Business Times: KepLand in 5th Viet project this year

October 2, 2007
KepLand in 5th Viet project this year
By ARTHUR SIM

KEPPEL Land has announced its fifth residential project in Vietnam this year – a 1,500-unit condominium in Ho Chi Minh City – adding to its portfolio of over 20,000 homes there.

The total investment capital for the latest project is estimated at US$136 million.

Through wholly-owned subsidiary Corredance Pte Ltd, Keppel Land has signed a joint venture agreement with Vietnam-based Hong Quang Co Ltd to develop the 5.1ha waterfront site. Corredance is expected to take up a 60 per cent stake amounting to US$24.6 million of the total registered capital of US$41 million in the JV company while Hong Quang, a property developer, will subscribe for the rest.

Keppel Land director of regional investments Ang Wee Gee is bullish on Vietnam. He said: ‘We will continue to be on the look-out for more prime residential sites in Vietnam to ride on the market upswing and to further capitalise on our strong reputation as a choice developer.’

The latest project is close to the Thu Thiem New Township, which has been earmarked as the new downtown to complement Ho Chi Minh City’s CBD. The sales launch of the first phase is slated for early 2009.

Keppel Land’s next launch is expected to be for The Estella, a residential project comprising 1,600 upmarket apartments in the An Phu Ward, Ho Chi Minh City. The soft launch is targeted for Q4 ‘07.

Other projects being developed in Ho Chi Minh City include Saigon Sports City, a 64-ha integrated township development, and Saigon Centre, a mixed development comprising office buildings, serviced apartments and retail component.

It is also developing two waterfront residential developments fronting the Saigon River, while in Hanoi, two memorandums of understanding have been signed with local joint venture partners to develop residential townships.

Keppel Land is also developing a 509ha waterfront township in Long Hung, Long Thanh, Dong Nai.

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Business Times: Horizon Towers owners, buyers argue against STB’s decision

October 2, 2007
Horizon Towers owners, buyers argue against STB’s decision
Court allows buyers, 13 owners to intervene in appeal
By MICHELLE QUAH

(SINGAPORE) The majority owners and the buyers of Horizon Towers joined forces for the first time in months yesterday, to argue against the dismissal by the Strata Titles Board (STB) of the development’s collective sale application.

This was after Supreme Court Judge Choo Han Teck allowed the buyers -HPL and its partners – and a group of 13 majority owners to intervene in yesterday’s appeal.

The appeal at the High Court was originally meant to involve only the majority owners, who consented to the en bloc sale of Horizon Towers in February, and the minority owners, who oppose the sale. But HPL and the group of 13 who wanted separate representation applied to participate in the proceedings, on the grounds that they had a stake in its outcome.

Judge Choo heard their submissions and ruled yesterday morning that it was ‘just and convenient’ to allow both parties in. He also said that ‘prudence requires that HPPL (HPL and its partners) be heard’, as the outcome of this appeal would have a bearing on their allegation that the majority owners breached the sales contract.

HPL and its partners – Morgan Stanley Real Estate-managed funds and Qatar Investment Authority – have sued the majority sellers for up to $1 billion in damages, alleging that the owners failed to do everything in their power to effect the collective sale.

This came after the STB in August dismissed the majority owners’ application for a collective sale order, on the grounds that it was defective because it was missing three pages.

The STB said the statutory declaration provided by the sales committee was ‘false’ because it stated that the collective sale agreement was appended when, in fact, three pages – containing the signatures of three consenting owners – were missing from it. The board also said that it had no power to amend the application and threw it out, without considering its merits.

HPL’s suit against the majority owners has been stayed, pending the outcome of this appeal.

Yesterday, majority owners and the buyers alike sought to convince the High Court that the STB had erred in its decision to throw out the application. They argued that there were no material instances of non-compliance in the application, only a minor technical one – which the STB has the power to amend.

Senior Counsel Chelva Rajah of Tan Rajah & Cheah, who represented the majority owners, and Senior Counsel Andre Yeap of Rajah & Tann, who represented the group of 13 owners, both argued that the missing pages had been a mere oversight.

‘It was only due to a clerical error that the pages weren’t included … and these missing pages were brought to the STB’s
attention during the course of the hearing,’ Mr Rajah said.

Mr Yeap also argued that the missing pages had no material effect on the application. It was a point Mr Rajah agreed with – he pointed out that, even without these three signatures, the application would still have the signatures of more than 80 per cent of the owners. According to collective sale rules for older developments, the owners of more than 80 per cent of the units must agree to the sale.

Both also said that STB had the right – under Rule 12 of the Building Maintenance and Strata Management Regulations – to amend any application submitted to the board, and could have done so instead of dismissing it.

Senior Counsel K Shanmugam of Allen & Gledhill, representing HPL and its partners, echoed the spirit – if not the tone – of the majority owners’ submissions.

Mr Shanmugam said his goal was also to convince the High Court that STB had erred in throwing out the collective sale application, without considering its merits. But he warned that there were competing interests among the majority owners.

He cited examples of how some of the majority owners had tried to scupper the en bloc sale, after neighbouring developments started to fetch much higher prices. He related instances of how the sales committee had been equivocal about setting STB hearing dates and how anonymous flyers had circulated around the development, encouraging sellers to renege on the deal.

‘So I want to be joined to this action (this appeal) to ensure our interests are safeguarded,’ he said.

The hearing continues today, when the minority owners will present their objections.

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Business Times: Balestier hotel site taken out of reserve list

October 2, 2007
Balestier hotel site taken out of reserve list
URA to review plot’s land use; Rangoon site goes to S’pore Healthpartners By LYNETTE KHOO

A HOTEL site at Balestier Road/Ah Hood Road is to be withdrawn from the reserve list of the Government Land Sales (GLS) Programme for the second half of this year, the Urban Redevelopment Authority (URA) said yesterday.

The URA intends to review the land use plan of the site together with the other vacant land in the vicinity.

This site was on the reserve list since Oct 26 last year, being slated for hotel development on a 99-year lease.

The URA declined to indicate what plans it was considering for the site, saying that it would release details when they are finalised.

‘We are unable to reveal if we have received applications for the site,’ a URA spokesman said.

‘However, from time to time, the government receive inquiries for the site.’

Under the reserve list, the government will release a site for sale only when an interested party submits an application for a site to be put up for tender with a minimum purchase offer price that is acceptable to the government.

Separately, URA yesterday awarded the tender for the white site at Race Course Road/Rangoon Road to Singapore Healthpartners Pte Ltd (SHP).

The company submitted the highest bid of $265.27 million or $4,635.47 per square metre of gross floor area.

Singapore Healthpartners has a total of 38 shareholders, including prominent doctors Charles Chan, Leslie Lam and Maurice Choo.

A major shareholder is Berjaya Leisure (Cayman) Ltd, which is said to be linked to Berjaya Leisure Capital led by Malaysian businessman Vincent Tan.

Directors of SHP contacted by BT last week declined to comment on the company’s plans for the 13,625 sq m site but a medical centre-cum-hotel appears to be in the offing.

The 99-year leasehold white site has a maximum permissible gross floor area of 57,225 sq m and at least 40 per cent of this must be used as a hotel.

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Business Times: En bloc effect pulls up HDB resale prices

October 2, 2007
En bloc effect pulls up HDB resale prices
Private home prices also up smartly; govt may make more sites available By KALPANA RASHIWALA

(SINGAPORE) The property price boom seen in the past two years has filtered down to the heartlands. The Housing & Development Board’s Q3 2007 flash estimate for its resale flat price index was 6.5 per cent higher than in the preceding three months. This is the biggest quarter-on-quarter jump in the index since Q2 1999, when it rose 8.1 per cent.

Market watchers say the key factor driving the increase this time around is the army of en bloc sellers downgrading for their replacement property.

Meanwhile, the party continues in the private housing market. The Urban Redevelopment Authority’s (URA) flash estimate shows that the official price index for private homes jumped 8 per cent in Q3 over the previous quarter, after rising 8.3 per cent in Q2. To ensure that prices do not run ahead because of a shortage of supply, the URA indicated that more sites could be made available through the Government Land Sales programme.

For now, the gains appear pretty evenly spread across regions. The URA said its price index for non-landed private homes in the Core Central Region – which includes the prime districts, Downtown Core and Sentosa – increased 8.3 per cent quarter-on-quarter in Q3, followed by an 8.1 per cent rise for Outside Central Region, which covers suburban mass-market locations like Woodlands, Yishun and Jurong, and 7.7 per cent for Rest of Central Region, including places like Bukit Merah, Toa Payoh and Katong.

The big price disparity among the three areas at the beginning of the year is clearly dissipating, notes PropNex CEO Mohamed Ismail. DTZ Debenham Tie Leung executive director Ong Choon Fah said yesterday’s official property data is ‘not such a bad thing. Everybody should feel a little richer’. CB Richard Ellis executive director Li Hiaw Ho says the URA’s Q3 flash estimate shows that ‘confidence in the residential market was unshaken despite periods of volatility in global stock markets caused by the sub-prime mortgage problems’.

‘While it’s not surprising that the high-end market continued to lead the way as more and more projects were marketed at above $3,000 psf, it was a big step made by several suburban projects that were launched at $850-1,000 psf,’ he added.

The URA’s flash estimate for its Q3 overall private home price index reflects a 22.6 per cent gain in the first nine months of this year, since Q4 2006.

Mr Li reckons the gain for the whole of this year may come in at 25 to 30 per cent. The uptrend will continue as there are more high-end projects to be rolled out in Q4, including Hilltops, Ritz-Carlton Residences, Grange Infinite, Phase 2 of Marina Bay Financial Centre and projects on Sentosa Cove, he noted.

Mrs Ong notes that other factors driving private home prices include still-strong liquidity, the trend of tenants deciding to become home owners, and the appeal of buying apartments for investment, given the tight rental market.

As for the HDB resale price index, Mr Ismail predicts the full-year increase will reach 15 per cent, considering that the increase in the first nine months alone amounted to 11 per cent. ERA assistant vice-president Eugene Lim forecasts an increase of 13 to 16 per cent for the whole of this year. He laments the unrealistic prices sought by many owners who are still riding on the euphoria created by record prices achieved for some five-room resale flats in the Bukit Merah area. HDB homebuyers are beginning to show some resistance and this could translate into lower resale volumes later down the road.

Mr Ismail estimates that transacted prices of HDB resale flats in Q3 reflect premiums over valuations ranging from $10,000 to $50,000. ‘A year ago, for the smaller three and four-room flats, the premium could have been $10,000-$15,000, while for bigger flats in outlying areas, many were not fetching any premium over valuation at all,’ he added. He reckons that for the next year, HDB’s resale flat price index could go up 10-12 per cent. Mr Ismail does not expect HDB resale flat prices to run away as they did in 1996, when the index rose 34.3 per cent, as the authorities will step up supply quickly to prevent public housing prices from becoming unaffordable.

HDB said it will continue to monitor the market closely to ensure ‘an adequate and affordable supply of flats’. It will be
increasing its supply of new flats with plans to offer about 4,500 units under the Built-To-Order system over the next six months, after offering about 2,700 BTO flats from January to September. In addition, HDB plans to release three new sites under the Design, Build and Sell scheme that can generate about 1,500 HDB flats in central and eastern Singapore in the next half year.

As for the private housing market, the URA also gave a clear signal yesterday on its intention for the Government Land Sales programme for H1 2008, which it is currently reviewing. ‘The government will make available more sites for private residential development through the GLS programme next year if the demand continues to remain strong,’ it said.

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