Business Times' High Net Worth Property Special - Sept 26, 2008

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Published September 26, 2008

PROPERTY

S'pore prime areas beckon

High-end homes in these exclusive areas appeal to foreign buyers whose numbers have risen over the years

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IN Singapore, Districts 9, 10 and 11 are traditionally recognised as prime residential areas.

Districts 9 and 10 are located around the main shopping belt of Orchard Road (Orchard, Cairnhill, River Valley, Ardmore, Holland Road, Tanglin), while District 11 is situated to the north of Orchard Road, in the Bukit Timah, Watten Estate, Novena and Thomson areas.

Since 2005, District 1 (the financial district) and Sentosa Cove have been new additions to Singapore's prime residential market.

While offering a much-admired lifestyle like no other in Singapore, developments in these prime areas offer an exclusive sanctuary for an individual or family, amid the bustle of city life.

Ranked high on appeal, prices of homes in these areas also come with a hefty price tag. It is not surprising that the developments surrounding or within the Orchard Road area have been some of the most expensive properties in Singapore. With Orchard Road renowned as the epicentre of Singapore's shopping and entertainment district as well as upcoming malls that seek to titillate one's senses, the heart of the 1,650ha urban landscape of the Central Area is set to undergo a slew of changes.

On the same note, older prestigious residential projects in the area are usually situated on a five-minute drive from Orchard Road, typically nestled in quiet enclaves. This has changed over the years as we see newer projects planned to be visually apparent from Orchard Road itself compared to those built in the 1980s.

Likewise, Orchard Road is gradually being transformed with new malls such as Orchard Central and Ion Orchard set to enhance the shopping scene. Not only has this led to an alteration of Orchard Road's urban landscape, but it has also enhanced the nature of high-end developments in Singapore. While still able to furnish a level of opulence, exclusivity and uniqueness, high-end developments are now embedded into the flurry of urban activity, with Orchard Road as its backdrop.

To buttress these claims, the large number of collective sales in recent years would eventually contribute to the remodelling of high-end urban areas.

From 2005 to 2007, a total of 116 residential projects in District 9,10 and 11 were sold in collective sales for re-development. Given this substantial number, and with freedom to re-develop, older residential buildings in the high-end districts would increasingly give way to modern and taller apartment blocks that feature modern architectural designs with complete range of recreational facilities.

Furthermore, some of the new high-end condominiums also offer the luxury of space as seen in developments in the Ardmore Park and Draycott area where the units are larger than 200 sq m.

High-end luxury homes in the traditional prime districts, with their enduring charm, have always been highly regarded by those with large coffers and a distinct taste for the luxuriant high life. With chicly designed homes that offer a lush and lavish lifestyle, residential developments in these areas have drawn the interest of both locals and foreigners alike.

Over the past three years, the number of homes bought by foreigners has risen from around 3,600 in 2005 to about 9,100 in 2007. The proportion of foreign buyers islandwide for all landed and non-landed homes stood at 25.6 per cent as at 2Q 2008, a marginal fall of 2.3 percentage points from the previous quarter.

Over the last 13 years, the proportion of foreigners that purchased all types of private homes (excluding executive condominium units) islandwide reached its peak in 2007 when this figure registered at 25.7 per cent. Regardless of this slight slackening in terms of the proportion of foreign buyers in Singapore, the 25.6 per cent registered in 2Q 2008 is still 3.6 percentage points higher than the five-year quarterly average figure.

Foreign buyers originate from various continents and based on 1H 2008 statistics, the majority, 17.7 per cent, were from Indonesia. Not far behind, Malaysians also formed a significant proportion at 17.6 per cent followed by those from India and China. Farther across oceans and land masses, buyers from the UK and the US are also evident in Singapore's private residential property market with a proportion of 8.7 per cent and 2.3 per cent respectively as at 1H 2008.

Most foreign home-buyers and investors would prefer to acquire a condominium unit in the prime districts, and figures indicate that for District 9, 10 and 11, the proportion that has purchased both landed and non-landed homes in these two districts was a considerable 35 per cent in 2007.

Driving forces behind foreigners' interest in residential properties here can stem from a multitude of reasons. One major compelling reason is the efficiency, safety and open business environment in Singapore. There are also Singapore government policies in place to welcome foreigners to live here.

The service industry, especially the financial services segment has seen robust growth over the past decade. This has seen an increase in high-paying jobs, which have attracted many highly skilled foreigners to work in Singapore.

Coupled with various other socio-political reasons, the cosmopolitan city-state of Singapore is endless in its appeal. Not only was Singapore ranked as the best place for Asian expatriates to reside in earlier on in the year, but a recent poll also highlights that expatriates have rated Singapore to be the best place in the world to live, especially in terms of the quality of accommodation. With the introduction of the two integrated resorts and added casinos to boot, the F1 night races and a host of other initiatives, Singapore is also gradually becoming a more interesting place to work, live and play.

In addition, well-heeled investors prefer real estate in the prime districts because property prices in these areas would always be among the first to increase during a property boom. Moreover, investment in Singapore's real estate is deemed to be relatively low risk in Asia.

With prime residential districts timeless in their appeal, it is still not too late to buy a property in these swanky, plush neighbourhoods within a city that is becoming more enchanting and cosmopolitan. An urban oasis in Singapore's private residential landscape, these prime areas offer a splendour and lifestyle like no other.

This article is contributed by Knight Frank Consultancy & Research Dept

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Published September 26, 2008

PROPERTY

Developers tap starchitects for added cachet

By ARTHUR SIM


THE phenomenon known as the starchitect has been around for a while but it was only after 1997 - when the Guggenheim Museum in Bilbao, Spain, became an international hit - did these architects become global celebrities.

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Star power: Wing Tai has commissioned two starchitects - Jean Nouvel and Toyo Ito - to design Le Nouvel Ardmore (above) in Ardmore Park and Belle Vue Residences in Oxley Walk, while CapitaLand has signed on Zaha Hadid to design Farrer Court Villas, its new condominium development at Farrer Rd
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The Guggenheim Museum in Bilbao was designed by the eminent American starchitect Frank Gehry. While the titanium-clad museum is spectacular, it was the fact that the museum had such a huge multiplier effect on the economy of the little seaside town that got many municipal governments (and some developers too) excited.

Within the first three years of opening, it was reported that the museum was receiving almost one million visitors a year, generating about US$130 million for the town's economy, and helping the local government collect over US$20 million in taxes.

This multiplier effect has since been dubbed the Bilbao effect and governments and developers alike have been scrambling to sign up starchitects in hopes of replicating it.

Singapore came close to having a Frank Gehry designed development after CapitaLand signed him up to design their proposal for the integrated resort at Sentosa.

CapitaLand did not win but it never lost sight of the power of starchitecture. Earlier this year, CapitaLand announced that it had signed on Zaha Hadid to design its new condominium development at Farrer Road. And in the universe of starchitects, few are more stellar than Ms Hadid.

Patricia Chia, CEO of CapitaLand Residential Singapore added: 'In a challenging market where homebuyers are faced with many choices, it becomes even more important to create a distinct point of differentiation for our developments.'

Ms Hadid is certainly a good designer but developers now also appreciate the cachet a starchitect's name carries. 'We believe that Zaha's signature style and international brand position, together with the site's many attributes, will provide a strong competitive edge for us when we launch the project in 2009,' added Ms Chia.

Keppel Land also snagged a starchitect Daniel Libeskind for Reflections at Keppel Bay back in 2006 when 'iconic architecture' was the buzzword of the day.

Keppel Land general manager (marketing) Albert Foo added: 'With globalisation, consumers are now well travelled and informed, and have over time, developed a taste for fine living. As such, the home has gone beyond brick and mortar to factor in lifestyle, luxury, prestige and unique product offering to appeal to these discerning customers.'

Of course, developers know they have to pay a premium for starchitects' services. In 2006, Mr Libeskind himself said: 'There are premiums. And if it is worth it, it is worth it.'

Some starchitects are more savvy at parleying their names. Philippe Starck, who has pop-star status, co-founded the design, marketing and branding company yoo Inspired by Starck and has Heeton Holdings as its first client in Singapore. For Heeton, getting Starck on board for its new Grange Road development also helps their own brand.

Heeton chief operating officer and executive director Danny Low said: 'It is a fantastic opportunity for us to collaborate with the world famous Philippe Starck and this development will further enhance Heeton's profile both locally and regionally.'

Mr Low said that there was definitely a price premium over local designers but he is confident that it will pay off. 'From their previous track record, the Philippe Starck brand has been able to achieve premiums in the range of 10-25 per cent, and selling 20-30 per cent faster than other competitive developments launched at the same time,' he added.

Far East Organization (FEO) is no stranger to starchitects either, having worked with the likes of Arquitectonica, and more recently Rem Koolhaas' OMA.

Chia Boon Kuah, COO (Property Sales) at FEO, added that most of their luxury home buyers have homes in other international cities. 'With Singapore staging itself to be a vibrant global city attracting international businesses and talent, there will be demand for world-class accommodation complete with top notch services and facilities,' he added.

But the partnership with international architects is just one aspect of the value-add that FEO's luxury developments bring to our buyers, Mr Chia said.

Mr Chia also believes that interest in brand-name architecture and design is not a new thing, but he noted: 'Internationally, homes designed by famous architects in the past remains one of the most coveted addresses.'

Upping the ante is Wing Tai which has commissioned not one but two starchitects - Jean Nouvel and Toyo Ito - to design Le Nouvel Ardmore in Ardmore Park and Belle Vue Residences in Oxley Walk.

Looking at the designs in more detail reveals that regardless of their star status, starchitects do deliver that certain je nes sais quoi.

For Le Nouvel Ardmore, Mr Nouvel somehow manages to weave living bamboo into the 33-storey facade of the building while Mr Ito sculps organic spaces out of glass and concrete to mimic the branches of trees for Belle Vue Residences.

Is it art or architecture? With starchitects, you get both.

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Published September 26, 2008

PROPERTY

Pulsating Marina Bay

This new prime area for living, working and playing will become even more vibrant once Marina Bay Sands is ready, writes HAN HUAN MEI


FOR a long time, when the question was asked, 'where do wealthy Singaporeans live'? The answer would either be 'the bungalows in Tanglin, Bukit Timah and Holland Road' or 'the luxurious apartments in Orchard, Cairnhill and Grange Road'. This is set to change.

While these prestigious addresses evolved through Singapore's history over several decades, two new prime residential areas have emerged in recent times as a result of brilliant land use planning based on the government's vision of lifestyles in the new millennium. These are the New Downtown and Sentosa Cove.

The properties in the traditional prime residential areas are largely freehold estates, but those in the New Downtown and Sentosa Cove are mainly 99-year leasehold estates. Not only are they among the most expensive leasehold properties, their price levels are almost on par with the new freehold projects in the Orchard area and 25-30 per cent below those of new luxury properties.

The evolution of these two new prime residential locations was partly fuelled by the sharp growth of local high net worth individuals (HNWIs) as a result of the global wealth effect in 2005-2007. Most of them would have invested in real estate in one way or another during this period.

In the past few years, not only have locals invested in property, but the Singapore property market boom has also attracted a lot of permanent residents (PRs) and foreigners as the government relaxed rules on foreign ownership. There is no restriction on the purchase of any non-landed property in Singapore but a foreigner or PR who wishes to purchase a restricted residential property still needs to obtain the approval from the Land Dealing (Approval) Unit. A restricted property refers to vacant residential land, landed property (such as a detached house, semi-detached house, terrace house and landed property in strata developments which are not approved condominium developments under the Planning Act).

However, PRs and foreigners who wish to purchase landed property on Sentosa island have been able to obtain fast track approval from the government since 2005.

Between the emerging prime areas of Sentosa and the New Downtown, the New Downtown possesses a dynamic multi-faceted character that makes it a more 'happening' place. This is because it is being developed into a place where living, working and playing will be blended together into an exciting mix of diverse activities. The Esplanade - Theatres By The Bay provides for the enjoyment of the arts. The Marina Bay Financial Centre (MBFC), the purpose-built financial district of the New Downtown, will offer nearly three million sq ft of prime Grade A office space and two residential towers comprising 649 upmarket apartments to complement the newly completed iconic skyscraper, The Sail @ Marina Bay. Both The Sail and MBFC will also provide some 20,000 sq ft and 105,000 sq ft of retail space respectively.

To top it all, the proposed Marina Bay Sands integrated resort will feature three hotel towers with 2,500 suites, over a million sq ft of space for conventions and meetings, the ArtScience Museum designed like 'floating' crystal pavilions, more than 800,000 sq ft of retail space known as Marina Bay Shoppes as well as a 160,000 sq ft casino. There is no doubt that Marina Bay will be a focal point of business, recreation and living for many years to come.

While the concept of in-city living has hogged the headlines in recent times, the number of residential units in the New Downtown is still rather limited. Around Marina Bay, only The Sail (1,111 units), Marina Bay Residences (428 units) and Marina Bay Suites (221 units) are available. The first two projects are fully sold while the third is not for sale yet. One Shenton (341 units) at One Shenton Way is 93 per cent sold to date while The Cliff (312 units) at McCallum Street is 76 per cent sold. In the Tanjong Pagar area, Lumiere (168 units) is 58 per cent sold.

As for projects in the pipeline, 76 Shenton Way has obtained written permission to be converted into a 179-unit apartment block while the owners of 5 Shenton Way (UIC Building) are waiting for the lifting of the moratorium on the conversion of office buildings to residential use at end-2009 before they proceed. Two new projects at Enggor Street in Tanjong Pagar have also obtained written permission as at June this year.

Over at Icon in Tanjong Pagar, one-bedroom units (570-800 sq ft) were recently leased at $5-$7.50 psf while two-bedroom units (900-940 sq ft) were leased at $5.50-$7 psf. This works out to a gross yield of 4-5 per cent. Using these as a proxy for the possible rental range for the recently completed The Sail (Tower 2), it is likely that similar-sized units may be leased at $7-$8.50 psf. This would translate to a lower yield of 3-4 per cent due to their higher capital values.

For 2009, modest growth is expected as the US financial and housing slumps ripple through the rest of the world, affecting employment, business confidence, consumer spending and overall demand. The slowdown in the global economy and inflation woes are likely to curtail residential sales and cause overall home prices to dip by 10-15 per cent.

Despite the current tentative sentiment in the residential market, there are several fundamental merits for living in the new prime area of Marina Bay. And momentum should pick up again once the Marina Bay Sands commences operations at the end of next year. The lure of living, working and playing in an area that never sleeps would once again prove too attractive for home buyers to ignore.

The writer is by associate director of CBRE Research

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Published September 26, 2008

PROPERTY

Sentosa Cove a coveted address

CHIA SIEW CHUIN and AUDREY TAN look at the projects that make up Singapore's exclusive marina residential community

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FANCY revelling in a resort home that's just under 15 minutes from the central business district and shopping malls? Where can you enjoy a round of golf at an international golf course situated right at your doorstep? And if travel is on the cards, the airport is just a 30-minute ride away. If that sounds appealing to you and you have anywhere from $2 million to $20 million to spare, a resort home in Sentosa Cove could be the answer.

Sentosa Cove is to Singapore what Sanctuary Cove is to Australia and the French Riviera is to France. Set on the eastern shore of Sentosa island (just south of the main Singapore island), Sentosa Cove, which spans 117 hectares of mostly reclaimed land, is undergoing a transformation that will see it become Singapore's first and only integrated oceanfront gated marina residential community.

When completed in 2010, Sentosa Cove will be a luxurious estate comprising some 2,500 99-year leasehold homes in the form of oceanfront villas, waterway bungalows, hillside mansions and upscale condominiums. These will be complemented by an intimate marina village offering supporting amenities such as the 240-berth One Degree 15 Marina, the 320-room W Hotel being developed jointly by City Developments and Starwood, and a three-storey retail and commercial complex with a wide array of shops, upmarket F&B outlets, spa and fitness centre and small-office-home-office (SoHo) units.

To top it all, the development of Resorts World at Sentosa, Singapore's second integrated resort with a casino, will undeniably attract high-rollers who covet luxury homes to invest in Sentosa Cove, making it the Monte Carlo of Asia.

There are no restrictions on foreigners purchasing condominium units in this enclave. However, foreigners looking to purchase a landed home here will need to submit an abridged application form to the Land Dealings (Approval) Unit of the Singapore Land Authority for approval to purchase what is classified as restricted property in Singapore.

This abridged application, only available for landed homes in Sentosa Cove, will enable a foreigner to receive fast-track approval in 48 hours on the back of simplified purchasing criteria and approval procedure. The catch is that foreigners who have been granted the abridged approval will be required to occupy the landed homes themselves and must not own more than one restricted property in Singapore.

Furthermore, as one of the options under the Global Investor Programme, an applicant can apply for Singapore permanent residency by utilising his property investment in Singapore to form up to half the minimum $2 million required to be invested in approved businesses or investments in Singapore.

With these attractions, it is no wonder that high net worth individuals from all over the world have been making a beeline for a slice of this luxurious resort home market. Foreigners are believed to have accounted for 50 per cent of the property sales in Sentosa Cove. By 2010, 60 per cent of the 10,000 Sentosa Cove residents will likely be foreigners, thus setting the stage for a truly international community.

Since 2004, at least 12 projects comprising six condominium and six landed housing developments have been launched for sale. These projects have enjoyed brisk sales, save for those launched after the onset of the US sub-prime mortgage crisis in 3Q 2007.

Here is a a snapshot of some of the projects in Sentosa Cove.

NON-LANDED DEVELOPMENTS

The Berth by the Cove: This was the first condominium development to be launched and completed in Sentosa Cove. The development consists of 15 six-storey blocks and provides an array of facilities including 25 berths for private yachts. All the apartments have views of the ocean, with the master bedroom and living rooms facing the sea.

There are 200 units in the development comprising 188 two- to four-bedrooms apartments and penthouses, ranging from 1,015 sq ft to 3,100 sq ft; and two duplex sky villas of 6,028 sq ft, each with a balcony lap pool.

The Oceanfront @ Sentosa Cove: This seafront condominium comprising three 15-storey and two 13-storey blocks is by far the largest and tallest residence in Sentosa Cove. Designed by world-renowned architects Wimberly Allison Tong and Goo Inc and Antonio Citterio, it features a host of luxurious facilities including a fully equipped gym and an infinity lap pool stretching into the horizon.

There are 264 units in the development, comprising 239 two- to four-bedrooms apartments ranging from 1,216 sq ft to 4,282 sq ft, seven sky suites of 3,326 sq ft to 5,038 sq ft, two villas measuring 4,585 sq ft to 4,704 sq ft and 16 sky villas of 2,745 to 8,095 sq ft.

Turquoise: One of the most recently launched developments in Sentosa Cove, Turquoise comprises two six-storey blocks with attics fronted by a waterway near the fairways for views of the golf courses. It boasts full condominium facilities as well as 21 private berths within the development.

Turquoise will have a total of 91 residential units, with 78 three- to four-bedrooms ranging from 2,088 sq ft to 3,035 sq ft, 10 duplex penthouses of 3,111 sq ft to 3,746 sq ft with private spa pools and terraces and three sky villas ranging from 6,900 sq ft to 7,987 sq ft with private sky gyms, infinity lap pools and terraces. Units are still available for sale by the developer.

Marina Collection: Marina Collection is the latest condominium project to be launched in Sentosa Cove. Located next to the One Degree 15 Marina, the development comprises three four-storey blocks. Facilities provided include a lap pool, gym, clubhouse and concierge service. Buyers are offered One Degree 15 Marina club membership and 40 berths will be made available for lease to owners.

The 124-unit project will have 93 three- to four-bedroom apartments ranging from 1,873 sq ft to 3,272 sq ft and 31 penthouses (with private lap pools) measuring 3,369 sq ft to 4,693 sq ft. The project is still open for sale by the developer.

LANDED DEVELOPMENTS

Those who want to design and build their own homes have the chance to do so on Sentosa Cove with land parcels on offer for sale. So popular are they that all the land parcels at Sentosa Cove have been sold as at end-August 2008. There are, however, opportunities to purchase landed homes in the primary and secondary markets. Landed projects that keen buyers can still lay their hands on include:

The Berthside: The Berthside comprises eight terraces with their own private berth and a spacious deck area for outdoor dining. It is the first landed housing development to be launched and completed in Sentosa Cove. The land size for each terrace unit ranges from 2,324 to 3,851 sq ft, with a built-up area of 4,168 sq ft to 5,170 sq ft.

Coral Island: This is an island in the North Cove of Sentosa Cove. It houses 21 bungalows, each equipped with its own private mooring berth for a pleasure craft. The bungalows are built on land plots ranging from 6,000 sq ft to 15,000 sq ft and have built-up areas of between 6,000 sq ft and 12,000 sq ft.

FUTURE PROJECTS

In the pipeline are some 535 condominium and landed houses in Sentosa Cove, which could potentially be launched in the next two to three quarters. These include the 105 yet-to-be-launched condominium units from Turquoise and Marina Collection as well as City Developments' 228-unit Sentosa Quayside and Ho Bee Group's 151-unit Seascape.

Beyond the next nine months, would-be purchasers and investors can also look forward to another estimated tally of 350 condominiums and landed homes that are likely to be generated from developers' land banks.

Buoyant demand for Sentosa Cove's resort homes has resulted in the trebling of launch prices of non-landed properties, from an average of $785 per sq ft for the first condominium project, The Berth by the Cove, launched in November 2004, to $2,800 psf for latest release for The Marina Collection in December 2007.

Based on caveats lodged, prices of landed homes in Sentosa Cove have similarly trended up steeply. Prices of bungalows have increased some 75 per cent from an average of $743 psf of land area as at late 2005 to $1,303 psf of land area as at end-2007. For terrace houses, average prices have leaped by 185 per cent from $847 psf of land area as at 1Q 2005 to $2,414 per sq ft as at 1H 2008.

With the stock of resort homes in Sentosa Cove capped at 2,500 units, one can be assured that the exclusivity and resort ambience of homes in the marina community will be preserved. In addition, the rising population of well-heeled expatriates brought about by Singapore's growing status as a global city and regional financial hub will continue to support demand for resort homes in Sentosa Cove. Hence, despite the current market weakness due to global economic and financial turbulence, the mid-to-long term prospects for resort homes in Sentosa Cove are bright.

Singapore's sound political, social, economic and geographic environment that is free from natural disasters makes buying a home in this island state, be it for investment, holiday or retirement, a worthwhile option. Hence, laying one's bet on Sentosa Cove could just be the match made in investment heaven.

Chia Siew Chuin is associate director while Audrey Tan is analyst at Research & Advisory, Colliers International

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Published September 26, 2008

PROPERTY

Spoilt for choice

Home buyers have a wide range of projects to choose from that will match their lifestyles, write CHUA CHOR HOON and ONG KAH SENG

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PROPERTY investment requires substantial capital outlay and it takes a longer time to dispose of it compared to other assets like shares, especially in a soft market. Important factors to consider before making a purchase therefore include:

# Purpose of purchase, ie whether for owner-occupation or investment;

# Your budget and the price of the property;

# Surrounding environment;

# Proximity to amenities such as MRT stations, schools, and shopping centres;

# Rental and resale values (especially if you are buying for investment);

# and Reputation of the developer.

Many of these factors are related to location, which is often cited as the most important criterion in property purchase. Besides the traditional prime districts 9, 10 and 11, there are other areas worth considering.

The east coast has always been a favourite among Singaporeans, being close to the city and beach, easily accessible to the airport, and with many amenities like shopping, food and beverage, and the Marina Bay golf course. Faced with high rents in the prime districts, the East Coast has also become a popular alternative with many expatriates.

Joo Chiat and Katong are rich in the culture of Eurasian and Peranakan communities, and their food and architecture. Residents in the East Coast will also enjoy proximity to the Sports Hub when it is completed in a few years' time. Besides Parkway Parade and Kallang Leisure Park, the Sports Hub will offer 441,000 sq ft of commercial space and the redevelopment of Katong Mall is expected to have about 185 retail units.

There are ample choices of developments to suit different budgets. Developments with sea views such as The Belvedere, Water Place and Sanctuary Green enjoy strong leasing interest with monthly median rentals ranging from $3.80 to $4.50 per sq ft.

The last three years have seen other areas getting popular as they offer alternative quality lifestyle living.

Waterfront living, which in the past had been mostly confined to the east and by the Singapore River, gathered momentum in the last few years with areas like Sentosa Cove, Keppel Bay and Marina Bay coming up.

Sentosa Cove offers luxurious houses and condominiums with sea or canal views, and more than 50 per cent of the buyers are foreigners. Many of the properties are bought as weekend or holiday homes. Keppel Bay offers exhilarating views of Sentosa, ships cruising in and out of the harbour front and pleasure boats berthed at Marina at Keppel Bay.

Since the completion of Caribbean at Keppel Bay in 2004, the Harbourfront area has livened up with many lifestyle amenities such as VivoCity, St James Power Station, Marina at Keppel Bay and Jewel Box at Mount Faber.

Future developments that residents in Sentosa Cove and Keppel Bay can look forward to are the integrated resort at Sentosa and the government's development of the Southern Ridges and waterfront.

The Southern Ridges, Labrador area and Keppel waterfront will collectively form a major recreational and leisure destination at the southern part of Singapore. Already bridge connections have been made to link the 9km chain of green, open spaces across Mount Faber Park, Telok Blangah Hill Park and Kent Ridge Park. Soon, an elevated boardwalk over the sea will be built skirting the foothills of Bukit Chermin, and connect eastwards to the future promenade at The Reflections at Keppel Bay condominium project and westwards to Labrador Park.

According to URA statistics, Caribbean at Keppel Bay consistently enjoys one of the highest rentals among condominiums islandwide. Its median rent was $6.40 per sq ft in 2Q 2008. The potential supply in the area is fairly limited. Besides the uncompleted The Reflections at Keppel Bay, with 507 units available out of a total 1,129 units as at end 2Q 2008, the only other projects in the pipeline in the area are 307 units on a parcel next to Caribbean at Keppel Bay and 94 units on Keppel Island.

At Marina Bay, there will be plenty of buzz from the Marina Bay Sands integrated resort, Marina Bay Shoppes, and events and activities that are being/will be held in the bay. Marina Bay Shoppes will provide 800,000 sq ft of retail space, close to the one million sq ft in VivoCity. Nearby is the uncompleted Gardens at Marina South which will provide nature relief from the hustle and bustle.

Tiong Bahru, with its MRT station, Tiong Bahru Plaza, conserved buildings, Tiong Bahru market and hawker centre and freehold condominiums like Twin Regency, Regency Suites and The Regency at Tiong Bahru, has a strong following for its convenience of transport and amenities. The area is attractive with many expatriates and working professionals who like the quaint living environment near their workplaces. Monthly rents of Twin Regency, which was completed in 2007, are generally above $4.50 per sq ft.

Other growing fringe city areas are at Selegie and Beach Road/Kallang area. Both are near the Bras Basah/Bugis area which is developing nicely into a bustling arts, cultural, entertainment and education hub. The rich history and conserved shophouses at Beach Road and Kampong Glam offer a variety of experiences with their traditional trades, interesting shops and food outlets. Nearby at Bugis, Illuma will be completed soon by end of the year.

At Selegie, there are upcoming malls like Wilkie Edge, while Tekka Mall is being re-positioned and re-named The Verge. New residential developments include Parc Emily and Parc Mackenzie. Monthly rents of Parc Emily are at least $4.50 per sq ft while some units were recently sold for about $1,100 to $1,200 per sq ft. Projects currently available for sale include Parc Sophia and Mount Sophia Suites, with the latter not fully released.

At the Beach Road/Kallang area, the government plans to develop the Ophir-Rochor corridor into a vibrant office cluster for financial and business institutions that will complement the financial district at Marina Bay and Raffles Place. The Circle Line will further enhance the accessibility and connectivity of the vicinity.

Further up at Kallang Riverside, plans are announced in the draft Master Plan 2008 to develop it into a commercial hub with a residential enclave capitalising on the beach and waterfront. Launched at about $1,400 per sq ft last year, The Riverine by the Park, a 96-unit development at Kallang Road, was well-received and fully sold in weeks. A more recent launch is Concourse Skyline with selling price of $1,500-$1,800 per sq ft, which will be able to take advantage of an area that is anticipated to grow into a sought-after mixed commercial and residential area at the city fringe and with waterfront views of the Kallang River and the sea.

Property buyers are now spoilt for choice, as more areas take off, backed by the government's plan to introduce city living and develop different parts of the island to provide for varied lifestyle needs. Understanding the attractions and potential of each area is therefore important so that it will be easier to sell or rent the property that is purchased and to ensure that there is better capital protection or appreciation.

Chua Chor Hoon is senior director, while Ong Kah Seng is assistant manager, DTZ Research Singapore

Published September 26, 2008

PROPERTY

Branded residences set to take off

Still in its infancy, the branded residential market in Asia has the potential to grow, write DESMOND SIM and MELISSA SNG


COMING home to an immaculately kept apartment with all the creature comforts or having a beach retreat at your own private villa with all the attendant luxuries are all possible in a branded residential development - the marriage of a luxury residential development and a reputable brand.

Such brands are typically from the luxury fashion world of the likes of Armani and Bulgari, or from an established designer like Yoo or Starck. Then there are the luxury hospitality brands such as St Regis and the Ritz Carlton.

Branding is imperative to an individual seeking a specific lifestyle that the brand espouses. A branded residential development not only provides the investors ownership of a tangible real estate, it also encompasses the brand's image and value-added services. Branded residences thus become the epitome of an affluent lifestyle given the exclusivity and recognition that these brands provide, in addition to the security, trust and extensive privileges and services which other unbranded luxury residential developments do not generally offer.

Branded residential developments could either be single or mixed use located within an urban or resort setting. They provide the buyers the opportunity to enjoy a full range of services rendered by a branded hospitality service provider.

The target market for branded residential developments is of course the well-heeled high end of society. These affluent individuals have experienced similar quality services elsewhere and now seek the same uncompromised high quality hospitality services in their home country.

Branded residential developments usually command a premium. This is because they offer the owners a distinguished appeal with exclusively designed developments and luxury hotel services and amenities. This premium is estimated to range from 20 per cent up to 40 per cent as compared to similar unbranded residential developments.

While the branded residential market in the US and Europe is quite mature, this market is relatively non-existent and is still in its developing stage in South-east Asia. It is therefore not impossible to expect countries such as Indonesia, Thailand and Singapore to witness the continual development of this market.

Branded developments prefer locating in areas with strong resort markets or cities that offer occupiers and investors the opportunity for a second home. For example, Bali and Phuket are favoured for their unique cultures and luscious beaches. Singapore on the other hand, offers the unique blend of a modern multi-racial city set in a tropical environment.

Rising affluence in Asia is another primary driver for this growth. According to World Wealth Report by Merrill Lynch and Capgemini, the number of high net worth individuals (HNWI) grew by 6 per cent while the Ultra-HNWI band grew by 8.8 per cent in population size in 2006 globally.

Asian countries recorded the fastest growth in terms of the number of HNWIs. India, China, South Korea, Indonesia, Singapore and the United Arab Emirates are in the top 10 markets in HNWI population growth. Other countries in this list include Brazil, Slovakia, Czech Republic and Russia. Collectively, Asia currently holds a quarter of the global high net worth individuals.

According to the same World Wealth Report, Asia's high net worth wealth will grow at 7.9 per cent per annum and is projected to reach US$13.9 trillion by 2012. The Asia-Pacific region wealth market is expected to surpass Europe as the second wealthiest region after North America in the next five years.

Using real disposable income as an indicator of rising affluence, Asia as a region has the highest disposable income compared to West Europe and North America. As at 2007, the Asian disposable income has a 22 per cent and 47 per cent gap over North America and Western Europe respectively.

With rising affluence globally and regionally, demand for branded residential developments is likely to increase in tandem. Furthermore, it is the affluent from Asia Pacific that are most likely to spend on luxury items and judging by their investment portfolios, Asians have a greater affinity for tangible assets such as real estate and cash compared to their Western counterparts.

An investment in branded residential developments can be for personal occupancy or for income purposes which will help defray the carrying costs when these properties are leased. The demand for branded residential developments could therefore come from a mixture of high net worth individuals and institutions situated locally, regionally or across continents. Some examples of these investors include real estate funds, and individual investors from the Middle East, China, India, Indonesia and Eastern Europe.

It should be highlighted that investments in the branded residential development may differ from country to country (see table).

With potential demand on the rise, the branded residential development market is set to grow in this region. While there is already an established market of branded residential developments in certain cities in South-east Asia, there is also a strong pipeline of branded residential coming on stream over the next few years. In terms of existing developments, the major players include St Regis in both Bali and Singapore and Four Seasons in Bali and Langkawi. Some other notable developments include Bulgari in Bali, Ritz Carlton in Bali and Marriott in Phuket.

Thailand seems to lead this market in terms of future supply. The St Regis Group and Regent Group will each open a branded residential development in Bangkok, Four Seasons and Shangri La in Phuket and Conrad in Koh Samui.

In addition, the St Regis Group and Regent Group is each developing a branded residential development in Kuala Lumpur while Singapore will welcome the completion of a Ritz Carlton branded residential development in the next couple of years.

The branded residential market in Asia is still in its infancy but the market has the potential to grow. We are already seeing a number of developments mushrooming around Asia.

There is also a strong investment demand from high net worth investors looking for branded products where price is not a major issue.

Desmond Sim is associate director of research and consultancy while Melissa Sng is research analyst, Jones Lang LaSalle

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Published September 26, 2008

Growing wealth

By GENEVIEVE CUA


STOCK markets have fallen sharply this year, soaking up a substantial amount of wealth. Consultants, however, remain optimistic that global wealth remains on an upward trajectory.

Merrill Lynch and Capgemini, for instance, expect the Asia Pacific wealth market to grow by nearly 8 per cent a year over the next five years. The Boston Consulting Group is even more optimistic, pegging the annual compounded growth rate at 11.4 per cent.

Even with a slower economy, some trends are clear: Wealth markets are getting more concentrated - that is, wealthy households own more than 80 per cent of global assets under management, says BCG. Portfolios of the wealthy also tend to be well cushioned by cash and hedging strategies that stand a better chance of preserving value.

One bright spot is that of 'passion' investments, as highlighted by Merrill and Capgemini in their annual report. Such investments include art, luxury cars, yachts and sports teams.

Last year, luxury collectibles and fine art each accounted for roughly 16 per cent of the global demand. Jewellery held third spot with a 13.8 per cent share and luxury travel 13.5 per cent.

The Forbes' Cost of Living Extremely Well Index (CLEWI), which tracks the cost of a basket of luxury goods, rose 6.2 per cent from 2006 to 2007, more than double the inflation rate, as cited in the Merrill and Capgemini report. Despite the significant price increases, the report says luxury segments posted record sales figures last year.

Among the Asian wealthy, jewellery, gems and watches were their favourite, accounting for 19 per cent of the passion dollar. This was followed by luxury consumables, wellness and collectibles.

Yet another hard asset dear to Asians is property. In Singapore, in defiance of generally softer prices, all 30 private preview units of SC Global's apartments in Martin Road were snapped up. A unit at The Sail @ Marina Bay was also recently sold for over $15 million.

But what of the future? Certainly some segments will begin to feel the pinch of a slower global economy. But the ultra high net worth segment may well remain resilient.

In this supplement, we poll key players here for their views on the outlook for global stocks and bonds over the next year and look at investment options ranging from real estate to wine and art. After all, hard assets arguably serve to diversify a portfolio - welcome antidote to these challenging times.

Guide to prime residential 2008 26/09/08

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