Industrial Property Costs Move Singapore into 5th Place

A Business Times Article reported "SINGAPORE has emerged as the world's fifth most expensive location for industrial property occupancy costs in the latest 2009 ranking by Cushman & Wakefield, up from 12th position in the 2008 ranking"

The article quoted Cushman & Wakefield Singapore managing director Donald Han saying: 'Singapore's rise up the world ranking is partly due to countries which used to be more costly moving down. In terms of rental growth, Singapore remained stable in 2008.

The article noted that Singapore's economy is export driven so forecast for he next 12 months is a dramatic reduction in demand. This reduction will no doubtly effect costs.

The next 9 to 12 months will definitely be something to watch in all segments of the property market. Articles in the past have sited take rates as steady but near the mid part of 2009 there will be several projects that will be releasing their units to their buyers which in turn will flood the market with rentals and sales. Keep your eyes open, the deals are coming!!!

Recent Headlines Here in Singapore

Mohamed Sultan Road building sold for $35.8m- A member of the family that developed International Plaza has used his company to buy the freehold Le Mercier House on Mohamed Sultan Road. It is reported by the Business times here in Singapore. The buyer's company also owns the building right next door. Analyst quoted in the article say
hat the $35.8 million sale price works out to about $900 per square foot per plot ratio based on a 2.8 plot ratio - hence a maximum GFA of about 39,000 sq ft.

Savills pre-tax profit slides 61% to £33.2m- It is reported by the Business Times that
The London-listed agent, which has more than 200 offices and affiliates worldwide, said that a collapse in real estate transaction volumes had forced it to recommend a reduced final dividend of 3 pence per share, slashing its full 2008 dividend to 9 pence versus 18 pence in 2007. Lack of inventory is also contributing to the drop in profit. Many property on the market are the distressed variety but as these go the consumers that can are thinking they should hold onto their homes instead of selling.

In the new US property market, old guys are hot- Out of New York the reports are experienced but retired agents are coming back to the front in property selling. Many of the property specialist that currently practice real estate have never dealt with a declining market so these veterans of past crisis will be the go to agents for a while. Business Times

I still can't get it out of my head that if anyone has cash that they don't need currently to live on, should look into investing into a long term property investment vehicle. It would be tragic to have this type of crisis occur in the near future but all past records indicate that it should not happen again at least in our lifetime. Opportunity is Knocking!!!!

Comment on "Don't Buy, Don't Sell"

Photo by R. Phipps Copyrighted all rights reserved





Read the article yourself and then you can decide for yourself if I am close to being right
http://www.straitstimes.com/Money/Story/STIStory_311033.html

Though I have not agree very often to the Straits Times since my arrival, when it occurs I have to make it a big deal.

Today is not that day. Yes this report had a lot to say about when to invest and when not to invest but where were these experts about 6 to 8 months ago? Hind sight is 20/20 is the quote that comes to mind.

My thoughts about investing in real estate are simple. If you have money to invest right now then look for the right deals. First look for the right Location then check the Location again then leave and come back and take a look at the Location again. Once you see it is in the right location then start thinking about the purchase.

Do you want to know where to buy? Send me an email and I will tell you. There are some great deals for those investors coming in the next few months. Times like this only come around about every 20 to 30 years.

Signs Singapore Property Market is Slowing

(Singapore) In a recent article by the Business Times published in Singapore, signs of Singapore's slowing property market are evident. With research by URA and DTZ Research, third quarters numbers reflect a continued slow down. A slide in sub-sales and foreign buyers are the first two signs noted. The third sign is the rise in HDB upgraders.

A couple of areas to clarify before we forward: HDB is the Housing Development Board who offers below market homes (condos) to Singapore Citizens and permanent residents. This attributes to Singapore's high home ownership. The URA is the government agency called Urban Redevelopment Authority. They track sales and do most of the planning for growth in Singapore. DTZ is a property consultancy.

DTZ's analysis of caveats for private home purchases shows that total sub-sales of non-landed private homes fell 8 percent to 473 units in Q3 from the previous quarter. Sub sales also accounted for a smaller 13 percent share of purchases of non-landed private homes in Q3, compared with 16 per cent in Q2.

Sub sales of high-end condos/apartments slowed down even more in Q3 2008. The number of sub sale purchases involving units priced at least $1,000 psf fell 24.2 per cent quarter-on-quarter to only 213 transactions, accounting for 45 per cent of overall sub sales of non-landed private homes in Q3, against 54 per cent in Q2 2008.

The number of foreign buyers (including permanent residents) of private homes (both landed and non-landed) slid 6 per cent quarter-on-quarter to 903 in Q3. Also, these buyers made up 22 per cent of total private home deals in the quarter, down from 25 per cent in Q2.

Some of the central areas who experienced strong sales throughout the last year and a half saw continued lower numbers. The Sail at Marina Bay got the strongest subsale interest in Q3, with 30 deals (compared with 34 in Q2). The median subsale price for the project slid 6 per cent quarter-on-quarter to $1,719 psf, following a 14 per cent slide in Q2.
Median subsale prices also fell 3 per cent for Park Infinia at Wee Nam to $1,380 psf, The Esta (slipping 5 per cent to $910 psf) and City Square Residences (down 6 per cent to $960 psf).

The article does a good job giving us the figures but it fails to adequate job of spelling out future trends. It glosses over that it will continue slides but there will be pockets where the numbers will spike. Investors need to be aware that these numbers really give us an indication of what is to come. The trends take about six months to work their way into the buying and selling of property. So I will bet my last dollar, not worth that much these days, that the numbers will be considerably worse by Q2 of 2009. Two steps forward and three steps back for the information forecasting. When the paper relies on an agency (DTZ) for it commentary then of course they will protect their current production. Please disagree with me as I have been watching the trends for three years and it seems to be deeper than every in this hole.

Is this the End? Singapore Property Going Down?

Singapore property prices are headed down. Since I arrived in Jan 08, I saw signs that indicated that the market had gone through the same steep climb that the US market had gone through. Singapore developers sold whole projects within hours of launching. Buyers were on fire and sellers were salivating.

For the past few years Singapore property market mirrored the market increase the US experienced in all its' major cities during 2003 to 2006. Here the real climb began at the end of 2005 and continued until end of 2007.

When I arrived in January 2008, I spoke to several agents who would tell me that the Singapore market could never be affected by a downturn in the US. Well, eleven months passed and two declining quarterly reports later, we finally get the following report from the Straits Times. Read and please comment:

Source: Straits Times
Nov 27, 2008

Mah sees softening of property prices
Future movements will depend on how industry adjusts to conditions
By Michelle Tay

PROPERTY prices will inevitably soften and demand will weaken amid slower economic growth, National Development Minister Mah Bow Tan said yesterday.
Private housing prices fell 2.4 per cent in the third quarter, and further price movements will 'depend on the severity of the economic slowdown'.
Mr Mah was speaking at the 49th anniversary dinner of the Real Estate Developers' Association of Singapore (Redas) at the Shangri-La Hotel.
He said future price movements will also depend on the 'ability of the industry to make adjustments in response to the changes in economic conditions'.
Meanwhile, Mr Simon Cheong, Redas president and chief executive of upscale residential developer SC Global Developments, said he expects construction prices to ease off with the trend of falling oil prices and easing inflation.
'Current pressure on construction services (will) begin to moderate once the lag in demand kicks in with a slowdown in new commitments by developers,' he said.
Mr Mah also addressed recent moves by Redas to present market analysts with other sources of market data after they had drawn bearish conclusions about the industry recently.
Redas had said the analysts' findings were based on official numbers from the Urban Redevelopment Authority (URA), which they felt are too general. Reports said the industry body met property analysts from local and foreign research firms two weeks ago to advise them that URA data may not give an accurate picture of specific sections of the market.
Mr Mah said the Government has a vital role in guarding against 'irrational market behaviour, such as excessive speculation, that is not in sync with economic fundamentals', to ensure the long-term stability and smooth functioning of the property market.
Mr Cheong agreed: 'The market is at best currently fragile and nervous. Market stability is important to prevent a widespread decimation of asset values...Redas will do its best to work closely with the Government to provide timely market feedback to facilitate a timely and effective response that the property market needs.'
But there are limits to what the Government can and should do, said Mr Mah. For one thing, it cannot work against market forces and try to prop up property prices artificially.
Mr Mah explained: 'Such efforts are not sustainable and will not be beneficial to the health of the property market in the long run. Any measure seen to be knee-jerk or excessive might even weigh market sentiment down further...It is in our interest to ensure that the property prices move in line with economic fundamentals as it affects home ownership, asset values, retirement savings and other sectors of the economy.'
But Mr Cheong said: 'Only with confidence will demand return to the market.' He advised Redas members to 'take this opportunity to do our house cleaning, improve our product and get ready for the next upturn'.
'Pricing alone does not lead to sales volume. Sentiment and confidence lead to sales volume.'
michtay@sph.com.sg
ON GUARD
'We cannot work against market forces and try to prop up property prices artificially...It is in our interest to ensure that the property prices move in line with economic fundamentals as it affects home ownership, asset values, retirement savings and other sectors of the economy.'
Minister Mah Bow Tan

Global Business in Real Estate

CULTURALLY CORRECT
Words Matter
In early November media outlets worldwide, including the Associated Press and BBC News, reported on the Bournemouth Council's "plain language" policy, which lists 19 Latin words and phrases to be avoided in official documents, e.g., bona fide or ad hoc, and suggested replacements to minimize confusion. Bournemouth is a town of 170,000 on England's south coast. The news was reported as a "ban," riling language aficionados outraged by what was equated by some as "the linguistic equivalent of ethnic cleansing." The Bouremouth Council countered inaccurate reporting, stating there had been no "banning" of words or phrases; only advice to staff to encourage "plain, appropriate and easily understood language." Much ado about nothing? Perhaps not. There's a lesson here for REALTORS® working with buyers and sellers for whom English is not a first language. Review your contracts to identify words and phrases that may not be easily understood. If appropriate, change them to be more clear. If legal council requires the language to remain as is, develop a "reader's guide" to the contract to spell out more clear definitions and/or to provide examples for key terms. If you deal frequently with customers speaking one or two languages other than English, have your contracts professionally translated.


Vietnam: A Market to Watch


In May Vietnam's government passed a resolution (effective January 1, 2009) that permits foreign individuals and organizations who invest directly in the country and those hired as executives by Vietnamese or foreign-invested enterprises to purchase and own apartments in Vietnam. The legislation will be implemented on a trial basis for five years. Read about specific opportunities and limitations of the law. Many Americans know little about this country beyond war images from the 1960s and 1970s. In 2005 NAR published an article on the Vietnamese real estate market that highlights the dramatic changes in the market economy since the Vietnam War. Even since the 2005 article, the country has attracted significant foreign investment. The Ministry of Planning and Investment (MPI) reports a GDP growth rate of 8.23% in 2006 and 8.4% in 2007. While not immune to the current economic crisis and realizing a slowed growth rate for 2008 with GDP projected at 6.5 - 7%, MPI projects a stabilizing economy in 2009 and to regain growth impetus in 2010. REALTORS® working with investors with an eye on Asia will have greater opportunities come January 1. Learn more about this growing market, including tips for conducting business.

Source: NAR International Newsletter