THE Straits Trading Company (STC) is taking over a private developer and its cluster bungalow project at Chancery Lane.
It said on Monday that it would pay an aggregate of some $13.9 million for the proposed acquisition of Tertius Development Pte Ltd, including the assignment of specified shareholders’ loans. The vendors are two individuals.
With the deal, STC will gain control of Chancery Five, a project with 12 freehold strata bungalows at 5 Chancery Lane. The development is next to Anglo-Chinese School (Primary) and Anglo-Chinese School (Barker Road).
Each bungalow will have five rooms, an entertainment room, an attic, a private basement car park, a private swimming pool and a lift spread across two levels. The homes will range from 4,800 square feet to 6,500 sq ft in size.
Tertius’ commitment to the project – including land cost, development cost and incidental selling costs – up to 2012 is estimated by the purchaser at about $58.24 million.
Eric Teng, chief executive of STC’s property arm, told BT that his unit has been looking out for opportunities in the property market. He has not set a date for the launch of Chancery Five. The project is under construction and could obtain temporary occupation permit in April next year.
According to caveats lodged with the Urban Redevelopment Authority, a detached house at Chancery Lane changed hands at $900 per sq ft in November last year.
STC’s acquisition is expected to be completed in April. The company does not foresee the purchase having a significant impact on its financial position for the year ending Dec 31, 2010.
STC shares rose five cents yesterday to close at $4.15.
Source : Business Times – 3 Mar 2010
Thursday, April 8, 2010
Big boys go looking for swank, new offices
IDA said to have leased 160,000 sq ft; rents may inch up as banks expand in prime areas
The upswing in office leasing deals that started around July last year shows no signs of letting up. The healthy demand has persuaded some property consultants that rents for the best quality space in Singapore’s financial district could be close to their bottom and poised to perk up.
The Infocomm Development Authority (IDA) is understood to have inked a lease for about 160,000 square feet at Mapletree Business City on Pasir Panjang Road.
This is said to be spread over six floors in the 18-storey office tower of the development, which is expected to receive Temporary Occupation Permit (TOP) soon. With IDA secured as a tenant, the tower’s 436,300 sq ft net lettable space is now fully leased, BT understands. The project is near Labrador Park MRT Station, which opens next year.
IDA is expected to move out of Suntec City, where its lease is said to be expiring next year.
Barclays Capital, which has leased 100,000 sq ft at Marina Bay Financial Centre’s Tower 2, is said to be close to inking a deal for another 250,000 sq ft in the same tower, which is expected to receive TOP next quarter. The bank is expected to exit from Atrium @ Orchard.
Barclays also occupies about 100,000 sq ft at One Raffles Quay’s South Tower and its retail bank has a technology centre at Eightrium @ Changi Business Park. The bank’s headcount in Singapore has increased from just several hundred people in 2004 to over 3,500 currently. Of these, about 2,000 are employed at Barclays Capital Global Support Hub.
As new office projects are rolled out, big tenants such as banks are being offered more choices. For instance, ANZ, which is currently at OUB Centre at 1 Raffles Place, is said to be deciding whether to move to the new tower being built in the same development, or to Ocean Financial Centre along Collyer Quay.
The latter, a 43-storey development under construction that will have about 850,000 sq ft net lettable area, is also said to have attracted some tenants from Ocean Towers next door. These include Ifast, Verizon Communications and DMG & Partners Securities.
Other tenants at Ocean Financial Centre are said to include Stamford Law Corporation, which is currently in Republic Plaza, and serviced office operator The Executive Centre.
Colliers International executive director Calvin Yeo said: ‘We are starting to see our clients, who are MNCs including financial institutions, planning for expansion as their existing leases approach expiry.’
While some of the initial buzz in the office leasing market was a game of musical chairs involving relocating from older buildings to newer properties, the market is now starting to move beyond replacement demand to actual expansion or new demand, say market watchers.
‘We’re seeing quite a few law firms from Europe coming to Singapore as well as existing law firms in Singapore expanding,’ says Jones Lang LaSalle regional director and head of markets Chris Archibold.
‘Insurance companies are starting to look at headcount growth of about 5 per cent this year followed by a further 5-10 per cent per annum for the next few years. Banks are boosting their headcount, not just for private banking but across the board. We’re seeing a number of them bringing high-end back-office support functions again to Singapore,’ he added.
Mr Archibold reckons that for international standard prime Grade A offices in the Raffles Place and Marina Bay area, rents will probably bottom out at their current levels of about $8 psf a month for smaller occupiers and $7 psf for bigger occupiers. These levels are about 58 per cent below the Q3 2008 peak figures. ‘However, rents for A- and B+ grade offices may still decline a few per cent from current levels though the drop should end by Q4 2010.’
Another office property consultant also said that office landlords are more confident and not prepared to discount rents any further. ‘But older buildings may relatively underperform and that means rentals in even good-quality buildings may not rebound quickly until space availability in new developments tightens,’ he added.
Others are more optimistic. UBS has predicted a 30 per cent jump in the average monthly Grade A office rental value from $8.10 psf at the end of last year to $10.60 psf at end-2010, citing growth in demand. The impact of new office completions is not likely to be as grave as feared earlier since some one million sq ft of existing office stock is expected to be removed in 2010-2011 for conversion to residential use.
Source : Business Times – 3 Mar 2010
The upswing in office leasing deals that started around July last year shows no signs of letting up. The healthy demand has persuaded some property consultants that rents for the best quality space in Singapore’s financial district could be close to their bottom and poised to perk up.
The Infocomm Development Authority (IDA) is understood to have inked a lease for about 160,000 square feet at Mapletree Business City on Pasir Panjang Road.
This is said to be spread over six floors in the 18-storey office tower of the development, which is expected to receive Temporary Occupation Permit (TOP) soon. With IDA secured as a tenant, the tower’s 436,300 sq ft net lettable space is now fully leased, BT understands. The project is near Labrador Park MRT Station, which opens next year.
IDA is expected to move out of Suntec City, where its lease is said to be expiring next year.
Barclays Capital, which has leased 100,000 sq ft at Marina Bay Financial Centre’s Tower 2, is said to be close to inking a deal for another 250,000 sq ft in the same tower, which is expected to receive TOP next quarter. The bank is expected to exit from Atrium @ Orchard.
Barclays also occupies about 100,000 sq ft at One Raffles Quay’s South Tower and its retail bank has a technology centre at Eightrium @ Changi Business Park. The bank’s headcount in Singapore has increased from just several hundred people in 2004 to over 3,500 currently. Of these, about 2,000 are employed at Barclays Capital Global Support Hub.
As new office projects are rolled out, big tenants such as banks are being offered more choices. For instance, ANZ, which is currently at OUB Centre at 1 Raffles Place, is said to be deciding whether to move to the new tower being built in the same development, or to Ocean Financial Centre along Collyer Quay.
The latter, a 43-storey development under construction that will have about 850,000 sq ft net lettable area, is also said to have attracted some tenants from Ocean Towers next door. These include Ifast, Verizon Communications and DMG & Partners Securities.
Other tenants at Ocean Financial Centre are said to include Stamford Law Corporation, which is currently in Republic Plaza, and serviced office operator The Executive Centre.
Colliers International executive director Calvin Yeo said: ‘We are starting to see our clients, who are MNCs including financial institutions, planning for expansion as their existing leases approach expiry.’
While some of the initial buzz in the office leasing market was a game of musical chairs involving relocating from older buildings to newer properties, the market is now starting to move beyond replacement demand to actual expansion or new demand, say market watchers.
‘We’re seeing quite a few law firms from Europe coming to Singapore as well as existing law firms in Singapore expanding,’ says Jones Lang LaSalle regional director and head of markets Chris Archibold.
‘Insurance companies are starting to look at headcount growth of about 5 per cent this year followed by a further 5-10 per cent per annum for the next few years. Banks are boosting their headcount, not just for private banking but across the board. We’re seeing a number of them bringing high-end back-office support functions again to Singapore,’ he added.
Mr Archibold reckons that for international standard prime Grade A offices in the Raffles Place and Marina Bay area, rents will probably bottom out at their current levels of about $8 psf a month for smaller occupiers and $7 psf for bigger occupiers. These levels are about 58 per cent below the Q3 2008 peak figures. ‘However, rents for A- and B+ grade offices may still decline a few per cent from current levels though the drop should end by Q4 2010.’
Another office property consultant also said that office landlords are more confident and not prepared to discount rents any further. ‘But older buildings may relatively underperform and that means rentals in even good-quality buildings may not rebound quickly until space availability in new developments tightens,’ he added.
Others are more optimistic. UBS has predicted a 30 per cent jump in the average monthly Grade A office rental value from $8.10 psf at the end of last year to $10.60 psf at end-2010, citing growth in demand. The impact of new office completions is not likely to be as grave as feared earlier since some one million sq ft of existing office stock is expected to be removed in 2010-2011 for conversion to residential use.
Source : Business Times – 3 Mar 2010
Call for review of housing policies
ALTHOUGH it was not directly addressed in Budget 2010, worries about the cost of housing in Singapore were reflected in several MPs’ speeches yesterday.
There were calls to review housing policies, including current rules that allow private property owners to buy HDB flats and to sublet them.
It was also suggested that the $8,000 household income ceiling be raised to allow more Singaporeans to buy new subsidised flats (that are not executive condominiums) from the Housing Board.
The growing number of new immigrants in recent years has caused not just a squeeze on jobs, but also on transport and housing, said MPs.
Mr Inderjit Singh (Ang Mo Kio GRC) said: ‘By bringing in too many people too quickly…the cost of living has gone up rapidly. The clearest manifestation of this is the cost of HDB flats.’
He said though permanent residents (PRs) cannot buy new flats, they still indirectly inflate prices. This is because demand by PRs in the resale market can push up prices, and the price of new HDB flats is pegged to the resale market.
There are also many PRs who rent HDB flats and this contributes to the upward pressure on flat prices, he added.
HDB resale prices have risen about 40 per cent in the past three years, far outstripping Singapore’s economic growth.
The Ministry of National Development has maintained that PRs, who make up only one in five resale flat buyers, have minimal impact on resale prices.
Yesterday’s debate also saw Dr Ahmad Magad (Pasir Ris-Punggol GRC) raise concerns on the effectiveness of recent measures to curb property speculation.
Three days before the Budget statement on Feb 22, the Government announced new rules: A property buyer has to pay extra stamp duty if he sells the property within a year; and the amount buyers can borrow from lending institutions was reduced from 90 per cent to 80 per cent of the property’s value.
Despite these measures, people are still thronging showrooms and snapping up properties, said Dr Ahmad.
He was particularly concerned about the policy that allows private property owners to own HDB flats as well. While the policy says they must live in the flats, anecdotal evidence shows many do not, and are renting them out. ‘If no stern action is taken, it will encourage more dual property owners to do the same,’ he said.
Mr Sin Boon Ann (Tampines GRC) wants the Government to review the income ceiling for a group of young Singaporeans – graduates who have worked a few years before deciding to settle down – struggling to buy a new HDB flat.
He argued that not all couples whose incomes exceed the current limit can afford private housing, or have enough cash to meet the down payment for a pricier resale HDB flat from the secondary market.
National Development Minister Mah Bow Tan said recently the Government was looking into measures for the HDB market and that announcements would be made in Parliament some time this week or the next.
Source : Straits Times – 3 Mar 2010
There were calls to review housing policies, including current rules that allow private property owners to buy HDB flats and to sublet them.
It was also suggested that the $8,000 household income ceiling be raised to allow more Singaporeans to buy new subsidised flats (that are not executive condominiums) from the Housing Board.
The growing number of new immigrants in recent years has caused not just a squeeze on jobs, but also on transport and housing, said MPs.
Mr Inderjit Singh (Ang Mo Kio GRC) said: ‘By bringing in too many people too quickly…the cost of living has gone up rapidly. The clearest manifestation of this is the cost of HDB flats.’
He said though permanent residents (PRs) cannot buy new flats, they still indirectly inflate prices. This is because demand by PRs in the resale market can push up prices, and the price of new HDB flats is pegged to the resale market.
There are also many PRs who rent HDB flats and this contributes to the upward pressure on flat prices, he added.
HDB resale prices have risen about 40 per cent in the past three years, far outstripping Singapore’s economic growth.
The Ministry of National Development has maintained that PRs, who make up only one in five resale flat buyers, have minimal impact on resale prices.
Yesterday’s debate also saw Dr Ahmad Magad (Pasir Ris-Punggol GRC) raise concerns on the effectiveness of recent measures to curb property speculation.
Three days before the Budget statement on Feb 22, the Government announced new rules: A property buyer has to pay extra stamp duty if he sells the property within a year; and the amount buyers can borrow from lending institutions was reduced from 90 per cent to 80 per cent of the property’s value.
Despite these measures, people are still thronging showrooms and snapping up properties, said Dr Ahmad.
He was particularly concerned about the policy that allows private property owners to own HDB flats as well. While the policy says they must live in the flats, anecdotal evidence shows many do not, and are renting them out. ‘If no stern action is taken, it will encourage more dual property owners to do the same,’ he said.
Mr Sin Boon Ann (Tampines GRC) wants the Government to review the income ceiling for a group of young Singaporeans – graduates who have worked a few years before deciding to settle down – struggling to buy a new HDB flat.
He argued that not all couples whose incomes exceed the current limit can afford private housing, or have enough cash to meet the down payment for a pricier resale HDB flat from the secondary market.
National Development Minister Mah Bow Tan said recently the Government was looking into measures for the HDB market and that announcements would be made in Parliament some time this week or the next.
Source : Straits Times – 3 Mar 2010
Co-owner loses fight to stop collective sale
A MAN did not want to sell his apartment in a proposed collective sale, but his wife wanted to – and had signed on the dotted line to say yes.
The sale of the Joo Chiat property thus hung in limbo for three years while the lone dissenter, Mr Goh Teh Lee, 52, took his fight all the way to the highest court in the land.
En route, the couple divorced.
Yesterday, he lost the battle. The Court of Appeal threw out his case, paving the way for the sale.
The court, comprising Judges of Appeal Chao Hick Tin, Andrew Phang and V. K. Rajah, were unanimous in deciding that Mr Goh, as a co-owner, did not have the right – known in legal parlance as locus standi – to be heard in court, since he and his now ex-wife had to act as one in the en bloc sale.
Despite being told this, Mr Goh, who represented himself in court, insisted he had a strong case for objecting to the sale on the basis of procedural irregularities and unfairness.
But Justice Chao remarked: ‘We are extremely doubtful that your case is strong. Most, if not all, of the points you raised are without merit.’
Justice Rajah piped in: ‘And we are being polite.’
The property in question comprised 24 apartments in a four-storey block known as Koon Seng House and nine pre-war terrace houses on one plot of land. The collective sale was mooted at a residents’ meeting in November 2006, when the Gohs were going through their divorce.
The sales proceeds, $21.12 million, were to be divided equally among the 33 units. The terrace houses were owned by a single owner, and the apartments, by different individuals.
Mr Goh asserted that there were discrepancies in the collective sale agreement, such as dodgy signatures.
He contended that the deal was not transparent as the minutes of the first meeting were not circulated to all owners and that the sale committee had acted too hastily by appointing the property agent and lawyer for the deal on the same night the panel was formed.
He also alleged that the majority owners made false declarations to the Strata Titles Board (STB).
The STB disagreed and ordered the sale in December 2008. Mr Goh appealed to the High Court to reverse the decision.
When the High Court also ruled against him, he went to the Court of Appeal.
While he was not ordered to pay legal costs, Mr Goh will have to pay $3,000 for the sales committee’s expenses for the appeal.
The appeals court also ruled that if he does not sign the sales papers, the Registrar of Supreme Court will sign them on his behalf.
Source : Straits Times – 3 Mar 2010
The sale of the Joo Chiat property thus hung in limbo for three years while the lone dissenter, Mr Goh Teh Lee, 52, took his fight all the way to the highest court in the land.
En route, the couple divorced.
Yesterday, he lost the battle. The Court of Appeal threw out his case, paving the way for the sale.
The court, comprising Judges of Appeal Chao Hick Tin, Andrew Phang and V. K. Rajah, were unanimous in deciding that Mr Goh, as a co-owner, did not have the right – known in legal parlance as locus standi – to be heard in court, since he and his now ex-wife had to act as one in the en bloc sale.
Despite being told this, Mr Goh, who represented himself in court, insisted he had a strong case for objecting to the sale on the basis of procedural irregularities and unfairness.
But Justice Chao remarked: ‘We are extremely doubtful that your case is strong. Most, if not all, of the points you raised are without merit.’
Justice Rajah piped in: ‘And we are being polite.’
The property in question comprised 24 apartments in a four-storey block known as Koon Seng House and nine pre-war terrace houses on one plot of land. The collective sale was mooted at a residents’ meeting in November 2006, when the Gohs were going through their divorce.
The sales proceeds, $21.12 million, were to be divided equally among the 33 units. The terrace houses were owned by a single owner, and the apartments, by different individuals.
Mr Goh asserted that there were discrepancies in the collective sale agreement, such as dodgy signatures.
He contended that the deal was not transparent as the minutes of the first meeting were not circulated to all owners and that the sale committee had acted too hastily by appointing the property agent and lawyer for the deal on the same night the panel was formed.
He also alleged that the majority owners made false declarations to the Strata Titles Board (STB).
The STB disagreed and ordered the sale in December 2008. Mr Goh appealed to the High Court to reverse the decision.
When the High Court also ruled against him, he went to the Court of Appeal.
While he was not ordered to pay legal costs, Mr Goh will have to pay $3,000 for the sales committee’s expenses for the appeal.
The appeals court also ruled that if he does not sign the sales papers, the Registrar of Supreme Court will sign them on his behalf.
Source : Straits Times – 3 Mar 2010
Allowing one owner to stop majority untenable
MR TAN Keng Ann (‘Review law on en bloc sales’; last Saturday) says he cannot treasure his home because the power to sell his home is vested in 80 per cent of his neighbours. He asks for the collective property sale laws to be changed.
Home owners of strata developments own the right to their individual units, and they share ownership of the common areas and facilities with other owners. While individual owners can decide whether and when to sell their units, they will have to go with the wishes of the vast majority of owners for a collective sale.
Shared ownership of common property means the rights of the individual owner have to be balanced against those of the vast majority of owners. The legislation, which sets a high majority consent level of 80 per cent for developments at least 10 years old and 90 per cent for developments less than 10 years old, seeks to strike such a balance.
Mr Tan’s point is that any one owner should be able to stop the majority owners’ decisions (even if it is 80 to 90 per cent majority). That is not a tenable proposition.
Chong Wan Yieng (Ms)
Head, Corporate Communications
Ministry of Law
Source : Straits Times – 3 Mar 2010
Home owners of strata developments own the right to their individual units, and they share ownership of the common areas and facilities with other owners. While individual owners can decide whether and when to sell their units, they will have to go with the wishes of the vast majority of owners for a collective sale.
Shared ownership of common property means the rights of the individual owner have to be balanced against those of the vast majority of owners. The legislation, which sets a high majority consent level of 80 per cent for developments at least 10 years old and 90 per cent for developments less than 10 years old, seeks to strike such a balance.
Mr Tan’s point is that any one owner should be able to stop the majority owners’ decisions (even if it is 80 to 90 per cent majority). That is not a tenable proposition.
Chong Wan Yieng (Ms)
Head, Corporate Communications
Ministry of Law
Source : Straits Times – 3 Mar 2010
Collective wish can’t be ignored
WHILE I empathise with owners of apartments who do not want to sell but are forced to by the majority, any change in the law needs to take into account the following:
Before buying a unit in a private condominium, a buyer should acquaint himself with the prevailing laws on collective sales. If a buyer is not keen to be subject to a collective sale later, there is the HDB option, as well as landed property.
Many landed properties are cheaper than a condo, although the location may be farther from town.
One must abide by the principles of communal living and ownership if one decides to live in a condo. There is personal choice involved, and we need to consider the collective desires of a group of people.
As much as one could argue that one is entitled to peace of mind, it is also the right of others to buy with a ready willingness to move, or sell, if that makes financial sense for them.
The 80 per cent consent level required for developments at least 10 years old gives due consideration to the majority of owners. While one may argue for a higher percentage, others could equally argue for a lower percentage.
Owning 50 per cent of shares is the benchmark for a majority in a private company. Granted, majority voting power in a company and having a say about one’s home do not carry equal weight in the scheme of life. But that is why an 80 per cent majority is required for a collective sale after factoring in a reluctant home owner’s rights.
Kevin Kwek
Source : Straits Times – 3 Mar 2010
Before buying a unit in a private condominium, a buyer should acquaint himself with the prevailing laws on collective sales. If a buyer is not keen to be subject to a collective sale later, there is the HDB option, as well as landed property.
Many landed properties are cheaper than a condo, although the location may be farther from town.
One must abide by the principles of communal living and ownership if one decides to live in a condo. There is personal choice involved, and we need to consider the collective desires of a group of people.
As much as one could argue that one is entitled to peace of mind, it is also the right of others to buy with a ready willingness to move, or sell, if that makes financial sense for them.
The 80 per cent consent level required for developments at least 10 years old gives due consideration to the majority of owners. While one may argue for a higher percentage, others could equally argue for a lower percentage.
Owning 50 per cent of shares is the benchmark for a majority in a private company. Granted, majority voting power in a company and having a say about one’s home do not carry equal weight in the scheme of life. But that is why an 80 per cent majority is required for a collective sale after factoring in a reluctant home owner’s rights.
Kevin Kwek
Source : Straits Times – 3 Mar 2010
Ultimately, drawing the line is a judgment call
COLLECTIVE property sales require a delicate balance between residents who want to keep their home and those seeking to monetise their property.
Such a situation is perhaps unavoidable because of the strata-titled nature of the land involved.
However, the law on collective sales should favour home owners who desire not to sell because residents who want to sell their property have the alternative of doing so individually, albeit at a possibly lower price.
Residents who want to keep their home do not have an equivalent alternative.
Second, owners generally should have the right to reject an offer if one follows the accepted principle of willing buyer, willing seller.
In principle, all owners of a piece of strata-titled land should agree before a collective sale is completed.
Thus, the law should show greater protection towards residents who seek to maintain ownership.
However, this arrangement may allow a small group or even a single owner to overrule the collective discretion and well-being of other owners.
Requiring total acceptance is unjust as well.
The fine balance between the two groups could come from requiring a higher majority for a collective sale.
This helps to favour and protect owners unwilling to sell while allowing the monetisation of assets in situations where there is a large majority. The balanced approach is similar to ‘majority rule, minority rights’.
While the optimum percentage to enable a collective sale is ultimately a judgment call, the current status quo of 80 per cent is reasonable.
The authorities could re-examine this proportion, especially if significant new developments arise.
Loke Hon Yiong
Source : Straits Times – 2 Mar 2010
Such a situation is perhaps unavoidable because of the strata-titled nature of the land involved.
However, the law on collective sales should favour home owners who desire not to sell because residents who want to sell their property have the alternative of doing so individually, albeit at a possibly lower price.
Residents who want to keep their home do not have an equivalent alternative.
Second, owners generally should have the right to reject an offer if one follows the accepted principle of willing buyer, willing seller.
In principle, all owners of a piece of strata-titled land should agree before a collective sale is completed.
Thus, the law should show greater protection towards residents who seek to maintain ownership.
However, this arrangement may allow a small group or even a single owner to overrule the collective discretion and well-being of other owners.
Requiring total acceptance is unjust as well.
The fine balance between the two groups could come from requiring a higher majority for a collective sale.
This helps to favour and protect owners unwilling to sell while allowing the monetisation of assets in situations where there is a large majority. The balanced approach is similar to ‘majority rule, minority rights’.
While the optimum percentage to enable a collective sale is ultimately a judgment call, the current status quo of 80 per cent is reasonable.
The authorities could re-examine this proportion, especially if significant new developments arise.
Loke Hon Yiong
Source : Straits Times – 2 Mar 2010
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