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Government Successful application to launch Jellicoe reserve site The URA has accepted an application for the Jellicoe Road site and will launch it in early September. The minimum bid is $133 million. The residential site, near the Lavender MRT station, is 1.46 ha (157,154 sq ft) in size and has a plot ratio of 4.2. It also includes 16 units of conservation buildings. About 480 new units may be built. - 22 Aug 2003 PM Goh announces CPF changes In his National Day Rally Speech, Prime Minister Goh Chok Tong said that the CPF rate would have to be lowered to as low as 30% in order to reduce cost and stay competitive. In addition, instead of using a fixed rate, a variable rate that will rise and fall with economic conditions will be used, with lower rates for older workers. Other changes include: · The minimum sum will be raised from the current $80,000. · CPF members who are 55 years old or more can only make withdrawals if they have more than the minimum sum and the Medisave minimum sum. · The salary ceiling for CPF contributions will be lowered to below the $5,000 ceiling recommended earlier by the Economic Review Committee. Details will be announced later. - 18 Aug 2003 Economy/Finance MAS extends deadline for local banks to sell non-core assets MAS announced that it would extend the grace period for the local banks to sell their non-core assets to 17 July 2006 instead of mid-2004. This is because economic and market conditions over the past two years have been more difficult than anticipated. Originally, local banks are required to separate their financial and non-financial businesses by mid-2004. They had to cut their stakes in businesses which included property, beverages and health-care interests to 10% or less. The move is intended to make banks concentrate on their core business and reduce the risk posed to the banking sector by unrelated activities such as property development. - 23 Aug 2003 Investment Sophia Flats up for sale Twelve strata units in Sophia Flats have been put up for sale. Asking price of the freehold property is $7.5 million or $498 psf of its existing strata area of 15,059 sq ft. There are altogether eight apartments and four office units. The land area is 9,181 sq ft and the plot ratio is 2.1, which translates to a maximum gross floor area of 19,279 sq ft. A total of 19 apartments averaging 900 sq ft each can be constructed, assuming the authorities allow the property to be rezoned from the existing "residential with commercial at first storey" to pure residential. - 18 Aug 2003 Four freehold plots at Amber Road up for sale Four adjoining development sites at Amber Road have been offered for sale with a "guide price" of $33 million or $400 psf of potential gross floor area inclusive of estimated development charges of $8.1 million. The four freehold properties comprise 12A/B/C/D Amber Road with land area of 22,791 sq ft, 10 and 10A Amber Road (2,895 sq ft and 2,722 sq ft respectively) and 16 Amber Road, a block of eight individually-owned apartments. The site at 12A/B/C/D is being sold by public tender while the other three sites are for sale by private treaty negotiations. - 19 Aug 2003 For more information on this sale handled by CB Richard Ellis, please click here. Office Suntec City Development looks for office tenants in China ST reported that Suntec City Development was seeking tenants for its Suntec City office space from as far as China and it appeared that the governments of Beijing and Zhejiang are looking into setting up offices at Suntec City this year. The development's office space has an occupancy rate of 90% and the landlord hopes to bring it up to 95% this year. Based on the URA's data, the islandwide office space occupancy rate is 83%. - 23 Aug 2003 Singapore's office occupancy costs rank 5th in Asia: CBRE A CB Richard Ellis survey shows that Singapore's office occupancy costs ranked 5th among 14 Asian cities. At end-June, total occupancy costs for Grade A office space here were US$2.56 psf, 10% lower from the previous quarter. The republic was the only city to have registered a double-digit decline. At US$2.56 psf, Singapore is still more expensive than Bangkok (US$1.02 psf), New Delhi and Shanghai, but cheaper than Tokyo (US$9.51 psf) and Hong Kong (US$2.99 psf). Globally, Singapore's ranking has dropped from 25th in 2000 and 2001 to 52nd this year. - 21 Aug 2003 For full report on the CB Richard Ellis survey, please click here. Residential Implications of impending CPF cuts on housing market In response to the news the CPF contribution rate will be cut, industry players were of the opinion that there is limited impact on the housing market. The reasons attributed are firstly, the cuts are likely to be implemented in phases, secondly, affordability has increased in the last two years with falling homes prices and thirdly, the government is likely to lend a hand to minimise the impact on borrowers. Nevertheless, prospective homebuyers are likely to postpone their home-purchase decision until the end of the month when the government confirm the cuts in the CPF contribution rates. Industry players concurred that first-time homebuyers and upgraders who are about to enter the private home market will be most affected if the employer-worker contribution is reduced to 30% and the salary ceiling to $3,700, particularly those with monthly household income of $4,000-6,000. However, developers of more upmarket projects were confident that their target market of rich Singaporeans and foreigners are immune to these changes. Property developers expressed that the average size of a future three-bedroom private home in the suburban area could be reduced to about 1,000-1,100 sq ft from the current 1,200 sq ft. The adjustment is likely to be permanent as such homes can be $45,000-90,000 cheaper, assuming an average price of $450 psf. The amount is significant as the CPF cuts mean buyers will have to fork out more cash in monthly payments. In addition, developers can offer deferred payment schemes and tie up with banks to offer special loan packages or stretch the tenure of the loan to boost sales. More than 10 new launches are expected after the Lunar Seventh Month ends on 27 August, including 850-unit Lakeshore in Jurong, 459-unit executive condominium Quintet in Choa Chu Kang, 187-unit Imperial and 272-unit Visioncrest. - 18, 20 & 21 Aug 2003 Surge of CPF withdrawals for home purchases in 2Q03 Statistics from CPF show that there was an increase of 29% in the number of CPF members who withdrew their savings to buy private homes and executive condominiums compared to the previous quarter. However, in value terms, gross withdrawal was only $765.2 million compared to the first quarter's $810.3 million. - 20 Aug 2003 HDB HDB not selling market rate loans Between January and June this year, only about 10,000 or 2% of the 540,000 HDB flat owners have turned to private banks for financing and refinancing. Despite the slow rate at which flat owners are switching to bank loans, HDB assured that it has no plans to sell its $12.8 billion market-rate loan portfolio to banks. With effect from 1 January 2003, HDB allowed buyers of HDB flats who do not qualify for its concession-rate loans to obtain their loans from private banks. Existing flat owners with both concession-rate and market-rate loans are free to refinance their loans with private banks to take advantage of the low interest rates offered in the first few years. - 19 Aug 2003 Industrial New 80-hectare logistics park on Jurong Island The Ministry of Trade and Industry has announced the launch of the first designated integrated chemical logistics park on Jurong Island. The $45 million 80-hectare chemical hub, which is known as the Banyan LogisPark will provide logistics support to the 72 companies on Jurong Island. The park is expected to attract six to eight third-party logistics providers. The EDB said it is planning for the park to have "berths, jetties and other marine facilities … linked to chemical plants on the island through the common pipeline corridor". - 23 Aug 2003 Rise in orders for semiconductor products The slow semiconductor sales market appears to have ended and orders for new semiconductor equipment and memory chips have shown an improvement since March. Semiconductor Equipment and Materials International (Semi) said manufacturers of semiconductor equipment registered US$763 million in July and a book-to-bill ratio of 0.97, the highest since March. It said the three-month average of worldwide bookings in July is 6% above the revised June 2003 level of US$722 million. The semiconductor market in Singapore reached US$9.7 billion in 2002, which reflected an 11.2% increase from 2001. Market sources said the semiconductor market is expected to achieve double-digit growth rate in 2003. - 21 Aug 2003 Singapore's NODX grows by a robust 10.8% in July Singapore's non-oil domestic exports (NODX) expanded by 10.8% in July compared to the same month a year ago. The increase is due to the continued expansion of pharmaceuticals and petrochemicals exports. The electronics sector also continued to expand in July, albeit at a marginal 2.4%. The continued expansion in the sector was sustained by larger shipments of disk drives and integrated circuits and parts in the month. However, the expansion for these products was weighed down by the weak demand for personal computers and parts, printers and telecommunications equipment. International Enterprise (IE) Singapore said that on a month-on-month seasonally adjusted basis, NODX fell by 3% in July after an 11% growth in June over May and a 6.8% contraction in May against April. - 19 Aug 2003 Retail In Brief
Corporate results
Hotel/Tourism Hotel Properties sees net loss of $8.8 million Hotel Properties announced a net loss of $8.8 million for the second quarter ended June 30 compared to a net profit of $5.2 million in the corresponding period in 2002. The group said turnover declined to $52.6 million against the $81.1 million achieved previously. - 22 Aug 2003 Corporate/Industry News 2Q profit improves for SingLand Singapore Land's second quarter net profit rose 1% to $20.3 million for the period ended 30 June 2003. The improvement in the group's performance is mainly due to the revenue recognition on the sale of 25 units at The Paterson Condominium. Looking forward, SingLand warned that the office market will remain weak but hotel operations are expected to improve follow the containment of the Sars outbreak. - 23 Aug 2003 Centrepoint issues asset-backed securities Fraser & Neave's Centrepoint Properties intends to raise $285 million worth of securities backed by sale proceeds of its Cote d'Azur condominium project. The funds will be used to refinance the acquisition of the site and construction costs at lower interest rates. About 97% of the 99-year leasehold project in East Coast, which has 612 units, has been sold. Buyers have paid only 20% of the purchase price and the remaining portion will be paid when the project is completed in early 2005. Riviera Investment, a special purpose vehicle (SPV) has been set up for the securitisation and will issue 3-year bonds that will mature in 2006. The coupon rate will be set at 30 to 35 basis points above the three-month London Inter Bank Offered Rate. - 22 Aug 2003 Sources: The Business Times (BT), The Straits Times (ST) Note: All currencies are expressed in Singapore dollars unless otherwise stated. Abbreviations:
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