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Thread: Kuwait fund pulls out of bulk purchase of high-end homes

  1. #1
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    Default Kuwait fund pulls out of bulk purchase of high-end homes

    March 11, 2008

    Kuwait fund pulls out of bulk purchase of high-end homes

    It allows options for 97 condo units at Goodwood Residence to lapse

    By Joyce Teo, Property Correspondent


    SURPRISE EXIT: Kuwait Finance House could end up paying multimillion dollars in penalties to developer GuocoLand for letting its options to buy Goodwood Residence units lapse. Its move raises concerns that the property sector may be heading for a downturn. -- PHOTO: GUOCOLAND

    A KUWAIT bank fund that agreed in December to buy 97 units at posh Goodwood Residence for $818.4 million has let the purchase option lapse.

    Kuwait Finance House has given no reason for the move, which could result in the firm having to pay developer GuocoLand multimillion-dollar penalties.

    It could also be the first time a foreign institutional investor in Singapore has pulled out of such a deal, raising concerns that the property market, already hit by weaker sentiment, may be heading into a downturn.

    'While the current market is cautiously optimistic, news of such a pullout might cause it to turn more cautious,' said Cushman and Wakefield managing director Donald Han.

    GuocoLand did not provide a direct reason for the lapse but said in a statement yesterday that the private residential market in Singapore appears cautious.

    The developer also said it is in talks with Kuwait Finance House, an Islamic investment bank, with 'a view to a grant of fresh options for units in the development'.

    The firm declined to comment further, citing ongoing talks. Kuwait Finance House also declined comment for the same reason.

    Kuwait Finance House's huge deal was for 97 four-bedders ranging from 2,500 sq ft to 3,900 sq ft at the former Casa Rosita site in Bukit Timah Road, near Newton Circus.

    The condo has 210 freehold units on a large 24,845 sq m site fronting Goodwood Hill. The Kuwait fund's purchase would have been the single-largest purchase of residential units under construction in Singapore.

    Kuwait Finance House had agreed to buy the units at a median price of $3,200 per sq ft (psf), which would have set price benchmarks for the area. Industry sources said the price was way too high, considering that bulk purchases typically come with a discount.

    'If it were to have bought at an average of, say, $2,700 psf last December, it would still be a record for the Newton Circus area,' said an industry source who declined to be named.

    'If it had held on for 15 to 20 years and leased the units for up to a 5 per cent yield, it may have been able to justify the deal. But if it had wanted to buy and sell, why didn't it bargain for a rock-bottom price as the property had not been launched?'

    It is believed that Kuwait Finance House was keen on flipping the units as they were marketed in Dubai recently, but the sale campaign was unsuccessful.

    Another industry source, who declined to be named, said: 'The pullout may be due to the terms of the deal. The buyer could have realised that it had bought at a higher-than-expected price, had problems flipping the units and wanted to cut its losses.

    'It could also reflect the current market and the possibility that the property market may stagnate in the next two to three years.'

    The stale market appeared to have led GuocoLand to put off the launch of Goodwood Residence, scheduled initially for the first quarter.

    Many developers are following suit, delaying launches until keen interest returns to the sector, which is in the doldrums with buyers and sellers staying on the sidelines.

    A GuocoLand spokesman said: 'We would be tapping selected overseas markets when we decide to launch Goodwood Residence at a later date.'

    It added in its statement that the expiry of the options will not have any material financial effect on its net tangible assets per share or earnings per share for the financial year ending June 30.

    [email protected]


    Opting out

    # Kuwait Finance House's $818.4 million deal was for 97 four-bedders ranging from 2,500 sq ft to 3,900 sq ft at the former Casa Rosita site in Bukit Timah Road, near Newton Circus.

    # It had agreed to buy the units at a median price of $3,200 psf, which would have set price benchmarks for the area. Sources say the price was too high, considering that bulk purchases typically come with discounts.

    # It is believed that Kuwait Finance House was keen on flipping the units as they were marketed in Dubai recently, but the sale campaign was unsuccessful.

  2. #2
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by mr funny
    March 11, 2008

    Kuwait fund pulls out of bulk purchase of high-end homes

    It allows options for 97 condo units at Goodwood Residence to lapse

    By Joyce Teo, Property Correspondent


    SURPRISE EXIT: Kuwait Finance House could end up paying multimillion dollars in penalties to developer GuocoLand for letting its options to buy Goodwood Residence units lapse. Its move raises concerns that the property sector may be heading for a downturn. -- PHOTO: GUOCOLAND

    A KUWAIT bank fund that agreed in December to buy 97 units at posh Goodwood Residence for $818.4 million has let the purchase option lapse.

    Kuwait Finance House has given no reason for the move, which could result in the firm having to pay developer GuocoLand multimillion-dollar penalties.

    It could also be the first time a foreign institutional investor in Singapore has pulled out of such a deal, raising concerns that the property market, already hit by weaker sentiment, may be heading into a downturn.

    'While the current market is cautiously optimistic, news of such a pullout might cause it to turn more cautious,' said Cushman and Wakefield managing director Donald Han.

    GuocoLand did not provide a direct reason for the lapse but said in a statement yesterday that the private residential market in Singapore appears cautious.

    The developer also said it is in talks with Kuwait Finance House, an Islamic investment bank, with 'a view to a grant of fresh options for units in the development'.

    The firm declined to comment further, citing ongoing talks. Kuwait Finance House also declined comment for the same reason.

    Kuwait Finance House's huge deal was for 97 four-bedders ranging from 2,500 sq ft to 3,900 sq ft at the former Casa Rosita site in Bukit Timah Road, near Newton Circus.

    The condo has 210 freehold units on a large 24,845 sq m site fronting Goodwood Hill. The Kuwait fund's purchase would have been the single-largest purchase of residential units under construction in Singapore.

    Kuwait Finance House had agreed to buy the units at a median price of $3,200 per sq ft (psf), which would have set price benchmarks for the area. Industry sources said the price was way too high, considering that bulk purchases typically come with a discount.

    'If it were to have bought at an average of, say, $2,700 psf last December, it would still be a record for the Newton Circus area,' said an industry source who declined to be named.

    'If it had held on for 15 to 20 years and leased the units for up to a 5 per cent yield, it may have been able to justify the deal. But if it had wanted to buy and sell, why didn't it bargain for a rock-bottom price as the property had not been launched?'

    It is believed that Kuwait Finance House was keen on flipping the units as they were marketed in Dubai recently, but the sale campaign was unsuccessful.

    Another industry source, who declined to be named, said: 'The pullout may be due to the terms of the deal. The buyer could have realised that it had bought at a higher-than-expected price, had problems flipping the units and wanted to cut its losses.

    'It could also reflect the current market and the possibility that the property market may stagnate in the next two to three years.'

    The stale market appeared to have led GuocoLand to put off the launch of Goodwood Residence, scheduled initially for the first quarter.

    Many developers are following suit, delaying launches until keen interest returns to the sector, which is in the doldrums with buyers and sellers staying on the sidelines.

    A GuocoLand spokesman said: 'We would be tapping selected overseas markets when we decide to launch Goodwood Residence at a later date.'

    It added in its statement that the expiry of the options will not have any material financial effect on its net tangible assets per share or earnings per share for the financial year ending June 30.

    [email protected]


    Opting out

    # Kuwait Finance House's $818.4 million deal was for 97 four-bedders ranging from 2,500 sq ft to 3,900 sq ft at the former Casa Rosita site in Bukit Timah Road, near Newton Circus.

    # It had agreed to buy the units at a median price of $3,200 psf, which would have set price benchmarks for the area. Sources say the price was too high, considering that bulk purchases typically come with discounts.

    # It is believed that Kuwait Finance House was keen on flipping the units as they were marketed in Dubai recently, but the sale campaign was unsuccessful.

    At last someone started the ball rolling.....more to come and u will see the prices start rolling down.....

  3. #3
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    At last someone started the ball rolling.....more to come and u will see the prices start rolling down.....
    how much % drop --> 20 % ?

  4. #4
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    At last someone started the ball rolling.....more to come and u will see the prices start rolling down.....
    Yes I see it plunging down not rolling.

  5. #5
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Told you that high end is more risky than mass market already. Foreigners can hold mah, but will they?

  6. #6
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Told you that high end is more risky than mass market already. Foreigners can hold mah, but will they?
    sooner or later, mass market also kana one...

  7. #7
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    sooner or later, mass market also kana one...
    Mass market speculators cannot hold for long....many HDB upgraders...kana one soon.

  8. #8
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Oh, where are are all the bull run predictors? They kept on saying "time will tell" and that "market forces will decide". So quiet now ...

  9. #9
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    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Mass market speculators cannot hold for long....many HDB upgraders...kana one soon.
    HDB upgraders buy to stay la, that's why call upgrader mah, dun think they qualify as speculators.

  10. #10
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by ht
    HDB upgraders buy to stay la, that's why call upgrader mah, dun think they qualify as speculators.
    hmm i hv committed one percent for buying ..now thinking ..its going to be wasted after this news.
    better to wait than buy?

  11. #11
    Unregistered Guest

    Talking Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    hmm i hv committed one percent for buying ..now thinking ..its going to be wasted after this news.
    better to wait than buy?
    Don,t bull shit .........Lah!I don't think you can affort to commit the one percent deposit.If you can afford to buy private Apt than please continue to stay in HDB.

  12. #12
    Unregistered Guest

    Talking Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    hmm i hv committed one percent for buying ..now thinking ..its going to be wasted after this news.
    better to wait than buy?
    don't worry you can save 10-15% on current purchase price

    10%
    -
    1%
    ----
    9%

    15%
    -
    1%
    ----
    14%

  13. #13
    Unregistered Guest

    Lightbulb Re: Kuwait fund pulls out of bulk purchase of high-end homes

    don't worry you can save 9-14% on current purchase price .

  14. #14
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    hmm i hv also committed one percent for buying an entire block at Hallucinations @ Grandeur ..now thinking ..its going to be wasted after this news.

    better to wait than buy?

  15. #15
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Yes I see it plunging down not rolling.

    Don't jump the gun -- read in-between the lines.

    The Kuwait bank fund was not a bona fide buyer in the first place -- as the papers clarified, they are merely speculators trying to flip the properties in their own country, but failed.

    Given such a huge exposure, it only makes sense to run for dear life when they cannot flip over the sale and cut loss. It is the same if you buy a huge chunk of shares at a high price but the market refuses to move higher, you must cut loss.

    In the second place, they were stupid to buy at moon's price, i.e. 30% above market price thinking their own guys in Kuwait, with all that oil money, would take the bite.

    They deserve to lose money since they were speculating and inflating our market.

  16. #16
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Don,t bull shit .........Lah!I don't think you can affort to commit the one percent deposit.If you can afford to buy private Apt than please continue to stay in HDB.
    Shakespeare's famous quotation "some are born great, some achieve greatness, and some have greatness thrust upon them."

    Here in this forum we see "Some are born poor, some achieve poorness and some have poorness thrust upon them."

    They've got nothing better to do than hoping that the property market collapses, or hallucinating about placing 1% deposits.

  17. #17
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Don't jump the gun -- read in-between the lines.

    The Kuwait bank fund was not a bona fide buyer in the first place -- as the papers clarified, they are merely speculators trying to flip the properties in their own country, but failed.

    Given such a huge exposure, it only makes sense to run for dear life when they cannot flip over the sale and cut loss. It is the same if you buy a huge chunk of shares at a high price but the market refuses to move higher, you must cut loss.

    In the second place, they were stupid to buy at moon's price, i.e. 30% above market price thinking their own guys in Kuwait, with all that oil money, would take the bite.

    They deserve to lose money since they were speculating and inflating our market.
    They are the first to bite the bullet. There will be more on their way.

  18. #18
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Three months is a long time to hold an option. So developer must have known that buyers were going to flip. Anyway talks are still going on for fresh options. Why?

    This shows that oil money is not easy to come by after all. Just compare this against the mood when news of the purchase was disclosed in Dec, and everyone thought that prices were holding up well.

  19. #19
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Don't jump the gun -- read in-between the lines.

    The Kuwait bank fund was not a bona fide buyer in the first place -- as the papers clarified, they are merely speculators trying to flip the properties in their own country, but failed.

    Given such a huge exposure, it only makes sense to run for dear life when they cannot flip over the sale and cut loss. It is the same if you buy a huge chunk of shares at a high price but the market refuses to move higher, you must cut loss.

    In the second place, they were stupid to buy at moon's price, i.e. 30% above market price thinking their own guys in Kuwait, with all that oil money, would take the bite.

    They deserve to lose money since they were speculating and inflating our market.
    Quote Originally Posted by Unregistered
    They are the first to bite the bullet. There will be more on their way.
    Only you guys bother to debate on that Malaysian company, Kuwait .... Sdn Bhd. Is an asset-poor company trying to flip properties worth our time debating? With the hacker waiting to hack our posts again, I wouldn't even care.

  20. #20
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    It seems like the high end market is quite volatile, given the fact that not many locals can afford such luxury houses. I think the worst has yet to come.

  21. #21
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    It seems like the high end market is quite volatile, given the fact that not many locals can afford such luxury houses. I think the worst has yet to come.
    Since you say not many locals can afford, so why should you or the other locals concern about this high end market?

  22. #22
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Since you say not many locals can afford, so why should you or the other locals concern about this high end market?
    Please .. high end and mass market can be quite related. What happen at high end can flow to the mass market, you do not look things at only one perspective, don't you? If i do not drive doesnt mean i am not concern about oil prices, you get what i mean. Can you don't be so narrow-minded?

  23. #23
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Please .. high end and mass market can be quite related. What happen at high end can flow to the mass market, you do not look things at only one perspective, don't you? If i do not drive doesnt mean i am not concern about oil prices, you get what i mean. Can you don't be so narrow-minded?
    Can you don't give the wrong analogy?

    I think you are trying to say this:
    "If I drive Toyota and don't drive BMW doesn't mean I am not concern about BMW recalls."

    As long as your Toyota is reliable, why worry about BMW recalls?

  24. #24
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Can you don't give the wrong analogy?

    I think you are trying to say this:
    "If I drive Toyota and don't drive BMW doesn't mean I am not concern about BMW recalls."

    As long as your Toyota is reliable, why worry about BMW recalls?
    Your analogy also wrong.

    What he meant was this:

    "Even though I take public transport, I am concerned about BMW recalls. Because if BMW need to be recalled, that means their owners cannot drive to work and must take public transport, just like me. woohahahaha!!!"

  25. #25
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    I wonder how many other foreign buyers had been intending to flip. Maybe we will see a few more options lapsing.

  26. #26
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    http://www.reuters.com/article/reute...BrandChannel=0

    Opportunistic investors recoil from Asia property
    By Dominic Whiting, Asia property correspondent

    HONG KONG (Reuters) - Opportunistic investors are pulling back from Asian property because they see more scope for picking up distressed assets in the United States and Europe, and loans are harder to get in Japan, one of their favorite markets.

    Hedge funds have stopped dabbling in property in the region, fund managers say. And although private equity players will continue to develop property in India and China, they are more likely to buy buildings on the cheap in the West than in Asia.

    "Six months ago it was quite straight forward, we didn't have to answer questions about why to invest in Asia," Guy Cawthra, Asia fund strategist at Morley Fund Managers, told a recent conference in Hong Kong.

    "Now investors say 'we might not want to invest in Asia, we want to invest in Europe, the UK and the U.S.'."

    In the wake of the 1997-98 economic crisis, Asia, in particular Japan and South Korea, drew a raft of investment from funds run by the likes of Morgan Stanley (MS.N: Quote, Profile, Research), General Electric (GE.N: Quote, Profile, Research) and private equity firms such as Carlyle Group CYL.UL.

    Many made fat profits on a revival by Asian property markets, which are now mostly strong because of a shortage of new supply and still buoyant economies.

    Researchers at consultants Jones Lang LaSalle forecast Tokyo office prices will steady this year after a 28 percent jump in 2007, while Seoul, Hong Kong and Singapore and Shanghai are still on the up.

    Better opportunities now lie elsewhere for investors who think they can spot a market trough and ride a recovery.

    Because of tight credit and a worsening economy, U.S. commercial real estate values could fall by 20 percent in the next five years from their 2007 peak, JPMorgan analysts forecast, causing losses of about $120 billion, including on commercial mortgage-backed securities.

    London office values have dropped 12 percent from a peak in the middle of last year, and they will be pressured further by forecasts of a 10 percent decline in rental values through 2009.

    "I think a lot of investors will return to home markets," said Bart Coenraads, head of real estate at Fortis Investments. "Some will try to buy distressed core and refinance it. They could make good returns."

    COLD FEET

    Last year, total direct investment in the Asia-Pacific region jumped 27 percent to $121 billion -- a sixth of the global total -- with about half invested in Japan, which has been popular for its rock-bottom interest rates.

    However, Japanese banks are getting cold feet on property, analysts say, only giving loans worth 60-70 percent of a buildings value, compared to 80-90 percent a couple of years ago.

    Lower debt gearing is likely to crimp returns for equity investors. But having spent years setting up teams, private equity funds are unlikely to withdraw completely from Asia, said Tim Bellman, global head of strategy for ING Real Estate.

    Many, such as Morgan Stanley Real Estate Funds, no longer see themselves as "opportunistic", and are in Asia for the long haul.

    "Funds have been raised and platforms are set up, and they don't want to unwind them overnight," Bellman said. "But at the margin, opportunistic investors who looked at Asia are finding those opportunities back home."

    Morgan Stanley is building housing in China and taking stakes in Indian developers in a high-risk, high-return strategy. But the U.S. investment bank also bought the Tokyo headquarters of Citigroup (C.N: Quote, Profile, Research) last month, indicating it is still interested in "core" assets that are low risk but give modest returns.

    Meanwhile, Carlyle is shunning a Tokyo office market it believes is too expensive and is buying shopping malls and homes for the elderly.

    But in a sign that deals are getting tougher in Japan, Keith Greengrove, a managing director at Lehman Brothers, said his efforts to buy a collection of offices in Tokyo were scuppered in February by arduous loan conditions.

    "There's no property finance available in Japan today, no market for primary or secondary paper," Greengrove told the Hong Kong conference.

    "We tried to buy a big class B portfolio, with good tenants and a good sponsor, but there was only one potential lender," he said. "We're going to wait for the debt markets to shape up."

  27. #27
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    I wonder how many other foreign buyers had been intending to flip. Maybe we will see a few more options lapsing.
    YES SPECULATORS HAVE STARTED TO FLEE IN NUMBERS. LOCAL SPECULATORS CANT FLEE BCOZ NO BUYERS. OHHHHH SO MUCH BLOOD COMING YOUR WAY WHEN THEY WOULD BE TRAMPLED IN THE RUSH FOR THE EXITS. WOOOOHAHAHAHAHA

  28. #28
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    I wonder how many other foreign buyers had been intending to flip. Maybe we will see a few more options lapsing.
    Quote Originally Posted by Unregistered
    YES SPECULATORS HAVE STARTED TO FLEE IN NUMBERS. LOCAL SPECULATORS CANT FLEE BCOZ NO BUYERS. OHHHHH SO MUCH BLOOD COMING YOUR WAY WHEN THEY WOULD BE TRAMPLED IN THE RUSH FOR THE EXITS. WOOOOHAHAHAHAHA
    Foreigners are rushing for the entrance rather than the exit (see today's Business Times article below).

    When foreigners move into the prime and fringe districts, then those sour grapes in Sengkang will have to move to Tuas, and those at Tuas will move to Horsburgh Lighthouse.

    And if the International Court of Justice rules that Horsburgh Lighthouse belongs to Malaysia, then it will be renamed Pulau Batu Puteh and those sour grapes will turn into Malaysian citizens and their properties become Malaysian property and valued in Ringgits.

    WOOO

    HA

    Ha

    ha

    ha

    Business Times - 12 Mar 2008


    Foreigners snap up homes as rents start to bite

    Their purchases could account for half of 2007 transactions on the secondary market

    By ARTHUR SIM

    (SINGAPORE) A record number of foreigners here have opted to purchase homes instead of renting them at ever-climbing rates.

    According to an analysis of transactions of private residential properties by DTZ Debenham Tie Leung, foreigners bought 6,536 non-landed homes from the secondary market in 2007 - the largest number since 1995.

    They could account for more than 50 per cent of the secondary market transactions last year.

    That is because while more than 20,000 non-landed homes were sold on the secondary market last year, this number includes the units from more than 100 collective sales. DTZ's analysis does not include en bloc units - though earlier reports had put this figure at around 6,000 for the first half of 2007 alone.

    Purchases by foreigners on the secondary market represent a 105 per cent increase in volume compared to 2006.

    DTZ research senior director Chua Chor Hoon said that while some buyers were investors, there were also those who 'are not on company budget and find it more worthwhile to buy rather than face escalating rentals, especially if they are going to be in Singapore for more than a couple of years'.

    DTZ's figures for 2007 reveal that rents of prime apartments and condominiums increased 45 per cent year-on-year in 2007 to average $4.80 per square foot (psf). This was attributed to the influx of expatriates and a tight supply of prime apartments, as numerous prime developments were demolished or slated for redevelopment after being collectively sold.

    The percentage of foreigners buying non-landed property from the primary market (developer sales) was lower at 25.4 per cent, or 2,314 transactions out of a total of 9,089, reinforcing the assertion that foreigners are more inclined to buy a home for immediate occupation.

    Indonesians and Malaysians remain the biggest foreign buyers here, accounting for 23 and 17 per cent of all foreigners in 2007 respectively, but Indians (12 per cent), Britishers (8 per cent), Chinese (7 per cent) and Koreans (7 per cent) are also well represented.

    While foreigners bought non-landed homes in record numbers last year, boosting demand in the process, their absence in the landed homes sector (because of restrictions imposed by the government) did not stop a record number of landed homes being sold in the secondary market.

    DTZ's analysis reveals that of the total 5,211 landed homes sold in 2007, 4,823 were from the secondary market.

    Apart from the bullish sentiment which 'spilled over' from the non-landed sector last year, the landed sector also saw demand rise as it was still considered comparatively good value.

    DTZ's figures show that average capital values for non-landed freehold homes in the prime districts increased by 55 per cent year-on-year to $1,480 psf.

    For freehold landed homes in the prime districts, average capital values of detached homes increased 31 per cent year- on-year, while average capital values of semi-detached and terrace homes rose 29 and 27 per cent respectively.

    The situation was also exacerbated by the tight supply of new launches of landed homes in the year, estimated at around 650 units.

    DTZ's Ms Chua also believes that with speculation less rampant in the landed housing sector - 'most buyers are owner-occupiers' - prices are expected to be more stable and could even prove 'more resilient' if the downturn in the global economy is protracted.

    However, DTZ expects future supply of landed homes to be relatively low at just 3,100 units over the next few years, so this could push up demand and prices for both primary and secondary market landed homes.

    Speculation, defined by the number of subsales, was rampant among developer sales of non-landed homes last year, hitting an all-time high of 4,631 transactions - a 312 per cent year-on-year increase over 2006.

    Interestingly, while subsale transaction volume in 2007 was just 27 per cent higher than during the previous peak of 1996, the value of subsales was almost twice as high, hitting $7.9 billion.

    The fourth quarter, however, marked a shift in sentiment in the property market. Only 3,947 non-landed homes were transacted in the quarter, of which just 846 were sold by developers, reflecting a 64 per cent quarter-on-quarter drop. This was one of the worst performing quarters in the last three years.


    Copyright 2007 Singapore Press Holdings Ltd. All rights reserved.

  29. #29
    Unregistered Guest

    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Quote Originally Posted by Unregistered
    Foreigners are rushing for the entrance rather than the exit (see today's Business Times article below).

    When foreigners move into the prime and fringe districts, then those sour grapes in Sengkang will have to move to Tuas, and those at Tuas will move to Horsburgh Lighthouse.

    And if the International Court of Justice rules that Horsburgh Lighthouse belongs to Malaysia, then it will be renamed Pulau Batu Puteh and those sour grapes will turn into Malaysian citizens and their properties become Malaysian property and valued in Ringgits.

    WOOO

    HA

    Ha

    ha

    ha
    You must be crazy. Foreigners can only buy very little properties at high price, few units at each of non-landed and the small corner of Pulau Blakang Mati. How to drive singaporeans to Malaysia?

  30. #30
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    Default Re: Kuwait fund pulls out of bulk purchase of high-end homes

    Published March 12, 2008

    Guocoland dives on options lapse

    Shares hit as Kuwaiti-linked fund pulls out of $815m property purchase

    By LYNETTE KHOO


    SHARES of Guocoland fell victim yesterday to news that a fund company managed by Kuwait Finance House (Malaysia) Berhad (KFHMB) did not exercise options to buy $814.8 million worth of apartments in Guocoland's upmarket project here.

    Following analysts' downgrade, the stock dived as much as 19 cents or 5 per cent to an intra-day low of $3.64 before closing at $3.70, down 13 cents or 3.4 per cent. More than 420,000 shares changed hands.

    But the reaction from property counters was mixed, with Ho Bee falling two cents to 95 cents and SC Global dipping four cents to $1.50. Keppel Land edged up five cents to $5.35 and CapitaLand gained 18 cents to $5.89.

    The fund company managed by KFHMB had purchased options in December last year to buy 97 units at the premier freehold development Goodwood Residence. There are only 210 exclusive units on this 24,845-sq-m estate fronting the expansive Goodwood Hill. KFHMB is the Malaysian unit of Kuwait Finance House (KFH).

    Guocoland said on Monday that although the options have lapsed, the parties are still in discussions, with a view to granting fresh options for units in the development.

    It is not known why the fund did not exercise the options, but Guocoland said in its Monday announcement that 'the current private residential property market appears to be cautious in Singapore'. This could have prompted its decision to market Goodwood Residence units selectively at a later date.

    But in the stock market yesterday, speculation was rife over reasons for the lapse. Some cited the cautious market sentiment while others cited over-pricing of the units. There was even talk of an unsuccessful marketing campaign for these units by KFH in Dubai. The median price of $3,200 per square feet that the KFHMB fund agreed was earlier seen by some as a possible benchmark pricing for the area.

    DBS Vickers yesterday cut its rating on Guocoland to 'hold' from 'buy' and lowered its target price to $4.14 from $5.60 after revising downwards its average selling price estimates for Guocoland's high-end and mid-tier projects and ascribing a 15 per cent discount to Guocoland's revalued net asset value.

    'We believe that the decision by KFHMB to allow these options to lapse is a sign of the weak sentiment in the physical property market currently, particularly in the high-end segment,' the brokerage said.

    But Westcomb Financial Group said it believes that this lapse of options 'should not be taken as a signal that the Singapore private residential property market has fallen drastically.

    'In fact, the buyer has overpaid their purchases in December 2007, maybe with the view that the market would continue its uptrend in 2008.'

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