The founder and chairman of conglomerate Spice Group – it has interests in telecommunications, technology, financial services and entertainment – has set up two funds worth more than $100 million to invest here.

The tycoon also wants to open a 24/7 ‘Hollywood meets Bollywood’ entertainment centre at one of two floating crystal pavilions coming up at the Marina Bay Sands integrated resort.

Speaking to The Straits Times at his 63rd storey apartment at The Sail @ Marina Bay, Dr Modi said he plans to spend ‘tens of millions’ on the project and is in talks with Sands to either buy or lease a pavilion.

‘We are getting designers from Hollywood and from Bollywood to design it,’ he said, adding that the IR could use his design or do its own.

But the idea is to entice Hollywood and Bollywood stars to entertain crowds here on a regular basis.

Dr Modi, 60, also owns a film production company and wants to attract directors. Indian star Anil Kapoor has been lined up to act in a movie to be shot here.

The businessman, who relocated the global headquarters of Mumbai-based Spice Corp to Singapore last year, said he is here to stay.

His new home sprawls across 5,834 sq ft and has spectacular Marina Bay views that match the apartment’s colour scheme of cream and baby blue.

Everything in the apartment – from the interior design, custom-made furniture, prints, paintings and even the coffee-table books in the living room – was planned by a design team from Beverly Hills, where he was based previously.

An integrated high-tech system ensures round-the-clock entertainment at a click. Dr Modi is moving here with his family, but says his son Dilip, 33, who is the group president for global operations at Spice Corp, wants to stay on his own at a family owned apartment in The Claymore, a condominium in the Orchard Road area.

Dr Modi bought the The Sail apartment last August, but his investment took a huge hit with the slump in the property market here.

Unfazed, he said: ‘It is a home. I am not here to sell it. I will be using it also to entertain people. That way, I can justify the cost.’

Dr Modi plans to hold meetings as well as parties at his penthouse. He even broached the idea of inviting girl band Pussycat Dolls to a party, although he does not know them personally.

While Dr Modi himself expects to spend about 100 days a year in Singapore, his penthouse – ‘like a hotel suite’ and a 24/7 entertainment zone – will be open 365 days of the year to friends, business associates and celebrities, he said.

Dr Modi said that his two new funds involve nuts and bolts investment strategy and their share of risk-taking.

One fund is a special-situation real estate vehicle. This will target half-completed projects here or projects that are delayed due to a lack of funds.

‘The world is going through a special situation…you need people to take special risks,’ he said. ‘We are looking for 25 per cent returns…high risks, high returns. We are not looking for immediate returns. We are willing to wait two, three years.’

His team is assessing about 20 possible projects. Dr Modi said they are keen on joint ventures, and Marina Bay Sands is certainly on his radar screen. He also said he is discussing a deal to buy a residential building in the eastern part of Singapore. The other fund will focus on investment in entertainment.

‘Singapore is very much the right place for me,’ said Dr Modi. It is cosmopolitan, secular, very secure, has a growing population, well-connected.’

The former HUDC development was first placed on the en-bloc market in July last year but residents did not receive any offers that they could accept until now.

When Gillman Heights was put up for sale six months ago, the frontrunners were seen to include developers like Frasers Centrepoint, MCL Land and Guocoland.

CapitaLand did not even figure in the picture then.

But sources told Channel NewsAsia that CapitaLand made a late entry last Friday.

Its offer was conveyed through a broker, but it was turned down.

CapitaLand then decided to reveal its identity on Monday and met with the residents.

After a lengthy discussion, the deal was finally sealed on Tuesday morning at about 5am, with the residents getting almost S$19 million more than their last known offer.

There are 607 apartments in Gillman - about 1,700 and 1,950 square feet each, and one shop unit.

Based on a S$363 per square foot per plot ratio, the residents will be compensated between S$880,000 to S$950,000 per unit.

The amount is inclusive of a differential premium of S$90 million to top up the lease to 99 years and maximise the use of the plot ratio from the present 1.65 to 2.1.

Property analysts say the acquisition reflects an improving market sentiment over the mid-tier market.

With over 80 percent of the owners supporting the sale, the transaction is expected to be completed by the end of this year.

Residents say they are now working on getting the support of the remaining residents.

CapitaLand says it plans on building a 24-storey condominium with about 1,200 units on the site, and the first phase is planned to be ready for launch next year. - CNA/ms

This was confirmed yesterday by Raymond Chui, general manager of the group’s Singapore-based unit Property Enterprises Development.

Cheung Kong unit Treasure Well Investments’ bid was for $251.3 million or about $533 per square foot per plot ratio (psf ppr) – the highest seen for a private housing site at a state land tender this year.

Mr Chui said the estimated breakeven cost of about $850 to $900 psf forecast by analysts quoted in the media was pretty accurate. ‘We’ll probably develop around 340 to 350 units,’ he added.

Treasure Well’s top bid was 21.5 per cent above the next highest offer, which was made by Singapore’s Far East Organization.

When asked if Cheung Kong regretted having paid such a wide margin, especially in hindsight as the government announced its H1 2010 land sales programme the next day with substantial supply in the confirmed list, Mr Chui replied: ‘We’ve done our sums. The site is in a very good location and we have confidence in the future of the Singapore property market.’

The Upper Thomson Road site is located opposite the Singapore Island Country Club’s Island Golf Course and Lower Peirce Reservoir.

The group will also be developing a 295-unit condo on a 99-year-leasehold site facing West Coast Park and overlooking the sea.

That is likely to be launched next year, possibly in the second quarter, Mr Chui revealed.

The project will comprise fairly regular-sized units. ‘Our showflat is not yet ready,’ he added.

Cheung Kong clinched the West Coast site at a state tender in March last year, paying $110.44 million or $305 psf ppr.

Interestingly, it also outbid Far East Organization for that site, but with a much narrower winning margin of just 1.4 per cent.

Source : Business Times

The Government came out about a week ago to say that there is no shortage of residential supply and thus no need for buyers to rush. That was when it announced its decision to tender out eight residential sites for sale in the first half of next year.

The eight sites are in non-city areas such as Choa Chu Kang, Simei and Tampines.

It also has a long reserve list of residential sites that are available for sale, if developers are to show interest by committing to a minimum bid the Government finds acceptable.

This potential supply comes from the twice-yearly government land sales programme and means buyers will have more choices while property owners may benefit.

HDB upgraders in particular will be glad to know that the latest sales programme – for the first half of next year – will see a slew of suburban residential sites.

Property owners who live near the eight sites can expect to see a new project in their neighbourhood in the next few years.

If the economy improves steadily, they can even look forward to a rise in their home values when the new project is released for sale.

‘Generally, when a new project is launched, it will have a bearing on the developments in the vicinity,’ said Colliers International’s research and advisory director, Ms Tay Huey Ying.

‘If a project is launched at bullish price levels, it could push up the prices of surrounding developments, though a lot can depend on project attributes.’

Ngee Ann Polytechnic lecturer Nicholas Mak said: ‘In a buoyant market, developers would launch at a higher price on a per sq ft basis than surrounding projects. In a less buoyant market, the premium would be smaller.

‘The launch price does give some support to the asking prices of individual sellers in the area.’

In January, three sites will be put up for sale, including two executive condominium (EC) sites.

The first EC site in Buangkok Drive, near The Quartz condo and Buangkok MRT station, can accommodate an estimated 520 units while the second in Yishun Avenue 11, next to the Lilydale EC, can take 385 units.

The EC scheme was launched in 1996 to help Singaporeans who could afford more than new HDB flats yet found the prices of private housing too high.

The biggest of the eight sites is at the junction of Tampines Avenue 1 and Avenue 10, next to The Tropica condo and Bedok Reservoir. It can take 605 units.

The site in Choa Chu Kang Road, suitable for 200 units, sits above the Bukit Panjang LRT Depot and Ten Mile Junction, and is near the future Bukit Panjang MRT station.

The Sembawang Road site is near Sembawang Shopping Centre and can take about 290 units.

In the west, the Boon Lay Way site for 525 units is next to the sold-out The Caspian and near Lakeside MRT station.

Property consultants also singled out the site at Simei Street 3 and the one at the junction of Upper Serangoon Road and Pheng Geck Avenue as choice ones because of their proximity to the Simei and Potong Pasir MRT stations respectively.

‘As Singapore becomes more populated, characterised by a relatively fast-paced lifestyle, accessibility and proximity to mass transit stations will be a key consideration for future home buyers,’ said CBRE Research director Leonard Tay.

On the reserve list, there are also sites near MRT stations: The Bartley Road site, which can take about 500 units, faces Bartley MRT station and the Stirling Road site, which can have 405 units, is near Queenstown MRT station.

Both sites are seen as highly attractive and thus likely to be triggered for sale next year. Even if they are not, the eight sites to be tendered out next year will yield 2,925 units, which is nearly as high as the 3,000 units put out in the se-cond half of 2007.

In addition to the reserve list sites, the Government is making available 10,550 private residential units – the largest supply since the second half of 2001.

Still, the impact of this will not be felt immediately.

It will take at least 1.5 years before a project on the eight sites can be launched, said Mr Mak.

And depending on how the market pans out, developers may choose to launch their projects later, he said.

Source : Sunday Times

But analysts said on Friday that sales volumes in 2010 are likely to fall back to sub-10,000 levels seen in previous years.

Observers are projecting that 15,000 to 16,000 units will be sold in the primary market in 2009 – the highest on record.

The launch of a mass market project in Jurong West – Caspian – broke the dam for new home sales in Singapore earlier in 2009.

Some 10 months later, home sales during the economic downturn are projected to exceed even July 2007’s record of 14,811 homes. Data already shows that about 13,905 units have been sold from January to September this year.

Analysts said this performance is driven by pent-up demand, and is unlikely to be repeated in the years ahead.

Donald Han, managing director, Cushman & Wakefield, said: “This has been a spectacular year by virtue of pent-up demand. The second and third quarter probably produced about 60 to 70 per cent of total demand for 2009.

“In the third quarter alone, we sold something like 5,700 new home units. We sold more in the third quarter than in 2008. That kind of demand is not sustainable.

“The fact is that the government put on the brakes by discontinuing the interest absorption scheme. Also, they are making promises to ensure enough supply in the marketplace by introducing more government land sales programmes in 2010.”

Mr Han said sales are likely to average around 800 new homes a month, or some 9,000 to 10,000 units for the whole of 2010. However, some analysts said prices will not be falling in tandem with lower sales.

That is because the strong economy and fundamentals of the country will support prices, and may even drive them higher.

Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic, said: “Going forward, average home prices still have some way to grow. They could still expand conservatively at about 10 per cent, while in some segments they could go as high as 20 per cent.”

Units in the mid- to high-end segments will see prices rise higher than those in the mass market.

Analysts said this is mainly because prices in the mass market, which accounts for about 45 per cent of all private homes sold to date, started heading upwards earlier, and are close to their peak.

But they are not ruling out factors that could temper price growth such as government measures to cool the market, should speculation get out of hand.

Source : Business Times – 4 Dec 2009

THE government is offering developers a platter of residential sites through the confirmed and reserve lists for the next half – including several plots in the vicinities of hot-selling condo launches this year, such as Caspian near Jurong Lake and Alexis near Queenstown MRT Station.

However, the jury is out on how much this will tame land bids, which have soared wildly at recent state tenders.

Four of the eight sites on the confirmed list and at least four reserve list sites are near MRT stations – but there are also many sites not in the vicinity of train stations where more affordable private housing could be built.

A few plots are close to the city while the majority are in typical suburban locations where private condos catering to HDB upgraders are located.

Peter Ow, Knight Frank executive director (residential), said: ‘The government’s main message is that it is taking care of the upgraders’ market. The current release is to tackle and try to moderate prices in the upgraders market which concerns most Singaporeans.’

For new private homes, prices in the mass-market segment have surpassed their 2007 peak levels; whereas for high-end homes, prices have yet to recover to their 2007-highs, he added.

‘Thus, there are no sites in the Core Central Region, which includes the prime districts. The government recognises the fact that not all sectors of the residential market are doing well, especially high-end homes.’

Chua Chor Hoon, DTZ’s South-east Asia research head, said that with so many choices, developers are unlikely to put in aggressive land bids in future tenders.

Leonard Tay, CB Richard Ellis director (research), said that the latest supply may moderate slightly some of the exuberance at recent state tenders but prime sites near MRT stations would still be well contested and developers may put in a premium.

Putting the latest supply numbers in perspective, Knight Frank chairman Tan Tiong Cheng suggested that the 2,925 private homes that can be developed on the eight confirmed list plots for H1 2010 would not significantly bring down land bids as the reintroduction of supply on this list is long overdue after an absence of one year.

‘So it’s more like catching up. Plus, there’s no alternative supply of mass market sites from the private sector through collective sales, for instance,’ he added.

Of the 10 new housing sites on the latest confirmed and reserve lists, Knight Frank’s Mr Ow picks out the confirmed list plot next to Potong Pasir MRT Station, which can yield about 150 private homes, and the reserve list site at Stirling Road near Queenstown MRT Station as the ones likely to fetch the highest bids – about $500 per square foot per plot ratio (psf ppr) and above $500 psf ppr respectively, because of their proximity to the city.

DTZ’s Ms Chua pointed out that the Stirling Road site, which can be be turned into a condo with about 405 units, is quite near the CBD and very close to HDB flats. A new condo on the site would generate demand from both owner occupiers and investors. ‘There’s good rental demand for Queens and Anchorage condos nearby,’ she said.

Agreeing, Mr Ow said that the Stirling plot, with a 4.2 plot ratio (ratio of maximum potential gross floor area to land area) could probably be built up to 40 storeys, in line with Queens condo just in front of it as well as HDB blocks in the Dawson estate nearby.

Property consultants said that other new sites that are likely to be popular include plots near Simei and Lakeside MRT stations as well as a plot in Pasir Ris near Downtown East and Pasir Ris Park.

The land parcel near Lakeside MRT Station, which is under the confirmed list, can produce some 525 private homes. It is next to Caspian, which sold like hot cakes in February and helped revive private homes sales after last year’s global financial crash. Another plot on the confirmed list, diagonally opposite Simei MRT, can produce 250 units. It is also near UOL Group’s Double Bay Residences which was released this year. The confirmed list site at Pheng Geck Avenue near Potong Pasir MRT is close to another 2009 hot seller, 8@Woodleigh.

Among the new reserve list sites, the Stirling Road plot is in the vicinity of Alexis condo, which was also among the earlier hot projects this year.

The Ministry of National Development has also injected two plots in Hougang into the latest reserve list – one at Hougang Avenue 2 designated for a low-rise development near Rosyth School, and the other, at Hougang Avenue 7.

Another new reserve list plot is at Miltonia Close in Yishun, next to The Shaughnessy, a completed condo. It may be far from town and not next to an MRT station but a new low-rise development on the site will be attractively located, next to Orchid Golf Course and near Lower Seletar Reservoir.

Developers more familiar with the Eunos area may consider a plot at Foo Kim Lin Road which can generate about 535 units. It is a new plot on the reserve list.

‘Developers now have a whole buffet-table spread of sites to choose from,’ summed up CBRE’s Mr Tay.

Source : Business Times – 7 Nov 2009

Keppel Corp director Alvin Yeo, who is also the senior partner at law firm Wong Partnership, is paying $6.54 million or $2,442 per sq ft (psf) for a 2,680 sq ft apartment on the 32nd floor of the luxury project.

The details of the transaction were disclosed in an announcement by Keppel Land to the Singapore Exchange yesterday as part of the exchange’s listing rules.

No discount was given by Keppel Land, which is one of the joint-venture partners of the project along with Hongkong Land and Cheung Kong Holdings.

Keppel Land director Niam Chiang Meng is paying $4.577 million or $2,238 psf for his unit, also on the 32nd floor but smaller at 2,045 sq ft.

Mr Niam also did not receive any discount.

The recent preview of Marina Bay Suites saw units snapped by Singaporeans and foreigners, including Indonesians, Malaysians, mainland Chinese, Australians and Americans.

Reports have put the pricing of the units sold at around $2,300 psf.

A 30-year leasehold industrial site at Pioneer Road North and Soon Lee Drive has attracted strong demand, pointing to sustained confidence in the economy.

By the close of tender yesterday, the Urban Redevelopment Authority (URA) had received eight bids for the 18,958.8 square metre plot, which has a maximum gross plot ratio of two. The top bid came from Kng Realty Pte Ltd, at $19.4 million or $48 per square foot per plot ratio (psf ppr).

CB Richard Ellis Research executive director Li Hiaw Ho expects the development’s breakeven cost to range from $190-$210 psf.

Kng Realty’s bid is more than two times that of the trigger bid - an unnamed developer had committed to pay at least $8.2 million or $20 psf ppr for the land in October.

Kng Realty’s shareholders include Kim Chan Wah and Ng Hock Lye, both of whom are also shareholders of another company, Kng Development Pte Ltd.

Kng Development had won the tender for an industrial site at Kaki Bukit Road 2 in August. This firm’s other shareholders include Ng Teng Yeng, brother of property tycoon Ng Teng Fong.

The next highest bid for the Pioneer Road North site was $18 million or $44 psf ppr, which came jointly from Sia Kong Wah and Gimp Investment Pte Ltd. Kng Realty’s bid exceeded this by 7.8 per cent.

Other companies such as Soilbuild Group and EL Development also took part in the tender. The lowest bid came from Bok Seng Logistics Pte Ltd, at $9 million or $22 psf ppr.

‘The healthy response to the tender reflects the more optimistic business sentiment,’ said CBRE’s Mr Li.

According to Knight Frank head of industrial business space Lim Kien Kim, tender participants could also have been encouraged by good industrial space take-up in the Woodlands and Tuas South areas.

URA said it will evaluate the bids and announce the award of the tender later. Industrial sites it put up for sale in the last few months have seen healthy demand. For example, the one at Kaki Bukit Road 2 which eventually went to Kng Development drew as many as 18 bids.

Suntec Reit called for a trading halt in the morning to announce the launch of the private placement. The Reit manager said that book-building closed within three hours. Suntec Reit managed to place out 128.5 million new units at $1.19 apiece.

The issue price was a 6.5 per cent discount to the volume weighted average price of $1.2724 per unit, based on trades done on Thursday. The new units represent around 7.7 per cent of the number of units in issue on Thursday.

According to Suntec Reit, the private placement was more than five times oversubscribed by existing unitholders and new investors. More than 60 institutional investors bagged the new units.

Assuming that all net proceeds go towards debt repayment, its aggregate leverage is expected to fall from 36.2 per cent at Sept 30 to 33.4 per cent.

Presentation slides on the Reit’s third-quarter 2009 results show that it had total debt of $1.877 billion at Sept 30. No debt will mature in FY2010, but around $532.5 million will be due in FY2011.

‘The proceeds from the private placement will strengthen Suntec Reit’s balance sheet and put us in a stronger position to take advantage of growth opportunities,’ said Yeo See Kiat, chief executive of Reit manager ARA Trust Management (Suntec).

In a report on Wednesday, OCBC Investment Research flagged a potential dilution risk in the counter. ‘With declining office income and book value risk, Suntec could decide to go the acquisition route in 2010,’ said analyst Meenal Kumar. ‘It is likely to keep aggregate portfolio gearing unchanged or lower, necessitating a combination of both equity and debt financing on any purchase.’

DMG & Partners analyst Jonathan Ng believes that Suntec Reit is expecting potential asset write-downs at year-end, and is preparing to keep its gearing below 40 per cent.

‘We expect Suntec to register a 7 per cent devaluation on its book in Q4 2009 to $5 billion, from the current $5.4 billion,’ Mr Ng said in a note yesterday. ‘There are unlikely to be further cash calls unless further asset write-downs are expected in H2 2010.’

He estimates that there will be a ‘mild’ dilution of 1.2 per cent, or 0.11 cents per unit, to the Reit’s distribution per unit in FY 2010.

Suntec Reit units closed unchanged at $1.28 each yesterday after resuming trading in the afternoon.

Several Reits, such as Ascendas Reit and Fortune Reit, have raised funds from the stock market this year. Analysts expect more cash calls next year, as the sector continues to pare debt or build capacity for acquisitions.

WITH hotel occupancies having clawed their way up to healthier levels this quarter and tourism starting to show signs of recovery, the hotel industry appears to be regaining lost ground.

Room rates, which also came under pressure this year thanks to a slump in travel demand, are also likely to start increasing gradually in line with the market, some hotels said.

According to Hong Leong Group subsidiary Millennium & Copthorne (M&C) Hotels, its hotels pulled off a solid showing in the third quarter, with average occupancy rate (AOR) jumping to 86.1 per cent, up from 74.8 per cent in the first quarter and 75.5 per cent in the second quarter.

‘Occupancy for 4Q09 is expected to continue in this recovery trend,’ said a spokesperson for M&C, whose portfolio includes Orchard Hotel and the Grand Copthorne Waterfront.

For the Rendezvous Hotel, occupancy is at the 80 per cent mark currently, compared to 70 per cent in the early part of the year.

‘Average room rate has gone up by more than 10 per cent compared to the low rates experienced in July-August, which is a lull period for us,’ said its general manager Kellvin Ong.

Over at the Pan Pacific, booking trends have been picking up, compared to the first half of this year where occupancy rate was softer year-on-year.

Fourth-quarter figures are expected to be bolstered by Apec week in November which brought 10,000 dignitaries and members of the international media to Singapore. Food and beverage sales for the year-end festivities are also expected to prove better than last year in light of the recovering economy.

For luxury hotel St Regis - which played host to President Hu Jintao and the delegation from China during Apec week - fourth-quarter occupancy has grown by 14 percentage points year on year.

Corporate travel - which took a nosedive in the earlier part of this year as companies slashed travel budgets to contain costs - also seems to be picking up.

‘The last quarter of 2009 has been positive with an increase in corporate room bookings, which has helped to boost our average occupancy and rates,’ said Pan Pac’s public relations manager, Cheryl Ng. She also added that room rates are likely to grow marginally in 2010, while the occupancy level should also do so by at least five percentage points.

The Rendevous Hotel, which expects to gradually start revising its rates upward in line with the recovering industry, is also banking on the corporate demand to push up room rates.

Others, such as the Marriott, are upbeat that 2009 will end on a better note than it began.

‘Room occupancy has risen and the general business sentiment has lightened up,’ said Marriott’s marketing director Julie Yeong.

Meanwhile, M&C said that it will ’scale back’ on existing discounted packages, given that occupancy is treading above 80 per cent, but plans to introduce other higher value-added packages. M&C also expects next year’s revenue per available room (RevPar) to grow year-on-year as the recovery in the tourism sector picks up steam.

And with the much- talked-about Resorts World at Sentosa (RWS) and Marina Bay Sands (MBS) slated to open their doors next year, hoteliers expect to benefit from the new kids on the block, despite the hefty injection of industry supply. RWS alone adds some 1,800 rooms.

‘We expect the increase in hotel rooms will initially displace the equilibrium in the market. However, in the long-run, demand will grow,’ reckons Ms Ng.

For starters, visitors may prefer to be away from the crowds or require more affordable accomodation. Traditionally, hotels within theme parks tend to charge a premium compared to hotels in the surrounding area.

The presence of the integrated resorts could also boost weekend rates and occupancies.

‘Hotels currently tend to experience weaker occupancies and rates during the weekends. With the expected spike in leisure visitors to Singapore over the weekend, it may not be surprising to see hotels registering higher occupancies and possibly even higher rates,’ M&C’s spokesperson pointed out.