of investors will not consider buying a resale home because they have to compete with other landlords to get tenants, and the number of tenants are actually shrinking because of government policies on manpower.

“We think that investors will not come back to the resale market unless rentals show some drastic improvement in the coming years."

In terms of rental prices, the SRX data showed that overall rental prices fell by 1.0 per cent in February, after a 1.2 per cent gain the previous month.

The largest decline of 1.9 per cent was for property in the city fringe area. This was followed by a 1.3 per cent decline in suburban areas. Rentals in the Core Central Region fell by 0.6 per cent. 

- CNA/nd/ms

Private home resale volume lowest in more than five years

Source: Today Online / Business

SINGAPORE — The resale market continued its downward trend as sales of previously-owned private homes last month slumped to their lowest level in more than five years, a further indication of the impact the cooling measures have had in dampening demand.

Flash estimates by the Singapore Real Estate Exchange (SRX) yesterday put the overall resale volume of non-landed private homes at 242 units last month, down 18.5 per cent from January and 22.2 per cent from a year earlier.

The data, which shows the lowest monthly resale volume since December 2008, illustrates the impact of cooling measures, analysts told TODAY.

They added that resale prices, which dipped after two consecutive months of growth, will see a further correction this year, although the decline will be marginal.

The weak demand is a continuation of the market trend last year, when resale volume dropped by 50 per cent, said PropNex CEO Mohamed Ismail. “More sellers are not motivated to dispose of their properties, as the cooling measures mean some of them will not be able to buy properties after they sell because of the stringent restrictions,” he said.

Sellers are also unwilling to budge on pricing, noted OrangeTee’s Head of Research Christine Li.

“Sellers will look at developers’ recent land bids — which were bullish — and think that the current price level is sustainable,” she said. “So they are not in a rush to sell or cut prices, creating a mismatch of expectations between sellers and buyers, whose appetites may be capped by the total debt servicing ratio and the additional buyer’s stamp duty.”

The SRX data also showed overall resale prices declined 2 per cent last month, following a gain of 1.1 per cent in December and 1.9 per cent in January.

The biggest price drop last month was in the core central region at 3.9 per cent, while prices in the rest of the central region rose 0.4 per cent.

Against this backdrop, analysts said they expect resale prices to dip marginally this year. “In 2013, despite all the government measures, we still had a positive growth of 1.1 per cent in resale prices. This year, at best, we will see a marginal correction of 5 per cent,” Mr Ismail said. Ms Li said she expects a 2 to 5 per cent softening in the new and resale markets.

And with close to 100,000 units of new private homes expected to be released over the next three to four years, based on Urban Redevelopment Authority data, “supply will be greater than demand and buyers will have more choices and stronger bargaining powers”, said SLP International’s Executive Director of Research, Mr Nicholas Mak.

“That means sellers will be more willing to negotiate prices going forward”.

-By Wong Wei Han

Three adjoining Bukit Timah freehold properties up for sale

Seller expects offers above $45m for site with combined land area of 25,425 sq ft

Source: Business Times / Property

[SINGAPORE] Three adjoining freehold properties along Queen's Road and Duke's Road are up for tender, with the seller expecting offers above $45 million.

The residential site in Bukit Timah has a combined land area of 25,425 square feet. With a plot ratio of 1.4, it can yield a maximum permissible gross floor area of 35,595 square feet.

Knight Frank, the site's marketing agent, assumes a $5.8 million development charge for redeveloping apartments with a gross plot ratio of up to 1.4, which translates to $1,430 per square feet per plot ratio (psf ppr).

The District 10 site offers double frontages of 42 metres' width onto both Queen's Road and Duke's Road.

-By Jaira Koh

City Square Mall bags global green award

Cited for environmental, energy design by US body

Source: Business Times / Property

[SINGAPORE] City Square Mall, honoured by the Building and Construction Authority (BCA) of Singapore for being an environmentally- friendly building, has now won a globally recognised award.

It is the first mall here to win the Leadership in Environmental and Energy Design Gold Certification in the category for existing buildings, with the accolade awarded by the US Green Building Council.

It has been reported that the water and energy-efficient City Square Mall collects rainwater on its roof for the watering of plants. In its first year of operation, its green-building features were said to have saved more than 20,000 cubic metres of water, roughly the volume of 10 Olympic-sized swimming pools.

Over the years, the mall has also significantly reduced its power consumption. Its developer City Developments said that the building saves an estimated 11.4 kilowatt hour of energy a year, or close to $3 million.

Liveability standards need to take in residents’ social & emotional needs, say experts

Experts at a conference on Monday said Singapore may rank well when it comes to factors like the economy, security and infrastructure, but not as well in meeting the social and emotional needs of residents.

Source: Channel News Asia / Singapore

SINGAPORE: Just how liveable is Singapore?

Experts at a conference on Monday said Singapore may rank well when it comes to factors like the economy, security and infrastructure, but not as well in meeting the social and emotional needs of residents.

With the country's changing demographics, they said there now needs to be a different yardstick to measure quality of life.

Speakers at the conference said liveability goes beyond just meeting physical needs. Sometimes, it is about managing expectations.

Gerard Ee, chairman of the Council for Third Age and the Public Transport Council, said: “More and more people, I feel, are not distinguishing between a ‘need to have’ and a ‘nice to have’.

“So I always wonder with the size of apartments in Singapore, why anybody ever has a need for a 42-inch or even larger TV screen? That is their aspiration -- to have as large a screen as possible, a smart TV -- getting the latest and the best.

“So unless one begins to distinguish and (determine) the things (one) really needs to have and measures that, and determines that as affordability, I don't think we will get the answer."

As Singapore progresses, coupled with its changing demographics, the speakers added that the measurement of liveability must take into account less tangible needs.

Professor David Chan, director of Behavioural Sciences Institute at Singapore Management University, said: "There are issues about demographics, there are issues about integration, there are issues of social habits… therefore we need to pay attention to the social behavioural issues underlying all these sentiments."

A pivot towards the social and emotional needs of residents may be needed. The speakers all agreed there is room for the community itself to step up to cater to this.

Laurence Lien, CEO of National Volunteer and Philanthropy Centre, said: "There are a lot of opportunities for greater social capital, more social trust, and for citizens to get together to do things for one another, for the community.

“We don't see a lot of community ownership by citizens and residents and they are not creating new (ground-up) initiatives sufficiently."

Mr Lien added that the government needs to do less and the citizens need to be empowered more.

He said: "It needs to start with a mindset shift because citizens have been very dependent on the government on all aspects of life. This has to shift.

“We need to invest in more community facilitators. These are paid full time staff who are skilled at mobilising people at the community, working with interested people -- the connectors (and) the initiators encouraging them, giving them, perhaps, seed money to start initiatives from little experiments. Some may become models for others. I think we can build a movement of ground-up initiatives."

The shift in mindset comes with risks, but also a sense of ownership. Professor Chan called the concept the "home-in-community" concept, where Singapore is home to everyone, regardless of nationality, race, and social status.

Professor Chan said: "It is a concept that allows for commonality across people of different grouping, no matter how you slice them. It's important because you want people to live, work and play and have a high quality of life -- everybody that's physically in Singapore."

And this is where, he said, the government will have to put social issues at the forefront of any policy.

One question that came up during the conference was whether there is a tipping point to Singapore's population growth?

The answer is "yes", but speakers said they cannot give a number. What is important, they said, is for scenario planning to also take into account social issues.

Professor Chan said: "We need to think upfront so that we do not get ourselves caught in certain situations where if we want to reconcile differences or deal with them, it's a bit too late."

- CNA/gn

Record high collection in stamp duties

Source: Straits Times

A record amount in stamp duty poured into the nation's coffers last year. This was achieved even though new home loan restrictions introduced in June put a damper on the taxman's collection of additional buyer's stamp duty (ABSD) on property purchases.

Making all the right turns in housing

Source: Straits Times

It is not often that a Cabinet minister cites the lyrics of a pop song in Parliament. So, when National Development Minister Khaw Boon Wan quoted a line from Stephanie Sun's Mandopop hit To Meet (yu jian) yesterday, a few giggles could be heard in the House. "Turn left, turn right, go forward (xiang zuo, xiang you, xiang qiankan)," he chimed, referring to the need for caution in Singapore's housing policies.

Khaw, Zen and the art of motorcycle parking charges

Source: Straits Times

Right now, valuations in a rising market serve as a check on prices. If a flat is valued at $400,000 and sells for $500,000, the buyer knows he is paying a premium. Even though the HDB website does not show each flat's COV, the agents will know and will inform other buyers about prevailing COVs for units sold recently. As few buyers are willing to pay very high COVs, a single high transaction has limited ability to influence prices of other flats, if the COV is transparent.

HDB overhauls system for resale transactions

Buyers now need to obtain the option to purchase before asking for valuation through HDB

Source: Business Times / Top Stories

[SINGAPORE] The Housing Development Board (HDB) is overhauling the procedure for resale HDB transactions in a bid to shift the focus from cash-over-valuation (COV) to market prices when negotiating resale prices.

It is requiring buyers to first obtain the option to purchase (OTP) before asking for a valuation through HDB - and it will not accept valuation requests from sellers.

This pushes buyers and sellers into negotiating resale prices based on the latest transacted prices, instead of haggling over the COV as is done now.

Minister for National Development (MND) Khaw Boon Wan said in Parliament yesterday: "The HDB will rationalise the process of price negotiations and restore the original intention of 

valuation - which is to help buyers obtain a housing loan."

Negotiating resale prices based on COV was "an anomaly unique to the HDB resale market"; doing so based on price instead will take some getting used to, but is a useful move for the sake of long-term market stability, he said.

With the change, buyers who are granted the OTP will have 21 calendar days - up from 14 - to exercise the OTP.

At the same time, HDB will start posting daily prices of resale transactions on HDB InfoWEB as soon as they are registered, instead of fortnightly.

Since 2007, HDB has been publishing the COVs as a service to people shopping for flats with lower COVs, but sellers started using the published COVs as benchmarks to bargain for even 

higher COVs.

Sellers or their sales agents had been typically requesting HDB valuations and then negotiating resale prices with prospective buyers of their flats based on COV, which is the cash premium that buyers would pay in excess of the valuation.

Changing the resale procedure will bring the practice in the HDB resale market in line with the private housing market, as some Members of Parliament have lobbied for in the past.

A HDB spokeswoman said that the board will still publish COV data by town every quarter on the HDB InfoWEB, but it will monitor reactions to the new measures and assess whether it remains meaningful to do this.

Property consultants noted that the present low COVs provide a good opportunity for the new resale process to be introduced without major protests from sellers.

Nicholas Mak, the head of research at SLP International, said that the "preoccupation with COVs as a basis for price negotiations could lead to more turbulent market behaviour, with larger upswings or downswings".

But Mohd Ismail, the chief executive of PropNex Realty, cautioned that buyers may be more vulnerable to a greater cash outlay under the new procedure if there is a gap between the agreed price and the valuation price. "Buyers will become more cautious in their offer price as they enter into a purchase without an indication of how much the property is worth," he said.

On the likelihood that there may be sellers who may still fish for valuation reports through the HDB, the board said that it will monitor the new resale procedures.

The HDB spokeswoman said: "If there are salespersons who try to game the system to obtain valuations, we will carry out relevant investigations, together with the Council for Estate Agencies (CEA)."

ERA Realty key executive Eugene Lim said that the new procedure was unlikely to be abused, given that the name of the buyer seeking a valuation report has to be the same as the one on the OTP.

Referring to the measures to cool the property market, Mr Khaw told Parliament that there were signs that the market was "turning the corner", but that it was still premature to withdraw the measures.

The government is moderating both the Build-to-Order (BTO) programme and Government Land Sales. More than 77,000 BTO flats have been launched in the past three years, of which 14,000 units were completed last year; 28,000 units will be handed over this year.

The tightening of the property market here has already led some Singaporeans to look for foreign properties.

Mr Khaw counselled caution, as there are added risks and complexities arising from different legal and regulatory frameworks operating outside Singapore.

The CEA will launch an online guide for those thinking of buying a foreign property. It will also step up its effort to regulate estate agents marketing overseas property developments here.

-By Lynette Khoo

HDB moves to reduce focus on COV

Source: Channel News Asia / Singapore

SINGAPORE: To reduce the focus on Cash-Over-Valuation (COV) in negotiations during the sale of a flat, the Housing and Development Board (HDB) will only accept valuation requests 

from resale flat buyers after they have been granted an Option to Purchase by flat sellers.

National Development Minister Khaw Boon Wan, who announced this change in Parliament on Monday, said this will restore the original intention of valuation, which is to help buyers obtain a housing loan. This change took effect from 5pm on March 10.

Mr Khaw said: "HDB will rationalise the process of price negotiations and restore the original intention of valuation, which is to help buyers get a housing loan.

"Negotiating based on price rather than COV will take some getting used to. However, it is a useful move for long-term market stability."

The HDB will also publish daily prices of resale transactions as soon as they are registered, aimed at getting negotiations to focus on recent transaction prices and reduce the focus on COVs. Currently, resale prices are published twice a month.

The change is timely, with many HDB resale flats being sold at or below valuation, said the government.

More than a third (36%) of resale transactions last month were priced below valuation.

Prices in the public housing resale market have seen a period of high growth in recent years.

But prices declined in the third quarter of last year, a first in four years, after a slew of property-cooling measures were introduced.

Some property analysts say changes in the behaviour of buyers and sellers will take time.

PropNex CEO, Mohamed Ismail, said: "This immediate implementation of such a rule will likely create a more conscious effort in the minds of buyers in particular - 'Am I paying the right price? Will I be affected by any of these valuation that did not match up to the price that I've agreed?'

"And in that instance, probably we will also see many of the options being not exercised when there is a gap in the expectation of the buyer's valuation and the actual valuation."

If the buyer does not exercise his option, he will lose his deposit of up to a thousand dollars. 

So buyers have to plan ahead.

ERA Realty Network's key executive officer, Eugene Lim, said: "Before the buyer goes house hunting, he should actually clear the part about how much loan he is able to get - applying for the HLE (Loan Eligibility) letter from HDB, if you're taking a loan from HDB. Or, if you're taking a bank loan, you should speak to a banker to have an in-principle approval on an approximate loan amount you can get. 

"So with the approved amount, it basically gives you an idea of the price of the property that you are looking at."

Mr Mohd Ismail also noted that COV could continue to be a point of reference in estates where resale flats are still being transacted with a cash premium.

"Even though we say you can't do a valuation, that doesn't stop sellers from taking reference from the COVs of the neighbouring flats. And I'm sure that the private organisations and portals are still feeding this information. As I said, old habits die hard and it will take some time," he said.

On the government's property-cooling measures, Mr Khaw said it would still be premature to withdraw them as prices are still rising albeit at a slower rate.

He added the government will continue to monitor the market closely.

To further protect property buyers, the Council for Estate Agencies (CEA) will launch an online guide to provide general tips to consumers who are thinking of buying a foreign property.

The CEA will also step up its effort to regulate estate agents marketing overseas property developments in Singapore. Mr Khaw advised members of the public to report to the CEA any marketing activities by unlicensed foreign estate agents so that the CEA can investigate and take appropriate actions.

Addressing some MPs' concerns about more Singaporeans turning to property investments overseas, Mr Khaw said the government does not interfere with such investment decisions. But he warned that it is a case of buyer beware.

Mr Khaw said: "But I share the concerns of Mr Seah Kian Peng and Mr Liang Eng Hwa. I echo their words of caution. Property markets move in cycles. For foreign properties, there are added risks and complexities, because their legal and regulatory frameworks governing the purchase and financing agreements are different from ours. 

"And they may change suddenly when domestic politics pushes for a change in policies. Do go in with your eyes open."


HDB resale: Parties must agree on price before valuation

Analysts see move as a step towards controlling prices of resale flats in bull runs

Source: Today Online / Singapore

SINGAPORE — With effect from yesterday, buyers and sellers of Housing and Development Board (HDB) resale flats will have to agree on a price before getting an official valuation, in contrast to the previous long-standing practice where negotiations were determined by a unit’s valuation report and how much a buyer was willing to pay above valuation.

Analysts described the move, which was announced by National Development Minister Khaw Boon Wan yesterday, as a step towards preventing HDB resale prices from spiralling upwards during a property bull run.

Until recently, when cash-over-valuation (COV) premiums started to fall, there had been calls for the Government to scrap the practice where sellers obtain a valuation report for their flats and use it as a base price to negotiate with buyers on the final amount which the latter is prepared to pay above the valuation. But Mr Khaw had previously pointed out that COV is a decision made between buyer and seller, and scrapping it would only lead to “under-the-counter” deals.

Nevertheless, “with COVs hitting zero or negative, now is a good time to make the adjustment”, Mr Khaw said yesterday during the Ministry of National Development’s (MND) Committee of Supply debate.

Median COV premiums have been falling in recent months. Last month, more than a third of resale transactions were priced below valuation, he said. The property market is at a turning point and there have been opposing views on whether cooling measures should be withdrawn, he noted. “While we have re-tilted the balance between buyers and sellers, we are not yet at the optimal state. We will continue to watch the market closely.”

Under the new process, the HDB will only accept valuation requests from resale flat buyers or their appointed salesperson after the buyers have been granted an Option to Purchase (OTP) by flat sellers. Buyers will then have 21 days, instead of 14 days, to exercise the OTP. The changes will apply to all buyers who were granted the OTP after 5pm yesterday.

The HDB will publish daily prices of resale transactions as soon as they are registered, instead of fortnightly after the resale transactions are approved. This will allow flat buyers and sellers to negotiate based on recent transaction prices and reduce the focus on COV in negotiation, the MND said. “This will improve the long-term stability of the resale market,” it said.

Mr Khaw said the new process — which is in line with the practice in the private property market — would restore the original intention of valuation, which is to help buyers obtain a housing loan. While sellers could still demand a premium — above the recent transacted prices — analysts noted that buyers would now command greater bargaining power. Mr Nicholas Mak, Executive Director for Research and Consultancy at property firm SLP International, said that previously, in periods when COVs were high, sellers and buyers would adjust their COV expectations upwards, which further reinforced the upward price spiral.

Propnex Realty CEO Mohamed Ismail added: “Buyers will become more cautious about their offer price as they enter into a purchase without an indication of how much the property is worth.” Pointing out that buyers in the private property market could get an indicative valuation from banks before entering into an OTP, he warned that a buyer could be required to pay more cash than expected if the agreed price is higher than the valuation price.

Civil servant Jasmine Li, 25, who is looking to buy a resale flat with her fiance, said she would not be comfortable agreeing on a price based on recent transaction data, which could fluctuate due to government cooling measures, for example. It would be helpful if there were some indicative valuation she could refer to, she said.

But Mr Colin Tan, Head of Research and Consultancy at Suntec Real Estate Consultants, pointed out that all parties in a transaction would take into consideration the same attributes of a resale flat and thus the agreed price and valuation price would not be vastly different. Typically, the difference should not be more than 15 per cent higher or lower, he estimated. “Now that the prices are updated daily ... the valuers have more up-to-date data to work with and this should mitigate any gap in the price and valuation,” he said.

-By Sumita D/OSreeharan

Govt takes another look at reverse mortgage scheme

It is also extending Lease Buyback option to larger flat types

Source: Business Times / Singapore

THE government will revisit reverse mortgage as an option for the elderly to monetise their HDB flats, and extend the Lease Buyback scheme to larger flat types.

Minister for National Development Khaw Boon Wan told Parliament yesterday that reverse mortgage as an option came up during dialogues with the elderly when the low take-up for the Lease Buyback scheme was discussed.

Reverse mortgages are loans taken out by the owner using his property as collateral and repaid with interest upon termination or death, typically from the sales proceeds.

Like lease buyback, reverse mortgage is a form of equity release that enables the property owner to age-in-place while unlocking some equity.

-By Lynette Khoo

Govt studying reverse mortgage as means to help elderly

Source: Channel News Asia / Singapore

SINGAPORE: The government is seriously studying the reverse mortgage scheme as an additional option to help the elderly in Singapore monetise their flat.

Under a reverse mortgage, the owner retains the full lease of his flat but takes a loan against it as collateral.

The owner then repays the loan with accumulated interest upon termination, or death, usually with sales proceeds from the flat.

The idea of a reverse mortgage was mooted by some participants at "Our Singapore Conversation on Housing" sessions last year.

"Many told us that they want two things: age in place and… to have an asset they can bequeath to the family," said Minister for National Development Khaw Boon Wan.

With a better understanding of the needs of seniors and experience in other monetisation schemes for the elderly -- like the Lease Buyback Scheme that allows the elderly to sell back part of their existing lease to HDB while retaining a 30-year lease -- Mr Khaw said it is timely to revisit the option of reverse mortgages.

However, he also noted it is something that NTUC Income had tried in 2006 but it did not quite take off.

"We hope to formulate a practical scheme for our elderly. Along the way, we will also see if the Lease Buyback Scheme can be further improved -- as suggested by some members here -- to be extended to larger flat types," said Mr Khaw.

Looking at the year ahead, Mr Khaw said he plans to have more conversations with Singaporeans on the relationships and values they hold dear as a society and how housing policies can better support them.  

- CNA/ec

Govt begins serious study on reverse mortgages

Source: Today Online / Singapore

SINGAPORE — The Government has begun a serious study on reverse mortgages as a means for elderly Singaporeans to retire comfortably, said National Development Minister Khaw Boon Wan in Parliament yesterday.

Speaking at the Committee of Supply (COS) debate for the Ministry of National Development (MND), Mr Khaw said it was “timely to revisit (the) reverse mortgage as an additional option for our seniors”.

During the Our Singapore Conversation exercise, some elderly Singaporeans had called on the Government to offer reverse mortgages and expressed their wish to age-in-place, that is live in a residence of their choice, and retain an asset that they could bequeath, said Mr Khaw. Reverse mortgages allow homeowners to pledge their property for a sum, which then provides a regular monthly income.

The minister also said the MND was reviewing the Enhanced Lease Buyback scheme to see if it could be extended to larger flat types, as suggested by several Members of Parliament (MPs).

The scheme allows the elderly to sell part of their flat’s lease back to the Housing and Development Board (HDB).

Both schemes would allow senior homeowners to keep their homes and unlock some of the equity from their property.

In 2006, the Government allowed HDB homeowners to take up reverse mortgages. At the time, NTUC Income was the only financial institution to offer the product to elderly Singaporeans. Unlike conventional mortgages, however, homeowners do not need to repay a reverse mortgage until they die or sell their home.

This financial option for HDB homeowners was axed a few years back due to cool demand, while the lease buyback was introduced in 2009 and later enhanced.

Analysts TODAY spoke to welcomed the return of reverse mortgages for HDB homeowners, but the process of helping senior citizens understand how it works could be a “long and arduous” one, said Mr Ku Swee Yong, Chief Executive of Century 21.

“First, we must account for the fact that their average education level is lower. Second, are we able to explain these packages effectively in dialects to them?” he asked.

Many senior citizens want to bequeath their homes to their children, but they need to be educated on the differences between the reverse mortgage and lease buyback schemes, said Mr Chris Koh from property consultancy Chris International.

Although the elderly would be able to keep their homes if they repaid their reverse mortgage loan, the flat’s lease is effectively sold to the Government under a lease buyback scheme, said Mr Koh.

Meanwhile, several MPs rose to express concern over housing options for vulnerable groups during the COS debate yesterday. MP (Nee Soon GRC) Lee Bee Wah suggested that the ministry remove all forms of waiting period for divorcees with children, while MP (Marine Parade GRC) Seah Kian Peng said it should seek the local Community Development Council’s input when evaluating an applicant’s housing needs.

In response, Mr Khaw said the Government has begun to focus on helping those in vulnerable groups, especially divorcees with children, given that the backlog of first-time applicants for Build-To-Order HDB flats has been cleared.

The ministry will study Dr Lee’s and Mr Seah’s suggestions and will continue to exercise flexibility and compassion whenever it receives worthy cases from MPs, said Mr Khaw.

-By Xue Jianyue

Facelifts for three more HDB towns

Source: Straits Times

Three more Housing Board towns will get facelifts under a scheme to make new and old estates more vibrant. The Ministry of National Development is choosing these towns, and will announce them in a few months, said Senior Minister of State Lee Yi Shyan.

Ministry to seek ideas on protecting Pulau Ubin

Source: Straits Times

Lovers of Pulau Ubin will be asked to give their ideas on how the popular island can be protected and enhanced. The Government hopes that a wide range of people, from island residents to interest groups and experts, will give their views in an upcoming consultation announced in Parliament yesterday.

New online guide on buying foreign property

Source: Straits Times

Singaporeans looking to buy property overseas can get advice later this month from an online guide drawn up by the Government. The Council for Estate Agencies will launch the guide to give some general tips to people thinking of doing so, National Development Minister (MND) Khaw Boon Wan said yesterday.

JTC names tender winners of 4 sites

Source: Business Times / Singapore

JTC names tender winners of 4 sites

JTC Corporation has awarded the tender for four industrial sites at Tuas and Woodlands which closed yesterday. A total of 19 bids were received for all four sites. The 7,432.1 sq m plot 33 at Tuas South Street 11 was awarded to United Hudson Investment for $4.8 million. United Hudson Investment also secured the 7,177 sq m plot 37 site at Tuas South Street 11 for $5 million. Plot 36 at Tuas South Street 13, a Business 2 site spanning 7,431.7 sq m, was awarded to Quek & Quek Civil Engineering for $7.4 million. Woodlands Industrial Park E9 was awarded to Vantage Properties for $56.2 million. This site has an area of 18,394.1 sq m, a gross plot ratio of 2.5 and a tenure of 30 years.

Ascendas, Ping An unit sign partnership MOU

BUSINESS space solutions provider Ascendas Pte Ltd has signed a memorandum of understanding with Ping An Trust, a wholly owned subsidiary of Ping An Insurance (Group) Company of China, for a strategic partnership to cooperate in the real estate sector in China and other key Asian markets. The two parties will cooperate in broad ranging areas, which includes exploring co-investment opportunities and setting up of yuan-denominated funds. Both parties will also explore the potential of Ping An Group leasing space in Ascendas properties.

Real Estate Companies' Brief

UEL unit sells stake in Suzhou property devt firm

Source: Business Times / Companies

WBL Corporation Limited (WBL) is selling its 78 per cent stake in Suzhou Industrial Park Jian Wu Heng Ye Property Development Co Ltd (JWHY) to Genway Group for 490 million yuan (S$101.2 million). WBL is a 67 per cent-owned subsidiary of United Engineers Limited (UEL).

This sale is being done through WBL's wholly owned subsidiary, Shenyang Huaxin International Realty Co Ltd.

The divestment will take place in three phases, with the full 78 per cent stake being transferred and paid for by Sept 25 this year. The estimated post-tax gain from the divestment of JWHY stands at about $14 million after making a provision for transaction costs, UEL said.

The proceeds from the sale will be used for the repayment of bank borrowings and working capital purposes.

-By Joyce Hooi

Ascendas ties up with China wealth management company

Source: Straits Times 

Business park developer Ascendas has signed a memorandum of understanding (MOU) with a Chinese wealth management firm. Ascendas and Ping An Trust, a wholly owned unit of Ping An Insurance (Group) Company of China, have agreed to work together in the real estate sector in China and other key Asian markets.

Views, Reviews and Forum

Keep HDB loan rate lower than banks'

Source: Straits Times

Is the Housing Board's concessionary interest rate loan really "concessionary"? The loan was intended to help lower-income flat buyers service their mortgages at a lower interest rate, compared with the HDB's market rate mortgage loan, which it stopped offering about a decade ago.

The price of rising cost pressures

Source: Straits Times

One league table that Singapore did not wish to see itself at the top of was the ranking of the world's most expensive cities. Having been given the dubious honour by a British media organisation, the country will now have to live down this unfortunate label. Quite rightly, this has been described, in official and private circles, as misleading. In contrast, Mercer's 2014 quality of living index which also measures costs placed Singapore as tops in Asia, but 25th overall.

Global Economy & Global Real Estate

Wanted: China tenants for UK business district

Source: Business Times / Property

[LONDON] The developer of a huge business district in northern England is planning a roadshow through cities such as Beijing and Shanghai to attract Chinese tenants to Manchester. 

China's Beijing Construction Engineering Group (BCEG) says that the project is the biggest in Britain since the 2012 Olympics and believes it could help move the centre of economic gravity away from London.

Last October, BCEG announced that it would become a 20 per cent partner alongside construction group Carillion and the Greater Manchester Pension Fund to develop an £800 million (S$1.7 billion), five million square foot business district at Manchester airport, Britain's third busiest.

Its choice of Manchester marks a departure from the path taken so far by most Chinese property developers, such as Advanced Business Park, that have headed first to the capital, where demand for space has stayed strong through the downturn compared to the rest of the country.

"The project itself by size is the biggest development project since the London Olympics . . . I think the way people do business in the UK, particularly in the north-west, will be changed because of this project," Xing Yan, BCEG International managing director, told Reuters.

-From London, UK

Poland's mortgage rates on the rise

Banks turn to more profitable consumer credit as demand for home loans falls

Source: Business Times / Property

[WARSAW] Poland's slowest economic growth in four years is eroding demand for home loans, prompting banks to increase mortgage rates as lenders refocus on more profitable consumer credit.

New home loans declined 7 per cent to 36.5 billion zloty (S$15.3 billion) last year, the least since 2005, data from the country's banking association show.

The average rate on mortgages rose to 5.2 per cent in December, the first increase in 18 months and compared with 3.3 per cent for a home loan in the euro area, according to latest figures from the Polish and European central banks.

Home loans, which jumped almost seven-fold over eight years, triggering a price war among lenders, are decelerating as Poland's domestic demand shrank in six of the last eight quarters.

-From Warsaw, Poland

Bid for Morrison: Firms await review's outcome

UK grocer estimates its freehold property is worth about £9b

Source: Business Times / Property

[NEW YORK] Buyout firms CVC Capital Partners Ltd and Carlyle Group LP are awaiting the outcome of Wm Morrison Supermarkets plc's property review this week as they evaluate a bid for the UK grocer, said people familiar with the matter.

The value of the real estate has been emphasised by the buyout firms meeting banks to discuss financing for a potential buyout, said two people, who asked not to be identified because they weren't authorised to speak publicly.

Morrison estimates its freehold property is worth about £9 billion (S$19 billion), exceeding its market capitalisation of £5.5 billion. The company is due to announce the results of the review when the Bradford, England-based retailer reports annual results on Thursday.

CVC and Carlyle were approached about working with members of the founding family of the 115-year-old company, people familiar with the matter told Bloomberg last month. A buyout would exceed £7 billion and require a group of funds to work together, they said then.

-From New York, US

TPG to sell 56 farm properties of Ingham

Source: Business Times / Property

[SYDNEY] Private equity giant TPG plans to sell 56 farm properties of Australia's largest poultry firm, Ingham Enterprises, for up to A$650 million (S$744.6 million), a property agent responsible for the sale told Reuters.

The sale comes a year after TPG bought most of Ingham for A$880 million, according to local media. It also signals TPG's preference to exit assets without public listings despite improved market conditions.

"We've got all the largest pension funds and sovereign funds in the world expressing interest," said CBRE agribusiness director Danny Thomas, who is running the sale.

The deal would be structured as a 20-year leaseback of two portfolios of processing plants, feedmills, hatcheries and breeder farms.

-From Sydney, Australia

NY property tax system seen as inequitable

It undervalues homes of the rich, shifts heaviest tax burden to the poor

Source: Business Times / Property

[NEW YORK] Mayor Bill de Blasio's vision of raising income taxes to pay for pre-kindergarten and after- school programmes would generate US$530 million a year. By revamping property taxes - and taking on some of New York's richest residents - he could get eight times as much.

Mr De Blasio, a self-described progressive Democrat, was elected on a promise to reduce income inequality in a city where the richest one per cent took home almost 40 per cent of all earnings in 2012.

New York's property tax structure does little to reduce that divide and may even widen it.

The real estate levy, the city's biggest revenue source, uses a methodology that undervalues condominiums on Park Avenue, Central Park West and other enclaves of the wealthy; limits tax increases for owners in brownstone neighbourhoods such as Greenwich Village and Park Slope; and shifts the heaviest burden to renters, many of them poor.

-From New York, US

Dubai firm to build 1m homes in Egypt

Source: Business Times / Property

[CAIRO] Arabtec Holding, Dubai's largest listed construction firm, has agreed with the Egyptian army to build one million houses in a project worth 280 billion Egyptian pounds (S$50.9 billion), it said in a statement on Sunday.

The project, one of the biggest in the region, is seen as a boost to the country of 85 million people which has been struggling to attract tourists and foreign investors amid political turmoil, and saw its foreign reserves drop to a critical low last year.

It will cover 160 million square metres across 13 sites in Egypt for lower-income individuals. The company said that it expects work on the project to start in the third quarter of this year and be completed before 2020.

The firm did not say how the project will be financed but Hasan Ismaik, Arabtec's chief executive, told Reuters on the sidelines of a press conference in Cairo that the land will be given for free. He added that there will be an agreement with around 40 banks in Egypt to provide financial facilities for limited-income individuals.

-From Cairo, Egypt

Rebuilding work still bogged down in red tape

Source: Straits Times

U.S. Projects $179 Billion Profit From Fannie Mae, Freddie Mac

Source: Bloomberg / Personal Finance

Fannie Mae and Freddie Mac could return $179.2 billion in profits to taxpayers over the next 10 years if they continue operating under federal conservatorship, according to White House budget analysts.

The U.S.-owned mortgage-finance companies, seized by regulators during the 2008 credit crisis, have returned to profitability as the housing market recovers. By the end of this month, they will have sent $202.9 billion back to the Treasury, which counts as dividends on the U.S. investment and not repayment of the $187.5 billion they got in taxpayer aid.

The projections, released today as part of an annual analysis prepared by the Office of Management and Budget, show an increase from last year, when budget writers forecast a $51 billion profit from Washington-based Fannie Mae (FNMA) and McLean, Virginia-based Freddie Mac (FMCC) through 2023.

Congress is working on legislation to wind down and replace the two companies. Investors in the two companies including hedge fund Perry Capital and mutual-fund firm Fairholme Capital Management have sued the U.S. challenging an arrangement in which the government takes all of the companies’ quarterly profits as dividends.

-By Clea Benson

Developers Slump as Yuan Drop Closing Fund Window: China Credit

Source: Bloomberg / News

Volatility in the yuan is raising dollar borrowing costs for Chinese developers already choked by a domestic property-market crackdown and slowing sales.

Real-estate companies accounted for six of the 10 worst performers in Asia’s high-yield dollar debt market in the past month, according to a Bank of America Merrill Lynch index. The yield on Glorious Property Holdings Ltd.’s bonds due 2015 jumped 266 basis points, while that on Fantasia Holdings Group Ltd.’s 2017 notes rose 75 basis points, data compiled by Bloomberg show. The Shanghai Stock Exchange Property Index tumbled 8.9 percent, compared with a 2.7 percent drop in the benchmark.

The yuan’s record 1.4 percent slump last month as the central bank seeks to end one-way appreciation bets is narrowing one of the few remaining funding windows for developers, after a ban on onshore bond sales, limits on domestic bank loans and a crackdown on trust lending. New home price gains slowed in January, and Shanghai-based Glorious Property posted a 50 percent on-year drop in contract sales so far in 2014.

The yuan’s depreciation “has increasingly become a risk because it’s very clear the government wants it to trade two-way,” said Jinsong Du, head of property research at Credit Suisse Group AG in Hong Kong. “People need to price in that risk. You also have weakening sales and the government tightening money supply.”

More Volatile

A person who identified herself as a representative of Glorious Properties’ public relations department said in a phone call that the official spokesman wouldn’t speak on the matter because it is now the blackout period in China which restricts comments before earnings are reported. An external public relations agency for Fantasia said after two phone calls that executives were not available for comment.

The yuan’s 12.8 percent gain in the last five years prompted Chinese developers to issue $60.9 billion of bonds denominated in the greenback or in Hong Kong dollars. For example, 87 percent of the total debt of China Overseas Land and Investment Ltd., the biggest mainland developer traded in Hong Kong, are in the U.S. and Hong Kong currencies, according to Credit Suisse estimates. A call and an e-mail to China Overseas seeking comment weren’t returned.

Yuan Declines

The yuan, whose moves are restricted to 1 percent on either side of a daily reference rate set by the People’s Bank of China, slid 0.26 percent to 6.1440 per dollar as of 10:38 a.m. in Shanghai, according to China Foreign Exchange Trade System prices. This came after the monetary authority lowered the fixing by 0.18 percent, the most since July 2012, to 6.1312. One-month implied volatility, a measure of expected exchange-rate moves used to price options, rose 17 basis points this year to 2.02 percent on Feb. 27, the highest since May, according to data compiled by Bloomberg. The gauge was at 1.90 percent today.

The PBOC included an “orderly” broadening of the yuan’s trading band among its 2014 policy goals announced last month. Twenty of 29 analysts surveyed by Bloomberg News in February predicted the move will come next quarter, with 21 seeing the limit widening to 2 percent in its next adjustment.

A March 8 customs report showed exports unexpectedly fell 18.1 percent in February from a year earlier, compared with analysts’ median estimate for a 7.5 percent increase. The cut in the yuan fixing suggests a possible policy push to weaken the yuan to help exporters, said Dariusz Kowalczyk, a Hong Kong-based strategist at Credit Agricole CIB.

Sales Slide

Asia ex-Japan issuers’ sales of high-yield bonds denominated in dollars, euro and yen have dropped to $5.5 billion this year from $9.8 billion a year earlier, according to data compiled by Bloomberg. A Feb. 26 sale by Far East Horizon Ltd., a financial services provider, was the last by a Chinese company before dollar note sales halted amid escalating tensions in Ukraine and as the yuan fell.

The drought may be set to end as Beijing Infrastructure Investment Co. plans to sell securities in the greenback after investor meetings in Hong Kong, Singapore and London from March 10, a person with knowledge of the details said. China Resources Land Ltd. was the last developer to issue bonds in the greenback, raising $1.1 billion from a sale of five- and 10-year bonds on Feb. 20, data compiled by Bloomberg show.

Rising Yields

The average rate on Asian corporates’ high-yield notes in the greenback jumped 26 basis points this year to 7.84 percent, compared with a 21 basis point drop worldwide for similarly-rated firms, according to Bank of America Merrill Lynch indexes.

Issuing offshore bonds generally costs 2 percent less than selling trust loans onshore for developers, leaving a cushion for declines in the yuan, according to Andy Chang, Hong Kong-based analyst at Fitch Ratings.

“Unless the yuan continues depreciating at an abrupt speed, I don’t see immediate pressure,” said Chang. “The lower funding cost they can get in the offshore bond market is still the major influence on their debt-structure decisions.”

The currency’s drop this year is short-lived and will have little impact on the real-estate industry’s long-term borrowing costs, said Yifan Hu, chief economist at Haitong International Securities Co. in Hong Kong. The yuan will probably appreciate 2.9 percent by the year-end to 5.97 per dollar, according to the median estimate of analysts surveyed by Bloomberg.

Property Prices

While the year-end outlook for the yuan remains unchanged from before last month’s plunge, policy changes aimed at cooling property prices have lowered sales. At least 10 Chinese cities, many of them provincial capitals, have tightened curbs since November, with Shenzhen, Shanghai and Guangzhou raising minimum down payments for second homes to 70 percent from 60 percent. New home sales in Shanghai fell 23 percent in February from a year earlier, property consultant Shanghai UWin Real Estate Information Services Co. said last week.

“It’s a tough year for Chinese developers as property sales are likely to be worse and the yuan’s drop will add to higher borrowing costs,” said Yang Xi, a fixed-income analyst at Citic Securities Co. in Beijing. “Investors are demanding a higher premium for rising risks in the sector.”

Real-estate shares tumbled to an eight-month low on Feb. 28 after Industrial Bank Co. said it is delaying loans for such projects. Some developers may default on their debt as property-trust loans worth about 350 billion yuan ($57 billion) are maturing this year, according to Jefferies Hong Kong Ltd.

More Sensitive

Investors have become more sensitive to any short-term indications of tightened funding amid increased leverage and moderating home sales, Barclays Plc analysts Alvin Wong and Jianping Chen wrote in a March 3 report.

The one-year interest-rate swap, the fixed payment to receive the floating seven-day repurchase rate, averaged 4.81 percent this year, compared with 3.8 percent in 2013. The gauge has declined 108 basis points to 4.30 percent today, from this year’s high of 5.38 percent.

Some Chinese developers are likely to have high leverage in the next 12 months after “aggressive” land acquisitions, while uncertainties in financing conditions and economic prospects will temper sales and price increases, Standard & Poor’s Ratings Services said in a March 6 note. It added that the ratings on some developers may face downward pressure as their debt increases may have outpaced property sales growth.

China should start preparing for risks from falling property prices as the sector is connected to about 60 percent of bank assets and liabilities and more than 60 percent of people’s wealth, China News Service reported on March 6, citing PBOC adviser Chen Yulu. The yield on five-year AA- notes leapt 13 basis points in two days to 7.82 percent on March 6, the most in almost four months as Shanghai Chaori Solar Energy Science & Technology Co. indicated it won’t be able to fully pay an 89.8 million yuan coupon due last week on its March 2017 bonds.

The developers should have hedged their foreign-exchange exposure from the very beginning, according to Credit Suisse’s Du. “If you ask them right now, they still think the renminbi will always appreciate. It’s like how some people in the industry believe housing prices will always go up -- it’s the same logic.”

-From Justina Lee and Fion Li

Blackstone Said to Plan $5.5 Billion Gates Global Bid With TPG

Source: Bloomberg / News

Blackstone Group Inc. and TPG Capital are preparing to offer about $5.5 billion for auto-parts and industrial products maker Gates Global Inc., a person with knowledge of the matter said.

Bids for Gates Global, which is being sold by Onex Corp. and Canada Pension Plan Investment Board, are due later this week, said the person, asking not to be identified discussing confidential information.

Gates Global’s owners have been working with banks on a sale or IPO and could fetch $6 billion, people familiar with the matter told Bloomberg in December. The company filed for a U.S. IPO later that month.

Gates, which is based in Denver, was acquired in 1996 by London-based Tomkins Ltd. The British engineering firm was purchased 14 years later for about $4.5 billion by Onex and Canada Pension.

Gates manufactures power transmission belts, fluid products and other industrial equipment for customers such as Deere & Co., Daimler AG and Bombardier Inc. (BBD/B) The company posted sales of about $2.9 billion in the year through September 2013, a December filing for an initial public offering shows.

Spokesmen for Blackstone and TPG declined to comment on their interest in Gates Global, which was earlier reported by the Wall Street Journal. A spokeswoman for Canada Pension also declined to comment, while officials at Onex didn’t reply to phone calls seeking comment.

-From Jodi Xu