Thursday, July 29, 2010

CNA: S'pore real estate firms axe thousands of agts ahead of new MND regulations

S'pore real estate firms axe thousands of agents ahead of new MND regulations
By Joanne Chan 27 July 2010 

SINGAPORE: Real estate firms in Singapore have axed thousands of agents, ahead of the regulatory framework to be implemented by the National Development Ministry. 

The framework seeks to professionalise the industry, with the introduction of a new statutory board, known as the Council for Estate Agencies, and enhanced regulatory guidelines. 

Channel NewsAsia understands that a Bill for the framework could be introduced in Parliament as early as October. 

When contacted, the Ministry would only say that a Bill will be introduced in the second half of this year, with the Council operational by year-end. 

Director of Dennis Wee Group, Chris Koh said: "It's going to be difficult for agents with a full-time job while moonlighting as an agent. Because the moment the employer goes into this public registry, the employer will know that you are an agent, and you stand to lose your existing full-time job." 

Earlier this month, Dennis Wee Group's (DWG) housing agents were called back to their office to update their personal information and be briefed on the requirements of the new regulatory framework. The information collected was then submitted to the National Development Ministry, to be part of a new central registry of all agents. 

1,500 of 5,000 agents were axed as a result of the exercise - mostly inactive or part-time staff. 

Under the new guidelines, agents will also be required to pass a mandatory industry examination. Only those who already have industry certification will be exempted. 

Rather than wait for the new examination, DWG has asked all its agents to get themselves certified with either the Certified Estate Agent Course or the Common Examination for Salespersons. 

Another firm, PropNex, terminated 1,200 agents at the start of this year, either because they were inactive or unwilling to take up personal indemnity insurance. 

The insurance covers any financial liabilities arising from housing transactions. 

Agents associated with money-lending were also released. 

CEO of PropNex, Mohd Ismail said: "Any PropNex agent who has a money-lending licence will not be allowed to practice. He or she will have to make a decision, because we do see a conflict of interest. We have terminated an agent who has been very active, however, he wanted to maintain both and that was not acceptable to us." 

ERA, which has about 3,000 active agents, says it removes about 100 inactive agents from its database every month. 

Associate director of ERA Asia Pacific, Eugene Lim said the company has also been conducting training to prepare their agents for the Common Examination for Salespersons. 

To date, more than 2,500 ERA agents have taken this exam, with some having to do retakes for the paper. 

HSR, which represents some 7,000 agents, says it regularly checks its database for inactive agents who are then put on a passive list and sent reminders to go for retraining. 

There are an estimated 30,000 housing agents in Singapore. 

The National Development Ministry has also been in consultation with various real estate firms to standardise documents used in the trade. 

These include documents governing an agent's exclusive right to sell a property. 

Currently, each agency has its own terms and conditions, which can be confusing for consumers. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

CNA: BCA mulls law to get owners to "green" existing buildings

BCA mulls law to get owners to "green" existing buildings
By Wong Siew Ying 27 July 2010 

SINGAPORE: The Building and Construction Authority (BCA) is mulling a possible law to get property owners make their existing buildings more environmentally-friendly. 

The rule will cover all existing buildings, with the main focus on commercial and office buildings and hotels. This could come in two to three years to help Singapore meet its goal of "greening" 80 percent of its buildings by 2030. 

So far, only 8 percent of some 210 million square metres of existing floor area have been "greened". 

To promote sustainable development, the BCA launched the Green Mark Scheme in 2005. Over 450 buildings in Singapore are now part of the scheme, and all new buildings have to meet minimum Green Mark standards. 

To get existing buildings to follow suit, a S$100 million "Green Mark Incentive Scheme For Existing Buildings" was launched in April last year to encourage building owners to undertake the necessary retrofits to upgrade their buildings. 

Separately, the Urban Redevelopment Authority (URA) will also grant additional floor area to encourage the private sector to develop buildings that attain higher tier Green Mark ratings. 

Dr John Keung, CEO of BCA, said: "We haven't gone very far yet but we are looking at whether there are interested developers, good consultants, designers to re-design the buildings to retrofit the buildings." 

BCA said the costs of constructing green buildings have come down. 

The premium for a Green Mark Platinum building was around 2-5 percent of total investment previously. Now it's about 1 to 2 percent. This has also cut the payback period of the investment. 

BCA is also expected to update its Green Building Masterplan next month. 

BCA said it is in talks with industry players and so far, some developers and landlords of hotels are keen on the idea of greening existing buildings, because of the savings that can be reaped from being energy efficient. 

Separately, the Singapore Contractors Association wants to raise environmental awareness among its members through a new two-day workshop. 

The association hopes to take the programme overseas in five years. 

Andrew Khng, president of Singapore Contractors Association, said: "What the Association has done is it has come up with an initiative to promote a certification scheme - called SEC SCAL Eco certification scheme - for members and this is to look at reducing carbon footprint for members." 

The outlook is bright for the construction sector. 

The first half of the year saw about S$11 billion of projects awarded. 

BCA said another S$10b to S$16b in contracts are due out in the second half. 

Construction demand for 2011 and 2012 has been projected to be between S$18b and S$25b each year. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Business Times: Building of Labrador nature walk begins

July 28, 2010
Building of Labrador nature walk begins

CONSTRUCTION for the long-awaited Labrador Nature and Coastal Walk began yesterday and by the first half of 2012, the public will be able to explore new nature walks over the sea, mangrove and forested areas.

The Walk at the Labrador Nature Reserve will cost $13.5 million, and is part of the Parks and Waterbodies Plan first announced by Urban Renewal Authority in 2002, which aims to enhance Singapore's green spaces and waterbodies islandwide. 

As an extension of the Southern Ridges, the Walk will link the Southern Ridges to the Southern Waterfront via a series of connections from Alexandra Road to the waterfront at Bukit Chermin, and will enable visitors to experience 'diverse settings comprising hills, mangroves and coastlines all in a single day', according to an Urban Redevelopment Authority press release.

URA chief executive Cheong Koon Hean said: 'The Labrador Nature and Coastal Walk will allow visitors to get even closer to nature and open up the coastal areas at Bukit Chermin, which are currently inaccessible.'

The 2.1 km walk comprises three thematically distinct trails. First is the Alexandra Road garden trail between Depot Road and Telok Blangah Road. The second, the Berlayer Creek mangrove trail, begins at the area surrounding the future Labrador Park MRT station. The third is the Bukit Chermin Harbour View boardwalk over the sea, which will connect Labrador Park to the Reflections at Keppel Bay condominium.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Business Times: Ho Bee Investment puts in top bid for Buona Vista site

July 28, 2010
Ho Bee Investment puts in top bid for Buona Vista site

HO Bee Investment is planning to invest about $1 billion to develop a commercial project at North Buona Vista Drive.

The company told BT this after it submitted the top bid for a 99-year leasehold commercial plot located in the one-north research area yesterday.

The tender for the 1.8 hectare site attracted two bids. Ho Bee's was $410.99 million, which works out to $342 per sq ft per plot ration (psf ppr).

The second bid came from Mapletree Investments, at $384 million or $320 psf ppr.

The site has a maximum allowable gross floor area (GFA) of 1.2 million sq ft. Ho Bee hopes to set aside some 1-2 per cent of space in the commercial development for retail shops. It is also exploring the possibility of having service apartments within the development.

The site has a good size for creating 'a landmark building in a very attractive location', Ho Bee said. It plans to lease the development out for recurring income when it is ready in about four years' time.

Market watchers had expected demand for the site to be lukewarm given its large size, which would involve a huge capital commitment. 

But the site has other attractions: it is near Buona Vista MRT Station and lies within a growing research cluster for the biomedical, infocommunication and media industries.

CB Richard Ellis Research executive director Li Hiaw Ho believes the site can yield a net lettable commercial area of just under a million sq ft. 'This would facilitate the expansion of R&D functions at one-north and serve as an alternative source of office supply post- 2013 in the Buona Vista sub-regional centre.'

Sentiment in the commercial property market has picked up of late. Official figures show that office rents increased 1.1 per cent in the second quarter from a quarter ago. Prices of office space climbed 4.6 per cent.

There was also a net increase of 398,264 sq ft in office space demand in the second quarter. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Business Times: Is CCT saving cash hoard for Market Street Car Park?

July 28, 2010
Is CCT saving cash hoard for Market Street Car Park?

CAPITACOMMERCIAL Trust (CCT) reiterated last week that it will not distribute a special payout to unit-holders when it completes its $380 million sale of StarHub Centre in September. Likewise, it did not return proceeds to shareholders when it completed the sale of Robinson Point in April.

The trust has said it is setting aside the net cash proceeds from these two divestments - totalling about $577.5 million - for future acquisitions and to reduce debt.

On the debt front, CCT can choose to refinance debt when it falls due, given its current gearing ratio is relatively low at about 33 per cent.

As for acquisitions, the trust has thus far found it difficult to buy office blocks. In fact, it has been selling office blocks which it believes have reached the optimal stage of their life cycle as office assets - such as Robinson Point and StarHub Centre.

CCT's manager says it is keen to increase its exposure to the Singapore Grade A office sector. But buying such assets in today's market is not easy for a Reit, as owners of Grade A office buildings are pricing the recovery in rents into their asking prices. As a result, the yields on these properties are not high enough to generate accretion for a Reit if it were to buy such expensive assets.

Given this challenge, some analysts think that instead of keeping its cash for future acquisitions, CCT could be saving it for something else - perhaps to re-visit plans to redevelop Market Street Car Park into a Grade A office project.

It was in January 2008 that CCT first disclosed it had obtained outline planning permission (OPP) from the Urban Redevelopment Authority to redevelop Singapore's first multi-storey car park into a new office tower with gross floor area of about 850,000 sq ft and a maximum plot ratio of 14.49. It estimated the total cost then at $1-1.5 billion.

But the global financial crisis struck - and Singapore office rents started to slide. In January 2009, CCT's manager announced its decision to abort the redevelopment plan, citing the uncertain market outlook and tight credit conditions, as well as high development cost and significant project size.

Quizzed about the possibility of re-visiting the Market Street plan at CCT's second-quarter results briefing last week, CapitaCommercial Trust Management chief executive Lynette Leong said the OPP had lapsed, but added that the group continually reviews its assets. She also said that the Market Street property is generating an attractive net yield of more than 8 per cent based on its $47 million valuation as at June 30, 2010, thanks to a shortage of CBD parking lots. The yield surpasses that for office space.

However, some analysts think that the time could be right for CCT to make a fresh planning application to redevelop Market Street Car Park into offices. And approval from authorities should again be forthcoming. For one, there is concern among property consultants about a potential shortage of new prime Grade A office space post-2012. The redevelopment of Market Street Car Park into offices could help alleviate this to some extent.

Redeveloping the property will mean the loss of 704 CBD parking lots that provide season and hourly parking. But of course, the authorities could always require CCT to reinstate this supply in its new project. And some relief will come soon from 250 public parking lots - for hourly parking - that will be ready by October this year underneath the Lawn @ Marina Bay, which is part of the Marina Bay Financial Centre project.

Standard Chartered Equity Research estimates the cost of redeveloping Market Street Car Park has fallen from 2008, probably to $1 billion to $1.1 billion today, given lower construction costs and development charges now. 'If the Grade A office building (about 850,000 sq ft) conversion is completed by 2015 and rented for $10-14 per sq ft a month, the yield on cost would be about 6-8 per cent and development profit would be 6-25 cents per unit,' it said.

Given CCT's $6 billion asset size and the rule that development properties must make up no more than 10 per cent of a Reit's asset size, CCT will no doubt have to seek the appropriate structure to undertake the development, perhaps jointly with parent CapitaLand.

A cash hoard will come in handy for such a venture.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Business Times: Australand posts A$72.2m H1 profit

July 28, 2010
Australand posts A$72.2m H1 profit
Turnaround from loss helped by A$11.8m of revaluation gains on investment property

CAPITALAND subsidiary Australand has returned to the black at half time. It has posted A$72.2 million (S$88 million) net profit for the first half ended June 30, 2010, against a net loss of A$268.8 million in the same year-ago period. 

The turnaround was helped by A$11.8 million of revaluation gains on investment property, against a A$235.3 million revaluation loss previously.

There was also no half-time impairment of development assets this time round; last year, Australand booked impairment of about A$93 million.

Earnings before interest and tax (Ebit) from the investment property and residential divisions improved, although this was partly offset by lower profit from the commercial and industrial division.

Australand will make a half-year distribution of 10 Australian cents per stapled security, underpinned by recurrent income from the group's quality investment portfolio. The payout is more than treble last year's three Australian cents.

The group expects to pay 10.5 Australian cents for the second half, for a total of 20.5 Australian cents for the year, more than four times full-year 2009's five Australian cents. 

'The fundamentals for the commercial, industrial and residential sectors remain positive,' said Australand managing director Bob Johnston. 'With a strengthened management team, the group is well positioned to achieve its 2010 earnings guidance and deliver growth in 2011.'

The group also remains on track to deliver a full-year operating profit in line with the 2009 result, he added. Australand posted A$120.2 million net operating profit for FY2009.

Gearing came to 27.1 per cent as at end-June, up slightly from 25.4 per cent as at end-December but still within the group's target range of 25-35 per cent. Australand continued to comply with all debt covenants in the first half. The group had cash and cash equivalents of A$39.5 million as at June 30, down from A$123.6 million as at end-December.

Earnings per stapled security for the first-half came to 12.5 Australian cents, against a loss per stapled security of 72.7 cents for the same period last year.

Australand is a stapled group in which the security holders hold direct interests and an equal number of securities in each of the following: Australand Holdings, Australand Property Trust, Australand Property Trust No 4 and Australand Property Trust No 5.

Ebit from investment property (excluding revaluation gains/losses) rose to A$82.6 million, from A$77.9 million previously.

'The increase in recurrent income was driven by comparable rental growth of about 3.4 per cent and additional income associated with the Crest Hotel sales process,' Australand said.

Ebit from residential jumped to A$23.7 million from A$14.3 million previously, despite a 24.2 per cent fall in revenue to $183.9 million - as the impact of low margin and impaired inventory progressively falls.

However, Ebit from commercial and industrial halved, to A$10.95 million from A$22.98 million.

Australand said: 'With the improved level of enquiry, we remain optimistic that development activity in the commercial and industrial division will strengthen during the second half of 2010, leading to growth in 2011.'

It also noted that valuations for quality assets have stabilised. It expects investment property earnings to grow steadily - underpinned by embedded rental growth and the delivery of new assets from the group's internal development pipeline.

'The residential division's full-year Ebit contribution is expected to be in line with 2009. The progressive reduction in impaired and low margin inventory and the commencement of several large new projects will underpin earnings growth and momentum in 2011.'

Australand shares last traded at A$2.58. 

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Straits Times: Just two bids for one-north office site

Jul 28, 2010 
Just two bids for one-north office site 
By Joyce Teo 

A TENDER for a large high-rise commercial site in the 200ha innovation and research hub one-north has attracted just two bidders.

Ho Bee Developments put in the top bid of $410.99 million or $342.20 per sq ft per plot ratio (psf ppr).

That is about 7 per cent above the second highest bid of $384 million or $319.80 psf ppr from Mapletree Trustee.

Ho Bee's general manager of marketing and business development, Mr Chong Hock Chang, said its plan is to rent out the office units for recurring income, and it is looking at achieving office rents of $5 psf. 

'We believe we can build an iconic building on this landmark site,' he said.

The 99-year leasehold site has been on the Government's reserve list of sites since April 2008. A tender was finally triggered in May when Mapletree committed to a minimum bid of $320 million, or $266 psf ppr, which the Government found acceptable.

The site of about 1.8ha is located at the junction of North Buona Vista Road and Commonwealth Avenue West and is near the Buona Vista MRT station. It has a

potential yield of 111,565 sq m, with 2,000 sq m being set aside for retail use. 

JTC said the building will provide office space outside the Central Business District for the business support companies of the research institutes at one-north.

Cushman & Wakefield managing director Donald Han said the bids were within the expected range.

The low level of interest is due to the huge price sum involved, he added.

Also, 'as an office product, it is untested in the area, which is predominantly industrial in nature', he said.

CBRE Research said the development cost for a predominantly office tower is about $900 psf, based on the top bid.

Just under 1 million sq ft of net lettable area of commercial space could be developed on this parcel, said its executive director Li Hiaw Ho.

'This would facilitate the expansion of research and development functions at one-north and serve as an alternative source of office supply post-2013 in the Buona Vista sub-regional centre,' he said. 

Mr Han said current rents in the area are about $3.80 psf to $4.50 psf.

As office rents have bottomed out in the second quarter, they are expected to rise in time. 'The rental yield would therefore be in excess of 5 per cent,' said Mr Han.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Tuesday, July 27, 2010

Business Times: More courses for building specialists

July 27, 2010
More courses for building specialists
Shortage of industry professionals spurs BCAA, SISV initiative

THE booming construction industry over the years has created a shortage of qualified surveyors and other specialists.

As such, in a release by the Building and Construction Authority (BCA), it was revealed that the BCA Academy (BCAA) and Singapore Institute of Surveyors and Valuers (SISV) will put in place a number of initiatives to build up and strengthen the pool of building professionals within the industry.

Among the specialists in demand include quantity surveyors, land surveyors, valuers and property managers. 

To resolve this, the BCAA and SISV will be jointly introducing more academic programmes such as diploma, specialist diploma and degree courses to train new professionals and to upgrade the skill sets of existing ones. 

BCAA will also be working with SISV to initiate more dialogue sessions with firms in the industry to facilitate discussion on developing such capabilities.

To further promote the building profession, BCA and SISV signed a memorandum of understanding to share resources, promote educational programmes and jointly create and implement new products and services to drive the local building industry forward. 

John Keung, CEO of BCA, said, 'I'm confident that this new collaboration will help elevate the occupational profile in the built environment. BCA looks forward to working with SISV to develop more programmes to train personnel at the technical and professional level to meet the needs of the industry.'

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400

Straits Times: Pastoral View tries to sell en bloc again

Jul 27, 2010 
Pastoral View tries to sell en bloc again 
After failed 2008 attempt, it is making another bid, this time with adjoining vacant plot
By Joyce Teo 

THE revival in the collective sale market this year is continuing, with a small development and adjoining land parcel in the Novena area the latest to go on sale.

The 50-unit Pastoral View and the vacant plot have a combined asking price of about $130 million to $150 million.

The two sites in Bassein Road have a total land area of 51,395 sq ft and can be built up to some 143,906 sq ft of gross floor area and a height of 36 storeys. They are near Novena MRT station.

Credo Real Estate, which is marketing the freehold sites, said the buyer can choose to build a high-rise tower comprising 140 apartments with an average size of 1,000 sq ft each.

The price translates to a land rate of $904 to $1,043 per sq ft per plot ratio, said its deputy managing director Tan Hong Boon. 

This includes a modest development charge of about $157,000 for the plot at 11 Bassein Road to redevelop it.

No development charge is payable for the 10-storey Pastoral View, which was previously put up for sale in early 2008 at an asking price of $95 million without the adjoining plot. 

But the market had turned for the worse by the time the tender closed in April that year, and it was not sold.

Credo said buyers can opt to tender for the combined sites or either one.

Pastoral View alone is 34,193 sq ft in size and going for $86.6 million to $100 million. If the sale goes through at the minimum asking price, the estate's owners will stand to reap at least $1.04 million to $4.56 million each, depending on their unit's size.

The smaller adjoining plot at 11 Bassein Road is 17,203 sq ft in size. The asking price for the plot alone is about $43.4 million to $50 million. A search shows that it is owned by OCBC Bank.

So far this year, at least 16 sites worth $786 million have been sold en bloc, compared with just one last year at $100.8 million, said Credo.

More sites are expected to be put up for collective sale this year, said Mr Tan.

Team Marshe
Martin Koh/ Sherry Tang
93833992/ 98444400