Real News‎ > ‎2014‎ > ‎September 2014‎ > ‎

5th September 2014

Singapore Real Estate

Aug HDB resale prices fall 1.1% from July: SRX

This is within consultants' 'soft landing' expectations

Source: Business Times / Property

[SINGAPORE] HDB resale prices likely remained on a slide in August, with latest data from the Singapore Real Estate Exchange (SRX) suggesting a 1.1 per cent drop in resale prices from a month ago.

But this is still within what property consultants would term as "a soft landing" engineered by government cooling measures, with a market consensus that HDB resale prices could drop by 5-8 per cent for the whole year.

Resale prices were also down 7.1 per cent from August last year and 8.6 per cent from the peak in April 2013, based on the SRX data.

According to SRX, buyers paid an average of S$3,000 less than the estimated market value for flats. Three and four-room flats were the main drag for the month-on-month fall, as their resale prices fell 2 per cent and 0.9 per cent respectively in August. The larger flats - five-room and executive flats - turned out to be resilient in August, with their resale prices edging up 0.8 per cent and 1.5 per cent respectively.

-By Lynette Khoo

HDB resale prices slide for seventh straight month

Property curbs, supply of new flats driving down prices, say analysts

Source: Straits Times / Top of The News

THE Housing Board resale market continued its slump, with prices falling for the seventh straight month in August.

Further falls are expected, especially with demand being shackled by property cooling measures, even as new flats continue to enter the market. The slide is nowhere near its end and will continue till the end of next year before things pick up, said analysts.

The resale price index has already dropped 4.8 per cent since the start of the year, but the decline last month was the worst so far this year.

Prices fell 1.1 per cent last month from July. Compared with August last year, resale market prices are down 7.1 per cent, flash figures from the Singapore Real Estate Exchange (SRX) showed.

ERA Realty key executive officer Eugene Lim said that as long as the Government's property cooling measures, such as the 30 per cent cap on the mortgage servicing ratio, are in place, the situation will not change. "Prices will keep sliding," he said.

Analysts said new Build-To- Order (BTO) flats will continue to drive down overall prices in the resale market. "More second-timers are collecting their keys to BTO flats, and they will have no choice but to sell their existing flats, so there will be a surge in supply causing resale prices to go down," said PropNex Realty chief executive Mohamed Ismail Gafoor.

Ramped-up BTO launches in recent years mean a record number of people will collect their keys in the next few years. Mr Lim said: "BTOs are taking away a lot of demand from first-timers and singles for resale flats, which they might still find expensive."

HDB launched 33,568 new flats last year, and is offering about 28,790 units this year. So far this year, 10,247 flats were sold on the resale market, SRX data showed.

SLP International Property Consultants research head Nicholas Mak said the falling prices could draw interested buyers. He noted that the resale volume dipped only slightly from 1,342 in July to 1,327 last month. "Eventually prices will become more attractive and more people will opt for resale flats instead of BTOs."

Hougang resident Aida Ahmad, 40, is confident her four-room flat can still fetch a good price. "I am not worried. My flat is in a mature estate and near the MRT and Hougang Mall. More people will want it," said the housewife.

Rental prices and volume stayed relatively flat, with an estimated 1,550 HDB flats rented last month.

-By Yeo Sam Jo

HDB resale prices continue to fall in August: SRX

HDB resale prices dipped 1.1 per cent compared to July, affecting three- and four-room flats, according to the Singapore Real Estate Exchange.

Source: Channel News Asia / Singapore

SINGAPORE: Resale prices for Housing and Development Board (HDB) flats fell for a seventh straight month, slipping 1.1 per cent month-on-month in August - marking a 31-month low since January 2012, according to the Singapore Real Estate Exchange (SRX).

According to the SRX HDB flash report released on Thursday (Sep 4), June's HDB resale prices dropped 7.1 per cent year-on-year in August. Compared to the peak in April 2013, prices for resale flats have declined by 8.6 per cent, SRX said.

The SRX report revealed that the price drop affected three- and four-room flats, which saw a price decline of 2.0 per cent and 0.9 per cent, respectively, compared to July. Executive flats and five-room flats, however, saw a rise in price by 1.5 per cent and 0.8 per cent, respectively.

In August, 1,327 HDB resale flats were sold, a 1.1 per cent decrease from the 1,342 transacted units in July, SRX added.

Mr Thomas Tan, executive director of REMAX, said that the drop in resale prices was likely due to Build-to-Order (BTO) flats launched over the last three years taking demand away from the resale market. He added that HDB's implementation of a 30 per cent Mortgage Servicing Ratio (MSR) has "limited the appetite of buyers' affordability".

Meanwhile, the fall in resale volume was possibly due to the Hungry Ghost Festival, and more buyers and sellers may return to the market after the seventh month of the Chinese calendar, said ERA Singapore's key executive officer, Mr Eugene Lim.

However, Mr Lim expects resale volume to be boosted over time as a "stable price environment will further reduce the fear of buying at excessive premium or selling at below market value".

He said the MSR may also be impacting the buyers of three-room resale flats the most. "The buyers of three-room resale flats may comprise those of a household income bracket or those that are downsizing from larger flats due to financial reasons.  As such, the MSR may have a bigger impact on them than other buyers."

Mr Colin Tan, director and head of research and consultancy for Suntec Real Estate Consultants, also pointed to the tightening of the Total Debt Servicing Ratio (TDSR) as a factor.

He said: "The TDSR framework reduces the credit or loans that you can take, so that would affect genuine buyers. It is true that, generally speaking, prices should come down. But sometimes, when flats mature and they are in a particularly good location, then you will find that some people may rush in, if they are in the mature estates. Then prices may go up."


Rental volume and prices remained flat in August. An estimated 1,550 HDB flats were rented out in August, compared to 1,548 flats in July. Rents posted a small increase of 0.2 per cent on-month, the report stated.

Mr Lim said rents may continue to stay low as curbs on foreign workers lower rental demand, and as flats approach their minimum occupation period. He expects rentals to moderate by a further 5 to 10 per cent by end-2014 as reliance on foreign workers is reduced.


The overall median Transaction Over X-Value (TOX), which measures whether people are overpaying or underpaying the SRX estimated market value, remained at a negative S$3,000 for August. The median TOX has been negative since May 2013, said the SRX.

According to the report, Bukit Merah was the only town of relatively high activity with a positive median TOX. For HDB towns with more than 10 resale transactions in August, only Bukit Merah reported a positive median TOX of S$8,000. Among relatively active towns, Bukit Panjang posted the most negative median TOX. Among HDB towns with more than 10 transactions, the lowest median TOX was seen in Bukit Panjang, Ang Mo Kio, and Hougang, at -S$12,800, -S$8,000, and -S$6,100 respectively.

- CNA/av/xy

HDB resale flat prices plunge to 2.5-year low: SRX

Fall due to seasonal lull associated with Hungry Ghost Festival and a market still reeling from property curbs

Source: Today Online / Business

SINGAPORE — More heat has been let out of the Housing and Development Board (HDB) market, with resale prices falling last month to the lowest in two-and-a-half years, dragged down by the double whammy of the Hungry Ghost Festival and the prolonged effects of repeated rounds of property curbs.

Last month, overall resale prices slipped 1.1 per cent from July, the seventh consecutive month-on-month decline, down to their lowest level since January 2012, said a flash report by the Singapore Real Estate Exchange (SRX). The fall was due mainly to lower prices for three- and four-room flats, which fell 2 per cent and 0.9 per cent, respectively.

Meanwhile, prices of five-room and executive flats rose by 0.8 and 1.5 per cent, respectively, the SRX said.

Analysts said the Mortgage Servicing Ratio (MSR), which limits the quantum of housing loans to 30 per cent of borrowers’ gross monthly income, remained the largest contributing factor to the price decline as it affects buyers’ ability to take higher loans.

But because demand and prices for larger flats were more severely hit previously, prices may have reached a level with which buyers are comfortable enough to return to the market, thus providing support to five-room and executive flats.

“When the MSR was first enforced, it hit the bigger flats most because people could not get as much of a loan as before,” said Mr Nicholas Mak, executive director of SLP International Property Consultants. “It’s a case where prices have fallen to more affordable levels in some locations and managed to attract more buyers back.”

Figures by the SRX showed that the number of previously-owned four- and five-room flats transacted last month rose to 542 and 308 units, respectively, from 519 and 278 units in July. However, sales of three-room and executive flats fell to 393 and 84 units, respectively, from 442 and 103 units previously. The total resale volume last month was 1.1 per cent lower at 1,327 units, compared with 1,342 units the previous month.

“The slight fall in resale volume was quite possibly due to the Hungry Ghost Festival, when house buying activity tends to slow down, especially for the more superstitious,” said Mr Eugene Lim, key executive officer of ERA.

“Buyers and sellers are getting used to the revised resale procedure and are negotiating based on price and not cash-over-valuations anymore. The stable price environment will further reduce the fear of buying at excessive premium or selling at below market value. This will help boost resale volume over time,” he added.

As for resale prices, Mr Mak said values were likely to fall further over the next six to 12 months. Besides the MSR, an upcoming supply of Build-to-Order flats will also cause sellers to temper their price expectations.

Meanwhile, the rental market stayed stable in terms of prices and the number of new leases signed. Rents inched up a marginal 0.2 per cent last month from July, the SRX said, while rental volume was only two units up at 1,550 flats.

Analysts said HDB flats would continue to be attractive rental options, especially among tenants with monthly budgets of S$3,000 and below and newly minted permanent residents, who are not allowed to buy HDB resale flats in their first three years.

However, the competition from flats due to be eligible for rental and private properties approaching completion amid the tightening of foreign labour will also put pressure on rents.

Sim Lian tops bids for EC site, beating market expectations

Its S$361 psf ppr bid for Choa Chu Kang plot beats 7 others but is close to average price for inferior sites in Feb

Source: Business Times / Singapore

THE latest state tender for an executive condominium (EC) site in Choa Chu Kang Drive shows that developers would still make a beeline for attractive sites.

Located about 550 metres from Choa Chu Kang MRT Station and Bus Interchange and Lot One Shoppers' Mall, the 1.9-hectare plot drew eight bids, with the highest at S$361.08 psf ppr from Sim Lian Land - slightly above market expectations.

JLL national director Ong Teck Hui, for instance, had expected the site to draw 5-6 bids with the winning bid at S$320-350 psf ppr. However, he added: "I see a mix of both caution and optimism. The optimism is in the top bid being higher than expected; the caution is the top bid being pretty close to the S$357 psf ppr average price for the two adjacent Choa Chu Kang Grove EC plots sold in February - despite the latest site being more attractive."

The pair of Choa Chu Kang Grove sites are about 1.1 km from Choa Chu Kang MRT Station.

-By Kalpana Rashiwala

Choa Chu Kang EC site draws high bids in close contest

Sim Lian bags plot near MRT station, Lot One mall

Source: Straits Times / Money

THE tender for an executive condominium (EC) site in Choa Chu Kang Drive has surprised the market with higher-than-expected bids in a keen tussle among eight bidders.

Industry watchers said the "optimistic" bids for the 205,138 sq ft parcel reflected its location near Choa Chu Kang MRT station and Lot One Shoppers' Mall. It has a maximum gross floor area of 574,388 sq ft, and can yield up to 535 units.

Sim Lian Land's top offer of $207.4 million works out to $361 per sq ft (psf) per plot ratio (ppr).

When the 99-year leasehold site was put up for sale in June, experts expected five offers, with a winning bid between $320 and $350 psf ppr.

"The number of bids and close winning margin indicate the healthy interest in the EC market, despite current market conditions," said Mr Desmond Sim, research head at CBRE.

However, the tender results were still "realistic", said Mr Ong Teck Hui, national director of research and consultancy at Jones Lang LaSalle.

In February, two EC parcels in Choa Chu Kang Grove were sold for $375 psf ppr and $339 psf ppr.

Sim Lian's bid edged out a bid of $202.9 million, or $353 psf ppr, from a consortium of Hoi Hup Realty, Sunway Developments and Oriental Worldwide.

City Developments unit Verwood Holdings and its partner TID Residential came in third with a bid of $197 million - or $343 psf ppr.

Mr Eugene Lim, key executive officer of ERA Realty, said developers are still optimistic about ECs given their popularity with HDB upgraders.

But developers which have secured sites at high land costs may have to "innovate around the parameters of cooling measures", said Mr Ong Kah Seng, director at R'ST Research. One way is to raise the proportion of smaller units.

This will make units more affordable despite the lowered mortgage servicing ratio, which limits monthly housing payments at 30 per cent of the buyer's gross monthly income, he said.

-By Cheryl Ong

Temasek, JTC plan to wed units, make cities

Merged entities' collective expertise will span value chain for urban development projects

Source: Business Times / Top Stories

[SINGAPORE] Temasek Holdings and JTC Corporation plan to create an infrastructure and development behemoth to ride the rising wave of urbanisation washing over emerging markets, the Singapore state-owned entities announced on Thursday.

JTC, Singapore's industrial infrastructure development agency, and Temasek, an investment firm, will begin talks to explore the merging of JTC's Ascendas and Jurong International Holdings (JIH) with Temasek's SingBridge Group and Surbana International Consultants Holdings.

Both sides said they have engaged advisers and consultants as part of their due diligence process and to provide fair market valuations. Official estimates place the combined annual revenue of Ascendas, JIH and Surbana north of S$1 billion.

The operating entities of the merger candidates, including Ascendas's listed real estate investment trusts (Reits), will continue business as usual, and no general offer obligations are expected to be triggered, JTC and Temasek said in a joint statement.

In their sights is a slice of the urbanisation pie, which by some accounts could be a major theme over the next decade.

In an October 2013 report, consulting firm McKinsey reckoned that 45 per cent of Fortune Global 500 companies will be from emerging markets in 2025, up from just 5 per cent in 2000. 

Of the 7,000 companies that could reach US$1 billion of revenue by 2025, about 70 per cent of them are expected to be from emerging markets.

UK-based Atkins, a major player in the field, saw profit growth of 14.2 per cent in the year ended March 2014.

Dilhan Pillay Sandrasegara, head of Temasek's enterprise development group, said: "Temasek sees growing opportunities in the sustainable urban development sector. Apart from the trends we see with the increasing urbanisation in growth markets, we also see an emerging and keen interest in building sustainable cities, both inside and outside Asia."

The four entities in the proposed merger bring expertise that, when combined, will span the value chain for urban development projects.

Ascendas, a wholly owned subsidiary of JTC, is a business real estate specialist that develops and runs business, science and industrial parks. It manages three Singapore-listed Reits - Ascendas Reit, Ascendas India Trust and Ascendas Hospitality Trust.

JIH, which is also fully owned by JTC, is a consultancy and project and facilities management services provider.

Temasek-owned SingBridge is an urban investment and development company with a specialty in integrated cities and sustainable urban solutions.

Surbana is an urbanisation consultancy subsidiary of Temasek that offers solutions in areas from architecture and engineering through to urban planning and city management.

"The merged group will have the scale, capabilities and resources to participate in the entire urbanisation value chain, deepen its presence in existing markets and develop new ones. 

More importantly, this partnership with Temasek provides more growth opportunities for the four businesses and their people," JTC chief executive Png Cheong Boon said in a statement.

Fulfilling that ambition of creating an urbanisation legend is still in its early days. The due diligence process could take a few months and the eventual group structure has not been set, Temasek spokesman Jeffrey Fang said in response to queries.

The intention is to preserve the companies' flexibility to continue to seek business that plays to their own strengths.

"We don't intend to take away the nimbleness of these companies," Mr Fang said.

The merger could also link two major industrial property landlords in Singapore. Ascendas and Temasek's Mapletree Investments manage slightly more than 10 per cent of the country's industrial and logistics properties.

Said a JTC spokesman: "We do not expect the merger to affect industrial rentals in the market."

-By Kenneth Lim

Temasek, JTC seek mega merger of urban planning firms

Source: Straits Times / Top of The News

TEMASEK Holdings and JTC Corp will begin exclusive talks to explore the merger of four of Singapore's key urban planning and development firms, the two companies said yesterday.

The plan is to form a major player that would have the scale, skills and resources to participate in the vast urbanisation projects cropping up in Asia.

Ascendas, Jurong International Holdings (JIH), Singbridge Group and Surbana International Consultants, with their complementary expertise and geographical footprints, could take on the world, some noted.

Ascendas has strong capabilities in industrial and business space development, while Surbana and JIH are skilled in building homes and master planning.

Singbridge is an "aggregator" of urban solutions for large-scale developments, having brought together players for projects such as the Guangzhou Knowledge City and Tianjin Eco-city.

The new entity could be valued in the billions; Ascendas alone had a revenue of around $700 million last year. Players in the sector include United States-based AECOM, with a market value of US$3.7 billion (S$4.6 billion).

"The merged group will have the scale, capabilities and resources to participate in the entire urbanisation value chain, deepen its presence in existing markets and develop new ones," said JTC chief executive Png Cheong Boon.

Ascendas and Jurong International are both JTC subsidiaries, while Singbridge and Surbana are Temasek units.

"Apart from the trends we see with increasing urbanisation in growth markets, we also see an emerging and keen interest in building sustainable cities, both inside and outside Asia," said the head of Temasek's enterprise development group, Mr Dilhan Pillay Sandrasegara.

DBS economist Irvin Seah said the move could benefit the broader Singapore economy, not just the four merging firms.

They could tap into urbanisation opportunities in China, India and Myanmar, he said, but "we should think about how to enhance the multiplier effect across the Singapore economy".

"Besides these four players, medium-sized enterprises could also benefit by contributing products and services across the urbanisation value chain," he noted.

Mr Scott Dunn, previously chairman of the Singapore council of the Urban Land Institute, said a merger of the four companies would also benefit the communities they work with in future.

The operating entities of Ascendas, JIH, Surbana and Singbridge would continue their business as usual, including the listed entities under the Ascendas Group. The proposed merger would not trigger any general offer obligations on the part of the parties.

The due diligence process and finding a fair market valuation for the proposed merger would take a few months, and the eventual group structure is still being evaluated, Temasek said.

-By Yasmine Yahya

Temasek, JTC to merge 4 units into mega-entity

Merger to provide more scale, capacity to take on region’s major urban projects, say firms

Source: Today Online / Singapore

SINGAPORE — As urbanisation picks up pace across China, India and South-east Asia, investment giant Temasek Holdings and industrial developer JTC Corp are planning a merger of four of their operating subsidiaries into a single mega-entity, in an unprecedented move that will tap the opportunities resulting from this rapid development.

The two government-owned companies said advisers and consultants have been engaged to provide a fair market valuation of the four units: Temasek’s urbanisation consulting company Surbana International Consultants Holdings, and its Singbridge Group, which specialises in urban solutions, particularly in China, as well as JTC’s business space solutions provider Ascendas and its Jurong International Holdings (JIH), which offers expertise for the built environment.

In a joint statement last night, Temasek and JTC said the merger would provide more scale and increased capacity to take on Asia and other markets.

Mr Dilhan Pillay Sandrasegara, head of enterprise development group at Temasek, said: “Temasek sees growing opportunities in the sustainable urban development sector. Apart from the trends we see with increasing urbanisation in growth markets, we see also an emerging and keen interest in building sustainable cities, both inside and outside Asia.”

Mr Png Cheong Boon, chief executive of JTC, said: “The merged group will have the scale, capabilities and resources to participate in the entire urbanisation value chain, deepen its presence in existing markets and develop new ones.”

Said a JTC spokesperson: “Each of the four entities brings unique strengths and complementary capabilities to form an integrated platform that is able to provide the full suite of end-to-end urban solutions to meet urbanisation needs in Asia and elsewhere.”

Ascendas, which manages more than S$15 billion in assets, has projects in China and India — the world’s two most populous countries — as well as in South Korea and Vietnam, while JIH has completed more than 1,700 projects in 47 countries.

SingBridge has completed integrated cities and sustainable urban solutions particularly in China, such as the Guangzhou Knowledge City, and the Chengdu Hi-tech Innovation Park, while Surbana has managed projects in Africa and the Middle East.

Analysts said the pooling of resources is needed so the merged entity can be a major player in cities many times the size of Singapore.

Ms Annie Koh, associate professor of finance at the Singapore Management University, said: “In China, the average size of cities is about five million and there are close to 100 of such cities. The top 20 cities in China (each have) a population of about 10 to 20 million. So if you don’t have the size, you clearly can’t take on the projects.”

She added that the merger would mean more credibility from the perspective of state-owned companies in other countries, which will typically be involved in the projects too.

“If it is four splintered entities, the state-owned enterprise won’t want to work with them, unless they are of a proportionate size. In terms of risk-sharing, a bigger company also makes sense from a counter-risk exposure point of view,” she said.

CIMB economist Song Seng Wun harked back to the days when Pidemco Land was merged with DBS Land to form CapitaLand, noting that as a result, CapitaLand is now one of the biggest real estate developers in the region.

“Now, we can go beyond real estate developments, the region is wealthier … It is sensible to put together these companies in this particular sector, resulting in a bigger balance sheet to take on projects that are going be around the region.”

While it eyes the growing pie in the region, JTC sought to allay fears that it might become too dominant at home. “The combined market share of Ascendas REIT and Mapletree Industrial Trust is only about 8 per cent and is not a significant proportion of the domestic industrial property market. Hence, we do not expect the merger to affect industrial rentals in the market,” said a JTC spokesperson.

-By Tan Weizhen

Surbana tops list of HDB Design Awards winners this year

Six awards will be presented next Wednesday, the Housing and Development Board announced.

Source: Channel News Asia / Singapore

SINGAPORE: National Development Minister Khaw Boon Wan will present six Housing and Development Board (HDB) Design Awards at this year's HDB Awards ceremony, to be held next Wednesday (Sep 10).

The HDB Design Awards are for architectural consultants which have contributed in designing quality housing for Singaporeans. The recipients include Surbana International Consultants, ADDP Architects and HDB Building Research Institute.

The full list of awards and recipients is as follows:

Surbana's Segar Grove and Commonwealth 10 projects stood out for their outstanding designs, said HDB, which added that the projects "epitomise HDB’s emphasis on quality homes, designed for functionality and residents’ comfort".

Surbana's architects took around 10 months to conceptualise the design for the Segar Grove Build-to-Order flats in Bukit Panjang, which included plans to incorporate an elevated "floating platform" in the area. The architects' efforts paid off when they nabbed an HDB design award. Their company won four out of the six design awards.

Mr Mohd Asaduz Zaman, senior vice-president (Architectural) at Surbana International Consultants, talked about the green inspiration behind Segar Grove: "We wanted to create a very cosy and kind of a green environment. So, in that way ... you are living in a park kind of setting."

In keeping with the green theme, Surbana also used 45 species of plants. Mr Fong Chun Wah, group director of development and procurement at HDB, said: "HDB is looking at this whole area of sustainability and greenery to make sure that our flats, when we design them, are sustainable, easy to maintain by residents and energy efficient.

He added that greenery is also used to "soften the hard landscape of our estates so that it creates a very conducive environment for residents".

Commonwealth 10's skyline and communal facilities amid greenery. (Photo: HDB)

One of the members of the judging panel, Forum Architects Director Tan Kok Hiang, said: "HDB's designs have increased in sophistication in recent years. Its designs focus on appropriate urban responses that result in better physical and visual connectivity with its neighbours.

"In some estates, the focus has gone beyond the physical landscape to consider the cultural and historical milieu of the place. The emphasis has shifted from 'space-making' to 'place-making'."


HDB will also give out seven awards for construction quality. Among the winners, Fernvale Foliage in Sengkang stood out. Built by Straits Construction Singapore, it achieved the highest score of 94.2 under the Construction Quality Assessment System.

Introduced by the Building and Construction Authority in 1989, it is the de facto national benchmark for construction quality. Quality of construction is measured in three main areas - structural, architectural, as well as mechanical and electrical works. 

- CNA/kk/by

Cement makers merge local units

Source: Straits Times / Money

TWO of the world's largest cement manufacturers have been granted approval to forge a partnership between its local subsidiaries here.

The green light from the Competition Commission of Singapore (CCS) yesterday follows a $28.6 billion merger inked between Swiss firm Holcim and France's Lafarge at the parent company level in April.

The merger, with Holcim acquiring Lafarge's entire issued share capital, will result in Holcim being renamed LafargeHolcim.

The firms' local outfits - Holcim (Singapore) and Lafarge Cement Singapore - overlap in the manufacture and supply of ready-mix concrete. They also supply grey cement, used to produce mortar and concrete, here.

Under Singapore's Competition Act, firms are not allowed to merge if the resulting entity could lead to a substantial lessening of competition in any market here. But the firms in July argued they will not have substantial market power after the merger.

Grey cement is also imported by Holcim primarily for its own consumption, and is supplied to third parties only to a limited extent, they said.

After a public consultation exercise, the CSS issued its decision that "the transaction is unlikely to lead to substantial competition concerns in Singapore".

This was because the firms are not the biggest players here, despite being major names in overseas markets, such as Europe.

The CSS added: "There is significant localised competition in the relevant overlapping markets in Singapore."

There are also alternative suppliers that can meet any additional demand for ready-mix concrete, thereby limiting the market power of the merged companies.

With a number of suppliers in the market, cooperation among firms to raise prices will be harder as well, said the CSS. Lastly, buyers will be able to exercise "countervailing buyer power" since they tend to buy ready-mix concrete in large quantities.

-By Cheryl Ong

Views, Reviews & Forum

Reflection of high property prices

Source: Straits Times (Pg 31)

Need to stop agents targeting Pinnacle residents

Source: Today Online / Voices

Residents of a well-known estate (Pinnacle@Duxton), whose Minimum Occupation Period is ending in December, have been bugged recently by flyers in their letter boxes, at their gates and under their doors from estate agents looking to assist in selling the units.

Some have received unsolicited calls; many have received unsolicited visits. It has reached the point where the car park barriers have become advertising spaces for agents to put their pictures and numbers.

One brochure was of a seminar to be held near the estate by a law firm to advise on the sale of public flats.

Besides the nuisance this form of marketing creates, the intensity of which can only increase in the coming months, the fear is that some residents may be swayed into selling, only to regret it later.

It is a public housing estate, open to outsiders, so we cannot prevent agents and visitors from moving in and out frequently.

The relevant authorities, though, should look into this disturbance and perhaps even create a Do Not Sell registry, so residents who do not wish to sell are not bugged by agents and their flyers.

-By Sunil Rai

Global Economy & Global Real Estate

Along the High Line: S’pore architect makes watery mark in New York

Projects to feature private pools for residents, facades rippled like the surface of a sea

Source: Today Online / Business

NEW YORK — Singaporean architect and developer Chan Soo Khian, who has designed and built residences, hotels and museums around the world, is launching his first projects in the United States, where he and his firm SCDA are coming on strong with two condominiums in New York along that magnet for brand-name architects, the High Line. Both the projects — Soori High Line and 515 Highline — will feature watery themes.

Soori High Line, a 27-unit condo across the street at 522 West 29th, will have not only rooftop pools for residents of its triplex penthouses. More than a dozen lower-floor apartments will also come with private pools to allow residents to float above it all while contemplating the brash buildings that populate the surrounding blocks.

The project, which has a boxy 11-storey shape, was developed by a team that includes Singapore-based Oriel, of which Mr Chan is a managing principal, and the New York-based Siras Development. The interiors of the two- to five-bedroom units have ceilings that soar as high as 5.5m and some walls that are made of a single sheet of glass.

The US$125 million (S$156.4 million) project, between 10th and 11th Avenues, promises residents the thrill of taking a dip without having to leave their apartments. Rectangular pools are tucked into alcoves with just one end exposed — in all seasons — to the open air. The pools can be heated to 27°C all year round, allowing residents to soak while watching the snow fall in winter.

“Most of the time, it will be a focal point for people to enjoy,” said Mr Chan, who compared the project to Alila Villas Soori, the pool-adorned beachside resort he built in Bali.

The pools will definitely be a cornerstone of marketing efforts, said Mr John Gomes, a broker with Douglas Elliman and a leader of the sales team. “They are so cool, whether you take a dip every day or not.”

While many buildings in Manhattan have swimming pools, they tend to be of the shared indoor or rooftop variety, and this is where Soori High Line stands out. Since marketing began in Singapore this summer, five units have sold at the building; prices start at about US$3,000 a square foot, or US$3.7 million for a two-bedroom apartment. The project is scheduled to open in spring 2016.

“We are definitely going after buyers from that part of the world,” said Mr Ashwin Verma, a Siras managing partner and a developer who has been active in the High Line area, though through Blackhouse Development.

At 515 Highline, Mr Chan went with a more exuberant exterior, covering the northern and southern sides with curvy glass fins, a treatment similar to one he used on the toy museum he designed in Singapore. The facades of the project, a 12-unit condo at 515 West 29th Street in West Chelsea that will almost touch the elevated park, will be rippled like the surface of a sea.

Mr Chan is an investor in the 11-storey project whose developer is the Bauhouse Group of New York. The US$70 million project broke ground this summer and will be completed at the end of next year. The building’s ribbed facade is not its only unusual feature. It sits at a place where the High Line takes a sharp turn, which will give every apartment a view of the High Line.

In terms of development, the site is also unusual. Had the developers torn down the existing six-storey brick building, which was used to store wire hangers for garment district businesses, they would have been forced to build a much smaller structure, since zoning laws have changed over the years.

So, Bauhouse is constructing its tower inside the brick building, as if putting a hand in a glove, so the project can be counted as a conversion and not new construction, said Mr Chris Jones, a Bauhouse co-founder. When the glass portion reaches a certain height later this year, the brick walls will be peeled back and, “Hey, presto, this sort of new building will emerge”, Mr Jones said.

The only original brick that will remain will serve as space for large displays of artwork. Sales are to begin this fall, after the condo’s offering plan is approved; prices are expected to start at US$5 million.

The High Line area is full of inventive projects, such as 200 Eleventh Avenue, a high-rise where residents can park their cars next to their apartments. And a condo by renowned architect Zaha Hadid, under way on West 28th Street, has curvaceous walls that recall a mid-century car.

Mr Chan will find himself in good company, said Mr Joseph P Beninati, the managing member of Bauhouse. “Twenty years from now, the students from Yale School of Architecture will be taking field trips down here to go and see some of this generation’s best talents,” he said. 

-By The New York Times

China eases funding rules for listed property firms

Developers of affordable homes allowed to issue bonds but cash cannot be used to buy land

Source: Business Times / China

[BEIJING] China is relaxing its financing rules for listed property firms by allowing those that qualify to sell medium-term notes in the interbank market, three sources with knowledge of the matter said.

Money raised from the sale of notes can be used to fund new residential housing projects, supplement companies' operating cash flows and repay bank loans, the sources said.

A housing slowdown has forced a cash squeeze on some developers. A Reuters study in June showed cash to short-term debt ratios for some 80 listed property companies were at two-year lows.

China's property market is experiencing its sharpest slowdown in two years as sales and prices turned south after an exceptionally buoyant 2013.

-From Beijing, China

Hedge fund chief pays US$71.3m for NY home

Source: Business Times / Property

[NEW YORK] Israel Englander, the founder and chief executive officer of hedge fund firm Millennium Management, bought a duplex apartment on New York's Park Avenue for US$71.3 million, a record price for a Manhattan co-op.

The seller was the government of France, New York City property records filed on Aug 30 show. The six-bedroom unit at 740 Park Avenue was listed for US$48 million in April, according to real estate website

The Park Avenue tower, completed in 1931 and designed by Rosario Candela and Arthur Loomis Harmon, has been home to John D Rockefeller Jr and Jacqueline Kennedy Onassis, according to StreetEasy.

Its 31 units include duplexes and triplexes of as much as 20,000 square feet. The difference in the asking and purchase prices for Mr Englander's 18-room co-op was the result of a bidding war, said John Burger, the listing broker with Brown Harris Stevens.

-From New York, US

Investors chasing property outside US at record pace

SPDR Dow Jones ETF attracts net inflows of US$304m in August

Source: Business Times / Property

[SEATTLE] Investors are putting money into real estate companies outside the US at a record pace as interest rates recede, economies expand and opportunities remain to buy assets at discounts amid lingering distress from the global financial crisis.

The SPDR Dow Jones International Real Estate Exchange-Traded Fund, the largest ETF for non-US real estate, attracted net inflows of US$304 million in August, the most of any 

property ETF, driving its shares outstanding - a proxy for demand - to a record, according to data compiled by Bloomberg.

Last month's surge catapulted property ahead of energy for the first time in industry fund flows year to date, the data show. ETFs are passively managed funds that aim to replicate the performance of benchmark indexes for various industry groups.

Real estate has emerged as the asset of choice following the global financial meltdown because of its relatively high yields. While the US has claimed a large share of interest for its perceived stability and enduring appeal of gateway markets such as New York and Los Angeles, investors also have increased purchases in Europe, the Asia-Pacific and Latin America.

-From Seattle, US

Johannesburg Blasting Fuels Suburban Office Vacancies

Source: Bloomberg / News 

Bhekumuzi Makhubo is the man who puts the boom in Johannesburg office construction.

The 25-year-old blasting contractor helps clear space with explosives for a raft of properties under construction in Sandton, a northern neighborhood that is Africa’s biggest financial district. More than 257,300 square meters (2.7 million square feet) of commercial real estate was planned there at the end of June, 73 percent more than a year earlier, according to data compiled by Jones Lang LaSalle Inc.

“It’s a sign of more development,” said Makhubo, dwarfed by a crane and bulldozers on Aug. 12 at the site of new offices for insurer Sanlam Ltd. (SLM) “There is going to be more and more construction.”

The building boom is running ahead of demand. Developers are struggling to fill the buildings that have already been completed and the pace of the district’s expansion also is keeping a lid on rents. The vacancy rate in Sandton was 12.7 percent in the second quarter, up from 4.5 percent a year earlier, Jones Lang said in a report last month.

“There’s a bit of an oversupply,” Fran Teagle, a director for Broll, a unit of broker CBRE Group Inc. (CBG), said by phone. “Leasing is slow at the moment and we don’t expect rentals to rise in the short term. There’s quite a lot of vacancy.”

The average monthly rent for prime office space in Sandton was about 201 rand ($18.70) per square meter in the second quarter, little changed from a year earlier, broker Jones Lang estimates. That’s about $1.74 per square foot, compared with 5 pounds ($8.25) per square foot in the City of London financial district. The average asking rent per square foot in Manhattan is $5.32, according to broker Knight Frank LLP.

Commercial Hub

Sandton, once a single 20-story tower and a shopping mall, is also set to displace Johannesburg’s city center to become South Africa’s largest commercial hub. The stock market and other companies moved their operations to the suburb starting in the 1990s because of an increase in crime in the city’s historical business district.

Makhubo’s almost daily blasts shift rock for the newest office block within the square mile that houses the Johannesburg Stock Exchange and local headquarters for Citigroup Inc. (C) and Deutsche Bank AG.

Subsidizing Costs

Developers are attracting tenants in Sandton by offering incentives such as rent-free periods and subsidizing the cost of fitting-out offices, Teagle said. About 20 percent of office development in Sandton is speculative, according to Ndibu Motaung, head of research at Chicago-based Jones Lang.

More than 257,300 square meters of commercial real estate development was planned in Sandton at the end of June compared with about 148,400 square meters a year earlier, according to Jones Lang.

Buildings under construction include a 34,500 square-meter office for law firm Webber Wentzel and 67,000 square meters for Sasol Ltd. (SOL), the world’s largest producer of gasoline from coal, Jones Lang said. Another eight towers are planned, including the new headquarters of Discovery Ltd., South Africa’s largest medical-insurance provider, over the next three years.

The country’s biggest construction companies are Murray & Roberts Holdings Ltd. (MUR),Wilson Bayly Holmes-Ovcon Ltd. (WBO) and Aveng Ltd.. (AEG) All of them are either involved in, or bidding for, projects in the area.

A 25 percent unemployment rate, electricity shortages and strikes have limited growth in Africa’s second-biggest economy. While the country avoided its second recession in five years with 0.6 percent annualized growth in the second quarter, GDP is forecast to have expanded by the slowest pace this year since 2009. That’s limited company investment.

New Look

Older buildings are being refurbished to keep pace with the new modern styles. The Sandton City Office Tower, which sits above Africa’s biggest shopping mall, replaced its stark, concrete exterior with a new, glass facade. That’s the latest trend, according to Gray Todd, an associate at Johannesburg-based Lyt Architecture.

“Forty or 50 years ago, Sandton was a farm,” Todd, an architect of 11 years, said by phone from Johannesburg on Aug. 22. “Now each new building is trying to outdo and stand out from the rest.”

The construction boom isn’t only about commercial properties. Homeowners looking to avoid Sandton’s increasingly congested roads are living closer to the financial hub, Jake Hoddinott, a sales and development manager at developer Barrow Group, said.

More than 100,000 commuters travel into Sandton each day and that will increase by about 27,000 once current office developments are completed, according to estimates by Jones Lang.

Changing Appetite

“The appetite is changing,” Hoddinott of Barrow said in an interview on Aug. 12 at one of the developer’s latest projects. “There’ll be more traffic and pressure on existing infrastructure. That’ll likely drive people to use public transport. People don’t want to sit in traffic for hours each day.”

Barrow has built Katherine & West, a 10 story mixed-used property 50 meters from the Gautrain station, a commuter service that links Sandton with OR Tambo International Airport, Johannesburg’s city center and the capital, Pretoria. The site has seven apartments, including a 734 square meter penthouse that’s on sale for more than 26 million rand ($2.4 million).

Makhubo, who works for Domino Blasting, first came to Sandton six years ago after graduating from school.

“In 2020, I don’t even think I’ll be able to recognize the very same building that I’m working on,” he said, wearing blue overalls and a pink hard hat while dragging on a cigarette during his lunch break. “Everything is changing.”

-By Chris Spillane