Straits Times: High-end homes lure institutional investors
By Esther Teo
Institutional investors have become more active in the high-end home market, with the segment trading at a discount to its peak.
The Straits Times understands that 20 units at Paterson Suites were snapped up by Singapore-based investment fund Real Estate Capital Asia Partners (Recap) last month at an average price of $2,700 per sq ft (psf).
Recap is believed to have paid $118 million for the 20 four-bedroom apartments across the 2nd to 21st storeys with a total strata area of about 44,000 sq ft.
The price represents a discount of about a 10 to 15per cent on what the units would have cost individually, sources said.
The fund's substantial purchase has helped boost total sales at the high-end condo to 64 out of its 102 units as of last month. Bukit Sembawang's Paterson Suites was launched in 2007 and completed in the third quarter.
Property consultancy Savills is believed to have brokered the deal but could not be reached for comment yesterday.
The Straits Times previously reported that 38 of the 41 units sold in total at Paterson Suites last month were bought by a handful of private investors. The 41 units sold at a median price of $2,661 psf last month.
The 20 units that Recap bought were part of the 38 units sold.
Experts believe that increasing interest in the high- end apartment segment is likely to be due to prices of such homes languishing below their 2007 peaks, providing an opportunity for capital gain. Also, the Singdollar, which is expected to strengthen further, provides investors with an opportunity for currency gain, further sweetening the deal, they added.
Excerpt from Straits Times FRI, DEC 24, 2010.
Friday, December 24, 2010
Monday, December 20, 2010
Completing soon
The Ritz-Carlton Residences had it's 'topping out' ceremony yesterday where guests and staff of the developer, KOP Properties, gathered on the roof of the 36-storey development's penthouse to witness the pouring of the final bit of cement.
Leny Suparman, its chief executive, is upbeat about the prospects of Singapore's luxury residential market.
The 58-unit Ritz-Carlton Residences, located at Cairnhill Road, is about 40 per cent sold and units are now selling for about $3,300 per square foot (psf) each, Ms Suparman said.
Ms Suparman said that sales will pick up as the project nears completion, which is targeted for June next year: 'We are quite confident that sales will be brisk from now on and that the project will achieve the price that it deserves.'
The developer's other project, the 56-unit The Hamilton Scotts, is also about 40 per cent sold, Ms Suparman said.
KOP Properties is part of KOP Group, an integrated real asset investment company. KOP Group is 51 per cent owned by Dubai Group, a unit of Dubai Holdings.
Adapted from the Business Times, Tuesday, December 21, 2010.
Leny Suparman, its chief executive, is upbeat about the prospects of Singapore's luxury residential market.
The 58-unit Ritz-Carlton Residences, located at Cairnhill Road, is about 40 per cent sold and units are now selling for about $3,300 per square foot (psf) each, Ms Suparman said.
Ms Suparman said that sales will pick up as the project nears completion, which is targeted for June next year: 'We are quite confident that sales will be brisk from now on and that the project will achieve the price that it deserves.'
The developer's other project, the 56-unit The Hamilton Scotts, is also about 40 per cent sold, Ms Suparman said.
KOP Properties is part of KOP Group, an integrated real asset investment company. KOP Group is 51 per cent owned by Dubai Group, a unit of Dubai Holdings.
Adapted from the Business Times, Tuesday, December 21, 2010.
Friday, December 17, 2010
Straits Times: Europe's stiff rules spell bonus for Asia
By Gabriel Chen
Bank talent, even banks, may be driven to Singapore and Hong Kong by moves to curb bonuses.
Bankers reckon the likes of HSBC and Standard Chartered may want to move their corporate headquarters to Asia to avoid applying the rules to their large numbers of employees located outside Europe.
*Note: Excerpt only, please refer to www.straitstimes.com for the complete article.
This will certainly benefit Singapore and Hong Kong. Moreover, the personal income and corporate tax rates are far more attractive than the European countries. Attracting these banks here will also give a boost to GDP and luxury-end property prices. Prices of these properties in Singapore still have some catching up to do with respect to other financial centers like London and New York. -Farrand
Sunday, December 12, 2010
London Bankers to Spend $1.6 Billion of Bonus Payout on Homes
Source: Bloomberg
Dec. 10 (Bloomberg) -- London bankers and other financial- services employees will spend about 1 billion pounds ($1.6 billion) of their 2010 bonus money on homes in the U.K. capital, 17 percent less than last year, Savills Plc said.
The purchases may not stop prices of London luxury homes from falling next year, though the drop probably won't exceed 1 percent, Savills said in a statement. Values rose about 2 percent this year, helped in part by approximately 1.2 billion pounds of 2009 bonus money, the broker estimates.
This year's payments won't trigger a "measurable price rise as seen in the past," Yolande Barnes, head of residential research at the London-based property adviser, said in the statement. "Rather, we anticipate that bonus money will be fed into the market over a longer time period."
Bonus-earners typically account for half of the buyers of London homes costing more than 1 million pounds, according to Savills. Record payouts in 2006 and 2007 -- which the Centre for Economics & Business Research says totaled 11.5 billion pounds each year -- sent property values surging to all-time highs in neighborhoods such as Chelsea, Belgravia and Kensington.
The CEBR expects bonuses for the 300,000 financial-services workers in London to total 7 billion pounds before taxes in 2010, about 5 percent less than in 2009, according to Savills's report.
Companies have slashed bonuses to weather the global financial crisis. They're also now deferring payments or offering shares in response to pressure from politicians and regulators. Since April, the tax rate for incomes exceeding 150,000 pounds increased to 50 percent from 40 percent.
Deferred Payments
"General caution and the method and timing of the payouts mean that only a portion will be invested in property," Barnes said. That means home sales in the second quarter, which is usually when bonuses for the previous year get paid, are unlikely to jump, she said.
Though the amount of 2010 bonus money expected to be spent on property has shrunk, deferred bonus payments from previous years or money from increased salaries may also go into real estate, Barnes said.
Lindsay Cuthill, head of Savills's southwest London sales offices, said the broker has started receiving the first offers from purchasers anticipating bonuses after viewings in November increased fourfold from October.
"We're seeing buyers circling properties" in the 2.5 million-pound price band, he said.
Battersea, Chiswick
Changes in bonus pools have the most effect on real estate in southwest London. Owner-occupiers employed in banking and financial services tend to favor neighborhoods such as Battersea, Wimbledon and Chiswick because of the relatively high proportion of family homes and good schools.
Prices in this part of London rose 12 percent in the third quarter from a year earlier, the biggest gain in Britain, Savills estimates. Prime property here costs an average of about 1.3 million pounds, less than the 2 million pounds or more needed to buy a similar home in central London.
Bonuses have been less of a driving force for prime residential property values in central London. Overseas buyers have been lured to those neighborhoods by the pound's weakness and price declines during the height of the financial crisis.
Savills estimates that 60 percent of prime central London property purchases are made by people outside the U.K.
Competition for a limited number of luxury homes for sale has limited the price decline since the peak to 5 percent, said Liam Bailey, head of residential research at competitor Knight Frank LLP. The number sold in the second and third quarters was 30 percent less than the same periods in 2007.
The purchases may not stop prices of London luxury homes from falling next year, though the drop probably won't exceed 1 percent, Savills said in a statement. Values rose about 2 percent this year, helped in part by approximately 1.2 billion pounds of 2009 bonus money, the broker estimates.
This year's payments won't trigger a "measurable price rise as seen in the past," Yolande Barnes, head of residential research at the London-based property adviser, said in the statement. "Rather, we anticipate that bonus money will be fed into the market over a longer time period."
Bonus-earners typically account for half of the buyers of London homes costing more than 1 million pounds, according to Savills. Record payouts in 2006 and 2007 -- which the Centre for Economics & Business Research says totaled 11.5 billion pounds each year -- sent property values surging to all-time highs in neighborhoods such as Chelsea, Belgravia and Kensington.
The CEBR expects bonuses for the 300,000 financial-services workers in London to total 7 billion pounds before taxes in 2010, about 5 percent less than in 2009, according to Savills's report.
Companies have slashed bonuses to weather the global financial crisis. They're also now deferring payments or offering shares in response to pressure from politicians and regulators. Since April, the tax rate for incomes exceeding 150,000 pounds increased to 50 percent from 40 percent.
Deferred Payments
"General caution and the method and timing of the payouts mean that only a portion will be invested in property," Barnes said. That means home sales in the second quarter, which is usually when bonuses for the previous year get paid, are unlikely to jump, she said.
Though the amount of 2010 bonus money expected to be spent on property has shrunk, deferred bonus payments from previous years or money from increased salaries may also go into real estate, Barnes said.
Lindsay Cuthill, head of Savills's southwest London sales offices, said the broker has started receiving the first offers from purchasers anticipating bonuses after viewings in November increased fourfold from October.
"We're seeing buyers circling properties" in the 2.5 million-pound price band, he said.
Battersea, Chiswick
Changes in bonus pools have the most effect on real estate in southwest London. Owner-occupiers employed in banking and financial services tend to favor neighborhoods such as Battersea, Wimbledon and Chiswick because of the relatively high proportion of family homes and good schools.
Prices in this part of London rose 12 percent in the third quarter from a year earlier, the biggest gain in Britain, Savills estimates. Prime property here costs an average of about 1.3 million pounds, less than the 2 million pounds or more needed to buy a similar home in central London.
Bonuses have been less of a driving force for prime residential property values in central London. Overseas buyers have been lured to those neighborhoods by the pound's weakness and price declines during the height of the financial crisis.
Savills estimates that 60 percent of prime central London property purchases are made by people outside the U.K.
Competition for a limited number of luxury homes for sale has limited the price decline since the peak to 5 percent, said Liam Bailey, head of residential research at competitor Knight Frank LLP. The number sold in the second and third quarters was 30 percent less than the same periods in 2007.
Thursday, December 2, 2010
No signs of hot money inflows yet
Due to the developed counties perusing an easy monetary policy, many expects the hot money to flow into Asia and drive up asset prices. However, in the recent UBS research report:
"Capital inflows in to Singapore, while rising, are far from levels that cause concern. So far, base money growth is muted, and inflows appear concentrated in the bond market. Equity market volume is up 43% QTD from 1H10, but remains 15% below the average in 2H07. Foreign purchases of residential homes are 22% of the total, in line with the 10-year historical average (see chart below)."
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| Foreign Purchase of Singapore Properties. (Reproduced from UBS Investment Research: Singapore - Outlook 2011) |
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