Indian billionaire has Big Plans here (14 May 2009)

INDIAN billionaire Bhupendra Kumar Modi moved into his $15.46 million penthouse at Marina Bay yesterday and immediately set about unpacking some ambitious plans for his new home country.
The founder and chairman of conglomerate Spice Group - it has interests in telecommunications, technology, financial services and entertainment - has set up two funds worth more than $100 million to invest here.
The tycoon also wants to open a 24/7 'Hollywood meets Bollywood' entertainment centre at one of two floating crystal pavilions coming up at the Marina Bay Sands integrated resort.
Speaking to The Straits Times at his 63rd storey apartment at The Sail @ Marina Bay, Dr Modi said he plans to spend 'tens of millions' on the project and is in talks with Sands to either buy or lease a pavilion.
'We are getting designers from Hollywood and from Bollywood to design it,' he said, adding that the IR could use his design or do its own.
But the idea is to entice Hollywood and Bollywood stars to entertain crowds here on a regular basis.
Dr Modi, 60, also owns a film production company and wants to attract directors. Indian star Anil Kapoor has been lined up to act in a movie to be shot here.
The businessman, who relocated the global headquarters of Mumbai-based Spice Corp to Singapore last year, said he is here to stay.
His new home sprawls across 5,834 sq ft and has spectacular Marina Bay views that match the apartment's colour scheme of cream and baby blue.
Everything in the apartment - from the interior design, custom-made furniture, prints, paintings and even the coffee-table books in the living room - was planned by a design team from Beverly Hills, where he was based previously.
An integrated high-tech system ensures round-the-clock entertainment at a click.
Dr Modi is moving here with his family, but says his son Dilip, 33, who is the group president for global operations at Spice Corp, wants to stay on his own at a family owned apartment in The Claymore, a condominium in the Orchard Road area.
Dr Modi bought the The Sail apartment last August, but his investment took a huge hit with the slump in the property market here.
Unfazed, he said: 'It is a home. I am not here to sell it. I will be using it also to entertain people. That way, I can justify the cost.'
Dr Modi plans to hold meetings as well as parties at his penthouse. He even broached the idea of inviting girl band Pussycat Dolls to a party, although he does not know them personally.
While Dr Modi himself expects to spend about 100 days a year in Singapore, his penthouse - 'like a hotel suite' and a 24/7 entertainment zone - will be open 365 days of the year to friends, business associates and celebrities, he said.
Dr Modi said that his two new funds involve nuts and bolts investment strategy and their share of risk-taking.
One fund is a special-situation real estate vehicle. This will target half-completed projects here or projects that are delayed due to a lack of funds.
'The world is going through a special situation...you need people to take special risks,' he said. 'We are looking for 25 per cent returns...high risks, high returns. We are not looking for immediate returns. We are willing to wait two, three years.'
His team is assessing about 20 possible projects. Dr Modi said they are keen on joint ventures, and Marina Bay Sands is certainly on his radar screen.
He also said he is discussing a deal to buy a residential building in the eastern part of Singapore.
The other fund will focus on investment in entertainment.
'Singapore is very much the right place for me,' said Dr Modi. It is cosmopolitan, secular, very secure, has a growing population, well-connected.'

Weekend Launch for BelleRive off Bukit Timah (14 May 2009)

SING Holdings is launching its latest residential development, BelleRive, this weekend at indicative prices of between $1,325 and $1,464 per sq ft. The listed developer is also extending an interest absorption scheme to all buyers.
BelleRive, located off Bukit Timah Road between Balmoral and Robin roads, is a 15-storey apartment tower with a total of 51 units. Its two and three-bedroom units range from 958 sq ft to 1,679 sq ft.
The two penthouses, at 2,734 sq ft and 3,735 sq ft, each have a private roof garden, swimming pool and pool deck. The development boasts fittings and finishes from notable brands including kitchen appliances by Gaggenau and imported kitchens by Hoffen.
Project facilities include a swimming pool, barbecue area, children's playground and gymnasium. Project completion is scheduled for end-2010.
Sing Holdings chief executive Lee Sze Hao said yesterday that about 50 per cent of the freehold project was sold during a recent preview.
BelleRive is within walking distance of the upcoming MRT station in Stevens Road. It is also reasonably close to several schools including the Singapore Chinese Girls' School, Anglo-Chinese School (Barker Road), Raffles Girls Secondary School and St Joseph's Institution.
Sing Holdings' previous projects include 38 Draycott Drive, a high-end apartment block in the Ardmore Park area, and an office building named EastGate in the East Coast area.
Residential projects in the pipeline are Meyer Residence on the East Coast, an 85 per cent-owned project, and a joint-venture project called The Laurels at Cairnhill.

Singapore is Asia's Most Liveable City (26 Apr 2009)

SINGAPORE has risen six places in a global ranking of cities with the highest quality of living, overtaking cities such as Paris in France and Honolulu and San Francisco in the United States.
At 26th place, the Republic also surpassed all its Asian neighbours to be the region's best performer in the latest Worldwide Quality of Living Survey by human resource consultancy Mercer.
As the icing on the cake, Singapore also topped Mercer's list of cities with the best infrastructure in the world. It proved superior in various areas, including electricity and water supply, telephone and mail services, public transport, traffic congestion and range of international flights from local airports.
Although it is often taken for granted, infrastructure 'has a significant effect on the quality of living experienced by expatriates', said Ms Cathy Loose, Mercer's Asia Pacific global mobility leader.
The development of Marina Bay and Sentosa Cove as new waterfront living areas appear to have boosted Singapore's position in the rankings.
'Singapore already has excellent housing, but now its new ocean-front and seafront living options have allowed the ranking to move even higher,' said Mr Derrick Kon, Mercer's Singapore global mobility leader.
He added that the 'high-quality houses and apartments' that are available for rent and the 'excellent selection of appliances and furniture' for residents definitely helped elevate Singapore's quality of life.
The other factor that contributed to Singapore's higher ranking is the presence of 'many good schools' in the city, said Mr Kon.
'Singapore has always had a lot of good schools and international schools, but now there are also more private schools offering university degrees,' he said.
'If expatriates come here with their children, this is one area they would be looking at, and in Singapore they would have a lot of options, with international programmes and university programmes.'
Singapore's strong position in quality of life rankings such as these could stand the nation in good stead in the current financial crisis, said Mr Mark Ellwood, managing director of Robert Walters, another human resource consultancy.
With companies looking to cut costs, many are reducing the number of international assignments and localising their expat compensation packages where possible, which means not giving out the 'hardship' allowances or benefits that are offered to expats who have to live in cities with a lower quality of life.
'There is perhaps less of an argument these days that Singapore is a hardship posting, so you don't have to give many expat benefits in terms of additional bells and whistles,' said Mr Ellwood.
Singapore is the only Asian city on the top 100 list that managed to increase its ranking this year, with the rest largely maintaining their previous positions.
China's capital, Beijing, moved up three places from 116 to 113 due to public transport improvements stemming from the Olympic Games last year, but Bangkok in Thailand and Mumbai in India both dropped in the rankings amid worsened stability and security.
Globally, the Austrian city of Vienna overtook Switzerland's Zurich to boast the best quality of life this year. European cities continued to dominate the top positions in the ranking, amid a sprinkling of Canadian and American cities.

Lower-priced Landed Homes in Johor (26 Apr 2009)

Investors or people looking for retirement homes in Johor should be able to find attractive buys in the Malaysian state.
Mr Ivan Hoh, executive director of PropNex International, said Johor's proximity to Singapore makes it an attractive destination.
'Many aspire to own a landed property in Singapore which they can't afford, so the other alternative is to buy a house in Johor,' he said.
There is generally more demand for landed homes than condominiums in Johor, he added.
'As they have vast land, many prefer to live in a house with land versus paying a more hefty sum to live in a condominium. For about RM250,000 (S$104,000), you can get a decent terrace house of 1,500 sq ft. A condominium in a good location will cost at least RM350,000.'
Indeed, the lower prices compared with similar properties in Singapore are a huge draw.
Mr Lim Boon Ping, an agent with Johor-based Tiram Realty, said: 'Compared to Singapore or even other parts of Malaysia, Johor Bahru residential prices remain very attractive, thus making it a relatively cheap place to reside in.'
He cited the example of a single-storey terrace house in Taman Johor Jaya with a built-up area of 761sq ft.
'At its peak in 2006, transactions hit RM170,000 for a unit. Now, you can easily purchase one at around RM120,000.'
Knight Frank Research showed that 'movement of prices has been flat with no significant changes (in Johor's residential market)...the market is stable and does not show any sign of a 'bubble' scenario'.
Knight Frank also said rental rates and yields, which hover around 4 per cent to 5 per cent, are expected to come under pressure and show some downward adjustments in the near term.
Mr Hoh said: 'In terms of rental yield, a house in general will not be able to fetch as high a yield when compared to a condominium.
'As property prices have crept up over the years and rental rates stand still, the yields in Johor remain low, probably 3 per cent or 4 per cent.'
Malaysian property giant SP Setia has some projects in Johor.
Its Setia Indah project, for instance, has a range of units called the 180 Degree II. These are double-
storey terrace houses with a land area of 1,540 sq ft each.
Prices start from RM304,800. The development is expected to be completed in September.
SP Setia will soon launch Setia Eco Gardens, an eco-friendly development near the Second Link in Tuas. Its Visellia terrace units will have a built-up area of 1,926 sq ft onwards and are priced at $138,000 each.
Mr Eric Cheng, executive director of HSR Property Group, said of Johor: 'Singaporeans will have to drive only 10 or 15 minutes to get there on a weekend, and they will probably own a bigger land plot.
'But I think a true investor should wait and see. I think (they should) give themselves another good six months for the market to stabilise; I think it's still too early to judge.'

Sentosa Cove (25 Apr 2009)

CONSTRUCTION at Sentosa Cove is largely on schedule, but Sentosa Development Corporation (SDC) - which oversees the luxury residential enclave - has received a 'handful' of requests from developers to delay their upcoming projects, chief executive Mike Barclay told reporters yesterday.
SDC has granted an extension to one developer and it is reviewing requests from others. It will consider requests on a case-by-case basis, Mr Barclay said.
And in a few cases, land-owners have had to pay liquidated damages - which is essentially a penalty - for taking slightly longer than the maximum time allowed to develop the sites they bought. The penalty comes to 2 per cent of the land purchase price for each month's delay.
Buyers of land plots meant for landed homes are given four years to complete building on their sites, while buyers of condominium and commercial plots are given up to five years. So far, no major delays have been seen, SDC said. With most construction on track, Sentosa Cove should be home to some 2,100 condominium units and landed homes by 2014.
While some 2,500 homes could have been built on the Cove, some developers decided to combine land plots or build larger units, which means that the enclave will have fewer units than it could have.
To date, there are some 1,700 people living in Sentosa Cove in about 400 homes. More than 30 condominiums and landed properties have received their temporary occupation permits (TOPs).
This includes condominiums such as The Berth by the Cove and The Azure. Overall condo occupancy at projects that have achieved TOP now stands at about 70 per cent, according to data from SDC.
The number of people who have set up home in the Cove is expected to climb as another 60 projects are expected to get their TOPs over the next six months.
'With more TOPs on the way, our live-in population is set to swell to about 3,000 by the end of 2009,' said Mr Barclay.
About 840 homes - comprising 140 landed units and 700 condo apartments - will be ready by the end of this year, up from about 400 now.
Sentosa Cove comprises of North Cove and South Cove. Land parcels in the North Cove were launched first.
'By the end of the year, 85 per cent of the projects within North Cove will have obtained TOPs,' said Jason Yeo, general manager for Sentosa Cove Resort Management. 'As for South Cove, the land sale was completed in 2008 and it is envisaged to be fully developed by 2014.'
The masterplan for Sentosa Cove was finalised in 1996, and land sales kicked off in 2003. All land sites were sold by 2008, with the total investment from land sales for the Sentosa Cove project coming to some $5.1 billion in total. Some 60 per cent of all buyers were foreigners.
With all land plots on the island sold off, Sentosa's management has now turned its attention to building a cohesive residential community.
Right now, Sentosa Cove is home to people from 21 nationalities including Europe, the United States, China, India, Australia and neighbouring South-east Asian countries.
'We are actively building a community life now and are committed to fulfilling our vision of delivering the world's most desirable address,' said Mr Barclay.
'Are we on track with our vision? The answer is yes,' said Jennie Chua, chairman of the Sentosa Cove Council. In recent quarters, property prices across Singapore (including Sentosa Cove) have tumbled and reports of construction delays have emerged. But this is due to a global economic downturn, Ms Chua said. In the longer term, Sentosa Cove still offers an attractive residential enclave for locals and foreigners, she said.

Homebuyers of 2007 at Risk (25 Apr 2009)

The island-wide price index in property recorded a plunge of 14.1 percent in Q1, slightly higher than 13.8 percent flash estimate.

To date, this is considered the worst decline for a quarter. It is also worse than the quarter-on-quarter decline of 13.1 percent in Q3 of 1998 when the financial crisis in Asia affected the residential market.

Prices of private homes have now dived for three straight quarters, having a total drop of 21.2 percent since the peak in Q2 of 2008.

According to URA, the index of private home property is now close to the level it had in Q1 of 2007. Hence, home-owners who bought their flats after Q1 of 2007 may be at risk of having property valuation fall below the price of their purchase. For those owners who had their properties on deferred payment scheme and still have to make a loan would have the price ratio of loan-to-purchase limited, which they can get from financing companies.

However, anecdotal evidence has shown that these buyers were capable of paying up the purchase amount that was not supported by the valuation. This was necessary to control some distressed sales.

Furthermore, although prices of private homes are still expected to be depressed, the decline rate is expected to become moderate from the peak of Q1 of 2009, as home developers have substantially marked the down prices. Mass-market of homes could expect more gradually averaging price corrections in the region by up to 8 to 12 percent for the following three quarters, as developers of units that were not sold and secondary market sellers could adjust prices close to current levels.

The high-end and mid-tier segments could see larger declines in average price ranging from 10 to 15 percent over the same period.

Mortgagee Sales Expects to Increase (25 Mar 2009)

MORTGAGEE sales - when repossessed homes are put on sale by financial institutions - have been few and far between so far but they are tipped to increase in the coming months.
The auction market remains weak but showed signs of life this month, said Colliers International yesterday.
There were 53 repossessed properties - 41 were residential - put up for sale in the first quarter, up 18 per cent from the fourth quarter last year.
Colliers said the rise may be small but it indicates an impending trend of continued growth, which is in tandem with the deteriorating economy.
Deputy managing director and auctioneer Grace Ng said a more significant number of mortgagee sales is expected later this year or next year.
'This is due to the lag time of approximately six months or more between when a buyer defaults on his loan repayments and when the bank repossesses the property and puts it up for auction sale,' she said.
Together with properties put up for sale by owners, there were 189 auctions in the first quarter but just 6 per cent were sold, up slightly from the low 5 per cent in the fourth quarter of last year.
Still, the value of deals rose and there were more transactions this month. Eight properties were auctioned off this month for a total of $12.955 million.
These transactions bring the total value done in the first quarter to $17.94million, up a striking 234 per cent from the fourth quarter.

When financial institutions put up some of the repossessed homes on sale, it triggers to increase in coming months

According to Colliers International, auction market is still low but shows signs of increase for this month, and the rise of mortgagee sales are small but may affect the impending constant growth in the market which is pair with the weakening economy.

There are 53 repossessed properties put on sale during the first quarter of the year, 41 of these are residential homes and an increases of 18% from the fourth quarter of 2008.

Grace Ng, auctioneer and deputy managing director says that significant mortgagee sales are expected to increase later part of the year up to next year.

“This is due to the lag time of approximately six months or more between when a buyer defaults on his loan repayments and when the bank repossesses the property and puts it up for auction sale,” Ng said.

Including the properties that put on sale by owner, a total of 189 actions are recorded during the first quarter of the year but only 6% are sold, a 1% increase from 5% in the fourth quarter last year.

However, the value of deal still increases and more transactions are noted this month. There are eight properties auctioned off this month for a total sale of $12.955 million.

The deals bring up a total value of $17.94million, a striking 234% from the fourth quarter.

98% Drop in Property Investment Sales (25 Mar 2009)

SINGAPORE – Property investment sales have plunged since the start of the year, and could get even worst.

CB Richard Ellis (CBRE)’s latest figures show that sales to this point have only reached $184.6 million. This is a 98 percent drop on the same period for the past year and a 56.4 percent more depleted than the fourth quarter of 2008.

The consultancy warned the previous day that the total investment sales have the tendency to drop to levels not encountered for over a decade, with sellers and buyers held in an impasse and far apart in terms of price expectations.

The first quarter of 1998 is the sole quarter that encountered lower investment sales with just $49.28 million, as well as the Q3 during the same year as they reached $110.62 million. To date, isolated individual deals were seen by the market, though collective sales or public sales were zero.

During the period, 51.5 per cent of total sales came from residential sector sales.

Fragrance Properties spent $25 million for a freehold Pasir Panjang site, which they intend to cultivate into a residential apartment building. Besides this recent acquisition, the developer previously bought three good-class bungalows for $18.2 million as well.

This kind of development will be uncommon this year as the majority of the developers concentrate on their current projects and they seemed not to be interested to look for new sites, according to CBRE.

CB Richard Ellis also added that minimum bid applications from the developers for some of the Government land sale sites have been completely ignored.

So far in the present quarter, there have been $77.3 million total sales in the commercial market. With it, the $35.8 million deal for Le Mercier House in Mohamed Sultan Road is the only major sale, which is around $900 psf.

The Loyang Crescent site that went for $6.2 million (or about $74 psf) was the only transaction in the industrial sector. The report indicates that this year’s total investment sales could revert to the 1998 levels, when $1.35 billion was the total annual quantum.

CBRE said  “The lack of volume will continue to feature until such time when price expectations between buyers and sellers meet”.

Making new acquisitions in the current year are also implausible for real estate investment trusts due to the significant increased in dividend yields. And it would be quite risky to make acquisitions that are yield accretive.

Prime Homes Price in Singapore Falls (24 Mar 2009)

The Knight Frank Prime International Residential Index (Piri) stated that there was around 15 percent drop in prime home prices in Singapore in the previous year, coming as the fifth largest fall worldwide.

The biggest fall in 2008 was seen by Hong Kong with 24.5 percent. It was followed by the United Kingdom Home Counties with -19.4 percent, London with -16.9 percent and Marbella in Spain with -15 percent.

Piri seemed to have made a dull image for prime home prices all over the globe.

Mr. Liam Bailey, head of residential research at Knight Frank, says that even several locations saw the rise on values in the past year, growth had either held up or dropped in three-quarters of locations.

“It is now clear that not even the most desirable property around the world will remain immune to the global financial downturn”, Mr. Bailey said.

“The fact that some locations did manage to show positive growth - even as much of the world slipped into recession - is more of a reflection that different regions are in different stages of the economic cycle, rather than any inherent ability to ride out the storm unscathed”.

Markets that have demonstrated outstanding growth have also fallen rapidly. The 10.8 percent increase in prices in Dubai swiftly plunged 19 percent during Q4 when investors pulled of a flooded market.

Performance in prime Asian locations has noticeably weakened recently, and drop of steep prices is rumoured as wealth creation weakens.

“The latest Piri results show that even the world's richest people have reined back their discretionary spending in light of the credit crunch and global recession”, Mr. Bailey said.

Singapore took the title as the world’s ninth most expensive city location, with S$2,340 (US$1,550) per square foot (psf) prime properties. The country was ranked eight for the past year.

Meanwhile, the top spot was garnered by Monaco having US$6,550 psf, followed by London at US$3,670 psf, and New York (Manhattan) at US$2,160 psf. The seventh spot was obtained by Hong Kong at US$2,070 psf and Tokyo, at US$2,080 psf, got the sixth spot.


Nevertheless, these locations that made it to the top ten most expensive places still experience falling prices. A 2.1 percent increase in prices was seen by Monaco this year, though it drop 10.7 percent during the final quarter of the year from the third quarter.

Looking on the brighter side, the rich remain devoted to property, according to the Wealth Report's attitudes survey. The hope to possess good property in the finest markets keeps prime residential sector to be motivated.

“We believe the quality of the best prime locations will still continue to attract buyers and will recover the quickest”, Mr. Bailey stated.

Some Loss but Most Gain in Subsales (19 Mar 2009)

Even though it is a difficult property year in Singapore, an overwhelming 95 percent of the property sellers who dealt private condominiums and flats in the subsale market a year ago were able to turn a great profit.

However, the amount of subsales that ran up losses totalled above doubled - from 24 in H1 of 2008 to 52 in H2 - indicating the falling market conditions particularly in the Q4.

For the knowledge of those who incurred a loss, 2008’s average loss for each unit also increased, from 7 percent or $138,000 in the first half of 2008 to 12 percent or $188,000 in the second half.

However, not all are sad stories, as there were also positive ones. For instance, the owner at The Sail incurred a profit of nearly $6.7 million after keeping his property business for around three years.

Analysis of caveats by Savills Singapore presented that the amount of loss cases increased as 2008 flapped along, from only 6 in the first quarter, going up to 18 in the second quarter, and steadying slightly at 20 in the third quarter, before upping to 32 in the last quarter of 2008.

Savills director (investment) Steven Ming said, “There were more owners cutting losses in the subsale market in H2 2008, especially in Q4, following the Lehman fallout and the global meltdown. Sales trickled and more people sold at losses”.

While the number of those who experienced losses from subsale deals have increased, the number of subsales that were able to produce income on the other  hand dropped by 16.8 percent, from 757 during the first half of 2008 to 630 in the second half.

In general, the result only shows that it is much pleasing to keep someone’s property for a long time. Averagely, the largest profits of $785,000 each unit were bagged by those property buyers who bought homes in 2004 and sold them in the second half of 2008, followed by those who bought homes in 2005 and sold them in the first half of 2008, gathering an average profit of almost $666,000.

Those property buyers, who bought homes in 2006 and sold them in the first half of 2008, were the ones who incurred the largest average loss of $210,000.

Approximately 90 percent of the 76 investors, who incurred a big loss in the subsale market throughout 2008, had purchased units in 2007 during the peak in the property market.

Peter Ow, the executive director of (residential) Knight Frank, noticed that an investor would typically decrease losses in the subsale market once the time to pay the developer comes. “An investor exposed to a few properties bought on deferred payment scheme (DPS) may want to cut losses on the first one or two to improve his cashflow so when it is time to pay up for the third one, he can afford it”, he said.

As an addition to various home owners, who find it hard to acquire enough bank loans to complete acquisitions, Mr. Ming pointed out that those having a strike in the subsale market can admit “savvy investors seeking to diversify their investments and allocating a part of the exposure to other undervalued asset classes”.

Interest Absorption Scheme (8 Mar 2009)

What does it mean?

This is a scheme that property developers offer in conjunction with banks at project launches.
It is similar to the deferred payment scheme, in that it allows you to defer the bulk of the purchase price until the project's temporary occupation permit period.
The big difference is that under the interest absorption scheme, you have to take a bank loan at the time of purchase. But the developer will absorb the interest payments on the loan until the project's completion.
The scheme may be offered at a premium. Some developers are now charging a 3 per cent premium over the buying price.
 
Why is it important?

This scheme allows genuine home buyers to commit to a purchase with just a small upfront payment.
More developers have been using this to help drive sales after the Government scrapped the deferred payment scheme in late 2007.
 
So you want to use the term? Just say...

'If I take up the interest absorption scheme, I won't have to worry about the monthly payments until the development is completed.'

Adam Khoo - Large Investor but Thrifty Spender

Regardless of becoming a wealthy man, entrepreneur-cum-motivational lecturer, Adam Khoo hesitates before he spends on products like iPhone.

However, in terms of investments, the founder of the Adam Khoo Learning Technologies Group will not even have a second thought when investing, supposing, $50,000 worth of stocks, since these are expected to possibly generate more cash.

As a long-term and conservative investor, he chooses to engage investment in cash-rich, large-capital firms that offer low debts and the possibility to constantly raise their earnings.

His group concentrates on education and consists of 16 companies in seven nations with a yearly $15 million turnover. In 1999, he also assumed an advertising firm, Adcom, which was previously owned by his father.

Mr. Khoo earned a degree in business administration from Singapore’s National University. He is also recognised for his famous books. Previously last month, he introduced his ninth book entitled Profit From Panic, which provides practical information regarding how to relate with the present economic crisis.

Ms. Sally Ong is Mr. Khoo’s wife, who acts as a director at one of his companies. They have two daughters namely Kelly and Samantha.

One factor that helped him to attain wealth is his frugality. He saved the half of his income and does not spend a lot on luxurious things. His clothes were bought individually once in a year, which shows his simple taste.

Mr. Khoo invests 100% of his savings systematically. However, when the market becomes overvalued, he holds a bigger amount of cash as his precautionary measure. He personally manage his portfolio, which is made out of several investments such as private businesses, Singapore stocks, property rent outs, exchange- traded funds (ETFs), and US stocks. Annually, his investments generate an average return of more than 20%.

Currently, he have approximately US$400,000 or S$611,000 in US stocks, such as Google, Boeing, Nike, ETFs, and Pepsico, and $400,000 in Singapore stocks, such as OCBC Bank, CapitaLand, the Singapore Stock Exchange, STI ETF, and Bestworld.

In 1998, Mr. Khoo purchased 1,300 square feet condominium located in East Coast worth $480,000 and placed it on lease for almost $3,000. He then sold it in 2004 for $650,000.

He also owns 5,000 square feet semi- detached residence situated in East Coast which he purchased for $1.3 million four years ago. Last year, he bought 900 square feet condominium worth $1.3 million, located at Robertson and placed it on lease for $4,000.

When he was 15 years old, his grandfather gives him hongbao with cash as well as Malaysian shares like Kuantan Flour Mill, Hicom, and Genting every Chinese New Year. At the army, he tried dabbling in shares and was inspired by a book entitled, Buffetology, which was based on Warren Buffett’s achievement and work.

Last October, he bought a red Lotus worth $230,000 as a reward for his hard works.

He can stop working anytime he wants with his passive book royalty incomes including business profits, which can cover all his expenses without working.

Apartments for Rent in Vietnam Unscathed (24 Jan 2009)

The segment of serviced apartments remains untouched by woes of the property market, with high demand of apartments for rent in major cities despite the economic downturn, according to a report of Vietnam News Agency.

A representative of the Ascott International Management Vietnam said that over 800 high-class apartments were managed by his company in Ho Chi Minh and Hanoi City and many of them were rented. These apartments were popular to foreign people who had been working and living in Vietnam for more than three years, he added. Though foreigners were allowed by the government to purchase houses, effective from 1 January, most of them are not willing to do so, the representative said.

They were comfortable living in areas with good amenities and infrastructures, he explained, while many new houses were built in localities and do not have those factors.

Apartments located in developed areas were more costly, he added. TSQ Vietnam Company Vice Chairman Do Quan also said rentals were preferred by foreigners rather than buying apartments.

Few of them have the need and the financial means to have a property in Vietnam, Mr. Quan added.

Lam Van Chuc, chairman of property company Phuc Duc, said that many foreigners were not yet ready to purchase houses in cash, unlike the Vietnamese. Moreover, these foreigners would only pay mortgages for the apartments if there were extremely low interest rates, he added.

CBRE Vietnam, a property consultant, said that with the gradual decline in the global economy, many foreigners in Ho Chi Minh and Hanoi City would be glad to pay rental for apartments at prices ranging from US$1,000 to US$1,500 per month rather than spend US$200,000 in buying them.

The Process of Renting a Place (18 Jan 2009)

The correct process of searching a rental house may be easy for some people, but terrible for others. Last month, a couple from Malaysia and an expatriate from Japan were fooled by a swindler pretending to be a manager-cum-landlord of a property terrace residence in Serangoon Gardens.

He rented the same residence to the two parties and ran off their money worth $10,300. Both parties reported to the police, but there is no assurance that they will obtain their money back.

A property agent said that lease scams happen most of the time and most of them include HDB residences. Although there are no possible foolproof ways to prevent these lease scams, there are still safety measures that tenants can assume to ensure they will not become a prey to a deceit.

On dealing with agents, tenants should primarily deal or engage with a certified property agent of an established or a reputable company, according to Mr. Mohamed Ismail, PropNex chief executive.

Even tough this is clearly not foolproof; it does give a protection if something will go wrong. ”At least there is a company to go to for help,” he said.

Companies like his will do investigations and take proper actions, such as ending the services of the agent if needed or assisting the tenant to obtain his money back, he said.

Secondly, check the property firm of the agent or the Internet site of the Institute of Estate Agents (IEA) to know if the person making a deal is a legitimate agent, advised Mr. Mohamed Ismail, the first vice-president of IEA.

Thirdly, tenants should not pay an agent with large cash. He added, “If you pay cash, he can misappropriate the money”. Instead, they should disburse with a use of a cheque or cashier’s order stating the name of the owner.

Before tenants sign the lease, the Property agency also recommends discovering the standard practises before entering a lease agreement.

These property agents should carry out due diligence to determine the property’s ownership they are managing, so tenants can see the documents. The property tax statement of the owner would be upright.

If tenants are dealing with a managing agent, one should ask for documented proof such as an authorisation letter from the property owner allowing the agent to take actions on his behalf or a power of attorney, according to Mr. Albert Lu, managing director of C&H Realty.

Mr Eric Cheng, executive director of HSR Property Group, said that tenants should negotiate for a lesser deposit and it is up to the property owner to agree, even if in the property market, the standard is a one month deposit for a year rental and two months deposit for two year rental.

He added tenants should only pay the advance lease upon the passing over of the keys to the property, to lessen their risk.

However, legitimate owners sometimes cheat, too. Therefore, tenants should pay their lease on a monthly basis, Mr. Cheng recommended. There were tenants who were satisfied to pay out 6 to 8 months in advance lease for a lower rental fee, only to discover later they were cheated.

In one situation, the lawful owner sold his apartment soon after the rent was closed and disappeared.

Tenants should have to be watchful, said Mr. Lu. ”If the rent is too good to be true, then you have to beware”.

Hot Bargains for House Buyers (4 Jan 2009)

The property market is having a quiet start for 2009, with several developers now temporarily closing their flats in response to the decrease in the volume of customers.

However, as the housing prices continue to fall, many house buyers are attracted back to the market and their shopping business.

Some small development projects are coming back to the market, while others that are already launched earlier are now giving away discounts and several buying incentives.

In Balestier area, Roxy Homes is launching two boutique projects, the Nova 48 and Nova 88, both located at Balestier Road.

Nova 48 in Prome Road has 48 units while Nova 88 in Bhamo Road has 88 units. Both of them offer a price of $1,000 per square foot and a bedroom unit with a size of 506 square feet at a starting price of $500,000.

Another upcoming opening is the Alexis in Alexandra Road. Its freehold development is located at less than ten minute walk from Queenstown MRT Station and has around 300 units, according to a property agent.

Indicative prices ranges from $900 to $1,000 per square foot and developer offers a payment scheme more likely similar to a deferred payment whereas, buyers can able to pay 20 percent initial payment and then nothing until completion.

Another developer, the Heritage Group is now holding its private previews for the Vivace, a 99-year leasehold project plan, to be built at old Tong Watt Mansion near the Robertson Quay.

Its 85-unit development project consist mostly with small units and ranges from 388 square feet one-bedroom apartments to a 990 square feet penthouse. Price ranges from $580,000 to about $1,500 per square foot.

Several developers have cut prices and are now offering the lowest prices never seen before.

Just like the Novelty Group for instance, they decreased the price of their Lucida project along Thomson Road. The selling price of its 62-unit development project was around $1,600 per square metre when it launched earlier last year but now, its sells at around $1,200 per square foot. One-bedroom unit is 624 square feet while two-bedroom is 1,066 square feet.

In East Coast, the selling price for Mountbatten Suites has plunged from $1,100 per square foot when it launched to around $900 per square foot now. The developer is also offering a deferred payment scheme and legal fees.

The Frasers Centrepoint also gives renovation vouchers to their buyers on its Woodsville 28 project in Potong Pasir. A Two-bedroom apartment will get a $20,000 while three-bedroom unit gets $30,000 voucher.

For the rest of 2009, interested home buyers can check out offerings from City Developments, including the upcoming launch of Phase 2 of Livia in Pasir Ris, Quayside Isle in Sentosa Cove and The Arte in Thomson Road.

While price starts at $797,000 for Livia’s three-bedroom units, selling price for The Arte and Quayside Isle are not yet finalised.

Meanwhile, the Far East Organisation is also planning to launch its latest cluster of phased houses on their Greenwood landed housing development project as well as a 99-year leasehold project in Choa Chu Kang.

Singapore Property Investors Remain Strong (31 Dec 2008)

Residential and commercial property sectors in Singapore are still attractive to several medium- to long-term investors.

Property observers see Singapore’s commercial status as one of the international financial hub. Despite this year's difficult times for all marketing sectors, market watchers noted that property investment fundamentals remain positive and strong.

As many financial institutions across the globe cut costs, they are now planning to move their business operations out of the luxury cities in Europe and the US, and bring them to Asian cities where cost of business are much cheaper. For instance, corporate tax rate in Singapore is 18 percent, compared to 40 percent in the US and 29 percent in the UK.

This event can spur demands for office and business spaces in most financial centres in Asia like Singapore, bringing investment opportunities in commercial property sectors.

“Financial institutions are growing, in many cases from hundreds to thousands of jobs here in Singapore. The bigger these institutions become, the more real estate they need,” Jones Lang LaSalle Managing Director Christopher Fossick said.

However, opportunities in residential markets are visible as well. Closing gap between rentals and debt servicing, as well as the falling valuation this year can attract many investors who are looking for good deals.

“For example, those in district 9, 10, and 11, they tend to be more elastic, the prices. So when the economy is not doing too well, the prices come down quite a lot, especially amongst those who have, for example, bought from the developer and then now need to sell to raise cash flow. They are prepared to cut losses,” said ERA Asia Pacific Associate Director Eugene Lim.

Observers see property market is offering rich pickings to investors who would bring long-term returns in the country.

Further Property Deflation Foreseen in 2009 (30 Dec 2008)

DTZ predicts 15%–20% decline (year-on-year) in the prices of condominiums and apartments in prime districts in 2009.

Official data for the fourth quarter of 2008 showed that the prices of non-landed private homes in high-end districts (including District 9, 10 and 11) plunged by 14% on quarterly basis, compared to 4.5% price declines in the last two quarters. Average prices of prime properties dropped by 21.6% year-on-year to $1,160, compared to $1,200 psf in the second quarter of 2007.

The prices of freehold non-landed houses beyond the prime districts fell by 9.3% on quarterly basis and by 10.5 % on yearly basis, whereas nationwide landed housing prices dropped by 5.7% on quarterly basis and 2.9% on yearly basis.

Prices began falling steeply following dismal sales of prime properties after the third quarter of 2008. Only 112 and 192 units were sold in October and November, respectively, compared to the monthly average of 444 units (based on sales record from January to September 2008).

According to DTZ, leasable prime non-landed homes also suffered from deflationary pressures, with monthly rents dropping by 9.4% on quarterly basis and 9.2% on yearly basis, hitting $4.36 psf. Non-prime rents fell by only 2% on quarterly basis, but increased 1.2% on yearly basis.

DTZ predicts that the economic slowdown will dampen the demand in the property market until 2009. Prices of luxury homes and mass residential properties are expected to fall by 43.8% and 32.1%, respectively, based on the 2007 benchmark.

Home Prices Keep Tumbling (28 Dec 2008)

Even if developers beg to differ, private home prices are dropping, and it will keep falling even further until next year. The figures for sold homes is going for an 18 year-low this year, to make it worse, supply is nowhere near deficient.

“In every bear market, no matter what the developers say, it will happen,” the president of the Society of Financial Service Professionals, Mr. Leong Sze Hian, said in lieu of the dropping home prices. He also added that the only indefinite is until when or how is the fall.

From first quarter’s $3,982 to third quarter’s $3,307, Manpower Ministry statistics confirms that the average monthly real earnings got knocked down by 17 percent. In addition to that, the 5.3 percent reduction that the second quarter endured is continuing to the third quarter with a fall of 6.8 percent; this includes the quarter-on-quarter basis, gross domestic product, etc.

“All these will filter through to the property market,” further explained by Mr. Leong.

At the moment, consumers are moonlighting, there are hardly any new launches, and there are only a few distressed sellers.

Mr. Nicholas Mak, Knight Frank's director of research and consultancy said, “Most are not feeling any pain from the recession yet. In the secondary market, many sellers are still hoping to do sub-sale at a profit.” He also added that there are no chief price cutbacks so far.

Problems of Deferred Payment Scheme (20 Dec 2008)

During the Asian financial crises, deferred payment on homes was adapted to stimulate the property market. With a little cash, a buyer could secure a property before it was in fact built. This scheme was later stopped because it encouraged widespread speculation.

As of 2008, there were 3350 deferred homes, with more partially “paid for” homes in 2009 totalling to 4,560 and in 2010 to 2,540. What becomes a problem with these 10,540 deferred payment homes is that the owners or buyers may not complete their payments in the foreseeable future, causing losses in a falling market.

These buyers already experience hard time borrowing money from the bank just to settle their balances. Now, the banks, wary of the foreseeable risk, are requiring more cash out on the part of the home owners before they will lend credit. If the home owners cannot raise their own money, as most are, and they cannot get credit, then they too will cut their loses by selling their deferred payment homes in an already falling property market.

One bright outlook however is that according to Mr. Tan Tion Chen of Frank Knight, buyers who bought in 2005 and 2006, when prices were not so high, have only a slim chance of defaulting on their payments.

This positive outlook was also shared by Mr. Chua Yan Liang of Jones Lang LaSalle. He said, “The 10,450 number seems large but…if buyers can get loans, the problem won’t be as severe as some people think (although) buyers may see it as a reason to bring prices down.”

Buyers Take Advantage of Lower Sibor (13 Dec 2008)

Home loan borrowers take advantage on the low Singapore Interbank Offered Rate (Sibor) as interest rates dropped to about 0.9 percent this month.

Economists claimed the three-month Sibor would stay low until New Year.

With the rates continuously depressing, more and more home buyers look for Sibor-related loan bundles.

Geoffrey Ying, head of the mortgage division at financial advisory firm New Independent, approximates that 6 out of 10 customers consulting him inquires about Sibor-linked packages not only for buying high-end units, but also HDB flats.

He also said that only three to four out of ten customers show interest to Sibor-linked bundles last year when it was notably above one percent.

To illustrate this scenario, take for example buying an HDB flat. The best rate offered in town is 2.6 percent annual rate for qualified loaners. This rate is pinned at a level to only as little as above 0.1 percent of the prevailing CPF ordinary account interest rate.

If you are going to compare rates, for instance, with Standard Chartered Bank at a two-year lock-in deal, its Sibor-linked package to Sibor plus 0.95 percent, in the case of the bank.

Therefore in this case, a buyer can pay an annual rate of as little as 1.85 percent – lower than the usual HDB concessionary rate – since the Sibor stay at 0.9 percent.

However, experts say that the Sibor still has the tendency to go up, giving risks to the homebuyers.

Lessons from the US Subprime Mortgage Crisis (28 Nov 2008)

“I and others were mistaken early on in saying that the subprime crisis would be contained,” said US Federal Reserve Chairman Ben Bernanke at the onslaught of the subprime mortgage crisis which crippled even the biggest players in the US financial industry.

Way back in 2007, US President George W. Bush refused to grant bailouts to struggling banks, believing that the mortgage market would self-correct. Months later, Merrill Lynch wrote down $7.9 billion worth of CDOs and incurred $2.3 billion in losses. Its stock price fell uncontrollably as it sought emergency assistance from sovereign wealth funds. Then came the historic demise of Lehman Brothers.

The subprime mortgage crisis can be traced back to the generous housing program of the president. It took a year before the president saw the looming crisis and eventually announced a $700 billion bailout program.

The crisis brought to light the lack of government intervention at the stage where the financial crisis can be prevented the most. When the Singaporean property market suffered a similar fate in the 1980s, the government immediately intervened and asked banks to restructure their loans, delay debt repayments and forgo additional margins – all of which came too late in the case of the US

The second thing to learn from the mortgage crisis is the importance of bailouts. The government must reassure financial institutions that it will shoulder mortgage payments when all other measures have been exhausted in the event of delinquency.

The mortgage crisis has shed light on the importance of restoring business confidence and early government intervention. Every country must learn from the failure of the US government to address financial meltdown in a timely manner.

Shopping Mecca To Rise at Serangoon (26 Nov 2008)

The current economic slowdown is not holding back the construction of a mega shopping mall at Serangoon Central. Gold Ridge contracted Low Keng Huat to construct the $295 million commercial property, which is poised to become an iconic retail center in North East.

Gold Ridge is a special purpose vehicle comprising institutional investors from Europe and the US. The developer won the tender in May this year with an $800.9 million bid or $850/sq ft per plot ratio. Chin Yeok Yuen, chief financial officer of the contractor, was grateful that such big contract materialised despite the downturn in the real estate market.

Victoria Sharpe, chief executive of Pramerica Real Estate Investors (Asia), believed that the mall is poised to be at the forefront of shopping arena in the northeastern region. Strategically located at the centre of Serangoon, the site is near densely populated residential areas and schools. Standing six-storey high, the mall will be integrated with the Serangoon MRT station and the future Serangoon Circle Line station.

The shopping mall will be open 24 hours and have more than 618,000 sq. ft. of total lease area, making it bigger than Ang Mo Kio Hub and other traditional suburban malls which measure 300,000 sq. ft. to 400,000 sq. ft. Gold Ridge also plans to add a department store measuring 60,000 sq ft. and a food court with a 500-seat capacity. There will also be 400 specialty shops, a 10-screen cineplex, a 10,000-sq. ft. gourmet supermarket and a 60,000-sq. ft. hypermarket.

Savills Predicts Luxury Home Rates Drop (21 Nov 2008)

Rates on super luxury homes as well as high-end units are expected to drop more than 20 percent in the next five quarters, according to Savills Singapore. The firm also added that declines of 12 percent and 14.3 percent on the respective segments would eventually follow in the first three quarters of 2008.

This forecast is the most controversial announcement that the firm has ever given yet other firms affirmed on this estimation.

Savills reported that the segments affected – the super luxury and the high end houses – are fragile to the gradually-decreasing global investments.

According to the said report, the average capital value for the non-landed high-end units during the fourth quarter of 2007 was S$2,410 per square foot (psf). However, the value fell to a whopping S$2,065 psf during the third quarter of 2008 which was 14.3 percent lower than the aforementioned rate.

On the other hand, the average capital value for super luxury homes (non-landed) slided down to S$3,240.40 psf in Q3 2008 which was 12 percent below the Q4 2007 rate.

Though the firm expects that rates in the two segments would drop to 5-8 percent in a year’s span and a quarter, Savills assured that the growth of HDB flat owners who would upgrade their units will, at least, provide a certain amount of force.

In addition to the leverage provided by the stable support to HDB upgrade by homeowners, Savills also listed the increase in rental demand would also weaken in the coming year. Leasing head of Savills Patrick Lai commented, “The inflow of expats is expected to slow down, although we're still seeing an influx of foreign talent into Singapore, particularly in the healthcare, pharmaceutical, R&D and logistics industries.”

Credit Tightens As Prices Fall (16 Nov 2008)

As property prices start to fall, home loans became more difficult to acquire.  When value of properties fall down, credit is harder to get as banks and other financial institutions tighten their credit machinery.

Banks grant only 90 percent of the value of the property or its selling price, whichever is lower.  An independent valuation is used to access the worth of the property, so that when there is a difference between the acquisition price and the valuation, the buyer will have to come up with the balance.

But, here is the catch.  Because of falling prices and poor demand in general, banks are being cautious of the future so they tend to lean to lower property valuations.

This is usually experience by most home owners.  For instance, a flat owner in a Spring Grove condominium wanted to avail of lower interest rates.  However, since the value of his property went down, the bank refused to extend him credit.  He had no other option but to raise his own funds.

A worst thing is when the property valued so low by the bank that the buyer, not being able to get financing, had to cancel buying it.  If a buyer realises that his condo unit with an area of 1,200 sq feet is valued less than the amount he was to pay, he surely will cancel the deal.  And nobody can keep this fact from the buyers because they can always check the bank’s valuation and compare it with the purchase price.

Property Writedowns Affects Future Profits (16 Nov 2008)

As small home developers starts to cut prices, other property groups become pressured to make writedowns too. This will cut bottom lines, which have already begun to fall in the newest quarterly reports.

Way back in 2001, CapitaLand and Keppel Land had real estate projects with breakeven costs below realistic selling prices.  For the Singapore residential estates, they had to make massive writedowns.

It seems that this will be repeated again as realistic and achievable selling prices are way below breakeven costs.  Developers however, may barely make it through the fourth quarter.

This year’s valuation is predicted at 10-15 percent below that of the previous year for expensive homes while prime lots may decline at a higher 15-20 percent.

Because this trend has lasted for some six to eight quarters, it is expected that it will continue through the coming months.  High-end sites may require a lot of written down than mass market sites.  They have less choice but to make writedowns compared to others who acquired property for development in the earlier years.

What also worries developers are those who sold homes on deferred payment as some of them will realise their profits only upon the site’s projected completion.  Thus, there would be trouble once these buyers would default on their payments or choose to cancel their contracts.

This scenario will lead the developers postponing the realisation of their profits while they are un-booking their previous sales.  Only when they have new buyers will they be able again to make records of their expected profits.

One expert however, says that the worse from these writedowns have already been factored in and is therefore not bothered by them.