Global property investment up 7%

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Jul 13, 2011 – PropertyGuru.com.sg
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Global direct property investment volumes in the second quarter totalled more than US$101 billion, an increase of seven percent from Q1 2011 and a whopping 47 percent from Q2 2010, according to latest research conducted by Jones Lang LaSalle (JLL).

“The upswing in activity continues, with exceptional gains in North America, which was late to the recovery, driving that region to the top spot in terms of volumes,” said Arthur de Haast, Head of the International Capital Group at JLL.

“Looking ahead, debt concerns in some advanced economies and the risk of overheating in some emerging markets will induce caution and careful asset selection, adding to a natural deceleration in the recovery. Nevertheless, the pipeline of product in the market gives us confidence that full-year volumes will reach our forecast of US$440 billion.”

The highest property investment volumes came from the US, while volumes for the region rose 56 percent from Q1 2011 to US$49 billion.

Meanwhile, the investment volumes in Europe, the Middle East and Asia (EMEA) region, largely stood still in Q2 2011 at US$34 billion.

Asia Pacific saw a 30 percent decline in investment volumes compared with the last quarter but still a decent increase year-on-year to US$18.5 billion. The massive natural disasters in Japan, the region’s largest real estate investment market, worsened a normal seasonal slowdown.

“Our forecast calls for a further US$240 billion to transact in the second half. There are several supportive factors to note: Japan will rebound from March’s natural disasters; there is additional bank product coming up for sale in Europe and the United States, some of it very good quality; and the large emerging markets appear to be absorbing the impact of regulatory measures without a ‘hard landing’,” said Paul Guest, JLL’s Global Capital Markets Research Director.

“Nonetheless, the rate of growth has started to decelerate and this will continue, particularly as central banks continue to tighten around the world.”

To contact the journalist, you may send your message to editor@propertyguru.com.sg

Big banks compete to offer best home loan rates

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Jul 13, 2011 – PropertyGuru.com.sg
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Two Singapore banks have been offering home loan rates for as low as 0.2 percent on selected properties.

Some analysts said the moves by the two banks – United Overseas Bank (UOB) and DBS Bank – reflect intensifying competition in the mortgage market to maintain high loan volume amid uncertainty.

According to a Straits Times report, the two banks offered mortgage rates set at two commonly used benchmark interest rates, which are the Singapore interbank lending rate (Sibor) and swap offer rate (SOR).

The three-month Singapore dollar Sibor has hit a record low of 0.438 percent since January, while the three-month SOR has moved between 0.189 percent and 0.3 percent since April. It now stands at 0.21 percent.

The new record low interest rates are usually imposed for a promotional period like the first year, after a higher rate is applied.

Compare a SOR plus zero package that increases to SOR +1 percent after three years and a flat SOR +0.7 percent package to a S$1 million 30-year loan.

Vinod Nair, Chief Executive of website Smartloans.sg, said a borrower paid a total interest of S$5,430 for the first three years under the first package compared with S$25,557 for the same package. However, the borrower would actually pay less using the second package for a 30-year loan tenure.

Dr Chua Hak Bin, economist at Bank of America-Merrill Lynch, said the latest trend could be due to the lower mortgage applications and the “intensified competition among banks to maintain mortgage loan volumes.”

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S’pore ranks 8th most expensive expat city

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Jul 13, 2011 – PropertyGuru.com.sg
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Singapore has been ranked the eighth most expensive city for expats globally, overtaking Hong Kong, which took the ninth spot, according to a survey conducted by Mercer.

The human resource firm said the strengthening of the Singapore dollar has pushed the country up three places to the top 10 list of most expensive cities for expats worldwide. The cost of housing, which is the biggest expense for expats, also plays a significant role in determining the cities’ ranking, it added.

According to the survey, Luanda, Angola’s capital city, remained the world’s most expensive city for expats, with Tokyo in second spot.

Meanwhile, only three European cities made the top 10 list. Moscow, which was ranked fourth globally, remained the most expensive city in Europe, followed by Geneva and Zurich in the fifth and seventh spot respectively.

Tokyo remained the costliest city in Asia, followed by Osaka, Singapore and Hong Kong in second, third and fourth place respectively.

Australian cities also witnessed the most dramatic jump in the rankings, as the local currency grew nearly 14 percent against the US dollar. Sydney landed in 14th spot, while Melbourne rose from 33rd to 21st place, and Perth climbed 30 places to reach the 30th spot.

“Multinational companies have long understood the competitive advantage of a globally mobile workforce, though the enduring challenge is to balance the cost of their expatriate programmes with the needs for foreign talent,” said Phil Stanley, a principal at Mercer.

“Currency fluctuations, inflation, housing costs, income tax rates and the cost of international schools are all factors that influence the cost of living for expats. It is essential that employers understand their impact, for cost-containment purposes but also to ensure they retain talented employees by offering competitive compensation packages.”

The Mercer cost of living survey covers 214 cities globally and measures the relative cost of more than 200 items in each city, including housing, clothing, food, household goods, entertainment and transport.

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Peace Centre site up for en bloc again

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Jul 12, 2011 – PropertyGuru.com.sg
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Peace Centre and Peace Mansion at 1 Sophia Road have been put up for collective sale for the third time, at a reduced asking price of S$675 million.

This works out to around S$1,306 psf ppr, including an estimated S$145 million upgrading premium to top up the existing lease to a 99-year tenure, subject to approval from the relevant authorities.

The 40-year-old property comprises a part seven and part 32 storey commercial and residential building respectively. It sits on a 7,118 sq m prime commercial plot and can potentially be redeveloped into a commercial building with a gross floor area (GFA) of 58,329.371 sq m, exceeding the permissible plot ratio of 4.2 under the Master Plan 2008.

“Given its prominent location, the site offers an attractive opportunity to transform it into a bustling mixed used development comprising retail, entertainment, office, medical suites, SOHO or even service apartments (subject to approval) that can complement and synergise with the institutional, arts and entertainment, museums, residential uses in the vicinity,” said Suzie Mok, Director of Investment Sales at Savills Singapore, which is marketing the property.

1 Sophia Road is prominently located at the junction of Sophia Road and Selegie Road, and enjoys double frontages of approximately 175 m. It also has a captive market of residents from new prime residential developments, such as 8 @ Mt Sophia, Suites @ Orchard, Sophia Residences and Parc Emily.

“1 Sophia Road is unique as it is conveniently located with easy access to key districts such as the Central Business District, Marina Downtown and Orchard Road shopping belt,” said Mok.

The new development at the site will be the largest commercial property located along the streetscape comprising Parklane Shopping Centre, PoMo and Wilkie Edge.

“The outlook and demand for commercial space in the city centre remains strong and the developer may also leverage on the strong rebound in the office segment to develop a quality commercial block to cater to businesses that do not require to have a presence in the CBD.”

The tender for the site will close on 3 August 2011.

To contact the journalist, you may send your message to editor@propertyguru.com.sg 

New conveyancing measures will start on Aug 1

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Jul 11, 2011 – PropertyGuru.com.sg
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The Ministry of Law has announced that new measures aimed at safeguarding the conveyancing of money will be implemented starting 1 August 2011.

The new measures will protect clients’ money and prevent lawyers from absconding with money from property transactions.

Under the new measures, lawyers will no longer be allowed to receive and hold conveyancing money in their clients’ accounts. Instead, the money must be held in a conveyancing account in banks appointed by the Ministry of Law. Withdrawal or pay-out of such money will require two-party authorisation.

Violation of the rule will result in a fine of up to S$50,000, imprisonment of up to three months, or both.

According to an AsiaOne report, the banks authorised to hold conveyancing accounts include Overseas-Chinese Banking Corp Ltd, Bank of China Ltd, The Bank of East Asia, United Overseas Bank and DBS Bank Ltd.

In addition, the Singapore Land Authority (SLA) has set up a new electronic Payment Instruction (ePI) service to provide a better and more secure environment for lawyers to initiate pay-out instructions and counter-sign digitally, as well as for the appointed banks and SLA to securely process and retrieve instructions.

To contact the journalist, you may send your message to editor@propertyguru.com.sg