Property News

Sep 5, 2008

BULLS AND BEARS
STI dives nearly 3% to 23-month low
Selldown across the board triggered by fall in crude oil prices
By Goh Eng Yeow, Markets Correspondent

THE local stock market slumped almost 3 per cent to a 23-month low
yesterday as falling crude oil prices had a strongly deflationary
impact across the board.

This is scaring away traders big-time and investors are not waiting
for analysts to make the call. Yesterday, they were scrambling for
the exit on everything from rig-builders to property giants.

The resulting major selldown caused what was once believed an
unsinkable support level for the benchmark Straits Times Index - the
2,650-point mark - to be breached with alarming ease.

The STI nose-dived 80.48 points to close at a 23-month low of
2,626.05.

And going by grim rumblings from traders, the chances of a big
rebound on the local bourse appear remote, unless crude oil prices
stabilise.

The sell-off, however, helped to boost overall volume above one
billion shares for the first time in two weeks to 1.22 billion shares
worth $1.62 billion.

One big concern is the drying up of petro-dollars which had been
propelling luxurious condos to sky-high levels, and fuelling the
almost insatiable demand for collective sales last year.

Some traders observed that real estate prices had tended to march
almost hand in hand with rising crude oil prices. Last year, private
residential prices rose 31.2 per cent as crude oil soared 57 per
cent.

But crude oil prices have slumped about 25 per cent since hitting a
record US$146 per barrel in early July.

This correlation explained why property giants were among the worst-
hit in the rout yesterday. City Developments fell 59 cents to $9.33
and CapitaLand lost 11 cents to $4.17.

Upmarket developers were also hit. Wing Tai Holdings plunged 5.5 per
cent, or seven cents, to $1.21 while SC Global lost 3.2 per cent, or
2.5 cents, to 76 cents.

'With falling crude oil prices, there will be fewer petro-dollars
available, and hopes of upmarket condos hitting $3,000 or $4,000 per
sq foot will simply evaporate,' said a trader.

And those hoping for a collective sale on their ageing estates might
be disappointed, as Arab money, financing private equity funds which
had been partnering local developers, dries up.

The much-publicised Horizon Towers' collective sale, for instance,
was clinched by Hotel Properties which partnered Morgan Stanley Real
Estate and Qatar Investment Authority.

Another sector badly affected by falling oil prices was plantation
stocks, on fears that a similar rout might grip palm oil prices which
track crude closely.

Wilmar International lost a staggering $2.17 billion in market value
as it tumbled 34 cents, or 9.32 per cent, to a 12-month low of $3.31.

Commodities firms were not spared either. Noble Group lost 8.7 per
cent to $1.58 on a heavy volume of 43.9 million shares, while Olam
International lost 4.1 per cent to $1.88 on 10 million shares traded.

Sep 5, 2008

Lush mall to replace iconic complex
Serangoon Gardens Village to give way to mall with elevated 'forest'
and sunken garden
By Christopher Tan, Senior Correspondent

IT MAY not be as iconic as the Capitol Theatre building, but to those
who grew up in the north-east, a 50-year-old complex in Serangoon
Gardens may hold just as many memories.

But come next February, the old Paramount Theatre complex - now known
as Serangoon Gardens Village - will be torn down.

In its place, a new mall will rise.

Developer Edmund Chye, 45, whose late father owned the Paramount,
promises to infuse the complex with greenery, including a 3,000 sq ft
elevated 'forest', a water cascade and a sunken garden.

'The whole theme will be quite lush,' he said. 'It will be like
coming home to your own courtyard.'

The mall now houses a FairPrice supermarket and a mix of food and
beverage outlets.

Slated for completion in the third quarter of 2010, the new complex
is expected to cost $40 million.

Residents and businesses in the estate, which dates back to the
1950s, have mixed feelings about the redevelopment.

Technical officer Roger Tan, 59, said: 'I've lived here for over 30
years. Paramount holds a lot of memories. But the place is rather
old, so a more modern complex will be good too.'

Ms Anne Chia, 39, who owns eatery and pub Happy Daze in a shophouse
next door, worries that business could dip during the construction
period.

Insurance agent Patrick Tan, 45, who lives less than 50m from the
site, said he is concerned about the noise, dust and traffic
congestion.

Another long-time resident, service manager James Ang, 46, said he
feels 'sentimental' about Paramount, recalling watching movies there
as a boy. 'It'll be nice if they can name the new place Paramount,'
he said.

Mr Chye said that is an option under consideration, admitting he is
nostalgic as well. 'My brother and I used to watch the movies from
the projector room,' he said.

The cinema closed in the early 1980s. The place was then occupied by
a series of tenants, including Fitzpatrick's supermarket, a skating
rink, Burger King and appliance chain Electric City.

Today, the mall's main tenants include DBS Bank, Coffee Bean & Tea
Leaf and Cafe Cartel.

FairPrice, which has been there since the early 1970s, said it is
excited about the redevelopment.

Managing director Seah Kian Peng said: 'Over the years, we have built
a close relationship with the community in Serangoon Gardens. Some of
our staff have worked at the store for many years and have become
familiar, friendly faces to many of the residents.

'We certainly want to be back there and will try our best.'

The new complex will have a supermarket as an anchor tenant and
a 'gourmet floor'. Mr Chye said about 40 per cent of the space will
be for food and beverage outlets. The rest will be taken up by the
supermarket, shops, grooming outlets, spas and banks.

He said Chye Lee & Sons, a property development company he runs with
his twin brother Edward, has received numerous inquiries about shop
space from well-known firms.

The new mall will have two floors and a basement carpark twice the
size of the current above-ground one.

The complex's floor area will jump to 62,000 sq ft - from 39,600 sq
ft - and its shop space will increase to 38,000 sq ft from 31,700 sq
ft.

Mr Chye has picked home-grown DP Architects to design the new
development and Knight Frank to market it.

Sep 4, 2008

Economists lower growth forecast
MAS survey reveals a more bearish outlook, with a 4.2% expansion
By Alvin Foo

PRIVATE sector economists are becoming more bearish over Singapore's
growth prospects for this year, as the global economic slowdown
tightens its grip.

On average, economists now expect 4.2 per cent expansion this year,
according to the latest Monetary Authority of Singapore survey
released yesterday.

This is still regarded by economists as solid growth, given grim
global conditions, but it is well down from the 5.5 per cent they had
predicted in the previous quarterly poll in June.

Next year's growth is expected to be 4.6 per cent, the survey found.
The economy grew a zippy 7.5 per cent last year.

The revision comes amid growing signs of an economic slowdown here,
including a retreat in exports in recent months, and the worst
manufacturing slump since late 2001, recorded in July.

Last month, the Government lowered its 2008 growth target from a
range of 4-6 per cent to 4-5 per cent, citing weakness in the global
economy.

The MAS said statistical analysis of the Aug 11 survey sent to 24
private sector economists, of whom 20 responded, suggested growth was
likely to come in this year at between 4 and 4.9 per cent.

Economists foresee more gloom ahead, with several likely to cut their
growth forecasts in the coming weeks.

CIMB-GK economist Song Seng Wun told The Straits Times: 'The 4.2 per
cent figure is still surprisingly high. The survey results are a
little too optimistic, given the poor July factory output figures and
downgrading of forecasts by most OECD (major industrialised)
countries.'

Mr Song, who is tipping 3.5 per cent growth, expects the forecast to
dive by about one percentage point in the year-end MAS survey as
optimism dims.

Economists have also cut their forecast for third-quarter growth from
3.7 per cent to 2.7 per cent. Inflation is tipped to hit 6.4 per cent
this year, up from the 6 per cent forecast earlier. Unemployment is
expected to rise to 2.5 per cent, higher than the 2.2 per cent in the
June poll.

Standard Chartered Bank economist Alvin Liew, who expects 3.5 per
cent growth this year, believes manufacturing weakness will lead the
economy into a technical recession - two consecutive quarters of
negative growth.

He said: 'The high bases built up in 2007 for many of the star
industries like the financial sector, marine engineering and
construction are unlikely to offer sufficient offset to the
manufacturing sector's slowing momentum.'

He added that the potential benefits of the F1 Grand Prix race this
month is untested and 'unlikely to give that much boost to retail
sales'. The construction sector's boom is 'too small to make a big
difference' as it makes up about 4 per cent of economic output.

But all is not gloom and doom. HSBC economist Robert Prior-
Wandesforde said: 'The fundamentals for domestic growth remain
extremely good - low interest rates, a very accommodative fiscal
policy, double-digit job growth and strong gains in HDB flat prices.'

He expects 5.8 per cent growth, but says he will cut this in coming
weeks.

One bright spot was a 15 per cent surge in overall spending at home
year-on-year in the second quarter, thanks mainly to a 25 per cent
rise in investment, he said.