News and Views

Thursday, 15 November, 2012

RESIDENTIAL MARKET

Signs of HDB resale market stabilising: Khaw

The HDB resale market has shown signs of stabilising, National Development Minister Khaw Boon Wan said in Parliament yesterday.
He cited latest figures that showed how the annual Resale Price Index (RPI) growth had fallen from 14.1 per cent in 2010, to 10.7 per cent last year and to 3.9 per cent in the first nine months of 2012.
He was responding to queries by MP Lee Bee Wah (Nee Soon group representation constituency), who had asked whether there was any cause for concern due to HDB resale prices hitting a high in the third quarter of this year.
In his reply, Mr Khaw added that while the uptick in quarterly RPI growth to 2 per cent in the third quarter of this year showed that the situation was improving, there was still much more to be done.
“We have implemented a number of measures but they will take some time to work their way through the market. For example, the huge supply of new housing units will be available only over the next 2-3 years,” said Mr Khaw.
Separately, the minister was also quizzed by MP Lim Biow Chuan (Mountbatten) on the success rate for HDB loans in the last three years.
Mr Khaw said that just 2 per cent of a total of 178,000 applications – or 3,500 cases – were rejected from January 2010 to September this year.
They were turned down because the applicants had already taken two or more HDB loans previously.
“The rejection rate is rather low, but in any case we do exercise discretion and provide sympathy where we can,” said Mr Khaw.
He shared that the success rate for appeals for HDB loans was currently about one in three, or 36 per cent – a figure which he described as “pretty high” and “quite good”.
Mr Khaw later said that while home ownership was a social objective for the government, this had to be “underpinned by prudence” as well.
“Let’s not forget that (there was) a huge problem in the US with the sub- prime (mortgage) crisis. While we will try to make sure everyone can afford to own a home, I think that for everyone to get a loan is a bit unrealistic,” said Mr Khaw.
Source: Business Times –15 November 2012
KL-S’pore venture unveils plans for Bugis project
Khazanah Nasional and Temasek Holdings yesterday unveiled details of their second development project together.
DUO, as the project has been named, will comprise two towers of residential, retail, hotel and Grade A office space in Bugis, and be directly connected to the Bugis MRT station.
Designed by architect Ole Scheeren, it will have a gross floor area (GFA) of 1.8 million square feet, and a development value exceeding $3 billion.
Nearly half its GFA – 45 per cent or 810,000 sq ft – will be dedicated to residential space; the 660 units will occupy a 50-storey tower.
Offices, retail outlets and a 300-room, five-star hotel will be in the other tower, which will stand 39 storeys tall.
The hotel will take up 15 per cent of the GFA, or 270,000 sq ft.
The remaining 40 per cent or 720,000 sq ft will be given over to offices and shops, with the offices taking the bulk of that space.
M+S, the 60:40 joint venture vehicle between Khazanah and Temasek that is behind the project, said it aims to complete the development in the second quarter of 2017.
Plans are being made to launch the sale of the units in the residential tower early next year.
M+S chairman Azman Yahya said he expects demand for the residential and office space in DUO to be strong; in particular, he expects the 99-year leasehold homes to attract international buyers.
“We do expect strong demand. We think around that area it is quite a unique development. There are not that many offerings around the Bugis area. And based on cold calls we have been getting . . . there seems to be a lot of interest, both in the commercial as well as the residential site,” he said.
DUO is one of two projects undertaken by M+S – the other is in Marina South – in a 2010 land swap deal between Singapore and Malaysia, under which Malaysian railway land in Tanjong Pagar, Kranji, Bukit Timah and Woodlands was returned to Singapore in exchange for four land parcels in Marina South and two in Ophir-Rochor. The projects have a total development value of $11 billion.
M+S unveiled details of the Marina South project, called Marina One, in July this year, but will do so for its design only next year, said Mr Azman.
CapitaLand and UEM Land Holdings are project managers for DUO.
UEM is partnering Mapletree Investments to manage Marina One, also expected to be completed in 2017.
Mr Azman disclosed that M+S is in talks with several five-star hotel operators to manage the hotel component.
“I think we’ll probably finalise the operator some time in the later part of next year,” he said.

Source: Business Times –15 November 2012

COMMERCIAL MARKET
Lego S’pore among latest tenants at MBFC’s Tower 3
Marina Bay Financial Centre (MBFC) has secured new leases in its Tower 3 building, which brings the overall commitment level at the tower to 76 per cent, or nearly 960,000 square feet.
Raffles Quay Asset Management (RQAM), the manager for MBFC, said yesterday that the building, which offers 1.3 million sq ft of prime Grade A office space, had secured new tenants such as Lego Singapore, which supplies products of Denmark-based firm Lego, and New York-based international legal firm Milbank, Tweed, Hadley & McCloy LLP.
Earlier this month, BT reported that French banking group CIC, now located in Market Street, had signed a lease to take up 31,000 sq ft of space on the 37th floor of Tower 3.
The new tenants will join existing ones such as DBS Bank, Ashurst LLP, Clifford Chance, WongPartnership, Mead Johnson and McGraw-Hill in the 46-storey tower.
Said Warren Bishop, chief executive of RQAM: “We continue to see a healthy pipeline of interest from companies and prospects for Tower 3 who want to be part of this . . . development.
“With Singapore being positioned as the Asian financial gateway, we are confident that MBFC remains the choice location for multinational corporations.”
RQAM also said yesterday that the 179,000-sq-ft Marina Bay Link Mall, the retail component of MBFC, is now 100 per cent leased.
Urban Redevelopment Authority data indicates that the net increase in demand for islandwide office space for the third quarter of this year was 764,237 sq ft, taking the figure for the first nine months to 1.69 million sq ft.
The figure for last year was 2.3 million sq ft.
On the supply side, CBRE estimates that this year, 1.4 million sq ft of office space would be built, down from last year’s three million sq ft.
Next year, some 2.6 million sq ft of offices are slated for completion from projects such as Asia Square Tower 2 in the central business district, Jem next to Jurong East MRT station and The Metropolis in Buona Vista.

Source: Business Times –15 November 2012