Real News‎ > ‎2014‎ > ‎September 2014‎ > ‎

8th September 2014

Singapore Real Estate

Small units draw interest at new Tiong Bahru showflat

Source: Straits Times / Money

KEPPEL Land's latest development in Tiong Bahru is drawing significant buyers' interest, but how that translates to sales remains to be seen.

Some property agents said more than 300 cheques have been collected since prospective buyers were invited to a preview of Highline Residences in Kim Tian Road about a week ago.

Submitting a blank cheque to the developer even before the pricing of the units is finalised to show serious buying intent is an industry norm, but this does not necessarily lead to actual buying.

The showflat was, however, crowded when The Straits Times visited at about 4.30pm yesterday.

Many buyers were described by agents as investors who are keen on the smaller units, particularly, the one- and two-bedroom types.

The 500-unit development is being marketed at an average price of $2,000 per square foot (psf), but industry players noted that with discounts thrown in, the average price could dip to $1,900 psf at launch.

The asking price for one-bedders is estimated to be between $1 million and $1.2 million; two-bedders between $1.25 million and $1.6 million; three-bedders between $1.6 million and $2.5 million; and four-bedders between $2.4 million and $2.8 million. Six penthouses are likely to be priced at about $5 million each, agents said.

"(The) initial take-up should be quite good because of its location in Tiong Bahru, but don't expect too much in today's market," said Chestertons managing director Donald Han. Recent launches have seen a take-up rate of 30 to 50 per cent of the units released, he noted.

New launches nearby include the 469-unit The Crest and the 429-unit Alex Residences. Both were launched for about $1,600 psf to $1,700 psf and have sold less than 50 per cent of their units.

Mr Chris Low, 39, a foreign exchange trader, noted that the indicative prices at Highline Residences were "a bit high" for a 99-year-leasehold project.

He was at the Highline Residence showroom yesterday to look at the two-bedders, but said that he would prefer to wait as property prices are likely to ease further.

Another prospective buyer, who wanted to be known only as Mrs Chan, said she hoped the developer would absorb the cost of the additional buyer's stamp duty owing to the tepid property market.

"Discounts would be a major incentive, especially if they're really intending to push sales," she said.

The project is expected to launch on Sept 13, and only units in two 36-storey blocks are likely to go on sale.

-By Cheryl Ong

Views, Reviews & Forum

Building on her expertise in urban planning

CPG's Nina Yang eyeing challenges in more emerging economies

Source: Straits Times / Money

THE Treasury building near City Hall holds a special meaning for Mrs Nina Yang.

The 48-year-old executive director of urban planning at CPG Consultants met her architect husband while they were working together on the building, she told The Straits Times in a recent interview at her office in Novena.

At that time, she was working as an architect at the Public Works Department (PWD), while he was at the Urban Redevelopment Authority.

"When we got married in 1994, we took our wedding photos on the construction site, standing on top of the basement," she recounted with a laugh.

In 1999, the PWD was corporatised and then rebranded as CPG Consultants in 2002. Mrs Yang's career since then has also taken on new dimensions, even though she has remained with essentially the same company all along.

In CPG, she is now leading a team that will oversee a masterplan for the development of a special economic zone in Myanmar - a country with huge urbanisation opportunities.

The five-member consortium led by CPG edged out about 30 other international consultants vying for the project earlier this year.

This was even though "our fee was five times higher than the second highest", she noted.

"It was because of the value that we could provide."

But her success seems to have come as a surprise even to herself.

"When I started at the School of Architecture, I never dreamt that the journey could be so far and so long," she said. "My clients are also very different now - I work with master planners or governments."

She had decided to go into architecture at university even though her parents wanted her to pick a different profession.

"I remember my mum telling me, 'Why do you want to be an architect? Singapore is all built up!'

"I said, 'doctors repair but I create'. But the truth was that I was just afraid of blood," quipped the mother of two daughters aged 12 and 17.

After she graduated and joined the PWD, she did so well her employer paid for her to do a master's in real estate and urban development at Harvard Graduate School of Design in the United States. "I started finding that I was interested in urban development," she said.

"The desire for doing architecture and creative work has always been with me. But the course opened my eyes to a lot of things, such as how financial considerations drive development."

The perfect opportunity to move into urban planning came after she returned to Singapore. The PWD was undergoing privatisation. "After corporatisation, we were given the mandate to expand overseas and we found that we needed to be able to deal with urban planning," she said.

She rose to the challenge, working on parts of the Suzhou Industrial Park in China.

"There are many architects who say that they can do masterplanning services, but urban planning requires you to understand multiple disciplines. It's not just engineering and design but also economics and financial management. Urban planning must also come with the ability to bring in investors."

With that experience under her belt, she got more involved in developing masterplans for other parts of the country.

Her first masterplan arose from a competition to design one for a 22ha piece of land in China, and was no walk in the park. "We had to design 44 buildings in a month."

She also moved to Shanghai with her family from 2004 to 2006, to work on urban planning projects in China - a huge market that a newly-proposed merger of Temasek Holdings and JTC units is also trying to tap on.

The possible merger of Ascendas, Jurong International, Surbana International Consultants and Singbridge Group was announced last week.

When she moved back to Singapore, however, she found that the practice of architecture had shifted its focus from just "good aesthetic design" to include sustainbility, which Mrs Yang has brought to bear on her latest project in Myanmar.

"We told the Myanmar government that they need to look for investors who are willing to be there for the long haul, with good financial standing and a track record, so the project can meet their social, environmental and economic aspirations."

In future, she plans to bring her experience to more emerging economies as well as work on inner-city renewal in countries such as China. "China keeps expanding, using land as a commodity, so cities keep spreading and sprawling. Economies like China will need to go towards a more compact model in future, so we can come up with urban solutions for the local authorities."

-By Melissa Tan

Recentralisation of urban governance in Singapore

Source: Today Online / Commentary

As urbanisation gathers pace, governments need to address the rising needs of a burgeoning class of urban dwellers. Given its size and status as a compact and densely populated global city-state, Singapore is particularly vulnerable to the pressures of urbanisation.

This has prompted a recent rethink of the institutions and processes through which its government delivers urban services and solutions.

In his National Day Rally speech on Aug 17, Prime Minister Lee Hsien Loong announced the establishment of a Municipal Services Office (MSO), which will coordinate the efforts of eight public agencies in delivering municipal services and act as an inter-agency platform.

Last week, Temasek Holdings and JTC Corp announced plans to merge four of their operating entities — Surbana International Consultants Holdings, Singbridge Group, Ascendas and Jurong International Holdings — into a single mega-entity to provide urban solutions to various markets.

While the setting up of the MSO suggests a move towards a recentralisation of urban governance, the merger reflects a similar recentralisation in the provision of urban solutions to commercial partners.

This comes after decades of decentralisation that have contributed towards greater efficiency in public service delivery. More importantly, this shift from decentralisation to recentralisation reflects a shift in Singapore’s urban governance style.


The 1990s and early 2000s saw a global shift towards decentralisation and privatisation among governments in both developed and developing nations. This coincided with the emergence of the New Public Management (NPM) movement in public administration circles, which had emanated from the formation of the National Partnership for Reinventing Government task force set up under the Clinton administration in 1993.

Based on business management principles, the key precepts of NPM largely involved the privatisation and contracting out of public service delivery as well as decentralisation of government bureaucracy.

The fundamental assumption was that decentralisation and privatisation would encourage greater efficiency in public service delivery.

Singapore was seen as a major proponent of NPM during this period. As political scientist M Shamsul Haque noted then, the Government converted many state institutions into autonomous agencies and statutory boards, which were managed like private sector organisations.

At the same time, public service providers, such as SMRT and SingTel, were incorporated and privatised.

However, the global financial crisis of 2007 laid bare the limitations of excessive decentralisation and prompted a shift in public administration thinking towards more state-centric approaches which involved greater government oversight and control.

In particular, there was a perceived need for the government to regain its control over incorporated public organisations, such as Freddie Mac and Fannie Mae.

While Singapore was largely spared from such regulatory lapses in its financial sector, it nonetheless faced negative implications from its decentralisation drive.

An increasing population density and a large influx of foreign workers led to strains on public infrastructure. In May, the Government restructured the public bus industry to one where it will own, provide and fund all bus operating assets and infrastructure such as buses, depots, interchanges, bus monitoring and operations systems, and fare systems.

Under a new contracting model, the Land Transport Authority will determine the bus services to be provided and the service standards required, while bus operators will have to bid for the right to operate these services.

This facilitates more effective central planning of bus services, while at the same time encourages greater competition in the industry. As cities become denser and their economic make-up more diverse, they will only become more complex and hence, require more responsive and effective governance. Urban solutions will need to address the multiple aspects of city-life. Decentralised institutions that are overly-focused on their own narrow jurisdictions will find themselves less able to address complex and multi-faceted urban issues.

However, there is also a danger of swinging to the other extreme of over-centralisation as this may give rise to excessive red tape, bureaucracy and a lack of engagement with issues on the ground.

Despite its limitations, decentralisation still has its benefits, particularly in terms of greater efficiency and responsiveness to local stakeholders.

Efficiency in public service delivery remains important. Governments do not possess infinite resources and will, therefore, need to maximise their resources in providing urban services. Decentralisation remains an important tool for enhancing efficiency in public service delivery.

However, there is now a need to recognise the limits and shortcomings of a decentralised government and seek to address these limits with a creative mix of decentralisation and recentralisation. While decentralised organisations should remain responsive to their stakeholders, other organisational forms, such as central coordinating organisations such as the MSO, can be incorporated to ensure that the efforts of individual institutions are coordinated and coherent.

This requires an urban governance model that features strong leadership at the centre coupled with operational autonomy among agencies and institutions at the localised level. More importantly, the crux of urban governance lies in the linkages between central and local agencies.

As the poet WB Yeats has written, “The falcon cannot hear the falconer; Things fall apart; the centre cannot hold.” Coherent and effective urban governance requires strong centre-local linkages.

Recentralisation does not necessarily mean a complete roll-back of the organisational and efficiency gains from early decentralisation efforts. Rather, there is a need to strike a balance between central planning and decentralised delivery of urban services.

-By Wong Jun Jie

Real Estate Companies' Brief

Governance and corporate valuation

Good corporate governance is more than just regulatory compliance or control, says SOH GIM TEIK

Source: Business Times / Companies

THERE has been so much airplay on corporate governance that sometimes its purpose is lost. Far too many people, for example, think of it as simply risk management, or "control, control and more control".

Far from it. Corporate governance rules, regulations and practices serve a greater purpose, and that is to engender trust in the capital markets so that funds can be fruitfully allocated to seed innovations and economic growth.

The governance premium

In a functioning capital market, companies with good internal governance structures generally enjoy premium valuations. That premium comes from perceived lower risks, better operating performance as a result of higher efficiencies and effectiveness, and reduced agency problems.

Global Economy & Global Real Estate

Indonesian industrial-estate stocks outperform

Optimism that president- elect can foster reforms cited for interest in shares

Source: Business Times / Indonesia

[JAKARTA] It's been a rough year for Indonesian companies that own industrial estates. First-half land sales were weak, economic growth is slowing and an HSBC survey concluded that manufacturing shrank in August.

Yet shares of such companies have far outperformed the Indonesia benchmark. And foreign funds have been buying the mid-caps. In July, ones managed by BlackRock Funds Advisors and Vanguard Group made purchases, according to Thomson Reuters data.

The dominant driver behind their outperformance is optimism that President-elect Joko Widodo can foster reforms that boost the economy and demand for industrial property. Some investors are hopeful that Indonesia, over time, will manufacture a lot more products.

Kunardy Lie, chief country officer in Indonesia for Deutsche Bank, said there's "good reason" for interest in industrial-estate stocks as the new government will focus on infrastructure and industrialisation. "Big firms want to invest here, and they will need the space," he noted.

-From Jakarta, Indonesia