Singapore Real Estate No more new residential projects in 14 ha area of Geylang URA proposes rezoning the area from Lorongs 4-22 to new commercial/ institution use from residential/institution use Source: Business Times / Real Estate The Urban Redevelopment Authority (URA) will not approve any new residential projects in a 14-hectare stretch of Geylang from Lorong 4 to Lorong 22 under a proposed rezoning exercise. The planning authority is proposing to re-zone the section from the existing residential/institution use to the newly minted commercial, institution use group. The maximum plot ratio (ratio of maximum gross floor area to land area) will remain at 2.8. -By Kalpana Rashiwala Parts of Geylang to be rezoned Aim to halt building of more homes, to rebalance mix of developments Source: Straits Times / Money SOME parts of the infamous red-light district in Geylang may be rezoned to halt the development of more homes. The area is now a hodgepodge of shophouses, eateries, freehold properties and even brothels - a diverse mix that could cause "issues arising from conflicting uses", said the Urban Redevelopment Authority (URA) yesterday. Ms Hwang Yu-Ning, group director of physical planning at URA, said: "With more new residential developments in the area, there has been increasing... friction on the ground. "In our assessment, the growth of new residential communities in the area of Lorongs 4-22 Geylang needs to be rebalanced and moderated." The URA wants to reclassify areas bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang from "residential/institution" to a new "commercial/institution" zoning once it consults the police and "other agencies". The rezoned areas could then be used for offices, shops, entertainment outifts such as karaoke joints, or a community club, instead of new residential units. The affected areas exclude roads, a sports field bounded by Talma Road and Lorong 12 Geylang as well as properties fronting Geylang Road. The proposed changes would not affect existing or new residential projects that have already been given the green light. Developments such as Le Regal and Treasures@G6 are now being built in the affected area. However, if they were to be sold in a collective sale, for instance, the new developments could not be residential buildings under the new zoning. Ms Chia Siew Chuin, director of research and advisory at Colliers International, estimated that there will be almost 300 new homes completed in the area over the next few years - adding more residents who might not appreciate the sleazy activity going on under their noses. Ms Christine Li, research head at OrangeTee, said a change in land use should bode well for existing residents as values of commercial properties are typically higher. This could stir up interest from developers keen to amalgamate the residential clusters for a sizeable commercial complex, said Mr Desmond Sim, research head at CBRE, South-east Asia. But the challenge lies in negotiating with the numerous individual owners in the area. Redeveloping the land could be costly as well as development charges are higher for commercial land. Development charges for a 1,500 sq m commercial plot would be $12.9 million as compared to $3.5 million for a similar residential parcel, noted Ms Li. Members of the public can submit their feedback in writing to the Permanent Secretary, Ministry of National Development, by Feb 11. -By Cheryl Ong URA proposes rezoning parts of Geylang The Urban Redevelopment Authority has proposed to rezone the area bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang from Residential/Institution to Commercial/Institution so as to prevent "spillover of disamenities to surrounding areas". Source: Channel News Asia / Singapore SINGAPORE: The Urban Redevelopment Authority on Tuesday (Jan 13) announced it is proposing to rezone parts of Geylang, so as to better manage the area in question and "prevent spillover of disamenities to surrounding areas". URA said the proposed area is bounded by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang, excluding the parcels of land zoned Road, the lots fronting Geylang Road and the sports field bounded by Talma Road and Lorong 12 Geylang. It plans to rezone this area from Residential/Institution to Commercial/Institution, according to its press release.
Explaining the decision, URA Group Director for Physical Planning Hwang Yu-Ning said in the proposal that Geylang is a "rich and colourful neighbourhood" interspersed with associations, clans, places of worship, shops, offices and residential uses. It is also a traditional red-light area, she noted. "The various entertainment and eating outlets in the area give rise to activities of a certain colour and vibrancy," Ms Hwang said. "With more new residential developments in the area, there has been an increasing spillover of disamenities and friction on the ground. "In our assessment, the growth of new residential community in the area of Lorongs 4-22 Geylang needs to be re-balanced and moderated." If the rezoning gets the go-ahead, residential units will no longer be approved in this area. She added the new residential developments in the area, which have been approved will not be affected and can proceed to be built. A Geylang resident Channel NewsAsia spoke to welcomed the rezoning proposal. "All these are red light areas. And if they could take this away and put it into more commercial use, like running a legal business that would be fine. It's good to have commercial properties around your estate so that it's convenient for everybody to go shopping or to do things or have an office near your home," he said. The area's Member of Parliament (MP) said it is useful not to have more residential developments in the area. Said Mr Edwin Tong, MP, Moulmein-Kallang GRC: "There are not many residential units there anyway. And much of the area that is being rezoned is already largely commercial, with a good mix of clans and associations. I think it is also useful to not have further residential developments there in an area where traditionally there are not just commercial properties there but also more nightclubs and bars which probably don't co-exist suitably with residential units. " The URA said members of public can submit their feedback, objection or representation to the proposal in writing to the Permanent Secretary, Ministry of National Development, 5 Maxwell Road, Singapore 069110, by Feb 11, 2015. More information on this proposal can be found on the URA website. - CNA/kk http://www.channelnewsasia.com/news/singapore/ura-proposes-rezoning/1586882.html No more new homes in Geylang red-light area, to minimise ‘friction’Source: Today Online / Singapore SINGAPORE — The heart of Singapore’s red-light district in Geylang is set to be rezoned such that there will be no further residential developments in the area, as residents there become increasingly frustrated by the noise, fights and traffic problems resulting from living in proximity to the colourful activities in the neighbourhood. The Urban Redevelopment Authority (URA) has proposed rezoning Lorongs 4 to 22 in Geylang from a “Residential/Institution” area — with “institutions” referring to community ones such as association premises and community clubs — to a “Commercial/Institution” area. Existing housing developments and new residential projects that have already received the green light will not be affected by the proposed change. There are about 1,000 completed residential units in the area, and about 200 units, among them Treasure@G20 and #1 Suites at Lorong 20, are being constructed. Another 100 units have been approved, but construction has not begun. A URA spokesperson said Lorongs 4 to 22 have fewer residential units compared with other areas, but the growth of new residential developments there has led to an “increasing spillover of disamenities and friction” on the ground between residents and the diverse uses in the area. Issues residents have complained about include noise, littering, traffic congestion and illegal parking. As such, residential development there needs to be “re-balanced and moderated” to minimise friction and avoid eroding the character of the area, said the spokesperson. The area earmarked by the URA is bound by Geylang Road, Lorong 22 Geylang, Guillemard Road and Lorong 4 Geylang. Existing residential developments there include condominiums, such as Central Imperial and Wing Fong Court, while other entities such as budget hotels, places of worship and shops populate the area. Member of Parliament for Moulmein-Kallang GRC Edwin Tong said the identity of Lorongs 4 to 22, which come under his watch, will largely be retained as the area is mostly commercial. “Over the longer term, what this move does is it prevents the mushrooming of further residential properties amid all these commercial activities,” he said. He added that he has received “very few” complaints from the residents living in the affected area about the disamenities, as those who choose to live there already expect the presence of such activities. The complaints are mainly about fights and noise late at night, he said. Those working or living in the area interviewed by TODAY said vice activities are common. An employee at a Geylang Road restaurant, who declined to be named, said fights occurred almost daily after midnight, while prostitutes — who tout openly for business — would loiter around his restaurant after 10pm everyday. “When customers see this type of people around, they do not want to come in and eat,” said the 38-year-old. At Lorong 8 Geylang, employees at a mobile phone shop, who also did not want to be named, said they were concerned about the criminal activities in the area. On several occasions, people have been seen sipping on what they suspect to be cough syrup — which is sometimes used as a recreational drug — outside their store, creating a nuisance. A resident of Wing Fong Court at Lorong 14, who wanted to be known only as Linda, 70, said construction workers and illegal gamblers are among the occupants at the condominium. “I find it uncomfortable because I am staying around this sort of people, but so far they have not disturbed us. That’s why I could stay for so long,” said the part-time staff nurse, who has lived in the condominium for 15 years. She added that prostitutes loiter at the nearby Talma Road, with up to 15 seen at night on weekends and public holidays. Property analysts said the proposal would support the growth of developments that would complement the area’s commercial activities. “Converting the zone to commercial/institutional use will allow (for) more opportunities to leverage the current F&B, entertainment and retail offerings in the area. This might give rise to complementary spin-offs and eventually rejuvenate the precinct as a more commercially-focussed zone,” said Mr Desmond Sim, head of CBRE Research for Singapore and South-east Asia. Colliers International director of research and advisory Chia Siew Chuin said the businesses there disturbed residents in the area “almost on a 24-hour basis”. “In addition, some landlords, who have maximised their properties by cramming as many tenants as possible into some of the various residences there, might turn the area into a potential hotbed of conflict and possible disorder if the residential population continues to increase,” added Ms Chia. The public have until Feb 11 to submit their feedback on the proposed change to the Ministry of National Development. -By Kenneth Cheng http://www.todayonline.com/singapore/no-more-new-homes-geylang-red-light-area-minimise-friction Resale prices of private condos up 0.1% in December: SRX But property consultants view the rise as a blip as demand appears muted for 2015 Source: Business Times / Real Estate A 0.1 per cent rise in resale prices of private condos in December, going by flash estimates of SRX Property, was dismissed by property consultants as a blip as demand appears muted this year. The rise in resale prices from a month ago was driven mainly by transactions in suburban areas (Outside Central Region or OCR), which posted a price rebound of 0.5 per cent last month, after a sharp 2 per cent decline in November. -By Lynette Khoo http://www.businesstimes.com.sg/real-estate/resale-prices-of-private-condos-up-01-in-december-srx Suburban condos holding up better in resale market Their prices fell less than those in city centre, city fringe areas last month Source: Straits Times / Money CONDOMINIUMS in the suburbs proved the most resilient last year despite the sting of cooling measures and strict financing. Although resale prices dipped 4.2 per cent across the board last month from a year earlier, suburban apartment prices fell by a smaller 3.5 per cent, flash estimates from SRX Property showed yesterday. It was a better showing than resale homes in the city fringe areas, where prices slumped 7.5 per cent, and those in the city centre, which fell 6 per cent. Suburban homes also made up the lion's share of resale transactions last year, SRX said, accounting for more than half of the 4,668 deals. "The cooling measures and total debt servicing ratio have been more favourable towards the mass-market segment compared with their central counterparts, as homes in the suburbs have relatively lower price quantums and are mostly supported by upgrader demand," said Ms Christine Li, research head at property firm OrangeTee. Resale volume last month picked up 13.1 per cent from the 328 units resold a year ago - a possible hint of a slight recovery in buying demand as the market finds its feet in the new regulatory climate, added Ms Li. But last month's tally was still down 81.9 per cent against the peak of 2,050 units resold in April 2010. Prices have fallen 6.1 per cent since their recent peak in January last year. SRX's median TOX - a measure of whether buyers were overpaying or underpaying - slipped into negative territory last month. Resale units were snapped up for $10,000 less than the market value of earlier comparable transactions, giving buyers the upper hand in a market suffering from waning demand. This helped to sustain buying momentum in spite of the holiday season, as buyers picked up 371 units last month, the same number as they did in November. "There will be opportunities in the market for properties to be transacted at the right price. There are serious buyers and investors who are able to sniff out good deals," said Mr Mohd Ismail, chief executive of PropNex. As a result, resale prices rebounded from a dip of 1.1 per cent in November to an increase of 0.1 per cent in December. But Mr Ismail said the increase was "insignificant" because of the thin volumes. Resale prices of suburban homes rose 0.5 per cent last month, though prices of apartments in the city fringe areas fell 1.2 per cent, and 1.1 per cent in the city centre. -By Cheryl Ong Private home resale prices, volume end year flat: SRX Resale prices of non-landed private homes rose marginally by 0.1 per cent in December from the previous month, while resale volume remained flat, according to SRX Property.Source: Channel News Asia / Singapore SINGAPORE: Resale prices of non-landed private homes inched up 0.1 per cent in December 2014 from the previous month, while resale volume remained flat, according to flash estimates from SRX Property on Tuesday (Jan 13). Year-on-year, resale prices dropped 4.2 per cent from December 2013. Compared with the recent peak in January 2014, prices have declined 6.1 per cent, SRX said. Resale prices of private homes in the Outside of Central Region rose 0.5 per cent month-on-month. In comparison, prices in the Core Central Region and Rest of Central Region fell 1.1 per cent and 1.2 per cent, respectively. Resale volume remained flat, with 371 units resold in December, unchanged from November. Year-on-year, resale volume was 13.1 per cent higher compared with the 328 units transacted in December 2013. TOX BACK IN NEGATIVE TERRITORY The overall median Transaction Over X-value (TOX), which measures whether people are overpaying or underpaying the SRX Property X-Value estimated market value, fell to -S$10,000 last month from zero in November. For districts with more than 10 resale transactions, districts 25 (Kranji, Woodgrove) had the highest median TOX of S$25,000, followed by district 15 (Katong, Joo Chiat, Amber Rd) with S$24,000. Conversely, district 10 (Bukit Timah, Holland, Tanglin) had the lowest median TOX with -S$80,000, followed by district 23 (Bukit Panjang, Choa Chu Kang) with -S$41,000 and district 5 (Pasir Panjang, Clementi) with -S$32,000. - CNA/cy http://www.channelnewsasia.com/news/singapore/private-home-resale/1586836.html Lower than expected bids at tender for Yishun mixed site Source: Business Times / Real Estate A housing Board tender for a mixed-use commercial/residential site at Yishun Ave 4 which closed on Tuesdaygarnered a "muted" turnout from just five bidders. This fell short of consultants' earlier predicted six, to as many as 18 bidders by the most bullish of the lot. Northern Resi and Northern Retail, both units of listed construction engineering group BBR Holdings, beat four others to offer the highest price of S$185.09 million, which translates to S$629.24 per square foot per plot ratio (psf ppr). -By Lee Meixian http://www.businesstimes.com.sg/real-estate/lower-than-expected-bids-at-tender-for-yishun-mixed-site Just five bids for 99-year leasehold site in Yishun Source: Straits Times / Money DEVELOPERS have shown only lukewarm interest in a 99-year leasehold Yishun site expected to yield about 180 homes and commercial space. Just five bids had been received for the 9,760 sq m site at the junction of Yishun Avenue 4 and Yishun Ring Road by the time the tender closed yesterday. The site, with a gross floor area of 27,327 sq m, is at the southern tip of the Yishun Park area. Khatib MRT station is a 13-minute walk away. The top bid of $185.1 million or $629 per sq ft (psf) per plot ratio (ppr) came from Northern Resi and Northern Retail, units of construction group BBR Holdings. That was just 1.9 per cent above the second bid of $181.6 million from KBD Ventures and Changi Properties, units of Koh Brothers. In third place was a $168 million bid from developer Sim Lian (Focus), followed by a $160 million bid from Wee Hur Development, a unit of Wee Hur Holdings. KSH Land Development, a unit of construction and property group KSH Holdings, was last with a bid of $94.5 million. SLP International executive director Nicholas Mak noted that the closest comparable mixed site, which was developed into Junction Nine and Nine Residences, closed at a land price of $212 million or $794.44 psf ppr with 13 bidders in January 2013. Consultants blamed the muted interest on a cooling residential property market, strong retail competition in the area and higher construction costs. The site is the first of two Government Land Sales sites where the use of a new building method known as prefabricated prefinished volumetric construction (PPVC) is mandatory. PPVC involves assembling whole rooms or apartment units that are manufactured off-site. It is meant to reduce reliance on foreign labour but is likely to lift construction costs. No surprise then that most bidders were developers with a construction arm.
"Such developers have the advantage of being able to control construction costs better, transferring potential savings to their profit margins," said Mr Desmond Sim, head of CBRE Research Singapore and South-east Asia. -By Marissa Lee Companies' Brief Global Logistic Properties adds 6 subsidiaries in China Source: Business Times / Companies & Markets Mainboard-listed Global Logistic Properties has incorporated four and acquired two new indirect subsidiaries in China. The six new subsidiaries are involved in distribution facilities and services http://www.businesstimes.com.sg/companies-markets/in-brief-16 Lian Beng Group Source: Business Times / Companies & Markets Lian Beng announced H1FY15 profit after tax and minority interests (Patmi) of S$35.5 million, up 105.2 per cent year-on-year mostly due to its share of results of associates and joint ventures improving from a loss of S$9.6 million in H1FY14 to a profit of S$21.5 million in H1FY15, as the group divested its stake in the hotel development at Middle Road and recognised profits from its stakes in residential property projects at Newest, KAP Residences and The Midtown. http://www.businesstimes.com.sg/companies-markets/brokers-take-42 Views, Reviews & Forums No more land? Build floating real estate Source: Today Online / Commentary Singapore is the third-densest city in the world. But unlike other large cities, it is without a hinterland. There is no buffer for spillovers. The sea has to serve as the island-state’s “hinterland”. The Singapore coastline is similar to a column of ants, made up of airports, ports, shipyards, power stations and recreation parks. One golf course, also on the coastline, is on its way out. Inland, about 5.5 million citizens and foreigners have homes in ever-taller towers. Roads are congested and trains packed every morning. No wonder then, the White Paper on population tabled in 2013 sparked an outcry from Singaporeans, even though the population was projected to grow by about 1.5 million in 17 years, a rise of only 1 per cent per year. Intellectuals weighed in. Professor Kishore Mahbubani of the Lee Kuan Yew School of Public Policy (LKYSPP) advocated fewer roads. Dr Liu Thai Ker, also from LKYSPP, said that with proper planning, Singapore has room for 10 million people. One idea has yet to capture the imagination of our state planners: Floating real estate. Singapore has 719km2 of land, but many forget it may have as large a space just outside the coastline over which the country has jurisdiction and development rights. The sea appears to be a forgotten resource. VLFS, or Very Large Floating Structure, is a subject of many academic treatises and research efforts all over the world. National University of Singapore Professor C M Wang and his colleagues have published many papers and filed a patent in the United States Patent Office on the subject. Technology exists today to build, launch, join and maintain VLFSs, each capable of providing huge platforms with service life exceeding 50 years. Singapore waters are calm, no breakwaters are necessary to protect the floats. Secure mooring can be achieved at modest cost to keep floats in position under the worst wind and wave conditions. Singapore offshore rig builders have experience in many proven mooring systems. Floating just above water, VLFSs are visually and environmentally unobtrusive. When obsolete, it may be sunk to provide habitat for marine life. The applications for VFLSs are limited only by the imagination. To get a flavour of the possibilities, one only has to see the gallery of images at Google Image. They range from the mundane to the exciting and exotic; from workers’ dormitories and desalination plants to six-star hotels and office towers, from retirement villages to airport runways and passenger terminal buildings. A floating complex is not necessarily a flat barren platform. It can be as visually exciting as Marina Bay or as quaint as Venice with its footpaths and gondolas and total absence of cars. A VLFS is not a single monolithic structure. It is an assembly of modules connected together. Moored VLFSs may rise and fall with the tide or could be always fixed at a certain elevation. Mooring it is possible at modest cost. Over the years, experience gained in the offshore rig industry has produced many proven mooring solutions. VLFSs may be constructed of steel or concrete, not unlike tunnel segments for the MRT. The cost of making such a VLFS is about S$300 to S$600 per square metre. With a service life of 50 years, it compares favourably with land lease costs in Singapore. The nation’s experience with the Float at Marina Bay and the upcoming Floating Wetlands at Punggol — both classified as large floating structures — may provide the inspiration for greater use of floating structures here. EXCITING POSSIBILITIES Floating real estate can be a reality, but it would require passion on the part of the bureaucracy to venture beyond their comfort zone. Needless to say, a well-planned infrastructure has to be put in place to support them as is also the case with new real estate on land. Electricity and water may be supplied from the mainland or can be generated on board. Sewage is treatable afloat. Treated affluent can be discharged overboard. Garbage can be consolidated and barged to floating incinerators. Connectivity to the mainland is important and this is easily realised by floating bridges or ferry services. It is worth noting that floating expressways are successfully in use in Canada and Norway. The government has to take ownership of the “town planning”. The subdivision of designated plots and the infrastructure to provide to the floats and from the mainland needs to be the job of the authorities. The task of design, engineering, risk analysis and building of the platform could be assigned to the private sector exclusively or jointly with the government. Shipping is critical to our economy, but shipping lanes need a lot of sea space. The announced relocation to Tuas of the container ports at Keppel and Pasir Panjang will free up a huge stretch of sea space. The shipping lanes in the north-east are principally to serve Sembawang Shipyard and Senoko Power Station. If these two entities can be moved to Tuas, Singapore can fully exploit the long, if narrow, stretch of water from Changi Airport to Woodlands. The following developments can be built as VLFS clusters: • City Clusters for hotels, offices, restaurants, cultural and recreational activity spaces, libraries, museums, etc; • Institutional Clusters for colleges, international schools, hospitals, retirement villages, hospices, etc; • Industrial Clusters for shipyards, incinerators, tank farms, desalination, chemical and power plants, etc; • Residential Clusters for apartments, terrace houses, bungalows, community shopping and facilities, etc. The above are exciting possibilities. With land-intensive industries relocated offshore, there is reduced pressure to build more roads and parking spaces. Congestion on existing highways could also be eased and there will be affordable alternatives to industries crippled by sky-rocketing land rentals. Fifty years ago, Goh Keng Swee had the vision to transform the swamps of Jurong into an industrial estate. It took guts and conviction to succeed, and succeed he did. If we are to plan for 10 million people, as Dr Liu advocates, and reduce the network of roads, as Prof Mahbubani champions, we need the next Goh Keng Swee to take us from terra firma to terra aqua. Do we have the politicians and planners who, as former chief Defence Scientist Lui Pao Chuen put it, “dare to try”? Singapore has provided public housing for more than 80 per cent of its people. We are on the way to becoming self-sufficient in water despite the absence of rivers. Limitation on land has forced us to build airport and seaports on reclaimed land. We are the world’s largest offshore rig builder even though the only oil Singaporeans see comes in cans. Singapore has faced challenges. We have overcome them.
The challenge of creating floating real estate beckons. Necessity will make it happen. -By Lim Soon Heng Consultant in shipyard planning and development EMAS Consultants LLP http://www.todayonline.com/commentary/no-more-land-build-floating-real-estate Tweak housing policies to reinforce filial piety Source: Straits Times / Forum Letters WHILE Mr Soh Kar Chiang suggested that allowing singles to buy three-room flats might spur an increase in the birth rate ("Letting singles buy 3-room flats can be pro-family"; last Thursday), I feel that singles willing to let their aged parents move in with them, while the latter keep their HDB flats for rental income, are more deserving of being allocated such flats. It is quite impossible for three adults to be squeezed into one bedroom in a two-room flat. To encourage children to show filial piety to their parents, it is only logical for the authorities to give top priority to such people in the allocation of three-room flats. Another suggestion related to filial piety is the allocation of Build-to-Order flats to Singaporeans whose parents are private property owners. Most young couples cannot afford private properties. But, like their peers living in HDB flats with their parents before marriage, Singaporeans with parents living in private properties would like to live as close as possible to their elderly parents after getting married. This could be encouraged by giving them priority when they apply for HDB flats near their parents' homes. With the proportion of the elderly increasing rapidly, assistance should be offered to those willing to play a part in taking care of their aged family members.
Otherwise, society will have to shoulder a heavier burden. -By Kok Kam Heng Private sector can do more to curb mortgage defaults Source: Straits Times / Forum Letters IT IS disconcerting to learn that more people are defaulting on their mortgages, never mind that not all are ruthless defaults ("Mortgagee sales rocket as more default on loans"; Monday). The 159 mortgagee sales last year, up from 32 in 2013, represent a whopping - and very worrying - increase of almost 400 per cent. With great foresight, the Government had earlier put in place measures, including the total debt servicing ratio, to arrest this trend. That these have not succeeded in sufficiently tempering mortgage defaults suggests that the private sector can perhaps do more. For instance, are banks and non-bank lenders doing enough to comprehensively assess customers for their propensity to default, using scorecards that utilise both quantitative and qualitative variables? Could their credit collection teams be doing more, by way of debt consolidation or affordable payment arrangements, to help customers whose loan accounts are at risk of turning delinquent? Are the banks' loan underwriting businesses being monitored for compliance, to check for excessive risk-taking?
I hope the institutions can monitor and address the problem of surging mortgagee sales, with guidance from the Monetary Authority of Singapore, to avoid a repeat of the 2007-2008 global financial crisis. -By Woon Wee Min Global Economy & Global Real Estae Report on Forest City project gets nod from M'sian environment department Source: Business Times / Real Estate A detailed environmental impact assessment (DEIA) report for the proposed Forest City Island Reclamation and Mixed Development off southwest Johor has been approved by Malaysia's Department of Environment (DoE), paving the way for the project's continuation. -By Pauline Ng Kaisa's ties to official under investigation being probed Source: Business Times / Real Estate http://www.businesstimes.com.sg/real-estate/kaisas-ties-to-official-under-investigation-being-probed Eco World buys 75% stake in London residential projects worth £2.2b Source: Business Times / Real Estate Two Thai property developers plan Reit IPOs Source: Business Times / Companies & Markets http://www.businesstimes.com.sg/companies-markets/two-thai-property-developers-plan-reit-ipos Homeowners Win U.S. High Court Clash on Canceling Mortgages Source: Bloomberg / News The U.S. Supreme Court gave homeowners more ability to cancel their mortgages if lenders don’t provide the required disclosures, in a setback for the banking industry. The dispute centered on the three-year deadline for borrowers seeking to rescind their mortgages. The justices today said unanimously that borrowers don’t have to file suit within three years and instead can meet the deadline by sending a letter to lenders. The issue is one that the banking industry says has arisen frequently in recent years with borrowers who are in default on their mortgages and are facing foreclosure. The Supreme Court ruling is a victory for Larry and Cheryle Jesinoski, who in 2007 refinanced their Eagan, Minnesota, home for $611,000 with Countrywide Home Loans Inc., now part of Bank of America Corp. (BAC) Exactly three years later, the Jesinoskis sent the lender a written notice that they wanted to rescind the accord, saying they hadn’t received copies of two disclosure forms required under federal law. Bank of America refused to cancel the mortgage, and the Jesinoskis sued. The ruling doesn’t necessarily mean homeowners will be able to escape paying their mortgages. The Jesinoski case now returns to a lower court, where Bank of America will have a chance to argue that the couple received the required forms. Bank of America says the Jesinoskis signed an acknowledgment that they were provided with the disclosures. Lending LawUnder the U.S. Truth in Lending Act, borrowers have three days to rescind a mortgage after they receive the disclosures. That right expires after three years, even if the forms are never provided. In his opinion for the court today, Justice Antonin Scalia wrote that the lending statute says “in unequivocal terms” that the borrower can rescind the mortgage simply by notifying the lender. “So long as the borrower notifies within three years after the transaction is consummated, his rescission is timely,” Scalia wrote. “The statute does not also require him to sue within three years.” The case is Jesinoski v. Countrywide Home Loans, 13-684. -By Greg Stohr Forest City Enterprises to Pursue Conversion to a REIT Source: Bloomberg / News Forest City Enterprises Inc. (FCE/A) said it plans to convert to a real estate investment trust, taking advantage of the tax-saving structure after shifting its focus from development to also owning properties. Forest City, the operator of the Barclays Center arena in Brooklyn, plans to elect REIT status for the year starting next Jan. 1, the Cleveland-based company said in a statement today. REITs pay at least 90 percent of their taxable income to shareholders in the form of dividends, in exchange for not having to pay federal taxes on those earnings. “Becoming a REIT is a logical step that will allow us to maintain a tax-efficient structure to continue to drive shareholder value, while also instituting a regular quarterly dividend to shareholders,” Chief Financial Officer Robert G. O’Brien said in the statement. The Bloomberg REIT index gained 24 percent last year, compared with an 11 percent advance for the Standard & Poor’s 500 Index. Rising rents and occupancies have boosted earnings for landlords and made their stocks more attractive to investors. Casino operators, a telecommunications provider and retailer Sears Holdings Corp. (SHLD) are considering or going ahead with plans to spin off their properties into trusts. Forest City is selling off properties in markets including Cleveland and focusing on cities such as New York, Washington and Los Angeles. On its Nov. 4 earnings call, the company said it would be willing to consider selling a stake in the Barclays Center, home to the National Basketball Association’s Brooklyn Nets. The company owns retail, apartment and office properties around the U.S. Last year through September, the largest chunk of the company’s net operating income came from its office business. Forest City announced its plans after the close of regular U.S. trading. The shares rose 3.8 percent to $22.21 today and have gained 19 percent in the past year. -By Brian Louis http://www.bloomberg.com/news/2015-01-13/forest-city-enterprises-to-pursue-conversion-to-a-reit.html KB Home Falls Most in 22 Years on Profitability Forecast Source: Bloomberg / Luxury KB Home fell the most in two decades after saying its gross margin will narrow significantly this quarter and that profitability in 2015 will be restricted by flattening prices and rising land costs. Shares of the Los Angeles-based builder slumped 16 percent to $13.87 today after the company said it’s unlikely to meet its goal of a 20 percent margin this year. It was the biggest decline since August 1992. “We know that our gross margin will continue to lag the prior-year comp for some time,” Chief Executive Officer Jeffrey Mezger said on a conference call today. Homebuilders have been increasing incentives to help boost sales as strict lending standards and rising prices cut into demand, while higher land and labor costs squeeze profitability. Purchases of new homes declined in November to a four-month low, according to the latest sales figures from the Commerce Department. KB Home’s results are “certainly disappointing -- especially the commentary on forward margins,” Megan McGrath, an analyst with MKM Holdings LLC in Stamford, Connecticut, said in a telephone interview. “It sounds like the higher incentives we started to hear about in the middle of 2014 perhaps got worse, at least for KBH, as the fourth quarter wore on.” Inland California was “quite a bit softer” and KB Home (KBH) “pulled out of a couple of land transactions” in the Houston area in the fiscal fourth quarter, Mezger said on today’s call. The Texas region has been hurt by the decline in oil prices. Land CostsKB Home’s report reminded investors that land costs are going up for homebuilders as they work their way through lower-priced lots purchased after the housing crash, said Joel Locker, a San Diego-based analyst with FBN Securities Inc. It was a “wake-up call, where investors say all the estimates for builders are too high for 2015,” he said in a phone interview. “Overall, demand is not where it was.” The Standard & Poor’s Supercomposite Homebuilding Index fell 3.2 percent, the most in a month. KB Home had the biggest decline in the index, followed by Standard Pacific Corp. (SPF) and D.R. Horton Inc. (DHI) Toll Brothers Inc. (TOL), the largest U.S. builder of luxury homes, dropped the most in almost two years on Dec. 10 after announcing that it had limited pricing power and expected flat sales in 2015. -By John Gittelsohn and Prashant Gopal HUD Homeownership Push to Heed Lessons From Crisis, Castro Says Source: Bloomberg / News Now that regulators have fixed the worst abuses of the 2008 credit crisis, it’s time to start promoting homeownership again, according to the top U.S. housing official. The Department of Housing and Urban Development will do its part, spending this year focusing on ways to help more Americans buy homes, HUD Secretary Julian Castro said today in a Washington speech outlining the agency’s priorities. “Some have been surprised by this focus,” Castro said at the National Press Club. “A few have even suggested that this is a return to the mania that fueled the crisis. It’s not. Our nation is smart enough to heed the lessons of the past without forsaking our future. The answer isn’t to deny responsible Americans homeownership — it’s to do it right.” As a first step, Castro and President Barack Obama last week announced a cut in the premiums charged by the Federal Housing Administration as a way to expand homeownership among lower-income borrowers. The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance. Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes. The move reverses years of increases in FHA premiums to offset losses caused by defaults on mortgages it backed after the housing bubble burst. Housing industry participants said the increases in annual fees squeezed buyers with modest incomes out of the market. Republicans criticized the premium cut because the FHA’s insurance fund is still below minimum required levels. The FHA is required to keep enough on hand to cover all projected losses in its portfolio, plus a 2 percent cushion, a level it isn’t projected to reach until fiscal 2016. No further reductions are currently on the table, Castro said today. -By Clea Benson Dubai Home Sales Fell 3.2% Last Year on Cooling Measures Source: Bloomberg / Luxury Dubai home sales fell 3.2 percent by value last year after the government took steps to slow soaring prices. Home sales by value declined to 60 billion dirhams ($16.3 billion) in 2014 from 62 billion dirhams in 2013, Dubai’s Land Department said in a press release today. Total real estate sales, including land and commercial property, dropped 7.6 percent to 218 billion dirhams, the department said. Dubai’s home prices surged 35 percent in 2013, prompting the sheikhdom’s government to double a transaction tax and the United Arab Emirates central bank to restrict mortgages. Officials at the International Monetary Fund on Nov. 6 said Dubai had done enough to control property prices six months after warning the surge in prices was “unsustainable.” The real estate market is showing a “trend towards maturity,” said Sultan Butti bin Mejrin, director general of the Dubai Land Department. That will help attract investment, he wrote. The most apartment sales took place in Business Bay with 4,315 transactions valued at 7.20 billion dirhams. Dubai Marina came second while Al Thenaya Al Khamesa was third with 2,615. Total real estate transactions fell 15 percent from last year to 53,871. -By Zainab Fattah Additional Articles of Interests - Local & Overseas Real Estate |
