Within the next 15 years, however, all that will change.

The neighbourhood around the Paya Lebar MRT station is slated for a major makeover as part of the Government’s recently unveiled draft masterplan.

It will be transformed into Paya Lebar Central, a suburban commercial node nestled between the city centre and the bustling Tampines commercial hub.

About 12ha of land around Sims Avenue and Geylang Road will be put up for development, yielding some 5.4 million sq ft of commercial space.

More than half of this space has been earmarked for offices. The rest will be for shops and hotels with about 1,400 rooms.

While Paya Lebar will be positioned as a fringe hub along the lines of Novena and Buona Vista, the area’s traditional local Malay character will add a unique flavour.

Apart from the new commercial buildings, some upcoming developments include landscaped public spaces around the cleaned-up Geylang River, a pedestrian mall along Geylang Road, and a new plaza square and civic centre next to the rebuilt Geylang Serai Market.

All these exciting plans make Paya Lebar an ‘interesting sub-

regional centre’, said Mr Chia Ngiang Hong, the group general manager of property developer City Developments.

‘It has the potential to become as successful as Novena,’ he said at the masterplan’s launch last month.

But what does this all mean for potential investors and current owners of Paya Lebar properties?

Property consultants say it is a bit premature to predict any trend in property values right now or even in the next few years.

Over time, however, starting from about five years from now, properties in the area will almost definitely become more valuable, they add.

Office buildings and shopping centres are the most obvious beneficiaries, said Dr Chua Yang Liang, the head of South-east Asia research at property consultancy Jones Lang LaSalle.

‘The plans to improve Paya Lebar will have a long-term impact on the properties around the area,’ he said. ‘The first thing that comes to mind is that the commercial assets will benefit from the increased activity once things start to take shape.’

There are limited avenues for small-time investors to take advantage of, though, as there are not that many strata-titled commercial properties in the immediate area. The few that exist include City Plaza.

Dr Chua said, however, some properties in the nearby Geylang area might enjoy a spillover effect. Prices and rents of office and shop units there, such as coffee shops, have been on the rise recently.

Mr Li Hiaw Ho, executive director of CB Richard Ellis (CBRE) Research, also said hi-tech industrial buildings in the vicinity of Paya Lebar Central were likely to rise in value over time.

As for residential developments, there are currently no plans for new housing sites in Paya Lebar. This, however, may prove a boon to existing homes in the area.

Their prices and rentals are expected to rise, as the critical mass of workers that will flow into the commercial hub look for homes nearby to buy or rent, consultants say.

Currently, there are few major projects in the vicinity. Most apartment blocks are boutique developments around Guillemard Road, Guillemard Crescent, Sims Avenue, Haig Road and Geylang.

Prices differ widely, depending on the area, according to CBRE, citing data from the Urban Redevelopment Authority.

CBRE’s analysis show some recent launches, such as Esta Ruby in Guillemard Road and Cosmo in Guillemard Crescent, have commanded prices well above $1,000 per sq ft (psf).

Latest transactions for nearby developments along Haig Road, such as Butterworth 8 and Haig Garden, have fetched prices hovering around $1,000 psf.

Others, such as Sunflower Regency in Lorong 20 Geylang, are hovering at between $500 psf and $600 psf.

The same trends can be seen for completed projects. Homes in Geylang proper - including those in Sims Green, The Sunny Spring, Wing Fong Mansions, The Waterina and Aston Mansions - have been transacted recently at well below $600 psf.

On the other hand, homes in Geylang East, in projects such as Simsville and Central Grove, have been sold for $600 to $900 psf.

Le Crescendo, one of the rare condominiums along Paya Lebar Road, is fetching between $800 psf and $1,000 psf for its newly completed units.

As for public housing, prices for a three-room flat in the Geylang town range from $170,000 to $300,000, according to sales in the last three months. Prices are lower in estates along Paya Lebar Way, Eunos Crescent, Balam Road and Circuit Road, and higher in Haig Road and Aljunied Crescent.

Five-room flat prices range from below $300,000 in the Ubi area to well above $400,000 in Eunos Crescent.

By Fiona Chan Property Reporter
Source : Straits Times - Sunday 8 June 2008

Mr Bernanke’s comments suggesting inflation was too much of a concern to contemplate more rate hikes sent the US dollar higher and raised questions about oil’s ability to reach new highs in the short term.

He signalled that the Fed was inclined to leave rates where they were for now, but some analysts said he might be taking a step towards an eventual rise in rates later this year or early next year.

By mid-afternoon in Singapore, light, sweet crude for delivery next month was down 66 US cents at US$123.65 a barrel in electronic trade on the New York Mercantile Exchange (Nymex). The contract had fallen US$3.45 to US$124.31 in the previous session.

That was oil’s lowest settlement price for a front-month contract on the Nymex since May 15. Prices were now more than US$11 below the trading record of US$135.09 a barrel hit on May 22.

Evidence continued to mount that oil prices nearly twice what they were a year ago had cut demand.

Averaged over the last four weeks, demand was down 6 per cent last week compared to last year.

ASSOCIATED PRESS

Source : Straits Times - Thursday 5 June 2008

Market watchers attributed the softer prices to the seasonal lull of the school holidays, when people tend to be out of town.

There was also speculation that, with fuel prices hitting record highs, buyers may be starting to steer towards smaller and more economical cars.

The certificate of entitlement (COE) price for cars with engines up to 1,600cc, such as the Nissan Latio and Toyota Vios, ended 7.1 per cent lower at $14,590. The premium for cars above 1,600cc, such as the newly launched Audi A4 and Honda Accord, registered a 14.5 per cent drop to $14,640.

The price of the open category COE, which can be used for any vehicle type but ends up mainly for cars, dipped 2.4 per cent to $16,301.

The demand for commercial vehicles seemed to have cooled as well. The COE premium in this category closed 8.5 per cent lower at $13,501. Even the motorcycle COE rate was weaker at $1,083 - down 2.3 per cent.

Mr Barry Kan, general manager at multi-brand agency Wearnes Automotive, said: ‘I put it down to people being away for the school holidays. Generally, showroom traffic has been lighter lately.’

He said high pump prices, with a litre of petrol going for as much as $2.30, may be starting to hurt buyers of bigger cars - not so much the luxury-car buyers, but those eyeing the value-for-money models of Asian brands.

Mr A.C. Neo, marketing director of Nissan agent Tan Chong Motors, reckoned that the weak sentiment in the property, rental and stock markets was to blame for curtailing the demand for ‘more expensive items’.

Other observers noted that parallel importers have been less active in recent weeks, hence easing the pressure on premiums. Parallel importers are seen as being more aggressive COE bidders because they sell far fewer cars than authorised agents, and have less to lose if premiums soar.

Motor traders are expected to lower car prices on the back of the lower COE premiums.

By Christopher Tan, Senior Correspondent
Source : Straits Times - Thursday 5 June 2008

Sino Construction aims to raise net proceeds of $35.6 million with its initial public offering (IPO) of 152 million shares priced at 39 cents apiece.

The company’s customers are mainly property and infrastructure developers and government-related bodies.

The offer, launched yesterday, comprises 6.4 million public-offer shares and 146 million placement shares.

Of the proceeds, $17.5 million has been earmarked for a concrete mixing base, $10 million will be used to purchase construction equipment, and the rest will serve as general working capital.

The company is a leading contractor in Daqing City, one of the most economically developed cities in China’s north-east. It has worked on a number of public buildings in the city, including hospitals and university campuses.

The company turned in a net profit of 168.5 billion yuan (S$33.18 billion) last year. Turnover was 1.16 billion yuan. It has a historical price-to- earnings ratio of 5.85 times.

The company’s chief executive and executive chairman, Mr Zhao Chuan Wen, is confident of the company’s growth prospects, despite the rising costs of raw materials.

‘The company has strong financial resources and a good track record, as well as an experienced management team that will distinguish us from our competitors,’ he said.

The firm has just been invited to tender for Daqing airport and some railway station projects. It is looking to expand overseas.

It also intends to distribute a dividend of at least 20 per cent of its net profit.

The offer closes next on Tuesday, and the shares are due to start trading next Thursday.

Source : Straits Times - 6 June 2008

Tian Hock Properties offered $116 million for the 204,514 sq ft plot, which works out to about $203 per sq ft per plot ratio (psf ppr).

The site drew a respectable five bids when its tender closed yesterday, possibly due to the perceived strength of the mass-market condo segment, experts said. Far East’s offer topped those of Sim Lian Land, Hong Leong Holdings, GuocoLand and Hiap Hoe.

But property consultants said the bid amounts remained low, reflecting a continuing caution and lacklustre demand in the overall property market.

Mr Li Hiaw Ho, executive director of CB Richard Ellis Research, estimated the site’s breakeven cost at about $600 psf, based on the top bid. The units could be sold for $650 psf in about a year, he added.

Homes at nearby condos such as Yew Tee Residences, Northvale and The Warren have fetched $450 to $650 psf recently, Mr Li said.

Far East’s bid yesterday came in higher than the top bid submitted last month for a similar site at the junction of Choa Chu Kang Road and Woodlands Road.

That site, home to the Ten Mile Junction mall, drew a top bid of $61 million, or $162 psf ppr.

FIONA CHAN

ST PHOTO: ALBERT SIM

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THE businessman caught out when his takeover of Jade Technologies descended into farce and recrimination has put his multimillion-dollar home on the market.Dr Anthony Soh placed an advertisement for the plush house in The Straits Times classifieds section over the weekend with an asking price of $13.88 million.

The home near the Singapore Island Country Club in leafy Windsor Park Road sits on 21,000 sq ft of sloping land and boasts a pool, badminton court and parking for up to 10 cars. The area is surrounded by the greenery of MacRitchie Reservoir.

The pricing probably indicates that Dr Soh is looking to seal a deal soon as similar-sized bungalow plots are being advertised for as much as $15 million.

But Dr Soh told The Straits Times that he is not selling because he is in financial difficulties. ‘I am selling because I want to clear all my outstanding housing loans with OCBC, and to downgrade to get out of the public eye,’ he said.

OCBC Bank was also caught up in the buyout drama. It was Dr Soh’s adviser, but resigned and has since found itself criticised by investors for its role in the mess.

The bank also made a report to the Commercial Affairs Department (CAD) about the buyout events.

Dr Soh, who bought the house in December 2006, said he was raising funds to also cover his expected hefty legal fees in relation to the Jade fiasco.

The doctor-turned-venture capitalist became Jade’s largest shareholder in June last year. His arrival boosted the shares, with investors hopeful that he would transform the firm and its loss-making precision engineering business.

The counter got a further boost when he launched a buyout offer for the firm in February.

But the positive sentiment turned sour when he abruptly withdrew his $117 million bid in April.

He told the Singapore Exchange that he had pledged millions of his Jade shares to Australian broker Opes Prime as collateral to get a loan.

But Opes collapsed, partly a victim of a falling Australian share market that exposed many of its clients to severe margin calls. Its creditors, Merrill Lynch and ANZ Bank, seized the shares held by the brokerage, including those pledged by Dr Soh.

The seizure meant he had insufficient funds to complete the buyout.

Many investors have been burnt. They were confident that the deal would succeed as Dr Soh had said he owned nearly 46 per cent of Jade. All he needed was 50 per cent plus one share for the deal to go through.

But as more details emerged, some have questioned if Dr Soh’s loss was just a hard-luck story. Doubts were also raised as to whether he really owned as much as 46 per cent of Jade when he made his offer.

Dr Soh’s move to sell his bungalow may be related to OCBC’s actions.

As the financial adviser in the deal, OCBC stated that he had enough financial resources to complete the buyout.

After the deal fell through, investors questioned how OCBC could make such a statement when his shares had been pledged elsewhere.

OCBC’s report to the CAD claimed that ‘in the course of our advisory assignment, a series of events had occurred which caused us to question the integrity of the representations which we have received’.

So where will Dr Soh and his family live?

He said: ‘I have two other properties but have not decided which one to move in to. The objective is to pay OCBC all my loans as all my three properties are mortgaged to it.

‘I am going to fight for my integrity and what I have lost. I will never be a quitter.’ ]]> http://www.singaporepropertywatch.com/uncategorized/key-player-in-jade-saga-set-to-sell-luxury-home/feed http://www.singaporepropertywatch.com/property/us-already-in-recession-says-buffett http://www.singaporepropertywatch.com/property/us-already-in-recession-says-buffett#comments Mon, 26 May 2008 07:14:03 +0000 admin http://www.singaporepropertywatch.com/property/us-already-in-recession-says-buffett BERLIN - THE United States is already in a recession, and it will be longer and deeper than what many people expect, United States investment guru Warren Buffett said in an interview published in German magazine Der Spiegel last Saturday.

He said the US was ‘already in a recession…perhaps not in the sense that economists would define it’ with two consecutive quarters of negative growth.

‘But the people are already feeling the effects,’ said Mr Buffett, the world’s richest man.

‘It will be deeper and last longer than many think.’

US economic growth has slowed dramatically in recent months, and a growing number of economists believe the world’s largest economy will experience a recession this year amid a housing slump and related credit crunch.

He said, however, that he would not stop investing in selected companies, adding that he remained interested in well-managed, German, family-owned companies.

‘If the world were falling apart, I’d still invest in companies,’ he said.

Mr Buffett also renewed his criticism of derivatives trading.

‘It’s not right that hundreds of thousands of jobs are being eliminated, that entire industrial sectors in the real economy are being wiped out by financial bets, even though the sectors are actually in good health.’

He also complained about the lack of effective controls over these derivatives instruments. ‘That’s the problem. ‘You can’t steer it. You can’t regulate it anymore. You can’t get the genie back in the bottle.’

REUTERS, AGENCE FRANCE-PRESSE

THE recent retreat of Hong Kong’s Hang Seng Index is drawing traders into fresh positions for its contracts.

Last Friday, the index plunged 329.05 points to 24,714.07 - down a total of 904.79 points, or 3.53 per cent, for the week.

However, a Societe Generale (SG) warrants report said: ‘Investors’ sentiment has improved, as negative news coming from the United States has abated and some recent news has been fairly positive.’

‘The index has risen by about 4,200 points from its low in mid-March,’ it noted.

Hang Seng contracts were the most active warrants in Singapore last year.

They accounted for $7.89 billion, or 28 per cent, of total warrants turnover.

Investors who are bullish about the Hang Seng could consider an SG call warrant expiring on Sept 29 with a strike level of 25,400 points.

Last Friday, this contract closed three cents down at 61 cents, with 120,000 units done.

In contrast, investors who hold a negative view of the index may consider a put warrant offered by the French bank.

This warrant also expires on Sept 29 and pays out if the index drops below 24,400 points. No trades were done last Friday.

SG has a neutral view of the short-term outlook for the Hang Seng.

Near-term resistance should be found around the 25,341 mark, while support should be seen at 24,253.

The index needs to break above 26,000 points before the technical outlook will turn positive.

This week, the Hang Seng will probably be driven by news of the US economy. Due out is data on new home sales, durable goods sales and consumer performance.

A market expert predicted that the trading range in the coming week would fall between 23,800 and 25,200 points.

A call warrant lets an investor buy into a stock or index at a pre-set price over a period of three to nine months.

A put warrant allows an investor to sell the stock or index at a pre-set price.

The lack of conviction in the market stems from the troubling inflationary pressures fuelled by record oil prices and Wall Street’s fall last Friday. There is not likely to be much uplifting news coming in either.

‘You know the saying: Sell in May and go away? Every month this year seems to be a May. It’s that bad,’ said a remisier.

‘It’s very stressful for us as well. Once you buy, you’re stuck. There’s not much to be made. We don’t want to see clients lose money.’

Another dealer expects more selling in the next one to two weeks.

One reason for the four straight days of losses suffered last week by The Straits Times Index (STI) might be that the market was compensating for having discounted at first the severity of the problems.

In the past few weeks, many analysts have cautioned investors against concluding over-optimistically that the credit crunch has ended. They also say the risks of a full-blown recession in the United States are growing by the day, because of the deepening housing crisis there and higher oil prices.

These concerns were largely shrugged off by the equity markets - until last week.

The STI’s recovery from its March lows, as well as recent recoveries in global stock markets, are ‘premised on the belief that the US financial system has stabilised after bold moves to restore liquidity’, said CIMB-GK research head Kenneth Ng in a report last week.

‘The euphoric moves in global equity prices and credit market spreads could be premature. We believe that a balanced strategy is warranted.’

CIMB-GK has lowered its earnings-per-share growth expectations for the STI to 7.1 per cent, down from 13 per cent, after weighing the impact of higher oil prices, slower profit recognition and deferred launches for property stocks, as well as increased competition for telecommunications companies.

The steady onslaught of grim financial news, coupled with more than 65,000 job layoffs worldwide since August last year, has already exacted a heavy toll on markets.

The mood has been soured further by Citigroup slashing its profit forecasts for Goldman Sachs and other institutions in view of lower trading and underwriting fees.

The market is also suffering from a drought in initial public offerings (IPOs), which is another sign of battered sentiment.

So far this year, IPO proceeds raised in the Singapore market have totalled only US$53.1 million (S$72.6 million), down 95 per cent from the same period last year, when a total of US$1.065 billion was raised, according to data compiled by Thomson Financial.

But it expects sentiment to recover and the Singapore market to chalk up a total of US$4.5 billion worth of deals over the remainder of the year - a rather optimistic scenario.

In the meantime, as prominent business leaders and analysts continue to debate the gravity of the world’s current financial woes, just beware that any bounce in equities might be nothing more than a classic bear market rally.

NOT LEFT OUT: OCBC’s preference share offer is likely to come with a lower dividend rate than the DBS securities. However, sources say retail investors will be able to take up OCBC’s offer. DBS’ recent $1.5 billion preference share issue was open only to institutional investors. — BT FILE PHOTO

OCBC Bank is planning to issue as much as $1 billion of securities known as preference shares - and retail investors may get a big bite of the offering, sources say.Unlike DBS Bank’s recent $1.5 billion preference share issue, which was open only to institutional investors, OCBC does not intend to leave small investors out in the cold.

Sources from investment banking circles told The Straits Times last Friday that OCBC was seeking approval from the Monetary Authority of Singapore, as well as the Singapore Exchange, for its preference share issue.

DBS priced its offering earlier this month at $250,000 per lot.

The low interest rate environment in Singapore is prompting investors, wary of putting cash into rocky share markets, to seek higher-yield instruments.

This is an ‘opportune time for banks like DBS and OCBC to tap the strong demand for relatively safe investment instruments with respectable yields, given the volatile equity markets and cash-rich institutional and retail investors out there’, said a banker.

Indeed, the attractive 5.75 per cent dividend for the first decade dangled by DBS ensured that the bank’s issue was greatly oversubscribed. Retail investors, however, could only look on forlornly.

The OCBC offering is likely to come with a lower dividend rate than the DBS securities. Still, the yield will ‘look great next to the 0.25 per cent rates on Singapore savings accounts’, said one source.

OCBC may be raising cash to strengthen its tier one regulatory capital base, which is used as a buffer against the loans it issues, said a banker not connected to the deal.

The capital-raising exercise will also help it to expand its loans book over the next few years in Singapore, as well as in China, Malaysia and Indonesia, he added.

As at end-March, OCBC had a tier one capital ratio of 12.2 per cent, while DBS had 9.2 per cent. United Overseas Bank (UOB) had 9.9 per cent.

‘Given that even OCBC is jumping in to raise capital when it already has the highest tier one capital ratio of the three local banks, it’s anyone’s guess whether UOB may also go down this route,’ said a market watcher.

If OCBC’s proposed preference share offering does get the regulatory green light, it will not be the first time that the bank has reached out to retail investors.

In 2003, it responded to feedback that less wealthy investors were eager to tap preference shares after an earlier offer it made to sophisticated investors.

OCBC priced a preference share offering in lieu of a special cash dividend to shareholders at about $1,000 per lot, with a 4.2 per cent dividend yield.

‘But the proposed OCBC offering is likely to be priced much higher than that,’ said a source, without giving details.

Retail investors are attracted to preference shares because of the relatively high dividend rates.

But bankers warn that the investment is not risk-free.Preference shares rank below bank deposits, interbank borrowings and other senior debts in terms of priority of payment.

So if a bank goes belly up, preference share holders are among the last to get paid. That is why preference shares pay dividend rates much higher than the rates on fixed deposits, which are relatively risk-free. ]]> http://www.singaporepropertywatch.com/property/ocbc-to-raise-up-to-1b-from-preference-share-issue/feed