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Thread: BT Property 2011 - March 3, 2011

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    Default BT Property 2011 - March 3, 2011

    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428572-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Seeking opportunities[/SIZE][/B]

    By KALPANA RASHIWALA


    THE jury is still out on the latest dose of property cooling measures introduced by the government on Jan 13. Both buyers and sellers are watching the market closely, trying to assess the impact of the measures.

    It remains to be seen how prices will move. And while property transactions are expected to come off, interest in property isn’t about to dry up anytime soon in Singapore, especially in the current inflationary climate. Property after all is often highlighted as a good hedge against inflation.

    A key factor affecting the outlook for Singapore’s luxury condo market will be whether foreign buyers will return in big numbers this year. Although there was a pick-up in foreign buying last year, this has not recovered to the level of 2007, when Singapore gained prominence on the radar of international property investors drawn by the widespread publicity of the Remaking Singapore story.

    More bread and butter issues like the Singapore economy and interest rates will be the major factors affecting buyers and sellers in the mass-market. We provide you in the following pages a guide for your property decisions covering luxury condos, bungalows, cluster homes, mass and mid-market condos, HDB resale flats and executive condominiums (a hybrid of public and private housing). There are also articles on trends in the luxury rental housing market, contractors turned developers and interior design, plus foreign property markets like London, Malaysia and Australia.

    Also check out upcoming launches and their locations in the centrespread of this issue.

    Best wishes on your property pursuits.

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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428555-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Prices of top-end condos may cruise along this year[/SIZE][/B]

    [B]Singapore can expect less growth in the inflow of foreign investors this year unless exciting new initiatives are announced by the government again, says HAN HUAN MEI[/B]


    THE luxury condominium market rode a strong wave of recovery in 2010. New projects that were launched saw a reasonable take-up rate and a few existing projects that were put in cold storage during the financial crisis found buyers for multiple units.


    [SIZE="1"]Exclusivity: The Marq on Paterson Hill , which obtained Temporary Occupation Permit in January this year, is one of the projects contributing to this year's supply of 440 luxury condos[/SIZE]

    As such, land-hungry developers started hunting for development sites in the prime districts again. By end-2010, it was clear that interest in luxury homes had returned and looked set to continue in 2011.

    As response to new launches in the mass and mid-tier segments picked up in the second half of 2009, developers began to test the market with new luxury projects.

    [B]More supply[/B]

    Knowing that there was ample liquidity in the market, they stepped up supply in 2010 even though the take-up rate was modest.

    Transactions last year showed that luxury prices recovered some 20 per cent from end-2009 levels but were still about 10 per cent below the 2007 peak.

    Institutional investors seized the opportunity to acquire multiple units in existing developments and projects that were nearing completion.

    Arch Capital bought all 34 units in Royal Oak (a refurbished project) for around $200 million or $2,337 per square foot.

    Alpha Investment Partners bought 23 units in Draycott Eight - mostly tenanted - for $157 million or $2,300 psf.

    Real Estate Capital Asia Partners picked up 20 units of Paterson Suites for $118.6 million or $2,700 psf.

    The interest in luxury homes pushed developers to acquire prime development sites via collective sales.

    Meng Garden at Lloyd Road, with a land area of 35,639 sq ft and a 2.8 plot ratio (ratio of maximum gross floor area to land area), was sold to TG Development at $137 million or $1,380 psf per plot ratio (psf ppr) including a development charge.

    Robin Court and its next-door site, together with the recently purchased Robin Star, with a combined area of 64,879 sq ft and plot ratio of 1.4, cost Sing Holdings a total of $124.3 million or $1,297 psf ppr including a development charge. Serene House at Jalan Serene/Cluny Park Road was bought by the Tuan Sing Group for $99.1 million or $1,388 psf ppr including an adjoining driveway.

    As these land prices would translate to breakeven costs of $1,900 psf to $2,000 psf, it shows that developers were confident that upmarket home prices would hold in 2011 and beyond.

    At the close of 2010, the report card showed the highest volume of 16,292 new homes sold and a 17.6 per cent hike in the overall home price index.

    It was enough to convince the government to act.

    The latest property measures introduced on Jan 13 this year were meant to discourage speculative buying fuelled by low interest rates and high liquidity.

    These measures were also targeted at new mass-market housing (in the Outside Central Region) whose median price had climbed from $729 psf at end-2009 to $854 psf at end-2010.

    Although players in the high-end segment generally have deeper pockets, they are not entirely immune from the property measures.

    The imposition of the seller's stamp duty for residential properties disposed of within four years of purchase - taxed on a reducing scale from 16 per cent of the sale price in the first year to 4 per cent in the fourth year - will tarnish the desirability of the properties as short-term investments.

    The lowering of the loan-to-value (LTV) ratio from 70 per cent to 60 per cent for purchasers with at least one outstanding housing loan will increase the upfront cash burden, while limiting the LTV ratio to 50 per cent for loans to corporations and funds will deter the flow of hot money into Singapore.

    These measures will weed out speculative demand leaving behind genuine buyers who either buy for owner-occupation or hold for longer term investment returns.

    Assuming a healthy economy this year, sellers are not likely to reduce prices because they have holding power.

    Rents in the prime residential districts (Core Central Region) have recovered by 18.6 per cent from end-2009 levels and will likely remain firm for the rest of the year.

    Buyers who are looking for rental return will have to be content with a 2-3 per cent yield on luxury homes based on current price levels and rental rates.

    According to the Ministry of Manpower, 58,300 jobs were created for foreigners in 2010, compared to a decline of 4,200 jobs in 2009.

    However, employment numbers this year will not be as high since GDP growth is expected to slow to 4-6 per cent from 14.5 per cent last year. In terms of new supply, some 480 of the 10,399 new homes completed in 2010 were from luxury projects like 8 Napier, Ardmore II and The Orchard Residences.

    [B]New supply[/B]

    Another 8,400 new homes are expected to be completed this year, with 440 units coming from luxury projects such as The Marq On Paterson Hill and Cliveden At Grange. Competition for top grade rents will be keen. As such, those who are buying luxury properties this year should be prepared to hold on to their units for three to five years before considering selling for capital gains.

    Will luxury condos be the outperformers in 2011?

    It would be more realistic to expect the luxury market to cruise along like it did in 2010.

    Although more foreign and permanent resident buyers have bought new properties in the prime districts in 2009-10, the numbers were less than in 2006-7, during the initial excitement over Marina Bay as a global financial centre and the building of the two integrated resorts.

    In the absence of similar government initiatives in 2011, we can expect less growth in both the inflow of foreign investors and home prices.

    As such, the volume of luxury transactions this year is likely to be around 150-200 units with prices averaging at $3,000 psf and $3,500 psf for resale and new projects respectively (equating to a 5-10 per cent increase).

    [I]The writer is associate director, CBRE Research[/I]







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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428553-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Mass, mid tiers still to hog limelight[/SIZE][/B]

    [B]Buyers will be more selective and pick projects in more attractive and convenient locations, write NG WEI EN and CHUA CHOR HOON[/B]


    MASS and mid-tier properties were star performers last year, with developers testing new benchmark prices in the suburbs as buyers turned out in force, attracted by low interest rates and a strong economic recovery.

    Mass market condominiums are found in suburban areas, selling in the range of $600-$1,000 per square foot (psf), while the mid-tier properties would be in the range of $1,000-$1,400 psf.

    Both in terms of volume of sales and prices, these segments surpassed their previous peaks. Using the Urban Redevelopment Authority's Outside Central Region (OCR) price index as a proxy for the mass and mid-tier markets, prices rose 15 per cent in 2010 and were 19 per cent higher than the last peak in Q2 2008.

    But will they continue to shine in 2011, after the latest round of cooling measures?

    The earlier cooling measures in August 2010 did little to dampen demand. Despite the wide-ranging measures affecting most buyers in both the public and private housing sectors, activity slowed for just two months in September and October. The OCR price index rose 2.1 per cent in Q4 2010, just slightly less than the 2.2 per cent in Q3 2010.

    This could have prompted the government to announce a tougher set of measures in January this year. The equity payment was raised to 40 per cent for buyers with existing housing loans and those who sell their properties within four years of buying it face a hefty stamp duty of 4-16 per cent.

    [B]Launches[/B]

    The majority of launches this year will still be in the mass market and mid-tier segments, mainly from developments on Government Land Sales sites and collective sale sites that were bought in 2010. Hence, the bulk of purchases is likely to be in these segments.

    However, sales volume in the primary market is expected to be lower in 2011 as the January measures will deter short-term investors and cash-tight buyers. Although overall demand will fall, not all investors will withdraw from the market as evident from the January sales.

    Some investors intend to hold their properties for the long term. Others may find the 4 per cent seller's stamp duty by the fourth year of sale acceptable and shift their focus to off-the-plan units that will be completed three to four years later. Those buying for rental yield would, however, favour completed or near completed projects.

    The take-up of new units is forecast to be in the region of 9,000-12,000 compared to the record 16,292 units sold last year. This takes into consideration the possibility of more measures to curb demand if take-up rebounds over the next few months.

    Nevertheless, prices should remain largely stable in 2011, with any decline likely to be capped at 5 per cent for the whole year, on account of the low interest rates, a growing economy, and financially strong developers with limited landbanks.

    [B]Projects with an edge[/B]

    The residential market will be more challenging this year as buyers will be more selective following the recent measures. Projects with the following attributes will have an edge:

    # Smaller units: More smaller units, usually found in the CBD or CBD fringe, made an appearance in the mass and mid-tier segments last year. Their compact size makes them more affordable in absolute quantum.

    According to the latest Census report, the proportion of single citizens aged 30-34 rose by 9 per cent and above for both genders between 2000 and 2010. So there is a growing group of singles wanting to buy small units for their own occupation which need not be in the CBD.

    # In HDB towns with few private project launches: There is pent-up demand in towns where there have been no project launches for a while.

    # Close to MRT stations: Projects near MRT stations have broad appeal. Singles like the convenience if they are buying to stay, while investors will find it easy to rent out the units.

    Waterbank at Dakota and The Scala - both close to MRT stations along the Circle Line which started running in April 2010 - sold out within a couple of months of their launches. When plans for Downtown Line 3 were announced last August, it boosted the sales of new projects along it, such as Waterfront Gold at Bedok Reservoir.

    # Within areas targeted for transformation: Land use planning by the government plays a great part in enhancing the attractiveness of previously quieter districts. For example, the unveiling of plans in April 2008 to transform Jurong Lake District into a business and leisure destination drew attention to the area.

    High tender bids were received for a white site next to the Jurong East MRT station and for the Lakefront Residences plot near the Lakeside MRT station. The Lakefront Residences, launched in November 2010, saw good response even though units were priced above $1,000 per sq ft. That was much higher than the $600-650 psf that the adjacent Caspian was launched at in early 2009.

    # Within an area refreshed by enbloc sales: A cluster of enbloc redevelopments can rejuvenate an area and create more demand and higher prices. For example, the Balestier area had previously been regarded as the poorer cousin to nearby Novena.

    However, a cluster of new projects there in the past two years like The Arte, Vista Residences, Cube 8, 368 Thomson, D'Mira, Prestige Heights and The Mezzo from the numerous enbloc sales that took place in 2007 have given the area a fresher look and lifted prices above $1,000 psf.

    While Singapore's economic prospects are bright and there is ample liquidity to support residential prices, there are some challenges on the horizon. Apart from the sluggish growth in developed countries, the residential sector faces substantial completions in the pipeline and the possibility of more policy measures to cool the market. Property buyers are thus likely to take extra care when looking for opportunities in the residential sector.

    [I]Ng Wei En is research analyst and Chua Chor Hoon is head of South East Asia research at DTZ[/I]


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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428554-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Strata landed homes attract a following[/SIZE][/B]

    [B]Cluster housing combines features of landed homes with common facilities, write WENDY TANG and PNG POH SOON[/B]


    LANDED properties shone brightest in the private residential properties category in 2010 when prices soared by some 30.8 per cent year on year (based on the Urban Redevelopment Authority's property price index) compared to non-landed properties which appreciated by 14.0 per cent. Prices of detached houses took the lead, increasing by 37.6 per cent year on year while the prices of semi-detached and terrace houses went up by 26.3 per cent and 26.1 per cent respectively.

    For the whole of 2010, there were a total of 543 strata landed property sales, excluding enbloc sale transactions. This was slightly higher than that in 2009 when about 511 strata landed units were sold. Average transacted prices of strata landed housing increased by 12 per cent to 28 per cent for freehold and leasehold properties respectively. While prices of apartments increased by some 15 per cent in general, strata landed housing, in particular leasehold properties, performed better.

    Strata landed houses are low-rise landed residential properties that do not come with land titles but are instead strata titled. In some instances they may also be known as cluster housing for those in landed locations while those in mixed landed or non-landed developments are called townhouses.

    Legally, the ownership structure of strata landed housing is similar to condominiums where the land in the development is shared among all owners and subjected to procedures like voting being required on issues such as major alterations and addition works, election of a management committee or disposal of property whether in part or whole.

    The concept of strata landed housing has been around for 18 years since it was introduced in 1993. The intent was to add variety and choice for home buyers who prefer to live in landed housing but would like to enjoy communal facilities such as gyms, clubhouses, swimming pools and security services within a gated community.

    Broadly, strata landed housing can include any one or a combination of bungalows, semi-detached houses or terrace houses within a development and should be located in designated landed housing areas.

    [B]Bigger houses[/B]

    Cluster housing appeals to buyers who enjoy communal facilities and require larger living spaces but cannot find suitable units in condominiums. Similar to landed properties, cluster houses, typically about two to three storeys high, come in sizes ranging from about 2,500 sq ft (terrace) to as much as over 7,000 sq ft (detached/bungalow).

    A set of revised strata housing guidelines came into effect on Feb 3, 2009 in which strata landed housing were prescribed a minimum plot size per unit depending on the conventional landed housing form. Under the guidelines, strata landed housing for bungalow, semi-detached and terrace houses require a minimum plot size of 400 sq m, 200 sq m and 150 sq m respectively.

    The revised guidelines reduce the number of strata houses allowable per development and were implemented to resolve concerns of increasingly congested strata landed developments. After all, strata-landed property buyers, in particular those with larger families, prefer the bigger built-up space typical of landed homes but want to have condominium facilities as well.

    While foreigners in general are not allowed to buy landed residential private properties, they may purchase strata landed properties within developments with condominium status without seeking approval from the Land Dealings (Approval) Unit. Some recent new projects in this category include D'Leedon and The Vision where one in every 10 strata landed property buyers within the development is a foreigner.

    [B]Rental performance[/B]

    Investors' interest also picked up as strata landed homes command a higher rental yield compared to similar sized landed properties. Tenants are often willing to pay higher rentals for the convenience of communal facilities like the pool, gym and playgrounds and in some cases for the close proximity to good local and international schools.

    Some new cluster homes can command rental yields of some 4 to 5 per cent compared to 2 to 3 per cent for landed homes. For example, cluster homes in districts 10 and 11 with average sizse of 3,000 to 4,500 sq ft can command monthly rents of $10,000 to $19,000 while similar sized suburban ones can get $5,000 to $12,000.

    [B]Upcoming supply[/B]

    There is an ample supply of private residential units, in particular non-landed properties. As at the end of the fourth quarter 2010, there was a total supply of 65,699 uncompleted units of private housing from projects in the pipeline. Of these, 32,776 units were still unsold. This includes 16,104 non-landed and 1,034 landed private residential units which are uncompleted, planned and under construction. The number of new landed properties is significantly lower because of limited land supply.

    Strata landed projects are becoming increasingly attractive and are preferred alternatives over non strata landed projects as they offer the best of both worlds - having landed properties' spaciousness, condominium facilities and gated security.

    To cater to rising demand and expectations, developers have increasingly built more strata landed projects with condominium like fittings. For example, the upcoming Eleven @ Holland comprises 82 luxurious units with private lifts complete with swimming pool and clubhouse. Some other new strata landed properties coming onstream include Watercove Ville (80 units), Poets Villa (40 units), strata housing at Westwood Avenue (93 units) and Cluster Housing at Mount Rosie Road (193 units).

    [B]Outlook[/B]

    As 2011 gets underway, the property market is caught in another round of government cooling measures, this time even more aggressive than the last three rounds. The fourth round of measures is evidence of the government's strong determination to stabilise the property market, and prevent a bubble from forming.

    Some had wondered if the market for strata landed homes will be significantly affected. Demand has been fairly stable over the past five years with an average 480 units changing hands each year with the exception of the recessionary year in 2008 and notwithstanding three rounds of cooling measures in 2009 and 2010. Sub-sales activities for strata landed homes are fairly low as most buyers are genuine home owners motivated by bigger space needs and long-term investors looking for stable returns.

    The outlook for the strata landed market looks positive as its current pricing level still lags that of comparable landed properties.

    The new measures will invariably affect current buyers' sentiment. However, what is more important is that the measures should not be viewed as permanent. The government welcomes long-term investors who believe in the Singapore story and not short-term liquidity swishing around, pushing up prices artificially.

    With Singapore expected to run at full employment and a positive economic outlook in 2011, the tight labour situation should continue to draw more foreign talent. The leasing market is expected to remain active. While prices have increased significantly and can be expected to stabilise, rentals should continue to increase - making strata landed houses an attractive investment, especially when current interest rates are low.

    Perhaps we can take a leaf from experiences in the US, Europe and Australia. Home buyers and investors should evaluate their property position and undertake some form of stress testing for scenarios such as property prices suddenly falling and interest rates spiking, all of which may arise from unexpected external events that may negatively impact our open economy.

    If one can stomach the short-term downside risks, one can enjoy the potential upside returns from long-term property investments.

    [I]Wendy Tang is executive director, head of residential services, and Png Poh Soon is associate director, head of consultancy & research, Knight Frank[/I]


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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428560-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Upside potential for luxe rentals[/SIZE][/B]

    [B]Offering unique differentiators helps developments stand out from the competition say JACQUELINE WONG and CLAIRE GENT[/B]


    THE luxury prime residential market in Singapore taps into the demands of high net worth individuals (HNWI) looking for spacious, decadent properties offering ancillary services that add to the luxurious quality of life demanded by such individuals.

    To qualify as a luxury prime condominium, the project should be located within a distinctively unique lifestyle precinct such as Orchard Road in Singapore, Knightsbridge in London and the Central Park vicinity in Manhattan, New York. The entire development must portray a feeling of luxury and space from the ground up. With luxury comes spaciousness, both within the unit and externally and while most developments would offer some larger units, these are mainly penthouses, but in a true luxury project all units are sizeable.

    Internally, the built-up area must be large, with tenants typically requiring units of 3,500 square feet and above, although the market at the moment typically provides units of around 2,800 sq ft to 2,900 sq ft. The layout must be well thought out, with separate family areas provided, as well as en-suite bathrooms and areas for entertaining guests.

    The site must also be large enough to provide sizeable facilities for residents to luxuriate in. The design of the condominium is also important, for both the external architecture and internal finishes, with quality internal furnishings by renowned architects all adding to the appeal of a development. A luxury property should have a differentiator, such as a concierge service, to appeal to potential occupiers in this market.

    Existing properties offering a combination of large luxurious units and ancillary services such as a concierge include Draycott 8, BLVD and Ritz-Carlton Residences. From the owners' perspective, such services enable them to achieve a premium on rentals, with developments such as 21 Anderson achieving premium rents (about 15 to 20 per cent above comparable average) as a result of the additional services on offer.

    [B]Overview of luxury market[/B]

    There are currently around 2,380 luxury condominium units in Singapore. These are located primarily in the prime districts of 9 and 10 (up to Cluny/Nassim area) and command rents of anywhere from $5.00 to $6.50 per sq ft per month (or about $14,500 to $19,000 per month) on average in Q4 2010. At the peak of the market in Q1 2008, rents for luxury prime condominiums reached $7.00 to $7.50 per sq ft per month (about $20,000 to $22,000 per month) on average. The supply of Good Class Bungalows (GCBs) for lease in this locality on the other hand is limited and they generally command rentals of $28,000 to $38,000 per month in Q4 2010, some 13 per cent from the peak of $35,000 to $40,000 per month recorded in Q1 2008.

    Occupancy costs for these luxury prime properties rose in 2010, mainly due to a lack of supply of both large condominium units and GCBs in the Orchard and Grange Road vicinity.

    The exodus of expatriates seen in late 2008 and early 2009 as a result of redundancies and lack of new job opportunities in the wake of the global financial crisis has eased, following the recovery of the economy in 2010. Talent is being retained in Singapore as expatriates look to extend lease terms and stay on to take advantage of Singapore's growing economy. Many expats were also able to remain in Singapore due to the introduction of the Personalised Employment Pass resulting in the outflow of expatriates being less severe than expected.

    Figures from the Singapore Department of Statistics indicate that the number of foreigners employed in Singapore in 2010 increased by 58,300, after declining by 4,200 in 2009 and foreigners' share of total employment in December 2010 increased to 31.4 per cent from 30.7 per cent in December 2009. More specifically, the financial services and professional services sectors have enjoyed employment growth of between 2.8 per cent and 5.5 per cent per quarter up to Q3 2010, boosting the demand for high-end properties from senior executives in these industries. The growth in expatriate arrivals has helped to push up rents as new supply has been limited, especially for large four-bedroom condo units in the $18,000 to $22,000 per month rental bracket.

    The growing demand is emerging in Singapore for large units of 3,500 sq ft and above in luxury prime condominiums offering additional services that differentiate them from other typical prime developments as wealthy expatriates remain in, and return to, Singapore looking for the best residential space on offer.

    Rents in the luxury prime condominium market especially for larger sized units have rebounded, registering a year-on-year growth of about 10 to 12 per cent at end 2010 compared to a drop of 26.2 per cent in end 2009. In 2011, 11 residential projects are scheduled to be completed in the prime districts providing 1,134 units. However, only two of these projects would be classified as luxury prime, The Marq on Paterson Hill by SC Global Developments and Cliveden at Grange by City Developments Ltd (CDL), which between them will yield just 176 new luxury prime units, or 15 per cent of the total new supply being completed in 2011 in the prime districts.

    As such we reckon rental in this particular micro-market is likely to experience further upside of 3 to 5.0 per cent per annum over the next two to three years albeit front loaded, that is, initial years 2011 and 2012 likely to register higher growth. Going beyond that, upcoming supply at potential projects in the prime Ardmore Park/Draycott area will help to keep rental growth in check should these developers choose to build luxury developments.

    Wing Tai Asia secured the former Ardmore Point site and is developing a new 43-unit luxury condominium project called Le Nouvel Ardmore, which was designed by French architect Jean Nouvel. Units here will start at 3,500 sq ft to the largest penthouse measuring 12,000 sq ft. Wing Tai, jointly with CDL, is also developing Anderson 18 which reportedly, could provide over 150 units of two, three and four bedroom apartments. Other sites in this area include The Ardmore at 6 Ardmore Park where SC Global will develop a new condominium, Pin Tjoe Court, bought by Pontiac Land in 2006 for $201 million and the Habitat 1 site. No details are available at this point.

    In addition, Raffles Girls School could potentially be relocated to Bishan and this would release a prime plot of land in this area. The prized site, which has a land area of 4.5 hectares or 10 times the size of The Ardmore and five times that of Anderson 18, could sell for anywhere from $1.5 billion to over $2 billion, according to estimates, should it be zoned for residential development.

    [B]The future[/B]

    In order to meet the demands of high net worth individuals (HNWI) for residential properties, developments must continue to evolve and offer more differentiators to stand out from the competition.

    While new and upcoming developments offer a wide range of services for the high-end occupier, there are still some areas where improvements can be made. As more people buy cars, greater provision of parking lots will be required at condominiums, with tenants needing more than one parking space per unit as is currently the norm in many condominiums.

    In addition, the provision of a drivers' lounge to provide somewhere for them to wait and relax when they are not needed will also add value to the development. The provision of a concierge service is still lacking in many developments and is becoming increasingly popular among high-end tenants.

    Services such as indoor, air-conditioned tennis courts and full spa facilities similar to those found in hotels are also services that could be provided in future developments to add to the differentiating factors that will appeal to tenants and also enable owners to achieve a rental premium.

    [B]'Bungalows in the sky'[/B]

    The concept of 'Bungalows in the Sky' is becoming increasingly popular in the luxury market, especially as the supply of GCBs becomes more limited, with such properties offering high-end bungalow living in a condominium development.

    SC Global's The Marq on Paterson Hill is an example of such a property, offering large units with double-volume ceiling space in the living areas and private swimming pools in many of the units, along with the necessary ancillary services to provide a sense of grandiosity to attract high-end occupiers to lease units. Ardmore Park and Draycott 8 also offer such units and the large internal spaces and additional services on offer provide the differentiating elements to attract tenants to these properties and the subsequent high rentals that landlords can achieve.

    The concept of branded residences is also a growing trend in Singapore as high-end residential occupiers look for properties offering not just luxurious living spaces but access to services not usually on offer in condominium developments. Branded residences are increasingly being sought by HNWI and provide an assurance of quality and service level that is rarely found in traditional condominiums. Pioneered in Singapore by the Four Seasons Park development, which was completed in 1994, the association with an internationally recognised brand adds an additional appeal to prospective tenants.

    This trend is not limited to Singapore, with The Bulgari Residences, Bali, being a prime example of an integrated residential and hotel branded development offering luxurious homes which benefit from the services on offer in the neighbouring Bulgari Hotel and Resort.

    More branded residences are entering the Singapore market with developments including Ritz-Carlton Residences, St Regis Residences and W Residences on Sentosa offering residences supported by hotel services. Such branded developments not only provide instant recognition and prestige thanks to the internationally regarded brands attached to them, but the additional round-the- clock services provided by the hotels mean that amenities such as spa facilities, catering services, concierge services, housekeeping and valet parking are readily available to occupiers of the residences.

    Over the next five to 10 years, it is likely that we will see more branded residences entering Singapore to meet demand.

    The luxury prime market needs to evolve with the demands of occupiers, and the introduction of branded residences and more ancillary services at luxury developments in Singapore will serve to heighten the expectations of tenants and what they require from a residence. The recovering economy and the opportunities to grow businesses in the Asian market will continue to make Singapore an attractive location for expatriates and demand for such high-end residential properties will continue to grow.

    [I]Jacqueline Wong is head of residential and Claire Gent is manager of research & consultancy, Jones Lang LaSalle[/I]


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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428562-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Multi-purpose space - the latest interior design trend[/SIZE][/B]

    [B]Eclecticism and resort theme popular among young owners keen to be involved in design process[/B]

    By LINETTE LIM


    WITH property prices still bouyant, those who are craving the look and feel of a new home without the cost can look at another option - redecorating and renovating.

    BT spoke to interior designers and decorators and found that most designers believe the small apartment sizes here will call for the creation of large multi-purpose rooms, rather than divided ones.

    'All the apartments are trending to be smaller and smaller,' says Cameron Woo, principal designer of Cameron Woo Design.

    'As a result, home spaces are required to be more multi-functional, with more people living under one roof because of affordability issues.'

    Mr Woo says the use of moveable walls will allow for flexible floorplans. He also speaks of his 'great room' concept, in which the living room space will be combined with the kitchen or the balcony to create a larger living room.

    This is akin to a large entertainment space where dining, cooking, meeting, and recreation come together.

    Similarly, Kelvin Gan, design manager at Elements ID, says he designs spaces that overlap with each other, in order to overcome space constraints.

    'Bathrooms that can open into bedrooms through the use of glass walls, as well as combined living, dining and kitchen areas, will give the illusion of space,' he adds.

    Designers also speak of reinventing old furniture pieces with new uses, and merging new materials like high-tech fabric with traditional ones like wood.

    'This year's trend is about surprises and mixing everything up,' says Joann Ang, design director at Designed Design Associates. 'It's 'eclecticism with discipline' - mixing anything in an unexpected manner and creating a tasteful blend that is elegant and sophisticated.'

    In particular, it seems it is the fusion of modern and natural elements that will take off in a big way.

    Jamie Gorman, interior designer at The Shophouse, suggests 'glass or steel occasional tables to balance out the warmth of a beautiful natural timber dining table and chairs', as well as natural tones and neutral colours.

    [B]Water features[/B]

    He also recommends the use of water features to provide a sense of tranquillity and respite from the day-to-day noise of inner city living, as well as 'natural looking timber veneer cabinets and wall panels to mimic a serene day spa experience'.

    Mr Gan also agrees that another trend this year is resort or spa design themes.

    According to him, more home owners are increasingly well travelled, and have been to many nice resort hotels. As such, many are inspired to incorporate resort elements into their homes.

    The feel and texture of a modern resort, says Mr Gan, can be achieved through the use of 'the soothing sound of moving water, soft warm lighting and materials such as stones'.

    Besides travel-inspired design, there is a trend towards increased customisation. People are more keen to consult with their designers and play a greater role in the design of their homes.

    IMM Cologne - one of the largest trade fairs for the furniture and interior design sector - published an Interior Trends 2011 book in which one of the trends profiled is the movement towards a more thought-driven design process.

    More homeowners are questioning what they need to do to live well and are seeking products with personality, says IMM Cologne.

    Designers here concur that the home is no longer simply four square walls with ready-made interiors.

    They tell BT that homeowners are increasingly treating their home spaces as a blank canvas on which to express themselves.

    'What I can see from my work is that people want to live their dreams now,' says Mr Woo. 'Their interiors are a reflection of who they are.'

    He adds that due to increased exposure to a variety of lifestyles, either through the mass media or through travelling, people have higher expectations of what they want in their homes and their lives.

    'As a result, people want to cook and entertain like a celebrity chef, or want amenities in their home that are usually found outside - like a spa room or a massage room,' he says.

    Thierryson Chua, business development director at Altered Interior also feels that more people are viewing their homes as an extension of themselves.

    'Young owners especially will prefer to participate in the (design) process, with a particular focus on eclectic themes,' he says.

    In closing, while some of the trends this year will be multi-functional living spaces, eclecticism and the resort theme, the biggest trend of all appears to be the movement towards an increasingly self-directed design process.

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    [url]http://www.businesstimes.com.sg/sub/supplement/story/0,4574,428561-1299182340,00.html?[/url]

    Published March 3, 2011

    [B][SIZE="5"]Reaping bigger gains as contractor-developers[/SIZE][/B]

    [B]Major contractors can stay competitive by venturing into property development. By NICHOLAS MAK[/B]


    YEAR 2010 was a stellar year for the construction industry, with the total value of building contracts awarded amounting to $25.7 billion, a 14 per cent increase from 2009. Short-term prospects look rosy for the building sector too, with the Building and Construction Authority (BCA) estimating between $22 billion and $28 billion of construction demand for 2011.

    Amid the very optimistic sentiments, the industry is bracing itself for some challenges. Over the past year, there had been strong government efforts to raise local construction productivity and capability. To achieve this vision, some of the measures implemented by the Ministry of Manpower (MOM) were to increase the foreign worker levy and to lower the foreign worker quota.

    Other than these manpower pressures exerting on the construction industry, which is rather labour-intensive, the situation is further aggravated by competition from foreign contractors. This has led to mounting competition and a subsequent squeeze in profit margins for many construction firms here.

    For major contractors, one of the solutions to stay competitive and shore up earnings is to venture into property development. The contractor could then potentially benefit from the dual revenue stream of real estate development and construction.

    The construction contracts from the contractor-developer's real estate development endeavour would almost always be given to its own construction division. If the contractor-developer could lower the overall development cost of its project by compressing the profit from the project construction and development components, it would be able to bid more aggressively in its land acquisition activities.

    In addition, compared to a typical developer which has to outsource the construction work to a profit-maximising building firm, a contractor-developer could also lower its construction cost further if it has an established construction supply chain that is accumulated over the years of building works. Furthermore, to secure a steady stream of construction projects, some contractor-developers would also bid more aggressively for development land when some of their current construction projects are nearing completion. This is to ensure that their construction resources would not remain idle.

    As contract-based construction and property development pose different sets of risks, venturing into the latter could therefore serve to hedge certain risks for effective portfolio management of a building firm. This strategy of diversification into property development is an alluring window of opportunity for some construction firms, which after decades of building experience amass certain skills which could give them an edge in their property development activities. Apart from a relatively mild learning curve, development activities can also be seen to be synergistic with a building firm's core business operation of construction, allowing it to diversify business operations without appearing to have lost business focus and direction.

    [B]Prominent contractor-developers[/B]

    Riding on a booming property industry throughout 2010, many real estate firms reported exceptional revenue records in the past financial year. Among them was Chinese real estate firm Qingjian Group, which saw its cumulative investment in Singapore exceed $900 million to date.

    The Qingjian Group started in China as a project contracting firm in 1952, and entered the Singapore construction market only in 1999. Initially concentrating on construction of public flats for HDB, Qingjian became the first Chinese contractor in Singapore to venture into real estate development when it acquired the DBSS site at Bishan in February 2008. Its first development in Singapore, Natura Loft, was a 480-unit residential project. Within a span of 21/2 years, the company has added another two projects to its property development portfolio, Nin Residence (a private condominium near Potong Pasir) and an executive condominium project in Punggol. For Qingjian Group, its development activities in Singapore have raised its industry profile. This could potentially result in a positive spillover effect for its construction division, as private developers are now aware of Qingjian Group's quality building works.

    This tendency for construction firms to eventually take on development projects is not confined to Qingjian Group. Other notable examples include Sim Lian Group, Low Keng Huat (Singapore) Limited, Koh Brothers Group, Straits Construction (Hoi Hup Realty) and Chip Eng Seng (CEL Development). Alongside these relatively big players, the pool of contractor-developers also includes 'boutique developers' such as EL Development and BBR Holdings.

    [B]Market segment[/B]

    As with many developers, contractor-developers also seek to specialise in certain market segments to maximise their specific strength. Firms such as Qingjian Group, Sim Lian Group and Straits Construction (Hoi Hup Realty), which have over the years established a track record in the construction of HDB projects, can be observed to participate more regularly in Government Land Sales (GLS) tenders.

    Other than relevant experience, the size of the development project is also an important consideration for contractor-developer firms. Some of the bigger contractor-developers with sizeable headcounts and overheads would prefer large development projects because they require the project to be of a certain minimum size to enjoy economies of scale.

    On the other end of the spectrum, some contractor-developers that prefer quick turnover may specialise in smaller boutique projects which generally could be completed in a relatively short period of time.

    This is the focus for several contractor-developers, including EL Development and BBR Holdings. For the former, the property development arm was set up only in 2006. Since then, EL Development has chosen to concentrate on boutique developments in the prime District 9, 10, and 11. For example, its first residential project, Rhapsody on Mount Elizabeth, a 32-unit prime development in District 9, was launched in 2006. Other similar developments from EL Development include Parc Centennial, a 51-unit condominium again nestled in District 9.

    In addition to the advantage of more manageable cost and logistics, smaller high-end developments usually feature quality finishes that can help in the branding of the contractor-developer's construction arm. Similar to EL Development, BBR Holdings also focuses on the high-end market sector with developments such as 8 Nassim Hill that consists of 16 super luxury triplex units, and Lush on Holland Hill consisting of 56 condominium units.

    [B]Evolution[/B]

    The trend of contractors turning to property development is not a new phenomenon. As the competition in the construction industry intensifies, more construction firms could be pushed to venture into real estate development. Over time, some of these contractor-developers could even evolve into pure developers as they wind down or hive off their construction arm to concentrate on the more lucrative real estate development business.

    [I]The writer is executive director, research and consultancy, SLP International[/I]






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