Singapore cooling measures begin to bite, according to NUS statistics

The National University of Singapore found that residential prices fell in the country from January to February.

Statistics released yesterday appear to show that the latest round of cooling measures in Singapore have begun to affect the property market, according to Today newspaper.

The NUS Private Residential Price Index, which tracks month-on-month price movements of private, non-landed residential properties, fell 0.4 per cent from January to February. Prices of central area properties continued to gain though, rising by 1 per cent, while prices in non-central areas dropped 1.5 per cent.

Analysts attributed the drop to the cooling measures passed in January, which included higher stamp duties and and a reduction in the amount of credit available to those who already have mortgages.

Mr Liang Thow Ming, head of residential services at Credo Real Estate, said that the overall decline was too marginal to confirm a trend. “But in a way, it does suggest that the market has taken a breather, as compared to how it was behaving last year and in January this year,” he said.

Meanwhile, real estate services firm DTZ pointed out that prices of prime and suburban resale homes continued to rise in the first quarter, but at a more moderate pace, while luxury resale home prices remained unchanged. According to DTZ, the average resale price of leasehold condominiums in suburban areas inched upwards by 0.8 per cent to S$665 (US$527) per sq ft, while average resale prices of freehold non-landed condominiums in price districts grew 0.4 per cent on quarter to S$1,525 (US$1,208) per sq ft. Luxury condominiums in prime areas remained unchanged at an average of S$2,630 (US$2,084) per square foot for the second consecutive quarter, DTZ said.

“We expect the pace of increase in prices to continue to slow down and plateau. There is more uncertainty this year, not just from the possibility of more cooling measures, but also from the recent regional events in the Middle East and Japan, the full impact of which are still not known,” said Ms Chua Chor Hoon, head of DTZ South East Asia Research.

Atlan expects net gain of RM16m from Penang land sale

KUALA LUMPUR: ATLAN HOLDINGS BHD expects to gain RM16 million after the sale of two pieces of land along Jalan Batu Ferringhi, Penang for RM33 million cash to Glass Bay Sdn Bhd.

It said on Monday, March 21 that the RM16.47 million was arrived at after deducting estimated income tax of RM5.49 million, land cost of RM9.19 million, development cost of RM1.84 million.

On March 17, Atlan had signed a conditional sale and purchase agreement to dispose of two pieces of freehold land with a single storey sales office for RM33 million.

In a reply to a query from Bursa Malaysia Securities, it said that it had decided to put off its original plan to build 40 units of ine-storey storey apartments with one-storey basement carpark.

The decision to dispose of the land was after taking into consideration the estimated time frame and resources required to develop the land over the next three years given the competition of other developments within the vicinity and long gestation period to reap the full potential and benefits of the land.

“The proposed disposal will enable the group to realise disposal proceeds of RM33 million and an estimated after-tax gain of disposal of approximately RM16 million thus unlocking the value of the land immediately upon the completion of the proposed disposal,” it said.

Atlan said the proceeds from the proposed disposal would be used to repay bank borrowings, interest payments and to finance the group’s funding needs.

Singapore’s Capital Square sold in Lion City’s largest commercial property deal this year

Singapore-based real estate investment house Pacific Star Group has recorded the biggest office transaction in the Lion State this year, selling the Capital Square building to Alpha Investment Partners’ Macro Trends Fund and NTUC Income for S$889 million (US$702.1 million).

The property was acquired by Germany’s ERGO Insurance Group in 2002 and had been managed by MEAG Pacific Star Asset Management (MPSAM), a joint venture between Pacific Star and MEAG (asset manager of Munich Re and ERGO), since the acquisition.

The property is comprised of a 16-storey office tower and two rows of conservation buildings housing offices and F&B outlets. The deal works out the price of this Grade A development at Church Street to about S$2,300 (US$1,816) psf.

“We are pleased with the returns achieved and delivered to our investor, ERGO Insurance Group. We did considerable asset enhancement work since we were on board as asset manager in 2002,” said Andy Tan, executive vice president of Asset Management, Pacific Star Group. “The most recent achievement of our role as asset manager was the successful refinancing of Capital Square through the issuance of the largest Singapore-dollar denominated corporate bond in 2009, a watershed deal against the then backdrop of tight liquidity due to the global financial crisis.”

Pacific Star currently manages prime office, residential and retail space across Asia. The properties managed by the group include TripleOne Somerset in Singapore, Pavilion Residences in Kuala Lumpur, and Noon Square in Seoul. Since its inception in 2001, the group has advised and managed real estate deals worth more than US$5 billion

Dubai property market sees $33.5bn worth of transactions

Despite the recent economic crisis, the level of transactions in the Dubai property market reached $33.5 billion during 2010, new figures have shown. The news may encourage more people to invest in property in the UAE, with it suggesting that confidence in the region is increasing. Indeed, according to head of the emirate's Land Department, Sultan Butti Bin Mejrin, the numbers were "promising, considering the crisis". Since their peak which occurred in mid-2008, real estate values in Dubai have slumped by 62 per cent after the global credit crisis saw speculative demand fall. However, the latest figures from Deutsche Bank show that real estate prices in Dubai fell 1.7 per cent in February. The organisation claimed that the emirate's property market is still not back on track and could see declines of up to 30 per cent in next two years. "We do not see any improvement in fundamentals that could trigger a recovery," the bank said in its report.

First phase of residential homes at King’s Cross comes to the market

King’s Cross has announced the launch of ArtHouse, the first phase of private residential homes for sale at the 67 acre site. King’s Cross, the largest development project in central London, will provide over 8 million sq ft (743,200 sqm) of mixed use space, including some 2,000 homes and serviced apartments. The mix of uses, heritage buildings and canal-side setting all add to the extraordinary character of the area.

Prices for the new homes at ArtHouse, designed by award winning architects dRMM, will be announced on Friday, April 15th at an exhibition to be held at the JW Marriot, Kuala Lumpur.

Located between the new Central Saint Martins College of Art and Design – probably the best known art college in the world and part of the University of the Arts London - and Kings Place - home to two concert halls, two galleries and a restaurant, as well as major companies such as Guardian Media Group – ArtHouse offers 114 one, two and three-bedroom private apartments, duplexes and penthouses. ArtHouse is scheduled for completion in 2013.

ArtHouse residents will enjoy panoramic views over London and a prime location, close to the capital’s best transport interchange with the Eurostar at St Pancras International, mainline connections at King’s Cross Station and six tube lines, all within a few minutes walk. King’s Cross, in Zone 1, is also close to numerous leading universities and a variety of the major museums and cultural institutions that make up this world city. ArtHouse is immediately next to the Regent’s Canal, the new Handyside Park and the new fountains of Granary Square.

The building’s sophisticated and striking façade is dressed in terracotta and polished stainless steel, complementing the significant architectural and industrial heritage of its neighbours. Exterior sliding aluminium louvres animate the façade, shading and cooling the interior and enhancing privacy.

Handyside Park runs the full length of the building, extending visually into the lobby through the landscaped courtyards and the glazed ground floor cloisters.

Many apartments at ArtHouse have park, canal or city views from generous balconies and some are dual aspect. The properties are well-insulated, light-filled and intelligently designed with contemporary interiors and bespoke kitchen and bathroom suites by specialist Johnson Naylor. A 24-hour concierge and security service will be onsite and underground parking will be available for purchase. All new homes will be managed by the King’s Cross Estate and Building Management teams.

‘Green’ features have been integrated into the design of ArtHouse from the beginning in order to achieve a target of Code for Sustainable Homes Level 4. All of the building’s hot water comes from the super-efficient King’s Cross Energy Centre which offsets around 75% of the whole development’s electricity needs.

King’s Cross, already Europe’s most connected location, is on its way to becoming the new cultural centre of London. New restaurants, shops, markets, health and fitness facilities, music venues, cinemas, hotels, a school and the new home of Central Saint Martins, will make King’s Cross the most exciting centre of any western capital city. N1C is the new post code covering the 67 acre King’s Cross development and St Pancras International - the “C” representing its Central London location.

The opportunity for both investors and home buyers is unique – stunning brand new one, twoand three bedroom homes with a host of cultural, commercial and leisure facilities on the doorstep, will be available from April 2011 onwards.

Retail Lot At SS26/4 Mayang Plaza PJ Selangor For Sale

SS26 Mayang Plaza Retail Lot

SS26 Mayang Plaza PJ Selangor

Subject Property:-

ID NUMBER : MYS - CS(S) 1


SALE PRICE

• Ringgit Malaysian Seven Hundred Thousands ( RM700,000. ) only.

LOCATION

• Located strategically off Jalan SS24/1 en route to SS25/2 and SS26/5;
• Immediate neighbor is SS24 Taman Megah, SS25 Taman Mayang and share the same complex with Lincoln's College formerly tenanted by Lim Kok Weng's Institute and near to Kelana Jaya Light Railway Transit (LRT) Station;( Google Site Map link http://goo.gl/maps/pAK5 )

PROPERTY DESCRIPTIONS

• Property Type : First Floor Retail Shop of the Four Storey Complex;
• Occupancy : Tenanted;
• Land Area : 22' X 75' ( 1,650 sf );
• Built Up : N/A

• Tenure :  Freehold;
• Entrance Direction : N/A;
• Position : Intermediate;
• Number of Storey : 1
• Condition : Fair;
• Maintenance Fee : RM143/ per month

Please quote ID number above when contacting us
Contact : Alvyn Goh at 6 016 3111313  

                 Senior Real Estate Agent

Email: inter.realestate.network@gmail.com

Disclaimer of Liability

Note that any properties listed as available at this material time for sale or rent herein may at any time be withdrawn, sold or rented out without any prior notice for any reason(s) whatsoever and our real estate agency or our agents shall not be held any liability whatsoever to prospective Purchaser or Tenant for the reasons specified above of such withdrawal.

The photographs shown and informations provided herein are solely for general identification and genuinely in good faith provided to be true at this material time. However, our real estate agency and agents make no representation or warranty as to their absolute accuracy or the actual condition of the property(ies).

Asian REITs strengthen in 2H 2010, led by Singapore

Asian REIT markets strengthened in the second half of 2010 as acquisition activity rose and interest in IPO activity intensified, according to CB Richard Ellis’ REITs Around Asia report on 2H 2010.

Acquisitions by REITs in the second half totaled US$5.6 billion, bringing total acquisitions for the full year 2010 to around US$11 billion. The total market capitalisation of Asian REITs rose by 46.8 per cent year- on- year to US$95 billion for the whole year, with the second half witnessing the addition of eight new REITs and some stellar price growth.

During the second half, REITs become an important real estate capital raising channel as investment confidence returned after most REITs completed the necessary refinancing or recapitalisation exercises to meet their loan obligations. Improvements in the underlying commercial real estate market also helped attract capital into the REIT market. 14 REITs were newly listed on Asian stock markets in 2010, bringing the total number of REITs in Asia to 123 at year end.

Southeast Asia witnessed a series of large REIT IPOs. The Sunway REIT and CapitaMalls Malaysia Trust, which both listed in the second half, were the largest REITs in Malaysia by market capitalisation as of the end of 2010, while Mapletree Industrial Trust and Sabana Shari’ah Compliant Industrial REIT were two of the largest IPOs to take place on the Singapore stock market during the period. These four REITs collectively raised US$2.2 billion of fresh capital from the equity market following their listing. Thailand was another active market during the second half, witnessing the listing of three new small property funds. Japan saw no new listings in the second half as the market focused on the launch of the Bank of Japan’s (BOJ) JPY 50 billion (US$616 million) REIT purchase programme.

Acquisitions for the full year 2010 totaled US$11 billion, marking a new annual record and a figure three times higher than that which was recorded in 2009. Activity in Singapore and Japan accounted for 57 per cent and 33 per cent of the total acquisition volume respectively. The period was also noteworthy for a number of Asian REITs beginning to invest in assets across Asia. Singapore-listed Ascott REIT and Malaysia-listed Al-Aqar KPJ REIT expanded to the Pacific and Europe respectively as they looked to diversify their portfolios and income sources. J-REIT acquisition activity was largely confined to Tokyo although several large J-REITs began to show an interest in other Asian markets. After a quiet few years the Hong Kong REIT market showed signs of activity as discussions began over the launch of the first RMB-denominated REIT containing prime commercial real estate assets in Beijing owned by Cheung Kong. Should its listing go ahead in 2011, the proposed REIT would mark the first listing of RMB-denominated equity outside mainland China.

Weighted dividend yields continued to compress in the second half of 2010, thanks to the strong stock price rally. The weighted dividend yield for Asian REITs contracted further to 5.36 per cent as of the end of 2010, from 6.86 per cent recorded in mid-2010 and 9.62 per cent as of the end of 2008. As investors required a much higher dividend yield during the downturn, REITs were reluctant to add new assets to their portfolio as any new acquisitions would have had a diluting effect on dividend yield. “As dividend yield has been compressed to the level close to yields for physical assets, REITs are expected to turn more active in sourcing new investment objects,” said Danny Mohr, Executive Director, International Valuation, Asia for CB Richard Ellis.

Foreign investors are in the midst of rallying capital for investment in Asia, which is seeing stronger growth compared to the rest of the world. REITs will be viable investment objects for those wishing to gain exposure in Asian real estate without the need to hold the physical assets. This is expected to attract capital inflow into the REIT sector and consequently REITs are likely to be in a stronger position to acquire new assets for portfolio enhancement in 2011.

Fall in UK mortgage lending in January 2011

Government spending cuts, rising inflation and cuts and extreme winter weather conditions led to a fall of 26 per cent in house purchase lending in the UK during January. According to new data from the Council of Mortgage Lenders (CML), there were 28,500 loans for residential property purchases over the course of the month. The organisation said that the fall will ensure that the UK real estate market remains flat, although it added that one month's data is not conclusive of the overall trend. CML director general Michael Coogan, said that monetary pressures faced by homeowners in the country meant that the fall in lending was to be expected early in the year. "The bad winter weather and uncertainty over interest rate rises will have exacerbated the fall in lending in January, so it would be premature to draw any firm conclusions about activity levels over the next few months," he noted. A recent report by the Royal Institution of Chartered Surveyors revealed that a total of 40 per cent of industry professionals claim that rents have increased in the three months to January.

EPF appoints chief executive for Kwasa Land

PETALING JAYA: The Employees Provident Fund (EPF) has appointed Mohamad Lotfy Mohamad Noh the chief executive officer of Kwasa Land Sdn Bhd, a 100% subsidiary of EPF and the master developer of the Rubber Research Institute Malaysia (RRIM) land in Sungai Buloh, sources said.

They also said that according to initial plans by Kwasa, the RRIM project would consist of an integrated township development with a good mix of residential, commercial and industrial properties with facilities and amenities.

“The development is expected to feature breathtaking landscape parks, green lungs, open spaces, walkways and water bodies,” one party familiar with the plans said. “The township will also incorporate full information technology and data infrastructure (MSC City Status) and complete urban transportation integration.”

The RRIM land will also house the depot of the planned mass rapid transit (MRT) project.

StarBiz reported recently that Syarikat Prasarana Negara Bhd, the project owner of the MRT, will be allocated a parcel of land in the RRIM development project for commercial development as part of the “rail-plus-property” model being used to offset the cost of building the MRT.

Negotiations are believed to be ongoing between Prasarana and EPF for this purpose.

The RRIM land, measuring more than 3,000 acres, has been dubbed the “new hub” of the Klang Valley and will be developed over the next 15 years.

Mohamad Lotfy currently heads the property investment department at the EPF, a position he has held since 2005. He was formerly a director of Malaysian Resources Corp Bhd (MRCB). Mohamad Lotfy resigned from the board of MRCB in October last year, likely due to his impending role in Kwasa Land.

Mohamad Lotfy, 52, began his career with Public Bank Bhd in 1982 before moving to then Kwong Yik Finance Bhd in 1986. Subsequently, he joined MK Associates Sdn Bhd (part of the MK Land Holdings group) in 1989 as a sales manager and was promoted to deputy general manager in 1991.

In 1993, he joined Land & General Bhd as a general manager, moving on to Golden Hope Development in 2003 and later Golden Hope Properties.

It has been reported that Kwasa will appoint or partner with various parties to co-develop the massive project, with parcels of land to be tendered out to different developers using an open and transparent basis.

“Developers are lobbying and pitching development plans to EPF even as we speak,” a source said.

As it stands, there is still little visibility on the selection criteria.

In fact, some industry players are wondering how open and transparent EPF is going to be on this development and whether the terms of the joint ventures are going to be fair or lopsided towards the pension fund.

Last March, the Government announced that EPF would form a joint venture to develop 3,000 acres of land in Sungai Buloh owned by RRIM into a new hub for the Klang Valley. The new hub, which is also part of 10th Malaysia Plan will lead to over RM5bil of new investments, it was then reported.

Earlier, market talk put MRCB as one of the lead developers for the project by virtue of its link to EPF, which controls MRCB.

At press time, EPF had yet to respond to queries from StarBiz.

Asia Pacific Land Bhd sees potential in Niseko

An ever increasing number of tourists and investors, primarily from Asia and Europe are set to continue their dominance of the property market in the ski resort of Niseko in Hokkaido, the northern island of Japan.

A number of small Australian companies began investing in the northern ski resort over ten years ago and have essentially built it up to what it is today, but the area has started to see an influx of investors from other parts of the globe. “The rest of the world are only now beginning to take note of Niseko. As such, properties here are still affordable but it is not so much about the cost of investment but the propensity for the properties to improve in value that is of great interest,” said Low Su Ming, joint managing director of Asia Pacific Land Bhd (AP Land).

AP Land has started its initial development in Niseko, to comprise of 69 units of 1, 2 and 3 bedroom luxury apartments in the centre of the village. Low stated most investors had taken long-term positions and are comfortable to enjoy their asset and ride out any short-term volatility.

The sentiment is echoed by LJ Hooker Niseko Resort branch manager, Derek Kennewell who said that if Niseko’s attractions can be elevated to the level of some of the more mature resorts in Europe and North America, we may see big tourism growth numbers, which will drive property investment.

Hong Kong has world’s most expensive office space

A survey by property consultancy, DTZ showed that last year Hong Kong boasted the world’s most expensive office space, overtaking 2009 leader, London’s West End.

There has been a 31 per cent increase in the annual occupancy cost per workspace from US$17,050 in 2009 to last year’s figure of US$22,330. The survey evaluated office space occupancy prices, based on factors such as rent, maintenance costs and property taxes, in 121 business districts over 47 countries and territories across the globe, considering how prime commercial space is used in each location.

“Hong Kong is traditionally a volatile and cyclical market responding very quickly to highs and lows,” said DTZ’s head of Asia Pacific research, David Green-Morgan. “This is reflected in the fact that prime rent took only one year to recover its ground in the wake of the financial crisis.”

The gap between occupancy costs in Hong Kong is expected to widen, with the figure projected to rise to US$31,250 by 2015.

Singapore property prices may be hurt by supply surge in 2013 and 2014

Local analysts predict house prices in Singapore might fall over the next few years due to a significant increase in supply of completed units.

As reported in the Straits Times newspaper, analysts expect 2013 and 2014 to be the risky years. Statistics from the Urban Redevelopment Authority on homes under construction or already with planning approvals showed that 17,111 new homes will be completed in 2013 and 17,421 in 2014, higher than the record of 14,000 private apartments completed in 1998.

According to Chua Chor Hoon, DTZ’s head of South East Asia research, the numbers could continue to rise when combined with the projects that will get planning permission in the near future.

Together with the supply of new government-built flats, she believed that it could lead to a serious supply spike in a couple of years time.

Sai Min Chow of Nomura Investment Research also noted a possible oversupply next year and the high-end segment in downtown area would suffer from the price falls.

Hong Kong, Singapore home prices top The Economist’s global house-price index

Hong Kong and Singapore have topped The Economist’s latest quarterly global house price index as the countries where home values rose the most.

Prices in Hong Kong rose 20.1 per cent in Hong Kong in Q4 2010 from a year before, while in Singapore they rose 17.6 per cent. According to the survey of 20 economies, home values in China rose 6.4 per cent, Australia rose 5.8 per cent, New Zealand rose 0.9 per cent, and Japan dropped 3.6 per cent.

Hong Kong also ranked as the second most overvalued market according to the survey, with homes overvalued by 53.7 per cent. Australia took top honours in that category with homes overvalued by 56.4 per cent. New Zealand’s homes were overvalued by 20.6 per cent, Singapore’s at 18.1 per cent, China’s at 12.9 per cent, and Japan’s homes were undervalued at 35.2 per cent.

The Economist calculated overvaluation and undervaluation of homes by comparing the ratio of prices to rents. In explanation of this methodology, the newspaper wrote: “In theory, the price of a home should reflect the value of the services it provides. People who choose to rent their homes buy those services on a monthly basis. Home prices should therefore reflect the rents that tenants pay.”

Only in Hong Kong, Singapore, and Switzerland were housing prices more overvalued than before the global financial crisis began in the third quarter of 2007 – price to rent rations in every other economy surveyed dropped in the same time period.

In Japan, owning compared to renting has been getting cheaper every year since 1990, when the country’s property bubble burst. Homes are now undervalued there by over a third, the latest survey revealed.

Prasarana to get part of RRIM land for development

PETALING JAYA: Syarikat Prasarana Negara Bhd will be allocated a parcel of land in the proposed Sungai Buloh Rubber Research Institute Malaysia (RRIM) development project for commercial development as part of the “rail plus property” model being used to offset the cost of building the mass rapid transit (MRT), sources said.

“Negotiations are ongoing between Prasarana and the Employees Provident Fund (EPF),” said one source.

“The parcel of land (to be allocated) will be used to build the MRT's main depot but it will also include commercial development above and possibly around the depot, in the form of retail and office space,” another source explained.

Prasarana has been appointed the MRT project and asset owner.

It has been reported that the Government will fund the MRT, possibly through the raising of bonds, and that Prasarana will adopt Hong Kong's “rail plus property” approach in its urban public transportation system, whereby parcels of land are developed to offset the cost of construction of public transport systems.

Prasarana will be given land to develop in joint ventures with developers and the proceeds from that will be repaid to the Government.

It has also been reported that Prasarana is finalising prospective land parcels that the company would develop.

Last March, the Government announced that EPF would form a joint venture to develop 3,000 acres of land in Sungai Buloh owned by RRIM into a new hub for the Klang Valley. The new hub in Sungai Buloh will lead to over RM5bil of new investments, it was then said.

The RRIM land is also among the sites identified for re-development under Budget 2010.

The location and size of RRIM's land near the fast developing Kota Damansara area holds significant attraction for developers and is expected to command a price premium, analysts have said.

The redevelopment of the RRIM land is also part of the Greater Kuala Lumpur Strategic Development Project initiative under the 10th Malaysia Plan.

In July last year, the EPF said it had engaged several consultants to advise on the development of the land.

Subsequently, Kwasa Land Sdn Bhd was set up by the Federal Government and will act as a development manager on behalf of the EPF and the Government. Kwasa Land will be involved in conducting open tenders or negotiations with developers relating to the land parcels in the RRIM development.

It is left to be seen if Prasarana would have to pay for the parcel of land in RRIM or whether it will be given to it free. “This is something being worked out now but it is important to note that Prasarana is wholly-owned by the Government and the MRT project is also Government led,” a source said.

Singapore increasingly attracting Chinese home buyers

Mainland Chinese bought private homes in Singapore at a record pace in the last quarter of 2010, according to data released recently by Singapore’s Urban Redevelopment Authority.

And with increasingly tough tightening measures being implemented in China, analysts say that more and more mainlanders will continue to invest in Singapore property.

Chinese citizens constituted a record 23 per cent of private home purchases in Singapore by non-Singaporeans, according to a quarterly by consultant DTZ reported on by the Today newspaper. They overtook Indonesians as the second-largest group of foreigner home buyers after Malaysians.

Chinese accounted for only 7 per cent of foreigners buying homes in Singapore in 2007.

“There’s a very large pool of Chinese buyers who need properties in Singapore for school, for coming here to work, for immigration purposes,” said Mr Ku Swee Yong, chief executive officer of International Property Advisor. “All these are a natural consequence of the efforts Singapore has put in to promote ourselves in China.”
Some analysts said that foreign buyers could negatively affect Singapore’s property market if they sell their properties quickly, but many said that the current level of foreign ownership was not worrying.

“Singaporean buyers still make up about 70 per cent of buyers,” said Ms Chua Chor Hoon, head of Southeast Asia research at DTZ. “Even if the foreigners were to pull out, it’s not going to cause a big drop in prices if the Singapore economy is doing well and locals still continue to buy.”

But the proportion of local homebuyers is falling. URA data shows they accounted for 72 per cent of all transactions last year, compared with 76 per cent in 2009.

Meanwhile, those who are upgrading from public housing are buying smaller private apartments. 

In 2009, only 32 per cent of buyers with HDB addresses had bought apartments smaller than 1,000 sq ft; last year, the ratio climbed to 41 per cent. This is due to high prices. “Small units slightly under S$1 million are the only types most HDB upgraders can afford,” said Ms Chua.

Bangkok developers change tactics to boost sales

Stocks of built but unsold residential properties are piling up in Bangkok causing developers to change tactics to speed up sales, The Nation newspaper has reported.

Bangkok developers have been aggressively building new properties but buyers are holding back because of rising interest rates.

Opas Sripayak, Managing Director of LPN Development, said his company was looking to speed up sale by opening with “soft sales” and taking as many bookings as possible before a grand opening. Before, they wouldn’t accept bookings before a grand opening but the change happened after LPN was unable to sell out its Lumpini Park Riverside-Rama III project when it opened in the fourth quarter of 2010.

“We changed our selling process to meet a change in home-buyers’ behaviour,” he said, adding that home-buyers needed time to consider a purchase and convenience in the buying process.

The new techniques were used in selling LPN’s first two projects launched this year, Lumpini Condotown Nida-Serithai and Lumpini Condotown Lasale-Bang Na. The grand openings for the two projects is this weekend, but both have already sold around 80 per cent during their soft sales period. The two projects are valued at THB1.45 billion (US$ 47.3 million).

This soft sales strategy is part of LPN’s efforts to reduce its residential inventory, which reached a value of THB4.4 billion (US$143.5 million) at the end of last year, up 52 per cent from an inventory value of THB2.9 billion (US$94.6 billion) in 2009.

Another developer, Pruksa Real Estate, is launching an aggressive marketing campaign to deal with its large inventory. The company had THB27.8 billion (US$900.7 million) in unsold units at the end of 2010, double the amount they had at the end of 2009.

Pruksa’s Director and Chief Business Officer Prasert Taedullayasatit said that more than a half of the company’s inventory was undeveloped land in existing low-rise residential projects that was waiting for development, and this was not a burden for the company.

“Our inventory stock of residences that are ready to live in is worth only Bt1.2 billion, and that does not affect our business,” he said.

According to the financial results of property firms at the end of 2010, residential inventories, covering both undeveloped land and finished homes that were ready for occupation, had risen by between 20 per cent and 100 per cent.

According to the Agency for Real Estate Affairs (AREA), the inventory of finished but unsold residences in Bangkok and its suburbs totalled 110,666 units in August last year. Of these, about 36,352 units, or 33 per cent, were townhouses. Thirty-two per cent, or 35,187 units, were single detached houses and 25 per cent, or 27,209 units, were in condominiums.

However, the Real Estate Information Centre (REIC) says its research shows that the total inventory in mid-2010 amounted to 189,000 units worth Bt472.5 billion, for an average price of Bt2.5 million per unit.

The research also shows that home-buyers behaviour has changed from buying low-rise residences such as single-detached houses, townhouses and twin houses, to condominiums. This follows planning for new mass-transit routes in Bangkok.

REIC Director General Samma Kitsin said property inventories at that time would take between 24 and 26 months to clear – in the event that no new supply hit the market.

Property buyers and investors head to Singapore

Property buyers and investors will be heading to Singapore this weekend for the return of the iProperty.com International Collection Expo.

Taking place on March 5-6 at the Marina Bay Sands, the expo is expected to offer property investment opportunities in more than 60 exclusive developments from developers in Singapore, Malaysia, Thailand, Australia, the United Kingdom, Brazil and India.

Expo attendees will also be treated to free property seminars and forums where they can look forward to knowledge-sharing from property experts, insights on property investments and analysis of the property market outlooks in Singapore and beyond.

Shaun Di Gregorio, Chief Executive Officer of the iProperty.com Group said: “The iProperty.com Expo is firmly established as the most successful property exhibition in the Asia Pacific region. Attracting more than 100,000 visitors from 65 countries since 2005, we are very determined to serve up the best names in property developments to our consumers and partners, and create opportunities for them to reap benefits from property investments.”

He added: “Riding on the successes of the inaugural iProperty.com Expo in October 2010, we are proud to bring the Expo to Singapore again this year. We are sure that visitors will derive great value from theiProperty.com Expo.”

Property Reports South East Asia is proud to be associated with this event as a media partner, and visitors to our booth can enjoy ‘show special’ deals on magazine subscriptions to the region’s leading luxury residential real estate publication.